Lessons in retention: Hidden cost of the teacher retention crisis

Our ‘School Budget Crisis Report’ has revealed the hidden cost of the teacher retention crisis, finding that in the last two academic years, spending on supply teachers has increased at a higher rate than spending on full-time equivalent teachers.

The growing reliance on short-term staffing solutions highlights the immense financial pressure schools are under, with the widening gap between supply and FTE teacher spending particularly during ongoing recruitment challenges across the sector.

Teacher shortages remain a critical issue as recruitment figures fall far below government targets. In the 2023-2024 academic year, overall secondary school recruitment reached just 50% of its target, while 10 out of 17 secondary subjects are forecasted to under-recruit this year.

This comes at a time when GCSE resit figures reveal over a quarter of students failed to achieve a passing grade for core subjects in last year’s exam period, with 40% of students required to resit GCSE Maths while 38% needed to resit GCSE English.  

At the same time, teacher retention rates are declining, with excessive workloads (90%), lack of school funding (78%), salary dissatisfaction (56%), and increasing pupil behaviour issues (52%) cited as key reasons why teachers and leaders are considering leaving the state education sector.  

Adding to this challenge, mental health concerns among educators are also escalating, further impacting schools’ ability to maintain stable staffing in the long term. Our recent data shows that ‘mental health or related’ is now the leading reason for sickness leave, accounting for a higher proportion of absences year-on-year.

With many schools facing tougher financial and HR choices year after year, staff shortages and rising costs threaten the long-term viability and quality of the education system in the UK.

Reviewing over 900 state-funded schools in England, the report has identified trends in funding for FTE teachers, regional disparities in SEN funding, and how reliance on supply teachers has grown between the academic years 2022-2023 and 2023-2024.

During this period, budget expenditure notably increased, reflecting trends in spending on supply teachers, FTE teachers, and education support staff, as well as year-on-year changes in the overall distribution of the budget.

Supply Teacher Expenditure

The data reveals dramatic increases in spending on supply teachers across schools in England, indicating the widespread impact the ongoing teacher retention crisis is having on schools' finances.

The West Midlands stands out as the region with the most dramatic increase in expenditure on supply teachers, with spending rising by 118% within one academic year. With total costs rising to over £10 million, this indicates that schools in the region may be facing a huge financial strain.

However, every region in England saw a notable rise in supply teacher expenditure. The South East and Yorkshire round out the top three regions, with notable increases of 26% and 20%, respectively. In the South East, spending rose from £12.36 million to £15.61 million, while Yorkshire saw supply teacher costs climb from £9.39 million to £11.29 million.

Combined with the West Midlands, these three regions account for the largest increases in supply teacher expenditure, totalling £37.50 million in the 2023-2024 academic year. This concentration of growth may indicate the areas the teacher retention crisis is particularly affecting.

The South West and East Midlands also saw a sizable increase in expenditure year-on-year, rising by 18% and 15% respectively, while London had a more modest rise of 14%.  

Meanwhile in the North West, expenditure edged up from £16.22 million to £16.83 million, representing a smaller increase of 4%, while the East of England saw an even smaller rise of 3% with expenditure reaching £5.42 million. Though less dramatic, these upticks still indicate a nationwide trend of reliance on supply teachers, which appears to be impacting budgets year-on-year. 

FTE Teacher Expenditure

While the West Midlands observed the biggest increase in expenditure for supply teachers, it also had the highest increase in expenditure on FTE teachers - with spending up by 90% within the academic year to exceed £229 million.

This is more than triple the increase seen in the South East, the next highest region, which experienced a 24% rise, while the South West observed a smaller rise of 12%.

Elsewhere, the North East and Yorkshire regions observed similar increases of 9%, while expenditure in the North West and East of England both rose by 6%.

East Midlands and London saw the smallest increases in England overall, with expenditure on FTE teachers rising marginally by 5%.

These figures come amid the worsening teacher retention crisis, with data finding there were more than six teaching posts in every 1,000 left unfilled last year, which was double the vacancy rate recorded before the Covid pandemic in 2020.

Meanwhile, the government is facing a “now or never moment” to hit its recruitment target of 6,500 new teachers in England by the end of the school term, with recent analysis suggesting more funding from the summer’s spending review will be key to achieving the target.  

With 90% of teachers considering leaving teaching in 2023/2024 due to high workloads and worsening pupil behaviour, the latest forecast suggests only five subjects for the 2025/2026 school year have a reasonable chance of recruiting at or above target.

These findings reflect the urgent need for school decision-makers to investigate present barriers in retention and recruitment, and make the move to smarter, integrated HR software bundles to simplify school operations.

By reducing administrative pressures and tracking staff absences more effectively, these tools can identify key trends that enable schools to intervene early and provide targeted teacher wellbeing and retention support - to help redefine staff engagement, recruitment, and development across the industry.

Education Support Staff Expenditure

Alongside sharp increases in spending on FTE and supply teachers, education support staff expenditure also saw significant growth across England.

