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Jess Child

What do major party announcements mean for schools?

Group Chief Executive, Jon Coles, discusses the how recent funding announcements impact schools across the country

David Cameron has said that funding per pupil will be protected in cash terms. Ed Miliband and Nick Clegg attacked each other’s announcements on school funding but appear both to have said that the DfE participation budgets will be protected in real terms.

What do these positions mean in practice for schools?

Understanding the Conservative pledge of flat cash per pupil is fairly straightforward: with pupil numbers growing at primary and at secondary, it requires an increase in cash of 7.8% over the period 2015-2020.

What protecting the schools budget in real terms means depends on what is assumed about inflation. With Mark Carney projecting negative inflation, this may be slightly slippery – but I suggest that the person in the street might have grounds for complaining about being misled if it didn’t mean that planned funding would increase at least in line with the Bank of England’s target rate for CPI of 2% per annum. This amounts to a 10.4% increase in cash over 2015-2020.

So the difference in promises for schools amounts to around £1bn in cash in 2020.

Protecting real terms funding per pupil – which nobody is proposing, but would be genuine protection of the unit of funding - would require an increase of 19% – bearing in mind inflationary pressures and pupil number growth.

The cost pressures on schools in total are probably higher. They are analysed here. The analysis is sensitive to what assumption is made about teachers’ pay: depending on what is assumed, pressures range from 18.1% to 22.6%.

To put it simply, if pay costs rise by 2% per annum, schools would feel on average as though they were experiencing a 12% cut on Conservative plans, or a 10% cut on Labour and Lib Dem plans. If pay costs rise by just 1% pa, schools will feel as though they are experiencing 6.5% funding cut under Labour or Lib Dem plans, or an 8.7% cut under Conservative plans.

2016-17 looks a very difficult year on any of these scenarios. AoC’s analysis of the impact of pension changes on schools works backwards from the government’s total expected savings across all pension schemes to reach a total of some £850m. Working ‘bottom up’, I think that may be an underestimate and that the actual costs to schools may be over £1bn. Either way, this is a major single year hit on top of inflation and pupil numbers – 2.5% of budget.

The political parties’ positions on the rest of the education budget look markedly different. David Cameron talked of protecting the schools budget; Labour and the Lib Dems have included the other participation budgets – the early years and post-16 budgets as well. This brings into scope a further £10bn of expenditure.

Real terms protection of these budgets will have a cost of just over £1bn by 2020. Of course, the Conservative Party has not said anything about these budgets and may yet do so, but as things stand, this is a significant difference and appears to suggest that the Conservatives would cut these budgets more deeply.

Finally, protecting the remaining £2bn of DfE revenue expenditure (which includes, for example, money for teacher training) as Labour have promised has a cost of just over £200m. Labour have also not said whether or not schools would be protected as a share of DfE expenditure – so as things stand, could look to move money from schools to other areas of DfE responsibility (or, less likely, vice versa).

In any case, in total, the differences between the major parties on the DfE revenue budget amount to £2.2bn by 2020.

This article was originally posted at www.joncoles.com on Friday 13th February.

 

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