Stage 2 of the government’s process of moving to a ‘Schools national funding formula’ was published just before Christmas. Unlike Stage 1, which was about the principles of a new formula, this consultation gave some figures for people to scrutinise. Not surprisingly, it has provoked much reaction. The winners and losers have rushed into print. MPs in areas which will have more money have claimed credit for the success of their campaigns; Heads and Governors in areas likely to be worse off have howled in anguish.
In this article we will look at:
- Exactly why a new funding formula was necessary
- How previous opportunities for achieving this have been missed
- What is positive and welcome in the latest proposal
- What needs to be done to make it better
Before the 1988 Education Reform Act and the introduction of Local Management of Schools (LMS), Heads and Governors had no idea of what money was being spent on their schools. Everything was provided and paid for by the Local Authority (LA) who really did control schools, deciding how many teachers could be employed, how many responsibility points allocated, how many technicians, secretaries and teaching assistants appointed and even when the classrooms were to be re-decorated. Of course, the LA councillors and officers knew what it all cost because they raised most of the money through the rates. Consequently the money spent on schools varied widely across the country, depending largely on the priority councillors gave to education and their political appetite for raising taxes.
LMS gave schools much greater financial autonomy, allocating to the governors the sum that would have been spent by the LA. This was broadly welcomed at the time, giving schools greater flexibility, at the margins, to adapt their spending to local needs. So far, so good. But Ken Baker’s 1988 Act also introduced a national curriculum, national testing, leading to a national inspection regime and national school league tables. Financial management and budgeting decisions became a hot topic in professional associations, especially the Secondary Heads Association (SHA). Heads started to compare their budgets with similar schools in other parts of the country and were astonished to discover the different levels of funding available. In about 1992 it dawned upon secondary school Heads that their schools were being judged against national criteria but being funded on the basis of local decision-making. The manifest unfairness of this led to the setting-up of a campaign for a fairer national funding formula and the first pamphlet on this issue was commissioned by the SHA from the London School of Economics in 1994.
Over the last 22 years the clamour for fair funding has grown as public scrutiny of school performance has intensified. Professional and academic support for a more equitable distribution of resources has spread widely but has only recently gained political support.
Opportunities for reform have been missed. John Major’s Conservative colleagues were impressed by the cogency and clarity of the case but felt unable to take matters further. As one senior Department for Education official put it: ‘In matters such as funding, a little obfuscation assists the political process.’ The Labour government took it much more seriously and set up a powerful and widely representative working party – the Education Funding Strategy Group. This group commissioned specialist reports on all aspects of school funding and came up in 2002 with a full and detailed proposal which would have commanded widespread if not unanimous support. Although they appeared to be convinced by the merits of most of the proposals, the DES Ministers, Charles Clarke and David Miliband, refused to recommend it for implementation. In broad terms, it would have meant moving money away from the Labour conurbations into the Tory shires and that was hardly likely to appeal to Tony Blair. With the benefit of hindsight, it is clear that this was a big mistake because the Labour government was, to its credit, increasing expenditure on education significantly in real terms between 2000 and 2005 so it would have been able to improve allocations to the less well-funded areas of the country without having too negative an impact on those who had generous funding (sometimes without realising their good fortune).