ICAEW chart of the week: Schools out

Our chart looks at the projected state school population in England over the next six years, with an anticipated 10% fall in state nursery and primary school pupils implying school closures and mergers are on the way.

Schools out | 
ICAEW chart of the week | 

Dual column charts showing the projected number of pupils in England in thousands ('000) | 

Left hand chart: State nursery and primary schools | 
2023 - 4,593 | 2024 - 4,510 | 2025 - 4,431 | 2026 - 4,350 | 2027 - 4,272 | 2028 - 4,181 | 2029 - 4,113 | 

Right hand chart: State secondary schools (excluding sixth forms) | 

2023 - 3,193 | 2024 - 3,244 | 2025 - 3,244 | 2026 - 3,238 | 2027 - 3,219 | 2028 - 3,191 2029 - 3,145 | 

30 May 2024. Chart by Martin Wheatcroft FCA. Design by Sunday. 

Source: Department for Education, 'National pupil projections'. 
Full-time equivalent pupils at start of academic year. 

© ICAEW 2024

According to Department for Education statistics, there were an estimated 8,425,000 school pupils under the age of 16 in England at the start of the current academic year in 2023. Of these, 4,593,000 were in maintained nursery and state primary schools, 3,193,000 were in state secondary schools, 131,000 were in state special schools, 13,000 were in alternative provision, and 496,000 were in independent and other non-maintained schools. 

Our chart this week shows how the first two categories are projected to change over the next six years, starting with a projected 10% fall in pupil numbers in state nursery and primary schools from 4,593,000 in the current academic year to 4,113,000 in the academic year starting in 2029.

Meanwhile the number of state secondary school pupils under the age of 16 at the start of the academic year is expected to increase from 3,193,000 in this academic year to peak at 3,244,000 next year before gradually declining to 3,146,000 in 2029, a fall of 3% from the peak.

Driven by a falling birthrate, the 10% projected fall in state nursery and primary school pupils is likely to be a major issue across England and a political hot potato for the next government. Larger primary schools may be able to cut the number of classes (ironically increasing class sizes) to mitigate reduced income from falling rolls, but this may not be enough. Smaller schools with just one class per year will find it more difficult to find savings. 

Closures and mergers are likely, as are a rise in ‘save our local school’ campaigns as academy trusts and local authorities seek to find savings in response.

The 3% decline from the peak in secondary school pupil numbers will also present major challenges, especially as the fall in numbers is unlikely to be spread evenly across all state secondaries. Some will see smaller falls or even rises in their school rolls, while others will see a much greater drop in their intakes. Again, reducing the number of classes in each year is a likely response for those affected, but some closures and mergers are almost inevitable.

These projections are subject to some uncertainty, despite the core numbers being based on children who have already been born that are likely to stay in the English education system for the entirety of their school careers. The level of migration is a key assumption and could lead to even lower pupil numbers if recently implemented restrictions on the eligibility of immigrants to bring dependents with them are effective. The projections also assume a relatively stable number of pupils going to private schools, which may need to be adjusted in the light of Labour’s proposals to add 20% VAT to school fees.

These statistics are prepared on a full-time equivalent basis, but these are deemed to be the same as total pupil numbers for each age group, apart from the under 5s. Many nursery pupils and primary school reception class students only attend on a part-time basis, with 974,000 under 5s converting into 874,000 full-time equivalents (FTEs) in the current academic year. These numbers exclude most under 5s who attend private nurseries, receive other forms of childcare, or stay at home.

In theory, falling school rolls should reduce pressures on the education budget while at the same potentially increasing per-pupil funding, depending on how much is cut from the school budget. However, with the Spending Review now scheduled for after the general election likely to result in upward revisions to the Spring Budget 2024 medium-term spending plans, any such savings are likely to be swallowed up.

ICAEW chart of the week: Receipts and spending by age

My chart this week looks at how receipts and spending vary by age, a key driver for public finances that new Chancellor Kwasi Kwarteng will need to factor into his fiscal plans.

Column chart - showing receipts by age group per person per month above the line and spending below the line.

