Education funding in Northern Ireland Contents

3The education budget and school funding

40.In this chapter we consider:

The Department of Education Budget

41.The Department of Education’s budget is set as part of the Northern Ireland Budget, which sets out allocations for each of the departments in Northern Ireland. In normal circumstances the Budget is agreed by the Assembly, but since the collapse of the institutions at Stormont the UK Government has passed budget legislation for Northern Ireland. The Secretary of State has told the House that as part of this process:

I have engaged intensively with the Northern Ireland Civil Service to understand the needs of departments as they continue to manage public services in the absence of an Executive. I have reflected too on the various views on budget priorities submitted to me over the course of the past year and discussed the budget situation with the main political parties in Northern Ireland.69

The Permanent Secretary described the Budget negotiation process. He told us that his Department had gone through a “fairly intensive” process with the Northern Ireland Department of Finance (DoF), as well as bilateral engagement with the Northern Ireland Office (NIO) and further discussions with the DoF, NIO and UK Treasury.70

42.In 2018–19 DE’s starting Resource DEL was £1.98 billion.71 This was an increase of 4.3 per cent on the 2017–18 baseline figure. However, the Department was allocated an additional £80 million during the 2017–18 monitoring round. Once this money is included the 2018–19 budget only represented a 0.6 per cent increase on the previous year’s allocation, and a reduction in real terms.72 It was, however, a slight increase in education spending relative to other departments: DE’s budget made up 18 per cent of the Northern Ireland budget in 2018–19 compared to 17.8 per cent in 2017–18.73 The Spring Supplementary Estimates published in February 2019 revised the total budget for 2018–19 upwards to £2.03 billion.74

43.The Department’s capital budget for 2018–19 was £164.4 million, which was increased to £174 million in the Spring Supplementary Estimates.75 This was a 1.3 per cent increase on the 2017–18 capital budget. Over and above this budget, £500 million of funding from the Fresh Start Agreement has been earmarked for spending on shared education and housing capital projects over the next ten years.76 We examine this spending in greater detail in Chapter 4.

44.In February 2019 the Secretary of State for Northern Ireland published a Written Statement setting out draft 2019–20 budget allocations for departments in Northern Ireland.77 Although these allocations are only provisional, they nevertheless give an indication of each department’s likely budget, and enable departments to make some decisions about their spending plans. The provisional Resource DEL for DE is £2.04 billion. The Northern Ireland Office has stated that this is a 1.1 per cent increase in the education budget, but the Permanent Secretary confirmed this was a cut in real terms.78 The draft Capital DEL budget for 2019–20 is £152.7 million: this is 14 per cent lower than the previous year’s allocation (once in-year adjustments are included) but again excludes money from Fresh Start, £56.9 million of which was included in the draft 2019–20 budget.

45.Both the Department and the Education Authority told us that the level of education funding was insufficient. The Permanent Secretary summarised the position in his evidence:

We have had a combination of a perfect storm over about a decade: flat cash, rising costs and rising service demands. Last year, when the Northern Ireland Audit Office looked at school finances, it euphemistically made the point that schools’ finances have reached a “tipping point.” What they really meant was, ‘It cannot go on like this, because we are in something of a crisis.’ I am not understating the position we are in; it really is very, very difficult.79

He told us that the pressure on budgets was likely to continue, and that DE was facing unfunded pressures of £54 million in the next financial year.80 The EA states that the spending power of the education budget had fallen by £240 million since 2010–11,81 and that “we have insufficient funds to run the system as it is currently configured.”82 The vast majority of witnesses to the inquiry echoed these concerns. Barry Mulholland of the Controlled Schools Support Council (CSSC) told us:

Truth be told, there is not enough money in the education budget. The Department does not have enough to give to schools. The Department does not have enough to give to the Education Authority. The Education Authority does not have enough in order to run the services the way they would want to run the services in support of schools.83

46.We heard that although the education budget had been protected from direct reductions, the sector was subject to increasing cost pressures and its budget was failing to keep pace. One factor was demographic change: we heard that the school population had increased by 2.5% since 2011.84 The CSSC described the impact:

There were 2,000 extra pupils in the system last year. That hit schools hard, because when it came to the establishment of the AWPU [Age Weighted Pupil Unit] there was the same quantum of money to be divided amongst a greater number of pupils, resulting in the allocation per primary school going down by £56 per head and for post-primary going down by something in the region of £26 per head.85

Spending on Special Educational Needs and Disability (SEN or SEND) has also risen in recent years. We examine this in detail in Chapter 5 of this report.

