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Mr. McFadden: The hon. Gentleman says that he welcomes the new investment in education. Will he clear up the Conservative party's position on the goal of matching investment per pupil in the state sector with investment in the private sector? Does he support that?
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Mr. Willetts: Yes, I will turn to that in a moment. I shall try to go through all the different announcements that we have had from the Chancellor and the Secretary of State for Education and Skills and clarify what each of them means.

First, there is the increase in expenditure next year. Although this was not said by the Chancellor in the House, the Red Book says, and the Secretary of State confirmed just now, that the additional resources of £220 million and £365 million are

How will the Secretary of State ensure that that money is spent on personalisation? Will she put conditions on it? What if a head teacher who receives the money decides that there is another priority for his or her school? Will the Secretary of State require the money to be spent on personalisation, and if so, how is she going to do that?

For Budget after Budget we have had announcements of specific pots of money attached to specific purposes, but never an explanation of why the priority in question has been chosen. I remember, for example, the Chancellor announcing in the 1999 Budget debate £2,000 for every school to buy books, saying that it would lead to a total of 10 million new books in all. I never knew how the Department was going to ensure that those 10 million new books arrived. I do not know whether it set any conditions or followed the matter up. I would just like to know from the Secretary of State exactly how she is going to ensure that this money is spent on personalisation, or whether this is a pretence in which we are all supposed to share, whereas in reality it is a cheque for the school—and a good thing, too—but nobody will inquire how the head teacher has spent the money. Conservative Members trust head teachers, and we have no desire to set conditions on the money that will go to schools as a result of this announcement.

Mr. Bernard Jenkin (North Essex) (Con): I congratulate my hon. Friend on the fact that from where I sit, the Secretary of State appears a trifle rouged. Is not the whole point of trust schools the fact that they control their own resources, and should not be micro-managed by the Secretary of State? Will my hon. Friend endorse that point?

Mr. Willetts: I completely agree with my hon. Friend. Conservative Members trust schools—that is why we voted for trust schools, although of course it is a policy that dares not speak its name. It did not even appear in the Education and Inspections Bill, but anyway we backed it, because we believe in giving schools more freedom. If that is the philosophy that the Secretary of State claims she now believes in, why does she have to set conditions on the money that she is sending to schools? Is that consistent with the view of education that lies behind the Bill for which Conservative Members were happy to vote?

Several hon. Members rose—

Mr. Willetts: I had better give way to the Chairman of the Select Committee.

Mr. Sheerman: The hon. Gentleman trusts head teachers, and so do I, but we would both be concerned
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if there was not a balance in these matters and, for example, money flowing to schools for special educational needs was not used for that purpose.

Mr. Willetts: Yes, but I am trying to establish what conditions, if any, will be set. Head teachers around the country, who heard this announcement last week, would like to know how much flexibility they are to have in spending the money, and on that, I am afraid, Government Members remain silent.

Michael Connarty: I hope that the hon. Gentleman will clarify that point, because I am sure that the record will show that he has just contradicted himself. First he demanded of the Secretary of State the terms on which the money given for personalisation will be followed through and delivered, then he seemed to say to the hon. Member for North Essex (Mr. Jenkin) that he did not agree with personalisation and that the money should be spent in any way the head teacher wishes, not on personalisation. Is he for or against personalisation?

Mr. Willetts: Pay attention at the back of class! It is very simple: Conservative Members do not believe in attaching strings to the money. However, we particularly dislike fake announcements, such as when the Chancellor says, "I've got £2,000 for school books," or "I have £200 million for personalisation," and everybody is supposed to conspire in the pretence that the money has a special purpose, when the Department makes no effort whatever to set any conditions.

All I am trying to do, for the sake of establishing the position of head teachers throughout the country, is find out whether any conditions will really be set. I hope that they will not be, in which case the Secretary of State should stop pretending that this money is attached to whatever is the hot policy area of the moment. I hope that that is totally clear.

Peter Luff: I hope that my hon. Friend will not let the Secretary of State off the hook on this important point. Paragraph 6.58 of the Red Book talks about the money being targeted towards schools with "high levels of deprivation". If that is the mechanism used to distribute the funding, it looks as if it will contribute to the ever widening gap between schools in Worcestershire and schools in Birmingham, for example. We need an answer to that question.

Mr. Willetts: My hon. Friend is quite right. It would be helpful to have a bit more information about how the money is to be distributed and what conditions are to be set for it. We look forward to receiving that information as a matter of urgency. I had rather hoped that we would hear more about it today.

Mr. Chaytor: Will the hon. Gentleman give way?

Mr. Willetts: The hon. Gentleman is a member of the Select Committee, so I will give way to him and then try to make a little progress.

Mr. Chaytor: I am grateful. If the hon. Gentleman is so strong in his belief that head teachers need greater
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freedoms, how does he defend his policy on setting, whereby he insists on prescribing to head teachers exactly how they should organise the teaching in their schools?

Mr. Willetts: I thought that in all parts of the House there was some support for setting as part of what is called personalisation. I am asking whether the extra money that will go to schools is supposed to be spent on personalisation, and if the Government claim that it is for personalisation, how they will set conditions on how it is spent.

I turn now to the medium-term proposal on capital expenditure. We are a bit baffled as to exactly what is going on here. Perhaps the Secretary of State could help us. She was Economic Secretary to the Treasury, and before that an economics journalist, so if anybody can enlighten us, it is her. As I understand it, we have been told that we are to have a total of £34 billion of capital expenditure over five years, which we welcome. We have been told that the money will rise from £5.6 billion this year to £8 billion in five years, but for some reason we are not to be provided with the crucial information on how the money will be broken down over that period, which schools and people planning capital expenditure need if they are going to get proper value from it.

