Letter from the Government on school funding

I have raised the issue of school funding with the Minister for Childcare and Education, Sam Gyimah MP. I enclose a copy of his response below.

I intend to pursue this issue further with him and convey the concerns that have been raised with me by constituents.


Rt Hon John Redwood MP
House of Commons

25th June 2015

Dear John

Thank you for your letter of 9 June, about school funding.

I was sorry to read of the concerns you raised about funding for schools in Wokingham. We recognise that there are anomalies in the current school funding system, and are committed to making funding fairer.

I hope it will be helpful if I provide some background to the current funding system. There is currently no national funding formula to determine the school budget to be delegated to individual local authorities. Each local authority does, however, apply its own formula to allocate funding to individual schools in their area. The per-pupil allocation to each local authority is calculated by reference to the amount it received in the previous year. This method, known as ‘spend plus’, was introduced in 2006-07 as part of a series of reforms to the previous system of school funding. The Dedicated Schools Grant (DSG) was another element of those reforms, and based initial funding levels on the amount that each local authority had planned to spend on schools in 2005-06 (the final year of the previous system). As DSG allocations are still calculated using the spend plus method, current funding still reflects levels prevailing in 2005-06.

The amount allocated in 2005-06 was determined following an assessment of each local authority’s needs and the amount it had elected to spend on schools. This means that current per-pupil allocations to local authorities are based on assessments of needs and spending decisions that may now be significantly out of date. As overall allocations to the local authorities are in turn based on those historic per-pupil units, the government recognises that the school funding system is no longer ideal, and we are committed to reforming it.

In 2015-16, we allocated an additional £390 million to 69 local authorities that we considered had been unfairly funded in previous years. To allocate this money, we set a minimum level of funding for certain pupil and school characteristics, such as a core amount of funding for each pupil, an additional amount for each disadvantaged pupil, and an amount for each school as a lump sum for fixed costs. Local authorities who would otherwise have received an amount below this minimum level of funding received an increase to their budgets to meet it. Wokingham was one of these authorities, and it received an additional £720,000. The introduction of minimum funding levels means that, while local authority per-pupil rates will still vary, pupils with similar characteristics will now attract a minimum level of funding, regardless of where they are in the country.

Although we have made progress in recent years, we recognise that there is more to be done. Reforming the funding system was a key part of our manifesto, and we will stand by that commitment. We will consult extensively with the sector, the public and Parliament before we introduce any significant reform, and I would encourage your constituents to contribute their views to any future consultation. You will also understand that we need to take account of the interactions between reforming school funding and the decision on the overall budgets for education and other public spending, which will be made later this year.

I would be happy to meet with you to discuss this further.

Thank you for writing on this important matter. I hope you find this reply helpful.

Yours ever,

Sam Gyimah MP