FUNDING FOR PUPILS FROM DEPRIVED
BACKGROUNDS
23. Jonathan Thompson told us that one of the issues
the Department wanted to examine was the link between funding
and deprivation:
"There are various different models which you
could develop between those two, some of which potentially might
lead to a greater differentiation of schools funding around the
system. Clearly that is something which we want to have a look
at because eventually the funding is only really based on two
major factors: one, the number of pupils and secondly the whole
question of how we differentiate according to various measures
of deprivation. It is that second part which we want to have a
look at to see what our options are around the distribution of
funding."[12]
24. We asked if there was a move towards a national
funding formula, something that our predecessors had predicted
would be the logical conclusion of the Government's funding reforms.
David Bell said that was clearly not currently the case, with
local school forums having a role in agreeing allocations.[13]
The distribution in each local area is also determined by local
funding formulae. David Bell told us:
"It is worth just remembering that the dedicated
grant came out of a very substantial concern that money that the
Government had intended to be spent on schools was not always
being so spent. There has always been this tension between what
you enable to happen nationally by funding requirements and what
you allow local discretion over. If you mean by national funding
formula a single national model that would apply in every local
authority area that is certainly not on the cards."[14]
25. This issue of providing greater funding for pupils
from deprived backgrounds wherever they live is one that we have
looked at before. In our previous expenditure report of this session,
we said that we expected the Government to take both transience
and the provision of extra funding for individual pupils from
disadvantaged backgrounds into account in developing the new formula.[15]
In its response, the DfES said:
"The funding mechanism for DSG will distribute
funding for personalisation to all local authorities, not just
to those with high levels of deprivation, as suggested in the
Committee's report. Moreover, the formula used by the Government
to distribute funds under the previous system (Schools Formula
Spending Shares) has always taken account of all deprived pupils,
not just those in deprived areas. But we agree with the Committee
that this funding needs actually to reach deprived schools and
pupils: local authorities need to make further progress in targeting
the funding for pupils from disadvantaged backgrounds that they
receive through Dedicated Schools Grant; and local authorities
need also to take account of the link between transience and outcomes
in relation to pupils from disadvantaged backgrounds."[16]
The Secretary of State also acknowledged that "it
would be good to have a better method and a better determinant
of how that money can follow [deprived pupils] absolutely".[17]
26. There is a series of interactions here which
need to work together if there is to be a significant benefit
for disadvantaged children. The new national funding arrangements
need to be geared to address the issue of deprivation; the DfES
makes much of personalisation, and we agree that this is likely
to assist children from deprived backgrounds, but disadvantaged
children's needs are likely to be greater than others' and therefore
likely to require more resource to be addressed effectively. Local
funding formulae also need to be constructed to target deprivation,
while the role of the schools forum needs to be made clearer.
If national and local distribution formulae allocate money on
the basis largely of pupil numbers and deprivation measures, what
scope is there for schools forums to change them? What are the
mechanisms by which they seek to deliver the overall objective?
These issues need to be considered in the consultation on the
new formula.
27. The Government will have to make explicit decisions
about the allocation of resources from authority to authority,
unless a national funding formula is introduced. "Deprivation",
though an important indicator of expenditure need, is not the
only one. Others include sparsity, transience and not speaking
English as a first language. Moreover, there is a trade-off between
"fairness" and stability. The Minimum Funding Guarantee
used since 2004-05 to prevent substantial reductions in funding
for individual schools suggests stability is the Government's
overriding objective. If so, fairness will, inevitably, become
a secondary concern. Finally, there should be broad consistency
between the objectives
of any schools' funding formula and authorities'
local funding formulae.
28. The other key thing that the new formula needs
to deliver is transparency. The schools' funding system, like
many other areas of public expenditure, has been dogged by complexity
and opacity. We accepted earlier in this report that the need
for accuracy in information from the Department can breed complexity.
Nevertheless, one of the
main aims for the new funding system ought to be that it is as
comprehensible as possible, so that head teachers, governors and
parents are able to understand how funding decisions for their
schools are arrived at.
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