§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
§ 10 pm
§ Mr. William Cash (Stafford)The issue of education is of critical importance to the future prospects of our children and to the quality of our national life for generations to come, both economically and culturally. It should not be used as a political football.
I have asked for the debate because we need to set the framework of a balanced analysis of the state of education in my constituency. Because it is a function of Staffordshire county council, the circumstances of my constituents are determined by the education policy decided by the Labour county council in the broader national education context.
There are many excellent teachers and schools in my constituency, and we must do all in our power to offer pupils the best education that can be provided, with the help of parents, teachers, head teachers and governors.
I do not disguise my concern, which I have made clear in the past, about the way in which standard spending assessments and area cost adjustments work to the disadvantage of some counties such as Staffordshire. The 1994 new earnings survey suggests that average overall' earnings in the south-east are 24 per cent. higher than they are in the west midlands. Within the south-east, earnings are higher still in Greater London, but, even excluding London, earnings in the rest of the south-east are 12 per cent. higher than in the west midlands.
One of the factors used in calculating the standard spending assessment is the area cost adjustment, which assumes that authorities have to match the rates of pay in competing occupations if they are to recruit and retain the staff whom they require. For example, the standard spending assessment for Surrey, whose population is about the same as that of Staffordshire, is increased by £60.7 million.
It seems reasonable to point out that there is a common pay spine for teachers throughout the country, and there is little competition between their employers and those in the general labour market. Similarly, people pay about the same in interest rates and mortgages, although houses generally are less expensive in the west midlands than in the south-east. I cannot suppose that food and other such items cost less in supermarkets and shops in the west midlands than in the country as a whole.
According to an independent analysis that I have received, details of unit cost expenditure in schools for 1992–93 suggest that teaching staff costs in Staffordshire are no lower than in the counties outside London that benefit from the area cost adjustment. It seems that the balance between counties such as Surrey and counties such as Staffordshire needs to be corrected.
There is also the question of the broad link between the public sector borrowing requirement and the SSAs. While we were suffering the worst effects of the exchange rate mechanism, to which I was so opposed, our PSBR rose to £50 billion. As the Government wish to reduce the PSBR, they also seek to limit public expenditure. Hence, control of public expenditure is mirrored in a tight settlement for local authorities. However, I was heartened 1078 to note that the Secretary of State for Education recently gave a strong hint that there will be extra money for schools in the November Budget, so things seem to be looking brighter.
Staffordshire county council recently gave us a final comparison for SSA per secondary pupil in 1994–95. That gave a figure of £2,679 for Surrey, including an additional area cost adjustment of 11.6 per cent., whereas the figure for Staffordshire was £2,398 per secondary pupil. Staffordshire has no area cost adjustment, and has a capping limit of only 0.11 per cent. above its SSA. It concluded that spending more than its SSA on education could be achieved only by spending less on other services—or, crucially, the council admits that it could spend more on education by using reserves and balances.
We are given to understand that in Staffordshire there are reserves of about £60 million. Those are uncapped, and it seems that they could be used for education. Why are the reserves so high, and why are they not used to prevent the prospective loss of teachers from the schools in my constituency?
The director of education recently wrote a letter saying that £7.5 million from the reserves would be used. Why is more not being used? He sent me a table showing the schools in my constituency which he says are likely to lose staff. Those include the loss of 1.9 teachers at St. Lawrence, Gnosall, 1.6 at Tillington Manor county school, 1.3 at Blessed William Howard and as many as 5.3 in Sir Graham Balfour. Those and other losses seem avoidable.
Staffordshire's education standard spending assessment for 1995–96 has been set at £348.79 million, which is 1.2 per cent. higher than the equivalent figure in 1994–95, in line with the national average increase. Under local management of schools, Staffordshire is obliged to delegate control of much of the money that it allocates for schools to the governing bodies of those schools. That is done under the general schools budget. In 1994–95, Staffordshire's GSB was the worst of any county. This is unacceptable.
We also find that we have the third lowest amount of money delegated to school level of any county, with an aggregated schools budget per pupil of £1,570, compared to £1,700 in Surrey. It seems that the county council is allocating too much for non-teaching matters. Is it possible that the county is putting money into reserves for transfer to Stoke-on-Trent when local government reorganisation takes place? Does it not still have a wholly disproportionate amount of money allocated to nursery school education in Stoke-on-Trent compared to the rest of the county put together?
Some years ago, I raised that matter with the district auditor, and I discovered that the differential is as much as 5:1, which he strongly criticised as unfair to parts of the county such as my constituency. I hope that taking Stoke out of the county, for which I have long campaigned and which is due to happen thanks to Government policy, will help to redress the unfairness that was revealed.
