School Funding (London)

Helen Hayes Excerpts

Wednesday 29th March 2017 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

I beg to move,

That this House has considered schools funding in London.

It is a pleasure to serve under your chairmanship, Mr Hanson. I am pleased to have secured this debate so that Members can highlight the specific impacts that the proposed national funding formula will have on London schools. I am grateful to the Minister for meeting me last week, together with my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle), my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and the leader of Southwark Council, to discuss the challenges that schools in Southwark and Lambeth will face as a consequence of the national funding formula proposals.

Since I was elected almost two years ago, there have been only a handful of issues on which my constituents feel as strongly as they do about the schools funding formula, and few issues around which people have mobilised on such a large scale. In the past few weeks, I have attended meetings in Lambeth and Southwark with a total of more than 500 parents. A further 100 parents and children joined a protest in Dulwich last week, and hundreds more have been in touch with me by email and letter and on social media. I want to speak about the impact the Government’s proposals will have, what exactly is at stake and why it matters so much. I have some specific asks to make of the Minister.

The new national funding formula will see 70% of London’s schools receiving cuts to funding. The proposal comes at a time of unprecedented budget pressures in our schools as a consequence of a series of unfunded costs: the national minimum wage increase; employers’ pension contributions; employers’ national insurance contributions; inflation; and, for local authority schools only, the apprenticeship levy. In that context, the additional cuts introduced by the schools funding formula will be unsustainable for many schools in London. London Councils calculates that the combined impact of introducing the national funding formula at a time of wider budgetary pressure means that collectively, London schools will lose £360 million in 2018-19.

The Conservative manifesto pledged that the funding accompanying every pupil into school would be protected, but the National Audit Office is clear that per-pupil funding has not been protected in real terms. In London, the proposed national funding formula will clearly break that pledge further. The cuts will not fall evenly but will fall disproportionately on areas of London with the highest levels of deprivation. Therefore, while Croydon Central will gain £4.4 million for its schools, West Ham stands to lose £4.4 million, East Ham loses £3.6 million and Bethnal Green and Bow loses £3.5 million.

[Stephen Timms (East Ham) (Lab)]

I am grateful to my hon. Friend for highlighting the scale of the cuts in my constituency and the scale of the concern among my constituents about that. I have had letters from lots of teachers at Central Park Primary School about the £710,208 being taken out of its budget. Does she agree that that is quite wrong?

[Helen Hayes]

I agree with my right hon. Friend entirely. The level of pressure our schools are being asked to bear would be unacceptable in any circumstances, but in order to understand exactly how damaging the proposals are, and why parents in my constituency and across London feel so strongly about them, the Government must understand the journey that London schools have travelled in the 14 years since the Labour Government introduced the London challenge programme of improvement for London schools in 2003.

I moved to London in 1996. At that time, parents in the same situation as I am in now, with their oldest child approaching secondary school age, were often trying to do one of three things: move close to a high-performing state or church school; move out of London to a part of the country where schools were better; or educate their children privately. Children whose parents were unable to make any of those choices often attended local schools, which despite the best efforts of their teachers substantially failed generations of children. In my constituency at that time, we had William Penn boys’ school and Kingsdale school, both of which were failing schools that became notorious. William Penn subsequently closed and successfully re-opened as the co-educational Charter School, and Kingsdale was completely remodelled under a change of leadership. Those are now outstanding and good schools respectively.

I have spoken with many parents in my constituency who attended failing schools as children. They remember the crumbling buildings, leaky roofs, shortages of books and materials, very large class sizes and poor discipline. They tell me that any success in their educational outcomes was due to the hard work that they and their teachers put in and happened despite, not because of, the funding and policy environment in which the schools were operating.

The situation could not be more different across London now: 94% of London schools have been judged to be good or outstanding by Ofsted. While London schools were the worst in the country in the 1980s and 1990s, they are now the best. That transformation was achieved through a combination of political leadership, appropriate resourcing, stringent accountability and—most importantly—the hard work of teachers, governors, support staff and parents. I think I speak for all London MPs from across the House when I say that we are deeply proud of our schools and everything they deliver for London children.

