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Education Funding: Cheshire

Volume 654: debated on Wednesday 13 February 2019

I beg to move,

That this House has considered education funding in Cheshire.

It is a real pleasure to serve under your chairmanship, Mr Hosie, and I am grateful to the Minister for being present to respond to this important debate. I am also grateful to the Secretary of State for agreeing to meet headteachers in my constituency, and I am delighted to be joined by my hon. Friends the Members for Congleton (Fiona Bruce) and for Eddisbury (Antoinette Sandbach), who share my concerns about this important matter—I know that there might not be enough time for my hon. Friend the Member for Congleton to make a full speech, because this is only a short debate. I also notice that friends from across the House are present, including the hon. Member for City of Chester (Christian Matheson).

I acknowledge the support that has been provided nationally to date, including the £1 billion increase in funding, the extra support for teachers’ pay and pensions and for capital spend, and the increase in overall education funding since 2010. However, increases in costs are outstripping that extra funding, and there are discrepancies and differences in school funding in different parts of the country. The funding of Cheshire’s schools is, and will be, seriously negatively impacted by its geography, rurality and perceived needs, or lack of needs. We will explain some, and hopefully most, of the key issues in the time that we have, so that if the Minister does not have time to go through everything, he will be able to meet us and address those funding shortcomings.

First, Cheshire East Council is considering its three-year budget forecast to 2020-21 and its calculations for its maintained schools, and it says that by March 2021, 50% of maintained schools in the borough will be reporting a deficit in excess of £100,000. The total forecast deficit will equal £9.2 million—that is 10% of those schools’ funding—which will affect 38 schools in the borough. Cheshire’s national funding formula consultation identified cost increases of 8% from 2016-17 to 2019-20, but funding in Cheshire East has only increased by approximately 2%. As the lowest-funded authority, our schools already have lean budget plans, which makes addressing those pressures even more challenging than in other areas. The current national formula is shifting resources away from areas—such as Cheshire East—with relatively low deprivation levels, reducing basic funding levels and not leaving enough to run the schools.

Under those conditions, it is not possible in Cheshire East to meet the headline minimum per pupil levels in all cases. Where school deficits are exceeding £100,000, schools will have to look at reorganising, whether that means creating federations or possibly closing. That will not meet the needs of families and children in Cheshire East, because the money will be diverted into transportation to get children to their schools. The pressures on special educational needs services continue to grow, particularly given the contribution of £6,000 that schools need to make. I have been told that because of that contribution, some schools might refuse to take children with special educational needs, or that schools that are all-inclusive and do accept those pupils will face an extra strain on their budget.

Presumably, the right hon. Lady was sitting at the Cabinet table in July when the latest school funding formula was discussed. I do not know whether she made representations to the Chancellor at the time, or even pressed the Cabinet for a vote, as there are well-documented claims that she did in the case of Brexit. We share some of her analysis of school funding cuts, but this matters when it comes to the Division Lobby, and in the right hon. Lady’s case, when it comes to her collective responsibility as a member of the Cabinet.

As the hon. Gentleman will know, the fact that the extra £1 billion was put in place was particularly due to the pressure applied by my hon. Friends the Members for Congleton and for Eddisbury. As I only returned to the House at the 2017 election, I too applied pressure, because I think it is vital that schools get the money they need for education. For me, education is one of the key building blocks of social mobility that every child needs, so I did indeed make sure that we pressed for further funding. I would like that to be on the record.

Does my right hon. Friend agree that the pressure that was put on by my hon. Friend the Member for Congleton and myself, and indeed by other hon. Members who met with the Minister to ensure that a minimum level of funding was applied, resulted from the particular problems in Cheshire East and Cheshire West and Chester? Does she also agree that those problems are linked to the formula by which rurality is calculated, which is as the crow flies, rather than as the car or bus travels?

My hon. Friend is correct in what she says and in the work that she has done. I am glad that I have entered the House again, enabling me to unite with my friends and push these important points.

