Ringfence money for kids, not schools

Three weeks before the June 26 Spending Review, it probably feels like a civil service version of Sir Alex Ferguson's 'squeaky bums time' down Whitehall way, especially for those Departments who haven't yet settled with the Treasury. The seven departments who have settled are rewarded by helping to cast judgement on the others. However, with ringfenced budgets in place for two big spending departments, and the give and take of welfare reform rendering the DWP budget virtually untouchable, it probably feels more like tiller touching than any opportunity for radical re-engineering.

Rumours have been emerging that the Treasury might end the ringfenced budget for schools. Tony Dolphin's blog last week argued that ringfencing the NHS and schools was no longer viable,  pointing out that "by the time these [other] cuts are fully implemented, on the government’s current approach, other departments could have seen their budgets cut in real terms by one-third. This represents a massive reallocation of government spending to the NHS and schools." 

Any abolition of the ringfence for schools' budgets might make the pasty tax and granny tax look like minor media scuffles. Unions such as the NASUWT are already screeching that the Chancellor is not, in practice, protecting school budgets at all. This is reinforced by the IFS' 2011 analysis showing that, although the schools budget has been relatively protected (with the exception of the substantial cut in schools capital spending) as compared to other areas of education, the cash-freeze in per-pupil funding outside of the Pupil Premium means that the majority of schools at both secondary and primary level will see real-term decreases in funding per pupil each year to 2014-15. Schools with a high proportion of pupils eligible for free school meals are being protected from cuts, with a small minority – about 3% of secondary schools and 10% of primary schools – seeing an increase of 5 percentage points above inflation, as a result of the Pupil Premium. Increases in the Pupil Premium since 2011 have probably made little difference to these overall trends.

Despite this data, and although my RSA Academy headteachers and many Fellows won't like this,  I would still argue for a replacement of the ringfencing of schools' budgets with a more expansive ringfence. The overall budget for government spending on 0-19 year olds should be protected for the next three years, but  the schools' budget should be open to redistribution within this ringfence. This would enable the DfE, Education Funding Agency and Local authorities to have the courage to have serious conversations about the most effective use of funding to achieve equitable outcomes for young people, and be prepared to make decisions that would be possibly counter-intuitive, hopefully evidence-based and probably unpopular. In doing this, education funders might want to learn from  the principles of a social productivity spending review created by our 2020 Public Services Hub here at RSA.

My guess is that a proper 'zero-based budgeting' approach to could lead to significant redistribution: away from schools, towards broader services for young people; and away from secondary schools, towards the early years. The graph below from the DfE's business plan shows how school spending dominates all, and leaves little scope for anything that might impact on the  80% of young people's time when they are not at school.

 Joe Hallgarten     Director of Education      @joehallg