Children from poor backgrounds in England now have more spent on their education than those from better-off families, in what experts called a “remarkable shift” that has closed the long-term gap in government spending.

Research by the Institute for Fiscal Studies (IFS) found that, since the start of the millennium, government policies and changing attitudes have transformed how much children from different social classes receive in state spending on their formal education, from primary school through to university.

According to the IFS, the turnaround is mainly due to the rise in the school-leaving age from 16 to 18, as well as the additional school funding, which began under Labour, targeted at disadvantaged areas and children. The rising proportion of children from poorer families going to college and university for the first time is also a factor, it said.

“In less than a decade over the 2000s, education spending shifted from being skewed towards richer pupils to being skewed towards poorer pupils instead,” said Luke Sibieta, IFS researcher and co-author of the report.

“This is a remarkable shift in the shape of public spending, with an increasing amount of redistribution taking place through public service spending.

“In more recent years, these changes will have been partly counterbalanced by reductions in welfare spending and children’s services. Nevertheless, the empirical evidence suggests that focusing more education spending on poorer pupils should lead to substantial improvements in their life chances.”

Prof Simon Burgess, a specialist in the economics of education at the University of Bristol, agreed that the shift in funding was remarkable.

“In fact, stripping out higher education spending, expenditure in schools and colleges is significantly higher on the poorest students. This matches up well with a recent OECD report showing that the education system in England is fairer than those of most of our European neighbours,” Burgess said.

“It is a very impressive and commendable achievement from the final seven years of the last Labour government that differences in state spending in schools are so pro-poor.”

The IFS looked in detail at how the gap in funding shrank after 2003, when those from the richest families received nearly £6,000 more in state spending on education than those in the poorest 20%.

But by the time the cohort of pupils sat GCSE exams in 2010, the gap had disappeared so that students from both groups were receiving £73,000 in total funding across all stages of education.

Substantial boosts in school spending, notably under Labour until 2010, shrank the gap despite richer pupils being substantially more likely to go on to higher education.

“Policies such as the pupil premium and further narrowing of socioeconomic gaps in higher education participation mean that education spending is now likely to be skewed towards poorer pupils,” the IFS said.

But the researchers warned that abolishing university tuition fees could reverse some of the gains, tipping funding back towards the wealthiest.

“Pupils from richer families would benefit more from the abolition of tuition fees, which again results from the fact that they are more likely to go to higher education,” the report concluded.

“We find that pupils in the richest quintile [fifth] would benefit by more than twice as much from such an abolition as those in the poorest quintile.”

The researchers included only government spending on education and not family spending on private tuition or independent school fees.

Jonathan Simons, an education policy commentator and former government adviser, said: “This is quite a remarkable report and vindicates the approach of both Michael Gove and also the previous Blair and Brown governments.

“The combination of deprivation funding – including the pupil premium – and the increase of higher education participation over the 2000s, has been shown to be unequivocally ‘pro-poor’.”

Kevan Collins, chief executive of the Education Endowment Foundation, said young people from poor backgrounds still needed additional funding because they remained less likely to gain the qualifications and skills needed.

“There is no denying that progress on closing the educational gaps between rich and poor is slower than many of us would like. But there has been progress, achieved against a challenging backdrop of public sector austerity and an arms race of education spending among better-off parents,” Collins said.

Damian Hinds, the education secretary, said the government’s pupil premium – which directly targets school funding at pupils on free school meals – provided an extra £2.4bn a year, while children from disadvantaged families were now entering university at record rates.

“These are important first steps but it is the only the beginning,” he said.



