Backbench Business — School Funding Formula

Deregulation Bill (Programme) (No.3) – in the House of Commons at 6:16 pm on 10th March 2015.

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Photo of Robin Walker Robin Walker Conservative, Worcester 6:16 pm, 10th March 2015

I beg to move,

That this House
believes that, given the continued fiscal pressure on the schools budget in the next Parliament, the speedy implementation of a fair and transparent school funding formula is more urgent than ever.

It is a pleasure to open this debate and to speak on an issue that I have raised during each year of my time in Parliament, and one that still needs addressing and never more urgently than in the run-up to a crucial general election. I hope today’s debate can inform the manifestos of all the main parties and lay down a challenge for the next Government to deliver on.

Today’s motion has cross-party support; more than 64 Back Benchers from across the House have signed it. I am very grateful to the Backbench Business Committee for recognising that it is an urgent and important enough matter to merit debate in the main Chamber. I am also very grateful to the two vice-chairs of the F40 campaign, who are both in their places: the hon. Members for North Devon (Sir Nick Harvey) and for Scunthorpe (Nic Dakin). We are here to correct a long-standing injustice, and it is a credit to Parliament that there is such a strong turnout.

We have seen some progress on this issue, but the key decisions on the shape of a new national funding formula have been delayed until after the 2015 spending review. To say that that was disappointing in a place such as Worcestershire, which has lingered at the bottom of the funding table for far too long, would be an understatement. One local head teacher, in a letter to our local paper, recently described it as “immoral” that the issue of fair funding has been unaddressed for so long.

Local MPs have repeatedly made the case for a new formula that is based more on activity and the characteristics of schools and their catchments, and less on accidents of geography. We have attended debate after debate on this issue, and not just in the current Parliament. Colleagues with experience of previous Parliaments have often regaled me with their efforts to press this issue and point out the glaring disparities that affect their schools and constituents.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater and West Somerset

My hon. Friend is absolutely right. I have been here since 2001 and this has been a thorny problem since then. I was in the same intake as the Minister, who is in his place. I hope that when he gets the chance to speak he will address the situation in Somerset, where we face the same problem as Worcester.

Photo of Robin Walker Robin Walker Conservative, Worcester

My hon. Friend is absolutely right. We have seen the gap between the best and worst-funded authorities continue to widen long after the flaws which caused it were acknowledged.

Photo of Neil Parish Neil Parish Conservative, Tiverton and Honiton

I thank my hon. Friend for leading this debate. In Devon, we have now seen £193 in extra funding per pupil. That is great news, but there is still a big gap to fill, especially with so many small rural schools and a sparse population. We do a very good job with very poor funding. I look to the next Parliament to do better.

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. May I point out to colleagues that in addition to the hon. Member for Worcester and the Front Benchers, who need briefly to speak, there are on my list nine colleagues who wish to speak? The hon. Gentleman is perfectly entitled to make a full contribution, but I know he will find that helpful to weigh in the balance.

Photo of Robin Walker Robin Walker Conservative, Worcester

I thank my hon. Friend, who has always been a great champion for rural areas.

F40, the cross-party campaign formed more than 20 years ago to represent the lowest-funded areas, used to rail against a gap of hundreds of pounds in funding between rural areas and their urban areas, and in Worcestershire, local MPs spoke out against a gap that doubled during the 13 years of the previous Labour Government. Until the current year, it had never once declined. When the gap started, there was no justice in the fact that similar schools serving similar catchments with similar levels of deprivation on different sides of a random border could receive wildly different funding. As the gap has widened, so the challenge for schools to raise the attainment of all their pupils has become greater and the challenge to hold on to their best teachers bigger. Although the pupil premium has helped some schools in F40 areas, it has also added to the disparities by piling targeted funding for deprivation on top of the untargeted funding that went before.

Photo of Anne Marie Morris Anne Marie Morris Conservative, Newton Abbot

Does my hon. Friend agree that there is particular difficultly in fast-growth areas, such as Devon, where there are large distances to take children back and forth to school?

Photo of Robin Walker Robin Walker Conservative, Worcester

My hon. Friend is undoubtedly right that there is a problem in fast-growth areas. As I shall explain shortly, per-pupil funding is crucial to this debate.

