HC Deb 01 November 1988 vol 139 cc601-5W
Mr. Pawsey

To ask the Secretary of State for Education and Science if he will make a statement about the Government's plans for expenditure on education and science over the next three years.

Mr. Kenneth Baker


1. As my right hon. Friend the Chancellor of the Exchequer announced in his statement today, provision for education and science in 1989–90 will be £19,570 million. This total is £1,600 million or 8.9 per cent. higher than the provision for 1988–89 made a year ago. Details of the main changes from the earlier plans are shown in the attached table.

2. The Government's spending plans include: the addition of more than £300 million over three years for science; over £1,100 million in 1989–90 to provide a sound financial base for the new polytechnics and colleges sector; an addition of more than £100 million over three years for the universities; more than £550 million over three years for specific programmes supporting the implementation of the Government's school and college reforms; and planned local authority current expenditure up by £940 million in 1989–90, or 7.2 per cent. over plans for 1988–89.



3. I am allocating an additional £306 million to the science budget over the period 1989–90 to 1991–92 to strengthen the United Kingdom science base in higher education and the research councils. This substantial increase reflects the importance that the Government attach to basic and strategic science and their policy of redeploying resources to these areas from those near to the markets which are properly the responsibility of industry. As a special addition I am also allocating an extra £14 million for urgently needed equipment for basic science in research councils and universities in 1988–89.

4. The science budget in 1989–90 will be £825 million. This is an increase of 16 per cent. over the provision made for science in 1988–89. The planning figures for future years will be £837 million in 1990–91 and £855 million in 1991–92.

Mr. Kenneth Baker

I have today announced an increase of £14 million in grants this year to the research councils and the university grants committee mainly to enable them to provide additional or replacement equipment in support of basic science. Subject to parliamentary approval of the necessary Supplementary Estimates, the following cash limit changes will be implemented:

5. I shall be making a further announcement shortly on the detailed implications of the settlement for science; and shall be inviting the advisory board for the research councils to advise me on the allocation of the money now available.

Polytechnics and Colleges

6. The plans allow for current expenditure of £1,035 million and capital expenditure of £84 million in 1989–90 by the polytechnics and colleges funding council (PCFC). Provided that the polytechnics and colleges contain their costs and continue to improve their efficiency, this money should ensure that the new sector starts on a sound financial basis. It will sustain higher education and research in the institutions to be transferred next April to the PCFC sector, prescribed courses of higher education in colleges remaining with local authorities and certain payments to local authorities in respect of former staff of transferred institutions. Excluding additions for restructuring and inherited liabilities, the plans assume that funding will be held broadly level in later years.

7. Within the total of current expenditure, I have allowed for an earmarked restructuring fund of over £20 million over three years to help institutions attain affordable levels of staffing; for an additional £44 million over two years to deal with liabilities, for example for repairs and maintenance, inherited by the institutions; for the full estimated cost of some £35 million each year for the new sector's liability for VAT; for the forecast increase in student numbers; and for £1.5 million to support fund-raising initiatives in polytechnics and colleges. I have assumed that the selective initiatives already started in the sector will continue at broadly their present level.

8. I shall now seek the national advisory body's advice on the distribution of the recurrent grant between institutions. I shall pass that advice, together with any comment on it which I may wish to make, to the PCFC, to whom it will fall to take decisions early in the new year.

9. Subject to further consultation with the PCFC about the distribution of the £84 million available for capital expenditure, the plans include some £60 million for the purchase of equipment by polytechnics and colleges, both for teaching and administrative purposes. This should allow polytechnics and colleges to make good progress with replacing out-of-date and unserviceable teaching equipment and to meet more effectively the new demands of corporate status. The remainder is for building work, including that in progress on vesting day.


10. The plans allow for an increase of over £100 million in the funding over three years for the universities. Allowing for the completion in 1990–91 of the £155 million three-year restructuring programme agreed last year and some £20 million provided for the associated continuing costs in 1991–92, in particular for new academic staff appointments, the additions provide for broadly level funding in real terms during the period. The total available in 1989–90 to the universities funding council for recurrent grant will be £1,672 million. This includes an addition of £8.5 million to the university restructuring programme; £1.5 million to support fund-raising initiatives within universities; and £3.1 million to meet the continuing cost of implementing the 1988 increase in clinical academic pay. After allowing for these additions, the grant is some 5 per cent. higher than the corresponding figure for 1988–89. The grant also includes provision of £71 million linked to the pay settlement for academic and academic related staff announced on 5 March 1987: this funding will be made available provided that satisfactory progress is maintained on the arrangements for academic staff appraisal, probation and promotion.

