Education Funding in London

Rushanara Ali Excerpts

Wednesday 4th May 2016 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I thank the hon. Member for Bromley and Chislehurst (Robert Neill) for securing this debate on such an important issue, and I pay tribute to him for his work with the all-party group on London.

As the hon. Gentleman said, there are concerns that changes to the national funding formula will have a massive negative impact on London schools and their pupils. Despite the Government’s hollow promises of ring-fenced education funding, the Institute for Fiscal Studies reports that London schools already face an 8% real-terms reduction in funding over the next five years. Now it looks likely that they will face a further cut of £260 million a year due to the changes to the national funding formula. The Minister has said in the past that that is not the case, and I hope he will take the opportunity to clarify today whether he accepts that figure. Perhaps he can confirm to Members that London schools will not face that cut.

[Ms Karen Buck (Westminster North) (Lab)]

Does not the funding formula also drives perverse outcomes as between schools within the same local authority? Westminster Council has advised me that 20 schools will lose up to 14% of their grant because of how the funding formula works. Perversely, some of the schools with the highest levels of deprivation will lose the most and some of the schools with the least deprivation will be gainers. The problem with how the funding formula works is not just between local authorities but between schools.

[Rushanara Ali]

I thank my hon. Friend, and I hope the Minister listened carefully to her powerful insights about what will happen both within and across local authorities. It will be schoolchildren who suffer, and the improvements in performance in London schools will be put at risk. That improvement is the envy of the world, with many studies showing how London has progressed. It has taken a generation to achieve that, and I hope the Minister will recognise the concerns being expressed today and the dangers of the changes, which risk having a negative effect on the performance of London schools.

I want to highlight some of the challenges that exist and the backdrop against which London has transformed its schools. As I said, that has taken a generation, and the danger is that the change will set us back in a very short time. London faces some of the highest child poverty levels in the country, and, as the hon. Member for Bromley and Chislehurst pointed out, the highest inequality. The extremely high cost of living, and especially of housing, has a detrimental effect on teachers’ ability to find accommodation.

Despite those challenges, local education authorities across parties—Labour councils as well as Conservative councils—have worked tirelessly to improve education in London. As a result, nine out of 10 schools are good or outstanding. I hope the Minister will think carefully about the impact of the reforms on that progress. If we are not careful, we will set schools in London back.

Other regions see London as an exemplar. People point to the London Challenge, which the last Labour Government introduced, and which was supported by people across parties and recognised for its achievements. Other regions have tried to emulate it. It is really important that we build on the successes of our regions rather than pit them against one other, which I fear will happen as a result of the changes. It is wrong to put educationists in competition with each other for the wrong reasons. We should be looking at how to improve the achievement of all our children, across the country.

[Graham Stuart]

It is worth saying that it is important to have a fair system across the country. Certain parts of London—and it is only parts—have disproportionately benefited. A Lambeth school can have more than £1,500 a head more—for a class of 30, that is £45,000 more—than a school half a mile away in Croydon. We have a broken system, and we need to fix it.

[Rushanara Ali]

We have very good results in London. Nine out of 10 schools across London are good or outstanding. We should build on that, not pit schools against one other. The hon. Gentleman served on the Education Committee so should know better than to make that argument.

[Dame Margaret Hodge]

I was not going to intervene again, but I have to on the back of that. In its manifesto, the Conservative party said:

“Under a future Conservative Government, the amount of money following your child into school will be protected.”

Does my hon. Friend agree that changing the formula to take money away from some children is not the right way to meet a manifesto commitment?

[Rushanara Ali]

I completely agree with my right hon. Friend. It would be yet another broken promise. I hope that the Minister will listen carefully today and make sure that that promise is not broken.

[Stephen Timms (East Ham) (Lab)]

Has my hon. Friend seen the estimate which states that if the F40 proposals were implemented as tabled by the hon. Member for Beverley and Holderness (Graham Stuart) and others, the most prosperous 30 authorities in the country would gain more than £200 million and the least prosperous would lose more than £200 million?

[Rushanara Ali]

My right hon. Friend makes a very important point. That is exactly what schoolteachers are concerned about. That cannot happen. It goes to show that there is not a good motive behind this change. The Government should be ashamed of themselves, and the Minister should take action.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

My hon. Friend makes a very powerful point about the collective endeavour to improve standards of education for children in London. Does she share my concern that in Southwark that will be undermined if Southwark schools lose, as they risk doing, between 8% and 20% between now and 2019-20? Does she agree with the point made by our right hon. Friend the Member for Barking (Dame Margaret Hodge) that that is not protecting funding?

