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Session 1999-2000
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Delegated Legislation Committee Debates

Local Government Finance Special Grant Report (No. 66) on Threshold and Leadership Group Payments

Sixth Standing Committee on Delegated Legislation

Thursday 13 July 2000

[Mr. Edward O'Hara in the Chair]

Local Government Finance Special Grant Report (No. 66) on Threshold and Leadership Group Payments

4.30 pm

The Minister for School Standards (Ms Estelle Morris): I beg to move,

    That the Committee has considered the Local Government Finance Special grant report (No. 66) on Threshold and Leadership Group Payments (House of Commons Paper No. 568).

I welcome you to the Chair, Mr. O'Hara. I appreciate the opportunity to talk about the next phase to transform teaching in this country by offering career and pay structures that reward good classroom teaching in a way that the teaching pay structure has never been able to do before. Members of the Committee will be aware that grant 66 arises from the Government's Green Paper, ``Teachers: meeting the challenge of change'', which sets out our major objectives for reforms in the teaching profession. Grant 66 concentrates on how we make available to schools the payment of £2,001, which is the increase in salary that will be paid to those teachers who are crossing the threshold.

The new grant will channel funds to schools via local education authorities in direct proportion to need. It provides that schools will receive the full amounts to which they are entitled without funding being retained by the local authority, except for eligible teachers employed directly by local authorities, who will be entitled to grant support under the same conditions as teachers in schools. There will be no quotas on the payment made under grant 66. The Government will fund every eligible claim at the rates set out in the grant report under discussion today.

Grant 66 is in two parts. There will be a threshold grant that covers the full costs of the increased salaries of teachers entitled to be paid on the new upper pay scale as a result of passing the threshold or through fulfilling other specific conditions. There will also be a leadership group grant, which will support the costs to schools of restructuring their leadership structures and appointing classroom teachers or advanced skills teachers to permanent positions at the new grade of assistant head teacher.

I shall explain how grant 66 will be paid. For the first time, teachers have the prospect of a significant pay progression to recognise the core job of classroom teaching, as long as they meet national quality standards set out by the Secretary of State. Grant 66 fulfils our undertaking to fund fully the increase in teachers' salaries as a result of their passing the threshold. Each teacher moving to the new upper pay range with effect from 1 September 2000 will receive a salary increase of £2,001. The grant will fund that amount in full and the related costs of national insurance and pension contributions at a standard rate of 17.8 per cent. There is no quota on the numbers to be funded in that way; it will depend entirely on the number of teachers who pass the threshold assessment process. Members of the Committee may know that applications are being assessed now.

The threshold element of the grant will fund at the same rate those teachers who have become entitled to be paid on the upper pay scale by virtue of stepping down to classroom teacher status from posts as heads or deputies with effect from 1 September 2000 or who were employed formerly as advanced skills teachers. Local authorities will receive funding from the Department on a monthly basis throughout the grant period. Those payments will be calculated to ensure that authorities have sufficient funds to pay immediately the additional costs of teachers receiving higher pay after passing the threshold. As soon as their success is confirmed, teachers will not have to wait to receive the extra pay to which they are entitled.

Local authorities will receive an initial payment on 15 August 2000. It will be calculated on the basis of threshold applicant numbers; this year there were 197,000 in England. The amount of monthly payments will subsequently be adjusted between November and January 2001 once success rates from the threshold assessment process are known, and once actual teacher numbers have been reported by authorities to the Department in February and April 2001. A similar process will be implemented for the threshold next year.

Local authorities will provide the Department with three dates during the grant period with a consolidated full-time equivalent number of teachers who are entitled to be paid on the upper pay scale. The monthly payments will be adjusted to take account of those data. At the end of the grant period, the Department will make any final adjustments necessary to align the payments made to authorities and the costs that they have incurred. Payments to the schools for the threshold payment will be made monthly in the usual way.

The second element of grant 66, the leadership group grant, is intended to support fully the costs to school budgets of the creation of a broader leadership group. For every full-time equivalent classroom teacher or advanced skills teacher appointed by 31 December 2000 on a permanent basis to a new assistant head teacher post, authorities will receive £2,000, plus 17.8 per cent. for pensions and national insurance contributions, during academic year 2000-01. That must be passed on in full to the schools employing those teachers. The Department will make a single calculation of cost based on the full-time equivalent numbers of such teachers received from local authorities by 31 January 2001.

Mr. Geoffrey Clifton-Brown (Cotswold): I have been studying the statutory instruments, and there are some complicated formulae involving epsilons and all sorts of Greek letters. Perhaps the Minister will give us a full explanation of how the formulae are calculated.

