School Funding

Robert Halfon Excerpts

Thursday 25th April 2019 Commons Chamber

[Mrs Main]

I hope that the Minister is listening, and I hope we can have another shot today at persuading him that this funding crisis needs addressing. Brexit cannot be used as an excuse to keep kicking this can into the long grass.

The Government have told us repeatedly that record levels of funding are going to our schools. The simple facts tell us that more money is being spent overall, and that is a good thing, but schools are not feeling the effects of that increase. Teachers and heads keep telling me that we must differentiate between the school’s budget and the teaching budget, and that although more money is being spent on education, it does not necessarily filter down to improve the experience of pupils and teachers.

The pressures facing schools are widely known across the House and in the Department for Education. It should worry us that, earlier this month, over 1,000 councillors wrote to the Secretary of State demanding more money for local schools. That is not just about campaigning for the local elections. Many of those people are on parent-teacher associations and understand the pressures that their schools are under. The campaign supported by those councillors emphasised the real-terms cut in per-pupil funding and the severe problems faced by local authorities in funding education, particularly for special educational needs and disability—SEND—pupils. Their letter stated that, according to the Education Policy Institute, almost a third of all council-run secondary schools and eight in 10 academies are now in deficit.

The Institute for Fiscal Studies recently found that per-pupil school spending had fallen by 8% in real terms since 2010. That must be considered alongside the fact that, according to the DFE’s own figures, there are now 500,000 more pupils in our schools than there were in 2010. That is half a million extra young minds to neuter—

[Robert Halfon (Harlow) (Con)]

Nurture!

[Mrs Main]

Nurture! Not neuter!

That is half a million extra young minds to nurture, and that cannot be done on the cheap. I am not asking the Minister for a loaves-and-fishes miracle for my local schools. I do not expect a smaller amount of money to be spread among more people. I am asking for a financial settlement to reflect the extra strain on the budget, and a funding formula that delivers for all our schools. We must not rob Peter to pay Paul when the formula is next tinkered with.

The IFS has also reported that school sixth forms have endured a 21% reduction in per-pupil spending since 2011, and it estimates that by 2019-20, spending per sixth-form pupil will be lower than at any point since 2002. That is going back a very long way. I am sure that the Minister will agree that the picture varies, but the signs indicate that schools are not benefiting universally, and we must find a new funding formula. Many schools I have spoken to have reiterated that the national funding formula must cover the funding needed for schools, not just the pupil-led aspect. Pupils and parents expect those schools to be fit for purpose as well as to provide lessons.

The Sutton Trust reports that up to two thirds of secondary schools have had to cut teaching staff for financial reasons. We are also seeing a worrying trend in cuts to the extracurricular activities and facilities that can be so important for children as they make their way through their school careers. Around 60% of secondary school teachers have reported cuts in IT equipment for cost reasons, with 40% stating that school outings have been cut, too. We must therefore be concerned that almost a third of teachers polled by the Sutton Trust reported a cut in sporting provisions for pupils in their schools.

I said it in the previous debate and I will say it again that Sian Kilpatrick, the head of Bernards Heath Junior School in my constituency, wrote to parents—she is not alone in that—to explain the financial squeeze that her school faces due to funding restrictions. She compiled a list of all the additional things to which she must allocate funding—not a nice-to-have list, but a must-be-done list—that includes vital outdoor risk assessments, legal human resources advice, general maintenance costs and staff insurance payments, which are just some of the additional costs for which schools have to find money. On top of that, she even had to pay £8,000 to get her school’s trees pruned. Schools across the country face similar shopping lists that will suck up vital school funding.

Schools are also concerned about their lack of ability to plan their finances. With the introduction of the national funding formula happening over several years, there is huge uncertainty about how it will affect individual schools, and headteachers are unwilling to commit to long-term planning, which cannot be right. Whichever Government are in power, we need long-term certainty for our schools’ futures. Angela Donkin of the National Foundation for Educational Research cites several key factors that have stretched school budgets in recent years. I will not go through all the factors, because I know how many Members want to speak. I am sure that others will list them today, but they include, to name but a few, an increase in employer national insurance contributions and employer pension contributions, ageing building stock, the teacher pay award and the requirement for all students to continue in education.

