Since South Gloucestershire became a new unitary council in 1995, it has been one of the worst funded authorities in the country. Since it was created, local children have received less money per head for education and local elderly people have received less money per head for social services than virtually anywhere else in the country. That is a matter of public record. Since then, I and many others have joined forces to campaign for a change in the way in which local authorities are funded. Change finally came this year and was welcome in some respects. Recognition of the high cost of employing people in low unemployment areas such as ours was a welcome change that benefited South Gloucestershire.Some of the other changes were less advantageous, but local people thought that, at long last, we would move from being the worst funded authority to not one of the best funded, but perhaps bottom but one or two—a small step in the right direction. We thought that at long last there would be a bit of an improvement. Then came the killer blow. Although it was agreed under the new system that we needed substantially more money, the Government capped that increase and spent some of the money that they thought we needed on ensuring that other authorities did not receive very small rises. The irony is that if we had not had such a bad deal under the old system, we would not have had such a big rise, so we would not have been capped. We have been capped by £4.7 million only because we had such an appalling deal for the entire life of South Gloucestershire unitary council. It is a special South Gloucestershire tax. Of that money, more than £2 million would have gone to our schools. The purpose of my debate is to bring the matter to the Minister's attention. With respect to the Minister who is here, it is regrettable that a schools Minister is not present to hear what I have to say. I have contacted the heads of primary schools in my constituency and asked them to tell me how the budget settlement has affected them. I shall say a few words about the fact and figures, but most of what I say will be the words of local head teachers, governors and parents who want to tell a schools Minister or the Secretary of State what it means for them on the ground. They may never come to a lobby at Westminster or sit in the office of a Secretary of State, but they want the Government to know how it is. I hope that the Minister will take back what he hears today to those with responsibility for these matters. Our schools could have had £2 million, but it was taken away from us because of the operation of the ceiling. As a result, our schools have suffered this year. When the fiasco blew up earlier this year, the Department for Education and Skills was wont to blame councils and said that they were holding on to the money. Let us look at the role of South Gloucestershire unitary council. It has played the game by the rules. Let us look at the council tax. The Government built in to the funding settlement an assumption that local authority council tax revenue would rise by 6.1 per cent. So what did the council do? It increased council tax by 6.1 per cent. It could have been more. It could have increased it by 9 or 12 per cent., or four times the rate of inflation, and made pensioners just above benefit levels pay for trying to maintain schools—to some extent that is a local decision. I hope that the Minister will not say that the only way to have decent schools in South Gloucestershire is to force pensioners to pay council tax rises of four times the rate of inflation. If that were Government policy, I would be concerned. South Gloucestershire bit the bullet and went for 6.1 per cent.—the Government guideline figure and double the rate of inflation. What about the money for education? The Department for Education and Skills has published a list of what councils did with their money. Allowing for the cap that was applied to South Gloucestershire, which we have to do because that is a measure of the money that it actually got, South Gloucestershire passported—to use the jargon—102 per cent. That is the Department's figure. The authority passed on more than all of the increased education funding—so it is rot that the sticky hands of South Gloucestershire prevented the money from getting through to schools. Allowing for the cap, South Gloucestershire is still spending more than the education funding formula spending share that has been allocated to it. In other words, the council is spending more on education than the Government say it needs to do—so it is not that the council is short-changing schools. If I had been given the Minister's brief to read out, I am sure that I would have found that it said, "This is a good settlement. This is a lot of money. This is a record amount. South Gloucestershire got a big amount of cash, so why is it complaining?" However, the 9.9 per cent. rise in the total FSS soon disappears when one considers what it has to go on. Pupil numbers across South Gloucestershire as a whole are rising, so some of the money is needed just to stand still. As with everywhere else, teachers' pay, pensions and national insurance costs eat up another huge slice. Part of the increase in formula spending that the Minister will no doubt want to highlight is to offset cuts in the standards fund—another part of the money that goes to local authorities. The cruel irony for South Gloucestershire is that, whereas standards fund money is allocated on one basis—for example to reduce infant class sizes, an area in which South Gloucestershire was quite near the top of the league—money is allocated on a different basis through the formula, in relation to