The IFS’s verdict on the Pupil Premium

At the start of this week details of the Pupil Premium to help the education of the most disadvantaged children were published. The Institute for Fiscal Studies (IFS) has now run its eye over those details and come up with its verdict:

Pupil premium: simple and transparent financial incentive

The Government’s chosen pupil premium is simple, amounting to £430 per pupil eligible for free school meals no matter which local authority children live in. The Government originally proposed a pupil premium that would have varied in generosity across local authorities, been relatively complex to understand, and gone against the Government’s stated aim of evening out differences in funding for deprived pupils. In a welcome move, the actual pupil premium announced this week will be much simpler and more transparent, potentially sharpening the financial incentives generated by the pupil premium.

BlackboardWelcoming simplicity over giving extra support to particular parts of the country is more than a mere technical evaluation, highlighting how the IFS’s views on topics quickly stray into areas of political debate – even if in this case, I think they are right about the importance of simplicity, a much under-rated feature of policies.

The IFS also look at the change in funding levels, with more pupils qualifying for the Pupil Premium than previously planned but the payment per head reduced as a result:

The pupil premium is lower than expected. The main reason given is that the Department for Education are now expecting a large increase in the number of children registered for free school meals, from 17.4% of pupils in January 2010 to about 20% in January 2011 (it is the number of pupils registered with their school for free school meals on 20 January 2011 that will determine precise allocations of pupil premium funding in 2011-12). This 15% increase in children registered for free school meals is significantly larger than has taken place in recent years, and is expected to arise through the stronger financial incentive generated by the pupil premium for schools to ensure all pupils entitled to free school meals are indeed registered as such with the school (i.e. the increase is amongst children in households with incomes low enough to qualify for free school meals, but who are simply not registered at present).

Getting more children who are already in theory entitled to free school meals registered for them sounds like it may be a helpful knock-on result of the policy, though file away this explanation as there is a fair chance an increase in the number of children will at some point be quoted as if it is bad news rather than a result of a welcome increase in take-up.

You can read the full IFS policy note here.

Note: the reliability or otherwise of the IFS’s evaluations was the subject of a series of posts earlier this year (see our IFS page), though the main issues discussed in those posts are not relevant to this Pupil Premium analysis.

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40 Comments

  • It’s worth noting that the DfE confirmed this week that the schools budget is now projected to fall in real terms across the Parliament – even incorporating the Pupil Premium.

    http://www.bbc.co.uk/news/education-11983026

  • Mark (not Pack) is right.

    Worse news is within the body of the IFS report:
    - with the projected 15% increase in Free School meals claimants, school budgets will be cut by 0.75%
    - if this doesn’t happen - the cut rises to 1.0%
    - 1 in 6 pupils will see a 2% cut in their funding
    - only 1 in 4 pupils will see a real-terms increase
    - the increase in FSM registrations must happen by Jan 20th 2011. This is notoriously difficult – as there is a stigma attached to FSM registration that many parents do not want to face – again flying the face of Coalition orthodxy which is “we’re all benefit scroungers”
    - If the FSM regs are lower – the Pupil Premium will be lower

    All in all – the devil is in the detail. And for Lib Dems who campaigned on the PP (foolishly – like me) the policy is more than disappointing – it’s a slap in the face. I campaigned with teaching colleagues on rising school budgets. I now find I helped to cut them.

  • @Prateek – it’s an absolute cut. There was already a real terms cut per pupil even with the original announcement, because pupil numbers are rising. But the new figures show that it’s also a real terms cut to the overall schools budget.

  • The pupil premium is a great idea that has been butchered.

    A real term 0.75% – 1% budget cut as opposed to retention of the real terms budget plus the premium means that a significant number of pupils will miss out. Only some schools will see any true additional money so the impact on children will be pretty insignificant at best and negative in some areas.

    That’s not a total moan at the Lib Dems in Government. I’m pretty sure they have achieved a better settlement than would have been made under the Tories. But let’s not shout from the rooftops that this is a great leap forwards, more a restraining hand slowing the great leap back to schools as they were pre 1997. Labour made numerous mistakes but as a Father of two kids six and eighteen I have seen the changes made by the investment over the ’97 – 2010 period and it has made things better.

