School Funding

(Limited Text - Ministerial Extracts only)

Thursday 5th November 2015 Westminster Hall

[Graham Stuart]

My hon. Friend is right and I hope and expect that we will hear from the Minister on when the House will get the detail about what the Government propose to do.

To bring to life the example I mentioned of a relatively small secondary school with 920 pupils, the £1.9 million difference between two such schools in different areas is enough to pay the total costs—salaries and pension contributions—of 40 full-time teachers. That huge funding gap cannot be justified.

The gap is not explained by pupil deprivation. People might think that the system is designed to give more to areas of concentrated deprivation, whether urban or other. In 2011, Department for Education analysis showed that a school with 43% of pupils eligible for free school meals can receive £665 less funding per pupil than a school with less than 10% eligible pupils. Therefore, a school that serves the most deprived, as opposed to one that serves a remarkably affluent population, can receive hundreds of pounds less per pupil simply because of where it is rather than the nature and character of the children concerned, let alone their needs. Given the flat cash settlement for schools since that time, those figures will not have altered significantly.

I will give another example of the disparity that can exist between authorities. A secondary school pupil in York who receives the pupil premium, which is worth £935 this year, still has less spent on his or her education than an equivalent pupil in Birmingham who is not eligible for the pupil premium. Therefore, the child of the wealthy entrepreneur or lawyer in Birmingham receives more than the child from the poorest home in York.

Colleagues have mentioned the cross-border issue. The same applies in the relationship between Nottingham and the county that surrounds it: a 13-year-old pupil in the city gets more for their education than a disadvantaged child from the county next door, even though that child receives a pupil premium. Indeed, it is worse than that: a child who is in care in a certain area of the country and receives the pupil premium plus, worth £1,900, to reflect their needs, will still receive less than the child of a wealthy lawyer in Islington. That cannot be right. It needs to be fixed in a timely way and that is what we are gathered here today to tell the Minister.

We might think that if the disparity does not reflect deprivation, perhaps it reflects underlying performance in the system such as the quality of education in the schools, with more money going to help those areas doing less well. However, that would be wrong. Some of the best performing areas, notably in London, continue to receive thousands of pounds more per child than areas that are really struggling with education outcomes. The Royal Borough of Kensington and Chelsea receives 39% more funding per pupil under the schools block grant than my own area, the East Riding of Yorkshire, which loses out badly under the current funding arrangements.

The East Riding struggles with many of the challenges identified by Ofsted Chief Inspector Sir Michael Wilshaw in rural and coastal areas of England, where it can be hard to recruit and retain high-quality teachers, and partnerships between schools can founder because of the distance between them. We could take a coastal town and ask, “Why can’t we replicate the London challenge in East Yorkshire?” but anyone who drew a circle around Withernsea in my constituency to find all the schools that might be able to provide mutual support would find that half the circle was in the sea and the other half took in a swathe of rural East Yorkshire. That does not create easy conditions in which to build the collaborative regimes that have made such a difference in London and that is a further reason why such areas need to be fairly funded.

Contrary to any lazy misconceptions that areas such as the East Riding are rural idylls, there are areas of deep deprivation. Withernsea ranked in the top 10% of most deprived areas in England on both the income and employment indices of multiple deprivation in 2010. In a devastating speech in 2013, Sir Michael Wilshaw warned that

“many of the disadvantaged children performing least well in school can be found in leafy suburbs, market towns or seaside resorts”.

The East Riding also faces the additional costs associated with needing to run small, rural schools because of its geography. There is a limit to how far we can expect children to be bused, so it needs to run small schools, which are necessarily more expensive. It therefore has higher natural costs, and greater challenges in delivering high-quality education.

On top of that, the East Riding targeted as much funding as possible at its schools. Various blocks make up the dedicated schools grant, and historically the East Riding chose to stick most of the money for special educational needs in the schools block—it was entirely free to do so. It said to schools, “Use your budget to deliver that.” There was practically nothing in the high needs block, because that money had been put into the schools block. When the dedicated schools grant came in, which was based on what had been spent at that time and how it was accounted for, the East Riding received among the lowest levels of SEN funding in the whole country. That was not because there was a lack of challenge, but because of how the accounting had been done.

