Schools

Lord Watson of Invergowrie Excerpts

Thursday 16th November 2017 Grand Committee

[Lord Watson of Invergowrie (Lab)]

My Lords, I too join in congratulating the noble Lord, Lord Bird, on securing this important debate and for focusing on a topic that has been a major concern to anyone with an interest in school education for quite some time now.

A major factor that swayed the way in which many people voted in the general election earlier this year was school funding. At the start of the campaign in April, polling showed that education was the fifth most important issue when people in England were deciding how to vote. By election day, following the campaign work of the Labour Party, the Lib Dems, the Greens and the education trade unions, which produced much positive media coverage, education had risen to be the third most important issue in the minds of voters. I like to think that was in part due to the Labour Party’s manifesto commitment to not just reversing the cuts of the past seven years but properly funding schools in the years ahead. The election outcome meant that a Government shorn of their majority had to confront the force of that argument. Pressure from many of their own MPs led to the announcement by the Secretary of State in July of an additional £1.3 billion, to be redirected within the DfE’s budget for schools for the two years from April next year.

However, the real-terms cuts that I mentioned schools have suffered since 2010 are not being reversed. Far from it because, as the noble Lord, Lord Jones, has just said, there is not a penny of new money being allocated. There has been a tacit acceptance that the current funding settlement is insufficient, which is of course welcome, although that leaves much pain still to be suffered by schools. That is not just a party-political point because the Institute for Fiscal Studies has said that all the £1.3 billion will do is reduce what would have been a 6.5% real-terms cut between now and 2020 to one of 4.6%. The National Audit Office and the Education Policy Institute have produced similar figures.

Despite an £8.4 billion DfE underspend in 2016-17 the Government still defend their projected funding levels, saying that more resources than ever are going into schools. But that is a meaningless soundbite; of course more than ever is being spent, because there are more pupils than ever. What matters is the funding per pupil. In her Statements in July and September, the Secretary of State said that the new version of the formula was about fairness. How can funding ever be fair if it is not sufficient? It needs to be emphasised that the Government are not ensuring that all schools are fairly funded, as 88% of schools are facing real-terms budget cuts per pupil between 2015-16 and 2019-20. On average, this equates to £52,500 in cuts to primary schools and £178,000 in cuts to secondary schools.

I had intended asking the Minister for some additional information on the thus far unidentified sources of the £1.3 billion announced as additional investment by the Secretary of State in July. But I will leave that for now because the last two days have graphically demonstrated that the Government’s rose-tinted view of the future funding of our schools is not shared by others. On Tuesday, a delegation of school leaders delivered a letter to the Prime Minister seeking a radical rethink on school funding. On the same day, in her role as chair of the Public Accounts Committee, Meg Hillier MP sent a strongly worded four-page letter to Jonathan Slater, Permanent Secretary at the DfE. She pulled few punches in deconstructing his defence of the national funding formula. I will select from her comments to give a flavour of the committee’s very real concerns.

In response to the additional £1.3 billion being allocated over the next two years, Ms Hiller said:

“We pointed out that this additional funding when balanced against £3 billion of efficiency savings the Department expects to be delivered by 2019-20 was not a net gain for schools”.


This puts the additional funding in perspective because it means that £1.7 billion is required merely to stand still. Ms Hillier also queried whether the DfE has plans and the capacity to help schools which cannot meet efficiency targets, saying that the Public Accounts Committee was,

“hearing of schools restricting their curricula and teaching hours”,

which of course is not by any description efficiency savings. The Public Accounts Committee’s concerns were summarised by Ms Hillier stating bluntly:

“We remain concerned about the support the department and the ESFA can realistically provide to schools whose budgets cannot stand up to the savings demanded of them”.


Of course, I am sure that I do not need to state to noble Lords that that is a cross-party committee.

The case was further enhanced yesterday with the shocking news from the Prime Minister’s own constituency of a school writing to parents asking for a daily donation of £1 per day to help pay for teaching materials, including books. The head teacher’s letter says that,

“we would like to suggest that parents donate £1 per school day for each child to help the schools through this funding crisis. This equates to £190 per year”.

The head teacher received a response from the Schools Minister, Nick Gibb MP, although it sounded more like a rebuke. We know that Mr Gibb is prone to get rather tetchy on the subject of school funding. Just two weeks ago, he had to be restrained at the end of a debate on school funding in Westminster Hall, when he aimed a tirade at my colleague and shadow Schools Minister, Mike Kane MP. His response to the head teacher’s letter was that the school in question, Robert Piggott Church of England school in Wargrave, Berkshire, would receive around £10,000 a year extra in 2018 under the new funding formula. The parents of children at the school probably chorused in unison, “Big deal!”, because that will go only a fraction of the way towards meeting the shortfall that the head teacher is trying to make up. Robert Piggott school has 311 pupils; if the parents of each were able to pay the annual £190, it would produce a figure in excess of £60,000, which is very close to the average figure that I mentioned earlier. Yet Mr Gibb expects them to be able to make do with a paltry £10,000 extra. What world does he live in? The whole affair was put into sharp context by one parent, who said:

“I've got two children at the school so that’s around £400 a year, but my salary hasn’t gone up to cover that”.


