Schools to save millions as Government launches agency profit cap
Source: gov.uk (2025-12-04)

New programme launched to help schools tackle avoidable costs and agency staff mark-ups, so every penny is invested in young people.

Schools and trusts will be supported to save millions over this Parliament through a new programme to tackle avoidable costs like high supplier mark-up and wider barriers to getting the best value for money from their budgets - so every penny is invested in delivering opportunities for young people.

It comes alongside action from government to directly tackle the £1.4 billion schools spent in 2023/24 on agency staff. The government’s new agency supply deal - which schools will be expected to use - will cap the rates charged to schools and help them avoid excessive mark-up costs.

Schools will receive support through updated digital tools including to make it easier for them to check whether they are getting the best deals on their interest rates - earning money which could be further reinvested into education - as well as to help to benchmark costs across the school estate to help them make informed spending decisions.

It builds on the work that school leaders and staff are already doing to maximise their budgets and ensure funding is delivering better outcomes for children, alongside action by government to help schools reduce costs through the government’s energy deal pilot scheme which identified a 36% saving on average,

The programme will also work to help the sector make the most of financial and physical assets, including use of the £6 billion held in reserves, unlocking further funds for schools and trusts that can be used to improve the experiences of children, such as investment in technology.

The move is part of the government’s Plan for Change and comes on top of new measures to transform the life chances of thousands more children including by scrapping the two-child benefit limit, rolling out free breakfast clubs and extending Free School Meals.

Schools Minister, Georgia Gould said:

From day one, this government has worked in partnership with schools to break the link between children’s background and their opportunities in life.

This programme will lift some of the pressures that have built up on schools in recent years and builds on major steps we have taken outside the classroom, like scrapping the two-child benefit cap.

I know just how hard schools and trusts are already working to seize opportunities to maximise value from their budgets. We want to share that best practice and support them to go even further – with government action to tackle the national drivers of costs, alongside local action from schools and trusts, so every penny is invested in children to achieve and thrive.

The initiative forms part of the new Maximising Value for Pupils programme (https://www.gov.uk/government/collections/maximising-value-for-pupils-guidance-for-schools-and-trusts) launched today (4 December) which is shared endeavour between government, schools and trusts to address barriers preventing them from getting best value from their budgets. The government is taking on key spending areas where collective buying power can secure better deals, allowing schools to continue to invest more in frontline provision that makes the greatest difference for children.

Schools and trusts will be urged to take advantage of the deals and support on offer through the new programme in the new year so they can reap the rewards and get best value for money.

Despite deeply challenging choices about public spending, school funding rose significantly this year (2025/26) and will rise again next year - increasing by £1.7 billion in 2026-27 meaning every child, in every classroom, in every corner of the country will be given the opportunity to succeed.

From a revitalised curriculum, free breakfast clubs, expanded free school meal offer and with attendance on the rise and more teachers in our classrooms, this government is putting education back at the heart of national life and breaking the link between background and success.

The government will build on the programme over time, including adding new services to support schools to buy technology and maximise use of their financial and physical assets including to support their communities.

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