School Funding

Robin Walker Excerpts

Tuesday 24th April 2012 Westminster Hall

[Mr Robin Walker (Worcester) (Con)]

It is good to see such a well subscribed debate under your chairmanship, Mr Gray. I am mindful that Worcestershire’s lowly place near the bottom of the league tables for school funding is only one above that of Wiltshire so, although as Chair you can make a limited contribution to the content of the debate, it is appropriate for you to be presiding over it.

I declare an interest as an unpaid member of the executive of F40, a cross-party group that campaigns on behalf of Wiltshire, Worcestershire and the other authorities that are among the lowest funded in the country. I also congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing today’s debate. He and I have worked closely together on a number of issues, representing as we do two of England’s finest cathedral and rugby-playing cities. It is always a pleasure to hear him speak eloquently and wittily for the interests of his constituents and schools, interests on which Gloucester, Worcester and, it appears, Warrington are fully united.

I am pleased to speak before a Minister who understands such a complex and difficult area of policy extremely well. He has a firm grasp of the issues facing our schools and has given a great deal of time to colleagues and to campaign groups, for which I thank him. He has previously expressed the clear and unequivocal view that the current system of school funding is flawed and that reform is necessary. Indeed, before I express my pleas and concerns, it is important to recognise that there was much to be warmly welcomed in the Government announcement of 26 March, “Next steps towards a fairer system”. The Secretary of State, in his foreword to the paper, said:

“The current system is opaque, inconsistent and unfair with huge differences between areas.”

I could not agree more. He promised a new national funding formula after the next spending review—the right answer on the wrong timetable in my opinion, but nevertheless the right answer.

The Secretary of State also announced moves to simplify significantly local funding formulae and to create much greater transparency—I welcome the latter in particular, because transparency might be the key to breaking down the vast disparities and lack of consistency in the current system. If Ministers mean school governors to have more notice of their funding arrangements in future, I strongly welcome such a move, which has been called for by pretty much every school governor I have ever met. If, too, we will see the per pupil funding that is actually received school by school and area by area—rarely possible to date—I welcome it all the more. Ministers could be providing the decisive weapon to expose once and for all the disparities of the system; organisations such as F40 will use it to the best of their abilities.

[Fiona Bruce]

I congratulate my hon. Friend on his work co-ordinating Members in the F40 group, of which I am one. I highlight again the anomalous funding position of the adjacent large unitary authorities of Cheshire East and of Cheshire West and Chester. Cheshire East runs from Poynton near Stockport in Greater Manchester in the north right down to Audlem, near Shropshire, in the south; within that range, we have severe pockets of deprivation. Meeting with head teachers, I have the sense that not only do they see the funding as unfair but they feel the injustice. Is it not right that we address the issue as a matter of justice, and that we do so expeditiously?

[Mr Walker]

Absolutely, I could not agree with my hon. Friend more. That injustice would be made all the more clear if there were greater transparency on school-by-school funding.

There have also been some moves to protect special needs funding and to simplify arrangements for early years provision, all of which we welcome. The Government set out plans to end disparities within local authority areas but, with a perhaps understandable concern to limit turbulence, they have so far resisted dealing with disparities between authorities until 2015. There is much to praise, therefore, but that last point is a profound mistake.

The biggest and most obvious flaws in the current funding system, as my hon. Friends have pointed out, are the yawning gaps left in per pupil funding between neighbouring authorities. There is a gap of £1,088 between annual per pupil funding in Worcestershire and neighbouring Birmingham; my hon. Friend the Member for Loughborough (Nicky Morgan) mentioned the gap of almost £900 between Leicester and Leicestershire, the lowest funded authority; and there is the stunning gap of nearly £5,000 between the lowest and the highest authorities. We have often discussed such disparities before, and I accept that there are many historic and political reasons for them, but the Minister has accepted the point that no firm formula underpins them any longer. The successive layers of government priorities that created those gaps have ossified over the years, and the gaps have grown ever wider as spending has grown, creating an unfair and indeed unjustifiable system.

It is extremely welcome that the Government have recognised the problem, and the previous Government suggested that they were beginning to do so, but it is not enough to recognise a problem—the challenge is to correct it. When the previous Labour Government opened a consultation on funding reform but proposed no preventive action, I and many others present would have accused them of dithering. Now that my own coalition Government, whose education reforms I support strongly and whose pupil premium I have praised, are proposing no action until after the next spending review, I cannot do otherwise with them. To accept the need for fundamental reform but to postpone any move towards it is similar to a dentist recognising the cause of a toothache making a patient’s life unbearable and then offering to deal with it in three years’ time. If such a case came to our surgeries as MPs, we would react with outrage. On behalf of all the teachers, head teachers, parents and—above all—pupils in our schools, we must demand swifter action now.

The question is not about a system that rewards the neediest areas and gives least to the best off. If that were the case, the City of London would hardly be the best funded authority in the country, nor Kensington and Chelsea in the top 10. Since the introduction of the pupil premium, many F40 authorities have received a good chunk of pupil premium funding, despite the factors mentioned by my hon. Friends, showing that there are significant levels of deprivation in many F40 areas. In my own urban constituency, I have wards that are among the most deprived in the entire country. However, the low level of underlying funding, before the allocation of the pupil premium, means that many head teachers in those wards tell me that they need the extra money to break even—to keep their schools afloat—and that they cannot spend the money on what it was intended for, to improve the chances of the most deprived.

[Mark Garnier]

My hon. Friend and neighbour might be interested to hear about my recent discussions with some schools in Wyre Forest. Usually, a school expects to pay somewhere between 80% and 85% of its budget on staffing. Now, because of the very low funding formula, we see typical schools in such lower funded areas spending nearer 90% or even more than 90% of the budget on staffing—an intolerable situation for their head teachers to manage.

