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Education Funding (East Riding of Yorkshire)

12.30 pm

Mr. Graham Stuart (Beverley and Holderness) (Con): This is a fairly sparsely-attended debate, but the issues that it deals with are none the less extremely important. I shall talk a little about the state of education in the East Riding of Yorkshire and the funding of that education system. I shall then specifically address the issue of the F40 model, which is a mechanism by which the Government can better target funding at those most in need and ensure that they receive the correct funding.

The East Riding of Yorkshire has undergone great improvements in the past few years. In 2004, at key stage 2, 83 per cent. of its pupils achieved level 4 or above in English, which represents a considerable increase on the figure a number of years before. In maths, the relevant figures were 78 per cent. in 2004 and 79 per cent. in 2005. Both are above the national average. At key stage 2, East Riding schools are joint 25th nationally.

Likewise, at key stage 3, there has been a significant improvement and, given the funding, an outstanding performance on the part of staff. By 2004, 77 per cent. of pupils at key stage 3 had reached level 5 or above in English. The figure rose to 79 per cent. in 2005. In maths, the corresponding figure was 79 per cent. in 2004. It dropped slightly to 78 per cent. in 2005. Both results are also above the national average.

East Riding schools were 17th in the national GCSE performance tables in 2005, which was an improvement on 69th in 2004, and 61 per cent. of their students achieved five or more A to C grades. By contrast, the national figure was just 54 per cent. Four East Riding schools have this year been recognised in the national league table for the most improved state secondaries, according to the proportion of pupils gaining five A to C grades.

I want to highlight the performance of Beverley high school, which is the top performing state school in the East Riding at GCSE—some 80 per cent. of its students achieve five A to C grades. We are talking about a comprehensive school achieving that high level. Indeed, 15 of the East Riding's 18 secondary schools achieved improved GCSE results in 2005.

At A-level, East Riding schools were 56th in the national league tables in 2005. The improvement over recent years in the East Riding, despite the lack of funding, has been enormous, and it is gratifying to comment on it. I congratulate the head teachers and staff of the schools in the East Riding on their performance. I also pay tribute to the inspirational leadership in the local authority of John Mager, who is the director of education. I am unsure whether he is leaving the local authority today, but some time soon he will do so. He has done an excellent job. The political leadership of Councillor Penny Peacock has also made a big contribution.

Great improvements have been made, but what could the schools in the East Riding of Yorkshire have achieved if they had received a fairer share? There could have been more teachers, support staff, textbooks and equipment. East Riding schools have consistently received funding that falls behind both the national average and that given to the best-funded authorities.
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The Minister will know all about the F40 group of poorly-funded local education authorities, of which the East Riding is a member. Those authorities represent almost 16 million people in more than 200 parliamentary constituencies. Research on the national funding arrangements over the past years reveals some stark facts concerning the funding allocations to the F40 authorities. I hope the Minister will respond on that. Between 1997–98 and 2005–06, there has been no real change in the spread among the F40 group of authorities in respect of the difference among that group between the amounts that the highest and lowest-allocated authorities receive.

As the Minister will be aware, during the past eight years, the cash gap between the best and worst authorities nationally has widened. The figure is £620 per pupil, even though most commentators already felt that the disparity was too great between the best-funded and the worst-funded authorities. And yet, the effect of Government policy and formulation has been to exacerbate that situation.

Let us consider how schools in neighbouring Hull compare with those in Holderness in my constituency in 2005–06. Bilton primary school received £2,458 per pupil whereas Wansbeck primary received £2,922 per pupil. Those schools are less than a mile apart. I hope that the Minister will respond favourably on those questions today and suggest that he, at least, shares my ambition, and that of many other MPs who represent F40 authorities, that the gap should be closed.

Parents and pupils in the East Riding had high hopes for the new funding arrangements for 2006–07 and 2007–08, but the dedicated schools grant, which comes into effect next month, has not been kind to them. The two-year settlement, beginning in April, has a baseline figure for the East Riding of Yorkshire of £3,117 per pupil. In 2006–07, the figure will be £3,322, which represents a 6.6 per cent. increase. Some 6.9 per cent. of that figure will be allocated on the basis of deprivation.

The East Riding of Yorkshire is the fourth-worst-funded education authority in the country. In 2006–07, Hull will receive £3,738 per pupil whereas the City of London will receive £6,708 per pupil, which is more than double the East Riding of Yorkshire's allocation.

