§ Mr. Patrick McLoughlin (West Derbyshire)
I am grateful for the opportunity to raise the issue of grant-maintained schools, and I also wish to talk widely about funding. There is no doubt that the Government's reforms have given parents better choice and information about their children's education while raising standards significantly. Since 1979, spending per pupil has risen by 50 per cent. over inflation. We have also given schools the opportunity to become grant-maintained, which provides a form of choice within the state system.
There are three secondary schools in my constituency which have become grant-maintained—Belper, with approximately 1,000 pupils; Ecclesbourne, with approximately 1,300 pupils; and Lady Manners school at Bakewell, which has more than 1,400 pupils.
The head of Belper said that the school had benefited from enhanced funding becausealthough we are linked to the Derbyshire formula the element of central costs can be spent specifically to meet our own needs. Independence enables us to manage our finances far more effectively because we have full control.The head of Ecclesbourne said that the last four yearshave been the most professionally fulfilling of nearly two decades of headship. Not only have we been able to put right most of the physical deficiencies of the School's site and buildings, we have been able to assign a much higher proportion of what was our share of the resources allocated to Derbyshire for education to the business of teaching and learning.The head of Lady Manners said:
Independence, control of policies or developments and the direction of resources to achieve these priorities for the benefit of student counts among the major gains of GM status. So too the renewed enthusiasm of Governors and staff which flows from being able to plan with a realistic hope of delivery. Staff morale is greatly strengthened reflecting improved working conditions, extra ancillary support, more teachers …, hefty increase in spending on books and equipment and a major programme of redecoration".Those are some of the genuine changes that the grant-maintained system has brought to state education, and I welcome them. However, I must acknowledge that not all schools wish to go down the route of becoming grant-maintained. That is something that I respect, although schools that have become grant-maintained have found enhanced freedoms.
I would like to bring to my hon. Friend the Minister's attention one of the problems for grant-maintained schools, which is the way in which the budgets for grant-maintained schools are set. I would like the Government to embark on a national funding formula for all schools—whether grant-maintained or not. At the moment, there are great variations as to what money is made available by LEAs to go into schools.
For example, in Hertfordshire the delegation is 91.3 per cent, while the delegation in Derbyshire is 85 per cent.
§ Mr. Harry Barnes (Derbyshire, North-East)
Will the hon. Gentleman give way?
§ Mr. McLoughlin
I shall not give way. If the hon. Gentleman wants to be an apologist for Derbyshire county council, he can apply for his own debate. There are problems in my constituency which are related to the fact that Derbyshire county council is holding back far too much finance.
179 Derbyshire's overall schools budget represents spending of about £2,280 pounds per pupil—higher than 12 other counties—while the potential school budget represents £1,840 per pupil, which is higher only than Dorset, Gloucestershire and Staffordshire. The actual amount delegated to schools in Derbyshire is £1,560 per pupil—the second lowest of any county after Gloucestershire. The hold-back in Derbyshire amounts to some £720 per pupil which is spent by the LEA.
§ Dame Elaine Kellett-Bowman (Lancaster)
My local council is about as bad as Derbyshire. For village schools, however, it is not only a question of funding. My county council has repeatedly attempted to close village schools, and was prevented from doing so only by my hon. Friend the Member for Dartford (Mr. Dunn). The county council is rumoured to be about to attempt again to close village schools. If those schools were to become grant-maintained, they would not only get better funding but be safe. Once a school has become grant-maintained, a county council cannot close it—even if it wishes to do so.
§ Mr. McLoughlin
My hon. Friend might also find that schools that become grant-maintained become far more attractive to parents. The schools would find their numbers going up, which would improve their position.
There are so many different ways in which people look at finance for education. One of my beliefs is that we desperately need a national funding formula. Of the amount withheld from its potential schools budget, Staffordshire spends £2,975,000 on management, or 1 per cent., to manage some 160,000 pupils. In Derbyshire, the figure is £3,787,000, or 1.6 per cent., to manage some 128,000 pupils. That £1 million is spent by the LEA and is not available to go to schools.
My point—as I have said before—is that one cannot spend money twice. If one is spending more money on administration, that money is not available to go into schools in the county. We need a national understanding of the way in which education finance is worked out. The differences between the potential schools budget and the aggregate schools budget create confusion. That has allowed county councils to receive money for education without putting that money directly into schools.
