Baroness Wilcox of Newport:

Moved by Baroness Wilcox of Newport

87: Clause 33, page 30, line 3, at end insert—“(11) Within the period of one year beginning with the day on which this Act is passed, the Secretary of State must publish an assessment of the impact of this section, which must include analysis of the distribution of funding by geographical location and comparative deprivation.”Member's explanatory statementThis amendment would require analysis of the changes made to the National Funding Formula that remove the role of local authorities in allocation.

My Lords, we degrouped the amendment because, although it was related to an earlier group, we wanted a specific ministerial response on this policy choice to remove local authorities from the allocation. To fully evaluate the changes, the public will need—and indeed deserve—a robust analysis of how they affect the funding by region when we know that there are already huge disparities in how different areas have been funded, as was alluded to in the previous debate. Indeed, in some cases, this has worsened over the duration of the pandemic. We cannot have this change just happen without detailed analysis and democratic scrutiny. Recent examples, such as the woeful implementation and less than satisfactory delivery of the National Tutoring Programme, clearly demonstrate that monitoring, evaluation and scrutiny of the implementation of policies are key drivers of success.

The DfE has acknowledged that there is a critical question over whether there would continue to be merit in local control of certain aspects of mainstream school funding, and we would argue that there is such merit. But what does the profession say? I will quote Geoff Barton, the general secretary of the Association of School and College Leaders. I am sure that my noble friend, although she is not in her place, will agree with me that ASCL is not the most revolutionary of trade representative bodies. Nevertheless, he says:

“While we support the direction of travel, our bigger concern is that there is not enough money being put into the system in the first place. The cake is too small, no matter how it is sliced. We recognise that the government is currently investing more money in schools but we do not think this is enough to repair the damage done by years of underfunding and we are concerned that much of the new money will be simply eaten up by rising costs. This is even more critical because of the havoc wreaked by the pandemic and the pressing need for significant investment in education recovery.”

So if not this amendment—as I predict that the Minister cannot agree to it today—what are the Government’s future plans to assess these impacts? I beg to move.

My Lords, I totally support the amendment moved by the Front Bench. If this change in the system of funding schools goes ahead, it is essential that an assessment along the lines proposed is made.

However, I question the need for—indeed, am deeply opposed to—Clause 33 and Part 2 as a whole. I am against the proposal for a hard national funding formula, fundamentally because I am a believer in local education authorities—LEAs—as a matter of principle. My noble friend Lord Knight is not in his place, but he said that everyone would be raising their hobby-horse, and this could well be mine. I am in favour of a seamless education system that works for local people through their local representatives. I am prepared to accept that there is scope for debate on the structure of LEAs. Personally, I have a predilection for bodies of sufficient scale which have significant financial and organisational autonomy—basically, a service that is run democratically and is responsive to local voices. Unfortunately, the trend over the last 40 years has been the other way: centralisation and financial restrictions.

I have re-read the debates that have brought us here and it is my view that no case has been made for a hard formula. Some figures are quoted showing what might be thought were gross discrepancies in what individual schools were receiving in financial support, but without providing the context within which these figures have been reached, it tells us nothing. We are also told that the new system will provide “a consistent assessment,” as if that in itself was sufficient justification, when in my judgment it will be consistently bad. In truth, a close reading of the White Paper tells us that it

“supports the expansion of … trusts.”

What we have here is little more than a by-product of the move to full academisation.

I am against a hard formula in principle, but I am also against it in practice, because it will not achieve a workable or effective outcome. I endorse the comments of the noble Lord, Lord Shipley, during the last debate, where the problems were made clear.

My view is that there is simply no formula that the Government can reach that will work without local input. No practical formula will encompass the range of possible circumstances that arise in running schools. We know that every school is different: different intakes, different buildings and different social environments. To account for these differences, a complex formula will be needed, and it will be impossible to comprehend its full consequences. It will be an untameable beast, including—to mix metaphors—feedback loops, so it will be uncontrollable. It is also inevitable that a hard formula will rely too much on hard parameters—those factors that are easy to quantify—and not give sufficient weight to more subtle factors that are less susceptible to easy measurement but still affect the resources required to run an individual school.

I also endorse the remarks made in the previous debate by the noble Lord, Lord Deben, who is not in his place, about the increased importance of getting the right data in a hard formula. The difficulty of this should not be underestimated.

