Devon’s education authority is one of the worst funded in the country; its standing is 148th out of 151. Indeed, only Leicestershire, South Gloucestershire and Hertfordshire have less per pupil funding than Devon. This is not a new problem; it dates back to the funding formulas set up in the 1980s.

I wish to cite what a local head teacher has said and to give voice to the number of people from across Devon who are concerned about the issue. This is about their concern and anger, so I wish to put their words on the record.

Chris Bray, who was head of the Abbotskerswell school, said that when he was head the Conservative Government brought in a funding system that gave Devon schools less than virtually every other authority in England—£96 per pupil in 1994, rising to £145 in 1995—and that it has continued to get worse. That is the gap in funding, on average, compared with the rest of the country.

Recognition has to be given that the Labour Government have put more money into education, but the system of grant per pupil is now worse because it is fixed on a cost-plus basis rather being based on the criteria of what drives the costs in the school. Changes in make up and in deprivation in an area are no longer a matter for consideration because the funding is fixed at a point in time five years ago, when the current criteria were set up, using a faulty system, as I have already explained, from 20 years before that.

The top funded council in the country is currently the City of London, where pupils get a grant in the order of £7,603. The 10 best funded areas per pupil receive £6,252. The national average funding for each school pupil is £4,217. In Devon, it is only £3,842. I am at a loss to understand how that grant of £375 less than the national average can be justified. I looked at the individual schools, and we worked out a little list from the rolls of the schools in my constituency. Let me pick a couple of examples.

Abbotskerswell primary, a small school, has a funding deficit of £29,250. Let me look at some of the larger schools. Hazeldown, which is also a primary school, has a deficit of £145,000. The situation for the secondary schools is even worse. Dawlish community college is losing £324,000, Teignmouth community college £394,000, South Dartmoor community college £615,000, Teign school £519,000 and Newton Abbot college £362,000. Those are all substantive sums of money—enough, in most cases, to employ 10 teachers. That is one of the main complaints of pupils, parents, governors and teachers. Given more resources, they could do more with what they have.

It can be argued that in Devon, of course, we do very well. We have high standards and educational attainment is in the top third in the country. That is true, but it is no good just considering the 50 per cent. We must consider the rest of the pupils and what happens to them. It is the pupils who have difficulties, who have been statemented or who come from areas of social deprivation who are losing out. I would consider it a fundamental aim of any education system to create equal opportunity, and that is being lost in Devon because it is not getting a fair slice of the cake. The original formula fails to take into account the rural deprivation in Devon and the costs associated with travel for pupils and staff.

Devon county council is responsible for 8,000 miles of road, more than any other authority in the country. The school transport bill is now in excess of £22 million a year. Does the hon. Gentleman not agree that any fair funding formula for education in Devon must take into account rural sparsity and the high cost of transporting children to school?

The hon. Gentleman makes a very good point: of course any such formula must take account of that. Indeed, the director formerly responsible for the county’s highways and environment was wont to say that there were more roads in Devon when Plymouth and Torbay were part of the greater council than there were in the whole of Belgium. That gives some idea of the scale of the problem. Plymouth and Torbay are no longer part of that road network, but it is still vast and people still have large distances to travel.

I know that the hon. Member for East Devon (Mr. Swire) has a large constituency, but mine covers 660 square miles. It takes me two hours to get from one side to the other. People live in small pockets, and they have to travel long distances to get to the main hubs and to their schools. He has made a very good point.

The great distances that people must travel affect pupils’ attendance at after-school clubs, and also parental choice, as the options are reduced. The county has a real problem when people who wish to assert their parental choice are denied it because the travel budget has to be made to work. In one year, the Government allocated some £5 million in grant for travel—I am not sure of the exact figure—yet the real cost was three times that. As a result, the county had to take money from elsewhere to be able to fund its transport needs.

A slight reduction in pupil numbers results in a grant cut, yet core staff must still meet curriculum requirements. That is a particular problem for the small schools that are to be found in rural areas. A campaign group, the F40 group, is campaigning for under-funded education authorities. When the Minister for Schools and Learners addressed its conference on 3 November, he said:

“We want to work with F40 to make sure that that fairness I’ve talked about is built into dedicated schools grant funding from design stage to distribution. It’s one of the reasons why we ordered the funding review last year—so that we can develop a single, transparent formula for the distribution of DSG that’s in line with relative need.”

We welcome what the Minister said, but in answer to the question of whether the Government were still committed to small schools, he said:

“Yes, we are. We know that they’re an important part of the rural landscape and an important factor in keeping rural communities alive. And I am pleased to say that the presumption against closing rural schools, which we introduced in 1998, has reduced the number of closures from around 30 a year to an average of around 9 or 10 a year now.”

In my view, nine or 10 small rural schools closing every year is still too many. They are the heart of their communities, and they have an important role to play in keeping them together.

