Academies (Funding)

Thursday 16th June 2011 Commons Chamber

12:14

[Andy Burnham (Leigh) (Lab)]

(Urgent Question): To ask the Secretary of State for Education to make a statement on funding for the academy programme.

[The Minister of State, Department for Education (Mr Nick Gibb)]

The errors reported in the Financial Times today relate to mistakes made by local authorities in their returns to the Department for Education, which relies on local authorities to provide accurate information about their spending. Occasionally, individual local authorities make errors that can lead to academies getting too much, or indeed too little, funding. The system for funding academies, which was set up—I have to say—by the previous Government, is unclear, unwieldy and, in our view, unfair. It is no surprise, therefore, that some errors occur, which is why we are proposing changes to the school funding system to ensure that all schools and academies are fairly funded. We are proposing a system without the complexities that lead to these types of problems.

It is slightly odd for the right hon. Gentleman to ask these questions and attack us for the failings of a system created by the previous Labour Government, of which he was a member. We are the ones sorting it out, just as we are sorting out this country’s historic budget deficit. The question for him is: does he agree that we should raise the bar for secondary schools from 35% achieving five good GCSEs including English and maths, to 40% next year? Does he agree that we should further raise it to 50% by the end of this Parliament? Does he agree with our announcement today—[Interruption.] I do not know why the Opposition do not want to hear this. Does he agree with our announcement on extending the academies programme to underperforming primary schools, particularly the 200 worst-performing primary schools, many of which were in that state for a decade while his party was in government?

[Andy Burnham]

When will the Government learn that they cannot just bat away the question and always blame somebody else for the things that go wrong? Today’s Financial Times writes that the Department has given a large number of academies in England more money than they were entitled to. The news comes just days after the Secretary of State caved in to a legal claim from 23 councils that too much money was taken from their budgets to pay for academies. This raises a simple question: do the Secretary of State and the Minister have a grip on the budget?

But where is the Secretary of State? On a day when serious questions are being asked about whether the rapid expansion of his academy programme is backed up by a properly funded plan, only this Secretary of State could be in Birmingham announcing another major expansion of it. Why is he not here making that statement to the House of Commons? Should he not be here to reassure Members that he can proceed with his academies programme fairly and efficiently without penalising other schools in Members’ constituencies? Will the Minister tell the House how many schools have been overfunded, and what is the total amount paid in error? Will this money be clawed back from schools? It is not good enough for the Minister to stand there and blame everybody else. When will he take responsibility for the budget of his own Department? If it did not spot the mistake before the Financial Times reported it, why not? When will it put in place a proper accounting procedure?

Under threat of legal action, the Government have announced a U-turn on academy funding. Can the Minister set out the details and timetable for a review, and does he accept the need for urgency? Is it not the case that the Secretary of State repeatedly finds himself in these positions because he rushes ahead and fails to consult people on changes? We have been here before on school sport, education maintenance allowance and Building Schools for the Future. The only way people can make him listen to them is to launch a legal action. That is no way to run a Department. We hear that he will pay the councils’ legal costs. In the past year, he has spent more money on solicitors’ fees than Ryan Giggs and Fred Goodwin put together. How much has he spent on legal costs, and is this not a scandalous waste, when every penny is needed for children’s education?

The Secretary of State is today raising the floor targets for secondary schools and focusing the academy programme on struggling schools. These are Labour policies, and we are pleased at his dramatic conversion to them. We support raising standards in our schools; it is the standards of the Secretary of State we worry about. Perhaps the plan we needed to hear today was for poorly performing Departments to be taken over by successful ones. The only trouble is—there are no successful Departments. On the radio today, the Secretary of State tried pathetically to blame Labour for his latest blunder. Is it not time that he took responsibility for his own serial incompetence before people lose confidence in him altogether?

