Tag Archives: school funding

1p on Income Tax for Education?

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Are school underfunded? To politicians the question is probably more one of, ‘do parents perceive schools as being underfunded and will that affect how they vote?’ Despite a campaign ahead of the 2017 general election on this topic, my sense was that education wasn’t a major topic during that election. Would it be now? Has the growing campaign by some schools to ask parents for cash to fund their running costs pushed the issue up the political agenda for any post-Brexit era?

My genuine answer is that I am not sure. We have been here before. As this blog has pointed out in the past, the post-1979 period was one of financial hardship for public services that last through most of the 1980s. Indeed, I have looked back at my 1986 book on ‘Schools in London’s Commuterland’ to find that even then some schools in Surrey were asking parents for sum like £5 per term or £14 for new pupils.

Throughout the early 1990s the Liberal Democrats had a well-known policy of ‘1p on Income Tax for education’. The policy attracted voters, and was based upon a feeling that schools were under-funded. Could it be revived on the basis that the government has pledged more cash for the NHS, but not for education, and it seems likely that the present financial support from the public purse will not be sufficient to fund increases in all public services at present levels of taxation.

The alternative to public funding, schools going cap in hand to parents, lacks any real support for a social justice agenda. Parents in my Division in North Oxford, where I am the county councillor, can certainly afford to part with a small sum from their disposable income for the school their child attends. The same isn’t true for many other parts of the city, where parents live on much narrow margins between income and expenditure.

If you believe, as I do, in the philosophy that a state education system should provide a standard of education necessary to create a high level of outcomes for all pupils, encouraging parents to pay towards a school’s funds creates an unfair advantage for those with the cash to help.

The funding debate is often mentioned in relation to the issue of staffing. Ever since schools gained control of their budgets in the 1990s, head teachers and governing bodies have been free to decide how to reward teachers in a system where central direction and control has become increasingly weaker.

Few now understand that the Group Size of a school once controlled not only the head teacher’s salary, but also the number of promoted posts a school could deploy. As a result, since school control of budgets came into force, the government has only ever funded schools on the average cost of a teachers: schools with lots of young teachers often did well, but those with lots of teachers on the top of the pay spine and with TLRs had a salary bill in excess of what their funding would be each year. Should these schools be allowed to top up their funding from parents? Then there is the question of reserves. Any parent asked for cash should require the school to display their latest set of accounts so the actual financial position can be determined.  Finally, ought there to be benchmarks in terms of issues such as pupil-teacher ratios and class sizes that identify funding levels. But, there is still the issue of how to compensate for the fact that older more experienced teachers cost more than younger less experienced ones?

One solution is to even out the costs by increasing the CPD allocation to young teachers so the actual cost of a teacher to a school is the same wherever they are in their career.

Revenue balances: a waste of money?

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The issue of high salaries paid to top officers by some academy trusts, highlighted in the previous post, isn’t the only financial issue facing the sector.  Now that more of the 2017-18 account are appearing a Companies house, it is possible to see the extent of the revenue balances being held by many academies; together with the occasional deficit.

So far, in Oxfordshire, 20 of the 39 Trusts operating academies or free schools across the county have reported their accounts and had them published on the companies house web site. In aggregate, they reveal around £4.6 million of revenue reserves held by primary schools and £4.3 million held by secondary schools. However, the deficits across both sectors total £1.1 million, mostly from one secondary school that has been in financial special measures for a couple of years and is gradually reducing its deficit.

One multi-academy trust, United Learning, operates six schools in Oxfordshire, but does not reveal revenue balances by school in their accounts. This MAT pools the money centrally for all their schools, and can then presumably use it where it can do the most good. Pooling also allows the total amount held in reserves to match the needs across the MAT in any one year and the amount can be set at a lower level than if the figure is chosen by each school. This was the approach taken in the past by local authorities, before schools gained control of their own budgets nearly 30 years ago.

A MAT operating say, 30 schools can decide that a reserve of five per cent overall might be appropriate to meet the contingencies and future needs in any one year of all schools in the MAT, whereas each school governing body might be more cautious and aim for 10% if setting a level on its own.

There is, however, a risk with pooling across geographical boundaries that schools in one area could be subsidising schools in another area. If parents discovered that a school in a MAT was taking this approach, they might choose not apply to that school, but to a school where the full funds were available for the education of their offspring.

