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Mr. Win Griffiths (Bridgend): Will my right hon. Friend find time after the recess for an important debate on what could be a far-reaching change in the practice of the House, namely the publication of the Senior Salaries Review Body's report on the payment of Select Committee Chairs? In that debate, is there likely to be
an opportunity for my right hon. Friend to consider whether House Chairs should be paid? I hesitate to say this, but given that I am retiring at the next general election, I have no long-term interest in whether the Speaker's Panel should be considered in this regard.
Mr. Hain: We all regret the fact that my hon. Friend is retiring at that next election, as he has been a valuable servant of the House and, indeed, currently serves with distinction on the Chairmen's Panel. We published this morning in the proper way the SSRB report on that matter. It is important that we value the work of Select Committees and recognise the contribution of their Chairmen. The creation of a career path on the Back Benches has been recommended by numerous academics, commentators and independent studies. The Hansard Society commission and the Conservative party's own commission on strengthening Parliament both recommended that the chairmen of investigative committees be paid a salary equivalent to that of a Minister. Indeed, Jeremy Paxman advocated that path, so the policy must surely commend itself to the House. As for the Chairmen's Panel, its members do a very good job and put in a lot of hard work, and we will have to consider the matter. There is also the question of the Chairmen of Domestic Committees, who are not covered by the SSRB report.
Mr. George Osborne (Tatton): Two weeks ago, I asked the Prime Minister about the implications of the Sally Clark and Trupti Patel cases. Today, he has written to me with important new details about the way in which the Government will handle the aftermath of those cases including, for example, reviewing current prosecutions, setting up a group to look at previous convictions of people currently in prison and, indeed, producing a new code of practice for pathologists. That is all welcome stuff, but does the Leader of the House agree, given the enormous public concern about those cases, that there should be a statement or debate when we return after the recess so that we can press the Solicitor-General in greater detail about some of those issues?
Mr. Hain: I agree that those issues are important. I will bring the matter quite properly raised by the hon. Gentleman to the attention of those concerned.
Mr. Clive Soley (Ealing, Acton and Shepherd's Bush): In previous answers, my right hon. Friend seemed to accept that reform of the House of Lords is unfinished business. Will he clarify whether the Government regard their role as assisting the process of finding an acceptable solution in this Chamber and, indeed, the House of Lords? May I put it to him that both Houses and the Government should accept that a hybrid system is good for the constitution and a good way of reaching agreement, so we ought to go down that road? Will he consult on that and enable debates to take place on it?
Mr. Hain: The Government will be considering those matters in the coming period. As soon as we are in a position to do so, having undertaken further consultations, we will come back to the House with recommendations on a way forward.
Mr. Patrick McLoughlin (West Derbyshire): This morning, the Select Committee on Trade and Industry
published a report on post offices and the introduction of the Government's policy forcing pensioners to stop getting their benefits from the post office. That has had a devastating impact and is causing a great deal of concern among many sub-postmasters throughout the country. Is it not time that we debated that issue yet again so that the Government can respond to sub-postmasters' concerns?
Mr. Hain: I recognise the point that the hon. Gentleman is making. Obviously, as I have said in response to previous questions on this matter, local post offices have been under threat for decades because of the changing pattern of consumer behaviour. We must do everything in our power to protect them, and the important points made by the hon. Gentleman will be brought to the attention of the Secretary of State for Trade and Industry.
Brian White (Milton Keynes, North-East): The Leader of the House will be aware that the Communications Bill received Royal Assent today, but he will also be aware that one problem that the Government had during its passage was that parliamentary counsel could not recognise that the definition of a citizen included anything outside the narrow definition relating to nationality. Will he explain why that key area of the public services remains a monopoly, and why it is denied the benefits of competition enjoyed by other public services? Will he look at that as part of his modernisation proposals?
Mr. Hain: I am afraid that I am not going to give my hon. Friend an explanation in business questions, but I am sure that he can get one from the relevant Secretary of State.
Mr. David Heath (Somerton and Frome): Will there be an opportunity for a debate on acute hospital services in the south-west? The right hon. Gentleman may be aware that Royal United hospital, Bath, along with the Bristol hospitals have, for the second year running, received a no-star rating, despite the fact that most people agree that there is nothing wrong with their surgical, medical or nursing facilities. The problem is past management mistakes and a huge debt. Will the Secretary of State for Health come to the House and explain what he will do to put things right for the people served by hospitals in Bath and Bristol?
Mr. Hain: I am sure that the hon. Gentleman knows that he has an opportunity to raise these matters in an Adjournment debate, but meanwhile I shall certainly bring his point to the attention of the Secretary of State for Health. However, in the interests of fairness, he will acknowledge that there is now record investment in the health service, and that more nurses and doctors are being recruited than ever before. There are record real-terms increases in health care, reversing decades of underinvestment and underspending on health by the Conservatives.
