Spending Review - watch the small print

18 Oct 2010

 Beware the pre-spin ahead of the Comprehensive Spending Review on Wednesday. Some people have been given the impression that schools are being spared cuts. Don’t be too sure about that.

 While it is true that front-line school budgets will be cut by less than some other areas of the public sector, the full impact on school spending will require very careful reading of the detail.

 The key point to remember is that while the pot of money allocated for distribution to schools will receive a smaller reduction than other areas of the education budget, this is not the only part of the Department for Education budget that ends up in schools.

 A substantial part of the rest of the budget – which faces higher than average cuts – either goes directly from Whitehall into school budgets or goes on programmes that benefit schools.

 The ‘protected’ area the government will be keen to highlight is what is called the ‘Dedicated Schools Grant’ (DSG). This is the money that is distributed to schools via local authorities.

 Under the previous spending plans, the DSG for 2010-11 was due to be just under £32 billion out of a total Department for Education Budget of £57.7 billion (Source: Departmental Report, 2009).

In other words the dedicated pot of money for school budgets represents just 55% of the total spend.

  So where does the other 45% go? Well, two other big areas are:

  • Children & Families: £3.3 billion (5.7%).
  • Young People:  £6.4 billion (11%).

  These areas are likely to get heavy cuts. Although Sure Start is protected, this will mean substantial cuts to areas such as Safeguarding, Child Wellbeing, 14-19 Development, Education Maintenance Allowances, and Youth Programmes.

 There will also be savings, as we know, in quango budgets, with the closure of the Qualifications and Curriculum Development Authority, Becta, School Food Trust, and the General Teaching Council for England.

 However this still leaves several other areas of DfE spending which go to schools but which are not covered by the DSG money that is channelled via the Local Authorities.  

 We already know that investment in school buildings (£5.8 billion or 10% of the total) is being cut back severely.

 Other areas of spending that affect schools, include:

  • Standards Funds
  • School Standards Grant
  • Sixth Form Funding
  • Academies funding (via YPLA)
  • Modernising the Teaching Profession
  • Specialist Schools/ City Challenge
  • School Meals Support
  • National Strategies
  • Gifted & Talented/ Curriculum/ Behaviour
  • Area Based Grants

 Between them, these spending areas account for some 17% of the total DfE budget. While spending on academies and Sixth Forms should indeed be protected, most of the rest will not be spared cuts.

These will affect school budgets. School Standards Grant, for example, is paid directly by the DfE to schools and was due to total £1.66 billion in 2010-11.

 Other Standards Funds were due to total £2.2 billion in 2010-11.

 Area Based Grants – worth £1.16 billion – go on things such as extended school services, careers advice in schools, and school transport. 

 The National Strategies, Curriculum, Behaviour and Gifted & Talented budgets amount to £1.388 billion.These - we already know - will be heavily cut back.

So, if ministers claim that school budgets are being protected, ask to see the small print: do they just mean the DSG or  all monies that end up in, or supporting, school budgets?

 Of course, the great unknown at present is the impact of the Pupil Premium, which will provide extra money for schools for each pupil from a disadvantaged background.

 Nick Clegg announced that £2.5 billion will go on the Pupil Premium by the end of the current Parliament. 

  For some schools, in the most deprived areas, this may balance the other cuts, but the policy will certainly lead to winners and losers.

  Of course, we should not forget that the last government was already planning some cuts to planned budgets – and if they had been re-elected there would have been much more to come too.

In  Labour’s last Budget in March 2010, some £350 million was due to be saved from the DfE’s overall budget, with the savings falling mainly on quangos, extended schools, and central administration. Schools were also expected to make £1.1 billion ‘front-line efficiency savings’ by 21012-13.

 However, the Labour government claimed that in 20111-12 and 2012-13 schools would have received a real terms (i.e. above inflation) increase of 0.7%, with 16-19 education getting a rise of 0.9% and Sure Start getting a 0% real terms increase.

It will take some time - well beyond Wednesday's announcement - to know whether schools are better or worse off than under Labour's plans.



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