Exclusive: DfE believes more than a quarter of schools spend too much money

Tes investigation uses previously unpublished DfE data to reveal how officials believe schools can save £3 billion

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The government believes more than a quarter of England's state schools are spending more than they need to across a range of areas from teaching staff to ICT, a Tes investigation reveals.

The finding is contained in unpublished Department for Education data revealing how officials think schools "could achieve" the £3 billion of savings they have been told to make by 2019-20.

The disclosure comes amid mounting pressure on the government to boost school funding, and follows yesterday's promises by Labour and the Liberal Democrats to reverse the £3 billion cuts.

The DfE data, revealed through a freedom of information request, shows that officials ranked every mainstream school in England on the amount they spent on 12 different areas, in order to "test the level of challenge in achieving £3 billion of efficiency savings on per-pupil funding".

It shows that these savings would be achievable if, for each of the 12 areas, somewhere between 25 per cent and 40 per cent of the highest-spending schools reduced their budgets in line with "similar" schools.

A Tes analysis of the data also shows that saving £3 billion using the DfE's method would involve schools collectively cutting their budgets for teacher pay by more than £500 million, as well as:

  • a £400 million cut from the education support staff bill
  • a further £750 million saving from supply staff, premises staff, back office staff, catering staff, staff training and staff-related insurance; plus 
  • £1.3 billion in non-staff savings such as premises, back office, energy and consultancy costs.

'Risking school standards'

But Peter Sellen, chief economist at the Education Policy Institute, said: “It is very uncertain whether such savings can be made without harming standards, and we don't know whether cutting anything like £500 million from teaching budgets will be achievable.”

And Russell Hobby, general secretary of the NAHT headteachers' union, questioned whether the figures were realistic. He said: “I just don’t believe these efficiencies are available in the non-staffing budget – I think the DfE is downplaying the impact [the £3billion saving] will have on staffing.”

In a Tes article today, James Bowen, director of the NAHT Edge union for aspiring school leaders, said the DfE's insistence that schools could address the funding shortfall through efficiency savings is "not just unjustifiable, it’s insulting and reveals a worrying misunderstanding of how schools operate". He added: "The idea that up until now schools have just been frittering money away is a nonsense."

How the DfE arrived at its figures

DfE officials made their calculations by grouping similar schools together based on the phase of education taught, attainment scores, location, levels of disadvantage, levels of special educational needs and schools’ organisational structure – for example, if they are part of a multi-academy trust.

They then compared the per-pupil amount spent by schools under 12 separate budget headings, including teaching staff, supply teaching staff, education support staff, premises, back office, catering, "other staff", energy, non-ICT resources, ICT resources, education consultancy and "other expenditure".

The department's FOI response said: "Potential savings were calculated by grouping schools together based on their characteristics ... ranking schools based on their per-pupil spending, and calculating how much could be saved if the highest-spending school came down to certain benchmarks. The analysis produced a broad range of potential savings to illustrate what schools could achieve."

The £3 billion saving that the DfE told the National Audit Office was required, for its report on school funding last December, assumed that £1.3 billion of savings would come from procurement, with a further £1.7 billion from staffing.  Tes has ascertained that this was based on between 25 per cent and 40 per cent of schools reducing their spending in each of the 12 budget areas.

'Significant scope for efficiency'

A DfE spokesman said: “Our analysis – which was outlined in the NAO’s report – compared spending across schools facing similar levels of challenge and achieving similar levels of attainment and showed there is significant scope for efficiency. 

“It is important to be clear that the figures from the various scenarios are in no way targets for savings – this would be misunderstanding the analysis. They are a way of testing and illustrating the achievability of the £3 billion of total efficiency savings on per-pupil funding by 2019-20.

“We recognise that schools are facing cost pressures but we are confident that they are well-placed to respond. That is why we are also providing additional support to schools to help them use their funding in the most cost-effective ways, including improving the way they buy goods and services, while our recently published School Buying Strategy is designed to help schools save over £1 billion a year by 2019-20 on non-staff spend.”

Read the full investigation in tomorrow’s Tes magazine, which features a funding cuts special, exploring the consequences of the cash shortfall being felt across the schools sector. It will be on sale in all good newsagents. To download the digital edition, Android users can click here and iOS users can click here

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