Does the government’s school funding pledge actually stack up?

2 Sep 2019, 18:07

school funding

Back to school week often signals new beginnings and a renewed optimism for the year ahead. Seemingly, in the spirit of that optimism, the government made a series of education funding pledges in the run up to the start of term.

The luxury of a three-year budget settlement for schools, plus a significant funding increase by the end of those three years, should have put a spring in the step of teachers and leaders returning to work.

NHS aside, no other public service (or indeed, education phase) is expected to have their budgets set beyond 2020-21, so a three-year settlement for schools signals that No.10 recognise the importance that the public place on school funding and stability.

Details of how the money will be allocated means the impact of the additional funding could be smaller than the government suggests

But, while the additional money and the three-year settlement is certainly a positive move, the details of how the money will be allocated and used means that the impact of the additional funding could be smaller than the government suggests.

The first point to clarify is that while the government has talked about a “£14bn increase in school funding”, that figure actually refers to the cumulative additional funding that will be spent between 2020-21 and 2022-23.

It is not an additional £14bn per year for schools – it totals £7.1bn per year by 2022-23. And, according to the Department for Education, that additional £7.1bn by 2022-23 should meet the costs of:

It is difficult to estimate the cost pressure arising from the last point – teachers’ pay- as it will depend on how quickly pay rises are implemented for both new and existing teachers.

Leaving this aside – the other pressures account for around £4.7bn: leaving around £2.4bn for teacher pay increases and other cost pressures.

That’s by no means an insignificant amount (and is similar to the total amount spent on the pupil premium), but it doesn’t sound as impressive as the £14bn that the government announced last week.

It also assumes that the £700m on high needs is held flat, meaning that it would be worth around £580m in real terms by the end of 2022-23 and around £600m short of what the education select committee says is needed to plug the deficit in high needs.

‘Schools may not receive as much as they expect’

Aside from the overall quantum, there are also important technical details to understand about how the money will be allocated to schools.

First, the minimum per pupil levels of funding (£5,000 for secondary pupils and £3,750 for primary pupils in 2020-21, rising to £4,000 the following year) is not quite as it seems.

A secondary school, for example, will not receive £5,000 per pupil plus extra funding for additional pupil needs, back office functions and running costs. Instead, most of the money that a school receives from the government will be divided by the number of pupils and, if that is less than £5,000, the school will receive a “top up”. It’s a technocratic, but important point which means that schools may not receive as much as they expect from this pledge.

In addition, the settlement does not automatically mean that each school will see a significant increase in their budgets over the coming years.

The department has confirmed that per pupil funding for all schools “can rise at least in line with inflation”, but the precise increase will depend on two variables. First, how much money is allocated through the national funding formula and second, the decisions that local authorities make about how that funding is distributed to schools in the area.

The DfE has confirmed that local authorities will need to ensure they honour the minimum levels of funding for all schools but, beyond that, there are no signs that local flexibility will be further restricted.

Schools in poorer areas will lose out

Second, we have already made this point but it really is worth hammering home, the government’s approach to allocate funding through the national funding formula and then “top up” schools that fall below the minimum per pupil amount will result in schools serving more affluent families seeing the greatest gains.

Not only are disadvantaged schools likely to experience smaller increases to their budgets over the coming years than more affluent schools, the pressures on teacher pay are likely to hit them the hardest. This is because disadvantaged schools generally hire much younger teachers than the average school and have smaller class sizes (and therefore more teachers). So any increase to the salary of new or younger teachers is likely to affect disadvantaged schools more than affluent schools.

It’s clear the extra funding is likely to ease some of the pressures schools have faced and will continue to face over the coming years. But it’s not quite the windfall that the government might have you believe.

It’s also unlikely that schools serving disadvantaged pupils will truly see a full reversal of cuts. Given that these pupils are, on average, over a year and a half behind by the end of secondary school, it’s important that we look beyond the headline figures, and consider what these funding decisions really say about the government’s commitment to social mobility.

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