Backbench Business - Education Funding in Londonbackbench Business

– in the House of Commons at 4:38 pm on 4th May 2016.

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Photo of Bob Neill Bob Neill Chair, Justice Committee 4:38 pm, 4th May 2016

I beg to move,

That this House
notes the Government’s intention to implement a new funding formula for schools from April 2017;
welcomes the Department for Education’s commitment to hold a detailed consultation on this proposal;
calls on the Government to recognise the unique challenges schools in London face;
and further calls on the Government to ensure that any changes to the funding model are both fair and proportionate to London’s needs.

It is a pleasure to have secured this debate and to have the chance to raise the matter on behalf of myself and a number of colleagues cross-party who are members of the all-party parliamentary group for London, which consists of 47 Members of Parliament from London and 20 or so peers. The matter is of concern to the current Mayor, any future Mayor and the leadership of all parties on London councils. That is why we raise it in the way that we do; it is an important debate for us.

I should make it clear at the start that neither the Mayor nor London councils have an issue with the principle of a national funding formula and greater transparency in funding. The lack of transparency is a genuine issue for many local education authorities, and that is my personal approach as well.

One issue we want to flag up is that there is currently a consultation, and there are some good things in it, but there are also some risks. Those need to be drawn to the attention of the House and the Government because they could impact on London, given its particular nature.

Photo of Joan Ryan Joan Ryan Labour, Enfield North

I congratulate the hon. Gentleman on securing this important debate and on the powerful start he has made. I have no argument with fair funding, but my schools are telling me, “We need to level up, not down. We are in danger of setting deficit budgets. We want to retain some local flexibility.”

Photo of Bob Neill Bob Neill Chair, Justice Committee

I am conscious that those views were expressed at the meeting sponsored by the all-party group, and the right hon. Lady and others may well raise them in the debate.

A number of issues arise, but I want to concentrate on just a few. First, I have no problem with the principle of national funding, but we must take into account the particular circumstances in London. We should also remember that London is not a single, homogeneous unit; there are different pressures, which make the capital different from the rest of the country, and the different parts of the capital different from each other. We must therefore be particularly granular and careful in applying any formula.

That is important because London has been a success in education. It now outperforms all other regions at every key stage of testing. London pupils outperform their peers nationally at key stage 2 and key stage 4 and in entry to the English bac, and London schools outperform others in being rated outstanding or good, with 89% above the national average. London is therefore a success story, and it is one we do not want to put in jeopardy.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I will give way once more—to someone from outside London.

Photo of Lucy Frazer Lucy Frazer Conservative, South East Cambridgeshire

My hon. Friend perhaps anticipates the point I am going to make as the Member who represents South East Cambridgeshire. Of course London has enjoyed great success, but is it not only right that other areas—areas that have been underfunded for years—should benefit from the opportunity to enjoy the same success so that they can be brought up to the level that London has enjoyed?

Photo of Bob Neill Bob Neill Chair, Justice Committee

That is part of the point about levelling up that was made by Joan Ryan.

The other two things I would observe are these. I mentioned that London is not homogeneous. The levels of funding in outer-London boroughs such as mine, Bromley, and in others, such as Richmond upon Thames and Kingston upon Thames, are actually often much lower than those that are headlined in respect of inner-London boroughs. Boroughs such as mine have levels of funding that are scarcely different from those in the shire counties around us.

Photo of James Berry James Berry Conservative, Kingston and Surbiton

As one of the Members of Parliament representing Kingston upon Thames, may I ask my hon. Friend whether he agrees that it cannot be right that my borough gets less than £5,000 per pupil, while other boroughs in London get more than £7,000 per pupil?

Photo of Bob Neill Bob Neill Chair, Justice Committee

That is the point we need to address.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I will make a little progress and then I will take some more interventions, because it is worth setting one other point in context.

Historically, London has had higher levels of funding, but, as I said, that does not apply to every borough. There is also a reason for that funding.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I am just going to make this point before I start giving way again—otherwise I will not make a coherent argument at all. There is a reason for that funding, which is that London has, on many levels, greater challenges. There are far more children with English as a second language. There are higher levels of deprivation on almost any indices. There is great wealth, but there is also great deprivation, and those are closely—geographically and physically—juxtaposed. On any view, there are also extra costs involved in being a teacher or in running a school in London. The capital cost of sites is more because the land values are much higher. The cost of housing also means that teachers’ wages have to be higher. It is not illegitimate for those things to be reflected in the formula. London as a city is also the UK’s principal economic driver and puts in more to the UK economy than it takes out, so in that respect we are already subsidising the rest of the UK.

Photo of Lyn Brown Lyn Brown Shadow Minister (Home Office)

I congratulate the hon. Gentleman on securing the debate and on the manner in which he has approached it. I agree with almost everything he has said. I come from an outer-London borough officially, but we have inner-London needs, and that is not reflected in the funding we receive from central Government. Does my hon. Friend—sorry, the hon. Gentleman—agree that we must make sure that funding is commensurate to the needs of the children in an area?

Photo of Bob Neill Bob Neill Chair, Justice Committee

The hon. Lady is almost an hon. Friend when West Ham are playing on Saturdays, and we hope for a good end to the season. She is right, and that brings me to the second point about funding. First, some outer-London boroughs are no better funded than shire counties anyway, yet in London there are much greater costs than in the rest of the country; and secondly, there is an artificial distinction in how funding in London is split up between inner and outer London. If justice is to be done in a formula, we need to move away from that distinction, which is purely historical. It goes back to the creation of the Greater London Council in 1963, when the then Inner London Education Authority was in fact part of the old London County Council, which had been a county education authority, while the outer-London boroughs had been educational authorities in their own right, either as parts of counties or as county boroughs. The historical anomaly that the hon. Lady mentions is the fact that her local authority is an amalgamation of two county boroughs that are part of the east end but were not in a county of London, so are treated as being in outer London, whereas Wandsworth, for example, which, in many respects, is much more prosperous, is an inner-London borough. That is a wholly illogical and unsustainable distinction that we need to break down because it distorts the arrangements.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

My hon. Friend is right. The funding system we have today, handed over from the previous Labour Government, is broken in London and in urban and rural areas alike, and needs to be fixed. On additional costs in London, no proposal that I have seen from anyone, including f40, suggests anything other than that London would continue to have significantly more money per head than other areas.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I am grateful for that point, and I accept it. Provided that we get that built in, this need not be an argument, but rather a question of making sure that any formula reflects the diversity of needs that exists within London.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I give way to the right hon. Lady, who is very well regarded in London for all her work.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I thank the hon. Gentleman and congratulate him on securing this debate. He talked about some of the factors that impact on the differential costs in London and elsewhere. Does he agree that the mobility of families in London is another factor? Two primary schools in my constituency have a 30% turnover every year, meaning that every teacher has to teach 40 children a year. The additional costs of getting to know, assessing and then responding to those needs ought to be had regard to in setting the formula if it is to be fair for every child in the country.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I entirely agree with the right hon. Lady. I say to the Government that I hope that this could be reflected the formula without causing any damage to the overall principle. That is for the very good reason that because inner-London boroughs are geographically so small, and part of one single housing market and one single jobs market, people will very frequently move across them. In my constituency, one can move a quarter of a mile or half a mile down the road and be in one of two other London boroughs. London boroughs experience much more cross-border mobility than in a shire county where one could move 20 or 30 miles and still be within the same county. I would urge that that matter could fairly be taken into account.

Photo of Andrew Murrison Andrew Murrison Conservative, South West Wiltshire

I congratulate my hon. Friend on his remarks. Dame Margaret Hodge mentioned turbulence as a reason for funding certain schools, particularly in London. Does my hon. Friend agree that London is not the only place where turbulence is suffered, and that the pupil premium that the Government rightly introduced to allow for the fact that service families move all the time is germane to this debate and needs to be reflected in the funding formula?

Photo of Bob Neill Bob Neill Chair, Justice Committee

I supported the introduction of the pupil premium, as did my hon. Friend. It is worth stressing that although turbulence occurs in other places, it is particularly acute in London owing to the size of its population and the churn of its population as a whole, with people moving in and out of London, and people moving within London, and therefore families and children moving and London authorities having to cope with far more cross-borough placements than other areas. That issue, together with the artificial distinction I mentioned, could be sensibly incorporated into the formula to reflect the position in London.

Many other hon. Members want to speak and I do not want to deny them the opportunity, but I just want to touch on a few other matters. We have discussed the two key issues, namely the churn and mobility and the inner-outer distinction, which is out of date. There is also pressure on how the question of deprivation is measured. It is currently done by postcode, but there can be massive extremes of wealth and poverty within some London borough postcodes. That is very apparent in some places in docklands.

Photo of Victoria Borwick Victoria Borwick Conservative, Kensington

I congratulate my hon. Friend on securing this debate and absolutely concur with what he has said about deprivation. Kensington still has two of the most deprived areas in all of Britain, so nobody should think that it is paved with gold. We also have some outstanding schools. We have run through the initial proposals and—I hope that the Minister will take cognisance of this—it is calculated that 28 of our 33 schools will face a significant funding reduction should the proposals be implemented in full, with some outstanding schools set to lose 10% of their budget. I thank my hon. Friend for drawing the issue to our attention.

Photo of Bob Neill Bob Neill Chair, Justice Committee

There are pressures and they are only going to grow, given that the London pupil population is going to increase significantly: the year-on-year growth rate is 3%. That needs to be funded. London also faces particularly high pressures in relation to special educational needs provision. The Department does not provide the capital funding for special educational needs and disability provision, which is an issue for areas with higher land values than those elsewhere in the country.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I have been generous and I really do need to move on.

There are other issues that do not relate directly to the national funding formula, but they could correct one or two anomalies in how dedicated school grants work. The Under-Secretary of State for Education, my hon. Friend Mr Gyimah, has already been helpful and met representatives of my local authority and others to try to iron out the rigidities. It is not possible, for example, to spend money on SEND transport, which seems anomalous given that it is integrally linked to the provision of the schools themselves. There are similar issues with psychological services. If the consultation picks up on such things around the margins, that would greatly assist London boroughs, many of which run a pretty tight and efficient ship.

Councillor David Simmonds, the deputy leader of Hillingdon Council and chair of the Local Government Association’s children and young people board, is well known to Ministers. He has said:

“Probably the biggest risk lies in the underfunding of the High Needs Block which will remain with councils. I am concerned that there is an implicit assumption that councils will bail out the underfunding through recourse to council-tax payers, which is a major departure from the principle that underpins the Dedicated Schools Grant that education funding is ring-fenced.”

That is a fair point. I hope that the Government will take it on board and find a means of removing what I am sure would have been an unintended consequence of an insufficiently flexible formula.