Our schools in London deliver for every child. They are not reliant on selection, and as a consequence London children also benefit from being educated in a diverse environment, which helps to build understanding and community cohesion. My children are receiving an excellent education alongside children from every possible walk of life, and their lives are enriched as a consequence. It is that approach, not grammar schools, that delivers the social mobility the Government say they want to see.

London schools are the best in the country, despite having the most complexity among their intake. They have the highest levels of students with English as an additional language, special educational needs and children from deprived households, and they have very high levels of churn, in part due to the large numbers of families now living in the private rented sector, who often have to move when short-term tenancies come to an end.

London schools are able to deliver in that context when they have the teaching and support staff to provide the help and support that every child needs, so that those who need extra help in the classroom can receive it, those who need to be stretched more to fulfil their potential can thrive, and a rich, imaginative curriculum can be offered to all students. The headteachers in my constituency increasingly talk about the new challenges their students face. Chief among them are mental health issues, which are growing in part as a consequence of the pressures children face on social media. They feel the need for additional support in school that students can access, but they are already unable to afford that.

I wrote to every headteacher in my constituency to ask about the impact that they anticipate the national funding formula will have on their school. I want to share just two examples of their feedback today. A primary head wrote to me and said,

“in order to balance the budget this year we had to lose six members of staff. Prior to this academic year we employed one Teaching Assistant per class. This year we have a Teaching Assistant per year group. I can see a time when schools will not be able to afford Teaching Assistants at all. Our building is shabby because we cannot spare the funds to redecorate and carry out minor repairs. Cuts in funding will mean that Headteachers will become more and more reluctant to accept pupils that put a strain on the budget.”

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

I am listening carefully to the hon. Lady and, as I did at the meeting with her and her colleagues, I have paid careful attention to what she is arguing. Is she interested in knowing that in Lambeth, under the new national funding formula, the funding per pupil is £6,199 and in Southwark it is £6,271, whereas in Waltham Forest it is £5,129 and in Surrey it is £4,329? It is that discrepancy that the national funding formula tries to go some way to dealing with.

[Helen Hayes]

I thank the Minister for his intervention. If he bears with me a little longer, he will hear that I am not arguing that schools elsewhere in the country—or indeed in outer London—should lose out as a consequence of the funding formula; what I am interested in is a funding formula that is fair for all schools.

A secondary headteacher wrote to me and said:

“Effectively our budgeting will be reduced by £500,000 in real terms in the next three years...it will make it very difficult for us to continue to provide a high quality education for our students, and will undoubtedly affect our ability to support student achievement and wellbeing. It will also have a negative impact on the workload of our staff who already work incredibly hard day in day out to support our students.”

Those are experienced headteachers, looking at a spreadsheet in the cold light of day and working out the choices they will have to make to accommodate the Government’s funding cuts.

[Paul Scully (Sutton and Cheam) (Con)]

To clarify, are not many of the pressures the hon. Lady talks about, which I certainly do not dismiss, the associated costs, rather than necessarily to do with the funding formula itself?

[Helen Hayes]

My argument is about the cumulative impact of unfunded cost pressures in recent years, and some still to come because of the apprenticeship levy, in addition to the impact that the new funding formula will have.

Seventy per cent. of schools’ budgets are spent on staff, so it will be teaching assistants, speech and language therapists, learning mentors, family support workers, school trips, sports clubs, music specialists and teachers that will have to be cut. Heads across my constituency say that the formula does not work. London schools also face a recruitment crisis, fuelled by the high cost of housing and childcare in the capital, as well as the Government’s failure to meet teacher training targets. More than 50% of London heads are over the age of 50, and the current budgetary pressures, combined with the new inspection regime and changes in the curriculum, are making it harder and harder to recruit. Further reductions in funding will only exacerbate the situation, making it harder for schools to retain experienced teachers and creating a level of pressure in the profession that will cause many hard-working teachers to look elsewhere.

The Government’s stated aim in revising the schools funding formula is fairness. I agree with that aim. There are problems with the current formula in some parts of the country, because of the embedding of resourcing decisions made by local authorities many years ago and their use as the basis for calculating future increases. 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.

