Government Expenditure (Hansard, 3 November 1987)

§ Mr. Kenneth Baker

The following are the Government's plans.

Public spending on education and science

1. As my right hon. Friend the Chancellor of the Exchequer announced in his statement today, provision for education and science in 1988–89 will be £17,962 million. This total is £1,303 million or 7.8 per cent. higher than provision for 1987–88.

2. Subject to Parliament's approval of the necessary legislation, additional resources are being provided to enable the Government to implement their proposals for education reform. About £65 million over three years will be provided to fund work in support of the Government's, proposals for a national curriculum, particularly that of the National Curriculum Council and the School Examinations and Assessment Council. Nine million pounds is being made available in 1988–89 to enable polytechnics and colleges to assume responsibility for managing their own affairs. In higher education the resources available should be sufficient to provide for at least the numbers of students projected in the Government's White Paper "Meeting the Challenge" (Cmnd. 114)—projection Q. In addition, I am making provision for a substantial programme for the improvement of school buildings. Further details of my plans are as follows.

Buildings and equipment for schools and colleges

3. Gross provision for capital spending on schools and colleges has been increased by £100 million a year—or 22 per cent.—over the survey period. Within this provision I shall be allocating about £50 million in 1988–89 specifically for a programme of school improvements to help LEAs tackle the accumulated deficiencies identified in my Department's survey of school buildings and to allow voluntary school governors to continue the programme of replacement and improvement begun last year. This programme will be in addition to allocations for new school places in areas of growing school population and for the implementation of approved projects to remove surplus places. There will also be a small increase in allocations for further and higher education. LEAs already have plans for substantial expenditure from existing provision on projects which contribute to the improvement of the school building stock.

4. The additions announced today will mean that LEAs and voluntary bodies should be able to spend a total of more than £750 million over the next three years on projects to improve school buildings; and authorities will no doubt make use of the flexibilities open to them—for example, through the use of capital receipts—to increase spending on improvements still further where they 638W consider it appropriate to do so. Provision for local authority current expenditure on repairs and maintenance is also being increased and in 1988–89 will be about £120 million or some 40 per cent. higher than spending in 1985–86.

5. Finally I am taking immediate steps to deal with the most serious problems. I am issuing special capital allocations totalling £9.4 million to provide for small school improvement projects and equipment purchases for schools and colleges which can be completed in the current financial year. The Government will also be considering the case for further special capital allocations to deal with storm damage to educational buildings.

Local authority current expenditure

6. The total provided for local authority current spending on education in 1988–89 in the Government's plans is £13,870 million a cash increase of 7.9 per cent. over the 1987–88 plans as set out in Cm. 56. It represents the likely level of spending by local education authorities collectively, on the basis that they constrain their costs within the level of cost increases in the economy as a whole. In addition, the education service will receive income from the MSC in respect of TVEI and work-related NAFE of some £185 million in 1988–89.

7. In the Government's view, there are areas of the service where authorities need not spend as much as provided for in the plans. The total used for determining the education component of the grant-related expenditure (GRE) has therefore been set at £615 million lower than the total for expenditure provision.

8. The Government's plans for local authority current spending on education provide for it to be held broadly constant in real terms in 1989–90 and 1990–91. Within the totals planned for local authority expenditure as a whole in both years the Government will review next year the distribution of provision between services, including education, in the light of local authorities' budgets, Government priorities and other factors. Appropriate transfers will be made from 1989–90 onwards for the polytechnics and colleges and for grant-maintained schools which will be funded from vote expenditure.

Schools

9. The plans assume that local authorities collectively will not increase teacher numbers as long as pupil numbers continue to fall. They allow for some further fall in the overall pupil: teacher ratio, which is currently at its lowest level ever of 17.3:1.

10. In addition to the provision for improving the conditions of school buildings, the plans allow for real increases in spending per pupil on books and equipment. As last year, the plans allow in full for the implications of equipping schools for the new GCSE courses, and an additional sum has been provided for secondary school libraries. As a step towards securing greater efficiency in the service, the Government expect local authorities to continue to rationalise school provision and remove surplus accommodation, and to cut the net costs of school meals provision.

