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School funding and the autumn budget: What you need to know

With pressure mounting on the government ahead of Wednesday's budget, Tes answers the key questions on school funding

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Philip Hammond, chancellor of the exchequer, is under enormous pressure from teachers, parents, schools and education unions to provide more money for schools.

The struggle of schools trying to balance the books was highlighted last week, with a primary school in Prime Minister Theresa May’s constituency appealing to parents for help in buying basic items such as pens, pencils and books.

Here, Tes tackles some of the main questions about school funding.

Is the government protecting per-pupil funding in real terms?

In so much as it is not being cut, yes. The "protection" amounts to a freeze in funding for the next two years, according to the Institute for Fiscal Studies.

But this comes on the back of a 5 per cent cut in per-pupil funding between 2015 and 2017. Unions say this means that schools now need more than a freeze, because of the damage caused in recent years by cuts to staff and resources.

Will schools have to fund pay rises out of their existing budgets?

Yes, unless more money is announced on Wednesday.

The Treasury has indicated that there should be "flexibility" for the 1 per cent cap on teachers' pay to be lifted – and unions want an immediate 5 per cent uplift. 

Schools standards minister Nick Gibb, speaking at the annual conference of the National Association of School Business Managers last week, said that “schools will have to live within their budget as they consider pay rises going forward”.

Are we expecting extra school funding to be announced on Wednesday?

The chanceller is remaining tight-lipped, but is not known for extravagance when it comes to spending public money.

He has already given an indication of his stance regarding school funding. Earlier this year he praised education secretary Justine Greening for reallocating £1.3 billion of DfE spending into school budgets.

Hammond told MPs: “She has put extra money into the frontline schools budget by reprioritising the wider education budget and finding efficiencies across her department. That is the way to do a fiscally prudent protection of our public services”.

How much extra money do schools need?

Headteachers claim that an extra £2 billion a year is needed just to get schools back up to 2015-16 funding levels.

The Confederation of British Industry has echoed the call for more investment in education.

Its budget representation said that the government should “replenish capital budgets” and added: “The commitment to protecting per-pupil funding in real terms for every year of this parliament should be extended until 2021-22. In addition, gaps in capital funding need to be met – starting with the £700m moved out of the capital and free school budgets.

"As the fiscal position improves, a more ambitious target of increasing per pupil in real terms spending should be introduced”.

Are schools sitting on massive reserves?

The government says that schools have around £4.3 billion in surpluses. It’s a big number, but there are thousands of schools.

In the case of academy trusts, the total “cumulative surplus” stands at £2.2 billion. This works out at an average of £811,000 per trust, according to the DfE’s consolidated annual report for the academy sector released last month.

Local authorities have around £2.1 billion in schools reserves, according to the Department for Communities and Local Government.

But those schools with reserves are holding on average only one month's funds in surplus, according to Kevin Courtney, joint general secretary of the NEU teaching union.

However, the DfE's permanent secretary, Jonathan Slater, recently suggested that school reserves should be drawn on to make ends meet.

With a funding shortfall of some £2 billion a year, according to teaching unions, this means that schools would be left without a penny in reserves within two years.

This scenario was echoed in a Tes and National Association of School Business Management survey of school business professionals released last week, in which 74 per cent believed that their school’s reserves will be used up by 2019.

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