The situation is indefensible and should already have been addressed, yet it is getting worse. In 2007–08, the East Riding will receive £3,535 per pupil, which represents an increase of 6.4 per cent. Such increases are below the national and regional averages. Unbelievably, the national increase in 2006–07 will be 6.8 per cent., but the East Riding will receive less than that, and in the following year the gap will further widen between the East Riding of Yorkshire and the national average.

The East Riding local education authority has not stood idly by while this has happened. Led by John Mager, it has helped to devise the F40 pupil entitlement model. It is a new funding model for determining the needs of individual education authorities and schools, and it is targeted on the pupil. The calculations are based on needs-based funding—what it costs to run a school.

I am sure that the Minister and his colleagues know all about the F40 group and the funding model. The group was pleased that civil servants came to examine
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the model and found that it was not designed primarily to address overall funding. It is not a completely different model of funding across the UK, but it shows that by using index of multiple deprivation data and education data it is possible, within the education management system, to attach a deprivation score to each child using a home postcode.

Using that model, it is possible to pick up in particular the current injustice whereby thousands of pupils leave Hull to come to the East Riding to be educated. Many of them come from some of the most deprived wards in the country. When they come to be educated in the East Riding and East Riding schools seek to provide them with the additional support that they rightly expect, the money does not transfer with them. The F40 model would allow that.

The East Riding spends more on schools than the amount allocated to it by the Government. It is rare among local authorities to have that happen, but, despite low funding overall, such is the commitment of the political leadership of the East Riding that it has found extra money to put into schools and, as I have explained, shown that that extra money converts into improvement and genuine delivery for pupils across the area.

The East Riding is suffering because multiple aspects of the system put it at a disadvantage. Although it is right that deprivation funding should go to those in the most deprived areas, the truth is that rural areas rarely manage to command the statistical basis for that much support. The allocation of funding according to where pupils live, rather than where they are educated, compounds the injustice. There are 2,665 pupils in residence at schools in the East Riding who live in other local authorities. As John Mager said:

Funding allocated to the East Riding for deprivation is below the national average. Hull is allocated 14.7 per cent. of funding for deprivation. It has problems with social deprivation and it is right that additional funding is allocated to its schools, but the East Riding has deprivation of its own. The Ofsted report on the local education authority of January 2004 said:

Bridlington South, Bridlington Old Town, Bridlington North, Goole and South-East Holderness are among the 33 per cent. most deprived wards in the country. Household income is below the national average.

Tellingly, a recent survey undertaken for an obesity project in the East Riding revealed that 70 per cent. of children in Withernsea had a low body mass index, indicating under-nourishment. That highlights the unfairness of funding based on a local authority border rather than on the child.

Rural areas are losing out and Government cash has been targeted on cities. John Dunford, general secretary of the Association of School and College Leaders, said:
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That quotation, which is recent, sums up the injustice of the system.

John Wilson, head teacher of Market Weighton school in the East Riding, said:

The East Riding of Yorkshire council has brought significant improvements to its education, thanks to the hard work of many people, the pupils, the support of their parents and all the staff throughout the local authority. None the less, the gap between the East Riding and the best-funded authorities in the country continues to grow. In the F40 entitlement model, even before the reassessment of the overall funding, we have a tool that can allow money to follow the pupil, allow parents to exercise choice and ensure that support is provided to the most deprived in our society.

I urge the Minister to acknowledge that the East Riding has performed extraordinarily well on limited resources. I also urge him to consider carefully the situation in the East Riding and other poorly-funded local authorities, and to take that on board when reviewing the arrangements that are in place for 2006–07 and 2007–08 before deciding on a permanent model from 2008 onwards. I hope that we get a sympathetic response from him today.

12.45 pm

The Parliamentary Under-Secretary of State for Education and Skills (Phil Hope) : Mr. Cummings, may I say first what a pleasure it is to be under your stewardship for the first time as a Minister? I am glad to have that opportunity.

I congratulate the hon. Member for Beverley and Holderness (Mr. Stuart) on securing this important debate and very much welcome his description of the educational success in the East Riding of Yorkshire. I note his concerns about education funding—I shall say more about that in a moment—and thank him very much for his comments on the F40 model and the work the Department is doing in talking to that group of authorities about their proposals.