The requirement on schools to offer services previously carried out by other public agencies can been seen across the country. A survey by WorthLess? found that 94% of headteachers polled said that their schools now routinely deliver services previously provided by local authorities. This is not a point of debate, but whoever is asked—no matter the local authority, county or politician —will agree with it. All these factors have resulted in immense strain on school budgets. More money is going into schools, but so much more is being asked of the money.

Staff and staffing costs are under severe pressure. Many school staff in my constituency cannot afford to live in the area, so the staff turnover and churn is huge. Many staff are let go because schools can find it easier and cheaper to take on newly qualified, less-expensive members of staff. With the difficult roles that our teachers now must fulfil, we cannot expect a school to be run by young, inexperienced teachers. Is it any wonder that the number of teachers leaving the profession within four years is on the rise and that the number of vacancies and temporarily filled posts is increasing?

I will not go through all my facts and figures, because I want to leave myself a couple of minutes to sum up at the end, but there is widespread unhappiness about the handling of the recent teacher pay announcement. The key problem is that schools themselves have to fund the first 1% of the pay rise—there is nothing like dipping one’s hand into someone else’s pocket, Chancellor. We want to pay our teachers and teaching assistants more, because they do a wonderful job, but if we increase their pay, we cannot expect schools to fund some of that increase, because the money will have to come from somewhere else. Declan Linnane, the head of Nicholas Breakspear Catholic School in St Albans, told me that the 1% increase alone will cost his school £30,000—money that he just does not have.

The Department for Education reports that upwards of 1 million pupils have special educational needs in our schools, and the number has risen significantly recently. Those children will often need classroom assistants and help, and they often represent an additional requirement on school resources, so is it any wonder that parents are telling me that there is often reluctance to statement children with special educational needs or that there are greater school exclusions among pupils with difficulties that manifest themselves in destructive classroom behaviour?

I will conclude my remarks with three questions for the Minister. First—this comes from a teacher in my constituency—what guarantees can we have regarding the cost of teacher pension contribution increases and salary increases? He said that we have only been given funding information for the 2019-20 academic year, with nothing beyond that point. Secondly, staff recruitment is at crisis level and recent initiatives are failing, so how can the Government make the profession more attractive to graduates? Thirdly, the basic rate for 16 to 19-year-old funding has been frozen at £4,000 a student since 2013-14, and the Institute for Fiscal Studies reports that school sixth forms have faced budget cuts of 21% per student, so what commitment can the Minister give that that will be addressed?

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[Robert Halfon (Harlow) (Con)]

The Education Committee’s inquiry on school and college funding has sought to bring together two seemingly irreconcilable views of the world. The first view is that schools are seeing year-on-year funding reductions and, having largely exhausted non-staff savings through efficiencies, are increasingly moving to the bulk of their budget, which is spent on staff, to find savings. The second view is that, amid the challenging public finances of 2010, difficult decisions were made that saw the core schools budget protected over the lifetime of that Parliament.

Of course the Government have a sense of the public finances, but so do schools, teachers and parents with whom we are in almost constant communication. I visit schools in my Harlow constituency every week and am well aware of the funding pressures they face. William Martin infant and junior schools have had to restructure staff and make £360,000 of savings to set a viable three-year budget. It is a matter of some regret that the debate on education funding has become so polarised. I hope that through our report we will be able to reduce the distance between the different viewpoints.

I am pleased that, with the emergence of a strong and independent evidence base provided by the National Audit Office, the Institute for Fiscal Studies and the Education Policy Institute, among others, the additional cost pressures faced by schools and the effect of rising pupil numbers are now understood and accepted as fact. The 2015 spending review missed a real opportunity by failing to anticipate the pressures that schools face and by not seeing the importance of transitional funding to support the implementation of the national funding formula.

Throughout our inquiry, we have been told that the school funding picture is much more complex than a simple question of inputs and outputs. Andreas Schleicher from the OECD explained how increasing education expenditure does not necessarily lead to greater performance, either in productivity or in international surveys such as PISA. Pumping huge amounts of money into the school system without a proper plan or programme of reform is unlikely to lead to good results. That has been illustrated throughout our inquiry.

