Education Funding in London

Robert Neill Excerpts

Wednesday 4th May 2016 Commons Chamber

[Robert Neill (Bromley and Chislehurst) (Con)]

I beg to move,

That this House notes the Government’s intention to implement a new funding formula for schools from April 2017; welcomes the Department for Education’s commitment to hold a detailed consultation on this proposal; calls on the Government to recognise the unique challenges schools in London face; and further calls on the Government to ensure that any changes to the funding model are both fair and proportionate to London’s needs.

It is a pleasure to have secured this debate and to have the chance to raise the matter on behalf of myself and a number of colleagues cross-party who are members of the all-party parliamentary group for London, which consists of 47 Members of Parliament from London and 20 or so peers. The matter is of concern to the current Mayor, any future Mayor and the leadership of all parties on London councils. That is why we raise it in the way that we do; it is an important debate for us.

I should make it clear at the start that neither the Mayor nor London councils have an issue with the principle of a national funding formula and greater transparency in funding. The lack of transparency is a genuine issue for many local education authorities, and that is my personal approach as well.

One issue we want to flag up is that there is currently a consultation, and there are some good things in it, but there are also some risks. Those need to be drawn to the attention of the House and the Government because they could impact on London, given its particular nature.

[Joan Ryan (Enfield North) (Lab)]

I congratulate the hon. Gentleman on securing this important debate and on the powerful start he has made. I have no argument with fair funding, but my schools are telling me, “We need to level up, not down. We are in danger of setting deficit budgets. We want to retain some local flexibility.”

[Robert Neill]

I am conscious that those views were expressed at the meeting sponsored by the all-party group, and the right hon. Lady and others may well raise them in the debate.

A number of issues arise, but I want to concentrate on just a few. First, I have no problem with the principle of national funding, but we must take into account the particular circumstances in London. We should also remember that London is not a single, homogeneous unit; there are different pressures, which make the capital different from the rest of the country, and the different parts of the capital different from each other. We must therefore be particularly granular and careful in applying any formula.

That is important because London has been a success in education. It now outperforms all other regions at every key stage of testing. London pupils outperform their peers nationally at key stage 2 and key stage 4 and in entry to the English bac, and London schools outperform others in being rated outstanding or good, with 89% above the national average. London is therefore a success story, and it is one we do not want to put in jeopardy.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Will my hon. Friend give way?

[Robert Neill]

I will give way once more—to someone from outside London.

[Lucy Frazer]

My hon. Friend perhaps anticipates the point I am going to make as the Member who represents South East Cambridgeshire. Of course London has enjoyed great success, but is it not only right that other areas—areas that have been underfunded for years—should benefit from the opportunity to enjoy the same success so that they can be brought up to the level that London has enjoyed?

[Robert Neill]

That is part of the point about levelling up that was made by the right hon. Member for Enfield North (Joan Ryan).

The other two things I would observe are these. I mentioned that London is not homogeneous. The levels of funding in outer-London boroughs such as mine, Bromley, and in others, such as Richmond upon Thames and Kingston upon Thames, are actually often much lower than those that are headlined in respect of inner-London boroughs. Boroughs such as mine have levels of funding that are scarcely different from those in the shire counties around us.

[James Berry (Kingston and Surbiton) (Con)]

As one of the Members of Parliament representing Kingston upon Thames, may I ask my hon. Friend whether he agrees that it cannot be right that my borough gets less than £5,000 per pupil, while other boroughs in London get more than £7,000 per pupil?

[Robert Neill]

That is the point we need to address.

[Several hon. Members rose—]

[Robert Neill]

I will make a little progress and then I will take some more interventions, because it is worth setting one other point in context.

Historically, London has had higher levels of funding, but, as I said, that does not apply to every borough. There is also a reason for that funding.