Nor is that an isolated case—would that it were. The Minister will have seen what I thought was a worrying, even depressing, report in the Times Educational Supplement last week. It concerned a survey carried out for the Academies Show by an independent research consultant which showed that nine in 10 school leaders expect their school’s finances to get worse over the next two years, despite the new funding announced, and almost half of school leaders think the quality of education in England will decline during the next four years.

These are the men and women in the top positions, intimately involved day to day in running our schools. It is not just head teachers but chief executives, business managers and vice-principals. They are the experts; they know the situation on the ground far better than anyone—with all due to respect to those in the Box—sitting in the DfE’s Great Smith Street offices. When school leaders speak, they do so with authority and the Government should listen. I hope they will.

Another body that the Government should listen to is the Local Government Association. Again, that is not a partisan body, unless you regard wanting to defend services for local communities as partisan. Noble Lords will have received a chilling briefing for this debate from London Councils, the local government association for the capital. The proposed national funding formula allocations would mean only 27% of London schools receiving funding that adequately meets the cost pressures they are facing, compared to 56% in the rest of England. London Councils’ analysis of the provisional allocations show that London’s schools will receive a significantly lower proportion of the new money than any other region in the country. Fourteen London boroughs will see more than 90% of their schools receive just the floor of 0.5% per pupil in 2018-19.

Local authorities should be seen by the DfE as improvement partners in ensuring that every child has access to a place in a good school. Research undertaken on behalf of the Local Government Association highlights the strong role of councils in providing good school places, with 91% of maintained schools rated as good or outstanding by Ofsted compared with 85% of academies and 84% of free schools. In case the Minister or his officials deem the research—which was undertaken by independent education consultants called Angel Solutions—biased, it should be noted that they used Ofsted’s methodology and published data to assess the performance of both maintained schools and academies.

With next week’s Budget Statement in mind, I hope that the Secretary of State has impressed on the Chancellor the need to allocate new money for the education budget in general. Can the Minister reveal to noble Lords whether the Secretary of State has specifically asked for new money for schools funding? This is more than justified in order to take account of the fact that impartial organisations such as the National Audit Office and the Institute for Fiscal Studies have highlighted the need for at least £2 billion more each year just to maintain funding in real terms in the face of inflation, additional costs such as national insurance contributions and staff pensions, plus the apprenticeship levy—which is another issue that should not even apply to schools—and of course rising pupil numbers.

The Minister comes into government with a clear understanding of how the Department for Education works, having been an executive board member, and of the need for real-terms increased school funding, not just recycled resources, having established and chaired a multi-academy trust. He needs to fuse those two and ensure that he fights education’s corner to end the constant uphill struggle being faced by our underfunded state schools.

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

My Lords, I am pleased to answer this Question for Short Debate, and thank the noble Lord, Lord Bird, for initiating it. We want fair access to a good school place for every pupil, regardless of their background. Over the past seven years, we have made significant progress: more schools than ever are rated good or outstanding and, since 2011, the attainment gap for disadvantaged pupils has decreased by approximately 7%. However, that progress has been made against a backdrop of unfair and arbitrary funding which has, for too long, acted as a brake on the progress. That is why we are delivering on our promise to reform the unfair and opaque school and high-needs funding systems.

At the heart of the Government’s ambition to provide good school places is the aim to drive up social mobility, as referred to by the noble Lords, Lord Fellowes and Lord Bird. This is the route out of poverty. We want to lift up those areas that have historically been left behind and ensure that pupils can reach their full potential. Beyond the core schools budget and the national funding formula, the Government will invest a total of £72 million in 12 opportunity areas over the next three years. The right reverend Prelate the Bishop of Ely recognises the importance of helping some of the most disadvantaged areas in the country, which is what we are trying to do. Opportunity areas will also receive a share of the £75 million teaching and leadership innovation fund to support high-quality professional development for teachers and leaders, and a share of the £280 million strategic school improvement fund for schools most in need of support.

The noble Lord, Lord Bird, refers to the dismantling of poverty. We recognise the impact that living in poverty has on a child’s start in life and that education plays a key role in ensuring that every child can access the same opportunities. That is why this Government are focused on tackling the root causes of poverty by building a strong economy and getting people into work. The noble Lord, Lord Fellowes, used a term for which I am grateful, saying that education is an actuator of social mobility. That is better written than what I have written down here, and I could not agree more. That is why we are dramatically increasing access to childcare at the early stages of a child’s life and driving higher standards in further and technical education at the other end of childhood.

The noble Lord, Lord Fellowes, also refers to technical education. We know that education goes beyond our schools. Post-16 education plays a crucial part in supporting future economic growth. We will protect the national base rate of £4,000 per student for the duration of the Parliament, and have announced an additional investment in technical education rising to a further £500 million. In October, we set out our plans on how we will implement T-levels, the 15 new technical education routes to skilled employment for 16 to 19 year-olds. These reforms will build on the changes already made to secure a streamlined and sustainable technical education system which, importantly, is supported by employers.

