The Department for Education announced at the end of the week that it had made an error in calculating schools’ National Funding Formula (NFF) allocations for 2024-25.
The mistake has meant that school funding figures the department published in July for the next academic year were overly inflated and were some £370 million wide of the mark.
Permanent secretary Susan Acland-Hood has apologised for the mistake and revealed that education secretary Gillian Keegan had ordered a review into the matter.
The DfE has issued new calculations with lower per-pupil funding increases. The mistake was due to “incorrect processing of pupil numbers”, the DfE has said.
Union bosses warned that it was likely the error would have an impact on already tight budgets, especially where local authorities and multi-academy trusts (MATs) had already used the incorrect figures in their planning.
Here’s everything we know so far about the impact of the error, and the questions still left to be answered.
How did the DfE funding error happen?
Tes understands the error related to the DfE’s handling of a local authority, which had split into two separate areas but it had only included one area’s pupils in calculations.
This resulted in allocations broken down by school being incorrect.
This was put to the DfE, who reiterated that the mistake was down to a “technical error”.
How big was the error?
In Ms Acland-Hood’s letter to Commons Education Select Committee chair Robin Walker, she said that the error processing pupil forecast numbers meant “the overall cost of the core schools budget would be 0.62 per cent greater than allocated”.
The overall budget for 2024-25 is £59.6 billion meaning a 0.62 per cent mistake would equate to around £370 million. The DfE has not challenged this figure.
Daniel Kebede, general secretary of the NEU teaching union, said at the weekend that schools are faced with having to make £370 million cuts as a result of the mistake coming to light.
What does it mean for schools?
Schools had previously been told that funding through the NFF was increasing by 2.7 per cent in 2024-25 compared to 2023-24. That figure has now been revised to 1.9 per cent.
Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), said: ”Minimum funding has been reduced by £55 per secondary pupil and £45 per primary pupil. A 1,000-place secondary would be £55,000 worse off on this basis.
“However, funding differs widely depending on various factors and the impact of the DfE’s error will vary.”
Has the total funding for schools been cut?
The overall funding remains the same. In its new NFF Document issued on Friday, the DfE said the total amount in the core schools budget will remain at £59.6 million.
However, it does mean that the amounts schools will have been told to expect were wrong and too high, and they may be forced to make cuts to any previously planned budget as a result.
The mistake related to NFF calculations for schools block funding for mainstream primary and secondary schools.
It is unclear exactly how many schools will face a reduction, but ASCL’s funding specialist Julia Harnden said the “majority” of schools will be down on what they were expecting as a result of the department’s mistake.
Will schools have money clawed back?
No. The error that has been uncovered is related to 2024-25 and were indicative figures. Schools have not yet been issued this funding or given final funding totals.
How long has the DfE known about the error?
A spokesperson for the DfE confirmed that the error has been known about since September but did not say exactly when.
Schools and councils were not informed of the mistake until 6 October once revised calculations had been made.
ASCL has asked the DfE for a more specific date on when the error was discovered.
What has the impact been on schools, MATs and councils?
For schools, MATs and councils that had started financial planning based on July’s erroneous figures, it will mean going back to the drawing board.
“Funding differs widely depending on various factors and the impact of the DfE’s error will vary. This has placed schools in the invidious position of having to reduce planned expenditure and resubmit budgets,” Mr Barton added.
Many schools, councils and MATs are still quantifying the impact. For those who had already started planning how to spend their allocations for 2024-25, it will likely mean doing at least some of the work again.
Chris Munday, chair of the Association of Directors of Childrens Services (ADCS) Resources and Strategy Policy Committee, said: “Many authorities would have been working with their Schools Forum on their medium-term financial planning based on the July figures, so the error made by the DfE will have an impact on that planning.”
The ADCS represents the education departments of local councils responsible for the oversight of all state school funding in their authority areas.
‘Clearly schools and trusts started planning based on incorrect numbers’
Dan Morrow, CEO of Dartmoor Multi-Academy Trust, told Tes: “It’s going to lead to a need to have a look again at our resource allocations, which may well involve people as well as resources.
“We’ve done our entire staffing model for next year, we’ve done our curriculum plans, etc, to meet it. And we had also been looking significantly at how we could use some of the funding for next year strategically to improve our offer in nurseries.”
Mr Morrow said he was particularly worried about the impact of the revised down calculations on his smaller schools.
Confederation of School Trusts chief executive Leora Cruddas said: “The correction to funding allocations is challenging but our understanding is that whilst this could affect some school trusts’ medium term financial planning there is no impact on the current academic year.
“The funding formula is complicated and this appears to have been an unfortunate technical error by the Government, but total funding will be as promised at an overall rise of 3.2 per cent on last year. We are working with the DfE and trusts to ensure there is clarity on what trusts can expect to receive in future, and we continue to call for longer term funding arrangements to help trusts plan ahead with certainty.”
Jon Andrews, director for school system and performance at the Education Policy Institute, said: “The provisional allocations provided by the DfE typically provide a useful illustration of how the NFF will operate and the overall level of funding.
“They are always then subject to the application of local funding formulae and the use of updated pupil numbers and so not necessarily what an individual school will receive, but clearly schools and trusts would have started planning based on incorrect numbers.
“There is, of course, a broader handling point about the DfE making this announcement late on a Friday.”
The DfE has claimed individual schools mostly wouldn’t start planning until they received finalised pupil numbers in December.
What will happen next?
Ms Keegan has ordered a formal review of the quality assurance process around the calculation of the NFF.
The ASCL told Tes it is gathering evidence from its members about the impact. Mr Kebede said at the weekend that there are grounds to reopen the NEU’s pay dispute following the NFF recalculations.
Union leaders are expected to meet with DfE officials later this week to demand answers over the impact of the error. It is expected this meeting could take place on Thursday.
DfE says mistake does not impact pay deal affordability
The DfE has said funding for the teacher pay award will not be impacted by the mistake with the NFF.
In correspondence to education unions, seen by Tes, the DfE said it had already judged a 3.5 per cent pay award to be affordable from existing school budgets.
In July, when the teacher pay award was announced, the DfE said it announced extra funding that would cover 3 per cent of the teacher pay award.
The correspondence says: “The republication of the 2024-25 NFF does not in any way impact the affordability assessment which formed the basis of the Teachers’ Pay Additional Grant and the settlement agreed in July.
“Indeed, that affordability assessment was made even before the original (subsequently incorrect) NFF allocations (these were published in July 2023; our affordability assessment in February-March 2023).”
