The Education Minister’s draft five-year budget strategy, published last Wednesday, highlights important patterns in education spending and how these needs can be best met in future. It faces up to stark financial and demographic realities there has been a reluctance to confront in the past. Its proposals are wide-reaching and will affect all aspects of education here. In this note we pull out some of the headlines.
The strategy comes in the context of an “exceptionally challenging” multi-year budget proposal, coupled with “years of underfunding and limited structural reform” which has created a “financial crisis”. The Department is forecast to have a £250m shortfall this year, which the document says could rise to £1.15bn in 2028-29. The proposed interventions seek to minimise this risk and improve service provision and delivery over the next five years.
What funding pressures is the Department facing?
Over half of the Department’s budget goes towards its Aggregated Schools Budget, which covers everything from the everyday running of schools to staff salaries, maintenance, exam fees, heating and lighting and furniture. The next largest share is the £1.19bn Education Authority (EA) Block Grant. The biggest portion of this, £714.9m, goes to SEN provision. The rest goes towards services including transport, school meals, admin and earmarked projects like elements of TransformED and pre-school programmes. You can see a fuller breakdown in the table below:
Staffing costs, which make up 82% of the total education spend, rose by around £1bn between 2017 and 2025 – a 62% increase (inflation over this period has been around 32%). This has been due to pay settlements and the increasing demand for key services provided by the Department and schools, such as SEN. The chart below shows this increase over time:
SEN provision is one of the key drivers of the growth in spending. From 2017-18 to 2025-26, there has been a 65% rise in the number of children with an SEN statement, a 30% rise in special school placements and a 108% rise in the number of SEN pupils in mainstream schools. SEN expenditure has therefore grown from 13% to 21% of the total budget in that time. The chart below shows the unprecedented rise in pupils with an SEN statement.
What changes are being proposed?
What all of this makes clear is that the Department is facing incredibly difficult challenges to manage spending. A number of principles are laid out which will guide their process:
The classroom must come first – the Aggregated Schools Budget is the “cornerstone” of delivery and must be safeguarded.
No education system can exceed the quality of its teachers. The Department remains committed to investing in teachers.
Protecting core school funding creates the foundation for continued improvement.
A commitment to equity through tackling education disadvantage.
The strategy document therefore focuses on six areas where interventions will be made to make savings, and improve delivery and provision:
1. Reduction of earmarked budgets
At present the Department sets aside allocations for various projects delivered both in schools and communities. Examples include the Full Service School Programme and the Sure Start funding. All earmarked budgets will be reviewed, with an eye to reducing or stopping funding where possible. The strategy says that “there will be many unpalatable and difficult decisions”, but it is a “necessary and immediate step to deliver savings”. However, they anticipate these savings to be minor compared to the scale of the problem, in the region of below £50m per year.
2. Home-to-school transport
The 2023 Independent Review of Education (which informs many of the decisions outlined in the draft strategy) found that this policy is over-generous and unaffordable as configured. Pupil numbers have grown 10% since 2019-20, but costs have risen 54%. For SEN pupils, a 39% pupil number increase has led to a 115% cost increase. The problem is particularly acute for SEN transport to mainstream schools, with a 170% increase in costs.
Comparatively with the rest of the UK, the system in Northern Ireland is much more generous, with 27% of pupils receiving transport assistance, compared to only 6% in England. Our eligibility criteria, like the rest of the UK, is based on distance and providing assistance to the “nearest suitable school”. However, due to the segregated nature of our education system, “nearest suitable school” is defined within the pupil’s preferred category: controlled, catholic maintained, denominational grammar, non-denominational grammar, integrated and Irish-medium. This means pupils in receipt of transport assistance will often pass schools which are closer but are not their preference.
Reforms here would revise the eligibility criteria and narrow the definition of “nearest suitable school” and introduce transport charges for some pupils, as the Independent Review recommended. The detail remains to be seen, but this may have significant implications for ‘informal’ integration of pupils attending a school with a different religious ethos from their own background.
