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Schools Funding (Worcestershire)

Volume 522: debated on Tuesday 1 February 2011

I begin by saying what a privilege it is to serve under your chairmanship, Mr Gale. I seek leave from you to allow my colleagues to speak.

Order. I am slightly distracted and I apologise to the hon. Lady. Any hon. Member who seeks to speak must have the permission of the hon. Member in charge of the debate and the consent of the Minister. I trust that the speeches have been cleared with the Minister as well.

Yes, they have.

At the outset, I declare an interest as chair of governors at Vaynor first school in my constituency. I want to speak for a few minutes and then invite my two Worcestershire colleagues, Mr Robin Walker and Mr Mark Garnier, to speak. Like me, they have a keen interest in this debate.

Order. I am sorry to interrupt the hon. Lady again. We shall get started in a minute, and fortunately we still have a full half-hour. I remind her that she must refer to hon. Members by their constituencies and not by their names.

Fairer funding in Worcestershire has been a long-running crusade of mine, ever since I came to the county in 2000, when we moved from Wrexham in north Wales to Redditch. At the time, both my children were happily and successfully educated in the state sector in Wales, so it came as quite a shock when we realised that their education in Worcestershire did not seem to carry the same monetary value as it did in Wales. By that, I mean there was obviously something of a funding gap between what was provided to every child in Wales and what was provided to children in Worcestershire, which was far lower. Perhaps the Minister will shed some light on that issue.

I became a governor at Vaynor first school in Redditch, where the situation was worse than I thought. The school provided a good education to our children, but without many of the necessary resources. Added to that was the competition that we faced with neighbouring authorities to attract extra staff. That was due to our lack of funds and available means compared with other schools.

Worcestershire has constantly been near the bottom of the league tables, and in 2008-09 the average funding per pupil per year in Worcestershire was £3,729 compared with £4,066 nationally. This year, it is £4,028 compared with £4,388 nationally. While £300 does not seem to make a great deal difference in this day and age, it is a significant amount when applied to each individual pupil across Worcestershire.

Locally, things are worse. As the Minister may know, Redditch is on the outskirts of Birmingham, and currently schools in Birmingham are allocated at least £700 more per pupil than Redditch. Although I understand that there are intervening factors, £700 is a huge amount of money per pupil when one considers what sports equipment, after-school clubs, arts, science or reading materials could be provided for each child.

For a school such as Vaynor first school, which has 403 pupils, the funding disparity means that about £285,000 more would go to a similar school in Birmingham. Furthermore, with our current budget of just more than £1 million, we can see just how unfair the funding gap is. Cumulatively, that money could allow the school to provide one-to-one teaching for struggling students or provide extra resources.

Of course, Redditch will benefit from the Government’s pupil premium initiative, which I welcome with open arms. I am pleased to see that the most disadvantaged pupils will receive an extra helping hand. That is especially important in Redditch where there are some deprived areas. I wholeheartedly agree with the Secretary of State for Education when he said:

“Schools should be engines of social mobility.”

We have a duty to ensure that the school system in the UK nurtures and provides for our young people to give them the best possible chances from an early age. Today, I have written to all head teachers in Redditch, asking them to contact parents to ensure that those children who are entitled to free school meals are aware of the help available.

I congratulate my hon. Friend on securing this debate, which is so important to the future of children in Worcestershire. Does she agree that free school meals are not a good measure of deprivation in Worcestershire, particularly where rural schools no longer offer a dining room and therefore cannot offer free school meals?

I totally agree. We have to start somewhere, and perhaps as this Parliament progresses we will think of a fairer way of dividing the available money.

Redditch has the added problem of having been “red-flagged” by the Audit Commission on health and education issues. That is another factor for Redditch to deal with, in addition to those that I have already mentioned. The Government need to take a variety of factors into account when allocating funding, and I urge the Minister to recognise that. Some areas have slipped through the net, where funding is concerned. Although I understand that money is not the be-all and end-all, it goes a long way in sorting out some key issues.

