Schools: Funding

Lord Bassam of Brighton Excerpts

Thursday 29th November 2018 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, I congratulate my noble friend Lady Morris on her excellent plea for education and on phrasing the debate in the terms she did. She is right to say that our education service is at a crisis point, and that the Government have to make their mind up about what they want to do with education—where they want to take it and how they see the future.

The Chancellor, in announcing a budget increase, as he put it, for primary and secondary schools, made probably one of the most patronising throwaway remarks ever when he said of the £400 million that he was giving out that it was, “money for little extras”. He should have left it at “little extra”—at least that would have been more honest and accurate. It gives a primary school on average £10,000 extra and a secondary school £50,000 extra. Few of us on these Benches know of a state school that is not struggling to keep within its budget. Local schools in my area, Brighton and Hove, have long had banners outside their gates telling local residents that the average loss to local schools is roughly £200,000 a year—and parents tell me that they can tell.

Yet still the Government, in a flurry of statistics, try to explain it all away by saying that the dedicated schools grant, delivered through the new funding formula, will mean that, as Schools Standards Minister Nick Gibb, claimed:

“Core schools funding will rise from … £41bn last year, to £42.4bn this year and £43.5bn in 2019-20. This means that real terms per pupil funding in 2020 will be more than 50% higher than it was in 2000”.


What this bland assertion ignores, of course, is the truth that, as the IFS—the respected independent fiscal analysts—pointed out, the 50% increase was during Labour’s years in office, between 2000 and 2010. The IFS placed the changes in a wider financial context and stated:

“Total school spending per pupil fell … in real terms between 2009-10 and 2017-18, and will only be … 14% higher in real terms in 2017-18 than in 2003-04. This adds on the additional effect of a … real-terms cut in local authority service spending and a real-terms cut of more than 20% to … sixth-form spending per student between 2009-10 and 2017-18”.


The Government’s reaction is to retreat, as they always do, to assertions such as, “schools funding is at record levels” and that changes are part of a “historic move to fairer funding”. No doubt we will be treated to this mantra later from the Minister. He will also tell us, no doubt, that schools standards are rising and that disadvantaged pupils are doing better than ever.

Fortunately, we are blessed with independent-minded observers such as the National Audit Office. In December 2016, it reported on the financial sustainability of schools based on the Government’s spending plans. It concluded that, while the schools budget was protected in real terms, it did not provide for funding per pupil to increase in line with inflation. It also pointed out that with the increase in numbers—174,000 in primary schools and 284,000 in secondary schools—there will be a real-terms reduction when inflation is taken into account. The NAO went on to say that department estimates show that mainstream schools will have to find savings of £3 billion a year to counteract cumulative costs pressures. These they identified as pay rises, the introduction of the national living wage, higher employer contributions to national insurance and the teachers’ pension scheme—plus non-pay inflation and the apprenticeship levy. By 2019-20, this will amount to an 8% per-pupil funding cut. It is no surprise, then, that the professionals on the ground who teach in and manage our schools are beginning to feel the effect of this continued austerity squeeze.

So those are the figures and that is the theory—but what is the practice? I decided to take a look at one of our more affluent London boroughs—Barnet—to see what professionals there were saying. They believe that they are providing a world-class education for Barnet children, and they are rightly proud of their achievements, but head teachers recently wrote to Nick Gibb, and I think also met him, about school funding. They said that they are seriously concerned that current levels of funding are now seriously threatening this high-quality provision. They pointed out that 95.5% of Barnet pupils attend a good or outstanding school and that most schools in the borough are full or over-subscribed. They pointed to the cost pressures that the IFS drew out. What worries Barnet’s head teachers is the impact on the education service they run.

In their open letter to the Minister, they listed 27 areas where budget cuts are reducing the quality of education. I shall give eight items from the list: staff reductions in teaching and support posts; curriculum reduction, including languages, the arts and sport; increases in class sizes; SEN service reductions; fewer teaching assistants; ICT equipment not being replaced; reduced book budgets; less training; and reduced school building maintenance expenditure. These are not trivial impacts; they are core to a school’s activity. They stretch teachers. Heads battle with budgetary control. They report that fundraising for core educational activity has become standard practice, which displaces management and leadership time for heads and senior staff.

