Chancellor of the Exchequer’s speech detailing the 2019 #SpendingReview

Education and training

The Government is providing a £7.1 billion (£4.6 billion above inflation) increase in funding for schools by 2022-2023, which includes an increase of the minimum per pupil amount to £4,000 for primary schools and £5,000 for secondary schools

The Government is giving additional £700 million to support the education of children and young people with special educational needs

The Government is adding a further £400 million into further education funding, with £210 million of it going into targeted interventions such as English and Maths resits and T levels

The Government is increasing early years spending by £66 million to improve the hourly rate of childcare providers delivering the Early Years Free Entitlement

The Government is providing £7 million to expand Jobcentre adviser support in schools for young people with special educational needs and extending eligibility for Access to Work to internships for disabled people

Commenting, Ryan Shorthouse, director of Bright Blue, said:

“The significant increase in funding for education, to ensure per pupil funding is rising and starting salaries for teachers become competitive, is impressive and welcome. Boosting levels of human capability and creativity is the surest way to secure and sustain higher levels of prosperity in this country.”

“As the revenue for higher education has swelled this decade, further education has been starved of sufficient funding. The increased spending on further education is a welcome start.”

“The best way to improve educational attainment is to start early. In its admirable aim to boost funding for education, the Government should not forget pre-school education. The key here is to boost the quality of its workforce. Any new government funding on formal childcare, including through the Early Years Free Entitlement, should be specifically for this.”

Kevin Courtney, Joint General Secretary of the National Education Union, said:

“As a result of tireless campaigning by the National Education Union alongside other unions and campaigners, we have won a major shift in Government policy on school funding.  Voters, however, should not be fooled. Today’s funding commitments for primary and secondary schools, SEND, 16-19 education and teacher pay go some way towards closing the gap, but are still significantly short of what is required.

“There are many things wrong with the Government’s announcement:

• We were asking for a £12.6 billion annual increase in school budgets by 2022/2023. The Government has only pledged £9 billion. This will not be sufficient to reverse all the cuts to date and the Government is clearly seeking to favour some schools more than others.
• They’ve only pledged £400 million for 16-19 education which is simply not enough. The sector has suffered a 27% real terms cut since 2010 and needs at least £1.2 billion in funding.
• The announcement of an additional £700 million for SEND is clearly inadequate in the face of a £1.7 billion shortfall.
• The Government has said it will deliver a minimum of £5,000 per secondary pupil.  This is not guaranteed.  Many schools could well receive less than this.
• £66m for early years funding is wholly inadequate. The Government needs to invest £300m to restore cuts to early years provision in order to stop providers having to close down. There is still no money mentioned for maintained nurseries that face closure from next August.

“The sums announced today will not reverse all the cuts made to date. We have seen class sizes rise, teaching assistants sacked, and teachers having to scrape together resources just to get by.  A generation of pupils have missed the education they should have received because of austerity. Nothing in today’s spending review will compensate them for this loss.

“Teacher training targets have been missed for six years in a row. The increases in starting pay now being proposed would only return it to its 2010 level in real terms.  No promises have been made for more experienced teachers, whose pay has fallen by around 15% in real terms since 2010.

“England has one of the worst teacher retention rates in the OECD, with almost half of teachers leaving within 10 years and a third within 5 years. Retention rates among older teachers are also getting worse. The NEU wants the government to reinstate statutory progression pay points, in negotiation with teacher unions, so that the pay system is transparent, open and fair and so that proper incentives are put in place for experienced teachers to stay in teaching.

“Not a single penny has been promised until next April but the school cuts are happening right now. These announcements do not go far enough to address the serious issues facing the teaching profession, schools and colleges. So much damage has been done to children and young people’s education. The NEU will continue to campaign to ensure every school and college has the funding and resources needed to give every child the education they deserve.”

Stephen Evans, chief executive of Learning and Work Institute said;

“The Chancellor has committed to turning the page on austerity and investing in growth as part of a decade of renewal. Further education and lifelong learning can play a vital role in this, by boosting economic prosperity and driving social justice.

