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School Funding (Devon)

1.30 pm

Mr. Geoffrey Cox (Torridge and West Devon) (Con): I am pleased to have secured this debate on education funding in Torridge and West Devon, and in Devon more widely. It is a subject of considerable concern to many of my constituents. Over the past six months or so I have received an unprecedented number of representations from heads of small rural primary schools, as well as from parents, governors and teachers, about the position that they find themselves in as year by year their budget declines and what they have to do with it increases.

The subject of my speech will be the manner in which the current dedicated schools grant is allocated. In 2007-08, Devon is 144th of 149 local education authorities in that regard. A Devon schoolchild receives £410 less per year than the national average. Pupil numbers are falling: between 2006-07 and 2007-08 they fell by 800, which under the current formula meant a cut of £2.8 million. When I have previously raised the extreme disparity between the amount a Devon schoolchild receives and the national average with the Minister for Schools and Learners, he has replied that the priority of Ministers is deprivation. He says that in Devon there are significantly fewer disadvantaged pupils according to Government criteria. This year 8.5 per cent. of Devon’s dedicated schools grant is for disadvantaged pupils, against a national average of 12.1 per cent. That may be true of Devon as a whole, but it is not true of Torridge and West Devon.

The borough of West Devon and the district of Torridge comprise the most disadvantaged areas of the county of Devon. West Devon is one of the most rural and sparsely populated areas of England. Just 0.4 people per hectare live in West Devon, compared with an English average of 3.77 people. Devon county council notes that while the county is perceived as being well below the average in suffering from deprivation, it actually has the fourth lowest average wage in the country. In Torridge and West Devon, we are in the bottom 10 for wages in the entire country. In West Devon the most recent available figures show, for example, that average annual earnings were only 63 per cent. of the average for England and Wales, and in Torridge the figure is even lower.

Of the 80 parishes that were studied in a recent Exeter university project, 28 of the most disadvantaged parishes were in Torridge and 13 were in West Devon. That means that more than half of the most deprived rural areas are in my constituency. The indices of deprivation 2007 reveal that the extent of rural deprivation in the area is grim. Ten wards in Torridge and West Devon are among the top third of deprived areas in the country. The parish of Lydford, which is close to my home, is one of the most deprived rural wards in England, 9,231st in the rankings and lower than many deprived urban areas.

Geographical deprivation is a particularly important factor in rural Devon and it has achieved significant notice in the media in recent months. In my constituency we have some of the most geographically deprived wards in the country. England is divided into more than 32,000 areas. In those areas, the wards of Bridestowe,
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Forest and Milton Ford are in the top 100 most geographically deprived areas in the country, while others such as Walden, Two Rivers and Broadheath are in the top 200. In total, 14 wards of Torridge and West Devon are in the top 500.

Pupils in those circumstances are suffering the effects of a fundamentally misaligned system of grant allocation. The dedicated schools grant is calculated by multiplying the number of school and early years pupils by a standard rate. That rate is based on need as assessed in 2005-06. There are four additional elements: area cost adjustment, sparsity, additional educational need and high-cost pupils. I will come back to those, but the central theme of my remarks is that there has been a fundamental failure to recognise the extra costs of running a high number of smaller schools in large rural areas such as Torridge and West Devon and Devon as a whole. In addition, there has been a substantial rise in the number of children with special educational needs, which is unrecognised.

Over the summer I visited many schools and met heads, teachers, parents and governors. They told me of the gradual erosion of the ability of those excellent schools to provide the education that the children deserve. They told me of the strain on heads, as they take on ever greater teaching responsibilities; of the cost of their strategy and leadership roles; of the suspension of library subscriptions; of the ever more thinly stretched time of teaching assistants; and of reductions in experienced staff.

Some 129 schools in Devon local education authority have 100 pupils or fewer, so 40 per cent. of all schools in Devon have fewer than 100 pupils, and 72 per cent. of those schools are in rural areas. The local education authority has determined that even the smallest schools—those with 53 children or fewer—require a minimum of 2.6 full-time equivalent staff, 500 hours of administration and one mealtime assistant. There are 42 such schools in Devon, which is 13 per cent. of all primary schools, including a dozen in my constituency. The tasks of leadership of smaller schools is in many respects the same as in larger schools. The proliferation—the blizzard—of Government initiatives does not discriminate by pupil numbers and salaries have to reflect that.

