Beware Brown's financial spin

16th March 2007 at 00:00
Don't give too much credence to his claims, argue William Stewart and Jonathan Milne

when gordon Brown delivers his 11th, and probably final, Budget on Wednesday, it is a fair bet that schools will figure prominently.

The Chancellor has consistently used his annual statistical tour de force to emphasise the importance he places on education in the globalised economy.

His chosen method is typically a few hundred million pounds direct to school budgets here, a few billion on capital projects there. The numbers sound good and usually result in very favourable headlines. But teachers should be wary of paying them too much attention.

First, whatever the newspapers may say on Thursday, the Budget is only likely to have a marginal impact on school finances. The really important variables - school funding, teacher pay and the comprehensive spending review covering three years that underpins it all - are separate multi-year deals settled elsewhere. And at the moment the outlook in all three is gloomy.

Mr Brown could use his speech to reveal the spending review education settlement that covers April 2008 to 2011, months ahead of the main announcement. He has done this before with health. But the downbeat nature of the next spending round, despite signs that education will do relatively well, is likely to act as a disincentive for early announcements.

Second, what the Chancellor does say needs to be examined very closely. His Budget speeches spew out statistics at an incredible rate, eagerly taken down by journalists who have very limited time to dissect the true meaning of a statement carefully crafted weeks in advance. Sometimes they get it wrong. Last year was a classic example.

After boasting that Labour had doubled per pupil spending, Mr Brown said he wanted to go further - "agree an objective for our country that stage by stage, adjusting for inflation, we raise average investment per pupil to today's private school level". He would "start immediately" by closing the gap in capital investment with a rise from pound;5.6 billion to pound;8bn a year by 2011.

Impressive? The Press Association thought so, writing: "Brown's extra billions for schools scores top marks." The Evening Standard in London said he had "sprayed money" at state schools with a "blizzard" of cash announcements.

But closer examination revealed that the capital funding announcement actually amounted to a slow down in the rate of growth. Worse still, the overall pledge of matching "today's" independent sector funding levels was practically worthless. With no deadline given and no commitment to matching future increases in private school fees, it amounted to nothing more than a promise to increase school funding per pupil faster than the rate of inflation.

And if independent school fees rose faster than inflation, the gap between funding in the state and private sectors could widen, even if the Government met the letter of Mr Brown's pledge.

It was not the first time Mr Brown had attempted to spin the education world. At least one previous Budget had seen heads welcoming "new" grants, only to find out it was money they already had.

Mr Brown went on to repeat his private school funding pledge at the Labour party conference and in December used his pre-Budget speech to re-announce existing school building commitments.

Alissa Goodman, the Institute for Fiscal Studies' deputy director, said:

"You have to look at the figures behind the headline announcements because the devil is in the detail. It was certainly the case that what was announced in last year's Budget and the pre-Budget report in actual spending was relatively small in comparison to the aspiration the Chancellor was setting out."

The figures behind next week's headlines are unlikely to be rosy for schools. A consultation paper published last week revealed ministers are preparing to cut schools' increases to ensure they reduce spending on everything from maintenance to photocopying. Schools are expected to play their part in finding the pound;4.35bn of efficiency savings the Department for Education and Skills is committed to under the Gershon review. The signs for teachers' pay are not much more hopeful. The current deal is delivering 2.5 per cent annual rises until August 2008, well below the 4.2 per cent inflation rate.

But Mr Brown has signalled he does not want public sector pay rises over 2 per cent and this month emphasised his determination with a health service deal worth less than 2 per cent a year.

Finally, there is the next spending review, which will set the framework for all public spending between 200809 and 201011. "It is going to get tighter," David Bell, the DfES permanent secretary, was warning as long ago as June. Alan Johnson, the Education Secretary, was even more downbeat last Friday. He told the Association of School and College Leaders the next review would be "much tougher". He did not even sound that confident of an above-inflation rise.

"I'd hope for another real-terms increase from the comprehensive spending review, touch wood," he said. They are words that schools would be wise to heed when they read about Mr Brown's next education "bonanza".

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