Written statement to Parliament

Funding allocations

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Secretary of State for Education Michael Gove’s written ministerial statement on school funding

The Rt Hon Michael Gove MP

I am today announcing capital funding to provide the extra places needed for our growing population, and to implement the universal infant free school meals entitlement. I am also pleased to publish Sebastian James’s review of progress since his original 2011 report on education capital. I am also announcing the government’s main school funding allocations for 2014-15 through the Dedicated Schools Grant (DSG) and the Education Services Grant (ESG).

This government’s overriding priority for capital investment is to ensure every child has a place at school. Demographic pressures have put strain on schools in many parts of the country. That is why we have more than doubled funding for new places to £5 billion in this parliament. By May 2013, this investment had already helped to create an additional 260,000 school places with more still to come.

Today I am announcing further funding for new school places up to 2017. We are giving local authorities longer-term allocations for new school places, which will give them more certainty in their planning. We are targeting funding more effectively, based on local needs, through using data we have collected from local authorities about the size of schools and forecast pupil projections. We are also analysing local authority capital expenditure on new school places, so that there is greater accountability and transparency around how they use these funds.

The major investment I am announcing today will enable local authorities to make sure that there are enough school places for every child who needs one in the years to come. The number of pupils in England is rising and is set to continue to rise well into the next Parliament. Ensuring that every child is able to attend a good or outstanding school in their local area is at the heart of the government’s comprehensive programme of reform of the school system. To achieve this we will provide an additional £2.35 billion to support local authorities to plan and create new school places that will be needed by 2017. This is additional to the £5 billion that has been allocated between 2011-15. Extending the allocations to a three year period will allow local authorities to plan strategically for the places they need. I have listened to the particular challenges faced by London, and therefore the methodology used to allocate funding for 2015-17 takes into account the higher costs of building in the capital.

I am also announcing further details about capital investment in 2014-15 to support universal free school meals for children in reception, Year 1 and Year 2 in state-funded schools. As part of the Autumn Statement the Chancellor confirmed £150 million of capital funding for improving school kitchen and dining facilities in order to offer every infant pupil a free nutritious school meal at lunchtime. Universal free school meals for primary school pupils were a key recommendation of the independent School Food Plan produced for the department by Henry Dimbleby and John Vincent in July 2013. The aim is to improve academic attainment and healthy eating, and save families money.

Turning to revenue funding, the distribution of the Dedicated Schools Grant (DSG) to local authorities will continue to be based on the current “spend-plus” methodology for 2014-15, set out in three spending blocks for each authority: an early years block, a schools block and a high needs block. The underlying schools budget will be kept at flat cash per pupil for 2014-15. To protect local authorities with falling pupil numbers we will continue with arrangements to ensure that no authority loses more than 2% of its budget in cash terms.

Although the overall schools budget will stay at the same level on a per pupil basis before the addition of the Pupil Premium, the actual level of each school’s individual budget will vary. To protect schools from significant budget reductions, we will continue with a Minimum Funding Guarantee that ensures that no school sees more than a 1.5% per pupil reduction in 2014-15 budgets (excluding sixth form funding) compared with 2013-14 and before the Pupil Premium is added.

As part of the DSG, I am announcing 2014-15 revenue funding allocations to local authorities to secure early learning places for two-year-olds from lower income households. From 1 September 2013 early learning became a statutory entitlement for around 20% of two-year-olds across England, which will extend to 40% of two-year-olds from September 2014. To deliver this, the government is today allocating £760 million to fund the extended programme in 2014-15.

The Department of Energy and Climate Change (DECC) announced on 10 December 2012, that all state funded schools in England will be withdrawn from participating in the CRC Energy Efficiency Scheme from April 2014. This means that local authorities will no longer be required to administer the CRC Energy Efficiency Scheme on behalf of schools. A deduction of £50.5 million will be made from the DSG for 2014-15 to compensate the Exchequer for the loss of revenue resulting from local authorities no longer needing to meet the costs of purchasing carbon allowances for schools under the scheme. As schools will no longer need to meet these requirements, they will be no worse off as a result of this change.

The distribution of the Education Services Grant (ESG) is based on a total figure of £1.03 billion transferred from local government funding as announced in December 2012. The new grant will be allocated on a simple per-pupil basis to local authorities.

Details of today’s announcement will be sent to local authorities and be published on the Department for Education website. Copies will be placed in the House library.

Published 18 December 2013