Photo of Neil Carmichael Neil Carmichael Conservative, Stroud

I want to draw the House’s attention to Ofsted’s excellent report on the long tail of underachievement, which identifies rural and coastal areas among those parts of the country facing difficulties, as is precisely reflected in the F40 group. Is that not one of the reasons we have to tackle this problem?

Photo of Graham Stuart Graham Stuart Chair, Education Committee

Yet again, my hon. Friend is leading off the debate—in 10 years in the House, I have raised this matter only eight times, so I stand behind him in that respect. Does he agree that the Government did the right thing last year by closing the gap a little but that we need all parties to commit to a new funding formula in the next Parliament, as the Conservative party has done, to ensure that we have a fair and just settlement, not just in rhetoric but in reality?

Photo of Robin Walker Robin Walker Conservative, Worcester

I absolutely agree with the Chairman of the Education Committee and join him in that plea to all parties to deliver a fair funding formula, as has been promised.

Photo of Guy Opperman Guy Opperman Conservative, Hexham

The other point that surely needs addressing is the pupil premium. Although we all support it as a principle and in its effects, is it not a blunt instrument, because it skews an already unfair system? Does that not need reviewing?

Photo of Robin Walker Robin Walker Conservative, Worcester

What needs reviewing is the underlying system of school funding to create something fairer and more transparent. I believe that the pupil premium can play a role in such a system, but my hon. Friend makes a good point.

I welcome the fact that last year saw the first real step forward. The schools Minister, with help from the Chancellor, was the first person to provide funding to address the funding gap. His announcement of what started as £350 million and then grew to £390 million of extra funding to help the lowest-funded areas was a genuine step forward and the first concrete sign that real change was on its way. At the time, Members spoke of a down payment and welcomed the benefits for those who stood to gain. We queried elements of the allocation and pushed for F40 areas to receive more of it, and between the initial allocation and the second, the F40 areas did indeed receive more—so the parliamentary pressure made a difference.

This first small step will mean £6.7 million for Worcestershire schools this year—an additional £97 per pupil—which will make a real difference from April onwards, and it will mean that this year, for the first time in decades, the gap between schools on our side of the border with Birmingham and those on the other side will grow smaller rather than wider. However, cost pressures on our schools will make these victories seem minor. We will all have heard from teachers and head teachers in underfunded areas who say that costs are running ahead of their funding. I have written to Secretaries of State and Ministers countless times with local examples.

There is not time in this debate to enter into the complexities of the funding system itself—a system so devilishly complex that my hon. Friend Richard Graham compared it to the Schleswig-Holstein question—but fortunately, F40 has a dedicated team of governors, teachers, heads, councillors and council officers who have worked up their own proposed changes to the funding formula. Their analytical work has been robust, and their proposals would achieve a formula based on the nature of the school and its catchment, funding a small lump sum for secondary schools and a slightly larger one for primary schools to help smaller schools; providing a proportion of funding for deprivation; and providing smaller proportions for low prior attainment, English as an additional language and sparsity—there is more work to do on sparsity.

Photo of Richard Drax Richard Drax Conservative, South Dorset

On the question of sparsity, the rural schools of South Dorset are trying to form multi-academy trusts, and what is so extraordinary is that the funding is different for each pupil, depending on which local authority they come from. This is another anomaly that we must sort out.

Photo of Robin Walker Robin Walker Conservative, Worcester

My hon. Friend is absolutely right. The emergence of multi-academy trusts provides another argument for fairness in the funding system.

Photo of Robin Walker Robin Walker Conservative, Worcester

I am afraid not, I am sorry.

The F40 finance group recently met Department for Education officials and discussed these proposals. The initial feedback was very positive. It was clear that under F40 proposals there would be more gainers and fewer losers than under the current formula.

The only challenge now appears to be the political will to deliver. We are beginning to hear from all the parties what they will be offering in their manifestos. We hear that the Conservative party would protect the cash settlement for schools in per-pupil terms. The coalition is already targeting money per pupil numbers. The Labour party seeks to protect the overall schools budget and the Liberal Democrats to protect the whole of the two-to-18 education budget. The problem with any protection for budgets as a whole is that it might produce a reduction in per-pupil funding, as pupil numbers are set to grow rapidly. It has been argued that Labour’s promise of an inflationary increase in this era of low inflation could deliver lower per-pupil funding than the Conservative proposal of flat cash per pupil.