0-9: £150 (receipts) - £550 (public services and interest), £290, (pensions and welfare), £270 (health and social care), £380 (education)

10-19: £210 - £620, £320, £110, £750

20-29: £1,150 - £440, £120, £160, £110

30-39: £1,930 - £430, £150, £180, £30

40-49: £2,200 - £430, £170, £200, £20

50-59: £1,960 - £450, £190, £300, £10

60-69: £1,240 - £480, £340, £370, -

70-79: £800 - £640, £1,170, £600, -

80+: £600 - £730, £1,400 - £1,270

Average: £1,220 - £510, £365, £310, £155

Kwasi Kwarteng’s first Budget will be an emergency one, not only setting out his plans for the financial year commencing on 1 April 2023, but also re-opening the budget for the current financial year. It will be dominated by the emergency support package for individuals and businesses already announced, alongside starting to deliver on Prime Minister Liz Truss’s commitments to cut taxes and ‘shrink the state’.

The new Chancellor is likely to find that cutting public spending is not going to be easy given the increasing financial commitments made by successive governments since the Second World War on education, pensions, health and social care, the areas that now dominate public spending. He supported adding to those commitments only a couple of years ago when then Prime Minister Boris Johnson decided to expand eligibility for social care, and former Chancellor Rishi Sunak re-committed to the ‘triple-lock’ that guarantees increases in the state pension every year.

As our chart this week illustrates, receipts and spending vary significantly across age groups, with spending on education higher on the young, who pay very little in taxes, and spending on pensions, health and social care much higher for older generations who contribute less than the average, especially after reaching retirement age. This contrasts with the profile for those of working age who pay the most into the system while on average taking the least out.

Derived from an analysis from the Office for Budget Responsibility’s fiscal risks and sustainability report published in July, the chart shows how – before the emergency Budget scheduled for 21 September – budgeted tax and other receipts for the current financial year 2022/23 are equivalent to £1,220 per person per month, based on forecast receipts of £988bn and a population of 67.5m. This is below budgeted public spending of £1,340 per person per month (£1,087bn/67.5m people/12 months), with the deficit of £120 per person per month (£99bn in total) funded by borrowing.

Average receipts per person per month by age group are estimated to be in the order of £150, £210, £1,150, £1,930, £2,200, £1,960, £1,240, £800 respectively for those aged 0-9, 10-19, 20-29, 30-39, 40-49, 50-59, 60-69, 70-79 and 80+ respectively. These numbers include £115 per person per month of non-tax receipts spread evenly across everyone. 

Spending on public services and interest in the order of £510 per person per month, or £550, £620, £440, £430, £430, £450, £480, £640, £730 by age group, is less variable across age groups because it much of this spending is incurred on behalf of everyone, including £125 in interest, £73 on defence and security and £53 on policing, justice and safety for example.

Spending on pensions and welfare of £365 per person per month is less evenly spread, with £290 and £320 per month spent on those in their first two decades and £440, £430, £430 and £450 on those in their twenties, thirties, forties and fifties respectively. This increases to average spending per person per month of £480, £640 and £730 on those in their sixties, seventies and eighties or over. 

Health and social care spending of £310 is biased towards older generations, with per person per month spending of £270, £110, £160, £180 and £200 for the first five decades of life contrasting with the £300, £370, £600 and £1,270 spent on average on those in their fifties, sixties, seventies and eighties or over. 

As you would expect, education spending of £155 per person per month on average is mostly spent on the young, with around £380 per person per month spent on the under-10s, £750 spent on those between 10 and 19, £110 spent on those in their twenties, and £30, £20 and £10 respectively spent on those in their thirties, forties and fifties.

The reason this chart is so critical is because demographics are not in a steady state, with the ONS projecting that there will be an additional 3.3m pensioners in 20 years’ time, a 27% increase. This will have significant cost implications for this and future governments over a period when the working-age population – who pay most of the taxes to fund public spending – is projected to grow by just 4% in total. 

While a declining birth rate might relieve some of the pressure on education spending over the next 20 years, spending on the state pension, the NHS and on social care will grow significantly if the commitments made by the current and previous governments to provide for income in retirement, universal free health care and an increasing level of social care provision are to be met, at the same time as running public services to the standard required.

Kwasi Kwarteng’s predecessors have been able to cover the expanding share of public spending going on pensions and health and social care without raising taxes above 40% of the economy by cutting spending on public services, in particular the defence budget, which has declined from in the order of 10% of GDP to around 2% over the last half century. However, with defence already at the NATO minimum, and many public services under significant pressure to improve delivery, there is much less scope to find savings than there has been in the past.

