The Confederation of School Trusts (CST) is calling for a major overhaul of the way schools, special needs places and school building projects are funded.
The sector body for academy trusts has published a report today calling for existing funding calculations to be replaced with new systems “to improve fairness and transparency”.
After consulting with school leaders, the CST said the current system is “too unpredictable, is not calculated against the actual costs facing schools, and has failed to keep up with moves to a trust-led system”.
Under proposals in the CST’s new report Funding Futures, it proposes a new fully implemented National Funding Formula (NFF), a new approach to funding special educational needs and disabilities (SEND) and alternative provision (AP), more holistic capital funding and a new policy premium mechanism.
A new approach to school funding
CST chief executive Leora Cruddas said that school funding needs to be distributed “in a way that reflects actuals costs and ways of operating in schools and trusts today”.
“If the English state school system is going to be the best system in the world at getting better, it needs funding that enables it to flourish, and that is what our proposals are aimed at delivering,” she added.
The proposed new NFF would integrate additional funding like the pupil premium; cover minimum operating costs of all schools, including SEND and AP settings; and be uprated to reflect changes to pay and pensions.
The CST said there was a risk of a real-terms fall in school funding due to increases in school costs, despite the government aiming to bring per-pupil funding back up to 2010 levels.
Research by consulting firm Compass Lexecon found that a 10 per cent increase in spending on primary and secondary education could generate £1,100 billion from 2024 to 2080.
Protected minimum funding for SEND and AP
As well as having protected minimum funding for SEND and AP through the new NFF, the CST proposes that additional funding should be provided for “ambitious, tailored provision”.
The report says that a funding model for special schools based on £10,000 per commissioned place is no longer appropriate.
Special schools and AP settings are currently funded at £10,000 per place, and mainstream settings get basic funding per pupil plus £6,000 to support pupils with additional needs.
The CST said the costing behind this dates back to research conducted in 2009, which identified that when the cost of supporting a child with additional needs exceeded £10,000, incidence in mainstream schools dropped. Place funding has not changed since it was introduced.
Rob Williams, senior policy adviser at the NAHT school leaders’ union, said the figures reflected “the complete mismatch” between SEND demand and the funding available.
Problems with capital funding
The CST’s proposals also seek to address issues with capital funding across the sector.
It suggests replacing the current “competing and piecemeal pockets [of capital funding] that are inaccessible” with a new holistic funding pot.
Currently larger trusts receive School Condition Allocations (SCA), while smaller trusts have to bid for the Condition Improvement Fund (CIF). In this year’s CIF allocations the number of schools receiving the funding dropped for the second year in a row.
The CST also proposes that a national plan be introduced for the maintenance and improvement of the school estate, funded separately to core education delivery.
Its report says that the Department for Education has estimated that repairing or replacing defective elements in the school estate will cost £11.4 billion.
The report adds: “We think it unlikely any government will commit to funding over £11.4 billion of capital using tax revenue. If that is true, a radical rethink is needed to establish ways that the private sector can be instructed and incentivised to support delivery.”
It says this should not be a return to private finance initiatives (PFI) of the past, which it says have left significant challenges across the school estate.
The report gives examples of how money could be raised to fund capital for school buildings. These include ring-fencing “a small percentage figure that sits alongside corporation tax as a Civic Duty Levy, specifically to fund a national programme of school estates maintenance and rebuilding”.
Alternatively the report suggests the government could establish a new programme of private sector financing for the education sector “that does not result in long-lasting expensive contracts which trap schools”.
Short-term needs
And finally, the proposals recommend introducing a “policy premium mechanism”. This is intended to be a route for additional, short-term funding for schools needed due to a change in circumstances until it can be embedded in the new NFF.
The report also flags up frustrations in the sector at having to produce three-year budget forecasts without certainty over some of the costs that should be covered in those budgets.
“If nothing else changes, a consistent approach to delivery, reporting and timing would have a significant positive impact on a trust’s ability to plan and budget more effectively,” the CST said in its report.
A Department for Education spokesperson said: “Overall, including additional pay and pensions grants, we are increasing school funding to £60.7 billion next year, the highest level ever in real terms per pupil.
“The National Funding Formula ensures funding is distributed fairly, based on the needs of each school and their pupils, and that every school gets higher pupil-led funding compared to the previous year.”
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