Monday 25 October 2010

How the pupil premium disappeared

The pupil premium is a good idea. This blog raised two cheers for Nick Clegg's flagship policy, pending the missing funding details.

The pledge was to protect the schools budget in real terms, and find "additional" money for the premium, with it being made very clear 10 days ago that this was "additional" from outside the DFES budget.

Unfortunately, the pledge that the funding would be "additional" to the DFES budget got lost between a major speech on the Friday before last and Wednesday's Comprehensive Spending Review. Some people are in denial about this and some aren't.

Compare and contrast.

Clegg secures £7 billion pupil premium as addition to schools budget, The Guardian, Saturday 16th October.

Today Clegg repeatedly described the funds for his fairness premium as "additional" – making clear he wants the money to come mostly from outside the education department rather than merely outside the schools budget by cutting "non-essential" education projects such as youth clubsand after-school activities, as had been suggested.

A senior No 10 aide said: "The money for this will come from outside the education budget. We're not just rearranging furniture – this is real new money from elsewhere in Whitehall."

As Allegra Stratton reported, Clegg cleared this use of additional with Osborne - and with Cameron's blessing - but it came as news to those further down in the Treasury process. Clegg had insisted that he had to make the speech on the final Friday (before the details were settled) as the last possible "good news" moment before all of the attention turned to the cuts announcement. Clegg clearly expected Osborne's clearance for the public commitment to entail a commitment to honour it.

Alas, not. Take Michael Gove admits pupil premium is not new money as today's Guardian reports the Education Secretary's comments at the weekend.

"At the moment we're consulting on how the people premium, which is the additional money, the additional £2.5bn that we've made available for the poorest students, will be allocated, and it depends precisely on whether or not we allow the people premium to go to slightly more children, or we target it very narrowly on the very poorest. Depending on that, you can then make a calculation about which schools will find that they're actually losing funding, and which schools will find that they're gaining funding."

He later insisted that though "quite a bit" of the £2.5bn will come from the welfare reforms announced last week: "Some of it comes from within the Department for Education budget, yes." He insisted that the schools budget safeguarded and that the savings would come from elsewhere in the DfE's £67.3bn, which also funds children's services and support for families and older teenagers.

And contrast that with the supremely creative accounting of former LibDem Chief Secretary David Laws.

On the account of friends and insiders, the Sunday Telegraph credits Laws with having assisted by "negotiating" the settlement as part of his application for a return to the Cabinet.

A friend of Mr Laws said last night: "David Cameron wants him back, Nick Clegg wants him back and I am certain David himself would like to return. Everything is in place but they need to get the inquiry out of the way first."

It has also emerged that Mr Laws played a key "behind the scenes" role in planning last week's Spending Review (SR) – particularly in negotiating a settlement for education which saw the schools budget effectively ring-fenced and protected from cuts.

Laws explains how he did it in today's Guardian - Why I'm proud of the pupil premium, an opinion page commentary to supplement the news report of Gove's remarks, admitting that he hadn't.

Writes Laws.

Some people have tried to make mischief by claiming that the pupil premium is not additional money. This is nonsense. Without the pupil premium, I suspect that the budget for schools would have been based on a per pupil cash freeze for the period up to 2015. That would have meant a real cut in schools funding over the next few years. Instead, schools funding will rise by 0.1% (above inflation) each year until 2015 – that is a major achievement when the budgets of some departments are being cut by as much as a third. This is also a real-terms guarantee which the last Labour government was not able to make ... It would, however, be a terrible mistake to think that the main purpose of the pupil premium is to protect schools from cuts.

This is ludicrous. Laws claims that the pupil premium is additional money by hypothesising that there would have been a 9% real terms schools budget cut without it (despite the separate pledge to protect the schools budget), and then claims that the schools budget is pretty much exactly the same (a smidgeon higher) in real terms, in order to support an argument that the purpose of the premium is not to protect schools from cuts, at the same time as arguing that this is precisely what it has done.

Yet Laws' sleight of hand doesn't stop there. (Even the great Osborno might learn a conjuring trick or two here).

But schools funding is down in real terms, overall, since the 0.1% real terms increase applies only to current spending, with schools capital spending down by as much as 60%.

And per-pupil funding will certainly fall since the increase in projected pupil numbers is much greater than the "real terms" current spending increase anyway, as Public Finance sets out drawing on the IFS analysis.

However, Luke Sibieta, an economist at the Institute for Fiscal Studies, told PF that when inflation is factored in, spending per pupil will decrease by 2.25% over the Spending Review period.

‘Ignoring the pupil premium and inflation completely, Osborne does increase schools spending enough to meet the increase in pupil numbers,’ he said. ‘In other words, before the pupil premium the government just about maintains spending per pupil in cash terms.’ However, when inflation is factored in, this represents real-terms cuts of 10% over the four-year period, he said.

‘But the pupil premium then limits the real-terms cut in spending per pupil to about 2.25%,’


Finally, the proposal to weight a pupil premium so it will be worth two and a half times as much for the school of a free schools meal pupil in affluent Wokingham as in deprived Tower Hamlets will restrict its ability to target disadvantage, leaving its impact on inequality unclear.

The government appears to have overestimated the extent to which the considerable curent funding for educational disadvantage on an area-based basis impacts on the less well-off in affluent areas. Hence the IFS proposal.

“Attaching the same pupil premium to all disadvantaged pupils regardless of where they live would not only be simpler, it would also be more consistent with the Government’s stated objectives.”

Laws writes that he would like the pupil premium to rise to £5 billion a year in the next Parliament. Again, a laudable goal. But his current methods would suggest there is little or no barrier to achieving that overnight, by simply moving the furniture around again, albeit with a very limited impact on disadvantaged students.

But the pupil premium remains a very good idea, and a principle which ought not to be undermined by the apparent failure to implement it. What we should now be looking for is ways to genuinely fund it. We'll report back with a propsal on that one: your ideas welcome too.

1 comment:

Anthony Painter said...

This is spot on. The Spending Review admits as much as it only plans to maintain per pupil funding in cash terms. It's a cut in other words as you explain lucidly but there is an even more worrying element.

If you drive per pupil funding towards a certain group- an extremely worthy group admittedly- but then hold cash funding per pupil at the same level overall then you are actually cutting *cash* spending per pupil for the majority. So not only does the schools budget constitute a real cut once capital is included but it also constitutes a cash reduction for the majority also! Staggering.