Local Government Finance (England) Special Grant Report (No. 74) on Threshold Payments

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Ms Morris: As far as secondment is concerned, it is essential to make the payment available to whoever is paying the teacher at the end of the month. We do not want money floating around the system. In respect of a teacher who is seconded to the Department for a day to a week, I am not sure whether we pay the local authority the money that is to be paid to the teacher or the teacher receives two pay packets. I suspect that it is the former. The teacher is seconded on the salary that he or she receives, which has been agreed. We would not say to them, ``You're not teaching now, so you can't go through the threshold.''

With regard to teachers who leave their jobs, that is why the payments are monthly. The only thing that will change in between academic years is the number of threshold teachers in the authority. No one else will be assessed, because the assessment will be annual. We will expect the authority to provide returns so that we can make the necessary adjustment.

There are always administrative costs and there is sometimes a danger of assuming that all such expenditure is money wasted; I am as guilty of that as anyone. I remind the hon. Gentleman that the money is being spent to pay teachers more. We are the guardians of taxpayers' money and to ensure a thorough system it is right to spend a certain amount to ensure that administration goes smoothly.

Local authorities have had a sizeable amount of money that they have not paid out—the first instalments, which they received in December, were backdated four months. The hon. Gentleman will know from his party's time in government that it is not easy to get such money in advance from the Treasury to sit in someone else's purse rather than the Government's. We reached an agreement with local authorities, with which they have not argued, that their administration costs would be paid out of the interest that accrued on the money that they received but did not need to pay out.

I hope that the report receives the Committee's support.

10.44 am

Mr. John Hayes (South Holland and The Deepings): The right hon. Lady always brings integrity, straightforwardness and commitment to the Committee, so she must be embarrassed about the saga of performance-related pay, which has been a debacle from beginning to end. If she were entirely objective and non-political about the matter, as the Committee should be, she would have to acknowledge that. This is one of the few opportunities that the House has had to debate an issue that affects hundreds of thousands of public sector employees. The debate on the Floor of the House was curtailed, and important aspects--[Interruption.] I see hon. Members chuntering. The Government could have rescheduled the debate and were invited to do so by both Opposition parties represented in the Committee today--the official Opposition and the Liberal Democrats--but failed to do so. There has not been a full debate about a matter that affects hundreds of thousands of people, as the Minister acknowledged.

The document that stimulated the matter, ``Teachers - Meeting the challenge of change'', was published in December 1998. I welcome and support many aspects of that document, but we have never had the opportunity to explore it, which is why the House is so angry and needs to discuss the order. We want to reward teachers properly and we support the principle of performance-related pay because that is fundamental if we are to recognise the value and importance of good teaching and good teachers. I, for one, want to celebrate the contribution made every day by men and women throughout the country who deliver an excellent education to hundreds of thousands of children.

However, performance-related pay must be just that. First, it must reward performance and value added. Secondly, it must be equitable and be administered fairly and objectively. Thirdly, it must be transparent so that teachers understand why, how and for what they are being paid more. It is nonsense to suggest that it can be transparent when the order is virtually incomprehensible to most Committee members, let alone the teaching profession. There cannot be transparency without comprehensibility.

The complexity of order is due to the delay and prevarication that typifies the Government's approach to the matter. If they had been straightforward and efficient and had implemented the order competently and without delay, we would not now be forced to debate this complex matter long after teachers had expected to receive the additional payment. Of course, technical aspects arise, including: those concerning supply teachers; the way in which the system is administered; and those that I mentioned in my brief intervention about teachers with different status because they work outside school, between schools or support other schools. There are complex technicalities, but the system must be fundamentally transparent so that people can match the value added to the reward that they receive.

I was in business for many years and know that when people are rewarded with bonuses, the incentive must be seen by them to be related to something that they have done, which has been assessed fairly and reasonably and for which they are being rewarded accordingly. That is absent from the order.

