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Education Funding (Leicestershire)

Volume 400: debated on Tuesday 4 March 2003

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4 pm

This is an extremely timely debate, given the beginning of the financial year and the education funding settlement that will kick in within some three and a half weeks for Leicestershire and elsewhere. I welcome in particular my hon. and learned Friend the Member for Harborough (Mr. Garnier) and my hon. Friend the Member for Bosworth (Mr. Tredinnick), because they, too, can testify to the enormous groundswell of opinion against the Government's funding for Leicestershire.

"Education, education, education"; that was the old mantra. On 13 February, the Minister for School Standards, who is here today, said:
"I remind the House that the Government have put their money where their mouth is with the most sustained increases in funding for a century…There will be £1,000 extra for the average school pupil by 2005-06".—[Official Report, 13 February 2003; Vol. 399, c. 1074-5.]
I do not know who the average school pupil is, but he or she is not in Leicestershire.

The voters—parents, teachers and governors —believed the Government's mantras. Naive as I may be, I, too, at least believed up to a point that more money was going into education. After all, we have paid an enormous amount of tax, so we would at least expect that education funding would increase and that our children in Leicestershire would receive a better education. However, the Government obviously believe that if they say something often enough, people will believe it.

A report on the BBC website on 28 February stated:
"A spokesman for the Department for Education and Skills said local education authorities had been guaranteed a minimum increase of 3.2 per cent. per pupil."
I have also heard it said that no schools will be worse off. However, that is not true in Leicestershire. People may have believed what was said, but in fact they are worse off. They are getting less than 3.2 per cent. per pupil and they are very cross.

Leicestershire has the lowest funding settlement in the country. It is not 3.2 per cent., as we were promised, but 2.5 per cent. I have gone into this in some detail, because the Minister should know about it. This has to do with the way in which the base was calculated. It was calculated on the extra money for post-16 education, which the area is not getting in the coming financial year. That will end up, throughout the county, in a 1 per cent. cut in real terms to education funding in schools.

The background is worth considering briefly. Leicestershire used to be the second worst funded education authority for primary education and the fourth worst funded for secondary education. The saga of the standard spending assessment and the F40 group, of which I and, I think, my hon. Friends were members, is also worth remembering. I went to various meetings with Ministers, mostly before the present Minister got into the House. We finally heard that the SSA for education was to be changed, and a good job, too. We were to have instead the education formula spending share; the FSS. Leicestershire has 80,000 pupils, and the number in education is growing, because it is a vibrant and prosperous area. It also gets good results. I believe that we are right at the top for key stage 3.

There has been a long campaign in Leicestershire in this respect, both before the SSA was scrapped and since the formula started to be introduced. I have had innumerable letters from parents, governors and teachers throughout the county. In January, there was a meeting, which I did not attend, with the Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty). The meeting was attended by two head teachers, including the head teacher of Lutterworth grammar school in my constituency, the leader of the county council, Mr. Harry Barber, and, I think, Mr. Ivan Ould, who is responsible for education at the county council. I am told that they had a "courteous hearing". The concern is not new. There has been a long campaign and still, after some 10 years, one gets a courteous hearing.

I have been raising this subject since 1992, when there was a Conservative Government. The situation was bad enough then, but it has got markedly worse since 1997.

I congratulate my hon. Friend on pressing for this debate. Is he aware that, since 1997, when Labour came to power, schools in Leicestershire have lost 9 per cent. of their funding? Does he not think that that is disgraceful?

Indeed. I am grateful to my hon. Friend for making that point. The average funding per pupil throughout the county has fallen by 9 per cent. against the average.

Since the announcement of the recent settlement, I have received letters from all over my constituency. I shall not list all the schools and places from which people have come—that is a Liberal Democrat trick—but I shall refer to some of them later. I want to give the Minister and the Chamber a flavour of the settlement. The figures for the education FSS are derived by taking a basic amount per pupil with top-ups for deprivation, area costs and sparsity. That seems relatively sensible, but in Leicestershire, the increase is the lowest in the country. The proposed settlement gives an increase in total education FSS of 6.6 per cent. compared with the national average of 6.5 per cent. That sounds jolly good, but that is because we had a large increase in pupil numbers, mainly three-year-olds. In terms of the FSS per pupil, we have the minimum increase. The floor is supposed to be 3.2 per cent., but it becomes 2.5 per cent. in Leicestershire. The Education Authority is passporting the whole of the 2.5 per cent. increase. That does not meet spending pressures or represent real-terms protection as promised.

