HC Deb 03 February 1999 vol 324 cc1050-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hanson.]

10.26 pm
Mr. David Heath (Somerton and Frome)

I am extremely pleased to have the opportunity to address the House on the important issue of education services in Somerset and their funding. I confess to a sense of deja vu, in two respects. I seem to have secured a number of Adjournment debates on the subject during the brief time that I have been a Member of this place. My first Adjournment debate—on 12 June 1997, in which I made my second speech in the Chamber—was on exactly the same subject.

I make no apology for that, because, sadly, the points that I made then are still as relevant today. Although I may sometimes be a little bored of making the same points—the Minister may be bored of hearing them, from me and others—that is nothing against the annual anguish of councillors, governors, teachers and parents, who wrestle with budgets that simply do not work.

If I wanted evidence of that, I should have only to read the letters that have been sent again by schools up and down my constituency, from Huish Episcopi school; Milborne Port county primary; Sexey's school, which is a grant-maintained school making the same point; Nunney county first; Countess Gytha school in Queen Camel. A letter has also come from Berkley parish council, and all those letters make the same point: the present funding arrangements for Somerset do not work.

I also feel a sense of deja vu because we had a near-identical debate only two weeks ago in the Chamber, initiated by my hon. Friend the Member for Northavon (Mr. Webb). It was an excellent debate, with very much the same cast of characters: the same Minister and the same hon. Members on this side of the Chamber. The west country mafia was spread around both sides of the House—

Mr. Bob Russell (Colchester)

And not a Tory in sight.

Mr. Heath

My hon. Friend is absolutely correct.

My modest request to the Minister is that her civil servants provide her with a slightly different brief this evening, not simply one with South Gloucestershire crossed out and Somerset put in.

What is the problem? It is simply that the revenue support system does not come close to providing sufficient to enable Somerset county council to provide school services at the level that I, and the Minister, would want. That is not unique to Somerset; it appears to be the case for almost all authorities in the rural south-west. That is a significant problem.

Mr. Adrian Sanders (Torbay)

I gave my hon. Friend notice that I should like to intervene.

Is not that problem compounded by areas, such as my constituency, that have rising numbers of pupils which are not reflected in the standard spending assessment totals? That is obviously a problem in Somerset, as it is in South Gloucestershire, and the sums of money that come from the Government lag behind the expenditure of the schools concerned.

Mr. Heath

I am grateful to my honourable and elegant Friend for that intervention. He is absolutely right, and the point was amplified by my hon. Friend the Member for Northavon in the recent debate.

The Department for Education and Employment admits that Somerset is hard done by. I had a meeting with the Secretary of State, who freely admitted that, when in opposition, he used to quote the Somerset factor in evidence. The sparsity factor and the other factors used to derive the formula work to the disadvantage of a small number of authorities spread around the country, particularly in the south-west of England.

I have a letter to one of my constituents from Mr. Niall Forde, a civil servant in the Department, who says: Ministers recognise that historically there has been a very real difficulty for Somerset, because of under-funding over many years. This is not a recent phenomenon: it has gone on year after year. It was a problem when I became leader of the county council in 1985, and it has been a problem ever since.

What has been Somerset's response to that problem over the years? It has provided more money from local resources. It has massively topped up the amount that the Government provide for education from other resources available to it. That has averaged £10 million a year over and above the standard spending assessment, which is £40 million from local funds in the past four years. I do not take the SSA as an adequate measure of what should be spent, but nevertheless it is what the Government officially say should be spent on education. That £40 million has not come out of thin air: it has come from the budgets for highways, social services and other essential services provided by the county council.

I fully accept that the Government's generosity has increased this year. They have recognised that there is a problem with overall education funding, and they have sought to respond. Indeed, there is an increase in the education SSA for Somerset of £10.6 million for next year, and that is very welcome. On the face of it, that should be very good news, but—and it is a big but—sadly, that increase merely brings the SSA up to fractionally more than the real expenditure this year. That is the constant funding trap in which authorities that spend massively over their SSA year on year find themselves.

The total expenditure increase for the authority is £15.5 million. If the authority spends that much, it will increase its council tax by 6.4 per cent. We are told that the Government's view is that the increase should be 4.5 per cent., so immediately there is a discrepancy between the two.

It would be wrong for me to expect the Minister to be an expert in this area, but she should know that the county council has other commitments apart from education. It has non-service commitments—£6 million comes out of the extra money for items such as landfill tax and land drainage. If the Minister saw the water levels in Somerset at the moment, she would realise how important land drainage is in that area. We have a serious problem.

What is wrong with the system as it stands? The area cost adjustment is often referred to as the tax on the west, although it could just as easily be described as the tax on the north or the tax on the midlands. It is the tax on those areas that are not in the south-east and do not have the benefit of the adjustment.

