The school funding challenges awaiting the new government

This morning, politicians, policymakers, pundits and election geeks will all be waking up with sore heads and blurry eyed.

A new government will be formed over the coming days and it faces many challenges on schools including shortfalls in teacher recruitment, persistent educational inequalities and high levels of school absence. 

A big first decision 

But the most pressing items on the agenda will be the need to make an immediate decision on teacher pay and school funding in the next few weeks. 

Normally, the government sets out plans for school funding in July for the next financial year, which will begin in April 2025. This gives local authorities, multi-academy trusts and schools about 9 months to make financial plans.

For natural reasons, the publication of the pay review body’s report and recommendations for teacher pay in September 2024 was postponed until after the election. 

As such its publication should be imminent – and will mean a decision on teacher pay is needed quickly.  

Although it will take time for the new government to bed in, it would be advisable to keep as close as possible to usual timetables, particularly as decisions on school funding are inextricably linked to a decision on teacher pay for September 2024. 

What that deal looks like remains to be seen. If we look at school budgets,  we know that schools could probably afford an overall teacher pay rise of 1-2% from current funding.

However, given the overall shortfalls in teacher recruitment and persistently high numbers of teachers leaving the profession, the pay review body may recommend a higher pay rise. 

In this case, schools would almost certainly need higher levels of funding to cover the costs. 

Tough trade offs

This could be an early and difficult trade-off for the new government.

While inflation is currently below 2%, average earnings growth is currently about 6% and teacher pay is about 6% lower in real-terms than in 2010. 

On other hand, the public finances are in a poor state and it will not be easy to find extra money for schools. And other parts of the education workforce – such as college teachers – have seen even slower pay growth from an even lower base. 

The pay review body is also due to provide advice on targeted pay rises or incentives in shortage subjects, like maths, sciences and languages. Increasing the number of subject specialists in schools was a priority for all parties during the election campaign. 

There is also good evidence on the effectiveness on targeted retention payments for early career teachers in shortage subjects. 

With huge challenges recruiting and retaining teachers in these subjects, the new government would be well advised to act early. 

SEND funding

While important, these early decisions on teacher pay and school funding are likely to be eclipsed by the longer term challenges associated with SEND funding and support. 

The system covers some of the most vulnerable children, who face significant challenges accessing education.

Numbers have grown by 60% since 2015. Partly as a result, funding directed at high-needs has grown by £3.5 billion since 2015, taking up nearly half of the total growth in school funding over the same period. 

Councils have reacted to high demand and spiralling costs by taking a harder line on initial applications. However, this is likely to have rationed support to parents with the loudest voices and money to spend on private assessments.

Indeed, 98% of appeals to tribunals are won by parents that make it that far. With costs and funding going up by £700-800 million per year, challenges in the SEND system  are a first-order fiscal challenge. 

Providing effective support for children with SEND in a financially sustainable way should be one of the biggest education priorities for the new government. 

Exactly how to do so is not obvious, but could include earlier identification and intervention, particularly as late identification can often be less effective and more costly.   

All told, those sore heads and blurry eyes will need to sharpen up and start planning.