School Funding

– in the House of Commons at 4:06 pm on 15th May 2003.

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Question again proposed, That the original words stand part of the Question.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge 4:20 pm, 15th May 2003

It is a pleasure to follow Alistair Burt, who shares a boundary with my local education authority in Cambridgeshire. I am sure that he will be one of the first to acknowledge that, in the past, Bedfordshire has done extremely well in comparison with Cambridgeshire. On many occasions, when parents, teachers and governors in my constituency have wanted to show up the unfairness of the previous funding system, they have pointed out that in Bedfordshire, Hertfordshire and Essex, where authorities attracted the area cost adjustment, schools have sometimes been funded as much as £100 per pupil more than in Cambridge. It has been very hard to explain to parents why that is the case and why a child in Cambridgeshire has been worth so much less than a child in Bedfordshire, Hertfordshire or Essex, when we face similar costs and circumstances, so I can understand why he may well feel a little aggrieved that the huge discrepancy and unfairness are now beginning to be put right.

Cambridgeshire has suffered for many years and is now on the road to recovery, but it is worth looking back to what happened in 1990, when we moved away from the old poll tax system and the then Government introduced standard spending assessments. At that stage, it was impossible to calculate whether an individual county council covered a high-cost area. Cambridgeshire was lumped together with Suffolk and Norfolk, which were low-cost areas, so it did not attract the area cost adjustment given to Bedfordshire, Hertfordshire and Essex. Another problem in 1990 was the fact that Conservatives controlled the county council, as they do now. Their leader, Lady Blatch, believed that it was incumbent on her to reduce spending as much as possible, as well as the poll tax, and subsequently the council tax.

In 1990, Cambridgeshire had historically low spending. The way in which the previous formula worked meant that the area continued to suffer because of the low level that applied in 1990. I am pleased that this Government have had the courage to put that formula right. I believe that we will see a much more equal distribution of funding in future. We have started the process this year and it will continue over the next few years as the damping mechanism evens itself out.

I was surprised to hear Mr. Curry, who is, sadly, no longer in his place, criticise the damping mechanism. I would have been inclined to criticise it, because the funding of my local education authority, Cambridgeshire, ended up at the ceiling because the level that it had been allocated was higher than the ceiling. Cambridgeshire has lost money this year owing to the damping mechanism. I cannot complain too loudly, however, because Cambridge city council, which is the other part of my two-stage local authority system, was funded at the floor, rather than at the ceiling. One of my local authorities is funded at the floor, and the other is funded at the ceiling.

Photo of David Chaytor David Chaytor Labour, Bury North

Does my hon. Friend agree that it is vital that those authorities that have been caught by the ceiling this year receive, as the years go by, the full award to which they are entitled through the new formula spending share, FSS, system, and that the campaign that has been orchestrated this year by the former beneficiaries of the standard spending assessment, SSA, system does not result in clawback and the ceiling being posited as the absolute limit of future grants?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I could not agree more. That has implications for Cambridge city council, which is at the floor. My hon. Friend will understand the dilemma that I face. I think that the money should go into education, and I concur with his view that over the next few years authorities that were funded at the ceiling this year should eventually receive their due in full.

I have to say to my hon. Friend the Minister that Cambridgeshire did not expect to do very well out of the local government settlement. Shortly before the settlement was announced in November, the local authority decided to hold a meeting with head teachers to warn them that although they might be hoping to get a large increase in their funding this year, they should expect very little. Expectations were therefore very low. In fact, Cambridgeshire got £20 million more than it expected in the November settlement, and people were very pleased. That is a much fairer settlement for my local authority.

I want to explain to my hon. Friend the problems that teachers face in my constituency. The average cost of a three-bedroom house in Cambridge is just over £200,000. A teacher who earns about £22,000 and has a mortgage of £150,000—that assumes that they have accumulated considerable savings—will face repayments of around £800 a month: half their take-home pay. That puts teachers in a difficult position. It also puts schools in a difficult position, in that it is hard to attract teachers to Cambridge unless they have some other form of income, such as a partner who is earning a good deal more money.

