The Government’s Spending Review: Education

In the second blog post on the Government’s Spending Review, I thought I would cover the educational elements of the review. I do have to point out must of the detail has not been released, and will only know of the impact of the headlines when these details are made public in the next month or so.

The Department for Education (DfE) ‘central children’s services budget’ will be protected at over £300m per year ‘to help drive up social care workforce standards to improve support for vulnerable children’.

An increase of £1bn in funding per year by 2019-20 to support the extension of free childcare places for 2, 3 and 4 year-olds will be made available.

Free childcare for working parents of 3-4 year olds will be doubled from 15 to 30 hours per week from September 2017. This is restricted to families with an upper income limit of £100,000 and a minimum weekly income level per parent equivalent to 16 hours.

As for capital funding for new school places in primary and secondary schools, the Government has said in the Spending Review, £23bn will be made available over the period to support the creation of 600,000 school places, the opening of 500 new free schools, and the rebuilding and refurbishing over 500 schools. In Cornwall, we are providing new school places in our recently approved strategy, but this only takes up to the 2017/18 period. I really hope some of the £23bn will come to Cornwall.

Furthermore, capital funding of at least £50m will be made available to create additional places in nurseries.

In the Spending Review, it highlights its aim in addressing essential maintenance needs. This point is interesting, as to date, the Government has not addressed this area. for example Cornwall looking at least a £90m maintance backlog, but only having £5m/£6m to try to tackle the backlog.

Over £300m a year will be made available to increase the average hourly rate paid to childcare providers. Universal Infant School Meal funding is also set to stay.

The Government said they will protect the core schools budget in real terms enabling the per-pupil rate for the Dedicated Schools Grant to be protected in cash terms and the pupil premium will be maintained at current rates. Thought the latter does not take into consideration of inflation.

A worry is the announcement that the Education Services Grant will be reduced by around £600m, including phasing out the additional funding schools receive through the grant.

It is no surprise to see the Government re-affirm it aims of having no local authority schools and the removal – as yet unknown – statutory duties on local authorities in relation to schools. For the first-time there has been a clear message to Sixth Form Colleges who will be able to become academies, allowing them to recover their non-business VAT costs. No doubt in the first phase it will be to encourage, but in reality, they will have no choice but to convert.

The current national base rate per student for 16 to 19 year olds in school sixth forms, sixth form colleges and further education colleges will be protected in cash terms for the Spending Review period. Yet, this is after funding cuts in this sector have already been implemented, like for Sixth Forms where they saw a reduction in funding of £800 per pupil.

A new funding system for schools will be introduced from 2017-18. A detailed consultation on the specifics of the proposed new system will be published in early 2016. It is about time the Government addressed this, as I have highlighted on this blog before the huge differences in funding between local authorities.  This new national funding formula will include elements for schools, high needs and early years.

 

 

The Government’s Spending Review: the detail behind the spin for the social care precept and business rates

On Wednesday, the Chancellor of the Exchequer, gave the Government’s Spend Review for the next four years (2016-17 to 2019-20 ). It had four objectives: to develop an integrated health and care system, spread economic growth through a devolution revolution, address social failures in order to extend opportunity, and protect national security.

There were many parts to the review and not all apparent in the headlines and spin. Those in Local Government circles were very worried that the axe would again fall on them. The last few years have been brutal for this sector, with services reducing or stopping all together due to the cuts in funding. So there was a lot of nervousness on the impact of the review for services Cornwall Council provides. In this blog post, I will cover the social care precept, funding and business rates.

The Chancellor said there would be a new Social Care ‘precept’ which allows Councils responsible for Adult Social Care to increase Council Tax by a further 2% above the current (2%) referendum threshold. If this was implemented for Cornwall this would generate additional revenue of around £4.7m per annum and would add £25.88 per year to the Band D charge (on top of the already proposed £25.49 increase at 1.97%).

My issue with this new precept is social care is not only about adults! Social care also includes lots of children related services. So why didn’t the Chancellor just say social care, and then allows Council’s to decide how to spend this money. I can tell you children’s services are under huge pressure with reduced budget and increased demand. Furthermore, if you do not address issues early on in a childs live, the reality is it will cost you far far more as they get older.

The skeptic in me things the Government has again thrown a hospital pass to local authorities by giving this new precept powers, whilst at the same time reduce grant funding to local authorities. So when a service is at breaking point, the Government can say ‘but we gave local authorities the powers to fund these services’ but knowing really they cut the original funding. Sneaky ‘persons of disputed parenthood.’

