HC Deb 20 January 1999 vol 323 cc989-1002

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

8.43 pm
Mr. Steve Webb (Northavon)

It will come as no great surprise to hon. Members to learn that the subject of my Adjournment debate has not been the sole topic of conversation this afternoon among my fellow Liberal Democrats. Having said that, it is an issue of substantial importance to thousands of children in South Gloucestershire, who are represented by me and by the hon. Member for Kingswood (Mr. Berry), whose constituency includes a substantial part of South Gloucestershire, and who hopes to catch your eye, Mr. Deputy Speaker.

The allocation of money between local authorities, especially for education, is a highly political issue because it relates to values. However, it is also a highly technical issue. I shall refer principally to those technical issues tonight, and I hope that the Minister will respond positively.

I hope not to approach the issue on a party political basis. As I have said, my arguments are principally technical and hon. Members on both sides of the House who represent South Gloucestershire constituencies—I welcome also the hon. Member for Bristol, North-West (Dr. Naysmith) who represents part of the authority area—share some of my concerns and may give voice to them during the debate.

By way of background, I should explain that South Gloucestershire is an area with a rapidly growing population—in fact, it has one of the fastest growing populations in the country. Many new employers have located to the area—including the Ministry of Defence at Abbey Wood, the aerospace industry and Hewlett Packard—and large numbers of people have moved there also. That is not a one-off phenomenon as population projections suggest that South Gloucestershire's population will also grow rapidly over the next decade or two. That presents some particular problems to which I shall refer this evening.

The Minister will be aware that I have tabled questions designed to assess the amount of money per primary pupil that authorities throughout the country receive under the standard spending assessment. The Minister will also be aware that South Gloucestershire usually finishes at the bottom of that league table. According to the written answer that I received, primary school pupils in South Gloucestershire receive an SSA of £2,215 each compared with the national average of £2,372.

I am the first to accept that any league table must have a top and a bottom—although I do not welcome the fact that South Gloucestershire has been persistently at the bottom of it. I recognise that other authorities with greater deprivation and greater needs deserve more funding. That is not my problem tonight. However, I believe that the formula must achieve its desired objective: if it is trying to capture deprivation or need, it must do so in the right way. I argue not that South Gloucestershire should be at the top or the middle of the league table, but that the formula should achieve what it is designed to achieve. South Gloucestershire has remained at the bottom of the table following the announcement of this year's settlement—we could debate the generosity or otherwise of that settlement—partly because of reasons that are technical and difficult to explain on the basis of justice.

I shall raise three principal issues, to which I hope that the Minister will respond positively. The Government allocate a certain amount of money per pupil and then multiply that sum by the number of pupils in the authority. The fundamental question is: which pupils and when? As I understand the system—I hope that the Minister will correct me if I am wrong as I do not claim to be an authority on local authority finances—the number of secondary school pupils is counted in September at the start of the academic year. That information feeds into the local government calculations in the autumn, and the money starts to filter through the following April. The process is completed within one financial year, which seems perfectly reasonable.

The system is different for primary pupils and the count is taken not in September but in the preceding January. That will not make much difference to many authorities with static populations, but it makes an enormous difference in South Gloucestershire. I asked my local council—which has kindly provided all South Gloucestershire Members with a briefing for tonight's debate—how many primary pupils were added to the count between January and September. The answer is 267—more than 1 per cent. That is the equivalent of an extra primary school in our area—and that is an extra school this year, next year and the year after because it happens every year. It is not a one-off phenomenon.

The council reckons that the figure is out of date and that, if the figure for September rather than the preceding January were used, it would receive an extra £750,000. That is serious money for South Gloucestershire. If the formula were based on up-to-date rather than out-of-date statistics, the loss to certain other authorities—assuming that the total pot remained unchanged—would be quite marginal. I do not argue that all London authorities should lose and only South Gloucestershire should gain. However, that discrepancy in the formula acutely affects my local authority and a small number of others with rapidly growing populations. If it were taken into account, it would result not in huge, sweeping losses but in only fairly modest losses elsewhere.

The council has further calculated that, over the course of a year, it spends £1.5 million educating children whom it has not counted yet and for whom it has not received any money. There cannot be any rationale or justification for such a system. I shall illustrate the most extreme case. If a family moved in February 1998 to South Gloucestershire, perhaps because of a job at the Ministry of Defence at Abbey Wood, their children would not appear in the count of pupils at primary school until January 1999. They would not, therefore, become part of the local government calculations until autumn 1999 and the money to pay for their education would not emerge until April 2000. That means that the council would face more than two years of paying for books, equipment and other costs before it received a penny.

