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19 Dec 2002 : Column 1109—continued
7.15 pm
The Minister for School Standards (Mr. David Miliband): In the spirit of Christmas cheer, I offer my congratulations to the hon. Member for Mid-Worcestershire (Mr. Luff) on securing this debate at a much more reasonable hour than the Summer Adjournment debate I answered at 1.50 am in July when you, Madam Deputy-Speaker, were in the Chair and looking much more sprightly than I was. Perhaps I may take this opportunity to offer good Christmas and new year cheer to you.
It was generous of the hon. Gentleman to acknowledge the outstanding work done by the Minister of State, Department of Health, my hon. Friend the Member for Redditch (Jacqui Smith) and by my hon. Friend the Member for Worcester (Mr. Foster) and their campaigning zeal, which has helped to deliver a big change in Worcestershire over the past few years.
I want to address the hon. Gentleman's challenge that I explain why the current system is fairer, simpler and more transparent. That is precisely what I will do in the time available. I am sure he will not mind if I take the opportunity to put on record my thanks to and gratitude for the work of teachers in Worcestershire who have been responsible for significant improvements in the quality of education in the county. For example, since
1998 the percentage of young people leaving primary school reading, writing and counting well has risen from 66 per cent. to 75 per cent. in English, from 56 per cent. to 71 per cent. in maths and from 69 per cent. to 86 per cent. in science. At a time when many people are ready to disparage the teaching profession, I am sure the hon. Gentleman will agree with me that that represents outstanding work in primary schools. In the early years of secondary education there is impressive evidence of what is happening in Worcestershire in terms of pupils reaching level 5 at aged 14: results are up from 63 to 69 per cent. in maths, and from 61 to 70 per cent. in science. We all hope that that can be translated through into continuing rises in achievement at GCSE, A-level and in vocational qualifications.The hon. Gentleman robbed me of the chance to rib him by acknowledging that there had been increases in funding in Worcestershire over the past five years. We may disagree about exactly why that has happened and what choices have led to it, but it is worth putting on the record that since the 1998 local government reorganisation Worcestershire's education SSA has increased by over #42 million. That is up 22 per cent. in the space of four years. That formula funding is only part of the picture. The amount that Worcestershire gets through standards fund grants has also increased from #4 million in 1998 to over #20 million this year. The allocation so far for 2003–04 is over #12 million. That can be allied to the increase in school standards grant. I recognise the hon. Gentleman's point about the importance of revenue as well as capital funding. That money, going directly to schools in the same proportion around the country, has more than doubled from #3.7 million in 2000–01 to over #7.7 million this year. It is also worth remarking on the improvements in capital expenditure; in 1998–99 capital expenditure in Worcestershire was about #9.6 million, last year it was #17.7 million and this year it is over #24 million.
The hon. Gentleman was unwise enough to trespass into his own record during the last Conservative Government by claiming that he had pressed hard for improvements in education funding. What did I discover in my detailed researches of 1995, when central Government were cutting by 0.36 per cent in real terms the amount of money going to Worcestershire? Was the hon. Gentleman challenging the Government? I am sorry to disappoint the House, but I am afraid that he was not. He was attacking the county council. He said:
- XLast year the county received one of the largest increases in the country for education"—
- Xand this year has done better than the average . . . if the county council has cash problems they stem from the mismanagement of that cash."
- XWorcester MP Peter Luff is pressing Whitehall to give Hereford-Worcester a fairer share of crucial Government grant aid next year. He claims the county has been getting a raw deal compared with other shires"—
Mr. Miliband: I am grateful to the hon. Gentleman for that, but I think that he has just read out his own
press release, even if the local newspaper faithfully repeated it. I am sure that the fact that the council was controlled by the Liberal Democrats at the time had absolutely nothing to do with the attitude that he took.Let me move on to the aspects of the new system that the hon. Gentleman raises. It is important to restate why we changed the formula. The previous system was out of date and based on even more complicated criteria than those that he criticised in the current system. It did not reflect the division of responsibilities between schools and LEAs, and it was unfair because it was based on a regression of spending patterns from 1991.