[Several hon. Members rose—]

[Robert Neill]

I am just going to make this point before I start giving way again—otherwise I will not make a coherent argument at all. There is a reason for that funding, which is that London has, on many levels, greater challenges. There are far more children with English as a second language. There are higher levels of deprivation on almost any indices. There is great wealth, but there is also great deprivation, and those are closely—geographically and physically—juxtaposed. On any view, there are also extra costs involved in being a teacher or in running a school in London. The capital cost of sites is more because the land values are much higher. The cost of housing also means that teachers’ wages have to be higher. It is not illegitimate for those things to be reflected in the formula. London as a city is also the UK’s principal economic driver and puts in more to the UK economy than it takes out, so in that respect we are already subsidising the rest of the UK.

[Lyn Brown (West Ham) (Lab)]

I congratulate the hon. Gentleman on securing the debate and on the manner in which he has approached it. I agree with almost everything he has said. I come from an outer-London borough officially, but we have inner-London needs, and that is not reflected in the funding we receive from central Government. Does my hon. Friend—sorry, the hon. Gentleman—agree that we must make sure that funding is commensurate to the needs of the children in an area?

[Robert Neill]

The hon. Lady is almost an hon. Friend when West Ham are playing on Saturdays, and we hope for a good end to the season. She is right, and that brings me to the second point about funding. First, some outer-London boroughs are no better funded than shire counties anyway, yet in London there are much greater costs than in the rest of the country; and secondly, there is an artificial distinction in how funding in London is split up between inner and outer London. If justice is to be done in a formula, we need to move away from that distinction, which is purely historical. It goes back to the creation of the Greater London Council in 1963, when the then Inner London Education Authority was in fact part of the old London County Council, which had been a county education authority, while the outer-London boroughs had been educational authorities in their own right, either as parts of counties or as county boroughs. The historical anomaly that the hon. Lady mentions is the fact that her local authority is an amalgamation of two county boroughs that are part of the east end but were not in a county of London, so are treated as being in outer London, whereas Wandsworth, for example, which, in many respects, is much more prosperous, is an inner-London borough. That is a wholly illogical and unsustainable distinction that we need to break down because it distorts the arrangements.

[Graham Stuart (Beverley and Holderness) (Con)]

My hon. Friend is right. The funding system we have today, handed over from the previous Labour Government, is broken in London and in urban and rural areas alike, and needs to be fixed. On additional costs in London, no proposal that I have seen from anyone, including F40, suggests anything other than that London would continue to have significantly more money per head than other areas.

[Robert Neill]

I am grateful for that point, and I accept it. Provided that we get that built in, this need not be an argument, but rather a question of making sure that any formula reflects the diversity of needs that exists within London.

[Dame Margaret Hodge (Barking) (Lab)]

rose—

[Robert Neill]

I give way to the right hon. Lady, who is very well regarded in London for all her work.

[Dame Margaret Hodge]

I thank the hon. Gentleman and congratulate him on securing this debate. He talked about some of the factors that impact on the differential costs in London and elsewhere. Does he agree that the mobility of families in London is another factor? Two primary schools in my constituency have a 30% turnover every year, meaning that every teacher has to teach 40 children a year. The additional costs of getting to know, assessing and then responding to those needs ought to be had regard to in setting the formula if it is to be fair for every child in the country.

--- Later in debate ---

[Robert Neill]

I entirely agree with the right hon. Lady. I say to the Government that I hope that this could be reflected the formula without causing any damage to the overall principle. That is for the very good reason that because inner-London boroughs are geographically so small, and part of one single housing market and one single jobs market, people will very frequently move across them. In my constituency, one can move a quarter of a mile or half a mile down the road and be in one of two other London boroughs. London boroughs experience much more cross-border mobility than in a shire county where one could move 20 or 30 miles and still be within the same county. I would urge that that matter could fairly be taken into account.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate my hon. Friend on his remarks. The right hon. Member for Barking (Dame Margaret Hodge) mentioned turbulence as a reason for funding certain schools, particularly in London. Does my hon. Friend agree that London is not the only place where turbulence is suffered, and that the pupil premium that the Government rightly introduced to allow for the fact that service families move all the time is germane to this debate and needs to be reflected in the funding formula?

