Written evidence submitted by the Education Authority, Northern Ireland, relating to the funding and delivery of public services in Northern Ireland inquiry (FPC0009)

 

(1)              The financial situation facing the education sector, and the consequences of budgetary pressures on the delivery of public services.

 

Context

 

  1. The Education Authority is the funding authority for all schools in NI.  There are approximately 1,200 schools in NI, with around 60,000 staff employed in education delivery and an annual budget in excess of £2.4 billion. 

 

  1. The Education Authority has seen a real terms reduction in its annual budget of £150 million between 2011 and 2023.  What this means in practical terms is that if the budgets in place in 2011 were simply uplifted each year in line with inflation, the budget would be £150 million greater per annum than it actually is.  The result is that spending on education per child in NI lags behind the other three nations of the United Kingdom.

 

  1. The current unprecedented funding challenges follow ten years of under investment in education and ever-increasing demand (i.e. increasing pupil numbers, proportionately the largest school population, and the lowest education spend per pupil in the UK).

 

  1. Per pupil funding has fallen by about 11% in real terms over this period, when spend per pupil in Northern Ireland was already estimated to be hundreds of pounds lower than in England, Scotland and Wales.

 

  1. The Institute for Fiscal Studies analysis showed that since 2009-10, school spending per pupil was consistently highest in Scotland and generally lowest in Northern Ireland (the researchers were only able to track a broadly consistent measure of spending per pupil back to 2011/12).  In 2021/22, spending per pupil is estimated to be £7,600 per pupil in Scotland (including COVID-related spending) and £6,400 in Northern Ireland (excluding COVID-related funding).  Spending per pupil in England is expected to be £6,700 with the equivalent figure being £6,600 in Wales (both excluding COVID-related funding).  When extrapolated out, funding in Northern Ireland is approximately £108 million lower (based on spending per pupil) than in England.

 

  1. Increased levels of poverty and socio-economic disadvantage, higher than the other UK nations, coupled with the legacy of the conflict, intensify the level of basic needs among children and the necessity for schools to meet these in order for children to be able to maximise their full potential.

 

Current Financial Situation

 

  1. The Education Authority (EA) remains very concerned about the growing, unprecedented pressures facing education in 2023-24.

 

  1. Based on the interim Opening Resource Position for 2023-24 provided by the Department of Education in the absence of a full Budget outcome for all government departments, the EA faces a very significant funding gap in this new financial year. 

 

  1. Projections for the current financial year indicate that the education sector is likely to see expenditure exceed allocated budget by over £200 million.  This excludes the financial pressure which will emanate after implementation of teaching and non-teaching pay awards for the previous two years and the current year. It is possible that the unfunded gap could therefore grow to in excess of £400 million once these pay awards have been applied, representing circa 20% of the current available budget.  The primary areas of pressure are anticipated to be felt in the budgets delegated to schools and in meeting the educational requirements of children with special educational needs. This places school staff under considerable additional strain which will potentially manifest itself in increased teacher wellbeing related stress and also impact on staff retention.

 

  1. The majority of EA services to schools are contractual/statutory in nature.

 

  1. Almost 50% of the EA Block Grant of circa £850 million covers the costs of Special Education Needs (SEN), including SEN Transport. EA has a statutory duty to make provision for children with SEN.  This is the single largest cost funded from the EA Block Grant and demand for services is growing significantly year on year.

 

  1. The other key services delivered via the EA Block Grant funding include:

 

  1. Mindful of the responsibility to stay within the allocated resources, EA officers, in conjunction with DE, are in the process of working through the allocations and implications across a range of critical services.  However, this remains extremely challenging given the current legislative and policy context the EA operates in, together with chronic underfunding in education and the schools’ estate over the last ten years, and the growth in demand for services which has not been matched by a sustainable budget.

 

  1. Any proposals to reduce expenditure on the significant scale required to remain within the current budget allocation would potentially have very grave consequences for the educational outcomes of our children, in particular young people who experience disadvantage and those with a special educational need. This would also lead to an unprecedented reduction in both teaching and non-teaching staffing levels.  Furthermore, any significant dilution of funding towards the voluntary and community sector, considered to be a highly valued stakeholder within the education sector in Northern Ireland, would have also have potentially significant and detrimental consequences on children and young people and on our wider communities.  In the majority of cases, such proposals would require policy and legislative change.

 

  1. The funding received by EA is used almost exclusively to provide funding to schools and, via the Block Grant, to deliver services that support schools, children and young people.

 

Consequences for the Delivery of Public Services

 

  1. There has been chronic under investment in education over the last ten years.  In relation to schools, the disinvestment in children’s education over the past decade in NI is now being seen in a deterioration of the financial health of schools.  In 2018, for the first time, the number of schools in financial deficit exceeded the number of schools in a breakeven or surplus position. 

 

  1. School leaders report that they are at the point of desperation.  Often, schools have full enrolments; their leadership teams have taken steps to reduce their staffing complements; they have cut other running costs and have sought to secure income from parents or other fundraising activities; but despite these measures they still cannot live within their allocated budgets.  Many school leaders report that they can simply do no more and are calling for fundamental change to the funding arrangements.

