School and Early Years Finance (England) Regulations 2018

Debate between Naz Shah and Mike Kane

Wednesday 21st March 2018 General Committees

[Mike Kane]

I am grateful to my hon. Friend for that extraordinarily valid point. We know from our postbags that a rising number of parents cannot get special educational needs and disability provision for their children because schools are having to cut that and less specialist services back at local authority level. Local authorities have been cut—they have lost around 30% to 40% of their budgets—which has had a direct impact on the services that schools can buy in.

The number of local authority maintained secondary schools in deficit has nearly trebled, which means that more than a quarter of all such schools are now in deficit. In 2016-17, the proportion of primary schools in deficit increased significantly, to 7.1%. The average primary school deficit also notably increased, from £72,000 in 2010-11 to £107,000 in 2016-17.

Perhaps the most worrying finding was that a large proportion of local authority maintained schools are now spending more than their income, and 40% of those secondaries have had balances in decline for at least two years in a row. Similar figures are found for local authority maintained primaries; in 2016-17 more than 60% were spending more than their income. A quarter had had a falling balance for two years or more.

The Education Policy Institute report points to the inevitable outcome of the growing budget pressures. Staff account for the majority of spending by schools, at around two thirds. It is therefore likely that schools will find it difficult to achieve the scale of savings necessary without cutting back on staff. What is the Government response? Only last week we found that the new Education Secretary had been forced into an embarrassing U-turn after he claimed wrongly that school spending is going up. That is the message they would like to put out. The constant delay of the fair funding formula led to constant Conservative press releases about fixing funding in our schools, but that has been far from the case.

[Naz Shah (Bradford West) (Lab)]

Does my hon. Friend agree with me that in places such as Bradford West, where we have an excellent cluster of maintained nurseries, we are still not sure where the funding is coming from? If it is coming, will it be to meet the existing deficit—from special needs, early years and so on—or will it be new money?

[Mike Kane]

The biggest impact we can have as civil society and government on the social mobility and educational attainment of our young people is in the early years, but our Sure Start centres have been decimated over the past few years, with no guarantee—absolutely none—of what their future will be. My hon. Friend makes a very valid point.

The Secretary of State originally said:

“We know that real-terms funding per pupil is increasing across the system, and with the national funding formula, each school will see at least a small cash increase.”—[Official Report, 29 January 2018; Vol. 635, c. 536.]

Last week, however, he had to respond to the House on that. What had Sir David Norgrove, head of the UK Statistics Authority, pointed out? He had said that funding was being frozen in real terms until 2020, not increased. The Secretary of State therefore had to write to correct the record.

I have a few questions for the Minister. One of the major issues is whether he will confirm that the regulations allow for a 1.5% cut in funding per pupil in cash terms. Our evidence suggests that they do, so that is a fair funding formula that allows for a 1.5% cut in funding in cash terms. Will he confirm that the Government will not increase overall pupil funding? As the Institute for Fiscal Studies has said, the additional £1.3 billion announced after the election last year keeps funding basically flat in real terms over the next two-year period. Will he confirm that? Will he also confirm that funding has fallen in real terms since 2015? For example, the National Audit Office reports an accumulated £2.7 billion cut from school budgets since 2015, despite the regulations before us.

The national funding formula consultation has been delayed and delayed, and pushed back and pushed back after the election. Looking at the regulations, the formula has been a colossal waste of time, effort and money, and has come with that delay. The Government have come to a conclusion that only tinkers with the edges of the funding crisis in our schools. For now, I will leave it there.