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Education department faces £450m of savings

5th June 2015

The Department for Education budget faces savings of £450m, as part of a Treasury announcement to bring down public debt this year.

The savings in the DFE are to come from the “administration of arm’s-length bodies” and “non-schools” spending, says the Treasury.

The Conservatives gave an election pledge to protect the schools budget.

Shadow chancellor Chris Leslie called on ministers to “spell out urgently” where the cuts would fall.

The savings in education spending were announced by the Treasury as part of a £4.5bn package to reduce public debt.


But the Department for Education has indicated that this will include savings based on underspends in existing budgets, rather than cuts.

“These savings will come from a variety of measures including expected departmental underspends in demand-led budgets, efficiencies and some small budgetary reductions,” said a Department for Education spokeswoman.

This means that in some parts of the department’s spending plans there has been less demand for some services than had been budgeted for – and this underspend will now be absorbed as savings.

It means that reductions would be likely to be spread across budgets within the department, rather than in any particular individual saving or closure.

The Conservatives made a manifesto promise to protect per-pupil spending, including rising pupil numbers, during the next Parliament.

The Department for Business, Innovation and Skills faces cuts of £450m, with the Treasury saying that this will include “savings in higher education and further education budgets”.

A department spokesman said that “priority areas for growth and productivity” would be protected, including science and apprenticeships.

There will also be savings from underspends, in areas such as the regional growth fund and “funding compensation to energy-intensive industries” where there were fewer claims than expected.

Chancellor George Osborne said the announcement was “getting on with what we promised”.

“Reducing the deficit – that is how you deliver lasting economic security for working people. For as everyone knows, when it comes to living within your means, the sooner you start, the smoother the ride.”

Labour’s Chris Leslie, said: “Nobody disagrees with sensible efficiencies, because spending does need to fall in unprotected areas, but why is the chancellor hiding the detail?

“George Osborne needs to spell out urgently who is paying the price in this chaotic process. This is a shambolic approach to planning public services, ripping up his own ‘long-term plan’ set out just weeks ago in the March Budget. Savings need to be made through proper reform not short-term salami slicing.”

Read more on the BBC website