Public investment in education to decline to 1950s levels

The 40 per cent reduction in public spending on universities over the next four years will help contribute to the biggest fall in education spending over such a period since the 1950s, a respected policy institute has estimated.

October 25, 2011

The Institute for Fiscal Studies believes that total public spending on education in the UK will fall by more than 13 per cent in real terms between 2010-11 and 2014-15, with the deepest cuts being to capital spending and higher education.

It follows a decade when education spending grew by 5.1 per cent a year in real terms, the fastest growth over any decade since the mid 1970s, to reach 6.4 per cent of national income in 2009-10, although public spending on higher education grew at the slowest rate during this period, the IFS said.

The report estimates that over the next four years education spending will fall back to 4.6 per cent of national income by 2014-15, with schools seeing the smallest cut and higher education the second biggest after capital.

However, the report also points out that the rise in tuition fees will mean an increase in total spending on higher education when public and private contributions are combined.

Luke Sibieta, senior research economist at the IFS and co-author of the report, said: “Having risen by historically large amounts during the 2000s, the UK’s education budget is now set for a historically large fall over the next few years.

“Schools will see smaller real-terms cuts than other areas of education spending, while cuts to public spending on higher education will be more than offset by higher tuition fees. The biggest challenges lie ahead for the early years, youth services and 16 to 19 education, where spending is set to fall by around 20 per cent in real terms.”

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