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Schools: National Funding Formula

Volume 628: debated on Thursday 14 September 2017

In my statement to the House on 17 July, I set out my Department’s plans to increase spending on schools by £1.3 billion over the next two years, on top of our existing plans. I said that that would mean that we could press ahead with introducing a national funding formula for schools and high needs from April 2018 that would provide a per-pupil cash increase in respect of every school and every local area, and would also maintain the overall budget in real terms, per pupil. I promised to return to the House in September to set out the Government’s final decisions on introducing fairer funding in full, and today I am doing just that.

This is an historic reform. It means that, for the first time, the resources that the Government are investing in our schools will be distributed according to a formula based on the individual needs and characteristics of every school in the country. Not only will the national funding formula direct resources where they are most needed, helping to ensure that all children can receive the high quality education that they deserve, wherever they live; it will also provide that money through a transparent formula, which will mean greater predictability. By clearly setting out the sums that we are directing to different aspects of the formula—to the basic amount per pupil, or to children with additional needs—it allows for properly informed debate on this vital topic, something that the existing opaque system has held back.

The need for reform has been widely recognised across the House and beyond. The National Association of Head Teachers has said:

“A revised funding formula for schools is essential”.

The Association of School and College Leaders believes:

“The way in which funding has been distributed to schools has been flawed for many years... Reform of the school funding system is vital”.

The case is so strong because there is manifest unfairness when Coventry receives £510 more per pupil than Plymouth, despite their having equal proportions of pupils eligible for free school meals, and Nottingham attracts £555 more than Halton, near Liverpool in Cheshire. Addressing those simple but damaging inequalities will represent the biggest improvement in the school funding system for decades. It is a step that previous Governments have failed to take for far too long.

It has been vital for us to take account of a broad range of views when making such a significant reform. Our wide-ranging consultations, both in 2016 and earlier this year, allowed us to hear from more than 26,000 individual respondents and representative organisations. I am grateful to everyone who took the time to share their views and respond to the consultations, including many Members on both sides of the House. We have considered all those responses carefully.

As I said to the House in July, I am putting an additional £1.3 billion into core funding for schools and high needs, so that the overall budget will now rise by about £2.6 billion in total, from almost £41 billion in 2017-18 to about £42.4 billion in 2018-19 and £43.5 billion in 2019-20. Building on this firm foundation, I can today set out the final funding formulae we will introduce, which, over the next two years will mean we will deliver on our manifesto pledge to make school funding fairer and ensure that we deliver higher funding as well in respect of every area and school.

Building on our consultation proposals, as I set out in the House prior to the summer recess, I am increasing the basic amount of funding that every pupil will attract. We recognise the challenges of the very lowest funded schools so will introduce a minimum per pupil funding level. Under the national funding formula, in 2019-20 all secondary schools will attract at least £4,800 per pupil. Today I can announce that all primary schools will attract at least £3,500 per pupil through the formula in 2019-20. And the formula will provide these levels of funding quickly: secondary schools will attract at least £4,600, and primary schools £3,300, in 2018-19, and then the full amounts the following year.

I will also provide a cash increase in respect of every school. Final decisions on local distribution will be taken by local authorities, but under the national funding formula every school will attract at least 0.5% more per pupil in 2018-19, and 1% more in 2019-20, compared with its baseline. Many schools will, of course, attract significantly larger increases under the formula: up to 3% per pupil in 2018-19, and a further 3% per pupil in 2019-20. And the minimum per pupil funding level will not be subject to this gains cap, delivering particularly fast gains in respect of the very lowest funded schools.

Our consultation confirmed the importance of funding for additional needs—deprivation and low prior attainment. We know that these factors are our best way to identify the children who are most likely to fall behind, and to remain behind, their peers, and it is only right that we provide the greatest resources to the schools that face the greatest challenges. As I said in July, we will protect the funding the formula will direct towards additional needs at the level proposed in our consultation, and I can therefore confirm today that total spending on additional needs will be £5.9 billion.

As we proposed in December, we will distribute that funding more fairly and in line with the best available evidence. We will use a broad measure of deprivation to include all those who are likely to need extra help, and we will increase the proportion of additional needs spending allocated on the basis of low prior attainment, to give additional support to those who might not be economically deprived but still need help to catch up.