Even allowing for the problems posed by the SSA and the area cost adjustment, there can be no excuse for the deplorable results and pupil-teacher ratios in Staffordshire. In 1994, only 38.1 per cent. of 15–year-olds in Staffordshire obtained five or more GCSE grades A to C, compared with the national average of 43.3 per cent. 1079 The performance at A-level was also below the national average. We have the second worst pupil-teacher ratio of any county, which in January 1994 was 19.75.
In the latest survey of counties showing those who have left school with no results at all, Staffordshire ranked the fifth worst. For class sizes, Staffordshire is below average. Its primary schools have an average class size of 27.7 children, whereas in England as a whole it is 26.9. In secondary schools, the average is 22.1 children, whereas for the whole of England it is 21.4. Is it the case that the county pursues a policy of hardly ever, if at all, sacking bad teachers?
The Labour county council has much to answer for. It simply is not possible for it to explain all that away by reference to the SSA and area cost adjustment. The local government elections on 4 May may be elections for boroughs and districts, but it should be remembered that the county, the Labour county council, is responsible for 90 per cent. of the council tax bill which is demanded of our ratepayers and our voters.
The voters should not overlook that, especially as the excellent Conservative Stafford borough council is reducing its share of the amount that it calls on for the council tax, whereas the county, the Labour county council, is increasing its amount of precept by £17, and the education costs of the county are approximately 70. per cent. of its overall budget.
I am seeking meetings with the county education officers, parents, teachers and heads to address the crucial issues affecting my constituents and to try to work out a balanced and objective solution based on facts and analysis. I well remember that, in the run-up to the 1992 general election—my colleagues and other Conservative Members of Parliament in Staffordshire remember it extremely well too, because some of them received as many as 2,000 letters—Opposition parties created great fear throughout my constituency and elsewhere about school budgets and loss of teachers.
Yet, at the end of the financial year in question, the county had £10 million left over in its education budget. It cannot be allowed to do that again. It must use the money it has in reserves and otherwise to better effect. I await its response with interest, and that of the Minister.
What none of us wants, and what must not be allowed to occur, is a spate of unnecessary and damaging strikes. I appeal to all those in my constituency to look at the facts, weigh up the arguments and press the Labour county council to release more money from its reserves.
I shall continue to press the Government to revise the standard spending assessment, and I appeal to the teachers to repudiate strike action or similar activities that would damage education in my constituency.
§ The Parliamentary Under-Secretary of State for Schools (Mr. Robin Squire)My hon. Friend the Member for Stafford (Mr. Cash) has done a service to his constituents and to everyone living in Staffordshire in drawing the attention of the House to his concerns about education in the county. He was supported, albeit in the silent role befitting his senior Government Whip position, by our hon. Friend the Member for Staffordshire, 1080 South-East (Mr. Lightbown), although I could sense that my hon. Friend the Member for Stafford was drawing great strength from that strong, brooding, silent presence.
In particular, my hon. Friend the Member for Stafford did well towards the end of his speech to remind the House of the track record of Staffordshire some few years ago. In the words of one or more of my Home Office equivalent Ministers, it has "previous" in this respect, and it was wise of my hon. Friend to have put that on record.
My hon. Friend expressed concern about the level of resources made available by Government for education, so I make it clear from the start that, as far as education expenditure is concerned, Staffordshire county council, like every other local authority, is responsible for setting its own budget and deciding its priorities between, and within, services. The council has the final say on how much is spent on education and how much is spent elsewhere.
My hon. Friend said that Staffordshire has been forced to cut millions of pounds from its education budget in the current financial year. There is no reason why that should happen. The Government have provided for Staffordshire's education standard spending assessment to increase by 1.2 per cent. this year and, under the capping rules, it can spend 0.5 per cent. more in 1995–96 than in 1994–95. In total, Staffordshire is able to spend more than £582 million on all its services.
What does talk about cuts mean? The county council is not cutting what it is spending: it is drawing up a shopping list of additional spending and then cutting back on what it would ideally like to spend, if it could buy all the items on that list. Everyone in the public sector and in business faces the same problem, and the solution is to become more efficient. To say that there must be cover for all salary, price and volume changes is as inappropriate as to say that there is no scope for efficiency gains.
It is not unreasonable for Ministers to expect authorities to help fund education by becoming more efficient. Authorities continue to spend vast amounts of money on running their education departments. The recent Audit Commission report found scope for saving more than £500 million on the pay bill of local authorities' administrative and clerical staff. In addition, in a previous report, it found scope for saving more than £30 million by rationalising special schools. It is also not unreasonable for the Government to expect schools to use their balances or reserves, as my hon. Friend said, where appropriate, to help to offset the cost of providing education.