Which brings me on to local government spending. The Chancellor confirmed that the Revenue Support Grant (RSG) will be phased out entirely by 2019-20. There will  be a consultation ‘shortly’ on changes to the local government finance system to ‘rebalance support including to those authorities with social care responsibilities’. Currently, the Council receives £174.25m as part of its RSG

This consultation will ‘pave the way’ for the implementation of 100% business rate retention’ and will assess the main income streams available to local government, including council tax and business rates. In addition it will consider the necessary responsibility transfers to maintain fiscal neutrality. In more simpler words, we in local government are going to get less.

Cornwall Council receives as part of its current budget £82.3m in business rate receipts. So if the government wants to local authorities to have fiscal neutrality with the removal of the RSG and Cornwall Council keeping 100% of the business rates, we need to make sure the actual amounts add up because I cannot see where the £88,55m is going to come from if Cornwall Council is going to remain at the same levels of funding.

Local authorities can also lower business rates, but they cannot raise them over a certain threshold unless there is a directly elected mayor. I believe this to be 2%.

I also have to laugh at the comment in the spending review on Councils will be ‘encouraged’ to draw on their reserves to manage change. How that will be put in place is uncertain. But reserves are already being used, and if you spend all your reserves, you have nothing left if something goes wrong.

So far, I cannot see many positives for Cornwall Council in this spending review. Post to come will be on the other aspects of the Spending Review.

Leader of Cornwall Council rebuffs the Prime Minister

The Prime Minster has recently made inaccurate statements in reference to Cornwall Council’s reserves. In an interview the Prime Minister said Cornwall Council has £200m worth of reserves that it could use to fund services. If Cornwall Council had this amount just lying around in reserves, it would be using the money to fund services. However, we do not.

The Leader of Cornwall Council, John Pollard has issued a statement ‘rebuffing’ the Prime Ministers statements. In this statement, the Leader spells out clearly the money Cornwall Council has and how it assigned.

“The Prime Minister obviously has a different view of the use of reserves than we do! I am keen to state the facts:

We are curious as to where the PM’s gained his figures because our financial accounts are audited by independent external auditors and as such our reserve balances have been validated and checked by them each year.  The movement since 2011 has been an increase of around £18m.  The majority of this increase is set aside for specific projects and capital investment. Once again the list is:

  • £17m held on behalf of others e.g. reserves held for schools, Tamar Bridge, Port of Penryn, Port of Truro
  • £64m held to meet long-term commitments e.g. repayment costs for assets like school buildings, PFI projects.
  • £37m held to deliver specific projects funded by government,
  • £9m held for the one-off costs of cutting the budget by £196m
  • £5m held for insurance purposes.(In some cases we self-insure.)

Reserves are our safety net for unexpected items and emergencies like bad weather, while the cuts in government funding are ongoing and happen each year. Reserves are only usable once. This should be contrasted with the £196m reduction in Government funding which sees the level of money given every year to the Council to spend on services, reduced by £196m.

So, this means that even if we were to spend all of our reserves next year to prevent services being reduced then the following year we would still have to reduce the services but we would also have no money to cover emergencies such as reacting to bad weather events. We have to reduce our running costs in line with our income in order to have a sustainable basis to run our services in the future. To put simply, it’s a bit like your mortgage at home, if you use all your savings to pay the bank one month, next month you are still in the same situation but have no savings to pay for the boiler if its breaks down. So you are in an even worse situation.

Cornwall Council has a proud record of careful and prudent budget management. Our finances have remained strong and  secure at a time of great turmoil. We are fortunate to be able to use this position to cushion some of  the impact on services and to plan for the future. The P.M may regard this as having lots of money available, I see it as good housekeeping and budget management.”

I am really pleased the Leader has issued a statement like this, as incorrect information needs to be addressed no matter if it is the Prime Minister or not. They very fact Cornwall Council is having to make swinging cuts to services is due to the Government cutting funding to many local authorities including Cornwall Council.

Maybe the Government should take the honest approach and say “yes we have cut funding to local authorities” I would personally have more respect, and it would stop Cornwall Council being blamed for everything….

