Examination of Witnesses (Question Numbers
1-19)
RT HON
ED BALLS
MP AND RT
HON JIM
KNIGHT MP
4 FEBRUARY 2009
Q1 Chairman: Secretary of State,
I welcome you and the Schools Minister to our deliberations. It
seems a long time since we last saw you, although we have seen
the Schools Minister many times. It is always a pleasure to see
Jim, and it is nice to have you here today as well. I understand
that you do not want to make an opening statement, Secretary of
State, so I shall ask you some questions. You came to office in
June 2007.
Ed Balls: I think
it was the first week of July.
Q2 Chairman: It seems to have
been a rather frenetic period since you became Secretary of State.
What have you achieved that you are most proud of to date?
Ed Balls: It is an honour to be
back. It seems like only a few hours since we last debated some
of the issues that we shall talk about today. You are right, it
has been a few months since I appeared before the Committee, but,
as you said, there are so many issues to discuss that we thought
that, rather than deliver opening statements, we should get straight
down to it. The Schools Minister enjoys coming here so much that
he asked whether he could attend today. I said that he would be
very welcome to come along—I knew that we would be discussing
Lord Sutherland. The permanent secretary was unable to come this
morning because he is at the morning meeting of permanent secretaries,
but he would have liked to be here. The biggest changes caused
by setting up the new Department have been The Children's Plan
and The Children's Plan: One Year On, and all the different
policies that they have brought with them. Such issues are not
in any sense an achievement of mine because they reflect what
has been happening over a long time since the Every Child Matters
reforms and before that at the time of Sure Start. The old idea
that schools focus either on standards in the classroom or the
well-being of children is dead and buried. I do not hear head
teachers in schools throughout the country suggesting that there
is a trade-off between those two things. Those whom I speak to
say that children who are safe, fit, healthy and happy are children
who learn well, but, if we are really to drive up standards for
all children, we must focus on the barriers to children's learning
not only in the classroom and during the school day, but in and
out of school. They say that we cannot do that without close co-operation
with parents and sometimes with children's health experts, sometimes
people from housing and people from Child and Adolescent Mental
Health Services. Rather than schools acting as atomised institutions
on their own and simply trying to raise standards for some children,
they are working together as part of the wider community to drive
up standards and promote the well-being of every child in the
schools. That is encapsulated in The Children's Plan and
will be at the centre of the legislation that we shall take through
Parliament in the next couple of months, which will extend the
duty to co-operate as part of the Children's Trusts to all schools.
Also, 21st Century Schools is promoting the well-being
of every child and tackling all barriers to their progress. That
is a big change compared with 10 years ago, and The Children's
Plan has been an important part of cementing that change,
although I would not say that it should take all the credit, and
nor should I.
Q3 Chairman: Thank you for that,
Secretary of State. You seem to be hanging a lot on Children's
Trusts and their development. Why is that?
Ed Balls: When you speak to parents
and, sometimes, to directors of children's services about issues
such as behaviour, truancy and the health and well-being of children,
they often say that they know that some schools in their area
really work with them and with other schools to make sure that
every child succeeds, but not every school does. Bringing all
schools into that discussion is important, as is accountability
for outcomes for children. When I speak to head teachers, they
sometimes say that they have a great relationship with Child and
Adolescent Mental Health Services, so if a child has problems
with behaviour that they do not understand, they can get specialist
help. Sometimes they say the same thing about housing, where they
are worried about whether a child will have a place to go to at
the end of the day. Too often, however, head teachers say that,
when they need those other services to support their work, they
are not always there. Sometimes, they do not know who to call
or how to get the support they need. I see Children's Trusts as
both ensuring that each child's needs are being thought of across
an area and that schools have a proper voice whereby they can
say that they need support from other services locally, as well
as a place where, if something goes wrong that falls between the
school, the GP or another local service, people can use the Children's
Trust as the place to investigate why it happened. If a parent
feels, for example, that their child's special educational need
or particular needs caused by the disability of their child are
not being listened to, they know that the Children's Trust is
the one place to contact children's experts, the health service,
schools and, sometimes, the police. We know that the Every Child
Matters agenda or broad outcomes for children cannot be delivered
without proper co-operation between services and parents. The
Children's Trust is the place to ensure that that happens, and
we shall legislate to put that into a statutory framework and
to make sure that everyone turns up at the meetings and that the
children and young people's plan properly incorporates the views
of all, including schools. The biggest lesson that I have learned
in the past year and a half is that I can travel around the country
for the next 10 years visiting examples of best practice—sometimes,
our Department wants Jim and me to visit only examples of best
practice—but the public policy challenge is to take the
best practice in one or in some areas and make it the universal
and common practice and expectation for every child in every locality.