I hope that there is a more rational system that we could use. In the age of the internet, it seems incredible that we have such out-of-date figures on the numbers of children in our primary schools. They are not difficult to count. My pre-primary school-age children move around rather a lot but even they are not too difficult to count.

It has been suggested to me that, in the autumn, the Department's civil servants are under considerable pressure gathering material and information to work out all the figures. I accept that their work has a seasonal nature and that counting the children in September would place a greater burden on the Department than counting them in the previous January. With tongue only slightly in cheek, however, I shall make the Minister an offer. I understand that there are about 18,000 primary schools in England. I will personally type in the numbers of pupils in those schools if that will make the difference. If the only obstacle to counting the children currently in school rather than those who were in school nine months ago is the civil servants' lack of time, there are ways round that. I hope that the Minister will reassure me on that point. My researcher looked very nervous when she read that part of my speech.

My second point is particular to South Gloucestershire but less so than my previous point. It relates to the education of children from beyond the local authority boundary. South Gloucestershire was recently reorganised and used to be part of the former Avon authority. Children go to and fro and now cross boundaries that did not previously exist. Therefore, partly for historical reasons, South Gloucestershire educates a particularly large number of pupils—about 3,000—from outside the authority. That number may be diminishing, but it is still substantial.

If a primary school child is to be educated in a neighbouring authority, such as Bristol—which is the most obvious authority to export pupils to South Gloucestershire—the authority will be allocated £2,338. If the same child goes half a mile up the A38, to be educated in a South Gloucestershire school, we have to educate him or her for £2,215—£123 less. The authority is already under a great deal of stress.

I am not trying to set up South Gloucestershire against Bristol, but many people move into the area and want their children educated in local schools, which are full. Those parents must understand not only that the schools are educating pupils from other authorities but that South Gloucestershire receives what it considers to be an inadequate amount of money for doing so—something that parents find particularly hard to accept.

The bizarre result of the system is that, if a child from Bristol goes to school in South Gloucestershire, central Government save money because the child is being educated in an authority with a lower SSA. It is hard to believe that the cost of educating that child is really £123 less half a mile up the A38 because the books cost the same and the teachers are on the same pay scales. If, at the very least, the money followed the child, and central Government did not profit from the arbitrary fact that the child was going over a line on a map to be educated, that would substantially help the authority.

My final point relates to the thrilling subject of the standard spending assessment formula. I suspect that the Minister and her colleagues have been bored to death by almost everyone in the country on that topic, so I shall follow suit. I am sure that she has heard many cases of special pleading as to why every authority wants more money.

Mr. Bob Russell (Colchester)

Hear, hear.

Mr. Webb

Even Colchester. We need a system that is just and achieves its aims. I shall not dwell on the area cost adjustment, which is popular in the west country. I shall concentrate on the additional needs allowance aspect of the calculation.

I understand that the principal variables used to try to identify additional education needs are ethnicity and lone parenthood. It is implausible that the proportion of children from ethnic minority backgrounds is a good proxy for additional educational needs when certain ethnic minority backgrounds tend to produce children with above average educational attainment. It is a crude indicator.

South Gloucestershire is in many respects a relatively prosperous area, although with significant pockets of deprivation, but it has significant numbers of children with additional educational needs. I today asked the Library to give me another blessed league table showing the proportion of statemented children. It shows that South Gloucestershire has an above average proportion of such children. I can think of 100 reasons why such league tables might be dubious—policies vary and so on—but that example shows that, just because an area seems relatively prosperous on the face of it, it does necessarily lack children with additional educational needs. The present indicators are not picking that up.

Dr. Doug Naysmith (Bristol, North-West)

Does the hon. Gentleman agree that while the increase of some 6.9 per cent. in the education SSA for the coming year for South Gloucestershire may indeed be partly explained by growth in the area and by data changes, it is nevertheless greater than it has been in recent years? If, as he has expounded so eloquently, we can improve the way in which primary school head counts are translated into SSA figures, very significant progress will have been made.

