Schools run by local authorities have an annual budget which is calculated by formula. The formula used for funding my school is quite easy to understand and its components all seem reasonable, yet it can cause some unexpected problems for an unwary manager.

Most of the funding depends on the number of pupils, each being worth an annual amount according to his or her age. If a comprehensive school has fewer than 750 pupils it is regarded as being small, needing extra money to provide an adequate curriculum. This extra is given as a bonus for each pupil; and tapers to zero as the numbers reach 750.