Schools warn of staff cuts as Reeves snubs sector

Schools are being urged to save up to £750,000 through redundancies, curriculum squeezes and cuts to programmes supporting the poorest pupils as the funding crisis escalates.

Following this week’s spring statement, academy trust bosses are also expecting to have to eat into shrinking reserves ahead of a funding storm in September – with one expecting to use more than £2 million in three years.

And chief executives in Sheffield are banding together to pool roles and services across their organisations, while worried council school heads have slashed theatre trips and swimming classes.

Daniel Kebede, the general secretary of the National Education Union, said austerity was “ended in deeds not words”.

“The spring statement will cause deep anger…because it does not address the key issue preventing schools and colleges from supporting children and young people – a lack of funding.”

Eating into reserves

Despite mentioning schools in her Commons speech, during which she accused the Tories of leaving classroom roofs “literally crumbling”, chancellor Rachel Reeves failed to announce any extra cash.

This comes after Schools Week revealed earlier this month that school budgets will rise by about 0.5 per cent per pupil next year, with some saying they will lose money.

Ministers later admitted there is not enough headroom to cover staff pay rises next year, meaning the prospect of more cuts.

Leaders have also warned that grants to cover schools’ increased national insurance contributions will fall short by up to 35 per cent – while pupil premium increases will also fall short of rising costs.

John Barneby, the chief executive of Oasis Community Learning – which runs 54 academies across England – said he “may need to utilise our reserves to ensure our schools can fully support all of our students”.

£2.2 million hit to reserves

The trust, one of the largest in the country, continues “to reformulate our financial plans to address constraints”.

Barneby said more investment wad needed as “limited funding, rising costs and the deepening SEN crisis are stretching schools beyond capacity”.

In the north east, Durham and Newcastle Diocesan Learning Trust expects to have to use about £300,000 of its £3.9 million reserves in 2024-25. Forecasts suggest it will eat up a further £1.9 million over the following two years.

Paul Rickeard, its chief executive, said budgets had been dented further by the discovery of an underground leak at one of his primaries. The school will have to re-piped.

The latest report compiled by the Kreston group, a network of accountancy firms, warned earlier this year that trusts’ financial buffers were already collapsing.

Thirty-one per cent of chains’ reserves fell below level 5 per cent of total income – the level recommended by government – from 17 per cent two years ago.

The Institute for Fiscal Studies has also warned school budgets will feel “very tight” next year, adding some may “struggle to cover their costs without making savings”.

Nigel Attwood, the head of a local authority-maintained junior school in Birmingham, said his school had slipped into a £70,000 deficit.

But he believed the “only way we’re really going to make a massive dent into those numbers will be staff. That’s something I’m not going to be doing in the foreseeable future.”

Leaders consider the ‘unimaginable’

Adrian Rogers, head of the Chiltern Learning Trust, said dipping into reserves was a short-term fix. Having used “several million last year to cushion the staffing bill”, he expected to make “some large cuts” in September.

Chiltern has frozen recruitment for the next “two to three weeks” across his 18 Bedfordshire schools, with heads set to be called on “to look at the unimaginable”.

His secondaries will be asked to find savings of up to £750,000, while primary leaders will be set savings targets of up to £250,000.

“The place to start is staffing because 75 to 80 per cent of your budget goes [there]. It’s about how that staffing can be tightened without having any impact on pupils.”

Another leader, who wanted to remain anonymous, said his MAT planned to reduce its central school improvement team, instead buying in support when needed. 

The Confederation of School Trust’s annual survey last year found 83 per cent of chief executives intended to focus their academy chain’s efforts on balancing budgets in 2025-26.

Seventy-three per cent said they would also prioritise “cost reduction”. Less than half felt confident about the sustainability of their trust.

‘Nothing left to cut’

Meanwhile, secondaries in the Weydon MAT have been told to find £250,000 of savings on average. Its smallest primaries have a target of £25,000, although “there’s nothing else to cut”.

John Winter, its chief executive, said a range of choices were available in secondaries, such as not replacing outgoing staff and reducing the number of subjects covered at key stage 4.

A school costs analysis published by the DfE last week said. schools would only be able to afford a staff pay rise of about 1.3 per cent next year. Ministers have recommended a 2.8 per cent rise for teachers.

Jack Worth, of the National Foundation for Educational Research, pointed out that the Office for Budget Responsibility had increased its forecast of average earnings growth for 2025-26 from 3 to 3.7 per cent.

 “In light of this, it seems unimaginable that the DfE teacher pay proposal of 2.8 per cent for the next academic year could remain unchanged.”

Energy and MIS switchovers

Winter warned that, having already budgeted for a 2.8 per cent increase, “a significant amount of money [would have to be found to balance the books” if the government opted for a higher rise.

In Sheffield, the Minerva Learning Trust is avoiding “drastic action”, such as redundancies, and will instead dip into its £5 million reserves earmarked for building projects.

Schools are being asked to draw up blueprints outlining how they can “manage without staff should they leave”.

Bev Matthews, it chief executive, has started working with other MAT leaders in the city to explore collaboration “so we’re either sharing services or posts so more money can go back into schools.

“It might mean we start up a shared company that we run those services through.”

‘A cycle of unrealistic financial planning’

One trust expects to shave about £700,000 off its bills when its energy deal – agreed when prices shot up following Russia’s invasion of Ukraine – renews later this year.

Leaders had hoped for a last-minute funding boost to help them with huge pressures in the next academic year.

Warren Carratt, of the Nexus MAT in Sheffield, said he was “beyond disappointed that we’re still stuck in a cycle of unrealistic financial planning, which smacks of deliberate denial.

He added that “many of us” believed things would be better under a Labour government.

Attwood, whose school is in a deprived part of Birmingham, is “cutting back on theatre trips”, sports competitions and reducing swimming lessons by a third, among other things. He has saved about £50,000.

Child poverty crisis worsens

The head of a council-run secondary in west London has been running a uniform programme supplying clothing and equipment to pupils on free school meals, asylum-seekers and looked-after children.

“That fund doesn’t exist for the next academic year, so we’re to going have to review how we do it. Or do we review our uniform policy – are we going to be sticklers over what the uniform expectation is?

“Why am I going to punish a child and parent if they can’t afford to buy uniform?”

Adding to the strain schools are under, impact assessments suggest the government’s planned welfare cuts will plunge 50,000 more children into poverty over the next five years.

Kebede said that Labour’s pledge to boost opportunities for working-class children “simply won’t happen without investment in our schools and funding for the pay increases needed to value, recruit and retain the educators we need”.