Senior Economist Jenna Julius says the pandemic has placed considerable pressures on school budgets and while the government has committed additional funds, it falls short of what some schools need.

Financial pressures

The pandemic has created significant additional strains on school finances, which are only likely to have been exacerbated by the most recent lockdown. With teacher salaries frozen for the coming year, the government’s upcoming £2.2 billion increase in school funding for 2021/22 will go some way towards easing these financial pressures.

However, not all schools are set to benefit equally from this increase. With the impact of Covid-19 set to continue into the summer months, there is a group of particularly at-risk schools who are likely to continue to struggle to meet the costs of the pandemic. And while teacher-retention challenges have generally eased during this period, there is also a risk that freezes in teaching staff salaries, on the back of a very challenging year, are storing up retention problems for the future.

Spending review falls short

In the November 2020 Spending Review, the government signalled its intention to freeze teacher salaries for the 2021/22 academic year, as well as delaying its commitment to raise teacher starting salaries to £30,000. However, the government reiterated its commitment to the current three-year spending settlement, which includes a £2.2 billion increase in school funding for 2021/22. While this will go some way to easing the pressures on schools, it will not be sufficient for all schools.

A report published by the National Foundation for Educational Research (NFER) in December (tinyurl.com/mxkkeml9) found that schools had incurred substantial additional expenditures to meet the costs of Covid-19 and had lost a significant share of the self-generated income they might usually expect to generate (for example, by renting out their premises).

Our research identified that the existing and new funding provided by the government in 2020/21 was insufficient to cover the additional costs of the pandemic, at least for a number of schools that were particularly at risk from the financial impact of the pandemic.

Our report identified approximately 1,500 schools that were particularly at risk, which had either a deficit or a small surplus before the pandemic, whose notional increases in funding in the 2020/21 academic year would not have covered their usual school cost increases (for example, teacher pay increases) and Covid-19 costs. Many of these at-risk schools are set to continue to receive smaller than average increases in 2021/22. Without additional support, these schools are likely to continue to struggle, as the additional income they receive in 2021/22 (once the freeze in teacher salaries has been accounted for) is unlikely to cover the previous year’s shortfall and the ongoing costs and income losses of the pandemic.

Deprived schools are set to benefit the least from recent funding increases

More generally, deprived schools stand to receive the smallest average increases in funding in 2021/22 due to the government’s ‘levelling-up’ policy, which is focused on raising the minimum level of funding received per pupil. As more deprived schools already receive higher levels of funding per pupil than other schools to reflect the increased challenges they face, they are set to experience the smallest increases in funding in 2021/22.

Given that deprived schools also received smaller increases in funding during the last financial year, they are disproportionately at risk of not being able to meet the additional financial pressures of the pandemic. This is particularly concerning as the most deprived schools face the biggest challenge in supporting their pupils to catch up, and ensuring pupils are in a position to engage with remote learning highlighted in our research (tinyurl.com/5yhjy2v3).

Current catch-up support is unlikely to reach all pupils who need it

To help schools in catching up, the government has provided support through the catch-up premium and National Tutoring Programme (NTP). Looking forward, the government is extending the NTP for another academic year and will be providing £200 million of additional funding to secondary schools for face-to-face summer schooling. The government has also recently announced a new recovery premium, which will provide schools with £302 million of additional funding to support their disadvantaged pupils in catching up.

However, given that catch-up support needs are only likely to have increased with the most recent lockdown, the current scale of existing and planned catch-up provision is unlikely to reach all pupils who need it, particularly among the most deprived pupils. Indeed, the additional catch-up funding that has just been announced represents less than a few per cent of total pre-16 school funding. This pales in comparison to the task that many schools face in supporting their pupils to catch up.

Implications for school leaders

Given that the 2021/22 funding increase will be insufficient to ease the current financial pressures for some schools, there is a risk that these schools will need to divert resources, which could be used for teaching and catch-up, or place additional pressures on their workforce to meet these needs. In addition, the pandemic has also had a significant impact on the school workforce, which coupled with freezes in teaching staff salaries, runs the risk of exacerbating pre-pandemic retention challenges.

The process of recovery from the pandemic is likely to be a long one and school leaders will need to do their best to ensure that, despite the current financial pressures they are facing, staff are well prepared to meet the challenges that lie ahead.

School leaders already face the enormous challenge of having to innovate, collaborate and adapt to ensure their schools’ financial sustainability, never mind that the government may well tighten the purse strings as we emerge from the pandemic.

NFER Direct

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Jenna Julius
Senior Economist, National Foundation for Educational Research (NFER)
@JuliusJenna

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