School funding

£2bn school funding boost ‘didn’t go far enough’, admits Keegan

Education secretary also wants to 'streamline' teacher pay and school budgeting process, admitting current system is 'not ideal'

Education secretary also wants to 'streamline' teacher pay and school budgeting process, admitting current system is 'not ideal'

Education secretary Gillian Keegan unveiled the government's final pay offer to teaching unions earlier this week

Extra funding for schools announced at last year’s spending review “didn’t go far enough” to meet “additional pressures”, the education secretary has admitted.

Gillian Keegan also outlined plans to try to “streamline” the process of pay recommendations from the School Teachers’ Review Body and how it affects school budgets, amid criticism that ministers leave it far too late to confirm their plans each year.

The education secretary joined deputy director of the Department for Education’s funding policy Tom Goldman and others on a webinar for teachers and leaders about last week’s pay announcements.

Here’s what we learned.

1. £2bn spending review cash ‘didn’t go far enough’

The government announced at last autumn’s spending review that it was pumping an additional £2 billion into schools in each of the following two years.

It followed complaints that previously planned increases would not cover higher-than-expected rises in teacher pay last September.

Keegan admitted today it was “almost impossible to get the right balance when you’ve got a massive spike in inflation and lots and lots of things moving around”. But she added that she had “always been trying to make sure that we fund schools fairly”.

“The additional £2 billion that we got in the autumn statement was something I was delighted about. It didn’t go far enough as it turns out because of the additional pressures. And now we’ve got the STRB.”

2. DfE looking to ‘streamline’ STRB and budget process

The government has been repeatedly criticised for leaving decisions about pay to right at the end of the summer term each year, after schools have already drawn up their budgets.

Keegan told the webinar today she understood “the timing of the STRB process and the budgeting process is, let’s just say not ideal, as someone who’s done loads of budgets, I can understand and feel your pain”.

“We will also look to streamline that process so that you get the information early so that you’re not trying to anticipate what percentage you should put in for this or what percentage you should put in for that.”

3. Some schools won’t get the full 3%

The government has said the extra funding it is providing in the teacher pay additional grant will cover the rise above 3.5 per cent, which many schools had already budgeted-for.

Tom Goldman
Tom Goldman

But Goldman acknowledged today that some schools would receive “a little lower than average”.

“Of course we recognise that when we’re talking national averages and national totals, that is not the same exact situation that every individual school faces.

“And of course, there will be some schools where costs are a little higher than average or the funding increase is a little lower than average at schools which perhaps have falling numbers overall, or falling numbers of pupils from disadvantaged backgrounds.”

He said in “exceptional circumstances”, schools in financial difficulty should contact the ESFA if they are academies or their council if they are a maintained school. The DfE has set aside additional cash of £40 million to help such schools, he added.

4. Pay funding will be rolled into NFF

The money to fund part of the teachers’ pay rise for next year is being issued to schools in the form of a grant, rather than as part of the overall national funding formula.

But Goldman said that would change from April 2025, when “we will roll the additional pay money into those core national funding formula allocations to make sure that it represents an ongoing increase for every school through into the future”.

5. Tutoring and 16-19 underspends funding grant

Funding for the teachers’ pay grant will partially come from underspends on the National Tutoring Programme and because of fewer 16 to 19 student enrolments than expected, Goldman told leaders today.

He said there were “some underspends on the NTP, where demand has been lower than had been anticipated in the current academic year”. Unlike in normal years, the Treasury is allowing the DfE to keep that money, he added.

He said there were also “fewer students enrolled in 16 to 19 education than we’d forecast back at the time of the spending review”.

He added there was “further work being done to find the exact number but those are a couple of places that the money will be coming from”.

6. More money coming for pensions

Employer pension contributions for teachers are expected to increase next year, and the government faced questions from leaders about whether the pay grant would have to cover those costs too.

But Goldman confirmed it was “not expected to cover that”.

He said the Treasury had “already told us that there will be additional funding” if contributions rise, “and it probably means, well it almost certainly means therefore, there will be a further grant that we will need to hand out before this year is out in order to distribute that pensions money”.

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