HC Deb 28 November 1995 vol 267 cc681-6W
Mr. Coe

To ask the Secretary of State for Education and Employment what plans she has for her Department's expenditure in 1996–97; and if she will make a statement. [3233]

Mrs. Gillian Shephard

As my right hon. and learned Friend the Chancellor of the Exchequer announced in a statement today, the Government intend to provide £14,040 million for the Department's voted expenditure in 1996–97. This will be in addition to expenditure on schools provided through the local authority finance settlement.


Provision for schools is to increase by £878 million. The bulk of this will be provided through the local authority finance settlement. Detailed allocations for individual local authorities will be announced by my right hon. Friend the Secretary of State for the Environment on 30 November. The local authority settlement will allow for an increase of 4.5 per cent. for schools. It is for local authorities to decide how to allocate the available funding, but the Government expect that priority will be given to schools. The total package of Government and local authority funding for schools—including provision for the under-fives—represents an increase over 1995–96 of 4.9 per cent.

Schools capital

In 1996–97, the amount available for school building will be £625 million, an increase of £40 million or 6.8 per cent. on the current year. This includes an extra £8 million for grant-maintained schools, £5 million for voluntary aided schools, and £27 million for local authority schools. Alongside these extra resources lie the new opportunities arising from the private finance initiative; the proposed legislation enabling grant-maintained schools to borrow commercially; the full use of proceeds from asset disposals by grant-maintained schools; and the relaxations on the capital controls which apply to disposals of local authority school property. Overall this is an excellent outcome which will help to maintain the school building programme at record levels and to introduce a substantial challenge fund for school renewal, further details of which will be announced shortly.

Grant-maintained Schools

The Government will continue to ensure that GM schools receive the necessary funding to meet their extra responsibilities and particular circumstances.

The plans provide for spending on special purpose grants to be maintained broadly at current levels. The Funding Agency for Schools is considering the balance of provision between the various grants.

Specialist schools

The settlement includes £23 million in 1996–97, £28 million in 1997–98 and £27 million in 1998–99 for our specialist schools programme. Already, 101 schools are operating as technology colleges and six as language colleges. The settlement, with provision higher than announced last year, will enable us to expand the network of schools to well over 250 schools by 1998–99.

Teacher Training Agency

The total grant for the Teacher Training Agency for recurrent and capital expenditure is planned at £198 million, £208 million and £214 million in 1996–97, 1997–98 and 1998–99 respectively. The grant takes account of changes in forecast student numbers which reflect, among other things, revised targets for intakes into initial teacher training courses. It also covers the Headlamp scheme, and work on the development and piloting of the new national professional qualification for headteachers.


16–19 and further education student numbers

The plans provide for the forecast increase in demand from 16–19 year olds for education and training in schools, colleges or by work-based routes to be met. This will contribute to the achievement of the national targets which the Government have endorsed for the year 2000. The number of students in further education is forecast to increase by 50,000 students in 1996–97 overall and 20 per cent. in all between 1994 and 1999.

Grant to further education funding council

The total grant to the FEFC is planned at £3,069 million in 1996–97, £3,049 million in 1997–98 and £3,016 million in 1998–99. Within those totals, reflecting the priority accorded to this sector of education, the level of recurrent grant per year has been maintained at just under £2.96 billion per year, as announced a year ago. These figures imply continuing efficiency gains over the next three years to help meet the forecast increases in student numbers.

I have set as a condition of my grant to the FEFC that it requires institutions in the further education sector to take account of the principles set out in the Chancellor's statement on public sector pay of 18 September 1995. Any failure by institutions to observe these principles may be expected to have an adverse effect on the level of grant made available to the council in 1997–98.

Modem apprenticeships and youth training

Government funding on modern apprenticeships and youth training is planned to increase by £116 million next year against anticipated expenditure in 1995–96 to £783 million. Plans allow for 60,000 entrants to modern apprenticeships next year, a doubling of the number of entrants to the programme compared to the anticipated level of entrants in 1995–96.


Employment service programmes

The welcome reduction in the past year in the number of people out of work for over six months has enabled the Government to make savings in existing employment programmes. The Government have also taken the opportunity to rebalance provision so that it supports the key aims of the jobseekers allowance. The "1-2-1" programme of intensive help for individual long-term unemployed people will be more than doubled to support active job search. A new package of help and assistance with fares to interviews for people who have been unemployed for 13 weeks will be introduced. Community action will cease at the end of 1995–96, and we will conduct pilots of a programme of mandatory work experience for people out of work for two years or more, who have failed to benefit from other help provided by the Employment Service.

Training for work

The planned reduction in the number of people joining training for work next year—12 per cent.—is broadly in line with the reduction in the number of people reaching six months' unemployment. The programme will continue to focus on getting more trainees into jobs. Participation on the programme of people with special needs, and younger long-term unemployed people, will be maintained at broadly the same levels as this year.

Lifetime learning

The major programme initiatives to support lifetime learning—skills for small businesses and employer investment in people—are being broadly maintained at their previously planned levels. Over the survey period some £150 million is planned to be spent encouraging employers to invest in the training and development of their employees.

