Tag Archives: HM Treasury

SEND, fuel duty and the Apprenticeship Levy  

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SEND was identified as one of their 3 top priorities by 60% of a random sample of 100 delegates at the recent Lib Dem Conference. 45% ranked it first and 15% second, often behind funding in general.

This result isn’t a surprise to anyone in education, although falling rolls doesn’t yet seem to have worked its way up the political agenda to be a top priority for councillors and activists. I am sure that will change.

Anyway, as regular readers know, before the summer break I expressed concerns about the SEND deficit many local authorities are facing, only to have the end date for the ‘statutory override’ kicked down the road from March 2026 to March 2028 two days after my blog appeared. I m sure there is no link between the two, just great timing on my part.

So, what might local authorities do. Two suggestions, one possible and one for consideration. Local authorities need to check that they are spending all the Apprenticeship Levy raise by them in its present form. They should not be returning any unspent cash, raised from maintained schools to HM Treasury. Apprenticeships across the SEND landscape can be a good investment, and certainly a better use of the cash than sending it back to Westminster. Hopefully, all local authorities are now making full use of the Levy cash collected.

My second suggestion needs some work. At present, SEND transport is a massive cost to many local authorities. The recent NI hike won’t have helped, and should be recognised in the funding for the High Needs Block. If not, it is a tax on SEND, and indeed education as a whole.

The other tax is Fuel Duty. Unlike VAT, I don’t think it is recoverable by local authorities, despite making up around 50% of the price of fuel at the pump. Assume a taxi does two journeys a day for 190 days a year, and uses a litre of diesel for each journey with a SEND young person. That’s around 380 litres a year. As 400 is an easier number to use, let’s round it up to that number. To compensate, let’s say diesel is £1.30 per litre. This puts the fuel cost at £520 per taxi per year. Ten taxis, £5,200; 100 taxis: £52,000. Now assume 50% fuel duty and the possible saving mount up.

Agriculture has long had a red diesel scheme to cut fuel costs.  Education should not be paying income from the High Needs block back to HM Treasury in tax. Like business rates, a fuel rebate scheme should be in place where local authorities certify fuel purchased, and receive a rebate of the duty.

However, this might incentivise the use of fuel-inefficient vehicles, so the scheme should be predicated on a growing percentage of vehicles being electric, and thus not requiring the rebate. Vehicles could also be required to be less than five years old, and with a minimum miles per litre outcome.

Such a scheme won’t solve the problem, but every little helps, and it might encourage the use of electric taxis that are both cleaner for the environment and, until the government changes the rules, less costly in tax paid by local authorities.

Solve the High Needs Block statutory override issue now

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June is the time of year when local authority Directors of Finance start thinking about the budget for the following April. HM Treasury is doing the same thing for the government but, with a Spending Review just announced, their task this summer should be much easier than usual as Ministers have already negotiated with the Chancellor. Directors of Finance have no such protection and are bound to produce a balanced budget for councillors to approve or face the prospect of having to issue a s114 notice and default, as some councils have already had to do in recent years.

It was very surprising not to see an announcement in the recent Spending Review about the statutory override many upper tier councils are carrying on their balance sheets,

The statutory override on council balance sheets is a result of overspends on council’s High Needs Block spending that finances the pupils and young adults with special educational needs in their local area. (SEND)

There are suggestions that a significant number of upper tier authorities with be unable to present a balanced budget for 2026/27 to councillors next February for approval unless something is done about the present statutory override that currently ends in March 2026. If nothing else is put in place, some councils will not be able to present a balanced budget and hence will default.

The simple answer would be to extend the override until March 2027 to see what the White Paper on SEND, now promised for the autumn, will bring. That move just buys time for a longer-term solution.

I wonder whether the DfE thought local government re-organisation might be a way of dealing with the deficit when new councils were being formed. After the results of May’s elections, I cannot see the present government wanting to push ahead with reorganising councils and creating new elected Mayors if such a move were to hand more victories to their opponents, and notably to the Reform Party. If reorganisation grinds to a halt that route out is no longer available for solving the issue of the override.

Another alternative is to switch the 2% precept on Council Tax from adult social services to SEND and let the NHS take the strain on funding for the mostly elderly residents currently being paid for out of the local government funding 2% precept. Such a move would not be popular but could be possible. As it wasn’t in the Spending Review it seems unlikely.

The DfE could rearrange their spending and transfer the consequences of falling pupil numbers from the Schools Block to increase the High Needs Block and do the same for the Early Years funding to keep it constant on a per child basis but recognise fewer children means less total spending. Such a move would affect funding for schools and early years setting with falling rolls.

Do nothing and councillors in Parties running councils will return from their summer breaks to be confronted with a list of serious reductions in services and personnel that might be needed in 2026. Such reductions won’t be efficiency gains, but unacceptable cuts on the level of a fire sale.

Solving the problem of the statutory override between now and the parliamentary recess for the summer should be the number one priority for all involved with education and local government. Not to do so would have consequences that are unthinkable.