Some £720 per pupil was spent by Derbyshire LEA in addition to the amount delegated to each school, compared with £570 in Nottinghamshire and £550 in Staffordshire. That is a difference of £150 per pupil, which makes a vast sum when we are talking about a primary school with 200 pupils—let alone what it amounts to in secondary schools. I urge my hon. Friend and the Government seriously to consider a national funding formula.
In 1994–95, the education standard spending assessment for Derbyshire rose by 2 per cent., but the county council cut it by 2 per cent. This year, the education SSA is to rise by 0.7 per cent., but schools are receiving cuts in their budgets. Cuts are coming at the sharp end, and the council has started to blame everyone but itself.
The power of local authority decisions to affect the funding of grant-maintained schools must be removed. The Minister and the Secretary of State have stated that local authorities have a right to set their own priorities, 180 but the interests of pupils in the grant-maintained sector are not among the priorities of local education authorities which have done everything they possibly can to stop schools becoming grant-maintained. More generally, protecting front-line services conflicts with a local authority's desire to protect its own powers of control and employees who want to carry out their instructions.
The current funding formula goes some way towards improving the position of GM schools. It protects them from changes in the local management of schools formula, which can be manipulated to their disadvantage. However, it is subject to the removal of the top slice, which the LEA can plan to increase, leaving a reduced amount for front-line services. The link with LEA spending decisions contributes to unacceptable delays in receiving funding information.
My hon. Friend the Minister knows that I have been pursuing with the Funding Agency for Schools the difference between the amounts originally promised to GM schools and the actual grants. One explanation given by the agency is the discrepancy between estimated pupil numbers provided by schools and those provided by LEAs. If the agency cannot even get agreement on pupil numbers, that matter must be seriously addressed.
A national funding formula is the only way to ensure long-term accountability for decisions on school incomes and major items of expenditure. In return, a school can be expected to account to parents for proper management of the funds that it receives and to accept its share of responsibility. National funding should be distributed in an equitable, predictable and simple manner dissociated from historical and current spending issues, and be transparent.
Experience shows that it is sometimes unwise to make major changes without a pilot scheme. The grant-maintained sector should, and could, be used for a pilot, and then the scheme ought to be made available to every school in the country. In that way, the Government can ensure that the money that they set aside for education gets to front-line services. I do not mind taking the blame for decisions when I have responsibility for them, but not when I do not have any responsibility. Local education authorities are ensuring that money that should go to front-line services is used in other ways.
We have never blinked or taken a backward step from radical approaches in education now endorsed by many hon. Members. Some of them have taken advantage of those changes—for example, by sending their children to schools that best meet their needs, even when that means crossing borders. Ten years ago, such choices were unknown, before the Bill for which my hon. Friend the Member for Dartford (Mr. Dunn) had much responsibility, jointly with other Ministers.
I do not want those excellent changes to be put at risk but want further changes to be made. I want the money designated for education to be used in schools, not in county halls. At the moment, there are too many ways in which funds can be diverted into the pet areas of chief education officers or education committee chairmen. The right way forward is a national funding formula for all schools. Until then, let us have a pilot scheme.
Perhaps my hon. Friend the Minister will consider also making a minor change. When a county becomes part of a common funding formula, why not announce that all primary and secondary schools in that county will be part of that formula? Let us do away with the differential 181 between primary and secondary schools. That would be a small start, but a small start in a major direction—and one of major significance to our state education system.
§ Mr. Bob Dunn (Dartford)
I thank my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) for allowing me to speak in this timely debate. He kindly mentioned my role in the enactment of the Education Reform Act 1988, which gave powers and opportunities to schools to opt out of local authority control if that was the wish of parents expressed in a ballot. I am delighted that, in my constituency, nine schools have become grant-maintained since 1988. Together with the city technology college, they offer choice and variety second to none in any other part of the United Kingdom.
Perhaps I may point out gently to the House and to the people of Dartford that the range of schools in north-west Kent exists not because of spontaneous combustion or divine intervention but because of the election and re-election of Conservative Governments since 1979. It is an indisputable fact that Labour would end that choice. Despite all the efforts of the spin doctors and soundbite merchants who currently dominate the Labour party, it would take away grant-maintained status, close grammar schools, CTCs and high schools and require all schools in Dartford to become comprehensives for 11 to 16–year-olds. Of that there is no doubt.
