Gordon Brown’s Budget contained good news for education. It committed the Government to increasing significantly UK education spending as a proportion of national income. Given Treasury forecasts that national income will grow by 2.5 per cent a year in real terms, this implies two more years of extra cash.
UK education spending is already due to increase by more than 5 per cent a year from 2001 to 2004. The chancellor’s promise implies increases to 2006 but possibly nearer 3 per cent a year than 5 per cent.
Growth of this scale should take the Learning and Skills Council budget from pound;7.2 billion in 2002-3 to pound;9 billion by 2005-6 but only if schools and universities do not monopolise the increase.
The Treasury, education department and the various quangos are in almost permanent negotiation on budgets so we may not know for another year who gets what. Promises of extra billions have become so common that they are treated with some cynicism, but things are looking better than they were.
The Further Education Funding Council budget stood still from 1995 to 1998. This led to the contracts dispute, cuts in course hours, mass redundancies and destabilisation in colleges. Education may be getting less from the Budget than the health service, but it is getting more than it used to.
The problem with the cash increases is what is expected in return. The ambitious participation and achievement targets in the LSC’s corporate plan imply increases in activity and therefore in costs. Targets for such things as basic skills and higher education participation all cost money and will eat into the extra billions.
And if that was not enough, there is an outstanding commitment to extend education maintenance allowance payments to those teenagers who stay on in education. The status quo is not sustainable because these cover only a third of England and not the other two-thirds. This is obviously unfair. Extending them will cost another pound;400 million; cancelling them will leave those who already get them high and dry.
The allowances will help achieve many Government targets but represent a further cost. There’s no point paying a teenager pound;30 to attend college if you do not spend enough on the teaching to make attendance worthwhile.
The second thing eating up funds is pay. Wage rises have run ahead of the Government’s assumption for several years and will probably do so again in 2002-03. Salaries are only one part of the costs of employing staff. Most colleges will be paying more to their teacher and support staff pension funds this April.
All employers will also be paying 1 per cent more in national insurance next April. It would be wrong to overstate the impact of this tax increase. It will cost the college sector about pound;10 million in national insurance in 2002-03 and pound;30 million a year thereafter.
More increases may be in the pipeline for future years but there may be benefits from the tax hike. The college sector employs 100,000 people and has an interest in their health. Reducing days lost through sickness would be a start. Given this, it is probably cheaper for employee health to be secured through the NHS and tax than by colleges organising health insurance. Existing schemes for college managers are not cheap. So more money for the NHS could help as well as hinder the education sector.
The issue, of course, is whether the extra Government money put into the NHS achieves its purpose. Will more patients get treated or will the extra money disappear in higher pay, negligence bills and smarter facilities?
The Government proposed various measures to ensure that the cash delivers results, including the creation of an NHS “OFSTED” to audit and inspect the service. It is said that public confidence requires nothing less.
We in education face the same questions as those working in the health service. If more money in the NHS is conditional upon results, then the same is surely true for the learning and skills sector. The extra money put into the sector since 1999 was supposed to increase participation to deliver national targets. The figures published so far suggest that this has not happened. The proportion of people in further education has barely changed. But other things have. The money has been used to deliver other targets: for key skills, information technology, attracting new groups of students and raising standards.
In fact, the effort and cost of meeting a large range of targets left little room for the participation targets. Too many targets led to failure to meet the most important one. If Whitehall wants to manage its objectives better, it might be better off with two targets rather than 20.
Julian Gravatt is the finance director of the City Lit, London
