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DfE announces new National Funding formulae for schools and high needs

On the 14 September, the Department for Education (DfE) announced its final definitive proposals for a national funding formula for schools in England from April 2018, and a new formula for allocating high needs funding to schools.

NAHT has been campaigning for a national formula for both the schools block and high needs for many years and we welcome the announcement, and the improvements that have been made to the original proposals further to lobbying from NAHT and our partners. We have stressed, however, that regardless of how the funding is allocated, it continues to be insufficient to prevent real terms cuts in school funding, and we will continue to campaign for the autumn 2017 budget to provide more funding for schools.

The proposals for the formulae are set out here and details can be found on the DfE website:

  • From April 2018, the dedicated schools grant for local authorities (LAs) will be allocated in four blocks (schools, high needs, early years and central schools services). Each will be calculated on the basis of a different national formula.
  • The vast majority (99.5%) of the schools block will be ring-fenced and must be distributed through the local formula for schools. With agreement from their schools forum, LAs can move 0.5% into other blocks e.g. high needs.
  • The schools block will be calculated nationally at a school level but for at least the first two years, it will then be amalgamated at a local authority level and local authorities will continue to set a local formula.
  • NAHT is very disappointed that the opportunity for the funding to go straight to schools and academies has been deferred, but at least each school will know what the DfE's calculation of what they could receive will be available and we hope that this will deter local authorities from moving far away from this. The information is available at a school level. 
  • The DfE has made it clear that it remains their long-term intention that schools' budgets should be set on the basis of a single, national formula (a 'hard' formula).


The Schools Block formula that the DfE proposed in December and that we shared with members has been improved in three main ways in response to pressure from NAHT and other consultees:

  1. They have increased the basic per-pupil amount so that primary schools, key stage 3 and key stage 4 pupils will attract £2,747, £3,863 and £4,386 respectively;
  2. They are introducing an additional factor in the formula which will provide a minimum per-pupil funding level over the next two years. This is not the AWPU but the total minimum amount after all factors have been applied per pupil – it is the same figure across England with no London or South East factor.
    1. For secondary schools this will be £4,800 in 2019-20 with a transitional amount of £4,600 in 2018-19;
    2. and for primary schools this will be £3,500 in 2019-20 with a transitional amount of £3,300 in 2018-19.
  3. They have increased the funding floor so that the formula will provide for an increase of at least 0.5% per pupil in 2018-19 and at least 1% per pupil by 2019-20 in respect of all schools compared to their baselines.


As proposed originally, no school will be calculated to gain more than 3% per pupil in each of 2018/19 and 2019/20.

The formula will have four groups of factors adding to 14 factors:

  • Basic per pupil funding – including the Age Weighted Pupil Unit and the minimum per pupil level – 72.9% of the funding
  • Additional need funding (17.8% of the funding ) for
    • Deprivation funding taking into account
      • Pupils on FSM
      • Pupils on Ever 6
      • Pupils living in low income IDACI areas
    • Low prior attainment at reception or KS2
    • Number of EAL pupils – funding for three year after they enter the education system
    • Mobility funding for local authorities with high levels of in year churn to allocate
  • School led funding (9.3% of the funding):
    • Lump sum of £110,000 for every school
    • Sparsity factor
    • Premises factor for schools with additional costs for: split sites, PFI, rates and exceptional circumstances
    • Growth funding for LAs with high levels of growth
  • An area cost adjustment to provide more funding for areas with higher wage costs – applied to all the other factors

The High Needs Funding formula is largely unchanged from the original proposals and we remain disappointed that whilst it presents a fairer approach to allocating funding to local authorities, it does not create greater consistency in local authorities' treatment of top up funding. The formula will be reviewed in four years, and in the meantime, NAHT will continue to campaign for this to be addressed.

However, our lobbying on the original proposals has resulted in three significant improvements:

  1. DfE are increasing the funding floor from 0% to 0.5% in 2018-19 and 1% in 2019-20. The funding floor will be calculated using adjusted 2017-18 spending baselines derived from the information provided by LAs.
  2. They are calculating both the funding floor and the gains on a per head of (2-18) population basis, to ensure that the appropriate elements of the formula are all able to reflect demographic increases. The funding floor also has a cash floor to protect LAs with falling populations.
  3. For those elements of the formula which are intended to reflect more precisely the movement of pupils and students (the basic entitlement factor and import/export adjustments), they are making later updates to the provisional allocations.


The key factors of the formula are:

  • 50% of the funding will go to local authorities based on their actual current spend in 2017/18 in order to create stability for high needs pupils.
  • There will then be a basic entitlement factor of £4000 funding to LAs for each pupil in a special school or special post 16 place.
  • But local authorities who export or import more pupils for special school places will be charged or gain an extra £6,000 for each high needs pupil.
  • The factor for the remaining funding are that local authorities will receive funding based on their profile of:
    • population aged 2-18;
    • deprivation defined by FSM and  IDACI bands; 
    • low prior attainment at reception and KS2;
    • and number of the children in ill health (in the last census)  and number of children in receipt of Disability Living Allowance.
First published 03 January 2018