This is a submission to the Department for Education from SCHOOLS NorthEast, the UK’s only regional schools network representing all 1,250 schools in the North East of England.
1. About SCHOOLS NorthEast
Established in 2007, SCHOOLS NorthEast was set up by head teachers to create a unique culture of collaboration and mutual support amongst North East schools to ensure the best possible outcomes for all of our region’s young people. It represents the views of all 1,250 schools in the North East region.
SCHOOLS NorthEast is schools-led, governed by serving head teachers and guided by a 28-strong advisory board comprised of school leaders from all types of schools and representing each of the 12 local authorities that make up the North East region.
A registered charity, SCHOOLS NorthEast works to connect schools to each other and external organisations such as business, to facilitate new projects and additional support, to provide a strategic voice for our members and promote a wider understanding of the issues facing education in the North East.
2. Information
This SCHOOLS NorthEast submission is based on the collective input of schools from across the North East of England - from north Northumberland to the southernmost tip of the Tees Valley and coastal schools across to rural schools in the Pennines. It has taken into account the views of urban and rural schools from the most deprived areas to the least, the largest schools to the smallest and from all 12 local authority areas. It represents the most comprehensive picture of schools input on this consultation from the North East of England.
Qn 1) Do you agree with our proposed principles for the funding system?
SCHOOLS NorthEast supports the Government’s decision to overhaul the current funding system to bring funding into one formula and erase historic disparities, particularly given the Government’s school block data demonstrates that schools in the North East are currently funded £45m less than the national average under current formulae.
Attainment in North East schools lags that of the national average at secondary level and primary schools, while outperforming other areas, face considerable hurdles at pupil entry due to historic low levels of adult literacy and numeracy, substantial deprivation and multi-generational worklessness across the region. This places significant additional burden on resources to ensure all children are ‘classroom ready’ in KS1.
The projected school population growth indicates increasing pressure on resources at secondary school level with LA areas in the region expected to see increases of up to 28% in pupil numbers which will only compound attainment issues yet further if the new national funding formula does not provide sufficient resources for schools to deliver on the targets set by the Education Secretary.
SCHOOLS NorthEast agrees with the headline principles but has the following observations to make with regard to a number of the principles:
1) A funding system that supports opportunity - to enable the Government to deliver the outcomes it hopes to achieve from Educational Excellence Everywhere, the historic disproportionate funding has to be redressed in order that attainment of young people leaving school in the North East is significantly improved. This is a moral imperative for the child and an economic necessity for the region.
2) A funding system that is fair - this is a vital component of any future changes. Inequality harms those schools who have most to gain from a level playing field. The new formula must ensure that those schools identified as requiring the greatest improvement are adequately supported financially to enable them to do so. It must be a formula free of political bias.
3) A funding system that is efficient - while we recognise the attraction of schools being able to benchmark themselves against comparable schools, in practice we have reservations regarding the capability of the new system to accurately demonstrate transparency and comparability across spending. How, for example, will the Government monitor and demonstrate transparency of funding at individual school level in complex multi-academy trusts to enable accurate cross-school spending comparisons? This is not a criticism of MATs, rather a recognition that operating at group level will require difficult decisions on distribution of funding that may see scenarios such as a school being allocated funding for sparsity which is not then ring-fenced for specific interventions to mitigate the social and economic impact caused by the geographic characteristics that attracted the funding in the first place.
4) A funding system that is transparent - as outlined above, while one national formula will show the input amount on a school by school basis, it is not clear that this will translate directly into transparency at an individual school level.
5) A funding system that is predictable - the consultation indicates “we are determined to introduce change at a pace that is manageable”. In and of itself, the introduction of a national funding formula is manageable over a three-year period. However, the Government must take a helicopter view and recognise it is already demanding a phenomenal amount of schools - changes in curriculum at both primary and secondary level, changes in assessment and measurement at both levels, introduction of new testing regimes (and the upheaval and subsequent removal of some of this testing), and the wholesale structural changes via academisation. Adding to this the pressure of a new system of funding, in which the consultation acknowledges there will be ‘gainers’ and losers, serves only to create a high stakes environment in which children could ultimately become the ones who lose out. That cannot be allowed to happen.
SCHOOLS NorthEast would propose the addition of one further principle in the national funding formula:
* A funding system that is accurate - there is no provision in the consultation document for the method by which the Government will ensure the system is accurate. Schools have raised concerns about how they can query/challenge the funding settlement they will receive if they believe it is inaccurate. Currently, schools that identify potential issues in funding can liaise directly with local authorities to have their settlement re-assessed. While the consultation document identifies variances in formulae across LAs, the LAs employ staff who are directly responsible for school financing. They are able to handle enquiries directly. With c.23,000 schools all receiving funding directly from DfE, how does the Government propose to manage enquiries and to ensure schools receive accurate settlements? By including an additional principle that the system must be accurate it is a positive commitment on the Government’s behalf to ensuring the system works for all schools. SCHOOLS NorthEast encourages DfE to be clear regarding the appeals system it plans to establish and to ensure it has sufficient capacity, particularly in the early transition years of the formula.
