How have school funding levels changed, what effect is this having on spending and what is the relationship between funding and outcomes? Here, NFER Research Manager Maire Williams explores the latest research.

School funding: The impact

It was a hot topic of conversation during the 2017 general election and now the issue of school funding continues to play a prominent role in education policy and debate.

After a period of budget cuts and with the National Funding Formula (NFF) waiting in the wings, worries over the future of school funding and the resulting impact on educational outcomes have grown considerably in recent years.

A new report by the National Foundation for Educational Research (NFER), School Funding in England Since 2010 – What the key evidence tells us (https://www.nfer.ac.uk/publications/IMSF01/), examines literature published from 2010 onwards looking at the big questions surrounding funding, namely: how have funding levels changed since 2010, what effect has this had on school spending and what do we know about the relationship between school funding and educational outcomes?

How have funding levels changed since 2010?

Although many government departments saw their budgets cut following the 2008 financial crisis, school funding remained reasonably well protected until 2015, with average school budgets increasing over 2010–15. However, this increase occurred mainly because of the introduction of the Pupil Premium, meaning that while budgets were increasing on average, the changes that individual schools saw depended a great deal on the characteristics of their intake.

Therefore, the majority of schools in the most disadvantaged areas saw the largest funding gains over 2010–15. Nevertheless, due to differences in the weight that local authority funding formulas attach to disadvantage, along with freezes to the main school funding grant, some schools serving disadvantaged areas actually had less money per pupil in 2014–15 than in 2010, after adjusting for inflation.

Following the 2015 Spending Review, schools entered a period of reduced total funding. From April 2015 to March 2017, total school funding fell by just under 5% in real-terms. The government’s current funding plans, including the additional £1.3 billion of funding announced in 2017, are expected to result in a real-terms freeze in per-pupil funding over 2017–19.

Yet, analysis by the Institute for Fiscal Studies (IFS) (https:// tinyurl.com/ycqca2l4) shows that, despite these recent falls and freezes, real-terms per-pupil funding is still expected to be over 50% higher in 2019–20 than it was in 2000–1, due to the large increase seen over the 1990s and early 2000s.

But it is not just funding levels that need to be considered; costs have also grown. Although teachers’ pay has increased very little in recent years, schools now face higher staffing costs, due to policy changes that have increased employer National Insurance Contributions and pension contributions and raised the minimum wage. These changes place extra pressure on schools trying to balance their budgets.

How have schools altered their spending?

One of the key ways in which schools are responding to tightening budgets is to reduce the number of staff they employ. In 2016, the National Audit Office (NAO) reported that spending on teaching staff, teaching assistants and support staff were all being reduced. NFER’s own survey, Teacher Voice, found in 2017 that in primary schools, teaching assistants (TAs) appear to be taking the brunt of this fall, with more than 50% of schools cutting back on the number of TAs employed.

Investigations by the NAO and the House of Commons also suggest that schools are replacing more experienced staff with younger recruits and relying more on unqualified staff. Outside of attempts at reducing staff costs, the same organisations also report that schools are trying to stretch their budgets by narrowing their curriculum, reducing maintenance spending and not upgrading IT equipment.

How have funding changes affected attainment?

Few studies looking at school spending in England provide robust estimates of the impact of these particular spending changes on attainment. Fewer still look at the impact of changes since 2010. Studies that do, suggest that additional school resources have a modest positive influence on attainment, although this relationship is usually confined to primary schools.

We do know that the effects of spending appear to differ depending on the characteristics of pupils. The observed benefits of higher spending are typically greater for pupils from disadvantaged backgrounds. In addition, the effects of expenditure are found to be higher and more significant in schools with more disadvantaged students, and all types of students in the most disadvantaged schools appear to benefit from additional funding, not just the disadvantaged students.

Of course, this doesn’t mean that just increasing spending is the answer to raising attainment among students. What money is actually spent on is equally, if not more, important. For example, a paper included in our report found that rather than enabling disadvantaged children to attend better quality schools, a policy in which school travel was subsidised for disadvantaged children actually resulted in them attending a lower quality school on average.

This illustrates that when devising policy, both at the government and individual school level, it is important to think about the potential indirect incentives that policies may have, along with the barriers that may limit their success. It also highlights the need for evaluations to help determine where spending can do the most good.

Implications for disadvantaged students and social mobility

There has been a long-term trend in the UK of targeting spending at disadvantaged pupils and thereby schools in disadvantaged areas. The Pupil Premium is a recent example of this, and led to 94% of schools targeting support at disadvantaged pupils in 2014, compared to just 57% before 2011.

There are also encouraging signs that the Pupil Premium is being put to good use, with schools increasingly using tools such as the Education Endowment Foundation Teaching and Learning Toolkit (https://tinyurl.com/y833lsf9) to ensure their spending decisions are evidence based and the slow but steady progress in closing the performance gap. However, concerns are beginning to grow that further cuts to funding may impact on the future success of the Pupil Premium.

When taken with the fact that the end results of implementing the NFF in full would be to shift funding from the most disadvantaged pupils and schools to the so-called ‘just about managing’ group, this raises important questions around what impact any future freezes or cuts will have on social mobility. As noted in our report, more work needs to be done to understand how current policies are affecting attainment and social mobility. This is especially important now, in times of austerity, and is something the government, schools and researchers all need to prioritise.

CPD for you

National Funding Formula: The Cost to Your Curriculum

• 2 May 2018 in Sheffield www.ascl.org.uk/NFFSheffield
• 3 May 2018 in Manchester www.ascl.org.uk/NFFManchester

Maire Williams
Research Manager at the National Foundation for Educational Research.
@TheNFER
www.nfer.ac.uk

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