I would like to respond to the hon. Gentleman by putting on record my gratitude for the work of teachers and pupils in the East Riding, who have been responsible, as he so eloquently described, for significant improvements in the quality of education in the county. I have a few of my own notes to add to the statistics he cited. At key stages 1 to 3, East Riding is exceeding the national average in all subjects, which is quite an achievement. For example, the number of pupils achieving level 5 in key stage 3 science and English is five percentage points above the national average.
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The improvement since 1997, when the Government came to power, is impressive. For example, the number of pupils achieving level 4 or above in key stage 2 English is up 17 percentage points to 83 per cent., which the hon. Gentleman mentioned. The number of 15-year-old pupils in the East Riding achieving five or more A* to C grades at GCSE or equivalent is up by nearly 17 percentage points since 1997. Those quite impressive changes have happened during the past eight or nine years.

The changes genuinely reflect the hard work of teachers in the county. I am pleased to say that East Riding has nearly 12 per cent. more teachers than in January 1997 and almost 160 per cent. more teaching assistants. In both cases, the increase is well above the national average of 8 and 142 per cent. respectively.

Mr. Stuart : Those statistics are indeed extremely positive, but why is it necessary for the East Riding of Yorkshire council to find additional sums itself from very limited funds? The political leadership locally is the prime cause of those increased standards.

Phil Hope : The hon. Gentleman's intervention takes me on to the exact point I was going to discuss: the funding of education in the East Riding of Yorkshire. It is worth reflecting on the increases in funding in the East Riding since the Government came to power. The tremendous achievement that he and I have described today has happened because of, not despite, the record investment in education funding in the East Riding of Yorkshire.

If you will forgive me, Mr. Cummings, I have to say that that funding stands in stark contrast to the investment made by the Conservative party when it was in power, and in stark contrast to the platform that the hon. Gentleman stood on less than 10 months ago, which would have cut public spending by £30 billion.

Since 1997–98, revenue funding in the East Riding has increased in real terms by £1,080 per pupil—an increase of 40 per cent. in real terms, which equals the national average percentage increase. That record 40 per cent. real-terms increase might also have had something to do with the record achievements by teachers and pupils in the East Riding.

Mr. Stuart : I want to take issue with the Minister's introducing party politics to the debate, and particularly his producing a completely specious figure of £30 billion in cuts, which he knows was not in the Conservative manifesto. New Labour's continual desire to say things that it knows to be untrue does not greatly credit the Minister or the Government whose members he serves.

Phil Hope : We may have to agree to disagree, but the hon. Gentleman has come to the House on behalf of his party to plead for more resources for his constituency—an entirely understandable and appropriate thing to do. It is also appropriate and entirely right for a Minister to point out that when the hon. Gentleman does so, he contradicts the platform on which he stood.

Mr. Stuart : That is not true.

John Cummings (in the Chair): Order.
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Phil Hope : Capital spending on school buildings in the county has also increased dramatically from £1.3 million in 1997–98 to almost £15 million in 2007–08. That is a more than elevenfold increase.

I listened carefully to the concerns that the hon. Gentleman raised about funding for the East Riding compared with that for other areas of the country. Whether we wish to agree or disagree about the overall funding of education as between his party and mine, we recognise that there are concerns about the allocation of that funding. Some argue that funding per pupil should be more or less the same across the country, and I got that feeling from the hon. Gentleman's contribution. I want to explain why it is not the same.

The Government aim to give all pupils an equal opportunity in life. Pupils from more deprived backgrounds are likely to have additional educational needs and to require additional help if they are to have an equal chance to succeed. That is why in the current formula funding system, on top of the basic entitlement, we provide additional funding to authorities with higher numbers of pupils from deprived backgrounds. If I heard the hon. Gentleman right, he said that he understands and supports the principle that those pupils in greatest need should be given the greatest support.

The main reason for the East Riding receiving less funding per pupil than other areas is that it has fewer pupils from deprived backgrounds than many other authorities. The hon. Gentleman referred to Hull, the neighbouring authority to his own. Just below 12 per cent. of pupils in the East Riding come from families on income support. The national average is about 19 per cent.

There is also extra funding for authorities in high-cost areas, because schools in those areas find it more difficult to recruit and retain teachers and other school staff. It is worth noting that the teacher vacancy rate in the East Riding is 0.3 per cent. compared with the average of 0.6 per cent. The council's own website says:

That is why the formula works as it does.

The hon. Gentleman mentioned the rural nature of his county and constituency, and the formula funding arrangements give extra funding to sparsely populated authorities such as the East Riding, where there are many small village schools that are more expensive to run. The formula recognises the circumstances that he describes.