Qn 2) Do you agree with our proposal to move to a school-level national funding formula in 2019-20, removing the requirement for local authorities to set a local formula?
In principle, moving to a school-level formula is acceptable, provided the weighting attributed to the factors within the formula does not disproportionately impact on schools’ ability to give children in their area the best possible education.
While it is imperfect, the School Forum approach has in the past enabled schools collectively to agree the most important factors within their locality and to fund accordingly. Funding directly is a disincentive to that collective schools/community-focused approach.
DfE will have a difficult balancing act to ensure the new approach does not run counter to the Government’s clear localism agenda where decision making is devolved to local communities to make the decisions that are in their own best interest. The changing structure of education has increasingly created competition - particularly for pupil placements and teaching staff - that has the potential to remove that community cohesion.
The greatest risk appears to be on the margins where decisions on weighting could have the greatest ramifications for individual schools.
Qn 3) Do you agree that the basic amount of funding for each pupil should be different at primary, key stage 3 and key stage 4?
Broadly, yes, although it is not clear cut.
Schools acknowledge the increased costs in secondary schools - particularly at KS4 where the potential for schools to provide a broad and balanced curriculum is dependent on having the resources to offer a range of options for pupils. Further considerations are the cost of examinations and the additional requirement for specialist equipment for certain subjects.
RECOMMENDATION: One recommendation made during SCHOOLS NorthEast’s consultation with schools is that the Government give serious consideration to the removal of examination costs from school budgets. This would reduce the cost differential between KSs 3 & 4 and versus primary where SATs are not charged directly to the school.
Two factors that need to be well thought through at KS3 are transition and the change in SATs resits. It is evident from the performance differential between primary and secondary schools nationally that KS3 remains a turbulent period. The ability to fund raised attainment at this level will have a positive impact at KS4. Additionally, secondary schools are now required to manage educational improvements for pupils who do not achieve the necessary progress when they leave primary school which has financial and staffing implications.
At primary level, schools are broadly accepting of a single funding arrangement. The one area that was identified during consultation which schools saw as a potential benefit for increased funding was the catapult effect of investment at KS1 where greater investment can spur children on their education journey more effectively.
Qn 4a) Do you agree that we should include a deprivation factor?
Yes. Although some schools challenged the need for a proxy formula, preferring that the Government consider ring-fencing a funding pot into which schools could submit funding bids based on need.
Schools also have concern about the disjoin between the Departments for Education, Health and Work & Pensions when it comes to deprivation.
Qn 4b) Which measures for the deprivation factor do you support?
• Pupil-level only (current FSM and Ever6 FSM)
• Area-level only (IDACI)
• Pupil- and area-level
On balance, a combination of both pupil and area level is preferable with the additional request that the Government changes the method of identification of FSM/Ever6 to auto-enrolment (removing the onus placed on parents to identify themselves as eligible).
Schools have issues with FSM/Ever6 for four reasons - 1) this is an opt-in measurement and relies on parents to identify themselves to the school which can be a source of personal embarrassment to the individuals concerned and/or some parents are unaware of the beneficial impact in terms of funding directly to support their child; 2) changes to Universal Credit will adversely impact on FSM numbers in future but the need will still remain; 3) solely focusing at pupil level creates a significant risk of double-funding because Pupil Premium is determined via Ever6; 4) the introduction of universal FSM at KS1 has led to under-recording of those who would be entitled for FSM prior to introduction of free meals for all.
IDACI is an imperfect measurement, not least because it is possible to have a high achieving grammar school and comprehensive school with high levels of deprivation situated in the same LSOA. However, schools do feel there is a role for it in the deprivation factor while recommending changes.
RECOMMENDATION: Maintain IDACI as an element of the deprivation factor with the addition of a) focus efforts on improving the effectiveness of IDACI either by allocating funding per pupil depending on their individual score or increase the frequency of compiling/publishing IDACI data so it isn’t quinquennial, and b) consider a smoothing or tapering element to reduce large fluctations upon publication of new data. It would be perverse not to include a factor on the basis that it can cause fluctuations at the point of data publication, rather the Government should consider how it can improve the measurement.
Qn 5) Do you agree we should include a low prior attainment factor?
