School Funding

Graham Stuart Excerpts

Thursday 5th November 2015 Westminster Hall

[Graham Stuart (Beverley and Holderness) (Con)]

I beg to move,

That this House has considered funding for schools.

It is a pleasure to serve under your chairmanship, Mr Walker, and, equally, to see so many colleagues from both sides of the House filling the Chamber on a Thursday afternoon. It shows the strength of feeling on fairer funding for schools and that many colleagues want to see a fair and just system.

I want to place on the record my thanks to the Backbench Business Committee for granting the time for the debate. The issue has support from more than 110 colleagues from both sides of the House; only a fortnight ago they signed a letter to the Prime Minister championing fairer funding for schools.

The premise of fair school funding awarded in accordance with a rational formula assessed on the basis of pupil need is a simple one and, one might think, uncontroversial. That statement, however, falls a long way short of the reality in England. The Association of School and College Leaders has calculated that this year the 10 best-funded areas will receive an average schools block grant of £6,300 per pupil, compared with an average of only £4,200 per pupil in the 10 most poorly funded areas. For a typical secondary school of 920 students, that equates to a budget of £5.8 million in the best-funded areas and £3.9 million in the least well-funded areas—a difference of £1.9 million in a relatively small secondary school.

[Sir Greg Knight (East Yorkshire) (Con)]

Is my hon. Friend aware that I have had a meeting with the Secretary of State for Education, my right hon. Friend the Member on Loughborough (Nicky Morgan)? She is of the view that the existing formula is wrong, is unsustainable and needs to be changed, and she is consulting on that. Does he agree that the Government should be congratulated on being prepared to look at the matter? Furthermore, does he agree that Conservative Members seem to be pushing against a door that is, if not fully open, certainly ajar?

[Graham Stuart]

I am delighted to hear that my right hon. Friend met the Secretary of State. The delivery of fairer school funding was of course a manifesto undertaking by the Conservative party at the most recent general election and, I hope, played a part in securing the majority that our party enjoys in this Parliament.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I congratulate my hon. Friend on securing the debate, on the extremely skilful way in which he has run this campaign over the past few months and on the levels of support generated. I come from a county that is one of the worst-funded areas in the country, so I take his point, but does he share my view that things are made even worse when the effect of the tight local government settlement means that schools have to bear additional costs, such as for transport, as well as the unfair funding formula with which they are already landed?

[Graham Stuart]

That will have meaning in many rural constituencies. Separately, as my hon. Friend knows, the Rural Fair Share campaign on local government funding, which it is my pleasure to chair, shows up the great disparities. An interesting point about fair school funding is that the issue is not about rural and urban; it is an entirely arbitrary, random and grossly unfair settlement. If we look at the F40 group’s proposals, Barnsley would be the biggest gainer, Sunderland and Leeds would be gainers, and other areas might do less well.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I, too, add my voice to the congratulations on my hon. Friend’s superb campaigning over many years and on getting this number of people to the debate. May I emphasise that the issue is one of basic fairness? Children in similar circumstances wherever they live in the country should get the same resources from the taxpayer. The sooner we move towards a national funding formula the better.

[Graham Stuart]

As I said, the issue should be uncontroversial, but because the discrepancies are so great any change will mean that money is removed from some schools and some areas. The losers will, understandably, fight and try to find an argument with which to defend what is fundamentally indefensible, because there is no rationale for it. I will go into that later in my speech.

[Kevin Foster (Torbay) (Con)]

: I, too, congratulate my hon. Friend on securing the debate. Does he agree that one of the stark differences between rural and urban is shown in a recent Public Accounts Committee report? It identified that funding for deprived pupils can vary by £3,000 per pupil because of the existing formula.

[Graham Stuart]

My hon. Friend is absolutely right.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I am sure that my hon. Friend knows, from going around schools in his constituency, that when it comes to the sort of equipment that our schools have—whether books or insulation—and the facilities available for children, they are significantly inferior to those in other parts of the United Kingdom. That is simply not fair for the education of our children.

[Graham Stuart]

My hon. Friend is right. He makes the point succinctly.

[Alex Chalk (Cheltenham) (Con)]

Schools in my constituency, from All Saints’ academy in the west to Balcarras in the east, are facing significant pressures from rising wage bills and pension obligations. Does my hon. Friend agree that we need clarity not only on the principle of fairer funding, but on the programme? Only by knowing the timeline can excellent schools in Cheltenham and elsewhere budget for a secure future.

[Graham Stuart]

My hon. Friend is right. Of course it is difficult at a time of flat cash and increasing financial strain to carry out redistribution, but it is when cash is flat, and no additional above-inflation increase is coming, that the discrepancy between areas becomes more important. Although it is politically more challenging to redistribute when there is a tight cash settlement—that is why it is so important to show the weight of opinion in the House—morally and educationally it is more important to bring that about. That is why we have pushed so hard, and I am grateful that the Government have listened and are prepared to seize the nettle.

[Mrs Caroline Spelman (Meriden) (Con)]

My hon. Friend is right; there is not only rural-urban disparity, but urban-urban disparity. Two wards can be side by side, with identical socio-economic profiles, but have a big difference in funding. The fair funding situation can be aggravated if a pupil moves from one ward across the border into the identical ward, because they do not bring the additional money with them. Unlike in health, the money—apart from the pupil premium—does not follow the pupil.

[Graham Stuart]

My right hon. Friend is absolutely right. That, too, has been a feature of the system for a long time. It is, in a way, a separate issue. If a child from Hull, perhaps from a deprived area, moves to a school in my constituency, which neighbours Hull, rightly or wrongly the additional funding given for that child will not follow the pupil who crosses the border to a school perhaps only a quarter of a mile away—for example, in Bilton on the edge of Hull in my constituency. That, too, is an indefensible feature of the system.

