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School standards minister David Miliband today welcomed the ...
School standards minister David Miliband today welcomed the

publication of a consultation document presenting options for

changing the system of grant support for local authorities by the

Office of the Deputy Prime Minister. The consultation includes

options for a new funding formula for education to replace the

current Education Standard Spending Assessment.

Commenting on the education options, Mr Miliband said:

'The four options for change in education funding in the consultation

document result from discussions held over the last year between the

Department for Education and Skills and a wide range of interested

groups. The aim is to support schools and local education

authorities in their drive to raise standards by ensuring that the

distribution of funds matches the distribution of extra needs and


'Since 1997/98 the average level of funding for school pupils in

England has risen by£670 - nearly 25 per cent in real terms.

National average funding per pupil will rise by at least a further 5

per cent in 2003-04 when the new funding distribution is to be


'The costs of education vary between areas. Some areas have more

pupils from less advantaged backgrounds; some have more pupils with

English as an additional language and some rural authorities have

higher home to school transport costs. We want to make sure that the

funding formula fairly reflects this range of circumstances.'

The new formula will be phased in so that all local authority areas

will be guaranteed year-on-year increases that will ensure they can

at least maintain schools funding in real terms. The government is

also taking steps to ensure that all the funding available for

schools will be passed through to them. Ministers will take final

decisions on the way forward in the autumn in the light of the

consultation, the latest available data, for example on pupil

numbers, and the outcome of the spending review.


This Press Notice applies to England.

1. The government originally set out its proposals for reforming

funding for LEAs and schools in the September 2000 'Modernising Local

Government Finance' Green Paper. The Local Government Finance Reform

Consultation document can be found at:\review\consult\index.htm

2. Key features of the new system are separate assessments for

schools provision and for LEA functions such as transport; a basic

per pupil funding allowance or entitlement in the schools block, with

top-ups for significant deprivation (or Additional Educational Need)

and for areas where it costs more to recruit and retain school staff.

The weights attached to these factors are to be based on up to date

evidence, rather than on historical patterns of spending as in the

present system.

3. The consultation document presents four options for the treatment

of the deprivation and area cost top-ups. The options are consistent

with the evidence available, but reflect scope for judgement about

its interpretation.

4. The consultation options draw on work in the Education Funding

Strategy Group (EFSG) over the last year. The group draws together

central and local government and education interests. The papers

discussed in EFSG and its final report can be found on the internet


5. The consultation period ends on 30 September. During the

consultation period the EFSG will discuss the technical basis of the

options and other issues.

6. The consultation options are exemplified using 2002-03 funding

levels. The overall amount of funding available for LEAs and schools

from 2003-04 will reflect the outcome of the current spending


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