Whatever the outcome of the election, it is clear that there will be ongoing fiscal pressure on all our schools. It is perhaps understandable in that situation that Ministers are keen to avoid turbulence, but avoiding turbulence has been the main reason for not going further and faster on school funding reform in the lifetime of this Parliament. It can no longer stand. We need to make it clear that to translate any freeze in per-pupil spending overall into a freeze in the unfair formula that currently allocates it would be totally unacceptable.

We can see all too directly the pressures on schools in all of our constituencies. We know that those pressures have built up not just in a few short years of tighter budgets, but over decades of comparative underfunding. It is simply not possible in these circumstances to justify the £900 per-pupil gap between Worcestershire schools and those in neighbouring Birmingham; the £700 gap that used to exist between Leicestershire and Leicester; or the £550 gap between Devon and Bristol—still less the mind-bogglingly vast gap between the best funded and worst funded authorities. In rich London boroughs such as Kensington and Chelsea, the per-pupil funding is £5,866 and it is £6,221 in Islington, while in poorer northern towns such as Barnsley it is more than £1,700 less.

I say to Ministers and shadow Ministers that F40 has made detailed proposals for change and I hope that they can accept them. They should deliver us a fair formula and help us to close the gap between schools that have missed out for far too long and those in the best funded areas. Overall, the allocation we have put forward would be more even, fairer and would target deprivation more effectively. The pressure on the education budget makes the timetable for delivering this new formula more urgent than ever. F40 members recognise that minimum funding guarantees may be needed to smooth out the introduction of a new formula, but we are not prepared to wait for ever while they are applied. We therefore call for the move to be conducted in a maximum of three years.

We have come a long way. The argument for fairer funding has been accepted on all sides. We must now be clear that its non-delivery—whether it be for political or administrative reasons—would be totally unacceptable. To entrench the progress made, I urge the Minister to ensure that the £390 million already secured for the lowest funded areas should be baselined in the education budget for 2016-17 so that the move to a new formula will start with that downpayment taken into account. I challenge all parties to address that challenge and to deliver the fair and transparent formula that our constituents deserve.

Several hon. Members:

rose—

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. I propose that the Front-Bench spokesmen should be called at or as close as possible to 6.50, which would allow five minutes to each. That leaves 22 minutes and there are nine people on my list. I will leave hon. Members to do the arithmetic themselves. It is not binding, but I invite Members to help each other.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons) 6:28 pm, 10th March 2015

I congratulate Mr Walker on his leadership of this debate and on his leadership on this issue during this Parliament. He sets an example to us all.

It is clear what the motion is asking the next Parliament for:

“the speedy implementation of a fair and transparent…funding formula” on an acceptable time scale. Of course, what is fair and transparent to one person is not necessarily so to another—and therein lies the challenge for the Front-Bench team when it is time to deliver. Mr Stuart, the Chairman of the Education Committee, is right when he says that this needs to be fair and just. We can all sign up to that, but, as the hon. Member for Worcester says, it should not be an accident of geography that determines how much funding a school, a pupil or a student gets. It should be done fairly and transparently.

Photo of Heather Wheeler Heather Wheeler Conservative, South Derbyshire

Does the hon. Gentleman agree that, as we now have an extra chunk of money from the last Budget, it should be put on the baseline, as was suggested by my hon. Friend Mr Walker? At least that would give future Governments a fairer point from which to start.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Any progress should certainly be built on by a future Government. North Lincolnshire, the area that I represent, is historically underfunded. We stand to benefit and to be a potential winner, but the change must be smoothed for those who are less advantaged, and I think that the F40 principles will help in that regard. Core entitlement at pupil level is the main building block that will give schools access to similar resources for basic classroom costs, wherever those schools may be, but pupil needs beyond the core entitlement will also be recognised. Factors such as deprivation, special educational needs and the existence of small schools in small communities should be taken into account. That is the second building block. As for the third, the existing dedicated schools grant structure should continue to be part of the framework. I think that those three principles will be helpful to any future Government.

When we talk about school budgets, we should recognise that funding for those over 16 has been particularly badly affected in recent years.

Photo of Richard Graham Richard Graham Conservative, Gloucester

The hon. Gentleman is absolutely right. It is hardest for schools with sixth forms, and those that do not have a very large percentage of disadvantaged pupils who receive the pupil premium. Does the hon. Gentleman agree that it is essential to get the core funding right for the F40 group, so that those schools can balance their books in the next few years?

