PARLIAMENTARY DEBATE
West Sussex Schools Funding - 2 November 2016 (Commons/Westminster Hall)

I beg to move,

That this House has considered the funding of West Sussex schools.

Good morning, Mr Gray, and thank you very much. It is a pleasure to serve under your chairmanship for the first time in Westminster Hall. [Interruption.]

Order. Will one of the sound engineers deal with the echo? There is something wrong with the machine.

I am grateful to have the opportunity, with my West Sussex colleagues, with whom I have been working for a considerable period of time on this matter, to draw the House’s attention on this occasion, which certainly is not the first, to the question of fair funding for West Sussex schools. I am fortified by the presence and support of my hon. Friends and parliamentary colleagues for West Sussex, who have been campaigning on this matter for a long time now. We have campaigned together and are wholly in agreement. Those of my hon. Friends who are able to be here will speak to explain the case further to my hon. Friend the Under-Secretary. I welcome her to her place and am delighted that she will answer on behalf of the Government. May I say to her at the beginning that the very rude things I will say about her Department are absolutely in no way aimed at her at all? I regard her, as we all do, as an exemplary and remarkable Minister—none of this happened on her watch.

For the 32 years I have been a Member of Parliament—I am an amateur compared with my hon. Friend the Member for Worthing West (Sir Peter Bottomley), who has been here much longer than me; he is not the Father of the House but practically the grandfather of the House—the treatment of West Sussex in local government finance terms has been unfair and indeed wholly unsatisfactory. The issue of today’s debate is really the catharsis of 30 years of financial bad treatment for West Sussex. In respect of education, it is now a question of fairness.

The position is surgically plain. West Sussex has per pupil funding of £4,198, which is £438 per pupil below the national average and makes schools and academies in West Sussex the fifth worst-funded nationally. That is not acceptable to the West Sussex Members, it is not acceptable to our county council, and much more importantly it is increasingly unacceptable and causes great anxiety to parents, pupils, headteachers and staff. We look to the Department for Education to fix it.

The current situation puts us below our neighbours in East Sussex and Surrey, and well below the very well funded urban authorities of the city of London, which comes right at the top of the pile with double the funding of West Sussex. Our position in West Sussex is therefore very bad. There is no other way of describing it, not least since we all agree that every child deserves the same chance in life when it comes to state-funded education. Frankly, they are not getting it. The figures graphically show that, in West Sussex, it is emphatically not the case. It is not even as if the results are anywhere near as good as they should be. Indeed, they are disappointing and must improve. Resources are a part but only a part of that equation.

The West Sussex Members of Parliament met Ministers in September last year and again in February this year to press the case. We met the Minister for School Standards 10 days ago for a useful meeting, and we are to meet the Secretary of State this very afternoon. The aim is to try to find a sensible way forward to resolve a crucial and unacceptable situation, and to try to understand the thinking of the Department for Education. It has big reforms to come and will look for our support. We need to fix the grassroots basis of the funding of local education before we move on to some of those more exotic, and indeed welcome reforms. They will require our support, but without this situation being fixed, it is difficult to see how that can occur.

It is not only a question of long-term funding. As Conservatives, we were all elected on a manifesto commitment to fix fair funding for the future. I am sure my right hon. Friend agrees that there is a lot of concern about the immediate funding for schools and a requirement for transitional funding. I wonder whether he will come to that in his remarks.

I am grateful to my hon. Friend. I pay tribute to him for the work he has done in leading our group, and for the enormous amount of work he has done on behalf of headteachers and schools, not only in his constituency but elsewhere. He is quite right, and I hope that by the end of this inadequate speech, he will feel that I have dealt with some of those problems. It is not just the future but the now. We need to resolve the position between the now and the future—we all welcome strongly the introduction of the new funding formula.

All the West Sussex Members—I am sure those who speak will make this point—are entirely satisfied that my right hon. Friend the Secretary of State for Education, the Minister for School Standards, the Under-Secretary who is here today and their officials accept that West Sussex schools are underfunded compared with the national average. As I said, the figures are there in stark reality. What we really need is for them to act now and restore some balance to a situation that is out of kilter.

As I say, we warmly commend the Government for bringing forward the new plan for the national funding formula, which will be introduced from 2018, and the release of a very small sum of additional money already given by the Department surplus. The Minister knows that West Sussex Members of Parliament, supported by headteachers and parents in all our constituencies, have lobbied vigorously for urgent consideration to be given to the adequate provision of transitional funding to help tide over hard-pressed local schools until the new formula can be introduced. West Sussex schools can thus get on an equal footing with those in other counties, which is surely only right and fair.

On 14 September, my right hon. Friend the Secretary of State, when giving evidence to the Select Committee on Education on her roles and responsibilities, confirmed that her Department was approaching this matter in a sensible and rational way and that it was

“going to provide interim support.”

That was in her answer to Q221 in evidence to the Select Committee. It is that question on which we will press her this very afternoon, so that we can get to a better school funding system in an orderly and sane manner, based in future on pupil numbers, and less on some extraordinary and archaic formula based on past political considerations, which will recognise that West Sussex has been losing out for years.

As I have said, the present situation is both unacceptable and wrong, and we insist on its being put right. It is not correct or fair that a typical secondary school in the Mid Sussex or Horsham constituencies, for example, will receive more than 15% less than the national median funding for schools.