The response to the F40 parent and teacher campaign has been ignored. The disparity between the best and worst standard authorities is widening, not narrowing, and we believe, as does the education authority, that the basic entitlement per pupil should be higher to maintain and improve attainment across the board.

In Leicestershire, we educate 4,100 city children who—day in, day out—cross the border into Leicestershire because they receive a better education there but do not bring the money with them. If they did, there would be an extra £500-plus per pupil as they cross the border. The figure for Leicestershire is £2,932 per pupil; the figure for Leicester city, which is just across the Braunstone lane from my constituency, is £3,476 per pupil, a difference of £543. If every pupil in Leicestershire were funded as pupils in the city are funded, there would be almost £52 million extra for education in Leicestershire.

What possible justification can there be for that? I understand that area cost adjustments take account of the cost of housing. The cost of housing is certainly not lower in Leicestershire than across the border in Northamptonshire or Warwickshire. The cost of employing a teacher is exactly the same, the cost of buying a computer is exactly the same and the cost of maintaining a school is exactly the same, so how does the disparity arise?

I want to turn to Winstanley high school where I am going to a meeting on Friday that has been called by the governors. The governors from 30-odd schools in Blaby district have been asked to attend, which is a daunting prospect for me. In Winstanley high school, 20 per cent. of the pupils come from the city and the head teacher told me—I want to be fair to the Government where fairness is due—that they have received targeting funding and capital funding. That is great, but they do not receive core funding; the proper budget. What does that mean for schools such as Winstanley high school?

In every school, teacher pay is rising by 2.9 per cent. under a national agreement. The Minister and I both welcome that, because teachers are not overpaid, even with the 2.9 per cent. increase. Pensions are rising and I also welcome that. However, national insurance is rising from 1 April, as every school knows because schools, as well as teachers, must pay the increase. That tax, with superannuation and increased pay, means that there will be on-costs related to pay. Swinford primary school, which is in the south of my constituency, calculated that after the increase in pay, the on-costs, which used to be 14 per cent. of teachers' pay, will rise to 23 per cent. That is a hell of a lot of money for a small primary school to find, and it is concerned that it may have reduce the number of classes from four to three. However, there cannot be more than 30 pupils in a class, as that would be against the law.

At the same time, there are plans for out-of-class assistance so that teachers can spend more time out of class. Again, that is laudable. It should allow teachers to spend more time on preparation, but where is the money coming from? I am afraid that schools in Leicestershire will not be able to employ the much-heralded support staff. From Braunstone town, Swinford, Lutterworth Sherrier primary school, Brockington high school and Countesthorpe Greenfield primary school, governors and parents are writing to me, and there is real bewilderment. I assure the Minister that many of them will have voted Labour, but they are upset and are becoming angry.

This is the worst settlement for the whole country. It is bad enough this year with school funding on the floor; they would have received even less if there had not been a floor. What will happen next year? That is cause for concern. Are there any grounds for hope?

During the summer there was the fiasco over the Criminal Records Bureau. Leicestershire county council asked at the beginning of the autumn term for £25,000 to meet costs. It has yet to receive a response from the Minister's Department. As my hon. Friend the Member for Bosworth (Mr. Tredinnick) said, since May 1997—I say this just in case the Conservatives are accused, as we usually are, of doing everything wrong—Leicestershire schools have become 9 per cent. worse off than the national average for funding. The Minister looks dismissive of that figure; perhaps he can tell me how it is wrong.