It is inevitable that rough justice will be built into the system, and in practice there will remain a need for fine tuning, but unlike the existing system it will be done in a place remote from the local area.

In summary, I am totally against the implementation of a hard, national funding formula that removes any local flexibility from the school funding system. The current soft formula enables head teachers and local authorities, via the schools forums, to address any local issues through a local formula applied on top of the national formula in a fair and transparent way. Local decision-making is tried and tested. It has supported many schools through difficult financial periods, such as a sudden change in leadership or growth. Local decision-making is vital in the school funding system to ensure that any local issues can be addressed immediately and sympathetically. LEAs will lose the ability to take local priorities and the needs of all schools in their area into account, and will have to deal with the additional school costs that are bound to arise and cannot adequately be addressed through a formulaic approach.

Just as an example, forecasting accurate roll numbers while the long-term impact of both Brexit and Covid-19 is still uncertain is very difficult. There is no way of knowing what the school roll will be in advance. There have been significant changes in demand for places over the past decade which the local formulae have been able to respond to swiftly to ensure budgets could cope with a sudden sharp increase or decrease in places. Local formulae are, as discussed and agreed at the schools forums, published and transparent, and I simply do not recognise the need to move to a hard formula.

A further reason to oppose a hard formula is that I simply do not trust this Government. This is a general problem with central government decisions on local spending: there is inevitably an element of political bias. The auguries are bad, given, for example, the impact on London’s schools of the Government’s levelling-up agenda. Such discrimination between areas is bad enough; just imagine if it were to occur on a school-by-school basis.

Finally, the Government need to give more thought to the political consequences of having a hard formula—be careful what you wish for. Every MP in England will have cases brought to them about the funding of individual schools in their constituency, and they will expect an answer from the Minister. It is inevitable that the funding of almost every school will become a political problem for the Government. That will not be good for politics and it certainly will not be good for education.

My Lords, I will intervene briefly. I apologise that I have been away and therefore unable to participate in debates on the Bill as much as I would have wanted to. I start by declaring my interest as still being a member of Cumbria County Council.

I agree with quite a bit, but not all, of what my noble friend Lord Davies of Brixton has just said. I am personally not against academies and academy chains; I think they have brought fresh thinking into the education system. The problem is how to regulate them. My impression is that the Bill is adopting far too centralised an approach.

The essence of the point I want to make is that it is my impression that, in my own authority, the schools forum approach, allowing the per capita payment to be flexed, has worked well. It has worked well in two respects, and I hope the noble Baroness might address this. I have great respect for her and her concern for education, and I hope she might reflect on these points.

First, in an area that is a mixture of big towns and lots of rural village schools, the formula can be flexed to help keep open village schools that serve important local needs. This is particularly true in areas where there are big distances, such as Cumbria.

Secondly, there is a problem when a school gets into difficulty. Schools can get into difficulty quite quickly, particularly if there is a change of head or something like that, and it does not work out well. In an area where there is no shortage of school places and parents have a lot of choice—this applies particularly at secondary level—you then get into the situation where parents can choose to take their children out and put them into other schools in the area if they think a particular school is not doing well.

You cannot turn that situation around—perhaps the noble Baroness agrees with me—by having to cut teachers as a result of school income declining. Somehow, we have to get better leadership into the school, and I am sure that this is what an academy chain would want to do. The formula has to reflect that possibility. How is that going to happen? I fully support the amendment from my noble friends on the Opposition Front Bench.

My Lords, I was not going to speak on this issue; I will do so very briefly. It is really important, and it is a shame that it is so late in the evening. I am in two minds about it: I can see where the Minister is coming from but my views, on the whole, accord with those of my noble friend Lord Liddle, who has just spoken.

The point I want to make, and I would ask for the Minister’s observations on it, is this. When I was doing her job, I remember when I learned that my decision on how the money should be allocated was not replicated in the local authority. I was a bit cross about it: here we are taking decisions about this, we send the money out to the local authorities and, blow me down, they change it around. I then realised that we just had to live with it—that was democracy, and that was making sure there was some local flexibility. However, I can remember feeling irritated by it. We lived with it because we were not as centralised as this Government intend to be.

