HOUSE OF COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE THE
CHILDREN, SCHOOLS AND FAMILIES COMMITTEE
PUBLIC EXPENDITURE: DEPARTMENT FOR CHILDREN, SCHOOLS AND FAMILIES COMMITTEE
DAVID BELL and JON THOMPSON
USE OF THE TRANSCRIPT
Taken before the Children, Schools and Families Committee
on Wednesday 25 June 2008
Mr. Barry Sheerman, in the Chair
Mr. Douglas Carswell
Mr. David Chaytor
Mr. John Heppell
Mr. Andy Slaughter
Mr. Graham Stuart
Examination of Witnesses
Witnesses: David Bell, Permanent Secretary, and Jon Thompson, Director General, Corporate Services, Department for Children, Schools and Families, gave evidence.
Q<1> <Chairman:> I welcome David Bell, the Permanent Secretary to the Department, and Jon Thompson, who is Director General of Corporate Services there. It is very nice to see you both again. We are looking forward to a good, robust session this morning. This is a session that we hold every year in respect of our scrutiny role-it is about the money, as you know-so let us get started. We usually give you the opportunity to say a few words to open the proceedings.
<David Bell:> Thank you very much, Mr. Chairman. Good morning, ladies and gentlemen. This Saturday marks the first anniversary of the Department for Children, Schools and Families. It is quite hard to believe that a year has gone by, with so much having happened in the past 12 months. From my perspective, it has been one of the most interesting and exciting periods of my professional life. Despite the potential for considerable upheaval, I think we can look back and say that we hardly missed a beat in setting up the new Department. That put us in a really good position to support the ambition of the Secretary of State and his Ministers to make this the best place in the world for children and young people to grow up. Like any good organisation, we set out our stall early, with the publication of the Children's Plan in December. You have already taken quite a close interest in the Children's Plan, having questioned and quizzed the Secretary of State. That is a 10-year plan to improve the lives of children and young people everywhere, and to provide the best possible support to families across the country. We are already vigorously into the implementation phase, in areas as diverse as setting up the new Qualifications Regulator and establishing the new-and we think quite innovative-funding streams for issues like play and positive activities for young people. We are also keen to continue to support disabled youngsters and their families. These are some examples of what we are doing under the Children's Plan. I am sure the Committee will want to question us on many aspects of the Department's policy, and we have already welcomed your close interest in our work and your very helpful first report, which provided some useful pointers to us as we move forward, not least in our new areas of shared responsibilities such as juvenile justice, child poverty and so on. This Departmental Report covers the work of both the Department for Education and Skills and the DCSF, but in no sense is that problematic, because there are very important continuities in policy in areas such as child care, children's centres, raising school standards, reforming qualifications, and promoting diversity and choice. In addition, I believe we have continued to manage our resources extremely well with our efficiency plans for spending review 04 on target. Our budget, planning and performance management arrangements are very well regarded across Government. In all of this, I would like to pay tribute to my colleague Jon Thompson, who I should say has recently been appointed head of the financial management or accountancy profession across Government, so he is now the head of profession. This is a very significant honour, although I am relieved to say that Jon will combine these responsibilities with his work for our Department. We have made considerable progress not just in the past 12 months, but in recent years. This has been in areas ranging from the number of children's centres open to results showing that many more young people are achieving well at school at age 16 and 19. But-and this is an important but-that is against the backdrop of very considerable ambition and demanding targets, laid out most recently under the public service agreement scheme and the spending review 2007. Therefore, our efforts have to be focussed on all the next steps. Finally, Mr. Chairman, I hope you will allow me a moment of indulgence to pay tribute to the staff of our Department, who have been tremendous this year. They have risen substantially to the demands of the new Department, and a recent staff survey showed the very high engagement of our staff. So we are pleased and encouraged that staff are still committed to the mission of our Department. That kind of passion and professionalism on the part of the civil service makes me proud to lead this Department as the Permanent Secretary.
Q<2> <Chairman:> Does "engagement" mean satisfaction?
<David Bell:> There is a high degree of satisfaction across a number of areas. One statistic is that 82% of the staff said they had a very clear understanding of the Department's aims and objectives, and a similarly high percentage said that they understood how their work contributed to achieving the ends of the Department. The other thing is that 82% of the staff participated in the staff survey, which is, across all organisations, a very high return rate. I am an optimist, as you know. I see that as a sign of great engagement. They want us to see what they think, and believe that we will act on it.
Q<3> <Chairman:> Thank you, Permanent Secretary. It is just that, as a former social scientist, I wondered what question you asked to find out that people were truly engaged, but we will discuss that another day. I have to start on a slightly discordant note. We were not that impressed that we had a response to our most recent report on the Children's Plan only at 7.20 last night. It was rather late for us to read it, let alone absorb it. The Clerk received it at 7.20 pm. Perhaps you think that is good, and shows that the Department was working at 7.20 pm, but we received it too late for it to be useful this morning. We have read it now.
<David Bell:> Indeed. I believe you will have an opportunity to question the Secretary of State next month, and I am sure you will want to take up the content of that response with him.
Q<4> <Chairman:> We are aware of that, but for this meeting it could have been a little earlier. To open up, we have had seven good years in terms of expenditure on education. All the signs are that expenditure is now tailing off and falling behind the health commitment. That is disappointing for someone who was in the education sector, is it not?
<David Bell:> As you said, we have had very substantial increases in funding since the turn of the century. It is worth pointing out that the education and children's services settlement that was announced under spending review 2007 was still better than that achieved elsewhere in Government. I therefore think we should recognise that there is still a substantial commitment to education and children's services. It is entirely right, however, that we expect and ask all sectors, including schools and local government, to think very carefully about how best to use the money. I do not need to remind you, Mr. Chairman, of the broader financial and economic context in which we operate. For that reason, we were still pleased to secure the settlement we did.
Q<5> <Chairman:> What I am pointing out is that the Government were elected three times on the manifesto of "education, education, education", not "health, health, health". One might have expected education spending at least to keep pace with health spending.
<David Bell:> But there have been very substantial increases, as you know. The per pupil uplift since 1997 has been almost 88%. The overall uplift has been 67% in that period. It is unusual to go to schools and hear people say, "We have not had enough money over the last decade." People are now managing new circumstances. We do not underestimate those circumstances, but it is worth repeating that the settlement was a very generous one in the context of the wider fiscal position.
Q<6> <Chairman:> You have been coming before this Committee for quite a long time, both in your previous roles as Permanent Secretary of the previous Department and, before that, as chief inspector. Is it your view that the taxpayers' money spent on education has yielded what you anticipated it would yield?
<David Bell:> Yes, I do believe that, because there have been significant improvements right across the piece. We know now that record levels of youngsters are achieving what they should be achieving at the end of primary school. We know that the highest percentage ever of youngsters is achieving five-plus A to C grades at GCSE. We know the achievement at age 19 and so on. What nobody would argue is that we have, by any stretch of the imagination, finished the job. As the improvements have been seen across the system, some young people and families have not benefited in the same way. That is why the Department has redoubled its efforts to try to ensure that everybody benefits from all the investment that has gone in. One of the advantages of the new Department is that we are able to make links between what happens in school, vital as that is, with other services that enable young people, children and families to succeed. Although many youngsters achieve well at school, they are often unable to achieve as much as they might because of family pressures or other circumstances. Going forward, we are trying to enable schools to focus on the key core job of teaching, and teaching well, but enabling head teachers, teachers and others to draw upon all the other services that will help children and families thrive. It seems to me that we have made very, very substantial progress in recent years, but of course there is more to do.
Q<7> <Chairman:> I do not know if you ever have conversations with Chris Humphries, the chief executive of the Commission for Employment and Skills.
<David Bell:> Not in his new role, Mr. Chairman, but I have spoken to him previously.
Q<8> <Chairman:> He said only yesterday that we are still not delivering the appropriate education to unlock the talents of 50% of young people going through the educational system. He further said that educational productivity is a real concern in this country. If the money is being spent wisely, why is it that Chris Humphries can say that 50% of kids are still not getting a fair crack at education, and why is the educational service on international scales-not on anything dreamed up in this country, but on international measures-still not rated highly in terms of productivity?
<David Bell:> Let me ask Jon to touch on the productivity point. If you take the measure of the percentage of young people who achieve five good GCSEs, including English and maths-that, I suspect, is the reference that you are making-we know that we have to do better and more in that regard. Those English and mathematics qualifications are a really important first step-next step-to moving on through the educational system. It is quite interesting that when we look at the qualifications attained by young people by the time they reach 19, we see quite substantial improvements there. We would all be nervous about suggesting that just because youngsters have not achieved English and maths as part of the five good GCSEs they are somehow complete failures. That is certainly not the case. But it is the case that ensuring that more and more youngsters achieve that important benchmark is significant. That is why we have tried to broaden the range of opportunities and qualifications going forward. It is not just about those youngsters doing the traditional qualifications and skills, but trying to expand very substantially the apprenticeships programmes, which you will be aware of, and also trying to think about how new qualifications such as the diplomas will play into that. I would not want you, Mr. Chairman, to think that we are at all complacent, but equally I would want the Committee to recognise very substantial improvements. Perhaps Jon would like to touch on productivity?
<Chairman:> Before Jon comes in, let me say that it is very good to have you here. You have been before the Committee in different guises before, Jon. About four or five years ago you were running-chief financial officer-North Somerset unitary authority.
<Jon Thompson:> Indeed.
Q<9> <Chairman:> Now you seem to be running the country. You must be congratulated on this progress. I see you have an added job right across Government. How on earth can you do the complex job that you have in DCSF and all that stuff right across every Department in the country?
<Jon Thompson:> I have to balance my time extremely well. It is fairly demanding. What the Treasury wanted, in terms of a leading financial professional, was a practitioner-someone who had been and was a finance director-rather than someone from the Treasury.
Q<10> <Chairman:> They want someone who really knows about money, rather than all the rest of the people in the Treasury, who obviously do not.
<Jon Thompson:> You will have to ask that question of their Permanent Secretary.
Q<11> <Chairman:> What expertise do you have that the Treasury does not have?
<Jon Thompson:> My role is not about running the overall finances of the Government. We have to be very clear about that.
<Chairman:> We understand that.