If the hon. Lady does not mind, I will continue a little bit further, because I do not have much time. This is only a 30-minute debate, and I know the Minister has to respond, so I want to raise a couple of key points about Cheshire West and Chester. However, I know that the hon. Lady has done a lot in this area, and has a lot of knowledge about it.

The key challenge in Cheshire West and Chester is that it is funded below the average of all local authorities, due to the emphasis in the national funding formula on funding areas of deprivation and areas with higher living costs. Under that formula, Cheshire West and Chester is funded at the minimal level of funding for all local authorities for early years provision, meaning provision for three and four-year-olds. In 2018-19 and 2019-20, Cheshire West and Chester has received the minimum 0.5% increase in school core funding, but in the same period, local government officers’ payment bills have increased by 5.6% and teachers’ pay costs have increased above the anticipated public sector pay cap. Spending is outstripping the funding that is going into that area, and as a result, Cheshire’s primary schools are now 44% less funded than London’s primary schools and its secondary schools are 49% less funded than in London.

My key questions to the Minister are as follows. Will he commit to look again at rural funding and address the discrepancy? Does he accept that the increase in costs is outstripping the increase in funding? Will he provide support when local authorities have to use independent schools to meet specific needs? Will he support Cheshire in creating additional special educational needs places, and provide capital investment to enable that to happen? Will he also look at the apprenticeship levy and whether it needs to be applied to schools, and if that is the case, make sure that the levy can be used in a wider context—maybe training, rather than just apprenticeships? Will he ensure that in the forthcoming spending review, he applies for more funds for the Cheshire area, now that he understands the discrepancies in funding in that area?

As I said, although we appreciate the money that has come in, when we look at how that money is filtering through, we see that there are still needs. Additionally, given the increase in housing and development in the Cheshire area that we all know about, considerably more pupils will be wanting to go to school. There are more children with needs in that area, including complex needs, and more demands are being placed on the local authorities of Cheshire East and Cheshire West and Chester. I appreciate that the Minister might not be able to give a full response to those questions today, but will he agree to a subsequent meeting, so that we can all work together to make sure that our area gets the right funding for its children?

I thank my right hon. Friend the Member for Tatton (Ms McVey) for allowing me to contribute to the debate, which we applied for jointly.

Before the debate, I wrote to every primary and high school headteacher in my constituency. All seven senior school headteachers, whether in free schools, academies or multi-academy trusts, sent a collective response stating that they cannot remember morale being so low, the main reason being the lack of funding into schools, and that standards—high in Cheshire East—will be adversely affected.

The heads asked me to bring four key messages to Parliament. I will quote their words, which are strong:

“The Government must stop misleading the country by stating that record amounts are being spent on education when”,

according to the Institute for Fiscal Studies, since 2010, in Cheshire East

“the amount spent per child has fallen in real terms by 8%.”

Secondly, they say:

“The Government must commit to an index linked approach to the national formula so that all schools are able to deal with changes that are outside of their control, such as increased employer NI and pension contributions”,

as well as underfunded pay awards and other cost pressures. They say that there has been a 10% rise in staff costs in our schools since 2017 alone. Their third and fourth points are:

“The Government must demonstrate that every school in the country will gain enough funding via the Age Weighted Pupil Unit to run a school regardless of the characteristics of its pupils.

The Government should provide a long-term commitment to educational funding in a similar manner to the National Health Service.”

A major issue, say the heads, is that schools go from year to year with no annual Government statements or decisions about school funding, so there is no long-term planning. That makes it impossible for heads to plan or budget for the future. I have known most of them for many years and, dedicated as they are, it is remarkable that they carry on under the relentless pressure they experience year on year. One says:

“the role of the Head Teacher is becoming an impossible responsibility to fulfil, due to significant constraints on the financial viability of schools.”

To quote the seven heads again,

“school finances in Cheshire East are in a terrible state, despite the NFF promises made in July 2017.”

