Can a Pupil Premium work?


 Both the Tories and Liberal Democrats (and Alan Milburn) are keen in principle on the idea of a pupil premium, with funding following the pupil to incentivise good schools to take the most disadvantaged pupils.

It could simultaneously achieve two objectives: focus more resources on schools with poorer pupils; and partly counteract any incentive schools may have to “cream-skim” more affluent or easy to teach pupils.

 Education is an essential component of social mobility, so the better educated you are the more likely you are to be upwardly mobile. And you are more likely to be better educated in a good school than a failing school. So far, so obvious. Two reports out this year have confirmed the links between good education and social mobility . And Social mobility is very much on the political agenda. Indeed, one of the key pillars of Tory attacks on education policy is that the lot of the most disadvantaged pupils, those on free school meals, has not measurably improved over the last twelve years. Today the chances of a child who is eligible for free school meals – roughly the poorest 15% by family income – getting good school qualifications by the age of 16 are less than one-third of those for better-off classmates. The latest statistics show that 26.9 per cent of students eligible for FSM achieved five A* to C GCSE grades including maths and English compared to 54.4 per cent of those not eligible. The gap of 27.5 percentage points has decreased slightly from 27.8 last year and 28.1 in 2006 but statisticians will tell you that this change is ‘not statistically significant’. .It is also the case that the better state schools have less disadvantaged pupils. Pupils on FSM are less likely to secure good jobs and entry to the professions.

So, how to get the most disadvantaged children into the better performing schools is seen as key to improving social mobility and a major challenge for policy makers .

The current system of school funding is not really demand led and if it does help the most disadvantaged it does so in a rather indirect and tortuous way. Nor does it help much to improve equity.

A report from the Institute for Fiscal Studies/CFBT Education Trust (2008) Level playing field? The implications of school funding found that the school funding system is overly complex and lacks transparency .Crucially it found the system didn’t assist the Governments choice or equity agendas. Local authorities only allocate around 40–50% of the extra funding they receive for pupils who are eligible for free school meals towards the schools these pupils attend. In other words, local authorities seem to spread the funding targeted at low-income pupils more widely (i.e. ‘flatten’ it). If local authorities did not flatten extra income in this way, the additional money following a low-income pupil would be roughly 50% higher in secondary schools and more than doubled in primary schools. Under the current system, the amount of funding that schools receive does not respond quickly to changes in their numbers of pupils from deprived backgrounds or with additional educational needs. Bearing in mind that Governments are supposed to use this funding to help equality of opportunity, this is an embarrassing charge.

 Dr John Dunford, general secretary of the Association of School and College Leaders, told SecEd that a “national funding entitlement” should be introduced, to ensure that disadvantaged children in more affluent areas get the same support as those in less well-off parts of the country. He said: “Disadvantaged young people attending school in disadvantaged areas do better than disadvantaged children elsewhere. All political parties are rightly looking at the distribution of funding for disadvantage.” “Their aim should be to use information on disadvantage at pupil level, not local authority level, and target additional funding wherever disadvantaged children are at school or college,” he added.

The think tank Policy Exchange found in its School Funding and Social Justice Report (2008) that Ministers talk of funding in terms of “per pupil” amounts but in reality funding for community schools, and voluntary- controlled schools, remains in the control of their LA and so they rarely receive the per capita sum announced by the Treasury. Councils make local decisions based upon their own staffing and overhead costs and other developmental priorities, frequently leading to delays for the schools and uncertainty in their annual budget settlement. Self evidently a system that does not have funding that relates to the pupil will not be responsive to demand. Policy Exchange proposed in its report a new Funding Formula. Under this new formula, all schools would receive per-pupil funding direct from the government and local authority activities would be funded separately. The per-pupil amount would consist of three elements: a base element (different for secondary and primary schools), an area cost adjustment dependent on the cost of hiring staff in different areas, and, if applicable, a “pupil premium” – additional funding for pupils coming from deprived communities. The introduction of a “pupil premium” would help by attaching extra money to students from deprived backgrounds. This would mean that schools that take a large numbers of such students would be better off, giving them extra cash to educate harder to teach children. Additionally, schools in wealthier areas would have an incentive to broaden their admissions to attract premium pupils. Providers of “free schools” would also have an incentive to open in more disadvantaged areas.

 But how much would a Premium amount to?

Policy Exchange suggested a pupil premium worth between £500 and £3,000 per student for the most deprived communities. It would cost £4.6 billion to implement. This money could come, it suggested, from the existing education budget by rolling central grants (like the School Standards Grant) into one revenue payment and scrapping wasteful programmes like the Education Maintenance Allowance and the National Challenge. The premium Policy Exchange recommended should be allocated using “geodemographic” analysis of postcodes as this takes into account cultural as well as financial deprivation.

 The Institute for Fiscal Studies point out that American researchers at the University of California (Equalizing Opportunity for Racial and Socio Economic Groups in the US through Educational Finance Reform 2005) used estimates of the effect of spending on the attainment of black children to say that nine times as much needed to be spent on black children to get their attainment up to the national average. Closing ethnic gaps and gaps in attainment by socio-economic status might not be directly comparable, but if the cost for getting the attainment of poor children up to the national average were just five times the current spending per pupil, the pupil premium would need to be set at err… over £25,000. But the Liberal Democrats and Policy Exchange (the latter regarded as close to Tory thinking -Michael Gove was a co-founder after all) propose a premium in the range of £3,000.

So the devil seems to be in the detail.

In principle the idea of a Pupil Premium is sound.

 But try putting a figure on it and it becomes very difficult. You have to get the sums right. The Premium must act as a genuine incentive to schools otherwise it is wasted money. Get it wrong and you could be needlessly diverting resources from other key areas. The big question of course is with public finances being what they are-can we actually afford it? If not there is certainly much scope for reforming our schools funding system to better target our most disadvantaged pupils and to improve equity.


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