School funding
16. Of the £27 billion budget for schools in
England, £25 billion is spent through local education authorities.
The Department allocates funds to the authorities through a formula
funding system that aims to provide the same funding for all comparable
pupils across the country. The formula takes account of factors
such as deprivation (as measured, for example, by the percentage
of children of families in receipt of Income Support or the Working
Families Tax Credit), the percentage of children (in primary schools)
with English as a second language and (in secondary schools) from
low achieving ethnic groups. Further funds are provided to deal
with the extra costs of educating deprived pupils, and of recruiting
and retaining staff in areas with the highest wage costs. The
needs of sparsely populated areas are also reflected.[24]
17. It is for each local education authority to decide
how the resources allocated to it are distributed to schools within
the authority, using locally agreed formulae. The authority does
not have to follow the national formula, though it does have to
relate the money to pupil numbers.[25]
The Government is committed to achieving the highest possible
level of delegation to schools that is compatible with the need
for local education authorities to retain the resources they need
to carry out their own essential functions, and in recent years,
authorities have delegated an increasing proportion of the funding
for schools to spend themselves. Local education authorities delegated,
on average, 87.2% of funding to schools in 2002-03. Most of the
funding they retained related to such items as school transport,
special educational needs, out-of-school education and behaviour
support, and school improvement.[26]
18. The funding of schools is very complex. The number
of different strands is hard to determine but could have reached
as many as 70. The Department acknowledged that there were too
many strands, and it is trying to simplify the arrangements by
reducing the number of funding streams to five major budget lines.
However, the Department did not know how long this would take.
The complexity of funding and lack of certainty about the funds
a school will receive from year to year have been common complaints.
Not all schools are getting a fair share of resources, and a lot
of the difficulties with school funding last year resulted from
introducing a new formula aimed at distributing resources according
to need.[27]
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