Commons Library Briefing: Proposed changes to minimum school funding

What’s been proposed?

In his first speech as Prime Minister, Boris Johnson committed to “level up” school funding, by increasing the minimum funding that primary and secondary schools receive per pupil.

If this is implemented for this financial year, it suggests an increase from the current minimum per pupil amount of £3,500 to £4,000 in primary schools, and from £4,800 to £5,000 in secondary schools.

However, because the National Funding Formula – which calculates preliminary (known as notional) funding allocations to schools – is still in a transitional stage, local authorities are not currently required to pass these minimum amounts on to schools.

Details have not yet been published on the mechanism or timescales for passing these new minimum funding levels onto schools. The Prime Minister’s campaign team estimated this policy would cost an additional £306 million for primary schools, and the publication Schools Week, estimated an additional £49 million for secondary schools.

There are other estimates available, however it is not possible to comment on these figures given the current lack of policy detail.

In July, the Prime Minister restated in Parliament his leadership campaign promise to increase school funding by £4.6 billion by 2022-23.

How are schools currently funded?

There is currently a two-stage process for allocating Schools Block funding in England.

The Schools Block (also known as core revenue funding for schools) is one part of the Dedicated Schools Grant, which is paid by the Government to local authorities. It excludes special educational needs funding, early years funding, and the pupil premium.

1. The Department for Education uses the National Funding Formula (NFF) to produce notional allocations for individual schools. Each allocation is then checked against the minimum funding levels and increased if necessary. Following further adjustments, the final notional allocations are aggregated and passed to the school’s local authority.
2. The local authority then decides how that money is shared out between schools, using its own funding formula.

The NFF calculates notional funding allocations for schools based on pupil numbers, and various pupil and school characteristics. A July 2019 Education Policy Institute report, states: “the schools that would benefit the most from this policy would be those that do not have the characteristics associated with additional funding under the NFF.” This is likely to be schools with low numbers of disadvantaged pupils, low numbers of pupils with low results, and low numbers of pupils for whom English is not their first language.

How many schools could benefit from the changes?

The Prime Minister’s campaign team reportedly based their primary school cost estimates for this policy on the NFF 2019-20 notional funding allocations. Our estimates below use the same funding allocations to show the number of primary and secondary schools that could benefit.

It suggests there were 6,942 primary schools in England receiving below £4,000 per pupil (41% of primary schools) and 1,251 secondary schools in England below £5,000 per pupil (39% of secondary schools) in 2019-20.

On a regional level, the South East and South West regions have the highest proportion of primary and secondary schools which stand to benefit from this policy. London has by far the lowest proportion of schools impacted.

Notes: NFF notional allocations are based on pupil numbers from the previous year and are therefore subject to revision, for this reason allocations are not published for schools which the DfE considers “new and growing”.

Middle deemed secondary schools have been included as secondary schools, middle deemed primary schools have been included as primary schools.

All-through schools have been excluded because the minimum funding for these schools is determined by the mix of year groups in the school.

Source: NFF notional allocations: 2019/20, DfE