Public Expenditure - Children, Schools and Families Committee Contents


Examination of Witnesses (Questions 140-159)

RT HON. ED BALLS MP, DAVID BELL AND JON THOMPSON

16 JULY 2008

  Q140  Paul Holmes: But it does not say, "You will look at the remit and see whether it is appropriate". It says, "You will look at how the remit was delivered", which is a different thing.

  Ed Balls: I read you the remit a moment ago. It says "You will need to ensure the delivery of National Curriculum tests, make sure that they are valid and reliable against the policy objectives established by Ministers." We are asking Lord Sutherland to inquire whether there should be National Curriculum tests and whether they should have been externally marked, or whether they should have been done at Key Stages 2 and 3. That is the policy of the Government for which we are clearly accountable. We are asking him to look at whether the delivery of that remit was properly done by the QCA, but that includes the Department's communications with the QCA. If Lord Sutherland feels that the remit was improperly specified, and that contributed to the problem, then he will say that, and I will report that to Parliament.

  Q141  Paul Holmes: I have two specific examples of what you might have put in the remit. Ken Boston told us on Monday that in every year from 2003 onwards there have been problems with getting the tests in on time. Should that not have been part of the specific remit for employing a new contractor? Jim Knight said that a new contractor was having teething troubles, but it is a lot more than teething troubles; it is a shambles. As part of your remit for the QCA to appoint a new contractor, should you have been saying, "Why have we failed, and been on a knife edge every year since 2003? What do we do about it with the new contractor? What should be in that contract?"

  Ed Balls: We said to the QCA that we wanted it to ensure that National Curriculum tests were delivered successfully. In May 2008 we had an improvement in key metrics over 2007, such as quality of marking, reduction in the number of lost scripts and improved services to schools. So we were clear and more detailed than in the headline about what we would like to see the QCA deliver, and part of what Lord Sutherland will do is look at whether that was done. I am sure that he will also look at whether it was appropriate for us to suggest that we should have had improvements in the quality of marking. I am very happy for him to look at those issues. The problem, as I understand it, is that ETS made commitments to speed up delivery time and improve marker engagement, and it has been in some ways its inability to deliver on those improvements that has caused the problem. It promised that Key Stage 2 results would happen more quickly than in the past, and it is not managing to deliver on that commitment to improvement.

  Q142  Paul Holmes: Should not you as the Minister, and the Permanent Secretary, have looked at past experience and said, "Shall we look again at the quality threshold that we want the QCA to apply?" We have a long history of companies such as Capita, EDS, and ETS promising the earth—ETS put in the cheapest bid in this case, as we heard on Monday—and not delivering. ETS was in the press yesterday because it has a record of never hitting a single target it has promised in any contract in America. I am sure that you have applied some sort of quality threshold, learning from the experience of this Government with big companies such as ETS.

  Ed Balls: I have set out to you the fact that we wanted an improvement in quality, and it is true, as will be clear in Lord Sutherland's work, that our officials observed different stages of this process. It is all done according to procurement rules and with Office of Government Commerce oversight. It is all done with due diligence checks on past records of individual contractors. The decision was then made by the QCA, without reference to Ministers. Lord Sutherland will look at all the issues to which you referred, and at whether the QCA properly undertook its responsibilities to deliver the remit. It would not have been right or best practice for Ministers to have been second-guessing judgments made through the procurement process. That is not how things are done and it is not the proper way to do things.

  Q143  Paul Holmes: But, again—this is my final question—based on years of experience, should not you and the Department, as responsible people, have said, "We have a long experience of these big private sector companies negotiating contracts with civil servants which they benefit from and the taxpayer loses out on"? Ken Boston emphasised on the radio this morning and to us on Monday that this is the start of a five-year contract, and there would be huge legal and cost implications to sacking the organisation. Surely, based on experiences such as those with Capita, individual learning accounts and other things, you should have given QCA the remit to ensure that the contracts were a damn sight more watertight.

  Ed Balls: And we did. We have had a great deal of experience in these matters, and after we arrived in government, in 1997 and 1998, we picked up the consequences of previous poor procurement processes, including those involving the Jubilee line and the Horizon project with the post offices. We have tried to put in place improved processes. PFI has dramatically improved things in terms of delivering on time and to budget. The OGC's job, with its expertise, is to ensure that procurement processes are properly followed. As I have said on more than one occasion, in this case, the OGC gave a green light to the QCA procurement of the ETS contract. If I get a green light from the OGC, you would not expect me, as a Minister, to second-guess its judgment of QCA's judgment of the ETS contract. That is what the OGC procurement process gateway reviews are for. We have had substantially improved value for money in the management of these contracts because of the way the OGC manages procurement processes. Lord Sutherland must tell us whether in this case those checks and safeguards were effective.