47.Changes to legislation have also increased schools’ costs. The Governing Bodies Association told us that since 2010 schools had needed to meet the cost of increases to the National Living Wage, a 3.4 per cent rise in employers’ National Insurance Contributions and increases to contributions to teachers’ and local government pension schemes.86 The introduction of the Apprenticeship Levy has also created costs for schools. Altogether DE estimates that these measures cost the sector around £70 million.87

48.Although the majority of evidence we received suggested that there is not enough money in the system, many contributions acknowledged that the structure of the education system contributes significantly to the strain on education, and some stakeholders told us that if the system was organised differently it ought to be possible to properly resource education at current funding levels. Sir Robert Salisbury told us:

We felt that there was clearly enough money in the system [ … ] but because of the nature of the schools in Northern Ireland and the historic structure, the money is spread too thinly.88

The Integrated Education Fund made a similar case in its written evidence, noting that measured on a per pupil basis, funding in Northern Ireland is high by both UK and OECD standards. They wrote that:

Throwing more money at the financial problems facing our schools would only serve to temporarily mask and perpetuate the structural inefficiencies underlying these problems.89

49.In the future Northern Ireland’s block grant will increase as a result of decisions taken in the UK’s Autumn 2018 Budget. In his statement, the Chancellor confirmed that Barnett consequentials arising from the decisions taken in the Budget would result in Northern Ireland receiving an extra £320 million in 2020–21. He added that there were “much larger sums to come” as part of the upcoming Spending Review.90 The devolved administrations have discretion to spend their block grant on areas of devolved responsibility as they deem appropriate.91 However, in the absence of an elected Executive and Assembly it is not clear how decisions about the allocation of future funding will be made.

50.In a statement accompanying the draft 2019–20 budget allocations, the Secretary of State set out the Government’s position that “it would not be appropriate for the UK Government to seek to take fundamental decisions about service delivery and transformation.” She nevertheless added that the Government needed to secure public services and enable departments to meet urgent pressures in health and education.92

51.We heard a consistent message that the education budget is not sufficient to meet rising pressures on schools while the system remains in its current form. Independent of this issue, however, there is a clear need to properly fund the existing education system to meet rising demand so that the current generation of children receive the excellent education they deserve. We recommend that future budget allocations to the Department of Education rise not only in line with inflation, but in proportion to the number of pupils in the school system in order to reflect increasing pupil numbers and the associated demand for additional staff. We examine the organisation of the school estate and make further recommendations in Chapter 4.

52.We welcome the announcement in the 2018 Budget Statement that Northern Ireland will receive additional funding in 2020–21 and in the upcoming Spending Review. However, in the absence of functioning devolved institutions it is not clear how Northern Ireland can exercise its usual discretion in the way this money will be spent. The Northern Ireland Office should, in responding to this report, explain how decisions will be taken on how the Barnett consequentials arising from the 2018 UK Budget will be spent. The Secretary of State should be prepared to authorise the allocation of funds to areas of acute public service need, consulting with the Department of Finance and the major political parties in Northern Ireland to ensure there is consensus for such an approach.

Schools’ budgets

53.As DE’s budget has come under pressure, schools’ own budget positions have generally deteriorated. In October 2018 the Northern Ireland Audit Office (NIAO) published a report on The Financial Health of Schools, which analysed the budget positions of Northern Ireland’s schools in detail.93 The NIAO’s report found that over the last five years the number of Controlled and Maintained schools with a budget deficit had increased, from 19 per cent of schools in 2012–13 to 31 per cent in 2016–17.94 Altogether the accumulated value of deficits in these schools rose from £14.8 million to £32 million over the same period.95 The report also noted that 2017–18 was the first year in which accumulated school deficits exceeded accumulated school surpluses.96 A similar pattern was seen in Voluntary Grammar and Grant-Maintained Integrated schools, where the proportion of schools in deficit increased from 23 per cent in 2012–13 to 33 per cent in 2016–17.97 Some of the principals we spoke to gave examples of their own schools’ worsening budget positions. Jo McColgan, Principal of Ashfield Boys’ High School, a Controlled school, said that:

Although the outcomes in my own school have improved significantly over the past three years in relation to all headline targets, we have gone from a £4,000 surplus to a £136,000 deficit. I fear that, while our agreed three-year budget takes us back to the surplus, it is based on losing another three members of staff.98

54.While schools’ financial positions generally trended downwards, the situation varies significantly from school to school. The NIAO noted that some schools consistently run surpluses, and that 18 Controlled or Maintained schools had in fact increased their surpluses year on year between 2012–13 and 2016–17. Altogether, these schools’ surpluses increased from £1.3 million to £3.1 million over this period, an increase of 138.5 per cent.99 At the opposite end of the scale, 14 Controlled or Maintained schools saw their deficits increase year on year, with their accumulated deficit rising from £3.7 million in 2012–13 to £12.7 million in 2016–17, an increase of 243.2 per cent.100 Voluntary Grammar and Grant-Maintained Integrated schools also showed some variation: the NIAO found that 47 of the 59 schools in these categories had been in surplus in each of the last four years; however, 13 had been in deficit over the same period and one Grammar had a deficit of £7.1 million.101