[Robert Neill]

I supported the introduction of the pupil premium, as did my hon. Friend. It is worth stressing that although turbulence occurs in other places, it is particularly acute in London owing to the size of its population and the churn of its population as a whole, with people moving in and out of London, and people moving within London, and therefore families and children moving and London authorities having to cope with far more cross-borough placements than other areas. That issue, together with the artificial distinction I mentioned, could be sensibly incorporated into the formula to reflect the position in London.

Many other hon. Members want to speak and I do not want to deny them the opportunity, but I just want to touch on a few other matters. We have discussed the two key issues, namely the churn and mobility and the inner-outer distinction, which is out of date. There is also pressure on how the question of deprivation is measured. It is currently done by postcode, but there can be massive extremes of wealth and poverty within some London borough postcodes. That is very apparent in some places in docklands.

[Victoria Borwick (Kensington) (Con)]

I congratulate my hon. Friend on securing this debate and absolutely concur with what he has said about deprivation. Kensington still has two of the most deprived areas in all of Britain, so nobody should think that it is paved with gold. We also have some outstanding schools. We have run through the initial proposals and—I hope that the Minister will take cognisance of this—it is calculated that 28 of our 33 schools will face a significant funding reduction should the proposals be implemented in full, with some outstanding schools set to lose 10% of their budget. I thank my hon. Friend for drawing the issue to our attention.

[Robert Neill]

There are pressures and they are only going to grow, given that the London pupil population is going to increase significantly: the year-on-year growth rate is 3%. That needs to be funded. London also faces particularly high pressures in relation to special educational needs provision. The Department does not provide the capital funding for special educational needs and disability provision, which is an issue for areas with higher land values than those elsewhere in the country.

[Several hon. Members rose—]

[Robert Neill]

I have been generous and I really do need to move on.

There are other issues that do not relate directly to the national funding formula, but they could correct one or two anomalies in how dedicated school grants work. The Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Mr Gyimah), has already been helpful and met representatives of my local authority and others to try to iron out the rigidities. It is not possible, for example, to spend money on SEND transport, which seems anomalous given that it is integrally linked to the provision of the schools themselves. There are similar issues with psychological services. If the consultation picks up on such things around the margins, that would greatly assist London boroughs, many of which run a pretty tight and efficient ship.

Councillor David Simmonds, the deputy leader of Hillingdon Council and chair of the Local Government Association’s children and young people board, is well known to Ministers. He has said:

“Probably the biggest risk lies in the underfunding of the High Needs Block which will remain with councils. I am concerned that there is an implicit assumption that councils will bail out the underfunding through recourse to council-tax payers, which is a major departure from the principle that underpins the Dedicated Schools Grant that education funding is ring-fenced.”

That is a fair point. I hope that the Government will take it on board and find a means of removing what I am sure would have been an unintended consequence of an insufficiently flexible formula.

My final point comes from two headteachers in my constituency. I took the liberty of asking them about their experience. The headteacher of a very efficient and highly rated primary school near where I live says that they

“already manage…on a very tight budget. I can confidently claim that without the very generous support of our Parent Teacher Association we would not be in a position to afford many of the resources that make our schools run so effectively—such as computing technology, sports coaches and even basics like exercise books.”

She refers to housing costs and the

“tendency for excellent young teachers to move away”.

This small school is doing all the right things. It has joined a multi-academy trust and is doing what the Government want it to do, but it is right up against it, on the margins. In an outer-London borough with low funding, we would want to ensure that the formula does not prejudice such schools.

The head of a good secondary school points out that

“Bromley is still the lowest funded London authority and actually as low as many of the Shire counties”.

She goes on to mention having some flexibility on the availability of schools forums, where they are still useful. She also reiterates the arbitrary distinction whereby she pays teachers from outer-London funding, while in Lewisham and Greenwich, which is a quarter of a mile up the road and where the demographic is no different, the situation is different because there happens to be a line on a map. That needs to be addressed by a sensible funding formula.

