The English schools budget will be cut by an estimated 10% in real terms over the course of the next parliament if the Conservatives win the next election, after David Cameron conceded money for education would not be inflation-proofed.
Schools would have to pay 5% more to fund rising teachers’ pension and national insurance contributions, while economists said the prime minister’s admission would mean a further cut in real terms.
The scale of the potential cuts became clear after Cameron promised that funding per pupil would not be reduced before 2020, but was forced to concede that the money was not linked to inflation and therefore meant a reduction in real terms. Over the past five years the education budget has been protected from cuts, rising in line with prices.
Speaking at Kingsmead school in Enfield on Monday, Cameron described the funding measure as “flat cash per pupil”. He said: “We have demonstrated in the past five years that we can protect the schools budget while reducing the deficit – and we will do so again. So I can tell you with a Conservative government, the amount of money following your child into school will not be cut.”
He added that as the number of pupils in schools went up, the amount of money going into schools would increase too.
However, the Institute for Fiscal Studies, an economic thinktank, said the real value of funding would be eroded in the next parliament, which would amount to an estimated 7% fall in real terms. Employers’ pension contributions have increased by 2%, according to the thinktank. Employers’ national insurance contributions are also going up because of the introduction of the single-tier pension, which will cost schools an extra 3%.
Economists said it was not possible to add together all the effective cutbacks, but over the lifetime of the next parliament, they would amount overall to a 10% real-terms cut to the schools budget for England.
Luke Sibieta, the thinktank’s education programme director, said: “The schools budget was ringfenced in the 2010 spending review and the 2013 spending round. The net result is that spending per pupil will have risen 1% in real terms over this parliament.
“What David Cameron has proposed is a flat cash per pupil settlement for the next parliament which in terms of resources per pupil would be quite a big difference compared with the previous parliament. The real value of spending will be eroded over the next parliament.”
Paul Johnson, the thinktank’s director, said the decision represented quite a watering down of the coalition’s commitments in the 2010-15 parliament.
The shadow education minister, Tristram Hunt, said Conservative claims to be protecting schools budgets were unravelling.
“David Cameron has been forced to admit that his plans will see a real-terms cut to spending on schools,” Hunt said. “The truth is that you can’t protect schools when you have plans to take spending as a share of GDP back to levels not seen since the 1930s.”
The announcement comes as the prime minister sets out plans to sack headteachers at coasting schools in what he terms an “all-out war on mediocrity”.
The Liberal Democrats said that the Conservative party’s spending plans would also lead to cuts on unprotected areas of the education budget – such as funding for nurseries and colleges – of £3.1bn a year by 2020.
The party also said that David Cameron’s announcement also raises questions over the future of the £2.5bn pupil premium, which is money targeted at the most disadvantaged students to close the attainment gap. A Conservative party spokesman said on Monday that the party had no plans to scrap the scheme.
Cameron’s promises to protect the NHS and education – even if the budget for the latter was still a cut in real terms – will nevertheless put pressure on unprotected areas of government spending, such as local government and the police, which will be expected to bear the burden of Whitehall cuts.
Cameron said that although funding per pupil would not go up by inflation, schools had demonstrated that they could “be more efficient, more effective and they can make their budgets work”.
“They can particularly make their budgets work because many now have greater freedoms and abilities to run the schools the way they see fit.”
He added: “I think this is a realistic, sensible and practical way to make sure we go on delivering great education for young people but without putting too much pressure on the budget.”
Cameron said a Tory government would take action on illiteracy and innumeracy by “putting the best teachers at the helm of the primary schools that fall short” and ensuring that all 11-year-olds take rigorous tests in maths, reading, spelling, punctuation and grammar.
He also set out plans to force all schools deemed by regulator Ofsted to require improvement to demonstrate how they will improve or face takeover by experts with a track record of turning round failing schools.
Cameron promised: “We will turn every failing and coasting secondary school into an academy, and deliver free schools for communities and parents who want them.”
He added: “As parents we’re hard-wired to want the best for our kids. No one wants their child to go to a failing school, and no one wants them to go to a coasting school either. Giving our children just enough is, frankly, not good enough.
“So this is what we’re doing. We are waging war on mediocrity. We are saying no more sink schools and no more bog-standard schools either.”
Before Cameron’s speech, the education secretary, Nicky Morgan, had given the impression that she had secured a commitment that the schools budget would be protected in real terms, but it appears the consequences for the Home Office and the Ministry of Defence made this impossible.
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