Examination of Witness (Questions 140
WEDNESDAY 10 JULY 2002
140. Earlier this week the Chairman of the General
Teaching Council, who claims to speak to you up to five times
a week, was quoted as saying that further education is in a "potentially
catastrophic state. The present situation in FE is completely
unsustainable. It's risible, frankly. Salaries in FE are an embarrassing
joke." Do you intend to use some of that huge underspend
to respond to his criticism of the situation in FE?
(Estelle Morris) Two things. Not the underspend. In
fact, I made clear when I spoke to FE and other post-16 staff
that I would not use the underspend for that. Just on the underspend,
half of it is in ring-fenced budgets. I am not going to repeat
evidence given by my Permanent Secretary, but a lot of it is in
Sure Start, a lot of it is in the Children's Fund that I cannot
switch to my general budget and a lot of it is capital. So it
is not that it will not ever be spent, it is about re-profiling
it. It will be spent in subsequent years. I think I have used
some of it for the behaviour improvement initiative which we launched
in 34 LEAs with the highest truancy and the highest crime rate.
I will correct myself if I am wrong on that. I know I have used
£66 million and I think it was from the underspend, but I
will clarify that.
I will tell you why I do not want to use the underspend, because
it is rather like the school budget: you cannot spend it once
and then not put it into your baseline for the next year. So it
is not the way to do that. I do acknowledge that partly "life
is not fair, is it" but partly as a result of our decision
to put more money into teacher pay we have widened the gap between
FE pay and teacher pay. I cannot defend that except to say that
we live in the real world and when you are trying to change things
as radically as we are you have to do it orderly, but what you
have to be is absolutely clear about what the order is. My predecessor
was never anything but not honest about saying that schools were
a priority and the early years were a priority between 1997 and
2001. I do not make any excuse about FE salaries, I do not like
the nature or the number of people on short-term contracts and
the lack of stability in the FE workforce, and I do find it difficult,
in front of an FE audience, to justify that we have increased
teachers' salaries so much to open the gate. I only wish I got
a bit of recognition from the teachers, but that is life. So you
lose out at both ends. So it is not the ideal situation but you
have to do things in order and as and when you can.
141. Can I just clarify? You did say you were
using part of the underspend for the college pay initiative? How
much will be allocated for that?
(Estelle Morris) For the college pay initiative? I
do not think I am. No, I am not using the underspend for that.
I will send you a note.
I have used some of the underspend into the college of FE. I can
recall, for instance, that I put some of it into e.learning, I
put some in for training for non-teaching staff and we have made
an announcement about the teachers' pay initiative for the non-teaching
staff as well. I would sooner drop you a note about that.
142. As yet there is no specific budget allocation
for improving or reducing the pay gap, the pay differential?
(Estelle Morris) No, that will be subject to the Comprehensive
Spending Review settlement.
143. You understand that the differential, particularly
for 16-19, between college budgets and school budgets has been
significant. Do you think that has increased since the transfer
of funding to the LSCs for 16-19 funding for sixth forms?
(Estelle Morris) It should not have done. There is
a real terms guarantee and the money has been passed back to schools.
I think two-thirds of school sixth forms or providers have done
better out of the new system than worse.
144. So if two-thirds have done better the differential
would have increased.
(Estelle Morris) It was not intended to widen the
gap but what is true
145. Has it happened?
(Estelle Morris) We have done nothing to close the
gap. That also is subject to the spending review. It is a manifesto
commitment of the Government and an over-time move to close the
gap but we have not made progress on that yet.
146. Coming back to the question of targets,
and Meg Munn talked about Sure Start targets, in terms of the
FE targets it is significant that the FE targetsthe proportion
of students with level 2s at 19, and the adult literacy and numeracy
targetsalso have not been achieved. Is there some relationship
between the failure to achieve those targets and this widening
gap between schools funding and FE funding?
(Estelle Morris) I do not think so. Just to put on
record, we put more money into FE than the previous government.
We have not put as much as they wanted and we have not put as
much as we put into schools and early years, but we have reversed
the decline. We have put more money in, both in capital and revenue.
