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Scope of briefing paper

This briefing paper gives a short overview of school funding in England. It looks at:

  • Overall funding levels
  • Schools’ financial health
  • Funding commitments made at the 2022 Autumn Statement
  • The implementation of the National Funding Formula (NFF) for schools
  • Proposed legislation on school funding in the Schools Bill

Overall levels of funding

In recent years, there have been concerns about a squeeze on school funding, in the wider context of increasing pupil numbers and cost pressures, including those relating to the coronavirus pandemic and energy costs.

At the Autumn Statement 2022, the Government announced an additional £2.3 billion for the core schools budget in each of financial years 2023-24 and 2024-25, over and above the amount originally promised at the 2021 spending review. This funding is made up of £2 billion ‘new’ money, and £300 million saved owing to the abolition of the Health and Social Care Levy, in each year.

The Government has also made around £4.9 billion available for education recovery from the pandemic, but some, including the former education recovery commissioner, Sir Kevan Collins, have called for much higher levels of funding.

High inflation rates and increases to teacher and school support staff pay scales have led to teaching and leadership unions balloting members on strike action. Ballots are ongoing despite the additional funding agreed at the 2022 Autumn Statement.

What’s happening with the national funding formulas (NFF) for schools and high needs?

Since financial year 2018-19, a new National Funding Formula (NFF) has been used to determine how much mainstream schools attract in core revenue funding. There are separate formulas for sixth form, high needs, and early years funding. Pupil premium (additional money to support disadvantaged children) is paid via a separate grant.

Currently, the NFF is only being used to work out notional allocations for individual schools. These are then aggregated, adjusted, and passed to local authorities, who then draw up local funding formulas for onward distribution. This is known as an indirect NFF. Under a direct, or hard NFF, there would be a much-reduced role for local authorities in sharing out core funding for mainstream schools.

In July 2021, the DfE consulted on completing the NFF reforms, proposing a gradual move toward a hard NFF. A further consultation followed in June 2022. The changes require legislation.

The relevant provisions were included in the Schools Bill, which had its second reading in the Lords on 23 May 2022. The Bill also included other measures on home education, academisation and other issues, and proved controversial. On 7 December 2022, Education Secretary, Gillian Keegan, confirmed that the Bill wouldn’t proceed in its current form.

Finding school and constituency funding information

The DfE has published notional, provisional NFF allocations at school and local authority level for 2023-24. These are not necessarily what any school will actually receive in core school funding, but rather what the school attracts to their local authority.

The Department also publishes national and per pupil school funding figures over time; this includes grants such as the pupil premium.

Documents to download

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