This is an argument that balances are reducing because of the financial pressure that school currently face. There are certainly schools where revenue balances were lower in 2018 than in the 2017 accounts. But it is not yet a universal truth for all schools.

Could all schools in a local area be required to bank either with the local authority or an arm of central government? Such pooling would only work if these balances can be used rather than be treated as a deposit accounts. Pooling balances might also free cash being saved by schools for special projects at some point in the future for more immediate use, including cash being accumulated for capital projects. There seems little other justification for revenue balances of more than £1 million being held by some secondary schools other than future capital projects, especially while other school have insufficient funds.

Funding schools is a tricky business, but money should not be tied up in reserves when it can be released for improving teaching and learning.

Staying put

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By a strange quirk of fate I had a meeting in Portcullis House at 6pm on Tuesday. While the Palace of Westminster itself may have been buzzing with excitement, across the road the parliamentary estate was emptier than I have ever seen it on a day when parliament was sitting. Apart from the security team and catering staff looking for customers, the building was largely deserted.

Still, the meeting will allow me to say if asked where were you when the historic vote took place that I was at Westminster. It will join those other two historic ’where were you’ moments’ in my life – JFK’s assassination – at a church sale of work – and the demolition of the Berlin Wall – on the Friday morning telling a group of Year 1 BEd students that they should always remember where they were when they heard the news that the Wall had fallen.

However, the object of this post is really to consider the report today that surveyors and estate agents are gloomier about the housing market over the next three months than at any time for 20 years, albeit due to uncertainty over Brexit.

If the housing market does lock up over the next three months, then there will be implications for schools, given that so much of their income is tied to pupil numbers these days. Some schools may benefit as they will keep pupils that might otherwise have left for pastures new, but if turnover in the housing market really slows down, then there will be losers as households with grown up children stay put and are not replaced by new young families looking for school places.

Some developers may find sales on new estates slow down, and the new school being built will be faced with the choice of either opening with fewer pupils this September or deferring opening for another year and thus helping increase pupil numbers at other local schools. As all such schools are either academies or free schools of one variety of another, it only impacts on local authorities in terms of their ability to manage the overall provision of schooling in their area, something government hasn’t been overly concerned with in recent years.

Of course, we might see some extra spending on marketing and publicity as schools seek to fill empty places using cash better spent on teaching and learning. Ever since the doctrine of parental choice came into being after 1979, the idea of glossier brochures, open days and league tables has come to dominate the annual round of school selection.

Should the DfE follow up on its new free vacancy site by designing a free marketing portal for schools to reduce the cost to schools of recruiting pupils? The DfE could then ban excessive spending by individual schools. However, it would also have to stop practices such as providing free buses for pupils from some locations, something parents would not welcome.

Then there is the other side of ‘staying put’. What might teachers decide to do in the present circumstances. Will they stay as well or will they go, perhaps overseas in even greater numbers?

 

School funding – is it ever enough?

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The Education Policy Institute, where David Laws, ex-Education Minister is Chair of the Board, published a report on school revenue balances today. The data on school balances discussed in the report in maintained schools comes partly from the same DfE source discussed in a post on this blog on the 12th December 2018.

Simplistic analysis of the report produced comments that the Report showed schools were under-funded. This was because one in ten of the remaining maintained secondary schools had a deficit overall and many others were in deficit in the latest year data was available for from the government. In reality, as the EPI report discussed, the picture is both more nuanced and more complicated than a bald assessment that schools don’t have enough funding, although pressure on 16-19 funding almost certainly does need attention.

What is less clear is the extent to which the former funding formula created winners and losers and whether the new formula will help redress the balance in the future. Personally, I don’t think it will. However, there also needs to be more understanding as to why these one in ten maintained secondary schools cannot live within their means for several years and more schools are now in that position?

As EPI note, academy chains have fewer schools with deficits and are able to move money around between schools. Local Authorities cannot do this to help schools over a temporary crisis. Should the remaining maintained schools now be treated as if they were a Multi-Academy Trust, allowing cash to be moved between schools?  If local financial management means the cash provided for a school is for that school, then MATs should not be allowed to take any cash away from one school to help another and can only charge for services provided.

