The Chancellor of the Exchequer, Jeremy Hunt, has set out the Spring budget for 2024 to outline the status of the UK economy and announce further economic plans by the government for 2024-25 and further.

Financial status of education sector

Leaders in the school sector have been calling for the need of additional funding for schools to address financial challenges facing school estates such as low minimum per-pupil funding. After the previous budget announcement of Autumn 2023, schools were left in hopes for increased support for education funding.

The Department for Education has acknowledged that whilst education funding may be at the highest level for 2024-25, schools may be still facing severe financial challenges. The main issues facing schools and trusts currently are rising energy bills and the cost of food, and retention crisis leading to increased costs on agency staff. According to a financial health check report on more than 2,300 schools in England, these factors brought almost half of MATs into a deficit last year.

In October the Department for Education revealed an error in funding figures for state schools in England, which resulted in £50 less funding for each pupil for primary and secondary schools than the original forecast. As a result, this has placed pressure on school leaders to re-adjust planned budgets for 2024-25. Many school leaders may find themselves seeking assistance with budget planning and funding applications as a result. 

How have school budgets been affected?

Increases in staff costs for schools reflect the increases introduced by the government for the National Living Wage. According to data released by the Institute for Fiscal Studies (IFS), increases in staff pay have caused schools to face increases in costs faster than rates of inflation.

UK economic growth overall has faced stagnation since the beginning of 2022, with the UK entering a ‘technical recession’ at the end of 2023. Peaking at 11.1% in October 2022, the inflation rate has declined to 4.0% as of January 2024 and is expected to continue to fall during the year.

Hunt on public services performance

Speaking on public services during his speech to parliament, Hunt stated that ‘good public services need a strong economy, but a strong economy also needs good public services’. In 2010, schools in the UK were behind Germany, France, and Sweden according to data released by the OED’s Programme for International Student Assessment (PISA) in rankings of reading and Maths. Commenting on this, Hunt stated that after conservative reforms, the current UK ranking has overtaken these and improved overall.

‘Increased efficiency’ in the public sector

Public service spending has increased since 2010 and has continued to rise each year. However, in consideration of tax cuts, Hunt has called for increased efficiency in the public services sector through the ‘public sector productivity plan’.  From 2025-26 onwards, day to day spending will increase by 1% above inflation to improve public finances. Whilst maintaining a positive outlook, schools may still have concerns over the need for funding.

Accessing funding support for schools

If you may have concerns over managing the budget of your school and academy, our team of trusted advisors can help you to access funding solutions for your estate.

We understand the difficulties of managing your budget effectively when faced with limited time and are committed to helping schools and MATs in achieving sustainability goals and reducing costs through improving your building’s energy efficiency.

Whether you may be seeking to fund maintenance of your building through the Condition Improvement Fund or understand how to plan reaching net zero targets through the Public Sector Decarbonisation Scheme, we can provide the best guidance for you today.