By james art The chancellor said children “shouldn’t have to suffer for” the dire state of the UK’s public finances, even as the Labor government must plug what it described as a £22 billion “black hole” of overspending.
But economists warned that most of the funding announced on Sunday would only be enough to sustain existing initiatives.
The Treasury said the £1.4bn would “ensure delivery” of the school regeneration programme, which was announced in 2020 and aims to restore or refurbish around 500 schools over a decade.
The scheme aims to deliver construction projects at a rate of around 50 a year, but the government last year predicted it would complete fewer projects than originally planned, according to the Audit Office.
The £1.4bn is believed to be an increase of £550m on last year in support of the programme.
The Treasury has also confirmed that £1.8bn will be made available to expand government-funded childcare, with a further £15m of capital funding for school nurseries.
Primary schools can now apply for up to £150,000 of the £15 million, with the first stage of the plan expected to support up to 300 new or expanded nurseries in England, it said.
Ms Reeves also said she would triple investment in free breakfast clubs to £30m in 2025-26 after announcing at the Labor Party conference a £7m trial in up to 750 schools start in April next year.
Labour’s manifesto has committed to spending £315m on breakfast clubs by 2028-29.
A further £44m has been announced to support kinship and foster parents, which will include piloting new kinship support in up to 10 local authorities to test whether offering financial support can increase the number of children taken into foster care and the friends.
Meanwhile, around £16m is to be allocated to improving HM Revenue and Customs’ work to tackle tax evasion, which the government estimates will raise an extra £6.5bn a year for public services, as reported by the Mirror.
The measures will include upgrading the office’s app to allow people to make voluntary self-assessment installment payments and a drive to increase the response rate to phone calls to the department, the newspaper reported.
Ms Reeves also called on government departments to make efficiency savings of 2% – freeing up “billions” of pounds to be reinvested on the front line, according to the Sunday Times.
The chancellor said: “This government’s first budget will set out how we are going to fix the foundations of the country. It will mean tough decisions but also the start of a new chapter for Britain, by growing our economy by investing in our future to rebuild our schools, hospitals and broken roads.
“Protecting education funding was one of the things I wanted to do first because our children are the future of this country. We may have inherited a mess, but they don’t have to suffer for it.
Education Secretary Bridget Phillipson said the funding would help “bring education back to the forefront of national life”.
“This is a budget to fix the foundations of the country, so there can be no better place to start than with the life chances of our children and young people,” she said.
“Our legacy may be terrible, but I will never accept that any child should learn in a crumbling classroom.”
However, Institute for Fiscal Studies researcher Christine Farquharson said that “in a tight fiscal context” the commitments “largely reflect decisions to continue programmes”.
She told the PA news agency: “Investing £1.4bn into the school regeneration program next year will be enough to see what was always intended as a 10-year program go into its sixth year .
“The £1.8 billion to introduce new childcare rights similarly confirms the plans set in place under the previous government.
“Increasing the Breakfast Club budget to £30m does appear to be a boost to the previously announced £7m – but that’s still only a tenth of what Labour’s manifesto plans to spend up to 2028-29, so most of the implementation is yet to come.”
Unions warned the funding announcement left a shortfall in what was needed to rebuild the school estate and called on the Government to increase investment in next year’s spending review.
Association of School and College Heads general secretary Pepe Di’Iasio welcomed the extra £550m but said it was “quite modest” against the backdrop of the challenge and described the target of rebuilding 50 schools a year as “horribly unambitious”.
National Education Union chief Daniel Kebede said the money was a “first step but more is needed”, while NAHT general secretary Paul Wightman called on ministers to commit to a “major” recovery program next year.
“There remains a significant shortfall in terms of what is required to restore the school estate to a satisfactory condition,” he said.
The announcement comes after more than 100 schools, nurseries and colleges in England were forced to close days before the autumn term last year due to concerns that classrooms and other buildings containing autoclaved reinforced concrete (Raac) were unsafe.
Mrs Reeves will use her first Budget as chancellor next week to announce a change to the UK’s debt rule that will open the door for the government to spend billions more on long-term infrastructure, such as replacing dilapidated buildings in public housing estates sector.
It is expected to move to public sector net financial liabilities (PSNFL) as its new measure of debt, rather than the current benchmark of core public sector net debt.
The move to the PSNFL will give it more leeway to meet its debt reduction goal because it includes a broader mix of government assets and liabilities — specifically including expected student loan repayments to offset some of the debt.
If the PSNFL had been used as a metric in the March 2024 budget, the “capability” – the margin by which the fiscal rule is met – would have increased by £53bn, according to the Institute for Fiscal Studies.
It is also expected to raise employer national insurance by up to two percentage points and lower the income threshold at which employers pay contributions – measures that would raise around £20bn in total.
Capital gains tax, inheritance tax and fuel tax are among some of the other levers Ms Reeves could potentially use to raise revenue as she seeks to put the economy on a sounder footing.
The chancellor will not face broadcasters for pre-Budget interviews this Sunday, saving his appearances for next weekend when he will answer questions about its content.
But in an interview with the Observer, she said she wanted the statement to match the greatest moments in Labour’s economic history.
“In 1945 we rebuilt after the war; in 1964, we recovered with the “white heat of technology”; and in 1997 we restored our public services. We have to do all this now,” she said.
A Conservative Party spokesman said: “In government, the Conservatives have had a relentless focus on giving every child the best start in life.
“We launched the biggest ever expansion of childcare, hired 27,000 teachers and raised school standards.
“On the other hand, Labor is breaking its promises to the public.
“Just like their broken promises to raise taxes and flout fiscal rules, they’ve broken their promises to students—implementing a new education tax and plotting to cancel dozens of new school projects.”