My Lords, I start by responding to Amendment 57 in the name of the noble Lord, Lord Hunt, on the importance of local flexibility within the direct national funding formula. The legislative framework in Part 2 of the Bill already allows for local authorities to determine and administer certain aspects of school funding. Clause 37 will require local authorities to determine supplementary allocations for each of their local schools if the Secretary of State provides for this in regulations. In practice, this means that schools will be able to receive top-ups to their budget, calculated by the local authority, in addition to the department’s national funding formula. This provides flexibility for local authorities to retain a role in the allocation of funding.
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There has been extensive consultation on the factors and factor values to be used in the national funding formula, and the vast majority of funding will be
allocated nationally. However, our recent consultation highlighted some limited areas where local authorities may be best placed to make determinations. This is because they have access to better information or relevant legal or contractual obligations, for example with new and growing schools or with schools with PFI contracts. Under Clause 37, local authorities could continue to determine funding allocations for both those areas. We will of course consult in advance of introducing locally-determined supplementary funding, as with any other major changes to the formula.
I turn to Amendment 58, in the name of the noble Lord, Lord Storey, on free school meals. He referred to my remarks in the debate last night; obviously, I stand by those remarks. Under the benefits-related criteria, the department provides for free, healthy school lunches for around 1.9 million children. This equates to 22.5% of all pupils, up from 15% in 2015, due in part to the generous protections given as universal credit is rolled out. Just to reiterate what those protections are, all children eligible for a free meal at the point the threshold was indicated, and all who become eligible as universal credit rolls out, will continue to receive free school meals even if their household circumstances significantly improve, moving them above the earnings threshold. After the protections end, if they are still in school these children will continue to be protected until the end of their phase of education, whether that be primary or secondary.
Under this Government, eligibility has been extended to more children than under any previous Government, including to children with no recourse to public funds. To deliver this provision, we have increased the funding allocated through the free school meals factor in the national funding formula to £470 per eligible pupil this year. Core funding for mainstream schools is also increasing by £2.5 billion in 2022-23, compared to last year. A further 1.25 million infants are supported through the universal infant free school meal policy, meaning that 37.5% of pupils are provided with a free lunch, at a cost of over £1 billion a year.
Extending free school meals to all families on universal credit would carry a significant financial cost and, taken together with universal infant free school meals, result in around half of pupils being eligible for a free meal, some in households with incomes exceeding £40,000 per year. This would have substantial knock-on impacts for the affordability of linked provisions such as the pupil premium.
Noble Lords are rightly focused on the current cost of living pressures. As your Lordships are aware, we have announced £37 billion of support for the cost of living this year, with targeted support to the poorest households. Millions of the most vulnerable households will received at least £1,200 in support this year, with all households receiving at least £400 to help with their bills.
I absolutely respect the noble Lord and know he brings this amendment in good faith, but I hope he will also acknowledge that the Government have made a very generous, important and substantial move on support for vulnerable families through the £37 billion package, as opposed to through a direct intervention such as this. The purpose is closely aligned.
It is right that support is aimed at the most disadvantaged: those who are out of work or on the lowest incomes. We will continue to keep free school meal eligibility under review to make sure that we are supporting those who most need those meals.
I turn to Amendment 59 from the noble Lord, Lord Storey, on pupil premium funding. We have increased total pupil premium funding to over £2.6 billion this year, up by 2.7% from last year. The support provided through the pupil premium sits alongside an even larger sum of £6.7 billion for pupils with additional needs, as allocated through the schools national funding formula. The Government are investing an additional £1 billion in a recovery premium over the next two academic years to support disadvantaged pupils following disruption from Covid-19. The Government are already investing very significantly to support disadvantaged pupils. We keep this under review every year to make sure that we support these pupils in the most effective way.
The annual considerations need to take into account a wide variety of factors. Of course the general rate of inflation is relevant, but so too are other considerations, including the specific cost pressures that schools face; the changing roles, responsibilities and expectations on schools; the most appropriate and targeted definition of disadvantage; and the total funding available for schools in a year and the balance with other priorities for that funding. These need to be considered in the round, and this amendment would restrict our and future Government’s ability to do that.
Amendment 60, also in the name of the noble Lord, Lord Storey, is on budget adjustments for excluded pupils. Clause 42 aims to provide a continuation of the existing policy. When a pupil is excluded from a mainstream school, funding follows that pupil from the school that has excluded them to the new school or alternative provision. Therefore, this legislation already allows local authorities to make budget additions for pupils permanently excluded who have been placed in alternative provision by the authority. The regulations would specify how such budget additions are calculated. The amendment also seeks that any education, health and care plans also transfer with a permanently excluded child to new alternative provision. I assure the noble Lord that this is already required under existing special educational needs legislation and as outlined in the EHCP code of practice.
More generally, the recent SEND and AP Green Paper proposed a number of changes to provision for permanently excluded pupils and those who cannot be found a place immediately in another school. This includes local authorities committing to long-term funding for alternative provision schools. We will be looking carefully at the consultation responses to see what changes are needed. Future local arrangements for the funding of permanently excluded pupils placed in alternative provision need to be developed with these responses in mind.
I hope the noble Lord, Lord Hunt, will withdraw his amendment and that other noble Lords will not move theirs.