Accounting for needs? Formula funding in the UK schools sector

Abstract

PurposeThe purpose of this paper is to analyse whether the development of a needs‐based funding formula for resource allocation incorporates the needs of funders or the needs of the service providers.Design/methodology/approachThe paper analyses interview data and documentary evidence gathered from a UK local education authority about the creation of a “needs‐based” formula for sharing resources to schools. It employs and extends a framework developed by Levačić and Ross to evaluate needs‐based formula funding.FindingsAlthough formula funding is purported to be a more objective method of resource allocation, the paper finds that as with other resource allocation methods the power relations between the funder and the service provider impacts on the extent to which service provider needs are incorporated into the funding formula.Research limitations/implicationsThis paper considers only the funding of schools. Further work is needed to investigate formula funding for other public services.Practical implicationsDebates between funders and service providers should be encouraged by policy makers to ensure that allocations based on the funding formula are acceptable to service providers.Originality/valueThe paper provides a useful analysis of a needs‐based funding formula for resource allocation in schools and whether this incorporates the needs of funders or the needs of the service providers.