How schools are funded

Get a whistle-stop tour of how your school is funded, including what additional streams of funding are available, so you're clear on what elements make up your school finances.

Last reviewed on 10 January 2023See updates
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  1. The national funding formula (NFF)
  2. The general annual grant (GAG)
  3. Mainstream schools additional grant for 2023-24
  4. Other streams of funding

As a governor, you don't need to understand the intricacies of how schools are funded or how funding formulae work. 

However, the board is responsible for financial oversight of the school. This overview will help you understand your school's financial position.

The national funding formula (NFF)

LAs determine your school's core budget using a local funding formula

The government uses the national funding formula (NFF) to work out your school's 'notional' core funding allocation. However, your school's actual allocation is based on a local funding formula from your local authority (LA) – this is the same system as for maintained schools.

But unlike for maintained schools:

  • Your LA will submit its local formula to the Education and Skills Funding Agency (ESFA), so the ESFA can issue academies allocation statements – as explained in the ESFA funding allocation guidance (in the introduction for 2022/23)
  • Your funding allocations are:
    • Paid directly to your trust by the ESFA
    • Based on the academic, rather than financial, year