Conor Ryan: The pupil premium won't work unless it's new cash

The coalition has made improving social mobility one of its central planks. The new Education Secretary, Michael Gove, has declared he wants to close the gap in results between the richest and poorest. Paying schools more for each disadvantaged pupil on their rolls is their big idea to achieve it.

A pupil premium is not a bad idea. As the Lib Dems envisaged it in their manifesto, it would provide schools with an extra £2,400 a year for every poor pupil on their rolls, at a total cost of £2.5bn. While the coalition agreement endorsed a "significant" premium, it declined to specify a sum, though it did promise it would be funded from outside the schools budget.

But unless a pupil premium is wholly new money, is linked to strong outcome measures related to social mobility and to a much more equitable approach to school admissions, it is unlikely to achieve its objectives.

We must probably await the autumn spending review to see how the premium is to be funded. Ministers will need to rebuff Treasury efforts to get them to raid pots like the Standards Fund to pay for it. Schools already facing tight budgets will not see the premium as significant extra resources if it simply replaces existing money, even if it is on top of their general budget.

The coalition plans to move to a national funding formula. As it does so, because Labour increased school budgets fastest in poorer areas over the last 13 years, the biggest long-term beneficiaries of the premium are likely to be schools in Tory and Lib Dem constituencies in the shires, places where schools with small numbers of pupils on free school meals receive no extra funding for those pupils.

Yet money is not in itself a panacea. During Labour's term, while some indicators of social mobility improved, according to research by the Institute for Social and Economic Research at the University of Essex, there is still a fourfold achievement gap between children of graduates and non-graduates.

Labour's big improvements occurred specifically through programmes with tough targets, like inner city academies replacing failing schools, or the London Challenge initiative where the best heads helped weaker ones. They did not occur uniformly, or simply because they spent more money on schools in disadvantaged communities.

If the coalition is serious about narrowing the gap, it has to do more than put its money where its mouth is. Schools must say how they'll use the extra cash to narrow the gap. In this era of greater freedom, nobody would suggest that ministers should specify how this must be done (and there is no evidence that cutting average class sizes, as Nick Clegg has suggested, would make much difference). Schools should decide how to spend the premium, but they should publish their proposals in their development plan, which should be published online.

They should also be held accountable. The Government should publish information about variations between pupils of different backgrounds within schools in the annual league tables, and ensure they are considered by Ofsted. They should make clear to schools that don't reduce these variations over time that they'll lose the premium. Unless there is a consequence to failure, exhortation will not be adequate.

But that's not enough. Ministers want schools to seek out pupils from poorer backgrounds and believe that the premium will be enough to persuade them to do so. If schools have been blatantly fiddling their admissions criteria, this may indeed by the case.

Separate research by the University of Buckingham for the Sutton Trust has shown that the country's top 164 comprehensive schools took only 9 per cent of children from income-deprived homes, although they drew pupils from areas where about 20 per cent were income-deprived. It may be that these schools are getting around the tough admissions code and the schools adjudicators. More likely they're using proximity and sibling rules to decide who gets in. Poorer families are losing out.

In most cases, if schools are applying admissions criteria based on how near pupils live to the school or the numbers of brothers and sisters there, they have little scope for manoeuvre. Unless these schools allocate a significant proportion of their places through a lottery open to all – with practical advice to poorer parents on how to apply – or through fair banding across all abilities, the pupil premium will do little to enable poorer children to attend the best schools.

And at a time of increasing austerity in the public services, even the Liberal Democrat Chief Secretary, Danny Alexander, might himself start to question whether it is really delivering value for money.

The writer, a former senior education adviser to Tony Blair and David Blunkett, blogs at http://conorfryan.blogspot.com