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

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Mr. Hayes: The right hon. lady is wrong to say that the relationship between value added measure and this instrument is not clear. Teachers, schools and parents will want a marriage of the two, as they will inevitably interact with each other. Is the Minister saying that if the document were made available to local education authorities, governors, or the teachers who are likely to receive the pay, it would be clear and straightforward to them? I defy the right hon. Lady to find a governing body, or a random selection of members of local education authorities who do not regard the issue as highly confusing. I have acknowledged that some of the technicalities are inevitable and implicit in the process, but part of the confusion is because the measures kick in at different levels at different times. That is because of prevarication, delay and incompetent handling.

The reputation of the right hon. Lady would shoot up even higher in this Committee if she acknowledged that this has been an unfortunate matter for the Government. It has been a sad story that is not as clear or straightforward as they would have wished. It has demoralised the profession and affected teachers' expectations of what was once a noble and good idea.

10.57 am

Mr. Richard Allan (Sheffield, Hallam): It is a pleasure to find you in the Chair this morning, Mr. Amess. I have been round the houses on this issue before and it is worth remembering that it is a technical document about refunding local education authorities. I shall confine my remarks to the way in which money goes to the LEAs and on to schools, rather than dealing with the fundamental issue of performance-related pay. Our opposition to PRP is well known and has been well stated. It seems to have a variable within it, in that the last ``P'' has different meanings on different days. I note that the Secretary of State has referred to performance-related promotion, so there seems to be some confusion.

Our view is that it is likely to mean something along the lines of the quality control mechanism to which the hon. Member for South Holland and The Deepings (Mr. Hayes) referred. Teachers in their seventh year who have reached a reasonable standard will get a large increment, unless a clear quality issue is involved. We understand that the success rates will be high, which is a testament to the quality of teaching staff and means that the Government are not doing what people expected them to do, which was to reward specific performance, rather than offering a large increment at a specific point on the pay scale. However, there are questions to be asked.

The point about supply teachers in the report is helpful. Concern was expressed that employing supply teachers who had reached the threshold might be discouraged, so it is helpful that that has been rectified. On the money that will go to schools, paragraph 2 of annex C of the report makes it clear that each local authority must give a statement of information to schools about what they will get via the mechanism.

It would be helpful if the Minister could clarify a couple of matters.

First, will she clarify that there will be no formal passporting with any grants coming from the Department for Education and Employment if there is a dispute between the Department and the LEA over the formula? Will she confirm that the Department for Education and Employment has no authority to require that, but can require only a statement to be shown to the school showing how much money has come via that route? There should be no linkage to any other adjustments to the formula, but schools often believe that to be the case.

Secondly, will the Minister clarify whether the Department for Education and Employment is trying to bring together the various requirements for different grants to be explained to schools? There have been disputes in schools in my constituency—I am sure that the right hon. Lady has had similar disputes referred to her--about whether the LEA formula has been adjusted to take account of direct grant money from the Department for Education and Employment or via other payments. If we are to continue with that system for a couple of years, it would be helpful to have best practice spreads so that schools receive a clear statement of what is coming via each grant route. That is not clear at present and the order is confusing instead of helpful. LEA systems cannot always cope flexibly with the new requirements to produce financial information and I am sure that the Minister has had disputes referred to her, particularly in a partisan context when a school believes that its local council has cheated it with an adjustment to the formula.

Finally, I want to ask the Minister about the 2003 cut-off point. I understand the linkage to the Government's stated intention to revise the formula for schools and the way in which money is disbursed by LEAs and the SSA. Will she confirm that the Government's commitment to funding the threshold payment is absolute and that if a new formula is not in place by 2003, schools may continue to receive recognition? Will she also confirm that any formula adjustment will take account of the matter so that schools with many teachers who have gone through the threshold need not fear the formula review or that they may be worse off than other schools.

The Government have started to move towards direct funding of schools based on large cash sums such as recent grants. If that is taken too far and local circumstances are not considered, direct funding mechanisms for schools may work against the threshold payment because it does not reflect the actual costs of particular schools and areas, which can vary widely if they employ many newly qualified teachers or staff who have been in post a long time. It is important to assure schools with many experienced teachers who have gone through the threshold that they will not be disadvantaged by the formula review after 2003 compared with schools with many less experienced teachers.

