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Commentary - How Osborne made the money go round

Whether the pupil premium represents extra spending for schools is hotly contested. Since there is such a small real-terms increase, Labour argues that the Coalition is channelling #163;2.5 billion of existing funding away from the current schools budget to fund the pupil premium.

There is a degree of truth in this argument, but the more important question is how the Government has increased schools funding, irrespective of whether it takes the form of a pupil premium or not.

In large measure, the answer is that savings in child benefit have limited the cuts to the schools budget for five- to 16-year-olds. Restricting child benefit to lower-rate taxpayers will save #163;2.5 billion in 201415 - the same amount as the pupil premium.

Depressingly, the remaining half a billion will be found by reducing unit funding for 16- to 19-year-olds in school, college or training, and by abolishing the education maintenance allowance (EMA), paid only to students in full-time further education from poor households.

The Chancellor has trumpeted the so-called fairness premium, which provides more money for nursery education, the pupil premium and a national scholarship grant for young people from poor backgrounds entering university. But there is no premium for 16-19.

The Government does not seem to understand the post-16 sector. Unit funding for 16-19 is to be cut even though those from poorer families are more likely to attend FE colleges than school sixth-forms.

Ironically, the Government has announced its intention to raise the school leaving age, even though the Liberal Democrats opposed it during the previous government and the Conservatives were lukewarm. It seems the intention to raise the participation age is a cover for the argument that because participation is compulsory there is no need to pay EMAs.

If the leaving age is raised, there will be no Neets (not in employment, education or training). Financial hardship will simply increase truancy.

Mark Corney is the author of Funding the Pupil Premium, published by CfBT Education Trust.

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