Secondary schools in deprived areas outside of London have faced real terms funding cuts of 15 per cent over the past decade, according to a new analysis.
The Institute for Fiscal Studies (IFS) report warns that ministers need to increase spending in disadvantaged areas outside the capital to achieve their “levelling up” goals.
The IFS has produced a new analysis of public spending today that finds the current system for school funding is not fit for purpose, needs reform and has worked against the levelling up agenda.
The report highlights how schools serving more disadvantaged pupils have been affected by both the decision to freeze the Pupil Premium in cash terms since 2015 and the government’s decision to target more funding towards less-deprived schools through the National Funding Formula (NFF).
It warns that over the last five years, while schools in richer areas have seen 3 to 4 per cent real-terms increases in funding per pupil, schools in poorer areas have seen little change.
And schools in poorer areas saw the biggest real terms cuts in spending per pupil in previous years, with a 15 per cent drop in spending per pupil for the most deprived secondary schools outside London over the past decade.
The report says that a change in direction in school funding is warranted “if the government is serious about levelling up and tackling geographical inequalities that contribute to the big differences in health and wellbeing seen in England”.
Recent years have seen funding cut by more, or increase by less, in poorer areas “due to active policy decisions by central government”, it adds.
“In future, targeting funding increases at schools serving more deprived communities, especially outside London, could help meet the government’s ambitious targets on reducing inequalities in children’s life chances.”
The IFS has analysed school funding by dividing schools into seven groups based on the share of pupils eligible for free school meals in each year, and then further subdividing them into whether they are located in London or not.
This found that secondary schools with the most disadvantaged intakes have been hardest hit from 2010-11 to 2019-20 with a real terms per pupil funding cut of 15 per cent.
It adds: “This is naturally a concerning pattern given that these are the other areas with the lowest educational outcomes and potentially the highest extent of any ‘unmet need’.”
The IFS says this situation partly reflects the changing patterns of deprivation across the country over time.
It notes that in the decade up to 2019-20, schools in London were becoming less deprived over time but the funding system did not start reflecting this until the introduction of the NFF from 2018 onwards.
This means that some schools in London would have seen higher funding because they were historically more deprived.
Many London schools have therefore moved to lower deprivation groups, but still have funding levels based on historic levels of deprivation. The IFS said this pattern will be gradually corrected as part of the ongoing transition to the new formula.
However, it adds that the new formula has also provided lower increases to more deprived schools as a result of the policy choices made in the new formula.
It concludes: “Combined with the lower educational outcomes in more-deprived areas outside London, this suggests that the areas in most need of extra funding at present are likely to be more deprived areas outside London.”
David Phillips, an IFS associate director and author of the report, said: “Tackling persistent geographic inequalities in health, wealth and life chances across the country will require more than changes to public spending.
“...Current funding systems for the main services outside the NHS are not set up to tackle inequalities. School funding has been becoming less targeted at the most deprived pupils and is still overly concentrated in London.”
He said addressing this would be “a vital part of a truly ambitious levelling up agenda - but reform has been seemingly kicked into the long grass”.
A government spokesperson said: “We’re committed to delivering growth and ensuring our vital public services receive the funding they need to support communities.
“This year we’ve made an additional £3.7billion available to councils, increased schools spending by £4 billion, provided record funding for the NHS and are on our way to recruiting 20,000 additional police officers.
“As we continue to level up and spread opportunity across the UK, we will work with local partners to consider future funding needs and the Chancellor will announce further changes to fiscal policy on 31 October to put public finances on a sustainable footing.”