“After a long squeeze on further education, the £400m extra funding for 16 – 19 education is very welcome. However, it does not fully reverse the cuts the sector has seen, and there appears to be no additional investment for adult education. And with the prospect of apprenticeship levy funding running out, there will be concerns among small businesses about how they will fund investment in apprenticeships and skills.

“With rapid advances in technology set to transform the world of work, participation in lifelong learning has never been more important. Yet our research shows that the number of adults taking part in education and training stands at a record low. Learning and Work Institute has called for a higher ambition for adult skills – backed up with additional investment – to reverse the decline in participation and boost productivity.”

Lawrence Barton, Managing Director, GB Training, said:

“While the Government’s intention to increase investment in further education is welcome, key questions remain.

“How the money will be apportioned is fundamental. How much funding will be allocated to FE colleges and how much will be delivered to the hundreds of independent training providers on the frontline in delivering our country’s much needed apprenticeships revolution. 

“Another central question is whether this extra investment in the sector will be met with funding reform. Additional funding is all very well, but without changing how that money is channelled to learners the Government will be throwing more taxpayers money after bad. The existing further education funding system is broken. Its heavy bias in FE colleges’ favour undermines independent providers and removes the incentive for colleges to drive up standards. 

“Removing the college sector’s monopoly on automatic funding allocations will help transform skills provision in the UK and do a service to independent providers, FE colleges and learners themselves.”

Bill Watkin, Chief Executive of the Sixth Form Colleges Association said:

“The Chancellor used today’s spending round to confirm the £400 million investment in 16 to 19 education announced at the weekend. This is a welcome first step to giving 16 to 19 education the investment it needs. The Raise the Rate campaign will continue to press for a much bigger increase in core funding than the £188 per student announced today, but we now have a foundation on which to build. Our thanks go to the coalition of campaign partners, colleges, schools, parents, students and MPs that has worked tirelessly to secure today’s increase in funding.

“We should not overlook the other elements of today’s announcement, particularly the £120 million to increase funding for high cost courses. We will be making a strong case for this investment to be distributed as widely as possible and not limited to increase funding for a small number of technical courses.

“Our thoughts now turn to next year’s spending review. We must build on the progress made today and work in partnership across 16 to 19 education to secure a long term funding settlement that raises the rate in full and covers the costs of pension and other cost increases that colleges and schools will continue to face.”

University and College Union general secretary Jo Grady said:

“Today’s rushed spending round appears more like frantic electioneering than a long-term commitment to boosting further and higher education. The funding promised to further education will do little to reverse the cuts of over £3bn in real terms that have blighted the sector over the last decade.

“The fact that an additional £2.1bn has been committed to planning for a no-deal Brexit compared to just £400m for further education shows where this government’s priorities really lie.”

Professor Dame Ann Dowling OM DBE FREng FRS, President of the Royal Academy of Engineering, says:

“While the announcement of £400 million of investment in further education is also welcome, the government must commit to significant increases in future spending plans if it is to meet its ambitions for our further education system, which is currently so significantly underfunded.

Jane Gratton, Head of People Policy at the British Chambers of Commerce, said:

“We called on the new government to prioritise funding for further education. This is a welcome step forward, but more is required to provide the quality and quantity of technical and vocational courses the economy needs. The government rightly recognises the key role of further and technical education in addressing the skills gap so additional investment in subsequent spending rounds must be delivered to future-proof the UK labour market.”

Dr Sam Parrett OBE,  Group Principal and CEO of London & South East Education Group, said:

“In the dramatic and unsettled political climate we are currently operating, this week’s spending review offers some slightly brighter news for education and FE. I say slightly brighter…as let’s face it, with year on year cuts in real terms since 2010, the only way is up.

“As we within the sector well know, Further Education enables people to upskill, retrain and improve their career prospects. It offers a second chance to many, as well as being an effective first choice option for others. FE has been undervalued for many years and during this time the sector has lost some excellent provision and talented staff due to chronic lack of funding.

“I am therefore cautiously optimistic about the Chancellor’s announcement. The fact that £400m has been earmarked for Further Education is good news and even though we all know that this is nowhere near enough, it will hopefully help pave the way for further investment and recognition.

“Schools have been promised a funding rise over three years, rather than a one-off increase. This is what we need for FE – sustained investment reflecting confidence in our hardworking sector.

