Michael Gove yesterday made three significant announcements on school funding, each of which merit scrutiny.
Funding for new school places
First, he said he would be providing an additional £500m to fund new school places in areas where demand currently outstrips supply. In London, for example, it is estimated there will be a shortfall of 70,000 funded school places over the next four years. The big question here is whether this new funding will be enough to help parents get their children into the schools they prefer and to avoid a possible ballooning of class sizes across the capital.
PFI programme for new school buildings
Second, the education secretary announced a £2bn PFI programme to finance new school buildings. This is intended to cover between 100 and 300 schools and will be targeted at those in the worst condition. Gove has been forced down the PFI route because of the government's unwise decision to slash departmental capital spending by 29% in the spending review. There are reasons for scepticism about the use of PFI to deliver these new school buildings: the National Audit Office recently found that there has been hardly any proper evaluation of the cost-effectiveness of existing PFI schemes. The NAO notes failings in the management of PFI contracts by public bodies (hardly any have been reviewed or cancelled when there have been delays or cost overruns, for example) and points out the cost of debt finance has increased by 20-33% since the credit crisis. There are also question marks around the proposal to go for standardised "off the shelf" school designs. Are we going to end up with a new generation of unsuitable prefabicrated buildings, as we did in the 1960s and 70s?
A new national funding formula
The third announcement was the most significant: the move towards a new national funding formula for schools. The government is right that the current funding formula lacks transparency and is not sufficiently based on need. The government is also right to have rowed back from an entirely nationalised funding system: it proposes that instead of the money going direct from the department to schools, local authorities will still be able to vary the allocation per school to reflect local circumstances.
What the government should be doing
However, the government needs to address the wider balance between Whitehall, schools and local authorities. By 2015, we will have a radically different schools landscape in England, in which perhaps the majority of secondary schools will be academies, removed from local authority control and effectively accountable to ministers. We know there are clear benefits from giving schools academy-style freedoms over curriculum and finance. But by cutting out any intermediary layer of governance between academies and the department, we run the risk of creating a highly centralised system with the education secretary increasingly performing the role once carried out by local authorities. Looking to the future, we would do well to look to the United States, where local states appoint powerful school commissioners or superintendents, whose role is to hold local schools to account for their performance.
In England, we need not just a new funding formula but also a new balance between national government, local councils and schools. This means giving schools and teachers greater autonomy to innovate, while creating new school commissioners – appointed by local authorities and mayors – able to stand up for parents, hold schools accountable on standards and ensure fair admissions.