London schools should be the blueprint for education across the whole UK, but school leaders in London are absolutely clear that quality will inevitably suffer as a consequence of the funding changes that the Government are implementing. It is simply irresponsible for the Government to put the quality of education in London at risk. Children are growing up in a time of great global change and uncertainty. We feel that today perhaps more than ever, as article 50 is triggered. They need to be equipped with the knowledge, skills and confidence to navigate and compete in a post-Brexit economy. Our schools are essential to that, and to ensuring that children make the maximum possible contribution to the economy and public services in the future.

I ask the Minister this morning to think again and, as he reviews the 20,000 consultation responses that have been submitted, to consider the impact that the changes will have on London schools. I have two specific asks. When I met the Minister last week, it was not clear from what he said that he had recently visited high-performing London schools, so I invite him to visit a primary school and secondary school in my constituency to see at first hand the great work that our local schools do and to understand the current financial pressures that they face.

[Mr Gibb]

I visit high-performing London schools all the time. Most recently I have visited Michaela Community School in Wembley and St Michael’s Church of England School just south of the river in Battersea.

[Helen Hayes]

I thank the Minister; I would dearly love to welcome him to high-performing schools in my constituency, so that he can hear at first hand about the pressures that headteachers are talking about.

Secondly, I ask the Minister to go back to the Treasury and to negotiate again. Spending on schools is an investment that the Government make in the future of our economy. It would take just 1% of the education budget to ensure that no school loses out through the introduction of the national funding formula. I ask him please to think again and not to put the success of London schools and their ability to deliver for future generations of London children at risk.

[Several hon. Members]

rose—

--- Later in debate ---

[Paul Scully (Sutton and Cheam) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hanson. I shall be brief in making a few points about how the costs—and the associated cost pressures that I mentioned in my intervention—affect schools in Sutton.

All hon. Members welcome the opportunity to get fairer school funding. It has been debated at great length in the House over the past few months, with good reason. It is not fair that pupils with similar needs do not benefit from the same funding, and that that depends on where they live. It is right and proper to look at the issue, but that has not happened for a long time because it has been politically difficult. I welcome the fact that it is happening now. The consultation has just finished, and I am sure the Minister will look at the representations made in the responses and present any changes that he feels are appropriate for us to debate further.

Secondary schools in Sutton receive greater funding from the formula, by about 1.4%. Primary schools lose by 0.5%. However, as was mentioned before, many of the issues that headteachers are dealing with at the moment and that they will face going forward are associated cost pressures. With all the changes being made, now is an apt time to consider them.

There is a lot of concern among headteachers—all the headteachers in the area have written to me and the right hon. Member for Carshalton and Wallington (Tom Brake). Some headteachers from the London Borough of Sutton have already met the Minister for discussions. They are concerned about such things as the apprenticeship levy, which affects only some secondary schools and is comparatively low when set against the effects of some of the other changes and pressures. However, I find it strange and puzzling when any public sector institution’s money is churned around, as happens when we give a school funding and then claw some back through levies, rates and such things. I would find it easier if we cut through the bureaucracy and paid schools the money they needed to spend on their pupils.

Schools are not really well placed, especially at the moment, to take on apprentices because they are already training centres—they already train newly qualified teachers, Teach First teachers and other student teachers. Where they might be able to take on apprentices, such as in administration, things have already been cut to the bone, because those are in many ways the first places where cuts can be sought. It then becomes difficult to send anyone out on day release. I have a lot of sympathy with headteachers about the apprenticeship levy.

Many headteachers have talked to me about the 1% salary increase for public sector workers. They say that they want to be able to pay teachers more but, without the requisite funding, doing so would effectively mean an extra 1% cut in their budgets. They are not attracting more funding from the centre to pay for it. Again, I understand their concern. A signal is being sent, and it is pushed on to the headteachers to say, “Sorry. I can’t pay you any extra this year because of budget constraints”—despite the mood music in the media about pressure to pay people the extra 1%.

Another headteacher mentioned the cost of recruitment. It is difficult to get teachers, and especially senior teachers. I have been a governor for many years. When I was the chairman of governors at a primary school, we were looking for a headteacher and put many adverts in The Times Educational Supplement. It cost thousands of pounds each time and the response was woeful. I am interested in whether the Minister would consider a centralised recruitment system that everyone could tap into—one source that teachers can use—which would be a great cost saving for schools. The Department has talked about being able to make savings in schools through such things as procurement. It would be great if the Department could help schools by taking that approach.

