DFE caught adding tuition fees to school funding claims

Sean Coughlan
Education correspondent
@seanjcoughlanon Twitter

image copyrightPA
image captionHead teachers were given figures on spending that have turned out to include students' tuition fees

If you're a student paying tuition fees, you might be surprised to find that the cost of going to university is being included as "spending" in the government's defence of its record on school funding.

But when ministers faced accusations of under-funding schools in England, a figure they quoted widely as evidence of high spending has been found to include billions of pounds of university fees being paid by students, rather than only government spending.

School leaders have described this discovery as "shocking and disturbing".

The Department for Education rejected their claims, saying not only were record amounts going into schools but the "OECD has recently confirmed that the UK is the third highest spender on education in the world".

The claim for world-beating spending was used repeatedly by the DfE, it was published on the department's website and the Minister for School Standards, Nick Gibb, used the same argument on BBC Radio 4's Today programme, in a debate over school budgets.

"We are spending record amounts on our school funding. We are the third highest spender on education in the OECD," said Mr Gibb.

Whose spending?

It sounds impressive. But the third-place ranking from the OECD, an international economics organisation, is not just a schools figure or even about government spending.

It shows the proportion of gross domestic product (GDP), the value of goods and services produced, spent on all educational institutions, including universities as well as schools - and it's for 2015 and not 2018.

image copyrightGetty Images
image captionHead teachers last week complained about funding shortages

What really might be unexpected is that it includes personal spending - and that means that all the billions paid by students on their tuition fees are part of this total.

The UK in this measure of spending as a proportion of GDP is in third place, behind Norway and New Zealand, and ahead of Colombia and Chile.

The OECD makes comparisons at a UK level, rather than the four separate education systems in England, Scotland, Wales and Northern Ireland.

And the figure for the UK is mostly driven by changes in England - with the high ranking reflecting that school budgets had mostly been protected between 2010 and 2015 - combined with the introduction of some of the world's highest tuition fees.

The high placing of Colombia and Chile in 2015 also reflects the relative costs of higher education.


Of course, the DfE's claim that the UK is the "third highest spender on education in the world" is not incorrect.

It does not anywhere explicitly say it is about the government funding of schools that was under discussion.

image copyrightPA
image captionThe ONS is investigating whether the public cost of student finance should show up in the deficit

But would parents listening to arguments about school spending really expect this?

The DfE accepts that the third-highest spending claim includes tuition fees but says the statement remains "accurate".

A spokesman points to other OECD figures, also for 2015, showing the UK has above-average spending on primary and secondary schools.

But Jules White, the head teacher who organised last week's protest on funding, said the use of "erroneous figures" was "both shocking and disturbing".

He said there was independent evidence to show schools were struggling with cuts - but he accused the Department for Education of using "partial and distorted information".

But Geoff Barton, leader of the ASCL head teachers' union, said: "It is disingenuous if the government is conflating school and university funding.

"Instead of mounting increasingly spurious attempts to undermine the evidence, the government should focus on providing schools and colleges with the investment they so clearly need."

Adding to deficit

But there is another twist in the tail from this - which could see billions being added to the chancellor's deficit figures.

While ministers and head teachers are arguing over school funding, there is a separate debate about measuring the real cost of the student finance system.

The review of tuition fees in England, commissioned by the prime minister, is currently having to wait until a decision is reached on how to classify student fees in the public accounts.

image copyrightGetty Images
image captionSchools have been warning of funding shortages

The Office for National Statistics is investigating whether the money lent to students every year for tuition fees - much of which will never be repaid - should appear as a cost in the public finances.

Last year, the ONS said £17bn was lent to students, with about £3bn received in repayments.

Two parliamentary committees have heavily criticised the way the cost of student finance is invisible in terms of public spending.

They have suggested that the borrowing and lending associated with tuition fees should show up in the national balance sheet, with accusations that the current system is a "fiscal illusion".

But the Department for Education seems to have pre-empted this - wrapping tuition fees into its definition of education spending.

Has it inadvertently signalled to the ONS that it agrees that lending for fees should be counted alongside public spending?

The chancellor might be surprised at such an intervention that could add billions to the deficit.

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