England’s schools are spending more than ever before in cash terms, yet pressures on budgets, staff and services remain acute. A new annual report from the Institute for Fiscal Studies (IFS) on education spending in England for 2023 sets out in stark detail how far the system has come as austerity – and how far it still has to go to repair a decade of cuts and confront rising costs.
Drawing on the latest data across early years, schools, further education and universities, the IFS document offers the most comprehensive snapshot to date of where public money is going in education, who is benefiting, and who is being left behind. It charts shifting priorities between age groups, the squeeze on support for disadvantaged pupils, and the growing financial strain on colleges and universities.
At a time when ministers promise to “level up” opportunity and tackle post-pandemic learning loss, the report raises difficult questions: is current funding sufficient to meet those ambitions, and are resources being directed where they are most needed? This article unpacks the key findings, trends and trade‑offs in the IFS’s 2023 assessment of England’s education spending.
Escalating disparities in school funding and their impact on educational outcomes in England
New figures underscore how the funding gap between different types of schools is widening, with consequences that now show up clearly in exam halls and attendance registers. While headline per-pupil spending appears stable in cash terms, once inflation and rising needs are factored in, many mainstream secondary schools are seeing a real-terms squeeze, even as spending on high-needs and special schools continues to rise from a low base. The result is a patchwork of provision in which some pupils benefit from smaller classes, specialist staff and up-to-date resources, while others contend with narrowed subject choice, frozen maintenance budgets and growing reliance on short-term interventions. These trends are no longer abstract lines on a graph; they are visible in:
- Curriculum breadth – arts, languages and technical subjects disappearing from timetables in underfunded areas
- Staffing levels – rising pupil-teacher ratios and increased use of non-specialist teachers
- Support services – reduced access to counsellors, teaching assistants and pastoral teams
- Learning environments – delayed repairs and outdated learning materials
| School group | Avg. real-terms funding change since 2010 | Recent GCSE pass rate (Grade 4+) |
|---|---|---|
| Most deprived quintile | -7% | 58% |
| Middle quintile | -3% | 65% |
| Least deprived quintile | +1% | 73% |
The interplay between geography, deprivation and funding rules means that otherwise similar pupils can experience sharply different schooling trajectories depending on their postcode. Areas that once benefited from targeted programmes have seen those uplifts eroded, while some faster-growing or relatively affluent regions have attracted additional resources and capital investment. Evidence in this report links these divergent patterns to widening attainment gaps by age 16 and uneven post-16 progression, particularly in disadvantaged coastal and former industrial communities.The funding system is, in effect, amplifying existing social inequalities, making it harder for schools serving the poorest pupils to provide the intensive teaching, enrichment and stability that research shows are essential for long-term educational success.
How real term spending cuts are reshaping early years further education and higher education provision
The squeeze on budgets, once masked by rising pupil numbers and short-term grants, is now visibly altering what children, young people and adults encounter in classrooms and lecture halls. Early years providers report thinning staff ratios and shrinking support for children with additional needs, while sixth-form and further education colleges pare back enrichment, specialist courses and pastoral care to keep core provision afloat. Universities, facing flat or falling real-terms income per student, are rebalancing their offer towards larger cohorts, lower contact hours and cross-subsidised courses that can command higher international fees. In each phase, leaders describe a slow redefinition of what is “essential” – and a quiet retreat from wider ambitions around catch-up, inclusion and local community engagement.
These pressures show up in practical choices that shape young people’s pathways and life chances. Institutions are increasingly forced to:
- Narrow curriculum options, especially in high-cost STEM and creative subjects.
- Delay investment in buildings, digital infrastructure and specialist equipment.
- Freeze or cut staff posts,increasing workloads and limiting targeted support.
- Rely on short-term funding pots, making long-term planning and innovation harder.
| Phase | Visible change | Who feels it first? |
|---|---|---|
| Early years | Shorter sessions, fewer specialists | Children with SEND and low-income families |
| Further education | Course closures, reduced guidance | 16-19 learners and adult returners |
| Higher education | Larger cohorts, less contact time | Students on lower-fee or high-cost courses |
Regional inequalities in education budgets and the consequences for levelling up ambitions
Behind the national averages on school funding lies a patchwork of local fortunes. While some urban authorities benefit from historic regeneration money and targeted grants, many towns and coastal communities are wrestling with flat budgets, rising pupil need and escalating staff costs. This uneven landscape is reflected in stark differences in per-pupil funding,investment in support services and access to high-quality teaching.The result is a quiet divergence: pupils in some areas experience smaller classes, richer curricula and stronger pastoral support, while others face narrowed subject choices and fragile specialist provision.
These gaps pose a direct challenge to policy promises aimed at balancing opportunity across the country. Without a more intentional funding strategy, designed to reflect both deprivation and the real cost of delivering services in different areas, ambitions to narrow attainment gaps risk stalling. Key fault lines emerging from the data include:
- Higher needs, lower budgets in many post-industrial and coastal regions.
- Unequal access to enrichment activities, careers guidance and tutoring support.
- Instability in local education ecosystems, as small schools and specialist units struggle to remain viable.
| Region | Average funding per pupil (£) |
Share of pupils in high-need schools |
|---|---|---|
| Inner London | 7,000 | 45% |
| North East towns | 6,200 | 58% |
| Coastal South | 5,900 | 52% |
| Rural Midlands | 5,700 | 37% |
Policy priorities and targeted investment strategies to restore sustainable education funding in 2024 and beyond
Stemming the erosion of education budgets now requires a sharper focus on where each additional pound delivers the greatest long‑term return. Policymakers will need to couple multi‑year funding settlements with clearer rules for needs‑based allocations, ensuring that resources follow deprivation, rising pupil numbers and special educational needs rather than historical baselines. Alongside this, the evidence points towards prioritising early years and primary catch‑up, where interventions remain comparatively low‑cost but highly effective, and protecting school support services that prevent problems escalating into costly exclusions or long‑term disengagement.To guard against cyclical cuts, the report urges embedding automatic stabilisers-such as minimum per‑pupil guarantees linked to inflation and demographic change-within the funding formula.
- Rebuild core per‑pupil funding to at least pre‑austerity real‑terms levels, with explicit inflation indexing.
- Target capital investment at unsafe buildings, digital infrastructure and energy‑efficiency upgrades that reduce future running costs.
- Ring‑fence catch‑up and tutoring budgets for disadvantaged pupils, linked to obvious attainment metrics.
- Strengthen 16-19 funding to close the gap with secondary schools and support technical routes.
- Co‑fund workforce reforms that improve teacher retention in hard‑to‑staff areas and subjects.
| Priority Area | Indicative Focus | Expected Benefit |
|---|---|---|
| Early Years | Targeted places for low‑income families | Higher school readiness |
| Primary & Key Stage 2 | Intensive literacy & numeracy support | Narrowed attainment gaps |
| Secondary | High‑quality tutoring & pastoral care | Reduced disengagement |
| Post‑16 | Boost to FE and apprenticeships | Stronger skills pipeline |
To Wrap It Up
As the government prepares its next round of spending decisions, the findings of this latest IFS report underscore what is at stake. After more than a decade of uneven investment, the education system in England faces a complex mix of recovering lost ground and confronting new pressures, from rising costs to widening inequalities.
Whether ministers opt for consolidation or renewed expansion will help determine not only the resources available in classrooms, colleges and lecture halls, but also the opportunities open to the next generation. The numbers in this report offer a clear, and at times sobering, account of where the money goes and what has happened to it over time. The policy choices that follow will reveal how far the government is willing to go to translate that evidence into long-term investment in education.
