School Costs

National Audit Office base index

This chart shows cumulative costs pressures facing schools, 2016-17 to 2019-20

The NAO chart as a table:

We have used these figures for additional National Insurance costs and the Teachers’ Pension Scheme. We have used the Department for Education (DfE) document, documents, Schools’ costs: 2018 to 2019 and 2019 to 2020 (Feb 2018), Schools’ costs: 2018 to 2019 and 2019 to 2020 (Jan 2019) and Schools’ costs: 2020 to 2021 (Jan 2021) to update the table.

Annual pay award and salary increases

Teaching staff

The pay rise for 2016-17 was 1% for all teachers. For 2017-18 and 2018-19, the pay rise varied for teachers paid on the Main Pay Range (MPR), the Upper Pay Range (UPR) and the Leadership Pay
Range (LPR).

Schools’ Costs 2018-19 to 2019-20 gives the average cost increase in teachers’ pay as 1.2% for 2017- 18 academic year (paragraph 26) and 2.7% in 2018-19.

HMT Economic Evidence to Review Bodies 2020 (table 3.1) gives average pay rises for teachers of 2.4% in 2018-19, 2.75% in 2019-20 and 3.1% in 2020-21.

Non-teaching staff

The National Joint Council (NJC) sets the pay of support staff in maintained schools. We have assumed that this sets pay for all schools.

Schools’ Costs 2018-19 to 2019-20 gives the awards for support staff as 1.2% for 2017-18 and 3.1% for 2018-19. The award for 2016-17 was the same as 2017-18, they were part of a two-year settlement. The NJC awards for the last three years are below. Low paid workers make up a larger proportion of school support staff compared with all staff covered by the NJC, and pay awards have been larger for the lower paid. The result is that school support staff have received a larger than average percentage rise.

A table showing years between 2016-22 with NJC award and NJC award for school staff

 

The increase in support staff pay has been driven by the increases in the National Living Wage (NLW). These will continue as the NLW must reach £9 per hour by April 2020. We have therefore
assumed that support staff pay will increase at the same rate as for the last two years.

Schools’ Costs 2018-19 to 2019-20 (paragraph 9) says: “The three primary categories of expenditure examined, with respective proportions of the total in 2016-17 (the latest full outturn year), are: teaching staff (52 per cent), non-teaching staff (29 per cent) and non-staff (19 per cent).”

Teachers’ pay year starts on 1 September, whereas support staff have their pay determined in line with the financial year. So, we have adjusted the teachers’ pay rise to fit the financial year by using
5/12ths from the previous academic year and 7/12ths from the current year.

A table showing teaching staff and non-teaching staff as proportion of all school costs and proportion of staff costs between 2016 and 2019

A table showing teaching staff and non-teaching staff as proportion of all school costs and proportion of staff costs between 2019 and 2022

 

Apprenticeship Levy

Schools’ Costs 2018-19 to 2019-20 (paragraph 27) gives the costs of the apprenticeship levy as 0.3% for 2017/18.

Non-staff costs

We used the general inflation to measure non-staff costs. We used the CPI Annual Rate from the ONS. Previously we have used the GDP deflator, this has been hugely distorted by Government spending to cope with the pandemic and is not a sensible estimate for 2020 onwards. The non-staff costs are 19% of school costs.

Table to show consumer prices index, cumulative inflation and cumulative impact on school costs between 2016-22

School costs index

 

Table to show school costs index years 2016-22

The overall increase in school costs since 2015 is 7.5%, this is 0.6% higher than the National Audit Office (NAO) anticipated and is due to the end of the 1% pay cap for public sector wage workers in 2018-19.

Overall, we expect school costs to rise by 3% a year for the next three years – this is only slightly higher than the average increase of 2.5% a year for the last four years.

Growing Schools

We excluded schools that opened in 2015-16 from our analysis to ensure that the funding the school received for 2015-16 covered a full year.

