2.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2022 2.2 The national funding formula (NFF) distributes funding for schools fairly, based on the needs of schools and their pupils. This includes targeted funding for schools which have higher numbers of pupils from disadvantaged backgrounds and other additional needs. The introduction of the NFF fixed a broken system that had not reflected changes in need since the early 2000s. The shifting pattern of deprivation funding seen in the NFF significantly reflects schools’ funding catching up with changes in the pattern of deprivation since that time. The lower than average increases in funding in London, for example, reflect significant decreases in deprivation levels from 2005 to 2017, whereas areas where deprivation levels increased over this period have benefited from larger than average funding increases through the NFF. 2.3 The department has recently published a consultation on Completing our Reforms to the NFF which proposes that the department will move to allocating funding directly to schools on the basis of a single, national formula. 2.4 While this is the department’s long-term goal, it is a significant change that requires careful implementation. In the consultation, the department proposed taking a gradual approach to transition through requiring local authority funding formulae to move closer to the NFF from 2023-24. The department will publish an analysis of the impact of this transitional step on individual schools and different types of schools. The department will publish the first such analysis in July 2022; this analysis will be updated annually for each subsequent transitional year.