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RESTORING STABILITY AND CERTAINTY TO SCHOOL BUDGETS - CLARKE

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Education and skills secretary Charles Clarke today set out the next ...
Education and skills secretary Charles Clarke today set out the next

stage of the government's plans to restore stability and certainty to

school budgets over the next two years.

As indicated in July, the government will support schools in the

following ways over the next two years to directly tackle the

problems they have experienced this year:

* Guarantee a minimum per pupil increase for all schools; Next year

we will guarantee a minimum increase in funding for every school.

Most schools will get more than the guarantee. The LEA will decide

which schools in their area need more money. We estimate that the

unavoidable cost pressures on the average school will increase by

3.4% next year. LEAs will be expected to target extra money to

schools with unavoidably higher costs.

A school whose pupil numbers stay the same between 2003-04 and

2004-05 will be guaranteed a 4% increase in its overall budget next

year.

A school whose pupil numbers decline will be guaranteed a funding

increase of more than 4% per pupil, because schools in this position

still have to pay costs such cleaning, repairs and heating, which do

not reduce when pupil numbers go down. However, because of declining

pupil numbers, the number of primary schools with reduced cash

budgets - and so possibly staff numbers - will be significant, since

there are around 50,000 fewer pupils this year, with a similar

reduction next year.

A school whose pupil numbers are increasing will be guaranteed at

least a 4% increase for all their existing pupils. Because costs such

as cleaning, repairs and heating do not go up when their pupil

numbers rise, they will not receive so much for their additional

students. However, these schools will be guaranteed a rise of at

least 4% in their cash budgets and an overall budget increase of at

least 3.4% per pupil.

This means that unlike previous years, every head teacher will today

be able to work out the minimum increase in their budget for 2004-05

based on their estimate of pupil numbers next year.

There will be special arrangements for very small schools and special

schools.

Set minimum increase in government support to LEAs for schools at 5%:

This year every LEA received a minimum increase of 3.2% per pupil.

Next year it will be at least 5% per pupil with a maximum of at least

6.5% per pupil, to be confirmed in November. Every LEA will receive

enough cash from the Government to cover their increase in education

spending.

* Enforcement of 'passporting'; This year, some LEAs did not

increase their education spending as much as the additional support

they received. In 2004-05, the secretary of state will use his

statutory powers if necessary to require LEAs to set a minimum

schools budget.

* Limits on central spending; Spending by some LEAs on central items

increased faster than funding for individual schools this year. Next

year we will introduce regulations that will ensure that LEA spending

on central education budgets rises no faster then spending on

schools. LEAs will be able to seek an exemption if there are

exceptional local circumstances;

* Restoration of Standards Fund; Reduction in Standards Fund was a

significant source of problems for some schools this year. As stated

in July, planned cuts for next year and the year after will be

reversed. To maintain and uprate the Standards Fund and School

Standards Grant, and to continue to support those LEAS who received

budget support grants this year, the government will provide an

additional £435m in 2004-05 and £520m in 2005-06;

* Make an Earlier Settlement; Late information this year meant

schools were unable to plan ahead with confidence. We have addressed

that by announcing these details in the autumn to help provide

predictability for heads and governors;

* Provide Transitional Support and training for heads; Some s chools

may face unavoidable difficulties balancing their budgets next year.

We will therefore provide transitional support to LEAs where

necessary to enable them to help their schools move to balanced

budgets within two years.

Targeted help:

Next year £120m will be available, and around half as much the year

after, for around one third of Local Authorities who will otherwise

have the smallest increases in support for education over this year

and the next year.

Universal Help:

In addition to the targeted grant, if any LEA can put forward a

compelling argument that additional, transitional, funds are needed

for schools in the short term, to avoid real damage to children's

education, we will consider bringing forward grant payments, so that

the LEA will have funds available in 2004-05, with the expectation of

a reduction to what they will receive in future years.

This would be a maximum of £300,000, or 0.2 per cent of each

authority's total education resources in 2004-05 if that is higher.

Schools and LEAs will be required to work together to use

transitional support to implement a costed, credible plan to balance

budgets which protects education standards.