Helston College C-Block and why it’s not being rebuilt

For anyone who has had to make a tough decision that will affect people will know how difficult it is. For those who have never had to, then it is easy to knock and past judgement as you often find with the online trolls.  At the May Cornwall Council Cabinet meeting, I had to present a report which I never would have like to present, but had to because of various situations. This report was on the issue of funding a rebuild of Helston College’s C-Block.

Let’s go back to July 2012, the then Cabinet agreed to a C-Block replacement subject to the appropriate funding. To be clear, the original decision was made with no clear idea on how the £10m for the rebuild would be funded.  Move on to the present and since I become the Portfolio Holder which this comes under I have looked at every option of finding funding for this building. Sadly, the £10m cannot be found as I will explain. It must be pointed out, it is very unusual for a Council to support a large-scale scheme like this from its own resources. In fact the Government in the early 2000’s took away this power and money and now gives grants directly.

However, the Government does fund  small building schemes and school maintenance each year. This is called the Educational Capital Grant. For 2012/13 this is £6.8m and for 2013/14 it is £6.34m. This money is for all LA schools, and as you can see it is reducing year on year. To make matters worse, Cornwall Council has maintenance backlog of £59m. Yes, really £59m. This amount has not just suddenly appeared, but is the result of under-funding for school maintenance. So to use all this money for Helston College wouldn’t be enough and would leave all other schools with nothing.

Could this be funded out of the directorate? The answer is no. Why? Well to cover the repayments we would have to find at least £400k per year for over 20 years. This would have a huge impact on the directorate’s budget and would result in other services being cut to pay for the rebuild. For example, the recent decision to close two respite centres due to budget pressures saves £600k per year. So it gives you an indication on what would be needed to do to cover the repayment costs.

There is no scope to change the Council’s capital programme, or use the limited reserves the Council is now left with. As for the latter, the reserves are being used to deal with the severe financial pressures the Council now faces and more recently the added burden of paying for the storm damage.  I hate to dispel the popular myth, but the Council is not awash with money. Furthermore, as per the policy rules, on large-scale works the school has to pay 10% of the costs. Which the college could not fund.

One source of money was identified, and this is the unspent (about £6m) Dedicated Schools Grant (DSG). This is ring-fenced money the Government gives to Cornwall for LA schools. However, this money is not controlled by the Council. It is controlled by a group known as the Schools Forum. This forum is made up of teachers from Cornwall who meets and decided how money is spent (I have explained the DSG simply). It is this group who has the power to say yes or no and on this occasion, they said no. Which we can do nothing about it. Off course all of this money would not have done the rebuild on its own, but it could have been made up with some of the money from the maintenance money

I even travelled to London to meet with the School’s Minister which had been kindly arranged by the local MP, Andrew George. Sadly, this drew a blank, but the Minister did someone down to have a look at the college.

So the decision at the Cabinet, which was supported by my fellow Cabinet Members, was to look at a maintenance programme which will deal with the pressing maintenance issues. I wish it was different, but the Council cannot just magic money and fund this without it having an effect on other areas.

There is a small glimmer of hope, and this is the recent announcement of £2 billion worth of funding for ‘Priority School Building Programme.’ Local Authorities, dioceses, academies and multi-academy trusts can submit expressions of interest for an entire school site, or parts of it for funding for rebuilds. I believe this is Helston Colleges best chance of obtaining funding for this much-needed rebuild. I will be doing all I can in making sure Helston College and other school who are in similar positions to be given some of this funding. It is about time, Cornwall was given its fair share of funding, as so often is misses out.

So there you have it, this school is in my local area  and I wish the funding position was different, and Helston like other schools were getting the school building and funding they deserve. Sadly, this is another example of under-funding in Cornwall.

Prime Minister’s ‘money is no object’ announcement is nothing more than a ruse

During the height of the storms and floods, the Prime Minister told the country and indeed the world, that money is no object to help communities recover from the unprecedented weather front Cornwall – and other areas – were subjected to.

Now the weather has abated, and we are in a more settled period of weather, the Council and other partners can fully assess the damage inflicted upon the communities. It is bleak, and the full costs are still unknown, but the costs is looking like topping £21m. For Cornwall Council this is made up of £4m revenue, and £17m in capital costs. This can be further broken down by:

  • Highways £5m: revenue £2m and £3m capital
  • Coastal Defence £15m: revenue £1.8m and capital £13.2m
  • Coast Paths/other £1m: £500k for both revenue and capital

    So, what ‘money is no object’ funding streams are available to the Council? In truth, very little. Yes, we have the Bellwin Scheme, but apart from the dates to claim have been extended, the criteria to claim has not changed. The scheme can only be used to:

  • only to prevent loss of life/damage to property
  • prevent suffering or severe inconvenience
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    Futhermore, the Council will have to pay the first £887k excess. The potential claim by the Council is still be assessed, but early indications are approx £2m eligible spend. So in pounds, shillings and pence will mean out of the £2m, the Bellwin Scheme will only pay out £1.23m.

