School funding

Education funding squeeze ‘puts brakes on levelling up’, and 3 more IFS findings

A think tank report contrasts heavy education cuts contrast with surging healthcare spending

A think tank report contrasts heavy education cuts contrast with surging healthcare spending

30 Nov 2021, 0:00

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A decade of school funding cuts unprecedented in postwar history are a “major brake on levelling up,” a think tank has warned.

An Institute for Fiscal Studies report says governments have also “remarkably” let education spending fall as a share of national income when health spending has soared.

Its annual education report suggests schools in disadvantaged areas and sixth-form colleges face the biggest squeeze, with the latter’s funding in 2024 down almost a quarter on 2010 levels.

Geoff Barton, general secretary of school leaders’ union ASCL, called the figures a “pretty dreadful legacy”, with “more action and less rhetoric” needed on the government’s levelling-up agenda.

The 2021 spending review saw the government pledge more than £5 billion to core school budgets by 2023-24. The IFS said this would “mostly reverse” past cuts, but still mean “almost no overall real-terms growth in school spending per pupil” in 15 years.

Politicians have ‘tended to favour’ health

Education spending across the UK faced a £10 billion – eight per cent – budget cull between 2010 and 2019, according to the IFS.

This left spending as a proportion of Britain’s gross domestic product – the total value of goods and services – at 4.4 per cent in 2019, the most recent year available. It had stood at 5 per cent at the start of the decade.

The cuts, “effectively without precedent in post-war UK history”, contrast to a healthcare spending increase from around 4.5 per cent in the early 1990s to more than 7 per cent shortly before the pandemic.

“This partly reflects the costs of an ageing society, but also policy and spending choices by successive governments that have tended to favour health spending.”

Disadvantaged schools hit hardest

The IFS echoes other experts in warning disadvantaged areas have suffered more from cutbacks.

It says the most deprived fifth of secondaries have seen funding cut by 14 per cent in the decade to 2019, versus a 9 per cent drop for the least deprived.

It highlighted not only the National Funding Formula’s controversially greater increases in funding for the least deprived schools, but also a lesser-noticed failure to maintain pupil premium funding with inflation.

Sixth-form spending down by almost a quarter

The report says recent funding announcements for 16-18 education will “only serve to partially reverse the cuts of the previous decade”.

School sixth-form spending per pupil will be down some 23 per cent on 2010 levels even in 2024, while further-education and sixth-form college spending per pupil will be 10 per cent lower.

It says they face not only the impact of past funding cuts, but also student numbers continuing to rise, the need for Covid catch-up and the now-delayed removal of funding for BTECs from 2024 to promote T Levels.

Teacher pay rises of 3% would be ‘affordable’

The IFS says plans to hike teacher starting salaries to £30,000 and fund 3 per cent pay rises for other teachers are “affordable”.

It noted the government’s pre-pandemic “example pathway” for reaching the £30,000 goal included smaller pay rises for other teachers which it deemed affordable. According to researchers, this equated to an average per-head pay rise of around 3 per cent a year.

Given the £5 billion boost to school budgets by 2023-24 planned in the spending review, this overall pay increase is expected to cost £1.7 billion. “The affordability of such a rise is quite clear.”



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