7 52 pm

Schools: Funding Reform — Statement – in the House of Lords at 7:44 pm on 19th July 2011.

Alert me about debates like this

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education 7:44 pm, 19th July 2011

My Lords, I am grateful to the noble Baroness for her response. I welcome her offer to contribute to the consultation and to have constructive conversations about the way forward.

I will answer the questions that she asked. I am glad that she welcomed the announcement on capital that we made today. She called the decision taken by the Secretary of State last July to cancel the Building Schools for the Future programme "precipitous". We had to stop it and act rapidly because of the economic situation that we had inherited. We could not carry on with the programme and, as a consequence of having taken that decision, we have been able to make savings on some of the programmes and projects that have gone ahead, which has contributed to the £500 million that we were able to announce today to help with basic need.

The details on private finance will need to be worked out. The Government believe that they can learn from previous schemes and find ways of doing it better. My noble friend Lord Sassoon announced today that the Treasury has identified £1.5 billion-worth of savings from running current PFI projects, but we will need to work out the details.

The noble Baroness is absolutely right that the condition survey needs to be carried out speedily. We want to start straightaway. She asked about basic need and free schools. This is a pot of money that will be allocated to local authorities on the basis of demographic need, where the need for new places, particularly primary places, is greatest.

I accept the noble Baroness's point about revenue. She said that some schools need more than others. The principle that we are striving for, which I am sure she shares, is that schools in similar circumstances, with similar conditions and similar pupils, should be funded on an equal basis. However, I accept her underlying premise that some schools will have different needs. I also agree with her that moving to a national funding formula may not be simple. The system is inherently complex. That is one reason why we will do this very cautiously-which the noble Baroness welcomed-rather than rush it; we will have a lot of consultation, make sure that there is proper transitional protection in place and not implement it before 2013-14 at the earliest. As the noble Baroness knows, one of the questions in the consultation is whether we should do this on an even longer timescale.

On the question of academies funding, I am absolutely clear that the principle to which we are working is parity of funding. We are having this consultation because of the views expressed to us by local authorities, and the concern that they expressed about the decisions that the Government reached at an earlier point about the basis on which funding would be taken from them, to stop the double-funding that had been going on.

The noble Baroness asked about special needs. It is very much our intention that everything we do should be compatible with the direction of travel set out in the Green Paper. Another proposal out for consultation is that we should have a special block of money for high-needs pupils to make sure that their needs are properly protected.

The subject of 16 to 19 funding is extremely important. We propose to look at that, too, and see whether we can simplify it, on the same lines as we are trying to simplify schools funding. We will run a review on that, which will start in the autumn.

On overall funding, I agree with the noble Baroness about the importance of maintaining funding in schools. In difficult circumstances, my right honourable friend the Secretary of State managed to protect funding for schools at flat cash levels with the pupil premium on top. In the circumstances, that was a good settlement for the Department for Education. On our announcement today about capital and about basic need, I am the first to concede that it is not the answer to everything, but it is a step in the right correction. I am glad that the noble Baroness welcomed our announcements on capital and revenue-with the caveats that she expressed -as a step in the right direction.

Photo of The Countess of Mar The Countess of Mar Deputy Chairman of Committees, Deputy Speaker (Lords) 7:57 pm, 19th July 2011

My Lords, the noble Baroness, Lady Hughes, mentioned her concerns about funding for 16 to 19 year-olds. The Minister will be aware of my concerns about young people with ME who have been learning through the Nisai Virtual Academy. The funding continues through local authorities until they are 16, but it is now being cut off for 16 to 19 year-olds. At a vital stage when they are taking their exams, they find that they can no longer continue with their education.

I understand that Harrow College is funding existing students through their courses but will take on no new students. The Minister may agree that, as ME causes more long-term sickness absence in schools than any other illness, and about two-thirds of children on home tuition have ME, this is a very important group of children. Many of them are high achievers who are very frustrated because they cannot get on. Will the Minister give us hope that there will be funding? The virtual academy-it is virtual because it uses the internet-cannot tick the boxes for Ofsted and the Assessment and Qualifications Alliance because it has no bricks and mortar. Will the Minister help?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

I am very sensitive to the noble Baroness's point about children with ME, for a variety of reasons. I will look into the case that she mentions. Perhaps we can talk about it and take it forward.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat

My Lords, I thank the Minister for repeating the Statement. I heartily welcome the fact that the Government are grasping the nettle of the complexity and unfairness of school funding, which the previous Government did not do in 13 years-indeed, they compounded the complexity problems.

First, I will say a word about capital funding. I notice from the Statement that the Secretary of State has accepted Mr Sebastian James's recommendation to move towards greater standardisation of design of school buildings. Casting my mind back to the debate during the Localism Bill, I am sure the Government would not want a set of cloned schools all over the country. Can the Minister confirm that there will be a set of standard designs from which local communities can chose the most appropriate for their particular needs, not just one size fits all? That would not be in line with what this Government are trying to achieve. Will he also say whether energy efficiency, including microgeneration, will be included in those standard designs because, moving forward, that is going to be a very important issue?

