National Funding Formula: Schools/High Needs

Julian Sturdy Excerpts

Wednesday 14th December 2016 Commons Chamber

[Justine Greening]

I quoted what the current position was. The hon. Gentleman will no doubt be interested to look at the details for his local community, once we release them, when this statement to the House is finally finished.

[Julian Sturdy (York Outer) (Con)]

Schools in York have some of the lowest, if not the lowest, per pupil funding in the country, with some schools in London receiving more than £3,000 per pupil more, leaving schools in York on the brink of making some very difficult decisions, despite delivering excellent education. What message can the Secretary of State send to schools in York that have been waiting for this announcement for far too long and want to see it implemented as soon as possible?

[Justine Greening]

I think this will be a much fairer approach for all schools, including those in York, and we are taking steps to introduce it rapidly over the remainder of this Parliament, which is good news.

Free Childcare for 3 and 4-year-olds

Julian Sturdy Excerpts

Tuesday 12th July 2016 Westminster Hall

[Julian Sturdy (York Outer) (Con)]

The hon. Lady is making some powerful arguments. I point out to her that one of the pilot schemes is in York. I have worked closely with the nursery providers in my constituency. Because of the funding stream and the hourly rates, there was a lot of concern among those providers to start off with about whether they would opt in to provide the second 15 hours, but the local authority and the Department for Education worked together closely and have now persuaded 60% to 70% of those providers to opt into the scheme. Does she not agree that we can persuade providers to opt in as long as there is good will from the Department and local authorities to deliver the scheme?

[Karin Smyth]

I certainly agree. That shows the importance of good pilots and good working nationally and locally, and we want to see that with the other pilots, which will start this year.

Private and voluntary providers reported to the Public Accounts Committee that the amount they are currently paid for providing free childcare is not enough to cover their costs, so in some cases they feel the need to charge parents for additional hours or obtain other sources of income to meet those costs. Providers can of course choose whether to offer parents free childcare, so there is a genuine risk that many businesses will simply choose not to offer the new entitlement because doing so could reduce their opportunity to charge parents for hours outside the entitlement. As hon. Members have said, it is important for that issue to be looked at, because different situations exist across the country.

Maintained settings—nursery classes and nurseries run by schools—tend to operate fixed morning or afternoon sessions and are less likely to offer additional chargeable hours, so their ability to offer the new entitlement is limited. That disproportionately affects children in disadvantaged areas, simply because those settings are more likely to operate in such areas. I hope the Minister will be able to outline how the Department will address the challenges of ensuring that there are enough people with the right skills to work in the sector in the years ahead. I also hope that he can reassure me that the Department will be able to use the pilots that will begin this year to test providers’ capacity to meet the expected demand for the increased entitlement. He may also want to explain how that will be done and how evaluation will be carried out, given that there is just 12 months between the start of the pilots and the scheduled full roll-out of the new entitlement, and I would welcome his thoughts on how the Department will ensure prior to the 2017 roll-out that the pilots have had genuine influence.

My third area of concern is the high cost of childcare. I know from my constituency that childcare fees present a real challenge for many working parents, as I am sure many hon. Members will agree. I have been contacted by parents who have been informed of some quite significant fee increases—up to 30%—being imposed by their private nurseries. Bristol already has some of the most expensive childcare outside London, as the Bristol Women’s Forum has highlighted, and I agree with the forum that childcare is an infrastructure issue and needs to be considered as part of our economic thinking. Indeed, the Women’s Budget Group in Bristol has indicated that 84% of the cost of universal free childcare will be recouped through taxes and reduction in welfare benefits.

High childcare fees are a key reason why the offer of 30 free hours is so important to so many working families and why I support that offer, but many parents have reported that some providers are offering the free entitlement only if parents also pay for the additional hours, and the charity Gingerbread receives calls from parents whose childcare providers have put conditions on the free offer. That contravenes the Department’s statutory guidance for local authorities, which states that they should ensure that

“if providers charge for any goods or services, this is not a condition of children accessing their place.”

The Department has acknowledged that issue, and I hope that the Minister will be able to explain what progress is being made on identifying the scale of the problem and how the Department plans to address it to ensure that those who are least able to pay do not miss out through such reverse means-testing.

