West Sussex Schools Funding

Tim Loughton Excerpts

Wednesday 2nd November 2016 Westminster Hall

[Jeremy Quin (Horsham) (Con)]

I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing the debate and on his excellent framing of the argument.

As we look to our newly defined national future, the challenge of improving our national productivity is real and acute. Only through increased productivity will we deliver the public services and increases in the standard of living that every generation expects. Education and skills are among the most important drivers of that vital transformation in our national productivity. We need to continue the already positive improvement in science, technology, engineering and maths, and to my mind our trading future requires better results in foreign languages. Investment in education, properly targeted, is money well spent.

This is an important issue for the whole country, but the challenge is especially important for those of us who represent West Sussex, which is the worst funded of any county authority with funding of £4,198 per pupil. Under the current funding formula, the county receives £44 million less than the national average and some £200 million less than some London boroughs. I and my colleagues were pleased to stand on a manifesto that pledged a change in the funding structure of our schools, and I am delighted that the Government, having secured an overall majority, are pressing forward with far-reaching and long overdue reform. I await with interest the Government’s response to the first consultation.

A wide range of factors was proposed for possible inclusion in the funding formula. I am sure the new formula will be better than the current system, which my right hon. Friend the Secretary of State described as arbitrary, unfair and out of date, but while the Government’s aim of maintaining higher funding for schools with issues of deprivation is laudable, I hope they will recognise the need for all school places to have satisfactory and effective funding. I am sure they will.

There are pockets of deprivation in every town and rural area. Every school has problems to confront, and ensuring proper recognition of the basic costs of providing the teaching staff and delivering the curriculum will be key. That is especially difficult in areas within commuting distance—subject to Southern rail and the National Union of Rail, Maritime and Transport Workers—of London. The cost of living in my constituency is very high, which makes it harder to recruit and retain the excellent teaching staff that children and parents rightly expect. That is especially true and worrisome in an area in which school infrastructure rarely seems to keep pace with population growth, adding to the strain placed on headteachers and staff. There is a worrying impact on class size, as at Tanbridge House school or Forest school in my constituency—at Forest secondary school, top set classes in core subjects already have 35 or 36 pupils. That obviously has a direct impact on teachers, but it also has practical consequences in classrooms designed for 30 pupils with a number of PCs to match. Schools that provide targeted support for struggling pupils used to do it in sets of 12 or 15, but now find that those sets have grown to 20, which means less effective lessons in which it is harder to focus.

Fair funding—redressing the balance—is critical. I look forward to the second consultation and what I trust will be an appropriate recognition of the high basic cost of education of every child. We are very proud of the good results generated by the schools in my constituency, but no one, least of all the Minister, would take that as a source of complacency. Excellent teaching, committed leadership and supportive parents all still need a solid underpinning of funding. In the immediate term, that foundation of solid funding is a source of real concern for headteachers across the county.

Costs have undoubtedly risen in the current year. I have had input from a large number of schools in my constituency; it would be invidious were I to go through every single one of them, but I will focus on one in particular. The Weald school in Billingshurst is an outstanding school. The current head has been in place for eight years. He started with 95 teachers and a senior leadership team of nine, including two deputy heads, and 1,440 pupils. He has managed to maintain 95 teachers, although the senior leadership team has been cut by a quarter, with now only one deputy; but the number of pupils has increased to 1,650—a 14% increase—and there has been a real-terms decrease in the per pupil funding of the school.

As my right hon. Friend the Member for Mid Sussex said when proposing the motion, this has been a problem for 30 years. With extra costs in recent years, reserves have been eaten into and in many cases eliminated. As did other schools in my area, The Weald predicated its financing on fair funding being introduced from 2017-18. It and other schools have had to contend with particular issues that will arise in the current year. From April 2016 there was a 1% increase in teachers’ pay, which meant a 1.23% increase for schools once national insurance is included. That equates to a £75,000 incremental cost to The Weald. For the past 30 years, schools have contributed 14.1% to teacher’s pensions. From September 2015 that went up to 16.4%—for good reasons, but it has an ongoing annual impact of £170,000 on The Weald’s budget. From April 2016, employer’s national insurance contributions were increased, which is an important and valuable change for the Treasury but will cost the school an estimated £120,000.

