School Funding

Justine Greening Excerpts

Wednesday 25th January 2017 Commons Chamber

[The Secretary of State for Education (Justine Greening)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“shares the strong commitment of the Government to raising school standards and building a country that works for everyone; and welcomes proposals set out in the Government's open schools national funding formula stage two consultation to move to a fair and consistent national funding formula for schools to ensure every child is fairly funded, wherever in England they live, to protect funding for deprived pupils and recognise the particular needs of pupils with low prior attainment.”

Members on both sides of the House can agree that we want to deliver a world-class education system that gives every young person the chance to make the most of their talents, no matter what their background or where they come from. Indeed, the true value of an excellent education is that it can open up opportunity and support young people to reach their true potential. For me, education was certainly the route to my having a much better life than my parents had.

We are keeping our promises and our record in government speaks for itself. We now see 1.8 million more children in good or outstanding schools than in 2010. We are keeping our promise by protecting the core schools budget in real terms over this Parliament. The shadow Secretary of State talked about what parents want in schools, but what they do not want in schools is what the previous Labour Government left them with: children leaving school without the literacy, numeracy and qualifications they need; and children leaving school thinking that they had strong grades when in fact what they were seeing was grade inflation. We have steadily sought to change that and to improve our education system. Many young people now leave our education system in a much better place to achieve success in their future life.

[Caroline Flint (Don Valley) (Lab)]

The right hon. Lady will be aware that the Public Accounts Committee, of which I am a member, heard from the permanent secretary, Jonathan Slater, on Monday in our session on the National Audit Office report to which my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) referred. That report does acknowledge what the Secretary of State says about a real-terms increase in the overall budget, but because there are more pupils than was envisaged, there will be an 8% reduction in per-pupil funding. Does she agree with the NAO report and the acknowledgment of her permanent secretary to that effect?

[Justine Greening]

The NAO report makes it very clear that there are cost pressures, which I shall talk about later on in my speech. It also makes it clear that there is significant scope for efficiency in our school system. Although we are raising standards in many schools—nearly nine out of 10 schools are now rated as good or outstanding—many young people are still not achieving the necessary standard in our education system.

[John Redwood]

I welcome my right hon. Friend’s decision on fairer funding. Does she agree that schools in areas such as mine that were at the bottom of the pile under the previous Government’s formula need quite a step up over the next few years because they were very badly done by?

[Justine Greening]

I do agree. We want every child to have the same chance to do as well as possible no matter where they grow up in our country or, indeed, where they start from academically. That is why we must ensure that the resources going into the system reflect our high ambitions for every child wherever they grow up, and that they are distributed to that effect. It is because of this Government’s economic policy, which has seen jobs, growth and the careful management of public finances, that we have been able to protect the core schools budget in real terms over the course of this Parliament. In fact, our core schools investment is the largest on record.

[Stephen Timms (East Ham) (Lab)]

David Cameron promised that the funding per pupil would be protected but, as we have heard, that is not happening. In my constituency, funding per pupil is being reduced further as a result of the formula. Why is David Cameron’s promise being broken?

[Justine Greening]

It is not. We are protecting funding per pupil as well. On apportioning funding fairly between schools, we know that it is time to look at the school funding formula to ensure that we rectify the current unfair and outdated system, as my right hon. Friend the Member for Wokingham (John Redwood) set out. At the moment, funding is not distributed evenly across our country and does not take account of pupil needs. For example, a school in Sutton receives £75 in extra funding for each pupil with English as a second language, but in Tower Hamlets that figure is £3,548. We know that a primary school pupil who is eligible for free school meals and who has English as an additional language attracts £4,219 in East Sussex, but just down the road in Brighton and Hove, that same child would attract £5,813 for their school. We know that a secondary class of 30 children with no additional needs attracts £112,100 of funding in Staffordshire, but £122,500 of funding in Stoke-on-Trent. That is a difference of £10,400 for one class.