  • Stephen W

    Your aggression is misplaced.

    The deficit is not digital. To not agree with the Coalition’s austerity plan is not a denial of the problem – no matter how much the Coalition’s supporters try to paint it as such. The solution to the deficit involves choices and the Coalition’s choices are both wrong to my mind and wilfully misleading – as Miliband proved yesterday as he proved the Coalition’s NHS cash-rise as a hoax.

    The Liberal Democrat party campaigned to win the General Election. Nick Clegg said as much. They campaigned to win on a set of policies that they claimed were fully costed + viable – based on a pretty clear deficit level. The Coalition cry of “but the deficit was worse than we thought” was comprehensively destroyed within a month as the OBR proved the economy was better than they thought.

    I believed in the party and believed in their policies. These have been torn apart day after day. Not winning the election is immaterial. “Don’t make a promise if you can’t keep it” strikes a chord with normal people. Clegg has forgotten this since May 14th. “No more broken promises” he said on his video. How foolish his supporters must feel now.

    I actually understand school budgets as I have run one for many, many years. The simplicity of a funding stream matters nought. The overall funding level does. It will be cut. That is simple.

    The Lib Dems told us the PP would be a real-terms increase on existing budgets – leading to a real-terms cash rise for all. They were wrong – again. I can’t forgive Nick Clegg.

  • Martin Land 16th Dec '10 - 3:48pm

    There seem to be an awful lot of people here who would have benefited from the One-to-One Maths Tuition the Pupil Premium is designed to provide….

  • Sorry Martin Land.

    I don’t get your point. Is it the “the PP is a real-terms cash reduction” people who are wrong or the “PP is a real terms cash injection”?

  • Leviticus18_23 16th Dec '10 - 4:52pm

    So, to summarise… The Government is giving schools more money. But not really as they are actually reducing funding really. Awesome!

    Hands up who else is looking forward to fairer and more progressive control orders…

  • @George – the IFS isn’t directly relevant to the claim that the overall schools budget is being cut in real terms. The reason for the cut, as DfE admits, is that the OBR’s updated inflation forecast means that what was previously projected to be a very small overall real terms rise is now projected to be a real terms cut. It has nothing to do with per-pupil funding.

    This is exactly the same argument that Ed Miliband was using yesterday to point out that on the Government’s own preferred forecast, there’s no longer a projected real terms rise in NHS funding.

  • Squirrel Nutkin 16th Dec '10 - 6:17pm

    Just for clarity, Matt, can you specify when and where and how the LibDems have been labelling all welfare recipient as “spongers and scroungers”?

  • @George Kendall
    “In my opinion, ministers have oversold the pupil premium as extra money. In the context of a £150bn deficit, and a spending review where we were expecting a 10% cut in the education budget, the fact the schools budget is broadly remaining the same is very good news.”

    My point exactly. Now it is how this is sold. If the Lib Dems continue the love in approach to the coalition then we get the current over selling. I believe they have gained significant concessions on school funding. It’s not great but they should shout from the rooftops that they stopped the Tories making large cuts to schools.

    Unfortunately they seem to have fallen into the new liebour trap of putting spin onto everything…

  • To not agree with the Coalition’s austerity plan is not a denial of the problem

    I have not seen many people offering alternatives. All that happens is that after every actual cut someone pops up to say “we accept there muct be cuts in spending -but not this cut.”

    Nobody ever suggests an alternative spending cut or tax rise.

    Apparently the government should save money without ever spending less money on anything.

  • @ Matt

    It seems to have escaped your attention that Iain Duncan Smith is not a Liberal Democrat.

    By the way, if Labour spent even more money here, where would they make even greater cuts than are being made by the coalition instead?

    So far they have opposed:
    1) Higher tuition fees;
    2) Benefit changes;
    3) The current education funding proposals;
    4) Increased VAT.

    So we are talking about tens of billions each year that would need to be cut elsewhere. Or they would be planning to borrow even more. Or they would be planning tens of billions of further tax increases.

    Which is it, exactly, so we can all know why Labour’s plans are so much better than the ones of the current government?