The Government's view has always been that they would like to change the area cost adjustment, but they cannot get unanimity among local authorities. Of course they will not get unanimity among local authorities. I was a leading member of the Association of County Councils for years, and I could not get unanimity in the association, because those who represented Sussex, Hampshire and the other authorities that benefited from the area cost adjustment were not going meekly to say that they would give it up. The fact is that it is wrong and is based on a wrong methodology, and it must be removed. It is worth £2.2 million to Somerset in terms of its education expenditure.

There are other factors in the education formula, such as pupil weighting, which is worth £3 million in Somerset, and additional educational needs, which is worth £5.7 million. So £8.7 million is missing from the Somerset education budget simply because of the perverse effect of the methodology used for those formulae.

The problem is that Ministers say that they cannot obtain unanimity, but they will never do so on such matters because losers will not happily accept that they should be losers. It is central Government's job to decide what is equitable and the present situation is patently not equitable. Other factors also have an effect. For example, in a rural county such as Somerset with many small village schools, the unit costs of providing the same level of education are inevitably higher.

Jackie Ballard (Taunton)

Is my hon. Friend aware that the chairman of governors at Cheddon Fitzpaine primary school in my constituency resigned this week? It is a very successful school and she has been the chair of governors for 10 years, but she resigned because of the twin pressures of budget difficulties continuing year after year and the extra innovations that the Government have loaded on to schools. The school will find it difficult to find anyone to replace her and many areas have a shortage of people willing to become governors.

Mr. Heath

My hon. Friend is right. I know the lady in question and I know the value of her service to that school. My wife is a governor of a small rural school and my children attend such schools. They face difficulties because people are fed up of wrestling with budgets time after time.

The effect of more pupils in Somerset has already been mentioned, but this year it will cost an extra £1.5 million simply to accommodate the extra pupils on the rolls. Also, every 1 per cent. of the teachers' pay awards that is not budgeted for in the Government's figures costs Somerset another £800,000 to £900,000. The county council is, of course, able to operate expediencies. It can continue to spend in excess of its SSA on education, as it has for the past 10 years. However, it may face capping, whether it is crude and universal or secretive and targeted. Whichever it is, it still exists.

The county council also faces the problems caused by increasing the council tax—an increase that many in rural areas cannot afford. Then there is the effect on other services. I have mentioned social services and I worry greatly that Somerset spends below its SSA on social services. That is an essential part of the council's work, but it reduces spending on it to meet the needs of the education budget. The council also faces the lack of real improvement in standards in schools, which the Minister would love to see. Of course, the non-school services are also constantly being squeezed.

The Government's actions, including the introduction of a three-year stability programme, should ameliorate the situation. However, if they dip the present formula in aspic and use it for the next three years, they will do counties such as Somerset no favours because all that will do is maintain an unfair position. In reply to my hon. Friend the Member for Northavon in his recent Adjournment debate, the Minister suggested that the additional funds might provide a valuable mechanism for rectifying some of the faults in the system. However, although Somerset is very pleased about the result of its bid to the standards fund, that extra funding has to be matched. If an authority has not got the spare cash to match that funding, it has to take it out of the already allocated schools budget. The authority is in a cleft stick, because it can only improve one area to the detriment of another.

The money for the reduction of class sizes is also good news and I welcome it. The Government are doing a tremendous job, but if class sizes are reduced at the bottom end of schools by improving the funding of primary schools, any cuts in services must be concentrated on the middle and secondary schools, which also cannot afford any reductions.

I hope that it is common ground between the Minister and myself that the quality of education in Somerset is extremely good. I hope that she also recognises that the local authority has shown its commitment year after year to making education its priority. It displays a high degree of efficiency and effectiveness in its administration and delegates a high proportion of its spending to its schools. The fact remains that the SSA per pupil is well below the national average. Compared to some of the London authorities, it is £1,000 per pupil lower. I cannot accept that for my children or my constituents' children. I cannot accept that they are second-class pupils because they happen to live in Somerset and to benefit from its countryside. The Government must demonstrate their commitment to extending what they are saying and doing in education overall to every part of the country. At present, the formula prevents that.

I am sick and tired of bringing this case to Government each year. I did it as leader of the council, as chairman of education, for the county council and now I do it as a Member of Parliament. It is the same case year after year because it is the same problem year after year. I do not want the chairs of governors, governing bodies, head teachers and parents to go through the same ritual year after year of writing letters and applying pressure to the Department for Education and Employment when the fact is that the formula is wrong and needs changing. I invite the Minister to put what pressure she can on the Department of the Environment, Transport and the Regions to ensure that, next year, Somerset has the funding that it deserves to run its schools as they should be run.

