Budget Resolutions and Economic Situation

Steve Reed Excerpts

Thursday 17th March 2016 Commons Chamber

[Nicky Morgan]

The funding that has been announced will be used even more effectively, because we are not going to tell schools how to spend it, apart from the fact that we want them to be doing more sport and more physical exercise. The belief that runs right through my party’s education policies is that the people who are best placed to make decisions in schools are the heads, the teachers and the governors—those who know the needs of their pupils best.

What is more, that will be paid for by the new levy on producers of excessively sugary drinks. I thank the Labour party for putting on record its support for that policy. I hope that in the longer term the levy will serve as an incentive for the industry to offer products that are lower in sugar and therefore healthier for young people.

[Mr Steve Reed (Croydon North) (Lab)]

rose—

[Nicky Morgan]

The hon. Gentleman is leaping up and down, so I must give way to him.

[Mr Reed]

The Education Secretary says she is not going to tell schools how to spend the sports money. Is she going to tell schools that they must convert to academies, even if parents make it crystal clear that they do not want that to happen?

[Nicky Morgan]

The academies policy was started under the Labour party. We have adopted it and taken it forward, and it is providing a transformative education for young people in this country.

On breakfast clubs, £26 million will go towards developing and running breakfast clubs in up to 1,600 schools over three years, so that children can receive a healthy breakfast and start school ready to learn. The money promised for the longer school day, sport and breakfast clubs underlines this Government’s commitment to happy, healthy students who will be well placed to become the active citizens of tomorrow, contributing more to our economy and relying less on the welfare system.

We want to be absolutely certain that the investment in education promised by the Chancellor yesterday is felt up and down the country. Our new “achieving excellence areas”, supporting, among other regions, the northern powerhouse, will do exactly that. The Budget has given £70 million of new funding for the education powerhouse to add to the Department’s existing commitment to prioritise its programmes in the areas that most need support, and to deliver a comprehensive package to target an initial series of education cold spots where educational performance is chronically poor, including in coastal and rural areas. The investment will help to transform educational outcomes and boost aspiration in areas that have lagged behind for too long.

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[Jim McMahon (Oldham West and Royton) (Lab)]

I refer the House to my declaration of interest as a serving member of Oldham Council. I have found quite a lot of this debate rather patronising. The way in which the Secretary of State for Education addressed Opposition Members and gave us lessons in maths and other issues was quite condescending. I hope that we can raise the tone a little.

When we give people an education, we ought to do it in a way that is easy to digest and to remember when they leave. I tend to think that if I cannot explain something to my seven-year-old son, I am probably over-complicating it. That is the way I am going to pitch my speech to my friends across the House today. It is no more complicated than this: Georgie Porgie spun a lie. He kicked the poor and made them cry. When the rich came out to play, Georgie delivered a tax giveaway. It is really no more complicated than that: he is taking money from the poorest and giving it to the richest. And I can tell you that teachers in schools across the country will repeat that rhyme to the children when they realise the true implications of academisation for the future of their schools.

We accept that we have a complex and diverse education system. Councils must adapt, as must communities and schools. Indeed, many have done so, but if the question is “How do we address the disconnect between democracy, local accountability and leadership?”, how on earth can more fragmentation be the answer? Taking schools away from local control and dismissing the community in the mix makes no sense at all. Looking at my local area, I see Oldham getting a grip. Oldham recognised that it needed a different approach, which is why, with the support of Baroness Estelle Morris, the Oldham Education and Skills Commission was established. That was quickly followed by a political commitment to a self-improving education system owned by every school in the borough, parents, business and the wider community, all of whom had a part to play in ensuring that schools performed to the best of their abilities and that our young people were set up for the best possible future, to which they are of course entitled.

[Mr Steve Reed]

Does my hon. Friend agree that the Government’s decision to centralise the control of 24,000 schools in the Department for Education in Whitehall shows the hollowness of their rhetoric on devolution?

[Jim McMahon]

Most people accept that we have a diverse education system and most of us have reached the conclusion that we should allow for local determination and that councils should not be fighting schools that might want to consider a different model. Equally, councils should ensure that the right considerations have been taken into account and parents should be central to the decision-making process. For the Secretary of State to impose the change on local communities, whether they like it or not and whether they have a good track record or not, makes no sense whatsoever. It beggars belief that the Secretary of State has taken that approach. When the Oldham Education and Skills Commission report was finalised, the three borough MPs wrote to the Secretary of State to seek her support because we wanted the support of central Government and of the regional schools commissioner. Two months on, we have not even had the courtesy of a response. No Conservative MP can convince me that the Secretary of State has one jot of interest in education in Oldham.

