29 Apr 2014 : Column 173WH

29 Apr 2014 : Column 173WH

Westminster Hall

Tuesday 29 April 2014

[Mr Philip Hollobone in the Chair]

Schools Funding

Motion made, and Question proposed, That the sitting be now adjourned.—(Elizabeth Truss.)

9.30 am

Mr Philip Hollobone (in the Chair): Before I call Mr Robin Walker, in the interests of good order, I have two announcements to make. First, the screens in the middle of the Chamber are not working, so, to see the time, Members will have to refer to the screens at either end of the Chamber. Secondly, I believe that a lot of Members wish to speak. May I ask those who wish to speak to rise now in their place?

Several hon. Members rose—

Mr Philip Hollobone (in the Chair): Thank you. My supplementary point is that it would greatly enhance the chances of everyone getting called if those who wish to speak do not intervene on other speakers. I cannot enforce that, but that is my encouragement, so that everyone gets in.

9.31 am

Mr Robin Walker (Worcester) (Con): It is a real pleasure to open this debate and to see such strong support from Government Members. It is a particular pleasure to speak again about a campaign that has been central to my career as an MP, and it is good to do so during the Government’s consultation to do something that no Government this century have done: to help the lowest-funded education authorities and provide a minimum level of funding to those who have suffered from unfairness for too long.

I am grateful to the Backbench Business Committee for granting the debate and for the cross-party support that helped to secure it, which ranged from my hon. Friend the Member for Stafford (Jeremy Lefroy) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) to my hon. Friends the Members for South Dorset (Richard Drax), for North Devon (Sir Nick Harvey) and for Cambridge (Dr Huppert) and the hon. Members for Bolsover (Mr Skinner) and for Scunthorpe (Nic Dakin). F40 is and always has been a cross-party campaign, and as we celebrate some measure of progress today, I acknowledge the role played by Members in previous Parliaments, such as the former Member for Stafford, David Kidney, who led the campaign for many years.

Jeremy Lefroy (Stafford) (Con): I congratulate my hon. Friend on securing this debate. I apologise for intervening so early, but he mentioned my predecessor and I want to put on record my tribute to the work that he did. I point out that it is rather ironic that Staffordshire is one of the few counties that, despite this excellent move by the Government, has been left out. I am sure that my hon. Friend will return to that.

29 Apr 2014 : Column 174WH

Mr Walker: I wholeheartedly agree with my hon. Friend and I will indeed return to that. My hon. Friend the Member for Beverley and Holderness (Mr Stuart), as Chair of the Education Committee and over a long period, has championed this cause in this and previous Parliaments. Alongside them, Members of all parties and none in Parliament, councils, governing bodies, parent forums and unions have spoken up for the lowest-funded education authorities over the years.

I am grateful to the House of Commons Library, the Association of School and College Leaders and the Local Government Association for producing helpful briefs for the debate and, in particular, to the voluntary members and officers of F40 for the detailed work that they have put into informing Members. The F40 campaign has been running, representing the interests of the least-well-funded local authorities, since the Major Government, and this is the first time in all those years that it can celebrate a decisive monetary step towards fairer funding.

The previous Labour Government accepted the premise that the system for allocating school funding was unfair, non-transparent and in need of reform, but they did not have time to deliver on their consultation on a fairer system. The coalition Government have already delivered a new consultation, committed to a fairer and more transparent formula and delivered new, simplified local formulae, as well as the pupil premium, which is a better system for targeting deprivation than what went before. Until recently, however, F40 had won the argument for changing national funding but had precious little to show for it.

Despite all the aforementioned changes and the Chancellor’s welcome commitment to greater fairness, the same list of authorities remained resolutely at the bottom of the funding tables and, year after year, the gaps between those authorities and some of their better-funded neighbours grew bigger and bigger. F40’s long, hard campaign to get a better deal looked as though it had won plaudits but no pennies; words but not pounds. The announcement by the Schools Minister in March of £350 million specifically to help the lowest-funded areas changed that for most F40 authorities.

Many hon. Friends in the Chamber today were with me in the debate initiated by my hon. Friend the Member for Gloucester (Richard Graham) in April 2012, when we welcomed the Government’s commitment to a fairer formula but bemoaned the lack of a down payment to begin its delivery. I think that it was my hon. Friend the Member for Hexham (Guy Opperman) who invoked the Chinese proverb of Lao Tzu, the founder of Taoism, who said that the longest journey begins with a single step. That single step has now been taken. Many parts of the country can rejoice at that. Of the £350 million targeted at helping the lowest-funded authorities, some £172 million—slightly less than half—is coming to F40 authorities. Cambridgeshire, South Gloucestershire, Northumberland and Shropshire all see gains of more than 6% as a result of the projected allocations and, of 34 current members of F40, 23 are seeing some uplift.

In Worcestershire, the £4.9 million of additional funding that we have so far been allocated—an increase of just 1.7%—has been queried by some as less than our due, but celebrated by most as the first major step forward after decades of underfunding.

29 Apr 2014 : Column 175WH

Sir Peter Luff (Mid Worcestershire) (Con): May I congratulate my hon. Friend on his significant role in achieving that breakthrough? It is, however, only an initial breakthrough, as he has said. As long as schools such as Prince Henry’s school in Worcestershire face significant real-terms funding cuts, despite those achievements, much more work needs to be done. I offer him every best wish in pursuing this excellent campaign into the future.

Mr Walker: I am very grateful to my hon. Friend for that intervention. He has been a long-term champion of fairer funding for schools, and I think that his constituent, Helen Donovan, would be very proud of the work he has done on that front. The Worcestershire Association of School Business Managers and head teachers and governors have expressed their appreciation for the progress made so far, but he is right that there is still much further to go.

Having made the campaign my No. 1 priority as a result of meeting all the primary school heads in Worcester during my time as a candidate—every single one of whom railed at the unfairness of the funding system—I promised them that further progress will and must follow. Some F40 areas have not however been so fortunate, and I want to ensure this debate hears the voices of those such as Warrington, Trafford, Solihull and Nottinghamshire who, despite being F40 members and languishing towards the bottom of the tables for per pupil funding, have yet to see progress.

Julian Sturdy (York Outer) (Con): I congratulate my hon. Friend on securing this debate and on all the work that he has done on this. One authority that he did not mention is York, which is moving towards the bottom of the school funding table. We have made great steps forward, and we must congratulate the Government and the Minister on doing that, but we are still some way off having that level playing field that authorities such as mine strive for.

Mr Walker: I wholeheartedly agree with my hon. Friend. I will come on to some of the reasons why that might be the case in my later comments.

Kate Green (Stretford and Urmston) (Lab): I thank the hon. Gentleman for mentioning the situation in my local authority, Trafford. He will be aware that Trafford in general is a well-off borough, but it has pockets of very serious deprivation. Does he agree that it is extremely difficult to deal with such deprivation when other neighbouring Manchester boroughs are so much better funded and that that puts our children at a real disadvantage?

Mr Walker: The hon. Lady is absolutely right. The evidence that we saw at the recent F40 conference was that, although there is little link between funding and overall attainment, there is a link between funding and raising the attainment of the most deprived cohorts. That is where the F40 campaign has always said that funding does make a difference and fairness in funding is vital to help those people. I completely agree with her, and I will come on to some of the urban areas represented by the F40, such as Trafford and York, that could have done better out of the consultation.

29 Apr 2014 : Column 176WH

Miss Anne McIntosh (Thirsk and Malton) (Con): I congratulate my hon. Friend and the Government on the moves that they have made. Will the Minister comment on what we are doing about special educational needs in that regard? Does my hon. Friend support reversing the Government decision whereby schools used to have more say over their budget, which in rural areas really helped those schools most in need?

Mr Walker: I hear what my hon. Friend says and I hope that the Minister will answer her point. I agree that giving schools greater say is important and very much in line with some of the Government’s policies.

The East Riding of Yorkshire is by most calculations very low in the table for school funding, yet gets only 0.3% through this allocation, and Staffordshire’s MPs have been among the most consistent in pressing F40’s case.

Michael Fabricant (Lichfield) (Con): I have a little list and Staffordshire is 12th from the bottom. Given that the F40 campaign began in Staffordshire, does my hon. Friend understand the surprise of all MPs in Staffordshire that we have had no uplift at all? Can he explain that?

Mr Walker: That is obviously for the Government to explain. I share my hon. Friend’s mystification, though, that a county so close to the bottom of the table has so far received nothing, and I hope that because consultation is continuing that is something that can be changed and that areas such as the East Riding of Yorkshire, Staffordshire and Trafford, which have so far missed out, may still have something to gain from the process. They certainly have something to gain from fairer funding.

In its consultation response, F40 has queried the methodology used by the Government in allocating the £350 million. One substantial difference between its calculations and the Government’s is the unit of funding used. F40 has tended to use the guaranteed unit of funding, whereas the Department used a new measure called the single basic unit of funding. I do not want the debate to be dominated by the technicalities of funding mechanisms. However, I understand that that technicality is part of the reason why the East Riding of Yorkshire may have done less well than Cambridgeshire, despite similarly low funding. Differences in the local approach to the allocation of high-needs funding account for much of the difference in the outcomes. F40 has asked the Government to look at those matters again, to ensure that each poorly funded authority gets a fair chance to secure better funding. I hope that the Minister will be able to look into that.

Sir Alan Beith (Berwick-upon-Tweed) (LD): I want to express support for the hon. Gentleman’s efforts, and I congratulate my hon. Friends on what they have achieved in government; they have done something that two previous Governments failed to do. Does the hon. Gentleman share my anxiety that nothing that happens in the consultation should undo the benefits that a number of authorities have now received—not before time—such as Northumberland’s extra £10.6 million?

Mr Walker: Absolutely. I completely agree. After fighting for so long for any improvement at all, it would be tragic if at this stage the benefits that the consultation

29 Apr 2014 : Column 177WH

brings to areas that have suffered for far too long were to unravel. However, there are one or two allocatons in the consultation that F40 would question.

Andrew Bridgen (North West Leicestershire) (Con): I thank my hon. Friend for his valiant efforts to get fairer funding for schools. I do not want to sound ungrateful for the extra £203 per pupil that Leicestershire gets, but we have jumped in the league table from 151st to 150th and continue to receive almost £1,000 less than schools in the city of Leicester. What does my hon. Friend think about that?

Mr Walker: Clearly, there is much further to go in the process of providing fairer funding. What has been done is a down payment—a first step. I am glad that Leicestershire, which has been at the bottom of the table for too long, is getting substantial uplift from the process, but that is by no means the end of the story. I share my hon. Friend’s concern about the need to go further. Indeed, by F40’s own calculations, it seems that Leicestershire, as the least-well-funded authority, deserves at least the 5% uplift that it is receiving. The East Riding of Yorkshire, the third worst funded, deserves more than its 0.3%, and Worcestershire—much as we appreciate our gain—has not done as well as might have been hoped, with an increase of less than 2%. Every other F40 member among the 20 authorities in the lowest position has had at least that uplift, with the exception of Warrington, Staffordshire and Solihull.

Higher up the table, more F40 members have missed out. There are some surprising gainers who, according to F40’s calculations, might not have been expected to gain so much. F40 does not mind—nor do I—that authorities outside its membership benefit by a move towards fairness; we should celebrate the fact that low-funded areas such as Wiltshire, Rutland and Poole have gained substantially from what has been done, despite not being members of the F40 campaign. Cornwall has also gained, although not as much as it might have hoped.

Harder to explain is the fact that some of the better-funded local authorities—high in the table of funding by GUF—are nevertheless receiving substantial uplift. In the words of the secretary of F40:

“We think it is odd that so many LAs in the higher part of the funding league table (too high in the league to be f40 members) are gainers, whilst LAs that are obviously more poorly funded have small gains or are overlooked”.

The gains made by Westminster, which is one of the 10 best-funded authorities in the country, and by Brent, Sutton and Bromley, the three biggest gainers in per pupil terms but all in the top half of the funding table, look much harder to justify from an F40 perspective. In its response to the consultation, F40 argued:

“We do not understand the rationale for adjusting for labour market costs—as they are already fully taken into account in the main funding distribution between local authorities.”

It said:

“We can see no case for supplementary funding for area costs. The research work undertaken by f40 has clearly identified that the very large funding differential between London and f40 authorities enables schools in London to employ significantly more staff; it does a great deal more than compensate for additional employment costs.”

