Committee for Education OFFICIAL REPORT (Hansard) School Budgets and Contingency Plans: Mr Peter Weir MLA (Minister of Education) and Department of Education Officials 25 January 2017 NORTHERN IRELAND ASSEMBLY Committee for Education School Budgets and Contingency Plans: Mr Peter Weir MLA (Minister of Education) and Department of Education Officials 25 January 2017 Members present for all or part of the proceedings: Mr Chris Lyttle (Deputy Chairperson) Mrs Rosemary Barton Ms Carla Lockhart Mr Phillip Logan Mr Colin McGrath Lord Morrow Mrs Sandra Overend Witnesses: Mr Weir Minister of Education Mr Gary Fair Department of Education Ms Julie Thompson Department of Education The Deputy Chairperson (Mr Lyttle): Minister, you are very welcome. We invited the Education Authority (EA) to attend, given the wide range of issues that we want to address. In fairness to you, many of those have no small degree of relevance to the Education Authority (EA) as well. In a two- sentence letter, they have kindly stated that they understand that the Minister will be able to answer all our questions. Mr Weir (The Minister of Education): I am glad that the Education Authority has built up such faith in me. The Deputy Chairperson (Mr Lyttle): There you are. Light-heartedness aside, it is extremely regrettable that the Education Authority did not accept our invitation. A number of extremely serious issues pertain to the Education Authority, and, if members are content, I will make that regret known to it in the strongest possible terms. We will move on. Minister, can I check your timings for today? Mr Weir: I cannot really go beyond 10.45 am. The Deputy Chairperson (Mr Lyttle): OK, we will proceed promptly then. Mr Weir: Sorry, 11.45 am. The Deputy Chairperson (Mr Lyttle): No problem. Minister, thanks very much indeed — 1 Mr Weir: I know that we are sometimes accused of living in the past, but that might be slightly — The Deputy Chairperson (Mr Lyttle): No problem. I also welcome Gary Fair, the director of finance in the Department of Education (DE) and Julie Thompson, a deputy secretary in the Department of Education. Members, the Committee appreciates the Minister taking the time to be here. I do not intend to make extensive commentary on political matters, and I hope that members will use the session to ask questions to gain clarity on issues affecting schools and stakeholders. Minister, do you want to make any short opening comments? Mr Weir: Not to any great extent. I just thank the Committee for inviting me, and I will be happy to take whatever questions members have. We are living with a certain level of uncertainty, and I want to be as accurate and as open and transparent as possible. On that basis, I will try to answer anything. My officials are here, and, as we delve into finance issues, they can help with certain technical aspects. I want to provide as much assurance to people as possible, but, by the same token, I do not want to give any false or misleading information. I am also conscious of the fact that, particularly in a period of uncertainty — that applies whether it is education or other areas — there is a risk that 50 rumours could be floating about, either through genuine concerns or a bit of scaremongering — I am not accusing anybody in the room of that. It is important, given the sensitivities of some of the issues, particularly for our schools, that no one creates a false prospectus. Beyond that, I am happy to give answers. The Deputy Chairperson (Mr Lyttle): OK. We will start with school budgets. Over Christmas, there were media reports about on-the-record exchanges in the Assembly on school budgets. There were reports that the Education Authority had rejected all school budget spending plans for next year and, indeed, that school budgets would face a deficit of £33 million by March this year. Is that accurate, and, if so, what is being done to address that deficit? Mr Weir: The school budgets situation is complex. I will try to be precise about this. People may not see that there is an enormous distinction, but I think that it is significant. It is not accurate to say that the Education Authority has "rejected" the budgets: it has not approved the budgets. Those are two separate things. It has not approved the budgets because, even if we were not having the election, with the impact that that will have on the budgets, they would be a movable feast. Money was to be injected in-year into school budgets, but the wider position for 2017-18 was going to be dependent on what the overall budgetary situation was. There would have been no point in signing off on budgets at that stage when the position would have moved in a month or so had we simply got an overall budget. There should be a note of caution on the overall position as regards deficits, although the general direction of travel is correct. When it comes to school budgets, a number of schools are in surplus while others are in deficit. Given the broader financial situation in education and in schools, the position is that some schools in deficit are, generally speaking, moving into bigger deficits and, for the most part, the schools that are in surplus are moving into decreasing levels of surplus. The projected budget figures have always been a prediction of where schools will find themselves. In the past, the problem has been that what was predicted was often very wide of the mark. Sometimes you would expect a drop in deficits, and sometimes you would expect increases. I appreciate that I am going into some detail, but it is important that people understand it. The actual behaviour of schools has not necessarily matched the predicted behaviour. Effectively, if you have over 1,000 schools in the system faced with not dissimilar circumstances, they will react differently in exactly the same circumstances. One school may take the view that things are not that bad this year, so it will make reasonable cuts because it believes that there will be a rainy day over the horizon. Other schools will say that they are in financial difficulties and that they will keep on spending. Those are the reactions. Effectively, it is an aggregation of the situation. I should say that the goalposts will have shifted a little because the prediction of £33 million in deficits, for instance, would have been the position, effectively, at the start of the year in terms of predicted budgets going into 2016-17. That would not take into account, for instance, the £14 million that was reallocated directly to schools. I appreciate that teachers' pay is a controversial subject. While there has been a lot of focus on the 2015-16 position, the impact of there not being a 1% uplift is that the baselines of the cost to schools 2 have reduced as well, which would also have an impact on the deficit situation. I will give members an idea of the overall global picture. If you compare the situation in 2015-16 and project three years ahead, you will see that, for schools to remain without making any changes, if you assume wage rises and the National Insurance changes in particular, which are really hitting schools hard, over a three- year period you would need roughly £240 million extra to stand still — without any changes. Now, injecting money in-year will start to alter matters. Any alterations, as happened with pay, will have an impact. I have indicated that what I wanted to see in the budget — this will be important for the marginal cost — is a reasonable additional amount injected into education, and I think that it would principally be directed at the schools situation. Other factors are moving ahead as part of that that would then have an impact. If Investing in the Teaching Workforce rolls forward, that will have an impact on budgets as well. There is no doubt that we are in a difficult situation, and a considerable amount of additional money coming into the schools budget directly is needed. I appreciate that that is a reasonably lengthy answer. Put it this way: some of the stuff is not a million miles off the mark, but it is not just as clear-cut as that. The Deputy Chairperson (Mr Lyttle): OK. It is almost February 2017, and it is accurate to say that no school in Northern Ireland has had its budget for 2017-18 approved and that there is a projected deficit of at least £33 million as of March 2017. Mr Weir: I am not sure that £33 million is accurate. That was a previous figure. Mr Gary Fair (Department of Education): It is likely to be less than that. The Deputy Chairperson (Mr Lyttle): What is it likely to be? Mr Fair: The Education Authority is looking at all the data, so I cannot quote a figure at this stage. It is likely to be less. As I mentioned last week, that is one of the issues with the forecast surplus position as well. What has come through as a forecast has not always materialised. It is a complex area, and the Education Authority is looking at the detail. Mr Weir: You are depending not just on the wider context but on schools meeting that and taking the same decisions. What you will see at times is that schools take contradictory decisions in the same circumstances or move in different directions.