School budget ‘chaos’ after DfE’s £370m funding gaffe

An investigation is underway into how Department for Education officials made an error in school funding allocations for next year that means schools will now have £370 million less than promised.

Permanent secretary Susan Acland-Hood has today apologised, and education secretary Gillian Keegan has ordered a review of DfE quality assurance processes after identifying an error forecasting pupil numbers.

School leaders will be rightly angry that basic accounting errors may force them to rethink already tight budgets

Schools Week understands the error was identified in September. It was not announced until around 5pm on Friday – two days after the Conservative party conference finished.

Left unaddressed, the error would mean the cost of the core schools budget would be 0.62 per cent greater than allocated in 2024-25. The budget is due to be £59.6 billion next year, so an error of that size would equal around £370 million.

Schools have not received funding allocations for 2024-25 yet, so addressing the error will not result in any clawback. Their allocations would also be based on pupil numbers in the October school census, conducted yesterday.

Funding rise revised down

However, allocations data published in July is used by schools and councils to give themselves an indicative idea of their future budgets.

New allocations data has been published this evening – leaving leaders scrambling to redo budgets with less cash than promised.

The DfE told schools in July that funding through the mainstream schools national funding formula “is increasing by 2.7 per cent per pupil in 2024-25”.

Today’s updated guidance states the rise will be just 1.9 per cent.

The government’s prediction for the minimum per-pupil funding for secondary schools has been revised down by £55. At primary level it’s down £45.

Based on these figures, the average secondary school would be £57,970 worse-off than predicted in July, and the average primary would be £12,420 worse-off.

‘Chaos at the heart of government’

Paul Whiteman, general secretary of the NAHT school leaders’ union, said the admission “speaks volumes about the chaos at the heart of government”.

“School leaders will be rightly angry that basic accounting errors may force them to rethink already tight budgets as a result of the erroneous figures they were provided. Many may now have to revisit crucial decisions around staffing or support for pupils as budgets are reduced.”

Geoff Barton, of the ASCL leaders’ union, said it was an “extremely unfortunate and frustrating error”.

“Even though schools have not received their 2024-25 funding, it is likely that trusts and local authorities will have used the incorrect figures in their budget planning and will now need to revise those budgets with the corrected figures.

“This is the last thing they need on top of all the other demands on their time.”

In a letter to education select committee chair Robin Walker, Acland-Hood said: “I apologise for this error.

“The secretary of state has asked me to conduct a formal review of the quality assurance process surrounding the calculation of the NFF, with independent scrutiny.

“Improvements have already been identified to ensure similar mistakes are not repeated in the future.”

Error ‘does not affect total spend’ on schools

The recalculation of funding “does not affect the total amount we plan to spend in the
core schools dudget in 2024-25 – which includes funding for mainstream schools,
and funding for high needs”.

“It will remain at £59.6bn in 2024-25, the highest ever in real terms per pupil.”

Acland-Hood said the correction of this error “does not mean adjusting any funding that schools have already received”.

“Likewise, the error will not impact on the publication of the Dedicated Schools Grant (DSG) in December, or when schools will receive their final allocations for 2024-25.

It is understood the mistake was down to pupil numbers for a council that recently split into two not being counted. Just the pupil numbers for the original council, and not the new one, were factored into funding calculations.

“Nevertheless, we recognise that the correction of this error will be difficult for local
authorities and frustrating for some school leaders, which is why the Department has
worked as quickly as possible to rectify the error,” Acland-Hood added.

“We will work closely with school stakeholders, including unions, to communicate this change and support schools and local authorities.”

But Daniel Kebede, general secretary of the National Education Union, said “at the very minimum”, Keegan “must honour the funding schools were told they would receive in July.

“Head teachers have planned for that money and budgets are already pared to the bone.”