Devon county council has launched a campaign for fair funding. In a press release dated 16 October, the chairman of the Devon Association of Primary Headteachers—Gary Chown, the head teacher at Tiverton’s Wilcombe primary school—said:

“We are not asking for special treatment. What we want is for Devon’s schoolchildren to be treated fairly.”

He went on to say that

“staff costs account for around 80 per cent. of a school’s running costs. It costs roughly the same to employ a teacher anywhere in the country because of the national pay scales. Books and equipment cost the same. So do most of the running costs of a school. And in Devon many remote schools have to pay more for such services as Broadband because of their distance from the main hub.”

The chairman of the Devon Association of Governors, Don Paterson, is also chairman of the governors of Newton Abbott college in my constituency. He said:

“We do not dispute for a moment that the Government has put more money since 1997, but percentage increases in school funding merely means that the gap is widening all the time between Devon schools and their better-funded colleagues in other parts of the country.”

Josh Wright, the spokesman for the teachers’ unions, teaches at Honiton’s community college, and the Minister might expect him to be on the Government’s side.

He said:

“My colleagues are at the chalk face, and we know what a difference we could make to our students’ education if we were fairly funded. An extra teaching assistant, another field trip or an additional piece of kit in the classroom could really help a student to get the best from their education. Children only get one chance at education and it is really unfair that Devon children are penalised because of the postcode lottery of school funding.”

Other quotes have been sent to me since I secured the debate, and I shall read out a couple more before I conclude and allow the Minister to respond. I could actually have read out enough to fill 45 minutes—I know that I cannot, Mr. Deputy Speaker, and I do not intend to do so. Such is people’s anger that when I sent out a request for them to write to me, my inbox was flooded with e-mails from constituents.

Nick D’Agorne, head of North Tawton primary school, said:

“As regards unfair funding, all I need to do is share with you our class sizes!...I have had to refuse three families last term as we cannot fit the children into the large classes. So why not employ another teacher? We are unable to employ another teacher as we would have to make TAs redundant and not give support for the teachers in the mornings.”

Jo Frith, a governor at the Littletown primary school in Honiton, said:

“At current levels of DSG settlement, we are predicting that we will have to have mixed-year group classes in key stage 2, with more than 30 per class in order just to keep ourselves in the black”.

Is it not a disgrace that after years of promises on “Education, education, education”, schools have been forced to adopt class sizes of over 30? I thought that we had a commitment to get rid of that.

I shall end with a final quote, from David Fitzsimmons, the principal of Holsworthy community college:

“If we truly want to achieve a world class education system, we have to tackle the underachievement and the needs of the 50 per cent. or so of children and young people who are not achieving the national benchmark in GCSE results tables.”

In short, it is a disgrace that for the past 20 years, Devon schools have not received what they should have received to enable them to educate the young people—the children, the school pupils—in Devon. The fact that they achieve such high results, with such meagre resources, is a testament to their dedication, which is what I would expect from their profession. The Government are reviewing the system, and I welcome their recognition that it is not quite how it should be. In doing so, I hope that the Minister will be positive and say, “It is not necessarily broke, but it ain’t working quite as it ought to.” Is it not time that local authorities such as Devon had their fair share of the cake?

I congratulate the hon. Member for Teignbridge (Richard Younger-Ross) on securing this debate.

The funding of education is a topic that my Department takes seriously, and we want to make sure that we get the right amount of funding for our schools, because that allows our schools to give the right amount of support to their students, as well as enabling them to pay for the appropriate numbers of staff to meet the needs of their pupils and manage the upkeep of their school. Funding in Devon has been the subject of previous meetings with other hon. Members and has led to a petition on the No. 10. website. The campaign has been very effective in raising the issue.

Before I address the concerns that the hon. Gentleman raised, it is appropriate for me to point out the unprecedented funding that the Department has given to address decades of underinvestment in our schools. I am pleased that he recognised and paid tribute to that. There has been a national revenue funding increase of £2,410 per pupil between 1997 and 2010. That has seen the previous average revenue funding of £1,808 that was spent on each pupil back in 1997 increased to record levels of investment of £4,218 in 2010.

We want to ensure that that investment is built upon steadily, so that each school gets the right amount of funding to support its students and staff. That was the chief aim when we set up the dedicated schools grant in 2006. The amount was calculated by the SpendPlus model, which took the per-pupil spend by each local authority in 2005-06 and applied an increase to it. This model of funding was used in 2006-07 and 2007-08 and, following extensive consultation with a wide range of stakeholders, it was decided that the formula would also be used for 2008 to 2011. Using the formula has created stable and predictable funding levels for all local authorities. It is worth noting that in the pre-Budget report in December 2009, there was a significant commitment to increase spending on schools in real terms between 2011 and 2013.