10.40 pm
The Minister for School Standards (Ms Estelle Morris)

I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on securing this debate. It is a little like deja vu because the hon. Member for Northavon (Mr. Webb) had a similar debate a week ago. I will try not to be too repetitive but I hope that the hon. Member for Somerton and Frome understands that the explanation that I gave his colleague is very much the one that I will give him, but I will tailor it to suit Somerset.

The hon. Member for Somerton and Frome described this as a south-west problem, but it is not. I hear about the problem that we inherited on how standard spending assessments are worked out wherever I go. In the west midlands, where my constituency lies, people from Staffordshire and Derbyshire speak with the same feeling as people from Somerset. In my travels, I have not yet met anyone who said how generously they are funded by SSA and called for the longed-for review. I suspect that I am in for a spate of Adjournment debates over the next few weeks as hon. Members rightly secure debates on their education settlements. I look forward to the first Member who joins us in claiming that a review of SSAs is long overdue but says that his or her area receives too much. That is the difficulty.

I am delighted to be able to respond to one of the points raised by the hon. Member for Somerton and Frome. I congratulate those in Somerset and his constituency on the standards of education. They achieve above the national level: 51 per cent. of Somerset pupils obtain five or more GCSEs at grades A to C. Key stage 2 tests show 67 per cent. of pupils achieving better than the national average. The same is true at each key stage. Such achievement is not brought about without much hard work, I extend my thanks and congratulations. I extend them also to local authorities in Somerset that have made the difficult decision to spend more than their education SSA because, as a constituency Member, I know the consequences for other services. I am happy to oblige the hon. Gentleman on both points.

I disagree with the hon. Member for Somerton and Frome on one matter. I understand his frustration in all the different guises of his relationship with Somerset, as parent, governor, councillor and Member of Parliament. I understand his frustration with repeating the same argument in different forums year after year but this is our second year of being answerable for that. It was a different Government with different priorities that answered previous queries. I understand his frustration but I am answerable only for our actions over the past 18 months.

I want to put the matter in the context of the increased funding that there has been. I am sorry that a chair of governors decided to resign because we need good quality people in such positions. In thanking that person for their years of service, I wonder whether a review of that decision might be appropriate. Year after year, governing bodies have had to struggle with reduced budgets. It is ironic that, in the first year that we are getting really expanded budgets, high—calibre chairs of governors should choose to resign. I make that point to the constituent of the hon. Member for Taunton (Jackie Ballard). Such people know the national context in which we are operating, with a doubling of capital funding between now and 2002 and an average £10 billion increase over the next three years in money going to local authorities. That money was already going to come through next year, and the hon. Gentleman was kind enough to acknowledge that. Whereas, nationally, SSAs will increase by 5.7 per cent., the SSA for his area will increase by 6.5 per cent. I realise that the extra is to account for increased numbers, even if they were counted 18 months ago, so I do not pretend that it is an effort to remedy the SSA.

I was also pleased that the hon. Gentleman acknowledged that, where we have the power to bring more money into schools without changing the SSA, we have done so. He cannot claim as much sorrow as his hon. Friend the Member for Northavon, whose authority is bottom of the table. Sadly, that is not a position on which any hon. Members would pride themselves. The hon. Member for Somerton and Frome represents an area that is certainly in the bottom half as regards SSA. I think that 29 local authorities have SSAs that make them worse off and have more cause to complain than the hon. Gentleman, but I am not trying to justify that, to make light of the load or to say that he ought to feel better.

This year, we have managed to increase the standards fund to Somerset by about 70 per cent. above our increase in funding last year. The Government's authority receives the national average when it comes to allocation of standards funding. Although I certainly accept the argument that it is receiving less SSA than he and his constituents have a right to expect, I assure him that, where we have been able to act within the formula, we have not treated Somerset less favourably than other local authorities. I hope that his constituents and the chairs of governors, who rightly worry about that, realise and acknowledge that fact. Somerset received £378,000 so that it could begin to implement class size policy early. Of course, that is not matched money—it is 100 per cent. from the standards fund.

There will be other initiatives. The hon. Gentleman is concerned about a school in his constituency that has a class of 38. I am considering a petition, which he presented to the House, and I will be in a position to reply to his constituents shortly. I understand that it is not a key stage 1 class, otherwise it would be dealt with. I hope that he will accept that the 20,000 classroom assistants, who will be funded through the standards fund, will be the sort of resource that will allow the adult-to-pupil ratio in that key stage 2 class to be better by the time of the next election.

