Early years education and colleges to bear brunt of funding squeeze – IFS

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Early years education, colleges, sixth forms and universities will all face a difficult few years ahead, experts have warned, after being left out of the funding increases announced by the Chancellor last month.

In a “stark” new report, the Institute for Fiscal Studies has warned that rising costs as a result of surging inflation over the last year has left colleges and sixth forms in particular in a “difficult position” in the wake of Jeremy Hunt’s autumn statement.

The think-tank also warns that while an additional £2.3 billion for schools in England will return spending per pupil in 2024 back to the most recent high point of 2010, it will still mean resources are squeezed in the years to come.

The findings come from a new report by the Institute for Fiscal Studies focused on education spending and brings with it warnings that colleges and sixth form establishments are likely to bear the brunt of the Chancellor’s spending squeeze.

Announcing his budget last month, Mr Hunt called education “pro-growth” and said it was a “moral mission” to educate the country’s children.

Yet the report reveals the severe pressures facing the sector, despite past Government funding commitments.

Both colleges and sixth forms, the Nuffield Foundation-funded report says, saw the largest cuts in spending per pupil up to 2019.

Those are only due to be partially reversed, while alongside rising costs the number of 16-18-year-olds is set to rise by 18% over the next decade – adding further pressure to already stretched budgets.

Luke Sibieta, an IFS research fellow who authored the report, said that inflation had “seriously eroded” the value of spending on early years and higher education.

He warned that colleges and sixth forms are also in a “much worse position” than schools.

“They saw bigger cuts in the last decade, which are only being partially reversed. Unlike schools, they received no additional funding in the autumn statement for higher-than-expected costs and will need to accommodate an extra 200,000 students by 2030.”

That is despite the proportion of the UK population in full-time education rising from 18% in the early 1980s to around 20% today.

The IFS study also reveals that the pupil population is expected to decline by 700,000 between 2024 and 2030, reversing all of the increase in student numbers since 2010.

Adult education is also facing a squeeze, despite total spending being set to increase by 22% between 2019 and 2024 as a result of £900 million in extra funding announced in the 2021 spending review.

According to the IFS, this will only reverse a “fraction” of past cuts, with spending 22% below 2009 levels.

Josh Hillman, director of education at the Nuffield Foundation, warned of “significant financial strains” facing the wider sector.

“While these are not being felt equally, we can see that early years, primary and secondary schools, post-16 provision and higher education are all facing challenges that can only compromise the standard of teaching, care and support being delivered to our children and young people.

“They are ultimately the ones who will lose the most from an education system which is receiving historically low levels of funding as a proportion of government spending.”

Dr Mary Bousted, the joint general secretary of the National Education Union, called the findings “stark”.

“The additional £2 billion campaigners won at the autumn statement are still not enough to restore all the cuts,” she said.

The Liberal Democrat education spokesperson Munira Wilson called the Government’s approach “disastrously short-sighted”.

A Department for Education spokesperson said: “In recent years we’ve transformed the skills landscape introducing new high-quality T Levels, Skills Bootcamps and Institutes of Technology backed by £3.8 billion over this Parliament.

“In the autumn statement we announced Sir Michael Barber will be advising on skills implementation to drive forward delivery of these reforms.

“This is alongside a significant £750 million boost for our world-class higher education sector.

“We are committed to improving parents’ access to affordable, flexible childcare and are currently exploring a wide range of options to do this.

“We have already increased funding to local authorities to increase the hourly rates they pay to childcare providers and invested more than £20 billion over the past five years.

“On top of all this, we are supporting colleges and early years providers with the rising costs through the Energy Bill Relief Scheme, as well as £500 million for energy efficiency upgrades to help keep colleges bills down in the future.”

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