PARLIAMENTARY DEBATE
School Funding - 21 July 2016 (Commons/Commons Chamber)

(Urgent Question): To ask the Secretary of State for Education if she will make a statement on school funding.

I am firmly committed to introducing fairer funding for schools, high needs and early years. This is an important reform, to fairly and transparently allocate funding on the basis of schools’ and children’s actual needs.

As the written statement I have laid today sets out, this Government are investing record levels of funding for schools. With that investment, fairer funding will set a common foundation that will enable schools to maximise the potential of every child. They will no longer be held back by a funding system that is now arbitrary, out of date and unfair. Fairer funding will provide a crucial underpinning for the education system to act as a motor for social mobility and social justice.

The first stage consultations on national funding formulae for schools and high needs have been met with an overwhelmingly positive response from headteachers, teachers, governors and parents. I am also clear that this is a once-in-a-generation opportunity for a historic change and therefore we must make sure we take the time to get the final approach right. I will therefore publish the Government’s full response to the first stage of the schools and high needs consultations, and set out my proposals for the second stage, once Parliament returns in the autumn. We will run a full consultation, and make final decisions early in the new year. Given the importance of consulting widely and fully with the sector and getting implementation right, the new system will apply from 2018-19. I will set out our full plans for a national funding formula for early years shortly.

I do understand that local authorities need sufficient information to begin planning their funding arrangements for 2017 to 2018. Local authorities need time to consult with local schools—both academies and maintained—to ensure that the funding they provide is being directed appropriately. As well as a fair system, schools and local authorities need stability and early notice of any changes in order to fulfil this important duty properly.

I have therefore confirmed today in my written statement that no local authority will see a reduction from their 2016-17 funding for schools or for high needs next year. Final allocations for that will follow in December on the basis of the latest pupil numbers, as usual. My written statement also confirms that for 2017-18 we will retain the minimum funding guarantee for schools, so that no school can face a funding reduction of more than 1.5% per pupil next year. As my written statement today confirms, I am determined to ensure both that we move to a fair funding system and that we do so in a measured and properly consultative fashion.

This will be a crucial part of delivering an education system that works for every child, no matter their background.

The key point, as the Secretary of State has spotted, is that local authorities need to have time to prepare, and so too do schools. So the essential question is: can the Government really meet this timetable as set out, because that is the desire of all schools, particularly in England obviously, and it is of interest to every single Member of Parliament in England? I ask the Secretary of State to confirm when she really does expect this programme to be fulfilled, and how she is going to be sure that the next consultation period does not take quite as long as the previous one, because that took some three months to complete, and we still do not know where we are. Those are the key questions.

My hon. Friend is right that we want to strike a balance between moving rapidly towards a fairer funding formula while at the same time making sure we do so in a way that allows time not only for the details of that formula to be debated, because they will have a big impact on how it works effectively, but for local authorities, and indeed schools, to understand the changes and then prepare. That is the balance that I have tried to strike today.

I also want to act responsibly by ensuring that we do not rush into making changes without being fully sighted of their ramifications. I know that the debates in Parliament on the fair funding formula have resulted in long-standing frustration, and I am committed to resolving that, but I want to be sure that we do this effectively so that we do not have to revisit it because we have not got it right the first time.

This Government’s attitude to school funding is woeful. Talk about last minute! Schools are struggling to cope with a 5% funding shortfall as a result of the Chancellor’s decision to increase national insurance and teachers’ pension contributions. Does the Secretary of State not recognise that pupil numbers are rising and that the shortage of teachers is growing? Will she put money into helping schools in the new formula? Only this Government could have the audacity to deliver real-terms cuts to school budgets across the country and claim that it represented fair funding. Will the Secretary of State publish in the Library of the House the amount that each local authority has received under the existing funding formula and the amount that it will receive following today’s announcement?

The hon. Lady has asked a range of questions. In summary, I have made it clear in my written statement today that no authority will lose funding either for schools or for high needs. This will enable us to give authorities a firm foundation on which to start planning for next year. The reality is that we have seen funding for schools and across education rising. This has been one of the areas that this Government and the coalition Government have sought to protect, and that has been evidenced in the results. We now have 1.4 million more children in good or outstanding schools, and we want that progress to continue.