Jobseeker's allowance

The provision that my Department has been given will include the resources required to introduce JSA in October 1996. We regard JSA as a most important step in our wide-ranging labour market reforms.

Total opportunities

Overall, some 1.5 million opportunities will be provided for unemployed people in 1996–97, broadly the same level as in the current year.


Provision for programmes delivered by training and enterprise councils, at £1,437 million is set to rise by 5 per cent. from anticipated expenditure this year. TEC budgets, within these programmes, are estimated at £1,173 million, 5 per cent. more than forecast expenditure by TECs this year.


The Government have maintained their plans for student numbers in higher education. Within the planned totals, it should be possible for universities and colleges to expand further the numbers of part-time students and to keep the participation rate for young people at over 30 per cent. through to 1998–99. I have asked the Higher Education Funding Council for England to continue to exercise tight controls over the number of full-time and sandwich undergraduate students in the next three years, in order to contain forecast spending and to protect quality.

Tuition fees

The maximum tuition fees reimbursed through mandatory awards in 1996–97 will be the same as for 1995–96: £750 for classroom-based courses; £1,600 for laboratory and workshop-based courses; and £2,800 for the clinical elements of medical, dental and veterinary courses. The maximum tuition fee paid through postgraduate awards funded by my Department will be £2,490 in 1996–97.

HEFCE grant

The total provision for the HEFCE for recurrent and capital expenditure is planned at £3,438 million, £3,381 million and £3,336 million in 1996–97, 1997–98 and 1998–99 respectively. Within these totals, the settlement confirms the plans for recurrent expenditure announced a year ago. I have asked the funding council to have regard to equipment needs, especially equipment for research, in allocating grant to institutions. I have set as a condition of my grant to the HEFCE, and also to the TTA, that they require institutions in the high education sector to take account of the principles set out in the Chancellor's statement on public sector pay of 18 September 1995. Any failure by institutions to observe these principles may be expected to have an adverse effect on the level of grant made available to the council in 1997–98.

Student support

The plans allow for the level of student support through the main rates for grants and loans to be increased over the next three years in line with inflation. In 1996–97, loan and grant taken together will increase by 2.6 per cent., in line with the forecast change in the retail prices index, exclusive of mortgage interest payments. The main allowances, including dependants' allowances, will also be increased by 2.6 per cent. in 1996–97. Planned expenditure in the financial year 1996–97 is £698 million in loans and £2,009 million on mandatory awards covering maintenance grants and tuition fees. Access funds are being maintained at £28 million a year.

The Government decided in 1993 to accelerate the shift from grant to loan so that by 1996–97 the main rate of grant and loan would be broadly equal. The new rates provide for the main rates of grants to be reduced by about 9 per cent. in 1996–97 with a corresponding increase in the loan rates, so that broad parity will be achieved. The parental contribution scales under the awards regulations will be adjusted so that, for parents whose residual income has risen at the same rate or slower than the rise in national average earnings, the assessed contribution will continue to fall in real terms.


The Government believe that within the framework of the private finance initiative, colleges in the further education sector and higher education institutions can, and should, be enabled to make much greater use of private finance in funding capital works. Within the total grant to the FEFC, the plans provide for capital grant of £110 million in 1996–97, £92 million in 1997–98 and £59 million in 1998–99. The capital grant to the HEFCE provides for £243 million in 1996–97, £228 million in 1997–98 and £189 million in 1998–99.


On top of the increase in general provision for schools, extra funding is also being provided for a range of programmes designed to widen choice, enhance diversity and promote excellence across all educational sectors:

Nursery provision

The settlement for under-fives in 1996–97 is £37 million—of which £16 million is transferred from education standard spending. Phase 1 of the nursery education voucher scheme will start in a limited number of local authority areas in April 1996. The scheme will be implemented throughout England in April 1997 subject to the passage of necessary legislation.

Grants for educational support and training

The overall level of funding available for grants for educational support and training will increase by 6 per cent. over the 1995–96 equivalent programme. The new total will provide £264 million for schools and local education authorities to spend on a range of important educational priorities—in particular measures for improving school effectiveness. Two new grants will be introduced, providing support for improving literacy and numeracy, and pupil behaviour and discipline. The scheme to raise standards of literacy and numeracy would support the establishment, in close co-operation with Ofsted, of a network of centres which would work with groups of local primary schools to help them improve the teaching and learning of these core skills. Full details of all GEST programmes will be announced shortly.

Assisted places scheme

The plans include provision for a further expansion of the assisted places scheme. The scheme will be doubled in size over time, with the pace of expansion depending on the supply of new places—for which I have invited bids from eligible schools—and on parental demand.

Out-of-school care initiative

The out of school childcare programme will continue to offer parents with school-age children the chance to participate more fully in the labour market. Funding will be available to make grants to childcare projects to cover the initial set up costs, and contribute towards operating costs for up to 12 months while the project becomes firmly established.