Alistair Darling, has announced that the education budget will rise to £74bn in 2010. The extra £2bn would be invested in ‘health and education’. The proposed budget will mean a rise in education and skills spending as a percentage of GDP to 5.6%, compared with 4.5% 10 years ago. Education spending in England will therefore rise on average by 2.8% a year - in real terms - until 2010-11.

Much of the education expenditure was earmarked for schools, including plans for a new primary school in every "local area" by 2010. Interestingly he also announced £250m to fund ‘personalised learning support’ for all schoolchildren.

Mr Darling said there will be additional spending by 2010-11 of £14.5bn on education and £900m on science. This is particularly of interest with the South West’s increasing focus on STEM as was the promise to promote world-class science, innovation and research in the UK. The Department for Innovation, Universities and Skills' budget on higher education and skills will rise from £14.2bn in 2007-08 to £16.4bn by 2010-11 to implement the recommendations of the Leitch review.

There will also be increasing public investment in the science base from £5.4bn in 2007-08 to £6.3bn by 2010-11 to implement the recommendations of the Sainsbury review which we review later in this Comment.

The University and College Union warned that unless the government commits itself to at least matching the spending on further and higher education that competitor countries enjoy then the UK risks being left behind. UCU general secretary, Sally Hunt, said in today’s Guardian: "It is of course encouraging that the chancellor set out his support for education in his statement today. However, we need clear commitments from government for greater public investment in post-school education. All politicians tell us that education is a priority but rhetoric alone cannot support our universities and colleges."

Total capital investment in schools will rise over the CSR period from £6.4bn today to over £8bn by 2010-11 - a sevenfold increase in real terms since 1997. The schools minister, Jim Knight, will set out detailed school capital allocations for each local authority shortly. Details on how the additional £250m will be spent to help ensure that all children at school are ready to learn and can benefit from personalised services and support will be announced as part of the Children's Plan expected towards the end of the year.

Ed Balls said: "Our task in the next decade is for our education system to become world class. We need to transform national aspirations and expectations for the school system so that we can continue to raise standards year on year. "Our forthcoming Children's Plan will ensure that every child has the chance to make the most of their talents and fulfil their potential, and deliver genuine opportunity for every child with the best possible start in life and all the support they need to be happy, healthy and successful. "Today's settlement guarantees that we can continue to work towards a prosperous, fair and cohesive society, where no child is held back by the circumstances of their birth and every child is able to fulfil their potential."

The 2007 CSR enables total public funding of over £1 billion for business innovation led by the Technology Strategy Board over the CSR period including co-funding of at least £120 million committed by the Research Councils, and co-funding of £180 million committed by the Regional Development Agencies. DIUS will increase spending on Higher Education and adult skills by an average of 2.0 per cent a year in real terms, rising from £14.2 billion in 2007-08 to £16.4 billion in 2010-11. This will include funding for Higher Education to enable:

1. greater and wider participation in higher education as funded student numbers rise to around 1.2 million by 2010-11 – 50,000 more than now; and
2. two thirds of students to qualify for non-repayable grants with over 250,000 students benefiting by 2010-11.

The 2007 CSR enables the Government to make real progress against the Leitch ambitions for world-class skills, including:

1. a significant rise in the number of adults gaining qualifications at all levels between 2008 and 2011; and
2. expansion of the employer-led Train to Gain programme, taking expected investment to more than £900 million a year by 2010-11.

The Department for Innovation, Universities and Skills (DIUS) was created by the Prime Minister in June 2007 to drive forward delivery of the Government's long-term vision to make Britain one of the best places in the world for science, research and innovation, and to deliver the ambition of a world-class skills base.

John Denham, the Secretary of State for the Department for Innovation, Universities and Skills said “ DIUS exists to enable adults to develop their skills and knowledge to the full extent of their ability; to deliver world class research and scholarship; and to ensure we make the full use of that research in making Britain the best place in the world to build an innovative business. This settlement enables us to make real progress in each of these areas. In doing so we will build a strong economy and a cohesive society that can meet the global challenges of the 21st century."

2007 Pre-Budget Report and Comprehensive Spending Review: Speech by Alistair Darling

2007 Pre-Budget Report and Comprehensive Spending Review: Departmental settlements

2007 Pre-Budget Report and Comprehensive Spending Review: Microsite - Summary of key points

Response by Jane Henderson, Chief Executive of the South West of England Regional Development Agency

The Times's view

The Comprehensive Spending Review (above) will be increasing public investment in the science base from £5.4bn in 2007-08 to £6.3bn by 2010-11 to implement the recommendations of the Sainsbury review. So as with Leitch this is a Review that is to be 'implemented' rather than 'noted' or 'filed'.

