Schools budget

In 2006/07 the government changed the way in which schools are funded by introducing a new specific grant, the dedicated schools grant (DSG), so that schools will be wholly funded from this source in future, and not formula grant. The grant is distributed according to the number of pupils in schools, with minimum grant increases as a safeguard against falling pupil numbers.

For 2009/10 the schools budget is expected to overspend by £2.2 million, principally as a result of the increasing number of children being placed in non-maintained special schools. This overspend will be clawed back from the dedicated schools grant in 2010/11.

2010/11 is the final year of the governments three year grant settlement. The total DSG funding nationally for 2010/11 is estimated at £31.242 billion which represents a cash increase of 4.3%. The headline increase in the DSG per pupil is also 4.3% for 2010/11.

Salford's indicative DSG is based on estimated pupil numbers and for 2010/11 is £137.951 million which represents a cash increase of 3.6% and a per pupil increase of 4.0%. However, the actual figure will depend on actual pupil numbers. In Salford's case the october pupil census shows that funded pupil numbers in mainstream schools have reduced by 182 (0.64%) since the January 2009 count. Therefore, the dsg has been recalculated to reflect the impact of the fall in numbers and is likely to be £137.2 million which represents an increase of 3.1%.

The main reasons for Salford receiving a below average increase are that it has traditionally spent above the governments formula spending share on education. The formula spending share reflects the amount which the government estimates an authority should be spending the on a particular service. The national average includes additional funding to bring those authorities that spent less than formula spending share up to the governments expectation.

Within the headline announcement the minimum funding guarantee (MFG) per pupil for schools is set at a 2.1% increase for each of the next three years. This is significantly below the level over the last 3 years. In determining this increase the government has assumed that schools will make efficiencies of 1%.

In comparison, the teachers' pay offer had been announced at 2.3% for 2010/11 although there has been no official confirmation of this. If this is confirmed, the level of the minimum funding guarantee is likely to put more financial pressure on a number of schools to fund non-pay expenditure.

Those schools with static pupil numbers will receive a real terms decrease in budget. Schools with reducing numbers will receive an even lower budget and the potential for deficit budgets is increased.

In addition to the schools budgets, the dsg also funds some central activities e.g. pupil referral units, early years provision, high cost sen pupils. These areas have historically had high demand pressures but the reduction in total pupil numbers will restrict the amount of resources available for these areas. Any overspending incurred in these areas in 2009/10 is carried forward and will be the first call on the dsg for 2010/11. This will result in a lower amount of budget being available to fund the dsg areas of spend for 2010/11.

A summary of budget changes from 2009/10 to 2010/11

This page was last updated on 20 April 2012