11.2 am

Mr. Geoffrey Clifton-Brown (Cotswold): As I said in my intervention on my hon. Friend the Member for South Holland and The Deepings, this is the second time that I have been round this course. With my right hon. Friend the Member for Bromley and Chislehurst, my hon. Friend the Member for Hertsmere, and the hon. Member for Bath for the Liberal Democrats--[Interruption.] The hon. Member for Bath spoke for the Liberal Democrats when we discussed the matter in November or December, or perhaps it was the hon. Member for Harrogate and Knaresborough (Mr. Willis). During our previous discussion, a number of points arose of which the Minister will be aware and I should be grateful if she would deal with them in her summing up.

The first relates to a point that I made to my hon. Friend the Member for South Holland and The Deepings about appeals and reassessment. The Green Paper states:

    ``the head makes a judgement whether the applicant meets the threshold standards; a nationally trained assessor looks at the school's overall operation of performance management and at the individual applications and decides whether or not to conform to the head's judgement''.

Will the Minister explain how that will work and what access teachers who feel aggrieved under the procedure will have to the assessor? Will they have to go through the head teacher or will they be able to go direct to the assessor? I am worried about prejudice. We all know that there will be cases in which a head teacher takes agin a particular teacher, who may feel that he or she has not been treated fairly.

Since our previous discussions about this highly complicated formula, we have ended up with a pretty complicated system. The Minister rather brushed aside my hon. Friend's question about how much the scheme will cost to implement. How many extra staff will LEAs have to employ? How much teacher time will be taken up with trying to calculate payments and how much head teacher time will be taken up with making assessments? We know from our experience of constituency cases that head teachers are already overworked and deluged with a huge amount of paper. Education systems should enable heads and other teachers to spend as much time as possible in the classroom teaching children rather than having to deal with administration. The system will be bureaucratic and time consuming. Will the Minister clarify how much time it will take up and how many extra administrative staff LEAs and schools will need to employ?

Mr. Hayes: Perhaps the Minister can deal with my hon. Friend's point by clarifying the amount of interest that LEAs have accrued through not having to pay out the money when teachers originally expected it. She must have come to a view about the figure involved. What notional view has the Department taken of the likely cost to LEAs? The Minister gave a broad answer, but the Department must have had a model for the likely administrative costs to formulate the measure. Will she give us both those figures so that we can compare them?

Mr. Clifton-Brown: My hon. Friend's comments are helpful.

Can the Minister confirm that LEAs will be fully reimbursed for the cost of making the payments to teachers—not only the actual payments, but the extra administration that will be required?

Will the Minister explain the mechanism by which the scheme will be reviewed as it progresses? A scheme of such complexity is bound to develop glitches as time goes on and I would place a large bet with her that it will have to be amended. Does she plan to introduce a new statutory instrument?

I am concerned about LEAs such as that in Gloucestershire, where I come from. Gloucestershire has a low-funded LEA, which somehow still manages to produce good results across the county. It is therefore likely that its teachers are of a very high standard. Such an LEA—and, through it, head teachers—may apply a higher standard and make it more difficult for teachers in the area to achieve the payments. The only fair way to implement the scheme is to have a national standard with a national assessor who can say to the LEA, and thus to head teachers, ``You are applying too high a standard compared with the national standard: you should lower your sights.'' In that event, we would not want teachers to be discouraged. The Minister must consider such a mechanism, which has both bonuses and minuses.

Supply teachers also concern me. There are permanent supply teachers who work in several different schools. They are often called in at short notice, so it can be difficult for them to enter into the ethos of a school. Of course, they are experienced people who are used to such work, but there can be difficulties. We all know of classes for which supply teachers who have been parachuted in that morning have had suddenly to prepare lessons. How will they be assessed? Will special allowance be made for teaching in several different schools? How will individual reports from each head teacher be collated at the end of the year to ensure that supply teachers are treated fairly?

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