IFS: £1.1bn needed to reverse FE funding cuts

Even with an extra £400m for FE, per-student funding will be 7 per cent less in real terms than in 2010, finds IFS report

£1.1bn needed to reverse FE funding cuts, says IFS

Some £1.1 billion in additional funding is needed to fully reverse the cuts to further education since 2010, new research reveals today.

A report by the Institute for Fiscal Studies and the Nuffield Foundation says that an additional £1.1 billion is needed by 2022-23 on top of the current spending plans. When T levels are factored in, the figure needed to maintain per-student spending rises to £1.4 billion.

The report also points out: "The rise of £400 million is in cash terms and relative to spending in 2019-20, which equates to an extra £300 million in 2019-20 prices. It includes planned rises in T-level spending, which is likely to be lower than previous spending plans, given the slower-than-expected roll-out of T levels."


Background: FE the 'big loser' in education funding

News: £400m boost for colleges: 16-18 funding finally raised

Opinion: 'Education funding cuts bring a human cost'


And, the report says, student numbers are growing: another £300 million is needed on top of current plans to avoid de facto cuts in per-student funding. It cites Office for National Statistics projections which say that the number of young people in further education or school sixth forms is likely to grow by around 6 per cent between 2019 and 2022.

College funding cuts

The report says: “This presents opportunities and challenges for the sector. In a financial sense, it should allow budgets to grow again as the student bodies of institutions increase again. On the other hand, these extra students clearly require extra teachers and resources to provide their education. 

"The overall sector as a whole will thus become more costly for the government for a given level of spending per student. Having gone through significant reorganisations and mergers over the last 10 years, it is not clear whether colleges and sixth forms are well placed to reorganise again and grow to meet rising student numbers.”

The report repeats the statement from last year's report, that 16 to 18 funding has seen the biggest squeeze in education in recent years. It says that school sixth forms have seen budget cuts of 23 per cent since 2010-11, and further education and sixth-form college funding per student has fallen by about 12 per cent over the same period.

Tim Gardam, chief executive of the Nuffield Foundation, said: "While we welcome the additional investment in schools, the failure to fully reverse the cuts to further education remains a concern for the half of 18-year-olds who do not go to university and who are, on average, already less advantaged than those who do."

Adult education

When it comes to adult education, classroom-based teaching has fallen by nearly two-thirds over the past 15 years. These cuts have been driven by a decrease in learner numbers: there were 4.4 million adult learners in 2004-05, in 2017-18, there were just 1.5 million. 

Some 54 per cent of the funding spent on adult education and skills was spent on apprenticeships in 2018-19. This is up from the 21 per cent that was spent on apprenticeships and work-based learning within adult education in 2003-04. 

The report sets out challenges the IFS predicts the sector will have to face: they include delivering high-quality education following the decade of funding cuts, the introduction of T levels, challenging levels of apprenticeship starts and rising employer contributions to the Teacher Pension Scheme. 

'Focus on sufficiency'

The Sixth Form Colleges Association's deputy chief executive, James Kewin, said rolling back the cuts imposed since 2010 was the wrong target. 

“The key issue to focus on is sufficiency – what level of funding is required to deliver a high-quality sixth-form education now, and in the future? It is also important to shift the focus from T levels on to the vast majority of 16- to 18-year-olds that pursue, and will continue to pursue, a non-technical course," he said.

“In Gavin Williamson and Michelle Donelan we have a ministerial team that not only understands the sector, but one that has delivered additional funding at the earliest opportunity. Of course, much more is required, but this month’s spending round is a positive first step to addressing the long-term underinvestment set out in today’s report."

David Hughes, the Association of Colleges' chief executive, said: “Today’s report from the Institute for Fiscal Studies shows the reality of a decade of cuts to colleges. The consequences of the decline in spending and real-term freezes have meant fewer adult learners, squeezed budgets and lack of resource to provide the skills the country needs.

"While the chancellor’s recent spending announcement of £400 million for sixth forms and colleges was welcome and a further £100 million for teacher’s pensions a step in the right direction, it must be followed by long-term investment to reverse 10 years of continuous cuts and reform. Only this kind of investment will give thousands of people the opportunities they deserve.”

A Department for Education spokesperson said: “We recently announced a £14 billion investment in schools – the biggest cash boost for a decade, which the independent IFS has said will restore schools’ funding to previous levels in real terms per pupil by 2022-23.

“Alongside this, we announced a significant real terms increase in funding for 16 to 19 year olds in 2020-21 to make sure we can continue to develop world class education to rival countries on the continent. We also provided £700 million extra for children with special educational needs and disabilities.

“Together this package will give all young people the same opportunities to succeed and access the education that’s right for them regardless of where they grow up. The prime minister is clear that education is one of his main priorities, and we want a system that boosts productivity, improves social mobility and equips children and adults with the skills and knowledge they need to succeed.” 

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