Unprecedented cuts to education spending over the last decade

The cuts to education spending over the last decade are effectively without precedent in post-war UK history, including a 9% real-terms fall in school spending per pupil and a 14% fall in spending per student in colleges. In contrast to consistent increases in the share of national income spent on health, there have been reductions in the proportion of national income spent on education.

The present government has ambitious goals to level up poorer areas of the country, emphasising a big role for technical education. However, changes to the distribution of education spending have been working in the opposite direction. Recent school funding changes have tended to work against schools serving disadvantaged areas. Cuts to spending have been larger for colleges and adult education, and still won’t be reversed by 2024.

These are the main conclusions of the new 2021 Annual report on education spending in England by researchers at the Institute for Fiscal Studies (IFS), published today, and funded by the Nuffield Foundation as part of a wider programme of work looking at trends and challenges in education spending. All figures are in 2021–22 prices and represent new IFS estimates of spending per pupil across different stages of education in England.

Substantial cuts to education spending over the last decade

  • Large cut to overall public spending on education: Between 2010 and 2019, total public spending on education across the UK fell by £10 billion, or 8%, in real terms. This led to a fall in the share of national income devoted to education spending (down from 5% of national income in 2007 to 4.4% in 2019). If education spending had remained at 5% of national income, it would have been £16 billion higher in 2019. There was a 3% real-terms increase in education spending in 2020, but this mostly reflects the temporary extra levels of support during the pandemic.
  • Stark contrast with rises in health spending: The fall in education spending over the last decade stands in stark contrast to the continual growth in health spending over time. In the early 1990s, health and education spending both represented about 4.5% of national income. Education spending remains close to this level, whilst health spending increased to over 7% of national income just before the pandemic. This partly reflects the costs of an ageing society, but also policy and spending choices by successive governments that have tended to favour health spending.
  • Lost decade-and-a-half in growth in school spending per pupil: Following on from a big boost in the 2000s, total school spending per pupil fell by 9% in real terms between 2009 and 2019. Last month’s Spending Review included an extra £4.4 billion for the schools budget in 2024 as compared with previous plans. When combined with existing plans, we project that spending per pupil in 2024 will be at about the same level as in 2010. Whilst this reverses past cuts, it will also mean 15 years with no overall growth in spending. This squeeze on school resources is effectively without precedent in post-war UK history.

Changes will make it harder to level up poorer areas of the country

  • Deprived schools have seen larger cuts over the last decade: The most deprived fifth of secondary schools saw a 14% real-terms fall in spending per pupil between 2009 and 2019, compared with a 9% drop for the least deprived schools. The National Funding Formula has continued this pattern by providing bigger real-terms increases for the least deprived schools (8–9%) than for the most deprived ones (5%) between 2017 and 2022. The Pupil Premium has also failed to keep pace with inflation since 2015. These patterns run counter to the government’s goal of levelling up poorer areas.
  • Additional funding for 16–18 education will only partially reverse past cuts: Funding per student aged 16–18 in further education and sixth-form colleges fell by 14% in real terms between 2010 and 2019, while funding per student in school sixth forms fell by 28%. Recent increases in funding have also been eroded by fast growth in student numbers, which are set for further growth of 10% between 2021 and 2024. Even with additional funding from the recent Spending Review, college spending per pupil in 2024 will still be around 10% below 2010 levels, while school sixth-form spending per pupil will be 23% below 2010 levels.
  • Partial reversal of cuts to adult education: As a result of additional funding in the Spending Review, funding for adult education and apprenticeships will rise by 30% in real terms between 2019 and 2024. However, combined spending on adult education and apprenticeships will still be 15% below 2009 levels. Spending on adult education on its own fell by 49% between 2009 and 2019, and will still be one-third below 2009 levels even with the additional funding.

Other key findings include:

  • Early years funding treading water: Before the pandemic, spending per hour on the early years entitlement tended to follow a ratchet pattern: meaningful boosts in 2012 and 2017 were followed by years of cash-terms freezes, eroding spending power in real terms. An extra £160 million next year from the 2021 Spending Review will see core funding rates for 3- and 4-year-olds rise by 17p in cash terms. Given high levels of inflation, a rising minimum wage and new taxes like the health and social care levy, this relatively small increase will almost certainly not be enough to compensate for rising costs. Having been frozen in cash terms since its introduction, the Early Years Pupil Premium for disadvantaged children will finally be increased next year. But, as always, the devil will be in the details: if the cash-terms level of the EYPP is then frozen at £342 a year, the uplift might only be worth £20 by the end of the Spending Review horizon in 2024-25.
  • Pressures on higher education spending: Following the increase in tuition fees to £9,000 in 2012, fees have mostly been held constant in cash terms, eroding their real value over time. As a result, up-front higher education spending per undergraduate student in 2020 was about 9% lower in real terms than in 2012. As with further education, a major challenge for the higher education sector is the expected growth in student numbers, which are expected to rise by 13% between 2019 and 2025.
  • Uncertainty about future reforms to higher education: There was no mention of higher education funding in the Spending Review, though a number of potential changes have been rumoured, such as reductions in fees to £8,500 and in the threshold at which graduates begin to repay their loans to £22,000. A lower tuition fee cap at £8,500 would only benefit the highest earners, but would offer opportunities to rebalance teaching grants towards higher-cost subjects. A lower repayment threshold of £22,000 would essentially be a tax rise for the nearly 80% of graduates expected not to clear their loans, raising around £2 billion a year. Graduates with middling earnings would need to pay around £500 more towards their loans per year.