Schools in Staffordshire are among the lowest funded in the country, and that is a matter of great concern for the headteachers I met last week. We understood that we were moving to a fairer funding formula from 2017-18, but it now seems that it will happen a year later. Will the Secretary of State make it absolutely clear that there could be transitional funding for 2017-18 for those authorities that are in a desperate position, as Staffordshire is?

I recognise the pressures that my hon. Friend has just set out. This now gives us time to look at how we can deal effectively with those issues. We should also recognise that, while some schools are disadvantaged by the current formula, there will also be changes for schools under the new formula, and this gives us a chance to work effectively with them to ensure that there is a sensible and measured transition from the historical approach to the fairer, sensible approach that we are introducing.

Prior to the Secretary of State’s appointment, the noises coming out of the Department for Education suggested that London schools, in particular, would be seriously hit by the changes to the funding formula. Schools in Harrow have been advised that they will face a real-terms budget cut of between 3% and 8% as a result of the changes that her Department is considering. Can she offer any reassurance to the headteachers and parents in my constituency that that will not be the case?

I have set out the details in my statement today of how we are going to proceed. As the hon. Gentleman says, some schools will see a change in the funding they receive as a result of our evening up the system and making it fairer, and these are important changes. It is therefore right that we should give ourselves the time to ensure that we can be effective in helping schools to deal with the changes well through a steady transition.

Given the optimism that schools in Chippenham felt on hearing the announcement of a fairer funding formula to rectify the ludicrous situation in which Wiltshire pupils receive over £2,000 less than pupils in other areas, will the Secretary of State confirm her commitment to the people of Wiltshire, including the 8,000 who signed my fairer funding petition?

I can indeed; we are going to get on with this funding formula. To tie my hon. Friend’s point together with that of the hon. Member for Harrow West (Mr Thomas), we now have a school funding system and a funding formula, but we also introduced the pupil premium, so we have additional mechanisms to ensure that the funding follows disadvantaged pupils with additional needs. We are now trying to get a system in place that is sensible about the core funding that schools receive and not based on frankly very old data. At the same time, the system should take account of the fact that we are able to top up through the pupil premium and other funding mechanisms when we particularly want to tackle disadvantage.

Will the Secretary of State confirm that, behind the warm words of fairer funding, school funding is still set to be cut by some 8% by 2020, as confirmed by the Institute for Fiscal Studies, and that is coming at the same time as we see the threat of falling teacher numbers? Over a third of the children in this country currently leave school without five good GCSEs. Will she also confirm whether my local authority in Hounslow will see a funding cut? When will it know?

I have been clear that no local authority will see a reduction in funding for 2017-18. My announcement today was clear that we will ensure that we have the time to bring in the fair funding formula effectively. The hon. Lady should not forget that, as I have set out, the introduction of the pupil premium means that we now have an additional £2.5 billion that will be specifically targeted to ensure that disadvantaged children get an additional top-up so that their schools can provide additional support.

I am delighted by the Secretary of State’s commitment to fair funding, which we clearly must get right, but I urge her to look urgently at transitional arrangements for counties such as West Sussex, which so desperately needs funding.

My hon. Friend makes his point clearly. I assure him that we will look at a sensible approach for the transition period of 2017-18.

As a former Select Committee colleague, I am delighted to see the Secretary of State in her new place and congratulate her. I urge her not to follow the example of her two predecessors; she should build a strong relationship with headteachers and teachers.

Will the Secretary of State make it absolutely clear that the pupil premium, which is hugely important for targeting funding at the most disadvantaged, will be protected in real terms when the changes are actually made?

I remember my time on the Work and Pensions Committee with the hon. Gentleman with real fondness; I very much enjoyed it and learned a lot over those years. He mentions headteachers and teachers, and one of the first things that I did upon coming into this role was to pick up the phone and call the teaching unions to introduce myself and to set up initial meetings. I saw them briefly yesterday and I hope that I can have a constructive, productive relationship. The most important people who helped me to get educated were my teachers, to whom I will be eternally grateful. It is important that that is recognised.

