Will cash back the promises?;Briefing;Analysis

5th June 1998 at 01:00
Jeremy Sutcliffe says teachers will judge David Blunkett on the outcome of the impending review of public spending .

If David Blunkett is seen with an extra spring in his step these days it's hardly surprising. After completing his first year at the Government's top table he is perceived, by pundits and the public alike, as a popular and effective minister.

Yet the Education and Employment Secretary has yet to convince teachers. For many of them New Labour policies have proved little different from their Tory predecessors - too much pressure and precious little support.

A crucial test of whether Mr Blunkett can succeed in winning over a sceptical profession will come next month, when the Government is due to announce the outcome of its first major spending review.

The Comprehensive Spending Review will set Government spending levels for each of the next three years and review departmental budgets to make sure the money is focused on Labour's main priorities.

Alistair Darling, Chief Secretary to the Treasury, has called the review "a root-and-branch reappraisal of public-spending priorities". And it will make clear how Tony Blair intends to make good his promise to increase the proportion of the national income spent on education by the end of his term of office.

The review exercise promises to redistribute cash. Total departmental spending is running at pound;275 billion a year and the massive social security budget and defence are the most vulnerable to Treasury attack (see graphic).

But while Labour hopes to divert substantial sums from welfare to education over the long term, the medium-term solution is growth in tax revenues.

According to a Liberal Democrat analysis, the country's current finances are so healthy that Chancellor Gordon Brown could afford to spend an extra pound;50 billion on public services between now and the general election.

But impartial observers such as Andrew Dilnot, director of the respected Institute for Fiscal Studies, counsel against a spending splurge. "It's worth thinking back to 10 years ago when the public finances were in very substantial surplus and Nigel Lawson cut taxes substantially. By 1993-4 we were running at a deficit of pound;46bn. That led to massive budget increases in both 1993 and 1994.

"The Liberal Democrat case is relatively weak. It is possible that the economy will continue to grow. But I think the Government would be economically and politically foolhardy to do what they suggest. On the other hand, the Lib Dems are quite right that if we go on with anything like the present spending totals, public services will be in a very bad state."

So what of Mr Blunkett's bid? With so much at stake, he is keeping his cards close to his chest. But there are clear indications that he is arguing for new investment in excess of pound;9 billion, spread over three years.

Such a sum, thought to be on a rising scale, would represent a massive increase on the pound;30bn currently spent each year on education (see graphic).

The big test for Mr Blunkett, of course, is whether he can deliver anything like that amount. Treasury ministers are taking a keen look at value for money in education, with all the byzantine complexity of the school funding system and the worries about probity in further education.

Both the Chancellor and the Prime Minister are eager to deliver tax cuts by election time. And with the Government keen to be seen to be delivering sound financial policies, the scope for increases for education may be limited. Some local government sources doubt that new investment will exceed pound;1bn a year.

But Mr Blunkett appears to be thinking big. He wants to build on the extra pound;2.3bn he has already secured to stave off an immediate funding crisis and to begin tackling a massive repairs backlog (see graphic). The precise details of his bid remain shrouded in Whitehall mist. But his two main priorities are class sizes and social exclusion.

So a crash building programme is likely, to cope with up to 13,000 permanently excluded pupils in special education units. There's also likely to be more money for schools in areas of high social deprivation and to expand the Government's controversial education action zones.

FE and the under-fives will be other priorities, with more places for three-year-olds. But it is believed the request for extra billions will concentrate on school funding and class sizes.

The Education Secretary wants to do more than merely honour the Government's pledge to reduce infant class sizes. He aims to improve pupil-staff ratios throughout the education system.

But if he gets substantially more money the Treasury is likely to demand something substantial in return. One possibility is restructuring teachers' contracts in return for higher levels of pay. That could lead to a longer school day and performance related pay, along the lines suggested by headteachers' leader David Hart last week.

Underpinning Mr Blunkett's bid will be commitments to reach specific targets, notably on literacy and numeracy and school exclusions, by the next election. Failure to hit those targets could spell disaster to the Government - and it is ministerial fear of failure that is likely to be Mr Blunkett's best guarantee of success in next month's spending round.

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