SCF0005

Written evidence submitted by NAHT

1. NAHT welcomes the opportunity to submit evidence to the Public Accounts Committee’s inquiry into school funding.

2. NAHT is the UK’s largest professional association for school leaders. We represent more than 33,000 head teachers, executive heads, CEOs, deputy and assistant heads, vice principals and school business leaders. Our members work across: the early years, primary, special and secondary schools; independent schools; sixth form and FE colleges; outdoor education centres; pupil referral units, social services establishments and other educational settings.

3. In addition to the representation, advice and training that we provide for existing school leaders, we also support, develop and represent the school leaders of the future, through NAHT Edge, the middle leadership section of our association. We use our voice at the highest levels of government to influence policy for the benefit of leaders and learners everywhere.

Cost pressures in schools

The financial pressures faced by schools prior to Covid-19

1. NAHT welcomed the government’s announcement in September 2019 that school spending would increase by £7.1 billion by 2022/23. However, whilst the additional investment represents a step in the right direction, we do not believe it goes far enough to address the sustained period of chronic underinvestment we have seen in education since 2010.

2. The Institute for Fiscal Studies (IFS) has concluded that school spending per pupil in England fell by 9% in real terms between 2009–10 and 2019–20, representing the largest cut to school funding in over 40 years.[1] Even with the proposed increase in spending between now and 2022/23, the IFS has shown that this will still represent a 13 year freeze in funding in real-terms.

3. During this period, demands on schools have continued to increase. For example, school leaders have reported a growing demand for in-school pastoral and mental health services. Similarly, the number of pupils with complex special educational needs has continued to grow. Alongside this, schools have found it harder to access key support services such as speech and language therapists, CAMHs and educational psychologists, meaning that they are increasingly having to fund these from their own diminishing budgets.

4. The government has made much of its ‘levelling up’ agenda in recent times. However, a recent IFS report found that “more deprived schools are due to receive lower real-terms increases in funding per pupil for each year of the NFF up to 2021–22.”[2] Similarly the Education Policy Institute has found that in 2020-21, pupils eligible for free school meals in primary schools will receive increases of 0.6 per cent in comparison to 1.1 per cent for non-FSM pupils, after controlling for inflation. NAHT believes that the government must ensure that all schools benefit from future funding settlements and that schools serving more deprived communities do not receive lower increases in the future.

5. If the government is serious about ‘levelling up’ opportunities across society, NAHT believes that there is a need to go beyond simply restoring school funding to 2010 levels by committing additional resources to ensure schools can continue to improve outcomes for all pupils.

6. Furthermore, government’s adoption of the minimum funding guarantee which overrides the national funding formula allocations to ensure that every primary school receives a minimum of £4,180 per pupil, every secondary school £5,415 per pupil (2021-22 figures) has had the effect of direct funding away from the most disadvantaged areas to more advantaged areas.

The SEND funding crisis

7. NAHT welcomed the government’s announcement that it would increase SEND High Needs funding by £780 million in 2020/21. However, it is abundantly clear that this will not address the £1.2 billion funding gap in SEND funding that the Local Government Association has identified.[3] Worryingly, a significant proportion of this additional funding could end up being used to simply reduce deficits within Local Authorities budgets and not reaching the schools and pupils that desperately need it.             
8. Whilst a range of factors have influenced the growth in demand when it comes to SEND spending, the current funding gap has been primarily driven by a rapid rise in Education Health Care Plans (EHCPs) following a change in government policy in 2014.[4] [5]

9. The Education Select Committee has concluded that: “Special educational needs and disability funding is completely inadequate. There is simply not enough money in the system to provide for the scale of demand. Local authorities are expected to face a funding shortfall in excess of £1 billion by 2021.”[6] 

10. An Ofsted investigation into how schools respond when faced with financial pressures highlighted that rising staff costs are the most significant pressure faced by all schools, but this is particularly acute for special schools as the staff to pupil ratio is much higher.[7]

11. Too often the funding impact on special schools is underestimated, or overlooked. For example, following the withdrawal of the year 7 catch-up premium, the NFF was tweaked to take account of this lost funding. However, special schools do not fall within the ambit of the NFF, meaning that they have not been compensated for the loss of year 7 catch-up funding, for which all their pupils are usually eligible. This represents a very significant and on-going funding loss for those schools providing education for our most vulnerable children.

