Education and Skills Funding Agency to move to the Department for Education

Education and Skills Funding Agency to close and its functions to be integrated into the Department for Education by 31 March 2025.

The Secretary of State for Education, Bridget Phillipson, announced on 11 September that the ESFA will close, and its functions transfer to the Department for Education.

Education and Skills Funding Agency (ESFA), an executive agency of the Department for Education, was formed on 1 April 2017 after the merger of two former government agencies. It administers and oversees funding allocated to a mix of educational providers, including maintained schools and early years institutions, academy trusts and special schools.

The step to close and merge it with the core Department aligns with the Government’s focus on raising school standards by centralising all elements of regulation and governance. ESFA’s functions will be undertaken by regional improvement teams working across nine areas.

ESFA’s Chief Executive cites the move as one which will ‘help ensure a fully joined up regulatory environment, and a more cohesive approach to the service we offer to colleges, schools and independent training providers’.

How will the transition work?

• From 1 October 2024, ESFA’s Schools Financial Support and Oversight teams moved to the Regions Group, ahead of the new Regional Improvement Teams launch by January 2025.

• The processing and allocation of funding will continue as currently until the end of the financial year before transitioning into the Department.

• Other core functions will be moved into the Department in March 2025.

What does this mean for schools and colleges?

Ultimately, schools will have a single point of contact for financial management and support, with each regions group being led by a regional director. This set-up bears comparison with local education authorities (formally abolished with remaining duties incorporated into the local authority itself in 2010) and even the school boards of the late Victorian era. It does not alter local authorities’ statutory duties. Little practical information has been shared, for example we do not yet know how the land transactions team has been distributed around the regions or whether it will remain a central function or how the regions will ensure there are fair and consistent approaches across the country. Whether this improves efficiencies is yet to be seen, but the Government will be hoping this is a positive step as they focus on delivering their mission: high and rising standards for every child.