School Funding: North-east of England

Alex Cunningham Excerpts

Wednesday 26th April 2017 Westminster Hall

[Mrs Trevelyan]

As the hon. Lady knows, I support the USO and campaigned very hard to ensure that we got it into the Digital Economy Bill. I speak as someone for whom 1 megabit is still a very good day in my house. It is still a challenge for many of my constituents whose children need to do their homework online, but we are getting there. We have kicked the system into a more proactive premise, but I agree that getting access across the board is vital. It will be no good for my constituents to see Newcastle with superfast broadband at 100 megabit or 1 gigabit, because we still cannot download a basic file to do homework. We need to ensure that the universal service obligation spreads across the nation to every home.

The hon. Member for Washington and Sunderland West raised the issue of the apprenticeship levy, which for small schools in Northumberland is proving to be problematic because councils have been given the freedom to pass the levy fee on. It is an issue for a small school that suddenly got a bill for £10,000 a few weeks ago and will not take up the opportunity of an apprenticeship, and I very much hope the Minister looks at it in more detail.

[Alex Cunningham (Stockton North) (Lab)]

Schools in my area have contacted me about the apprenticeship levy. The hon. Lady says that the local authorities have the ability to pass the levy fee on to schools. Local authorities in my area have suffered tens of millions of pounds-worth of cuts. Does she expect them to pick up the bill or does she think the Government should offer a concession or do away with it for schools?

[Mrs Trevelyan]

The question is how the levy is used. For some of my larger schools the apprenticeship levy is a reasonable fee to pay because they will have the opportunity to benefit from apprentices and will increase their cohort of staff. We need to be a little more flexible and encourage councils to think more constructively in how they deal with the levy.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) on securing this debate. I share her sentiments about my hon. Friends the Members for Hartlepool (Mr Wright) and for Middlesbrough South and East Cleveland (Tom Blenkinsop).

I, too, am immensely proud of the progress made in our schools during the last Labour Government. The money ploughed into nurseries and primary schools in particular reaped benefits. I remember one secondary headteacher telling me that more and more children were arriving at his school better equipped, with higher levels of numeracy and literacy than ever, ready for the secondary school curriculum. As the hon. Member for Berwick-upon-Tweed (Mrs Trevelyan) said, some of that improvement has been sustained, but that is because of the tremendous base that the Labour Government created in schools during their time in office. Funding has not been at the levels needed in recent times, and even parents are worried. The gains made over a generation are in jeopardy.

Ann Harland from Billingham wrote to me about her worries that her child’s school, Prior’s Mill Church of England Controlled Primary School in Billingham, faces an effective budget cut of £86,576 over the next four years. That is the equivalent of a couple of teachers or perhaps a few classroom assistants. That picture is repeated across the Stockton borough.

In 2015-16, the block allocation per pupil for Stockton-on-Tees schools was £4,487, compared with £4,612 nationally. That figure has stayed the same in Stockton since 2010, while nationally it has increased. During a schools funding debate in January, the Schools Minister admitted that schools are facing cost pressures, but stated that funding reforms are not about the overall level of school funding or cost pressures, but about ending the postcode lottery and making funding fairer. I agree that funding should be made fairer, but other factors need to be taken into consideration when considering reform. If the new formula is fairer, why do Stockton children get less than the average?

Of the 13 secondary schools in the borough, six face a cash cut of up to 2.9%, while the others, with one exception, expect an increase of less than 1%—Northfield and Our Lady and St Bede get a whopping 0.1% and 0.2% respectively—but that is not the whole picture. As was said, the proposed national funding formula does not take into account other elements, such as inflation, staff salary increases and the increased cost of other resources that the school may need.

Taking all the pressures into account, the vast majority of schools in England are likely to see real cuts to funding per pupil over the next three years. What will happen? Teachers will get sacked, assistants will suffer likewise, the already increasing class sizes will get even bigger and schools’ ability to deliver a wide and diverse curriculum will be compromised. I expect we will see more of what is happening already, which others have already referred to. There will be increased demands on parents to fund everything from classroom essentials to the extracurricular activities, which until recent years schools have been able to provide.

