Education Funding: Devon

Anne Marie Morris Excerpts

Wednesday 18th January 2017 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

Previous speakers, particularly my right hon. Friend the Member for East Devon (Sir Hugo Swire), have set out clearly Devon’s underfunding predicament and its history. I want to delve a little more deeply into some of the causes and the action that the Government need to take now.

I was fortunate. Prior to the start of this parliamentary Session, I had a meeting with the Devon Association of Primary Headteachers and the Devon Association of Secondary Heads. Their input was illuminating to say the least. The current funding formula is unfair and the proposals for the future funding formula are equally unfair. But why? The heads are concerned that the consultation is one in which they are not really being listened to. It is far from clear to them what assumptions the Government have made in coming up with the new formula. My headteachers would be delighted to meet and help the Minister in Westminster or in the constituency. Unless we can help him really understand the issues and make sure his assumptions are right, we will always get a second-rate result. We cannot simply take the old and fiddle with it. We have to fundamentally look at what it is that we need to do differently.

Part of the problem is the decisions made by central Government and those made by local government. When I sent one of my many letters to the Minister, which he swiftly replied to, he explained that I should draw comfort from the fact that the school block was ring-fenced. That sounds great, but unfortunately it does not really work. As my right hon. Friend the Member for East Devon has pointed out, it is for the local authority to determine what goes into each school. The approach taken by Devon, as has already been explained, is very different from the approach taken by Cornwall. Partly for that reason, the statistics appear to show that Cornwall gets better funding than Devon, but that is because the local authority has chosen to adjust in a different way.

I do not think our children should be the victims of a postcode lottery, depending on which council does what. I am not in favour of prescription, but I am in favour of guidance, and we need to make sure that every child is fairly funded, whichever county they are in. So we need to look again at the school block and exactly how that is calculated. We also need to look at how the local authority distributes it. If we look at the proposed new formula, it gives some strange results. The small rural schools do better, as do the large schools, but the ones in the middle lose out. There is something strange about a formula that comes up with such results.

We also need to look again at the high needs block, because the mental health challenges—not just in our county, but across the country—are growing exponentially. As my right hon. Friend the Member for Exeter (Mr Bradshaw) has explained, there is no counterbalancing increase in the social care budget to meet the need, so we are really challenged. In my constituency, 17% of the cohort are in the high needs group. That is a very high number, so the high needs block needs to be carefully thought through.

Some things need to be addressed now, and we cannot wait for the new funding formula. My headteachers tell me that, come April this year, if nothing changes in the cost base that they face, they have got to the point where they will have to make teachers and teaching assistants redundant. They will also have to do away with any form of counsellor support for some of the children who have mental health or family issues, and that gives rise to a real concern not only about finance, but about the basics of safeguarding.

So how can the Minister help us here today? First, he should abolish with immediate effect through a statutory instrument the application of the apprenticeship levy to schools. It is utter madness that a public body such as a maintained school, whose wages are paid through the local authority, hits the employment legislation’s minimum level. As a consequence, the council, because it pays the wages, has to pay the apprenticeship levy, which it then passes down to the school. As has already been mentioned, that is now just short of £500,000. Spread between the schools, that is a huge problem and a challenge that could be easily resolved. The Minister should think about that. The concept of the apprenticeship levy was about commercial businesses and trying to ensure they invested properly in apprentices. Teachers are not apprentices. There could be apprentices in the administration area, but, given the pressure on schools, is that really where we want schools to spend their money? It is like having a tax credit that cannot be spent, so the levy has to be scrapped. It deserves urgent attention because the crunch point is soon: April 2017, which is not many days and weeks away.

Secondly, I want the Minister to look at the special education needs extension to those aged 25. It is right that those with special education needs should be given all the support that they need. Because of the peculiarity of the way in which the system works, an individual parent whose child is entitled can nominate the school to which they will go. The school, even if it goes above the published admission number, has to provide the support that is needed, which is extremely expensive and difficult for schools to meet, so there needs to be a way of supporting schools that are faced with that.