Each school, however small, must have a fixed cost regardless of the number of pupils. Tearchernet estimates that primary schools with between 80 and 100 pupils cost 16 per cent. more per pupil. That additional cost, which must grow as the number of pupils gets smaller, is simply not reflected in the current grant. The Minister may argue that those factors are taken into account by the sparsity element. I accept that around £9 million this year is allocated to Devon on account of that factor, but she knows that the current sparsity index relies on data from the 1991 national census. In addition, the cost of smaller schools has almost certainly risen, not least because of the extra responsibilities of which I have spoken.

The other day I heard a story that in the past few years Northumberland received less sparsity allowance than Birmingham. The current sparsity assessment does not reflect an ageing population or the scarcity of children, so we need to look again at how sparsity is assessed. It affects the cost of education in a large rural area in many ways. For example, if one is buying in support services, the support staff who come to provide
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those services will have to charge as an overhead the cost of travel to the school. There are a multitude of ways in which sparsity affects the cost of delivering education in a large rural area.

I want the Minister to explain why it is that a Devon schoolchild receives £410 less than the national average. If it is because of deprivation then I hope that I have illustrated that deprivation is as bad in parts of Devon as it is in many urban areas. Yet the smaller schools in those deprived and geographically deprived areas are the ones that are suffering the effects of the crunch on their budgets.

If the sparsity factor is intended to take account of the extra costs of running small schools—fixed costs that cannot be seriously reduced—surely it needs to be reviewed urgently. I know that a review is taking place, but adjustments must be made to reflect the number of small schools and the fact that children may be scarce, although in a county such as Devon, with an ageing population, the population may in fact be growing in certain areas.

The sparsity factor clearly is not doing its job. As I visited schools during the summer, I was told stories by anxious parents who congregated in draughty halls to talk to me. They told me about coming in to maintain the fabric of the building because the school’s budget was insufficient. I myself participated in a painting session at Meavy school in West Devon. The governors and I did the work because we could not afford to have somebody else do it—we had to do it ourselves. Parents, governors and teachers are truly worried. As I said, there is an unprecedented level of concern. Sparsity and the cost of running small schools must be reflected in the Government’s allocation of grant funding.

Another factor that I would urge the Minister to take into account is the considerable rise in the number of special educational needs children in Devon. In the summer of 2003, SEN children made up 14.4 per cent. of the total school population. By the summer of 2008, it was 20.9 per cent. The Minister may be aware that there has been a significant increase in the number of diagnoses of children who are on the autistic disorder spectrum, yet those vastly increasing numbers are not reflected in the dedicated schools grant. That is largely because the assessment of need was made prior to 2005-06, and the current dedicated schools grant is a spend plus grant. Therefore, all the assessments of need are locked in as of 2005-06.

That is one reason why the disparity exists, but I would be deeply grateful to the Minister if she could explain, although not in the habitual terms of Ministers who recite figures that we all know, how she would respond to an anxious parent or governor, or a strained head teacher, many of whom I have met this year. They are taking on an additional teaching load because they cannot afford to employ an experienced teacher, or even a teacher at all.

The dedication and commitment of such people to primary school education in my constituency is unparalleled. The schools get excellent Ofsted reports, and the parents and governors are deeply committed to them. Such schools support small rural communities, and it is not an exaggeration to say that they are loved. They are an intrinsic part of the community and deliver an excellent education for children, particularly vulnerable children.

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How would the Minister explain to those people that, bit by bit, they are experiencing a painful erosion in their ability to do what they want to do for children, and to provide them with the best possible education? Costs mercilessly and remorselessly rise while budgets decline in real terms. The fabric of the buildings is deteriorating. Subscriptions cannot be taken out for the school library. Teachers have to take on extra responsibility. I urge the Minister to provide a real answer to those people through me, because although this debate is not well attended, I know that her words will be attended to most carefully, given the attention to the problem in my constituency and across Devon.

