Before I call Mr Robin Walker, in the interests of good order, I have two announcements to make. First, the screens in the middle of the Chamber are not working, so, to see the time, Members will have to refer to the screens at either end of the Chamber. Secondly, I believe that a lot of Members wish to speak. May I ask those who wish to speak to rise now in their place?
Thank you. My supplementary point is that it would greatly enhance the chances of everyone getting called if those who wish to speak do not intervene on other speakers. I cannot enforce that, but that is my encouragement, so that everyone gets in.
It is a real pleasure to open this debate and to see such strong support from Government Members. It is a particular pleasure to speak again about a campaign that has been central to my career as an MP, and it is good to do so during the Government’s consultation to do something that no Government this century has done: to help the lowest-funded education authorities and provide a minimum level of funding to those who have suffered from unfairness for too long.
I am grateful to the Backbench Business Committee for granting the debate and for the cross-party support that helped to secure it, which ranged from my hon. Friend Jeremy Lefroy and my right hon. Friend Mr Davis to my hon. Friends the Members for South Dorset (Richard Drax), for North Devon (Sir Nick Harvey) and for Cambridge (Dr Huppert) and the hon. Members for Bolsover (Mr Skinner) and for Scunthorpe (Nic Dakin). F40 is and always has been a cross-party campaign, and as we celebrate some measure of progress today, I acknowledge the role played by Members in previous Parliaments, such as the former Member for Stafford, David Kidney, who led the campaign for many years.
I congratulate my hon. Friend on securing this debate. I apologise for intervening so early, but he mentioned my predecessor and I want to put on record my tribute to the work that he did. I point out that it is rather ironic that Staffordshire is one of the few counties that, despite this excellent move by the Government, has been left out. I am sure that my hon. Friend will return to that.
I wholeheartedly agree with my hon. Friend and I will indeed return to that. My hon. Friend Mr Stuart, as Chair of the Education Committee and over a long period, has championed this cause in this and previous Parliaments. Alongside them, Members of all parties and none in Parliament, councils, governing bodies, parent forums and unions have spoken up for the lowest-funded education authorities over the years.
I am grateful to the House of Commons Library, the Association of School and College Leaders and the Local Government Association for producing helpful briefs for the debate and, in particular, to the voluntary members and officers of F40 for the detailed work that they have put into informing Members. The F40 campaign has been running, representing the interests of the least-well-funded local authorities, since the Major Government, and this is the first time in all those years that it can celebrate a decisive monetary step towards fairer funding.
The previous Labour Government accepted the premise that the system for allocating school funding was unfair, non-transparent and in need of reform, but they did not have time to deliver on their consultation on a fairer system. The coalition Government have already delivered a new consultation, committed to a fairer and more transparent formula and delivered new, simplified local formulae, as well as the pupil premium, which is a better system for targeting deprivation than what went before. Until recently, however, F40 had won the argument for changing national funding but had precious little to show for it.
Despite all the aforementioned changes and the Chancellor’s welcome commitment to greater fairness, the same list of authorities remained resolutely at the bottom of the funding tables and, year after year, the gaps between those authorities and some of their better-funded neighbours grew bigger and bigger. F40’s long, hard campaign to get a better deal looked as though it had won plaudits but no pennies; words but not pounds. The announcement by the Schools Minister in March of £350 million specifically to help the lowest-funded areas changed that for most F40 authorities.
Many hon. Friends in the Chamber today were with me in the debate initiated by my hon. Friend Richard Graham in April 2012, when we welcomed the Government’s commitment to a fairer formula but bemoaned the lack of a down payment to begin its delivery. I think that it was my hon. Friend Guy Opperman who invoked the Chinese proverb of Lao Tzu, the founder of Taoism, who said that the longest journey begins with a single step. That single step has now been taken. Many parts of the country can rejoice at that. Of the £350 million targeted at helping the lowest-funded authorities, some £172 million—slightly less than half—is coming to F40 authorities. Cambridgeshire, South Gloucestershire, Northumberland and Shropshire all see gains of more than 6% as a result of the projected allocations and, of 34 current members of F40, 23 are seeing some uplift.
In Worcestershire, the £4.9 million of additional funding that we have so far been allocated—an increase of just 1.7%—has been queried by some as less than our due, but celebrated by most as the first major step forward after decades of underfunding.
May I congratulate my hon. Friend on his significant role in achieving that breakthrough? It is, however, only an initial breakthrough, as he has said. As long as schools such as Prince Henry’s school in Worcestershire face significant real-terms funding cuts, despite those achievements, much more work needs to be done. I offer him every best wish in pursuing this excellent campaign into the future.
I am very grateful to my hon. Friend for that intervention. He has been a long-term champion of fairer funding for schools, and I think that his constituent, Helen Donovan, would be very proud of the work he has done on that front. The Worcestershire Association of School Business Managers and head teachers and governors have expressed their appreciation for the progress made so far, but he is right that there is still much further to go.
Having made the campaign my No. 1 priority as a result of meeting all the primary school heads in Worcester during my time as a candidate—every single one of whom railed at the unfairness of the funding system—I promised them that further progress will and must follow. Some F40 areas have not however been so fortunate, and I want to ensure this debate hears the voices of those such as Warrington, Trafford, Solihull and Nottinghamshire who, despite being F40 members and languishing towards the bottom of the tables for per pupil funding, have yet to see progress.
I congratulate my hon. Friend on securing this debate and on all the work that he has done on this. One authority that he did not mention is York, which is moving towards the bottom of the school funding table. We have made great steps forward, and we must congratulate the Government and the Minister for doing that, but we are still some way off having that level playing field that authorities such as mine strive for.
I thank the hon. Gentleman for mentioning the situation in my local authority, Trafford. He will be aware that Trafford in general is a well-off borough, but it has pockets of very serious deprivation. Does he agree that it is extremely difficult to deal with such deprivation when other neighbouring Manchester boroughs are so much better funded and that that puts our children at a real disadvantage?
The hon. Lady is absolutely right. The evidence that we saw at the recent F40 conference was that, although there is little link between funding and overall attainment, there is a link between funding and raising the attainment of the most deprived cohorts. That is where the F40 campaign has always said that funding does make a difference and fairness in funding is vital to help those people. I completely agree with her, and I will come on to some of the urban areas represented by the F40, such as Trafford and York, that could have done better out of the consultation.
I congratulate my hon. Friend and the Government for the moves that they have made. Will the Minister comment on what we are doing about special educational needs in that regard? Does my hon. Friend support reversing the Government decision whereby schools used to have more say over their budget, which in rural areas really helped those schools most in need?
I hear what my hon. Friend says and I hope that the Minister will answer her point. I agree that giving schools greater say is important and very much in line with some of the Government’s policies.
The East Riding of Yorkshire is by most calculations very low in the table for school funding, yet gets only 0.3% through this allocation, and Staffordshire’s MPs have been among the most consistent in pressing F40’s case.
That is obviously for the Government to explain. I share my hon. Friend’s mystification, though, that a county so close to the bottom of the table has so far received nothing, and I hope that because consultation is continuing that is something that can be changed and that areas such as the East Riding of Yorkshire, Staffordshire and Trafford, which have so far missed out, may still have something to gain from the process. They certainly have something to gain from fairer funding.
In its consultation response, F40 has queried the methodology used by the Government in allocating the £350 million. One substantial difference between its calculations and the Government’s is the unit of funding used. F40 has tended to use the guaranteed unit of funding, whereas the Department used a new measure called the single basic unit of funding. I do not want the debate to be dominated by the technicalities of funding mechanisms. However, I understand that that technicality is part of the reason why the East Riding of Yorkshire may have done less well than Cambridgeshire, despite similarly low funding. Differences in the local approach to the allocation of high-needs funding account for much of the difference in the outcomes. F40 has asked the Government to look at those matters again, to ensure that each poorly funded authority gets a fair chance to secure better funding. I hope that the Minister will be able to look into that.
