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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