[Mr Gibb]

Yet again, the right hon. Gentleman overstates his case. First, the Secretary of State is in Birmingham today speaking to the National College for School Leadership, which is a very important part of our system of raising standards, and I am sure that his predecessors spoke every year to those conferences too. We are taking action to tackle the problems, although I should remind the right hon. Gentleman that the problem highlighted by the Financial Times occurred every year under the last Labour Government. The difference between the former Government—his Government—and this one is that we are taking action to sort it out. That is why we announced a fundamental review of the school funding system. That review is already taking place, and we will be making further announcements and holding a further consultation on the details later this year.

The right hon. Gentleman also raised the issue of the LACSEG—the local authority central spend equivalent grant—which is about double funding, where central Government are funding both the local authority and the academy for the same central services. Again, that is something that occurred under the last Labour Government, and we are sorting it out. That is why the Department for Communities and Local Government top-sliced £148 million off the funding to local government—to deal with that double funding. We are now looking at the issue again, as a result of the action taken by the 23 local authorities, and sorting it out. I would like to know from the right hon. Gentleman whether he supports us in our review of the funding system, so that we can create a simpler and clearer system that all can understand, and one that is similar for schools and academies. We want to achieve a per-pupil funding system that is fair and that all can understand, rather than the system over which his Government presided where schools in some local authorities received some £4,000 more per pupil than other schools with the same problems. Those are the problems that this Government are seeking to sort out, and I hope that he will support us in those plans.

[Robert Halfon (Harlow) (Con)]

Is it not the case that this urgent question is a smokescreen for those who oppose academies, given that we have created more academies in 12 months than Labour created in 12 years? Is it not also the case that the last Government left 500,000 children illiterate, and that those who are creating obstacles to academies want to wallow in mediocrity rather than pursue excellence?

[Mr Gibb]

My hon. Friend is, of course, absolutely right. It is not clear where the Opposition stand on, for example, free schools. Since the election, the right hon. Member for Leigh (Andy Burnham) has said that he opposes the establishment of free schools. However, since the news broke that one of Tony Blair’s closest aides is setting up his own free school, the right hon. Gentleman has told journalists that he now supports free schools. Which is it: does he support our academies programme and the free schools programme, or would he close down those schools if he came to power?

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

When I published the original policy paper on academies 10 years ago, it was never intended that they should be overpaid and that local authorities should be underpaid for doing the job of supporting pupils. Can the Minister confirm that the 2.25% that has been withdrawn from school funding generally and the overspend on academies have denied other children the key services that they need to raise standards and give them the life chances that all of us should want for every child?

[Mr Gibb]

I think it is rich when former Education Secretaries attack us for this policy. We are talking about a system that this Government inherited from the previous Government, and we are trying to sort it out. We will look at every instance of underfunding or overfunding of academies on a case-by-case basis. We want to reach a position where all schools and academies in this country are funded through a fair, simple and transparent process.

[Mr Mike Hancock (Portsmouth South) (LD)]

We can all accept that the problems that have occurred are the fault of the regime in place under the last Labour Government, but can the Minister give me an assurance that he will put in place a replacement formula, so that the next tranche of academies will not suffer from the same inconsistencies, and local authorities, which will continue to service other schools, will not experience a detrimental cut in their allowance?

[Mr Gibb]

I am grateful to my hon. Friend for raising those issues. That is precisely what we intend to introduce and what the current review of school funding is seeking to deliver. That review is taking place right now, and later in the year we hope to be able to announce a further consultation on the details of its outcome.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Minister aware that he is in danger of alienating those of us on the Opposition Benches who believe in the academy model for underperforming schools and who welcome announcements that are made to this House? The question asked by Sarah Montague on Radio 4’s “Today” programme this morning has to be answered: does the incompetence that we are talking about this morning emanate from local authorities, as the Secretary of State said time and time again, or from the Department?

[Mr Gibb]

As the Secretary of State made clear, we are talking about an error in the figures reported by local authorities to the Department, and these errors happen every year. We are determined to simplify the system, because it is the complexity of that system which results in local authorities making those errors when they report the numbers. The only way to tackle the problem is to simplify the system, which is what the school funding review is charged with delivering.

