Mainstream school spending is projected to fall by an average of 2 per cent a year in real terms from 2028-29, according to official forecasts published alongside the Autumn Budget.
The (OBR) warned of ongoing pressures on school spending, particularly from special educational needs and disabilities, as the chancellor delivered a Budget with few new announcements for schools.
The an additional £60 million a year for PE and sport partnerships and up to £15 million over three years to improve access to books for young children.
However, Julia Harnden, deputy director of policy at the Association of School and College Leaders, said it was “concerning that the chancellor spoke for an hour and the word ‘education’ did not pass his lips even once”.
Here is what schools need to know from the Budget and associated economic forecasts:
Mainstream spending projected to fall
Mainstream school spending is projected to decrease by an average of 0.7 per cent annually in real terms between 2023-24 and 2031-32, according to the OBR.
However, its projections suggest a larger fall of 2 per cent a year between 2028-29 and 2031-32.
The forecasts are based on the Treasury’s future spending assumptions, which hold mainstream school funding per pupil flat in real terms. This means overall spending is expected to fall as pupil numbers decline.
These are projections rather than confirmed funding cuts. Departmental spending beyond 2028-29 is still subject to future government decisions.
The OBR says falling secondary student numbers could reduce pressure on government school spending, if they lead to fewer schools and teachers.
SEND deficits to reach £5.7bn
The OBR forecasts annual local authority SEND deficits will increase from £2.8 billion in 2025-26 to £5.7 billion in 2027-28.
Councils will continue to face financial pressures from SEND spending until funding for the system is taken over by central government from 2028-29.
The government committed to reimbursing councils for 90 per cent of SEND deficits accumulated up to the end of 2025-26, but the OBR says no commitment has been made for deficits after that point.
The fiscal watchdog also highlighted uncertainty over the impact of the government’s flagship SEND reforms - announced in February - on costs and the number of children receiving support.
The OBR assumes that underlying SEND spending will increase by just 0.4 per cent annually in real terms after 2028-29.
Capital budgets to fund defence
The government has confirmed reductions to government departments’ capital budgets to help fund its £15 billion Defence Investment Plan, as previously reported by Vlog.
Capital budgets across government departments will be reduced by a further 1 per cent from 2027-28 to 2029-30, raising £3 billion towards the plan.
The government announced earlier this year that departments would contribute 1 per cent of their capital budgets towards defence spending.
The Budget does not specify which school building or maintenance programmes, if any, will be affected by the reductions.
£60m a year for PE and sport partnerships
The Department for Education’s funding will increase by £60 million annually to contribute to the cost of new PE and school sport partnerships, the government announced.
The DfE previously announced plans for a PE and School Sport Partnerships Network, which is expected to begin delivering support from April 2027.
It is not clear from the Budget whether the £60 million annual increase is additional to the government’s existing commitments for PE and school sport.
Vlog has contacted the DfE for clarification.
£15m for books
The Treasury will provide up to £5 million a year for three years, starting in 2027-28, to increase access to books for preschool children.
The funding will support organisations such as Dolly Parton’s Imagination Library and BookTrust, rather than being allocated directly to school budgets.
This investment will, the government indicated, support its ambition for at least 75 per cent of children to achieve a good level of development by 2028.
£15m to tackle misogyny
The government over three years to support programmes aimed at preventing misogyny and improving outcomes for women and girls.
The funding will be provided through the Office for the Impact Economy, which will work with businesses and philanthropists to attract additional investment.
Organisations will be able to bid for grants to deliver initiatives, including mentoring for young people, education programmes and training.
The announcement follows the DfE’s plans, announced in September, to give schools guidance, teacher training and resources to tackle misogyny.
Higher minimum wage
The national living wage for workers aged 21 and over will increase by 3.9 per cent to £13.21 an hour from April 2027.
The national minimum wage for workers aged 18-20 will also increase by 3.9 per cent to £11.27 an hour.
The changes could increase costs for schools employing staff on the minimum wage.
The Budget does not outline additional school funding grants to cover the increases.
Higher-than-expected inflation
The OBR also warned that higher-than-expected inflation is reducing the spending power of government departments.
It now forecasts consumer price inflation of 3.4 per cent in 2027, up from its 2 per cent prediction in March.
The fiscal watchdog estimates departmental spending across government would need to be around £7 billion higher annually, on average, to maintain the real-terms value of the plans set out in the 2025 Spending Review.
Higher inflation could also mean increased costs for schools, and next year’s planned 3 per cent teacher pay rise could leave teachers with a below-inflation increase.
White Paper on Neet crisis
The chancellor also committed to publishing a White Paper and legislation next year following conclusion of the Milburn review.
Former health secretary Alan Milburn is leading the review into young people not in education, employment or training (Neet), with a final report expected in November.
An interim report, published in May, found that the school system does too little to prepare students for work and to support those most at risk of unemployment.
Mr Milburn later suggested that primary schools should identify pupils in danger of being jobless after leaving school at 16.
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