School Funding

John Pugh Excerpts

Wednesday 25th January 2017 Commons Chamber

[John Pugh (Southport) (LD)]

This week, the Public Accounts Committee reviewed the National Audit Office report on the financial sustainability of school funding, and the most helpful thing I can do now is to give the Chamber some flavour of how that went. Present were officials from the DFE, including the permanent secretary, Jonathan Slater, but the session with them was preceded by a panel made up of headteachers and Russell Hobby of the National Association of Head Teachers. Understandably, they spoke of the current severe financial pressures, the effects of tight funding, and the strategies they have to deal with that, which will be familiar to those who have listened to the debate so far—things such as reducing the curriculum; increasing class sizes; phasing out support for special needs and mental health; cutting out extracurricular activities, professional development and school trips; and increasing teacher contact time.

Unsurprisingly, the officials from the Department did not altogether recognise that picture. Interestingly, though, Government Members should be aware that they did not dispute any of the financial facts. There was no disagreement whatever that schools have to save £3 billion in the current spending round, which represents an 8% cut by 2020, or that this is the toughest challenge since the 1990s, when the previous Conservative Government were in power. The Department simply did not dispute the financial facts that more schools are in debt and that debts are growing bigger; nor could it, because it had agreed the report with the NAO.

The Department’s argument was not about the financial facts themselves, but about the effects of those facts. It suggested that if every school procured efficiently, particularly on things such as heating and insurance, used its available balances and managed its payroll effectively, disaster could be averted. The Department stands ready, as does the Secretary of State, with the advice, tools, tutorials and data to help schools to do that. It thinks that disaster can be averted—that it is, in the words of the permanent secretary, “doable”.

My view is that there are good reasons for scepticism. The DFE exercise, such as it is, has largely been a desk exercise. The Department knows little about the individual circumstances of schools, and how could it? There are just too many for central Government to gauge and understand. It is a fact that not every school can actually reduce its payroll costs—not if it is endowed with experienced and established staff, and not if it needs to take up the slack caused by the reduction, or abolition, of the educational support grant. The latter is particularly true for small schools. Not every school can reduce its procurement costs—not if it is in an old, leaky building, has already reduced them, or is tied into long-term contracts. What is doable in theory is simply not doable in practice.

The most chilling passage in the NAO report is at paragraph 2.6. I do not have time to enlarge on it, but I advise Members to read it very carefully.