According to the Institute for Fiscal Studies (IFS) for the past few years, schools have been struggling to contend with a tough combination of increased costs and lower budgets. However, help is at hand for many schools following the financial commitments made by the government in recent months.
The IFS estimates that costs faced by schools, such as teacher and support staff pay, will grow by as much as 20% until 2024-25. Of course, these pressures will also be felt by an independent school, but they are able to be a little more flexible over teacher pay. In state schools, an overall rise of 6% in non-staff costs is expected in 2022-23, which most schools should be able to contend with. Non-staff costs are being impacted by the ongoing rise in inflation, although the growth in funding per pupil should help to make a difference in this regard.
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Addressing the real terms spending issue
The IFS projected that the continued growth in school costs will continue to influence school budgets. Before the most recent budget announcement, the IFS stated that it was unlikely there would be a return to 2010 real-terms levels, with spending per pupil remaining 3% below the amount available in 2010. At that stage, it appeared that the government pledged to restore per-pupil funding to 2010 by the end of the next parliament would not be met.
After inflation, school spending per pupil in England fell by about 9% between 2010 and 2020. This was the biggest decline in school spending per pupil in at least 40 years.
The IFS outlook changed following the recent November budget, with the government committing £2.3bn extra for schools in each of the next two years. This equates to an average of £1,000 more for every pupil by 2025, a figure that the Treasury says will restore real-term funding to 2010 levels. The IFS also agrees that this will be enough to return to that level of spending.
Academies, well-maintained mainstream schools, and special schools will receive the funding boost from April 2023. For the next financial year, this will be an increase of approximately 5% for mainstream schools, compared to 2022-23.
A primary school with 200 pupils will receive around £28,000 in funding, while a typical secondary school with 900 pupils will get approximately £170,000 extra. Councils’ high-needs budgets will be bolstered with an additional £400 million, which can be used to support children with disabilities or special educational needs.
Dealing with inflation, pay rises and other rising costs
There remain some areas of concern for schools regarding costs, in particular high energy bills, after the government confirmed that the energy support scheme will end in the spring.
Currently, as part of the Energy Bill Relief Scheme, schools can access support for their energy bills. Until March 31, 2023, rates will remain at £11 per megawatt/hour for electricity and £75 for gas. Once the support scheme ends, it means that schools will be exposed to much higher energy bills that could force some to make cuts in other areas of spending.
There is hope that energy prices will drop next year, but if they do not, and schools are not given the right level of support, it could compromise the billions pledged in the budget this year.
In terms of teacher’s pay, the Department for Education announced in October that increases of between 5% and 8.9% will be backdated from September 1, 2022. The higher pay rises will cost the sector around £.13 billion in total.
Energy efficiency funding
At the start of December, the Department for Education said that an extra £500 million would be made available to “future-proof” buildings with energy efficiency measures. On average, this will work out to around £42,000 per secondary school and £16,000 for a primary school. The funding will be made available to schools in December and to Colleges in January.
The government also published guidance for schools on how to improve sustainability, maximise energy efficiency and reduce carbon emissions for use during the winter and beyond.
This follows the £1.8 billion of capital funding promised to help with school building maintenance, a funding scheme that every school in England will be able to access.
Combined with the £2 billion of real-term investment, it means schools will receive a total of £58.8 billion in 2024-25, which is one of the highest financial commitments ever made to the education sector.