When on 7 March my right hon. Friend the Member for Loughborough (Nicky Morgan), the then excellent Secretary of State for Education, announced in a written statement a consultation on national funding formulae for schools and high needs, she made the point that the transition to the new system should be manageable. It is that question that we look to the Minister of State, the Secretary of State and my hon. Friend the Under-Secretary to help us resolve this morning. It is the collective judgment of all the West Sussex Members of Parliament, who have worked closely together and have gone carefully into the matter, that present levels of funding will, without transitional funding, inevitably have a damaging effect on local schools and children’s learning. Each of us must speak for our own constituency—my hon. Friends will do so—but in Mid Sussex, as things stand, good schools are placed in the intolerable position of having to preside over further real cuts to school budgets that are frankly no longer sustainable.

The Government have rightly urged schools to achieve efficiencies, but those have already been adopted by the schools in my constituency and elsewhere, not least to meet the new costs arising from, among other things, increases to teachers’ pension and national insurance contributions for 2016-17. Having listened to the concerns of parents, councillors, headteachers and teachers, and having consulted more widely, we all agree that school budgets are already squeezed to the limit. It is, I am afraid, understandable that headteachers are considering a number of dramatic measures, some of which I wholly disapprove of, to make ends meet. We therefore ask the Under-Secretary, and will ask the Secretary of State this afternoon, to allocate transitional funding to support our schools to meet those serious cost pressures until the national funding formula is introduced.

A powerful letter sent to my right hon. Friend the Prime Minister by a number of West Sussex headteachers, with the support of a number of my parliamentary colleagues, sets out a request for £20 million of transitional funding. That would represent an increase of approximately £200 per pupil across West Sussex. That sum of money would put our schools back on a more or less even keel against the arrival of the national funding formula.

I want to mention the special concerns of special needs schools in my constituency and West Sussex more generally. They find it very hard going to deliver the education service that I know the Under-Secretary and her ministerial colleagues would insist be delivered to children who have considerable difficulties. They are trying very hard, but in some cases they will simply no longer be able to do it. The situation in West Sussex special needs schools is very serious. Woodlands Meed school in my constituency is a remarkable school, but is in an untenable position. Not only has the county council treated it extraordinarily badly and, in my view, dishonourably, over the question of new building to consolidate schools into one, but its financial situation is extremely serious. It is impossible for the children at the school to be educated properly without the necessary support staff. I make a plea today for children with special needs in West Sussex; they are not getting a fair crack of the whip.

My hon. Friends and I, and the county council, are well aware of the restraint required in public expenditure. However, we believe that the situation in our county is very serious. We all earnestly entreat the Under-Secretary and her ministerial colleagues to consider favourably the coherent, sensible and reasonable requests that we make on behalf of our constituents.

I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing the debate and on his excellent framing of the argument.

As we look to our newly defined national future, the challenge of improving our national productivity is real and acute. Only through increased productivity will we deliver the public services and increases in the standard of living that every generation expects. Education and skills are among the most important drivers of that vital transformation in our national productivity. We need to continue the already positive improvement in science, technology, engineering and maths, and to my mind our trading future requires better results in foreign languages. Investment in education, properly targeted, is money well spent.

This is an important issue for the whole country, but the challenge is especially important for those of us who represent West Sussex, which is the worst funded of any county authority with funding of £4,198 per pupil. Under the current funding formula, the county receives £44 million less than the national average and some £200 million less than some London boroughs. I and my colleagues were pleased to stand on a manifesto that pledged a change in the funding structure of our schools, and I am delighted that the Government, having secured an overall majority, are pressing forward with far-reaching and long overdue reform. I await with interest the Government’s response to the first consultation.

A wide range of factors was proposed for possible inclusion in the funding formula. I am sure the new formula will be better than the current system, which my right hon. Friend the Secretary of State described as arbitrary, unfair and out of date, but while the Government’s aim of maintaining higher funding for schools with issues of deprivation is laudable, I hope they will recognise the need for all school places to have satisfactory and effective funding. I am sure they will.

There are pockets of deprivation in every town and rural area. Every school has problems to confront, and ensuring proper recognition of the basic costs of providing the teaching staff and delivering the curriculum will be key. That is especially difficult in areas within commuting distance—subject to Southern rail and the National Union of Rail, Maritime and Transport Workers—of London. The cost of living in my constituency is very high, which makes it harder to recruit and retain the excellent teaching staff that children and parents rightly expect. That is especially true and worrisome in an area in which school infrastructure rarely seems to keep pace with population growth, adding to the strain placed on headteachers and staff. There is a worrying impact on class size, as at Tanbridge House school or Forest school in my constituency—at Forest secondary school, top set classes in core subjects already have 35 or 36 pupils. That obviously has a direct impact on teachers, but it also has practical consequences in classrooms designed for 30 pupils with a number of PCs to match. Schools that provide targeted support for struggling pupils used to do it in sets of 12 or 15, but now find that those sets have grown to 20, which means less effective lessons in which it is harder to focus.

Fair funding—redressing the balance—is critical. I look forward to the second consultation and what I trust will be an appropriate recognition of the high basic cost of education of every child. We are very proud of the good results generated by the schools in my constituency, but no one, least of all the Minister, would take that as a source of complacency. Excellent teaching, committed leadership and supportive parents all still need a solid underpinning of funding. In the immediate term, that foundation of solid funding is a source of real concern for headteachers across the county.

