Squeezed school budgets are set to take another hit after the government revealed it won’t fully cover growth funding for the “unprecedented” rise in the number of post-16 pupils.
Instead, the Department for Education will only cover two-thirds of what schools and sixth-form colleges expected as student increases have leapt above the levels ministers had budgeted for.
Sector leaders are urging the government to correct “years of underinvestment in post-16 education” to ensure schools cope with the continued growth in numbers.
“In-year growth funding” plugs gaps between expected pupil numbers in post-16 settings – used to calculate initial allocations – and the number actually in class as of November.
It is meant to help with cashflow for schools and colleges that end up taking on more students than they were expecting.
‘Very large’ increase in older students
But in an update published this week, the DfE noted that while the “very large” increase in 16 to 19-year-olds in education this year was “positive”, it was “significantly above the budget for in-year payments”.
“The current growth is significantly above the budget available for in-year payments, and so we cannot fully fund this growth.
“We’ve always stated that our method depends on affordability, but we understand that lower payments will be unexpected.”
Anne Murdoch, of the ASCL leaders’ union, said: “In some cases extra groups will have been created and additional teachers hired to manage the increase in the number of students, and schools and colleges may have been relying on this funding to cover the additional expense.
“They will have to cover part of this from existing budgets which are already stretched exceptionally thin.”
For this year, a new step, called “the affordability factor”, has been added to the way schools calculate how much in-year growth they can claim.
This means only two thirds of the funding difference between expected and actual student numbers can be claimed.
Impact ‘likely small in practice’
Luke Sibieta, of the Institute for Fiscal Studies, said the effect of the change was likely to be “relatively small in practice”.
But it was “certainly noteworthy” if “lots of colleges and sixth forms are seeing high levels of exceptional in-year growth in student number”.
“If sustained, it implies higher funding needs in future years, just as the trade-offs in the upcoming spending review look even more challenging.”
The department did, though, confirm a 3.78 per cent post-16 funding rate rise, worth about £250 million.
Bill Watkin, the chief executive of the Sixth Form Colleges Association, said all 16 to 19 institutions would have “a welcome increase” in the funding rate next year.
“We live in financially difficult times, with many calls on public money and considerable pressure to make cuts. In that context, today’s central announcement of a 3.78 per cent increase is a very welcome development.”
‘Years of underinvestment’
Schools will be informed of their growth payments by the end of this month, before receiving the cash in May. Leaders have been told not to assume these rules will apply next year, as no decisions have been made yet.
Murdoch added: “While the overall funding rate rise is welcome, it follows years of underinvestment in post-16 education and must not be offset by cuts elsewhere.
“The number of students in post-16 settings is expected to continue growing over the next few years and the government needs to ensure that sixth forms and colleges have the resources they need to support them.”
Meanwhile, this year’s 10 per cent T-level funding uplift has not been applied for 2025-26. The DfE said it would “confirm the position” on the uplift “in due course”.
