RT HON ALAN JOHNSON MP

19 JULY 2006

  Q140  Mr Chaytor: So 4.3 billion is non-cashable but the 1,800 job losses will be cashable on top of the 4.3?

  Alan Johnson: Yes, 1,900 if you count Ofsted.

  Q141  Mr Chaytor: Can we have some clarification of this and how the 4.3 billion is divided, because we have got two categories. We have got the 4.3 billion, which is divided into recyclable and non-recyclable, then we have got the total amounts of which the 4.3 billion is non-cashable and the equivalent of 1,800 job losses is cashable?

  Alan Johnson: That is my understanding.[1]

  Q142 Mr Chaytor: When are we going to find out how all this is going to be achieved in detail? You have got to do it by the end of the next financial year, but will there be some kind of interim public statement as to how?

  Alan Johnson: I think the National Audit Office are due to say something, but the Office of Government Commerce keep a regular track of this, and they are quite satisfied that we are on track.

  Q143  Mr Chaytor: But is that currently public information?

  Alan Johnson: I will find out. That must be a pretty long letter.[2]

  Q144 Mr Chaytor: In terms of the non-cashable savings, the squeezing out of productivity in the schools, what will be put in place to assess how that increased productivity is measured in terms of attainment or, your other objective, closing the social class gap?

  Alan Johnson: There are various technical ways to ensure that we are getting those savings. I think the Permanent Secretary Jon Thompson went through some of them. Measuring productivity is much harder. There is a piece of work going on as to how you can measure productivity more accurately or, indeed, at all—some would argue there has not been any success in measuring it at all—to see whether we can find a mechanism to do that. I do not think we are there yet.

  Q145  Mr Chaytor: If teachers, as a result of the Workforce Reform Programme, have less contact and more preparation time and it does not lead to improvements in attainment, the question is why has it been done in the first place? Is there going to be some systematic monitoring of the Workforce Reform Programme, the introduction of IT on overall levels of attainment?

  Alan Johnson: Yes, there is a monitoring programme to make sure of the effect the investment (and that includes the investment in giving half a day to teachers to prepare, analyse and plan) is having on the absolute reason why we are all in existence, which is to improve attainment.

  Q146  Mr Chaytor: Finally, when the non-cashable 4.3 billion has been achieved will the process stop there or will there be a permanent revolution in non-cashable savings?

  Alan Johnson: There will be a permanent concentration on value for money, and that is not going to stop. Of course we have got the Comprehensive Spending Review coming up, so in that sense there will be a permanent revolution. There will never be a period where we will say, "That is fine now. We think we have got the right level of efficiency", but at the same time we need to be concentrating on the resources that teachers need. We have got a very good social partnership working with most of the teachers' unions and are moving on to issues like, for instance, the turnover of head teachers and how we can tackle a problem that is not right at the moment. It is a constant process.

  Q147  Chairman: We would be more confident about real saving if we could get some real examples in schools and colleges: what savings have been made and what has happened to the resources that have been saved? There are no examples of that at the moment, we have been given none, and you do lay yourself open to charges that these are fantasy savings rather than real savings if we cannot see, because we know, your predecessors have said, they will be made by schools and colleges, the bulk of these Gershon reform savings. So, when can we have some examples of what savings have been made and where have the resources been shifted to?

  Alan Johnson: I would have thought you would have some examples now, particularly on procurement and on freeing up teacher time and that being used more productively. I will see whether we have got some examples. It comes back to your original question about who is monitoring this, whether it is the National Audit Office or the Office of Government Commerce because, I accept, we should not be just be setting targets and saying everything is hunky dory if we cannot provide examples of that.[3]

  Chairman: We now move seamlessly to school funding. Rob Wilson is going lead on that.

  Mr Wilson: Thank you, Secretary of State, for coming today. I know how busy you are in the Department, and on top that you have also got your leadership campaign to run.

  Chairman: Fortunately, Rob, there is something wrong with your microphone. We cannot quite hear what you are saying!

  Mr Wilson: I have to say, I have got a few quid on the outcome, so I am interested. When Tony Blair steps down next year and you take over as Prime Minister, would your priority be, as his was: "Education, education, education"?

  Q148  Chairman: Stick to the education.

  Alan Johnson: Yes, I think so. I would probably classify it more as "learning, learning, learning", but it is the same thing expressed in a different way.

