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The Minister for School Standards (Mr. David Miliband): Will the right hon. Gentleman comment on the remarks of his hon. Friend the Member for Altrincham and Sale, West (Mr. Brady)? In a Westminster Hall debate, the hon. Gentleman said:
- "By adopting a national funding formula . . . we will create a system of school funding that is straightforward . . . and above all puts real control into the hands of . . . governors."—[Official Report, Westminster Hall, 29 April 2003; Vol. 404, c. 19WH.]
That is dangerous, especially if other Ministers get in on the act. The Secretary of State for Health has been remarkably well behaved, but social services are massively underfunded at local authority level and that has a spin-off effect for schools—for example, in relation to adoption problems. We all know about the increasing pressure on local authorities to look after vulnerable children. That has an impact on education.
Unless we have a more sensible form of joined-up government that recognises the links between all those activities, we shall not end up with a sensible formula. The two puppeteers will become three; they will blunder about like drunks circling the same lamp post. There will be a great deal of noise, a great deal of illness and no light whatever will be cast.
The Government created the crisis. They have tried to bluster their way out, but they should look hard at functions within government and make sure that their systems are compatible, the mechanisms flow properly and the lubricant is in place. Responsibility can then be attributed to the people who ought to hold it. To attribute responsibility while in fact denying it is a dishonest form of government. I do not think that either the Minister or the Secretary of State wants that, but the current system condemns them to play that charade, and schools the length and breadth of the country are suffering as a result.
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Mr. David Chaytor (Bury, North): I welcome the debate. The Secretary of State was right to say that he also welcomed it, because this is a serious and complex issue and it is absolutely right that the House gives it its attention.
I am not sure that the official Opposition gave due seriousness to the issue when they opened the debate. The combination of synthetic hysteria and mind-boggling hypocrisy simply served to emphasise how peripheral the Tory party is these days to any debate about education. Following the Tories' announcement
this week on the tuition fees policy, I reflected that the more unpopular they remain, the more populist they feel they must become. That is the iron rule of Conservative politics in this country. I say this to them: it will get them nowhere.
Mr. Brady: Would the hon. Gentleman care to confirm that in 2001 he stood on the Labour manifesto that pledged not to introduce top-up fees?
Mr. Chaytor: I stood for Labour in the 2001 election and the 1997 election, and I have a very clear view on top-up fees, which I have expounded many times. When we get a more detailed opportunity to discuss the hon. Gentleman's views on top-up fees, I will happily engage him in debate on that again. I may be one of the very few Labour Members who were enthusiastic about the notion of top-up fees, and I am unrelenting in my support for the concept.
That exchange was a distraction but it is important, because it shows that whatever the Tories say today—[Interruption.] Whatever the Tories say today, no one in the education service will believe them, because, as the hon. Member for Harrogate and Knaresborough (Mr. Willis) has said, throughout his teaching career—I can vouch for this, as someone who had a small responsibility for managing the chaos of the public services during the Tory years—every year of Tory rule led to cuts in education budgets. Not only were there cuts in the size of the overall cake, but there was relentless redistribution away from those who needed it most to those who needed it least. Therefore it will be many, many years before the British people—parents, teachers and governors—forget the record of those Tory years, and whatever the Tories say on this issue cannot be taken seriously.
I was grateful for the fact that the hon. Member for Ashford (Mr. Green) did acknowledge the significant increase in the investment that Labour Governments have put into schools during the past six years. That was a measure of his generosity, but in demonstrating his generosity he simply exposed his hypocrisy because, as I said in my intervention, if he welcomed the increase that has made possible the current level of achievements in our schools and the current increase in capital spend in our schools, why did he vote against it every year? Budget of '97: the Tories vote against. Budget of '98: the Tories vote against. Budget of '99: the Tories vote against. They have done so every year and they will carry on doing so every year.
We all now know, because it is well documented, that the Tories' policy is to secure an overall cut of 20 per cent. in public spending. So however often they bring to the House cuttings from their local newspaper, and letters from parents and governors of their local schools, there is no way that they can justifiably criticise the Labour Government's record on investment in schools.
The picture across the country is, of course, hugely variable. I do not deny that this is a difficult year. The Secretary of State has described in detail, as other hon. Members have, the factors that led to the current particular difficulties. Some of those factors are not altogether to be regretted. It would have been very
unusual if there had not been an increase in the teachers' pension fund, given the new projections provided by the actuary.
Angela Watkinson (Upminster): Will the hon. Gentleman acknowledge that the cost of staffing is the lion's share of any school's budget, and that if schools have, as the schools in Havering do, a very high proportion of long-serving, experienced teachers, that has a very significant effect? Even though Havering has passported 112 per cent. of schools funding, schools are still delivering deficit budgets because of their experienced staff.
Mr. Chaytor: I agree completely. During the passage of the Education Reform Act 1988, I was among those who pointed out that one deficiency of the then concept of local management of schools was that schools that happened to have more experienced staff would be screwed into the ground in their individual budgets. That effect has continued since then, although it must be said that the present Government have made greater allowance for the real costs of salaries, whereas, by contrast, under the previous regime notional costs alone were taken into account.
A high proportion of any school's budget is spent on staffing. That is important because we have to remember that, year on year since 1997, a large proportion of that significant investment has been used to raise teachers' salaries, quite apart from the one-off contribution to the teachers' pension fund this year.
It is dishonest for any politician, local authority member or officer, head teacher or governor somehow to pretend that an improvement in teachers' pay and conditions does not directly contribute to the quality of education, first, by offering greater motivation to the work force and, secondly, by sending the right kind of signals, so that young people entering teaching know that it is a worthwhile career. We have to recognise the important contribution that has been made by enhancing teachers' salaries and improving the teachers' pension fund.
