Schools set to lose £400,000 a year as South Tyneside hit by Autumn Statement

South Shields MP Emma Lewell-Buck.
South Shields MP Emma Lewell-Buck.

Changes to the way the Government funds schools could cost South Tyneside almost £400,000 a year, the region’s education network has warned.

Chancellor George Osborne announced in his Autumn Statement that a National Funding Formula for schools will replace the current Dedicated School Grants payment system, which determines how much schools receive per pupil.

Stephen Hepburn

Stephen Hepburn

SCHOOLS NorthEast says most of the region’s local authority areas would be better off under the changes – but South Tyneside, which currently receives more than the national average per pupil, could lose out.

Funding all school pupil places in the region at current national levels would see the borough lose £18 a pupil, the equivalent of £379,224 in total.

Director Mike Parker said: “The current schools funding formula is broken. If North East schools were funded at the same level as London schools we would have an additional £360million a year to spend on education.”

South Tyneside Council’s lead member for resources and innovation, Coun Ed Malcolm, said local government bore the brunt of the Chancellor’s drive to slash public spending.

Councillor Ed Malcolm,

Councillor Ed Malcolm,

He said: “Today has simply confirmed that that is set to continue. Announcements made today around housing, welfare, devolution and local government finance are all intrinsically linked to the quality of life for our residents, and in particular the most vulnerable.

“While the apparent U-Turn on cuts to Tax Credits is a victory for the public, Lords and the Labour Party who campaigned against this, I’m afraid the poorest in our community will still be hit by Universal Credit and changes it brings.”

He added: “A 2% council tax increase ring fenced to adult social care is welcomed but is not nearly enough, given the huge demands upon the service.

“We await further detail on the consultation on retention of business rates and the impact upon our overall funding.

“I want to reassure everyone that as a council we will continue to do all we can to protect the most vulnerable in our society whilst continuing our ambitions to create jobs and opportunities for the people of South Tyneside.”

Jarrow MP Stephen Hepburn welcomed the Chancellor’s climbdown on controversial Tax Credit cuts, but said the decision to axe the benefits had been a mistake all along.

He said: “George Osborne is trumpeting scrapping his callous tax credit cuts altogether, but the fact is he should never have proposed these ridiculous cuts in the first place.”

His South Shields colleague Emma Lewell-Buck said the Chancellor had produced a ‘smoke and mirrors exercise’ in which he gave with one hand and took with the other.

South Tyneside is set to benefit from a new North East Enterprise Zone announced yesterday.

Mr Osborne confirmed the North East Local Enterprise Partnership (LEP)’s bid for a second Enterprise Zone (EZ) has been successful.

Like the existing EZ, the new one will be divided between several site across the North East, including Durham, Sunderland, Gateshead and South Tyneside.

Helen Golightly, North East LEP Chief Operating Officer, said: “Enterprise Zones provide us with a strong offer to business to locate and develop in the North East.”