We want the Government to listen, and I am glad to see the Minister here. We want them to listen to the reality of Leicestershire schools, which need money this coming financial year. They say that the situation has become impossible. We need assurances that things will not get worse next year and in future. I assure the Minister that Leicestershire MPs are angry, be they Labour or Conservative. Parents, teachers and governors are angry. I was told about one governor this morning who thought that there would be no more problems or financial wranglings. He had had enough of trying to balance the budget and he knew that lots of money was coming, so all would be well. When he heard about the funding settlement, he said that it was the one thing that made him want walk away from the job, a job that he does, as do all governors, voluntarily.

Finally, I shall quote from a letter from the headmaster of South Wigston high school. The school is in the constituency of my hon. and learned Friend the Member for Harborough, but is on the border and acts as a polling station for my constituency. The school takes a large number of children from Glen Parva and Blaby. This man, who is an excellent headmaster—I have met him several times—says in a letter to the Secretary of State for Education and Skills:
"My school is oversubscribed, taking 30% of our pupils from out of catchment…The school roll…hows us as being one of the most deprived Leicestershire schools… am not looking forward to planning a 2003–04 budget. Classes are already full to bursting, so cutting staffing is out of the question. The most likely situation will be to stop all of the proactive developmental work we do here in teaching and learning linked to social inclusion and use such funds to prop up the budget.
This is no way to run a school. As a Headteacher I need to know that I can plan into the future, and not have the rug pulled from beneath my feet. I had thought that this government had really grasped the need to invest in our children's future and provide schools with the finance to develop properly. It seems completely unfair, both as a parent and a Headteacher, to look only a few miles up the road and see schools where"
pupils are doing a great deal better from the settlement.

4.14 pm

I begin by congratulating my hon. Friend the Member for Blaby (Mr. Robathan) on securing the debate. I thank him and the Minister for allowing me to make a brief contribution to this Adjournment debate. I am glad to see the Minister for School Standards here because I believe him to be a bright and intelligent man who is capable of dealing with complicated ideas. However, he is as much a prisoner of the Treasury as he is a free spirit in his Department. I forgive him, up to a point, with regard to the difficulties that he faces in dealing with a debate such as this. Every Member of Parliament has no doubt been knocking on his door and on that of the Office of the Deputy Prime Minister, asking for his share of the pork barrel for his constituency. That is a given in debates such as this.

When the Minister for Local Government and the Regions, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), announced the figures for our respective local education authorities in a statement some two or three weeks ago, I was shocked to find that Leicestershire LEA was at the bottom of the pile. I thought that there must have been something wrong with the printing of the tables when I found Leicestershire so far down the list.

My hon. Friend the Member for Blaby cited the example of Mr. Gary Toward, the headmaster of South Wigston high school, which is on the boundary of my constituency and his. The point that my hon. Friend made is exemplified by the fact that that school has to accept a proportion of its pupils from the city of Leicester. Because the city of Leicester is a unitary authority, it has its own education spending budget from central Government. The problems facing South Wigston high school are the same as those facing schools in the borough of Oadby and Wigston in my constituency, right next door to the city of Leicester, and schools in the rural part of my constituency, which stretches right down to the boundary of Northamptonshire. Central Government require them to do more and more and to follow more and more instructions but they are given less and less money to do that with. If the Minister is going to ignore the F40 campaign—of which my hon. Friend, several Labour Members and I were active members—and the pork-barrel pleas from Members of Parliament, I urge him to come and see for himself the effect of his Government's policies on the schools in our constituencies.

Like my hon. Friend the Member for Blaby, I have had letters from primary school heads, high school heads, senior school heads, governors, teachers and parents. They are, in effect, holding up their hands in shock and concern at the way in which their schools have to go on. It is now impossible for a chairman of governors or a head to plan ahead for the future development of a school because of the financial regime that has got hold of the system in our constituencies. We need more and better-funded schools in Leicestershire. We must be able to assure our constituents that our schools can plan a bright future for our bright children. I look to the Minister not to wave a magic wand, but to show that he has some kind of intellectual understanding of the terrible problems that his Government have dumped on Leicestershire's people.