Our high needs funding is now the lowest in England, so the East Riding has had to move funding over to try to compensate for that. The situation was unfair already. Then we moved to the £390 million the Government came forward with last year to help lower-funded authorities, but that was distributed on the basis of the schools block, one of the three blocks that make up the dedicated schools grant, and as my local authority had its money in the schools block and not the high needs block, it ended up receiving a very much smaller share of the cake.

[The Parliamentary Under-Secretary of State for Education (Mr Sam Gyimah)]

I thank my hon. Friend for bringing this debate to the House, and I look forward to all the contributions. He mentioned the £390 million that the Government put into schools’ funding to help make the funding formula fairer. I want to clarify that that has been done twice: it was done for 2014-15 and it is being done for 2015-16. We are taking, and have already taken, steps to make the funding formula fairer. In response to the point about timing made by my hon. Friend the Member for Warrington South (David Mowat), that shows our intent.

[Graham Stuart]

I am grateful to the Minister. I am also grateful for the £390 million, which was a significant amount to find to help the lowest-funded authorities. A method for distribution had to be found and, under his predecessor, a decision was taken on that, which led to certain discrepancies, though overall there was certainly an improvement.

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[Mr Gyimah]

It is in the baseline.

[Graham Stuart]

Listeners might have thought that it might not appear next year, and I would not want anyone to have that misapprehension.

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[Richard Graham]

My hon. Friend is absolutely right, but there is another aspect to this, which we must be aware of. I understand that the new Bishop of Gloucester, Bishop Rachel Treweek, the first female diocesan bishop in the land, will intervene in the House of Lords to help the F40 campaign, but she will be aware that fair funding for children across her diocese in the county of Gloucestershire will mean redistribution, which will probably arouse claims of unfairness in her previous patch in Tower Hamlets. This is a balancing act in terms of what is fair for all of us, and the Minister will have to juggle with that.

In the statement on 16 July, the Minister committed himself to making schools and early education fairer and said that he would put forward proposals in due course. I know that he will do so and that he will see the manifesto commitment simply to “make schools funding fairer” come true, but today I should like him to focus on the when, the what and the how. The when, in a sense, is the easiest bit, because the autumn statement is coming and we also have the commitment from my right hon. Friend the Secretary of State in her letter to the Chairman of the Education Committee, my constituency neighbour and hon. Friend the Member for Stroud (Neil Carmichael), which may inhibit a little what the Minister can say today.

The what will be all about the rebalancing—the winners and losers. As my hon. Friend the Member for Redditch (Karen Lumley) pointed out, one person’s fairness may be another person’s slight unfairness, but there is an absolute as well as a relative aim to go for. In addition to the what question, we have to look at the how, which is the process. It is easy for us to highlight the anomalies, but the Minister and his Department must find a solution, a process and a timeline.

The Library briefing paper contains a telling chart—exhibit A, which I am holding up, Mr Walker. In this flow diagram, there are simply too many elements. There is the guaranteed unit of funding, which was based on planned local authority spend some years ago, with three variables plus

“some subsequent additional funding for ministerial priorities.”

Then there is the dedicated schools grant, which was based on assessed levels of need plus locked-in historical decisions on spending, which I suggest led to the gap widening during the five years of the previous, coalition Government. Then there are four other grants, plus the local funding formula, in which there are 14 allowable factors, and local authorities can choose which values are actually used for each factor. That is too complicated, and I hope that the Minister today will confirm that whatever new process is introduced, it will be simpler, easier to understand and much fairer for everyone.

[Mr Gyimah]

My hon. Friend rightly touches on the point about the process. What I can say at the outset is that whatever the outcome of the spending review, there will be very careful consultation with everyone concerned, which means, I suspect, that this will not be our only debate here on fairer funding in terms of how we get to a resolution.

[Richard Graham]

I am grateful to the Minister for his clarification, which will help all hon. Members on both sides of the House. We all want to see simplicity in the process, a system that everyone can at least understand, funding that is fundamentally fairer and timing that will fulfil the manifesto commitment. The more light that the Minister can shed today, within the constraints of the upcoming autumn statement and the Secretary of State’s commitment to an early new year proposal, the more that will help us all to go back to our constituencies and our counties and say, “The Government are on the case. We hear what you are saying and we want to fix it as soon as possible.”

