Education & Family

Institute for Fiscal Studies study airs schools funding fear

classroom scene
Image caption Institute for Fiscal Studies researchers said potential inequalities did not rule out the need for reforms

Plans to alter education funding could boost the budgets of some schools, while others see theirs reduced, the Institute for Fiscal Studies suggests.

Currently, most school funding goes directly to local authorities who decide how to share it out.

But a government plan to base funding on one nationally set formula, could create "winners and losers", a study by the research body suggests.

The government said it wanted to make the system "more transparent".

The IFS report looks at different options for a national funding formula, a plan announced by Education Secretary Michael Gove.

It considers the option of setting a fixed amount of money for all pupils, possibly with different levels for primary and secondary schools, including extra cash for poor students.

Other factors, such as additional funding for schools in high-cost areas to recruit teachers, were also considered by researchers.

The study concludes that even if the formula is kept as simple as possible, to minimise disruption to schools, around 15% of schools would face cuts of 10% or more compared with the current system.

But around one in 10 would see their budgets rise by 10% or more.

"Whatever formula is chosen, it will lead to a large number of winners and losers relative to existing policy," says the report.

'Sustained losses'

It goes on: "This is an inevitable consequence of replacing the current system, where funding levels can be based on myriad historical and local factors, by a simpler version that seeks to make funding more transparent and consistent across the country."

The authors of the report warn that a new system should be introduced over a long period, and that any move of less than a decade "will involve significant, sustained losses for some schools".

According to the study, a change-over of six years would leave some schools facing annual cash-terms cuts of up to 5%.

However, the report also says "maintaining the status quo is unlikely to be desirable either".

"Without reform, school funding may become less transparent and less related to educational needs over time," states the report.

Report author Luke Sibieta, who is an IFS senior research economist, said there is "little doubt" that the school funding system merits reform.

Meanwhile, a Department for Education spokesman said the IFS agrees that maintaining the current funding system is "undesirable" and without it school funding "may become less transparent and less related to education needs over time".

He said: "We want to make it fairer, simpler and more transparent.

"The introduction of a new formula would inevitably mean that some schools would receive more funding and some would receive less.

"We would, however, put in place transitional arrangements to ensure that schools do not experience sharp changes to their budgets."

But shadow education secretary Stephen Twigg said the largest cuts would come in areas with the greatest need for funding, such as Liverpool, Wigan and Coventry.

"These changes could bring costs and disruption to all schools, as well as large losses for some," he said.

"The government needs to be far more open and transparent about its plans which are understandably frightening for teachers, heads and parents," added Mr Twigg.

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