Costs have undoubtedly risen in the current year. I have had input from a large number of schools in my constituency; it would be invidious were I to go through every single one of them, but I will focus on one in particular. The Weald school in Billingshurst is an outstanding school. The current head has been in place for eight years. He started with 95 teachers and a senior leadership team of nine, including two deputy heads, and 1,440 pupils. He has managed to maintain 95 teachers, although the senior leadership team has been cut by a quarter, with now only one deputy; but the number of pupils has increased to 1,650—a 14% increase—and there has been a real-terms decrease in the per pupil funding of the school.

As my right hon. Friend the Member for Mid Sussex said when proposing the motion, this has been a problem for 30 years. With extra costs in recent years, reserves have been eaten into and in many cases eliminated. As did other schools in my area, The Weald predicated its financing on fair funding being introduced from 2017-18. It and other schools have had to contend with particular issues that will arise in the current year. From April 2016 there was a 1% increase in teachers’ pay, which meant a 1.23% increase for schools once national insurance is included. That equates to a £75,000 incremental cost to The Weald. For the past 30 years, schools have contributed 14.1% to teacher’s pensions. From September 2015 that went up to 16.4%—for good reasons, but it has an ongoing annual impact of £170,000 on The Weald’s budget. From April 2016, employer’s national insurance contributions were increased, which is an important and valuable change for the Treasury but will cost the school an estimated £120,000.

Looking forward, the impact of changes to the education support grant are expected to add an extra £45,000 of costs, while the apprenticeship levy will add an extra £30,000—and that is before any future increases in teachers’ salaries. The sum of those figures amounts to an estimated deficit of £425,000 in the next financial year for The Weald school. That is why there is so much demand in the immediate term for transitional funding to help schools to get over the hump until fair funding is introduced.

To appreciate the gearing effect, my right hon. Friend referred to £20 million raising the West Sussex average per pupil funding from where it is now, at the bottom, to being halfway towards the average. That £20 million would equate to £250,000 flowing through to The Weald school. As the Minister will see, no one would say that is easy living or easy budgeting in the context of a forecast deficit getting on for half a million pounds, but £250,000 would make a real impact on managing the short-term costs until the introduction of the fair funding formula.

As my right hon. Friend said, in trying to work out what to do, headteachers have been setting out alternative options that they could pursue. The one that has generated the most attention has been the threat to modify school opening hours, which I do not believe is appropriate in any circumstances. None of the other options being considered has happy consequences either; they include larger class sizes where practical, curriculum shrinkage and further staff reductions. It would be particularly galling if reducing the syllabus or not replacing staff occurred on a temporary basis, only to be reversed as and when—we hope—satisfactory results come through from the fair funding of the schools.

I congratulate the Department for Education on pursuing fairer funding, which I trust will put appropriate weight on basic per pupil costs. I recognise the fiscal constraints under which the Department is operating, but I hope the particular funding pressures on schools are recognised. When announcing the decision to delay the implementation of fair funding, the Secretary of State for Education said she would take a sensible approach to transitional arrangements for 2017-18. She made similar statements to the Education Select Committee, to which my right hon. Friend the Member for Mid Sussex referred. I look forward to the Minister’s response, and I also look forward to seeing the Secretary of State this afternoon. This is an issue that I very much hope we can address.

I call the right hon. Member for Arundel and South Downs (Nick Herbert), even though he was not standing up.

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing the debate on behalf of West Sussex Members, who are concerned about school funding in our county.

I will not repeat the case so ably made by my right hon. Friend and by my hon. Friend the Member for Horsham (Jeremy Quin) for redress to the unfair funding for the county over the mid to long term, because it has been perfectly well set out. I have also set it out before, in a debate in this Chamber last November, and I will spare my colleagues from hearing precisely the same remarks again. Another reason I am not going to set it out is because the Government accept that there is unfair funding in West Sussex. In response to the petition that has been organised by schools in West Sussex, the Government said:

“We recognise West Sussex is a relatively low-funded local authority.”

That is objectively the case—it is the third worst funded authority and is pretty much on the bottom as far as shire counties are concerned.

The Government have recognised the need to do something about that, so we do not just have warm words from them; we have a commitment to introduce the national funding formula. It is important that that is recognised and welcomed, because it is a brave step. Future funding should not be allocated to schools on a rather arbitrary and unfair basis but should be based on a proper assessment of need and with a view to ensuring greater fairness. That commitment was in the Conservative manifesto, the policy was announced by the then Chancellor of the Exchequer and it has been reiterated by the current Education Secretary. I understand that the introduction of a national funding formula has cross-party agreement; perhaps we will have confirmation of that later.

We are not arguing about the need to move to a fairer system in the mid to long term, or whether that will happen. I should just say that I think it is important that those who are pressing for fairer funding in West Sussex acknowledge the Government’s position on this and the commitment to introduce a national funding formula. It does not help when our county council issues statements on the matter and does not recognise that the national funding formula has been pledged, or when headteachers refuse to acknowledge it. I urge those whom I am supporting to take a little more care in ensuring that the way in which they present their case is balanced and is likely to be well received by those who have made a commitment to move in the right direction.

We are discussing the interim situation before the national funding formula is introduced, and the recognition that that formula has been delayed by one year, to 2018-19 rather than the year before as was originally pledged. On the expectation of fairer funding, it will be hard to introduce a fairer formula and not see some improvement for West Sussex, which is funded on the most palpably unfair basis at the moment, and for the situation to improve—but we should recognise that that improvement might be incremental.

