Appendix 1: School and Early Years Finance (England) (No. 2) Regulations 2018 (SI 2018/1185)
Additional Information from the Department for Education
Background information
We allocate the Dedicated Schools Grant to local authorities each year in the December ahead of the relevant financial year. Each local authority’s allocation for each ‘block’ is calculated by the national funding formulae for schools, high needs, central school services and the early years.
We have already published provisional allocations for schools and local authorities under the 2019–20 national funding formula.33 These show the amount attracted by each local authority/school through the formula. Local authorities therefore know the amount they will be allocated in respect of each primary and secondary pupil, and that gives them a good indication of their overall allocation. This enables local authorities to consult with schools on their local funding formula for 2019–20. They are currently doing this. The total amount that a local authority receives in 2019–20 for schools will be updated to take into account the latest pupil number data (from the October 2018 census) and final allocations will be published in December.
This funding is distributed to local authorities through the DSG (and the schools element forms the schools block of that grant). As explained in more detail in the Explanatory Memorandum, the Regulations set out the process by which local authorities may distribute this funding to schools and early years providers in their area. When local authorities act in accordance with these Regulations, they will need to take account of the total funding available to them. However, whilst there is some connection between the Regulations and the total amount of money DfE provides for schools and early years, the purpose and effect of the Regulations is largely separate to this. This applies to both the content that is unchanged from the previous Regulations, and the small number of changes we are making this year.
Questions and answers
Q1: What schools budget has been set for 2019–20?
A1: In 2019–20, core funding for schools and high needs will be £43.5 billion (compared to £42.4 billion this year and almost £41 billion in 2017–18). The additional £1.3 billion that we announced in July 2017 was allocated across 2018–19 and 2019–20.
The specific amount of the schools block within the DSG will be published in December, after final allocations have been calculated based on the latest pupil numbers. The provisional total for the 2019–20 schools block (before updated pupil numbers have been taken into account) is £34.1 billion. We anticipate that this will increase in the December publications as pupil numbers have increased.
Q2: How does this compare with the budget for 2018–19?
A2: The 2018–19 total schools block was £33.7bn.
The local authority budget-setting process outlined earlier in this note was the same in 2018–19, with the exception of the small number of changes that are being made in the 2019–20 Regulations
Q3: What views have been expressed by local authorities and groups representing schools and/or educational staff about the budget?
A3: School funding is the subject of regular parliamentary and public debate. Our most recent formal consultation on schools funding concluded in March 2017, and we received over 26,000 responses. A summary of these responses has been published.34 As set out above, these Regulations do not have an impact on the total amount of schools funding.
Q4: Do local authorities and/or schools welcome the changes made by these Regulations; are their views on the changes affected by their views on the overall budget?
A4: The Department did not conduct a public consultation on the 2019–20 Regulations. This is because the changes made this year are largely implementing, or giving local authorities the option to implement, changes that have already been extensively consulted on as part of the consultations on the national funding formulae for schools and early years.
The Regulations are also highly technical in nature, and the changes to them are generally minor tweaks. The great bulk of the Regulations remains the same from year to year: we remake them each year in order to update references to various documents.
The main change we are making to the Regulations is to give local authorities the option to mirror the funding floor used in the national funding formula, which ensures that in 2019–20 schools attract a 1% per pupil increase compared to their 2017–18 baselines. In the second stage of consultation on the national funding formula, 54% of respondents agreed with the principle of the funding floor, and 44% (the highest for any option) believed it should be higher than the level of the floor consulted on, which was -3% year-on-year. The final national funding formula included a change to the funding floor to +0.5% in 2018–19 and +1% in 2019–20.
In 2018–19, we have seen considerable movement in local formulae towards the schools national funding formula. 73 local authorities have moved every one of their factor values in their local formulae closer to the national funding formula, with 41 mirroring the national funding formula almost exactly. 62 local authorities have set their minimum funding guarantee at 0.5% to mirror the 2018–19 funding floor, and 112 local authorities have brought in a minimum per pupil funding factor, mirroring its introduction in the national funding formula.
Because of this, and our ongoing engagement with local authorities and schools, we anticipate that local authorities will welcome the continued flexibility to mirror the national funding formula in their local formulae, both in relation to the funding floor–one of the key commitments of the national funding formula–and the other changes relating to minor and technical aspects of the formula. Finally, the main changes this year on schools funding are both optional, so local authorities have discretion over whether or not to implement these at a local level.
As the Regulations as a whole and the changes that are being made are distinct from the size of the overall schools budget, we do not anticipate that the views of local authorities or schools on the specific changes being made will be impacted by their views on the overall schools budget. It is likely that local authorities will welcome the fact that we have been able to make the Regulations in November rather than January, which gives them earlier certainty about the framework they are to apply.
21 November 2018
33 HM Government, National funding formula tables for schools and high needs: 2019 to 2020, (14 November 2018): https://www.gov.uk/government/publications/national-funding-formula-tables-for-schools-and-high-needs-2019-to-2020 [accessed 28 November 2018].
34 See Department for Education, Analysis of and response to the schools national funding formula consultation (September 2017): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/648553/Schools_national_funding_formula_consultation-response.pdf [accessed 28 November 2018].