The money has run out. It might not seem so in some schools - in those that have carefully sheltered a surplus over a number of years - but it will be seen even there soon enough.

There have been suggestions this week that, finally, the government may act. It has been reported that the age of austerity is over, and it is likely that schools will benefit. But it is doubtful that any proposal will have meaningful change at its heart.

In a political climate so intoxicated with uncertainty and so restricted by the deals and allegiances that result from that uncertainty, what we are likely to get are tweaks to the current system, rather than a comprehensive rethink about how the education budget is spent.

That will be a missed opportunity. There are issues in how we spend money in education that are deeply embedded in a seemingly default ideology about what is important and how things have been done in the past.

But what if we were able to reboot the education system, start from scratch, recalibrate our priorities? What changes might we see then?

This feature uses evidence from academic research to take a look at where money could be saved and where it might be better spent in education.

Spending can be looked at from two viewpoints. The first view is from the school leader’s office. Here evidence from research about the efficiency of spending should be helpful in the decision-making process.

The second perspective is at a national level. Are we spending the education budget effectively to achieve what we want from an education system, and could other resources from outside of education be used to achieve broader educational and national goals?

Both of the arguments set out below have one key point in common: prevention is cheaper than cure.

Stage 1: Spending in schools

With current projections, schools will have to cope with significant reductions in spending, which will inevitably require reductions in staffing.

The teaching unions have produced an impressive interactive map that enables you to identify the projected budget loss for your school to 2020, and what this means for staffing (schoolcuts.org.uk).

Even if the government finds some more money for schools, these issues are unlikely to go away overnight - schools will still have to cope with fewer people and less resource: much as we might wish it, a complete reversal in fortunes is not going to happen.

These reductions will move the focus for school leaders from effectiveness and improving performance to efficiency and avoiding any decline in performance.

How do you maintain levels of attainment with less funding? The research evidence, as summarised in resources such as the Sutton Trust-EEF Teaching and Learning Toolkit, offers some possibilities here.

1 Reassess interventions

One-to-one catch-up is effective and is one of the most popular ways for schools to spend their pupil premium allocation - but it’s expensive. So what should they do instead?

There is evidence to suggest that approaches such as mastery learning (when done well) can reduce the risk of pupils falling behind their classmates. When some do struggle, intensive small-group teaching can also be effective, particularly with timely targeting. One-to-two is half the cost of one-to-one - it is rarely used, yet it is often as effective. Even one-to-three can work well.

2 Analyse TA deployment

We also know that general deployment of teaching assistants for general classroom support is unlikely to improve learning outcomes (and can mask the slower progress of vulnerable pupils).

By contrast, having a clear strategy for deployment that focuses on support for small groups or individuals can be very effective, enhancing progress by several months.

These approaches, of course, need to be supported with support and training in both subject content and effective questioning, and also need effective liaison with the class teacher to ensure progress or a change of approach. (For more on TAs, read Rob Webster’s blogs at bit.ly/RobWebsterBlogs)

3 Don’t abide by arbitrary class-size thresholds

Class sizes inevitably tend to rise with increasing rolls. While this is undesirable and unwelcome, it is not necessarily a disaster if extra support is put in place to ensure the overall progress of the class can be maintained.

A few extra pupils will not make much difference, though smaller classes do tend to make better progress overall, for younger children in the first few years of schooling in particular.

4 Streamline teacher time

A final area for schools to think about is the use of teachers’ time. How can you maximise quality teaching and learning time? Teachers’ time is the most valuable resource in every school. Could the time spent on planning and assessment (marking in particular) be reduced without affecting learners’ progress? We rarely think about opportunity cost in schools, as we don’t question what teachers do, but teachers are the key to educational quality. What can teachers currently stop doing without affecting learning? (Tes has published numerous articles on this topic - subscribers can find them in the Tes archive).

Stage 2: National spending

I get frustrated when I see journalists interviewing politicians about whether or not education spending is going up or down in real terms. The bottom line is the per-pupil allocation that each school can use, not the total education budget.

There may be no simple link between spending and outcomes, but a school’s choices are determined by how much money there is for each pupil in the school. Once you have taken staffing into account, there is very little flexibility in what you can do with the rest.

A second issue for me is that the current debate over the proposed new school funding formula keeps the focus of the argument at the school gates and will encourage bickering about the relative unfairness of revised allocations between schools.

We need to take a broader look at educational spending. Rather than forcing individual schools to make savings, where staffing is always going to be the major casualty, we also need to review whether or not we are spending the money in the right way to ensure we have an effective education system, locally and nationally.

Where and how could money be re-allocated? What should our education priorities be? It is challenging to consider these changes at a time when there is less money to go around, but all the more important that it is spent well.

1 Change the focus of resource

First, I think we should focus on where the current system fails. At present, we concentrate on the middle and top performers in primary and secondary schooling in terms of both the curriculum and what we recognise as achievement. Our focus on pupil premium is on narrowing the gap and the average difference.

But we should also look at the most vulnerable and those who do least well in the current system. This is not just a social justice or a political argument, it is an economic one. Young people who leave school without functional literacy and numeracy are more likely to be unemployed.

A 2015 report by the UCL Institute of Education indicated that poor levels of literacy are also evident in the growing prison population - at a cost of about £40,000 per prisoner per year. Nearly a third of prisoners are diagnosed with learning difficulties (and nearly half of women prisoners). Most also recognise this and see themselves as educational failures.

If we could keep one child from eventually being incarcerated by one year, through more effective education leading to successful employment, we would free up that resource.

