schools has meant that the proportion of the schools budget going
directly to schools this year has increased from 82.4% to 84.2% -
worth an extra£385m, education and employment secretary David
The increase is a direct result of the government's Fair Funding
system which means heads have increased financial responsibility for
school meals, building repairs and maintenance, and a range of other
support services including personnel and financial administration.
Mr Blunkett announced that in 2001-2002 education authorities would
be expected to delegate at least 85% of their budgets to schools, an
increase on this year's requirement of 80%. Spending per pupil on
administration would be expected to fall further.
Mr Blunkett also published tables of individual local education
authority expenditure for the second year which showed the variations
in amounts spent on town hall bureaucracy.
Mr Blunkett said:
'We have a substantial increase in the amount of money going to
schools. This year's increase brings to about£1bn the amount of
increased delegation since 1997.
'Some local education authorities who were spending too much on red
tape have met our targets on cutting red tape and some have seen
reductions by one-third or more. We set out our tough new approach
for the first time last year to ensure that schools got the maximum
amount due to them. Since 1997, we have given schools substantially
increased control over the funding which the government has provided
for primary and secondary education.
'The minimum requirement for 2000-2001 was 80%, which authorities
have now met. We now intend to ensure that all authorities reach 85%
for 2001-2002, although we believe many authorities should be able to
reach 90% next year and we shall be setting a further tough minimum
requirement for 2002-2003.
'Nationally, delegated funding per pupil has gone up this year by
9.8% or just over£210. This figure, which includes Standards Fund
resources devolved to schools, reflects increases in the overall
level of funding as well as increases in the level of delegation.
Over and above this figure, schools will have benefited from the
£290m School Standards Grant, which included payments of up to
£50,000 for secondary schools and up to£9,000 for primaries,
announced in the Budget.
'Authorities have generally met delegation targets and heads and
schools are seeing the benefits. There are a small number of
authorities, who for different reasons, have not meet one of the
targets. We will be discussing with them individually how we can
ensure they meet the targets in the future.
'I welcome the positive response of the vast majority of authorities.
But the table which I am publishing today shows that the delegation
of school budget still ranges from 79.8% at the bottom to 89.8% at
the top. I want to see a much greater number approach the level of
the top delegators.
'Earlier this month, I told the NAHT conference that we were
examining the possibility of establishing separate budgets for local
education authorities and schools, to ensure that all the funding
intended for schools gets through to them. The government's Green
Paper will spell out the details.
'Meanwhile 49 local education authorities are already delegating at
least 85% of their Local Schools Budgets. I believe that the
remainder can follow suit. Some authorities are nearly at this level
already. For others, the increase will be more challenging. The
authorities currently delegating 85% or more are varied in size and
include rural and urban authorities.
'I am therefore setting a minimum target of 85% delegation for
2001-2002. 85% delegation under Fair Funding equates to about 98%
delegation under the system which we inherited from the previous
government, which by 1997 had reached 90% of delegation.
'I believe there is also room for further savings on central
administration, building on the progress that authorities have
already made. I therefore propose to lower the present ceilings -
£75 per pupil for London and£65 elsewhere - by£5 for 2001-2002.
'There are of course some things where it is important an education
authority continues to co-ordinate services centrally which anybody
seriously considering this issue has to take into account: statements
for children with special educational needs, school transport and
help in turning around failing schools are obvious examples. It would
of course be irresponsible for anybody to pretend that these services
didn't have to be delivered.
'Fair Funding is not just about putting more money into schools'
delegated budgets. It is about giving greater autonomy to schools.
Heads are able to ensure they get the best value and the highest
quality. We will be taking further steps to ensure that this happens.