I want to express support for the hon. Gentleman’s efforts, and I congratulate my hon. Friends on what they have achieved in government; they have done something that two previous Governments failed to do. Does the hon. Gentleman share my anxiety that nothing that happens in the consultation should undo the benefits that a number of authorities have now received—not before time—such as Northumberland’s extra £10.6 million?
Absolutely. I completely agree. After fighting for so long for any improvement at all, it would be tragic if at this stage the benefits that the consultation brings to areas that have suffered for far too long were to unravel. However, there are one or two allocatons in the consultation that F40 would question.
I thank my hon. Friend for his valiant efforts to get fairer funding for schools. I do not want to sound ungrateful for the extra £203 per pupil that Leicestershire gets, but we have jumped in the league table from 151st to 150th and continue to receive almost £1,000 less than schools in the city of Leicester. What does my hon. Friend think about that?
Clearly, there is much further to go in the process of providing fairer funding. What has been done is a down payment—a first step. I am glad that Leicestershire, which has been at the bottom of the table for too long, is getting substantial uplift from the process, but that is by no means the end of the story. I share my hon. Friend’s concern about the need to go further. Indeed, by F40’s own calculations, it seems that Leicestershire, as the least-well-funded authority, deserves at least the 5% uplift that it is receiving. The East Riding of Yorkshire, the third worst funded, deserves more than its 0.3%, and Worcestershire—much as we appreciate our gain—has not done as well as might have been hoped, with an increase of less than 2%. Every other F40 member among the 20 authorities in the lowest position has had at least that uplift, with the exception of Warrington, Staffordshire and Solihull.
Higher up the table, more F40 members have missed out. There are some surprising gainers who, according to F40’s calculations, might not have been expected to gain so much. F40 does not mind—nor do I—that authorities outside its membership benefit by a move towards fairness; we should celebrate the fact that low-funded areas such as Wiltshire, Rutland and Poole have gained substantially from what has been done, despite not being members of the F40 campaign. Cornwall has also gained, although not as much as it might have hoped.
Harder to explain is the fact that some of the better-funded local authorities—high in the table of funding by GUF—are nevertheless receiving substantial uplift. In the words of the secretary of F40:
“We think it is odd that so many LAs in the higher part of the funding league table (too high in the league to be f40 members) are gainers, whilst LAs that are obviously more poorly funded have small gains or are overlooked”.
The gains made by Westminster, which is one of the 10 best-funded authorities in the country, and by Brent, Sutton and Bromley, the three biggest gainers in per pupil terms but all in the top half of the funding table, look much harder to justify from an F40 perspective. In its response to the consultation, F40 argued:
“We do not understand the rationale for adjusting for labour market costs—as they are already fully taken into account in the main funding distribution between local authorities.”
“We can see no case for supplementary funding for area costs. The research work undertaken by f40 has clearly identified that the very large funding differential between London and f40 authorities enables schools in London to employ significantly more staff; it does a great deal more than compensate for additional employment costs.”
It is perhaps the inclusion of such an allowance for costs that has allowed relatively well-funded London boroughs to benefit from the uplift, while urban F40 members such as Warrington, Solihull and Trafford seem to have missed out. I ask the Minister to look at that carefully.
In previous debates, hon. Members from both sides of the House have set out their concerns about the challenges of rural sparsity and delivering education to sparse communities. F40 has always supported the idea of including a sparsity factor in the national formula and welcomed its inclusion for the first time in the new local formulae. However, without national funding in the national funding formula, there has been surprisingly little uplift from sparsity. In its consultation response, the group said:
“We agree that sparsity is potentially a useful means of targeting funding at small rural schools. Many authorities have not introduced a sparsity factor for 2014/15, taking the view that further work is needed on producing a viable model. We would welcome an evaluation by the Department on the approaches local authorities with different characteristics have adopted for 2014/15.”
Although the constituency that I represent is not a sparse one, it appears to suffer from a lack of funding because it is in a larger local authority that suffers significantly from sparsity. I think that the Government have further to go to meet the challenges of rural sparsity and to ensure that rural authorities are properly funded for the future.
Perhaps the most important part of F40’s consultation response is about the challenge that many of the lowest-funded areas still face:
“The Department will be aware that schools are facing major cost increases at a time of ‘flat cash’ funding settlements, particularly: September 2014’s 1% pay increase for teachers (typically, teacher’s salaries account for 65% of school costs)”— in Worcestershire that figure is more like 85%, because of years of underfunding—
“The anticipated increase to non-teaching staff pay—which as yet remains unknown; The increase in the employer’s superannuation contribution from 14.1% to 16.4% from September 2015; The introduction of a flat rate state pension from April 2016, the impact of which will be to increase schools’ costs of in excess of 2% for teaching staff and most ancillary staff; For schools with sixth forms, a continuing reduction in sixth form funding; Energy, fuel and other cost increases”.
“We urge that these cost pressures are fully taken into account in the Spending Review for 2016-17 onwards. Without additional funding a typical secondary school will need to identify compensating savings of around £350,000, the equivalent of ten teachers.”
F40 schools, which have suffered from decades of underfunding, have no spare capacity to make such savings.
In meeting the challenges, we must recognise that March’s funding announcement was not and was never intended to be the end of the shift to fairer funding. As the Minister made clear at the time, it was a one-off measure to help those areas that were hit hardest by unfair funding and a precursor to more substantial reform. Ivan Ould, the chairman of F40, said in his response to the announcement:
“The additional funding is seen as a down-payment, or first step towards a new and fairer allocation system. This marks a huge step forward for our campaign for fair funding. The fact is that pupils and schools in f40 local authority areas have been dis-advantaged by an archaic system for nearly twenty years: they have been the poor relations in terms of the share of education funding.
This is a red letter day for members of f40 who can now look forward to a time when the injustice will end.”
F40 members will scrutinise closely the manifestos of each of the major parties, to see what they will propose with a view to ending the injustice swiftly and surely. F40 has always been a cross-party campaign, and we will look to each of the parties to deliver progress and will judge their manifestos by how clearly and within what time scale they commit to fair and transparent funding. Our funding has been unfair for far too long, and F40 authorities will not have endless patience for interim measures to ensure that better-funded authorities hold on to their advantage if that means holding back long-awaited justice for our constituents. We must have progress and we will scrutinise each statement of every party for what it can deliver.
I was not in the Chamber for the announcement of the £350 million for underfunded areas. Had I been there, I would have welcomed it, but I would have called, as I do now, for further progress. The debate is not a partisan one, but I was mildly disappointed by the Opposition Front Bench response on that day. In response to those who have argued, wrongly, that the first steps that have been taken are in any way partisan or designed to help coalition members, I would point out that many of the Conservative seats that have benefited, including my own, were held by Labour until 2010.
I am delighted that we have a Labour MP in the Chamber, arguing the case for her F40 constituency. I am also delighted that, in proposing the debate, I had the support of the hon. Member for Bolsover, whose constituency stands to gain 34 times as much as the Prime Minister’s. Derek Twigg, who made critical points in the debate, stands to gain more in his constituency than does the Minister for Schools, who made the announcement about fairer funding. If every F40 authority were to benefit from the changes, the winners would also include the shadow Chancellor, the shadow Education Secretary and the shadow Health Secretary, so Labour has a strong interest in supporting proper reforms. We want to see them step up to the plate.
