PARLIAMENTARY DEBATE
Education Funding: Devon - 18 January 2017 (Commons/Westminster Hall)

I beg to move,

That this House has considered education funding in Devon.

It is a great pleasure to serve under your chairmanship, Mr Hanson.

The situation for schools in Devon that will result from the proposals set out in the Government’s consultation is of great concern to us all. As a member of the f40 Group, Devon has historically been one of the lowest-funded education authorities in the whole of England. At the moment, in education funding, it stands in 143rd place out of 150 local authorities. Devon received a schools block unit of funding allocation of £4,346 per pupil in 2016-17. The national average was £4,636, which means that there is a shortfall for Devon of £290 per pupil, or £25.5 million for all 88,065 pupils in the local authority. For those listening to the debate who are not as informed as you are, Mr Hanson, it is worth pointing out that, when I speak about Devon, I exclude the unitary authorities of Torbay and Plymouth, but no doubt Members who represent both places will want to contribute to the debate.

The current situation is manifestly unfair, not only for pupils in Devon but for teachers and headteachers, whose performance will be judged against that of other schools throughout the country. Devon Members of Parliament have been campaigning for a fairer funding settlement for many years, so this is not something new. I have been a Member of the House since 2001, and other Devon MPs have served for longer. I think it is fair to say that we have all been campaigning, throughout the Labour years when money was channelled away from rural areas into Labour heartlands, under the coalition Government and under the Conservative Government. Quite frankly, under this Government, we expect better.

Cost pressures, combined with the necessary fiscal consolidation, have had a significant cumulative effect on school budgets. Let me give a few examples of such pressures—other Members will cite others. Areas such as my own, East Devon, have experienced significant population growth because of the often required growth in house building and the incentives for it that there are now. The inevitable resulting growth in pupil numbers has had and is having a huge impact. The education services grant, which previously gave authorities and academy trusts money to fund their schools’ services, has been cut. The national living wage, which has absorbed much of the increase in social care funding—we have debated how much in the House—has had the same effect on education, with an increase in staff costs. Initial analysis suggests that the apprenticeship levy could cost Devon County Council as much as £424,000. The change in the SEND—special educational needs and disabilities—code of practice, which enables people with special educational needs to remain in education up to the age of 25, has added huge pressure, especially considering the increase in the average cost of specialist independent provision. Of course all Members welcome the change, but it needs to be properly funded. Devon County Council proposes to reduce funding to all schools by £33 per pupil for two years to make up for the high needs block shortfall; Devon’s high needs block has increased from £53 million in 2014 to £61 million in 2017-18.

It is not that some of those measures and developments are not welcome—we are very positive about some of them—but it is important to recognise that schools are now expected to do more with less, which inevitably leads to cuts, redundancies or increased class sizes.

The effect of these pressures on contingency reserves is being seen in the level of carry-forwards being forecast for maintained schools in Devon. We have a huge backlog, particularly in respect of the maintenance of many of our primary schools. In 2015-16, contingency reserves were £21.1 million, but in 2016-17 the figure is estimated to be £9.6 million. That is hardly much of a contingency reserve, given the number of schools we have across the county.

A number of headteachers in my constituency of East Devon have said in letters to me that, as a result of these pressures, there is

“a very real probability that our schools can no longer continue to sustain high quality provision of education and essential support for every pupil without the urgent necessity to take some very undesirable as well as far-reaching decisions to reduce costs in order to balance the finite resources available. Sadly, the implications of these decisions will undoubtedly impact upon the children in our care, including those from some of our most vulnerable families, and these will ultimately manifest further into the wider community.”

Since they are in one of the lowest-funded education authorities in the country, schools in East Devon were looking forward to the new funding formula, especially considering the year-long delay. The review and the subsequent public consultation are certainly welcome, and I encourage constituents to respond to it. It is important to emphasise that the proposals are not final and that they are subject to the consultation, which I understand runs until the end of March; the Minister may wish to enlighten us further on that.

I do not want to get into a bidding war between different authorities, but I would like to highlight some of the misunderstandings about funding that have arisen between us and our neighbours in Cornwall. The foreword to the Department for Education’s consultation on the national funding formula notes that

“a primary school in Cornwall teaching a pupil eligible for free school meals with English as an additional language would receive £3,389, whereas if the same child was at a school in Devon the school funding would be £4,718.”

That difference is mainly explained by the amount allocated directly to schools by each authority to support disadvantaged pupils or those with additional educational needs. Devon County Council delegates a much larger proportion of funding directly to primary schools. For example, using the free school meals deprivation factor alone, Devon allocates £1,378, compared with Cornwall’s £340. However, Devon still trails Cornwall in funding per pupil; Cornwall’s average funding per pupil is £4,355, which is £9 more than Devon’s average of £4,346. If Devon got the same rate as Cornwall, we would receive an additional £792,000 for education across the county.

If implemented, the national funding formula proposals will result in 212 Devon schools, or 62%, gaining; 129 schools, or 37%, losing; and two schools, or 1%, remaining the same. The proposals will reduce Devon County Council’s overall schools funding by £500,000 for the first year, when the Department for Education proposes transitional arrangements to prevent schools from gaining or losing considerably in one year and to ensure that the national budget can cope with the changes throughout the country. When the transitional arrangements are removed, the proposed changes will result in a relatively slight increase of £1.4 million, or 0.38%, in Devon’s overall funding for schools. The Minister may point to that and say that Devon will be a net winner, but a 0.38% increase is woefully insufficient to meet the rising cost pressures. It will not even meet the 0.5% increase in the apprenticeship levy. We need to go beyond the headline figures.

Illustrative funding under the national funding formula in the first year of transition would see 15 schools in East Devon gaining funding but 20 losing out. On average, that would mean a 0% change in the amount of school funding for East Devon. That includes all my secondary schools in East Devon losing funding: Sidmouth College, Exmouth Community College, Clyst Vale Community College, the King’s School and St Peter’s Church of England Aided School. How can it possibly be fair to reduce the level of funding available to schools in East Devon, a part of the country that has been historically underfunded?

