Report on school funding pressures in England

By Agencies
March 17, 2018

A new report by the Education Policy Institute (EPI) examines the latest trends in local authority maintained school balances, and assesses whether all schools will be able to meet cost pressures over the next two years, following recent government funding reforms.

The EPI says that over the period of four years up until 2016-17, the proportion of local authority secondary schools in deficit nearly trebled, expanding to over a quarter of all such schools – or 26.1 per cent. The average local authority maintained secondary school deficit rose over this seven year period, from £292,822 in 2010-11 to £374,990 in 2016-17.

The number of local authority maintained primary schools in deficit has also risen. In 2016-17, the proportion of primary schools in deficit increased significantly, to 7.1 per cent. The average primary school deficit also noticeably increased, from £72,042 in 2010-11, to £107,962 in 2016-17.

Funding allocated by the government through its new National Funding Formula for schools (NFF), fails to meet pressures on schools budgets produced by this cost alone. This is despite the announcement of an extra £1.3 billion in funding for schools by the government in July 2017.

As many as 40 per cent (around 7,500 schools) are unlikely to receive enough additional government funding in 2018-19 to meet these pay pressures alone. For 2019-20, this proportion rises to nearly half of state-funded mainstream schools in England (around 9,000 schools).

Schools are facing a variety of cost pressures, yet this analysis shows how many schools are struggling just from this staffing cost alone. In addition, the assumption of one per cent staff pay increase over the next two years is cautious – with the government having signalled that future rises in teachers’ pay may be higher than the current 1 per cent cap over the next few years.

For a significant proportion of schools in England, being able to meet the cost of annual staff pay increases from a combination of government funding and their own reserves looks highly unlikely, even in the short term.

In response to pressures, schools have undertaken various efficiency measures to deliver cost savings, such as switching suppliers, reducing energy usage and reducing the size of leadership teams.

However, education staff account for the majority of spending by schools – around two-thirds. It is likely that schools will find it difficult to achieve the scale of savings necessary without also cutting back on staff. Many schools will face the challenge of containing budget pressures and reducing staffing numbers without impacting on education standards.

Commenting on the report, Dr Mary Bousted, Joint General Secretary of the National Education Union, said, “This new report from the Education Policy Institute confirms what the National Education Union has been saying about the impact of the Government’s real terms cuts to education funding. 

“With most schools overspending their income, it is clear that schools’ needs are not being met by the Government.  This includes the need to invest in teachers and support staff.  As recent research by the School Cuts coalition of unions has shown, class sizes have been increasing as a result of Government underfunding.  Increases in class size mean less individual attention for children, but they also increase workload for teachers and support staff – driving more people away from teaching and intensifying the recruitment and retention crisis that has developed. 

"A high quality education service cannot be delivered without investing in teachers and support staff.  The Government must restore the value of school staff pay to 2010 pre-austerity levels, starting with an immediate and fully-funded five per cent pay increase for teachers to address the growing teacher recruitment and retention crisis.

“Instead of ignoring the evidence, the Government must respond to the concerns of parents and those working to deliver the high-quality education service we need.”

* Download School funding pressures in England here

* Education Policy Institute

* National Education Union


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