“Conspiracy of silence” on unprotected budget cuts in public services

Labor and the Conservatives are engaged in a “conspiracy of silence” over billions of pounds of cuts to unprotected public services such as higher education, leading economists have warned.

Both parties, along with the Liberal Democrats and the Green Party, this week published their manifestos outlining their plans if they win the keys to Downing Street.

Rishi Sunak and Keir Starmer continue to face tough questions over their tax and spending plans in the face of a faltering economy, rising national debt and weak growth.

Both parties have cost extra spending commitments by bringing in money for something specific, like Labour’s plan to fund 6,500 teachers through VAT on private schools, or by abandoning things, like the plan Conservatives to fund additional learning by closing “poor quality schools”. ” degrees.

Economists have warned that higher education is among public services likely to face cuts due to costly commitments made on protected services such as the NHS and defense and green investment.

The Resolution Foundation said last week that £19bn of cuts would be needed from unprotected budgets for any new government to meet its national debt targets by the end of the next parliament. One of shadow chancellor Rachel Reeves’ “fiscal rules” is that debt falls over this period.

Responding to Labour’s manifesto, Institute for Fiscal Studies (IFS) director Paul Johnson said: “Like the Conservatives and Liberal Democrats, Labor continues to remain silent on the difficulties facing he would be confronted.

“Given current forecasts, and especially with an additional £17.5bn borrowing over five years to fund (Labour’s) Green Prosperity Plan, this leaves literally no room – within the fiscal rule signed by Labor – for more spending than the current government plans. And these plans involve cuts to both capital spending and spending on unprotected public services.

Where will the money come from?

This will offer little hope to colleges and training providers looking to increase per-student funding without, as Johnson puts it, “surprise growth” in the economy.

Bee Boileau, a research economist at the IFS, pointed to higher education, prisons and courts as unprotected services “likely to come under serious strain, facing cuts in real terms that seem incompatible with the stated ambitions of the (Labour) manifesto in these areas.”

At the last Budget, Stephen Evans, chief executive of the Learning and Work Institute, predicted that the share of unprotected spending cuts dedicated to the adult skills budget would be around £380 million, on top of the £3 billion already eliminated in the sector since 2010.

Whoever becomes the next Secretary of Education will have to make tough decisions about how they spend their money.

Funding from falling school pupil numbers would most likely be allocated to school-related costs, rather than being redirected to the post-16 years, as this is a protected service.

Below-inflation funding increases in further education funding have already contributed to a growing pay gap between school and college teachers of around £9,000, with an even wider gap between school teachers and independent training providers.

David Hughes, chief executive of the Association of Colleges, said the pay gap was “unacceptable”.

“We want to see the next government make a serious commitment to investing in FE, its students and its workforce. If Labor forms the next government, I look forward to working with them to close this gap and reverse the chronic underfunding the sector suffers from.

Meanwhile, the Apprenticeship Levy is expected to raise a record £4.6 billion annually by the end of the next Parliament, but neither party has confirmed how much of this will be spent on training and how much would be redirected elsewhere.

The Association of Employment and Training Providers’ election manifesto, also published this week, calls on the next government to spend whatever it raises from apprenticeship and skills levies. Its chief executive, Ben Rowland, said the sector “still lacks sufficient funding and ideas to improve (apprenticeship) success rates, support small and medium-sized businesses and address the decline in the number of young people taking on learning “.

But Labor will change the levy so that funds can be spent on training other than apprenticeships, potentially freeing up funds for courses previously funded from other DfE budgets. The Shadow Education Secretary recently announced that 3 per cent of the funds raised would be used to fund 150,000 pre-apprenticeship courses.

Funds from non-apprenticeship levies could also be used to fund Labour’s ‘youth guarantee’ of a job, apprenticeship or training for every 18-21 year old. This was not quantified in the party program.

Johnson added: “Making real change will almost certainly require putting real resources on the table. And the Labor manifesto gives no indication that there is a plan for where the money will come from.”