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Schools could lose over £1 billion in funding by 2030 due to falling pupil numbers, according to new analysis by the Education Policy Institute.

Real term funding increases during the rest of this decade could still lead to cuts in school budgets due to ‘significant’ falls in the number of children in both primary and secondary schools in England, which the EPI said is one of the key challenges facing any government over the next decade.

Funding in schools in England is allocated on a per pupil basis, which means that without changes to the way schools are funding, many will see a drop in the amount of funding they receive, which the EPI warns could lead to schools merging or closing completely.

The EPI report highlights that as pupil numbers fall, ‘many schools will see their budgets contract as a result’, but that reductions in class sizes do not lead to the same proportional decreases in staffing costs, school supplies, energy bills, and the other day-to-day costs of running a school.

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