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Children and Learners: Resources 2005–06 to 2007–08

The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin): My right honourable friend the Secretary of State for Education and Skills (Mr Charles Clarke) has made the following Written Ministerial Statement.

In his Budget in March, my right honourable friend the Chancellor of the Exchequer outlined continued growth in investment in education and children's services up to 2007–08, showing again the priority the Government give to children and learners.

On 8 July, we published our five-year strategy for children and learners, setting out how the Government will use new reforms to build on substantial improvements in every stage of education and children's services since 1997—from the early years of a child's life to lifelong learning and adult skills.

Today I am giving more detail of how the additional investment announced by my right honourable friend the Chancellor will support the reforms set out in the five-year strategy.

Early Years and Children's Services

Investment in early years and childcare will increase by £769 million between this year and 2007–08. The Government will announce a 10-year childcare strategy in the Pre-Budget Report when more detailed plans will be published. The broad areas to be covered will include:

Investment in children's services will increase by almost £l billion by 2007–08 compared with 2004–05. We will use this investment to start taking forward key areas of reforms set out in Every Child Matters to achieve better opportunities and outcomes for children, young people and their families. We will provide support in the following areas:

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We are committed to rationalising funding streams to local authorities and the voluntary sector and reducing the number of processes. We will discuss with partners how resources can be delivered to ensure funding can be flexibly deployed at the front-line where delivery of services impact most.


We will increase revenue funding for schools by some £3.5 billion overall between 2005–06 and 2007–08. That means that we will have increased revenue funding for schools by about £1,300 per pupil or 45 per cent in real terms in the years since we took office.

Our twin aims are to make the quality of teaching even better than it is now with schools driving their own and others' improvement and to widen opportunities for pupils and teachers through enriching the curriculum. Specific examples of additional investment include:

We look forward in the months ahead to discussions with schools and local education authorities on the best way to deliver all the resources which support
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schools. We will have a new ring-fenced budget for schools from 2006–07 and are committed both to delivering three-year budgets for schools and to rationalising the existing funding streams.

Capital investment in schools will increase by £750 million to £6.3 billion by 2007–08 including ICT and PFI credits to support further improvements to all schools and allowing every secondary school to be refurbished or rebuilt to a modern standard over the next 10 to 15 years.

14–19, Further Education (FE) and Skills

Total funding for FE, skills and to develop the 14–19 phase will rise by £1.5 billion by 2007–08 compared to 2004–05, taking the Government's total expenditure on post-16 (excluding higher education (HE)) to £11 billion.

This is a substantial overall investment, building on the increases in funding in the three years up to 2005–06, which will allow the sector to meet growth in 16–19 participation and enable progress to be sustained on two key agendas: delivering success for all to continue to drive up quality, and reshaping the sector to become more demand-led as set out in the skills strategy.

We will provide greater freedom for colleges and training providers through a new delivery structure. This will be based on autonomy and independence for good colleges and providers, backed up by a risk-based approach to lighter touch inspection but tougher sanctions on poor quality.

This will enable colleges to engage more effectively with employers by offering the training that they need, and to increase employer and individual co-financing of training in line with the benefits they receive. This is important for the sustainability of the sector and future expansion. We want all colleges to be put on a secure financial footing to deliver the important challenges that we have set out in our five-year strategy. Under the new delivery arrangements, successful colleges will be able to grow and prosper.

The settlement includes funding to continue the development of a transformed 14–19 phase of education, in the light of the commitments made in the department's five-year strategy. The working group on 14–19 reform, chaired by Mike Tomlinson, will issue its final report this autumn making proposals for a radical reshaping of the 14–19 phase. The Government have set out the five tests which will shape their response to the proposals, but whatever the response, the direction of travel is clear. We are therefore allocating funds to build on the work over the past few years to improve this phase of education, including workforce training and spreading good practice from the 14–19 pathfinders.

We must support colleges in making the transition to a more demand-led approach in which greater funding comes from employers and individuals, because the training they get is designed and delivered in a way that better meets their needs. We will be looking carefully at how we can best do that. As set out in the five-year strategy, we are committed to incorporating the principles of the employer training
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pilots within mainstream funding for adults, as a way of promoting a more demand-led approach. We will also continue to use the Learning and Skills Council's (LSC) annual business cycle to allocate public funds in a way that better matches our national skills priorities, including through the new level 2 entitlement.

We will continue our drive to upgrade facilities in further education and training with an increase of 31 per cent in capital funding between 2004–05 and 2007–08. We will also bring local decision making and allocations for 16–19 capital provision into to alignment. Working with the department and other partners, the LSC will establish a single capital budget for new 16–19 provision across schools and FE.

The achievements of learners depend on the quality of the teaching and learning they receive, and the way in which their teachers and trainers are themselves trained, managed and supported. We will increase by £70 million by 2007–08 our investment in initial training and continuous professional development for teachers, trainers, leaders and managers in colleges, work-based learning and adult and community learning.

Higher Education (HE)

Government expenditure on higher education will increase by around £2 billion between 2004–05 and 2007–08, taking total investment to almost £9.5 billion. This builds on the significant increases from 2002 Spending Review, and it confirms our commitment to stand by HE in future spending reviews, made in the HE White Paper and repeated during the discussions on the HE Bill.

We will increase the HEFCE grant to allow for further increases in student numbers while maintaining the level of student funding per head in real terms.

HE institutions will also benefit from increases in research funding: DfES recurrent funding for research will increase from £1.236 billion in 2005–06 to over £1.4 billion in 2007–08—around 9 per cent in real terms. Our contribution to total UK science spending, together with the contribution from the Office of Science and Technology, will exceed £5 billion by 2007–08.

On top of all this, HE institutions will receive in full the extra income they generate from charging variable fees—in steady state (ie by 2010) this will be around £1.2 billion extra.

HE institutions will start to receive this extra income in the academic year 2006–07. We expect the first tranche to be paid in two instalments—one half in early 2007, and the other before the end of the academic year.

Full-time students will benefit from an enhanced student support package:

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Part-time students will also benefit from an enhanced package from this autumn. Grants for fees will replace loans and a new statutory fee grant will replace the old discretionary scheme. The poorest students will get £825 in grants for fees and course costs.

Overall, this spending review will help to put excellence in HE on a sustainable footing and will secure world class standards through:

This will enable us to make a significant impact on the funding gap we know exists, and to continue expansion on a sensible, properly funded basis.

Value for money and efficiency

The total investment in education and training is much larger than the figures presented here. Families have always invested and will continue to invest in their children's care and development. Employers invest in the training and development of their workforce. Support for education—in cash and in kind—is growing. We expect co-funding to grow over the spending review period, as individuals and employers become readier to invest in better education and training that meets their needs.

We must ensure that we get maximum value from every pound of additional investment for children and learners. Enabling people across the children, education and skills system to get better value for money from our investment in public services is our aim in the efficiency review. We have identified ways to achieve gains in value for money of £4.3 billion over the spending review period. For example, we will:

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In conclusion, this Statement sets out how we will use the additional resources for children and learners over the next three years to deliver the ambitious programme set out in the five-year strategy. I will be vigilant in ensuring that they are used efficiently and effectively. If resources are not being used to best effect, I will not hesitate to ensure they are switched to where they are most needed, and I will inform Parliament of any significant movements.

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