Schools Funding

Michael Fabricant Excerpts

Tuesday 29th April 2014 Westminster Hall

[Mr Walker]

I hear what my hon. Friend says and I hope that the Minister will answer her point. I agree that giving schools greater say is important and very much in line with some of the Government’s policies.

The East Riding of Yorkshire is by most calculations very low in the table for school funding, yet gets only 0.3% through this allocation, and Staffordshire’s MPs have been among the most consistent in pressing F40’s case.

[Michael Fabricant (Lichfield) (Con)]

I have a little list and Staffordshire is 12th from the bottom. Given that the F40 campaign began in Staffordshire, does my hon. Friend understand the surprise of all MPs in Staffordshire that we have had no uplift at all? Can he explain that?

[Mr Walker]

That is obviously for the Government to explain. I share my hon. Friend’s mystification, though, that a county so close to the bottom of the table has so far received nothing, and I hope that because consultation is continuing that is something that can be changed and that areas such as the East Riding of Yorkshire, Staffordshire and Trafford, which have so far missed out, may still have something to gain from the process. They certainly have something to gain from fairer funding.

In its consultation response, F40 has queried the methodology used by the Government in allocating the £350 million. One substantial difference between its calculations and the Government’s is the unit of funding used. F40 has tended to use the guaranteed unit of funding, whereas the Department used a new measure called the single basic unit of funding. I do not want the debate to be dominated by the technicalities of funding mechanisms. However, I understand that that technicality is part of the reason why the East Riding of Yorkshire may have done less well than Cambridgeshire, despite similarly low funding. Differences in the local approach to the allocation of high-needs funding account for much of the difference in the outcomes. F40 has asked the Government to look at those matters again, to ensure that each poorly funded authority gets a fair chance to secure better funding. I hope that the Minister will be able to look into that.

--- Later in debate ---

[Mr Walker]

Clearly, there is much further to go in the process of providing fairer funding. What has been done is a down payment—a first step. I am glad that Leicestershire, which has been at the bottom of the table for too long, is getting substantial uplift from the process, but that is by no means the end of the story. I share my hon. Friend’s concern about the need to go further. Indeed, by F40’s own calculations, it seems that Leicestershire, as the least-well-funded authority, deserves at least the 5% uplift that it is receiving. The East Riding of Yorkshire, the third worst funded, deserves more than its 0.3%, and Worcestershire—much as we appreciate our gain—has not done as well as might have been hoped, with an increase of less than 2%. Every other F40 member among the 20 authorities in the lowest position has had at least that uplift, with the exception of Warrington, Staffordshire and Solihull.

Higher up the table, more F40 members have missed out. There are some surprising gainers who, according to F40’s calculations, might not have been expected to gain so much. F40 does not mind—nor do I—that authorities outside its membership benefit by a move towards fairness; we should celebrate the fact that low-funded areas such as Wiltshire, Rutland and Poole have gained substantially from what has been done, despite not being members of the F40 campaign. Cornwall has also gained, although not as much as it might have hoped.

Harder to explain is the fact that some of the better-funded local authorities—high in the table of funding by GUF—are nevertheless receiving substantial uplift. In the words of the secretary of F40:

“We think it is odd that so many LAs in the higher part of the funding league table (too high in the league to be f40 members) are gainers, whilst LAs that are obviously more poorly funded have small gains or are overlooked”.

The gains made by Westminster, which is one of the 10 best-funded authorities in the country, and by Brent, Sutton and Bromley, the three biggest gainers in per pupil terms but all in the top half of the funding table, look much harder to justify from an F40 perspective. In its response to the consultation, F40 argued:

“We do not understand the rationale for adjusting for labour market costs—as they are already fully taken into account in the main funding distribution between local authorities.”

It said:

“We can see no case for supplementary funding for area costs. The research work undertaken by f40 has clearly identified that the very large funding differential between London and f40 authorities enables schools in London to employ significantly more staff; it does a great deal more than compensate for additional employment costs.”

It is perhaps the inclusion of such an allowance for costs that has allowed relatively well-funded London boroughs to benefit from the uplift, while urban F40 members such as Warrington, Solihull and Trafford seem to have missed out. I ask the Minister to look at that carefully.