Non-advanced further education

11. The overall student: staff ratio (SSR) for NAFE tightened a little in 1986 from 8.7: 1 to 8.8: 1, about 1 per cent. In reaching a view on the number of lecturers, I have taken into account the report of the joint efficiency study with local authority representatives which concluded that 639W there should be a national target SSR for NAFE of 10.2: 1 by 1991–92. The plans assume a further tightening in the SSR to 9.2: 1 in 1988–89 as authorities progress towards that target. The plans will also enable LEAs to improve levels of provision per student across the full range of non-teaching costs.

Advanced further education

12. Following consultation with the local authority associations, I intend to determine the AFE quantum in 1988–89 at £781 million. This represents an increase of £64.5 million or 9 per cent. over the 1987–88 quantum. I have proposed that up to £25 million should be distributed selectively in support of selected initiatives of high priority. The plans assume that polytechnics and other institutions will continue to increase efficiency and make full use of available capacity.

13. The National Advisory Body is considering how the basic quantum should be distributed between authorities and how up to £25 million might be allocated selectively. I shall decide on the allocation of both elements later in the year in the light of the NAB's advice.

Specific grants

14. Within the total of £13,870 million, education expenditure supported by specific grants is expected to amount to some £500 million in 1988–89. This figure includes £207 million which I have already announced will be supported under the in-service training grants scheme; a proposed £115.5 million of expenditure to be assisted by education support grants; section 11 grants for Commonwealth immigrants; and the urban programme.

VOTE EXPENDITURE

Universities

15. Last year I agreed with the University Grants Committee and the Committee of Vice-Chancellors and Principals a programme of improvements in the management of universities including selective funding, the rationalisation of small departments, better financial management and improved standards of teaching. I made it clear that the future funding of the universities would depend significantly upon the implementation of that programme.

16. Good progress has since been made. The 1987 academic pay settlement is another important development. The £56 million extra grant for 1988–89 already announced to help universities to meet the cost of that settlement will be released as soon as the Government are satisfied that the universities have sufficiently improved their arrangements for staff appraisal, probation and promotion. As I have already made clear, the Government will not provide funds for any further academic pay increase in 1988.

17. The Government have decided to provide the universities with an additional £61 million in 1988–89 and similar sums in later years. I shall be asking the University Grants Committee to allocate some £155 million of these extra funds to a targeted programme of restructuring including additional finance for early retirements, some "new blood" appointments, and the rationalisation of provision for a number of disciplines. In each case, I shall expect the UGC to authorise payments only where the expenditure is in accordance with the approved academic plans of the institutions concerned.

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18. In 1988–89 the Open University will receive an extra £1.55 million and the Computer Board an extra £2 million.

19. Provision is also being made in 1988–89 and in later years for the extra cost to universities of the 1987 clinical academic pay settlement, and for an initiative in manufacturing systems engineering.

Science

20. The science budget for 1988–89 will be £696 million, an increase of £47 million over the plans published in Cm. 56. The planning figure for each of the following two years is now £729 million, providing for an 11 per cent. cash increase compared with the science budget this year. Within these figures special provision is being made for research in Antarctica, including a new research ship. There should also be scope for a worthwhile start in 1988–89 on the establishment of inter-disciplinary research centres, as recommended by the ABRC and to which I attach great importance. The Government will be giving further consideration in the next few months to policies for the strategic reshaping of the science base, taking account of restructuring within the universities, the ABRC's strategy advice and of our consultations on the board's recommendations. The totals I have announced for the science budget in 1988–89 and 1989–90 include provision for the MRC's special programme of research on AIDS; additional provision for this in later years will depend on the agreed evaluation of the programme but would not have to he found within the science budget baseline.

Voluntary Colleges

21. 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 £56.7 million. This recognises the special difficulties which these colleges have faced. It is expected to allow for some increases in student numbers; to contribute towards the maintenance of quality; and to enable the colleges to participate in selected initiatives of high priority.

Student Awards

22. Provision for student awards allows for a small 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 £556 to £578. The review, chaired by the Parliamentary Under-Secretary of State, my hon. Friend the Member for Wantage (Mr. Jackson), of all aspects of financial support for students studying at first degree or equivalent level will complete its work next year, when a consultation document on future arrangements for student finance will be published.