I talked about the fact that secondary schools are a net gainer and primary schools a net loser. One reason they are all losing is the local authority formula. The local authority in Sutton has caused two issues. First, it had built up a surplus in the part of the grant it left behind, which has been used over the last few years to cushion some of the pressures. The surplus has now been used up and has finally come to an end. That has not been communicated particularly well to the schools, so there is a little bit of a cliff edge this year. On top of that, the local authority has effectively made a 0.5% cut for many schools to the amount it is keeping back, rejigging and then handing out to them.

Whereas the national formula helps us out a lot, the local formula means that Sutton loses out. It is important that parents and headteachers know exactly where the blockages are. In these times of greater devolution, it is important that the right people are accountable for formulae. I ask parents and headteachers to ensure that they question the local education authority and hold their councillors to account, including the council leader in Sutton, on why that money is being held back.

There is a disparity in Sutton between some of our secondary schools of about £1,000 per pupil—some get £4,500 while others get £5,500 per pupil. We have a number of grammar schools, with six fully and partially selective schools in Sutton. I question the argument about a lack of social mobility. There is a good amount of social mobility in those schools, primarily for Asian communities. We have a big Tamil community and a Bangladeshi community.

[Helen Hayes]

The issue with grammar schools is not what they deliver for the children who are able to access a place there. The evidence across the country shows that children from deprived backgrounds who do not go to grammar schools in areas that have them do demonstrably worse in their education. That is the issue of fairness I was referring to.

[Paul Scully]

That is an interesting intervention, but I can only use the Sutton example. All our schools are excellent, including the ones that are not selective. Indeed, Stanley Park High School in Carshalton and Wallington won The Times Educational Supplement secondary school of the year award last year. All the schools are being brought up in Sutton. A lot of Tamil and Indian families are moving around to be able to access Sutton’s schools. The problem in Sutton is ensuring that white working-class people can get that social mobility. We need to work harder on that.

My final point is that the funding pressures on the grammar schools are such that they are getting considerably less pupil premium per pupil than those in other areas, despite some of them being in average deprivation, because they are in more affluent areas. They are being disadvantaged because of the fixed costs—buildings cost a lot to heat and light, and there are staffing costs. They are losing out to other schools, which are getting pupil premium on top.

I make a special plea to the Minister to consider some of the work being done by grammar schools. Essentially, the funding formula is fair. It is good we are addressing this issue. I would like the Minister to have a look at some of the associated cost pressures and to answer some of the questions that headteachers have raised with me.

--- Later in debate ---

[Mr Gibb]

Thank you, Mr Hanson; I want to respond to all the points that were made in the debate.

We launched the first stage of our consultation on reforming the schools and high needs funding systems in March last year. We set out the principles for reform and proposals for the overall design of the funding system. More than 6,000 people responded to that first stage of our consultation, with wide support for those proposals. I acknowledge the support that the hon. Member for Wythenshawe and Sale East (Mike Kane) has given to the principles of this formula.

We have just concluded a 14-week second stage consultation, covering the detailed proposals for the design of both the schools formula and the high needs formula. Our proposals will target money towards pupils who face the greatest barriers to a successful education. In particular, our proposals will boost the support for those from disadvantaged backgrounds, and for those who live in areas of deprivation but who are not eligible for free school meals—those ordinary working families who are too often overlooked. We are also putting more money towards supporting those pupils in both primary and secondary schools who have fallen behind in their education to ensure that they have the support they need to catch up.

Overall, 10,740 schools would gain funding under our proposals, and the formula will allow those schools to see those gains quickly, with increases of up to 3% per pupil in 2018-19 and of 2.5% in 2019-20. Seventy-two local authority areas will quickly see an increase in their high needs funding, and no local authority will see a fall in its funding.

As well as providing those increases, we have listened to those who highlighted in our first stage consultation the risks of major budget changes for schools. That is why we have proposed to include significant protections in both formulae. No school would face a reduction of more than 1.5% per year or of 3% overall per pupil and, as I have said, no local authority will lose funding for high needs. The proposals will limit the otherwise quite large reductions that some schools, including many in London, would see as the funding system is brought up to date.

