The government is ploughing ahead with its plans to reform school funding but what exactly will these changes be and how will they affect schools? Sam Ellis explains the many complexities of these proposals and looks at what they will mean for schools.

Say a little prayer...

I would like you to find the bible that Mr Gove sent to your school, find the first book of Corinthians, chapter 13, and look at verse 12. It starts with the brilliant phrase: "For now we see through a glass, darkly". I find it comforting to know that little has changed over the last 2,000 years. Admittedly, the writer was not commenting on the impact of the recent school funding announcements but s/he might as well have been.

The key information is in School Funding Reform: Arrangements for 2013-14 and in 16-19 Funding Formula Review: Funding full participation and study programmes for young people. I think a crystal-ball-gazing exercise on the mid-term consequences flowing from either of these two documents is certainly looking 'through a glass, darkly'.

The short-term bottom line is easy, and coincidentally takes us to a point in time just after the next general election!

For pre-16 school funding there will be a simplification in the local distribution formula affecting all schools including academies in an area. The additional funding needed by academies delivered through the local authority (LA) grant, known as LACSEG, will be dealt with in a new manner.

This will require LA maintained schools to consider a new approach through the schools forum with the interesting name of 'de-delegation'. In the current system, academies get a grant to represent that part of the Dedicated Schools Grant (DSG) that stays with the LA to cover the work it does on behalf of maintained schools. For want of a better name, I will refer to this grant as 'schools' LACSEG'.

In simplistic terms, after April 2013, LA maintained schools and academies will get the same initial funding covering the school budget share and the schools' LACSEG. LA maintained schools will be able to pay this element back to the LA, or 'de-delegate', via a block vote at the schools forum.

There will also be issues over the impact of a simplified local formula largely defined as a common block sum and a per pupil amount. Anyone interested in doing the maths should consider questions like 'How does the level of funding per pupil change in an area depend upon the number of block sums required?' particularly when the ministerial rule is that all the block sums in an area must be identical. The supplementary question of whether this implies that some schools may be overfunded at the expense of others (and if so which, and why) is also very interesting.

For the next couple of years the answers are academic; there is a protection level of minus 1.5 per cent at the per pupil level for any school where funding falls for 2013 to 2015. Given the fixed level of overall funding, that will mean that there will be limited gains for any schools that may be due an increase in the new system. At this point, there is no way of knowing the detail until LAs have worked out their new formula mechanisms.

The bitter irony here is that the original cause for concern was the vast disparity in funding per pupils between areas and this remains something that is not being addressed in any way. The document School Funding Reform: Arrangements for 2013-14 states: "We will introduce a national funding formula in the next spending review period." This first assumes that the current administration is still in the driving seat and second begs the question as to why the introduction has been ducked now.

In my view, the current proposals do no more than solve administrative issues surrounding the LACSEG grant. If the statement about national change in the next spending review is to be believed, there is clearly more to come. My preferred approach would be to work out a possible whole solution first, and to model it carefully before implementation.

Post-16 is a different issue, despite a promised three-year protection period. By the time my next article is due the fog may have cleared a little so I will deal with that then.

For now, I feel there are statements in both documents that could mean everything and could equally mean nothing. There is some work to be done in the coming months on clarification, slow thinking and basic mathematics – but for now, 'we see through a glass, darkly'.

• Sam Ellis is ASCL's funding specialist

Find out more

For more information, see the following documents on the DfE website:

School Funding Reform: Final arrangements for 2013-14

http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schools-revenuefunding/a00205567/school-funding-reform-final-arrangements-for-2013-14

16-19 Funding Formula Review: Funding full participation and study programmes for young people:

http://media.education.gov.uk/assets/files/pdf/1/16-19%20funding%20policy%20document.pdf

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