IFS warns that schools face steepest spending fall since 1970s

26 Apr 17

School spending is set to fall more steeply in real terms than at any time since the 1970s if the current government’s spending plans remain unchanged, the Institute of Fiscal Studies has said.

In an observation published today, the IFS examines the potential implications for freezing school spending, as the government has said it plans to.

As things stand, in 2017–18, day-to-day school spending in England is expected to represent about £38.5bn or £4,800 per pupil in primary schools and £6,200 per pupil in secondary schools (excluding sixth forms).

This translates to a real-terms spending cut in per pupil terms of 6.5% from 2015-16 to 2019-20. This would be the first real-terms cuts per pupil spending since the mid-1990s and the largest fall over a four-year period since at least the late 1970s.

Luke Sibieta, association director for education, employment and evaluation at the IFS, said: “If implemented, this would leave school spending per pupil at about the same level in 2020 as it was in 2010, undoing the increases which were actually afforded during the 2010-2015 parliament.”

Sibieta also noted that plans to replace 152 local funding formulas with a single, national formula would produce both winners and losers. But he added, with overall funding so tight, it will also result in “absolute losers”.

The government has said no school will see a cash loss of more than 3% per pupil or a gain of more than 5.6%, between 2017–18 and 2019–20.

However when combined with the real-term cuts to overall school spending some schools will experience real-term cuts of 10% between 2015-16 and 2019-20, the IFS said.

“Even the biggest winners will get only a real-terms freeze over the same time frame,” Sibieta said.

He commented that it was “not yet clear” how a Labour government would proceed on education funding.

In February, shadow education secretary Angela Rayner said she “whole-heartedly” agreed with the principle behind a fair funding formula but criticised government proposals as unfair.

Shadow chancellor John McDonnell, recently told the NUT conference that it was his party’s priority to oppose the cuts to per-pupil funding.

According to the IFS, freezing per-pupil spending would result in additional spending on schools of around £1bn in 2019-20 compared with existing government plans, or £2bn of extra spending by 2021-22 compared with 2017–18 as pupil numbers increase.

Today’s IFS observation comes as the Public Accounts Committee issued a report criticising the government on its use of capital funding for schools, which is privileging free schools over other types.

The report states: “The Department for Education is spending well over the odds in its bid to create 500 more free schools while other schools are in poor condition.”

MPs also slammed the system for funding new schools and new places in existing schools as “increasingly incoherent” and “poor value for money”.

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