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

It is indeed. We should focus on giving young people equal opportunities wherever they are.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

As my hon. Friend knows, debates about the school funding formula have been continuing for many years. I remember them taking place about 25 years ago. What is more important is that a quarter of the further education budget is to be cut at Coventry City college.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

My hon. Friend has made a good point, which illustrates the complexity of the issue and the challenges that it poses. For example, sixth-form colleges currently receive no VAT relief, whereas other institutions do. One political party is going into the next election promising to create 500 new institutions. We have to ask ourselves whether that is good value for money when there is pressure on the basic budgets for young people who are in our existing institutions. It is a simple observation, and with that simple observation I shall end my speech.

Several hon. Members:

rose—

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Chairman of Ways and Means

Order. Will Members now try to stick to a two-minute limit?

Photo of Graham Stuart Graham Stuart Chair, Education Committee 6:33 pm, 10th March 2015

It is a pleasure to follow both the excellent speakers whom we have heard so far. We all agree on the need for a fair and transparent system. As has been said, much of that is in the eye of the beholder. However, the Ministers in the last Government whom I lobbied knew perfectly well that the system was not fair, although they did not have the political courage to face down their own people and say, “We are going to have to redistribute your funds to areas that we do not typically represent, because that is obviously fair.” This is not just about perception. I have never heard anyone attempt to explain why the present system is fair, because they cannot do so. The system is not fair. It is time for someone to recognise the need to do the right thing regardless of party-political interest, which may be something of a challenge.

I am delighted that the Conservative party is committed to a new national funding formula, and I am also pleased that the F40 group is presenting detailed proposals. Its members have worked out who will be losers and who will be winners, to narrow the gaps. Whichever party is in government, whichever system is used to fund schools and regardless of whether 16 to 19-year-olds are protected, money will be tight, so we must have the courage to do the right thing, and then find a way of explaining it to people and carrying them with us.

Nic Dakin was right to say that we must do what all fair-minded people would recognise as the right thing. I say that on behalf of the people in the East Riding of Yorkshire, the area I represent. It is rural, coastal and absolutely has the problems the chief inspector of Ofsted has identified, yet from this coming year, although it will have slightly more money thanks to the £390 million, it will be the lowest-funded area in the country. If the Minister gets a chance to do so in his time-limited five-minute speech, perhaps he will say something about the technicality by which, because of our high needs block funding, we got a disproportionately small amount of that £390 million, to add to our existing inequities.

Photo of Caroline Spelman Caroline Spelman Conservative, Meriden 6:35 pm, 10th March 2015

I just want to make one point building on the description of my hon. Friend Mr Walker of the disparities between local authorities. My local authority, Solihull, has £1,300 less per capita than neighbouring Birmingham, but we school 7,000 pupils over our borders from Birmingham and Coventry, and unlike the principle in health where the money follows the patient, the money does not follow the pupils over the border. I fully support F40’s pursuit of a fair funding formula, but I specifically impress upon the Minister that this irregularity between health and education needs to be sorted out in the short term before the schools that are trying to educate pupils from over their borders with less money find it impossible to do so.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Chair, Committee of Selection 6:36 pm, 10th March 2015

May I very briefly, in the two minutes available to me, pay tribute to my teachers and governing bodies in the schools in Gloucestershire, that often with very little money and at the bottom of the F40 league, achieve outstanding Ofsted results? Gloucestershire gets a dedicated schools grant of £4,200, compared with nearly £6,700 for Camden. That cannot be equitable.

We have to end this system. We should have a national funding formula with special needs and all the other factors—rurality, deprivation—taken into account, arguing up from the minimum. Unless we start somewhere and start soon with a floors and ceiling system, we are never going to get an equitable system. To enshrine the current system under a capped budget is simply unfair, and I ask the Minister to recognise that unfairness. It is quite wrong that there is a postal code lottery, so that where someone lives determines how much their child gets funded. Please can he end this unfairness?

Photo of Nick Harvey Nick Harvey Liberal Democrat, North Devon 6:37 pm, 10th March 2015

This problem has grown up over several decades. It is not something which has sprung up under this coalition, nor even under the last Labour Government. It has come on over a period of decades—since the second world war, really—and I am delighted that this Government, and the two parties represented in this Government, have committed themselves to a new funding formula to be implemented in the next Parliament, and I hope we will hear from the Labour Front-Bench team that they are committed to that as well.