The Children's Trust is our best way to take best practice and
embed it as common practice in every area.
Q4 Chairman: It would be unfair
to say to you, Secretary of State, that the Children's Trust is
your latest enthusiasm and that it has replaced academies.
Ed Balls: It would be unfair.
Q5 Chairman: Academies are now your
second favourite.
Ed Balls: No, I would not say
that. Children's Trusts have been in existence since 2004. We
thought that the Audit Commission report last autumn was a little
unfair, but the truth was that it reflected the state of Children's
Trusts a year to two years ago. That is when the fieldwork was
done. These were nascent and innovative, but different in different
areas, as sometimes happens in good policy making. We stated in
The Children's Plan a year and a half ago that we saw it
as the basis for ensuring outcomes for every child and proper
accountability. We stated that we intended to legislate. We consulted
on how to do that and the legislation is to be published this
week. That strengthening, making things statutory and requiring
all to be there have been the real train of our thinking, certainly
over the last year and a half. Within that, we are saying that
the current players from the local children's community must play
their part properly, but we are also extending the membership
of what will become statutory Children's Trusts. We will extend
the duty to co-operate as part of the Children's Trust to promote
the well-being of children to all schools. That will include all
academies and further education colleges, and it will be in the
Bill in statute, because all our schools have a duty to work together
to promote children's well-being. That includes academies. I am
keen to include academies partly because they are part of the
community of schools, but also because they can do a lot to help
us to teach other schools, as they have really succeeded in raising
standards, often for the more disadvantaged children in our communities.
I am keen to have academies as full players in Children's Trusts.
Jim Knight: If I may say so, in
the last 18 months we have seen a rapid expansion of academies;
we now have 130 open.[1]
We might not talk about them so much because we are not developing
new policy on them. That does not mean that, in implementation
terms, we are not spending an awful lot of time and energy in
driving forward their expansion in those areas that need it.
Q6 Chairman: Okay. I am ticking
off a couple of things. In terms of your enthusiasm, Secretary
of State, I have always thought that you were a great pragmatist.
You like to delve into an issue and evaluate it against the best
research evidence you can find. Are you going to consider doing
that in relation to something that has always been a taboo for
Secretaries of State on the Labour side—that is, considering
a system of vouchers?
Ed Balls: School vouchers?
Chairman: Yes.
Ed Balls: We have a funding review,
which is doing its work and will do over the summer. One of its
issues is to ensure that we have the right balance of funding
across the country, and a balance of funding for deprivation within
that, to make sure that we focus funding on areas of need and
on pupils who need more support. As you know, we have also encouraged
a choice of local schools for parents. We have wanted to make
sure that through, for example, choice advisers, parents have
the information to make informed choices. Through National Challenge,
we have intervened to make sure that every school can be a good
school. At the last election, the Conservative party proposed
a pupil's passport—an education voucher that would allow
pupils to take their voucher with them. While this is sometimes
represented as being a policy to tackle disadvantage, the truth
is—as we also saw with the patient's passport—that
the underlying motivation was to encourage a top-up fee on top
of the voucher. Very quickly, going down that road, you would
find that it entrenched disadvantage rather than advantage. So,
I have always been very sceptical indeed that that kind of market-based
voucher would tackle disadvantage. I think it would have the opposite
effect.
Q7 Chairman: When was the last time
the Department evaluated that kind of proposal?
