f40 FAIR FUNDING PROPOSALS

Briefing for f40 MPs 10 July 2017

1. The f40 campaign

f40 represents a group of the lowest funded education authorities in England where government-set cash allocations for primary and secondary pupils are the lowest in the country.As the gap between the ‘haves’ and the ‘have nots’ remains and in some cases continues to widen, f40 is campaigning to change the way the government allocates funding to local authorities and schools. The Group has the support of MPs, councillors, education directors, governors, head teachers, parents and teaching union representatives.

2. Why is f40 campaigning?

Pupils in schools in f40 areas are not receiving the same opportunities as pupils in schools in other areas. The Institute of Fiscal Studies has calculated that spending is set to fall by 6.5% by 2019/20. Spending in England is on average around £4,900 per primary pupil and £6,300 per secondary pupil. In f40 areas the figures are lower. To briefly re-state the case for fundamental reform:

  • The existing funding model has no rationale and is clearly unfair. Mainstream school funding has become more and more of a ‘mess’ with a tangle of funding caught up in the Minimum Funding Guarantee (MFG) and capping. There is no rationale for the funding of High Needs or Early Years either. A new start is needed.
  • The inconsistencies in funding for individual schools with similar characteristics across the country are too great.
  • A national formula for schools funding would minimise the problem of a child with similar needs attracting very different levels of funding if they attend a school on one side of a local authority boundary rather than another whilst recognising the different regional costs.
  • Schools in low funded areas have inevitably had to prioritise meeting their core costs and have struggled to improve outcomes for vulnerable pupils as a consequence. Fair funding will enable schools to be judged fairly on the outcomes their pupils achieve

3. What is the f40 formula?

f40 is proposing anew formula which it has calculated based upon an assessment of the costs of running a school – a bottom up approach to a formula. It is based upon the following principles/features:

  • It offers a formula for distributing the national schools budget to local authorities based on a clear rationale. From 2019-20(the first year of full implementation) education funding can be geared towards improving educational standards across the country rather than perpetuating an inequitable distribution of the national budget.
  • The f40 national funding formula has, as its main building block, a core entitlement at pupil level. The formula enables a school to have access to similar resource levels for a child’s basic classroom costs i.e. the share of a teacher and teaching assistant. The core entitlement reflects different needs and costs at the various Key Stages.
  • The formula contains factors to reflect pupil level needs beyond the core entitlement (e.g. deprivation and high incidence SEN) and factors to reflect the needs of small schools that are necessary in a local authority’s structure. The Department for Education (DfE) will need to provide clarity about what needs and outcomes each factor is seeking to address.

All funding formula factors used in the proposed model allocate the same flat rate per pupil across all regions and appropriate area cost adjustment will be appliedaccordingly.

The basic pupil entitlement is constructed for Key Stage 1/2, Key Stage 3 and Key Stage 4 using assumptions on:

  • Teaching group sizes
  • Teacher contact time, including an allowance for planning, performance and

assessment (PPA)

  • Teaching assistant time
  • Absence through sickness, maternity etc.
  • Leadership costs
  • Non-class staff costs
  • Resources
  • Exam fees (Key Stage 4 only)

The elements of the lump sum are:

  • The cost of a head teacher (Leadership Scale 10 for a 60 pupil primary school and Leadership Scale 25 for a 600 pupil secondary school).
  • An allowance for the fixed costs of administrative staff, premises, ICT and supplies.
  • In the case of primary schools, the cost of an additional half class. This reflects the difficulties that small schools routinely face in organising seven year groups into a standard class structure. Very small primary school with age ranges mixed over more than two years, for example where year 3 pupils are being taught with Year 6 pupils, will need this flexibility to ensure that the curriculum can be effectively taught to appropriate age ranges for some of the time.
  • The lump sum for middle schools and all-through schools will be determined by the ‘deemed’ status of the school. In the majority of cases this will be as secondary schools. How those schools are actually funded will be for local discretion.

Funding is then added on for additional pupil needs, namely to support pupils from deprived backgrounds, pupils that have fallen behind at the Early Years Foundation Stage or at the end of Key Stage 2, and pupils with English as an Additional Language (EAL).

Finally, sparsity funding to support small schools in sparsely populated rural areas is added. Some schools will have additional circumstances such as being on a split site and funding for these purposes is included to ensure that schools with such different arrangements do not have to pay for the additional costs from their teaching cost allocation.

4. Do all schools with the same number of pupils receive the same amount of funding?

The formula would give all schools the same, based upon the characteristics of their pupils and with the addition of area costs. Schools will not all receive the same amount per pupil on average across the school, but they will receive the same amount for each pupil before adding on an amount for each deprived pupil and for each pupil that has fallen behind and for each pupil with EAL that are attending their school. Each primary school will receive the same lump sum as other primary schools, and secondary schools will receive the same lump sum as other secondary schools. Schools in areas with higher costs will then receive an additional multiplier amount to pay the additional prices.

5. So what is the split between basic per pupil allowance and the add ons? How is this different to the government proposal?

The DfE’s proposed national funding formula,as consulted in March 2017, compares to the f40 formula as shown in the table below. This is the pure formula only and excludes additional funding for exceptional circumstances, PFI, or mobility which are assumed to be the same in both formulae. It also excludes funding for area costs and any protections or caps.

