Core School Budget Allocations

Tuesday 17th October 2023 Commons Chamber

12:34

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

(Urgent Question): To ask the Secretary of State for Education if she will make a statement on the 2023-2024 core school budget allocations.

[The Minister for Schools (Nick Gibb)]

As the Government confirmed in a written ministerial statement yesterday, the Department for Education has corrected an error in the notional allocations of the schools national funding formula for 2024-2025. Those allocations were originally published and notified to the House on 17 July 2023. However, the Department has subsequently uncovered an error made by officials during the initial calculations of the national funding formula. Specifically, there was an error processing forecast pupil numbers, which meant that the overall cost of the core schools budget for 2024-25 would be 0.62% greater than allocated. The Department therefore issued new national funding formula allocations on 6 October to rectify that error as quickly as possible.

The permanent secretary has apologised for the error in writing to both the Chair of the Education Committee and the Secretary of State. The Secretary of State has instructed the permanent secretary to conduct a formal review of the quality assurance process surrounding the calculation and quality assurance of the NFF, with external and independent scrutiny. Peter Wyman CBE, the chair of the Institute of Charted Accountants in England and Wales, will lead the review. Improvements have already been identified to ensure that similar mistakes are not made.

I would like to reassure the House that the error does not affect the overall level of school funding, which remains at £59.6 billion for 2024-25. The Government continue to deliver, in full, the core schools budget, which includes funding for mainstream schools and for high needs. As I said, it will remain at £59.6 billion in 2024-25—its highest ever level in real terms and, of course, in cash terms. That is a percentage increase of 3.2% compared with the current year of 2023-24. Through the schools national funding formula, average funding is £5,300 per primary school pupil and £6,830 per secondary school pupil in 2024-25, up from £5,200 and £6,720 respectively in 2023-24.

Schools have not yet received their 2024-25 funding, so the correction of this error does not mean adjusting any funding that schools have already received. Likewise, the error will not impact on the publication of a dedicated schools grant in December, or on when schools will receive their final allocations for 2024-25. The 2024-25 high needs national funding formula allocations, which fund provisions for children with complex special educational needs and disabilities, are also unaffected by the error, as are other funding streams outside the NFF, including the teachers’ pay additional grant announced in the summer.

I also clarify that the recalculation of the NFF for 2024-25 does not affect the affordability of the 2023 teachers’ pay award. There has been no change to the funding that was promised as part of the pay settlement in July and which the unions agreed meant that the pay award is properly funded. The Government recognise that the correction of the NFF error will be difficult for local authorities and frustrating for some school leaders, which is why the Department has rectified the error as quickly as possible.

[Mr Speaker]

Order. The Minister has taken three, nearly four, minutes. I hope that he is coming to the end of his remarks.

[Nick Gibb]

This is my final sentence, Mr Speaker.

The Department is working closely with school stakeholders, including unions, to communicate this change and support schools and local authorities.

[Bridget Phillipson]

Thank you for granting this urgent question, Mr Speaker. Since the House returned from the summer recess, Ministers have been forced to come here twice, first to explain how this Government left school buildings in such a parlous state that many are now at risk of collapse, and now to explain that the Conservatives are taking £370 million out of schools’ budget allocations for next year. It is shambolic, it is chaotic, and our children deserve a lot better. I am glad that Ministers have listened to Labour’s call for an independent investigation, but what is the timeline for this review? How will the review be reported to the House, and how will Members have a chance to scrutinise its findings?

We need to know much more, too. We need to know why, when the mistake was first identified in September, it was not until after the Conservative party conference in October that headteachers were finally notified. What support will schools now receive to ensure that children’s education does not suffer as a result of Conservative incompetence? Rather than blaming officials, will the Secretary of State—wherever she is today—finally take some responsibility?

We all know that mistakes happen, but this is not a one-off; this is part of a much bigger pattern of Conservative mismanagement right across the Department and right across Government for 13 long years, and it is our children who are paying the price. It is Conservative mismanagement that brought us the RAAC—reinforced autoclaved aerated concrete—crisis in our schools, that kept children at home as Ministers failed to resolve industrial action for months on end, and that is now seeing record numbers of teachers leaving the profession, attainment gaps widening and standards falling. It will fall to the next Labour Government to reset the relationship between Government, families and schools, to show once again that it is Labour that is the party of high and rising standards in our schools.

[Nick Gibb]

The hon. Lady refers to RAAC. We took the only decision that any responsible Government would take when the evidence changed on RAAC in school buildings that surveyors had previously assessed as not in a critical condition and we discovered it was not safe for pupils to stay in those schools. There are 174 schools so far confirmed with RAAC, which we have published details of, and we are taking urgent action to make sure that no child or member of staff in our school buildings will be at risk from this reinforced autoclaved aerated concrete—which, by the way, has been around through successive Administrations, both Labour and Conservative, since the 1950s and 1960s.

