Is the Basic Need Allocation enough to support LAs in funding extra school places?

Janet Downs's picture
Basic Need Allocation “supports the capital requirement for providing new pupil places both in new or expanded maintained schools, and in Free Schools or expanded Academies”, says the Department for Education (DfE).

The DfE has allocated £1.6bn to local authorities (LAs) for two financial years (2013-14 and 2014-15) to help LAs manage the supply of future school places. Each LA’s share is based on a formula which takes into account school capacity, number of pupils on roll and LAs’ projected pupil numbers for the academic year 2015/16. Shortfalls are the projected numbers minus the existing school capacity for 2011/12.

Newham Council, after hearing that it would receive just over £48m, said:

“The Basic Need funding now confirmed as available for 2013-15 will greatly assist us being able to provide the required additional places for both primary pupils and those with specific special education needs.”

But this may not be enough to help Newham meet the expected shortfall of 4,595 primary places in 2014/15. The National Audit Office (NAO) report into the capital funding of school places said increased funding and money raised from savings elsewhere meant the “effective funding contribution per place had thus increased from £9,875 to £13,780.” According to the NAO’s figure Newham should have received £63m to address the 2014/15 shortfall in primary places. But it didn’t.

Barking and Dagenham received £28m. But it has a projected shortfall in 2014/15 of 7,445 primary places and 1,378 secondary places (source: New Schools Network*). According to the FT (behind paywall), however, Barking and Dagenham faces a total shortfall of 5,264 places by 2015/16. Either way, £28m is insufficient to help the LA address the shortfall. Barking and Dagenham would have to contribute far more than the expected 20% of total funding** to finance sufficient places.

The NAO warned that “as the Department has yet to update its estimate of the total cost of places required, it is not yet clear whether this level of funding represents an accurate assessment of the resources required to meet forecast need.”

On the same day the DfE gave details of the Basic Need Allocation it announced the Targeted Basic Needs Fund (TBNF) which “will offer additional support to those local authorities experiencing the greatest pressure on places and will help them to prepare for further rises in pupil numbers.” This suggests the DfE knew the Basic Need Allocation would be insufficient.

If the Basic Need Allocation was enough to meet forecast demand then there would be no need to provide an additional source of funding especially one which created an extra level of bureaucracy by requiring LAs to submit bids.

Not only does the Basic Need Allocation appear to be less than NAO figures suggested but it seems to have been inconsistently applied. Croydon, which has a projected shortfall of 2,902 primary places (source: New Schools Network*) received £63m - £35m more than Barking and Dagenham which has a far greater projected shortfall. And Croydon also received sufficient TBNF money to wipe out its projected shortfall.

The Public Accounts Committee wrote, “The Department does not know whether it is achieving value for money with the funding it provides to deliver new school places.” It appears that it doesn’t know how to apply its own formula correctly.


My thanks to Barry Wise for drawing my attention to the DfE spreadsheet showing basic need allocations. It can be downloaded here.

*It’s unclear why there should be such a difference between the New Schools Network projected shortfall figures and those of the FT. NSN figures are here for primary and here for secondary. NSN claims that its projections are DfE statistics. I should be grateful if anyone can explain the mismatch.

**The Government expects LAs to contribute towards the cost of new places. The NAO said this expectation was 20% but the average contribution by LAs in 2012/13 had been 34%. This extra contribution was found using other sources of funding including cutting back on routine maintenance of schools. The NAO said this was storing up problems for the future.

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