[Mr Walker]

Absolutely right. My hon. Friend from Worcestershire points out that the extra money from the pupil premium is sometimes needed to support such costs and it is not necessarily reaching the target at which it is aimed.

We all recognise that it is impossible to correct the problem overnight. Ministers have said that their consultation threw up widespread support for reform but also much concern about turbulence. Interestingly, the teaching unions came out strongly in favour of postponing the issue; in doing so, they might have been representing many of their members, but they were certainly failing to represent the interests of those members in F40 areas whom we meet day in, day out.

The many MPs I have spoken to and the volunteers who make up the F40 executive recognise the need to avoid setting one part of the country against another in a scrap for funding. We also recognise that it is incredibly difficult to change the system radically when spending is under extreme constraint. We can idly wish that the previous Government had been quicker to act and more determined to deliver, but what is done is done; the opportunity to correct the glaring inequalities in the system during the days of ready money has now been lost forever. In the tough conditions of today, however, the need for fairer funding is all the greater. Worcestershire school leaders tell me that they understand the need for constraint and, like other public servants, they are straining every sinew to deliver more with less, but they are harder pressed to do so when there is an open and acknowledged injustice in how they are funded. In Worcestershire, we have schools within a few miles of the boundary with Birmingham that must deliver lessons on a budget hundreds of pounds per pupil lower, that must compete for teachers with a much better funded authority down the road and that are now being asked to accept the same constraints as that neighbouring authority, having missed out on many of the benefits of easier times. It would be neither fair nor reasonable to make no move in the lifetime of this Government to right such wrongs.



I am grateful that, within days of his March announcement, the Secretary of State met the Chairman of F40 and some of its local authority members to hear their concerns. Neither he nor the Minister would have been surprised at the profound disappointment they expressed at the decision to postpone until 2015 the move to a new formula. At that meeting, it was agreed that further representations would be accepted from the group on changes that would not hurt the funding of other authorities, but would mark a first step, however small, towards greater fairness. F40 has since sent in its suggestions, which I strongly support.

We have heard about Martin Luther and Martin Luther King, and I want to introduce Mark Twain to the debate. He wrote:

“The secret of getting ahead is to get started”.

F40 has suggested some options for getting started. It looked at the cost of bringing the lowest-funded authorities up to the level of Lincolnshire, which is the 41st worst-funded authority, and found that that would cost almost £300 million. It considered giving each of the lowest-funded authorities a small flat cash bonus to help, but found that the difference would be too small, and the process would simply rearrange the league table, pushing some authorities outside the F40 down the tables. Under its preferred option, it has proposed making the shift towards Lincolnshire levels of funding, but doing so proportionately, taking each of the lowest 40 one third of the way towards that level. That modest suggestion has the advantage of giving most help to those who need it most, while not altering the fundamental balance of funding.

F40 has suggested that Ministers should seek the £99 million cost directly from the Treasury. I think all hon. Members here would support the Department for Education in applying for that. However, knowing the harsh constraints on public spending that are Labour’s unfortunate legacy, will the Minister consider whether any of it can be found from other sources within the education budget? The sum of £99 million is less than the set- up costs of the new Education Funding Agency, and a very small amount relative to the £1.25 billion earmarked for the pupil premium next year, or the £2.5 billion that it is set to reach by 2015. It could make a major contribution to the work of that vital premium, ensuring it had its intended effect in the areas that it currently has difficulty reaching.

The sum of £99 million is a tiny amount compared with the £36.5 billion paid out under the dedicated schools grant to local authorities and schools around England. If that £99 million were taken equally from all those authorities better funded than Lincolnshire, it would equate to just 0.4% of their DSG funding, and cost no single authority more than £4 million. I hasten to add that that is not what F40 nor I propose, because we prefer no authorities to lose out in the quest for fairer funding, but such a change would be a small step towards a fairer system at a cost that would enable them to stay well within their minimum funding guarantee that no school lose more than 1.5%. At the end of the day, it is up to Ministers to decide the best way of meeting the challenge. We are here today to urge them to do so.

I shall illustrate how the problem has developed. During the first year of the Labour Government, when my predecessor in Worcester used his maiden speech to promise fairer funding as a result of the abolition of assisted places, the gap between Worcestershire and the national average stood at £230 per pupil, and was £380 between us and our neighbours in Birmingham. By the end of that Labour Government, the gap with the national average had risen to £371 per pupil, and with Birmingham it had doubled to £760.

The coalition agreement focused on fairness, but it is disappointing to record that under the coalition Government the unfair gap has widened further. In the current financial year, it stands at £482 per pupil against the national average, and £1,088 against Birmingham, almost three times the gap in 1997. For too long the system has been working against us. For too long we have faced an ever-widening gap. The Government have been brave to recognise the flaws in the system, and right to recognise the need for fundamental reform. However, as Benjamin Franklin said:

“Well done is better than well said."

Today, we are asking for a down payment on reform, a firm signal that the changes that we all agree are needed will be delivered, and a first step towards delivering them. The last Government failed completely to deliver on the issue. The present Government not only can, but must deliver. I urge the Minister to respond positively to the urgent representations from F40 to set much-needed change in motion, and to deliver a real improvement to schools in Worcestershire and across all the areas that have hitherto been left behind. We must not just talk the talk on fairer funding; we must walk the walk. As Shakespeare said: “Action is eloquence”. The Government have displayed great eloquence in dealing with the issue. Now is the time for action.