New analysis by Education Policy Institute (EPI) reveals the ‘significant impact’ that projected falls in pupil numbers could have on school funding across England, showing the challenges that these demographic changes will present to the financial health of schools.

The new report is the first to use the think tank’s new school funding model, which replicates the Department for Education’s own national funding formula (NFF) and allows us to analyse the impact of potential funding policy decisions on individual schools and areas of the country.  

Key findings include: total pupil numbers in state-funded primary and secondary schools are projected to fall from a peak of 7.57 million in 2022-23, and then decrease at an average rate of 1.0 per cent each year until they reach 7.14 million in 2028-29.

The EPI says this means that even under a scenario where per pupil funding is increased by 0.5 per cent per year, overall funding would still fall by £1 billion by 2029-2030. Total funding would peak in 2024-25 at £42.7 billion, but would then decrease by a yearly average of 0.5 per cent until 2029-30, where it would fall to £41.6 billion – 2.6 per cent lower than its peak in 2024-25.

In addition:-

• Primary funding will be overtaken by secondary funding in 2026-27. In 2023-24, total funding for primary schools was 5.9 per cent higher than total funding for secondary schools. Primary funding will decrease until it is overtaken by secondary funding in 2026-27, when both funding totals begin a downward trend. By 2029-30, secondary funding will be 1.2 per cent higher than primary funding. 
• All regions will experience a decrease in primary school funding between 2023-24 and 2029-30, with the North East projected the largest decrease of 9.0 per cent. The East of England is projected the smallest decrease with just a 1.2 per cent drop in funding. 
• In secondary schools, all regions with the exceptions of Yorkshire and the Humber, the North East, and London are projected to experience an increase in funding between 2023-24 and 2029-30. The East of England is projected the largest increase at 4.9 per cent. 
• For local authorities, Lambeth is projected the largest decrease in funding with 21.2 per cent at primary and 15.7 per cent at secondary. The largest increase in funding between 2023-24 and 2029-30 is projected to occur in Central Bedfordshire with a rise of 13.1 per cent at primary and 17.8 per cent at secondary.  
• If changes in pupil numbers in parliamentary constituencies are consistent with those in their constituent local authorities, the largest drop in funding is projected in Streatham, decreasing by 21.3 per cent at primary and 15.8 per cent at secondary. South West Bedfordshire is projected the largest increase, 13.4 per cent at primary and 17.8 per cent at secondary. 
• If decreases in funding due to falling pupil numbers were ‘reinvested’ and funding was maintained at peak levels of 2024-25, funding could be increased by a further £148 for primary pupils, and £164 for secondary pupils by 2030. 

In future work, the EPI says it plans to investigate how funding could be weighted more heavily towards schools with greater numbers of disadvantaged pupils, to help tackle the widening attainments gaps that these pupils face.