Chris Belfield Christine Farquharson Luke Sibieta Recent trends and challenges in spending per pupil across different stages of education Chris Belfield Christine Farquharson Luke Sibieta Slide Title 1 Presentation template 2

Importance of understanding changes in spending per pupil Latest evidence says higher levels of school resources can improve later life outcomes Particularly amongst disadvantaged pupils and even more so when preceded by high quality early years provision How have policymakers prioritised education spending in times of overall public spending cuts? How has spending per pupil changed across different stages of education over time? Best measure of resources available for individual pupils Often shaped by changing pupil numbers IFS PowerPoint User Guide © Institute for Fiscal Studies

Outline Areas of spending Early Years Entitlement and other spending Schools School sixth forms and further education Higher Education Key trends over time and challenges for policymakers England only, except for UK comparison in school spending IFS PowerPoint User Guide © Institute for Fiscal Studies

Near doubling of spend per child on early years entitlement since 2004 Annual Report on Education Spending in England © Institute for Fiscal Studies

Slower growth in spend per hour in most years 9% rise in 2017 to help deliver 30 hours extended entitlement Annual Report on Education Spending in England © Institute for Fiscal Studies

Spending on wider early years services stable or cut since 2010 Stable in real terms since 2010 This includes everything for free entitlement – 2yo offer and extended entitlement as well. 67% cut since 2010 Annual Report on Education Spending in England © Institute for Fiscal Studies

Presentation title to go here Children Services and Social Care Spending Rapid rise over 2000s with some falls since 2010 Changes 2009-10 to 2016-17 100% rise 13% fall 61% fall Frozen real-terms 22% rise 60% fall © Institute for Fiscal Studies

Summary and challenges for early years Free entitlement spending has grown substantially Total spending has risen from almost nothing in the early 1990s to £3.5 billion in 2017–18 Mainly driven by extensions to number of children & hours covered Hourly funding has grown by 32% since 2004–05; over a third of this growth came in the last year Meanwhile, other early years services have seen significant cuts Significant pressure on support for vulnerable children Challenges remain in designing a funding system that balances the cost to taxpayers with the importance of high-quality provision Particularly important in delivering the 30-hour entitlement Annual Report on Education Spending in England © Institute for Fiscal Studies

School spending per pupil mostly stable since 2010, with small cuts of 4% since 2015 Follows on from very large increases over 2000s Secondary school spending Primary school spending Annual Report on Education Spending in England © Institute for Fiscal Studies

... additional funding announced in Summer 2017 and 2018 prevents further real terms cuts Secondary school spending Primary school spending Annual Report on Education Spending in England © Institute for Fiscal Studies

Protection for funding directly allocated to schools, large cuts to sixth forms and LA services Total: 24% rise Notes: Figure are per pupil aged 3-19 © Institute for Fiscal Studies

Protection for funding directly allocated to schools, large cuts to sixth forms and LA services Total: 8% cut Notes: Figure are per pupil aged 3-19 © Institute for Fiscal Studies

Smaller cuts to school spend per pupil in Wales & Scotland where pupil numbers have risen by less Notes: * figures for Northern Ireland represent changes since 2011-12 © Institute for Fiscal Studies

Ongoing pressures on school spending Total school spending per pupil 8% lower than in 2009-10 Spending directly allocated to schools largely protected More than 50% cut to LA spending and over 20% cut to sixth form funding Significant cost pressures on high needs budget Stable overall incidence, but more pupils in special schools and with ASD New national funding formula reduces flexibility Teacher Labour Market Pressures Significant recruitment and retention problems at time of rising pupil numbers, particularly in maths and science subjects Ending of pay cap already means that public sector pay cap is rising faster than inflation IFS PowerPoint User Guide © Institute for Fiscal Studies

Rise & fall in FE and Sixth Form Spending Very large cuts to 19+ Further Education since 2010 22% cut since 2010 42% cut since 2010 18% cut since 2010 Annual Report on Education Spending in England © Institute for Fiscal Studies

Large cuts to 16-18 spend per student since 2010, particularly school sixth forms Extra funding for T-levels for extra teaching hours Same level as in 2006, about 10% above level in 1990 2010 to 2017: 8% cut 2010 to 2019: 8% cut 2010 to 2017: 20% cut 2010 to 2019: 23% cut 2019-20 Level will be 16% lower than in 2002 Annual Report on Education Spending in England © Institute for Fiscal Studies

Summary and Future Challenges Large increase in education participation amongst 16-17 year olds Falling numbers of 19+ learners, larger share now apprenticeships Large falls in spending 8% cut in 16-18 FE spend per student over 2010s 21% cut in school sixth form spend per student Over 40% fall in total 19+ FE spending Future challenges Delivering high-quality education with dwindling resources New T-levels with single awarding body due to start in 2020 – will they be ready and of high-quality from day 1? T-levels and apprenticeships focused on developing specific occupational skills - will this leave individuals vulnerable to economic/trade shocks? Annual Report on Education Spending in England © Institute for Fiscal Studies

Higher Education HE is a large and rapidly expanding part of the education system Around 1 million undergraduate students were in HE in 2017, more than double the number 30 years previously Provision of HE represent a significant cost to government Government pays out more than £17 billion per cohort of student that enter HE Includes spending on teaching grants, tuition fee loans and maintenance loans The HE system has been under continual reform in recent years ‘Post-18’ review may result in further reforms Annual Report on Education Spending in England © Institute for Fiscal Studies

University resources 17% Annual Report on Education Spending in England © Institute for Fiscal Studies

Government finances £800m saving in long-run cost £6bn reduction in deficit Annual Report on Education Spending in England © Institute for Fiscal Studies

Future challenges Ongoing review into post-18 system may mean further changes Reintroduce maintenance grants? Reduce interest rates on student loans? How to improve quality of education provided New data suggests big variation earnings by subject and institution Fees no longer planned to be linked to TEF Falling resources? Funding per degree fell by 25% between 1990–91 and 1997–98 and again by 9% between 2006–07 and 2011–12 Both fees and teaching grants are frozen in nominal terms this means real resources are likely to decline in coming years Annual Report on Education Spending in England © Institute for Fiscal Studies

Summary and overall challenges Early Years Increasingly focused on early years entitlement Challenge of delivering high-quality care and affordability Support for most vulnerable children Schools 8% cut in total school spending per pupil since 2010 Very challenging teacher labour market Large cost pressures on high-needs budget Further Education Delivering high-quality education with dwindling resources Higher Education Potential changes in post-18 review : fees, grants, loan repayments Transparency of figures in public finances Annual Report on Education Spending in England © Institute for Fiscal Studies

References Public spending on children in England: 2000 to 2020 (https://www.childrenscommissioner.gov.uk/publication/public-spending-on- children/) 2018 Annual Report on Education Spending in England (https://www.ifs.org.uk/publications/13306) IFS PowerPoint User Guide © Institute for Fiscal Studies