We need to look at the pupil premium, because its accountability mechanisms seem totally ineffective. Teachers and headteachers have repeatedly told us that the money ends up being spent on matters wider than targeted support for disadvantaged children. What is to be done? In the past, the Government had something of a strategy for the school system, and the Minister for School Standards will update the Committee on that during a hearing on accountability next week, but we need to go beyond a more direct relationship between the Department and schools and articulate the purpose of education policy and schools at the moment. Is it to top the PISA rankings? Is it to produce a higher proportion of graduates? Is it to prepare the economy for the challenges of the fourth industrial revolution? Most importantly, is it to address social injustice in our education system?

[Mike Amesbury (Weaver Vale) (Lab)]

I respect the right hon. Gentleman’s considerable experience in this field. Simon Kidwell, a headteacher in my constituency, has called for a more long-term funding arrangement. The current funding arrangement is just not sufficient to fund schools in my constituency and beyond.

[Robert Halfon]

I think what I am about to say will answer the hon. Gentleman’s point, because I strongly agree with him.

I want Ministers, in the strongest possible terms, to embrace wholeheartedly our proposal to have a 10-year strategic plan for education. Indeed, I am encouraged by the Minister’s response to the Committee at the beginning of the month. There has to be a shared vision beyond the next election, whenever that might be. The principle of school-based autonomy lay at the heart of policy in 2010. We have identified some of its limitations, particularly when it comes to governance, financial management and accountability. But autonomy within boundaries is a sound principle from which to start.

A 10-year strategic plan ought to be accompanied by a long-term funding plan, as the hon. Gentleman has just said. That funding plan, if not stretching beyond the spending review period, should set clear expectations for what it would cost to fund schools and colleges to do their jobs.

The NHS now has a long-term, 10-year strategic plan and a five-year funding settlement, which has come about following serious advocacy by NHS England and by the previous and current Health Secretaries, who strongly made the case both for more funding and for funding accompanied by proper reform. It mystifies me that perhaps the most important public service of all, education and skills, does not seem to receive the same attention or public advocacy for a similar path.

I have said in the Education Committee that the Department is sometimes like the cardinals at the Vatican in its negotiations with the Treasury, hoping that a bit of white funding smoke may appear from the rooftops, but, as the NHS argument has shown, this is not the right approach. I very much hope the Department will negotiate a 10-year plan with the Treasury and come to the House, as the Health Secretary did, to set it out. We need a proper funding settlement lasting at least five years, just as the national health service has had, so we can stop having these day-to-day battles on the finances of schools and further education colleges and so that our wonderful teachers can carry on teaching and our children can carry on learning.

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[Tim Loughton (East Worthing and Shoreham) (Con)]

There is a real sense of déjà vu about this debate. My hon. Friend the Member for St Albans (Mrs Main) had a debate on 24 October, as she said, and there was an estimates day debate on 26 February and then another debate on 4 March, after the big petition. Like my hon. Friend, I spoke in all those debates, but the situation remains the same, so I pay tribute to her perseverance. I also pay tribute to all our teachers for the huge challenge that they face. Hopefully, they are currently busy nurturing our pupils, not neutering them, as my hon. Friend suggested earlier.

I shall pick up where I left off: the last time around in Westminster Hall, I was rudely interrupted after just four minutes of speaking. I had generously given way to interventions, only for the scorers not to credit me with the extra injury time. I am happy to take interventions this time, if the scorers are awake. At that time, I described the funding crisis in schools as a national emergency; alas, nothing has changed. West Sussex was at the bottom of the fourth quartile for funding; after the changes to the national funding formula, we are still in the bottom quartile. That is why, of the 25,222 responses to the consultation on the fair funding formula, no less than 9% were representations from West Sussex. Although I cannot speak for the Minister, who is also a West Sussex MP, I can, then, speak for my hon. Friend the Member for Worthing West (Sir Peter Bottomley) and other West Sussex MPs.

As I have said before, I went to see all the headteachers—I got them all together—and all the chairs of governors in my constituency so that they could give me real-life examples of the funding challenges facing them now. They did not give scare stories or tell me about prospective challenges, but told me about what they are facing now. As a result of that, I wrote an eight-page letter to the Secretary of State to set out many of the problems, to which I shall refer in a moment.