The headteacher of the King’s School, Rob Gammon, has said that these cuts would have a “considerable” impact, especially considering the other rising costs. The chair of governors at Exmouth Community College, the excellent Councillor Jill Elson, has also expressed concern. The school is already one of the biggest in Europe. It is certainly—I hope the Minister will confirm this—the biggest secondary school in England; if it is not the biggest, it is the second biggest. It has an excellent headteacher in Tony Alexander, who has done magnificent things in that place. The school has found savings of more than £l million per year over the past five years, and it has now been asked to increase its pupil numbers to 2,900 by 2020.

Similarly, the headteacher of Sidmouth College, James Ingham-Hill, has expressed his “bitter disappointment” following the publication of the proposals. He said that

“without a significant rise in funding over the next few years, class sizes will need to rise to unprecedented levels and standards are bound to fall in all underfunded areas of the country.”

He also said that the proposed formula

“leans heavily towards measures of prior attainment. Devon has a high standard of pupil attainment in primary schools, so the county’s secondary schools will also lose out from a formula that penalises this success.”

This Government talk about reintroducing or expanding grammar schools to allow those who are good to get on, but at the same time they seem to be introducing a national funding formula that penalises at secondary level parts of the country that have high levels of achievement at primary level. That seems to contradict entirely what we, as a Government and a party, are seeking to do. What they are saying is that the less an area achieves at primary school level, the more money it will get at secondary school level—in other words, let us tell all our primary headmasters in Devon to lower standards, lower attainment and lower the exam results because more money will be made available to secondary schools. That is a perverse incentive that has no place in any kind of logical, joined-up thinking.

Currently, schools in Devon face a triple whammy. One is the historical underfunding. I look forward to the speech by the right hon. Member for Exeter (Mr Bradshaw). I hope that he will not be too party political, otherwise Conservative Members will need to point out the educational gerrymandering that went on under Labour and the expensive private finance initiative that has saddled primary schools, particularly in Exeter, with an almost unsustainable weight of debt. That went on for many years under “old Labour”, as we must now call it, so I hope that he will approach this in the spirit of being a Devon MP, not the only, rather diminished red beacon in the south-west.

I think that we would all agree across the House that the Minister needs to go back to the drawing board and look again at the national funding formula in order to get this right. The Government must take a holistic approach to the issue and fully consider not only the historical funding factors—I have not yet said anything about the huge amount of money that Devon County Council has to come up with every year just to get children to school. I think that Yorkshire’s bill was a bit higher than ours, but it must be about £25 million that we have to come up with to get children to school. I have not even touched on that cost this morning. I have been talking about what happens when pupils actually get to school, if there are going to be schools.

Therefore, the Government must take a holistic approach to the issue and fully consider not only the historical funding factors but the current pressures on education budgets in order ultimately to give schools in areas such as mine a real financial boost. Fairer funding has been promised by many Governments, of all persuasions, many times, and it is my hope and belief that this will be the Government who finally deliver.

Having been a Minister in the Government from 2010 to 2016, I am acutely aware of how easy it is for Back Benchers of all parties to demand more funding from the Government. I am equally aware of the quite appalling financial situation that we inherited in 2010. This country simply cannot go on a financial spending splurge, which would saddle our children and our children’s children with ever more debt, particularly at the same time as we are renegotiating our relationship with the world outside the European Union. It would be absolutely wrong, counterproductive and irresponsible in the extreme to adopt some of the spending proposals, which seem to change fairly regularly, that Her Majesty’s loyal Opposition come up with from time to time. So I am not suggesting that.

What I am saying is that, within the spending envelope that the Government have set out, we want fairness. I believe that all Members in this Chamber this morning, across the party divide, would agree that, for too long Devon, as a county, has lost out in terms of educational funding. We have waited and waited and waited for the new review of the situation, in the expectation that finally that will be recognised and our children, our teachers and the other staff in education will receive a fair and properly funded settlement. On the face of it, I have to say to the Minister that that does not appear to be the position we are in. I say to him gently, as south-west MPs come together perhaps more regularly than we have in the past, that it was the south-west that delivered a majority for this Government in 2015. It is the south-west that often considers itself to be an overlooked part of the country in terms of spend and infrastructure. It is the south-west and south-west MPs who, together, will not put up with being overlooked any more. We have come together this morning to say, “Let’s look again at the review, let’s get it right and let’s get a fair deal for Devon.”

Before I call other right hon. and hon. Members, we appear to have an abundance of time, but I intend to call the Opposition Front Bencher at 10.35 am. Five right hon. and hon. Members wish to speak, so I hope that you can self-regulate in that 45 or so minutes.

I congratulate the right hon. Member for East Devon (Sir Hugo Swire) on securing this debate. However, although it is very important that we discuss and focus on the Government’s new proposed funding formula and its impact on Devon, we should not lose sight of the big picture, which is that funding for all schools in England will fall dramatically in this Parliament. The National Audit Office has confirmed that by 2020 English schools will suffer overall a cut of 8% in real terms in their funding.

As the right hon. Member has already said, huge expectations were raised when the Government said they would consult on the new formula. At the time, I warned Ministers in a meeting with them that changing any funding formula when overall funding levels are falling is a risky business, because it inevitably creates more losers than winners. My assessment of what is being proposed for Devon rather mirrors that of the right hon. Gentleman, namely that we are just fiddling around the edges here. Overall, Devon would gain a tiny amount—a 0.38% rise in overall schools funding—but many schools would lose out. As he has already pointed out, that minuscule improvement would be more than wiped out by the cost to our schools of the increase in the apprenticeship levy, although that is only a 0.5% increase and is dwarfed by the overall cut of 8% in school funding in this Parliament that I referred to a moment ago.

The right hon. Gentleman talked about a “triple whammy”. If Devon faces a triple whammy, Exeter will suffer a quadruple whammy, because—like many cities in shire counties—we are already at a double disadvantage. Devon schools are already among the worst funded in England, receiving £270 per pupil less than the England average, but Exeter schools lose out even more badly because they subsidise the huge cost of providing school transport in a largely rural county and the cost of keeping open small rural schools. Two of my high schools, St James School and Isca Academy, have each lost £300,000 a year since 2014.