As I was saying, the picture across the country is hugely variable. I met the chief education officer of the local authority in Bury two or three weeks ago to talk about this issue. There are variations between schools and some schools are still in deficit, but I am not aware that any school is making people redundant. However, following this year's changes to the funding formula, local authorities such as mine and many other smaller metropolitan districts, as well as unitary authorities, that have been at the bottom of the funding league table historically, are in a much healthier position.
This year, for the first time since 1990, the local education authority in Bury has received an increase above the national average. This year, schools in Bury can see the impact of the changes in the standard spending assessment directly in their budgets. That is not to say that no school has a deficit, but schools in my constituency have carried deficit budgets every year for the past 13 years.
The local authorities that are now squealing the loudest are often those that have made major gains under the previous SSA formula. We have to ask what they did with that money. Why was it not used to build
up surpluses for when the system changed? Why did they not anticipate that the gravy train or the bandwagon of the previous SSA formula would come to a halt at some time? I do not criticise those head teachers, but I have to make the point that some local authorities in the United Kingdom have had an SSA per pupil at primary and secondary level two or three times greater than others. The schools at the bottom of the pile have been carrying deficit budgets for years and, thankfully, because of the courageous decision taken last year by the Government to reform the SSA formula, we are now getting a more level playing field.Examples of individual schools have been quoted, one by the hon. Member for Harrogate and Knaresborough. I regret that he did not accept my attempt to intervene earlier; I simply wanted to ask him whether I could have a copy of our brief on the debate because he seemed to be the only hon. Member who had one. He mentioned several schools, one of which is in Manchester and I know it particularly well. He claimed that that school had a £600,000 deficit. He used that example to support his argument that this was the crisis year, but, as every hon. Member knows, schools with £600,000 deficits do not acquire them in a single year. He referred to the deficit, not a shortfall, and I know that there is a deficit, not a shortfall, in that case.
Many schools have carried deficits for a number of years, and we have to ask what have those head teachers, governors and LEAs have been doing about the deficit. Is it a matter of bad management in the school, or one of exceptional costs because of the nature of the physical structure of the school, or is it simply that the school does not have enough pupils and is operating at 50 per cent. capacity? I am not saying that any of the schools that have been quoted today fall into those categories. All that I am saying is that the enormous deficits that have been quoted are not the result of this year's changes alone—they are the result of historic factors.
We must also recognise that if we support the system of schools having their own budgets and those budgets being determined by formula, and that formula being largely, not entirely, determined by pupil numbers—given that we have a system, particularly in secondary schools and less so in primaries, that has a built-in volatility in respect of pupil numbers, and in which parents' preferences change dramatically year on year and school intakes change dramatically year on year—it inevitably follows that school budgets will vary dramatically year on year. That is the price that we pay for an extremely open, deregulated admissions system in secondary schools. It is really no good for individual chairs of governors, head teachers or Opposition politicians to start crying that there is a crisis when a particular school does not recruit to its numbers in one given year, when it has been quietly accumulating a surplus in the years in which it was full to capacity. I simply make that point.
There is a more profound and long-term issue that is worthy of further debate. Perhaps today is not the place to discuss the issue in great detail, but it was brought to our attention by the right hon. Member for Skipton and Ripon (Mr. Curry): the relationship between central and local government and the extent to which any central Government, in a nation of several million people, can directly influence at local level exactly what they wish to influence. The other week, the Secretary of State spoke
about taking central control of school budgets. I did not think that he was referring to taking control of the management of schools, which would be unrealistic, but to the concept of whether a national formula should be distributed directly from central government to the individual school. A bigger and more serious debate is needed. The current system—some of the flaws in that system have been brought to a head this year, but they always existed in previous years, and they will always exist—is immensely unwieldy and hugely bureaucratic. It leads to enormous loss of time and energy and to arguments about who is to blame, and it does not, and cannot, enable the Government to deliver on the ground exactly the policies that they wish to deliver. We must therefore start reconsidering the whole relationship between central and local government in respect of school funding.Clearly, the Education Reform Act 1988 represented the critical moment at which a historic shift was made. I suspect that in the next two to four years another moment will come at which we will need to complete that historic shift. Although the right hon. Member for Skipton and Ripon mentioned social services and the way in which the Secretary of State for Health may impact on them, there is no other area of the public services in which funding to a particular institution goes directly from central Government to a local authority, is jiggled about through additional formula, and finally reaches the end of the line with everybody dissatisfied. That is the central issue. We must therefore start the debate about whether the national funding formula—let us remember that the new formula spending share system is much fairer than the previous standard spending assessment system—should be distributed straight to individual schools. I think that doing that would involve huge risks, and the only solution, as the years go by, is probably a system of distribution through regional government, although that brings something else into the argument about which the Opposition will get excited. However, given that Wales manages to distribute money straight to local authorities and schools and that we can devolve power to Scotland, why can we not devolve power to the regions of England so that they can do exactly the same job?
The debate has raised interesting and complex issues. The Opposition have tried to manufacture a crisis, although there is not really a crisis but a series of problems that need to be resolved quickly. They have pretended that the whole country is affected, but it is not. Many parts of the country have done very nicely out of this year's settlement, although they might not have received the amount that they expected when the figures were first published. We have an immensely complex system involving a national formula that is devolved to local authorities followed by devolution to schools through a further local formula, which means that we will face such problems year on year. The time has come for a major review of the way in which we fund our schools.
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