 

  1. The diminishing level of funding for the education sector must also be considered in the context of a rapidly increasing demand for services for children with special educational needs.  A rise in the number of pupils and their individual complexity has led to an annual increase in the cost of meeting the needs of these children of between 10% and 12% over the past few years.  The education sector is struggling to meet these costs and in the current year the financial pressure in this area alone is at present projected to be in excess of £150 million, and that is before in-year uplifts for pay inflation are applied.

 

  1. The downward pressure on education sector funding over the past decade has also had a significant detrimental impact on the fabric of our school estate.  Minor school repairs and routine maintenance works have been a casualty of this funding shortage with annual expenditure being largely constrained to only those works required to ensure that schools can meet the minimum standards required by health and safety legislation.  Whilst every effort is made to ensure that school environments are safe, they fall well short of the standards we would expect to have in place to facilitate the effective teaching and learning of our children and young people.  There is a backlog of works that must be undertaken to address these issues and the cost of completing these works is estimated to be in the region of £500 million.  There is currently no funding to address these works and the backlog grows year on year.

 


 

(1)          The impact of the lack of a functioning Executive on budgetary management and strategic decision-making across Northern Ireland Departments

 

  1. The education sector has managed to meet its breakeven target for the previous four financial years but this has been very heavily dependent on additional financial support being provided via the Department of Finance’s in-year monitoring rounds.  The amounts of in-year monitoring round monies received over the past four years are as follows:

 

Financial Year

In-Year Monies Received

2022/23

£71.3m

2021/22

£83.4m

2020/21

£135.8m

2019/20

£49.8m

 

  1. Whilst this has been much appreciated, the non-recurring nature of monitoring round funding means that the sector has commenced each of the subsequent financial years with a funding gap. 

 

  1. Increasing demand for services, such as special educational needs, together with in-year pay and price inflation, subsequently exacerbated the scale of the financial pressure in these years.  In that context, it is impossible to plan effectively for the delivery of services when the underlying funding position is so volatile.

 

  1. One of the impacts of not having a functioning NI Executive in place during 2022/23 was that the initial budget allocation was cash flat, based on the opening budget allocation in April 2021.  This took no account of in-year monies provided to the education sector during 2021/22.  In addition, there were no monitoring rounds during 2022/23. 

 

  1. These two issues had a significant impact on the Education Authority’s 2022/23 financial position given its ongoing reliance on additional in-year monies to help meet the cost of delivering core education services to children and young people.  The result was that the EA began 2022/23 with an opening funding gap and this pressure was exacerbated during the year by pay and price inflation and increasing demand for services such as special educational needs.  Ultimately, at the point the Secretary of State announced the budget allocations in November 2022, the EA was reporting a projected year-end deficit of almost £300 million.

 

  1. The subsequent budget allocation by the Secretary of State was much welcomed.  However, in assessing the priorities of the education sector, the Secretary of State drew from the experiences and pressures of the education sector in England.  The result was that little priority was given to, nor any additional funding provided for, special educational needs.  This highlights the importance of having locally elected representatives in place to make decisions about the prioritisation of NI Block funding based on their knowledge of the specific needs of the NI population.

 


Conclusion

 

  1. A flourishing, appropriately resourced education system is absolutely vital for shaping, protecting and investing in the future of our children and young people. It is essential that this investment is safe guarded to enable the continuous growth and development of leaders and teachers who can support all of our children and young people, including the most vulnerable children and those with a special educational need, in order to maximise their full potential during these formative years. This is particularly critical in addressing a significant educational attainment gap, between learners who hail from the most disadvantaged communities and those who do not. The Department, former Executive and EA are firmly committed to ensuring that all future generations of children and young people can get a fair start in life and are inspired and supported to surpass all expectations. While this is a non-negotiable position, it is unachievable without the appropriate resources and is in danger of becoming a mere soundbite. Education makes an invaluable and immeasurable impact on the health, wellbeing and economic prosperity right across every community in Northern Ireland, therefore, it is essential that we invest in our collective future now.

 

  1. There is no doubt that the education system in Northern Ireland is in crisis and facing unprecedented pressures in 2023/24 and beyond.  We have been publicly calling for direct intervention to ensure that the critical importance of education is not forgotten and the education sector in NI is funded in a manner that facilitates stability and sustainability for future generations, thereby contributing to a prosperous, productive and peaceful society.

 

  1. In conclusion, we have three key asks:

 

         Ensure the education baseline is adequately funded to provide a stable and sustainable basis to deliver for our schools and children and young people, removing the reliance on in-year monitoring rounds to prop up the system.

 

         Ensure continued investment in the ambitious programme to transform Special Educational Needs services, developing and growing early intervention support, therefore reducing the reliance on Statutory services, to ensure that all of our children can lead happy, fulfilled lives, and enjoy an inclusive education within a supportive, nurturing environment. The transformation programme is also necessary to achieve efficiency, effectiveness, and value for money.  

 

         Ensure there is adequate investment to improve the fabric of our school buildings so that our children and young people can be educated in an environment that is conducive to effective teaching and learning.

 

 

April 2023