Schools Secretary Ed Balls raised eyebrows at the weekend with his Sunday Times interview where he offered up £2bn in savings from his departmental budget. Meanwhile, a new CBI report today has advocated a combination of higher fees and reduced subsidies for student loans as a way of finding extra resources to fund higher education.
Both apparently reflect a remarkable change in the political weather, where education is no longer sacrosanct from cuts. Balls also put the other parties on the spot, since both have promised to protect school budgets. In fact, Balls was simply proposing a recycling of existing budgets to pay for a maintenance of frontline standards, something that has been a feature of every Labour spending review. And the truth is that the only serious savings that can be achieved in the education budget would come from a pay freeze for staff and a reduction in pension entitlements.
The Balls proposals would build on successful experiments where smaller primary schools share a headteacher, often reflecting difficulties in finding a suitable candidate rather than cost-saving. For comprehensives, he believes that posts like that of bursar or business manager, or a specialist assistant head, might be pooled. But his bigger savings would come from a second attempt to rein in school surpluses, effectively penalising the most efficient schools, and the voluntary growth of pooled procurement.
Yet the biggest costs in education are in staffing. Teachers' salaries cost £21bn a year. And it is only here that serious savings can be made. A three-year pay freeze rather than a 2% annual pay increase could save £2 billion over three years. Further savings would result from a freeze for other staff. In Ireland, all public sector staff now have to pay a pension levy, around 6%-7% of income at the level of the average teacher in England. A similar measure here would raise up to £6bn over three years, and go some way to addressing complaints about discrepancies between private and public pensions, without any teacher losing their job. Of course, any such measures would need to be applied across the public sector. And given teaching union anger about Balls's modest proposals, it would be a brave politician who advocated them ahead of a general election.
Equally, both main parties are hoping to delay decisions on tuition fees until after an election. The CBI proposals may have made headline news this morning. Yet their fees proposals are at the lower end of what vice-chancellors would like to see, as a Universities UK report made clear earlier this year. Unlike the Balls proposals, the income would be easily realisable. And despite concerns about student debt, the income-related nature of the student loan scheme – where repayments are 9% of graduate income above £15,000 a year – means that graduates would repay no more than now in a given year, but they would make repayments for longer.
However, if universities and employers want such change, they should be expected to make real their commitments to employer funding of degrees and improved quality teaching. Larger employers should make explicit the number of undergraduates they are prepared to sponsor, and universities should have to address concerns about reduced teaching hours and be expected to repay a portion of the fees where levels of student dissatisfaction with courses are particularly high. Whatever happens, education will no longer be spared the tough choices that will be needed to reduce the national debt.