On revenue, I welcome the consultation on moving towards a fairer national funding formula with appropriate room for local discretion-that is particularly important to those of us on these Benches-and the move towards a simpler, fairer and more transparent system. Schools need to know what to expect. From what the Minister said, I am sure he accepts that if you have a very simple system, it is likely not to be very fair, and if it is a very fair system, it is likely to have some complexity. I am sure that the Government's consultation will allow for that. I also particularly welcome the Government's determination to iron out the inequalities between areas and between academies and local authority schools.

On the subject of academies, I welcome the fact that the Government are publishing a consultation document for local authorities explaining the basis on which they intend that the money will be deducted this year and next. Does this mean that local authorities with no academies will have no deductions? Does it mean that there will be a standard costing for the services that academies will provide which local authorities will no longer provide? Finally, will he tell us a little more about how special schools will be treated?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

Like my noble friend, I sat through the previous debate on design, and I thought someone would ask me about it. I was expecting the noble Baroness, Lady Whitaker, to be in her place, but my noble friend has asked the question instead. Coming to listen to another Bill going through its Committee stage and being subjected to some of the same kind of scrutiny to which I have been subjected in the Moses Room makes a nice change.

On design, the Government want to get a balance between delivering savings through a common sense approach and not reinventing the wheel every time. I agree about not having a one-size-fits-all design that can be rolled out across the country. There clearly needs to be proper discretion about the set of standardised designs-plural-that we would work up. In that context, building schools and other buildings that are energy efficient is extremely and increasingly important.

I agree with my noble friend about the importance of local discretion in thinking about revenue. She put the point about simplicity, equity and complexity very well. It is precisely those issues that we will need to tease out in the consultation to try to get to a point where there is more transparency and openness but there is still room for people to make sensible judgments on the ground. As she also said, we want to iron out some of these inequalities across the country. The points she raised about academies and academy funding are the sorts of issues that we will be discussing with local authorities and their representative bodies to try to resolve this issue.

Special schools, like all schools, will be able to apply for funding to help with their condition because we know from the work we have done that, just as with other schools, there are special schools in great need of help with dilapidation, so they will be able to apply to the same fund.

Photo of Lord Boswell of Aynho Lord Boswell of Aynho Conservative

My Lords, I, too, welcome the Statement. Can my noble friend help me with a couple of details on the capital side? First, possibly in parallel with, rather than in sequence with, the study that he is to undertake into the state of school conditions, will he be giving some thought to building up a matrix that will aid him in deciding which schools have the greatest need for capital work so there is a principled basis for doing it?

My second point is something of an extension of the point made by my noble friend Lady Walmsley. It is in relation to the cost of building projects. Will he make sure that the costing takes into account the whole-of-life cost so that the building projects are sustainable, rather than simply the cheapest at the time?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

My Lords, the point of carrying out the condition survey is precisely to arrive at the point, to which my noble friend referred, where one can make a fair comparison between schools across the country to work out which of them have the greatest need and are most in need of having their condition improved. He is obviously right about that.

So far as the cost of the building projects is concerned, my noble friend makes a good point. One of the things that we will be looking at is how to try to secure the best possible value in a number of different ways, perhaps by grouping schools.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour

My Lords, the noble Baroness is a very distinguished Member of this House, but I think Labour Back-Benchers are the only group who have not had a turn so far. We have a certain amount of time.

On design, did not the Victorians produce some extremely distinguished school buildings that have stood the test of time on the basis of just three or four rather standardised models? I hope the Minister will look at that example and perhaps be inspired by it.

On revenue funding, at first sight, one sees that it appears very just and sensible to cut back proportionately revenue funding to LEAs where a portion of that funding is earmarked for services that are now being paid for directly by funding academies. However, is it not the case that there are very considerable economies of scale in education, including in the operation of LEAs, and that the administrative and other fixed costs of those LEAs in providing those services will now, under this new system, fall on a reduced volume of funding for the LEA schools and therefore be a higher proportion of that funding? Therefore, schools that remain within the LEA system, will lose out, simply because there are academies in that area, and they will lose out more, the more academies there are in that area. Surely that is not fair either.

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

I agree with the noble Lord about Victorian schools. I am not an expert, but I think one of the reasons why, when one goes around London, they all look quite similar is because they were procured by a board. He is absolutely right about the question of how one goes about doing that. That demonstrates that it is possible to have something that looks recognisable but is also good quality and stands the test of time. My observation, as someone who gets sent around academies quite a lot, is that they all had fantastic architects and a lot of expense, and they all pride themselves on how original they are, but they all look quite similar if you look around the country. Going back to our earlier debate, I think the point about how design is accepted at a time is well made.

