Schools: Funding

Lord Young of Norwood Green Excerpts

Thursday 29th November 2018 Lords Chamber

[Lord Young of Norwood Green (Lab)]

My Lords, I too thank my noble friend Lady Morris for sharing her expertise, as usual, and for giving us an opportunity to debate this key issue. Once again I congratulate the Library on its briefing, which always comes to your rescue when you are trying to prepare for a complex debate.

I agree with one aspect of government policy: the national funding formula is a necessary change because there was a postcode lottery in the distribution of funding. However, although it is right to make that change, surely the challenge for the Government is how it is managed. They talk about a “soft formula” to support a “smooth transition”, but that reminds me a bit of the “managed migration” approach to universal credit. Can the Minister advise the House when the Government plan to publish a review of the transition process to the NFF? It will be important to see how local authorities and schools are coping.

A number of noble Lords mentioned what they have fairly described as neutral organisations, such as the Institute for Fiscal Studies and the National Audit Office. These organisations have pointed out the decline in funding. As has already been said, under the previous Labour Government, we witnessed a 50% funding increase from 1997 to 2010. Now, the Institute for Fiscal Studies and others point to a real reduction of 8%. Why is that happening? The institute states that total spending per pupil fell in real terms by 8% between 2009-10 and 2017-18, and will be only 14% higher in real terms in 2017-18 than in 2003-04. Added to this is the additional effect of a 55% real-terms cut in local authority service spending. I will not quote the figures, because others have already done so. We are also still witnessing a significant increase in the number of pupils, which is another challenge for schools.

I declare an interest as a recent former chair of a board of governors of a primary school. We experienced a need to cut back on staffing. We now have to manage a three-year budget-planning process. That is no bad thing, but it has shown us that there will be a significant reduction in available funding to plan for the increased costs of pay increases, pensions, the minimum living wage, national insurance contributions, the apprenticeship levy and increased pupil numbers. These cannot be discounted; you have to plan for them. As others have said, we used to have the cushion of a surplus but it has now been eroded.

Teachers face huge challenges, including more than 50% of pupils on free school meals, pupils with English as a second language—in my own school, something like 30 languages are spoken—and fewer books at home. These are real challenges for schools to face.

As has already been said, the recruitment of good-quality teachers and head teachers is a more and more demanding process. It is not that people do not want to participate in the profession but that they feel the challenge is too great for it to be a worthwhile and rewarding career.

Does the Minister agree that we should regard education as an infrastructure investment? Why do I ask that? I do so because the Government have stressed in their industrial strategy the urgent need to improve productivity. The demands of the fourth industrial revolution and the digital revolution mean that we need a more-skilled workforce.

My noble friend Lord Knight referred to the demands of industry. We live in an age where the challenge of globalisation—and probably Brexit—means that we need more skilled people. He made an interesting comment about companies taking on fewer graduates than previously; they are looking for people they can train themselves and to move into the apprenticeship field. As someone who has declared an interest in apprenticeships on many occasions, and given the vast amounts of money that is now pouring into student loans, I welcome that.

Employers are looking for people to come into their companies with what they regard as the essential skills: literacy, numeracy, digital skills and the ability to work as part of a team. More and more, we are hearing employers say that it is exceedingly difficult to recruit in areas of high demand. We want more apprenticeships and yet we have cut back significantly on further education.

I congratulate the noble Baroness, Lady Eaton, on her candid analysis. I, too, hope that the Minister listened to it, because she made a number of important points. Her reference to the increased demand for SEND pupil places, the need to meet that demand and local authorities’ inability to rise to the challenge was one of the most important points made today. The noble Lord, Lord Addington, also made the point.

My noble friend Lady Massey mentioned “a rounded and grounded education”—a phrase I like and something that I think all parents seek for their children. However, parents are increasingly worrying whether that sort of education can be achieved. I certainly echo my noble friend Lady Massey’s point about early intervention. We know that if we do not make early interventions, the situation for children as they move through primary education will become increasingly difficult. It is difficult for the child and difficult for the teachers. For every child who leaves primary school not fully numerate and literate, the challenges and costs of remedying the situation at secondary level increase.

Like the other speakers in this debate, I hope the Government are listening. I welcome some of the moves they have made and the increases in funding, but it really is not enough. If they want to meet the targets they have set themselves to improve productivity and meet the skills demand of the new digital revolution, they need to recognise that education funding is a key part of the challenge.

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[Lord Agnew of Oulton]

I had dinner with my noble Friend, Lord Harris, two nights ago and he is always frank in his views. He is a passionate advocate for his schools and what he has achieved is fantastic. I would like that to go on the record.

I would also like to give an example of a relatively small trust, the Thinking Schools Academy Trust in Kent, which has taken the novel approach of paying £2,000 more to its newly qualified teachers when it recruits them. You may say, “There’s no money around, so how has it done that?”. It has done so because its retention rate on teachers is double the national average. It has only a 10% turnover of staff every year, as against a national turnover of 20%. Thinking in ways like that can make such a difference.

I have been told to stop. I am very grateful to the noble Baroness, Lady Morris—

[Lord Young of Norwood Green]

I am sorry to delay the end, but I asked when the Government were going to review the transition to the new funding formula.

[Lord Agnew of Oulton]

My apologies. We are on a soft programme at the moment that is being reviewed, and then it will be reviewed more formally with the spending review. So I cannot answer that question at the moment. As the noble Lord will know, we are experimenting with giving delegation to local authorities for the high-needs funding block. Some local authorities are using that and some are passing all the funding straight back to schools. That soft launch will last until the funding review, which will be next year.

I thank all noble Lords for their contributions to this important debate. Even more, I pay tribute to the hard work of teachers and schools who give their best to raise standards in our education system. I have worked very closely with these wonderful people and I support the noble Baroness, Lady McIntosh, in what she said about the morale of teachers in the workforce and the fact that they are making a vital contribution.

We are changing the way that funding works. It is not easy, but we are seeing it beginning to bear fruit. This will underpin a further improvement in standards to help create a world-class education system that finally allows every child to achieve their potential, no matter what their background.