My worry about this is not that it is trying to remedy the wrong that was referred to earlier on this evening—that 20 local authorities do not pass on the funding to small schools in rural areas when it leaves the department. It does not look like that to me, although I do not doubt that she is concerned. The way it looks to me is that this Bill is about giving power to the Secretary of State over every school and over everything. The minute the Government do that they have to control all the money. It seems to me that is the order: if the Government were not taking all the powers to control every school and everything they do, they would be able to be more flexible with the money, because that flexibility with the money would go with the flexibility given to the school. Because the Government are taking all the power to control all schools over all things, it looks as though they have thought, “The only way we can do that is to control every penny as well. We have to have that lever.” That is what worries me. If you put it together with what is happening in initial teacher training, it is the last brick in the wall of an absolute top-down, very heavily controlled nationalised school system. I would really like the Minister’s observations on that.

My Lords, I will start by setting out the principles of Clause 33, in response to the intention of the noble Lord, Lord Davies, to oppose the question that the clause stand part of the Bill. I am thankful for the opportunity to debate the role of Clause 33 and this part of the Bill more broadly. This measure implements the direct national funding formula and, as I said in response to the third group, delivers on our long-standing commitment to achieve fair funding for schools. We received wide-ranging support from the sector for this vision of how we fund schools in our consultation last year, and we heard your Lordships’ views on the importance of not only holding consultations but listening to them.

A single national funding formula, replacing the current 150 local arrangements, will make funding for schools simpler, fairer and more transparent. It will allow the sector, and your Lordships in this place, to hold the department to account for school funding. This measure outlines the framework of roles and responsibilities for the new funding system. The reforms set out in this part of the Bill have been developed carefully, in extensive consultation with stakeholders, to ensure we reflect the needs of pupils and schools in the fairest and most consistent way.

The noble Lord, Lord Davies, talked about how well the system had worked previously, but when I look at the data for funding per pupil from 2017—I think this was something the noble Baroness, Lady Chapman, also touched on earlier—for Brent and Lincolnshire, both of which had 12% of children on free school meals, the funding per pupil was £5,523 in Brent and £4,305 in Lincolnshire. Similarly, there were big differences in a number of other areas, not only London boroughs. For example, Blackpool and Manchester, at that time, had 25% of children on free school meals and there was about £800 higher funding per pupil in Manchester than there was in Blackpool. I hope the noble Lord will acknowledge that is hard to see as either transparent or apparently fair.

The noble Lord, Lord Liddle, might have enjoyed the earlier group where we talked extensively about smaller rural schools. It may interest him to look at Hansard and see that significant increases in investment have been made in small rural schools and changes have been made to funding to make sure they get what they need. Changes to the way rurality is measured, one of which will be very relevant in Cumbria, has meant that the number of schools qualifying has increased from about 1,600 to about 2,500. There has been a big focus on that area.

The noble Baroness, Lady Morris, is extremely generous to describe us as being in the same job; if I remember rightly her job was a lot more senior, but that is very kind of her. I understand why she challenges in the way she does. She talks about centralisation of power; another way of saying it, as she will recognise, is that one of our privileges as Ministers in government is that we can try to make sure there is justice for children wherever they are in the country. One thing uniquely within central government’s power is the ability to think through making sure that every child in every area gets fair and equitable funding for their school. She presented it this evening through the lens of centralisation of power, but she will also acknowledge that there are fundamental freedoms in the academies system around finances, curriculum and a number of other areas which, as I have already said at the Dispatch Box, we intend to protect. I encourage her to see that there are different ways of looking at this, and our way is in terms of justice for children.

Finally, the noble Lord, Lord Davies, asked how an MP would respond to his challenge on this. I encourage him to look at the fact sheet we put out with the Bill on the national funding formula. If I were the MP responding, I would certainly pick out that it is fair, efficient, transparent, simple and predictable.

I think figures were quoted comparing Blackpool and Brent—

It was Blackpool and Manchester.

Okay. Does this imply that the introduction of the new funding formula will see a significant reduction in the payments received by the school that had the higher figure? The Minister told us there was a difference but we do not know the reason for it. If she is saying that the reason is unjustified, it must lead to a reduction in funding for the school that had the higher amount previously.

