Examination of Witnesses (Questions 40-59)
MR DAVID
NORMINGTON, DR
RUTH THOMPSON
AND MR
STEPHEN CROWNE
25 JUNE 2003
Q40 Jeff Ennis: Because of the passporting
through, it also directly affects the other services straight
away.
Mr Normington: The whole issue
of passporting and whether we use our powers to enforce passporting
would always be a decision that we took with the Office of the
Deputy Prime Minister because of its impact on the rest of the
local authority settlement.
Q41 Jeff Ennis: You mentioned earlier
the Secretary of State's name. When he made his famous announcement
blaming the local authorities for the fiasco, shall we say, did
the Deputy Prime Minister know that the Secretary of State was
going to make that sort of remark?
Mr Normington: I think so, but
I do not know. I cannot recall whether there had been that sort
of discussion, but I think so. He will say this himself, but I
will say it for him as well. We did not make that statement with
the intention of criticising the local authorities. That was how
it came out, but until that point, everything that had been said
about this—
Q42 Chairman: Mr Normington, what
do you mean, "the way it came out"?
Mr Normington: What I mean is
it was reported in that way.
Q43 Chairman: The press were unkind
to you?
Mr Normington: I do not want to
start blaming the press. I think I have answered this. What we
were trying to do on that occasion was to say there are a number
of people who take decisions which affect schools, and all across
the country local authorities are at different positions in their
budget allocation process. They are taking different decisions.
Some are holding money back, some are allocating more than they
have been asked to, some have allocated less. It is really important
that people understand how the national framework we have is being
applied locally, and why some schools who are complaining about
their budget position do not know at this stage—2 May, very
late—what their budget position is. That was proved by the
fact that after we published those figures, a lot of local authorities
moved money from their central provision into schools. So some
of what we did was actually lay out the position. There is nothing
in what Charles Clarke said which was aimed at criticising local
authorities, and I have already said in response to one of the
members of the Committee that many local authorities have been
working really hard to sort this out.
Q44 Chairman: Mr Normington, I am
a sad, old Radio 4 listener, and I certainly got the impression
that the Secretary of State was blaming local authorities.
Mr Normington: That was not his
intention.
Q45 Jeff Ennis: You have mentioned
the modelling exercises that have been undertaken this year, and
in previous years, and the difficulty of doing finite modelling,
but in a nutshell, do you agree that one of the problems this
year was that schools were planning on a minimum per pupil increase
in funding of 3.2%, and that the average real terms increase in
funding was only around 1%, and that many schools received less
than that?
Mr Crowne: What we did in allocating
money to local authorities was to set a floor and a ceiling. The
3.2% floor was set leaving aside the additional costs of pensions
and National Insurance.[7]
In fact, that equates to an 8% cash floor; in other words, the
increase in EFS in every authority was at least equivalent to
8% cash, so that covered what we considered at national level
to be the pressures in the system. Because the new funding formula
is essentially redistribution, there will be winners and losers
within the range 3.2-7%, the floor and the ceiling. One of the
problems we had early on was confusion about how the pensions
money and the National Insurance money was treated,[8]
so when you see a headline figure of 3.2%, it does not look as
though that covers costs. In fact, the real figure, the cash figure,
is around 8%, as the floor.
Q46 Jeff Ennis: So effectively, we
originally announced the headline figure of the actual increase,
and are we not now reaping the whirlwind in terms of the fact
that the reality of that headline figure announcement, when it
boiled down into actual figures for local schools, was that the
two did not match?
Mr Crowne: I think that is fair
comment, and it is always difficult for us to know whether to
talk in terms of cash or in terms of like for like comparison
of costs. The cash increase, as you know, in EFS was 11.2%, £2.5
billion, but we were anxious not to present that as a real terms
increase because, of course, it had to support additional costs,
particularly the increase in teachers' pensions contributions,
which is why we try always to present our figures in terms of
like for like. So the 3.2% figure is the like for like comparison.
But I think it is a reflection of the complexity of the system
we have and the changes this year that it is very difficult for
everybody at every level in the system to understand that that
is what was going on. I can talk from personal experience from
talking to heads about this, being clear about what is cash, what
is a like for like comparison, and the cost pressures that we
took into account in the national settlement. The figure that
David quoted, the headroom, our estimate of £250 million
was taking account of all of the pressures that we could identify
in the system.
Mr Normington: When you put your
question, you put it in terms of what schools were planning for.
You can see from some of the figures that we have provided that
the range of increases in individual schools, even in one authority,
is very broad. It can be almost nothing, particularly if they
are losing pupils, to over 15%. It can be as wide as that.
Q47 Chairman: Why do you think it
is going to be better next year? Many critics of the system say
that the passporting system leads almost to a random allocation
that you will not be able to control next year, so local authorities
will have that turbulence next year if you use the same formula.
