At the moment, groups putting forwards bids to open free schools – new academies opened from scratch – are finding out whether they have been approved for 2013 opening. This is an opportune moment to take a quick look at this programme.
Last week, I explained part of why the “converter academies” programme is so popular: it usually comes with a cash incentive to join in. But free schools have their own funding wrinkle. This one encourages primary free schools to be smaller than other local schools.
Using the DfE’s formula for free school funding, we can work out how much a primary free school would get in revenue (day-to-day) funding, plotted against how big it is, if it were to open at full capacity in the London borough of Camden in 2012-13.
This is the output of a formula: every primary free school gets a £95,000 payment plus a certain amount per child, which varies from borough to borough. In Camden, once you have counted in the pupil premium, SEN (special educational needs) funding and other funding, each extra child brings in, on average, an extra £5,870.
But the structure of the formula – a lump sum plus a roughly flat per-pupil payment – means that the amount you receive on average falls as the school grows. This is because the £95,000 lump sum (which is the same for all boroughs) gets shared between more and more pupils.