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Five Reasons the 2016 Budget Could be Make-or-Break for UK Education

04/03/2016 12:01 GMT | Updated 04/03/2017 10:12 GMT

Headteachers are understandably bearish about their school budgets in the run up to an election: so much depends on an uncertain outcome. They typically rein in expenditure on new classroom resources and hold off on any inessential teacher hires. Normally, though, once a government is elected, confidence picks up - and normal, or sometimes greater-than-normal, spending resumes.

We are not living in normal times for education, however. Before the election, a survey of a representative sample of secondary heads commissioned by the British Educational Suppliers Association (BESA) - which has undertaken such surveys for 25 years - found that 69 per cent were pessimistic about their budgets. Asking them the same question one year on, BESA has found that the number of pessimistic heads has increased to a worrying 72 percent - starting to creep back into the same bleak territory experienced during the recession. This should be contrasted with the previous election where the number of pessimists declined by seven per cent.

The BESA research also showed that only 32 per cent of secondary heads would agree with the statement that, "Our school has adequate funding to provide a suitable teaching and learning environment". In 2015, 50 per cent did - meaning there has been a steep drop of 18 percentage points.

You don't need to look hard to see why. During the Comprehensive Spending Review (CSR) last November, chancellor George Osbourne announced a real-terms cut of six per cent to unprotected areas of its spending and a £600million cut to the Education Services Grant given to Academies (up until recently this had been one of the main "carrots" to convince schools to convert, the focus going forward, perhaps, is more on the stick). This all sounds bad, and it is indeed one of the worst deals the typically ring-fenced UK education sector has ever received, but many had actually expected it to be much worse - with talk beforehand of 20-25 per cent and the FE sector being effectively decimated.

Last week, however, George Osbourne made it clear that he will be swinging the axe for a second time when he announces the first budget of the majority Tory government on March 16th with global economic turmoil and slower than forecast growth meaning "we may need to undertake further reductions". He has even been undertaking an exercise in crowd-sourcing suggestions. Well, here are five key reasons why the education budget must not be cut further:

1) There is an unprecedented teacher shortage, that is about to get worse

During the recession, teaching was a highly sought-after profession for young graduates looking for a secure career path during a time when the private sector was making significant lay-offs. Now things have picked up, however, it's hard for the education sector to compete: the average graduate starting salary is over £5,000 more than that of a teacher, leaving aside the expenditure necessary for teachers to train. It's not just graduates who are being affected, however, over 42,000 teachers left the workforce last year - some to work in better-paid private and international schools, where working conditions can be much better. But many others are quitting teaching entirely for jobs in other sectors. Teachers from overseas have, to a certain degree, plugged the gap. But new visa restrictions mean this is unlikely to be an option for much longer.

As a recent study by TES Global found, 26 per cent of schools are resorting to more supply teachers to fill the gaps, and 16 per cent are now using agencies. A deeply worrying 56 per cent of secondary school leaders are using teachers to teach lessons in subjects in which they do not specialise. BESA research also shows that almost a quarter of secondary schools are seeing budget uncertainty having a high impact on staff spending. This teacher shortage requires decisive action, which requires a greater allocation of budget: to make salaries competitive, to cover increased recruitment costs and to provide existing teachers with greater CPD and support to boost retention rates. If this need isn't recognised by George Osbourne, then the "perfect storm" that teacher recruitment is currently facing is about to get even worse.

2) Schools are already filing for bankruptcy

Schools are not too big, or seemingly too important, to fail. In 2014 the Prospects Academies Trust became the first academy chain in the UK to fold. It did so, according to Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), in a way that was "totally out of the blue". Numerous academies, which now have far greater control of their budgets, are teetering on the brink. In this week's edition of Schools Week, reporter John Dickens has revealed the results of an extremely important investigation into the legacy of the PFI contracts Local Authorities signed during the New Labour administration and which Academies have now faced the burden of. PFI repayments cannot be cut back on during a time of austerity and Schools Week calculates that every state school in England would have to pay more than £1 million each to clear the debt. As they put it: "It now threatens to stop the Conservative government's vision of an "academies revolution" - in which failing schools get new super-bosses - as experienced academy trusts turn their back on struggling schools because of the hefty PFI costs that come with them."