We have the figures here, and we will give you the table that
we have. It shows not only that the turbulence was there, but
that it was predictable, because it all depends on that range
the new system introduces, but certainly, from the information
we have, you should have known about this turbulence on 6 December
last year.
Mr Normington: The first question
was about next year. I did not say it will be better; I said our
aim is that it should be better, and that means we will have to
come up with some changes to the present system, which we are
discussing with local authorities and with the Office of the Deputy
Prime Minister to ensure that the commitment Charles Clarke has
given that there should be a reasonable per pupil increase in
every authority, in every school, is met.
Q48 Chairman: You have to get it
right. Earlier on in the evidence you said it is going to be all
right next year. What we are saying to you is the evidence that
this Committee has already had suggests that, if you stick to
the same formula, there will be the same turbulence.
Mr Normington: I am not saying
it will be all right next year. I am saying we cannot repeat the
kinds of problems we have had this year, and therefore we are
discussing how we change the present formula so that we do not
have these problems again. Some things fall out. I do not think
we have a new National Insurance change, I do not think we have
any further pensions changes. So some of the changes we had this
year are part of the position but they are not new changes, so
they become part of the baseline. Also, many local authorities
are going to be more sensitised to these problems as well, and
will be on to these problems earlier than they were. But I come
back to it: in order to avoid the problems we have had this year,
we are going to have to make some changes to what we have done
this year, otherwise I think you are probably right, that if we
simply repeat what we did this year, and just let it happen, we
could not guarantee that there would not be some problems.
Q49 Chairman: You have to have your
figures right, and I do want it on the record. I have checked
these figures. As far as this Committee knows, the increase in
cash this year is 6.3%. Next year it will be 5% cash. Unless there
is a slightly higher rate of inflation, there will be less additional
money. I would hate for you to go away from this Committee under
the false impression that you have more money this year. This
Committee firmly believes you will have less.
Mr Normington: I am agreeing with
you that the increase next year is less than the increase this
year, and I actually have in my mind 2.5% and 1.4.[9]
Q50 Chairman: So we can agree on
that.
Mr Normington: We all agree there
is a lesser amount next year, but it is an increase.
Q51 Paul Holmes: As we have already
heard, there has been a lot of confusion in recent months about
where the figures are and where the truth lies. Can I ask you
about a few particular examples? We had the Secretary of State
telling Parliament that there was not much evidence of teachers
being issued with redundancy notices because the schools and the
LEAs could not afford to employ them. It would appear the next
day your Department sent out a request to local authorities to
provide this information. Now we are at the end of June, a few
weeks on. Do we have an absolutely clear picture? Have all the
LEAs returned the information? Do we have a clear picture of how
many teachers have been issued with redundancy notices, and whether
it is because of lack of money rather than falling rolls?
Mr Normington: I do not have new
information on that. I do not have an up-to-date figure because
it is changing all the time. The last figures we had on teacher
redundancies—and even then they were not real teacher redundancies;
it was notices that had been given—were actually from the
NASWT survey which we last year agreed with, which was not on
the basis of a complete survey of local authorities. The figure
was about 250 people. But we will not know until the autumn, and
even then, we might not know precisely what this figure is. Any
redundancy is a problem for that individual. I understand that.
There are between 20,000-30,000 teachers retiring every year,
so we are dealing with a very small number, albeit for the individual
it is a lost job and a problem. I understand that. We are doing
our best by talking to local authorities now, and most of the
local authorities are themselves doing their best to try to ensure
that there are a minimum number of redundancies, but I do not
have a new figure today.
Q52 Paul Holmes: Can I ask why you
do not have a figure? As I understood it, earlier this month you
had written to the LEAs asking them for these figures and about
one-third had responded up to the point when this was discussed
in Parliament. Surely, three weeks later, you have got responses
from all of them, and you have got some sort of figure of your
own rather than relying on the teacher unions?
Mr Normington: Many were not sure
and still are not sure because many are trying to avoid redundancies,
so many of the responses said "We don't know because our
aim is to minimise them and to reduce them school-by-school to
a very small number, so we don't have an accurate figure."
Mr Crowne: That is absolutely
right. It is a combination of schools still thinking about the
shape of their provision for the next year, driven by budgets
and also by other things. Quite a large number of authorities
are still working on their budgets. There are other pressures
in the system which will tend to increase or decrease the number
of teachers and other staff in schools. We are in a period, as
you know, of substantial falling rolls in primary now, which will
tend to cause more turbulence in the system. So I think any survey
you take is only a snapshot at that moment in time, and the idea
of getting a definitive figure which sums up a one-year position
is extremely difficult. I have talked to a lot of local authorities
about this and they are all determined to ensure that they are
managing the workforce implications as effectively as they can
in the local circumstances. I think that is a great credit to
local authorities and schools.