55.The budget positions of schools varied to some extent based on the school sector and school type. The NIAO found that the schools with the largest deficits and the largest surpluses tended to be post-primary schools: all seven of the schools with deficits in excess of £1 million were post-primaries, and the largest surplus in a post-primary school was £1 million, twice the level of the largest primary surplus. The NIAO also found that in the Controlled and Maintained sectors, the largest surpluses were likely to be at schools with high pupil enrolments, while the largest deficits were in smaller schools.102

56.Both the Department and the EA have acknowledged the pressure schools are under, and in response the EA established a Surpluses and Deficits Working Group in 2015. The NIAO’s report, however, noted that:

Implementation of the Working Group’s action plan, which included 37 action points, has been slow. Only four of the 25 action points, which should have been addressed by 31 March 2017, were addressed by September 2017. The EA advised that 29 of the 37 action points had been implemented by April 2018.103

The EA told us about some of the steps they were taking to help schools with deficits in their oral evidence. The EA’s Director of Finance and ICT, Joyce Bill, told us that the EA had used this year’s financial planning process as a “health check” with schools.104 The EA’s annual report says that it has “developed benchmarks using similar families of schools and has worked with a range of schools to develop scenarios and options to reduce costs.”105

The budgeting process

57.Alongside the pressures caused by smaller budget allocations, schools reported difficulties caused by the absence of an Executive and by the processes the Education Authority uses to allocate school budgets. Schools told us that these made it harder for them to manage their own budgets and for the education sector to plan for the future.

58.Several witnesses told us that in the absence of an Executive the education budget was being set on a rolling year-to-year basis.106 Principals at our engagement event in Strabane explained that this made it difficult for schools to make long term spending commitments, because they could not guarantee the continuation of the necessary funding in future years:

We’re expected to budget plan, but I have no idea what my budget will be next year. You have to build a curriculum. You have to look at the needs of the children: what subjects do you need, and then what teachers do you put in front of them to teach those subjects.107

Witnesses agreed that a similar problem existed at the sectoral level, and restricted central authorities’ ability to strategically manage education.108 A participant at our engagement event stated:

Reacting on an annual basis to funding means there is no long term strategic planning. Schools are living hand to mouth, which means we can’t plan for an effective education system in the future.109

59.Other issues related to the way the EA calculates and allocates school budgets. For example, we learned that a school’s per-pupil funding in a given year is based on the previous year’s enrolment rather than the current year’s.110 The Northern Ireland Council for Integrated Education wrote that this could be a particular problem for schools which had recently proceeded with a development proposal:

When such a school has a successful development proposal for growth, the present in-year growth policy means that they will not receive funding for these children until the next financial year, meaning that the school is essentially educating these children for free for the majority of the academic year. This has a knock-on effect for all other children in the school and for future years. This funding mechanism needs to be reviewed urgently.111

One principal at our engagement event said that the way budgets are calculated means that changes to the number of children eligible for free school meals on a school’s roll can have dramatic effects on its finances. The principal told us that a 2 per cent change in the proportion of eligible children saw their budget reduce by £180,000.112

60.In the absence of an Assembly the education budget has been set on a rolling annual basis, with the consequence that schools and sectoral bodies have not been able to plan for the future of education. This has been an obstacle to investment and improvement in children’s education. We recognise the UK Government’s reservations about setting long-term budgets while there is the prospect of the Assembly being restored. However, we believe that it is not in the long term interests of education for the current uncertainty to continue. The UK Government should work with the Department of Education and Department of Finance as part of the upcoming Spending Review to produce provisional three-year budget allocations for the Department of Education.