29 Apr 2014 : Column 178WH

It is perhaps the inclusion of such an allowance for costs that has allowed relatively well-funded London boroughs to benefit from the uplift, while urban F40 members such as Warrington, Solihull and Trafford seem to have missed out. I ask the Minister to look at that carefully.

In previous debates, hon. Members from both sides of the House have set out their concerns about the challenges of rural sparsity and delivering education to sparse communities. F40 has always supported the idea of including a sparsity factor in the national formula and welcomed its inclusion for the first time in the new local formulae. However, without national funding in the national funding formula, there has been surprisingly little uplift from sparsity. In its consultation response, the group said:

“We agree that sparsity is potentially a useful means of targeting funding at small rural schools. Many authorities have not introduced a sparsity factor for 2014/15, taking the view that further work is needed on producing a viable model. We would welcome an evaluation by the Department on the approaches local authorities with different characteristics have adopted for 2014/15.”

Although the constituency that I represent is not a sparse one, it appears to suffer from a lack of funding because it is in a larger local authority that suffers significantly from sparsity. I think that the Government have further to go to meet the challenges of rural sparsity and to ensure that rural authorities are properly funded for the future.

Perhaps the most important part of F40’s consultation response is about the challenge that many of the lowest-funded areas still face:

“The Department will be aware that schools are facing major cost increases at a time of ‘flat cash’ funding settlements, particularly: September 2014’s 1% pay increase for teachers (typically, teacher’s salaries account for 65% of school costs)”—

in Worcestershire that figure is more like 85%, because of years of underfunding—

“The anticipated increase to non-teaching staff pay—which as yet remains unknown; The increase in the employer’s superannuation contribution from 14.1% to 16.4% from September 2015; The introduction of a flat rate state pension from April 2016, the impact of which will be to increase schools’ costs of in excess of 2% for teaching staff and most ancillary staff; For schools with sixth forms, a continuing reduction in sixth form funding; Energy, fuel and other cost increases”.

F40 says:

“We urge that these cost pressures are fully taken into account in the Spending Review for 2016-17 onwards. Without additional funding a typical secondary school will need to identify compensating savings of around £350,000, the equivalent of ten teachers.”

F40 schools, which have suffered from decades of underfunding, have no spare capacity to make such savings.

In meeting the challenges, we must recognise that March’s funding announcement was not and was never intended to be the end of the shift to fairer funding. As the Minister made clear at the time, it was a one-off measure to help those areas that were hit hardest by unfair funding and a precursor to more substantial reform. Ivan Ould, the chairman of F40, said in his response to the announcement:

“The additional funding is seen as a down-payment, or first step towards a new and fairer allocation system. This marks a huge step forward for our campaign for fair funding. The fact is that pupils and schools in f40 local authority areas have been

29 Apr 2014 : Column 179WH

dis-advantaged by an archaic system for nearly twenty years: they have been the poor relations in terms of the share of education funding.

This is a red letter day for members of f40 who can now look forward to a time when the injustice will end.”

F40 members will scrutinise closely the manifestos of each of the major parties, to see what they will propose with a view to ending the injustice swiftly and surely. F40 has always been a cross-party campaign, and we will look to each of the parties to deliver progress and will judge their manifestos by how clearly and within what time scale they commit to fair and transparent funding. Our funding has been unfair for far too long, and F40 authorities will not have endless patience for interim measures to ensure that better-funded authorities hold on to their advantage if that means holding back long-awaited justice for our constituents. We must have progress and we will scrutinise each statement of every party for what it can deliver.

I was not in the Chamber for the announcement of the £350 million for underfunded areas. Had I been there, I would have welcomed it, but I would have called, as I do now, for further progress. The debate is not a partisan one, but I was mildly disappointed by the Opposition Front Bench response on that day. In response to those who have argued, wrongly, that the first steps that have been taken are in any way partisan or designed to help coalition members, I would point out that many of the Conservative seats that have benefited, including my own, were held by Labour until 2010.

Michael Fabricant: My hon. Friend makes a powerful point. As he said, the F40 campaign was started by a Labour MP, David Kidney, in Staffordshire. Is he as surprised as I am to see just one Labour MP—no, two? [Laughter.]

Andrew Percy (Brigg and Goole) (Con): I am not one of them.

Michael Fabricant: Am I wrong? There are two. [Interruption.] Anyway, is my hon. Friend as surprised as I am at the lack of turnout from Labour MPs apart from the shadow spokesman?

Mr Walker: I am delighted that we have a Labour MP in the Chamber, arguing the case for her F40 constituency. I am also delighted that, in proposing the debate, I had the support of the hon. Member for Bolsover, whose constituency stands to gain 34 times as much as the Prime Minister’s. The hon. Member for Halton (Derek Twigg), who made critical points in the debate, stands to gain more in his constituency than does the Minister for Schools, who made the announcement about fairer funding. If every F40 authority were to benefit from the changes, the winners would also include the shadow Chancellor, the shadow Education Secretary and the shadow Health Secretary, so Labour has a strong interest in supporting proper reforms. We want to see them step up to the plate.

Kevin Brennan (Cardiff West) (Lab): The hon. Gentleman referred to me, so perhaps he will point to any part of my statement in the House at the time that was party political. There were no such remarks.

29 Apr 2014 : Column 180WH

Mr Walker: I would not claim that the hon. Gentleman’s remarks were necessarily party political, but many Members present at the time commented on his attitude to the announcement, which seemed to be negative.

Kevin Brennan rose

Mr Walker: The hon. Gentleman will have the opportunity to respond later.

The F40 campaign has been driven by many hon. Members on both sides of the House, and I am only one of many voices who have been calling for progress. I hope that we will hear those voices following up on that in the debate, but I also hope that we hear from all such Members recognition of the progress that has been made to date. I urge the Minister to listen particularly closely to the concerns of those long-suffering F40 areas that have so far missed out and to ensure that all the lowest-funded authorities get the fairest deal possible from the consultation. I urge her to keep up the pressure for progress towards a fair and transparent system of funding and to commit ever more firmly to real fairness in the years to come.

Bill Wiggin (North Herefordshire) (Con): I congratulate my hon. Friend on securing this important debate. Free schools is one area that is party political. I am sure that we all welcome the excellent progress made by the Government and that the funding formula for free schools has had a stronger impact on the lowest-funded areas than, perhaps, on the wealthier ones. Does he agree that the Government need to address that in F40 areas?

Mr Walker: Changes to the system for free schools and to the LACSEG—local authority central spend equivalent grant—a couple of years ago have produced some effects that have tended to hurt the lowest-funded areas more. That is a consequence of unfair funding, rather than of the changes, and the key thing is to get the funding system right, so that we do not have such pernicious effects in future. I thank my hon. Friend for his intervention, because it gives me the opportunity to welcome the Government’s decision to fund the Aspire academy in Worcester, a free school that is taking over pupil referral unit provision in the county, which is badly needed and supported by a wide range of secondary schools in Worcester.

I want our party to set down clearly in its manifesto our commitment not only to a fair, transparent funding formula in years to come, but to its rapid implementation. I am proud that, with the help of so many colleagues, I will be able to face the electorate of Worcester and say that we have won a better deal and that fairer funding is on its way, but the fight is not yet over—it has scarcely begun. We have secured the first down payment on fairer funding. F40 MPs must keep campaigning together to secure the real fairness that our schools, their teachers and, most importantly, their pupils have been denied for too long.

Mr Philip Hollobone (in the Chair): I thank hon. Members for that excellent start. To get all 10 speakers in, there will be a time limit of four and a half minutes each, which should leave the Front Benchers with 10 minutes each at the end of the debate. It will not work, I am

29 Apr 2014 : Column 181WH

afraid, if there are interventions. To assist Members, this nice bell next to me will be rung by the Clerk, which will indicate that there is a minute to go. After four and a half minutes, we will move on to the next speaker.

9.53 am

Mr Graham Stuart (Beverley and Holderness) (Con): Thank you, Mr Hollobone. It is a pleasure to serve under your chairmanship and to follow such a powerful, well thought-out speech by my hon. Friend the Member for Worcester (Mr Walker); he has done a sterling job since coming to the House in 2010. The turnout today is a reflection of not only the importance of the issue to our constituents, but the leadership that he has shown. He has shown that again today, with his powerful championing of the case.

The campaign for fairer school funding has been running for at least a decade. For too long, the extra costs faced by rural authorities have not been acknowledged properly by the funding system. A whole generation of school children, in places from Devon to Northumberland, have lost out. Seven years ago this week, I led a Westminster Hall debate on this very subject and it has become no less urgent since. As everyone in the Chamber knows, for many years the school funding system in England has operated on the basis of outdated data and in accordance with political priorities that channelled funding away from rural areas and into urban ones—based on politics, not need. In the 13 March statement on school funding, the Minister for Schools hit the nail on the head when he characterised the end result as

“opaque, overly complex, and, frankly, unfair to pupils, parents and teachers.”—[Official Report, 13 March 2014; Vol. 577, c. 427.]

The inequity is recognised across the political spectrum. In an article for The Guardian earlier this month, Fiona Millar—not exactly the greatest champion of the Government’s policies—admitted that

“the differentials between London and the rest of the country, which are often rooted in historical political decisions, are simply unfair.”

If Fiona Millar can see that, the case for change across the spectrum is overwhelming and needs to be acted on.

One does not need to look far to find glaring examples; the East Riding of Yorkshire is a case in point. It is a beautiful part of the world, but it does not conform to any lazy stereotype of rural affluence. Median gross earnings are below the national average and towns such as Withernsea, Goole and Bridlington have pockets of real deprivation. Mike Furbank, head of children and young people’s services at the East Riding council, has explained:

“As a rural authority we suffer the hidden deprivations of social isolation for children living in remote communities where families have limited access to services and the wider cultural life of the area.

These deprivations are not recognised in any formula and often the ‘goldfish bowl’ view of village life makes poor families unwilling to accept support or declare their eligibility.”

Andrew Percy: Will my hon. Friend give way?

Mr Stuart: With an eye on the Chair, I give way to my hon. Friend.

29 Apr 2014 : Column 182WH

Andrew Percy: I am grateful. Obviously, I am also grateful for the extra funding for the north-east, but my hon. Friend is right to highlight the deprivation of Goole, in the East Riding part of my constituency. Does he share my shock that local Labour councillors in Goole have attacked me for campaigning on the issue and for pointing out how much less well off Goole was, compared with neighbouring Hull and Doncaster, although we have the same levels of deprivation?

Mr Stuart: The aim of the Rural Fair Share campaign, which I co-chair and helped to found, is certainly to ensure that fair-minded Labour Members of Parliament see the case as well. We have to ensure that the split is not partisan; we are looking for a system that takes scarce resource and allocates it on the basis of need. At a time of austerity, it is more rather than less important to get those allocations right. Such reallocations may be politically difficult, but because no more money is being thrown at the system every year, the unevenness becomes more apparent as the tide goes down and creates a more difficult challenge.

The East Riding has some good schools, but, regrettably, too many indifferent ones. Last June, Ofsted reported that in the East Riding a child has only a 66% chance of attending a good or better school, compared with 79% in England as a whole. Only 38% of secondary schools in the East Riding are rated good or outstanding, compared with 74% in neighbouring North Yorkshire. If the Minister compares the number of good or outstanding schools in the East Riding with those in neighbouring similar authorities, she will see a stark differential. In the light of those numbers, I ask her to reflect on the methodology that the Government have come up with to allocate that welcome £350 million.

I am aware that, given my position as Chair of the Education Committee, I ought to keep my language moderate, but was the person who devised the system sober? The Government have put things off; the national funding formula will come, but they have decided—politically or otherwise—that, a year before a general election, a fundamental reallocation is perhaps not politically deliverable. The interim £350 million to help the poorest-funded authorities, however, is welcome. But why is the money going to authorities in London that are not among the poorest-funded authorities? My hon. Friend the Member for Worcester touched on that, as did my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith). We do not want to see the money stripped away from Northumberland; the Minister must have the courage, despite the publication of the allocations, to look again at the methodology.

The East Riding, because it was historically underfunded and had so many small schools, poured all the money it could into the schools block of funding and so had the lowest high-needs block in the country. The new methodology, however, looks only at the schools block. Under this intervention to help lower-funded authorities, what is the situation of the East Riding of Yorkshire—the third-lowest-funded authority overall when the whole quantum is considered? It is moving from being the third-lowest-funded authority to being the lowest-funded in the entire country. After many years of campaigning, that does not feel like a result. I ask the Minister to look again at how the money is allocated.

