Osborne announces plans to lengthen the school day

Secondary schools in England will be able to increase the length of the school day under plans announced by the Chancellor of the Exchequer in the Budget today.

George Osborne said the move would be voluntary and that there would be extra funding for a quarter of schools to cover extra curricular activities, such as sport. In a Budget which included an announcement of another £3.5bn cuts in public spending, Osborne outlined a range of other policies affecting working parents.

These included a change in the rate at which workers start paying top rate tax. This is to be raised from £42,385 to £45,000 from April next year. The tax-free personal allowance – the point at which tax starts being paid – is also being raised to £11,500 from next year.

The Chancellor announced several measures on savings. The ISA limit will be increased to £20,000 a year for all savers and the Government is introducing lifetime ISAs for people under 40 so they can save for housing or a pension with the government putting in £1 for every £4 people save. He also announced a ‘Help to Save’ scheme for low-paid workers, worth up to £1,200 over four years.

A range of changes for small businesses and the self employed were outlined. Osborne said reforms to business rates would mean 6,000 small businesses will pay no rates and 250,000 will have their rates cuts from April 2017. He also announced new tax free allowances for “micro entrepreneurs” who rent their homes or sell services through the internet. The self-employed will no longer have to pay Class 2 National Insurance contributions from 2018. Currently the self-employed pay no NI if they earn less than £5,965 a year, although they can choose to make voluntary contributions. The Chancellor said the move would be a boost for enterprise.

Other announcements include the freezing of fuel duty and the abolition of the Money Advice Service.

Reaction
Personal finance expert Hannah Maundrell, Editor and Chief of money.co.uk, welcomed the news of the potential extension of school hours. She said: “Mums and dads employed full time will save a bundle on childcare and after school clubs – if their child’s school gets in on the action…Longer school hours will make working full time more viable for parents who will have to pay for fewer hours of expensive afterschool care or rely less on friends and family for help. Long term this could open up wider career opportunities too.”

The Chancellor said part of the reason for extending school hours was for schools to organise more sports and other extra-curricular activities. Maundrell added: “It would be great to see some of this after school time spent educating our children about money and budgeting. Extended hours could boost education standards and help students get used to fuller days; helpful for pupils who choose to go straight into work fresh out of school.”

However, she said only allowing 25% of schools to get the extra funding for this could introduce a postcode lottery and added that it was potentially bad news for independent after school clubs and childcare providers who could be forced to increase their prices to make up for lost revenue.

She stated: “As long as this opportunity is rolled out nationally and not just in certain areas I think this is an extremely positive move to give pupils the best start in life and take pressure off working parents’ finances. Globally the UK falls short on education league tables and hopefully this will go some way in rectifying this.”

The Chartered Institute of Personnel and Development’s chief economist Mark Beatson welcomed the news of initiatives for small businesses, but added: “There was plenty in the Budget for small businesses to welcome in the form of cuts to capital gains tax, relief on business rates and a further reduction in the rate of corporation tax.

“However, changes to taxation and balance sheets alone aren’t enough to make businesses thrive. Both government and employers really need to get under the skin of how people are performing at work, the barriers that prevent them from being productive and how we can improve the skills and potential of the British workforce. We know that incompetence or bad management causes about half of corporate failures and these Budget measures could even reduce productivity by extending the lives of badly run businesses.”

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