Although the local authority makes some provision, it is not adequate and does not work. So will the Minister look at whether the local authority should dig not just into the education pot but into the healthcare pot when trying to fund some of the new costs hitting schools that are effectively having to become social care workers at the same time?

My right hon. Friend the Member for East Devon referred to the removal this year of the education services grant. We should all try to live within our means, but that removal is a straight cut. It is not as if the schools are suddenly finding another way. They cannot raise business rates. Where will they find the extra money to provide those services? They can of course work together, and work differently, but a complete cut is not a viable way forward.

The coalition Government could be praised for introducing the troubled families programme, through which local authorities could help families identified with multiple social and educational problems. Under this watch, that funding now only comes into play when a child is over 11 years old. I wish I did not have to say this, but in my constituency we have to make extreme interventions for a large number of children—in some schools, up to 85%. Children coming to school today are often not toilet-trained; many of them have real challenges with some basic reading skills. In part, that is a result of changes in our society. The Minister cannot change society, and we cannot change the fact that children are glued to iPads instead of conversing with their parents and their peers, but we need to recognise the consequences, budget accordingly and ensure support is there for those troubled families.

I urge the Minister to look at the issues now. We cannot wait until the new funding review. This is crucial; it is about our children today, our children tomorrow and our country tomorrow. I urge him to consider the issues now.

--- Later in debate ---

[The Minister for School Standards (Mr Nick Gibb)]

It is a pleasure to serve under your chairmanship, Mr Hanson, and to follow the hon. Member for Wythenshawe and Sale East (Mike Kane). The hon. Gentleman, as a Labour shadow spokesman, defended his party’s legacy, but since this Government came to power, 1.8 million more children than in 2010 are in schools graded by Ofsted as good and outstanding—1.8 million more children receiving a higher standard of education. This year 147,000 more six-year-olds are reading more effectively as a consequence of the reforms implemented since 2010.

I also congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on securing his important debate. I am sure he agrees that we share the same ambition to see a country that works for everyone, where all children receive an excellent education that unlocks talent and creates opportunity, regardless of where they live, their background, ability or needs.

My hon. Friend the Member for North Devon (Peter Heaton-Jones) referred to the funding levels for schools in his constituency. He is assiduous in visiting the schools in his constituency, as I saw at first hand when I joined him on one of those visits. We had a roundtable discussion with a number of his local headteachers. Overall, his schools will receive an increase of 0.7% in funding as a result of the national funding formula. As I said at that meeting, however, we are paying close attention to the responses to the first-stage consultation and to the second-stage consultation on the detailed proposals. The latter consultation closes on 27 March.

The Government are prioritising spending on education. We have protected the core schools budget in real terms so that as pupils numbers increase, so will the amount of money for schools. That means that schools are receiving more funding than ever before, totalling more than £40 billion. The existing funding system, however, prevents us from getting that record amount of money to where it is needed most. Underfunded schools do not have access to the same opportunities to do the best for their pupils, 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 high-need support for children with special educational needs. That will be the biggest change to school and high-needs funding for well over a decade, and means that we will for the first time have a clear, simple and transparent system that matches funding to pupils’ needs and the schools that they attend. This is a once-in-a-generation opportunity to introduce a national funding formula.

The right hon. Member for Exeter (Mr Bradshaw) is right that introducing a national funding formula when we are still tackling the historic budget deficit that we inherited from his Government is challenging. We have protected core school spending in real terms, but I accept that there are cost pressures on schools. We believe that it is nevertheless important to use this one-time-only opportunity to introduce a fairer funding system.

In the current system, similar schools and local areas receive very different levels of funding, with little or no justification. For example, a primary-age pupil who is eligible for free school meals attracts an extra £1,378 for their school if they live in Devon but an extra £2,642—£1,264 more—if they live in Brighton and Hove. Those anomalies will end once we have a national funding formula in place. Introducing fair funding was a key manifesto commitment for this Government, and it will mean that the same child with the same needs will attract the same funding regardless of where they live.

