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Get ready for the years of lean

Remember the years of Thatcher austerity? Brace yourselves for their return

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Remember the years of Thatcher austerity? Brace yourselves for their return

The full cost of the global economic crisis on the country's finances was revealed last week when Alistair Darling, the Chancellor of the Exchequer, delivered his Budget speech.

The picture he painted was particularly distressing for schools, which will experience one more year of the bountiful spending they have become accustomed to during the best part of a decade, before feeling the pain of significant spending cuts that could result in teacher redundancies as schools attempt to balance their books.

Funding for major capital expenditure projects, including the pound;55 billion Building Schools for the Future (BSF) programme, is expected to be halved, according to the Institute for Fiscal Studies, to fill the gap created by the astronomic public borrowing that continues to be undertaken to combat the banking crisis.

During a briefing at the Department for Children, Schools and Families last Friday, a senior civil servant is believed to have told unions that the forecast is "not good" for schools.

Although expenditure on schools for 2010-11 will increase by 4 per cent, efficiency savings of pound;650m will have to be made across the department.

But it is predicted that it will be after 2011 when schools will really begin to feel the squeeze. Between 2011 and 2014, public spending is expected to grow by just 0.7 per cent, which means spending on schools will be as low as 2 or 3 per cent once the health service and social security is factored in, and could be as low as just 1 or 2 per cent for some schools.

David Laws, the Liberal Democrats' education spokesman, says the years ahead will see massive squeezes on public funding, "threatening school budgets and the school building programme".

"Education must be made a high priority in this tougher spending environment, and savings should be found from within the national budget to increase school funding and introduce a pupil premium, so that all children receive a quality education," said Mr Laws.

He added that while the proposed pound;650m for sixth form places this year and next was good news, it "clearly comes at a price".

"The announcement of a so-called renewed efficiency drive will be a real challenge for sixth forms already struggling to balance their very tight budgets," he said.

According to Gemma Tetlow, an economist with the Institute for Fiscal Studies, spending plans in the three years after 2011 "are looking a lot tighter".

"It is most likely that the pain will be shared equally among health, education and law and order, so all would experience real term cuts," she said.

"To make real savings, the department may look at payroll. That could mean cutting back on administrative roles. It could also mean putting pressure on teachers' pay and possibly on numbers."

Ms Tetlow added: "2014 will be a tight year, and in the three years beyond that there will be further savings - either by increasing taxes or making more cuts in public spending.

"It's not absolutely clear how they would do it, but if the Government - be it Labour or Conservative - continues to squeeze public spending, then by 2017-18 you would be back to spending levels of 2002. That means they would have wiped out the whole of Labour's public spending during its second term."

The cuts proposed by the Government will dwarf those imposed by Margaret Thatcher during the 1980s, and should the Conservative party win the next election, it is likely the cuts could be even bigger.

Malcolm Trobe, policy director for the Association of School and College Leaders, said it was good news that the hole in sixth form funding was to be plugged, but that was as far as the good news stretched.

Schools are going to be faced with tougher and tougher decisions in the coming years, he told The TES.

"We have been telling people the situation is that we aren't going to see real-terms growth in education funding certainly in the medium term. In fact, we are likely to see a real-terms decline in funding," he said.

Schools are going to have to learn to "prioritise" when it comes to running schools, he said: "The textbooks will have to last for another year, the new ICT system may have to wait for a year, or you may decide to lay off on building maintenance for a little while.

"But you can only do these things for the short term before the bills start to mount up again. Then you're down to staff. If you're forced to lose staff then you have bigger class sizes, and then you have to think about your teaching methodologies. There is no doubt that the decisions will become more difficult."

The freeze on spending is expected not only to affect wages but also building projects. In particular, Building Schools for the Future, which the Tories claim has been "disastrously mismanaged", is expected to be scaled back dramatically - and even then its future looks fragile.

Professor John Howson, an education recruitment expert, said when it comes to public spending cuts, capital expenditure is often one of the first things to be affected.

The fact that the beleaguered construction industry is so heavily reliant on the education sector is the only thing that will keep the BSF programme going in the short term.

Professor Howson told The TES: "BSF is an obvious one to be axed. If the construction industry in the private sector is still very weak, then the programme will be kept on to keep the construction industry going. But if you need to get rid of this huge debt, you aren't going to keep building schools."

Schools without sixth forms are particularly likely to feel the squeeze, according to Professor Howson.

"Young people are more likely to stay on until 18 as their job prospects are low, so schools without sixth forms will miss out on that potential revenue," he said.

"Places that are really going to struggle are the North East - Tyneside, Middlesbrough - where enrolments are falling."

Although the effects of funding cuts are likely to be felt in schools across the country, areas such as the North East will undoubtedly feel it more than the South East, where competition for places is higher.

When the bank sector collapsed last year, it was an abstract phenomenon for most; the fall-out took time to drift down. But following Mr Darling's speech last week, it is clear that teachers, schools and pupils will be forced to pay a dear price for the financial meltdown. How long it will last is unknown, but one thing is clear - the age of austerity is almost upon us.

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