§ 10. Mr. Laurence Robertson (Tewkesbury)
What plans he has to review the standard spending assessment system, with particular reference to the area cost adjustment, in connection with education. 
§ The Minister for School Standards (Ms Estelle Morris)
We all accept that there are valid objections to the current system, including the area cost adjustment. We will be looking at proposals for reform over the next three years.
§ Mr. Robertson
I thank the Minister for that encouraging reply. I remind her that the scheme means that Kent, for example, benefits in purely educational terms to the tune of about £26.5 million year, and that Oxfordshire similarly benefits to the tune of about £8.2 million a year. However, Gloucestershire, Oxfordshire's neighbouring county, loses out by about £2 million a year. Will she look at the iniquities of the scheme?
§ Ms Morris
We certainly will; indeed, we began to do so when we took office. The inequalities did not begin on 1 May 1997, they have been going on for years. The previous Conservative Government failed to tackle the issue. We have begun to look into the matter and I hope that, over the next few years, we can work with local authorities to achieve a better formula.
§ Mr. George Stevenson (Stoke-on-Trent, South)
The significant additional resources for education being provided by the Government are warmly welcomed 457 throughout the country, but is my hon. Friend aware that the anomalies of the area cost adjustments as reflected in educational standard spending assessments mean that those additional resources are widening unfairness? That, coupled with the serious anomalies in the additional educational needs formula, means that my local education authority, like many others, is at a serious disadvantage. In this regard, the Government's three-year plans are not bringing stability, but are perpetuating an injustice. Will my hon. Friend at least consider what interim measures can be taken to mitigate that serious problem?
§ Ms Morris
The Secretary of State for the Environment, Transport and the Regions has lead responsibility for looking at the SSA formula. However, we have been working closely with his Department and with others to try to deal with what I accept is a very serious matter. I take seriously what my hon. Friend says: his area and surrounding Staffordshire have suffered for too long from an unfair formula, but it is no good changing that formula if we do not get it right this time around. It is right that the Government work with local authorities to reach an agreement on how we can move forward. We were not able to reach an agreement this year, but we will continue to look at this important matter.
I thank my hon. Friend for his acknowledgement of the extra resources that have gone into Stoke. I assure him that, in terms of extra resources—available through the new deal for schools and the standards fund—there is nothing in the SSA formula that will mean that authorities such as his will not benefit at least as much as, if not more than, those that benefit from the current SSA formula.
§ Mrs. Theresa May (Maidenhead)
It is clear from that answer, and from the Minister's earlier answer on schools funding, that the Government do not understand the impact of their policies—increased burdens on LEAs, extra bureaucracy and failure to fund fully the teachers' pay award—on SSAs and on LEA funding. One LEA has announced that the Government's interventions will cost it almost £1.5 million before it can even consider spending money on improving school standards. Does the Minister realise that her Department for intervention will cost LEAs and schools dear? Far from raising standards, intervention, intervention, intervention means bureaucracy, bureaucracy, bureaucracy. Money is being spent on Government intervention instead of being spent, as it should be, on standards in the classroom.
§ Ms Morris
Half the time, I do not know what world the hon. Lady lives in. When her party was in government, it increased the SSA but did nothing to match the increase with increased funding. We have provided an increase this year that will give local authorities ample money to fund the most generous teachers settlement in years. Many key objectives relating to class size are being funded at 100 per cent., as were child care places.
On the question of intervention, I think that every penny spent to ensure that local authorities do their job well in passing on money to schools is money well spent. As far as central administration goes, we have taken powers to cap the amount of money that local authorities spend at the centre to ensure that they pass on the bulk to schools. The hon. Lady's Government could have taken those powers during their 18 years in power, but they did not.