On the pupil premium, I can tell the hon. Gentleman that the funding rates are protected for the entire spending review period at 2015-16 rates.

Like me, my right hon. Friend was educated in a comprehensive school in Rotherham, so I warmly welcome her to her new role. While we can adjust the school funding formula in the short term, does she agree that the only way to increase school resources in the long term is to have a strong and growing economy?

My hon. Friend hits the nail on the head. I am proud that both of us went through the state school system in Rotherham. I hope to be able to go back up there in the coming weeks and months to revisit some of the schools that enabled me to have the education that gave me a platform to try to reach some of the goals that I set myself. As he says, a strong economy is vital for ensuring not only that we have the funding to invest in our education system, but that the children coming through our state school system have the opportunities to stretch themselves and to get the dignity of work.

I have written to the Secretary of State today and she will be receiving a letter shortly, so I hope that she will keep an eye out for it over the coming days.

Under the formula proposed by f40—the campaign for so-called fairer funding in schools—schools in north-east Lincolnshire suffer a £2.1 million cut, equivalent to over £100 per pupil a year. Does the Secretary of State agree that any formula that takes resources away from my constituency, in which no secondary school is currently rated outstanding, cannot be described as fair?

I agree with the hon. Lady that, over time, the current formula had simply become out of date. It was based on statistics that needed to be updated but, in essence, could not be, so it was time to take a fresh look at how we could make it fair. Her second point about focusing our efforts on the remaining parts of the UK where our education system is simply not delivering for our children is vital, and I do plan to focus on this.

My constituency contains significant areas of deprivation where there is underperformance, particularly among white working-class boys. Will my right hon. Friend assure me that nothing in this formula will have an adverse impact on the urban and deprived areas in my constituency?

I have set out how local authorities, including my hon. Friend’s, will not be seeing a reduction in funding for 2017-18. Targeting the parts of our country where children are just not getting the start they deserve and need in order to do well in life will be central to my efforts, alongside making sure that we continue to lift outcomes for children overall across the rest of the country.

I warmly welcome the Secretary of State to her post and the other new Minister, the skills Minister, as well as some of the old team. I chair the advisory council of the Sutton Trust, and we look forward to working positively and creatively with the Secretary of State. May I remind her that England is a vast society that is changing all the time? Other Governments, including Labour Governments, have not cracked the problem of getting the funding to the right places at the right time, so will she consider having an independent group, even a commission, to look at this, year on year, month on month, so that we get it right? That is just a germ of an idea, but will she consider it, because we all get this wrong at some stage?

I make two points in response to the hon. Gentleman’s important point. First, we have to make sure that although we set policy at the Whitehall level, we understand how best to ensure it can have the impact we seek at the individual child level. That is not always easy. We can learn from examples such as city deals, where local areas have taken ownership of physical infrastructure to make sure that there is a common plan that the Government nationally are investing in alongside a local plan. His point is a really strong one.

Secondly, I want my Department to be a central engine for social mobility more broadly. We need to challenge ourselves across government, and the Department for Education has a key role to play in this in saying that not only do we want children to be coming out of our schools better educated, but we want to make sure that the jobs and careers are there for them to be able to make the most of their potential. In the end, a country’s most important asset is its people, which is why I am so delighted I am in the job I am in.

May I highlight to my right hon. Friend that Kettering has 8,879 primary places, rising to 9,677 by 2021, and 6,700 secondary places, rising to 7,637 by 2021? The county council says that all places will be full by the 2017-18 academic year. Will she ensure that when she looks at the issue of fairer funding, counties such as Northamptonshire and places such as Kettering, which have some of the fastest rates of house building in the whole country, get the funding they need to make sure we have enough school places for our children?

My hon. Friend raises the important issue that alongside many of the reforms we have introduced, a demographic shift is taking place which means we simply need to scale up our education system to keep pace with the number of children who need it. We have created 600,000 school places, but we need to do more. I assure him that the funding formula statement that I am setting out today means we are in a better position going forward as we introduce it to make sure fair funding follows the child, including in Kettering.