12. NAHT recognises the DfE is currently undertaking a review of the SEND system and is considering making some adjustments to how SEND funding works. However, it is clear that the factors that underpin the growing demand on SEND funding, including a shortfall in funding of the health and social care sectors, are likely to continue for the foreseeable future and that this situation requires more than a review of how existing funding is distributed.

13. The impact of a failure to do this is hard to overstate.  It will not just lead to Local Authority deficits spiralling out of control, but ultimately to pupils with SEND not getting access to the provision they need. These pupils include some of the most vulnerable in society and it is therefore incumbent on government to ensure their needs can be fully met through sufficient funding.

Real-terms cuts to pupil premium rates

14. Despite a small increase in 2020-21, pupil premium rates have been largely frozen in cash terms since 2015.[8] As EPI point out, the 2020-21 increase is “only an inflation level increase and this is still well below historic levels in real terms, having been held largely flat for a number of years. The primary pupil premium has in real terms lost 7 per cent of its value, and the secondary pupil premium 8 per cent of its value, since 2015.”

15. NAHT believes that the government should look to increase pupil premium rates so that they are at least restored to 2015 levels in real-terms. The pupil premium is an existing mechanism for targeting funding to more disadvantaged pupils and there are already measures in place to monitor the impact of this spending.

16. NAHT is very concerned that the recent changes in calculating the pupil premium allocation via the October census, rather than the current January census, will result in potential losses in the tens of thousands for individual schools, directly affecting already disadvantaged pupils. In simple terms, the government’s current plans mean that any child who has become eligible for pupil premium funding between October 2020 and January 2021 will simply not be counted and will therefore not receive additional funding. What the government see as an administrative change has the potential to have a significant impact for these pupils.

17. An NAHT survey of 1316 members found that 62% of respondents had 5 or more pupils that had become eligible for pupil premium between the October and January census, creating an average total loss of £6,725 in the primary phase.

The Early Years pupil premium

18. There is strong evidence that early years and pre-school interventions have a long-term positive impact for pupils and, according to EEF, they can be particularly beneficial for children from low income families.[9]

19. NAHT believes that the government should prioritise investment in such early intervention strategies and that the Early Years Pupil Premium is an effective way to target such investment. Currently, Early Years Pupil Premium is £302 per child, compared to £1345 for pupil premium in primary schools. NAHT believes that the Early Years Premium should be substantially increased, working towards parity with the primary pupil premium over time. 

Fully funded investment in teachers’ and leaders’ salaries

20. NAHT had welcomed the significant first step taken by the Secretary of State’s acceptance of the School Teachers’ Review Body (STRB) recommendations which support the uplift of starting salaries for newly qualified teachers to £30,000 by 2022/23, although NAHT notes that the target implementation date has been indefinitely delayed.

21. In the context of school funding almost being returned to 2010 levels, the STRB’s analysis and recommendations are particularly relevant. Over the last three years the review body has flagged with increasing urgency the need to improve salaries for teachers and leaders as a critical element of any strategy to resolve the longstanding recruitment and retention crisis.  Its recognition of the leadership drought now facing English schools as a result of the broken pipeline of leadership supply make significant and sustained investment imperative.

22. NAHT’s strong, evidence-based view is that schools do not have the fiscal headroom to reverse a decade-long real-terms decline in the salaries of teachers and leaders. The available funding to do so is simply insufficient.

23. NAHT therefore believes that all future employer costs, including salary, National Insurance and pension contributions should be fully funded by government. Such funding must be in addition to the £7.1 billion already pledged by 2022/23. We urge government to revert to previous practice by funding all pay uplifts in full, and in a timely manner.

24. Failing to fully fund employment costs risks undermining government’s commitment to reverse cuts in per pupil spending, creating an irresolvable tension for schools seeking to deliver the funding that pupils’ deserve and funding the rates of pay that the STRB says is needed to attract, reward and retain high quality teachers. 

25. NAHT is clear that this is a false dichotomy.  We urge government to make the needed investment in pay by funding, in full, all pay costs. Doing so will support the profession, retain great teachers and improve leadership supply.

26. Full funding of employment costs will also protect per pupil funding. In turn those teachers and leaders will be in a position to use increased funding to drive better provision and outcomes for learners. The nation’s children and young people deserve nothing less.