[Charlotte Leslie (Bristol North West) (Con)]

Does the Minister agree that this urgent question is an extraordinary own goal? Labour either knew about this structural, technical problem and did nothing about it, or else it had no idea. Which does the Minister think is worse: not knowing or ignoring?

[Mr Gibb]

My hon. Friend raises an important point, which goes to how to handle opposition. That is why I asked the right hon. Member for Leigh the questions that I did. This is not about just jumping on the latest bandwagon of a Financial Times report; it is about working out where the Opposition stand on issues such as raising the bar on standards in secondary schools and how to tackle the 200 worst-performing primary schools.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Since the beginning of the year, at the request of parents in my constituency, I have been trying to find out the funding basis of the several free schools due to open there. I have with me correspondence from the Department giving every possible excuse for not giving that information—it even makes “The dog ate my homework” sound plausible. The last correspondence, from two months ago, concerned my appeal against the refusal under the Freedom of Information Act. I have had no response whatever from the Department, which is concealing the information either because it does not know it because it is incompetent, or because free schools are being treated in a preferential way. Will the Minister please now answer those questions?

[Mr Gibb]

Details of free schools will be published once they open, so the hon. Gentleman will be able to see all that information once that free school opens. We are concerned about disclosing details of proposals for free schools where they have been turned down, because that can cause embarrassment to the individuals who have made those proposals, who will sometimes be teachers who have existing jobs. There are all kinds of reasons why we have to maintain confidentiality for those proposals, but all those details will be made available for any free school that opens.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I welcome my hon. Friend’s statement about simplifying the system. I hope that he agrees that it is only fair that students in free schools or academies should receive the same amount of funding as that provided to those in LEA schools.

[Mr Gibb]

My hon. Friend raises a good point. That is how the system is supposed to work, and how it does work. Academies are funded on the same basis as maintained schools; however, they have more control over that element of funding which is currently spent by the local authority on those central services provided by the academy. That is all that is meant to happen with the funding system. It is the complexity arising from that system and the fact that local authorities are funded by both the Department for Education and the Department for Communities and Local Government that has led to problems. However, this is an issue that we are tackling and sorting out.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Even though the Secretary of State is in Birmingham, just in case he does not get a chance to talk to Councillor Les Lawrence, who recently complained bitterly on the front page of The Birmingham Post about significant hidden costs in the academies programme that leave local education authorities out of pocket, can the Minister address those concerns and say what the Secretary of State’s answer to Les Lawrence would be if he has the chance to talk to him today?

[Mr Gibb]

We have talked to Les Lawrence on many occasions. He raises an important point, which is that when the top-sliced funding for local authority central services is taken away from local authorities, there is an issue about how we allocate those savings across local authorities. That is the issue on which there has been correspondence with those local authorities. We are reviewing the position to ensure that we do not leave local authorities in a position from which they cannot fund the central services that they continue to provide to maintained schools, as well as those that they continue to provide to pupils attending academies.

[Angie Bray (Ealing Central and Acton) (Con)]

I agree with the point made by my hon. Friend the Member for Harlow (Robert Halfon) that the Opposition do not like to listen to the success story that is the academies programme. Why does the Minister think that more than 1,200 schools have already applied for academy status?

[Mr Gibb]

Those schools are applying because of the autonomy and independence that academy status brings to them. My hon. Friend is right to cite the figure of 1,200. By now, 704 academies have opened, compared with 200 when this Government came into office. They are delivering a very high standard of education, and I hope that the Opposition will support not only our existing academy programme but our proposal to extend the programme to primary schools and, in particular, to the 218 worst performing primary schools.

[Helen Jones (Warrington North) (Lab)]

I feel sorry for the Minister today, because he has clearly been sent here as the fall guy. Speaking as a parent and on behalf of the parents in my constituency, I should like to ask him a question. We have a Secretary of State who botched up the Building Schools for the Future programme, who had to do a U-turn on school sport partnerships and who cannot spot errors in the funding programmes of his own Department. Why should any parent have confidence in his running the education system when he cannot even run his own Department?