<Jon Thompson:> My role is only about leading the finance community, in which there are 11,000 finance professionals-thinking about their training and development, what standards they apply and so on. The role of overall finance to the Government remains within the Treasury. What was a previous role has been split into two, and I have taken the finance community role.
Q<12> <Chairman:> Is it seen as a Gershon saving-one man doing lots of jobs?
<Jon Thompson:> Indeed.
Q<13> <Chairman:> Let us deal with productivity in education, across the sector.
<Jon Thompson:> I think that your Committee was looking for some further work on productivity around January of last year.
Q<14> <Chairman:> Last year you said that you were not so interested in productivity.
<Jon Thompson:> I was going to say that the Office for National Statistics responded with a report on productivity in the education sector last autumn, which concluded, it is fair to say, that the inputs have resulted in significant increases in outputs, but that overall productivity had risen only marginally in the 10-year period-a huge increase in inputs and a huge increase in outputs, but when you put those two together, productivity had marginally risen in the 10 years. So there was a report into that area.
Q<15> <Chairman:> Last year you told me that productivity was not so much of a concern, but cost-benefit analysis was. Now we are back talking about productivity. Are you switching from year to year just to confuse the Committee?
<Jon Thompson:> No, I am not. You rightly asked us about productivity and our report, produced by the Office for National Statistics, tried to respond to some of your questions about whether productivity could be measured and how that could be done.
<David Bell:> I think that it is also worth pointing out, Mr. Chairman, that the Office for National Statistics and its work recognise the complexities of measuring productivity in public services such as education and health. It is not a straightforward task and you have to look at a range of measures. It is not just me saying it-that is what the ONS will tell you about the productivity measures. We would say that you should use a variety of measures, both national and international. We have seen movement, sometimes in the right direction, but sometimes slipping back against the international measures. It is a complicated area, but let us not lose sight of the thousands and thousands more young people who are achieving qualifications that they would never have achieved previously, and of the huge investment across all aspects of education and children's services.
Q<16> <Chairman:> No one denies that, but we have to live with international comparisons done by a range of international organisations-usually well trusted-that suggest that we have slipped back over the past 20 years, not moved forward.
<David Bell:> Well, I seem to recall that we discussed that quite a bit in January when we had the session with the Secretary of State, based on the publication of the OECD measures. In some of those measures we remain strongly placed and in others we were slipping back. There were, as you well know, some important questions about methodology, but, at our end, nobody disputed that we have to keep our performance moving and to keep it up. All nations across the world, particularly the developed nations, are recognising that the extent to which you are able to have a highly educated and highly qualified workforce indicates your chance of continuing economic success, as well as social cohesion.
<Mr. Stuart:> Very quickly, Mr. Chairman, may I come in?
Q<17> <Chairman:> I just want to leave one thing with the permanent secretary. Do you and Jon think that it is more difficult to attain productivity increases and improvements when there is plenty of money around? According to a figure that I have in front of me, there was a fall in productivity between 2000 and 2007 of 0.7% every year.
<David Bell:> Again, it is interesting that one of measures used is the number of staff who are supporting children, or the number of staff who are employed in a school, against the output measure. We know, for example, that since 2000 there has been a very substantial increase in non-teaching support staff to help youngsters. It only reinforces the ONS's point that it is difficult to get an absolute measure; you cannot find a single number. You can quote the number that you quoted, and it is fair that the ONS quoted it, but whether it captures the complexity of all the measures that you are trying to assess in looking at improvement is-I think-a more open question. That is why we need to continue, with the ONS, to ask the question about productivity. As to whether it is harder to generate productivity when you have more investment, interestingly, Jon and I had experience of the local government world in the '90s, when it felt as if you always managed budgets down and you had to become very sharp and smart in how you did that. We need to keep that focus on efficiency that we have had in previous years. It is not something new, but it will become even more important to get the maximum benefit from all the spending that we are putting in, particularly as circumstances tighten.
<Chairman:> Now that we have drilled that down, David is going to ask the questions.
Q<18> <Mr. Chaytor:> Every year the Departmental Report seems to get bigger and more complex and the information is arranged in different ways. However, this year we have six departmental strategic objectives, but the analysis of spending does not relate in any way to the objectives. Is there a reason for that? Is it impossible or would it be possible in future years to show a closer relationship between the allocation of the budget and the strategic objectives?
<Jon Thompson:> It certainly would be possible to produce an analysis of the £168 billion which the Department has available in the public spending review period against the six departmental strategic objectives on page 10. That is not included in the report but we can produce that. It would then cover the totality of the forward spending plan.
Q<19> <Mr. Chaytor:> You say that you can produce that. Could you do so now or are you saying that that could be a way of presenting it in next year's report?
<Jon Thompson:> It is available within the Department. We can usually provide it to the Committee, if you wish.
<David Bell:> It is partly a matter of form that the structure of the report is as it is. The Chairman quite rightly expressed some concerns last year that we had altered the form. We have got ourselves into a better position through consultations outside the Committee, but we are doing exactly the analysis that Jon describes. We can make that available. Perhaps it would be worth discussing outside the Committee whether the format of the Departmental Report could evolve in that way. I confess that I am never quite sure how much it is laid down that information should be provided in a certain format, style and structure. That would not prevent us doing what you have asked for, Mr. Chaytor. It is quite a long report, as you point out. We would probably want, if we can, to trade off some new information and take some other information out.
Q<20> <Mr. Chaytor:> My second point is a similar one. A large amount of the work that you are responsible for is delivered on the ground by children's services departments or children's trusts, where they exist. But in the report we do not see direct budget allocation to the children's services departments of local authorities. Would it be possible to have it presented in that way, either now or in a future report? Would that be valuable, or do you think that it is not significant?
<Jon Thompson:> Again, that information is available within the Department. Information on the significant elements of spend which either go directly into the schools system, through something like the dedicated schools grant, or which go to local authorities, through area-based grants, could be produced, either by or within the Department, if the Committee wanted it. We could consider including it in a forward Departmental Report-it would extend the appendices quite significantly, but we certainly can do it.
Q<21> <Mr. Chaytor:> On table 8.3, which gives the detailed breakdown of expenditure, the basic structure is expenditure allocated to schools, children and families and young people, but surely those cannot be mutually exclusive, because young people and children attend school. We see certain headings, such as the amount spent on Academies and specialist schools, which clearly benefits young people as well. Does that structure serve any purpose, or is it an attempt to match up with the name of the Department? It is not necessarily the best structure to present the information because there are so many overlaps between the three sub-categories.
<David Bell:> I should probably ask the head of the Government financial management service to answer the technical points about how the data is presented, but you have made a valid point. If you look at the dedicated schools grant, of course we know that it goes directly into schools, but much of the expenditure under the children and families heading, for example, will have a direct impact on the same children, through children's centres. The work that we are doing with young people through the Connexions service or supporting positive activities will also impact on the same young people. This is more to do with the presentation requirements for the accounts.
<Jon Thompson:> Table 8.3 on pages 88 and page 89 is set out, to be honest, largely for convenience and for our own departmental purposes, because that is the way in which our budget is structured and because the local authority system would recognise those funding systems. In terms of making a three-year forward announcement, which is also set out in the table, sticking to that architecture assisted both us and the system. In answer to your previous questions, we can certainly set out the information in a different way, and we would essentially rehash it in relation to local authorities.
Q<22> <Mr. Chaytor:> Do you accept that it is better for the process of scrutiny and accountability that the funding is shown as being allocated to institutions, rather than to broad-brush themes or individual services? For some institutions, such as school sixth forms and the Connexions service, the funding is clearly listed, but other heading are fairly vague, such as, "Other Youth Programmes" and "National Strategies". Do you accept that there is value in clearly linking the funding to specific institutions?
<Jon Thompson:> Yes, I do accept that. If it would be helpful, we could provide that information in a table 8.3A. We could take those figures and cut them in a different way to answer that.
<David Bell:> Interestingly, if you look at the accountability arrangements for schools over the past 20 years, you can identify that funding right down to school level because of the reporting requirements under the section 52 statements. We now have a fine level of detail on spend at the level of individual institutions, and the local authority accounts give a similar sort of detail. As Jon said, we have tried to group those in a broad way, but we could probably have some discussions and consultation outside the Committee on what would be a more helpful way of exploding those big numbers and giving you a better sense of what they include.
Q<23> <Mr. Chaytor:> I have just one more question. There has been a big increase in the numbers of annexes this year, and they provide a fascinating amount of detailed information, but the one thing that the Department seems reluctant to publish or make available is the future projections for pupil and student numbers. Your planning assumptions are based on the comprehensive spending review period so that we can look forward three years, but given apparent demographic changes, would the scrutiny process not benefit from your assumptions about the changes in the birth rate or the impact of immigration on pupil and student numbers? Student and pupil numbers are absolutely key to aspects such as the 14 to 19 developments and the Building Schools for the Future programme.
<David Bell:> There is no secret in those, and we wrote to you about that issue.
Q<24> <Mr. Chaytor:> You did, but it is not in this document. As a matter of course, ought not that to be in there? We clearly know now, 10 years on, the numbers of children at the age of 16, because they are already in the schools.
<David Bell:> Absolutely, and there is no difficulty with that as a piece of base data for the report.
<Jon Thompson:> My apologies. I thought that that data was in there. Like you, I was just struggling to find it.
Q<25> <Mr. Carswell:> I have three questions for Mr. Bell. The first does not relate specifically to funding questions, but as you can see it is not totally unrelated. I note that you are a fan of US politics and follow it closely, so would you like to see reforms in this country that would give a role to the House of Commons, as the legislature, to ratify the appointment of permanent under-secretaries and senior officials in the Department? That could be done in some sort of televised confirmation hearing, rather like the American system, and perhaps through this Committee? It is a perfectly serious point. Perhaps the House of Commons, as the elected legislature, should approve and vote on the departmental budget every year, which is something that we do not do de facto, if indeed we still do it de jure.
<David Bell:> I am sure that we could have a long and fascinating discussion about American politics and comparisons with the UK. With regard to your first point, however, we recently announced that a number of public appointments will be brought before Committees, and in fact we have put forward two of Her Majesty's chief inspectors. I think that you actually asked the chief inspector about that at a recent hearing.
<Chairman:> She was not very happy about that.
Q<26> <Mr. Carswell:> That is why I would like to hear whether you, as the permanent secretary, would be happy to go through that.
<Chairman:> Would you not have applied to be chief inspector if you had to be interviewed?
