UK Budget 2024 education analysis by ETIH: funding boosts, FE investment, and private school financial impact

The UK Autumn Budget 2024 introduced significant funding allocations for the Department for Education (DfE), with Chancellor Rachel Reeves announcing an additional £6.7 billion.

This move represents a 19% real terms increase for the DfE, aimed at addressing infrastructure, maintenance, and targeted support within the education system.

Increase in infrastructure and maintenance funding

Included in the budget is £1.4 billion dedicated to the rebuilding of 500 schools "in the greatest need," as stated by Reeves, along with a £2.1 billion increase for school maintenance—up £300 million from the previous year. These investments are intended to address the growing backlog of necessary repairs and infrastructure updates in state-funded schools across the country.

Following the budget announcement, Let’s Go Zero, a national campaign aiming for zero-carbon schools, expressed cautious optimism. The campaign welcomed the government’s £6.7 billion investment and the £1.4 billion commitment to school rebuilding, yet noted that further action is necessary to support energy-efficient upgrades in schools.

Alex Green, Head of Let’s Go Zero at climate solutions charity Ashden, highlighted the need for enhanced efforts in retrofitting schools to meet zero-carbon standards.

“There needs to be further investment and hands-on support for schools to retrofit—making schools more energy efficient, save money, and improve learning environments,” Green stated. They pointed out that while the budget marks a step forward, a more ambitious approach is required to help schools become climate leaders and better prepared for future environmental impacts.

“UK schools are eager to take on the climate crisis: more than 4,000 have joined our Let’s Go Zero campaign, showing their desire to become zero carbon by 2030. Those schools, and our many campaign partners, will want Government to show more ambition – now and in the years ahead.”

In addition, funding for breakfast clubs will see a substantial increase as part of a government initiative to support student well-being and readiness for learning. According to the Chancellor, these commitments reflect a focused approach to improving educational environments and resources nationwide.

Support for Further Education and SEND

The budget also addresses longstanding funding gaps in further education (FE) and special educational needs and disabilities (SEND) sectors. An additional £300 million has been allocated to further education, which has seen significant cuts in recent years, with a 10% reduction in funding for colleges and a 23% decrease for sixth forms between 2010 and 2024.

This funding shortage has limited the breadth of educational offerings for post-16 students, placing pressure on FE institutions to make difficult budgetary choices. Reeves’ latest announcement may provide some relief to the sector, although the impact will depend on how the funds are implemented.

SEND provisions will benefit from an additional £1 billion, which is intended to enhance support services and move the SEND system toward financial stability. This investment is part of an overarching objective to improve outcomes for students with special educational needs and disabilities while addressing existing operational and resource gaps.

James Kuht, CEO and founder of Inversity, a UK-based skills startup, welcomed the Chancellor's commitment, particularly in relation to the skills gap. “These substantial investments reflect a crucial step toward addressing key skills gaps in our workforce, especially when it comes to new technologies like AI,” Kuht said.

He emphasised the importance of recruiting specialist teachers to ensure both students and educators are equipped to engage with emerging technologies effectively. “Going forward, it is essential that government, education, and industry collaborate to ensure these investments are targeted and translate into tangible outcomes that benefit students nationwide.”

Budget impact on private education

For private schools, the budget introduces financial challenges as new taxes and costs take effect. Independent schools will face the planned introduction of VAT on fees, removal of business rate relief, and an increased National Insurance rate for employers. 

According to Martin Willis, Partner at Barnett Waddingham, these changes will impose a financial strain on private institutions: 

"They say bad news comes in threes, and after significant cost increases due to the Teachers Pension Scheme, we now know that independent schools will not only have to absorb the planned introduction of VAT on fees and loss of business rate relief, but also the increased National Insurance rate for employers," Willis commented. 

He added that the “lowering of the secondary threshold means that as well as an additional 1.2%, these schools will have to pay 15% on £4,100 of earnings for the vast majority of their staff,” a shift that could significantly impact independent schools’ operational budgets.

Future Implications

The DfE’s resource spending is set to increase by £11.2 billion from 2023-24 levels by 2025-26, marking a 3.5% real terms increase. These funding commitments underscore the government’s stated priority to fortify the education sector. 

However, the effectiveness of these budget allocations will depend on precise implementation strategies and the government’s ability to ensure that funds reach areas with the most urgent needs.