In previous debates, hon. Members from both sides of the House have set out their concerns about the challenges of rural sparsity and delivering education to sparse communities. F40 has always supported the idea of including a sparsity factor in the national formula and welcomed its inclusion for the first time in the new local formulae. However, without national funding in the national funding formula, there has been surprisingly little uplift from sparsity. In its consultation response, the group said:

“We agree that sparsity is potentially a useful means of targeting funding at small rural schools. Many authorities have not introduced a sparsity factor for 2014/15, taking the view that further work is needed on producing a viable model. We would welcome an evaluation by the Department on the approaches local authorities with different characteristics have adopted for 2014/15.”

Although the constituency that I represent is not a sparse one, it appears to suffer from a lack of funding because it is in a larger local authority that suffers significantly from sparsity. I think that the Government have further to go to meet the challenges of rural sparsity and to ensure that rural authorities are properly funded for the future.

Perhaps the most important part of F40’s consultation response is about the challenge that many of the lowest-funded areas still face:

“The Department will be aware that schools are facing major cost increases at a time of ‘flat cash’ funding settlements, particularly: September 2014’s 1% pay increase for teachers (typically, teacher’s salaries account for 65% of school costs)”—

in Worcestershire that figure is more like 85%, because of years of underfunding—

“The anticipated increase to non-teaching staff pay—which as yet remains unknown; The increase in the employer’s superannuation contribution from 14.1% to 16.4% from September 2015; The introduction of a flat rate state pension from April 2016, the impact of which will be to increase schools’ costs of in excess of 2% for teaching staff and most ancillary staff; For schools with sixth forms, a continuing reduction in sixth form funding; Energy, fuel and other cost increases”.

F40 says:

“We urge that these cost pressures are fully taken into account in the Spending Review for 2016-17 onwards. Without additional funding a typical secondary school will need to identify compensating savings of around £350,000, the equivalent of ten teachers.”

F40 schools, which have suffered from decades of underfunding, have no spare capacity to make such savings.

In meeting the challenges, we must recognise that March’s funding announcement was not and was never intended to be the end of the shift to fairer funding. As the Minister made clear at the time, it was a one-off measure to help those areas that were hit hardest by unfair funding and a precursor to more substantial reform. Ivan Ould, the chairman of F40, said in his response to the announcement:

“The additional funding is seen as a down-payment, or first step towards a new and fairer allocation system. This marks a huge step forward for our campaign for fair funding. The fact is that pupils and schools in f40 local authority areas have been dis-advantaged by an archaic system for nearly twenty years: they have been the poor relations in terms of the share of education funding.

This is a red letter day for members of f40 who can now look forward to a time when the injustice will end.”

F40 members will scrutinise closely the manifestos of each of the major parties, to see what they will propose with a view to ending the injustice swiftly and surely. F40 has always been a cross-party campaign, and we will look to each of the parties to deliver progress and will judge their manifestos by how clearly and within what time scale they commit to fair and transparent funding. Our funding has been unfair for far too long, and F40 authorities will not have endless patience for interim measures to ensure that better-funded authorities hold on to their advantage if that means holding back long-awaited justice for our constituents. We must have progress and we will scrutinise each statement of every party for what it can deliver.

I was not in the Chamber for the announcement of the £350 million for underfunded areas. Had I been there, I would have welcomed it, but I would have called, as I do now, for further progress. The debate is not a partisan one, but I was mildly disappointed by the Opposition Front Bench response on that day. In response to those who have argued, wrongly, that the first steps that have been taken are in any way partisan or designed to help coalition members, I would point out that many of the Conservative seats that have benefited, including my own, were held by Labour until 2010.

[Michael Fabricant]

My hon. Friend makes a powerful point. As he said, the F40 campaign was started by a Labour MP, David Kidney, in Staffordshire. Is he as surprised as I am to see just one Labour MP—no, two? [Laughter.]

[Andrew Percy (Brigg and Goole) (Con)]

I am not one of them.

[Michael Fabricant]

Am I wrong? There are two. [Interruption.] Anyway, is my hon. Friend as surprised as I am at the lack of turnout from Labour MPs apart from the shadow spokesman?

[Mr Walker]

I am delighted that we have a Labour MP in the Chamber, arguing the case for her F40 constituency. I am also delighted that, in proposing the debate, I had the support of the hon. Member for Bolsover, whose constituency stands to gain 34 times as much as the Prime Minister’s. The hon. Member for Halton (Derek Twigg), who made critical points in the debate, stands to gain more in his constituency than does the Minister for Schools, who made the announcement about fairer funding. If every F40 authority were to benefit from the changes, the winners would also include the shadow Chancellor, the shadow Education Secretary and the shadow Health Secretary, so Labour has a strong interest in supporting proper reforms. We want to see them step up to the plate.