ESFA Functions to Merge into the Department for Education by March 2025

The Education and Skills Funding Agency (ESFA) will officially close in March 2025, with its key functions integrated into the Department for Education (DfE). This move is designed to strengthen the role of financial management in school improvement, providing a streamlined, centralised approach to funding and regulation across the education sector.

Background and Transition Timeline

Since its establishment in 2017, the ESFA has overseen the allocation of funding for education and skills, from early years through to adult learning. Under the new structure, this crucial role will continue, but from within the Department for Education. The aim is to create a more cohesive system by offering educational institutions a single point of contact for financial management, regulatory oversight, and support.

As part of the transition, several changes will take effect:

•From October 2024, the ESFA’s Schools Financial Support and Oversight (SFSO) teams will move to the DfE’s Regions Group. This shift aligns with the creation of Regional Improvement Teams in early 2025, which will focus on raising school standards, especially in underperforming schools.
•By March 2025, all remaining ESFA functions will be moved into the DfE’s Operations and Infrastructure Group, consolidating the agency’s centres of excellence with related functions in the department.

Strategic Goals and Leadership Perspectives

This reorganisation aligns with the government’s broader educational goals, ensuring financial stability is at the core of efforts to enhance school performance. Strong financial oversight is viewed as critical to achieving higher educational standards for all students.

Susan Acland-Hood, Permanent Secretary at the DfE, emphasised that this transition will build on the achievements of the ESFA, fostering a more unified and accountable system. She noted, "This move allows for a single, joined-up approach to funding and regulation, helping us drive school improvement more effectively."

David Withey, Chief Executive of the ESFA, highlighted the importance of maintaining service excellence during the transition. He stated, “The ESFA has consistently delivered accurate and timely funding, offering critical support to education providers facing financial stress. Our people have been central to this success, and I’m confident that this high standard will continue as we integrate into the Department.”

New Regional Improvement Teams

The introduction of Regional Improvement Teams is a key aspect of the government’s plan to raise school standards. These teams, operational by early 2025, will focus on addressing weaknesses in struggling schools, ensuring rapid intervention and support. This single-regulator model will bring governance, accountability, and improvement efforts under one umbrella, streamlining the response to underperformance.

Looking Ahead

As the transition progresses, the Department for Education will work closely with stakeholders and staff to ensure a smooth shift of functions. The new structure aims to deliver on the government’s educational priorities while preserving the expertise and high-quality service delivery established by the ESFA.