We know that parents and families see that unfairness playing out for their children, and it is simply untenable to say that these historical imbalances and differences in how we fund our children across the country are something that we should accept. No parent should have to put up with such disparity. I hear the shadow Secretary of State say that she does not like our proposed funding formula, but it is subject to consultation. I have actually extended the consultation period from 12 weeks, which was the longest period ever for such a consultation, to 14 weeks, because this is complicated. It is important that we have a measured, proportionate debate around the right way to proceed with the funding formula. What is absent from Opposition Members’ speeches is any suggestion of a better way of doing things. When the shadow Minister wraps up the debate, I will be interested to hear whether Labour has any alternative to the national funding formula—or any other education policy for that matter. We are right to be taking action.

[James Cartlidge (South Suffolk) (Con)]

Small primary schools in my constituency very much welcome the fact that sparsity has been taken into account. They think that they have a Government who understand the needs of the countryside.

[Justine Greening]

My hon. Friend is absolutely right. The formula recognises that different schools face different costs, particularly in rural areas, so the sparsity factor recognises that rural schools often have a higher cost base. That sits alongside a lump-sum element that is built into the formula to make sure that schools have the money that they need to be able to function effectively. Colleagues in rural seats will recognise that small rural schools have gained an average of 1.3% under the formula. Primary schools in sparse communities will gain 5.3% on average.

[Clive Efford]

There was a manifesto commitment to increase school spending per capita, but secondary schools in Greenwich face the prospect of having to make on average £1 million savings between now and 2019, with primary schools saving more than £200,000 each. Some 74 out of 77 schools face those cuts. Is that consistent with what the Conservative party told parents in my borough before the election?

[Justine Greening]

We said that we would protect the core schools budget in real terms, and that is exactly what we are doing. In relation to the hon. Gentleman’s local community, the change in the funding formula partly reflects the fact that, for a long time, we have used deprivation data that are simply out of date. It is important that we use up-to-date deprivation factors. For example, in 2005, 28% of children in London were on free school meals. That percentage has now fallen to 17%. It is right that we make sure that we have consistent investment for children from deprived communities, because that is where the attainment gap has opened up. It is also important that funding is spread fairly using up-to-date information.

[Margaret Greenwood (Wirral West) (Lab)]

When I was a schoolteacher under the Thatcher Government, I remember my school running out of paper in about February. A colleague and I had to go into the attic of the library and tear pages out of books from the 1970s so that our children could write on them. I remember wondering how we could expect children to write in those circumstances. Is the Secretary of State proud of that record, and what does she think that the scale of these cuts will do to staff morale in schools up and down the country?

[Justine Greening]

I was actually at school during that time period, and I felt that Oakwood comprehensive gave me a great start in life that set me up to be able, hopefully, to make a meaningful contribution to both the economy and my local community.

We are introducing the national funding formula. I accept that it is complex and challenging, and there is a reason why such a thing has not been done for a long time: it is difficult to ensure that we get it just right. That is why we are having a longer consultation. We have provided all the details so that colleagues can see how their local communities will be affected, and then respond.

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

In my constituency, which already has one of the lowest-funded education authorities, two thirds of schools will receive a cut and a third will receive a maximum increase of 0.3%. That situation will undoubtedly lead to teacher losses and probably school closures. Will my right hon. Friend undertake to look at the situation? This might be only a consultation, but the proposal needs a radical overhaul.

[Justine Greening]

I recognise my hon. Friend’s concerns. I am happy to talk to him one to one about his local community, as I have done with other colleagues. We are undertaking the consultation so that we can ensure that we get the new formula right. It is important that the formula works effectively on the ground. Alongside it, we will make sure that we protect the funding for deprived communities so that we can use that mechanism to tackle the attainment gap. We have also made sure that an element of our formula follows children who start from further behind, for whatever reason. Low prior attainment is properly addressed in the formula to make sure that if a child needs additional investment to help them to catch up, wherever they are in the country, that investment is there.

The second stage of the consultation on the funding formula runs until 22 March. We want to hear from as many school governors, schools, local authorities and parents as possible. I know that colleagues on both sides of the House will also want to contribute. As I said, we have put a lot of data alongside the consultation because we want to ensure that people have the information that they need to be able to respond. The transparency that the new formula will give us also means that we will have much more informed debates in this House about how we want to fund our schools, and the relative balance we want between core funding, deprivation funding and low prior attainment funding, as well as issues such as sparsity.