My fourth and final area of concern is about measuring the impact of the offer to ensure that the taxpayer is getting value for money, which is why the Public Accounts Committee held an inquiry on this subject. As someone who is passionate about the value of investing in early years—I am a firm believer in the Labour Government’s Sure Start programme, for example—I am concerned that the Department’s most recent evaluations of the effectiveness of early years education and childcare are based on the academic outcomes of children who started early years education in 1997. I was surprised and alarmed to find that the Department had no routine data to assess the impact of its investment in the early years. That must be remedied, since such data must play a key role in helping to shape future policy. If the Department does not know what works well and how to get the best bang for its buck, taxpayers could be left short-changed. Since the Department appears to lack sufficient current data to measure the impact of free childcare, I hope the Minister will be able to explain, along with his responses to the other issues that I have raised, the steps that he is taking to bring its assessments up to date.

Oral Answers to Questions

Julian Sturdy Excerpts

Monday 7th March 2016 Commons Chamber

[Karen Lumley (Redditch) (Con)]

2. What progress the Government have made on implementing provision of 30 hours of free childcare for working parents.

[Julian Sturdy (York Outer) (Con)]

4. What progress the Government have made on implementing provision of 30 hours of free childcare for working parents.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

16. What progress the Government have made on implementing provision of 30 hours of free childcare for working parents.

--- Later in debate ---

[Mr Gyimah]

My hon. Friend is absolutely right. Families in deprived parts of Redditch will see £5,000 a year as a result of the 30 hours of free childcare. If they need further support, they can get it through the child tax credit system. The 30 hours of free childcare will help families with the cost of living, enable them to work more hours and give children the best start in life.

[Julian Sturdy]

I very much welcome the fact that one of the pilot schemes is in York. I congratulate the Minister on all his work on that. As the Minister knows, there is some concern among nursery providers over the future funding levels, driven by the disparity between the amount local authorities pay. Will the Minister consider future ring-fencing to avoid top-slicing by local authorities? Will he also consider visiting nurseries in my constituency to see how the pilot is working?

[Mr Gyimah]

I should like to reassure my hon. Friend that later this year we will be consulting on an early years national funding formula. As part of that, we will set a firm expectation on local authority top-slicing to ensure that the record investment being made in childcare is allocated fairly and reaches providers on the frontline. I am particularly impressed by the innovation in childcare brought about by the local authority in York, which is why we chose it as one of our early implementers. I would be delighted to visit again.

Childcare Bill [Lords]

Julian Sturdy Excerpts

Wednesday 25th November 2015 Commons Chamber

[Nicky Morgan]

I shall go on to talk about the hourly rate. I shall be publishing the findings of the funding rate review, but as part of the funding formula review, we want to ensure that as much money as possible goes to the front line.

[Julian Sturdy (York Outer) (Con)]

The Secretary of State is right to refer to the fairer funding formula, which is vital to nurseries. She will probably come to this later, but what measures is she introducing to guarantee that local authorities will pass on all the extra funding to nursery providers, and will not top-slice it?

[Nicky Morgan]

I will come on to that, but my hon. Friend is absolutely right. As I have said, we want as much money as possible to go to the frontline, and that will be one of the issues that we will raise as part of the funding formula review.

--- Later in debate ---

[Nicky Morgan]

Part of the reason for having the funding formula review, which is part of the wider review of school funding, is to ensure that we talk to the local authorities, and the other bodies that receive the money, to find the best ways of doing this. In my opinion, that should involve maximum transparency so that people know how much money is being given by the Government, how much the local authority is receiving and how much is being passed on. That would enable the childcare-providing businesses and the families who were potentially going to be paying additional costs to know exactly how much money was not making it through to the frontline. We need to have that review and ensure that we get contributions from across the country.

[Julian Sturdy]

Is this new money going to be ring-fenced? I am a bit uncertain about that. I had assumed that it would be ring-fenced specifically so that it could go to nursery providers.

[Nicky Morgan]

The money for childcare providers is paid to local authorities as part of something called the dedicated school grant, and it is obviously paid for the provision of childcare. This goes back to the point I have just made about transparency. We need to know exactly how much of it is being spent and how much is reaching the frontline. In this case we are talking about childcare providers, but this also applies to the other money that local authorities receive for their education budgets.

Let me turn to the funding review clause, which was added to the Bill in the other place. Now that we have carried out a substantial funding review and acted on its findings, we want to get on with implementing free entitlement. However, the first clause in the Bill, which aims to establish an independent funding review before the Bill comes into force, will put early implementation at risk. Despite claiming to be on the side of working parents, Labour peers were willing deliberately to delay these important measures by asking for a further funding review.