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[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Thank you, Mr Walker. May I say, for the benefit of those Conservative Members of Parliament who were not here in 2005 when I was first elected, just how difficult it was to take this issue to the then Labour Government? We had many meetings with the Labour Administration and I will never forget their intransigence on this issue. I am heartened to see the huge turnout of fellow Conservative MPs this afternoon and the passion with which many colleagues have spoken.

Thanks to your work, Mr Walker, and that of my hon. Friend for Beverley and Holderness (Graham Stuart), we saw changes in the last Parliament, from 2010 to 2015. As a result of the tremendous work that they and others did, we have received an extra £10 million per annum for Shropshire schools. I very much welcome the increases. However, the differences between our schools in Shropshire and the national average are still huge. It just goes to show what a terrible position we were in before the changes were made in 2010.

During the last general election, I made this the subject of my No. 1 pledge to my constituents, as I did in 2010. I believe in going to the electorate and putting in local manifestos what we will do over the next five years if we are elected to office: I am looking at my hon. Friend the Minister. On my election pledges, which all the people of Shrewsbury received, the No. 1 pledge this time around, as last time, was to use our Conservative majority—if we had one, and we do—to settle the issue once and for all and ensure that Shropshire children are no longer discriminated against as they have been in the past. I emphasise that we receive £4,112 per annum for our Salopian children, which contrasts with the average for the best-funded schools of £6,297. As we all know, some schools get £7,000 or £8,000 for each child per annum, which is more than double what Shropshire children get.

I alluded to my next point in my intervention on my hon. Friend the Member for Beverley and Holderness. If he could come round to see some of my schools in Shropshire—I would welcome his coming to visit—he would see the leaking roofs, the poor insulation, the lack of equipment, the old books and the restrictions on certain extracurricular activities. The fact that some of the parents in my constituency have to raise money through fundraising activities, such as barbecues and all sorts of other things, to buy basic equipment that is automatically provided in other parts of the country is simply unacceptable.

Buildwas primary school is right on the border between my constituency and that of my hon. Friend the Member for Telford (Lucy Allan). We are both fighting for Buildwas school, which is in a very remote rural village, to continue operating, and we hope that it will be saved through an academy programme. Some of the problems that the school has experienced inevitably boil down to a lack of funding from previous Governments. I invite the Minister to come to Shropshire at his earliest convenience, because I want him to see the leaking roofs and the dilapidated state of some of my schools. When I go to Birmingham, as I do sometimes for various duties, I see the sort of equivalents it has. It is another world, and that is completely and wholly unacceptable.

[Mr Gyimah]

I would be delighted to visit my hon. Friend’s constituency at my earliest convenience, as he requested. It is worth making the distinction between the capital needs of a school and its revenue funding needs. If there are schools in his constituency that are in need of capital, he should definitely let the Department know. There was a capital round during the last Parliament, and I envisage that there will be another one during this Parliament, to help to repair the leaking roofs of schools such as those in his constituency.

[Daniel Kawczynski]

I am grateful to the Minister, and I will make sure that all five Salopian MPs meet him to arrange things directly. I will end with an important point that has not yet been made. Although we are one of the worst funded areas in the country, Salopian schools get some of the best results in the country. That is a fascinating fact, which I do not think that many people have talked about, and I urge the Minister to think about it. How does Shropshire, despite the fact that it receives less than half what other schools get, manage to achieve such extraordinarily high levels of success? Obviously, we have some of the best teachers in the country, and I pay tribute to their dedication and hard work. However, I would like the Minister to examine the massive differences in attainment between different areas and to look specifically at those, such as Shropshire, which have been underfunded but which achieve tremendous results. We have something to learn from that for the benefit of future generations.

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[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I echo other hon. Members in paying tribute to my hon. Friend the Member for Beverley and Holderness (Graham Stuart) and the right hon. Member for Exeter (Mr Bradshaw) for securing this debate. It is a pleasure to follow so many colleagues and other hon. Members making the case so clearly for a fairer funding formula.