The EPI report covers this point in their policy recommendations

  1. With increasing financial pressures on schools – particularly in secondaries – the government should consider before the Spending Review whether higher per pupil funding is needed, or whether efficiency savings can make up part of the current shortfalls. It should especially focus on the strains faced by many secondary schools, and assess whether changes in pupil numbers are likely to ease financial pressures, or whether these will prove more enduring.
  2. Further consideration should be given to what extra help or advice can be offered to those schools facing large deficits.
  3. The government should determine the reasons for the lower level of in-year deficits in academy trusts, and whether there are any lessons to learn from this.
  4. The government should also look closely at the level of “excessive”, unallocated, surpluses and consider if existing rules allow for these resources to be used effectively.

The last recommendation from EPI is interesting, especially in view of the concerns over deficits. As I noted in December, some schools have balances equivalent to 20% of their annual income and there are schools with more than £1,000,000 in reserves. My view, as expressed in December, is that revenue income is for spending in the year it is provided ad for the current pupils, although setting a sum aside for depreciation is now acceptable.

Finally, TeachVac www.teachvac.co.uk was established to help schools cut costs by providing a free vacancy service to schools. I am delighted to record TeachVac handled nearly 55,000 vacancies in 2018 and has a great start to 2019, breaking records. Just why the DfE needs to run a rival scheme isn’t clear.

 

 

More signs of funding woes for some

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This week the DfE published the annual update on revenue balances and deficits for schools across England. Once again the data for 2017-18 shows a deteriorating position for many schools. It will also fuel the debate about how London schools are funded compared with those in the rest of the country. https://www.gov.uk/government/statistics/la-and-school-expenditure-2017-to-2018-financial-year

Overall, the figures seem to show schools diverging between those with a surplus and a growing number with a deficit. The percentage deficit as a share of revenue budgets is also increasing, especially among local authority maintained secondary schools. Data for schools that are academies or free schools is published separately and covers a different period of the year to the budgetary cycle for local authority maintained schools.

As a result of the conversion to academy status by some schools, the number of schools in the tables differs from year to year. However, the last two years have seen a slowdown in conversion to academies and there enough schools in each cohort to suggest the trends might be worth monitoring across all schools.

All maintained schools with revenue balances saw those balances, on average, hold steady at 6.3% of revenue (6.4% in 2016/17). However, those schools with deficits saw these increase from 6.3% to 7.3% on average. The number of such schools also increased, despite conversions to academies reducing the overall number of schools in the table this year.

In the primary sector, schools with positive balances slightly increased them as a percentage of income from 7.4% to 7.5% whereas primary schools with deficits saw those widen from 3.5% to 3.9% of income.

There must be more concern over the secondary sector, where those remaining maintained schools with a positive balance saw it decline to just 1.9% of income. The previous year the percentage was 3.0% across all schools. Of even more concern is the 300 or so maintained secondary schools with deficits where the figure increased from 8.4% of income to 9.8%.  Will these deficits increase in future or, as pupil numbers start increasing in the secondary sector, stabilize and eventually reduce in percentage terms?

Might the end of rising pupil numbers in the primary sector lead to an erosion of the relatively more favourable financial position of this sector when compared with the secondary sector? Certainly, the cash injection from the Chancellor in his budget might help at the margins, but, if there is a snap general election in 2019, school funding might just play a part in some contests alongside the dominant issue of Brexit.

Looking at the geographical distribution of schools with large percentage balances compared to income, the North East London area that includes, Tower Hamlets, Newham and Barking & Dagenham seems to be over-represented with schools showing large percentage balances; several for a number of years. Many schools, and especially secondary schools in f40 authorities will no doubt gaze in amazement at schools where the percentage balance is more than 20% of revenue.  Some might question why the percentage has stayed so high for a number of years in a few schools and whether these schools are producing the best possible outcomes for their pupils.

Personally, I believe that schools revenue is largely to be spent in the year it is received, with cash only set aside into reserves for the consequences of the depreciation of long-term assets to be added to reserves to ensure that these assets can be replaced. I don’t think such reserves require to be more than 50% of revenue, as is the case in a school that has been increasing its percentage each year for the past few years. I would be especially unhappy if that school were saving for a building project at the expense of the education of their present pupils.