4.17 pm

I am pleased to have the chance to discuss these important issues with the hon. Member for Blaby (Mr. Robathan) and the hon. and learned Member for Harborough (Mr. Garnier). I congratulate the hon. Member for Blaby on securing the debate, and I congratulate them both on the passion with which they argued for higher funding levels in Leicestershire. I share their passion to see greater funding across the country, and I look forward to the day when all political parties have in their manifestos a commitment to raise the share of national income devoted to education. That would benefit from a cross-party approach.

In a debate on funding, it is important to start by congratulating the teachers and pupils in Leicestershire on the outstanding work that is going on in their schools. I am pleased that there are more than 200 more teachers in Leicestershire schools than there were five years ago. Some of the primary school statistics are striking. The percentage of young people reading, writing and counting well has risen from 66 per cent. to 78 per cent. during the past five years. I think that hon. Members on both sides are pleased at that. There is significant improvement in maths and science at key stage 3 and the percentage of pupils getting five good GCSEs has risen from 45 per cent. to 52 per cent. during the past four years. That is a real testimony to the professionalism and dedication of the teachers and pupils.

4.19 pm

Sitting suspended for a Division in the House.

4.34 pm

On resuming—

It is also important to point out the increases in funding that have taken place in Leicestershire in the last five or six years, before I address the points raised by the hon. Member for Blaby.

The hon. Gentleman referred to core funding. He will be pleased to know that the education standard spending assessment for Leicester has increased by over 36 per cent. over the past five years. He also raised the matter of non-core funding, which is an important part of the picture. The standards fund has increased from £3.5 million in 1997 to more than £21 million this year. The school standards direct grant was £3.7 million in 2001, and is £8.2 million this year. Because that grant is not delivered through the formula spending system, it gives extra benefit to Leicester compared with that system. A typical 250-pupil primary school can expect £10,000 more next year, and a typical 1,000-pupil secondary school can expect £50,000 more. Obviously, there have also been major increases in capital spending, which are not under debate today but are important in relation to the schooling infrastructure.

I want to address the points made by the hon. Member for Blaby. I do not know if I shall justify the praise of the hon. and learned Member for Harborough; he may change his mind after listening to me for 10 minutes. The development of a new funding system for local government is a complex enterprise and depends on close working with those in local government. We are very grateful for the work of the education funding group, which was brought together with representatives from the F40 authorities. There was a serious discussion of a whole range of issues.

Having come to the process as a new Minister half way through, I do not think that it is fair to say that anyone was ignored. Everyone really did have their say. When it came to the final reckoning, some F40 authorities did well, others less so; some unitary authorities did well, and others did not. There was a serious amount of discussion.

We tried to base our development of the new system on simple principles. First, there should be a basic entitlement for all pupils; £2,000 in a primary school, £2,600 in a secondary. Secondly. there had to be recognition of additional educational needs. Thirdly, there had to be recognition of additional costs. I shall run through those briefly and address the points that the hon. Member for Blaby made. Our aim is to ensure that similar pupils in different parts of the country have a similar amount of money attached to them. In the end, the reason that Leicestershire is 150th out of 150 local educational authorities for its funding derives from the statistics on pupil need and area cost.

I am pleased that we have been able to raise the amount of money that has gone into Leicestershire schools during the past five years. I am confident that with more money Leicestershire schools could do more. That is why the overall increases in spending are important.

Let me run through the important points raised by the hon. Gentleman. He talked about the area cost adjustment and housing. Although two of the options in the consultation did use housing as a basis for the final settlement of area costs, that was not the final basis used. The final basis of the area cost adjustment was the level of wages to recognise the different costs of recruitment and retention in different parts of the country. We have a national pay scale, but in different parts of the country the costs of recruitment and retention can be higher, and are driven by turnover, above all. About 50 out of 150 local education authorities benefited from the old area cost adjustment system. That meant that there were a significant number of cliff edges in the system, and a degree of rough justice. I am pleased that under the new system we have a much more focused and carefully calibrated approach to the area cost adjustment, so that 99 authorities benefit from it.