These steps include:
- a purchasing guide which we shall publish in the autumn, to help
schools make the best use of the extra money we are giving them
- a pilot to develop 'brokerage' arrangements, under which schools
can use an agent to 'shop around' on their behalf for the best
- an investigation of the way LEAs are costing the services which
they are inviting schools to buy back from them, to ensure that
the prices suitably reflect costs
- a thorough review of the financial controls which LEAs currently
impose on schools, with a view to producing a more 'light touch'
- rigorous investigation of specific instances where schools have
complained that local education authorities are interfering with
their freedom to manage
1. Tables provide full details of each local
education authority's planned expenditure; a full explanation of
the figures in each column is given in the attached notes. All
LEAs have been given the opportunity to check the figures
published in the tables.
2. For 2000-01, the government set three targets for LEAs:
- 80% of the Local Schools Budget (LSB) to be delegated. All LEAs
have reached this target except Cornwall LEA which at (79.8%) has
virtually met the target.
- delegated funding per pupil to be increased by 5% in the case of
LEAs delegating at least 85% of the LSB in 1999-00, and 6% in
other cases. This has been achieved by all but six LEAs
- a£65 per pupil ceiling (£75 in London) for central administration
expenditure (achieved by all LEAs). The calculation of the targets
is more fully explained in the notes to the table.
3. Under the previous school funding regime (LMS), LEAs had to
delegate at least 85% of the 'Potential Schools Budget'. The PSB
excluded some major items of LEA central expenditure, including
school transport, school meals, all Standards Fund expenditure,
and some expenditure on SEN and behaviour support. Targets under
Fair Funding have been based on the much larger Local Schools
Budget, which includes all recurrent expenditure on primary and
secondary education (except expenditure on nursery school and
non-school provision for under-fives, and one or two other minor
items), plus some expenditure on the strategic management of the
education service as a whole. It follows that 85% of the LSB
equates to a much larger percentage of what the PSB would have
been for 2000-01.
4. Under Fair Funding, the main items for which LEAs have been
required to delegate funding (where they were not doing so
already), include building repairs and maintenance (from April
1999); secondary school meals (April 2000); and a range of other
support services including personnel and payroll administration
(April 2000). Additionally, individual schools have the right to
opt for the delegation of funding for insurance (April 1999) and
primary and special schools may likewise opt individually for the
delegation of meals funding (April 2000). Funding currently held
centrally by LEAs in respect of these 'optional delegation' items
amounts to a little over£200m.
5. The Purchasing Guide has been designed to reinforce the
operation of Fair Funding by helping schools to develop their
confidence and expertise as buyers of services and users of
external contracts. It will describe educational support services
and how they are delivered, illustrate how schools should
determine their needs for services or goods, and give advice on
how to identify the market for supply. It will also advise schools
on the growing area of e-commerce. The guide will draw on the work
of the DfEE's Value For Money Unit and external consultants, and
will be published on DfEE's website in the autumn term.
6. The Pilot 'brokerage' project will take place in Rotherham from
April 2001. It was proposed by consultants from the Office for
PublicManagement (OPM) as part of a package of measures in
response to Ofsted's critical report on the authority.
The OPM report can be accessed at
The primary objective of the pilot brokerage service would
be to work with and for the schools of Rotherham to secure the
best possible value-for-money services. Its major functions would
be to (i) work with schools to help them specify their service
needs; (ii) develop a sufficient market to enable schools to have
choices in obtaining high quality services which represent value
for money; (iii) identify the providers of the best value for
money services; (iv) negotiate, on the schools' behalf, clear
contracts for services; and (v) manage and monitor service
contracts. DfEE will monitor closely the Rotherham pilot and
believe it could have significant implications for stimulating the
market for schools services both regionally and nationally.
7. This summer, the DfEE will carry out an in-house study into the
costing of services offered by local education authorities to
schools on a buy-back basis.
8. Financial controls. Each local education authority has a
'scheme' for financing schools which is approved by the Secretary
of State and must take account of statutory guidance issued by
him. The scheme controls the financial relationship between the
authority and its schools, particularly in the fields of financial
monitoring, banking, balances, income, and supply of services.
This summer DfEE will be consulting local education authorities on
updating these schemes, with the aim of a move to a more 'light