In the meantime, schools in West Sussex face a particular difficulty. The Government have protected school spending overall, in the same way they have protected other key budgets, and that should be recognised. In a difficult fiscal framework, when there is a need to save money and when the country still spends more than it earns, the schools budget—a massive budget in the Government’s overall programme—has been protected. Nevertheless, the way in which that has been achieved means there has been flat cash for schools in West Sussex at a time when their costs have increased and costs have been loaded on to them. That was ably set out by my right hon. and hon. Friends.

It might help the Minister if I give a practical example, because I want to persuade her that the impact on these schools is real. In my constituency, we have a very good school, Steyning grammar school, which is in fact a comprehensive, not a grammar school. The excellent headteacher, who is presiding over an increase in standards year on year, has supplied me with figures, which I am happy to send to the Minister. The school has seen a real-terms cut in funding of around 10% since 2010 as a consequence of the increased costs it is having to meet and reductions in certain grants. As a consequence, the percentage of the school’s budget that is accounted for by staff costs is increasing from around 80%, where it should be, to 84%. Teaching full-time equivalents have fallen from 132 in 2010 to 118 in 2016-17.

In budgetary terms, this meant that in 2015 the school’s budget was just at break-even. In this financial year, 2016-17, the school has set a deficit budget of £600,000, which it will cover from reserves, but for 2017 it forecasts a deficit growing to £850,000 a year, which it will not have the reserves to cover. That will require the school to take action and to reduce its staff levels, which are at the national average in terms of ratios. Unlike schools in other parts of the country that are much better funded and have more generous staff-to-pupil ratios, that school does not have room to make those reductions without there being an impact on the delivery of education and, it fears, on standards.

I strongly urge the Minister to look at the funding and the impact on school budgets in counties such as West Sussex that are facing real-terms funding reductions because of these cost pressures. She must look at the impact on those schools’ budgets on the ground, to recognise that they are not engaged in a game of playing bleeding stumps but face particular difficulty.

Constituents of mine attend Steyning grammar school, which is an excellent school. With a deficit of £850,000 and staffing at 84%, 85% or 86% of the total budget, if there are forced changes in staff numbers, it would be particularly galling to go through the cost and the pain of reducing staff numbers by whatever means, only to be required as a result of fair funding coming through to then source and recruit new teachers to resurrect those posts and start delivering again for pupils.

I agree with my hon. Friend. He is much better at maths than I am and is able to point such things out. That is what underlines the whole case for transitional funding. I do not necessarily argue that there is a link between performance in the public sector and funding. We should never assume there is an automatic link between the two, such that any reduction in funding is unmanageable or will have an automatic effect on performance. It is incumbent on any public sector institution to run efficiently and to make savings, but by any objective measure the funding of schools in West Sussex is already among the lowest in the country, so there is no fat to cut without there being an impact.

If we still have to make national savings and the schools budget is to be included within that, that should be achieved on a fair basis, but at the moment, the situation is impacting disproportionately on schools that are poorly funded. That is unfair. I was Police Minister when we cut the policing budget by 20% in real terms, but the impact was felt across all police forces. Although there was some difference in how forces were funded, we did not have a situation where some forces faced no cuts at all and others faced reductions and therefore felt they were being treated entirely unfairly.

It is important to recognise the particular situation of these authorities. That lends weight to the case for some kind of transitional help. Again, the Government recognised that, because in announcing the national funding formula they announced a £390 million uplift nationally in school funding, which was then put in the baseline. That has been applied year on year and is a large sum of money nationally. I recognise that, but if we look at the practical effect, the uplift amounted to less than £1 million for West Sussex’s budget, which meant the actual increase was something like £10 per pupil. The impact on schools’ budgets was therefore relatively low.

Because it was very broad, the distribution of that sum in the transitional uplift did not give sufficient help to the areas of the country that most needed it and was not sufficient to cushion them against the increased cost pressures they are facing. To bring West Sussex up to the average level of county councils—never mind the average national level—would require an uplift of £15 million a year, and it has had less than £1 million. That is why the schools are in this position. To bring funding up to the national average, as my hon. Friend the Member for Horsham said, would require a much greater uplift of £40 million a year.

Because of the cost pressures, the reduction in funding and its effect on schools in the county, and because the national funding formula will not be introduced for two years, there is a strong case for interim funding for the worst funded areas, despite the Government’s overall protection of the budget nationally. That would require taking decisions ahead of the introduction of the formula, which I appreciate would be difficult. It would require finding a basis on which to fund only those schools right at the bottom of the pile, rather than too broadly, which is what happened before. Again, that would be difficult, but it is necessary and right, or else schools in West Sussex will cut their budgets in a way that will see staff numbers fall. That is why I urge the Minister to look at this carefully and to recognise that a very fair and reasonable case is being made by schools in the county and that this deserves special attention.

It is very gracious of you to call me to speak, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing this important debate. I echo his tribute to my hon. Friend the Member for Horsham (Jeremy Quin), who has led the very united charge by all West Sussex MPs. Of course, two of our number are slightly compromised in their support, one being the Minister for Schools and the other, my hon. Friend the Member for Crawley (Henry Smith), being a Parliamentary Private Secretary in the Department for Education. I am sure that their supportive sentiments are with us in spirit.

Those West Sussex Members are united with the county council, with every headteacher in every school in every constituency in West Sussex, and with the many thousands of parents who have written to us, signed petitions, joined us in presenting a petition to Downing Street just a couple of weeks ago and supported the “Worth Less?” campaign, which flags up the significant differences in the way pupils are funded and therefore treated and viewed in West Sussex, compared with so many other parts of the country. We are also united with all the local media, which is supportive.