We launched the first stage of our consultation on reforming the schools and high-needs funding system in March last year. We set out the principles for reform and proposals for the overall design of the system. More than 6,000 people responded, and there was wide support for the proposals. Building on that support, we were able in December to proceed to the second stage of the consultation and set out detailed proposals for the design of both the schools and high-needs funding formulae. The consultation period will last until 22 March, and the issues raised in this debate and others are part and parcel of that process.

Under our proposals, money will be targeted towards pupils who face the greatest barriers. In particular, support will be boosted for children from the most deprived families and those who live in areas of deprivation but are not eligible for free school meals—those whose families are just about managing. We are putting more money towards supporting pupils in both primary and secondary schools who have fallen behind, to ensure that they, too, have the support they need to catch up.

Overall, 10,740 schools—54% of all schools—will gain funding, and the formula will allow them to see those gains quickly, with increases in per-pupil funding of up to 3% in 2018-19 and 2.5% in 2019-20. Some 72 local authority areas are due to gain high-needs funding, and they, too, will see that quickly, with gains of up to 3% in both those financial years. As well as providing for those increases, we have listened to those who highlighted the risks of major budget changes for schools during the first stage of our consultation and will include significant protections in both formulae. No school will face per-pupil reductions of more than 1.5% per year or 3% overall, and no local authority will lose high-needs funding.

My hon. Friend the Member for South West Devon (Mr Streeter) mentioned my visit to the outstanding Ivybridge Community College in his constituency. It was a pleasure to see such high academic standards being delivered in that school. He referred to a list. I do have such a list, which says that under the new national funding formula, schools funding in Devon as a whole will rise from £377.2 million in 2016-17 to £378.7 million—an increase of 0.4%. Some 213 schools in Devon—62% of all Devon schools—will gain funding. I recognise that the proposals would result in budget reductions for some schools in the constituencies of my right hon. Friend the Member for East Devon and other hon. Members, but I believe that the formula strikes the correct balance between the core funding that every child attracts and the extra funding that is targeted at those with additional needs—both children in areas of deprivation and schools that serve rural communities.

Our proposed protections will mean that schools in Devon that do not gain funding can manage these significant reforms while continuing to raise standards. All schools need to make the best use of the resources they have and ensure that every pound is used effectively to improve standards. To help schools, we have put in place and continue to develop a comprehensive package of support to enable them to make efficiency savings and manage cost pressures while continuing to improve the quality of education for their pupils.

Although Devon will not receive any additional high-needs funding as a result of the new formulae, I hope that my hon. Friends understand that the funding floor will allow underfunded local authorities to gain funding and go a long way to protect the local authorities that spend the most, in recognition of the fact that their spending levels are the result of decisions on placements taken in consultation with parents. We are also providing £23 million of additional funding this year to support all local authorities to undertake strategic reviews of their high-needs provision.

As a member of the f40, Devon has played a significant role in campaigning for fair schools funding, as have my right hon. and hon. Friends. The Government’s proposed formula is based on our assessment of needs across the whole country; it is not designed around the interests of any one area or group in isolation. None the less, and reflecting the underfunding that several f40 members have suffered for many years, most of the areas represented by the f40, including Devon, will gain: overall, funding for their schools will increase by £210 million. I understand that some f40 members are disappointed with the formula’s effect on their area. Funding reform is always difficult—many competing demands have to be balanced—and it is particularly difficult in an area as complex as education. That is why we are holding such a long consultation to gather views.

I am aware of the concern that my hon. Friends and others have raised that fairer funding for schools in Devon and other parts of the country is overdue. We agree that these reforms are vital, but they are an historic change, which is why we have taken time to consider the options and implications carefully. The new system will be in place from April 2018, but in the meantime we have confirmed funding for 2017-18 so that local authorities and schools have the information and certainty that they need to plan their budgets for the coming year.

[Anne Marie Morris]

Will the Minister give way?

