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

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Mr. Hayes: On that matter, does my hon. Friend agree that the collection of data by local education authorities on their use of supply teachers varies enormously? There are variations in the collection and collation of information detailing where, how and who was used. There is payroll data, but there are circumstances in which it would be difficult to match that with the new mechanism.

Mr. Clifton-Brown: I agree. Supply teachers usually operate within one LEA, but that is not always the case.

Supply teachers are often parachuted into situations that are already muddled, so it is especially difficult for them to display their true worth. I ask the Minister to address the problem of fitting supply teachers into a national formulaic order.

Finally, I ask the Minister to tell the Committee—I apologise if she dealt with this in her opening remarks—whether she has received representations from the teaching unions about the complexity and mechanics of the November order that we discussed in Committee. What is her view on the court case and will she consider sympathetically further representations from teachers? She must also deal with the mechanism by which any changes would be implemented.

11.12 am

Ms Estelle Morris: The debate has ranged around the report, which is a mechanism to pay money to local authorities, and I shall deal with some of the matters that have been raised.

On the complexity of the formulae and the requirements on schools and LEAs, this is no more than a simple adjustment to teachers' pay. We shall also adjust their pay on 1 April when the increase goes through, but that will not be simple because some teachers will have increments, some will have moved schools and some will have protected posts that will be declining in value. However, the system copes with that. In comparison, this is a straightforward formula that does not contain increments or variations by type of school—every teacher will get the same amount of money added to his or her pay. Local authorities already have a system in place, so this is one more factor for them to take into account when they allocate money to schools.

Hon. Members are rightly concerned that schools are not put to too much administrative effort. However, they have had the chance to see the form that schools must fill in to access the money. It is simply a list of names, which is signed by the assessor, of those teachers who have passed the threshold. Schools are required to do no more than write a list of those teachers who have passed the threshold and send it to their LEA. Local authorities pay most teachers, so the matter will not unduly bother head teachers.

The formula has many vagaries and complexities, but it is a simple method of adjusting teachers' pay. It calculates how many teachers who worked in a given month have passed the threshold, how much money that cost the local authority, how much money the Government have given it, whether we gave it more money than it will need and how much money it should now be allocated.

Although the formula seems complicated, I suspect that governing bodies, heads or local authority leaders would regard it as a piece of cake when compared with the standard spending assessment formula, the local management of schools formula or the standards grant formula.

We have always had to deal with complex formulae, but we are obliged to ensure that those who will not be involved directly with this formula will not be bothered by it. We must guarantee that the money will arrive when it is needed and in a way with which it is easy for them to deal. No one has mentioned the form that schools must complete to access payment and that is because it is simple and straightforward in administrative terms. Governing bodies simply want to know that they will get the money to pay for teachers. That is what this system will do and no one has expressed a worry about that.

On the point raised by the hon. Member for Sheffield, Hallam (Mr. Allan), the report makes it clear that payments cannot be made in respect of anything else, although I should perhaps avoid the technical term ``ring-fenced''. I understand his worry, given that this year one or two local authorities told schools in receipt of the special grant that it would be taken into account by knocking it off the LMS. That was not the intended purpose of the special grant and we have dealt firmly with such local authorities. However, the payments that we are discussing could not be taken into account in that way. Under the old system, it was easy to tot up the figures and say, ``You've had this much, so we will deduct it from the amount that we were going to give you''. In practice, no two schools are likely to get the same amount of money.

It was somewhat Machiavellian of the hon. Gentleman to imagine that in each case the number of payments received through the threshold would be totted up and deducted from the formula. That will not be possible, because the LMS formula does not allow for different treatment based on the number of threshold payments. I am willing to put on the record that the provision will in no way interfere with any other routeing of money to schools. I doubt whether even the most determined local authority would be able to interfere in that way, but the hon. Gentleman was right to raise the matter and I am happy to clarify it.

The hon. Member for South Holland and The Deepings talked about quality control and rewarding performance. I do not like the term ``quality control'', which reminds me of goods rather than people, but to some extent he is right. The provision constitutes a re-evaluation and re-confirmation seven years into a teaching career that the standards achieved during training and the induction year have been built on, and that the expected progress has been made. We should not forget that such a provision used not to exist; indeed, the previous Government abolished the probationary year. In the past, on completion of training and qualifying, teachers were subject to no further assessment, whether in terms of evaluation or performance management.

Teachers are important people and parents need to know that they are performing well and their skills are keeping pace with modern knowledge. To that extent, the grant is confirmation of the skills that they have acquired. It will also give them access to four performance points and in due course we shall announce the way in which that might be funded. Moreover, it gives a clear signal that those who want to climb the career ladder without taking on administrative and bureaucratic roles can progress to the role of advanced skills teacher.

