Spending Review – what does this mean for education?

Chancellor Rishi Sunak delivered the Spending Review on 25 November 2020. A one year settlement was provided, a change from the original plan to set budgets for the next three years, in light of the uncertainty to public finances caused by Covid-19. Below is a breakdown of key announcements and what we know so far.

Further Education

£110m has been announced, including £50m of capital investment, to drive up higher technical provision in support of the future roll-out of a Flexible Loan Entitlement to test and develop innovative models for local collaboration between skills providers and employers.

A handful of capital announcements have been announced for new Institutes of Technology and college rebuilding. They will support providers with facilities and equipment, particularly for specialist T levels and Higher Technical qualifications.

The Chancellor confirmed £375m for the Lifetime Skills Guarantee. We are awaiting further details so will update you on this as the information is released.


There has been a £2.2bn increase to the DfE revenue funding pot for the year 2021/22. This means that all pupils will receive a real term increase in spending next year which will hopefully ease pressure on schools.           

Capital funding has been announced to rebuild or refurbish 500 schools (50 a year) and some additional capital for new T Level facilities, new Institutes of Technology, and new special schools.

There has been confirmation of funding for the new package on Free School Meals which is a welcome benefit to disadvantaged learners.

Additionally, according to Schools Week, funding for the National Tutoring Programme has also been extended for another year.

Early Years

£22 million has been announced to continue improving the quality of teaching, including funding for mentor time as part of the Early Careers Framework and provides £44 million for early years education in 2021-22 to increase the hourly rate paid to childcare providers for the government’s free hours offers. This is on top of the £66 million increase confirmed in 2019.


The lack of detail in the announcements for further and higher education suggests that forthcoming FE and HE White Papers will contain more detail on announcements in this area. However, with no significant pots of money announced, it is likely that we will not see any significant changes on tuition fees, or lifelong learning accounts.  

As you know, and as this year has proved so far, the landscape of funding and spending is ever changing but we hope that these commitments to education spending are followed up with longer term funding commitments to enable learning to play it’s part in our economic recovery.

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