EFA School funding reform

School funding
School Business Managers
North East July 2013
Mukesh Parekh
Academies & Maintained Schools
The case for reform
 Previous system complex, opaque, unfair and often perverse
 School Funding Reform (2012): first step towards a fairer system
and the national funding formula
– Introduction of 12 factors for bases of calculating funding
 High needs: Special Educational Needs / Learners with Learning
Difficulties and/or Disabilities (to age 25) funding reform
 Review of implementation in spring 2013
 2014/15 factors announced in June 2013
How it felt for schools and
 Overly complicated
 Too bureaucratic
 Opaque
 Poorly communicated
 Prone to error and
Design of the LA funding model
 Twelve standard factors are available for use in the local
funding model
 Two of the factors are compulsory
– basic entitlement (age weighted pupil unit or AWPU)
– deprivation
 The other 10 factors are optional
 Local authorities can suggest exceptional factors
 The final proforma is agreed in the Schools Forum
Existing 2013/14 allowable factors
Basic entitlement (Compulsory)
Prior attainment
Looked after children
English as an additional language
Pupil mobility
Lump sum
(Max of £200K)
Split sites
Private Finance Initiative (PFI)
London fringe
Exceptional factors
 LA’s can include additional exceptional factors. Must have
dedicated criteria and must be pre-agreed by the EFA
 Exceptional costs
– Maximum of 5% of schools in a local area
– Circumstances must have a financial impact greater than
1% of the school’s budget
Minimum Funding Guarantee
 MFG set at -1.5% per pupil for 2013/14 & 2014/15
 The following aspects excluded from protection:
Early years
High needs
Lump sum
 Local authorities could apply for additional exclusions
– For example bulge classes where the money should not
be built into your baseline as it will disadvantage you in
subsequent years
Schools Forum reform
 New Schools Forum regulations
– Only the DCS, Chief Finance Officer and Lead member (or
their deputy) can be LA members of the Schools Forum
– The need for a minimum of 16 members has been removed
– LA staff cannot vote on their own proposals, only the other
members of the Forum
– Academies are entitled to proportional representation on the
– EFA has observer status at meetings
Schools Funding Reform
Summary (Stage 1)
 Introduction of 12 Factors funding methodology
 HN funding Reformed to Planned Places plus top up
 New Schools Forum regulations
 Post 16 Funding Reforms
Review of 2013-14 arrangements
(Spring 2013)
 Continuing a clear commitment to reform funding systems
 Looked at getting views on are we moving towards national
 Getting views, on areas of concern and possible changes
 Looking specifically at three factors, prior attainment, pupil
mobility and the lump sum
 Deadline for views was 26th March
 2014/15 factors announced in June 2013 and EFA has started to
work with local authorities on implementation
Beginning the second year of school
funding reform – the context
 Changes introduced in 2013-14 were the first step towards a
national funding formula for schools
 Radical change – needed to ensure no unexpected outcomes
and Ministers committed to reviewing the impact
 Result of review, together with changes for 2014-15 published
4 June 2014
 Compared to stage 1, changes for 2014-15 are relatively modest
Building on 2013-14 reforms…
 The simplified local formula remains
 Limited set of factors to be used for school formula distribution
 LA proforma submissions in October and January
 The high needs system remains broadly as in 2013-14
 The Minimum Funding Guarantee continues at -1.5% per pupil
(Exclusions apply)
The changes for 14-15 are therefore a development
of 13-14 and continue the journey towards a
national funding formula for pre-16
The principal changes for 2014-15 (1)
 New factor – an allowance for sparsity, aimed at supporting
necessary small schools, mainly in rural areas
 Maximum allowable for a sparse school is £100,000 - flat rate or
 Eligibility based on size of school and distance to second
nearest school:
– Primary schools – max: 150 pupils, min: 2 miles distance
– Secondary schools – max: 600 pupils, min: 3 miles distance
Next nearest school
5 miles
4 miles
3 miles
Nearest school
2 miles
1 mile
1 mile
1 mile
2 miles
Next nearest school
1st nearest school
Distance to 2nd nearest school
The principal changes for 2014-15 (2)
 Changes to the lump sum:
– LAs can now choose to have different lump sums for primary
and secondary schools – with middle schools getting a weighted
– The lump sum is now capped at £175,000 per school
– Where two schools amalgamate the new school will receive
85% of the total of the lump sums of the predecessors for the
next full year
The principal changes for 2014-15 (3)
 Other factors with changes:
– The looked after children factor must now apply to any child in
care for one day or more
– The prior attainment factor has changes in its measurement at
Early Years Foundation Stage and Key Stage 2. For EYFSP it
will apply to pupils not achieving a good level of development;
for KS2 it is will apply to pupils not achieving level 4 in English
or Maths
– The mobility factor now applies only when the number of
“mobile” pupils exceeds 10%
The principal changes for 2014-15 (4)
 Other restrictions:
 Basic entitlement for primary pupils must be at least £2000; and
for secondary pupils at least £3000
 At least 80% of delegated funding must be distributed via pupilled factors
 For 2014-15 we are not putting any constraints on the
primary/secondary ratio
The principal changes for 2014-15 (5)
 LAs may create a “falling rolls” fund to support good and
outstanding schools and academies with temporary falling rolls
in advance of a population bulge
 Schools Forum must approve the criteria and be consulted on
allocations (and the EFA will check that criteria are compliant)
 Schools Forum – membership must include a representative
from an institution providing education to 16-19 year olds, other
than schools or academies (replacing the 14-19 partnership)
 Local authorities can apply for exceptions to be made for:
– Exceptional premises factors (13-14 approval can be
automatically carried forward if criteria still met)
– Exclusions from the MFG
– Changes in pupil numbers as a result of reorganisation or
changes in years of admission
– Sparsity calculation if the “crow flies” measure produces
perverse results
– Variation to the lump sum for amalgamated schools
 Ensure that your local authority and Schools Forum are aware
of any unusual circumstances for your school
The principal changes for 2014-15 – high
 In 13-14 we recommended that authorities delegated sufficient
funding to allow schools to meet up to £6000 of special needs
costs. This is now mandatory
 Local authorities should develop criteria to support schools
with disproportionate numbers of high needs pupils
 The operational guidance sets out how high needs places will
be adjusted for 2014-15 (further guidance due in July)
 For special schools and academies with post-16 pupils we will
be consulting on setting the place value at £10,000 in place of
the normal post-16 values
Factors for 2014/15 allowable factors
Basic entitlement (Compulsory)
Prior attainment
Looked after children
English as an additional language
Pupil mobility
Lump sum
Split sites
Private Finance Initiative (PFI)
London fringe
Minimum set
Equal treatment
 When constructing the formula, authorities must take into
account the characteristics of all maintained schools,
academies and free schools in their area.
 When incurring central expenditure (other than de-delegated
budgets), maintained schools and recoupment academies must
be treated on an equivalent basis.
 All high needs providers must be treated on an equivalent
basis when making placements.
Your Role as Business Manager
 Develop your understanding of the LA funding formula and its
impact for your school or academy.
 Accurate Census returns are key to determining the bulk of
your funding – ensure an accurate and timely return.
 Know who represents you on the Schools Forum and liaise
with them about the LA formula for 2014/15.
 Make sure the LA is aware of your circumstances which may
impact on MFG and or exceptional funding.
Sources of information
 The announcement on 2014-15 funding arrangements is at –
 For the latest guidance on Schools Forums
please see –
 For analysis of LA Proforma return 2013/14
School funding
School Business Manager
North East
July 2013

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