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Schools: Funding

Volume 794: debated on Thursday 29 November 2018

Motion to Take Note

Moved by

That this House takes note of the impact on schools of Her Majesty’s Government’s approach to school funding.

My Lords, I draw Members’ attention to my entry in the register of interests as chair of the Birmingham Education Partnership. I suspect that there will be differences of opinion during the debate. I hope there will be and that is as it should be, but I acknowledge and accept that every person in this House, no matter their view on school funding, values education, understands its importance, and would have the highest ambitions for our children and nation. Indeed, that is what makes this such an important topic to debate. We all know of its importance and we all know what happens when we get it wrong.

I also do not think that funding by itself will solve all our problems. I know it depends on how the money is spent, good leadership and good-quality teaching, but without money those things cannot happen. I am not one to say, “Give schools money and everything will be right”, but when I talk to teachers, visit schools and read what is happening I see that there is a crisis out there. Teachers are saying that it is the biggest problem they face. It makes a difference to what and how we can teach children, the pressures on teachers in a very demanding job, and, in the end, the prosperity of our country and the strength of our families and communities.

What is most worrying about this topic is that that sense of crisis and the reality of what is happening in schools is not reflected in what we hear from Ministers. It seems we have a Government who are not yet at the stage of acknowledging that there is a problem. If we achieve nothing else in the debate, if I could hear the Minister say, “I acknowledge that there is a problem and I am going to try to do something about it”, it would be well worth having.

I do not now trust what the Government say about statistics on school funding. On five separate occasions, the UK Statistics Authority has pulled Ministers up for misusing statistics. Let us look to organisations that are neutral and can give us impartial advice about what is happening. The Institute for Fiscal Studies and the National Audit Office say that, after a period of sustained increased funding from the previous Labour Government, they now find that this generation of teachers is the first for 15 years to have to run schools and teach at a time of diminishing budgets. Over 2016 we saw a real-terms drop in funding per pupil in schools of 8%. If you have been a teacher for the last 15 to 20 years you will have seen a 50% increase between 2001 and 2010 under the previous Labour Government, funding held steady and protected by the coalition Government, and an 8% real-terms cut since this Tory Government came in in 2015. Within those groups, some children and some sectors have suffered far more than others. The sector for 16 to 18 year- olds in particular has had a raw deal: down by 8% for them in further education, but in school sixth forms the amount of the cut is 20% in the last few years. That is what people are having to deal with in schools and the impact on the learning of those children can only be imagined.

I also want to draw attention to what is happening in special educational needs. I know from my experience that the money in the high-needs funding block is going nowhere to meet the demands placed on it. The LGA is doing a report at the moment the initial findings of which show a shortfall of £536 million in this financial year. Put that alongside the area where the Government claim they are doing good work—capital funding—and we can see that that is a problem as well. The Government say that they are tackling the problem of shortfall of places and building more schools, but they are actually shifting the money from the maintenance of school buildings for all schools, putting it into pet projects such as free schools and academies, and saying that that is creating the extra places. We have seen the budget for maintenance of schools fall from £4.7 billion to £2.4 billion. But it is worse than that: what has happened with the capital money is that of all the free schools that have opened, 54 have closed. That includes 12 UTCs and some studio schools as well. So even where they have invested money in the creation of new places and building new schools, we find that they have squandered that money. There has been poor stewardship of the money spent. Even the recent annual academy accounts show a £2 million operating debt as well.

This is not a blip or a little problem in schools that has to be dealt with along with everything else that is happening. It is a crisis, both in revenue funding and in capital funding, and there is no hope on the horizon that things will get better. It draws the energy out of what is going on in our schools. It saps the enthusiasm of our school leaders and our teachers. What saps the enthusiasm most is when the teachers hear the Government telling them that there is no problem. All that does is to create mistrust and resentment between politics—our business—and teaching and education, the jobs that we are supposed to be supporting.

This should not be a debate about figures, in truth—about, across the House, whose statistics we can believe. It should not be about trading £1 billion for another £1 billion. It should look at the consequences in schools of that cut in funding. That is what I want to look at. One thing we have to remember is that 80% of money spent on schools is spent on staffing. If you have to find cuts to your budget, it is very tough to do anything but cut the money you spend on teachers, support staff and clerical staff: that is where we have seen the biggest cuts. When the department inquired of teachers what they were doing to manage the cuts in expenditure, they said that they were replacing experienced, highly paid teachers with younger, less experienced teachers. They said that they were putting more teachers on temporary contracts rather than permanent ones, senior staff are teaching more, non-senior staff are losing more of their non-contact time and teaching larger classes, and there is less teaching of non-EBacc subjects. All that not only drains teachers’ energy, it means that the learning experiences that our children get are not as good as they should be.

I looked at what the Government are doing on teacher workload. They have a toolkit for this, a toolkit for that and a bit of advice for the other, but all those good attempts to reduce teacher workload count for nothing if we place more work on teachers because of the funding crisis. It is no good giving them a toolkit to improve communication or a bit of advice as to how to save time on marking if, day by day and week by week, we give them less contact time, more children to teach and more pressures because of less money.

I acknowledge one thing that the Government are doing which we did not take on: to try to change the funding formula. Good luck with that, because it is a job that probably needs doing. But to try to do it with one hand, during a time of making school budgets fall with the other hand, probably makes that nigh on impossible without asking some schools to suffer a great deal. Money matters. All the political parties that we represent have “We pledge more funding” in their manifestos. I have never heard of a competition between the political parties as to how they can raise school standards with less money. That is not a debate we have, so money matters. We pledged money, as did the Tories and the Liberal Democrats. Look at London Challenge and the pupil premium: that shows what can be done if you marry together extra funding of a sizeable amount, target it well and ensure that you work with teachers and school leaders to deliver the best for children. All that is a long, long way from the funding for the “little extras” that came out in the Chancellor’s Budget—but that is the sole response we have had to what is happening at the moment.

I want to remind people about the context in which we are asking schools to work. There is not a generation of schoolteachers of whom more has been asked than the generation in our schools now. Very often, it is we who ask them to do these extra jobs and they pick up the consequences of our policies and decisions in schools. This is the first generation which has been asked to succeed with every child, when previous generations were not. It is schools that pick up the pieces from increasing poverty, broken families and fractured communities. It is schools that have to work out how to bring up the next generation in a world which is globalising rapidly, and how teaching and learning changes with the digital revolution that faces us. Whatever the answers are to all those questions—I do not claim to know them—there needs to be investment in the schools and their teachers, in the fabric of their buildings and the equipment they use. There needs to be thought and investment in time and in space.

Quite frankly, if politics is about choice then the Government are making the wrong choices as far as school funding is concerned. It is never the right choice not to invest in the future, whatever the circumstances. It is never the right choice for business, commerce and industry because their success depends in part on schools getting it right now. It is never the best choice for individuals, families or communities because we know that education can be the key to giving them strength, enabling them to raise their heads and then to not only fulfil their individual potential but be stronger contributors to the world in which they live. We have now seen almost a decade of falling budgets. If your Lordships think about it, that will have been most of some children’s time in school. It is not fair or right that their schooling years should be during a time of diminishing budgets.

What I want to know, and what I think the nation wants to know, from this debate is simply: what are the Government going to do about it? We need to know that they understand the problem and acknowledge the consequences of their decisions and actions. We need to know that they will be champions in government of the teaching profession and all who care within education to try to turn this around. I would like to be reassured about the level of fight taking place as the next spending review approaches, so that there will not be another decade of this happening and children suffering.

I have always thought that education is a joint business, and I think that view would be shared across the House. We all have something to put in because we all get something out. It is up to families and parents, as it is to every citizen and business. There is not a soul without a role to play as a citizen in our country. However, politicians and politics have a role that no one else has. One of their roles is to make sure that our education system is funded well enough to do the things which we ask it to do for individuals, and ensure our country’s prosperity as we go into the future. I beg to move.

My Lords, I congratulate my noble friend Lady Morris on her excellent plea for education and on phrasing the debate in the terms she did. She is right to say that our education service is at a crisis point, and that the Government have to make their mind up about what they want to do with education—where they want to take it and how they see the future.

The Chancellor, in announcing a budget increase, as he put it, for primary and secondary schools, made probably one of the most patronising throwaway remarks ever when he said of the £400 million that he was giving out that it was, “money for little extras”. He should have left it at “little extra”—at least that would have been more honest and accurate. It gives a primary school on average £10,000 extra and a secondary school £50,000 extra. Few of us on these Benches know of a state school that is not struggling to keep within its budget. Local schools in my area, Brighton and Hove, have long had banners outside their gates telling local residents that the average loss to local schools is roughly £200,000 a year—and parents tell me that they can tell.

Yet still the Government, in a flurry of statistics, try to explain it all away by saying that the dedicated schools grant, delivered through the new funding formula, will mean that, as Schools Standards Minister Nick Gibb, claimed:

“Core schools funding will rise from … £41bn last year, to £42.4bn this year and £43.5bn in 2019-20. This means that real terms per pupil funding in 2020 will be more than 50% higher than it was in 2000”.

What this bland assertion ignores, of course, is the truth that, as the IFS—the respected independent fiscal analysts—pointed out, the 50% increase was during Labour’s years in office, between 2000 and 2010. The IFS placed the changes in a wider financial context and stated:

“Total school spending per pupil fell … in real terms between 2009-10 and 2017-18, and will only be … 14% higher in real terms in 2017-18 than in 2003-04. This adds on the additional effect of a … real-terms cut in local authority service spending and a real-terms cut of more than 20% to … sixth-form spending per student between 2009-10 and 2017-18”.

The Government’s reaction is to retreat, as they always do, to assertions such as, “schools funding is at record levels” and that changes are part of a “historic move to fairer funding”. No doubt we will be treated to this mantra later from the Minister. He will also tell us, no doubt, that schools standards are rising and that disadvantaged pupils are doing better than ever.