Mr. Webb

I am grateful to the hon. Gentleman for his support on this very technical but basically simple issue of primary school head counts. I do not want to get into a pointless debate about whether this year's settlement is a lot or a little. My understanding from the authority is that 6.8 or 6.9 per cent., adjusted for the number of extra pupils—a number that is out of date anyway—means that we are getting the national average, but we are still around the bottom of the table. It does nothing about the technical problems, so I understand the hon. Gentleman's point.

The fundamental technical point is that the balance between the essential—I was going to say "bog standard", but I am not sure whether that is parliamentary language—figure for "ordinary" children and the tweaks for area costs and additional needs seems to be wrong. The variations across the country in the cost of educating one child seem to me to be too great to relate to the variation in true costs. As far as I can see, that is because the core figure for "ordinary" children seems to have too little weight and the variable factors seem to have too much.

One might ask how South Gloucestershire has managed so far. It has done so in two ways. The first is by spending several million pounds in excess of its SSA.

Mr. Adrian Sanders (Torbay)

I should like to reinforce the point about the head count, which would be of great benefit to my constituency. When a local authority area is given an SSA, it does not necessarily mean that the money is provided to meet it. In order for some local authorities to spend up to their education SSA level, they have to make cuts in other services. It seems as though central Government are abdicating their responsibility and passing it to local councils which are then blamed for the cuts, when in fact it is the inadequacies of central Government funding that are to blame. This is not a party political point—that policy was pursued rigorously by the previous Government and, unfortunately, the same ideas seem to be creeping into this Government's policies.

Mr. Webb

I am grateful for my hon. Friend's comment. With his background in local government, he understands far better than I do the arcane niceties of local authority funding. I hope that the Minister responds to that point when she sums up.

I was setting out how South Gloucestershire has coped. It has coped by spending £7 million above its education SSA this year. With capping in place—various versions of it, at least—that means cutting other services. That in turn means that I get letters from pensioners asking why they are paying for social services when they used not to, and it means raiding the reserves, but I regret to say that the reserves are pretty nearly empty.

The other services are in many respects underfunded rather than overfunded, and the only conclusion is that things cannot continue as they are. South Gloucestershire cannot go on raiding its reserves and cutting other services. Any allowances that the Minister can make tonight to deal with some of the injustices in the formula will be gratefully received.

I am not asking that South Gloucestershire be moved to the top of the table, or even the middle. I am simply asking that some manifest injustices, especially the use of out-of-date figures on primary school pupils, be corrected. I hope that the Minister will send us home tonight with a message for the children of South Gloucestershire that, at long last, under this Government the funding for their education will soon be put on a proper footing.

9 pm

Mr. Roger Berry (Kingswood)

I congratulate the hon. Member for Northavon (Mr. Webb) on securing this debate and on an excellent speech. I agree, I think, with everything that he said. The issue is extremely important to his constituents, my constituents—three-quarters of whom reside in South Gloucestershire—and the constituents of my hon. Friends the Members for Bristol, North-West (Dr. Naysmith) and for Wansdyke (Dan Norris). We have all made representations to Ministers on this and related issues. Indeed, on one occasion we managed to write a joint letter—all in the tradition of Labour and Liberal Democrat Members of Parliament agreeing to get rid of tribalism and to co-operate with and listen to each other.

I notice the absence of interest of a single Conservative Member in a debate on educational funding in South Gloucestershire. I have been wondering why so many Liberal Democrats are present. I am sure that it is because they anticipated a quality speech from the hon. Member for Northavon, and that it had nothing to do with whether he would announce his candidature for his party's leadership.

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I am sorry to interrupt the hon. Member, but we should remind ourselves that this is a debate and not a rally.

Mr. Berry

I am not the campaign manager of the hon. Member for Northavon, and I of course accept that rebuke. I merely emphasise that the four hon. Members—including myself—to whom I have referred, have very seriously supported the arguments of South Gloucestershire council on this issue.

I acknowledge and welcome the fact that the increase in South Gloucestershire's education standard spending assessment is significantly greater than in previous years. Some schools in my constituency are already benefiting from the new deal. There are new classrooms, and class sizes are coming down as a result of the Government's initiatives. I warmly welcome the substantial additional funding for education overall.

