8 March 2017 weekly update

Dear Colleague

Response to the Consultation on Schools National Funding Formula

As you know the DfE is currently consulting on the introduction of a National Funding Formula (NFF) from 2018-19. The consultation closes on 22 March and KCC has just submitted its response (DOCX, 53.5 KB). I would encourage you to respond to the consultation with your views.

Overall, Kent County Council (KCC) welcomes the proposals and the commitment to having a fairer funding arrangement for schools. In particular we welcome the fact that the proposed funding formula indicates a total gain of £28 million for Kent and its schools once the national formula is fully implemented, but we believe that this has to be tempered by an outcome that none of us really anticipated: that some of our schools will lose out.

There are key elements of the government’s proposals that KCC would like to see amended, namely:

1. The 3% funding floor, which locks in historical differences
2. Weakness of evidence for proposals and continued use of averages
3. The proportion of weighting given to AEN rather than basic entitlement
4. Quantum and spending cuts.

The 3% funding floor, which locks in historical differences

One of the key principles set out by the DfE in their Stage 1 consultation, was that pupils of similar characteristics should attract similar levels of funding wherever they are in the country (allowing for the area cost adjustment). When the funding formula to be implemented is deemed fair, it should be applied to all schools on a consistent basis.

However, the proposed 3% funding floor “locks” in some of the historical differences for those schools which have been overfunded for several decades and perpetuates the unfairness in the funding system. Our specific concern is in relation to the permanent nature of the floor. We appreciate the Government is trying to strike the right balance between fairness and stability. However, while stability in school funding is important, it should not be at the price of never reaching a fair formula and outcome.

The cost of this protection limits the redistributive impact and will result in the continuation of different funding levels for pupils across the country.

Weakness of evidence for proposals and continued use of averages

As with the first stage of the consultation, there is still a basic weakness in that there is no commitment to a definition of what the government is actually funding. The emphasis is on redistributing money more fairly, which is fine as a principle and long overdue, but without some clarity on what level of service the money can purchase there is a danger that the new system does not take us much further forward.

It is disappointing to see the continued use of averages, which reflect what Local Authorities can currently afford to do, rather than a needs-based model which can evidence that the proposed funding levels are sufficient to cover the required costs of operating schools of different sizes and levels of needs wherever they are in the country. As part of the ongoing strategic approach to schools funding we would urge the DfE to undertake to analyse and assess activity led funding to be factored into the funding formula rates prior to the implementation of the hard formula in 2019-20.

Without the underlying understanding as to what the government is funding it is difficult to understand the rationale for the basic entitlement compared to the additional needs. The proposals state that there has been a deliberate movement of funding into additional needs, partly to support those “just about managing” families, but we do not consider that the additional needs indicators do support those families and therefore by reducing the basic element of funding this could be having the opposite effect to that intended.

The proportion of weighting given to AEN rather than basic entitlement

Our initial reaction is that too much funding is directed towards deprivation and that when Pupil Premium is also taken into account this could be considered as double funding. Our concern is that the amount of funding some schools, specifically those who do not attract much additional needs funding, are set to receive is now insufficient to cover the core costs of running a school. To support this view we have shown in the tables some examples of Kent Secondary school per pupil rates (including Pupil Premium). You will notice that the difference between the two is growing.

In addition our view is that the DfE should explain what the difference is between the deprivation funding in the main funding formula and pupil premium, and more specifically what each element should be spent on.

Quantum and spending cuts

KCC understands that this consultation is about finding a fair funding methodology and not, at this time, about the quantum of funding available. But, schools in lower funded areas like Kent have been making cuts for many years, to absorb annual inflationary pressures, and have reached the limit of where cuts can be made. We recognise the work that the DfE has undertaken in supporting schools in making efficiencies, although in practice we believe this has resulted in limited additional efficiency savings being realised in Kent schools. This is because the majority of these efficiencies were already realised as we have traditionally been one of the lower funded LAs, so we are struggling to understand where more cuts can be made without having a detrimental impact on the teaching and learning within our schools.

The reductions to school sixth form funding, which commenced in 2013, have had a significant impact on our Secondary school budgets. These reductions have been felt in many Secondary schools, and most particularly in Kent selective schools, and have resulted in a significant narrowing of the courses on offer to post 16 students.

We understand that the DfE believes that £1 billion worth of further cuts are available within the system, but we consider that unrealistic and unachievable without significant impact on the teaching and learning within schools.

For more information on the KCC consultation response please contact Simon.Pleace@kent.gov.uk, Finance Business Partner for Education and Young People’s Services.

Patrick Leeson, Corporate Director Education and Young People’s Services