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The Minister for School Standards (Mr Nick Gibb)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for Southend West (Sir David Amess) on securing this important debate. I am grateful for this timely opportunity to discuss the details of the proposals for introducing a new national funding formula. I have known my hon. Friend for as many years as he has known me, and I assure him that I do not intend to palm him off with fluffy platitudes.
We are now more than halfway through the consultation process on these proposals, and we have heard views from across the school sector and from all parts of the country. Throughout the consultation period, we are considering all representations from local authorities, teachers, governors, parents and hon. Members in this House. We are listening carefully so that we can ensure that the final national funding formula is the right one.
Many Governments have avoided introducing a national funding formula. We have grasped the nettle. It could be argued that in a time of fiscal restraint, we should have avoided introducing a national funding formula, but we think it is right to introduce such a formula and are proceeding with the consultation with the intention of introducing that formula. It is an open and transparent consultation, which is why it includes illustrative allocations for every school and local authority in England, calculated on the basis of figures for 2016-17, to help schools and others to understand the impact of the proposals. Those allocations are only illustrative.
The new formula will apply, as my hon. Friend the Member for Southend West said, in 2018-19 on the basis of a soft formula, which means that the local school forum can alter the allocations within the funding envelope for Southend. We have already announced that for 2017-18, no local authority will see any fall in its funding levels.
We believe that what we are proposing achieves the best balance between the different elements of the formula—between the core funding for every pupil and the extra funding for those with additional needs, and between the funding that relates to pupils’ characteristics and the funding that supports schools to meet their fixed costs. Those are complex trade-offs, which is why we are consulting for a full three months on the proposals.
The single biggest element of the national funding formula will be a basic amount that every pupil attracts to the school. That will account for around three quarters of the total schools block—about £23 billion of the total £40 billion. We are clear that significant funding should be directed through the formula to children from disadvantaged backgrounds who face entrenched barriers to their education. Schools that are educating those children should receive extra resources, so that they can support those children to do as well as their peers. We propose to spend more through the formula than is currently spent on pupils who start school with low prior attainment compared to their peers, so that they can get the extra support they need to catch up.
Overall, we want to maximise the amount of funding spent on factors that relate directly to pupils’ so-called characteristics. Our proposed lump sum of £110,000 per school, regardless of its size, is just below the current national average if we aggregate the 150 local formulae in the country. It is significantly below the sum that Southend uses locally, but we still believe that the lump sum is an important element of the formula. Our proposals recognise that all schools need a fixed element of funding that does not vary with pupil numbers and characteristics, to provide a level of certainty. One reason—it is not the only one—why Southend schools face these percentage reductions is the difference in the lump sum figure.
The decisions we have made in balancing the formula will certainly have different effects across the country, depending on how they differ from decisions that local authorities have taken on their local formula. The anomaly is in the local formulae, rather than in what we are proposing in the national formula. In the case of Southend, the current local formula uses a higher basic per-pupil amount than the figure we propose in the national funding formula. Southend also concentrates funding for deprivation more narrowly. In the national funding formula, we want to spread deprivation funding more broadly and further up the income spectrum, so that we can target additional funding to pupils who are not necessarily eligible for free school meals but whose background may still create a barrier to their education.
We know that some areas and schools will disagree with the balance we have struck in the proposals. That will be the case particularly in areas where the proposed national funding formula will mean a lower level of funding than the current baseline for 2016-17, such as in Southend. We are keen to hear views on whether we have got that balance right and welcome any additional evidence through the consultation. We will look to change our proposals where the evidence shows clearly that the balance needs to shift.
I took on board the advice from my hon. Friend the Member for Southend West, which will trump any advice we receive from experts across the country. He argued for a de minimis funding level of £4,800 per secondary school pupil, and his advice will be considered as part of the consultation process.
While there will be different views about the precise balance of the factors, there is certainly a consensus, as my hon. Friend the Member for Rochford and Southend East (James Duddridge) confirmed, that we need a national funding formula and a fair funding system that gets resources to where they are needed most. No matter where children live and whatever their background, prior attainment or ability, they should have access to an excellent education. We want all children to be able to reach their full potential and to succeed in adult life. That ambition can be achieved only if we have a fair approach to funding, whereby funding relates directly to children’s needs and the schools they attend.
Under our proposals, the funding system will be clear, simple and transparent for the first time. Similar schools will be treated in the same way right across the country. We will no longer see the wide range in funding levels that we see now, and it will no longer be the case that the amount a child attracts to their school depends on where they live or their school’s location. Our proposals will end the postcode lottery in school funding and extend opportunity across the country.
I want to give my hon. Friend the Member for Southend West a minute to conclude at the end if he wishes; if not, I will plough on. I am hugely grateful to have had this opportunity to look closely at how we can ensure fairer funding for our schools. It has been very useful to hear from my hon. Friends for Southend West and for Rochford and Southend East and to take time to consider the important issues that they both raised.
Sir David Amess
The thing that slightly disturbs me in what my hon. Friend the Minister slipped in is that it seems as if he is blaming the local authority for the disparity in the figures.
Mr Gibb
I am making the point that we are aggregating 150 separate local formulae into one national funding formula, which will inevitably mean there will be changes. That is particularly inevitable, mathematically, if we then illustrate the new formula on the basis of existing figures. However, I understand my hon. Friend’s points. As I said, these are illustrative figures and will have no impact on 2017-18. The overall level of school funding, at £40 billion, is the maximum amount we have ever spent on schools. It will rise in the years ahead. Schools will receive more money if their pupil numbers go up and if their pupil characteristics change. We expect school funding to be at about £42 billion by 2019-20. That does not mean to say that the formula will not have the impact we are illustrating; they are illustrative figures only.
Question put and agreed to.