Ensure that capital funding is sufficient to properly maintain and repair the school estate

27. In 2017 the National Audit Office concluded that “The Department’s property data survey estimates it would cost £6.7 billion to return all school buildings to satisfactory or better condition, and a further £7.1 billion to bring parts of school buildings from satisfactory to good condition.” This should be seen in the context of a significant decline in capital spending between 2009/10 and 2019/20, where capital spending declined by 44% in real-terms.[10]

28. NAHT welcomed the government’s announcement that £1.4 billion would be allocated to improve the school estate in 2020-21 and the £560 million announced by the Prime Minister in August. However, given the NAO’s analysis of what is needed simply to bring schools to a ‘satisfactory’ condition and the chronic underinvestment in capital spending since 2010 this amount is clearly insufficient.

29. The government has stated that it wants every pupil to receive ‘a superb education’, a key part of this should be a schools estate that is fit for purpose.

The financial impact on schools as a result of Covid-19

30. The funding settlement for 2020/21 – 2022/23 was announced prior to the outbreak of Covid-19 and therefore did not take the financial impact of the pandemic on schools into account.

31. The Covid-19 pandemic has created a range of new and ongoing cost pressures in schools related to:

• maintaining hygiene, cleaning and adherence to the DfE’s ‘system of controls’ in order to limit the transmission of infection (including consumables such as sanitiser gel, soap and handtowels; signage; sinks and washing facilities; and additional teaching and social space)
• devising, delivering and facilitating off-site remote learning programmes (including IT, hardware and connectivity costs)
• daily and long-term supply cover for staff who are ill, isolating or shielding
• additional hours worked by teaching assistants who are often essential to the delivery of ‘blended learning’ – that is serving the needs of children of key works and vulnerable pupils who are taught on site and concurrently delivering off site remote learning to pupils required to stay at home by government ‘lockdown’ rules
• additional hours worked by support staff including administrators and site staff who have been critical to a school’s COVID response
• additions to contracted services such as cleaning
• insuring against the use of supply cover.

32. In addition, important school income streams have dried up as a result of the pandemic. Rentals, lettings and other activities can often provide important additional income that schools rely on, and often ensure the financial viability of key parts of a school’s infrastructure (for example, the running and maintenance costs swimming pools, gyms and all weather sports pitches are often met through rentals or letting contracts).

33. Schools have also come under significant pressure where their extended services, such as breakfast clubs or after-school clubs are sustained through private income streams such as parental contributions.

34. NAHT provided the DfE with case studies and member surveys detailing these costs and losses.

35. In the summer of 2020, NAHT surveyed 1821 school leaders[11] to ask about the losses accrued during the period between March and August of that year.  This covered the period of the first national ‘lockdown’ when very few pupils were educated onsite between March and June. The survey revealed:

• average total estimated additional costs of £9,990 per school
• average estimated value of lost income of £15,915 per school.

36. Members were surveyed again when most pupils returned to onsite learning in September 2020. This survey of 2044 school leaders[12] found that in the first month of autumn 2020:

• mean average additional exceptional costs as a direct result of Covid-19 were £8,017, with a large number of schools reporting costs over £10,000 and a few in excess of £100,000
• mean average additional exceptional supply costs as a direct result of Covid-19 were £2,454.
• mean average losses to school income as a direct result of Covid-19 were £9,755, with some schools reporting very large losses in the high tens of thousands of pounds

37. Later in the year NAHT and ASCL supported a survey by EPI[13] which found losses continuing to accrue.

38. It found that since the start of March 2020:

• primary schools have had to meet additional, non-staff, costs that averaged just under £13,000
• Special schools have faced additional non-staff costs averaging just under £18,000
• Secondary schools have faced additional non-staff costs averaging nearly £43,000

39. Additional spending on teaching and other staff averaged:

• £27 per pupil in primary schools
• £14 per pupil in secondary schools
• £95 per pupil in Special schools

40. EPI found that losses to income streams had affected nine in ten schools.  For secondary schools, those in affluent areas experienced the largest drops in income (an average loss of £127,000), with smaller falls for secondaries serving disadvantaged areas (average loss of £33,000).