No information on individual school balances at the end of 1994–95 is yet available, but at the end of 1993–94, primary schools in Staffordshire had balances that amounted, in total, to 5.03 per cent. of their budget shares, while secondary schools had balances of 3.07 per cent. Although I accept that those are lower than the national averages in each case, in total they are still substantial amounts. Schools need to consider what they should sensibly hold as a result of planning, not simply by chance. They cannot easily complain that they were underfunded during that time.
If reserves are not available for particular schools, they need to pay special attention to their management of resources. They may, however, also wish to suggest to the authority that its local management of schools scheme might be amended for future years in order to change the distribution of funds.
1081 Authorities have scope for efficiency savings by seeking a better balance between supply and demand in school places. The level of surplus capacity across the country is still too high, and there is therefore still scope for authorities to remove surplus places. In Staffordshire's case, the authority reported more than 20,000 empty places in primary schools in January 1994. That is nearly one fifth of the total number of primary places in the authority. I accept that in Staffordshire, as in other authorities, not all of those places are removable. Some are needed for rising pupil numbers; to allow for parental preference; and to ensure that schools are accessible, particularly in rural areas.
Even allowing for those factors, however, the level of surplus in Staffordshire is projected to remain high. On that basis, we are discussing with the authority what scope there might be to reduce surplus capacity, and to do so in ways that could release funds to be spent on pupils and not on unnecessary buildings. I know that my hon. Friends who represent Staffordshire understand and accept that approach.
I know that Staffordshire schools, like schools in other areas, will be concerned about meeting the cost of the teachers' pay award. The Government accepted the teachers' award of 2.7 per cent. on the recommendation of the independent School Teachers' Review Body. The review body acknowledged the fact that financial provision had been set on the basis that pay increases should be offset, or more than offset, by efficiency gains and increased productivity. For instance, authorities that make savings on some services can spend more on others without infringing the capping criteria.
The Government have acknowledged that the current settlement is a tough one, but many authorities have been able to achieve an increase in their budgets—including all Conservative ones—which matches or outstrips the teachers' pay award. They have said that they are meeting the pay award in full.
It is worth making the point that, although a number of local authorities claim that they cannot afford the teachers' pay award, they reached a voluntary pay settlement of more than 2 per cent. for clerical and manual staff. Of course I acknowledge that the award will place local authority budgets under pressure. The House will recognise, however, that local authorities are large and financially complex organisations, and they have a variety of means to realise the efficiency gains that are needed.
The Government consider that teachers thoroughly deserve this increase, in recognition of the excellent work they carry out in raising standards in our schools. Governors, teachers and parents, as well as the Government, are entitled to look to local authorities to give priority to front-line services, such as schools. I hope that Staffordshire county council and all others will do so.
During the consultations on teachers' pay for this year, many people expressed anxiety about the level of funding for schools next year—1996–97. As my right hon. Friend the Secretary of State for Education has said, that is an issue that Ministers collectively will be considering in the next public expenditure round, leading up to decisions to be announced in November.
1082 It is, of course, not possible to predict the outcome, and inevitably there will be many competing claims. I can only repeat what my right hon. Friend said recently: she has listened carefully, and will take account of all the arguments and representations made to her about the funding of schools against the background of the Prime Minister's public assurance that education will continue to be at the top of our priorities as the economy delivers further growth.
My hon. Friend properly highlighted Staffordshire's SSA, and I would be failing in my duty if I did not refer to it. I am certainly aware that Staffordshire's SSA per pupil is lower than the national average. As my hon. Friend will be aware, the SSA system sets out to provide funding for a standard level of service nationwide, Simple comparisons with other LEAs—even the LEA of my birth, Surrey—are not appropriate, because the costs of providing a standard level of education throughout the country vary.
Some of the factors that need to be taken into account are the costs of educating children in sparsely populated districts, the costs of educating children in districts that are socially or economically disadvantaged, and the large labour costs in London and the south-east. It is inevitable, therefore, that not all authorities will have such large costs, or indeed special circumstances, as other LEAs. Therefore, the poundage per pupil varies from LEA to LEA.
My hon. Friend referred specifically to the area cost adjustment. Coincidentally, as I told the House last week in a debate of some similarity, that is perhaps the most controversial aspect of the SSA system, although it allocates only about 4 per cent. of the national total of education SSAs.
None of the local authority associations questions the need for an area cost adjustment; only the way that it works is at issue. It is intended not to favour, so to speak, specific authorities, but to compensate them for the necessary additional labour and other costs that they must meet in delivering a common standard of service. That means not only teachers' salary costs, but all staffing costs. In addition, the costs of rates are greater in the south-east and in London, and LEAs in those regions have even argued that there should also be an uplift for greater rental costs.