The hon. Gentleman referred to me, so perhaps he will point to any part of my statement in the House at the time that was party political. There were no such remarks.
I would not claim that the hon. Gentleman’s remarks were necessarily party political, but many Members present at the time commented on his attitude to the announcement, which seemed to be negative.
The hon. Gentleman will have the opportunity to respond later.
The F40 campaign has been driven by many hon. Members on both sides of the House, and I am only one of many voices who have been calling for progress. I hope that we will hear those voices following up on that in the debate, but I also hope that we hear from all such Members recognition of the progress that has been made to date. I urge the Minister to listen particularly closely to the concerns of those long-suffering F40 areas that have so far missed out and to ensure that all the lowest-funded authorities get the fairest deal possible from the consultation. I urge her to keep up the pressure for progress towards a fair and transparent system of funding and to commit ever more firmly to real fairness in the years to come.
I congratulate my hon. Friend on securing this important debate. Free schools is one area that is party political. I am sure that we all welcome the excellent progress made by the Government and that the funding formula for free schools has had a stronger impact on the lowest-funded areas than, perhaps, on the wealthier ones. Does he agree that the Government need to address that in F40 areas?
Changes to the system for free schools and to the LACSEG—local authority central spend equivalent grant—a couple of years ago have produced some effects that have tended to hurt the lowest-funded areas more. That is a consequence of unfair funding, rather than of the changes, and the key thing is to get the funding system right, so that we do not have such pernicious effects in future. I thank my hon. Friend for his intervention, because it gives me the opportunity to welcome the Government’s decision to fund the Aspire academy in Worcester, a free school that is taking over pupil referral unit provision in the county, which is badly needed and supported by a wide range of secondary schools in Worcester.
I want our party to set down clearly in its manifesto our commitment not only to a fair, transparent funding formula in years to come, but to its rapid implementation. I am proud that, with the help of so many colleagues, I will be able to face the electorate of Worcester and say that we have won a better deal and that fairer funding is on its way, but the fight is not yet over—it has scarcely begun. We have secured the first down payment on fairer funding. F40 MPs must keep campaigning together to secure the real fairness that our schools, their teachers and, most importantly, their pupils have been denied for too long.
I thank hon. Members for that excellent start. To get all 10 speakers in, there will be a time limit of four and a half minutes each, which should leave the Front Benchers with 10 minutes each at the end of the debate. It will not work, I am afraid, if there are interventions. To assist Members, this nice bell next to me will be rung by the Clerk, which will indicate that there is a minute to go. After four and a half minutes, we will move on to the next speaker.
Thank you, Mr Hollobone. It is a pleasure to serve under your chairmanship and to follow such a powerful, well thought-out speech by my hon. Friend Mr Walker; he has done a sterling job since coming to the House in 2010. The turnout today is a reflection of not only the importance of the issue to our constituents, but the leadership that he has shown. He has shown that again today, with his powerful championing of the case.
The campaign for fairer school funding has been running for at least a decade. For too long, the extra costs faced by rural authorities have not been acknowledged properly by the funding system. A whole generation of school children, in places from Devon to Northumberland, have lost out. Seven years ago this week, I led a Westminster Hall debate on this very subject and it has become no less urgent since. As everyone in the Chamber knows, for many years the school funding system in England has operated on the basis of outdated data and in accordance with political priorities that channelled funding away from rural areas and into urban ones—based on politics, not need. In the
“opaque, overly complex, and, frankly, unfair to pupils, parents and teachers.”—[Hansard, 13 March 2014; Vol. 577, c. 427.]
“the differentials between London and the rest of the country, which are often rooted in historical political decisions, are simply unfair.”
If Fiona Millar can see that, the case for change across the spectrum is overwhelming and needs to be acted on.
One does not need to look far to find glaring examples; the East Riding of Yorkshire is a case in point. It is a beautiful part of the world, but it does not conform to any lazy stereotype of rural affluence. Median gross earnings are below the national average and towns such as Withernsea, Goole and Bridlington have pockets of real deprivation. Mike Furbank, head of children and young people’s services at the East Riding council, has explained:
“As a rural authority we suffer the hidden deprivations of social isolation for children living in remote communities where families have limited access to services and the wider cultural life of the area.
These deprivations are not recognised in any formula and often the ‘goldfish bowl’ view of village life makes poor families unwilling to accept support or declare their eligibility.”
I am grateful. Obviously, I am also grateful for the extra funding for the north-east, but my hon. Friend is right to highlight the deprivation of Goole, in the East Riding part of my constituency. Does he share my shock that local Labour councillors in Goole have attacked me for campaigning on the issue and for pointing out how much less well off Goole was, compared with neighbouring Hull and Doncaster, although we have the same levels of deprivation?
The aim of the Rural Fair Share campaign, which I co-chair and helped to found, is certainly to ensure that fair-minded Labour Members of Parliament see the case as well. We have to ensure that the split is not partisan; we are looking for a system that takes scarce resource and allocates it on the basis of need. At a time of austerity, it is more rather than less important to get those allocations right. Such reallocations may be politically difficult, but because no more money is being thrown at the system every year, the unevenness becomes more apparent as the tide goes down and creates a more difficult challenge.
The East Riding has some good schools, but, regrettably, too many indifferent ones. Last June, Ofsted reported that in the East Riding a child has only a 66% chance of attending a good or better school, compared with 79% in England as a whole. Only 38% of secondary schools in the East Riding are rated good or outstanding, compared with 74% in neighbouring North Yorkshire. If the Minister compares the number of good or outstanding schools in the East Riding with those in neighbouring similar authorities, she will see a stark differential. In the light of those numbers, I ask her to reflect on the methodology that the Government have come up with to allocate that welcome £350 million.
I am aware that, given my position as Chair of the Education Committee, I ought to keep my language moderate, but was the person who devised the system sober? The Government have put things off; the national funding formula will come, but they have decided—politically or otherwise—that, a year before a general election, a fundamental reallocation is perhaps not politically deliverable. The interim £350 million to help the poorest-funded authorities, however, is welcome. But why is the money going to authorities in London that are not among the poorest-funded authorities? My hon. Friend the Member for Worcester touched on that, as did my right hon. Friend Sir Alan Beith. We do not want to see the money stripped away from Northumberland; the Minister must have the courage, despite the publication of the allocations, to look again at the methodology.
The East Riding, because it was historically underfunded and had so many small schools, poured all the money it could into the schools block of funding and so had the lowest high-needs block in the country. The new methodology, however, looks only at the schools block. Under this intervention to help lower-funded authorities, what is the situation of the East Riding of Yorkshire—the third-lowest-funded authority overall when the whole quantum is considered? It is moving from being the third-lowest-funded authority to being the lowest-funded in the entire country. After many years of campaigning, that does not feel like a result. I ask the Minister to look again at how the money is allocated.
“is distributed on a historical basis with no logical reason.”
I think we all agree that the facts speak for themselves and that there is no logical reason for the present funding system. My right hon. Friend went on to say:
“The result is that some schools get much more than others in the same circumstances.”
He further observed that
“That is unfair and we are going to put it right.”—[Hansard, 26 June 2013; Vol. 565, c. 311.]
The question that most of us, and our constituents, want to ask of ministerial colleagues in the Department for Education is: when will it be put right?
This is not a partisan issue. I did not think I would ever agree with a London socialist such as Fiona Millar, but she said:
“But even as one of the beneficiaries of a skewed system, it still seems profoundly wrong to me that every school should be subject to increasingly rigid national accountability measures, yet be expected to deliver the same results when such huge regional funding disparities persist.”
