School and Early Years Finance (England) Regulations 2018

Catherine West Excerpts

Wednesday 21st March 2018 General Committees

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

I beg to move,

That the Committee has considered the School and Early Years Finance (England) Regulations 2018 (S.I. 2018, No. 10).

It is a pleasure to serve under your chairmanship this morning, Mr Owen. I can feel the palpable energy in the room, among Members and officials alike, from being in the House this early for a Statutory Instrument Committee.

The context for the debate is the Conservative manifesto statement:

“Under a future Conservative government, the amount of money following your child into school will be protected. There will be a real terms increase in the schools budget in the next Parliament.”

That pledge was repeated, and the previous Prime Minister was clear about what it meant:

“I can tell you, with a Conservative Government the amount of money following your child into school will not be cut.”

But the Government are not keeping that promise to the British people. Under the present Government, schools face the first real-terms cuts to their budgets in nearly 20 years, despite the Secretary of State’s having inadvertently claimed the opposite in the House last week.

The National Audit Office has said that under the current spending settlement there will be

“an 8 per cent cut in pupil funding”

between 2015 and 2020. The same conclusion was reached by the Institute for Fiscal Studies. That means that every school in every region and town will lose money because of the Government’s failure to protect funding in schools. The so-called fair funding formula—there we are at last—is simply a redistribution of a sum of money that is already inadequate to support schools and provide children with the excellent education that they are entitled to.

The National Audit Office has also said that the Department for Education expects schools to find a total of £3 billion savings in the course of the Parliament, yet it has failed to communicate to them how to achieve it. Of course I support the principle that all schools should receive fair funding, and there are progressor elements in some of the regulations before the Committee, but the answer is not to take money from schools and redistribute it when budgets are being cut across the country.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that some schools now tell parents that they have to close at 1 o’clock? They give various reasons, but we all know that they do not have the money to pay teachers in the afternoon. Does he agree that although that may not be unlawful, specifically, it takes vital study time away from young people?

[Mike Kane]

I could not agree more. Schools are having to make heinous decisions. In the Minister’s county, West Sussex, some are already threatening a four-day week because of the budget cuts.

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[Mike Kane]

The solution is to invest, to help every child receive an excellent education. The Government’s stated aim in revising the schools funding formula is fairness. There should be fairness in the formula, and there are good things in it, such as the emphasis on high need, a deprivation index—albeit using a crude measure—and a focus on prior attainment. Why would the Opposition not welcome those things? However, there is nothing fair about a proposal under which funding will be cut from high-performing schools in deprived areas.

A fair approach would take the best-performing areas in the country and apply the lessons from those schools everywhere. It would look objectively at the level of funding required to deliver in the best-performing schools, particularly in areas of high deprivation, and use that as the basis for a formula to be applied across the whole country. Unfortunately, though, the Government are not listening to the voices of schools, teachers or parents. Evidence from the general election suggests that 750,000 people switched their votes to Labour because of the impact of school funding cuts on their local communities.

We only have to look at the impact already being played out. Under this Government more than half a million infant schoolchildren are in super-sized classes, and new research by leading education unions shows that class sizes are rising in the majority of secondary schools in England as a result of the Government’s underfunding of education. There is a particular problem in secondary schools because of the shortfall in funding of £500 million a year for 11 to 16-year-olds between 2015-16 and 2019-20, plus the deep cuts to sixth-form funding of more than 17% per pupil since 2010.

[Catherine West]

My hon. Friend is being generous with his time. Subjects such as music are now offered at A-level only in one school in a large area. Is it therefore any surprise that under 44.1% of the Royal Academy of Music’s intake come from state schools?

[Mike Kane]

I am grateful to my hon. Friend. I am a product of the Manchester music service, and the music education that I received as a child is nowhere near what we now provide in our schools. We now have secondary schools in Yorkshire charging parents for music GCSEs. My final point on class sizes is that 62% of secondary schools in England have increased the size of their classes.

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[Sarah Champion]

My hon. Friend is absolutely right. We were hoping for a funding formula that recognised the different pressures in different areas. A blanket funding formula does not recognise the real issues we have in the north of England in particular.

The IFS states that overall, school funding will have fallen by 4.6% in real terms between 2015 and 2019. We do not know the real impact of the next round of cuts, but perhaps the Committee can make an informed assessment by looking at what happened in the previous two years. Between 2014-15 and 2016-17, class sizes rose by 54% in primary schools and by 50% in secondary schools. In the same period, the ratio of pupils to teachers rose by 61% in primary schools and by 71% in secondary schools. The ratio of pupils to teaching assistants rose by 58% in primary schools and by 79% in secondary schools.

[Catherine West]

Does my hon. Friend agree that that is having a big effect on morale in schools? Did she know that a position to learn to be a teacher in a primary school in my constituency that once attracted 150 applicants now attracts 10?

[Sarah Champion]

I did not know that, but it pains me to hear it. When I was going through school and university, people aspired to become a teacher. Teaching was a secure career in which people felt they were giving something back to their community. Now, it is seen as something to try to escape from, and we do not attract the best people to be teachers. That is such a shame. The impact on future generations is immeasurable.

