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The issues for colleges in the national school funding formula and the high need reform

19 June 2019

The Department for Education has published two consultations on a new national funding formula for schools and for pupils/students with high needs. The consultations run until 17 April 2016 and ask a number of technical questions about the content of the new formulae. DFE promises a second stage consultation in summer 2016 to give enough time for implementation of the new arrangements for 2017-18. The introduction of new formulae will be disruptive because there will be losers as well as winners. DFE makes a number of promises to limit disruption including: the changes will be introduced in stages over several years. The existing systems will remain partly in place for the next two years (2017-18, 2018-19). the minimum funding guarantee (MFG) will remain in place which protects schools from annual losses. DFE invites views on which the maximum percentage loss should be. there may also be a cap on gains made by winners from the new formulae. The consultation documents published this week do not provide any detail on the likely funding rates for the new formulae or any modelling to explain who the winners and losers will be. This information won't be published until the decisions about the structure of the formula have been decided (ie in the summer 2016 consultation). The planned changes do not directly affect DFE's 16-18 funding formula which has operated nationally for both schools and colleges for many years. Colleges will nevertheless be affected by the changes in the following ways: changes to local school budgets could have an impact both on the performance of their Year 11 pupils and also on their ability to continue to cross-subsidise their sixth forms. the planned introduction of a national high needs funding formula will affect the education of more than 18,000 high needs students in colleges (currently funded at a level of around £200 million). the consultation involves the reshaping of local government's role in education which could affect local services such as education transport and alternative provision. It is interesting that DFE is reducing the role of councils in funding school education just as the Treasury and BIS plan to increase the role of combined authorities (higher tier councils) in funding adult education.