I also realise that the solutions cannot all be provided by central Government, and neither should they be. My constituency staff in Redditch and I help out by mentoring young people from a local secondary school, which is the same school that both my children attended. We help those pupils to discuss any problems that they may have, encourage them to achieve their aspirations and offer them reassurance.

In conclusion, I am passionate about education, and I want to ensure that young people who attend school in Redditch—and indeed across the UK—get the best education that can be provided. We all know that children get only one chance, and we should help them to achieve the best they can. Although the Government are making significant improvements to our school system, we still have some way to go, mainly by ensuring that funding for schools is allocated in a fair and just way for the benefit of every child rather than according to the political jostling of central Government.

I congratulate my hon. Friend the Member for Redditch (Karen Lumley) on securing this vital debate, and on the passionate way in which she has argued her case. The minutiae of funding formulae do not make for glamorous debates, and in discussing such technical matters it is only too easy to lose the wood for the trees. It is vital to remember that the heart of this issue is a concept that is so simple but yet so central to the coalition Government—fairness.

Like my hon. Friend, I was elected with a clear mandate to campaign for fairer funding, and I am passionate about securing that aim. I have been lucky to learn from people who have far greater knowledge of such matters and who for many years have made it their main aim to achieve fairer funding—the F40 group. If, in the next few minutes, I delve into the dark byways of the funding system, I make no apology, but I ask hon. Members to bear in mind that I do so in a quest for fairness.

When I received our county council’s briefing on the impact of this year’s changes to school funding, I immediately reached for a cold towel to put over my head. The complexities of having one grant mainstreamed and another top-sliced—here a top-up, there a minimum funding guarantee—would be enough to put off all but the most dedicated funding nerd. There is nothing transparent about our current system. At last, with the help of that cold towel and some expert tuition, I was able to make some sense of the numbers.

The Government said that they have provided flat funding. That may be the case across the country, although even that is a challenge with inflation as it is. Unfortunately, in Worcestershire the mainstreaming of grants appears to have seen some reductions. Before the introduction of the pupil premium, we will see a fall of approximately £1.2 million in cash terms from last year to this. A table of per pupil funding by authority has been compiled by F40, based on the guaranteed unit of funding and cash numbers. Disappointingly, it still shows that Worcestershire is among the 10 worst-funded authorities in the country on both counts.

However, all is not lost. As my hon. Friend has noted, that small fall is more than made up for by the pupil premium. The estimated £3 million increase from that means that Worcestershire is a net winner from the Government’s changes. There is no doubt that the pupil premium marks a step in the right direction, but it is not enough. Underlying the guaranteed unit of funding figures, there is no perfect formula produced by the finest minds in the Department for Education, and no work of genius compiled to meet the needs of every school in every part of the country. Instead, we have a mess—a hotch-potch of historical errors and corrections—and an unfairness, which is based on an injustice, which is based on a mistake.

The underlying formula has not changed. Instead, the so-called dedicated schools grant has ossified—it is tweaked from time to time, but every year the underlying mistakes are repeated and magnified. Each year, as the Labour party spent the golden legacy that it inherited, money was fired off on a flawed formula that is widely understood to favour big cities over rural counties. That formula targets deprivation on the broadest levels, but misses it in the many pockets where it truly exists. It fails to reflect activity in schools, which hurts places such as Worcestershire the most, due to their very diversity.

Worse still, the constant use of spend-plus has magnified those effects. I do not need to repeat my hon. Friend’s arguments, but I can set out the picture in Worcester, where a number of wards are in the top 5% for deprivation in the country. They are wards served by schools such as Gorse Hill primary, where I used to help with reading, and secondary schools, including the outstanding Christopher Whitehead language college, which caters for the Dines Green estate. Between them, Bishop Perowne college and Tudor Grange academy look after Tolladine and Warndon.

Those are all fine schools, and in the past their good performance has been used as a reason why they did not need fairer funding. Now, in a time of austerity, the same case cannot be made. Those schools will benefit from the pupil premium, but that does not undo the legacy of decades in which the formula worked against them.