Mr. Geoffrey Clifton-Brown (Cotswold): My hon. Friend might not be aware that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), my hon. Friend the Member for Hertsmere (Mr. Clappison), the hon. Member for Bath (Mr. Foster) and I have been round this course before, in that we participated in the Committee that considered the original order in November. It was pointed out in Committee—and, indeed, in the court case involving the National Union of Teachers—that prejudice on the part of an individual head teacher might lead to an incorrect assessment. I have read the report carefully and, although it provides for some form of reassessment, the procedure remains very weak. Does he agree that if one is to have a system, it must be seen to be fair and provide for a proper appeals procedure?

Mr. Hayes: I agree, but if anything my hon. Friend understates the case. He mentioned the court case and he will remember that, in commenting on the Government's handling of this matter, Mr. Justice Jackson said:

    ``The secretary of state cannot insert a controversial term in all teachers' contracts of employment simply by making an announcement in the Department for Education and Employment News, or by printing it in an information note circulated to schools.''

The courts roundly criticised the Government for precisely the sort of failure fully to debate and explain to which I referred. As my hon. Friend said, and as the right hon. Lady pointed out in her opening remarks, there has been some concession in terms of review. Nevertheless, fog, mystery, uncertainty, delay and prevarication surround this matter and have undermined teachers' faith and confidence in the Government's determination to pursue it.

I do not doubt the right hon. Lady's commitment and integrity in this regard, and I know that she wants to reward good teaching and to ensure that teachers stay in the classroom. Too often, teachers are taken away from the business of education, and she is right to celebrate and emphasise the need for contact between teachers and children. However, the way in which this matter has been handled is nothing short of incompetent and, as a result, teachers' faith in the system has been undermined. They no longer believe that this initiative is concerned with rewarding their efforts genuinely and, as it were, disproportionately, given the added value that they offer. Nor do they believe that the proposal is fair and straightforward.

Moreover, given the nature of the report and the order, teachers do not believe that the pay is performance related. As it amounts only to about £2,000 a year and so many teachers will get it, I regard it as quality control pay. There is nothing wrong with such pay, which might be valid and justifiable on those grounds alone. However, the document that was published in December 1998 gave rise to the expectation among teachers, heads, governors and parents that exceptional performance would be rewarded in an exceptional way. That expectation has not been met, and instead we have quality control pay that offers little benefit to really exceptional teachers.

I do not know whether exceptional teachers account for 5 per cent., 10 per cent. or 15 per cent. of the total—the right hon. Lady will doubtless have a view on that—but it is clear that governors, head teachers and teachers themselves know which colleagues are exceptional. I often visit staff rooms and talk to teachers who say that X, Y or Z is an exceptional teacher and the mainstay of the department, and should be recognised accordingly. The value of such teachers should be acknowledged, assessed and rewarded. I do not want to digress—indeed, you would not permit me to do so, Mr. Amess—but that is one reason why measuring added value in terms of the way in which results are monitored is critical. However, when I pointed that out, the Government said that the matter was complex and difficult and that they have had only four years to think about it.

Ms Estelle Morris indicated dissent.

Mr. Hayes: Authoritative academics have studied the relationship between added value and the analysis of results for a decade or more. That relationship has a bearing on performance, and such study should have provided the foundation for the Government to make much quicker progress.

Ms Estelle Morris: I try to resist intervening because it merely prolongs the debate, but I need to put on the record that whatever the Government are doing about value added measurements at key stages 1, 2, 3, 4, or whatever has nothing to do with the threshold assessment. We do not need to have that measure in place to assess whether teachers are good performers, or whether that has an impact on pupil progress. The only criterion in the threshold assessment that refers to the achievement of children is called pupil progress, and we have made it clear that that can be assessed in a number of ways. The previous Government did not tackle the value added aspect. If the hon. Gentleman thinks that it is such a confusing system, he should give at least one example of why he is still confused. I may then be able to assist.

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