Why has there been such a dramatic rise in the ratio of pupils to staff? It is not rocket science. To try to bridge the gap between their costs and the income they get under this Government, schools have had to lose staff. In the same period—2014-15 to 2016-17—staff cuts in primary schools increased by 44%, and cuts to secondary teaching staff in Rotherham rose by a staggering 93%.

Using that as my evidence, I guess that class sizes in Rotherham will increase again for the next two years under this Government. Schools will be forced to cut more staff, so the pupil to staff ratio will increase. There is no evidence—if anyone can show me some, I would welcome that—that bigger classes lead to a better education. I have not discovered evidence of that anywhere in the world. To be honest, all the evidence points to bigger classes leading to worse education.

Are children in Rotherham worth a good education? Is it a surprise that we have some of the highest rates of exclusion and youth unemployment when there is not enough money to pay for an adequate number of teaching staff? I am afraid that things will only get worse under the regulations. The minimum funding guarantee in the local formula is currently set at minus 1.5%. That is a guarantee that no school can lose more than 1.5% of its per pupil funding year on year as a consequence of changes to the local funding formula. Paragraph 8.4 of the explanatory memorandum states:

“The new level of flexibility around the MFG set out in these Regulations will allow local authorities to set the MFG at any value between -1.5% and +0.5%, allowing them to replicate this element of the national funding formula at a local level if they choose.”

The second stage of the consultation underlined the importance of stability in funding levels for schools. As a result, the national funding formula will allocate a cash grant of at least 0.5% per pupil for every school. This new MFG flexibility will enable local authorities to pass those gains on to schools, but here is the but—as of yesterday the CPI inflation rate dropped, woohoo, to 2.7%. Even if the local authorities had the cash to apply the maximum funding of plus 0.5%, schools would still be losing 2.2% in real terms. Perhaps that is why paragraph 10.3 of the explanatory memorandum says:

“An Impact Assessment has not been prepared for this instrument.”

One wonders why.

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[Nick Gibb]

It is a pleasure to serve under your chairmanship, Mr Owen. I am pleased to be able to discuss the school and early years finance regulations at a time when local authorities are about to receive their first grant payments calculated by the national funding formula—an historic and necessary reform.

The regulations set out how local authorities should distribute between local schools the £33.7 billion of funding that they collectively receive through the schools block of the dedicated schools grant. Before I turn to the regulations, it is important to place them in the context of the historic change that the Government have made to the broader funding system. The introduction of the national funding formula means that, for the first time, this £33.7 billion of funding will be distributed between local authorities based on the individual needs and characteristics of every school in the country.

The Government are determined to create an education system that offers opportunity to everyone at every stage of their lives. That is the key to raising standards for all and improving social mobility. We are making significant progress: more schools than ever before are rated good or outstanding, the attainment gap is beginning to close and we have launched 12 opportunity areas to drive improvement in parts of the country that we know can do better. However, those achievements have been made against the backdrop of the old, unfair funding system, which we have reformed. Under the old system, schools across the country with similar pupil characteristics have received markedly different levels of funding for no good reason.

[Catherine West]

Will the Minister explain whether more schools being rated as good or outstanding, which is happening in many of our constituencies, is linked to a higher rate of exclusions?

[Nick Gibb]

We have launched an exclusions review, conducted by our former colleague, Ed Timpson. He will look at precisely those issues. We actually raised the bar for Ofsted’s judgments on schools. Despite our raising the bar for academic standards, we are still seeing more schools rated as good or outstanding.

In the hon. Lady’s constituency of Hornsey and Wood Green, schools would attract 0.9% more funding if the national funding formula were implemented in full, based on the 2017-18 data. Under the national funding formula, schools in Hornsey and Wood Green will be funded at £5,671 per pupil, compared with the national average of £4,655 per pupil.

[Catherine West]

In that case, will he direct two schools that insist on closing at 1 pm on a Friday, which parents have raised with me as an issue, to open their gates until 3 pm?

[Nick Gibb]

As she will know from the figures I just cited, schools in her constituency are being funded at significantly higher than the national average.

[Catherine West]

That does not answer the question, Minister.

[Nick Gibb]

I am coming to the hon. Lady’s question. Given that schools in Hornsey and Wood Green are being funded at significantly more than the national average, and given that the vast majority of schools are not doing the things she talks about, there is no reason for schools in her constituency to take that action.

Across the country, schools with similar pupil characteristics have received markedly different levels of funding. That is why our promise to reform this unfair, opaque and outdated school and high needs funding system and introduce a national funding formula has been so important, and I am particularly pleased that this Government were able to deliver on that.

This reform represents the biggest improvement in the school funding system for more than a decade. From April 2018, the introduction of the national funding formula will put the funding system firmly on track to deliver resources on a consistent and transparent basis, based on the individual circumstances of every school in the country. Following extensive consultation, in which we carefully considered more than 25,000 individual responses to our proposals, last September we were able to publish full details of the school and high needs national funding formulae and the impact they will have on every local authority.