Not all councils are the same in the same way that not all schools are the same. It therefore follows that not all academies are the same. We recognise that there is good practice across the board, that some excellent progress has been made, and that schools have been turned around, but what is true for state schools and community schools is true for academies. This polarised debate about having one or the other makes absolutely no sense and does nothing for the people we represent. If anything, it could send us backwards. The evidence suggests that where local partnerships work and where councils step up and take a wider leadership role, good results can be delivered for local communities.

The Chancellor made several references to the change being devolution in action. How can that be when the Government are saying, “You’re getting it whether you like it or not”? But that is a hallmark of this Chancellor. For example, people get a mayor whether they like it or not, and it is the same with schools. There will be no devolution at the grassroots level either. E-ACT, a sponsor with a school in Oldham and a range of academies across the country, decided to sack every single one of its community governors. I was so concerned by that, as were my constituents, that I again wrote to the Secretary of State to ask for her support in stopping it. Her response was that she was actually quite relaxed about it, because it was a decision for the academy, so we now have a school in Oldham with no community representation whatsoever.

Where are the safeguards to ensure that academy sponsors go out to tender for the support services provided to schools? Academies are required to seek such services at cost value if they do not go out to contract, but academies and trading companies will include an overhead, which will contain director and non-executive director salaries, gold-plated pensions, to which public sector workers are not entitled, and company cars. Where are the safeguards to ensure that that cannot happen?

Where are the safeguards to ensure that salaries are published in the same way as in local authorities? Everybody in Oldham knows exactly how much senior officers are paid, because the information is published every year. It is not the same for academies or their sponsors. The chief executive of one academy is paid £370,000 a year for looking after 37 schools. Were that to be replicated in Oldham, with its 100 community schools, the director of education would be paid £1 million a year, which is nonsense. How many people know that that is happening? It happens behind the scenes and is an exercise in smoke and mirrors.

Let us get a level playing field and ensure that academies and their sponsors publish every decision that they make in the same way as councils. Let us ensure that academies cannot give contracts to their parent companies through trading companies and that they are forced to go out to contract like councils. Let us ensure that they publish a pay policy statement and senior salaries just like councils do. Let us ensure that academies publish freedom of information requests in the way that councils do. It is ridiculous that the local education authority, which has been there since 1902, is being unpicked for short-term political gain without any safeguards being put in place. The Government cannot say that they are doing it for democracy, because that does not stack up. They cannot say that it is being done for the communities that we represent. We can no longer say that it is being done in the interests of the taxpayers, because the safeguards are just not in place.

Mark my words: this is heading towards disaster. The structures are not sound enough, the safeguards are not in place, and providers are not mature enough to step up and take on all schools. There are some real questions about who the Tories represent. Is it the pupils? Is it the teaching profession? Is it the wider community interest? Or is it the narrow sponsor interest? It would be an interesting piece of work to find out just how many Conservative party donors are involved in free schools and academies.

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[Stephen Timms]

There is a lot of worry about the proposals, and I hope that the Government will assure us that there will be no real-term cuts in the funding of individual schools. Half a billion pounds could go a long way to achieving that, and it would be helpful if the Minister could give us that assurance.

As we have heard, the Red Book contains a chapter called the “Devolution Revolution”, but the Budget ends local authority influence over education, which always used to be devolved. The hon. Member for Taunton Deane said that it was wonderful that we will have one system for education in the future, but I thought the Government were in favour of devolution, and the Red Book claims that they are. It is a big contradiction to proclaim devolution on the one hand, at the same time as ending local influence over education.

I am particularly sceptical about the benefits of turning every primary school into an academy, because I have seen no evidence that doing that will be a good thing. The Minister and the Secretary of State will know of local educational authorities—other Members have spoken of them in the debate—that do a very good job in supporting the local network of primary schools, enabling schools that are struggling to be supported, for example by a gifted head from another school nearby. I therefore want to put this question to the Minister and ask him to respond on behalf of the Secretary of State: what is the case for simply dismantling and smashing up all the successful arrangements of that kind?

The Church of England referred in its response to

“the particular challenges that many smaller primary schools will face as they seek to develop such partnerships”.

The Sutton Trust was quoted by the Secretary of State and by me in an intervention. It rightly makes the point in its impressive research that good

“academy chains are having a transformational impact on pupils’ life chances”,

which is a very good thing, but it also says that

“others have seriously underperformed and have expanded too rapidly.”

