School funding: Budget pressures and declining rolls

Despite recent funding increases, schools in England grapple with various financial challenges, from surging energy costs to burgeoning staff expenses. Compounded by falling pupil numbers, the impending decline in rolls presents a looming fiscal hurdle, as school budgets may shrink while costs persist

CREDIT: This is an edited version of an article that originally appeared on EPI

In response to this complex landscape, EPI has published a new school funding model designed to forecast the impact of funding-related policies on local authorities, constituencies, and individual schools. By simulating the Department for Education’s allocation methodology, the model assesses potential winners and losers under different funding scenarios, offering insights into funding redistribution and Treasury expenditure.

Projected shifts in funding

Their report, ‘School funding model: Effect of falling school rolls,’ utilises this model to project school funding trends up to 2030, examining the repercussions of declining pupil numbers on real terms school funding. By analysing DfE pupil projections, they anticipate a notable shift in funding allocation towards secondary schools by 2026-27, reflecting the evolving demographic landscape.

Regional disparities

Geographically, the analysis forecasts significant funding variations across England’s regions, with Yorkshire and the Humber, the North East, and London expected to experience substantial funding declines. Despite falling rolls, a modest increase in per-pupil funding could yield substantial savings, potentially enhancing the basic entitlement factor of the National Funding Formula.

This funding model provides school business managers with vital tools to anticipate and mitigate financial challenges, enabling informed decisions regarding resource allocation and budget management. By understanding the projected impacts of funding policies and demographic changes, SBMs can proactively strategise to optimise resources and support the educational needs of their institutions.

Click here to read the full report.