Spending Review: School funding, tax credits and cuts

Chancellor George Osborne with Anne-Marie Trevelyan in Alnwick. Picture by Jane Coltman
Chancellor George Osborne with Anne-Marie Trevelyan in Alnwick. Picture by Jane Coltman

There are hopes that historically-underfunded schools in Northumberland will get a better deal under measures announced in today’s Spending Review as George Osborne made a U-turn on cuts to tax credits.

The Chancellor was widely expected to make some kind of climb-down on tax credits by easing the impact, but the planned cuts will now be scrapped.

He said: “I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them. And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether.”

He avoided another controversial issue by pledging real-terms increases to police funding, which follows speculation that there would be cuts that could impact on front-line policing.

However, there will be hefty cuts to the day-to-day budgets of the Department for Transport (37 per cent), Defra (Department for the Environment, Food and Rural Affairs) (15 per cent) and the Department for Energy and Climate Change (22 per cent).

On health, Mr Osborne pledged that the NHS budget will rise from £101billion today to £120billion by 2020/21, with £6billion delivered up-front next year. However, the service in England also needs to make £22billion of efficiency savings.

On education, he committed to introduce fairer school funding through a new formula with a national rate that every school will receive for each pupil, with additional funding for those with extra needs.

From 2017/18, the resources schools and local authorities will receive will be based on pupil characteristics rather than historic political calculations and the Department for Education will consult on the detail of the announcement in early 2016.

It follows years of campaigning by the F40 group of poorly-funded local authorities, which includes Northumberland, and a concerted parliamentary campaign to make the issue a top political priority.

Berwick MP Anne-Marie Trevelyan said: “Northumberland schools have been at a disadvantage for decades and our teachers have shown extraordinary resilience to provide the best education on much smaller budgets than many parts of England.

“The move towards a fair per-pupil funding system will start to redress the inequalities which Northumbrian children have suffered. I will continue to press the Government to make this happen on the ground as soon as possible.”

SCHOOLS NorthEast says that if all school pupil places in the North East were funded at current national levels, this would be equivalent to £45.6million. At current levels, Northumberland would experience the greatest overall benefit (£8.3million) were pupil places funded equally.

Mike Parker, director of SCHOOLS NorthEast, said: “The current schools funding formula is broken. If North East schools were funded at the same level as London schools, we would have an additional £360million a year to spend on education. Just having national parity would be equivalent to an extra £45.6million for the region.

“It is vital, however, that the Government focuses the new formula on need so those areas that have the greatest hill to climb are given the resources to do so.”