Budget 2018 – Is education being flushed down the drain?

The Budget has once again not delivered as much as hoped for the education sector, even though an additional £400m of funding for schools was announced yesterday.

The funding will equate to just £10,000 per primary school and £50,000 per secondary school and will be available to spend on equipment and facilities – effectively capital rather than revenue.

This new funding will have a restricted use, so schools may have to tweak their budgets and perhaps transfer some of those improvements marked as revenue to the capital ‘pot’ to release some funds. At least schools will be able to stop the roof leaking, but are unlikely to provide a teacher for the classroom with the leak.

The personal tax allowance will increase to £12,500 from April next year – a year earlier than planned. This will be a welcome boost to school staff across the UK. In addition, those who are higher rate tax payers will also benefit as the threshold will rise from £46,350 to £50,000 from April as well.

Other announcements for the sector were buried within the official Budget document. These include a maths and physics teacher retention trial with the Government providing £10m to undertake a regional trial to test how to improve retention of early career maths and physics teachers.

As predicted, the Climate Change Levy (CCL) is going to be aligned with gas usage to match the same rate of tax on electricity by 2021-22. As I have previously mentioned, schools should monitor their bills closely to ensure this increase is not applied to their bills.

Primary Schools in rural locations will hopefully see a boost to their internet capabilities though. The Budget has allocated £200m to deploy full fibre internet in rural locations starting with primary schools in the Borderlands, Cornwall and Welsh Valleys.

The Government will also amend VAT law to ensure continuity of VAT treatment for Higher Education providers by enabling them to register with the Office for Students in the Approved category to exempt supplies of education.

The sector has received a boost with some additional funding but unfortunately once again the Government has missed an opportunity to boost morale by restricting the money to capital works.

This could be naivety on the Government’s part or they might not trust schools to spend the money in an appropriate way if they don’t restrict the use.

Based on the continued scrutiny of school budgets and finances, I suspect it’s the latter unfortunately and once again schools will feel like the education sector was just another “quick flush” in the Chancellor’s Budget (we can all do toilet humour Phil!).

Phil Reynolds, Senior Manager in the Academies and Education team at Kreston Reeves.

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