Schools in England face ‘significant squeeze’ on budgets, IFS report finds

Schools in England still face a “significant squeeze” on their budgets despite extra funding from the government, while colleges, universities and early years provision will have to account for rising prices without any additional help, according to the Institute for Fiscal Studies.

The IFS’s annual look at education spending reveals that further education and sixth form colleges could experience particular hardship, with rising numbers of students after steep cuts in funding until 2019, which have only been partially reversed by the government.

The funding situation for colleges and sixth forms is projected to worsen as the number of 16- to 18-year-old students increases by an estimated 200,000 by 2030, with the government scaling back Department for Education (DfE) spending plans after 2024.

College spending per student in 2024 will still be about 5% lower than in 2010, while school sixth-form spending per student will be 22% below 2010 levels.

Luke Sibieta, the author of the report, said colleges and sixth forms are “in a much worse position” than schools with pupils up to the age of 16.

“They saw bigger cuts in the last decade, which are only being partially reversed. Unlike schools, they received no additional funding in the autumn statement for higher-than-expected costs,” Sibieta said.

Munira Wilson, the Liberal Democrat education spokesperson, said: “The Conservatives’ economic mismanagement means that both college students and our youngest children are yet again being forgotten and ignored. Parents are already facing eye-watering childcare bills, yet today’s report shows that early years providers face three more years of soaring costs.”

University undergraduates have also seen less spending, after successive freezes in the cap on tuition fees reduced spending per student in England by about 11% in real terms between 2017 and 2021 – taking spending back to the same level as 1990. “This is projected to go lower still due to policy commitments to freeze tuition fees up to 2025,” the IFS said.

While the government gave an additional £2.3bn to schools in England for each of the next two years, the extra funding takes spending in 2024 back to the same levels as in 2010. It follows real-terms cuts of 9% per pupil between 2009 and 2019, the steepest reduction in more than 40 years.

The IFS calculated that total spending on education was about 2% lower in 2021 than in 2010.

“While the share of total spending on education has been falling, the proportion of the UK population in full-time education has risen from 18% in the early 1980s to an all-time high of 20% during the 2000s, where it remains today,” the IFS noted.

“In sharp contrast, as the share of the population over 65 has risen, the share of total spending on healthcare has more than doubled from just over 9% in the late 1970s to over 20% today.”

A DfE spokesperson said the government was working on “ambitious” reforms designed to improve economic growth.

“In recent years we’ve transformed the skills landscape, introducing new high-quality T-levels, skills bootcamps and Institutes of Technology backed by £3.8bn over this parliament. In the autumn statement we announced Sir Michael Barber will be advising on skills implementation to drive forward delivery of these reforms.

“This is alongside a significant £750m boost for our world-class higher education sector,” the DfE said.

“We are committed to improving parents’ access to affordable, flexible childcare and are currently exploring a wide range of options to do this. We have already increased funding to local authorities to increase the hourly rates they pay to childcare providers and invested more than £20bn over the past five years.”