School funding - House of Commons - 17 September 2003

Speech delivered on Wed 17th Sep 2003

2.58 pm

Mr. David Rendel (Newbury): This has been an excellent debate, although sadly it has been attended by far too few hon. Members, given the importance of the subject. I would like to start by congratulating my hon. Friend the Member for St. Ives (Andrew George) on raising the subject again. As my hon. Friend the Member for Guildford (Sue Doughty) said, it is of fairly widespread concern across the country. It has affected Members throughout England, and I have no doubt to some extent in Scotland and Wales, although their funding for education is very different. In this country, there has been an enormous problem throughout a large

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part of local education authorities. It is good that we have the chance to debate the subject again, although it has been debated this year on different occasions.

It is interesting how the debate has changed during that time. The Government refused to accept any blame when the problems first became apparent. They were prepared to blame almost everyone except themselves: the LEAs for not passing on the money that they were given, the head teachers for not managing their budgets properly, and the governors for not running the schools efficiently. That was at the start when the Government were perhaps not showing any humility.

Later on, as my hon. Friend the Member for St. Ives pointed out, the good news was that the Government began to accept part of the blame. In July, the Secretary of State admitted that mistakes were made in his Department, and that they had led to a serious shortfall in funding for schools. "Mistakes" barely brings out the extent of what had happened given the catalogue of incompetence and evasion that characterised the Department's handling of the matter. Nevertheless, I honour the Secretary of State for admitting that. It was brave because few Secretaries of State are prepared to accept that there have been problems in their Department's handling of anything. It was a welcome admission from him.

When the Secretary of State made his statement to the House, I was able to catch the Speaker's eye and ask a question. As a member of the Public Accounts Committee, I pointed out that, when permanent secretaries come before the Committee as witnesses and we find out that things have gone wrong, we often ask them whether anyone has been held to account, and whether anyone has lost their job, which they might have done had such mistakes occurred in the private sector. Sadly, it was no great surprise to hear—we have heard it again and again in Committee—that no one had been held to account, and that no one had lost or would lose their job. That is not a party political point; it is a point raised by all members of the Committee, regardless of party.

We treat people very differently in the public sector, and sometimes—this may sound terribly Tory, which is not something that I like to do—there are occasions when the public sector does not hold people to account sufficiently for their failures. It treats people much more leniently than they would be treated if they made the same errors in the private sector, which is a pity.

Mr. Prisk : Without wishing to interrupt the hon. Gentleman while he is being terribly Tory, does he therefore feel that someone should have lost their job over that?

Mr. Rendel : The question that I asked was whether anyone lost their job, and the answer from the Secretary of State was, "No, no one has lost their job." I hope that my question indicated the serious point that so often when such problems arise in the public sector, no one loses their job. It is time that the public sector thought about that. That point is made time and again by Labour, Liberal Democrat and Conservative members of the Public Accounts Committee. There is a clear difference in how public sector workers are treated when they are shown to have failed catastrophically.

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The Government failed to take account of several issues when they set up the funding system for schools this year, which has led to problems. They failed to take account of the extra costs that schools were facing, which have now become clearer with increased national insurance contributions, the costs of teachers pensions and their pay settlement, and the impact of the local government funding arrangement.

The Government failed, importantly, to model how those changes would affect individual schools. My local authority, West Berkshire, sent a delegation to the Department for Education and Skills, where it pointed out that it had fully modelled how the changes would affect its schools. The Department told the delegation that it was the only LEA in the country—let alone the Department itself—to have gone through such an exercise. I found it extraordinary that the Government had not made any attempt to model how those changes would affect schools.

The Government also misled schools about what to expect. Stories said that there would be a growth of about 7 per cent. in funding and that it would be the best sustained rise in education spending for at least a generation. The Chancellor was saying that, and his language was mistakenly repeated by DFES Ministers at the time—the Minister present today has not been in his position for that long, so he can perhaps be absolved of blame for that. However, Ministers throughout the DFES were saying that there would be a huge rise in the grants given to schools, without taking into account that costs would rise by more than that—as much as 10 per cent.

Many schools were left with not only no real-terms increase but a decrease in their funding for the year, with the result that teachers are now being made redundant. As mentioned already, support staff are also being made redundant, with all the difficulties that that entails for the new school system in which support staff are expected to take on more responsibility. Some schools have even been forced to cut aspects of their budget such as capital funding, and we have already alluded to the difficulty that that causes given the underspending on capital funding over many years.

On 29 August, The Times Educational Supplement estimated that 700 teachers had been made redundant and a further 2,700 were not being replaced because of the funding crisis this year. I understand that the net increase in the number of secondary school teachers this year is just 89, while rolls are rising by about 25,000. That is set against the background that the number of fully qualified—I emphasise fully qualified—teachers has fallen since 1977.

I want to raise another point that has so far not been discussed. What has happened to the local authorities that suffered the worst underfunding in the past? The Government's new funding formula for local authorities has led to significant rises in some cases. Those are inevitably for the areas that the Government believe have received less funds than they should have, as that is what the formula means. Having proved that those areas are underfunded, the formula has raised the funds but, unfortunately, in many cases those funds have hit a ceiling.

I understand why the Government have introduced floors and ceilings into the formula. It is important not to allow cash falls and to set a floor to prevent the

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situation becoming impossible for certain local authorities. However, the fact that they have paid for that by introducing a ceiling in other areas means that the local authorities that were underfunded in the past are not receiving as much as the Government's own formula calculates that they should.

Those areas face a particular difficulty. They have been underfunded and so have deficits to make up. There may be a backlog of work in their schools, a lack of library books or funding for special needs, and various other deficiencies resulting from underfunding. Now, although the funds are theoretically supposed to come through, the ceilings mean that they are not doing so.

Andrew George : Does my hon. Friend agree that his statement presupposes that the Government's new funding formula properly reflects the requirements of a local authority area? In my area, for example, secondary school pupils receive about £126 a year less than the average, while primary school pupils receive £220 a year less. Does he agree that, in areas where there are additional costs because of peripherality, rurality and higher transport expenses, the formula may not reflect genuine need across the country?

Mr. Rendel : Of course I accept what my hon. Friend said about the difficulty of getting the formula right. There will always be arguments over exactly what the formula should be, but I was merely making the point that the Government are failing to meet their current funding estimate. I am taking their point of view. I have taken the Tory party's point of view, and there is no reason why I should not take the Labour party's point of view for a while—I like to be even-handed whenever I can.

According to the Government's formula, areas that have been underfunded in the past are being further underfunded in the present, and are therefore unable to make up for the underfunding in the past. I hope that the Government will take that into account. When my authority went to see the Department for Education and Skills, it was told that it could have no more funding for this year, in spite of the fact that the Government's formula says that it should have more funding.

There has been a lack of transparency and openness in how the Government have handled funding for schools this year, which has undoubtedly damaged some schools. Sadly, it has also done little for the reputation of politics and politicians in general. Councils have been left to pick up the pieces. In many cases, they have been forced to increase council tax to make up for this year's lack of Government funding. There is still a mismatch between assessments of local need and the sums that local councils are given to spend. It is the old story of the Government retaining their grip on the purse strings while local councils are asked to accept accountability without responsibility.

3.10 pm