I can also confirm today that, as we proposed in December, the national funding formula will allocate a lump sum of £110,000 for every school. For the smallest, most remote schools, we will distribute a further £26 million in dedicated sparsity funding. Only 47% of eligible schools received sparsity funding in 2017-18 because some local authorities chose not to use this factor. Our national funding formula will recognise all eligible schools.

Our formula will rightly result in a significant boost directed towards the schools that are currently least well funded. Secondary schools, which would have been the lowest funded under our December proposals, will now gain on average 4.7%. Rural schools will gain on average 3.9%, with those schools in the most remote locations gaining 5%. Those schools with high numbers of pupils starting with low attainment will gain on average 3.8%.

As I set out in my statement in July, to provide stability for schools through the transition to the national funding formula, each local authority will continue to set a local formula, which will determine individual schools’ budgets in their areas in 2018-19 and 2019-20, in consultation with local schools. This mean that the school-level allocations from Government I am publishing today, alongside this announcement, are notional allocations which we will use to set the total funding available for schools in each area. As I set out in the House, schools’ final actual funding allocations for 2018-19 and 2019-20 will be based on that local formula agreed in their area by the local authority, and schools will receive that allocation ahead of the new financial year, as normal. I will put copies of both documents in the House of Commons Library, and the Lords.

Our objective to provide the best education for every child places a particular focus on the support we offer to the children who face the greatest barriers to success, and on the high-needs budget that provides that support. The case for reform of high-needs funding is every bit as strong as the case for school funding reform, and therefore the move to a national funding formula is every bit as important. We set out full proposals for the introduction of a high-needs national funding formula last December, alongside our schools formula, and I am today confirming that we will proceed with those proposals.

Thanks to the additional £1.3 billion investment I announced in July, I can increase funding for high needs so that I will also be able to raise the funding floor to provide a minimum increase of 0.5% per head in 2018-19 and 1% per head in 2019-20 for every local authority. Underfunded local authorities will receive up to 3% per head gains a year for the next two years, to help them catch up. That is a more generous protection than we proposed in December, to help every single local authority maintain and improve the support it offers to some of our most vulnerable children. It means that local authorities will see a 4.6% increase on average in their high-needs budgets.

The additional £1.3 billion we are investing in schools and high needs means that all local authorities will receive an increase in 2018-19 over the amount they plan to spend in 2017-18. Local authorities will take the final decisions on distributing funding to schools within local areas, but the formula will provide for all schools to see an increase in funding compared with their baseline.

In conclusion, the new national funding formulae will redress historical inequities in funding that have existed for far too long, while also maintaining stability so that schools and local areas are not disadvantaged in the process. After too many years in which the funding system has placed our schools on an unfair playing field, we are finally making the decisive and historic move towards fair funding.

The national funding formulae for schools and high needs and the increased investment we are making in schools will help us continue to improve standards and create a world-class education system. No one in this House should accept the system as it has been; it has perpetuated inequality and that is unacceptable. I am proud that it is a Conservative Government who are now putting that right. On this firm foundation, we will all—Government and schools, teachers and parents—be able to build a system that finally allows every child to achieve their potential, no matter what their background, or where they are growing up.

Once again on the last day before a recess we see the Secretary of State sneak out new policy. [Interruption.] I would hardly call that once in a national debate, but I wonder whether this statement has been put out today to try and hide and to distract from the fact that the Government are ripping up the rulebook on democracy, as they did yesterday in the debate on tuition fees. But of course, if this is a genuine change of heart, it is welcome. After all, the Secretary of State will be taking her policy directly from the pledges in the Labour party manifesto. Ever since she took office, we have been urging her to keep the promise her party made in 2015 to protect funding in real terms for every pupil.

Will the Secretary of State guarantee to the House that no school will be even a penny worse off in real terms—not cash terms—as a result of this funding formula? Will the proposal apply from this year or from 2015? The National Audit Office has found that schools have already lost nearly £2.7 billion since her party made that pledge. Members across the House have heard from schools that are already facing those cuts and that have had to beg parents to help them to find money and resources. Will she admit to the House that her announcement today does nothing to reverse those cuts and keep that promise?