That is why I pressed the Secretary of State specifically on whether the mass process of turning every primary school and every remaining secondary maintained school into an academy will be done by adding those schools on to existing chains, too many of which are underperforming. Only about a third are doing well, according to the Sutton Trust. The chains that are doing badly are doing badly because they have expanded too quickly. The process could make that far worse by forcing hundreds of additional schools into those same underperforming chains. I therefore press the Minister again. I did not get the assurance I was seeking from the Secretary of State that the process would not be done by adding new schools on to underperforming chains. I hope he can give us that reassurance in his response.

Local authority support for families of primary schools is successful. Do the Government envisage those simply being rebadged as multi-academy trusts? Perhaps that is one way out of the problem. Destroying those arrangements is potentially very damaging.

[Mr Steve Reed]

My right hon. Friend makes an interesting observation. What are his thoughts on the initiatives of Labour councils such as Brighton and Hove, which are setting up co-operatives for their schools to join together to try to undermine the Government’s attempts to isolate and atomise schools?

[Stephen Timms]

I very much welcome that. I thought everybody agreed that diversity in school provision was a good idea rather than having the one-size-fits-all model for which the hon. Member for Taunton Deane argued. Surely we should be encouraging exactly the kind of arrangement that my hon. Friend draws attention to, so that we can enjoy the benefits of the diversity that results.

I am glad that, in opening the debate for the Opposition, my hon. Friend the Member for Hayes and Harlington (John McDonnell) focused on the failures that the Budget highlighted yesterday. The OBR pointed out to us that the Chancellor had three fiscal rules in the run-up to yesterday’s Budget. He has broken two of those. He has broken his commitment, which was made less than a year ago, to reduce debt as a proportion of GDP in every year. We had that rather puzzling passage in the Budget speech when the Chancellor talked about numerators and denominators and a paradoxical outcome. It turns that he was saying that he had failed on that rule.

The second rule he failed was on the welfare cap. It is hard to think of any Treasury legislation of the past 20 years that has backfired so spectacularly as the welfare cap. It was legislated for last summer with great fanfare, but within weeks it was announced that it would be broken. The OBR now tells us that it will be broken in every single year of this Parliament. The whole thing has become a complete fiasco.

The third rule that the Chancellor went into the Budget with was the commitment on delivering a surplus. Of course, in the last Parliament, the centrepiece of the Chancellor’s project was to eradicate the deficit by 2015. He failed on that, and it now looks very likely that he will fail to achieve the surplus he has promised by 2019-20. To deliver it would require extraordinary fiscal tightening in what will almost certainly be the year leading up to the next general election. I cannot see that happening. By then, the Chancellor will have failed on all three of his rules.

The Budget raises important questions and I hope we get answers on the specific education points when the Minister winds up.

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[Mr Steve Reed (Croydon North) (Lab)]

I share the many concerns raised about the Budget’s giveaways to the rich at the expense of the poor and disabled. It is despicable and against the British sense of fair play but entirely in line with the behaviour of a Government who are pushing more people into poverty and then blaming and punishing them for it.

Others have spoken movingly about that, but I would like to focus on what the Budget says about the Government’s commitment to devolution. Their actions do not match their rhetoric. The Secretary of State, who introduced the Cities and Local Government Devolution Bill, at the same time introduced the Housing and Planning Bill, which contained more than 30 new centralising measures. The Budget contains more of that same centralising instinct. Yesterday, the Government centralised control of every school in the country. They have learnt nothing from the Trojan horse scandal in Birmingham and are now stripping away local accountability from every school.

There is no way that the Department for Education can provide proper oversight of 24,000 schools from Whitehall, and a lack of oversight means that problems will not be noticed or tackled until they have grown into crises. It is not devolution to hand schools over to giant national academy chains, and it is not localist to do that in the teeth of opposition from parents, teachers and communities. I do not understand how the Secretary of State can come here and lecture the House on the need to listen to parents, when she will not listen to parents over forced academisation.

[Catherine West]

What does my hon. Friend make of Conservative Peter Edgar, the executive member for education at Hampshire County Council and a former teacher, who said that the scheme could result in Britain’s education system “imploding” and urged the Government to think again? He said:

“I am horrified to think that the county council’s role in education is going to be destroyed by George Osborne in his budget. We have worked with the government to deliver the reforms and have been congratulated”—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady has said enough.

