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Schools: Funding Formula

Volume 782: debated on Tuesday 21 March 2017


Asked by

To ask Her Majesty’s Government what is their response to the Education Policy Institute report on the new funding formula for schools which indicates that primary schools may lose funding equivalent to two teachers and secondary schools may lose funding equivalent to six teachers.

My Lords, through our careful management of the economy, we have protected the core schools budget in real terms. In 2017-18, schools will have more funding than ever—over £40 billion—set to rise to £42 billion by 2020. The IFS analysis shows that per pupil funding in 2020 will be over 50% higher in real terms than in 2000. While we know schools are facing pressures, we know that there is scope for schools to become more efficient and we are supporting them to achieve this.

I thank the Minister for that interesting reply. Could he say whether he recognises the concerns of teachers at schools with more disadvantaged pupils, who are more likely to suffer than others under this funding formula? Could he predict what the future for those schools might be?

I think that the EPI, to which the noble Baroness refers, supports our national funding formula and agrees that we should proceed with it, and it confirms that we will be focusing money on the disadvantaged.

My Lords, in the next four years, the budget of an average primary school will be £74,000 worse off. That is the equivalent of two teachers. The budget of an average secondary school will be £291,000 worse off, which is the equivalent of six teachers. Does the Minister think that it is wise to be spending £240 million on expanding grammar schools and £320 million on creating new free schools when these budgetary pressures exist?

All public services are facing budgetary pressures. We are still trying to recover from the deficit that we inherited. The National Audit Office has made it quite clear that it is reasonable to look to schools to make efficiency savings. The Education Endowment Fund has said that there is significant scope for better deployment of staff in schools. We find that many of our best schools educationally are also running themselves financially very efficiently. We believe that there is significant scope for saving, in non-staff costs in schools, of over £1 billion.

Will the Minister join me in recognising that the current funding system for schools is fundamentally flawed? It is a postcode lottery, where resources provided to identical schools depend not on their needs but on location. This is unfair and needs to be addressed urgently.

I wholeheartedly agree with my noble friend. As I have already said, the EPI, to which the noble Baroness, Lady Massey, referred, has agreed with him that the system as it currently stands is broken, is unfair and must be addressed urgently. Underfunded schools do not have access to the same opportunities as others do, and this cannot be right. This is why we are introducing a much clearer, fairer and more transparent system.

My Lords, does the Minister accept that these proposals have a disproportionate effect on small primary schools in rural areas? I declare an interest because the school in my village, of Vernham Dean in Hampshire, will have suffered a cut of £64,000 in relation to the money that was available to it only a year and a half ago. I wonder whether the Minister can accept that these proposals will adversely affect young children in small, rural schools in relation to their counterparts in larger towns.

Rural schools are of course essential to their local communities and ensure that children do not have to travel long distances to school, but we are including an enhanced sparsity factor in our formula to target additional funding to our smallest and most remote schools. This sparsity funding is over and above the lump sum that all schools will receive to help them meet costs that do not vary with their pupil numbers.

My Lords, while I welcome the additional efficiency and flexibility that come from the multi-academy trust system, and from trusts and free schools overall, does the Minister agree that a reduction in funding per pupil at a time when greater skills are needed to compete internationally, and when mental health problems among young people are increasing so rapidly and causing problems for many schools, is a bad allocation of money?

I am grateful to the noble Lord for his comments about the efficiency of multi-academy trusts. One study shows that multi-academy trusts can achieve a saving of £146 per pupil. As I said, we are still recovering from the financial hole that we inherited in 2010 and we all have to adjust our resources. Schools have had a huge increase in money in recent years. We are trying very hard and have a lot of resources available on our government website to help them become more efficient.

My Lords, will the Minister apologise for the fact that the Government are taking money out for their own pet schemes for grammar schools and depriving children in other schools in other parts of the country? Will he agree to go away and look at whether the Government’s pet schemes should have additional money that is not stolen from children in other schools?

I will not apologise any more than the party opposite has apologised for the probably £10 billion that it wasted on its Building Schools for the Future programme.