Schools in England are to get a multibillion-pound injection of funding, with extra money for children with special educational needs, but experts have said it will be rapidly swallowed up by rising costs and much more will be needed after years of underinvestment. Among a raft of measures designed to show the government’s commitment to education, the chancellor, Rachel Reeves, announced £6.7bn in capital investment for next year, which she said was a 19% real-terms increase on this year’s settlement. Of that, £1.4bn will go towards the schools rebuilding programme, an increase of £550m on this year, £2.1bn will go towards school repairs, including buildings blighted by crumbling Raac concrete, and there will be £15m to begin delivery of the 3,000 new or expanded nurseries in primary schools. School leaders welcomed a £2.3bn increase in core funding for schools, including a much-needed £1bn boost for special needs. However, experts said the additional investment was likely to be used mainly to plug existing deficits, while the special needs system would remain in a “perilous” state. The £2.3bn uplift for 2025-6 will raise per-pupil spending in England by 1.6%, putting resources above their 2010 level for the first time, according to Luke Sibieta, a research fellow at the Institute for Fiscal Studies, who said the additional money would quickly be swallowed up by cost pressures. Jon Andrews, the head of analysis at the Education Policy Institute, said: “Given the spending constraints imposed by government and competing priorities, the limited offering is not unexpected, but there are systemic issues that the government still needs to address. In particular, despite the additional investment, the special educational needs system remains in a perilous state, which risks services for some of our most vulnerable children being cut.” On the chancellor’s increased investment in the school estate, Daniel Kebede, the general secretary of the National Education Union, said it was “a small dent in the £40bn cumulative cut to school capital funding since 2010”. He said the £1bn for special needs was a step in the right direction but the £1.3bn of additional core funding left over for mainstream schools would put them in a “very difficult” position. “Given the scale of the teacher recruitment and retention crisis and the historic low pay of support staff, this level of funding is insufficient,” he said. Paul Whiteman, the general secretary of the NAHT school leaders’ union, said: “It is a start based on good intentions, but it must be backed up by further ambition and investment in the multiyear spending review due next spring.” Julia Harnden, a funding specialist at the Association of School and College Leaders, was concerned about “the parlous state of post-16 funding” and said the additional £300m promised by Reeves for further education “does not match the government’s ambition for a major focus on skills”. The government also confirmed its plans to press ahead with adding VAT to private school fees in January and removing business rates relief from next April, estimating the policies will generate £460m this year, rising to £1.8bn in 2029-30. After concerns about the impact on military families, the government will increase the continuity of education allowance (CEA), which helps service families with fees. There was little of comfort for the struggling higher education sector, despite pre-budget speculation about a possible increase in tuition fees to improve university finances. The University and College Union’s general secretary, Jo Grady, said: “Employer national insurance rises will hit the sector hard when higher education is already on its knees. Universities are crying out for increased public funding to secure their future as Britain’s last world-leading sector, yet the chancellor failed to deliver.” The Treasury indicated that schools would get additional funding to help with increased national insurance contributions.