In principle, yes. In practice, at primary level it cannot become an undue influence on schools’ assessment of pupils. The real-terms tightening of school budgets is a growing pressure on schools and while the expectation is that schools will accurately assess pupil entry levels, linking LPA to funding effectively puts a pound sign above each assessment. This acts as a disincentive for schools in terms of EYFS outcomes.
There is an additional issue for schools in areas that experience high transience in the local population, particularly where pupils entering the system at the start of Year One have low attainment in their own language. Those schools who have EAL intakes where children have high attainment in their first language can achieve the required improvement over the three years, where those with low attainment need additional support.
Schools welcomed the consultation comments on SEN with regard to providing tools and guidance as opposed to setting a notional SEN budget. This respects school leaders’ ability, as professionals, to determine which proportion of their budgets is best spent where.
Qn 6a) Do you agree that we should include a factor for English as an additional language?
Yes.
Qn 6b) Do you agree that we should use the EAL3 indicator (pupils registered at any point during the previous 3 years as having English as an additional language)?
In a minority of schools, EAL3 will leave them at a significant disadvantage, particularly if mobility is removed as a factor. One North East school cited an example where they have children join in Year Two and trigger the funding, then move abroad for two years before returning. They then won’t re-trigger funding, leaving those schools without additional funding for Years 5 & 6. This is at odds with LPA funding.
Qn 7) Do you agree that we should include a lump sum factor?
Yes. The Government is seeking to provide schools with greater consistency and visibility of their future budgets. Fixed costs are a clear element where a lump sum factor will provide certainty for schools.
The greatest issue is one of how smaller schools will cope once the national formula is in place. The consultation rightly acknowledges that fixed costs consume a far greater percentage of a smaller school’s budget, leaving it with less money to focus on delivering on its core purpose of education.
While the Government may see the opportunity for economies of scale to rationalise this issue, the reality is that for large parts of the North East smaller schools are the predominant type - due to demographics, population spread and sparsity.
In Northumberland, 81 of 167 primary schools have fewer than 150 pupils. In County Durham, it is 89 of 238 primaries. These schools are at the hub of communities and ensure children are not forced to travel significant distances/travel times for their education. The lump sum factor must be recognised as crucial to their ongoing sustainability.
Qn 8) Do you agree that we should include a sparsity factor?
There is a correlation in argument across lump sum and sparsity factors. While sparsity is not an issue for many schools, where it is relevant it is disproportionately relevant - reduce this as a factor for remote schools and it will drive schools out of business in communities that rely on them the most.
The formula need not use LA geographical area to decide sparsity.
Qn 9) Do you agree that we should include a business rates factor?
Yes - or design a mechanism for the Government to pay directly to LAs and thus simplify the system.
Qn 10) Do you agree that we should include a split sites factor?
Yes. Ideally, this would be allocated to school on a demonstrable costed basis rather than a nominal formula.
Qn 11) Do you agree that we should include a private finance initiative factor?
The consultation acknowledges the individual nature of PFI contracts and so we would question how effectively this can be covered via the formula. PFI contracts are costly and complex and do not sit comfortably with the Government’s planned approach of heavily weighting funding at a per pupil level.
The Government should consider removing this as a factor to ensure schools are adequately covered for the cost of their individual contract. PFI must not be a drain on education resources at school level.
Qn 12) Do you agree that we should include an exceptional premises circumstances factor?
As with split sites, this is an area of funding specific to the circumstances of the school which makes it more difficult to adequately cover in a formula. Funding based on costed need is more appropriate.
Qn 13) Do you agree that we should allocate funding to local authorities in 2017-18 and 2018- 19 based on historic spend for these factors?
• Business rates
• Split sites
• Private finance initiatives
• Other exceptional circumstances
The principles of the national funding formula include a provision for fairness. The most equitable way to fund these areas is based on actual cost (including considerations within contracts such as inflation).
Qn 14) Do you agree that we should include a growth factor?
Yes. Schools must be adequately recompensed for increases in in-year rolls at the time of need and not lagged to the following year.
Qn 15) Do you agree that we should allocate funding for growth to local authorities in 2017-18 and 2018-19 based on historic spend?
No. Funding needs to be allocated to schools at the point that rolls increase. In practice, this is extremely difficult to do on an individual basis so the Government should consider either a) developing a more robust way to assess rolls more regularly ie/ termly review; or b) a trigger mechanism based on classroom impact where numbers increase to the extent that they will impact on the delivery of education (eg/ increased numbers requiring additional teaching support).
Qn 16a) Do you agree that we should include an area cost adjustment?
No. SCHOOLS NorthEast has significant concerns regarding the proposed ACA and particularly the consideration that this be applied as a multiplier of the total per pupil formula settlement.
This has the potential to undermine the guiding principles of the formula and hamper the delivery of Educational Excellence Everywhere.
