Carried out by the Institute for Fiscal Studies (IFS) and funded by the Nuffield Foundation, the report warns overall that cuts to education spending over the last decade will put a ‘major brake’ on the Government’s ambition to level up poorer areas of the country.
Early years funding
Looking at early years funding specifically, it says that ‘Before the pandemic, spending per hour on the early years entitlement tended to follow a ratchet pattern: meaningful boosts in 2012 and 2017 were followed by years of cash-terms freezes, eroding spending power in real terms.’
It goes on to state that the extra £160 million next year from the 2021 spending review will not be enough to cover rising costs.
With the increase in the Early Years Pupil Premium (EYPP), it says the ‘devil will be in the details. If the cash-terms level of the EYPP is then frozen at £342 a year, the uplift might only be worth £20 by the end of the Spending Review horizon in 2024-25’.
Neil Leitch, chief executive of the Early Years Alliance, said it was ‘clear why so many early years providers remain incredibly concerned about their ability to remain sustainable’.
He added, ‘This analysis from the IFS makes clear that while next year's increase in early years funding may be greater than previous increases, it is likely to be completely eroded by minimum wage rises, increases in national insurance contributions and general inflationary pressures.
‘Add to this the fact that many nurseries, pre-schools and childminding settings are still battling with the impact of being grossly underfunded for several years and the ongoing effect of the Covid-19 pandemic.
‘Instead of giving the sector just enough to survive and expecting us to be grateful for it, the Government should rethink its entire approach to the early years, and invest what is needed to ensure the delivery of affordable, quality and, crucially, sustainable care and education, both now and in the long term.’
Other key findings from the report reveal:
- Large cuts to overall public spending on education. Between 2010 and 2019, spending on education across the UK fell by £10 billion, or 8 per cent, in real terms.
- If education spending had remained at 5 per cent of national income, it would have been £16 billion higher in 2019.
- The 3 per cent real-terms increase in spending in 2020, mostly reflects the temporary extra levels of support during the pandemic.
- The fall in education spending over the last decade is in stark contrast to the continual growth in health spending over time.
- A lost decade-and-a-half in growth in school spending per pupil. Spending per pupil in 2024 is estimated to be at about the same level as in 2010.
- The squeeze on school resources is effectively without precedent in post-war UK history.
Luke Sibieta, IFS research fellow and an author of the report, said, ‘The cuts to education spending over the past decade are effectively without precedent in post-war history. Extra funding in the spending review will reverse cuts to school spending per pupil, but will mean 15 years without any overall growth. Recent funding changes have also worked against schools serving disadvantaged communities. This will make it that much harder to achieve ambitious goals to level up poorer areas of the country and narrow educational inequalities, which were gaping even before the pandemic.’
Josh Hillman, director of education at the Nuffield Foundation, said, ‘Of particular concern is the erosion of spending focused on disadvantaged pupils, partly as a result of the Pupil Premium not keeping pace with inflation for the last six years and partly due to its impact being undermined through policies that target funding on areas of the country with fewer disadvantaged children.
'The report paints a bleak picture'
School leaders' union NAHT said the report 'paints a bleak picture of f the Government’s priorities when it comes to investing in education or supporting our most vulnerable children.'
General secretary Paul Whiteman said, Over the last few years, we have seen a new funding formula that directs money away from the most disadvantaged, a pupil premium policy change that has led to the some of the poorest families not receiving funding they should have been entitled to, and a failure to deliver on long overdue SEND reforms.
'Despite all their rhetoric about "levelling up", the Government still fails to fully recognise that education is an investment in not only our children’s life chances, but in the nation’s future.'
A Department for Education spokesperson said, 'We are committed to levelling up opportunity for children and young people across the country, which is why we have made above-inflation increases in school funding every year since 2019/20, and have just announced a further funding boost of £4.7 billion by 2024-25, compared to previous plans. This includes an additional £1.6bn in the next financial year.
'The National Funding Formula replaced a system which was unfair, untransparent and out of date. Instead of similar schools and local areas receiving very different levels of funding with little or no justification, our system now ensures resources are delivered where they are needed most.'
The report is available here
- Hear from IFS senior research economist, Christine Farquharson, at Nursery World’s Business Summit on 8 March 2022.
