Paltry premium could prove a hollow victory for Clegg

The coalition has finally come clean on the size of the pupil premium. For 2011-12, it will be a mere £430 per pupil, though it will probably increase over the new four years to over £1700 a year, less than the £2500 originally envisaged by the Liberal Democrats. The premium will be paid to pupils whose parents earn less than £16,000 a year, and will not initially be weighted, so it will be on top of existing core budgets. But Danny Alexander was mistaken on Marr to imagine that the premium will make much difference in the schools that receive it.

Here's why. At the same time as the Government is introducing the premium in April, it is also making a whole series of other changes to school funding. First, it is scrapping specialist schools cash and funding for sports partnerships. That alone is worth £129 a year to every pupil in over 90% of secondary schools, not just the minority with low family incomes. Then it is likely that a series of other grants for standards will also go, worth significantly more per pupil. Finally, while it is true that salaries will be frozen next year, schools will still face the in-year costs of this year's settlement which runs from September 2010, the increase in National Insurance rates and the cost of incremental pay drift.

More importantly, while the government has removed lots of grants it is not giving them to schools to spend as they choose - a freedom they pretty much enjoy as it is - instead it is redistributing less of the cash to local authorities to allocate according to their own formulae, which will see plenty of losers. Specialist school funding, for example, may be part of the Dedicated Schools Grant baseline but there is no guarantee the same schools will get the same amount of cash. Unless any minimum funding guarantee ensures that schools get at least 1% more per pupil - including those grants in the school baseline - and the pupil premium is on top of that there will still be plenty of cries of pain from schools next year. And here's the rub for jittery Conservative and Lib Dem MPs: the decision initially to allocate the pupil premium as a straightforward top up means that the biggest losers are likely to be high-achieving schools in their constituencies, even if they benefit in the longer term from moves to a National Funding Formula.

But that's not all. There will be a double whammy for school sixth formers, particularly those from poorer backgrounds. First there is the indefensible decision to scrap the Education Maintenance Allowance, which provides 16 and 17 year-olds from families earning below £20,000 a year with £30 a week in term time - around £1200 a year or nearly four times the pupil premium - to pay for travel, books and equipment while they are studying for A levels or BTECs in school or college. There is no pupil premium for poorer sixth formers. For schools there is also a move to equalise college and school sixth form funding (reducing the latter by £200 a year) which will add further to a picture of widespread school cuts next year. Indeed scrapping the EMA in 2011-12 covers most of the first year pupil premium costs: a case of robbing one group of poorer pupils to pay another.

So, Danny Alexander was making a huge mistake this morning trying to pretend that schools will not pay for the pupil premium with big cuts. They will, as will older brothers and sisters of those who may get the premium. Michael Gove has already conceded there will some cuts. But because ministers have been trying to underplay them, the shock will be all the greater for coalition MPs next spring. The paltry premium is unlikely to do more than plug some gaps. It will seem a very hollow 'victory' for Nick Clegg at that stage.