The government have admitted that most schools will not be able to cover the cost of staff pay rises next year, but expect schools to make efficiencies. However, this research lays bare the scale of the problem with the majority of schools needing to make further cuts to balance their budgets. 

Schools’ costs are expected to rise by 3.4% next year, but mainstream funding will increase by just 2.2%. This leaves a gap of £700million that the Government would need to increase school funding by to fully fund staff pay awards. 

This cut in funding will see overall per pupil funding drop to the lowest levels in England in real terms for at least 15 years. Every local authority in the country will see a reduction in real terms per pupil funding, with an average cut of 1.2%. 

The situation is particularly worrying given the current financial position of schools. In December 2024, the government published the accounts of local authority maintained schools for the financial year 2023-24. This showed that 1 in 7 schools are currently in deficit. This is an increase on the year before and the highest rate since at least 2010.

The School Cuts website is run by education unions National Education Union, Association of School and College Leaders and National Association of Head Teachers, and supported by Parentkind and National Governance Association.   

Daniel Kebede, general secretary of the National Education Union, said: “At the last election, people voted in the new Labour Government on a promise of change. It is time for the government to deliver on that promise and that must start with prioritising school funding.  

"Schools and colleges simply do not have the capacity to fund pay increases. Fourteen years of funding cuts have left budgets stripped to the bone, impacting on the education of every child. We cannot see another generation of children and young people failed. Urgent investment in our schools and colleges must be a priority for this Government.”

Jason Elsom, chief executive of Parentkind, said: “As the UK’s largest federated parent’s charity, Parentkind supports over 23,500 Schools, Parent Teacher Associations, and Parent Councils. With a greater reach into schools than any other charity, we know that what happens in the classroom really matters to parents.

“Parents tell us that they are worried about how the historic cuts to school budgets has impacted their children’s education, and this is why we support this campaign with the backing of parents across the country.”

Emma Balchin, NGA chief executive, said: "For many years, governors and trustees have been telling us that balancing the budget is their biggest challenge, with more and more using reserves to keep their school or trust functioning. Over a third of respondents to our annual survey described their organisation as financially unsustainable. We therefore welcomed the education funding announcements in the budget, while cautioning that resolving the financial challenges facing the sector will require consistent investment throughout the parliament. 

“Given this financial context, it is essential that this year's pay rise for teachers is fully funded. If not, it is likely that costs will outstrip funding rises for most schools and trusts, forcing further cutbacks in a system which is already on the brink. Our members are clear that many schools and trusts simply cannot afford further cuts, and it is pupils who will ultimately pay the price."

Pepe Di’Iasio, general secretary of the Association of School and College Leaders, said: “We cannot keep putting schools and colleges in a position where they are left with no choice but to make further cuts to provision. Schools, colleges and their staff are central to the government’s ambition of improving opportunities for young people, but it is difficult to see how this can be achieved if they cannot afford the cost of pay awards without having to make cuts. The government must recognise that improved investment in education is an urgent priority.”

Paul Whiteman, general secretary, National Association of Head Teachers, said: “It is becoming increasingly clear that school funding will not keep pace with growing costs next year. This has been independently verified by the Institute for Fiscal Studies, and this data serves to underscore the scale of the issue. Schools have already had to make repeated cuts after more than a decade of austerity under the previous government and many parents will be well aware of the relentless budget pressures that their children’s schools have faced. School leaders simply can’t make any more cuts without directly harming pupils’ education. While we recognise the incredibly difficult financial inheritance this government is dealing with, children and young people’s education should not suffer as a result.”