29 Apr 2014 : Column 183WH

9.59 am

Sir Tony Baldry (Banbury) (Con): In June 2013, the Chancellor of the Exchequer said clearly that current schools funding

“is distributed on a historical basis with no logical reason.”

I think we all agree that the facts speak for themselves and that there is no logical reason for the present funding system. My right hon. Friend went on to say:

“The result is that some schools get much more than others in the same circumstances.”

He further observed that

“That is unfair and we are going to put it right.”—[Official Report, 26 June 2013; Vol. 565, c. 311.]

The question that most of us, and our constituents, want to ask of ministerial colleagues in the Department for Education is: when will it be put right?

This is not a partisan issue. I did not think I would ever agree with a London socialist such as Fiona Millar, but she said:

“But even as one of the beneficiaries of a skewed system, it still seems profoundly wrong to me that every school should be subject to increasingly rigid national accountability measures, yet be expected to deliver the same results when such huge regional funding disparities persist.”

I think we would all agree with that. She also mentioned that the Minister for Schools observed, when announcing the £350 million, that schools with 3% of children on free school meals in Birmingham receive higher funding per pupil than schools in some rural areas with more than 30% of pupils eligible for free school meals. How does one make sense of that?

Even allowing for higher area costs and deprivation in London, the gap between most London boroughs and much of the rest of the country is far too high, reaching £1,000 per pupil in some cases. Quirks in the current funding system result in schools with the same characteristics and miles from one another receiving wildly different sums depending on their local authority.

The £350 million is welcome, but we are discussing a league of pity—where people appear in the league table. The consultation document lists 62 authorities that are in line to receive additional funding under the indicative minimum funding level. Oxfordshire is 59th on the list and receives a lower percentage and cash increase than any other English county. Oxfordshire loves Cambridgeshire dearly, but there seems to be no logic in the fact that Cambridgeshire will receive from the £350 million a boost of around £20 million in 2015-16 when Oxfordshire is set to receive only £500,000 or 0.14% of the total new funding—more than 10 times less than the £5.64 million average increase of the 62 authorities that are benefiting.

Even in the context of the £350 million that has been given additionally to try to mitigate some of the unfairness, Oxfordshire is still being treated extremely badly, and there is absolutely no intellectual or policy justification for that. At a time when schools throughout the country are rightly obliged to set national targets, standards and performance levels, it is grossly unfair that schools in some parts of the country are receiving so much more money than those in other parts. That is unjust and unfair. It must be put right, and quickly.

10.4 am

Guy Opperman (Hexham) (Con): Sadly, my hon. Friend the Member for Gloucester (Richard Graham) cannot be here today, but it is two years since in this

29 Apr 2014 : Column 184WH

very Chamber he so eloquently made us all Taoists and began the long journey with a first step. It is as well to remember that the words he used then from Deng Xiaoping—the Minister is a keen student of Chinese maths—were “Yi Bu, Yi Bu”, or “one step at a time”. We are slowly getting there and I pay tribute to all hon. Members, particularly the F40 campaigners, on a fantastic journey.

I can walk over the border from Northumberland, which receives £5,241 per pupil, to Newcastle upon Tyne, which receives £6,052 per pupil—a difference of £809. Teachers in some of my schools in Northumberland, such as East Tynedale, send their own children to schools in Newcastle, which can almost not spend their money, while Northumberland is struggling desperately. The system must change, and I welcome hugely the 6.4% uplift of £10 million.

A point that has not been made today, but needs to be made, is that the consultation expires tomorrow and there are still opportunities for all our teachers—I have written to all of them in every school in my area—to respond to it. If they fail to do so, the Department for Education will not have the benefit of their wisdom and robust comments, which Members of Parliament have received. I thank those who have written to me, including Ponteland middle school and Whitley Chapel first school, making the case, and those who have responded to the consultation.

I want to touch briefly on rural schools. I disagree with my hon. Friend the Member for Worcester (Mr Walker) on only one matter: I say “sparsity” and he says “spercity”. That is my only disagreement with his outstanding speech.

The long and short of the matter is that rural schools have been in a singularly difficult situation for many years under successive Governments. In areas with a three-tier system, such as Northumberland, it is particularly complex because the system is focused increasingly on two tiers. I mean no disrespect to the Department for Education, but it seems to struggle and have great difficulty in understanding what three-tier education is and to accommodate it in a funding system and the Government’s approach.

The honest truth is that the head teachers we meet day in, day out, whose schools are in the F40 group, are clearly struggling to provide for their individual schools. On the day when most of us have suffered the delights of the RMT’s approach as a dinosaur trade union opposing all automation, we are dealing with teaching unions that are struggling desperately. We should pay tribute to the individual teachers in the F40 schools who are struggling to provide quality education in extremely difficult circumstances.

The crucial point is that the Government are making a difference to those schools. We must have a continuing campaign. I endorse the point that we must scrutinise all political parties on their approach because the matter will not be solved overnight. The long journey has had many steps, but they are leading in the right direction. I welcome what we have done and I support the campaign.

10.8 am

Miss Anne McIntosh (Thirsk and Malton) (Con): I congratulate my hon. Friend the Member for Worcester (Mr Walker) and all colleagues who have been associated

29 Apr 2014 : Column 185WH

with this campaign for years. I want to focus my comments on schools in rural communities, but on a day when we are mourning the loss of a teacher—the first teacher ever to be killed in a classroom—we must take the opportunity to pause and pay tribute to the pressures under which teachers work, and particularly to the lovely teacher who lost her life. We can never reward teachers or thank them enough for their work.

My hon. Friend the Member for Worcester referred to the cost of staffing as 65% and sometimes 85%. We must not lose sight of the fact that if there were a change of Government and national insurance contributions rose, that would take an enormous chunk out of school budgets. We must be extremely mindful of that.

The Select Committee on Environment, Food and Rural Affairs does not focus only on food, eating, farming and fishing. We recently produced a very wide-ranging report on rural communities. One of its most alarming conclusions was about what my hon. Friends the Members for Hexham (Guy Opperman) and for Beverley and Holderness (Mr Stuart) mentioned: the particular pressures on the budgets of schools in rural areas. There are particular issues about travel to work and school buses. I know that the matter is constantly reviewed in areas such as North Yorkshire. I am grateful for the tribute paid by my hon. Friend the Member for Beverley and Holderness to the outstanding excellence and achievements of North Yorkshire schools. I pay tribute also to the local education authority of North Yorkshire, which is generally there when needed but is recognised to be a very light-touch LEA. It has a good relationship overall with local schools.

However, as I mentioned in an intervention on my hon. Friend the Member for Worcester, we regret the loss of autonomy suffered by individual schools, which previously had the opportunity to have more say over budgets. That is highly regrettable. We called in our report for it to be reversed, and I repeat that call here today.

Let me deal with sparsity funding. Historically, rurality and sparsity have always been recognised by Governments. In particular, the members of the current coalition, the Liberal Democrats and the Conservatives, have historically paid great attention to rurality and sparsity. I urge the Department and the Minister to have a greater focus on that. There was, if I may say so, a very small, pitiful amount of money for sparsity provision. Look at the neighbouring education authority of York. One of the greatest difficulties is that when York went unitary, a big chunk of the education budget went into the York unitary authority and now we are feeling that pinch in North Yorkshire.

I have been able to make only a few remarks, but I believe that the measure we are discussing is a very important step. It would be churlish not to recognise that it will have a significant impact on schools in North Yorkshire.

10.12 am

Neil Carmichael (Stroud) (Con): First, I pay tribute to my hon. Friend the Member for Worcester (Mr Walker) for the tremendous work that he has done, because this is a complicated but very important subject. His achievement is the start of a very necessary journey that has still to be completed.

29 Apr 2014 : Column 186WH

It seems to me that £350 million is an injection of money that is both substantial and much needed. It is a clear admission that the funding system needs to be fixed, because having in place a measure such as this, however temporary, demonstrates that the system is flawed. Today, if we do nothing else, we should acknowledge that point, so that we can move on to devise a system that is workable and fair for rural schools as well as all other pupils who might be suffering in an indirect way.

I would never automatically link the amount of money spent to the services provided, but I will draw hon. Members’ attention to the fact that Ofsted has produced a very important report, “Unseen children: access and achievement 20 years on”, which highlights the failure of many schools in rural and coastal areas. We have to acknowledge that that is just not good enough. We need a system that ensures that all schools, all teachers and all pupils benefit from fair funding. I would say to my hon. Friend the Member for Beverley and Holderness (Mr Stuart), the Chairman of the Select Committee on Education, that that is a subject for his Committee to consider, because we need to lay the foundations for fundamental reform. I ask my hon. Friend the Minister to talk about just how thorough the Department will be in ensuring that all areas are considered when coming up with a new formula that provides fairness. Of course, there is also the issue of timeliness, because we cannot wait indefinitely. We need a firm commitment that action will be taken on this matter. That has already been recognised to be necessary.

As for my own patch in Gloucestershire, I of course welcome the £9.6 million. That is much needed and will be wisely spent by our schools, because they have consistently suffered, as many of my colleagues have noted about the schools in their constituencies. Ironically, the situation is about the same between Northumberland and Newcastle as it is between Gloucestershire and Bristol. That is just not a reasonable situation for us to have to deal with, so my question to the Minister is basically this: what commitment will she give to ensuring that fundamental reform of the formula funding system will be brought about, and how long will it take? I ask that because the needs of our children and the urgency of our reforms elsewhere in the education system, coupled with our place in the global economy, all add up to this being a major part of the long-term economic plan.

10.15 am

Dr Julian Huppert (Cambridge) (LD): I congratulate my hon. Friend the Member for Worcester (Mr Walker)—it was a pleasure to work with him on this issue—and all the F40. My focus has been on schools funding in Cambridgeshire. We get the least per pupil as a basic amount and we have been underfunded for some 30 years. That is a very serious issue, which has affected us very seriously. I first campaigned on it when I was still at school; the campaign was led by the now Baroness Brinton. I have also worked on it as a county councillor and as a Member of Parliament. It has been a long fight by many people. Councillor Peter Downes, when he was head of Hinchingbrooke school, campaigned on the issue. Cambridgeshire Schools Forum, led now by Philip Hodgson, has campaigned on it. Over the decades, it has affected us very heavily, and ultimately that is not for any good reason; poor decisions made by the county council in the 1980s have left us with this situation.

29 Apr 2014 : Column 187WH

We are so far behind. Cambridgeshire gets £600 per pupil per year less than the English average. That is about £250,000 for a typical primary school. Comparisons have been made with Oxfordshire. Oxfordshire gets more money per pupil now than Cambridgeshire will get with the extra money, so I will accept the praise in the Oxford Mail for my lobbying campaign—I was delighted to see it there—but I do not think that one can feel particularly sorry for Oxfordshire, whose pupils will continue to get more than pupils in my area and others in Cambridgeshire.

We are seeing real problems as a result of the continued underfunding. We are seeing the achievement gap widening, because there are simply not the resources in the schools to be able to do the work that is necessary to close that gap. Fantastic work is done by dedicated teachers. Excellent staff are doing their best, but with such scarce resources, right at the bottom end, it will always be a challenge.

Despite the fact that the issue had been raised for so many years, the previous Government did not do anything to fix it. They did not help the people in Cambridgeshire; they did not ensure that we got the fair amount that we deserve. That is why I was so delighted when, after much lobbying by me as well as many others, my right hon. Friend the Minister for Schools announced that we would get a substantial amount of extra money— £20.5 million in Cambridgeshire. In fact, that is less than half the gap between us and the English average, although of course the English average will go up. It will help; it is incredibly welcome, but it is not all that we need.

We in Cambridgeshire have taken the approach of saying thank you. Just yesterday, I handed in to the Minister for Schools a petition with about 2,000 signatures on postcards, pieces of paper and online to say how much people in Cambridgeshire want to get this extra money. We need it, and we need it soon. The money will go some way towards starting the change that is needed. I agree with all the hon. Members who have said that this can only be the first step on the way to a proper fair funding formula that makes sense, that starts off not based on historical numbers but by working out what is needed for schools and pupils. This is nothing like the end of the road.

Philip Hodgson, the chair of the Cambridgeshire Schools Forum, has said that he is

“pleased the Government has at last recognised the problem but the extra money is needed now.”

