Schools reform

THE liberation of England's schools from the cold, clammy hand of local-authority dominance has been the coalition government's most high-profile and successful public-sector reform to date. Indeed, it has been so successful that it is creating both opportunities and problems of its own. 

Since May 2010 more than 1,000 successful schools and 200 failing ones have won the right to stray from the national curriculum, to vary the length of the school day and to pay staff what they think fit by becoming "academies". That is an astonishingly high figure, given than only 200 did so in the nine years before.

Now a study published today by Haroon Chowdry and Luke Sibieta of the Institute for Fiscal Studies illuminates how removing the role of local authorities also offers a chance to reform the way in which state schools are funded.

At the moment, the system is a dog's breakfast. Schools receive strikingly different sums to educate their pupils. The only state school within the square mile of the City of London, for example, receives £9,370 for every child it educates, while schools in Leicestershire get an average of £4,430, according to data from the Department of Education.

Part of the reason is that schools with hard-to-teach children get extra money. Another reason is that some local authorities keep their sticky fingers on more of the money than do others: 10% of local authorities retain less than 9%, and 10% retain more than 17% of their schools budget, according to Messrs Chowdry and Subieta.

The pair conclude: 

The school funding system is in need of reform. However, the nature of this reform depends on what the ideal school funding system looks like in principle. If one believes that a single national funding formula represents  an ideal system, then there was a strong case for reform in 2005 and this case has grown stronger over time. If, on the other hand, one believes that local authorities should have the freedom to prioritise different factors, then there is simply a need to rebase local authority allocations on more recent measures of educational need.

Because academies are not funded by local authorities, a national formula is needed. That is the conclusion of not one but two consultations on schools funding held by the Department of Education over the past few months. The second sets out its plans to introduce a formula which would include a basic sum per pupil plus top-ups to support pupils from poor families, small schools and areas with high labour costs.

Establishing a transparent formula would be welcome because it could help head teachers to change their behaviour. Getting extra cash for pupils whose household incomes are so low that they qualify for free school meals might encourage more schools to actively recruit them. Similarly getting funds to spend on pay might boost a school's ability to recruit staff. 

Such encouragement is necessary because schools so far seem reluctant to embrace their new-found freedoms, as I report in this week's print edition here. Freedom seems to be a necessary but insufficient condition for innovation; any mechanism that could promote it should be welcomed.