Note: In this document NFF means the formula in the DfE’s March 2017 consultation and the f40 formula is an alternative proposal.

6. Would it affect the split/distribution between primary and secondary?

The formula provides a primary secondary split of 1.1.29 which coincidentally is the same as the government proposes, but is based upon a rational calculation not upon an average figure used by LAs depending upon their current circumstances.

Because the f40 figure has been calculated from the bottom up, it can be understood and if priorities change in the future will flex and move with the changes.

7. Does the f40 formula just distribute the same amount of funding as the NFF formula in a different way?

No, because the f40 formula has been calculated from the bottom up, taking into account the cost of teachers, the cost of support staff and all the other factors listed in FAQ3, it gives a real indication of the costs of running all schools in the country. Consequently it costs around £456m more that the NFF in the first year and requires just under £2bn more when fully implemented at current costs. More funding will be needed to meet the real costs of teaching in schools in England than has been allowed for in the NFF formula.

8. The Conservative party manifesto suggested that an extra £4bn would be put into school funding. F40 are only looking for £2bn –so isn’t it all sorted?

The manifesto money was not just for school funding. Some of it was for the proposed increase in the number of grammar schools which has now been set aside. If the manifesto commitment of ‘no school losing money’ is implemented this will cost the NFF formula an additional £190m, and the f40 formula an additional £66m. (It is less because the f40 formula is giving more schools additional funding than the NFF, so not so many schools need protection). There were other financial commitments that were included within the £4bn that were not made explicit, so at present it is not possible to tell how much extra funding schools might receive for day to day costs.

9. If there is extra money how do you ensure that the schools that need it most would get it? Is it likely that any increases are much less than some of our schools were expecting?

The f40 formula says that extra money is needed. We would hope that the government will fund as much of that as possible. But all schools will receive their share of whatever it is. Those schools that are currently funded less than the formula provides should get an increase and those that receive more than the formula provides should see a decrease over time. The DfE are likely to put protections in place for losing schools although f40 believes that schools should all be funded using the formula. Depending upon how much funding is available, it is likely that increases may not be what schools are expecting. It is difficult to understand what schools have expected from a national funding formula (or even from the f40 formula) and so the expectations of some schools may well be higher than is realistically going to happen.

10. What about Pupil Premium?

Pupil Premium is additional to the formula. Over time, we believe it would be better if there was only one funding stream for schools, but at present we are assuming that the arrangements for pupil premium will remain as currently applied. This does mean that the amount of funding for deprivation is much larger than implied in the answer to FAQ5.

11. Are our small schools protected?

The f40 formula is worked out on the assumption that the minimum size for a primary school is 60 pupils and for a secondary school is 600 pupils. There are obviously schools that are smaller than these numbers, but f40 believes that these should be supported locally using the sparsity funding in a locally agreed flexible way.

12. Will our formula reduce the gap between the highest and lowest funding?

Yes, it will. At present the difference in funding between the highest and lowest funded is around 1.8 times higher. Teachers pay is around 60% of a schools costs and the difference in teachers’ salaries is a maximum of about 1.27 times higher (Inner London pay scales compared to England pay scales). Resources and utility costs that are paid by schools are based around a national market which is the same. Levels of deprivation in some areas have decreased over the past 10 years. There is no justification for the current difference in funding between schools in one area compared to another; there should still be a difference, just not such a big difference.

13. So in what way is our proposal fairer than the government model?

The f40 model is based upon a realistic understanding of the costs of educating pupils in schools, not an historic figure or an average of what schools can currently afford based upon the current hugely different levels of funding across the country.

14. Will the manifesto £4bn cover the cost pressures or will there still be increasing pressure on school budgets?

The £2bn that f40 suggest is needed is just to bring schools up to 2017-18. It does not take schools into the future. So without further updating of the costs of running schools (ie adding funding for the outcome of pay agreements or changes to pension or NI contributions or other inflationary costs), it will not be enough. As stated in FAQ8, f40 does not believe that all of the £4bn will be for day to day school funding.

15. In reality will a fairer formula ever be fully implemented?

f40 certainly hope that it will. But if ‘better funded’ schools do not lose any funding then the time taken for ‘poorer funded’ schools to gain will be greatly extended unless there is significant new funding. And, if schools are not allowed to lose funding they will be protected at funding levels that will need to wait for inflation is high enough for their funding to meet the formula. f40 estimate is that this could take many years.

14. Do the manifesto commitments address the pressures on the High Needs budget?

Not that f40 is aware of. The government commitments all appear to be focussedon mainstream schools. This means that funding for the most vulnerable pupils with special educational needs in special schools, resourced provision in mainstream schools, in alternative provision or requiring top-up funding in mainstream schools will have this funding potentially frozen at current levels.

This will put particular pressure on Special Schools particularly as all their funding comes from the High Needs Block, yet they have the same pressures on pay, pension contributions and national insurance contributions as mainstream schools without any good news on the horizon at all.

15. Further information and explanation

F40 has produced a more detailed explanation of its funding proposals and a spreadsheet that shows the impacts and outcomes for all schools across the country. These are available of our website at

F40 Fair Funding Proposals – Briefing for MPs 10 July 2017