Wednesday, 25 November 2015

The 10 key education headlines from the spending review


  • The Autumn Statement was published today. Overall DfE spending will fall just 1.1% over the next four years. Even in the "unprotected" areas that were expected to be cut by around 25% reductions are much lower - somewhere between 5 and 10%. While this is much better than feared it still means providers across the sector will be seeing significant reductions in spending power over the next few years.


  • The 5-16 school budget is protected in real terms. This means that the amount of money currently given to schools will increase in line with expected inflation. However it does not take into account the additional 500k pupils coming into the system over the next five years so will still mean a 7-8% cut for schools (also taking into account changes to employer pensions and national insurance). This is a slightly better deal than was promised before the election.
  • The extra cash in the schools settlement will help the transition to the National Funding Formula which will start in 2017. There will be a consultation in Jan/Feb next year but we know it will be a phased introduction so schools that lose out won't get the full hit all at once.
  • The Education Services Grant, which is currently £820m, and gives a per pupil amount to local authorities and academies to pay for a variety of services is being cut by £600m. This is the only new big cut in the DfE settlement. It will take about £90k out of the budget of a large academy. The remaining money left over will presumably be used to cover LAs statutory duties and the DfE will also look to reduce the number of statutory duties to help.
  • £1.3bn over four years will be provided for teacher recruitment and training. It's pretty hard to tell what this is being compared to. But I reckon it means funding will continue more or less in line with current spending.
  • Capital budgets are essentially flat in cash terms. So existing maintenance and basic needs grants will stay at similar levels and the Priority Schools Rebuilding programme will continue at the same rate. The 500 free school commitment will be met.


  • The base rate paid for all post-16 pupils is protected in cash terms (i.e. won't go up in line with inflation). We don't yet know if the other aspects of the post-16  formula (e.g. disadvantage) will take a greater cut. Either way it's a better outcome than many feared as this protection wasn't offered before the election.
  • Sixth form colleges will now be able to convert to academy status which means they won't have to pay VAT. This is a very significant saving for these colleges and helps simplify the system a bit.

Early Years

  • There will be an additional 15 funded hours of childcare for three and four year olds as promised in the Conservative manifesto. These hours will only be available to those families where no parent earns more than £100k and where both parents work (equivalent to 16 hours of work at the minimum wage).
  • There will be an increase in the hourly rate paid to childcare providers from 2017. The new rate swill be £4.88 for 3/4 year olds and £5.39 for 2 year olds.


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