This poses a very big challenge for the Chancellor as he puts together his medium-term fiscal plans. Economic growth needs to be much higher than it has been in recent years, not only to cover the cost of tax cuts that he hopes will generate that growth, but also to generate the extra tax receipts needed to fund pensions and health and social care as more people live longer lives.

This chart was originally published by ICAEW.

ICAEW chart of the week: GCSE maths grade inflation

Our chart this week looks at the grade inflation challenge facing 16-year-olds across England as they study for their forthcoming GCSEs in the third year of the pandemic.

Chart showing GCSE results by grade for 2018, 2019, 2020 and 2021 respectively.

2018 – U (2.4%), grades 1-3 (5.4%, 8.8%, 12.7%), grades 4-6 (20.3%, 18.5%, 11.8%), grades 7-9 (9.5%, 6.9%, 3.7%)

2019 – U (2.3%), grades 1-3 (5.3%, 8.5%, 12.6%), grades 4-6 (21.1%, 18.2%, 11.4%), grades 7-9 (9.6%, 7.2%, 3.8%)

2020 – U (0.7%), grades 1-3 (4.0%, 7.3%, 11.1%), grades 4-6 (19.6%, 20.1%, 12.9%), grades 7-9 (11.0%, 7.9%, 5.4%)

2021 – U (1.1%), grades 1-3 (4.3%, 7.0%, 9.9%), grades 4-6 (18.7%, 20.3%, 12.7%), grades 7-9 (11.4%, 8.6%, 6.0%)

The ICAEW chart of the week is on the results of the General Certificate of General Education (GCSE) in mathematics for the past four years in England according to the Department for Education (DfE), illustrating how a burst of grade inflation in the pandemic poses challenges for both students and their examiners in the reinstated examinations this summer.

Maths is one of the core exam subjects taken by almost all 16-year-olds in England, with passes at grade 4 or above in both maths and English being a base requirement for most students wanting to progress onto GCSE Advanced (A level) courses and to university or a degree apprenticeship after that. It is also a prerequisite for many vocational qualifications, where good numeracy skills are often essential. 

The current grading system was adopted in 2017, with results now split into nine grades, which can be grouped into three categories of three grades each: below standard (1-3), good performance (4-6) and high performance (7-9). The four former grades of G, F, E and D were condensed into three (grades 1-3), while the old passing grade of C and the next level up of B were expanded to three, being 4 (pass), 5 (strong pass) and 6. The former high performance grades of A and A* were replaced by grades 7, 8 and 9, providing even more granularity at the top end.

The chart illustrates how before the pandemic the results in 2018 and 2019 were similar with 2.4% and 2.3% ungraded ‘U’ results respectively (which includes those who failed to turn up or who withdrew after entering), with respectively 26.9% and 26.4% of students receiving below standard grades (1-3), 50.6% and 50.7% received good performance grades (4-6), and 20.1% and 20.6% received high performance grades (7-9).

The debacle of the cancelled school examinations and regraded results in 2020, and the deliberate decision in 2021 to adopt teacher-assessed grades instead of exams, saw a significant rise in the number of higher grades awarded. There were fewer ungraded results (0.7% in 2020 and 1.1% in 2021), fewer below standard awards (22.4% and 21.2% respectively), more good performance grades (52.6% and 51.7%) and a great deal more high performance grades (24.3% and 26.0%). There was a big jump in the very top award, the so-called A**, with 6.0% of students receiving grade 9 in 2021 compared with 3.7% in 2018.