As the Government White Paper accepts, and as the Leader of the House confirmed last week,

“the system of school funding is unfair and needs reform.”—[Official Report, 27 January 2011; Vol. 522, c. 457.]

Who am I to argue with the Leader of the House?

I welcome the steps that Ministers have already taken. I was pleased when my noble Friend Lord Hill met me with the leadership of F40 to discuss the broad case for reform. I am delighted with the impact of the pupil premium and look forward to the benefits that it will bring to schools that have waited too long for their due. I urge the Government to deliver on their commitment as soon as humanly possible to develop a clear, transparent and fair national funding formula based on pupils’ needs.

In the audience for the debate today are pupils from Bishop Perowne college, a very fine school in my constituency. In their interests, in the interests of Worcestershire and in the interests of fairness, I commend this cause to my hon. Friend the Minister.

I congratulate my hon. Friend the Member for Redditch (Karen Lumley) on securing the debate. I also congratulate my hon. Friend the Member for Worcester (Mr Walker), who has worked incredibly hard on behalf of all of us in Worcestershire, on getting into the nitty-gritty and the nuts and bolts of the funding formula. It is very useful to have someone taking the lead on our behalf, although I stress that that in no way diminishes our enthusiasm to sort out this problem.

The issue of fairer funding for Worcestershire schools is ongoing, and much of what I am about to say will, to an extent, be repeating the arguments, but it helps to put the issue into context. I visited one of my local secondary schools just last Friday and met the members of the student council. Those pupils are still reeling at the prospect of university fees, but it was helpful and, I believe, productive to sit down with them, to discuss the arguments and to try to sort out some of the misunderstandings that have been promulgated in the debate.

People at the school were also very worried about the education maintenance allowance. During the meeting, the head teacher told me that some 45% of pupils at Stourport high school receive the EMA. Some may argue that that proves that it is poorly targeted, but I choose to look at it differently and to use it to illustrate the fact that Worcestershire has hidden pockets of financial need. That evidence of financial need illustrates the point that Worcestershire is not the wealthy rural idyll that some believe it to be. It is not the affluent area that the appallingly low per pupil educational grant suggests; it is, in fact, an area that needs more investment in its education system.

My hon. Friend the Minister will be aware that my constituency is in educational limbo as we wait to see whether there will be a capital grant to help the 11 schools whose rebuilding has been cancelled as a result of the cancellation of the Building Schools for the Future programme. He will know that I am keen to secure the £125 million needed to complete those schools. As we have had a previous debate on the issue, I will not rehearse the arguments here a second time, aside from giving the Minister the most respectful but firmest of nudges, if I may, to ensure that Wyre Forest is looked at favourably when the money is handed out.

In the meantime, it is vital that the Minster takes on board the fact that another school in Kidderminster, Baxter college, draws its pupils, in part, from a ward that is rated in the bottom 10 in terms of indices of social deprivation across England, yet it receives about £3 million a year less than an equivalent school in Tower Hamlets. Of course, I realise that there are specific issues regarding the cost of being in central London, but the social issues do not justify such a massive discrepancy.

It is vital for us in Wyre Forest that we have investment in our schools locally, and the topic of this debate is the per pupil funding. If we continue being so unfair to Worcestershire’s pupils, we will continue to lock some places into permanent under-achievement. I have got to know many of the teachers and heads in Wyre Forest, and I am staggered by the incredible job that they do in, in some cases, extremely difficult circumstances. However, we cannot rely solely on their continued good will and tireless work. It is vital that we support our teachers by giving them the resources that they need and deserve. Knowing that the Minister will be keen to help on this issue, I repeat how important it is that we see our capital funding in place, for reasons that we discussed in this Chamber in a previous debate.