[Rushanara Ali]

I completely agree with my right hon. and learned Friend. I find it shocking that Ministers can make the argument that they are protecting budgets when these changes mean quite the opposite and will devastate schools in London. I appeal to the Government to look at how to build on the achievements in cities such as London, rather than setting them against other regions. That is deeply unhelpful to our educationists, who work tirelessly to make sure that schools do well.

I will set out the specific example of my constituency, to highlight to the Minister just how the investment in schools in London has transformed education. Under the last Labour Government, schools in Tower Hamlets rose from the bottom of the national league tables, where they were in the 1990s, to being some of the country’s best. That happened against a backdrop of two out of three young people being eligible for free school meals, more than 75% of pupils having English as a second language, and some of the highest levels of child poverty in the country. Tower Hamlets is now in the top third of the national league tables, in a city that, as I mentioned earlier, has the highest percentage of schools that are good or outstanding.

We cannot afford to be complacent, however. Despite the achievements in London, including in boroughs such as mine, 40% of London’s pupils leave school without good GCSEs. Any funding reduction could put further improvements at risk. We need to build on our achievements and make sure that that 40% can leave the education system with good results. That is what the Government should focus on, rather than on potentially decimating success through cutting funding in London.

As has been pointed out, funding is connected with recruitment, and London faces increasing recruitment challenges because of the cost of living crisis. When an average of 73% of the schools budget is allocated to staff costs, these changes could mean more than 6,000 fewer teachers in London’s schools.

[James Berry]

Does the hon. Lady accept that the increase in house prices in outer London as well as inner London means that the difficulty in recruiting teachers affects the whole of London? The distinction between inner and outer London is no longer a good one, given the increase in house prices across the city as a whole.

[Rushanara Ali]

The hon. Gentleman will recognise that in boroughs such as mine and in Newham and Hackney, the unprecedented rise in house prices has been much greater than in outer London. I accept his point that house prices are a major issue, but the Government should be considering how to address that across London and the country, rather than dividing communities and areas. That is our point. We must build on our achievements and not close our ears to each other, because that does not serve our constituents or young people well.

Let me turn to population growth in London. When the population is growing by 100,000 a year in London, we cannot afford to have fewer teachers. If we are already looking at 6,000 fewer teachers with these cuts, imagine what will happen in the future. We need to plan ahead for the needs of cities such as London. If we want London to remain a world-class city with some of the best educated young people in the country, and help other areas to improve and replicate what we are achieving, we must ensure that we do not throw away that success.

[Lucy Frazer]

Will the hon. Lady give way?

[Rushanara Ali]

I will continue my remarks because other Members wish to speak and I have given way a number of times. Perhaps the hon. and learned Lady will also have the chance to speak.

As has been mentioned, the increased cost of living in London has meant that teachers find it increasingly difficult to survive on their current salaries, and they require the London weighting equivalent to enable them to live and work in London. Already in boroughs such as mine and elsewhere, local authorities are struggling to maintain teacher numbers, and with these cuts they will have to lay teachers off, which is not what local schools need.

In boroughs such as Tower Hamlets, Hackney and elsewhere, we have seen such as collaboration, partnership and the effective use of resources by teachers and local education authorities have helped to create a success story that has transformed our schools. We must build on that model. It is not about the academisation of schools in my borough—we did not have academies; it is the collaborative model and partnership, along with well-targeted resources into schools, investment in training, and support to teachers, that transforms schools in my constituency and elsewhere. That is well recognised around the country. Recent reports by the Brooking Institution and the Institute of Education highlight what it took to transform education, and spending resources effectively was critical to that.

My plea to the Minister is that he take back these plans, consider the formula again, and ensure that funding is targeted on those who need it. In London, given the inequality and deprivation, it is vital that we maintain that support. The Government should be looking at levelling up support to schools across the country, not taking resources away and punishing schools for doing well. It has taken a generation to transform schools such as those in my borough and across London, but it will take a matter of years—perhaps even less—if this funding formula is introduced and resources are taken away from schools, to decimate our education system. Surely the Minister will appreciate that it is far better to learn from one other and to build on our achievements rather than damage them.