As this has not happened in this Parliament, we are reliant, as a short-term measure to get ourselves through the interim, on the down-payment colleagues have talked about of some £390 million for the coming year. That is most welcome. My local authority of Devon is the sixth-worst funded in the country, and it will receive about £200 per pupil as a result of this uplift. I mention in passing that F40 put to the Department for Education some alternative proposals on how this money might have been dispensed, which would have given pupils in Devon £400 per head, but the money is nevertheless welcome.

It is essential that this money is now baked into the formula for the years between now and a new formula coming in, first, to ensure that the baseline is in a healthier place, but secondly, so that the schools that will now receive this money can have the confidence that it will be there not just one year at a time but for the next few years, so they can, with confidence, go out and employ additional staff with the resources available.

Photo of Duncan Hames Duncan Hames Liberal Democrat, Chippenham

I wholeheartedly agree with my hon. Friend, and we are both co-signatories of this timely motion, but does he share my frustration that this gap widened at a time when schools were receiving the more generous settlements and that it is hard to conceive how a set of Ministers will be able to rapidly close this gap in the context of flat cash per pupil funding settlements in the future?

Photo of Nick Harvey Nick Harvey Liberal Democrat, North Devon

There will be a continued period of tough public finance and that undoubtedly makes it even more difficult to perform these sorts of adjustment, but it is vital that these changes take place, and to have the confidence to do that we need to get them right and ensure that sparsity actually means something and does not have a completely perverse set of effects, as it does at the moment, and that the money will be there to phase this in until it can be completely done.

Photo of Richard Drax Richard Drax Conservative, South Dorset 6:39 pm, 10th March 2015

I shall be very brief, Mr Deputy Speaker. First, may I, too, pay tribute to all the local teachers in my constituency, who do a fantastic job in a lovely rural area? My local educational authority has three points that it is especially concerned about and it agrees with all the points raised by F40. First, on sparsity, our area contains little schools struggling to survive in rural parts of the country, and if those schools went, our children would simply not get the education that they deserve or need. Let us not forget that children are the next generation; they are the future of this country and we must value them equally. Secondly, fairer funding should be achieved by the end of the next Parliament, at the latest. Lastly, opportunities should be equal for all children. The children in South Dorset, wherever they come from, should be valued the same as every other child in the country, and the money that goes towards them should represent that fact.

Photo of Guy Opperman Guy Opperman Conservative, Hexham 6:40 pm, 10th March 2015

As I walk out of Heddon-on-the-Wall St Andrew’s Church of England first school and go down the hill into Newcastle, I lose £1,000 per pupil over the course of 300 yards. That is utterly illogical, and the disparity cannot be continued. I endorse all the comments made by my hon. Friend Mr Walker and others. On the pupil premium, I make the point that although we all of course support it, it is genuinely skewing an unfair system and giving us a system that is manifestly not acceptable. I pay tribute to all the schools, governors and teachers in my region of Tynedale and Ponteland, who produce outstanding education, despite the great disparity. They helped me to lobby Ministers, not least the Minister for Schools, who came to Hexham and met many of them approximately 18 months ago.

The additional £390 million allocation of minimum funding levels resulted in £12 million-plus going to Northumberland, which is genuinely a lifesaver for our schools. We need a firm commitment from all parties in this House that that level of minimum funding increase will form part of the baseline funding for 2015-16, so that at the very least all schools can then plan for the future.

Photo of Marcus Jones Marcus Jones Conservative, Nuneaton

I completely agree with my hon. Friend. There is a massive disparity in my area, which is sandwiched between Leicester, Coventry and Birmingham, which get hundreds of pounds extra in funding a year per pupil. Does he agree that that needs to change—it is vital that that happens—because my local schools are trying to get staff in a market where those other schools have far higher levels of funding?

Photo of Guy Opperman Guy Opperman Conservative, Hexham

I endorse what my hon. Friend says. He should try coming to the most rural and sparsely populated constituency in England, Hexham, in Northumberland, where he would understand the complex difficulties we face; the situation he describes is exacerbated in spades there.