Consequences of budget pressures

61.Over the course of our inquiry we heard many examples of the difficult decisions school leaders were being forced to take as a result of budget pressures. For example, witnesses told us that the vast majority of schools’ budgets were spent on staff, and therefore reducing staff numbers or hours was often the only way to achieve significant savings. Graham Gault stated that “95% of my budget is spent on staff and I am not overstaffed; I am understaffed.”113 A participant in our engagement event told us that support roles tended to be the first cut, describing “a wipe out of classroom assistants,” over the last year “because principals couldn’t afford to pay for them.”114 Schools confirmed that further budget pressures would leave them with no choice but to cut classroom teacher numbers as well. The Principal of St Patrick’s College wrote that “with current cuts in budget I potentially will have to reduce my teaching complement by 10 teachers from the current 84. This would make it impossible to deliver a curriculum in our school.”115

62.One consequence of falling staff numbers has been increasing class sizes and a rise in the pupil-to-teacher ratio . A joint submission from three teaching unions noted that many larger primary schools had Key Stage 1 classes at the legal limit of 30 pupils, and that at Key Stage 2 class sizes could rise as high as 35 pupils, compared to the OECD average of 21.116 Heather Murray, Principal of Millington Primary School, stated that her school had 15 classes with 33 or more children.117 The pressure continued into secondary schools, especially in practical subjects where class sizes are limited to for health and safety reasons.118

63.Post-primary schools gave evidence that the difficulty of maintaining adequate staff numbers made it difficult to maintain a broad curriculum offer. In Northern Ireland the Entitlement Framework is supposed to guarantee access to a broad and balanced range of subjects in Key Stages 4 and 5. The Controlled Schools Support Council told us that “The Entitlement Framework is an aspiration now in many schools.”119 We also heard that the pressure on staff numbers and the curriculum offer could be self-reinforcing. Nigel Frith, Principal of Drumragh Integrated College, said:

If we are losing students, then ultimately we are losing funding, which means we are losing more staff, and so the thing begins to replicate in a negative way.120

64.Although staff cuts were the most commonly cited consequence of pressure on school budgets, schools and teachers gave numerous examples of other impacts, including:

The Confidence and Supply Agreement and the Fresh Start Agreement

65.In recent years, education is one of a number of sectors that has received supplementary funding from the UK Government under the 2017 Confidence and Supply Agreement and the 2015 Fresh Start Agreement. Figure 1 shows how this money has been directed to date.

Figure 1: Funding for education from the Confidence & Supply Agreement and the Fresh Start Agreement

Source: House of Commons Scrutiny Unit

66.The Fresh Start Agreement (FSA) was finalised in November 2015, as the culmination of talks on implementing the 2014 Stormont House Agreement. As part of the FSA, the UK Government agreed to provide up to £500 million of new capital funding over 10 years to support shared and integrated education projects.127 This funding is over and above DE’s own capital allocation and is accounted for separately in the Northern Ireland Budget.

67.Following the June 2017 General Election, the Conservative Party and the Democratic Unionist Party signed a Confidence and Supply Agreement (CSA).128 The agreement included a package of financial support for Northern Ireland, including “an additional £50 million per year for 2 years to enable the Executive to address immediate pressures in health and education.”129 At the time of the agreement, no more detail was made available about how this money would be spent.

68.The Department confirmed that £483.8 million of the £500 million FSA capital funding had been committed to projects so far.130 When DE gave evidence in March 2019 just £18 million of the FSA budget had been spent; however, we were told that this was due to the long lead time associated with new capital projects, and that this delay had been exacerbated by the requirement that the FSA money be spent on entirely new projects.131 The Permanent Secretary described the process of getting projects approved as “a slightly sticky process … it has not all gone smoothly.”132 Although the majority of FSA funding for 2016–17 and 2017–18 was not spent, DE has secured approval for £91 million of funding to be carried over to the end of the current spending review period (2020–21), meaning that money has not been lost.133 The 2018 UK Budget announced £300 million of FSA funding would be spent “to increase the provision of shared and integrated education and shared housing in Northern Ireland.”134 This funding covered 23 newly announced projects and additional funding for 13 that had previously been announced.135

69.Many of the schools we spoke to said it was not clear how the money received under the CSA would be spent. Nigel Frith said, “I do not know which schools are going to benefit from that money.”136 Several written submissions called for greater clarity on how it would be spent.137 Participants in our engagement event were not aware that their schools had directly benefited at all: one told us that “not one penny has made it into schools’ budgets.”138

70.Some contributors had specific recommendations for how the CSA money should be spent. Some believed it would be most effective if delegated directly to schools.139 Others suggested that it be targeted at school transformation, with the EA proposing that an “Education Transformation Fund” be established using funding from CSA and other sources.140 Deirdre Gillespie, Principal of St Mary’s Grammar, said it should be used “not on a sectoral basis but a systems basis, to bring about a programme of transformation of our education system.141 One attendee at our engagement event noted that the CSA money was only guaranteed for the duration of the current parliament, and therefore could not be spent on longer term commitments (e.g. pay increases for staff).142

71.The Department confirmed that it had received £5 million of CSA money in 2017–18, and that this had been used “to meet education funding pressures.”143 DE received a further £20 million in 2018–19, which the Permanent Secretary said had been used to make up what would otherwise have been a shortfall compared to the previous year’s budget, in effect meaning “that we would not have to make £20 million of cuts.”144 He added that DE had been allocated a further £16.5 million for 2018–19 from a different strand of the CSA aimed at tackling social deprivation, and that this had been used for specific projects like Sure Start and Nurture Units.145 The evidence shows that the CSA was used to prevent service cuts which otherwise might have been necessary, rather than spent on new services or resources. This may explain why some schools felt they had not seen the impact of this funding.