You are right about the level 2 target. We have not met that.
Can I say just a bit about where I think FE is in terms of the
cycle of reform. I look at each of my areas of responsibility
in terms of the cycle of modernisation and reform, and I think
FE was furthest away from that. So much of the early years has
been about reorganising the structure and making sure that we
have got rigorous inspection, making sure that we have got the
intervention strategy to actually deal with under-performing colleges,
and making sure that we have got a rewards and incentive structure
to deal with good colleges. That has taken a lot of the resource,
the effort and the energy in the first five years. We have seen
some improvement. Some colleges have improved and there are improvement
indices there. That is what we have had to do during the first
term. I would be very disappointed if having put that infrastructure
in place we did not see movement towards improvement in output
targets and attainment targets over the second term.
147. Secretary of State, just to tie that one
down, we have got a Green Paper that many of us found very interesting
and stimulating on 14-19, and it is this very area of FE that
we expect great delivery from over the next few years if we are
going to achieve the kind of ambitions that are really described
in that paper. Are you saying that you are in there fighting like
mad to get the allocation that could transform the FE sector?
I am looking at the figures here: yes, schools up from 1996 to
2001, up plus 4 per cent; yes, you are right, adults, is up at
0.2 per cent. So you have reversed the decline but the Green Paper
suggests that this is an area needing massive investment.
(Estelle Morris) I am fighting for all the areas of
my departmental expenditure, as one would expect. I suppose I
am going to be a bit like schools and get more, but never actually
tell anybody I have got as much as I want. I absolutely acknowledge
that if you look at FE it delivers most of our targets. It is
actually a crucial sector for the Government. It attracts those
sectors of the community more often turned off by learning. I
cannot ask it to deliver those targets unless we invest in a better
and targeted way. We will have to wait until after the spending
review, but I will be hugely disappointed if we do not increase
investment in FE over the next five years.
148. At the sort of level which Lord Puttnam
mentioned in his famous article
when he says: "My message to Gordon [Brown] is very simple.
If you believe that incremental improvements in educational expenditure
will deliver you the country that's worth being prime minister
of in five years' time, you are making a horrible mistake. If
you want this nation to have a future in 2030, 2040, you've got
to- in the same way you did in healthdramatically re-evaluate
the level of expenditure required to produce the workforce, the
citizens and the ethos of success that might just carry us through"?
(Estelle Morris) I am always interested
in the views of individuals, and I am always grateful for pressure
put on senior members of Government. I am the Secretary of State
and I have got responsibility for making sure that the money is
spent well as well. One thing on that, because this is important.
I will tell you what the best thing has been about money in education
in the last five years: it has been the stability. It has been
the fact that we have had a stable economy. I worked in education
when we got more money one year and had to cut it back the next
year. That has not happened. I would always, always, always sooner
go for steady growth and stability than massive investment one
year and massive cutbacks the next.
149. Secretary of State, that is exactly the
point, is it not? What Lord Puttnam is flagging up is the fear
that Members of this Committee have, that there is a feeling out
there, perhaps in places like Number Ten, that education had a
good five or six years, now it is health's turn and education
goes on a back burner. Is that the feeling you get?
(Estelle Morris) Absolutely not. I have never, ever,
ever had for one moment that feeling at all. Not just by words
but by actions. Both the Prime Minister and the Chancellor of
the Exchequer have taken every opportunity during recent months
to say that education remains a top priority. I do not think Lord
Puttnam does not think that it remains a top priority. I suspect
that what he is saying is that he would want even more than, probably,
people have asked for. You could spend billions and billions and
billions. I understand that. If you are asking me whether education
remains a priority, of all the things I might worry about in terms
of my doing the job, the fact that it is not a Government priority
is not something that has ever caused me a moment's concern. It
is, and it will continue to be so.
150. I think the department can be congratulated
on one of its documents, and that is the last departmental report,
which I think everyone, when they finally get a copy, will recognise
is laid out in a clearer form than it has been for many years.
