As Noblegiraffe says, the algorithm doesn't use FFT or any other socioeconomic data. The problem is that Ofqual went down a route that tried to get too precise and, as a result, was unfair in a number of ways. They should have simply looked at the average points score for the school and moderated the grades as necessary to bring this year broadly into line with what would be expected based on the previous performance of the school and the pupils - that is what I thought they were doing. This would have used both the predicted grades and the rank order to produce the final grades. Whilst that would still have meant some pupils getting a higher or lower grade than they would have achieved had the exams taken place, it would have been a lot fairer than what has actually happened.
The problem is that Ofqual tried to predict the actual grade profile that the school would achieve, i.e. how many pupils would achieve an A, how many an A and so on. They then ignored the predicted grades and used the order in which pupils had been ranked by the school to determine the grades awarded. So, for example, if the algorithm said your school would have two pupils with an A, the two pupils ranked top would get an A* and no-one else would, regardless of predicted grades. This was unfair in several ways.
It couldn't handle outliers. So, for example, if you were a high performing pupil, on course to achieve an A*, but you attended a poorly performing school, the algorithm might say that you couldn't possibly get higher than a B. Equally, at the other end of the scale, if the algorithm predicted that two pupils would get a U, the bottom two pupils would be awarded a U even if they were actually on course for a C.
They knew that their statistical model would break down if there were too few students. They dealt with that by simply awarding the predicted grades without any form of moderation when a school had a small number of students entering a particular subject. This favoured independent schools as they tend to have small classes. It also favoured students in less popular subjects - if you studied classical Greek, for example, you were likely to get your predicted grade regardless of the school you attended.
I do not understand why they didn't keep it simple and use the average points scores. That would have brought predicted grades fully into the process for everyone and would have been much fairer in my view.