72.The non-recurring nature of the CSA funding may explain why DE chose to use it to mitigate immediate budget pressures, rather than for anything that might generate longer term spending commitments. A joint submission from three teaching unions acknowledged that:

The amounts of money available from this source are not large enough or accompanied with any surety into the future so therefore DE have little choice but to use them in the manner they have chosen to do at present.”146

The temporary nature of the CSA raises a concern that, if this funding is not available in future years, then some of the cuts which were prevented in 2017–18 and 2018–19 might become unavoidable. The Permanent Secretary revealed what this might mean in practice when he explained how the CSA funding had been used so far:

If we had not received that total of £36.5 million of confidence and supply money, we would have had to make £36.5 million of cuts in the current financial year. To give the Committee a little bit of context, £36.5 million of cuts would equate to more than the entirety of what we spend on youth services.147

73.Many of the teachers and principals we spoke to did not know how the Department of Education had spent the money obtained through the Confidence and Supply Agreement, and some believed they had not benefitted from this funding at all. The Department should proactively contact schools to set out how the 2019–20 allocation of Confidence and Supply funding is spent and make this information clearly available to the general public so that decisions on this spending can be properly scrutinised.

74.We heard that Confidence and Supply money was largely used to maintain existing provision, and that without it further cuts would have been necessary. This raises the alarming prospect that once the deal expires there will be a substantial funding gap that threatens the continuation of vital programmes. We recommend that, in anticipation of the end of the current Confidence and Supply Agreement funding period, Ministers say how they will respond to the exhaustion of the additional funding for the programmes supported by the Agreement in 2017–18 and 2018–19.

75.We welcome the Government’s decision to allow unspent money from the first two years of the Fresh Start Agreement to be carried over into future years. The long-term nature of capital projects means it may be necessary to allow further money to be carried over to avoid it being lost. The Government should continue to allow underspends in Fresh Start funding to be carried over into future years, as it did in 2016–17 and 2017–18.

The Common Funding Scheme

76.The scheme used for allocating education funding in Northern Ireland is known as the Common Funding Scheme. The Scheme uses a calculation—the Common Funding Formula (CFF)—to determine funding for each school in Northern Ireland. The scheme is based on the following key principles:

The CFF is divided into two funding streams: one for nursery and primary and one for post-primary. The calculations for each strand differ slightly: for example, the value of the Age-Weighted Pupil Unit (AWPU) is higher for post-primary schools than primaries. There are also schools which are not funded under the formula, such as special schools which have their own distinct arrangements (described in Chapter 5 of this report).

77.The Age-Weighted Pupil Unit is the largest element of the CFF: in 2018–19 AWPUs made up 73.8 per cent of primary schools’ CFF allocation and 83.8 per cent of post-primary funding.149 Each pupil attending a school entitles that school to a sum of money, equal to a default cash value that is weighted according to the child’s age and whether they are a part-time or full time pupil.150 The default cash value does not remain the same from year to year however; rather, it is calculated by taking the total level of funding left in the funding stream once all non-AWPU factors have been deducted and dividing it by the number of AWPUs (i.e. the number of pupils) in the system.151 This means that although the AWPU is a per-pupil payment the amount of money in the system does not increase as the number of pupils increases.152 The Controlled Schools Support Council (CSSC) told us that the value of the AWPU was £56 lower per primary pupil and £15 lower per post-primary pupil in 2017–18 compared with 2016–17, because an extra 2,000 pupils were in the system that year.153

78.Alongside the AWPU, the formula includes a number of specific factors linked to the specific characteristics of a school or its pupils. Examples include:

79.Many witnesses said a complete review of the Common Funding Formula was required. The CSSC wrote that “there are elements of the existing formula that are not functioning correctly,”155 while the CCMS called for a “root and branch review.”156 The Northern Ireland Audit Office, in its Financial Health of Schools report, recommended a “fundamental review” of school funding arrangements.157

