In a session with the education and skills select committee in Westminster last Monday, Charles Clarke said the DfES had underspent by 'about 1.1bn' in the past year, though the total figure would be 'announced later this year'.
He said, 'In terms of dealing with a significant part of it, we committed an extra 450m for education and skills and an extra 436m for Sure Start activity. That which was announced with the departmental report dealt with 886m of the underspend, which was the case at that time.'
Mr Clarke pointed out that Government budgets are managed 'on a multi-year basis' and that 'the resource is committed'. He gave as an example the Learning and Skills Council, which he said was 'carrying forward 100m end-of-year funding into 2003/04 to cover previous commitments given to the employer training pilots', and added, 'That takes us up towards 1bn altogether.'
But Jonathan Shaw, Labour MP for Chatham and Aylesford, described the Pounds 1bn underspend as 'very worrying'. He said, 'You are telling us on the one hand that, yes, you acknowledge the crisis in schools' funding, and on the other hand you have underspent a billion, so you have had to scrabble around trying to find areas to spend the money.'
Mr Shaw asked the education secretary if he was in control, to which Mr Clarke replied, 'We are in control and it is precisely because we are controlling the money that I was able to make the decisions which I announced earlier, which were made much earlier when we appreciated what the situation was.'
Mr Clarke added that he believed that by 'taking decisions as early as we have, we are minimising the negative impacts of the underspend that there have been'.
Mr Clarke also said there needed to be 'substantial reform' of how public spending was managed, 'because unfortunately what I have just described is not limited only to my department. It also extends to other departments'.
He admitted to David Chaytor, Labour MP for Bury North, that there was 'a great deal wrong' with the financial planning of the DfES 'because we are so tied up with the local government finance system as a whole, with its very late settlement of amounts of resource'.
