Preparation for the Autumn Budget: A recap of commitments to education made in the Spending Review
As speculation builds over how the Chancellor Rachel Reeves will meet her fiscal rules in the upcoming Autumn Budget, we take a look at recent commitments made to the education sector, with a particular focus on capital spending.
When schools were preparing to break up for the summer, the government published its Spending Review (SR), setting out department budgets up to 2028/29 for day-to-day spending and up to 2029-30 for investment. While no radical shifts in education capital funding were announced, the SR confirmed a series of policies and commitments that indicate the approach of the Department for Education (DfE) towards the school estate in the coming years.
The Spending Review (SR) – 11 June 2025
What is the overall outlook for education?
The Institute for Fiscal Studies (IFS) described schools as “relative winners” in the SR, with core school budgets set to rise by £4.2 billion in cash terms and average per-pupil growth of 1.1% a year in real terms.
But the IFS also warned that rising SEND costs, staff pressures, and falling pupil numbers mean “the next few years are going to feel very tight for school budgets and forecasting anything more than a real-terms freeze is highly optimistic.”
Key education policies in the SR
Breakfast clubs to every primary-aged child in England, with 750 schools already piloting the scheme.
Free school meals extended to all children with parents receiving Universal Credit.
Expanded childcare: from September, eligible families with children aged 9 months–3 years qualify for 30 hours’ free childcare.
£370 million over four years for more school-based nurseries.
SEND system reform, with details to follow in the schools white paper this autumn.
Expansion of the Family Hubs programme.
Recommitment to recruit 6,500 teachers during this Parliament
An addition £1.2 billion invested in post- 16 and skills by 2028-29.
What did the SR say about education capital spending?
The SR commits over £31 billion of education capital investment from 2026–27 to 2029–30, an average real-terms increase of 1.4% a year from 2023–24.
This avoids the cuts previously pencilled in for capital spending, but the Institute for Government notes that education’s uplift is small compared to defence and energy/net zero—where budgets will rise by 48% and 140% between 2023–24 and 2029–30 respectively.
Confirmed commitments include:
£2.4 billion per year for the School Rebuilding Programme, recommitting to rebuilding the 500 schools already selected, with expansion to be set out in the forthcoming 10-Year Infrastructure Strategy.
Rising maintenance funding, increasing with inflation to £2.3 billion by 2029–30—£400m higher than in 2024–25.
£370 million over four years for new school-based nurseries.
£2.6 billion (2026–27 to 2029–30) for mainstream school places to meet demographic demand.
Net Zero commitments
The SR reaffirmed the UK’s legally binding target to reach net zero by 2050. Energy and Net Zero were clear winners, with more than £8.3 billion channelled into clean power via the newly created Great British Energy and Great British Energy–Nuclear.
This marks a shift away from the now-cancelled Public Sector Decarbonisation Scheme (PSDS), which schools had previously accessed. In its place, Great British Energy has so far pledged to install solar panels on 200 schools.
What can we learn about education capital spending based on the SR?
Moderate growth, not transformation. Education capital budgets will rise, but not at the scale of past programmes such as Building Schools for the Future.
Continuity in funding models. The School Rebuilding Programme (SRP) and maintenance uplifts remain the main vehicles for investment in the school estate.
Maintenance challenges remain. Funding will rise to £2.3bn by 2029–30, but the distribution method (particularly the Condition Improvement Fund accessed by 20% of schools) still prevents long-term estate planning. We continue to wait for further information as to whether there is likely to be wider reform of the maintenance funding system. See here for our previous analysis.
Early years are a priority. Childcare expansion, breakfast clubs, and nursery capital funding signal sustained focus on the early years.
Post-16 and skills. While £1.2bn of additional revenue is promised, no new capital investment is announced—more detail for the future for post-16 is expected in the upcoming white paper.
SEND reform is pending. No new capital allocations have followed since the £740m announced in December 2024. Details of SEND system reform are expected in the schools white paper this autumn.
Energy and net zero is a clear winner for capital spending, however it is unclear whether this will significantly benefit the school estate. While the PSDS had its challenges for the education sector, its cancellation raises the question how the government expects the public estate to fund its decarbonisation to meet its legally binding carbon targets.
Final thought
Education has avoided cuts and secured moderate capital growth, but there is little sign of the transformational investment once seen in school building programmes. While this is not unexpected given the current fiscal situation, moderate increases in spending are unlikely to make a significant difference without re-thinking how rebuilding programmes can benefit more than 2.5% of schools over the next decade and beyond.
With early years expansion taking centre stage, and skills and SEND reform still awaiting detail, the Autumn Budget will be the key test of whether current commitments hold—and whether schools will see further support from Great British Energy.
If you’d like to discuss what the Spending Review means for your school estate, or explore how to plan, fund or deliver capital projects more effectively, get in touch with our team on 0116 5070130 or email enquire@s2e.org.uk.
