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Mr. John Redwood (Wokingham): My hon. Friend is making an excellent case. Does he agree that the absurdity of rip-off government is shown by the fact that many of the taxes wrongly imposed on the British people have been a boomerang on the public sector and have made it impossible for schools to spend what they want? Schools are not receiving the money that they should because so much is wasted, while money that they do get is used to pay taxes.
Mr. Green: There is a circular flow of money from taxpayers' pockets into the Chancellor's pocket, but it never seems to reach the public services on which the British public want the money to be spent. That is one of the Government's central failures.
Jonathan Shaw: How does the hon. Gentleman envisage the future of local education authorities, and would he abolish them? They have been successful and Kent local education authority, which has secured £60 million of private finance initiative credits, has been especially successful. One of the five schools affected by that is the North school in the hon. Gentleman's constituency. What would be the future of LEAs under the Tories?
Mr. Green: I am happy to join the hon. Gentleman in paying tribute to Kent LEA, which is run by an extremely good and successful Conservative council.
It is worth analysing how on earth the Government found themselves in this predicament. They have introduced more than 60 tax rises since 1997 and they spend more than £50 million every hour. Even in my most oppositional mood, I would not have expected our schools to be plunged into what the head teacher Michael Chapman, who was speaking on behalf of head teachers in east Yorkshire, said was
- "far and away the worst budget settlement I have had to manage as a head teacher".
- "deliver higher standards, better behaviour and more choice".
- "investment will be matched by radical reform".
Mr. Nick Hawkins (Surrey Heath): My hon. Friend is making a powerful case. Does he appreciate the concerns of people in schools such as Collingwood college in my constituency, which was a flagship grant-maintained school under the Conservative Government? Its chairman of governors, with all-party support, is writing to me to protest not only that Surrey local education authority has effectively received almost no funding increase, but that any increase that it passports to schools is more than wiped out by the increased cost of national insurance payments. Collingwood college and other schools in my constituency and south-east constituencies have experienced a net loss. Unless the Secretary of State does something about the situation, redundancies will be made next Wednesday morning. Surely that reinforces the urgency of the matter.
Mr. Green: It does reinforce the urgency of the matter and it is a shame that Labour Members do not seem to take that seriously.
We need to know why the situation occurred. The school funding system has foundered on the three vices that the Labour Government cannot resist: hype, centralisation and a refusal to accept responsibility when things go wrong. The promises of investment and reform have proved to be as empty as they were grandiose. There is no doubt that the Government are taxing and spending more than ever but what they give with one hand, they take away with the other.
The £2.7 billion extra for schools to which the Prime Minister still referred yesterday has proved to be an incredible shrinking pot of money. By last December, it had been scaled down to £1.4 billion. Two months ago, the increase—classed as "missing"—was just over £500 million. According to the Minister for Schools Standards, it then became £250 million. Today's announcement means that we can assume that the Government are finally and belatedly admitting that the trumpeted increase was in fact a cut and that schools are being encouraged to raid other budgets to fund their basic spending.
Mr. Green: I think that the hon. Member for West Bromwich, East (Mr. Watson) wins.
Mr. Tom Watson (West Bromwich, East): I award the hon. Gentleman grade A for effort for sketching out a higher education policy after 604 days in office. Will he use today's debate to sketch out a policy on secondary education? Would he match the Government's investment in secondary education, or will he tell us where he would make cuts?
Mr. Green: I am grateful to the hon. Gentleman for mentioning our policy on higher education, although I was not planning to do that. I am sure that the policy is more popular among Labour Members than the
Government's policy on higher education. I dare say that at some stage we will put that to the test in the House.
Mr. Ivan Henderson: Will the hon. Gentleman give way?
Mr. Green: No, I must make progress.
The Secretary of State then told the Secondary Heads Association that he did not believe that schools had budget problems and that schools' complaints were just "a game". The previous day, he responded to the concerns of the Association of Chief Education Officers by saying:
- "I don't listen to what you say quite frankly."
It is not just that the Government have fundamentally mismanaged the funding crisis. They have wilfully fiddled the local government funding settlement in a way that has made the problem in our schools worse. The Government argue that they provided an above-inflation grant increase for all councils. Such an argument is at best simplistic and at worst simply wrong. Local authorities' costs have risen faster than central Government funding as they have imposed countless new regulations, obligations and red tape. We know, and schools know, that the pay, pensions, national insurance increases and standards fund changes have taken away most of the extra funding for every school and more than the total of the extra money for too many schools.
We need to examine how much central Government actually fund of what they estimate each local authority should be spending. According to research from the House of Commons Library, that ratio fell from 76 per cent. in 1997 to 73 per cent. in 2002–03. In other words, the Government are funding less of local authority spending needs from the centre and the shortfall has to be made up in higher council tax.
There is nothing fair about the local government settlement this year, but even with the gerrymandering that the Government have gone in for they have managed to create acute funding crises even in Labour local authorities. The fact that they have managed to do that owes much to the complexity of the system that they have created and the obvious flaws that have now been revealed. The Minister for School Standards, with whom I have debated the matter in the media over the past few weeks, claims that he understands it—but judging by the crisis that he has presided over, he does not—and that mere mortals cannot understand it. The fact is, however, that it clearly does not work.
There has to be a better way. When local authorities, such as Wandsworth, which has much deprivation but also an excellent Conservative council that works hard to deal with its problems, suffers because it is too successful and has too many pockets of relative affluence, then something is wrong. There are rich people in poor areas and poor people in wealthy areas. The current system, for all its complexity, fails to deal with those problems in any adequate way.
Mr. Ivan Henderson: The hon. Gentleman is right to say that schools have been under enormous pressure in the past few weeks. Will he explain why Tory-led Essex
county council has held on to £21 million in those weeks and told my schools that it has no money to give them? Why has it sat on that money and kept those schools under so much pressure?
Mr. Green: The hon. Gentleman should keep up. His Secretary of State stopped trying to blame local authorities for the crisis a few weeks ago.
The Government's policy is over-hyped and over-centralised. The next phase is to deny responsibility, as the hon. Gentleman just sought to do, but that will not wash because the current situation is the result of a breakdown in communication from the centre. The Government and Labour Members know that scores of schools around the country report that they are going into budget deficit. A good example of that is the Fairway middle school in Norwich, where the chair of governors, Alison Black, made it clear in a letter to the Secretary of State—her Member of Parliament—that her school was facing the distinct possibility of having to make all seven of the school's teaching assistants redundant. It is surely a strange situation when only months after the Department announced that it saw a greater role for teaching assistants, they are under the threat of redundancy.
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