One message that came out of Blackpool over the last few days from the National Union of Teachers conference—apart from showing a trade union out of control—was that the union expected a Labour Government to return the 1,050 opted-out schools to local authority control, despite the wishes of parents, expressed in the democratic process, for those schools to opt out.
Gravesend grammar school for boys, in the constituency of my hon. Friend the Member for Gravesham (Mr. Arnold) but to which many parents in my constituency send their children, recently voted by a 70 per cent. majority to become grant-maintained. Parents from Hartley, Fawkham, Ash-cum-Ridley, Longfield, New Barn and Southfleet voted with others from Gravesend to that effect. Of significance was the success of that vote, despite the best endeavours of the county council, and the fact that the campaign was led, motivated and supported by the chairman of governors, Mr. Eric Hammond—who I suspect has more to do with Labour Members than with the Conservative party. That campaign was successful because parents had seen the value and benefit of grant-maintained status.
Sixty thousand children in Kent are currently educated in grant-maintained schools. A vote for Labour in the forthcoming local elections would be a vote to end that situation. It would be a vote against grammar schools, CTCs and high schools, and a vote against local freedom for local schools in the way that my hon. Friend the Member for West Derbyshire described.
Only the Conservative party, believing in Conservative policies, would ensure the continuation of the current position. I advise the people of Dartford to think carefully before they vote on 4 May. A vote for Labour is a vote to end range, variety and freedom of choice. The grant-maintained policy was one of the best that this Government have ever introduced. More and more schools and parents will see that as time goes on. I congratulate my hon. Friend on his speech.
§ The Parliamentary Under-Secretary of State for Schools (Mr. Robin Squire)
The House has been privileged to hear powerful and well-informed speeches from my hon. Friends the Members for West Derbyshire (Mr. McLoughlin) and for Dartford (Mr. Dunn), a former Education Minister who speaks with great authority on these matters. I confess that the subject of grant-maintained schools is one close to my heart, and it allowed my hon. Friends to refer to several other aspects of funding and related issues. In the time available, I shall seek to respond to the points made, particularly by my hon. Friend the Member for West Derbyshire.
Perhaps the obvious starting point on funding is to confirm that Derbyshire county council, like every other local authority, is responsible for setting its own budget and deciding its own priorities between and within services. It is the council that has the final say on how much is spent on education and how much on other services. As we are all aware, there are wide variations between and within authorities, because local management of schools schemes devote additional funding to schools with high levels of need.
It is important to put on record yet again the fact that the Government and Ministers are not seeking to pass the buck. Our role is clear in funding local authority services. We set the overall framework for the funding of local authority services nationally. We determine the way in which national standard spending totals are distributed between local authorities through the standard spending assessment system.
My hon. Friend may be interested to know that, over the past five years, Derbyshire's SSA has increased by over 23 per cent., which has been well above the rate of inflation. As he knows, the SSA is scheduled to increase during the current year, 1995–96. The capping rules allow Derbyshire to spend more than the council did in 1994–95. In total, Derbyshire is able to spend about £550 million on all its services. That is a significant sum.
My hon. Friend drew attention to some funding per pupil comparisons with other authorities. He mentioned Hertfordshire and Staffordshire. I shall not bedevil the debate with a mass of statistics, but it is important that I take up a couple of central issues, not least because I know from the correspondence that the Department receives that there is some misunderstanding when it comes to funding per pupil comparisons.
The SSA system does not set out to allow the same level of spending for each pupil. Indeed, it should not do so. The aim is to provide for funding for a common standard of service throughout the country, taking account of the fact that the costs of providing education inevitably vary from local education authority to local education authority. Need varies from one council to another and so, therefore, does poundage for pupil as implied in each authority's SSA.
The SSAs reflect the additional costs of educating children in sparsely populated areas, for example. They take account of socio-economic disadvantage, high proportions of non-English-speaking children and higher labour and other costs through what is known in the trade as the area cost adjustment. As my hon. Friend knows, the ACA is fairly controversial. Very few local authorities, whether they are recipients of the ACA or non-recipients, agree on its calculation. However, no local authority 183 association questions the need for some way of recovering the inevitably higher costs that councils in the south-east face in running their schools. These considerations are not limited purely to teachers' salaries. They read across into other expenditure areas and other employment areas within schools.
