1. A new approach to education funding – a proposal from f40 Briefing for MPs 3rd February 2015

2. The formula - purpose To demonstrate that: A formula approach to funding education is feasible The current distribution is seriously flawed and unfair F40 believes that the model achieves these aims, is fair, based on reasonable assumptions and can be defended against challenge

3. The starting point Government distributes £39bn for education through Dedicated Schools Grant (DSG). DSG has 3 blocks: schools, early years, high needs Basis for the distribution is historic Government has acknowledged that school funding is unfair No national funding formula in this parliament But additional £390m in 2015/16

4. Key features of the formula Based on 2014-15 funding Retains the current Dedicated Schools Block structure – schools, early years, high needs Allocates funding to local authority level i.e. not to individual schools Full local discretion on shifting funding between the blocks Formula for each block (but in effect one big formula) Takes no account of current patterns of spending, or of early years or high needs provision

5. How it works - The Schools Block Core costs: – Core entitlement – based on standard class cost – Lump sum – based on ‘normal minimum’ school size for primary (60 pupils) and secondary schools (600 pupils) – Sparsity – based on current DfE model pending further work Pupil specific: – Deprivation – SEN/prior attainment – English as an additional language

6. The Core Entitlement Key Stage 1/2Key Stage 3Key Stage 4 Basic class cost£54,005£56,921 Standard learners per teaching group 292219 Class cost per pupil£1,862£2,587£2,996 Leadership cost per pupil£504£466£478 Exam fees per pupil£275 Other costs per pupil£591£916£1,042 Total core entitlement per pupil£2,957£3,969£4,791

7. The lump sum PrimarySecondary Normal minimum school size (pupils) 60600 Additional cost of headteacher over standard size school (210/900 pupils) £34,658£5,435 Administration and finance£10,000£40,000 Premises and supplies and services£25,000£100,000 Additional half class£26,344n/a Total lump sum£96,002£145,435

8. How it works – Early Years The formula: £4.68 for each 2 year old £3.90 for each 3 and 4 year old Allowance for deprivation using EY Pupil premium data. = 3% of total Takes no account of provision e.g. maintained nurseries or other costs charged against the EY block

9. How it works – High Needs Interim proposal pending completion of the DfE research commissioned from ISOS Based on PriceWaterhouseCooper work 2009 The formula: – Pupil numbers 51.4% – Prior attainment 33.9% – Deprivation 14.7% NB f40 believes this formula weights prior attainment and deprivation too highly

10. The Impact Range of winners and losers – from around +10% to around -20% More winners (96) than losers (55) on the schools block, and overall Significant redistribution from inner London to Shire Counties in particular Mixed picture for outer London, Metropolitan and Unitary authorities – reflects inconsistencies in historic funding

11. Some other issues Employment and other costs increases 2015-16 and 2016-17. Will need additional funding F40 still arguing for: – Transition to a new formula over 3 years – Common funding year for maintained schools and academies – Formula replication by Education Funding Agency to cease – Rates to be removed from school funding or funded at LA level for maintained schools and academies More research needed on sparsity

12. Where are we now? Meeting with DfE 21 st January: – Keen to continue working with f40 – Results consistent with DfE’s Minimum Funding Levels used to allocate the additional £390m for 2015/16 Next steps – Update the model to 2015/16 – Flyer for schools – Update formula in light of ISOS work on high needs – Meeting with Secretary of State?

13. Issues for f40 areas Sustaining the additional money for 2015/16 Schools facing big increases in employment costs Manifesto commitments on fair funding If school funding is not protected in next parliament it will be even more important to tackle the unfairness