Question to the Department for Education:

To ask the Secretary of State for Education, what estimate he has made of the length of time it will take under the National Funding Formula for similar schools in different areas to receive parity of funding.

Since its introduction in the 2018/19 financial year, the schools national funding formula (NFF) has distributed funding for mainstream schools in England fairly between local authorities. This is based on the individual needs and characteristics of schools and pupils. Local authorities then distribute that funding among their respective schools, using their own formulae.

Following last year’s ‘Fair school funding for all’ consultation, the department is moving to a direct funding formula for schools. The formula will complete the reforms to school funding which started when the NFF was introduced. A direct NFF will mean that the department determines funding allocations for individual schools without substantial local adjustment, on the basis of a single, consistent formula for the whole country.

Many local authorities have already moved their local formula to follow the NFF more closely. 105 out of 150 local authorities in England moved all of the values used in their local formulae closer to the NFF between the 2018/19 and 2021/22 financial years, or kept them within 1% of NFF values after allowing for the area cost adjustment. 73 local authorities are now mirroring the NFF funding factors almost exactly.

The department will start the process of transitioning fully to the direct NFF in the 2023/24 financial year by requiring that local authorities use all, and only, NFF factors in their local formulae. Local formulae factor values should move at least 10% closer to the NFF.

The department is not setting a definitive end date at which the direct NFF will be implemented. It will be important to continue to be guided by the impact of the initial transition towards the direct NFF, before deciding on the further pace of change. However, to give a sense of the likely timescales to inform schools’ and local authorities’ planning, the department is setting out that it expects to have moved to the direct NFF within the next five financial years, or by the 2027/28 funding year.

The department hopes that it will move to the direct NFF sooner than this. As we move to the direct NFF, individual schools’ budgets will continue to be protected, so that they do not suffer an excessive year-on-year reduction.