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Seòmar agus comataidhean

Education, Children and Young People Committee

Pre Budget Scrutiny letter

Letter to the Cabinet Secretary for Education and Skills

Dear Cabinet Secretary,
Pre-Budget Scrutiny 2022-23

I am writing to you on behalf of the Members of the Education, Children and Young People Committee setting out the views of the Committee in advance of the Scottish Government budget 2022-23.

As I know you will appreciate it is early in the new parliamentary session.  Nevertheless, the Committee has heard a range of budget-related evidence during the initial evidence sessions we have held to date.  In particular, I want to highlight evidence the Committee took from the Auditor-General for Scotland and the Accounts Commission which informs much of the content of this letter.  The Official Report of this meeting can be accessed at— Official Report - Parliamentary Business : Scottish Parliament

It is clear that the pandemic has had a particularly significant impact upon children and young people.  The learning, wellbeing and economic circumstances of children and young people, in particular those who are living in the most challenging circumstances, have been significantly affected by Covid-19.  As a result, the Committee considers that addressing inequalities needs to be at the heart of the response to Covid-19 within your portfolio.

The Committee recognises the measures that you have recently announced to help Scotland’s education system to recover from the COVID-19 pandemic.  However, we consider that the scale of the impact of the educational challenge resulting from the pandemic is not fully known at this stage.  The Committee would therefore welcome information on what work the Scottish Government is undertaking to assess the educational impact of the pandemic upon children and young people and the financial implications of addressing that impact.  The Committee considers that without such an assessment it is challenging to quantify the contribution the Scottish Government budget will make to addressing the undoubted impact that Covid-19 has had on education.

The Committee notes that the Cabinet Secretary for Finance and the Economy has confirmed plans to publish a multi-year resource spending review framework for consultation alongside the Scottish Government budget 2022-23.  The Committee further notes that the UK Government has not set multi-year budgets since 2005, until last month’s UK budget, and that this can be a constraint upon the ability of the Scottish Government to do likewise. The Committee recognises that the provision of multi-year budgets has been a long-standing request from across the public sector, including education stakeholders.  Post-pandemic, multi-year budgets will assist stakeholders to plan for recovery more effectively.  Accordingly, the Committee considers that the provision of multi-year budgets, dealing with both capital and resource allocations, should be prioritised.

The extent to which there is a ‘clear line of sight’ from spending decisions through to outcomes has been a regular feature of debate with regard to budget scrutiny since the publication of the Christie Commission report in 2011.  That this remains an issue across the Scottish public sector, including with regard to education expenditure by the Scottish Government, was emphasised by the Auditor-General for Scotland in his evidence to the Committee.  The Committee considers that there continues to be a need for a clearer linkage from expenditure to outcomes including the provision of measurable ‘milestones’ to enable scrutiny and monitoring of the progress towards outcomes.  The Committee notes the commitments to monitoring and evaluation contained in the Scottish Government education recovery plan.  The Committee notes the commitment in the education recovery plan to update Parliament on progress being made to update the robustness of data being collected in response to a Audit Scotland recommendation.  The Committee requests an update on the progress that is being made on this issue.

The lack of a clear linkage between expenditure and outcomes on policy interventions on attainment was specifically highlighted, in evidence to the Committee, by the Auditor General.  He observed that—

“with regard to public spending on PEF and the attainment challenge, it was just not clear enough what was being achieved. The outcomes were felt to be too anecdotal, with the reliance on surveys and the perspectives of headteachers. I am not challenging those views—I am sure that that is the reality of their situation—but given that we are now allocating a further £1 billion of public spending we need more robust data on what is actually being achieved”.

The Committee acknowledges the role of the Pupil Equity Fund (PEF) can make and considers that the impact of the fund needs to be demonstrated through more robust data.  The Committee notes that the Pupil Equity Fund (PEF) provides autonomy to headteachers on the use of the fund.  However, the Committee does not consider that this precludes an evaluation framework being put in place in order to allow an assessment to be made of spend on and of any outcomes that follow from that expenditure.  The Committee requests information on what framework you intend to put in place to allow for effective scrutiny of spend and of intended outcomes of attainment funding expenditure given that the Scottish Government intends to allocate £1 billion to addressing the attainment gap and support education recovery.