80.An independent review of the Common Funding Formula was carried out in 2013, and chaired by Sir Robert Salisbury.158 The review made a number of recommendations, several of which—such as directly targeting more funding at children from socially-disadvantaged backgrounds—were accepted by DE and have since been implemented.159 Other recommendations, such as the removal of small school support factors and creation of a new Small Schools Policy, were not accepted.160 We heard that the Department had conducted an internal review in 2017 that made similar recommendations.161 Although the Department’s update demonstrated some progress, we heard from witnesses that a number of sensible recommendations from various reviews of education had not been implemented.162 The Northern Ireland Commissioner for Children and Young People, Koulla Yiasouma, told us that some proposals did not have political support or the support of parents and communities.163 DE told us that a further review of the formula was underway, but the Permanent Secretary noted that a Minister would need to authorise changes to the formula.164

81.Witnesses raised a number of specific problems with the Common Funding Formula. One common criticism was that the formula allocates too many resources to small schools, which without that funding would be unsustainable.165 Sir Robert Salisbury described the anomalies this could create:

Some primary schools we looked at in very affluent areas, because they were small schools and received very generous small school allowance, were receiving £14,200 per pupil, while other schools in tougher areas—socioeconomically deprived areas—were sometimes receiving not much over £3,000 per student. You have this enormous anomaly that was linked to the needs of the institution rather than the needs of the children in it.166

A 2016 Northern Ireland Assembly Public Accounts Committee report on the Sustainability of Schools said it was “concerned that the Department cannot demonstrate that the £36 million investment in small schools represents value for money.”167 We consider the issue of small schools further in Chapter 4.

82.Another common concern was the balance of funding between the two funding streams: the nursery and primary stream and the post-primary stream. A number of primary principals felt that too little money was directed to primary education.168 Graham Gault said that a child in the first year of their post-primary education was worth £1,300 more to their school than in their last year of primary education.169 The Strategic Primary Principals Forum made the case that investment in children’s education at an earlier age had positive effects in the long term, and others said that the Department’s policy of early intervention in areas like identifying Special Educational Needs needed to be matched by increased funding for primaries.170 The Salisbury Review recommended that in the medium to long term more resources should be directed at primary education.171

83.Some contributors to the inquiry also raised the Targeting Social Need (TSN) element of the formula, arguing it diverted disproportionate levels of funding to schools with high proportions of Free School Meal Eligible (FSME) pupils, to the extent that schools with lower proportions of FSME pupils were under-funded.172 Graham Gault told us:

The current distribution of funding uses free school meals, which is a very blunt measure of need, to distribute money. The disparity in funding between schools with very few free school meals and schools with a large number of free schools meals is very significant. I would argue that, in educational terms, a child is a child and that money needs to be distributed more equitably.173

Centrally-held funding

84.A more general concern shared by a number of witnesses was that too much of the education budget in Northern Ireland was controlled centrally rather than delegated to schools. We heard that, in total, 59 per cent of the education budget was delegated to schools for them to spend as they deem appropriate, while 41 per cent is spent on centrally funded services such as school transport and Special Educational Needs and Disability (SEND) services. This balance of delegated and centrally held spending is very different to other parts of the UK, where over 90 per cent of the education budget is delegated to schools.174 The INTO, NEU and UTU unions suggested that the proportion of the budget dedicated to schools in Northern Ireland could be increased to 70 per cent “within a relatively short timescale.”175

85.A number of Controlled and Maintained schools argued that principals were best placed to understand the needs of their school and so could spend money more appropriately and efficiently than central agencies. One area where schools commonly favoured more autonomy was procurement (see paragraphs 32 to 39).176 Jo McColgan told us:

I know what my school needs. I know where those resources need to go, yes, with all levels of accountability, but give us the autonomy to be able to do that and we will make real savings.177

86.Principals from Voluntary Grammar and Grant-Maintained Integrated schools stated that their schools were not subject to the same restrictions as Controlled or Maintained institutions, and that this autonomy enabled them to spend money on their schools’ priorities while also giving them greater control over procurement. Deirdre Gillespie said:

I have certainly found having the autonomy to procure our own services and goods to be a much more flexible system, which allows savings to be incurred. I very much support the view that more money should be going centrally into schools, but schools should have the autonomy to procure their own services and goods.178

Principals also pointed out that alongside their relative autonomy there came a stricter requirement for financial discipline. Nigel Frith explained:

Yes, we have the freedom to go and find the best deals for ourselves, and we do that routinely. However, in terms of the ability to carry a deficit, under the Education Authority umbrella we would be permitted to carry a deficit of up to 5% or £75,000. [ … ] A Grant-Maintained Integrated school is managed directly by a bank manager, who is not tolerant of any kind of deficit and we do not have the facility to run 5%, £75,000 or anything else. We have bank managers saying to us, “Are you balancing your books or not?”179