I understand why the hon. Gentleman thinks that the performance threshold constitutes quality control, but it is more ambitious than that. It is the first or second phase in a new career structure involving performance points that could result in promotion to the post of advanced skills teacher. For the first time, teachers who want to stay in the classroom will have the chance to progress and to be recognised and rewarded.

Mr. Clifton-Brown: We all know that, in a few cases, a teacher's performance will deteriorate, particularly as he or she approaches retirement. Will the Minister confirm that it will be possible to take away performance pay without a challenge from the courts?

Ms Morris: We do not envisage that happening. If it gets to the stage that a teacher is performing at such a worrying level, there are mechanisms in schools, through competency proceedings and performance retraining procedures to stop that happening. When teachers have reached a certain level, we do not envisage them dropping below it. We have said that before—it is on record.

That takes us to the core of the difference in performance-related pay schemes. We see from our newspapers that people in the City can take home £150,000 in performance bonuses. We are not in that league. We have a huge pay bill for 450,000 teachers and we never set out to have a pay scheme that would give them a huge increase one year that can be taken away the next if they do not meet their targets. People who access such bonuses are usually on very high basic pay. The structure of the teaching profession and the levels of pay do not allow for such a system. However, I am concerned about performance levels dropping and parents and head teachers want to know that there are mechanisms to stop that happening. We will all have failed if we let that happen and we will have let kids down. The annual performance review will be able to prevent that. If a teacher performs badly, he will not get the performance points that are available above the threshold.

Mr. Hayes: The ``golden hellos'' and the repayment of tuition fees to teachers in shortage subject areas are just that sort of bonus. They are temporary and regarded as big money as a proportion of salary. An expectation has been set in the profession. If one does certain things and is in a certain position, one can receive an exceptional reward. Performance-related pay in many professions—not in the City alone—is about identifying, analysing and rewarding exceptional performance. The Government should be considering that above and beyond the quality control mechanisms. I agree that ``quality control'' is not an ideal term, but it is useful shorthand.

Ms Morris: I do not disagree. Someone at the top of the advanced skills teachers scale can earn more than £40,000. Before the Government introduced that scale, the maximum that teachers could be rewarded for good classroom practice was £24,000. It is not the City league, but there is a sizeable difference between £24,000 and the top of the AST scale of about £42,000.

In trying to reform the teaching profession, we have secured a lot of money from the Treasury. I am greatly pleased to hear the hon. Member for South Holland and The Deepings say that teachers expect that they will be paid more if they are good. That is exactly the cultural change that we have been trying to bring about for the past three years. Attitudes are beginning to change, which will help with recruitment and retention. Reforms are being made on many levels, but not all our money is in the threshold basket. Some of it is going to advanced skills teachers and some towards performance pay. We have always said that most teachers would pass the threshold and that exceptional teachers can get to the top of the AST scale and earn, comparatively, an exceptionally good salary. We have made progress in a relatively short time to achieve that.

The hon. Member for Cotswold (Mr. Clifton-Brown) always disagrees with his colleague who speaks for the Opposition on education and I am on his side in the matter. Teachers need to be reassured that there is a check on favouritism by head teachers. I wonder whether such a measure will be needed once the system is embedded, but it is certainly needed now. If there is complexity in the system, it is through the use of assessors, which slow it down. Assessors evaluate and ensure that a head teacher has applied the standards in a national way. The hon. Gentleman is right that it is no good one head teacher in Gloucester talking to another head teacher in Gloucester. Head teachers should be talking to others in St. Ives and Newcastle. Assessors have been nationally trained to a national set of standards. I invite the hon. Gentleman to try out this suggestion when he next visits a school. When I go to schools, I always ask teachers, ``Have you had the visit from the assessor and how did it go?'' I have been pleased by their responses. They have found the assessments to be professional, demanding and informative. The money that we have invested in training assessors and the administration that we have dedicated to deploying them had eased nerves and soothed fears. The Tories say that we should not have assessors—we should not second-guess heads, but leave it up to them. Such differences of opinion exist between parties, but this is a fairly fundamental matter. I want to record that I am on the side of the hon. Member for Cotswold and that I am grateful for his support. It must be the first time that that has happened.

The issue of supply teachers is difficult, because they work for more than one school. We therefore asked the head of the school at which they spend the most time to assess them. Their part of the £2,300—it was increased from £2,001 through the School Teachers Review Body—will be paid through the pay packet of the school concerned.

I guarantee that LEAs will have enough money and will not go short. They are damn lucky—they have had the money sitting in the bank since September. No one has complained to me about having to use the interest from the money accrued so far. I have received no representations from the National Employers' Organisation for School Teachers, the Local Government Association or individual local authorities, nor do I expect any.

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