Nick Gibb – 2021 Statement on the National Funding Formula Reforms

The statement made by Nick Gibb, the Minister for School Standards, in the House of Commons on 8 July 2021.

Today, the Government are publishing a consultation document on the schools national funding formula (NFF), entitled “Fair School Funding For All: Completing Our Reforms To The National Funding Formula”. This is an important step in our work to ensure that every school and academy trust has the right resources so that they can continue to drive up academic standards, as the school system recovers from the impact of the pandemic.

We are delivering the biggest increase in education funding in a decade, with additional funding of £2.6 billion in 2020-21, £4.8 billion in 2021-22 and £7.1 billion in 2022-23, compared to 2019-20: in total, over £14 billion across the three years.

We know it is critical that this investment is distributed fairly between all areas of the country and all schools. We have already taken significant steps to make the school funding system fairer.

The introduction of the schools NFF in 2018-19 means that funding is now distributed more fairly across the country. This was a major step forward from the postcode lottery of the previous funding system, in which historical funding levels, rather than current needs, drove the distribution of funding. A majority of local authorities have moved their funding formulae towards the NFF since its introduction in 2018-19, and 73 local authorities of 150 are now mirroring the NFF funding factors almost exactly.

As we set out when we introduced the NFF, our long-term goal is that every school’s final funding allocation is determined by the same, national formula, and is no longer subject to further adjustment by local authorities. The current consultation presents our proposals for how such an NFF, directly applied to schools’ budgets, should operate. It also sets out the next steps to ensure a smooth transition towards this goal.

This reform will bring several benefits for schools. It will ensure a fair funding system, with funding for every school matched to a consistent assessment of need. It will make the funding system simpler and more transparent for all involved. It will also help to underpin our ambition for all schools to be part of a strong multi-academy trust, so that all schools within each trust will be funded on a consistent basis, regardless of which local authority they are located in. This will provide academy trusts with the predictability needed to make the best use of resources to further raise academic standards.

The Government are mindful that completing the reforms of the NFF represents a significant further change for the school system. In the consultation, we present proposals to move local funding formulae progressively closer to the NFF to achieve greater fairness and consistency in funding. This will provide the opportunity to consider the impact of each step before making the next move. We are determined to complete these reforms and secure the benefits that they will bring, but we want to move carefully towards this end goal over the coming years, working with schools, academy trusts, local authorities and sector organisations to ensure that the transition is a smooth one.

The consultation will be open for 12 weeks, concluding on 30 September 2021. We plan to publish more detailed proposals in a second stage consultation over the winter following feedback to the first consultation.