Warning that Reeves’ spending increases don’t go far enough
Schools are set to see a share of billions in additional funding, after Rachel Reeves made several spending announcements in her budget speech last week. There are already warnings however that much of the money could be swallowed up by existing deficits.
Foremost among the announcements was an increase to the core schools budget of £2.3 billion for the 2025/26 financial year – this should amount to a real terms increase of around 1.8 per cent. Of this, around £1 billion is set aside for SEND and alternative provision, however while councils will have discretion on how this is used, even the Treasury expects that most will choose to reduce their in-year deficits. Treasury documents estimate it will clear £865 million from SEND deficits in 2025-26.
Commenting on the additional SEND funding, Jon Andrews, head of analysis at the Education Policy Institute, said: ‘The government is right to prioritise funding for special educational needs, but £1 billion represents a quarter of the deficits that the National Audit Office estimates that local authorities have accumulated. Given the perilous state of local authority budgets, clarity on how that funding will be allocated or what it is intended for is now urgently required. If the situation for local authorities has not been fundamentally changed, then we still risk services for our most vulnerable being cut.’
As well as the increase to the core schools’ budget, the DfE will also receive £6.7 billion in capital funding next year, which Reeves said was a 19 per cent real terms increase on this year. Of this. £1.4 billion is to deliver the existing School Rebuilding Programme, originally announced in 2020. The overall figure also includes £2.1 billion for school maintenance – an increase of £300 million compared to last year.
Policies previously announced were confirmed in the budget, with £15 million to set up breakfast clubs in schools, and confirmation that VAT will apply to independent school fees from January 2025, and that those schools will pay business rates from April 2025. The government expects the changes for the independent sector to raise £1.8 billion by 2029/30, although that figure will depend on how many pupils move to the state sector as a result. To mitigate any impact on military families, it was announced that funding allocated to the continuity of education allowance (CEA) will be increased so it continues to cover the same proportion of fees.
Elsewhere in the budget an increase in employer national insurance (NI) contributions of 1.2 percentage points was confirmed, and the Treasury has indicated that there will be additional funding for schools and colleges to assist in meeting these obligations. However, it is not yet clear whether that will amount to them being fully funded.
Julia Harnden, Funding Specialist at the Association of School and College Leaders commented “Although there are many things in today’s Budget to be positive about, there is an awful lot more to do and much of what we have heard represents relatively small spending commitments which do not match the level of investment that the education system requires. Today’s Budget must just be a starting point for a programme of investment in education and the other public services that have been so badly neglected in the recent past.’
Secretary of State for Education, Bridget Phillipson said: ‘This is a Budget about fixing the foundations of the country, so there can be no better place to start than the life chances of our children and young people. Our inheritance may be dire, but I will never accept that any child should learn in a crumbling classroom. We are determined to break down those barriers to opportunity, whether it’s brilliant early years, free breakfast clubs or high and rising standards in our schools, this government is putting education back at the forefront of national life.’