Public Expenditure - Children, Schools and Families Committee Contents

Memorandum submitted by Tony Travers, specialist adviser to the Committee



Education expenditure plans as a proportion of gross domestic product (GDP)

  1.1 Table 1 shows public expenditure on education (including schools, FE, universities, and training) in the United Kingdom was equivalent to 5.8% of GDP in 2008-09, following a period of increase since 1997-98. The sharp rise in 2008-09 was, however, in part because of the sudden slow-down in economic growth at the end of that year. Spending had increased as a share of the economy during the period of economic expansion up to 2007-08, so the resources made available over the longer term have increased significantly in real terms.

Table 1

1997-981998-99 1999-20002000-01 2001-022002-03 2003-042004-05 2005-062006-07 2007-082008-09
Education % of GDP4.6 5.55.8

Source: Public Expenditure Statistical Analyses 2009, Cm 7630, London: TSO Table 4.4

1.2 Table 1 shows overall UK public education expenditure as a proportion of GDP. Table 2 shows changes in real terms spending on each phase of education in each year since 1997-98, including those now within the new Department for Business, Innovation and Skills.

Table 2

1997-98 to 2002-03
1997-981998-99 1999-20002000-01 2001-022002-03
Capital1,3591,493 1,6181,9732,286 2,766
Current23,11323,694 25,43627,65130,333 31,272
of which:
Under fives2,2192,273 2,2312,8323,392 3,439
Primary8,2918,445 8,7789,52210,299 10,748
Secondary10,33310,576 11,15011,98113,184 13,656
Other2,2702,400 2,9773,3163,458 3,429
Further Education/Adult & Community 4,2264,1584,274 4,6375,5085,804
Higher Education5,698 5,6736,0385,604 5,9835,958
HE Student Support1,625 1,6211,4561,373 978775
Admin, inspection etc1,621 1,7241,1431,202 1,3541,493
TOTAL37,64238,363 39,96542,44046,442 48,069
2003-04 to 2008-09
2003-042004-05 2005-062006-07 2007-082008-09
Capital3,3543,840 4,0944,1144,233 5,181
Current34,40635,490 37,18937,63939,129 39,592
of which:
Under fives3,8394,085 4,2133,9344,081 4,256
Primary11,39011,528 11,98512,14812,573 12,580
Secondary15,09915,712 16,32216,70317,432 17,668
Other4,0784,166 4,6684,8535,043 5,089
Further Education / Adult & Community 8,5148,7259,516 9,0309,4379,601
Higher Education6,398 6,6367,1347,110 7,4387,654
HE Student Support739 1,0671,0151,220 1,5441,710
Admin, inspection etc1,558 1,7211,7701,708 1,8291,994
TOTAL54,97057,480 60,71760,82063,610 65,732

Source: Departmental Report 2009, Department for Children, Schools and Families, Cm 7595, Table 8.5

  1.3 Table 3 follows the expenditure heads in Table 2, but shows the percentage change in the share of the total taken by each in 2007-08 and 2008-09. That is, it shows changes in relative priority in spending between the most recent two years. There was a clear relative move from current to capital expenditure within schools, with primary and secondary schools' current spending each declining by about half of one percentage point. Under fives had a modest relative increase in its current spending, implying a small overall shift from primary/secondary stages to under fives.

Table 3

2007-082008-09 change between
%% 2007-08 and 2008-09
Capital6.77.9 +1.2
Current61.560.2 -1.3
of which:
Under fives6.46.5 +0.1
Primary19.719.1 -0.6
Secondary27.426.9 -0.5
Other7.97.7 -0.2
Further Education/ Adult & Community 14.814.6-0.2
Higher Education11.7 11.6-0.1
HE Student Support2.4 2.6+0.2
Admin, inspection etc2.8 3.0+0.2
TOTAL100 1000

Source: Derived from Departmental Report 2009, Department for Children, Schools and Families, Cm 7595, Table 8.5

  1.4 Table 4 summarises spending per pupil for schools in each year since 1997-98. Expenditure per pupil has risen in each year and continues to rise faster than the real increase in spending on schools.

Table 4

REAL TERMS REVENUE FUNDING PER STUDENT/PUPIL, 1997-98 TO 2008-09 (1997-98 = 100)
1997-981998-99 1999-20002000-01 2001-022002-03 2003-042004-05 2005-062006-07 2007-082008-09
100103108 119125129 138143151 160166176

Source: Departmental Report 2009, Department for Children, Schools and Families, Cm 7595, London:TSO, Table 8.7


  2.1 Allocations of Dedicated Schools Grant (government resources allocated to councils who must then distribute them to schools) have been announced for the years up to 2010-11. Basic per pupil allocations of DSG will rise by 2.9% in 2010-11. Funding for ministerial priorities (allocated outside the DSG) will add to these figures, leading to an overall year-to-year rise per pupil of 4.3% in 2010-11.

2.2 DCSF and its predecessor DfES have been reviewing the funding of schools for a number of years. A further review is now well under way, with a view to developing a new formula for allocating DSG between authorities which, if it were introduced, would apply from 2011-12 onwards.

  2.3 The current review is intended to examine the possibility of developing a single transparent formula for the distribution of DSG, to take account of relative need and the different costs associated with pupils in different areas. PricewaterhouseCoopers have been commissioned by the DCSF to review a number of issues, including:

    — Additional educational needs.

    — High-cost pupils.

    — Activity-led funding.

    — The Area Cost Adjustment.

  2.4 It is evident from these papers produced for the DSG review that it is following the lines of research that were, for many years, followed by local government finance more generally. The papers present research which attempts to weight the costs of different kinds of needs and costs in relation to pupils and schools. At the end of the process, ministers will have to decide whether or not they wish to move to a new DSG formula. Such a formula would have the advantage that it would more accurately reflect changes in the pattern of need over time than the present arrangements. On the other hand, any move to a new system for allocating money would produce "gainers" and "losers". Redistribution of this kind is rarely popular, particularly at a time of constrained resources.

