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Fifteenth Standing Committee
on Delegated Legislation
Thursday 10 July 2003
[Mr. Joe Benton in the Chair]
Education (Outturn Statements)
(England) Regulations 2003
8.57 am
Mr. Graham Brady (Altrincham and Sale, West): I beg to move,
That the Committee has considered the Education (Outturn Statements) (England) Regulations 2003 (S.I. 2003, No. 1153).
I speak for us all in saying what a great pleasure it is to see you in the Chair, Mr. Benton, particularly on such a fine morning.
The Committee has an opportunity to turn its attention to something that may not appear in published form until the misty days of early October, so we must cast our minds forward to the autumn, when the education outturn statements may be produced for the financial year 2002–03. Outwardly, the outturn statements and the regulations that provide for them may appear on casual inspection to be somewhat dry—one might even say turgid. The word ''technical'' also springs to mind, although
the Minister will have no difficulty whatever in dealing with questions, however detailed and technical they are.
The statements and the regulations are, however, central to any attempt that members of the Committee and the House may make to understand the financial performance of our education system, which is opaque at the best of times and causes considerable difficulty for Members with no particular involvement in the study of education policy. As we know from our experience this year with the apparently unexpected crisis in school funding—this may give some comfort to members of the Committee who are not financially trained—Ministers also have difficulty in trying to penetrate the detail of exactly how the financing of local education authorities and schools works. That is why the regulations are so important.
The Minister may point out that these regulations for 2003 prescribe the form for the publication of outturn statements in respect of the financial year that has just ended, not the current one. I have several concerns that I hope he will deal with, briefly but fully. Central is the question whether the outturn statements in the prescribed form will provide the baseline information necessary if we want to understand in detail what has gone wrong with the funding changes for this year. Only if we know in detail the position in the financial year 2002–03 can we study with any effect what changes have taken place in the current financial year. That is absolutely central to an understanding of, and an ability to predict, what will happen in the coming financial year, which is causing schools around the country considerable anxiety.
My first question, therefore, is whether the outturn statements for the financial year 2002–03 allow direct
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comparison with those for the financial year 2001–02 and, perhaps more importantly, whether they will provide for a direct comparison with 2003–04. If not, the Minister must tell us what additional information would be necessary, what changes should be made to the outturn statements and whether other steps have been taken to ensure that information is available to allow Ministers, Members and those elsewhere who take an interest in these matters to understand exactly what has happened.
In that context, we note that the outturn statements for 2002–03 must be published before 10 October. When will it be possible to give the House figures for the changes between 2001–02 and the current year? From time to time, there have been announcements and comments from the Department, some of which appear to conflict, when money appears to be trapped or lost in the system. Was it lost in the Department for Education and Skills, where there was a large underspend of £1 billion in the previous financial year, in LEAs—the Minister said that some £500 million got lost on its way to schools—or is there some other explanation?
I ask the Minister to concentrate on the details. We should be able to track what has happened, and what will happen, to school balances. Some schools have been carrying considerable balances, which they have come to depend on for their financial planning—sometimes, for example, to finance capital projects for developments to proceed even if funding is not available directly from the DFES or the LEA. In the context of the current funding crisis, we know that many schools have had to use their school balances, which has caused concern and will cause problems both in practical management and forward planning.
Leading on from the question of balances, Ministers told schools that they could set deficit budgets if that enabled them to avoid redundancies in both their teaching and non-teaching work force. That again is something that we must be able to track from a baseline position. We need to know where schools stand this year and where they will be at the beginning of the next financial year as a result of the funding difficulties this year so that we can plot an effective route out of difficulties in future years. Another thing that Ministers said could be done to avoid particular problems and redundancies was to transfer sums of capital funding to revenue use.
My untutored eye notes that the forms that we are studying this morning provide for the identification of capital that is transferred from revenue. However, on first inspection I saw no direct identification of capital funds that are transferred to revenue use. It is important for us to know when and where that is happening. I would be grateful if the Minister either pointed the Committee to those areas of the outturn statements that would enable us to see those movements or assured us that the information is available through other means.
Will the Minister also point us to certain headings in the outturn statements? Where would we find an identifiable sum for each LEA or, even better, for each school for the shifts in the costs of employer's national insurance contributions and the shift in the cost of
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teachers' pension provision? Presumably, although again I cannot see it at first glance, those would come in disaggregated form under the heading of other employee costs. The Minister knows that those are
two key reasons for schools having so many problems this year.
Having noted how opaque these matters are, we can all sympathise with Ministers, yet it is perhaps surprising that they did not predict that problems would arise as a result of the increased costs being placed on schools. I am sure that the Minister agrees that it is of paramount importance for us to know exactly what those increased costs were so that we can see how matters are likely to move forward.
Indeed, there may be other changes either in forms of taxation, such as employer's national insurance costs, or in funding the pension scheme. As you will know, Mr. Benton, the scheme is unfunded. Effectively, that is a form of taxation applied by the Treasury to claw back some money that was previously announced as going to schools. It is in the interests of Ministers, schools, LEAs and the whole House that that information be stated clearly. We should be able to see where in the tables we can identify those increases and plot them forward.
The Minister knows that schools have suffered misery and chaos this year as a result of funding changes. We must have the fullest financial information in a form that allows comparison year on year, so that we and Ministers can be clear about what has gone wrong this year and absolutely certain that it will not be repeated next.
9.10 am
Dr. John Pugh (Southport): Do you ever wake up in the morning in a mood of existential angst and wonder what we are all doing here, Mr. Benton? Perhaps that is why you were late on this occasion.
I query whether this sitting is necessary. You and I go back a long way, Mr. Benton, to the days of Bootle town council chamber. Little did we realise that one day we would find ourselves in the mother of all Parliaments debating a form with a galaxy of rising parliamentary stars. Had we spent time in a council chamber just talking about a form, the local residents may have asked whether that was a wise use of public time and money.
Mr. Brady: I am concerned at the hon. Gentleman's suggestion that the Liberal Democrats do not take the role of parliamentary scrutiny seriously. If he was back in his council chamber, as perhaps he will be one day soon, and the council of which he was a member had presided over unpredicted chaos in schools financing throughout the LEA area, causing redundancies among teaching and non-teaching staff, would not the public ask questions not about the lack of scrutiny, but about the competence of those responsible?
Dr. Pugh: I think the problem was caused not by the lack of an adequate form this year, but perhaps by a lack of adequate funding. However, we are discussing whether this is an appropriate form to be put before schools. Such a question could easily be resolved by a well-placed written question to the Minister, which
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would not detain other Members first thing in the morning to discuss a relatively uncontentious proposal.
It is right that the information should be available—it is available to Ministers and to members of the public—so if the hon. Member for Altrincham and Sale, West (Mr. Brady) has any queries about his local authority, he can obtain the necessary documents from the town hall. I doubt that much of the information will be any use to the Government, nor do I think that the Minister will stay up all night scouring the returns when he gets them. Most of the information strikes me as redundant and likely to languish in the vaults of the DFES, perhaps for ever.
It will be interesting to see whether the Government use the information to make a robust defence of their financing arrangements, which is what I suspect they may be concerned with. I agree with the hon. Gentleman that various things can be added to it, although that should be the schools' decision, not ours. They are not queuing up to provide even more information for the Government.
There is possibly a case for the Government and schools to have a sustained discussion about the appropriate format for the form, but that discussion will take place anyway, regardless of whether we meet here at 9 o'clock on a Thursday morning. We should finish the debate quickly and get on to something useful.
9.13 am
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