[Mr Reed]

It is sad that the councillor has felt forced to say that, but he is absolutely right of course.

There is little evidence of devolution over how local services are funded as a result of the Budget. Yesterday, as the Institute for Fiscal Studies has now confirmed, the Chancellor tightened his fingers around the neck of local government funding. He has handed over limited powers to city regions and others but refused to link those powers to resources. I want to see the Government go much further on devolution—more local control over schools, housing, health and the Work programme—but we need real fiscal devolution as well. If the Government hand over services but then cut the funding centrally, all they are really doing is devolving the blame for cuts made in Downing Street.

Yesterday’s Budget graphically underscored that point. The Chancellor made much of his plans to allow 100% retention of business rates, which of course sounds good, but he will not be clear about which services they will have to pay for. At the same time, he is entirely scrapping the central Government grant, leaving councils far worse off and less able to fund the services that local people rely on. He will not explain, either, what mechanism, if any, will be in place to ensure that business rates retention does not just benefit areas that are already wealthy and penalise those that are not. There needs to be a fair funding mechanism in place that helps areas to expand their capacity for economic growth, otherwise they will be locked into a downward spiral, with no way out.

Of course, we should not be surprised that the Budget did not include anything about fair funding. Under this Government, the 10 poorest councils have suffered cuts 23 times bigger than the 10 richest. Last month, the Government voted to cut Croydon’s funding by another £44 million, but handed a £23 million windfall to far wealthier Surrey next door. Unfairness is the defining feature of this Government.

What these further cuts mean for the vast majority of communities in this country is the closure of libraries, museums, youth services and children’s centres. They will leave streets unswept and street lights turned off at night. They will mean home care taken away from frail older people, and disabled people left to struggle alone. They will mean a cut to early intervention in troubled families, and social workers will not be there to protect children from the impact of domestic violence. Services will not be there any more to protect children at risk of abuse. We are simply storing up problems for the future, while watching young lives get ripped apart.

This Chancellor has got so much wrong. He has had to downgrade growth forecasts that he made only four months ago. He missed his own deadline for paying down the deficit caused by the banking crash. He delayed the recovery by cutting big infrastructure projects early on in his tenure, and he is now struggling to make up for lost time. He has failed to tackle the economy’s desperately low levels of productivity. Now, the IFS has questioned his ability to meet yesterday’s forecasts without more cuts or tax rises to fill a £55 billion financial black hole. The IFS further says that the Budget will reduce wages, lower living standards and lead to further austerity.

Quite simply, this is a Chancellor who cannot be trusted, and who is himself unable to trust. He gets the big decisions wrong, and he is afraid to devolve decisions to others. Instead of reforming public services, this Government are laying them to waste. Instead of sharing the proceeds of growth more fairly, this Government are presiding over growing inequality. Instead of handing decision-making to local communities, this Government are centralising power in their own hands. Instead of shaping a fairer Britain, this Chancellor has thrown a financial bung to his wealthy mates and thrown the rest of the country to the dogs.

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[Bill Esterson (Sefton Central) (Lab)]

I congratulate the hon. Member for Bexhill and Battle (Huw Merriman) on his excellent speech. He and a number of other Conservative Back Benchers gave the Government fair warning that the proposals in the White Paper will not be accepted without a great deal of scrutiny and challenge. He raised some very serious and correct concerns.

I am a parent of two children who are at secondary schools in my constituency, and a community governor of a primary school, which is also in my constituency. I must say that the primary schools in particular work extremely closely not just with other primary schools, but with the local authority. They view the education proposals with growing horror, as they see the flaws in what is being put forward.

Let us examine the Government’s record on education since 2010. One of their first actions was to cut the Building Schools for the Future programme and to make other cuts in capital spending, with a disastrous effect on the then recovery—yes, it was a recovery, which was happening as a result of the actions of the outgoing Labour Government.

When the Exchequer Secretary responds to the debate, I am sure that, as a former member of the Education Committee, he will want to comment on the Government’s education plans. Over the past nearly six years, we have seen cuts in sixth form college funding, with a third of colleges facing an uncertain future, the forced academisation programme with a likely price tag of half a billion pounds and an extra £500 million cost for extending the school day, which is on top of £4 billion of cuts over the next four years. I have been asked: what will happen to special schools and to children with special educational needs?

[Mr Steve Reed]

Does my hon. Friend share my view that it is hypocritical of the Government to claim that they support localism while forcing schools to academise whether they want to or not?

[Bill Esterson]

Absolutely.