Financial sustainability of schools Contents


Schools in England are now facing the most significant financial pressure since the mid-1990s. Funding per pupil is reducing in real terms. If they are to manage within the funds available, schools will have to find efficiency savings rising from £1.1 billion in 2016–17 to £3.0 billion (equivalent to 8% of the total budget) by 2019–20 because of costs which are outside their control, such as pay rises, higher employer contributions to national insurance and the teachers’ pension scheme, and the apprenticeship levy. They will also have to cope with the consequences of reductions in the Education Services Grant and the cost of implementing other policy changes, such as changes to the curriculum and assessment. Drawing on a desk-based benchmarking exercise, the Department for Education (the Department) believes schools can save £1.3 billion through better procurement and the balance of £1.7 billion by using staff more efficiently. Schools have already been making savings in a number of ways, but the Department considers they can save more, such as through better energy deals. However, staff account for three-quarters of schools’ spending, and savings here will be harder to achieve without detrimental effects on the quality of education and educational outcomes. It is not clear how the Department will monitor both spending and performance so that it can intervene quickly where schools make efficiency savings in ways that risk causing damage. Without effective and timely monitoring of areas such as the breadth of the curriculum and class sizes, there is a real risk that the Department will not be able to prevent declining standards.

27 March 2017