Teachers and school leaders have broadly welcomed chancellor Rachel Reeves’ settlement for education, including its £1.3bn real-terms increase in per-pupil funding for 2025/26 and additional £1bn for high-needs SEND.
However, there is also widespread acknowledgement that this Budget on its own will be nowhere near enough to reverse the impact of “14 years of chronic underfunding”.
The Budget covers 2025/26. In spring, the government will report on the results of its spending review and set budgets for at least the next three years. For now, the settlement for the Department for Education includes:
- An increase in funding for the core schools budget of £2.3bn, including £1bn towards SEND funding.
- Capital funding of £6.7bn for 2025/26, which the Treasury says is a real-terms increase of 19% from 2024/25. This includes £1.4bn for the School Rebuilding Programme, an increase of £550m on this year, and £2bn for school maintenance.
- A total of £30m for the roll-out of free breakfast clubs in “thousands of primary schools in England”.
- An additional £300m for further education.
- An additional £1.8bn to “continue the expansion of government-funded childcare”.
Writing in Headteacher Update this week, Pepe Di’Iasio, general secretary of the Association of School and College Leaders (ASCL), says that this is a government “which is clearly trying to fix the problems” and reminds us that “we had Budgets under the previous government where education was scarcely mentioned at all”.
However, he also warns that there is a lot of small print to take into consideration when analysing the impact of the Budget.
Funding for SEND
When it comes to SEND, councils will have freedom to decide how they spend the extra £1bn, but Treasury documents predict that £865m of this money will be spent on reducing high needs deficits.
And this comes in the context of a National Audit Office report last month estimating that 43% of local authorities will have deficits “exceeding or close to their reserves” by March 2026.
The NAO predicts a cumulative SEND high needs deficit of between £4.3bn and £4.9bn by March 2026 (NAO, 2024).
Commenting on the Budget, Jon Andrews, head of analysis at the Education Policy Institute, emphasised that £1bn represents a quarter of the deficits that the NAO estimates that local authorities have accumulated.
He added: “Given the perilous state of local authority budgets, clarity on how that funding will be allocated or what it is intended for is now urgently required. If the situation for local authorities has not been fundamentally changed, then we still risk services for our most vulnerable being cut.”
Funding for school buildings
While increased capital funding is welcome, the NAO has already reported that about 24,000 school buildings are beyond their design life, making this investment a relative drop in the ocean.
Julia Harnden, ASCL’s funding specialist, emphasised that the additional capital funding “does not cover the shortfall that already exists”.
She added: “The investment in the School Rebuilding Programme only puts us back on track to meet the previous government’s unambitious target of rebuilding 50 schools a year.”
Daniel Kebede, general secretary of the National Education Union, said it was a “small dent in the £40bn cumulative cut to school capital funding since 2010”.
He added: “We are still decades away from a full rejuvenation of the school estate.”
Leora Cruddas, chief executive at the Confederation of School Trusts, said: "The 19% increase in the Department for Education's capital budget – including an additional £300m for school maintenance, around £15,000 per school – is a small step towards addressing the long-term backlog in repairs after years of falling investment in school buildings, but leaves much more to be done."
Funding for breakfast clubs
The investment in free breakfast clubs in primary schools represents “only a fraction” of Labour’s manifesto commitment, in which they said it would fund “free breakfast clubs in every primary school, accessible to all children”.
Mr Kebede said this was “a start” but urged the government to be more ambitious and introduce “universal free school meals, beginning with primary”.
National Insurance
Schools will be hit by the Budget’s 1.2% increase in employer National Insurance contributions. We are now waiting to see if the DfE will be given any additional funding to help schools cover these costs – which it has been estimated could be as much as £200m across the school system.
Ms Harden immediately called for the increased cost of contributions to be “covered in full”. She said: “It is imperative that the increased cost of employer National Insurance contributions are covered in full for schools and colleges and we are seeking clarification on this point.”
Commentary
Paul Whiteman, general secretary of the National Association of Head Teachers, said the government has to reverse “14 years of chronic underfunding”.
He continued: “(This Budget) is a start based on good intentions, but it must be backed up by further ambition and investment in the multi-year spending review due next spring.”
He added that the rise in core funding and extra money for SEND “must reach schools quickly and be followed by further investment and reform in future years”.
Mr Kebede agreed that the “welcome” funding injection “falls short of what is needed to rebuild education”. He added: “Awarding just £1.3bn for mainstream schools will put them in a very difficult position. Given the scale of the teacher recruitment and retention crisis and the historic low pay of support staff, this level of funding is insufficient.”
Ms Harnden concluded: “Schools and colleges have suffered from years of underinvestment and the additional funding for the core schools budget and further education will only go a small way to addressing the damage that has been done. (This) Budget must just be a starting point for a programme of investment in education and the other public services that have been so badly neglected in the recent past.”
- HM Treasury: Autumn Budget, 2024: www.gov.uk/government/publications/autumn-budget-2024
- NAO: Support for children and young people with SEN, 2024: www.nao.org.uk/reports/support-for-children-and-young-people-with-special-educational-needs/