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IFS: This year’s funding rates 22% lower in real terms than in 2017
The Institute for Fiscal Studies (IFS) annual report on education spending in England shows how spending on education and in particular early years has dropped per child in real terms.
Most notably, despite record investment in funded places, the Government is paying 22% less in real terms to providers than it was in 2017 when the 30 hours policy was rolled out across the country.
Early years provider rates have remained flat in real terms since 2024 but employer costs – including minimum wages, National Insurance and pension contributions – have risen much steeper than overall inflation (55% compared with 35%), which accounts for the drop. But resources for two-year-olds have increased by 12% since 2017.
Across all remits, public spending on education has also fallen as a share of national income, from about 5.6% in 2010–11 to about 4.1% in 2024–25. This equals the historic lows seen in the late 1990s, late 1980s and mid 1960s.
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