Mr. John Lyons (Strathkelvin and Bearsden): My right hon. Friend will be aware that many Members have recently been lobbied by members of the Trade Justice Movement, who are particularly worried about
the summit in Cancun in September. Will he make time in the House for a statement and discussion on the debate in Cancun?
Mr. Hain: I shall certainly look at that. The Government attach a lot of significance to the issue, as does my hon. Friend, and share his view that the objective of achieving trade justice is an important one. We will work to achieve that objective, and shall obviously report to the House in the normal way.
School Funding
1.15 pm
Mr. Charles Clarke: Mr. Speaker, with permission I would like to make a statement about the funding of schools in the years 2004–05 and 2005–06.
I begin with an assessment of the changes that have taken place in the past six years. Our country now has the best results at ages 11, 14, 16 and 18. We have tackled the shameful neglect of our school buildings and, by 2005–06, we will be investing over £5 billion in repairs and new buildings. We have delivered major increases in school spending, and school funding is up by more than 25 per cent. in real terms per pupil. It is no secret where the money has gone. We now have 25,000 more teachers and 80,000 more support staff than in 1997. Moreover, teachers' pay has improved significantly. For example, in 1997, a teacher with six years' experience received £20,040, while their counterpart today will, from September, receive £26,460, which is a real-terms increase of 13 per cent. We have also started down the road to a fundamental improvement in teachers' work load and working arrangements. Those are all achievements of which teachers, heads, governors, local and central Government can be proud.
There is no doubt, however, that many schools have experienced real difficulties this year with their budget allocations. As I set out in my oral evidence to the Select Committee on Education and Skills earlier this week, a wide range of factors contributed to that situation. I will not repeat them here, but I wish to put on record my appreciation for the hard work of head teachers and local education authorities across the country in coping with those difficulties and continuing to improve the quality of education provided by their schools.
In my statement on 15 May, I said that I would keep the House informed of my thinking, and give head teachers and LEAs early indications of our approach to help them begin planning for next year. My purpose today is to outline the first steps that we are taking to respond to schools' practical concerns about the present system. Following continuing consultation with representatives of local authorities, chief education officers and head teachers, I will make a further report to the House in the autumn. My guiding principles on the changes needed in the schools funding system for the next two years are as follows. First, every school should receive at least a guaranteed per pupil increase in funding for each year. Secondly, central and local government should make earlier announcements of the financial allocations to schools so that heads have greater certainty and time to plan. Thirdly, we should provide greater stability through a two-year settlement on teachers' pay, ring-fenced grants and the guaranteed per pupil increase in school funding. Fourthly, there should be greater transparency in the overall system of funding for schools. Finally, the reforms agreed with the key work force partners, as reflected in the national agreement on raising standards and tackling work load, should be sustained.
The Government have been working intensively to identify a package of measures that will deliver those aims. This year, my Department provided a guaranteed minimum increase in the education formula allocations for each local education authority. In 2004–05 and
2005–06, I intend to go a stage further. My central proposal for each of these two years is to provide a guarantee at the level of the individual school, so every school will receive at least a minimum increase in its funding per pupil. Of course, many schools will receive more than this minimum. We intend to implement that through fair funding regulations, placing each local education authority under a direct obligation to provide for such a minimum guarantee. I will confirm the minimum percentage increases for 2004–05 and, provisionally, for 2005–06, by the time of the provisional local government finance settlement in November, when we have completed our analysis of costs in the system, in particular, on teachers' pay. We will share that analysis, and the rationale for the level of the minimum percentage increase, with our education partners.This guarantee will provide for a minimum funding increase in every school. That minimum will be based on the average cost pressures for 2004–05 and 2005–06. Obviously, it cannot match the precise composition of each school's current spending profile. For example, it cannot insulate schools from the effects of changes in their pupil numbers, or reflect their wide range of different staffing arrangements. Heads and governors will continue to need to plan ahead, with their LEAs, to take account of those features that are specific to every school, but I believe that our average per pupil guarantee will give schools a far more stable foundation.
We are already discussing with our education partners how the guarantee will work in detail, and we will consult further. We will seek to agree guidelines to underpin the operation of these new arrangements, in order, for instance, to take proper account of the extra protection that LEAs already provide to very small schools. Within this framework, LEAs, heads and governors will work together through their schools forums to agree the funding baseline to which the guaranteed per pupil increase will be applied.
For sixth forms, the Learning and Skills Council will, in both the 2004–05 and 2005–06 school years, provide each school with guaranteed minimum increases in funding equivalent to the per pupil guarantee for schools. The LSC will consult all heads of maintained schools with sixth forms in the autumn on its plans for improving the operation of sixth form funding for 2004–05.
