Education Spending

Spending Lie

The Conservatives keep on insisting that they are providing record levels of spending on education. To understand spending more clearly this page covers the following areas.

• Is the overall spending increasing in real terms?
• In real terms what is the spending per pupil now as compared to 2010/11?
• Where is the money being spent? Spending per pupil doesn't mean the pupil benefits from the money if it is being poured into free schools and then into executive wages for example

You can find information on cuts to Childcare here

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Spending 2010-2019

Around half of primary and secondary schools will be faced with large, real cuts in funding per pupil of between 6 and 11 per cent between 2016 and 2019. The overall budget has been cut by 20 billion, equivalent to 20%.

Core schools budget (primary and secondary) represents 75% of school spending. Other areas impacted are early years, sixth form, pupil premium and high needs have all also been cut in real terms over the last two years.

The amount spent on education doesn't mean a great deal in isolation. Other factors need to be borne in mind such as:

• Number of pupils in and entering the education system
• Where the money is being spent

Spending on Education as shown in real terms (2018 prices)

Fiddling the Figures

While school funding has decreased in real terms, the figures are worse than the headline figure. School funding figures given by the government have been found to include billions of pounds of university fees being paid by students, rather than only government spending. The government maintains that OECD figures confirm the UK to be the 3rd highest spender on education in the world. These figures are from 2015 and are massively skewed as it is not just a schools figure or even about government spending. It shows the proportion of gross domestic product (GDP), the value of goods and services produced, spent on all educational institutions, including universities as well as schools. The overall figure includes personal spending, meaning that all the billions paid by students on their tuition fees are part of the total.

Source: HM Treasury, Public Expenditure Statistical Analyses 2018;previous PESAs; Office for National Statistics, Blue Book; HM Treasury deflators, March 2018 (https://www.gov.uk/government/statistics/gdp-deflators-at-market-prices-and-money-gdp-march-2018-quarterly-national-accounts).

The real figures show that the percentage on National Income spent on education has dropped significantly from 5.7% in 2010 to 4.4% in 2018.

The Office for National Statistics is investigating whether the money lent to students every year for tuition fees - much of which will never be repaid - should appear as a cost in the public finances. Last year, the ONS said £17bn was lent to students, with about £3bn received in repayments. Two parliamentary committees have heavily criticised the way the cost of student finance is invisible in terms of public spending. They have suggested that the borrowing and lending associated with tuition fees should show up in the national balance sheet, with accusations that the current system is a "fiscal illusion". But the Department for Education seems to have pre-empted this - wrapping tuition fees into its definition of education spending. Has it inadvertently signalled to the ONS that it agrees that lending for fees should be counted alongside public spending? The chancellor might be surprised at such an intervention that could add billions to the deficit. What the figures more realistically reflect is the cost of higher education and the fact that the UK has some of the highest tuition fees

Spending Per Pupil

There was a baby boom in the early 2000s, which has been hitting primary schools for several years and is now moving up through the secondary system.

Between 2009 and 2016, the school system expanded to take in an extra 470,000 pupils.

The Department for Education says that between 2016 and 2025 there will be a further increase in the state school system, up from about 7.4 million pupils to about 8.1 million.

So while funding has gone down in real terms, the number of pupils has increaed.

During the 1980s and 1990s, primary school spending per pupil grew by 2.3% per year, on average, in real terms and secondary school spending per pupil grew by slightly less (around 1.5% per year, on average). There was a fall of 6% in real terms in secondary school spending per pupil between 1993–94 and 1995–96.

Under a Labour government from 1999 onwards, spending per pupil grew rapidly, with growth of around 5% per year in real terms for primary and secondary schools over the 2000s. This led primary school spending per pupilto rise from £2,700 per pupil in 1999–2000 to reach £4,500 by 2009–10, whilst secondary school spending per pupil grew from £3,500 to £5,800 per pupil.

Total school spending per pupil fell by about 8% or about £500 per pupil between 2009–10 and 2017–18. This is probably the best measure of the change in total public spending available for school services over this time. It includes the effect of cuts to local authority services, many of which schools will have had to fund from their existing budgets, and cuts to school sixth-form funding, which will have put pressure on secondary school budgets.

Figures upto 2015/16 from Institute for Fiscal Studies Figures from 2015/16 are taken from the School Cuts website and the Education Policy Institue

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National Funding Formula

This section does not cover the National Funding Formula in detail. NFF is a formula that is designed to share out the pot of money more fairly. There is some debate out the formula itself and how fair it actually is, as the formula works in such a way as to cut funding to some of the most deprived schools and award it to schools that are just getting by. To view detailed analysis on the NFF view this document The implications of the NFF for Schools or visit The Education Policy Institute research page

The key outcome of the NFF is that although the funding will be distributed differently, the overall pot will not change.