I come from a family of teachers, I married into a family of teachers and some have said that I ran away from teaching as a profession. I am a governor at my local school, and I pay tribute to all the hard work our teachers in Dorset and Poole put in day in, day out. However, our schools are being let down by the current funding formula. My constituency can compete with those of other hon. Members, because Dorset is in the lowest 11 authorities for funding per pupil, securing just £4,239. Poole fares even worse, as the second worst funded—not a statistic I am proud of—receiving only £4,167. It is those statistics and facts that bring me here to argue on behalf of schools in my constituency.

As others have said, such statistics suggest that the current funding formula is beyond its sell-by date. More than that, it appears to have no rationale. My hon. Friend the Member for Gloucester (Richard Graham) mentioned his exhibit A, and it shows that there is no historic rhyme or reason to the fact that some schools in Poole get the second-lowest funding, while other schools across the country get much more. Over the years, that has created an unfair situation, which does not serve our schools or our children in Poole and Dorset. There is not the level playing field there should be.

Other hon. Members have mentioned that the funding formula means there is a large disparity between schools across the country with similar characteristics, which are receiving very different amounts.

[Mr Gyimah]

indicated assent.

[Michael Tomlinson]

I am pleased to see the Minister nodding in agreement.

The F40 campaign group, of which I am a member, has set out an alternative formula, which I welcome. The formula would help my constituency by reducing the funding gap from £4,000 to just over £3,000. I could quote more facts and figures, as other hon. Members have done. Behind the numbers, however, are real individuals—real families, children and teachers—and those figures will make a difference in their lives and in their schools. In my constituency, the F40 proposals would see schools get an extra £240 per pupil—an increase of just under 5%, which is welcome. Schools in Poole would receive an extra £116—an increase of just under 3%, which is also welcome. However, I sound a note of caution: under the formula, schools in Poole would still be among the worst funded, although the changes would help to start narrowing the gap.

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[Carol Monaghan]

The hon. Gentleman makes a good point. That is what I was trying to say in my opening remarks: Scotland does not have the massive discrepancies that seem to be present in the constituencies of other Members.

[Mr Gyimah]

I thank the hon. Lady for raising two particular points about Scotland: overall funding and attainment. To put the record straight, while the UK Government protected schools funding in real terms in the previous Parliament, the Scottish Government cut funding in real terms. It is worth getting that on the record. On attainment and narrowing the gap, she will be aware of a recent independent report from the Commission on School Reform, whose members are Scottish education experts. The report raised serious questions about the Scottish Government’s ability to close the attainment gap north of the border.

[Carol Monaghan]

The Minister must have different figures from me, because across Scotland we are seeing the attainment gap reduce and pupils from more disadvantaged backgrounds being more successful in accessing higher and further education than ever before.

One of the great things this afternoon has been the positive language used about the teaching profession, which is reassuring to hear. Often teachers hear phrases like “failing schools” and “poor teaching”, and they end up being blamed for a lot of society’s problems, rather than credited for the work they do in trying to tackle the very same problems. I am reassured by what I have heard, and I suggest to all Members here today that they continue to use that positive language, because it makes such a difference to teachers.

The hon. Member for Beverley and Holderness talked about flat cash and not wanting to increase the education budget. I would argue with that. Governments have difficult choices to make, and they decide where money is spent. If education is a priority and our young people are valued for the contribution they can make to the country, we should be investing properly in education.

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[Pat Glass (North West Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Sir David. I hope my voice will last out. I congratulate the hon. Member for Beverley and Holderness (Graham Stuart) and my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing this debate. I also thank the Backbench Business Committee for making time for the debate. It is a pleasure to follow the hon. Member for Glasgow North West (Carol Monaghan), but I have one comment on her remarks. I am from the north-east of England and we used to look enviously over the border at the quality of education in Scotland and the outcomes for Scottish children. We do not do that any more.

The debate has been really interesting, especially the way in which Members have lined up one after another to say how far they are down the financial league tables. I noticed that Tower Hamlets was highlighted quite a few times. I remember visiting a couple of schools in Tower Hamlets with the hon. Member for Beverley and Holderness and the current Chair of the Education Committee, the hon. Member for Stroud (Neil Carmichael), when we were carrying out an investigation into sport in schools. We visited a couple of schools in Tower Hamlets and were struck by the huge level of problems that the teachers faced. About a third of the children were in receipt of the pupil premium, but what struck us most was that almost half of the children were the children of the working poor who did not qualify for the pupil premium, and yet in many cases their disposable income was less than that of the parents of those who did. We were told that many of the parents had two or three jobs and often did not have the time or sometimes the skills to be able to support their children in education. I do not think any of us came away thinking that the money those schools got was not needed or was wasted.

