The government’s consultation paper on fair funding is a courageous attempt to solve a problem that has existed for far too long.

Different levels of funding for schools in different areas came about because, prior to 1990, local authorities decided how much they would allocate to schools. Some 80 per cent of the funds available to local authorities were raised through local rates, the level of which was decided by local politicians. Only 20 per cent of local funding came from central government. Places like London and Manchester put a lot more money into their schools than counties such as Leicestershire or Dorset, or boroughs such as Stockport and Trafford.

Every change to school funding since then has cemented those differences more firmly, basing the changed system on historic funding levels. Unfairness has built on unfairness, so that the funding advantage enjoyed by schools in some parts of the country has been cumulative and schools in the worst-funded places like Poole and South Gloucestershire have fallen further and further behind in education provision.

The Association of School and College Leaders (ASCL) has campaigned for fairer funding since the early 1990s, when Peter Downes, now a Cambridgeshire county councillor but then a head in that badly funded county, wrote a paper under the title Fair Funding, a phrase that has now passed into the education lexicon.

I recall being on an ASCL delegation with Peter to the Department of Education and Science, as it was called in those days. We put our case to the Conservative minister, the late Eric Forth, who replied bluntly: “Changing school funding would create winners and losers. The winners will keep quiet and the losers will shout loudly, so the government will face a great deal of public criticism, which will lose us votes. So, unjust as the present system is, we are not going to change it.”

Kicking the issue into the long grass, the government established the Education Funding Strategy Group (EFSG), which examined in detail the implications of introducing a fairer funding system and met, under the leadership of a senior official, over the course of several years.

Meanwhile, local management of schools (LMS) was introduced in 1990, delegating funding to schools. There were winners and losers in this new system, so LMS was phased in over a four-year period. Injustices remained, however, as the total funding of each local authority remained unchanged and was still based on historic factors.

The work of the EFSG continued until 2003, when the rising level of school funding under New Labour provided the best opportunity to adopt a fair funding formula. Winners would gain, but losers would not lose in absolute terms; they would just stand still. Unfortunately, in that same year, several changes occurred in the way that schools were funded and the department’s funding team did not appear to have modelled the cumulative effect of the changes on individual schools. As Eric Forth would have predicted, the winners remained quiet and the losers hit Charles Clarke with a barrage of questions at the ASCL annual conference that year, prefacing their questions with statements such as “This is the worst funding settlement in my 15 years as a head”. Not surprisingly, Charles Clarke found this difficult to believe, knowing how much the Labour government had improved school funding since the end of the Conservative government cuts in 1997. But the headteachers had the evidence and the cause was the number of simultaneous changes to funding.

The minimum funding guarantee (MFG) that Charles Clarke introduced in 2003 stabilised the situation for schools that lost money, but meant that the opportunity to introduce the long-argued EFSG formula was lost.

Under the latest government proposals, local authorities are to be written out of the funding picture in the reformed system, which contains four different factors:

• Basic per-pupil funding
• Funding for additional needs, such as deprivation, low prior attainment and English as an additional language
• School costs - the fixed costs that schools have to meet
• Area costs to pay for the higher salaries in the South East, for example

The weighting between factors is not known at this stage and will have a major bearing on the final funding level in each school. The extent to which deprivation funding is moved into the school formula is also a critical factor.

The government has said that the pupil premium will remain as a clearly identifiable funding stream, which is good news. Pupil premium may not cover every pupil, but it reaches many more than other deprivation funding methods that central governments have used. It amounts to over £2.5 billion per year, while local authority deprivation funding totals £2.4 billion. While the pupil premium funding has clarity of purpose and clear accountability for impact, local deprivation funding has little clarity and is almost certainly inequitable between disadvantaged pupils and schools, depending on what part of the country they are in. When this becomes part of the fair funding formula, some schools can expect considerable change in funding level.

So, while the government has taken a first step in the right direction, the second round of consultation should clarify the issues currently in doubt and will give a strong indication of the winners and losers.

John Dunford is chair of Whole Education, as well as a former secondary head, general secretary of the Association of School and College Leaders and national pupil premium champion
@johndunford

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