I appreciate that the hon. Member for Manchester Central and other Opposition Members might be feeling a little embarrassed as the Chancellor has comprehensively debunked all their scaremongering and doom-mongering of recent weeks about education funding. She now has the opportunity to redeem herself by backing the Bill and helping us to overturn the amendments that seek to delay the implementation of the extended entitlement. If she does not, then I do not think working parents will look kindly on her attempts to delay their access to more free childcare.

The Government deliver on their promises, so the Bill intentionally places the duty to secure 30 hours of free childcare on the Secretary of State. Local authorities are very successful in delivering the first 15 hours of free early education for all three and four-year-olds, with a take-up rate of 96%. The Bill places the duty to secure free childcare on the Secretary of State, but I will discharge it through English local authorities, which are best placed to ensure that working parents are able to access their free entitlement.

The Government are committed to working with local authorities as we develop the delivery of the programme now, through the early implementer stage from September 2016, and beyond that into full roll-out of the system from September 2017. We have been working closely with the Local Government Association and I would like to thank it for the work it has done with us and for its co-operation. About 1,800 local authorities and providers have already come forward to register their interest in taking part in the early implementer pilots. There are huge opportunities through the early implementers to test capacity, flexibility and innovation, and to make sure that all eligible children, including those with special educational needs, are able to access the 30 hours offer.

As part of early implementation, we particularly want to encourage innovative approaches to providing flexible childcare for working parents whose children are disabled. I am clear that early years providers should be able to meet the needs of all children in their care. In the previous Parliament, the Children and Families Act 2014 delivered the most significant reforms to the special educational needs and disability system for 30 years, putting early identification and integration at its heart. We are committed to continuing to make a real difference for families through inclusive early years provision.

We also want to encourage providers to offer the free hours at the times of day that will help working parents with their busy lives and offer flexibility to those working outside of nine-to-five. That means delivering flexible, full-day childcare, which is the type that parents often need. The Government recognise that the need for childcare does not end when a child starts school. That is why we are also going to give more working parents something the best schools already do. We will give parents of school-aged children the right to request childcare in the form of breakfast and after-school clubs or holiday care at their child’s school.

School Funding

Julian Sturdy Excerpts

Thursday 5th November 2015 Westminster Hall

[Julian Sturdy (York Outer) (Con)]

It is a pleasure to serve under your chairmanship, Mr Walker.

I pay tribute to my hon. Friend the Member for Beverley and Holderness (Graham Stuart) and to you, Mr Walker, for all the hard work on this issue. I think it was some eight years ago that my hon. Friend the Member for Beverley and Holderness first had a debate on fairer funding for schools. They say that some things in Parliament take time to mature. I know my hon. Friend is maturing with distinction, but let us hope that his eight-year campaign is drawing to a close. Since he first raised the issue eight years ago, sadly, an entire generation of schoolchildren in York have been short-changed on the education funding they deserve.

Although I initially welcomed the Government’s additional £390 million of funding in June 2014, the announcement was fatally undermined by its frankly woeful and simplistic implementation. Restricting the additional funding solely to the schools block element failed to recognise the position of many poorly funded local authorities, such as mine in York, which have historically been greater users of special educational needs resources. The result of this implementation is that some schools that already receive generous per-pupil funding have received yet more. I know that the Minister is well aware of that, and I really do have confidence that, over the coming weeks, he and the Department for Education will deliver the much-needed new funding formula, which we have to deliver.

I want to illustrate what this means for schools across my constituency. How is it fair that schools in the City of London receive block funding of well over £8,000 per pupil, whereas schools in York receive barely over £4,000 per pupil? Schools in York receive less than half of the amount received by those London schools. York has dropped from being the 23rd worst-funded local authority in the country to the 7th—a situation that is simply manifestly unfair.

I wanted to focus on the situation faced by two schools in my constituency, Fulford school and Manor Church of England academy, but in the interests of time I will focus on Fulford school. Fulford is a co-educational comprehensive school, taking pupils from across the south of York. Despite having excellent GCSE and A-level results, Fulford is one of the worst-funded schools in the local authority. The school also receives a very low level of pupil premium funding, which, as hon. Members will know, is calculated on the basis of deprivation and low achievement. The same factors are taken into account in the local authority’s funding formula, as dictated by national guidelines. That further compounds the problem, as some schools receive double funding for such criteria while others receive less. This also serves to reduce the resources available to schools such as Fulford, and has an impact on the materials that can be provided to pupils, as well as limiting the courses available to them. Teacher contact time and staffing ratios have also been affected, placing greater pressure on teachers’ workloads, particularly in high-achieving schools such as Fulford.

