Secondary schools in the most disadvantaged areas saw spending per student fall over the last decade by more than twice as much as those in the most affluent areas, an analysis has revealed.
A report from the Institute for Fiscal Studies (IFS) has also found that rising costs have meant that the purchasing power of school budgets will be lower in 2024 than they were in 2010, despite recent government spending increases.
The think tank has today published a report on education spending in England in 2023.
It comes after Tes revealed last month that school business professionals were warning that they could face costs rising by “around 7 per cent” next year because of pay increases and “lagged inflation”.
Here are five key findings from the report:
1. Schools in disadvantaged areas have seen bigger cuts
The analysis by the IFS shows that schools serving more deprived areas receive higher levels of spending per pupil, but this advantage has narrowed over time, with the most deprived schools seeing the biggest cuts.
School spending per pupil is about 21 per cent higher among the most deprived group of schools than for the least deprived group, even after accounting for differences in costs across areas. However, this funding advantage is down from 31 per cent in 2010 due to larger spending cuts for more deprived schools.
The report says that between 2010 and 2021, the most deprived secondary schools saw real-term cuts of 12 per cent compared with 5 per cent for schools in the most affluent areas.
2. School budget purchasing power down on 2010
The analysis finds that the purchasing power of school budgets will be about 4 per cent lower in 2024 than in 2010 when likely cost increases, such as staff salary rises, are taken into account.
The report says that costs faced by schools - such as teacher and support staff salaries - are growing faster than economy-wide inflation.
The IFS estimates that schools’ costs will rise by 7 per cent in 2023-24 - including the 6.5 per cent pay rise for teachers and an 8 per cent salary rise for support staff.
The IFS estimates that, in 2024-25, schools’ costs will grow by 4 per cent, which it adds will “just about be matched by 4 per cent growth in total funding”.
The report adds: “After accounting for growth in schools’ costs, we estimate that the purchasing power of school budgets in 2024 will still be about 4 per cent lower than in 2010. The recently announced 10 per cent increase in the National Living Wage could push up school costs further.”
The core schools budget is set to rise from £52.6 billion in 2019-20 to £58.6 billion in 2024-25.
3. Fall in pupil premium value
The report notes that there has been a 14 per cent real-terms reduction in the value of the pupil premium since 2015.
The pupil premium is additional funding given to schools based on the number of pupils recorded as being eligible for free school meals and also looked after children.
The IFS also notes that the introduction of statutory minimum funding levels in 2020 disproportionately benefited less deprived schools.
It adds that deprivation funding factors in local authority funding formulae - which decide how much money schools are allocated - have reduced in real terms over time, which reflects the lower level of funding for deprivation in the national funding formula.
4. Education share of spending down
Education spending has also fallen as a share of national income, from about 5.6 per cent in 2010-11 down to about 4.4 per cent in 2022-23, the IFS says.
It adds that this is about the same share of national income as in the early 2000s, mid-1980s and late 1960s.
“There has been no long-run increase in the share of national income devoted to public spending on education, despite large rises in education participation,” the report says.
5. Shrinking pupil numbers won’t necessarily reduce costs
The pupil population is expected to decline by 600,000 or 8 per cent between 2024-25 and 2030-31, with a 400,000 reduction in primary school pupil numbers and a 200,000 reduction in secondary school students.
The IFS says this would reverse almost all of the increases in the pupil population since 2010-11 and create less demand for school places.
However, it adds that the declining pupil numbers will only reduce spending needs if schools can shrink their costs and staff numbers in equal measure.
Luke Sibieta, IFS research fellow and an author of the report, said schools face a “multitude of budget challenges”, including rising inflation, which is eroding their real-term value.
He added: “At the recent Autumn Statement, the government chose not to top up education spending plans, but instead focus on reducing taxes. We also see that schools serving the most disadvantaged children have faced the biggest spending cuts over time.”
Geoff Barton, general secretary of the Association of School and College Leaders, said the report shines a light on the fact that “investment has failed to keep pace with school costs”.
He added: “Nothing in the chancellor’s recent Autumn Statement addressed this dire situation and it is therefore inevitable that more spending cuts will be needed and the room for meaningful pay awards that address the staff recruitment and retention crisis will be severely constrained.”
The DfE has been approached for a comment.
