School funding: 2006–2010 policy changes under the Labour Government
This Note provides background to the introduction of the Labour Government's school funding reforms in 2006, details of the reforms (which included the introduction of a ring-fenced schools budget, known as the Dedicated Schools Grant), and the March 2010 consultation on the introduction of a school funding formula.
Following funding problems for schools in 2003, the then Labour Government abandoned the system of providing a non-ring-fenced notional amount for education within each local authority’s total funding. Guaranteed per pupil funding increases alleviated the funding crisis before a new school funding system was introduced in 2006 which included:
• ring-fenced Dedicated Schools Grant (DSG) paid to local authorities using the “Spend Plus” methodology;
• multi-year budgets;
• School Forums to approve local authority variations.
In March 2010, the Labour Government issued a consultation document stating that it wished to “return to a formula-based method of allocation in 2011, so that allocations better reflect actual characteristics of pupils”, rather than the “Spend Plus” methodology which “required the setting of a base year to which future increases are applied [2005-06] and so does not allow for changes in relative needs between local authorities since that time to be reflected”.
However, the May 2010 General Election meant that the Government changed before the consultation had even closed. The new coalition Government published the results of the consultation, but introduced its own proposals for school funding.