That is a helpful summary from people at the coalface. I will not trespass on the House’s time anymore, because I know that a number of London Members of all parties want to bring their own perspective to the debate, but I hope I have flagged up the key issues. I am grateful for the chance to do so.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Gyimah]

Ministers cannot be criticised on the one hand for not listening, and then be criticised on the other for listening too much. The truth is that my door is always open, and I am happy to meet whoever knocks on my door to discuss the issues as often as is necessary to address them.

There is an important need to address the funding system. There is a risk that the current system will not deliver the outcomes that we want for our children. For too long, schools have struggled with funding systems that are both unfair and, as my hon. Friend the Member for Bromley and Chislehurst suggested, opaque. The amount of money that schools receive is now an accident of history, not a reflection of the needs of their pupils or of children.



Local populations have changed over the past decade. For example, the proportion of children receiving free school meals in Manchester has fallen by 31% since 2005, while in Blackpool it has increased by 19%. However, schools funding has not kept up. The distribution of funding today cannot reflect the needs of our children if it has not changed in more than 10 years. The key question is not about levelling up or levelling down; it is about whether funding is addressing the individual needs of children.

The impact of the current funding system is hugely unfair. Let me look closer to home for the benefit of those who have spoken today. A child who is sent to school in Bexley will attract £4,635, but in next-door Greenwich, that suddenly becomes £6,020. Different local authorities also make different decisions about how to fund their schools. In 2015, Brent chose not to allocate any funding to pupils receiving free school meals, whereas Ealing chose to allocate nearly £1,700 to each primary pupil in exactly the same position.

We are committed to fixing that. I am proud to say that last month we launched the consultation referred to by the hon. Member for Scunthorpe (Nic Dakin), on new, fair, national funding formulas for schools and high needs. Our aims are clear, and I hope that Members in all parts of the House will agree that they are worthy. We want to create a formula that is fair, objective, transparent and simple. It should be clear how much funding is following each pupil, and that should be the same wherever they are in the country. Headteachers or academy trusts should know that if they move to take over underperforming schools, no matter where they are, their budgets will be fair and their schools will have the opportunity to excel.

Allocation is also important. We must allocate funding for high-needs provision, which has not been dwelt on today, on a fair and transparent basis. For too long, funding allocations have varied without reason. Parents and children with high needs deserve to know that the funding they require will be there, irrespective of where they choose to live. They deserve that security; they deserve that equality.

[Robert Neill]

I am grateful for what the Minister is saying. Will he assure me that he will present direct proposals to deal with the issue that was raised by our friend and colleague Councillor David Simmonds on behalf of the Local Government Association—the need to protect the high-needs element within any new arrangement for the formula?

[Mr Gyimah]

As my hon. Friend knows, what has taken place so far is the first stage of our consultation. The next stage will come up with detailed allocations for local authorities, but it will also make clear how each block within the dedicated schools grant would function within the system, and will certainly take account of my hon. Friend’s concerns about the high-needs block.

--- Later in debate ---

[Robert Neill]

Thank you for giving me that time, Mr Speaker. I should like to thank all Members who have participated in the debate, and to thank the Backbench Business Committee for making it possible. This has been a constructive debate. It is not always necessary to approach these subjects in a partisan fashion, although there have been some partisan speeches. If we strip out the rhetoric, however, we find key issues on which there is common ground, as the Minister and the shadow Minister recognised. I am grateful to the Minister for his assurances about meeting the group and about taking on board some of the key issues that have been flagged up around the high-needs element, mobility, which is particularly important, special educational needs, and cost pressures and cost adjustment. He will know that the devil is in the detail, and his willingness to engage with members of the group is appreciated. This is obviously an important issue, and it was therefore important to ventilate it on the Floor of the House before the consultation finished. I am grateful to all Members for their help.

[Margot James (Stourbridge) (Con)]

That was succinct.