What will the Spending Review mean for schools?

November 25, 2015

The Chancellor’s proverbial axe is starting to chop through Whitehall. As I write, 4 departments have already agreed to a settlement which reduces their spending by around 30% by 2020, and DfE will shortly settle their budget ahead of the final announcement of the Spending Review on the 25th November.

DfE are in what I’d call the ‘moderate difficulty’ box in terms of agreeing a deal. By far the biggest item of their budget, schools spending for 5-16 year olds, is ‘protected’ (in technical terms, it will remain the same in £ terms per pupil throughout this parliament, but it won’t rise with inflation). The discussion between DfE and Treasury therefore relates to the cuts that will come from the £14bn or so of money left (out of £57bn). The major elements of this spending are early years, 16-18 funding, and various miscellaneous items including things like school food, sport, music, teacher training, and the like. The Treasury have asked for a 25%-40% cut in these areas. Because the schools budget was protected in 2010, these areas took the biggest cuts last time, and the same will happen again now, which is unfortunate. And even elements of the ‘unprotected’ £14bn are in practice difficult to cut. For example, the continuation of universal infant free school meals was a manifesto commitment, as was the increase in free childcare from 15 to 30 hours and £150m to protect school sport. All of these commitments make the overall settlement harder to achieve.

Despite being in unarguably a privileged financial position, schools won’t really feel it. Firstly, because the money only stays the same in cash terms, so inflation will partly eat away at it. Secondly, because for schools with nurseries or sixth forms, that funding will decline quite sharply. Thirdly, because there are additional costs for schools – including increases to NI and teacher pensions and possibly upwards pressure on pay in a time of recruitment challenges. Overall, the IFS estimates that schools’ spending per pupil is likely to fall by around 8% in real terms by the end of this Parliament. But as I have frequently said, although that sounds large, it is actually small compared to some other areas – for example adult skills funding has already fallen by 24% last Parliament and local government spending fell by 20%, and both will go down further in the next few years. There is an advantage to being politically popular!

The big unknown – and some heads’ white knight, to mix my metaphors – is school funding reform. There is a clear manifesto commitment from the government to equalise the manifestly unfair system that exists whereby Tower Hamlets pupils receive £7,014 and Bromley pupils receive £4,082. But in a world where there is no extra funding, the only way the underfunded schools can be equalised is by the overfunded schools taking a hit. Hands up who fancies a year on year funding cut on top of the existing tighter finances to sort the system out and help out their fellow heads?

This blog originally appeared on the TES website

Join our mailing list