The evidence on school funding

Written by: Maire Williams | Published:

Complaints about a lack of school funding are frequently hitting the headlines, with concerns over how budget pressures will affect schools and colleges in England. Maire Williams looks at what the evidence tells us

School funding continues to be a top issue in education, with parents, teachers, governors and schools all waiting for the government to announce their spending plans beyond 2020.
In a speech at the annual conference of the National Association of Head Teachers (NAHT) in May, the education secretary, Damian Hinds, recognised the new cost pressures placed on schools, such as higher employer contributions to National Insurance and the Teachers’ Pension Scheme.

He also acknowledged that society now expects schools to do more with their funding than they did a generation ago, including looking after pupils’ mental health, checking for signs of radicalisation, and monitoring health and social issues.

Yet no additional school funding was announced at the event. However, a few days later, an extra £50 million of capital funding was revealed, but this was for selective schools only and was designed to enable them to offer more places rather than increase spending per-pupil.

In terms of non-selective schools, the government appears to remain focused on making the current funds go as far as possible by eliminating any inefficiencies and focusing money on what works.

The House of Commons’ Education Select Committee has launched an inquiry into school and college funding which echoes this interest, with one of their key questions focused on the effectiveness of targeted funding, such as the Pupil Premium.

The problem with this is that while we have some indication of what works, this is still being established, and what works in one school may not necessarily work in all schools. As noted by the National Audit Office (2016), this makes it difficult for the government and schools to identify with certainty, if and where costs can be cut without detrimental effects.

Schools’ reaction to funding changes

Following the 2015 Spending Review, schools entered a period of reduced total funding. Between April 2015 and March 2017, total school funding fell by just under five per cent in real-terms.

The government’s current funding plans for non-selective schools, including the additional £1.3 billion of funding announced in 2017, are expected to result in a real-terms freeze in per-pupil funding over 2017 to 2019.

A recent report by the National Foundation for Educational Research (NFER) – School Funding in England Since 2010: What the key evidence tells us – looked at what effect these changes have had on school spending, along with what we know about the relationship between school funding and educational outcomes.
This found that schools have typically reacted to reductions in their real-terms budget by:

  • Reducing the number of staff they employ.
  • Replacing more experienced staff with younger recruits.
  • Relying more on unqualified staff.
  • Narrowing their curriculum.
  • Reducing maintenance spending.
  • Not upgrading IT equipment.

However, our report also found that few studies provide any robust estimates of the impact of these specific changes on educational outcomes, meaning that we have little evidence on how recent cuts can be expected to affect pupils.

Such studies that do provide estimates suggest that school resources have a modest positive influence on attainment, though this relationship is usually confined to primary schools.

Funding targeted at disadvantaged pupils

NFER’s school funding report did show that the observed benefits of higher spending appear to differ depending on the characteristics of pupils, and are typically greater for pupils from disadvantaged backgrounds.

In addition, the effects of expenditure are found to be higher and more significant in schools with more disadvantaged students – and all types of students in the most disadvantaged schools appear to benefit from additional funding, not just the disadvantaged students.

This suggests that funding targeted specifically at disadvantaged pupils, such as the Pupil Premium, has the potential to raise attainment not just among disadvantaged students, but also among their fellow students.

This does not mean that targeting more money at disadvantaged children is a simple solution. A range of work looking at the Pupil Premium indicates that what the money is actually spent on is equally important. Another report by the NFER – Supporting the Attainment of Disadvantaged Pupils: Articulating success and good practice – found that schools successful at increasing attainment among disadvantaged students were more likely to be teaching pupils specific strategies to monitor and evaluate their own academic development, as well as using peer-to-peer learning.

The Teaching and Learning Toolkit produced by the Education Endowment Foundation, which outlines the effectiveness of different strategies in raising attainment, also reached similar conclusions.

The future impact of the Pupil Premium

Resources such as those mentioned above are increasingly being used by schools to ensure their spending decisions are evidence-based, helping them to get the most out of their Pupil Premium funding.

In addition, given that funds targeted at disadvantaged pupils do appear to be associated with improvements in performance, the Pupil Premium has also been beneficial in terms of increasing the number of schools targeting funding at disadvantaged pupils.

In 2014, 94 per cent of schools targeted support at disadvantaged pupils, up from just 57 per cent before its introduction in 2011 (National Audit Office, 2015).

But there are concerns that funding cuts or continued freezes may undermine the future success of the Pupil Premium. NFER’s Teacher Voice survey found that 20 per cent of teachers reported schools using the Pupil Premium to plug gaps in their budgets.

If budgets continue to tighten, this percentage may increase, limiting funds dedicated to helping pupils from disadvantaged backgrounds realise their potential. As the Pupil Premium is one of the main policies designed to address the attainment gap between disadvantaged and non-disadvantaged pupils, this could have knock-on-effects for the government’s aim to improve social mobility.

At a time when increasing responsibility is being placed on schools to provide holistic support for pupils, it is important to note that providing this support comes with extra costs for schools. As we set out in our report on school funding, more work needs to be done to understand how current policies and demands on schools are affecting attainment and social mobility.

As we approach the end of the current spending review period and begin thinking seriously about how to fund schools beyond 2020, now is the time to prioritise this research, in order to ensure future school budgets are sufficient to allow schools to do all that is expected of them.

  • Maire Williams is a research manager specialising in school funding at the National Foundation for Education Research (NFER).

Further information

NFER Research Insights

This article was published as part of SecEd’s NFER Research Insights series. A free pdf of the latest Research Insights best practice and advisory articles can be downloaded from the supplements page of this website:


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