It is important, when debating this issue, to avoid the risk we often run in this House of getting into an auction on spending figures. I very much commend Ministers for having focused not just on the totals of funding allocated, but on the policies designed to ensure, as is incredibly important at a time of rising living costs, that that money is going as far as possible.
I must, in my introduction, perhaps challenge a little the comments of Munira Wilson. I certainly remember being in the room with David Laws—then Education Minister, and someone for whom I have a good deal of respect—when the free schools policy, of which my son is now a beneficiary at his primary school, was implemented under a Conservative-led coalition Government. It is important that we all recognise that there is good will on all sides towards achieving the outcomes we seek.
The figure for local authority expenditure in the most recent year for which it is available, the financial year to 2021, is £41.5 billion. That does not include local authority expenditure on children’s services that take place through academy schools. So, £41.5 billion is being spent on children’s services and maintained schools, and two thirds of that is on the education budget. And £41.5 billion is a lot in anybody’s money, so clearly it is right that the focus should be on how we spend that money best. We are sometimes at risk of talking about how the funding in the system is at the highest ever level, but the numbers of children in the system are also at an exceptionally high level. For most of our children, the numbers in the system drive expenditure rather than other areas of priority.
When we look at how things have been developing and where the Government are going, we see a welcome focus on not just totals, but outcomes. What is the money actually doing for the children we are seeking to spend it on? Opposition Members often talk about the Sure Start programme, on which more than £500 million was spent in the financial year that I referred to. However, one of the long-standing frustrations with Sure Start among people who spent time as an elected member in a local authority, as I did, was that the restrictions on it inhibited the benefits that it could deliver. The decision to shift that investment towards family hubs—to change the way in which that money was spent—is welcome, because it sees children in the context of their family and household and enables what we do for them to be greater for a given level of expenditure.
I will touch on a number of different aspects of the way that the money flows around the system, which is extremely important in considering how we best address the issues at the heart of this debate. When we look at what has been going on in the system with the money, it is important to recognise that according to those DFE figures—I reiterate that they apply only to local authority-maintained schools; the picture with academies is similar but covered by separate figures—we have seen an increase in the revenue balances held by schools, from £275 million to £379 million. The levels of deficits in maintained schools have gone down from £150 million to £128 million. The average balance held by maintained schools has risen to £160,000.
Those figures tell us that the system is extremely well resourced at the level of individual schools. That means that headteachers and school governors have the resources to deploy in the way that they know best, knowing the children and families that attend their setting. Interestingly, the figures also show that the only area of the system where there has not been an increase in the balances held is nursery settings. We need to recognise that a challenge remains in ensuring that the aspiration expressed for the national funding formula is reflected in the experience of those settings.
There has sometimes been a tendency to hide behind the fact that the money is allocated through local authority schools forums, but the reality is that the challenges that Members on both sides of the Chamber have outlined exist today. Much as I welcome the tax-free childcare policy for working families, which has been an enormous benefit to working households across the country—I should say that I am personally a beneficiary—we need to recognise that the Government are right to begin to look at such things as childcare ratios, because we must think about how the money that we are putting into the system can deliver the greatest service and the best possible outcomes for the children at which it is targeted.
The benefits of early education are often overlooked. We tend to talk about early education very much in the context of enabling parents to go to work, rather than what it does for children. The Early Intervention Foundation—a charity of which I was a trustee and which continues to do excellent work, funded by the Department, among others—highlighted that we can tell pretty accurately what a child’s key stage 5 results will be from their outcomes in the early years foundation stage. It is clear in the first years of life how a child’s progress—measured across the various outcome measures that that stage uses—will be reflected in their progress throughout life. That is a clear demonstration that what we do in the earliest years makes the biggest possible difference. I very much welcome the increased focus that seems to be coming from the Department on ensuring that that money is again spent in the best possible way.
It seems clear that all across the system, whether in nurseries or in schools, it is money allocated at local discretion that brings the best results for children. The feedback that I have had from headteachers across my constituency, where we are fortunate that almost all schools are either good or mostly outstanding, is that resources to enable catch-up at school level have added the most value.
The tutoring programme, ambitious and welcome though it was, has been less significant in transforming children’s outcomes than the school using resources in a way that reflects its local knowledge of the child and their family. The same is true of local authorities: they have seen a significant increase in expenditure, as we would expect in a system under pressure with more and more children, but it is with a level of local discretion, as outlined the Government’s approach, that we deliver the best possible outcomes.
Children with special educational needs and disabilities, who I know have been very much the focus of Ministers’ recent thinking, have often been most at risk in the context of the covid pandemic. They are at the heart of the recovery that we are talking about. They are also often the children who find it most difficult to access the childcare that they need, because small commercial and independent providers in particular struggle to recruit, train and retain staff who have the skills to provide specialist support where it is required. The role that local authorities will continue to play, including as convenors of multi-academy trusts under the Schools Bill, demonstrates that the Department for Education and its Ministers are listening. They recognise the challenges and see where things need to go.
I will finish where I started: £41.5 billion in local authority expenditure on children’s services and maintained schools, plus the expenditure on academy schools, is a lot of money by anybody’s way of counting. It seems to me that we must step back from the attempt at an auction of promises and focus on doing what Conservatives in government do best: making sure that we deliver value for money and outcomes for our children.