Schools: Finance
The question
To ask the Secretary of State for Education, whether she plans to revise the funding formula used to allocate the dedicated schools grant in areas which have a high cost of living but low area cost adjustment.
Answered by Catherine McKinnell
The department uses the schools national funding formula (NFF) to distribute core funding for 5 to 16 year-old pupils (reception through to year 11) in mainstream state-funded schools in England.
The area cost adjustment (ACA) means that funding allocations to schools are adjusted to reflect the geographic costs they face. Importantly, because the department uses the hybrid methodology, schools’ funding allocations reflect differences in both general labour market costs and teacher salaries.
The ACA takes into account the four geographical pay bands for teachers, as well as regional variations in the labour market for non-teaching staff.
The department will continue to keep the NFF, including the operation of the ACA, under review for 2026/27 and beyond.
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