The Institute for Fiscal Studies report on Trends in education and schools spending (pdf) cuts through the coalition's dissembling about what is being spent in education. Its findings - that most schools will experience real terms spending cuts from 2011-12 - will come as no surprise to headteachers and governors, but gives the lie to the idea that education expenditure has been 'protected' under the coalition.
Of course, after real terms growth of 5.1% a year from 1999-2009, it would be unsurprising were education spending to be frozen at a time of economic austerity. But the IFS says that it will be cut by 3.5% per year between 2011-2014, the largest cut in education spending since the 1950s. Indeed education as a share of national income will fall to 4.6% by 2014-15, its level in 1999. Of course, the coalition has been careful (most of the time) to distinguish between education and schools spending. And the IFS concedes that schools spending will only fall by 1.2% in total whereas government spending on higher education will fall by 40% as fees replace HEFCE funding, and spending on early years and youth services will fall by 20%, even though early years education has the greatest impact on a child's development. The decision to scrap EMA and reduce sixth form spending to that of colleges means that 16-19 funding - particularly in schools - will fall by 20% in real terms. Education is clearly no longer regarded as an investment in the future, and its contribution to economic growth is being actively discounted.
But it is worth reflecting further on the impact on schools spending, because it is here that that coalition has been unequivocal in its commitment to maintain expenditure. There is a cash freeze on per pupil spending, which, with inflation at 5%, equates to a cut of 5% in real terms, although this is somewhat mitigated by a freeze in teachers' pay. But the commitment to 'maintain' schools spending is only achieved through the pupil premium, which is being funded by the raid on early years (including Sure Start), 16-19 and youth services. It is clearly not being funded from outside the education budget, as the coalition claimed would happen. The pupil premium is universally regards as a good thing but the IFS drily reflects that "this will add somewhat to the already considerable additional money provided for the poorest pupils by the current school funding system." Having dropped plans for a proper National Funding Formula, the pupil premium could simply add an extra layer of funding for the very poorest schools, but will leave significant regional and local funding disparities untouched.
So, the one area of growth is the pupil premium. And it is here that the coalition is on shakiest ground. Although the premium is presented as a great Liberal Democrat advance, it was actually in the Conservative manifesto too, but what both parties lacked was a clear idea of how the premium would advance the goal of improved attainment for the poorest pupils. Some changes have been made to admissions rules to allow schools to recruit more pupils entitled to free school meals, and to show in the league tables how effective they are at narrowing attainment disparaties. But the premium suffers from a potentially fatal flaw: there are no plans to reward success or penalise failure. In other words, there is no real incentive or leverage behind it.
This makes the IFS analysis all the more important in this aspect of coalition policy. They point out that extra funding in the current system attached to deprived pupils amounts to £2000 in primary schools and £3000 in secondary schools, funding almost double that attached to non-deprived pupils, on average. Without leverage or incentives linked to the premium, it is unclear how a premium currently worth £488 per pupil, rising to £1600 by 2014-15 will provide the right incentives. The absence of a national funding formula means that it will be some time before the existing deprivation funding is consolidated within the pupil premium, thereby allowing a more substantial identified sum for each child. Even then, the first year of the premium, where take-up was less than expected, has shown the flaws in using the FSM measure, which has a considerable stigma attached to it in some communities. If the pupil premium is to achieve what is intended for it, ministers should allow it partially to reflect success in narrowing attainment gaps, and they should look at an alternative measure for its distribution.
But what it will mean, according to the IFS analysis, is that around three-quarters of primary schools and 90% of secondary schools will see real terms cuts over the next four years, though with lower salary inflation, the figure falls to 55% of primaries and 70% of secondaries assuming the same inputs. Only those with substantial numbers of poorer pupils - especially primary schools - will see any increase. In other words, the pupil premium is partly funded by cuts in the majority of schools. This could certainly be presented as redistributive. But inputs are not enough: if the premium is to succeed, it must clearly show substantial improvements among the pupils to whom it is attached. After all, there are a lot of losers helping to fund those inputs. And the least they can ask for is that their sacrifice produces results.