Expenditure 1983–84 (Hansard, 8 November 1982)

§ Sir Keith Joseph

As announced by my right hon. and learned Friend the Chancellor of the Exchequer in his statement today, planned expenditure on education and science in 1983–84 is £12,548 million, that is £64 million more than planned in Cmnd. 8494 as adjusted for the reduction in the employers' national insurance surcharge in the 1982 Budget. This is not directly comparable with the estimated level of spending in 1982–83 because of the new arrangements for local authority expenditure in 1983–84 (see paragraph 4 below.)

2. The level of services that can be afforded within this total depends on the success of local authorities and others in containing their costs, including the effect of pay and price increases in the current year. I outline as folows the policies which would be compatible with an overall increase of about 4 per cent. in education costs in 1983–84. This is consistent with the latest forecast of price increases and with provision for 3½ per cent. pay increases for certain public service groups in the public expenditure plans. If both local authority and other pay settlements are of this order, the cash available will allow for policies broadly in line with those in Cmnd. 8494.

3. In addition, and after allowing for some savings on student awards, the plans allow for:

(a) increased provision of some £14 million as the first instalment of a programme for new technologies, including the recruitment of young researchers (see paragraphs 8, 10 and 11 and 14 below);
(b) £5 million for expenditure specifically for in-service teacher training and training awards in craft, design and technology;
(c) an increased Science Budget from which £4 million will be earmarked for an expansion of the British Antarctic Survey.

Local authority expenditure on education, school meals and milk.

4. Within the total planned current expenditure for local authorities in England in 1983–84 of £19,500 million it is for local authorities themselves to determine the balance between services, taking into account Government policies. Not all of the total has been allocated within the Government's plans to individual services. About £700 million not so allocated is in recognition of the fact that local authorities are going to be spending in 1983–84 more than the Government believes to be desirable and require more 40W time to bring spending into line with the Government's plans. As with the total, it will be for local authoritities 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 and Government policies. The total allocated to education, which will form the basis for grant-related expenditure assessments, is £9,428 million. The actual level of service provided will depend crucially on the extent to which local authorities contain their cost increases, and in particular on the level of pay settlements for local authority employees in the months ahead.

5. The figure of £9,428 million includes £273 million for school meals and milk. I look to local education authorities to secure substantial further reductions in net expenditure under this head in order to avoid unnecessarily reducing the resources available for education.

Schools

6. If pay settlements were of the order of 3½ per cent., up to 400,000 teachers could be employed. Taking into account the fall in the school population of compulsory school age as well as further growth in the numbers over 16 staying on at school, this would allow for some improvement in pupil-teacher ratios. It should be possible to avoid compulsory redundancies among teachers on any large scale if full advantage is taken of opportunities for redeployment and premature retirement.

It should also be possible for authorities at least to maintain current levels of expenditure on in-service training. In addition the Department will be inviting bids from local education authorities for grants to support expenditure up to a total cost of £4½ million for selected priorities within in-service training. This will allow the equivalent of a further 750 full-time teachers from September 1983 to be released for in-service training.

7. If teacher numbers fall to 400,000 or just below (and on the stated assumptions about pay and price increases in paragraph 2), it should also be possible, in relation to levels in 1980–81, for provision per pupil on new books and equipment to be improved and for the level of repairs and maintenance to be restored. I look to local authorities to secure maximum effectiveness in their spending on schools; in particular, and in the light of local authorities' replies to circular 2/81, the plans continue to assume that 630,000 surplus places will be taken out of use by March 1984.

Non-advanced further education

8. The plans allow for a further increase in demand for places on full-time and sandwich courses particularly from 16–19-year-olds where numbers are projected to be nearly 41W 20 per cent. higher than in 1980–81. Some economy of scale through a tightening of staffing ratios and of non-teaching costs per student is assumed. £2 million has been allocated for additional support of courses in information technology.

Higher education

9. Excluding the additional cash for new technologies, the cash available for each sector has been set at a level consistent with the planned contraction for higher education. The decisions taken on reduced teacher training intakes fall to be implemented within this plan. The cash for each sector allows for the tuition fee for home full-time and sandwich course students on courses designated for mandatory awards to be held at the present level of £480.

Universities

10. Subject to Parliamentary approval, the total of the universities grant for the 1982–83 academic year will be increased from £1,137 million previously announced to £1,150 million. Recurrent grant for the 1983–84 academic year will be £1,213 million. To the extent that an element of this grant covers part of the 1984–85 financial year it is subject to review in the usual way. These grants allow for the higher employers' contributions to the universities superannuation scheme from April 1983 as well as certain other unavoidable increased costs. The effect of these changes is to increase the recurrent grant available to the universities in the financial year 1983–84 by about £40 million above the level planned in Cmnd. 8494, before taking account of the Government's 3½ per cent. pay assumption. I am also allocating £50 million in the financial year 1983–84 to be used by the University Grants Committee—as in 1982–83—specifically for restructuring including the cost of redundancies.

A separate announcement will be made about an additional allocation of some £10 million which is to be made available to allow for a start in the autumn of 1983 on a programme of recruitment by the universities of additional young researchers and lecturers, as well as for the provision of courses in new technologies primarily to improve the supply of qualified manpower in information technology. Part of this sum will be allocated by the research councils. Equipment and furniture grant for 1983–84 will be the same in cash terms as in 1982–83, that is £83.6 million.

Advanced further education

11. Following consultation with the local authority associations, I propose to determine under regulations made under the Local Government, Planning and Land Act 1980 the quantum of expenditure to be met from the capped AFE pool in 1983–84 as £560.5 million. This includes an addition of £2 million for the expansion of courses designed to improve the supply of qualified manpower in information technology. The plans, reflected in this quantum, imply a reduction of some 2,000 full-time equivalent lecturers in AFE between now and next October and corresponding reductions in non-teaching costs. Allowance has been made outside the quantum for expenditure on premature retirement compensation as well as redundancies on the improved terms announced on 4 November. I shall determine later the allocation of the AFE quantum amongst local authorities after I have received the advice of the national advisory body and consulted the local authority associations.

Student awards

12. In the autumn of 1983, the main rates of grant will be increased by 4 per cent. and the parental contribution scale 42W will be adjusted upwards by 8 per cent. in line with earnings in the past year, thus limiting the increase in cash contributions from individual parents. Revised arrangements will be introduced for meeting students' additional travelling costs, which will no longer be paid on the basis of separate specific claims. Details of the new rates of grant will be the subject of a separate announcement.

Capital Expenditure

13. Provision for local authority capital expenditure on education projects at £283 million in 1983–84 allows for the reduced need for new places in schools (which now arises mainly in response to the movement of population) and for an increase in capital receipts. The plans should assist local authorities to undertake projects associated with the removal of surplus school places, and the improvement of schools, and to achieve a small increase in expenditure on equipment in further education. The Department will be writing to local education authorities to inform them of the allocations within the education block.

The science budget

14. The science budget for 1983–84, from which the research councils receive their annual grants-in-aid, will be £509.7 million. This includes provision for an increase of £4 million in the programme of the British Antarctic Survey through the Natural Environment Research Council. Otherwise, the existing level of funding is broadly maintained and will be subject to an addition of part of the £10 million mentioned in paragraph 10; within this an increase will be possible in research to underpin and promote the development of new technologies, including information technology.