Education Funding: Devon

Lord Swire Excerpts

Wednesday 18th January 2017 Westminster Hall

[Sir Hugo Swire (East Devon) (Con)]

I beg to move,

That this House has considered education funding in Devon.

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

The situation for schools in Devon that will result from the proposals set out in the Government’s consultation is of great concern to us all. As a member of the f40 Group, Devon has historically been one of the lowest-funded education authorities in the whole of England. At the moment, in education funding, it stands in 143rd place out of 150 local authorities. Devon received a schools block unit of funding allocation of £4,346 per pupil in 2016-17. The national average was £4,636, which means that there is a shortfall for Devon of £290 per pupil, or £25.5 million for all 88,065 pupils in the local authority. For those listening to the debate who are not as informed as you are, Mr Hanson, it is worth pointing out that, when I speak about Devon, I exclude the unitary authorities of Torbay and Plymouth, but no doubt Members who represent both places will want to contribute to the debate.

The current situation is manifestly unfair, not only for pupils in Devon but for teachers and headteachers, whose performance will be judged against that of other schools throughout the country. Devon Members of Parliament have been campaigning for a fairer funding settlement for many years, so this is not something new. I have been a Member of the House since 2001, and other Devon MPs have served for longer. I think it is fair to say that we have all been campaigning, throughout the Labour years when money was channelled away from rural areas into Labour heartlands, under the coalition Government and under the Conservative Government. Quite frankly, under this Government, we expect better.

Cost pressures, combined with the necessary fiscal consolidation, have had a significant cumulative effect on school budgets. Let me give a few examples of such pressures—other Members will cite others. Areas such as my own, East Devon, have experienced significant population growth because of the often required growth in house building and the incentives for it that there are now. The inevitable resulting growth in pupil numbers has had and is having a huge impact. The education services grant, which previously gave authorities and academy trusts money to fund their schools’ services, has been cut. The national living wage, which has absorbed much of the increase in social care funding—we have debated how much in the House—has had the same effect on education, with an increase in staff costs. Initial analysis suggests that the apprenticeship levy could cost Devon County Council as much as £424,000. The change in the SEND—special educational needs and disabilities—code of practice, which enables people with special educational needs to remain in education up to the age of 25, has added huge pressure, especially considering the increase in the average cost of specialist independent provision. Of course all Members welcome the change, but it needs to be properly funded. Devon County Council proposes to reduce funding to all schools by £33 per pupil for two years to make up for the high needs block shortfall; Devon’s high needs block has increased from £53 million in 2014 to £61 million in 2017-18.

It is not that some of those measures and developments are not welcome—we are very positive about some of them—but it is important to recognise that schools are now expected to do more with less, which inevitably leads to cuts, redundancies or increased class sizes.

The effect of these pressures on contingency reserves is being seen in the level of carry-forwards being forecast for maintained schools in Devon. We have a huge backlog, particularly in respect of the maintenance of many of our primary schools. In 2015-16, contingency reserves were £21.1 million, but in 2016-17 the figure is estimated to be £9.6 million. That is hardly much of a contingency reserve, given the number of schools we have across the county.

A number of headteachers in my constituency of East Devon have said in letters to me that, as a result of these pressures, there is

“a very real probability that our schools can no longer continue to sustain high quality provision of education and essential support for every pupil without the urgent necessity to take some very undesirable as well as far-reaching decisions to reduce costs in order to balance the finite resources available. Sadly, the implications of these decisions will undoubtedly impact upon the children in our care, including those from some of our most vulnerable families, and these will ultimately manifest further into the wider community.”

Since they are in one of the lowest-funded education authorities in the country, schools in East Devon were looking forward to the new funding formula, especially considering the year-long delay. The review and the subsequent public consultation are certainly welcome, and I encourage constituents to respond to it. It is important to emphasise that the proposals are not final and that they are subject to the consultation, which I understand runs until the end of March; the Minister may wish to enlighten us further on that.

I do not want to get into a bidding war between different authorities, but I would like to highlight some of the misunderstandings about funding that have arisen between us and our neighbours in Cornwall. The foreword to the Department for Education’s consultation on the national funding formula notes that

“a primary school in Cornwall teaching a pupil eligible for free school meals with English as an additional language would receive £3,389, whereas if the same child was at a school in Devon the school funding would be £4,718.”