Fortunately, we are blessed with independent-minded observers such as the National Audit Office. In December 2016, it reported on the financial sustainability of schools based on the Government’s spending plans. It concluded that, while the schools budget was protected in real terms, it did not provide for funding per pupil to increase in line with inflation. It also pointed out that with the increase in numbers—174,000 in primary schools and 284,000 in secondary schools—there will be a real-terms reduction when inflation is taken into account. The NAO went on to say that department estimates show that mainstream schools will have to find savings of £3 billion a year to counteract cumulative costs pressures. These they identified as pay rises, the introduction of the national living wage, higher employer contributions to national insurance and the teachers’ pension scheme—plus non-pay inflation and the apprenticeship levy. By 2019-20, this will amount to an 8% per-pupil funding cut. It is no surprise, then, that the professionals on the ground who teach in and manage our schools are beginning to feel the effect of this continued austerity squeeze.

So those are the figures and that is the theory—but what is the practice? I decided to take a look at one of our more affluent London boroughs—Barnet—to see what professionals there were saying. They believe that they are providing a world-class education for Barnet children, and they are rightly proud of their achievements, but head teachers recently wrote to Nick Gibb, and I think also met him, about school funding. They said that they are seriously concerned that current levels of funding are now seriously threatening this high-quality provision. They pointed out that 95.5% of Barnet pupils attend a good or outstanding school and that most schools in the borough are full or over-subscribed. They pointed to the cost pressures that the IFS drew out. What worries Barnet’s head teachers is the impact on the education service they run.

In their open letter to the Minister, they listed 27 areas where budget cuts are reducing the quality of education. I shall give eight items from the list: staff reductions in teaching and support posts; curriculum reduction, including languages, the arts and sport; increases in class sizes; SEN service reductions; fewer teaching assistants; ICT equipment not being replaced; reduced book budgets; less training; and reduced school building maintenance expenditure. These are not trivial impacts; they are core to a school’s activity. They stretch teachers. Heads battle with budgetary control. They report that fundraising for core educational activity has become standard practice, which displaces management and leadership time for heads and senior staff.

The responses from the Barnet heads are disturbing. All 53 reported significant issues for their schools, including budget cuts varying from £43,00 a year to £150,000 a year. Most no longer have significant numbers of teaching assistants. One head reported 20% fewer staff than five years previously. Class sizes of 35 are now not uncommon. Another school reported a contingency fund of just £1,000 to cope with emergencies within a year. This is economic educational madness. A prominent secondary head in the borough recorded that two years ago the school had a surplus of £800,000 which has now gone and that insolvency for his school is a real prospect. Of course, the things that go first are the extras that my noble friend pointed to, such as providing additional places when they are needed and all the SEN work which targets those most in educational need. In-year deficits are now commonplace in Barnet schools, overspends are standard and teaching assistant and support staff reductions are obligatory. Several schools report running without deputy heads, senior staff and the specialists needed to have a full curriculum.

I say to the Minister that Barnet is a Tory flagship borough, and I presume the Government are proud of its quality service claims. On the data recording the borough’s educational service they should be, but, like all boroughs, Barnet has vulnerable pupils and areas of low attainment. They deserve the support which is now beginning to disappear.

Young people are our nation’s future, they are its intellectual capital and, in an increasingly service-dominated knowledge economy, that will always be the case. What sort of sense does it make for us to run down IT and ICT investment when it should be rising to meet the challenges of the AI revolution? What sort of sense does it make to underinvest in our teacher workforce to lead this work at precisely the moment when we need it most and when our nation faces an uncertain economic future, where investing in that knowledge economy may well make a difference to our national destiny and prosperity in a post-Brexit world?

My noble friend Lady Morris is a distinguished educational leader and has done great service in bringing this debate forward. She has given great service to our nation in the field of education. I hope this debate brings intelligent reflection from our Schools Minister and a change of course on funding the future.

My Lords, I congratulate the noble Baroness, Lady Morris, on her excellent introduction and on bringing this subject to our attention. I can find almost nothing to disagree with in her analysis of the situation.

It will surprise no one in this Chamber that I want to concentrate on special educational needs, which both the previous speakers have mentioned. When you have, as we do, a crisis of funding and the fear of a lack of funding, which is affecting planning and structuring, it is not surprising that it is funding for the groups that are seen as being the most expensive that causes some of the greatest consternation. In his Oral Question a few days ago, the noble Lord, Lord Lexden, raised the fact that very high costs are being incurred by local authorities fighting, usually unsuccessfully, against education, health and care plans, the successor to statements. People are winning on appeal and local authorities are running up at least tens of millions of pounds—I think the Times said £100 million but I do not know how accurate that is—in debts, so we are effectively subsidising a branch of the legal profession as opposed to helping those in the education system. In such a situation, the children who end up getting helped are those with a “tiger parent”—I was lucky enough to have one—who will go out and fight for them. So those who will benefit the most are, let us put it this way, the exam-passing classes. They are the ones who will get the help, and money and energy are absorbed into that battle as opposed to being spent on the rest of society.

In the past we wrote off large sections of our population academically, but there were jobs for them to do and they did not need a qualification. That is no longer the case. If you look at the dyslexia world in the round, you see the very high needs of this community. I should mention that I am president of the British Dyslexia Association, and my other interests are in the register. There are large numbers of people who discover late on that they have the problem, and it becomes apparent that that is why they have never passed an exam and probably why their brothers and sisters have not either. You cannot get away with not passing exams or filling out forms now. You cannot work on a building site without doing a health and safety check and knowing how to fill out the form correctly.

People with other special educational needs have similar problems, although not quite the same. One of the personal revelations that I go through is, “Oh, you mean you’re like us but you’re not”—there is always a slight change. However, all of them have problems with the classroom and going through the system.

Information provided to me is that 20% of the primary school population have problems with reading. Reading is a problem that in many cases tends to correct itself later on but is never quite as good as other people’s. Spelling is usually a more permanent problem. However, we are now discovering that in secondary school that group seems to disappear; I think the figure for those registering with a need is just under 3%, where the figure is something like 20% in primary education. However, we then discover new people in universities. So what is happening to support in the secondary system? Something is not right. We are ignoring a whole section of that group. Our system is confrontational and expensive. I am one of the few left in this Chamber who was around when we initially discussed statements. They were designed for the few high-end needs that had been identified at the time. The system really had not established that this was a mass problem.

Dyslexia accounts for about half of the neurodiverse community, both those who have it by itself and those who have it as part of their problems. That is 10% of the population who have a different learning curve and will learn in a different way. How do you get the best out of them? You do not do that by taking them off to a small area at the side for specialist help. Everyone who has worked in this field knows—this is not just a problem today but a historical problem—that getting a teaching assistant without proper qualifications who sits and nursemaids someone is a very common experience. Indeed, a member of my family—surprise, surprise, neurodiverse problems run in families—who has now successfully got himself through his A-levels remembers that his statement meant that that was what happened.

We must ensure that we invest in highly qualified teachers, the very people who become expensive and are being got rid of or sidelined at the moment. The only way we can do this with the existing stock is by improving continual professional development. To address this problem, we must ensure that we have teachers with a better understanding and who know how to deal in the classroom with commonly occurring conditions: the 3% of the population who are dyslexic, perhaps 5% dyspraxic and 2% or 3% who are suffering from dyscalculia. They will be present regularly and there needs to be training to handle different learning patterns. Otherwise—this is another example where if you do not invest, you get more costs later—you encourage the parent to fight to get special provision under the plan, encouraging legal costs, slow development and being in conflict with teachers. Just think about what that does. Little Johnny does not have a problem—he is a problem. The parents who are supportive and helpful are the problem. The conflict being built up here is massive.

We can address this only if teachers are equipped to deal with the situation in the classroom. When we talk about educational attainment, we ask, “What’s his spelling like?” I am sorry to return to dyslexia again, but it is my subject. You are not going to pass a spelling test by putting extra effort in, you need to know how to deal with it by different learning patterns—for instance, increasingly, using computers. Even the standard computers that we are given here have a special needs support package. True, I have not been taught how to use it properly, but I am waiting to be taught. I am told that the specialist set I have on my computer is still better. These things are available.

How do you work that into a classroom? How do you take stress off the child’s mechanical skills so that they can do work that leads to examination success? These are all known and existing pathways, but we do not teach our teachers how to get the best out of our children. At the moment, the most expensive block is becoming a problem that people are trying to avoid.

I pray in aid our discussion inspired by a document from Warwickshire County Council which said that dyslexia does not exist. To be fair, the entire House took a huge intake of breath and said that that was not on, but the council published that. It found the one academic who supports that point of view. Think how much money you could save if you took 10% of your problem out of your schools or did not have to do anything special for them. Which group will be next if we allow that to happen? I thank the noble Lord, Lord Agnew, because he intervened and helped. If that is the culture, we must do something to address it very quickly. I suggest that finding a bit more money for education and investing in staff to enable them to handle the problems that they are statistically almost guaranteed to meet day to day would be a very good start.

My Lords, I am grateful to the noble Baroness, Lady Morris of Yardley, for securing this important debate on school funding and for her impassioned and powerful introduction to it. I fear that she is right that there is a crisis in school funding. Head teachers in the diocese of Worcester speak of the stress they are experiencing due to funding worries; of not sleeping due to such worries, which impacts negatively on all they are trying to do; of a sense of letting down children with significant needs; and of a feeling that they have nowhere to turn to be truly heard. One head of a school who has been asked to double its numbers has not been provided with sufficient funding to do so, throwing his school into financial insecurity and causing immense stress.

Of course, that stress and anxiety is not unique to the diocese of Worcester, nor to head teachers. According to the 2018 Teacher Well-Being Index, 67% of teachers reported that they were stressed at work, which has led to taking time off work for extended periods. That, of course, not only affects people’s progress and attainment but puts additional pressure on schools, which have to hire cover teachers, often at a much higher level of pay.