<David Bell:> I had nothing to hide and I am sure that the current inspector has nothing to hide either. We put up a couple of appointments for the process: the Ofsted job and the post of chair of the Qualifications and Curriculum Authority.
Q<27> <Mr. Carswell:> What about the permanent under-secretary?
<David Bell:> I am probably speaking beyond my pay grade here. There is something very strong and significant about the role that the civil service commissioners play in the appointment of the most senior ranks of the civil service. For the sake of our parliamentary democracy, it is quite important to separate the appointments of the permanent civil service from any oversight-if I can put it in that general sense-of the Executive. That would be absolutely consistent with our traditions, which go back a number of years. It is rather interesting, of course, that there is a forthcoming civil service Bill, and there is discussion about appointments. So, on balance, I would stick to the current system of ensuring that you have independence in the selection process and have that overseen by the civil service commissioners. You can make a respectable argument for public appointments, such as the chairs of the regulators and so on, being in a different category from those of the permanent civil service.
Q<28> <Mr. Carswell:> I am fearful that the current Government, or God forbid a future Government, might try to centralise local education authority budgets, either to try to carry out some hare-brained education scheme or, more fearfully, to try to solve the local government balance of funding problem. Do you see that as a danger, or are you moving towards that?
<David Bell:> That has been one of those interesting debates that has probably waxed and waned for 20 or so years, but it is interesting that we have retained a strong degree of local oversight control. There is a wider question about the funding of local government. You might say that the Government have already decided, through for example the dedicated schools grants, that you take out a very large sum of money and say that that is identified and cannot be touched. But do not forget that even within that there is a high degree of local accountability and responsibility: for example, the way in which the funding formula is constructed at the local authority level allows for local influence and oversight. That is a matter for Governments to determine, but my sense is that there is not a lot of agitation for centralising and having a national funding formula. It brings controversy about the funding levels in particular authorities across the country. That is a controversial issue, I know, but one of the arguments that has been put up historically-it is a fair argument-is that you want to try to recognise the different circumstances of different areas. I do not see any great pressure in that direction at the moment.
Q<29> <Mr. Carswell:> This is my final question. As you know, some local authorities have been allowed to do things such as experimenting with direct payments in social services. What changes would we need in primary legislation to allow a local authority to bring in a system that would give any parent the right to request and receive control over their child's share of local authority funding?
<David Bell:> You would require changes in primary legislation because we do not, under the current legislation, enable individual parents to have their share of the budget for the education of a child in the maintained system. It is interesting that you cited the example of the social care payments. I was with a group of parents in a London borough recently, who have had that opportunity to have personal budgets for their disabled children. Opinion was rather mixed. Some parents really appreciated the freedom to do that, and others were very anxious that if you went in that direction you would have a kind of collapse of service, and then a market would not emerge. Obviously, part of the role of local authorities in that context is to help to create the market, but for me that was a neat illustration on a very small scale of something that is not without its problems or controversy. But you are right, you would have to change primary legislation if you were going to give a parent a budget share.
<Chairman:> We will now move on.
Q<30> <Annette Brooke:> I have to confess that I am totally bemused by the number of targets, so I hope that you will lead me through the maze, as I see it. I understand that there are 26 indicators for the five main public service agreements, a further responsibility for another 13-cross-departmental, I presume-and then the six departmental strategic objectives are underpinned by 80 PSAs. Are you trying to measure too many things here?
<David Bell:> If we take the public service agreements, the PSAs, under the 2007 settlement, there are 30 cross-Government PSAs and those have illustrated a significant shift from the previous PSAs, because they are genuinely cross-Government/cross-departmental. Each Department is allocated a lead role for a number of PSAs. We have a lead role for five PSAs: improving the well-being and health of children; improving children's and young people's safety; raising educational attainment; narrowing the gap in educational achievement; and finally, increasing the number of children and young people on the path to success. We are responsible for those. As you say, underneath those sit a number of indicators that give a measure of progress in each. For example, if we look at safety, there are indicators to do with accidents in the home, road traffic accidents involving children and young people, and so on. All the PSAs have those indicators, as you say, and then for some of those indicators, there are specific targets. For example, we have targets for educational attainment for children at the age of 11, or at 16, and the like. It is, to use the jargon, a complex architecture and one of our jobs is to ensure that all those in the system, with whom we work, understand what the priorities and the PSAs are. If you take local government as an example, here we have the new innovation of local area agreements, which enable local authorities to identify within that large suite the things that they think are priorities, as well as priorities that are local and not national. So it is an architecture that can be explained, we have a clear description of what that architecture is, we have quite a bit to do to continue to explain that, but it is important to have that architecture in place that assigns responsibility for public service agreements to Departments. It assigns it to senior officials who have to lead it, it requires Government Departments to work together and it does set hard and at times very demanding targets. It is right that Government, not just in our Department but across their responsibilities, set those demanding targets to bring about improvement.
Q<31> <Annette Brooke:> Can you tell me if there is any degree of priority, or do you have to keep all these plates spinning at the same time?
<David Bell:> One of the reasons for moving to a smaller number of PSAs was to encapsulate those areas that were of most significance across Government. You might say, "Yes, but underneath that, you have all these targets and so on." It is an interesting question, because if you take the children's plan, which subsumes our PSAs, we have to move across many different fronts at once. You cannot say, if we focus on this one priority, everything else will be well, partly because there is a very significant interrelationship between what you do in one area of focus and what happens in another. Take the emphasis that we have given to early intervention-giving children a good start in life. You could say that that is at the top of the tree of priorities, but it can never be the only priority, because it has to be supported by the work that we are doing on children's health and well-being, ensuring that their safety is protected and making sure that they move from early education into a good school and get good teaching at the school. It is important to give a sense of the priorities, while recognising that we cannot move to a situation where there are only one or two priorities. This area of children's services is complicated, so we have to see those interrelationships between different priorities, or we will not achieve what we want to achieve.
Q<32> <Annette Brooke:> Can I backtrack to the relationship between the money and the priorities? There are so many priorities. Also, with the cross-departmental shared targets, are there pooled budgets, or if the DCSF is the lead Department do we see somewhere in those figures all of the money that has been attached to that particular target?
<David Bell:> Perhaps Jon and I can try to answer that together. As far as the PSAs are concerned, as we said in our answer to Mr. Chaytor, we have been very clear what resources are required to achieve what we want to achieve. In fact, it was a very important part of our spending review negotiations with the Treasury to be clear that we were assigning money to particular PSAs or targets. There had been a wee bit of a tendency previously not to do a rigid analysis, saying, "Well, what kind of money do you need to achieve this?" We have now done that and it was an important part of our PSA process, so we can identify the sums of money attributed to any of the PSA targets. As far as formal pooling is concerned, the answer is: not at national Government level, but we are seeing some examples of that kind of pooling at local government or children's trust level, where local authorities are putting together moneys and then having the allocation of those moneys determined locally. But-this is a really important "but"-when it comes to the PSAs, such as improving children and young people's safety, we need to be very clear about what other Departments are spending or planning to spend to enable us together to meet our shared targets. Throughout the process, we need to have good conversations with the Department for Transport over the kinds of initiatives that it is taking to reduce road traffic accidents involving children, and very good negotiations with the Department of Health over a particular allocation of funding for tackling childhood obesity and the like. We do not have a wish list. Part of the responsibility of the PSA owner-the people who lead the PSA-is making sure that the resources are identified in different Departments to achieve the ends that we all want to achieve.
Q<33> <Annette Brooke:> So if I was to ask a parliamentary question on child safety, such as how much is being spent on that PSA, and I directed it to the DCSF, would I then get an answer that gave me the precise details from each Department?
<David Bell:> We could probably give you a breakdown of how much funding was allocated across different indicators, and we could probably see what Departments were allocating. Sometimes, of course, it is not quite that straightforward. If we take health, which is an interesting example, the primary care trust would not necessarily separate out to the nth degree the specific expenditure for children, as opposed to their other responsibilities, although some aspects will be specifically identifiable, such as funding for health visitors and the like. So we could probably give a good approximation of the allocations of individual Departments to achieve a particular PSA, but perhaps I will ask Jon to come in on this as well.
<Jon Thompson:> I would not have been quite that definitive. We definitely could tell you how much of our budget is allocated against the relevant public service agreements. To manage expectations, the total budget can be broken into the six departmental strategic objectives, so you can allocate all the money into those bits, but PSAs do not cover the totality of the Department's spend, so you then have to go to another level. We could answer your question from our perspective, but beyond the Department the information that we would provide to you would be less specific. We could not necessarily answer how much in total is spent on a particular PSA, but we could definitely tell you how much we are contributing.
Q<34> <Annette Brooke:> That is not a line that I planned to go down, but what I am interested in is whether as part of an overall planned budget tackling priorities, you are all working together saying, "Well, this is the right global sum to be spending on this particular PSA." I do not quite see how you come together. I can see each Department paddling its own canoe, and we can then say, "Oh that's great, that much money is spent." But I do not see how the allocation of finances on PSAs that cross Departments is planned.
<David Bell:> How these PSAs were put together is really important. We had to negotiate with other Government Departments to get their commitment to contribute to PSAs that we were leading. For example, we had to talk extensively to the Department of Health about the PSA on children's health. We had to talk very closely with the Department for Culture, Media and Sport about the PSA to increase the number of young people involved in pathways to success and positive activities. No Department was able just to put its name to a PSA being led by another Department without being clear that it had the means to support the achievement of those ends. That is a really important point. It is not just us saying, "Here is a PSA, we will cross our fingers and hope that other Departments will participate." The whole purpose was to involve the relevant Government Departments to demonstrate that they were committed to the achievement of those ends. To give you another example, there are other PSAs which we are not leading, but to which we might be contributing. Therefore, we are in a similar position of being asked by another Department to contribute. For example, in some of the work that the Department for Environment, Food and Rural Affairs is doing, it is interested in the contribution that we are making with regard to sustainable schools. We could not just say, "We will sign up to that, but not do anything about it." You have to be able to demonstrate, in the outcomes identified under each of the departmental strategic objectives, that you are contributing in a very practical way to the achievement of those ends.
<Mr. Stuart:> Could I come in on that last point?
Q<35> <Annette Brooke:> If I may finish this bit, I will be happy to move on. How would you rank how much joined-upness you have achieved? On a scale of nought to 10, with nought being absolutely no joined-up working, where are you at the moment?
