New “parachute payments” could help protect schools from the financial implications of falling rolls, a report has proposed.
Primary pupil numbers have been dropping nationally since 2019, and secondary numbers are due to peak in 2026 before falling, as a population bulge caused by the 2000s baby boom makes its way through the education system.
As most school funding is allocated on a per-pupil basis, this has put primary schools at risk of closure, particularly in London.
The effects of Brexit, emigration and the cost of housing has prompted a steeper drop in numbers in the capital’s schools.
The National Foundation for Educational Research said councils nationally expected primary pupil numbers to fall by 4.5 per cent between 2022 and 2028. In inner London, the drop is expected to be closer to 12 per cent.
Schools can get falling rolls funding from the government, but only if they can demonstrate that pupil numbers are expected to rise within three to five years.
The NFER said this stipulation “is likely to mean most schools with falling numbers which are seeing their intake fall year-on-year are ineligible to apply”.
Instead, reformed “parachute payments” would give schools some breathing room whilst pupil numbers are falling quicky.
“If similar payments were to be made more widely available in future, it would buy schools some time to adjust.”
‘Clear and present danger’
Authors warned of a “clear and present danger to the financial sustainability of many primary schools, particularly in London, but beginning to affect other areas too”.
“Falling pupil numbers should not be used as an opportunity to cut the total school budget. Instead, increasing per-pupil funding rates whilst numbers fall would give schools the means to improve their provision, including by cutting class sizes.”
Today’s report said the “most obvious way” for schools to respond to falling rolls is by reducing costs.
But it “may be difficult for school leaders to cut staff by reducing the number of classes in a year group, unless pupil numbers fall dramatically”.
Schools can also reduce costs by sharing staff and office functions, or set up informal partnerships with neighbouring schools and councils to cap new admissions in certain year groups.
Tiffnie Harris, primary specialist at the Association of School and College Leaders, warned schools had “limited ability to reduce costs, as many of these are fixed and they still must have the staff necessary to keep the school running”.
“As a bare minimum [the government] must avoid the temptation of using the money from falling rolls as a ‘saving’ for the Treasury and reinvest it to bolster funding rates which are currently wholly insufficient.”
‘Not all space suitable for nurseries’
Labour plans to fill more than 3,000 empty classrooms with nursery provision. But the NFER report warned “not all space is suitable for nursery-age children”, and offering nursery classes would only help if they had a net positive impact on a school’s finances.
“Given that half of all pre-school childcare providers reported that their current income did not fully cover their costs in 2023, it is doubtful many schools will achieve this.”
Closing schools is also a “challenging process”.
A primary school “can represent the heartbeat of the community and a more isolated area may be facing the prospect of losing its only school”.
Local authorities “can face fierce opposition to any such proposals from parents and local residents”.
Paul Whiteman, leader of the NAHT leaders’ union, added: “We also know that trends in pupil numbers can be temporary and might be reversed in the long-run, leading to a shortage of places.”
The NFER has previously found some evidence that numbers are falling more sharply in maintained schools than academies in the same area.
The new Labour government is planning legislation to force all schools to cooperate with councils on admissions and place planning.
This could “help ‘spread the pain’ and allow LAs a wider set of options when trying to strategically manage admissions in a local area”.
