Budget 2018 – Is education being flushed down the drain?

Published by Phil Reynolds on 29 October 2018

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Budget 2018 has come and gone and “Fiscal Phil” did not back up his leader Theresa May and announce austerity has ended, he simply said it was coming to end but discipline will remain. It all sounded very school teacher like. The jokes have been better in previous announcements too, with plenty of Halloween references to start followed by some potty mouthed humour when announcing a tax relief for public toilets.

The big announcement

Judging from the immediate reaction on Twitter, the Budget has once again not delivered for the education sector even though an additional £400m of funding for schools was announced. But it was the Chancellor’s referral to the “little extras” which has annoyed many.

The reason for this was that the funding will equate to just £10,000 per primary school and £50,000 per secondary school and will be available to spend on equipment and facilities – effectively capital rather than revenue. Therefore the funding will have a restricted use. So schools may have to tweak their budgets and perhaps transfer some of those improvements marked as revenue to the capital pot to release some funds.

At least schools will be able to stop the roof leaking but are unlikely to provide a teacher for the classroom with the leak.

Take home pay boost for staff

The personal tax allowance will increase to £12,500 from April next year – a year earlier than planned. This will be a welcome boost to school staff across the UK.

In addition, those who are higher rate taxpayers will also benefit as the threshold will rise from £46,350 to £50,000 from April as well.

In amongst the detail

Other announcements were buried within the official Budget document. These included a maths and physics teacher retention trial with the government providing £10m to undertake a regional trial to test how to improve retention of early career maths and physics teachers.

As predicted in my piece last week, the Climate Change Levy (CCL) is going to be aligned with gas usage to match the same rate of tax on electricity by 2021-22. Schools should monitor their bills closely to ensure this increase is not applied to their bills.

Primary Schools in rural locations will hopefully see a boost to their internet capabilities though. The Budget has allocated £200m to deploy full fibre internet in rural locations starting with primary schools in the Borderlands, Cornwall and Welsh Valleys.

The government will also amend VAT law to ensure continuity of VAT treatment for Higher Education providers by enabling them to register with the Office for Students in the Approved category to exempt supplies of education.

We also predicted the introduction of a “plastic tax” and this was proven to be correct but unfortunately there is no news that schools will receive a benefit from this.

Summary

The sector has received a boost with some additional funding but unfortunately once again the Government has missed an opportunity to boost morale by restricting the money to capital works.

Is this naivety on their part or does the government not trust schools to spend the money in an appropriate way if they don’t restrict the use? Based on the continued scrutiny of school budgets and finances, I suspect it’s the latter unfortunately and once again schools will feel like the education sector was just another “quick flush” in the Chancellor’s Budget – we can all do toilet humour Phil!

Make sure you download your complimentary copy of Kreston’s Academies Benchmark Report 2019 here: http://eepurl.com/ge8wvr

This year the report includes over 350 Trusts representing nearly 1000 schools and is based on those Academies that prepared financial statements for the period ended 31 August 2018 and which were audited by member firms of Kreston UK.

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