The government must rethink the school funding formula, a former education secretary has warned, with new analysis showing that falling pupil rolls have hit London harder than anywhere else in the country.
Conservative MP Damian Hinds said the current per-pupil funding system risks leaving schools financially exposed as numbers decline.
His comments come as new analysis from the Education Policy Institute (EPI) shows that nine of the 10 local authorities with the steepest declines in primary school rolls are in London.
Westminster saw a near 16 per cent fall in primary pupil numbers between 2020-21 and 2024-25, while Southwark recorded a 12 per cent drop and closed six schools in the same period, the EPI found.
The drop in pupil numbers
As a result of a drop in the birth rate, there are expected to be 400,000 fewer pupils in schools in England by the end of the decade, and primary pupil numbers have already dropped by 150,000 since 2019, the EPI says. London is expected to continue to see bigger falls than the rest of the country for the next five years, the analysis shows.
Schools are funded on a per-pupil basis, which means that falling pupil rolls are a big concern and big declines can lead to closures.
“If you measure funding in real terms per pupil, that is one thing when pupil numbers are growing,” Mr Hinds told Vlog. “But it is completely different when pupil numbers are shrinking. Most school costs are actually fixed costs - they don’t go up and down with the number of children.”
He added: “The [funding] formula has to reflect that and be somewhat less based on per-pupil numbers. Every school has a headteacher, a certain number of deputies, every class has a teacher, and so on. It’s really about thinking afresh about how you work out what each school gets, so they are able to do what they need to do.”
In order, the 10 local authority areas with the biggest falls in primary pupil numbers over the past five years are:
- Westminster
- Lambeth
- Southwark
- Hackney
- Camden
- Hammersmith and Fulham
- Islington
- Merton
- Wandsworth
- Redcar and Cleveland
The EPI is calling on policymakers to adopt strategies to adapt funding and school provision to cope with falling numbers.
Jon Andrews, the EPI’s head of analysis, said: “Schools with falling pupil numbers face increasing financial pressures, which can ultimately threaten their long-term viability.”
He added: “With primary enrolments expected to continue declining, it is essential that policymakers and admissions authorities adopt data-driven strategies to adapt school provision and funding to a changing educational landscape.”
The research found that London’s decline cannot be explained by the drop in the birth rate alone. While falling fertility is a key factor, increasing numbers of families are leaving the capital or dropping out of the state system altogether.
Around 20 per cent of children who started Reception in London in 2017-18 had left the city by Year 6, up from 17 per cent for the 2012-13 cohort.
Falling rolls felt beyond London
Mr Hinds, who was education secretary in 2018 and 2019, warned that the impact of falling rolls would be felt well beyond London in the coming years, with different pressures for different types of school.
“So far, inner London authorities have felt this the most. But we will see that more and more in different parts of the country,” he said.
“If you are a large secondary school, you can flex from a 10-form to an eight-form entry. In a concentrated urban primary area, some schools may merge, or there may be an opportunity to create more special-school or nursery places. Once you get into rural areas - where there is one village school - that becomes much harder again, because it is very difficult to flex up or down.”
Primary pupils in London are the most likely to either move between local authorities or leave the state education system, findings show. Local authorities in the East of England and the South East have recorded the largest influxes of pupils from the capital.
Paul Whiteman, general secretary of the NAHT school leaders’ union, said small schools are being hit particularly hard by falling pupil numbers.
“Rather than reducing funding or closing schools, we would urge the government to continue to invest and support local authorities to maintain staffing and resources,” he added.
You can now get the UK’s most-trusted source of education news in a mobile app. Get Vlog magazine on and on
