School Funding

Nick Gibb Excerpts

Wednesday 25th January 2017 Commons Chamber

[The Minister for School Standards (Mr Nick Gibb)]

Of course, the PISA students who were tested in 2015 spent their primary school years being educated under a Labour Government, not under the reforms implemented by this Government.

This has been an important debate, featuring excellent contributions from Members in all parts of the House, at a time when the Government are consulting on the details and weightings of the factors that will make up the new national funding formula.

The hon. Member for Ashton-under-Lyne (Angela Rayner) launched our debate today with her joke about robbing Peterborough to pay Poole. Alas, her facts are as weak as her joke, because Peterborough will see a rise of 2.7% under the formula, an increase of £3.7 million, and Poole will also see a rise of some 1.1% under the formula. What we have learnt from Labour today is that it does not support the principle of equal funding on the basis of the same need, and half of Labour Members will see a net gain in funding as a result of the new formula, including the hon. Member for Oldham West and Royton (Jim McMahon), where funding will increase by £1.7 million, with an extra £1.2 million for schools in the constituency of the hon. Member for Ashton-under-Lyne .[Interruption] I will not give way.

My hon. Friend the Member for Stroud (Neil Carmichael) asked us to look again at the deprivation block. The proportion of the formula that we have applied for deprivation reflects what local authorities are already doing across the country at the moment. The hon. Member for Liverpool, West Derby (Stephen Twigg) asked about high-needs funding; Liverpool is due to gain 14.4% in high-needs funding under the formula, with increases of 3% per year in 2018-19 and again in 2019-20.

My hon. Friend the Member for Louth and Horncastle (Victoria Atkins) was right to say that the new national funding formula is resulting in the cake being cut a little more fairly. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) was right to point out the flaw in Labour’s motion. The Government are not cutting school spending; it is at an all-time high.

I welcome the constructive and supportive speeches from my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), and my hon. Friends the Members for North Dorset (Simon Hoare), for Kingston and Surbiton (James Berry), for Mid Derbyshire (Pauline Latham), for Boston and Skegness (Matt Warman), for Newark (Robert Jenrick), for Solihull (Julian Knight), for Rugby (Mark Pawsey), for Bury St Edmunds (Jo Churchill), for Plymouth, Sutton and Devonport (Oliver Colvile), for Bexhill and Battle (Huw Merriman) and for Morecambe and Lunesdale (David Morris).

In our manifesto, we promised to remedy the unfair and anachronistic funding system that no longer reflects the genuine needs of pupils and schools. It had become atrophied on the basis of factors as they stood in 2005, rather than the make-up of the student population today: an outdated system, fixed in amber where a pupil in Brighton and Hove secured £1,600 more than a pupil in East Sussex, with countless other examples of unfairness up and down the country.

The Government have already consulted on a set of principles that should drive this new formula—a basic unit of funding; one for primary schools, one for key stage 3 secondary pupils and one for key stage 4 secondary pupils. This figure would make up the vast bulk of the formula, and would be the same figure for every school in England.

On top of this, there is a factor for deprivation, ensuring that schools are able to close the educational attainment gap between those from wealthier and poorer backgrounds. There is also a factor for low prior attainment, ensuring that schools are able to help children who start school educationally behind their peers. There is a factor for sparsity, addressing cost pressures unique to rural schools. There is a mobility factor for schools that routinely take pupils part way through the year. There is a lump sum to help address the fixed costs that disproportionately affect small schools. And there is a factor that takes into account higher employment costs in London and some other areas.

These are the right factors, as responses to the first stage of the consultation confirmed. They are the right factors because they will help drive our education reforms to the school curriculum, which are already resulting in higher academic standards and raised expectations. They will further drive our determination that all children, regardless of background or ability, will be well on their way to becoming fluent readers by the age of six, which 81% of six-year-olds are now, compared with just 58% five years ago. They are the factors that will help further drive the introduction of new, more academically demanding, knowledge-based GCSEs, putting our public exams and qualifications on a par with the best in the world.

As part of our consultation, we wanted to be transparent about the effects of the new formula on every school and every local authority on the basis of this year’s figures, and 54% of schools will gain under the new formula. But with any new formula there will be winners and losers. Even within local authority areas that gain overall, some schools with few of the factors that drive the additional funding will see small losses in income. That is the nature of any new formula, built on whatever basis or weightings—unless, of course, the new formula maintains the status quo.

Accepting that a new formula, by definition, produces winners and losers, accepting that we will ensure that the losing schools lose no more than 1.5% per pupil in any year and no more than 3% in total, accepting that the gaining schools will see their gains expedited by up to 3% in 2018-19 and by up to 2.5% in 2019-20, and accepting in principle that the factors of deprivation and low prior attainment are right, what is left is the question whether the weightings are right. These weightings are crafted to drive social mobility. They are calculated to help children who are falling behind at school, and they are motivated by our desire to do more for children from disadvantaged backgrounds.

The national funding formula is not about the overall level of school funding or the cost pressures that schools are facing over the three years from 2016-17 to 2019-20. The formula is about creating a nationally delivered and fair school funding system. We wanted to grasp the nettle—a nettle that previous Governments have assiduously avoided—and introduce a new national funding formula, ending the postcode lottery and ensuring that over time we have a much fairer funding system.

Despite all the pressures to tackle the budget deficit that we inherited from the last Labour Government—an essential task if we are to continue to deliver the strong economic growth, the high levels of employment and the employment opportunities for young people that we want—we have managed to protect core school spending in real terms. Indeed, in 2015-16 we added a further £390 million, and for 2018-19 and 2019-20 there will be a further £200 million to expedite the gains to those historically underfunded schools that the new formula seeks to address.

Despite this, we know that schools are facing cost pressures as a result of the introduction of the national living wage and of increases to teachers’ salaries, to employer national insurance contributions, to teachers’ pensions and to the apprenticeship levy. Similar pressures are being faced across the public sector—and, indeed, in the private sector—and they are addressed by increased efficiencies and better procurement. It is important to note that some of these cost pressures have already materialised. The 8% that people refer to is not an estimate of pressures still to come. In the current year, 2016-17, schools have dealt with pressures averaging 3.1% per pupil. Over the next three years, per-pupil pressures will average between 1.5% and 1.6% a year. To help to tackle those pressures, the Department is providing high quality advice and guidance to schools about their budget management, and we are helping by introducing national buying schemes for products and services such as energy and IT.

We are consulting, and we are listening to the responses to the consultation and to the concerns raised by my hon. Friends and by Opposition Members. The Secretary of State and I have heard representations from some low-funded authorities about whether there is a de minimis level of funding that their secondary schools need in circumstances where few of their pupils bring with them the additional needs funding. We will look at this, and at all the other concerns that right hon. and hon. Members have raised.

This Government are taking the bold decision, and the right decision. We are acting to right the wrongs of a seemingly arbitrary and deeply unfair funding system. Over the past seven years, while fixing the economy, the Government have transformed the education system. We have ended grade inflation, breathing confidence back into our public exams. Effective teaching methods such as Asian-style maths mastery and systematic synthetic phonics are revolutionising the way in which primary pupils are being taught.

More pupils are being taught the core academic subjects that facilitate study at this country’s world-leading universities. Some 1.8 million more pupils are now in schools judged by Ofsted to be “good” or “outstanding”. The attainment gap between disadvantaged 16-year-olds and their better-off peers has closed by 7%. That is a record to be proud of.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.