The hon. Lady refers to £370 million being taken out of the school budget. No money has been taken out of the school budget. It is £59.6 billion next year, and it will remain at £59.6 billion. What would be irresponsible would be to increase funding for schools by 0.62% solely as a result of an error by officials. That is not how Government spending systems work. It has to go through the proper value for money procedures, and that is how we always conduct our allocation of taxpayers’ money.

The hon. Lady talks about standards in schools. We are rising in the international tables. We are fourth in the world for the reading ability of nine-year-olds, according to the recent progress in international reading literacy study, or PIRLS, of pupils of that age. We are rising in TIMSS, the trends in mathematics and science study, and we are rising in PISA, the programme for international student assessment. That is in direct contrast with what happened under the last Labour Government, when we were falling in those PISA tables.

[Mr Speaker]

We come to the Chair of the Select Committee.

[Mr Robin Walker (Worcester) (Con)]

I am grateful for the apology and the letter that the Select Committee received on this issue, which we have published today. Clearly, it is deeply unfortunate that this error took place. It is a result of a complex and very difficult to understand funding system that provides schools with a lack of transparency as to how their funding works in the long run.

We were elected on a manifesto to deliver a fair national funding formula. There were plans in place to legislate for the direct funding of schools. While I welcome my right hon. Friend’s confirmation that this does not in any way affect the high needs block or take money out of the overall school budget, can he update the House on plans to deliver that direct funding formula, which, along with multi-year funding settlements, the Select Committee and the sector have been calling for over many years?

[Nick Gibb]

Yes, it is unfortunate, for which officials and Ministers have apologised. It is frustrating, particularly for local authorities that have to conduct their calculations—it was an error based on the coding of the pupil numbers.

My hon. Friend mentioned moving to the direct funding formula. That is the intention of the Government, and the latest edition of the national funding formula and high needs technical briefing does say that we want ultimately to get to direct funding. Many local authorities are moving their local funding formula ever closer to the approach taken in the national funding formula.

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

I saw a tweet to the Minister earlier this morning saying that one man’s error is another man’s total cock-up—I do not know whether that is technical language, Mr Speaker. The fact of the matter is that he is the longest-serving Minister in any Department in any Government for many years, and on his watch we have seen the demoralisation of the education sector in our country, with good people leaving. It is the Gibb factor. Why does he not resign and talk to people?

[Nick Gibb]

If I may say so, Mr Speaker, that was an extraordinary outburst. Today, we have the highest number of teachers in the profession—some 468,000—which is, by the way, 27,000 more than when we came to office in 2010. In Labour-run Wales, we are not seeing that rise in the number of teachers.

[Sir David Evennett (Bexleyheath and Crayford) (Con)]

Naturally, this error is very disappointing, but I welcome that the Department has rectified it speedily. What steps is my right hon. Friend taking to work with school stakeholders to communicate the change and to support schools and local authorities?

[Nick Gibb]

My right hon. Friend is absolutely right: it was unfortunate. As a Minister, when officials gather outside my office to tell me great news about an error that has been made, my instinct is always to find out what the error is and rectify it as quickly as possible. That took about four weeks, compared with the normal six weeks to calculate the NFF, and we then published the figures as rapidly as possible. That is the approach that the Department and I have taken.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Earlier this year, the Sutton Trust reported that half of school leaders said that they had already been forced to cut back on trips and outings. That includes cultural trips to concerts and plays, which often have a profound effect on young people who would not otherwise be able to attend those events. The average secondary school is now being told that it will have around £58,000 less to spend than was announced in July—whatever the Minister says, those schools will have planned on the basis of that money. I am concerned that even fewer young people will now be able to access the benefits of cultural trips. What is the Minister doing to make sure that young people in state-funded schools still have access to cultural experiences that enrich their education?

[Nick Gibb]

The figures published in July were indicative figures. They are used by local authorities. Once the October census comes out with the pupil numbers, they then apply their local formula to those figures. That is the allocation that schools use for their budgeting, and that happens around December.

Over the period between 2021-22 and 2024-25, school funding has increased by 20%, so there has been a very significant increase. I agree with the hon. Member about the importance of cultural activities in schools, which is why we have a cultural education plan that is being worked on at the moment.

[Sir Julian Lewis (New Forest East) (Con)]

One reason why this Minister has been in his post so long is that successive Prime Ministers have judged him to be rather good at his job. For the benefit of the House, can he confirm that the civil servants who discovered the mistake made it known to Ministers at the first possible opportunity, and that Ministers made it known to the public at the first possible opportunity? Does that not reflect credit on our parliamentary democratic system?