The matter has been debated many times and the coalition Government promised to address it in 2010. Like many of the things we think are easy, they are far from easy. I feel for the Minster, because this is not going to be an easy circle to square.

[Mr Gyimah]

Except with your support.

[Pat Glass]

Before the election, Labour also promised to introduce a review of school funding. We want to support the Government as they move forward with their review, but we are clear that funding has to be fair and just. It cannot simply be a recycling or shifting of existing resources within the system from those with greater needs to those with less great needs. One or two people said that children with the same levels of need must receive the same levels of funding. We support that in principle, but we want to see new money in the system.

The basic inequalities in the system go back a long way. My right hon. Friend the Member for Exeter was absolutely right when he said that its roots lie in the old standard spending assessment. I read the Hansard from the previous debate just before the election. The then shadow schools Minister, my hon. Friend the Member for Cardiff West (Kevin Brennan), said that the formula was known only to three people and

“one was dead, one had gone mad and the other one had forgotten”.—[Official Report, 10 March 2015; Vol. 594, c. 260.]

I am not sure where I fit into that, but there are advantages to being around the education system for a long time and having some degree of shared memory of all this.

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[The Parliamentary Under-Secretary of State for Education (Mr Sam Gyimah)]

It is a pleasure to serve under your chairmanship, Sir David. I thank everyone who has spoken in this rather lengthy but none the less constructive debate, and congratulate my hon. Friend the Member for Beverley and Holderness (Graham Stuart) and the right hon. Member for Exeter (Mr Bradshaw) on securing a debate on this important issue. I also thank the F40 for a long and vigorous campaign.

When I was given this job, I spoke to a senior civil servant in the Department for Education who said to me that someone was working on fair funding for schools when he joined the Department in 1991. The problem has been around for a very long time. It did not arise overnight and it bedevils many different types of authorities. This is not a partisan issue: Labour-held authorities have funding issues, as do Conservative-held ones. There are some underfunded inner-city authorities and there are underfunded authorities outside of cities. I thank all Members for the manner in which the debate has been conducted. It has not been party political; instead, we have focused on the issues in our constituencies.

[Neil Parish]

I understand the historical element, which my hon. Friend the Minister outlines well, but I have huge confidence that he will be the Minister who, after all these years, actually sorts this out.

[Mr Gyimah]

I thank my hon. Friend for his confidence in me. It feels rather strange to be urged to be “brave”, as Sir Humphrey would say.

To address the point made by the shadow Minister, the hon. Member for North West Durham (Pat Glass), if one represents a local authority such as hers in Durham, which is the 57th best-funded local authority in the country, one has the luxury of saying, “It’s difficult, but we have to do all these things.” She does not have to take the difficult decisions. She has the luxury of having a local authority that is very adequately funded, but those Members representing local authorities that have been underfunded for more than a decade, where schools are doing quite well with limited resources, are saying that it is time to rectify the situation. It is right that we listen to them and act.

Before getting into the detail of that issue, I want to respond to the point made by the hon. Member for Glasgow North West (Carol Monaghan). The Government recognise the importance of long-term investment in education to prepare children for success in adult life. In the previous Parliament, we invested more than £190 billion in our schools—a real-terms increase every year. In this Parliament, we will continue to protect the schools budget, as we promised in our manifesto. We will also ensure that the money reaches the places where it is needed, so all children in all age groups and all locations can access excellent education. We committed in our manifesto to making schools funding fairer, so that every school can support every child in achieving their potential.

The right hon. Member for Exeter made that point extremely well when he highlighted the fact that the root cause of this issue is historical funding. At some point in history—2005, I think—we froze schools funding in aspic, and whatever an authority spent the previous year became the baseline for its funding allocation. Demographics, local authorities and schools’ needs changed, but the funding formula was not updated to reflect current need.

