More money, less problems for schools?

Luke Heselwood

Luke Heselwood

September 20, 2019 | @LukeHeselwood

Education spending is the third largest public sector spend. In 2018-19, education spend amounted to £89.4 billion, or around 4.2 per cent of national income.

Over the past 20 years, education spend has seen a real term increase – reaching a peak in 2010-11 – before declining from 2011-12 (Figure 1). As a percentage of national income (Figure 2), education spending has remained relatively consistent over the past 20 years. In 2018-19, it was only 0.2 percentage points higher than in 1998-99. However, it is 1.5 percentage points lower than its 2010-11 peak of 5.7 per cent of national income.

Figure 1: Education expenditure in real terms, 1998-99 to 2018-19

Source: HM Treasury, Public Expenditure Statistical Analyses 2019

Figure 2: Education expenditure as a per cent of GDP, 1998-99 to 2018-19

Source: HM Treasury, Public Expenditure Statistical Analyses 2019

The different stages of education have experienced different levels of funding over the past 20 years. Driven by the introduction and then extension of free early years education, spending for 3 and 4 year-olds has risen from £100 million in 1990-91 to £3 billion in 2017-18 (based on 2018-19 prices). In 2017-18, total school spending in England was just under £42 billion, and the total school spending per pupil fell 8 per cent in real terms from 2009-10 and 2017-18. 16-18 education is considered the “big loser” from changes to education spending over the past 25 years. In 1990-91 spending per student in further education was 50 per cent higher than in secondary schools, whereas it is now 8 per cent lower.

The new Government has focused considerable domestic attention on education spending. In the 2019 Spending Round, it committed to raising per pupil school spending to a minimum of £5,000 for every secondary school, increasing newly qualified teachers’ salaries to £30,000 by 2022-23 and investing in £400 million in further education.

It is vital that this additional money is spent effectively to tackle the challenges faced by the education sector. Schools with crippling deficits, poor teacher recruitment and retention, and concerns over the implementation of T Levels still require attention.

Financially sustainable schools

Across England, there is significant variance in the financial sustainability of schools. For secondary maintained schools and academies, the number of schools in deficit is rising. In 2017-18, 30.3 per cent of maintained secondary schools had an in-year deficit – almost four times greater than in 2014. Nonetheless, 34.1 per cent of maintained schools had a surplus that would be deemed “excessive” by the Department for Education.

It is important to determine what makes a secondary maintained or academy school financially sustainable (or unsustainable). Moreover, whether this correlates with better outcomes, and how best to distribute funding to schools most in need.

Teacher training and retention  

From 2016 to 2017, the number of full-time teachers fell by 1.2 per cent. As a result, the number of teachers entering and leaving teaching are now at the same level. Yet, because of rising student numbers, the ratio of pupils per qualified teacher has increased from 17.8 (2013) to 18.7 (2017).

As it costs around £20,000 to train each newly qualified teacher (NQT), and with bursaries up to £30,000, teacher retention is a value for money issue. An assessment of different Initial Teacher Training (ITT) programmes and retention rates over a five-year period can help to show whether certain routes deliver better value for money.

T Levels

T Levels, set to be introduced in September 2020, are the latest incarnation of technical education. To help providers set to deliver T Levels in 2020 to adapt, the Government is providing additional funding. This includes £74 million to help providers deliver work placements, £34 million to ensure that providers have the necessary facilities and equalities, £20 million in teacher training, and £500 million in additional funding per year from 2023.

With extra funding earmarked for T Levels, it is essential to understand whether this extra money will meet demands placed on providers to deliver courses, work placements and the delivery of additional Maths and English.

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