Q53 Paul Holmes: Surely, if there
is a deadline by which you must issue a redundancy notice—
Mr Normington: Yes, that has passed.
Q54 Paul Holmes: That has passed.
Surely, you should therefore be able to easily place the figures.
OK, that might change because over six or seven weeks circumstances
change within the schools and so on, but you must surely be able
to have a very clear figure of how many redundancy notices—
Mr Crowne: Without a special exercise
we cannot be definitive about that, but all the indications are,
from earlier informal responses from local authorities, that the
actual number of compulsory redundancies is not out of line with
the figures that NASWT published earlier. We have not done a special
exercise to try and ensure that in every local authority we have
a complete picture of every compulsory redundancy.
Q55 Paul Holmes: Are you saying that
you did not write earlier this month to all the local authorities
asking for these figures?
Mr Crowne: We are in constant
contact with local authorities to collect information about workforce
implications and other things that are going on. The way we have
worked with local authorities is to try and identify those areas
where we think there are particular problems and then go and talk
to them about how they are handling those and what additional
support we can provide. It is a better use of our time than to
try and get from over 150 local authorities a complete and updated
picture. We are trying to pick off and work closely with those
authorities who appear to be facing these difficulties.
Mr Normington: So, for instance,
Manchester this week has just decided to put £3 million more
into their schools. Not, I think, because we have been talking
to them but because of the result of looking at what their local
position is, so it is changing all the time. Authorities are trying
to tackle the issues school-by-school.
Q56 Paul Holmes: I am still not clear.
Did you or did you not earlier this month write to all LEAs and
ask them for this information?
Mr Crowne: Yes, we did. We were
collecting information on the way the budget-setting process was
going and what they thought, at that stage, were likely to be
the implications for the workforce. However, bear in mind that
I was asking for the opinion of the chief education officer on
the basis of the information that he or she currently had. That
can only be a judgment at that stage. Until a formal decision
about a redundancy is made, you do not know whether it is going
to be made. A lot of protective redundancy notices are used to
cover possible eventualities. That is why looking at protective
notices is always a bit misleading. In our experience there are
always more protective notices than there are actual redundancies.
Q57 Paul Holmes: It may be misleading,
but are you saying that the DfES does not actually have the figures
of how many redundancy notices have been issued by the deadline?
Mr Crowne: We do not have a complete
set of information coming from a local authority at a particular
point in time, which is I think the only piece of information
that we could say actually meant something. The reason we cannot
do that is because local authorities are still working with schools
on the implications of their budgets for the current year, and
I think it would be misleading of us to try and pick a moment
and say that that is the position of the year, because we know
that some authorities and some schools are not at that position.
Q58 Paul Holmes: It might be thought
that a failure to either (a) collect that information or (b) tell
us what it is is misleading as well, and therefore any pronouncements
that were given to the Department as to the situation being better
or worse or not as bad as people say—how can we judge if
you do not actually give us the figures?
Mr Crowne: What I am saying is
that our priority has been to work with those local authorities
which are facing some of the biggest challenges and to try and
help them through those difficulties. So it is about prioritisation
and it is about focusing our effort on where we think it will
make the most difference. I think that approach has been warmly
welcomed by local authorities.
Mr Normington: I do not want to
put another figure equally distant from the facts into the public
domain. What we are trying to do is to sort out with local authorities
their difficulties. I just do not think it helps for us to have
another figure. What we do know is that some local authorities
are talking to us about their difficulties and we are trying to
minimise the numbers. I think actual redundancies as a result
of these funding reductions will be quite a small number at the
end of this process, but I do not want to put another figure in
because we do not have up-to-date information. It would be just
as difficult to justify as any of the other figures that, from
Easter onwards, there have been on a regular basis—each
one slightly lower than the one before.
Q59 Paul Holmes: Since you will not
give us any figures now I will be interested to see your response
to the Parliamentary question I will put this afternoon on this
issue. Moving on to the later issue, equally the confusion on
the announcements of figures and so forth, we were given the impression
a few weeks ago that—although you say it was not the impression
that was meant to be given—local authorities were to blame
for not passporting on all the money. Can you tell us exactly
how many local authorities did not passport all the money across
that they were supposed to?
Mr Normington: It is 11.
7 Note by witness: The 3.2% was set leaving
aside the additional costs of pensions and the ending of some
Standard Fund grants. Back
8
Note by witness: The confusion was about how the pensions
money and the Standards Fund were treated. Back
9
Note by witness: The settlement figure for next year is
2.6% real terms and £1.4 billion. Back
| 