<David Bell:> Not nought, and not 10.
<Chairman:> That is a bad answer.
<David Bell:> That was the beginning of my answer-I have my glasses to put on and take off so I can gain time to think. I think we are probably in the territory of sixish to seven, and I will explain why. The requirement to have these PSAs was an important driver, but perhaps much more importantly the very creation of the Department for Children, Schools and Families was about making those connections across Government. If we are interested in making this the best country for children and young people to grow up in, we as a Department cannot do that on our own. We just cannot. We therefore have in place formal dual-key arrangements on areas like juvenile justice. We have very clear, written, shared responsibilities with the Ministry of Justice. We are working very closely in areas related to alcohol abuse among young people, crime among young people, substance abuse more generally, and sport. In all those areas, we are working together really closely and well. Are we there yet? No, we are not. We have to be able to demonstrate, at national level, that we are able to do what quite a lot of local areas are doing themselves. A lot of local areas would say to us, "We are better at joining up services than you are at national level." I think that is an important challenge. I am quite optimistic about this, because what I do not see at all across government is resistance to working together to achieve these PSAs. It is early days, but I think the signs are good. Your question is a good one to ask me the next time we meet, and I will see whether we have moved up the scale at all.
<Chairman:> Graham, I will call you briefly.
Q<36 ><Mr. Stuart:> Very quickly, how can Committees such as this scrutinise what is a complex set of arrangements? You have said that you are not allowed to sign up to the PSA without being able to demonstrate what you are going to do. It is not obvious to me, from what we have been provided with, that we can see that for ourselves. We cannot easily identify your section, let alone the whole, and therefore there is a danger that we, as a parliamentary oversight body, are unable to hold to account whoever it is we should be holding to account for it.
<David Bell:> I think I can be, perhaps, more reassuring than that. We have broken down-and it is publicly available-all the indicators that lie under each of the PSAs, and beneath that where there are targets, and there will be public reporting of the progress we are making against these indicators and targets. Therefore, I would have thought that was a very good means by which the Committee will be able to look at the data and the progress we are making. Actually, this is probably a better way of tracking progress than we had previously. It is quite an interesting question for the Committee-and again maybe we can discuss this outside with the officials- how far you reflect that in the annual report, because we do have to publish our progress against the PSA targets in another place, but I think you will have hard data with which to hold us to account.
Q<37> <Mr. Heppell:> What you do not seem able to identify is what actual money is going to the PSA from every single area, from each single Department. Clearly, if you had some sort of target for something, whether it is child obesity or whatever, then surely the commitment has to be something more than just a woolly commitment. I would have thought it was possible to identify what resources each area is prepared to put into that commitment.
<David Bell:> Absolutely right. Our focus is on the outcomes. If we look at some of the outcomes that are specified under the PSAs, that is our focus. We are obviously interested in the input; how much money you are putting in, what kind of staff are you putting in, how you are helping the system to do these sorts of things. It is very, very clear, under this PSA suite, that when we have the various PSA boards that bring together the officials from across Government, if you are there from another Department, supporting one of our PSAs, you have to be able to demonstrate what commitment you are making. You might say we are putting in X sum of money or Y number of people, or we are working with local government to do this, or we are working with highway authorities if it is transport-
Q<38> <Mr. Heppell:> Where could I see that?
<David Bell:> What you can see is what we have called through the delivery agreement, so each of these PSAs has its own delivery agreement. When the PSAs were all signed off by the Treasury last November or December, we then had to put into place a delivery agreement that will spell out in more detail what the contribution of different parties will be. As Jon said, sometimes that will be specified in very hard financial terms; in other times it will be specified by, for example, a commitment to a particular kind of programme in a different Department. The important thing to say is: you cannot, as a Government Department-and I can speak personally-sign up to contribute to a PSA unless you have behind it the resources, whether that is money and/or people or programmes.
Q<39> <Mr. Heppell:> How significant are the 2004 PSAs now? Now that we have moved on to 2007, what happens to the old ones? For instance, the target to reduce the under-18 conception rate: is that still a target, is it still a priority? Or is it possible for those to drop off the end of the screen as we move forward?
<David Bell:> There will be a final sweeping-up report of the year across Government-what progress was made under the SR04 targets, because there is final validation that has to go into the data-which will be done quite soon. Some of the targets will have changed as a result of coming to the end of one spending review period. Others will have progressed on. We can do a kind of tracking back, to show you where we have carried forward a target. So, for example, the one about under-18 conception, that remains a very important target. Interestingly, I should say that about 120 local authorities have put that as one of their local targets under the local area agreements, and it is a good example of how local areas still see this as a very important priority. So we can show you the tracking from 2004 targets as they have migrated into 2007, but of course, when you see the full layout, you will see some targets that are new, as a result of these new PSAs. But as to the final report on SRO4, I am not sure when that is due.
<Jon Thompson:> I am not sure. Essentially, the change between spending review 2004 and the comprehensive spending review 2007 is that the number of public service agreements shrank considerably. Some of them, like the one you just quoted, become an indicator for what is now a much wider public service agreement. We can track them and would happily provide that information.
<David Bell:> We have a-I was going to say helpful, but that would be for you to determine-chart, an exploded diagram that lays out each of the PSAs, with all the indicators underneath them. If you do not already have it, it is quite good, although I have to say that I did have to use my glasses when I saw the first version. We will make sure that we give you one that you can actually read.
Q<40> <Mr. Heppell:> Some of the explanations for slippages have affected the local authorities that have not managed to achieve the target. First of all, I find it difficult to see where the link is between the targets that have been set and the local authorities, unless it is by local area agreements. Take the teenage pregnancy one, for instance. You say that 120 local authorities put that as their priority. Suppose they had not?
<David Bell:> Under the local area agreements process, even if local authorities do not identify something as one of their local priorities or targets, they are still accountable for reporting progress against it. It is not as if they are off the hook on that one-if I can put it that way. They have to be able to report progress. Just coming back to your opening comment on that question, Mr. Heppell, teenage pregnancies is a really good example. We know by very careful analysis of the data that some areas, otherwise similar, are showing very different conception rates. Our analysis suggests that there are actions that can be taken at local level that can reduce the incidences of teenage pregnancies. That is one of the reasons why it is really important for local areas to focus on particular priorities, so that you can bring together all the kinds of support that you need. We know, for example, on the teenage pregnancies one, that you need the local schools heavily involved, because that is about students' self-esteem. You need the public health authority closely involved-you need the right kind of advice to youngsters on contraception, choices and options. It is important to say that there are local differences, and it is down to the choices and priorities that the local areas actually make.
Q<41> <Mr. Heppell:> You have reduction of child poverty down as a PSA target. Why is that not in the departmental strategic objective?
<David Bell:> That is one that is actually led-shared, as it were. I think you spoke recently to five Ministers-I think it was a first here, when you had a panel of Ministers talking. It was your Committee?
<Chairman:> It was.
<David Bell:> Five Ministers, was it? That is a really good example of where there is leadership from three Departments-ourselves, HM Treasury and the Department for Work and Pensions. It is a really good example of us trying to join up our efforts. This is not just about what you do, say, in the tax and benefits system, but about the kind of support that you give to families and children's centres-the earliest intervention. Recently, just in the past 24 hours or so, the Government have announced some pilots to do new kinds of work when it comes to tackling child poverty. That is a good example of Departments coming together and working together.
Q<42> <Mr. Heppell:> To return to the 2004 to 2007 PSA targets, data on the PSA target for obesity in children under 11 was due to be reported last December. For some reason, we are told, it has not yet been assessed-that is the explanation. First of all, why has it not been assessed? Secondly, why have we now got a different target for 2007? Whereas before the target was to halt the year-on-year rise in obesity by 2010. The 2007 target is now to reduce the weight of overweight and obese children to the 2000 level by 2020. Why have we got a change, effectively? Is it something to do with the date you already have that we have not seen?
<David Bell:> To take the last point first. The Government's previous chief scientific officer led some work under the foresight project looking at obesity and that was published last year. That pointed out the scale of the task that we faced if we were going to deal with the problem. It is a massive problem of childhood obesity. Therefore, under the new SR arrangements we have set that as a longer term ambition. We have gone to 2020 and said that is the target. The kind of changes we are going to have to see made will take a longer period of time. In many ways the target is more ambitious than it was because we have said that by 2020 we will have reduced the proportion of overweight or obese children to 2000 levels.
Q<43> <Mr. Heppell:> Have you abandoned the 2004 PSA? Has that gone?
<David Bell:> No. There is still an obesity target but the target has changed. It has gone to what I said. We have said that by 2020 we will have achieved those levels.
Q<44> <Chairman:> So you feel it is stronger?
<David Bell:> I think it has got stronger. Because the scientific underpinning and analysis of this was much better as a result of the foresight project. It demonstrated clearly that you need a number of interventions that would affect all children: the way they eat, the sport or physical exercise that they take as well as quite targeted interventions for those children that are most at risk.
Q<45> <Mr. Heppell:> What I am trying to get at is that the one does not negate the other. I should still be expecting the year-on-year rises to halt by 2010. That is still a Government target?
<David Bell:> We have an interim target towards 2010 but our overall target is that we move to 2020. The 2010 target was simply to halt the year-on-year rise in obesity. What we have said under the new ambition is that we get back to the 2000 levels by 2020. We are saying now that the 2020 target is the target. That is not the same target, you are right. It is a virtue of this process that you can say that perhaps that was not the right target to have. We need to amend the target in the light of new scientific evidence, which is what we have done.
Q<46> <Mr. Heppell:> What you are telling us now is that the 2010 target does not apply. You are saying that you have had to amend it.
<David Bell:> Yes, we have amended the 2010 target. We have now got a new target around 2020.
Q<47> <Mr. Heppell:> What I am trying to explore is whether these targets, three years on, can just disappear or they can be amended. Are they meaningful targets?
<David Bell:> There is no hiding it. You might say, is that not a "failure" against the 2010 target? Our view was based on the scientific evidence and our analysis of the trends and of what had to be done, it was not sensible to stick to a shorter-term target, that is 2010, but rather to focus more on a 2020 target. I think that is good sense. We have not tried to hide the fact. This has been publicly debated.
