The Spring Statement and the School Condition Allocation: a year of continuation but changes ahead?
Last week’s Spring Statement offered little new information for those interested in capital spending on school buildings. However, a worsening fiscal outlook and global political uncertainties raise questions about the affordability of future spending increases. Given the planned 19% uplift in capital education spending for 2025-26, announced in the Autumn Budget, the lack of further updates ahead of the June Spending Review is unsurprising.
While schools were not specifically mentioned in the Spring Statement, the Institute for Fiscal Studies (IFS) has warned that schools should expect spending cuts from 2025 onwards (Schools Week analysis). The consequences for capital investment remain unclear—though planned spending for 2025-26 is higher than previously expected, real-term cuts to overall capital spending are projected from 2028.
Greater clarity is expected following the June Spending Review, where the government will outline its plans for spending and key public sector reforms. While we await further details, here is what we currently know about school maintenance funding and 2025-26 allocations.
Condition and Maintenance Funding
The Department for Education (DfE) has indicated that maintaining school estates will take priority over large rebuilding projects—likely out of fiscal necessity. This continues the previous administration’s focus on proactive maintenance, though past efforts were often undermined by a lack of available capital.
The Autumn Budget (October 2024) saw an increase in capital education funding, with school maintenance funding rising to £2.1 billion, a £300 million increase from the previous year. However, it remains uncertain whether this additional funding will be sustained or expanded, as potential changes in the maintenance funding system are being considered.
2025-26 School Condition Allocation (SCA)
Recently published DfE figures show that this year’s additional funding will be distributed through increases in the School Condition Allocation (SCA), an annual fund awarded to responsible bodies for maintaining school buildings. Key updates include:
Total SCA funding has increased by 15%, although allocation varies by responsible body type.
Large multi-academy trusts (MATs)—which receive their condition allocation directly—saw an 29% funding increase. This will be driven in part by the funding increase and by more academies and MATs being large enough to receive their funding by formulaic allocation. This group has seen a 13% rise in the number of schools and 53 more academy trusts since last year.
While the overall group of MATs has seen the largest increase, at an individual trust level there are significant variations. Among MATs that received SCA last year, 45% received increases of 5–30%, while 9% have relatively flat budgets (0–5% increases), and 16% have had funding reductions.
Local authority-maintained schools and smaller academies eligible for the Condition Improvement Fund (CIF) saw a 5% decline in school numbers compared to last year. Consequently, SCA allocations for LA-maintained schools increased by 11%, while the total CIF funding grew by 5%. Reflecting reductions in school numbers offset by the additional funding increase.
For the group eligible for CIF, the total amount of SCA available, £467 million, will have a significant impact as it will determine how many projects and schools are likely to receive funding this year (see further details below). This is a group of over 4,000 schools and colleges must bid for their share of SCA through CIF. Following increasing inflationary pressures in recent years, fewer schools and projects are being funded, with priority going to only the most urgent of building condition needs.
Condition Improvement Fund (CIF)
Provisional figures for 2025-26 indicate that CIF funding will rise to £467 million, a 5% increase from 2024-25 but £7 million lower than 2023-24. Last year saw the lowest number of successful CIF applications on record, with only 866 projects and 733 academies receiving funding, plus a further 30 schools and 31 projects on appeal. Given these trends, the modest funding increase is unlikely to significantly improve success rates.
Based on previous rounds, we can anticipate that approximately 20% of CIF-eligible institutions are likely to receive funding this year. The continued focus on urgent projects for CIF applications raises questions about the ability of these schools to strategically manage their estates and proactively maintain their buildings.
CIF results are expected in May, and given the tight budget, further calls for investment are likely once results are announced.
Review of Maintenance Funding
The DfE has confirmed that it is reviewing the school maintenance funding system, particularly CIF. Potential changes are expected from 2026-27, with further updates likely following the June Spending Review.
Given the competitive nature of CIF, eligible institutions typically begin preparing applications as soon as the previous year’s results are announced. We hope the government will provide early visibility into any changes, allowing schools sufficient time to adjust.
For an in-depth look at the current maintenance system and implications of changing it, refer to our recent insight piece.
Allocations for ‘Urgent Capital Funding’
The provisional SCA figures include a new £38 million allocation for urgent capital funding. While schools have always been able to apply for urgent capital support, this is the first time a dedicated funding amount has been publicly outlined. Its inclusion reflects the DfE’s effort to manage budgets proactively while recognising that an aging school estate may require unforeseen maintenance investment.
Looking Ahead
This financial year largely continues the previous government’s approach as we await further clarity on systemic changes and future funding levels.
The increase in maintenance funding is welcome but may have limited impact when spread across all responsible bodies. This is particularly true for CIF-eligible institutions, many of which may not receive funding at all.
The DfE’s review of maintenance funding is a positive step, signalling a commitment to long-term improvement. However, addressing the challenges of an aging school estate will require strategic and innovative policy decisions, particularly in the face of funding constraints. We look forward to further details on the government's revised approach in the coming months.
What Can We Do While We Wait?
To drive the most value from capital projects, academy trusts, schools and colleges should ensure they have a strategic understanding of their estate before undertaking significant capital works.
Key steps include:
Keeping condition surveys up to date
Understanding building capacity and space utilisation
Identifying opportunities to improve thermal and energy efficiency
Together this will inform a clear estate vision and roadmap to prioritise capital funding
These proactive measures will help to optimise existing capital and prepare for future funding opportunities.
S2e have over a decade of experience working with multi-academy trusts, schools and colleges to help them strategically manage their estates, to deliver the best value and most effective solutions.
For more information on how our team of education estate and energy experts can assist, please get in touch on 0116 5070130 or email enquire@s2e.org.uk.
