Expenditure Plans (Hansard, 12 November 1985)

§ Sir Keith Joseph

As my right hon. Friend the Chancellor of the Exchequer announced in his statement today, provision for education and science in 1986–87 will be increased by £300 million to £14,320 million from the figures in Cmnd. 9428.

There is an increase of £88 million in vote expenditure: within this, additional provision has been made for science through the science budget and the universities vote, for additional places in higher education in science, engineering and technology, and for the expected higher cost of student awards. Provision for vote expenditure in 1987–88 and 1988–89 has been increased by £84.5 million and £69 million respectively.

The total allocated to local authority current expenditure on education in the Government's plans is £10,815 million, £210 million more than the plans in Cmnd. 9428 as adjusted for Budget changes and so on. The total includes provision of up to £37 million in England for schemes of mid-day supervision (see paragraph 12 below). This represents an increase of around 5.8 per cent. in cash over the sum allocated to the service in 1985–86, after allowing for the transfer to the Manpower Services Commission of funding for some work-related non-advanced further education. It is, however, for local authorities to decide the balance between services within total relevant planned current expenditure in England of £22,250 million, taking into account their statutory obligations and Government policies.

The Government have not yet taken decisions about their provision for total local authority current expenditure in 1987–88 and 1988–89. In the meantime the 1986–87 total and its distribution, including the figures for local authority education, have been rolled forward for a further two years. However, in setting the level of the reserve, account has been taken of the possibility that local authority expenditure in 1986–87 and later years may exceed the Government's plans. The provision to be made within the 1987–88 rate support grant settlement will be considered next year in the light of authorities' budgets for 1986–87 and other factors.

Schools

Overall, school rolls will continue to fall, and the plans assume that authorities will secure a further reduction in the number of school-teachers they employ. Provided that the cost of employing staff can be contained, there should be scope for a continuing modest improvement in overall pupil:teacher ratios, compared with January 1985. The situation will vary between authorities in the light of local circumstances and the speed at which teachers can be redeployed in response to changing needs. The Government remain willing to make an addition of up to £160 million to the 1986–87 plans, and further sums in later years, if a satisfactory agreement is reached on schoolteachers' duties and salary structure.

I look to local education authorities to review those aspects of their provision which offer the prospect of 103W savings. Authorities continue to make good progress with the removal of surplus school places. I expect them to achieve the target of 1,125,000 places removed by March 1987: and am now consulting the local authority associations on the targets which I intend to set for later years. There is ample scope for reducing net expenditure on school meals, as is shown by the savings achieved by certain authorities in a variety of ways. The Audit Commission has drawn attention to the opportunities for greater efficiency in the caretaking and cleaning of schools. If local education authorities succeed in making the further savings for which there is scope, and contain their costs, the plans afford them the opportunity to redeploy resources in the light of local priorities and in the support of policies which give the most direct educational benefit to pupils.

Non-advanced further education

The overall level of resources proposed should enable authorities to respond to the growing demand for NAFE provision of many kinds. There are uncertainties about student numbers, particularly the effect on participation of the addition of a second year to the youth training scheme, but the plans assume increases in the participation rates of 16 and 17-year-olds.

The overall student: staff ratio for NAFE remained stable between 1983–84 and 1984–85 at 8.5:1. In the light of the Audit Commission's report on further education and other evidence, I believe tighter academic staffing in this sector to be desirable. The expenditure plans assume that the SSR figure will be raised by around 6 per cent. between 1984–85 and 1986–87. Provided that authorities make such staffing economies and contain their costs generally, the plans should allow some scope for redeployment to the benefit of the quality of education. The Government and the local education authorities are now engaged in a joint study of ways of improving efficiency in NAFE.

The plans for net expenditure on NAFE assume the transfer of £105 million in the financial year 1986–87 to the Manpower Services Commission to enable it to purchase a proportion of work-related non-advanced further education on the basis of development plans and annual programmes prepared by local education authorities.

In-service training

Both the Government and the local authorities attach importance to in-service training as a means of further developing the skills of teachers in schools and in further education. I have agreed with leaders of the local authority associations that the scheme of in-service training grants should be further enlarged in 1986–87. Grant of £22 million will be available in the 1986–87 financial year and three new priority areas will be included in the scheme: training to assist school teachers to respond to ethnic diversity, microelectronics in schools and management training for FE teachers. In addition, the scheme will provide for a special programme to support the introduction of the general certificate of secondary education.

For the future, the Government will introduce this Session legislation to extend the powers of the holder of my office to grant-aid in-service training. Expenditure to 104W be supported by this new grant, which will be implemented from the 1987–88 financial year, will be determined each year.