My final point comes from two headteachers in my constituency. I took the liberty of asking them about their experience. The headteacher of a very efficient and highly rated primary school near where I live says that they

“already manage…on a very tight budget. I can confidently claim that without the very generous support of our Parent Teacher Association we would not be in a position to afford many of the resources that make our schools run so effectively—such as computing technology, sports coaches and even basics like exercise books.”

She refers to housing costs and the

“tendency for excellent young teachers to move away”.

This small school is doing all the right things. It has joined a multi-academy trust and is doing what the Government want it to do, but it is right up against it, on the margins. In an outer-London borough with low funding, we would want to ensure that the formula does not prejudice such schools.

The head of a good secondary school points out that

“Bromley is still the lowest funded London authority and actually as low as many of the Shire counties”.

She goes on to mention having some flexibility on the availability of schools forums, where they are still useful. She also reiterates the arbitrary distinction whereby she pays teachers from outer-London funding, while in Lewisham and Greenwich, which is a quarter of a mile up the road and where the demographic is no different, the situation is different because there happens to be a line on a map. That needs to be addressed by a sensible funding formula.

That is a helpful summary from people at the coalface. I will not trespass on the House’s time anymore, because I know that a number of London Members of all parties want to bring their own perspective to the debate, but I hope I have flagged up the key issues. I am grateful for the chance to do so.

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

Order. May I suggest that Members take about 10 minutes, so that everybody gets equal time?

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow 4:55 pm, 4th May 2016

I thank Robert Neill for securing this debate on such an important issue, and I pay tribute to him for his work with the all-party group on London.

As the hon. Gentleman said, there are concerns that changes to the national funding formula will have a massive negative impact on London schools and their pupils. Despite the Government’s hollow promises of ring-fenced education funding, the Institute for Fiscal Studies reports that London schools already face an 8% real-terms reduction in funding over the next five years. Now it looks likely that they will face a further cut of £260 million a year due to the changes to the national funding formula. The Minister has said in the past that that is not the case, and I hope he will take the opportunity to clarify today whether he accepts that figure. Perhaps he can confirm to Members that London schools will not face that cut.

Photo of Karen Buck Karen Buck Labour, Westminster North

Does not the funding formula also drives perverse outcomes as between schools within the same local authority? Westminster Council has advised me that 20 schools will lose up to 14% of their grant because of how the funding formula works. Perversely, some of the schools with the highest levels of deprivation will lose the most and some of the schools with the least deprivation will be gainers. The problem with how the funding formula works is not just between local authorities but between schools.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

I thank my hon. Friend, and I hope the Minister listened carefully to her powerful insights about what will happen both within and across local authorities. It will be schoolchildren who suffer, and the improvements in performance in London schools will be put at risk. That improvement is the envy of the world, with many studies showing how London has progressed. It has taken a generation to achieve that, and I hope the Minister will recognise the concerns being expressed today and the dangers of the changes, which risk having a negative effect on the performance of London schools.

I want to highlight some of the challenges that exist and the backdrop against which London has transformed its schools. As I said, that has taken a generation, and the danger is that the change will set us back in a very short time. London faces some of the highest child poverty levels in the country, and, as the hon. Member for Bromley and Chislehurst pointed out, the highest inequality. The extremely high cost of living, and especially of housing, has a detrimental effect on teachers’ ability to find accommodation.

Despite those challenges, local education authorities across parties—Labour councils as well as Conservative councils—have worked tirelessly to improve education in London. As a result, nine out of 10 schools are good or outstanding. I hope the Minister will think carefully about the impact of the reforms on that progress. If we are not careful, we will set schools in London back.

Other regions see London as an exemplar. People point to the London Challenge, which the last Labour Government introduced, and which was supported by people across parties and recognised for its achievements. Other regions have tried to emulate it. It is really important that we build on the successes of our regions rather than pit them against one other, which I fear will happen as a result of the changes. It is wrong to put educationists in competition with each other for the wrong reasons. We should be looking at how to improve the achievement of all our children, across the country.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

It is worth saying that it is important to have a fair system across the country. Certain parts of London—and it is only parts—have disproportionately benefited. A Lambeth school can have more than £1,500 a head more—for a class of 30, that is £45,000 more—than a school half a mile away in Croydon. We have a broken system, and we need to fix it.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

We have very good results in London. Nine out of 10 schools across London are good or outstanding. We should build on that, not pit schools against one other. The hon. Gentleman served on the Education Committee so should know better than to make that argument.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I was not going to intervene again, but I have to on the back of that. In its manifesto, the Conservative party said:

“Under a future Conservative Government, the amount of money following your child into school will be protected.”

Does my hon. Friend agree that changing the formula to take money away from some children is not the right way to meet a manifesto commitment?

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

I completely agree with my right hon. Friend. It would be yet another broken promise. I hope that the Minister will listen carefully today and make sure that that promise is not broken.

Photo of Stephen Timms Stephen Timms Labour, East Ham

Has my hon. Friend seen the estimate which states that if the F40 proposals were implemented as tabled by Graham Stuart and others, the most prosperous 30 authorities in the country would gain more than £200 million and the least prosperous would lose more than £200 million?

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

My right hon. Friend makes a very important point. That is exactly what schoolteachers are concerned about. That cannot happen. It goes to show that there is not a good motive behind this change. The Government should be ashamed of themselves, and the Minister should take action.

Photo of Harriet Harman Harriet Harman Chair, Human Rights (Joint Committee)

My hon. Friend makes a very powerful point about the collective endeavour to improve standards of education for children in London. Does she share my concern that in Southwark that will be undermined if Southwark schools lose, as they risk doing, between 8% and 20% between now and 2019-20? Does she agree with the point made by our right hon. Friend Dame Margaret Hodge that that is not protecting funding?

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

I completely agree with my right hon. and learned Friend. I find it shocking that Ministers can make the argument that they are protecting budgets when these changes mean quite the opposite and will devastate schools in London. I appeal to the Government to look at how to build on the achievements in cities such as London, rather than setting them against other regions. That is deeply unhelpful to our educationists, who work tirelessly to make sure that schools do well.

I will set out the specific example of my constituency, to highlight to the Minister just how the investment in schools in London has transformed education. Under the last Labour Government, schools in Tower Hamlets rose from the bottom of the national league tables, where they were in the 1990s, to being some of the country’s best. That happened against a backdrop of two out of three young people being eligible for free school meals, more than 75% of pupils having English as a second language, and some of the highest levels of child poverty in the country. Tower Hamlets is now in the top third of the national league tables, in a city that, as I mentioned earlier, has the highest percentage of schools that are good or outstanding.

We cannot afford to be complacent, however. Despite the achievements in London, including in boroughs such as mine, 40% of London’s pupils leave school without good GCSEs. Any funding reduction could put further improvements at risk. We need to build on our achievements and make sure that that 40% can leave the education system with good results. That is what the Government should focus on, rather than on potentially decimating success through cutting funding in London.

As has been pointed out, funding is connected with recruitment, and London faces increasing recruitment challenges because of the cost of living crisis. When an average of 73% of the schools budget is allocated to staff costs, these changes could mean more than 6,000 fewer teachers in London’s schools.

Photo of James Berry James Berry Conservative, Kingston and Surbiton

Does the hon. Lady accept that the increase in house prices in outer London as well as inner London means that the difficulty in recruiting teachers affects the whole of London? The distinction between inner and outer London is no longer a good one, given the increase in house prices across the city as a whole.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

The hon. Gentleman will recognise that in boroughs such as mine and in Newham and Hackney, the unprecedented rise in house prices has been much greater than in outer London. I accept his point that house prices are a major issue, but the Government should be considering how to address that across London and the country, rather than dividing communities and areas. That is our point. We must build on our achievements and not close our ears to each other, because that does not serve our constituents or young people well.

Let me turn to population growth in London. When the population is growing by 100,000 a year in London, we cannot afford to have fewer teachers. If we are already looking at 6,000 fewer teachers with these cuts, imagine what will happen in the future. We need to plan ahead for the needs of cities such as London. If we want London to remain a world-class city with some of the best educated young people in the country, and help other areas to improve and replicate what we are achieving, we must ensure that we do not throw away that success.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

I will continue my remarks because other Members wish to speak and I have given way a number of times. Perhaps the hon. and learned Lady will also have the chance to speak.

As has been mentioned, the increased cost of living in London has meant that teachers find it increasingly difficult to survive on their current salaries, and they require the London weighting equivalent to enable them to live and work in London. Already in boroughs such as mine and elsewhere, local authorities are struggling to maintain teacher numbers, and with these cuts they will have to lay teachers off, which is not what local schools need.

In boroughs like Tower Hamlets, Hackney and elsewhere, we have seen that collaboration, partnership and the effective use of resources by teachers and local education authorities have helped to create a success story that has transformed our schools. We must build on that model. It is not about the academisation of schools in my borough—we did not have academies; it is the collaborative model and partnership, along with well-targeted resources into schools, investment in training, and support to teachers, that transforms schools in my constituency and elsewhere. That is well recognised around the country. Recent reports by the Brooking Institution and the Institute of Education highlight what it took to transform education, and spending resources effectively was critical to that.

My plea to the Minister is that he take back these plans, consider the formula again, and ensure that funding is targeted on those who need it. In London, given the inequality and deprivation, it is vital that we maintain that support. The Government should be looking at levelling up support to schools across the country, not taking resources away and punishing schools for doing well. It has taken a generation to transform schools such as those in my borough and across London, but it will take a matter of years—perhaps even less—if this funding formula is introduced and resources are taken away from schools, to decimate our education system. Surely the Minister will appreciate that it is far better to learn from one other and to build on our achievements rather than damage them.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness 5:09 pm, 4th May 2016

It is a pleasure to take part in this debate and I congratulate my hon. Friend Robert Neill on leading it.

It is also a pleasure to follow Rushanara Ali, although I must say from the outset that I did not agree with the tone of her speech. The Labour party is committed to the fair funding formula. The one we have now is broken and it is broken in London. I described the difference between Lambeth and Croydon, but we can find examples all over London. Schools hundreds of yards apart have differences in funding of up to tens of thousands of pounds per classroom. The current system is completely broken and wrong, and it is wrong across the country. The biggest gainer from the f40 proposals would be Barnsley. Other major northern cities would be beneficiaries, too. If we created a fairer system, other northern cities would lose out, because what we have now is erratic, irrational and bears no examination.

I beg Opposition Members in particular not to use the language that the hon. Lady used. The Government have set out a consultation on the principles. She did not itemise a single principle in the consultation with which she disagreed; she simply asserted that it was some sort of appalling assault on London to reverse the progress that has been made. Nothing could be further from the truth. There are limited resources; that is recognised by those on the Front Benches on both sides of the House.

Talk of levelling up is all very well, so long as the hon. Lady’s party is committed to the vast budgetary increases that that would require. However, the Labour party is committed to no such thing and neither is the Conservative party. Even if the budget for this broken inequitable system was increased, we would still have to sit down and seek to ensure that the needs of every single child, regardless of disability, race or geography, were met.

