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Investigation: How a 17-year funding boom left schools at financial breaking point

The government insists schools have never been so well funded, yet headteachers are being forced to cut jobs and subjects. Why, despite a real influx of cash, are schools struggling to balance the books?

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The government insists schools have never been so well funded, yet headteachers are being forced to cut jobs and subjects. Why, despite a real influx of cash, are schools struggling to balance the books?

The new education secretary, Damian Hinds, prompted howls of outrage this week from teachers in the grip of a funding crisis, by saying schools had “more money than ever before in the history of the country”. 

But – although his claim does not take into account the real-terms falls in school funding since 2015 – he is correct in suggesting that school budgets are far bigger than in the past, per pupil – even after taking inflation into account.

A new Tes analysis of figures published by the Institute for Fiscal Studies shows that, since 1997, per-pupil budgets have risen in real terms by 82 per cent on average in secondaries and by 106 per cent in primaries.

Yet today schools have nothing left in their budgets and say they are at “breaking point”.

John Tomsett, headteacher of Huntington School in York, summed up the anger felt by many of his peers: “In this fifth or sixth biggest economy in the world, you’ve still got schools that have rain coming through the ceiling.”

Where has all the money gone?

So where has the money gone? “This is the most important question in education policy today,” according to a former Treasury official who worked for the government in the 2000s, a period during which schools benefited from year-on-year 5 per cent funding increases.

He argues that a lot of this extra money was wasted on expensive “gimmicks”, including schemes encouraging personalised learning and others targeting children’s social and emotional skills. He also includes teaching assistants on his list of investments that offered poor value for money.

And it is teaching assistants that have accounted for more of the extra money over the last two decades than anything else. Between 1999-2000 and 2012-13, TAs swallowed up 44 per cent of the increased funding in primary schools – and up to 38 per cent in secondary schools, according to the IFS.

A “small, but notable” portion – around 20 to 30 per cent – of the increased per-pupil expenditure between 1999-2000 and 2012-13 translated into more teachers, paid higher salaries.

And an unspecified “substantial proportion” of the cash went on non-staffing such as ICT, energy, professional services and learning resources.

The amount of extra funding overall has varied across the country, with schools in deprived areas benefiting most from the money.

Rising costs

Schools now feeling the squeeze are left in an uncomfortable position because so much of their budgets is spent on staff. Cutting wage bills is not easy: redundancy pay-offs create short-term costs – and many would argue that it is the freezing of teacher salaries in recent years that has led directly to today’s recruitment crisis.

Headteachers and unions also point out that behind the increase in staffing is a huge shift in the role that schools are being asked to play, as they are required to take on more and more of society’s responsibilities. 

Andrew Morris, assistant general secretary of the NEU teaching union, said that schools had only just reached a sustainable level of funding before the current pressures kicked in. “The Labour years weren’t the fat years: they were the first time in years when schools were properly resourced," he said.

A Department for Education spokesperson said: "We are investing an additional £1.3 billion in schools funding, over and above existing plans, with core schools funding rising from almost £41 billion in 2017-18 to £43.5 billion in 2019-20.

“We provide schools with support as part of the School Efficiency and Financial Health programme to ensure they get the best value from their resources.”

This is an edited article from the 2 January edition of Tes. Subscribers can read the full article here. To subscribe, click here. This week's Tes magazine is available in all good newsagents. To download the digital edition, Android users can click here and iOS users can click here

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