The report of the Select Committee on Public Expenditure for Education and Skills 2005/6 makes interesting reading for companies involved in the sector.
The salient facts are:
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Increases in spending are levelling off
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More clarity is needed about school funding arrangements – of increased importance because of the current education bill and prior to the introduction of the three-year new funding system in 2007/8
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That the DfES will be very unlikely to go anywhere near achieving its £4.3b efficiency target
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Higher Education has not been adequately funded – it has had just an 18% increase whereas schools and the FE sectors funding rose by 50% and 56% respectively
None of these should come as a surprise to companies involved in education. The largest wildcard is what impact on school spending (if any) the Gershorn report on cutting Civil Service spending will have within the DfES. It’s likely that rather than achieving any significant savings out of better use of teachers’ time (the central plank of the DfES’s efficiency gains strategy) it will be from the area of procurement that most savings come.
Until recently, the DfES had been an anomaly in the Civil Service with senior bureaucrats and policy team leaders able to procure goods and services in a decentralised way. This is likely to end and suppliers should expect to see a far more centralised cost-focused approach to procurement and, more importantly, to payment. Consultants such as Tribal Avail have been advising the DfES on this issue for some time and the impacts are likely to be felt imminently.
However, when the Chancellor presented his Pre Budget Report last December things weren’t looking great for the DfES who, according to the Office of Government Commerce, had contributed the least of all the major government departments in terms of savings. The timing of the report, coming before the Chancellor’s Budget Statement could have been quite politically damaging (especially for Ruth Kelly), but in the busy pre-Christmas news cycle it went almost unnoticed.
Similarly, the recent report by the House of Commons Education and Skills Committee on Public Expenditure on Education and Skills 2005/6 could have been politically embarrassing. This is because it shows that in spending terms, education has not really been the administration’s main priority, with the spending gap between education and health growing (in cash terms) from £6b in 1997/8 to £16.6b in 2004/5.
