School bosses have spoken of their surprise that their budgets will rise by about 0.5 per cent per pupil next year, with some saying they will lose money.
Academy trusts have begun to receive letters setting out their final funding allocations for the next financial year, which begins in April.
Schools Week spoke to multiple leaders who said their allocations were much lower than they expected, and would not cover anticipated cost rises of 3.6 per cent.
Various grants from last year to help schools afford pay rises have now been rolled into the national funding formula’s baseline.
The government allocated £1.3 billion in extra mainstream funding for 2025-26 at the autumn budget.
But although this works out as a 2.2 per cent increase in school funding, about 1.3 per cent of that will have to fund pay rises awarded last year that fall between April and August of this year.
This leaves leeway of about 0.9 per cent nationally, but some schools will get even less. In comparison, the Institute for Fiscal Studies predicts cost increases of 3.6 per cent.
‘Simply not enough’
Julia Harnden, the ASCL’s funding specialist, said the union was “extremely concerned” that the funding was not enough for most schools to meet “the reality of rising costs”.
“The additional funding to support last year’s teacher pay award was welcome and necessary, and it is logical that it has been baked into school funding allocations.
“However, the amount of new money available for many schools is simply not enough to cover cost pressures over the next year.”
She said that as budget allocations were confirmed, school leaders were left with no choice but to make cuts. In many cases, this was on top of cuts that they had already had to make in previous years.
Benedicte Yue, the chief financial officer of the River Learning Trust, said the headline increase in school funding was misleading as it did not represent additional money “but the delivery of existing commitments”.
She said per-pupil funding was rising 0.5 per cent on average across her trust.
‘A growing disconnect’
“There is therefore a growing disconnect between income and expenditure and, without additional funding, many trusts are projecting deficits in 2025-26.”
“We very much welcome the ambition of this government to break down barriers to opportunity, to support teachers’ recruitment, to have an inclusive approach to SEND, to tackle child poverty, offer wider curriculum and enrichment opportunities…. but this is going to be hard with this level of investment.”
Paul Edmond, the chief financial officer at HEART Academies Trust, said its per-pupil funding was “actually reducing for next year when compared with 2024-25, on a like-for-like basis”.
The rolling-in of the pay and pension grants into the national funding formula left it with an uplift of just 0.5 per cent.
But its local authority, Bedford, has been granted permission to transfer 0.9 per cent of its core schools funding, £1.6 million, to its high-needs budget to deal with crippling SEND costs. This leaves the trust facing a 0.3 per cent reduction in per-pupil funding.
‘An almost impossible position’
“A 0.5 per cent uplift would have been difficult enough to manage when we already know salary inflation next year will be closer to 3 per cent, particularly as we have spent the best part of a decade finding efficiencies and savings.
“Achieving a balanced budget with a 0.3 per cent reduction in funding whilst maintaining high expectations for pupil progress, student attainment, high-quality SEND provision, pupil and staff retention and wellbeing, safe and secure buildings, etc, puts us in an almost impossible situation.”
Multiple other trusts said they believed their schools would also receive a 0.5 per cent uplift. This is understood to be the case for some very large trusts and for those with only a few schools.
A source of further uncertainty is the government’s recommendation of a 2.8 per cent pay rise for teachers from September. If the School Teachers’ Review Body recommends a higher amount and it is accepted, schools will be stretched further.
The Department for Education was approached for comment.
