Covid could cost children £350bn in earnings due to lost learning, says IFS

Today’s children face losing £350bn in lifetime earnings unless the UK’s governments invest in radical catch-up efforts when the pandemic is over, according to a report by the Institute for Fiscal Studies.

The IFS is urging policymakers to consider options including nearly nine million children repeating a year of schooling, the use of large-scale tuition in summer holidays and extended hours to make up for the classroom time lost during the Covid-19 lockdowns.

Luke Sibieta, an IFS research fellow and author of the report, said the funding allocated to catch-up programmes by ministers in London, Cardiff, Belfast and Edinburgh totalled just £1.5bn, which he called “plainly inadequate”.

“The inescapable conclusion is that the lost schooling represents a gigantic long-term risk for future prosperity, the public finances, the future path of inequality and wellbeing,” Sibieta said.

But Sibieta cautioned: “Large as these figures are, they do not automatically imply that all schools should go back to normal straight away. It is perfectly possible that the health effects of the pandemic outweigh even these large costs when cases and deaths are high.”

By February’s half-term holiday, British children will have lost at least half a year of classroom time since March 2020.

Sibieta suggests that £30bn – equivalent to half a year’s UK spending on state schools – should be allocated to catch-up programmes designed with input from teachers and school leaders.

“The lack of urgency or national debate on how to address this problem is deeply worrying,” Sibieta said. “The risks of spending ‘too much’ time or resources on this issue are far smaller than the risks of spending too little and letting lower skills and wider inequalities take root for generations to come.”

The IFS estimates that such a substantial loss of learning is likely to be followed by lower skills and qualifications for children at school during the pandemic, resulting in permanently lower incomes during their careers.

According to the IFS, over 50 to 60 years the combined earnings loss would amount to £350bn, including a £100bn loss of government tax revenue.

Even if “by some miracle”, schools, teachers, children and parents were able to mitigate three-quarters of that effect, the loss of earnings would still total £90bn.

Kate Green, Labour’s shadow education secretary, said: “This report shows just how costly the prime minister’s failure to get a grip on this crisis could be for our children and our economy.

“We cannot wait until this pandemic is over to start tackling the impact on children’s education. Ministers must urgently ensure every child has the equipment needed to learn from home now and set out how it intends to address this catastrophic impact on children and the country long term.”

A government spokesperson said: “The prime minister was clear last week that extended schools closures have had a huge impact on pupils learning, which will take more than a year to make up.

“The government will work with parents, teachers and schools [in England] to develop a long term plan to make sure pupils have the chance to make up their learning over the course of this parliament.”

In England the government’s plan includes £350m for a national tutoring programme aimed at disadvantaged children, unveiled by Boris Johnson last year.

Simon Burgess, an economics professor at the University of Bristol, said: “This briefing paper supports the case that I have been making for months that a huge effort is needed to rebuild the lost skills of today’s young people. I think a ten-fold expansion of the national tutoring programme is the best bet but other options should surely be considered.”

Burgess and his colleagues last year calculated that “from the mid-2030s and for the following 50 years, about a quarter of the labour force will have lower skills, implying a 50-year period of lower growth” for the UK, along with a widening of inequality.

The calculations come after the National Foundation for Education Research last week published the first credible evidence of learning loss in spring last year, with pupils in England aged six and seven losing the equivalent of two months of progress in reading and maths by autumn 2020.

Jonathan Portes, professor of economics and public policy at King’s College London, said: “Any plausible reading of the evidence suggests that the long-term costs are likely to be very large indeed, and that it follows that spending a lot of money and policy effort to reduce or mitigate them is likely to be very good value for money.”

James Turner, chief executive of the Sutton Trust, which promotes social mobility through education, said: “The IFS is absolutely right to call for substantially more education funding to address the major issues coming out of this crisis. But it is absolutely crucial that this is targeted towards disadvantaged pupils who have been the worst hit by the pandemic.”