My Lords, I genuinely welcome the chance to talk to your Lordships about reforms to the national funding formula. We will come on to this in more detail on Clause 33 in the next group. I want to start my response by noting that this part of the Bill delivers a long-standing commitment to achieve fair funding for schools and, I should say, a commitment where there have been multiple consultations over the years with the sector.
I will start by responding to Amendment 79 in the name of the noble Lord, Lord Hunt, and Amendments 79ZA and 79C in the names of the noble Baronesses, Lady Chapman and Lady Wilcox, on the financial arrangements of multi-academy trusts. One of the ways that the best multi-academy trusts transform outcomes for pupils is by focusing their expenditure and investment towards the right areas, whether this is investing in new IT across the trust or securing additional staff to work across all the trust’s schools.
Trusts can target funding to turn around underperforming schools they have brought into their trust or, indeed, as we discussed with the noble Lord, Lord Shipley, on a previous day, target funding to very small, rural schools which would otherwise not be viable. The academy model relies on trusts’ ability to harness and share expertise and resources. However, Amendments 79 and 79ZA would stifle trusts’ ability to do this, undermining one of the fundamental benefits of the model.
Moreover, academy trusts are already required to publish a full set of financial accounts annually, which are publicly available. The department publishes a full report and consolidated accounts for the academy sector each year. We believe this meets the intention of Amendment 79C. The report includes data on financial health across the academy sector, and the educational performance of the academy sector at a regional level, to which the noble Baroness alluded.
My noble friend Lord Deben suggested that we needed to do more with data. Again, I challenge my noble friend just to look at how much data on schools we share publicly. The website Get Information about Schools gives very detailed information on school and trust performance. You can look by constituency area, local authority area or trust area. It gives information on finance—including the voluntary income that was referenced in the debate—workforce, and educational outcomes. That allows one to compare academies and maintained schools. We also publish school-level funding formula allocations for every school every year and the Department for Education runs a website specifically to enable anyone to see school-level national funding formula allocations and understand what funding they would receive if the national funding formula was followed locally. That may be something to look at for the Devon schools; I have not looked but I will do. The
webtool is called view NFF allocations—I will write to noble Lords with the link—and it is published on GOV.UK.
We continue, of course, to look at how we can improve transparency, and in the schools White Paper we committed to consult on future financial reporting arrangements. The noble Baroness, Lady Chapman, asked —again, I hope she will forgive me if I paraphrase inaccurately—why we were not including local authorities in the process. She will know that we worked hard with local authorities ahead of publishing the schools White Paper to get a much clearer role for them. We are clear that the Government’s responsibility is to make sure that local authorities are empowered to be the champion of the child. They will be at the heart of the system, championing all children in their area but particularly the most vulnerable children, so they will play a leading role, of course, in safeguarding, pupil place planning and admissions. They will continue to be responsible for the high-needs budget and will lead local delivery of provision for children with special educational needs and disabilities, and they will be supported by the new partnerships.
The noble Lord, Lord Hunt, alluded—again, I think I am right in saying—to related party transactions in trusts. The Government are extremely vigilant to make sure that related party transactions, whether they are in maintained schools or in trusts, are handled with the highest levels of governance. But I point out to the noble Lord that the £120 million is on a budget in 2019-20 of over £31 billion so, if my maths is right, it is 0.3%.
I turn to Amendments 85 and 86 in the name of the noble Lord, Lord Storey. As I have already said, transparency is critical and is at the heart of our reforms. In relation to Amendment 85, we will continue to publish information annually on the national funding formula, including how it is calculated, what factors it uses, school-level allocations, and an equality impact assessment. Based on this information, it is already possible to see the impact on rural schools, or indeed any other group of schools.
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The national funding formula recognises the essential role that small rural schools play in their communities through the sparsity factor in the formula. Support for such schools has increased by £69 million in the past two years, to a total of £95 million. The noble Lord will note that the move to the direct national funding formula will mean that all eligible small rural schools would in future receive this sparsity funding, helping those in the 16 local authorities which currently do not use this factor in their formulae. I hope this will reassure the right reverend Prelate the Bishop of St Edmundsbury and Ipswich.
In addition, in response to the noble Baroness, Lady Humphreys, the presumption against the closure of rural primary schools means that the case for closing a school must be very strong, with all alternative options and the potential impact on educational provision in the area considered before any closure is proposed.
The noble Baroness, Lady Bennett, talked about levels of attainment in rural areas. She is right and that is one of the reasons why a number of extremely rural
local authority areas such as West Somerset, Fenland in Cambridge and several others are included in the Government’s opportunity areas in the future education investment areas—as I am sure the noble Baroness is aware.
On Amendment 86, in the name of the noble Lord, Lord Storey, and the noble Baroness, Lady Brinton, getting students back into face-to-face education while providing additional help has been one of the Government’s main priorities. I very much welcome the invitation from the noble Baroness, Lady Brinton, to meet the two children’s groups which have experience of long Covid. But, if I heard correctly, perhaps I might just set the record straight. I think the noble Baroness said that the Government are providing tutoring to the people who usually get it. I think the whole point of the Government’s tutoring programme is to get tutoring to all the people who do not usually get it.
Since June 2020 we have committed a total of nearly £5 billion over five years until 2024-25 to fund a comprehensive recovery package, focusing on the evidence of what works. We are providing support to all pupils while prioritising the most disadvantaged, vulnerable and those with the least time left in education.
On Amendment 86A, in the names of the noble Baronesses, Lady Chapman and Lady Wilcox, deprivation factors are central to our funding system, and we will discuss this further in the next grouping. The income deprivation among children index, known as IDACI, is one of three measures we use to fund deprivation in the national funding formula. The factor was included within the formula following extensive consultation prior to its introduction in 2018. As with the index of multiple deprivation, IDACI is a measure of relative deprivation between geographical areas but has a more specific focus on children and that is why we felt that it was the more appropriate measure to use here.
The national funding formula allocates 3.7% of its funding to IDACI, reflecting levels of deprivation where pupils live. It is important that we retain the flexibility to develop the factors within the funding formula outside of legislation, as we currently do, so that we can continue to allocate funding fairly, according to needs, if and when new measures of need are developed.