EDUCATION BUDGET SORTED? The new NI Executive budget on Monday pushed an additional £150m into various Departments with DENI receiving £63m. It is interesting that some analysts have linked this new money to the Chancellor’s autumn statement and UK budget changes which affect the Barnett Formula rather than the Stormont House Agreement from 23 December. Instead, they point to the real deal within the SHA to be borrowing of £700m to finance redundancies in the public sector (20,000 jobs in the next 4 years). The NI Executive is now in debt to tune of £1.8BN (£1,000 per person). The additional £63m money has been earmarked for schools via the Aggregated Schools Budget or ASB. The Minister has added a further £17m to make a total of £80m going into the ASB. (Where did that £17m come from? No one knows at present but it may be that this is reallocating some of the £35m retained by DENI in the draft budget to fund pay increases, money which should always have been going to ELBs and schools as the employers anyhow.) The draft budget cut of 7% for schools amounted to £79m so the injection of £80m means that the cuts have now disappeared. That is great news for schools! Everyone who campaigned against the cuts can feel content that their efforts have paid off. BUT there are two major problems still causing concern for schools. First, the education budget has been rescued for 1 year only. The structural problems within the education budget (41/59% split) and the NI Executive’s finances continue. We are very likely to be back to square one in Nov 2015 when it’s time to set the draft budget for 2016-17. Second, schools will now receive a flat budget, the same income as the year about to end. This will leave schools facing rising costs from “inescapable pressures” and no additional money to meet these. Many schools will have a gap between income and bills to pay and, as a result, still require big savings to be made. These inescapable pressures include: incremental drift in teachers’ pay; a pay increase of 1% for teachers; a pay increase of 2.2% for non-teaching staff (essential to stop some staff falling below minimum wage after years of pay freezes); a 4.1% increase in employers’ contributions to the teachers’ pensions scheme; a National Insurance increase for employers of 3.4% from April 2016. All these are externally imposed and binding on schools. The total cost to a medium-sized secondary school – even after claiming back some aspects – could be around £100,000 of additional costs. A voluntary redundancy scheme for teachers has just been published with very tight turnaround times. Unfortunately a non-teaching scheme has not yet been made available by DENI. Moreover, schools have not yet received their actual budget figure for 2015-16 from DENI. This incomplete picture makes it difficult for schools to work out where they really stand. Assuming that the final (flat) budget and the non-teaching redundancy scheme both materialise in the next few weeks then schools will be faced with a mad dash to work out whether they need to make savings; how much the savings would amount to given the inescapable pressures; and how this can be dealt with – either by voluntary or compulsory redundancies or a mix of the two. Overall, schools still face a difficult period of uncertainty. It is great that the 7% cut has been removed from the equation but there is still a significant gap between income and expenditure for 2015-16 budgets; and there remain structural problems in education and Executive finances which are sure to raise their head once again when a budget for 2016-17 has to be agreed.
Posted on: Fri, 23 Jan 2015 21:56:37 +0000
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