Soaring inflation and “unexpectedly high cost pressures” for schools look set to end any hopes of funding being restored to 2010 levels.
The 2019 and 2021 Spending Reviews brought with them extra funding for the schools budget and an explicit government promise to restore real-terms funding to 2010 levels by 2024/25 – the end of the current Parliament.
As politicians’ promises go, many agreed it was pretty feeble – but now the range of cost pressures facing schools has put paid to even this modest pledge, this according to an analysis from the Institute for Fiscal Studies (Sibieta, 2022).
School leaders are not impressed. Paul Whiteman, general secretary of the National Association of Head Teachers (NAHT), has been scathing: “The government’s boast last year that it had restored school funding to 2010 levels was a feeble one, admitting a lost decade of no investment in education at all. It is now clear that even that meagre claim no longer holds true. For there now to be a real-terms decrease is scandalous.”
The IFS report details a 9% fall in real-terms school funding between 2009/10 and 2019/20. Recent government Spending Reviews have injected much-needed funding. In 2020, the government allocated an additional £7.1bn by 2022/23. In 2021, an extra £4.4bn was added to the schools budget by 2024/25.
This money, we were promised, would not only cover the planned increase in new teachers’ salaries to £30,000 by 2023/24 but would also return school funding, in real-terms, to levels last seen in 2010.
However, the IFS analysis says the costs faced by schools look just about affordable this academic year (2022/23), but beyond this year schools will once again be facing real-terms cuts.
School costs are expected to grow by 6% in 2022/23. This includes teacher pay costs rising by 4% (which after the pay freeze, includes an average 5.4% increase from September 2022). Support staff pay is also due to rise by at least 9%. And rising inflation is forecast to average 8% across the 2022/23 period.
However, compared to this 6% costs increase, per-pupil funding will grow by 7.7% in 2022/23.
Problems will really begin in 2023/24, when the IFS predicts that school costs will grow by a further 4%, above the expected 3% growth in per-pupil funding. And in 2024/25, the growth in school funding per-pupil is expected to be “only just above projected cost growth”.
The upshot is that the IFS has forecast that by 2024/25, school spending per-pupil will still be 3% lower than in 2010.
However, it must be emphasised that the IFS figures are averages, meaning many schools could well be facing real-terms funding cuts and deficit budgets this year.
For example, the report points out that a large amount of the extra funding this year has been allocated to meet rising demands on the high-needs budget. This is due to significant rises in the number of pupils with statements of SEN and those with Education, Health and Care Plans. These numbers have risen by about 50% since 2015, with growth of 9% in 2022 alone. As such the expected growth in total mainstream funding per-pupil (6.8%) is only just above expected growth in costs (6%).
The report adds: “There are a number of sources of uncertainty and the picture is likely to be very different across different types of schools.
“Schools that employ larger number of inexperienced teachers will see faster increases in teacher pay per-head. Schools that rely more on support staff, such as special schools, will also see faster increases in costs due to the relatively high pay offer for support staff.”
The report’s author, Luke Sibieta, an IFS research fellow, added: “On top of rising energy and food prices, schools now also face the cost of rising salaries for teachers and support staff. Within the context of a £4bn rise in the school budget this year, these costs look just about affordable – at least on average. Next year looks much more problematic, however.
“The big fiscal choice for policy-makers this autumn is whether or not to provide more funding to public services to compensate for rising costs and the significant challenges they face. It will be that much harder for schools to meaningfully contribute to levelling-up ambitions when they face real-terms cuts from next year onwards.”
Julia Harnden, funding specialist at the Association of School and College Leaders, said it was a “very poor reflection on the government’s priorities” that education spending will have fallen after 15 years in power. She added: “While it may argue that there are inflationary pressures beyond its control, the fact is that it is the government itself which has proposed a teachers’ pay award for September without providing any additional funding for schools to afford these costs, and it has also consistently ignored our repeated warnings about the impact of soaring energy costs.
“The trends highlighted in this report represent an increasing risk to school budgets in future years and the erosion of pretty much any chance of levelling-up aspirations being achievable. The government simply must respond by ensuring that schools have the funding they require to at least maintain provision.”
Mr Whiteman added: “The impact of massively increased energy costs, as well as the cost of food, among other things, has coincided with an unexpected increase in staffing costs, due to the government’s decision not to fund pay awards, leaving schools scrambling to find the money to pay it. School leaders are already worried that they simply won’t be able to make their budgets balance next year, let alone the years that follow.
“There is no doubt that the reality of the government’s current approach to education funding will lead to cuts to education, services and school staff next year.”
Further information & resources
- Sibieta: School spending and costs: The coming crunch, IFS, August 2022: https://bit.ly/3TIkXQ8
SecEd Autumn Edition 2022: This article first appeared in SecEd's Autumn Edition 2022. This edition was sent free of charge to every secondary school in the country. A digital edition will be available shortly via www.sec-ed.co.uk/digital-editions/