I congratulate my hon. Friend the Member for Redditch (Karen Lumley) on securing today’s debate. I welcome the opportunity to discuss school funding issues in Worcestershire with her and my other hon. Friends. I recognise her concern about the level of school funding in Worcestershire. Despite what my hon. Friend the Member for Worcester (Mr Walker) said, I think that this is a glamorous subject to debate, and I am delighted to be doing so.

Worcestershire is one of the lowest funded authorities in the country. In funding allocations per pupil, Worcestershire is ranked 142nd out of 151 authorities, receiving, as my hon. Friend the Member for Redditch said, £4,028 per pupil compared with an average of £4,398. To put that in context, in neighbouring Birmingham, the figure is £4,790, which is £762 more per pupil, and in Tower Hamlets it is £6,792—a staggering £2,764 more per pupil per year.

I know that my hon. Friend’s concern is shared by my hon. Friend the Member for Worcester, who tabled an early-day motion last June calling for a fairer funding system for schools and raised the issue in the House at business questions last week. I also know that the F40 group, which represents many of the lower funded local authorities in England and of which Worcestershire is a member, has met my noble Friend Lord Hill and raised those issues with him. I know that all these concerns are also shared by my hon. Friends the Members for Wyre Forest (Mark Garnier) and for West Worcestershire (Harriett Baldwin).

The reason for the situation is the unfair and illogical funding system that we inherited from the previous Administration and that we are committed to reviewing. Indeed, we are doing so, as my hon. Friends will be pleased to know, with some of the finest minds in the Department for Education, who are sitting behind me—not directly behind me, but behind my hon. Friend the Member for Grantham and Stamford (Nick Boles), although he also has a fine mind and will, I am sure, contribute to the debate.

To be fair to the previous Government, they had been reviewing the system as well. The method of distributing school funding is based on a formula created in 2003. That was subsumed into the dedicated schools grant using the spend plus method, which took the funding spent by local authorities in the financial year 2005-06 and moved it forward by uplifting it by a set percentage each year for every authority and adding funding for ministerial priorities. That means that the inequalities in the system that existed in 2005-06 have been amplified by the percentage increases in subsequent years. In the words of my hon. Friend the Member for Worcester, the grant has ossified and it repeats and amplifies the unfairness. The effect is that schools facing similar challenges can receive vastly different funding. Two schools with the same needs should receive the same funding; it should not depend on an historical allocation made for a different set or a different generation of children.

Therefore, in our White Paper, “The Importance of Teaching”, we said that we would consult on developing and introducing a clear, transparent and fairer national funding formula based on the needs of pupils. We recognise that not all schools are the same and that their funding should reflect the needs and characteristics of their pupils. Worcestershire, for instance, receives funding for sparsity of nearly £2.5 million a year. However, the system no longer reflects needs adequately, depending more on what schools received in the past than on the characteristics and needs of pupils in their schools now. We want all schools to be funded transparently, so that schools and parents can see why there are differences.

We are already working with partners—such as the Local Government Association, the Association of Directors of Children’s Services, teacher and governor associations, and the Independent Academies Association—to develop options for the future funding of schools, with the aim of consulting in late spring. No doubt my hon. Friends will contribute to that consultation process. It is likely to cover the merits of a national funding formula, transitional arrangements and the factors that should be included in such a formula.

I know that my hon. Friends will be disappointed that we have not been able to go further in our first year. We inherited a perilous economic state from the previous Administration, and the Government have made it clear that deficit reduction and continuing to ensure economic recovery are the most urgent issues facing Britain. Our budget deficit in the last financial year was £156 billion—the highest among the G20 countries. The interest on the accumulated Government debt to date is £42.7 billion a year, which is significantly more than the total schools budget. Unless we take serious measures to tackle the deficit, we will face a higher cost of borrowing as capital markets demand greater compensation for the heightened risk. Ultimately, without the action that the Government are taking, we would now face an economic crisis.

As with other public services and Government spending, we have had to make difficult decisions about funding for schools. I hope that my hon. Friend the Member for Wyre Forest will understand that, given that we do debate the difficult issues that he raised in his remarks. We have had to make very difficult decisions in relation to the spending review period. In reaching those decisions, we needed to balance taking urgent action to manage the public finances with protecting the most vulnerable and recognising that education faces particular pressures.

