School funding increases in England targeted at most deprived and led to particularly large increases in non-teaching staff

School funding per pupil in England has increased substantially since the millennium. More dramatic than the average increase in funding was the increased focus on deprived schools over the 2000s. This trend started well before the pupil premium was introduced in 2010.

In new IFS research published today, we find that some of these additional resources were spent on hiring additional teachers. But a much larger amount went on higher numbers of teaching assistants, other non-teaching and non-staff expenditures.

Some of these changes were intended by policymakers at the time, but it is not clear they ever intended the scale of the change we see in terms of the numbers of teaching assistants or other non-teaching staff. Instead, we argue that the scale of the changes we observe is more likely to reflect rigidities when making staffing decisions, the flexibility of contracts and the timing of funding allocations. This work was funded as part of a grant from the Nuffield Foundation. 

Between 1999–00 and 2009–10, current or day-to-day spending per pupil in England increased by 5% per year, on average, in real-terms. It has continued to grow in real-terms since 2010 as the coalition has chosen to increase the current schools budget slightly in real terms, despite the deep cuts to spending on many other areas of public services (though it has chosen to make substantial real-term cuts to schools capital spending.   

Perhaps even more noteworthy is the fact that school funding in England has become much more targeted on the most deprived schools over time, as is demonstrated in the table below (here and throughout we only focus on funding for day-to-day or resource spending). At the end of the 1990s, average funding per pupil amongst the most deprived fifth of primary schools was around 17% higher than that in the least deprived fifth of primary schools. At 15% the difference between most and least deprived secondary schools was similar (based on dividing schools into quintiles in terms of the proportion of children eligible for free school meals). Between 1999–00 and 2012–13, funding per pupil rose much more strongly amongst the most deprived primary and secondary schools. As a result, funding per pupil in the most deprived primary and secondary schools was nearly 40% greater than in the least deprived ones in 2012–13, a substantial increase in the level of funds targeted at school deprivation. This increase in funding targeted at deprivation occurred both during the 2000s and after 2010 when the pupil premium was introduced. The pupil premium therefore represents a continuation of this long-run trend. 

School funding per pupil 1999–00 and 2012–13 by quintile of school deprivation (2012–13 prices)

Notes: School deprivation defined in terms of proportion of pupils eligible and registered for Free School Meals.

How has this additional money been spent? We find that a higher number of teachers per pupil and a higher real-terms cost of teachers (i.e. teachers’ salaries plus other employer costs) account for about 20-30% of the additional funding. These increases have not differed by school deprivation, except that the most deprived secondary schools have been slightly more inclined to spend the extra resource on additional teachers. A much larger proportion of the increase in funding per pupil across quintiles of social deprivation can be explained by increasing quantities of teaching-assistants and other staff per pupil (explaining about 40-44% of the increase in funding per pupil across primary schools and 31-38% across secondary schools). These factors also translated into larger amounts of increased spending for the most deprived schools. In addition to this, a substantial proportion of the increase in funding per pupil seems to have been reflected in higher expenditures on non-staffing inputs (such as Information and Communication Technology, energy, professional services and learning resources). Furthermore, some of the increasing difference in funding per pupil between the most and least deprived schools is not actually being reflected in differences in expenditure per pupil. In 2012–13, the most deprived secondary schools ran a surplus of about £260 per pupil compared with about £90 per pupil for the least deprived secondary schools (the differences for primary schools are much smaller).

What drove these changes and what lessons do they provide for the way schools make financial decisions? In the early 2000s, policymakers actively encouraged schools to make more use of non-teaching staff to release teacher time and enrich the experience of pupils. Changes in educational need may also have required increased use of teaching assistants (such as greater numbers of pupils with English as an Additional Language). A government consultation on developing the role of support staff in 2002 states schools were given sufficient funding to employ an extra 50,000 support staff over the course of the parliament. In reality, the number of non-teaching staff grew from 160,000 in 2000 to 270,000 in 2005 and to 360,000 by 2010 (all on a full-time equivalent basis). The number of teachers also grew, but by much less (growing from 400,000 in 2000 to reach 450,000 by 2010) and the ratio of teachers to teaching assistants fell from around 5:1 in 2000 to just over 2:1 by 2010. It is not clear whether policymakers ever intended a shift in the workforce on this scale. Furthermore, the recent international TALIS survey shows that schools in England are relatively unusual in their high reliance on non-teaching staff as compared with other countries.  

These shifts in the workforce are unlikely to have been driven by robust empirical evidence either, as little was available in the early 2000s. Indeed, the evidence that now exists suggests that teaching assistants have had a weak effect on pupil attainment (at best), though this could be due to poor training and deployment. We instead think that the main factors driving the scale of the change are the various rigidities schools face when making financial decisions and uncertainty over future funding allocations that encourages greater use of flexible inputs. Teachers must be employed on relatively inflexible contracts, are difficult to remove if funding was to decline and schools are not easily able to add an extra classroom. Other staff can be employed on relatively flexible and temporary contracts. Uncertainty over future funding allocations might also be driving schools' decisions to run surpluses and build up a precautionary balance. 

These findings are relevant to present policy debates in schools. First, when allocating extra funding to schools, policymakers should consider the rigidities schools face and what these might mean for resource decisions. Second, academies have more flexibility on pay and conditions of teachers than do other schools and all schools in England have been given more freedoms on teacher pay since September 2013. While academies have made limited use of these freedoms to date, where they have been used it will be important to understand whether they have led to different resource decisions being made, as well as how schools are making use of their new pay freedoms. Third, uncertainty on future funding allocations appears to sway resource decisions, both in terms of spending more on flexible inputs and encouraging precautionary savings. The current government has stated that it plans to reform the school funding system to make it simpler and rationalise allocations to schools and local authorities (and has already undertaken some reforms in this direction). However, there is significant uncertainty as to what reforms will be come in over the next few years. Such uncertainty seems likely to be encouraging schools to make greater use of flexible inputs.