The West Midlands not only saw the biggest rise in expenditure for supply and FTE teachers but also far outpaced all other regions on spending on education support staff, surging by 92% by the next academic year to exceed £67 million.  

Expenditure on education support staff also rose in the South East (29%), while the East Midlands followed with a 21% increase. The North West observed a 14% rise, while Yorkshire and the East of England both saw a 13% increase in spending.    

London recorded a 10% increase, followed by a 9% rise in the South West. Meanwhile, the North East had the smallest increase across England, with expenditure on education support staff rising by just 4%.

The significant rise in education support staff expenditure across all regions points to an increasing need for roles such as classroom assistants, SEND support, and administrative staff to manage student outcomes and streamline support amid ongoing staff sickness and retention.  

Education support staff are also feeling the brunt of the teacher retention crisis, after a survey of support staff revealed that their workloads have dramatically increased since the pandemic, with two-thirds working more unpaid hours each week.

This comes as the School Support Staff Negotiating Body (SSSNB) is set to be reinstated through the Employment Rights Bill, as a key part of the Labour government’s plan to re-establish teaching as an attractive profession, ease workload pressures, and improve flexible working for staff.

Allocation of Education Budget

The data also shows a significant change in how school budgets are being distributed overall, reflecting a shift across key analysed categories.

The West Midlands had the most dramatic increase in budget distribution for supply teachers, rising by 11.7% while the share of budget for FTE teachers (2.8%), education support teachers (1.5%), and staff development and training (17%) declined. This may suggest an increasing dependency on temporary staffing by schools within the region, which could be reflective of overall challenges in recruiting and retaining full-time staff.

Similarly, London (9.8%) and the South West (5.6%) saw notable reductions in the allocation of budget for staff development and training, indicating that schools in these regions may be prioritising immediate staffing needs over long-term investment in teacher retention.

Overall budget share for FTE teachers declined the most in the East Midlands (5.9%), West Midlands (2.8%), and the East of England (2%). At the same time, these regions faced some of the steepest increases in building and energy costs, with the proportion of the budget rising by 21.7% and 24.1% respectively.

Despite overall financial pressures, only the North East and South West increased budget allocation on FTE teachers, by 3.8% and 0.4% respectively - suggesting a strategic effort to recruit and retain permanent staff.

Elsewhere, the North West and East of England were the only regions which reduced budget allocation on supply teachers, falling by 4.8% and 3.6% respectively, which might suggest more stable workforce retention in these areas.  

As budgets are squeezed by rising operational costs and pressures from a dwindling teacher supply, schools need to increasingly maximise their budgets to effectively balance immediate staffing needs with long-term financial investments.

Implementing smart tools, such as financial management software, can be a valuable way for schools to manage spending patterns to identify and allocate funding more effectively each academic year - especially during tougher financial periods. 

Over the past five years, the number of pupils in England requiring Special Educational Needs (SEN) support has surged to 1.6 million - a dramatic increase of 101,000 from 2023 alone. This rise coincides with efforts by Local Authorities to integrate SEND pupils into mainstream schools, though only 4.8% of pupils currently have an Education, Health, and Care (EHC) plan in place.

In response, the Education Committee launched a major inquiry into the SEND crisis at the end of 2024,  aiming to stabilise the education system, ensure long-term sustainability, and improve outcomes for children and young people - spotlighting the growing pressures on schools and local authorities.

Against this backdrop, the findings from our report reveal stark regional disparities in SEN funding and needs across schools in England. While funding has increased year-on-year in every region, potential pitfalls between funding and escalating demand raise concerns about schools' ability to provide adequate support, without facing financial strain.

Despite a significant funding boost in the following academic year (320%), the North West saw a far greater rise in SEN students (511%) which may outpace available resources. With only a minimal increase of 1.1% in FTE teachers, schools in this region may struggle to fulfil SEN needs.

Yorkshire faced an even wider gap, with a funding increase of 214% and the percentage of SEN students increasing by 530%, the region faces a substantial shortfall. This could be further exacerbated by the slight decline of 0.5% in FTE teachers, despite the region’s higher overall expenditure on teachers.

The West Midlands recorded the highest increase in the percentage of total SEN students (680%). Even though the region also had the largest influx of FTE teachers, at 74.6%, this may not match the widening scale of SEN needs.

Schools in London observed a 2.6% decline in FTE teachers, while its funding lagged relative to its SEN student growth highlighting where resource gaps could be strongly felt.

Elsewhere, the North East was the only region where SEN funding (276%) outpaced the rise of SEN students (268%), creating an 8% window in resources. Although teaching staff marginally declined by 0.2%, this could indicate that schools in the region may be better equipped to support SEN students.  

Overall, the findings underscore the looming crisis, where funding increases are not keeping pace with the apparent rise in SEN needs year-on-year, while the growing teacher shortages could be amplifying this strain. As a result, this could have serious implications on schools' finances, particularly from any unforeseen expenses, while further impacting teacher wellbeing from over-extended or unavailable resources.  