Ms Morris: I shall do my best. I suspect that I shall not be able to give a full explanation, but I shall write to the hon. Gentleman if he is not happy. The reports, which include a key, are clearly set out in detail. I am sure that, having studied them fully before attending the Committee, he will be able to understand the formulae.

The formulae detail different sums of money payable throughout the year. The figures 1, 2, 3, 4, 5 and 6 are the number of months. Given that the payments start during the financial year, we are ensuring that schools are fully funded for every extra penny that they have to pay to teachers who rightly deserve the extra pay. If the hon. Gentleman has any doubt above and beyond that about the strengths of the formulae, or a suspicion that they will not fulfil their function, I would be happy to consider that. The formulae are detailed calculations of how we ensure that, for every teacher who passes the threshold, the sum of £2,001 plus 17.8 per cent. goes to the local authority, and is then paid monthly to schools. They also cover how we ensure that, for every teacher who joins the leadership pay spine, the sum of £2,000 goes to the local authority and then forward to schools.

I hope that the grant reports will find the favour of the Committee.

4.38 pm

Mr. James Clappison (Hertsmere): I join the Minister in saying what a pleasure it is to serve under your chairmanship, Mr. O'Hara, to debate the interesting and—if I may adopt a neutral word at this stage—stimulating grants and the mathematical formulae on which they are based. I am sure that every member of the Committee will do his best to do justice to them.

To be slightly more controversial, we noted the Minister's promise to the teaching profession. Today is the day that the Government unveiled their annual report. I doubt that the Minister will find many teachers dancing with glee at what the Government have done for the teaching profession in their first three years. The Minister has given us a promise, and it is up to us to test what the Government are now promising to do after three years.

The reports should be dealt with separately. They relate to grants being made for four purposes. Special grant report No. 66 contains two of those purposes, both of which relate to the remuneration of teachers, including, as the Minister said, local authority expenditure connected with the introduction of performance-related pay. I turn to that aspect first, as it is an important part of the Government's policy. Although the Opposition subscribe to the general principle of rewarding good teachers, how effective the Government's scheme for performance-related pay will be in practice is another matter and remains to be seen.

Mr. Clifton-Brown: I have studied the document and asked the Minister about the formulae. Perhaps my hon. Friend could explain exactly what the formula on page 7—

—means. Does he believe that most teachers will readily be able to work out exactly what they are entitled to be paid under that formula?

Mr. Clappison: We are told in a famous advertisement that we always remember a good teacher. I remember my maths teacher well. He was one of the best teachers who taught me, although maths was not my best subject, by any means.

Ms Morris: Obviously.

Mr. Clappison: I will accept that from the right hon. Lady.

That teacher made a realistic estimate of my abilities. I took the old GCE O-levels, and CSEs were a separate examination. He entered me for both the GCE and the CSE, as a lower limit for my ability. It was a good prediction, because I was awarded a grade 5 mathematics pass at O-level, when grades 1 to 6 represented a pass, and a grade 1 CSE, which showed that he had a realistic estimate of my abilities. However, it is well beyond my abilities to make sense of the mathematical formulae.

I accept what the Minister said about the intention behind the formulae—to reimburse local authorities for the cost of performance-related pay over a period as the numbers applying for performance-related pay and passing the threshold become known. However, whether the formula will achieve that in practice is a different matter. I made the point about whether the Government will achieve their objectives in practice. We want to know whether the sums add up and whether the Government can demonstrate that to us.

A moment ago, the Minister cited 197,000 as the number of teachers who applied for performance-related pay. I believe that I am right in saying that the number of teachers who were eligible to apply was 265,000. Let us take the figure of 197,000 as a working assumption and feed it into the initial formula in paragraph 4 on page 5. The Minister might like to make a working assumption—I am sure that the Department for Education and Employment has one—about how many of those applicants will pass the threshold, and she might like to feed those two variables into the formulae. She may be able to tell us eventually, when she winds up, the figure that comes out at the other end, after four pages of mathematical formula, at the bottom of paragraph 11. The Minister should be able to demonstrate to the Committee that those figures work, so I would ask that the two variables be fed into the formula so that we can find out how much comes out the other end.

Many teachers have recently been engaged in applying to cross the threshold to receive a £2,000 pay rise. The deadline for teachers to complete and pass their applications on to their head teacher for that performance-related pay was 5 June, but has been extended to 14 July. Many teachers seem to have made their application at a fairly late stage. As events have turned out, many teachers will have made their case and provided the required factual evidence of how their teaching has, in the past, affected their pupils' achievements, at the very time when their existing pupils who are examination candidates are at a critical point in their academic careers and in need of support. That is not a desirable coincidence. It is not the best time to ask teachers to provide the evidence needed for those performance-related pay applications.


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