[Mr Gibb]

I know and like the hon. Lady; I have known her for many years. She is trying to create a theme here, but there is no theme. The problem that was reported in the Financial Times today occurs every year. It arises from the complexity of the funding system, which we are trying to simplify. It is as simple as that, and we will sort it out.

[Stephen McPartland (Stevenage) (Con)]

I congratulate the Minister on moving the focus on to the 200 worst-performing primary schools. Does he agree with Nick Pearce, the head of the Institute for Public Policy Research and Tony Blair’s former policy adviser, that this is something that the previous Government did not focus on enough?

[Mr Gibb]

Yes, I do. When we were in opposition, we proposed extending academy status to primary schools. The schools Minister at the time thought it was an appalling idea. However, we have to do something about the 200 underperforming primary schools. Indeed, we have to do something about all the underperforming primary schools, because primary school is where children learn the basics of reading and arithmetic. If we do not get it right in those early years, the life chances of all those thousands of children attending those underperforming schools could be blighted. We intend to sort those schools out.

[Ian Mearns (Gateshead) (Lab)]

The Secretary of State has made it plain that if schools do not buy a raffle ticket by going for academy status, they will not be able to get involved in the raffle to get capital out of the future school funding. He has already admitted to the House that 100 staff in his Department are engaged in the expansion of the free schools programme. How many staff are engaged in this botched expansion of the academies programme, and how much is that costing the Department?

[Mr Gibb]

This is an important part of raising standards in our school system; indeed, it is a crucial element. When 9% of boys leave primary school with a reading age of seven or under—they are basically unable to read—it cannot be said that applying staff in the Department to deliver the academies programme is a waste of taxpayers’ money. This is good money that is being diverted to a programme designed to raise standards in our least-performing schools, and I think that it is a good use of taxpayers’ money.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Does my hon. Friend agree that it is extraordinary for the Opposition to quibble about accounting errors? Is this not a smokescreen to distract attention from Tony Blair’s comments during the past two weeks supporting this Government’s policies on academies and primary schools?

[Mr Gibb]

My hon. Friend raises a point that I was too sensitive to raise with the Opposition spokesman—namely, that our policies were endorsed in The Sun yesterday by the former Prime Minister, Tony Blair. Furthermore, the former schools Minister, Lord Adonis, voted for our Academies Bill in the other place, supporting our expansion of the academies programme. I wish that the official Opposition would now support it too.

[Mr Tom Watson (West Bromwich East) (Lab)]

Is the Minister familiar with the maxim that a Minister can delegate power but not responsibility? Why does he not just say sorry to parents and pupils?

[Mr Gibb]

We are not denying responsibility. We are taking action to simplify the over-complex funding system that we inherited, which led to problems such as these in previous years.

[Brandon Lewis (Great Yarmouth) (Con)]

In Great Yarmouth, we have seen the benefit and freedom resulting from the transformation of schools such as the Ormiston academy. Does the Minister agree that it is that freedom and the potential for transformation that are encouraging at least one in three secondary schools to apply for academy status?

[Mr Gibb]

My hon. Friend is absolutely right. He will know, as I am sure the Opposition do, that academies are improving at twice the pace of the rest of the schools system. That is why we are so determined to expedite the process of conversion to academy status.

[Kerry McCarthy (Bristol East) (Lab)]

Turning underperforming schools into academies in Bristol was, for the most part, a great success. Free schools, however, are not needed and, for the most part, not wanted there. When are the Government going to get their priorities right, get a grip on their finances and help Bristol to address the real problem that it is facing at the moment—namely, the chronic under-provision of primary school places?

[Mr Gibb]

The hon. Lady seems to be contradicting herself. There is a shortage of primary school places, yet she says that there is no need for the free school programme, which could be used to create more school places. We want not only more school places but more high-quality school places, and that is what the free school programme, in particular, is designed to achieve.

[Mr Mark Spencer (Sherwood) (Con)]

The Dukeries college in Ollerton and the Joseph Whitaker school in Rainworth are just two of the large number of schools that are applying for academy status. Is not the fact that the numbers have reached such a high level a ringing endorsement of the Minister’s policy?

