Education Authority publishes update on the savings measures it announced last month

These savings are in response to a projected funding shortfall of circa £300m for 2025-26.

This update document has been provided to the NI Assembly's Education Committee.

EA Savings Measures

Thank you for your letter dated 17 November seeking a written briefing on the EA savings measures.

Update on the Education Authority’s financial position 2025-26

The scale of the funding deficit facing education services was publicly acknowledged prior to the beginning of the current financial year when, in March 2025, the Department of Education published an Equality Impact Assessment Consultation Report on the 2025-26 NI Budget.

That document stated that the Budget "will leave a considerable shortfall across the Education sector", adding that:

"Education continues to face unavoidable cost pressures and rising service demands associated with delivering statutory and policy obligations that the current budget does not fully address. For the third year running, demand-led, statutory pressures will go unfunded. Only the most limited funding would be available for Special Educational Needs, schools, transport, school meals and schools’ maintenance.”

Department of Education Budget 2025-26 Equality Impact Assessment

As previously advised, the financial position for the Education Authority (EA) is a projected shortfall of circa £300m for this financial year. Savings plans currently being implemented can only reduce this deficit by circa 10% at most. Achieving in-year savings by EA is severely limited by two factors:

• Circa 85% of our annual expenditure is incurred on payroll costs - this includes pay for teachers and school support staff. Making significant reductions to this cost, apart from the implications for service provision, would require a funded severance scheme. Such a scheme is not available.
• Virtually all of our services are statutory in nature. These services are a legal requirement and cannot be stopped. Despite these limitations on what we can do in the short term, we recognise the need for further longer-term savings and will continue to work with the Department and other education partners to bring forward strategic proposals.

On 5 November 2025, we announced a series of savings measures. These were drawn up in the context of a clear signal that we should not expect significant additional in-year monies, as had been the case in recent years; and with regard to our obligation to seek to contain expenditure to the budget that has been allocated to us. Updates on implementation of measures are detailed below.

School Transport (Taxis)
The increasing cost of home to school taxis is of significant concern to EA. The total annual bill for taxi use has more than doubled in five years - growing from £19,428,826 in 2020-2021 to £39,753,169 in 2024-2025. We have asked taxi operators to voluntarily agree a 10% reduction in rates charged for runs, taking effect from January 2026. In the absence of agreement on reductions, we will consider alternative arrangements for pupil transport, potentially including the use of break clauses to terminate contracts and re-tender runs. Taxi operators will also be advised that contracts will be re-tendered in the summer of 2026, with a focus on value for money and sustainability. In addition, meetings have been held with the five taxi companies who hold the largest values of contracts for home to school transport. Each company has been asked to submit a plan as to how they could reduce costs.

School Transport
We have explored options on individual school transport arrangements that are outside our legislative and policy obligations. Our transport service is currently reviewing all available data and working with our equality colleagues. Early indications are that, given the categories of children potentially impacted, a full consultation exercise is likely to be required and thus we are planning on an effective implementation date of September 2026.

School Dinners
Increases in school dinner prices for paying pupils will go ahead as planned from the start of the new school term in January 2026. We will be communicating with schools to ensure parents are notified of the increases, and that online payment systems are updated. Pupils entitled to free school meals will not be affected.

The 50p increase will mean the new prices are as follows. Nursery School - £3.00; Primary School - £3.10; Special School - £3.10. It is important that these figures are considered alongside the cost of producing a school meal, which in 2024-25 was £4.28. Similarly, and by way of illustration, had the prices kept pace with inflation since the last price increase in 2017-18, the prices now for primary school meals would be £3.51.

For Post Primary School (cafeteria style) meals, a percentage increase of 19.25% will be applied to school canteen tariff lists – again, for comparison, the comparable inflation based increase would be 35%. This increase will have no impact on children entitled to a free school meal. The Free School Meal Allowance will be increased to allow for the 19.25% uplift.

EOTAS Provision
It is important to emphasise that, in contrast to some external commentary on this, we have not halted all EOTAS (Education Other Than At School) referrals, and those to our own provision continue. Rather, and as announced last month, we have suspended referrals to external contracted providers of EOTAS provision. This involves three external providers in the Belfast area. We remain firmly committed to providing access to appropriate provision for every child and young person. We will maximise use of EA operated EOTAS centres, and the arrangements will remain under review as we continue to monitor demand in the months ahead. In relation to the savings that have been implemented, senior EA managers have visited all three external centres to meet centre managers, staff and volunteers.

EA Music Service
An assessment of options has been completed for increasing income to reduce Music Service's current level of financial subsidy. Increases in fees - including tuition and instrument hire fees - will take effect in January 2026. Increases will range from 10%-20%. At this time there will be no change to the existing policy of a 70% reduction in fees for children entitled to free school meals. We will continue to work with families and schools to advise and support them with any changes to their payment arrangements.

EA Board Decision Making
The saving measures announced last month were taken forward after consideration by the EA Board at a Special Meeting on 10 September 2025. Board Members were updated on a limited number of savings that were already in train, including the planned 50p increase in school dinners.

A list of further savings measures was presented to the Special Meeting and Members agreed to allocate each measure to one of three categories:

• Category 1 - the Board would proceed to take forward this savings proposal and it was within EA’s authority to do so.
• Category 2 - the Board would seek to take forward this savings proposal which required Department of Education action before implementation.
• Category 3 - the Board did not agree with the proposal and the proposal would not be taken forward.

Following the Board agreement, the Category 1 measures were subsequently confirmed to the Department of Education and Minister and included in the EA press release on savings issued on 5 November 2025.

Yours sincerely

Richard Pengelly CB

Chief Executive