The document proposes that SEN transport policy will be better aligned with wider SEN reforms in mainstream schools, taxis will be used only when necessary when there is good value for money. The assessment of additional transport needs will also be reviewed to ensure they focus on genuine need.
3. School meals provision
Schools meals costs £88m per year, 70% higher than 2017-18 levels. Food price inflation, and production, utility, and labour costs have all had an impact.
It is proposed that the EA consolidates meal production in primary schools through a smaller number of production kitchens which will reduce duplication across schools, lower costs and streamline operations. Through other interventions, they will aim to increase the number of paying pupils to reduce the net costs, such as cashless payment through parental payment apps. Standardisation of breakfast clubs and school meals will ensure further consistency.
4. SEN support model for statemented pupils in mainstream schools
Almost 20% of the school population have been identified with SEN, and 8.3% of them, almost 29,500 pupils, have a formal Statement of SEN, which entitles them to specific support. This is expected to grow by 46% by 2028-29.
Between 2017-18 and 2024-25, resource spending on SEN increased by 164%.
There are over 12,500 full time SEN assistants in mainstream schools, who often work on a 1-1 basis with statemented pupils. The document says that the evidence suggests, however, that this type of support does not deliver the best outcomes. A more flexible deployment of staff and adaptive teaching methods are used elsewhere.
The Department plans to implement SEN budgets for schools, giving them funding directly to develop tailored approaches. A team based flexible support model will replace 1-1 support, alongside a new employment model for classroom assistance which will allow for more training and development.
5. Restructuring the school estate
The chart below shows the number of schools which fall below the minimum enrolment threshold. In the post-pandemic period, a historic (but slow) reduction has stalled.
In 2024-25, 28% of primary schools, 21.6% of post-primary (Years 8-12) and 22.2% of sixth forms, were below the minimum enrolment line. The table below shows the projected increases in the numbers of schools below the minimum thresholds across the board by 2033-34.
The Department plans to appoint an Independent Commission to carry out a sustainability audit of all schools, make recommendations on restructuring the schools estate, and produce a five-year implementation plan. The Department itself will review the Sustainable Schools Policy, review and streamline planning law to allow for closure and amalgamations based on the Commission’s findings, and develop protocols to fast track capital funding for rationalisation.
This policy has some similarities to the Department of Health’s hospital reconfiguration plan – rationalising services to create a more efficient ‘network’ in the face of unsustainable spending and unnecessary duplication. The Health example shows the importance of clearly explaining the need for transformation, bringing staff and stakeholders with you, and being transparent and honest in your planning and proposals.
6. Reform of the model of financial delegation
21% of schools were in deficit totalling almost £14m in 2011-12. In 2024-25, that had risen to 60% of schools with a total shortfall of £179m. By the end of 2025-26, it is predicted that 70% of schools will be in deficit.
Staff costs are often over 90% of a school budget, leaving little room for flexibility. Furthermore, there is only a small team within EA working with schools on their finances, who are coming under increasing strain as more schools struggle.
A new traffic-light system will allow EA to prioritise intervention where it is needed. A centralised staffing model, similar to Ireland’s, will be implemented for schools in deficit and be offered to others who want it. Schools will work to an agreed teacher complement over a defined period.
Conclusion
These proposed reforms are wide-ranging, ambitious, and will, in many cases, be very contentious. The Minister will seek Executive approval for this strategy post-consultation. The proposals highlight the difficult financial position all departments are in, but also points to the importance of longer-term strategic planning across our public services. The multi-year budget process, and continued co-operation between ministers, is an important first step in that regard.
This five-year plan offers useful detail of departmental spending and demographic projections. Pivotal encourages all departments to make public their five-year plans for transparency, scrutiny and public consultation.
The consultation on the Department of Education’s Five-Year Education Budget Strategy closes on 3 April 2026. You can read more about it and respond here.