[David Rutley (Macclesfield) (Con)]

I thank my hon. Friend for securing the debate. My hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) hit the nail on the head when he said that the issue is one of fairness. We have heard about the disparities, which are nowhere more stark than in a constituency such as mine. I represent a seat next to the urban area of Manchester, and in Macclesfield the discrepancies are huge. That causes real angst not only among teachers, but among parents and pupils. Does my hon. Friend the Member for Beverley and Holderness (Graham Stuart) agree?

[Graham Stuart]

I do agree. As a result, the children of a multi-millionaire in one constituency or area receive more funding for their education than do the children attracting a pupil premium and from one of the poorest families in a neighbouring area. That is indefensible. The discrepancies are so enormous as to require change, notwithstanding the political challenges and difficulties of doing so.

[David Mowat (Warrington South) (Con)]

There would appear to be consensus on the Government side, and perhaps on the Opposition side, that enough is enough. This is the third Westminster Hall debate I have attended on this issue since I became an MP five years ago—the first was in April 2012—and at each debate it has been agreed, including by the Government, that this had to be fixed. If the door is ajar, as my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) said earlier, there would appear to be a wedge in it that is still to be removed. Does my hon. Friend agree that we must hear from the Minister about timing and not just about whether he agrees that the principle is wrong?

[Graham Stuart]

My hon. Friend is right and I hope and expect that we will hear from the Minister on when the House will get the detail about what the Government propose to do.

To bring to life the example I mentioned of a relatively small secondary school with 920 pupils, the £1.9 million difference between two such schools in different areas is enough to pay the total costs—salaries and pension contributions—of 40 full-time teachers. That huge funding gap cannot be justified.

The gap is not explained by pupil deprivation. People might think that the system is designed to give more to areas of concentrated deprivation, whether urban or other. In 2011, Department for Education analysis showed that a school with 43% of pupils eligible for free school meals can receive £665 less funding per pupil than a school with less than 10% eligible pupils. Therefore, a school that serves the most deprived, as opposed to one that serves a remarkably affluent population, can receive hundreds of pounds less per pupil simply because of where it is rather than the nature and character of the children concerned, let alone their needs. Given the flat cash settlement for schools since that time, those figures will not have altered significantly.

I will give another example of the disparity that can exist between authorities. A secondary school pupil in York who receives the pupil premium, which is worth £935 this year, still has less spent on his or her education than an equivalent pupil in Birmingham who is not eligible for the pupil premium. Therefore, the child of the wealthy entrepreneur or lawyer in Birmingham receives more than the child from the poorest home in York.

Colleagues have mentioned the cross-border issue. The same applies in the relationship between Nottingham and the county that surrounds it: a 13-year-old pupil in the city gets more for their education than a disadvantaged child from the county next door, even though that child receives a pupil premium. Indeed, it is worse than that: a child who is in care in a certain area of the country and receives the pupil premium plus, worth £1,900, to reflect their needs, will still receive less than the child of a wealthy lawyer in Islington. That cannot be right. It needs to be fixed in a timely way and that is what we are gathered here today to tell the Minister.

We might think that if the disparity does not reflect deprivation, perhaps it reflects underlying performance in the system such as the quality of education in the schools, with more money going to help those areas doing less well. However, that would be wrong. Some of the best performing areas, notably in London, continue to receive thousands of pounds more per child than areas that are really struggling with education outcomes. The Royal Borough of Kensington and Chelsea receives 39% more funding per pupil under the schools block grant than my own area, the East Riding of Yorkshire, which loses out badly under the current funding arrangements.

The East Riding struggles with many of the challenges identified by Ofsted Chief Inspector Sir Michael Wilshaw in rural and coastal areas of England, where it can be hard to recruit and retain high-quality teachers, and partnerships between schools can founder because of the distance between them. We could take a coastal town and ask, “Why can’t we replicate the London challenge in East Yorkshire?” but anyone who drew a circle around Withernsea in my constituency to find all the schools that might be able to provide mutual support would find that half the circle was in the sea and the other half took in a swathe of rural East Yorkshire. That does not create easy conditions in which to build the collaborative regimes that have made such a difference in London and that is a further reason why such areas need to be fairly funded.

Contrary to any lazy misconceptions that areas such as the East Riding are rural idylls, there are areas of deep deprivation. Withernsea ranked in the top 10% of most deprived areas in England on both the income and employment indices of multiple deprivation in 2010. In a devastating speech in 2013, Sir Michael Wilshaw warned that

“many of the disadvantaged children performing least well in school can be found in leafy suburbs, market towns or seaside resorts”.

The East Riding also faces the additional costs associated with needing to run small, rural schools because of its geography. There is a limit to how far we can expect children to be bused, so it needs to run small schools, which are necessarily more expensive. It therefore has higher natural costs, and greater challenges in delivering high-quality education.

On top of that, the East Riding targeted as much funding as possible at its schools. Various blocks make up the dedicated schools grant, and historically the East Riding chose to stick most of the money for special educational needs in the schools block—it was entirely free to do so. It said to schools, “Use your budget to deliver that.” There was practically nothing in the high needs block, because that money had been put into the schools block. When the dedicated schools grant came in, which was based on what had been spent at that time and how it was accounted for, the East Riding received among the lowest levels of SEN funding in the whole country. That was not because there was a lack of challenge, but because of how the accounting had been done.

Our high needs funding is now the lowest in England, so the East Riding has had to move funding over to try to compensate for that. The situation was unfair already. Then we moved to the £390 million the Government came forward with last year to help lower-funded authorities, but that was distributed on the basis of the schools block, one of the three blocks that make up the dedicated schools grant, and as my local authority had its money in the schools block and not the high needs block, it ended up receiving a very much smaller share of the cake.

[The Parliamentary Under-Secretary of State for Education (Mr Sam Gyimah)]

I thank my hon. Friend for bringing this debate to the House, and I look forward to all the contributions. He mentioned the £390 million that the Government put into schools’ funding to help make the funding formula fairer. I want to clarify that that has been done twice: it was done for 2014-15 and it is being done for 2015-16. We are taking, and have already taken, steps to make the funding formula fairer. In response to the point about timing made by my hon. Friend the Member for Warrington South (David Mowat), that shows our intent.