“The promised £400m is being divided up, with the bulk (£190 million) being used to increase the funding base rate by £200 per student. A further £120 million will be used to deliver more expensive STEM subjects, £25 million for delivering T Levels and £20 million to retain teachers and leaders.

“These are undoubtedly the right areas for investment; the Treasury certainly seems to have taken notice of the sector’s pleas for more support. For the more cynically-minded, you could argue that this is well-timed, pre-election activity but I think it’s important to focus on positives and move forward.

“Yes, £400 million is a drop in the ocean, particularly when you compare it to the £2.1bn pot allocated to the planning for a no-deal Brexit. However let’s not lose sight of the fact that this is the first meaningful investment in FE for almost a decade. Let’s continue to fight for our sector and our students with the knowledge that perhaps, finally, the value of FE is being recognised.”

Geoff Barton, General Secretary of the Association of School and College Leaders, said:

“The investment promised by the government is significant and it will be welcomed by schools and colleges after the damage done by years of austerity. But it should be noted that even with this additional funding there will still be a shortfall.

“Analysis by the Education Policy Institute shows some schools are unlikely to see a full reversal of cuts, additional funding for pupils with high needs is short of what is required, and the spending plans only repair a quarter of the cuts experienced in 16-19 education since 2011. In addition, the extra funding will provide no immediate relief to schools and colleges because it will not be introduced until 2020/21. And the spending plans for 16-19 education cover only one year and will therefore mean continued uncertainty for colleges and sixth forms.

“The extra funding is a major step forward and a vindication of the campaign which has got us to this point, but the job is not done on education funding. We will continue to talk constructively with the government about the settlement with the aim of ensuring that every school and college is properly resourced.”

Sam Hurley, Operations Director at The Association of Professional Staffing Companies (APSCo) comments:

“The spending review does nothing to reduce our concerns about the impact of IR35 Off Payroll on the private sector, the flexibility and availability of contractor resources and the implications for the contracting labour market, which will undoubtedly be reduced flexibility and increased costs.”

“We do however, welcome the commitment to give schools a cash boost to improve education, as well as the additional funding to train and teach more than a million 16 to 19 year olds the skills they need for well-paid jobs in the modern economy, though the impact of this won’t be noted for some time yet.”

English as a second language (ESOL) provision

• The Government announced £10 million additional funding for English as a second language (ESOL) provision

Commenting, Sam Robinson, researcher at Bright Blue, said:

“While the Government’s announcement of some extra funding to boost ESOL provision is welcome, it is worth noting that the number of learners enrolled on ESOL courses and the amount of funding available for ESOL has fallen considerably over the past decade.”

“The Government needs to be more ambitious. One way of doing this would be extending the Controlling Migration Fund beyond 2020 and allocating a significant and minimum proportion to ESOL.”

Social care

• The Government announced an additional £1 billion for adult and children’s social care as part of the Local Government settlement

• The Government will also consult on a 2% precept to enable councils to access a further £0.5 billion for adult social care

Commenting, Sam Robinson, researcher at Bright Blue, said:

“The crisis in social care demands attention and it is good to see the Government acknowledging this. The extra £1.5 billion for local authorities announced in the Spending Round is enough to stabilise the system, but is not a sustainable solution. The Government needs to think radically and propose bold solutions, just not in the middle of a general election campaign.”

Cllr James Jamieson, Chairman of the Local Government Association, said:

“We are delighted that today’s Spending Round has delivered a funding package of more than £3.5 billion for our vital local services next year. This is the biggest year on year real terms increase in spending power for local government in a decade and will allow councils to meet the rising cost and demand pressures they face in 2020/21.

“The LGA has worked hard to demonstrate to the Government the financial pressures facing councils next year. We are pleased it has responded to our calls and acted by providing desperately-needed new money next year, including £1 billion for social care and £700 million for children and young people with special educational needs.

“This will help councils as they strive to ensure older and disabled people can live the lives they want to lead, support our most vulnerable young people and allow them to continue to improve local areas.

“Confirmation that key grants will also continue next year provides much-needed stability for councils. The ability to levy an adult social care precept again next year helpfully gives them the potential to raise a further £500 million to help people in our communities who need care and support.

