15 December 2009
Schools Secretary Ed Balls has denied reports that other public services will suffer as a result of the spending increase given to education in last week’s Pre-Budget Report.
He told Public Finance that the chancellor’s plan to reduce the deficit through a rise in National Insurance and tax on bankers’ bonuses, while giving more money to the NHS, schools and policing, was ‘the right thing to do’.
‘The real threat to other services and to children’s services and policing would be if we were to adopt proposals to reduce the deficit faster,’ he said, adding that rising VAT would have been ‘very damaging for public services’. Tory proposals to cut the threshold for inheritance tax were equally harmful, he added.
The Institute for Fiscal Studies has said cuts to other government departments would be more severe because of the protection given to certain frontline services.
Yesterday Balls announced that the bonus payments given to 16 to 19-year-olds who stay in school or college would be scrapped, saving almost £100m. Teenagers currently receive a means tested allowance of between £10 and £30 a week as well as a bonus of £100 for every six months they stay in education.
The savings would be used to expand the basic Education Maintenance Allowance scheme, providing weekly payments for an extra 80,000 students. ‘We will continue to pay this bonus next year but in order for us to make the sums up and deliver the extra places, and even with the added money the chancellor allocated to us, we have to make savings,’ said Balls.
The ‘September Guarantee’, which ensures a place in education or training for all 16- and 17-year-olds that want one, alongside apprenticeships, will also be extended.
But current EMA rates will be frozen as part of the drive to make 3% efficiency savings per year, saving a total of £240m over three years in the budget for 14 to 19-year-olds.