Like the hon. Member for Northavon, I feel strongly that South Gloucestershire council is being treated unfairly, but I do not do so simply because of a place in a league table. League tables are quite useful, but given that some local authorities must be at the top, some in the middle and some at the bottom, it is sensible to ask why they are in such places and whether there is any case for doing something about it. League tables are a guide to asking sensible questions. When I do so about South Gloucestershire council's ranking for education SSAs, I must confess that I reach very similar conclusions to the hon. Gentleman.

Why is South Gloucestershire council's education SSA so low? First, it is due to the allowance for area cost adjustment. I say no more about that except that at least four hon. Members present, who have served on either the former Avon authority or district councils in that area, have made this argument to successive Governments year after year. We all believe that, for our part of the country, the way in which the area cost adjustment is dealt with is inequitable.

Secondly, there is the issue of additional educational needs, about which, as the hon. Member for Northavon has said, concern has been recognised. The Government have recognised that that, too, is flawed. Unfortunately, however, we do not yet have a more satisfactory solution.

Thirdly, the education SSA in South Gloucestershire is too low because of the date on which children in school are counted to calculate it, as has been mentioned. The primary SSA for the next financial year, 1999–2000, is based on the number of pupils in school in January 1998—the beginning of last year. Obviously, pupils who started primary school in September 1998 will not be funded by the SSA until April 2000, which is a delay of 18 months.

I am aware of the justification for using the January figures for primary school children and the September figures for secondary school children. The unfortunate thing about children is that they do not all become five at the beginning of the school year.

The Minister for School Standards (Ms Estelle Morris)

indicated assent.

Mr. Berry

The Minister is right. It is profoundly awkward and it is a serious reason why dealing with the count for the primary SSA is more complex and difficult than dealing with that for children starting secondary education. One can see the argument that, if it has to be September, January or April, why not take January, and I dare say that that could be the justification for doing so. Unfortunately, schools cannot staff classrooms on that basis. They have to plan to have teachers there throughout the year.

Therefore, a general problem is confronted when the count is based on youngsters in primary school in January, but South Gloucestershire has the particular problem that, because of rapid growth, the relevant pupil numbers are much more out of date than for the majority of other local education authorities. I am sure that it will be said that, this time round, the increase in the education SSA for South Gloucestershire is significantly better than in previous years, as I said, and I welcome that. It might even be said that the increase is one of the largest in the country, and that would be true. The precise reason why it is one of the largest is rapid population growth, because pupil numbers are rising by about 2 per cent. each year. South Gloucestershire is being unfairly treated as regards the primary SSA precisely because primary school numbers are rising by that much. That rapid growth in population—at Emersons Green in particular, but also elsewhere—means that the figures are seriously disadvantaging the council.

The director of financial resources—it used to be treasurer, which was easier to remember—information technology and so forth for South Gloucestershire council, Richard Szadziewski, who is the officer responsible, estimates that the council will have to spend £1.6 million to fund children who are in school, but who do not exist as far as the SSA calculation is concerned.

The SSA for primary education should be calculated on the basis of the number of children of primary age who were in school in the previous September, as the hon. Member for Northavon said. I urge the Minister seriously to consider that suggestion. If that change cannot be introduced for 1999–2000, I seriously urge her and her colleagues to consider introducing it in the following year.

The present system is manifestly unjust to a local education authority that is experiencing a rapid increase in pupil numbers. We are not talking about changing the formula. Nor are we talking about a difficult negotiation, in which there will be winners and losers so that it will be a problem. In this case, we are talking about simply changing the data to which the formula is applied. That would make a profound difference to South Gloucestershire and, perhaps, one or two other local authorities, but it would have virtually no impact anywhere else.

In conclusion, and I apologise if I have spoken too long, I not only acknowledge but warmly welcome the fact that South Gloucestershire council has received a significant increase in its education SSA. It is the best SSA for years but—this must be said—a significant reason for that is the increase in pupil numbers. The increase in the education SSA does not diminish the strength of the council's argument that education funding at present is unfair. I urge the Minister and her ministerial colleagues to consider these issues further.

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

First, I offer my congratulations to the hon. Member for Northavon (Mr. Webb) on raising the topic that is before us, which is clearly one that will concern his constituents and all those who live in the council area. I join my hon. Friend the Member for Kingswood (Mr. Berry) in saying that I think the hon. Gentleman delivered the message in a sensitive and sensible way, which enables us to have a decent conversation about an important issue. I acknowledge the interest that my hon. Friend and other colleagues who represent seats in the area have shown in this issue.