The Secretary of State has said that her funding formula will increase per pupil funding by 0.5% a year until 2020, but the Education Policy Institute has found that in that period, inflationary pressures are over 2%, so will she admit that her funding formula will in fact mean a real-terms cut in school budgets? In today’s statement she says that the formula provides “a per pupil cash increase in respect of every school and every local area”, so will she admit that there will be pupils, schools and local authorities that see a real-terms cut in funding by 2020? She has referred to transitional protections offered to schools. How long will the transition period last? Will it include protections against losses during that transition, and for how long will those protections last?

The Secretary of State said that the basic amount allocated to each secondary school pupil will be “at least £4,800 per pupil”, but the Education and Skills Funding Agency guidance describes this an “optional” part of the funding formula. Will she guarantee that all secondary schools will now receive £4,800 per pupil? Can she tell us how much this increase in the basic per pupil funding rate will cost each year, and how she will fund it? Today’s announcement says that the minimum funding per primary school pupil will be £3,500. In December, the proposed basic per pupil funding in primary schools was £2,712, so again I ask: how much will the increase in basic per pupil funding cost, and how will it be funded?

None of the money announced so far is actually new money for education. Instead, the Secretary of State is simply cutting elsewhere to fill the black hole that the Government have created. Can she confirm that over £300 million of the supposedly new funding for schools has actually come from cutting the healthy pupils fund by over 75%? That money was meant to be ring-fenced for school sports, healthier meals, facilities for disabled pupils and mental health provision, and it is only days since the Prime Minister claimed that this would be her new priority. Only in February this year, the Secretary of State promised in a statement that the fund would not fall below £415 million. Will she now apologise for breaking yet another promise?

This leaves another £100 million that must come from her main capital budget. Where will that come from? She has said that she will “reprioritise” £250 million in 2018-19 and £350 million in 2019-20. Where will those cuts fall? She has also said that she will “redirect” £200 million from “central programmes that support schools on relatively narrow areas of their work”. Will she tell us what those programmes and those narrow areas are? Or is the truth that she simply made up that number, hoping that her civil servants can find more cuts?

The July announcement went no further than 2020. What happens then? I will be glad if the Secretary of State has listened to us, and to parents and teachers across the country, and looked again at the funding formula, but the fact is that this does not meet the promises that she has made. When will she return to this House with the funding that her party promised the electorate?

I want to start by adding a massive thank you to the Department for Education officials who have worked on this for many years. It has been a complex piece of work, and it has been looked at under many Governments. I want to put on record my thanks to the team.

On the points raised by the hon. Member for Ashton-under-Lyne (Angela Rayner), I had hoped, given the cross-party recognition of the need for school funding reform, that there might be a warmer welcome for this announcement. It is not just schools represented by Government Members that will gain from it; many in Opposition Members’ constituencies have been equally underfunded. This is not a political issue; it is a question of ensuring that we fund children, wherever they are growing up in our country, in a consistent, transparent and fair fashion. That is what we are shifting towards today. This is not an uncomplicated thing, and we have worked really hard to make sure that schools that were already well funded will continue to remain well funded. However, this is also about making sure that schools that have traditionally been underfunded for a very long time can now start to catch up.

The hon. Lady asked a few questions. I think she misunderstood my point about ensuring that there is a minimum per pupil funding rate of £4,800 for secondary schools and £3,500 for primary schools. There are not many schools that are not at that minimum funding rate, but it is important for those that are below it that we address those issues through the consultation response. That is what we are doing today—[Interruption.] The hon. Lady asks what the guidance says. That guidance is for local authorities, as I have explained and as I hope she will understand. Local authorities currently set local formulae. We had already said, and I had hoped she might have recalled, that that will continue for 2018-19. When I came back to the House in July this year, I set out that that would also continue for 2019-20 because we believe that the right way to bring in a significant change in school funding is to work with local authorities. As part of the setting out of the final funding formula, we also set out a small but important element of flexibility for local authorities to respond to the changes as they come through and to nuance them to take account of local issues. That is where the optional element comes in. We are simply saying that it is right to give local authorities a modicum of flexibility to ensure that they can use the funding effectively on the ground.