I understand the noble Lord's point about economies of scale and academies. It is obviously the case, and it is indeed happening, that many academies are choosing to carry on buying services from the local authority if they think they are good quality local services and that they are delivering what they want. It is also the case that some local authorities are embracing, if that is the right word, a different role and are thinking that they want to be in the business of becoming commissioners and selling their services to a range of schools across broader areas. A number of different approaches are developing. I accept the underlying point he makes, but there is a varied response going on across the country.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I want to add to the design debate. First, I entirely agree with what the noble Baroness, Lady Walmsley, has said. Energy efficiency is also very important, but please let us have a design architectural competition to choose some of the best experts in that area. Secondly, the repairing of the older schools is terribly important because, again, pride in your school requires you and enables you to keep it in good order. The less well cared for a school is, the more likely it is to get kicked about and made even worse. Thirdly, and anticipating a debate we might have tomorrow but which sadly I can no longer take part in as I shall not be there, the involvement of the children themselves in the design of these schools and what is required there is crucially important. I have seen it in action with some young children advising student architects on what they should incorporate into a design. I hope that the Minister will bear that in mind when he is thinking of student governors.

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

I am sorry that the noble Baroness, Lady Howe, will not be joining us tomorrow but I am looking forward to our debate on school governors. I agree with all her points. I agree that involving the children or the students in what is going on in a school is jolly important. Her point about the upkeep of it and people taking pride in it is also obviously right. Getting input from architects will also be extremely important when we are trying to come up with our standardised set of designs.

Photo of The Bishop of Chester The Bishop of Chester Bishop

My Lords, the noble Lord, Lord Davies, was not entirely right to say that it was only the Labour Benches that had not yet contributed. We do not like to be overlooked too much, small though we are. I have another question for the Minister about new buildings, and about the procurement process. I speak as the chair of a new academy that has gone through the procurement process for new buildings. I have been struck by just how complex it is and how the costs of that must be built in to the end cost you have to pay when you get to the final preferred bidder. I agree that simplification in the design process should not go too far, but could that simplification also be applied to the procurement process?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

The remarks made by the right reverend Prelate echo my almost daily plaint. I agree with him entirely. It is our hope that with the new scheme we will be able to deliver it faster, perhaps up to 12 months faster, which will obviously save money. I agree that these processes can seem extremely complex. If he has experience from the academy with which he is involved, I would be interested to talk about that because we are keen to learn and try to do it better.

Photo of Baroness Wall of New Barnet Baroness Wall of New Barnet Labour

My Lords, I want to highlight a couple of things in the Statement, but first I must say that I think it was quite a mean-spirited Statement in its very negative description of the approaches taken by the previous Government. Even in the paragraph on academies, there is no recognition of the success of the academies programme, which started under the previous Government and has carried on under this one. It is probably the most negative Statement that I have seen for quite some time in this House, and I just want to put on record the fact that I am very disappointed about that.

I have some questions about university technical colleges. Where do they fit into all this? What is their relationship to the academies? What is the funding for them? I am quite surprised that the Statement does not refer to them as the way forward. Noble Lords will know from the noble Lord, Lord Baker, that they are very much the future, as I know from my involvement with some of the FE colleges that are going in that direction. Where are the university technical colleges going to fit in terms of revenue and the whole process?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

My Lords, I hope that noble Lords who have been subjected to me talking about academies would say that I have always been very quick to make clear the huge contribution that the previous Government made to academies. I have said from the beginning, although this might not always be an altogether welcome message for those on the Benches opposite, that I see my job as trying to build on what the previous Government did and what they intended to do in 2005. We are taking that forward; I am very clear about that. I am also very clear about Building Schools for the Future, having met a lot of the schools, children and heads who were involved with it. I absolutely share the previous Government's intention to improve the building estate. I know what they were trying to do, and I understand why they did it, so I am sorry if the noble Baroness felt that the Statement was mean-spirited.

We did not mention funding for the UTCs in the Statement, but the noble Baroness will know that the Chancellor found some more money in the Budget to-I hope-double to 24 the number that we were aiming for in the lifetime of this Parliament. That is in place, and is not affected by anything that we have announced today. Given that these are new institutions, I guess that by definition the pot for dilapidation is not going to be relevant to them. As she will know from her conversations with FE colleges, there is a lot of support for them. We have had a large number of applications, which we are considering, and we will in due course make announcements on those which I will be very happy to share with her.

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Liberal Democrat

May I press the Minister a little further? Where does the pupil premium fit into these proposals? As I understand it, there will be an allowance for deprivation and so forth on top of the basic amount, and I assume that that is where the pupil premium will come in. However, given that the local schools forum will still play a part in allocating resources at a local level, how can schools be guaranteed that they will actually get the money that they need from the pupil premium?

Photo of Lord Hill of Oareford Lord Hill of Oareford The Parliamentary Under-Secretary of State for Education, The Parliamentary Under-Secretary of State for Education

That is an extremely good question. Our approach to the pupil premium has consistently been to put it on top of other funding that is made available so that people can see very clearly where it sits and will over time be able to calculate its effect as we build it up. Our intention is that it will continue to be identified separately and go to schools, which over time will report on and account for the purposes to which it is spent.

Sitting suspended.