Before I come to answer the questions that have been raised—I shall discuss the fundamental issues in some detail—I want as a Minister with responsibility for education to acknowledge the achievements of schools within Gloucestershire. Whatever their input in terms of finance, their output is very good. The key stage 2 results for the key subjects of both English and maths are above the national average. That comment is not intended to score a cheap point—"If you can do that with a small amount of money, I might take some more off you next year." I will take any opportunity to praise good quality teaching and effective learning wherever that may be.

As my hon. Friend the Member for Kingswood said, the debate takes place in an atmosphere and against a background of an increasing amount of money going into schools. I understand that this is an argument about the share of the pot, but I know that I would not have been expected to reply to the debate without making it clear that the pot is larger this year than last year, and that it will be larger still over the next three years.

The fact that there will be a £19 billion increase over the settlement period of the comprehensive spending review enables us, perhaps, to address some of the issues that will arise. It is far more difficult to do that at a time of falling budgets than when they are increasing. I accept, of course, that if there is more money available, there is an argument for wanting a fair share of the cake if the cake is about to grow. I am happy that the point has been made that the money that is being made available is increasing.

My hon. Friend the Member for Kingswood is right to say that education SSAs will rise by 5.7 per cent. this year. South Gloucestershire's provisional education SSA will rise by 7.2 per cent. I do not know where that puts it on the league table, but I know that measured against the comparable figure last year, it is an increase that is above the national average. My hon. Friend was right to say that that is because of increased pupil numbers. In some ways, because the pot is larger and because most of it is delivered on pupil-led funding, that has been reflected in an increase in the SSA. That is the position whatever count is taken. The debate comes down to the SSA formula because that is the criterion that decides how much money will go to each local authority and then to schools.

An important point is when we do the count. I shall not argue that it would not be better to have more recent figures of pupil numbers for deciding the count. That makes sense and there is neither an educational argument nor an economic one for using any figures but the most recent that it is possible to obtain—and it is essential to validate them and to ensure that they are robust.

It should not always be assumed that greater numbers will mean more money. The crucial factor is rate of growth compared with rates of growth within other local authorities. There could be a gain by not having an accurate reflection because of the comparable rates of growth within other local authorities. An individual rate of growth might be large and it might be thought large compared with other local authorities, and that would be the key point. There may be more children in schools, but how is that reflected when compared with pupil growth across the nation? The fact that pupil numbers have grown nationally means that the national pot from which resources are distributed has been larger this time round.

It would be a good idea if the September count used for secondary schools could also be used for primary schools. I was grateful for the offer made by the hon. Member for Northavon, although I suspect that he may not be the only Liberal Democrat Member who is filling in job application forms this evening. With respect, if the solution was as simple as typing numbers into a computer, I would instruct our officials to do so. I would make sure that the allocation of civil servants at that key point was sufficient to allow us to do that.

The critical date is not when the money starts being spent in schools, but when the local authority settlement is announced. There is a relatively short time between September and the date when the Government must make decisions about that. One of the things that I have learnt since becoming a Minister is that the figures are checked, rechecked, and double and triple checked, because as the hon. Gentleman said, key decisions depend on those figures.

I am told by civil servants that although they find it possible to carry out such checks in that time for the 6,000 secondary schools, they do not believe that at present they could do the same for the 20,000 primary schools. As my hon. Friend the Member for Kingswood remarked, at the start of the school year, there is some fluctuation before the numbers settle down, especially as primary schools may have a common enrolment date, but do not have a common starting date.

Nevertheless, we would be happy to reduce the time between allocation and count. If technology makes that possible in the medium term, there is nothing to prevent us from doing so. That is our wish. We have no ulterior motives, provided that I could promise hon. Members that the numbers would be as accurate as they are now.

The best that I can offer now is to say that I hear what all hon. Members have said. The issue affects other local authorities as well. The fact that the hon. Gentleman raised the matter tonight will serve as a reminder to me and help me to keep it in mind. When we can change the counting date, I have no objection to doing so, and nor do the Government.

Mr. Webb

I am grateful to the Minister for giving way. LEAs have a rough idea in September how many primary pupils they have to educate, as they have to pay the teachers' salaries, arrange for the contracts to be drawn up, buy the books and so on. Would it not be possible to get a provisional figure from all LEAs, with some penalty mechanism for LEAs that give an inflated figure? Is it not better to have the right sort of figures—I dread the phrase "the right ball-park"—rather than to use a figure from eight months before that turns out to be completely wrong? We could at least now set the date as April. I do not believe that it takes from January to November to get the numbers right.

