The “spiralling costs” of special educational needs and disabilities (SEND) provision are likely to “wipe out any opportunities for savings” in school budgets, the Institute for Fiscal Studies (IFS) has warned.
While £1.2 billion could theoretically be saved if per-pupil spending was frozen in real terms for two years amid falling pupil rolls, in reality this will be swallowed up by rises in high-needs spending, the IFS said today.
High-needs spending will have to grow by more than £2 billion between now and 2027 without reforms, the IFS’ 2024-25 annual report on education spending predicts.
Luke Sibieta, research fellow at the IFS, said: “Spiralling costs of special educational needs provision seem likely to wipe out any opportunities for savings in the schools budget from falling pupil numbers.”
Warnings over school funding
Pupil numbers are expected to drop by 2 per cent between 2025 and 2027. The IFS has calculated that the DfE could save £1.2 billion in this time if it froze per-pupil spending in real terms.
More than half of the 11 per cent rise in school funding between 2019 and 2024 was absorbed by rising SEND costs, the IFS said. This means per-pupil funding in real terms only increased by 5 per cent between 2019 and 2024.
Furthermore, the IFS estimates that the 2.8 per cent increase in mainstream school funding for 2025-26 will not be enough to cover an expected 3.6 per cent increase in school costs.
Mr Sibieta said in November that funding allocations would leave most schools struggling to break even without finding savings somewhere because of those rising costs, which include the rest of the 5.5 per cent teacher pay award for this year and the DfE recommended pay offer of 2.8 per cent for 2025.
Julie McCulloch, director of policy at the Association of School and College Leaders, warned that schools would face further cuts, including reductions to pastoral support, the curriculum and resources.
Schools “cannot go on like this,” she said. “It is death by a thousand cuts. The government must recognise the importance of improved investment in education.”
Paul Whiteman, general secretary of the NAHT school leaders’ union, said: “We know that some schools are facing real difficulties in making budgets add up, and many school leaders - who have already cut operations to the bone - remain worried about the outlook for next year.”
Announcing its Budget in autumn, the government said core schools funding would increase by £2.3 billion. £1 billion of this is ringfenced for SEND.
Elsewhere in the IFS report, which was funded by the Nuffield Foundation, the think tank warns the DfE that the plan to deliver an additional 3,000 school-based nurseries is unlikely to provide enough nursery places by September 2025.
A Department for Education spokesperson said: “We are determined to fix the foundations of the education system that we inherited and will work with schools and local authorities to ensure there is a fair education funding system that directs public money to where it is needed to help children achieve and thrive.”
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