Another problem is that a teacher earning £22,000 a year will not qualify for social housing. They will have no chance of being allocated a property from a housing association or from the local authority, because they will be deemed to be earning too much money. We face a terrible problem in my constituency, in that the sums simply do not add up. A person on a very low income probably qualifies for social housing—although they will have to wait many years to get it—and a person on a high income can afford to buy into the property market, but a considerable number of people who earn about the average level of income cannot get into the housing market either in the rented sector or in the private bought sector. I am grateful to John Barrett from the Hundred Houses housing society, with whom I had a meeting yesterday, for giving those figures to me.

No redundancies in Cambridgeshire have been reported to me, although it is claimed that the National Union of Teachers conducted a survey in the local education authority area in Cambridge and found that there were to be 25 redundancies. The LEA challenged that and said that the figure is 17, of which seven are due to falling rolls. That leaves only 10 that are due to funding problems. I am not happy about 10 redundancies—I would not be happy about one redundancy—so I have tried to go back over the figures that the Department circulated to us. They have been extremely useful in ascertaining why my authority, which received a generous increase from the Government in November, has 10 redundancies.

My first finding was that although the increase in the schools budget is 11.9 per cent., the amount devolved to schools has increased by only 8.5 per cent. There is thus a gap of 3.3 per cent. between the amount that the schools budget received and that devolved to schools. If I have read the tables correctly, that adds up to a considerable sum of approximately £6.1 million. That buys a lot of education, and it is difficult to understand why such a huge gap exists.

Further on, the table shows an increase in special educational needs provision. That funding is retained centrally and not devolved to schools. I understood that schools were now receiving devolved funding for special needs. Cambridgeshire has increased its SEN funding by 52.8 per cent., which amounts to a large sum. Perhaps it goes to central pupil referral units, which badly need funding. I give Cambridgeshire its due for that. However, it begins to explain where some of the money is going.

Cambridgeshire is also diverting a large sum from revenue to capital, so £400,000 is being spent in capital funding although it was allocated for revenue funding. Again, the Government are right to expect an explanation for that. Capital funding from the Government has not decreased but has increased enormously. It should not be necessary to divert the money from revenue to capital.

Another large sum—£2.6 million—has gone into school contingencies. I find it difficult to explain to my constituents why the LEA would deem it necessary to have such a large amount sitting in a reserve somewhere and not being used for education when teachers are being made redundant in some parts of the county.

My hon. Friend the Minister is right to question the schools and the local education authority about how the money has been spent, because large sums are being taken out of school budgets without any immediate and obvious explanation and spent centrally by the LEA.

I find this debate quite extraordinary. I came into the House in 1992, when local education authority budgets were being reduced year on year. I saw cuts that really hurt in my schools in Cambridgeshire. I saw teachers being made redundant, class sizes increasing, and schools having to drop subjects that they could no longer resource. Under this Government, Cambridgeshire has seen a 60 per cent. increase in funding since 1997. That is something to be proud of, and I am astonished that the Conservatives, having presided over the previous dismal decline in funding and shown such a lack of appreciation for education, should now choose to criticise this Government, who have done so much for education.

Photo of Sir Sydney Chapman Sir Sydney Chapman Conservative, Chipping Barnet 4:35 pm, 15th May 2003

I am grateful to be called to make a short contribution to this debate, and it is good to follow Mrs. Campbell. Inevitably, and understandably, when discussing an issue such as this, we look at how it affects our local authority, and I shall be no different. The London borough of Barnet has been very badly done by on any criterion that the Secretary of State might care to choose. I shall give the House the basic facts as though looking through the other end of the telescope. In round figures, Barnet received £208 million in revenue support grant last year. This year, it will receive £216 million, which is an increase of 3.5 per cent., slightly ahead of inflation as measured by the retail prices index—I do not think that is the true measurement in relation to education expenditure—which puts it in the lowest tranche of local education authority increases.

The Department for Education and Skills has required Barnet to fund schools to the tune of £147 million this year. That means an increase of £14.5 million, but the borough has received only an additional £8.1 million to cover expenditure not only on education—which represents about half its total expenditure—but on all the other services as well. The schools have found that they need an additional 8.1 per cent. increase in funding just to stand still, never mind to make improvements. The reasons for that minimum 8.1 per cent. increase include an increase in teachers' pay, the increased employers' national insurance contributions—which will cost £1 million in Barnet—the withdrawal of some specific grants that had previously been made, and, by far the greatest item, a huge increase of £4.4 million for additional contributions to teachers' pensions.

