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Session 2004 - 05 Publications on the internet Standing Committee Debates |
Second Standing Committee on Delegated Legislation |
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Column Number: 1 Second Standing Committee on Delegated LegislationThe Committee consisted of the following Members: Chairman: †Janet Anderson †Allen, Mr. Graham (Nottingham, North) (Lab)Atkinson, Mr. Peter (Hexham) (Con) Brooke, Mrs. Annette L. (Mid-Dorset and North Poole) (LD) †Dhanda, Mr. Parmjit (Gloucester) (Lab) †Dowd, Jim (Lewisham, West) (Lab) Follett, Barbara (Stevenage) (Lab) †Humble, Mrs. Joan (Blackpool, North and Fleetwood) (Lab) Johnson, Mr. Boris (Henley) (Con) †Khabra, Mr. Piara S. (Ealing, Southall) (Lab) Lilley, Mr. Peter (Hitchin and Harpenden) (Con) †Merron, Gillian (Lincoln) (Lab) †Pugh, Dr. John (Southport) (LD) †Ross, Mr. Ernie (Dundee, West) (Lab) †Twigg, Mr. Stephen (Minister for School Standards) †Watkinson, Angela (Upminster) (Con) †Wright, Iain (Hartlepool) (Lab) Alan Sandall, Committee Clerk † attended the Committee Column Number: 3 Monday 28 February 2005[Janet Anderson in the Chair]Financing of Maintained Schools (England) Regulations 20044.30 pmAngela Watkinson (Upminster) (Con): I beg to move,
The Chairman: With this it will be convenient to consider the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2004 (S.I. 2004, No. 3131). Angela Watkinson: It is a pleasure to serve under your chairmanship, Mrs. Anderson. Paragraph 2.1 of the explanatory memorandum states:
A particular concern of the Opposition is the feedback that we have received from primary schools about the provision of 10 per cent. non-contact time, which is hugely popular among teachers. It is very much welcomed and is used for planning and lesson preparation, but it has caused budget management problems for schools. Primary schools, particularly the small ones and those with falling rolls, have said that they are finding it difficult to fund that time. Will the Minister say what allowances will be made within the 5 per cent. increase that is specifically to fund it? The formula entrenches centralised funding for schools in that it fixes the floor—the minimum funding increase that primary schools will receive. That reduces the flexibility of that funding model. Will the Minister say what flexibility there is under this year’s financial settlement for LEAs and the Office of the Deputy Prime Minister’s cap on council tax increases for LEA schools forums to change the funding formula and provide the minimum increase in budgets? The Education and Skills Committee criticised the fact that the Department for Education and Skills made the original changes to the funding formula without detailed knowledge of how they would affect
Paragraph 2.2 of the explanatory memorandum states:
The financing of maintained schools regulations mean that there is a limit to the growth of central expenditure—that is, the money taken out of schools’ budgets and spent by the LEA. The percentage growth in central expenditure cannot exceed the growth in the budget of the overall schools budget. Schedule 3 lists the expenditure headings that the LEA can take out of the schools budget. The Opposition are concerned as to the extent to which the control of the growth of the central budget limits provision for special educational needs at the centre. If the reason for imposing the increase on the central budget is the growth in SEN cost, that pressure to constrain costs could prevent LEAs from meeting SEN demands. Can the Minister tell us how many LEAs have requested a variation in the limit on growth and how many of those requests have been allowed? Our concern in respect of SEN is that schedule 1 lists classes or descriptions of planned expenditure prescribed for the purposes of the LEA budget of a local education authority, but in schedule 3 there is a degree of flexibility—items are listed that “may” be provided for, but not necessarily. Paragraph 5 makes this reference:
that have been set aside for that purpose. Paragraph 6 relates to the
where it is significantly greater than
Our concern with that is that there could be a serious squeeze on out-of-county placements. We know that, wherever possible, LEAs avoid out-of-county placements—they are hugely expensive—and make provision for pupils within their boundaries. However,
Paragraph 11 makes this reference:
That is an expanding area and we are concerned with the limit on moneys that might be transferred from schools’ budgets to the centre. Providing for children with behavioural difficulties might cause a squeeze on maintained schools. I shall conclude on that point, but I might say a little more later. 4.38 pmDr. John Pugh (Southport) (LD): May I congratulate Mr. Moss of the DFES, who has done everything to discourage us from asking questions about these statutory instruments? In the explanatory notes, I came across this item:
They continue:
Just to reassure us, at the end of the day, they say:
So, this is clearly extraordinarily uncontentious legislation. None the less, there are some important issues within it. Both statutory instruments concern the financing of practically every school in the country. In particular, they feature changes to how the minimum funding guarantee applies. That is important. We all accept that the minimum funding guarantee evolved, as much as anything, to give schools the reassurance that money allocated to them by the Government would find its way into their budgets. However, everybody also accepts that the mechanism that the Government adopted is not without complication. To some extent, it is a fairly crude instrument. I shall be interested to know what the Minister has to say about the changes to the minimum funding guarantee. When the Audit Commission surveyed it, it said:
but it continued:
It went on to say:
A later section describes the position in relation to schools’ balances, which, in many cases, are substantial. In other words, the Audit Commission does not give an unblemished clean bill of health to the minimum funding guarantee. I want to reinforce that with a bit
Such an effect has certainly been manifest in my local authority, which under the Government’s regulations allows for turnover and reduction in budget shares. Were the minimum funding guarantee to come in prior to the local authority’s guarantee, the situation would obviously be different. I would be interested to hear how the minimum funding guarantee, to which I do not object in principle, is sophisticated enough to take into account local circumstances, particularly when rolls fall dramatically and schools find that their per capita funding rises incrementally, which is not the intended effect. I think that I am the only survivor present from the debate on these statutory instruments last year, when a number of fascinating algebraic formulae enabled us to establish how schools got the money that they did. I made some efforts to comprehend those formulae—it took me a long time, a pen and a pencil, and a lot of paper. I notice that this year the formula appears on the face of it—I am relying on my own recollection—to be relatively simple. Essentially, one has to take last year’s sum and subtract the adjusted mean budget share multiplied by a factor of 0.84 for primary schools and 0.91 for secondary. At first flush, that seems a little better, a little more sophisticated and less likely to generate some of the problems that there have been with the minimum funding guarantee. If the Minister can stand up and say that I am right in thinking that, I will feel deeply reassured, as I am sure will a number of directors of education and individual schools. I want to press the Minister on another issue. There is an awful lot in the regulations about what a local authority may do and what it might subtract from a school’s budget concerning behaviour, which is a major political issue on everybody’s agenda. I recognise that and I can see all sorts of references in the regulations—in schedule 1, which relates to regulation 4; in paragraph 6 of that schedule, which talks about reviewing school development plans; in paragraph 10, which talks about authorities’ education plans; and in paragraph 11 of schedule 3—to how a local authority can use finances constructively and helpfully to deal with the behavioural problems that occur in schools. However, we must all recognise that where a school significantly fails in terms of guaranteeing appropriate behaviour—living up to their own standards, in other words—local authorities play a significant role. They
Finally, to satisfy my own curiosity, I want to deal with a couple of residual issues. I would like clarification of paragraph 32 of schedule 3 to the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2004, which allows the local authority to keep back expenditure
I stand to be corrected, but I understand that to mean that the provision enables local authorities to keep a sum as a contingency, in reserve, to deal with the unexpected. I would like the Minister to clarify how large a contingency sum the local authority could decide on, or what would be reasonable. Clearly, the one thing we do not expect is the unexpected. In many areas, there is a process under way of sophisticating their own systems for devolving powers to schools and disbursing the money according to a fixed formula. The regulations contain many “mays”—things that can be taken into account. Therefore, local authority systems will vary considerably between different boroughs. My borough is revising its formulae extensively to take current circumstances into account. The one fundamental—the one fixed item—that the Government seem to require in all formulae, however they are put forward by local authorities, is that something in the budget share must allow for or take account of social deprivation. However, a lot of local authorities give allowances for infant class size, while others give allowances for ghost pupils and so on. I want to press the Minister on whether any other fixed items are obligatory. As to the future, interestingly enough, the Government’s consultation document on school budgets, which was issued quite recently, refers to the current arrangements as a two-year package. I always thought that that is what they were, but, when pressed on the point a year or so ago, the Minister’s predecessor was not prepared to acknowledge it. I have no difficulty with that, but perhaps I can tempt the Minister to say a little more about what lies beyond that two-year package, and specifically about an issue that affects many local authorities. The consultation document differentiates between authorities that already fund schools above their formula spending share and those that do not. There
