Fair funding to achieve excellence and equity in education: consultation

Executive Summary

This consultation seeks views on the Scottish Government's future approach to school funding.

Education Governance: Next Steps - Empowering Our Teachers, Parents and Communities to Deliver Excellence and Equity for Our Children (Next Steps) ^[1] , published alongside this consultation, sets out our vision for a school and teacher-led system, where decisions about learning and teaching rest at school level. The way schools are funded needs to support that vision.

The consultation invites views on: the way school education is currently funded in Scotland, including early years provision within school settings; the purpose of developing a new, more consistent approach to school funding; and the principles that should underpin any changes. It also sets out and seeks views on possible future funding approaches to support our vision of excellence and equity for all children and young people across Scottish education.

Chapter 1 sets out why we are reviewing school funding, and the scope of this consultation.

Effective governance needs to be supported by a fair and transparent funding system that puts children and young people at the heart of decision-making. It is right that, as part of our whole-system governance review, we ask whether current practice could be improved, and funding more targeted to where it is needed the most.

As set out in Next Steps, the Scottish Government does not intend to develop a fixed national funding formula. There is little direct evidence at present about the role and success of funding formulas in driving improved educational outcomes. In addition, moving towards a national funding formula could introduce unacceptable instability and inflexibility to education funding.

Funding can have an important role to play in achieving positive outcomes and supporting equity. The development of a fair, more consistent, transparent and targeted method of allocating funding could provide a way to address current equity issues within the system.

This consultation seeks views on two possible approaches to achieving that aim.

Chapter 2 describes the current system of funding for schools. While there are a series of defined and publicly available methodologies for allocating money from the Scottish Government to local authorities, largely through the local government finance settlement, there is no single transparent approach to allocating money from local authority to education, and then to school level.

Education represents the largest single part of local government spending, accounting for around 45% of general fund net revenue expenditure in 2015-16. Total gross expenditure on education was £4.9 billion, with over two-thirds of primary, secondary and special school expenditure on staffing, (53% spent on teachers and 15% on non-teaching staff). Support services account for 4% and 'all other expenditure' the remaining 28%.

This chapter also describes the original aims of, and current practice in relation to, Devolved School Management in Scotland.

Chapter 3 considers the challenges presented by the way schools are currently funded, and concludes that the current system of funding schools falls some way short of meeting the Scottish Government's aims and principles for any future approach to funding. This chapter highlights, in particular the following issues, and seeks views on how funding could be better targeted to support excellence and equity for all:

• wide variation in the amount of spending per pupil between local authorities;
• relatively little targeting of funding on the basis of particular needs;
• considerable variation between local authorities in the influence headteachers have on spending decisions; and
• lack of transparency regarding the method of calculation and level of school budgets.

In light of these issues, and to reflect the vision of a school and teacher-led system set out in Next Steps, Chapter 4 describes and seeks views on two possible approaches to funding in the future.

Next Steps sets out the Scottish Government's intention to legislate to create a Headteachers' Charter which will define across Scotland headteacher leadership responsibilities. The Charter could incorporate within it a standardised Scotland-wide approach to funding allocation, devolving the maximum amount of funding to schools.

An alternative approach - or one that could be used in conjunction with the approach set out above - would be to build on the approach currently being taken in relation to Pupil Equity Funding. Under this approach, more funding would be targeted directly to schools in relation to specific need factors.

The consultation also seeks views on the support, accountability and reporting mechanisms that should underpin greater devolution of responsibility for funding decisions to headteachers.

Conclusion

This consultation is your opportunity to shape how schools are funded in Scotland. The deadline for responses is Friday 13 October 2017.