We are interested in considering whether the present methodology could be improved, and we shall consider carefully the different representations that we have received on the issue. In doing that, however, we must take account of all the factors—I have listed only a few—that cause education costs to vary throughout the country.
My hon. Friend spoke with great feeling about the share of budget retained by the Derbyshire LEA.
§ Dame Elaine Kellett-Bowman
§ Mr. Squire
As echoed by my hon. Friend.
As both my hon. Friends are aware, the level of resources retained by LEAs has to be a matter for them to determine, subject only to a minimum requirement that they must delegate 85 per cent. of the potential schools budget to schools.
In 1994–95, Derbyshire just managed to achieve the minimum requirement. Despite an intervention from a sedentary position that I heard earlier, I must say that the matter has not yet formally been advised to my Department. I understand that preliminary signs for the current year, 1995–96, are that Derbyshire will be in the middle of the range when it comes to examining the amounts that authorities hold back.
It is important that we should encourage delegation, but not for delegation's sake alone, which would be foolish. It is important that the scheme should command the support of schools within an LEA. It is clear, however, from our experience of grant-maintained schools, to which my hon. Friend the Member for West Derbyshire made correct and proper reference, that the more that schools control their own budgets, the better value for money they get, to the benefit of the pupils in their care.
§ Mr. McLoughlin
Does my hon. Friend accept that there is a difference between the potential schools budget and the allocation of 85 per cent. and the general schools budget? If we consider delegation over the two budgets, we see that the figure is substantially lower than 85 per cent.
§ Mr. Squire
There is a difference between the two budgets, from which I was endeavouring to protect the House. In terms of the potential schools budget, 85 per cent. is covered by regulation. I readily confirm that there are at least two separate figures involved.
My hon. Friend mentioned the possibility of a national funding formula. Here we are in extremely interesting waters. I need no persuading that there are attractions in principle in a national uniform system that is simple to understand, more manageable to operate and demonstrably fair and transparent. As I am sure other 184 Ministers have said in other contexts, however, it is not quite as simple as that. There are several strategic questions.
My hon. Friend made it clear that he would apply a national funding formula to GM schools and non-GM schools. He will understand immediately that that is not necessarily the outcome of such a formula. If it were to apply only to GM schools, what would be the position of LEA schools? My hon. Friend recognises that that question would arise. If a national funding formula covered all schools, what would we do about local discretion, which presently allows local authorities to spend more or less of their education SSA on a school as they deem fit? Where in all this would SSAs fit in?
In terms of principle, the local management of schools and the common funding formula have already demonstrated the tensions that can be created between self-evident ideals. How do we reconcile the simplicity argument with meeting a wide range of needs? I say with certainty as someone who has wrestled—I hope advantageously—with the common funding formula over the past year or two that there is a difficult trade-off between simplicity and meeting the needs of schools. I am sure that all hon. Members would wish to see schools with higher expenditure finding relief within the funding system.
The issue is topical and my right hon. Friend the Secretary of State is sympathetic in principle. However, I urge my hon. Friend and other supporters of a national funding formula to allow us to proceed carefully. The worst option of all would be to produce an entirely new formula that contained within it, because of the speed with which it had been created, the seeds of great and significant problems. I hope that I have persuaded my hon. Friend on that issue and that he accepts that we are open to persuasion.
The central factor, to which all my hon. Friends have referred, is the glowing success of the GM movement and self-governing in schools in general.
§ Dame Elaine Kellett-Bowman
Will my hon. Friend confirm that, once a school has become grant-maintained, the county cannot close it?
§ Mr. Squire
I confirm that the county cannot close it. All school closures, by definition, come before my right hon. Friend the Secretary of State. Although a county can comment on the position of a grant-maintained school, it does not have the power to close it. I give my hon. Friend that assurance.
By controlling their budgets, as hon. Members have said, grant-maintained schools control their own destiny. We have heard all the advantages, but I shall not repeat them, because time does not allow me to do so. I do not wish to suggest that grant-maintained status is the only precondition of success, as there are good schools that are not grant-maintained, but there is a disproportionate number of successful schools in the grant-maintained sector. That is striking. It is the freedom that grant-maintained schools enjoy, to release energy, enterprise and commitment, that allows schools to realise success throughout the country, and many found that impossible under local authority control.