[Nick Gibb]

I am grateful to my right hon. Friend for his kind comments. He is absolutely right: as soon as we knew about the error, I wanted to make sure that we were doing everything we could to rectify it and find a solution to the problem that officials and the Department had caused. That was my approach, and that is why we recalculated the whole of the national funding formula notional allocations as soon as we could and published that detail on 6 October.

[Daisy Cooper (St Albans) (LD)]

For far too long, the Department for Education has been plagued by a litany of failures that have had a devastating impact on children, their parents and teachers. We have had the mutant algorithm and the RAAC roofs, we have a crisis in our SEND system, and now we have a bit of good old-fashioned incompetence. Does the Minister agree that it is high time that the Secretary of State offered an apology to the British public for all this, or does he think that—in her words—we should thank her for doing a flipping good job?

[Nick Gibb]

The last flippant comment was not necessary; these are all serious issues. Issues such as RAAC have been around in our school system since the 1950s and 1960s. When we discovered new facts and new evidence, we took swift action. There will always be almost no notice; when we have evidence, we cannot just sit on it until a more convenient time to announce it. We had to announce it straightaway. Every school with confirmed RAAC has a caseworker allocated to make sure that we are keeping children safe and keeping them in face-to-face education. So far, we have identified 174 schools with RAAC and in the vast majority of those—all but 23 schools—all the children are still in face-to-face education.

In terms of special educational needs, we published a Green Paper and an implementation plan to improve the experience of parents and children with special educational needs in our school system.

[Bob Blackman (Harrow East) (Con)]

I thank my right hon. Friend for the update. Clearly, when formulas such as this are being used, it is important that they are tested first to see the results, before those are issued to the schools and other people are involved. Will he confirm that the position is that, even after this error has been corrected, all schools in this country will have enough money to fund the teachers’ pay award agreed by the Government?

[Nick Gibb]

My hon. Friend is right. I have to say that my experience of this particular team in the Department is that they are one of the best teams I have dealt with. This was an error made by officials. They have owned up to it and we have corrected it. It does not affect school funding at all, and it relates to the next financial year, 2024-25. It certainly does not affect this financial year, 2023-24, and the funding of the pay award. Incidentally, it is the highest pay award for 30 years. The 6.5% pay award for teachers is fully funded, with an extra teachers’ pay grant of £525 million this year and £900 million next year. It is totally unaffected by this error.

[Daniel Zeichner (Cambridge) (Lab)]

Cambridgeshire schools are some of the lowest funded in England, and they will now receive £4.4 million less than they expected. The Minister will know that local authority officials and schools will now have to spend time recalculating their budgets. What will he do to compensate them for the time they are spending on that?

[Nick Gibb]

The situation is unfortunate for local authorities, which will have been spending time calculating their school budgets on a local authority basis. That is why we wanted to get the recalculation of the figures done as soon as possible and out to local authorities. Cambridgeshire is funded in the way it is because we base funding on the level of deprivation in our communities. We have targeted a greater proportion of the schools national funding formula towards deprived pupils than ever before. In total, about £4.4 billion, or 10% of the formula, will be allocated according to deprivation factors in 2024-25. If an area has fewer children from disadvantaged backgrounds than other areas, that will of course be reflected in its overall ranking for local authority funding.

[Vicky Ford (Chelmsford) (Con)]

Last week I visited Meadgate Primary School, which is one of the many good and outstanding schools in my constituency. I am sure the Minister will recall precisely how many good and outstanding schools there are today, compared with 13 years ago. Meadgate Primary School is part of an academy trust of seven schools, and across the schools this situation could account for a £70,000 difference between what they had calculated they might expect and what they will receive.

That is obviously concerning, but also concerning is the number of children now coming in who would have had an education, health and care plan done when they were at pre-school, but did not get one because of the pandemic and now face delays. Given that high needs funding has doubled, will the Minister raise this backlog in assessments with the children’s Minister, my hon. Friend the Member for Wantage (David Johnston), to try to make sure that our primary schools are getting the support they need today for those children with SEND?

[Nick Gibb]

I pay tribute to my right hon. Friend for the great work that she did as children’s Minister in the Department for Education. She is right that the proportion of schools judged good or outstanding has increased. In 2010, it was 68%, and today that figure is 88%. We are not happy with that—our focus is on the remaining 12%. Every local school in our country should be a good or outstanding school.

My right hon. Friend makes an important point about education, health and care plans. She is right that the funding of the high needs budget has increased considerably over the past few years, and I will raise the issue of the backlog in EHCPs with my hon. Friend the children’s Minister. I should say that we are building significant numbers of new free special schools, so that there are more places available for children with severe special educational needs.

