School budgets will be less than 2% better off next year after it was revealed that the government’s pay increases for teachers will absorb more than half of the extra funding promised for state schools in England. Analysis by the House of Commons library for the Liberal Democrat MP Layla Moran calculated that the pay award announced by the government last month would come entirely from school budgets, eating into the funding boost announced for 2020-21 onwards. The extra billions for school funding promised in the pre-election spending round will shrink to just £1.7bn in 2020-21 after accounting for the pay rise. Compared with 2019-20, that means the school budget increase from the Department for Education (DfE) will slow from 5.1% to just 1.9% in real terms. The Commons researchers said the funding figures also do not include the additional costs that schools face as a result of Covid-19, such as intensive cleaning and remodelling, nor the extra costs of providing free school meals during the summer holidays. Moran, the Lib Dem education spokesperson and a contender for the party’s leadership, said: “Our teachers have gone through the most tumultuous times in their careers because of Covid-19, and they deserve a pay rise. But the government’s failure to budget for this increase means many schools risk being left short-changed. “Boris Johnson claims getting children back into school is a national priority. He must now ensure schools have the resources they need to cope with the pressures caused by coronavirus and ensure no child is left behind.” The researchers said the DfE’s schools budget increased from £44bn in 2019-20, to £47bn in 2020-21, including additional funding for pensions, for an overall increase of 5.1% in real terms. However, last month the government said teachers’ salaries would rise by 3% overall next year, including a 5.5% bump for new teachers. The education secretary, Gavin Williamson, said the pay rises would be funded from existing budgets, in effect cutting the net increase to £1.7bn, or just 1.9% in real terms. “This indicates that in both cash and real terms, the teacher pay increases will not erode all of the announced increases in school funding. However this will vary greatly between different schools depending on their individual circumstances,” the researchers stated. They also noted that the figures do not include “increases in pupil numbers or other cost pressures schools may face,” such as extra cleaning to limit the spread of Covid 19, or the additional £1bn catch-up tutoring and support fund announced in June. Jules White, the leader of the Worth Less? Group of headteachers lobbying for better school funding, said many had feared the promised increases in school funding would not be as significant as the original headlines suggested. “We are already operating on a shoestring and it would be disastrous if the promised ‘levelling up’ and improvements to school budgets turned out to be little more than a mirage,” White said. Paul Whiteman, the general secretary of the National Association of Head Teachers, said: “This means an anxious summer for school leaders as they decide what they have to cut to afford pay increases for their staff – or if they even need to lose some people to pay the rest more. A summer of stress and difficult decisions is no reward after months of going above and beyond during the pandemic.” A DfE spokesperson said: “We want to make teaching attractive to the most talented candidates by recognising the outstanding contribution teachers make to our society. This is why we are introducing the biggest pay rise the profession has seen since 2005, with above-inflation rises to the pay ranges for every single teacher in the country. “We are increasing core schools funding by £2.6bn in 2020-21, rising to a £7.1bn increase in 2022-23 compared with 2019-20. This is part of our three-year £14bn funding settlement to level up education funding and opportunity across the country.”