41. Most schools have not been able to recoup most or all of these losses. The DfE has refused to reimburse or assist schools for their lost income.[14]

42. The one-off payment of £80 per pupil to support with ‘catch-up’ in 2020-21 and access to subsidised tutoring is welcome, but in itself is unlikely to be enough to address the impact of Covid-19 on educational outcomes, particularly if further disruption to education occurs in this and future years.

43. DfE has run two very limited reimbursement schemes.[15]  The first covered the period from March to July 2020, and provided for schools to reclaim the cost of providing food vouchers for those who chose not to use the national voucher scheme.

44. Many of the other costs incurred by schools were not covered by the scheme, which only provided for claims for:

• Increased premises costs but only those incurred in keeping a school open in the Easter or summer half term holidays
• Additional cleaning costs but only those required due to suspected or confirmed Covid-19 cases.

45. The DfE scheme made no provision for reimbursement of lost income, which is of great concern, as these costs are not optional, and they were required by the government’s own guidance. School budgets were allocated before the outbreak of Covid-19, meaning that everything spent adhering to new safety controls can no longer be spent on pupils’ education as originally planned.

46. In addition, schools were only eligible if the costs that had been incurred would:

• result in a school having to use historic surpluses
• increase the size of a historic deficit
• prevent the planned repayment of a historic deficit

47. EPI found that ‘Where additional funding [was] awarded it has generally been below what was needed’ – and that about 60% of schools received additional funding that amounted to less than half their costs.  In a third of schools the additional funding amounted to less than a fifth of their expenditure.  EPI estimated that once all claims had been processed the additional funding would cover about 42% of schools’ expenditure, but only 31% of spending across all schools.

48. The second scheme operated by DfE[16] offered very limited relief for the supply costs incurred as a result or teacher absences.  Again, the terms were very restrictive, excluding any supply costs except those incurred between 1 November and 31 December 2020.

49. Moreover, schools were only able to make a claim if they met a series of ‘prerequisite criteria’, ‘financial reserves criteria’ and ‘workforce absence rate criteria’.

50. The complexity of the criteria was such that the DfE provided worked examples for those schools that had the capacity, tenacity and dogged determination to jump through the hoops.  It’s worth noting the huge pressure that schools were operating under when the scheme was published on 15 December, as infection rates soared and government took legal action to prevent schools from moving to offsite education as they struggled to protect their pupils, communities and staff from what transpired to be a deadly second wave of the pandemic.

51. It therefore bears reprinting the DfE’s guidance below.

52. NAHT’s view is that it is hard to imagine that a more unhelpful or byzantine approach could have been adopted, nor one that would have frustrated hard-pressed and exhausted school leaders more.  Ministers’ promises to do ‘what it takes’ were proved to be empty by the lived experience of school leaders.

Maintained nursery schools and nursery classes

53. NAHT have long made the case that many Maintained Nursery Schools are in a dire financial position. There is a genuine fear that the current crisis could see more of these vitally important schools close.

54. As with primary and secondary schools, Maintained Nurseries entered this crisis in a very difficult financial position and were not well placed to weather any further storms.

55. The DfE took the early decision to treat Maintained Nursery Schools like other Early Years Providers in terms of financial support. Whilst NAHT understands the logic behind this approach we have a number of concerns about the unintended consequences of doing so. It should be noted that by taking this approach, it has meant that these nurseries will not be eligible for the school reimbursement scheme discussed above, even though they may have incurred additional costs in a similar way to schools.

56. One of the other main concerns NAHT has in this regard is that whilst other Early Years providers will be exempt from business rates, this will not apply to Maintained Nursery Schools. It has been a long-running issue that there is no consistent mechanism for reimbursement of business rates to Maintained Nursery Schools, unlike other schools. The Supplementary Funding includes a historical amount for business rates for some LAs, but this does not reflect increases in business rates since 2016-17, and in many LAs MNS receive no funding at all to reimburse the business rates they pay. If Maintained Nurseries are to be treated in line with the rest of the Early Years sector, it would seem only fair and right that they also benefit from the business rates exemption.