Ms Morris

The hon. Gentleman paused after he said "the right", and went on to say, "sort of figures". He was correct the first time. It is better to allocate money on the basis of actual pupils, rather than on estimated pupil numbers. We have considered the use of estimates as an option, but that would create new bureaucracy to pay money back, claw it back and argue with local authorities about the accuracy of figures.

That was one of the issues discussed in "Fair Funding". On the whole, schools are not keen on using projected numbers. They would prefer their money to be allocated on actual numbers. The hon. Gentleman's argument has some validity, but there are strong arguments against it. It would affect our ability to move quickly if we paid out money to some local authorities and later had to claw it back.

The hon. Member for Northavon perceived correctly that I was about to move on to the other tricky point—what constitutes the standard spending assessment formula. I shall happily keep his point in mind. I shall also happily reflect and take advice on whether it is ever worth moving the timetable by only a few months. Making such a change is very much not a political decision, but a matter of the political machinery practising the art of the possible. No political impediment stops our receiving more accurate and more recent figures; no one has any such political agenda. As I now realise that the hon. Gentleman has an interest in the matter, I shall keep him informed of developments.

SSAs are a terribly complex matter. I realise that hon. Members know that SSAs are not—and should not be—determined to provide the same spending level for each pupil, but should ensure that the same education standard is available across the country, acknowledging the fact that the cost of providing education varies from one local education authority to another.

Additional education needs, providing free school meals, meeting small schools' transport costs in rural areas and labour costs in the south-east and in London are all factors that have to be considered. The hon. Member for Northavon cited two factors—ethnicity and single-parent families—as major elements in determining SSAs. The fact is that there are so many elements in determining SSAs that the process is an absolute minefield. Moreover, the debate on the relationships between those elements, too, is a minefield.

The hon. Member for Northavon said, for example, that ethnicity surely is not the key factor in determining whether extra resources are needed in a classroom. Interestingly, although ethnicity is a factor at some key stages, poverty becomes a greater factor by key stage 4. Moreover, the situation changes at each key stage and across the education system. Therefore—although it would not reflect real life—it would be good, and easier administratively, if everyone could agree on some factors in determining SSAs.

Mr. David Drew (Stroud)

As a kindred spirit—now that South Gloucestershire is back in the historic county of Gloucestershire—I can have some say in this debate, even if we are in a different education authority. My hon. Friend the Minister has been making a valuable point. I appreciate why the educational needs dilemma has not yet been resolved, as doing so might have made the poorest children in London worse off. However, surely there will be a need for a mechanism in the next three years to consider how we can manage change, given that additional educational needs seem to be one of the many ingredients for disparities and unfairness in the formula.

Ms Morris

I am grateful to my hon. Friend for his comments, and shall try to deal with them—particularly and pointedly—in a moment.

It is amazing that not one hon. Member or council leader queued up to tell me that his or her local authority's SSA was too generous. I smiled when the hon. Member for Northavon started his speech by saying that he would not be making a party political argument. I can tell the House exactly how the battle-lines were drawn in the discussions on SSAs: they were drawn parochially, according to a local authority's boundaries.

Even if we could have changed SSAs and offered funding protection this year, at a time of increased spending, some local authority leaders and local authority associations would still have been split on the matter, as they wanted also to increase their share of a larger cake.

As the hon. Member for Northavon will know, in the past few months the Government have been consistent in dealing with the matter. The bottom line is that, had there been general agreement on the matter among local authorities and local authority associations, we might have been able this year to make some progress in adopting an SSA that was accepted as being fair. However, there was no such agreement.

I feel strongly that we cannot fundamentally change SSAs every year—or even every three, five or 10 years—but that we have to get SSAs right. This year, despite all the effort that has been put into the matter and all the contributions that have been made, we did not feel that there was unanimity or that we could have made more progress. However, that is not the end of the debate.

I say to my hon. Friend the Member for Stroud (Mr. Drew) that more work needs to be done on that issue, and the Government hope to return to it over the lifetime of this Parliament. We have asked local authority associations to continue with their work, and we will continue to do so.

