Scotland to have 90,000 fewer pupils by 2040, IFS finds

The Institute for Fiscal Studies (IFS) have published a report on school spending in the Scottish Budget 2025-26, finding that by 2040, the number of pupils in Scotland is estimated to be 90,000 lower than in 2024.

As the Scottish government have pledged to keep teachers numbers at their 2023 level, falling pupil numbers would result in smaller class sizes, but this might come at a cost of councils finding it difficult to tackle other problems, like social care costs, in strained funding environment. Maintaining teacher numbers at current levels as pupil numbers decline could see pupils per teacher in mainstream schools fall from 14 today to 12 in 2040, which will be a record low.

The IFS proposes that letting teacher numbers become proportional to pupil numbers, as they have been recently, could free up £500 million in today’s terms annually by 2040. This could be a lifeline for Scottish councils, which have an increasingly tight budget for the latter half of the 2020s. In the short run, the savings will be small at around £65-127 million by 2027, but this will snowball over time.

Further findings by the IFS on their report on the Scottish Budget include that total day-to-day school spending in Scotland increased by 27 per cent in real terms between 2015-16 and 2023-24, with current plans implying little change in 2024-25.

Spending per pupil has increased from £8,300 in 2010 (inflation-adjusted) to £10,100 this year. Spending per pupil is now the highest in the UK, 20 per cent higher in England. In 2010, there was only a four per cent gap between the two nations.

Classes sizes in Scotland are much smaller than anywhere else in the UK, with 13 pupils per teacher on average. This is compared with 17-19 pupils per teacher in the rest of the UK, on average.

The IFS recommends that the value for money of school spending is maximised to its full potential.

Darcey Snape, a research economist at IFS and the report’s author 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 look 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 place 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 should 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.”