Ministers expect all schools to have their budgets set centrally under a national funding formula by 2027-28, a consultation published today states.
The Department for Education consultation sets out detailed plans for the long-awaited move to a “direct” funding formula for schools, under which funding allocations for individual schools will be determined centrally, without much local adjustment.
The department hopes that it may be able to move to the full national funding formula (NFF) “sooner” than 2027-28 - “but not later”.
The DfE has also said today that it is “not setting a definitive final ‘end date’ at which the direct NFF will be implemented”, due to the importance of continuing to be “guided by the impact of the initial transition towards the direct NFF, before deciding on the further pace of change”.
It added: “However, to give a sense of the likely timescales to inform schools’ and local authorities’ planning, we are setting out that we expect to have moved to the direct NFF within the next five years - that is, by the 2027-28 funding year.”
The move to centralised school funding
The NFF has been repeatedly delayed since its announcement in the 2010 White Paper.
It was launched in “soft” form in 2018-19, retaining councils’ flexibility over how individual school budgets were set.
But, in a consultation last summer, the department confirmed its intention to move to a direct funding formula for mainstream schools in which budget allocations were made centrally.
Writing in the consultation document today, schools minister Robin Walker said the commitment to the direct NFF was driven by the department’s desire for a “fair”, “simple and transparent” and “efficient and predictable” formula.
Mr Walker said the move to a direct NFF will support the 2030 target for all children to be taught “in a family of schools, with their school in a strong multi-academy trust or with plans to join or form one”.
Under the current system, multi-academy trusts’ academies can be funded on a different basis if the trust is spread over more than one local authority area.
The consultation states that the direct NFF will ensure that “all academies, and all schools, are funded on a consistent basis, wherever they are in the country”.
Tes has asked the DfE for clarification over whether this means a MAT would still be able to reallocate funds between schools in its trust.
Despite the initial push for a “hard” NFF that would bypass local authorities, today’s consultation allows for a softer and more flexible approach in some aspects; for example, in its approach to growth funding, which pays for short-term increases in pupil numbers and bulge classes.
Here, the DfE found significant variation in the amount of funding a school would receive for a primary bulge class of 30 pupils across different areas of the country in 2022-23.
On average, schools were given £74,000, but due to differences in the way the funding was calculated by local authorities, this ranged from a minimum of £31,000 in Bexley to around £195,000 in Tower Hamlets - “a six-fold difference in the amount of funding made available”.
Today’s consultation, rather than calling for a nationally set system for allocating growth funding, says the department’s “favoured approach” would offer continued flexibility in how local authorities distribute the money, “but with significantly greater consistency than in the current system”.
The legislation for the move to a direct NFF was included as part of the Schools Bill, which was introduced in Parliament on 11 May 2022.
