Local Government Finance (England) Special Grant Report (No. 61)

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Mr. Clappison: I do not accept the hon. Lady's description. Grant-maintained schools are important because tens of thousands of pupils are educated there. Does the hon. Lady accept that if the previous Conservative Government's average spending on education as a proportion of national income had continued, schools would now be very much better off?

Ms Morris: No, I do not. I shall return to the GM figure in a moment.

We said that we would increase the proportion of gross domestic product that is spent on education. We inherited spending at 4.7 per cent. of GDP and it is now almost 4.9 per cent. In the early to mid-1990s, education spending under the Tories hit 5.1 per cent. of GDP for three years in succession. That was because the country was in recession and GDP was falling. I am not interested in that higher figure. It was merely the result of the Tories not being able to look after the economy. If their best defence is to say that they managed to achieve 5.1 per cent. only by running the country down and reducing the money spent on education, it is not good.

The hon. Member for Hertsmere asked about expenditure. From 1991 to 1997–98—that included seven major Budgets—spending on education increased in real terms by an average of £5 per pupil. The three Labour Budgets from 1997–98 to 2001–02 resulted in an increase in spending in real terms of £300 per pupil. I am happy to defend that increase.

The Chairman: Order. I hesitate to intervene, but I have been very indulgent in allowing these interesting and fascinating arguments on the size of the education budget in previous years, but it is hardly relevant—except as a reference to the subject of today's debate.

Ms Morris: I am grateful to you, Mr. Wells, for drawing that to my attention. I am happy to return to the subject of grant-maintained schools.

I shall explain the formula for GM schools. GM schools on transitional funding will receive more money than comparable schools in the same local authority area. That is more a reflection of how local authority schools were funded before the general election than of what has happened since. Transitional funding ensures that the money available to those schools is not cut to the levels allocated to local authority schools; GM schools will be able to make the transition because that funding is protected.

In our first year, the Labour Government protected transitional funding in cash terms per pupil. The Secretary of State announced last June that it would be protected this year at the same level plus an allowance for inflation of 2.5 per cent. I believe that 24,000 schools would have welcomed cash protection per pupil, with increases linked to inflation, in each of the last years of the Tory Government. In addition, those schools will benefit from a £260 million school improvement grant based on pupil numbers. They will benefit also from the increase in capital and the special grant to which the report refers.

The hon. Member for Hertsmere did not ask, so I shall tell him that those figures exclude transitional funding. The grant payable under the special grant report will not affect that transitional funding. Last year, the £35 million that we spent on transitional funding went to about 800 of the 1,000-plus GM schools. I expect that figure to be less this year, because local authority education budgets have increased, but I shall not know until we receive local authorities' budgets. We shall certainly make that money available. In due course, Opposition Members will no doubt ask parliamentary questions about that.

Mr. Clappison: The Minister's constant comparison between the mass of maintained secondary schools and grant-maintained schools betrays a certain amount of socialist thinking. One set of schools is being set against another. [Interruption.]

The Chairman: Order. I must discourage members of the Committee from indulging in arguments that are not germane to the three orders under discussion. I deprecate the direct reference to political parties; it is not appropriate in our proceedings.

Mr. Clappison: Quite properly, that brings me back to my important point about the grant. Schools must bear in mind their current position compared with that in previous years. If they are on a standstill budget, they must make cuts. The Minister said that she will not know the position until the returns come in, but can she give me a provisional figure on which her Department is basing its plan?

Ms Morris: No, I cannot. We must wait for the returns. It is a standstill budget, plus 2.5 per cent. protection for inflation. If we add to that the other grants to which I have referred, such as the school improvement grant and the special grant, many grant-maintained schools will have a 5 per cent. increase this year. I hope that I have responded to most of the queries of members of the Committee. The three grants will put more money into schools.

Mr. Allan: Will the Minister comment briefly on the comparable providers within the sector, so that we can put the grant into perspective?

Ms Morris: Yes. When putting money into some part of the education service, there are always other providers that think that they should be included, too. As one great member of our party said, politics is the language of priorities. We decided to focus on schools. We believe that nursery schools, which are attached to other schools, often in the same buildings, are very much part of the maintained system, and that they would be aggrieved if we did not include them in the budget, as we did with the pupil referral unit and city technology colleges. I cannot defend my position more, except to say that that is our priority for this year. I am sure that the hon. Member for Hertsmere and the Liberal Democrat education spokesman share that priority. We have increased funding across the board, but this grant is for schools.

Mr. Clifton-Brown: The Minister is using this statutory instrument as a method to narrow the disparity between LEAs on their so-called top slicing. Will she give us an idea of the success of such measures? When I last looked at the figures, there was more than 100 per cent. variation between the top and bottom funding from local authorities. Will she say how more aligned local authorities are becoming in their spending?

Ms Morris: When we took office, there was a great difference between the amount of money that was kept back by local authorities and the amount that went to schools. Our first action was to put that spending in the public domain.

Mr. Clifton-Brown: I asked the previous Government specific questions about such matters, so it is not the first time that they have been in the public domain.

Ms Morris: I stand corrected. This is the first time that the Government, without having to be badgered by Back Benchers, have published performance tables showing how much money local authorities delegate to schools. We take such action not under statutory instruments, but by setting targets for increased delegation. We told local authorities that we expect them to reach the target. They want to work with us and increase their targets. We take up a lot of our time working with local authorities to ensure that money goes to schools. We do not simply tell them to increase their targets and then walk away. We make the position clear to parents, teachers and others, who can then make their own decisions about the performance of local authorities. We have not made the proposal part of the standard spending assessment because that would compound the inequalities that currently exist in the system and neither the Secretary of State nor the Chancellor wish that to happen. I commend the report to the Committee.

Question put and agreed to.


    That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 61) on Special Grants for School Standards, Support of School Budgets and Costs of Transitional Funding (HC 399).

Committee rose at eighteen minutes past Five o'clock.

The following Members attended the Committee:
Wells, Mr. Bowen (Chairman)
Allan, Mr.
Betts, Mr.
Clappison, Mr.
Clifton-Brown, Mr.
Darvill, Mr.
Dismore, Mr.
Ennis, Mr.
Henderson, Mr. Ivan
Jackson, Glenda
Jones, Ms Jenny
Morris, Estelle
Quinn, Mr.
Ruffley, Mr.
Ward, Ms

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