Local authorities have an important role in supporting the education system and are working hard to minimise the potential impact of fewer pupils on school budgets and standards across London.

There is a predicted 7.6% decrease in reception pupil numbers across London from 2022-23 to 2026-27 which translates to a decline of 96,424 to 89,121 pupils over this period. This is roughly the equivalent of a decrease of 243 classes of children.

London’s birth rate is the main reason for the decrease in demand for school places. Between 2012-2021 there has been a 17% decrease of the birth rate in London, which is a reduction of 23,225 live births across the capital. While it is common for London’s birth rate to fluctuate, it is having and will continue to have an impact on demand for reception places which schools, boroughs and DfE will need to manage together.

However, there are other factors at play which are also affected the number of applications for reception places in London. Boroughs are also experiencing shifts in their local child population as a result of families leaving London during the Covid-19 pandemic and following Brexit.

The decrease in reception places has the potential to impact funding of individual schools as the majority of school revenue funding is allocated on a per pupil basis. Therefore, a decrease in pupil numbers means a decrease in the funding a school receives. Many primary schools in London are already struggling to balance budgets this academic year due to a combination of factors, including inflationary price increases, and a shortage of teaching and support staff, which has led to an increased spend on more expensive agency staff.

The reduction in school finances means that schools will have to make further difficult decisions to balance their budgets. This could be reducing the number of teaching and support staff or narrowing the curriculum offer and extracurricular opportunities which could have an impact on school standards. In some cases, school leaders and local authority leaders will have to make difficult decisions to merge or close schools.

Boroughs are working closely with schools across London, with Government and with education services to share best practice and information to minimise the impact of the reduction in demand for school paces. This includes where schools have had success in managing surplus places, balancing budgets, or managing school mergers or closures.

The report from London Councils highlights that Government must ensure school funding levels keep up with inflationary increases, which will help schools to be more resilient in the face of changing demand patterns.  It also asks Government to work with local authorities and schools to promote more inclusion in schools to enable more children with SEND to access mainstream school places.

London boroughs also want to work with Government to achieve a stronger framework to tackle this challenge effectively. One suggestion is to give local authorities the power to manage an academy’s closure or the reduction of the maximum number of pupils they can admit to each year group where there is clear evidence locally of a significant drop in demand and a need to act to ensure that a school remains financially viable.

Cllr Ian Edwards, London Councils’ Executive Member for Children and Young People, said:

“London boroughs are working closely with schools experiencing decreasing demand for school places to achieve the best for young Londoners. London still has the best performing schools in the country and it is vital we ensure our schools thrive in this difficult climate and most importantly, that children achieve the best outcomes.

“Schools are having to make very difficult decisions about how to balance budgets as a result of this drop in school places and local authorities will support them through this process. London Councils will work closely with key education partners in London including government, to mitigate the impact of this drop in demand for school places and to establish an effective framework to meet this challenge going forwards.”