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The cost of living crisis will hit schools hard

Schools, like homes and businesses, are facing a financial squeeze over coming months. Spiralling inflation and rising staff costs are set to threaten England’s schools just as they are getting back to an even keel after the pandemic.

Unlike businesses, schools have no profit margin to cushion the blow of rising prices. The six-month support scheme for non-domestic energy users, including schools, announced by new prime minister Liz Truss in September 2022 will bring little reassurance, as it contains no detail and leaves open the potential for costs to rise again before the end of the year.

A House of Commons report in July noted that schools in England had absorbed a 9% real-terms cut in income between 2009–10 and 2019–20. Former chancellor Rishi Sunak had already acknowledged this in the 2021 budget pledge to return English schools to 2010 levels of funding.

However, an independent analysis by the Institute of Fiscal Studies suggests that school costs have been rising and will continue to rise faster than any funding increases: a real-terms cut, despite government pledges to the contrary.

School funding is not straightforward. It is delivered through complicated mechanisms that involve local authorities to a varying degree, depending on the type of school. The initial stages of a plan for a national funding formula for England were introduced in 2018, though the government is still working on the finer details of this.

Squeezed budgets

In the meantime, school funding depends on the location and pupil population demographic. Schools are largely funded on the basis of pupil numbers: a “per-pupil” amount that is applied each spring once a school’s autumn numbers have been determined.

This means that budgets are set before the summer. Teachers are hired, resources purchased, and staffing planned, all before the summer break. This is why developments over recent months, which include spiralling costs, will now be keeping school leaders awake at night.

As well as allowing for continuously increasing energy and equipment costs, budgets that were set in June are also having to accommodate unfunded increases to the salaries of both teachers and support staff that were announced later in the summer.

Teacher looking worried sat at child's table
Schools may have difficult decisions to make about where to allocate funding. DGLimages/Shutterstock

The Association of School and College Leaders has warned that rising costs are likely to lead to cuts in education provision. The National Association of Head Teachers says there is “no doubt” that we will see “cuts to education, services and school staff” over the coming year.

Schools are reluctant to say how they will find the savings they need to make, though some suggestions have started to emerge. An Essex headteacher has said that his school can no longer afford textbooks, and there have been reports of schools considering a shorter week or a shorter teaching day in order to cut costs.

Impact on children

The most difficult issue is that schools usually spend about 80% of their budget on staff salaries, so there is little room for manoeuvre unless they are to face the unpalatable prospect of reducing staffing.

This may be done least painfully by not filling vacancies and ending fixed-term contracts, but each of these will have a direct impact on children, who may end up in bigger classes or with less classroom support. In a 2021 survey, one headteacher said her school was already unable to afford a caretaker and Special Educational Needs Coordinator – a legally required role.

Schools often offer free breakfasts and lunches to children in need, and may offer support with uniform and other costs. These vital support mechanisms are likely to be the first things to be cut as schools struggle to afford classroom teachers and teaching assistants. At the same time, though, the number of families in need of this assistance is likely to rise.

One charity, the Child Poverty Action Group, has suggested that there are 800,000 children living in poverty who are not receiving a government-funded school lunch. There are reports that schools might have to offer cold lunches only, in a bid to reduce energy costs.

Small schools and those with larger numbers of children that need more support are likely to suffer disproportionately. It seems, though, that anyone with an interest in schools — children, their parents, and school employees — has a right to be concerned. Schools could be facing a crisis every bit as hard-hitting and long-lasting as that caused by the pandemic.

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