The school’s headteacher, Ms Savage, has concerns that this will impact on the retention of her best teachers, who have worked so hard to help my constituents’ children achieve exceptional results. Fulford has been able to avoid redundancies and more serious cuts through additional funding allocated for rising pupil numbers. However, that is simply unsustainable in the long term. As a result, Fulford is heading towards a budget deficit, despite being recognised by The Sunday Times as one of the best financially managed schools in the country. This story is not unusual. The headteachers I have had the pleasure of meeting across my constituency are struggling with the unfairness of the funding formula. This cannot continue.

Children come from all walks of life, but the one thing they have in common is the right to a good education. The only fair way to achieve that is through a national funding formula. I hope that the Government will deliver on their manifesto pledge.

--- Later in debate ---

[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.

Free Childcare and Nursery Providers

Julian Sturdy Excerpts

Wednesday 24th June 2015 Westminster Hall

[Julian Sturdy (York Outer) (Con)]

I beg to move,

That this House has considered free childcare provision and nursery providers.

It is a privilege—[Interruption.]

[Mr Peter Bone (in the Chair)]

Order. I am sorry to interrupt. Would Members leave the Chamber quietly, please?

[Julian Sturdy]

It is a privilege to serve under your chairmanship for what I think is the first time, Mr Bone, and to have secured this debate.

As was made clear in the Queen’s Speech, the Government are introducing measures to help working people by increasing the provision of free childcare. The announcement was welcomed by many people up and down the country and in my constituency, and it provides us with a great opportunity to launch a full review of childcare funding.

I secured a debate in this Chamber on nursery funding back in 2013, in which I explained that one of the main reasons for the continuing rise in childcare costs is the fact that nursery providers have to cross-subsidise the free entitlement funding provided by the Government. I stated that although the Government are the biggest procurer of nursery places, they are the worst culprits when it comes to paying for the places they procure. I am sorry to say that little has changed since then. For years, free provision has been subsidised by providers and parents due to a lack of adequate funding.

Doubling provision should benefit parents in my constituency and across the country. However, there is a danger that not implementing the change properly will lead to a more expensive system and more expensive childcare from the outset. The free hours could ultimately harm the very people the policy is supposed to help.

The Government have promised to include in the Childcare Bill a proposal to double free provision for three and four-year-olds in England. The current allowance is 570 hours of free early education or childcare a year, which works out at 15 hours a week for 38 weeks. It is thought that up to 600,000 families could benefit from the doubling of the provision and save as much as £5,000 a year. The change is due to come into force in September 2017, although there will be pilots in September 2016.

I have two children of my own, so I am fully aware of how expensive childcare can be. The cost of childcare is one of the biggest barriers that the UK’s 2 million single parents face to finding and staying in work. I therefore want to make it clear that I welcome and support the policy. At the same time, however, I want to offer a word of caution about the policy’s implementation and the impact it could have on nursery providers.

Since the announcement in the Queen’s Speech, I have been approached by several owners of nurseries in my constituency, who have all been keen to get clarity about exactly what the policy will mean for their businesses. Among them were the owners of Station House children’s day nursery in Dunnington and of Polly Anna’s nursery in Haxby. Both providers see the benefits of such a policy, but they agree that providers will be able to offer the increased number of hours only if the funding covers the cost of provision. In many areas, it does not.

Over the past few years, I have had the privilege of visiting a number of nurseries in my constituency—Little Green Rascals near Elvington, Sunshine day nursery in Huntington, Tiddlywinks in Osbaldwick, Quackers in Copmanthorpe and Polly Anna’s nursery in Haxby, to name but a few. Having met the owners of those nurseries and kept in contact with them over various funding issues, it is clear to me that they do a tremendous job. Nurseries carry out an essential service for parents and families, not just in my constituency but across the country. However, that essential service is increasingly under threat as a direct result of the funding issues.

As we all know, parents in the UK receive help with their childcare through free early education. In England, central Government allocate money to local authorities through the early years block of the dedicated school grant, with an estimated total spend of £2.2 million a year. However, there is a great disparity across the country in how much is spent on childcare by individual local authorities. Therein lies the problem. The National Audit Office found that free entitlement varied from £2.78 to £5.18 an hour, and that the national average was £3.95. My constituency receives only £3.38 an hour from City of York Council. The sad truth is that funding for the 15 hours a week of free provision falls well short of the cost. To be precise, the shortfall is about £800 a child, which results in nurseries running at a loss for those 15 hours. They therefore have to subsidise that loss through the price of childcare outside the free entitlement hours.