That is not the end of the matter, however, because the Secretary of State has changed the formula for money going to schools so that some are worse off, and some are even worse off. It has been a considerable feat for Barnet council to have been able to pass on to the schools the full £14.5 million that the Department for Education and Skills advises, even though it has received only an additional £8.1 million for all services. This analysis of the schools budgets has shown a shortfall in Barnet of some £8 million, in terms of schools setting a standstill budget.

The result of all this—the matter has been carefully gone into, as my next-door neighbour, Dr. Vis, who is in the Chamber, will confirm—is that only five out of 27 secondary schools are able to set a balanced budget. The rest face deficits that, in the case of 14 of the schools, will be more than £100,000. In some cases, they will be substantially more. One of my own local secondary schools, East Barnet school, faces a deficit of £300,000. This affects the primary schools to a lesser extent because they are smaller, but they face similar difficulties to the secondary schools.

I know that the Ministers will have received papers from the chairman of our LEA, Councillor Lynne Hillan—the cabinet member for education—giving this analysis in much fuller detail, and papers on the effects that changes in the standards fund will have on Barnet and on the accelerating cost pressures on schools. I accept that all these matters relating to the funding of education involve very complicated formulae, but I sincerely believe that the Government are hiding behind these complex arrangements rather than facing up to what they should be doing.

School funds retained by Barnet amount to the absolute minimum. They have been retained for special educational needs and out-of-school education, about which much has already been said. I might add that when Labour and the Liberal Democrats ran the council it greatly underestimated the costs of SEN and providing for children with difficulties. That is why the costs had to increase this year.

Barnet was one of the 19 LEAs criticised by the Secretary of State in connection with contingency funds, but they constitute less than 1 per cent. of Barnet's entire schools budget. The money is needed to finance any changes in statutory arrangements for children with special educational needs, and to cover a possible change in pupil numbers as between schools in September. The LEA has promised that any unallocated money will go straight to schools—but, which is perhaps more important, the schools have asked for the money to be retained, because they realise that certain schools could experience severe difficulties.

One school had announced that it was to make four people redundant, but fortunately—at least in one sense—there have been four voluntary early retirements, so redundancies may not be necessary. The school, incidentally, is a primary school, not a large secondary school. Of course, there will still be fewer teachers in the coming year following the voluntary retirements.

Barnet intends to introduce licensed deficits in an attempt to avoid staff reductions. From what the Secretary of State said earlier, I understand that it can now do that. The deficits, however, will have to be paid back somehow, at some point.

All the evidence suggests that funding will continue to be inadequate. The Government's spending assessment makes it clear that they want Barnet LEA to make spending commitments over the next three years, but they will not reveal their likely contribution, at least at this stage. It will come as no surprise that, as a result of that and other events that I cannot discuss now, Barnet has had to increase its council tax by no less than 24 per cent. this year. It could have been 35 per cent., but Barnet has tried to reduce other services—some of them badly needed—and to make efficiency savings in the non-education sector.

I believe that the Government are hiding behind complex distribution arrangements. They keep money back for special awards. A month does not go by without a Minister writing, "Please keep this confidential until tomorrow, but we are announcing beacon awards here or baubles there." Such awards, even if they relate to the previous financial year, should be paid upfront at the beginning of the current year so that schools know immediately how much they will receive and can plan in a sensible and co-ordinated way.

The Secretary of State accused Barnet of holding back money that should go to schools. Barnet has brought in an independent expert, who will publish her report tomorrow. I am prepared to stand by what it says, and I hope that the Secretary of State will do the same. I hope that if he finds that Barnet is not to blame but he is, he will have the grace to apologise, and perhaps recompense Barnet for the way in which it has been treated.

Barnet's schools, I am proud to say, have a good reputation. They are among the best-performing schools in the country. They deserve something better than the treatment they have received from the Government. There is a silver lining to this murky, thunderous cloud—head teachers, staff and the local education authority are working much more closely to try to overcome those problems. I hope that they will continue to work together to understand each other's point of view, and I hope that the Government will form part of a triumvirate that will result in a fair funding settlement.

