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Monday, 8 July, 2002, 13:53 GMT 14:53 UK
Schools' budgets may be frozen
Some schools in England can expect to have their budgets frozen under new government proposals to reform the funding system.
Four options have been published for consultation, suggesting different ways of calculating extra funding on top of a basic entitlement.
Different areas would benefit or lose out - depending on the option - in a range from +5.3% to -3.2% of current funding, on average.
The effect will depend on how much the Chancellor, Gordon Brown, gives to education - ministers are promising only that no school will actually be worse off in real terms.
The proposals are the result of lengthy discussions by a working group made up of local and central government representatives, set up following the government's green paper on modernising local government finance, which came out in September 2000.
The consultation on the latest education options ends on 30 September this year.
The Department for Education said the new formula that was finally chosen would be phased in.
All local authority areas would be guaranteed "year-on-year increases that will ensure they can at least maintain schools funding in real terms."
The length of the phasing-in period will depend on how much education gets from the chancellor in the spending review, which is expected to be announced in the next week.
The School Standards Minister, David Miliband, said as he announced the consultation: "The aim is to support schools and local education authorities in their drive to raise standards by ensuring that the distribution of funds matches the distribution of extra needs and costs."
He said that since 1997/98, the average level of funding for school pupils in England had risen by £670 - nearly a quarter in real terms.
National average funding per pupil would rise by at least another 5% in 2003-04, when the new funding system was to be introduced.
"The costs of education vary between areas," Mr Miliband said.
"Some areas have more pupils from less advantaged backgrounds, some have more pupils with English as an additional language and some rural authorities have higher home to school transport costs.
"We want to make sure that the funding formula fairly reflects this range of circumstances."
Ministers say they will take final decisions on the way forward in the autumn in the light of the consultation, the latest available data - for example on pupil numbers - and the outcome of the spending review.
There has long been considerable concern that the present funding system is unfair.
Pupils are "worth" very different amounts, depending on where they are - from an average of £4,265 in Tower Hamlets, London, to £2,380 in Solihull.
The differences can apply to schools which are next door to one another geographically, because they fall within different funding areas.
How it will work
At present, authorities get an amount for education and are urged to pass on at least 87%.
But they do not have to. This year 33 authorities have passed on less, it was revealed at the end of June.
Barnet passed on 90.2% of what it was asked to, Kensington and Chelsea 83.9%.
Some authorities spend more on education than they are asked to by the government.
Under the proposed system, there will be separate blocks of money: with 88% of the total for the schools and 12% for the local education authority functions, such as transport.
All schools will get a basic allowance for each pupil, with top-ups for significant deprivation and for being in an area where it costs more to recruit and retain staff.
The four options in the consultation document relate to these top-ups.
All use pupils' families' receipt of Income Support, or Income Support and Working Families' Tax Credit, as a measure of local deprivation.
There are differences in the extent to which needs are met, and in the basic, "threshold" level that would apply across the board.
This assumes all authorities have some pupils with extra needs.
The costs of recruiting and keeping staff relate either to local earnings, as now, or - in one option - to local house prices.
The differences might be technical but can have a significant impact on how much different local authorities would get to spend on education.
Under the first option, for example, Newham in London would get 6.6% more, while Oxfordshire would get 3.1% less.
The second option would see Rutland get most - 3.4% more - with Knowsley losing out by 2.4%.
Option three would benefit Newham most again, this time by 4.8%, while Sutton lost 2.6%.
And the fourth option - where the range is greatest - would give Merton 6.5% extra and chop Essex's education budget by 4.6%.
Source: Office of the deputy prime minister.
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