Despite Exeter’s position, under the Government’s new proposed formula we will lose out by 0.14%. All the Government seem to be proposing for my constituency is to take money away from primary schools, the majority of which would lose out in the new formula, to give a tiny bit more to most, but not all, of my high schools. That is not robbing Peter to pay Paul; it is more like robbing Peter to pay Peter. The overall impact will be that by 2020 the average student in Exeter will suffer a £420 cut in annual funding compared with 2015-16, and that is after seven years of coalition and Conservative Government. That will have very serious consequences for children’s education in my constituency.

Two of my primary schools in the least well-off parts of Exeter will actually lose funding. I have been told by a headteacher that one primary school in Exeter is planning to move to class sizes of 45 to cope with the funding squeeze. Under the Labour Government, we got class sizes down to a maximum of 30. We are losing teaching assistants, school counsellors and support for children with complex and special needs at a time when the Government claim they are concerned by the deterioration in young people’s mental health and wellbeing.

Since the Labour Governments of Tony Blair and Gordon Brown invested significant extra resources in all our schools, attainment in Exeter’s schools has risen significantly. We have also benefited from five brand-new high schools, which replaced the dilapidated schools that I inherited in 1997, and new and improved primary schools. That has given a huge boost to the life chances of my constituents’ children, and that progress has been maintained despite the funding freeze since 2010. However, that quality will not survive the sort of cuts our schools now face. As the right hon. Gentleman has already said, Conservative-run Devon County Council is proposing to raid the schools budget even further, to the tune of £2.22 million, because of the big deficit it faces in the budget for children with special needs. I am sure we all agree that Devon must fulfil its legal obligation to some of our most vulnerable young people, but that will mean a further cut of £33 per pupil to schools funding across the county.

There is widespread reporting in the media and discussion in this place about the crisis in our health and social care system, but we are also seeing the beginning of if not a crisis, then a serious deterioration in education. We have a recruitment, retention and teacher morale crisis, even in an attractive place like Devon, where people like to live and work. But the Government, as the right hon. Gentleman acknowledged, focus on irrelevancies, such as their ideological obsession with free schools, forced academisation and the reintroduction of selection. I hope that we see real opposition from Devon’s Conservative MPs to some of those damaging Government policies, rather than just warm words. They should stand up and fight for the interests of Devon’s children and families and vote against their Government’s damaging policies.

It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on securing this timely debate. After his many years on the Front Benches, it is very good for the rest of us in Devon to have him back on the Back Benches, because we face a number of challenges. His experience, energy and expertise will help us try to tackle some of these long-term challenges.

I am delighted that the Minister is in his place. He knows that I think he is a tremendous Schools Minister. In all seriousness, his rigour and commitment to increasing the academic achievements of young people in this country are appreciated up and down the country. He is making a difference, and that is tremendous. I also know that the consultation exercise on funding is genuine. I expect him to nod vehemently here. The reality is that if the funding stays as it is, it will not attract the support of a number of us here in this room, because it is unfair.

It is true to say that we have been waiting for years in Devon for a revision to the national funding formula. When the Secretary of State came to the House just before Christmas and announced that a new funding formula was about to be unleashed on the world, it seemed to be extremely good news for us in the far south-west. The expectation was that some of the overfunding of schools in other parts of the country would be corrected to improve things for those of us living in the west country. Everyone thinks it is just a place to go on holiday and have cream teas and so on, but it has genuine challenges of infrastructure, connectivity, education, social services and health that we need additional investment to help us with.

We were like thirsty men and women crossing the desert, approaching the oasis. The end was in sight. Good news was just around the corner. Sadly, when we started to look at some of the details, it was not an oasis at all—it was a mirage. That was disappointing. In the Secretary of State’s statement at the Dispatch Box, I heard her say, “Isn’t it great that over a number of years we will correct the fact that pupils in Plymouth”—I will explain the difference between Plymouth and Devon in a second—“currently receive £500 a year less than pupils in Coventry?” Coventry and Plymouth are very similar places, as they were both devastated by Hitler in the second world war and rebuilt.

We were encouraged to think that a long-standing grievance and injustice would be corrected. Even though it is true that many Plymouth schools are doing well, and I thank the Minister for that, unfortunately when we start to look at the numbers, we see how illogical they are. Schools face similar challenges with similar pupils from similar backgrounds and, as my right hon. Friend said, have transportation issues and costs on top of that, so it is crazy to learn that in many Devon schools the situation will go backwards.

My constituency is two thirds Plymouth and one third Devon, so I am partly encouraged by some of the news that the Minister has brought in recent weeks, but I am concerned about some of the outcomes in the consultation document. He will remember coming to Ivybridge Community College just before Christmas to open a new maths block. Unfortunately, I could not be there, but the reaction from the school was, “What a great man! He spoke very positively and inspired the young people.” He perhaps neglected to say that as part of the national funding review, the college—an outstanding beacon of excellence in Devon—was about to receive a cut of £203,000 from its budget. That would not have gone down quite so well in the new building opening ceremony.

Ivybridge Community College is outstanding and has been brilliantly led for many years. It is in a multi-academy trust. Three of the primary schools involved in that trust are: Stowford School, which faces a 2.75% cut, representing £37,000; Woodlands Park Primary School, which faces a 2.57% cut, representing £28,000; and Yealmpton Primary School, which faces a 1.35% cut, representing £9,000. In total, the multi-academy trust faces a cut of £277,000. It is being penalised for being outstanding and teaching kids in a most remarkable way. That simply is not good enough.

It is rumoured that the Minister carries around with him—he possibly even takes it to bed at night—a list of all the education authorities in the country, showing where they are in relation to each other and what the baseline is. It may even have different colours in it, with green for those doing well and red for those at the bottom. If he looks at that list, I think he will find—if the list exists at all—that Devon appears about an inch from the bottom of the second page. Our baseline is right down at the bottom compared with all the other education authorities in the country. We were expecting to come up his list. We were expecting to come towards the top of at least the second page, if not the first. What has happened? We are either standing still or going backwards. We are staying right at the bottom of his list of education authority funding. I am sorry to say that that simply is not good enough.