To ensure schools can accommodate SEN budget needs as effectively as possible, targeted software support which can prevent overloading staff workloads, compromising student outcomes, or risking financial deficits, is necessary. 

Beyond staffing issues, rising operational costs are creating further pressure on education budgets. Many Local Authority schools face a severe risk of financial deficit due to these escalating costs.

While most regions saw modest increases in expenditure on building maintenance, ranging from 0.22% in the South West to 15.28% in the East Midlands, the West Midlands faced a staggering 99.34% rise. This dramatic increase could be reflective of significant investments or urgent repairs, underscoring the immense financial strain of maintaining ageing school buildings year-on-year.

The North East stands as the only region to experience a dramatic decline, with budget expenditure dropping by over 39% year-on-year. This reduction may represent a strategic move towards cost-saving measures or a redirection of budget, as the region’s expenditure increased on supply teaching costs, FTE teachers, and energy overall.

Expenditure on grounds maintenance and improvement shows similar patterns across regions. While most areas saw minimal changes, the West Midlands had a dramatic surge of 164.12%.

This exceptional increase may indicate schools prioritised major improvement projects, but combined with costs surging in all other categories, schools in this region may face particularly tough financial challenges in the next academic year, without strategic support.

Notably, energy costs surged starkly across all regions, with the smallest rise felt in the North West (13.64%) and the largest in the West Midlands (189.38%). With schools unable to reduce heating or lighting costs to continue meeting basic operational needs, these energy costs represent largely unavoidable financial pressures that can create severe disruption in school financial planning and long-term financial stability. 

Our report's findings reveal the harsh reality of the teacher retention crisis in England - and why it is not just a staffing issue, but a pressing financial concern for schools.

As schools grapple with these escalating challenges, cost-effective, integrated school budgeting software offers leaders practical, straightforward tools to address both the personnel and financial sides of this crisis, providing leaders with a clearer, more actionable picture of their finances.

Understanding Burnout and Retention

One of the most effective approaches to transforming teacher retention and satisfaction is to identify early warning signs of burnout - before it escalates. With the right HR software in place, schools can utilise powerful data-driven analytics to monitor concerning patterns in staff absenteeism, allowing for timely intervention and more targeted wellbeing support.

Our Thriving People software bundle could be a crucial preventative step to tackling the retention crisis head-on. With a combination of all the tools needed to empower teams, from managing payroll to improving training and people programmes, schools can reduce turnover and minimise reliance on expensive supply teacher support.

Most importantly, it means schools can invest back into staff to create a more positive and engaging learning environment for everyone - addressing present barriers in retention and recruitment. While also reducing administrative burdens, this ultimately enables schools to deliver stronger outcomes and long-term stability.

Streamlining Financial Management

Managing finance in education is increasingly complex, with unforeseen expenses - like the rising cost of supply teachers and operational overheads - heaping pressure on already squeezed budgets. Schools need a clear, strategic picture of their finances that allows them to distribute resources effectively, without compromising their ability to invest in more long-term solutions like staff development and retention.

Smart financial planning tools can make a world of difference. Our all-in-one Financial Focus software bundle is a convenient solution to engaging staff and achieving financial stability. Simplifying people management and streamlining budgets, this bundle protects schools from both immediate challenges and strategically supports future growth.

By providing actionable insights to support staff and optimise budgets, these tools enable schools to prioritise the health and wellbeing of their staff and their finances -  even during times of unprecedented challenges.

Supporting Learning Environments

High turnover rates are driving up recruitment and supply teacher costs and overwhelming already tight budgets. But beyond finances, this crisis poses a significant threat to teaching and learning quality and consistency, with potential ripple effects on SAT and GCSE outcomes across all regions.

As inconsistent staffing can disrupt lesson continuity, and leave students without the specialist subject support they need, some schools are adopting innovative tools like Access GCSEPod to help bridge the gap during teacher turnover.

Delivering on-demand, curriculum-aligned content, this solution offers a practical way to support learning environments and ensure non-specialist teachers can deliver accurate and relevant content which helps schools uphold high standards.

Methodology

Using the Department for Education's School Financial Benchmarking service for the 2021-2022 and 2023-2024 academic years, Access Education analysed expenditure data from a sample of 927 state-funded primary and secondary schools across 149 Local Authorities, excluding sixth-form only and federation schools.

To assess regional disparities, Access Education used a regional proportion calculation, ensuring a fair distribution of the sample size across nine regions: East Midlands, East of England, London, North East, North West, South East, South West, West Midlands, and Yorkshire. Local Authorities with disproportionately low representation were excluded to ensure statistical relevance, allowing for a measured insight into expenditure trends in each region.

Access Education further examined government data on school funding and special education needs to provide further context on school funding pressures for SEND in the 2023-2024 academic year.