This is a huge issue for all our constituents across the county. It comes on top of other huge issues such as the abject failure of our local rail service to deliver our constituents to their places of work and education remotely on time or reliably. The other huge issue is the work on the A27 in our constituencies. So this is a busy time for us, the issue is taking up a lot of time and resources and we need something to be done about it.

My hon. Friend the Member for Horsham rightly praised the Government’s efforts to reform education over the past six years, dragging this country’s educational standards into the 21st century, but as it stands the way we fund our schools in West Sussex remains resolutely in the 20th century.

We all welcomed the Government’s manifesto commitment, and their honouring in principle that commitment, to review the funding formula to ensure that we have a fairer funding formula to benefit counties such as West Sussex. Therefore, the Government’s announcement last year was widely welcomed in our constituencies, where things have been very tight for some time, but, frankly, time is running out to come to the rescue. The news earlier this year that the review is being delayed by another year is a potentially fatal body blow. We do not know what fairer funding will look like, how fair it will be in cash terms to counties such as West Sussex, or how long it will take to phase it in. It is unlikely to happen overnight. It is not an easy exercise and there will be winners and losers in other parts of the country. Therefore, there is still a lot of uncertainty.

The then Chief Secretary to the Treasury said in a letter to my hon. Friend the Member for Horsham that the

“Government wants to see every child achieve to the best of his or her ability regardless of their background or where they live.”

That is something of a grammatical car crash, but it is a sentiment with which we wholeheartedly agree. He went on:

“At the March Budget, the Chancellor announced that the Government will accelerate the move to the”

national funding formula.

“Subject to consultation, the aim is for 90% of the schools who will gain funding to receive the full amount they are due by 2020.”

We do not know what the full amount they are due equates to and we are now talking about 2020 at the earliest before that transition works its way in. That is almost another four years of pain, tightening budgets and difficult choices, to which my hon. Friends have alluded.

We have heard the figures and I will not go through them again, but it cannot be right that there is such a substantial anomaly between child funding of £4,196 per annum in West Sussex and, the most extreme example, child funding in Tower Hamlets of £7,014 per annum. In our neighbouring county of East Sussex, funding is substantially more, at £4,450 a year. The difference just to bring us up to the average funding is £41 million a year.

The Chief Secretary mentioned in his letter an additional £500 million of core funding to schools over the course of the spending review. That is welcome, but £41 million just to get us to the average represents 8% of that £500 million, which is being spread among the whole country. For us, that £41 million would represent 1,518 additional teachers in our schools, which are losing places, having to make redundancies and are not filling vacancies. The result is that subjects are being dropped and class sizes are becoming larger. That is the realistic outcome of the present situation and it can only get worse until it is resolved.

Hon. Members have lobbied hard. We have met Secretaries of State and Ministers, and we have further meetings later today. We have met many teachers and have been lobbied by many teachers and many parents. I will read out some letters from schools. One school in Worthing wrote to parents: “School leaders have made every conceivable cut to our provision and now we are faced with reducing basic services still further, all to the disadvantage of your child. Our finances are so bad that we are all having to consider the following types of action: modifying school opening hours, increasing teacher-to-pupil ratios again, reducing basic services such as cleaning and site and premises work, stopping any investment in books and IT equipment, designing curriculum offers that fulfil only basic requirements, not replacing staff who leave. As you can imagine, such radical considerations are the very last thing that any school wishes to do but we are being given no option. We do not understand why children in our school are worth less than others around the country. Even when a national funding formula is introduced, it will take at least three years to have a really significant effect on our budgets. We cannot wait that long.” That is a common cry across all our schools.

An excellent school in Worthing, Thomas A Becket junior school, is the largest primary school in Worthing; indeed it is one of the largest primary schools in south-east England. The head has written to me saying that its

“funding has been severely reduced by the reorganisation due to the Worthing Age of Transfer process.”

That happened recently and was very successful. The head continued:

“However, the main point I would like to draw to your attention is that if Thomas A Becket Junior was located in a London borough the school would receive, on average, an additional £1.8 million in its annual budget, enough to employ an additional 65 teachers. I have no doubt that with this extra budget share my school could improve at the rate of London schools over the past few years…The facts are well known to you; schools are facing an 8% decrease in real terms funding due to unfunded NI and pension contributions over which we have no control.”

Academies are also suffering. Shoreham academy in my constituency is rated outstanding. The head wrote to me:

“The huge difference in funding levels across the country mean that West Sussex schools are now at breaking point as a consequence and students are being treated unfairly and unjustly in terms of educational funding.”

This is not just vague bleating. Outstanding headteachers are really concerned and worried about the future prospects for their schools and their children. We share those concerns. These schools have dipped into their reserves in recent years because they have faced years of accumulated deficit because of the way the funding formula is fashioned, and in many of our schools there is nothing left in the tank.

As I said, we have the support of the county council. Louise Goldsmith, leader of West Sussex County Council, wrote to the former Chancellor, saying that the teaching

“profession has undoubtedly become less attractive in recent years and whilst we realise that there are a lot of new initiatives being promoted by the government to attract new teachers, and we welcome these, in the short term we need to be able to attract high calibre staff to West Sussex now. Unfortunately, due to the current low level of funding, the schools are having difficulty doing this, especially as they are unable to offer any enhanced salaries.

