DfE apologises over error in school funding calculation

Gillian Keegan has ordered a formal review after her department revealed a mistake in the national funding formula allocations for schools for 2024-25

6th October 2023, 6:29pm

John Roberts

The Department for Education has revealed that it has made an error in its calculations for school funding allocations for 2024-25.

The admission came in a letter from DfE permanent secretary Susan Acland-Hood to the Commons Education Select Committee chair, Robin Walker.

There was an error processing forecast pupil numbers in the national funding formula (NFF), which means that the overall cost of the core schools budget would have been 0.62 per cent greater than stated in the original calculation published in July.

The DfE said that the error impacted the amount of funding allocated to individual schools, but it has not said how many schools have been affected. It has updated its National Funding Formula document accordingly, see here.

The previous national figure was a rise of 2.7 per cent per pupil for 2024-25; in the document, it has been revised to 1.9 per cent per pupil for the same period. The total amount allocated for the core schools budget for the period will be the same as previously stated.

Headteachers’ leaders have warned the accounting error may force some schools into having to rethink already tight budgets.

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Education secretary Gillian Keegan has ordered a formal review following the error.

This will involve assessing the quality assurance process surrounding the calculation of the NFF with independent scrutiny.

Schools have not yet received their 2024-25 funding, so the correction of this error does not mean adjusting any funding that schools have already received.

The error will also not impact the publication of the Dedicated Schools Grant (DSG) in December, nor when schools will receive their final allocations for 2024-25, the DfE said.

DfE error in school funding calculations

In the letter to Mr Walker, Ms Acland-Hood said: “The recalculation of funding does not affect the total amount we plan to spend in the core schools budget in 2024-25 - which includes funding for mainstream schools and funding for high needs.

“It will remain at £59.6 billion in 2024-25, the highest ever in real terms per pupil. This is a percentage increase from 2023-24 of 3.2 per cent, and will properly fund the teacher pay increase agreed in 2023.”

The 2024-25 high-needs NFF allocations, which fund provision for children with special educational needs and disabilities (SEND), are unaffected by the mistake, as are other funding streams outside the NFF.

The letter concludes: “I expect you will have further questions on the republication of the NFF once it has been issued, and look forward to discussing them with you in due course. Again, I would want to express my sincere apologies that this error has occurred, and reassure you that rigorous measures are being put in place to ensure that it will not be repeated.”

‘Chaos at the heart of government’

Paul Whiteman, general secretary of the NAHT school leaders’ union, said: “Today’s announcement that the DfE has incorrectly calculated the national funding formula for 2024-25 speaks volumes about the chaos at the heart of the government.

“School leaders will be rightly angry that basic accounting errors may force them to rethink already tight budgets as a result of the erroneous figures they were provided. Many may now have to revisit crucial decisions around staffing or support for pupils as budgets are reduced.”

Geoff Barton, general secretary of the Association of School and College Leaders, said: “This is an extremely unfortunate and frustrating error. Even though schools have not received their 2024-25 funding, it is likely that trusts and local authorities will have used the incorrect figures in their budget planning and will now need to revise those budgets with the corrected figures.

“This is the last thing they need on top of all the other demands on their time.”

Keziah Featherstone, headteacher and spokesperson for the Headteachers’ Roundtable, added: “We are frustrated and angered by yesterday’s very late announcement that school funding has been inaccurately calculated due to an internal error. Schools are buckling under rising costs, unfunded pay rises, insufficient funding for SEND, crumbling school buildings, a retention and recruitment disaster and post-pandemic mental health crisis. The impact of this will be horrific and long lasting; our children deserve better.”

The DfE letter in full

Susan Acland-Hood’s letter to Robin Walker, chair of the Commons Education Select Committee.

Dear Robin,

I am writing to inform you that we will be updating the schools national funding formula (NFF) for 2024-25 later this afternoon. We published the schools NFF for 2024-25 in July.

However, we have uncovered an error made by DfE officials during the initial calculations of the NFF. Specifically, there was an error processing forecast pupil numbers, which means that the overall cost of the core schools budget would be 0.62% greater than allocated.

We will therefore be issuing new NFF allocations to correct that error while continuing to deliver, in full, the £59.6 billion core schools budget that has been promised.

I apologise for this error. The secretary of state has asked me to conduct a formal review of the quality assurance process surrounding the calculation of the NFF, with independent scrutiny. Improvements have already been identified to ensure similar mistakes are not repeated in the future.

The recalculation of funding does not affect the total amount we plan to spend in the core schools budget in 2024-25 - which includes funding for mainstream schools, and funding for high needs.

It will remain at £59.6 billion in 2024-25, the highest ever in real terms per pupil. This is a percentage increase from 2023-24 of 3.2 per cent, and will properly fund the teacher pay increase agreed in 2023.

The recalculated funding is at record levels, at an average of £5,300 per primary-school pupil and £6,830 per secondary-school pupil in 2024-25, up from £5,200 and £6,720 respectively in 2023-24.

The 2024-25 high-needs NFF allocations (which fund provision for children with complex SEND) are unaffected, as are other funding streams outside the NFF, including the Teachers’ Pay Additional Grant announced in the summer.

Schools have not yet received their 2024-25 funding - so the correction of this error does not mean adjusting any funding that schools have already received. Likewise, the error will not impact the publication of the Dedicated Schools Grant (DSG) in December, or when schools will receive their final allocations for 2024-25.

Nevertheless, we recognise that the correction of this error will be difficult for local authorities and frustrating for some school leaders, which is why the department has worked as quickly as possible to rectify the error.

We will work closely with school stakeholders, including unions, to communicate this change and support schools and local authorities.

The documents which will be updated and replaced with new versions today are:

I expect you will have further questions on the re-publication of the NFF once it has been issued, and look forward to discussing them with you in due course. Again, I would want to express my sincere apologies that this error has occurred, and reassure you that rigorous measures are being put in place to ensure that it will not be repeated.