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Both main political parties expect to continue ring-fencing schools funding separate from councils, says Robert Hill Remove the ring fences' is the cry from many local authorities as they look ahead to an era of severe financial austerity. Having the flexibility to deploy funds within and across services would, they argue, enable them to use resources more efficiently, and to base the tough decisions they will have to make on local rather than national priorities. The dedicated schools grant (DSG), accounting for more than £31bn of government grant, is the biggest ring-fenced funding stream, and the one where local government is most eager to recover its autonomy. In the article ‘Are SAAs the next big idea?' (The MJ, 4 March), I suggested that the upcoming Budget could herald the arrival of what I termed super area agreements, bringing more flexibility for councils and their partners over revenue and capital allocations, in return for local partners signing up to deliver agreed outcomes for their place. However, I also argued that the DSG was likely to stay ring fenced. This scenario is, I believe, likely to hold, whichever of the major parties wins the election. Under Labour's policies, there are already 200 academies up and running en route to establishing at least 400. Academies are funded directly by the Government – a function shortly to be administered by the Young People's Learning Agency – in accordance with local formulae applied to other schools in the area. So, even if the DSG ring fence was removed, a substantial number of schools would still remain outside the local government funding system.Labour's other big idea is to set up school chains, formally known as accredited schools groups and providers, which are led by high-performing schools, further education colleges, universities, charities, faith groups and education companies. These groups will take over weak schools and improve them by incorporating them into their chain and applying their knowledge, systems, leadership and staff expertise. Already, we have around 20 groups of schools running four or more schools, and several running 10 or more. The number and size of these chains is likely to grow, driven in part by economic as well as educational reasons. It would be possible to fund schools in chains on the basis of local formulae, but it is more likely that the chains, as they become entrenched, will demand a consistent national funding formula to be applied across the country. The Young People's Learning Agency (YPLA) is a ready-made vehicle to deliver this, and already administers a national formula for post-16 education funding As for the Conservatives, they have promised a Bill in the first days of a new parliament to enable all schools graded ‘outstanding' by Ofsted to become academies by the simple expedient of their governors voting for a change of status. It is a return to directly-funded grant-maintained schools by any other name. In an echo of Labour's policy, weaker schools will be taken over by academies. And, according to what the shadow education spokesperson, Michael Gove, told an audience of school-leaders earlier this month, local authority advisers and consultants will get their P45s. The Conservatives also plan to open up the supply of schooling to parents and other groups funded on the basis of a standard amount per pupil. So, the direction of travel – at least for resourcing secondary schools – is likely to move beyond the DSG ring fence to direct funding of schools via the YPLA. Sending allocations direct to primary schools might be much further down the road but even here, school chains and academies are being promoted by Labour and Conservatives respectively. A further factor which is pushing policy towards a national funding formula is the application of a pupil premium to take account of deprivation. The Liberal Democrats and the Conservatives both have explicit commitments to this – although the Institute of Fiscal Studies has raised doubts over how it would be paid for under the Tory plans. Labour's policy of funding individual pupil catch-up support has a similar objective. The trend in all three parties is, therefore, towards removing local authority discretion on funding for education deprivation. So, while further decentralisation to local government and local agencies is on the cards in education, it is likely to take the form of increased devolution to institutions rather than to councils. Robert Hill is an independent policy analyst and his recent study on chains of schools, Chain reactions, has just been published by the National College for the leadership of Schools and Children's Services.

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Parties deliver a sharp lesson on schools funding

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