Ed Balls: The Government's policy
consistently has been to be sceptical of education vouchers as
a way of trying to drive performance. We think that they would
entrench disadvantage and make it harder for parents from poor
families to get the school of their choice. I am not sure whether
there has been a formal evaluation of education vouchers; there
certainly has not been in my time as Secretary of State.
Jim Knight: There was the whole
nursery vouchers system in the late '90s that created a massive
paper chase—the Department has learned lessons from that.
Naturally, as part of the funding review, we look at ideas such
as pupil premium to see whether there is any merit in them. They
are full of inherent dangers because if we went with, as some
people might argue, a flat rate for everybody and then a premium
top-up, compared with the current system where we have quite significant
weighting of deprivation in terms of area-based funding, the danger
would be, in the end, having a huge redistribution of funding
to the shire counties and away from those areas that most need
it. As ever with funding, when we make change—we are taking
a lot of time over this review to allow us to make change—there
are winners and losers. We have to look at those things extremely
carefully. Naturally, we are not ruling anything out at this stage
and we are looking at all the options, but we have to approach
these things with a degree of caution and scepticism.
Q8 Chairman: Would it be helpful
if the Committee took evidence on voucher systems here and in
other countries? We have discussed that possibility.
Ed Balls: We would be happy to
participate, as always.
Chairman: I want to bring Douglas in
on this one, quickly please.
Q9 Mr Carswell: I shall be brief.
I am fascinated, Mr Balls. Is there any difference between your
position, as you have outlined it now, and that of Alan Milburn,
who was quoted in an interview in The Times recently as
saying that he is very much in favour of education credits or
vouchers? He was quoted in that same interview as saying that
his only criticism of the Conservative proposals is that they
"haven't gone far enough." Is there any difference between
what he believes, with his support for empowering education vouchers,
and your position?
Ed Balls: I do not think that
there is any difference in our commitment to tackling disadvantage
and breaking the link between poverty and lack of attainment.
The Conservative party fought the last election campaign on a
pupil's passport policy, which I believe, for the moment, has
been dropped by David Cameron—I do not know how long for.
At that time, Alan Milburn was the election co-ordinator of the
Labour party campaign and therefore was central to our decision
to oppose the pupil's and patient's passports. We are a broad
church and people are entitled to float ideas in any way that
they choose. I am confident, on the basis of the conversations
I have had with Alan over many years, that his focus is on tackling
disadvantage. That is why he opposed the pupil's passport, which
would have entrenched disadvantage.
Chairman: Okay, we will have a chance
to come back to that.
Ed Balls: I hope so.
Chairman: We would like to warm you up,
Secretary of State, on a range of issues. We are now going to
start looking at responses to the economic downturn. John, you
will open.
Q10 Mr Heppell: I think that the
Minister for Schools and Learners was here a fortnight ago. Before
him, we saw Graham Watts, Chief Executive of the Construction
Industry Council, who told us that investment was drying up and
that it was getting more and more difficult to get investors.
An hour later, the Minister rather brilliantly said, "No,
it is not drying up. We have new investors coming forward now."
But on, I think, 26 January, The Times reported that Birmingham
city council had stopped its Building Schools for the Future programme.
On the FE colleges rebuilding programme, Sir Andrew Foster, former
chief executive of the Audit Commission, is examining the programme
so far. I know that in my own area, where colleges have had quite
a bit of investment, they now find their programmes effectively
suspended. With the benefit of two weeks' hindsight, does the
Minister think he was wrong to say that investment had not dried
up?
Jim Knight: No, I do not. In the
intervening two weeks, we have done a deal in Tower Hamlets, so
deals are continuing to be signed because there is still funding
around. As I said two weeks ago, we are not yet out of the woods—it
is not the easiest of environments—but we are finding new
ways of attracting the funding and of making sure that the development
continues with BSF. As I said then, we have six new lenders coming
into the programme and European Investment Bank agreement bringing
around £300 million into the scheme as well. So far as BSF
goes, mostly due to the leadership of Partnerships for Schools,
we are negotiating our way through this. The issues in respect
of the Learning and Skills Council and FE capital funding are
different from those issues around sources of lending. We have
seen the dramatic increase in the amount of money being spent
on FE capital investment from a budget that did not exist 12 years
ago to more than £2 billion now. The work that Sir Andrew
Foster is doing is just reviewing the level of commitment. There
is a complicated interplay here. There was, perhaps, a little
bit of over-commitment on behalf of some aspects of the LSC that
needs to be reviewed to make sure that what has been planned is
affordable, and we need Sir Andrew's work to happen swiftly so
that we can carry on with those projects that are well advanced.