First, let me mention two new things. I was recently asked to go and see some nursery school providers in my constituency. I thought I was meeting two or three, but 50 turned up. There are serious problems with how the 30 hours’ funded childcare—it is not free but funded—is being reimbursed to independent nurseries. Some 81% of children in non-domestic settings are in independent nurseries, of which 90% say that the reimbursement does not cover the full costs of that provision. Many are at risk of having to turn away some of the most deprived families. Nursery closures were up 66% in the past year and 5,000 places have been lost. It is a false economy not to fund important pre-school settings properly.

Secondly, the Minister might want to comment on the future of the pupil premium in the light of a report from the Sutton Trust. Will we make sure that the pupil premium is part of the new funding round? There are concerns that increasingly the pupil premium is being used, particularly in the more deprived schools, to plug gaps in the school budget, rather than to fund the pupils who specifically need it.

[Robert Halfon]

My hon. Friend was a brilliant children’s Minister and knows an enormous amount about this subject. He mentioned the pupil premium; does he agree that how it is used should be much more accountable? The Government need to look into whether it is working and how the money is being spent, because it should be spent on the most disadvantaged pupils.

[Tim Loughton]

That is absolutely right. Before my right hon. Friend became its Chair, the Education Committee did a report and found out that the pupil premium was not going to those pupils for whom it was absolutely intended, and for whom it was absolutely essential to make sure that they could close the gap with the children who did not qualify for it.

Another issue that I wish to raise with the Minister again—I did not get a proper reply the previous time—is the justification for schools having to fund out of their own budget the 2% pay rise in salaries this year. That is a significant hit on our schools. In February, the Government said in their paper on school costs that schools could be far more efficient and save a lot of money if they had better procurement methods, but the trouble is that in many of my local schools the staffing budget now accounts for something like 90% of the school budget. The savings the Government describe can be made only against soft costs, which are going up by 2% because of the salary award. I really do want an explanation of how the Department expects schools to pick up the bill for that additional 2% out of school funding, given all the other competing challenges they have.

Let me refer to a few of the points that came out of my roundtable meetings in my constituency. Shortfalls are being clawed back by reducing staffing costs, which in some cases account for 90% of a school’s budget, as I said. In one medium-sized primary school, teaching assistant support has been reduced by more than 200 hours. The school has reduced its budget for continuing personal development training for staff, and its inclusion co-ordinator has not been replaced.

At a junior school, the professional development budget, which in previous years was between £3,500 and £5,000, is now zero. The extended curriculum budget, which was between £19,000 and £20,000 in previous years, is now £500. The learning resources budget, which was up to £120,000, is now just £35,000.

At a medium-sized primary school in my constituency, high-level teaching assistants are being used to cover classes so that the school can cut supply-staff costs. The school is unable to pay overtime. Counselling levels have fallen, which I am particularly concerned about. We know about the support that school-age children need because of the pressures on mental health from social media, peer pressure and other things. If we do not have that in-school support, it will be a false economy because the children involved will not be able or prepared to take advantage of their education.

There are real problems in special schools. This year, there will be at least nine more pupils at one special school in my constituency than there were in the previous year, but there will be no additional teaching staff. These are specialist schools with high-demand pupils getting no more teaching staff to help to look after them.

A secondary academy in my constituency has had to narrow the curriculum on offer to cut costs. The school is unable to meet the demand for counselling—there is currently a four-month waiting list. A small primary school is reducing swimming lessons and music lessons. All these are real-life examples of the effect of this funding now. It is essential that the comprehensive spending review this year does something about this situation urgently.

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[Nick Gibb]

I will not give way.

Since the introduction of the phonics check in 2012, the proportion of six-year-olds reaching the expected standards in the phonics decoding check has risen from 58% in 2012 to 82% last year. We have risen from joint 10th to joint eighth in the PIRLS—the Progress in International Reading Literacy Study—of the reading ability of nine-year-olds, achieving our highest ever score in that survey. In secondary schools, our more rigorous academic curriculum and qualifications support social mobility by giving disadvantaged children the knowledge they need to have the same career and life opportunities as their peers. The attainment gap between the most disadvantaged pupils and their peers, measured by the disadvantage gap index, has narrowed by nearly 10% since 2011.