  • George K – We have just had the discussion about the deficit and what it actually means in practical terms. We don’t agree on how necessary it is to “leap into action” immediately on it, but I sense we do agree that there are other ways to choose to deal / not deal with it. My point is that we have had that debate. My issue is with Stephen W and others of his ilk who seem to believe there is no such alternative. May I remind him, that despite Maggie’s dictum “There is no alternative”, there always is. This discussion underlies all the individual policy debates we have here, as the TINA people are determined that any public spending above a bare minimum will cause armageddon. They seem to have forgotten all the lessons learned in the slump of the 1930s, and are determined to condemn many people to penury. As Liberals, we should also be encouraging action such as that of UKUncut, to ensure that tax avoidance by rich individuals such as Philip Green is reversed. Moral and other pressure should be intensified. How can we “all be in this together” without such action?

  • Cuts could have been made that would have brought down spending without all this damage. There’s no will however to look closely at Philip Green’s observations and to save money without cutting jobs or trying to privatise parts of the public sector.

  • It’s not a “premium” if it’s moving money around the existing budget.
    But with the latest report of 900,000 more people to fall into poverty the orange book Thatcherites will be toasting George Osborne tonight.

  • Andrea Gill 17th Dec '10 - 6:42am

    What is particularly interesting is that the IFS think the PP will ensure that schools do their utmost to ensure all eligible pupils are registered for free school meals. That alone is a welcome side effect IMHO.

  • David Allen 17th Dec '10 - 1:09pm

    OK, to have presented the pupil premium as “new money” at the election was over-optimistic. All the parties were wildly over-optimistic at the election. Remember the IFS telling the nation that we were being marginally less dishonest than the other two? We can’t take pride in the way we fought the election, but on issues like the pupil premium at least, nor should we be especially ashamed.

    Far too much is made of this magic phrase “new money”. Basically, there ain’t no such thing. “New money” could mean raiding the health budget or the defence budget in order to pay the pupil premium: “Old money” means raiding other parts of the education budget. Quite why it should be portrayed as morally superior to raid the health budget escapes me.

    “New money” could of course also mean putting up taxes. The horror! Nobody wants to claim that is a good thing, do they? (That is why we don’t charge as much tax as we should do!)

  • @Stephen W

    Getting the deficit down is progressive, by any definition worth a damn, because it doesn’t drown our children in debt and risk pushing us towards an Ireland style catastrophe.

    Pardon?
    Is that not the main argument against the rise in tuition fees where you are drowning our children in debt? The welfare reforms are also pushing our children into poverty along with the sick and disabled being pushed idealogically onto a jobs market where they are unable to and will never find work along with the 19% of 18 – 24 year olds. two and a half milion unemployed and rising. This coalition so ably supported by Lib Dems is supporting this, making people so desperate they wil take any low paid job (and watch for the minimum wage being scrapped) which will benefit the elite who again will make their fortunes on the backs of the poor. This is what you have signed up to. New politics? No, very old politics.

  • @George Kendall, efficiency savings and there are many the public sector could do with, will create savings year on year, things like the absurd situation where departments spend their budget on anything possible because if they don’t, they’ll have their budget cut next year, this should have been addressed years ago.

    Shopping around for the best deals, most medium to large sized public sector organisations would save money simply by enjoying someone in the back office who shopped around, they’d easily pay back their salary, however back office staff appear to be the scapegoats at the moment.

  • I understand that schools already receive extra funding for social deprivation which is determined by their Local Authourity and is included in its funding formula. I believe that this social deprivation allowance is based on the incidence of of Free School Meals children within an LEA’s area and on other local factors. The allowance varies from LEA to LEA. Is the Pupil Premium to be in addition to this existing funding? Or does it replace it? Can any councillor who is an LEA member enlighten me, please?

  • It does kind of make a mockery of the policy by asking those in receipt welfare to sign on the FSM registration especially after all the “welfare scroungers” we hear from the coalition government…

    Was this the PP Liberal Democrats envisaged, I am quite certain this is not what the voters envisaged for PP… ah well Liberal Democrats only have 57 seats and you did your best.
    Didn’t you?

    I am sure the electorate will understand, you did your best, oh I forgot you are a coalition government, I wonder if Conservatives have to say we only had, nope, I am sure I have not heard that.

    90% of conservative policy, by god, you must be proud.

    All said and done, you did your best….

    Perception is a funny thing at times.

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