School Funding

Alex Chalk Excerpts

Wednesday 25th January 2017 Commons Chamber

[Mike Kane (Wythenshawe and Sale East) (Lab)]

For the first time in a generation, schools will face spending cuts to their budgets—[Interruption.] Right out of the gate, the Secretary of State is chuntering. In her authority area, that equates to a 15% cut, with £13 million coming out of her schools’ budgets by 2020. I look forward to campaigning in her constituency on this issue.

The Department expects schools to find £3 billion of savings in this Parliament to counteract cumulative cost pressures, including pay rises, the introduction of the national living wage, higher employer national insurance contributions, contributions to the teachers’ pension scheme and the apprenticeship levy, as the hon. Member for Kingston and Surbiton (James Berry) and Labour Members said. The hon. Gentleman is happy with the national funding formula, but I have to point out that his schools will receive an overall cut of 12% in this Parliament. We are talking about an 8% real-terms reduction in funding per pupil in this Parliament.

The Department regularly compiles a list of future policy changes that will affect schools, but it has no plans to assess the financial implications for schools of these changes. We have no assurances that the policy is affordable within current spending plans without adversely affecting educational outcomes. The Government are leaving schools and multi-academy trusts to manage the consequences individually. The Department has clearly not communicated to schools the scale and pace of the savings that will be needed to meet the expected cost pressures.

The proportion of maintained secondary schools spending more than their income increased last year from 33% to 59%—[Interruption.] No matter what the right hon. Member for East Devon (Sir Hugo Swire) says, this Government have racked up a £1.7 trillion debt on their watch and now want to pass on part of that debt to our school system. The Department expects much of the savings to come from procurement and the introduction of shared services. Changing procurement and shared services requires strong leadership, clear plans for achieving savings, effective risk management and support from stakeholders. That leadership is clearly lacking among the Government Members. The Minister himself has said that he is confident that pages of guidance on the Department’s website will provide enough support for schools—it will not.

[Alex Chalk (Cheltenham) (Con)]

Will the hon. Gentleman give way?

[Mike Kane]

I have literally seconds left.

As the National Audit Office has suggested, school leaders who do not have support are likely to make decisions that make the teacher retention crisis worse. The NAO went on to say that the Government’s current

“approach to managing the risks to schools’ financial sustainability cannot be judged to be effective or providing value for money”.

It is important to recognise the impact that the required efficiency savings will have on staff. We expect already unsustainable workload pressures to increase as staff efficiencies eventually start to bite. Moreover, the size of the savings that schools will have to find will lead to worse educational outcomes, and the biggest impact will be felt by those in the most deprived areas and those with special needs.

We know that staff costs represent any school’s largest expenditure—74% of schools’ budgets are spent on staff—so it is not hard to see that to save money over the next few years, schools will inevitably end up cutting back on staff. That will have a knock-on effect on workload, morale, class sizes and the breadth of the curriculum that schools can offer. All this is happening at a time when we are expecting a 3% increase in the number of children entering school.

A bad situation is compounded by the national funding formula. Some Conservative Members, who really missed the point, had been expecting “jam tomorrow” from the formula, which was a manifesto commitment, but now they are waking up to the reality that the schools in their constituency will not benefit from its introduction. Hardly any area is left unscathed. In their excellent speeches, the hon. Members for The Cotswolds (Geoffrey Clifton-Brown) and for South Cambridgeshire (Heidi Allen) said that the funding formula was not the point; the point was the cuts and pressures faced by schools.

I ask the hon. Member for South Cambridgeshire to speak to her hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), who completely missed the point. The House will have been astonished by the slap in the face for northern teachers, who are apparently not ambitious enough for their pupils, and that is from a Government who introduced the Weller report on raising standards.