When studying the consultation document, I could not rid myself of a suspicion—it is only that at this stage—that the local authorities that have provided funding above the level required by the Government and asked local taxpayers to pay a little more will do less well in pure financial terms, in the end, than the authorities that have been slightly meaner-minded and provided funding at the level required by the Government, troubling the local taxpayers less. That issue will arise for many local authorities, and I think we will all be interested in the Minister’s comments. 4.49 pmMr. Graham Allen (Nottingham, North) (Lab): It is a great pleasure to serve under your chairmanship in Committee, Mrs. Anderson. We are a bit embarrassed as politicians to put thanks on the record, but that is why I am on my feet now. The effort made by the education team—the Minister and his colleagues—to produce an impact in my constituency has been immense. It has made a significant difference to the lives of young people there. If I may be allowed a general comment, the White Paper on 14 to 19-year-olds, the recommitment to the new deal and the increase in the minimum wage—all have happened this week—are tremendous developments for my constituents. It is no secret, because I have made a point of saying so on the Floor of the House over and over again, that Nottingham, North sends fewer young people to university than any other UK constituency. The regulations will help those young people to break out of that mould, because they will give them the resources to make the best of themselves. That is another reason why I am grateful. I asked my local authority whether it has any problems with the regulations. I expected to receive a ream of material, with detailed analysis and questions, but I simply received a letter saying that
We all find difficulties in even the best legislation, but the local authority in Nottingham has been generous in stating the impact of this settlement on youngsters in my constituency. My local authority raised one query, and I have a couple of specific queries for the Minister on the regulations. The authority asked about the contention between guaranteed funding for schools and authorities being able to react to local issues within the regulations. I know that that concerns the Minister. I was given this example: my LEA wants to put more money through the formula to help schools that suffer from acute mobility issues—the difficulties caused by lots of admissions at non-standard entry points. The minimum funding guarantee in regulation 15 makes it difficult to do that and to get money where it needs to go: it is difficult to do anything redistributive because the MFG still has to be met for any school that is
Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): Is my hon. Friend aware of the excellent report on pupil mobility recently produced by Dr. Janet Dobson? In the report, she focuses on three local education authorities—two of which are in London, with the third in Blackpool—and addresses the very issue that he raises; pupil mobility and its resource implications. Will he look at the report, which adds weight to his argument? I hope that the Minister will also look at the report. Mr. Allen: As always, I am pleased to take the steer from my hon. Friend, who has experience in this area, and to pass her advice to my hon. Friend the Minister, who I know takes such issues seriously. The DFES could say that authorities will be able to apply for dispensations under regulation 28, but, of course, there is no guarantee of success. I should like the Minister to consider three specific points. I e-mailed them to Twigg@DFES, but have just discovered that that is the wrong Twigg; I hope that the Minister will write to me on this matter. There is excellent reference in the document to SEN and English as a foreign language, but I saw nothing in it about Travellers, who cause a particular problem in my constituency, which is close to the M1 and has educational and other difficulties with Travellers that I will not go into today. I should like to know how joined up the financial arrangements in the statutory instrument are for extended, or wraparound, schools, and children’s centres. Do they have joint working spaces, for example? It is important that such things are pulled together. I know that everything cannot be included in the statutory instrument, but will my hon. Friend the Minister drop me a line on that? Finally, primary schools now place great stress on the devotion of 10 per cent. of teacher time to planning, preparation and assessment. That creates certain difficulties for the schools, of which the Minister is well aware. They need teacher cover—not just teacher assistant cover— to ensure that the curriculum is dealt with properly, and there is no reference as to how that might best be funded. Having put those questions—not negative points—I should like to conclude where I started, with the financing of our schools. All Members, regardless of political persuasion, must give due credit to the Government. Over the last seven or eight years, they have wrought a real change, particularly in my constituency, which is at the wrong end of all the tables. All its schools have come out of special measures; £140 million has been allocated to building schools for the future; it has the possibility of two new academies. Just two weeks ago, I was fortunate enough to turn the first sod of a school, the first new one on my patch for 40 years. The Government’s policies are working very well and I am grateful for the way in
