Spending Review and Autumn 2015 Statement analysis

16 December 2015

On 25 November George Osborne, the Chancellor of the Exchequer, announced the details of the Spending Review which sets out the government’s budget for 2015 to 2020. 

You can watch the full speech and download the documents and below we unpick what we know so far.

Arts and Culture

Headline: Standstill funding for the arts and culture.

Osborne opened his section of the speech on the arts by saying:

One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport. £1 billion a year in grants adds a quarter of a trillion pounds to our economy – not a bad return. So deep cuts in the small budget of the Department of Culture, Media and Sport are a false economy.

DCMS funding will be maintained at the same level in cash terms until 2020. Free museum entry to national museums was protected in the review. Arts Council England will receive a small cash increase of £10 million per year up to 2020:

This settlement enables Arts Council to continue investing in our 663 national portfolio arts organisations and our 21 Major Partner Museums at current levels until 2018. In addition the settlement allows for growth resulting from new and previously announced Government commitments to arts and culture. 

The spending round result for culture is an extraordinary one and everyone who got involved in Arts4Britian, created an infographic, joined the thunderclap, wrote to their local politicians, met their MP or engaged their audiences and participants, drafted or contributed to a submission to the Treasury, all contributed to this result.

The rest of the picture is complex and unclear.

Local authorities

Headline: Funding will be cut by a further 24%. Councils can raise Council Tax by 2%.

Local Authority (LA) funding is relied on by communities and cultural organisations. The further, deep cuts to local authorities will mean there is a real danger that some councils will now struggle to balance their budgets, and will face very difficult decisions about which non-statutory services – which include parks, libraries, leisure centres, and culture – they will have to lose.

The Local Government Association (LGA) in its analysis of the Spending Review states:

Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020.

The LGA did recognise the flexibility to increase revenue from Council Tax, but of course this will only be significant for councils that have sufficient numbers of households who contribute to this tax.

It is hard to see what the long-term reality will look like because there are huge changes elsewhere: LAs will no longer be responsible for schools, and the devolution agenda will change the way they operate.

You can read the full LGA briefing about the Spending Review.



Headline: Core schools budget protected but less money per pupil. A new national funding formula to be introduced.

The core school budget will be protected in real terms enabling the per pupil rate for the Dedicated Schools Grant to be protected in cash terms. Pupil premium will be protected at the current rate. Education funding will increase in cash terms from £60 billion in 2015-16 to £65 billion in 2020.

However, schools are likely to have less money due to rising pupil numbers and the need to find new support for the most vulnerable pupils now that LAs will not be providing it. Sam Freeman of Teach First in his blog estimates this to be a 7-8% cut in funding, and in their on-the-day response the Association of School and College Leaders (ASCL) also highlighted that:

Schools and colleges face substantial real-terms cuts despite the spending commitments made today. This is because they have to meet the extra costs of increased employer pension and National Insurance contributions without additional funding. This amounts to a five per cent extra cost this year.

A new national funding formula will be introduced for schools, with a consultation on the formula to be launched in 2016. The new formula will be introduced 2017/18.

£23 billion will be invested in school buildings to create 500 more free schools, 600,000 more places and to rebuild more than 500 schools.

£1.3 billion for teacher training recruitment was also announced, with a focus on new teachers, particularly in STEM and English Baccalaureate subjects. See Sam Freeman’s comment below:

Osborne also said:

The Spending Review and Autumn Statement represents the next step towards the government’s goal of ending local authorities’ role in running schools and all schools becoming an academy.

He announced a cut of £600 million to the Education Services Grant (ESG) which funds education support services. This will affect both LAs and academies who received their proportion of the ESG direct from government.  The government will also reduce the number of statutory duties which LAs currently are required to fulfil in regard to schools. These will be consulted on in 2016.


Skills & HE

Headline: New apprenticeship levy for businesses. New National College for Creative and Cultural.

A new apprenticeship levy of 0.5% of an employer’s wage bill will be introduced in April 2017. Only employers with a paybill in excess of £3 million will pay the levy. You can read more about the impact of the apprenticeship levy on the creative industries on the CCSkills blog.

Cuts to the Department of Business Innovation and Skills adult skills budget, and some of the changes to higher education and student funding, will have an impact on participation and access to culture by students and adults – but, unexpectedly, further education funding was protected.

Five new National Colleges will be established which will train an estimated 21,000 students by 2020 – this includes a National College for Creative and Cultural.