“Today’s Spending Round has provided councils with much of the certainty they need about how local services will be funded next year.

“It shows that the LGA is successfully making the case that investing in local government is good for the nation’s prosperity, economic growth and the overall health and wellbeing of the nation. With the freedom and funding to make local decisions, there is clear evidence that outcomes for the nation improve and the country gets better value for money.

“We are ready to work with the Government on how a forthcoming Queen’s Speech can spark the radical legislative programme that will reignite the devolution process so councils can continue to lead their local areas and improve the lives of their residents.”

Homelessness

• The Government is committing an additional £54 million to reduce homelessness and rough sleeping, representing a 13% real terms increase

Commenting, Anvar Sarygulov, researcher at Bright Blue, said:

“The rise in rough sleeping in the past decade is a national scandal. It is good to hear that the Government is not content with the massive number of people who do not have a place to call home and is providing additional funding to end this crisis as quickly as possible.”

“This country was once close to ending rough sleeping. Other countries are. There should be no excuses for one of the wealthiest countries on the planet.” 

Spending Round 2019: Thirteen things you need to know

The fastest planned increase in day-to-day departmental spending for 15 years was announced today (4 September 2019) by the Chancellor of the Exchequer, Sajid Javid – ‘turning the page’ on austerity.

Today’s Spending Round set out departmental spending plans for 2020-2021 to deliver on the public’s priorities, including health, education, and security. Departmental day-to-day spending is paid for through resource budgets which covers things like schools and hospitals’ running costs, and public sector pay.

1. This is the fastest planned increase in day-to-day departmental spending in 15 years

Day-to-day departmental spending will now grow by 4.1% above inflation in 2020-21 compared to the previous year. For the first time since 2002, no government department will see a cut to its day-to-day budget.

2. There is £13.8 billion more for public services

Compared to the previous year, departments will get a £13.8 billion real term increase in day-to-day spending to deliver on the public’s priorities.

3. This is a fast-tracked spending round so departments can focus on delivering Brexit

This Spending Round concentrates on departmental budgets for 2020-2021. The next multi-year Spending Review will be carried out in 2020.

4. Money for schools is going up

This Spending Round provides schools with a cash boost to give every child a superb education. The increase in funding means that every secondary school will be allocated a minimum of £5,000 per pupil by 2020-21, and every primary school £4,000 per pupil by 2021-22.

There is over £700 million extra funding to support children and young people with special educational needs compared to 2019-20 funding levels, and £400 million to train and teach more than a million 16 to 19-year olds the skills they need for well-paid jobs in the modern economy.

5. Promises to the NHS are being delivered

This Spending Round reaffirms the government’s commitment to the NHS, giving it a cash increase of £33.9 billion a year by 2023-24 compared to 2018-19 budgets.

A new £1,000 personal development budget over 3 years for every nurse, midwife and allied health professional, will also help to make the NHS secure for the future.

6. There is an extra £1.5 billion for social care

Councils will have access to a further £1.5 billion for social care – £1 billion through a new grant and £500 million through the adult social care precept. This will support local authorities to meet rising demand and continue to stabilise the social care system.

7. 20,000 more police officers will be recruited to keep our streets safe

The most generous settlement the Home Office has received in the last 15 years will help fund the government’s commitment to recruit 20,000 additional police officers, and tackle child sexual exploitation

8. The crackdown on crime will be supported by 10,000 additional prison places

To ensure an effective criminal justice system there is extra funding to begin delivery of the 10,000 additional prison places, improve security in prisons, and support the ongoing reform of the probation system to provide better supervision and rehabilitation of offenders.

9. The Armed Forces will get a £2.2 billion funding boost

£2.2 billion in additional funding made available for the UK’s world-class Armed Forces will ensure they can continue to modernise and meet the ever-changing threats to national security. This ensures the government will continue to exceed its commitment to grow the defence budget by 0.5% in real terms, with the UK continuing to exceed the NATO target.

10. Over £200 million will be spent to transform bus services

A £490 million cash increase in the UK’s vital transport network will help businesses, people and goods travel around the country. This includes extra funding to make buses more environmentally friendly, rail track maintenance to ensure more reliable journeys, and continued support for development of major projects.