Following on from what the noble Lord, Lord Addington, said in his speech, despite the increase in high-needs funding for those with complex educational needs, school leaders still report that funding is insufficient to meet the needs of children with special educational needs and disabilities who attend their schools. One such case in my diocese is a school that has had to cut its speech and language individual intervention support to one afternoon a week, and is unable to support more specialist provision. That has led to a significant number of children not receiving appropriate intervention programmes.

In some cases, the strain on funding for children with special educational needs becomes too much, as has been implied. The Commons Education Select Committee heard evidence from the National Education Union that,

“in the current climate, schools are cutting resources to vulnerable children and permanently excluding instead and saving thousands of pounds”.

It is surely a matter of extreme concern that exclusions should be made on a financial basis and that children with special educational needs are being denied appropriate education because of lack of funding.

Turning to multi-academy trusts, they are witnessing a rearrangement of funding to reflect the needs of individual schools in the trusts, with the surplus of more prosperous schools being used to meet the deficit in the schools that are not thriving. The Minister has spoken about the additional benefits of the economies of scale that can be achieved by joining a multi-academy trust. That is undoubtedly true; it can be of great benefit, but there is a problem when schools are not receiving support and, as a result, fail their pupils and may be forced to close. For small and rural schools, for example, the financial challenges can make them inherently unattractive for academy chains or multi-academy trusts. Thus, they may be unable to provide the access, support and security that being part of a MAT provides.

There are particular difficulties with small and rural schools, and I know that the Minister attended a conference on their needs at Lambeth Palace earlier this week. Such schools are hit much more severely by external factors and are generally less able to adapt. For example, a small school that suddenly has one fewer pupil than expected would lose a larger proportion of its funding and would be less able to adjust to the effect of that reduction. There are also many additional associated costs in running small rural schools that are not reflected in funding structures. For example, because rural locations find it harder to attract young newly qualified teachers, the teachers they do attract are very often paid more, so rural schools have higher associated staffing costs. That is just one of the many instances in which circumstances are stacked against rural schools.

Anyone who has spoken to educators will know that there is a real struggle to make ends meet at present, which could well be described as a crisis. It is of course necessary and right that deficiencies should be pursued, but there is a real danger of perceived efficiency leading to deficiency. We should be looking to those setting the best examples when it comes to making cuts, to learn from best practice. At the same time, it is surely crucial to ensure that funding matches the needs of schools once sensible efficiencies have been made. Efficiency should not compromise the education of any child. I fear that that is now happening.

My Lords, let me start by reminding your Lordships of my education interests in the register, particularly as one of the chief officers of TES. I thank my noble friend Lady Morris not only for instigating this debate, but for the passion and clarity with which she opened it.

Our schools are struggling, particularly our secondary schools. Four statistics tell the story. We have heard the Institute for Fiscal Studies statistic about an 8% real-terms cut over the last eight years. At TES we have done the calculations as a result of the surge in pupil numbers coming through secondary, and predict that in 2024, this country will be 47,000 secondary school teachers short of what it needs to maintain current pupil-teacher ratios. This week, NHS Digital published statistics which tell us that one in five of 17 to 19 year-old girls in this country self-harm or attempt suicide. An Opinium survey for the All-Party Parliamentary Group on Inclusive Growth found that 56% of teachers believe that our school system is no longer fit for purpose. I happen to agree.

What is going on? I commend to your Lordships the BBC2 series “School”, which you can catch up with on iPlayer. It is slightly depressing but insightful. In it we see a head teacher, James Pope, struggling to improve standards at Marlwood secondary school, a rural comprehensive in south Gloucestershire that has been put into special measures by Ofsted, while simultaneously being expected to cut nearly £1 million from his annual budget.

Austerity is biting. Funding reductions mean that schools, as the OECD tells us, are employing younger, cheaper teachers, who are often less resilient. More are now leaving the profession than are joining it; I see from today’s statistical first release that initial teacher training recruitment targets at secondary level were missed again for the sixth consecutive year. What then happens is that reduced local authority support, especially for special educational needs, as the noble Lord, Lord Addington, talked about, creates more problems. Those problems often start with an increase in low-level disruption in the classroom, which grows. Teacher stress then grows and, with that, illness; the Education Support Partnership reports that one-third of teachers in this country have mental health problems. That increases the numbers off sick and the need for more expensive short-term supply teachers and, as a result, behaviour gets worse and learning falls. Teachers start to leave as their workload increases because they are left to do the planning and paperwork that supply teachers do not have to do, and as they struggle, the behaviour management problems grow.

As teachers leave, the school tries to recruit in the normal way to fill the vacancies, using the usual vacancy service, but finds that the candidates looking for jobs are not there. The school then re-advertises if there is time, or it may have to go to an expensive headhunter. In 2016, PwC reported that the cost of recruiting teachers is rising as recruitment agencies capitalise on the perceived shortage of candidates. Their market share has risen to 25%, at a cost of 65% of school recruitment budgets. If the headhunter fails, the school may ultimately have to get a long-term supply teacher at great cost, and often poor quality. This creates further pressure on budgets, with the promise of free recruitment services delivering a bitter reality, because the candidates are not looking. As a result, the school suffers declining teacher quality, results suffer, the high-stakes accountability system kicks in, followed by parental choice and a collapse in budgets, and the end of the head teacher’s career. This is the spiral of decline, and school and local authority funding cuts are often at the heart of that story.

We currently see a burning platform of rising pupil rolls coming out of primary into secondary—there will be 500,000 extra secondary school pupils by 2025. There will be fewer secondary teachers; if we are to fill all the maths teacher vacancies with people studying maths at university, we would need to persuade 40% of all maths undergraduates to become teachers, which is impossible. We have a narrowing curriculum, with less subject choice. The 20% cut in sixth-form funding, which my noble friend Lady Morris talked about, is cutting the number of subjects available at sixth form, but I am increasingly worried about this fetishisation of the academic over the applied, because we are training young people to be outperformed by machines.

If we train young people just to recall knowledge in tests—machines do that better; they are really good at it—computers will take their jobs. We have to remember what it is like for a young person growing up in this country. They are over-tested; they are looking forward to a debt of £50,000 if they choose to go to university, just at a time when employers such as AXA—an insurance company I was talking to someone about today—have done away with graduate recruitment. AXA prefers to source people earlier and train and develop them to meet its individual needs. It is not alone: Apple, Google, Cosco, Starbucks—all these companies, according to Glassdoor, are phasing out graduate-only recruitment because they want more diversity in their workforce.

The payback on going to university, in exchange for that debt, is starting to diminish. Young people are worried about robots taking the jobs they hope to get if they are successful at university. Their qualifications are starting to be dismissed by employers. No wonder we are facing a mental health crisis among our young people. What most parents want from schools is for their children to achieve according to the cultural norm, to be happy—parents do not want a battle to get them out from under the duvet every morning—and to be able to make a meaningful contribution at the end of the educational journey. That vision for parents is being rapidly eroded by a school system that is not fit for purpose. We have a funding crisis but, as my noble friend Lady Morris said, there is also a lack of hope about that on the horizon. But this is an opportunity for us to build consensus for change in our school system, and for a new paradigm for education. We could even call it a national education service.

We could cut testing. It is estimated that in this country we spend around £2 billion per year on testing in our schools. Let us just say we halve that: £1 billion could go a long way in helping with some of these problems. We should trust teachers more to shape a curriculum that engages young people and uses testing for formative rather than summative purposes as assessment for learning. More applied learning could be inserted on top of a foundation of knowledge and core skills in the curriculum. A more diverse 14 to 19 curriculum could be created, perhaps by abolishing GCSEs at 16 and ending the national curriculum at 14 to free up the years from 14 to 19 for a much more engaging curriculum experience. We should welcome back teachers in creative and applied subjects, so that they can properly develop the whole child; we should reconnect teachers with their vocation, so that they stay in and, at the same time, equip learners to find their vocation in time.

All this should be underpinned by proper resources, focused on learning and child development, not on testing and accountability. I look forward to the Minister’s reply. I look forward also to hearing from the noble Baroness, Lady Eaton, and I salute her for having made sure that the Minister is not quite so lonely on his Bench.

My Lords, I declare my interest as a vice-president and former chairman of the Local Government Association. I begin by adding my thanks to the noble Baroness, Lady Morris of Yardley, for initiating this very interesting debate on school funding, and it is a great pleasure to contribute to it.

As we know, providing good quality education for our children and young people is absolutely essential. High-quality education provides the skills and experiences we need to get on in life. Education is absolutely essential to improving social mobility in our society and giving people the opportunity to succeed in life. As a nation, we can provide a good education for our children only if we invest in our schools, colleges, universities and local councils. We also need to give these institutions certainty and control over their funding, as this will help them plan their finances better in the future.

The Government have acted on some of the concerns raised by schools, councils and education charities. In July 2017, the Department for Education announced an additional £1.3 billion for schools for 2018-19 and 2019-20, meaning that no school would lose out under the new national funding formula. The 2018 Budget also committed to a further £400 million for schools in England to spend on equipment and facilities. These were positive decisions and we should give credit to the Government for listening. However, despite this welcome additional funding, there are challenges ahead and things that we need to do differently.

I now turn my attention to the support for our children and young people with special educational needs and disabilities, commonly referred to as SEND. It is a crucial part of the debate on school funding. SEND services provide vital support for some of the most vulnerable pupils, and of course parents rightly expect to see their child get the best possible education and receive the best possible support. I know that councils are doing all they can to make sure that this support is available. However, we are reaching a point where the money is simply not keeping up with demand and schools are getting into financial difficulties because of the increasing demands. Government figures show that the number of children with SEND continues to rise. The proportion of pupils with SEND who attend special schools increased from 5.6% in 2012 to 8.8% in 2017, and the number of children with education, health and care plans, or SEND statements, has increased by 21.1% since 2014.

Councillor Anntoinette Bramble, chair of the Local Government Association’s children and young people board, has warned that, if we do not act soon, we risk creating a perfect storm—a storm in which schools will no longer be able to provide the extra support that pupils with SEND need, and this in turn will affect other pupils and teachers, who will get less support in the classroom.