I am pleased that we are protecting funding in the system at flat cash per pupil, before adding the new pupil premium. Flat cash per pupil means that as pupil numbers go up, the overall budget increases in line with those numbers. The pupil premium is in addition to that and will be worth £2.5 billion by 2014-15.

In that context, I hope that my hon. Friends will see this as a good settlement for schools, in the circumstances. As ever, the budget for each individual school will vary; it will depend on each school’s particular circumstances and the decisions made by local authorities and school forums about how best to allocate funds.

Will the Minister address my point about free school meals in rural constituencies, where many schools no longer offer a dining room?

Yes, I am happy to respond to my hon. Friend’s question. I recognise the concerns about using free school meals as a measure, but they are the only available method that can correlate deprivation at pupil level, rather than at postcode or area level, so they are the most accurate reflection of deprivation. There is quite a lot of academic evidence that free school meals accurately reflect the levels of deprivation in an area. However, we will continue to look at the issue, and we might in future include a measure of, for instance, whether pupils ever qualified for free school meals during a period of, say, six or three years. In that way, those who qualify for free school meals for just one year, then no longer qualify, will be eligible for the pupil premium.

The other thing that is happening as a consequence of policy on free school meals is that local authorities are pressing schools and parents to apply for free school meals, which they might not have done in the past. That will have a double benefit, in that more pupils will qualify for the pupil premium, as well as being able to have a meal at school.

The flat-cash settlement means, of course, that it will take time to move to the fairer funding system that I have been talking about. However, funding reform will be introduced in such a way as to minimise disruption and ensure that schools’ resources are not subject to sudden and dramatic change.

Our priority for 2011-12 is the introduction of the pupil premium. I have said before, and make no apology for repeating, that closing the attainment gap between those from the wealthiest and the poorest backgrounds is central to our education policy, and that was reflected in the speech by my hon. Friend the Member for Redditch.

Does the Minister agree that a key issue in closing the attainment gap is early intervention to give people the best chances and the best start in their education? Another issue that needs to be prioritised, therefore, is the early intervention grant. Disappointingly, however, it is likely to go down in Worcestershire over the next couple of years. Will the Minister look into that to see how we can concentrate resources in the right places to prioritise early intervention as the Government address these issues?

My hon. Friend makes a good point. That is why we have allocated £2.2 billion to the early intervention grant. It is vital to intervene early to catch problems before they become more systemic in a child’s life. My hon. Friend is right, and I will look into the issues he raises to ensure that there is not some undue unfairness in the allocation of the grant in Worcestershire. I will write to him shortly.

Although the exact amount of the pupil premium will depend on the number of children known to be eligible for free school meals, as recorded in the January 2011 census, which is not yet finalised, the numbers recorded in 2010 give an indication of the numbers for Worcestershire. On that basis, schools in my hon. Friends’ local education authority area will receive about £3.8 million of additional funding from April 2011 to help them tackle deprivation.

The pupil premium will be worth £625 million in 2011-12 and build to £2.5 billion in 2014-15. That is significant spending to help the most disadvantaged children in society. To ensure that the premium is introduced as smoothly as possible, we have made the indicator for next year known eligibility for free school meals, which my hon. Friend the Member for West Worcestershire mentioned. In future, we aim to include those who have previously been eligible for free school meals so that not only the value of the premium but the number of children eligible for it will rise year on year. Overall funding for the pupil premium will rise from £625 million this year to £2.5 billion in three years’ time.

My hon. Friend the Member for Redditch will appreciate that I am unable to pre-empt the findings of the funding review, and I know that she will be disappointed about that. However, I hope that she and my hon. Friends will take in good faith a commitment from me carefully to study the issues that they have raised in the context of the school funding review and in our consultation later this year.

Question put and agreed to.

Sitting adjourned.