Expenditure (Hansard, 17 November 1983)

§ Sir Keith Joseph

As my right hon. Friend the Chancellor of the Exchequer announced in his statement today, provision for education and science in 1984–85 will be increased by £175 million to £13,052 million from the figures in Cmnd. 8789, as adjusted for Budget changes and 531W so on. Four fifths of the programme is local authority current expenditure which is increased by £177 million. Including the consequences of the 3 per cent. pay factor, there is a net reduction of £2 million in Vote expenditure.

The level of services that can be afforded within this total will again depend on the success of local authorities and others in containing their costs, including the effect of pay and price increases in the current financial year.

The policies outlined below are compatible with the latest forecast of price increases and with pay increases of 3 per cent. in 1984–85.

If both local authority and other pay settlements are 3 per cent. the cash available will allow for policies broadly in line with those of Cmnd. 8789.

LOCAL AUTHORITY EXPENDITURE ON EDUCATION, SCHOOL MEALS AND MILK

It is for local authorities themselves to determine the balance between services within the total relevant planned current expenditure for local authorities in England in 1984–85 of £20,300 million, taking into account Government policies and their statutory duties and responsibilities.

£625 million has not been allocated to individual services in recognition of the fact that some local authorities will spend in 1984–85 more than the Government believe to be desirable and need more time to bring spending into line with the Government's plans.

As with the total, it will be for local authorities to determine how this additional amount is spent but it would be reasonable to assume that each service will receive a share broadly consistent with the present pattern of expenditure.

The total allocated to education in the Government's plans, which will form the basis for grant related expenditure assessments, is £9,796 million. The level of service that can be provided within this cash total will depend crucially on changes in costs between 1983–84 and 1984–85 and in particular on the level of pay settlements for local authority employees.

The figure of £9,796 million includes £263 million for school meals and milk. Some local education authorities have made substantial reductions in net expenditure under this head. I look to all authorities to bring down net expenditure on school meals to the level envisaged in the Government's plans so that the resources available for education are used to best advantage.

SCHOOLS

The plans assume a further decline in the number of school teachers employed as total school rolls continue to fall, but provided the cost of employing staff can be contained, the plans allow for a modest improvement in pupil-teacher ratios compared with January 1983. This would ease the task of providing a broad and balanced curriculum throughout a contracting secondary school system. The situation will vary between authorities depending on such factors as their present level of expenditure, their targets and their ability to redeploy teachers quickly in response to falling rolls.

The Government are committed to improving the effectiveness of the teacher force and consider that there should be some expansion in the scheme of in-service training grants for school teachers which began this year under the Education Act 1962. The Department will therefore be inviting bids from local education authorities for grants to support expenditure up to a total cost of £11 532W million in the academic year 1984–85. The Department will consider in consultation with the local authority associations whether the priority areas within in-service training currently eligible for grant should be extended.

If costs can be contained on the basis set out above and further savings are made through, for example, continued removal of surplus places and the continued achievement of greater efficiency in school cleaning and caretaking, the plans should enable the majority of authorities to make some improvement compared to 1981–82 levels in aggregate in the provision of new books and equipment and in the repair and maintenance of school buildings.

NON-ADVANCED FURTHER EDUCATION

The plans should enable authorities to respond to the growing demand for non-advanced further education provided that pay and other costs are contained and resources are efficiently managed. There are inevitable uncertainties because it is still too early to assess the full impact of the youth training scheme on student numbers. The plans assume some tightening of SSRs: if other non-teaching costs can be restrained it should be possible for the 1981–82 level of provision per student on books and equipment to be maintained in aggregate in the majority of authorities.

The provision of various types of pre-vocational courses and the off-the-job element of the youth training scheme is a rapidly developing part of the work of further education colleges for which very few staff have received specific training. I intend therefore to amend the regulations under the Education Act 1962 to allow grants to be paid to cover the release costs of NAFE lecturers for in-service training. The plans envisage that grant will be paid on £3 million for this purpose in the financial year 1984–85.

HIGHER EDUCATION

The cash available has been set at a level consistent with the previously planned contraction of each sector and reflects the Government's 3 per cent. pay factor. The figures allow for a tuition fee of £500 for home full-time and sandwich course students on courses designated for mandatory awards. Both the UGC and the NAB have agreed to plan for student admissions in 1984–85 which, with admissions to direct grant institutions, are likely to satisfy the lower limit of demand as forecast by the "Report on Education No. 99".

Universities

Subject to parliamentary approval, the total or recurrent grant for universities in the UGC list for the 1984–85 academic year will be £1,265 million. To the extent that the academic year falls partly in the 1985–86 financial year the grant is subject to review in the usual way. It assumes a measure of increased economy in expenditure although provision has been made for some unavoidable cost increases.

The revised grant for the 1983–84 academic year will be £1,211 million. This takes account of revised pay assumptions for the period 1 April to 31 July 1984 and of the appropriate part of the net reduction in the universities' Vote which I announced in the House on 26 July

Equipment grant for the academic year 1984–85 will be £87.8 million, a cash increase of 5 percent. compared with 1983–84.

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Advanced Further Education

Following consultation with the local authority associations, I have determined under regulations made under the Local Government, Planning and Land Act 1980 the quantum of advanced further education (AFE) expenditure within the pre-determined pool in 1984–85 at £580.5 million. This provides for the implementation in 1984–85 of the academic plan for local authority higher education (LAHE) developed by the National Advisory Board (NAB), my decisions on which will be the subject of a separate statement after I have received advice from the NAB committee. The expenditure plans imply continuing reductions in full-time equivalent lecturer numbers and in unit costs.

Cash available for the grant-aided sector, including the voluntary colleges, will be £100 million, requiring as in other sectors increased efficiency in its expenditure.

Student Awards

There will be an increase in the previously planned level of spending on student grants in 1984–85 as a result of higher numbers of students in higher education. The main rates of grant will be increased by 4 per cent. in the autumn of 1984 and the parental contribution scale will be adjusted upwards in line with earnings in the past year. However, contributions from those in the middle and upper reaches of the scale will be increased and the minimum award, payable to those whose parents would otherwise be liable to meet the full cost of maintenance will be halved. Details of the new rates of grant and revised contributions scales, and of revised arrangements for meeting students' additional travelling costs, will be announced later.

CAPITAL EXPENDITURE

Provision for local authority capital expenditure on education at £269 million in 1984–85, takes account of the reduced need for new places in schools, developments in further education, and the expected level of capital receipts. The Department will be writing to local education authorities to inform them of the allocations within the education block.

The Science Budget

The science budget for 1984–85, from which the research councils receive their grants-in-aid, will be £549 million. This allows for the present level of funding to be broadly maintained after allowing for extra provision to assist with increased costs of international subscriptions.

DES Manpower

An extra £1 million will be provided to enable the Department's manpower to be increased, principally to add to the complement of Her Majesty's inspectorate.