There are a limited number of ways in which one can spend sums that start at £5.6 billion, end up as £8 billion and add up to £34 billion, so why does the Secretary of State keep the House in suspense? Why does she not fill in the gaps, so that schools and people who wish to help finance capital spending in schools can do some serious planning? That would be very helpful for many people who care about the quality of education. Again, if she wishes to intervene, I would welcome further information.

The last of the Secretary of State's three announcements on spending is the figure for the long term—the proposals for increasing expenditure to reach the level in the private sector. When I heard the Chancellor announce that in his speech the other day, I thought that I had heard it before. Indeed, what do we find but that in 2001 the Prime Minister, speaking at the conference of the Association of Teachers and Lecturers, said that his aim was

When asked what that meant, a senior Government source—for all we know it was the hon. Member for Wolverhampton, South-East (Mr. McFadden), who I think was then one of these advisers, and an expert in the black arts—said:

In 2001 the gap in spending between the state sector and the private sector was approximately £2,000 per pupil a year. In the five years since the Prime Minister made that pledge, the gap has widened to £3,000. Now that the Chancellor has turned up and repeated what the Prime Minister said five years ago, we are rather interested to know why the Government should do any better this time than they did when they made the announcement last time.
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Of course we want the gap to be bridged and we want to see that level of expenditure, but it is hard for us to judge how the Government are setting about achieving it. One possibility—although I would never suspect the Secretary of State of such cynicism—is that we simply take today's expenditure on education as a percentage of GDP and project it forward, and there comes a point at which simply by holding expenditure constant as a percentage of GDP, it eventually reaches £8,000 per pupil per year. In fact, on our calculation that happens shortly after 2020, so perhaps the Government expect it to happen shortly after 2020. Indeed, in his briefings on the Budget, the hon. Member for Normanton (Ed Balls) gave 2020 as one of the dates when the target would be achieved.

That aspiration is in reality a forecast, and the Government need do nothing other than keep public spending on education at today's level. The Secretary of State may tell us otherwise, and if so, I would very much welcome that. How does she intend to achieve that aspiration, and over what time scale? We are happy to sign up to such an aspiration, but while the Government talk only about inputs, spending and ratios, we want standards in state schools to reach the standards in private schools. That is what parents care about most, and that is how we should approach the objective that has been set.

When the Secretary of State and the Chancellor reflect on these matters they ought to take careful account of the wise advice in successive reports by the Education and Skills Committee. In two separate reports on public expenditure it has issued salutary warnings that the Chancellor and the Secretary of State have not taken fully into account. Its report on public expenditure on education and skills for the Session 2004–05 begins with a crucial paragraph entitled "The effectiveness of increased expenditure", which states:

that is something of which the Opposition are accused—

We therefore secured similar improvements.

The report continues:

That is extremely wise advice. When the Prime Minister said that he was going to focus on outputs, not inputs, we thought that that was part of what new Labour was supposed to be about. However, what we heard from the Chancellor last week and the Secretary of State this afternoon was entirely about inputs, not outputs. Why did the right hon. Lady not take to heart the advice in the Select Committee report?

The Select Committee returned to the subject a year later and, importantly, warned the world of education that the rate of growth of education spending would
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slow down. Its 2006 report on public expenditure on education and skills opens by making the point that the Government

It is great to see the hon. Member for Huddersfield (Mr. Sheerman), the Committee Chairman, in the Chamber. Paragraph 15 of the report goes on to say:

The Select Committee rightly called for a grown-up debate so that people who work in education can accept that the rate of growth of education spending will slow down a great deal.

That was extremely important advice, but last week the Chancellor and the Secretary of State, who has talked about a "huge new resource", painted a picture for people in the world of education that is very different from the reality set out soberly and frankly in the Select Committee report. I would be happy to join the Secretary of State in a grown-up debate about how, if the rate of growth of spending is to slow down, that money can be used most efficiently to raise standards in education.

Instead of following the Select Committee report, the Government have bandied figures about as if there is there is going to be an extraordinary splurge in public spending. The figures show that the rate of growth of public spending will not be as great in the next few years as it has been in the past few years. It would have been grown-up to follow the Select Committee advice and confront the world of education with that reality, rather than try to avoid it. The Chancellor frequently enjoys accusing us of boom and bust in our management of the economy, but the record shows that in the financing of public services the Government are responsible for a cycle of boom and bust.

May I invite the Secretary of State to focus on science—a subject to which the Chancellor referred in the Budget? The state of science is a subject of widespread concern, and something that worries Members on both sides of the House. Specific science initiatives were launched which, in so far as we can understand them and the figures behind them, we welcome. However, I hope that the Secretary of State will forgive our scepticism about the special schemes that are always being announced.

During the election campaign, less than a year ago, the Prime Minister said on 14 April 2005:

During the election campaign, £250 million over three years was promised for science labs. Ever since, people have tried to obtain information about that £250 million programme and what is supposed to be happening. Finally, Lord Sainsbury sent a letter to John Dunford
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last month that made it clear that there was no special £250 million fund whatsoever. Instead, Lord Sainsbury said that

If that is what happened to the £250 million scheme last    year, why should we have any faith in the announcements that the Government have made this year?

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