We need to be able to get on with it. Additionally, these are
independent educational institutions and they make a significant
contribution themselves. We need to be able to look at some of
those deals that separate institutions make, institution by institution,
and ensure that they stack up. Some of them have been asking for
a larger contribution from the LSC than they would have asked
for previously. That may be related to the economic conditions
and their ability to generate revenues from land sales, but given
the level of commitment and of finance—the amount coming
through from the LSC has been increased—the plans need to
be reviewed, and reviewed quickly, so that we can continue.
Ed Balls: As Jim said when he
appeared before the Committee before Christmas, capital markets
are going through a very severe period, and, given the changed
market conditions, all lenders are reassessing the kind of activity
that they can take on. As you know, in the case of FE, some of
the problems have risen partly because co-financing from other
private sector institutions and issues around the expected return
from land sales have changed the financial package. In the case
of the private capital markets as well, some of our school partners
in the private finance initiative are thinking about the kind
of finance they are willing to offer in a different way. As Jim
said, there are more financiers coming to us at the moment than
there were. If we do this sensibly—we are discussing with
the Treasury how to ensure that this happens—we believe
that we can continue to keep expanding the BSF programme. We are
confident that, if we get this right, we can keep the flow of
capital investment coming through. It is vital for our economy
that we are spending money on capital investment at the moment.
To propose substantial cuts in current or capital expenditure
now would be, in my view, economically illiterate.
Q11 Mr Heppell: To follow on from
that, why were BSF and the FE colleges not brought forward? I
recognise all the difficulties, but they were not part of the
£3 billion fiscal package, were they?
Ed Balls: We have an £800
million opportunity to bring forward capital spending from 2010-11
to 2009-10. We need to use the kind of project that can be brought
forward quickly and that is easy to procure in a more accelerated
way. So, we focused on the small to medium-scale capital projects
that local authorities will typically procure in relation to primary
and secondary schools. On the BSF side, Jim's judgment was that,
given the complexity of school reorganisation, an attempt to bring
that forward, although it could be done in part from a capital
spending point of view, would come at a substantial loss in terms
of the kind of educational outcomes that we want to achieve. We
all know, from our own constituencies, that the BSF discussion
is complicated. If you try to go too quickly and do not consult
properly, you can end up taking longer than you intended because
you have to start again. That has been an issue in a number of
areas. We were keen on BSF, which was about system-wide reform,
rather than simply about building schools.
Jim Knight: The same applies in
FE. The time it takes to assemble very large projects of that
sort, involving tens of millions rather than a few million pounds,
means that, in fiscal stimulus terms, they are not as effective
as giving money to local authorities and schools in smaller amounts,
where they can procure locally more easily. And, importantly,
much more quickly—getting the stimulus now rather than allocating
money when it still takes two or three years for it to be spent.
Q12 Mr Heppell: I think I understand
that, but I hope you understand as well the feeling among some
people out there. It almost feels as though the Government are
now not signing up to BSF and it has been examined under the public
value programme. What does that mean? On the FE sector, there
are rumours about whether there will be rationing in the future
and the tap will be turned off. Again, I refer to my own authority.
It feels that it has projects ready to go. It has planning permission,
but they are not given the go-ahead.
Jim Knight: John, I would anticipate
that we will be able to make announcements before Easter about
the reprioritisation of BSF for the wave 7 to 15 authorities.
That ought to give people comfort that our commitment remains
as strong as it ever was. Yes, this is something that the Prime
Minister talked about in his conference speech last year. The
commitment remains extremely strong from this Government. Obviously,
there are others in the House who want to cut BSF, but we remain
as committed to it as ever.
Q13 Mr Chaytor: Secretary of the
State, of the 35,000 new apprenticeships that you have announced,
how many do you anticipate being taken up by the private sector?