That is the situation, but the hon. Gentleman might know that, from the beginning of April, we are making some important changes to the school funding arrangements. They are designed to ensure that the money meant for schools reaches them in every area of the country and gives head teachers and governors funding stability and certainty, so that they can make better plans. Those key benefits will be delivered through multi-year budgets for schools, backed by the dedicated schools grant, or DSG. The DSG is a new ring-fenced grant from the Department for Education and Skills to each local authority, covering funding for schools and other provision for pupils.
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In spring last year, we consulted widely on the new school funding arrangements, including our proposals for distributing the DSG between authorities, but schools and authorities in areas that spend more than their formula funding allocation—a situation that the hon. Gentleman described in relation to the East Riding of Yorkshire—told us of their concerns about our proposals.

Those schools and authorities were worried that, were we to pursue that course of action, over time their relative funding would be reduced. The East Riding is such an area, demonstrating, as the hon. Gentleman said, the priority that the council, as well as the Government, gives to schools in his area.

We listened carefully to those concerns, and during the summer last year we consulted again on a modified DSG distribution method that put stability at the heart of local authority funding allocations. A majority of the people who responded to the new consultation supported the modified method, as did the East Riding of Yorkshire council, I am pleased to say. That is what we will use to distribute the DSG in 2006–07 and 2007–08.

I shall describe how the DSG distribution will work for the next two years. We will take each authority's existing spending on the schools' budget as the starting point, give every authority an increase of at least 5 per cent. per pupil over the current spending in each year, and then distribute the remaining grant according to the Government's priorities for education.

Those priorities include personalised learning at key stage 3 and in primary schools; the provision of more practical learning options for pupils in key stage 4; the full-year cost of implementing time for PPA—planning, preparation and assessment—in primary schools; and the cost of the increased entitlement to free early years provision, from 33 to 38 weeks.

I want to stress that, although we have earmarked sums for those priorities within each authority's DSG allocation for each year, decisions about the distribution of funding between schools continue to be for local authorities, in consultation with their school forums.

What does the school funding settlement mean for the schools of the East Riding of Yorkshire? I am pleased to say that the county can expect an increase in DSG over current spending of no less than 6.6 per cent. per pupil in 2006–07, with a further increase in 2007–08 of 6.4 per cent. per pupil. Over the two years, that represents an increase of 13.4 per cent. per pupil. The hon. Gentleman described that as modest; I would describe it as generous.

Mr. Stuart : Will the Minister be so kind as to deal with a direct point? The difference between the highest and lowest-funded authorities in the country is growing. Does he really support that? Some local authorities have very high school balances and do not use the money that they are allocated. There is no difficulty between us on the principle of supporting deprived areas, but the gap between the highest and lowest-funded is growing, and rurality and other issues are not being covered properly.

Phil Hope : I understand the hon. Gentleman's point; he has made it before. All I pointed out to him was the fact that, whatever his views on how much other
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authorities receive—I understand his concerns about that—his authority will receive, over two years, a 13.4 per cent. per pupil increase. As I said, that is hardly modest. It builds on the spectacular increase in revenue and capital investment during the past eight or nine years, which has led to the spectacular results and achievements on which we have remarked in this debate.

The settlement is good for East Riding schools and good for schools throughout the country. It combines clarity on the Government's priorities for school funding with flexibility for local authorities and school forums over how they respond to those priorities. Most importantly, however, it means that, for the first time, schools throughout the country will know their budgets for more than one year ahead, enabling them to plan with confidence in support of school improvement.

The hon. Gentleman mentioned the F40 group, which relates to the funding model that the East Riding of Yorkshire council is developing, supported by the wider F40 group of authorities. During recent months, the group has made useful presentations on the model to my right hon. Friend the Minister for Schools, 14–19 Learning and officials from my Department. We will continue to listen to the F40 group's views on school funding and we will be interested to see how the F40 funding model develops. Indeed, our joint head of school funding spoke at the F40 group's national conference earlier this month.

The F40 model is designed in particular to help in the distribution of funding between schools. One issue when considering it is whether it could be successfully adapted for national distribution between local authorities. That is the discussion we will have.

We have heard about the record number of teaching and support staff in the East Riding of Yorkshire and about the record investment in education. That has led to record achievement. I repeat my thanks to the hon. Gentleman for raising these issues and congratulate the teachers and pupils in his constituency who are doing so much to improve the quality of life for families and people in his area.

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