The Minister will be pleased to hear about one thing that is happening in my area at the moment. My four secondary schools in Plymouth—two in Plympton and two in Plymstock—and Ivybridge Community College in Devon are consulting with parents, staff and everyone else about becoming a large multi-academy trust over the next 12 months or so. That is what the Government are seeking to inspire. It is all very exciting and I fully support it, but the four schools in Plymouth, which are having their budgets increased, are coming together with an outstanding school in Devon that is having its budget slashed. It teaches children from similar backgrounds who are from exactly the same golden triangle of Plympton, Plymstock and Ivybridge. It makes no sense and there is no logic or reason to it.

I am afraid that the Minister, of whom I am a great fan, must look again at the formula and tweak it in some magical way. I realise it is difficult when applying such a formula. For years no one has understood what either the local government or the education funding formulae are all about. I know it is very difficult. One cannot just take £100 and put it there. I urge the Minister to look again at the formula, because the formula that we have seen and the proposed education settlement for the next two years are simply not acceptable.

I want to conclude on this point. I had a meeting with my Whip yesterday. He is a very fine man and we talked about the future and how well the Government are doing. Of course, this was on the back of a most outstanding speech by the Prime Minister yesterday, setting out a clear, strong and coherent vision for this country, which many of us can get behind. However, I said to my Whip, “There are a number of things coming down the track about which I need to give due notice.” It is wrong for any colleague to say to the Government, “I don’t like what we are about to do tonight; I am going to vote against it.” Proper notice needs to be given. That is the mature way forward, but I wish to send a clear notice, if I may, Mr Hanson, to my Whip, to the Government and the Minister, and perhaps the Parliamentary Private Secretary can take a little note and send it to the Education Whip. If the education funding settlement does not change in relation to Devon schools and if there is no significant uplift in whatever format it comes in six, nine or 12 months’ time to be voted on by the House, whether in a statutory instrument Committee or wherever else it might be, I will vote against it.

Hear, hear!

The settlement that is being proposed for Devon schools is simply illogical and unfair.

Previous speakers, particularly my right hon. Friend the Member for East Devon (Sir Hugo Swire), have set out clearly Devon’s underfunding predicament and its history. I want to delve a little more deeply into some of the causes and the action that the Government need to take now.

I was fortunate. Prior to the start of this parliamentary Session, I had a meeting with the Devon Association of Primary Headteachers and the Devon Association of Secondary Heads. Their input was illuminating to say the least. The current funding formula is unfair and the proposals for the future funding formula are equally unfair. But why? The heads are concerned that the consultation is one in which they are not really being listened to. It is far from clear to them what assumptions the Government have made in coming up with the new formula. My headteachers would be delighted to meet and help the Minister in Westminster or in the constituency. Unless we can help him really understand the issues and make sure his assumptions are right, we will always get a second-rate result. We cannot simply take the old and fiddle with it. We have to fundamentally look at what it is that we need to do differently.

Part of the problem is the decisions made by central Government and those made by local government. When I sent one of my many letters to the Minister, which he swiftly replied to, he explained that I should draw comfort from the fact that the school block was ring-fenced. That sounds great, but unfortunately it does not really work. As my right hon. Friend the Member for East Devon has pointed out, it is for the local authority to determine what goes into each school. The approach taken by Devon, as has already been explained, is very different from the approach taken by Cornwall. Partly for that reason, the statistics appear to show that Cornwall gets better funding than Devon, but that is because the local authority has chosen to adjust in a different way.

I do not think our children should be the victims of a postcode lottery, depending on which council does what. I am not in favour of prescription, but I am in favour of guidance, and we need to make sure that every child is fairly funded, whichever county they are in. So we need to look again at the school block and exactly how that is calculated. We also need to look at how the local authority distributes it. If we look at the proposed new formula, it gives some strange results. The small rural schools do better, as do the large schools, but the ones in the middle lose out. There is something strange about a formula that comes up with such results.

We also need to look again at the high needs block, because the mental health challenges—not just in our county, but across the country—are growing exponentially. As my right hon. Friend the Member for Exeter (Mr Bradshaw) has explained, there is no counterbalancing increase in the social care budget to meet the need, so we are really challenged. In my constituency, 17% of the cohort are in the high needs group. That is a very high number, so the high needs block needs to be carefully thought through.

Some things need to be addressed now, and we cannot wait for the new funding formula. My headteachers tell me that, come April this year, if nothing changes in the cost base that they face, they have got to the point where they will have to make teachers and teaching assistants redundant. They will also have to do away with any form of counsellor support for some of the children who have mental health or family issues, and that gives rise to a real concern not only about finance, but about the basics of safeguarding.

So how can the Minister help us here today? First, he should abolish with immediate effect through a statutory instrument the application of the apprenticeship levy to schools. It is utter madness that a public body such as a maintained school, whose wages are paid through the local authority, hits the employment legislation’s minimum level. As a consequence, the council, because it pays the wages, has to pay the apprenticeship levy, which it then passes down to the school. As has already been mentioned, that is now just short of £500,000. Spread between the schools, that is a huge problem and a challenge that could be easily resolved. The Minister should think about that. The concept of the apprenticeship levy was about commercial businesses and trying to ensure they invested properly in apprentices. Teachers are not apprentices. There could be apprentices in the administration area, but, given the pressure on schools, is that really where we want schools to spend their money? It is like having a tax credit that cannot be spent, so the levy has to be scrapped. It deserves urgent attention because the crunch point is soon: April 2017, which is not many days and weeks away.

Secondly, I want the Minister to look at the special education needs extension to those aged 25. It is right that those with special education needs should be given all the support that they need. Because of the peculiarity of the way in which the system works, an individual parent whose child is entitled can nominate the school to which they will go. The school, even if it goes above the published admission number, has to provide the support that is needed, which is extremely expensive and difficult for schools to meet, so there needs to be a way of supporting schools that are faced with that.

Although the local authority makes some provision, it is not adequate and does not work. So will the Minister look at whether the local authority should dig not just into the education pot but into the healthcare pot when trying to fund some of the new costs hitting schools that are effectively having to become social care workers at the same time?

My right hon. Friend the Member for East Devon referred to the removal this year of the education services grant. We should all try to live within our means, but that removal is a straight cut. It is not as if the schools are suddenly finding another way. They cannot raise business rates. Where will they find the extra money to provide those services? They can of course work together, and work differently, but a complete cut is not a viable way forward.

