IFS published 2018 annual report on education spending in England

The Institute for Fiscal Studies (IFS) has published its 2018 annual report on education spending in England

Education spending represents about £90bn in 2017 to 2018 (4.3% of national income) and is the second-largest element of public spending in the UK behind health. The IFS report says that the level of UK education spending has significantly risen in real terms over time – growing particularly fast from the late 1990s through to the late 2000s, before falling in real terms from 2010 onwards.

However, the IFS says that these trends are arbitrary and tell us little about what has happened to the different areas of education spending. Their first annual report on education spending in England provides measures of spending per student in the early years, schools, further education and higher education back to the early 1990s, which allows an understanding of how policy decisions have affected the resources available to students in different stages of education over the long run.

The key findings revealed in the report are as follows:

  • Spending on the 3- and 4-year-old free entitlement to early education has risen from almost nothing in the early 1990s to about £3bn in 2017–18. The new 30-hour extended entitlement has driven a £500m spending rise in the past year, which includes a nine per cent rise in spending per hour. However, other early years services have seen big cuts – spending on Sure Start children’s centres has fallen by two-thirds since 2009–10.
  • Total school spending per pupil has fallen by eight per cent in real terms between 2009–10 and 2017–18. This was mainly driven by a 55% cut to local authority spending on services and cuts of over 20% to school sixth-form funding. Funding per pupil provided to individual primary and secondary schools has been better protected and remains over 60% higher than in 2000–01, though it is about four per cent below its peak in 2015.
  • Funding per student aged 16–18 has seen the biggest squeeze of all stages of education for young people in recent years. School sixth forms have faced budget cuts of 21% per student since their peak in 2010–11, while further education and sixth-form college funding per student has fallen by about eight per cent over the same period. By 2019–20, funding per young person in further education will be around the same as in 2006–07: only 10% higher than it was 30 years earlier. Spending per student in school sixth forms will be lower than at any point since at least 2002.
  • Reforms to higher education funding have increased university resources and made little difference to the long-run cost to the public purse. Universities currently receive just over £9,000 per full-time undergraduate student per year to fund their teaching. This is 22% higher than it was in 2011, and nearly 60% more than in 1997. Reforms since 2011 have cut the impact on the headline measure of the government’s deficit by about £6bn per cohort entering higher education, but the expected long-run cost to the taxpayer has fallen by less than £1bn.
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Read the full IFS report here.

Dr Mary Bousted, joint general secretary of the National Education Union, said:

“This authoritative report gives the lie to government claims that they have protected school funding and reinforces the concerns of teachers and parents. It shows that funding is lower than it was in 2009-10 in all types of school. It also shows the even greater cuts to 16-19 funding. The report shows that costs are rising faster than inflation. The Government must invest to protect our children’s education.”

Geoff Barton, general secretary of the Association of School and College Leaders, said:

“Parents will be horrified to learn of the damage that has been done to sixth forms and colleges by severe real-terms cuts in government funding. They may also wonder why the basic rate of funding for each of these students is just £4,000 compared to tuition fees at university which can be as high as £9,250.

“There is no rhyme or reason for the extremely low level of funding for 16-18 year-olds, and without the additional investment that is desperately needed more courses and student support services will have to be cut in addition to those which have already been lost. It is a crucial phase of education in which young people take qualifications which are vital to their life chances and they deserve better from a government which constantly talks about social mobility.

“The government’s under-investment in 16-18 education is part of a wider picture of real-terms cuts to school funding which is putting hard-won standards at risk.”

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