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What does the budget mean for schools and academy trusts?

06 November 2024

On 30th October 2024, Rachel Reeves delivered Labour’s long-awaited budget. We highlight some of the key elements for schools and academy trusts.

Increased funding

In the budget Rachel Reeves announced the following funding increases which affects schools and trusts:

  • There is an extra £1.8 billion for early years to fund the expanded roll out of funded childcare hours for children aged 9 months to 3 and 4 year olds.

  • There will be £15 million to fund the delivery of 3,000 school-based nurseries, with schools able to bid for up to £150,000 to expand existing or open new provision. The target is for 300 new or expanded nurseries by September 2025.

  • Funding for breakfast clubs is to be increased to over £30 million to help parents stay in or return to work.

  • The schools budget will increase by £2.3 billion. £1 billion will go to high needs (i.e. special educational needs and disabilities) with the rest fully funding the summer’s 5.5% pay award for teachers and intended to help cover pay awards in 2025/26.

  • An additional £1.4 billion will ensure the school rebuilding programme can continue while an extra £2 billion has been allocated to maintain and improve school buildings. A further extra £300 million has been allocated to further education.

  • The Apprenticeship Levy will become the Growth and Skills Levy with an investment of £40 million to help deliver new foundation and shorter apprenticeships.

  • The government also announced £3 million to go towards expanding the Creative Careers Programme to give pupils the opportunity to learn about careers in the creative industry.

While significant, these commitments are overshadowed by the Department for Education admission that ‘there will still be difficult decisions to take on how money is spent right across the public sector – including in schools’.

National insurance contributions

It was announced that national insurance contributions for employers would increase – a jump from 13.8% to 15%. As a small relief, the employment allowance also increases from £5,000 to £10,500. This may reduce liability in some circumstances but it will likely increase costs for schools and academy trusts. Schools and academy trusts will benefit from some assistance with the extra costs. However, it is unclear what assistance will be provided. More details are to follow.

National living wage

The national living wage will increase to £12.21 per hour from April 2025, an increase of 6.7%. The government also aims to remove the bands of pay and create a singe adult wage rate. From April 2025, the national living wage for 18-20 year olds will be £10 per hour, an increase of 16.3%. While good news, these increases have the potential to squeeze budgets for employers, including schools and academy trusts.

In summary

The budget includes significant investment for schools and academy trusts but also signals uncertainty over government spending decisions and whether and to what extent schools and academy trusts will receive further support to absorb the increase in employer national insurance contributions. As always, the devil will be in the detail.

The full text of the Budget can be found here on the UK Government website.

How Wrigleys can help

The education team at Wrigleys is expert in helping trusts, schools and other charitable or not-for-profit education organisations govern their activities in compliance with the requirements of legislation and regulatory bodies.

We work within the wider charities and social economy team at Wrigleys and have a proven track record and expertise in advising trusts and other charities and not-for-profit organisations on their governance, compliance and regulatory requirements.

We are therefore ideally-placed to advise schools and academy trusts on the legal implications of the budget and what it means in practice.

 

If you would like to discuss any aspect of this article further, please contact Graham Shaw or any other member of the education team on 0113 244 6100.

You can also keep up to date by following Wrigleys Solicitors on LinkedIn.

The information in this article is necessarily of a general nature.  The law stated is correct at the date (stated above) this article was first posted to our website. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.

Graham Shaw View Biography

Graham Shaw

Consultant
Leeds

Hayley Marsden View Biography

Hayley Marsden

Associate
Leeds

Imogen Greenwood View Biography

Imogen Greenwood

Trainee Solicitor
Leeds

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