11. In 1989–90, provision for the Open university will be increased by £4.2 million, compared with previous plans; and an addition of £3.0 million will be provided for the computer board.

Student Awards

12. Provision for student awards allows for the forecast increase in the number of mandatory award-holders. Details of the new rates of award and revised contribution scales will be announced later. Provision is also made for the basic tuition fee for courses eligible for mandatory awards to increase from £578 to £607.


13. I have set aside some £90 million over the three years 1989–90 to 1991–92 for the development, introduction and monitoring of the national curriculum and associated assessment arrangements including the cost of the National Curriculum Council and the School Examinations and Assessment Council. In addition, I plan to support spending by local authorities over the same period. In 1989–90, I shall be supporting spending of £90 million through education support grants and £65 million through in-service training grants on programmes related to the implementation of my reforms for the school curriculum and financial delegation to schools and colleges. My plans for current and capital spending by local authorities allow for some further re-direction of resources in support of the implementation of my reforms.


14. The total provided for local authority current spending on education in 1989–90 in the Government's plans is £14,070 million. This figure reflects an appropriate transfer of resources from provision for local authorities to enable the Government to provide funds for polytechnics and colleges transferring from local authorities. Allowing for this transfer, the provision is £940 million or 7.2 per cent. more than the plans for 1988–89 as set out in Cm. 288. It represents the likely level of spending by local education authorities collectively, on the basis that they keep their costs within the level of cost increases in the economy as a whole. In addition, the education service will receive income from the training agency in respect of TVEI and work-related non-advanced further education in 1989–90. The total for determining the education component of the grant-related expenditure (GRE) has been set nearly 10 per cent. above the equivalent level in 1988–89 or £330 million lower than the total for expenditure provision.


15. The plans assume that local authorities will not reduce the pupil to teacher ratio below the existing record low level of 17:1. This will imply some reduction in teacher numbers as pupil numbers continue to fall.

16. The plans allow for substantial real increases in spending per pupil on education support staff, administrative and clerical staff and books and equipment, in support of the introduction of the national curriculum and local financial management. They also allow for substantial increases in spending on the repair and maintenance of school buildings.

Further and Higher Education

17. The student: staff ratio (SSR) in further education is assumed to tighten from 8.8:1 in 1987–88 to 9.4:1 in 1989–90 as local authorities and colleges make progress towards the national target SSR recommended by the joint efficiency study conducted by my Department and the local authority associations. The plans should enable local authorities and colleges broadly to maintain levels of spending on non-teaching costs in further education. It is assumed that local authority insitutions which offer higher education will continue to improve efficiency.


18. The plans allow for substantial real increases in spending on local authority administration and advisory services in support of the implementation of the education reforms.

Specific Grants

19. Within the total of £14,070 million, education expenditure supported by specific grants is expected to amount to some £500 million in 1989–90. The Government will provide grant of some £81.5 million in support of expenditure of £125.5 million under the 1989–90 education support grants programme; and up to £214 million of expenditure by local authorities on staff development will be supported under the in-service training grants scheme. The Government will also support spending on education through section 11 grant for Commonwealth immigrants and the urban programme.


20. Capital allocations to LEAs in 1989–90 will be £352 million, broadly at the same level as in 1988–89 after allowing for the transfer of polytechnics and colleges. Local education authorities will also benefit from increased spending power from capital receipts. In consequence, gross provision for capital expenditure by local authorities and voluntary schools has been increased by £95 million or 17 per cent. in 1989–90, compared with previous plans for the same year.

21. The new provision will allow for new school places in areas of population growth, continuing progress with the removal of surplus places and sustained spending on equipment in the local authority maintained further education colleges. Additionally local authorities and

Changes from the 1988 expenditure plans
£ million
1989–90 1990–91
Planned expenditure Increase Planned expenditure Increase
Science budget 825 +95 837 +107
Polytechnics and Colleges 1,119 +95 1,147 +84
UFC sector 1,811 +31 1,878 +56
Other expenditure 420 +39 427 +26
Student awards 855 +64 903 +93
Local authority current expenditure 14,070 +502 14,562 +593
Local authority (net provision) and voluntary schools capital expenditure 469 +39 486 +40
Departmental total 19,569 +865 20,240 +1,000

Note: Totals are based on unrounded figures and may not always equal the sum of the components shown.

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