Written statement on school revenue funding - July 24

Nick Gibb (The Minister of State for School Standards): Today I am announcing details of school revenue funding for 2019-20, through three of the four blocks of the dedicated schools grant: the schools block, the high needs block, and the central school services block. Funding allocations for the early years block will be published later in the year, as usual.

School funding is at a record high, and schools have already benefitted from the introduction of the national funding formula in April 2018. This is an historic reform, which means that, for the first time, resources are being distributed based on the individual needs and characteristics of every school in the country. The formula allocates every local authority more money for every pupil, in every school, in both 2018-19 and 2019-20, compared to their 2017-18 baselines.

The additional investment of £1.3 billion for schools and high needs across 2018-19 and 2019-20 announced last year, on top of the schools budget set at Spending Review 2015, means that per-pupil funding is being maintained in real terms between 2017-18 and 2019-20. In 2020 per-pupil funding will be more than 50% higher than it was in 2000, in real terms.

I can confirm that we will deliver our planned updates to the formula in 2019-20. This includes:

• increasing the minimum per-pupil funding level to £4,800 for secondary schools, and to £3,500 for primary schools;
• increasing the funding floor so that all schools will attract at least a 1% per pupil gain against their 2017-18 baselines;
• and enabling underfunded schools to gain a further 3% per pupil, on top of the 3% they gained in 2018-19 – this means that next year, underfunded schools will be attracting up to 6% more, per pupil, compared to 2017-18.

I am also confirming some small, technical changes to the schools block formula, which are set out in the accompanying policy document. In particular, we have introduced a new approach for allocating funding to local authorities to support schools with significant in-year growth in pupil numbers. This means that local authorities will be funded according to actual levels of pupil number growth, rather than on the basis of historic spending.

In the high needs formula, the funding floor will also increase to 1% per head and the gains cap will allow increases of up to 6% per head compared to 2017-18, up from 3% in 2018-19. The accompanying policy document sets out some further small changes to the way high needs funding is allocated, including changes to the arrangements for funding places at special free schools.

The primary and secondary units of funding for local authorities that we are publishing today will be used to set schools’ final allocations on the basis of updated pupil numbers data in the autumn. As we did alongside the launch of the national funding formula last year, in the interests of transparency and to help authorities and schools plan ahead, we are also publishing the notional school-level allocations which have been used to calculate those units of funding. Details of these arrangements have been published on GOV.UK.

We recognise that the introduction of the national funding formula has represented a significant change to the way schools are funded. To provide stability for authorities and schools through the transition, we have previously confirmed that in 2018-19 and 2019-20 each local authority will continue to set a local formula, in consultation with local schools. These local formulae determine individual schools’ budgets in their areas.

We recognise that some areas use this local flexibility to tailor their local formula, for instance because of local changes in characteristics, rapid growth in pupil numbers or to invest more in pupils with additional needs. This year, however, we have seen considerable movement in local formulae towards the 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 already – in the formula’s first year of introduction – mirroring it almost exactly. 112 local authorities have brought in a minimum per pupil funding factor, following its introduction in the national funding formula.

We are pleased to see this significant progress across the system in moving towards the national funding formula in its first year. In light of this progress, and in order to continue to support a smooth transition, I am confirming that local authorities will continue to determine local formulae in 2020-21.

After too many years in which the funding system has placed our schools on an unfair playing field, this government has finally made the historic move towards fair funding. Alongside the increased investment we are making in schools, this will underpin further improvements in standards and help create a world-class education system, and build a system that allows every child to achieve their potential, no matter their background.

Today the Secretary of State has also confirmed the 2018 teachers’ pay award. To ensure that this is fully affordable to schools, we will be providing a teachers’ pay grant of £187 million in 2018-19 and £321 million to all schools in England in 2019-20. This will cover, in full, the difference between this award and the cost of the 1% award that schools would have anticipated under the previous public sector pay cap. The grant will provide additional support to all maintained schools and academies, over and above the core funding that they receive through the national funding formula.