One year saved on imprisonment could instead be used for 10 years of primary education or eight years of secondary schooling (the average current costs are about £4,000 and £5,000 per pupil per year respectively). This would require more than blind hope; we would need to implement evidence-based approaches, then evaluate and refine them to ensure the potential savings materialise.

2 Balance out the primary-secondary divide

If we were going to take an evidence-based approach to staffing, we would balance out the spending between primary and secondary (about a £1,000 difference per pupil per year), so that we ensured a more effective start and less catch-up or remediation later on.

3 Make Ofsted leaner and more focused

The budget for Ofsted was £137 million in 2015-16. Could a more efficient monitoring and inspection system be devised? This would not only check performance where needed but also focus on quality and support for improvement.

A safety-net inspection system to ensure pupils don’t languish in unsuccessful schools is essential, but surely this should contribute directly to the improvement of these schools using the expertise of the inspectors.

If it was targeted at the lowest-performing quarter of schools and had responsibility for improvement, could the costs of Ofsted be halved? This might create a leaner but keener inspectorate.

4 Reassess examinations and testing

We have a very strong focus on quantity indicators in our education system for pupil performance, proportions and gaps, but this needs to be balanced with maintaining the quality of those indicators. When the educational focus becomes too narrow, these indicators, the test and examination scores we prize, lose their validity. We suffer from a national stenosis of the assessment arteries. Overall, I think we lack strong quality drivers in our current system, particularly when considering quality, as experienced by individual pupils.

More controversially, I think we should review whether we get value for money from our testing and examination system. We certainly have a world-class examination system at the end of secondary schooling with GCSEs and A levels, and a national test programme at primary level that other countries may envy. But this has a high price in two ways.

First is the actual cost of testing and examinations. In the 2015-16 school year, the Standards and Testing Agency’s (STA) annual net programme budget was £47.3 million. (The STA is responsible for the key stage 2 statutory national curriculum tests, the KS1 phonics screening check and other non-statutory tests.) GCSE and A-level entry fees vary, but they certainly cost schools several hundred pounds per pupil. These are relatively small sums, but they soon add up.

The main people who benefit from the examination system, it seems to me, are the universities and employers. Schools sort out candidates, and rate and rank them through examination results.

The Sutton Trust estimates that universities spend £750 million per year on widening participation activities. Might this money be better spent by schools that already have expertise on tackling disadvantage through the pupil premium, or could universities share - or even bear - the cost of examinations?

More important than cost is the price we pay for the lost teaching and learning time: the opportunity cost of assessment and testing.

Practice and preparation reduces teaching time, as well as narrowing the curriculum, so that subjects such as art and music are now more conspicuous by their absence (according to Ofqual, GCSE entries for arts subjects have been declining annually, and by about 8 per cent in 2016).

The key issue here is whether the assessment system is appropriate for the current curriculum. There is no point in having a Ferrari assessment engine in a Ford Focus curriculum, or measuring for a new carpet with a micrometre. There are legitimate concerns about maintaining national standards, but a representative sampling approach could monitor these at a fraction of the cost.

Another area to consider is our expectations for wider educational outcomes. What is the role of the school and education system in preparing children and young people for work and life after school?

I was privileged a couple of years ago to be involved in the Hartlepool Education Commission, and talked to young people about their experiences and understanding of their education. They were adamant that they wanted broader preparation beyond GCSEs. They wanted functional maths (particularly around managing money); they wanted to know more about health and wellbeing issues, as well as a broader curriculum that valued the arts. They described this as a curriculum for life.

These seemed very reasonable expectations. We know that keeping aspirations on track is more important for most young people than raising aspirations. They also asked for a better and earlier understanding of the role of GCSEs in their future choices about careers.

The target here would be increased employability and earnings of young people over the medium term.

5 Shift expectations away from the purely academic, and fund for long-term general economic gain

In the longer term, if we can prepare children and young people better for life after school, savings can be made in the justice system or welfare, which could fund preventative measures in schools.

The increase in mental health issues in young people is a real concern, both for those affected now, but also the increasing cost of mental health services. We could account for some aspects of education as part of primary health care and focus on prevention in terms of both mental and physical health.

I am not advocating that Ofsted takes responsibility for monitoring the value-added scores of the average body-mass index of pupils, but the contribution schools can make towards health and wellbeing is already recognised, but unfunded.

Meanwhile, social and emotional programmes are not especially effective at improving general attainment in literacy and numeracy, but they do support behavioural change in a measurable way that meets National Institute for Health and Care Excellence criteria for cost-effectiveness, such as the National Institute for Health Research evaluation of the Roots of Empathy programme in Northern Ireland.

Change would require cross-subsidised investment and an increase in the breadth of what we value and monitor in schools, realistically costed and then evaluated rigorously. Our current accountability system is heavily weighted toward academic outcomes. This is, of course, necessary, but not sufficient. We can’t burden schools with further scrutiny of the kind we currently use to regulate performance, but we also don’t value other important outcomes from schooling.

What makes these decisions impossible at present is that our annual budgeting means long-term outcomes from education are never part of the discussion. Expecting schools to invest in any of these goals is never going to make sense for individual budgets and inspection targets. However, such an approach is feasible.

In Washington state in the US, they take just this long-term view of educational expenditure. They review the evidence for the long-term effect of annual expenditure and identify potential savings for criminal justice or reduction in road traffic deaths. This then helps to determine spending on programmes with demonstrated impact.

This requires more joined-up thinking about evidence use than we currently consider, but at a time when budgets are being reduced, it is important that we focus on the big picture and not just demand that schools micromanage the cuts.

Steve Higgins is professor of education at Durham University