Net Local Authority Revenue Expenditure by Service (%)
The Educational Institute of Scotland is running a campaign against any budget cuts in Scottish Education.
As a teacher and passionate advocate for education I understand and support the sentiment and motivation behind the campaign but I can’t quite see how it’s going to be possible to ring fence any single service within the Scottish public service environment – for all that it might make my job a lot easier.
No less a person than Sir John Elvidge , Scotland’s senior civil servant, speaking at an event on the 29th January, warned that public service spending in Scotland is likely to be reduced by 10 per cent in real terms in three years time and 20 per cent in seven years compared to current levels. He went on to say:
“I think one of the hardest questions that faces us all as managers is how will the trend of real terms reductions last.
I think, without getting into political territory, it’s difficult to identify the point of certainty at which one says: ‘Ah, yes, it will definitely have turned round by then.’ And all I’d say is, that if one looks beyond four years, at that rate of annual real terms reduction and taking into account compounding, it doesn’t take very long to get to 20 per cent instead of 10 per cent.”
Taking Elvidge’s figure of 10% (which will be closer to 12% with the compounding effect) I thought it might be useful to explore the impact on public services in Scotland.
The most recent figures we have available for Scottish education expenditure relate to the financial year 2007-2008. In that year the revenue expenditure was £4.7 billion. Using this figure , although it’s likely to be much closer to £5 billion in the current year, a 10% reduction would equate to £470 million. The logic must be that if this sum is not to be picked up by education then it must be passed onto some other Scottish public service. So who would be best placed to pay this bill?
The Scottish Health service had expenditure of £8.9 billion in 2006/2007. Their share of the 10% savings would be £890 million – so perhaps they have their fair share of the challenge and the focus should lie elsewhere?
So how about the cost of running the Scottish Government? The 2010/2011 draft budget for running the core administration of the government is £258.3 million – which is dwarfed by the £470 million three-year saving which would be required of education.
Of course Scottish education (apart from further and higher education) is funded though Local Authorities – there must be significant opportunities for the burden to lie with other Local Authority Services?
Education’s average share of the total revenue expenditure for Local Authorities in 2007-2008 was 42.6% . The table shown above describes how education and and social work – which includes child protection and community care – takes that proportion up to 65%. Then add police, fire and emergency planning and you’re up to nearly 80%. Throw in roads and transport, economic development and environmental services and the total is well beyond 90%.
The reality is that Local Authorities cannot meet a 10% saving from its net revenue expenditure of £11.1 billion, i.e. £1.11 billion, from the remainder of those services which might not be deemed as sacrosanct as some of those listed previously.
Perhaps John Elvidge gets close to the truth when he suggested:
“This is going to be an enormous challenge for any system – and it tells us that the right thing for all public sector managers to be doing at the moment is to err on the side of pessimism in their forecasts, and radicalism in their thinking.” (my emboldened type)
For me it’s this latter trait which will require all involved in education to adopt if we are to safely navigate these difficult waters over the next few years.
I’ll leave the last words with John Elvidge:
“I think the shape of delivery of at least some public services is going to look completely different. I wish I knew which ones they were and which ones will look different, but it’s obvious that we can’t simply continue to run the models that we run for delivery of various public services,”