§ Mr. PawseyTo ask the Secretary of State for Education if he will make a statement about his Department's expenditure plans for the financial years 1993–94 to 1995–96.
§ Mr. PattenThe information is as follows:
1. As my right hon. Friend the Chancellor of the Exchequer announced in his statement today, the Department for Education's spending programme in 1993–94 will total £9,523 million. That total is £523 million or 5.8 per cent. higher than equivalent expenditure in 1992–93.
2. Total expenditure in 1994–95 is planned to be £10,115 million and in 1995–96 £10,497 million.
3. Within these totals the Government have given high priority to the launch of the new further education sector so as to build up the supply of those with technical and other skills, where this country still falls short of its main competitors such as Germany and Japan. The staying-on rate at age 16 and 17 has increased sharply in the last few years. With the co-operation of the colleges, the Government's plans should over the next three years lift us towards the top of the international league table for participation in education among 16.19 year olds. The Government have also given priority to the funding of the rapidly expanding grant-maintained schools programe, and to enabling higher education participation to continue at its present record level. Against the background of the exceptionally demanding Public Expenditure Survey the Government are planning for continuing growth in their expenditure on education.
893WGrant-maintained schools
4. There are currently 342 grant-maintained schools open or approved. That number is projected on present trends to rise to some 500 by next April. The Government's spending plans provide for the number of GM schools to grow to 1,500 in April 1994.
5. The great hulk of recurrent funding for GM schools is found from within the totals for local authority expenditure. Central Government expenditure on recurrent and capital grants to GM schools is planned to rise substantially over the next three years as the number of GM schools grows. Total central Government expenditure on GM schools is planned to total £61 million in 1992–93 and £157 million, £294 million and £446 million in 1993–94, 1994–95 and 1995–96. Capital expenditure alone will total £501 million over the next three years. The funding plans include provision for the running costs of the proposed funding agency for schools.
Further education
6. From 1 April 1993 further education and sixth form colleges will he funded direct by the new Further Education Funding Council, set up under the Further and Higher Education Act 1992. The plans provide for the launch of the newly independent sector. Total recurrent spending is planned at £2,549 million, £2,734 million and £2,943 million in 1993–94, 1994–95 and 1995–96. That increase in funding will allow for an assumed 25 per cent. increase in student numbers between 1992–93 and 1995–96:
Financial year FT student numbers (thousand) 1992–93 899 1993–94 970 1994–95 1,038 1995–96 1,121 7. The priority being given to this expansion in numbers will be a direct contribution to enhancing the skills of the nation: those skills will be increasingly in demand to sustain and improve our competitiveness.
8. In order to encourage efficiency in the achievement of these increased student numbers, part of the provision to be made available to the Further Education Funding Council will be directly related to actual student numbers. This funding approach will encourage institutions to compete for students and will enable the sector as a whole to improve its efficiency.
9. Capital expenditure on FE is planned to be £152 million, £157 million and £159 million in 1993–94, 1994–95 and 1995–96. The current level of capital spending on colleges will be sustained and the new sector will be able to begin to improve the state of its accommodation and stock of its equipment.
Higher Education
10. The number of students on full-time and sandwich courses in higher education has expanded even faster than the rapid rate of growth envisaged as recently as in the Government's Higher Education White Paper (Cm 1541) of May 1991, on which the Government's previous expenditure plans were based. The numbers of young people entering higher education in 1992 are already between one in four and one in three.
894W11. The Government have provided substantial additional funding for further education to enable the country's needs for skills to be met. Given the need to strike a balance with the rate of expansion of further education, the government envisages a period of consolidation in higher education after its recent very rapid growth beyond the levels projected as recently as May 1991. The figures underlying the expenditure plans announced today accordingly assume that the proportion of young people entering higher education will remain broadly steady in the next three years, and increase to the level of one in three at the end of the decade which has long been assumed in our forward projections.
12. The expenditure plans provide for total FTE student numbers in higher education to rise by 13 per cent between 1992–93 and 1995–96:
Financial year FTE student numbers (thousand) 1992–93 776 1993–94 842 1994–95 877 1995–96 880 13. Total recurrent funding for teaching and research in universities and colleges in England—including grant paid by the HE Funding Council for England and related tuition fees—is planned at £3,824 million, £3,995 million and £4,024 million in 1993–94, 1994–95 and 1995–96. I shall be inviting the Funding Council to consider its approach to funding in the light of these revised assumptions about growth.
14. Provision for capital spending through the Funding Council will be £319 million, £322 million and £329 million in 1993–94, 1994–95 and 1995–96. In addition the Government are ending the prohibition of borrowing by HE institutions against the security of Exchequer funded assets: this will be widely welcomed in the university world.
15. Some of the increase above projected numbers of total students flows from the increasing proportion of students on longer courses. I have already asked the Funding Council to develop funding incentives for two year diploma vocational courses. In order to enable universities and colleges to admit as many young people as possible within the total numbers assumed, I am also asking the Funding Council to advise me on what action it can take to deter any trend towards longer courses.
16. Many of the new vocational diploma courses will be in engineering and technology. In addition, I am encouraging the Funding Council to promote continuing expansion at all levels in engineering and technology, where recruitment in recent years has continued to be disappointing. The Government's commitment to high quality research in the humanities is reflected in an increase of 11 per cent. in the grant to the British Academy.
Pay
17. The Department's spending plans assume that pay settlements in 1993–94 will fall within the range 0 to 11 per cent. in line with the terms of the Chancellor's statement. I shall direct the School Teachers' Review Body to have regard to this policy. I shall hold back £50 million of the planned provision for the Further Education Funding Council and £50 million from the Higher Education 895W Funding Council for England against the delivery of pay settlements within this range for all of the staff of the institutions within their sectors.
Student Support
18. The spending plans allow for total expenditure on student maintenance in England and Wales of £1,206 million, £1,311 million and £1,360 million in 1993–94, 1994–95 and 1995–96. The level of student loans will be increased in the academic year 1993–94 so that the average value of student support in grants and loans rises by 2–75 per cent. in line with the assumed increase in the GDP deflator. Spending on the access funds will be sustained in 1993–94.
Capital Expenditure on Schools
19. Total central Government provision for capital expenditure on grant-maintained and LEA-maintained schools is £598 million, £613 million and £624 million in 1993–94, 1994–95 and 1995–96. Local education authorities will in addition be able to take advantage of the change which the Chancellor has announced on the permitted use of capital receipts. Taking account of that and other flexibilities, gross capital spending on schools in real terms should be at least equal to the total in 1992–93, which will reflect the 15 per cent. increase in central Government provision announced last year by my predecessor. Further details of annual capital guidelines and allocations to voluntary aided and grant-maintained schools will be announced later.