The hon. Lady was right to say that we should have a system based on needs. That is precisely what the Government have consulted on. Whatever they come up with will doubtless not be perfect—nothing ever is—but to question the motive, when the Government are setting out to introduce a fairer funding system with the support of Labour Front Benchers, is beneath the hon. Lady. To say that London education will be decimated is so far from the truth. We need every area of the country to enjoy the improvements that have happened in London. One way to do that—it is only one way; money is not everything—is by making sure we have a system that is truly fair. I hope that, across the House, partisan voices will not stop us coming to a fair and consensual conclusion.

Photo of Lucy Frazer Lucy Frazer Conservative, South East Cambridgeshire

My hon. Friend makes a very important point. We need fairness so that every child has an equal opportunity to get an education. Does he agree that many of the points made about London—growth, special needs, high house prices, a need to recruit and retain teachers—apply to other areas of the country, too? I cite by way of example Cambridge and its outer areas. Every one of those factors applies to us as it does to London.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

My hon. and learned Friend is absolutely right. We heard language about dividing communities. With respect, the only person attempting to do that today is the hon. Member for Bethnal Green and Bow, who used inappropriate language. No one is seeking to divide communities. We have a broken system. If anyone would like to make the case that the current system is fair, reasonable and just, then please do so. But if it is not—and it is not—then we have to redistribute.

Making pernickety points about the manifesto, which says that the Government are going to protect the amount of money per child—which they are—[Interruption.] To the point where we cannot redistribute from someone who is grossly and unfairly funded in one place to another person somewhere else who is on the other end of the spectrum? That is ridiculous. Again, that is beneath the hon. Lady who brought the issue up and it is beneath other Labour Members—including the highly distinguished figure of the right hon. Gentleman, to whom I am happy to give way.

Photo of Stephen Timms Stephen Timms Labour, East Ham

I think most people do not regard manifesto commitments as pernickety. The difficulty with the case the hon. Gentleman is making is that he is dressing it up in terms of principle. The reality is that he is asking for more resources for his local authority and less for others. Will he be frank enough to acknowledge that?

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

The right hon. Gentleman is incorrect. I want a fair system based on principle in which need is assessed, and where the money follows the pupil and that need. That is precisely what all of us should want.

Given that the Government have set out, in a transparent way, how to bring about this fairer funding formula, the suggestions that have been made are for political purposes; I know there are elections for London Mayor tomorrow. The House should rise above that. If the details come out and they are found not to fit with the principles, they will be worthy of criticism, but right now, such criticism cannot be made. When we have a badly broken system, the failure to demonstrate how it should be changed is not good enough.

What we should be talking about now is what emphasis we want to be placed on deprivation, for example, or population movements. Those things are all reflected in the proposed formula. The Government have touched on all of them. I do not see how it is acceptable to say, “We have a problem with a lot of people for whom English is a second language”, when that features in the formula. It is the same with deprivation needs in London—that, too, is in the proposed formula. The truth is that we have the ingredients for a fair system.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I give way to my extremely experienced and knowledgeable north-eastern colleague.

Photo of Ian Mearns Ian Mearns Chair, Backbench Business Committee

I am grateful to the hon. Gentleman. There are many different facets to the differential funding around the country, and one of them is the historical choices of the relevant local authority. We used to have what was called the standard spending assessment, and some authorities chose to spend above the standard level. They funded the extra out of local taxation, which was built into the funding taken forward into the current distribution. It is one part of many facets, but it is a crucial part.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

As ever, the hon. Gentleman makes an interesting and well-informed point. Westminster has been mentioned, so let us look at that as an example. People in very expensive properties are paying council tax rates that are absolutely on the floor; their rates should be compared with those paid by my constituents living in homes worth a tiny fraction of the value of those in Westminster to see how much more those constituents are paying.

It does not wash to suggest that a fairer funding system is undermined because people paid more or less council tax in the distant past. The truth is that there are very high levels of council tax in many of the areas, including my own, that have the lowest funding, while there are very low levels of council tax in some of the richest and most prosperous parts of London. What we need is a system that is fair to all.

Photo of Angela Watkinson Angela Watkinson Conservative, Hornchurch and Upminster

Does my hon. Friend agree that property prices are an element in the formula that must be taken into consideration, particularly in areas such as the London Borough of Havering, which is right on the outside of outer London? Teachers there are paid the outer London allowance, but property prices are very high. Often newly qualified teachers who apply for jobs in our schools find that they cannot afford the accommodation, so they then move inwards towards Barking, Dagenham and other nearby boroughs where the properties are a bit cheaper.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

My hon. Friend is absolutely right. There are all sorts of boroughs across London, and some areas are funded to the tune of tens of thousands of pounds less per classroom than one that might be just a short distance away, yet they are in exactly the same market for teachers—the vital ingredient for raising educational standards. Despite that, when it comes to improving standards, outer London has been part of the London educational transformation.

The suggestion that moving from a situation of gross inequity to one that is fairer to all will undermine quality, when those who have suffered that inequity, such as the constituents of my hon. Friend Dame Angela Watkinson, have none the less managed to improve standards, proves that the issue is not just about money. The money needs to be distributed fairly.

I think the most important thing we should do today as a House is to say that we want a system that is fair to all. We should be discussing the principles and ensuring that the Government do not wriggle on any them for their own partisan or other interests. That is quite right, but let us not scaremonger. Let us not send out messages about dividing communities when the aim of fair funding is right and supported by everyone—including the Labour, Conservative and other major Front-Bench teams. I shall end there.

Photo of Steve Reed Steve Reed Shadow Minister (Communities and Local Government) 5:19 pm, 4th May 2016

I congratulate Robert Neill on securing this important debate. I was delighted to co-sponsor it with him and several other hon. Members. I have been delighted, too, to co-chair with him the all-party parliamentary group for London. It is important to see London Members of different parties in the Chamber, making the case for London’s children in the expectation that the Government will listen and do the right thing by our capital’s children.

London’s schools have been transformed in recent years, particularly since the London Challenge, which was introduced by the Labour Government in 2003 and which pushed the performance of London’s children above the national average, where they have remained ever since. London’s students outperform their peers both in GCSEs and at key stage 2, and they have a higher performance rate in GCSE maths and English than those in any other region in England. However, no one here—no one involved in education in London—considers that to be “job done”. We need to keep up the pressure in order to improve still further. In a globalised economy, London needs to compete with the best in the world, and that means no funding reductions that undermine our schools, heads, teachers, parents, governors and, above all, hard-working students.

Graham Stuart said that it was pernickety to keep education promises. That is not pernickety; it is a matter of trust—the trust of the electors. To breach that trust, as the Government do time and again, is absolutely wrong. All schools deserve fair funding, and, as my hon. Friends have pointed out today, that means levelling funding up, not down. London Councils estimates that London’s schools could lose about £260 million a year from their budgets as a result of the Government’s proposed new funding formula, and some London boroughs are bracing themselves for a loss of up to 20% of funding at every school. Cuts on that scale would push education backwards in the capital.

To protect completely the funding for all the schools that stand to lose out, the Government would need to increase the block grant by £514 million a year. That would give all schools the resources to match the country’s best-performing schools. That is clearly a very significant amount of money, but it is a fraction of the cost of forcing 18,000 maintained schools to become academies, which, in some quarters, is estimated to be as much as £1.3 billion. That is surely a deranged proposal that would distract many of the best schools from providing excellent education and force them to focus, quite unnecessarily, on governance instead. More than 80% of those schools are already rated good or outstanding, so it beggars belief that the Government want to undermine their success by making unnecessary and dogmatic changes.

There is no need to penalise children in London in order to increase funding elsewhere. Spending on education cannot be seen as a sunk cost; it is an investment that gives young people a better chance in life, and boosts economic growth by providing a better-skilled workforce that benefits all of us.

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

We are talking about a better chance in life and a more skilled workforce. I am sure that everyone in the Chamber will agree that children with special educational needs are often disadvantaged. We must make sure that their funding is maintained, if not increased, because real problems are starting to appear in the constituencies of Bromley and Chislehurst, and of Beckenham—particularly in secondary schools such as the Langley Park schools, of which my own children, I have to declare, are a part.

Photo of Jamie Reed Jamie Reed Labour, Copeland

The hon. Gentleman has made an important point. I am glad that he raised it, and I would be astonished if anyone in the Chamber disagreed with him. He is right: we need to keep a particular eye on the support available to those children, because of their vulnerability, and because they have not always been supported properly and helped to achieve what they should have been helped to achieve.

I want to focus for a moment on the situation in Croydon. Our borough’s funding per pupil is £592 lower than the London average. We have the biggest shortfall in places in the country, and over the next five years the number of primary school pupils in Croydon is projected to grow at twice the London average. Croydon faces a huge demand for new primary school places that the Government cannot continue to ignore; they cannot exacerbate the problem by making funding changes that will further disadvantage children in our borough.

A particular problem that has already been mentioned is that teachers in inner-London boroughs can be paid up to £5,000 a year more than those in outer London. A school that is right on the border, as several in my constituency are, may find it hard to attract teachers who can earn so much more at another school just a few hundred yards away. That anomaly needs to be addressed in the new formula—and not, so that Ministers do not misunderstand me, by cutting pay in inner London.

The hon. Member for Beverley and Holderness asked why anyone would question the Government’s motives. One reason why parents in London fear for their schools is the way the Government implemented the transitional relief grant earlier this year. Under that scheme, intended to ease the pain of local government funding cuts, £300 million of funding was made available, but all the relief went to wealthier areas that had received the lowest level of cuts. Surrey got an extra £24 million to spend, while Croydon got a further £44 million of cuts. It was nothing more than naked party political gerrymandering. If that happens again with schools funding, London’s children will suffer.

London Councils, a cross-party organisation, estimates that 29 of London’s 33 boroughs are at risk of losing funding that is likely to be transferred to less deprived areas. Such a decision would be perverse. I hope that the new Mayor of London, who will be elected tomorrow—I hope very much it is my right hon. Friend Sadiq Khan—will join me and other London MPs in making powerful representations to Ministers to protect London’s schools and children. We will not allow the Government to undermine education in our capital city. Our children’s lives matter too much, and our economic future depends on their success. I urge Ministers to turn back and think again.

Photo of Stephen Timms Stephen Timms Labour, East Ham 5:26 pm, 4th May 2016

I congratulate Robert Neill on securing this debate and on how he introduced it. I also congratulate him, together with my hon. Friend Mr Reed, on how they chair the all-party parliamentary group for London. They are absolutely right that this is a crucial issue for the future of the capital.