The coalition Government could be praised for introducing the troubled families programme, through which local authorities could help families identified with multiple social and educational problems. Under this watch, that funding now only comes into play when a child is over 11 years old. I wish I did not have to say this, but in my constituency we have to make extreme interventions for a large number of children—in some schools, up to 85%. Children coming to school today are often not toilet-trained; many of them have real challenges with some basic reading skills. In part, that is a result of changes in our society. The Minister cannot change society, and we cannot change the fact that children are glued to iPads instead of conversing with their parents and their peers, but we need to recognise the consequences, budget accordingly and ensure support is there for those troubled families.

I urge the Minister to look at the issues now. We cannot wait until the new funding review. This is crucial; it is about our children today, our children tomorrow and our country tomorrow. I urge him to consider the issues now.

It is a pleasure to serve under your chairmanship, Mr Hanson. I, too, congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on securing this important debate. While I am doing thank yous, I want to say a personal thank you to the Minister, who just a few weeks ago accepted my invitation to come to North Devon to meet in a roundtable setting with a delegation of headteachers representing pretty much every education sector in Devon. The Minister came, I know that he listened and I am grateful that he did so.

Let us continue this positive start. I welcome the Government’s commitment to the new national funding formula and the principle that we must eradicate the unfairness of the current system. Good; that is a tick. The Government’s additional funding of £390 million to the least funded authorities in 2015-16 made a real difference, with an increase in funding per pupil in Devon of just over 4.5%. Good; that is another gold star for the Government. As I am sure the Minister will be pointing out, under the indicative figures for the new funding formula, more schools will gain funding than lose it in my constituency of North Devon—so it seems like we are getting gold marks all round for homework at the moment. However, I am afraid I have to move gently to a position where we are potentially putting the Minister in detention.

The Government are moving in the right direction—that is true—but under the indicative figures very little will be done to correct the fundamental, historical unfairness of funding in Devon, especially in my constituency of North Devon. That inherent and historical underfunding has existed for many decades, under Governments of all colours, and it needs to be put right. I thought that the national funding formula would put it right. From what I have seen of the indicative figures, I am disappointed.

As right hon. and hon. Members have said, Devon is a very poorly funded local education authority. Under the current system, funding is £290 less per pupil than the average across England, which means that North Devon schools receive just under £4 million less per year than the national average. If the proposed national funding formula changes were brought in, the cumulative change to North Devon schools funding—these figures are provided by the House of Commons Library, which is a neutral and always accepted source of facts, as everyone here knows but I note for those outside of this place—would be between 0%, no change at all, and a 1% increase across the board. Crunching the figures, that means that, at best, across all its schools, North Devon would receive an extra £40,000. Clearly, that does not rectify the imbalance and historical unfairness in the current system. North Devon would continue to receive an unfair level of funding. The principle of a national funding formula is sound only if it rectifies the imbalance that sees my constituents and those of other hon. Members here lose out. What is currently on the table does not do that for Devon, and certainly not for North Devon.

Not only does the proposed formula fail to correct the unfairness between Devon and the rest of the country, but it throws up some perverse variations between schools within North Devon. There are 52 schools across all sectors and all age ranges in my constituency. I have visited a great many of them in my 18 months as Member of Parliament for North Devon, and it is a pleasure to do so. They are fantastic schools doing tremendous work, with teaching staff and managers working really hard to get some excellent results. Six of those schools are secondary schools.

If we put those 52 schools in a league table ranked in order of the percentage change to their funding next year compared with this year, something rather worrying happens. The three schools at the bottom of that league table, which lose the most under the proposals, are the three secondary schools with the most rural catchment areas in my constituency: Chulmleigh, South Molton and Braunton. I feel sure that that was not the intention when the formula started to be cooked. It needs to be recooked, because that is the result under the indicative figures, and that cannot be right. These are schools where the teaching staff, managers, pupils and parents are already struggling because of the historical unfairness. I had hoped that the national funding formula would do something to correct that, but on the indicative figures at present, it does not.

I have been written to by the headteachers of many schools across Devon and they are all saying the same thing: “We don’t get it. We don’t understand why this historical unfairness is being allowed to continue.” Most make the extremely reasonable point that the national funding formula is a fine idea in principle and congratulate this Minister and this Government on the principle of wanting to correct the historical unfairness, but the devil is in the detail and I am afraid that the detail my headteachers see does nothing to address the historical problems.

I want to draw out two specific points that headteachers have raised with me. The first is high needs educational funding in Devon. High needs expenditure has grown rapidly, from £53 million in 2014 to an estimated £61 million in 2017-18. To meet the forecast overspend, Devon County Council has been forced to approve transferring more than £2 million from individual schools budgets to the high needs budget in 2017-18, just to bring the expected deficit down to zero. Someone else used the phrase, “We are robbing Peter to pay Paul.” That cannot be right.

The second issue, which has been raised by a number of my colleagues, is the personalised transport budget in Devon. In a largely rural, sparsely populated area such as the one I represent, that is a real challenge. The personalised transport budget for children with special needs accounts for 34%—more than a third—of the total schools transport budget in Devon. That is £21 million, and an overspend of more than £1.2 million on that budget is forecast for this year. The cost of transport cannot be taken from the high needs budget. It must be funded from county council budgets, and we all know that local authority budgets also face challenges. Those are two areas that I believe we need to look at.

Let us look again at the overall position. Devon is one of the lowest-funded local authority areas in England for education. In 2016-17, Department for Education funding per pupil in Devon is £4,346. That is £290 per pupil less than the English average, which means that DFE spending on education in Devon is more than £25 million a year less than the English average. I am afraid that the proposed indicative figures do nothing to correct that fundamental unfairness. As I am sure the Minister will tell us, this is a consultation and those are only indicative figures. I say, good, because we need to change what is being proposed. Like my right hon. Friend the Member for East Devon, I am sure that it is a real, genuine consultation and that the Minister and the Government are listening. It seems to me, to the people who run, teach in and manage the schools in my constituency, and to the parents whose children go to those schools that the current proposals are unfair.

