The long-term costs of underfunded education

This article was originally published in Tes | 29 November 2025

With so many sectors under immense pressure – driven by spiralling costs in a time of stagnant economic growth – it's no surprise that each new budget pits government departments against each other for their share of limited funding.

But when the Treasury fails to properly fund education, it effectively guarantees it will be unable to solve the other profound challenges facing Britain. While investment in libraries and playgrounds is certainly important – and the scrapping of the two-child benefit limit is welcome news for families across the country – the lack of focus on education in this year’s budget is a worrying sign that the government may be repeating past mistakes.

After all, we have already seen what happens when we underfund education.

When the pandemic hit and schools largely closed, we knew a comprehensive recovery plan would be essential to mitigate the damage. Instead, the Treasury funded only a fraction of a proposed £15bn pandemic catch-up plan – risking financial short-sightedness that cost us in the long-term.

Now, the scars of the pandemic have become entrenched, with devastating consequences for young people’s futures and for our economy.

Lost learning has soared since the pandemic, with 34 million days lost to absence and suspensions last year, up from 19 million pre-pandemic. Social, emotional, and mental health needs are increasing, and many now label school as a key source of anxiety.

Challenges are particularly acute for young people from disadvantaged backgrounds, who are twice as likely to be persistently absent, four times more likely to be suspended, and 40% less likely to achieve good GCSEs (an attainment gap which has remained stubbornly high). While wealthier parents can fill the gaps with private tutoring, and mental health support, and have more resources to navigate EHCPs, many families lack the means or networks.

Crucially, these costs do not stop at the school gate. School engagement and attainment are closely linked to employment outcomes, with strong educational qualifications the single greatest protective factor against unemployment in adulthood.

Post-pandemic, we’ve seen a surge in young people not in education, employment, or training (NEET), driven largely by those whose education was disrupted during Covid. Impetus' new analysis shows that this rise in NEET rates has cost the economy £20bn in lost GDP with more to come in future – far more than the £13bn “saved” by refusing to fund a pandemic recovery.

All the while, schools remain stretched thin, facing the impossible task of overcoming the scars left by the pandemic, but without the funding or support recovery requires.

The pandemic laid bare the costs of making education a low priority for the Treasury, but it also showed us what is possible when the government rallies to face an existential challenge. Let's be clear: that is what our schools are facing now.

The National Tutoring Programme was far from perfect, but it was a significant achievement in a very short time that offers crucial lessons. Tutoring is one of the best-evidenced interventions for raising attainment, but it should never have been the only pillar of recovery. Its impact waned in its second year when the government removed its target on the disadvantaged young people who were hardest hit.

So, where do we go from here? Education recovery funding may have ended, but the effects of the pandemic on young people certainly have not. The response must be holistic, addressing social and emotional learning, mental health, attendance, and attainment together – deeply interconnected issues that cannot be solved in isolation.

It will require a complex web of support, targeting young people facing the highest barriers and prioritising evidence-backed solutions. Impetus’ own research indicates that targeted tutoring, whole-school inclusion to meet needs, a revitalisation of enrichment options, and the rebuilding of trusted relationships in school are all evidence-backed pathways to improve engagement and attainment. We must also provide longer-term bridging support to guide pupils from school into post-16 education or employment.

This is a major undertaking, and it will not come cheap. The pandemic was a major national crisis requiring an equally major response. Now, the school attendance crisis and high NEET rates are the culmination of years of mounting pressure, demanding an equally significant response. We simply cannot afford not to act.