The government has stated that school funding is being protected in 2016/17. Whilst we obviously welcome that fact, in real terms the funding is in effect being eroded by unfunded cost pressures, such as the increase in employer’s pensions contributions and national insurance contributions, pay awards, the national living wage, as well as any ‘in-year’ growth in pupil numbers.”

The county council has had to top up a lot of money from its reserves and other areas, in a county where we are under severe pressure because of the high elderly population and the huge impact on the social care budget competing for increasingly scarce resources. In addition, as we have heard, West Sussex County Council has always generously recognised and endeavoured to fund the high special educational needs we have across the county. We have had shortfalls in the capital costs of new schools. We have an increasing population. There is the knock-on effect of Brighton: people moving out of Brighton into West Sussex because of cheaper property is raising costs in our county. There has been the cost of the recent age of transfer exercise that I mentioned, and there is the cost of living in West Sussex. It is one of the most expensive places to live in the whole country, yet our funding formula does not acknowledge that we have different cost pressures from other parts of the country.

We have support from the local media. All the local media have written editorials on the issue. For example, the Worthing Herald has written:

“The low funding, together with rising National Insurance and pension costs and the government’s decision to cut £600 million from education grants, has left schools at breaking point.

This is no exaggeration—our headteachers, who have been called upon to absorb further cuts while already struggling to make ends meet, fear schools may have to consider not opening five days a week if the funding crisis is not addressed by the government.”

It exhorts its readers to write to MPs and others. I exhort readers to write to the Secretary of State for Education and particularly to make submissions to the formal consultation on a fair funding formula that is being undertaken at the moment. We need examples of the real hardship that is happening here and now and can only get worse until this issue is resolved. We need those on the Secretary of State’s desk.

There have been disappointing explanations of the situation from Ministers. A previous Education Minister, who is now the Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey (Mr Gyimah), wrote back to the then cabinet member in West Sussex in slightly less than satisfactory terms. He wrote that the councillor

“mentions that schools in West Sussex are experiencing cost pressures as a result of increased pension and National Insurance contributions. It may be helpful if I explain the rationale behind our changes. We are asking schools, like other employers across the public sector, to contribute more towards their employees’ pensions to ensure that the costs of public sector pension schemes do not fall unfairly on taxpayers.”

Well, they are falling unfairly on taxpayers. Taxpayers in West Sussex are having to forgo other things from the county council because it is having to make up that money. The pension impact is considerable. Pension rates have gone up from 14.4% to 16.8%. That is an extra 2.4 percentage points added to the bill, and no extra money has been given to our schools to cover it. That is on top of the pay rise, which is only 1% but still adds £500 to the salary bill for the average teacher, and the increase in national insurance costs of some 2.3%, again for the average teacher.

The former Education Minister, in his helpful advice as to how we can do things to get round the funding shortfalls, goes on to talk about headteacher recruitment. He says that

“whilst the national headteacher vacancy rate remains fairly low at 0.2%, I do recognise that some schools are facing headteacher recruitment challenges. This was one of the reasons why we reformed leadership pay so that schools could pay more to attract the best headteachers. The government funds a number of targeted programmes that aim to address leadership supply, particularly within challenging schools. For example, Future Leaders aims to develop the skills of high-potential aspiring headteachers who want to work in some of the most challenging schools in the country. The Teaching Leaders programme develops middle leaders in primary and secondary schools in challenging contexts, putting them through a rigorous two-year training programme. A number of these middle leaders will go on to be the headteachers of tomorrow.”

We do not need the new, targeted teachers and headteachers of tomorrow; we need the basic subject teachers of today, and we are losing them. There are massive gaps in terms of teachers offering foreign languages, for example, across many of our schools. Those subjects are disappearing from the curriculum. The curriculum choice being offered to our pupils is shrinking simply because we do not have the teachers because we do not have the funding to attract them to one of the most expensive counties in the country.

There is no fat left. There is no money left in the reserves. There is virtually no leeway left for our headteachers somehow to juggle these finances. There is an urgent and critical need for the formula change, but also an urgent and critical need to recognise that we have a funding shortfall now and we have to have some help in the form of transitional funding to address that urgent situation now.

As I said, there is a shortfall of £41 million a year. The additional money that we have had in the past amounts to £930,000—a fraction of the reality of our funding shortfall. Yet again, West Sussex loses out. We lose out on central Government spend for the infrastructure in the county, yet our county is a large payer of taxes to central revenue. It is just not fair that our schoolchildren should lose out now and their whole future be compromised because we have an unfair funding formula that will still take several years to resolve and in the meantime is inflicting potentially huge damage on the life chances of our young people.

I hope that the Government will look again at the possibility of funding the shortfall with a transitional relief package. It is very hard for us as constituency MPs to support the Government’s programme on things such as grammar schools, with which in principle I certainly have a deal of sympathy but which will divert funds when we need those funds now in order to plug gaps in all the schools, of whatever type, across our county. We need the Minister and the Secretary of State to look more sympathetically on a dire situation that will only get worse over the next few years.

I hope my hon. Friend the Minister will have in front of her, either now or shortly, “Annex C: local authority schools block units of funding 2015 to 2016”, which is part of the guidance entitled “Fairer schools funding: arrangements for 2015 to 2016”. It lists every education authority in the country, and at the bottom, by £90, is West Sussex. In some charts, we are fifth lowest. Some say we are third lowest. This annexe C, issued by the Department, spells out that we are £90 lower than the next lowest, so I say to the Minister that in the transitional funding that is needed, she should ensure that that £90 at least is made up. When we start looking at the allocation of the £390 million to 69 unfairly funded authorities, we would expect that the lowest-funded authority would get slightly more than 0.2% of that £390 million. Bromley went up by 11%. Shropshire, the county of my birth, went up by about 7%. Why did West Sussex get not the 0.9% given to the Isle of Wight, which is funded more fairly than West Sussex, but less than one quarter of that? Those are the challenges.