[Graham Stuart]

I am grateful to the Minister. I am also grateful for the £390 million, which was a significant amount to find to help the lowest-funded authorities. A method for distribution had to be found and, under his predecessor, a decision was taken on that, which led to certain discrepancies, though overall there was certainly an improvement.

[Jo Churchill (Bury St Edmunds) (Con)]

Bury St Edmonds and the broader area of Suffolk were grateful for that uplift. However, it took us from 121st to 116th. We are still £260 a pupil behind the national average, which means we are very far behind the schools with the highest funding.

[Graham Stuart]

I am grateful to my hon. Friend for that.

[David Mowat]

The Minister mentioned my point, so I want to come back on that. While the £390 million was welcome, it was not a change to the funding formula. We still do not have a national funding formula and, in fact, that £390 million affected Warrington much more poorly than the better-funded Westminster. After the £390 million, Warrington remains 11th from bottom of the 152 authorities. We will come back to that.

[Graham Stuart]

I am grateful to my hon. Friend. That is why we need a whole new look at this and a national funding formula. As a result of issues relating to the blocks that colleagues may or may not have followed—it is complicated—after the £390 million, the East Riding became the lowest-funded local authority in the whole country. Members can imagine the gratitude my constituents felt: the then Chairman of the Education Committee and leading member of the campaign for fairer funding had somehow dragged the East Riding from being the third or fourth lowest-funded authority to the very lowest. I had to put my hand up and say, a little plaintively, “Well, we did get £1.8 million more.” But relatively speaking, we fell to the bottom. We can all see why people were not very happy, and they would like to know that there was a rationale. Someone has to come bottom, but let there be a rationale for that.

If we cannot develop a rationale, we should put people on the same money. In the Parliament before last, the all-party group on rural services conducted an inquiry on health and education funding. Professor Mervyn Stone, emeritus professor of statistics at Oxford University—a marvellous man with a beard like a biblical prophet’s—said, “If you move to equal funding per pupil or per patient across the country, you’d have something fundamentally unfair, because of the variety of costs”—I hope I am not unfairly putting words into his mouth—but we would still have something far fairer than any of the structures that anyone has come up with so far, let alone implemented in Government. Equal funding would be fairer.

Our call today is not for perfection but for a significant move to close the gaps. It is worth saying to colleagues who represent London seats that some areas of London—a few, admittedly—would benefit from a new national funding formula. Under the recommendations submitted to Government by the F40 campaign, which is the group of lowest-funded local authorities, there would still be, on average, more than £1,000 more per pupil in London than in the rest of the country. Take a class of 30. Whether it is in London or Warrington, there will be a classroom, kids and a teacher, and there might be a support assistant. A school in London will have £30,000 more a year to run that. Costs are higher in London, but not that much higher. It has to be right to move to something that is fairer to everyone.

Before the debate, I asked headteachers in Beverley and Holderness about the challenges they face. I will quote some of the problems that they highlighted. One said:

“We reduced staffing by reducing the number of cover supervisors and downsizing a number of teaching subject areas.”

Another said:

“Fewer sporting competitions—we can’t afford to pay for transport to away fixtures”—

imagine the cost of doing so in a sparsely populated rural area. Another said:

“Provision is stretched and children receive less intervention time”.

Another said:

“Resources are not being replaced or updated as we would like. The school guided reading scheme has been on the subject leaders’ development plan for the last 2 years and it is something that we cannot afford.”

That is the reality on the ground in schools in my constituency.

Those problems are not unique to the East Riding of Yorkshire—colleagues from up and down the country will testify to that, as is evidenced by the fact that there are so many of them here today. That is why the F40 group of local authorities, for which I serve as a vice-chairman, has come together to make the case for fairer funding. I pay tribute to the F40 campaign. It is led by Leicestershire Councillor Ivan Ould, who along with other F40 representatives has campaigned with great determination for almost 20 years. It is to the credit of the Government and Ministers that they are now listening to the campaign and are going to act.

I know colleagues will want me to say that we all owe a debt of gratitude to my hon. Friend the Member for Worcester (Mr Walker). He was a tireless champion of the issue in the previous Parliament, and I know he continues to be highly supportive in his new role as Parliamentary Private Secretary to the Secretary of State. It is a delight to see him here.

Progress is being made, in the form of the extra £390 million that was allocated as a down payment towards fairer funding in 2014, as well as through the Government’s manifesto commitment to make that extra resource part of the baseline funding settlement. The Minister said that there have been two parts to this: last year’s £390 million and this year’s; I know it is going to be every year from now on.

[Mr Gyimah]

It is in the baseline.

[Graham Stuart]

Listeners might have thought that it might not appear next year, and I would not want anyone to have that misapprehension.

[Andrew Bingham (High Peak) (Con)]

My hon. Friend is paying tribute to many people for their work on this issue, but no one has done more than he has, so I pay tribute to him, as I am sure they would. Derbyshire too is disadvantaged by the budget. He mentioned the £390 million and used the term “down payment”. It is pleasing that the money is now in the baseline, and that the budget is there, but it is still only a down payment on solving the problem, and not the solution. Does he agree?

[Mr Charles Walker (in the Chair)]

Order. Before Mr Stuart continues, I remind him that he has spoken for nearly 25 minutes. He has been very generous in taking interventions, but a huge number of colleagues wish to take part in the debate.

[Graham Stuart]

I am grateful to you for that timely reminder, Mr Walker, although I find that I am horribly few pages into my speech. I will have to truncate it.

The clock is ticking. We want to hear from the Minister about when we will have proposals for consultation. The gap between the highest and lowest-funded local authorities has grown steadily. Let us say that one local authority is on £6,000 per pupil and another is on around £4,000; if we give 2% to each, the cash gap will widen—that is obvious, really. That cannot be allowed to continue.