I wish I could be more elegant in my language. I wish I had a more sophisticated argument and could indulge in some fine Churchillian parliamentary oratory, but I cannot. It comes down to three words: this is just not fair. Devon was hoping for a fairer slice of the funding cake. Instead, it seems to the schools community that we have received only a few crumbs. I say gently and helpfully to the Minister—-please get on the hotline to Mary Berry and rebake this cake.

It is a pleasure and a delight to serve under your chairmanship, Mr Hanson. I congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on securing this debate. I am delighted that he was my mentor when I got elected to this place, and my hon. Friend the Member for South West Devon (Mr Streeter) was also brilliantly good at looking after me and keeping me on the right track.

I enter this debate with a certain amount of trepidation, because my constituency has done rather well out of this process, but there are some issues that I want to raise. Let me set out the context. I am one of the very few Members of Parliament on the Conservative Benches who represents a totally inner-city seat outside London. I have only one rather muddy field, called the Ponderosa pony sanctuary, in my constituency, and everything else is very much inner city.

I declare an interest: I am a governor of St Andrew’s Church of England Primary School, and in the 1980s and early 1990s I worked for a woman called Angela Rumbold, who was the Member of Parliament for Mitcham and Morden and a Minister at the Department for Education. She was very much responsible, with Kenneth Baker, for introducing the local curriculum, local management of schools and things like that. My constituency has high levels of deprivation. There is an 11 to 12-year life expectancy difference between the north-east of my constituency and the south-west. I am very concerned indeed about that. We must ensure that children who are at school in a low-wage and low-skills economy have a good education and can end up going on to university and other schools.

I am delighted that Government have provided greater education choice in my constituency. I have not only three grammar schools, which I will talk about in a second, but the creative arts school, which is doing incredibly well, and a university technical college. I thank my hon. Friend the Minister for his interest and for taking the time yesterday to have a conversation with me and some people from the UTC about some of the issues they face. Plymouth does not fall within Devon county’s remit. Therefore, I feel somewhat of a fraud. My right hon. Friend the Member for East Devon pointed out to me earlier that my constituency has done very well out of this. Therefore, I am very grateful.

We need to ensure that children are able to read, write and add up when they leave school. I do not think we talk enough about standards. I sit on school governing bodies, and I think we should spend more time talking about how we are going to help children to achieve, rather than reviewing policy. Indeed, I occasionally feel that, when I go to school governing meetings, we end up spending more time reviewing policy than people spend reviewing west end plays. I am always slightly concerned about that.

Schools in Plymouth are likely to receive a 3.9% increase, but there is an issue. I understand why the Government’s position has changed and why they are looking at deprivation, because it is an important issue. The majority of my schools have done quite well, although there are some up in Compton that have some concerns. The grammar schools have also written to me, because they do not fit into the deprivation issue, so they do not get as good a deal as possible. I am very grateful indeed to Dan Roberts, the headteacher of Devonport High School for Boys. He said that he recognises that public services need to shoulder their fair share of the burden of public debt, but he has real concerns that the latest proposals will cause serious damage to the one type of school that our current Prime Minister believes has the potential to transform education in our country. He said that this is not all children in Plymouth but

“If you happen to be an able child attending Devonport High School for Boys we are actually receiving a reduction of 2.9%.”

Other grammar schools have said that, too.

I would be grateful if the Minister were willing to meet me and some of the grammar schools to talk about how we could ensure that they can make savings and so that he can hear the case from the grammar schools, too. I think that the Government are on the right lines in talking about deprivation, but then I would because I represent a totally inner-city seat with high levels of deprivation. However, there are some issues that most certainly need to be looked at and tweaked. I very much look forward to meeting him with my school governors from the grammar schools in the near future.

Before I call the Minister, I remind him that the right hon. Member for East Devon (Sir Hugo Swire) should have a couple of minutes to speak at the end of the debate.

It is a pleasure to serve under your chairmanship, Mr Hanson, and to follow the hon. Member for Wythenshawe and Sale East (Mike Kane). The hon. Gentleman, as a Labour shadow spokesman, defended his party’s legacy, but since this Government came to power, 1.8 million more children than in 2010 are in schools graded by Ofsted as good and outstanding—1.8 million more children receiving a higher standard of education. This year 147,000 more six-year-olds are reading more effectively as a consequence of the reforms implemented since 2010.

I also congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on securing his important debate. I am sure he agrees that we share the same ambition to see a country that works for everyone, where all children receive an excellent education that unlocks talent and creates opportunity, regardless of where they live, their background, ability or needs.

My hon. Friend the Member for North Devon (Peter Heaton-Jones) referred to the funding levels for schools in his constituency. He is assiduous in visiting the schools in his constituency, as I saw at first hand when I joined him on one of those visits. We had a roundtable discussion with a number of his local headteachers. Overall, his schools will receive an increase of 0.7% in funding as a result of the national funding formula. As I said at that meeting, however, we are paying close attention to the responses to the first-stage consultation and to the second-stage consultation on the detailed proposals. The latter consultation closes on 27 March.

The Government are prioritising spending on education. We have protected the core schools budget in real terms so that as pupils numbers increase, so will the amount of money for schools. That means that schools are receiving more funding than ever before, totalling more than £40 billion. The existing funding system, however, prevents us from getting that record amount of money to where it is needed most. Underfunded schools do not have access to the same opportunities to do the best for their pupils, and it is harder for them to attract the best teachers and afford the right support. That is why we are reforming the funding system by introducing a national funding formula for both mainstream schools and high-need support for children with special educational needs. That will be the biggest change to school and high-needs funding for well over a decade, and means that we will for the first time have a clear, simple and transparent system that matches funding to pupils’ needs and the schools that they attend. This is a once-in-a-generation opportunity to introduce a national funding formula.

The right hon. Member for Exeter (Mr Bradshaw) is right that introducing a national funding formula when we are still tackling the historic budget deficit that we inherited from his Government is challenging. We have protected core school spending in real terms, but I accept that there are cost pressures on schools. We believe that it is nevertheless important to use this one-time-only opportunity to introduce a fairer funding system.

