Fears over impact of £600m cut to Education Services Grant

Written by: Pete Henshaw | Published:
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"Currently, this gives £87 per-pupil to academy schools and £15 per-pupil to local authorities." ...

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Concerned commentators are calling for clarity over exactly how the government intends to cut £600 million from education support services.

While chancellor George Osborne protected the schools budget in last week’s Spending Review he is cutting the Education Services Grant (ESG), which is paid to academy schools and local authorities.

The money is spent on things like speech, physiotherapy and occupational therapies, tackling truancy, and carrying out Disclosure and Barring Service (DBS-) checks.

This pot amounted to £1.02 billion in 2014/15 and has already been cut by £200 million in 2015/16. Currently, this gives £87 per-pupil to academy schools and £15 per-pupil to local authorities.

The Spending Review and Autumn Statement 2015 states: “Savings of around £600 million will be made on the ESG, including phasing out the additional funding schools receive through the ESG. The government will reduce the local authority role in running schools and remove a number of statutory duties. The government will consult on policy and funding proposals in 2016.”

Presenting his Spending Review in Parliament, Mr Osborne said: “We will make local authorities running schools a thing of the past.”

The Local Government Association is among those asking for urgent clarification. Cllr Roy Perry, chairman of its Children and Young People Board, said: “The ESG helps ensure that children are getting the education they deserve, from helping to provide speech, physiotherapy and occupational therapies and making sure that children are in school when they should be, to carrying out DBS checks on staff and providing music services in schools.

“It also helps to plan for the new school places that are urgently needed. Last year, £815 million was spent on the ESG, so we need urgent clarification on how the
£600 million cuts will be achieved, and how quickly, without impacting on welfare and standards.”

The Spending Review pledges to support schools to achieve savings, with more details to emerge next year. It adds: “The government will help schools to make savings on procurement, including by exploiting economies of scale. In 2016, the government will publish a set of specific actions to support school leaders (to) target over £1 billion a year in procurement savings by the end of the Parliament through benchmarking, guidance and improved framework contracts.”

Russell Hobby, general secretary of the National Association of Head Teachers, is not convinced: “We are concerned about further cuts to local authority services – a fixation with ever greater autonomy will not help build capacity and sustain improvement. The claim that removing the role of local authorities will save £600 million on the ESG looks uncertain: these support services must come from somewhere.”

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers, said she was “extremely concerned” because the ESG “provides essential support for schools”.

The Spending Review

The autumn Spending Review has set out plans that will see the schools budget rise from £58.2 billion to £61.6 billion by 2019/20, meaning the Dedicated Schools Grant (DSG) and Pupil Premium are to be protected.

However, school leaders have again emphasised that with the range of rising costs, including inflation, increased National Insurance and pension contributions and the one per cent pay increase, schools are still facing significant real-terms budget cuts.

Christine Blower, general secretary of the National Union of Teachers, said: “Schools and colleges face significant costs in addition to inflation – higher employer national insurance and pension contributions will mean an increase of some five per cent in school and college paybill costs.”

Mr Osborne also confirmed in his statement to Parliament that a fairer National Funding Formula for schools would be introduced in 2017/18, with a consultation on its formulation to be published “in the new year”.

This is aimed at ending historical discrepancies in the system that see some schools getting as much as £2,000 more per-pupil than similar schools in other areas.

However, the risk of creating winners and losers under any new funding system makes it a complex issue to tackle. For more on the fairer funding announcement, see http://bit.ly/1NsBmDz

Elsewhere, Mr Osborne pledged £23 billion for school buildings and an expansion of the National Citizen Service so that places for 300,000 students will be funded by 2020.

He also set a target for three million apprentices by 2020, with plans to increase the funding per-place. Larger businesses will also have to share the cost of training, with the Apprenticeship levy set to come into effect from April 2017 and raise £3 billion a year.

A new business-led body is to be set up to set Apprenticeship standards, he added.

"Currently, this gives £87 per-pupil to academy schools and £15 per-pupil to local authorities." Should more accurately read Currently this gives £87 per pupil to academy schools and £87 per pupil in maintained schools to their local authority, which also receives £15 for all the pupils in Academy and Maintained schools within the local authority area.
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