I am aware of how many other colleagues are ready to speak, but I will say just a little more. I have touched on how a fairer system would affect different areas. Barnsley would see the largest funding gain if the F40 proposal were introduced, and other deprived councils, including Leeds, Doncaster, Knowsley, Gateshead, Sheffield and Sunderland, would all make triple-figure gains per pupil under that proposal. A new formula would also restore fairness for the more rural counties of England, such as the East Riding, which failed to benefit from new Labour largesse.

A redistribution of resources is both right and fair. It should probably be phased in—I would say over three years—to mitigate the impact on those who will lose out. Russell Hobby, the general secretary of the National Association of Head Teachers, supports fairer funding. He is right when he says:

“There is no possible way to arrive at a fairer formula without taking money away from schools already facing cuts.”

He is running a members organisation, but has taken that on board. It is brave for a trade union leader with members in schools across the country to accept the logic and say, “Some schools will have to lose, but that has to happen for us to have fair funding.” If he and Brian Lightman at the Association of School and College Leaders are prepared to face their members, some of whom will lose out, and say that a different settlement is right, surely Ministers should grasp the nettle and make sure it happens. There is no way that we can defend a settlement under which there is a gap of more than £2,000 per pupil between the best-funded and least-funded 10 authorities.

I am delighted to see so many colleagues in the Chamber, and to see the Minister in his place. I know he has worked tirelessly on this issue in a difficult funding environment. We all look forward to hearing what he will do to bring about an end to this inequity, which has gone on too long.

[Several hon. Members rose—]

--- Later in debate ---

[Neil Parish (Tiverton and Honiton) (Con)]

It is a great pleasure to serve under your chairmanship, Sir David. I thank my hon. Friend the Member for Beverley and Holderness (Graham Stuart) for his persistence. I also thank the right hon. Member for Exeter (Mr Bradshaw). Similarly, I thank my hon. Friend the Member for Worcester (Mr Walker), who fought hard in the last Parliament for fairer education funding, and who continues to do so in this one.

All of us seem to have been fighting for a change for years. I have huge faith in the Minister—I really have. In “Yes Minister”, one of the characters says, “That will be a very brave decision, Minister,” and we want this Minister to make a very brave decision. The £390 million in funding that was introduced in the last Parliament, and which is going into the base budget, is very welcome. In the end, however, it will not cure the underlying problem. If we just put a bit of money in each time, we will not alter the league table at all. Devon went from fifth from the bottom to sixth from the bottom. While that is welcome, we want a huge amount more to be done.

My constituency, which is by far the most beautiful in the country—not that I am biased—contains a huge number of small schools, which have federated. The headteachers share many schools. There are great teachers and great classroom assistants. People are working really hard, and they deliver a very good education. However, if they can deliver a good education, why are some other areas getting so much more money? Why is it fair for things to be like that? Why can some of that money not be shared with other areas?

Local government funding seems to be one of those issues, like education, that is so complex that Governments over the years have decided—almost with fear and trepidation—not to alter it, because that would cause so many problems. However, we have to alter it; otherwise, we will not deliver on what we have promised.

[Graham Stuart]

I would like my hon. Friend to know that, when I started campaigning for fairer funding in local government and education, I had blond hair. I have been doing this not just for eight years—I first raised the F40 in 2005. Does my hon. Friend agree that the Government need to be courageous when they come forward with proposals? They need to be ambitious and really lift authorities that have been disadvantaged for too long. At the end of this, we have to have the courage to do something significant and level the playing field, albeit that it will take time to bring these things in.

[Neil Parish]

I am glad to see that my hon. Friend still actually has his hair, albeit that it is white. Seriously, though, all of us here—there are 30 Members here, and there were more when we started the debate, on a one-line Whip on a Thursday—have been fighting hard on this issue. What I want to tell the Minister is that we need to be brave enough about funding. We need some sort of siphon to take money from the top and spread it gradually to the bottom, or the anomaly will never be put right. The current situation is wrong for those of us whose constituents have high aspirations but who need more funding to raise them even higher. We need that to be dealt with. All our constituents pay the same taxes, so why should their children not benefit? Other hon. Members have mentioned how schools have great parents, who raise money to help; and that is all very good, but, as I have said, it will not deal with the funding problem.

My constituency has further education colleges in Axminster and Honiton, and Petroc college in Tiverton, and all receive reduced funding. If we have aspirations for young people going from primary through secondary and on to FE or university, the education must be provided. What the Government are doing about apprenticeships is great, but good colleges are necessary if the apprenticeships are to be of real value. All those things fit together.

Tiverton high school is on a flood plain, and in 2012 it was nearly flooded. We need to find funding so that it can be rebuilt on higher land—land is available. All that takes time, I know, but we must ensure that we are treated equally. Our fear is that we are not being treated equally. Since the general election the west country is virtually all Conservative—apart from the little patch of red that is the constituency of the right hon. Member for Exeter, which we understand. My point is that the Government have a lot of responsibility. My hon. Friend the Member for Chippenham (Michelle Donelan) mentioned, as other Members have, the Government’s commitment to put the situation right. I reiterate my huge confidence in the Minister and I will invite him to Devon to see what a great job our schools are doing, and what refurbishment and extra funding they need. The Government will settle the matter, and put it right. Again I ask the Minister: please, be brave.

--- Later in debate ---

[Kevin Foster (Torbay) (Con)]

It is a pleasure to serve under your chairmanship again, Sir David. I congratulate my hon. Friend the Member for Beverley and Holderness (Graham Stuart) and the right hon. Member for Exeter (Mr Bradshaw) on securing this debate.

Thanks to the good education that I received, I know that 5 November is quite an ominous day to be giving a speech in Parliament, but thankfully I am not a king and it is not nearly four hundred years ago, so perhaps we will be safe today.

It was interesting to hear my hon. Friend the Member for Wells (James Heappey) talk about aiming for mid-table mediocrity in the premier league; I think that at the moment Torquay would be happy to be in the league.