The nub of the issue is SSAs. I will not this year, or any year, defend what I believe to be an inequitable distribution of resource. The hon. Gentleman may have been quoting me exactly when he said that, if we waited around for unanimity, we would never get anywhere. If that was a quote from my reply to the hon. Member for Northavon, I am grateful for the opportunity to restate it. I fear that, if we stand around waiting for unanimity, we will never get anywhere. I would certainly not want to wait that long and I know that we have to act before we achieve unanimity.

I also acknowledge that the transition from being favourably funded to being equally funded is difficult. The hon. Gentleman and I may comment on the fact that authorities do not volunteer that they are too favourably treated by the SSA. However, the reality is that not one local authority or school feels that it is overfunded.

Mr. David Heath

The hon. Lady is right. No one will volunteer that, which is why it is so important to take the opportunity of rising budgets within her Department to make that transition. If it does not happen now, it will never happen. That is what worries me about the fact that we appear to be stuck with those SSAs for the two or three-year period that has been suggested. If that is the case, there is no relief for people in Somerset and in similar authorities who are stuck with the poor spending patterns that they inherited from councils that are long forgotten.

Ms Morris

I accept that, and the hon. Gentleman has a valid point. I do not envisage that increased education budgets will stop in three years. We are part of a Government who are committed to expenditure on education and that commitment is not for the short-term, just for the length of this comprehensive spending review settlement. We have always said that we shall seek to increase education budgets year on year, and we shall be judged on that commitment. I accept that it is far easier to make the transition in times of increasing budgets—I dare say that it would be almost impossible at times of decreasing budgets—so I agree that we must seize the opportunity to do so while we have a Government who are committed to securing what resources they can from the Treasury and putting the money into education.

Somerset has not only been underfunded this year—the problem with its SSA is historic and has gone on for years—but the hon. Gentleman must realise that the huge change necessary must be seen in the context of all SSAs. Somerset's is not the only SSA that was up for review. Had changes to the education SSA been made alongside changes to the children's services SSA in the social services budget, the statistics show that certain authorities—London authorities, which suffer a fair degree of poverty—would have been clobbered twice. Although my right hon. Friend the Secretary of State and I are driven by our desire to get a fairer system of funding, neither of us, nor any of our colleagues at the Department of the Environment, Transport and the Regions, could justify pushing that agenda this year, given all the other changes taking place.

Mr. Heath

Will the Minister give way?

Ms Morris

Yes, but I suspect that it will have to be the last time.

Mr. Heath

I am listening carefully and I am grateful to the Minister for what she has said. I hope that she will not consider it a cheap point, but it is one that parents will inevitably make, because their children are going through the system now. We have waited for years and the sense of impatience is causing desperation in many of our schools, which is why we want quick results. I do not expect her to be able to wave a magic wand, but I do expect the process to start and that is what I am asking her to ensure.

Ms Morris

The hon. Gentleman is right, but the process has started and it will continue. As he will know, we have held extensive talks with local authorities over the past six to 12 months and we are hopeful that the change will be brought about. Only relatively recently did we realise that we could not secure that change and arrive at a reasonable state of affairs for all local authorities with which we felt at ease. However, we have asked local authorities to continue to talk, not with a view to obtaining unanimity, but with a flexibility that will allow everyone to reach the point at which we can justify changes to each other.

The London authorities argue not that it is right that they are better funded than others, but that they would find it difficult to cope with reduced funding—not that they are entitled to be better funded, but that they are entitled to be funded at the level at which they are currently funded. The good news is that there is an acceptance that the conversation must continue. The issue crosses party boundaries and splits along parochial lines, and my hope is that those parochial lines will converge over the next two to three years.

The hon. Gentleman is right to say that there will be no change made to SSAs for another three years but, at the end of those three years, I shall be disappointed if, with our local authority partners, we have not managed to secure a fairer way of allocating resources from central Government to local authorities. I do not underestimate how difficult that task will be, but I have a clearer understanding of the difficulties ahead than I had 12 months ago.

My final point goes to parents in the hon. Gentleman's constituency. He can take the message back that I have heard what their Member of Parliament has to say; I accept that, historically, they have not been fairly funded and that they have a right to secure from any Government a promise that all children be treated, not equally, but as individuals of equal worth who have a right to a similar standard of education and to the resources necessary to achieve that. We shall continue to work on the formula in the hope of securing a better one soon.

Meanwhile, we are delighted to have been able to secure for the hon. Gentleman's constituents an increase in funding that is probably the largest increase that Somerset has received for a considerable time and an increase in standards funding that will benefit students in his constituency. That is our notion of partnership. We can contribute to the hard work that teachers, pupils and parents in Somerset are already doing to drive our common agenda and to make sure that all children receive a standard of education of which they and we can be proud.

Question put and agreed to.

Adjourned accordingly at five minutes to Eleven o'clock.