Today, the independent Institute for Fiscal Studies delivered their verdict on the Spending Review that George Osborne outlined yesterday – and it won’t be pleasant reading for the Chancellor. We’ve referred to their analysis elsewhere, but here’s a round-up of three of the claims the Chancellor made that the IFS takes issue with.
“Even as pupil numbers greatly increase, we will ensure that the cash funding per pupil does not fall.”
Chancellor George Osborne, Spending Review announcement, 20 October 2010
Sadly for Mr Osborne, the IFS doesn’t agree with him. Yes, the schools budget was one of the winners from yesterday’s announcements – largely, as FactCheck found out yesterday, as a result of the pupil premium.
But that growth is limited to 0.1 per cent a year over the next four years, while pupil numbers are set to increase by an average of 0.7 per cent a year.
That means total schools spending per pupil will be cut in real terms by 0.6 per cent a year (2.25 per cent over the four years).
And, assuming a flat-rate pupil premium and a freeze in underlying funding per pupil, the IFS says that means 60 per cent of primary school pupils and 87 per cent of secondary school pupils will go to schools where there will be real funding cuts.
“The average saving in departmental budgets will be lower than the previous Government implied in its March Budget.”
Chancellor George Osborne, Spending Review announcement, 20 October 2010
Not quite so, says the IFS. The average cut per department will be 11.2 per cent, they estimate, rising to 13 per cent cuts if you take into account the £6bn of cuts that George Osborne announced shortly after taking office that have been implemented this year.
In contrast, the IFS says, Alistair Darling’s March Budget set out average savings of 10 per cent in departmental budgets.
“As a result of these choices, departmental budgets other than health and overseas aid will be cut by an average of 19 per cent over four years, the same pace as planned by the previous government.”
Spending Review 2010, Executive Summary
Again there is a sleight of hand in the numbers – this time we’re looking just at those departments which did not have their budgets ringfenced in the spending review.. The Spending Review plan does cut unprotected department budgets by an average of 19 per cent over the next four years, but this again doesn’t take into account the £6bn cuts made this year.
Alistair Darling’s March budget would have made cuts of 16 per cent on average across these departments.
The IFS does acknowledge that their election analysis did say Labour’s plans implied a 20 per cent cut to unprotected departments, but, they say, more areas of spend were included in that “protected” group than under the coalition plans, and that was based on less official data than the Spending Review and the Budgets.
