3 Schools' funding
34. The schools' funding system was reviewed in the
run-up to CSR 2007. However, it was decided that no reform was
to be made in the immediate future: it is proposed to continue
with the "spend plus" method of allocating Dedicated
Schools Grant (DSG) for the three years from 2008-09 to 2010-11.
During this period, there will be a further examination of the
subject with a view to possibly developing a new formula for allocating
DSG between authorities from 2011-12 onwards.
35. In the 2008-09 to 2010-11 settlement, the Government
will hold back a margin of funding to distribute in line with
ministerial priorities. Thus, for example, there may be a new
allocation of DSG so as to provide additional resources for pockets
of deprivation and to allow schools in previously 'under-spending'
areas to catch up with others. The Minimum Funding Guarantee is
to remain in place in 2008-09, but with the minimum increase in
resources per pupil set at 2.1%, compared with 3.7 % in 2007-08.
36. The DCSF has recently announced allocations of
DSG for 2008-09 to 2010-11. Basic per pupil allocations of DSG
will rise by 3.1% in 2008-09, 2.9% in 2009-10 and 2.9% in 2010-11.
Funding for ministerial priorities (allocated outside the DSG)
will add 1.5%, 0.8% and 1.4% respectively to these figures, leading
to an overall year-to-year rise per pupil of 4.6% in 2008-09,
3.7% in 2009-10 and 4.3% in 2010-11.
37. We asked the Secretary of State how the review
of schools funding was progressing. He told us:
"We expect to do the substantial work on the
schools funding review over the summer, and we have not yet published
detailed terms of reference for that review[21].
The idea is to be able to inform decisions for three-year budgets
following this spending review period, so we still have a number
of years to prepare. We will need to look carefully at the underlying
assumptions underpinning the current "spend plus" formula
[…] and how far they have changed, how far we need to make
adjustments to the formula, whether we are getting the right balance
between stability and deprivation and whether we need to do more
to focus on pockets of deprivation within more affluent areas."[22]
38. The issue of the extent to which the schools
funding formula takes account of deprivation and how it might
be more targeted is one that our predecessors discussed on a number
of occasions. The Secretary of State said:
"At the moment, within the overall dedicated
schools grant, about 10%—slightly more than £3 billion;
about £3.5 billion of that £36 billion DSG—goes
on deprivation spend, so there is already a substantial chunk
of expenditure there. However, that is within the context of an
historical set of arrangements. Clearly, there is a balance to
be struck between the pace of change and stability. I am not going
to prejudge the review by saying that there is not sufficient
focus on deprivation, but I certainly think that looking at whether
there is a sufficient focus on deprivation is an important part
of our work."[23]
39. Since we met the Secretary of State, further
detail has emerged about the organisation of 14-19 education.
In its proposals on funding, the Government says that "we
do not propose fundamentally to change the current methodology".
However, with the abolition of the Learning and Skills Council,
funding for all 16-19 provision will be directed via local authorities
and the move towards equal funding for equal work (that is, that
the gap in funding between school sixth forms and FE colleges
will be removed ) will continue. There is also discussion, as
in the schools funding consultation, of a move to a 14-19 funding
system.[24]
40. We will
want to be kept informed of the review of schools funding as it
goes through its different stages. With funding growing more slowly
in the current CSR period than in the previous one, decision on
calculating and distributing schools funding will be even more
critical. The changes in funding to the 16-19 sector, and the
implications for 14-19 funding, will also need to be examined
carefully.
41. The Secretary of State clarified in evidence
the Government's commitment to improving per pupil funding in
the maintained sector compared with the independent sector. The
aim is to bring the level of funding in the maintained sector
to the level it was in the independent sector in 2005-06. The
Government expects to have closed the gap on capital and progressed
30% of the way to the target by 2010-11 (the end of the CSR period).[25]
The Secretary of State gave no indication of when he expected
this level to be reached.[26]
Without a timescale for achieving the target it is difficult to
make a judgement about what progress is being made, but we will
aim to monitor how this commitment is addressed in the schools
funding review.
21 Since announced to Directors of Children's services
on 31 January 2008. Back
22
Q 47 Back
23
Q 48 Back
24
DCSF/DIUS, Raising Expectations: enabling the system to deliver,
Cm 7348, March 2008, pp 47-50. Back
25
Ev 21 Back
26
Qq 28-31 Back
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