Photo of Graham Brady Graham Brady Shadow Minister (Education) 4:45 pm, 15th May 2003

It is a pleasure to reply to the debate and follow my hon. Friend Sir Sydney Chapman, a doughty campaigner for Barnet and its excellent schools, which are suffering badly under the Government.

The Secretary of State began by saying that he no longer blamed local education authorities. He continued, in a murky, obscure part of his speech, to talk about problems in distributional respects and inter-quartile measures. He then went back to blaming local education authorities. He failed throughout to answer the questions put to him by my hon. Friend Mr. Green and to respond to his concerns about the future of the specialist schools programme and whether capital projects to provide facilities for disabled pupils would be protected. Above all, he failed at any point to apologise for his role in this sorry saga.

We have had an interesting day. This morning, on the "Today" programme, the Secretary of State said that he expected

"no significant redundancies amongst teachers".

Does he not understand that a single teacher redundancy resulting from the school funding crisis is significant? One teacher losing her job is more significant than one Minister losing his. My hon. Friend the Member for Ashford said at the outset of our debate that the Minister for School Standards should consider his position. He has now had three hours to do so, and we look forward to hearing his response—[Interruption.] He says that he is off—there will be a celebration in staff rooms throughout the country at that news.

This morning, the Secretary of State denied that he is proposing a quick fix. He may be right about that because a quick fix is the last thing that schools will be able to achieve if all their maintenance budget is used elsewhere. As Doug McAvoy of the National Union of Teachers said this morning—[Hon. Members: "Ah!"] Government Members may scoff, but it is no coincidence that the NUT now says that its relationship with the Government is the worst it has ever had with a Government. Doug McAvoy said of schools:

"What are they supposed to do when the boiler breaks down in the winter? Sack the deputy head?"

The Secretary of State has said that this is a difficult year with unique circumstances and has spoken of one-off pressures relating to teachers' pensions and national insurance. However, they are not one-off pressures—the tax on jobs and teachers' pensions will be there next year, the year after that, and the year after that.

Photo of Graham Brady Graham Brady Shadow Minister (Education)

I will give way to the hon. Gentleman, who is seeking to intervene in a debate about matters affecting schools in my constituency, only if, in Scottish questions, I can ask about schools in his constituency.

Two weeks ago, the National Association of Head Teachers said that 78 per cent. of schools in England face a budget shortfall, and that 17 per cent. of schools have experienced a cut in cash terms in their budget. Mr. David Hart, the general secretary of the NAHT has said:

"The Government has failed schools on a number of counts. These decisions have led to redundancies, curriculum damage and increased class sizes. This is before schools even make a start on trying to reduce workload."

Photo of Mark Francois Mark Francois Opposition Whip (Commons)

My hon. Friend will be aware that in counties such as Essex a major cause of our schools' suffering is the new local government grant funding arrangements. He knows that Essex had the worst settlement of any county in England. We are extremely worried that this is not a one-off year but the start of a process in which things only get worse. People in Essex want a fair deal from the Government, but they are not getting one.

Photo of Graham Brady Graham Brady Shadow Minister (Education)

My hon. Friend is right. Essex is one of the authorities wrongly blamed by the Government, given that it has passed on to schools all the money that it was expected to pass on.

David Hart went on to say:

"This year's additional money has been completely wiped out by extra demands on budgets. We are in negative territory."

So was Mr. Hart persuaded by what the Secretary of State had to say this morning? The NAHT said this morning that

"we doubt very much whether the prospects of job losses, increased class sizes and shortened weeks can be staved off. Converting capital into revenue and licensing deficit budgets could help some schools but these measures, that are akin to 'rearranging the deck chairs on the Titanic', will not provide the relief that all schools in trouble desperately need now."

We also heard this morning from the National Union of Teachers:

"This year's quick fix is next year's major problem . . . His funding announcement represents no solution, just a refusal to acknowledge the obvious. The Government has got its sums wrong and schools are suffering as a result."

The funding crisis is so bad that, in my constituency, the head teacher of the Bollin primary school, Mrs. Marilyn Downs, and a colleague have been pushed to the point where they are prepared even to jump out of an aircraft to raise sponsorship for their school's core budget. [Interruption.] The Minister for School Standards has caused the problem in that budget, and I wonder whether he would care to join me now in pledging to sponsor Mrs. Downs in her efforts. He can respond when he comes to the Dispatch Box, or later on.

