Top-ups to the schools budget and faster-than-expected falls in
pupil numbers mean that school funding per pupil in England is
now expected to grow by 9% in real terms between 202526 and
202829. This is more than twice the 4% growth expected at the
time of last summer's Spending Review.
The financial outlook for schools has therefore improved
significantly. Last week's decision not to claw back savings from
lower employer pension contributions for support staff
effectively adds £500 million to school funding this year. This
comes on top of a £700 million top-up announced already this year
in July (which will rise to £1.1 billion from next year) to help
meet higher-than-expected teacher pay costs. We expect funding
per pupil to grow faster than school costs in each year to
202829, reversing the squeeze seen in recent years.
This is the tenth time in the past decade that governments have
topped up the schools budget outside the spending review process.
In total, these top-ups have increased the annual schools budget
by around £9 billion (13% of the current budget). This is not a
good way to make funding decisions: repeated changes make it
harder for schools to plan their budgets effectively, while
allowing government to postpone the difficult trade-offs involved
in setting public spending levels.
Per-pupil spending has also been pushed up by
faster-than-expected falls in pupil numbers. Pupil numbers are
now expected to fall by 400,000 (5%) between 202526 and 202829,
compared with a 3% fall previously expected. While this will push
up average funding per pupil, schools where pupil headcount is
falling particularly fast could see their total funding fall, and
will need to reduce their overall costs.
These are among the conclusions of a new IFS report, The outlook
on school funding in England', published today, and funded by the
Nuffield Foundation. This provides our latest projections for
school funding and costs in England.
Key findings include:
-
Schools are now in a better position to meet
costs. We project 5% growth in cash-terms
per-pupil funding this year (202627), compared with 3% growth
in costs per head in the same year. We expect funding
growth to exceed cost growth through to 202829,
reversing the squeeze seen in recent years.
-
However, rising demand for special educational needs
and disabilities (SEND) support will continue to absorb a
substantial share of the increase in funding. The
government has allocated an additional £3.5 billion from the
schools budget for SEND by 202829. Stripping this out,
mainstream school funding per pupil is expected to rise by
around 3% in real terms over the period.
-
Policy changes mean schools will also need to adapt
their workforce. Reforms to the SEND system mean
schools will have to take on more responsibility for assessment
and provision. The recent review of the curriculum and
assessment proposed that more pupils should be able to take
individual sciences at GCSE level, increasing demand for
teachers in subjects that in recent years have struggled to
meet recruitment targets. A broader pivot towards technical
education routes from age 14 would have further consequences
for the shape of the teacher workforce.
Luke Sibieta, IFS Research Fellow and author
said: School funding per pupil is now expected to
rise by 9% in real terms between 202526 and 202829, more than
twice the growth we expected at last year's Spending Review. This
comes after yet another top-up to the schools budget, the tenth
in a decade, raising questions about the stability of the way
school funding is being set. While a string of spending top-ups
and fast-falling pupil numbers will improve schools' financial
position on average, there remain wider pressures on school
budgets. Rising demand for SEND provision and potential changes
to the curriculum will change what schools are expected to
deliver, requiring them to rethink not just the size of their
workforce, but the mix of staff they need.'
Josh Hillman, Director of Education at the Nuffield
Foundation said: This new research shows that the
headline of rising school funding does not tell the whole story.
Growing demand for SEND support means that much of the additional
investment will be required simply to keep pace. While that
funding is vital, many mainstream schools are still likely to
face continuing financial pressures over the coming years as they
respond to falling pupil numbers and changing patterns of need.'
You can read the full report
under embargo here.