Q<48> <Chairman:> It may be good sense to you but we live in a parliamentary democracy. If you went back to John Major and looked at the targets his Government set in 1995, who is still taking any notice of those? The fact is that if you put a target down now for 2020, you will not be here and we will not be here. Our job of calling you and the Department to account is difficult enough, now that the responsibility for children spreads across so many departments, and then you set targets to 2020 which most of us politicians realise means that you are almost unaccountable.
<David Bell:> This is an interesting example of a target that has been reassessed in the light of emerging scientific evidence and our analysis.
Q<49> <Chairman:> I am sorry, but you have not convinced me-I do not know about my colleagues-that the scientific evidence means that you have to shift the target to such a long time frame.
<David Bell:> I am happy to say a bit more about that in a moment. What you can do, however, is hold the Departments-and us principally, as the lead Department on this issue-to account for the actions that we are putting in place and in train to give us the best chance of achieving the 2020 target. There is a realism. As you know, some educational attainment targets are set over a shorter period. On something as complicated as child obesity, however, you cannot go against all the international trends and set a target that can realistically be achieved in a shorter time scale. What you should be asking is, "What are we doing now to address the longer-term issues?"
Q<50> <Chairman:> I am happy for there to be long-term targets, but people should be accountable year on year for progress on those so that Committees such as this can scrutinise them. As I said, yours is the lead Department-I hope that there was no demur on this-on anything to do with the child. That is what the Secretary of State has told the Committee.
<David Bell:> Absolutely.
Q<51> <Chairman:> We take that seriously. It is difficult enough to track you, scrutinise you and hold you to account across all these Departments, without you suddenly saying, "The new objective is to do something in 2020." That worries us a great deal.
<David Bell:> If I can refer back to my answer to Mr. Stuart, you will be able to track progress towards the target. It is not as if we are saying, "We'll not come back and discuss this until 2020." There will be reporting on progress against the target, and I am sure that you will hold us to account if you think that our actions or interventions are not appropriate or that we are going seriously off trajectory.
<Chairman:> Let us move on to schools funding.
Q<52> <Fiona Mactaggart:> I want to start with an issue connected with public service agreements. I am particularly interested in inequality. Probably only one of your PSAs-apart from the one on looked-after children-specifically relates to inequality, and that is the first one, which relates to improving children's communication and social and emotional development and reducing the gap between children in the most disadvantaged areas and other areas. However, that is the one that you have gone backwards on.
<David Bell:> If I might say so, it is not the only one. We now have a free-standing PSA on narrowing the attainment gap, and this is the first time that we have had a free-standing focus on it. We know, and we have said publicly, that there have been data-capture problems, and that has been accepted by those who have looked at the issue. However, we recognise that this is a really important issue. One of the things that was announced in the Children's Plan was additional targeted funding for the most deprived two-year-olds to give them a better start on communication and social skills. So we do realise that that is a significant point. There is also the impact of children's centres. One of the criticisms that the National Audit Office made of the children's centre programme was that although it offered lots of children great opportunities, it was not necessarily getting to the hardest-to-reach youngsters. One of the things that we have done there is to ensure that all children's centres have outreach programmes to get at the youngsters we need to get at. So in areas where we have concerns, and where we might have gone back, we have to say, "What can we do differently to get a better result in the future?"
Q<53> <Fiona Mactaggart:> Let us leap forward to schools funding, because local authorities are damping the allocation that they make in relation to inequality. According to a report produced by the Institute for Fiscal Studies for CfBT, the consequence is that secondary school pupils on free school meals get about 50% less than they would if your inequality measures were carried straight through, and primary school pupils on free school meals get 100% less because of the equalising effect at a local level. What are you doing about that?
<Jon Thompson:> The situation is that because of the double formula system, those issues are for local discretion and for discussion through the schools forum. The Department's policy is that we have a national system that distributes national funding, and it is then for each local authority to consider that in the context of its local community, and decide upon its own local formula for the distribution of those funds. The safeguard in terms of schools is that they are significant members of the schools forum, and if you want to change the formula then they, obviously, have a significant say. That results in a quite different formula, operating in different parts of the country. Our policy at the moment is that the differential system allows local communities to make those decisions.
Q<54> <Fiona Mactaggart:> But is it not the case that, in the schools forum, the loudest voices are often the most successful schools?
<David Bell:> That is not our experience of the schools forum, which is actually quite a lively place of debate. Over the years, schools have all recognised how important it is to have their voices heard, so it is not just a particular kind of school that has its voice heard there. As Jon said, this is a consequence-and, I think, a proper consequence-of our double formula system, whereby we have national priorities and set the total amount of money and then it is for local schools forums to discuss. We are at the earliest stages of our review of school funding. You asked me about that the last time I was here, Mr. Chairman. There is a wide group of officials, schools' representatives, local authorities, and so on. They have met three times, and are just starting to scope the territory. I do not know whether you might look on it as a separate inquiry, but I think it will be important and useful at some point in that process to advance those questions. The system we have at the moment is really set for the three years. It gives schools stability over the three year period, and any changes decided upon would take effect from the year 2011-12. There is an opportunity to contribute to precisely this kind of argument about the relationship between national funding and local formulae.
Q<55> <Fiona Mactaggart:> I am sure we will want to do that, but do you not want to have a formula that is transparent? I do not see that the present one is particularly transparent, when you have a national formula which weights deprivation very heavily and that is translated into a local formula which fails to do so.
<David Bell:> It is quite an interesting discussion. Sometimes we are accused of wanting to micro-manage everything at the centre, at national Government level, and here I think we have a genuine relationship between national Government's priorities and the funding that is spent in schools, as there is a separate grant combined with local choices that are made about funding for deprivation. I would be slightly anxious about suggesting that somehow there is no funding benefit or impact for youngsters in more deprived circumstances, because our analysis suggests that at the local level quite a large amount of the money does get to youngsters with particular kinds of needs. Schools forums are not cavalier about the way in which they distribute money, and I think you can go to almost any local authority in the country and find schools in really quite disadvantaged circumstances with children who are bringing additional funds into the school.
Q<56> <Fiona Mactaggart:> I did not say that there were none. I said that according to the IFS study it was half as much as it should be at secondary level and 100% less than it should be at primary level.
<Jon Thompson:> Our own research with 150 local authorities says that about two thirds of the money we put into the system had reached deprived pupils. That does not quite accord with the IFS.
Q<57> <Fiona Mactaggart:> We also know that it is very difficult to change fast enough when the circumstances of a school change.
<David Bell:> There are mechanisms to do that within individual formulae. I know that a particular issue you raised with us a year or so ago was about an influx of youngsters from different countries. We have put into play something called the exceptional circumstances grant, which will be triggered if there is more than a 2.5% increase in the number of children coming into a local authority area, because they are not speaking English as a first language. That is precisely to try to reflect that sometimes you have to react very quickly. Again, there is an interesting balance for us here. The principle of establishing three-year budgets is a really good one, and we have used it because it gives schools the chance to plan over the longer term. However, it would be naive to reject the argument that somehow in some places there is a real shift in the population caused by youngsters coming from outside. So, the exceptional circumstances grant-which is a three-year grant-is a good way of reacting quickly, without destabilising the formula on a year-by-year basis.
<Jon Thompson:> I was just going to expand slightly on that. There are three parts to the exceptional circumstances grant. There is an element for rapidly growing pupil numbers, for those areas of the country where there is huge growth in the population. There is a second element which is specifically related to English as an additional language, where there are migration issues, and the third element is specifically to help the relevant local authorities. There are structural funds to enable the local authority to respond to either rapid population growth or migration, as well as funding for the individual schools that are dealing with the pupils. So there are three elements overall.
Q<58> <Fiona Mactaggart:> Regarding transparency, I had a meeting recently with Ministers about how the schools in my authority are full to bursting, largely with a very changed population. It was clear that the officials in my local authority were not aware of the kind of funding that is available. How transparent is the funding to the people who might actually apply for the money?
<Chairman:> How quickly is it delivered?
<Jon Thompson:> The measurement is between the two school census dates in the course of a calendar year. That is very clearly set out in the dedicated schools grant publicity, which is summarised in eight pages. It is in paragraphs 16 through 19, and I think it is pretty clear.
<Fiona Mactaggart:> I am quite prepared to believe that they have not done their job properly.
<David Bell:> We would certainly not want to suggest that. It is a good point. This is an important issue. This is funding that local authorities might need in exceptional circumstances.
Q<59> <Fiona Mactaggart:> I was very struck by a sentence in the document that launched the schools challenge. It said: "The majority of secondary schools where more than half of pupils are eligible for free school meals are in the National Challenge." Are you saying that the majority of secondary schools with the largest proportion of deprived pupils are in that group of secondary schools that are failing to get more than a third of their pupils through with five A to Cs, including English and maths?
<David Bell:> Yes.
<Fiona Mactaggart:> That is the clearest evidence that I can think of that we are not properly tackling inequality.
<David Bell:> It is not the case, however, that every school in the most difficult circumstances does not achieve that benchmark. That is one of the reasons why the National Challenge exists. In other words, this is not a stretch that is impossible for any school in such circumstances. Therefore we think that it is important, taking account of the impact of deprivation, to do what we are doing under the National Challenge. It is important though, and we say this quite explicitly in the National Challenge document, that we corral, so to speak, the kinds of services that will make a difference. So this is not just a narrow school improvement programme. It is about making sure that youth services, children's social services and the sorts of services that will help youngsters to achieve more are available. We make no apology for setting that as the minimum threshold, not least because a lot of other schools in similar circumstances are achieving higher results.
Q<60> <Fiona Mactaggart:> What would you think about a school that moved in four years from one in 20 pupils getting five A to Cs, to half of the pupils getting five A to Cs, although not all of them getting English and maths? Would you think that that school was doing well?
<David Bell:> I would think that that was a school that was on a positive upwards trajectory. I would, however, ask the question about English and maths. A school can be making that kind of progress but all the students may still not be achieving-even at that threshold of 30%-English and maths. I would deduce, in the hypothetical circumstance that you describe, that that was a school that would be well placed to move through the threshold and onwards. That is why we have been quite careful in how we described the National Challenge schools. We said that they will be in different categories. Some will be on that upward movement and are expected to be through and out of the National Challenge threshold, but others will require more significant support and help.
