Scottish Government and Scottish councils need a long-term plan for a schools system set to lose 90,000 pupils

The Scottish Government has pledged to keep teacher numbers at their 2023 level for the foreseeable future. Delivering this in a world of falling pupil numbers would mean smaller class sizes, but might make it harder for councils to address other challenges, such as social care costs, in an increasingly tight funding environment.

Alternatively, allowing teacher numbers to fall in line with pupil numbers – as they have in fact been doing in recent years – could free up £500 million in today’s terms annually by 2040. This could be valuable, particularly given that the funding outlook for Scottish councils looks to be tight in the latter half of the 2020s. But it would come with delivery challenges, particularly in rural and island schools.

These are among the findings of the third chapter of IFS’s third annual Scottish Budget report, ‘Scottish school spending, teachers and pupil numbers’.

The report also finds that:

• Total day-to-day school spending in Scotland increased by 27% in real terms between 2015–16 and 2023–24, with current plans implying little further change in 2024–25.
• Spending per pupil has risen from £8,300 in 2010 (in real inflation-adjusted terms) to £10,100 this year. Spending per pupil is now the highest in the UK, and 20% higher than in England. This gap was only 4% in 2010.
• Class sizes in Scotland are already much smaller than elsewhere in the UK, with 13 pupils per teacher on average (compared with 17–19 pupils per teacher in the rest of the UK).

Given both the financial context and concerns about declining school standards in Scotland, it will be vital to maximise the value for money of school spending.

• The Scottish Government has pledged to at least maintain teacher numbers. However, maintaining teacher numbers at current levels in the face of falling pupil numbers could see pupils per teacher in mainstream schools fall from 14 today to 12 in 2040, lower than at any point in recent history.
• Allowing teacher numbers to fall in line with pupil numbers would instead release funding that could be used for other priorities. This would be small in the short run, about £65–120 million by 2027, but could amount to an annual saving of £500 million in today’s terms by 2040.
• At the same time, policymakers face challenges from rising levels of additional needs, new teachers struggling to find jobs, recruitment shortfalls for secondary teachers, and over-recruitment of primary teachers.

Darcey Snape, a Research Economist at IFS and an author of the report, said:

‘With class sizes already low in Scotland, cutting teacher numbers in line with the projected fall in pupil numbers could in principle free up funds for spending elsewhere, for schools or other areas of council budgets. These savings may be particularly valuable in the context of what looks like a tight financial outlook over the coming years for both the Scottish Government and Scottish councils. The evidence also suggests that smaller class sizes only tend to have modest effects on pupil attainment, suggesting that if improving attainment is the Scottish Government’s priority, further reductions in class sizes may not be the most cost-effective way of doing so.

‘There would inevitably be practical difficulties associated with reducing the number of teachers as pupil numbers fall – such as amalgamating classes and schools. However, arguably, local councils are best placed to make decisions over school and teacher numbers in their areas, rather than applying a one-size-fits-all approach across Scotland. The Scottish Government could then focus on engaging with councils to ensure that training and recruitment of teachers better align with locally identified needs and on ways to improve the quality of teaching and learning across Scotland.’