Pay costs turn school funding freeze into real terms cuts

Institute for Fiscal Studies warns that extra schools cash from DfE will not cover rising costs

funding, cuts, IFS, Institute for Fiscal Studies, schools

School spending is likely to suffer real terms cuts this year and next despite Department for Education pledges to protect funding, the Institute for Fiscal Studies has said.

The respected thinktank today launched its first annual report on education spending in England, which reiterated its conclusion that schools' real-terms per-pupil spending fell by 8 per cent between 2009-10 and 2017-18.

Last year, then education secretary Justine Greening announced an extra £1.3 billion for schools across 2018-19 and 2019-20 which she said would maintain real-terms per pupil funding.

However, the IFS today warned about the impact of schools’ costs, which researcher Luke Sibieta said are rising faster than general inflation.

He said that school spending per pupil “is due to be protected in real terms going forwards”.

However, he added: “The main caveat, and I’m sure any head teacher would be bringing this up very quickly, is that schools’ costs are now rising faster than general inflation.”

He said that until recently, schools’ costs were probably rising slower than overall inflation because of the public sector pay cap, but that lifting this, together with additional pension and national insurance contributions, meant this was “no longer the case”.

Mr Sibieta said: “We estimate that between 2015 and 2019 general inflation is due to be about 7 per cent and public sector pay per head is due to rise by about 11 per cent between 2015-16 and 2019-20.

“In effect, rather than being a real-terms freeze in school spending per pupil, if you measure the cost increases particularly for schools there would probably be a real-terms cut.

“In addition to that, schools are having to cover more services that have previously been provided by local authorities, and secondary schools are having to make up for the fact that they are seeing cuts to sixth form funding.”

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