When a schools future hangs in the balance in such a way there is one thing that is absolutely certain - the pupils studying there suffer.

3) There is an urgent need for new school infrastructure and resources

As a joint BESA / NAACE study, launched at the Bett Show revealed, around 1.5million primary-school pupils currently lack decent access to the internet, amounting to 38 per cent of primary pupils in the UK. Despite these issues, things to not look positive in terms of IT investment. A total of 46 per cent of all schools surveyed feel they will be unable to maintain IT investments in the next school year, as belts are tightened.

It is not just IT that is being affected in this way. Almost 40 per cent of secondary heads say they lack sufficient furniture in their schools. And expenditure on key areas like sports equipment, teaching aids, D&T and arts and crafts equipment are all forecast to drop next year.

This comes at a time when secondary schools are about to see a major surge in the number of pupils coming through their doors. The school population is likely to increase by between 800-900,000 pupils over the next decade as a result of the rise in the birth rate in recent years. School rolls have already been on the increase in the primary sector for some time, and this surge in pupil numbers is shortly going to hit secondary schools - which will see a hefty rise of 20 per cent between now and 2024. If secondary schools are going to accommodate them, the fundamental infrastructure of the school needs to be in place - that means broadband and wifi, but it's also of serious importance that furniture and more traditional equipment is not overlooked.

4) Major assessment changes are afoot

A seismic shift in the way secondary school children are being examined and schools will be held accoutnable is coming and in many schools there is currently an eerie calm before an inevitable panic sets in. Progress 8 is coming this September, and the implications are massive.

Its aim is to capture the full progress a pupil makes from the end of primary school to the end of secondary school. This should - in theory at least - mean that regardless of intake schools are on a level playing field. Research has shown that many do not seem to realise just what a significant transformation will need to take place - the whole GCSE grading system goes out of the window for a start - and teachers will certainly require substantial CPD and additional preparation time. As SAM Learning puts it, "the trusty, familiar system of student assessment and school accountability will be swept away entirely".

During a recruitment crisis, and at a time when budgets are being cut back across the board, it appears that these important changes could be introduced at a time when schools are ill-prepared and equipped. The failure to implement Progress 8 sufficiently is a potential crisis-in-waiting that needs to be nipped in the bud now.

5) Cost pressures on schools from pensions and National Insurance are also increasing

Amid all of this, schools are also having to bear the brunt of higher pension and National Insurance contributions and these are rising sharply. Pension costs rose last September due to schools needing to meet increased employer contributions, which went up from 14.1 to 16.4 per cent. From April 2016, this will be followed by an increase in National Insurance due to changes in state pensions.

Research undertaken for the Leeds School Forum has found that, the "combined effect of increases in national insurance, pension contributions, wages and inflation will eat away £378m from budgets in 2015-16, rising steeply to £1.1bn from 2016-17 onwards". There is scant recognition of this in school budgets - and when you hear government officials claim that "spending per pupil is protected in cash terms", the additional pension and National Insurance contributions are not factored in.

All of this paints somewhat of a bleak picture, and it is always a concern that a climate of fatalism and "doom and gloom" may abound in the education sector. This article is not intended to reinforce this sense, rather to point out just how crucial it is that the education sector does not get hit harder than it already has been in last year's CSR. Education secretary Nicky Morgan did a good job fighting against the substantial cuts that were being planned, but may now need to man the barricades again.

All of the long-term future economic prosperity for Britain hinges on the education of the next generation of the British workforce. George Osbourne may retort: "this country can only afford what it can afford". But, as a country, we simply cannot afford for education budgets to be hit further.