Sad to say, that is of little comfort to MPs from Leicestershire of all parties, because Leicestershire LEA is not one of them. In refining the area cost adjustment, we had to target the allowance at those authorities with the highest wage rates. Those do not include Leicestershire. The hon. Member for Blaby also raised the question of additional educational needs. We want to ensure that similar pupils in different parts of the country have a similar amount of money attached to them. The national average percentage of pupils from deprived backgrounds is about 20 per cent. That is the primary driver of the additional educational needs funding. In Leicestershire, that figure stands at about 13 per cent., which is why the recognition of additional educational needs in Leicestershire is lower than elsewhere.

On the question of additional education needs and deprived backgrounds, border schools on the boundary of the city of Leicester are drawing in children from deprived areas—we are delighted to have them—who are sucking away educational resources from the children of our constituencies. The picture is much more complicated than the Minister paints, on a national scale.

I accept that the picture is far from straightforward. Deprivation accounts for about 80 per cent. of additional educational needs, and about 20 per cent. is reserved for the additional costs associated with speaking English as a second language and related issues. There are cross-border questions. We considered carefully whether we should account for mobility in the final formula. We decided not to do so, because the evidence was that it would not change the final distribution of resources much. We have 150 LEAs, which means that there are cross-border issues. I hope that pupils from Leicester are not seen simply as a burden. As the hon. Gentleman says, they are part of the school community in Leicestershire.

I want to say a little more about how the additional educational needs component was developed, because part of it is important and benefits Leicestershire. Under the old system the definition of poverty was based on income support. Two of the options in the consultation paper last autumn repeated that basis, but two others included families in low-wage work and families who were not unemployed but benefited from the working families tax credit. That helps Leicestershire, because the number of families in receipt of working families tax credit is just below the national average, although the number of families receiving income support is far below. Leicestershire will benefit not only from a sounder system but from our recognition of families who are not unemployed but in low-wage work.

In relation to ethnicity, Leicestershire benefits less than many other authorities, because it has between 4 and 5 per cent. of pupils with English as an additional language. That compares to a national average of about 9 per cent.

The hon. Gentleman mentioned sparsity in passing. It would be a pity not to recognise that the Government have taken an important step forward with the proposal that a sparsity element be inserted in the new formula to reflect the cost of home-to-school transport in rural areas and to help rural primary schools. I am sure that the hon. Gentleman welcomes that part of the new formula. We considered in detail whether to introduce a sparsity element for secondary schools, but we found no evidence of a connection between secondary school size and sparsity. Small schools are as likely to be found in densely populated metropolitan areas—perhaps unexpectedly—as in shires such as Leicestershire.

The hon. Gentleman referred to the gap between the highest and the lowest-funded authority. I can understand that. He also quoted some figures about the relationship between the lowest-funded authority and the average, which I did not recognise. The figure that I have is that the gap between the lowest-funded authority and the median has hardly changed. There has been a difference of about 10 per cent. in the two periods. If the hon. Gentleman wants to write to me about the figure that he quoted, I can certainly look into it. He or the hon. and learned Member for Harborough also referred to a letter that they had written to the Department that had not been answered. I shall follow that up.

I certainly undertake to find out what has happened to the reply to that letter.

The hon. Gentleman did not say much about the floors and ceilings in the new system, but it is important to recognise the 3.2 per cent. floor this time and, significantly, the impact of that in future years. Because Leicestershire is quite close to the floor, it will do better in years two and three of the spending review. We want to make sure that there is as much certainty as possible in the medium term, so that schools and local authorities can plan. We have not yet been able to announce the floors for future years—we want to see how the system works—but because Leicestershire is quite close to the floor this year, the transition will be relatively short. I think that it can look forward to significantly improved funding by years two and three of the spending review—financial years 2004–05 and 2005–06.

Finally, no one should deny—certainly no Government Member does that difficult decisions remain about how to spend money in our education system. Those difficult decisions are made by governors and heads. I reassure the hon. Gentleman that we are committed to continuing to increase the quantum of funding that goes into education. That will benefit Leicestershire to the extent of its needs. I want to see funds growing across the country, and the best route to that is to continue to raise the overall spend on education and to distribute it as fairly as possible. That is what we have sought to do in the new funding system.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Five o'clock.