Looking forward, the impact of changes to the education support grant are expected to add an extra £45,000 of costs, while the apprenticeship levy will add an extra £30,000—and that is before any future increases in teachers’ salaries. The sum of those figures amounts to an estimated deficit of £425,000 in the next financial year for The Weald school. That is why there is so much demand in the immediate term for transitional funding to help schools to get over the hump until fair funding is introduced.

To appreciate the gearing effect, my right hon. Friend referred to £20 million raising the West Sussex average per pupil funding from where it is now, at the bottom, to being halfway towards the average. That £20 million would equate to £250,000 flowing through to The Weald school. As the Minister will see, no one would say that is easy living or easy budgeting in the context of a forecast deficit getting on for half a million pounds, but £250,000 would make a real impact on managing the short-term costs until the introduction of the fair funding formula.

As my right hon. Friend said, in trying to work out what to do, headteachers have been setting out alternative options that they could pursue. The one that has generated the most attention has been the threat to modify school opening hours, which I do not believe is appropriate in any circumstances. None of the other options being considered has happy consequences either; they include larger class sizes where practical, curriculum shrinkage and further staff reductions. It would be particularly galling if reducing the syllabus or not replacing staff occurred on a temporary basis, only to be reversed as and when—we hope—satisfactory results come through from the fair funding of the schools.

I congratulate the Department for Education on pursuing fairer funding, which I trust will put appropriate weight on basic per pupil costs. I recognise the fiscal constraints under which the Department is operating, but I hope the particular funding pressures on schools are recognised. When announcing the decision to delay the implementation of fair funding, the Secretary of State for Education said she would take a sensible approach to transitional arrangements for 2017-18. She made similar statements to the Education Select Committee, to which my right hon. Friend the Member for Mid Sussex referred. I look forward to the Minister’s response, and I also look forward to seeing the Secretary of State this afternoon. This is an issue that I very much hope we can address.

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

rose—

[Mr James Gray (in the Chair)]

I call the right hon. Member for Arundel and South Downs (Nick Herbert), even though he was not standing up.

--- Later in debate ---

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

It is very gracious of you to call me to speak, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing this important debate. I echo his tribute to my hon. Friend the Member for Horsham (Jeremy Quin), who has led the very united charge by all West Sussex MPs. Of course, two of our number are slightly compromised in their support, one being the Minister for Schools and the other, my hon. Friend the Member for Crawley (Henry Smith), being a Parliamentary Private Secretary in the Department for Education. I am sure that their supportive sentiments are with us in spirit.

Those West Sussex Members are united with the county council, with every headteacher in every school in every constituency in West Sussex, and with the many thousands of parents who have written to us, signed petitions, joined us in presenting a petition to Downing Street just a couple of weeks ago and supported the “Worth Less?” campaign, which flags up the significant differences in the way pupils are funded and therefore treated and viewed in West Sussex, compared with so many other parts of the country. We are also united with all the local media, which is supportive.

This is a huge issue for all our constituents across the county. It comes on top of other huge issues such as the abject failure of our local rail service to deliver our constituents to their places of work and education remotely on time or reliably. The other huge issue is the work on the A27 in our constituencies. So this is a busy time for us, the issue is taking up a lot of time and resources and we need something to be done about it.

My hon. Friend the Member for Horsham rightly praised the Government’s efforts to reform education over the past six years, dragging this country’s educational standards into the 21st century, but as it stands the way we fund our schools in West Sussex remains resolutely in the 20th century.

We all welcomed the Government’s manifesto commitment, and their honouring in principle that commitment, to review the funding formula to ensure that we have a fairer funding formula to benefit counties such as West Sussex. Therefore, the Government’s announcement last year was widely welcomed in our constituencies, where things have been very tight for some time, but, frankly, time is running out to come to the rescue. The news earlier this year that the review is being delayed by another year is a potentially fatal body blow. We do not know what fairer funding will look like, how fair it will be in cash terms to counties such as West Sussex, or how long it will take to phase it in. It is unlikely to happen overnight. It is not an easy exercise and there will be winners and losers in other parts of the country. Therefore, there is still a lot of uncertainty.

The then Chief Secretary to the Treasury said in a letter to my hon. Friend the Member for Horsham that the

“Government wants to see every child achieve to the best of his or her ability regardless of their background or where they live.”

That is something of a grammatical car crash, but it is a sentiment with which we wholeheartedly agree. He went on:

“At the March Budget, the Chancellor announced that the Government will accelerate the move to the”

national funding formula.

