Are spending cuts to blame for the schools concrete crisis?

When the public finances are in a tight spot, the axe often falls first on capital spending. This is government spending on buildings and facilities, not on, for example, wages and day-to-day services.

The political rationale is that it takes time, often years, to see the material impact of a squeeze on capital spending. It kicks cans down the road. But are capital spending cuts in education during the austerity years to blame for the current schools concrete crisis?

What is clear is that, overall, investment spending of all kinds has been squeezed over the last decade. Under the last Labour government, capital spending as a proportion of the size of the economy, or GDP, rose from 0.3% in 1997 to 3% in 2010. Since then, however, it has fallen back to an average of 2% where it is set to remain.

This issue is being made worse by inflation - the rate at which prices rise - which has soared and remains stubbornly high. The chancellor said on Sunday that "one of his first decisions" while he was trying to shore up the public finances last year was to protect cash spending on capital, in other words maintain it at current levels.

But accounting for inflation, it means significant real-terms cuts are coming. Indeed the Treasury's own documents forecast an average cut from departmental capital budgets of about £10bn from 2025-2028.

For schools the situation is even tougher, because since 2010 education has received a lower proportion of capital spending as money is directed elsewhere.

In 2005, for example, one in every eight pounds of capital expenditure went on education. Over the past three years it has been one in every £20. The inflation-adjusted education capital budget fell by 50% from its peak between 2010 and 2022.

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The Conservatives inherited just under £10bn a year in education capital sending in 2010, and have spent £5-6bn a year since then, in real terms. Part of those savings came from scrapping the Building Schools for the Future (BSF) project in 2010, which aimed to rebuild and refurbish every secondary school in England.

In the 2010 Spending Review, which set out the government's priorities, 60% cuts to education capital spending were very clearly signalled. Indeed, this planned £4bn fall in education spending was the biggest single departmental contributor to the Coalition's austerity savings in the overall capital budget from 2010 to 2015. That document claimed "the decision to end BSF will allow new capital to be focused on meeting demographic pressures and addressing maintenance needs".

What has actually happened since then, is that government capital spending has been focussed on hospitals, transport, energy and science, and away from schools and housing. Indeed over 20 years health will have roughly swapped places with education as home for one in eight pounds of investment. This is a tangible reflection of differing political priorities - "education, education, education" for the Blair-Brown Labour administrations, and reducing borrowing while protecting the NHS for the post-2010 Conservatives.

'Critical risk'

On the BBC's Today programme on Monday, former top education civil servant Jonathan Slater said the government cut the schools' repair budget in 2021 despite a warning of a "critical risk to life" from crumbling concrete. This was when Rishi Sunak was chancellor. In 2019, the Office of Government Property calculated that in order to bring the schools estate to best practice, partly because of the concrete issue, £7bn a year in funding was required.

Mr Slater also suggested that ministers preferred to spend money on opening shiny new schools with opportunities for photos in hard hats, than the more routine job of ensuring the existing stock of school buildings were up to date.

However, the prime minister said it was "utterly and completely wrong" to blame him for failing to fund the programme.

Nevertheless, decisions over how capital spending budgets should be allocated raise significant questions for the current government and whoever wins the next election.

At times, capital investment has been exempted from the government's rules on borrowing. Governments have said it is fine to borrow money to invest in the future. But in recent years, self-imposed limits on government debt levels have directly affected capital spending decisions for the long term.

Is health gobbling up the capital budget to the exclusion of neglected schools? How does Westminster prioritise the sometimes crumbling fabric of public services?

The design life of concrete systems in post-war schools was 30-40 years. There is now a pressing requirement to replace, presumably, all of it which this government or the next will have to meet. This post-dated cheque is coming due at a time when capital budgets are being squeezed again. But the problem cannot wait until after the general election.