[Mr Bradshaw]

A question has occurred to me during this debate. Broadly speaking—I know this is a simplification—Conservative shire counties had lower education funding and lower council tax, while Labour urban authorities tended to have higher education funding and higher council tax. Given the Government’s policy of capping increases in council tax, has any work been done in the Minister’s Department on the potential impact of redistribution on council tax? It would be unfair for people living in Labour authorities, which have historically had high council tax and high education spending, suddenly to lose that money through central Government, and for people in low-spend, low-council tax Tory areas to have no increase in their council tax but suddenly to have a big increase in their schools funding.

[Mr Gyimah]

As the right hon. Gentleman knows, there has to be a referendum for a council tax increase of more than 1.99%. We are talking about how central Government deal with revenue funding for schools. We have got to the point where schools’ capital needs are based on need. If the schools in a constituency have serious problems, we have a thorough process for identifying their needs and allocating funding appropriately, but we do not have a similar process on the revenue-funding side.

It is patently unfair that Knowsley receives nearly £750 less per pupil than Wandsworth, given that more pupils in Knowsley are entitled to free school meals. It is unfair that a secondary pupil with low prior attainment would attract more than £2,000 in Birmingham but only £35 in Darlington. In four local authorities they would not attract any funding at all. That is not right. The hon. Member for Stockport (Ann Coffey) spoke very clearly about that injustice.

In the previous Parliament, we took a big step. To those who say that the Government should be brave, I say that we have been brave. In an era of austerity, we invested £400 million to help level the playing field.

[Graham Stuart]

The £390 million is in its second year, and that will be the baseline. Will the Minister consider looking at the allocation again, because only a little more than half of it went to the lowest-funded authorities? If those that should not have had it have only recently received it, their pain in losing it will be less. The £390 million could be repurposed to lift up the lowest-funded authorities together. That would remove the outliers, even before we get to the national funding formula.

[Mr Gyimah]

I thank my hon. Friend for that point. I agree with the hon. Member for North West Durham that this is a complicated area. What happened with the £390 million is that local authorities whose spending was low on the high needs block but high on the schools funding formula did not see the full benefit, because the £390 million was allocated purely on the basis of schools funding. That means that any reform in this area has to take into account the different blocks of the dedicated schools grant: schools funding, high needs and early years. Some local authorities shift money among those different budgets, so we must look at this in the round.

Let me return to the difference that the £400 million has made. Buckinghamshire received a further £80 million and Cambridgeshire received more than £23 million, or £311 for every pupil. Bury, Surrey, Shropshire, Salford and more than 60 other authorities benefited from additional funding for their schools. Money was not being shuffled into Conservative areas from other local authorities. The beneficiaries of the £400 million, which is now the baseline, are underfunded local authorities. We looked at underfunding based on characteristics; we did not pick an arbitrary number.

[Graham Stuart]

Westminster was a beneficiary, was it not? I may have got that wrong. Clearly, the money was not always going to the lowest-funded authorities. Only a little more than half went to the lowest-funded authorities. There is a real opportunity to look at this again.

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[Mr Gyimah]

As my hon. Friend knows, we are having this debate because the Government want to go further than £390 million. The changes in some hon. Members’ constituencies over the past 10 years have been significant. In Dorset, the funding schools receive does not reflect the proportion of pupils eligible for free school meals, even though that proportion has almost doubled. In Lincolnshire—this relates to the point made by my hon. Friend the Member for Louth and Horncastle (Victoria Atkins)—the proportion has doubled, but the funding has not changed at all. In other areas, the number of children eligible for free school meals has gone down by 40%, but the authority still receives the same amount of funding. The distribution of funding today does not reflect the needs of our children, so it has to be changed.

It is widely recognised that the impact of the distribution is hugely unfair, as many hon. Members have said today. A child who goes to school in Trafford will attract £4,228, but in next-door Manchester they will attract £5,081. At the extremes, Wokingham—my right hon. Friend the Member for Wokingham (John Redwood) is no longer in his place—receives £4,151 for every school pupil, while Tower Hamlets receives £7,000, or 70% more. Of course, we have to ensure that Tower Hamlets receives the funding it needs, based on the characteristics of its pupils, to enable its schools to do their job, but a discrepancy of 70% or more shows that rooting the funding formula in the historical allocation has allowed things to get out of kilter.