Q<61> <Fiona Mactaggart:> The school that I just described was on the National Challenge list and, like every school in Slough, has a large number of children for whom English is a second language and who therefore have additional challenges in satisfying the English requirement, compared with those in other local authorities. The head teacher emailed me in the last two days to say that parents who had put in to join the school next year-and in many ways it is truly improving-have pulled out, and are looking for other schools, because of the way the school has been categorised by being putting in the National Challenge. How carefully do you think about that at the point of publicising it? We are, of course, a selective local authority.
<David Bell:> We thought carefully about the impact, but we also thought carefully about the need to ensure that all schools achieve the 30% minimum on the five-plus A to C grades. Frankly, from our point of view, that had to be the driving motivation. I happened to visit a school recently in a London borough which had also been in the National Challenge list, where they were telling a very positive story about the improvements they were making. It sounded similar to the one that you described. They were quite close to the threshold of the five-plus A to Cs and just saw this as the next step in the progress that they are making. Speaking to that head teacher, his view was, "How can we argue against setting a minimum threshold of 30% of the youngsters achieving five-plus A to C grades, with maths? That is what they need."
Q<62> <Fiona Mactaggart:> That was not a school in a place with grammar schools where 30% of the children are selected out.
<David Bell:> It was a selective London authority and this was one of the secondary modern schools.
Q<63> <Fiona Mactaggart:> Is there a London authority which is 100% selective?
<David Bell:> Not 100% selective, but this was a selective school in a selective authority.
<Chairman:> I am minded to call Paul on this second section of questions, but do you want to ask a quick question, Andy, on something that has transpired?
Q<64> <Mr. Slaughter:> Further to what Fiona was saying, and to see whether I have understood the deprivation issue, a substantial proportion-quite a noticeable percentage-of the schools grant is specifically dedicated to tackling deprivation. Are you saying that once that is allocated, whatever formula you use, you have very limited controls for determining either at LA level or at the school level whether it is being properly applied? That is the first part of my question. Secondly, the main target outcome is presumably to improve educational performance, whatever the route to that is. Even if you are not able to control how the money is spent, are you able to assess whether it achieves the results you would expect? If it does not, what do you do then?
<Jon Thompson:> I will say something about funding before we deal with achievement. The national system allocates the funds. It has various safeguards. Those safeguards do not specifically relate to deprivation. The safeguards relate, for example, to the fact that at the local level, 85% of the local formula must be driven by the number of pupils in the school. At one end there are some safeguards for children with particular special educational needs, or statements, which may attract funding, but that may well depend on the local formula. Some have thresholds at 10 hours and some have higher thresholds, so there is additional funding. We come back to the principle that the policy of the double formula system is that those are issues for local decision and local discretion to decide, to give maximum flexibility to local communities and to local schools about how to use the funding to achieve for local people. That is the principle of the system. We try to provide maximum flexibility to schools to use the funding in the way in which the local leadership, governors and head teacher wish to apply it.
<David Bell:> If I follow the logic of the argument, it is for individual schools with their delegated budgets to decide how best to spend them, and our accountability mechanisms, principally through performance tables and the Ofsted system, will enable us to know how well they are doing. So that we are clear about it, the schools do not get into the kind of detail that you may have been hinting at, where you would ask, "What is the absolute connection between the amount of money spent and the outcomes achieved?". They tend to focus largely on the outcomes. We have measures of both the absolute outcomes-in other words, the percentage of children who are achieving 5 or more A to C grades-and the progress that the students have made. That is how the system works, from national Government right down to the level of the local school's accountability.
Q<65> <Mr. Slaughter:> So you are trusting LAs to comply with Government targets, although LAs may have a completely different philosophy for using a substantial proportion-10% or so-of a school's grant. If they decide to use it in other ways, which clearly they sometimes do, there is not much that you can do about it. Is any frustration showing, for example, in the recent decision to give extra money to secondary modern schools? If you are going to give extra money to those schools, presumably on the basis that they are disadvantaged compared with grammar schools in their area, you could look at other areas that do not have that formal spilt, but where there clearly is a two-tier education system, perhaps between voluntary aided and community schools or simply due to the way that the LA has decided to organise itself, and you could do the same thing.
<David Bell:> I have two quick comments, Mr. Chairman. We are not trusting in a naive sense. We are trusting in the best sense. We are saying that those are the decisions that have to be made at local level, and that the various interests represented in the schools forum will get us to a position, we hope, where the funding is allocated according to the local priorities. At an individual school level, it has to be right, with our principles of delegation, that decisions about the allocation of funding are left to governors and senior staff. We would fund particular kinds of schools in particular circumstances through the National Challenge grant. The more general review of schools' funding arrangements is ongoing and, as I suggested to the Chairman earlier, that may be a subject for further discussion, once some ideas begin to emerge.
Q<66> <Paul Holmes:> To return briefly to what Fiona started asking you, the Institute for Fiscal Studies says that half the money that you allocate for children in poverty does not get to them in their schools, and your figure is a third. Either way, a significant chunk of money, which you think needs to be spent on children in poverty, is not getting to them. Both of you defend that by saying that it is important to have local flexibility in allocating funds, yet you go over the heads of those local authorities by providing all this extra money for the National Challenge and saying that those poor schools need lots of extra money.
<David Bell:> We are saying in the National Challenge that we want all the local authorities working with the schools concerned to bring back their plans and ideas about how those schools would best be supported through the threshold and beyond. I think, as I said in response to Ms Mactaggart, that some schools will probably be very close to the threshold and will probably need very little additional support or other kind of intervention, while others will need substantially more intervention. I do not think that that is inconsistent with what we have done with previous programmes to support schools. We accept that there is a mechanism for funding the base level of every school in the way that we have described, but sometimes, in different circumstances, there will be a requirement for support over and above that. The two are not incompatible.
Q<67> <Paul Holmes:> But as a Department you say that you want lots of schools in every local authority area to come out of the local system altogether and be Academies or trust schools, totally independent and managing their own finances and all the rest. On the one hand you think it is important that local authorities and local schools work together and allocate the money, and on the other you say that you want as many school as possible to get out of that system.
<David Bell:> I have two or three comments to make on that. First, those are going to be local decisions that schools will make. For example, we know that in a number of trusts and Academies there is an interest in partnership, with the local authority looking at its strategic role and saying, "What kinds of schools do we need in our area?", alongside the needs of particular institutions. I do not think, again, that it is an either/or. It is entirely consistent with our view that local authorities should not be principally concerned with direct provision. The leadership, management, day-to-day accountability and responsibilities lie at school level. What the local authority should be thinking about is how best to secure its basic responsibility, historically, to provide a sufficient number of places, and the much more modern responsibility that it now has to secure the best kind of education. I think that that is compatible. What we have done at the national level is to give local authorities, schools and others in local areas the choice of a variety of ways to organise themselves to achieve the best results for the youngsters in that area.
Q<68> <Paul Holmes:> I still do not see how that answers the point that I was making. You say that it is important for the local family of schools to divvy up the money according to local decisions, but you want hundreds of schools across the country, and many within each local authority area, to opt out and become self-managing financial trusts or Academies with no role to play within the local divvying up of money, because they have taken their cash and gone.
<David Bell:> It is important to say-the National Audit Office confirms this-that we do not provide any significant advantage to schools in any particular category. Trust schools within the maintained system will obviously still be in the Schools Forum discussions and so on, but the budget shares relevant to Academies have to be tied to the decisions made locally. They cannot skew all that funding because of the choices that they have made. Some of them have not made such choices. Becoming an academy, obviously, is less of a choice than a self-governing school or a trust school would have, but nobody gets an added advantage by being in a particular category.
Q<69> <Paul Holmes:> Some of the figures on funding for Academies do not agree with that. Academies certainly get more per pupil in the first five years, when funding is protected. However, we will leave that for the moment. If, for example, a grammar school becomes a trust-if it now takes its own cash out of the pot and does what it likes-how will you ensure that it works in partnership with local secondary moderns? It is a trust. It is there to manage itself. Its only interest is looking after itself.
<David Bell:> A number of schools, grammar schools included, already work with other schools. We have been quite clear that the trust arrangements are a mechanism by which schools in one area-perhaps stronger schools, but sometimes not-will work with each other to provide the best kind of education. A number of grammar schools that were historically grant-maintained schools have now become foundation schools. They get their funding fair share, but as we said, under National Challenge. As we said in a number of our recent programmes, we want to move increasingly to a system where schools feel a responsibility to work with other schools in what they do. There are many hundreds of examples of schools working together, whether they are grammar schools working with other schools in the area, comprehensive schools working together, Academies or whatever. There are many examples of schools working together, whatever the circumstances.
Q<70> <Paul Holmes:> But there is no way that you can require that. Once the trust or the academy is up and running, you cannot require it to do anything.
<David Bell:> Certainly, in terms of the approval of trust arrangements and the funding agreements for Academies, we are clear about the responsibilities to others, but the same would be true of maintained community schools. In the end, we cannot sit in central Government and say, "If you're a community school in a particular area, you are required to do the following." Again, it goes back to the principle of local choice. The vast majority of head teachers have their first responsibility towards the pupils in their own school, but they want to look outwards. They want not just to assist the students in their own school but, as part of their local leadership role, to support other students in what they are doing.
<Chairman:> David has been very noble in holding back on his question about National Challenge, because we want to look at efficiency savings and productivity. Because of time constraints, I now call Graham on that.
Q<71> <Mr. Stuart:> I am trying to square your opening remarks to the Committee with the facts in front of us. Since 2000, there has been a massive increase in expenditure on education, yet the chief inspector of schools tells us that standards have pretty much stalled since then. I do not see how we can square those facts with your opening remarks, which seemed to suggest that significant and satisfactory progress was being made.
<David Bell:> The chief inspector, of course, is right that we have not seen the rate of progress that we saw in the earliest period. However, it is worth pointing out that last year we saw the best ever achievement by youngsters at 16 in their GCSEs, and we saw the highest ever level of attainment among 11-year-olds. The chief inspector rightly pointed out that the rate of progress has been slower, and it is easy to try to explain that away, although I would not. Some would say, "Of course, it gets more difficult if you set higher and higher targets. You move into circumstances under which more children might find it harder to achieve." We set those ambitious targets partly because if all schools achieved even what the top half achieve, we would be close to, or exceeding, our targets. We have not plucked them out of the air. We recognise that in recent years we have not made the progress that we should have made, or at the same pace, which is why a number of programmes are in place to keep pushing the pace. But let us not undermine the significant efforts and continuing improvements of recent years.
