Spending Review overhauls school funding

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The Chancellor has published the results of the spending review, including details of the Department for Education’s budget over the course of this Parliament.

The Spending Review and Autumn Statement has set out a 4 year plan , which includes:

  • National funding formula for schools from 2017
  • Repayment threshold for student loans fixed until 2021
  • More loans for further-education, part-time and postgraduate students
  • Free childcare of 30 hours, with a threshold of parents working at least 16 hours week and earning less than £100,000
  • An upper income limit of £100,000 on tax-free childcare
  • Sixth-form colleges to become eligible for academy status
  • Further-education college spending on adult skills protected in cash terms
  •  Apprenticeship levy 0.5% of employers' wage bill to raise £3bn per year
  • £23bn in building extra school places
  • National Citizens Service to be expanded to 300,000 places
  • Student opportunity fund to recruit poorer students to be halved

In addition to providing 600,000 additional school places, funding for universal infant free school meals will be maintained, supporting healthy eating and saving families around £400 for every infant each year.

The government will also invest over £1 billion more a year by 2019 to 2020 in free childcare places for 2-, 3- and 4-year-olds. To enable the doubling of free childcare for 3- and 4-year-olds with working parents, the government will invest at least £50 million of capital funding to create additional places in nurseries and over £300 million a year to increase the average hourly rate paid to childcare providers.

The changes to the allocation of school funding will set a national rate for each pupil, with extra funding for those with additional needs, in an attempt to address the substantial differences in funding levels that had developed, with some parts of the country receiving much lower levels.

However, teachers' unions said that despite redistributions of funding, the overall national picture remained a forecast fall of 8% in real-terms school budgets.

School budgets are protected, but there will be cuts to other educational support services - and the LGA warned of £600m being taken from budgets for services such as speech therapy, physiotherapy, occupational therapy, music and checks on staff.

The total financial support for education and childcare is to increase by £10bn over the next five years.

Mr Osborne gave details of an employers' levy to fund apprenticeships. He said it would be 0.5% of the wage bill and would raise £3bn per year, but would only apply to bigger employers with wage bills over £3m.

The chancellor said 250,000 students would benefit from extra loans - for tuition fees for students studying for higher level skills in further education, part-time students and postgraduates. These loans would be worth £1bn by 2019-20.

The threshold for the repayment of student loans, for those who will pay back the £9,000 per year fees, has been fixed until 2021.

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