‘Education, education, education’ was a priority for the previous Labour government. Under Blair, spending neared record levels. Reaching almost £120 billion by 2010 – up from £70 billion in 1997, education spending constituted 5.4% of GDP, its highest since the mid-1970s. The ‘austerity’ programme imposed by the Tories lead to a sharp decline. Expressed as a proportion of GDP it had fallen below 3.9% by 2018-19. There was a small increase in 2019-20, but at the end of 2023, spending only equalled 4.2%.
Education spending has been growth dependent
Increased spending by the Blair governments from 1997 was enabled (as the chart shows) by relatively high rates of growth and the favourable economic circumstances it inherited from the previous Tory government. As a result, extra tax revenues were generated. All Labour post-war social reforms have relied on this. In otherwords increased education (indeed, social spending as a whole) has depended on growing the size of the cake rather than redistribution within it.
But unlike Blair, an incoming Labour government will inherit a flat-lining economy. Self-imposed fiscal rules and a refusal to raise taxes, will preclude increases in ‘current’ (day to day) spending, preventing Labour from improving teachers’ pay in real terms or reducing teacher-pupil ratios by enabling schools and colleges to recruit more staff. Its fiscal rules do allow Labour to ‘invest’ (e.g., build new schools/ re-equip current ones) but Starmer and Reeves make no commitment. New investment in education and across the public sector generally, would be restricted by a further rule decreeing that the proportion of National Debt to GDP must fall by the end of a Parliament. But as significant is Reeves endorsement of pre-Keynesian neo-liberal orthodoxy that considers running government to be no different to running a household – you should only spend what you’ve first earned.
Is education still a public good?
The UK is well down the OECD Tables when it comes to spending on education as a public service, but if private expenditure on education is included then only Norway, Chile, New Zealand and Israel have higher figures. This shows the particular significance of UK education as a ‘positional good’ – where those that can afford to, are able to improve their children’s individual chances of success. In otherwords, using their private resources to jump the queue. But this isn’t just about buying places at private schools, parents who employ tutors for their sons and daughters also do this, often in desperation and not something they can really afford.
Yet this is not to say that all public expenditure on education leads to greater economic and social wellbeing. If New Labour’s ‘standards agenda’ (setting up targets for all English schools in the 1990s), was criticised by many practitioners as costly and unnecessary, then its ‘choice and diversity’ programme (establishing specialist schools and then ‘academies’) was more widely condemned as divisive. Since then, under the auspices of Ofsted, millions (maybe billions?) have since been spent on highly dubious inspections. supposedly to give parents information about school performance.
But more contentious (and not adding any economic ‘value’, regardless of how this is measured) is the huge amount of time and resources schools and colleges commit to ‘teaching to test’ (coaching students through examinations, the equivalent to jumping through hoops rather than developing learning skills). With quotas on the numbers who can achieve top exam grades, then rather than a public good, education is increasingly a ‘zero-sum’ good – success for person can only be at the expense of another. Without other changes in economy and society, increased spending isn’t going to alter this.
Education, Economy and Society 