57. Financial difficulties have been further compounded in the autumn and spring terms, as normal admissions processes have been disrupted, with many parents still being nervous about their children going into settings. Continuing with the January census as the means to calculate funding rates over the next term has exacerbated an already strained financial situation, given that attendance rates are unusually low. The impact of the government’s decision to link nursery funding to census returns in the middle of a national lockdown is nonsensical and has the potential to have a catastrophic impact on nurseries where attendance was reduced. NAHT is collecting further data on the impact of this policy and would be happy to share that information when available.

Managing costs pressures

58. Even before the Covid-19 pandemic began, many schools were already in a precarious financial position and have had to make a range of cuts of balance their budgets.

NAHT’s ‘Breaking Point’ survey 2017/18

59. An NAHT survey[17] from 2017/18 found that almost 40% of respondents indicated they had only been able to balance their budget by making cuts and carrying over a surplus, and a further 14% had only managed to balance their budget by making significant cuts.

60. The survey also found that:

• More than a fifth (21%) of respondents said that their budget for 2017/18 was in deficit; a 13 percentage point increase since 2015.
• When asked which one factor was causing the greatest financial pressure on schools, ‘additional needs of some children’ was the key factor cited by 28% of respondents
• “Reduction, reducing and redundancies” were the three most common words used by respondents when describing the most difficult budgetary decisions they have had to make over the last year.
• More than four fifths (86%) of respondents have reduced the hours or numbers of teaching assistants to make their 2017/18 budget balance. This figure was 49% in 2015.
• More than a third (37%) of respondents said they have had to reduce the number or hours of teaching staff
• Almost two thirds (65%) of respondents said that they strongly agreed that the reductions they have had to make have resulted in a negative impact on the performance of the school.
• There has been an increase in the number of respondents that said they have reduced investment in equipment, the number of hours for teaching assistants, CPD and non-educational services and support.

61. The current Covid-19 crisis has put additional financial pressure on school budgets that were already close to breaking point, despite the additional £7.1 billion announced by the government in 2019. As this will only return school budgets to 2009-10 levels, once combined with the financial repercussions of the pandemic, there is a very real possibility that little to no progress will be made on improving school budgets, placing school leaders in the unenviable position of being forced to make very difficult decisions once again.

Support from the DfE and ESFA

62. NAHT are also clear that the tools, resources and support provided by the Department and ESFA should not be seen as a way to solve the funding crisis in education. The support is a way to help improve practice, share understanding, and offer support to those schools who might need additional help. As outlined above, school funding remains under significant pressure, especially in light of the pandemic, and only substantial investment from government will be able to fix this.

Tools for schools to review and benchmark their finances and efficiency

63. The tools and resources provided by the DfE and ESFA should be considered as helpful aides to schools to review and benchmark, to help guide discussion and review of practices within their own settings. However, without the appropriate context behind the headline figures, they have limited usefulness.

64. Whilst there are helpful aspects to the advice and guidance package, some elements remain overly simplistic. Schools must be able to adapt benchmarks according to their own context; benchmarks and averages in the sector must not be seen as any type of ‘gold standard’, rather they should be there to, as intended, support schools in evaluating their specific situation and requirements.

65. Replicating practice from elsewhere does not guarantee automatic success, in schools in particular, context is critical. This is particularly apparent in SEND schools, which are extremely diverse, effecting the usefulness and applicability of comparative data.

66. However, members in SEND settings have indicated that providing benchmarking data across MATs, maintained special schools, and independent special schools, which support some of the pupils with the most complex needs, could provide clarity on the different funding levels of high needs across the sector. 

67. It is also important that the tools and resources are appropriately used, such as they are utilised to help guide schools in their decision-making and help to upskill the sector; they should not be used in order to evaluate and hold schools to account. As outlined above, the context behind any figures and analysis is critical, and comparisons between schools without this has, at best limited usefulness, and at worst, potentially harmful implications.

School Resource Management Advisors (SRMA)

68. NAHT were supportive of the introduction of the SRMA programme to provide financial advice to schools.

69. NAHT believes that peer-to-peer support can be an effective method for providing financial support to schools, providing a supportive process to inform decision-making; and a number of NAHT’s own members choose to become SRMA’s themselves. 

70. Whilst the SRMAs are intended to be a helpful peer-to-peer support, to aid in upskilling the sector, there have been a number of concerning incidents, since their inception in 2017/18, that has suggested that this aim has not always been realised.