In November 2006, the Chancellor commissioned Lord Sainsbury to conduct an independent review of the UK science and innovation system. The terms of reference for the review were:

To take stock of the response of the UK's Science and Innovation System to the challenges and opportunities of globalisation, and to take a forward look at what needs to be done to ensure the UK's continued success in wealth creation and scientific policy-making.

The Review will build on the Government's existing policy agenda in this area, especially the Science and Innovation Investment Framework 2004-2014, as well as the Next Steps on the framework published alongside the 2006 Budget.

The Review would take stock, in the context of globalisation, of the overall impact and balance of government interventions, at national and regional levels. In order to reach its conclusions it will include examination of:

1. Industry R&D and investment in innovation;
2. Publicly funded R&D (including government departments) and investment in innovation;
3. Knowledge exchange between universities and business, including examining progress made since the Lambert Review;
4. The supply of skilled people;
5. The supply of Venture Capital;
6. Patents, Measurement System and Standards; and
7. International science and technology collaboration.

The Government will invest £1 billion over the next three years to boost business innovation and technology development and will create a new science and innovation strategy, to help position Britain as a key knowledge economy at the forefront of 21st century innovation. The review of science and innovation by Lord Sainsbury will be used as a blueprint to drive success.

The review finds Britain has significantly improved its innovation performance in recent years, but still needs to do more to produce the best possible conditions to stimulate innovation in industry. The Government has accepted Lord Sainsbury's recommendations and announced the following:

1. A new package of support for technology and innovation in business. The Technology Strategy Board will develop and lead a strategic programme worth £1bn over the next three years, in partnership with the Research Councils and the Regional Development Agencies (RDAs). With our STEM focus in the South West this is significant funding to support the emerging regional actions.

2. The development of a detailed strategy for science and innovation by the Department of Innovation, Universities and Skills (DIUS) which will incorporate plans for implementation of the Review.

3. New measures to improve further the teaching of science, technology, engineering and mathematics (STEM) subjects, by boosting investments in the training of specialist science teachers, improving STEM careers advice, doubling the number of science and engineering school clubs, and establishing a National Science Competition to showcase young people's achievements across ages and disciplines.

4. Improved knowledge transfer through an improved Higher Education Innovation Fund, building up support for business-facing universities, and a doubling of the number of Knowledge Transfer Partnerships to boost research-business links.

5. Better support for early-stage high-technology companies through a reformed Small Business Research Initiative with more effective use of Government procurement to drive business innovation, a national 'proof-of-concept' fund, and the support of RDA for incubators, high-technology clusters and business readiness services.

6. Increasing international collaborations to help attract researchers from abroad and link British researchers with the best and brightest researchers globally. Expanding the "Science Bridge" scheme to build links with leading scientific nations.

7. DIUS will produce an annual Cross-Government Innovation Report on the innovation activities of DIUS, including the Technology Strategy Board (TSB), other government departments and the Regional Development Agencies.

The Chancellor of the Exchequer, Alistair Darling, said: "The UK can only maintain its competitiveness in today's more globalised world by placing itself at the forefront of the new scientific and technological breakthroughs that determine the future face of our economy. Lord Sainsbury's recommendations today build upon this success, identifying ways in which we can reach the untapped potential in the UK economy to go further in making the UK a global leader in science and innovation."

Secretary of State for Innovation, Universities and Skills, John Denham, said: "The Sainsbury Review presents the vision for a new science and innovation landscape for Britain. We're going to take that vision a step further. We are making good progress, but so are our competitors and we need to keep the UK ahead of the game."

The Royal Society welcomed the Report stating: "Too often in the past we have not fully capitalised on our advantages because of a fragmented approach to supporting innovation and complacency about the ongoing quality of our science. The report's recognition of the importance of coordination, support for the relevant players, strengthening education and international cooperation must now be backed up with the commitment and sustained financial support necessary to fulfil our potential. The Society has welcomed the central role of the Technology Strategy Board outlined in the report. This will provide a focal point for pushing innovation up the political agenda. It is, however, essential that its role must be coordination rather than centralisation."