Plans to make government departments stick to spending limits and undergo a “prioritisation exercise” designed to find savings will be a “looming catastrophe” for schools, sector leaders have warned.
The warnings come after a Treasury minister revealed that departments would be expected to stick to spending limits put in place last October and also to find efficiency savings.
But the move was criticised by schools sector leaders including Leora Cruddas, chief executive of the Confederation of School Trusts (CST), who described the expectation that public services would balance budgets within existing limits as “simply not realistic”.
Speaking on Sky News yesterday, Chris Philp, chief secretary to the Treasury, said departments would stick “rigidly” to spending limits put in place last October and would be expected to find efficiencies.
Government expenditure plans over the next few years were set at a Budget and Spending Review back in October 2021, and this determined the amounts of money that the Department for Education and other ministries had to spend on the services they operate and fund.
Treasury announcement raises school funding fears
But education experts and leaders have pointed out that these limits were set out before the recent surge in inflation, which has decreased the value of the cash limits that departments were given in real terms.
Publicly, the DfE has said that the settlement it received at last year’s review is adequate, with former education secretary Nadhim Zahawi - who negotiated the settlement with the Treasury - saying the final figure had allowed some “head room” for inflation.
But schools have consistently said that their financial situation has hugely deteriorated since then, after having to fund higher than expected pay rises, rising energy bills and other services linked to inflation, such as catering and building work.
And now leaders have said they are “extremely disappointed” with Mr Philp’s announcement yesterday, which appears to dash any remaining hope of a cash injection to the DfE, and subsequently school budgets.
Speaking about spending limits, Mr Philp said: “We are going to stick rigidly to those spending limits because it is important to be financially responsible.
“The efficiency and prioritisation exercise is designed to, firstly, make absolutely sure we stick to those spending limits and, secondly, make sure that we are prioritising expenditure not on anything that is wasteful, but on things that really deliver frontline public services and drive economic growth.”
‘Looming catastrophe’
Responding to the comments, Ms Cruddas, of the CST, the sector body for academy and multi-academy trusts, said it was “simply not realistic” for the chief secretary to the Treasury to be expecting public sector services to balance budgets within existing spending limits.
“It is extremely worrying that he says that departments will also be expected to find efficiency savings”, she added.
“Many of the cost pressures we are now facing were not known when the spending review in 2021 took place. We are very concerned that continued cost pressures on schools will mitigate against the provision of high-quality education.”
Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), agreed that the allocation of money before the rise in inflation was now “inadequate”, and said that it would be a “miracle” if it did not lead to declining standards in education.
“The government’s apparent decision that there will be no additional funding represents a looming catastrophe in which we will see rising class sizes, cuts to the curriculum and student support, and a reduction in extracurricular provision, such as school trips and clubs,” he said.
Paul Whiteman, general secretary of school leaders’ union the NAHT, said suggestions that there would be no increase in funding for education in the near future were “deeply troubling”.
“Being forced to see education decay due to the government’s inaction goes against the professional commitment of school leaders, and our members are reaching breaking point”, he added.
While Emma Knights, chief executive of the National Governance Association, said managing budgets was ”a national challenge for governing boards like no other”, and that it was “fantasy to think the increasing costs can simply be absorbed without affecting the education being provided by our schools”.
‘Demoralising’ the teaching profession
Heads and trust leaders have also criticised the spending plans, and contrasted them with generous tax plans for high earners - including a cut to the tax rate for those earning over £150,000, and plans to remove the cap on bankers’ bonuses.
Andy Byers, headteacher at Framwellgate School in Durham, said last week’s mini-budget, which announced the above policies, had “prioritised tax cuts for the wealthy over spending on public services”.
“This announcement will further demoralise the profession and have a long-term impact on the education and outcomes for our young people, particularly the most disadvantaged,” he said.
Caroline Derbyshire, CEO of the Saffron Academy Trust in Essex, said she thought families “should be aware” of the decision and that it would mean “devastating” cuts, with an impact on children.
“This would be the wrong moral choice in terms of investing in the future and would set the government’s own levelling up agenda back a decade,” she added.
Lee Mason-Ellis, CEO at The Pioneer Academy, said: “I agree with Mr Philp that as a society we should be ‘prioritising expenditure not on anything that is wasteful, but on things that really deliver on public services’.
“That is why it is essential that the DfE receives increased funding to ensure all schools have adequate budgets to cover both salary rises agreed by government and the excessive energy costs of recent months.”
Schools, unions and professional associations have been sounding the alarm on financial pressures for months now, describing a “perfect storm”.
While an energy support plan introduced from next month will provide some help at least temporarily, there has been general disappointment at the government’s response, including a suggestion that schools could use “hard-earned” reserves on “cost challenges”.
Schools have warned of looming cuts to their staff since early in the year, and many of these have started to be realised.
Special schools have warned they are in an impossible situation - as they are fighting “tooth and nail” to keep hydrotherapy pools open despite soaring costs making them extremely expensive to run.