4.56 pmThe Minister for School Standards (Mr. Stephen Twigg): I join other Committee members in welcoming your chairmanship of the Committee, Mrs. Anderson. The focus for our discussion is the sets of regulations before us, but we have ranged rather more widely in respect of school funding. May I start by thanking my hon. Friend the Member for Nottingham, North (Mr. Allen) for placing what are, on paper, rather technical regulations into the broader context of education policy, and the impact that the additional investment—capital and revenue—is having on schools across the country? He is right to remind the Committee that that is having a particular impact on schools that serve some of the toughest and most challenging neighbourhoods. I make no apology for the fact that the Government have provided additional funds for some of the poorest communities, those that have in previous years been let down in terms of school funding. I want to respond to the points that have been raised during the debate. Both the hon. Member for Upminster (Angela Watkinson) and the hon. Member for Southport (Dr. Pugh) have set out what we are discussing; it is not necessary for me to repeat that. The regulations are now made annually in the form of two essential statutory instruments by which LEAs and schools are funded. These regulations relate to the financial year 2005–06 which is, as the hon. Member for Southport said, the second year of a two-year funding package that was announced by the then Secretary of State on 29 October 2003 and was designed to bring stability to school funding. Local education authorities up and down the land are busy finalising schools’ budgets for the coming financial year and I am sure, having heard today’s debate, that nobody on the Committee would wish us to tear up the rules at this stage; those budgets are arriving at schools as we speak. Let me address each set of regulations in turn. The LEA budget, schools budget and individual schools budget regulations are issued annually. Their main function is to set out the structure for categorising schools-related expenditure by LEAs, and they create the framework for an LEA budget and a schools budget. For the former, the items to be included are defined. They are mostly administrative costs, the costs of an LEA’s duty relating to school improvement and certain pupil-related services, most notably home-to-school transport. The schools budget covers school-level and LEA-level expenditure on pupil provision. The categories of expenditure that can be retained centrally are defined in the regulations. Those funds in the schools budget that are not centrally retained form the individual schools budget, which is the total sum divided among schools and delegated to them in budget shares. The individual schools budget is by far the largest part of
The regulations for 2005–06 continue to include a new limit on the central spend in the schools budget; a limit that was introduced into the regulations a year ago. That limit restricts any increase in central spending in 2004–05 to the amount by which the schools’ delegated budgets was increased. It is a slight simplification compared with last year, as the hon. Member for Southport said, when the increase in grant funding was also taken into account, but it does not alter the fundamental principle of linking the increases in funding in schools to those in the LEA. This aspect of the regulations reflects our expectation that LEAs will be able to keep central budget increases down to the same level as schools’ own budget increases. When we introduced the limit, we made it clear that there is flexibility and that we would, in exceptional circumstances, approve exemptions from that limit. Last year, we agreed 23 applications for exemption in 2004–05. So far this year, I have agreed to 12 exemptions, and there are 10 outstanding requests. That makes a figure similar to last year’s. The hon. Member for Upminster asked about that flexibility, and she is absolutely right; we do want to combine the certainty and stability for schools, which was the reason for the package, with flexibility that allows for recognition of particular circumstances in different parts of the country. That is also why we ask schools forums to have a direct and active input into this process. The schools forum must consider a request for a higher limit if a local authority wants one. We are putting schools’ own budgets first, but we recognise that different communities have different financial pressures, and the hon. Lady is right to highlight special educational needs in general. She also mentioned out-of-county placements and, more broadly, support for behaviour. Those are precisely the sorts of exemptions that authorities sought from us last year and are proposing again this year. Provided that there is support for such exemptions at local level, the Department is exhibiting the flexibility that the hon. Members for Upminster and for Southport have urged us to provide. |
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