Luke Sibieta, IFS Research Fellow and an author of the report, said: “The cuts to education spending over the past decade are effectively without precedent in post-war history. Extra funding in the Spending Review will reverse cuts to school spending per pupil, but will mean 15 years without any overall growth, and college spending per student will still be lower than in 2024. Recent funding changes have also worked against schools serving disadvantaged communities. This will make it that much harder to achieve ambitious goals to level up poorer areas of the country and narrow educational inequalities, which were gaping even before the pandemic. Fast growth in student numbers in colleges and universities will add to the challenges facing the education sector.”

Josh Hillman, Director of Education at the Nuffield Foundation, said: “The IFS report provides an invaluable analysis of trends in education spending over the last decade. Of particular concern is the erosion of spending focused on disadvantaged pupils, partly as a result of the Pupil Premium not keeping pace with inflation for the last six years and partly due to its impact being undermined through policies that target funding on areas of the country with fewer disadvantaged children. Similarly, recent increases in funding for further education do not compensate for the real-terms decline in spending in recent years, let alone take account of increased student numbers and the government’s strategic ambitions for the sector, such as improving the take-up and quality of technical and vocational education and qualifications.”

Related project


Explore our projects

New

Education | 2025 - 2026

Investigating performance across Key Stage 2 maths topics

View project
Teacher with secondary pupils
New

Education | 2024 - 2028

Teaching improvement through data and evaluation (TIDE)

View project
New

Welfare | 2024 - 2027

Gypsy, Roma, Traveller Youth: mitigating exclusions using the digital?

View project
New

Education | 2024 - 2026

Long-term outcomes of high-achieving disadvantaged children

View project
New

Education | 2024 - 2026

Exploring academic selection and grammar schools in Northern Ireland

View project
New

Education | 2024 - 2026

Pupil school mobility: types, pathways and implications for education

View project
Young girl using an iPad at home
New

Education | 2024 - 2024

Early years digital media literacy review

View project
New

Education | 2024 - 2026

Can digital parenting interventions benefit early language development?

View project
Little girls in primary school uniform

Education | 2024 - 2026

Developing a classroom intervention to improve conversation skills

View project
New

Education | 2024 - 2026

Vocabulary for Reading: the power of words

View project
New

Education | 2024 - 2026

A feasibility and pilot trial of the Early Years Library

View project
Secondary school music teacher smiles at students working together at a keyboard.
New

Education | 2024 - 2025

Teacher recruitment & retention challenges in England

View project
Young girl using an iPad at home
New

Education | 2024 - 2024

Early years digital media literacy review

View project
New

Education | 2024 - 2026

Pupil school mobility: types, pathways and implications for education

View project
Teacher with secondary pupils
New

Education | 2024 - 2028

Teaching improvement through data and evaluation (TIDE)

View project
Secondary school music teacher smiles at students working together at a keyboard.
New

Education | 2024 - 2025

Teacher recruitment & retention challenges in England

View project
New

Welfare | 2024 - 2027

Gypsy, Roma, Traveller Youth: mitigating exclusions using the digital?

View project
New

Education | 2024 - 2026

A feasibility and pilot trial of the Early Years Library

View project
New

Education | 2024 - 2026

Can digital parenting interventions benefit early language development?

View project
New

Education | 2025 - 2026

Investigating performance across Key Stage 2 maths topics

View project
New

Education | 2024 - 2026

Vocabulary for Reading: the power of words

View project
New

Education | 2024 - 2026

Spending across different stages of education

View project
New

Education | 2024 - 2026

Exploring academic selection and grammar schools in Northern Ireland

View project
New

Education | 2024 - 2026

Long-term outcomes of high-achieving disadvantaged children

View project
In progress

Education | 2023 - 2024

Artificial intelligence and education

View project
Two little boys and a little girl, all wearing primary school uniform, work together to solve a puzzle in their classroom.
In progress

Education | 2023 - 2025

What has ‘Free School Meals’ measured and what are the implications?