Schools in Cambridgeshire and, I am sure, in other areas face problems in this financial year as well. Having to wait until the next year will cause problems for schools that have been pared to the bone for 30 years. We are having to try to cope with decades of underfunding—chronic underfunding—which has hit the infrastructure and everything else in those schools. It makes it harder to adapt. We need some sort of immediate relief. If anything more could be done, that would be great, but most importantly we need to get this money; we need to get it in full; and we need that real and sustainable fairer funding system to last beyond 2016.

There is more to be done as well in terms of capital money and to make sure that places such as Cambridgeshire can continue to build the schools that we need. We are a

29 Apr 2014 : Column 188WH

fast-growing county and we need to have money not only to pay teachers but to build schools. We have problems with sixth-form funding, and I hope that the Minister will have news to share with us on those matters. We would like that assurance, and I would like an absolute assurance from the shadow Minister that if his party were in Government, it would continue to give us the fair funding that we deserve. I say a big “Thank you” to the Government. We need our £20 million, and we will be grateful for it and for anything more that can be done.

10.20 am

Karen Lumley (Redditch) (Con): It is a pleasure to serve under your chairmanship, Mr Hollobone. I am delighted to have the opportunity to speak in this debate, the subject of which will make a considerable difference to the futures of young people in my constituency. I start by paying tribute to my hon. Friend the Member for Worcester (Mr Walker) for securing the debate but particularly for his tireless work on the subject, not only in our county but nationally. His constituents, like mine, have suffered from unfair funding in education for far too long. It has been a priority for many of us since we were elected to see the mess of education funding sorted out. I am pleased that now we are starting to see real progress on the matter following the previous Government’s failure to act.

My own passion for the subject predates my time as an MP and goes back to my own experiences of education funding when my children were at school, which was many years ago, I have to say. When my family moved to Worcestershire in 2000, I was shocked to find that my children’s education in Redditch did not seem to carry with it the same monetary value as it did in our former home of Wrexham. My awareness of that grew further when I became a governor at Vaynor First school in Redditch and saw that the situation was worse than I had anticipated. As has already been said, Worcestershire is one of the lowest-funded local education authorities in England. It is in the bottom 10. Despite my constituency being just 5 miles outside Birmingham, there is a difference of around £700 between what pupils get towards their education in both areas. I hope that the Minister will be able to address that point and explain to the parents in Redditch why their children are worth less than children 5 miles up the road.

In 2009 Redditch was red flagged for unsatisfactory educational attainment by the Audit Commission, as the borough was falling way behind the rest of the county. However, in the years that have followed, thanks to both the hard work of teachers and the reforms made by this Government, schools in Redditch have gone from strength to strength. Redditch now boasts some of the best-performing schools in the county—a remarkable turnaround for the borough’s schools, where almost 70% of pupils now achieve the five A* to C GCSE standard compared with only 37% in 2007. Imagine what would happen if we got fairer funding in Redditch. This will be the first time in a decade that funding has been allocated to Redditch, Worcestershire and other local areas on the basis of the actual characteristics of pupils and schools, rather than simply on the basis of historical levels of spending. Under the minimum funding levels proposed, young people in Redditch stand to receive a 1.7% or £4.9 million rise in funding which will rise from £4,231 to £4,302 per pupil.

29 Apr 2014 : Column 189WH

Having studied the figures across the different local authorities, however, I am concerned that Worcestershire is still not getting as good a deal as others, particularly given that some better-funded authorities stand to gain more from the proposals. There is real concern that without more funding they will still continue to meet their responsibilities. I look to the Minister for comment, and hope that after the consultation period some of the figures will be adjusted accordingly. The commitment we have made is an important step forward, and it is worth remembering how far we have come in such a short time.

The campaign has been about securing a fair deal for our constituents and righting an obvious wrong. Of course, money is not all that is required to give our young people a good start in life but it certainly goes a long way towards doing so. Our Government must continue to work to show children and their parents that no matter where they come from or what their background is, we are committed to improving the education they receive.

10.23 am

Sheryll Murray (South East Cornwall) (Con): Although it is not a member of the F40 campaign, I would like to make a plea for fairer funding for Cornwall. Currently the duchy is towards the bottom of the funding table with our dedicated school grant at just over £5,000 per pupil. We are grateful for the small increase we have received.

Cornwall, for many pupils, is a very rural area. The cost of getting to school children who are spread out over a large area is much greater than in a city where many students are likely to be within walking distance and therefore the cost to the local education authority is much less. Often, rural areas have many more excellent small schools but they lose the economies of scale which larger urban schools can gain. Teachers, too, face these additional travel costs. In Cornwall we have relatively high housing costs in relation to wages. I do not have to be told what a beautiful place Cornwall is because I was lucky enough to be born there. However, that drives up housing costs.

Surely, we should see equal spending per pupil regardless of their location. That would provide a level playing field, allowing schools to offer equal pay and conditions, to give us a chance to attract the best teachers. The education of our children is one of the most important aspects of government. Well-educated children tend to work harder and contribute more to our economy. Cornwall is lucky enough to qualify for substantial EU growth funding, as it has been classified as a less-developed region. Surely, one of the best things the Government could do is to improve the education in Cornwall, to give it the very best opportunity for the future and to bring it in line with the rest of Britain.

The F40 campaign believes that an extra funding allowance in the formula should be made to help more rural schools—the sparsity element—and, if it can be done, take account of the size of classes. I echo that call for my home county and Duchy of Cornwall.

10.26 am

Dr Thérèse Coffey (Suffolk Coastal) (Con): It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Worcester

29 Apr 2014 : Column 190WH

(Mr Walker) on continuing to lead the campaign and securing today’s debate. He has already made an eloquent contribution, and the point about salary increase and increase in pension contribution, or superannuation, has been well made.

I am here to fly the flag for Suffolk, as many other hon. Members have flown the flag for their own constituencies. I am sure that the Minister will do the same for Norfolk in her contribution. I welcome the extra money that we have received, but I echo and endorse the points made by many hon. Members about the real disparity that continues to be a feature of education funding. I agree with my hon. Friend the Member for Stroud (Neil Carmichael) that more money is not necessarily the only way to make improvements in educational attainment, but I am sure that it will help and I hope that the increase of £105, or 2.5%, will go some way to address the situation in Suffolk.

As has been mentioned, Suffolk is a rurally sparse county that struggles with attainment. The county council, working with the Royal Society of Arts and the schools themselves, have embarked on something called “Raising the Bar.” It is a strategy to raise attainment that will take some time, but there will hopefully be some good results quickly en route. We have paired up with Hackney, a great council that has seen significant improvement in educational attainment. I have some sympathy with my head teachers when they point out that we will be moving to funding of £5,251 on average per pupil, but Hackney currently receives £9,268, which is an additional £4,017 or 76% per child. There is a lot more money to provide additional teachers and facilities to tackle some of the issues that Hackney deals with well, including through some of the specialist units that have been developed to help with difficult children. There is a huge difference.

I want to make a point about the pupil premium, of which the coalition is rightly proud. I point out to the Minister and hon. Members present that my part of Suffolk has a low unemployment rate of less than 2%. People who do not have a job are rare—there are about 800 in total—but that does not mean that average or median wages are particularly high. In fact, they are lower than in Liverpool, where I attended school. In Liverpool Wavertree, the median wage is £510; in Suffolk Coastal it is £490; and in Ipswich, it is £460. The pupil premium is adding to a significant funding gap between different parts of the country.

Kate Green: Although the Government have made a welcome commitment to extend free school meals to all children at key stage 1, does the hon. Lady share my concern that, because parents will presumably no longer have to apply for free school meals, it might become more difficult to identify all the students who should attract the pupil premium? That might further exacerbate their position.

Dr Coffey: Some local authorities already do that. I think it is for the Government and the Department to learn from where it already happens successfully, so I am not going to go down that route. I will explain my point by making another comparison with Hackney. About half of the children there are eligible for the pupil premium, and at £1,300 for a primary pupil and

29 Apr 2014 : Column 191WH

£935 for a secondary pupil, that is very welcome. However, that is almost double the budget available to head teachers in Suffolk.

The extra funding that has been announced is a welcome step, but it is only a sticking plaster, and we recognise that. It is going to take quite a lot of bravery to get to the point where there is not such a disparity of thousands of pounds per pupil that turns into hundreds of thousands of pounds in our large secondary schools. We must get to grips with that. I encourage my hon. Friend the Member for Worcester to keep the campaign going, and I am sure that all Members will be working on our education Ministers and shadow Ministers in order to ensure that appropriate provision is made in the manifestos for the 2015 election.

10.31 am

David Mowat (Warrington South) (Con): I would like to congratulate my hon. Friend the Member for Worcester (Mr Walker) on leading the charge on such an important issue.

I have now been an MP for four years, and one of the advantages of that is that I can look back on my old speeches and make them again. It is two years since we were all in this Chamber discussing how we were going to reform the formula inherited from the previous Government. There was no dispute that that formula was wrong and there was no serious attempt to justify it. The Minister for Schools, the right hon. Member for Yeovil (Mr Laws), has continued with the attitude that the existing formula is wrong and must be changed. The issue has been one of timing and expediency.

When I spoke two years ago, I gave the example of the contrast between funding in Warrington and Westminster, two places that I know—I live in Westminster when I am in London and in Warrington when I am in Cheshire. I made the point that funding was £8,100 per head in Westminster and about £5,000 per head in Warrington. My right hon. Friend the Member for Banbury (Sir Tony Baldry) made an excellent speech, but he was wrong to say that there was a differential of £1,000 per head; the differential is £3,000 or even £4,000 per head for some schools.

In my previous speech on this issue, I explained that I did not understand how Westminster, a relatively affluent part of London, could receive such an increased allocation over and above Warrington, which is not particularly affluent, although parts of it are. Teachers at schools such as St Monica’s and Appleton Thorn are dealing with really quite tough budgets and having to make very hard decisions, whereas there is a great deal of evidence to suggest that the extra money received by places such as Westminster resulted in more teachers per head. The differential of more than £3,000 per pupil is enormous when multiplied out and compared with a school with 100 or 200 pupils.

It was agreed that the existing formula had to change, and no serious attempt was made to defend it. We have now received the first response in the form of the initial allocation. I hate to say that my words did not work, but Westminster, which previously received £3,100 more per pupil than Warrington, will receive a further £200 per pupil from the initial allocation. Westminster is 10th out

29 Apr 2014 : Column 192WH

of the 152 local authorities. Warrington, which is 135th out of all local authorities, will receive no extra funding. Perhaps my previous speech was not as effective as it might have been.

I want to echo the words of the F40 campaign in its consultation response. What we have ended up with is neither transparent nor fair. The formula can do lots of things—it takes into account attainment and all sorts of other factors—and I understand that, even allowing for the very low budget in Warrington, attainment there is pretty good, which is testimony to the quality of teaching and the efforts made. However, when we know that the formula must be changed but it is not because to do so would be politically difficult, that is not courageous government.

I have asked why the new Government, who came in bristling with talent, new ideas and determination to get things right, have not been able to put the formula right. It looks like they are not going to be able to do so over the five years of this Parliament. I understand that the formula was inherited from the previous Government, that many of the trade-offs were unacceptable, particularly in the massive haemorrhaging of funding to London, and that that will take a while to unwind. Nevertheless, as my hon. Friend the Member for Hexham (Guy Opperman) said, every journey must start with a small step. We have not really taken that step yet.

10.35 am

Andrew Percy (Brigg and Goole) (Con): It is pleasure to follow my hon. Friend the Member for Warrington South (David Mowat) and to contribute to the debate, which was opened so well by my hon. Friend the Member for Worcester (Mr Walker). He has done a fantastic job of promoting the F40 cause, alongside many colleagues in this place.

When the initial funding announcements were made, I was surprised for two reasons. First, I was pleasantly surprised to see that North Lincolnshire will receive an extra £153 per pupil, despite previously being, I think, the 57th worst-funded authority. We are lucky to have people in our borough such as Tony Norton—who may or may not be present today—who have fought hard for us on the issue locally. I was pleasantly surprised to see that figure of £153, and then thought that, given that North Lincolnshire was receiving that extra amount per head despite being either the 50th or 60th worst-funded authority at that point, there must be good news for the East Riding of Yorkshire as well. That is when the second, less pleasant, surprise occurred: I noted that the figures for the East Riding of Yorkshire showed an increase of just £12 or £13, despite it being the third worst-funded authority.