which the authority is still bottom but one, or bottom but two, so even if the same total amount is spent, South Gloucestershire gets less. A switch from the standards fund to formula application just takes hundreds of thousands of pounds away from South Gloucestershire. That has been a big factor in the pain that South Gloucestershire has faced. There are many other one-off factors. The Minister may mention that direct payments to schools have gone up, but that money is a tiny fraction of the total amount that schools get. The overall pattern is that the rise in money was not enough to stand still. What has been the impact on schools? Overall, redundancy or premature retirement procedures have accounted for 6.1 members of staff in primary schools and four in secondary schools. That is the overall picture in the authority as a whole. Some schools have taken on teachers because they are growing. There have been many other effects as well. I want to concentrate on the human side. The Minister and I could trade figures all afternoon. I have had a letter from a chairman of governors who said that he has read the correspondence between the Department and the local authority and is no wiser as to what on earth has gone on. I hope that, if the Minister says what a good settlement we have had, he will also explain why what I am about to describe has happened in our local schools. I will not name any of the schools, because in general that was the basis on which I was given answers by the heads—although some were willing to be named. The first school to which I wish to draw the Minister's attention is one that I visited last year, when it lost one general non-teaching post and had no training for any staff and governors, and when there was an overall reduction in spending on heating and books. To make ends meet, the school turned the heating down. When I visited, there were boxes of crisps in the doorway and the hallway. When I asked why they were there, I was told that a local store let the school have the boxes of crisps when they were near to the sell-by date because it could not sell them any more. The school sold them to raise a few pennies. When schools get to the stage of having to sell nearly stale crisps to try to avoid having to sack teachers, something is wrong. That was last year, before the settlement. When an authority has been underfunded year after year, a tight year cannot simply be absorbed. The effect is compounded. Much of the feedback that I got from teachers and head teachers was to the effect that they had just about cobbled something together for this year, but dreaded next year. I hope that the Minister's notes will give us some feel for whether the ceiling will be lifted for next year, because that is critical. I asked the school what happened in this year's settlement and was told:
When the Secretary of State announced that schools could prop up their revenue budget by raiding their capital budget, the head of that school was furious, as it needed to repair the roof. It was fine that she could use the money intended for the roof to try to keep teaching assistants, but what could she do about the roof? The situation is just not good enough. The chairman of governors from a second school wrote:"long and hard-saved-for money for projects such as the roof has had to go by the board".
this is the key phrase—"The most worrying impact is that we have had to reduce teaching assistant hours and teacher non contact time. If not corrected"—
It may be obvious to say, but children are at the heart of the matter. The subject of the debate is teacher redundancies and the many, many other cutbacks, but it is the impact on the children that is the issue. I spoke to the head teacher of another school. He stressed the problems of cuts in the standards fund, saying that the school liked to employ newly qualified teachers but that it now had to provide and pay for half a day's training a week. That cost the school £3,000 a year, so it will employ fewer newly qualified teachers. Another head teacher said:"such a reduction will seriously impact the level of education we are able to offer the children".
That was a recurring theme—teachers will not be trained in large parts of South Gloucestershire this year. She went on:"There is no money this year under the 'School Improvement' category so there is no money for courses and supply cover so professional development has to be cut drastically".
The Government have great plans for changes to teacher work load and for teaching assistants to do more, but teaching assistants throughout South Gloucestershire are having their hours cut or being laid off because the schools cannot afford to keep them. How can the new agreement that has been reached with most of the teaching unions be delivered if teaching assistants are being cut back? Another school said:"We have cut everything to the bone … I just hope there will be improvement next year, otherwise we will have to cut support staff. Therefore we will be unable to help raise standards and implement reduction in teacher workload. The children suffer in the end."
I am absolutely convinced that each of those head teachers would gladly swap any number of awards, recognitions and pats on the head from the Government for a decent funding settlement. It is almost insulting to offer them an award and then not give them the money to hold on to the teachers that delivered that education. Another head teacher said:"We lost valued staff with a wealth of experience whose prime task was to support children's learning. We have just been awarded a school achievement award for 2001–02: evidence … that the investment in our teaching team was worthwhile."
