THE REFORM OF SCHOOLS FUNDING - SOME CASE-STUDY LESSONS

Since the Education Reform Act of 1988 there has been substantial chan ge in the funding of schools in Britain. Individual schools now have t heir own budgets which are determined by formula, and they have substa ntial freedom to spend their budgets as they wish. They are also entit led to keep any savings which they make, and these are rolled forward to the next financial year. The funding formula for a school is design ed by its local education authority, subject to constraints imposed by central government. More recently a class of self-governing, or grant -maintained, schools has developed with a parallel finding system whic h is also formula based. A new institution, the Funding Agency for Sch ools, has been created to oversee the financing of these schools. In t his paper, which is based on interviews with officers in six local edu cation authorities and on documentation from several others, the autho r assesses these recent changes in the education 'market'. It is concl uded that the market is not working well due to the complexity of the funding arrangements, the institutional arrangements, the inappropriat e incentives offered, and the change in the 'atmosphere' of the educat ion market.