Although the 7% budget increase that the schools will enjoy on 31 March or 1 April is clearly very helpful, we need to plan and go forward. We have yet to hear from the Labour party, which was in government for 13 years and did nothing about this, but the argument appears to be won, because when we look at the co-signatories of F40, we find that they come from across the House. While strongly urging that we get an increase and that the sparsity factor is addressed, I entirely endorse the motion.

Photo of Anne Marie Morris Anne Marie Morris Conservative, Newton Abbot 6:43 pm, 10th March 2015

I shall be brief, Mr Deputy Speaker. Every child deserves a fair level of funding. The fact that so many Devon MPs are here today demonstrates how strongly we feel about being the sixth lowest funded authority. We get £4,602 per pupil, which compares with a national average of £5,082—there is a funding gap of £41 million. We face specific problems and I wish to mention two. First, the existing formula contains no recognition of high-growth areas, of which Devon is one. As a result, Devon has to set aside £1.5 million to deal with growth every year for the next seven years. Secondly, the transport costs are completely ignored. We have 16,051 children being bused to school every day—that is 33% of the transport budget. I thoroughly recommend the F40 proposals. They need to be introduced as a matter of urgency. If they were, I am pleased to say that Devon’s children would be better off by £205.64 per pupil by 2015-16. Roll on the change!

Photo of Julian Huppert Julian Huppert Liberal Democrat, Cambridge 6:44 pm, 10th March 2015

I will, of course, be brief. School funding has been an issue in my constituency and my county for about 30 years, when we have been grossly underfunded and nobody did anything about it. We are currently the worst funded in the entire country—£600 per pupil per year below the English average. That hits on the schools. Teachers do a great job and pupils work hard, but it puts a huge strain on them and we are seeing a widening gap as a result of that lack of support, which is why it is such great news that after a huge amount of effort from many people throughout Cambridgeshire, on an issue that I have prioritised, my right hon. Friend the Minister was able to give us £23.2 million a year extra, a 7.9% increase.

That is a large sum and very welcome, but it fills only about half the gap which leaves a typical primary £250,000 a year below the English average. It still leaves us with problems for a number of schools subject to minimum funding guarantees, which will not see all the benefits—typically, smaller urban schools. That problem will continue as long as we do not have a proper national fair funding formula. I am, however, grateful that we have got some more money, finally, for school capital because we are growing fast as well as being grossly underfunded. That will make a huge difference. I massively welcome the pupil premium, which is making a difference to lives in my constituency and in the county. I welcome free school meals, which is making a difference to pupils in the county. But until we have a national fair funding formula, we will not get a fair settlement.

Photo of Simon Wright Simon Wright Liberal Democrat, Norwich South

Does my hon. Friend agree that there is no reason why the introduction of a new funding formula should jeopardise other elements of spending in the two-to-19 education budget?

Photo of Julian Huppert Julian Huppert Liberal Democrat, Cambridge

Indeed. We need the national fair funding formula, free school meals and the pupil premium. That package is the right one.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education) 6:46 pm, 10th March 2015

Mr Walker, whom I congratulate on raising this matter, referred to the observation of Richard Graham that this subject resembles the Schleswig-Holstein question. As I recall, Palmerston said that of the three people who knew the answer to that, one was dead, one had gone mad and the other one had forgotten the answer. Perhaps that is why it has been so difficult for the Government to do what they pledged to do at the beginning of this Parliament: to introduce—[Interruption.] I am struggling to make myself heard because the Parliamentary Private Secretary is saying that it is ridiculous to suggest that it was difficult for the Government to introduce what they pledged to introduce at the beginning of this Parliament—that is, a national funding formula. It has been extremely difficult.

That is why the Schools Minister last year, rather than do what was promised in the coalition agreement and introduce that new national funding formula in the course of this Parliament, decided, understandably, to throw some money at it. I am not criticising him for finding it difficult to tackle this Schleswig-Holstein-style question with which he has been wrestling for some of the past five years.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

I will give way first to the hon. Member for Gloucester, as I mentioned him.

Photo of Richard Graham Richard Graham Conservative, Gloucester

That is very kind of the shadow Minister. The reason why I used the Schleswig-Holstein analogy was that if one looks at the funding for Gloucestershire at £4,195 per head and compares the schools that we have, which are multicultural, urban, inner-city schools, with those of Birmingham, which get £5,210—over £1,000 more per pupil—it brooketh no understanding. Does the shadow Minister agree?