Ed Balls: We are using the drive
for 35,000 more apprenticeships in 2009-10 and the £140 million
we announced a few weeks ago to demand that the public sector
raise its game. The truth is that public sector take-up of apprenticeships,
with the notable exception of the Ministry of Defence, has been
poor. The statistics show that public sector organisations across
the country are half as likely as those in the private sector
to take on apprenticeships. Within that 35,000, while we will
wait to see the proposals that come forward, we would expect a
mix involving the public and private sectors. Our ambition is
that 20,000 would be public sector apprenticeships and the further
15,000 private sector. Partly, that reflects the nature of the
economy in 2009-10, but, as I said, it also reflects our desire
that the public sector raise its game. We have a process at Cabinet
level, discussing how we can increase the number of apprenticeships
through public sector organisations for which we are responsible—that
means in schools, FE colleges and the health service, as well
as in our central Departments. That is not something that we can
mandate, but we are ambitious to see more apprenticeships. I particularly
would like to see more apprenticeships for 16 to 18-year-olds.
If the Ministry of Defence can take on apprentices, I see no reason
why there should not be opportunities for young people to become
apprentice teaching assistants or for the health system to have
apprentices. I am not sure what the modern health service term
would be in this case, but I want to say orderly nurses—people
who might not have gone through to degree-level qualification,
but who want to do that kind of nursing service in hospitals.
We think there is a real opportunity here, across the public sector,
but obviously if we could overachieve on the 35,000 and get extra,
that would be great.
Jim Knight: It is worth adding
that we are today introducing the Apprenticeships, Skills, Children
and Learning Bill, which will, among other things, introduce the
apprenticeship guarantee to legislation. That is quite a key driver
for us in, again, galvanising the system to provide the apprenticeship
places that we need, particularly in the public sector.
Q14 Chairman: You have not responded
to our report on apprenticeships yet, have you?
Jim Knight: No, but we thought
that it was, as ever, a very helpful report and we will respond
shortly.
Chairman: I should think so, because
it is due tomorrow.
Jim Knight: Yes, so very shortly.
Chairman: Do you know that it is due
tomorrow?
Ed Balls: I think I am probably
the first person to say this: we hope that you find the ASCL Bill
a helpful response to your apprenticeship report.
Q15 Mr Chaytor: If the private
sector falls short of the 15,000, given the pressures on companies
at the moment, is there a case for revising the rules of apprenticeships
and making the arrangements more flexible, or reviewing the roles
of colleges in leading on apprenticeships? The old programme-led
apprenticeships have been run down, but there may be a halfway
house between a full-blown apprenticeship led by a private company
and the old programme-led apprenticeship, led by a college.
Ed Balls: On the broader point
first, these are critical months for our economy. In past downturns,
we have seen the public and private sectors both retrench on capital
investment and on investment in training. That was absolutely
the experience of the early 1980s. Some think that it would be
a good idea to repeat such cuts—I think it would be a terrible
mistake. Actually, apprenticeships are one way that we can help
the private sector to keep investing through the downturn. That
is why we launched our national advertising campaign on Monday,
with Alan Sugar. We are doing a series of events around the country
to encourage more employers to take up apprenticeships, particularly
for 16 to 18-year-olds. The National Apprenticeship Vacancy Matching
Service started at the beginning of January. The National Apprenticeship
Service is now up and running and will be cemented in legislation
with the Bill. There are a number of things happening already,
and if there are further changes that we can make so that, for
the long term, it is easier to take on apprentices, we should.
If there are ways in which, during a more difficult period for
the private sector, we can help to share the burden to keep people
in apprenticeships, we are open to doing that. This is very much
an open book.
Jim Knight: In the last few days
I saw—
Chairman: Minister, may I warn you that
I am watching you, in the sense that you are tending to come in
before the Secretary of State and after him? You will not get
away with that again—you get one shot.
Jim Knight: I will remain disciplined.
Chairman: You can quickly come in.
Jim Knight: I am most grateful.