  Chairman: I do not want this to dominate our whole sitting. We shall have a quick question from Annette and then we are moving on.

  Q144  Annette Brooke: I think one could interpret from Ken Boston's evidence that this was an accident waiting to happen. What consideration, especially in the remit, has been given to the possibility that the current assessment load is simply not sustainable?

  Ed Balls: That was not my reading of Ken's evidence and I have not had that discussion with him. I exchanged letters with him back in March and April. I explicitly said that with new systems being put in place, it was important for us to monitor the situation. At a meeting with him on 2 June, I asked for reassurance that the ETS process was being properly managed. He explained that there had been some initial difficulties with marker recruitment and some of the original training processes, but that those were being sorted out and addressed. Both Jim Knight and I provided a number of answers to parliamentary questions, and letters from Ken, to Members of Parliament, to reassure them that the issues were being addressed. The first time that QCA told us that the test results were going to be delayed was 1 July. I want to know what happened in the weeks in between, which is why I am keen to see Lord Sutherland's findings. There are 10 million scripts and more than 1 million pupils are doing National Curriculum tests, so, of course, in weeks when the tests are done and marked, and the quality is being checked before the publication of the results—those things happen at the same time every year—the system is most under pressure to deliver. That is what Ken was saying on Monday. I do not think that he was saying—I do not think that he would be right to say it either—that the principle of externally assessed national tests is wrong. I did not get the impression that that was the Committee's view either, because your report on testing and assessment said the contrary.

  Q145  Chairman: But, Secretary of State, when you look at this mess-up and at the fact that, as Ken said, there has not been a full delivery since 2003, do you not think that perhaps Lord Sutherland ought to contemplate not having some vast private sector organisation running the system nationally, but splitting it up regionally or sub-regionally, much closer to home? That might be a better alternative. You would still get the national testing, but the delivery would be different. It would be nice to see the £165 million going elsewhere—perhaps to local delivery agents.

  Ed Balls: My concern was that contracting separately for different contracts to mark region by region would have been considerably more expensive. If Lord Sutherland advises us that the contracts and the contracting process should have been specified in a different way, that will be good. The question whether there should be national tests is for Ministers and your Committee to scrutinise. An advantage of single level testing is that there would be testing more than once a year so there would not be one moment at which the tests occurred. A complication of single level testing is that a number of levels of tests would be set simultaneously with teachers and schools deciding which test each child should enter. A more personalised approach to testing is a more complicated approach. I think that it might be a better way of testing, but there can be no assurances that it would be less expensive.

  Q146  Chairman: Do you think that you could be seduced into looking at national tests delivered locally and marked and assessed locally?

  Ed Balls: Tests are marked by teachers locally all around the country. Are we saying that the bureaucratic burden of marking the tests should be transferred to schools? My judgment is that a lot of schools would find that difficult to accept. In the case of Key Stage 1, we have moved to teacher assessment.

  Q147  Chairman: I am just trying to test you to see whether you are open-minded enough to say that you could look at these options.

  Ed Balls: At the very beginning, I said that the Committee and I agree, although many others do not, that the principle of externally assessed national tests is right. The question is how best that can be delivered. I said that I did not think that the current system was set in stone. I am keen to discuss with you ways that we can make progress. We have already made progress at Key Stage 1 and I am keen to do so at Key Stages 2 and 3. I do not want to go backwards on the principle, but I am happy to look at these issues in detail. I think that single level tests are an important opportunity, if properly evaluated, to make progress in a way that delivers more discretion for local teachers.

  Chairman: As I said, we must move on. David is going to start on school and college funding.

  Q148  Mr Chaytor: Is there any argument against moving to a system of direct funding of schools from the centre?

  Ed Balls: The argument is that that would take away local authority discretion, exercised through school forums. That is valued around the country by local authorities and they would feel it to be a further step towards centralism and ring-fencing that would not be appreciated.

  Q149  Mr Chaytor: But you are pressing ahead with the Academies programme, which extends direct central funding to more schools.

  Ed Balls: Yes, but the large majority of school funding is happening through the dual formula. I am not seeking to centralise education funding or accountability.

  Q150  Mr Chaytor: In respect of the discretion exercised by local authorities over deprivation funding, the recent study by the Institute for Fiscal Studies suggested that only 70% of the funding that the Government allocate for deprivation ends up in the individual schools. That means that 30% is creamed off by local authorities. Is that not a powerful argument for extending to all schools your favoured option, which has been seen in respect of Academies?

