Education spending in the UK

Since 1979….

The real level of public spending on education in the UK was static in the early 1980s. It increased gradually from the mid-1980s to the early 1990s before falling slightly in 1995-96 and 1996‑97. After then it increased to new record levels in each year to the peak in 2010-11. The spending data excludes the subsidy element of student loans from 2011-12 onwards. Despite this break in the series there was a clear decline in spending in the five years from 2012-13 to 2017‑18. The increase in 2019-210 was the first since 2010-11. The increase in 2020-21 took real spending to its highest level since 2012-13.

When expressed as a proportion of GDP, education spending peaked in 2009-10 and 2010-11 at around 5.4%, its highest since the mid-1970s. The subsequent decline took it down to below 3.9% in 2018-19, its lowest level for almost two decades. There was a small increase in 2019-20, the first since 2010-11. Higher education spending in 2020-21 combined with the sharp cut in GDP due to the pandemic meant there was a sharp increase in spending as a percentage of GDP in 2020-21 of almost 0.5 percentage points to 4.4%.

Since 1950…

Public expenditure on education increased as a proportion of GDP throughout the 1950s, 1960s and early 1970s. It peaked at 5.8% in 1975-76 before declining for the rest of the decade and much of the 1980s. It briefly increased in the early 1990s before falling back to a recent low of 3.9% in the late 1990s. From the late 1990s it increased in each of the next 12 years to 5.5% in 2010-11. A break in the series in 2011-12 limits the comparisons with later years, however, it is clear than education spending has fallen as a percentage of GDP in each year from 2011-12 to 2018‑19. This was the longest continuous period of decline in this measure for the period covered here. There was a small increase in 2019-20, the first since 2009-10

By level…

79% of education spending went on schools -primary and secondary education. The relatively low share going on tertiary (higher) education reflects the fact that the data exclude the subsidy element of student loans which forms the majority of higher education spending in England.

Within the UK…

Public spending per head on education in 2019-20 was highest in Scotland at around £1,690, followed by £1,530 in Northern Ireland and £1,480 in London. It was lowest in the South East and South West of England at around £1,230.

If spending on loans was added back in…

Spending still fell in real terms and as a percentage of GDP after 2010, but by a smaller amount than official figures show. Real spending levels stabilised in the middle of the decade and have increased since 2016-17.

In the future…

Spending plans for England (only) show an increase in day-to-day spending in of £9.9 billion between 2021-22 and 2024-25 or 2.2% per year on average in real terms. Capital spending is planned to increase by £0.5 billion over the same period or 0.5% per year in real terms. These plans exclude spending directly related to the coronavirus pandemic but do include funding for post-pandemic ‘education recovery.

Compared to other countries…

OECD analysis puts UK public spending on education at 3.9% of GDP in 2018. This was 19^th highest out of the 37 OECD members with data on this measure and below the OECD average of 4.1%. If private expenditure on education is included then the UK’s total spending on education in 2018 was 6.1% of GDP, Only Norway, Chile (both 6.6%), New Zealand and Israel (both 6.2%) and had higher figures.

This paper looks at trends in public sector education expenditure in the UK. Some more detail can be found in Public expenditure statistical analysis 2021 including a breakdown of total expenditure by type of education and spending in total and per head in the different parts of the UK. The annual report and accounts of the Department for Education includes more technical detail of spending in the most recent year and, in appendices, plans to the end of the current spending review period. Chapter C of the OECD’s Education at a Glance 2021 compares education spending across OECD and other countries.

Readers may also be interested in the latest annual report from the IFS on Education Spending in England which focus trends in spending, including per pupil/student, at different levels/phases of education from early years to higher education. This has been updated with briefing notes on School Spending in England and Further education and sixth form spending in England.

The briefing paper Higher education funding in England looks in detail at spending on higher education in England. The articles An introduction to student finance in England and Student finance in England: How much do graduates pay back? Look at the size of financial flows in the student finance system. Details of policy changes and spending levels are given in the briefing Further education funding in England.

The Department for Education publishes a wide range of data and analysis on school funding and expenditure in England under different headings. The most useful can be found at: Statistics: local authority/school finance data, School and college funding and finance and Section 251 documents