As we heard from the noble Baroness, Lady Morris, the LGA, for its part, has commissioned the Isos Partnership, an independent consultancy, to undertake research and to analyse further the high-needs funding pressures facing councils. The initial findings of this research show that councils are facing a high-needs funding shortfall of £536 million for 2018-19. I know that councils are concerned that, without additional funding being made available, local government will not be able to meet the statutory duties to support children with SEND.

Meanwhile, research by the Education Policy Institute published earlier in 2018 found that over the four years up to the end of the last financial year the proportion of local authority-maintained secondary schools in deficit nearly trebled from 8.8% in 2013-14 to 26.1% in 2016-17. The average local authority-maintained secondary school deficit also rose over a seven-year period, from £292,822 in 2010-11 to £374,990 in 2016-17. Since the Children and Families Act became law in 2014, councils have seen a significant increase in demand for SEND support from families, but unfortunately this demand has not been matched by an increase in funding.

The Government have delivered a number of important reforms to education and provided additional resources to our schools. This is to be welcomed and I hope it demonstrates that Ministers do listen when concerns are raised and will listen to those of us who are now raising serious issues with the situation facing SEND. I would like the Government to show further leadership on this issue and find new money in the local government finance settlement to help address the funding pressures on SEND budgets. This will go some way to resolving the immediate pressures facing schools and councils, ensuring children continue to get a good education.

In the longer term, we need to work with schools, education charities, the Local Government Association and local government to review high needs funding and make sure there is sufficient money available to meet the needs of children and young people with SEND. A mainstream education is the best option for many children and young people with SEND, as well as a better use of resources than specialist provision is. For this vision to become reality, however, mainstream schools must have sufficient capacity and funding to meet the needs of all children.

My Lords, I thank my noble friend Lady Morris for her passionate, inspired and concerned introduction to this important debate. She is a true champion of true education, as is my noble friend Lord Knight. True education, as someone—maybe one of them—once said, is rounded and grounded. I share their concerns and those of others about larger classes, a narrow curriculum and total school funding per pupil, which has fallen by 8% since 2010, with sixth forms taking a huge hit.

Like my noble friend Lady Morris, I worry about special educational needs, and I salute initiatives such as the London Challenge. I salute schools with hard-pressed head teachers who nevertheless work with classroom teachers on the whole ethos of their schools, trying to preserve art, languages, sport, drama, music, libraries and personal, social and health education. All these are so important to a rounded and grounded education. These schools also spend money on counsellors and pastoral support. But real funding is a depressing problem.

My commitment to education comes from having been a teacher in secondary schools—the best job I ever had—a governor in various schools and the co-founder of a preschool playgroup when my own children were small. I now suddenly see disintegration and an unreasonable focus on passing exams, to the detriment of children and teachers.

In a debate in my name two weeks ago, we addressed life chances and social mobility, including early intervention. I and others put forward the point that early intervention did not just mean in the early years. Adolescents can take advantage of intervention. They undergo massive brain development as well as social and emotional development. This can make them more knowledgeable and aware of the importance of health, education and developing positive relationships. According to the World Health Organization, adolescence stretches from the age of 10 to 19. Schools and higher education institutions can intervene to develop not only adolescents’ academic skills and achievement but social and emotional skills, which employers say they value so highly.

We have a patchy education system, and things are not changing fast enough for many young people who have poor parents, live in deprived areas and go to below-average schools. Successful intervention models such as Sure Start and youth services have been decimated. Between 2012 and 2016, around 600 youth centres and one children’s centre closed every week—a poor record for a Government who say that they care about education and social mobility.

I shall focus mainly on the funding of early years education today. This is not, strictly speaking, about schools, but we all know that education happens in places other than schools, and it happens early. In 2014-15, I was involved in the Select Committee on Affordable Childcare. We carried out a comprehensive review of childcare, which involved a number of providers, both in schools and in the private and voluntary sectors. Government ministries and academics also supplied responses. Some of our findings are still relevant today. Funding systems were complex and often difficult to understand; it is still the same. Provision was piecemeal, with the best being in affluent areas with well-trained staff, and often in school settings; it is still the same.

We know from the Department for Education’s own research that 25% of families earning under £20,000 use their 30-hour free entitlement, compared with 58% of families earning more than £45,000. Only 40% of two year-olds qualify for this provision, yet research shows that two year-olds who have attended nursery have larger vocabularies, are more socially skilled and achieve better in primary school.

My noble friend Lady Morgan spoke in the debate that I have mentioned and highlighted the strange funding disparities in childcare. Government support seems to now focus more on the wealthier: they have moved from supporting vulnerable children to supporting affluent families. Less-advantaged parents, earning under £16,000 a year, are entitled to 15 hours a week of free childcare, and those parents earning £100,000 a year get 30 hours a week of free childcare. Where is the logic in this?

It is rightly pointed out that providing early support to families and children can contribute to preventing anti-social behaviour and crime and support school attainment and good mental health. It makes sense to have the best possible early years education universally, with simple and effective funding mechanisms. Such interventions save enormous costs around later problems. It has been argued, and is mentioned in the report on affordable childcare, that increases in maternal employment of 1% could have a net positive impact on public finances of around £200 million.

We have a great deal of information on all aspects of early intervention, both for children and adolescents. Our superb voluntary sector does a splendid job working with children and provides research that identifies good practice and bears out the need for funding. As I said, funding in early years and adolescence saves later, enormous costs around truancy, delinquency, unemployment and imprisonment. Professionals strive to overcome these problems, but they have a tough job later on.

On 13 November, a debate took place in another place on education funding, and there were many excellent speeches from all sides. I was particularly interested in one from the MP for Burnley, Julie Cooper—I was born, bred and educated not far from Burnley. She pointed out that, in her constituency, the average reduction in school funding is £300 per child, and that the Burnley FE college has had its funding cut by 30% since 2010. She too spoke of early years, and gave examples from her own constituency of deprivation affecting choices and chances. Like me, and like my noble friend Lady Morgan, she is aware of variations in provision and the potential savings for the economy from good-quality provision. Every £1 spent on early years is worth £15 in later years, yet many children have no access to good early years education, and this will get worse unless the Government show a real commitment to sustained support for this vital age group that continues throughout primary and secondary school, and into higher education.

We read in the press regularly, and we have heard today, about per-pupil funding not being protected, and significant cuts so that schools cannot balance their budgets. Schools and further education colleges are having to make dramatic cuts, and local authority funding for the provision of children and family services and youth services is suffering. They are having to focus instead on crises and safeguarding, rather than on creative work with children and families.

The Government have created a volcano and it is beginning to erupt. Teachers are angry, parents are angry and too many young people are feeling the effects of overtesting and stress at school. I am particularly concerned about mental health issues in children and young people. It is a growing problem, and schools are one of the reasons for this. Yet schools should be able to play their part in preventing or defusing such situations. Many do a very good job but, in an insecure early years system, with poorly funded schools and FE colleges and cuts to services for families, it is difficult to perform that function. How will the Government remedy these conditions and do their duty by all our children?

My Lords, I too thank my noble friend Lady Morris for sharing her expertise, as usual, and for giving us an opportunity to debate this key issue. Once again I congratulate the Library on its briefing, which always comes to your rescue when you are trying to prepare for a complex debate.

I agree with one aspect of government policy: the national funding formula is a necessary change because there was a postcode lottery in the distribution of funding. However, although it is right to make that change, surely the challenge for the Government is how it is managed. They talk about a “soft formula” to support a “smooth transition”, but that reminds me a bit of the “managed migration” approach to universal credit. Can the Minister advise the House when the Government plan to publish a review of the transition process to the NFF? It will be important to see how local authorities and schools are coping.

A number of noble Lords mentioned what they have fairly described as neutral organisations, such as the Institute for Fiscal Studies and the National Audit Office. These organisations have pointed out the decline in funding. As has already been said, under the previous Labour Government, we witnessed a 50% funding increase from 1997 to 2010. Now, the Institute for Fiscal Studies and others point to a real reduction of 8%. Why is that happening? The institute states that total spending per pupil fell in real terms by 8% between 2009-10 and 2017-18, and will be only 14% higher in real terms in 2017-18 than in 2003-04. Added to this is the additional effect of a 55% real-terms cut in local authority service spending. I will not quote the figures, because others have already done so. We are also still witnessing a significant increase in the number of pupils, which is another challenge for schools.

I declare an interest as a recent former chair of a board of governors of a primary school. We experienced a need to cut back on staffing. We now have to manage a three-year budget-planning process. That is no bad thing, but it has shown us that there will be a significant reduction in available funding to plan for the increased costs of pay increases, pensions, the minimum living wage, national insurance contributions, the apprenticeship levy and increased pupil numbers. These cannot be discounted; you have to plan for them. As others have said, we used to have the cushion of a surplus but it has now been eroded.

Teachers face huge challenges, including more than 50% of pupils on free school meals, pupils with English as a second language—in my own school, something like 30 languages are spoken—and fewer books at home. These are real challenges for schools to face.

As has already been said, the recruitment of good-quality teachers and head teachers is a more and more demanding process. It is not that people do not want to participate in the profession but that they feel the challenge is too great for it to be a worthwhile and rewarding career.

Does the Minister agree that we should regard education as an infrastructure investment? Why do I ask that? I do so because the Government have stressed in their industrial strategy the urgent need to improve productivity. The demands of the fourth industrial revolution and the digital revolution mean that we need a more-skilled workforce.

My noble friend Lord Knight referred to the demands of industry. We live in an age where the challenge of globalisation—and probably Brexit—means that we need more skilled people. He made an interesting comment about companies taking on fewer graduates than previously; they are looking for people they can train themselves and to move into the apprenticeship field. As someone who has declared an interest in apprenticeships on many occasions, and given the vast amounts of money that is now pouring into student loans, I welcome that.

Employers are looking for people to come into their companies with what they regard as the essential skills: literacy, numeracy, digital skills and the ability to work as part of a team. More and more, we are hearing employers say that it is exceedingly difficult to recruit in areas of high demand. We want more apprenticeships and yet we have cut back significantly on further education.

