Rising costs faced by schools in England growing faster than inflation – IFS

School spending per pupil will ‘largely stagnate in real terms’ when costs likely to be faced by schools are taken into account, a report says.

The report said the likely costs faced by schools would mean funding ‘only increasing by just about enough to keep pace with school costs’ (PA) (PA Wire)

Rising costs faced by state schools in England are growing faster than inflation, a report has found.

School funding and costs are growing at similar rates leaving school budgets to “largely stagnate in real terms” when cost pressures are taken into account, according to the Institute for Fiscal Studies (IFS).

The analysis has projected that school spending per pupil in England will be around 3% higher in 2024 compared with its past high-point in 2010, after adjusting for economy-wide inflation.

But researchers said standard measures of inflation are not providing an accurate picture of the cost pressures that schools face – such as rising energy and food prices and support staff pay.

The report said the likely costs faced by schools would mean funding “only increasing by just about enough to keep pace with school costs”.

School funding per pupil is in fact increasing by only just about enough to keep pace with overall school costs

Luke Sibieta, research fellow at the IFS

“This would leave the purchasing power of school spending per pupil in 2024–25 still about 3% lower than in 2009–10,” the analysis concluded.

The findings come as teacher strikes and concerns about the safety of school buildings amid the reinforced autoclaved aerated concrete (Raac) crisis have put school funding at the forefront of debate.

In July, the Government announced an additional £525 million to support schools with the increased teachers’ pay award for 2023/24.

In the 2022 autumn statement, the Government provided an additional £2.3 billion of funding to schools in England.

The IFS report said: “This is clearly a large rise in cash terms, but is only just above the overall growth in costs. The picture in 2023–24 therefore remains tight for schools.”

Luke Sibieta, research fellow at the IFS, said: “Schools are currently seeing large cash-terms increases in funding, which look like large real-terms increases when using standard ways of tracking government spending.

“However, schools are also currently facing rapid rises in costs, particularly support staff pay, energy and food costs, which are not captured in those standard economy measures.

“School funding per pupil is in fact increasing by only just about enough to keep pace with overall school costs. Policy debate should reflect the acute pressures on school budgets.”

Julia Harnden, funding specialist at the Association of School and College Leaders (ASCL), said: “The government loves to talk about the amount of money it is spending on education, but this report shows up these facile boasts for what they are.

“The reality is that the extra funding that has been provided, following years of cuts, is being swallowed up by rising costs and school budgets remain under enormous strain.”

The truth is that in real terms government has failed to invest adequately in pupils’ education for over a decade

Paul Whiteman, NAHT

Paul Whiteman, general secretary of school leaders’ union NAHT, said: “This is a crucial report that shines a spotlight on the specific financial challenges school are currently facing.

“It identifies something that some in government have not properly understood up to this point – that schools’ costs are actually running ahead of general inflation.

“This is why the government’s talk of ‘record funding levels’ feels so far from the reality of what school leaders are experiencing when it comes to their budgets.

“The truth is that in real terms government has failed to invest adequately in pupils’ education for over a decade.”

A Department for Education spokesperson said: “School funding will be 3% higher, in real terms per pupil, in 2024-25 compared to 2010 when using the statistic based on independent Office for National Statistics and Office for Budget Responsibility data, which is the routine measure of public spending.

“That includes an additional £2bn for both this year and next, recognising the higher costs schools are facing and matching both inflation and what the unions told us was needed. It also includes a further £525m in 2023-24 and £900m in 2024-25, announced over the summer, to support with the teachers’ pay award.”