The next government faces a 鈥減ainful set of choices鈥 on school funding, the has warned, with schools facing stagnating cash, real-terms cuts to teacher pay and a soaring SEND bill. Politicians looking to falling pupil numbers as a way to make savings would face having to cut staff numbers and close schools, the think tank also warned. Pupil numbers are due to fall by around 10 per cent by 2032, and falling primary rolls are already decisions to close and merge schools, particularly in London. The crisis has prompted calls for school funding overall to be kept at current levels, allowing falling rolls to push up per-pupil funding. Neither of the main parties has said what they will do to school funding after the election. Luke Sibieta Report author Luke Sibieta, a research fellow at the IfS, said an incoming government 鈥渕ight be tempted to cut school spending in response to falling pupil numbers鈥. But realising such savings 鈥渃ould be easier said than done as it would likely require workforce reductions and, perhaps, school closures鈥. 鈥淭his is probably why policymakers have shied away from making cuts to total school spending in the past.鈥 He added there was a 鈥済rowing list of pressures on school spending, which may become harder to address over time, such as the spiralling cost of special educational needs provision, real-terms cuts to teacher pay and a growing backlog of repairs to school buildings鈥. School costs rise above inflation Based on wider inflation across the economy, school funding is due to return to 2010-levels in real-terms next year. However, schools鈥 costs are rising more sharply, potentially leaving their spending power 4 per cent lower in real terms than 14 years ago. A lack of growth in spending per pupil over 14 years is 鈥渨ithout precedent in recent history鈥, the IfS warned. 鈥淭he long-run average growth in spending per pupil is about 2 per cent per year in real terms. Under Labour governments from 1997 to 2010, spending per pupil rose by an average of 5 to 6 per cent per year in real terms.鈥 The funding situation is made worse by rising demand for special educational needs and disabilities support. The number of pupils with the highest levels of assessed special educational needs has increased by over 60 per cent since 2015. This has driven a 拢3.5 billion increase in the high-needs budget, which has 鈥渦sed up鈥 nearly half of the 拢7.6 billion increase in school spending since 2015. Spending on school buildings is also 25 per cent lower than in the mid-2000s and about 40 per cent below what the government thinks is needed to bring all schools up to a good state of repair. At the same time, average teacher pay is 6 per cent lower in real-terms than in 2010, exacerbating recruitment and retention woes. ‘Between a rock and a hard place’ Sibieta said: 鈥淟ooking to the coming parliament, policymakers are caught between a rock and a hard place.鈥 He said based on current plans 鈥渕any other areas of public service spending appear to be facing cuts under either a Conservative or a Labour government鈥. The report found that 鈥渋n principle鈥 a fall in pupil numbers 鈥渟hould reduce spending needs and pressures鈥. Freezing per-pupil funding in real terms 鈥渃ould generate savings of over 拢3 billion per year by 2028鈥29鈥. However, there are 鈥渁 number of caveats to this鈥. Schools鈥 costs are 鈥渦nlikely to fall in proportion to pupil numbers, particularly in the short run鈥. They have 鈥渕any fixed costs in terms of having a teacher in front of a class and heating a building鈥. 鈥淭here are savings to be had, but realising those savings would generally require cuts in staff numbers or closing some schools if they are no longer financially viable, which can both be hard to achieve in practice.鈥 The IfS also warned there was 鈥渦ncertainty鈥 around pupil number forecasts 鈥渨hen looking to the medium term鈥, and warned falls will 鈥渘ot be even across the country鈥.