Letter from the Secretary of State for Education with regards to the National Schools Funding Formulae

Dear Colleague

I have today set out the Government’s detailed plans to introduce national funding formulae for schools and for high needs support for children and young people with special educational needs.

These crucial reforms will tackle the historic postcode lottery in school funding, and sit at the heart of delivering the Government’s pledge to build a country that works for everyone, not just the privileged few.

Since 2010 this Government has protected the core schools budget in real terms overall, but the system by which this funding is distributed across the country needs to be reformed. The system as it exists today is unfair, opaque and outdated. It is based on patchy and inconsistent decisions that have built up over many years, and on data that is a decade or more out of date. It allows similar schools with similar students to receive levels of funding so different that it puts some young people at an educational disadvantage. We cannot allow that to continue, and that is why introducing fair funding was one of the key manifesto commitments this Government was elected on in 2015.

These proposals would replace the current unfair system with a new formula, geared towards ensuring that children with similar characteristics, and similar needs, attract similar levels of funding - regardless of where their family happens to live. That will level the playing field for pupils, and give parents the confidence that all schools have an equal opportunity to support every child to reach their full potential.

The detailed proposals I have set out today are based on the principles and broad design outlined in the first stage of the national funding formula consultation, which received strong support earlier this year. Building from that foundation, we are proposing to protect resources for pupils who come from disadvantaged families, taking a broad view to identify those most in need of support. Our formula will prioritise not only children in receipt of free school meals, but also of those who live in areas of disadvantage, helping to support many more families who are just about managing to get by.

In addition, we will direct more funding towards pupils with low prior attainment – at both primary and secondary school – to ensure they get the vital support they need to catch up with their peers. We will also maintain the pupil premium for deprived pupils in full, delivering the manifesto commitment to protect the pupil premium at current rates throughout this Parliament.

Our proposed reforms will mean schools and local authorities all across England that have been underfunded for years will see their funding increase. This is long overdue. Our formula would result in more than 10,000 schools gaining funding, including more than 3,000 receiving an increase of more than 5%. Those that are due to see these gains will also see them quickly – with increases of up to 3% in per pupil funding in 2018-19 and a further 2.5% in 2019-20. Local authorities due to see gains on high needs will see increases of up to 3% in each of 2018-19 and 2019-20.

At the same time as restoring fairness to the funding system, we are also building in significant protections into our formula: no school will face a reduction of more than 3% per pupil overall as a result of the new formula, and none will lose more than 1.5% per pupil per year. On high needs, where funding changes could be even more acutely felt by the most vulnerable young people in our society, no area will see their funding reduce. These are unprecedented protections.

Taken together, these proposals will allow schools and local authorities to manage the transition to fairer funding while making the best use of their resources and managing cost pressures, ensuring every pound is used effectively to drive up standards and have maximum impact for the young people they serve. To support schools in using their funding to greatest effect we have put in place, and are continuing to develop, a comprehensive package to help schools to become as efficient as possible.

As I said in my statement to the House on 21 July, the historic importance of this reform makes wide-ranging consultation especially important, so that we can ensure that the national funding formula we introduce is the right one. Today’s consultation will be open for 14 weeks until 22 March. I am keen to hear as many views as possible and encourage Members and their constituents to scrutinise and respond to the detailed consultation documents published on Gov.uk (see below). The Minister of State for Schools and I are keen to have the opportunity to discuss these proposals, and their potential impact of particular parts of the country, with Members during the consultation period. If you would like to arrange a meeting, please get in touch with the Minister’s private office.

Final decisions will be made before the summer next year. The national funding formula will be introduced in 2018-19. That will be a transitional year during which local authorities will continue to set local schools funding formulae, before we move in 2019-20 to the great majority of each school’s individual budget being determined on the basis of a single, national formula.

Our proposals for funding reform will mean schools and local areas receive a consistent and fair share of the schools budget, so that they can have the best possible chance to give every child the opportunity to reach their full potential. Once implemented, the national funding formula will put us firmly on the path to a system where, wherever a family lives in England, their children will attract a level of funding that properly reflects their needs. I hope that you will be able to offer these changes you support.

Yours sincerely,


Rt Hon Justine Greening MP
Secretary of State for Education and Minister for Women and Equalities

Schools National Funding Formula Stage 2: Consultation https://consult.education.gov.uk/funding-policy-unit/schools-national-f…

High Needs Schools Funding Formula: Consultation https://consult.education.gov.uk/funding-policy-unit/high-needs-funding…