What the Spending Review 2025 Means for School Budgets

The government’s Spending Review 2025 sets out long-term investment priorities through to 2029-30, with some significant announcements for schools, MATs, and the wider education sector. At School Business Services, we’ve reviewed the full document and pulled together the key takeaways and what they mean for your budget planning over the next few years.

A Real Terms Increase for Schools – But Pressures Remain

The headline is a £2 billion real terms increase to the core schools budget over the Spending Review period. This equates to a £4.7 billion cash increase per year by 2028-29, representing 1.1% real terms growth per pupil, per year.

While any uplift is welcome, we know that inflation, pay awards, and rising service costs mean that many schools will still face difficult decisions. This modest growth in per-pupil funding may not keep pace with the increasing expectations around delivery and inclusion - particularly as new initiatives come online.

School Rebuilding and Maintenance

The government has reaffirmed its commitment to rebuild over 500 schools, allocating around £2.4 billion annually for the next four years. There’s also a promise to extend the School Rebuilding Programme to 2034-35 as part of the upcoming 10-Year Infrastructure Strategy.

Maintenance budgets will rise too, reaching £2.3 billion by 2029-30 - an increase of over £400 million per year compared to 2024-25. Schools and Trusts will need to ensure their estates strategies are up to date to access and plan for this funding effectively.

Free School Meals & Child Poverty Measures

One of the most impactful policies announced is the expansion of Free School Meal eligibility to all pupils in England whose parents receive Universal Credit. This will be supported by £410 million per year by 2028-29, with an additional £80 million per year for early years and post-16 settings.

SBS recommends schools begin modelling how this may affect meal uptake, staffing and kitchen resources. For some schools, this may also bring eligibility for additional funding streams.

SEND and Social Care Reforms

The Spending Review commits £547 million in 2026-27 and £213 million in 2027-28 to reforming the Special Educational Needs and Disabilities (SEND) system, with a white paper due in the autumn. A further £555 million is allocated to children’s social care reform, aiming to keep more children with their families.

While this promises a more inclusive system, it may also reshape local authority funding arrangements and impact EHCP provision. MATs should prepare for potential shifts in funding formulas and increased expectations around in-house inclusion support.

Breakfast Clubs, Nurseries and Family Hubs

The government plans to roll out free breakfast clubs for all primary-aged children, starting with 750 Early Adopter schools. There's also nearly £370 million across four years for school-based nurseries and continued support for Family Hubs.

Youth Investment and Mental Health

Final Thoughts: Planning Ahead

At SBS, we welcome the increased investment into the school system - especially the long-term commitments to rebuilding, SEND reform, and expanded entitlements. But we also understand that for many of our schools and Trusts, pressures on core budgets remain real and immediate.

With new programmes and funding streams emerging, now is the time to:

• Review your three-year financial forecasts
• Model the impact of policy changes, especially around FSM and SEND
• Update your capital strategy to make the most of estate funding
• Ensure staffing and resource planning aligns with extended responsibilities

We’re here to support you in interpreting the detail, updating your SBS Financial Planner forecasts, and helping you stay ahead of national changes.

Need support reviewing your strategy or stress-testing your budget in light of these changes?

Contact us today to speak to your SBS finance consultant or request a demo of our MAT-led budgeting software.