HC Deb 04 April 1989 vol 150 cc4-5
Mr. Anthony Coombs

To ask the Secretary of State for Education and Science what representations he has received on the average cost method of allocating resources to schools under the local financial management provisions of the Education Reform Act.

The Minister of State, Department of Education and Science (Mrs. Angela Rumbold)

My right hon. Friend has received some correspondence from authorities and schools expressing concern about the requirement for schemes of local management to provide for average costs, including average salary costs, to be reflected in the formula for distributing resources between schools. Circular 7/88 allows LEAs to devise formulae which safeguard the position of small schools which might otherwise find it difficult to accommodate actual salary costs. I understand that the majority of authorities are satisfied that this flexibility provides a certain measure of protection.

Mr. Coombs

Will my right hon. Friend confirm that in the consultation processes in schools there is a tremendous and almost universal acceptance of the opportunities put forward by local financial management? Will she also agree, however, that there is some concern at the interaction between the provisions of the school pay and conditions document and the average cost per capita methods of funding different schools, which may in some cases lead to differences of £40,000 between similar schools? Will she therefore consider giving the opportunity of flexibility to certain LEAs in order to be able to vire funds between those schools to avoid those kinds of anomalies?

Mrs. Rumbold

It is true that during the consultative period a large number of authorities agreed that local management of schools will be beneficial. Also, it is misleading at the present time to look simply at one of the cost elements in isolation when considering some of the formulas. It is essential for all authorities to consider the combined effect of all the elements in the formula and not simply the salary costs. On the final question, I do not want to anticipate the statutory approval process but, of course, it may well be possible that there would be some flexibility in individual, exceptional cases, where there are particular difficulties.

Mr. Jacques Arnold

Has my hon. Friend noted that a number of Kent schools have been running under local financial management for some time, two of them in Gravesham? Has she further noted that that is immensely popular with the local schools since it allows them to obtain greater value for the money provided and the ability to make cash purchases which has resulted in the quick delivery of books, and at a discount?

Mrs. Rumbold

I am delighted to hear of those experiences in Gravesham in my hon. Friend's constituency. During a recent visit to another authority a head teacher told me, of his own volition, that he had been very much against the idea of local management schemes, but after three years of operating he was entirely in favour of it because he had found so much to his benefit that he had not expected.

Mr. Frank Field

The Minister says that local education authorities are happy that they should determine the formula. Are small schools happy with that?

Mrs. Rumbold

As the hon. Gentleman will know, there is special provision for small schools with fewer than 10 teachers to have their provisions determined by the local education authority within the formula weighted in their favour. Therefore, there is provision within the formula for small schools.

4. Mr. Stern

To ask the Secretary of State for Education and Science if he plans to issue further advice to education authorities on the criteria to be used in dividing existing education budgets among the schools under their control for the purposes of local financial management.

Mrs. Rumbold

Circular 7/88 sets out the framework for local education authority schemes of local management. My right hon. Friend has no plans to issue further guidance. Officials of the Department's LMS unit are in touch with individual local education authorities and are happy to advise on any particular points of concern which may arise during the preparation of a scheme.

Mr. Stern

I am grateful to my hon. Friend for that reply. Will she encourage local education authorities as much as possible to use all the flexibility that is available within the current guidelines and, where necessary, advise local authorities on an individual basis of the amount of flexibility that it is available to avoid unnecessary and unacceptable results in the funding of individual schools?

Mrs. Rumbold

Yes. I can reassure my hon. Friend that local authorities have the necessary flexibility to construct a formula for special circumstances—for example to weight resources in favour of individual schools in inner cities, those which serve disadvantaged areas, those which admit a higher than average proportion of pupils from ethnic minorities or those with special educational needs.

Mr. Spearing

Can the Minister confirm that local financial management includes responsibility for the repair and maintenance of buildings? If that is so, is that not rather arbitrary? Could it not put an unfair burden on some schools? What guarantee can the Minister give that her Department will provide local authorities with sufficient funds to ensure that schools are treated equitably in that matter?

Mrs. Rumbold

The local financial management schemes will include some money within the formula for general repairs and maintenance. Where such work can be shown to be capital expenditure, it will fall outside delegation within a local financial management scheme and it will be the local authority's responsibility to allocate resources.