I represent a constituency in Birmingham, in the midlands, not a southern seat. I am not saying that the SSA is fair and equitable and can be defended on either pure educational grounds or even on the ground of giving opportunity to all children. We are all at one about that. I hope that, in this time of an increasing budget, we can seize the opportunity to achieve something that, although it is not perfect, we can all live with and that does a reasonably balanced job of treating our children fairly.

As a Minister, I have to live with that SSA formula, both this year and next year, but I want to do something about what I believe to be inequality of resource allocation. I must use the mechanisms that are to hand and, because of that, we have looked carefully at the money that does not come through SSAs, but through the standards fund and other pots of money over which the Government have more control.

I remind hon. Members who represent the South Gloucestershire area that, as well as the 7.2 per cent. increase in SSA funding, we are making £3.3 million available through the standards fund. That is 10 per cent. more than we made available for the local authority last year and it includes £500,000 specifically to reduce class sizes. Capital funding this year for South Gloucestershire is £900,000.

When the hon. Member for Northavon and I met, I thought that we would discuss performance tables in respect of allocation of resources because he was bound to say that South Gloucestershire is at the bottom of those tables. I do not deny that; it is clear that pupils in his area receive less funding on a straight SSA basis than any others.

Where we have flexibility, however, we are trying to put resources into certain areas. The argument is not about this year's underfunding; underfunding is historic, because the argument has never been tackled and these difficult issues have never been grasped. It is interesting to compare funding in respect of the standards fund. South Gloucestershire has received more standards fund allocation per pupil than more than 115 authorities, and more capital funding than more than 135 authorities. South Gloucestershire would appear in the top part of such a league table.

South Gloucestershire received 20 per cent. more money per pupil through the standards fund than the national average, and 75 per cent. more money per pupil than the national average through our support for capital funding. I know that that is a smaller stream of revenue and capital, but that was where we had flexibility this year and where we could begin to try to rectify some of the faults, which I agree exist, within the SSA formula.

Authorities that do badly under the SSA formula are stuck with that for the next two or three years, but it may be possible to find other ways of getting money into those local authorities. That may offer some reassurance—although big bucks, to use a crude term, are not involved—about the plight of local authorities that get a rough deal in SSAs, through no fault of their own and because of what happened in their area years ago.

Mr. Don Foster (Bath)

Will the Minister therefore confirm that the impact of what she has told the House is that, when using the flexibility that she claims the Department has to choose which of the 16,000 LEA bids made since the Government took office will be successful, the Department is using as one of the criteria for selection the position on the SSA per pupil league table? Is the implication of that that LEAs that are high on that league table are wasting their time putting in a bid?

Ms Morris

No. The criterion must always be the quality of the bid. The hon. Gentleman knows that when decisions are made, we always look at the overall picture. What will never be tolerated, however, is a bad bid—someone going through the standards fund to a local authority just to get the money. The key issue is that the Government's national agenda must be met. I am delighted if we can ensure that local authorities' needs are met through sources of Government funding, of which there are many.

Mr. Webb

Some of my constituents in Gloucestershire will say that we receive more capital funding because our schools are falling down. One school in my constituency has nets to catch the roof tiles so that they do not hit the children on the head, and home economics and science classes are taught in corridors. Another school has had to approach the lord of the manor for more land because it is overcrowded. I suspect that the fact that we have received more money from that bit of the pot simply reflects the continuing unmet need. My real concern tonight is about current expenditure—bread and butter money for year-in, year-out needs.

Ms Morris

I accept what the hon. Gentleman says. He was perfectly right in the first half of his comments: it is wrong that a school in his authority should have to have a net to catch tiles falling off the roof. I assume that the hon. Gentleman is not saying that that is not important, so he should not say that he is not asking for increased capital spending. If I were him, I would gratefully receive it and shout it from the rooftops with tiles on. Although the debate has been about revenue funding, we are discussing the whole picture.

This debate has been useful. It will continue because I sense great dissatisfaction among many hon. Members about how their local authority is dealt with in terms of SSA methodology. We do not want to change it to make it worse; we want to change it to reflect real needs, so that children throughout the country have a similar standard of education. Given that that is such a large task with huge implications, it is worth getting right. On that basis, I am entirely happy that we have not tackled it this year, but very much hope to return to it next year.

I am grateful to the hon. Member for Northavon for his comments. I shall reflect on them and keep him and other hon. Members informed if we are able to make further progress.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Ten o'clock.