I am worried about the process the Government have gone through to get us to this point. As we have heard, a consultation document was published in March. In the run-up to the consultation, meetings were held that, as far as I can tell, were exclusively with representatives of the f40 group of authorities. According to the f40 group website, its representatives met with the Department on 21 January 2015, 15 June 2015, 9 September 2015, 9 December 2015 and 7 April 2016 to discuss these proposals. As far as I can establish, no representatives of any London councils were present at any of those meetings. I am worried that because of the unbalanced process the Government have gone through, we will end up with an unbalanced proposal.

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

I can reassure the right hon. Gentleman that my door is always open to every Member or representative of any local authority who wants to discuss school funding or any other concerns within my portfolio.

Photo of Stephen Timms Stephen Timms Labour, East Ham

I am grateful to the Minister. The worry, however, is that up until now, the Department’s door has been open only to this particular group. Graham Stuart champions f40. Nobody can object to representatives of that group of local authorities lobbying and promoting their own interests; it is worrying, though, that it has had this exclusive access up until now.

A version of the minutes of the September meeting with the f40 quoted an official from the Department offering to share “emerging proposals” with the f40 group “in confidence”. Proposals should not be shared in confidence with one particular set of authorities. I note that the minutes have now been altered, so they do not say that any more, but no such offer should ever have been made. My deep worry is that we are heading towards a woefully unbalanced proposal as a result of the privileged access given to that group.

I am grateful for the Minister’s reassurance about his door being open, but I want him to give us a commitment that when the numbers are put into the structure in the consultation document published in March, there will be the constraint that there should be no cuts in school funding for pupils in the most disadvantaged areas of the country.

As we have heard, my right hon. Friend Dame Margaret Hodge has pointed out that the Conservative manifesto certainly sounds as though it is saying that there will be no cuts for any individual students; I hope that that commitment will be maintained. I particularly want to press the Minister on this point: there should be no cuts to schools funding for pupils in the most disadvantaged areas. Indeed, the Government have recognised the need for additional schools funding for disadvantaged students through the pupil premium, so it would surely be quite perverse to slash the same funding through this formula.

As I mentioned earlier, if the f40 proposals were put straight into effect, it would result in the 30 most disadvantaged local authorities in the country losing £245 million per year and the 30 most affluent authorities in the country gaining more than £218 million per year. That would be a straightforward switch of hundreds of millions of pounds from the most disadvantaged authorities to the most affluent ones. I hope that the Minister can reassure us that that kind of switch, as advocated by the f40 group—understandably; it is in the group’s interests to do so—will not happen.

My authority, the London Borough of Newham, made a freedom of information application for the Department’s modelling or analysis of the likely impact of the new formula. The request was refused. Officials said that they had the information, but its release was refused on the grounds that it related to the formulation or development of Government policy and was therefore exempt from freedom of information obligations. As I have said, however, there has clearly been a lot of access for representatives of the f40 authorities. The Minister has given us a commitment that his door will always be open, and I ask him release that information to the other authorities as well, so that everyone can see where we are heading. As things stand, some authorities have been taken into the Government’s confidence and others have not. Indeed, some of those others have been refused information relating to what has been going on. That information should be released.

A cursory glance at the f40 proposal published in 2013—it is on the f40 website—and at the consultation document published by the Government in March shows an uncanny resemblance between the two. Clearly, the f40 group has been very influential. I feel particularly strongly about this, because modelling suggests that my local authority will be among the biggest losers. Analysis of the f40 proposal shows that seven of the 10 biggest cash losers under the proposals will be in London, while none of the 10 biggest cash winners will be in the capital. That is the direction of the f40 group’s proposals. Of course it is advancing its own interests, but it should not have special access to Ministers in doing that. That is not a fair way for policy to be made.

I want to pick up on one point of detail that has already been touched on. The point was made in responding to the consultation document that the extent of pupil mobility in London has a big influence on school costs. Mobility has been used in school funding formulae up till now, but it is not used in the f40 proposal. Nor is it in the Government’s proposal. That is a very troubling omission. The hon. Member for Bromley and Chislehurst rightly underlined the point that high levels of mobility in London add significantly to the cost of running schools here, and that fact should be picked up in the formula.

Research published by the Fischer Family Trust this year estimates that a student who moves in-year will perform 10% less well than the average for their class, and that if three or more students join a class mid-year, attainment for the class as a whole will suffer by one to two percentage points. It estimates the combined cost of pupil mobility to schools and local authorities in London at £35 million a year. That should not be excluded from the formula, although the consultation document proposes excluding it. I understand that mobility is generally low in the authorities of the f40 group, and that they do not want it reflected in the formula, and the Department immediately put that into its version of the formula. Authorities such as mine, where mobility is high, will unfairly lose out on funding if that view prevails, so I hope that it does not.

I am worried that the process that has taken us to this point has been flawed, which is leading to an unfair proposal. I hope that the Minister will accept that schools funding for pupils in disadvantaged areas should not be cut as a result of the new formula, and that factors such as mobility, which have such a big impact in London, should be included in the formula, so that the damage is not inflicted on schools in London.

Photo of Helen Hayes Helen Hayes Labour, Dulwich and West Norwood 5:35 pm, 4th May 2016

I add my congratulations to Robert Neill and my hon. Friend Mr Reed on their excellent work with the all-party parliamentary group for London and on calling for this debate today.

The transformation of London’s schools has been remarkable. London now has the highest percentage of good or outstanding schools in the country. Compare that with the situation of 20 years ago, when there had been almost two decades of Tory cuts and a lack of national political leadership on education. I attended an excellent secondary school with brilliant teachers, but there were holes in the roof and often not enough books to go around. It was a national problem in the 1980s, but there were much more serious problems in London, where the desperate state of too many schools was driving population outflow from the capital and generations of children were failed.

The transformation was achieved through leadership on quality standards and investment in buildings, facilities and staff. Schools were given the resources to deliver, but there was a clear expectation from the Labour Government that poor standards, either in schools or in local education authorities, would not be tolerated. Many London councils also had a clear commitment to press hard on education standards. I am hugely proud of the schools in my constituency. I have met so many inspiring, hard-working teachers and see amazing things happening in our schools. There are too many examples to mention them all, but I think of Hill Mead Primary School, an outstanding school under the new inspection framework in the middle of the Moorlands estate in one of the most deprived wards in the whole country, the Gipsy Hill Federation of outstanding primary schools, The Elmgreen School, a parent-promoted secondary school that achieved its best ever GCSE results last year, The Charter School, an outstanding secondary school launched following a parent-led campaign that is now setting up a second school to meet demand, and Evelyn Grace Academy, where Labour’s investment enabled the employment of the late, great Zaha Hadid to build a school in Brixton that won the Stirling prize for architecture.

The funding formula has reflected both the additional costs that London schools have to bear over and above other parts of the country for building work, staffing, catering and a range of other issues, and the additional challenges faced in London, such as higher levels of deprivation, higher incidences of children with special educational needs, looked after children and pupils with English as a second language, and higher pupil mobility. There are also huge challenges around the need for new school places as London’s population expands. The Government’s funding formula proposals could result in London schools losing £260 million or more of funding, which is equivalent to almost 6,000 full-time teachers or nearly 12,000 teaching assistants. Inner London would be hit the hardest, losing 9.4%, or £586 per pupil on conservative estimates, compared with a 4.5% cut across London.

The impact of such losses would be devastating, leading to larger class sizes, less support for pupils with particular needs and challenges, and the loss of extra-curricular and enrichment activities. Music, art and sport are already stretched as a consequence of the Government’s approach to the curriculum. The cuts will also exacerbate the problems facing teacher recruitment and retention. There is already a crisis in headteacher recruitment in London, and many schools are struggling to recruit teachers. Fifty per cent. of headteachers are over 50 and approaching retirement, and the impact of the housing crisis on younger teachers is devastating. Such cuts will have a terrible impact on the ability of London schools to overcome inequality and disadvantage, and we will be heading back to the bad old days of the 1980s and early 1990s.

Proposing such large cuts to London schools makes no sense, because of all the types of public revenue expenditure, spending on education is perhaps the closest to a straightforward investment rather than a cost. It is an investment in the potential of our children, the talent of the next generation and the economy of our capital city. To fail London’s schools is to fail not only our children—that would be terrible enough—but our economy. The difference in funding between different local education authorities is due in no small part to the commitment of so many London councils to ensuring that there is investment in our children. I have no problem with the principle of levelling the funding formula to some extent, but a fair and independent assessment of need must be made and the funds must be allocated according to need. There must be a levelling up, not a levelling down.

Schools in my constituency do not deserve, nor can they bear, a further cut in their funding of 10% or more, and neither do good or outstanding schools deserve to be forced to become academies. Perhaps, as my colleagues have suggested, the money that would be spent on the lawyers’ fees for forced academisation should be reallocated to help protect the funding for our schools. The involvement of parents in schools is crucial to improving pupil attainment. Parent governors should be present on governing bodies as of right, and I can tell the Minister that parents in my constituency are powerful advocates for funding and resources for their schools. Government plans to stop this are another step in the wrong direction, alongside proposals to cut London’s school funding.

A high-skills, high-wage economy needs investment in skills and training, and investment in our schools is the very foundation of that. A 10% cut to London schools would not be fair, would deliver worse outcomes for some of the most deprived children in the capital and is not acceptable. Most importantly, such a cut does not make any sense. I therefore call on the Government to address inconsistencies in the schools funding formula by levelling up, rather than levelling down—by investing in our schools—because we will all reap the benefits. Schools in London have been on a 20-year journey from being the worst in the country in the dark days of the 1980s and early 1990s to being the best now. Long-term sustained investment and leadership were needed to achieve that. Now is not the time to turn the clock back to a decade of failure.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs) 5:42 pm, 4th May 2016

It is a delight to follow the excellent speech by my hon. Friend Helen Hayes. We all seem to agree that there is no point in trying to compete on bleeding stumps and regions by saying, “My stump is more bleeding than yours.” We know that there are enormous issues in rural communities, seaside communities and across cities outside London. However, we are here to talk about London schools and how very proud we are of them. As others have given examples from their constituencies, may I say that Haringey schools are among the most improved in the country, particularly at GCSE level? We know that 43% of pupils on free school meals in Haringey achieved five A* to C grades at GCSE level in the 2014-15 academic year, which is significantly above the national average of 33.1%, and 50% of Haringey’s pupils are eligible for free school meals. Our ranking has gone up to 44th in the country from its position of 90th some years ago. The theme here is continuous improvement and the nub of the matter is that we do not want it to stop.