View project
Father and daughter having fun at home
In progress

Education | 2023 - 2024

Optimisation and feasibility of Triple P parenting programme for remote delivery

View project
Early years professionals playing with children
In progress

Education | 2022 - 2024

Understanding the take-up of early education entitlements

View project
Primary school children using a microscope during a lesson outside at school
In progress

Education | 2023 - 2025

Purposeful and effective practical work in primary school science

View project
Male and female apprentices looking at car engine
In progress

Education | 2022 - 2025

Work or study? Gender and the transition from school to work

View project
Two teenage male pupils study a science lesson as part of their post-16 options
In progress

Education | 2019 - 2024

Post-16 pathways: the role of peers, family background and expectations

View project
Teacher helping primary school girl with schoolwork in the classroom
In progress

Education | 2023 - 2024

The impact of additional learning needs identification in Wales

View project
Teenage sixth form students taking notes in a lesson
In progress

Education | 2022 - 2024

Comparing inequality and outcomes across post-16 education in the UK

View project
Teenage sixth form students walking into college
In progress

Education | 2022 - 2025

The long-term impact of the Education Maintenance Allowance

View project
Little girl watches TV on her own at home
In progress

Education | 2023 - 2025

Do same language subtitles help children learn to read?

View project
14 year old girl doing homework
In progress

Education | 2022 - 2024

Experiences of 14 to 16 year olds in Further Education in England

View project
Young girl using an iPad at home
New

Education | 2024 - 2024

Early years digital media literacy review

View project
Secondary school music teacher smiles at students working together at a keyboard.
New

Education | 2024 - 2025

Teacher recruitment & retention challenges in England

View project
New

Welfare | 2024 - 2027

Gypsy, Roma, Traveller Youth: mitigating exclusions using the digital?

View project
New

Education | 2024 - 2026

A feasibility and pilot trial of the Early Years Library

View project
New

Education | 2024 - 2026

Can digital parenting interventions benefit early language development?

View project
New

Education | 2025 - 2026

Investigating performance across Key Stage 2 maths topics

View project
New

Education | 2024 - 2026

Vocabulary for Reading: the power of words

View project
New

Education | 2024 - 2026

Spending across different stages of education

View project
New

Education | 2024 - 2026

Exploring academic selection and grammar schools in Northern Ireland

View project
New

Education | 2024 - 2026

Long-term outcomes of high-achieving disadvantaged children

View project
Teenager hugging their mother
New

Welfare | 2023 - 2025

Juvenile onset rheumatic diseases: education, vocational readiness, & employment

View project
School children with their bicycles in the school yard. Happy as a girl and boy walk pushing them side by side.
New

Education | Welfare | 2022 - 2024

Modifying school choice for more equitable outcomes in England

View project
Reception class children using a parachute in a PE lesson
Reported

Education | 2022 - 2023

A movement and story-telling intervention for reception children

View project
Side view of two female high school students in classroom working on laptops social distancing. Student in foreground is in focus and student in background is blurred
Reported

Education | 2021 - 2022

COVID-19 and disadvantage gaps in England 2020 and 2021

View project
Young boy draws and plays with a globe as part of nursery education
Reported

Education | 2020 - 2022

COVID-19 and childcare: local impacts across England

View project
Reported

Education | 2020 - 2022

Ethical principles underpinning co-production with young people

View project
Reported

Education | 2020 - 2021

COVID-19 mitigation measures: education provision and access to special schools

View project
Young-boy-uses-tablet-with-mother-for-maths-learning-Can-maths-apps-add-value-to-learning-PROJ
Reported

Education | 2020 - 2022

Can maths apps add value to learning?

View project
Male secondary school student working at home on laptop
Reported

Education | 2020 - 2021

The impact of COVID-19 on mainstream schools in England

View project
Teenage-girl-looks-at-smartphone-next-to-laptop-Growing-up-under-COVID-19-PROJ
Reported

Education | Welfare | 2020 - 2022

Growing up under COVID-19

View project
Top view of librarian sitting with five multiethnic children on floor. Teacher reading book to cute girls and young boys at school.
Reported

Education | 2020 - 2022

Comparisons of cognitive skills and educational attainment across the UK

View project
Teenage-pupil-wearing-woolly-hat-writes-on-whiteboard-The-influence-of-headteachers-on-their-schools-PROJ
Reported

Education | 2020 - 2024

The influence of headteachers on their schools

View project
Young-child-blurred-in-background-plays-with-abacus-in-foreground-Early-years-employment-pathways-PROJ
Reported

Education | 2019 - 2020

A systematic review of early years degrees and employment pathways

View project
A middle-aged teacher sits at her desk and helps a female student with a problem in her textbook.
Reported

Education | Welfare | 2020 - 2020

Measuring the disadvantage attainment gap in 16-19 education

View project
Search projects

We improve people’s lives by funding research that informs social policy, primarily in Education, Welfare and Justice. We also fund student programmes that give young people skills and confidence in science and research.

We offer our grant-holders the freedom to frame questions and enable new thinking. Our research must stand up to rigorous academic scrutiny, but we understand that to be successful in effecting change, it also needs to be relevant to people’s experience.

Profile