As I said, we have made some progress, and many schools that are doing an excellent job are benefiting. I want to draw hon. Members’ attention to York, because my hon. Friend the Member for York Outer (Julian Sturdy) is here. It is one of the lowest-funded authorities in the country, yet 86% of its primary pupils and 93% of its secondary pupils are in good or outstanding schools. I congratulate the teachers in York on the excellent work they are doing. However, schools in York could do even more to help us in our mission to build a world-class education system if their funding matched the schools’ and pupils’ needs.

A system in which a school can get 50% more money for providing the same education to the same pupils just by moving from Barnsley to Hackney is not fair to schools, parents or children. To be fair to taxpayers at a time of austerity, we need to ensure that we get the most out of every pound we spend on our schools. Although we have protected the schools budget overall, we will not make the most of it until it is targeted where it is needed.

[Graham Stuart]

Perhaps the Minister is about to move on to what I am going to ask him. Can he set out the principles that will be used, so that we have some idea of the parameters that will be used to determine allocation? This will be politically challenging, so it is important that the terms on which it is done carry the widest possible support across the House.

[Mr Gyimah]

I thank my hon. Friend for his third intervention so far. The good news is that there is consensus on the need for reform, and support for how we plan to get there. Devising the new system will be a big, difficult job. There is no other way of describing it. We are being encouraged to move quickly, but also to listen; the best thing to do as we set out our proposals, soon after the spending review, is consult carefully and widely with local authorities and schools. That will be our approach.

Also, I received the letter sent to the Prime Minister from over 100 Members, led by my hon. Friend the Member for Beverley and Holderness.

[Julian Sturdy]

The Minister is doing an excellent job, as I knew he would, in setting out his case. On timing, many of the excellent schools in my constituency of York, which he mentioned, are having to dip deep into their reserves to get through these years. They simply will not have the time if we do not act sooner rather than later.

[Mr Gyimah]

I share and understand my hon. Friend’s need for urgency, but the first thing is to build consensus for reform. It is good that the National Association of Head Teachers supports reform; it recently said:

“The level of unfairness in school funding has been staggering”,

and that it welcomes the move towards fairer funding. That is echoed by the Association of School and College Leaders, which says that reform is

“long overdue and very welcome.”

Parents know that education should not be a postcode lottery. There is a lot of work to do, and I would like to see the Opposition join the NAHT, and all the other organisations calling for reform, in supporting our building of consensus for what would be a historic achievement for our schools and for constructing an excellent education system.

[Michael Tomlinson]

I am grateful to the Minister for his responses so far. However, if he cannot commit to a specific date, may I invite him to at least set out a timetable allowing our local education authorities to plan well in advance, which will help our schools?

[Mr Gyimah]

My hon. Friend tempts me to pre-empt our spending review; that would not be appropriate for a junior Minister, and would not be welcomed by the Chancellor. I will not set out a timetable, but I have said that we will not only seek to build consensus and to consult widely, but support schools through the transition and encourage efficiency to get the most out of fairer funding.

As well as reforming the funding system, we will push schools to be more efficient in their spending. In this difficult financial climate, it is even more important that schools are relentless in their drive to squeeze the best value for their students out of every pound that they receive.

[Kevin Foster]

I thank the Minister for giving away again. He is being very generous with his time to the Members who are still here to listen to his remarks. I accept that he will not set out a timetable while he is on his feet today, but is he hopeful that the matter will be resolved by the end of this Parliament?

[Mr Gyimah]

What I can say on timing is that, whatever the changes, schools need enough time to adjust and plan; I have heard that from a lot of schools. That will guide us in implementing any reforms.

[Graham Stuart]

2017-18?

--- Later in debate ---

[Mr Gyimah]

I will not comment any further on timing. It is important to focus on schools’ financial management, because good management and good attainment can go hand in hand, as demonstrated by the York example. While we will push schools to be more efficient, we will also help them to spend their funds in the way that has the biggest impact on pupil attainment. We will continue to give schools greater freedoms to make the right decisions, for themselves and their pupils, on how their budgets should be spent. We will free up schools to adopt the right structures and practices to meet their specific needs, and help them to identify the areas where they can make savings. We will help schools improve their financial expertise, share best practice and work together more efficiently.