If it is any consolation to my hon. Friend and his constituents, as he will have gathered from that last comment, the area cost adjustment is as unpopular in London and the south-east on the ground that it delivers less than it should, as it is obviously unpopular in regions such as my hon. Friend's for the reverse reason.
My hon. Friend is also rightly worried that standards of education should be maintained and improved. There is no evidence that a small SSA per pupil affects the standard of education or the ability of an LEA to deliver that education. For example, in Stockport, which receives less per pupil in its SSA than Staffordshire, 48.6 per cent. of 15–year-olds gained five or more GCSEs at grades A to C—that is the 11th highest result nationally. Staffordshire, by comparison, as my hon. Friend said, is ranked 58th, with 38.1 per cent. of 15–year-olds gaining five or more A to C grades.
There is a similar pattern with post—16 results. In Stockport, the average point score for pupils taking two or more A or AS-levels is 18.8, which is the third 1083 greatest nationally. By comparison, Staffordshire is ranked 32nd, with an average point score of 15.7, which is below the national average of 16.7.
I would not wish to imply, and I know that my hon. Friend would not assume it from my comments, that in some way uniquely Staffordshire should be linked with Stockport. My purpose in linking the two LEAs was to draw specific and complete attention to the erroneous belief, fostered especially on the Opposition Benches, that there is a direct correlation between money spent and education results achieved.
My hon. Friend made passing reference to Stoke, which I recognise will shortly be in transit from the warm embrace of Staffordshire. He might concede, although I do not seek that he should do so tonight, that Stoke-on-Trent is a region of significant social and economic deprivation. For many years, Governments have sought to encourage authorities to give priority to deprived regions in determining their priorities for expansion of nursery provision. I can confirm that the level of nursery provision in Staffordshire does not affect its SSA—the SSAs are calculated on the basis of pupil numbers, not nursery provision.
I shall now discuss the local management of schools in Staffordshire. As hon. Members will know, local education authorities have a great deal of discretion in the way in which they arrange their LMS schemes. It is important to realise what LMS is about. It is not about the total spending on schools. It is about the distribution of that expenditure—the balance between centrally retained items and funds delegated to schools, and the distribution of those delegated funds between individual schools.
I suspect that there is not an hon. Member in the House who has not received letters from this or that school whose complaint, when analysed, is against the nature of the local LMS scheme administered by the education authority, rather than exclusively, as the writer thought when he wrote the letter, against the nature of this or that Government decision. I have received many such letters.
How much Staffordshire spends on its schools is a decision for the LEA, to be taken in the light of its other commitments, both in education and in other services. This year, Staffordshire's general schools budget amounted to £342 million, equal to £2,124 per pupil. National comparisons are not yet available for 1995–96, but it is true that in 1994–95 the general schools budget per pupil for Staffordshire, which then stood at £2,120, was the lowest of any shire LEA, and one of the lowest in the country.
1084 However, hon. Members should be wary of those comparisons. The size of the general school budget per pupil is affected by many factors, such as the proportion of sixth formers in LEA schools and the capital spending needs of local authorities.
Another matter of acute interest to schools is the proportion of funding delegated to them. In 1995–96, Staffordshire will be delegating to schools 92.8 per cent. of its potential schools budget, which, on the information currently available to me, is a little above the national average and ahead of the required minimum of 85 per cent.
What does that delegation represent in terms of budget share per pupil? Obviously, that varies from school to school; all LMS schemes direct funding between schools according to various factors which measure perceived need, which can result in marked differences in funding per pupil. On average, the budget share per pupil this year is £1,286 for primary pupils, £1,768 for secondary pupils and £6,267 for special schools. All those show a modest increase compared with 1994–95.
I mentioned at the outset that I thought that my hon. Friend had done a first-class job. It is particularly relevant that his debate takes place in what, in many parts of the country, is the run-up to local elections. I am sure that in Staffordshire, as across the country, he and his supporters are finding that Conservative councils use their resources efficiently.
Too often, when one analyses their spending, Labour or Labour-Liberal Democrat or Liberal Democrat councils use their money inefficiently. Sometimes, they have strange sets of priorities. As Education Minister, I shall, of course, continue to reiterate the importance of education. In saying that, I am backed by my right hon. Friend the Prime Minister, who has stated many times the importance that he attaches to education. We expect to see that priority represented and reflected across the country in the decisions of local authorities.
This has been a wide-ranging and interesting debate, and I am grateful to my hon. Friend for raising so many important issues. I very much hope and trust that, with the information that I have given him tonight, he will be able to return to his constituents and explain even more clearly than the brilliant way in which he has already, the reasons why Staffordshire may be under-performing in education terms. He can explain to them that it is up to the LEA and the governing bodies to address those problems rather than to assume that it is simply a matter for greater funding from the centre at the expense of the taxpayer, year in and year out.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Ten o'clock.