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News - 18 November 2011

Biggest cut in education spending since the 1950s.

Until recently, education spending has enjoyed healthy year-on-year increases, but that is set to change. Along with most areas of government spending, education spending is set to shrink over the current Spending Review period.

Independent financial research carried out by the Institute of Fiscal Studies (IFS), has found that education spending will fall by 13% in real terms over the next four years. This would result in the biggest cut in education spending over any four year period since the 1950s. (More specifically the IFS highlighted funding for school buildings as one of the areas to feel the deepest cuts, which follows on from the scrapping of the Building Schools for the Future school rebuilding project.)
In response to this the Department for Education clarified the Government’s position on education funding, stating that “the schools’ budget is actually increasing by £3.6 billion in cash over the next four years”.

They go on to say that there is an increased level of free entitlement to 15 hours per week for all three and four year olds from last September – and are now extending it to all disadvantaged two-year olds. The two year freeze on teachers’ pay also means schools are benefiting from a lower level of inflation.

Lavinia Newman of ABDS says:

“With the uncertainty surrounding the cuts, as well as changes being introduced to school funding systems Bursars and school Business Managers will need to ensure they are always one step ahead.”

If you need any help and advice on this or any other aspect of business and financial planning contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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