“When they say there is £6bn of cuts next year, the Institute for Fiscal Studies made very clear that from this April, if there is a change of government, the biggest burden of the cuts this year would be borne by schools. And that’s a 2.8 per cent cut, it’s £1.7bn being taken out of school budgets in the coming year, and then in future years to pay for the national insurance cut.”
Ed Balls, speech to NASUWT conference, 5 April 2010
Be prepared to hear this argument repeatedly in the next four weeks: the Conservatives have pledged to block the national insurance increase, that pledge will remove £5.6bn from government coffers, this will be covered by £6bn worth of unspecified efficiency savings spread across all government departments except health, defence and overseas aid. So, different Labour ministers will conclude, that NI pledge will mean cuts to their department budget (and so services) of millions or (more likely) billions of pounds.
First off the blocks is Schools Secretary Ed Balls. The schools budget would be the worst hit by the NI pledge with a Tory government needing to cut £1.7bn from it, he told the teaching union NASUWT. But is he right?
Well, yes and no. Mr Balls is quoting analysis from the Institute for Fiscal Studies (IFS) on the Tory NI pledge. They estimate that to meet the £6bn savings target the Tories would need to cut 2.8 per cent from government department budgets (excluding those they have ring-fenced) on top of the 2.4 per cent that Labour have already pledged to save.
If this was evenly distributed across all departments, then that would mean slashing an additional 2.8 per cent from the £63bn schools budget – a grand total of £1.7bn.
And, as the schools budget is the largest unprotected area that the Tories have left, on the assumption that the percentage hits each department evenly, £1.7bn would then be the biggest departmental cut.
Except the Tories still have a get out clause. We have to do more homework, they say, and we can’t do that until we’re in government.
Two government advisers on efficiency savings say it is possible to make these extra savings without hitting frontline services, the Conservative party argues. These gurus recommend things like cutting IT programmes and outsourcing back office functions.
But the final decision about where the savings will come from will happen after a spending review which we will carry out once we take over, the party says. So the Conservatives could yet decide to cut less from schools than other departments, and equally they could decide to cut more.
And, as FactCheck looked at before, that’s all assuming the Conservatives can squeeze out enough extra efficiency savings to meet their target of £6bn starting this financial year.
So not quite full marks for Mr Balls. He’s on fairly solid (and supported) ground in saying that the Conservatives would have to cut public service spending by 2.8 per cent across departments where they have not pledged to protect the budget to afford their NI pledge. And he’s also right to say that schools is the largest area of spending the Conservatives have not ring-fenced.
But it’s the leap from this point to saying how much it will cost his department individually that Mr Balls falls down. The Tories haven’t said exactly where the savings will come from, and won’t until they are in government, so there’s every chance that the NI pledge could cost the department less (or more) than Mr Balls predicts.