I think we would all agree with that. She also mentioned that the Minister for Schools observed, when announcing the £350 million, that schools with 3% of children on free school meals in Birmingham receive higher funding per pupil than schools in some rural areas with more than 30% of pupils eligible for free school meals. How does one make sense of that?
Even allowing for higher area costs and deprivation in London, the gap between most London boroughs and much of the rest of the country is far too high, reaching £1,000 per pupil in some cases. Quirks in the current funding system result in schools with the same characteristics and miles from one another receiving wildly different sums depending on their local authority.
The £350 million is welcome, but we are discussing a league of pity—where people appear in the league table. The consultation document lists 62 authorities that are in line to receive additional funding under the indicative minimum funding level. Oxfordshire is 59th on the list and receives a lower percentage and cash increase than any other English county. Oxfordshire loves Cambridgeshire dearly, but there seems to be no logic in the fact that Cambridgeshire will receive from the £350 million a boost of around £20 million in 2015-16 when Oxfordshire is set to receive only £500,000 or 0.14% of the total new funding—more than 10 times less than the £5.64 million average increase of the 62 authorities that are benefiting.
Even in the context of the £350 million that has been given additionally to try to mitigate some of the unfairness, Oxfordshire is still being treated extremely badly, and there is absolutely no intellectual or policy justification for that. At a time when schools throughout the country are rightly obliged to set national targets, standards and performance levels, it is grossly unfair that schools in some parts of the country are receiving so much more money than those in other parts. That is unjust and unfair. It must be put right, and quickly.
Sadly, my hon. Friend Richard Graham cannot be here today, but it is two years since in this very Chamber he so eloquently made us all Taoists and began the long journey with a first step. It is as well to remember that the words he used then from Deng Xiaoping—the Minister is a keen student of Chinese maths—were “Yi Bu, Yi Bu”, or “one step at a time”. We are slowly getting there and I pay tribute to all hon. Members, particularly the F40 campaigners, on a fantastic journey.
I can walk over the border from Northumberland, which receives £5,241 per pupil, to Newcastle upon Tyne, which receives £6,052 per pupil—a difference of £809. Teachers in some of my schools in Northumberland, such as East Tynedale, send their own children to schools in Newcastle, which can almost not spend their money, while Northumberland is struggling desperately. The system must change, and I welcome hugely the 6.4% uplift of £10 million.
A point that has not been made today, but needs to be made, is that the consultation expires tomorrow and there are still opportunities for all our teachers—I have written to all of them in every school in my area—to respond to it. If they fail to do so, the Department for Education will not have the benefit of their wisdom and robust comments, which Members of Parliament have received. I thank those who have written to me, including Ponteland middle school and Whitley Chapel first school, making the case, and those who have responded to the consultation.
I want to touch briefly on rural schools. I disagree with my hon. Friend Mr Walker on only one matter: I say “sparsity” and he says “spercity”. That is my only disagreement with his outstanding speech.
The long and short of the matter is that rural schools have been in a singularly difficult situation for many years under successive Governments. In areas with a three-tier system, such as Northumberland, it is particularly complex because the system is focused increasingly on two tiers. I mean no disrespect to the Department for Education, but it seems to struggle and have great difficulty in understanding what three-tier education is and to accommodate it in a funding system and the Government’s approach.
The honest truth is that the head teachers we meet day in, day out, whose schools are in the F40 group, are clearly struggling to provide for their individual schools. On the day when most of us have suffered the delights of the RMT’s approach as a dinosaur trade union opposing all automation, we are dealing with teaching unions that are struggling desperately. We should pay tribute to the individual teachers in the F40 schools who are struggling to provide quality education in extremely difficult circumstances.
The crucial point is that the Government are making a difference to those schools. We must have a continuing campaign. I endorse the point that we must scrutinise all political parties on their approach because the matter will not be solved overnight. The long journey has had many steps, but they are leading in the right direction. I welcome what we have done and I support the campaign.
I congratulate my hon. Friend Mr Walker and all colleagues who have been associated with this campaign for years. I want to focus my comments on schools in rural communities, but on a day when we are mourning the loss of a teacher—the first teacher ever to be killed in a classroom—we must take the opportunity to pause and pay tribute to the pressures under which teachers work, and particularly to the lovely teacher who lost her life. We can never reward teachers or thank them enough for their work.
My hon. Friend the Member for Worcester referred to the cost of staffing as 65% and sometimes 85%. We must not lose sight of the fact that if there were a change of Government and national insurance contributions rose, that would take an enormous chunk out of school budgets. We must be extremely mindful of that.
The Select Committee on Environment, Food and Rural Affairs does not focus only on food, eating, farming and fishing. We recently produced a very wide-ranging report on rural communities. One of its most alarming conclusions was about what my hon. Friends the Members for Hexham (Guy Opperman) and for Beverley and Holderness (Mr Stuart) mentioned: the particular pressures on the budgets of schools in rural areas. There are particular issues about travel to work and school buses. I know that the matter is constantly reviewed in areas such as North Yorkshire. I am grateful for the tribute paid by my hon. Friend the Member for Beverley and Holderness to the outstanding excellence and achievements of North Yorkshire schools. I pay tribute also to the local education authority of North Yorkshire, which is generally there when needed but is recognised to be a very light-touch LEA. It has a good relationship overall with local schools.
However, as I mentioned in an intervention on my hon. Friend the Member for Worcester, we regret the loss of autonomy suffered by individual schools, which previously had the opportunity to have more say over budgets. That is highly regrettable. We called in our report for it to be reversed, and I repeat that call here today.
Let me deal with sparsity funding. Historically, rurality and sparsity have always been recognised by Governments. In particular, the members of the current coalition, the Liberal Democrats and the Conservatives, have historically paid great attention to rurality and sparsity. I urge the Department and the Minister to have a greater focus on that. There was, if I may say so, a very small, pitiful amount of money for sparsity provision. Look at the neighbouring education authority of York. One of the greatest difficulties is that when York went unitary, a big chunk of the education budget went into the York unitary authority and now we are feeling that pinch in North Yorkshire.
I have been able to make only a few remarks, but I believe that the measure we are discussing is a very important step. It would be churlish not to recognise that it will have a significant impact on schools in North Yorkshire.
First, I pay tribute to my hon. Friend Mr Walker for the tremendous work that he has done, because this is a complicated but very important subject. His achievement is the start of a very necessary journey that has still to be completed.
It seems to me that £350 million is an injection of money that is both substantial and much needed. It is a clear admission that the funding system needs to be fixed, because having in place a measure such as this, however temporary, demonstrates that the system is flawed. Today, if we do nothing else, we should acknowledge that point, so that we can move on to devise a system that is workable and fair for rural schools as well as all other pupils who might be suffering in an indirect way.
I would never automatically link the amount of money spent to the services provided, but I will draw hon. Members’ attention to the fact that Ofsted has produced a very important report, “Unseen children: access and achievement 20 years on”, which highlights the failure of many schools in rural and coastal areas. We have to acknowledge that that is just not good enough. We need a system that ensures that all schools, all teachers and all pupils benefit from fair funding. I would say to my hon. Friend Mr Stuart, the Chairman of the Select Committee on Education, that that is a subject for his Committee to consider, because we need to lay the foundations for fundamental reform. I ask my hon. Friend the Minister to talk about just how thorough the Department will be in ensuring that all areas are considered when coming up with a new formula that provides fairness. Of course, there is also the issue of timeliness, because we cannot wait indefinitely. We need a firm commitment that action will be taken on this matter. That has already been recognised to be necessary.