Coming on to the serious point, I am delighted that this debate has been secured so that we can talk again about the unfairness in the current funding system. That is why I am particularly delighted to see my hon. Friend the Member for Worcester (Mr Walker) here today. I know that he will be noting down every point made today, given the impact of this issue on his own constituency and his own lengthy record of campaigning about it.

I will focus on the fact that there is a need for a fairer settlement and a fairer funding system overall. It is tempting to get into Torbay versus Tower Hamlets, or Torbay versus Plymouth, but for me this issue is actually about having a fundamentally fairer system for the allocation of resources, and not a system based on history. In 10 or 20 years’ time, thanks to the massive success of the long-term economic plan for the south-west, Torbay might have become one of the most prosperous parts of the country, so the formula may change and changes made now might not help us in the future. However, I would like to see change, because this is fundamentally about fairness—allocating today’s resources to today’s priorities, and not funding according to historical council spending patterns or considerations that might have been relevant once but are now distant.

What particularly brought this situation to light was the Public Accounts Committee report on the pupil premium, which discussed the fact that the funding for deprived pupils with exactly the same needs can vary by up to £3,000 per pupil. That is a staggering difference and, as our report concluded, such variations make it much harder to bring effective strategies to bear.

[Graham Stuart]

Does my hon. Friend agree that it is not just the Minister whom we are challenging today? It is delightful to see the hon. Member for North West Durham (Pat Glass) representing Her Majesty’s Opposition, as today is also an opportunity for the Labour party to set out that it is committed to fairer funding and accepts that there will be the need for redistribution; it will be painful, but it is right that it should happen.

[Kevin Foster]

Yes indeed, and let us be clear that the council that would benefit the most from the F40 proposals is Barnsley. If one was looking for an example of an area that one would have thought the Opposition would be committed to wanting to do something for, it would be that one.

For me, this is not about wealthy parts of the country versus deprived parts of the country. There are parts of my constituency that are quite wealthy, but they are the older parts—the places that are less likely to have young families with children going through school. The areas in my constituency that are the most deprived and that have the most challenges are the ones that have the most young families with children going through school. I was delighted to hear my hon. Friend the Member for South Suffolk (James Cartlidge) make the point that education is the ladder out of deprivation.

[Kevin Foster]

I totally agree with my hon. Friend. We need up-to-date information and an up-to-date funding formula. Let us be candid: a hundred years ago, Liverpool was a booming port that was producing a tax surplus. Now, the situation there is the other way round, because of changes in industry. It would be strange to hear arguments that we should base funding today on what the economy was like a hundred years ago. Equally, if we do not change the formula and do not move on, people can find themselves living in areas that were once deprived that still receive extra support even though they are no longer deprived.

This is about making sure that pupils are fairly funded, because even in the most prosperous parts of this country there will be families who are struggling and who need the ladder of opportunity that good, solid education provides, so that they can get the jobs and the skills, and share in the aspiration that many of us have.

[Graham Stuart]

My hon. Friend is very generous in giving way to me again. It is also important that people outside this place do not think that this issue is about stopping recognition of deprivation. The pupil premium exists precisely to meet the needs of those in deprivation, but we must ensure that there is not double-counting of deprivation and that we have a system that is fair to every child, wherever they live.

[Kevin Foster]

Absolutely. I agree with my hon. Friend that what we want is the funding following the need and not following the postcode that people happen to live in. That is why the pupil premium was introduced and it is why the PAC was right to highlight a £3,000 difference in pupil premium funding based not on need or the type of education that a school has to provide or the facilities it needs, but on the different postcodes in which pupils live. Nobody feels better off because they move from one postcode to another; nobody says, “I’m feeling hugely better off because I’ve moved a couple of hundred metres down the road and I’ve crossed a municipal boundary.” People feel better off if there is actually more money in their pocket and more income in their household. It is right that our funding formula should follow the need and not historical funding allocations.

That is not to say that schools in my area are not doing well. There are schools, such as Curledge Street academy and Ellacombe academy, that do extremely well and that have really turned around, partly due to the academies programme during the last few years. They deliver excellent results and give students the ladder of opportunity that we all want to give students. We want to send a message to them that a fairer funding scheme is on its way.

That is why the Government’s actions over the last five years are very welcome. They have made a difference. I accept that things cannot change overnight, but what we want to see is what the PAC called for, which is a timetable to resolve this issue, which we can then use to move forward.

This is not about rural versus urban, or about the north of England versus the south of England. We can see that in the diversity of constituencies that are represented in the debate today, ranging from Stockport to the south of Devon. This is about fairness, and having resources allocated on the basis of need and not on the basis of historical anomaly. That is why it is right that we have had this debate today; that is why I hope the Government will now take things forward and find a solution; and that is why I am pleased to have spoken in this debate.

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[Carol Monaghan]

The Minister must have different figures from me, because across Scotland we are seeing the attainment gap reduce and pupils from more disadvantaged backgrounds being more successful in accessing higher and further education than ever before.

One of the great things this afternoon has been the positive language used about the teaching profession, which is reassuring to hear. Often teachers hear phrases like “failing schools” and “poor teaching”, and they end up being blamed for a lot of society’s problems, rather than credited for the work they do in trying to tackle the very same problems. I am reassured by what I have heard, and I suggest to all Members here today that they continue to use that positive language, because it makes such a difference to teachers.

The hon. Member for Beverley and Holderness talked about flat cash and not wanting to increase the education budget. I would argue with that. Governments have difficult choices to make, and they decide where money is spent. If education is a priority and our young people are valued for the contribution they can make to the country, we should be investing properly in education.

[Graham Stuart]

It is worth putting on record that with the number of pupils expected to increase by 7% in England over this Parliament, there will be a 7% increase in cash terms in the schools budget. That is in the context of a need for a big readjustment across Government spending to take us into surplus and not to give the very children we are trying to educate further debt to shoulder in years to come.

[Carol Monaghan]

I thank the hon. Gentleman for that. He spoke about the discrepancy between neighbouring schools in neighbouring areas, which was a real eye-opener for me. We do not have those discrepancies in Scotland, but I imagine they impact on parental choice on the schools they wish to send their children to, which is an issue.