71. Members shared feedback that the implementation and distribution of the programme was not always effective. Members also noted that the visits could feel rushed given the limited time frames initially implemented. There was also concerns about the inability to provide feedback on the experience.

72. NAHT members were also disturbed that the private consultants involved were able to promote their own consultancy businesses, as part of the visits, raising questions about the independence and impartiality of some of the SRMAs.

73. As outlined in the media, there have also been worrying suggestions of potential saving options suggested by SRMA, such as  limiting pupils’ lunch portions and keeping money raised at charity events[18]. Which is why NAHT remains clear that any recommendations from SMRA visits remain as advice and that schools make the final decision over what will work in their context and what will not.

74. NAHT was particularly concerned about the links to the Condition Improvement Fund (CiF) criteria for the year 2020 to 2021. NAHT could see no clear rationale for the inclusion of such criteria in determining which schools should be eligible for this funding. The allocation of funds for improving the condition of school buildings should be based purely on the need identified. The safety of the school and college buildings, and therefore the staff and pupils, is the clear principle of the fund, and it was therefore unclear why criteria, such as requiring a visit from a SRMA, would have any bearing on issues such as building condition or health and safety.

75. In addition, the inclusion signalled a move away from the SRMA as advisory to compulsory, which undermined the value and intention of the resource.

76. NAHT is therefore pleased to see that this requirement has now been removed from the CiF criteria for the year 2021 to 2022.

77. It was also disappointing that the evaluation of the pilot from 2017/18 was not published until January 2020, despite pressing from the sector, and given that the extension of the programme had already occurred.

78. Member insights suggest a different experience to that outlined in the DfE report, and discussed that finding ‘theoretical savings’ can be relatively  easy to do, but implementation of such savings can be very different. As the DfE’s own analysis of the pilot found, less than half of the recommendations were able to be implemented by schools.

Support for schools in procurement including the advice provided, DfE-approved procurement frameworks and the Risk Protection Arrangement

79. Members have generally welcomed the support the Department has provided around procurement, but NAHT remains concerned that further work is needed to effectively communicate the support that is available to all schools and those tasked with procurement, particularly those schools who might not have a dedicated school business professional.

80. Members have noted the need for common supplies such as insurance, utilities and stationery to be negotiated at a national level to enhance savings for schools, while still allowing schools to negotiate prices at a local level for all supplies and services if required.

81. Members have also suggested further expansion of the procurement support would be helpful. This could include coverage around school IT support and infrastructure, cleaning products, flooring, (premises checks e.g. gas, electrical). 

82. NAHT believes that the Regional Buying Hubs have been a useful addition to the sector, and welcomes the Department’s engagement on reviewing the possibility of the possibility of extending this offer to a national level.

83. However, NAHT would like it noted that an evaluation for the Regional Buying Hubs has not yet been released, and NAHT is concerned that learnings from this pilot may not have been undertaken prior to the development of a proposed new model. Effective and transparent evaluation of the scheme is important in ensuring which of the proposed functions are of most use to schools and to help tailor the final design of the hubs to best help schools obtain best value for money.

84. Feedback from members on the Risk Protection Arrangements (RPA) has been positive, with the offer coverage continuing to grow, and NAHT were positive about the extension of the scheme into LA schools in 2020. The scheme has also been beneficial indirectly to schools, resulting in commercial insurers reviewing their own offers to remain competitive.

85. NAHT has raised concerns with the Department during the pandemic about the limited support schools received in sourcing appropriate PPE or cleaning materials.