We are grateful for the increase, and I certainly do not want to see changes to the extra £153 per head that is going to be awarded to North Lincolnshire and for which schools are starting to plan. However, I do want to see changes to the £13 increase for the East Riding of Yorkshire, which, as I said, is the third worst-funded authority. As things stand, we will have two boroughs next to each other, one of which, North Lincolnshire, will receive £5,426 per pupil next year, while the neighbouring borough, the East Riding of Yorkshire, which was the worst funded to being with, will receive less than £5,000 per pupil.

29 Apr 2014 : Column 193WH

Nearby Hull will receive £5,978 per pupil. I have taught at schools in both Hull and North Lincolnshire, where these is a massive discrepancy. It makes a huge difference in what is provided to schools on the ground. The money is not always well spent—I think my hon. Friend the Member for Stroud (Neil Carmichael) said that he does not always associate extra money with improved outcomes, and that is certainly true. Nevertheless, when dealing with rural schools, particularly schools that are perceived to be doing okay but are doing so only because the majority of their cohort are from the sort of background where the kids naturally do quite well, the money does make a difference, because, as colleagues have mentioned, the perception that they are doing okay can mask a failure to deal with some of the more challenging pupils or those who are struggling the most.

That is where money really does make a difference, because it means that extra individuals can provide dedicated support. We had that in Hull, and I do not wish to take a single penny away from the city of Hull, which has great needs. I simply wish to make the case for levelling the playing field a little. We could not offer the same level of intensive support to struggling pupils in schools in the East Riding of Yorkshire, in which I have done quite a bit of work in the past, and especially not in North Lincolnshire. The money just is not there to do that.

I am pleased that the Government have recognised the fact that there is a discrepancy and a problem—that certainly was not the case when the campaign started—and that is a great move forward. However, it is inexplicable to me as a local MP to have to go back to the two local authorities I represent and say to the worst-funded, “You’re getting 13 quid extra,” while saying to the other, which is still badly funded and desperately needs the money, “You’re getting £153 extra.” That does not make sense. It is not fair on the East Riding of Yorkshire, which has some very deprived areas, including Goole, which I represent. My hon. Friend the Member for Beverley and Holderness (Mr Stuart) also mentioned in his excellent speech places such as Withernsea and Bridlington, as well as areas on the edge of Hull. I thank the Government for the changes that have been made, but I think that things can be done in a much better way.

10.39 am

Kevin Brennan (Cardiff West) (Lab): I congratulate the hon. Member for Worcester (Mr Walker) on securing this debate and on his speech, in which he outlined many of the problems with the current funding formula system. He was ably supported by many other hon. Members. He pointed out the reasons why the Government should spell out their longer-term intentions in relation to the national funding formula and why, although his hon. Friends might have criticised me for saying so, the Government should not hide the fact that there will be losers in the process or pretend that there will not be, just because we are a year away from a general election. I might have been criticised for saying that, but it is the truth. We must ensure that we are open and transparent about the journey that we are on in relation to a fairer funding formula for our schools.

Mr Graham Stuart: Will the hon. Gentleman give way?

29 Apr 2014 : Column 194WH

Kevin Brennan: In a moment. I was just about to mention the hon. Gentleman, so I will do that first before giving way briefly. Other contributors to this debate have included the Chair of the Select Committee, the hon. Member for Beverley and Holderness (Mr Stuart), who did in his remarks exactly what I did by pointing out that the timing of the announcement could be interpreted in a certain way if one were of a cynical bent, as some of us might be from time to time.

Mr Stuart: I am grateful to the hon. Gentleman. He will know that in times of austerity, redistribution is harder. He said that we are on a journey. Is his party on that journey? Will he commit today to coming forward during the next Parliament, should his party form a Government, with a national funding formula that bravely reallocates funding and has losers as well as winners, in order better to match need with the funding that goes alongside it?

Kevin Brennan: I can absolutely confirm that we are on that journey. The last Government started the consultation process on that journey towards the end of the last Parliament, as the hon. Member for Worcester mentioned in his opening speech.

We also heard contributions from the right hon. Member for Banbury (Sir Tony Baldry), who mentioned Taoism in his remarks, and from the hon. Member for Hexham (Guy Opperman), who mentioned Deng Xiaoping. Perhaps I can also quote Zhou Enlai, who, when asked about the effects of the French revolution, said that it was too early to tell. It is also, perhaps, a little too early to tell exactly what the outcome of the funding formula for schools will be, but we would welcome some transparency about it from the Government.

I associate myself with the remarks of the hon. Member for York Outer—

Miss McIntosh: I am the Member for Thirsk and Malton.

Kevin Brennan: I beg the hon. Lady’s pardon. The constituencies keep changing all the time. The hon. Member for Thirsk and Malton (Miss McIntosh) paid tribute in her remarks to the teacher Ann Maguire, who was tragically killed yesterday in school. I associate myself with those remarks, and I am sure that everybody in the House would want to do the same.

Contributions were also made by the hon. Member for Stroud (Neil Carmichael) and by the hon. Member for Cambridge (Dr Huppert), who recognised the long-standing issues and the source of some of the present inequalities in the system, acknowledging that some of the issues in Cambridge go back to decisions taken by the county council in the 1980s. Such historical difficulties are hard to unravel, as Governments of all colours have found. Contributions were also made by the hon. Members for Redditch (Karen Lumley) and for South East Cornwall (Sheryll Murray). The hon. Member for Warrington South (David Mowat) managed to point out some of the odd outcomes of the Government’s methodology in the current allocation made in the recent statement. We heard a contribution as well from the hon. Member for Brigg and Goole (Andrew Percy), who also pointed

29 Apr 2014 : Column 195WH

them out and summed up the difficulty for all Governments when he said that he does not want to take a single penny away from Hull.

Will the Minister acknowledge that introducing a national funding formula will result in losers as well as winners? We must be open and honest about that. What I found frustrating about the statement was that the Schools Minister would not acknowledge that, and that some of the bad news about what will happen elsewhere was being parked down the road rather than openly alluded to now. I make that point now, as I made it at the time. Interventions were made by many hon. Members present, including my hon. Friend the Member for Stretford and Urmston (Kate Green), who rightly pointed out that her local authority has been subject to issues relating to the national funding formula.

There are undoubtedly wide disparities among different areas. Some of those disparities can be explained by levels of deprivation or by things such as London weighting, but it remains true that pupils in schools with essentially similar characteristics can be funded very differently depending on where in the country they are. It goes back even as far as to when I was teaching, 25 years ago, before the introduction of the dedicated schools grant. Before that, the exact level of funding for schools was determined by local authorities, and the grant from central Government was part of the overall local government settlement. The Government set out an expected level of school funding for each local authority during that time and well into the 2000s, until 2006, when the dedicated schools grant was introduced. However, authorities were free to ignore it, as the money was not ring-fenced. That is exactly what happened in Cambridgeshire, as the hon. Member for Cambridge pointed out.

The result was that most councils spent more than the Government’s expected amount, which was known then as the school formula funding share, but to widely different extents. The exact level of funding was determined as a result of local political priorities, including the level of council tax, and the arcane working of the local government settlement as a whole. The national funding formula grant was introduced in 2006, and those basic levels of funding were taken as the baseline. The grant was increased by a given percentage each year, so the differences basically continued, except that authorities that spent less got an increase to bring them up to that level. Over and above that, there was some relative increase in the funding for areas of deprivation. That leads us to the consultation that took place towards the end of the last Government. The issue is long-standing, and it is rooted in how the funding was calculated formerly. The last Government changed that system. I accept that the disparities remained, which is why we began consulting towards the end of the last Government on a national funding formula approach.

The current Government have committed themselves to the national funding formula, but when they made their announcement back in 2011, they did not analyse the figures fully. It was up to the Institute For Fiscal Studies to do so, and its report showed that the level of disruption caused by the introduction of the Government’s proposals for the national funding formula would be highly unpredictable. The IFS calculated that one in six

29 Apr 2014 : Column 196WH

schools would lose at least 10% of their budgets as a result of the Government’s plans as outlined at that time, that one in 10 would gain at least 10% and that nearly 20% of primary schools and 30% of secondary schools would experience a cash-terms cut in funding if those plans were introduced.

Having realised how complicated and difficult it is to get it right, as we must—I welcome hon. Members’ remarks that we should attempt to do so in a cross-party way—the Government have tinkered with the proposals a bit in the meantime and have put some money towards the problem in the announcement that we are discussing. However, as hon. Members have acknowledged, the Government have not done what they said they would do at the beginning of this Parliament and introduced the national funding formula. They could have done so, but they chose not to. That is the reality. Although they have made a down payment, as hon. Members have described it—another way of putting it is that they have thrown a bit of money at the problem—they have not actually introduced the national funding formula, as they committed themselves to do. I do not criticise them overly for that, as it is a difficult thing to do, and it must be got right. We have seen what the consequences are, as the IFS has pointed out.

On the Government’s proposals themselves, the current proposals assert that no authority will lose money as a result. That may be true purely in cash terms, but it will occur in the context of no increase for inflation throughout this Parliament, and an extra 2.3% increase in employer pension contributions that will not be funded by the Government. The consequence will be a continuing squeeze on school budgets. Will the Minister acknowledge that that is the reality on the ground? For many schools, many of the gains will only offset losses that they suffer elsewhere. Welcome as the proposals are for those schools, the reality is that they will not lead to a real increase in the amount of money available to them, and that other schools’ budgets will be squeezed by increasing pressures. Malcolm Trobe of the Association of School and College Leaders said that the announcement

“is completely overshadowed by the reality that all schools and colleges will have a huge hole in their budgets caused by the pensions contribution rise. This will have a catastrophic effect and lead to larger class sizes and reduced curriculum choice.”

I shall just ask a few questions, because I want the Minister to have time to respond. Will she confirm—it was difficult to get this information out of the Minister for Schools because he would not answer me—exactly where the money is coming from? He said that it was a mixture of Treasury and Department for Education money and, later, following a written parliamentary question, on which I had to press him to get an answer, he mentioned that some £90 million of the £350 million would come from the Treasury, the rest being taken from other parts of the schools budget. Will she confirm that and tell us which programme that money is being taken from? I have the text of that written answer, but not the reference from Hansard.

Will the Minister publish the Government’s modelling of who will be the winners and losers from the national funding formula? If she cannot do so now, will she place that in the Library? Over what period is she planning to introduce the national funding formula, if it is to be introduced, if the Government are re-elected at the next election? Other hon. Members asked about

29 Apr 2014 : Column 197WH

that. Is it possible that after the consultation there will be changes to the allocations announced in the statement and that some authorities will lose money that they were expecting and others will get more than they were expecting? Hon. Members have asked about that, too.

10.50 am

The Parliamentary Under-Secretary of State for Education (Elizabeth Truss): I congratulate my hon. Friend the Member for Worcester (Mr Walker) and the F40 group for the amazing progress that has been made on this campaign. As hon. Members have said, this long-standing issue is finally starting to be dealt with. It is down to the dedication of all right hon. and hon. Members who have attended this debate and made such eloquent contributions that we are finally making progress on this issue.

Many hon. Members have highlighted the idiosyncrasies and unfairness of the current system. I do not think that there is any disagreement about that. Our spending on education is the fifth highest in the OECD. We have protected the education budget during this Parliament, because we believe that education spending is vital for the future of our children and our nation. Nevertheless, this spending is not fairly distributed at the moment; it is unfair and inefficient. Unfortunately, this unfairness has been baked in over the years, so even when education budgets were rising significantly, it was not dealt with. We are playing catch-up at the moment, as was mentioned by a number of hon. Members, my hon. Friend the Member for Redditch (Karen Lumley) in particular.

My hon. Friend the Member for Worcester made the good point that the link between funding and attainment is not always clear, but that there is greater clarity in respect of those from the most deprived backgrounds. Of course, one of our main priorities as a Government is closing the gap between those on the lowest and highest incomes. We have a long tail of under-achievement in this country that has a profound impact on social mobility and our economy, and that is something that we are keen to address.

My hon. Friend the Member for Stroud (Neil Carmichael) referenced the report, “Unseen Children”, which highlighted the issues for children in rural and coastal areas in general. That is a major problem, and we need to deal with it.