That school is interested in Government initiatives, does not have falling numbers and is regularly in the top two or three in the league tables of primary schools in the area, but it is having to cut teaching numbers. What is going on? Another head teacher said:"We are a Beacon school with rising numbers but have had to cut all staff inset training and are not replacing a part time teacher who is leaving in September."
However, she continues:"We have just had an Ofsted inspection and the result was excellent! We are very proud."
The Government want schools to do all those things but are not ensuring that they have the teachers to deliver them. She continues:"Even by reducing our teachers by 0.5 in September we still will have no money in our supply budget and not enough Teaching Assistants to run the Government strategies, e.g. Early Literacy Support, Additional Literacy Support, Further Literacy Support."
This is such a painful sentence:"If a teacher goes off sick it will be disastrous. It feels like our school is paring down and, as Head, I cannot run the school as I know I should."
I believe that the school has asked the authority whether it can spend capital to keep the teachers, and the authority is currently deciding. The school does not know yet and may have to sack them. Another school said:"Our school should be thriving after a brilliant Ofsted but we feel disillusioned and depressed. I have two members of staff waiting to hear if they have jobs in September or not."
The Government have said that "excellence and enjoyment" is their plan for education; where will the enjoyment be if schools have to turn down the heating and cannot afford new books? Another school said:"Setting our budget this year has been a nightmare, unsure of whether we would be able to afford teachers or not. At one stage decided one teacher would have to go—a stressful time for teachers, a stressful time for Head and Governors. We are keeping all our teachers—but we have had to cut back on so much there is only enough money left to buy bare essentials to keep the school running."
We should be talking about improving standards, not struggling to maintain them. Another example gives a feel of where we are. There is a whole list of cuts, one of which was:"We are deeply distressed by the current funding issue, we feel we will find it next to impossible to run our school on the money allocated … We have worked hard over the years to provide a high quality education for all our pupils and we now feel that we cannot maintain standards".
Parents' associations certainly do a fantastic job, but I bet they do not think that they are raising bread-and-butter money to keep teachers at the school. I have one last one, and I do not apologise for citing all these examples, because they show that it is not a case of one school in special circumstances, or falling rolls. I am quoting from the experience of a dozen schools across the authority. One school said:"Reduction of subject leaders budgets and relying more on the Parents' Association to raise funds."
—that is quite a thing in South Gloucestershire. The head goes to work for someone else for a day a week, to earn more than it costs the school to employ them, so that they can put the balance back into the school funds to prop up the school. That is obviously what we want our heads to do, I do not think. That school also mentions:"We have made a cut of .2 of a teacher but have funded retaining other staff by using a carry forward of £45,000. This includes £20,000 generated income from consultancy fees for head"—
Staff retention is funded by donations from friends of schools. It should not be like that. Voluntary effort by parents and friends should be for the extras, not employing teachers. The school adds:"taking students, donations from Friends of School etc."
Where does that leave us? We are not going to change this year's funding. My authority is not a high-profile one, or one about which the Government got upset and threw in a few extra million. We are not going to get any more money this year. A lot of those schools have made do and mended, and used sticking-plaster solutions to get through this year; they cannot do it again. My plea to the Minister is to tell us that he will scrap the ceiling on our grant. Our modest request is that the Government give us the money that their formula says that we need. Is that greedy or outrageous? No, it is asking for the money that the Government's new and fairer way of assessing local need should give us. I have asked for more outrageous things in my time, but the money that we need will do. I am going to pass the Hansard report of our debate to all the heads who have responded and the parents who have written in. I am sure that the Minister will understand that they will want to see what the Government say. I hope that he will not insult those head teachers by telling us what record sums have gone in, how good the settlement was, and that it ain't like that, because that is exactly how it is in our schools."We had been saving this money to use for essential alterations to very small teaching spaces as identified by OFSTED. We cannot now do this work. If the situation does not improve next year we will certainly have to make teachers and teaching assistants redundant."
Before I call the Minister, I inform him that the debate will finish at 4.42 pm.