While we accept that areas face differing cost pressures, for example recruiting teachers in high cost areas, there are significant pressures in other areas that mitigate the necessity for an ACA.
The consultation cites the impact of labour market costs on school spending. The employment landscape for schools is such that geographically remote areas face significant challenges in recruiting staff. Schools are experiencing ever greater issues - and associated costs - in finding staff with an ever more competitive market place, particularly for Ebacc subject specialists. Such competition is driving wage inflation which will have a disproportionate impact on schools that do not benefit from an area cost adjustment multiplier.
Inflating the budgets of schools in areas of high cost so they can pay more for teaching staff is inequitable and will potentially drain talent from the regions that currently lag the national attainment levels.
Schools are also opposed to the suggestion that certain LA areas retain a ‘London fringe’ benefit. If the national formula is operating correctly there should be no requirement for special treatment.
Qn 16b) Which methodology for the area cost adjustment do you support?
• general labour market methodology
• hybrid methodology
As outlined above, SCHOOLS NorthEast remains opposed to the inclusion of an area cost adjustment for reasons that it will skew the fairness of the national funding formula and has a narrow focus of intent which ignores wider factors. Its potential to adversely impact on the desire to see Educational Excellence Everywhere is clear.
Should the Government determine an ACA will be implemented, the hybrid methodology is a more sensible approach.
We would reiterate our concerns that this be applied as a multiplier to the overall formula results.
Qn 17) Do you agree that we should target support for looked-after children and those who have left care via adoption, special guardianship or a care arrangements order through the pupil premium plus, rather than include a looked-after children factor in the national funding formula?
Yes.
Qn 18) Do you agree that we should not include a factor for mobility?
Schools believe there is little appetite currently for the mobility factor because of the way it is constructed. There is no significant objection to its exclusion if the EAL issues identified in our answers to qns 6a & 6b are incorporated. The cost to schools where there is greater transience, and particularly for pupils with low attainment in their first language, needs to be incorporated in the national formula.
Qn 19) Do you agree that we should remove the post-16 factor from 2017-18?
Yes, on the basis this funding would be protected by the minimum funding guarantee through the transition period.
Qn 20) Do you agree with our proposal to require local authorities to distribute all of their schools block allocation to schools from 2017-18?
Yes. This is more complex than it initially appears. While the allocation of all funds determined by the formula for a particular school is the right approach, it removes the flexibility in the system to address need where it is at its greatest.
There are significant issues in the education system that can be addressed in Early Years which have a long tail of positivity in terms of attainment. Equally, in areas where high needs is a significant burden, the lack of flexibility could lead to social exclusion via underfunded provision that is ill-equipped to deal with demand.
Schools already report concerns around the growing demands on Pupil Referral Units and the wider issue of high needs.
The Government needs to tread carefully in this area to ensure that the more autonomous schools system, potentially removed from the current community focus, does not effectively turn its back on the areas that it currently works in partnership with to ensure opportunity for all.
Qn 21) Do you believe that it would be helpful for local areas to have flexibility to set a local minimum funding guarantee?
Flexibility in the local minimum funding guarantee to address local needs in the short term has the potential to be useful. However, the Government ought to identify a transitional fund to smooth the introduction of the national funding formula. Requiring LAs and schools voluntarily accept greater reductions in schools block funding during this period is unhelpful.
Schools are also worried at the lack of an appeals system built into the national funding formula process.
Qn 22) Do you agree that we should fund local authorities’ ongoing responsibilities as set out in the consultation according to a per-pupil formula?
As outlined above, funding on an area cost basis is too narrow an approach and does not recognise other implications. There is the potential that those areas which require funding the most will face the greatest funding difficulties.
In particular, large LAs would continue to have funding to maintain more than the smaller since all schools, if academies, would, like Voluntary Aided schools, need to consider their own applications and coordinated admission would simply ‘coordinate’.
Qn 23) Do you agree that we should fund local authorities' ongoing historic commitments based on case-specific information to be collected from local authorities?
SCHOOLS NorthEast accepts this is a sensible approach in the short term and should be reviewed at a later date.
Qn 24) Are there other duties funded from the education services grant that could be removed from the system?
Child mental health is a significant and growing issue. The Government should consider moving education psychology services to be funded from the Health Budget in future (like School Nursing is already). Another area for consideration is funding Parent Support Advisors from Social Care budgets.
Qn 25) Do you agree with our proposal to allow local authorities to retain some of their maintained schools’ DSG centrally – in agreement with the maintained schools in the schools forum – to fund the duties they carry out for maintained schools?
While it runs counter to the rationale for creating a national funding formula to then have some of the DSG retained centrally, this will be a turbulent period, particularly for maintained schools. In the interests of a smooth transition, it would be sensible to allow LAs to retain a proportion of DSG.