I should like to put this question from Mrs. Downs directly to the Minister. As she said to me:

"Isn't it appalling when we have to keep our schools going through sponsored events like this?"

Well, isn't it? Ministers will be judged not by what they say, but by what they do. [Interruption.] The Secretary of State says, "That's clever," but he can take no solace. His record to date in his relatively short period in office has been dismal, and the same goes for his hon. Friends.

Will the maintenance budget for Gospel Oak school, in Camden, be sufficient to stop the cuts of £127,000 that, according to Fiona Millar, it faces

"even if we use all of our reserves"?

Will today's announcement make good the £600,000 shortfall at Whalley Range high school, in Manchester, which prompted Dame Jean Else to consider resignation? Will the Minister guarantee that she will not have to make a single one of her valued staff redundant?

Photo of Keith Simpson Keith Simpson Shadow Minister (Defence)

I am very grateful to my hon. Friend. I have just spoken to a reporter from the Eastern Daily Press who has been following the Secretary of State's announcement with a great deal of interest. The reporter phoned a dozen headmasters in Norfolk, all of whom were amazed and outraged at the idea that money should come from contingency funds. Much of that money is for the maintenance of buildings, to which restrictions apply because of factors such as health and safety at work. So, in fact, the Secretary of State's latest announcement has been a complete and utter disaster as far as salving his reputation is concerned.

Photo of Graham Brady Graham Brady Shadow Minister (Education)

My hon. Friend makes a valuable point, and in doing so he praises what is obviously an excellent newspaper that is doing an excellent job in holding the Secretary of State to account.

Will schools such as St. Marylebone Church of England school in London still have to ask parents for £100 donations to stave off the need for redundancies? [Interruption.] Ministers will recall that the Oratory school had to do the same thing a few years ago, although we were never told whether all the parents were prepared to put their hands in their pockets for the same purpose. Will the 92 redundancies in Norfolk that we have heard about have to go ahead?

So what will the consequences be? How many schools will still have to sack teachers? Other schools will not replace staff who leave. Necessary maintenance will go out of the window. Schools will struggle to implement the first phase of the work load agreement, and the picture for next year looks even worse. We are still left with the grossest act of betrayal since Labour promised that its priorities would be education, education, education. As one head teacher told me,

"They are going back on all they have promised us—withdrawing funds bit by bit whilst blinding the general public with statements that yet more money is being put into education".

What Labour is delivering is cuts, chaos and confusion; what we are promising is a fair deal for all schools.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills 4:54 pm, 15th May 2003

It will come as a surprise to those of my hon. Friends who have joined us recently, especially having heard the previous contribution from Mr. Brady, that this has actually been quite an interesting debate. It has revolved around three issues: how much money has been distributed to local authorities, how they have distributed it to schools and how schools can be helped through this unique year of change in the local government funding system. I will address each of those issues.

I listened carefully to the contributions of my hon. Friends the Members for Chatham and Aylesford (Jonathan Shaw), for Bury, North (Mr. Chaytor) and for Cambridge (Mrs. Campbell), and to those of the hon. Members for North-East Bedfordshire (Alistair Burt) and for Chipping Barnet (Sir Sydney Chapman). I shall focus, however, on two particular speeches. Mr. Willis started well, but he accused me of making up figures at the Association of Teachers and Lecturers conference. He then said that I had based my remarks on a survey of 75 LEAs that showed that £250 million was still to be allocated to schools. However, by 2 May, it was clear that the amount was £533 million. The survey was very accurate. It represented half the total of LEAs, and it turned out to be true.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

I am grateful to my hon. Friend for giving way. He mentioned 75 LEAs: 150 exist, and Leicestershire is the 150th in terms of grant per primary school pupil. It is a great shame that much of the great progress that has been made in the past six years—on infrastructure, class sizes and standards—is being imperilled by the very poor settlement that we have received. Will my hon. Friend return to last year's expenditure levels?

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

I know that my hon. Friend shares my pleasure that every LEA in the country has benefited from the increased funding made available around the country over the past six years.