“Subject to consultation, the aim is for 90% of the schools who will gain funding to receive the full amount they are due by 2020.”

We do not know what the full amount they are due equates to and we are now talking about 2020 at the earliest before that transition works its way in. That is almost another four years of pain, tightening budgets and difficult choices, to which my hon. Friends have alluded.

We have heard the figures and I will not go through them again, but it cannot be right that there is such a substantial anomaly between child funding of £4,196 per annum in West Sussex and, the most extreme example, child funding in Tower Hamlets of £7,014 per annum. In our neighbouring county of East Sussex, funding is substantially more, at £4,450 a year. The difference just to bring us up to the average funding is £41 million a year.

The Chief Secretary mentioned in his letter an additional £500 million of core funding to schools over the course of the spending review. That is welcome, but £41 million just to get us to the average represents 8% of that £500 million, which is being spread among the whole country. For us, that £41 million would represent 1,518 additional teachers in our schools, which are losing places, having to make redundancies and are not filling vacancies. The result is that subjects are being dropped and class sizes are becoming larger. That is the realistic outcome of the present situation and it can only get worse until it is resolved.

Hon. Members have lobbied hard. We have met Secretaries of State and Ministers, and we have further meetings later today. We have met many teachers and have been lobbied by many teachers and many parents. I will read out some letters from schools. One school in Worthing wrote to parents: “School leaders have made every conceivable cut to our provision and now we are faced with reducing basic services still further, all to the disadvantage of your child. Our finances are so bad that we are all having to consider the following types of action: modifying school opening hours, increasing teacher-to-pupil ratios again, reducing basic services such as cleaning and site and premises work, stopping any investment in books and IT equipment, designing curriculum offers that fulfil only basic requirements, not replacing staff who leave. As you can imagine, such radical considerations are the very last thing that any school wishes to do but we are being given no option. We do not understand why children in our school are worth less than others around the country. Even when a national funding formula is introduced, it will take at least three years to have a really significant effect on our budgets. We cannot wait that long.” That is a common cry across all our schools.

An excellent school in Worthing, Thomas A Becket junior school, is the largest primary school in Worthing; indeed it is one of the largest primary schools in south-east England. The head has written to me saying that its

“funding has been severely reduced by the reorganisation due to the Worthing Age of Transfer process.”

That happened recently and was very successful. The head continued:

“However, the main point I would like to draw to your attention is that if Thomas A Becket Junior was located in a London borough the school would receive, on average, an additional £1.8 million in its annual budget, enough to employ an additional 65 teachers. I have no doubt that with this extra budget share my school could improve at the rate of London schools over the past few years…The facts are well known to you; schools are facing an 8% decrease in real terms funding due to unfunded NI and pension contributions over which we have no control.”

Academies are also suffering. Shoreham academy in my constituency is rated outstanding. The head wrote to me:

“The huge difference in funding levels across the country mean that West Sussex schools are now at breaking point as a consequence and students are being treated unfairly and unjustly in terms of educational funding.”

This is not just vague bleating. Outstanding headteachers are really concerned and worried about the future prospects for their schools and their children. We share those concerns. These schools have dipped into their reserves in recent years because they have faced years of accumulated deficit because of the way the funding formula is fashioned, and in many of our schools there is nothing left in the tank.

As I said, we have the support of the county council. Louise Goldsmith, leader of West Sussex County Council, wrote to the former Chancellor, saying that the teaching

“profession has undoubtedly become less attractive in recent years and whilst we realise that there are a lot of new initiatives being promoted by the government to attract new teachers, and we welcome these, in the short term we need to be able to attract high calibre staff to West Sussex now. Unfortunately, due to the current low level of funding, the schools are having difficulty doing this, especially as they are unable to offer any enhanced salaries.

The government has stated that school funding is being protected in 2016/17. Whilst we obviously welcome that fact, in real terms the funding is in effect being eroded by unfunded cost pressures, such as the increase in employer’s pensions contributions and national insurance contributions, pay awards, the national living wage, as well as any ‘in-year’ growth in pupil numbers.”

The county council has had to top up a lot of money from its reserves and other areas, in a county where we are under severe pressure because of the high elderly population and the huge impact on the social care budget competing for increasingly scarce resources. In addition, as we have heard, West Sussex County Council has always generously recognised and endeavoured to fund the high special educational needs we have across the county. We have had shortfalls in the capital costs of new schools. We have an increasing population. There is the knock-on effect of Brighton: people moving out of Brighton into West Sussex because of cheaper property is raising costs in our county. There has been the cost of the recent age of transfer exercise that I mentioned, and there is the cost of living in West Sussex. It is one of the most expensive places to live in the whole country, yet our funding formula does not acknowledge that we have different cost pressures from other parts of the country.

