November children's services finance advisory network blog


Thought piece from Lisa Forster, Children’s Services Finance Advisor

1 November 2012

The funding reform which aimed to streamline council's formulas and provide greater transparency has led to a stream of comments from a range of bodies; the majority raising concern and fears over the system, and of course the hard cash available. The short timescale to implement the new system has meant that many councils are simply trying to minimize disruption rather than instigate a zero-based review. This has led in some cases to the fact that if current formulas include any historic inherent anomalies these are often replicated in the new and ‘improved’ formula. There will of course be winning and losing schools, and although the minimum funding guarantee offers a modicum of financial protection this represents a new system that is unlikely to go away. The funding reform is likely to be revised again, with even greater prescription, post-election (if the current government remain in power) as the conservatives have always made it clear that a national funding formula is the way to go.

The top slicing of the Early Intervention grant to the tune of £150m to deal with nursery places has led to councils and the Local Government Association (LGA) questioning the ‘centralising’ factor (as well as the sums!). The government promised us localism, and less reliance on central government funding, in fact in May 2010 they stated “ We will promote the radical devolution of power and greater financial autonomy to Local Government”. At this time the funding reform and centralization of monies from the EIG doesn’t seem like it is giving ‘greater financial autonomy’ to councils!

Another agenda which has often being cited as ‘fragmented centralisation’ is that of the academies agenda, particularly forced conversions. The schools themselves receive greater autonomies away from local government, but they have, one could argue, even more stringent ones (albeit on slightly different areas) from their new regulators – central government. Michael Gove, the Education Secretary, is currently writing to all MPs in areas where schools are said to be underperforming – mainly in Labour led authorities – demanding that they side with him to open up the education system to the new providers who can raise standards. Once again the localism question raised its head!

Both the LGA and London Councils, are calling on the government to give councils greater powers to intervene in academies. On the one hand this provides a level of security and perhaps peace of mind that academies are operating at a minimum sufficient level, in terms of academia and financial stewardship. However, on the other hand, this goes against what many academies and indeed the government believe is the way our education system should operate. The government see competition as a key element in all markets to promote self-improvement, and schools are no exception. Survival of the fittest could be a fitting strapline!

Lisa Forster, Children’s Services Finance Advisor.