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School spending promises create winners and losers

Chris Belfield
Newspaper article

School funding is a hot topic in the election debate. The outgoing government’s plans involve the largest cuts to spending per pupil in the last 30 years and a radical reform to way schools budgets are set. In this context, both the Labour and the Conservative manifestos have committed to increase spending on schools over the next parliament and to provide additional protections for the schools that would otherwise be hit hardest by school funding reform. Yet, these two proposals imply very different paths for school spending per pupil over the coming years.

The Conservatives have promised an additional £4 billion of school spending in 2021-22. However, rising costs and increasing pupil numbers means this translates into a 3 per cent reduction in real spending per pupil over the parliament. Coming on top of cuts in the last two years, this would leave real spending 7 per cent below the level in 2015-16 in per pupil terms.

Labour have committed to reverse the recent cuts and protect real school spending per pupil. This would increase school spending per pupil by 6 per cent over the parliament and leave spending per pupil 1.6 per cent higher in real terms than its historic high in 2015-16.

Labour have also announced they would remove the 1 per cent cap on public sector pay increases, which is set to be in place until March 2020, and have committed to raising pay in line with the recommendations of the pay review bodies. Current forecasts of average earnings growth imply this could increase the costs schools face by £3 billion in 2021-22, equivalent to 7 per cent of the current schools budget. The Labour manifesto includes some funding to compensate schools for these higher costs and this would represent a significant further increase in school budgets. This additional funding could be seen as simply compensating schools for higher costs. However, raising teacher pay may improve the quality of education provided if it helps recruit or retain good teachers.

The parties have announced various other school policies, in particular, about free school meals. Labour plan to extend universal free school lunches to all primary pupils in state schools while the Conservatives would scrap universal free school lunches and instead introduce universal free school breakfasts. The cost of either of these policies crucially depends on the number of pupils who take up the offer. This is very difficult to predict in advance. However, the cost of these policies is small relative to the overall level of spending. In 2017-18, the total schools budget was £41 billion. The Conservative estimate of the cost of introducing universal free school breakfast was £60 million, or 0.1 per cent of the total schools budget. Even a relatively large overspend would only amount to up a small proportion of the £4 billion of additional funding that the Conservatives have said they would provide.

This article was first published in The Times and is reproduced here in full with permission.