We are being clear-cut about what the funding formula allocates to every single school in this country, and Members will be able to see those allocations. They will be able to sit down with their local authorities, and if they want the funding to go to those schools they will be able to ensure that it does. I expect that some local authorities will feel that the right thing to do is to get on with putting the funding formula in place at local level and that they will simply pass the money straight through to the schools. That is something that I would support, but it is important to have a small amount of flexibility while the formula comes in.

The hon. Lady asked about the fact that we are putting an extra £1.3 billion of additional funding into the core schools formula and budget. I felt it was important to do this. Over the past few years, we have challenged schools to try to find efficiencies, because we want to get the most out of every pound we put in. However, it is also important that I challenge the rest of my Department to do the same kind of exercise that we are asking schools and headteachers to do. I believe that doing that has enabled us to free up some additional resourcing that we can now push directly to headteachers in the frontline. Frankly, I am staggered that the hon. Lady thinks that that is a bad thing to do. Anyone in my role should be challenging their civil servants to try to work smarter and more efficiently to get money directly through to the frontline. That is yet another example of the hon. Lady doing nothing other rant and produce rhetoric, and there is not a lot of thought behind that rhetoric about what is the right thing to do.

With that, I will sit down. I look forward to the contributions from hon. Members.

I strongly welcome this announcement, particularly the help for the disadvantaged. This is social justice in action, and I look forward to discussing the measures with my right hon. Friend when she comes to the Education Committee on 25 October. Has an assessment been made of how much the pupil premium helps disadvantaged pupils in particular? How will the pupil premium sit alongside the national funding formula?

We have been clear about protecting the funding that is going to the children we want to be able to catch up. Both the Education Endowment Foundation and Ofsted have done important, insightful work on the use of the pupil premium. It is important that we get the most out of that investment, and I think we are steadily understanding what works to help children who are falling behind to catch up. The transparency in the new formula means that we can now take a similar approach on helping children catch up with the other money flowing through the core schools formula. In time, we can have a common strategy across the two budget elements. One of the most important things that we did in education in the previous Parliament, other than our general push to raise standards, was to identify that we needed to put funding against children who are at risk of falling behind, because that is how we will drive social mobility through education.

In the Secretary of State’s original funding formula proposals, schools in Durham were projected to lose up to £1,000 per pupil. Even with the additional resources, which are welcome, many school budgets in Durham will, at best, flatline. Will the Secretary of State guarantee today that no school in Durham will face a real-terms cut? In addition, when will she address the urgent need to rebuild many of our schools?

First, as I set out today, there will be a minimum 0.5% cash increase per pupil for all schools in 2018-19, increasing to 1% by 2019-20, and that settlement is actually more generous than the Opposition manifesto commitment. Those schools are now doing better under our funding formula.

Secondly, we are investing huge amounts in our schools estate, not least through the condition improvement fund. We have managed to get ahead of the school places crisis that was left to us by the previous Labour Government. Ensuring that we have the school places in our system that children need is a major thing that we have done.

I welcome the changes to a system that was unfair, opaque and out of date. I am glad that the Secretary of State has listened to the headteachers, the governors, the MPs and the parents, who have asked that no school should be left behind and that those that have been dramatically underfunded should be able to catch up within two years, and I am glad that she has lifted the cap on the transition. Lastly, I recognise that quality of teaching is also important in addition to the funds, and I hope that teachers will recognise that this increase in funding acknowledges their contribution to the education of all our children.

My hon. Friend is right that it is important that schools that have been underfunded for years while being held to account on exactly the same standards as every other school can catch up properly. As for the quality of teaching, the continued professional development of teachers and the teaching profession is an intrinsic part of school improvement and the two are inextricably linked. Today, we have announced the first successful bids to our teaching and leadership innovation fund, which is about ensuring that we lift up our teaching profession and is particularly directed towards schools in parts of the country where we know we can do better.

Will the Secretary of State guarantee that no Liverpool school will receive a real-terms cut? Although the discretion given to local authorities is welcome, will she also guarantee that that will not lead to Liverpool City Council being blamed for a cut coming from central Government?

The Institute for Fiscal Studies has been clear that our £1.3 billion additional investment will lead to the per pupil core schools budget being protected in real terms, which is good news. As for the schools the hon. Lady mentions specifically, we will ensure that all Members get the breakdown of the notional allocations. I expect some local authorities to choose simply to reflect the national funding formula at a local level, but that will be a matter for them. I am sure that Members from across the House will want to have those discussions at a local level.