[Mr Gibb]

Yes, and it demonstrates that the teaching profession values that autonomy and the trust that the Government are putting in them. That is in enormous contrast to the top-down, prescriptive approach taken by the previous Government. That is why I believe that our system will work. In contrast, Labour did not manage to achieve a significant rise in standards in the schools system during its 13 years in office.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Can the Minister tell the House how many times the previous Labour Government were taken to court over their education policies?

[Mr Gibb]

The Sharon Shoesmith case springs to mind. I will write to the hon. Lady and let her have those figures.

[Richard Fuller (Bedford) (Con)]

Financial and accounting errors are a serious matter, and it is not surprising that the shadow Secretary of State for Education has raised the issue, given his direct experience of the catastrophic financial and accounting errors under the last Government. Does the Minister not agree that, on a day when this Government have thrown a lifeline to children trapped in underperforming primary schools, it is odd that Labour has once again turned its back on those children?

[Mr Gibb]

My hon. Friend is right. The Secretary of State has announced that we are taking urgent action to convert the 200 least-performing primary schools in this country to academy status, transforming those schools and giving the youngsters who attend them a significantly better start to their education, and I would have thought that that should be the issue to be raised today.

[Nic Dakin (Scunthorpe) (Lab)]

Given the Department’s serial bungling, can the Minister tell us how much it has spent on defending legal challenges in the past year?

[Mr Gibb]

These issues are faced by all Governments and all Departments—[Hon. Members: “How much?”] I do not have those figures to hand, but if I am able to get them, I will write to the hon. Gentleman.

[Charlie Elphicke (Dover) (Con)]

Three of the 704 new academies are in my constituency. We are seeing an education revolution, so why are we not discussing that and the success of our schools, rather than accounting errors that are a car crash left by the previous Government?

[Mr Speaker]

Order. The simple answer to the hon. Gentleman’s inquiry is that we are discussing this matter because an urgent question application was submitted to me and granted by me. No further discussion of that point is required.

[Neil Carmichael (Stroud) (Con)]

Is it not the case that this urgent question has certainly underlined the need for a full investigation and inquiry into the discredited system that the last Government used for the funding of schools, which was unfair and inefficient? Is it not ironic that this issue has been raised when schools want more autonomy from such systems? Is it not also the case that we should support—

[Mr Speaker]

Order. That is enough. The hon. Gentleman has had a good outing and I am sure he has enjoyed it.

[Mr Gibb]

My hon. Friend is absolutely right and asked a good question. Many local authorities have been raising this issue for many years; they campaigned on it and lobbied the previous Government about the unfairness of the school funding system. That is what we are determined to sort out with the school funding review.

[Anna Soubry (Broxtowe) (Con)]

I visited Foxwood special school in my constituency on Friday and learned how keen it is to obtain academy status. Will the Minister help Foxwood and other special schools by encouraging them to apply for that status, and will he particularly assist Foxwood school?

[Mr Gibb]

I am grateful to my hon. Friend. One of the changes proposed in the Education Bill is to allow academy status to apply to special schools as well. I would be very happy to help my hon. Friend; if she and the head teacher of that particular special school would like a meeting in the Department to discuss academy status, I would be delighted to arrange it.

[Mr Philip Hollobone (Kettering) (Con)]

The new academies in Kettering are hugely welcomed by local residents. Can the Minister confirm that the proportion of education funding that goes into teaching pupils will go up under this Government, with a lesser proportion being spent on bureaucracy in local town halls and in his Department?

[Mr Gibb]

My hon. Friend raises an important point about bureaucracy in the education system. We are devoting a huge amount of resources within the Department to clamping down on bureaucracy and removing bureaucratic burdens on schools. It is a large amount of work; it involves rewriting reams of guidance. The guidance on bullying runs to something like 400 or 500 pages, and I think it is rarely read in schools. We are streamlining it and slimming it down to about 25 pages, and we are doing the same thing with all the guidance so that it becomes efficient, quick to read and of high quality. Schools will then be able to use it without having to read through reams of lever arch files emanating from the Department. We are putting a stop to that.