I know about the current review of the dedicated schools grant. One assurance that I seek from the Minister today is that the special value of small rural schools will continue to be recognised. The Government created a presumption against their closure, which I welcomed. I hope that she will be able to say that it will continue—that small schools and the valuable benefit that they represent to communities and children will continue to receive emphasis in the Government’s policy making. As well as emphasis and protection, however, small schools need Government support through funding, and that means a realignment of the dedicated schools grant to reflect some of the cost pressures of which I have spoken.

If realignment is not carried out urgently, I gravely fear for the future of many—or certainly some—of the schools in my constituency and across Devon. That would be a catastrophe, because, as I have said, those schools provide an extraordinarily fine education. I should declare an interest: my own son, who was on the mild end of the autistic spectrum, received the most extraordinarily fine education from our local village school. It was caring, and it was provided in a small setting. Those on the autistic spectrum cannot deal with a large group or a big crowd of children. Therefore, in many cases, a small village school is ideal. I would like such education to be fostered and nurtured, and provided for hundreds more children living in the rural areas that I represent.

The expressions of concern that I received this summer were unprecedented. I almost received more requests for meetings than I could cope with from anxious head teachers, parents and governors. I would like education in small schools to be fostered and nurtured, but there is a deep sense of distrust and concern that the current review will not produce a realignment of funding and grant to enable them to prosper. Amalgamations and federations often do not work in dispersed rural areas because of the distance that one has to travel to collaborate. That is a problem with early years as well. If there is a large distance to travel, it is difficult for two or three villages that have to co-operate even to set up such a facility. What they really need is a recognition of the additional costs of such schools.

I am grateful to the Minister for being here. I hope that I shall give her ample time to give my constituents, through me, a real answer. They and I know that education funding has risen. I have seen all the figures, and so have they. We know that in the past five or 10 years education budgets have risen in real terms, but so have costs.

There is a high teaching cost in rural areas. For example, the area cost adjustment does not seem to include any cost adjustment for Devon that reflects the
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higher cost of employing teachers in rural areas. We want to know that the Minister and the Government are looking at the plight of small, often fragile and vulnerable rural communities and not discounting them because they are small. We must recognise that small schools form a crucial part of the education that is offered in this country, and that it is education of which we should be extremely proud.

1.48 pm

The Parliamentary Under-Secretary of State for Children, Schools and Families (Sarah McCarthy-Fry): I congratulate the hon. and learned Member for Torridge and West Devon (Mr. Cox) on securing the debate. It is possible to tell from his comments that he is deeply involved with the issue and with representing his constituents.

Nothing could be more important than ensuring that every child, in every area, can go to a good school. As the hon. and learned Gentleman said, to achieve that, we have put unprecedented investment into our educational system. Our teachers are the best they have ever been—those are not my words, but the words of Ofsted. More than ever before, children and families are being put at the heart of everything we do, and services for them are at the heart of communities. Through academies and trusts, new school governance models have given local government and schools greater freedom to make the best use of the resources that are available to them to respond to local challenges and best serve the children and families in their area.

Local authorities are more in control of how their funding is allocated, and it is right that they are. It would not be right to impose central solutions to local problems. Local authorities are best placed to understand the needs of their communities and to allocate their funding accordingly.

Nearly £3 billion of funding is provided nationally for deprivation. We are aware that not all of it reaches the schools with the deprived pupils, so we are working with local authorities to ensure that funding provided for deprivation is being targeted to those pupils. The distribution of that funding is left to local discretion and Devon county council has consulted the Department to work out how to move funding in the local formula to such schools.