In the current system, similar schools and local areas receive very different levels of funding, with little or no justification. For example, a primary-age pupil who is eligible for free school meals attracts an extra £1,378 for their school if they live in Devon but an extra £2,642—£1,264 more—if they live in Brighton and Hove. Those anomalies will end once we have a national funding formula in place. Introducing fair funding was a key manifesto commitment for this Government, and it will mean that the same child with the same needs will attract the same funding regardless of where they live.

We launched the first stage of our consultation on reforming the schools and high-needs funding system in March last year. We set out the principles for reform and proposals for the overall design of the system. More than 6,000 people responded, and there was wide support for the proposals. Building on that support, we were able in December to proceed to the second stage of the consultation and set out detailed proposals for the design of both the schools and high-needs funding formulae. The consultation period will last until 22 March, and the issues raised in this debate and others are part and parcel of that process.

Under our proposals, money will be targeted towards pupils who face the greatest barriers. In particular, support will be boosted for children from the most deprived families and those who live in areas of deprivation but are not eligible for free school meals—those whose families are just about managing. We are putting more money towards supporting pupils in both primary and secondary schools who have fallen behind, to ensure that they, too, have the support they need to catch up.

Overall, 10,740 schools—54% of all schools—will gain funding, and the formula will allow them to see those gains quickly, with increases in per-pupil funding of up to 3% in 2018-19 and 2.5% in 2019-20. Some 72 local authority areas are due to gain high-needs funding, and they, too, will see that quickly, with gains of up to 3% in both those financial years. As well as providing for those increases, we have listened to those who highlighted the risks of major budget changes for schools during the first stage of our consultation and will include significant protections in both formulae. No school will face per-pupil reductions of more than 1.5% per year or 3% overall, and no local authority will lose high-needs funding.

My hon. Friend the Member for South West Devon (Mr Streeter) mentioned my visit to the outstanding Ivybridge Community College in his constituency. It was a pleasure to see such high academic standards being delivered in that school. He referred to a list. I do have such a list, which says that under the new national funding formula, schools funding in Devon as a whole will rise from £377.2 million in 2016-17 to £378.7 million—an increase of 0.4%. Some 213 schools in Devon—62% of all Devon schools—will gain funding. I recognise that the proposals would result in budget reductions for some schools in the constituencies of my right hon. Friend the Member for East Devon and other hon. Members, but I believe that the formula strikes the correct balance between the core funding that every child attracts and the extra funding that is targeted at those with additional needs—both children in areas of deprivation and schools that serve rural communities.

Our proposed protections will mean that schools in Devon that do not gain funding can manage these significant reforms while continuing to raise standards. All schools need to make the best use of the resources they have and ensure that every pound is used effectively to improve standards. To help schools, we have put in place and continue to develop a comprehensive package of support to enable them to make efficiency savings and manage cost pressures while continuing to improve the quality of education for their pupils.

Although Devon will not receive any additional high-needs funding as a result of the new formulae, I hope that my hon. Friends understand that the funding floor will allow underfunded local authorities to gain funding and go a long way to protect the local authorities that spend the most, in recognition of the fact that their spending levels are the result of decisions on placements taken in consultation with parents. We are also providing £23 million of additional funding this year to support all local authorities to undertake strategic reviews of their high-needs provision.

As a member of the f40, Devon has played a significant role in campaigning for fair schools funding, as have my right hon. and hon. Friends. The Government’s proposed formula is based on our assessment of needs across the whole country; it is not designed around the interests of any one area or group in isolation. None the less, and reflecting the underfunding that several f40 members have suffered for many years, most of the areas represented by the f40, including Devon, will gain: overall, funding for their schools will increase by £210 million. I understand that some f40 members are disappointed with the formula’s effect on their area. Funding reform is always difficult—many competing demands have to be balanced—and it is particularly difficult in an area as complex as education. That is why we are holding such a long consultation to gather views.

I am aware of the concern that my hon. Friends and others have raised that fairer funding for schools in Devon and other parts of the country is overdue. We agree that these reforms are vital, but they are an historic change, which is why we have taken time to consider the options and implications carefully. The new system will be in place from April 2018, but in the meantime we have confirmed funding for 2017-18 so that local authorities and schools have the information and certainty that they need to plan their budgets for the coming year.

Will the Minister give way?

I will give way in one moment. I was just coming to my hon. Friend’s point about funding levels in 2017-18, the year before the new national funding formula comes into effect. We have confirmed that no area will see a reduction in their schools or high-needs funding in 2017-18, and areas such as Devon that benefited from the £390 million that we added to the schools budget in the last Parliament will have that extra funding protected in their baseline in 2017-18, as they did in 2016-17.

That is helpful, but it does not address the cost issue that I raised. For any institution, what comes in and what goes out need to balance. I respectfully ask the Minister whether he will undertake to consult his fellow Ministers in the Department for Communities and Local Government and the Department for Business, Energy and Industrial Strategy about these costs and how they fall on schools—particularly the apprenticeship levy. Clearly, it is not for him to slash that on a whim, but it is incumbent on him to discuss it.

We recognise that schools face cost pressures, including salary increases, the introduction of the national living wage, increases to employers’ national insurance and pension scheme contributions, and general inflation, as well as the introduction of the apprenticeship levy. The current, unfair funding system makes those pressures harder to manage. The new national funding formula will not only direct funding where it is most needed but give schools greater certainty about funding and allow them to plan ahead effectively. The Government are also providing a wide range of tools and other support to schools to improve their efficiency, and we will soon launch a school buying strategy to support schools to save more than £1 billion a year by 2019 on non-staff expenditure.

I appreciate what my hon. Friend says; in addition to those pressures, schools will pay the apprenticeship levy. The apprenticeship levy has real benefits for schools. It will support them to train and develop new and existing staff. It is an integral part of the Government’s wider plans to improve productivity and to provide opportunities for people of all backgrounds and all ages to enter the workplace. That is why we encourage all schools to employ or designate apprenticeships, whether or not they pay the apprenticeship levy.

Does the Minister recognise that—as I understand it—there is no such thing as an apprentice teacher? Does he agree that the most important thing to spend money on, for any school facing the pressures they are facing, is teachers, not administrative staff?