87.Several witnesses from the Controlled and Maintained sectors were cautious about the prospect of increasing schools’ delegated budgets. We heard that some areas of central spending, such as school transport, would be difficult for schools to manage, and that smaller schools in particular would not necessarily have the staffing capacity or the specialist skills to take on additional financial responsibilities.180 The NASUWT union noted that a large proportion of the centrally held budget was spent on areas like transport, free school meals and special school budgets, where schools had shown little appetite to manage their own spending. Once these were removed, they said, “there is actually not that much money left that is being spent at EA level.”181 They suggested that realistically only around 5 per cent of the money currently spent centrally could be delegated to schools.182

88.The Council for Catholic Maintained Schools (CCMS) also stressed the importance of funding for the administration of education, which it said was “a necessary expense that should be recognised as adding value to the delivery of education in its fullest sense.”183 The CCMS warned against delegating additional resources if this came at the expense of essential administrative services.184 The EA reports that only 1 per cent of its budget is spent on central administration, and that it has already made staff reductions in order to try to cope with budget pressures.185

89.A further concern about central spending was the number of central initiatives, many of which were seen as poor value for money.186 A principal who attended our engagement event in Strabane told us that “some of the things that 40 per cent is being spent on shouldn’t exist.”187 Geri Cameron, President of the National Association of Head Teachers Northern Ireland, said that there was a lack of information available to demonstrate whether central spending provided value for money, and that greater transparency was needed regarding DE and EA spending.188 In 2013 the Salisbury Review recommended that DE review all earmarked funding initiatives.189 The Department reported that between 2015–16 and 2017–18 the number of earmarked funding budget lines fell from more than 90 to 30; altogether the amount of earmarked funding fell from £170 million to £70 million.190

90.We heard a number of concerns about the way school budgets are allocated through the Common Funding Formula. In current circumstances it is more important than ever to ensure that funding is being directed where it can do the most good. The Department of Education should carry out a review of the Common Funding Formula to identify whether a fairer and more efficient balance of funding can be achieved. The review should examine the balance of funding across key stages, funding that targets social deprivation and funding for smaller schools, and whether the current balance between money held centrally and money delegated directly to schools achieves the best possible value for money. The Department should complete this review by the end of the financial year.

91.Many schools told us that too great a proportion of funding was held centrally, and they wanted to see an increase in their delegated budgets. Not all schools shared this view however, and it was acknowledged that any delegation of functions would bring additional responsibilities that some schools would neither want nor have capacity to manage. Nevertheless, we heard that the proportion of the budget held centrally could be reduced by around 5 per cent. We recommend that there is merit in revisiting proposals to give Controlled and Maintained schools greater financial flexibility where they desire to do so. We recommend that, starting with the next annual budget cycle, the Department pilot arrangements through which Controlled and Maintained schools can gain greater financial freedoms in the same vein as Voluntary Grammar and Grant-Maintained Integrated schools.


69 HC Deb, 28 February 2019, Col 23WS

71 Department of Finance, Northern Ireland Estimates 2018–19, July 2018, p 88

72 Department of Finance, Northern Ireland Estimates 2017–18, November 2017, p 88; Department of Finance, Northern Ireland Spring Supplementary Estimates 2017–18, March 2018, p 88

73 Northern Ireland Assembly Research and Information Service, We don’t need no education, 27 November 2018

74 Department of Finance, Northern Ireland Spring Supplementary Estimates 2018–19, February 2019, p 72

75 Department of Finance, Northern Ireland Estimates 2018–19, July 2018, p 89; Department of Finance, Northern Ireland Spring Supplementary Estimates 2018–19, February 2019, p 73

