The way the money goes . . .

4th December 1998 at 00:00
Education's Pounds 19 billion windfall won't be burning a hole in David Blunkett's pocket much longer. In fact, reports Jon Slater, he only has Pounds 2bn left to spend

How quickly could you spend Pounds 19 billion? For most people it would take a lifetime, a member of the super-rich - such as the Sultan of Brunei - might manage it in a few years. But it seems that in a few short months after the Chancellor's Comprehensive Spending Review, David Blunkett managed to allocate most of education's recent windfall. Ministers might have hoped to spend the next three years basking in the glory of what was undoubtedly a good deal for education. Instead they may be left to rue cashing in too quickly.

In July, everything seemed so rosy. The Government had just announced a Pounds 19 billion bonanza for education. The two years of sticking to Conservative spending plans had paid off and now Labour could reap the rewards.

The moment Gordon Brown sat down, union leaders, left-wing MPs and local government leaders were all rushing to congratulate him and David Blunkett on a much-needed boost for education. The Tories were in disarray, unsure whether to paint the Chancellor as an irresponsible spendthrift or as a modern-day Scrooge with spin.

But it seems that the money may not go as far as first hoped. In under six months since the Comprehensive Spending Review, the Government has allocated Pounds 14 billion worth of new education spending. And as Pounds 3bn of the Pounds 19bn was for Scotland, Wales and Northern Ireland, David Blunkett has now only got Pounds 2bn left in his pot. Any more cash will have to come from savings elsewhere.

Local authorities will receive almost half of the Pounds 16bn for education in England. This is despite ministers' concerns that money is not getting through to schools. Ministers are putting pressure on councils to ensure that money is passported through to education. It could be local government's last chance to show they can be trusted to use money effectively to raise standards.

Pre-election promises to cut class sizes and repair crumbling schools will receive Pounds 2.3bn from the CSR. And lifelong learning is a big winner.

Former college lecturer Mr Blunkett has made sure that after years bearing the brunt of education cuts, further education has at last received some relief. Colleges will get an extra Pounds 1.45bn over the next three years, (assuming the Government does not cut funding in 2001-2), which is a lot when you consider their annual budget is only around Pounds 3bn.

But is that it, after all the hype? Well not quite, but once the cash promised to double pre-school places has been announced there will be little left for ministers to play with.

Ministers' problems stem from the fact that Pounds 19bn was always an inflated figure, spread as it will be over a three-year period. In their eagerness to counter criticism that they were failing to invest in public services, the Government pushed the highest total they could to headline writers.

As a result, expectations among teachers, students and their own backbenchers have been raised to fever pitch - probably not what ministers had in mind when they talked of the need for higher expectations.

In fact, by 2002 the education budget will be just Pounds 10bn higher than it is now. This amounts to an average increase of just over Pounds 3bn per year. And these figures take no account of inflation. If inflation is an historically low 3 per cent until 2002, then in real terms the budget will increase by only Pounds 9bn. This is on top of a total uk education budget of Pounds 38bn for 1998-99.

So how will the Government square the circle. Can it meet expectations without finding more cash? The evidence so far suggests that smoke and mirrors may do the trick.

The Government is attempting to fill the hole it has dug for itself by using the same money a number of different times.

The SureStart programme for deprived families with young children is an example of this at its most blatant. It was first announced by the Chancellor in his CSR speech and re-announced by David Blunkett the following day. It was then launched on July 23 before being press-released again two weeks ago.

However, press and public would soon become wise to such tactics. If this was the spin doctors' only illusion, then the ground would soon disappear from beneath their feet.

The announcement of extra cash for FE last week was a good example of another favourite ploy. The Pounds 725m headline figure included Pounds 255m already announced for 1999-2000, and a "further" Pounds 470m for 2000-1. Fine, you may say, we can obviously discount Pounds 255m already announced. But the ruse is more subtle than that.

Had the cash been announced annually in the normal way, then the "further" Pounds 470m would have been only Pounds 215m. But by announcing two years' money now, the Government can claim credit for the same increase twice. This is because the increase in 2000-01 is measured against this year rather than next and so includes the increase in 1999-2000.

And you may find that money announced at different times for seemingly unrelated projects is in fact one and the same. For example, announcements of capital often include money which has also been trumpeted as helpingto cut class sizes.

If the Government's National Numeracy Strategy is a success then future generations may find it easier to spot such sleights of the hand, but for now it looks as though the Government will continue to get away with it. Just remember when you read a story of extra cash for education that you have probably read it before.

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