Schools will be able to afford less than half of the 2.8 per cent pay rise proposed for next year, the Department for Education has admitted.
In its annual school costs technical note, the Department said it expected school funding to rise by 4.3 per cent next year, while costs will rise by 3.6 per cent.
But that headroom only leaves enough to pay for a 1.3 per cent pay rise, when government has recommended teacher pay rises by 2.8 per cent.
Assuming school support staff pay rose by the same amount, it would leave schools having to fund the money for most of the rise from their own budgets.
Schools were warned this would happen. In its evidence to the School Teachers’ Review Body, the DfE said “most schools will need to supplement the new funding they receive in [financial year] 2025-26 with efficiencies”.
But the reality of that decision has only recently started to sink in.
Leaders recently spoke of their dismay after receiving funding letters and discovering their funding would on average rise by just 0.5 per cent next year, once the impact of previous pay rises is taken into account.
Some even fear they will lose money in cash terms because their local councils are siphoning off money from the core schools budget to prop up the creaking high needs system.
Schools will be forced to make cuts
Today’s note states that the difference between the 4.3 per cent increase in funding next year and the 3.6 per cent increase in costs “indicates that schools would be able to raise their overall expenditure by a further 0.8 per cent on average, or around £400 million at the national level in 2025-26”.
However, this is a “central estimate” carrying a “level of uncertainty” that means it could be as much as £200 million higher or lower.
“Looking uniformly across both support staff and teachers’ pay together, the £400 million headroom matches the costs that would arise in 2025-26 from an increase in pay of around 1.3 per cent.
“If schools find a 1 per cent efficiency on their budgets, this would represent a cash saving on the headroom of £550 million, which is equivalent to covering 1.7 per cent of staff pay awards.”
That would still leave over a third of the rise unfunded.
Falling rolls factored-in
To reach its estimates for the increase in schools’ costs, the note confirms that it has factored in falls in pupil numbers.
This is despite calls from various education organisations to leave funding where it is in cash terms as pupil numbers fall dramatically over the coming years.
The note also confirms schools were under-funded in the current financial year.
“For the current financial year, we estimate that the funding that goes to mainstream schools has risen by 7.1 per cent. On average, at the national level, their costs are estimated to be increasing by 7.7 per cent.”
Some schools will be worse-affected than others, because the analysis does “not consider the position of schools’ reserves”.
