Local authorities have welcomed the increase in Basic Need funding that they receive for the delivery of new school places. However, a recent London Councils survey showed that local authorities are still using other funds to meet the gap between Basic Need allocations and the cost of creating school places. Our analysis reveals that a further £800 million will be required before 2022/23, either through basic need funding or via funding new free schools, in order to meet demand for new places. The Department for Education (DfE) has announced allocations until 2020/21, and local authorities would welcome the opportunity of working with the Department to ensure that the allocations in the two years following that date will meet the shortfall in funding.
The Department for Education (DfE) allocates Basic Need funding to councils for delivery of new school places. London Councils collected individual project data from 19 boroughs, which is submitted to the DfE as part of the school capacity survey (SCAP). The amount of Basic Need allocated to boroughs has significantly increased in recent years. However, our data shows that the cost per place provided through Basic Need still does not meet the actual cost of providing new places.
|Cost per place||Basic need funding rates (London, 2018-19)|
|Primary||£22,491||£16,495 - £17,577|
|Secondary||£27,336||£21,444 - £22,850|
Across all projects with delivery dates between 2010/11 and 2022/23, Basic Need funding only covered 70 per cent of actual costs. Boroughs have therefore had to find alternative sources of funding, predominantly through using their own funds. In total, £335 million of council funding was used to provide new places between 2010/11 and 2022/23 across 19 boroughs, equivalent to an average of £26 million per year.
Overall cost per place and funding shortfall
Combining the cost per place analysis with the shortfall predictions in the previous chapter, it is possible to estimate the amount of funding required in London over the next five years. Between 2018/19 and 2022/23, London requires an estimated £1.2 billion to meet the shortfall in mainstream school places.
Basic Need allocation; of these, 13 boroughs are predicting a shortfall in primary and/ or secondary in that year. London boroughs will receive around £330 million through Basic Need between 2018/19 and 2020/21. A further £850 million of funding will therefore be required between 2018/19 and 2022/23 to meet the shortfall. This could be through the Basic Need grant itself or through the creation of new free schools in areas of demand, including free schools already announced under Wave 11 and Wave 12 (for which funding data has not yet been made available).