The Schools Minister knows that that was when funding of £4,800 per secondary school pupil was announced as a result, as we have heard, of a sustained campaign by headteachers, including those in my constituency. In Cheshire East, however, the heads tell me that they are not receiving £4,800. Instead, they receive: £4,018 for every key stage 3 child, £4,804 for every key stage 4 child and £3,971 for every key stage 5 child. That represents a reduction of 1% each year since 2014. Overall expenditure on school sixth forms has fallen in real terms by 16.3% since 2014. Funding for 16 to 19-year-olds is now 21% lower than funding for 11 to 16-year-olds, which makes it very difficult to run a broad sixth-form curriculum.

What is the impact of such figures on our schools? The heads state:

“Pastoral support…cut or removed at a time when the need is greater than ever…Class sizes have increased to unmanageable numbers and teacher contact ratios have been increased…over what is acceptable. SEN needs of pupils are not being met as they should. Courses have been cut, especially at KS5…denying many young people the opportunity to study what they want to. The…potential closure of multiple post-16 institutions across Cheshire East…Schools are having to continually restructure at all levels…to save money”,

reducing support for young people and staff year after year. Many schools have recently undergone ICFP—integrated curriculum financial planning—reviews, as recommended by the Government. The independent advisers said they cannot see where any savings can be made without the impacts I have just listed.

My hon. Friend the Member for Macclesfield (David Rutley) also continues to work hard to support schools in his constituency. As a Minister, he is not able to participate in the debate, but I am grateful to him for having organised a meeting, as a local MP, with the Secretary of State. Before his ministerial appointment, my right hon. Friend the Member for Tatton, my hon. Friend the Member for Eddisbury (Antoinette Sandbach) and I were able to discuss with him the important issue of school funding.

I turn now to primary schools. Many heads wrote to me—too many to quote them all, so I will quote just some:

“Finding it impossible to balance our budget.”

“Costs continue to escalate outside of our control from NI increases, regrading for Living Wage, national pay rises for teachers and non-teaching staff, local government pension increases, cost of energy and utilities, and general inflationary pressures.”

“If a child starts my school after the first week in October, I will receive no funding for them until 22 months later.”

“SEND made up of a number of proxy factors, but 25% of this is deprivation. Just because you may have special needs, it doesn’t mean you’re deprived and...just because you’re deprived doesn’t mean you’re special needs...The current formula makes a postcode lottery out of special needs funding.”

“In 2019-20 in Cheshire East...39 out of 124 primaries will get less than last year. 31% of primaries will lose an average of 3-4%...The very small schools, such as rural schools, suffer further loses: 8 out of 16 small schools will get less than last year, with an average loss of over 8%”.

“The whole NFF formula needs to be revised...and…in Cheshire East schools actually receive just £2,928 for every primary aged child”—

not the £3,500 that they should get. Another head said:

“Funding for SEN is now at crisis point in Cheshire East.”

I want to finish with the comments of a new head, which moved me deeply:

“As a new Head, I have been overwhelmed by the constraints of our budget...We are particularly struggling with support for pupils with additional from the SEND Team at County has been limited because they are overspent and cannot afford to meet children’s needs...Services such as Special Needs, Safeguarding and Looked After are overspent and cannot offer the support and guidance that school and families need...The lack of funding in education in Cheshire is causing great hardship...It is heartbreaking to be supporting a child who needs alternative provision and to have to explain to their parents that there is nothing more you can do...If we don’t support our more complex children, we risk pupils being hurt, property being broken, and learning disrupted...We have a number of children suffering with mental health issues, and are witnessing self-harm”—

this is at primary-school age. They continued:

“We frequently find Health and Safety issues, but are unable to correct them because we don’t have the funds...I am also concerned that talented staff will leave the profession.”

I note that the petition for a longer debate on fairer funding had been signed by 1,424 of my constituents as of this morning. That is 1.5% of them. I will of course speak again in that debate on 4 March, because I have much more to relate from my teachers, but time does not permit today.

It is a pleasure to serve under your chairmanship, Mr Hosie, I think for the first time.