  Q149  Chairman: Would that mean significant extra funding for schools, for example? Do you think extra funding is needed even at this stage?

  Alan Johnson: I think the extra funding that has gone in has been phenomenal. I certainly do not think, in terms of where we are moving to education as a percentage of GDP, that we are there yet, we will be at something like 5.4% next year, so I do think investment is important, yes.

  Q150  Mr Wilson: You do not think we are quite there in terms of extra investment that is needed, but you cannot say at the moment how much further you think we need to go?

  Alan Johnson: We have got the Comprehensive Spending Review coming up, and that is a process that will be taking a lot of my time over the next year. It is absolutely the case, as I think has been mentioned at previous hearings of this Committee, that the level of increase in expenditure that we have seen since 1997, which has been quite phenomenal, can probably not be maintained, but I very much hope that we have got increased funding.

  Q151  Mr Wilson: It is interesting, because your rival for the top job, the Chancellor, thinks that funding per pupil in schools should rise from £5,000 a year to £8,000 a year at current prices, and that means an extra £17 billion worth of investment into schools. Do you agree with him? Do you think that is practical?

  Alan Johnson: What the Chancellor said is that our long-term aim is to match the "per pupil" spending in the state sector with that in the independent sector and to bring it up to 8,000. Actually we will be at the level of capital expenditure by 2011. So, all of this is remarkable and no previous government has got to this level of expenditure and investment in education, and I certainly agree that with that long-term aim. I think it is too crucial.

  Q152  Mr Wilson: So you are in agreement, £17 billion extra into school funding?

  Alan Johnson: I am in agreement with a long-term aim of matching "per pupil" spending in the state sector with the independent sector.

  Q153  Mr Wilson: Is that an aspiration or a pledge?

  Alan Johnson: That is an aim.

  Q154  Mr Wilson: So it is an aspiration?

  Alan Johnson: It is an aim.

  Q155  Mr Wilson: We do not want to give politicians the name of being shifty, so we will move on. Has your Department done anything about the aim that the Chancellor announced in his budget to get to this considerable increase in funding in schools? Has there been any research undertaken, for example?

  Alan Johnson: It is a long-term aim. What we are doing is concentrating on the money we are putting in at the moment, the extra investment at the moment. We are very pleased that the Chancellor has set the long-term aim, I think it is consistent with everything we have been doing since 1997, and, of course, the short-term aim by 2011 and matching capital expenditure is very important. We are also thinking very carefully about how public schools can contribute here. There is a very important Charities Bill in front of the House at the moment and the independent sector has charitable status. There are issues there around their facilities and how they could be used to help close this social class gap in the state sector. That is what we are concentrating our mind on at the moment.

  Q156  Mr Wilson: Can I move on then. The Department has made growing use of "velcroing" spending, as it were, to the pupil, and we were talking about the £5,000, £8,000 just a moment ago. Have you had a chance, as I am sure you have not had, to look at one of the amendments I tried to make to the Education Inspections Bill which would have velcroed an extra 30% to disadvantaged children?

  Alan Johnson: I have studied it carefully. The first thing I did when I came into office was to say, "Can I see Rob Wilson's amendments to the Education and Inspections Bill", but unfortunately that was eight weeks ago, so it has slipped, so, no, I cannot remember that, the velcro amendment.

  Q157  Mr Wilson: Can you see the advantages of Velcroing an extra 30% in terms of funding to the back of disadvantaged pupils?

  Alan Johnson: I think you are making a really serious point here, and I think it came up at the session that David Bell and Jon Thompson had with you. How can we get a statistic, a determinant, that would follow as accurately as you would like, and I think this Committee made the point that there needs to be more work on this, but I hope in some of the responses we have reassured you that the velcro is there but it would be good to have a better method and a better determinant of how that money can follow absolutely. I think the point you made is that in many affluent areas there are pupils who are disadvantaged, so it is much harder to identify them in those situations, and I tend to agree that, but David and Jon explained some of the difficulties about that at their session. I do think that is a serious point.

  Q158  Mr Wilson: Are you doing any work, because the only measure that I could find was free school meals? Is the Department doing any work on ways of better evaluating deprivation?

  Alan Johnson: I think this comes into our review of school funding, and I think this is a good opportunity to see whether we could better focus that money on disadvantaged pupils.

  Q159  Mr Wilson: So there is work on-going?

  Alan Johnson: Yes.

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