I congratulate the hon. Member for Northavon (Mr. Webb) on securing the debate. He clearly is passionate about education in his constituency. I do not dismiss the concerns that he has articulated from some of the schools in his area. He says that he does not ask too much by requesting that I announce today that we will scrap the ceiling. I think that expecting a junior Minister to make an announcement on behalf of the Deputy Prime Minister might be a little too much for such a debate. I empathise with the history of his local authority's situation because it is the same situation that my local authority found itself in for a number of years. It is one of the worst funded local authorities in the country, but, as in South Gloucestershire, it provides a high standard of education.We always fought for a fairer, better system, and I think that the hon. Gentleman would share that view. That system had to be one that could be justified objectively and was more transparent, under which there was no disparity between one group of authorities and another. However, in that context we were also realistic. If there were to be radical changes that made the system fairer—the system is much fairer than it was—there would have to be a transitional phase. That is the only difference that I have with him. The hon. Gentleman was playing to the gallery in relation to his constituents in pretending that one can move from one system to another without needing to put in place a floor-and-ceiling approach. I suggest, although I do not have the information in front of me, that if the hon. Gentleman's authority was historically one of the great losers, it may have benefited from the fact that there was a floor under the previous system. I know that my authority benefited from that. It is therefore slightly disingenuous to pretend that such radical change can be created in the system without having a ceiling-and-floor approach as a consequence, however frustrating that is—and I recognise, from my local authority area, that there is frustration. People wanted a new system, and we should remember that it is this Government who have delivered a fairer deal for authorities such as South Gloucestershire and mine in Bury. There is an understandable desire for rapid change, but there must also be honesty and reality about the need to phase in the changes.
I absolutely accept the Minister's point about phasing in the changes where authorities have to cope with less money, or very small rises, but the question is, who pays for that? The Government's answer is that authorities such as South Gloucestershire, which have had a raw deal since they were created, should pay for the transitional arrangements for the authorities that do not do very well. My argument is that yes, we need a floor, but we do not need a ceiling because a ceiling is a measure of how badly off such authorities were before. The floor could be funded by general taxation rather than by the authorities that, by definition, have had a bad deal in the past.
Again, that is one of the differences between us. In debate after debate in this House, if we tallied up the spending commitments that the Liberal Democrats make across a whole range of policy areas, the income generation part of their economic policy would, frankly, be voodoo in terms of the tax consequences for the people of this country. There has to be a measured, balanced approach. I believe that the phasing in of a new system was necessary and justified.The hon. Gentleman said that he did not want me to quote figures at him, but in debates such as this, the facts surrounding the way in which the financial situation in our schools has changed should be in the public domain. This year, there has been a record £2.7 billion increase in funding for schools. That will go up by another £1.4 billion in 2004–05 and there will be a further increase of £2.1 billion in 2005–06. The total cash increase over those three years will be more than £6 billion. Looking at South Gloucestershire, the people that the hon. Gentleman eloquently and rightly quoted, such as the heads, parents, governors and others who work in schools, know the truth. They know that between 1997–98 and 2002–03, South Gloucestershire's education spending assessment increased by more than £31 million. Over five years, that is an increase of 39 per cent. The people working in, running and benefiting from those schools know the tangible difference that there has been in their funding as a consequence of having a Labour Government since 1997. In debates such as this it has become fashionable not to mention capital, or to dismiss it as an irrelevance. The focus is on revenue, so the amount of money to repair buildings and build extra classrooms is dismissed. However, if we look at what has happened there, we can see that in 1998–99 capital funding in South Gloucestershire was £8.1 million. This year, it is up to nearly £15 million. There have been significant, year-on-year improvements in the level of resources made available to South Gloucestershire. The local authority has a record of passporting such money and I would not criticise it in such circumstances, so I assume that the individual schools have benefited directly in a significant way. Of course, the schools are impatient for the improvements to be even better, but the hon. Gentleman will agree that the fact that we have a new funding regime is the light at the end of the tunnel. I, perhaps unconventionally, in my capacity as a constituency MP and the hon. Gentleman in his capacity as a local representative have been engaging in a dialogue about the light at the end of that tunnel for many years—probably since the days when we were parliamentary candidates. The Government have delivered those changes and a new system. That will begin to lead daily to significant and tangible benefits to the investment