Schools: Funding Reform

Baroness Hughes of Stretford Excerpts

Tuesday 19th July 2011 Lords Chamber

[Baroness Hughes of Stretford]

I thank the Minister for repeating that Statement. On capital, some might say that scrapping the most transformational school building programme for decades and replacing it with a survey is not the most convincing evidence of commitment to improving school buildings. However, I welcome the action that the Government are now taking to sort out the mess and uncertainty left in the wake of the Secretary of State's precipitous decision to axe the Building Schools for the Future programme.

High-quality buildings and facilities are indeed essential to high-quality teaching and learning. It is a pity that the Government could not acknowledge what the National Audit Office called the crumbling school infrastructure that my Government inherited in 1997 and the outstanding progress made in rebuilding schools since then. The replacement for BSF, but for up to only 300 schools in the worst condition, is to be private finance. Can the Minister explain the terms of this scheme and what will be the long-term revenue consequences for schools and local authorities of using private sector funding? Does the Minister agree that the full survey of the school estate, to which he referred, should be completed speedily and can he say when that will be published? On the funding for extra school places, can he explain how the allocation of that funding will take account of plans for free schools in the local area and the surplus places that will follow in those areas consequently from having a surfeit of schools?

I turn to revenue, about which the Statement strangely said relatively little. In principle, I welcome the consultation on how best to fund schools and also the decision to consult widely, although with schools breaking up this week they may not feel that they have the full 12 weeks in which to consider this detailed document. The Government say they want to achieve fair and comprehensive reform of the way in which schools revenue funding is calculated. The Minister has also said that similar schools in different areas can receive different amounts of funding and that that is not fair. But does the Minister accept that equal funding is not necessarily fair funding? Does he accept that schools in areas with more social or economic challenges or with more challenging pupils will need more funding in order to give those children a fair chance? None the less, will the move to a national formula ensure that schools with the highest needs will receive more funding?

The Government's proposal to move to a new national funding formula with local discretion is, on the face of it, seductive. It sounds as though it will be simpler and more transparent. However, even a cursory glance at the consultation document this afternoon, which outlines, for example, the proposal to move to three or four funding blocks, the methods for calculating them, the complicated proposal for a new combined area cost adjustment, the fact that local authorities will still receive funding through the formula grant for other education services, to name just a few of the issues, suggests it may not be so simple.

Getting money to 25,000 schools, especially when the Government are pressing as many as possible to come out of the maintained sector, is inherently complex. The devil will be in the detail and the detail will show whether we really end up with a simpler system that schools and parents can understand and support. So can the Minister explain what he expects the outcome to be of moving towards a national funding formula for schools in deprived areas and for schools with higher proportions of children with additional or high needs? With a national formula, what continued role does the Minister envisage for local authorities in ensuring that funding to schools reflects local needs and circumstances? Will the Government now publish the modelling, which they must surely have done, so that we can see which schools will gain and which will lose in the new system?

Indeed, the Minister has acknowledged that changing the system in the manner proposed will result in many winners and many losers, so I welcome the decision not to introduce any changes before 2013-14 and to make transitional arrangements. I hope that those arrangements will include some kind of tapering to ensure a gradual transition to what may be a sizeable change to their budget for many schools. The Government want most schools to come out of the maintained system and become academies and free schools, so the parallel announcement to review academy funding is both necessary and welcome. Does the Minister agree that the funding system should ensure parity of funding between maintained schools and academies, based on need? Does he agree that academies should be subject to the same reporting framework in respect of the public money that they receive?

The consultation proposes three models for academy funding, but gives no bases for respondents to evaluate the different options. Will the Government now publish the data necessary to illustrate what would be the different impacts of those three models? We know that recently the Secretary of State was forced under threat of legal action to agree to a review of funding for academies. Will the Minister update the House on the progress of that review, and how it will link to the consultation that he announced today?

There are one or two notable gaps in the consultation, especially in relation to children with additional or high levels of need, and to post-16 funding. Will the Minister assure the House that the consultation will take account of the responses to the special educational needs Green Paper, as parents of children with special educational needs will have concerns over funding levels as a result of today's announcement? Furthermore, Ministers were silent today about 16 to 19 funding, which is particularly unfortunate as it is the subject of a critical report from the Education Select Committee. Many people are concerned that the changes to post-16 funding and the reductions in funding to school sixth forms could see some forced to close. The Secretary of State has promised a review of post-16 funding. It would make sense to conduct it concurrently with the consultation that he announced today. Perhaps the Minister will comment on that.

Finally, the question of most concern to parents and teachers is how far the Government will protect funding for schools. Despite the claims made today, is it not the case that the Government failed to keep their promise to increase spending by 0.1 per cent in real terms throughout the spending review period? Is it not also the case that simply maintaining a national schools budget at last year's cash level has meant a real-terms cut that many schools are grappling with?

We on this side will work constructively with all parties on the consultation to try to reach the best outcome for children and schools on the funding mechanism. At the same time, we want to see not only fair funding but also sufficient funding to ensure that every child gets the chance that they deserve.