My hon. Friend the Member for Thirsk and Malton (Miss McIntosh) talked about the issues faced in her constituency. I associate myself with her comments about the terrible tragedy of the dedicated teacher, Ann Maguire, in Leeds. I went to school in Leeds. My thoughts are with her friends and her family.

I am pleased that hon. Members have recognised that the Government have provided £350 million of funding. I cannot provide the hon. Member for Cardiff West (Kevin Brennan) with additional information about his parliamentary question, but it is significant that the Government have found this additional money. We recognise that this is a priority. We are vigorously pursuing a route towards a national funding formula, which is the right way forward, and we are pressing that case. This funding represents a step towards it.

Mr Graham Stuart: The consultation on how the £350 million is allocated closes tomorrow. It is difficult to comment once indicative allocations have been given,

29 Apr 2014 : Column 198WH

but is it a genuine consultation? Will the Minister consider points that have been made and, despite the political difficulties, ensure that that funding is distributed in the fairest way possible?

Elizabeth Truss: It is a genuine consultation. We will listen to representations, not just from today’s debate, but from discussions that we have had as a team with the F40 group. It is a difficult process, obviously. A lot of hon. Members mentioned the problems in moving towards a fair national funding formula.

A number of hon. Members mentioned that the longest journey begins with a single step. We have made that step. There are always issues with the way that a formula for minimum funding is decided; all sorts of aspects have to be considered in a formula, including sparsity, rurality, deprivation and attainment. There is no perfect formula. There will always be some local authorities that gain more and some that gain less, and even when we get to the holy grail of the national funding formula, that will be so. There has to be a formula. However, where the Government have had an opportunity to allocate new money, as with the two-year-old offer, we have allocated it completely fairly throughout the country, and done so on a per-child basis with an area cost adjustment. Where this Government have had an opportunity to allocate new money, we have done it fairly.

I am committed, as my colleagues are, to a national funding formula. It is incredibly important for equity, social mobility and for our long-term economic plan, as hon. Members have said.

I recognise the issues raised about the high-needs block and the perceived unfairness of looking at the schools block. There would be issues in looking at the entire block, as well. Because the whole situation is so complicated, with the schools block, the high-needs block and the early years block, we have taken it step by step, starting with the schools block. That matter has come through in the consultation and we will look at that.

I note the specific issues in Staffordshire, the East Riding, Leicestershire and Warrington. I agree with my hon. Friend the Member for Warrington South (David Mowat); I have seen excellent attainment in Warrington, at the Evelyn Street primary school, which I visited with him. It is a such an outstanding school that we are using it as a national case study of how to integrate early years into schools. Fantastic work is going on in Warrington, but that does not mean that Warrington should be underfunded.

I have also taken the point about the area cost adjustment, particularly about how that has benefited London authorities in particular. We have to reflect the cost of teacher salaries in different areas, but how that is reflected in the overall allocations will be under consideration in the consultation.

We have recognised sparsity, although a number of my colleagues do not think that we have recognised it enough. But it is recognised in a minimum funding level, with a grant being given per school.

I acknowledge points made about the rising costs faced by schools, whether teacher salaries or pension and energy costs. However, in difficult economic times, we have protected education spending in real terms,

29 Apr 2014 : Column 199WH

because we consider it a priority. The question about what we will do on education spending and the national funding formula is important for our respective parties, going forward into a future Parliament. I cannot fully announce our position on that today; we are still working on the plans.

My hon. Friend the Member for Hexham (Guy Opperman) said that he is pleased that we are going in the right direction. It is important to acknowledge that. This has been a long time coming. We have taken steps with the £350 million, although people may not think it has been allocated in an absolutely ideal fashion. There have been detailed discussions about the modelling used for the formula. This is probably a precursor to discussions that will go on about what a fair national funding formula will look like.

I also acknowledge the points made by my hon. Friend the Member for Cambridge (Dr Huppert) about the positive changes that we have made in Cambridgeshire, particularly with respect to the capital budgets there.

To summarise, we have made the largest step that we can in a single year by securing the additional £350 million funding, without creating major turbulence in the system, which is a danger of moving too fast in funding reform. There is not a perfect formula. The arguments will continue about what factors are most important and what really drives the costs in schools. The Department is working on better analysis of schools’ costs, so that we can ensure that a future national funding formula properly reflects the costs, such as attracting and retaining high-quality staff in rural areas. I commit to listening to representations.

29 Apr 2014 : Column 200WH

Planning (North East Lincolnshire)

11 am

Martin Vickers (Cleethorpes) (Con): As always, it is a pleasure to serve under your chairmanship, Mr Hollobone.

I will focus on the inability of North East Lincolnshire council, as the local planning authority, to protect the best interests of local residents and to allow communities to influence major planning issues in their own areas. Although I acknowledge that it is not possible to separate local decision making from the role of central Government because of national guidance, I aim to highlight the fact that, because the council will not have an approved local plan until November 2017, it will be almost impossible to defend decisions made in line with local opinion. I also want to ask the Minister to consider intervening—if not now, certainly at some time at the future—to protect my constituents from unwanted, unloved developments that have the potential to destroy the environment and change many of the villages that make up the rural part of my constituency for ever.

It will help if I sketch out a picture of my constituency. The town and resort of Cleethorpes is part of the urban area of Grimsby and Cleethorpes, and only locals know where the boundary between the two lies. Roads such as Park street and Clee road have one side in Grimsby and the other in Cleethorpes. The villages that form the suburbs of Grimsby and Cleethorpes have distinct identities. In the past, when regional spatial strategies were in place, things were complicated by the fact that many suburbs were not just in a different council jurisdiction but in a different region. People will accept new developments and there is a need for more housing, but unless councils have proper policies in place, developments will take place in a haphazard fashion and will not be part of a proper structure.

My constituency is served by two unitary authorities, Conservative-controlled North Lincolnshire and Labour-controlled North East Lincolnshire. Around three quarters of the constituency is in North East Lincolnshire, and I wish to focus on that area today. In recent months, the council has had to determine a number of applications, particularly in the Humberston and New Waltham ward, but villages in the Waltham ward and the Wolds ward are now also being affected.

As we know, local plans are the rock on which local authorities build their planning policies and are subject to intense scrutiny by local people, acting both as individuals and collectively, through residents associations and, importantly, through parish councils. Without an up-to-date plan, a council is unable to direct developments to preferred sites that have been the subject of extensive local consultation.

In recent months, North East Lincolnshire council’s failings have been highlighted by the planning inspector who heard the appeal into the proposal by Keystone Developments. The inspector published an extremely critical report, highlighting the council’s many failings. The inspector’s report to the Secretary of State stated, in paragraph 5.1:

“The Council is not able to demonstrate a 5 year supply of housing land…locally-derived figures require 410 houses per year for the period 2011-2017, and 520 houses per year thereafter…

29 Apr 2014 : Column 201WH

The Council has not succeeded in delivering 410 houses in any recent year… The implication of this is that the first part of LP Policy GEN2 has to be treated as out of date”.

When local plans are out of date, there is a presumption in favour of development.

The report points to the council’s failure to meet its statutory duty to identify a five-year supply of land for residential development. Failure to meet that requirement means that local people suffer. Of course, identifying such land can be controversial and there will always be objections—those of us who have served as local councillors know that there are serial objectors who will oppose anything and everything—but the overwhelming number of people will accept decisions when they have seen a transparent process and have been able to have their say through their elected representatives and as individuals.

Andrew Percy (Brigg and Goole) (Con): I pay tribute to my hon. Friend for his excellent work on behalf of his constituents in Cleethorpes. I know that the electorate there appreciates it, and as his constituency neighbour, I hear positive things from residents. Will he draw out once more the comparison between the two unitary authorities? The situation that he is demanding is what happens in the parts of his constituency and mine that are under North Lincolnshire council—the local authority has clear plans in place and is prepared to stand up for residents and to go to appeal and defend them in such cases. Often, it does so in the teeth of opposition from Labour councils, which then accuse the council of wasting money because it is standing up for people. There is a real contrast in our area between the appalling situation under North East Lincolnshire council and what happens under North Lincolnshire council, where residents are at the centre of planning policy.

Martin Vickers: My hon. Friend highlights something that is apparent. As I mentioned earlier, two wards of North Lincolnshire council are in my constituency. Under the leadership of Councillor Liz Redfern, that council is robust and determined in its planning policies and, as my hon. Friend points out, prepared to defend the interests of local communities. It is able to do so because it has a robust local plan and is proceeding well with its new plan.

When the Department for Communities and Local Government was required to confirm the inspector’s findings, there was no possible reason for it to overturn the decision. Indeed, the letter sent by the Department to confirm the inspector’s decision said in point 6:

“The current Local Development Scheme states that the new Local Plan is due to be adopted in 2015. As the new Local Plan is still in the early stage of preparation, the Secretary of State attaches little weight to it in the determination of this appeal.”

I draw to the Minister’s attention the fact that a report approved by North East Lincolnshire council’s cabinet on 31 March shows that the amended date for final adoption of the new local plan has slipped further, to November 2017. For a further three and a half years, my constituents will be left high and dry by their local authority and will be unable to protect the environment or identities of their local communities.

I return to the Department’s letter, which in paragraph 7 states:

29 Apr 2014 : Column 202WH

“The Council accepts that it does not have a five year housing land supply, and as a consequence, LP policies relevant to the supply of housing should not be considered up-to-date”.

As the inspector’s report notes in paragraph 11.2,

“where relevant policies are out of date, then (unless material considerations indicate otherwise) planning permission should be granted unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits when assessed against the policies in the Framework taken as a whole, or specific policies in the Framework indicate development should be restricted.”

Again, that makes it clear that, without approved policies, the council is letting down the people it should be representing.

The council further weakened the defence of its original decision to refuse permission for the development by Keystone because, as noted in paragraph 12 of the Department’s letter, it had already accepted the developer’s offer of a financial contribution to mitigate highway congestion. That paragraph states:

“The Secretary of State notes that the Highway Authority has confirmed that the proposed financial contribution would enable it to satisfactorily mitigate the increased congestion that the construction of the new dwellings would otherwise cause. He therefore agrees with the Inspector that there would be no adverse impact in this respect to weigh against the proposal”.

In its overall conclusions, the letter from the DCLG states:

“Parties are agreed that the local planning authority does not have a 5 year supply of housing and, in accordance with paragraph 215 of the Framework, the Secretary of State concludes that full weight can no longer be given to the relevant housing supply policies of the development plan.”

I return to the inspector’s conclusions, beginning at paragraph 11.7, which states:

“The Council has consistently viewed the regeneration of the district’s urban areas as one of its priorities, and to this end has identified a number of previously developed (‘brownfield’) sites in urban areas, many of which are presently occupied by old or unwanted buildings which contribute little or nothing to the surrounding area.”

At this point, I should mention that the former Bird’s Eye factory site in Ladysmith road is the one site that is always drawn to my attention as being in urgent need of redevelopment.

The paragraph continues:

“Some of these sites were allocated for residential development in the current Local Plan, and some have been granted planning permission for housing. That is consistent with the NPPF’s approach of encouraging the effective use of such land, but as is evident from the number of them which have the benefit of an allocation and/or planning permission yet still remain undeveloped, provides no guarantee that housing will actually be delivered on those sites.”

Paragraph 11.8 states:

“In the circumstances, I can understand the Council’s concern to ensure that nothing should discourage the re-development of these urban brownfield sites, but am not persuaded by its argument that permitting the residential development of the appeal site would necessarily have that unwanted effect. I have not been provided with any substantive evidence that the delivery of housing on greenfield sites prejudices the delivery of housing on brownfield sites. The Council contends that the situation speaks for itself, but it seems to me that it would be over-simplistic to assume that a housebuilder would always choose a greenfield site over a brownfield site. Much will depend on the specific circumstances of each site, and the capabilities, preferences and financial arrangements of each developer. Some may favour a greenfield site, to avoid the

29 Apr 2014 : Column 203WH

need to demolish existing unwanted buildings: some may favour a brownfield site, to avoid the need to lay electric, gas, water and sewage connections.”

Paragraph 11.9 states:

“Further, in the context of the acknowledged shortfall in the district’s housing provision, I see no reason why housing permitted on greenfield sites in order to redress that shortfall should in any way affect the housing on brownfield sites that has already been assessed by the Council as deliverable within the next 5 years. There is no indication that the assessment of deliverability was based on the premise that no other housing sites would come forward.”