I warmly welcome my right hon. Friend’s statement and look forward to additional financial resources for Stockport’s schools. Much of the previous concern about school funding centred on the proportion of the basic amount per pupil, so will she comment further on that aspect of the new national funding formula?

The basic amount will be going up and the proportion is broadly stable, but the bottom line is that the £1.3 billion extra in the core schools budget is principally going through that per-pupil amount, which is why it has been raised overall, and why I have chosen to protect the amount for additional needs.

At a meeting with the National Association of Head Teachers this week, headteachers told me that they face a teacher recruitment crisis, a school budget crisis and endless tinkering with assessment and the curriculum. Will the Secretary of State tell the House which of those she would like them to deal with first?

As I said at the beginning of my statement, the NAHT welcomed the move to fair funding. As for teacher recruitment, part of the answer is to ensure that we are investing in teachers, and the NAO was clear that the Department is taking steps to ensure that we do just that.

I thank Ministers for meeting senior headteachers from my constituency, and for responding to their principal request, which is that to be truly fair to pupils across the country, and to cover school costs properly, school funding should include a minimum amount per pupil, wherever they live. I also thank Ministers for allocating £4,800 per pupil from 2019, which is exactly the amount that my headteachers recommended. Does that not show that this Government are not only listening, but acting?

We have listened carefully and have had meetings with many Members from across the House. I pay tribute to my right hon. Friend the Minister for School Standards for holding many of those meetings alongside me. My hon. Friend the Member for Congleton (Fiona Bruce) and other Cheshire MPs have been tireless campaigners on behalf of their local communities and schools, and I have appreciated the comments, suggestions and proposals. They carried weight, which is why they have been reflected in the final funding formula that I have set out today.

The shadow Secretary of State is absolutely right, because she listens to the voice of headteachers; 100 headteachers came to Parliament earlier this week and told heartbreaking stories of having to sack teachers and teaching assistants. One headteacher had had to sack the caretaker and, because he could not afford to replace them, was having to do some of the caretaker’s duties himself.

I want to correct the Secretary of State. The NAHT said today that, while progress on the funding formula is welcome, “at least” £2 billion in additional resources is necessary, without which they will have to

“cut staff, narrow the curriculum, remove pastoral support”,

and many will have to close down after-school clubs. Despite the progress on the funding formula, the simple truth is that the Government are still letting down this country’s children.

I strongly disagree with the hon. Gentleman. We are putting additional money into our schools. Over the next few years, as I have said, the schools budget will rise by £2.6 billion. The Institute for Fiscal Studies has made it clear that, over the remaining years of the spending review, we are now protecting per-pupil funding in real terms. It is easy to focus on spending, which is of course important, but we are more interested in results, and the results in English schools are that standards are going up, not least due to the hard work of our teachers, results are getting better and outcomes for young people and children are getting better. That is something we should all talk up, rather than talk down.

Of course over in Wales, where Labour is in charge, it is a very different situation, with that country slipping down the international league tables on education.

I welcome the engagement of the Secretary of State and the Minister with responsibility for schools in this process over many years. Lincolnshire, as the Secretary of State knows, is one of the most challenged areas when it comes to school funding, but will she confirm that this new funding formula pays particular attention to the kind of challenges that we see in coastal communities? As she knows, coastal communities face unique challenges in recruiting teachers because half the catchment area is the sea.

My hon. Friend is absolutely right. That very point was made to me in Scarborough, which is one of our opportunity areas. The situation is exacerbated by the very different funding levels of different schools, which of course has knock-on effects on the amount of staffing that schools are able to provide. The formula’s consistency will put us on a much firmer footing.

Sutton has excellent schools and teachers, but it is a London borough with a very high cost of living—higher as a result of Brexit-driven inflation. Now that the Government have breached the pay cap for police and prison officers, and as they could not defend NHS pay levels yesterday, do they agree it is time to fund a proper pay rise for teachers, to reward them for their professionalism and to help them address the pressures of cost of living increases?