As for my own patch in Gloucestershire, I of course welcome the £9.6 million. That is much needed and will be wisely spent by our schools, because they have consistently suffered, as many of my colleagues have noted about the schools in their constituencies. Ironically, the situation is about the same between Northumberland and Newcastle as it is between Gloucestershire and Bristol. That is just not a reasonable situation for us to have to deal with, so my question to the Minister is basically this: what commitment will she give to ensuring that fundamental reform of the formula funding system will be brought about, and how long will it take? I ask that because the needs of our children and the urgency of our reforms elsewhere in the education system, coupled with our place in the global economy, all add up to this being a major part of the long-term economic plan.
I congratulate my hon. Friend Mr Walker—it was a pleasure to work with him on this issue—and all the F40. My focus has been on schools funding in Cambridgeshire. We get the least per pupil as a basic amount and we have been underfunded for some 30 years. That is a very serious issue, which has affected us very seriously. I first campaigned on it when I was still at school; the campaign was led by the now Baroness Brinton. I have also worked on it as a county councillor and as a Member of Parliament. It has been a long fight by many people. Councillor Peter Downes, when he was head of Hinchingbrooke school, campaigned on the issue. Cambridgeshire Schools Forum, led now by Philip Hodgson, has campaigned on it. Over the decades, it has affected us very heavily, and ultimately that is not for any good reason; poor decisions made by the county council in the 1980s have left us with this situation.
We are so far behind. Cambridgeshire gets £600 per pupil per year less than the English average. That is about £250,000 for a typical primary school. Comparisons have been made with Oxfordshire. Oxfordshire gets more money per pupil now than Cambridgeshire will get with the extra money, so I will accept the praise in the Oxford Mail for my lobbying campaign—I was delighted to see it there—but I do not think that one can feel particularly sorry for Oxfordshire, whose pupils will continue to get more than pupils in my area and others in Cambridgeshire.
We are seeing real problems as a result of the continued underfunding. We are seeing the achievement gap widening, because there are simply not the resources in the schools to be able to do the work that is necessary to close that gap. Fantastic work is done by dedicated teachers. Excellent staff are doing their best, but with such scarce resources, right at the bottom end, it will always be a challenge.
Despite the fact that the issue had been raised for so many years, the previous Government did not do anything to fix it. They did not help the people in Cambridgeshire; they did not ensure that we got the fair amount that we deserve. That is why I was so delighted when, after much lobbying by me as well as many others, my right hon. Friend the Minister for Schools announced that we would get a substantial amount of extra money— £20.5 million in Cambridgeshire. In fact, that is less than half the gap between us and the English average, although of course the English average will go up. It will help; it is incredibly welcome, but it is not all that we need.
We in Cambridgeshire have taken the approach of saying thank you. Just yesterday, I handed in to the Minister for Schools a petition with about 2,000 signatures on postcards, pieces of paper and online to say how much people in Cambridgeshire want to get this extra money. We need it, and we need it soon. The money will go some way towards starting the change that is needed. I agree with all the hon. Members who have said that this can only be the first step on the way to a proper fair funding formula that makes sense, that starts off not based on historical numbers but by working out what is needed for schools and pupils. This is nothing like the end of the road.
Philip Hodgson, the chair of the Cambridgeshire Schools Forum, has said that he is
“pleased the Government has at last recognised the problem but the extra money is needed now.”
Schools in Cambridgeshire and, I am sure, in other areas face problems in this financial year as well. Having to wait until the next year will cause problems for schools that have been pared to the bone for 30 years. We are having to try to cope with decades of underfunding—chronic underfunding—which has hit the infrastructure and everything else in those schools. It makes it harder to adapt. We need some sort of immediate relief. If anything more could be done, that would be great, but most importantly we need to get this money; we need to get it in full; and we need that real and sustainable fairer funding system to last beyond 2016.
There is more to be done as well in terms of capital money and to make sure that places such as Cambridgeshire can continue to build the schools that we need. We are a fast-growing county and we need to have money not only to pay teachers but to build schools. We have problems with sixth-form funding, and I hope that the Minister will have news to share with us on those matters. We would like that assurance, and I would like an absolute assurance from the shadow Minister that if his party were in Government, they would continue to give us the fair funding that we deserve. I say a big “Thank you” to the Government. We need our £20 million, and we will be grateful for it and for anything more that can be done.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am delighted to have the opportunity to speak in this debate, the subject of which will make a considerable difference to the futures of young people in my constituency. I start by paying tribute to my hon. Friend Mr Walkerfor securing the debate but particularly for his tireless work on the subject, not only in our county but nationally. His constituents, like mine, have suffered from unfair funding in education for far too long. It has been a priority for many of us since we were elected to see the mess of education funding sorted out. I am pleased that now we are starting to see real progress on the matter following the previous Government’s failure to act.
My own passion for the subject predates my time as an MP and goes back to my own experiences of education funding when my children were at school, which was many years ago, I have to say. When my family moved to Worcestershire in 2000, I was shocked to find that my children’s education in Redditch did not seem to carry with it the same monetary value as it did in our former home of Wrexham. My awareness of that grew further when I became a governor at Vaynor First school in Redditch and saw that the situation was worse than I had anticipated. As has already been said, Worcestershire is one of the lowest-funded local education authorities in England. It is in the bottom 10. Despite my constituency being just 5 miles outside Birmingham, there is a difference of around £700 between what pupils get towards their education in both areas. I hope that the Minister will be able to address that point and explain to the parents in Redditch why their children are worth less than children 5 miles up the road.
In 2009 Redditch was red flagged for unsatisfactory educational attainment by the Audit Commission, as the borough was falling way behind the rest of the county. However, in the years that have followed, thanks to both the hard work of teachers and the reforms made by this Government, schools in Redditch have gone from strength to strength. Redditch now boasts some of the best-performing schools in the county—a remarkable turnaround for the borough’s schools, where almost 70% of pupils now achieve the five A* to C GCSE standard compared with only 37% in 2007. Imagine what would happen if we got fairer funding in Redditch. This will be the first time in a decade that funding has been allocated to Redditch, Worcestershire and other local areas on the basis of the actual characteristics of pupils and schools, rather than simply on the basis of historical levels of spending. Under the minimum funding levels proposed, young people in Redditch stand to receive a 1.7% or £4.9 million rise in funding per pupil, which will rise from £4,231 to £4,302.
Having studied the figures across the different local authorities, however, I am concerned that Worcestershire is still not getting as good a deal as others, particularly given that some better-funded authorities stand to gain more from the proposals. There is real concern that without more funding they will still continue to meet their responsibilities. I look to the Minister for comment, and hope that after the consultation period some of the figures will be adjusted accordingly. The commitment we have made is an important step forward, and it is worth remembering how far we have come in such a short time.
The campaign has been about securing a fair deal for our constituents and righting an obvious wrong. Of course, money is not all that is required to give our young people a good start in life but it certainly goes a long way towards doing so. Our Government must continue to work to show children and their parents that no matter where they come from or what their background is, we are committed to improving the education they receive.
Although it is not a member of the F40 campaign, I would like to make a plea for fairer funding for Cornwall. Currently the duchy is towards the bottom of the funding table with our dedicated school grant at just over £5,000 per pupil. We are grateful for the small increase we have received.
Cornwall, for many pupils, is a very rural area. The cost of getting to school children who are spread out over a large area is much greater than in a city where many students are likely to be within walking distance and therefore the cost to the local education authority is much less. Often, rural areas have many more excellent small schools but they lose the economies of scale which larger urban schools can gain. Teachers, too, face these additional travel costs. In Cornwall we have relatively high housing costs in relation to wages. I do not have to be told what a beautiful place Cornwall is because I was lucky enough to be born there. However, that drives up housing costs.