11. There is Brexit funding for after the UK has left the EU

£2 billion in 2020-21 will help the UK to establish a new relationship with the EU, and capitalise on the opportunities created by Brexit.

12. Decarbonisation, air quality, and biodiversity will get a £90 million funding boost

The UK is a world leader in clean growth and this Spending Round provides additional funding to accelerate decarbonisation schemes, improve air quality and to protect and enhance biodiversity. At least £250 million will also be provided to the international climate and environment funds, including the Green Climate Fund – the leading fund dedicated to helping meet the landmark Paris Agreement on climate change.

13. Public services are being funded while keeping control of the public finances

This Spending Round provides more money to support vital public services while being delivered within the government’s existing fiscal rules. The government will review the fiscal framework alongside an updated economic and fiscal forecast and set out a new economic plan at the Budget.

Ryan Shorthouse, director of Bright Blue, said:

“Over the past decade of fiscal retrenchment, some government departments and services have been disproportionately deprived of funding, as others have been protected. This unbalanced and unfair approach will rightly end next year. Some public services that have been palpably struggling, such as further education, local councils, social care and the Crown Prosecution Service, will get necessary cash injections.”

“The significant increase in funding for education, to ensure per pupil funding is rising and starting salaries for teachers become competitive, is impressive and welcome. Boosting levels of human capability and creativity is the surest way to secure and sustain higher levels of prosperity in this country.”

“It is intriguing that this Conservative Government, both with its new enthusiasm for increased spending and leaving the European Union without a withdrawal agreement, seems to not be very conservative, fiscally or institutionally. Public debt is still historically and internationally high, and needs reducing if future taxpayers are to avoid being burdened. Politically, if the case for fiscal discipline is not being made, this could weaken public support for a centre-right government.”

Professor Dame Ann Dowling OM DBE FREng FRS, President of the Royal Academy of Engineering, says:

“We welcome the government’s commitment to increasing levels of research and development spending to at least 2.4% of GDP by 2027. This is essential if the UK’s world-leading engineering research and innovation base is to reach its full potential and deliver economic and societal benefits. The government should prioritise developing a roadmap setting out how this target will be achieved as outlined in the National Engineering Policy Centre’s recent publication Engineering priorities for our future economy and society. Reaching the target will require a significant boost in public funding and an environment that encourages further private sector investment, as well as international engagement. EU research and innovation programmes have made a vital contribution to the success of the UK’s research and innovation base and a no-deal Brexit could dramatically reduce our chances of being able to participate in these programmes.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“There were encouraging words from the Chancellor on infrastructure and a welcome boost for further education. But, despite the big headline figures this Spending Review was limited in scope and detail, highlighting that the ongoing Brexit impasse continues to frustrate much-needed Westminster action on the domestic business environment.

“If the economy continues to slow as many expect, the government’s ability to meet its spending commitments will be limited. While the immediate focus should be on avoiding a messy and disorderly Brexit, bold measures are needed to boost business confidence and stimulate growth – which are critical for businesses to generate the wealth to underpin the tax revenue needed to meet these spending promises.”

Sam Hurley, Operations Director at The Association of Professional Staffing Companies (APSCo) comments:

“The additional £4 billion (£2 billion already announced and a further £2 billion today) of funds may be necessary should a no-deal occur. However, preparations take time, even if well-funded. As such, we fully expect that there will still be a significant impact on businesses, including the professional recruitment industry and its clients, in the event of a no-deal exit next month.”

“Additional spending in the public sector generally flows down into a loosening of constraints on recruitment and contract spend, but we wouldn’t expect any reversal on existing framework rates, although hiring numbers may increase.”

Commenting on infrastructure spending, Mike Spicer, Director of Policy at the British Chambers of Commerce (BCC), said:

“The Chancellor called for an ‘infrastructure revolution’: businesses agree – the UK’s transport and digital infrastructure is in urgent need of modernisation. However, the statement was long on ambition but short on detail: businesses await the government’s infrastructure strategy to be published later this year. It’s time to stop the delays and press on with transformative projects like Heathrow’s third runway, commit to deliver all phases of HS2 and support industry plans for a shared rural network to extend mobile signal coverage.”