The right hon. Gentleman may be aware that we accepted the recommendation of the School Teachers Review Body, an independent review board that considers all the evidence provided not only by the Government but by the unions, labour economists and all sorts of interested stakeholders. The review body made its proposal to me earlier in the summer, and I accepted it. I have no doubt that, when the review body next assesses teachers’ pay, it will continue to consider recruitment and retention alongside affordability, which is quite right.

I welcome the Secretary of State’s announcement of the retention of local authority discretion for the next two years, which will assist my village schools, many of which are sparse but not quite sparse enough. Can she reassure me that, at the end of that two years, the level of funding that those village schools receive will effectively become baked in as the baseline for future funding and that they will not face some kind of cliff edge in the funding formula?

Today I have set out the new funding formula for schools. We will have a transition period, during which local authorities continue to have the ability to allocate at local level, but we have made it clear that we are setting out the amounts that we think schools should get. That is the whole point of this process, which does reflect sparsity. We have more work to do to ensure that we reflect sparsity more accurately over the coming years, as I have set out in the funding formula document, but this is a step in the right direction. I fully expect that, over time, we will continue to get better and that we will move to an even more accurate approach to sparsity.

Seven years ago there were two secondary schools in Spennymoor. Now there is only one, and no children went into the sixth form this September, which obviously puts its future into question. Surely the truth is that because the Secretary of State has been able to win only £1.3 billion and not £2.7 billion, she will not be able to give those children in Spennymoor the future they should have.

That is not correct. As the hon. Lady admits, we are putting additional funding into the core formula, which is part of this Government’s strategy to raise standards. Alongside that, of course, we have improved the curriculum, and the new GCSEs are successfully starting to roll out this year. As we debated yesterday, importantly, more and more of our young people are going to university. Record rates of disadvantaged young people are going on to higher education. We are moving in the right direction, but there are still parts of the country that have not reached the level and achieved the standards we want for our young people. That is why I have committed to having opportunity areas to lift up places that have perhaps faced the most difficult challenges. That is part of a broader push from the Government, and from me as Secretary of State, to ensure that we truly lift all parts of our country to reach the best standards of education for children.

I very much welcome what the Secretary of State has said today. Northamptonshire has been underfunded in the past. What particular consideration will be given to areas that receive significant housing growth in the years ahead?

We built a growth factor into the formula. We believe the formula will address growth better than the current system, which simply considers historical data. We will make projections and seek to compensate local authorities on the basis of accurate data, rather than just pure long-term historical projections, and that is important. It is one of the many reasons why this is a good step forward.

The Secretary of State has to accept that taking £2.7 billion out of education since 2015 and putting £1.3 billion back in leaves a £1.4 billion hole. That means schools are missing out. Will she undertake to write to every Member of the House with the per-pupil funding for each school, comparing the 2015 funding with the outcome of today’s announcement?

We will be publishing a lot of data following this statement; the hon. Gentleman will have more than enough to look at. The point of introducing a funding formula is to make sure that schools that have been underfunded can start to catch up and to provide stability for better-funded schools. That is precisely what we are doing, and I am proud that we are able to achieve it.

I thank the Secretary of State and the Minister with responsibility for schools for sending officials to Cheshire to understand some of the problems faced by my schools, which were some of the worst funded in the country and are members of the f40. Will the Secretary of State praise the work of Edward Timpson, my former colleague, who worked incredibly hard to ensure that deprivation funding is reflected in the formula, and who fought valiantly on behalf of his constituents in Crewe and Nantwich?

I will pay tribute to Edward Timpson. He was a fantastic Minister and is much missed in the House.

We work extremely hard, as a Department and as a group of Ministers, to listen to the very different views of colleagues in trying to achieve a national formula that works for very different schools and communities across the country. We have taken a big step in launching the formula today, and I am grateful for the contributions of all Members.

One headteacher in my constituency told me, “The current funding situation means that sixth forms and colleges across the country will find it increasingly difficult to offer the range of subjects they used to and provide the number of teaching hours recommended to deliver courses over the two years.” A situation that leaves sixth forms unable to offer students what they need does not sound very fair because it is not fair. How is such an inadequate funding system in the interests of young people, employers or the economy?

The formula I set out today covers primary and secondary—up to 16. We are making sure that we continue funding post-16 colleges and A-levels, and the hon. Gentleman will be aware that we have gone beyond that. We announced an additional £500 million in the last Budget to help boost technical education, which will be of benefit not just to further education colleges, but to sixth forms and sixth-form colleges.