The responses from the Barnet heads are disturbing. All 53 reported significant issues for their schools, including budget cuts varying from £43,00 a year to £150,000 a year. Most no longer have significant numbers of teaching assistants. One head reported 20% fewer staff than five years previously. Class sizes of 35 are now not uncommon. Another school reported a contingency fund of just £1,000 to cope with emergencies within a year. This is economic educational madness. A prominent secondary head in the borough recorded that two years ago the school had a surplus of £800,000 which has now gone and that insolvency for his school is a real prospect. Of course, the things that go first are the extras that my noble friend pointed to, such as providing additional places when they are needed and all the SEN work which targets those most in educational need. In-year deficits are now commonplace in Barnet schools, overspends are standard and teaching assistant and support staff reductions are obligatory. Several schools report running without deputy heads, senior staff and the specialists needed to have a full curriculum.

I say to the Minister that Barnet is a Tory flagship borough, and I presume the Government are proud of its quality service claims. On the data recording the borough’s educational service they should be, but, like all boroughs, Barnet has vulnerable pupils and areas of low attainment. They deserve the support which is now beginning to disappear.

Young people are our nation’s future, they are its intellectual capital and, in an increasingly service-dominated knowledge economy, that will always be the case. What sort of sense does it make for us to run down IT and ICT investment when it should be rising to meet the challenges of the AI revolution? What sort of sense does it make to underinvest in our teacher workforce to lead this work at precisely the moment when we need it most and when our nation faces an uncertain economic future, where investing in that knowledge economy may well make a difference to our national destiny and prosperity in a post-Brexit world?

My noble friend Lady Morris is a distinguished educational leader and has done great service in bringing this debate forward. She has given great service to our nation in the field of education. I hope this debate brings intelligent reflection from our Schools Minister and a change of course on funding the future.

--- Later in debate ---

[Lord Agnew of Oulton]

My Lords, I entirely accept that this is an extremely difficult subject that has been kicked down the road for a long time. Doing it at a time when there are not huge amounts of additional money makes it difficult, but the system puts a floor in the bottom so that no one loses out. Of course, the debate will always be about why we are not moving the bottom ones up quicker. I met a head from West Sussex only last week—

[Lord Bassam of Brighton]

The noble Lord is being extremely courteous and helpful to the House, but what he does not seem to be doing is explaining why it is that all these schools, in experiencing what he is saying are increases in budgets, are also experiencing reductions and losing the ability to provide the level of service that they have provided in the past. The Barnet study is a good case in point, because it is not just one isolated school; it is all the Barnet schools. While I am here, I recommend to the noble Lord that he uses Lockets next time, rather than worry about Tunes.

[Lord Agnew of Oulton]

I thank the noble Lord for that very important piece of advice. There is a very complicated answer to the noble Lord’s question. It goes right back to the 1990s, to a system of training called COSMOs that was given to head teachers then. That training has not been continued and has lapsed, but what it showed senior leaders in the 1990s was how to most effectively allocate resources in their schools. A lot of those skills have been lost. I will cover some of the individual questions that have been raised—I have some figures for the noble Lord, Lord Bassam, on Barnet, for example.

I now turn to high needs. We recognise the concerns of the noble Lord, Lord Addington, and my noble friend Lady Eaton about funding for children and young people with high needs. We are also concerned about provision for excluded pupils. We have produced a range of support for local authorities to help them best use the resources they have available, including a high needs benchmarking tool by which they can compare spending. We have increased overall funding allocations to local authorities for high needs by £130 million last year and £142 million this year. We will increase this further next year, by approximately £120 million. In fact, high-needs funding will be more than £6 billion next year and will have risen by £1 billion since 2013. Every local authority will see an increase to their high-needs funding per head of the population of two to 18 year-olds this year and next, with underfunded authorities receiving up to 6% more next year than in 2017-18.