Following my previous debate, which centred on those issues, I secured a meeting with the former Minister to raise my concerns face to face, alongside a group of local nursery providers from York. The Government have been aware of the problem for some time. The Minister has been proactive in his discussions with nursery providers, and has met providers from my constituency. Some positive news is starting to come out, including the announcement that the Minister will oversee a funding review of the entitlement, which is due to start in the next few weeks.

I warmly welcome the Minister’s commitment to raising the hourly funding rates paid to providers for places. However, the review is being undertaken at a time when costs to nursery providers are set to increase further, with pension auto-enrolment responsibilities coming in for many small and medium-sized nurseries. The pressure increases when the payment for funded hours is delayed. More than 40% of local authorities are paying more than a month after the start of term, although, as we all know, the law requires them to pay within 30 days.

I am acutely aware that the burden of business rates and VAT is continuing to push up the cost of childcare, which constrains the ability of nurseries to offer more places. The average annual business rate paid by nurseries is almost £16,000, which is why I welcomed the intervention of the Department for Communities and Local Government. In January, it wrote to all English local authorities to ask them to consider granting business rate relief to childcare providers. Local authorities have had that power since the Localism Act 2011 came into force, and the Government will fund 50% of any discretionary relief schemes that councils introduce.

Following the DCLG’s announcement, I wrote to my local authority, City of York Council, to ask it to consider granting business rate relief to childcare providers in the area. Sadly, it refused. Interestingly, when the chief executive addressed the National Day Nurseries Association conference earlier this month, she reported that she had written to every local authority in England on the issue, but had been told that none would be implementing business rate relief for nurseries, which I find extremely disappointing.

Although there are political differences over childcare policy, there is broad support for the current approach of both supply-side and demand-side subsidies. However, compared with many other developed countries, the public funding of childcare in the UK is complicated to say the least. It is complex and expensive to administer for Governments and complex for providers and parents. I therefore believe that the policy to double free provision for three and four-year-olds provides a perfect opportunity to launch a full review of childcare funding and set in place the changes that will ensure simplicity, progressive levels of support, quality—that is absolutely key in this field—and accessibility.

Take-up of the current 15 hours of free provision for three to four-year-olds is at 96%, but it is much lower for two-year-olds. That is because some providers have opted out because they believe that the hourly funding rate is not financially sustainable. Many nurseries operate complex cross-subsidy mechanisms, and they rely on working parents of three and four-year-old children to purchase extra hours on top of their existing 15 hours of free provision. As I have made clear throughout the debate, I have sympathy with providers regarding underfunding. I hope that the upcoming funding review led by the Minister will bring meaningful reform.

Only quality provision helps narrow the gap between disadvantaged children and their peers. The owner of Polly Anna’s nursery in Haxby in my constituency told me that when he opened his nursery in the early 1990s, only doctors and accountants could use it; it was unusual for women to go back to work. Now we have flexible working, and free childcare has opened up day care to a range of families. Doubling free provision will only add to that trend, but it can be successful only if it goes hand in hand with a full review of childcare funding.

Money is allocated to local authorities through the dedicated schools grant. For three and four-year-olds, the rate per pupil is largely determined by historical precedent; it is not based on the characteristics and needs of the children. Early years funding should be brought more closely in line with schools funding, whereby money is allocated on the basis of a larger number of criteria, which include pupil numbers, deprivation and attainment to name a few. That would ensure that funding matched children’s needs and the cost to providers of providing early education. In addition, we could consider a national formula with two rates—one for London and one for the rest of England—similar to the funding formula for two-year-olds, which is fairer and more transparent. Local authorities receive a flat hourly rate per child of £4.85, supplemented by an area cost adjustment in places where wages are higher. That would be a much clearer funding system and would help to streamline the number of complex formulas in place.

Overall, although childcare represents a significant outlay to parents, it is important to remember that by its very nature it will always be expensive. It is not fair to suggest that high childcare costs are simply the result of providers charging high fees to hard-pressed parents. The reality is more complex. Childcare should never be provided on the cheap, and we must ensure that measures to make it more affordable do not compromise its quality. For me, that is crucial. Although successive Governments have increased help with childcare costs, parents in Britain still spend a higher proportion of their income on childcare than parents in most other developed countries. On top of that, some childcare providers struggle to break even. All that is indicative of a childcare system that is not working.

I view the proposals to double free childcare provision as an opportunity to fix these long-standing problems once and for all. We have a chance to make a real change to help not only nursery providers but parents who use such facilities, and I hope the Government will grasp it with both hands. I am encouraged by what I have heard from the Minister in our previous conversations on the issue.