More money, fewer problems? The case for targeted education spending – Full report

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School finances are high up on the political agenda. In the 2019 Spending Round, the Conservative Government committed to giving schools an additional £4.6 billion in real terms by 2022-23. This money included a pledge to ‘level up’ school funding by increasing the minimum level of per-pupil spend that primary and secondary schools receive.

The focus on school spending is no surprise. Total school spending per pupil fell by around 8 per cent in real terms between 2009-10 and 2018-19 – resulting in strong opposition from the education sector.  In 2018, around 2,000 headteachers marched on Whitehall to protest their shrinking budgets and earlier this year, several schools made or considered changes to their timetables to cut costs.

The finances of maintained schools, however, show a mixed picture. In 2018-19, over 40 per cent of primary and secondary maintained schools spent more than their income.

Although alarming, these figures do not tell the whole story. A school with cash in the bank might be able to offset this overspend. It is a much bigger problem, therefore, if a school has no revenue reserves to fall back on. Revenue balances for 2018-19 show that nearly 30 per cent of secondary schools and 8 per cent of primary schools were in revenue deficit. In contrast, a significant proportion of schools were in revenue surplus.

Therefore, amid the political focus on school funding, the annual accounts show a varied picture – demonstrating the need for targeted spending that reach schools in financial difficulty.

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