Spending cuts warning spells 'no good news for schools'

Austerity 2.0: ‘No good news for schools’ as Hunt warns of cuts

Chancellor says ‘all departments' will need to find savings, and 'some areas of spending will need to be cut’

Freddie Whittaker

More from this author

5 min read

| 17 October 2022, 2:39 pm

Chancellor Jeremy Hunt

See comments

School budget cuts would be a “disaster”, headteachers have warned, after the chancellor told government departments to “redouble their efforts to find savings”, warning that “difficult decisions” lie ahead.

The NAHT school leaders’ union said its members would “rightly fear” a suggestion from Jeremy Hunt that further savings will need to be found.

The new chancellor warned this morning that “all departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut”.

This is despite the government having U-turned on almost every measure set out in its mini-budget less than three weeks ago.

The government was planning to order government departments to cut 2 per cent of their revenue funding, it was reported, before former chancellor Kwasi Kwarteng was ousted last week. However reports say Hunt intends to go further.

Unions have also called for urgent clarification on energy costs support after the chancellor announced universal help for households would end earlier than planned.

Support for businesses – which includes schools – would be “targeted to those most affected” after the current price guarantee ends in April.

‘Redouble efforts to find savings’

In a televised statement today, Hunt said: “All departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut”.

“But, as I promised at the weekend our priority in making the difficult decisions that lie ahead will always be the most vulnerable.”

Reversing measures such as a planned cut in the basic rate of income tax to 19 per cent while raising corporation tax will raise around £32 billion, Hunt said, but he claimed more work was needed to “eliminate volatility in markets”.

“There will be more difficult decisions to take on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.

More details are due to be confirmed on October 31.

It follows that government departments were due to be asked to find savings of between 10 and 15 per cent of their capital budgets, and 2 per cent savings in revenue budgets. However, this was before Kwarteng was sacked.

DfE faces £1.8bn funding cuts

A 2 per cent resource cut would see the DfE’s total budget slashed by £1.8 billion. A 2 per cent cut to the core schools budget as it stood in 2021-22 would equal £996 million, or the equivalent of more than 18,000 teachers.

A 15 per cent capital cut to the DfE’s budget would amount to around £840 million.

Whiteman

But as Schools Week reported last week, there is little available to cut that isn’t money provided directly to institutions like schools.

Paul Whiteman, the NAHT’s general secretary, said leaders would “wait to see” whether the announcements “calm the markets. However, one thing is clear: there was no good news for schools or other public services.”

Kevin Courtney, joint general secretary of the National Education Union, said the suggestion of further cuts “will alarm school and college leaders”.

“There is already a serious funding crisis due to the sharp rise in energy costs and unfunded pay awards, so the education secretary must do everything in his power to protect funding.”

Whiteman added it would be a “disaster if any of the mooted efficiency savings have an impact on school budgets”.

Speaking later in the House of Commons, Hunt said he wanted to “do everything I can to protect our precious public services”.

“I want to have fantastic schools for all our children, whatever their background. That is why I have taken the difficult decisions I have announced today.”

He also denied the government was planning austerity on the “scale” seen in 2010, and said it was “likely that cash spending will continue to go up”, but warned it was still “going to be tough going forward”.

Fears over future of energy bills support

Heads have also demanded urgent clarification on how long energy bill support for schools will last.

Last month, ministers announced that non-domestic energy users such as schools would see their rates reduced to a “government-supported price” for the next six months. A school with £10,000-a-month energy bills will save around £4,000 a month.

This scheme was always going to be reviewed beyond April. But the chancellor’s announcement about household support has prompted fears about its future.

Hunt wants to “design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

“Any support for businesses will be targeted to those most affected. And the new approach will better incentivise energy efficiency.”

But Whiteman called for “urgent clarification that the government will continue to support schools beyond the initial six-month period previously announced.

“Schools are already financially stretched to the bone. They have made all the easy savings. All that is left are very hard decisions with big consequences.”