Surely, we should see equal spending per pupil regardless of their location. That would provide a level playing field, allowing schools to offer equal pay and conditions, to give us a chance to attract the best teachers. The education of our children is one of the most important aspects of government. Well-educated children tend to work harder and contribute more to our economy. Cornwall is lucky enough to qualify for substantial EU growth funding, as it has been classified as a less-developed region. Surely, one of the best things the Government could do is to improve the education in Cornwall, to give it the very best opportunity for the future and to bring it in line with the rest of Britain.
The F40 campaign believes that an extra funding allowance in the formula should be made to help more rural schools—the sparsity element—and, if it can be done, take account of the size of classes. I echo that call for my home county and Duchy of Cornwall.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Worcester
(Mr Walker) on continuing to lead the campaign and securing today’s debate. He has already made an eloquent contribution, and the point about salary increase and increase in pension contribution, or superannuation, has been well made.
I am here to fly the flag for Suffolk, as many other hon. Members have flown the flag for their own constituencies. I am sure that the Minister will do the same for Norfolk in her contribution. I welcome the extra money that we have received, but I echo and endorse the points made by many hon. Members about the real disparity that continues to be a feature of education funding. I agree with my hon. Friend Neil Carmichael that more money is not necessarily the only way to make improvements in educational attainment, but I am sure that it will help and I hope that the increase of £105, or 2.5%, will go some way to address the situation in Suffolk.
As has been mentioned, Suffolk is a rurally sparse county that struggles with attainment. The county council, working with the Royal Society of Arts and the schools themselves, have embarked on something called “Raising the Bar.” It is a strategy to raise attainment that will take some time, but there will hopefully be some good results quickly en route. We have paired up with Hackney, a great council that has seen significant improvement in educational attainment. I have some sympathy with my head teachers when they point out that we will be moving to funding of £5,251 on average per pupil, but Hackney currently receives £9,268, which is an additional £4,017 or 76% per child. There is a lot more money to provide additional teachers and facilities to tackle some of the issues that Hackney deals with well, including through some of the specialist units that have been developed to help with difficult children. There is a huge difference.
I want to make a point about the pupil premium, of which the coalition is rightly proud. I point out to the Minister and hon. Members present that my part of Suffolk has a low unemployment rate of less than 2%. People who do not have a job are rare—there are about 800 in total—but that does not mean that average or median wages are particularly high. In fact, they are lower than in Liverpool, where I attended school. In Liverpool Wavertree, the median monthly wage is £510; in Suffolk Coastal it is £490; and in Ipswich, it is £460. The pupil premium is adding to a significant funding gap between different parts of the country.
Although the Government have made a welcome commitment to extend free school meals to all children at key stage 1, does the hon. Lady share my concern that, because parents will presumably no longer have to apply for free school meals, it might become more difficult to identify all the students who should attract the pupil premium? That might further exacerbate their position.
Some local authorities already do that. I think it is for the Government and the Department to learn from where it already happens successfully, so I am not going to go down that route. I will explain my point by making another comparison with Hackney. About half of the children there are eligible for the pupil premium, and at £1,300 for a primary pupil and
£935 for a secondary pupil, that is very welcome. However, that is almost double the budget available to head teachers in Suffolk.
The extra funding that has been announced is a welcome step, but it is only a sticking plaster, and we recognise that. It is going to take quite a lot of bravery to get to the point where there is not such a disparity of thousands of pounds per pupil that turns into hundreds of thousands of pounds in our large secondary schools. We must get to grips with that. I encourage my hon. Friend the Member for Worcester to keep the campaign going, and I am sure that all Members will be working on our education Ministers and shadow Ministers in order to ensure that appropriate provision is made in the manifestos for the 2015 election.
I would like to congratulate my hon. Friend Mr Walker on leading the charge on such an important issue.
I have now been an MP for four years, and one of the advantages of that is that I can look back on my old speeches and make them again. It is two years since we were all in this Chamber discussing how we were going to reform the formula inherited from the previous Government. There was no dispute that that formula was wrong and there was no serious attempt to justify it. The Minister for Schools, Mr Laws, has continued with the attitude that the existing formula is wrong and must be changed. The issue has been one of timing and expediency.
When I spoke two years ago, I gave the example of the contrast between funding in Warrington and Westminster, two places that I know—I live in Westminster when I am in London and in Warrington when I am in Cheshire. I made the point that funding was £8,100 per head in Westminster and about £5,000 per head in Warrington. My right hon. Friend Sir Tony Baldry made an excellent speech, but he was wrong to say that there was a differential of £1,000 per head; the differential is £3,000 or even £4,000 per head for some schools.
In my previous speech on this issue, I explained that I did not understand how Westminster, a relatively affluent part of London, could receive such an increased allocation over and above Warrington, which is not particularly affluent, although parts of it are. Teachers at schools such as St Monica’s and Appleton Thorn are dealing with really quite tough budgets and having to make very hard decisions, whereas there is a great deal of evidence to suggest that the extra money received by places such as Westminster resulted in more teachers per head. The differential of more than £3,000 per pupil is enormous when multiplied out and compared with a school with 100 or 200 pupils.
It was agreed that the existing formula had to change, and no serious attempt was made to defend it. We have now received the first response in the form of the initial allocation. I hate to say that my words did not work, but Westminster, which previously received £3,100 more per pupil than Warrington, will receive a further £200 per pupil from the initial allocation. Westminster is 10th out of the 152 local authorities. Warrington, which is 135th out of all local authorities, will receive no extra funding. Perhaps my previous speech was not as effective as it might have been.
I want to echo the words of the F40 campaign in its consultation response. What we have ended up with is neither transparent nor fair. The formula can do lots of things—it takes into account attainment and all sorts of other factors—and I understand that, even allowing for the very low budget in Warrington, attainment there is pretty good, which is testimony to the quality of teaching and the efforts made. However, when we know that the formula must be changed but it is not because to do so would be politically difficult, that is not courageous government.
I have asked why the new Government, who came in bristling with talent, new ideas and determination to get things right, have not been able to put the formula right. It looks like they are not going to be able to do so over the five years of this Parliament. I understand that the formula was inherited from the previous Government, that many of the trade-offs were unacceptable, particularly in the massive haemorrhaging of funding to London, and that that will take a while to unwind. Nevertheless, as my hon. Friend Guy Opperman said, every journey must start with a small step. We have not really taken that step yet.
It is pleasure to follow my hon. Friend David Mowat and to contribute to the debate, which was opened so well by my hon. Friend Mr Walker. He has done a fantastic job of promoting the F40 cause, alongside many colleagues in this place.
When the initial funding announcements were made, I was surprised for two reasons. First, I was pleasantly surprised to see that North Lincolnshire will receive an extra £153 per pupil, despite previously being, I think, the 57th worst-funded authority. We are lucky to have people in our borough such as Tony Norton—who may or may not be present today—who have fought hard for us on the issue locally. I was pleasantly surprised to see that figure of £153, and then thought that, given that North Lincolnshire was receiving that extra amount per head despite being either the 50th or 60th worst-funded authority at that point, there must be good news for the East Riding of Yorkshire as well. That is when the second, less pleasant, surprise occurred: I noted that the figures for the East Riding of Yorkshire showed an increase of just £12 or £13, despite it being the third worst-funded authority.
