Today’s PAC report on the financial sustainability of schools comes during a period of “the most significant financial pressure” since the mid-1990s.
Funding per pupil is reducing in real terms as schools in England will have to find efficiency savings rising from £1.1bn in 2016-17 to £3bn by 2019-20 – an 8% cut in their total budget, according to the research
In the 2015 Spending Review, the government increased the core schools budget by 7.7% in cash terms, from £39.6bn in 2015–16 to £42.6bn in 2019–20. However, pupil numbers are expected to increase over the same period by 6.3%, from 7,262,000 in 2015–16 to 7,720,000 in 2019–20.
This means that the amount that schools receive per pupil will, on average, rise only by 1.3%, from £5,447 in 2015–16 to £5,519 in 2019–29; a real-terms reduction once inflation is taken into account.
Over this period the Department for Education believes schools can save £1.3bn through better procurement and a further £1.7bn by using staff more efficiently.
However, the PAC concluded the DfE “does not seem to understand the pressures that schools are already under” and is not well-placed to act quickly if efficiency measures threaten the quality of education and its outcomes.
Headteachers told the committee they have already made cuts in important areas and their ability to make further savings is limited.
The report was critical of the DfE’s reliance on existing information such as Ofsted inspections and exam results for judging the impact of savings and called for a better real-time method of monitoring the changes to school funding.
It is feared without adequate monitoring of the breadth of the curriculum and class sizes it won’t be possible for the government to identify and address declining standards.
The committee also raised concerns about the department’s savings estimates, which it states “do not properly consider the impact of policy changes on cost pressures” – for example, curriculum changes that require new textbooks and materials.
Another issue mentioned was Whitehall’s apparent inability to learn lessons from previous cost saving efforts, “in particular from how over-ambitious efficiency targets in the NHS proved counter-productive”.
Meg Hillier, chair of the PAC, said: “Pupils’ futures are at risk if the Department for Education fails to act on the warnings in our report.
“It sets out more evidence of what increasingly appears to be a collective delusion in government about the scope for further efficiency savings in public services.”
She added: “Grand plans drawn up in Whitehall are dangerous if they are implemented without regard to real-world consequences and we will expect to see measures to address our concerns as a matter of urgency.”
The report warned that staff accounted for three quarters of schools’ spending and it would be difficult to achieve savings on that front without detrimental effects on the quality of education and educational outcomes.
The committee added that the government had yet to publish its assessment of the withdrawal of the Education Services Grant, which funded the education services that local authorities provide to maintained schools.
It will be phased out by 2018/19, saving £615m per year, with around £190m expected to be returned to schools by the DfE.
Malcolm Trobe, interim general secretary of the Association of School and College Leaders, echoed the view that the government did not understand the financial pressures faced by schools, adding “the DfE has buried its head in the sand over this issue and resorts to repeatedly stating that school spending is at record levels when it is fully aware that this is only because of rising pupil numbers."
He said the DfE’s expectation of further efficiency savings were “simply unrealistic” without jeopardising school standards.
