Osborne called out for holding "two Budgets" a year

The Autumn Statement was never meant to become a "second Budget" but Osborne has made it one. And the Treasury Select Committee is right to say so.

It's easy now to forget that George Osborne scrapped the pre-Budget report (introduced by Gordon Brown in 1997) in the belief that major decisions on tax and spending should be reserved for the Budget itself. The new slimmed-down Autumn Statement was designed to include little more than the OBR's latest forecasts on growth, borrowing and jobs. But confronted by the failure of his economic plan, Osborne has turned it into a second Budget in all but name. His most recent statement, for instance, included a freeze in fuel duty, an increase in the personal allowance to £9,440, a cut in corporation tax, a reduction in the tax-free pension allowance and the abolition of national pay bargaining for teachers.

So it's good to see the Treasury Select Committee calling the Chancellor out on his U-turn. In its report on the 2012 Autumn Statement, the committeee, which is chaired by Conservative MP Andew Tyrie, notes:

The OBR is required by statute to issue two economic and fiscal forecasts a year. The Chancellor’s own Autumn Statement, however, has now grown to be virtually a second Budget. There are good reasons for having a single substantial annual review of  the fiscal and economic state of the country, not least to enable the subsequent  presentation to Parliament of proposed tax measures and of Estimates of expenditure.  The Treasury should  re-establish the annual Budget as the main  focus of fiscal and economic policy making.

Tyrie said: "The autumn statement is not, nor should it be, a second budget. In recent years it has come to read like one.

"The case for two budgets is weak. An additional one can create uncertainty and carries an economic cost. Only in an emergency would it be likely to carry long-term benefit. The primacy of the budget as the main focus of fiscal and economic policy making should be re-established."

OBR forecasts "biased to over-optimism"

Another concern raised by the committee is that the OBR's forecasts so far have been "biased to over-optimism". It states: "This would not be a cause for concern but for the fact that the OBR’s forecasts have implications for decisions on public policy. This is because the fiscal mandate is defined with direct reference to a forecast, and because the OBR’s is at present the only official forecast against which the fiscal mandate can be measured."

Osborne reliant on "uncertain" 4G and Swiss tax windfalls

MPs also criticise Osborne for placing so much reliance on the anticipated windfall from the sale of the 4G  mobile spectrum and Swiss tax repatriation to meet his borrowing forecasts. 

The sums expected from the sale of the 4G spectrum and Swiss tax repatriation represent the majority of the additional receipts the Treasury intends to offset against the tax reductions and investment announced in the Autumn Statement for 2012–13 and 2013–14. Both are subject to uncertainty. In the case of the tax repatriation from Switzerland, the proceeds may not meet expectations if assumptions about the potential tax liabilities and expected behaviour of those affected prove not to be valid. 
As I noted at the time of the last Autumn Statement, it was only Osborne's inclusion of the expected £3.5bn receipts from the 4G auction that allowed him to claim that borrowing would fall this year, rather than rise (the boast that famously threw Ed Balls). If we strip out the £3.5bn, the forecast deficit for this year is £123bn, £1.4bn higher than last year.
 
And with borrowing currently £7.2bn (7.3 per cent) higher than at the same point last year, it's no surprise that Osborne was so keen to bag the 4G receipts early.
George Osborne poses for photographers outside 11 Downing Street before presenting his annual budget to Parliament on March 21, 2012. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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As children face a mental health crisis, should schools take the lead in fighting it?

There is a crisis affecting the mental health of England's young people. As Children’s Mental Health Week gets underway, the government must put schools at the heart of mental health services.

Three children in every classroom have a diagnosable mental health condition. Half of these are conduct (behavioural) disorders, while one third are emotional disorders such as stress, anxiety and depression, which often becomes outwardly apparent through self-harm. There was a staggering 52 per cent jump in hospital admissions for children and young people who had self-harmed between 2009 and 2015.

Schools and teachers have consistently reported the scale of the problem since 2009. Last year, over half of teachers reported that more of their pupils experience mental health problems than in the past. But teachers also consistently report how ill-equipped they feel to meet pupils’ mental health needs, and often cite a lack of training, expertise and support from NHS services.

Part of the reason for the increased pressure on schools is that there are now fewer ‘early intervention’ and low-level mental health services based in the community. Cuts to local authority budgets since 2010 have resulted in significant erosion of these services, despite strong evidence of their effectiveness in reducing escalation and crises further down the line. According to the parliamentary Health Select Committee, this has led specialist child and adolescent mental health services (CAMHS) to become inundated with more severe and complex cases that have been allowed to escalate through a lack of early treatment.

This matters.  Allowing the mental health of children and young people to deteriorate to this extent will prevent us from creating a healthy, happy, economically productive society.

So what part should schools play in government’s response?

During the last parliament, the government played down the role of schools in meeting pupils’ mental health and wider emotional needs. Michael Gove, during his tenure as education secretary, made a conscious decision to move away from the Every Child Matters framework, which obliged local authorities to work with schools and health services to improve the ‘physical and mental wellbeing’ of all children in their local area. He argued that schools policy needed to focus more heavily on academic outcomes and educational rigour, and references to children’s wellbeing were removed from the Ofsted framework. This created a false dichotomy between academic standards and pupils’ mental health - why can’t a school promote both?

But since Gove was replaced by Nicky Morgan, a new window of opportunity for meaningful reform has opened. Following her appointment in 2014, Morgan has called on schools to promote resilience and protect pupil’s mental health when problems first arise. The Department for Education has made tentative steps in this direction, publishing advice on counselling in schools and announcing a new pilot scheme to link schools with NHS services.

However, much more needs to be done.

The only way to break the pressures on both mental health services and schools is to reinvest in early intervention services of the kind that local authorities and the NHS have been forced to cut over the last few years. But this time around there should be one major difference – there is a compelling case that services should be based largely inside schools.

There are strong arguments for why schools are best placed to provide mental health services. Schools see young people more than any other service, giving them a unique ability to get to hard-to-reach children and young people and build meaningful relationships with them over time. Studies have shown that children and young people largely prefer to see a counsellor in school rather than in an outside environment, and attendance rates for school-based services such as those provided by the charity Place2Be are often better than those for CAMHS. Young people have reported that for low-level conditions such as stress and anxiety, a clinical NHS setting can sometimes be daunting and off-putting.

There are already examples of innovative schools which combine mental health and wellbeing provision with a strong academic curriculum. For example, School 21 in East London dedicates 2.5 hours per week to wellbeing, creating opportunities for pastoral staff to identify problems as early as possible.

There is a huge opportunity for Nicky Morgan – as well as Labour’s shadow mental health minister Luciana Berger – to call for schools to be placed at the heart of a reconstructed early intervention infrastructure.

This will, though, require a huge cultural shift. Politicians, policymakers, commissioners and school leaders must be brave enough to make the leap in to reimagining schools as providers of health as well as education services.

Craig Thorley is a research fellow at IPPR, where he leads work on mental health. Follow him @craigjthorley