The claim
“We’re putting in £2.5bn more per year by the final year of the parliament into this pupil premium.”

David Laws, 5 March 2013

The background

The Liberal Democrat schools minister, David Laws, has announced a toughening of targets for English primary schools.

From next year, 65 per cent of 11-year-olds must score level 4 in English and Maths, as well as meeting national progress benchmarks.

This new drive for higher standards will be funded, in part, by the pupil premium, a key Lib Dem pledge that was one of the party’s top priorities when negotiating the coalition agreement.

The pupil premium is allocated to schools according to how many children are eligible for free school meals, so schools in poorer areas ought to get a boost, on top of what they would normally expect to receive from the government.

The government has misled voters on the pupil premium before, initially saying that the money would come from outside the education budget, before finally admitting that some of it would be recycled from other spending on education. Time for a catch-up.

The analysis

The issue with Mr Laws’s claim hinges on the word “more”. The pupil premium was designed to be an extra pot of cash given out in addition to the usual funding the government gives to schools.

But are schools really getting “more” overall?

In 2010 the government promised to keep the ordinary schools grant (which is given to local councils or academies and free schools on a per-pupil basis) flat in cash terms, a promise which they appear to have kept.

But of course a cash-terms freeze means a cut in real terms, begging the question of whether the pupil premium would just fill gaps left elsewhere in schools’ budgets.

It’s true that the money allocated to the pupil premium is set to rise to £2.5bn by 2014/15, but what if basic school funding falls by more?

Department for Education spending on schools is fiendishly difficult to analyse unless you are an expert in public finance, so we’re depending on the independent Institute of Fiscal Studies (IFS) to give us their take on the situation.

The think tank’s senior research economist Luke Sibieta first looked at the pupil premium in 2011. He concluded then that the extra money would not quite make up for the real-terms cut to the ordinary schools grant.

So there would be a small real-terms cut of about 1 per cent from 2010 to 2014.

Since then, the only thing that has changed are the inflation forecasts. Inflation has proved to be slighly lower than predicted in 2010, and that has turned a tiny real-terms cut into a rise.

So we could be talking about a 1 per cent rise in real terms now, instead of a 1 per cent fall by 2014, according to the IFS.

This may be a slightly pessimistic forecast, as freezes to teacher’s pay mean schools may not be feeling the same inflationary pressure as other parts of the economy.

On the other hand, expected rises in pupil numbers over the next few years could mean the government end up allocating the same resources to a smaller number of children, according to Mr Sibieta.

While ordinary schools funding is per-pupil, the pupil premium is not, so we would be stretching the same amount of cash between more pupils.

The verdict

Mr Laws is not wrong to say that the pupil premium will reach £2.5bn a year by the end of this parliament, and the size of the allocation is almost undoubtedly because of bargaining done by the Lib Dems.

It’s also true that this represents extra money for poorer children, so this is arguably a more progressive settlement than we would have seen otherwise.

But the real question is whether the money can really be called a “premium”, if the total resources available for schools actually fall.

The IFS’s best estimate is that we are not quite talking about an overall cut, but there’s not much in it. If inflation were to suddenly go up, the headline might change. And if pupil numbers go up there will be less cash per child.

And then there is a whole other debate we could have about whether the pupil premium is the best way to spend the cash. Some critics, even from within the ranks of the Lib Dems, think not. And last month the schools inspector Ofsted found that a “significant minority” were failing to spend the cash on deprived children.

But that’s a whole other FactCheck.

A Department for Education spokesman told us: “The funding for the pupil premium is entirely additional to the schools budget – it is on top. We have protected the schools budget in cash terms before adding the pupil premium. The money comes from efficiency savings in the department and from other departments.

“The Pupil Premium goes to children eligible for Free School Meals at any point in the last six years and to pupils in care who have been looked after for six months or more.

“It will go to around half a million more children in 2013-14 that it did in 2011-12, and at the same time it has increased from £488 to £900 per pupil.

“The Pupil Premium has increased from £1.25bn in 2012-13 to £1.875bn in 2013-2014, and will rise to £2.5bn in 2014-2015.”

By Patrick Worrall