The Schools Funding Crisis

The Schools Funding Crisis
March 8, 2017 Mark Richards

The Snapchat school

Despite recent reforms, real concerns remain over the future funding of UK schools

Last week Snap Inc. – parent company of messaging app Snapchat – floated on the New York Stock Exchange. The company has never made a profit – last year it lost $515m – but that didn’t stop investors piling into the stock, attracted by Snapchat’s 161m daily users. The price rose from the initial $17 a share to end the day at $24.48 – valuing the company at $28bn.

That was good news for the company’s backers – and great news for the two founders, Evan Spiegel and Bobby Murphy, both still in their twenties and now both multi-billionaires.

Snapchat’s success was also remarkably good news for Saint Francis High School in Mountain View, California. Back in 2012 the school – encouraged by one of their parents who had seen how excited his children were by a fledgeling app – invested $15,000 in a little-known start-up. That start-up was Snapchat and the principal has just written to parents to say that – according to the latest share price – the school has made $24m.

And they say letters from school are usually bad news…

Schools in the UK

In the UK, however, it is a rather different story.

Education Secretary Justine Greening has just announced a new national funding formula, intended to increase funding for schools with additional needs, including social deprivation. The changes are being introduced from 2018 to 2019 and should mean that more than 10,000 schools will gain extra funding.

In theory, more than 11,000 schools will receive extra money. On the face of it, that has to be good news – but teaching unions are already warning that even the ‘winners’ will see cuts in real terms over the next three years. This claim seemed to be backed up by the National Audit Office which warned that schools in England were facing an 8% cut in ‘real-terms funding of pupils’ following £3bn of cuts by central government.

The newspapers are reporting that ‘thousands of cash-strapped schools’ will lose further money from their budgets under the new formula. They suggest that under the recent proposals more than 9,000 schools in England will lose funding, with money moving from London and other urban centres – that have generally been well funded in the past – to schools in areas that receive less money.

It appears that grammar schools will be hit particularly hard.

On the one hand that is not surprising, as generally grammar schools are in more affluent areas – yet the Government has supposedly identified grammars schools as the key to the nation’s future. Tuesday’s papers were reporting that the Budget will see the Chancellor pledge between £320m and £500m (depending on which paper you read) for 140 new free schools, many of which are expected to be grammar schools. This comes on top of the 500 free schools already pledged by 2020.

Tim Gartside, head of Altrincham Grammar School for Boys, went on Radio 4’s Today programme to plead the grammar schools’ case and tell listeners that the school was considering asking for voluntary contributions of £30 to £40 per month from parents, with “many other” schools considering a similar move.

The Chancellor has also committed himself to £500m on vocational education. Speaking on Sunday morning’s Andrew Marr Show, Philip Hammond announced the move – which will apparently be in the Budget – in a bid to train more skilled workers and thereby boost productivity and the UK economy. The plans will see 15 ‘routes’ into employment, linked to the needs of employers and set to replace 13,000 existing qualifications.

The government is calling these plans – due to be introduced from the 2019/2020 academic year –

“the most ambitious educational reform since the introduction of A-levels some 70 years ago.”

They have quickly been dubbed ‘T-levels’ and will increase the amount of training available to 16-19-year-olds by 50%.

The Schools Funding Crisis

A Confusing Picture

What is clear from all these reforms, opinions, claims and counter-claims is that… nothing is clear.

Two things, however, are undeniable. Whilst UK productivity has improved of late, it still lags behind a great many other advanced economies. Fixing this ‘productivity gap’ was a recurring theme of George Osborne’s Budgets, and it would appear that his successor has taken up the mantle.

UK workers are, on average, around 20% less productive than those in France or Germany. As former shadow business secretary, Chuka Umunna put it,

“It takes a British worker to Friday to do what the equivalent French or German worker will do by Thursday afternoon.”

So tackling the productivity gap cannot be anything other than beneficial – for workers’ living standard and for the country as a whole. Clearly, education and technical qualifications can play a huge part in this.

But the second undeniable fact is that there is not a bottomless pit of money. We have written recently about both the looming bill for social care – the Chancellor will apparently unveil a £1.3bn ‘sticking plaster’ in the Budget – and the cost of the UK’s commitment to reduce carbon emissions by 2050. Small wonder then that the schools are facing a £3bn cut in their budgets. As the Chancellor seeks to build a ‘Brexit war chest’ – starting today – there will be plenty of other cuts to come: in short, schools should not expect any largesse from the central government any time soon.

Looking Ahead…

So what are they to do? Will we see all schools starting to request money from parents? Schools are not allowed to charge for education in normal school hours, but there is no law preventing them from asking for voluntary contributions for the benefit of the school, or for school activities.

Or maybe the answer is for the schools to become more entrepreneurial: to follow the example of Saint Francis High School. Perhaps then parents could look forward to fewer letters starting with ‘there has been an outbreak of head lice’ and the occasional ‘great news from our investment managers’ instead.

One thing is for certain; with one head teacher openly warning of running her school on a four-day week, scrapping the sixth-form or removing arts subjects from the curriculum, a solution to the current funding problems has to be found.

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