We are grateful for the increase, and I certainly do not want to see changes to the extra £153 per head that is going to be awarded to North Lincolnshire and for which schools are starting to plan. However, I do want to see changes to the £13 increase for the East Riding of Yorkshire, which, as I said, is the third worst-funded authority. As things stand, we will have two boroughs next to each other, one of which, North Lincolnshire, will receive £5,426 per pupil next year, while the neighbouring borough, the East Riding of Yorkshire, which was the worst funded to being with, will receive less than £5,000 per pupil.
Nearby Hull will receive £5,978 per pupil. I have taught at schools in both Hull and North Lincolnshire, where these is a massive discrepancy. It makes a huge difference in what is provided to schools on the ground. The money is not always well spent—I think my hon. Friend Neil Carmichael said that he does not always associate extra money with improved outcomes, and that is certainly true. Nevertheless, when dealing with rural schools, particularly schools that are perceived to be doing okay but are doing so only because the majority of their cohort are from the sort of background where the kids naturally do quite well, the money does make a difference, because, as colleagues have mentioned, the perception that they are doing okay can mask a failure to deal with some of the more challenging pupils or those who are struggling the most.
That is where money really does make a difference, because it means that extra individuals can provide dedicated support. We had that in Hull, and I do not wish to take a single penny away from the city of Hull, which has great needs. I simply wish to make the case for levelling the playing field a little. We could not offer the same level of intensive support to struggling pupils in schools in the East Riding of Yorkshire, in which I have done quite a bit of work in the past, and especially not in North Lincolnshire. The money just is not there to do that.
I am pleased that the Government have recognised the fact that there is a discrepancy and a problem—that certainly was not the case when the campaign started—and that is a great move forward. However, it is inexplicable to me as a local MP to have to go back to the two local authorities I represent and say to the worst-funded, “You’re getting 13 quid extra,” while saying to the other, which is still badly funded and desperately needs the money, “You’re getting £153 extra.” That does not make sense. It is not fair on the East Riding of Yorkshire, which has some very deprived areas, including Goole, which I represent. My hon. Friend Mr Stuart also mentioned in his excellent speech places such as Withernsea and Bridlington, as well as areas on the edge of Hull. I thank the Government for the changes that have been made, but I think that things can be done in a much better way.
I congratulate Mr Walker on securing this debate and on his speech, in which he outlined many of the problems with the current funding formula system. He was ably supported by many other hon. Members. He pointed out the reasons why the Government should spell out their longer-term intentions in relation to the national funding formula and why, although his hon. Friends might have criticised me for saying so, the Government should not hide the fact that there will be losers in the process or pretend that there will not be, just because we are a year away from a general election. I might have been criticised for saying that, but it is the truth. We must ensure that we are open and transparent about the journey that we are on in relation to a fairer funding formula for our schools.
In a moment. I was just about to mention the hon. Gentleman, so I will do that first before giving way briefly. Other contributors to this debate have included the Chair of the Select Committee, Mr Stuart, who did in his remarks exactly what I did by pointing out that the timing of the announcement could be interpreted in a certain way if one were of a cynical bent, as some of us might be from time to time.
I am grateful to the hon. Gentleman. He will know that in times of austerity, redistribution is harder. He said that we are on a journey. Is his party on that journey? Will he commit today to coming forward during the next Parliament, should his party form a Government, with a national funding formula that bravely reallocates funding and has losers as well as winners, in order better to match need with the funding that goes alongside it?
I can absolutely confirm that we are on that journey. The last Government started the consultation process on that journey towards the end of the last Parliament, as the hon. Member for Worcester mentioned in his opening speech.
We also heard contributions from Sir Tony Baldry, who mentioned Taoism in his remarks, and from Guy Opperman, who mentioned Deng Xiaoping. Perhaps I can also quote Zhou Enlai, who, when asked about the effects of the French revolution, said that it was too early to tell. It is also, perhaps, a little too early to tell exactly what the outcome of the funding formula for schools will be, but we would welcome some transparency about it from the Government.
I associate myself with the remarks of the hon. Member for York Outer—
I beg the hon. Lady’s pardon. The constituencies keep changing all the time. Miss McIntosh paid tribute in her remarks to the teacher Ann Maguire, who was tragically killed yesterday in school. I associate myself with those remarks, and I am sure that everybody in the House would want to do the same.
Contributions were also made by Neil Carmichael and by Dr Huppert, who recognised the long-standing issues and the source of some of the present inequalities in the system, acknowledging that some of the issues in Cambridge go back to decisions taken by the county council in the 1980s. Such historical difficulties are hard to unravel, as Governments of all colours have found. Contributions were also made by the hon. Members for Redditch (Karen Lumley) and for South East Cornwall (Sheryll Murray). David Mowat managed to point out some of the odd outcomes of the Government’s methodology in the current allocation made in the recent statement. We heard a contribution as well from Andrew Percy, who also pointed them out and summed up the difficulty for all Governments when he said that he does not want to take a single penny away from Hull.
Will the Minister acknowledge that introducing a national funding formula will result in losers as well as winners? We must be open and honest about that. What I found frustrating about the statement was that the Schools Minister would not acknowledge that, and that some of the bad news about what will happen elsewhere was being parked down the road rather than openly alluded to now. I make that point now, as I made it at the time. Interventions were made by many hon. Members present, including my hon. Friend Kate Green, who rightly pointed out that her local authority has been subject to issues relating to the national funding formula.
There are undoubtedly wide disparities among different areas. Some of those disparities can be explained by levels of deprivation or by things such as London weighting, but it remains true that pupils in schools with essentially similar characteristics can be funded very differently depending on where in the country they are. It goes back even as far as to when I was teaching, 25 years ago, before the introduction of the dedicated schools grant. Before that, the exact level of funding for schools was determined by local authorities, and the grant from central Government was part of the overall local government settlement. The Government set out an expected level of school funding for each local authority during that time and well into the 2000s, until 2006, when the dedicated schools grant was introduced. However, authorities were free to ignore it, as the money was not ring-fenced. That is exactly what happened in Cambridgeshire, as the hon. Member for Cambridge pointed out.
The result was that most councils spent more than the Government’s expected amount, which was known then as the school formula funding share, but to widely different extents. The exact level of funding was determined as a result of local political priorities, including the level of council tax, and the arcane working of the local government settlement as a whole. The national funding formula grant was introduced in 2006, and those basic levels of funding were taken as the baseline. The grant was increased by a given percentage each year, so the differences basically continued, except that authorities that spent less got an increase to bring them up to that level. Over and above that, there was some relative increase in the funding for areas of deprivation. That leads us to the consultation that took place towards the end of the last Government. The issue is long-standing, and it is rooted in how the funding was calculated formerly. The last Government changed that system. I accept that the disparities remained, which is why we began consulting towards the end of the last Government on a national funding formula approach.
The current Government have committed themselves to the national funding formula, but when they made their announcement back in 2011, they did not analyse the figures fully. It was up to the Institute For Fiscal Studies to do so, and its report showed that the level of disruption caused by the introduction of the Government’s proposals for the national funding formula would be highly unpredictable. The IFS calculated that one in six schools would lose at least 10% of their budgets as a result of the Government’s plans as outlined at that time, that one in 10 would gain at least 10% and that nearly 20% of primary schools and 30% of secondary schools would experience a cash-terms cut in funding if those plans were introduced.
Having realised how complicated and difficult it is to get it right, as we must—I welcome hon. Members’ remarks that we should attempt to do so in a cross-party way—the Government have tinkered with the proposals a bit in the meantime and have put some money towards the problem in the announcement that we are discussing. However, as hon. Members have acknowledged, the Government have not done what they said they would do at the beginning of this Parliament and introduced the national funding formula. They could have done so, but they chose not to. That is the reality. Although they have made a down payment, as hon. Members have described it—another way of putting it is that they have thrown a bit of money at the problem—they have not actually introduced the national funding formula, as they committed themselves to do. I do not criticise them overly for that, as it is a difficult thing to do, and it must be got right. We have seen what the consequences are, as the IFS has pointed out.
