Will the current lockdown ease financial pressures on schools? 

A new report by the NFER shows that regardless of lockdown all schools are struggling with Covid-related schools and the poorest are faring worst, writes Jenna Julius

Since the beginning of the pandemic, schools have been taking additional safety measures to protect pupils and staff, mitigate the spread of infection and provide support to pupils learning remotely. This has had a significant impact on many schools’ finances, but to date, the government has only provided limited support to meet these additional costs. The current lockdown (with mainstream schools once again solely open to vulnerable pupils and the children of keyworkers) will only exacerbate this situation.

The pandemic has created significant financial pressures on schools

Our recent NFER report found schools have incurred substantial additional expenditures to meet the costs arising from Covid. Evidence shows that the pandemic has also impeded schools’ ability to generate their own income. This is significant as before the pandemic, schools’ self-generated income from facilities and services, voluntary donations and catering, accounted for around four per cent of their total income on average, a small but important share of their available revenue.

Some have argued that closures during last year’s summer term will have allowed schools to make savings because they had fewer pupils attending, which they can offset against these additional costs. However, any savings were likely to be limited as schools still needed to pay staff, which is by far their largest cost. Further, as most schools remained open during lockdown, any reduction in their costs, such as utility bills, was likely to be relatively small.

Not all schools will be able to meet the increased costs of Covid through recent funding increases and their existing reserves

Drawing on the existing evidence base, our latest research found that current existing and additional funding is insufficient to cover the additional costs of Covid, at least for a number of schools who are at risk from the financial impact of the pandemic. Our research identified around 1,500 particularly at-risk schools which had either a deficit or a small surplus before the pandemic, whose notional increases in funding in the 2020/21 academic year will not cover their usual school cost increases (e.g. teacher pay increases) and Covid costs.

Deprived schools are disproportionately at risk of not being able to meet the additional costs of the pandemic

Not all schools have benefited equally from recent government funding increases. In particular, National Funding Formula allocations show that deprived schools stand to receive the smallest average budget increases due to the government’s ‘levelling-up’ policy – which is focused on raising the minimum level of funding received per pupil. As more deprived schools already receive higher levels of funding per pupil than other schools to reflect the increased challenges they face, they are set to experience the smallest increases in funding due to ‘levelling-up’.

Not only are more deprived schools less able to meet the financial pressures of the pandemic from recent funding increases, but they face the biggest challenge in supporting their pupils to catch-up ̶ as highlighted in our previous Covid research. Even before the latest lockdown, the scale of additional catch-up support provided by the government seemed unlikely to go far towards meeting the scale of support needed for pupils in deprived schools.

Financial pressures on schools are only likely to be exacerbated by the current lockdown

While schools are once again closed to the majority of their pupils, many will continue to face ongoing additional financial pressures due to Covid. For example, schools may require increased staffing to support pupils learning remotely and in-school. School closures will also continue to impact schools’ ability to generate their own income from activities including hiring their facilities, after-school clubs and fundraising by parent-teacher associations. Further, current school closures are only likely to increase the need for catch-up support when schools open more widely.

Without additional support now, there is a risk that some schools will need to divert resources that could be used for teaching and catch-up, or place additional pressures on their workforce to meet these needs.

Emergency support is needed now to help these schools meet these ongoing costs of the pandemic.