England & Wales Covid-19, Economy and regeneration, Education and children's services, Finance

2020 Spending Review – ‘relative stability’ for children and young people’s services


The Government’s spending review is due to conclude at the end of November. In this blog, LGIU Associate Mark Upton considers the possible impact on education and children services.

There were hails of disappointment from the local government sector to the news this month’s (25 November) multi-year Comprehensive Spending Review had been postponed for the second year and replaced with a single year review, covering 2021-22. (The latest reports are that the review will go ahead regardless of the second pandemic lockdown in England). There were high hopes of convincing Government of the merits of a multi-year settlement for local government to provide much-needed stability. This means councils will only get a one-year funding settlement for the third year in a row, making it difficult to plan ahead.

Schools and children’s social care may know what government funding is coming to them over the next two years, but it is just relative stability surrounded by troubled waters of ever-rising demands and costs, instability of the wider local government finance framework on which children’s services also depends, made more-choppy and uncertain by Covid-19.

Last year schools were given a multi-year settlement with an additional £7.1 billion (in cash terms) through to 2022-23. The spending review will provide details of a new ten-year schools rebuilding programme. Schools and colleges are also looking for an extension of the Covid-19 catch-up funding to help disadvantaged young people so that support does not end next summer.

Corresponding increases for local authority budgets for special educational needs consisting of £870 million this year and £830 million next year were welcomed. However, this still leaves many councils nursing deficits in their high needs budgets. The demand triggered by the 2014 reforms has not been fully funded leaving parents feeling they are faced with a “postcode lottery” and councils experiencing mainstream schools – no longer under their control – shunting costs onto them. The Department for Education’s review into SEND provision will not now be published until next year; while it has some independent input not much has been said about its conduct since it was launched over a year ago.

There is a similar story for children’s social care, given a share with adult social care of £1 billion extra in last year’s spending review, which will now continue for every year of the current Parliament; a sticking plaster awaiting a promised independently-led “bold and broad” review of children’s social care. Again, work on the review has been delayed due to the pandemic and will be launched “as soon as possible”. But good news may come in the extension of funding for the Troubled Families Programme into 2021-22, and plans about its future beyond that.

In the meantime, children’s services’ department are anxious about new and pressing needs created by the strains of the Covid-19 restrictions placing substantial pressure once they are eased and referrals increase. The concern is that the obvious and immediate pressure on adult social care will mean that children’s services will be allocated (locally) a smaller share of the extra £1 billion of funding, whilst the additional funding provided to local government for Covid-19 pressures will run dry once the peak of activity arrives, creating significant funding pressures for the remainder of this financial year and into the next.

Early years providers also face very uncertain times with the pandemic restrictions, now a second national lockdown in England, and the shift to home working playing havoc with their finances. They will be hoping that current government support (through block purchasing free entitlement places) will be extended beyond the end of the year. Given that most of the sector is dependent on parental fees, if that did happen they would still not be out of the woods. This has lead to calls from the sector for a £240 million emergency fund targeted at childcare providers at risk of closure over the next six months.

There have been suggestions the government might use the opportunity to announce measures to help poorer families. The campaign by Manchester United footballer Marcus Rashford, pushing for free school meals to be provided to disadvantaged children throughout school holidays, has gained support across the political spectrum, piling pressure on the government to respond. The spending review is expected to contain details on the £1 billion Conservative manifesto plans for wraparound and holiday childcare places from 2021. That might be used as a vehicle brought together with the existing Holiday Activities and Food programme for the government to set out its own alternative plans.

Further education has been placed front and centre of the Chancellor’s ‘Plan for Jobs’, though many of the measures are short-term. The sector has been looking for a multi-year settlement building upon the real terms increase in their core 16-19 education funding this year, covering school sixth forms as well as colleges. Given one of the strategic objectives of this review is supporting employment, this is one area where the Government could provide a new multi-year settlement. The sector is looking for 5% real terms increase next year with subsequent increases above inflation thereafter.

Indeed this is likely to be a larger economic event than a one-year Spending Review. Given the second lockdown we may also see extensions of the job schemes the Chancellor announced in July like employer support for apprenticeships which is due to end in January.

There should not be too many surprises from this spending review for education and children’s services. Much has been pre-announced. Many decisions affecting spending pressures have been postponed. The immediate concern is having access to continued Covid-19 support.


This blog draws from the LGIU briefing prepared by Mark Upton – 2020 Spending Review – education and children’s services


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