On the extra £2bn Brexit Preparedness funding, Suren Thiru, Head of Economics, at the British Chambers of Commerce (BCC) added:

“The acid-test for extra funding for Brexit preparedness will be whether it is used to support businesses at the front line to deal with the practicalities of leaving the EU. HMRC in particular must be given the resources they need to support exporters and importers as they navigate the UK’s exit from the EU.”

On European funding and the future UK Shared Prosperity Fund, Suren Thiru said:

“It is inexcusable that three years on from the referendum not a single item of useful information has been published by the government on replacing European structural funds in the UK after Brexit. These funds account for around £2bn of expenditure in the UK each year, financing local economic development and business support schemes across the country. Even the most basic features of the mooted ‘Shared Prosperity Fund’ remain unexplained to businesses, including its objectives, scale and geographic dispersity. Having missed yet another chance to publish its plans, the government can’t stall any longer.”

Paul Bradbury, Executive Director, Civica, said:

“During one of the most uncertain times in UK political history, the new Chancellor has declared “the end of austerity” and announced £13.8bn in extra spending. The news that no department will face any further cuts will be music to the ears of public sector leaders, as the 4.1% rise in real-terms day-to-day spending is the biggest increase in 15 years. However, whilst there are a lot of headline grabbing figures in this fast-tracked spending round, it only concentrates on departmental budgets for 2020-21, rather than the usual three-year spending review, which doesn’t necessarily lift uncertainty in long-term budget planning.

“Health, defence, the police and education have all seen significant promises of extra resources, but feedback from local authorities suggests that this is small in comparison to cuts they’ve suffered over recent years. This increase of resources needs to continue for several years for councils to have the foundation to innovate and improve services for citizens. Demand for services will only increase and expectations from citizens that need private sector levels of investment to keep up can’t be resolved in a year. Investment in technology is a critical factor to deliver improved experience of interaction with public services. Whilst the move is a promising turn in turbulent times, the public sector, and local government in particular, needs a longer-term budget strategy to provide the services that citizens and businesses need.”

Tony Wilson, Director of the Institute for Employment Studies, said:

“The Spending Round set out the government’s plans for day-to-day and capital spending for 2020-21. However with a general election now looking all-but certain in the meantime, the announcements mainly serve to set out the Conservative Party’s stall for that contest: namely to end, although not reverse, a decade of fiscal austerity.

“The big winners, as expected, are the NHS, where spending will rise by £6.2 billion in real terms; education (up £3.8 billion); local government (£2.9 billion), Defence (£2.2 billion) and policing (£750 million).  Underneath this, there is welcome new funding for social care (although still no long-term plan), special educational needs, further education, homelessness prevention, workforce investment and health education.

“After a decade of belt-tightening, the major challenge for many of these public services will now be in recruiting and resourcing to deliver on this new investment.  As we set out in July, the plans to recruit 20 thousand new police officers will bring a host of complex workforce challenges – while health, social care and further education already face a range of staffing shortages even without funding being increased.

“It is also important to note that while this Spending Round may end austerity, it will not reverse the significant cuts that have been made to public budgets since 2010.  Indeed it is highly likely that funding for most public services will still be below the levels seen under the Coalition Government (with the exception of Health, Education and Policing).

“On Brexit, the decision to commit a further £2 billion next year for Brexit looks sensible. However in the event that we do crash out without a deal, then this will be significantly less than is needed to deal with the consequences.  As we have said previously, if unemployment were to rise by 700 thousand as the Bank of England forecasts, then the costs of maintaining the benefits and employment regime is likely to cost more than £1 billion on its own.

“Finally, the Spending Round focused only on Departmental day-to-day and capital spending, and made no changes to social security and other demand-led spending – so the announcements swerved any decisions on the benefits freeze, housing support and Universal Credit.  This is somewhat unusual, as previous spending rounds in 2010 and 2015 have included welfare changes, although the one-year 2013 spending round similarly only focused on Departmental budgets.  So while austerity may have ended for public services, it has not yet ended in social security and welfare – meaning the government will have a lot less room for manoeuvre.”