Funding shortfall set to hit most schools

Piggy bank on top of school books.

Data by the School Cuts coalition shows that 76 per cent of primary schools and 94 per cent of secondary schools will not be able to afford their costs next year, following the government’s remit letter to the School Teachers’ Review Body (STRB), which recommended a 2.8 per cent rise in teacher pay for 2025-26.

The government has admitted that most schools will not be able to cover the cost of these new staff pay rises next year, though still expects schools to make efficiencies. This new research thus exposes the problem with the majority of schools needing to make further cuts to balance their budgets.

The School Cuts coalition estimates that schools’ costs are set to rise by 3.4 per cent next year, though mainstream funding will only increase by 2.2 per cent. This leaves a gap of £700 million that the government would need to plug to fully fund staff pay awards.

School funding is notoriously tricky as it is composed of many different fluctuating grants. For example, in the financial year 2024-25, core funding for mainstream funds was composed of: Schools’ Block funding, Pupil Premium, Core Schools Budget Grant, Teachers’ Employer Pension Contributions Grant, and Teachers’ Pay Additional Grant. In 2025-26, this is being simplified to just Schools’ Block funding and Pupil Premium, with several grants being rolled into the Schools’ Block funding.

The School Cuts Coalition affirms that in order to fully fund pay rises for teachers and support staff teaching primary and secondary pupils, an extra £580 million is needed. To cover the cost of pay awards for staff teaching primary pupils under five, secondary pupils aged over 16 and pupils at special schools cost an additional £120 million. A £700 million increase is needed.

Pepe Di’Iasio, general secretary of the Association of School and College Leaders, said: “We cannot keep putting schools and colleges in a position where they are left with no choice but to make further cuts to provision. Schools, colleges and their staff are central to the government’s ambition of improving opportunities for young people, but it is difficult to see how this can be achieved if they cannot afford the cost of pay awards without having to make cuts. The government must recognise that improved investment in education is an urgent priority.”

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