The noble Lord, Lord Knight, and the noble Baroness, Lady Massey, asked about mental health care for young people. We are very concerned about that—one would be callous to say anything else—and are putting more resources in. Our Green Paper last year set out proposals to support schools to put in place senior leads for mental health, to introduce new mental health support teams working in or near schools and colleges, and a trial of a new four-week waiting time for NHS children and young people’s mental health services. As came up in a Question earlier this week, the NHS itself is committing £2 billion more to mental health, which will include, over the next several years, adding 8,000 mental health professionals to the system.

The noble Lord, Lord Addington, asked about improving teaching for, and increasing awareness of, the kind of challenges that he is so passionate about. We are increasing the level of resources available to help teachers support children with SEN. We have a special resource in the initial teacher training modules. We have online resources for teachers and the department has also contracted with the Whole School SEND Consortium to deliver a programme to equip schools to support children with SEND, which includes dyslexia.

The noble Lord, Lord Addington, was also concerned about education, health and care plans. We carried out a survey last year that showed that 66% of parents are satisfied with the process. This is, of course, a new process and one we aim to improve.

Turning to efficiency and the points raised by the noble Lord, Lord Watson, on high pay, I completely share his concern about high pay in academies. The very first thing I did when I took on this job just over a year ago was to tackle it. We went after about 213 trusts, I think it was—more than 200 trusts—and since then 56 have stopped making those sorts of payments, for various reasons. That is a campaign that I will continue. I completely support the noble Lord in calling out those who do that.

On school resource management more generally, we recognise that schools have faced cost pressures. I want to be clear to the House that we are not in denial about that. The idea that I operate in a citadel is a dream that I can aspire to, but the real world is rather different, and that is why we are providing extensive support to schools to help get the best value out of every pound. We recently launched a strategy setting out the support, current and planned, that we have designed to help schools reduce costs. It provides practical advice on how to identify potential savings from their non-staff spend that can be put back into teaching to get the best value. To put that in perspective, we have a non-staff spend of about £10 billion a year, and we believe that £1 billion of that could be pulled out of the system over the next three or four years.

We know that marketplaces can be complex, leading to schools facing higher costs than they need to. The initiatives in our schools buying strategy aim to reduce this complexity when procuring goods and services. For example, we recently launched an agency supply teacher deal to provide schools with greater transparency on costs. We now have 34 national deals to help schools save money on items they buy regularly.

The noble Lord, Lord Storey, referred to my comments at the Schools & Academies Show last week—he is obviously very thorough in his research. The reason I used a somewhat strong or controversial approach there is that, for a year now, I have been going round forums such as that show giving endless speeches pointing out that we have these deals available for schools. In the audience for the address he referred to were 200 head teachers and chief executives. I asked those who had used our deals to put up their hands. Out of the 200, five put up their hands. When I arrived in this job a year ago, I wrote to 1,300 chief executives of trusts and told them about the deals that were in place. I said, “If they are no good, please tell me”. How many responses did I get? I did not get one response. I understand the pressures in the system, but the system also has to respond to us. Since we are trying to help them improve efficiency, they need to tell us how we can help them more. That is why I made those comments the other day: it was not to be glib. I am a huge fan of spreading best practice and if there were schools in that audience that were doing interesting, innovative things, I want to let other schools know about that. It is important to put that into context because the trade magazines made fun of me, which of course is grist to the mill in this job.

We have created a benchmarking website for schools. This allows them to compare their spending with that of similar schools elsewhere in the country. We continue to improve this service and recently introduced a trust-to-trust comparison functionality. This will help school and trust leaders to identify if and where improvements can be made.

I am conscious of time. On teachers’ pay and pensions, we have recently responded to recommendations made by the School Teachers’ Review Body to confirm the 2018 pay award for main scale teachers. It is our aim that schools continue to attract high-quality recruits—I take on board the many comments about recruitment challenges—and this award will support them to do that. We will see a 3.5% uplift to the main pay range, 2% to the upper pay range and 1.5% to the leadership pay range. In the main pay range, it is important to stress for noble Lords, this is the biggest percentage increase since 2011.