Paying for Universal Free School Meals

On the whole, the announcement that all children in England aged 7 and under will get a free school lunch is something to be welcomed. In fact I've just read an opinion piece by Jemima Lewis in the Telegraph, of all places, and pretty much agree with every word she wrote. It was quite disconcerting!

     

     Everyone benefits from free school meals

For those who are interested, the full report on the pilot studies in Durham and Newham is here.

I would, however, want to add one thing to what she said. Schemes which provide a universal benefit—rather than those in which eligibility for the benefit is determined according to the ability to pay—are some of the most useful tools available to government for redistributing wealth and alleviating the effects of poverty. It goes without saying that the benefit is paid for out of general taxation rather than being "free", but that is a good thing in so far as we have a progressive tax system in which the rich pay more tax than those on middle incomes, and those on middle incomes pay more tax than the poor.

This is why, for example, the idea put about by Tories in Wales that rich people shouldn't get free prescriptions, because they can afford to pay for them and would be prepared to pay a nominal sum for them to ease financial pressure on our NHS, is completely bogus. Of course rich people should pay more, but it is much better for them to do it through paying higher taxes rather than over the counter for each item.

The new universal FSM scheme in England is expected, according to this report, to cost some £600m a year, although I'm not sure whether this is the overall cost for all children, or just the additional cost for those who are not currently receiving FSMs. As some 20% currently claim FSMs, the overall cost might be in the order of £750m a year. But bringing the 80% who are not currently receiving FSMs into the scheme represents a very considerable extension of provision. In fact it would be a much greater extension than would be the case with free prescriptions, because the vast majority of prescriptions issued in England are already free.

And of course it would be even better if FSMs were extended to all primary school children rather than just the younger ones, and if they were extended to secondary school children as well.

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So in principle this is a great idea and should be supported, but in practice there is one major problem with what has been proposed. It would be fine if this £600m were to be raised by increasing taxation, but there are no plans to increase it. This means that the scheme can only be funded by yet more cuts to other public services, on top of the savage cuts that have already been imposed and which have yet to fully bite in any case.

It means that this proposal is not really going to help the poor, because they are already getting FSMs. It is only going to help the better off, who will save some £400 a year for each child. The poor will in fact lose out because they rely disproportionately on the existing public services that will have to be cut to pay for it.

The ConDem government has done exactly the same thing with income tax. Yes, it is a good idea to take the lower paid out of income tax altogether by raising the threshold, but this should have been balanced by increasing the basic rate of income tax so that the overall tax take remained the same. As things stand, increasing the threshold from £6,475 in 2010/11 to £10,000 in 2014/15 will give every basic rate taxpayer an extra £705 a year (although an allowance needs to be made for inflation, making it maybe £400 or £500 in real terms). So, once again, the overall effect is to reduce the amount the UK government has available to spend on public services which the poor need more than those on middle incomes.

The LibDems will claim credit for both raising the income tax threshold to £10,000 and for UFSMs for those aged 7 and under. They will say they are helping to create a fairer, more equal society. They will say that by being in government, they have managed to save us from the rabid excesses of a government entirely made up of Tories. But this isn't really true. What they've "giving" with one hand is being clawed back by the other.

If universal benefits are to be extended, they need to be paid for by corresponding increases in general taxation. This is the only way that other public services can be maintained rather than cut.

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8 comments:

Anonymous said...

Question is what happens in Wales. There will be money from Barnet coming to pay for it, so will WAG do the same?

Owen said...

Another obvious question surrounds the standards of school meals. Although there are plenty of guidelines about quality nowadays, there's no point in having universal free school meals if they're nutritionally bereft (or provided for the lowest price).

Anonymous said...

"It would be fine if this £600m were to be raised by increasing taxation, but there are no plans to increase it."

My goodness, I'm not on a high wage but we are over taxed in this country already. I look at the roads, rail, schools and hospitals in Wales and think "where is my money going to"

Anonymous said...

anon 21:20, your money is going on the language! As is mine.

We need to devolve Wales!

MH said...

I think the Welsh Government will certainly be inclined to follow suit, 11:47. After all, they have introduced free breakfasts, for much the same reasons, and the scheme has been a big success. No child in Wales need start a school day without at least some form of breakfast, and that helps concentration, behaviour and achievement.

