Two of Labour’s flagship policies have created deficits of hundreds of millions of pounds for schools, which will be forced to cut their spending on staff and teaching activities, the New Statesman has learned. Headteachers say the most disadvantaged children will be hardest hit by the changes, which a leading expert on school meals says the lack of extra funding is “reinforcing socio-economic disparities in this country”.
Schools face these deficits because the government has not properly accounted for the cost of two of Labour’s most important policies: expanding free school meals and delivering an above-inflation uplift to Universal Credit. New research shared exclusively with the New Statesman by academics at Northumbria University has found that the expansion of free school meals alone will leave schools facing a shortfall of more than £310m in the next academic year.
In June, the government announced that every child from a household in receipt of Universal Credit would receive free school meals; the new eligibility began this month with the start of the new school year. Greta Defeyter, a professor in food insecurity and school meals at Northumbria, says this is an excellent policy that will give an extra 622,000 children access to free school meals. But funding for these meals – at just £2.61 per day – is not sufficient to secure food that meets nutritional standards. Most schools already top up their free school meals allowance from their teaching and learning budgets, and Defeyter says that without additional funding, the new policy makes this issue significantly worse.
Defeyter’s analysis of publicly available data shows that schools will need to find £310,231,580 from their already stretched budgets to provide the additional meals. This is not a huge amount of money to a government department – the Department for Education has spent £234m in the past two years with management consultants and advertising agencies – but it is a major problem for school budgets. Teachers already spend hundreds of pounds per year of their own money topping up school supplies.
The headteacher of a primary school in the north-east of England told the New Statesman the policy has already had “serious budget implications”. The school may have to use a fifth of its allocated curriculum money to cover the cost of the additional free school meals. “Cuts already have been made to enrichment activities for all children and additional activities that support disadvantaged children,” the headteacher said. “Those who are disadvantaged will be hardest hit and the gap will widen between them and their peers.”
“This will continue,” they said, adding: “We anticipate this could also affect staffing.” The headteacher of a secondary school in the Midlands agreed that the policy, without additional funding, created “a significant and serious budget issue for us as a school… This will mean that we have to move funding from other areas of curriculum [or] staffing to meet this need. This might mean for example that we do not replace a teaching assistant or a pastoral member of staff if they resign.” They also agreed that the children who would be most affected would be “the most vulnerable who need more support, care and nurture”.
The research shows that schools in the lowest-income areas, which have a higher proportion of families on Universal Credit, will have to make the deepest cuts to staff, enrichment activities and other spending in order to pay for the increased spending on meals. Defeyter’s work finds this could make regional disparities in education worse, because the amount of teaching budget lost by schools in the north-east is more than 40 per cent higher than the amount lost by schools in the east of England.
Defeyter said she has sent her research to the government, but that she is yet to receive a reply.
Sharon Hodgson, the Labour MP for Washington and Gateshead South, chairs the all-party parliamentary group on school food. Hodgson told the New Statesman that while the expansion of free school meals to more than half a million children is “life changing” and will “have the effect of lifting at least 100,000 children out of poverty”, she is also hearing from some headteachers rising food costs and “relatively stagnant” budgets mean “some schools having to plug the gap” between their budget and the real cost of providing free school meals. “Any expansion to free school meals is likely to widen this gap and may disproportionately affect schools with higher percentages of pupils in receipt of free school meals”, Hodgson warned. “We all want this policy to succeed, but the government’s ambition must be matched by proper funding.”
This is not the only issue for school budgets caused by recent Labour policies. The commitment to raise Universal Credit above the rate of inflation is, again, a positive move that will benefit millions of low-income households. But its impact on schools does not appear to have been recognised. Since 2011, schools have received “pupil premium” funding (as of 2024-25, it is £1,455 for a primary school pupil, or £1,035 for a secondary school pupil) to support children from low-income families. Without a new system for eligibility, Defeyter says the new level of Universal Credit is likely to take a proportion of these children over the income threshold at which the pupil premium is paid. Again, the schools with the poorest children will lose the most funding. Defeyter says the effects on school budgets are hard to forecast, but that teachers are already assuming there will be an effect: “For those pupils who are above that [income] threshold of £7,400 – I think most schools are proceeding in the assumption that they will not get additional pupil premium for those pupils.”
“It’s a convoluted system,” Defeyter said, “and I think it could do with a refresh… If we ensure that more children have the access to a free school or meal, that’s great, but that learning part is important too. You have to invest in both teaching and learning, and in school food.”
[Further reading: Exclusive polling: How Burnham beats Reform]
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