Schools could face cuts of 12 per cent, says Institute for Fiscal Studies

26th March 2015 at 00:01

Schools should brace themselves for cuts of up to 12 per cent over the next Parliament, according to a highly influential thinktank.

The Institute for Fiscal Studies (IFS) said commitments made by all three of the main parties were “much less generous” than suggested and could mean that spending would fall by 7 per cent in real terms between 2014-15 to 2019-20.

But the cuts could rise to 12 per cent once increases in National Insurance and pension contributions and the likely growth in public sector earnings were taken into account.

Schools have been “remarkably well protected” under the coalition government, the IFS says in its Election Briefing Note, but it predicts that they could soon be “squeezed harder”.

Labour and the Liberal Democrats have committed to protecting the overall education budget in real terms from early years through to 16-19 education, and the Conservatives have committed to protecting the spending per pupil.

But pressures, including a rise in pupil numbers as well as higher school costs and salaries, mean that schools will face a much tougher five years.

"Pupil numbers are expected to grow by 7 per cent between January 2016 and January 2020, whilst economy-wide inflation between 2015-16 and 2019-20 is currently forecast to be 7.7 per cent,” the report states.

"As a result, the overall level of school spending could grow by similar amounts under the different proposals. However, if only just met, all these proposals imply real-terms cuts in spending per pupil."

When this is combined with spending plans for 2015-16, these proposals "imply a real-terms cut in school spending per pupil of about 7% between 2014-15 and 2019-20", the report calculates.

It adds: "This increases to 9 per cent if we account for increases in National Insurance and pension contributions and to 12 per cent if we also account for the Office for Budget Responsibility's assumption for likely growth in public-sector earnings. The plans from all three main parties are therefore much less generous than the small real-terms increase in spending per pupil experienced over the current parliament."

Luke Sibieta, programme director at the IFS and author of the report, said: “School spending in England has been one of the most protected areas of public spending under the coalition government. However, it is likely to be squeezed harder in the next parliament.

“Schools face significant cost pressures from rising pupil numbers, increased employer pension and National Insurance contributions and potential upward pressure on wages.”

The report comes just a week after the Association for School and College Leaders (ASCL) published a survey that revealed more than half of secondary schools were planning to make staff redundant, axe courses or increase class sizes to stave off a funding “disaster”.

ASCL deputy general secretary Malcolm Trobe said that the IFS study presented "a bleak picture for education funding over the next parliament, identifying significant additional cost pressures which add up to between 7 and 12 per cent on budgets".

He added: "It is imperative that the government elected in May addresses this issue quickly and ensures that education funding is sufficient, sustainable and equitable. We recognise that there is considerable pressure on the national budget but the country must invest in education both for its long-term prosperity and, most importantly, the future of our children."

Related stories: 

Jobs at risk as schools face ‘financial disaster’ – 20 March, 2015

Miliband: Labour will protect the overall education budget – 12 February, 2015

Clegg pledges to protect school budgets against inflation – 12 February, 2015

Cameron: schools will face real-terms funding cuts under Tories – 2 February, 2015


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