The noble Lord, Lord Jones, and the right reverend Prelate referred to fair funding. As announced in the Queen’s Speech, the Government have recently responded to the consultation on the national funding formula. This represents the biggest improvement to our system for funding schools in over a decade. Together with the additional £1.3 billion of schools revenue funding across the next two years, announced in July, this will help to ensure that schools get the resources needed. To address the point made by the noble Lord, Lord Watson, the new formula will allocate a cash increase of at least 1% per pupil to every school by 2019-20, with higher gains for some of the underfunded schools.

We recently published full details of both the school and high-needs national funding formulae, and the impact that they will have for every local authority. This includes notional school-level allocations, showing what each school would attract through the formula. I can send the link to the noble Lord, Lord Jones, if he would like more information on that.

Responses to our consultation stressed the importance of funding for children with additional needs, such as those suffering deprivation and low prior attainment. Nationally, the formula will allocate £5.9 billion in additional needs funding, with a further £2.5 billion delivered through the pupil premium, which was introduced in 2011. The intention of the pupil premium was to encourage schools to recruit pupils from less well-off backgrounds and to then create an added-value learning environment for less advantaged pupils to benefit from.

The noble Lords, Lord Watson and Lord Jones, referred to proper funding. The department has been working hard to identify efficiency savings, which will ultimately result in the £1.3 billion cash boost for schools. Making savings and efficiencies allows us to maximise the funding directly allocated to head teachers. I hope that that goes some way towards addressing the concerns of the noble Lord, Lord Watson. The independent Institute for Fiscal Studies has confirmed that the additional investment of £1.3 billion will mean that funding per pupil across the country is maintained in real terms over the next two years. I know that it is unfashionable to say it but the IFS has also shown that per pupil spending in schools in 2020 is set to be at least 70% higher in real terms than it was in 1990.

To remain slightly unfashionable, we have to look at school efficiencies. We are clear that overall funding for schools and the distribution of that funding is important, but how the funding is used in practice is also vital. School efficiency must start with, and be led by, schools and school leaders. The department will continue to provide practical support, deals and tools. For example, the risk protection arrangement has already saved over £150 million as of August this year.

I take the point made by the noble Lord, Lord Watson, about remoteness in the department compared with the front line. I have come from the front line. I know that it is difficult but I will bring the expertise that I have gained on the front line to help the department to do more.

The noble Lord also asked whether we have identified the savings. I think that noble Lords are probably aware of most of them, but we will save £420 million on the department’s capital budget, which includes £315 million from the healthy pupils capital funding. We will also save £280 million on the free schools programme and £600 million from the Department for Education’s resource budget.

[Lord Watson of Invergowrie]

With respect, those are the figures that were given by the Secretary of State in July. I was asking for some of the gaps to be filled in. We knew that much; I was asking about the shortfall between those accumulated figures and the £1.3 billion.

[Lord Agnew of Oulton]

I will write to the noble Lord after the debate.

The noble Lord, Lord Jones, raised the issue of capital funding. Between 2010 and 2016, we invested over £28 billion in schools capital programmes, including £6 billion on basic need, £8 billion on condition and £1.4 billion on the priority schools building programme, dealing with some of the oldest schools on the estate. Since then, the Government have committed to invest over £23 billion in the school estate between 2016-17 and 2020-21.

The noble Lords, Lord Jones and Lord Fellowes, asked about our relationship with independent schools. We know that different parts of our education system can work in partnership to help deliver more good school places. We are close to reaching an agreement with the Independent Schools Council on what we can expect independent schools to do and how we can help them overcome the barriers that can get in the way of cross-sector working.

The noble Lord, Lord Jones, raised the issue of teacher pay. Of course we recognise that good schools are about good teaching as well as fair and proper funding. Decisions about teachers’ pay are based on recommendations from the independent School Teachers’ Review Body, and last year we accepted the recommendation of a 2% rise to the main pay range for teachers.

The noble Lord, Lord Fellowes, talked about cross-party collaboration. I certainly give credit to the previous Labour Government for the initiation of the academies programme, which is something that we have tried to build on, and for the London Challenge. I think that we agree on much. I accept that we will agree on some things but it is clear to me that we have things to learn from one another.

The noble Lord, Lord Bird, raised the question of pedagogy and the relevance of the existing curriculum for the modern world; the fourth industrial revolution, as he described it. We are making progress, certainly in two areas. Take maths, which is an essential underpinning if one hopes to go into any technology-based career. In 2010, only 22% of children in the state system were studying maths at GCSE, and that has increased to 38%. We also now have 62,000 pupils entering computer science GCSE, which has gone up year on year.

I again thank noble Lords for their contributions to this debate. Many important points have been raised and I will write to address those that I have not had the time to respond to fully. I want to emphasise that for this Government social mobility and good education are high priorities. I met the noble Lord, Lord Bird, yesterday and he said that he sees the approach to poverty as being based on four categories: prevention, emergency, coping and care. His assertion is that not enough emphasis is placed on prevention. I wholeheartedly agree with him and believe that education is the best form of effective prevention against the mire of poverty.