From education to employment

30% of COVID-related spending on education in England due to come from existing budgets

Dr Luke Sibieta, Research Fellow and author, IFS
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The government has committed to spend about £4.3 billion on education in England in response to the pandemic over the two years 2020–21 and 2021–22.

However, about £1.3 billion or 30% of this supposedly additional money is currently due to be funded from underspending or from existing budgets, so the net increase in government spending is likely to be about £3.0 billion.

This extra funding covers higher education, further education and early years as well as schools. It represents an increase of just 2% on total education spending over the two years.

This is one of the main conclusions of a new IFS briefing note, ‘COVID-related spending on education in England’, by Christine Farquharson, Luke Sibieta and Ben Waltmann, describing the range and level of COVID-related spending on education in England, funded by the Nuffield Foundation.

Total COVID-related spending on education in England across 2020–21 and 2021–22 is currently due to be about £4.3 billion.

This includes:

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  • £1.7 billion on catch-up for schools and colleges – including £650 million for a catch-up premium and £550 million in total for tutoring;
  • £1.5 billion on supporting schools during the pandemic – including £520 million for the free school meals national voucher scheme and over £410 million for digital devices;
  • £280 million on the early years and families – including £220 million for the holiday activities and food programme for disadvantaged children during school holidays;
  • £450 million on further education and skills – including £190 million for traineeships for young people aged 16–24 and £140 million for financial incentives to hire new apprentices;
  • £370 million on higher education – including £70 million for a hardship fund.

This covers additional spending by the Department for Education (DfE) on day-to-day and capital investment. However, the DfE is currently due to receive only about £3.0 billion in additional funding from HM Treasury to pay for this extra spending. This means that about £1.3 billion or 30% is currently due to be funded from underspends or from existing budgets. It is not possible to match these up exactly with extra spending. The apprenticeship budget is one area where an underspend is highly likely due to falling numbers, though this could only fund the additional incentives to hire new apprentices.

Dr Luke Sibieta, Research Fellow and an author of the briefing note, said:

‘The government has spent £4.3 billion on supporting the education sector in England during the pandemic. However, about £1.3 billion has come from existing budgets.
‘Spending on catch-up is currently about £1.7 billion. With pupils having missed over half a year of normal schooling and already 2–3 months behind in their educational progress by last autumn, this is likely to be insufficient to meet the scale of the challenge. Meeting the Prime Minister’s pledge to ensure “no child will be left behind” as a result of the pandemic is likely to require spending in the tens of billions.
‘The government is widely expected to publish a long-run plan for education recovery in the coming weeks. This seems likely to place extra responsibilities and expectations on schools and other providers. It will therefore be crucial to understand how much extra funding is attached, as well as the underlying state of school and college finances. As we move back to normal, it will be harder to fund new funding commitments from existing budgets.’

Josh Hillman, Director of Education at the Nuffield Foundation, said:

‘The government has directed considerable amounts of contingency funding towards tackling the short-term effects of COVID on education, particularly for children and young people from disadvantaged backgrounds. However, as this research shows, tackling both the short- and longer-term effects of the pandemic on all stages of education will require considerable additional funding.
‘To address learning loss and prevent the disadvantage gap widening further, the government’s forthcoming long-term plan for education recovery, led by Sir Kevan Collins, must be ambitious, with generous funding commitments for both immediate and post-pandemic education spending.’

Dr Mary Bousted, Joint General Secretary of the National Education Union, said: 

“This report from the IFS exposes another example of the gap between Government rhetoric about investing in education recovery and the reality. Creative accounting will not fool parents, teachers and the community. The Government have allocated just £250 per pupil which compares poorly with other nations like the United States and the Netherlands, which are investing £1600 and £2500 per pupil respectively.” 

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