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DfE faces £4.6 billion 'time-bomb', colleges warn


The Department for Education could face a £600 million black hole by next year, rising to £4.6 billion within four years, a new report has claimed.

The Association of Colleges (AoC), which carried out the analysis, has warned that a combination of factors, including rising pupil numbers, the cost of free school meals for infants and increased contributions to teachers’ pay and pensions, will create a “time-bomb” for the sector in the period following next year’s general election.

While the schools budget for pupils up to the age of 16 has been protected from public sector cuts since 2010, the AoC has warned there is currently no commitment to ringfence it, or protect spending on post-16 provision, after next year.

Government departments face average cuts of 17 per cent between 2015 and 2019, and AoC assistant chief executive Julian Gravatt warned financial pressures on the sector will intensify during this period.

He said if ministers did not tackle the situation early, there was a risk that 16 to 18 provision would bear the brunt of "damaging short-term savings" after the next election.

“We’re calling on the Treasury and [the] DfE to make decisions on education spending on a rational basis, assessing relative need, rather than protecting the budget for 11 to 15-year-olds to the detriment of those aged over 16," he said.

Although the AoC acknowledges the need for greater efficiency in education spending, the report calls for a “full and frank public discussion" about the extent of various funding pressures, which could have knock-on effects on colleges and students.

“It's not currently clear that government spending plans allow for these extra costs, which may prove to be a time-bomb for any post-2015 administration,” Mr Gravatt added.

Pay and pension contributions for schools and colleges will rise from 14.1 per cent to 16.4 per cent in September 2016, the AoC has calculated. “Added to the employer National Insurance rise, this is a 5 per cent increase in the cost of employing a teacher in 2015-16,” the report says.

It also estimates the cost of providing infant school meals will reach £4.6 billion by 2018-19. The cost of coping with the increase in pupil numbers is expected to rise to £2.6 billion in the same year.

A DfE spokeswoman said the "speculative" figures were "based on analysis of a budget that does not even exist yet".

"Our budget after 2015-16 will be a matter for the government’s next spending review, which, as usual, will give full consideration to future cost pressures," she added.

“The Department for Education has received excellent settlements between 2010 and 2016, enabling us to protect school funding in real terms whilst the government tackles the deficit.”

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