I warmly congratulate the Secretary of State on her appointment, and she is absolutely right not to rush this, because getting the new formula wrong would be a disaster. The previous Under-Secretary, the hon. Member for East Surrey (Mr Gyimah), offered at the Select Committee to meet me and my hon. Friend the Member for Gateshead (Ian Mearns), who is in his place, to discuss the case for a rapid pupil turnover factor in the new formula. Will she confirm that that offer still stands and let us know which member of her team that meeting should now be with?

That offer does still stand. I will get back to the right hon. Gentleman when we have worked out which Minister will attend the meeting.

Following on from my hon. Friend the Member for Kettering (Mr Hollobone), more and more parents in many parts of my constituency are finding it difficult to get their child into the school of their choice. Just to give one example, there is a desperate need for more secondary school places in Wharfedale in my constituency. May I ask the Secretary of State, whom I very warmly welcome to her new role, to look at the need for school places in the Shipley constituency and ensure that my parents can get their children into the school of their choice, because at the moment, for many of them, that is a distant dream?

Again, this is an incredibly fundamental and important issue. I simply assure my hon. Friend that I am well aware of the need to ensure that, alongside all the other changes that are rippling through the education system, we have enough places for the children of our country, that we have enough teachers who can be in those classrooms teaching them, and that those teachers are outstanding and excellent and able to excite children in the classroom, help them learn and give them that best start in life.

I, too, welcome the Secretary of State to her place. I am sure that she is looking forward to her appearances before the Education Committee, probably starting in the autumn.

Fairer funding inherently means a process of redistribution, and many schools, heads and governors whose budgets are already at the margins and who are possibly looking forward to a 1.5% per pupil cut will be looking at that with real trepidation, particularly if they are already in receipt of tight budgets. There is a great deal of social need in an awful lot of schools in constituencies such as mine. It is mainly a shire county appeal that has come from the f40, and an awful lot of schools in the inner cities are wondering whether they will be on the receiving end of a cut.

I recognise what the hon. Gentleman is saying. I underline the rationale behind why we introduced the pupil premium in the first place, which was to address many of the points that he has made. His comments underline why I am setting out this statement today. It is a substantial change in funding for all schools and therefore, ultimately, we need to get it right.

I, too, welcome the Secretary of State to her role, and welcome the inclusion of skills in her brief, as it has been too far from the centre of education policy recently.

Following on from the question of my fellow Hounslow colleague, my hon. Friend the Member for Feltham and Heston (Seema Malhotra), will implementation of fairer funding in Hounslow mean even greater cuts from 2018? Will the Secretary of State reassure the heads that we met a couple of weeks ago, as they are already having to make cuts to things such as A-level options, support for children with special needs, mental health counselling and support and so on?

As I set out in my statement today, we will be launching a consultation on the detail of how we plan to introduce the funding formula. That will give both the hon. Lady and her local schools and teachers ample opportunity to be able to feed in their local perspective.

Representing as I do a cross-borough constituency, I know the unfairness of the current system. It cannot be fair that a child from Reddish in Stockport receives less funding than a child from Denton in Tameside—areas that share the same socio-economic characteristics, but are in different local authorities. Will the Secretary of State’s new fairer funding formula ensure that those children in Reddish are not disadvantaged just because they are in a more prosperous borough overall, and that their funding will be matched to those of the children in Denton?

I think that I can confirm to the hon. Gentleman that the funding formula will start to iron out those sorts of inequities. Once we launch the second phase consultation, he will be interested to see the criteria and characteristics that we will incorporate to help ensure that we have a fairer approach on funding for schools in the future than we have had in the past. I will also set out for him the architecture of what we are trying to achieve. If we want to overlay significant additional resources in relation to deprivation, we want to do it in a smarter way and we want to use things such as the pupil premium to do it effectively. We recognise that we also need to have an element of understanding about the attainment, the eligibility for free school meals and other characteristics in the core funding formula too.