Local Government Finance (England) Special Grant Report (No. 96)

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Mr. Todd: Will the Minister explain why such a complex methodology was adopted in preference to simply paying the LEAs pound for pound what is now being awarded to the LSCs for the sixth form provision in their area? I take his point that schools overall in my county have not lost out through the process, but the under-16 provision of schools with a sixth form has been affected by the reduction made to reflect the additional money allocated to post-16.

Mr. Timms: I may misunderstand my hon. Friend's point, but I think that what he suggests is what we have done. Pound for pound, where money has been changed it has been replaced. That means that there has been a shift from pre-sixth form to sixth form provision. If he is suggesting that, because there has been a shift in funding, we should ensure that all the funding that has been changed should be added, I do not agree with him. It is inevitable that there will be some change when one moves to a national system using the LSC. It would not be sensible to introduce a

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special grant to address that change, pound for pound, for all pre-16 provision. However, we have attempted to mitigate the most significant problems in LEAs. Of course, we have been constrained by public spending limits, but I believe that we have got the balance about right.

Mr. Stephen O'Brien (Eddisbury): I speak as a Member of Parliament representing a Cheshire constituency that has experienced severe difficulties in contending with the formulaic approach that has disadvantaged the area relative to others.

At the risk of creating an unholy alliance with the hon. Member for South Derbyshire—he, the Minister and I were all educated at the same time, and I can certainly vouch for the Minister's mathematical skills—I wonder whether the Minister, given the complexities with which we must wrestle, would produce a guide on the subject in plain English. That would be crucial not only for those of us who must determine and scrutinise the policy as it goes through Parliament, but for those affected by it. Due to the issues raised, it would help if such a guide were placed in the Library as soon as possible. Is he willing to undertake the task?

Mr. Timms: I cannot promise a guide on the subject in plain English. Part II of annex A is quite clear. Although it is rather lengthy, it is not obscure. Most people are concerned only with how much money they will receive, which is straightforward and easy to convey in plain English.

Mr. O'Brien: And with not falling off the cliff.

Mr. Timms: I can confirm that the hon. Gentleman's LEA receives £387,000 under the grant, which will help it to resolve its difficulties. My position would be a good deal more comfortable had I been able to say the same to my hon. Friend the Member for South Derbyshire, but sadly that was not the case. The aim of the grant is to benefit those who are proportionately most affected.

I thank the hon. Member for Harrogate and Knaresborough for his comments. His LEA received more than £1 million under the grant, and I am grateful for the welcome he gave it. He raised some interesting concerns, especially when he drew attention to balances in schools, which appear to have risen sharply in the past financial year. In correspondence, Ministers have acknowledged that we want to consider whether Government action is required in response to that. Large balances are still rare. They are usually held for capital projects, and we want schools to be able to do that. Nevertheless, we must keep an eye on them.

The hon. Gentleman is right about our commitment to levelling funding upwards to further education, and he drew attention to our exchanges about that in the Chamber last week. He asked whether the audit would require that the funding be spent only on post-16 provision. The answer is no—I think—because we want to provide help to LEAs where the transfer from pre-16 education is greater than they can comfortably deal with. The funding will support pre-16 education as well, so there is no requirement that it be spent only on sixth forms.

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We have said that the real-terms guarantee will continue to apply throughout the Parliament. I hope that that helps assure the hon. Gentleman that it is not such a short-term guarantee as he had envisaged. We do not see the Learning and Skills Council taking over responsibility for 14 to 16-year-olds, but he is right in that it will have a role in planning provision for them, in collaboration with LEAs, and will consider area-wide provision. That is an extension of its role, but we think that it is important that that be in collaboration with LEAs, which will retain their current responsibilities.

Finally, the hon. Gentleman asked about changes during the year. If an expansion occurs in pupil numbers, it will be possible to fund from reductions elsewhere. If a reduction occurs during the year, the grant will be able to address that. I made that category 3 point earlier. Extra support may be necessary or unnecessary, depending on the circumstances.

Mr. Brady: The one point of procedural detail that I raised related to future grants to the same ends. Does the Minister anticipate that future provision will be made under the powers contained in clause 13 of the Education Bill, or will the Government continue to have recourse to the Local Government Finance Act 1998?

Mr. Timms: The hon. Gentleman has stumped me, but I shall answer him as best as I can. Next year, we shall continue to use the powers that we have used this year. Beyond that, we shall have the new funding arrangements. New powers might be needed then, but the position will be reviewed when the new system is introduced.

Mr. O'Brien: Further to my point about the possibility of issuing a plain English document for clarification, I note that there is an invitation from the

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Minister and his colleague, the Minister for Local Government and the Regions, to attend a seminar on 23 May for those on the so-called f40 group. If that is to be an effective meeting, it could provide a useful deadline for making available a summary a little less formulaic than the one in the report.

Mr. Timms: I look forward to that meeting. I recently had a good discussion with representatives of the f40 campaign. The agenda for the meeting to which the hon. Gentleman refers will be the system for next year rather than the current year, so it would be unhelpful to table new material covering this year's arrangements. I expect a lively meeting about arrangements for next year.

Let me express a cautionary note. Most local education authorities seem to believe that the new formula will be better for them than the present one. Sadly, that cannot be the case.

Mr. O'Brien: All winners and no losers?

Mr. Timms: Indeed, that is why I sound a note of caution.

The f40 group discussion will be useful, however. As the hon. Gentleman will know, we have received large numbers of representations from f40 authorities covering areas represented by hon. Members from both sides of the Committee.

Question put and agreed to.


    That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 96) (HC 710) on Special Grants for School Standards and Support of Post-Sixteen Budgets.

Committee rose at twenty-two minutes to Six o'clock.

The following Members attended the Committee:
Roe, Mrs. Marion (Chairman)
Brady, Mr.
Coaker, Vernon
Gibb, Mr.
Heppell, Mr.
Lewis, Mr. Terry
Murphy, Mr. Denis
O'Brien, Mr. Stephen
Owen, Albert
Rendel, Mr.
Shaw, Jonathan
Spink, Bob
Timms, Mr.
Todd, Mr.
Wareing, Mr.
Willis, Mr.

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