So congratulations on that. It does show that it consists of extra
spending and it does show that money going into schools. Having
said that, what was the overall objective which you were hoping
to achieve by this shift of money into schools? Secondly, will
that level in schools continue, because I think one of the uncertainties
in schools is that they can hardly believe their luck and are
always questioning whether it will come for the next few years?
(Estelle Morris) I understand that, which is why some
schools have actually got sizeable underspends themselves and
are holding money in budgets. They are always waiting for the
rainy day because they have been brought up to behave like that.
Most heads will have got used to managing a diminishing budget,
and (I say this in the gentlest of ways) managing an expanding
budget is a different skill, and I do think that is part of the
problem I have got with teacher workload and trying to remodel
the workforce in the schools. I am running 30 pathfinders to try
to find ways forward on that, which you may be interested in.
Schools will not stop being a priority. If you actually look,
we have got to maintain and expand all the time. We had massive
investment to get the literacy and numeracy strategy off the ground,
and we can keep that going because there is a point in the improvement
cycle where you invest more than in other years, and I suspect
that the biggest investment in literacy and numeracy was in its
opening year. If we look at the profile of that expenditure it
will change over time. School is important to us because we know
that it is the gateway to higher education, further education,
jobs, lower criminality, decent health and communities and all
those things we care about. So we are not going to stop investing
in schools. What we do have to do, however, is to not ignore other
sectors as well. We are in a difficult game, really, because every
one of my sectors can make an argument for being incredibly important,
and they have all suffered from decades of under-investment. I
do not want any of them to stop yelling for more money. I am not
going to stop campaigning for more money with the Government,
but I am happy to give that assurance to schools that they are
not about to go off our agenda. Anybody who has been listening
to what I have been saying over the last couple of weeks, I think,
should see that.
151. Can I follow that up by saying that clearly
you will need to justify that extra expenditure. Can you indicate
what evidence is coming forward of the relationship between the
extra money you are putting inwe are putting inand
the performance in the various sectors which you have indicated
alreadynot just academic?
(Estelle Morris) Yes. It is varied. EMAs, for instance,
have brought about evidence of increasing participation. It is
very, very early days yet on attainment levels but there is increasing
participation. Excellence in Cities has brought about evidence
of reductions in exclusions, improvement in attendance and a faster
than national average rate of improvement in GCSEs. There is the
fact that the money put into numeracy is targeted so that the
most under-performing LEAsand those in the most deprived
areasget more money and it is good that Tower Hamlets is
the fastest improving local authority. So, in general, I think
the extra investment has brought about improved results. We are,
quite rightly, as a department always being questioned by the
Treasury, making sure that the money is spent to good effect.
I feel quite stronglyand I do not want to be party political
about thisthat we have got a Government that has probably
invested over a period of time more money in education and is
more determined to make a difference than any other. We cannot
waste it, because the chance might not come round again. I do
not mind that pressure to always equate money to results, and
the evidence is beginning to be there.
152. On the question of funding, whether it
is in schools orparticularly I want to ask aboutFE.
You get the difference, which you have already touched on, between
what the Government say they are putting in overall terms into
a particular area and what the people on the ground feel that
they are getting. One of the charts in your departmental report,
on page 43, for example, talks about FE college funding. One chart
shows total funding and shows that it fell for the first two years
after 1997 but has gone up in the next three years, so that overall
there has been an increase in total funding. However, the first
part of the chart looks at funding per full-time equivalent student
and shows that, in effect, over five years if you average out
in real terms the amount spent per student there has actually
been a fall from the baseline of 1996-97. If the baseline in real
terms was 100, over the next five years the average is 99.4 per
full-time student. So colleges in this instanceand schools
sometimessay that "Yes, you are saying there is an
overall increase in money but what we are getting for core funding
on the ground per student is down."
(Estelle Morris) But the other stuff is real money,
it is not monopoly money, it is exchangeable for goods in the
economy. I think TPI is part of the non-core funding on that.
