- guardian.co.uk, Tuesday March 7 2000 17.54 GMT
Bonanza
In 1992, according to the Commons library, there were only two LEAs in England which were not spending above the SSA guideline. By the time Mr Blunkett took office, there were 30 who had been forced below the SSA level. Behind the annual announcements of increases in SSA, the amount which the LEAs actually spent on education was falling. In 1992/93, LEAs were spending £25.6bn. Adjusted to 1992 prices, the figure fell sharply in the next year, to £21.8bn. This was partly because further education was taken out of LEA control, but it was also part of a real funding fall which continued in every single subsequent year.
In 1994/95, LEA spending dropped to £21.2bn, then to £20.6bn, then to £20.3bn. And all this time, pupil numbers were rising. By the time Mr Blunkett announced his spending bonanza, his department's figures showed that, in 1992 prices, the LEAs were spending only £19.9bn; and, whereas they had once been spending £2.9bn more than the SSA, they were now spending only £1.1bn more than the Whitehall guideline. If Mr Blunkett wanted to avoid further cuts in LEA spending, he had to build any rise on top of the real level of spending, not on top of Whitehall's notional guideline. He chose not to.
On the face of it, he was steering the LEAs into disaster. If the extra cash he was giving them really amounted to only £800m for the first year, then all of this increase and more was going to be swallowed by this hungover annual debt. The reality is that LEAs have carried on clawing in extra money - but some of them also have carried on cutting. This year there are now 53 out of the 150 LEAs in England who are spending less than the SSA guideline on their schools.
It turns out that this lingering debt is only the first of a list of unacknowledged costs which will soak up Mr Blunkett's limited extra cash. This was spelled out to Mr Blunkett's department at the end of last year when LEAs in England and Wales submitted a report in which they explained in black and white that they did not have enough cash for the coming financial year, 2000/01. Mr Blunkett was suggesting (as part of his £3.6bn increase in SSA over three years) that they spend an extra £1.211bn for the year and that this would allow them to raise standards, but the LEAs complained that - even supposing they had enough cash to fund this increase in SSA - it would not allow them even to cover debts and unavoidable changes in their basic costs.
To close the remaining gap between SSA guidelines and real spending, the report said, they would need £388m; plus £250m for ordinary price inflation; £140m for an increase in pupil numbers; £20m for an increase in children with special needs; £125m for an increase in employer contributions for teacher pensions; and £150m for Mr Blunkett's new pay incentives for the best teachers. That long list left them with an increase of only £138m for the year. And they had still allowed nothing for the annual teacher's pay rise (costed by Mr Blunkett at nearly £400m); and nothing to fund any improvement in standards. Right in the middle of Mr Blunkett's widely advertised three-year bonanza, the education authorities were heading for the red.
This was a nasty political problem for Mr Blunkett. One official described the atmosphere in the department simply as "panic". And so it was that Mr Blunkett wrote to MPs on November 26 last year to announce an increase of £64m in grant and a £90m delay in school contributions to teacher pensions. This was a radical shift in plans - an emergency move. "It was a complete surprise," said Neil Fletcher, head of education at the Local Government Association, "although we were glad they admitted that their figures were wrong."
There is no torrent of cash flooding through the mainstream of education; essentially, the same old drought continues. In Buckinghamshire, for example, the local authority last year surveyed the state of local schools and found they would need a 13% real increase, but Mr Blunkett's three-year increase gave them scarcely enough to allow school budgets to match rising costs. Looking at their buildings, they found they needed £6m a year for repairs; they could afford only £2m; and the backlog of building work had reached £21m. Any plan to meet the needs of their schools, the council concluded, was "unlikely to be achievable".
Some local authorities are claiming that, allowing for rising costs, there is simply no real new money for them at all. The system is constructed so as to make it impossible finally to prove or disprove the claim. The funding of local government is notoriously complex and produces irrational discrepancies between similar areas and so it may be that some LEAs will receive real, new cash from Whitehall but it is clear that the £3.6bn boost which Mr Blunkett advertised is a political mirage.
There remains one final category - £3.3bn of direct spending by the DfEE. Here, at last, there is real additional money, unclouded by hyperbole or conjuring. Here, at last, there is some ground for Mr Blunkett to congratulate himself. And yet, even here, the story is not quite the one that he likes to tell.
