Blogs/Vlogs

Extra funding for schools announced by Justine Greening

20 July 2017

The education secretary, Justine Greening, has made a promise to increase the current level of core funding per pupil in England. This announcement is in response to pressure from school leaders and other MPs, including those in her own party who want the government to respond to concerns raised by their constituents during the general election campaign.

The promise will mean an additional £1.3 billion in funding received by schools over the next two years. However, there is no new money being made available by the Treasury - in order to pay for the rise in funds the Conservative party plan to reduce the budget for capital and free schools as well as finding savings from elsewhere in the Department for Education budget. Part of the free schools budget would have been used to fund new grammar schools, championed by Theresa May.

How the £1.3 billion is being funded:

Efficiency savings from the DfE budget £0.6bn
Reduction in free schools budget £0.2bn
Reduction in capital budget £0.4bn

It’s clear that the funding announced by the education secretary will not answer the funding pressures faced by schools for a number of reasons, eg. pay costs increasing due to pay awards (capped at 1%) and incremental pay pressures; as well as general cost inflation. It is also the case that while some schools will receive an additional 3% of funding, some will receive as little as a 0.5% increase, which is a cut in real terms and widens the funding gap between schools.

The Institute for Fiscal Studies (IFS) predicts that funding for schools will equate to a real terms cut of 4.6% between 2015 and 2019. Without the £1.3 billion extra funds the real terms cut would be 6.5%.

Whilst the planned 2% cut between 2017 and 2019 is now reduced to a real terms freeze in funding, which will ease some of the pressures faced by schools in the short term, it does not reverse the funding reductions in previous years which have had a significant impact on the way schools are run.

Justine Greening has also announced that the national funding formula will be indicative in 2018 and 2019 and therefore not be fully implemented until 2020. The funding formula is one of the major concerns we hear about when talking to academy schools given the wide variation in levels of funding between cities and rural areas.

Schools will have to wait until the chancellor announces the details of his Autumn Budget to see if any additional funding will be made available by the Treasury.

If you would like to discuss funding issues, please contact your local UHY academy expert. If you would like to learn more about the services we offer to academies, please click here.

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