Dedicated Schools Grant

Ian Sollom Excerpts

Tuesday 6th May 2025 Westminster Hall

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

It is an honour to serve under your chairship, Ms Butler. I thank my hon. Friend the Member for Tewkesbury (Cameron Thomas) for securing the debate and for his powerful speech. The individuals he mentioned, the school staff he represents, and the educators and local authorities across the country grappling with similar financial challenges will surely welcome his putting the spotlight on this pressing issue.

My hon. Friend is quite right that the pressures on all schools and, in turn, on the staff working in them—both the pressures of educating pupils with different and sometimes complex needs and the financial pressure of operating on budgets that simply do not stretch far enough at a time of high and rising costs all over the country—have increased significantly in recent years. I would be surprised if any MP had not had headteachers in their constituency tell them, as they have told me in St Neots and Mid Cambridgeshire, of the impossible choices that they face.

At the heart of this crisis lies a fundamental injustice: an outdated and deeply flawed mechanism for allocating the dedicated schools grant. The national funding formula, developed years ago and based mainly on the typical distribution of funding provided by local authorities at that time, and further ossified by funding protections, has created a postcode lottery that fails children and communities.

Let us be clear what that means in practice: similar schools in different parts of the country can receive dramatically different levels of support. That affects a wide range of children, including those who live in pockets of deprivation in parts of the country that are generally wealthier and so tend to receive lower dedicated schools grant funding. Although we know that there are other mechanisms to mitigate that, it ultimately means that a child with specific needs in one area can receive significantly less support than a child from a similar background and with the same needs in another area. That is not just administratively untidy; it is fundamentally wrong. For the organisation f40, which several of my hon. Friends have mentioned and which represents the lowest-funded education authorities in England—it now counts 43 of them in its membership—that is not a small anomaly but a systemic failure that affects hundreds of thousands of schoolchildren, who are being denied the education that they deserve through absolutely no fault of their own.

We feel that acutely in St Neots and Mid Cambridgeshire. Cambridgeshire ranks 133rd out of 151 local authorities in the funding allocation. Our schools receive £6,133 per pupil in the schools block element, compared with the national average of £6,467. If Cambridgeshire schools were funded at a level equivalent to those of our neighbours in Lincolnshire, a typical primary in my constituency would receive an additional £118,000 per year. If the playing field were level with another neighbour, Peterborough, Cambridgeshire would see £33 million in additional funding. Meanwhile, the demand for EHCPs has grown fast: it has risen by 91% in Cambridgeshire since 2017, far outpacing the 72% increase in funding for the high needs block over the same period. The widening gulf means more children waiting longer for vital support, more pressure on already stretched staff and more families reaching breaking point.

The Liberal Democrats believe that equal opportunity in education is not a luxury, but a fundamental right. Every child deserves access to the same resources and opportunities, regardless of their postcode. Although we understand that regional variation has its place—indeed, we championed pupil premium funding to direct resources towards disadvantaged children—it should not have come at the expense of creating the current disparities.

The problem is reaching breaking point. With schools expected to somehow fund teacher pay rises from existing budgets, those with lower DSG allocations face impossible choices: cutting staff, reducing subjects or eliminating those enrichment activities that are vital to a well-rounded education. The Liberal Democrat solution is clear. We would invest in education above the rate of inflation, ensuring that all schools can operate sustainably regardless of geography. We would extend free school meals to all children on universal credit, relieving pressure on family budgets, and place a dedicated mental health professional in every school, recognising that wellbeing and academic achievement are inextricably linked.

Pupil needs have evolved dramatically and our funding system needs to evolve with them. The time for just tinkering at the edges of the formula has passed. We need comprehensive reform that guarantees an equal base level of funding for all pupils, with appropriate additional support reflecting specific school, pupil and area needs. Our children deserve nothing less.