Headteachers’ leaders have warned that funding allocations announced for next year will leave many schools at risk of having to make further cuts.
The Association of School and College Leaders (ASCL) said that once pay awards for teachers and support staff are factored in, the net per-pupil increase for schools in 2025-26 will be less than one per cent.
The calculation is based on National Funding Formula allocations published by the Department for Education today. It comes after the government announced that, from next year, core schools funding will increase by £2.3 billion.
But funding experts have raised concerns that, at school level, today’s allocations will not be enough.
Impact on teacher recruitment
ASCL’s funding specialist Julia Harnden said: “While funding per pupil is increasing by 2.23 per cent on average, this includes a 1.28 per cent increase to ensure that the 2024 pay awards for teachers and support staff continue to be funded at national level in 2025-26.
“This means that the net per-pupil increase next year is less than one per cent, which is unlikely to be sufficient to meet the rising costs of schools, as these costs tend to outstrip inflation.”
The union also warned that the funding levels would not support the government’s ambition to recruit more teachers.
Ms Harnden said: “In particular, it is difficult to see how schools will be able to afford teacher and support staff pay awards at anything like the level required to address historic pay erosion and a severe and deepening staffing crisis, let alone achieve the government’s aim of recruiting 6,500 extra teachers.”
She said the union recognised the government was facing financial constraints, but added: “We are a long way short of the funding that is required to allow our schools and colleges to operate without the risk that many will have to make further cuts to their budgets and hence their educational provision.”
Leora Cruddas, chief executive of the Confederation of School Trusts (CST), said: “Pay is the largest cost for school trusts, so we welcome the funding announced in last month’s budget to support pay awards, but costs are continuing to rise across the board.
“We recognise all the pressures on the public purse and the challenges of the fiscal environment. However, an average increase below inflation for day-to-day costs will put new pressure on already stretched budgets.”
Inclusive education prioritised
She said that schools and trusts want to support the government’s Opportunity Mission and that CST members’ top priority for this academic year was to ensure an inclusive education, including for pupils with special educational needs. But she added: “We can’t do that while continuing to make cuts to provision - the upcoming spending review needs to reflect this.”
The government announced in October that core school funding would increase by £2.3 billion a year, including an extra £1 billion for special educational needs and disabilities.
The plans were set out by the chancellor Rachel Reeves in her first Budget, who said the funding would help to support the government’s promise to hire thousands of new teachers.
At the time of the Budget, Luke Sibieta, a research fellow at the Institute for Fiscal Studies, said the increase to core school funding would quickly get “swallowed up by ongoing cost pressures”.
Today, he said the £1.3 billion increase (once £1 billion of ringfenced funding is removed) will raise core school funding per pupil by about 2.2 per cent next year, which will also be used to cover the rest of the teacher pay award.
“On the basis of existing policy and forecasts for average earnings, we estimate that schools’ costs will grow by more than 3 per cent next year,” he said. “On that basis, most schools might struggle to break even next year unless they can find savings somewhere.”
A DfE spokesperson said: “The Budget delivered on the government’s commitment to put education back at the forefront of national life, breaking down the barriers to opportunity for all children and protecting key education priorities, including core funding for schools.
“The £2.3 billion extra for schools provides an increase to per pupil funding in real terms and includes a significant £1 billion for children and young people with high needs. Together with the 5.5 per cent teacher pay award announced in July and fully funded at the national level, this will further support the delivery of the government’s pledge to recruit 6,500 teachers and help give children the best start in life.”
“But tough decisions still remain to get public finances back under control and we are already finding efficiency savings so we can continue to fix the foundations and ensure value for money for taxpayers.”
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