In this note we draw from IFS analysis of trends in school funding and expected pressures by 2024-25 under current funding settlements and use it to estimate the financial impact on average sized primary and secondary schools.1
School funding pressures by 2024-2025
Between 2009–10 and 2019–20, spending per pupil in England fell by 9 per cent in real terms. The government set out additional funding in the 2019 spending round and 2021 spending review and said that this would restore spending per pupil back to 2010 levels in 2024-25 based on inflation measured by the GDP deflator.
IFS now estimate that costs faced by schools will increase faster than rates of funding, this includes the increased cost of teacher and support staff pay. They estimate an increase between 2019-20 and 2024-25 of around 20 per cent – above the expected growth in the GDP deflator – which will mean that per pupil funding will remain 3 per cent below the 2009-2010 level. The 2021 spending review set the core schools budget in 2024-25 at £56.8 billion, therefore 3 per cent represents a shortfall of around £1.8 billion. There is a significant risk that high inflation will lead to higher pay than expected in 2023-24 which will further raise funding pressures.
Wider school funding context
While the school funding system in England remains progressive and pupils from low-income backgrounds continue to attract more funding than their more affluent peers, the link between funding and pupil need has been weakened in recent years. The policy of “levelling up” which directs a proportion of additional funding towards schools with historically lower levels of funding – these schools will typically (though by no means exclusively) be serving schools in more affluent areas.
This means that the real terms difference in per pupil funding between 2010 and 2025 may be even greater than 3 per cent in more deprived schools. This at a time when the government’s own disadvantage gap measures for both primary and secondary schools now stand at their widest in a decade. It is clear that pupils from disadvantaged backgrounds faced a myriad of challenges while learning from home during the pandemic, and consequently experienced greater learning losses. But while the pandemic exacerbated inequalities, the attainment gap in secondary schools was already widening prior to 2020. As government considers whether education budgets could be cut further alongside other Departmental spending, any reductions pose the very real risk of further widening the attainment gap. Given that increasing numbers of pupils are falling into disadvantage, we have frequently argued for a cross-government child poverty strategy to address the root causes of disadvantage
Translating funding pressures to school level
Whilst we do not have detailed modelling of how funding pressures may affect individual schools, we can very broadly translate what a real terms cut of 3 per cent would mean if it were to apply to an average size primary or secondary school.
- IFS estimates of total per pupil funding in 2009-10 were £5,100 in primary schools and £6,800 in secondary schools (2021-22 prices). 3 per cent of this is approximately £150 per pupil in primary schools, and £200 per pupil in secondary schools.
- Based on DfE statistics of the number of state funded primary and secondary schools in England and the number of pupils attending them, the average primary school has 270 FTE pupils, and the average secondary school has 1,030 FTE pupils.
- Therefore, the difference in funding between 2009-10 and 2024-25, after allowing for inflation and expected increases in costs, translates to around £40,000 in an average sized primary school and £210,000 in an average sized secondary school.
- In 2021/22 the average salary of classroom teachers was £37,500 in primary schools and £40,400 in secondary schools. Allowing for non-salary costs (such as employer national insurance contributions) these funding differences therefore equate to just under one teacher per primary school and three to four teachers per secondary school.
Conclusion
- The current funding settlement for schools will mean that, by 2024-25, per-pupil funding will be around 3 per cent lower in real terms than in 2010. This means that Rishi Sunak’s commitment in last year’s budget to return school funding back to levels in 2010 will not be met.
- We estimate that this equates to a cut of around £40,000 in the average primary school and £210,000 in the average secondary school.
- In turn, this equates to around just under 1 teacher in primary and 3-4 teachers in secondary schools.
- On the back of a decade of real-term cuts, a weakened link between funding and disadvantage and a widening gap between the poorest children and their peers, this paints an extremely worrying picture for education and for the outcomes of young people across the country.
- Over the past decade schools have also been affected by wider cuts and protecting core school funding by simply reducing spending elsewhere is likely to have knock-on effects to schools. In particular, the reviews of SEND and alternative provision, children’s social care, and child sexual abuse are all waiting to be implemented as well as the ongoing roll-out of mental health support teams in schools.
- Spending on children and young people is a long-term investment. The Chancellor and the new Prime Minister must avoid making further cuts to school and wider children’s services budgets if they are serious about levelling up and social justice.
