A Brighter Financial Outlook for Schools? What’s Changing from September

As we inch closer to the 2024-25 academic year, there’s a glimmer of good news on the horizon for school budgets. While financial pressures are ever-present, the latest projections suggest that schools may see a slight easing of budget constraints from September onwards. So, what’s changing, and how will it impact your school’s finances? Let’s take a look at the key trends shaping school funding over the next two years.

1. Funding is Increasing, But So Are Costs

From September 2024, core funding for mainstream schools will rise by 7.1%. That’s a significant boost! However, the cost of running a school is set to increase by 7.7%, leaving a national funding gap of around £250 million. While this isn’t ideal, it’s much smaller than many feared, and it means most schools will only face a slight squeeze rather than a major financial crisis.

Looking further ahead, 2025-26 brings more positive news. With core funding projected to grow by 4.3% and costs rising by just 3.6%, schools could see a funding headroom of around £400 million, meaning a little breathing space after years of tight budgets.

2. The Main Cost Pressures to Watch

Staffing remains the biggest expense for schools, and pay increases will continue to drive financial planning:

  • Teachers’ pay is set to rise 10.4% this year, before settling at a more manageable 4.2% in 2025-26 (excluding any additional pay awards).
  • Support staff salaries will go up by 4.7% in 2024-25, then 3.0% the following year.
  • Non-staff costs, including utilities and classroom supplies, will increase by 2.6% this year and 1.5% next year.

Special Educational Needs (SEN) funding is also under pressure, with the growing number of Education, Health, and Care Plans (EHCPs) adding to overall school costs.

3. What This Means for Your School

Short-Term Challenges (2024-25)

Despite the funding boost, schools will need to manage budgets carefully to navigate the small funding shortfall. That means making smart choices on spending and seeking efficiency wherever possible.

Longer-Term Opportunities (2025-26)

The projected funding headroom means a little more flexibility for schools in 2025-26. However, any additional pay increases could quickly erode these gains—every 1% pay rise reduces headroom by £320 million. Schools will need to keep an eye on negotiations over pay settlements.

4. How Schools Can Maximise Budgets

The government is providing various forms of financial and procurement support to help schools make the most of their funding, including:

  • Energy contracts and banking solutions to reduce overheads.
  • Financial Benchmarking & Insights Tool to help schools compare costs and identify savings.
  • School Resource Management Advisers to support more cost-effective spending.
  • Procurement assistance to help schools get the best deals on essential resources.

One of the most effective ways schools can stretch their budgets is by making smart choices in PE and active learning. Investing in a platform like imoves provides exceptional value, helping teachers deliver high-quality PE lessons, even as non-specialists, while also embedding physical activity into core subjects like maths, literacy, and science. Not only does this enhance student learning and engagement, but it also saves thousands of pounds on costly PE coaches, ensuring sustainable, long-term impact.

5. The Big Picture: Stability is on the Horizon

While 2024-25 will require careful budgeting, the worst of the financial pressure seems to be easing. Schools that plan wisely and take advantage of efficiency opportunities may find themselves in a stronger position by 2025-26.

The key takeaway? While budgets won’t suddenly become generous, schools should find that things become a little less tight from September onwards. With a proactive approach to financial planning and cost-effective solutions like imoves to upskill and support teachers, there’s reason to feel optimistic about the road ahead.

For a deeper dive into the numbers, check out the full DfE technical note. And remember, every school is unique—taking the time to assess your own cost structures and potential savings could make all the difference!

You may also be interested in How to Use PESS Funding to Create Active, Engaged, and Happier Schools