Education Support Grants (ESGs)

The education support grants programme enters its second year in 1986–87. I have already invited local education authorities to bid for a programme of 16 activities of national priority in 1986–87 at a cost of £40 million to be supported by grant of £28 million. All local education authorities have accepted the invitation to bid. Additionally, the Government will now invite local education authorities to bid for resources under the programme to support schemes for the supervision of school pupils at mid-day. Subject to the approval by Parliament of legislation to raise the ceiling on expenditure assisted by education support grant from 0.5 per cent. to 1 per cent. of local authority current expenditure on education, up to £37 million will be available under this programme for mid-day supervision schemes in England in 1986–87. They come from the £1,250 million over four years which the Government have conditionally set aside for the reform of teachers' salary structure associated with an agreement on their duties. Up to £10 million within this total is also being made available for mid-day supervision in 1985–86.

Local Authority and Voluntary School Capital Expenditure

For 1986–87, £294 million will be available for allocation to local education authorities for capital expenditure on schools and colleges. When account is taken of education authorities' ability to make use of in-year and accumulated receipts and other flexibilties this should enable them to make progress with the removal of surplus school places. The Department will be writing in due course to local education authorities to inform them of the allocations within the education block. A further £2.7 million will be allocated to projects to provide additional places in science and technology in local authority provided higher education as part of the engineering and technology programme. Provision for grant to voluntary aided and special agreement schools has been increased by £6 million in each year in recognition of the increased pressure on the governors of these schools to undertake repairs in accordance with their duties under the Education Acts.

A revised system of control of local authority capital spending is under consideration for later years: the totals available for allocation in 1987–88 and 1988–89 will be considered in the light of the outcome of this consideration and other factors.

Higher Education

The cash available for each sector is set out in the following paragraphs. The figures allow for a tuition fee of £536 for home full-time and sandwich course students on courses designated for mandatory awards. The UGC and MAB plans for student admissions in 1986–87, together with admissions to other grant-aided institutions, are likely to satisfy the level of demand indicated by the revised variant Y projection shown in the Green Paper "The Development of Higher Education into the 1990's" (Cmnd 9524).

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Student Awards

Provision has been made in each year to meet higher costs arising from increased student numbers and a higher proportion of mandatory award-holders within those numbers. Details of new rates of award and revised contribution scales will be announced later.

Engineering and Technology Programme

I am providing within my programme for the continuation in 1988–89 and later years of the engineering and technology programme announced in March, the costs of which up to 1987–88 have been met in part by transfers to my programme from those of other Government Departments. The programme is expected when fully operational to provide an extra 5,000 university and polytechnic places in engineering, information technology and related disciplines.

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 expenditure within the predetermined pool in 1986–87 at £661 million. This includes provision of some £1 million for recurrent expenditure by local authority institutions taking part in the engineering and technology programme; and otherwise represents an increase of 6 per cent. compared to the quantum for 1985–86, after taking into account the transfer to full local authority funding from 1986–87 of two institutions which are now funded in part by my Department.

I expect authorities to take the measures necessary to achieve in 1986–87 an average student: academic staff ratio of 12:1, in line with the target set by the National Advisory Body. The plans assume that authorities will look for further efficiency savings in non-teaching costs, compared to existing levels of expenditure and bearing in mind the recommendations on efficiency throughout further education made by the Audit Commission. The plans also include provision for public sector institutions to take part in the engineering and technology programme.

The National Advisory Body is considering how the quantum should be distributed between authorities. I shall decide each authority's share later in the year in the light of the NAB's advice.

Following consultations with the voluntary sector consultative council I have determined the quantum of AFE expenditure at voluntary colleges grant-aided solely by my Department at £45.4 million. I shall decide its distribution between the colleges later this year in the light of NAB's advice.

Universities

Subject to parliamentary approval, the total of recurrent grant for universities in the UGC list for the 1986–88 academic year will be £1,342 million. To the extent that the academic year falls partly in the 1987–88 financial year the grant is subject to review in the normal way.

Recurrent grant for the 1986–86 academic year will remain at £1,309 million.

I intend to increase the amount available to the UGC for the improvement of equipment in selected centres of research from £7 million to £10 million in each of the financial years 1986–87 and 1987–88 and to make the same 106W provision in 1988–89. In addition, I am making £1 million in 1986–87 and £2 million in each of the following years available to the computer board for the enhancement of the joint academic computing network. Together these two developments should significantly improve the facilities available in universities to the best of our research workers. General equipment grant for the universities for the academic year 1986–87 will be £95.1 million, which is a cash increase of 5.2 per cent. over the previous year. These figures do not include the separate provision being made over the academic years 1985–86 and 1986–87 for the equipment costs of the engineering and technology programme.

Fellowships in Humanities and Social Studies

In order to provide more opportunities for outstanding scholars in the fields of the humanities and social studies I am setting aside resources to enable the British Academy to award about 25 fellowships in these subjects in each of the academic years 1986–87, 1987–88 and 1988–89.

The Science Budget

The science budget, from which the research councils receive their grants in aid, will be £614 million in 1986–87, an increase in cash of £15 million over previous published plans for that year. £15 million additional cash provision compared with previous plans will be available in each following year. These sums will be distributed following advice from the ABRC, and should assist the councils to follow up promising new developments in a variety of scientific fields and so provide more opportunities for talented scientists to pursue research in this country.