Support to develop schools’ capability for effective financial management

86. NAHT believes the Department continues to give limited consideration to the supply of school business leaders, despite the increasing responsibility and accountability given to these roles.
87. The shape of the workforce in schools has evolved significantly, with a growing role for school business leaders and their teams to undertake the growing range of school business leadership duties in schools. But this sector of our workforce is poorly analysed and understood. The Department for Education has only just begun to collect data on non-teacher school leaders as part of the school workforce census, meaning there is limited historical data on the shape and size of the profession. In addition, the information is limited, with support staff categories not separated out in the same way as for teaching staff, so there is limited understanding on the numbers of school business professionals and leaders.
88. Missing out these important professionals, appears to be a huge oversight. Without up-to-date relevant picture on the shape of workforce, the Department will not be able to ensure that they are effectively responding and supporting the needs of the sector.
89. Alongside this, it’s critical that the Department and ESFA fully recognised school business leaders as the highly effective and committed school leaders that they are. This recognition should be seen across all communication and the work to support school business professional should be embedded across all workstreams of the DfE, which is currently not the case. For example, there is no reference to the supply of school business professionals in the recruitment and retention strategy from the Department. Nor has the Department effectively engaged in the much-needed discussions around the appropriate pay and conditions required for all school business leaders, a critical part in ensuring the recruitment and retention of this part of the school workforce.
90. NAHT members cite the helpfulness of mentor-support, but there is currently very limited programmes such as this for school leaders, and school business leaders in particular.
91. The cost of training, conferences and qualifications for school business leaders can be quite prohibitive and there is limited central support from the Department, despite the requirements and expectations it sets on these roles. Previously, the Department has supported school business manager qualifications through subsidy, and NAHT urges it to adopt similar funding models.

Support to get best value from workforce spending

92. NAHT believes that integrated financial planning can be a useful tool for schools and Trusts to utilise. However, it in no way should be used as a way to hold schools to account.

93. Feedback from members indicates that ICFP can be a helpful approach, adding value to school leadership conversations about how best to direct resources. However, as outlined previously, school context is key and without this understanding it can be a blunt instrument.

94. Members are also clear that when talking about the data, use of terminology should be considered; the data shows averages not what should be considered as ‘normal.’

95. Whilst there has been a move in recent years from the Department to better support primary schools, we still hear concerns from some members that ICFP is not always applicable in their setting, particularly those working in small schools.

96. As the principles of ICFP are still being developed in special schools, NAHT urges the government to work collaboratively with the sector in developing the tool to ensure that the diversity of context is recognised.  

97. However, NAHT remains cautious about the use of ICFP in special schools, as the overall level of funding for high needs remains precariously low, the usefulness of ICFP is limited and could contribute towards the narrowing of the curriculum. 

98. Although schools have been using the teacher vacancy service, the recruitment crisis is so severe, most schools are still choosing to advertise using commercial providers as well.

99. NAHT also believes that it is unhelpful for the service just to focus on teacher vacancies. Our members have been clear that the service would be far more useful if it included coverage for all job vacancies in a school.

100. In addition, NAHT remains concerned about the functionality of the service. We have heard of instances where those seeking a position have been unable to locate known jobs, through the service. If the service is unable to effectively pick up all jobs available it renders it unhelpful at best. We also note that attempts to alert the system of these issues, have been met with generic responses, and no rectification of the problem.

101. Useability of the site has also been raised by members as an issue. Feedback has suggested that the content schools can include for adverts is extremely limited, and essentially results in the site acting as a signpost to a more comprehensive location. This runs the risk that potential candidates are discouraged from using the site, and possible candidates are lost to schools.

102. In addition, far more needs to be done to communicate and promote the service to the sector and prospective candidates.

Local authorities and the National Funding Formula

103. NAHT represents school leaders and as such we recognise that others, particularly Local Authorities themselves, will be better placed to explain why they do not always fully follow the funding allocations, as determined by the National Funding Formula, in distributing money to individual schools.

104. That being said, our conversations with Local Authorities suggest there are likely to be three main factors at play. The first is that regardless of how well designed any national formula might be, it will never be able to take account of the very specific and unique circumstances of each school, trust and Local Authority. Put simply, Local Authorities and Trusts have a more detailed knowledge and understanding of their schools; they will be aware of unique and specific circumstances that a national formula will not be able to identify.  For example, a Local Authority will have detailed knowledge about the specific nature of individual school premises and buildings.

105. The second factor appears to be the reliance on long-standing local formulae. These local formulae have been developed and refined over time by Local Authorities and, in many cases, are felt to be working well at a local level. It may be that some Local Authorities are reluctant to move away from these local formulae entirely not just for fear of losing an approach that is well established and understood, but due to the potential unintended consequences of adopting the national formula in a wholesale form.