What is going to happen to schools such as Thornaby in the Stockton South constituency, which borders mine, or the North Shore Academy in my constituency? They serve some of the neediest communities in the country, and they face budget cuts of 2.9% and 2.3% respectively. What are parents of children in those schools going to do when they are asked for cash to help their school get through? They do not have the money.

I am worried about the kids at the bottom of the pile. Allocating funding through this formula will increase the attainment gap, and students from deprived backgrounds may not have the same level of support at home as those from an affluent background. Hon. Members know full well that the Government’s formula is far from fair. It is based only on current pupil numbers and does not take into account increases in those numbers.

The Minister may say that, under the consultation proposals, Stockton will receive an overall funding increase of 0.7%, but that will not even help to maintain staffing, teaching and learning at current levels. The Minister questioned whether we were talking about cuts or cost pressures. It makes no blooming odds whether something is a cut or a cost pressure—it means cuts to teachers, teaching assistants and other services.

The Institute for Fiscal Studies recently reported that schools spending is projected to fall by 6.5% in real terms between 2015-16 and 2019-20. That means that even the schools that benefit from the new formula will have their gains completely wiped out by other funding pressures. That will undermine the quality of education in classrooms, putting children’s academic progress at risk.

Even Tory colleagues know that their Government are letting our schools down. Doubtless Ministers are working on special arrangements for particular areas—we have seen that already in social care—but if they really want to be fair on funding, to address the attainment gap and to see every child realise their potential, they need to take action now to ensure that no school and, more importantly, no child loses out.

--- Later in debate ---

[Mr Gibb]

It is not convenient, actually.

School funding in the constituency of the hon. Member for City of Durham (Dr Blackman-Woods) will rise by £0.4 million—a 0.9% increase—as a direct consequence, again, of introducing the national funding formula. School funding is at its highest level on record, at almost £41 billion this year, and it is set to rise to £42 billion by 2019-20 as pupil numbers rise.

However, the current funding system is preventing us from getting that record sum of money to where it is needed most. Underfunded schools do not have access to the same opportunities to do the best for their children, and it is harder for them to attract the best teachers and afford the right support. That is why we are reforming the funding system by introducing a national funding formula for both mainstream schools and the high-needs support provided for children with special educational needs. It will be the biggest change to school and high-needs funding for well over a decade.

Such change is never easy, but it will mean that, for the first time, we have a clear, simple and transparent system that matches funding to children’s needs and the school they attend. In the current system, similar schools and local areas receive very different levels of funding with little or no justification. Those anomalies will be ended once we have a national funding formula in place, and that is why we are committed to introducing fair funding. Fair funding will mean that the same child with the same needs will attract the same funding regardless of where they happen to live.

We launched the first stage of our consultation on reform in March last year. We set out the principles for reform and proposals for the overall design of the system, and more than 6,000 people responded, with wide support for those principles. Last month we concluded the 14-week second stage consultation, covering the detailed proposals for the design of both the schools and high-needs formulae. Our proposals would target money towards those who face the greatest barriers to their education.

In particular, our proposals would boost the support provided for those who are from deprived backgrounds and those who live in areas of deprivation but who are not eligible for free school meals—those ordinary working families who are too often overlooked. We propose to put more money towards supporting those pupils who have fallen behind, in both primary and secondary school, to ensure that they have the support they need.

[Alex Cunningham]

Will the Minister give way?

[Mr Gibb]

I will not give way now, because of lack of time; I apologise.

Overall, 10,700 schools would gain funding under the new national funding formula, and the formula will allow those schools to see gains quickly, with increases of up to 3% in per-pupil funding in 2018-19 and 2.5% in 2019-20. Some 72 local authority areas are proposed to gain more high-needs funding, and they would also do so quickly, with increases of up to 3% in both 2018-19 and 2019-20.

We have listened to those who have highlighted the risks of major budget changes in our first-stage consultation, which is why we have introduced a floor of a 1.5% minimum funding guarantee per year, and no school can lose more than 3% overall per pupil as a consequence of these changes.

