School funding per-pupil “varies by 40%”

Released 17/11/2011

The Public Funding Accounts Committee publish a report suggesting the revision of local authority funding, including the Dedicated Schools Grant in the balance

The Public Accounts committee reported that significant inconsistencies in public spending meant that the amount maintained schools received per pupil could vary by as much as 40%

The Public Accounts committee have published a report on public service spending, leading to calls for a restructure of the formula used to ensure fairness and equality in the future.

The repercussions of the report could have significant effect upon the future for the budget of maintained schools, who rely upon local authority grants for their income.

MPs on the committee evaluated the Dedicated Schools Grant, criticising the current funding model as being too “complex and difficult to understand” and stating that too much emphasis has put on the stability and continuity of local public services in the past rather than assessing local authorities on the basis of their need.

The committee indicated that this had led to significant inconsistencies in public spending and that the funding that maintained schools received per pupil could vary by as much as 40% across the country.

Committee chair Margaret Hodge said that there are "a lot of things wrong" with the current formula used and that many local authorities were struggling to understand the formula.

“The actual needs of local authorities are assessed but, because priority is given to stability of funding, 20% of the authorities receive funding that is more than 10% higher or lower than they need,” she said.

“The current system for distributing central Government funding to local bodies is complex and difficult to understand,” added Hodge stating that “too often results in local public bodies getting the wrong amount of money, which is not fair to local communities.”

The report found that the £152bn, one-fifth of all government spending, was allocated in 2011-12 in the form of three formula-based grants. One of these grants, the Dedicated Schools Grant that funds maintained schools was the largest single funding stream to English local government before the start of the academies movement.

“There are a lot of things wrong with the formulae that have led to very unfair allocations which have failed to meet local needs,” said Hodge. “For example, the Dedicated Schools Grant is based not on current need but on historical spending patterns with the result that similar schools can vary in the amount of funding they receive per pupil by as much as 40%.”

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