Paragraph 11.10 says:

“As to the brownfield sites assessed by the Council as not being capable of delivering housing within the next 5 years, again I see no reason to suppose that situation would alter as a result of the residential development of the appeal site. The deliverability of such sites is far more likely to be affected by the market conditions and housing need that exist five years hence. The Council does not seek to argue that it would be right to countenance an under-provision of housing for the district, in the hope that such under-provision would incentivise the earlier regeneration of these sites. There is no evidence at all that such an approach might work, and it would in any event conflict with the NPPF’s clear objective ‘to boost significantly the supply of housing’ by requiring Councils to make provision for a five-year supply of deliverable housing sites.”

Paragraph 11.11 states:

“Taking all of this into account, I find no convincing evidence to support the Council’s assertion that there must be a connection between the non-delivery of a large number of brownfield sites and the continued coming forward of greenfield sites. That being the case, I attach only very limited weight to the possibility that permitting the residential development of the appeal site would discourage the regeneration of brownfield sites”

in the district.

Paragraph 11.12 says:

“As discussed above, the fact that the Council cannot demonstrate a five-year supply of deliverable housing sites means that by operation of paragraph 49 of the NPPF, relevant policies for the supply of housing should not be considered up-to-date.”

I stress that those are the words of an inspector, not a partisan politician. Clearly, the construction of 400 new homes will have a considerable impact on the demand for local public services, and as we are aware, those are always under pressure. The proposals provide some additional funding for primary schools, but the local senior school is an academy, and as the chairman of governors, who attended my surgery earlier this month, drew to my attention, it therefore does not qualify for funding through a section 106 agreement. Perhaps the Minister could indicate whether that is a matter for his Department or for the Department for Education and whether consideration is being given to reconsidering that apparent anomaly.

I was a local councillor in North East Lincolnshire for 26 years, and I recognise the difficulties that the council has in attracting high-quality recruits to specialist areas such as planning. It has relied too much in recent years on interim appointments and the situation needs to be resolved as soon as possible. If overdevelopment in Humberston, New Waltham, Waltham, Laceby and the other lovely villages in north-east Lincolnshire continues, it will totally change the character and nature of those villages. My constituents value their local environment and identity, and they do not want to be merged into

29 Apr 2014 : Column 204WH

one urban mass. I hope that the Minister will agree to meet me in the near future to discuss the problems specifically in north-east Lincolnshire.

11.15 am

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): It is a pleasure to serve under your chairmanship, Mr Hollobone, and it is a particular pleasure to take part in a debate among Lincolnshire MPs about the examples of good and poor local government in our wonderful county.

I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing the debate. I know that the issue is of great importance to him and his constituents, because this is by no means the first time that he has talked to me about this subject—his concerns about the lack of a local plan in North East Lincolnshire and the effect that that is having on decision making about particular applications in his constituency. Because he has such a sophisticated understanding of the planning system, he will understand that I cannot refer to any decision that has been made or any application that may be under way, but I can talk to his point about the local plan and to the effects on decision making of not having an up-to-date local plan.

My hon. Friend is absolutely right that local plans are absolutely at the heart of the planning system in a way that they were not when we came into government in 2010. The previous Government’s approach was that local areas were told what they had to do and where they had to do it, and they were denied both the responsibility and power to make decisions about providing for their needs. That happened through regional strategies, and he referred to the fact that his authority lies at the edge of two such regions.

On coming into government, we strongly felt that it was important not only that local areas were given the power to make decisions about development, but that that power could be transferred to them only if they had taken responsibility for showing how they would meet their housing needs by identifying, through a local plan, a sufficient supply of sites to meet those needs so we could all be reassured that enough houses and other facilities would be developed over the coming years to meet the area’s needs—hence the importance of local plans.

I am glad to say that, nationally, local authorities have been making very rapid progress in plan making. When we came into office, less than a third of local authorities had a draft published plan and only 17% of authorities had an adopted plan. The latest figures, in 2014, are that 76% of all authorities have a draft published plan and more than 54% of authorities have an adopted plan. There are lots of local councils whose plans are in examination or about to be submitted for examination by inspectors, so I am hopeful that those figures will continue to rise steadily over the next few months and years.

What those figures highlight, I am afraid, is the failure of some authorities, including North East Lincolnshire, to do what many other authorities have managed to do. I am not suggesting for a moment that putting together a local plan is easy or straightforward, or that it is uncontentious. It is not easy, straightforward or uncontentious in any part of the country, but 76% of

29 Apr 2014 : Column 205WH

local authorities have managed to produce a draft plan and 54% have managed to have it passed through examination and be formally adopted, so there simply is no excuse for his local authority not having managed to make more progress. My hon. Friend the Member for Brigg and Goole (Andrew Percy) draws a contrast with the other authority in the neighbourhood, North Lincolnshire council, which is Conservative controlled. That contrast is instructive because the North Lincolnshire local plan was adopted in June 2011 and sets out a five-year land supply, which means that North Lincolnshire council’s development decisions are respected. As I often put it, North Lincolnshire council is in the driving seat on local development decisions.

If North Lincolnshire council could adopt a plan in time—and no doubt it had to go through difficult moments and have difficult conversations with local communities—and ultimately do what we elect local authorities to do, which is to take responsibility for local decisions, there is simply no reason why a neighbouring authority should not have been able to do the same. I have to confess that I can see absolutely no reason or excuse for the suggestion that North East Lincolnshire council will not be able to put a plan in place until November 2017. World wars have been fought and won in the same amount of time. It is extraordinary that an authority will spin its wheels for so long.

My hon. Friend the Member for Cleethorpes is entirely right about the effect on decision making. In his textbook exposition of the planning system, he made only one very small error when he said that, in cases where there is no five-year land supply, there is a presumption in favour of development. The presumption is actually in favour of sustainable development, which means that policies on environmental protection, respecting the need for adequate transport infrastructure and recognising floodplains, and so on, have to be seriously taken into account. The presumption will apply only if a proposed development can be demonstrated to be sustainable.

Nevertheless, my hon. Friend is right that, in the absence of a local plan and a five-year land supply, the presumption in favour of sustainable development will be what determines whether a development should go ahead. The preferences of local people and local communities as to where development should happen will unfortunately not carry the weight that they would have carried if the local authority had a five-year land supply and a local plan. Indeed, that is what has happened in some of the decisions to which he referred, and it is happening in other areas of the country, too. I completely understand local people’s frustration and dismay that their opinions are effectively being overridden by such

29 Apr 2014 : Column 206WH

decisions, but we have to return to the fundamental point that we can transfer the power to say yes or no to development proposals only if local councils have taken responsibility for identifying how they will meet those needs. It is only when that responsibility has been demonstrated through a five-year land supply that that power can be transferred to local councils in a relatively unfettered way.

I know that my hon. Friends the Members for Cleethorpes and for Brigg and Goole, and indeed all hon. Members, including yourself, Mr Hollobone—nobody is more involved at both local level and parliamentary level in representing people than you are—want our authorities to be in a position to make decisions on behalf of local people that local people have helped to shape and form. That is what we all long to see. The good news is that most areas are arriving at that point, but I completely understand the frustration of my hon. Friend the Member for Cleethorpes that his authority, a Labour-controlled authority, is entirely failing. I wonder whether that failure is a result of incompetence or cowardice, and I wonder whether his local authority prefers to be able to blame the Government and the Planning Inspectorate for difficult decisions, rather than taking responsibility for having conversations locally about where development should take place. I hope that the people of north-east Lincolnshire will not reward people for failing to take responsibility, for acting in a cowardly fashion and for failing to discharge their responsibilities.

We are all elected to public office to do a job on behalf of our communities. That job is not always popular, and it is certainly not always to avoid difficult decisions; the job is to work with communities to explain what is needed, to talk about the alternatives and to secure broad community support for a balanced plan for discharging our responsibilities. That is what we try to do here in Parliament, and I suspect that it is what all of us here today tried to do when we were councillors representing people on local authorities. It is what North East Lincolnshire council should be doing, and it is what North Lincolnshire council is doing.

I congratulate my hon. Friend on securing this debate, and I will be delighted to meet him to discuss further how we can help him to kick North East Lincolnshire council into swifter action on making its local plan.

Mr Philip Hollobone (in the Chair): I thank all those who have taken part in this extremely important debate.

11.25 am

Sitting suspended.

29 Apr 2014 : Column 207WH

Taxis and Private Hire Vehicles

[Mr Christopher Chope in the Chair]

2.30 pm

Grahame M. Morris (Easington) (Lab): It is a pleasure to serve under your chairmanship, Mr Chope, and to have this opportunity to raise some important issues in relation to the Deregulation Bill. I am delighted that the Minister is here to respond.

I am speaking up for my constituents in Easington who are likely to be affected by the amendments that the Government made to the Deregulation Bill in Committee. I am also speaking up for Unite the union—of which I and many taxi drivers are members—and the GMB. I am also speaking on behalf of a number of stakeholders who feel disfranchised by the Government’s truncated consultation.

It might be useful if I mention the background and where we stand with consultation. Back in July 2011, the Government asked the Law Commission to consider wide-ranging reforms to taxi and vehicle licensing legislation. The Department for Transport asked the Law Commission to undertake a comprehensive review with the aim of modernising and simplifying that legislation. There is no doubt that taxi and vehicle licensing is a complex area, and many right hon. and hon. Members have concerns about the effect that the amendments are likely to have in their constituencies.

In May 2012, the Law Commission launched a wide-ranging consultation on the Government’s proposals. Indeed, the industry has many stakeholders who have been involved in that ongoing process over the past two years. In parallel with the Law Commission’s ongoing review, however, the Government launched another review with a truncated 10-day informal consultation on three specific new clauses that were added to the Deregulation Bill in Committee.

The long consultation process under the auspices of the Law Commission is still ongoing, but I understand that stakeholders and industry and union representatives were told on Friday 14 March 2014 that the new clauses would be added to the Deregulation Bill. That is unacceptable. Will the Minister give an explanation? I have sought advice from a number of stakeholders not just within my trade union but within the trade, and the only conclusion I can draw is that the Government have decided that there is insufficient time to allow due consideration of the Law Commission’s draft Bill before the general election in 2015.

Ian Lavery (Wansbeck) (Lab): I congratulate my hon. Friend on securing this important debate. Is he saying that the Government have pushed through three amendments to the Deregulation Bill while there is an ongoing consultation?

Grahame M. Morris: My hon. Friend is absolutely right. I hope that the Minister is able to clarify the Government’s thinking, because the shortened consultation was launched with barely a week’s notice before the amendments were considered by the Public Bill Committee. That must concern parliamentarians who are keen to ensure that there is full and proper consultation on controversial and contentious issues.

29 Apr 2014 : Column 208WH

The Cabinet Office guidance on consultations states:

“Timeframes for consultation should be proportionate and realistic to allow stakeholders sufficient time to provide a considered response… For a new and contentious policy, 12 weeks or more”—

that is 12 weeks, not 12 days—

“may…be appropriate. When deciding on the timescale for a given consultation the capacity of the groups being consulted to respond should be taken into consideration.”

As has been demonstrated by the objections raised by all concerned parties outside Whitehall, the policy is clearly contentious and there are a number of different viewpoints. Indeed, I have had a couple of debates over the past few days, including one this morning on local radio, and there is a huge degree of contention on the pros and cons of the three new clauses. Nowhere in the guidance do I see a reflection of the current situation, in which such a disparate industry with such disparate views, and with many different stakeholders and interested parties, was given only 10 days’ notice of the proposals.

Lisa Nandy (Wigan) (Lab): This rushed and ill-thought-through process has caused real concern among my disabled constituents. Would my hon. Friend welcome an assurance from the Minister that the Government do not propose to make any changes to section 37A of the Disability Discrimination Act 1995, which makes it illegal for minicab drivers to refuse to carry guide dog owners simply because they are accompanied by a guide dog?

Grahame M. Morris: My hon. Friend makes an important point. Although I welcome the Government’s assurances on that specific issue, I am concerned about the Government’s amendment on contracting out. A customer might telephone a private hire company for a particular reason. They may have a disability or a preference, or they may get a better price. Unfortunately, some taxi operators discriminate against disabled people by charging them a higher premium. There are considerable and worrying implications for disabled people, even if we accept some of the Minister’s assurances.