106. The third factor relates to the interaction between the schools block and other blocks within the designated schools grant (DSG). As outlined in the 2020-21 Schools Revenue Funding Operational Guide, Local Authorities continue to be able to transfer up to 0.5% of their schools block to other blocks of the DSG, with schools forum approval.[19] For a number of years there has been significant and growing pressure on High Needs Funding[20]. This has resulted in a growing number of Local Authorities transferring up to, and in some cases more than 0.5% of their schools block budget to cover shortfalls in their High Needs budget.[21] It is the view of NAHT that chronic and sustained underfunding in the SEND sector is an important factor in understanding why Local Authorities are not always able to fully follow the funding allocations, as determined by the National Funding Formula. Even taking into consideration the additional SEND funding announced by the government, the current deficits facing Local Authorities across England mean that any extra moneys are at risk of making up current shortfalls and may not impact upon pupils with SEND as widely as hoped.

107. It is also worth noting in this section that the decision by government to scrap the Education Services Grant (ESG) led to many Local Authorities having to ‘top-slice’ in order to fund vital central services for schools.[22] We also know that Multi Academy Trusts may use a ‘top slicing’ approach to fund central operational costs, and that the precise amount can vary between trusts.

108. NAHT is also aware of the impact that “lagged funding” for vacant free school places has in some local authority areas, with a high level of free schools and academies. This means that free schools are funded for unfilled places, adversely affecting the local formula to the detriment of existing schools in the area.

Income generated by schools

109. NAHT does not collect or hold data on the level of income that is generated by schools. However, we would make the following observations:

110. Schools should not be in any way reliant on income generation to provide education for their pupils. In a publicly funded school system, the expectation should be that all schools receive fair and sufficient funding from government in order to provide a good level of education for all pupils. 

111. Furthermore, NAHT would raise concerns that a reliance on income to deliver core education provision, or indeed extra-curricular activities, risks widening the disadvantage gap. The EPI report cited earlier found that schools in more affluent areas experienced the largest drops in income during the national lockdown. It seems reasonable to infer that this is because they had higher levels of income prior to the lockdown being imposed than schools in more disadvantaged areas. It stands to reason that schools serving the most disadvantaged communities are, on average, likely to find it harder to raise income.

112. The ability of a school to generate income will also be heavily dependent on its size and the nature of its facilities. For example, a large secondary school with a sports hall and a large playing field is likely to have greater opportunities to generate income through private lettings than a small village primary school with no such additional facilities. Larger schools are also more likely to have the additional staff required to manage and co-ordinate such lettings.

113. NAHT are not in a position to comment on how schools use any income generated as we do not hold such data.

Improving schools’ financial sustainability

114. A specific funding challenge that has been crystalised during the pandemic, is a fundamental issue facing many schools - highlighted by the Alternative Provision commissioning process especially – and that is, the short-term nature of the current school budget setting system.

115. For school leaders to take sustainable, longer-term strategic financial planning decisions is hugely difficult when guaranteed school budgets are delivered on a year-by-year basis.

116. This has become a particularly acute issue for Alternative Provision (AP) settings where commissioned places have reduced considerably. This situation has arisen for a number of reasons, which are worth considering when scrutinising school budget processes:

• Little or no meaningful consultation was undertaken with AP providers when Local Authorities and schools reduced commissioned place numbers as a result of Covid-19;
• No previous indication of an intention to cut AP numbers arose before it was subsequently proposed;
• An understandable, but ill-advised, short term approach by Local Authorities and some schools to saving high needs budget by cutting AP numbers when they appear lower than usual only as a result of current COVID restrictions;
• Little evidence of a strategic plan for using AP effectively in the longer term when required places will likely return to at least expected levels post-pandemic;
• AP commissioned by schools is understandably suffering reduced demand at present, but this is likely to be only over the short-term;
• Budget uplifts to high-needs blocks are, therefore, not going to be reflected in additional uplift to AP budgets under current arrangements.

117. The risk of not addressing the above issues is that overall provision will be irreparably reduced, and when specialist places are subsequently required by increasing numbers of pupils following wider reopening of schools, the support required for such disadvantaged and vulnerable pupils will no longer be sufficient to meet demand.

118. Longer term, guaranteed school budgets over a number of years, would alleviate such a risk and provide greater certainty and protect essential provision for pupils who require it.

119. Whilst ensuring school funding is sufficient and sustainable over longer term than a single financial year, pressures would remain for schools unless a similar sufficiency and sustainability approach is adopted for other sectors essential for supporting provision for pupils, such as health and social care.

June 2021

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