That brings me on to funding for Devon. I understand that the funding that schools in Devon receive has been an issue for some time, and that there has been a debate about it for several years. I appreciate the concerns of the hon. Members for Teignbridge and for East Devon (Mr. Swire). It is our intention to provide all schools with the appropriate funding for their area. We want to ensure that all children get an excellent education, and children from disadvantaged backgrounds need extra support from their school to make that a reality.

Such support requires funding, and the appropriate school funding reflects the needs of each area. Devon has fewer pupils from disadvantaged backgrounds than other local authorities, which is a contributing factor to the amount that it receives. Only 8.5 per cent. of Devon’s funding settlement in 2009-10 was for disadvantaged pupils. That compares with the national average of 12 per cent.

Let me pick up on the comment from the hon. Member for East Devon about school transport. School transport is funded not from the dedicated schools grant, but from the general local government fund. Part of the funding in the dedicated schools grant is specifically for sparsely populated areas, because we all recognise that the cost of running a small rural school is much higher than the cost of running an inner-city school. Consequently, Devon will receive this year £9.38 million to cover the cost of its sparsely populated areas.

I am aware of the dedicated schools grant of £9.38 million to cover all aspects of sparsity, but the transport bill is more than £22 million a year.

I heard the hon. Gentleman’s comments on that, but as we are talking about the funding that goes into schools in Devon, I thought it was worth making it clear that that part of the expenditure on school transport is separate from the school funding directly to schools, which is the main thrust of the debate.

Staffing, managing staff and how much teachers are paid were among the issues raised. Schools are free to make choices between priorities, but they have a responsibility to make tough decisions and to operate within their funding allocation. It should be a matter of course for each school to review how it deploys its resources, including staffing.

On rural deprivation, I appreciate that young people in rural areas may find it more difficult sometimes to access services and opportunities, but we still have high expectations of services and activities being made available in all areas, not just in towns and cities. The White Paper “Your child, your school, our future” published last year set out our vision for a 21st century schools system, in which every child can get access to the support and activities that they need to succeed.

Does the Minister accept that it is very difficult to measure rural deprivation? One reason why Devon loses out on funding is that the measures that are used to look for rural deprivation are a very blunt instrument. We need far more refined tools to work out the real poverty and deprivation in rural areas.

I am certainly happy to come on to deprivation as one issue that might be put out to consultation when we consider the funding formula that we use in future.

To return to our expectations, we recognise that schools will not be able to deliver everything on their own, and that is why we are encouraging schools to work in partnership with other schools and services, especially in rural areas. Our expectation is that they will work together to deliver for all their pupils, using pooled and combined budgets where appropriate to maximise efficiency and get the most from their money. On raising Devon’s funding to the national average, I should say that funding should reflect the needs of each local authority, so some authorities will receive an education settlement that is lower than others. I appreciate that the current funding methodology does not necessarily wholly reflect the costs and pressures that local authorities face, but the hon. Gentleman will understand that the SpendPlus model has brought a great degree of stability and predictability to the system. Indeed, the guaranteed units of funding for 2010-11 have been available since 2007, enabling schools and local authorities to plan effectively, but we recognise the need to move to a needs-based formula, and that is why we are undertaking the dedicated schools grant review. With 152 local authorities to fund, with many costs and pressures to consider and with a finite amount of funding to distribute, it is not right for everyone to receive the national average. It is right that we invest our resources where they are most needed.

Let me be clear: there will be no change to the Government’s funding settlement for education in 2010-11. In 2007, we consulted on the school funding arrangements for 2008 to 2011, which we published prior to our announcement for the settlement in November 2007. The Department has been very open, highlighting since then that the current spending period will not be as generous as in previous years. It would not be right to reopen the funding settlement now. Doing so would create additional pressure on an already tight settlement and take away from the excellent work that local authorities and schools have done, through planning, on how to use that money effectively. Devon county council, like all other local authorities, has had an indicative budget for three years since 2007 in order to enable it to plan and use the money wisely.

I agree with the hon. Gentleman that the funding of schools should be fair and even throughout the country, and that is why we are carrying out a review of the dedicated schools grant. We want to be able to develop a formula for use from 2011-12 and onwards that properly reflects the needs of every local authority. We have to take into account factors such as deprivation, the number of high-cost pupils, sparsity and the higher cost of employment. At this point, I cannot commit to the outcome of the review or promise what the formula will be, but the hon. Gentleman should know that we are working very hard towards a fairer funding system, and we expect to publish the consultation soon.

In conclusion, I again commend the hon. Gentleman for his proactive role in bringing this topic to the Floor of the House. I hope that he, along with other hon. Members who represent that part of the country, will feel able to participate in the consultation on the dedicated schools grant, once it is published in the weeks ahead.

Question put and agreed to.