That difference is mainly explained by the amount allocated directly to schools by each authority to support disadvantaged pupils or those with additional educational needs. Devon County Council delegates a much larger proportion of funding directly to primary schools. For example, using the free school meals deprivation factor alone, Devon allocates £1,378, compared with Cornwall’s £340. However, Devon still trails Cornwall in funding per pupil; Cornwall’s average funding per pupil is £4,355, which is £9 more than Devon’s average of £4,346. If Devon got the same rate as Cornwall, we would receive an additional £792,000 for education across the county.

If implemented, the national funding formula proposals will result in 212 Devon schools, or 62%, gaining; 129 schools, or 37%, losing; and two schools, or 1%, remaining the same. The proposals will reduce Devon County Council’s overall schools funding by £500,000 for the first year, when the Department for Education proposes transitional arrangements to prevent schools from gaining or losing considerably in one year and to ensure that the national budget can cope with the changes throughout the country. When the transitional arrangements are removed, the proposed changes will result in a relatively slight increase of £1.4 million, or 0.38%, in Devon’s overall funding for schools. The Minister may point to that and say that Devon will be a net winner, but a 0.38% increase is woefully insufficient to meet the rising cost pressures. It will not even meet the 0.5% increase in the apprenticeship levy. We need to go beyond the headline figures.

Illustrative funding under the national funding formula in the first year of transition would see 15 schools in East Devon gaining funding but 20 losing out. On average, that would mean a 0% change in the amount of school funding for East Devon. That includes all my secondary schools in East Devon losing funding: Sidmouth College, Exmouth Community College, Clyst Vale Community College, the King’s School and St Peter’s Church of England Aided School. How can it possibly be fair to reduce the level of funding available to schools in East Devon, a part of the country that has been historically underfunded?

The headteacher of the King’s School, Rob Gammon, has said that these cuts would have a “considerable” impact, especially considering the other rising costs. The chair of governors at Exmouth Community College, the excellent Councillor Jill Elson, has also expressed concern. The school is already one of the biggest in Europe. It is certainly—I hope the Minister will confirm this—the biggest secondary school in England; if it is not the biggest, it is the second biggest. It has an excellent headteacher in Tony Alexander, who has done magnificent things in that place. The school has found savings of more than £l million per year over the past five years, and it has now been asked to increase its pupil numbers to 2,900 by 2020.

Similarly, the headteacher of Sidmouth College, James Ingham-Hill, has expressed his “bitter disappointment” following the publication of the proposals. He said that

“without a significant rise in funding over the next few years, class sizes will need to rise to unprecedented levels and standards are bound to fall in all underfunded areas of the country.”

He also said that the proposed formula

“leans heavily towards measures of prior attainment. Devon has a high standard of pupil attainment in primary schools, so the county’s secondary schools will also lose out from a formula that penalises this success.”

This Government talk about reintroducing or expanding grammar schools to allow those who are good to get on, but at the same time they seem to be introducing a national funding formula that penalises at secondary level parts of the country that have high levels of achievement at primary level. That seems to contradict entirely what we, as a Government and a party, are seeking to do. What they are saying is that the less an area achieves at primary school level, the more money it will get at secondary school level—in other words, let us tell all our primary headmasters in Devon to lower standards, lower attainment and lower the exam results because more money will be made available to secondary schools. That is a perverse incentive that has no place in any kind of logical, joined-up thinking.

Currently, schools in Devon face a triple whammy. One is the historical underfunding. I look forward to the speech by the right hon. Member for Exeter (Mr Bradshaw). I hope that he will not be too party political, otherwise Conservative Members will need to point out the educational gerrymandering that went on under Labour and the expensive private finance initiative that has saddled primary schools, particularly in Exeter, with an almost unsustainable weight of debt. That went on for many years under “old Labour”, as we must now call it, so I hope that he will approach this in the spirit of being a Devon MP, not the only, rather diminished red beacon in the south-west.

I think that we would all agree across the House that the Minister needs to go back to the drawing board and look again at the national funding formula in order to get this right. The Government must take a holistic approach to the issue and fully consider not only the historical funding factors—I have not yet said anything about the huge amount of money that Devon County Council has to come up with every year just to get children to school. I think that Yorkshire’s bill was a bit higher than ours, but it must be about £25 million that we have to come up with to get children to school. I have not even touched on that cost this morning. I have been talking about what happens when pupils actually get to school, if there are going to be schools.

