18/11/2011 02:11 GMT | Updated 17/01/2012 05:12 GMT

Michael Gove's Schools Funding Revamp 'Winners And Losers'

Government plans to overhaul education funding could boost the budgets of some schools, while others see theirs slashed, a new study suggests.

Under the current system, most school funding goes directly to local authorities who decide how to share it out.

Education Secretary Michael Gove has announced proposals to switch to a new system in which each school's funding is calculated according to one nationally set formula, in a bid to make the process more consistent and transparent.

However a new research note by the Institute for Fiscal Studies (IFS) suggests that any changes to funding could create "winners and losers".

The report looks at different options for a national funding formula, such as setting a fixed amount of money for all pupils, possibly with different levels for primary and secondary schools, including extra cash for poor students, and other factors such as additional funding for schools in high-cost areas to recruit teachers.

It concludes that even if the formula is kept as simple as possible, to minimise disruption to schools, around 15% of schools would face cuts of 10% or more compared with the current system, while around one in 10 would see their budgets rise by 10% or more.

The report says: "Whatever formula is chosen, it will lead to a large number of winners and losers relative to existing policy. This is an inevitable consequence of replacing the current system, where funding levels can be based on myriad historical and local factors, by a simpler version that seeks to make funding more transparent and consistent across the country."

The authors warn that a new system should be introduced over a long period, and that any move of less than a decade "will involve significant, sustained losses for some schools". A changeover of six years would leave some schools facing annual cash-terms cuts of up to 5%, it says.

A Department for Education spokesman said: "The IFS agrees that maintaining the current funding system is undesirable and without it school funding may become less transparent and less related to education needs over time. We want to make it fairer, simpler and more transparent."

He added: "The introduction of a new formula would inevitably mean that some schools would receive more funding and some would receive less. We would, however, put in place transitional arrangements to ensure that schools do not experience sharp changes to their budgets."