Spending review 2010

Author: Cyril Richert

I won’t comment on the full government’s spending review as a lot of people will do better than me.

In a nutshell key points are:

  • About 490,000 public sector jobs likely to be lost
  • Average 19% four-year cut in departmental budgets
  • Structural deficit to be eliminated by 2015
  • £7bn in additional welfare budget cuts
  • Police funding cut by 4% a year
  • Retirement age to rise from 65 to 66 by 2020
  • English schools budget protected; £2bn extra for social care
  • NHS budget in England to rise every year until 2015
  • Regulated rail fares to rise 3% above inflation
  • Bank levy to be made permanent

You will find more analysis on the BBC website (with Q&A). And you can even read the full Spending Review 2010 document HERE.

I will highlight two points that are particularly important for Clapham Junction.

Schools

The Treasury has said the schools budget will go up by 0.1% in real terms each year. This is a rise of £3.6bn in cash terms, but means less than £200m on top of inflation by 2015. Part of the savings from the welfare budget will help fund the increase, but schools will still be expected to make £1bn of “procurement and back office” savings, and teachers will face a pay freeze.

What does that mean specifically for Clapham Junction area

We reported in past articles about the proposal by ARK Academies with the Neighbourhood Schools Campaign (NSC) to establish a Free School on the Bolingbroke Hospital site. There is currently uncertainty about the availability of the site as St George’s Trust has put forward a plan to transform the Bolingbroke buildings into high standard residential, in order to maximise the value of the site. This act as a Plan B as they need the sale to be completed within the financial year (31 March 2011) to raise money to enhance services in St Georges Hospital (Tooting). Although they acknowledge discussions with Wandsworth Council, Partnership for Schools and the NSC over the issue of a secondary school on the site, they claim that no financial offer has been confirmed to buy the site.

This statement was indeed confirmed by the Director of Finance before the Education Committee in September 2010 as he said that any Priority Purchase by the Council would need to be met from government grant which is currently unconfirmed.

Therefore the government’s spending review on the 20th October was cautiously expected.

On page 43 of the Spending Review document (Reform – 2.7) it says:

Parents, teachers and community groups will be supported to establish Free Schools outside of local authority control to improve standards for all children, regardless of their background. In addition, teachers will be given greater freedom from bureaucratic burdens to use their professional judgement to meet the needs of their pupils. Head teachers will have increased flexibility over their budgets, including through simpler, fairer and more transparent funding streams.”

The Free School measure being a key part of the government policy (in June 2010 the government announced that a capital fund of £50m has been earmarked to assist in opening some new free schools for September 2011) it is difficult to envisage that they could deny the support needed for one of the most advanced free school dossier in the country (Michael Gove met twice with the campaign group prior to the election and at least once since becoming  Secretary of State for Education).

With the commitment to support this invitation to parent and teacher groups to establish new schools stressed in the Spending Review report it seems likely that further elements (including funding for Wandsworth) could be unveiled before the end of the year.

Transport

The Government said to be prioritising economic infrastructure that supports growth such as investment in transport. Indeed spending on transport appears to have been protected, with £30bn set to be invested in new transport projects over the next four years (although many rail passengers will see a rise in ticket prices).

On page 22 of the Spending Review document it says:

In 2014-15, transport capital investment will be higher in real terms than 2005-06 levels. […] Over £14 billion will be provided for Network Rail, supporting maintenance and investment to continue to enhance the capacity and speed of services across the country.

Of course money will be allocated in priority to project already started and under-construction (Thameslink, Crossrail, Birmingham New Street, Farrington station…).

When we met with Office of Rail Regulation (ORR) last year we were focusing on the next budget periods for Network Rail, especially CP5 (2014-19). Although the funding for the period after 2014 has still to be decided, the new planning process for the government has already started:

  1. 2010: the industry should come with options (definition of projects and allocations).
  2. 2011: the government will examine a draft proposal.
  3. July 2012: the government will provide new specifications.
  4. 2013: ORR will review, analyse and check the funding for 2014-2019 (CP5).
  5. 2014: project implementation for CP5.

Therefore even for a project with an implementation starting in 8 years, discussions have to start NOW. As you keep in mind the amount of budget cut announced by the government, you will also remember their objective : the chancellor is aiming to cut the structural deficit to zero by 2015-16. And planning ahead being also a government task, they have the duty to develop plans for the future of Clapham Junction station, from now on.

The Clapham Junction Action Group is committed to work with residents, political parties, businesses and all stakeholders to provide ideas for the redevelopment of the station. You can participate here (click).

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