The aim in the new system is to ensure that similar pupils in different parts of the country attract the same amount of funding. The system is designed to match the separate responsibilities of schools and LEAs and to be more fairly distributed according to three simple criteria: first, the basic need, to which the hon. Gentleman referred; secondly, the additional educational needs that may relate to poverty or having English as a second language; and, thirdly, the area cost adjustment. It is incumbent on me to address those points.
Of course it is important to say that representatives from Worcestershire and, indeed, parents and governors engaged, with some gusto, in the consultation exercise that we held on the reform of the system. Their representatives played a significant role in the education funding strategy group, which has met many times during the past 18 months. Four of the six local authority members of the group were from the F40 authorities. Of course they were working, as were the Government, on key data that were produced not by us, but independently by PricewaterhouseCoopers.
The hon. Gentleman perfectly reasonably refers to the area cost adjustment, from which Worcestershire, along with 51 other local authorities, does not benefit. The area cost adjustment is designed to recognise that many schools, especially those in London and the south-east, face particular pressures from the extra costs of recruiting and retaining staff. Under the new system, we have recognised that other authorities outside that area face similar problems. That is why the system has been refined to take proper account of local circumstances.
The system recognises that there can be high-cost areas outside the south-east, which is why 99 local authorities now benefit from area adjustment, not 59, as under the previous system. We have been driven by data. I cannot help the fact that the data reveal that Worcestershire is not one of the top 99 high-cost authorities; it is one of the 51 with the lowest costs, based on wage rates, which, we believe, form the right basis on which to calculate local costs.
The allowance is not based on teachers' pay scales—the hon. Gentleman referred to that fact—because they do not reflect differences in the cost of recruiting and retaining staff in different areas of the country. Our system is based on wage differentials in general, which represent a better proxy.
The hon. Gentleman talked about additional educational need. In introducing the new system, we also took account of the additional costs that different pupils face all over the country. The current system, which we are reforming, is based on evidence that is completely out of date and on criteria that are not relevant to different educational circumstances.
I thought that the hon. Gentleman would mention the fact that we have a wider definition of poverty under the new system. The number of children of parents on income support, which has been the basis for the definition of poverty, is now supplemented by the number of children with parents in receipt of the working families tax credit. So we recognise that the children of those in low-paid employment have extra needs. We do not recognise them in the same proportion as those on income support who have extra needs, but there is significant recognition of the working families tax credit in the new system. That is an important step forward in how we understand the nature of deprivation and need.
Sir Michael Spicer: If regression analysis is no longer used, why is the gap between comparable counties and Worcestershire growing at almost exactly the same pace as it was before the Minister's new ideas were introduced?
Mr. Miliband: I am happy to go through each of the counties that the hon. Gentleman believes is comparable, but the reason is that the data show them not to be comparable. He may have his own impression about what constitutes a comparable authority, but the two reasons for differences between the new funding arrangements for LEAs are the number of pupils or their circumstances. The system has been driven by data throughout.
Sir Michael Spicer: It is an extraordinary coincidence that the gap should be growing at exactly the same rate in those counties.
Mr. Miliband: I am happy to respond to the hon. Gentleman about any specific counties that he has in mind, and I shall write to him with full details of the data that have underlined that. The changes have been driven purely by the data that we have received about the different circumstances of children and the number of pupils, which is relevant in the Wiltshire case to which the hon. Gentleman for Mid-Worcestershire referred. I understand that the number of pupils in Wiltshire is growing fast, which is part of the explanation for the different system. I am happy to write to him about that.
I was saying that the new data on working families tax credit are of benefit to Worcester. That is an in-principle change at the foundation of our system, for which many people campaigned hard—[Interruption.] The hon. Member for Bromsgrove (Miss Kirkbride) is complaining from a sedentary position without being entirely clear what she is complaining about. This is good news for Worcestershire because it recognises that, even in areas of high employment, there can still be need. The fact that the system has recognised that should be applauded across the House.
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