Isolation poor use of funding?

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Regular readers of this blog will notice there has been something of an absence of posts during the first part of this month. This means that there has been no discussion of interesting reports such as the one by the Institute of Fiscal studies into how the distribution of funding has changed over time. https://www.ifs.org.uk/uploads/publications/bns/BN242.pdf That report makes for an interesting read, especially when compared with books about education funding written forty years ago, such as ‘depriving the deprived’ in which Prof Tony Travers took part as one of the team investigating education spending over the course of a year in Newham, in the context of the then government financing of education.

However, the education story that most moved me to return to this blog was the one from the BBC about how children can spend long periods in isolation  https://www.bbc.co.uk/news/education-46044394  There are a group of children that a decade ago would have been locked up under Labour’s draconian policy of the period. This was a policy whether it was articulated or not that took several thousand young people off the streets and out of education and into Young Offenders Institutions.

With fewer young people coming into the criminal justice system these days, despite the increase in knife crime, it stands to reason that schools will retain more of these young people and will find their behaviour challenging. Behaviour management has always been the top concern of many schools and the teachers that work within them, despite the shift in funding. As schools were forced to focus on outputs and achievements and less on their social responsibilities, it seems obvious that some schools will look to the greatest good for the greatest number and methods that will allow teachers to teach as many pupils as possible by removing disruptive influences on the learning process.

What was missing for the BBC article was whether isolation was really a room on the road to exclusion or whether pupils were either rehabilitated back into mainstream education or moved to more appropriate settings.  If I were a youngster forced to face the wall – albeit without the dunce’s cap of Victorian times – I might see rebelling further as a way to liberation and exclusion: anything might be better than such isolation.

With secondary schools often belonging to many different academy trusts or acting alone, it is difficult to see what body can manage the local solution to this problem. Next week at Oxfordshire’s Cabinet, I have a question – put before the BBC story – about how many pupils each secondary school has brought to the local Fair Access Panel over the past few years. This is to see how the balance of permanent exclusions is playing out across the county. I doubt that the measures announced recently by the DfE in relation to under-performing schools https://www.gov.uk/government/news/government-sets-out-plans-to-support-underperforming-schools will help tackle this problem: what is needed is concerted local action managed by a body with the long-term interests of all young people in an area. Now, I wonder what they might be.

Lollipops and Déjà vu

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Yesterday’s budget handout of £400 million to schools reminded me of Gordon Brown’s budget of 2000 after he had stopped following the Tory plans for the economy set out under John Major’s government. Those with long memories will recall both the 1997 decision by Blair and Brown to continue with government spending restraint and the spending spree after the Labour government changed direction.

One of Gordon Brown’s rabbits was to announce from the dispatch box in his 1999 and 2000 budgets extra funding for schools. This was great news for the schools, but less so for the orderly planning of teacher supply. As now, the extra cash came at a point in time when recruiting new entrants into teaching was proving quite a challenge: the cash make the situation far worse as schools went out seeking to hire teachers that just weren’t there. Eventually, the Education Department stopped the rot by upping the salaries of existing teachers in a way that prevented unchecked growth in teacher numbers. The result was a period where teachers were relatively better paid than for a generation. The end only came with the 2008 recession and the freeze on public sector pay.

So, yesterday felt like a sense of Déjà vu, with a Chancellor pulling a rabbit out of his budget red box and handing an average of £10,000 to each primary school and £50,000 to each secondary school: so much for a National Funding Formula. Of course, these numbers aren’t anywhere near the amount Gordon Brown had on offer in real terms in his 2000 budget when he announced that:

To support these reforms in our secondary schools he will now make a payment to every head teacher for books, equipment and staffing.

 Last year he was able to make an extra payment for books and equipment of 2,000 pounds.

 This April every one of these 3,500 secondary schools will receive a minimum payment of 30,000 pounds and the largest schools will receive 50,000 pounds.

