Tag Archives: revenue

A Minister for Education Trade?

Posted on by
Reply

Following on from the general election last Thursday, the period of Purdah has come to an end and the routine of government has re-started. This includes the publication of a whole swath of education statistics.

One set of statistics published during Purdah was the annual update on the United Kingdom’s annual revenue from education related exports and transnational education activity. Post Breixt, this part of the service sector is going to continue to be an important part of our economy. The data published related to the calendar year 2017, so almost two years ago. The statistics can be found at https://www.gov.uk/government/statistics/uk-revenue-from-education-related-exports-and-tne-activity-2017

As in the past, the higher education sector dominates the data, accounting for two thirds of the revenue. Changes at the overall percentage level tend to be slow, but it is clear that the further education sector now contributes little by way of expert revenue, recorded in these statistics as accounting for just one per cent of revenue. In, 2010, it accounted for six per cent. After the issue of bogus college that harmed this sector, there does seem to be room to explore whether there might new avenues of export generated revenue around the area of teaching and learning in the skills sector that could be led by the further education sector.

English Language training has been the other sector in decline in terms of export revenue; down from 14% of revenue in 2010 to 7% in 2017. In cash terms this is a decline from £2,230 to £1,570 (both to the nearest £10 million). However, there has been continued limited growth in this sector from transnational revenue earned overseas.

The independent school sector in the United Kingdom has increased its revenue, as has these schools contribution to transnational education. This is presumably due to the number of overseas campuses now in operation by schools. However, this sector only contributes some five per cent to total revenue.  Even so, this is five per cent that might have disappeared has the outcome of the general election been different.

Amongst education products and services, growth between 2016 and 2107 was steady, with equipment sales showing the strongest growth year on year, and a 20% growth over two years.

In terms of higher education, the bulk of fee income originates from students arriving from outside the EU, so this should not be at risk after the United Kingdom exists the EU in 2020. Whether EU income changes as a result of our exiting the EU won’t be obvious in this dataset until probably 2022 or even 2025 when existing EU students have completed their courses. However, any changes in research funding will most likely become apparent much sooner. In these figures, research income is not differentiated between EU and non-EU sources, so it is not possible to calculate the likely outcomes from the UK’s departure from the EU.

Education is an important and growing part of the United Kingdom’s expert drive, and I am sure that the new government will recognise this fact and want to ensure that as much as possible of the growth is directed to areas away from London towards parts of the United Kingdom that can benefit from this economic activity in their localities. Perhaps there should now be a Minister for Education Trade in the new government?

Figures back heads views on funding pressures

Posted on by
3

Most commentators will be focusing on the primary performance data published today. I am sure that is not why the DfE also chose to publish the annual update on maintained school finances for 2016-17 today. https://www.gov.uk/government/statistics/la-and-school-expenditure-2016-to-2017-financial-year

Although this is time series data, comparisons from year to year are handicapped by the conversion of schools to academy status and their removal from these tables. Nevertheless, at the national level, some pointers do become clear, especially as the funding between academies and maintained schools is now roughly the same for most of their government funded revenue income. They do, of course have different accounting years, and this can affect issues such as spend on salaries and the payment of increments.

If the average percentage of revenue income held as balances by maintained schools  is considered, this has now started reducing after a long period when the percentage was on the increase in both the primary and secondary sectors.

Maintained  Schools:

Total revenue balance as a % of total revenue income
Primary Secondary
2009-10 5.9% 3.2%
2010-11 6.6% 3.9%
2011-12 7.9% 5.6%
2012-13 7.9% 6.2%
2013-14 7.9% 6.4%
2014-15 8.2% 5.0%
2015-16 8.4% 4.6%
2016-17 7.4% 3.0%

This is the first year that the primary sector has recorded a decline in balances as a percentage of revenue income. In the secondary sector, the decline started in 2014-15 and there has now been three years of declining revenue balances overall.

