Funding for the schools budget will increase by £3.6 billion in cash terms by the end of the Spending Review period. This increase will cover demographic pressures from rising pupil numbers and a new £2.5 billion pupil premium by the end of the period to support the educational development of disadvantaged pupils. This funding will be accompanied by greater freedoms and flexibility for teachers and schools.

We have protected the same baseline for schools as at the Pre-Budget Report in 2009. Therefore, the schools baseline will include funds allocated for:

  • One to one tuition
  • 'Every child programmes' such as Every Child a Reader
  • Extended schools
  • School lunch grant
  • School Standards Grant
  • School Development Grant
  • Specialist schools grant
  • Ethnic Minority Achievement grant
  • The National Strategies’ budgets that were allocated to schools
  • Dedicated Schools Grant
  • Academies running costs.

The Government’s key priority is to close the attainment gap between rich and poor children. Therefore, we are delivering a pupil premium that will be worth £2.5 billion by the end of the period to support the educational development of disadvantaged pupils, and provide incentives for good schools to take on pupils from poorer backgrounds.

Details from the consultation on the pupil premium (which closed on Monday 18 October) together with information about how it will be allocated to schools in 2011/12 will be available in December. It will be up to schools and teachers to decide how this extra funding is spent.

In order to help schools prioritise the activities that have greatest impact on the most disadvantaged children, the Department will share all available information about ‘what works’.

There will be a total of £15.8 billion of capital spending over the period. Although this amounts to a 60% reduction in real terms in capital spending over the period, the annual capital budget will be higher than the average annual capital budget in the 1997-98 to 2004-05 period.

Following the decision to end the inefficient BSF programme there will be enough funding to meet demographic pressures and to address maintenance needs. We have also established an independent review of education capital to ensure that the Departmental capital budget is allocated in the most cost-effective and targeted way. To live within this settlement schools will have to make challenging but achievable efficiency savings so that investment reaches the frontline. Schools should have scope to find procurement and back office savings of around £1 billion while the public sector pay freeze will free up an additional £1.1 billion.

The Department for Communities and Local Government will confirm all LA school allocations for 2011-12 in December.