The right hon. Member for Exeter talked about further education underfunding. We have to consider that education does not always stop on leaving school. Different pathways are open to our young people in education. For many young people, especially those from disadvantaged backgrounds, further education offers a pathway for them to continue their education.

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[Carol Monaghan]

The right hon. Gentleman raises some points that have been raised time and again. Difficult choices had to be made on college places. Places were cut—places that were not leading to employability and places that did not give our young people the best chances. Tough choices had to be made, and places that led to employability were protected. The overall number of college places has not changed; the range of courses may be different.

The right hon. Gentleman mentioned attainment dropping since 2012. It is interesting that we see attainment dropping at the same time as austerity was biting. We cannot separate attainment and poverty. The two are inextricably linked. As soon as we see austerity, we see issues with our children.

[Graham Stuart]

Will the hon. Lady give way again?

[Carol Monaghan]

No, I am fed up of giving way. [Laughter.]

I have already mentioned the targeting of pupils in deprived areas, which is really important. Early intervention and the Scottish attainment challenge, which is supported by a £100 million Scottish attainment fund, are targeted at primary school pupils in deprived areas to ensure they are able to reach their potential.

The hon. Members for Stockport (Ann Coffey) and for Shrewsbury and Atcham (Daniel Kawczynski) talked about all the extras that may go when education funding is tight. There was mention of outdoor education and parents raising money. Another issue is that teachers end up buying resources for the school. Teachers’ salaries are not at the levels they should be, and if they have to eat into their salaries to buy resources, that is a huge issue, so we need to think about that.

Various Members mentioned teachers’ pay. Again, this is another fascinating point for me. The hon. Members for Banbury (Victoria Prentis), for Louth and Horncastle (Victoria Atkins) and for Cheadle (Mary Robinson), to name but a few, mentioned issues with attracting highly qualified, good teachers to their schools. In Scotland, there is parity for teachers’ pay across all local authorities and schools and pay is set by the General Teaching Council for Scotland in collaboration with the unions, so we do not have the same issue. A similar situation in England might make a huge difference to some of the problems that have been discussed.

I am almost finished, but I want to pick up on something that the Member for Tiverton and Honiton (Neil Parish) said. He described his constituency as the most beautiful in the country. Although I have not been there, I accept that that is true in his country, but in my country, there are many more beautiful constituencies.

As education is a devolved matter, I have suggestions, not questions. First, ensure that teachers are valued and that they understand that value by continuing to use positive rhetoric, and by ensuring that wages are set at a level standard across the country. Intervention for pupils with particular difficulties, who are disadvantaged by poverty or background, should continue. If that needs funding, it should be funded. If the Government are truly interested in ensuring a level playing field, not only across the country but for pupils from different backgrounds, I suggest that reinstating the education maintenance allowance for 16 to 18-year-olds from deprived backgrounds would make a huge difference in allowing them to remain in education and to access further and higher education.

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[Pat Glass]

Before the election, Labour also promised to introduce a review of school funding. We want to support the Government as they move forward with their review, but we are clear that funding has to be fair and just. It cannot simply be a recycling or shifting of existing resources within the system from those with greater needs to those with less great needs. One or two people said that children with the same levels of need must receive the same levels of funding. We support that in principle, but we want to see new money in the system.

The basic inequalities in the system go back a long way. My right hon. Friend the Member for Exeter was absolutely right when he said that its roots lie in the old standard spending assessment. I read the Hansard from the previous debate just before the election. The then shadow schools Minister, my hon. Friend the Member for Cardiff West (Kevin Brennan), said that the formula was known only to three people and

“one was dead, one had gone mad and the other one had forgotten”.—[Official Report, 10 March 2015; Vol. 594, c. 260.]

I am not sure where I fit into that, but there are advantages to being around the education system for a long time and having some degree of shared memory of all this.

[Graham Stuart]

Will the hon. Lady give way?

[Pat Glass]

I will just finish this point and then I will be happy to give way.

Historically, local authorities that prioritised education and spent above standard spending assessment—sometimes a great deal above SSA—were often metropolitan authorities that had their funding simply rolled forward into the schools block of the dedicated schools grant, and those authorities, often counties, that spent at or under—sometimes significantly under SSA—had their underspends rolled forward into the schools block of the SSA. Those are the roots of why we are where we are today.

[Graham Stuart]

I am grateful to the shadow Minister for giving way and I congratulate her again on her post. She said she would expect new funding to come into the system. Was she ruling out redistribution? It is politically difficult. The previous Labour Government did not want to go there: although many Labour areas would benefit, perhaps more would lose. I recognise the political difficulty, but surely similar children in similar schools in similar circumstances should get similar funding. If we accept the principle and accept that it is wrong now, we have to accept redistribution. Does she accept that principle and support those of us who, like the Minister, will have to take the difficult decisions?

[Pat Glass]

I will address that point as I make my argument.

It has been made clear today that however we came to be where we are, we all now agree that pupils with similar or the same needs throughout the country should not receive such different levels of funding. It is less clear how to resolve that, and it will not be easy to achieve. The Prime Minister has decided not to protect the entire education budget in real terms. The Institute for Fiscal Studies has highlighted that over the course of this Parliament per-pupil funding will fall for the first time since the mid-1990s, which will make it that much harder for the Government to deliver a genuinely fair funding system.

The Secretary of State told the House last week that the Government remain committed to implementing their manifesto pledge to make funding fairer. She told us that she will protect the schools budget, which she has promised will rise as pupil numbers increase. The IFS says that that is not going to happen, but we will give her the benefit of the doubt. She also highlighted the progress she has made in providing the additional £390 million this year for those areas with the lowest levels of funding, and said that that will continue next year.