Photo of Ian Mearns Ian Mearns Chair, Backbench Business Committee

The point my hon. Friend is making exemplifies why we do not need any rounding down, anywhere across the country. We are getting real evidence that the right systems, the right approaches and the right innovation, backed by the right investment, can bring school improvement to every child in the country.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

My hon. Friend makes an excellent point: it is about believing in every single child in our country, regardless of where they live, what language may be spoken at home or whatever other background they may have. On that point, may I mention the high number of students who have a particular educational need? I am sure that the excellent civil servants will have taken into account in their formula the fact that a lot of children face both language difficulties and other educational needs in London, and many of them come to our advice surgeries. There is nothing more tragic than hearing the stories of certain children who have had a difficult journey through school. I hope that that is reflected in the funding formula. We know that sustaining educational outcomes and improvements in all schools are essential across the piece, and that a reduction in funding would put all of that at risk. We spend a lot of time in this Chamber talking about the productivity puzzle, and we know that education is crucial to understanding why, in terms of our productivity, we as a nation are not doing as well as some of our comparative neighbours. Much of that comes down to our basic skills.

Let me provide one further example from my constituency—a Wood Green primary school. The Trinity Primary Academy required improvement the last time that Ofsted visited, but now 86% of its pupils achieve level 4 or above at key stage 2. I am so very proud of those children, and I know that my right hon. Friend Mr Lammy is too, because many of them live in his constituency. When we go to the schools, we tell the children that we are very proud of them and that we talk about them all the time in this Chamber, and they seem to respond to that.

I will be brief, as I know that others wish to speak. Housing has been mentioned. We know that a deposit for a home in London is £91,000, which is far beyond the average starting wage of a teacher, which is between £20,000 and £30,000. We know that recruitment challenges are likely to be on the horizon, particularly for leadership and senior roles, both at a regional and a national level. The report “Building the Leadership Pool in London Schools”, which was published in November 2015, found that 58% of headteachers in London-based schools are considering leaving their role in the next three years and that 44% of governors in London schools are reporting difficulties in attracting good candidates for senior roles. We have all learned from the school improvement lessons of the past 20 years that school outcomes are very much down to the leadership in schools. I am talking about the wonderful outcomes, the wonderful school exam results and those wonderful smiles on the faces of children when we visit them in August, take photographs of them and praise them up to the heavens. It is a wonderful experience as an MP or an elected representative.

Finally, we have unique challenges in London. My right hon. Friend Stephen Timms talked in detail about mobility, which we are very keen to see reflected in the funding formula. There is also English as an additional language, looked-after children, of whom there are many in London, the high levels of deprivation and the population growth. We know that, due to the wonderfully fertile families that we have in London—our baby boom—we have an 8.2% growth, compared with an overall reduction nationally of 0.2%. Although we delight in having a young city, it is a pressure that creates costs within the system and they should be reflected in the funding formula. Forecasts show that the pupil growth rate in London over the six years from 2012 is twice that of any other region and that, by 2017-18, pupil numbers in London are expected to have increased by 18%, which is considerable. There is also the mobility issue and teacher retention.

As we are coming to the end of the Session, may I wish you, Madam Deputy Speaker, all the very best for tomorrow and Friday?

Photo of Andrew Slaughter Andrew Slaughter Shadow Minister (Justice) 5:48 pm, 4th May 2016

I begin by thanking Robert Neill for helping to secure the debate and for his excellent speech, which managed to define all the issues. It was a shame that the only other speech from the Government Benches was that of Graham Stuart. I cannot be as rude about his speech as I would like because he has left the Chamber, so I will limit myself to saying that he purported to be talking about fairness while, in fact, thanks to the sleuthing work of my right hon. Friend Stephen Timms, we found that he had not only a special interest but special access to the f40 group, which he leads. The long and the short of it is that this is about taking money away from very deprived areas and areas with high levels of need. I am not going to attack any other local authority and say that they do not have a need for education funding, but I resent people coming to the House under the guise of fairness saying that schools in my constituency, which are struggling, should lose a substantial proportion of their funds.

Let me begin by reading a short email I received a couple of weeks ago from a headteacher. I will not say from which school, although I think it will become clear as I read it out. It is a small, voluntary-aided, outstanding school. The email reads:

“Dear Andy, I would like to alert you to a meeting I will be hosting tonight and tomorrow morning for parents. I will be talking about the proposed cuts to our budget next year if the new national funding formula, which is out for consultation, gets the go ahead. It is likely that our school will suffer a 10% decrease in our budget, this coupled with a 9% decrease this year will leave us financially unviable. I recognise that this is very short notice, but if you happen to be available either tonight at 6 pm, or tomorrow at 9.30 am, I think that both myself and our parents would appreciate your input.”

I managed to get along the next morning and found a substantial number of parents who wanted to talk about a number of issues, including the consultation. They were extremely well-informed. They wanted, first, to talk about places planning and the fact that we have in the borough some new free schools that are half empty while other community schools are oversubscribed. They particularly wanted to talk about the new policy of forced academisation and the problems that have occurred through that. These are not subjects that I raised during the meeting, but subjects that the parents raised and ideas they unanimously opposed.

The parents, and certainly the teachers, wanted to talk about recruitment. Any headteachers to whom I have spoken in my borough say that they are facing real problems in that regard. It is ridiculous, in terms of both need and demand, to compare London with other parts of the country, such as Cambridgeshire, as has happened. The average price of a property in my constituency is knocking £1 million. The Labour council, when it was elected, converted some of the luxury flats that the previous Conservative administration were building into key worker flats specifically for teachers, and it managed to retain some teachers as a consequence. For most teachers, it is impossible to afford to live in those boroughs, even on a good salary.

The email I quoted talked about ongoing cuts. The Government would have us believe that there are no ongoing cuts, but of course there are. Spending on education is frozen and schools are facing rising costs from pension contributions, national insurance contributions and teachers’ pay rises. These costs, before any changes to the funding formula, mean a total of £3 million of real-terms cuts to school budgets in the borough, which is the equivalent of 61 teachers. That has to be found for this financial year before any of the other changes come on stream.

Let us also remember what we are losing. This has already been mentioned, but London schools are doing brilliantly compared with what happened under previous Conservative Governments. In 2002, the percentage of pupils getting five A* to C grades at GCSE was 35%, and by 2013 it had almost doubled to 64%. For disadvantaged pupils, it had more than doubled, from 23% to 49%. That is what we are putting at risk with these politically motivated changes.

What will happen if further cuts of some 10% happen? Fewer subjects will be offered to children. Cuts will be made, which are already being flagged up, to mentoring support and to support staff and, perhaps, to teaching staff. Enrichment activities such as music, sport and drama have already been cut, and, as Members heard from the email I read out, some teachers, particularly in small schools, wonder whether their schools will remain viable at all. On the whole, these are outstanding, or at least good, schools. That is all being put at risk.

We have talked about English as an additional language, and 49% of pupils in London speak English as an additional language. That is the case in very few parts of the country. We have talked about mobility. There are primary schools in my borough of Hammersmith and Fulham where, over the life-cycle of the school, more than half the children in a particular class will change, with all the consequences mentioned by my right hon. Friend the Member for East Ham and others. I do not think there is a single school in my borough, and probably not in London, that could say it had a bit of slack, that it had money to spare and that it could provide that money.

I fear that the changes are being discussed in a cynical way and that the Government are shroud-waving. We are talking about 10% cuts on average and perhaps up to 20% cuts in some cases. When the second part of the consultation comes out, the cuts will be only 8% or 15%, and we will be told that the Government have done us some favours along the way. They will not have done us any favours. If the term “fair funding” continues to be used, it must genuinely reflect the need.

I see the Minister nodding and I appreciate that. When he comes to respond, I hope he will specifically take account of the huge strides that London schools have made and that he will want to build on them. Given the economic stress affecting every aspect from teachers to school buildings, I hope he will realise that funding levels need to be maintained. We have talked about levelling up—it may be easy to say, but it needs to be done. Other schools around the country should have the same achievement levels as schools in London. We should be a beacon and an example to the rest of the country; we should not be punished for our success.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth 5:56 pm, 4th May 2016

I congratulate hon. Members from both sides of the House on securing this debate.

Some months ago I was in the Chamber late one evening waiting for the next business. While waiting, I sat and watched as 15 or 20 MPs, mainly on the Government Benches, stood up one by one to present petitions. The petitions had almost identical wording, the gist of which was that schools in their constituency were losing out because their per child funding was so much less than that of schools in London. I sensed not a coincidental simultaneous rising of anger from schools around the country, but an orchestrated campaign that could only have come from the Government party.

It therefore came as no surprise to me when the Education Secretary announced in March that she was consulting on the schools national funding formula. I wish I could say I was excited at the prospect of more funding for schools in England, so that all could benefit from the levels of funding that schools in London have benefited from in recent years and which have been part of the reason for London schools’ success. However, knowing this Government as I do, I am sure that the outcome of this consultation will mean only one thing—a significant cut in funding for schools in London. Based on the modelling carried out by London councils, as has been mentioned, London could lose around £245 million per annum. My authority estimates that there will be a significant cut for local schools; the NUT estimates a 12% cut.

My hon. Friend Seema Malhotra and I together represent the London Borough of Hounslow, whose schools, despite the challenges that our children and our teachers face, always perform well. Some 87% of borough schools are rated good or outstanding by Ofsted. We are concerned that under the new national funding formula, the dedicated schools grant will mean that schools in Hounslow and London see a reduction in funding in real terms. That is happening now. Even under the current stand-still budgets, with rising recruitment, pension and other costs, head teachers are telling me they are having to make cuts to the curriculum. There are no inefficiencies to cut out now, unless that list of inefficiencies includes music, art and drama as A-level choices, or after-school activities or specialist help for children with additional needs to access learning. I do not call those inefficiencies.

Furthermore, there is already inadequate funding in the high needs block in Hounslow to fund the current and future special educational needs of children who need additional help. The ring-fenced nature of the schools block under the proposals leaves no flexibility. This year Hounslow Schools Forum agreed to transfer £7 million to schools with high needs. These proposals, which will stop such transfers, will create a huge shortfall.

London’s schools have delivered success while facing greater challenges. At the secondary school my sons attended, 70 home languages are spoken, and many children arrive not speaking any English. Recruiting staff and maintaining buildings costs more in London. There are greater levels of deprivation, overcrowding, special needs and looked-after children. The housing crisis means that too many children have to move home and move school, which has a devastating impact on their attainment.

If we are to cut the attainment gap for disadvantaged pupils and to stretch the most able pupils, we need to support them through adequate funding. We cannot ensure that our young people are ready for the world of work and that they can contribute to our economy if we sell them short at school—wherever they go to school.

The success of London’s schools over recent years is undisputed, and that success is a model for all. It is based on focused and adequate funding, and it delivers results. It is right that all schools in England should benefit from adequate funding, and it is right that the formula should be updated. What is wrong is that schools in less deprived areas should benefit while schools with greater challenges face the greatest cuts. Sadly, that is the principle the Government are following in local government funding, and that is why, Mr Deputy Speaker—sorry, Mr Speaker; that will teach me not to look up—I do not trust them not to do the same with school funding. The Government should be levelling up so that all schools in England can achieve the success we have had in London.