Schools in the north-east would, on average, see a 1% increase in funding as a result of our proposals, and 60% of schools in the region would see an increase in funding, compared with 54% nationally. Schools in the north-east are doing well: 68% of pupils in key stage 2 SATS reached the expected standard in reading in 2016, compared with 66% nationally, and 82% of children are passing the phonics test, compared with 81% nationally.

Of course, the picture would not be uniform across the whole of the north-east. I recognise that the proposals would result in budget reductions for schools in the local authority of the hon. Member for Washington and Sunderland West and no real overall change in funding to schools in her constituency. However, I believe that the formula we have proposed strikes the right balance between the various competing considerations for funding, such as the balance between the core funding that every child attracts and the extra funding targeted at each of the additional need factors. We propose to use a broad definition of “disadvantage” to target additional funding at schools most likely to use it, comprising pupil and area-level deprivation data.

I want to turn to the issue of costs. We recognise that schools are facing cost pressures, including salary increases, the introduction of the national living wage, increases to employers’ national insurance pension scheme contributions and general inflation. From the start of 2016-17 to the end of 2019-20, we have estimated that those pressures will amount to approximately 8% per pupil, on average. To be clear, that is not an 8% pressure in a single year, nor is it an 8% pressure that is all yet to come. In fact, some of those pressures have already materialised and been absorbed in the past financial year. Over the next three years, per-pupil pressures will, on average, be between 1.5% and 1.6% each year. The current, unfair funding system makes those pressures harder to manage, and introducing a national funding formula will direct funding where it is most needed.

We have published a wide range of tools and support to schools, available in one place on gov.uk. That includes tools to help schools to assess their level of efficiency and to find opportunities for savings; guidance on best practice, including on strategic financial planning and collaborative buying; case studies from schools themselves; and support for schools to acquire greater financial skills. We have launched a school buying strategy to support schools to save more than £1 billion a year by 2019-20 on their non-staff spend. That will help all schools to improve how they buy goods and services.

I am grateful for today’s opportunity to debate school funding. A fair national funding formula for schools and high needs underpins our ambition for social mobility and social justice, and it will mean that every pupil is supported to achieve to the best of their potential, wherever they are in the country.

[Mrs Hodgson]

I am grateful to the Minister for leaving me some time to wind up; not all Ministers do that. This has been an excellent debate. At this late stage, on the penultimate day of this Parliament, it is heartening to see so many colleagues from across the north-east here today. That just goes to show how worried we all are about these funding cuts to our schools. We have all made the case as strongly as possible, as we have all met with our headteachers and are regular attendees at our schools, and we have been told at first hand the consequences of the Government’s actions.

I listened to what the Minister had to say. I really was hopeful that he would listen and commit, even at the final stage of this Parliament, to act or at least promise to look at this again in the next Parliament if he is lucky enough, which I am sure he will be, to be returned at the election and appointed again to his current position in government—if they win.

[Alex Cunningham]

That will be Emma’s job.

[Mrs Hodgson]

Yes, it might be the job of my hon. Friend the Member for South Shields (Mrs Lewell-Buck). I am sure she will be putting this all right. That will be a great day indeed, and I look forward to it.

Sadly, the Minister did not make any such commitment. I am sure my hon. Friend the Member for South Shields will, so I look forward to that day. The Minister instead referred to the fairer funding formula, telling hon. Members that we were wrong. He cited a few examples of schools that may be a little bit better off with regard to the funding formula, and he read out a list to try to make that point, but he is missing the bigger point, which is that the national funding formula is being used as a smokescreen. We all agree with fairer funding for schools across the country, but this is being used to hide the real-terms cuts and pay for the other four pressures on school budgets that I highlighted in my speech, such as the pay rise, the national living wage, the apprenticeship levy and trying to fix the schools that are falling to pieces.

I am sorry that we have not made progress on this issue today. I remind the Minister that the electorate is watching; they are watching all of us, and I am confident that they will make their verdict on this at the ballot box on 8 June. Hopefully it will be my hon. Friend the Member for South Shields who can fix this when we come back to this place in June.

Question put and agreed to.

Resolved,

That this House has considered school funding in the north east of England.