Premium payments proposals unlikely to succeed

The Institute for Fiscal Studies (IFS) said yesterday that Liberal Democrat and Conservative proposals to introduce a pupil premium – attaching more funding to those from disadvantaged backgrounds – may lead to a small reduction in covert selection of pupils, but was unlikely to significantly reduce social segregation between schools.

Under the scheme, the pupil premium would provide a fixed extra amount to state schools for each pupil from a disadvantaged background that they admitted every year.

The IFS report said there was some evidence that extra resources for disadvantaged pupils would reduce the attainment gap to a "modest" degree but this would depend on how those resources were used by schools.

New schools may be established in disadvantaged areas as a result of the policy, the think-tank said, but without allowing schools to seek to make profits it was unlikely that the UK would see the same level of expansion that other countries have seen.

The study examined the financial consequences for schools of the different methods of implementing a school premium, including Liberal Democrat proposals where the premium would be implemented on top of all existing funding.

This would avoid any school losing its existing funding, the report noted, but the money would have to be found from other sources.

"The gains in terms of extra funding for disadvantaged schools need thus to be set against the impact of the measures required to pay for them," it said.

Luke Sibieta, a co-author of the report and senior research economist at IFS, said: "The key question facing policymakers is: Do the likely gains from implementing a pupil premium – greater levels of funding for deprived schools, a modest reduction in the achievement gap between rich and poor pupils, as well as greater simplicity and transparency – outweigh the potential costs – loss of local discretion and significant levels of cuts to per-pupil funding across some schools?"