  Ed Balls: We obviously want the deprivation funding to translate through to the schools for which it is intended. That is an important part of our narrowing the gap agenda. There is £3 billion of deprivation funding in the dedicated schools grant. We want that to go to these schools. At the moment there is discretion at the local area level. Our analysis is that on average 66% of funding in the DSG (Dedicated Schools Grant) goes to the pupils for whom it is intended. We are monitoring what is happening this year, area by area. We are actively encouraging local authorities to raise that percentage. That is one of the things that we will need to look at in the review of schools funding that we are now starting. But we are not seeking to centralise education funding and to take away that discretion.

  Q151  Mr Chaytor: Your own figures show that 66% of the funding you allocate goes to the individual pupil.

  Ed Balls: Yes, and we would like to see that number increased. That is the nature of the dual funding formula. That is the nature of allowing discretion for local authorities in the allocation of these funds. I would rather that the percentage was increased. We know that schools with more free school meal pupils receive substantially higher funding. So there is a strong deprivation focus in the way we fund. Incidentally, our Academies programme contributes to that because given that Academies are disproportionately schools that take a higher percentage of free school meal pupils, they contribute to our focus on deprivation funding. I would definitely like to see that percentage rise.

  Q152  Mr Chaytor: The consultation on the review of schools funding has just finished. When do you expect to be in a position to announce your response to that consultation?

  Ed Balls: The review is under way. We have had three meetings of the formula review group. All the papers and minutes from those meetings are publicly available. We intend over the next year to work on development and then to go out to public consultation in early 2010 in order to have a formula ready for operation from 2011-12.

  Q153  Mr Chaytor: So there will be a further round of consultation.

  Ed Balls: There will be a further round of consultation once we come forward with the proposals. We have said from the beginning that this is a review of funding for the period after the spending review which is from 2011-12 onwards. For that to be effective, we need to consult in 2010. So we can take some views and then do the work over the next year.

  Q154  Mr Chaytor: Would you accept that when the funding formula was changed previously, I think when Charles Clarke was Secretary of State, and when certain schools in certain local authorities resisted those changes and the Government were forced to halt the improvement to fairer funding, it set in stone for about six years any move to get a more accurate reflection of deprivation across local authorities?

  Ed Balls: As I said, one of the advantages of the Academies programme is that it enables us to increase our focus on deprivation in some of those local authority areas. The pockets of deprivation money over and above DSG contribute to that, particularly in rural areas. We are actively each year—particularly this year—working with local authorities to try to encourage them to increase the percentage. I do not think that it is set in stone. I am not satisfied with 66%, but that is the reality of a partly devolved funding system for schools.

  Jon Thompson: There is a range of other factors, one of which is about the stability and the certainty for schools over a medium period. The other is about transition from one system to another and how, if you want to increase deprivation funding to a range of schools, you take it away from another. You need to consider both the stability and the transitional issues. Making a change in the system, even one as big as this, involves a range of other factors that need to be considered at some length.

  Q155  Mr Chaytor: But this is a process that started in 1998?

  Jon Thompson: Yes.

  Q156  Mr Chaytor: May I ask about 14-19 funding? The document Raising Expectations discusses comparable funding allocated for comparable activity in respect of 14-19 funding. Does that mean that the Government will finally establish absolutely equitable funding between sixth forms and colleges for the same courses and activities?

  Ed Balls: That is the direction that we have been seeking to—

  Q157  Mr Chaytor: Will the process of convergence continue?

  Ed Balls: The process of convergence will continue. I cannot—

  Q158  Mr Chaytor: And does comparable funding mean equal funding?

  Ed Balls: Because we are still looking at the results of that consultation, we are not in a position to make detailed announcements at this stage, but we are seeking convergence and a level playing field, and that is the direction in which we intend to move.

  Q159  Mr Chaytor: One other thing on Raising Expectations. The 2006 Act contained a presumption for sixth forms to expand or schools to introduce new sixth forms. It also had a presumption for colleges to expand. Raising Expectations introduces new powers for local authorities to reorganise 16-19 provision in their areas. How do you reconcile the apparent contradiction created by the presumption for individual schools to expand, the encouragement for schools to become Academies and trusts, and the reintroduction of powers for local authorities to reorganise the whole structure?

  Ed Balls: The 14-19 reforms that we are putting in place depend on effective collaboration. The new responsibilities for local authorities to fund and deliver 14-19 provision require them to ensure that arrangements for effective collaboration are in place. That does not mean that schools that want sixth forms should be prevented from having them. I am sure that all of us, where it makes sense, would like schools to be able to make their own decisions, but if those decisions are clearly contrary to the collaborative plans for 14-19 education, there needs to be a check. That is what we are consulting on in Raising Expectations, with a right to appeal. It is just not possible for schools to go it alone on 14-19 provision and make the system work, so it is a new arrangement.



 
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