I congratulate the noble Baroness, Lady Eaton, on her candid analysis. I, too, hope that the Minister listened to it, because she made a number of important points. Her reference to the increased demand for SEND pupil places, the need to meet that demand and local authorities’ inability to rise to the challenge was one of the most important points made today. The noble Lord, Lord Addington, also made the point.

My noble friend Lady Massey mentioned “a rounded and grounded education”—a phrase I like and something that I think all parents seek for their children. However, parents are increasingly worrying whether that sort of education can be achieved. I certainly echo my noble friend Lady Massey’s point about early intervention. We know that if we do not make early interventions, the situation for children as they move through primary education will become increasingly difficult. It is difficult for the child and difficult for the teachers. For every child who leaves primary school not fully numerate and literate, the challenges and costs of remedying the situation at secondary level increase.

Like the other speakers in this debate, I hope the Government are listening. I welcome some of the moves they have made and the increases in funding, but it really is not enough. If they want to meet the targets they have set themselves to improve productivity and meet the skills demand of the new digital revolution, they need to recognise that education funding is a key part of the challenge.

My Lords, I am grateful for the opportunity to speak in the gap. I thank my noble friend Lady Morris for her powerful introduction to the debate. One can be beguiled by her courteous and fair-minded approach to everything she says into momentarily not noticing how devastating the analysis she put before us was. She said, very fairly, that money is not everything. She also said, very powerfully, that it is certainly something and when there is not enough of it the impacts are obvious.

I wish to refer to two issues. The first has been mentioned by a number of noble Lords, including the right reverend Prelate, and that is the impact on teachers of the struggles in which they currently have to engage to keep their schools afloat and doing a good job. I am particularly concerned about school leadership because this is where the experience of, in some cases, decades of teaching comes to be used in the service of schools as whole institutions. I see in my own family the day-to-day impact of the pressures on school leaders of these struggles. Does the Minister acknowledge that this not only has an impact on the well-being and mental health of teachers but also on their families, for whom witnessing the kind of stress that many teachers are experiencing at the moment is distressing and sometimes destructive?

This is causing the wearing thin of the fabric of our education system, at both personal and institutional levels. The repeated denial from the Government, as my noble friend Lady Morris said so powerfully, is disrespectful of the efforts that educationalists—teachers in particular—put in to trying to make sure that our children’s future is safe and productive. Education is, as she said—not in these words—a common enterprise and we should all be concerned about it.

My second point is about information that has come out of the Department for Digital, Culture, Media and Sport in the past 24 hours concerning the current value of the creative industries, which has gone over £100 billion. Those industries are likely to be the source of many jobs and opportunities for the young people currently in our schools. The skills and aptitudes that they need are fed and nurtured by precisely the subjects—I will not enumerate them again because I and other people have done so many times —which are suffering as schools struggle to meet the demands of the EBacc and other curriculum subjects. They have less discretionary funding available to allow pupils to participate both academically and extracurricularly in these creative subjects.

Schools cannot therefore properly prepare children for the opportunities that are out there and available to them. They will not come out with the range of skills that the creative industries need and those jobs will therefore probably go to such migrants as manage to get through our increasingly difficult immigration system. As I have said many times, this is a shocking wasted opportunity and I hope, once again, that the Government will look with more imagination at the restrictions they are placing on the curriculum. This point was also powerfully made by my noble friend Lord Knight of Weymouth.

It is the Minister’s job, and I understand this, to defend government policy. Not for the first time I find myself feeling really quite sorry for him because he does not even have support, frankly, on his own Benches. I hope he will find the courage at least to acknowledge the problems that have been put before him in this debate, even if he cannot yet say exactly how they are to be resolved. Further denials from the Government about the crisis that education currently faces will simply lead to deeper despair, and that in turn will lead to incalculable consequences.

My Lords, I declare my interests as a vice-president of the Local Government Association and a patron of Careers Connect. I know some people think that if a debate does not have dozens of speakers, it is not quite as important, but I think it is better when we have smaller numbers because we have longer to speak and can appreciate the arguments being made. I should like particularly to thank the noble Baroness, Lady Morris, for whom I have huge respect from my days as leader of Liverpool City Council. She came to the rescue of our education service and that debt has always been in my mind.

This debate is being held against the background of the BBC programme “School”. The series follows the pupils, teachers, parents and leaders of different secondary schools in a multi-academy trust. It shows a head teacher, Mr Pope, struggling to improve standards at his school, a rural comprehensive in Gloucester which has been put into special measures, while at the same time trying to find £1 million of cuts from his annual budget. Teaching, leadership and support staff are being decimated. Class sizes are increasing. Morale is falling as pupils and teachers struggle to shake off the label “inadequate”. Last week, in episode three, after a poor Ofsted report, Mr Pope is seen handing in his resignation. He said:

“I started my headship with a vision of what I wanted to achieve and I came to realise that increasingly, I was making compromises … the more you have to compromise, the more you sit there thinking: this isn’t what I wanted to do. This isn’t what I thought my headship would be about”.

What wise words those are.

My noble friend Lord Addington, who is in his place behind me, has been purring because of the number of speakers who have mentioned special educational needs. He is less angry and more content than I have seen him for a long time. For example, the right reverend Prelate the Bishop of Worcester talked about special educational needs. I began to purr when the noble Lord, Lord Knight, said, “Let’s cut testing”. Hallelujah to that. I think that my party said in its manifesto that we should do away with key stage 2 testing and with league tables that play one school off against another.

I am sure that when the Minister, for whom I have huge am respect because I know he always does his best—whenever there is a problem, he is the first to say, “Come and talk to me and let’s try to sort it out”—gives his reply, he will baffle us with facts and figures about how much is being spent: this or that amount of money and this pot of money. I am sure that, unlike the Minister of State for School Standards, when it comes to blinding us with figures, he will make sure that his statistics are correct. I do not want to talk about the statistics, although I, too, have had all the briefings. I thank the House of Lords Library and many other people who have written in. Sometimes you can be almost blinded by the statistics and they become meaningless. When I thought about how to approach this debate, I wanted to ask what it feels like for an individual school. We have talked about the BBC series, but that is slightly different.

One of my former teachers, Mr Carl Roscoe, is now the head of a successful one-form-entry primary school in Lancashire. I emailed him and said, “I am speaking in a debate. Can you tell me what it is like to face budgetary constraints”—I will not use the word “cuts”—“in your primary school?” He emailed back earlier today, and what he has to say is probably my speech:

“We are now eating in to any money we have held back in case the boiler packs in or there is any roof damage. The site supervisor patches up any problems—as we haven’t got the funds to pay the appropriate people. If teachers are absent I cover … as we can’t afford the supply teacher rates. Our Two Year Old Nursery currently has a number of portable heaters as it would cost too much to repair or replace the old heating system.

“The Children’s Centre has closed so a lot of families are struggling before children attend school so we are seeing more four year olds attend school in nappies. The teacher and the teaching assistant are spending time changing nappies rather than”,

improving their learning. He goes on:

“We are seeing more children struggling with anxiety—so we have used funds to pay for mental health training—I am now the Mental Health Champion. Teachers are spending more time providing pastoral care. The school appears to be the main community hub for everything—including social care support/advice. Teaching Assistant time is being cut so children are missing out on valuable interventions that the class teacher hasn’t got the time to provide on a one to one or small group basis.

“Children who need SEND support are waiting longer to be diagnosed so the school has to find ways to manage the behaviour issues without too much disruption to the learning that should be taking place. There are no places in local behaviour support schools to accommodate these children—even on a temporary basis. Teachers then feel unsupported and are growing more anxious in a job that should be highly valued.

“I still enjoy my job and feel very privileged to be in the job, but I know of other Head Teachers who are feeling the strain and as a result, they are contemplating taking early retirement or walking away from their career”.

That is a bit like Mr Pope.

The Minister, speaking at the School and Academies Show in Birmingham, likened himself to “a pig hunting for truffles” when it comes to finding waste in schools. But the reality is that schools do not have the luxury of trying to find waste; it is about trying to make massive budget savings. It does not take a bottle of champagne or whatever it might be to find these savings because, rather depressingly, they are happening right at this moment. How are those savings being made? We have talked about special educational needs. One of the ways that savings are being made is by trying to ensure that you do not have children with special educational needs in your school because—guess what?—they cost money.

Increasingly, qualified teachers who used to lead nurseries are being taken out as the head puts in NVQ level 3 staff members, excellent though they are. We see schools going through restructuring and, in that way, structuring out their expensive, experienced teachers. Schools are using teaching assistants to teach lessons. Secondary schools are scrapping subjects that are not part of the EBacc because they are expensive. As we have heard, those include music and drama. Perhaps it is easy to make those savings, but they are going on throughout our education system.

By chance, I met a group of people from an organisation called The Key. I believe its representatives have met the Minister. The Key provides information for schools on anything they are concerned about. It has produced a very good study of education in rural schools entitled The Challenges of Leading a Rural School: A State of Education Series Report. It surveyed the head teachers of some of the 5,000 rural schools across England, which comprise 20% of our schools. However, there is a dearth of information published on the unique challenges they face. The research shows that the top problem for the heads of rural schools is not being in a small community, lack of pupils or problems in staffing; rather, half of them said that the problem is not having enough money. Again, some of the comments are quite alarming. One head, Tim, reported:

“This year I need to save £64k from a £285k budget”.

Another, Richard, said:

“My top 3 challenges are finance, finance and finance. We’ll get an additional £200k in the national funding formula but it just means our projected deficit is less than it would have been”.

Liz said:

“People bang on about academies being a business, but our hands are tied—you don’t see the police out there fundraising for their own salaries”.

Simon said:

“We have already cut the number of TAs to the bone”.

Mark said:

“Things like music and drama are expensive to run … We have had to make some tough cuts to the arts”.

All that is happening in rural schools in this country.

