This chapter provides an overview of funding in early childhood and school education, higher education and adult education and training.

Funding for education at all levels is provided by the Northern Ireland Executive, which determines overall spending priorities.

The Executive has four main sources of funding:

• funds which are allocated to it by the UK Government
• money raised in Northern Ireland through local taxation
• borrowing (within the Reinvestment and Reform Initiative, RRI)
• money received from the European Union until the end of 2020

UK government funding for all three devolved administrations (DAs) (Northern Ireland, Wales and Scotland) is determined as part of the regular Spending Review, and in accordance with the policies set out in the Statement of Funding Policy (2020).

Funds are allocated as a block grant and each devolved administration is free to determine how this block grant is allocated in its own budget. Since the late 1970s, annual changes in the block grant have been determined by the ‘Barnett Formula’. The UK Government provides other grants outside the block grant. These are for less predictable demand-driven spending and changes in these grants, which include the Annually Managed Expenditure (AME) budget, are not determined by the Barnett Formula but are negotiated by the UK Government and the Northern Ireland Executive.

The Northern Ireland Budget 2020-21 sets out how the Northern Ireland Executive will spend its block grant. It includes budget allocations for all nine ministerial departments, including the Department of Education (DE) and the Department for the Economy (DfE) (responsible for further and higher education and skills, alongside employment and the economy), and provides comparisons with the previous year.

Arrangements for the transmission of funding to providers vary by phase of education (early childhood and school education, higher education, and adult education and training).

Early childhood and school education 

Education is provided free of charge from ages 4 to 19. Compulsory education (ages 4 to 16) is provided in schools. From ages 16 to 19, young people may choose to continue their education in a school sixth form or a further education college, undertake work-based learning or start work.

Free, part-time pre-school places are available for children in the year immediately before they start compulsory education (aged 3-4). This provision is usually available for 2.5 hours per day, five days a week, for 38 weeks of the year, and the funded places are offered in grant-aided nursery schools and nursery classes / units in primary schools, and in voluntary and private settings. Parents may pay for additional provision if they wish.

Funding is provided through the Department of Education (DE) budget and is transferred to early years education providers and grant-aided schools via the Education Authority (EA), or directly from the DE. This depends on the type of funding (revenue or capital funding) and the legal category of school (see the article on ‘Administration and Governance at Local and/or Institutional Level’).

The majority of children attend grant-aided schools where education is provided free of charge. However, a small number attend fee-paying independent (private) schools, which receive no direct public funding. In the 2019/20 academic year, of the 1,136 schools in Northern Ireland, 14 were independent schools.

Higher education 

Higher education institutions (HEIs) receive their funding from a variety of public and private sources, including a proportion provided by government. In contrast to England and Wales, where the largest component of higher education funding now comes from student tuition fees, in Northern Ireland, government grants still make up a significant proportion of higher education funding, and contribute more than student tuition fees. These annual grants are allocated and distributed directly by the Department for the Economy (DfE).

While teaching is funded through government grants and student tuition fees, research is funded through a dual support system, including:

• government funding to support research infrastructure and enable institutions to undertake research of their choosing
• funding for specific research projects and programmes provided by UK Research and Innovation (UKRI), which brings together the seven Research Councils in the UK, Innovate UK and Research England. UKRI is principally funded through the UK Government's science budget, administered through the Department for Business, Energy and Industrial Strategy (BEIS).

Adult education and training 

The Department for the Economy (DfE) is responsible for funding general and vocational education in further education colleges for 16- to 19-year-olds, and for funding post-19 adult education and training and work-based learning. It also funds apprenticeships and youth training programmes, which are available from age 16.

Government funding for adult education and training is provided in accordance with DfE priorities, as outlined in Further Education Means Success, the (2016) Northern Ireland strategy for further education (page 9). These focus on:

• ensuring a strong and vibrant economy, through the development of professional and technical skills which will help employers to innovate
• supporting social inclusion by providing those with low or no qualifications, or who have other barriers to learning, with the skills and qualifications needed to find employment and become economically active.

Providers also receive income from tuition fees or from contributions from employers.

Article last reviewed December 2020.