  2.5 The choice remains between, on the one hand, broadly freezing per capita allocations where they are today and, on the other, allowing for possible redistributions of money between schools in different circumstances. In recent years, the Government has favoured "frozen" allocations, with little school-to-school redistribution, on the grounds that such an approach results in less adverse response from "losers". It is possible they will continue to do so.


  3.1 The "education" part of the Department's responsibilities is laid out in far more detail in the Departmental Report than the sections relating to social services, children and families. Chapter 8 of the report provides extensive information about expenditure in each phase of education but far less about, for example, children's social services. Given the public prominence given to the debate about children's services during the past year, it is (to say the least) odd that there is very little comprehensive information about social service or other non-school provision for children and families.

3.2 Thus, the Departmental Report has a number of references to "children's social services" and to "children's services". In the parts of the report that deal with Lord Laming's report The Protection of Children in England: A Progress Report it is stated that the Government has provided "£58 million in additional funding to support social work recruitment, retention, training and development. This takes the Government's investment in children and families' social work to £130 million in the current 2007 Comprehensive Spending Review period (2008-11)".

  3.3 But there are no spending lines within any of the DCSF tables that show the overall level of funding for children's social services or children's services. The Department is, in effect, announcing additional spending on an unknown base. It is not possible to compare overall funding from year to year, or over time. Chapter 2 includes a Departmental Strategic Objective (DSO2) concerned with "Safeguarding the young and vulnerable" which has a section on "Children's Social Care" that includes targets and indicators relating to important matters such as the time taken to make core assessments for children's social care. However, the report does not state which bodies are responsible for achieving this objective nor how much money they have received in recent years.

  3.4 The failure to report on the total or sub-heads of spending on children's social services or children's services cannot be a result of the fact that funding for such services comes partly from central government grants and partly from council tax. Table 8.6 reports local government spending on education in significant detail (eg, for school meals), regardless of whether funding is derived from central or local sources. Moreover, the Department of Health's Departmental Report includes extensive reporting about adult social services, including detailed expenditure information,[5] despite the fact that spending, as with children's services, is funded partly by council tax. It would be possible to provide equivalent detail about provision for children's social services. However, the Department has chosen not to.


  4.1 Despite efforts to reduce the number of performance-driving objectives, PSAs and targets, a significant number remain in place. There are a number of ways of analysing this process, for example by the scale of the exercise still being undertaken or by looking at achievement against target. Latterly, the Government has set much store by setting cross-departmental PSAs. Page 16 of the Departmental Report states: "PSA 12 sets out the joint responsibility of the Department for Children, Schools and Families and the Department of Health to improve child health and wellbeing in five priority areas to 2010-11". The five priority areas relate to: breastfeeding, school lunches, childhood obesity, emotional health and wellbeing, and parents' experience of services for disabled children.

4.2 These are new indicators and have not been fully developed. However, the presentation of the joint PSAs is significantly different in the Department of Health's departmental report[6] as compared with the DCSF's efforts. The "school lunches" indicator is not mentioned at all by the Health department. The different approaches adopted within the departments' respective reports is not encouraging. Moreover, differences in presentation make it hard for readers to see the links between the efforts made by the two parts of government.


  5.1 Last year, the Committee was critical of aspects of the layout of the DCSF's first departmental report. Efforts have been made in the second annual report to improve the layout and contents, in particular to create a logical set of links between the Department's own Strategic Objectives and the Government's 30 Public Service Agreements (PSAs). Table 1.1 of the Departmental Report 2009 shows the "Outcomes Framework" now used.

5.2 It is clear the DCSF has made substantial efforts towards making links between Government priorities and individual expenditure programmes. But it is still hard to link Strategic Objectives, PSAs, the institutions responsible for delivering public services and the resources such institutions use into a coherent whole. The difficulty the DCSF has in linking the Government's overall objectives, the institutions responsible for service delivery, money spent by these institutions and the indicators used to assess progress remains a problem for the Committee. It is not clear which organisation should be held to account for which elements in the delivery of which outputs and outcomes.

  5.3 Table 8.1 of the report, which is a summary of the Department's total spending is suggestive of the difficulties officials have had in creating a coherent document. The table shows "resource" and "capital" spending under the following heads:

    — Schools.

    — Young People.

    — Children & Families.

    — Area Based Grants.

    — Activities to support all functions.

  5.4 "Schools" is straightforward enough, though it includes quangos such as the Training and Development Agency. "Young People" is less clear, including sub-heads as varied as Learning & Skills Council, Education Maintenance Allowances and the Qualifications and Curriculum Authority. "Children & Families" includes (among others) Sure Start, Special Educational Needs, Child Wellbeing and the Office of the Children's Commissioner. "Area Based Grant" is simply a funding stream. None of these headings appears directly to include children's social services.

  5.5 In Table 8.1 and elsewhere, the DCSF is generally providing a list of funding streams to educational bodies, as opposed to showing the resources given to the institutions charged with delivering outputs and outcomes. Without being able to identify what money is spent on which institutions in pursuit of particular objectives, it will be hard for the Committee to hold anyone apart from the Secretary of State to account.

  5.6 Lastly, the layout and contents of the Departmental Report suggest the Department for Children, Schools and Families has not evolved very far from being a "schools department". Other aspects of its work remain hard to describe and hold to account.

October 2009

5   Department of Health Departmental Report 2009, Cm 7593, Figure A24. Back

6   Department of Health Departmental Report 2009, Cm 7593, pp 237-263. Back

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