But that is the rhetoric. As the hon. Members for Beverley and Holderness and for Shrewsbury and Atcham (Daniel Kawczynski) said, the reality in schools is very different. According to the latest National Union of Teachers survey, 60% of school representatives stated that teaching posts have been lost in their school; more than 60% stated that classroom support posts had been lost; and 55% stated that other support posts had been lost. Nearly 60% reported larger class sizes; more than 65% reported a reduction in spending on books and equipment; and nearly 45% stated that teachers were paying more for materials than they were previously. Of particular concern to the Members who mentioned it in their speeches will be the fact that 50% reported cuts in support to pupils with special educational needs. Respondents also noted a greater reliance on non-qualified teachers and teaching assistants.

Although we all agree with the principle that pupils with similar levels of need should receive broadly similar levels of funding, the Minister should reflect on some of the very real concerns that Members have raised today when he is considering the matter and ensure that any further changes are not only fair but just. Like the hon. Member for Gloucester (Richard Graham), I am interested to hear how it is going to happen, how it will be paid for, and what the time scales will be. I want to hear the what, the when and the how.

Schools are grateful for the additional £390 million allocation, but we must be clear that it is not new money and has come largely from a 25% cut in funding to the 18-plus pupil-funding stream and from the massive cuts we have seen to further education funding, with further massive cuts to come. Pupils who access FE or remain in school over the age of 18 are often pupils with SEN, vulnerable children, or children who simply learn more slowly and need an extra year or two to get to the level of their peers. They are the children closest to being NEET. It is neither fair nor just to take funding from that group of children to distribute across the rest of the sector, and it is not fair to take funding from other less well-off parts of the education sector. We particularly do not want to see another smash and grab on the FE sector.

I agree with fair and transparent funding in principle, but I repeat that new money is required. Funding must be fair to other parts of the system, especially those parts supporting children with SEN, looked-after children and other vulnerable children. It needs to be fair to the higher education sector, and particularly to the FE sector, given what has already happened. It must be fair to rural areas with small schools, which have been mentioned by a number of Members. My constituency is rural and has a school with just 12 children. The very existence of such small schools would be threatened by a system that makes no financial allowance for size. There will have to be transitional arrangements to ensure that no area or school loses out heavily.

I want to give the Minister the benefit of my experience, which I feel I will be giving him quite a lot in the months to come. I have a little time, so I will give him two examples. I remember being involved in a local authority where we wanted to change the funding system to make allowances for children from black and minority ethnic backgrounds. We made what we understood to be a small tweak to the system that resulted in a big change, with funding going to a school that was educating the children of the directors and senior managers of a Japanese car factory. They clearly did not need the money. The Minister should be aware that there can be unintended consequences.

More importantly, I do not know whether other Members remember, but in around 2005, schools started to scream that their local authorities were not handing over funding—that it was being top-sliced. The Blair Government at the time responded by naming and shaming local authorities, which then started to scream that it was unfair and was not happening. Someone had the bright idea that it was SEN funding: “SEN funding has gone up massively; that’s what’s causing this.” There was an investigation, and it turned out that an accountant in the Treasury had tweaked a tiny bit of the formula here, which had a massive impact over there. Whatever happens, the Minister must be clear that the changes are properly consulted on; that we know exactly who will be the winners and losers, and by how much; that they are piloted; and that there are transitional arrangements over a period of time.

The Chancellor and the Minister are in real difficulty. Perhaps Government Members did not see, but the Secretary of State’s face was a picture when the Prime Minister promised to continue the infant free school meals programme at PMQs last week. We hear a lot every week about the promise of 30 hours of free childcare, but that is already under-funded by £l billion. I have sympathy for the Minister, because I have been in his position, albeit to a lesser extent. I have been the person who has had to deliver good and outstanding services, but who had to balance the budget amid all the cries for additional money.

I ask every Member present who has called for fairer funding for schools to remember where the last tranche of funding came from—a smash and grab on FE. Every one of us has an FE college in our constituency. We know that they have been hit massively already and are facing a further 24% cut in funding. Our colleges have been more than decimated by cuts, and we do not want to see more. All Members present will want to see a new funding system that is fair and just to all children and all sectors. With that, I am happy to sit down and let the Minister try to square the financial circle.

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[Mr Gyimah]

As the right hon. Gentleman knows, there has to be a referendum for a council tax increase of more than 1.99%. We are talking about how central Government deal with revenue funding for schools. We have got to the point where schools’ capital needs are based on need. If the schools in a constituency have serious problems, we have a thorough process for identifying their needs and allocating funding appropriately, but we do not have a similar process on the revenue-funding side.

It is patently unfair that Knowsley receives nearly £750 less per pupil than Wandsworth, given that more pupils in Knowsley are entitled to free school meals. It is unfair that a secondary pupil with low prior attainment would attract more than £2,000 in Birmingham but only £35 in Darlington. In four local authorities they would not attract any funding at all. That is not right. The hon. Member for Stockport (Ann Coffey) spoke very clearly about that injustice.

In the previous Parliament, we took a big step. To those who say that the Government should be brave, I say that we have been brave. In an era of austerity, we invested £400 million to help level the playing field.

[Graham Stuart]

The £390 million is in its second year, and that will be the baseline. Will the Minister consider looking at the allocation again, because only a little more than half of it went to the lowest-funded authorities? If those that should not have had it have only recently received it, their pain in losing it will be less. The £390 million could be repurposed to lift up the lowest-funded authorities together. That would remove the outliers, even before we get to the national funding formula.

[Mr Gyimah]

I thank my hon. Friend for that point. I agree with the hon. Member for North West Durham that this is a complicated area. What happened with the £390 million is that local authorities whose spending was low on the high needs block but high on the schools funding formula did not see the full benefit, because the £390 million was allocated purely on the basis of schools funding. That means that any reform in this area has to take into account the different blocks of the dedicated schools grant: schools funding, high needs and early years. Some local authorities shift money among those different budgets, so we must look at this in the round.