For an increasing number of children and their families, the reality before they even start school is that, in their communities, Sure Start centres—a valuable resource for young children and parents—have closed. Local libraries that provide books and toys—an essential part of a young child’s life—have closed. We know the importance of children’s centres. For older children, sports centres, swimming pools and youth centres have also closed. All those things have gone.

Noble Lords may be wondering what that has to do with school funding. Early years settings, primary schools and secondary schools are often picking up the pieces from our social policies. We heard the Prime Minister tell us that austerity is over. If it is, let us celebrate by ensuring that Tim and his colleagues from those rural schools are not saying, “The problem is finance, finance, finance”, but, “We can educate, educate, educate”, to coin a phrase.

My Lords, I thank my noble friend Lady Morris for opening the debate with all the passion and authority of a former Secretary of State. I thank noble Lords for their contributions.

As noble Lords have mentioned, it has to be said that on school funding, the Government seem to enjoy less-than-full support from their Back Benches—and not only in your Lordships’ House. In a debate on this subject in another place two weeks ago, many people expressed concerns. Today, only the noble Baroness, Lady Eaton, was willing to put her head above the parapet, although she was hardly fulsome in her praise of the new funding formula. Indeed, I am indebted to her because by quoting in detail the shocking figures on school deficits contained in the Education Policy Institute report from earlier this year, she saved me from doing so.

Given his hands-on experience, I suspect that I am not the only noble Lord who regrets that the noble Lord, Lord Harris of Peckham, was not able to take part in the debate. However, I doubt that the Minister will feel the same way because the noble Lord clearly called the Government out on funding. He said that schools in his multi-academy trust had already made £12 million of savings but were facing a further 20% real- terms cut in funding over the next five years. He also criticised the Government’s free schools policy as an expensive drain on limited resources. He is only too aware of the impact on schools of the Government’s approach to school funding.

Recently, the Prime Minister promised us that austerity is over but the Budget made it clear that it will continue for years in our schools, colleges and early years providers. All the Chancellor offered schools during the Budget was what were patronisingly labelled “little extras”: £400 million in capital funding after the Government cut the capital budget by £3.5 billion in real terms. That reverses barely one-tenth of the cuts in this area. The Budget did nothing to provide additional revenue funding to schools that are struggling to afford the essentials; per-pupil funding will fall again next year as a result. Further and adult education once again received no support, and no action was taken to reverse the £3 billion-plus of cuts they have suffered since 2010. My noble friend Lady Massey outlined very effectively the impact of that on early years provision.

The Secretary of State should have fought much more vigorously for a share of the Budget that properly recognises the real needs of schools. Ministers may choose to ignore what they regard as politically motivated criticism from opposition parties but they should take note of impartial and respected research organisations, which have highlighted underfunding in schools. I mentioned the Education Policy Institute, for example, and many noble Lords, not least my noble friend Lady Morris, highlighted the Institute for Fiscal Studies report that identified the 8% cut in real terms between 2010 and this year. Of course, that was driven mainly by a 55% cut to local authority spending on services and cuts of more than 20% to sixth-form funding. These figures are alarming. I take no pleasure in repeating them but it is clearly necessary to do so because the DfE and its Ministers are simply not listening. Ignoring a problem does not make it disappear.

The reality is worse than what was outlined by the IFS because it did not take account of future additional burdens that will be loaded on to school budgets—additional national insurance and pension costs that the DfE will not fund, most notably. The Minister needs to tell noble Lords whether he accepts those figures because it seems that only those in the citadel of the DfE refuse to believe that the IFS report reflects the all-too-real difficulties experienced daily by our schools.

As I am sure the Minister has done, I read the Secretary of State’s speech when school funding was debated in another place two weeks ago. As usual, Mr Hinds concentrated on overall spending, ignoring the rise in pupil numbers. He compared current funding with that in 1990 or 2000, rather than 2010—a point made by my noble friend Lord Bassam. Education was not in a good place after 18 years of a Tory Government; being a bit better than that is hardly something to be proud of. I plead with the Minister to spare me the mantra that none of this matters much because standards are rising and since 2010, 1.8 million more pupils are now in “good” or “outstanding” schools. Many of us regard that as code for, “Academies, good; maintained schools, bad”. That figure has little to do with government policy; it is more a reflection of increases in pupil numbers and the result of changes to the inspection system.

Equally, schools that have been rated “outstanding” often do not see an Ofsted inspector for 10 years or more, with those performing less well naturally receiving the most attention. Before I leave this issue, let it be noted that Ofsted’s statistics on outstanding schools have improved much more sharply in the primary sector, where only 25% are academies, compared to secondary schools, 75% of which are academies. So, are academies good and maintained schools bad? The figures tell a different story.

There is an existential funding crisis in schools, which manifests itself in many ways. One way is the growing teacher shortage, which is partly, but not exclusively, a result of pay; workload is certainly an issue too. My noble friend Lord Knight powerfully outlined the spiral of decline that often follows the departure of teachers from their classroom. The Minister should take note of that. Another product of underfunding is the narrowing of the curriculum mentioned by the noble Lord, Lord Storey, and my noble friend Lady McIntosh. Although the EBacc is a factor, cost pressures are also responsible for schools ending or reducing the provision of subjects such as music, art, drama, design and technology and other creative subjects.

Then, there is the crisis within a crisis: provision of support to children with special educational needs and disabilities. That was mentioned by many noble Lords, not least the noble Lord, Lord Addington, and the right reverend Prelate the Bishop of Worcester, who spoke passionately about the effect of funding cuts on vulnerable children. Yet the Government expect local authorities to find the first £6,000 of SEND funding per child from within their existing budgets. I often wonder what world DfE Ministers inhabit. Noble Lords will have noted from the briefing provided by the Local Government Association that councils are reporting huge pressures on the high needs funding block; indeed, they say it is one of the most serious financial challenges they are dealing with at present. We all know that they are dealing with a number of such challenges.

If the Minister remains unconvinced, he should study the survey carried out two months ago on SEND provision by the National Association of Head Teachers. Its general secretary stated:

“Schools are left struggling to meet the needs of our most vulnerable pupils. Without sufficient funding and a more coherent approach, the SEN code of practice is nothing more than an empty promise from government to parents and children”.

These dedicated professionals are in charge of our children’s education. That same group felt so concerned about overall school funding levels that, recently, more than 1,000 of them marched on Downing Street to bring their message to the Chancellor of the Exchequer. They are head teachers. Who would have thought that a Government could so comprehensively fail to support the people who run schools and set their budgets that they would be forced into that kind of action? Desperation drove them to it, and the Government should be ashamed that they caused that to happen.

The schools funding crisis even stretches to libraries closing. The School Library Association reports that it has lost 10% of its members since 2015, and recently, one member was told by their head teacher that the library was a “luxury” the school could no longer afford. Many parents regularly receive requests to contribute to the cost of new whiteboards, iPads or playground equipment; in some schools, it is textbooks or stationery. Parental contributions are not always voluntary. Last month, a Guardian report found that 43% of parents have been asked to make contributions in some form, up from 37% two years ago. This should come as no surprise; it is a sign that free education—a right enshrined in the 1944 Education Act—is being eroded.

Of course, there is another side to cuts to school budgets: the scale of the Government’s waste of resources. I have no time to go into the details, but 91 academy trusts have now closed, as reported by Schools Week recently, which used Companies House records to get that information due to the lack of transparency in the DfE and academy trusts. Nominally the DfE bears the costs when an academy fails, but of course it is other schools that do so because they are denied the cash they desperately need. Directors of education in England’s largest local authorities are being paid much less than the chief executives of the largest academy chains, even though the latter are running far smaller organisations.

These skewed statistics might be merely irritating were there adequate funding for all schools, but when schools have had their budgets squeezed to the point where they often cannot afford to replace staff, they become a scandal in which the Government are complicit. I could also talk about written-off debts for free schools before we even get to grammar schools— £50 million was miraculously found earlier this year to pave the way for their damaging expansion. It is one law of funding for the Government’s pet projects and another for the hard-pressed maintained school sector. That is completely unacceptable.

We believe in the value of education and its power to foster social mobility and ambition. That is why Labour has worked widely with parents, teachers and many others to plan a national education service. That is why that national education service does not promise “little extras”. I point out to the Minister that last year’s election manifesto was fully costed on this.

As my noble friend Lady Morris said, it is never the right choice not to invest in the future. Education spending is about nothing other than the future of our children and, through them, the country as a whole. Investing in education is an area in which the Government have been found seriously wanting. The next Labour Government will put that right.

My Lords, I congratulate the noble Baroness, Lady Morris, on securing this important debate on school funding. I acknowledge her great experience on this subject, particularly as a former Secretary of State for Education. It is a key priority for this Government to ensure that every child receives a world-class education to enable them to reach their full potential. We are determined to create an education system that offers opportunity to everyone, no matter what their circumstance or where they live. Raising educational standards is the key to everything we are doing, so ensuring that the financial resources are divided in the right way is vital to that.

However, I know enough about basic psychology to know that most noble Lords will approach this debate with their minds made up. None the less, as ever, I will do my best to show the House that the picture is far less bleak than commonly portrayed. We are making significant progress: more schools than ever are being rated good or outstanding. The noble Lord, Lord Watson, challenges that and says that the framework has changed. I suggest that it is actually tougher than it was seven or eight years ago. The attainment gap is closing—a significant priority for us—and, if we are here for social mobility, then that is one of the greatest pieces of evidence of what we have done. We have launched 12 opportunity areas to drive improvement in parts of the country that we know can do better. We are investing in our schools and have delivered on our promise to reform the unfair, opaque and outdated school funding system by introducing the national funding formula.

As my noble friend Lady Eaton said, we are investing an additional £1.3 billion in our schools across this year and next, as confirmed in our 2015 spending review. This significant additional investment means that core funding for schools and high needs will rise from almost £41 billion in 2017-18 to £42.4 billion in 2018-19 and £43.5 billion in 2019-20.