Q<72> <Mr. Stuart:> Nobody would want to undermine the significant efforts, but let us combine the chief inspector telling us that standards have stalled with the progress in international reading literacy study and programme for international student assessment showing that we appear to have fallen down, at a time of an astonishing explosion in expenditure on education stewarded by your Department. I still struggle to understand how you work out that overall the Department's performance has been good. Undeniably there has been great political will on the part of the Government to put in place the resources and to see outcomes, but I and the Committee, I think, struggle to see how the Department has delivered a real return on the vast increase in expenditure put in place by Ministers.
<David Bell:> I could demonstrate that in a number of ways. For example, about a decade ago, the percentage of 11-year-olds achieving the required level was in the high 50s, but last year it was in the high 70s. The number of schools failing was well into four figures, but we are now well below that-in the low 100s. The attainment of 19-year-olds, at level 2-the five-plus A to C equivalent-has improved substantially.
Q<73> <Mr. Stuart:> There are questions about whether you are measuring the same things. We have just written a report on testing and assessment suggesting that the narrowing of the curriculum and the teaching to tests has led to an apparent improvement, but that is not the same as a real improvement, although no one, least of all this Committee, would deny that there have been improvements in a number of areas. Owing to the high stakes and pressures on institutions, they have had to deliver and have learned how to work the system so that statistically their schools and institutions meet the supposed higher standards, without necessarily improving the learning experience
<David Bell:> I obviously read with great care your report on testing and assessment, and we shall respond in due course, although I hope not at 7.20 pm on the day before a sitting. The issue about testing is slightly separate, and I would challenge the argument that we might have achieved those improvements by narrowing the curriculum. The vast majority of schools use the greater curriculum flexibility now available to organise the curriculum to meet the needs of students. Furthermore, we should not apologise for students being better prepared for achieving more, whether at aged 11 or 16. The argument goes that youngsters are being taught to the test at age 11. Clearly, if that resulted in a complete narrowing of the curriculum, it would be worrying, but we know that if a child achieves Level 4 at age 11-the expected level for an 11-year-old-they have a far greater chance of achieving the five A to C grades later on. It is important, therefore, to maintain that focus on student attainment. On the statistics, the measures on English and mathematics were introduced partly in recognition of the fact that, despite the undoubted achievements and qualifications that youngsters were acquiring in other areas, English and maths form an important bedrock of future success. We have tried to adapt and change our requirements. Some people call that raising the bar, but perhaps for the reason you just cited in relation to international comparisons, we have to keep raising the bar, we have to keep demanding more if we are to ensure that our youngsters are well educated.
Q<74> <Mr. Stuart:> Yet at a time of massive increase in expenditure-education, education, education, as the Chairman of the Committee said, is the leading light of the Government-we have fallen down the league tables, our performance standards have stalled and huge revenues have been spent. I find it impossible to square those facts with your opening remarks. Has there been a fall in productivity from 2000 to 2007?
<David Bell:> According to the ONS survey, there was a 0.7% fall in productivity.
Q<75> <Mr. Stuart:> Each year from 2000 to 2007?
<Jon Thompson:> As the Chairman said earlier, between 2000 and 2006, the ONS conclusion was that productivity fell by 0.7%
Q<76> <Mr. Stuart:> I think it was 2007, so it was a long time. There was a year-on-year productivity fall at exactly the time that massively increased resources were put in. In the private sector, you would expect the exact opposite. You would expect, when you get a major investment opportunity, to deliver accelerated productivity improvement. How is it that your Department and its predecessor so significantly failed to deliver on what we would naturally expect?
<Jon Thompson:> As I understand the maths of the national statistics survey, it says that for the significant increase in inputs, there has been an almost matching significant increase in outcomes-as David said, significant rises in GCSE results and at age 11 and so on. The two are very closely linked, but when you do the exact maths, what you find is that productivity falls, but the graph essentially shows both increasing at a substantial rate. The productivity, therefore, remains pretty flat.
Q<77> <Mr. Stuart:> A fall of 0.7% each year for seven years is a significant fall. When we look at the bigger issue outcomes, picking up on Fiona's remarks earlier, many of us are interested in those who, because of deprivation or for other reasons, have historically been failed by the system. We want to see opportunity genuinely delivered to all. Looking at outcomes, we would look at NEETs, for instance. We want to get around possibly manipulable or alterable examination results. Maybe standards have been diluted, or maybe they have not. It is hard to tell. Let us look at real outcomes, at those at the bottom who end up not in education, employment or training. At a time of a strong economy and vast expenditure on education, how is it acceptable and how is it compatible with your opening remarks, to see that, if anything, the number of people in that position between 16 and 18 has increased, and certainly not dropped, in the 12th year of this Government?
<David Bell:> You are absolutely right to comment on the data in the report, but recently published statistics have shown a recent fall. That is not encompassed by the report.
<Mr. Stuart:> In one quarter.
<David Bell:> There is no denying the fact that youngsters who are not in employment, education or training present a very substantial demand. One reason we have tried to enhance what we have done, for example in the September period, the so-called September guarantee, is to give them the best opportunity possible. It is interesting to do the analysis. When you look at the breakdown between 16 and 18, not surprisingly there are more 18-year-old NEETs than there are 16 and a half or 17-year-olds. That gives us grounds for optimism, because it suggests that the majority of youngsters in that category are not choosing to opt out of any kind of education or training immediately after they leave school. What is happening is that the right kinds of opportunities may not be sustained for them. I cannot pretend that this is a straightforward, simple issue at a time when the economy is tightening and when there are all sorts of labour market pressures, but we are seeing some fall in the number of youngsters in that category, not reported, as you point out, in the Departmental Report. There is very vigorous activity on our part, in local government, in the Connexions service and others to find the best opportunities, so we do not end up with those young people as NEETs.
Q<78> <Mr. Stuart:> I suppose that what I am trying to get at is that, regardless of the percentage of people getting GCSEs, the major effort and focus has been to try to deliver for those at the bottom and tackle deprivation, because they were not getting a fair crack in life. If you look at whether young people have been given the skills and confidence to succeed, that bottom group has not moved a whit at the end of this sustained period and vast amount of expenditure. If you wanted to look at one measure of the results for your Department, particularly for those from deprived backgrounds, would NEETs not be a pretty good one to look at?
<David Bell:> That is a good measure to look at. It is moving in the right direction, but it is moving slowly. I do not think that anyone-
Q<79> <Mr. Stuart:> It is not moving in the right direction overall, is it? It might have done in the last quarter, but it went up in 2006 and down slightly in 2007. That is the general picture, at a time of high employment and before the credit crunch and all the rest of it bites. Do you have an estimate of where we could go if we have a tough time for the next two years? I feel for those who are Labour Ministers if, at the next general election, after spending all that money for the people whom they most wanted to help-those at the bottom, on the basis that the bright kids from the best family backgrounds generally get on okay anyway-for the people for whom they really wanted to deliver a change, they end up with much worse statistics. That has got to be at least possible if there is a downturn at the bottom. If that were the case, would it not be a devastating indictment of the performance of your Department?
<David Bell:> If it were the case that the figures continued to go upwards, you would be right in your conclusion. We are trying to ensure that for those youngsters who are in the most difficult circumstances, having left school not ready to progress into something else, we are doing all that we can to provide the right kinds of opportunities for them at the age of 16, through a range of projects and programmes. It is interesting that one of the consequences of more youngsters doing well in the system is that for those who do not do well, it almost becomes sharper and more extreme. If you look back over the last decade or so, what can be described as the entry-level requirements for almost any occupation have increased. We know that that situation is going to get better-or worse, depending on how you look at it. It gets better the more youngsters acquire more qualifications, but worse for those who do not have them. Trying to capture those youngsters in the September, before they fall out and get into the habit of falling out and staying out, is therefore important. This is not an issue that can move quickly or easily. That is why it is very important that the commitment to raise the participation age is there, to enable all the youngsters to benefit from further education and training.
Q<80> <Mr. Stuart:> Following Gershon and the target of £4 billion savings, your Department is claiming that it made £2.8 billion by last year and is claiming to be on track for the £4 billion savings. Those are significant savings and therefore there should be a large freeing up of resources for other frontline activity. Where is the money? We cannot see it. We cannot see it in your report, we do not see where all the new activity and investment is going as a result of those efficiency savings, if they are more than just some manipulative exercise.
<Chairman:> Jon Thompson, where are you hiding the money?
<Jon Thompson:> We all need to be careful there. The report fairly explicitly says this: you cannot equate £4 billion-worth of efficiencies as £4 billion-worth of cash that you can re-allocate back into the system. Indeed, the Committee has debated this in the past several times-what is an efficiency gain and what is not? In the spending review 2004 there were £1 billion-worth of cashable savings that you could put back into the system and they were used. Other efficiency savings are largely made up of savings of pieces of time, which are then used, but you cannot cash that in the sense that you can take the money out of the budget and put it somewhere else. The methodology has changed significantly in the comprehensive spending review 2007, where the majority of the savings now have to be cash. The most significant of those was the 1% efficiency assumption that was built into the minimum funding guarantee for schools. That is cash that you would otherwise have spent and that you now do not need to, and it amounts to over £1 billion.
Q<81> <Paul Holmes:> Can you clarify exactly how you measure productivity? I will explain what I am driving at. In the health service, if you spend more money on more staff in a geriatric ward, productivity would go down because the same number of patients would be dealt with by more staff, but the quality of the care would increase enormously. How are you measuring productivity when those figures suggest that it has decreased despite more money being spent?
<Jon Thompson:> The Office for National Statistics methodology, as I understand it, takes the number of young people in school and their GCSE achievements as an indicator of outcome and compares that with the money on the side of the input. You have a significant increase in the input into schools and a significant increase in the GCSE results, and the two are fairly closely related. Over the past 10 years both numbers have increased substantially, by around 70 %. When you put the two together, however, overall productivity falls slightly, by 0.7 %, as is contained in the report.
<David Bell:> You might say that this is quite an interesting issue, Mr. Holmes, with regard to the quality of what is provided, and that has been one of the really tricky features. None of us are running away or hiding from that productivity question, but we are trying to capture all of its complexity. To continue the analogy of the geriatric ward that you described, that might be like adding substantial numbers of non-teaching staff and thereby increasing the input. The outcome might have marginally declined because of the productivity measure, but you might say that the quality of experience for youngsters has improved, through one-to-one support, for example. It is a really tricky measure to get.