Calculating school-by-school figures

This data release looks at the impact of the Government’s recent school funding announcements on individual schools and compares them with our baseline of school funding in 2015-16.

Funding included:

Funding not included:

  • High Needs funding
    This part funds the education, health and care (EHC) plans and statements for students at the school. Schools receive an allocation for general special education needs provision as
    part of the Schools Block. In total, there were 130,030 pupils with an EHC plan or statement in mainstream schools in 2019-20. Because of the relatively small number of pupils and
    potentially large individual allocation, it is difficult to see trends in funding on a school-by-school basis. Local authority averages are more appropriate.
  • Early Years
    Early Years funding covers the provision of:

    • the 15 hours entitlement for disadvantaged two-year olds;
    • the universal 15 hours entitlement for all three- and four-year olds;
    • the additional 15 hours entitlement for eligible working parents of three and four;
    • the Early Years Pupil Premium;
    • the Disability Access Fund;
    • Maintained Nursery School supplementary funding.

    The allocations are not provided at school level. Many primary schools have nurseries and so this is an important revenue stream. The Maintained Nursery Schools supplementary fund provides 31% of the total funding for these schools and so it is vital to their continued existence. There are no plans to continue the fund beyond April 2020.

  • Service Child Pupil Premium, Pupil Premium Plus for Looked After Children and Pupil Premium Plus for Post-LAC.
    These allocations are not published for individual schools because they are allocated to a small number of pupils and publishing school level data would jeopardise their privacy. In
    total, they cover 181,806 pupils for 2018-19 and the allocations amounted to £265,649,133 for 2018-19, less than 1% of the Dedicated Schools Grant.
  • Central Services Schools Block
    This funds services provided by local authorities to schools – services include behaviour support, school improvement and assessment management. It replaces the Education Services Grant (ESG) that was paid to local authorities for maintained schools and directly to academies. In 2014-15, the ESG was £1.02bn. The value of the Central Services Schools Block is £468m for 2019-20.
  • 16 to 19 allocations
    This funds sixth form teaching in secondary schools. The allocations for 2019-20 have yet to be published, let alone the allocation for 2020-21. Consequently, we do not have a data source to use.
  • Universal Infant Free Schools Meal
    We did not include this funding since it was given to schools to replace lost income from parents paying for their children’s meals.

Calculations

Teachers’ Pay Grant

Schools have been given an additional grant to help pay for teacher pay rises since 2018-19.

Pensions Grant

Since 2019-20, schools have been awarded an allowance to cover the cost of the increase in the employer contributions to the Teachers’ Pension Scheme.

2020-2021 prices

We converted the monies listed above into 2020-21 prices using the school costs index above. We then calculated the change in per pupil funding in real terms using 2015-16 as a baseline.

Area Cost Adjustment

We used the Area Cost Adjustment for 2020-21 to remove additional area costs

Funding Baseline

To calculate the change in per pupil funding:

  • Funding 2015-16 = Total Schools Block Allocation (Pre MFG) 2015-16
  • Pupils 2015-16 = Total Number of Pupils 2015-16

To calculate the shortfall in school income, we found the amount necessary to restore the per pupil
funding in real terms to its level in 2015-16.

  • Funding shortfall 2016-17 = Change in per pupil funding 2016-17 x Total Number of Pupils 2016-17
  • Funding shortfall 2017-18 = Change in per pupil funding 2017-18 x Total Number of Pupils 2017-18
  • Funding shortfall 2018-19 = Change in per pupil funding 2018-19 x Total Number of Pupils 2018-19
  • Funding shortfall 2019-20 = Change in per pupil funding 2019-20 x Total Number of Pupils 2019-20
  • Funding shortfall 2020-21 = Change in per pupil funding 2020-21 x Total Number of Pupils 2020-21
  • Funding shortfall 2021-22 = Change in per pupil funding 2021-22 x Total Number of Pupils 2020-21

All the data and summary tables are available for download