THE BLOG

'Fair Funding' for Schools? Don't Rob Peter to Pay Paul

09/02/2016 10:27 GMT | Updated 08/02/2017 10:12 GMT

The Conservative manifesto commitment to establish a National Funding Formula for schools was confirmed by Chancellor George Osborne in last year's Comprehensive Spending Review. This commitment, dubbed "Fair Funding", promises to iron out the geographical differences in pupil funding that exist across the UK by taking money from those authorities currently receiving the most and redistributing it to those receiving the least.

It's an appealing notion. If the budget for pupils is limited, surely it ought to be shared out fairly across the country, rather than concentrated in some areas at the expense of others? Put like that, it's hard to argue against the government's proposal.

But my question is this: why, exactly, do we have to accept that school funding should be a zero-sum game?

There isn't a never-ending pot of public money, we all know that. There never has been. But what there is is a very large pot of public money - currently around £740bn a year - that Government spends across all sectors. Of that £740bn, an awful lot is spent without us really knowing if it makes any difference at all.

This is not, of course, a phenomenon unique to government - businesses suffer from the same problem. As the famous US entrepreneur John Wanamaker once said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half". Businesses get round this problem by doing exhaustive testing: spending a small amount of money in a certain area, measuring outcomes, and then widening out the test if it works.

When it comes to education, such testing is, for obvious reasons, much harder to perform. But it so happens that, over the last 15 years, London schools have acted as just such a controlled experiment. And the results should give every politician pause.

Currently, London schools get more money per pupil than schools elsewhere in the country. In part, this is because, when the current schools funding system was introduced in 2006, the allocation of money followed historical funding levels that had been committed by Local Authorities. This meant that those councils that had previously chosen to allocate more of their overall budget to schools than to other services (like my own borough of Hammersmith and Fulham and many other inner London boroughs) retained that level of funding when the school budget-setting powers were taken away from them and returned to Whitehall.

As a result, the hypothesis "if you spend more money on schools, you will improve outcomes for children" has been tested - and London schools have delivered an irrefutable answer.

Between 1998 and 2009, under the Labour Government, school funding rose by around 5% a year, and schools in inner London felt the benefit. In 2002, 35% of pupils were getting five A*-C grade GCSEs. By 2013, that figure had almost doubled to 64%. For our most disadvantaged pupils the rise is even starker, more than doubling from 23% in 2002 to 49% in 2013.

These aren't small, year-on-year, marginal increases - these are astonishing improvements in real outcomes - a transformational life-changing impact on hundreds of thousands of young people.

Here in London, we've inadvertently discovered something special: an area where increased government spending has made a major difference to outcomes. And not just any outcomes. What could be a better use of public money than investing in improved educational outcomes for the young? It's not just the right thing to do because it ensures equal opportunities for every young person, regardless of their background - it's also the right thing to do for our economy and for our competitiveness as a nation.

As I write, we don't yet know the exact shape that the "fair funding" cuts will take, though figures from the Campaign for Fairer Funding in Education, key proponents of the changes, show that schools in Hammersmith and Fulham could see cuts of at least 10%. The consultation on the issue was due to begin in February. But, as with the decision on a third Heathrow runway, there are rumours that the Government will delay it until after May over fears that the redistribution could impact Zac Goldsmith's Mayoral chances, given that most of the authorities that would lose out are in inner London.

This gives us a breathing space. So I'm pleading with the government to change its mind: don't rob Peter to pay Paul. The astonishing progress made by pupils in London schools demonstrates that raising spending on education - to lift the amount spent on pupils outside of London - would be one of the very best uses of public money, even in times of austerity. Taking money away from our children and young people in London in order to do so would be crazy - and it certainly wouldn't be "fair funding".