For schools with a deficit, overall the aggregate position is also deteriorating:

Primary Secondary
2009-10 (3.5)% (4.0)%
2010-11 (3.6)% (4.8)%
2011-12 (3.7)% (5.7)%
2012-13 (3.1)% (5.2)%
2013-14 (2.9)% (5.8)%
2014-15 (3.3)% (7.3)%
2015-16 (3.0)% (7.7)%
2016-17 (3.5)% (8.4)%

Again, the position is worse in the secondary sector. This may be partly due to the remaining secondary schools that haven’t converted to academy status being more likely to be in deficit. Of the remaining maintained secondary schools included in the data for 2016-17, 26% had a deficit budget compared with just 7% of primary schools. This may also reflect the fact that rolls have been rising across the primary sector but falling until this year across the secondary sector.

The average spend on teaching staff increased in the primary sector by £68 per pupil and in the secondary sector by £58 per pupil over the two years 2015-16 and 2016-17. In the same period, the primary sector reduced running costs by £30 per pupil and secondary sector by £25 per pupil.

Schools overall increased non-government revenue income by £25 per pupil in the primary sector and £13 in the secondary sector in this period. Some of this is just income taken in to cover the costs of trips, meals and other expenses, but it also includes parental contributions and donations.

Overall, the figures show that the squeeze on income is now really beginning to affect schools, especially in the secondary sector. These figures back up the complaints of secondary head teachers about their funding levels. With general inflation now over three per cent and the  need to offer recruitment and retention payments to counteract below inflation pay increases, the next few years are going to be challenging times for maintained schools, and almost certainly for academies as well.

Schools can no longer rely on dipping into their saving for a rainy day: that day has now arrived and the cash is being used up.

 

 

 

Hey big spender

Posted on by
Reply

This week the DfE released the fact that the total Schools Budget for 2013-14 is in the order of £39 billion, give or take some £200 million*. Now, since academies and other direct grants schools are funded on a school-year basis and the community and voluntary schools that receive income passported through local authorities receive their funding on a financial year basis, the figure for this year isn’t comparable to previous years.

In addition to the Schools Budget, about £10 billion will be spent by local authorities on other children’s services, and education not related directly to schools. Individual schools budgets make up some 87% of the total Schools Budget this year, with central services, and areas such as transport accounting for the remainder of the expenditure. Over the next few years that 13% spent outside schools is likely to be reduced as councils across the country seek savings from back office functions, and also rationalise transport and other services.

Once again the remaining music services are the types of discretionary services likely to come under pressure, with councils transferring their running costs entirely to schools. It would be a great tragedy if Michael Gove’s relentless pursuit of a school-led education service, coupled with the hang-over from the economic crisis, ended one of the real success stories of the post-war education system.

Nationally, the average pupil will cost the government some £4,350 this year, but that appears to range from £6,935 in Tower Hamlets to £2,134 just across the river in Bexley. Although, as that is £1,600 less than the next authority it might be down to some accounting quirk regarding academies or another part of the calculations. London authorities, with their higher staffing costs, account for sixteen of the top 20 authorities in terms of per capita Schools Budgets. Since their secondary students also benefit from free transport under the TfL budget the figure would no doubt be even higher if this element was included.

Currently SEN transport costs an average of £69 per pupil across the country, and other home to school transport £51 per pupil. Given that the latter costs are mostly in the rural authorities, the cost to those authorities is obviously much higher.

Rather than the universal benefit of a limited period ‘cash freeze’ for consumers, the Labour Leader might have designed an energy policy to help reduce these costs to local authorities, perhaps by a national fuel purchasing scheme that allowed school buses and other community transport to run on lower priced fuel.

Whether a Department at Westminster serving both schools and the other functions supporting children’s welfare makes any sense these days is a matter for debate. The spending functions logically sit alongside many other social expenditure functions of councils, and the monitoring of schooling can be subsumed within a regulatory framework that includes services such as trading standards. After all, monitoring performance is soon going to be the only real education function left for local authorities, if the government at Westminster has its way.

* https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/244055/SR35-2013.pdf