I thank the Secretary of State for coming to the House to sneak out an oral statement. She must have got the formula right, as so few Opposition Members are in the Chamber. She is also right to say that this is about not only funding, but the quality of education. She will know that my area has a number of inadequate schools and that the Education Fellowship Trust is a failing academy chain and is being replaced. The excellent Schools Minister is working hard on this issue, but it would help me enormously if I could be given an update, in due course, about progress on replacing that academy chain.

My hon. Friend raises an important issue for his local community. A lot of work has been done to make sure that those schools are put under the control of a trust that can make sure it gives the best to local children. I know the Schools Minister will be happy to meet my hon. Friend to update him on the latest situation.

Let me give one cheer to the Secretary of State for at long last addressing the national formula. Will she give due credit to the f40 group, which has for a generation been arguing for this very change? I welcome the emphasis on sparsity, but will she re-examine the issue of using free school meals as a denominator of deprivation in rural areas? It has never been a good measure, and it never can be one because of the stigma associated with free school meals. Will she consider other formulae that are now available to make sure that we get proper representation in rural areas when the budget is settled?

I welcome the hon. Gentleman’s welcome for the introduction of the funding formula. He is right to say that identifying deprivation is more complex than just looking at free school meals. That is why this formula includes the additional element of an index that looks at child deprivation in particular: the IDACI—income deprivation affecting children index. That index is already used by many local authorities, and it is an aspect of how we are assessing the deprivation factors that are built into this formula. I hope he will welcome that.

Let me congratulate the Secretary of State on her statement and say how much it will be welcomed in Torbay, where schools have been underfunded for some years. When the last set of figures was published, I found that a number of people felt that the formula would not be of benefit because of some things that they had been told by unofficial groups. What efforts will be made to ensure that schools, particularly in places such as Torbay, hear about the real impact of this new formula?

We will be writing to every MP in this House with details about their local schools. I hope that they will be able to share those with local headteachers, and of course the local authority will consult on how then to spread that funding. It is vital that schools, and indeed parents, have the facts and are not given misleading information. It is important that we recognise that more funding—record funding—is now going into our schools system and that we focus equally on the standards we are getting in relation to that investment.

I congratulate my neighbour, my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), on the sterling work she is doing to really shine a light on some of the problems in education today. I do not think it does the Secretary of State any justice to come to the Dispatch Box and be so condescending to a colleague on the other side of the House. Would it not make sense for the Government to look at where money is being lost from the system? In my constituency, a university technical college has closed its doors at a cost of £14 million to the taxpayer while a free school has closed at a cost of £4 million. The two closures have resulted in 300 pupils being displaced. Should that not be the focus of the Government’s attention?

We do take action when we see schools that are not delivering for their pupils. Overall, that has borne fruit over the past few years, which is why Ofsted now grades nine out of 10 schools in our country as good or outstanding—that is significantly more than was the case in 2010. I would have hoped that the hon. Gentleman welcomed that, but I can assure him that where we see schools failing, we are taking action.

Mums and Dads in Barton Seagrave in Kettering have been alarmed by a recent Lib Dem newsletter which, under the title “Education Meltdown”, says that

“the Tory Government still plans to go ahead with its new school funding formula which could mean that by 2019 our local schools will face cuts of up to £543 per pupil”.

It goes on to state that

“the threatened loss to each school”

is as follows: Barton Seagrave Primary, £185,000; Latimer Arts, £485,000; and Southfield Girls, £416,000. Is it not simply outrageous to circulate such misleading and inaccurate information? Is it not clear that the Lib Dems have been caught red-handed peddling untruths?

The Lib Dems have been caught red-handed and frankly it is a disgrace for them to put out such misleading “facts” to parents. Indeed, only one party of the two is against extra funding for schools, and that is the Lib Dems, because clearly they are against the national funding formula, which is directing additional funding to my hon. Friend’s community.

I warmly welcome the Secretary of State’s announcement and share her dismay and disappointment that Labour Members seem incapable of saying anything positive about it. Perhaps that is because they utterly failed to tackle this issue when they were in government. It is the Conservatives who have done this, and I want to thank her for listening to me and to other Devon MPs who have made representations. I also thank the hard-working teachers and staff of schools in my constituency. Will she confirm that the historical unfairness that has seen Devon schools underfunded will be tackled as a result of this announcement?

