Spending Review

This article originally appeared in Leader magazine
Spring Term 1 2021

There were no surprises or rabbits out of hats in the Chancellor’s spending review. Nevertheless, confirmation of funding already promised was a huge relief for the education sector. Here, ASCL Specialists Julia Harnden and Louise Hatswell explain what it means for you. 

On 25 November 2020, the Chancellor of the Exchequer Rishi Sunak delivered the spending review (SR). The government uses the SR to set departmental budgets for day-to-day spending and capital investment and, usually, they cover three or four years. Extraordinarily, both this SR and the previous one were single-year reviews, with the exception of parts of the education budget and the NHS. These multi-year settlements make up a significant portion of what the Chancellor has available to spend.

What does this mean for you?
There were no big surprises in the Chancellor’s announcement. Much of what we heard was confirmation of previous commitments, which, of course, was welcome.

For schools (5–16 year-olds) and high needs (0–25 year-olds), an additional £2.2 billion revenue funding will be available in the 2021/22 financial year. This will be the second year of the three-year settlement for schools and high needs, first announced in September 2019. This means that the indicative national funding formula calculations published in the summer for the 2021/22 funding year are still relevant. They will be adjusted in due course to reflect the October census, and local authorities (LAs) retain some flexibility in how the final distribution to schools is made.

For 16–19 providers there had been no such commitment, and the SR was disappointing. However, £293 million will be added to the pot for these institutions (including school sixth forms) in 2021/22, but this only maintains the learner rate at £4,188 for a growing cohort of students. We do expect that the government will also continue to provide a range of hypothecated grants, including the advanced maths premium and the high value course premium, and the rollout of the T level programme will continue as planned.

Capital ideas
The poor state of the school and college estate in England is well reported, so it was a relief to hear that plans for capital investment, originally made earlier in the year, will go ahead.

For colleges, this means a £1.5 billion commitment over the next five years, with some of this funding already released in the current financial year.

For schools, a rebuild and refurbish capital pot was confirmed. We know that the plan is for this to improve or rebuild 500 schools over the next ten years. However, the scheduled rollout of this project is still unclear and given the condition of many schools, we know we need large amounts of investment in the short-term. We await more details about this and information about the first 50 schools that will benefit, starting in 2021. In addition, £1.8 billion schools condition funding has been announced.

And the £300 million capital spend to create new school places for children and young people with special educational needs and disability (SEND) is welcomed.

Addressing holiday hunger
For a while now, ASCL has been campaigning for eligible children and young people to receive free school meals all year round, not just in term-time. We have worked with the Feed Britain Better campaign and Bite Back 2030, to push this initiative forward, and footballer Marcus Rashford has been hugely influential in the national campaign, which reached a peak during the pandemic. The outcome is a pledge to extend the Holiday Activity Fund (HAF) in 2021, with £220 million available for LAs across England. This money will be distributed by the Department for Work and Pensions (DWP) to LAs (tinyurl.com/y42zlcfg).
Aside from core revenue and capital funding, it was good to see the Chancellor recognising the value of the early career framework (ECF) and allocating £22 million to support the ECF mentor scheme, which ASCL has worked on closely with the DfE to develop.

Pressing pause on public sector pay
The Chancellor announced that public sector pay would be ‘paused’ next year. For staff working in the education sector this has come as a blow after their relentless work on the frontline throughout the pandemic. The Institute for Fiscal Studies (IFS) reported that the pay freeze represents just 1% of the amount the government has committed in responding to the coronavirus pandemic so far.

How will this affect education staff?
The Chancellor said that public sector workers earning below the median wage of £24,000 per year would be guaranteed a pay rise of at least £250. We now understand that the £24,000 is the full-time equivalent (FTE) salary, meaning that any workers earning £24,000 for less than full-time hours/ weeks would not receive it.

Those who work full-time will receive £250. Those who work less than full-time, either hours or weeks, that is, term time only, will receive a pro-rated amount in line with their pro-rata salary calculation. So, for example, a member of support staff who works all year round but only works three days per week, would have an FTE of 0.6 so they would receive £250 x 0.6 = £150.

For teachers, the only pay ranges that would fall under the £24,000 FTE would be the lowest three points on the unqualified teacher pay range. Clearly, this announcement also causes contention in relation to the government’s manifesto commitment to increase starting salaries for teachers to £30,000 by 2022/23.

It is our understanding that HM Treasury has since confirmed that the government still intends to deliver on this pledge. To do this would mean an increase in over £4,000 to starting salaries in September 2022. If no other increases were awarded, this would mean that teachers starting on point M1 would earn more than teachers on point M2 and point M3.

ASCL will continue to make the case, and demonstrate the need, for the erosion of pay since 2010 to be restored. While we completely acknowledge the economic pressures caused by Covid-19, public sector staff have continuously gone above and beyond throughout the pandemic and deserve to be rewarded for this, not penalised.

On 15 December, the Secretary of State issued the remit to the School Teachers’ Review Body (STRB) for its 31st report. As expected, in light of the Chancellor’s announcement, the remit has a very narrow focus. Our joint union response to the announcement and any further updates will be available on our website and in our newsletters.

And hot on the heels of the 2020 SR, we can start to plan for a multi-year spending review in 2021. 

Louise Hatswell
ASCL Conditions of Employment Specialist: Pay

Julia Harnden
ASCL Funding Specialist

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