Schools face closure as falling birth rate hits funding, think tank warns

Empty classroom
Empty classroom

Schools in England could be forced to close because of the falling birth rate, a report has warned.

A decline in the number of school-age children in the population could see schools lose more than £1 billion in funding by 2030, according to the Education Policy Institute (EPI) think tank.

Researchers found schools may be forced to consider “cost-cutting measures”, including mergers with other schools, and even to close.

The EPI report said: “As pupil numbers fall, many schools will see their budgets contract as a result.

“However, a school’s costs do not behave the same way. Reductions in class sizes do not bring about proportional decreases in staffing costs, school supplies, energy bills, and the other day-to-day costs of running a school.

“Faced with this challenge, some of the most severely affected schools will struggle to stay viable. As these schools feel the squeeze, they will be forced to consider alternatives: mergers with other schools, difficult cost-cutting measures, and ultimately school closures.”

Fall worst in London and North East

Pupil numbers in state-funded schools are projected to fall from a peak of 7.6 million in 2022-23, and then decrease at an average rate of one per cent each year until they reach 7.1 million in 2028-29, according to the report.

Pupil numbers are projected to fall the most in London and the North East of England.

Researchers used data from pupil projections and the think tank’s own school funding model, based on the Department for Education’s national funding formula, to analyse the potential impacts on school funding up to 2030.

Under a scenario where all schools receive a 0.5 per cent real terms increase in pupil-led per-pupil funding each year, researchers predict that overall funding for primary and secondary state schools will fall to £41.6 billion by 2029-30, down from a peak of £42.7 billion in 2024-25.

London councils warned last year that school leaders and local authorities could be forced to merge or close schools as a result of falling pupil numbers and funding pressures.

The number of applications for places at primary schools in the capital fell last year because of the falling birth rate, as well as families leaving the city after the pandemic and Brexit, councils said.

The think tank has called on policymakers to “carefully consider” the impacts of changes to the national funding formula (NFF) on schools that are most affected by falling pupil numbers.

Drop in numbers ‘an opportunity’

Robbie Cruikshanks, a researcher at the EPI, said: “Managing this fall in pupil numbers means that, in many areas of the country, the number of pupils that are admitted to schools will inevitably fall.

“This could then lead to mergers to ensure that schools remain financially viable, or even school closures.”

Paul Whiteman, the general secretary of school leaders’ union NAHT, said: “The drop in pupil numbers provides the government with an opportunity – by maintaining current funding levels, schools could keep current staffing levels, paving the way for smaller class sizes, and targeted support for pupils.

“It would be a waste to allow smaller schools to close, only for there to be a need for more places in those areas further down the line.”

A Department for Education spokesperson said: “These figures are speculative, funding levels beyond 2024-25 have not yet been confirmed and are subject to future spending reviews.

“We are increasing school funding to £60.7 billion next year, the highest level ever in real terms per pupil.

“Every school will receive a per-pupil increase in funding, and the national funding formula makes sure that funding is distributed fairly based on the needs of each school and their pupils.

“It is for local authorities and academy trusts to balance the supply and demand of school places, in line with changing demographics, as they have done for many years.”