Education secretary Michael Gove said the current system for schools was 'extremely complex, opaque and often unfair'.
Proposals include splitting the Dedicated Schools Grant into three funding blocks - for schools, SEN and alternative provision, and early years - allocated to local authorities. The early years block will cover the free entitlement for three-and four-year-olds and centrally retained services for early years.
A further funding block will be allocated to services currently within the schools budget that are not suitable for delegation.
'We will continue to ringfence the whole of the grant so that it is spent on the functions for which it is meant. However, the individual blocks will not be ringfenced. This will enable local authorities, in consultation with their Schools Forums, to move funding between the blocks, mirroring the current situation,' the consultation says.
Following feedback from the Government's previous consultation, which found that providers felt it was important to retain local flexibility, ministers intend to allow local authorities to retain responsibility for operating the Early Years Single Funding Formula.
However, in response to criticism from providers that the EYSFF was 'unnecessarily complex' and that some providers do not understand the funding they receive, the consultation suggests ways of simplifying it. Possible options include:
- removing multiple supplements, such as supplements for flexibility and quality of provision, other than the disadvantage supplement;
- limiting 'banding' - wherelocal authorities fund varying levels within a single supplement based on varying definitions such as the quality of provision;
- consolidating all funding through a single base rate and deprivation supplement, and enabling local authorities to allocate extra funding, as they see fit, through lump sums;
- revising guidance to make it clear that local authorities should operate supplements in a clear and simple way
In addition, an analysis of data also shows that there is a wide variation in how the deprivation supplement operates, with large differences in its value and eligibility criteria. It says that while most local authorities used geographical deprivation measures, the size of the local population considered to be eligible is 'very variable'.
A number of options are being considered, including aligning the criteria for the disadvantage supplement ,ore closely with those for the free entitlement for two-year-olds and the Pupil Premium. Another suggestion is to focus resources at setting level.
The consultation also asks for views on proposals as to how to develop a national formula for the EYSFF, which is largely based on the schools formula.
Further informationA consultation on School Funding Reform: Proposals for a fairer System runs until 11 October.
