2015 Spending Review: what the Chancellor should say on education

24 November 2015

Tomorrow’s Spending Review is a moment to recalibrate spending across the third largest area of public expenditure: education. The Chancellor must be scrupulous in his quest for achieving value for money. However, he must carefully consider where and how to spend money to best increase opportunity for the most disadvantaged.

In June this year, Reform used these principles to write its own Spending Review. We gave the Chancellor three broad recommendations on how he could improve opportunity for all.

Firstly, the Chancellor must review his policy on schools to help them deliver better value for money. The schools budget has seen substantial real terms increases over the last two decades, but our research finds inconclusive evidence on productivity in the sector. Indeed, previous research by Reform finds no clear relationship between spending and pupils’ progress, suggesting there are large efficiency gains to be made. There is international evidence that school autonomy can help deliver more for less, and school groups have the potential to improve professionalism and deliver economies of scale.

Secondly, the Chancellor must make good on his commitment to introduce a national funding formula for schools. The current system of school funding is arbitrary and unfair, and sees schools with similar pupil intakes in similar locations receiving vastly different amounts per pupil. It is likely that the current antiquated system is hiding the schools that are achieving great things with not very much resource – the highly efficient schools.

Lastly, the Chancellor must consider the impact of spending decisions on improving employment opportunities for those furthest away from getting a job. Alongside real terms increases to the schools budget, the budgets for 16 to 19 year olds and for post-19 education have seen very large real terms reductions. With the decision already made to reduce real terms per pupil funding for schools, the Chancellor has an opportunity to focus on the sustainability of sixth form and further education colleges – many of which have already made significant reforms unheard of in the schools sector.

Amy Finch, Researcher, Reform



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