available for the front-line services that matter to people in our communities. The aims of the new system are clear: similar pupils in different parts of the country should receive a similar amount of money from central Government. We also believe that it is important that the distinct responsibilities of schools and local education authorities are recognised in funding. That is why there is a separation of the two in the new system. There are also three basic funding entitlements for all pupils: first, £2,005 for pupils in primary schools and £2,657 for secondary schools; secondly, a top-up for deprivation and additional educational needs; and thirdly, for pupils in areas with high costs for salaries, recruitment and retention. So there is logic and fairness in the new system, which were not evident in the previous system. We also acknowledge that there must be a shared responsibility between central and local government when dealing with these issues. We also honestly recognise that the challenge for us all this year has been to manage a complex interaction of changes in the transfer of funding to reflect the teachers' pensions increase and the working through of the teachers' pay settlement. We recognised that by making additional resources available to areas where those changes have had a seriously unreasonable effect. The hon. Gentleman implied that arbitrary decisions had been taken about how local authorities received additional money. We believed that no area should receive less than 3.2 per cent. per pupil, which is how we allocated that additional resource. Despite his comments, South Gloucestershire's increase was 4.3 per cent. per pupil. The local authority did not meet the threshold required not to qualify for that additional resource. The full cost of the teachers' threshold will continue to be paid by additional grant from my Department. As the hon. Gentleman said, the Secretary of State made it clear that, for one year only, we were prepared to relax the regulations so that devolved capital could be used for revenue purposes. He also made it clear that we would allow schools to borrow from consolidated balances and that LEAs could license schools to set reasonable deficit budgets. In our debates, there are certain legitimate questions that we never ask. One such question is about the level of reserves that schools have, although by asking that question I am not implying that all the schools to which the hon. Gentleman referred have large reserves. I do not know, but I do know that many schools with problems have significant reserves, and there are issues about that. It is also true that governing bodies and head teachers make individual choices about the use of existing and available resources and prioritise in a way that varies widely. The hon. Gentleman referred to the implementation of the Government's strategies, as if the Government are somehow separate from the challenge to raise educational standards. Improving literacy and numeracy, the key stage 3 strategy, and the emphasis on attendance, behaviour and discipline should not be seen simply as Government strategy. They are about every school in every part of the country wanting to focus on raising educational standards. We have teacher redundancies every year, and we always will because of falling rolls in some institutions. Again, I do not pretend that all the potential redundancies in the hon. Gentleman's constituency are due to falling off. I do not know. The hon. Gentleman was honest enough to say that other schools are taking on more teachers, therefore the net effect in the local education authority area might be that more teachers and more classroom assistants will be employed. Hon. Members should remember that there are 25,000 more teachers than there were six years ago, and 80,000 more support staff. We are determined to sustain that improvement. The new system is a substantial improvement. It reflects the separate responsibilities of LEAs and schools; it uses up-to-date data that is relevant to children's needs—
The Minister has a couple of minutes left. Will he reflect on what he has said and how it will be read by the head teachers I quoted earlier? How will they feel when he tells them that there is light at the end of the tunnel, but he cannot tell them how long the tunnel is in terms of years, or when he says that it is okay that they have had to sack teachers because some schools have taken teachers on?
Most head teachers and educationists would recognise that a significant extra investment has gone into education since 1997 because I believe them to be honourable. They would also recognise that they have been waiting for a long time for the local government finance system to change, welcome the fact that it has now done so and want that change to be accelerated. Most of them would say, "What are we going to do next year and the year after in terms of our financial situation?"We want to maintain the momentum of record levels of investment in education and we are committed to a number of things: sufficient education funding increases for every local education authority; getting the balance right between support through general grant and ring-fenced and targeted grant; schools and pupils having the confidence that they will receive the money intended for them; the right balance between in-school and out-of-school provision; fair and appropriate variations in the budget increases received by different schools within each local education authority; and that work force reform in line with the national agreement can be sustained. We are working through that agenda with our national and local Partners to ensure that the changes are in place and are understood in good time to enable schools and LEAs to plan effectively for 2004–05 and 2005–06.
It being eighteen minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.