The percentage of each grade awarded by year were as follows:

2018 – U (2.4%), grades 1-3 (5.4%, 8.8%, 12.7%), grades 4-6 (20.3%, 18.5%, 11.8%), grades 7-9 (9.5%, 6.9%, 3.7%) – 535,312 entrants

2019 – U (2.3%), grades 1-3 (5.3%, 8.5%, 12.6%), grades 4-6 (21.1%, 18.2%, 11.4%), grades 7-9 (9.6%, 7.2%, 3.8%) – 554,598 entrants

2020 – U (0.7%), grades 1-3 (4.0%, 7.3%, 11.1%), grades 4-6 (19.6%, 20.1%, 12.9%), grades 7-9 (11.0%, 7.9%, 5.4%) – 571,624 entrants

2021 – U (1.1%), grades 1-3 (4.3%, 7.0%, 9.9%), grades 4-6 (18.7%, 20.3%, 12.7%), grades 7-9 (11.4%, 8.6%, 6.0%) – 584,933 entrants

The Office of Qualifications and Examinations Regulation (Ofqual), which regulates qualifications, examinations and assessments in England, has expressed a desire to return to a pre-pandemic grade profile but has acknowledged that the current cohort of GCSE students have experienced significant disruption to their education over the past two years. As a consequence, they believe it would be unfair to revert back to the previous level awards in one go and have said that they will set grade boundaries around the mid-point between the 2019 and 2021 results, subject to the normal process of moderation. 

This may seem unfair to students who can expect to be rewarded with less generous marks than their immediate predecessors given the difficulties being experienced in many schools over the past two years as they have studied for their GCSEs. There have been frequent closures and class disruptions as the coronavirus has and continues to propagate around the country. But Ofqual and the examiners are keen to avoid the grade inflation experienced over the last two years of teacher-assessed grades becoming embedded, a real prospect if they were to wait another year or two before attempting to bring grades back down towards pre-pandemic levels.

The experience of the last two years is that the ability of Ofqual and the DfE to deliver their plan will depend on events, so we will need to wait to see how well the process of sitting exams goes and how the results when they are announced are viewed by the court of public opinion.

In the meantime, we wish all the best of success to all those studying for their GCSEs this summer in England, as well as to their compatriots sitting equivalent exams in Wales, Scotland and Northern Ireland.

ICAEW chart of the week: School-age demographic change

This week’s chart illustrates how the number of 10 year-olds in the UK is expected to fall sharply over the rest of the decade, just as the number of 18 year-olds is expected to peak in 2030.

School-age children

10 year-olds

2022: 855,000
2023: 831,000
2024: 813,000 
2025: 807,000
2026: 808,000
2027: 783,000
2028: 759,000
2029: 730,000
2030: 702,000

18 year-olds

2022: 741,000 
2023: 752,000
2024: 781,000
2025: 797,000
2026: 824,000
2027: 817,000
2028: 826,000
2029: 841,000
2030: 855,000

The Office for National Statistics UK Population Estimate for July 2020 reports that there were 855,000 children in the cohort who will be 10 years old next year when most of them will be entering their final year of primary school. A falling birth rate since 2012 means that the numbers of 10-year-olds will fall by 18% over the following eight years to 702,000 in 2030, with a consequent drop in the number of primary school places that will be needed in the coming decade: 

  • 2022: 855,000 10 year-olds
  • 2023: 831,000
  • 2024: 813,000 
  • 2025: 807,000
  • 2026: 808,000
  • 2027: 783,000
  • 2028: 759,000
  • 2029: 730,000
  • 2030: 702,000

At the same time, the number of 18 year-olds will grow significantly reaching a peak in 2030 when that cohort of 855,000 will be 18, 15% more than the 741,000 of 18 year-olds in 2022. 

  • 2022: 741,000 18 year-olds 
  • 2023: 752,000
  • 2024: 781,000
  • 2025: 797,000
  • 2026: 824,000
  • 2027: 817,000
  • 2028: 826,000
  • 2029: 841,000
  • 2030: 855,000

The chart was prepared using the numbers of children estimated to be in the UK in 2020 adjusted for time growing up, but without adjustment for migration or the (fortunately) relatively small number of deaths that would be expected to occur over the course of the decade. 

Prior to Brexit and the pandemic, there was a net inflow of around 5,000 a year adding to each age group which, if repeated, would have the effect of reducing the rate of decline in 10 year-olds and increasing the size of the peak in 18 year-olds in 2030. However, with migration potentially having gone into reverse during the pandemic, it is unclear whether net immigration will be as high as it was before.

Either way, one of the first orders of business for new Education Secretary Nadhim Zahawi will be to review the plans to reduce primary school and expand secondary school provision over the next few years, as well as addressing the pressure there will be on universities, colleges and apprenticeships as the bulge of births in the mid-noughties flows through the education system over the coming decade.

This chart was originally published by ICAEW.