    The critical point is that the criteria have not changed and therefore the majority of the estimated £21m worth of damage will remain unfunded by Central Government. So much for ‘money is no object.’ This means the repair bill will have to be found from elsewhere and/or from within the Council’s own budget.

    It gets worse, as the promised £130m EA money will have little impact in Cornwall. It is good news for Somerset, as they will get £10m. A further £30m will be for EA assests. Priority is based on assets in the EA asset database. Which for Cornwall is only one, the rock-armour off Newlyn. The £130m will also not cover Coastal Assets just flood (fluvial) defence. To put it bluntly, Cornwall will not be at the top of the funding, or actually get any help.

    Our roads in Cornwall have also been badly affected by the weather. Credit must go to Cormac who have worked to address the many issues. However, the Governments announcement of £140m for Highways will be allocated on a formula basis to all Local Authorities. And as yet, those allocations are unknown, though I am told should be known shortly.

    The Leader of the Council, John Pollard has written to the Prime Minister highlighting the concern and extra financial pressures the Council now faces. The Leader has also written to the Secretary of State for Farming, Food and Rural Affairs to again highlight the European Fisheries Fund’s storm damage gear replacement scheme as over bureaucratic, with claim forms running to 21 pages. Plus having to submit business cases and three quotes. However, the real kick in the teeth on this funding is you cannot purchase lost gear until you have receive a letter from the MMO saying you can purchase it. I highlighted this in a previous blog HERE

    The position Cornwall Council is difficult, it is looking at a huge bill of repair and recovery which it can little afford without changes and severe impact on the budget. It is all well and good for the Government to roll out a series of measures to help and think they have done their jobs, but those measures have to actually mean something, and more importantly have real funding attached to them.

    So my message to the Prime Minister and Government is help is needed in Cornwall to recover from the weather. Without help, things are going to get very difficult for Cornwall Council.

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    Fairer Funding for Cornwall’s Schools

    Cornwall’s schools have for a long time been underfunded compared to the national average. It makes no sense, and it is simply unfair on our schools and young people. This per-pupil shortfall is £154 less than the national average.

    The current school funding system is unfair, and out-of-date. These proposals will address some of the imbalances Cornwall faces in its funding.

    However, I welcome the news that the Government has announced £350m worth of extra (national) funding. This extra funding is to try and address the imbalances to the per-pupil funding. This is only currently a proposal and is currently being consulted upon. If the proposals do become reality, this extra funding will be for the 2015/16 period.

    For schools in Cornwall, and if these proposals come into force, we will see a rise to the per-pupil funding of £54. This equates to an extra £3.5m. An increase of 1.2% on previous years. However it is still £100 short of the national average.

    Currently Cornwall receives £4,397 per-pupil. Hopefully from 2015/16 this will rise to 4,451. Plymouth and Devon also see a rise. For Plymouth the amount goes from £4,364 to £4,380 – an extra 500k (0.5% rise). Devon will see a rise from £4,156 to £4,345 – an extra £16.2m (4.5% rise).

    It is just a pity the proposed changes do not include Early Years and Special Needs funding. Which the funding formula also needs to be addressed

    Though let’s celebrate the positives, and say at least it’s increased funding, that will benefit our schools in Cornwall. As only 62 out of the 153 LA’s got this extra funding.

    Though just how far ‘fair funding’ goes is apparent when you look at the per-pupil funding for Westminster. They will see a uplift of £199 per-pupil, considering they are already £1,112 about the national average!

    Real Government funding for fishermen or just tokenism?

    The Government has announced there will be a pot of money available to help fishermen who have lost gear in the recent storms. At face value I welcome this announcement as I was beginning to think the industry were getting left out with support.

    However reading through the details, this isn’t actually new Government money, but recycled money from the European Fishing Fund. Which could already be applied for! In fact, by using this money for those affected by the storm, you are taking money away from other parts of the fishing industry. As the £11m
    EFF is used for non-mandatory safety equipment, engine replacement, fish handling and chilling equipment to name but a few.

