Impact of government funding boost for schools 'not clear'
The government’s £5 billion education funding boost may not necessarily translate into “net additional resources” for schools because of new and rising costs, a council accountant has warned.
In his budget last month, Chancellor of the Exchequer Rishi Sunak MP announced that funding in England would return to 2010 levels by 2024-25 with a per-pupil increase of £1,500.
Writing for the Telford and Wrekin Schools Forum, Group Accountant Tim Davis says it is “not clear to what extent schools” will benefit financially as a result.
He warns that deferred teachers’ pay rises, and rises in employer National Insurance contributions and the minimum wage could absorb some of the benefit.
“The government’s recent budget and spending review included commitments relating to future spending on schools,” Mr Davis writes.
“The treasury has committed an additional £4.7 billion for the core schools budget ‘over and above’ the spending commitments made in 2019. This results in the core schools budget increasing from £49.8 billion this year to £56.8 billion in 2024-25. This equates to an average annual ‘real-terms’ rise of 2.5 per cent from 2019 to 2024.”
He adds that it “remains to be seen how these translate into funding for Telford and Wrekin schools”.
Mr Davis says: “The reference to a ‘real-terms increase’ does not necessarily represent how the settlement will impact upon schools’ budgets.
“For schools a general inflationary measure is less relevant than the level of likely payroll costs, as employee costs account for the vast majority of school expenditure.”
Given the level of inflation, the lack of a pay award for teachers already earning over £24,000 in 2021 and the end of the government “pay freeze”, Mr Davis writes, “it seems likely that there will be a significant teachers’ pay award in September 2022”.
“In addition, the government has still committed to raising new teachers’ starting salaries to £30,000 by the end of this parliament,” he adds.
“This will have a direct impact on the cost of new teachers and a further indirect effect further up the teachers’ pay scale, if differentials are to be maintained.”
The rise in the national minimum wage and the council’s commitment, along with some academies, to pay the higher “real living wage” will have a further impact on support staff costs, he adds.
“There will also be extra costs for schools arising from the increase of 1.25 per cent in employers’ National Insurance contributions for the Health and Social Care Levy from April 2022,” Mr Davis writes.
“In summary, it is therefore not clear to what extent schools will have net additional resources given the level of cost pressures likely to arise over the next few years.”
The forum – which includes council, school and academy representatives – will discuss his report when it meets remotely on Thursday, November 18.