This formula makes a big difference to schools in Devon. My hon. Friend has been a tireless campaigner for his local community in setting out the views of teachers and parents in Devon. This formula will mean that Devon schools gain, and I am proud that we are finally rectifying the unfair funding that so many schools have had to put up with for so long.

I congratulate my right hon. Friend on delivering yet another of our election manifesto commitments. As a fellow London MP, she will know that we are affected by twin aspects in London. The first is rising rolls and young people needing a school place. Despite expanding a number of schools and delivering more new schools, that is ever a pressure. The second relates to those children who come in with English as an additional language—this situation is widespread. In the schools in my constituency, at least 161 different languages are spoken. Will she commit to keeping the funding position under review to make sure that additional resources are provided to deal with the expansion in the number of children in schools, so that per-pupil funding is not diluted?

My hon. Friend will welcome the fact that the Institute for Fiscal Studies has made it clear that the amount of funding we are now putting into our schools does protect per-pupil funding in real terms. He is right to mention school places, as the estimate is that between 2015 and 2020 we will need an additional 600,000 extra school places, which is why we are investing so much in building new schools and expanding existing schools. I can assure him that we are very clear about where those pressures are, and we will seek to work with communities, MPs and local authorities to make sure that good school places are available for every child in our country.

This package of changes without doubt represents an improvement for West Sussex schools and I welcome it. Will my right hon. Friend confirm that she has been able to fund this improvement while still supporting the creation of new schools where they have been announced?

Indeed, we have a very strong pipeline of schools under construction as well as ones that have been agreed, which will go ahead. As I have set out, we need to make sure that we keep ahead of the need for more places in the coming years, which is why we will be having more free schools and working with existing schools to see them expand, too.

I congratulate the Secretary of State on delivering yet another manifesto pledge, and I commend both her and the Schools Minister for their hard work in this area. Was she as disappointed as I was with the tone of Labour Front Benchers in response to this statement. Not only does this formula help historically underfunded areas such as mine, but it will help across the whole country, importantly, by dealing with additional needs and looking at deprivation, too.

Absolutely. In some areas we should be able to set politics aside and work broadly on what we think is the right solution for our country as a whole. That is exactly how I have tried to approach this issue. I have welcomed the engagement we have had from all parties, including some Labour MPs—I just hope that that can transfer steadily to the Labour Front-Bench team. Perhaps it would be helpful just to have some transparency with a simple confirmation from the Labour Front-Bench team on whether they think this is a good funding formula. If they think it is not, they should be clear about whether they would rescind it should they get into power.

I thank my right hon. Friend and her team for grappling with a formula of labyrinthine complexity that penalised my constituents in Cheltenham and for listening to me and others and then revisiting the original iteration, which many of us thought needed further attention. The new formula means that per-pupil average funding for secondary schools in my constituency will rise from around £4,200 to £4,800, and that will change lives in Cheltenham. Does my right hon. Friend agree that it is important to recognise that the average in many Labour seats will continue to be higher than £4,800? In those circumstances, it seems somewhat churlish for Labour Members to have responded as they have.

I do agree with my hon. Friend. I would like to take this opportunity to pay tribute to him for all he has done in his local community and, of course, with the f40 group to help to improve the formula and to make sure that what was, as he says, an incredibly complex piece of work ended up in the right place. We have today a strong national funding formula that can work for some very different schools and communities throughout the country, and I am proud that we are finally able to launch it.

So often in this place one campaigns about historical underfunding but nothing happens, because it is all too difficult, so I have hung around this afternoon to thank my right hon. Friend. We have campaigned for rural schools for years, and she is now giving them 3.9% more. In Lincolnshire, we have many very small schools with under 100 pupils, and even some that traditionally have fewer than 50. My right hon. Friend has announced another 5% for schools in the most remote locations. Will that help counties such as Lincolnshire that have a sparse but evenly distributed population?

The new formula will help those sorts of schools. We made a minor but important adjustment in the formula to make sure that it works for the very, very smallest schools, which otherwise might not have gained in the way we wanted them to. I hope that that is good news for my hon. Friend.