To support these improvements, the Government have prioritised school spending, while having to take difficult decisions in other areas of public spending. We have been able to do that because of our balanced approach to the public finances and to our stewardship of the economy, reducing the annual deficit from an unsustainable 10% of GDP in 2010—some £150 billion a year—to 2% in 2018. The economic stability that that provided has resulted in employment rising to record levels and unemployment being at its lowest level since the 1970s, giving young people leaving school more opportunities to have jobs and start their careers. Youth unemployment is at half the rate it was when we came into office in 2010, taking over from Labour.

It is our balanced approach that allows us to invest in public services. Core funding for schools and high needs has risen from almost £41 billion in 2017-18 to £43.5 billion this year. That includes the extra £1.3 billion for schools and high needs that was announced in 2017 and that we have invested across 2018-19 and 2019-20, over and above the plans set out in the spending review.

Figures from the Institute for Fiscal Studies show that in 2020 real-terms per pupil funding for five to 16-year-olds in schools will be more than 50% higher than it was in 2000. We do recognise, though, the budgeting challenges that schools face as we ask them to achieve more for children. One element of it is about making sure that money is directed to where it is needed most. Since April last year, we have started to distribute funding through the new national funding formula, with each area’s allocation taking into account the individual needs and characteristics of its pupils and schools. Schools are already benefiting from the gains delivered by the national funding formula.

Since 2017, we have given every local authority more money for every pupil in every school, while allocating the biggest increases to the schools that the previous system had left most underfunded. By 2019-20, all schools will attract an increase of at least 1% per pupil compared with 2017-18 baselines, and the most underfunded schools will attract up to 6% more per pupil by 2019-20, compared with 2017-18.

[Robert Halfon]

I welcome what my right hon. Friend said about phonics and SATs, which it is important we keep, but does he agree that if the national health service can have a 10-year plan and a five-year funding settlement, education should have a 10-year plan and a minimum of a five-year funding settlement?

[Nick Gibb]

As I have said to the Education Committee, which my right hon. Friend chairs, I do not disagree with that view. We will say more about our approach to the spending review in due course.

In Hertfordshire, where the constituency of my hon. Friend the Member for St Albans is located, funding for schools has increased this year under the national funding formula by 2.4% per pupil compared with 2017. That is equivalent to an extra £32.1 million in total, when rising pupil numbers are taken into account.

My hon. Friend the Member for Saffron Walden made a measured and therefore persuasive speech about the funding of schools in her constituency. As a consequence, her words will undoubtedly carry weight with the Treasury. She made the important point that 90% of pupils in her constituency now attend good or outstanding schools, compared with just 67% in 2010.

I listened carefully to my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton); as a neighbouring MP, I find I always do. He will be aware that funding in his constituency has risen by 5.5% per pupil compared with 2017. That is one of the highest increases and reflects the historical underfunding of West Sussex schools—something the national funding formula was introduced to address. He referred to teachers’ pay, which is due to rise by 3.5% for teachers on the main pay scale and by 2% for those on the upper pay scale.[Official Report, 1 May 2019, Vol. 659, c. 3MC.] We are funding both those pay rises, except for the first 1%, which schools will have budgeted for already.

I also listened carefully to the speech by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). I congratulate him on the fact that 96% of pupils in schools in his constituency are attending good or outstanding schools. He will be aware that under the national funding formula per pupil funding in his constituency is rising by 4.5% compared with 2017-18.

I welcome the contribution to the debate by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) and his acknowledgement that, as a result of the fairer national funding formula, schools in his constituency will attract a 5.9% per pupil increase. In a compelling speech, my hon. Friend the Member for Cheltenham (Alex Chalk) raised the issue of special needs funding. Our commitment to helping every child to reach their full potential applies just as strongly to children with special educational needs and disabilities as it does to any other child, and we know that schools share that commitment. We recognise the concerns that have been raised about the costs of making provision for children and young people with complex special educational needs. We have increased overall funding allocations to local authorities for high needs year on year, and we announced in December that we will provide an additional £250 million over these last two financial years.