West Sussex Schools Funding

Debate between Lord Herbert of South Downs and Jeremy Quin

Wednesday 2nd November 2016 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing the debate on behalf of West Sussex Members, who are concerned about school funding in our county.

I will not repeat the case so ably made by my right hon. Friend and by my hon. Friend the Member for Horsham (Jeremy Quin) for redress to the unfair funding for the county over the mid to long term, because it has been perfectly well set out. I have also set it out before, in a debate in this Chamber last November, and I will spare my colleagues from hearing precisely the same remarks again. Another reason I am not going to set it out is because the Government accept that there is unfair funding in West Sussex. In response to the petition that has been organised by schools in West Sussex, the Government said:

“We recognise West Sussex is a relatively low-funded local authority.”

That is objectively the case—it is the third worst funded authority and is pretty much on the bottom as far as shire counties are concerned.

The Government have recognised the need to do something about that, so we do not just have warm words from them; we have a commitment to introduce the national funding formula. It is important that that is recognised and welcomed, because it is a brave step. Future funding should not be allocated to schools on a rather arbitrary and unfair basis but should be based on a proper assessment of need and with a view to ensuring greater fairness. That commitment was in the Conservative manifesto, the policy was announced by the then Chancellor of the Exchequer and it has been reiterated by the current Education Secretary. I understand that the introduction of a national funding formula has cross-party agreement; perhaps we will have confirmation of that later.

We are not arguing about the need to move to a fairer system in the mid to long term, or whether that will happen. I should just say that I think it is important that those who are pressing for fairer funding in West Sussex acknowledge the Government’s position on this and the commitment to introduce a national funding formula. It does not help when our county council issues statements on the matter and does not recognise that the national funding formula has been pledged, or when headteachers refuse to acknowledge it. I urge those whom I am supporting to take a little more care in ensuring that the way in which they present their case is balanced and is likely to be well received by those who have made a commitment to move in the right direction.

We are discussing the interim situation before the national funding formula is introduced, and the recognition that that formula has been delayed by one year, to 2018-19 rather than the year before as was originally pledged. On the expectation of fairer funding, it will be hard to introduce a fairer formula and not see some improvement for West Sussex, which is funded on the most palpably unfair basis at the moment, and for the situation to improve—but we should recognise that that improvement might be incremental.

In the meantime, schools in West Sussex face a particular difficulty. The Government have protected school spending overall, in the same way they have protected other key budgets, and that should be recognised. In a difficult fiscal framework, when there is a need to save money and when the country still spends more than it earns, the schools budget—a massive budget in the Government’s overall programme—has been protected. Nevertheless, the way in which that has been achieved means there has been flat cash for schools in West Sussex at a time when their costs have increased and costs have been loaded on to them. That was ably set out by my right hon. and hon. Friends.

It might help the Minister if I give a practical example, because I want to persuade her that the impact on these schools is real. In my constituency, we have a very good school, Steyning grammar school, which is in fact a comprehensive, not a grammar school. The excellent headteacher, who is presiding over an increase in standards year on year, has supplied me with figures, which I am happy to send to the Minister. The school has seen a real-terms cut in funding of around 10% since 2010 as a consequence of the increased costs it is having to meet and reductions in certain grants. As a consequence, the percentage of the school’s budget that is accounted for by staff costs is increasing from around 80%, where it should be, to 84%. Teaching full-time equivalents have fallen from 132 in 2010 to 118 in 2016-17.

In budgetary terms, this meant that in 2015 the school’s budget was just at break-even. In this financial year, 2016-17, the school has set a deficit budget of £600,000, which it will cover from reserves, but for 2017 it forecasts a deficit growing to £850,000 a year, which it will not have the reserves to cover. That will require the school to take action and to reduce its staff levels, which are at the national average in terms of ratios. Unlike schools in other parts of the country that are much better funded and have more generous staff-to-pupil ratios, that school does not have room to make those reductions without there being an impact on the delivery of education and, it fears, on standards.

I strongly urge the Minister to look at the funding and the impact on school budgets in counties such as West Sussex that are facing real-terms funding reductions because of these cost pressures. She must look at the impact on those schools’ budgets on the ground, to recognise that they are not engaged in a game of playing bleeding stumps but face particular difficulty.

[Jeremy Quin]

Constituents of mine attend Steyning grammar school, which is an excellent school. With a deficit of £850,000 and staffing at 84%, 85% or 86% of the total budget, if there are forced changes in staff numbers, it would be particularly galling to go through the cost and the pain of reducing staff numbers by whatever means, only to be required as a result of fair funding coming through to then source and recruit new teachers to resurrect those posts and start delivering again for pupils.

[Nick Herbert]

I agree with my hon. Friend. He is much better at maths than I am and is able to point such things out. That is what underlines the whole case for transitional funding. I do not necessarily argue that there is a link between performance in the public sector and funding. We should never assume there is an automatic link between the two, such that any reduction in funding is unmanageable or will have an automatic effect on performance. It is incumbent on any public sector institution to run efficiently and to make savings, but by any objective measure the funding of schools in West Sussex is already among the lowest in the country, so there is no fat to cut without there being an impact.

If we still have to make national savings and the schools budget is to be included within that, that should be achieved on a fair basis, but at the moment, the situation is impacting disproportionately on schools that are poorly funded. That is unfair. I was Police Minister when we cut the policing budget by 20% in real terms, but the impact was felt across all police forces. Although there was some difference in how forces were funded, we did not have a situation where some forces faced no cuts at all and others faced reductions and therefore felt they were being treated entirely unfairly.

It is important to recognise the particular situation of these authorities. That lends weight to the case for some kind of transitional help. Again, the Government recognised that, because in announcing the national funding formula they announced a £390 million uplift nationally in school funding, which was then put in the baseline. That has been applied year on year and is a large sum of money nationally. I recognise that, but if we look at the practical effect, the uplift amounted to less than £1 million for West Sussex’s budget, which meant the actual increase was something like £10 per pupil. The impact on schools’ budgets was therefore relatively low.

Because it was very broad, the distribution of that sum in the transitional uplift did not give sufficient help to the areas of the country that most needed it and was not sufficient to cushion them against the increased cost pressures they are facing. To bring West Sussex up to the average level of county councils—never mind the average national level—would require an uplift of £15 million a year, and it has had less than £1 million. That is why the schools are in this position. To bring funding up to the national average, as my hon. Friend the Member for Horsham said, would require a much greater uplift of £40 million a year.

Because of the cost pressures, the reduction in funding and its effect on schools in the county, and because the national funding formula will not be introduced for two years, there is a strong case for interim funding for the worst funded areas, despite the Government’s overall protection of the budget nationally. That would require taking decisions ahead of the introduction of the formula, which I appreciate would be difficult. It would require finding a basis on which to fund only those schools right at the bottom of the pile, rather than too broadly, which is what happened before. Again, that would be difficult, but it is necessary and right, or else schools in West Sussex will cut their budgets in a way that will see staff numbers fall. That is why I urge the Minister to look at this carefully and to recognise that a very fair and reasonable case is being made by schools in the county and that this deserves special attention.