BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Education
Front Page 
UK Politics 
Hot Topics 
UK Systems 
League Tables 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Thursday, 23 March, 2000, 17:29 GMT
How schools get their money
Not all are equal when it comes to funding
It is often said that schools get their money - via local education authorities - through a complex formula.

Many schools complain that the amount they get per pupil is unfair compared with similar schools elsewhere.

This is a summary of how it works.

Councils in England get their money from three sources. Locally, through the council tax - this accounts for about 25%.

And centrally, in the form of a grant from the government and in their share of the business rate.

Standard assessment

People often think the business rate is determined by a council, because it is the council that has to collect it.

But the level is set centrally, the money collected from the whole country is pooled, and the amount a particular area gets is decided on the basis of its population.

The total amount any council gets from central government specifically for education is known as the standard spending assessment (SSA).

This is what the government thinks it should be spending on its education service.

At its simplest, this is related to the number of pupils. But there are two additional elements which can boost it.


One is the "area cost adjustment". Essentially, this gives additional sums to authorities in the south-east of England, where living costs are higher than in the rest of the country.
science lab
Complications soon set in
The other element is for "additional educational needs". This takes into account such things as relative social deprivation.

When councils get these additional sums they do not necessarily spend them in the parts of their area to which they relate.

A local authority takes the all money it has been given and allocates it to schools on the basis of another formula. Rules and regulations limit the way it decides this.


A proportion relates to pupil numbers in a school, with more for older children. There is some latitude for such things as level of social deprivation and the need for home-school transport.
pupils with hands up
Don't ask, don't get
One of the most contentious parts of the whole system is that "area cost adjustment" for the South-East, which is itself weighted differently between London and the councils bordering it - those in the capital get more.

Then there is a sudden cut-off at the edge of the fringe, which is why schools in Hertfordshire get more than those in Cambridgeshire, for example, even those that are only a few miles apart and with similar costs.

"That differential is entirely at the discretion of the government," said the deputy director of local government finance at the Local Government Association, Mike Grealy.

"The government actually reviewed the grant distribution mechanism a couple of years ago - there were major pieces of work in relation to additional educational needs and the area cost adjustment - and simply refused to make any changes.

"It is obviously not happy with it but it hasn't changed it."

Competing for more

Schools also get money for specific purposes in the form of grants direct from government, which local education authorities have to bid for, such as Standards Fund money for "advanced skills teachers".

And other sums depend on a local authority - either alone or in partnership with other councils or outside organisations - putting together a successful bid for part of a limited central pot.

For example, a council can only get its schools money for part of the National Grid for Learning if it has been part of a successful bid in a consortium with others.

Parents hear ministers announcing money to give schools fast connections to the internet - but their child's school might not see any of it.

Finally, as of April 2000, schools are getting money from the government to spend as they wish, from 3,000 to 40,000 based simply on the number and age of their pupils.

It is a radical change.

See also:

22 Mar 00 | Education
Councils accuse schools of hoarding
08 Feb 00 | Education
Call for fairer funding for schools
25 Jun 99 | Education
Councils accused of robbing schools
25 Jun 99 | Education
Fury over education spending figures
22 Apr 99 | Education
Schools 'robbed of 180m'
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Education stories are at the foot of the page.

E-mail this story to a friend

Links to more Education stories