Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 400-419)


13 DECEMBER 2006

  Q400  Mr Gauke: According to the IFS only £0.1 billion relates to capital, and that is not going to schools. I asked Ms Brivati for an answer and she was not able to give the figures yesterday. She said she would write to me before the close of play. We have an answer but it does not begin to address the question of what new money announced in the PBR related to capital expenditure. We have the evidence from the IFS; they say there is nothing for schools on capital. They say there is more money for colleges. Do you dispute that?

  Mr Brown: Which year are you talking about? What we have done is we have announced 2006-07 expenditure, we have announced new figures for 2007-08, we have announced new figures for 2008-09 and we have announced figures for 2009-10 and 2010-11. Which figures are you talking about—which year—so we can go through each one of these years and clarify it for you?

  Q401  Mr Gauke: For the next year I think we are talking about £0.1 billion. Is that right?

  Mr Brown: We are talking about expenditure per individual school and then we are talking about additional money for colleges as well. Yes.

  Q402  Mr Gauke: So what is the breakdown?

  Mr Brown: I said that £170 million had been put into schools and £120 million of that was for English schools[1]. I think you are right[2]; £100 million has been put into further education colleges. So it is additional money.

  Q403 Mr Gauke: Let us move on to current spending. You quoted, again, this morning the extra £200 going directly to schools.

  Mr Brown: That is what I have just mentioned.

  Q404  Mr Gauke: Indeed, the £200. Again, according to the IFS, £120 of that was announced before the last Budget, £60 of it was announced at the last Budget, which leaves only £20 per pupil new money. Is that correct?

  Mr Brown: I hope you support the fact that we have actually increased—

  Q405  Mr Gauke: Is that correct?

  Mr Brown: It is additional money.

  Q406  Mr Gauke: The announcement was £20 new money. That is the effect. I take the whole figure as £200, but £180 of it has been announced before. Do you agree?

  Mr Brown: I do not think it is £20 because there is a different figure for primary schools and secondary schools. So it is £225 per pupil in secondary schools, and £200 for pupils in primary schools. I think, if I am right, there is a bigger rise for primary schools as opposed to secondary schools. It does mean that the typical primary school will be around £50,000 in 2007-08 and the typical secondary school will be £200,000, and I raised it from what I had already announced in the Budget.

  Q407  Mr Gauke: Chancellor, the reason why I am asking these questions is because the central political message of your Budget was "more money for schools".

  Mr Brown: So it is.

  Q408  Mr Gauke: I look at the press beforehand. I do not think they have made all this up. This is from the Press Association: "Mr Brown is expected to announce new cash for refurbishment of thousands of state schools"; we have got the BBC: "The Chancellor is expected to announce big investment in schools and colleges"; the Financial Times: "Gordon Brown will put fresh investment for schools at the heart of Wednesday's Pre-Budget Report". The figure we are talking about is £20.

  Mr Brown: No, it is not.

  Q409  Mr Gauke: That is the new announcement.

  Mr Brown: Mr Chairman, we have got to get this in its proper perspective. We have announced money for this year (that is 2007-08—the coming year); we have also announced money for 2008-09, 2009-10 and 2010-11. The total cumulative announcements run into billions, and because by 2010-11 we are spending £10 billion on education and £8 billion on schools, it is right to say that this is the biggest ever capital investment programme. If you want to go back to 2006-07, current expenditure, we have the additional expenditure per pupil, we have the increase in the Every Child a Reader programme, we have the increase in the amount of money going for personal tuition, we have the increase in the London—

  Q410  Mr Gauke: Chancellor, this has all been announced before. There is very little new money. This is what The Sun said the morning before: "Brown's Class Act. Chancellor's refit for 21,000 schools to cost billions". It is old money.

  Mr Brown: It is not old money.