Those proposals were underpinned by an additional £1.3 billion for schools and high needs across 2018-19 and 2019-20, over and above the funding confirmed at the 2015 spending review. School funding is at a record high because of the choices we have made to prioritise school funding, even as we faced difficult decisions elsewhere to restore our country’s finances.

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[Nick Gibb]

I will come to the cost pressures that schools have faced in the last two years, particularly the increase in the employers’ contribution to teachers’ pensions—we regard teachers’ pensions as very important—and the higher level of the employers’ national insurance contribution. Again, the higher employers’ national insurance contribution is about raising more tax revenue to help close the historic deficit we inherited. Achieving the reduction of that deficit to 2% of national income, from 10% when we came into office, has enabled us to maintain a strong economy. We acknowledge that there have been cost pressures on schools in that period. Those cost pressures have now been absorbed and schools will see real-terms increases across the board in their funding, taken as a whole.

[Catherine West]

The Minister is extremely generous in giving way to me a second time. Will he comment on the increase to NHS staff today? Will we hear a further announcement in a few months’ time that there may be more money for teachers, given that there tends to be a knock-on effect when one public sector group gets a pay increase? Not that any arguments were won last June, I hasten to add.

[Nick Gibb]

The hon. Lady raises an important point. We have given evidence to the School Teachers Review Body; the Secretary of State gave oral evidence a week ago. We will receive its recommendations, I think, in May and we will respond to them then. It is important that these issues are dealt with by independent pay review bodies.

With the additional £1.3 billion that we were able to identify last summer, we have been able to ensure that all schools and all areas will attract some additional funding over the next two years while providing for up to 6% gains per pupil for the most underfunded schools. That significant extra spending in our schools demonstrates our commitment to ensuring that each child receives a world-class education. The hon. Member for Wythenshawe and Sale East cited our manifesto; we have gone further than our manifesto commitment that no school should lose funding as a result of the national funding formula. Now, every school in every area will attract at least 0.5% more per pupil in 2018-19 than it received in 2017-18, and 1% more in 2019-20.

We also heard throughout our consultation on the formula that we could do more through our formula to support those schools that attract the lowest levels of per pupil funding. We listened to those concerns, and our formula rightly will direct significant increases towards those schools. In 2019-20, the formula will provide minimum per pupil funding of £4,800 in respect of every secondary school, and £3,500 in respect of primaries. In 2018-19, as a step towards those levels, secondary schools will attract at least £4,600, and primary schools £3,300. These new minimum levels recognise the challenges of the very lowest funded schools.

There was considerable debate during the consultation on the funding formula about how much funding it was appropriate to direct towards schools with higher numbers of pupils likely to need additional support—I welcome the hon. Gentleman’s support for that element of the national funding formula—as a result of a disadvantaged background, low prior attainment, or because they speak English as an additional language. In our final formula, we have been able to protect this funding—£5.9 billion in 2018-19—while improving its targeting. Alongside that, we will continue to deliver the pupil premium— some £2.5 billion a year—to provide additional support to schools to narrow the attainment gaps and to promote social mobility. As I mentioned earlier, we have closed the attainment gap by 10% in both primary and secondary schools since 2011.

The dedicated schools grant provides local authorities with funding for their high needs provision and for early years. We are absolutely committed to supporting children who face the greatest barriers to their education. That is why we have also reformed the funding for children and young people with high needs, by introducing a high needs national funding formula. That will distribute funding for children and young people with high needs more fairly, based on accepted indicators of need in each area.

The additional spending that we have announced means that every local authority will see a minimum increase in high needs funding of 0.5% in 2018-19, and 1% in 2019-20. Underfunded local authorities will receive gains of up to 3% per head a year for the next two years. Overall, local authorities will receive £6 billion to support those with high needs in 2018-19. We are also determined to support as many families as possible with access to high-quality, affordable childcare. That is why in 2019-20 we will spend a further £6 billion on childcare support—a record amount of support. This record spending includes £1 billion a year, delivering 30 hours of free childcare for the working parents of 3 and 4 year-olds and funding the increase in rates that we introduced in April 2017.

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[Mike Kane]

Again, that is a sophist argument that some schools will receive an increase, but not in terms of the general level of cuts since 2015; and it is nothing in comparison with what the Minister rightly pointed out about budget pressure and inflation. All the schools in his constituency will be taking a cut over the next few years.

[Catherine West]

A similar problem has been mentioned to the one in my constituency, where schools are cutting the school day, and I hope that the matter will be raised again, to prevent a domino effect that might lead to a four or four-and-a-half-day week. That would have a huge impact on productivity in the economy, as much as anything.

[Mike Kane]

My hon. Friend is a passionate advocate on behalf of schools in her constituency. The way she stands up for them will be on the record.

There is only one party represented here today that has had a reprimand about dodgy stats on schools: the Secretary of State received one from the UK Statistics Authority last week. The Opposition will not take lectures on statistics at the moment. The funding formula has been a colossal waste of time and effort and has not got to where the Minister wanted. I can see from the reactions of some Conservative Back Benchers that the same situation will continue. Schools in their constituencies will be under enormous pressures, and what has been done has not ended the situation.

The Minister talked about having to rescue the economy. The Government have led us to a nearly £2 trillion deficit in the economy.[Interruption.]