On the Government’s proposals themselves, the current proposals assert that no authority will lose money as a result. That may be true purely in cash terms, but it will occur in the context of no increase for inflation throughout this Parliament, and an extra 2.3% increase in employer pension contributions that will not be funded by the Government. The consequence will be a continuing squeeze on school budgets. Will the Minister acknowledge that that is the reality on the ground? For many schools, many of the gains will only offset losses that they suffer elsewhere. Welcome as the proposals are for those schools, the reality is that they will not lead to a real increase in the amount of money available to them, and that other schools’ budgets will be squeezed by increasing pressures. Malcolm Trobe of the Association of School and College Leaders said that the announcement
“is completely overshadowed by the reality that all schools and colleges will have a huge hole in their budgets caused by the pensions contribution rise. This will have a catastrophic effect and lead to larger class sizes and reduced curriculum choice.”
I shall just ask a few questions, because I want the Minister to have time to respond. Will she confirm—it was difficult to get this information out of the Minister for Schools because he would not answer me—exactly where the money is coming from? He said that it was a mixture of Treasury and Department for Education money and, later, following a written parliamentary question, on which I had to press him to get an answer, he mentioned that some £90 million of the £350 million would come from the Treasury, the rest being taken from other parts of the schools budget. Will she confirm that and tell us which programme that money is being taken from? I have the text of that written answer, but not the reference from Hansard.
Will the Minister publish the Government’s modelling of who will be the winners and losers from the national funding formula? If she cannot do so now, will she place that in the Library? Over what period is she planning to introduce the national funding formula, if it is to be introduced, if the Government are re-elected at the next election? Other hon. Members asked about that. Is it possible that after the consultation there will be changes to the allocations announced in the statement and that some authorities will lose money that they were expecting and others will get more than they were expecting? Hon. Members have asked about that, too.
I congratulate my hon. Friend Mr Walker and the F40 group for the amazing progress that has made on this campaign. As hon. Members have said, this long-standing issue is finally starting to be dealt with. It is down to the dedication of all right hon. and hon. Members who have attended this debate and made such eloquent contributions that we are finally making progress on this issue.
Many hon. Members have highlighted the idiosyncrasies and unfairness of the current system. I do not think that there is any disagreement about that. Our spending on education is the fifth highest in the OECD. We have protected the education budget during this Parliament, because we believe that education spending is vital for the future of our children and our nation. Nevertheless, this spending is not fairly distributed at the moment; it is unfair and inefficient. Unfortunately, this unfairness has been baked in over the years, so even when education budgets were rising significantly, it was not dealt with. We are playing catch-up at the moment, as was mentioned by a number of hon. Members, my hon. Friend Karen Lumley in particular.
My hon. Friend the Member for Worcester made the good point that the link between funding and attainment is not always clear, but that there is greater clarity in respect of those from the most deprived backgrounds. Of course, one of our main priorities as a Government is closing the gap between those on the lowest and highest incomes. We have a long tale of under-achievement in this country that has a profound impact on social mobility and our economy, and that is something that we are keen to address.
My hon. Friend Neil Carmichaelreferenced the report, “Unseen Children”, which highlighted the issues for children in rural and coastal areas in general. That is a major problem, and we need to deal with it.
My hon. Friend Miss McIntosh talked about the issues faced in her constituency. I associate myself with her comments about the terrible tragedy of the dedicated teacher, Ann Maguire, in Leeds. I went to school in Leeds. My thoughts are with her friends and her family.
I am pleased that hon. Members have recognised that the Government have provided £350 million of funding. I cannot provide Kevin Brennan with additional information about his parliamentary question, but it is significant that the Government have found this additional money. We recognise that this is a priority. We are vigorously pursuing a route towards a national funding formula, which is the right way forward, and we are pressing that case. This funding represents a step towards it.
The consultation on how the £350 million is allocated closes tomorrow. It is difficult to comment once indicative allocations have been given, but is it a genuine consultation? Will the Minister consider points that have been made and, despite the political difficulties, ensure that that funding is distributed in the fairest way possible?
It is a genuine consultation. We will listen to representations, not just from today’s debate, but from discussions that we have had as a team with the F40 group. It is a difficult process, obviously. A lot of hon. Members mentioned the problems in moving towards a fair national funding formula.
A number of hon. Members mentioned that the longest journey begins with a single step. We have made that step. There are always issues with the way that a formula for minimum funding is decided; all sorts of aspects have to be considered in a formula, including sparsity, rurality, deprivation and attainment. There is no perfect formula. There will always be some local authorities that gain more and some that gain less, and even when we get to the holy grail of the national funding formula, that will be so. There has to be a formula. However, where the Government have had an opportunity to allocate new money, as with the two-year-old offer, we have allocated it completely fairly throughout the country, and done so on a per-child basis with an area cost adjustment. Where this Government have had an opportunity to allocate new money, we have done it fairly.
I am committed, as my colleagues are, to a national funding formula. It is incredibly important for equity, social mobility and for our long-term economic plan, as hon. Members have said.
I recognise the issues raised about the high-needs block and the perceived unfairness of looking at the schools block. There would be issues in looking at the entire block, as well. Because the whole situation is so complicated, with the schools block, the high-needs block and the early years block, we have taken it step by step, starting with the schools block. That matter has come through in the consultation and we will look at that.
I note the specific issues in Staffordshire, the East Riding, Leicestershire and Warrington. I agree with my hon. Friend David Mowat; I have seen excellent attainment in Warrington, at the Evelyn Street primary school, which I visited with him. It is a such an outstanding school that we are using it as a national case study of how to integrate early years into schools. Fantastic work is going on in Warrington, but that does not mean that Warrington should be underfunded.
I have also taken the point about the area cost adjustment, particularly about how that has benefited London authorities in particular. We have to reflect the cost of teacher salaries in different areas, but how that is reflected in the overall allocations will be under consideration in the consultation.
We have recognised sparsity, although a number of my colleagues do not think that we have recognised it enough. But it is recognised in a minimum funding level, with a grant being given per school.
I acknowledge points made about the rising costs faced by schools, whether teacher salaries or pension and energy costs. However, in difficult economic times, we have protected education spending in real terms, because we consider it a priority. The question about what we will do on education spending and the national funding formula is important for our respective parties, going forward into a future Parliament. I cannot fully announce our position on that today; we are still working on the plans.
My hon. Friend Guy Opperman said that he is pleased that we are going in the right direction. It is important to acknowledge that. This has been a long time coming. We have taken steps with the £350 million, although people may not think it has been allocated in an absolutely ideal fashion. There have been detailed discussions about the modelling used for the formula. This is probably a precursor to discussions that will go on about what a fair national funding formula will look like.
I also acknowledge the points made by my hon. Friend Dr Huppert about the positive changes that we have made in Cambridgeshire, particularly with respect to the capital budgets there.
To summarise, we have made the largest step that we can in a single year by securing the additional £350 million funding, without creating major turbulence in the system, which is a danger of moving too fast in funding reform. There is not a perfect formula. The arguments will continue about what factors are most important and what really drives the costs in schools. The Department is working on better analysis of schools’ costs, so that we can ensure that a future national funding formula properly reflects the costs, such as attracting and retaining high-quality staff in rural areas. I commit to listening to representations.