If the additional expenditure in England is £600m, we should get a Barnett consequential of more than £30m. The only problem is that the Welsh Government has had to use some of the block grant to compensate for other cuts, and it is a question of balancing priorities. But my guess is that they will do it ... to be frank, they don't really have much of a choice.

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As for being "over-taxed" just ask yourself when income tax last went up, 21:20. It was in 1975, when the basic rate was increased from 33% to 35%. Since then it has only ever gone down, irrespective of whether the economy has been in boom or bust. That certainly tells me we are paying too little tax (or, to be more specific, too little direct tax) and this explains why we are in so much debt and why public services are getting worse.

According to the Holtham report, 1p on the basic rate of income tax in Wales would raise £175m. So we could probably roll out free school meals for every child in primary and secondary education for roughly half a penny on the basic rate of tax. That's the sort of difference tax-varying powers for Wales could make, and is the best argument for it.

Who in Wales would oppose it? The Tories and LibDems could hardly oppose it, because they're now going to partly do it in England. The Telegraph piece was an attempt to explain how much of a no-brainer it should be to even those of the "Taxpayers Alliance" mentality. And for those of us on the left of the political spectrum (if we can still put Labour in that group) it is something devoutly to be wished in any event.

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It might be problematic, Owen. In nutritional terms I'm sure there will be enough input from enough professionals to ensure that what is on the menu is healthy, but I wonder more about quality and variety. Some things are so healthy that they're unappetizing, and if the menu is unappetizing and monotonous kids will just eat all the bad things they eat now as well (not instead, as the meal will be free) which won't help the fight against obesity at all. I suppose it will depend on the budget available.

One hidden benefit is that there will almost certainly be stipulations about the food being sourced locally.

Anonymous said...

An interest consequence of the introduction of free school meals for all, especially if it is introduced at KS2 as Mr Clegg has suggested will be how in England poverty is measured in the school system. If the proposal is followed in Wales we will have no measure at infant level to address this. Assuming we have no Free School Meals (FSM) at Foundation & KS2 there will be a big hole in how we put school core data sets together. The family data sets which are designed to challenge school will be compromised. This policy change will probably impact on any future primary banding system as I think FSM is a component of the current secondary system and would expect broadly similar measures would be used to make the primary calculation. The Pupil Deprivation Grant (determined by those parents that decide to claim their FSM entitlements) and Looked After Children Grant are based on the FSM data. Claiming of FSM has always been a crude measure to identify need, but it is one of the only if not the only measure we have. This policy which I personally agree with will result in a challenge for ESTYN & the new Standards Unit in Cardiff .

MH said...

It will be an interesting challenge, 07:54.

At one level it shouldn't be a problem. Eligibility for FSMs is currently based on a set of criteria (Income Support, Jobseekers Allowance, etc) so we could measure the same deprivation by those same criteria directly. Except that those criteria are now going to change anyway with the introduction of Universal Credit. I don't know how different UC will be.

The bigger problem has always been that not every parent registers for FSMs (perhaps for reasons of pride or stigma, but probably more out of a sense of privacy) which perhaps didn't matter to the school or local authorities before, but now matters a lot because of the Pupil Deprivation Grant/Pupil Premium. It is hard to see why a parent would want the school to know about their financial circumstances if they themselves get nothing out of it. In fact this might be a bigger problem in England because of the higher number of non-local authority providers than it would be in Wales, where most education provision is through the local authority. A local authority would probably know about your circumstances anyway (council tax benefit) but you definitely wouldn't want your privately-run free school to know.

At present, the onus is on the school to get as many registered for FSMs as possible in order for them to get the maximum PDG/PP. In Wales, it might be better to put the responsibility onto local authorities, who will need to know who is getting Universal Credit for council tax reasons, and will also know at which school children are enrolled. It wouldn't be foolproof, but the present system isn't foolproof either.

MH said...

Another story on the subject here in the Guardian.

I'd be interested to know how many local authorities were already doing this. The London Boroughs of Southwark, Islington and Newham seem to be doing this for all primary school pupils. And Tower Hamlets has just started doing it for Reception and Year 1 children.

Has it been done anywhere in Wales?

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