We have support from the local media. All the local media have written editorials on the issue. For example, the Worthing Herald has written:

“The low funding, together with rising National Insurance and pension costs and the government’s decision to cut £600 million from education grants, has left schools at breaking point.

This is no exaggeration—our headteachers, who have been called upon to absorb further cuts while already struggling to make ends meet, fear schools may have to consider not opening five days a week if the funding crisis is not addressed by the government.”

It exhorts its readers to write to MPs and others. I exhort readers to write to the Secretary of State for Education and particularly to make submissions to the formal consultation on a fair funding formula that is being undertaken at the moment. We need examples of the real hardship that is happening here and now and can only get worse until this issue is resolved. We need those on the Secretary of State’s desk.

There have been disappointing explanations of the situation from Ministers. A previous Education Minister, who is now the Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey (Mr Gyimah), wrote back to the then cabinet member in West Sussex in slightly less than satisfactory terms. He wrote that the councillor

“mentions that schools in West Sussex are experiencing cost pressures as a result of increased pension and National Insurance contributions. It may be helpful if I explain the rationale behind our changes. We are asking schools, like other employers across the public sector, to contribute more towards their employees’ pensions to ensure that the costs of public sector pension schemes do not fall unfairly on taxpayers.”

Well, they are falling unfairly on taxpayers. Taxpayers in West Sussex are having to forgo other things from the county council because it is having to make up that money. The pension impact is considerable. Pension rates have gone up from 14.4% to 16.8%. That is an extra 2.4 percentage points added to the bill, and no extra money has been given to our schools to cover it. That is on top of the pay rise, which is only 1% but still adds £500 to the salary bill for the average teacher, and the increase in national insurance costs of some 2.3%, again for the average teacher.

The former Education Minister, in his helpful advice as to how we can do things to get round the funding shortfalls, goes on to talk about headteacher recruitment. He says that

“whilst the national headteacher vacancy rate remains fairly low at 0.2%, I do recognise that some schools are facing headteacher recruitment challenges. This was one of the reasons why we reformed leadership pay so that schools could pay more to attract the best headteachers. The government funds a number of targeted programmes that aim to address leadership supply, particularly within challenging schools. For example, Future Leaders aims to develop the skills of high-potential aspiring headteachers who want to work in some of the most challenging schools in the country. The Teaching Leaders programme develops middle leaders in primary and secondary schools in challenging contexts, putting them through a rigorous two-year training programme. A number of these middle leaders will go on to be the headteachers of tomorrow.”

We do not need the new, targeted teachers and headteachers of tomorrow; we need the basic subject teachers of today, and we are losing them. There are massive gaps in terms of teachers offering foreign languages, for example, across many of our schools. Those subjects are disappearing from the curriculum. The curriculum choice being offered to our pupils is shrinking simply because we do not have the teachers because we do not have the funding to attract them to one of the most expensive counties in the country.

There is no fat left. There is no money left in the reserves. There is virtually no leeway left for our headteachers somehow to juggle these finances. There is an urgent and critical need for the formula change, but also an urgent and critical need to recognise that we have a funding shortfall now and we have to have some help in the form of transitional funding to address that urgent situation now.

As I said, there is a shortfall of £41 million a year. The additional money that we have had in the past amounts to £930,000—a fraction of the reality of our funding shortfall. Yet again, West Sussex loses out. We lose out on central Government spend for the infrastructure in the county, yet our county is a large payer of taxes to central revenue. It is just not fair that our schoolchildren should lose out now and their whole future be compromised because we have an unfair funding formula that will still take several years to resolve and in the meantime is inflicting potentially huge damage on the life chances of our young people.

I hope that the Government will look again at the possibility of funding the shortfall with a transitional relief package. It is very hard for us as constituency MPs to support the Government’s programme on things such as grammar schools, with which in principle I certainly have a deal of sympathy but which will divert funds when we need those funds now in order to plug gaps in all the schools, of whatever type, across our county. We need the Minister and the Secretary of State to look more sympathetically on a dire situation that will only get worse over the next few years.