If the Government really believe in a growth agenda for our economy, as the Prime Minister suggested this morning, they would do well to prioritise the education of all children in England, and to invest in their schooling and teachers, as well as in spreading good practice in learning so that all can benefit. It would be great if, for once, the Government could listen to those in local government—from both parties—to ensure that there is sufficient funding to level up school funding allocations so that no local authority area sees a cut in funding.

Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton 6:02 pm, 4th May 2016

I congratulate Robert Neill on not only his stewardship of the all-party group on London but his sterling work with the Justice Committee, which I serve on.

Redistribution is usually seen as a principle of the left. The last Labour Government sought to widen educational opportunity, from guaranteeing nursery places at one end of the age scale to pursuing the massification of higher education further up the age scale. They sought to stop education from being the preserve of the select few.

Achieving a fair funding formula to end the postcode lottery might look attractive at first glance, but plans designed to counter regional disparities and funding gaps have resulted in warnings—we have heard all the projections—that London schools could lose hundreds of millions of pounds to other regions.

I welcome the fact that we are having this debate at this juncture, because we are all somewhat in the dark. It would be good to have clarity today, because what is going around on the grapevine will worry headteachers in the capital. As right hon. and hon. Members have said, London contains some of the poorest communities in the country, and it has fared well under the status quo.

Since the dark days before 1997 and new Labour, when I was going through school—the days of leaking classrooms—London schools have become a success story nationally. With competing levels of disadvantage countrywide and a shake-up due, there are bound to be winners and losers in any new funding formula. When funding is reallocated, it is important that London is not left underfunded and that educational success is part of the equation, along with strong leadership, raising aspiration and outcomes, and investment.

London boroughs have received additional funding for years because the previous Labour Government were keen to help struggling pupils in the capital to catch up with pupils elsewhere in the country. We have heard that London councils estimate that school budgets in London could be slashed by 10%, but some press releases say the figure could be as high as 14%. It is rumoured that the consultation is likely to recommend phasing in whatever comes next so that angry London headteachers do not immediately suffer large cuts.

Whatever the motivation behind all this, I urge the Government to quash the rumours, think again, and heed advice—advice that often comes from their own side, as in the very eloquent opening speech in this debate. There have been some other unlikely bedfellows. The Mayor of London has made representations to the Government. He is not here; he also has a part-time job as a Member of this House, I believe. The Mayor of Hackney and the Mayor of Manchester have made representations. The Conservative councillor Roy Perry, chairman of the Local Government Association’s children and young people board, has said:

“Councils know their areas best, and currently work in partnership with head teachers and governors to set a local funding formula which allows local needs and priorities to be addressed. We’d want to see this local conversation continue, rather than having all school budgets set in Whitehall.”

Photo of Matthew Pennycook Matthew Pennycook Labour, Greenwich and Woolwich

A point that has not been mentioned so far in any great detail is the lack of local flexibility in the proposals set out in the consultation and the implications that flow from that. One implication is that the DFE or the Education Funding Agency will have to know, for example, every school that has a private finance initiative agreement, what the costs are, and how they are going to be met at a time of also maintaining the per-pupil funding formula.

Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton

My hon. Friend makes the excellent point that local accountability seems to be lost in all this. We have a Government who said that they were in favour of devolution, and instead we have centralised diktats coming from on high.

The National Union of Teachers has claimed:

“Without significant additional resources, plans for reallocation of school funding between areas under the heading of ‘fair funding’ will not address schools’ funding problems and will impose even bigger cuts in many areas.”

In addition, there is the already-raised suspicion that forcing every state sector school in England to become an academy, thereby going into the hands of unaccountable private sector pseudo-charities, is privatisation by the back door. Compulsorily taking schools out of local authority control, which my hon. Friend Matthew Pennycook mentioned, even when the local community opposes it, and handing them over, with their property deeds, infrastructure and taxpayer-funded education budgets, is massively opposed by many parents.

In my surgery, a complaint that often comes up is insufficient school places. I visit schools regularly; I did the assembly at St Augustine’s Priory School this week and I am doing Derwentwater Primary School’s next week. Teachers there raise a range of concerns, including recruitment and retention in London, particularly fuelled by the pricey property market. They talk to me about curriculum and assessment chaos. I have had 200 pieces of correspondence about forced academisation, with people pointing out that there is no evidence that academies improve outcomes. There is a cost to all this. Barbara Raymond from Acton says:

“We have lost social housing, are losing our health service and now our education system is being decimated.”

Dr Gill Reed of west Ealing is concerned that forced academisation will mean that schools are unable to remove asbestos from their buildings, because apparently Government funding for this was taken away, so if schools are using all their resources to convert into academies, that will put health and safety in our schools at risk as well. Sarah Mitchell, a parent who is also a teacher, is concerned about what will happen to the support services previously provided by local education authorities when they go over to private providers. John Davey of Ealing, in his 46th year of teaching, 21 of those in Ealing, says:

“This doctrinaire stance of the current government, supported by no research and choosing to ignore the available evidence, will do harm to generations of children.”

On the subject of unequal funding, it might just be coincidence, but the boroughs of Wokingham, Surrey, Windsor and Maidenhead have all seen the lowest cuts to their budgets. Between them, they represent the constituencies of half the Cabinet. The constituencies of the Home Secretary, Health Secretary, Leader of the House, Foreign Secretary and Justice Secretary are all covered by those areas, which also received £33.5 million in the transitional grant announced this year. To an alien looking at these things from outside, that seems politically motivated.

It is worth restating the London Councils figure of £245 million. In terms of people, that equates to 5,873 full-time teachers or 11,598 full-time teaching assistants. As has been pointed out, inner London will be hardest hit.

My constituency is in Ealing, which is the most inner of the outer London boroughs. Everyone who has spoken today, from the hon. Member for Bromley and Chislehurst onwards, has said that there are dichotomous divides within boroughs. Some areas of Ealing have inner-city characteristics, such as Southall, which is outer London on the map, and Acton, which is inner London on the map and zone 2 for travelcard users.

Historically, we were never part of the Inner London Education Authority, but we have an excellent track record in delivering accessible education for our pupils. In 2015, Her Majesty’s chief inspector of schools rated the Ealing borough as having the most improved schools of all local authorities across England, but we do have deprived areas and areas with specific educational challenges, so I would say that our needs are higher than those of other suburban boroughs. None the less, all 14 high schools were rated good or outstanding by Ofsted, as were 59 of our 69 primary schools.

The predistributionary—if I can use that word—aspects remain sketchy, but Ealing Council’s ruling Labour group opposes academisation and wants to launch its own trusts to get around it. Should local authorities be trying to get around Government legislation, or should the two be working together? I would suggest that the latter is the better option. We should not be thinking of reasons to avoid horrid policies from the centre.

The average spend per pupil in Ealing is higher than the national average, as is the case in all but four of the other London boroughs. We have more pupils with English as a foreign language than elsewhere, and other hon. Members have mentioned the issue of churn. London Councils points out that all London schools are at significant risk of losing funding under any redistributive model. The bureaucratic reorganisation of academisation will cost the taxpayer £1.3 billion. Surely that is poor value for the taxpayer when we should be justifying every pound of public expenditure at a time of fiscal belt-tightening.

Improving the life chances of local young people in Ealing should be a key objective in education. Ealing has a good record of success and of driving up standards for young people, with the council and schools working in partnership, but there is now a sense of a double whammy from the reallocated funding formula and the academies plan. Ealing Council officers have built up considerable expertise and flexibility, and the proposals are to the detriment of our young people. This is a top-down reorganisation from a Government who said, “No more top-down reorganisations”. One would have thought that they would have learned from their costly and unnecessary experiment with the health service.

Paul Goldsmith of Acton is a politics teacher in the independent sector. He wrote to me:

“I am a Governor of an outstanding primary school that under Conservative policy will be forced to be an academy. This means the Head and Governors over the next few years will have to work to the task of academisation, not maintaining an outstanding school.”

He also points out—remember that he is a politics teacher—that Conservatism can be defined as, “If it ain’t broke, don’t fix it”, and asks what is the actual problem forced academisation is trying to fix if the school is outstanding. There are also questions about the financial stability and viability of academy chains as things stand. Plenty of academy chains have got into financial difficulties in order to meet Government targets. It is worth reiterating a phrase that has cropped up time and again: we should be levelling up, not levelling down.

On educational inequality, a degree of special pleading is necessary on behalf of London, because London is different. Its population is heading towards 10 million and its year-on-year population increase of 3% over the last Parliament was higher than the 1% for the rest of the country. The number of live births in Ealing increased by 31% between 2002-03 and 2010-11, which means that an additional 1,400 children a year have been born since 2002, although I think things have levelled off a bit. As an Ealing mum, I am probably one of the few people here to have experienced a bulge class. I remember being in a bulge class in 1983 as an Ealing pupil, as well.

There are concerns aplenty about the new proposals and the degree to which they tip over towards equalisation. Usually equalisation sounds like a good thing, but the proposals seem to be intended to benefit rural communities and buy off Conservative Members. We know that the Government have a small majority, and the proposals will ward off the rebellions that might be coming their way. There is a sense that the tinkering is a result of pressure from the heartlands.

I will end with one more quotation, from Rachael Stone, a primary school teacher from Acton who has been in the job for 20 years. She said that when she heard about the plans in the Budget to make her school an academy,

“my immediate response was that it is time for me to find a new career.”

We need to be careful about how we approach the issue and mindful of the need to avoid exacerbating the already plummeting morale among the teaching profession through academisation. We do not want to make a bad situation worse.

Photo of David Lammy David Lammy Labour, Tottenham 6:15 pm, 4th May 2016

My hon. Friend Catherine West said a lot about education in Haringey, and I do not want to repeat it, but I want to speak briefly as a former Higher Education Minister. I have great respect for the Minister and consider him a friend—I have doubts about his politics, but I know that he is an intelligent and intellectual man who applies rigour to his job.

The Minister has heard a lot today about the need to level up funding. All Members recognise that there are real challenges for young people growing up in what would traditionally be described as white working-class environments—certainly in the seaside towns, and also in rural parts of the country. There are also many cities beyond London where there are real concerns about the educational picture and the league tables show that there is a lot to do.

However, the real challenge in our education system is not the gaps between state schools but the gap between state schools and private schools. That is why we have heard a lot about levelling up. The funding per pupil for students attending private schools is still double and more—[Hon. Members: “Triple!”] Indeed, it is triple the funding for young people attending state schools. The ambition of all Governments, of whatever party, ought to be to reduce that gap, not to raid the budget of state schools.

A lot has been said about the success of education here in London, and it has indeed been a success story in the recent period. I was proud to support the London Challenge when it started, and we have certainly seen advances in London, including in my borough, but let us not go too far. Some 60% of young people in London on free school meals do not get five A to C grades in their GCSEs, and there is still a lot of work to do.

