Dedicated Schools Grant is changing

One of the main sources of funding for the majority of Academies, The Dedicated Schools Grant (DSG), will change next year as part of plans to modernise the way schools are financed.

The Department for Education has announced that from 2015/2016 DSG funding will be based on pupil characteristics rather than historic levels of spending.

Under the current system funding is handed out by local authorities, who receive a pool of money from the DfE. They then distribute this money using a formula that is decided by school forums, which are made up of representatives from both maintained schools and academies in the area.

This formula is based upon 14 points, which include local deprivation, the number of looked after children and whether the school offers higher-education opportunities. These factors are split into two categories pupil-led and institutional factors, which are weighted as 80 per cent and 20 per cent respectively.

However, from 2015/2016 a number of changes will take place to these factors removing the historical emphasis and focusing more on pupil characteristics.

The most significant change will be to the sparsity element of the school block funding. In 2015/16, this part of the formula will change to being based on pupils’ average distance and the average size of school year groups, rather than average distance and the total number of pupils at the school they attend.

Some smaller schools will also receive up to £50,000 in sparsity funding, which will be decided by the Education Secretary. Schools will also benefit from a minimum funding guarantee, which the schools block part of DSG funding received by a school cannot be reduced by more than 1.5 per cent.

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