The Institute for Fiscal Studies (IFS) has published an analysis highlight huge pressure on school budgets in England (Sibieta, 2024) to help inform the debate in the run-up to the July 4 general election.
In particular, it sets out funding pressures across four key areas, increasing SEN and strain on the high needs budget, the dilapidated state of many school buildings, recruitment and retention challenges and the link to on-going teacher pay demands, and rapid increases in school costs.
This is all set against a background of no growth, in real-terms, to per-pupil funding since 2010.
However, the author of the analysis, Luke Sibieta, a research fellow at the IFS, said that policy-makers in the next Parliament will have access to a potential £3.5bn windfall, which is the amount expected to be saved due to falling rolls.
As SecEd has previously reported, the total number of pupils in state-funded primary and secondary schools is projected to fall from a peak of 7.57 million in 2022/23 to 7.14 million in 2028/29 – a fall of 436,000. Read our report here.
The IFS analysis says that pupil numbers are expected to fall by more than 5% over the course of the next Parliament.
But the temptation might be for politicians to claw-back this money to use elsewhere in government – a question that is could well dominate discussions when the Department for Education reconvenes after the general election.
Mr Sibieta said: “Looking to the coming Parliament, policy-makers are caught between a rock and a hard place. On current plans, many other areas of public service spending appear to be facing cuts. An incoming government might thus be tempted to cut school spending in response to falling pupil numbers.
“Realising such savings could be easier said than done as it would likely require workforce reductions and, perhaps, school closures. This is probably why policy-makers have shied away from making cuts to total school spending in the past.
“There is also a growing list of pressures on school spending, which may become harder to address over time, such as the spiralling cost of SEN provision, real-terms cuts to teacher pay, and a growing backlog of repairs to school buildings.”
The analysis spells out the stark reality facing school budgets – not least four specific challenges:
- SEN and the high needs budget: “The number of pupils with the highest levels of documented SEN increased by over 60% from 220,000 in 2015 to 360,000 in 2022. This was mostly driven by a near-doubling in the number of pupils recorded as having autism, speech and language needs, and social, emotional and mental health needs. This has driven a £3.5bn increase in the high needs budget, which has used up nearly half of the £7.6bn increase in school spending since 2015.”
- Recruitment, retention and teacher pay: “Average teacher pay is 6% lower in real terms than in 2010, and about the same level in real terms as in 2001. In contrast, economy-wide average earnings are due to be about 6% higher in 2024 than in 2010; about 18% higher than in 2001. These declines in teacher pay relative to average earnings may help to explain why teacher recruitment is significantly behind targets and why 1 in 10 teachers currently leave the state sector each year.”
- School buildings: “The three-year average for spending on school buildings up to 2023/24 is about 25% lower in real terms than the three-year average up to 2008/09. The government has allocated about 40% less than its own assessments of how much is needed to ensure school buildings are maintained in a fit state.” Previously, the National Audit Office has estimated that 700,000 students are learning in schools that need major rebuilding or refurbishment work. It says that of the 64,000 or so individual school buildings in England, 38% (around 24,000) are “beyond their estimated initial design life”.
- Rapid increases in school costs: “We estimate that schools’ costs will grow by 4% in 2024 (compared with economy-wide inflation of 1%). This reflects increases in staff pay and rising food and energy costs. This could leave the purchasing power of school budgets about 4% lower than in 2010.”
These challenges come after a period of stagnation in school funding with no growth in per-pupil spending since 2010, the analysis points out.
Between 2010 and 2019, total school spending in England rose by 1% in real terms while pupil numbers grew by 11%, meaning school spending per-pupil fell by 9%. Since 2019, there has been a £6bn (or 11%) real-terms increase in total spending. This has enabled spending per pupil to return to the same real-terms level as in 2010. As the analysis states: “No growth in spending per pupil over 14 years is without precedent in recent history.”
The analysis has been funded by the Nuffield Foundation, whose director of education Josh Hillman urged the next government to keep the money saved by falling pupil rolls in the education system.
He said: “The expected 5% fall in pupil numbers over the next Parliament provides a tremendous opportunity for an incoming government to use any savings to address major challenges hampering schools, such as rapidly growing rates of SEN, persistent effects of the pandemic period on educational opportunity and outcomes, and teacher supply problems in a number of specialist subjects.”
Commenting on the analysis, Pepe Di’Iasio, general secretary of the Association of School and College Leaders, added: “It’s shameful that there has been no growth in funding per pupil over 14 years, while at the same time schools have been battling a rapid increase in responsibilities and costs and teachers have faced real-terms pay cuts because of government austerity policies.
“The next government must take the opportunity of a projected fall in pupil numbers to invest properly in schools and colleges, rather than clawing back savings into the Treasury and making the situation worse.
“Policy-makers must treat education as an investment in the future of children and young people and the future of the country, rather than as a cost that can be cut.”
- Sibieta: School spending in England: a guide to the debate during the 2024 general election, IFS, 2024: https://ifs.org.uk/publications/school-spending-england-guide-debate-during-2024-general-election