Blogs/Vlogs

New national funding formula to overhaul budget allocation for schools

27 July 2018

Before Parliament broke up for the summer recess the government made an announcement concerning the implementation of the new national funding formula ('NFF') for schools.

The government’s intention has been to move towards the setting of individual schools’ budgets based on a single NFF (the 'hard' funding formula), which would see direct funding of schools by the Department of Education.

The government published school-level allocations for 2018-2019 to illustrate the financial impact of the NFF but this was only used to calculate how much each local authority receives. Government funding has continued to be made via local authorities and they had the flexibility to continue to allocate this money through local funding formulae in 2018-2019 and 2019-2020, on the basis that this would ensure some stability during the transition period.

The government announcement last week extended this transition period to include 2020-2021, thereby delaying full implementation of the hard funding formula by another year.

This is not the first time there has been a delay in the implementation of one of the government’s key reforms in the education sector. Since it was first put forward the NFF has received criticism, and it is clear there will be winners and losers however the pot of money is divided.

This latest announcement may have implications for the Budget Forecast Return ('BFR') which all academy trusts have to submit to the Education and Skills Funding Agency by 30 July. The BFR includes the detailed budget for 2018-2019 and summary budgets for 2019-2020 and 2020-2021.

It may be appropriate to revisit the figures for 2020-2021 to make sure that any assumptions underlying the headline figures are still valid. In particular, trusts may have anticipated and adjusted for forecast changes in income following the introduction of the hard funding formula, and these changes are now in doubt.

This development proves that schools funding is a constantly changing picture. It re-emphasises the importance of keeping abreast of all changes as they happen and making sure they are factored in to trust budgets at the earliest opportunity.

If you would like to know more on how this may affect you, then contact your local UHY academy expert or visit our contact us page.

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