Technical note on Schools' Cost 2021-2024

The Department for Education (DfE) has just released a technical note on the financial position of schools.

In summary:

2021-22 - The DfE estimates that the funding that goes to mainstream schools has risen by 3.5% overall, while their underlying costs are increasing by 2.5%, on average, at the national level, meaning schools’ expenditure could increase a further 1.1% this year.

2022-23 - Core funding to mainstream schools is set to increase by 6.8%.

This is meant to cover emerging cost pressures such as:

• the Health and Social Care Levy
• the resources needed to raise attainment
• pay awards and other costs.

The technical note calculates that costs excluding pay awards are set to increase by 1.8%. The remaining 5% therefore needs to cover the pay awards

2023-24 - Schools could afford to raise expenditure by a further 1.6%. This assumes that the £2.1 billion available for further spending in 2022-23 is all spent.

Implications for financial planning

Over the two years 2022-23 and 2023-24, total funding will increase by 9.8 per cent and costs by 3.0 per cent compared to 2021-22.

The technical note states that given the front-loading of funding increases in the latest settlement, in practice this could mean schools not spending all of its 2022-23 additional income and instead carrying it forward in reserves.  

The technical note recommends that schools should review the proposals for the upcoming 2022 and 2023 pay awards in the evidence to the STRB, as this could influence their budget setting process.