The claim
“Even as pupil numbers greatly increase, we will ensure that the cash funding per pupil does not fall… We will also introduce a new £2.5 billion pupil premium that supports the education of disadvantaged children, and which will provide a real incentive to good schools to take pupils from poorer backgrounds.”
Chancellor George Osborne, Spending Review announcement, 20 October 2010

Cathy Newman checks it out
The pupil premium was the reddest of the Liberal Democrats’ red lines. They fought tooth and nail behind the scenes to preserve it, and in a speech on fairness on Friday, Nick Clegg proudly announced he’d secured an “additional £2.5bn of investment each year” – money paid direct to schools to encourage them to take on children from deprived backgrounds.

But have the Lib Dems, once again, been forced to water down one of their most cherished policies?

The analysis
Repeatedly, the Lib Dem leader has been clear that the pupil premium was, just that – a premium, an extra pot of cash for schools taking children on free school meals.

In June, David Cameron promised to “take money from outside the education budget to ensure that the pupil premium is well funded”. But now it looks as if the lion’s share of the money is recycled from within the education department’s budget. A senior education department source told FactCheck £1.7bn of the £2.5bn comes from other education cuts – things like the educational maintenance allowance. Only £800m comes from elsewhere – the welfare budget.

The Spending Review document trumpets “real terms increases of 0.1 per cent in each year of the spending review for the 5 to 16’s school budget” – suggesting an above inflation increase.

But those figures only add up if the pupil premium is included in the budget – not added to it as the Lib Dems originally dreamed. Figures supplied by the department to FactCheck show the budget will increase from £35.4bn this year, to £39bn in 2015. That means without the £2.5bn pupil premium, the schools budget would in fact shrink in real terms.

Cathy Newman’s verdict
So far from bringing “real social justice and opportunity to Britain’s children”, as Nick Clegg claimed before the election, the pupil premium seems to just be filling a hole in the budget.