There is an employers’ group that is preparing and working on the introduction of a graduate-entry apprenticeship scheme for teachers, so there will be opportunities for schools to use that funding and indeed spend more than the money from the apprenticeship levy on training teachers and also support staff and other technical staff that help schools operate.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) described his constituency as in part inner city, where there are significant areas of deprivation. The Government are seeking to tackle that, not least through improving education. Social mobility lies at the core of the Government’s objectives, and that is one reason why schools in his constituency are seeing an overall increase of some 4.4% in funding, which he was magnanimous enough to acknowledge.

We are using a broad definition of disadvantage to target additional funding to the schools most likely to use it, comprising pupil and area-level deprivation data, prior attainment data and English as an additional language data. No individual measure is enough on its own; each addresses different challenges that schools face. When a child qualifies under more than one of those factors, the school receives funding for each qualifying factor. For example, if a child comes from a more disadvantaged household and they live in an area of socioeconomic deprivation, their school will attract funding through both the free school meals factor and the area-level deprivation factor. That helps us to target funding most accurately to the schools that face the most acute challenges.

The Minister has said that this is a genuine consultation exercise, but I am not hearing too much in terms of a willingness to amend the national funding formula. I understand that that will be tricky, but will he confirm that if a sufficiently strong case is made he is prepared to look again and that changes might be made?

I am seeking to explain the reasoning behind why we place such emphasis on deprivation and low prior attainment—that is something that will affect the grammar schools in the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport—and why we place such emphasis on helping children with English as an additional language. This is a Government driven to improve social mobility.

This is a genuine consultation. I have set out the explanation as to why we produced the formula for consultation that we did. We are listening to the responses—we will be going through and reading the written responses and we will listen to debates such as this one in the consultation process—and where we can make changes that address unfairnesses revealed through that process of course we will make changes to the approach we are taking. The decisions we are taking are driven principally by social mobility and ensuring that children from the most deprived parts of our country are properly funded at their schools to ensure that they make progress and fulfil their potential.

I acknowledge the concerns about the schools block ring fence and the level of flexibility between schools and high needs raised in the debate, given that Devon has in the past moved funding from the schools block to the high-needs block to support its high-needs pressures. We recognise that some continuing flexibility between the schools and high-needs blocks will be important in ensuring that the funding system is responsive to changes in the balance of mainstream and specialist provision.

I thank my right hon. Friend the Member for East Devon for the important work he and the WESC Foundation do for children and young people with visual impairment. The reforms of high-needs funding and the additional funding we are providing this year and next year support the most vulnerable children in the country who are supported by high-needs funding.

In order to give my right hon. Friend time to respond, I will conclude. I am enormously grateful to him for raising this issue and to other hon. Friends and right hon. and hon. Members for airing their concerns and issues about funding of schools. I hope that my right hon. and hon. Friends are reassured that the Government are committed to reforming school funding and delivering a fair funding system for children in Devon and throughout the country.

May I thank the Minister very much for his response? Will he be willing to meet the grammar schools in my constituency? Would he like to comment on why grammar schools did not feature in the speech made by the Opposition spokesman?

I will be delighted to meet the grammar school headteachers from his constituency either in the constituency or at the Department. To be fair to the hon. Member for Wythenshawe and Sale East (Mike Kane), this debate is about funding, but we as a Government want to create more good school places, whether those are more good grammar school places or more good school places in non-selective schools, helped by the independent sector and universities, and by having more faith schools. We want more good school places, and that is what drives our continuing education reforms.

I hope that hon. Members will be reassured about the Government’s commitment to reforming school funding. It is a system where funding reflects the real level of need and where every pupil has the same opportunities.

Will the Minister give way?

If my hon. Friend will forgive me, I would like to give time for my right hon. Friend to respond.

A fair national funding formula for schools and high needs underpins our ambition for social mobility and social justice. It will mean that every pupil is supported to achieve to the best of their potential, wherever they are in the country. I hope that while recognising the challenges that lie ahead, my hon. Friends will give their support to working with us to achieve that vital aim.

The first thing on which we can all be agreed is that we are delighted to see the Minister back in his job. At one point he had an enforced holiday from the Front Bench; his proper place is on the Front Bench, doing what he is doing for education. It may not seem like it, but he can be assured that he is largely among friends this morning.

The Opposition spokesman referred back to the halcyon days of the Governments of Mr Blair and Mr Brown. I gently point out to him—he was not in the House at that time—that Devon certainly did not prosper in terms of schools funding in those days. He talked about how a Labour Government stopped water coming through the roof. Unfortunately, they did not stop the economy going through the floor. We are picking up the pieces, and, as I said at the beginning, we must be realistic as to what we can afford, given the appalling legacy we inherited.

I think the debate has been constructive, thoughtful and indeed insightful. I agree with the Minister that we all have the same eventual aim. This is an extraordinarily challenging time for the United Kingdom, given the great educational achievements of Asia, for instance, especially in mathematics and science. If we are to turn out a generation of British people who can compete in a highly competitive world, we will have to do that better. That is informing the Government’s thinking, but we must ensure that that is fair as well as ambitious.

I say to my hon. Friend the Minister that west country Members of Parliament have a history of being fairly independent-minded, and I think he will have learned from this morning that that tradition continues. Indeed, there are those of us who will be looking carefully at the Government’s proposals to see whether we can back them in terms of representing the best interests of our teachers and constituents.

This is one of the rare occasions in Parliament on which we want to hear more of the C-word—that is, of course, consultation. If the consultation is genuine, the Minister would do well to meet the Devon Association of Primary Headteachers—we would like him to come to Devon, or we can bring them all here—to hear at first hand how the changes will affect us in the county of Devon. With that in mind, I will end a few seconds early to give the Minister extra time to go back to his Department, consult his officials and come up with a deal that is fairer for the people of Devon.

We have about 30 seconds until the next debate and I hope that the Minister for that debate will arrive shortly. May I say it has been a pleasure to listen to the debate? As a former resident of Plymouth and an employee of Plymouth and South Devon Co-op many years ago, I found it interesting to hear the debate.

Question put and agreed to.

Resolved,

That this House has considered education funding in Devon.