In its January 2025 report on education spending, the Institute for Fiscal Studies (IFS) contrasts the government's “high ambitions to improve education and reduce inequalities” with the likely reality of “minimal room to manoeuvre against its fiscal rules” and promises of “no further tax rises”.
The IFS concludes that once higher spending on the NHS, defence and early years entitlements are factored in, other areas are likely to face cuts in June's Spending Review, which will set out government department budgets for three years from 2026/27.
In its submission to Chancellor Rachel Reeves ahead of the review, the Local Government Association (LGA) predicts “systemic financial failure” without a sustainable programme of investment in services and highlights its analysis that councils are facing an £8bn funding gap by 2028/29 – the result of a projected 30% rise in the cost of delivering services since 2024/25.
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