Local Government Finance Report (No. 79) on School Standards, Support of Educational Budgets and Costs of Transitional Funding

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Ms Estelle Morris: I am grateful to the hon. Member for Uxbridge (Mr. Randall). Although he has taken on the role of Opposition spokesperson on this occasion, I know that he has a keen interest in education, having been the recipient of many letters from him about education in his area.

I acknowledge that Hillingdon has tried exceptionally hard to raise standards. I was fortunate enough to be invited to a conference of head teachers some 12 months ago. The matter involves Members of Parliament from different political parties, and on occasion all of them have turned up at my office to argue on behalf of children in Hillingdon. Views might differ, but the motivation exists to raise standards for children in Hillingdon.

I shall answer the specific points made, and then, without, I hope, running the risk of the debate becoming an Adjournment debate on Hillingdon, I shall use Hillingdon to provide examples of some of the dilemmas that we face.

Having asked why the school standards grant is a lump sum, the hon. Member for Uxbridge to some extent gave the answer, and he is right. It would be complex in two ways to allocate grant on the basis of need. First, that would slow down the system. When the special grant was introduced, we wanted to get the money to schools as quickly as we could. The easiest way in which to do that was to have one criterion for the size of schools. The hon. Gentleman may not be aware that the second year round we changed the balance between the amount of money for secondary and primary schools. We have tried to respond to allegations of unfairness.

Secondly, and more importantly, as soon as we adopted a set of criteria that needed differential funding, we would become involved in the sort of debates that we had over standard spending assessments. That point answers the hon. Gentleman's wider concerns about Hillingdon's funding. Some Labour Back-Bench Members present in Committee write to me regularly about unfair SSA funding for their local authorities. If we tried to find one solution for fairly defining and putting a price tag on need, we would be here until kingdom come trying to agree on the criteria.

I have always said that those calculations can be only rough and ready. A secondary school receives £70,000 and a primary school receives £10,500; that may seem an awfully large and unexpected sum of money, but it is a small percentage of the overall money that is invested in education. Let us be clear, however, that the formula that allocates funding to schools on the basis of need is in some ways more rough and ready than the one for the special grant. Neither system is perfect, but the support grant is welcomed. I do not hear many complaints when I visit schools, because they would sooner progress with the minimum of bureaucracy and receive the grant rather than wait for a formula to be devised. That system also costs us less as a Department to allocate. Both local authorities and central government save on central administration.

The point about 0.5 per cent. is a good one, which I did not pick up when I read the grant. The answer to the hon. Gentleman's question is—I suppose that it makes sense—that some schools, especially primary schools, have a 0.5 per cent. of a pupil as they make their return. If we allocated the money according to 0 to 100 and 101 to 200, those with 100.5 on their return would not know to which grouping they belonged. We start with 100.5 because some children attend part time—we are funding nursery schools as well as primary schools. I admit that I struggle to think of occasions when a secondary school would have a part-time student, but I suppose that students might be part time at a pupil referral unit. Funding throughout the system is done according to that 0.5 per cent.; the hon. Gentleman is right to say that for most schools the number would be a whole one, but there are some for which it is 0.5.

I accept that Hillingdon has had a difficult settlement this year. The hon. Member for Uxbridge itemised the reasons for that. The area suffers from some of the pressures that are placed on London schools, as well as pressures in relation to housing costs and the costs of living in and near the capital. Given its location, it has a highly mobile pupil population, including asylum seekers and other people coming into the country for the first time. Therefore, it often feels insufficiently funded. Despite that, the local authority is the 32nd highest funded in the country in terms of SSA per pupil, which comes to £3,104. Per pupil funding is far lower than that for many of the authorities in the areas represented by Conservative Members, by Labour Back-Bench Members and by other members of the Committee who are not present.

The hon. Gentleman brought up a real issue about funding. I am careful that in answering such questions, I express sympathy for the dilemma faced by boroughs such as Hillingdon but make it clear that there is no easy way out of that dilemma. The Government have published a Green Paper in an attempt to find a more effective way to fund children. The SSA for Hillingdon reflects not the current need but an historic need based on the time when the SSA formula was made. I do not have an answer about why some shire counties receive a lower level of funding than neighbouring shire counties that appear to have similar needs. There is a crying need to readjust the formula. Members of the Committee will know that the Department of the Environment, Transport and the Regions is consulting on the formula that may be available by 2003, at the earliest.

Presently, the Department for Education and Employment has set up working groups, one of which contains representatives from schools and different types of authorities. That group is examining the nitty-gritty problem of how we define extra need. Nobody in the House of Commons wants the same funding for every child in the country. We want a good basic level of funding, but that should be differentiated according to many factors. It may be that old factors, such as ethnicity, free school meals, additional living costs—teachers' salaries are similar throughout the country—and sparsity are out of date. We must examine population and socio-economic factors and link them to the achievements of pupils at school. We must become better at identifying the factors that affect a pupil's ability to succeed, and the factors that require extra financial support. I do not think that there would be an argument about whether pupil mobility and asylum seekers who enter a local authority would deserve such support. However, there is less unanimity about whether ethnicity or free school meals should be funded in way that they are. A Member from Cornwall would argue against free school meals being an indicator of poverty, because of specific circumstances in Cornwall.

The matter is difficult, and I cannot predict how Hillingdon will fare from a new SSA formula. To close the circle, I suppose that one of the advantages of the special grant that gives cash straight to schools, regardless of need, is that it is not divided by the SSA formula. I have just admitted that that formula is hardly fair, and hardly reflects a local authority's extra need. If the grant were distributed by the same formula, the authorities that benefit from the formula would do well from the grants, and authorities that did poorly from the existing formula would do poorly from the grants. That would be rough justice, and it is a further reason why we do not distribute the money according to the SSA formula—we do not wish to compound the iniquities of the current formula.

I have tried to answer the hon. Gentleman's questions, and to reassure him about Hillingdon. I have no doubt that the Department will continue to receive representations from Hillingdon and other local authorities. Over the next few years, one of the Government's major tasks will be to ensure that our system of school funding is modernised. There is an irony in that this Government have put more money into education than any previous Government. The current argument is about how we distribute the extra money, not how we cope with cuts. This report supports that and gives more money to schools. I would rather have the argument and complaints about distributing extra money, than the situation under the previous Government, when schools coped with cuts. Due to that, I hope that the three grants will receive the support of the Committee and the House of Commons.

Question put and agreed to.


    That the Committee has considered the draft Local Government Finance Report (No. 79) on School Standards, Support of Educational Budgets and Costs of Transitional Funding.

        Committee rose at seven minutes to Five o'clock.

The following Members attended the Committee:
Benton, Mr. Joe (Chairman)
Betts, Mr.
Campbell, Mr. Ronnie
Caton, Mr. Martin
Coleman, Mr. Iain
Godsiff, Mr.
Morris, Ms Estelle
Quinn, Mr. Lawrie
Randall, Mr.
Squire, Ms Rachel
Wareing, Mr.

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