Reflections on the Autumn Budget 2025 and what it means for the school estate
Last week’s highly anticipated Autumn Budget committed to immediate increases in public spending, funded by higher planned taxation toward the end of the spending period. According to the Institute for Fiscal Studies, the package includes a total of 75 new measures and is set to raise an additional £26 billion.
Despite being another significant revenue-raising budget it contained few new announcements for the education sector. Instead, it largely reiterated plans already outlined in the Spending Review 2025 and the Infrastructure Strategy both released in June.
Announcements on future funding for Special Educational Needs and Disabilities (SEND) and the removal of the two-child benefit cap will influence the sector, but overall, the Budget primarily reinforced the government’s existing priorities for education. The analysis below summarises the key implications for the sector, with a particular focus on the school estate and capital investment.
1. SEND reform
The Chancellor confirmed that details of long-awaited SEND reform will be set out early next year in the Schools White Paper. Acknowledging the financial pressures of rising SEND costs on local authorities, the Budget confirmed that from 2028–29 the government will assume responsibility for SEND funding, removing the expectation that councils meet escalating costs from general funds.
In the meantime, the Dedicated Schools Grant Statutory Override has been extended until 2027–28. This temporary financial mechanism allows SEND deficits to sit off local authority balance sheets, preventing many councils from issuing Section 114 notices. While centralising future funding responsibility is welcomed, significant concerns remain about how existing deficits will be addressed and what the transfer of responsibility to the Department for Education (DfE) may mean for the wider schools’ budget. The Office for Budget Responsibility (OBR) have highlighted a current funding gap in the budget which will either need to be funded from elsewhere or significant costs savings made.
Although the government allocated £740 million for local authorities to expand SEND provision in 2025-26, future capital allocations remain unclear. It is also notable that although high-needs capital funding for 2025-26 was significantly higher than 2024-25, it has previously exceeded £1 billion, peaking in 2022–23.
2. Tackling child poverty and the cost of living
One of the most consequential new measures was the removal of the two-child benefit limit, estimated to lift 450,000 children out of poverty. While political considerations may have contributed to this decision, it also supports the government’s wider mission to “break down barriers to opportunity.” The measure complements earlier announcements, including:
A national roll-out of breakfast clubs, with 2,000 schools joining the scheme in 2026–27, funded by £80 million.
Extending free school meal eligibility to all pupils in England whose parents receive Universal Credit.
New legislation limiting the number of compulsory items schools can require, reducing the cost of school uniforms.
3. Capital spending protected
The government continues to prioritise higher capital spending to improve under-invested public estates and support productivity and growth. Despite pressure on the public finances, the additional £120 billion in capital investment announced in the Autumn Budget 2024, enabled by changes to fiscal rules, has been protected.
As the detail on how this investment will be allocated has already been published, the Budget mainly reiterated commitments set out in the June Spending Review and the 10-Year Infrastructure Strategy. These include expanding the School Rebuilding Programme (SRP), with around £20 billion committed to completing the 500 schools currently in the programme and delivering an additional 250 schools by 2035.
Additional context:
While this approach avoids the deep cuts planned by the previous government, the uplift for the education estate is modest compared with increases for other departments, even though schools account for 49.4% of the government’s total floor area. Given the ageing condition of the estate and ongoing structural risks, it is crucial that available capital is deployed efficiently. Despite this, the expansion of the SRP increases the proportion of schools able to access the programme by only around 1%.
4. Reviews into strategic assets and value for money
The Chancellor announced several cross-government reviews to inform the next Spending Review, including:
A strategic asset review to identify potential savings ahead of 2027.
A review of value for money across government spending, led by the Chief Secretary to the Treasury, focusing on the NHS, healthcare, and maintenance of public assets to build evidence and identify solutions.
Additional context:
These reviews reflect a growing move toward standardising estate and asset management across government. This approach is evident in the newly formed National Infrastructure and Service Transformation Authority (NISTA) and the 10-Year Infrastructure Strategy, which commits £725 billion over the next decade to coordinated public–private infrastructure planning.
With a requirement for all departments to adopt unified 10-year strategic maintenance plans by 2027, it remains unclear how responsibilities will be divided between the centre, regional bodies, and individual responsible institutions. While the Infrastructure Strategy sets out a high-level framework and overall budgets, further clarity for the school estate is expected in the upcoming DfE estate strategy.
5. Early years
The Budget reiterated commitments in the Giving Every Child the Best Start in Life strategy, a core pillar of the government’s “Plan for Change.” Key measures include:
£400 million for school-based nurseries, supporting early intervention and expansion of childcare entitlements. Phase 2 applications (worth £45 million) are now open to eligible schools, and over £300 million is expected for multi-year local authority proposals in phase 3.
£500 million for local authorities to deliver up to 1,000 Best Start Family Hubs by 2028, supporting parenting and contributing to the government’s goal of 75% of children meeting early learning goals at age 5.
A forthcoming DfE-led review of childcare provision, aimed at simplifying the system.
Other areas of note
£5 million for state-funded secondary schools to buy library books in 2026–27 as part of the National Year of Reading.
Funding to refurbish up to 200 playgrounds in England, part of the Pride in Place initiative.
Only a brief reference to the Post-16 Education and Skills White Paper released in October.
Housing and planning: The government’s target of 1.5 million new homes by the end of the Parliament could significantly affect demand for new school places. Planning reforms may also reshape delivery models for new and existing educational infrastructure.
Decarbonisation funding gap: Following the cancellation of the Low Carbon Skills Fund and Public Sector Decarbonisation Scheme in June’s Spending Review, there is still no clarity on how the education sector will meet the requirement to reduce emissions by 75% by 2037. The government may consider Public-Private Partnerships (PPPs), which it plans to pilot with the NHS, as a potential route for financing decarbonisation.
Conclusion
Overall, the Autumn Budget 2025 offers limited new announcements for education but provides clear indications of the government’s priorities including a focus on early years and SEND reform. Although long-term infrastructure planning and the protection of capital budgets are welcome, further clarity is needed on how these commitments will be implemented across the education sector to ensure funding is used effectively and delivers the greatest possible impact across the school estate. The guidance and policy documents expected over the coming year, including the Schools White Paper and the forthcoming DfE estate strategy, will be pivotal in determining how well the estate can be supported, modernised, and equipped to meet future demand.
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