This city represents a larger share of our country’s GDP than at any time since 1911, and its competition is with Shanghai, Bombay, Berlin and Bonn. It is with a lot of countries that are investing in their education systems, not raiding schools’ funds. I know that when the Minister looks at the programme for international student assessment league tables, he will see where London stands—he will see that if we muck up the alchemy in London, my God will we undermine education in this country!

In respect of young people with English as a second language and families who have real needs because they are newly arrived in this country, if we change the formula just a bit we can see a huge slip-back in performance. I was at school in the 1970s and ’80s as part of the African-Caribbean community in this country, and I think it is largely agreed that there were significant failures in education for that minority community. We now see the repercussions of that ricocheting across our country.

We also ought to remember the review that the Prime Minister asked me to undertake over the year. More details were published recently. It is wonderful that we have seen a reduction in the number of young people attending young offenders institutions in this country, but there has been no reduction for black, Asian and minority ethnic young people—a lion’s share of them from London. In fact, things have gone the other way. Look, too, at our pupil referral units; there is a lot to do here in London.

Alongside all the issues that have been mentioned, there is the real issue of churn in our communities, because of the major housing crisis affecting the city. Housing is overcrowded. The vast majority of the young people we are concerned about are in private accommodation and move somewhere else every six months, across borough boundaries. A funding formula that does not take that mobility into account is in real danger of compounding problems, not alleviating them.

Let us think about context. There is a housing crisis. So many Londoners speak English as a second language. Real deprivation still exists right across London. There are the concerns, which we talk about in this place, about guns, knives and gangs in this city. Given all that, I say to the Minister that he should tread very carefully when it comes to making the sort of reductions to London’s funding over the next period that we have been hearing about. We will see a slip back. We will slip down the tables nationally, and our competitors in other countries will overtake us. The Government have to look again and find ways to level up the picture. They should remember that the real conversation about education in this country is not within the state sector, but between the state sector and the private sector.

Photo of Nicholas Dakin Nicholas Dakin Shadow Minister (Education) 6:21 pm, 4th May 2016

I thank the Backbench Business Committee for granting the debate, which was secured by Robert Neill, supported by other Members, including my hon. Friend Mr Reed.

It has been a good, positive and wide-ranging debate. In addition to the speeches, we have had contributions by way of intervention from my right hon. Friends the Members for Enfield North (Joan Ryan) and for Barking (Dame Margaret Hodge), my hon. Friends the Members for West Ham (Lyn Brown), for Westminster North (Ms Buck), for Gateshead (Ian Mearns) and for Greenwich and Woolwich (Matthew Pennycook), my right hon. and learned Friend Ms Harman, Lucy Frazer, and the hon. Members for Kingston and Surbiton (James Berry), for South West Wiltshire (Dr Murrison), for Kensington (Victoria Borwick), for Hornchurch and Upminster (Dame Angela Watkinson) and for Beckenham (Bob Stewart). The range of Members involved demonstrates the importance of the debate and the issue. I am pleased that the Minister has listened attentively throughout the debate. He has been exemplary in that respect, taking on board the issues that have been raised across the House.

With the last intervention in the debate, my hon. Friend the Member for Greenwich and Woolwich drew our attention to the dangers of taking away local flexibility while rushing for a national formula. That important issue was not mentioned by anyone else, so I thought it should be captured before I move on.

In an excellent opening speech, the hon. Member for Bromley and Chislehurst laid out the landscape really well. He reminded us of London’s high performance, describing it quite rightly as a success story. He also reminded us of the reason for London’s higher level of funding, namely the greater challenges it faces as a result of the number of youngsters with English as a second language, the breadth of the attainment gap and the deprivation in London. All those issues are very significant. His starting point was important; as he said, there is no issue with the principle of fair funding. That point was echoed by many Members from across the House throughout the debate.

What I liked most about the hon. Gentleman’s speech was the sense of celebration—that here we have a success story and something we should capture. That was echoed by comments from many Members on both sides of the House, and by my hon. Friends in particular. My hon. Friend Andy Slaughter talked about the huge strides that London has made. My hon. Friend Rushanara Ali reminded us that nine out of 10 London schools are good or outstanding. My hon. Friend the Member for Croydon North talked about the transformation of London schools since 2003 through the London Challenge. My hon. Friend Helen Hayes reminded us of the many inspiring, hard-working teachers across her constituency, whose work is mirrored across the whole of London.

There is therefore something to celebrate, but there are concerns that it might be under threat. My hon. Friends the Members for Bethnal Green and Bow, and for Croydon North, pointed to analysis that suggested that funding might decrease for London; one estimate suggested that the cut in funding might be as great as £260 million a year. I understand why some hon. Members are rightly concerned about that, because it would be a huge funding cut.

In a thoughtful and considered contribution, my right hon. Friend Stephen Timms explored the concern in the House that perhaps things are not being done in the right and proper way. Those perceptions may not be true, but that concern is palpable, and I am sure that the Minister’s commitment in an intervention, when he said that he would meet groups of Members and engage properly with them, went a long way to reassuring my right hon. Friend. However, the proof of the pudding will be in the eating, and as my hon. Friend the Member for Hammersmith said, there is concern that there has been some special interest and access—not something that anybody wishes to happen. If that is the perception among some, the Minister’s generous and immediate commitment to meeting Members who have expressed concern must be followed by thorough action and engagement.

My right hon. Friend the Member for East Ham and others drew attention to the impact that mobility has on school costs in London. Much reference was made to housing issues in London—to the cost of housing, and to the nature of housing estates. I hope that the Minister will consider ways to include that mobility factor in the formula as it is developed. The former Chair of the Education Committee, Graham Stuart, put the case for fair funding: if London is getting a good deal, everybody else needs to get one, too. He made that fair challenge in his usual passionate way.

Everyone will agree with the principle of fair funding, but the rub is that one person’s fair funding can end up being another person’s unfair funding. Although I commend the f40 group for its patient and persistent campaign to address the funding needs of its schools and children—indeed, I have been a supportive officer of that group in the past—care must be taken in how that is progressed. The Government have done the right thing in taking careful steps along that road, consulting before acting, and evaluating the consequences before proceeding. However, as this debate demonstrates, there is more to be done in that arena if the Government are to move forward with the confidence of the whole House. There is still no detail about who will be the winners and losers, and by how much, and that major concern naturally leads to the sort of speculation that we have heard today. I hope that the Minister and his colleagues will provide more details, and view today’s debate as a constructive contribution to the ongoing consultation.

Labour’s candidate for Mayor is right to stand up for the capital’s children, and to express the concern that if there are the cuts that some analysts are predicting, it would do huge damage to the next generation of Londoners. The current London Mayor, together with Jules Pipe, chair of London Councils, made clear the case for ongoing investment in London’s schools in a joint letter to the Secretary of State. They are all right. Schools are the first part of the skills and employment supply chain, and any reduction in funding is likely to impact negatively on the growth and productivity of local economies. My hon. Friend Catherine West made that point in a good and powerful contribution to the debate. She also talked about the schools and school communities that she is proud to represent, and which have made some of the greatest strides in school improvement over the past year.

The Department for Education’s fair funding consultation document states that it intends to address the variability in funding levels by distributing more funding to areas that are underfunded, while

“gradually reducing the funding of schools that have been generously funded to date”.

It is understandable that many in London fear that this will result in severe cuts to London schools’ budgets, with a negative impact on the capital’s young people. We all know that, with or without fair funding, all schools face a real-terms 8% cut in funding during the lifetime of this Conservative Government. My hon. Friend the Member for Hammersmith detailed the type of budget pressures schools are under and having to manage. Schools are already having to cut back on extracurricular activities. As my hon. Friend the Member for Dulwich and West Norwood said, extracurricular activities benefit low-income children the most, raising aspiration and opportunities. It is a shame that they are already under pressure.

As my hon. Friend Ruth Cadbury pointed out, schools are already taking subjects off the curriculum to balance the books. There is already pressure in the system, and there is a worry that there may be more pressure in the future. Any headteacher will tell you that teaching assistants and teachers will be next in the firing line if there are further reductions in spending. Dramatic reductions in funding in some areas will make the situation much worse. It is welcome that the Chancellor has committed £500 million to ease the transition from one system to another. However, the Treasury has said that this funding is dependent on how much the Department is willing to contribute. As the Department is faced with the need for more cash for its forced academisation plans, that has raised perfectly reasonable concerns. It is therefore imperative that we have more detail on both the funding formula and the funding underpinning the recent academisation announcement, so that we can see whether the amount of transitional funding available will be adequate to mitigate the costs of the changes.

The indicative modelling carried out by London Councils suggests that the Government would need to increase the direct schools grant by about £521 million, a figure alluded to by my hon. Friend the Member for Croydon North, to protect completely all schools—not just schools in London—in local authorities that would lose money under the national funding formula. So £500 million is being made available, and the modelling suggests that £521 million a year is required to ensure that no school will be worse off. A lot of Members have talked about levelling up, rather than levelling down.

My right hon. Friend Mr Lammy made the last contribution to the debate. He reminded us, in his usual highly eloquent style, that the greatest disparity is between funding for pupils in the state system and pupils in the private system. I agree with him that nothing should happen that is to the detriment of any pupils in the state system. We should aspire to match the best anywhere in the world. He alluded to the programme for international student assessment league tables and, in his inimitable fashion, said, “Don’t muck about with the alchemy in London.” I think that is the phrase of the debate. We should be careful what we muck about with as we take this forward.

To be fair, I think the Government are taking their plans forward carefully at the moment. There are things they could do more carefully in the light of this debate. I hope that the Minister will take this opportunity to give us his view on the levelling-up approach. Given the dramatic rise in standards under Labour’s London Challenge and investment in schools in the capital and across the country, is the Minister concerned that taking away funds from London schools will impact on results and outcomes? That concern has been echoed by Members across the Chamber.

I have one helpful suggestion—I am a helpful chap—for the Minister to consider as part of the ongoing consultation. The Secretary of State’s plan to force all good and outstanding schools to become academies against their wishes is estimated to cost £1.3 billion. As my hon. Friend Dr Huq said very succinctly, that is poor value for the taxpayer, and I tend to agree. Nobody wants this forced academy programme—certainly not the Minister’s Back Benchers, and certainly not local Conservative councillors. If Ministers dropped this plan, they would have more cash to play with to help deliver a truly fair funding formula. That would have the dual benefit of helping to deliver a manifesto commitment and leaving Education Ministers to focus their energy and effort on the things that really matter to parents and communities, without being distracted by an unhelpful row over forced academisation. Instead, Ministers would be able to tackle the real problems of place planning, teacher supply and exam chaos.

Labour supports fairer funding, but as always, the devil will be in the detail, and the jury is still out on whether there will be adequate mitigation in the system that this Government are bringing forward.

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education 6:36 pm, 4th May 2016

I thank my hon. Friend Robert Neill for securing this important debate, and I commend all the contributions, which have been hugely informative about education funding. As constituency MPs and parents, the subject is close to all our hearts.

