DfE reports £337m cash underspend
Tuesday, July 24, 2018
The Department for Education underspent by more than £300m on its cash budget during 2017/18, its latest accounts show.
The DfE's annual report and accounts show that while the departmental expenditure limit (DEL) - used for public services and administration costs - was budgeted at £60.57bn, the department actually spent £60.23bn - an underspend of £337m.
The report reveals that the cash underspend is primarily the result of unused budget set aside to "cover volatility in demand-led programmes such as apprenticeships".
The DEL is set by central government in the Spending Review, with departments not allowed to exceed the amount they have been set.
The accounts show that there was also a non-cash DEL underspend of £5.19bn. the report states that this represents budget cover set aside for the volatility of the student loan book and the risk that payments will not be collected.
The cash underspend comes despite the annual report highlighting the fear that financial pressure on local authorities could potentially result in "widespread children's services failure" - one of a number of "key risks" set out in the document.
"There is a risk that increasing demands, financial pressure, ambitious reforms and pace, coupled with insufficient capacity and capability within sector and/or group could increase the likelihood of widespread [local authority] children's services failure."
"A new improvement programme is in place to avert failure/improve at risk [local authorities]."
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Earlier this month Association of Directors of Children's Services president Stuart Gallimore warned there was "no fat left to trim" in children's services due to a decade of government austerity measures combined with increasing demand. The Local Government Association has previously warned that annual spending by councils on children's services will increase by £2bn by 2020.
But children's minister Nadhim Zahawi has said that providing more money to councils will not help to reduce record numbers of children being taken into care.
The annual report sets out that the DfE has committed £20m to work with the sector to build a self-improving system for children's services, that identifies where challenges are emerging and puts the right support in place.
This includes the expansion of the Partners in Practice programme to create more peer support for councils.
The DfE said it has also begun developing Regional Improvement Alliances to better identify those authorities at risk of failing, and those with the capacity to improve. By the end of March 2018 three pilot regions - the West Midlands, East Midlands and East of England - have been established.