76 HM Government, A Fresh Start: The Stormont Agreement and Implementation Plan, 17 November 2015, p 24

77 HC Deb, 28 February 2019, Col 1370WS

78 Northern Ireland Office, Secretary of State sets out draft budget for Northern Ireland, 28 February 2019; Q365

81 Education Authority, Annual Report and Accounts for the year ended 31 March 2018, 9 April 2019, p 16

84 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 10

86 Governing Bodies Association (EDU0045), p 6

87 Department of Education (EDU0058), p 4

89 Integrated Education Fund (EDU0021)

90 HC Deb, 29 October 2018, Col 664

91 HM Treasury, Block Grant Transparency: December 2018 publication, December 2018, p 2

92 HC Deb, 28 February 2019, Col 23WS

93 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018

94 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 13

95 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 14

96 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 16

97 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 22

99 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 16

100 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 17

101 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 22–24

102 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 20

103 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 3

105 Education Authority, Annual Report and Accounts for the year ended 31 March 2018, 9 April 2019, p 57

107 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064) p 2

108 Q224; Northern Ireland Commissioner for Children and Young People (EDU0057), p 2

109 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064) p 2

110 Comhairle na Gaelscolaíochta (EDU0028), p 4

111 Northern Ireland Council for Integrated Education (EDU0042), p 6

112 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064) p 2

114 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064), p 7

115 St Patrick’s College (EDU0049)

116 Irish National Teachers Organisation, National Education Union and the Ulster Teachers Union (EDU0053), p 2

121 Friends’ School Lisburn (EDU0047)

122 St Patrick’s Primary School (EDU0019)

123 St Kieran’s PS (EDU0002); Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2018, p 35

125 Council for Catholic Maintained Schools (EDU0056), p 9; St Patrick’s College (EDU0049)

126 Q92; Parentkind, Northern Ireland Parents’ views on school and education: Findings from the 2018 Northern Ireland survey, November 2018, p 2; Controlled Schools Support Council (EDU0037), p 6

129 HM Government, UK Government Financial Support for Northern Ireland, 26 June 2017, p 3

134 HM Treasury, Budget 2018, HC 1629, p 71; further details were announced on 23 November

135 HM Treasury press release, £66 million for shared and integrated education in Northern Ireland, 23 November 2019

137 Strandtown Primary School (EDU0022); Controlled Schools’ Support Council (EDU0037); Northern Ireland Council for Integrated Education (EDU0042); Irish National Teachers’ Organisation, National Education Union and the Ulster Teachers Union (EDU0053)

138 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064), p 2

139 Holy Family Primary and Nursery School Derry (EDU0018); St Anne’s Primary School (EDU0008)

140 Education Authority (EDU0044), p 13

142 Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064), p 2

143 Northern Ireland Commissioner for Children and Young People (EDU0057) p 22

146 Irish National Teachers’ Organisation, National Education Union and the Ulster Teachers Union (EDU0053)

148 Department of Education, Common Funding Scheme 2018–19, 14 November 2019, p 3

149 Department of Education, Common Funding Formula 2018–19, 14 November 2018, p-101, 120

150 Department of Education, Common Funding Scheme 2018–19, 14 November 2018, p 103

151 Department of Education, Common Funding Scheme 2018–19, 14 November 2018, p 9

152 Mr Ray Cromie (EDU0006)

153 Controlled Schools Support Council (EDU0037) p 4; Q131

154 Department of Education, Common Funding Scheme 2018–19, 14 November 2018

155 Controlled Schools Support Council (EDU0037), p 10

156 Council for Catholic Maintained Schools (EDU0056) p 14

157 Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2019, p 40

158 Department of Education, An Independent Review of the Common Funding Scheme, January 2013

162 Q123; Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064), p 3

165 Council for Catholic Maintained Schools (EDU0056), p 16; St Columbanus’ College (EDU0015)

167 Northern Ireland Assembly Public Accounts Committee, Report on Department of Education: Sustainability of Schools, 2 March 2016, p 15; N.B. Updated figures from the Northern Ireland Audit Office give the amount spent on small school support factors in 2016–17 as £25 million (See Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2019, p 37)

168 Brackenagh West Primary School (EDU0016); St Anne’s Primary School (EDU0008); Strategic Primary Principals Forum (EDU0026) Northern Ireland Audit Office, The Financial Health of Schools, 16 October 2019, p 36

170 Strategic Primary Principals Forum (EDU0026); St Anne’s Primary School (EDU0008)

171 Department of Education, An Independent Review of the Common Funding Scheme, January 2013, p xii

172 Mr Chris Currie (EDU0001); Mr Ray Cromie (EDU0006); Controlled Schools Support Council (EDU0037)

174 National Association of Head Teachers (EDU0059) p 2

175 Irish National Teachers’ Organisation, National Education Union and the Ulster Teachers Union (EDU0053), p 7

176 APTIS: the Association of Principals in Integrated Schools (EDU0032); Holy Family Primary and Nursery School (EDU0018); National Association of Head Teachers (EDU0038), p 8; Principal Marie Lindsay (EDU0048); St Patrick’s Primary School (EDU0019), p 1; St Patrick’s College (EDU0049), p 1; Transferors Representatives Council (EDU0039); Qq120, 123

183 Council for Catholic Maintained Schools (EDU0056), p 15

184 Council for Catholic Maintained Schools (EDU0056), p 15

185 Education Authority (EDU0044), p6–7

186 Grosvenor Grammar School (EDU0030)

187 Q123; Education Funding in Northern Ireland Engagement Event, 28 January 2019, Holy Cross College, Strabane (EDU0064), p 2

189 Department of Education, An Independent Review of the Common Funding Scheme, January 2013, p vii




Published: 22 July 2019