Politics

School budget cuts follow national insurance change

Treasury confirms it will claw back compensation for public sector bodies in future years

Treasury confirms it will claw back compensation for public sector bodies in future years

Ministers face having to cut £300 million from school budgets next year after the recent national insurance (NI) contribution rise was axed.

In his “mini-budget”, Chancellor Kwasi Kwarteng announced the 1.25 percentage point increase in NI, that came into effect in April, would be reversed.

The increase, dubbed the “health and social care levy”, was meant to raise more funding for the NHS. Schools were given extra funding to cover the estimated £300 million a year cost.

The first instalment was paid this year, with future funding rolled into the national funding formula.

Although this year’s cash will not be clawed back, the Treasury confirmed department budgets will be adjusted from 2023-24.

Schools have been told their provisional budgets already for next year. The Department for Education could find the cash from elsewhere in its budget, but school funding makes up the vast majority of its spend.

Luke Sibieta, from the Institute for Fiscal Studies, said: “Even though the real effects will be approximately zero, announcing cuts to school funding rates at the present time will be a bit of an unfortunate look for the DfE.”

He added the clawback could be “quite difficult” to implement as the cash is rolled into the natioanl funding formula and school funding rates for next year are already announced.

The Treasury said there will be an update on school budgets in “due course”. The DfE would not comment.

It comes as government departments have been told to prepare for cuts to enforce “fiscal discipline“.

Simon Clarke, the levelling-up secretary, criticised the “very large welfare state” in The Times newspaper, adding that government departments would have to “trim the fat”.

School budgets have been squeezed for over a decade, although government has upped funding in recent years.

However rising costs – such as soaring energy prices and unfunded staff pay rises – have wiped out increases.

Caps on energy bills come in from October. A school with a £10,000 monthly bill will save about £4,000.

But aside from a £2.1 billion fund for public bodies to invest in energy efficiency and renewable heating, there was no further financial help in last week’s mini-budget.

Geoff Barton, the general secretary of the ASCL leaders’ union, said the government had “given away billions of pounds to promote growth, but not a penny for education”.

“Some schools, particularly small primaries, may no longer be financially viable,” he said – predicting larger classes, cuts to subject options and widespread job losses.

Latest education roles from

Internal Quality Assurance Employability and Distance Learning

Internal Quality Assurance Employability and Distance Learning

Capital City College Group

Distance Learning Tutor

Distance Learning Tutor

Capital City College Group

Event Support Team Leader

Event Support Team Leader

MidKent College

E-Sport Technician

E-Sport Technician

MidKent College

Digital Technician

Digital Technician

MidKent College

Student Welfare Officer

Student Welfare Officer

MidKent College

Sponsored posts

Sponsored post

Navigating NPQ Funding Cuts: Discover Leader Apprenticeships with NPQs

Recent cuts to NPQ funding, as reported by Schools Week, mean 14,000 schools previously eligible for scholarships now face...

SWAdvertorial
Sponsored post

How do you tackle the MIS dilemma?

With good planning, attention to detail, and clear communication, switching MIS can be a smooth and straightforward process, but...

SWAdvertorial
Sponsored post

How can we prepare learners for their future in an ever-changing world?

By focusing their curriculums on transferable skills, digital skills, and sustainability, schools and colleges can be confident that learners...

SWAdvertorial
Sponsored post

Inspiring Education Leaders for 10 Years

The 10th Inspiring Leadership Conference is to be held on 13 and 14 June 2024 at the ICC in...

SWAdvertorial

More from this theme

Politics

Sir Kevan Collins joins the DfE board

Former EEF boss and catch up tsar will advise Phillipson on raising school standards

Freddie Whittaker
Politics

Robert Halfon resigns as skills minister

Former education committee chair will also stand down as an MP at the election

Billy Camden
Politics

Ark stands by chair Sir Paul Marshall over social media activity

The Conservative donor has been accused of liking and sharing extremist posts

Freddie Whittaker
Politics

Phillipson invokes zeal of Gove reforms in Labour schools vision

Former minister brought 'energy and drive and determination' that is required again, says shadow education secretary

Samantha Booth

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *

One comment

  1. Jonathan Roe

    Last week’s ‘fiscal event’ increasingly feels like a coup. A small cabal without a mandate are forcing an idealogical position, and starting to take decisions that will damage the life chances of children.

    Leora Cruddas and Dan Morrow on Twitter today are right – we must resist this.