Let us just take TPI. I am rightly worried about the levels of
FE pay, as Mr Chaytor mentioned. If you are in my position sometimes
you have to use the levers you have got to bring about the change
in behaviour you want to bring about. Sometimes, for a period
of time, using ring-fenced, targeted money, is the only thing
that will bring about a change in behaviour. So we have to move
over time to un-ring-fencing it, because it should always be a
transitional state of affairs, to some extent. At the end of the
day you have to trust that behaviour has changed and that people
on the front line know best how to spend the money. I go back
to the point that, you are right, the table says that, but all
I am saying is that it is not unreasonable to be asked to be judged
on the total amount of money that we put in, not how it was actually
categorised in expenditure terms.
153. So you then move to the areas of ring-fenced
money that schools or colleges have to bid for. They complain
about having to fill in some of these forms and so onthe
time and bureaucracy involvedand the fact that two-thirds
to three-quarters are turned down so they are wasting their time.
If I can give you one specific example from this year, the Learning
and Skills Council now administer the money for colleges, and
one area they have responsibility for is the Standards Fund. The
total Standards Fund budget for the next financial year is bigger
than this year's, but the colleges overwhelmingly are saying that
what they are getting from the LSC is less. So, for example, there
are four collegesthree of which do not want to be named.
One college this year got £208,000 for the Standards Fund,
but for next year the LSC has given it £86,000a 59
per cent cut. Another college got £527,000 this year for
the Standards Fund and next year it is getting £130,000.
Another college got a 75 per cent cut. One college which is willing
to be named, Amersham and Wycombe College in Buckinghamshire,
this year they got £209,000 for the Standards Fund allocation,
but next year the LSC will give them £32,000. Research by
the Association of Colleges across all colleges is showing that,
yes, there are a few who are doing better next year than this
year but overwhelmingly colleges are reporting massive cuts of
50, 60, 70 per cent in what they are getting for the Standards
Fund, yet the overall budget for Standards Fund that the LSCs
have got to spread out is bigger. So the colleges are saying "What
is happening?" There is a feeling that the LSC, for example,
is top-slicing this particular budget at a national level and
then passing it to the 47 regions, and the regions are top-slicing
it so the money is going somewhere elseinto bureaucracy
or whateverbut the colleges on the ground are getting significantly
less for next year than they have got this year.
(Estelle Morris) I must say, without being critical,
I find it impossible to imagine why a college which is complaining
it has had a 59 per cent cut would wish to remain anonymous. I
do not understand that. I think they have an obligation, if their
funding has been cut by that much, to say who they are so that
I can look at it. Without saying who they are I cannot look at
it. It is an absolute nonsense to remain anonymous. Just in terms
of what your proposed explanation might be, I know this is something
you covered, again, last week with the Permanent Secretary, the
admin costs of the LSC are lower than the administration costs
of the organisation that it has replaced. I do not have that fear.
What it might beand I would be very happy, given a bit
more evidence, to look at thatis that sometimes you re-label
money when it comes in through a different route.
I do think we need to rationalise the Standards Fund as much as
we have done in schools, and we need to do that over the next
few years in terms of its complexity and bidding and the different
funding systems. If colleges are actually saying to you "It
comes in in a form that is difficult for us to deal with, or more
complex than we would like" I would probably have a good
deal of sympathy with that.
154. On this question of how much is spent on
bureaucracy and what the LSC inherited from previous bodies, there
are arguments about that. However, one thing that the colleges
are worried about is that under the TECs there is clear evidence
that the TECs diverted money from front-line education programmes
into expanding TEC bureaucracy, which the LSCs are having to try
to deal with, and there is obviously a fear when you see sets
of figures like these that it is part of the same process happening
(Estelle Morris) I think we have told Parliament that
we expect to make a £50 million saving in administration
costs of the LSC, and I note that the accounting officer for the
department has said that that will be delivered. I do not want
to sound complacent, neither do I want to sound as though the
LSC would wilfully keep money back from colleges or providersit
does not do that and it is not in the business to do that. It
is right that both yourselves, as the Select Committee, with those
powers you have, and us, as the department, always keep an eye
on that. It is a very young organisation, it is barely a year
old, it is just settling down and I think it has done quite well
but there will always, always be the need to make sure that bureaucracy
does not grow. Organisations have a capacity to grow their bureaucracy
that defies belief sometimes.