[Mr Gibb]

I will give way in one moment. I was just coming to my hon. Friend’s point about funding levels in 2017-18, the year before the new national funding formula comes into effect. We have confirmed that no area will see a reduction in their schools or high-needs funding in 2017-18, and areas such as Devon that benefited from the £390 million that we added to the schools budget in the last Parliament will have that extra funding protected in their baseline in 2017-18, as they did in 2016-17.

[Anne Marie Morris]

That is helpful, but it does not address the cost issue that I raised. For any institution, what comes in and what goes out need to balance. I respectfully ask the Minister whether he will undertake to consult his fellow Ministers in the Department for Communities and Local Government and the Department for Business, Energy and Industrial Strategy about these costs and how they fall on schools—particularly the apprenticeship levy. Clearly, it is not for him to slash that on a whim, but it is incumbent on him to discuss it.

[Mr Gibb]

We recognise that schools face cost pressures, including salary increases, the introduction of the national living wage, increases to employers’ national insurance and pension scheme contributions, and general inflation, as well as the introduction of the apprenticeship levy. The current, unfair funding system makes those pressures harder to manage. The new national funding formula will not only direct funding where it is most needed but give schools greater certainty about funding and allow them to plan ahead effectively. The Government are also providing a wide range of tools and other support to schools to improve their efficiency, and we will soon launch a school buying strategy to support schools to save more than £1 billion a year by 2019 on non-staff expenditure.

I appreciate what my hon. Friend says; in addition to those pressures, schools will pay the apprenticeship levy. The apprenticeship levy has real benefits for schools. It will support them to train and develop new and existing staff. It is an integral part of the Government’s wider plans to improve productivity and to provide opportunities for people of all backgrounds and all ages to enter the workplace. That is why we encourage all schools to employ or designate apprenticeships, whether or not they pay the apprenticeship levy.

[Anne Marie Morris]

Does the Minister recognise that—as I understand it—there is no such thing as an apprentice teacher? Does he agree that the most important thing to spend money on, for any school facing the pressures they are facing, is teachers, not administrative staff?

[Mr Gibb]

There is an employers’ group that is preparing and working on the introduction of a graduate-entry apprenticeship scheme for teachers, so there will be opportunities for schools to use that funding and indeed spend more than the money from the apprenticeship levy on training teachers and also support staff and other technical staff that help schools operate.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) described his constituency as in part inner city, where there are significant areas of deprivation. The Government are seeking to tackle that, not least through improving education. Social mobility lies at the core of the Government’s objectives, and that is one reason why schools in his constituency are seeing an overall increase of some 4.4% in funding, which he was magnanimous enough to acknowledge.

We are using a broad definition of disadvantage to target additional funding to the schools most likely to use it, comprising pupil and area-level deprivation data, prior attainment data and English as an additional language data. No individual measure is enough on its own; each addresses different challenges that schools face. When a child qualifies under more than one of those factors, the school receives funding for each qualifying factor. For example, if a child comes from a more disadvantaged household and they live in an area of socioeconomic deprivation, their school will attract funding through both the free school meals factor and the area-level deprivation factor. That helps us to target funding most accurately to the schools that face the most acute challenges.

--- Later in debate ---

[Mr Gibb]

I will be delighted to meet the grammar school headteachers from his constituency either in the constituency or at the Department. To be fair to the hon. Member for Wythenshawe and Sale East (Mike Kane), this debate is about funding, but we as a Government want to create more good school places, whether those are more good grammar school places or more good school places in non-selective schools, helped by the independent sector and universities, and by having more faith schools. We want more good school places, and that is what drives our continuing education reforms.

I hope that hon. Members will be reassured about the Government’s commitment to reforming school funding. It is a system where funding reflects the real level of need and where every pupil has the same opportunities.

[Anne Marie Morris]

Will the Minister give way?

[Mr Gibb]

If my hon. Friend will forgive me, I would like to give time for my right hon. Friend to respond.

A fair national funding formula for schools and high needs underpins our ambition for social mobility and social justice. It will mean that every pupil is supported to achieve to the best of their potential, wherever they are in the country. I hope that while recognising the challenges that lie ahead, my hon. Friends will give their support to working with us to achieve that vital aim.