Part of this direct spending does not go on education at all. It pays for Ofsted and for the department's running costs. Local authorities have complained that while the department canes them for spending no more than 3% of their budget on central costs, the department spends nearly 7% of its own budget on its own administration, a trend which it has appeared reluctant to admit. For example, when Phil Willis asked how much of the budget for education action zones (EAZs) had been spent on administration, he was told the answer was £500,000. When he asked a few weeks later how much of the budget for EAZs had been spent on a specific list of administrative activities, he was told the answer was £1.14m - nearly 10% of the entire EAZ budget. Mr Willis went on to discover that the DfEE's spending on consultants has soared by more than £2m during the current year.
Targeted
The element of spending which does represent a real increase in spending is targeted grants - the sure start scheme for pre-schoolers, the programme to reduce class sizes, EAZs and, most important, the standards fund (SF), a rapidly expanding collection of cash which is parcelled out by the department on some of Mr Blunkett's most high-profile projects such as the literacy and numeracy schemes, the training of "superheads" and the programme to reduce truancy.
This year's standards fund is worth about £700m, an increase of £300m over last year. Next year, it is due to rise by a further £400m, with a comparable rise expected in the final year of the Parliament. During the three years of Mr Blunkett's bonanza, it will have risen by about £1bn. This money is real, it is new, but there are two problems with the way in which Mr Blunkett has administered the grants.
The first is that this system of grants not only bypasses the school budgets which are the core of education, but actually steals money away from them. This is because for almost every pound LEAs accept from standards fund, they have to match it with up to 60p from elsewhere. This year, they are expected to pay out £400m in matching funds. Next year, as the fund rises, they face a bill of £600m. Almost all of the LEAs who replied to our survey reported that they were struggling as a result. Brent has decided to turn down grants in order to protect its schools' budgets; Cheshire has already cut its school budgets by 5% to pay for SF grants; Derbyshire has had to divert £1.8m from its school budgets; Stockport has had to cut its central services by £360,000.
The second problem is that this money is failing to reach the most needy schools. The department has consistently claimed that it wants to provide, in the words of Estelle Morris, "targeted support for the areas of poverty". Although there are one or two programmes which are focused on deprived areas, most SF grants are distributed on a simple formula which takes no account of deprivation and the rest, as well as grants for some repairs, are distributed on a bidding system. Indeed, the former Liberal Democrat education spokesman, Don Foster, found the richer authorities tended to do better, apparently because they had more staff and resources to prepare their bids.
His research also revealed that schools and LEAs were wasting considerable time and money in unsuccessful bids. During Mr Blunkett's first two years, there were 25,353 bids but only 8,972 were successful. Oxfordshire made 1,015 bids and saw 1,002 of them fail. Blackpool put in 212 bids and succeeded with only 10.
The torrent of new money turns out to be little more than a trickle, with new cash soaked up so fast that it scarcely leaves its mark. You can see it in one of Mr Blunkett's proudest achievements, the highly successful scheme to cut the size of classes for infants, aged five to seven. By 1999, the prime minister was pointing to impressive results with 100,000 more infants in classes of under 30. What Tony Blair did not say was that children in every other age bracket - nursery, junior and secondary - were all being taught in classes that were even more overcrowded than when Labour came to power. Last year's figures showed the number of children in classes of more than 40 had doubled since Mr Blunkett took over; the number in secondary classes of more than 30 was the worst for 14 years; secondary classes generally were more overcrowded than they had been for 20 years.
And this trickle of new money over the last three years of the parliament is flowing into a system which was made marginally worse during Mr Blunkett's first two years. Despite Labour's promises, his department's share of government spending actually fell during these two years, from 11.8% to 11.7%. Ten years earlier, when Kenneth Baker was running the department, he had put 12.3% of government spending into education. By the end of Mr Blunkett's first year, spending per secondary pupil, in real terms, had fallen from £2,550 in 1992 to only £2,380. During his second year, spending in real terms was frozen while pupil numbers rose with the result that spending per secondary pupil fell to its lowest since 1989.
The reality is that while Mr Blunkett is entitled to point to his increase in SF and other grants as a real bounty for British education, almost all of the rest of his £19bn is an illusion, and the grants alone have not begun to reverse the historic underfunding of Britain's schools. The idea that his original announcement of the bonanza was an historic day which would "give everyone in our society the opportunity to realise their full potential" was just another flourish with the magic wand.
Additional research by Helene Mulholland
