Funding Futures: Starting a conversation

April 2024

Director of Public Affairs and Policy, CST

With the recent launch of Funding Futures, CST’s Sam Skerritt takes us back to where the project began and guides us through the key points of the paper.

Let me set the scene. Valentine’s Day, 2022. It’s my first day at CST, I’m on day three in my new flat (which must be the reason I’m not drowning in Valentine’s cards) awaiting an internet connection, and one of my first meetings is a hot-spot-connected crash course in school funding and finance with the indomitable Susan Fielden, CST’s school funding and finance expert and possessor of an encyclopaedic brain.

Reader: I was bamboozled.

I’d come to CST from New Schools Network, where I’d almost-exclusively thought about education policy through the prism of free schools. Funding was a whole new puzzle: Why is the landscape so complex? Why are there so many acronyms? Surely there’s a better way to deliver the second biggest chunk of government spending?
Two years on, much has changed. Beyoncé has given us two universally acclaimed albums, my beloved Nottingham Forest have returned to the Premier League after 23 years in the wilderness, and my flat is painted, furnished, and connected to the internet.

But some things remain the same: Not just Valentine’s cards continuing to evade my new address, but ongoing bewilderment by how we deliver school funding.

I’ve continued to soak up every bit of Susan’s wisdom I can, asking her a never-ending list questions and often letting out cries of ‘there must be a better way’. On one occasion, a throwaway comment – "what could actually make it better though?” – stuck.

The idea for a series of papers – under the umbrella title Funding Futures – was born.

We know things are incredibly tight for schools, and for other public services. With the economic climate as it is and inflation peaking at 11%, attendance and mental health crises, recruitment and retention challenges that won’t budge, and a general feeling that the demands on schools vastly outstrip resource, there are lots of reasons schools need a cash injection.

These are arguments we make persistently to the DfE and others, and we think the framing of school funding needs to shift towards investment in the country’s future (indeed, research from Compass Lexecon published earlier this week, commissioned by CST, models an average yearly investment of £17billion returns an average yearly benefit of £95billion).
But I think there’s also scope for us to make the case that the way we fund schools needs reforming so it can be more consistent, sustainable, and targeted.

It is mind blowing the number of different elements a trust CFO/COO or School Business Manager must contend with daily – which pot of money is coming when, what are the reporting requirements of X vs Y, which new funds require a bid to be submitted, which urgent priority gets prioritised, how solid can budgets be when announcements haven’t yet been made… Truly, they are the unsung heroes of the sector.

It’s complex and complicated, and I can’t believe anybody would design the system in this way if we were starting from scratch. So, what could we do? In our initial paper, Funding Futures: Reforming school funding in England, we’ve tried to tease out the bigger picture issues and have landed on three areas for reform, plus a new mechanism. The full paper, which includes a technical note, carry the detail but at a high level we think:

The NFF needs to be fully implemented as soon as possible, backed by a realistic transition plan, and supported by a new national forum of education bodies, local authorities, economists, Treasury officials and others, so changes to funding match actual costs of delivering provision. We also think there should be an element to cover basic capital costs, worked out on pupil numbers and floor area, and special schools and AP settings should have their ordinary running costs covered through the NFF.

SEND/AP funding needs a radical overhaul. If the NFF funds ‘ordinarily available provision’, High Needs top-up funding can be just that – and be delivered based on the cost of provision, not arbitrary figures attached to proving what a child can’t do.

On capital… It’s a minefield. This was the area we struggled with the most, and that I still find myself thinking about when I’m drifting off to sleep. The amount of money needed is just so huge, and there was little consensus amongst CST membership of how the money can be raised. I can’t see a world in which a government is going to cough-up £16billion (probably too small a figure now, based on when the data were collected) to fund a national investment programme. We toyed with several ideas, most of which ended up being dropped, but I think there could be something in ring-fencing a portion of Corporation Tax – a Civic Duty Levy – made available to public services for infrastructure projects.

Finally, if those three areas were addressed, we think there needs to be a standing mechanism for additional funding to avoid the NFF being changed whenever a global event, policy decision, or change of government means a new initiative appears. We’ve called this the Policy Premium Mechanism, and suggest it should be time-limited so a decision has to be made as to whether the funding should be moved into the NFF, stopped, or continued for a short period in certain circumstances.

The ideas in the paper are a starter-for-ten and there’s a lot more work needed. What we’ve tried to do in launching this project is start a different conversation about funding – not one that replaces the crusade for the total sum to increase, but also for a more streamlined and strategic landscape that makes long-term budgeting and planning easier.

And honestly, we only want to start the conversation. We know our suggestions aren’t, and won’t ever be, perfect. The context of each school and trust dictates a different view of where reform is most needed – but there’s much more consensus amongst the groups we spoke to than there is division.

What I’ve been privileged to be able to do is tap into a network of experts, unendingly generous in offering their expertise, for which I’m incredibly grateful. This is a project that begins with this paper, and our future work on reform starts immediately (our current list of ‘next steps for funding futures’ comprises 15 areas for a ‘deep dive’).

I’m now less bamboozled by the funding landscape, thanks in no small part to the CFOs (and Susan) who have given up their time to share their insight, but I’m more certain there is an important debate for the sector to lead on how the system operates. All I really hope is that it’s a conversation we’ll have together, because there must be a better way.

The CST Blog welcomes perspectives from a diverse range of guest contributors. The opinions expressed in blogs are the views of the author(s), and should not be read as CST guidance or CST’s position.

Back to all blogs