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Mr. Damian Green (Ashford): As always, I am grateful to the Secretary of State for advance sight of his statement and for his exquisite sense of timing in making it today. When he looks back at his 12 months in the job, I am sure he will agree that coming to the House to try to rectify the school funding crisis caused by his Government should not be a necessary duty for him. Let me explain what his non-transparent statement meant.
The Secretary of State's predecessor presented the Government's plans for education spending as a triumph, but instead of that, heads, teachers and parents across the country have spent months trying to cope with the effect of huge deficits, teacher redundancies and crumbling school buildings. Many schools have been forced to dip into their financial reserves or capital budgets to ensure that they make ends meet. Schools across the country have deficit budgets and LEAs are suffering huge shortfalls. Hertfordshire estimates a £15 million shortfall, Surrey has spent £12 million of its reserves and my authority of Kent has an estimated £22 million shortfall. I need not remind the right hon. Gentleman that in Norfolk the shortfall is £14 million.
The effects of the crisis have been most acute in the classrooms. Only two weeks ago, a report commissioned by the National Union of Teachers found that a quarter
of primary schools and a third of secondary schools cut staff this year because of financial shortages. Furthermore, the funding problems make a mockery of the Government's claim that class sizes have got smaller. In practice, classes are having to double up to save money that is usually spent on supply teachers. Planning, preparation and marking time are being reduced as a result.So today we have the Secretary of State's rescue package. He has made much of the extra money going to the worst-hit local authorities. That will be welcome, as will the fact that some of the relevant information for schools and local authorities is coming out earlier than in previous years. But as ever we need to dig beneath the surface of the statement to find the new victims of the Government's failures in this area.
Some of the money that the Secretary of State is giving away is reported to come from the budget for teachers who have earned it through the performance-related pay system. Can he confirm that? He skated round it in his statement. What is the point of performance-related pay if teachers perform but do not then get the pay? Can he explain to teachers and the House how that is fair? Since he is penalising precisely those teachers who have worked hardest, can he imagine how much damage he is doing to morale in staff rooms today?
On the general issue of teachers' pay, the right hon. Gentleman announced an annual rise of about 2.5 per cent., and he told the House today that that means an increase of about 3.4 per cent. for school budgets. Is he aware that that calculation is regarded with great suspicion by many people in our education system? They feel that schools will face cost pressures much higher than 3.4 per cent. In particular, can the right hon. Gentleman give schools a guarantee that they will face no more increases in employers' national insurance contributions? What effect does he think that that will have on the teachers' work load agreement, by which he rightly sets much store?
The Secretary of State has today announced a per pupil increase of 4 per cent., but the House needs to unpick that figure and what lies behind it. I assume that it is an increase for every pupil in every school, regardless of that school's financial position. If so, is he not in danger of failing to compensate the worst-hit schools enough because he is spending the same amount in every school? He will be aware that the effects of the previous blunders have not been felt in a uniform way across the country, and indeed his £120 million fund is designed to address that. Can he give the House a guarantee that the extra grants and loans that he has announced will mean that every school will be able to return to the staffing levels that it had before this year's crisis? If he cannot, this announcement is just another piece of spin.
On the wider implications, can the Secretary of State be more explicit about how far he wants to go in removing LEAs' ability to use local discretion on funding? I suspect that he deeply regrets his Government's abolition of grant-maintained status for schools, but if he is planning to bring it back for all schools by the back door, perhaps he could share that momentous change with the House.
More particularly, if the right hon. Gentleman is removing some financial discretion from LEAs, can he tell us what will be the impact on special educational needs provision? He spoke briefly about that, but it was not at all clear what the ultimate effect would be. Earlier this year he accused some local authorities of spending too much on SEN provision—one of the most extraordinary statements that I have ever heard from an Education Secretary. Has he now decided that he wants to be in direct control of all SEN funding as well?
The statement promises a minimum funding increase, but of course one of the key things that will matter to local authorities is where all the extra money is coming from. How much will come through the SFSS? The Government announced earlier that they were cutting central Government funding through the standards fund to give more freedom to local authorities; they are now reversing that process. But at the same time, they are trying to claim that the extra money that will, after today, come through central Government is new money. It is not; it is reshuffled money, so some of the real money will have to come, as ever under this Government, from the council tax payer.
Can the Secretary of State tell the House the full implications of today's announcement for council tax levels and other services? If councils are told, as they have been, that they have to spend as much on education as the Government demand and that they will be capped if they put up their council tax too much, they will have to slash other services.
The Government have spent months trying to dig themselves out of the hole that they created last year. This statement shows that the means that they are using are unfair to hard-working and successful teachers and threatening to council tax payers, and they do not even guarantee that the worst-hit schools will be enabled to recover quickly. The effects of that will be felt early next year when schools come to set their budgets. That is when today's statement will really be judged. Schools know from this year's experience that a generous-sounding Government statement can turn into a reality of cuts and redundancies. I hope that we do not see a repeat of this year's funding crisis in schools, but I fear that we will.
Mr. Clarke: I was interested to note that the word "children" never found its way into that response.
The hon. Gentleman refers to my exquisite sense of timing. I was grateful that the Conservative party decided to have its leadership election today, but I assume that it is only to hide the good news in my statement.
I counsel the hon. Gentleman to be careful in quoting Conservative-controlled authorities such as Hertfordshire, Surrey, Kent and Essex, which are scaremongering in their schools with totally false figures. I say to the hon. Gentleman, as I said to the Conservative leader of Kent and other Conservative council leaders: "Look at this statement, analyse it and understand what it means for every LEA and school, and then make a judgment. Don't try to scaremonger without having the facts in front of you."
I know that the hon. Gentleman was speaking from an NUT brief, but it is not true that performance-related pay has been raided for this money. We gave our evidence to the pay review body, and we will see what it has to say. It is not true that the 3.4 per cent. figure is regarded with suspicion by other people in the education world. In fact, it was derived specifically from a series of discussions with, among others, local government and the head teacher associations precisely because I desired some consensus on what would be an appropriate figure.
It is not the case that more increases in national insurance are in the pipeline. It is not the case that we are failing to compensate schools in the worst position; in fact, we are giving local authorities the flexibility to do that. None the less, I was interested that the hon. Gentleman appeared to be saying—no doubt he will correct me if I have got this wrong—that he is against a per pupil guarantee for every pupil in every school. The implication of what he said is not to have such a guarantee.
It is the case that pupil numbers will be the principal determinant in school funding, so where rolls are falling, there will be consequences. I have made that clear, and it is the case throughout the system. It is not the case that we are removing LEA flexibility; in fact I am publishing regulations that will increase their flexibility to deal with the greatest issues.
I acknowledge that important issues arise from special educational needs, and we have discussed those with local government. It is not the case that we are increasing the standards fund with money taken from the SFSS. The reverse is true: we have gone right through our budgets to increase that fund and the SFSS is left untouched by that approach.
Finally, it is not the case that council tax will have to go up to achieve these increases. My statement and the statement that will be made by the Deputy Prime Minister in due course do not require council tax increases in order to maintain essential services.
It is important that even the Opposition, in their current parlous state, have a discussion about these proposals on a factual, honest basis, rather than reading out a litany of allegations that are either wrong or simply taken from the NUT's brief.
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