Some schools have found it necessary this year to spend from their reserves or from devolved formula capital allocations; others have set deficit budgets by agreement with their LEAs. Of course, schools and LEAs have the primary responsibility to manage the ongoing consequences of such decisions, including maintaining sound financial management and balancing budgets. The changes that I am introducing for 2004–05 and 2005–06 will help them to do so. However, I recognise that there may be some cases where doing so could be beyond the capacity of individual schools and LEAs. In those few cases, I will be prepared to consider limited, transitional support to avoid damage to children's education, where that is part of a locally agreed recovery plan between the LEA, schools and the Department. I shall discuss with head teachers and local authority representatives how best to provide such support.
Of course, the minimum guarantee that I am offering today to schools can be fulfilled only by ensuring that each LEA has the necessary resources within its schools budget. There are two key elements. First, in both 2004–05 and 2005–06, I will set the minimum increase for schools formula spending share—SFSS—in each authority at a level that will cover the school level guarantee and provide the headroom necessary to enable the local fair funding formula to work, and to help provide transitional support to individual schools, where necessary. Secondly, we will ensure that the local authority receives sufficient central Government grant to passport in full the increase in SFSS into its schools budget.
The Government will also provide additional resources for other local services, including children's social services, which are now my responsibility, over and above those announced for them in the last spending review. That will help to ensure that the arrangements I am announcing today do not create difficulties for other local services. The details will be announced in the autumn. Having provided these resources, the Government are determined that each and every school should benefit in the way intended.
My right hon. Friend the Deputy Prime Minister and I will write to every local education authority setting out the Government's clear expectation that, barring wholly exceptional circumstances, each and every LEA should passport the full increase in its SFSS into a matching increase in the schools budget. That is essential if heads, governors, teachers and parents are to have full confidence that the resources intended for schools will indeed get through to schools. I have statutory powers to require LEAs to set a minimum schools budget, and I will be prepared to use those powers where it is necessary to do so.
This year most LEAs' spending on centrally funded pupil services, such as special educational needs and excluded pupils, has increased significantly faster than their spending on budgets delegated to individual schools. It is essential that, in future, the individual schools budget receive its fair share of any increase, so my intention is that, in 2004–05 and 2005–06, spending on such central items should rise no faster than spending on the individual schools budget. I will consult on how fair funding regulations can ensure that this is delivered. In doing so, I will take account of the need for local flexibility on items such as the expansion of nursery provision to meet the Government's commitments.
It is clear that a significant source of problems for some schools this year has been the changes in the standards fund. I will help to provide stability and security by maintaining and inflation-proofing the support that the standards fund provides to schools at its 2003–04 levels. That means that I am reversing the reductions previously announced for standards fund support to schools in 2004–05 and 2005–06. That will provide more than £400 million in each of the next two years, over and above existing plans. I will also be making earlier announcements on standards fund distribution, before the announcement of the provisional local government finance settlement.
I am able to make such additional funding available from my end year flexibility, and other redirection of existing resources. I set out for the House in my Department's annual report the planned and prudent
use of accumulated end year flexibility over the next three years to supplement resources secured through the spending review. This additional commitment means that my accumulated end year flexibility is now fully committed to support children, young people and adults in achieving their full potential.Head teachers should know their budgets in good time for the beginning of the financial year. I am taking a number of steps to provide earlier notification of their funding. As well as earlier notification on the standards fund, the Government will bring forward the date of the provisional local government settlement to the middle of November. We also intend to bring forward the date by which local authorities are obliged to notify me of their passporting intentions by one month to the end of December, and the Government will propose an appropriate amendment to the Local Government Bill on Third Reading in another place.
It is vital that the reforms that we agreed with key work force partners, as reflected in our national agreement on raising standards and tackling work load, are sustainable. That remains a key priority for my Department. By maintaining the standards fund at its current level, we will help to ensure that schools receive the core funding that they need to make progress on implementing the work force agreement.
On 11 July, I submitted my evidence to the School Teachers Review Body. That evidence makes the case for a two-and-a-half-year settlement on the basis of current targets for inflation. I have set out a clear strategy to enable sensible progression along the upper pay scale while controlling the costs, and I have asked the STRB to report on all the major issues in early November, so that LEAs and schools will have much earlier certainty about the level of pay cost pressures for the next two years.
This year's problems have underlined the need to provide more and better support for schools and LEAs in planning and managing resources, and for schools forums, which have a key role to play in helping to secure local consensus on distribution. We will be discussing with education partners, the National College for School Leadership and others how best we can make rapid progress.
Finally, I want to make it clear that this package is designed to secure stability and restore confidence in our funding arrangements for schools. We need to ensure that the schools funding system commands broad support, works to promote our overall objectives for raising standards in education, and so ensures that resources are used in the most effective way to secure higher quality and better levels of achievement in schools. I will, of course, be monitoring the impact of the changes I am announcing today, with a view to considering whether further changes are needed for 2005–06. It is critical to ensure that funding arrangements for schools are sustainable in the long term.
I recognise that this has been a difficult year. However, I believe that the steps I have outlined today provide a realistic framework of stability and certainty for the next two years. We will work with LEAs and
schools, within the framework I have set out today, to deliver the further improvements our children deserve. I commend this statement to the House.
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