Schools face tight budgets next year as the “spiralling costs” of special educational needs provision and boosts to teacher salaries threaten to outstrip the growth in school funding.
Pupil numbers are expected to fall by 2% between 2025 and 2027 – and a saving of £1.2bn could be made every year by freezing spending per child in real terms.
But the Institute For Fiscal Studies (IFS) has said state school funding per pupil in England will not cover both special educational needs and disabilities (SEND) provision requirements and a rise in teacher pay of 2.8% from September 2025.
The government has projected SEND spending will grow by £2.3bn between now and 2027 without reforms.
The IFS said this will make finding savings in the schools’ budget “impossible without cutting mainstream per pupil spending in real terms”.
Luke Sibieta, IFS research and author, said: “Spiralling costs of special educational needs provision seems likely to wipe out any opportunities for savings in the schools budget from falling pupil numbers.”
The IFS report estimated that mainstream school funding per pupil grew by 5% in real terms between 2019 and 2024, rather than the 11% total increase, after accounting for planned spending on high needs.
“This may explain why school leaders have felt their budgets squeezed by more than might be implied by large increases in overall funding,” the researchers said.
Daniel Kebede, general secretary of the National Education Union called funding for SEND support and pastoral care “totally inadequate”.
“Children and young people’s education has been seriously compromised through a lack of funding.
“The government must address this problem head-on and ensure that our schools and colleges get the funding they desperately need.”
The estimates were published in the latest annual report on education spending in England by researchers at the IFS, funded by the Nuffield Foundation.
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The IFS also said the planned increase in university tuition fees will only provide a slight help for university finances, which have suffered from declining international student numbers and a decade of cash-terms freeze.
The poorest university students will be able to borrow 10% less in real terms than in 2020 to cover maintenance costs, it said.
Funding in sixth form colleges remains well below 2010 levels, while the number of young people in colleges and sixth forms is expected to grow by 60,000 by 2028, the report said.
Menawhile early years is set for the biggest ever increase in funding and from September 2025 children in working families will be entitled to 30 hours of funded childcare a week from nine months old.
A Department for Education spokesperson said: “One of the missions of our plan for change is to give children the best start to life.
“This was built upon the steps set out at the budget which increased school funding to almost £63.9bn in financial year 2025-26, including £1 billion for children and young people with high needs.
“We are determined to fix the foundations of the education system that we inherited and will work with schools and local authorities to ensure there is a fair education funding system that directs public money to where it is needed to help children achieve and thrive.”
