Academies – National Funding Formula delayed until 2021

The Education and Skills Funding Agency (ESFA) has announced the schools block funding formulae for 2018/2019 and there is a key change that could affect an academy trust’s budgets.

The formulae can be read here.

All Academy Trusts are required to submit, by 30th July, a Budget Forecast Return (BFR). This return includes a detailed budget for 2018/19, and summary budgets for 2019/20 and 2020/21.

The income in these budgets will have been affected by the adoption of the National Funding Formulae (NFF). Originally local authorities were still setting local formula up until 2019/20 and so it was still some time until all Academies are funding on the same NFF.

This meant that in the BFR only the third year, 2019/20, was budgeted with all schools receiving NFF without any element of the local authority still determining local formulae.

The key change however is that it has been announced that local authorities will still determine the local formulae in 2020/21. This once again delays the roll out of the full NFF, and undoubtedly there will be both winners and losers from this arrangement.

The key for your Trust will be to revisit your assumptions that you have worked into your BFR, and ensure that they are still reasonable given this information. If you were relying on additional funding as a result of NFF to balance your budgets for 2020/21, then you should advise your Board of Trustees and consider reworking your budgets prior to submission to the ESFA.

Another key factor for your BFR will be the teachers’ pay award for 2018. The STRB has not yet announced the deal in conjunction with the DfE, and so this is still a big unknown for your budgets. It was previously announced that it will be released before “close of recess” and so is due out imminently, and we recommend that you continue to monitor the situation prior to your submission of the BFR in case the announced deal is different to your prepared budgets.