The claim
“Today we spend more on debt interest than we do on running schools in England.”
David Cameron MP, speech on the economy, 7 June 2010

The background

The PM didn’t don a black cap this morning, but his message was sombre. Painful spending cuts are on the way, he said, and the pain would have to be shared by all.

Why be so brutal? The cost of not acting was worse than that of acting, and the more we borrowed, the more we would end up paying back in debt interest. Even today, Cameron said, the cost of servicing the national debt is sapping more cash than we spend on running schools.

So how do the figures break down?

The analysis

The Treasury estimates debt interest payments will cost £41.6bn in the current financial year (table C9). That’s the tab for the UK as a whole.

Central government education spend relates to England – Wales, Scotland and Northern Ireland do things separately. So the cost of schools in England relates to a smaller area than debt interest.

Cameron also talked about the costs of “running” schools. The education budget is split into two categories. The day-to-day running costs include things like paying teachers and buying textbooks. Investment spending goes on bigger projects like new schools buildings.

The latest Department for Education figures put these running costs at £40.7bn in 2010-11 for schools including sixth forms. That’s around a billion less than the latest debt interest cost.  And before the election, the education department put out a document which costed what it called “frontline” schools spending as £37bn this year.

So on that basis, we rate Cameron’s claim as fact.

The average listener might interpret the prime minister’s statement differently, though. If you ignore the budget distinction between day-to-day and investment spending, the overall schools spend looks a bit more generous.

Total spending on schools is set – or at least, was set, according to the most recently available figures the education department pointed us towards – to be £46.5 billion in 2010-11. That’s a good £5bn more than current debt interest costs.

In addition, the government puts aside £11bn a year for teachers’ pensions, the majority for pensions to be paid in the future.

“These are a cost you need to think of when planning how many staff to employ – they are a part of their pay package, so they aren’t irrelevant,” said Gemma Tetlow, senior research economist at the Institute for Fiscal Studies.

The verdict

Both the “frontline” and the day-to-day running costs of England’s schools are pencilled in as at least a billion pounds less than the cost of servicing the UK’s national debt this year. That’s what the PM said, so we give him a tick on the factometer.

But if you factored in more of the costs associated with educating pupils, throwing building projects or teachers’ pension costs into the mix, Cameron’s comparison would have fallen short of getting an apple from the teacher.

Although given projections that national debt interest will rise to around £70bn in five years’ time, he could end up being right on both counts sooner than he would hope – which takes us back to the need for cuts he outlined today.