Let me return to the difference that the £400 million has made. Buckinghamshire received a further £80 million and Cambridgeshire received more than £23 million, or £311 for every pupil. Bury, Surrey, Shropshire, Salford and more than 60 other authorities benefited from additional funding for their schools. Money was not being shuffled into Conservative areas from other local authorities. The beneficiaries of the £400 million, which is now the baseline, are underfunded local authorities. We looked at underfunding based on characteristics; we did not pick an arbitrary number.

[Graham Stuart]

Westminster was a beneficiary, was it not? I may have got that wrong. Clearly, the money was not always going to the lowest-funded authorities. Only a little more than half went to the lowest-funded authorities. There is a real opportunity to look at this again.

[Mr Gyimah]

As my hon. Friend knows, we are having this debate because the Government want to go further than £390 million. The changes in some hon. Members’ constituencies over the past 10 years have been significant. In Dorset, the funding schools receive does not reflect the proportion of pupils eligible for free school meals, even though that proportion has almost doubled. In Lincolnshire—this relates to the point made by my hon. Friend the Member for Louth and Horncastle (Victoria Atkins)—the proportion has doubled, but the funding has not changed at all. In other areas, the number of children eligible for free school meals has gone down by 40%, but the authority still receives the same amount of funding. The distribution of funding today does not reflect the needs of our children, so it has to be changed.

It is widely recognised that the impact of the distribution is hugely unfair, as many hon. Members have said today. A child who goes to school in Trafford will attract £4,228, but in next-door Manchester they will attract £5,081. At the extremes, Wokingham—my right hon. Friend the Member for Wokingham (John Redwood) is no longer in his place—receives £4,151 for every school pupil, while Tower Hamlets receives £7,000, or 70% more. Of course, we have to ensure that Tower Hamlets receives the funding it needs, based on the characteristics of its pupils, to enable its schools to do their job, but a discrepancy of 70% or more shows that rooting the funding formula in the historical allocation has allowed things to get out of kilter.

As I said, we have made some progress, and many schools that are doing an excellent job are benefiting. I want to draw hon. Members’ attention to York, because my hon. Friend the Member for York Outer (Julian Sturdy) is here. It is one of the lowest-funded authorities in the country, yet 86% of its primary pupils and 93% of its secondary pupils are in good or outstanding schools. I congratulate the teachers in York on the excellent work they are doing. However, schools in York could do even more to help us in our mission to build a world-class education system if their funding matched the schools’ and pupils’ needs.

A system in which a school can get 50% more money for providing the same education to the same pupils just by moving from Barnsley to Hackney is not fair to schools, parents or children. To be fair to taxpayers at a time of austerity, we need to ensure that we get the most out of every pound we spend on our schools. Although we have protected the schools budget overall, we will not make the most of it until it is targeted where it is needed.

[Graham Stuart]

Perhaps the Minister is about to move on to what I am going to ask him. Can he set out the principles that will be used, so that we have some idea of the parameters that will be used to determine allocation? This will be politically challenging, so it is important that the terms on which it is done carry the widest possible support across the House.

[Mr Gyimah]

I thank my hon. Friend for his third intervention so far. The good news is that there is consensus on the need for reform, and support for how we plan to get there. Devising the new system will be a big, difficult job. There is no other way of describing it. We are being encouraged to move quickly, but also to listen; the best thing to do as we set out our proposals, soon after the spending review, is consult carefully and widely with local authorities and schools. That will be our approach.

Also, I received the letter sent to the Prime Minister from over 100 Members, led by my hon. Friend the Member for Beverley and Holderness.

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[Mr Gyimah]

What I can say on timing is that, whatever the changes, schools need enough time to adjust and plan; I have heard that from a lot of schools. That will guide us in implementing any reforms.

[Graham Stuart]

2017-18?

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[Graham Stuart]

It has been a pleasure to serve under your chairmanship, Sir David. What a delight this is! It was 10 years ago when I first asked a question about F40 funding to a Labour Minister, and I got a singularly inadequate reply. It was in March 2006 when I got my first debate on this subject. I called for an urgent debate in January 2007, and secured one in May 2007. This has been going on for a long, long time. The Minister and the Government are committed to delivering fair funding for our schools; that is long overdue and very welcome.

I think colleagues would like to hear more about the principles; we will perhaps do so when the Minister comes forward early in the new year—certainly by the end of January—with proposals to be consulted on.

[Mr Gyimah]

No timings.

[Graham Stuart]

We need more on the timing, because while consulting widely and seeking consensus is credible, the Government are committed to this. It does not require consensus; it requires the implementation of the manifesto promise. Seeking consensus is entirely right, but requiring it is a different matter altogether.

Then there is the element of ambition. How far are the Government prepared to go? I think it was a Treasury official who said, years ago, “Minister, the people you make happy, you never make as happy as the people you make unhappy, unhappy.” That is the problem. When we finally get the proposals, we and our constituents will grunt and say, “About time,” but there has to be redistribution; it is unfortunate that the Opposition spokeswoman, the hon. Member for North West Durham (Pat Glass), was not prepared to say that. As it is, there has been a 7% increase in the education budget in this Parliament because of the number of pupils. Given the context, there has to be redistribution. Some people will lose, which means looking them in the eye and explaining why it is fair and right that they should do so. That takes courage, but if we are going to do it, we could do with both sides of the House joining in and accepting that principle. I welcome Labour’s support for fairer funding, but it needs to be followed by the recognition of the need for redistribution.

In my final seconds, I want to comment on the contribution of the hon. Member for Glasgow North West (Carol Monaghan), the Scottish National party spokeswoman. It seems that the free university education of middle-class children, who are predominantly the most likely to go to university, has been funded at the expense of working-class kids in further education colleges, who have had their vocational opportunities stunted as a result. I do not think that the SNP has much to teach us about that, although they do seem to have more equal funding of schools, per pupil. It seems a good principle to have pretty much level funding, except when the reasons not to are overwhelming, such as higher teaching costs in London. That does not mean, however, that we need have the gross discrepancies that we see today.

It has been a great debate, and I thank all my colleagues for being here. I look forward to the Minister coming forward with proposals as soon as possible.