The situation regarding the statutory override should not have reached the present position. In my view, it would be a gigantic failure of political will if it is not solved now.

Time to stand up to HM Treasury

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The news that postgraduate apprenticeships for teachers are to  be reduced to nine months in length Red tape slashed to get more teachers into classrooms – GOV.UK and aligned with the school-year, effectively returns school-based training possibilities to where they were two decades ago when the previous employment-based GTTP Scheme was flourishing.

The fact that the government is offering schools up to £28,000 to cover the cost of training apprentices in mathematics, biology, chemistry, physics, computing, and modern foreign languages – the subjects which have the highest teacher shortages – if they take on an apprentice is something of a mixed blessing.

Could we see some applicants ditching higher education courses for a salary and presumably pension and NI contributions as a better bet than a scholarship, especially as once one has a foot in the door, the school is likely to want keep them after the end of the apprenticeship, if they prove successful.

This announcement form the DfE means apprentices pay nothing for their training and will earn a salary while they are training before moving on to full time teacher pay salary. If the salary is better than the scholarship, even without the additional benefits, might some be tempted to move if they become aware of this new route, especially if the school is nearer their home.

The advantage of an employment-based routes has always been their flexibility to offer career changers training near where they live, rather than at a university or SCITT that may be some distance away from their homes.

Of course, there needs to be applicants wanting to start teaching in these subjects, and I believe the current uncertain economic situation will help create the environment for the necessary increase in applications.

Where does this leave those training on other routes without a salary and with student debt around their neck? As they also have no certainty of a job at the end of their training, it appears a poor bet in a time when schools are complaining of under-funding and making staff redundant. Why take the risk of an intensive year of study with no guarantee of a job at the end?

This is why I think the Secretary of State must stand up to HM Treasury, and once again offer the free training for all that was withdrawn by the coalition government in 2010 in a really short-sighted move. Not to do so, could destabilise the whole teacher preparation market, if not in 2025 then certainly in 2026.

I have repeatedly said that the presence of two trainees in adjacent classrooms, one on a salary and the other paying for the privilege of their training, was plainly wrong. This new move on apprenticeships makes it both absurd as well as wrong.

Perhaps the government could offer free training for all as part of the pay bargaining this year with the professional associations. After all, HM Treasury knows that falling rolls will see the schooling budget on a downward trajectory over the next few years, especially as the decline in rolls is greatest in London, the highest cost area in terms of government funding of schooling.

The new on apprenticeships is not a gift horse one should ignore, but one to use as a basis for putting all graduate teacher preparation courses on the same financial footing for those seeking to become a teacher. Not to do so will have consequences.

Suggestions on Savings ahead of the Spending Review

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How might the Chancellor save money on education? Apart that is from the possible pay freeze? Over the years this blog has explored a number of different possibilities for savings. Two obvious ones are in the teacher preparation market and the cost of advertising vacancies.

The DfE uses the Teacher Supply Model to identify how many places to fund for teacher preparation courses going forward. Each year, it seems to overfund the number of places in subjects such as history and physical education, so that there are always trainees looking for teaching posts at the end of the year. Should the modelling also take into account data about vacancies to match against that of the other inputs, such as pupil numbers and the proxies for vacancies currently used in the model? Possibly several millions could be saved in fees paid to universities.

The other saving championed regularly by this blog, albeit with a degree of self-interest, is the spending on recruitment advertising by schools. The DfE has made an attempt to reduce this expenditure, but it has been half-hearted at best, and lacking in understanding of how the market operates. In the spring I offered the DfE my help in making their site the ‘go to’ place for teachers seeking jobs, but was rebuffed. Fair enough, but it is worth reading my recent post of the £3 a vacancy cost for recruitment.

Supply teaching is another expensive cost to many schools, especially this year with teachers either self-isolating or off sick with covid-19. Could bringing this spending back ‘in house’ save money by removing the profit element from the cost? Worth a look given that perhaps there will be a million supply cover days this term across the country, if the estimate from one authority that I have seen is grossed up.

Procurement in general is a big area for savings, but like these other savings it challenges the assumption that market-based capitalism will regulate prices. That might be true if schools shopped around, but they don’t, and monopolistic suppliers, whether local or national, have few incentives to reduce prices and introduce new technological solutions that can cut costs for schools.

The whole area of leadership costs must be looked at. How many MAT CEOs do we need across the country? How much more does the system cost to manage than 20 years ago, and is any extra value for money as a result? May be the extra high paid jobs are an incentive for more teachers to stay in the system, rather than leave or better paid jobs elsewhere?

School need more funds, and it is worth reflecting what might happen if effective savings are not made quickly? Some small schools will close, some pupils where parents cannot afford to support the school will possibly receive a worse education than they would have do if funding had been better, and teaching will still not be a career of choice, except in a recession. Even then, it needs to be a global recession, as teachers can now find work anywhere around the world.