Annual report on education spending in England: 2024–25

This report from the Institute for Fiscal Studies provides clarity around educational funding rates. The report is 99 pages long, but three paragraphs provide useful insight, with regards to overall school budgets, they say…

“We estimate that mainstream school funding per pupil will grow by 2.8% in cash terms in 2025–26. We also estimate that school costs will grow by 3.6% in 2025–26 if the pay review body follows the government’s recommendation of a 2.8% pay award for 2025. In this case, schools might struggle to cover their costs without making savings.”

Where the funding is targeted within education is key, it’s worth noting that…

“Total spending on the free entitlement to early years education and childcare nearly quadrupled between 2001–02 and 2023–24, when it reached £4.1 billion in today’s prices. This was largely driven by expansions to the free entitlement. A new expanded entitlement for children aged under 3 is expected to lead to a further doubling of spending to £8.5 billion by 2027–28. This represents a major increase in resources at a time when other stages of education and public services have been squeezed.”

The other key area of spend…

“Since 2019, the core schools budget in England has increased by nearly £7 billion (in today’s prices), including the £2.3 billion extra funding announced in the Autumn Budget 2024. This has enabled school funding per pupil to rise by 10% in real terms up to 2025–26, which more than reverses previous cuts. However, this is not the full story. There has been a rapid increase in the costs of SEN provision. About half of the total increase in school funding has been focused on high needs funding. This may explain why school leaders have felt their budgets squeezed by more than might be implied by large increases in overall funding.

The upcoming spending review is likely to see this pattern continue. With a tight picture on overall public spending, the government will be looking to make savings. Falling pupil numbers mean the government could deliver an annual saving of £1.2 billion in 2027 just by protecting spending per pupil in real terms. However, the government also projects a £2.3 billion increase in spending on SEN, which seems likely to wipe away any prospects of savings. The government has provided strong indications it will look to reform the SEN system, but this is likely to cost money too, at least in the short run.”