As the dust settles on the 2024 General Election, what does this mean for state education?
For veterans of the academy sector it was notable how little education policy featured as a headline item from any of the main parties. We are a long way from the 2010 campaign when the turbocharging of the academy programme under the Conservative-Liberal coalition changed the landscape of education in England and Wales from something that was almost entirely run by local authorities to the current situation where over 80% of secondary schools are now run as academies.
The education issue that seemed to gain the most traction was the Labour proposal to charge VAT on independent school fees, part of a headline commitment to recruit 6,500 new teachers in key areas “paid for by ending tax breaks for private schools”.
Whilst the focus of media commentary was the potential imposition of VAT on private school fees, the manifesto also indicates that the new Government will abolish the business rates reduction that charitable independent schools are able to access.
With the new Chancellor having indicated that there will not be a budget until after schools have returned for the autumn term, the impact of any changes on the state sector in terms of pupil numbers leaving the independent sector, or changes to core funding lines and priorities may take some time to flow through.
In terms of the headline policy, few would argue that there is a significant shortage of qualified teachers in many key areas such as physics and maths: with much focus being placed on the importance of the knowledge economy then there is a clear imperative to ensure that there is a strong base of STEM education in schools.
What was not clear from any of the manifestos was any clear plan to deal with the broader financial pressures facing schools, several of which have been highlighted by the Kreston Academies Surveys and other research. These include:
‘Free’ breakfast clubs in every primary school. Another manifesto commitment that has been silent on the funding so far. Many primaries currently offer pre-school provision, although this is often outsourced and paid for individually, so a move to an all-school model will represent a fundamental, and often costly, change. With this will come questions over funding and the availability of staff and perhaps even premises, together with the timetable for such changes to be implemented
Pay costs. The new government’s manifesto noted that teacher retention needed to be improved, especially in STEM subjects. At the same time there is a commitment to reinstate the School Support Staff Negotiating Body with a view to increasing both recruitment and retention in support roles. Pay scales and retention payments will surely need to be part of that approach which will almost certainly see total pay costs rise further at a time when general inflation and also increases in Teachers’ Pensions contributions have driven costs up steeply. How much of any incremental awards will be covered by additional funding, and how much will schools be expected to cover from existing budgets and reserves?
Core funding and reserves. The 2024 Kreston Academies Benchmark Report indicated that 47% of survey respondents had reported an in-year deficit to August 2023, and 75% reported that they expected reserves to fall over the next three years. It was noticeable that the schools which expected to fare the best in terms of in-year and cumulative financial performance were the large MATs of more than 7,500 pupils. The 2022 Schools White Paper proposal that ‘most’ academy trusts should work towards including at least 10 schools or 7,500 pupils was quietly shelved, with many educators questioning whether there was sufficient evidence that trust size in itself was a driver for school improvement (but without considering the financial implications). If there are no major increases in per-student funding, might we see a renewed push from the ESFA towards further consolidation in the sector as part of driving financial sustainability?
In summary, whilst state education featured very little in the election debate, the new government’s manifesto includes a number of pledges which will only add to the cost pressures on schools, whether from income or capital budgets. At the same time there is not yet any indication of to what extent, if at all, these will be covered or even part-mitigated by any future funding increases.
The academy sector will be watching the new administration’s first budget with great interest.
If you wish to discuss this further, please use the contact one of our Education team members here at James Cowper Kreston.
