Press release

School funding and the Pupil Premium - what changes will the new system bring?

22 December 2010

The Coalition Government have recently made a number of announcements on how schools in England are to be funded.  A pupil premium will be introduced which provides additional funding to schools linked to the admission of pupils from disadvantaged backgrounds, including an initial £430 for each pupil registered for free school meals (FSM).  A national funding formula is also to be consulted on which will determine funding on an individual school basis, replacing the current system whereby Local Authorities determine how funding is allocated between schools in their area. NFER have explored the context of these changes and considered the issues around the allocation and use of school funding.

Allowing schools to make their own judgments on how best to spend their budgets clearly takes advantage of their unique knowledge of their pupils and circumstances, but a number of questions need to be addressed.  Will the additional funding filter through to directly benefit the pupils it is designed to, leading to a narrowing of the gap in attainment? Will it improve disadvantaged pupils’ prospects of admission to good schools seeking greater funding?  Or will it prove too blunt a tool, which in the absence of an explicit or tested ‘theory of change’ is an inefficient use of scarce resources and, worse, fails to break the link between social background and educational disadvantage?

The report has been compiled using schools’ financial data for the year 2008/09 and linking this to school characteristics held in our ‘Register of Schools’ such as numbers of pupils in each school, and the percentage of whom are eligible for free school meals and/or have a statement.

Key findings

A pupil premium is not new
The pupil premium proposed by the Coalition Government will only add to a pre-existing premium of over £4000 extra on average already associated with pupils eligible for free school meals.  Even ignoring the question of where funding for the premium comes from in relation to the overall schools’ budget, the new pupil premium is therefore less radical than first appears. 

Additional funding also tops up general school services
In the absence of specific restrictions on spending, funding is currently spent on a wide range of areas, not all of which are likely to directly or preferentially benefit disadvantaged pupils.

Location matters
Variations in regional funding can largely be explained by differences in the costs they face and their pupil in-take.  However, there remain significant variations within regions affecting individual schools and local authorities.  This may reflect some of the more detailed intricacies of the current funding formula, but is likely in large part to be a consequence of local decisions on how funding is distributed. Proposed moves towards a national funding formula will remove these variations, which raises the question - is this a good thing?  Whilst perhaps freeing schools from Local Authority influence, a national funding formula could be seen as a centralisation, and mechanisation, of decisions currently negotiated locally contrary to government’s localisation drive.

Ben Durbin, Senior Statistician in NFER’s Centre for Statistics says "This research provides some important context to current upheavals in the way our schools are being funded. In particular it highlights the tensions that have to be managed under any new approach: between a system which is fair and transparent and one which recognises the uniqueness of individual schools; between financial autonomy at a local and school level, and the desire for funds to be spent consistently with central government priorities".

The full report is available at: /publications/99909/

For more information contact Allie Chownsmith, Media and Communications Executive, on 01753 637155 or Gail Goodwin, Media and Communications Manager, on 01753 637159

Notes to editors

The NFER Centre for Statistics leads on complex statistical analysis on all NFER’s research work and quality assures other statistical analysis.

NFER is the UK’s largest independent provider of research, assessment and information services for education and children’s services. Its purpose is to make a difference to learners of all ages, especially to the lives of children and young people, by ensuring that its work improves the practice and understanding of everyone who works with and for learners.

NFER undertakes around 200 research projects every year, spanning all sectors of education and children’s services, and provides high quality, evidence-based research for policy makers, managers and practitioners. The Foundation offers a wide range of services and information sites, making NFER a one-stop-shop for anyone interested in education and improving children’s lives.

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