[Neil Carmichael]

This question is not about timing; it is about consulting widely, including with multi-academy trusts and academies, because they are in this together. The Minister has mostly referred to local authorities, but we have to consider all schools.

[Mr Gyimah]

The Chairman of the Education Committee is absolutely right. When looking at the funding system, we must consider all schools, be they free schools, academies or local authority maintained schools. While on this point, I noted the tests that he outlined, and how his Select Committee will review any proposals that come forward. We will bear those tests in mind as we consider what to do over the coming weeks and months. I thank him for making them and the criteria very clear.

Let me bring my remarks to a close. Fairer funding underpins our vision for a world-class education system. To really support schools, we need to make the funding system fairer for every school and every child. Our vision is of a future in which every school in the country, whatever their characteristics and wherever they are, provides excellent education, allowing every child to succeed. I am enormously grateful to colleagues who have been campaigning hard for this over several years, and thank them for their contributions to the debate. To move forward, we want a real consensus, so I would like to see the Labour party, which did not mention fair funding in its manifesto at the last election—

[Pat Glass]

That’s not true.

[Mr Gyimah]

If the hon. Lady wants to intervene, I will take the intervention. I would like to see the Labour party come forward and support the proposals, because schools in constituencies represented by MPs of both our parties need this problem addressed. We have already protected budgets for 2016-17, and have baked in the extra funding from last year. I hope to be able to update right hon. and hon. Members on our further plans shortly. In the meantime, I encourage all those who have spent years campaigning for fairer funding to continue. We are making good progress. I hope that what we have done so far and the fact that we are willing to listen show that, at last, we are not just talking, and that the Government are ready to act.

[Graham Stuart]

It has been a pleasure to serve under your chairmanship, Sir David. What a delight this is! It was 10 years ago when I first asked a question about F40 funding to a Labour Minister, and I got a singularly inadequate reply. It was in March 2006 when I got my first debate on this subject. I called for an urgent debate in January 2007, and secured one in May 2007. This has been going on for a long, long time. The Minister and the Government are committed to delivering fair funding for our schools; that is long overdue and very welcome.

I think colleagues would like to hear more about the principles; we will perhaps do so when the Minister comes forward early in the new year—certainly by the end of January—with proposals to be consulted on.

[Mr Gyimah]

No timings.

[Graham Stuart]

We need more on the timing, because while consulting widely and seeking consensus is credible, the Government are committed to this. It does not require consensus; it requires the implementation of the manifesto promise. Seeking consensus is entirely right, but requiring it is a different matter altogether.

Then there is the element of ambition. How far are the Government prepared to go? I think it was a Treasury official who said, years ago, “Minister, the people you make happy, you never make as happy as the people you make unhappy, unhappy.” That is the problem. When we finally get the proposals, we and our constituents will grunt and say, “About time,” but there has to be redistribution; it is unfortunate that the Opposition spokeswoman, the hon. Member for North West Durham (Pat Glass), was not prepared to say that. As it is, there has been a 7% increase in the education budget in this Parliament because of the number of pupils. Given the context, there has to be redistribution. Some people will lose, which means looking them in the eye and explaining why it is fair and right that they should do so. That takes courage, but if we are going to do it, we could do with both sides of the House joining in and accepting that principle. I welcome Labour’s support for fairer funding, but it needs to be followed by the recognition of the need for redistribution.

In my final seconds, I want to comment on the contribution of the hon. Member for Glasgow North West (Carol Monaghan), the Scottish National party spokeswoman. It seems that the free university education of middle-class children, who are predominantly the most likely to go to university, has been funded at the expense of working-class kids in further education colleges, who have had their vocational opportunities stunted as a result. I do not think that the SNP has much to teach us about that, although they do seem to have more equal funding of schools, per pupil. It seems a good principle to have pretty much level funding, except when the reasons not to are overwhelming, such as higher teaching costs in London. That does not mean, however, that we need have the gross discrepancies that we see today.

It has been a great debate, and I thank all my colleagues for being here. I look forward to the Minister coming forward with proposals as soon as possible.