Schools could face £2.5bn ‘pay cut’ with new budgets as inflation bites, Lib Dems say

Union says new settlement ‘does not remotely take into account the huge inflationary pressures’

Mainstream schools will see their budgets increase by 1.9 per cent per pupil in the following academic year (Getty Images/iStockphoto)

School budgets could face a £2.5bn “pay cut” over rocketing inflation, according to new analysis by the Liberal Democrats.

The government has announced a 1.9 per cent increase in funding for mainstream schools for the academic year after next.

But concerns have been raised over soaring inflation, which stood at 9 per cent in May.

The Liberal Democrats have looked to estimate how much money schools could miss out on based on the gap between funding and inflation.

If inflation remains at current levels, they found schools would lose out on nearly £2.5bn with current 2023-2024 arrangements compared to if budgets kept pace with inflation.

Munira Wilson, the Lib Dem education spokesperson, said it was a “slap in the face” for schools.

“As our teachers deal with sweltering classrooms and squeezed salaries, this Conservative government has handed mainstream schools a real terms pay cut worth almost £2.5bn,” she said.

“With food and energy prices spiralling, schools too are suffering from the cost-of-living crisis.”

Geoff Barton from the Association for School and College Leaders, said the settlement for 2023-2024 “does not remotely take into account the huge inflationary pressures” that schools and colleges are facing.

“We are hearing reports of energy bills being increased by 300 per cent or more. Many settings have also continued to face Covid cost pressures in using supply staff to cover for absence,” the general secretary said.

He added: “It is increasingly inevitable that many will have to make further cutbacks to provision.”

The union boss said the government had “short-changed education for many years” which has left the sector in a “very difficult financial situation”.

Will Quince, the schools’ minister, announced school funding arrangements for the 2023-2024 academic year on Tuesday.

He said core funding - which includes money for both mainstream schools and others - would increase by £1.5bn this year, compared to the £4bn increase allocated for the coming academic year.

High-needs funding - which goes towards Special Educational Needs and Disabilities (SEND) and alternative provision - would increase by 6.3 per cent, while mainstream schools funding would increase by 1.9 per cent, according to the minister.

The Department for Education said per pupil funding will be 7.9 per cent higher in 2023-2024 compared to 2021-2022.