  Q411  Mr Gauke: Chancellor, this is spin. This is pure spin. You have announced nearly all of it before. £200, all but £20, has been announced before. The billions on capital have all been announced before. You are the biggest spin merchant north of Shane Warne. You make the Prime Minister look like Ashley Giles. Is there any wonder there is a lack of trust in politicians.

  Mr Brown: Mr Chairman, we have just announced the biggest programme of education investment in the history of the country. There is £10.2 billion for education by 2010-11; there is £8 billion for schools; we announced new figures—

  Q412  Mr Gauke: Which you have announced before.

  Mr Brown: No, it is not true. We have announced new figures for the years 2007-08 (I have just given you them) for current and for capital expenditure. We have announced new figures for 2008-09 and we have announced new figures for 2009-10. Unless you are prepared to deny that the cumulative effect of all the announcements we have made is the biggest educational investment programme in our history—and I would like to know whether the Conservative Party is prepared to support this new investment in schools—I think what you are saying is completely misleading. We have just put billions more into the schools and the colleges as well.

  Q413  Mr Gauke: Chancellor, would you accept that the rate of increase of capital expenditure on schools and education as a whole is dropping? From 1997 to 2007 it was going at around 15-16% and from 2007 to 2011 it is going to be round about 4.9% for schools and 4.3% for education as a whole.

  Mr Brown: In real terms it is much higher than the inflation rate and is probably going to be the highest of any of the major departments, simply because we have this huge additional programme of investment in schools. The test of this is going to be the number of primary schools that are given new facilities and the number of secondary schools that are given new facilities. I am surprised that Members of this Committee think it is almost a spin to announce that schools in our constituencies—and almost every one of our constituencies benefits from this Building Schools for the Future programme—are not going to get money when they are going to get money. We are going to have refurbishments of schools to give—

  Q414  Mr Gauke: It has been announced three or four times. You keep re-announcing it. There is very little new money.

  Mr Brown: I am sorry, it has not been announced three or four times, and you have not proved your point because I have just told you that in 2006-07 there is more money; in 2008-09 there is more money; in 2009-10 there is more money and in 2010-11 there is more money. In each of these years I have given new figures to the House of Commons for the amount of investment that is taking place. Okay, the Conservatives are not interested in the amount of investment going into the schools; they are simply interested in what sort of figures and percentages and everything else. The fact of the matter is more investment is going into our schools.

  Q415  Mr Gauke: Chancellor, can I look at public expenditure more generally, briefly. According to the projections that we have within the PBR, from 2008-09 to 2011-12 it is forecast to grow at 2% or below in real terms. That is above inflation but below, presumably, the growth rate of GDP. Are you content that as a consequence public spending will be falling as a percentage of GDP?

  Mr Brown: You will get the announcement of the final results of the Comprehensive Spending Review when we publish it during the course of next year.

  Q416  Mr Gauke: The projections are that public spending will fall as a percentage of GDP.

  Mr Brown: These are projections; you will get the final announcements during the course of next year, and all I can say is that these are the projections.

  Q417  Mr Gauke: Do you have any objection in principle to public spending over these years falling as a percentage of GDP, as you are assuming?

  Mr Brown: I have always said you have to do what is right for the country, and what is right for the country may be, in some years, percentages going up and, in some years, percentages going down, but we are going to do what is right for the country. Final figures will be published when we have completed our review.

  Q418  Mr Gauke: If public spending is above the rate of inflation but falling as a percentage of GDP, do you consider that to be a cut?

  Mr Brown: I think you will have to wait until you see the final figure—

  Q419  Mr Gauke: Theoretically, if public spending is falling as a percentage of GDP is that a cut?

  Mr Brown: You have got this wrong, because in every Budget a government must make a decision between the balance between tax and spending and the stability of the economy. As far as the results of our public spending review are concerned, these will be published during the course of the next year. You will just have to be patient and wait and see what the results—

1   Note from Witness: This refers to current spending, as the answer to Q403 states. Back

2   Note from Witness: The correct figure is £250 million, not £100 million. Back

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