I take on board the comments from the noble Baroness, Lady Morris, and other noble Lords about statistics, but the independent Institute for Fiscal Studies has shown that real-terms per pupil funding for five to 16 year-olds in 2020 will be more than 50% higher than in 2000 and some 70% higher than in 1990. We could put these figures in a different way, and I accept that these debates can become somewhat reductive, but this is another way to deal with it than the way the noble Lords, Lord Bassam and Lord Storey, did. Putting it in the context of an average classroom, funding for an average primary school class this year is £132,000—up from around £124,000 a decade ago and £84,000 in 2000. That is in today’s prices. Those same children will receive an average of £171,000 when they move to secondary school per class, up from around £161,000 a decade ago and £109,000 in 2000, again in today’s prices.

It is not just the quantum of funding available that matters; it is vital that it is distributed fairly and where it is most needed. Prior to our recent reform of the funding system, schools with similar pupil characteristics across the country had been receiving markedly different levels of funding for no good reason. For example, Coventry received £510 more per pupil than Plymouth, despite having equal proportions of pupils eligible for free school meals. Nottingham similarly attracted £555 per pupil more than Halton. That is why our commitment to reform the unfair school and high-needs funding systems and introduce the funding formula has been so important. I am pleased that it has been this Government who have been able to deliver on that. The introduction of the national funding formula means that this year, for the first time, funding was distributed to local areas based on the individual needs and characteristics of every school in the country. This historic reform is the biggest improvement to school funding for a decade and is directing resources where they are needed most.

On a lighter note, I have a cold—I apologise to noble Lords—and I asked my office to get me some Tunes for my speech. None of them had ever heard of Tunes, so they said that they would google them. They sent a note through the Box just before I came here that said, “We couldn’t find choons”. Maybe my education priorities should be refocused.

Schools are already benefiting from the gains delivered by the funding formula. It has allocated an increase for every child in every school this year, while allocating the biggest increase to those schools that have been most underfunded. This year, schools that have been historically underfunded have attracted increases of up to 3% per pupil. Next year those schools will attract up to 6% more per pupil, compared with 2017-18.

We are particularly focused on supporting children who face great barriers to success, be that because they come from a disadvantaged background, have low prior attainment, or speak English as an additional language. Evidence shows that pupils with these characteristics are more likely to need extra support to reach their full potential. It is vital that we help schools to provide the support these pupils need. The national funding formula has protected the £5.9 billion additional needs funding across the system.

Under the national funding formula, a secondary pupil who had low attainment in key stage 2 will attract some additional £1,550 per year while in secondary education. A secondary pupil who speaks English as an additional language will attract an additional £1,385. A secondary pupil eligible for free school meals and living in one of the most deprived postcodes will attract an additional £2,035. Funding through these factors is all in addition to the basic per pupil funding that the child attracts. These important priorities are often misunderstood or ignored by the commentariat. I accept that it is a complicated system, but it is very much aimed to deal with those children in most need.

My Lords, I do not know whether the noble Lord is about to leave the question of the funding formula, but before he does, could he comment on the observations from my noble friends Lady Morris and Lord Knight that, while there might be some merit in the formula in itself, trying to implement it when the overall quantum of funds available is not increasing sufficiently means there will inevitably be many losers as well as a few gainers?

My Lords, I entirely accept that this is an extremely difficult subject that has been kicked down the road for a long time. Doing it at a time when there are not huge amounts of additional money makes it difficult, but the system puts a floor in the bottom so that no one loses out. Of course, the debate will always be about why we are not moving the bottom ones up quicker. I met a head from West Sussex only last week—

The noble Lord is being extremely courteous and helpful to the House, but what he does not seem to be doing is explaining why it is that all these schools, in experiencing what he is saying are increases in budgets, are also experiencing reductions and losing the ability to provide the level of service that they have provided in the past. The Barnet study is a good case in point, because it is not just one isolated school; it is all the Barnet schools. While I am here, I recommend to the noble Lord that he uses Lockets next time, rather than worry about Tunes.

I thank the noble Lord for that very important piece of advice. There is a very complicated answer to the noble Lord’s question. It goes right back to the 1990s, to a system of training called COSMOs that was given to head teachers then. That training has not been continued and has lapsed, but what it showed senior leaders in the 1990s was how to most effectively allocate resources in their schools. A lot of those skills have been lost. I will cover some of the individual questions that have been raised—I have some figures for the noble Lord, Lord Bassam, on Barnet, for example.

I now turn to high needs. We recognise the concerns of the noble Lord, Lord Addington, and my noble friend Lady Eaton about funding for children and young people with high needs. We are also concerned about provision for excluded pupils. We have produced a range of support for local authorities to help them best use the resources they have available, including a high needs benchmarking tool by which they can compare spending. We have increased overall funding allocations to local authorities for high needs by £130 million last year and £142 million this year. We will increase this further next year, by approximately £120 million. In fact, high-needs funding will be more than £6 billion next year and will have risen by £1 billion since 2013. Every local authority will see an increase to their high-needs funding per head of the population of two to 18 year-olds this year and next, with underfunded authorities receiving up to 6% more next year than in 2017-18.

The noble Lord, Lord Knight, and the noble Baroness, Lady Massey, asked about mental health care for young people. We are very concerned about that—one would be callous to say anything else—and are putting more resources in. Our Green Paper last year set out proposals to support schools to put in place senior leads for mental health, to introduce new mental health support teams working in or near schools and colleges, and a trial of a new four-week waiting time for NHS children and young people’s mental health services. As came up in a Question earlier this week, the NHS itself is committing £2 billion more to mental health, which will include, over the next several years, adding 8,000 mental health professionals to the system.

The noble Lord, Lord Addington, asked about improving teaching for, and increasing awareness of, the kind of challenges that he is so passionate about. We are increasing the level of resources available to help teachers support children with SEN. We have a special resource in the initial teacher training modules. We have online resources for teachers and the department has also contracted with the Whole School SEND Consortium to deliver a programme to equip schools to support children with SEND, which includes dyslexia.

The noble Lord, Lord Addington, was also concerned about education, health and care plans. We carried out a survey last year that showed that 66% of parents are satisfied with the process. This is, of course, a new process and one we aim to improve.

Turning to efficiency and the points raised by the noble Lord, Lord Watson, on high pay, I completely share his concern about high pay in academies. The very first thing I did when I took on this job just over a year ago was to tackle it. We went after about 213 trusts, I think it was—more than 200 trusts—and since then 56 have stopped making those sorts of payments, for various reasons. That is a campaign that I will continue. I completely support the noble Lord in calling out those who do that.

On school resource management more generally, we recognise that schools have faced cost pressures. I want to be clear to the House that we are not in denial about that. The idea that I operate in a citadel is a dream that I can aspire to, but the real world is rather different, and that is why we are providing extensive support to schools to help get the best value out of every pound. We recently launched a strategy setting out the support, current and planned, that we have designed to help schools reduce costs. It provides practical advice on how to identify potential savings from their non-staff spend that can be put back into teaching to get the best value. To put that in perspective, we have a non-staff spend of about £10 billion a year, and we believe that £1 billion of that could be pulled out of the system over the next three or four years.

We know that marketplaces can be complex, leading to schools facing higher costs than they need to. The initiatives in our schools buying strategy aim to reduce this complexity when procuring goods and services. For example, we recently launched an agency supply teacher deal to provide schools with greater transparency on costs. We now have 34 national deals to help schools save money on items they buy regularly.

The noble Lord, Lord Storey, referred to my comments at the Schools & Academies Show last week—he is obviously very thorough in his research. The reason I used a somewhat strong or controversial approach there is that, for a year now, I have been going round forums such as that show giving endless speeches pointing out that we have these deals available for schools. In the audience for the address he referred to were 200 head teachers and chief executives. I asked those who had used our deals to put up their hands. Out of the 200, five put up their hands. When I arrived in this job a year ago, I wrote to 1,300 chief executives of trusts and told them about the deals that were in place. I said, “If they are no good, please tell me”. How many responses did I get? I did not get one response. I understand the pressures in the system, but the system also has to respond to us. Since we are trying to help them improve efficiency, they need to tell us how we can help them more. That is why I made those comments the other day: it was not to be glib. I am a huge fan of spreading best practice and if there were schools in that audience that were doing interesting, innovative things, I want to let other schools know about that. It is important to put that into context because the trade magazines made fun of me, which of course is grist to the mill in this job.

We have created a benchmarking website for schools. This allows them to compare their spending with that of similar schools elsewhere in the country. We continue to improve this service and recently introduced a trust-to-trust comparison functionality. This will help school and trust leaders to identify if and where improvements can be made.

I am conscious of time. On teachers’ pay and pensions, we have recently responded to recommendations made by the School Teachers’ Review Body to confirm the 2018 pay award for main scale teachers. It is our aim that schools continue to attract high-quality recruits—I take on board the many comments about recruitment challenges—and this award will support them to do that. We will see a 3.5% uplift to the main pay range, 2% to the upper pay range and 1.5% to the leadership pay range. In the main pay range, it is important to stress for noble Lords, this is the biggest percentage increase since 2011.

The Minister has not mentioned the fact that schools are meant to meet the first 1% of the pay rise themselves, so that is not funded. Can he explain that? Can he also answer my earlier question as to whether he accepts the figures in the Institute for Fiscal Studies report?

The noble Lord is correct that the first 1% of the pay rise is expected to be funded by schools. We believe that that is possible within the efficiencies that I have mentioned. As for the Institute for Fiscal Studies, I believe that it includes within its figures the 16 to 19 year-olds sector, which has seen a tougher regime than the mainstream system: I acknowledge that. We are fully funding the teachers’ pay award beyond the 1%. This will be worth £187 million in 2018-19 and £321 million in 2019-20.

On pensions, we propose to fully fund the increase in pension contributions recently announced for state-funded schools. We know that school budgets for the academic year have already been agreed and, in most cases, schools have allocated those budgets. That is why we have worked with the Treasury to get agreement to implement the changes from September 2019, rather than April 2019. We will consult on the best mechanism to distribute funding to individual schools and announce how it will be distributed in good time, before schools experience the pressures in September 2019.