Photo of Mr Paul Marsden Mr Paul Marsden Liberal Democrat, Shrewsbury and Atcham

I thank the Minister for giving way. What would he say to teachers in Shropshire, whose LEA has passported 107 per cent. of the funding to schools? The LEA is faced with a cash shortfall this year of £3 million, which could result in redundancies of between 20 and 100 teachers.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

I would say to Shropshire teachers exactly what I have said to teachers elsewhere—that they must make sure that the money allocated to their LEAs is passed on to schools, and that they should make use of all the flexibilities that the Government are making available this year.

I want to pick out the speech from Mr. Curry. He spoke with genuine knowledge and concern about the issues. I got lost in his metaphors involving puppeteers circling around lamp posts—or was it drunks circling around lamp posts and puppeteers getting their strings tangled? However, he made a set of serious remarks, and explained very clearly the process by which the Government allocates money to LEAs, and how they then allocate it to schools. That the right hon. Gentleman was in direct contradiction to Opposition Front-Bench policy is a fact on which I shall not dwell for the moment.

Hon. Members of all parties raised issues on behalf of their constituents. We take those very seriously, as we do all the representations from head teachers and teachers. The hon. Member for North-East Bedfordshire was good enough to say that the Government take what he called a "micro-interest" in all schools. That is absolutely right: we are very concerned to understand what is going on at school level.

However, it is noteworthy that, for all the talk of the letters that have been received from head teachers and teachers in their constituencies, Opposition Members, in their motion and speeches, ignored completely the improvements achieved in our schools over the past six years. Those improvements have been delivered by precisely those professionals whom they seek to defend.

That rising achievement in our schools is now being noticed around the world. Our 10-year-olds are ahead of their counterparts in all countries, apart from the Netherlands and Sweden. Our 15-year-olds perform in the top quartile of countries in maths, English and science. More of our young people are qualifying for university with higher achievement and better qualifications.

That rising achievement is not an accident. It is the product of deliberate choices. The number of failing schools has been halved as a product of policy. The approach to teaching in primary schools has been improved, and that is a product of policy change. Standards in our toughest areas are rising at twice the national average, thanks to the introduction of the excellence in cities programme. No choice is more significant than the raising of funds for those objectives.

I am happy to correct what was said in a previous debate. Mr. Green was not in charge of education policy in the No. 10 policy unit when the previous Government were in power, but it is a fact that, in that period, spending per pupil declined by more than £100 per year in real terms. It is little wonder that Britain dropped to 42nd in the world education league.

Since 1997, that trend has been reversed. When we hear crocodile tears from Opposition Members, we must remember that they are the ones who cut our education system, and that the Labour Government have invested in it. We are increasing spending fast, and we have an expanding education system rather than a contracting one. The biggest threat to progress are the Opposition.

This year, there will be significant increases in spending in our schools. Cash increases of about £2.7 billion represent a rise of 11.6 per cent. The Opposition say that there are increased pressures. Of course there are, and let us look at them. There are increased pressures for money, teaching staff and support staff. The money is promoting recruitment and retention in our schools. New teachers are 70 per cent. better paid, in real terms, than in 1997. We say that that is good. Experienced teachers are 22 per cent. better paid, in real terms, than in 1997. That is also good. [Interruption.] Someone mentions pensions. The teachers' pension fund has been secured at a cost to the Government of more than £500 million. Head teachers are also better paid by between 24 per cent. and 41 per cent. Of course there are extra pressures on our education system, but are the Opposition saying that we should pay our teachers less, underfund the teachers' pension scheme and deny head teachers the salary that they deserve? They will not admit it. They are certainly not saying that we should increase education funding, because they do not support even the current level of investment.