Q<82> <Paul Holmes:> I have two other questions. For the financial year from April 2007 to April 2008, you committed to make £4 billion of efficiency savings. In December you said that you had reached £2.9 billion, but when will the final figures be available?
<Jon Thompson:> Sorry, to be clear, that covers the entire three year period from 2005 to 2008, not just the one year. We had saved £3.3 billion at the end of the last quarter, and the final figures will be available in the run up to Christmas, as some of the measures relate to the capture of information about how teachers are being used in schools and such things as diary surveys. There is a time lag until the end of the current academic year, so the results will be published in the autumn.
<David Bell:> I should say that the other aspects of that are more modest in size and scale, but the Department has met the target of reducing staff numbers by 1,400, which we were asked to achieve. We are well on track to achieve the relocation of services outside London, so it is important to see that as part of a whole programme, although obviously the big numbers are in the examples that Jon cited.
Q<83> <Paul Holmes:> My last question relates to staffing. You set yourself a target of reducing the number of staff places by 1,960 and say that you have achieved 2,058, so what were those 2,058 doing? Were they doing nothing and you got rid of them with no effect, or have you transferred what they were doing to consultancies and quangos and is some of the money being spent somewhere else anyway? Are people double-jobbing like Jon is? How exactly have you got rid of over 2,000 staff with no effect on what you do?
<David Bell:> I see Jon's eyebrows raising a little. I think that there has been an effect, because obviously as our demands have increased there has been more pressure. About 500 of those members of staff, which is slightly more than the 2,000 that we cited, were Ofsted staff, because that was the contribution that Ofsted made. We have done a number of things. A large number of those people were in our Government office network, which has been scaled back substantially. Across the board in the Department we have simply cut back. Although it is sometimes easy to assume that there are thousands upon thousands of staff working on particular projects in the Department, people from outside are often quite surprised when they find that there are only two or three people working on a project.
<Jon Thompson:> The only other thing that I would say is that we have now got down to 2,606 staff, which in comparison to a £154 billion budget seems very efficient.
Q<84> <Paul Holmes:> One criticism that is often made is that Government Departments, when reducing staff places, increase the consultancy work and pass things on to quangos. Is there any truth in that for what you are doing?
<Jon Thompson:> Consultancy spend has been pretty flat over the past three or four years, to be fair. I think that we have some particular circumstances at the moment, such as the development of the contact point project, which is soaking up a fair amount of the consultancy budget. If that was not there, consultancy spend would have gone down, but at the moment it is pretty flat.
<David Bell:> I think the consultancy question is always an important and good question to ask. We have to make hard-headed business choices about when it is better to employ somebody and have them on the books than to pay them slightly more but have them there only part of the time. Although I understand that the issue is always subject to a bit of political knockabout, we just take hard-headed business decisions about where it is best to employ staff permanently, as opposed to temporarily.
Q<85> <Chairman:> You are saving money and staff through the changes at your Department and the Learning and Skills Council?
<David Bell:> Yes.
Q<86> <Chairman:> Many people are very worried about the transition. People are talking about the patient being dead but still on life support and asking when you are going to pull the plug. What are the implications? There is a lot of uncertainty about the next two years of this transition.
<David Bell:> Absolutely. I understand that.
Q<87> <Chairman:> Is this saving money? What is this turmoil in the LSC?
<David Bell:> That goes back to the machinery of government changes, with the split of responsibility pre and post-19, and Ministers' decision to have two bodies to do the funding, instead of having the LSC trying to straddle pre and post-19. At this stage, it is not possible to say what the details of the staffing consequences will be in the LSC. There are expected to be transfers of people into the local authority arena and into the national agencies. In terms of actual detail, however, we are not able to say what will happen case by case.
Q<88> <Mr. Chaytor:> Back to the National Challenge. Is each of the 638 schools under the threshold in the National Challenge?
<David Bell:> Yes.
Q<89> <Mr. Chaytor:> And eligible for additional funding?
<David Bell:> To go back to an answer that I gave earlier, it might be quite modest in some cases, because some schools will be on the margins.
Q<90> <Mr. Chaytor:> Funding is differentiated?
<David Bell:> We are going to make the decisions about funding when schools and local authorities submit their plans, which we hope to have by the end of July. We will assess them over the summer.
Q<91> <Mr. Chaytor:> But the Secretary of State has already said that secondary modern schools will attract upwards of £1 million of funding as a special category.
<David Bell:> Yes. We have been very fortunate in this programme to have secured about £400 million within our budgets, some of which was allocated under the Budget and some of which we re-allocated from within. The Secretary of State announced that we would want to allocate a particular priority within that total on the secondary modern side. We will have to look at that in the round against all the other demands, but he has made a real commitment to the secondary modern side.
Q<92> <Mr. Chaytor:> But the Department's method of categorising schools is fairly arbitrary, is it not? Not all schools in wholly selective areas are defined on your list as secondary modern, and many schools in partially selective areas are secondary modern to all intents and purposes, but define themselves as comprehensive.
<David Bell:> Not surprisingly, we have had these nuances pointed out by a number of players. We have to look at all that. What we do not want to do is to get into a position where particular schools feel that they are somehow being disadvantaged. We are putting quite a lot of additional money into this. Obviously, the categorisation will work through, and we will listen to what local authorities and schools tell us when they submit their action plans by the end of July.
Q<93> <Mr. Chaytor:> I understand that 40% of the 638 schools have CVA scores above the average.
<David Bell:> Yes.
Q<94> <Mr. Chaytor:> Presumably, it is inevitable that some schools will have A to C scores, including English and maths, of 29%.
<David Bell:> Correct.
Q<95> <Mr. Chaytor:> That is with an above-average CVA score. However, other schools, which are not in the national challenge, will have a GSCE score of 31% and a below-average CVA score. Why is the cut-off so arbitrary? Why was not CVA taken into account equally with the raw score at GCSE?
<David Bell:> To reinforce the point, we know that there are many improving schools, as measured by a number of factors in the national challenge list, such as the Ofsted report or the CVA score, but we felt that a minimum had to be established-some people might say that it should have been higher-in relation to maths and English. That was not an arbitrary choice; it is an important choice, given the centrality of English and maths. If a school was in the category just above the national challenge, as you described, it would presumably be looking very carefully at how to drive further improvement. We know that in some schools it might be hovering around the border, and there will be the impact of whatever happens in this year's GCSE results published in the autumn. We think it is really important that CVA is a good basis on which to build progress and success in English and maths, but there will be no apologies at all for saying that there has to be an English and maths benchmark. Ofsted, in its consultation on the new inspection arrangements, is suggesting something similar when it makes judgments that there has to be a minimum threshold in terms of the objective results.
Q<96> <Chairman:> Before we leave that point, should there not be an apology to some of the 600-plus schools which, as a result of the clumsy way the strategy was announced, felt pretty bruised? The way your Department launched that strategy hurt a lot of feelings and dispirited a lot of schools in the areas that some of us on this Committee represent-schools that were working hard, with good leadership. Surely that could not have been your intention.
<David Bell:> It was certainly not our intention to cause great offence and upset. Equally, the Department and the Secretary of State would make no apologies for saying that this is a really important national programme, and that if you are going to set a benchmark of 30%, clearly those below it will be affected by the announcement. That is a matter of fact. But we did not set out to cause offence. In fact, the Secretary of State has been very clear from the beginning that this is about helping schools to improve through the threshold and go on to further success. I hope that in the aftermath of what some people might have felt about the launch, people are now really focused on how they can get their plans together to get the support we think we, with their local partners, can offer to improve performance.
Q<97> <Mr. Chaytor:> The Department is going to spend upwards of £400 million over the next three years on this. To a large extent, though not entirely, the issue that is being tackled is one of large concentrations of hard-to-teach children in specific schools. Has a cost-benefit analysis been done to discover whether it would be cheaper to tackle the root cause of the problem, rather than spending £400 million to deal with the consequences?
<David Bell:> I would argue that our policies and programmes are designed to tackle the root causes. It depends how you define root causes.
Q<98> <Mr. Chaytor:> I would define the root cause here as the admissions policy that leads to certain schools having disproportionate numbers of hard-to-teach children.
<David Bell:> We are back to matters of local determination. I actually thought you were going to talk about the sort of support that youngsters and families might need, quality of primary education, focus on learning so that youngsters get to age 11 better placed. We see all of those as root causes. The admissions arrangements are set locally, and we have to say, "What are the consequences in the 600-plus schools, and how can we help those schools to improve?" That is why we would keep emphasising that this is an improving schools policy.
Q<99> <Mr. Chaytor:> You are just about to consult on the new admissions policy.
<David Bell:> We are doing that, yes.
Q<100> <Mr. Chaytor:> Are there not issues that should be considered here that may help the problem of the 638 schools?
<David Bell:> I know that admissions is an issue that has been of interest to the Committee on a number of occasions, and we are working on a consultation at the moment. Clearly, members of the Committee will want to comment on that. There are a number of important potential changes there, but we are consulting.
Q<101> <Chairman:> It is of great interest to this Committee that one part of the recommendations on admissions that has never been accepted by the Government and by your Department regards the role of the school commissioner. I understand that the school commissioner has provided a report on his first period that has not yet seen the light of day. The issue was really about the degree of social differentiation in school intake, and the broad remit which this Committee particularly wanted the school commissioner to have. We understand that this report exists in the Department. When will we see it?
<David Bell:> I know of this issue, but I cannot answer your question off hand. May I come back to you on that?
Q<102> <Chairman:> You do know that the school commissioner has written a report.
<David Bell:> I do indeed.
<Chairman:> And we have not seen it.
<David Bell:> Just to make the point, there is a lot of factual information and detail regarding the work of the commissioner. May I come back to you on that?
Q<103> <Chairman:> We would like you to give us his report, rather than coming back to us on it. You are in charge of the Department?
<David Bell:> I am indeed. And it is a great pleasure.
Q<104> <Chairman:> At the moment, would you like to publish his report or not?
<David Bell:> I need to consult on this a bit further before making a final decision. If you will leave me to do that, I will do it.
<Chairman:> Thank you for your attendance.