Education Business

In May 2008, the Department of Children, Schools and Families (DCSF) published its annual review, which sheds some light on spending in education over the next three years.     

The report clearly states that spending is up as the department continues to “increase investment in education and children’s services”. The proportion of gross domestic product (GDP) spent on education in the UK will be 5.6 per cent in 2010/11, up from 4.7 per cent in 1996/97. And the expected grand sum of expenditure in 2010/11? £76.4 billion in total. It’s a little hard to fathom such a vast sum of money. Where exactly does this all go, and how will it be reaching your school over the next few years?
    
While government is promising that spending is up, many are reporting that in real terms, budgets will be cut in response to inflation and increases in other costs. With endless confusion seemingly surrounding changes to funding, it’s helpful to look at the latest review information on the new three-year settlements and the dedicated schools grant, capital expenditure, along with the modifications to further education funding.

Three-year settlements
November 2007 saw the much-awaited allocation of funding for education through the new three year funding settlements for schools. The most important objective of three-year budgets is that hopefully, schools will be able to plan more efficiently and use it to make more thought out strategic financial decisions.
    
In the DCSF Annual Review, the three-year funding settlement includes the Minimum Funding Guarantee (MFG). This is a promise of an increase of 2.1 per cent per pupil in each year of the three years of settlement, including an efficiency gain of one per cent for each of the next three years. However, many head teachers and school leaders feel the MFG will not cover normal increases in costs, leading to a budget shortfall and a need to cut expenditure at certain schools.
    
The key component of the three-year budgets, however, is the Dedicated Schools Grants. The vast majority of school funding is allocated through the DSG, with allocations for 2008 to 2011 based on a guaranteed unit of funding calculated on a per pupil basis (using estimated pupil numbers for 2008 to 2011) for each local authority over the three years. The DCSF has stated that the Dedicated Schools Grants will increase by an average of 13.1 per cent over the next three years.
    
Recently, the Government stated it would be reviewing school funding processes as a result of the select committee findings, including the dedicated schools grant and the formula used to determine funding allocated to local authorities. This review group also suggested shifting responsibility for 14–19 funding from the Learning and Skills Council to local authorities.

Further education
As of 2008/09, funding for the learning of young people will be allocated through the new common 16-19 funding system. In support of government targets for all young people to remain in the education system until the age of 18, funding has been increased for young people learning by over £850 million to nearly £6.8 billion in 2010/11.
    
It is also expected that the total number of young people in learning will increase from 1.472 million in 2007/08 to 1.516 million to 2010/11. The additional 44,000 learners are likely to be studying apprenticeships as the Government moves to fulfil its commitment that all qualified young people will have the opportunity to complete an apprenticeship.
    
Going forward, funding will be allocated to different areas of further education depending on learner preferences. If a particular line of learning is very popular, more funding will be allocated to these areas to ensure growth can be supported.
    
In March 2008, BESA and nasen (the UK’s special needs association) published comprehensive research on SEN resourcing that indicated a third of sampled primary schools do not have a specific budget for special needs resources. In comparison, a mere eight per cent of secondary schools report the same position. This is reflected in the spread of spending in primary schools, as some SEN co-ordinators indicated that as little as £150 per annum was available.
    
As there is only a limited national framework for SEN funding in place, there are no guidelines or expected practice for local authorities handing over SEN budgets to individual schools. The advantage of delegated funding is that early intervention can be implemented at the school level, however, this money is not ring-fenced and therefore it is very difficult to know for sure if it is actually being spend on SEN. Ofsted has found evidence in some schools of SEN budgets being allocated to other areas within a school, such as ICT.
    
The DCSF recommends that local authorities delegate SEN resources to mainstream schools and should:

• Develop a funding formula to allocate resources for most pupils with additional and special educational needs
• Develop arrangements to distribute additional resources for pupils with the most severe and complex SEN.
  

Capital expenditure
With such comprehensive initiatives as Building Schools for the Future and the Primary Capital programme underway, the Government is still investing heavily in school building and infrastructure in the UK. The DCSF report states that total support for investment in school buildings, facilities and ICT is expected to rise from £6.7 billion in 2007/08 to over £8.2 million in 2008/09, including £1.32 billion for Private Finance Initiative (PFI) credits. Over the 2007 Comprehensive Spending Review period, £21.9 billion of schools capital has been allocated.
    
The report also indicates that through the Devolved Formula Capital, funding allocated between 2006/07 and 2010/11 will ensure that a typical ‘unmodernised’ primary school of 250 pupils can expect to receive £34,000 to spend on buildings or technology, while a similarly outdated secondary school of 1,100 pupils will receive £113,000 each year. However, schools that have already been remodelled since 1997 will only receive half of these amounts.
    
Changes to funding always leads to a rocky boat, with confusion over what can be purchased with which particular grant, such as the end of eLCs and the introduction of Harnessing Technology grant or how best to keep on track with the latest developments. From 2008 onwards the Harnessing Technology Grant is the principal source of funding for ICT in schools, allocated through the Standards Fund. This repackages the previously available separate capital grants for ICT, i.e. 121 national digital infrastructure grants for schools; 122 e-learning credits (eLCs). It is capital funding so can be used to purchase ICT-related products (including digital curriculum content) that qualify as capital expenditure. Local authority finance teams will advise schools on what is and is not eligible for capital spending, in line with DCSF regulations. Schools and local authorities are also able to use Devolved Formula Capital and the Schools Development Grant to fund ICT priorities.
    
As with everything to do with planning budgets, you need any help that’s available to keep up to date and your head above the water. Don’t forget that there is help out there for you and your school. Visit BESA’s website (www.besa.org.uk) and enter the Ed Zone for more information about new developments affecting schools, or the DCSF website for new funding information.

About BESA
BESA is the trade association that represents suppliers in the UK education sector. With over 300 members, including manufacturers and distributors of equipment, materials, books, consumables, furniture, technology, ICT hardware and digital-content related services to the education market, BESA is focused on promoting and providing support and advice to their members, the industry and to schools. With 75 years of experience, BESA offers unparalleled support, research, events and advice on both UK and international markets, and the future of the education supplies industry.
   
BESA has a Code of Practice to which all members must adhere, along with a stringent membership process, both of which assure buyers of a high standard of quality in both product and customer service.
   
Celebrating its 75th anniversary in 2008, BESA is at the forefront of discussion on the changing face of education, and will be celebrating this milestone by leading the way on solutions and ideas to overcome challenges in the future of education in the UK.

For more information
Web: www.besa.org.uk