I congratulate my right hon. Friend the Member for Tatton (Ms McVey) on securing the debate. I pay tribute to her and to my hon. Friends the Members for Congleton (Fiona Bruce) and for Eddisbury (Antoinette Sandbach) for the way in which they have, over the past few years, brought the issue of school funding in their area to the Department, to me personally and to the Secretary of State. If I may say so, they have had a significant influence on the way in which the national funding formula has been implemented—

I will not give way, because of time, but I was about to say that Opposition Members have also brought the issues to the Department’s attention. I pay tribute to them, too, and to other hon. Friends who are not present at the debate.

This Government are determined to create a world-class education system that allows every child to achieve their potential, regardless of who they are or where they live. As well as improving standards and supporting teachers, we are investing money in our schools and helping them to make the most out of every pound they receive. We are also delivering on our promise to make funding fairer. The introduction of the national funding formula, the biggest reform of the school funding system for a decade, means that we are now directing money where it is most needed, based on schools’ and pupils’ needs and characteristics.

I want to start by emphasising the significant progress we are already making towards creating a world-class education system, thanks in part to our reforms: the attainment gap between rich and poor is shrinking; the proportion of pupils in good or outstanding schools has increased from 66% in 2010 to 84% now; and our primary school children have achieved their highest ever score on international reading tests. We have also launched 12 opportunity areas to drive improvement in parts of the country that we know can do better.

The Minister mentioned the improvement in standards. One example is the Sound and District Primary School, which improved the proportion of pupils achieving at key stage 2 from 70% in 2017 to 83% in 2018. Will the Minster deal with the suggestions about the index-linked approach and the age-weighted pupil unit funding that is the core of funding for every school, regardless of its particular characteristics, which my hon. Friend the Member for Congleton raised?

I will come to that point. I am sure other hon. Members would like to raise that as well.

To support the improvements in standards, and because children get only one chance of a great education, the Government have prioritised school spending, even while having to make difficult decisions on public spending in other areas. We have invested an extra £1.3 billion across 2018-19 and 2019-20, as referred to by my right hon. Friend the Member for Tatton, over and above existing plans set out in the previous spending review, so core funding for schools and high needs will rise from almost £41 billion in 2017 to £43.5 billion in 2019-20. Figures from the Institute for Fiscal Studies show that real terms per pupil funding for five to 16-year-olds in 2020 will be more than 50% higher than it was in 2000.

We can compare ourselves favourably with other countries. The UK spends as much per pupil on primary and secondary state education as any major economy in the world, apart from the United States of America. Although there is more money going into our schools than ever before, we absolutely recognise the budgeting challenges that schools face, and we acknowledge that we are asking schools to do more. That makes it all the more important that we do everything to ensure that we get the best out of every pound that we provide. One aspect of that is ensuring that that money is directed where it is most needed.

For the first time last April, funding was distributed to local authorities based on the individual needs and characteristics of every school in the country, not accidents of geography or history, as had been the case in the previous system, when schools with similar characteristics received very different levels of funding with little or no justification. Those disparities had persisted and grown for nearly a decade and left some schools and areas unable to get the resources they needed. That is why our commitment to reform the unfair, opaque and outdated schools and high needs funding systems was so important. I am very pleased to say that our introduction of the national funding formula delivers on that commitment.

Schools are already benefiting from the gains delivered by the national funding formula. Since 2017, we have given every local authority more money for every pupil in every school, while allocating the biggest increases to the schools that have been most underfunded. By 2019-20, all schools will attract an increase of at least 1% per pupil compared with their 2017-18 baselines, and the most underfunded schools will attract up to 6% more per pupil by 2019-20, compared with 2017-18. On average, schools in Cheshire East, including in the constituency of my right hon. Friend the Member for Tatton, will receive gains of 2.4% per pupil by next year, compared with 2017-18. That will mean an extra £10.4 million in total when rising pupil numbers are also factored in. On high needs, last December we announced that we will provide £250 million of additional funding across England over this financial year and the next. In Cheshire East, it means the local authority will receive an additional £1.6 million across this year and next, on top of the increases that were already promised.