The real-terms protection of the core schools budget underpins these proposals. As a result, we are able to allocate some £200 million to schools in both 2018-19 and 2019-20, over and above flat cash per pupil funding. That will combine significant protection for those facing reductions with more rapid increases for those set to gain under the fairer funding formula. High needs funding will see an equivalent real-terms protection.

London will remain the highest-funded part of the country under our proposals. Schools in inner London will attract 30% more funding per pupil than the national average, which is right. Despite the city’s increasing affluence, London schools still have the highest proportion of children from a deprived background and the highest labour market costs, as has been acknowledged in the debate.

We are using a broad definition of disadvantage to target additional funding to schools, comprising of pupil and area level deprivation data, prior attainment data and data on English as an additional language. No individual measure is enough on its own. Each factor reflects different aspects of the challenges that schools face, and they work in combination to target funding. Where a child qualifies for 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 the free school meals factor and the area-level deprivation factor—the income deprivation affecting children index.

The additional needs factors in the formula are proxies for the level of need in the school. We are not suggesting that the funding attracted by an individual pupil must all be spent on that pupil, but that schools with high numbers of pupils with additional needs are more likely to need additional resources. Using the proxy factors helps us target funding on schools that are more likely to face the most acute challenges. I will give way to the hon. Member for Dulwich and West Norwood (Helen Hayes), who introduced the debate, if she wants to come in on that point. If not, I will press on.

[Helen Hayes]

I will come in at the end.

[Mr Gibb]

Very good. In addition to the formula, schools will continue to receive additional funding through the pupil premium to help them improve the attainment of the most disadvantaged pupils. We have also included a mobility factor in our formula to recognise the additional costs faced by schools, many of which are in London, where a high proportion of pupils arrive at different points through the year. We were influenced by the right hon. Member for East Ham (Stephen Timms) in making that change. London schools will receive additional funding to reflect the higher cost base they face from being in London, which is particularly important given that so much of schools’ spending goes on staffing costs. The higher funding for London schools will support them to continue their success in recent years, particularly for children from disadvantaged backgrounds.

I understand the reactions of those Members who are disappointed by our formula’s impact on their constituencies. The formula is not simply designed to direct more money to historically lower-funded areas or areas with the highest levels of deprivation. It is designed to ensure that funding is properly matched to need using up-to-date data, so that children who face entrenched barriers to their education receive the support they need. That includes pupils who do not necessarily benefit from the pupil premium but whose families may be only just about managing.

--- Later in debate ---

[Helen Hayes]

I thank all hon. and right hon. Members who have participated in the debate this morning, and I thank the Minister and my Front-Bench colleague for responding to it. It has been a high-quality debate. The strength of feeling and the passion are clear, and Members have represented the interests of schools in the constituencies very powerfully indeed. There is no disagreement on the principle of fairness for school funding. The concerns that have been expressed this morning are about the impact of a funding formula that will see schools in London losing funding on top of the existing severe cost pressures they are suffering.

The Minister continually refers to total sums of money and the ranking of schools according to their allocation, but that is not the concern. No Member in this Chamber is concerned about where their local authority sits in the ranking of authorities across the country. We are concerned that our schools have the funding they need to deliver the excellent outcomes for our children that they deliver at present. Higher levels of funding are good value when they deliver for children in deprived areas.

The point we are making is that the Government’s approach is putting the quality of education in London schools at risk. That is of grave concern. It is simply disingenuous of the Minister to dismiss the concerns of headteachers in London as a response to inaccurate campaign data. They are looking at their spreadsheets and telling us that the Government’s approach is not working. There is nothing fair about a formula that cuts funding for high-performing schools in deprived areas.

I conclude the debate by reiterating the powerful words of my right hon. Friend the Member for Tottenham (Mr Lammy):

“When London slips back…the nation slips back”.

I urge the Minister to reflect on those words and to think again about the impact that the funding formula will have on the quality and performance of London schools.

Question put and agreed to.

Resolved,

That this House has considered schools funding in London.