As the hon. and learned Gentleman pointed out, Devon has received a year-on-year increase in school funding of 12.8 per cent. over the current three-year settlement to ensure that we can continue to build the best possible system for our young people. As he mentioned, we have set the funding for the next three years under the spend plus method, which has two principal advantages. First, every local authority is guaranteed an increase per pupil per year, with an obligation to pass on a minimum guaranteed increase per pupil to schools. Secondly, allocating funding over a three-year trajectory—currently from 2008 to 2011—has successfully given schools and local authorities greater stability and security in their allocations to ensure that they can plan ahead with certainty. Although that inevitably reflects historic patterns of distribution and spending, it has preserved in the baseline the additional funding above the old schools formula spending share, which many local
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authorities, including Devon, historically provided for their schools. For those reasons, we are confident that the funding levels first set in 2005-06 by the spend plus method have provided the right balance of funding for local authorities across the national picture. In addition, two thirds of respondents to our consultation last spring favoured retaining spend plus rather than switching to an updated version of the old SFSS.

We must strive for excellence in education provision for every child and we must aim for consistently high standards, but it does not follow that funding, service provision or any other measure should be applied in exactly the same way across the country. If we are to close the gaps between the most disadvantaged and the rest, we need to invest in those areas, and those pupils, who need it most.

In 2007, 36 per cent. of young people receiving free school meals achieved 5 A* to C GCSE passes compared with 63 per cent. of their better-off peers. That discrepancy is not acceptable. In the classroom, our teachers provide more intensive support to those pupils who are underachieving than they do to those who are charging ahead under their own steam. That is why we have introduced greater personalisation and flexibility into the curriculum, so that every child’s needs are catered for, not just those of the fortunate few. Our funding streams must allow the same flexibility, so that we can target resources where they are most needed, while maintaining a consistent standard of education. With a guaranteed increase in spending per pupil over a long-term trajectory, the spend plus method has helped us to achieve that.

We need to ensure that the system is keeping pace with the change and challenges that local authorities will face in future. We need to start thinking about that now to ensure a thoroughly thought-through system for 2011. That is why we launched a review of school funding in January to create a new formula that will commence directly after the current three-year settlement. The review will take into account a wide variety of views and research to develop a formula which continues to direct funding where it is needed, taking into account local priorities and costs. It will be targeted to raise the achievement of all pupils consistently across the national picture to reflect the changing needs of local areas and to support schools to be fully equipped for 21st-century learning. Priority factors in the review process will be the area cost adjustment, provision for high-cost pupils, special and additional educational needs and sparsity, which I will address later. We are inviting input into that process via the formula review group, which is currently gathering evidence for the review, and we will be opening work up for public consultation in 2010. I strongly encourage our partners in local government and schools, and other interested parties, to contribute to that process. The work of the review group will be available on the Department’s Teachernet website.

As the hon. and learned Gentleman has expressed, rural schools in sparsely populated areas remain a significant challenge to the local authority in Devon, and around the rest of the country, in making planning and allocation decisions. As he mentioned, we have recognised that in the current funding formula. In 2007-08, the dedicated schools grant contained almost £188 million of funding for sparsity, of which Devon will receive £9.14 million.

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We are determined to protect rural schools, because they are making an invaluable contribution to their local areas. The hon. and learned Gentleman can be confident that the review will take these issues into account. We already recognise the value of rural schools. As he said, earlier this year the Minister for Schools and Learners wrote to local authorities reminding them that we introduced a presumption against closure in 1998. That does not mean that we say that no rural school will ever close, but it is up to local authorities to ensure that the balance is managed properly against the presumption that we will close them.

We want to see surplus places in rural primary schools used to broaden the services that schools offer. Our vision of the 21st-century school offers an opportunity to do that. We also want to see shared governance arrangements between small village schools as a means of addressing financial and educational challenges. Although the hon. and learned Gentleman said that that would not work in Devon, I recall that, at oral questions a few weeks ago, hon. Members who represent Somerset constituencies said that federations were working well in rural schools there.

Our review will reflect our aim to protect rural schools, together with an assessment of the changing costs of rural schools over time. Some local authorities with many rural schools may decide to allocate more funding to their primary provision. That will be a matter for local determination, but as we develop the new funding formula, we will focus on building a strong system so that every school can operate to the best of its abilities to provide the highest possible standard of education to its young people.

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