We recognise, as I have said, the challenges faced by the lowest funded schools. We heard throughout the consultation, particularly from stakeholders in Cheshire East—I remember meeting headteachers that Members brought to the office—that we could do more to support schools that attract the lowest pupil funding. We listened carefully and have included minimum per pupil funding levels in the formula to guarantee that every school attracts a minimum amount of funding for every pupil, regardless of whether they have children with additional needs.

I am pleased that the council representing Cheshire East has chosen to use the transitional minimum of £3,300 for primary and £4,600 for secondary schools in its local formula in 2018-19. In 2019-20, the formula will provide for at least £4,800 per pupil in every secondary school and £3,500 for every primary. In Cheshire East, secondary schools in particular benefit from this measure with around half of secondary schools attracting extra funding as a result. We have not limited gains for schools benefiting from those minimum funding levels.

My right hon. Friend the Member for Tatton also raised the issue of rural schools. The national funding formula includes support for small schools, especially those in rural areas. It provides a lump sum of £110,000 for every school as a contribution to the costs that do not vary with pupil numbers, and that gives schools certainty that they will attract a fixed amount each year. The sparsity factor in the formula allocates additional funding of £25 million specifically to schools that are both small and remote. This year, seven schools in my right hon. Friend’s constituency attracted a combined total of £133,000 in sparsity funding.[Official Report, 19 February 2019, Vol. 654, c. 13MC.]

As for schools in Cheshire East that do not attract such funding either because they are not among the smallest schools nationally or they are not far enough apart to meet the distance threshold—something my hon. Friend the Member for Eddisbury raised—we have been clear that we want all schools to operate as efficiently as possible, and there is scope for rural schools in close proximity to work together to get the best value from their resources. None the less—this will please my hon. Friend—we keep the formula design under consideration and will consider feedback on specific factors when developing the formula. In particular, we appreciate that the straight-line distances used to determine eligibility for sparsity funding might not always be appropriate, given local geography, and we are considering how to refine the methodology for calculating sparsity eligibility in future. In the meantime, local authorities can submit a request to vary how distance is measured for sparsity funding allocations.

My hon. Friend the Member for Congleton also raised sixth-form funding. We recognise the pressure that post-16 funding has been under and we have protected the base rate of funding for all 16 to 19-year-old students until 2020. Our commitment to the 16 to 19 sector has contributed to the current record high proportions of 16 to 17-year-olds who are participating in education or apprenticeships. We are also providing additional funding to support institutions to grow participation in level 3 maths. Institutions will receive an extra £600 for every additional student from next year.

I also recognise that protecting the base rate in cash terms means that funding per student has not kept pace with inflation, and we will look carefully at 16 to 19 funding in preparation for the next spending review. I hope that gives some assurance to my hon. Friends.

I appreciate what the Minister is saying, but the issue is not only about pupils coming to the end of their time at school. Primary school heads have told me that the base figure of £3,500, which they do not receive, will simply not cover their costs. They say the base cost to run a primary school and serve their pupils is £4,060, so they make the point that the base figure is now insufficient.

I understand the representation that my hon. Friend makes. She is, as always, assiduous, as are my other hon. Friends and Opposition Members. We have to make difficult decisions. We introduced that minimum amount to tackle particular problems highlighted by headteachers from Cheshire, and we keep the issues under review.

We understand that the national funding formula represents a big change to the funding system and that schools need stability. To ensure that there is a smooth transition, we have confirmed that, for the next two years, local authorities will continue to be responsible for setting school budgets at a local level, in consultation with their schools. This flexibility will help to ensure that the transition to the formula takes place in a way that best meets the needs of local schools and pupils. Many local authorities are moving closer and closer to the national funding formula, and 112 authorities, including authorities in Cheshire, have introduced a minimum per pupil funding level factor in their local formula. I am very pleased that so many authorities across the country are showing such strong support for the national funding formula.

I thank all Members in this debating Chamber today for their contributions to this very important debate.

Motion lapsed (Standing Order No. 10(6)).

Sitting suspended.