[Nick Herbert (Arundel and South Downs) (Con)]

I strongly support my right hon. Friend in seeking to achieve fair funding, which is absolutely the right thing to do. However, there will be little help for secondary schools in my constituency, and the primary schools will actually lose out. How can that be right, given that West Sussex is already the worst-funded shire authority? Will she undertake to have another look at the draft allocation before it is finalised?

[Justine Greening]

My right hon. Friend will want to contribute to the consultation. It is important that we hear from as many colleagues, and indeed schools, from across the country as possible. As I said, we have put out a lot of additional information so that we can have an informed debate in the House, and these proceedings form part of that.

[Several hon. Members rose—]

[Justine Greening]

I will make a little more progress because I know that many Members want to have their say on behalf of their local communities.

I want to move on to the broader cost pressures that schools are facing. Many of those pressures actually come from steps that we have taken, for example by introducing the apprenticeship levy. That levy will benefit millions of young people in the coming years, but it will also benefit schools through the training and development of existing staff. We have also introduced the national living wage, which benefits low-paid workers in schools and other organisations, and that was the right thing to do.

My Department has a role to play in supporting schools across the country to drive greater efficiencies. We have analysed the cost bases of different schools that operate in similar circumstances. As the National Audit Office report sets out, we believe that efficiencies can be made.

[Victoria Borwick (Kensington) (Con)]

I am grateful to the Secretary of State for giving way; I appreciate that this is a very busy debate. I want to speak up briefly for London. I need an assurance from her—I am sure that she has touched on this—because of the negative effect that the reform of the funding formula may have on schools in London, some of which face intolerable pressures.

[Justine Greening]

Under the proposed formula on which we are consulting, London schools, purely because of the underlying cost pressures of running schools in London and the deprivation levels in their areas—although they have reduced, they are still comparatively high—will still receive, on average, 30% more. My hon. Friend will of course want to speak up on behalf of her community. This is about ensuring that we fund the right amount by using current data on deprivation, rather than data that are five or 10 years old.

We believe that the Department can work with schools to help them to make the best use of their resources. I want every single pound that we put into our schools system to be used efficiently to improve standards and have the maximum impact for pupils. We know that we can work with schools to ensure that they can use this record funding to make the maximum impact. Indeed, I would point to the situation in York. It has been one of the lowest funded authorities in the country, yet 92% of its schools are good or outstanding. We therefore know that we can make progress in education while making efficiencies.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I very much support what the Secretary of State is trying to do, since Wiltshire is one of the worst-funded education authorities in the country. However, will she look again at the sparsity factor, because school governors are currently crunching the figures, and some of them are saying that they worry about the viability of small schools in rural locations being undermined, which clearly will not be the intention of the Secretary of State?

[Justine Greening]

My hon. Friend is absolutely right. Indeed, we looked at the formula to ensure that we did introduce a sparsity factor. Not all local authorities actually had a sparsity factor in their local formula, but we are now making sure that it is there for every single school. We have also introduced the lump-sum formula.

We got to the stage in developing the formula where the only way we could continue to improve it was to ask people what they thought about it, which is why the consultation is so important. It is important that we get the formula right, but I recognise that this complicated formula has to work for schools around the country that are in very different situations, which is why the debate is so important. Following the phase 1 consultation, it is right that we steadily take the time to hold a phase 2 consultation to help us to finalise a formula that can work and have real longevity.

We will work with schools to help them to improve their efficiency. We have already published a school buying strategy that sees us launching an efficiency website. We are putting in place national deals to help to ensure that schools get the best deals on things such as utilities. We are putting in place buying and digital hubs so that strong procurement teams are close to schools to give them advice when they need it. We are also setting up school business manager networks so that we work with the people who are driving efficiencies in schools to share best practice and improve performance. Over time, I believe that we really can take some steps forward on that.

We are making sure that record funding is going into our schools, we are making sure that our curriculum is stronger than ever before, and we are actually turning out young people with the knowledge and skills they need to be successful. That is not the only part of our education policy; we are also investing in apprenticeships and radically reforming technical education. We are going to make sure that this Government end up being able to say that every young person, wherever they grow up, is able to do their best and reach their full potential. I hope that, over the course of the debate, colleagues will recognise that that is the strategy that we will deliver.