Boosting school funding improves pupils’ attainment, but only by a “modest” amount, Department for Education research has found.

The research comes after education secretary Justine Greening announced that the schools budget was being raised by £1.3billion by finding “efficiencies” elsewhere in the education budget. The Institute for Fiscal Studies has said this amounts to a 4 per cent real terms cut.

A literature review published this morning finds that, overall, spending an extra £1,000 per pupil can lead to better GCSE results, but only by a “fraction of a grade”.

However, the effects varied significantly depending on the methodologies used in the difference pieces of research.

The literature review also finds: “The majority of the evidence supports the idea that additional spending has a slightly greater impact on the attainment of FSM pupils than spending on other pupils.”

It notes that evidence from the Programme for International Student Assessment (Pisa) supports the conclusion that spending can play an important role in educational achievement, “although other factors explain the majority of the variation in Pisa scores between countries”.

Significant evidence gaps remain, the researchers found. The report says: “Some could be filled by further research using the opportunity created to examine schools affected by the changes in funding arising from the introduction of the National Funding Formula.”

As well as the literature review, the report includes new analysis carried out by the department to judge whether changes in school funding over the course of the 2010 to 2015 Parliament had an impact on pupil outcomes in England. 

Looking at schools that had lost funding during this period, it found that, at key stage 2, lower per-pupil funding was associated with very slightly lower attainment. The report states: “Our best estimates suggest a 1 per cent change in funding is associated with a 0.062-0.071 percentage point (pp) change in the proportion of pupils achieving at least level 4 in 2015.”

At key stage 4, a decrease in per-pupil funding did not result in a statistically significant change in attainment, after taking into account the fact that KS4 attainment was measured differently from 2013 onwards, it adds.

Concluding, the report states: “The results of our analysis do fit with prior evidence that there is a link between funding and pupil outcomes, but that the effect size is small and only statistically significant at primary level and not at secondary level.”