[Tony Lloyd (Rochdale) (Lab)]

We know that a child growing up in an area of deprivation is on average likely to do less well through our school system. I take the point that the Minister made about extra funding for deprivation, but will he accept from me that we know that money makes a difference? When will this Government get a grip on the problem of deprivation?

[Nick Gibb]

Deprivation and disadvantaged children have been the core driving force of all our reforms since 2010. We are spending record amounts of money on school funding—£59.6 billion is the highest ever in cash terms, in real terms and in real terms per pupil. Before the pandemic, we had closed the attainment gap between disadvantaged children and other children by 13% in primary schools and by 9% in secondary schools. That has been undone by the pandemic, but we are determined to close that gap again. All the reforms that led to that closure are still in place, and we are confident, particularly with the £5 billion of recovery funding and the tutoring programme, that we will close that gap once again.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I welcome my right hon. Friend’s answers today, and I thank him for his leadership and his ownership of this issue, which is not his fault. He has approached it in exactly the right manner, as my right hon. Friend the Member for New Forest East (Sir Julian Lewis) said. I welcome that we are continuing to deliver the core schools budget in full, not just for mainstream schools, but for high needs. Will my right hon. Friend the Minister set out what the percentage increase for those areas will be in 2024-25, compared with this year?

[Nick Gibb]

On the increases in funding last year and this year, funding is increasing by £3.9 billion in 2022-23 and by £1.8 billion in 2024-25. When we combine that with the £4 billion increase we had between 2021-22 and 2022-23, that is a 20% increase in cash terms over that period.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

I wrote to the Secretary of State at the beginning of August, asking for a meeting to discuss a series of special educational needs funding issues in Harrow. The Minister will be aware that special educational needs are one of the many pressures on school budgets across the country. They certainly are a significant issue in Harrow. Can he explain specifically how much schools in Harrow will now not receive, compared with what they had expected to receive? Will he encourage the Secretary of State to respond to my letter, and to do so with generosity?

[Nick Gibb]

I say first to the hon. Member that no funding is being reduced in Harrow. All areas will be receiving significant increases in school funding. The error is about the allocation figures—the notional figures—for 2024-25, and those have been corrected. On special educational needs, we have increased special educational needs funding significantly over the past several years, because of the pressures that local authorities are facing with increased numbers of EHCPs. We are taking a number of measures to help address that, and I will of course ensure that the hon. Member has his meeting in the Department as soon as possible.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

This is yet another error and case of incompetence under this Government. The average primary school is expected to be more than £12,000 worse off next academic year and the average secondary school £57,000 worse off than under the July publication. How will the Government help headteachers in Slough and across the country deal with the extra stress and pressure on account of this error, especially when they have to make difficult decisions on staffing and additional support for those pupils who need it?

[Nick Gibb]

The actual allocations to schools happen in December each year in the normal way, so this situation will not affect the figures that local authorities have informed schools they will be receiving. Those are based on the October census of pupil numbers and the application of the local formula. We then fund the local authorities on the basis of the national funding. The record funding of £59.6 billion equates to an average of £5,300 per primary school pupil and £6,830 per secondary school pupil.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Minister’s argument in a nutshell is, “You didn’t have the money, so you’ve not lost it.” But the point is that local authorities received the notional funding allocation and were beginning to plan based on that figure given by the Government. In places such as Stockport, Tameside and Manchester, the figures that are going to be withdrawn from those areas are not insubstantial. I politely say to the Minister that his argument is incoherent—I will grade him D-minus. And his maths is appalling—I will grade him U. Can I suggest he goes into detention and fixes this matter, because schools in Tameside, Stockport and Manchester desperately need that cash?

[Nick Gibb]

The funding allocated for local authorities is ringfenced. This is an allocation and calculation issue—it is not that they have received the money—and we corrected it as soon as the error was made. Any Labour Members in the same position would have reacted in precisely the same way that I have.

[Rachael Maskell (York Central) (Lab/Co-op)]

This blunder is going to cost schools in York dear. We are already in the bottom 20 in the country for school funding and in the bottom third for high needs. I had a meeting with parents on Friday night, and 150 of them were in tears and on their knees about the SEN funding. The formulas are just not working in areas where there is low funding. Will the Minister bring forward the fair funding formula to ensure that children in my constituency with SEND have fair funding allocated to them?

[Nick Gibb]

I understand the hon. Lady’s points, and I share the concern of parents with children with special educational needs and disabilities. We do want to make sure that local authorities are properly funded for children with those special needs, which is why we have increased funding for high needs very significantly over the past few years. Over £10 billion is now allocated to local authorities for those children. If we look at the national funding formula, we see that 10.2% of the formula—£4.4 billion—is on the basis of deprivation factors, and 17.8% is allocated on the basis of additional needs. These are very significant sums both in the national funding formula for mainstream schools and the extra money we are giving to local authorities for high needs.