My hon. Friend has done our area a great service by raising the issue in this way, but he is such an old silverback—in a gorilla colony, as he knows, the silverbacks are the ones to whom everyone listens—that he remembers the long-gone days when these formulae were fixed in the most abstruse and archaic manner. Does he agree that it is preposterous that, as our hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) mentioned, we are being funded in a positively 18th century manner to equip our children to do work for modern times? It is not on.

I agree with my right hon. Friend. I seldom correct him, but he may have said that I was the Father of the House. If I get re-elected next time and three of the five other people who were first elected before me do not, I might then have that role, but until then I shall look on myself as—

You are still a silverback. [Laughter.]

I will not regard that as unparliamentary.

We have heard mention of special needs, and in my constituency Palatine school and Oak Grove college do really well with their pupils. Both heads have written to me, and I have passed that on to the Department. I bring up Palatine school because its aim is that every pupil should be empowered. How can the dedicated teachers empower their pupils, with special needs or not, if they do not have the funding? The message that we will take up with the Secretary of State, and will take up now with her colleague the Minister, is this: get on with some transitional relief, which will make a significant difference to the heads’ burdens.

My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) talked about Steyning grammar school, and my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) talked about schools in his constituency. In our part of West Sussex, people go to schools outside of their constituencies, so we are in this together. I hope the Minister comes down to meet some of the heads and the pupils, who behaved impeccably at that petition event at Downing Street. I hope they can be as proud of her as she would be of them. However, it does need money.

The issue is the historic negative. All funding up to now has been based on what happened before, and it gets worse and worse. I ask the Minister and her advisers, especially the statisticians, not to treble count deprivation. Everyone knows that high needs have to be met and that pupil premiums are justified, but if they affect so much of the grant for schools, we get a distortion. When we move past the transitional stage to the next fairer funding national scheme, no other education authority or school within an area—there is a possible exception of one outlier at the top and one at the bottom because there is always some exception—can be more than 35% from the highest or lowest. There has to be a narrower range than at present. The £8,000 per pupil in Westminster may be the exception because there are very few schools in Westminster, and we may find something at the other end that needs the least funding, but beyond those, we cannot allow a gap of 100% or 50% and must bring it down to about 35%. That can become one of the rules within which the exemplifications are worked out. I know perfectly well how local authority funding has been run and how health service funding has been run: exemplifications come in, Ministers arrange things and there are some anomalies that cannot be dealt with. However, they can be dealt with, and West Sussex is one of them.

I have said to you privately, Mr Gray, and I say to the Labour party spokesman, the hon. Member for Wythenshawe and Sale East (Mike Kane)—I am sorry there is not a Liberal here for this important debate, but I am sure they would agree with us—that I cannot stay for the Minister’s winding-up speech because I have a charity’s trustees meeting to attend. However, I hope that my short remarks, especially the point about annexe C, which spells out that West Sussex is at the bottom, shows what the Minister needs to change.

It is a pleasure to serve under your stewardship, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on introducing this really important debate on funding for schools in West Sussex. He presented it in his usual robust, assiduous and charming style. I also congratulate his colleagues from West Sussex, who present a formidable, united front on this issue. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) and my hon. Friends the Members for East Worthing and Shoreham (Tim Loughton), for Worthing West (Sir Peter Bottomley) and for Horsham (Jeremy Quin) are a veritable tag team to be reckoned with. I know that when they go and speak to the Secretary of State this afternoon, they will make their case powerfully and persuasively, as they have done today. I know we all share the same ambition: to see a country that works for everyone, where schools improve and where every child, no matter which county, constituency or part of the country they live in, has the opportunity to go to a good school, to get a great education and to fulfil their potential.

Let me start with the fundamental reason we are here today: to make sure that our children benefit from an outstanding education. We need good schools in every area of the country. Investing in education is truly an investment in the future of our nation as a whole. That is why we are committed to providing equal opportunity for all children to succeed, irrespective of where they come from in the country and where they happen to grow up. A fair funding formula is a fantastic way of achieving that and providing a crucial underpinning for the education system to act as a motor for social mobility and social justice, as we all desire.

As many of my hon. Friends have said today, the Government are prioritising investment in education. As pupil numbers increase, so will the amount of money for schools. This year the core school budget will be more than £40 billion—the highest on record—which includes £2.5 billion for our most disadvantaged children through the pupil premium. That funding is also protected for the rest of this Parliament. The current funding system is holding us back, though. I do not think anyone in this Chamber disagrees with that. It is preventing us from getting the record amount of money that we are investing to the parts of the country where it is most needed.

I am grateful for the constructive and helpful way in which the Minister is winding up the debate. To pick up her point about the welcome increase in education expenditure and the number of new pupils coming into schools, the excellent St Paul’s Catholic college in Burgess Hill—a really good school in my constituency—has had a 31% increase in pupils, but there is so little money and room to manoeuvre in its staff budget that it does not have enough staff to cope with that 31%. It makes do, but it does not have adequate staff, which is one of the problems of the existing baseline and why the school needs the transitional funding to get through to the national funding formula being introduced.