Critical to the effective monitoring of outcomes is the adequacy of the data that underpins the outcomes.  The Committee recognises that there is a wealth of data with regard to attainment.  As highlighted by the OECD and the Auditor-General for Scotland, there is currently a lack of quality data relating to other aspects of the Curriculum for Excellence.  The Committee notes that the Scottish Government has plans for a health and well-being census with initial results potentially due around the end 2022.  The Committee requests an update on your plans to improve the quality of data to cover all aspects of the Curriculum for Excellence.  The Committee recognises that this data may be derived from a number of sources and may be potentially qualitative as well as quantitative.  The Committee would welcome information on any data that may be sourced through the involvement of pupils, parents and teachers.

In a written submission to the Committee, Audit Scotland commented with regard to budget allocations for primary and secondary school education that—

The Scottish Government set this up in 2015/16 to close the poverty related attainment gap. When this is excluded, real-terms spending by councils increased by 0.7 per cent during the period, to just over £4.1 billion. When it is included, spending increased by 5.1 per cent in real terms, from £4.1 billion to £4.3 billion”.

The Committee considers it imperative that this trend continues and that the Scottish Government continues, in its allocations within the 2022-23 budget, to enable and work with local government to maintain real terms increases in investment for primary and secondary school education.

The Committee has considered the issue of the adequacy of the evidence base which assesses the extent of rural deprivation.  The Committee recognises that rural deprivation can often be located in pockets of deprivation within otherwise more affluent areas.  The Committee would welcome your view of the adequacy of current indicators to measure rural deprivation which underpin allocation of funding.  The Committee recommends that this is an issue which you could explore further through dialogue with COSLA.

It is not possible to discern from the work carried out by the Auditor General or Account Commission that the additional costs of provision of education services in rural parts of the country, in schools, colleges and universities, which arise because of rurality are sufficiently provided for.  The Committee notes that the funding formula seeks to account for these costs so far as local authority funding is concerned.  However, there appears to be no direct evidence that these extra costs, for example more buildings to maintain and more staff to employ, additional transport costs through longer journeys, have, in the current allocations of public funding, been fairly or sufficiently provided for.  That may be the case but without any clear evidence base it is not possible at present to tell.  Moreover, this is not an area that the Auditor General or Accounts Commission have covered in their work.

The Committee therefore encourages the Scottish Government to work with the Auditor General for Scotland and the Accounts Commission to ensure that the impact of issues of rurality upon actual financial costs are explicitly considered in future.  The Committee recommends that that this work is done in conjunction with education providers and stakeholders in rural or largely rural areas.

The Committee notes the Scottish Funding Council’s (SFC) review of the provision and sustainability of tertiary education and that the Scottish Government response accepts the majority of the recommendations made in that review.  The Committee welcomes that, as part of that response to the SFC review, the Scottish Government signalled that multiyear financial settlements would be consulted on and potentially rolled out. The Committee considers that the provision of multi-year settlements will provide colleges with better opportunities to plan the delivery of their services.  Accordingly, the Committee considers this recommendation should be implemented promptly and requests further information on the plans and timescale for consultation.

Audit Scotland summarised the current financial position of the colleges sector in the following terms—

“the gap between the sector's total income and expenditure is widening, and was £54 million in academic year 2019-20. This is forecast to continue because of costs that are beyond colleges’ direct control, such as pensions and depreciation of assets. After stripping out these costs, the sector’s underlying financial position (adjusted operating position) was a surplus of £3.8 million in 2019-20.  This was around £9 million lower than the previous year”

The Committee notes that the Scottish Government has allocated small real-terms increases in funding to the colleges sector in recent years.  The Committee is also aware that two of the biggest financial challenges facing the sector are increases in employer contributions to pension schemes and additional staff costs arising from both cost of living pay awards and the outcome of National Bargaining.  The Committee recognises that the implementation of the SFC review will result in significant structural change within the sector.  The Committee is concerned that any such structural change must not endanger community-based college provision.  In this regard, the Committee recognises the validity of the Auditor General’s view “that structural change must be clear in its purpose to improve outcomes for people who use and rely on public services”.  The Committee would welcome your view on this issue.

Yours sincerely

Stephen Kerr MSP