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

I know the hon. Gentleman is not the one who is dead, I know he is not the one who is mad, and I do not think he has forgotten the answer because he has tried to provide us with it, but as I said last year when we debated the subject in Westminster Hall, I accept that there are undoubtedly wide disparities in funding among different areas. Some of those disparities—[Interruption.] Again, I am being barracked by the PPS. If he wants to intervene, I will be happy to give way. If not, I give way to Mr Heath.

Photo of David Heath David Heath Liberal Democrat, Somerton and Frome

I am grateful to the hon. Gentleman. I was one of the founder members of the F40 group back in 1996 as chair of education in Somerset, and signed up to it with a lot of Labour colleagues who then ran county councils, who were equally incensed about this issue. I do not understand—this relates to the point made earlier—why this anomaly was not dealt with when school budgets were rapidly rising. Of course that is more difficult in a period of austerity.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

As confirmed in a House of Commons Library note, the hon. Gentleman is correct to say that education funding has fallen by the greatest amount in real terms under this Government, and that secondary funding has borne the greatest burden of that, with it facing a 7.6% cut in real terms during the course of this Parliament. However, people have forgotten that the last Government started this process with a pledge to have a national funding formula, which the coalition Government promised would be delivered during the course of this Parliament, but they have been unable to fulfil that promise because it is not easy.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

It is a little rich for the Government parties to raise this issue when they have had five years to sort it out. One would think they were not in government. But there is a more important point here. [Interruption.]

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Chairman of Ways and Means

Order. In fairness, I have tried to make sure that every Member had a chance to speak. At least respect those who intervene and answer from the Front Bench.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

It is a little rich Government Members talking about young people when they are cutting further education budgets, as they have at City college in Coventry by 24%. What does my hon. Friend think about that?

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

In fairness to the Government parties, they have acknowledged that there was record investment in education under the last Labour Government. It is a fact that we have suffered—check the House of Commons note—a real-terms cut during the course of this Parliament. Under the plans outlined, certainly by the Conservative party, there will be real problems with school funding in the next Parliament.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Education)

I would be delighted to give way, but I cannot if I am to allow the Minister time to speak. [Interruption.]Hon. Members know I would be delighted to give way if we had more time, but I must wind up my remarks if I am to be fair to the Minister and give him an opportunity to respond.

We do need a fair funding formula, but let us acknowledge that it needs to be transparent, and let us all acknowledge, including the Minister, that there will be winners as well as losers in any such process. When the Government laid out their original plans for a national funding formula, they did not outline the details. They had to let the Institute for Fiscal Studies do it for them. It showed that their plans would have resulted in at least one in six schools losing 10% of their budgets, that one in 10 would gain at least 10% and that nearly 20% of primary schools and 30% of secondary schools would experience a cash-terms cut in funding. That is why it is not easy. That is why Ministers have not been able to deliver on what they said they would do in the coalition agreement. I do not criticise them for that because it is difficult. We need to find a way forward, on a cross-party basis, on a national funding formula. The type of party political sniping we have heard tonight will not help to achieve that.

Photo of David Laws David Laws The Minister of State, Cabinet Office, The Minister for Schools 6:52 pm, 10th March 2015

We have had a short but on the whole excellent debate. I congratulate my hon. Friend Mr Walker on his leadership of the campaign, on opening the debate, and on putting the case so powerfully and in a way that sought to unite Members across the House. I also pay tribute to the other hon. Members who spoke, who in most cases have been involved in the campaign for quite some time, including Nic Dakin, my hon. Friend Mr Stuart, the Chair of the Education Committee, my right hon. Friend Mrs Spelman, and my hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown), for North Devon (Sir Nick Harvey), for South Dorset (Richard Drax), for Hexham (Guy Opperman), for Newton Abbot (Anne Marie Morris), for Norwich South (Simon Wright) and, of course, my hon. Friend Dr Huppert, who has done such a fantastic job in representing his constituents’ interests on this issue of revenue funding in the same way as he has done on capital funding. As he noted, as a consequence of those representations, parts of the country, such as Cambridgeshire, which were underfunded for many years under the last Government, have at last seen a massive move towards fair funding.

