Leader magazineASCL - Association of School and College Leaders

Money's too tight to mention

Piggy bank in a vice

In 2003 the Government squandered its best chance to create a fair funding system. Still, ASCL's campaign on this front has remained vigorous, says John Dunford. Progress has been made, but the recent machinery of government changes will bring new challenges.

This association has had a long-term commitment to fair funding across the education system. We have long advocated fairer funding of schools and we have stated loudly and often that the funding gap between colleges and schools should be closed.

Arguing the case for fairer funding has been an uphill struggle. Politicians do not like changing funding formulae. I recall a meeting in 1994 with the Conservative Government's schools minister, Eric Forth. His response to our carefully argued educational case for fairer funding was as blunt as his pocket handkerchief was loud: "Changing the funding formula will create losers as well as winners. The losers will complain and cause us political damage." So nothing happened.

Charles Clarke found out to his cost the truth of Forth's assertion. When he came to the SHA annual conference in Birmingham in March 2003, he was taken aback by the succession of questions about funding.

The first question, from Mike Chapman, then a head in East Yorkshire, was typical: "I have been a head for 13 years and have never had the funding problems that I have had this year. How has this happened and what is the minister going to do about it?"

Charles Clarke said to me afterwards: "How can heads say that school funding is worse in 2003 than under the Conservatives, when Labour has increased funding in real terms since 1999?"

Where has it gone?

The reason Charles Clarke was so surprised was that, at that time, civil servants had no way of modelling what happened to government funding policies at school level.

They waved their wands in Whitehall - a few million here, 50 million there, 200 million for another special project - with a frequency and incoherence that created many different pots of money for which only some schools bid or were eligible. It was hardly rocket science, therefore, that Whitehall was unlikely to know how much was in each school budget unless they monitored funding at school level (which they didn't).

The specific problem in 2003 was that the Government made a large number of simultaneous changes to school funding - not least the change in the pension regulations - but was unable to map the effect of these changes on individual schools.

There were big winners among schools, who tended to keep quiet, and there were very big losers, who made a lot of noise and asked inconvenient questions at conferences. Eric Forth had a point.

The 2003 debacle has made it more difficult to persuade education ministers and the Treasury to ignore Forth's advice.

It has also slowed the pace at which the system was progressing towards greater equity. In the mid-1990s, the Education Funding Strategy Group, on which this association argued its case for a national funding entitlement for students, devised a process through which funding would gradually become fairer.

This was just beginning to have a beneficial effect by 2003 when the problems brought it to a juddering halt. When it was decided to distribute the Dedicated Schools Grant through Spend Plus in 2006, the pace of reform slowed further.

Since 2003 the priority has been stabilisation, rather than equity, in the system. The minimum funding guarantee, with floors and ceilings, was invented and schools that have relatively low funding remain constrained by their historical funding levels.

Opportunity lost

We knew at the time - and it has become painfully obvious since then - that the period around 2003 was the best time to reform the funding system. Real terms funding nationally was increasing at a rate that meant that badly funded schools could be funded better without harming the better off schools, where the rate of increase would be slower, but it would still be an increase.

Because the Government tried to do too many things at once, and because there was no knowledge of what would happen to individual school budgets when all the changes were introduced, the chance for reform was blown. The real terms increase in funding has now slowed to a level where reform is more likely to create losers - and therefore less likely to be attractive to politicians.

Yet it cannot be right that some parts of the country cannot afford the level of provision enjoyed by students and teachers elsewhere.

This is not an argument for equality, but for equity, with differences in need being reflected in a transparent way.

In spite of all the funding reforms, it remains the case that very similar schools in different parts of the country are often still receiving very different sums to deliver the same service. But nobody asks about the funding levels when Ofsted comes to judge the work of a school.

Funding for special circumstances, which used to be fiendishly complicated (it was said that the funding formula in one north-west area included a factor for the type of grass on the playing field), is still very unsatisfactory, with a lack of clarity in the levels of funding for disadvantage and additional educational need.

So the ASCL campaign - which began with A Better Cake in 1994, then Fairer Funding in 2000 and Fairer Funding: from exasperation to entitlement in 2003 - continues with as much vigour as ever. The fundamental ASCL message is the same - a transparent, equitable national funding entitlement for students - but the issues are becoming more complex.

Whole new ball game

The splitting of the DfES into the DCSF and DIUS, with the consequent change of role for the LSC has created a whole new ball game, as Lindsey Wharmby describes in her article New dawn for funding. It is ASCL's strongly held view that the stability and predictability of the LSC funding mechanism should be preserved in the change-over to funding post-16 education through local authorities.

In other words, ASCL wants to see a national funding formula for schools and colleges for post-16 education, with the funds passing through the local authorities without touching the sides, as it were.

It is unthinkable that ASCL members in colleges, serving as many as 30 local authority areas each (to say nothing of the specialist colleges, which serve up to 100), should have to bear the bureaucratic burden and uncertainty of a different funding policy in each of the 150 local authorities in England - a view that we have made clear to ministers from the day after the machinery of government changes that split the DfES.

The interests of schools and colleges are identical here and ASCL is in the unique position of representing them both. Indeed, it is our view that the principles that apply to post-16 funding are valid for the whole 14 to 19 phase and we look forward eventually to a national formula for that age group.

As well as arguing about the funding methodology, ASCL has always been strong in its views on the quantum. If the cake isn't large enough, whatever way it is cut there will be problems. In this respect, we are already putting forward the case for adequate funding for the new diploma courses.

Diplomas are central to the Government's policy for maintaining young people in education or training until the age of 18 and keeping them well motivated to learn throughout. But the range of courses, the logistics and partnership working make diplomas an expensive option.

ASCL has called for special funding provision for secondary schools and colleges to implement 17 diplomas, each at three levels - that's 51 separate diplomas - in every partnership.

Just as primary schools were given extra funding to implement planning, preparation and assessment (PPA) time from 2005, so secondary schools and colleges need a funding uplift in order to make diplomas a reality.

This needs to be core funding and not, as so often happened in the past, funds to bid for. The bidding culture of the 1990s has thankfully passed, although there are still too many hoops to jump through to access some funds. Colleges, in particular, have become masters of the art of bidding.

'Efficiency savings'

Another device from Government policy towards colleges that has now crept into schools' funding is 'efficiency savings' as a euphemism for budget cuts. After incorporation in 1992, colleges were required to make 'efficiency savings' of one or more per cent every year. The latest funding announcement for schools included a one per cent 'efficiency saving'.

Even though the funding system in England has room for improvement, it is a great deal better than that in Scotland or Wales, where local authorities have a much greater say.

The lack of hypothecation there means that local authorities can divert funds intended by central government for education into hospitals, parks, libraries and other local services. This virement of funds creates a funding fog which makes it very difficult to know how much the schools should really be receiving.

Indeed, the whole funding system has long been beset by complications and it is said that there are only a handful of people who fully understand it. It has been the good fortune of ASCL members that our two funding specialists over the last 15 years, Peter Downes and Lindsey Wharmby, are members of that very select group.

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