Schools in England are grappling with a significant squeeze on their finances, with funding per pupil expected to be 3% lower in real terms in 2024 compared to 2010 levels, according to a new analysis by the Institute for Fiscal Studies (IFS). The report indicates that while the Government has increased school budgets in cash terms, these increases are being outpaced by rapidly rising costs, leading to an effective reduction in spending power.
For the upcoming 2024-25 academic year, the IFS projects that school budgets will see a 4% rise in cash terms. However, once inflation and other cost pressures are factored in, this translates to a 1% real-terms cut per pupil. This financial strain is largely attributed to substantial increases in teacher salaries and soaring energy bills, which schools must absorb from their allocated budgets. These pressures are making it increasingly challenging for headteachers to maintain current levels of provision and investment.
The Government has consistently stated its commitment to education funding, pointing to the National Funding Formula as a mechanism to ensure a fair distribution of resources across the country. However, the IFS analysis suggests that the overall quantum of funding is proving insufficient to meet the rising operational costs faced by schools. This situation could lead to difficult decisions for school leaders regarding staffing, resources, and extracurricular activities.
The report underscores that approximately 90% of schools are likely to experience a real-terms funding cut in the 2024-25 financial year. This widespread impact suggests that the financial challenges are not isolated but rather a systemic issue affecting the majority of educational institutions across England. The implications extend to class sizes, curriculum breadth, and the availability of support staff for pupils.
Opposition parties have frequently criticised the Government's handling of public sector funding, including education. The Labour Party, for instance, has repeatedly called for greater investment in schools to reverse what they describe as years of underfunding. They argue that the current financial climate is detrimental to pupils' education and the long-term health of the teaching profession.
The Department for Education has previously highlighted significant investment in schools, including an extra £2 billion in both 2023-24 and 2024-25, bringing the total core schools budget to over £59.6 billion in 2024-25. However, the IFS analysis provides a different perspective, emphasising that cash increases do not always translate into real-terms gains for schools once costs are accounted for.
Source: Institute for Fiscal Studies