* Help schools improve their financial management; To help schools

plan and manage their resources effectively the DfES has commissioned

KPMG to work with the National College for School Leadership and head

teacher associations to develop support and guidance for schools on

budget management. This will be available from the beginning of next

year;

* Agree an early teachers' pay settlement; The late notification of

teachers' pay awards has, in the past, hampered schools' ability to

plan. We have asked the STRB to report next month - two months

earlier than normal - and have given strong evidence for an

inflation-led multi-year pay deal.

Mr Clarke said:

'I recognise that the last few months have been difficult fo r

schools. I want to praise schools and local education authorities

across the country who have worked hard to address these

difficulties.

'There are no easy answers or quick-fixes. Individual problems

cannot be solved overnight. Funding is a shared responsibility

between government, LEAs and the governing bodies and head teachers

who manage school budgets. We all share the same goal - to ensure

that schools can plan and manage their resources effectively over the

next two years to deliver the highest possible standards.

'I am very grateful to the representatives of schools and local

government for the open and constructive way that they have worked

with us on this package.

'Ensuring adequate resources for local authorities, providing a

minimum increase in funding for every school, making earlier

announcements, reversing cuts in grant and limiting central spending

will address directly the problems of this year and help secure

stability, and restore confidence in our funding arrangements for

schools.

'As I said in July, there may be some cases where additional,

transitional support is needed to avoid damage to children's

education and we have provided resources to help LEAs and schools

manage this. There will be strict criteria attached to this support.

'However, this is not just about money. New guidance being designed

by KPMG and the National College for School Leadership will help head

teachers plan and manage budgets effectively.

'Today is the next step in restoring confidence in school budgets.

Next month the School Teachers Review Body will announce their

recommendations on teachers' pay and the ODPM will announce the provisional local government settlement.

'It is important that we all continue to work together to ensure

that our schools are able to maintain the highest possible standards

of education.'

NOTES

1. The hyperlink below will take people straight to the main web page

on the October announcement. From there, they can access the

statement, Q and A and key documents and so on.

http://www.teachernet.gov.uk/octoberannouncement

The web cast with David Miliband after the announcement takes place

on 3 November at 3pm on Teachernet and the access address is as

below.

http://www.teachernet.gov.uk/community/

Annexe 1 - Transitional Support to LEAs

Annexe 2 - Standards Fund

Annexe 1

INDICATIVE ALLOCATIONS OF TARGETED TRANSITIONAL GRANT,

2004-05

These figures are based on the latest available and may change by the

time of the Local Government settlement, but we are issuing figures

now to give LEAs an indication of whether they are likely to be

eligible for the grant and the order of magnitude involved.

LEA £m

Camden 2.3

Hammersmith & Fulham 1.7

Kensington & Chelsea 1.1

Lambeth 3.5

Lewisham 0.1

Tower Hamlets 0.9

Barking & Dagenham 1.5

Bexley 1.4

Bromley 1.8

Croydon 2.6

Enfield 2.6

Haringey 3.3

Havering 1.6

Newham 1.7

Redbridge 1.6

Richmond upon Thames 0.7

Sutton 1.6

Waltham Forest 2.6

Knowsley 1.0

Liverpool 0.6

Wirral 0.3

North East Lincolnshire 0.4

Bedfordshire 2.2

Buckinghamshire 2.8

Milton Keynes 0.6

Dorset 2.0

Bournemouth 0.7

East Sussex 3.2

Brighton and Hove 1.5

Hampshire 6.9

Portsmouth 0.7

Southampton 1.7

Leicestershire 3.7

Slough 1.1

Plymouth 0.9

Torbay 0.2

Essex 9.8

Southend 1.4

Thurrock 1.7

Kent 12.8

Medway 2.1

Hertfordshire 7.8

Isle of Wight 0.7

Lincolnshire 0.6

Norfolk 5.3

Oxfordshire 4.4

Somerset 3.2

Suffolk 3.1

West Sussex 4.9

Annexe 2 - Standards Funds and School Standards Grants

2004-05 2005-06

Standards Fund extra 371 451

School Standards Grant extra 24 29

RSG baseline for London and £28m grant 40 40

435 520

This Press Notice applies to England.

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