For our country to grow stronger, fairer, wealthier and more secure, we need good schools and a well-educated population. Investing in education is an investment in the future of our children and our nation as a whole. That is why the Department is committed to delivering educational excellence everywhere—not just in London, but everywhere in the country—so that irrespective of where a child grows up, they can expect the best education possible.

There is no doubt that we are investing in education. The spending review confirmed a real-terms protection for the core schools budget. Throughout this Parliament, the money available for our schools will increase as pupil numbers increase. This will mean more than £40 billion next year, including pupil premium funding worth £2.5 billion a year targeted at the most disadvantaged pupils. That is also protected and will be maintained at current rates.

Stephen Timms made the point about who had been engaged in making the case for funding reform. He is normally assiduous and careful in how he puts his points across, but on this occasion I would like to disabuse him of the notion that the cross-party f40 group has somehow had special access. I met a range of stakeholders both before and during the consultation, including the Local Government Association, while London councils have met either me or my officials in the Department, and that will continue. I have also met a number of Members of all parties to discuss specific funding needs in their constituencies, and I have a number of union representatives on speed dial as far as this issue is concerned.

Photo of Stephen Timms Stephen Timms Labour, East Ham

I do not think that the Minister would deny that there have been many discussions. I read out a list of the dates of the meetings, set out on the f40 website, between f40 representatives and the Department. I think he would accept that there has been much more discussion with that particular group than there has been with the others to which he has referred.

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

Ministers cannot be criticised on the one hand for not listening, and then be criticised on the other for listening too much. The truth is that my door is always open, and I am happy to meet whoever knocks on my door to discuss the issues as often as is necessary to address them.

There is an important need to address the funding system. There is a risk that the current system will not deliver the outcomes that we want for our children. For too long, schools have struggled with funding systems that are both unfair and, as my hon. Friend the Member for Bromley and Chislehurst suggested, opaque. The amount of money that schools receive is now an accident of history, not a reflection of the needs of their pupils or of children.

Local populations have changed over the past decade. For example, the proportion of children receiving free school meals in Manchester has fallen by 31% since 2005, while in Blackpool it has increased by 19%. However, schools funding has not kept up. The distribution of funding today cannot reflect the needs of our children if it has not changed in more than 10 years. The key question is not about levelling up or levelling down; it is about whether funding is addressing the individual needs of children.

The impact of the current funding system is hugely unfair. Let me look closer to home for the benefit of those who have spoken today. A child who is sent to school in Bexley will attract £4,635, but in next-door Greenwich, that suddenly becomes £6,020. Different local authorities also make different decisions about how to fund their schools. In 2015, Brent chose not to allocate any funding to pupils receiving free school meals, whereas Ealing chose to allocate nearly £1,700 to each primary pupil in exactly the same position.

We are committed to fixing that. I am proud to say that last month we launched the consultation referred to by Nic Dakin, on new, fair, national funding formulas for schools and high needs. Our aims are clear, and I hope that Members in all parts of the House will agree that they are worthy. We want to create a formula that is fair, objective, transparent and simple. It should be clear how much funding is following each pupil, and that should be the same wherever they are in the country. Headteachers or academy trusts should know that if they move to take over underperforming schools, no matter where they are, their budgets will be fair and their schools will have the opportunity to excel.

Allocation is also important. We must allocate funding for high-needs provision, which has not been dwelt on today, on a fair and transparent basis. For too long, funding allocations have varied without reason. Parents and children with high needs deserve to know that the funding they require will be there, irrespective of where they choose to live. They deserve that security; they deserve that equality.

Photo of Bob Neill Bob Neill Chair, Justice Committee

I am grateful for what the Minister is saying. Will he assure me that he will present direct proposals to deal with the issue that was raised by our friend and colleague Councillor David Simmonds on behalf of the Local Government Association—the need to protect the high-needs element within any new arrangement for the formula?

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

As my hon. Friend knows, what has taken place so far is the first stage of our consultation. The next stage will come up with detailed allocations for local authorities, but it will also make clear how each block within the dedicated schools grant would function within the system, and will certainly take account of my hon. Friend’s concerns about the high-needs block.

Photo of Stephen Timms Stephen Timms Labour, East Ham

Will the Minister pay particular attention to the question of whether the schools block should include, as many have argued today, an element that would recognise the mobility within local authorities that we have been discussing?

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

That is an important point. We will, of course, consider how the issue of mobility can best be addressed in the funding system. There are a number of ways of doing that, but it is certainly a priority in our determination of the new formula, along with in-year growth, population growth and so forth.

Despite the clear principles behind our national funding formula, there are still some myths about the potential impact on London, some of which we have heard about today. I want to take the opportunity to put those myths to bed. There is, for instance, the myth that the national funding formula is about London versus the rest of the country. There are two grounds on which that is simply wrong. First, the funding formula will deliver fairness to all parts of the country, whether they are urban or rural, shire or metropolitan, north or south. Secondly, London is not a homogenous area. At this moment, a parent who moved just a few miles from Haringey to Hackney—this point was made by Catherine West—would increase the funding for their child by £1,000. We heard about areas such as Croydon—Mr Reed made an interesting speech in this respect—that are struggling to recruit teachers because they cannot pay as much as better funded areas just up the road. We need a fairer funding system within London, just as much as we do across the whole country.

The second myth I want to dispel relates to funding for pupils from disadvantaged backgrounds, on which the right hon. Member for East Ham wanted a specific answer. I hope I can assure him that where pupils have additional needs, we will provide extra funding. This is a fundamental principle of the national funding formula to ensure that such pupils can overcome entrenched barriers to success.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth

I thank the Minister for his willingness to listen and the depth of his investigation into all the different issues around the funding formula. In the context of disadvantaged pupils, he just talked about “additional needs”. What does he mean by that? Is he talking about special needs or the issues that Opposition Members have been raising about the inherent disadvantages experienced by children living on very low incomes in many of our communities?

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

The hon. Lady raises a good point. I am talking about additional needs in both respects, and during my speech I will address them. Obviously, some additional needs are addressed within the school system, and some within the high-needs block, but I will touch on both of those.

As our recent consultation made clear, the formula should contain a significant element of additional funding for pupils from disadvantaged backgrounds, and there should be funding on top of the basic per-pupil amount for pupils on free school meals, pupils with low prior attainment and pupils who speak English as an additional language. The higher the level of need in a school, the higher the funding will be. I could not be clearer on this point, and anyone who engaged with the consultation will have seen that set out in black and white.

Some have suggested that the national funding formula will not take into account the higher costs faced by schools in London. Again, our proposals could not be clearer. We consulted on a proposal for an area cost adjustment—a general increase for schools facing extra costs from higher wages—which will be important for schools in London. Our second consultation will detail exactly how this would work.

The final myth I would like to address is that so-called cuts in London will undo the huge improvement in standards in recent years. Schools in London have improved tremendously in recent years. It is testament to the hard work of teachers, headteachers, pupils and their parents. There are schools up and down the country, however, that are still getting excellent results in spite of the funding system, not because of it. The national funding formula will put funding where it is needed, so that all schools have the best opportunity to deliver a world-class education for their pupils.

As hon. Members have made clear, London’s schools are thriving and continue to thrive. Moreover, in the last 10 years, the percentage of pupils eligible for free school meals has dropped from 27% to 18%, and the number of pupils living in highly deprived areas has also dropped dramatically, but of course challenges remain. The funding system will recognise the challenges in London. That is why London will continue to benefit from the pupil premium, receiving £436 million this year—nearly 20% of the total across the country. This is vital. We can see excellent examples across London of pupil premium funding being used to ensure that disadvantaged students receive the best opportunities for their education.

As for future funding, as I have said, we will publish proposals on the details for schools and high needs in the second consultation. In the meantime, hon. Members will understand why it would not be appropriate for me to speculate on the specific impacts of the new formula in London; suffice it to say that the new formula will reflect the responses to the consultation, rather than the specific requests made by the cross-party f40 group. The consultation so far has been very important, because there were several issues on which we needed answers in order to do the detailed modelling.

Photo of Steve Reed Steve Reed Shadow Minister (Communities and Local Government)

I understand why the Minister cannot give more detailed responses now, but will he agree to meet officers of the all-party group for London, when we reach the next phase, to go into more detail, when the information is available, so that we can discuss with him whether it meets the concerns raised in this debate?

Photo of Sam Gyimah Sam Gyimah The Parliamentary Under-Secretary of State for Education

I would be delighted to meet the all-party group to discuss these issues before, during and after the consultation.

We still have a big and difficult job ahead of us. Reorganising £40 billion of schools funding is not an easy task, and it is one that we should carry out carefully and thoughtfully. We need to think through the transitions, as Nic Dakin so eloquently said. I continue to find encouragement from the wide support that exists for these reforms across the country, throughout the sector and between political parties. I am grateful to my hon. Friend the Member for Bromley and Chislehurst for putting this matter on the agenda again in the Chamber. Providing educational excellence everywhere is a key part of our mission, and it is something that we need to do very carefully. After all, this is about this country’s future. A number of important points have been raised in the debate, and they will be reflected in the consultation and in the formula. I look forward to engaging with Members across the House to ensure that we have fairer funding for all our schools and all our children.

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

I know that Robert Neill will make a brief wind-up speech. Even though he is a distinguished lawyer, if on this occasion he could confine himself to the norm of two or three minutes, we would all be greatly delighted, especially those who are waiting to present petitions and the Member who has the Adjournment debate. So the hon. Member for Bromley and Chislehurst really just has an opportunity to clear his throat.

Photo of Bob Neill Bob Neill Chair, Justice Committee 6:52 pm, 4th May 2016

Thank you for giving me that time, Mr Speaker. I should like to thank all Members who have participated in the debate, and to thank the Backbench Business Committee for making it possible. This has been a constructive debate. It is not always necessary to approach these subjects in a partisan fashion, although there have been some partisan speeches. If we strip out the rhetoric, however, we find key issues on which there is common ground, as the Minister and the shadow Minister recognised. I am grateful to the Minister for his assurances about meeting the group and about taking on board some of the key issues that have been flagged up around the high-needs element, mobility, which is particularly important, special educational needs, and cost pressures and cost adjustment. He will know that the devil is in the detail, and his willingness to engage with members of the group is appreciated. This is obviously an important issue, and it was therefore important to ventilate it on the Floor of the House before the consultation finished. I am grateful to all Members for their help.

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

It was extremely succinct. We are greatly indebted to the hon. Gentleman.

Question put and agreed to.

Resolved,

That this House
notes the Government’s intention to implement a new funding formula for schools from April 2017;
welcomes the Department for Education’s commitment to hold a detailed consultation on this proposal;
calls on the Government to recognise the unique challenges schools in London face;
and further calls on the Government to ensure that any changes to the funding model are both fair and proportionate to London’s needs.