Chairman: We will come back to OFSTED in a minute,
Secretary of State, but we have to move on.
155. Would you agree that one of the greatest
fears that parents have for the future of their children is probably
(Estelle Morris) I think most parents are fearful
about that; I cannot judge whether it is one of their greatest
fears but it is certainly a fear.
156. What is your reaction to our colleague,
Kate Hoey, who says that as a result of the Prime Minister's experiment
on cannabis in Brixton many children are going to school "bombed
out of their heads"?
(Estelle Morris) Miss Hoey, whose constituency that
covers, is entitled to make the observation about her constituency.
I think it would be wrong for anybody to portray the English secondary
education school system as full of children who are going to school,
because of drugs, "bombed out their heads". What is
true, however, is that we have a growing drugs problem within
this country. Children live in the real world, they live in the
community and they are of an age where they often do take drugs,
and I think that we would all agree that, sadly, drug-taking has
increased. When they go into schools they go into schools as the
people they were outside in the outside community. Miss Hoey will
have to account for herself and the Home Secretary will account
for the new drugs policy when he makes the announcement today.
I take seriously any drug-taking in schools or children going
to schools under the influence of drugsof course I dobut
to build up a picture that it is only happening in one LEA because
of the change in drug policy, I think, is scoring political points
and not addressing the real issues.
157. You say that children go to school as they
are outside school, and schools reflect what goes on outside.
Teachers, very often, are fighting a very difficult battle to
prevent the infiltration of some of the external culture into
schools. Is it not really making their jobs much more difficult
by allowing people unmolested to smoke cannabis at the school
(Estelle Morris) I have no evidence that that is the
case. One of the initiatives I announced some weeks ago was an
expansion of the Southwark project of having police based in schools,
where that is the wish of the headteacher. In Kate Hoey's constituency
that is one of the LEAs which is covered by our behaviour initiative,
and that is one of the LEAs that will have funding provided directly
by the Government, directly from my department with the Home Office
providing the police funds as well, to make available police based
in schools, to work with heads, if that is what they wish. I just
think that drugs is such a big issue, it is an issue in Birmingham
and it is an issue in every one of your constituencies. I think
we have to face up to this and talk about it, and talk about education
and prevention. My good colleague, the Home Secretary, is doing
exactly that. I applaud the fact that he is trying new ways to
deal with this problem. Of course he will evaluate ithe
is bound to do thatbut if you are asking me, whether my
department has been over-burdened with extra complaints from schools
in Miss Hoey's constituency that life has been made more difficult,
my understanding is no, that is not the case.
158. Of course it happens in every constituency,
I am not suggesting for a moment it only happens in Miss Hoey's,
but you will have heard, perhaps on the Today programme
this morning, about community workers from the Stockwell Park
estate saying "It is all very well for Prince Harry if he
has a spliff, he can be told what the consequences are" (and
I am paraphrasing). The signals going out from the Government
are that in working class communities, like Brixton, they do not
care as much about the kids in those communities.
(Estelle Morris) I do not think there has been one
message from this Government, across the five or six years we
have been in power, saying that we do not care for children in
areas like that. All the investment in my department is targeted
at areas like that. It is this Government, and my department,
delivering the basic reading and writing for kids in areas like
that. I will tell you what, one of the things that might actually
keep them away from drugs is a decent education, higher expectations,
basic skills when they go to secondary school, good comprehensive
schools in which to be educated and hope for the future. I take
great exception to any allegation that this Government has done
anything other than care for children, whether they are children
in middle-class, rural, urban areas, north, south, east and west.
159. Just a supplementary on that. I understand
there was a survey of all the teachers within the trial area and
my understanding was that none of them reported any concerns.
Perhaps you could look into that and feed that information back
(Estelle Morris) I would be delighted
to do so.
1 Note by witness: The £66 million was
reallocated from the underspend. Back
See page Ev 38. Back
See page Ev 38. Back
The Guardian 9 July 2002. Back
See page Ev 38. Back
Note by witness: No concerns have been received by the
Department from teachers or constituents about the use of drugs
in the trial area. Back