 A total of 300 million in new investment through these measures alone, money paid direct to the school and to the head teacher for use in the classroom.   http://www.ukpol.co.uk/gordon-brown-2000-budget-speech/

but if used to recruit extra teachers, the new cash announced yesterday could seriously affect the plans announced only last week by the DfE for the ITT allocations in 2019/20. After 2000, schools went shopping for teachers. Perhaps, this time the cash will be used to pay for the unfunded Leadership pay increases, rather than extra teachers. But, it could distort the distribution of teachers in real shortage subjects, such as teachers of Physics, if some schools decided to offer recruitment and retention allowances to attract such teachers. However, the confusion over the use of the word ‘capital’ alongside ‘little extra’ is budgets where schools can spend money mostly as they see fit and the timescale for the cash arriving in school’s budgets will make understanding of how the cash is spent challenging, even should the DfE really want to know.

The £10,000 will certainly make a difference for many small primary schools, especially those losing pupils as the birth rate has slowed down. For some it may make the difference between possible closure and staying open that bit longer.

There must be a question about the purpose of a National Funding Formula if a Chancellor can override it on the one hand and an academy trust can ignore it on the other hand. As ever, it seems like back to the future.

 

Funding issues remain

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Yesterday, I received two comments from different parts of the country about issues that this blog has been highlighting over the past few months. I have reproduced these comments below:

The funding issue is key here and seeing all this unfold is quite alarming.  It seems that the government is intent on more MATs forming, though some of the income streams are becoming more uncertain, especially ones that can buoy up emerging MAT central teams.  I think it is crunch time at the moment because the government is essentially funding two systems at the moment—an enlarging academy sector and a diminishing LA sector.  I think this is one of the reasons why money is so tight.  

 There remains the question of small schools, as they will not fit into MATs (put simply, they do not bring in enough cash and are too difficult for most), and the diminishing funds available to LAs  means that small maintained schools are suffering and will continue to do so.  You cannot get rid of many of these schools as they are strategically important in many rural areas, and losing them would just consign many rural communities to being retirement destinations, the economies would lose any vibrancy without families living in them, and there would be potential food security problem if farms cannot pass onto younger families to run.  

 Finally a word about SEND.  The situation is dire, with in effect there being a cut in money for SEND—at a time when there is a massive rise in demand.  For this year, the ** Schools Forum has put 0.5% of the Schools block funding in to the Higher Needs block (though there would still be a £4.5 million deficit), and is consulting on putting 1.0% into the Higher Needs block next year.  

 To my mind the whole system is unsustainable, and clearly shows that the Tories simply do not care about children with SEND.  I reckon that all of our PRUs and current alternative provision in the county will disappear in its current form over the next two years, as the funding is being cut by half next year.  This is a massive crisis as it will just mean that the system as a whole will have to pay more for these hard to place youngsters as they get older, and their problems have not been solved whilst they were children in the education system.

Shortly after I received the above, this note followed:

Another dimension which has not yet been much talked about is the impact of the so-called ‘Hard formula’.  If that means money is allocated direct to every school from London, the scope for the Schools Forum to make minor tweaks is removed for maintained schools, but MATs will still be able to make transfers within their schools, as far as I understand it. This is because the DfE money will, in the case of MATS, go to the MAT and not the individual schools. This potentially puts schools in MATs in a difficult position. The Schools Forum is at least public and democratically observed, whereas the MAT trusts seem to me to be able to do whatever they want.

Both comments are from those with experience in education and whose views I fully respect.

If The Secretary of State is really intending to reduce exclusions, as he said yesterday, then these are the issues he has to ask his civil servants to start to address.

With birth rates now lower than a few years ago, the plight of rural schools where there is no now housing in prospect, could be dire, especially if they have any extra costs not catered for in the national formula. Time for some Tory MPs to wake up and smell the milk, so to speak.

School reserves shrink

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The news that the annual survey of school bank balances revealed that a third of schools surveyed were in deficit should come as no surprise. This blog along with many others has been charting the decline in school funds for some time.

Coincidentally, I asked the question at Oxfordshire’s Cabinet meeting this afternoon about school balances across maintained primary schools in Oxfordshire and how they changed between the end of the 2017 and 2018 financial years.

Since I haven’t yet had the data in the form of a spreadsheet, only as a written answer, I have yet to see whether Oxfordshire schools are faring better or worse than the national average. I hope to be able to answer that question later this week. However, there are a lot of minus figures in the table, even taking the effects of double entry bookkeeping into account.