I do not want to make a partisan speech, particularly after the good example set by my hon. Friend the Member for Worcester, but I was a little disappointed by the shadow Minister’s response. He might at least have started with an apology for doing nothing in the last 13 years to correct the problems in the funding formula. I thought that we might have had a clear plan from the Labour party, given that he had so much to criticise about the coalition’s policy, on how he would introduce a national fair funding formula. What I heard was something of a policy free zone of a speech. Perhaps the lack of support behind him on the Labour Benches indicates the lack of enthusiasm among members of his party to sort out the injustices that have dogged our funding system for so long.

When this Government came to power in 2010, the funding system for schools that we inherited at the start of the Parliament was opaque, irrational and unnecessarily complex at both national and local levels. Similar pupils were funded at vastly different levels simply because they happened to be in different local authorities or in different types of school building. Previous Governments knew that the school funding system was unfair but failed to reform it.

Photo of John Redwood John Redwood Conservative, Wokingham

Would the Minister suggest that there should be a limit on how big the gap can be between the best and the worst per-pupil level of funding, as that would be a starting point for getting some justice?

Photo of David Laws David Laws The Minister of State, Cabinet Office, The Minister for Schools

That is certainly a sensible principle, and it is exactly what we have tried to do through many of our reforms.

Throughout the Parliament we have introduced major reforms that have improved the fairness and simplicity of the system and laid the essential foundation stones to allow us, the two coalition parties, to introduce a full national funding formula in future. The major reforms we have made are changes to the local funding system, and changes to the way in which we fund disadvantage, with the introduction of the pupil premium and minimum funding levels. Time does not allow me to speak in detail about the first two changes, but I would like briefly to say something about the third—minimum funding levels.

We introduced minimum funding levels last year. I thank not only all the Members who lobbied for that change in the system but the excellent officials in our Department who worked hard, over a sustained period, on the new model. This Government have introduced the first reforms to the distribution of funding between local areas in over a decade. In 2015-16, every local area will attract a minimum level of funding for each of its pupils and schools. The £390 million increase in funding that we introduced as part of minimum funding levels represents a huge step towards removing the historical unfairness of the schools funding system. It ensures an immediate boost to the least fairly funded authorities and puts us in a much better position to implement a national funding formula in the next Parliament. All the logic of the reforms we have made indicates that they should be baselined into funding in the next Parliament. I can certainly make that commitment on behalf of my party; it is for others to make commitments on behalf of their parties.

Photo of David Laws David Laws The Minister of State, Cabinet Office, The Minister for Schools

I will not, I am afraid, because of the lack of time.

In the next Parliament, multi-year spending plans will allow us to give certainty to local authorities and schools about how we transition to a national funding formula. Meanwhile, no local authority or school will lose out from the introduction of minimum funding levels from 2015-16, but about four in 10 areas will gain. We have already heard from my hon. Friend the Member for Worcester, whose area gains some £100 per pupil—an increase of just over 2%—as a result of the changes for which he lobbied. My hon. Friend the Member for North Devon has been a great campaigner on this issue for many years and has helped to secure an uplift of about 5% in his part of the country. My hon. Friend the Member for Cambridge has helped to secure a huge increase of about 8% for funding in his part of England—an additional £311 per pupil that will make a massive difference to schools. This is only one step in the transition to fairer funding and a national funding formula, but it is the biggest step towards fairer schools funding in a decade.

The three major reforms over this Parliament do not, of course, complete the reform of school funding. We recognise that we still need to introduce a full formula to ensure that pupils with similar characteristics attract the same level of funding regardless of where they live. Nevertheless, I am proud that the changes we have made have delivered the big improvements that we have seen. They put us in a much better position than we were in at the beginning of this Parliament. We now have to do the important preparatory work that will be necessary to put in place a national fair funding formula in the next Parliament. We also need to review funding on deprivation to make sure that it is fair across the whole country, and that we can build on the enormous improvements made in this Parliament and the massive contribution that the pupil premium has made.

We are now in a position to finish the job of introducing, for the first time in decades, a fair funding system for schools in this country. Once we have long-term spending plans, we will be in a position to introduce, in a stable and sensible way, the full national funding system for schools for which Members have argued. Both governing parties in this House—both coalition parties—have put on the record very clearly their commitment to a national fair funding formula. Those of our constituents who care about this issue can best ensure the delivery of this policy through the choices they make—

Motion lapsed (Standing Order No. 9(3)).