State schools could face closures, larger class sizes and cuts to after-school clubs, education leaders have warned after Rachel Reeves announced a major funding shake-up.
From 2028/29, the cost of SEND provision will be fully absorbed into the existing Department for Education (DfE) budget for state schools, rather than the budget for local authorities, the Chancellor has announced.
The Government has not set out how it intends to account for the £6bn cost, with major reforms to the special educational needs and disabilities (SEND) system, including the provision of EHCPs, due early in the new year.
Expensive education, health and care plans (EHCPs) have been placing huge financial pressure on cash-strapped councils.
But the Office for Budget Responsibility (OBR) said “no savings have been identified” by the Government to offset the £6bn pressure the DfE is set to face.
If SEND provision was to be fully funded within the department’s £69bn core schools budget, this would imply a 1.7 per cent fall in spending per pupil in mainstream school rather than the planned 2.4 per cent increase, said the OBR.
It has raised serious concerns about the impact on state school pupils and the planned SEND reforms, with unions describing the consequences as “catastrophic”.
Schools are now facing the threat of strikes over the effects of real-term funding cuts, with the National Education Union (NEU) threatening to ballot for walkouts.
Reducing per-pupil funding would have a “catastrophic impact on educational provision”, warned the Association of School and College Leaders (ASCL).
Julia Harnden, its deputy policy director, said: “Even under current Government plans where overall school funding roughly keeps pace with inflation, the reality is that cost pressures – such as SEND provision, falling pupil rolls, and staff costs – mean many schools will have to make substantial cuts over the next few years.
“If we end up in a situation where funding rates actually fall in real-terms, the impact on schools would be even more severe. We would certainly be looking at the closure of more small primary schools, much larger class sizes, and deeper cuts to curricular and extra-curricular provision.”
Harnden said it is unlikely that the Government intends for this to happen, but called for urgent clarity on how it intends to manage the full costs of SEND without this impacting on wider school funding.
SEND reforms imminent
The latest Budget announcement is yet another signal that major upheaval to how the SEND system operates is imminent, with expected changes to how children receive extra help and who is entitled to statutory support.
But parents are worried that their children could lose access to hard-won support via EHCPs, and that there is not enough funding in the system for the reforms to be successful.
Currently, SEND is funded via the dedicated schools grant (DSG), which is split between funding to mainstream schools via the “schools block” and topped up with local authority funding via the “high-needs block”.
Pressure on local authority budgets has grown in recent years, partly due to the surge in the number of children with EHCPs, leading to growing deficits.
In 2020, the Government introduced a system to allow local authorities to ignore SEND deficits. It has been extended twice and is now due to expire in 2028, when cumulative deficits are set to reach £14bn.
The Government’s shake-up means that local authorities would no longer build up SEND deficits, but they would still be required to recognise the historic deficit once the statutory override is removed, meaning many would have to issue bankruptcy notices.
It is unclear how the central Government budget would account for funding all SEND services.
Reeves also announced funding for secondary school libraries, and to improve and upgrade playgrounds.
But education unions criticised the Chancellor’s fiscal statement for including “nothing” to boost school budgets, which they say are “running on empty”.
The NEU said it will “not accept the continued underfunding of our schools” and threatened to ballot for strike action, with its national executive meeting this Saturday.
“We must convince this Government to change course – even if that means balloting for strike action,” said Daniel Kebede, general secretary of the NEU. “We must – and we will – save our schools.”
“This wasn’t a Budget focused on public spending and school finances remain in a perilous state, with some school leaders facing really unpalatable choices around cuts to staff and resources,” said Paul Whiteman, general secretary at school leaders’ union NAHT.
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