Schools would need £3.2 billion in extra funding to address the loss of purchasing power in budgets since 2010, the Institute for Fiscal Studies (IFS) has said.
It has also found that funding for schools in England would need to rise by £700 million above existing plans for 2024-25 to allow them to meet expected cost rises.
In a report published this morning, the IFS has calculated that, on current projections, the purchasing power of school budgets will be 5 per cent below 2010 levels in 2024.
To compensate schools for this loss in their budgets since 2010, the IFS said £3.2 billion in extra funding would be needed.
Geoff Barton, general secretary of the Association of School and College Leaders, said the analysis “shows the reality behind the government’s rhetoric about ‘record funding’ of schools - which is that schools are actually much less well funded than they were in 2010 when funding is set against rising costs”.
Schools are likely to see costs grow at a faster rate (around 5 per cent) in 2024-25 than the total school funding per pupil increase (less than 4 per cent), IFS research fellow Luke Sibieta said.
As a result of this, the purchasing power of school budgets is likely to fall by 1 per cent in 2024-25.
Inflation measured by the Gross Domestic Product (GDP) deflator is set to rise by 2 per cent in the same time.
‘Much harder’ reality
The IFS said this would imply that schools will see a 2 per cent real-terms rise in school spending per pupil in 2024-25.
However, it warned that in fact, schools are likely to face a “much harder” reality in terms of rising costs.
The IFS has previously said that standard measures of inflation, such as the GDP deflator, do not accurately reflect increasing cost pressures on schools.
Mr Sibieta said: “Following on from a 9 per cent real-terms cut to school spending between 2010 and 2019, the present government has been delivering boosts to school funding and was just about on course to get school spending per pupil in England back to 2010 levels by this year.
“However, schools have also been seeing rapid cost rises from rising teacher pay awards, large rises in support staff pay and spikes in food and energy costs.”
Non-staff costs rising for trusts
The recent Kreston UK Academies Benchmark Report 2024 on academy trust finances found that non-staff costs had risen by up to 16 per cent for some schools in 2022-23.
Nearly half of the trusts included in the report had in-year deficits for 2022-23, with many expecting the situation to get worse as they used reserves to cover rising costs.
The picture was similar in the maintained sector, with the number of schools in deficit rising 4 percentage points between 2021-22 and 2022-23.
Schools “have already had to make very difficult decisions about the amount of pastoral support and curriculum options they are able to provide, and what they can afford in terms of IT equipment, classroom resources and routine maintenance”, according to Mr Barton.
He added: ”Meanwhile, capital budgets have been so severely cut since 2010 that many parts of the school estate are falling apart and are riddled with asbestos and crumbling concrete. And special educational needs provision is in crisis, with the level of need much greater than the available resources.
“The government has another opportunity in next week’s spring Budget to address these issues by investing in children and young people.”
The DfE has been contacted for comment.
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