My right hon. Friend makes an excellent point. I will talk shortly about the transitional funding, which I know he and his colleagues from West Sussex are all very keen on.

We are clear that without reform the funding system will not deliver the outcomes we want for our children. As many Members have said today, it is outdated, inefficient and unfair. There are two reasons for that: first, the amount of money that local authorities receive is based on data that have not been updated for more than a decade, so although local populations have changed the distribution of funding has not, and the impact of that is hugely unfair. We have heard many of the relevant figures today. West Sussex is receiving just under £4,200 for every pupil, whereas in Birmingham, for example, that figure is £5,200. Although there will always be variations in the amount different areas receive, because their needs and local costs vary, a system that creates such significant differences cannot be fair.

We are still in the consultation period, the next stage of which will be announced shortly, so I am not able to comment on that today.

Different local authorities take very different decisions about how to distribute their funding. There are 152 different local formulae, so a primary pupil in West Sussex with low prior attainment currently attracts £863 in extra funding, whereas in Trafford, for example, they attract more than £3,000 extra, and in four local authorities they get nothing. My county, Hampshire, provides no extra funding for pupils in receipt of free school meals, whereas Warrington chooses to allocate more than £3,000 to each secondary pupil in the same situation. That is why we are committed to fixing the system.

Earlier this year we launched a consultation on the new fairer funding formula for schools. The second stage, including the details of the national funding formula, will be announced in the next few weeks. Our aims are clear, and I hope Members from all parts of the House will agree that they are worthy ones. We want to create a formula that is fair, objective, transparent and simple. It should be clear how much funding is available for each pupil and that should be consistent wherever they are in the country. From 2018-2019, we intend to begin moving towards a system where individual school budgets are set by a national formula and not by 152 locally devised ones.

The reforms will mean that the funding is allocated fairly and directly to the frontline where it is most needed. They will also mean that funding reflects the needs of pupils, so the higher the need, the greater the funding. The reforms will be the biggest step forward in making funding fair in well over a decade. It is therefore vital that we take time to get them right. We need to debate the important principles that will underpin this and listen to the submissions that are coming back as part of the consultation. We have a responsibility to ensure that the system we set up now enables schools to maximise the potential of every single child.

I am aware of the concerns raised by hon. Members today that fairer funding for schools in West Sussex and other parts of the country is very much overdue. We agree that the reforms are vital, but they are also an historic change, which is why we have to take the time to consider the options and implications very carefully. We cannot afford to get this wrong. Crucially, we must consult widely with the education sector before we make changes. We will carry out the second stage of that consultation later this year and make final decisions in the new year. The new system will be in place from April 2018.

In the meantime, we have confirmed arrangements for funding in 2017-18 so that local authorities and schools have the information and certainty they need to plan their budgets for the coming year. That is so important, because a key message coming out of the first round of the consultation is about the ability to plan ahead and certainty about the future. Schools need to know where they stand.

Areas such as West Sussex, which benefited from the £390 million that we added to the schools budget in the previous Parliament, will have that extra funding protected in their baseline 2017-18, as they did in 2016-17, but I take on board the comments of my hon. Friend the Member for Worthing West, who said that West Sussex received a disproportionately low amount. We will look into that.

The next stage of our consultation, which is coming out shortly, will set out the detailed proposals for the national funding formula and show how the formula will make a difference to every school and local authority budget in the country. We will explain how quickly we expect budgets to change. We have been clear that we want schools to see the benefits of fairer funding as quickly as possible, but the pace of change must be manageable for them. The strong message is certainty and the need to be able to plan ahead. We fully take on board the real-term impact on budgets of the recent changes to pensions and national insurance contributions that my right hon. Friend the Member for Arundel and South Downs mentioned.

All local Members have spoken about the transitional arrangements. I hear them and I know that they will make a powerful case to the Secretary of State this afternoon when they see her. The Minister for School Standards has been working hard on the arrangements. As usual, we will finalise school funding allocations for the coming financial year in December, taking into account the latest pupil numbers from the October census.

Reforming the funding system to ensure that areas such as West Sussex are fairly funded is only half the story. As hon. Members have pointed out, as with all public services, it is vital that schools spend the money that they receive as efficiently as possible. The most effective schools collaborate through academy trusts and federations, or as part of teaching school networks or clusters. They share knowledge, skills, experiences and resources to drive the important changes that support their school’s education or vision. Schools are best placed to decide how to spend their budgets and achieve the best possible outcomes for their students. Lots of schools in West Sussex are already doing that, despite having very low funding compared with other parts of the country. We recognise that the Government have a role to play in ensuring that schools are supported to make every single penny of their funding count. That is why we launched a package of support for schools in January that includes new guidance and tools to help them make the most of the funding they receive, and we will continue to update and improve that offer to schools.

I am enormously grateful for the support that my right hon. Friend the Member for Mid Sussex and the other West Sussex Members have given to the agenda. They have all raised important issues. I hope that they are reassured, more than anything, about the Government’s long-term commitment to reform school funding so that there is a fairer system for children in West Sussex and across the country—a system where funding reflects the real level of need, so that pupils are able to access the same educational opportunities wherever they happen to live.

A fair national funding formula underpins our ambition for social mobility and social justice, and will mean that every pupil is supported to achieve the very best of their potential, wherever they happen to live. Although we should recognise that there are challenges currently, and that challenges will lie ahead, I hope all hon. Members give support to and work with the Government to achieve that vital aim.

Question put and agreed to.

Resolved,

That this House has considered the funding of West Sussex schools.