Education secretary promises increase in core funding per pupil but there is no new money from Treasury

Justine Greening, the education secretary, has promised £1.3bn in funding for schools in England to head off a Conservative revolt, raiding the budget for free schools and new buildings to pay for the rise.



She said schools would get the bailout over the next two years, after complaints from Conservative MPs that Theresa May’s failure to deal with concerns about struggling schools cost the government its majority at the election.

Quick guide The £1.3bn education bailout Show Hide Where is the school funding coming from? The money is being recycled from other parts of the education budget, including £200m from the free schools budget and £420m from the capital budget. Does this new money mark an end to the school funding crisis?

No. The education secretary’s promise of an extra £1.3bn for schools over the next two years represents a shift in government direction following a ​campaign by teachers and parents in the run-up to the general election. But with rising costs and the uncertainty still surrounding the new national funding formula, the complex funding pressures facing schools are unlikely to be swiftly resolved. What is the national funding formula? In November 2015 the then chancellor, George Osborne, announced in his spending review that a major shake-up of the formula for funding schools in England was to take place by 2017. The aim was to come up with a new formula to ensure that the money was distributed more fairly among schools across the country. How is it distributed now? The current system allows for wide variations in funding between schools in some areas - especially London and other major cities - and those elsewhere in the country. As a result, schools in some areas can receive thousands of pounds more per pupil every year than another school in a different area. For example, a school in the South Yorkshire town of Barnsley receives on average £3,661 per pupil per year, while schools in Hackney, east London, receive £7,291 per pupil according to 2015-16 figures.



The education secretary pitched the £1.3bn as an increase above inflation in the core schools budget in 2018 and 2019. But it quickly emerged that the money was being diverted from other parts of the education budget, rather than new cash from the Treasury.



In a partial compromise, Greening also announced a delay in the full implementation of the controversial new national funding formula, which means some schools will get more money and some lose cash per pupil in real terms. Under the plans, the new formula would only be indicative for its first two years in 2018 and 2019, with local authorities getting discretion over how to distribute the money during that time.

Greening had argued in the cabinet for more money to pay for schools struggling with their budgets from Philip Hammond, the chancellor, amid stories about some headteachers begging parents for extra cash, cutting lunch breaks and dropping minority subjects.

But she ended up having to find the cash from the Department for Education’s own budget out of efficiency savings, leading to accusations from opposition MPs that she was robbing Peter to pay Paul.

The bulk of the cash will come from an unidentified £600m of new cuts to the central Department for Education budget. A further £200m will come from the free schools budget by building 30 out of a planned 140 as local authority schools instead. She will also take £420m from the capital budget for building and repairs, mostly from the “healthy pupils” funding for sports facilities and wellbeing.

It comes at a time when May and Hammond are under pressure from some cabinet colleagues to ease austerity, after fearing the election result was a response to falling standards in public services.

Since the election, May has already ditched plans for new grammar schools, pledged to keep free school meals and promised that no school would lose cash as a result of the controversial funding shakeup.

But the prime minister is still facing the threat of a leadership challenge if she does not improve her popularity with the public, with a small band of MPs collecting names for a letter of no confidence with the aim of replacing her with David Davis, the Brexit secretary, or another senior cabinet minister.

Greening is one of the cabinet ministers to have raised her profile since the election, signalling she would like an end to the 1% pay cap for teachers. However, so far, Hammond has won the arguments for maintaining fiscal discipline until the budget at least and challenged his colleagues to come up with ways of paying for any extra spending outside of taxation or borrowing.

The Department for Education has been facing questions over where it will get the funding to pay for its plans, after it reversed a manifesto pledge to scrap universal free school meals for infants. But Greening did partly explain how she would would pay with the controversial changes to the so-called “national funding formula” that redistributes money between well funded and underfunded schools.

She promised funding would increase overall in real terms but some schools will see increases of just 0.5% on a per pupil basis while others will see their budgets go up by as much as 3%, creating winners and losers.

The new announcement was designed to placate schools and teachers ahead of the summer holiday, but a number of MPs, including some Conservatives, still had concerns about unfairness in the system.

Labour welcomed the news that extra money would go towards frontline school funding but branded it a “sticking plaster unless further action is taken urgently”.

Angela Rayner, the shadow education secretary, said the Conservatives have already cut billions of pounds from school budgets, and the announcement would do nothing to help the schools struggling as a result.

“They are not committing any new money and have not been clear about exactly what programmes they will be cutting to plug the funding back hole,” she said.

Lucy Powell, the former shadow education secretary, also raised concerns that the £1.3bn would not be enough to ensure that schools do not lose per pupil funding in cash terms.

Greening had been under pressure to act after Conservative MPs complained that schools policy had been a major factor in losing votes at the election.

Layla Moran, the Lib Dem education spokesman, said the announcement was a “desperate attempt to pull the wool over people’s eyes.



“Instead of providing the £4bn of extra funding promised in their manifesto, the Conservatives are recycling cash from the education budget. It is robbing Peter to pay Paul.

“Schools are still facing cuts to their budgets once inflation and increasing class sizes are taken into account.

“Children only get one go at education. We need to invest more in our schools to ensure that no child is left behind.”

Headteachers who have been involved in a school funding campaign across 17 counties called Worth Less?, gave a cautious welcome to the education secretary’s announcement, but expressed frustration over delays to the introduction of the new funding formula and said the campaign would continue until all schools were adequately funded.

The heads, who have been criticised for campaigning alongside parents against funding cuts, said in a statement: “As ever, it will be vital to examine the precise details carefully. Crucially, schools and families need to know what the announcement means in real terms for every pupil in our care.

“Only when any additional school funding is set against rising pupil numbers and inflationary costs will we know how our school budgets are being really affected by this announcement.

“We are, however, pleased that after two years of campaigning the government finally appears to be listening to the legitimate concerns that have been raised. Any additional funding is welcome, as is the decision to review the efficiency of the free schools programme.”

Ian Hudspeth, spokesman for the County Councils Network, which includes many authorities whose schools have been historically underfunded, said: “It is imperative that government does not simply provide an uplift in basic per-pupil funding, as this would not address these historic inequities that have built up. Instead, it should seek to implement a baseline of funding that will allow each school to be sustainable in the long-term.”



Geoff Barton, general secretary of the Association of School and College Leaders, welcomed the education secretary’s statement and the government’s continuing commitment to a revised funding formula. But he expressed concern, however, that it was not new money, but clawed from elsewhere in the education budget.

“The additional investment is a step in the right direction and an acknowledgment of the huge level of concern around the country on this issue,” said Barton, adding, “We are concerned that this is money saved from elsewhere in the education budget and not ‘new’ money from the Treasury and we will be examining the implications.



“The government must also urgently address the severe underfunding of post-16 education which has put sixth forms and colleges under huge financial pressure and led to severe cutbacks.”









• This article was amended on 20 July 2017. An earlier version said that the Conservatives planned to scrap free school meals. That manifesto proposal, which was reversed, was to end universal free school meals for infants. Means tested free school meals in all levels of school would remain.