School funding in crisis

7th October 2017

  • You may have seen the headlines in the national press about the impact of school budget cuts – schools making teaching assistants redundant, shortening the school day, cutting subjects and even asking parents to set up direct debits.

    These cuts have hit pupils with special educational needs and disabilities (SEND) especially hard – to the point of forcing some pupils out of the mainstream education system altogether. Exclusion rates of pupils on SEN Support have increased both nationally and in Sheffield. Anecdotal evidence suggests that the same may hold true for home education – not the “elective” type, but the kind where parents are so concerned about their child’s wellbeing that they see no other option but to take them out of school.

    Extra funding announced

    School funding was a key issue on the doorstep during the general election, and parents, teachers and unions ran some very effective campaigns. In July this year, the government announced an extra £1.3bn for schools (mainstream and special) over the next two years. This is not new money, though – it comes from cuts elsewhere in the education budget, such as the free schools programme.

    How far will this money stretch when rising pupil numbers and inflation are taken into account? According to the Institute for Fiscal Studies (IFS), the extra cash means that, instead of a planned 2% cut between 2017 and 2019, school funding will now be frozen in real terms. The IFS estimates that between 2015 and 2020 school budgets will have declined in real terms by 4.6%.

    A national funding formula

    The government currently funds schools through the Dedicated Schools Grant (DSG). The DSG is given to local authorities, who then distribute it to schools in their area using a locally agreed formula.

    This will change in 2020 with the introduction of a national funding formula, which aims to remove big regional differences in levels of per-pupil funding. School budgets will then be set by central government, instead of local authorities.

    Leading up to this, there will be a two-year transitional period during which the government will publish notional (theoretical) school-level allocations under the new formula, but local authorities will continue to distribute the funding to schools using their local formulae.

    The situation in Sheffield

    A flat-cash settlement

    The amount of per-pupil funding given to Sheffield by the government in 2017/18 is the same as in 2016/17. However, schools are having to absorb a number of cost increases and additional responsibilities (inflation, pension and national insurance contributions, etc.) – so a flat-cash settlement effectively amounts to a cut in real terms.

    Impact of the national funding formula

    Sheffield has historically been one of the worst funded big cities in England. There had been hopes that the new funding formula would address this, as initial indications suggested it might. However, notional school-level allocations for 2018/19 only indicate a modest £4m rise for Sheffield (our total DSG allocation this year was £309m).

    Initial analysis suggests that all our mainstream schools will see an increase of around 0.5%, and some (mainly secondary) schools can expect increases of up to 3%. When cost increases and inflation are taken into account, however, even a 3% increase really only equates to a standstill budget. (NB These are only notional allocations – during the two-year transition period, local authorities will continue to allocate funding to schools using their local formulae.)

    The outlook is slightly more positive for our high needs allocation, which funds things like special schools, integrated resources, locality top-up funding and specialist support services. This funding is expected to increase over the next couple of years – but it still won’t be enough to keep up with rising demand.

    Increased demand for special school places

    Both locally and nationally, there has been a trend for more children to attend special schools, probably driven by a significant increase in the number of children with complex disabilities over the past decade. In Sheffield, this is compounded by a rising birth rate.

    Places in all our special schools are very much in demand. Every year, demand outstrips supply – causing anxiety, stress and heartache for the families whose children are refused a place.

    So why don’t we just build more special schools? Well, there is one in the pipeline – a new special free school for around 40-60 students with autism and social, emotional and mental health difficulties (see page 13). In addition, some of our special schools have created more space by educating groups of students off-site.

    However, these initiatives are only intended to create more physical space, NOT more school places. Why? Because we don’t have the money to staff them. High needs funding allocations for local authorities are based on historical settlements and have not kept pace with the increase in pupil numbers. Although our high needs allocation is set to rise when the national funding formula is introduced, this will be staggered over several years and won’t address the immediate pressures.

    Between 2015/16 and 2017/18, the number of special school places commissioned by Sheffield City Council increased from 991 to 1,090. To fund this year’s increase in places, the council reduced per-place funding for all special schools by 1.5% – in other words, they cut the cake into ever smaller slices, because the overall size of the cake hasn’t changed. If you have a child in a special school, you may have felt the impact of this.

    The increasing demand for special school places leaves very little funding for supporting pupils with complex needs in mainstream schools. (The council did manage to keep locality top-up funding for mainstream schools at the same level as last year, at £2.1m – but arguably, that wasn’t enough money in the first place.) This, in turn, fuels the demand for more special school places… and so the cycle continues.

    The council feels that the best way to address this issue would be to ensure all schools are inclusive, increasing parental confidence in mainstream schools and consequently reducing demand for special school places. Officers argue that this would reduce overcrowding in special schools and generate savings from SEN transport, which could then be reinvested into supporting more pupils in mainstream education.

    But is this realistic, given the recent rise in the birth rate in Sheffield and the overall increase in complexity? Is it realistic, given that some mainstream schools are already struggling to meet the needs of pupils with SEND? To reverse the trend towards special schools, wouldn’t you need to invest more cash in mainstream schools first? And how can we get mainstream schools to adopt a more inclusive ethos, when there is such a relentless focus on exam results?

    These are complex issues, and it is unlikely that they can be solved through local policy alone. Underfunding of SEND and the lack of incentives for inclusion are national problems, and require national solutions.

    What can YOU do?

    • Contact your MP and tell them about the impact of school funding cuts on your child
    • Tell us as well – we share this feedback with our umbrella organisation, the National Network of Parent Carer Forums (NNPCF), which has regular meetings with the Department for Education
    • Support a national campaign, such as Fair Funding For All Schools
    • If support for your child is reduced, contact SENDIAS for advice