I see the noble Baroness, Lady Chapman, is tempted to answer the question. The figures I referred to were from 2017. I am happy to set out in a letter to the noble Lord more of the reasons for the differences, but I suspect, being familiar with the subject, he knows what some of them are. To date, no area has seen a reduction in nominal terms in its funding. One reason why we intend to implement this over a longer period is to avoid any disruption to local funding. As I am sure the Front Bench opposite would say on my behalf, it will depend on the total quantum of funding committed to our schools.

I thank the noble Baronesses, Lady Chapman and Lady Wilcox, for Amendment 87 and for their unerring focus on ensuring that all children have a fair chance to realise their potential. The introduction of the national funding formula in 2018 was a historic reform to school funding, replacing what we believe to have been an unfair and out of date system.

The national funding formula already calculates funding allocations for each school, which, as I mentioned in the earlier group, are publicly available and, with these, the calculations used to determine funding allocations for local authorities. In the current system, individual schools’ final allocations are then determined through 150 different local formulae. The direct national funding formula will mean that every school is funded through the same national formula, with only specific, local adjustments. That will achieve this Government’s long-standing ambition that funding is distributed fairly, and means that parents, school leaders and governors will have assurance that their school is funded on the basis of the needs and characteristics of their pupils, rather than where the school happens to be located. The intentions of the reforms are not to lead to changes in the distribution between geographical areas, but within them.

Similarly, this change should not impact how much funding the formula directs overall towards socioeconomic disadvantage. Instead, it should ensure that each school, in each local authority, receives a consistent amount of deprivation funding based on their pupil cohorts.

I want to reassure noble Lords that we are committed to levelling up opportunity to make sure that all children have a fair chance in life, wherever they live and whatever their circumstances. We are specifically targeting funding towards disadvantage. Through the national funding formula, we are allocating £6.7 billion towards additional needs, including deprivation, which is a sixth of available funding. In addition, we are directing other funding sources towards disadvantaged pupils, including the pupil premium which is rising to over £2.6 billion this year, and the school supplementary grant which includes a further £200 million targeted towards deprivation. We are also allocating over £200 million to support disadvantaged pupils as part of the holiday activities and food programme. This means that, altogether this year, we are allocating £9.7 billion towards pupils with additional needs, including deprivation.

For the 2022-23 academic year, the Government have committed around £500 million through the recovery premium and £350 million through the national tutoring programme, through which 1.5 million courses have been started so far to support the children whose education has been most impacted by the pandemic, with a particular focus on disadvantaged pupils.

By introducing the national funding formula and replacing the previous postcode lottery, we have a funding system that is much more responsive to changes on the ground. School funding is allocated based on current patterns of deprivation and additional needs across the country. It means that pupil intakes that have similar levels of deprivation, such as Liverpool and Wolverhampton, or Calderdale and Coventry, are now receiving similar levels of funding per pupil. The redistribution of funding seen since the introduction of the national funding formula reflects that the funding system has been catching up with changes in patterns of relative deprivation.

As we have discussed at length, the principle of transparency has underpinned our reforms to the school funding system. As I have said, we publish information annually on the national funding formula. We are committed to publishing the impact of transition on individual schools and on different types of school every year. I would also like to reassure the noble Lord, Lord Hunt, who is not in his place, that this does include the factor weightings which he questioned in the last group. Based on this, it is already possible to see the geographical distribution of funding and how that changes year on year, and what support the national funding formula offers for deprivation. We will continue to review the impact of the national funding formula in terms of meeting policy objectives, such as supporting schools to close attainment gaps. In addition, we want to ensure the information we publish is as helpful as possible and we are currently consulting with schools and the wider sector on what published information would be most useful for them.

I hope this has persuaded your Lordships that the national funding formula will continue to distribute funding ever more fairly, based on the needs of schools and their pupil cohorts. I therefore ask the noble Baroness opposite to withdraw her Amendment 87.

I thank the Minister for her reply. Nevertheless, our concerns remain, and much of what my noble friend Lord Davies has discussed is worthy of support. But in terms of our specific amendment, our call for a robust analysis still stands, together with detailed democratic scrutiny of the funding formula, and concerns around the removal of local authorities in allocations of funding still apply. However, I beg leave to withdraw my amendment.

Amendment 87 withdrawn.

Clause 33 agreed.

Clauses 34 to 38 agreed.

I should tell noble Lords that the noble Baroness, Lady Brinton, will be taking part remotely on the next group. I hereby ask the noble Baroness to introduce Amendment 88.