Guy Opperman (Hexham) (Con): I congratulate the hon. Gentleman on securing this debate. He will surely accept that the Deregulation Bill is going through the Commons and the House has yet to complete its consideration of the new clauses. Surely, he cannot possibly object to one of the new clauses, so this is my simple question: why should we not allow a private hire vehicle to be driven, when off duty, as a normal vehicle, thereby freeing a family from the need to run a second car, particularly given the cost of living crisis that he so frequently asserts?

Grahame M. Morris: There is a reason, which I will address in more detail. On the immediate question, there is ample evidence, particularly in the City of London, of a problem with unlicensed taxis and rogue minicab operators. If people drove around in private hire vehicles, it would be much easier for them to pick people up and engage in illegal activity. I have seen figures showing that in London last year there were 260 assaults and 54 rapes, so we should be cognisant of that.

Mr Jim Cunningham (Coventry South) (Lab): If we look at the Bill in a broader sense, the Government are trying to deregulate health and safety, and the new

29 Apr 2014 : Column 209WH

clauses affect health and safety in a number of ways. Women are being attacked in unlicensed taxis, for example. Eighteen months ago, if I went outside not far from here, an unlicensed person would be touting to take my fare at an extortionate price. Finally, in answer to the hon. Member for Hexham (Guy Opperman), the taxi is primarily a working vehicle. That is a fundamental difference. To police that, a family vehicle and a working vehicle have to be distinguished.

Grahame M. Morris: I agree with my hon. Friend’s point. The fundamental point that I was trying to make before that series of interventions is that the Public Bill Committee did not have the opportunity to consider properly representations from the trade in the time scale allowed. My understanding is that these new clauses had not been tabled when the evidence sessions were held. It is important that those representations are properly considered.

A number of important stakeholders—including the Local Government Association, which has contacted me—have said that the informal consultation on the measures has been completely inadequate. What is the point of the Law Commission going to the expense of compiling a detailed report if we are not going to wait for its outcome? Undoubtedly, a considerable amount of time, money and effort have been spent on it, and Members should have an answer.

Guy Opperman: Will the hon. Gentleman give way?

Grahame M. Morris: If the hon. Gentleman does not mind, I will make a little bit more progress. I am sure that he can make a fuller contribution in a moment. [Interruption.] Well, I did give way to him once already.

I will quote from some of the representations that I have received, given that the Public Bill Committee was not able to take evidence on the issue. My union, Unite, which represents thousands of taxi drivers up and down the country, said:

“These amendments are a last minute attempt by the Department for Transport to get something on the statute books without proper or full consultation with stakeholders having taken place and without waiting for the Law Commission’s Draft Bill.”

I think that that is a fairly accurate statement of fact.

To go into the specifics, the first of the Government’s three proposed new clauses would allow drivers, as the hon. Member for Hexham said, who do not hold a private hire vehicle licence to drive such a vehicle when it is not being used as a private hire vehicle. I read the text of the Minister’s response in Committee in Hansard, and in mitigation he indicated that London was a precedent for the proposed changes. We have to recognise that London has one of the largest taxi markets in the world and is a truly global city. We have heard arguments about exemptions for investment in transport. A figure that I often quote is that the investment in transport infrastructure in my region is £5 a head, and in London it is £2,900 a head. If we are using precedent as an example, we should have a 500-fold increase in investment in transport infrastructure in the north-east. It is not always appropriate to use precedent. Compared with the rest of the country, the situation in London is rather different in terms of regulation, enforcement and Transport for London.

29 Apr 2014 : Column 210WH

Under the new clause, family members will be free to use a private hire vehicle on a personal basis, so long as they do not use it for private hire. The Minister said that it would be totally straightforward to identify abuses, but it would be hugely problematic. I was trying to imagine how someone could be stopped on suspicion of committing that abuse, and that should have full and proper consideration. It was one of the reasons for setting up the Law Commission consultation.

Rehman Chishti (Gillingham and Rainham) (Con): I congratulate the hon. Gentleman on securing this important debate. On the overall review, he must have seen the judgment by the Court of Appeal on Stockton-on-Tees borough council and the taxi trade. The court said that it could only do a certain number of things, and the rest was left to Parliament to review. Does he agree that, if we are going to review this, we should review the whole thing and ensure that there are proper criteria and a structure with one piece, rather than numerous pieces, of legislation dealing with it? That would only be fair to all taxi drivers, including those in my constituency.

Grahame M. Morris: The hon. Gentleman makes an eminently sensible point, which is the one that I am trying to make. We should not approach the matter in a haphazard, piecemeal fashion, particularly when we have set in train a major review and are consulting with all stakeholders, not all of whom would agree with me. That seems sensible, and I cannot for the life of me see the logic in ploughing ahead with these changes in such a piecemeal fashion.

Guy Opperman: The hon. Gentleman talks about stakeholders, but does he accept—on BBC radio this morning, he debated with one of the stakeholders, who made this case robustly—that the change will bring a considerable number of new jobs to the north-east? Lord knows we need them, and the hon. Gentleman often makes the case for them.

Grahame M. Morris: I did have a debate this morning with a representative of Blueline Taxis from Newcastle. One of my hon. Friends wants to talk about some of the problems that have arisen, so I will leave them to respond on that.

There is a consequence to what we are doing. I hold taxi drivers in the highest regard. I socialise with a number of taxi drivers. I count them among my best friends, and I want to keep them. I do not want their status and prestige to be undermined by unlicensed taxis and the potential consequences of rushing this ill-thought-through legislation through Parliament.

Julie Hilling (Bolton West) (Lab): Does my hon. Friend agree that there is a consensus across the trade that this piecemeal approach is not what is needed? We need to wait for the Law Commission to bring forward holistic legislation, as the hon. Member for Gillingham and Rainham (Rehman Chishti) said. Contrary to the views of the hon. Member for Hexham (Guy Opperman), that holistic approach will lead to safer taxis and more jobs for people than the Government’s piecemeal approach.

Grahame M. Morris: I absolutely agree with my hon. Friend’s point. There are dangers, not only to the trade, but to the safety of the travelling public. I mentioned

29 Apr 2014 : Column 211WH

some of the campaigns that have been run, which I support, on alerting people to the dangers of unlicensed and unauthorised taxis. Police figures show that 214 women were sexually assaulted in London last year after getting into illegal minicabs and unlicensed taxis, and 54 were raped. My concern is that new clause 8 would increase the number of unlicensed drivers pretending to be legitimate and make the enforcement process against the illegal use of licensed vehicles almost impossible. In particular, when we factor in the subcontracting amendment, the taxi might well be from another area, if we are looking outside London.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I congratulate my hon. Friend on securing this debate. He is talking about passenger safety, but I wondered whether, in addition to the other issues with the Deregulation Bill, increased deregulation also creates issues for driver safety. In Oldham, there is big concern about that. There has been a spate of attacks on taxi drivers, and there are concerns that deregulation will make them more vulnerable.

Grahame M. Morris: That is a legitimate point, which I hope the Minister will consider on Report, along with whether we should wait for the Law Commission’s report.

There are also concerns about new clause 9, which would set a standard duration of three years for taxi and private hire vehicle driver licences and five years for private vehicle operator licences. Industry and trade unions expressed concerns during the limited time available. The National Private Hire Association and the Institute of Licensing said that the clause would remove the flexibility from councils, and there are already concerns about how effectively drivers are scrutinised.

I raise that because local authorities have a degree of flexibility. Indeed, it was pointed out to me that the three-year licensing period already applies in London. However, an authority might wish to have annual licensing of drivers and operators, which is currently permitted under legislation, as that is a proven way to keep track of behaviour and to take remedial or preventative action. Although local authorities impose licence conditions on private hire vehicle drivers and vehicle operators that require them to report criminal convictions and changes to their medical status within a specified period, those are often ignored.

Even in relation to drivers’ licences, where the police are supposed to inform the local authority of any recordable convictions and have discretion to inform the local authority of minor matters, information is often haphazard. Some local authorities get information directly from their local police forces, but there are very few instances of local authorities receiving information from police forces that do not cover their area. That is important because one of the Government’s amendments will allow subcontracting, so a taxi or private hire firm might come from another area and be covered by a difference police force.

Rehman Chishti: On private hires operating in an area where they are not licensed, if they are going there simply for private hire, that may be lawful. However, if

29 Apr 2014 : Column 212WH

they then carry on and park in a stand-by, that would be illegal and that would put more pressure on the local enforcement authorities’ resources. Does the hon. Gentleman agree that that must be addressed?

Grahame M. Morris: I do. The hon. Gentleman has made a couple of really good points. The other aspect that I thought of when considering the arguments is that, to the best of my knowledge, the licensing budget is ring-fenced on the basis of fees and charges. Therefore, if a local authority is ring-fencing a budget based on a licensing and inspection regime on an annual or two-yearly basis and that is then changed to three and five years, there will be a commensurate drop in income. If that is how the enforcement officers are paid, that must impact on their ability to take enforcement action. That is a good point. There are a number of implications to extending the licensing period and it is not all good news, as some of the operators would have us believe. Consequently, it is good that local authorities have some discretion.

One of my principal concerns relates to the Government’s amendment to the Deregulation Bill that allows private hire vehicle operators to subcontract and book an operator licensed in a different licensing area. When I was reading Hansard, I saw that the Minister said that that will give customers more choice and that it may be advantageous in that passengers could ring up their local provider if they did not know who to call. However, passengers may well not want to use the subcontractor sent to their door.

Mike Weatherley (Hove) (Con): Does the hon. Gentleman agree that one of the good things about our taxis in this country is the local knowledge that people need to have? That sets us aside from many other countries in which we are suspicious of taxi drivers and where they are taking us on their meters. I am grateful to the Brighton Sudanese Taxi Forum for alerting me to this issue. Does he agree that deregulation that leads to subcontracting to a taxi company outside a city is fraught with danger in terms of local knowledge?

Grahame M. Morris: Again, I completely agree. It is very unusual for me to agree with Government Members—[Interruption.]. Apart from Guy. That is an excellent point and I hope that the Minister will take that into account.

Quality is an issue, and in some cases the name of a company is important. People may book on that basis and choose not to book others on the same basis. The customer may have experienced many problems with one operator. If a member of the public calls a specific operator because they feel that it is reliable and safe to travel with—I am thinking here in particular about women who are out late at night who may have a preferred operator because they know that they will be transported safely—surely they should have the comfort and knowledge that that company will take them home. There is a risk in passing jobs from one company to another; it is not the wonderful panacea that some of the advocates of deregulation would have us believe. We should think about some of the consequences.

The Transport Committee recommended that the Government engage with the trade unions, local authorities, licensing authorities and users about future legislation and commit to reform in this Parliament. Ministers

29 Apr 2014 : Column 213WH

should be working collaboratively with the industry, drivers and passengers, rather than just rushing contentious clauses through Parliament. The new clauses are evidently contentious and 10 days’ notice before the Public Bill Committee was completely inadequate to allow for any meaningful consultation.

The consequences of the new clauses have not been considered sufficiently. It seems to me that there is a mad, ideological rush to deregulate on occasions. We would not do that if we were talking about firearms regulations, would we? I hope that we would not, anyway. The idea appears to be that we must cut red tape without considering all of the consequences, even though we have set in train the Law Commission, which is engaging in the process. Many stakeholders feel—rightly, in my opinion—that they have been ignored and passenger safety and the enforcement of private hire vehicle registration could be undermined. I respectfully urge the Minister to remove the clauses added to the Deregulation Bill in Committee—he can do that on Report—for the safety and confidence of the travelling public and, indeed, for the reputation and livelihoods of the taxi and private vehicle hire trade.

2.57 pm

Caroline Lucas (Brighton, Pavilion) (Green): It is a pleasure to serve under you, Mr Chope. I add my congratulations to those of everyone else who has congratulated the hon. Member for Easington (Grahame M. Morris) on securing this important debate. As we have heard, taxis and minicabs are an essential part of our transport network, not least for people with disabilities, women, in particular, for getting home safely at night, and people who do not have access to a car.

Regulation of the taxi industry has been around for a long time. A House of Commons Library note says that it could be said to have begun in 1636 under King Charles I. More recently, the issue has come up under successive Governments who, having looked at the evidence, decided to leave regulation of this essential industry in place.

I want to reiterate the question asked by the hon. Gentleman: why now the rush to rip up that regulation? Suddenly, the Government are amending their own Bill to give the market more power over this essential part of our transport network with barely any effort even to pretend to consult about it. The Local Government Association politely said: