IFS warns education budget cuts could undermine schools and colleges

The Department for Education in England could face a £2.6bn cut by 2028-29 if treated like other unprotected budgets, potentially reducing school and college funding amid growing challenges, the IFS has said.

According to a new report, funded by the Nuffield Foundation, protecting schools and the 16-19 education budget would require a more than 20% cut across areas such as adult education, apprenticeships, higher education support and other education funding. 

The report analyses the trade-offs and challenges facing policymakers on education in the Spending Review, with a particular focus on schools and colleges. 

Falling pupil numbers in English schools mean that a £2bn cut in day-to-day school spending would be delivered by freezing spending per pupil in real terms between 2025-26 and 2028-29. 

The IFS stated that mainstream school funding per pupil increased by 37% between 2019-20 and 2025-26 and that spending on pupils with special educational needs is forecast to rise by over £2bn between 2025-26 and 2027-28, which will make it harder to cut school budgets over the next few years. 

The report also found that rising student numbers in further education and sixth forms mean that maintaining per-student funding would require finding an additional £290m a year. Freezing the 16-19 education budget would result in a 3% decline in funding per student. 

Lastly, the IFS highlighted the need to hire between 8,400 and 12,400 additional teachers by 2028-29. 

Luke Sibieta, research fellow at the IFS and co-author of the report, said: “The upcoming Spending Review will involve some difficult choices on education spending. There is pressure to protect school and college funding. But protecting school and college funding might mean cuts of more than 20% to spending on skills, apprenticeships and higher education support. 

“Avoiding cuts to the education budget altogether would require deeper cuts to other public service spending, tax rises or extra borrowing.”

Josh Hillman, director of education at the Nuffield Foundation, added: “Decisions around the level and distribution of the Education budget made in this Spending Review will shape the opportunities available to children and young people for years to come. The evidence shows that short-term savings decisions risk undermining long-term outcomes – particularly in areas such as further education, skills and adult learning, which are crucial for productivity, labour market resilience and social mobility. 

“If policymakers are serious about closing attainment gaps and building a more capable and inclusive workforce, they must prioritise strategic investment across the education system, not just in schools.”