Therefore, the Government must take a holistic approach to the issue and fully consider not only the historical funding factors but the current pressures on education budgets in order ultimately to give schools in areas such as mine a real financial boost. Fairer funding has been promised by many Governments, of all persuasions, many times, and it is my hope and belief that this will be the Government who finally deliver.

Having been a Minister in the Government from 2010 to 2016, I am acutely aware of how easy it is for Back Benchers of all parties to demand more funding from the Government. I am equally aware of the quite appalling financial situation that we inherited in 2010. This country simply cannot go on a financial spending splurge, which would saddle our children and our children’s children with ever more debt, particularly at the same time as we are renegotiating our relationship with the world outside the European Union. It would be absolutely wrong, counterproductive and irresponsible in the extreme to adopt some of the spending proposals, which seem to change fairly regularly, that Her Majesty’s loyal Opposition come up with from time to time. So I am not suggesting that.

What I am saying is that, within the spending envelope that the Government have set out, we want fairness. I believe that all Members in this Chamber this morning, across the party divide, would agree that, for too long Devon, as a county, has lost out in terms of educational funding. We have waited and waited and waited for the new review of the situation, in the expectation that finally that will be recognised and our children, our teachers and the other staff in education will receive a fair and properly funded settlement. On the face of it, I have to say to the Minister that that does not appear to be the position we are in. I say to him gently, as south-west MPs come together perhaps more regularly than we have in the past, that it was the south-west that delivered a majority for this Government in 2015. It is the south-west that often considers itself to be an overlooked part of the country in terms of spend and infrastructure. It is the south-west and south-west MPs who, together, will not put up with being overlooked any more. We have come together this morning to say, “Let’s look again at the review, let’s get it right and let’s get a fair deal for Devon.”

[Several hon. Members rose—]

--- Later in debate ---

[Sir Hugo Swire]

The first thing on which we can all be agreed is that we are delighted to see the Minister back in his job. At one point he had an enforced holiday from the Front Bench; his proper place is on the Front Bench, doing what he is doing for education. It may not seem like it, but he can be assured that he is largely among friends this morning.

The Opposition spokesman referred back to the halcyon days of the Governments of Mr Blair and Mr Brown. I gently point out to him—he was not in the House at that time—that Devon certainly did not prosper in terms of schools funding in those days. He talked about how a Labour Government stopped water coming through the roof. Unfortunately, they did not stop the economy going through the floor. We are picking up the pieces, and, as I said at the beginning, we must be realistic as to what we can afford, given the appalling legacy we inherited.

I think the debate has been constructive, thoughtful and indeed insightful. I agree with the Minister that we all have the same eventual aim. This is an extraordinarily challenging time for the United Kingdom, given the great educational achievements of Asia, for instance, especially in mathematics and science. If we are to turn out a generation of British people who can compete in a highly competitive world, we will have to do that better. That is informing the Government’s thinking, but we must ensure that that is fair as well as ambitious.

I say to my hon. Friend the Minister that west country Members of Parliament have a history of being fairly independent-minded, and I think he will have learned from this morning that that tradition continues. Indeed, there are those of us who will be looking carefully at the Government’s proposals to see whether we can back them in terms of representing the best interests of our teachers and constituents.

This is one of the rare occasions in Parliament on which we want to hear more of the C-word—that is, of course, consultation. If the consultation is genuine, the Minister would do well to meet the Devon Association of Primary Headteachers—we would like him to come to Devon, or we can bring them all here—to hear at first hand how the changes will affect us in the county of Devon. With that in mind, I will end a few seconds early to give the Minister extra time to go back to his Department, consult his officials and come up with a deal that is fairer for the people of Devon.

[Mr David Hanson (in the Chair)]

We have about 30 seconds until the next debate and I hope that the Minister for that debate will arrive shortly. May I say it has been a pleasure to listen to the debate? As a former resident of Plymouth and an employee of Plymouth and South Devon Co-op many years ago, I found it interesting to hear the debate.

Question put and agreed to.

Resolved,

That this House has considered education funding in Devon.