Schools need to find savings of £3bn by 2020, NAO warns

Schools across England will need to find savings of £3 billion by 2019/2020 to counteract cumulative cost pressures, according to the National Audit Office (NAO).

In the 2015 Spending Review, the government increased the schools budget by 7.7 per cent from £39.6 billion in 2015-16 to £42.6 billion in 2019-20. However, the NAO argues that, while this protects the total budget from forecast inflation, it doesn’t account for the estimated rise in pupil numbers, meaning that schools will need to find considerable savings.

Analysis from the NAO found that mainstream schools are facing eight per cent real-terms cuts per pupil over the next four years, with the watchdog criticising the DfE for not clearly communicating to schools the scale and pace of the savings required.

Amyas Morse, head of the National Audit Office, said: “Mainstream schools have to make £3 billion in efficiency savings by 2019-20 against a background of growing pupil numbers and a real-terms reduction in funding per pupil. The Department is looking to schools to finance high standards by making savings and operating more efficiently but has not yet completed its work to help schools secure crucial procurement and workforce savings.

“Based on our experience in other parts of government, this approach involves significant risks that need to be actively managed. Schools could make the ‘desirable’ efficiencies that the Department judges feasible or could make spending choices that put educational outcomes at risk. The Department, therefore, needs effective oversight arrangements that give early warning of problems, and it needs to be ready to intervene quickly where problems do arise.”