Photo of Mark Francois Mark Francois Opposition Whip (Commons)

On a day in which another pensions fiasco has been announced, the Minister is indeed brave to focus on that point. Of course teachers' pensions should be properly funded, but the Minister must realise that the cost falls on schools, which need extra resources to fund it. The Government are not providing the money to meet an important teachers' need. That is the issue.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

The House will be disappointed that the hon. Gentleman has not stood up to congratulate the Government on a £610 per pupil increase in education funding, to congratulate the schools in his constituency, or to ask questions about his local authority, which has millions of pounds still to be allocated to its schools. We know that Conservative Members' compassion is skin deep and their promises empty. They complain about pressures, but will not reduce them. They are against more spending, but suggest that it is necessary. Their motion blames the new local education authority funding system, but the last one was out of date, incomplete and unfair, so it was right to reform a system that was based on the 1991 census.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. If Mr. Swayne wishes to intervene, he knows the method that he should use.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

I hope that the hon. Gentleman is not taking lessons from his new friends in the National Union of Teachers. I should like to present an interesting quotation:

"The Conservatives are closer now to the NUT than they've ever been and we hope for closer co-operation in the future."

That was said by Mr. Doug McAvoy, the general secretary of the National Union of Teachers. I would suggest that the hon. Gentleman does not follow that up.

The reforms to local education funding were the product of widespread discussion, debate and consultation. We were asked to simplify the system and it is now based on only three factors: funding per pupil, recognition of need and recognition of additional cost. We were asked to make more effective recognition of poverty in the new system, notably for children coming from low-wage families. That is why for the first time we have built the working tax credit into the formula. We were asked to reduce the ring-fencing of grants, and we have transferred £500 of specific grant into general funding. The new system ensures that similar pupils in different parts of the country are given a similar level of funding by the Government. As my hon. Friend the Member for Cambridge pointed out, her constituency is now being funded on an equitable basis for the first time. That is the foundation of the new funding system.

School funding is not a matter for Whitehall alone, but a joint responsibility between central and local government. We rely on that partnership, and local government has an important and legitimate role in taking decisions about local priorities, local change and school places for every child. It is for local authorities to pass money on to schools. We give them money by a simple formula and they pass it on to schools by a formula.

On 2 May my right hon. Friend the Secretary of State made it clear that there are significant variations in the approach—not just for 19 local authorities, to which some hon. Members have referred, but for all 150 authorities listed simply in alphabetical order. The variation in the practice of local authorities makes a significant difference to the allocation of funds to schools. That is the foundation for the variation described by hon. Members today.

Photo of Desmond Swayne Desmond Swayne Opposition Whip (Commons)

How does the Minister explain the problems faced by local education authorities that have handed over all the money? That is the problem.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

The hon. Gentleman has obviously not been listening to the debate. The simple answer is that there is a formula, which distributes money in widely different ways between schools within local education authorities. That is what explains the difference. Secondly, significant sums remain to be allocated in LEAs across the country.

Photo of David Miliband David Miliband Minister of State (School Standards), Department for Education and Skills

The hon. Gentleman shakes his head, but I can tell him that over the last three weeks, money has been delegated—and not only by North Somerset and Bath. Bradford has £3.6 million, Birmingham £12.5 million, and there is also Camden and Suffolk. All those LEAs have devolved more money.

Photo of David Maclean David Maclean Shadow Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put,

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 128, Noes 296.

Division number 200

See full list of votes (From The Public Whip)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 263, Noes 144.

Division number 201

See full list of votes (From The Public Whip)

Question accordingly agreed to.

Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House applauds the increased funding that the Government has made available to LEAs since 1997, which is up in real terms from £2,800 per pupil to £3,600 for 2003–04, with further planned increases to almost £3,800 by 2005–06; notes that the increase in funding for 2003–04, at £2.7 billion, more than covers the additional cost pressures from pay, pension and price increases; recognises that the new LEA funding formula constitutes a welcome move towards a fairer distribution between LEAs, but coupled with the changes to the Standards Fund has resulted in some turbulence in the system; endorses the action the Government has taken in response, namely to provide a further £11 million to London authorities and £28 million to authorities with the lowest overall increases; further notes that the performance pay grant for 2003–04 has been increased to meet all of schools' commitments arising from the grant provided in 2002–03, and to cover the costs of similar progress for teachers becoming eligible for performance pay in September; welcomes the decision by the great majority of LEAs to pass on in full the increase in schools funding to their schools budgets; supports the work the Government is doing with LEAs to understand the decisions they have taken in distributing their funding between central services and the individual budgets of schools; welcomes the further measures the Secretary of State is taking to provide LEAs and schools with flexibilities to avoid excessive instability within schools; and calls on the Government to consider what changes are needed for next year.