Drastic spending cuts could result in a drop in achievement at schools and universities, says a new report from the Institute for Fiscal Studies.
The economic research institute said that public spending on education would fall by more than 13 per cent in real terms by 2014-15 - the largest cut in education spending over a four-year period since the 1950s.
The cuts will be deepest for higher education, which is expected to be reduced by 40 per cent, and capital spending, which will be cut in half.
Education for 16-19-year-olds and for "early years" - nursery pupils and playgroups - will also be hit hard, with spending cuts of around 20 per cent, said the Institute for Fiscal Studies (IFS). Spending on schools will see the smallest real terms cut of about 1 per cent.
Last November, the government announced that universities would be able to charge students tuition fees of up to £9,000, which will offset spending cuts.
The key question is what these cuts in financial resources will mean for the outputs of the education system, such as young people's exam results or earnings potential. Luke Sibieta, IFS
The coalition government said it had ring-fenced education to protect schools from the budget cuts. Its pupil premium policy will also add to the extra money provided for the poorest pupils and schools in deprived areas will see real-term funding increases.
Majority of schools affected
However, the majority of schools will see cuts, said an IFS spokesman.
Luke Sibieta, senior research economist at the IFS and co-author of the report, said: "Having risen by historically large amounts during the 2000s, the UK's education budget is now set for an historically large fall over the next few years.
"Of course, the key question is what these cuts in financial resources will mean for the outputs of the education system, such as young people's exam results or earnings potential," he added.
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