NEWS: Falling Pupil Numbers Could Cut School Funding by £1bn

As reported by the Guardian, falling birth rates are leaving schools with surplus places and putting significant pressure on funding, according to a new report from the public spending watchdog

The National Audit Office found that the Department for Education was slow to respond to shifting pupil numbers, only beginning to formally track demographic risks in 2024 – several years after primary enrolments first started to decline in 2018.

The report warns that this delay has contributed to an oversupply of school places and could lead to a reduction of more than £1bn in pupil funding over the next three years.

It also highlights weaknesses in how data has been gathered and used. The NAO said the department had not consistently collected or verified information from local authorities on unfilled places, limiting its ability to assess financial risks or decide when intervention was needed.

Auditors added that there is still no clear national strategy to guide schools and councils on how to respond to falling rolls, with expectations not clearly communicated across the sector.

With pupil numbers projected to drop by a further 7% by 2030, the report warns that many schools and local authorities may face difficult decisions, including potential closures or mergers, as funding declines alongside enrolment.

Forecasts suggest pupil-led funding could fall by £288m in 2027, followed by £410m in 2028 and £334m in 2029.

Despite the challenges, the NAO noted that the department has begun exploring ways to make better use of surplus space, such as expanding nursery provision, and has introduced some financial support to help schools manage the impact of declining pupil numbers.