The government will not meet its aim of bringing school funding back to 2010 levels because their costs are growing faster than those faced by the rest of the economy, new analysis suggests. found that once rising staff, energy and food costs faced by schools are taken into account, schools’ purchasing power will actually be 3 per cent lower in real terms in 2024 than it was when the Conservatives came to power. Gillian Keegan, the education secretary, said last year the government鈥檚 current funding settlement 鈥渨ould allow schools to return to at least 2010 levels in real terms鈥. IFS analysis did find 鈥渟tandard measures鈥 of inflation typically used showed school spending per pupil 鈥渃urrently on course to be back above 2010 levels by 2024, with increases over this parliament more than enough to reverse the cuts seen up to 2019鈥. But it found a 鈥渧ery different picture when we analyse the actual costs schools are likely to face, with school funding only increasing by just about enough to keep pace with school costs鈥. IFS analysis found the rise in school funding amounted to a 13 per cent real-terms rise in spending per pupil between 2019 and 2025. This would be 鈥渟ufficient to reverse past cuts and take school spending per pupil to 3 per cent more than its previous high-point in 2009鈥10鈥. But the figures used to calculate these changes are based on inflation for the economy at large, rather than 鈥渁ctual costs faced by schools鈥. Judged against these likely actual costs, 鈥渨e see a much smaller real-terms rise in school spending per pupil over time鈥. This would be less than 6 per cent between 2019 and 2025. This would leave schools鈥 actual purchasing power 3 per cent lower than in 2009-10. Teacher pay represents 54 per cent of schools鈥 costs and support staff pay represents 28 per cent. Staff pay growth throws spanner in the works The IFS鈥檚 analysis shows funding per-pupil grew 鈥渟ubstantially faster鈥 than total costs in 2020-21 and 2021-22. This enabled a real-terms growth in spending. But this was 鈥渕ade possible by freezes in public sector pay in 2021, relatively low levels of overall inflation during the pandemic, and the fact that schools were fully compensated for increases in teacher pension costs in 2020鈥21鈥. Luke Sibieta In 2022-23, the analysis found a 鈥渕uch faster鈥 growth in school costs. Teacher pay increased by 5.4 per cent on average, while other staff pay rose by 8.5 per cent and non-staff costs went up 10 per cent, spurred by spikes in energy and food price costs. The fast growth in costs has continued in 2023-24. A larger teacher pay rise, coupled with another rise in support staff costs has had an impact. Teacher pay plans for next year are not confirmed, but based on the STRB鈥檚 original recommendations for this year, the IFS expects funding to grow by 4.3 per cent, while costs will increase by 3.7 per cent. 鈥淪chools are currently seeing large cash-terms increases in funding, which look like large real-terms increases when using standard ways of tracking government spending,鈥 said the IFS鈥檚 Luke Sibieta. 鈥淗owever, schools are also currently facing rapid rises in costs, particularly support staff pay, energy and food costs, which are not captured in those standard economy measures. 鈥淪chool funding per pupil is in fact increasing by only just about enough to keep pace with overall school costs. Policy debate should reflect the acute pressures on school budgets.鈥