The government pledged extra cash for schools and SEND at last week’s budget.
Now the dust has settled, here’s what we know…
£2.3bn budget boost means return to 2010 levels (but difficult decisions ahead)
The chancellor Rachel Reeves announced the core schools budget would increase by £2.3 billion next year. However, £1 billion is specifically for high-needs.
The Institute for Fiscal Studies (IFS) has said the increase represents a 1.4 per cent real-terms increase in total spending, or 1.6 per cent in spending per pupil.
Luke Sibieta, an IFS research fellow, said the growth in core school spending would lift spending per pupil, after adjusting for inflation, to about £8,100 – just above its “high point of £8,000 in 2010”.
The Conservatives promised for years that funding rises would restore budgets to 2010 levels in real terms, but inflation and cost rises kept setting the pledge back.
The government has also said the £1.3 billion would “continue to fully fund this summer’s 5.5 per cent pay award for teachers, and help cover pay awards in 2025-26”.
This was expected. When the government accepted the pay rise in July it said that it would provide almost £1.2 billion in the current financial year before rolling the funding into the national funding formula from next year.
But the mention of next year’s pay rises raises the prospect that the 2025 pay award will not attract full additional funding.
The Department for Education also said that “despite the investment, there will still be difficult decisions to take on how money is spent right across the public sector – including in schools”.
SEND cash: is it for schools or to fill council blackholes?
Education secretary Bridget Phillipson said the extra £1 billion in SEND funding would “go directly to providing provision” and represented a 6 per cent real-terms increase.
But this contradicts the Treasury, which said in budget documents that it expected £865 million of the pot would go on reducing councils’ huge SEND deficits.
Treasury documents stated councils would have “discretion” on how they spent the additional cash, but predicted “it is very likely that they will use the funding to reduce their in-year deficit”.
A damning report by the National Audit Office last month revealed the DfE predicted a cumulative deficit on councils’ high-needs funding budgets of about £4.6 billion by March 2026.
The cash was an “important step” to return the system “to financial sustainability”, the Treasury said. It would be “built on” through phase two of the spending review next spring.
National funding formula allocations will be published at the end of this month.
Schools funded ‘at a national level’ for National Insurance rise
The government will raise employers’ NI contributions by 1.2 percentage points to 15 per cent from April, an increase the National Foundation for Educational Research has estimated icould cost schools hundreds of millions of pounds.
The Treasury has said government departments would get funding to compensate public sector organisations, but the amount will not be confirmed until spring.
When Phillipson was asked whether schools and colleges would be “fully compensated” for the rise, she said they “will be compensated at a national level”.
The wording here is important, because there are often winners and losers when funding is distributed to schools, so there is still no guarantee each school will receive all the funding needed.
In the past, the share of cash given to schools with smaller teacher-to-pupil ratios – such as special schools and alternative provision – has been way below what they need.
The DfE must save another £1.9 billion
It wasn’t all good news. The DfE will have to save £1.9 billion as part of a government cost-cutting drive.
Reeves said all departments will have a 2 per cent productivity, efficiency, and savings target from next year.
The DfE said this week it was “always looking” at how it could use its funding “as efficiently as possible to deliver best value” for children.
It pointed to savings through the review of the free schools programme and scrapping the Conservative’s plans for an Advanced British Standard.
It has already wielded the axe to fill a potential £1.5 billion budget black hole to fund teacher pay rises in previous years. Cuts include development courses, teacher “top-up” training and governor recruitment schemes.
Phillipson also urged schools to use their money “more efficiently, wherever possible” as there would be “tough decisions to take on how money is spent” across the public sector.
Breakfast clubs may not be rolled out until April 2026
Labour’s free breakfast clubs for primary pupils may not be rolled out nationwide until April 2026 at the earliest.
The £30 million set aside for the clubs will include money for an “early adopter” scheme, with 750 primaries taking part for a year from April 2025.
It suggests a national roll out – pledged in the party’s manifesto – will come the following year at the earliest.
The DfE said it would share further timings of national rollout in due course.
The new funding also covers the extension of the existing national school breakfast club programme into 2025-26.
The scheme, aimed at schools in the poorest areas, was due to end next July, prompting concerns it would create a “cliff edge” of support for secondary schools – which Labour’s scheme does not cover.
Schools in disadvantaged areas are eligible if they have 40 per cent or more pupils in bands A-F of the income deprivation affecting children index.
The scheme is used by about 2,700 schools.
Extra capital cash only covers existing rebuilds
Reeves announced last week that she would hand the DfE £6.7 million in capital funding next year, a “19 per cent real-terms increase” on this year.
However, documents show this year is a low bar with capital funding falling from £6.2 billion in 2023-24 to £5.5 billion. And high inflation in the construction industry has meant initial estimates have slipped.
The new money includes £1.4 billion to fund the school rebuilding programme in the 2025-26 financial year, up £550 million on the spend this year. But it will not fund any new projects.
The government has not said whether the programme overall would be expanded beyond the roughly 500 projects already announced. Nor has it said what funding would look like in the future.
The capital funding also includes £2.1 billion to “improve the condition of the school estate”, up £300 million compared with this year.
However, officials have said that the new government is reviewing its systems for allocating maintenance cash – such as the condition improvement fund and school capital allocations.
35,000 more private schools pupils likely to join state sector
The government predicts 35,000 private school pupils will move into state schools as a result of the VAT policy change, costing about £300 million after several years.
VAT will be charged on fees from January and the schools will have to pay business rates from April.
The government said this week it expected about 3,000 pupils to move before the end of the 2024-25 academic year and that 35,000 would move “in the long-term” with revenue costs to peak at £300 million “after several years”.
The policy is expected to earn about £1.8 billion which the government said is “expected to have a very significant positive net impact on the exchequer”.
However, ministers are now facing legal action from the Independent Schools Council, an umbrella body for seven associations representing such schools.
The council said its case would centre around alleged breaches of the European Convention on Human Rights (ECHR) and Human Rights Act 1998.
