IFS: Spending gap between rich and poor schools has doubled in 20 years

The gap in spending on pupils between the poorest and richest schools in England has doubled over the past two decades as successive governments targeted extra funding at schools with the worst-off children, the Institute for Fiscal Studies has revealed.

But a new national funding formula aimed at redressing the balance would leave such gaps intact, says the IFS, and a real-term cut to school budgets of 7 per cent over the next four years will represent the largest real-term fall over any period since at least the late 1970s.

The institute’s latest report on school spending illustrates the huge variation in spending between schools, driven by differences in the demographics of pupils.

In 2013/14, the fifth of secondary schools with the highest number of pupils eligible for free school meals spent £1,800 more per pupil than the fifth with the lowest number, a gap of about 31 per cent. That gap was about 15 per cent in the late 1990s.

The difference between primary schools has also grown, from 10 per cent at the end of the 20th century to 25 per cent in 2013/14, and the institute has predicted that such differentials “will be preserved in the national funding formula”.

The institute said funding had been “increasingly targeted at schools with pupils from poorer backgrounds over the past 20 years”, but also reported much variation in funding between schools with similar pupil intakes.

It found that, among the poorest fifth of schools, 10 per cent spent more than £9,000 per pupil while 10 per cent spent less than £6,200, and gave this variation as one of the reasons why the government is currently consulting on plans for a national school funding formula.

The differences in spending between local authorities has also been highlighted, with research revealing that in 10 per cent of council areas, secondary schools spent at least 40 per cent per pupil more than primaries, but that difference was less than 30 per cent in 10 per cent of areas.

The institute said a national funding formula would “eradicate such differences and would therefore lead to substantial changes in spending per pupil within individual local authorities”, adding that it would also “imply a loss of discretion for local authorities to respond to particular local circumstances”.

Report co-author Chris Belfield said school spending has become increasingly targeted at the schools with the most deprived intakes over the past two decades, with the Pupil Premium continuing rather than starting this trend.

He described this as a “major shift in the role of the state”, with the school funding system playing an increasingly important role in redistribution.

Luke Sibieta, another of the report’s authors, described the introduction of a national funding formula for schools as “one of the most radical shake-ups of school funding in at least the past 30 years”.

He said: “Replacing 152 different formulae with one single, simple formula will inevitably lead to substantial changes in funding across schools and, for good or bad, will almost completely remove local authorities from the school funding system.”

The study’s results have prompted a call for better funding of schools from union leaders.

Malcolm Trobe, interim general secretary of the Association of School and College Leaders, agreed that higher levels of funding should be targeted at the areas of highest need, in order to address the attainment gap between disadvantaged and wealthier students.

But Trobe raised “serious concerns” about the overall level of funding for all pupils, and warned cuts were having a “significant impact on schools”, with many having to reduce the number of courses they are able to offer, increase class sizes and cut resources such as IT equipment and books.

Russell Hobby, the general secretary of the National Association of Headteachers, welcomed the detailed analysis, and warned that flat cash education spending at a time of rising costs was pushing school budgets “to breaking point”.

“On the wide discrepancy between local authorities on school spending, we hope the planned national funding formula will help remedy this,” he said.

Mary Bousted, the general secretary of the Association of Teachers and Lecturers, also expressed fears about the potential negative impact of a national funding formula.

“We are worried that the government’s proposed national funding formula will take funding away from schools and local authorities with the highest percentages of disadvantaged children and will risk their life chances,” Dr Bousted said.

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