School funding: annual settlements under the Coalition Government

This note provides a summary of some of the key changes made in each of the annual school budget setting rounds under the current Government.

The national funding formula for schools is expected to be introduced in 2015–16. In preparation for this, the DfE has used the annual funding round for schools to make changes to how local authorities are allocated their schools budget. Key changes have included:

• rolling a number of grants into the main Dedicated School Grant (DSG);

• splitting the DSG into three notional (and unringfenced) blocks;

• reducing the number of local formula factors that local authorities may use to distribute the Schools Budgets, which included:

o an optional single capped lump sum payable to all schools; and

o an optional sparsity factor.

It should be noted that the current Government came to power in May 2010, after the start of 2010-11 financial year (which was also the last year of a three year settlement under the previous Government); therefore, the first changes it could make to core school revenue funding were in 2011-12.