    It is also a grant scheme, so you would have to put in an application and go through the grant process. Which is never a quick process and you have to wait till your grant is approved before you can actually buy/replace any lost equipment.

    Furthermore, the amount that can be applied for – up to £5000 – is a very small amount if you actually look at the cost of replacing the lost gear. £5000 is better than nothing, but it not far off tokenism. As I will explain.

    Talking to local fishermen who have lost gear, I asked if could be provided with details on the cost of gear he has lost; which one fisherman has kindly done so.

    For instance, the cost of a standard pot is around £50. The larger ones are £75 each. The back-lines for the pots are £47 per coil.

    This ‘new’ funding would not cover his initial loss of 83 pots – 60 small 23 large – as that comes to £5,430. Plus, at the time of talking, the fisherman is still missing 18 strings. Each string contains 25 pots. If those strings are not recoverable that’s a £22,500 loss and that’s without adding in the cost of back lines and just using the costing for a small pot.

    Even those pots which are recoverable, they will need to be repaired and re-lined. This is just on an 8 metre boat operating 650 pots. How can a small operator fund the losses, especially with the crabbing season really starting at the end of this month.

    Now you can see why this fund is more like tokenism and not serious aid and support to an industry which has suffered due to the weather. What the Government must do is support the ‘farmers of the sea’ with real financial support as this industry is a major food provider in the UK.

    Without proper aid, this industry will find itself again on the rocks and in real danger of foundering. Please Government, stop saying you are going to help, if you are not actually going to do so!

    Government confirms Newquay Airport qualifies for support

    My Cabinet colleague Adam Paynter – whose responsibility covers Newquay Airport – confirmed  and welcomed today’s formal confirmation from the Department for Transport, that the air service between Newquay Cornwall Airport and the London region is eligible for a Public Service obligation (PSO).

    By Imposing a PSO on the route between Newquay and London will mean the Government providing a subsidy to an operator to deliver the connection for a four-year period.  This will provide a much more secure future for the route than the current situation which relies on the commercial decisions of an operator.

    The next stage is for the Department for Transport to formally notify the European Commission of its decision.  This will then be followed by the Council issuing tender documents inviting airlines to submit bids to operate a service.   Under EC regulations, airlines must have a two month period in which to prepare and submit bids to the Council.

    This is great news for the airport and the council who own the airport, as the Newquay to London route is important to not only the airport, but also the Cornish economy which benefits from having the airport.

    £18m of Government Money for Eight Cornish Primary Schools

    The (near) end of the week has resulted in some fantastic news for Cornwall and Cornwall Council from the Schools Minister, David Laws. This is the award of £18m in funding under the Targeted Basic Needs Programme.

    This money will provide 840 new school places in the following eight schools:

    Indian Queens Community Primary School and Nursery
    Mount Hawke Academy
    Nanpean Community Primary School
    Pondhu Primary School
    St Columb Minor Academy
    St Petroc’s C of E VA School
    The Bishops C of E Primary School
    Treleigh Community Primary School

    I feel this is brilliant news for the Council after all the hard work in submitting the bid. Amazingly, all eight schools were successful. The Council knows that there has been an increasing pressure on places in a number of areas on Cornwall. This money will enable the schools and council to create more places in these schools.

    Well done to everyone involved.

    50 ways to save money written for a five year old

    If it was not bad enough having to deal with the proposed cut in funding from Government, the department which local government comes under has published a condescending document which tells councils how to save money. It is titled 50 ways to save money.  However it is missing one vital point, and could have saved time and money on the other 49 to produce. That simple one is do not waste our money in producing  (point 35) such an insulting document.

    I would say all local authorities are working out ways to save money while keeping services going. They do not need documents like this to tell them how. It is like telling an English literary Don how to read a book. From Cornwall Council’s point, it has looked at and implemented, or is looking at least 49 of the 50 points. They only point the council has not looked at as far as I am aware is, points 24, scraping the CEO.

    I am sure MAGA will not be pleased to see point 34: stop translating documents into foreign languages: only publish documents in English. Though the DCLG could take a leaf out of its own book with point 35: reduce the number of publications and media monitoring.

    Anyway, have a read and see if you can come up with any other points you think should be included. I will sent them to the DCLG for the publications second edition!

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