Expenditure (Hansard, 21 December 1981)

§ Sir Keith Joseph

As announced by my right hon. and learned Friend the Chancellor of the Exchequer in his statement on 2 December—[c. 256]—planned expenditure on education and science with my programme in 1982–83 is £12.2 billion or just under 3½ per cent. in cash above the estimated level of spending in the current year. Within this total provision will need to be made for pay and price increases between this year and next; the Government's announced factors are 4 and 9 per cent. respectively, resulting for education and science in a combined figure of 5½ per cent. On this basis, the cash available should provide generally for a continuation of the policies for education and science set out in Cmnd. 8175.

Local authority expenditure on education, ,school meals and milk

As confirmed by my right hon. Friend the Secretary of State for the Environment, in his statement today on the 314W rate support grant settlement for 1982–83, for local authorities in England the total current expenditure for which the Government's plans provide in 1982–83 will be £18 billion: about 2 per cent. more than local authorities are budgeting to spend in 1981–82. Within fiat total, planned expenditure in 1982–83 on education, including school meals and milk, amounts to £9,190 million: £320 million or 3½ per cent. above the total of local education authorities' (LEAs') estimated expenditure in 1981–82. The breakdown described below of this sum of £9,190 million is reflected in the Government's grant related expenditure assessments announced today.

Our plans assume that LEAs will contain their net expenditure on school meals and milk in 1982–83 within a total of £325 million, about 15 per cent. below the total of their budgeted expenditure in 1981–82. This will entail a reduction between the two years of the same order as that which occurred between 1979–80 and 1980–81.

The planned total of expenditure on education other than school meals and milk, £8,865 million, is 41 percent. above that planned by LEAs in 1981–82. What this would mean in terms of level of service will depend on the extent to which local authorities contain their cost increases within the Government's assumed increases for pay and prices.

Schools

5. The plans provide for the employment in the 1982–83 academic year of 405,000 school teachers, 13,000 or some 3 per cent. fewer than the estimated current number. Taking account of the fall in the school population of compulsory school age, and the forecast growth in the numbers over the age of 16 staying on in school, this will enable the present overall pupil-teacher ratio 18.6:1 nationally—the most favourable ever recorded—as well as current levels of in-service training to be maintained. If the planned reduction of 13,000 teachers over the next twelve months is to be achieved without serious damage to the curriculum, LEAs will need to take full advantage of opportunities for redeployment and premature retirement; nevertheless some redundancies will be necessary. The plans include financial provision for expenditure in 1982–83 on premature retirement and redundancy payments for school teachers.

6. Local authorities have substantially reduced their expenditure in real terms on school books and equipment in each of the last two years. My proposals will enable LEAs, provided that they can contain their cost increases in the way our plans envisage, to restore their levels of provision on books and equipment (including, in particular, laboratory equipment) in 1982–83 to those applying in 1978–79, at an estimated additional cost of £20 million.

7. I remain committed to achieving the educational and financial benefits which can be secured by taking out of use surplus permanent and temporary school accommodation. On the evidence at present available, LEAs are increasing the rate at which they take such surplus places out of use, but less quickly than is required to meet the Cmnd. 8175 targets. The revised plans assume that LEAs will have taken out of use 470,000 surplus places (rather than the previously planned 700,000) between 1975 and March 1983.

Non-advanced further education

8. I have been encouraged by the response of many education authorities this year to the increased demand for full-time education they have faced from the 16–19 age

315W

group. We now expect an increase of nearly 25 per cent. (50,000) between 1980–81 and 1982–83 in the demand from 16–19 year old home students for full-time and sandwich courses of non-advanced further education (NAFE). My right hon. Friend the Prime Minister announced on 27 July—[c. 834]—the provision of an additional £60 million nationally (some £50 million in England) in 1982–83 towards meeting this demand, as well as the parallel increase in the numbers of 16-year-olds staying on in school. The revised plans provide for the expenditure of a further £35 million in 1982–83 on NAFE, making a total of some £840 million. The plans imply, as did those in Cmnd. 8175, an 8 per cent. tightening of staff-student ratios in NAFE over the two years.

Higher Education

9. The planned contraction of higher education in the period up to 1984 is to be maintained and the level of funding for each sector of higher education in 1982–83 is broadly in line with that contraction. In order to sustain the high standards achieved in universities, polytechnics and other institutions within the resources available, some restructuring of courses and departments will be necessary. Planned expenditure on student awards allows for some fall in student intakes, as well as for the level of maintenance award for 1982–83 announced on 2 December 1981.

10. Following consultation with those responsible for funding institutions of higher education, the recommended tuition fee for full-time home students (which, for most students, is paid by local authorities as part of the student award) will be reduced from the present level of £900 to £480 from September 1982. The income thus lost by institutions will be reinstated in their total planned provision and is included in the figures below. The consequential increase in the proportion of funds allocated on the recommendation of the University Grants Committee, by the local authorities and by the Department of Education and Science, in the case of voluntary and direct grant colleges, will assist the management of the necessary restructuring.

Universities

11. I propose that, subject to parliamentary approval, the total of the universities' grant for the 1981–82 academic year should be increased from the £979 million previously announced to £995 million. This takes into account both changes in costs and some redeployment of resources within the Universities' Vote. The universities' recurrent grant for the academic year 1982–83 will be £1137 million, including over £100 million to compensate them for reduced tuition fee income. From within the 1982–83 grant the UGC will make provision for the continuation of the bursary scheme for outstanding overseas postgraduate students.

12. Over and above the recurrent grant, I am allocating £50 million in the financial year 1982–83 to be used by the UGC specifically for restructuring including the cost of redundancies. A further additional amount for restructuring, and the recurrent grant for 1983–84, will be announced later.

Advanced further education (AFE)

13. 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 AFE expenditure within the predetermined pool in 1982–83 as £539 million. The revised plans, reflected in this quantum, imply a reduction of some 2,000 316W full-time equivalent lecturers in AFE in each of the next two years and corresponding reductions in non-teaching costs. The plans include financial provision for expenditure on premature retirement compensation, as well as redundancies within the AFE sector. I shall be laying regulations before the House to permit such expenditure to be pooled between all local authorities.

14. I propose, with the agreement of the local authority associations, that the principles underlying the distribution of the quantum for 1982–83 should reflect the judgment that the major part of securing the necessary overall economies should fall on the polytechnics and other institutions with the highest unit costs. Local authorities will be notified shortly of their pool allocations, and the detailed basis of the calculations.

Capital Expenditure

15. Provision for capital expenditure on education projects is planned to fall from £536 million in 1981–82 to £479 million in 1982–83, mainly reflecting reduced need for additional places. The plans assume a small increase in new starts for school improvements and for nursery provision. My Department is writing to local education authorities to inform them of the allocations within the education block to be assumed for the purpose of setting limits on their capital spending.

The Science Budget

16. The Science Budget for 1982–83, from which the Research Councils receive their annual grants-in-aid, will be £477.9 million. This maintains the current year's level, adjusted to allow for the Government's factors for pay and price increases referred to above, including an allowance of 4 per cent. for the increase in the rates of postgraduate student grants made by the Councils. The distribution of the total between the recipients of the Science Budget monies will be the subject of an early separate announcement.