At the Cabinet meeting, I also challenged the Cabinet member – part of the Conservative administration of the County – whether or not she would support the notion that money provided for schools in Oxfordshire should not be allowed to be transferred by Multi-Academy Trusts to support schools in the Trust located elsewhere in England.

I will need to check the minutes for her answer, but I am confident that she agreed with me. Personally, I would go further and not allow MAT or MACs to transfer funds between schools within the group even in Oxfordshire unless the same arrangements were possible for maintained schools and stand-alone academies.

Regular readers of this blog will know auditors of MAT/Macs were written to earlier this year by the Minister in the DfE about the issue of allowing the virement of funds between schools within MAT/MACs. However, schools outside MAT/MACs have no such facility available to them. Whether this should be seen as an invitation to join a MAT or to avoid doing so and keep the cash for the school will be a matter for local decision-making.

However, as I made clear above, if the DfE is going to have a National Funding Formula for schools it cannot, at least in my judgement, be correct for trustees to take money from schools in one area to provide for schools in another area.

Schools Forums up and down the country should take a long look at the issue or virement of monies between schools and consider whether they can draw up local guidelines. After all, the Schools Forum has a key role to play in school finances these days.

The F40 Group of local authorities might also want to have a say if cash were being transferred from their members to poorly performing schools in better funded parts of the country. Such a move would be a case of ‘depriving the deprived’.

After ten years of austerity it is no surprise that schools are running out of reserves. When they do then real cuts start being to be made. With a 3.5% pay rise to fund, expect 2019 balances to be far worse than they were this year.

 

 

How has teacher expertise changed recently?

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Following on from the previous post about today’s EPI study, I thought that I would update the Table from the Migration Advisory Committee report on teacher expertise, with the findings of the 2016 and 2017 School Workforce Census.

The percentage of hours taught in a typical week to pupils in years 7 to 13 by teachers with no subject relevant post A-level qualification
2010 2011 2012 2013 2014 2015 2016 2017
Maths 16 16 18 17 20 18 12.8 12.9
Physics 21 24 26 26 28 25 24.6 24.8
D&T 11 15 18 17 19 17 14.2 14.1
ICT 48   44 41 39 44 38 30.6 31.3
English 12 13 15 15 17 13 9.6   9.8
Geography 11 16 18 18 17 14 12.5 12.9
History 10 13 15 15 15 11 8.6   8.8
PE   9 11 12 11 11   7    4   3.8
Source School Workforce Census as included in the Report of the Migration Advisory Committee with 2016 & 2017 data added.

Now, there is a teacher shortage and this blog had a spot of bother back in the summer of 2014 when it first revealed a possible teacher supply crisis. It is also accepted that teacher shortages overall and of those most appropriately qualified are likely to be most significant in schools with higher levels of deprivation than in areas of affluence. It is also worth recalling that pupil numbers in secondary schools were falling in the years up to 2016, and that budget pressures can also play a part in determining class sizes as well as availability of qualified teachers.

In further posts today, I will examine the UCAS data both for August this year, as a predictor of the 2019 supply side of the teacher labour market and then consider how 2019 compares with the previous two years for August’s in relation to the expectation of trainee numbers.

There is room for a genuine debate about how the teacher stock can be best used to provide the best outcomes for all pupils. But, that may require a degree of intervention by government not acceptable in a capitalist economy: hence, presumably, EPI’s suggestion of market based solutions. The failure of the attempts by the coalition government, of which David Laws the head of EPI was a serving Minister in the DfE, to create either a National Teaching Service or a method of providing head teachers to challenging schools, shows how complicated the labour market in teaching can be when no one body has overall control and budgets are allocated to individual schools. But, that debate has been well-rehearsed already on this blog.

There is also the issue of where increasing recruitment into training would mean more teacher unemployment? Can the system absorb more trainees? Evidence from TeachVac www.teachvac.co.uk suggest that in mathematics that might be a challenge to employ increased numbers of trainees as there are unlikely to be many suppressed vacancies and increased supply might not be met be increased demand, unless those already teaching maths and regarded as under-qualified were either redeployed or made redundant in some way. Could making someone redundant to replace them with someone doing the same job, but with different qualifications, see some employment law challenges?

Fortunately, rising pupil numbers offers a way out of that dilemma, as does harnessing modern technology effectively to assist the teaching and learning process.