Schools: Funding

Lord Nash Excerpts

Thursday 21st July 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, with the leave of the House, I will repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State for Education to an Urgent Question in the other place about schools funding. The Statement is as follows:

“Mr Speaker, I am firmly committed to introducing fairer funding for schools, high needs and early years. This is an important reform, to fairly and transparently allocate funding on the basis of schools’ and children’s actual needs. As the Written Statement I have laid today sets out, this Government are investing record levels of funding for schools. With that investment, fairer funding will set a common foundation that will enable schools to maximise the potential of every child. They will no longer be held back by a funding system that is arbitrary, out of date and unfair. Fairer funding will provide a crucial underpinning for the education system to act as a motor for social mobility and social justice.

The first-stage consultations on national funding formulae for schools and high needs have met an overwhelmingly positive response from head teachers, teachers, governors and parents. I am also clear that this is a once-in-a-generation opportunity for an historic change and that we must take our time to get our approach right. I will therefore publish the Government’s full response to the first stage of the schools and high needs consultations and set out my proposals for the second stage once Parliament returns in the autumn. We will run a full consultation, and make final decisions early in the new year. Given the importance of consulting widely and fully with the sector and getting implementation right, the new system will apply from 2018-19. I will set out our full plans for a national funding formula for early years shortly.

I understand that local authorities need sufficient information to begin planning their funding arrangements for 2017-18. Local authorities need time to consult with local schools, both academies and maintained, to ensure that the funding they provide is being directed appropriately. As well as a fair system, schools and local authorities need stability and early notice of any changes to fulfil this important duty properly.

I have therefore confirmed in my Written Statement today that no local authority will see a reduction from its 2016-17 funding for schools or for high needs next year. Final allocations will follow in December on the basis of the latest pupil numbers, as usual. My Written Statement also confirms that for 2017-18 we will retain the current minimum funding guarantee for schools, so that no school can face a funding reduction of more than 1.5% per pupil next year.

As my Written Statement today confirms, I am determined to ensure both that we move to a fair funding system and that we do so in a measured and properly consultative fashion. This will be a crucial part of delivering an education system that works for every child, no matter their background”.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement. I remind the House that my wife is an education consultant to the Education and Training Foundation.

As recently as Tuesday, Ministers said they remained committed to the original timescale. What has changed in the past 48 hours? Was it a dawning realisation of the funding problem currently facing our schools? I noted that the Minister said that no local authority will see a reduction in its 2016-17 funding to schools next year. But we have a growing number of pupils and a growing teacher shortage, and the Minister will know that schools are already struggling to cope with the effect of the 5% funding cut because of the increase in national insurance and teacher pension contributions that schools have had to pay.

As part of this approach to fair funding, can we see a reappraisal of the funding of schools in their entirety? As the Minister’s department is also having higher education and further education transferred to it, can he also say whether the further education budget will be protected next year, having been decimated by the BIS department over the last two years? Finally, I am sure we all agree with fair funding but I have noticed that when it came to police areas, the fire service and the NHS, fair funding has meant greater funding in Conservative constituencies. Would the Minister care to tell me what fair funding will mean for schools?

[Lord Nash]

The Secretary of State’s overriding consideration is to ensure that the reform is right and has the benefits of proper consultation. The change is too important to rush and, personally, I think her decision shows a great strength of mind. She has considered the matter carefully and decided that we do not want to put schools through the uncertainty, when they come back in September, of not knowing what their budget is to be for 2017-18. That conclusion shows great sensitivity for the issues facing our schools and teachers. As for the point about whether there will be any political bias in our considerations, I can assure the noble Lord that there will not be.

[Lord Storey (LD)]

I thank the Minister for making the Statement. As the noble Lord, Lord Hunt, rightly perceived, it is made against a background of cuts in funding in schools. He mentioned 5% but there are suggestions that with teacher cost caps, teacher pensions, national insurance and other on-costs such as wages, it will be nearer to 12% than 5%. On these Benches, while we welcome a fair funding regime, we agree with the Minister that you have to move carefully and cautiously. I was delighted to hear him talk about consultation, which is really important, but in any national scheme there will be winners and losers. We have serious concerns about the plan to cut the pupil funding by up to 1.5%. I have a direct question for the Minister: can he guarantee that the pupil premium funding will also be protected in real terms?

[Lord Nash]

I can answer that question. We have committed to protect pupil premium funding through to 2020.