Consistent with an overall reduction in real resources per pupil, the Education Policy Institute estimate that there are unlikely to be any schools in England which will avoid real terms cuts in resources per pupil between 2016-17 and 2019-20, even after the national funding formula is applied. There is a considerable range in cost pressures with some schools expected to face real terms cuts of around 10 per cent, per pupil.

Around half of primary schools, and around half of secondary schools are estimated to face real terms per pupil funding cuts of between 6 and 11 per cent between 2016-17 and 2019-20, even with the additional funding and cash floors from the national funding formula.

As the level of cost increases has been assumed to be common across all school for this scenario, the distribution of real terms cuts per pupil is similar to the distribution of funding changes as a result of the NFF. Figure nn shows the estimated average level of real terms pressures per pupil across each local authority. This again illustrates that the biggest reductions in resources available will be in London and a small number of other urban areas in the North and Midlands, but highlights that in all parts of the country schools are facing reductions in the resources available per pupil over the next three years at least.

These estimated funding pressures equate to an average of £74,000 per school in primary schools and £291,000 in secondary schools between 2016-17 and 2019-20.

The majority of schools’ costs represent spending on staff costs, including teachers and support staff. Combining these averages with average salary costs, and an uplift for on costs including pensions and national insurance, suggests that if these savings were made through teacher reductions alone, almost 2 fewer teachers could be employed in the average primary school, and around 6 fewer teachers could be employed in the average secondary school. This illustrates, in terms of teacher numbers, the potential implications of the average funding pressure for schools, based on 2016-17 pupil numbers. Across the system, these per-pupil pressures arise in part because of an increase in pupil numbers.

This means that, in practice, where schools grow in size, or find savings elsewhere, they will not need to reduce their number of teachers as much as this. Nationally, the Department for Education still anticipates that the number of teachers will grow, albeit more slowly than pupil numbers, with potential implications for class sizes and contact time. In an attempt to address some of the variation in local funding levels and to address the disappointment from those who were campaigning for a new formula, the DfE increased the Dedicated Schools Grant by an additional £390m in 2015.

Since then, the per pupil units of funding for local authorities have been maintained at flat cash per pupil (with the Pupil Premium paid separately and in adddition). In 2016/17, Tower Hamlets remained the highest funded local authority, with a per pupil amount of £6906 and Wokingham was the lowest funded authority at £3991 per pupil, a difference of £2914 per pupil. These figures are lower than those shown in the previous image, due to the removal of High Needs and Early Years funding from 2013.

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School Cuts Calculator

School Cuts is an unaffiliated campaign, who are non partisan. Their data and methodology are public and available on their website for anyone to interrogate and use. The use of their data on this wiki, does not indicate any allegiance to the Labour party.

School Cuts provides a by school calculator that allows the public to check how government cuts are impacting. It has a very powerful search facility where a postcode can be entered and then an interactive map of the area shows all schools. By clicking on a school a detailed breakdown of the cuts affecting that school is presented.

Data Methodology for England School Cuts use the Schools block funding allocations for 2015 / 2016 as the baseline. This gives the per pupil funding for every mainstream school. They compare these with the funding amounts from the Government’s illustration of the impact of the NFF that was realised through the COLLECT system. Funding to cover PFI costs have been removed from all sums.

They used the Office for Budget Responsibility’s estimate for inflation for the period 2015 to 2020.

They assumed that local schools’ forums would implement the National Funding Formula as the Government has recommended.

All the data is available at https://bit.ly/school_cuts_data Andrew Baisley, 6th February 2018

Data Methodology for Wales School Cuts used Welsh government data to calculate cuts to Welsh schools over this Parliament, 2015 — 2020.

Using the 2015/16 funding as the baseline, they calculated the impact of cost increases and pupil number increases on school funding.

The website uses the following assumptions in making its calculations:

• That inflation for schools will amount to 8.7% over the lifetime of this Parliament. This figure is in “Financial sustainability of schools” published by the National Audit Office on 14 December 2016 (page 15) and applies equally to schools in Wales and England.
• That funding for schools in Wales increases by 2.86% over this Parliament in line with the increase in Welsh Government revenue, but that pupil numbers in Welsh schools increase by 3.68% as predicted, leading to a reduction in funding per pupil over that period.
• That the above changes in funding and pupil numbers are distributed equally among schools in Wales.

The website also assumes that Welsh councils do not provide additional funding for their schools from other areas of spending. Where any Welsh council does provide additional funding, the figures for schools in that council will be lower than our predicted figure.

All the figures are in 2016/17 prices. Andrew Baisley, 22nd March 2017

The Calculator

Enter a school name, a postcode or the first part of the postcode into the calculator to identify schools in your area. An interactive map shows the schools within area of the postcode you select. By clicking on the school a screen opens that shows you the total cuts for that school between 2015 and 2020. It also shows what that represents per pupil. As the highest proportion of costs in schools is wages, this typically means a loss of teachers. The estimate is on average 2 teachers per primary school and 6 teachers per secondary school.

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