stage of the government's plans to restore stability and certainty to
school budgets over the next two years.
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
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
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
* 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
* 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.
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.
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
* 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
'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
'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
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.
The web cast with David Miliband after the announcement takes place
on 3 November at 3pm on Teachernet and the access address is as
Annexe 1 - Transitional Support to LEAs
Annexe 2 - Standards Fund
INDICATIVE ALLOCATIONS OF TARGETED TRANSITIONAL GRANT,
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.
Hammersmith & Fulham 1.7
Kensington & Chelsea 1.1
Tower Hamlets 0.9
Barking & Dagenham 1.5
Richmond upon Thames 0.7
Waltham Forest 2.6
North East Lincolnshire 0.4
Milton Keynes 0.6
East Sussex 3.2
Brighton and Hove 1.5
Isle of Wight 0.7
West Sussex 4.9
Annexe 2 - Standards Funds and School Standards Grants
Standards Fund extra 371 451
School Standards Grant extra 24 29
RSG baseline for London and £28m grant 40 40
This Press Notice applies to England.