As we distribute this funding, we will be at the same time more fairly in line with the best available evidence. For example, by using a range of indicators to measure deprivation we are able to ensure our funding reaches all those pupils who need it. It is not limited simply to those who qualify for free school meals. Alongside the additional needs funding in the formula, we continue to deliver the pupil premium, with more than £2.4 billion this year. This is above the funding that we provide through the national funding formula. We will have invested over £13 billion in the pupil premium since 2011 to improve the outcomes for less well-off pupils.

I will now try to address specific questions raised by noble Lords. The noble Lord, Lord Bassam, asked about Barnet but I think he has gone. No, he has not—apologies. Under the NFF for 2019-20, schools in Barnet will attract £4,999 per pupil. This is an addition of £68 per pupil, or 1.3% compared to the 2017-18 figure. The total cash funding will increase by 3.2% and an additional £7.7 million, once rises in pupil numbers are taken into account. Just to explain how important that is, the marginal additional cost of educating one more pupil in a school is not the average per pupil amount. Barnet’s local authority received £48.1 million for high needs, an increase of £1.2 million compared to 2017-18.

My noble friend Lady Eaton and the noble Lord, Lord Watson, referred to the EPI report and the rise in deficits. They are rising, which is a concern, and I am having to spend a great deal of time on that. We are offering advice to local authorities on how to deal with this, but to put things in perspective, 91% of maintained schools reported a cumulative surplus, or that they would be breaking even in 2016-17, with total surpluses of more than £4 billion against a total deficit figure of less than £300 million.

The noble Baroness, Lady Morris, mentioned the shortfall in academy accounts. This is a myth that I want to slaughter early before it gathers traction. The figure referred to is driven almost entirely by an increase in impairment charges, which are non-cash changes to the value of land and buildings. Academies do not have to spend money on impairment charges, and a more realistic figure is that of the net cumulative reserves of the academy sector, which has seen an increase from £2.1 billion to £2.3 billion.

I share the concerns that the right reverend Prelate the Bishop of Worcester and the noble Lord, Lord Storey, have about rural schools. That is why I attended the Lambeth Palace address earlier this week and met the right reverend Prelate the Bishop of Ely yesterday, when we specifically discussed rural schools. I again make a pitch for multi-academy trusts, which are a very good solution to the problem. It is complicated in rural areas because of distance and how small many schools can be but, as I said in my address at Lambeth Palace, we are committed to always having a presumption against the closure of a rural primary school. They are the glue of these rural communities. My own son went to one, which faced closure last year. Since it was in Norfolk, the noble Lord, Lord Watson, would have been upset if I had intervened, but I did not. However, I am pleased to say that it has now joined an academy trust—one which I can tell your Lordships I have nothing to do with. It is important that we have sparsity funding, which is allocated to rural schools. The NFF allocates £25 million and we also give every school a lump sum of £110,000. When that lump sum is coupled with the sparsity factor, it provides meaningful support.

The right reverend Prelate made particular reference to a school where he said that the head teacher was struggling because the school had been asked to double the number of pupils. We have allocated a tremendous amount of basic need funding, with £7 billion during the current spending review between 2015 and 2021. Over the course of the Parliaments since 2010, we have increased the number of pupils by some 825,000 and they have all been funded. I want to reassure him on that.

The noble Lord, Lord Knight, asked about teacher recruitment and supply teachers, among other issues. I mentioned that we have just created a teacher recruitment service, which is now being rolled out across the country. It is a much more cost-efficient service than that provided in the market generally. Likewise, with supply teachers we have created another portal which has got the main supply firms in the country together. It has made them cap their fees and stopped the pernicious practice of charging a recruitment fee if the supply teacher becomes a permanent employee after a number of weeks. These may be only small things, but they all add up.

The noble Baroness, Lady Morris, raised issues about capital. We have committed some £23 billion to capital between 2016 and 2021 but, significantly, I should stress that we have also reduced the build costs per square metre by some 30%. This rises to 35% per square metre when improvements in efficiency and design are included, so we are very committed to that.

The noble Lord, Lord Storey, gave an example of a friend who wrote about possible boiler problems in his or her school. I am not sure whether he said it was under a local authority or an academy but, if it was a local authority school, we make an allocation to local authorities every year of the school condition allowance. It is then for schools inside a local authority to bid in for that. If it was an academy and had more than 3,000 pupils, the academy trust is given an amount of capital which it can then choose to spend as it sees fit.

This leads me on to the BBC documentary “School”, which I have not seen all of, although I of course will do so. However, I saw the first part and felt it was a very disappointing piece of journalism, because it was clearly set up to show how bad everything was. There are a number of challenges in that trust, but just on repairs one line from the journalist said that there were terrible, draughty windows and that the classrooms were therefore cold. When I looked up the figures for the school condition allowance, this trust receives over £1 million from that a year. The school in question—I think it is called Marlwood—is the biggest and, although we do not publish individual amounts per school, because the academy trust is free to use it as it sees fit, I can assure the House that there was plenty of money to deal with those windows. If it had a better call on its money than windows that increase heating costs, this is the sort of thing I get frustrated about. It is not all as one-sided as people think.

I am running out of time—my goodness, I apologise—and I had better sum up. On efficiencies in schools, I heard the comment from the noble Lord, Lord Watson, about the Harris Federation. The fact is that the Harris Federation is so efficient that it is able to employ centrally 80 school improvement teachers, who go out into its weaker schools—or ones it has just taken on—and provide the extra resource. That is one of the secrets of it being such a high-performing trust. Outwood Grange, a trust in the north of England, does a similar thing: it has 65 centrally employed school improvement teachers doing exactly the same and raising standards. It already has more than 900 pupils registering year-on-year for the schools that it took over from WCAT—a trust that failed—because of the improvements being seen.

I apologise for interrupting the Minister. I just want to be clear for the record that I was not criticising the Harris Federation, for which I have a high regard, but I wish that the noble Lord, Lord Harris of Peckham, had the same regard for the Government’s new funding formula.

I had dinner with my noble Friend, Lord Harris, two nights ago and he is always frank in his views. He is a passionate advocate for his schools and what he has achieved is fantastic. I would like that to go on the record.

I would also like to give an example of a relatively small trust, the Thinking Schools Academy Trust in Kent, which has taken the novel approach of paying £2,000 more to its newly qualified teachers when it recruits them. You may say, “There’s no money around, so how has it done that?”. It has done so because its retention rate on teachers is double the national average. It has only a 10% turnover of staff every year, as against a national turnover of 20%. Thinking in ways like that can make such a difference.

I have been told to stop. I am very grateful to the noble Baroness, Lady Morris—

I am sorry to delay the end, but I asked when the Government were going to review the transition to the new funding formula.

My apologies. We are on a soft programme at the moment that is being reviewed, and then it will be reviewed more formally with the spending review. So I cannot answer that question at the moment. As the noble Lord will know, we are experimenting with giving delegation to local authorities for the high-needs funding block. Some local authorities are using that and some are passing all the funding straight back to schools. That soft launch will last until the funding review, which will be next year.

I thank all noble Lords for their contributions to this important debate. Even more, I pay tribute to the hard work of teachers and schools who give their best to raise standards in our education system. I have worked very closely with these wonderful people and I support the noble Baroness, Lady McIntosh, in what she said about the morale of teachers in the workforce and the fact that they are making a vital contribution.

We are changing the way that funding works. It is not easy, but we are seeing it beginning to bear fruit. This will underpin a further improvement in standards to help create a world-class education system that finally allows every child to achieve their potential, no matter what their background.

My Lords, I thank all noble Lords who contributed to the debate. I do not think that I have ever been in a debate where there has been universal opposition to the position taken by the Government. Not one Member on either side of the House spoke wholeheartedly in favour of the Government’s approach to schools funding. That if nothing else should make the Government and Ministers think again. Every noble Lord who contributed to this debate has contributed to previous education debates. They have real experience in the real world and they have brought their expertise to our debate today—on SEN, rural schools, smaller schools, teacher shortage and supply, creativity in the broader curriculum, and the knowledge they have as a chair of governors who knows their school well.

I spend some time on that because they, like me, must feel very disappointed that the concerns they brought up on behalf of teachers, pupils, parents and wider society seem to have cut no ice with the Minister. I know that his is a tough job and that he has to defend the Government’s position. But my objective at the start of this debate was to secure some acknowledgement that things are going wrong. I have not heard that, and it is disappointing.

I will not answer all the points, because the Minister spoke for a long time and mentioned a lot of small points. I will take up just two or three. Please do not quote the five to 16 funding. If you are a head in a secondary 11 to 18 school and you have a 20% cut in sixth-form funding, it does you no good to be told by the Minister that the five to 16 funding is not bad. It is that difference between the reality in schools and the rhetoric of Ministers that adds to the pressure on school funding and the crisis it has given us.

Schools do not exist in isolation. Cuts in local authority work, cuts to educational psychology, the increase in poverty, and the lack of money in early years all add to the pressures on schools. I did not hear from the Minister that he understood that—and that concerns me. However, I do think that the Minister is right to offer best practice to the Government. It is easy to laugh at a little idea that a Government Minister puts to schools. I will not do that, because it is right. If we can learn from good tips and hints, there is nothing wrong with that; we should continue to allow one school to learn from another.

However, this debate was not about that. It was not about marginal extras. It was about the fundamental level of funding that goes into our schools—and that was not addressed. The only solution to our funding crisis in schools that the Minister is not prepared to countenance is giving them more money—and that is a problem.

I welcome the debate, and of course I welcome the way in which the Minister listened carefully and the thoroughness with which he tried to answer every issue raised by Members. I am grateful for the extra time he gave us in responding to the debate. It shows his care and concern for the job that he has. I do not doubt for a minute his determination to deliver what he said: high standards for every pupil. I just wish he would work with the rest of us who share his passion so that together we can try to get more funding for schools. If we do not do that, he will find in retrospect that his time in office was more of a disappointment than it might have been.

Motion agreed.