Just to say that, in the past few days, I saw something that came
over from the Department for Innovation, Universities and Skills—the
other education department—about private sector apprenticeships
and the scheme that we have for private sector companies to bid
in for some funding around new apprenticeship places. That was
over-subscribed. There was a lot of enthusiasm from the private
sector for it from a whole range of businesses—from small
to large—and enthusiasm for group training associations.
We are also working on a regional basis with those that were not
able to qualify and go through. So we have some good signs that
the focus that the Government now have on apprenticeships and
the message that is going out are having a good response from
the private sector.
Q16 Mr Chaytor: The apprenticeship
guarantees are due to be in place by 2013, which is the year in
which the participation age will be raised to 17. Is there an
argument to bring that date forward?
Jim Knight: In terms of the date
for the raising of participation age—and probably in terms
of the apprenticeship guarantee—we have to be realistic
about what is achievable. We have to get the ASCL Bill through
Parliament, for example, to complete the delegation to local authorities
on post-16 learning, to configure the break up of the Learning
and Skills Council and to have a national apprenticeship service
within the Skills Funding Agency that has a much stronger focus,
with a chief executive to drive forward the roll-out and take-up
of apprenticeships. If we accelerated that, I do not think that
we would have the same confidence that we could achieve the ambition
that we set out in the Education and Skills Act 2008 and are furthering
with the ASCL Bill.
Chairman: I want to move on quite quickly—so
quick and sharp.
Q17 Annette Brooke: I am going to
ask Jim a quick, local question. I had long discussions at Bournemouth
and Poole college on Friday and—making it a more general
point—the principal did not seem to have been given any
information about why the projects had been halted. Part of that,
one could guess, was that there was a capital receipt, but half
of the £150 million was totally independent of any sale of
assets. Is any communication now flowing from the Learning and
Skills Council, explaining what is happening and giving a timeline
for when we might hear something?
Chairman: I know that you are a local
Member of Parliament as well, Jim, so a quick answer to this,
please.
Jim Knight: I have some constituents
who go to Bournemouth and Poole college, but it is certainly not
in my constituency. My understanding is that DIUS and the Learning
and Skills Council have communicated with FE colleges about what
is going on and the nature of the Foster review. Obviously, I
cannot give the specifics about what might have been communicated
to Bournemouth and Poole college by the LSC locally. If I can
be of any help in getting more information, I am very happy to
do that.
Chairman: We welcome Derek to the Committee
today; this is his first question.
Q18 Derek Twigg: On the issue of
apprenticeships, clearly, I welcome the funding and the initiative,
but always with these initiatives and projects, the point is making
them work on the ground. By coincidence, I was talking to my local
college this week. A constituent who works there said that six
apprentice mechanics had all lost their jobs this week. She had
heard about this apprenticeship scheme, but could not find out
any information about whether she could access the money fairly
quickly to keep those people in work. I wondered whether you could
say a bit more about time scales for getting money to the coal
face quickly. Is there an issue not just about creating new apprentice
positions, but about keeping apprentices in jobs now, because
their employers are in difficulties?
Ed Balls: The extra allocation
of money and the extra 35,000 places are for next year—2009-10—starting
this April. There is a separate issue about how we can ensure
that young people who have already started apprenticeships can
continue in them if, for whatever reason, the private sector employer
gets into difficulty and cannot continue. Obviously, we want private
sector employers to continue to offer apprenticeships—that
is our first expectation—and to simply announce that the
Government will take over the burden would make it easier for
people, who would otherwise carry on, to transfer that burden.
In my conversations with employers, they have said that they want
to carry on with apprenticeships if they possibly can, but we
are actively looking at what we can do now—
Q19 Derek Twigg: In this financial
year?
Ed Balls: In this financial year,
to provide some kind of financial cushion—the cost of learning
could be transferred to the college system. The crunch issue for
the individual arises where they were previously on a guaranteed
apprenticeship minimum and that was being paid by the employer.
So we are actively looking now at what we can do to fill that
gap and therefore keep apprenticeships going, even if the employer
drops out. That is something which I am talking to John Denham
and James Purnell about at the moment, and we will move on that
as quickly as we can.
1 Note by witness: The correct figure is 133. Back
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