HC Deb 01 February 2001 vol 362 cc557-64

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

7.26 pm
Sir Michael Spicer (West Worcestershire)

I hope that the Minister for School Standards will not respond like a parrot to my supplication.

There is no rhyme or reason to the present method of disbursing education funds in this country, except history. In Worcestershire, a Conservative-led local education authority historically ran an efficient and tight budget. It did so especially in the 1970s and 1980s, in contrast with Labour-controlled authorities. The spending patterns of its budgets were subsequently set in stone through the workings of the rate support grant formula, even though circumstances have radically changed since.

The formula is obscure and incomprehensible. It is based not on real needs or genuine costs, but on history and the perceived view that it would be unacceptable to rock the boat by changing the existing pecking order between LEAs. The dynamics of the position are that those who receive least receive relatively even less as time goes by. Thus Worcestershire is third from the bottom in a table that lists SSA per primary school pupil in 34 counties. In other words, it received the third lowest SSA increase in last November's round. That has happened not because Worcestershire's education needs are less than those of Dorset, Cambridgeshire or even neighbouring Gloucestershire or Warwickshire, but because that is the way it has been. Moreover, unless something changes, that is the way it will continue to be.

The fig leaf that is used in an attempt to give respectability to that procedure is the concept of the area cost adjustment formula, which is meant to compensate for different costs in different areas. It is nonsense, however, for at least two reasons. First, the largest cost element in education is, overwhelmingly, teachers' salaries, which are nationally determined and are the same for all areas. Secondly, even the marginal cost differences that are built into the formula are often spurious.

I cannot find any differences in cost or needs between, say, Wiltshire and Worcestershire, yet Wiltshire is 23rd on the county league table of secondary school recipients and Worcestershire is 31st. Nor can I find great differences between near-neighbouring Oxfordshire, which is in eighth place, and Gloucestershire, its neighbour—and, indeed, Worcestershire's—in 28th place. It is a dog's breakfast, and the Government know it.

I presume that that is why, on 30 April 1997, immediately before the general election, the then Leader of the Opposition declared in an interview with the Cambridge Evening News: We will review the area cost adjustment in time for the next financial year. Four years have passed, and all that has happened recently is the publication of a Green Paper on modernising local government finance. In that document, the Government appear to recognise the grossly distorted and unfair method of treatment that is built into the area cost adjustment formula and, therefore, into the disbursal of education expenditure. The Green Paper promises that the Government will present some concrete suggestions for remedying the position. However, they will not do that before 2003–04.

Meanwhile, even if we dismiss some of the cruder calculations of the additional amounts that schools in Worcestershire should receive when compared with the national average—the figures run into hundreds of thousands of pounds a year even for primary schools—under the current arrangements unless class sizes increase dramatically, budget shortfalls lie ahead. That is true even if they are unplanned. The capacity to raid repair and maintenance budgets, where they still exist, is running out.

The skill of government is the ability to differentiate between special pleading, which is undertaken for its own sake, and a genuine grievance. There is no doubt that the latter is true for education in Worcestershire.

All Governments have a duty to tackle such gross lack of parity in treatment. It is also sensible for them to do that. The citizens of this country will stomach an awful lot but they will never accept irrational inequality of treatment. That is shown by the hundreds of furious letters that my hon. Friends who represent Worcestershire constituencies have received on the subject in the past week or so.

Mr. Peter Luff (Mid-Worcestershire)

Is my hon. Friend, like me, experiencing the largest ever lobby campaign on any issue in his parliamentary career? I have received more than 1,000 letters protesting against a predicament that was bad four years ago and has got much worse.

Sir Michael Spicer

I agree and sympathise with my hon. Friend. I have received a similar number of letters. Indeed, my fax machine broke down. It has now been repaired and is spewing out more letters from unhappy constituents.

Miss Julie Kirkbride (Bromsgrove)

I want to put it on record that I too have received many representations. In my much shorter parliamentary career, I have never experienced anything like it. I suspect that my office has received 1,000 letters, which will of course all get a reply. That number shows the strength of feeling, of which I hope the Minister will take account.

Sir Michael Spicer

I agree with my hon. Friend. Even the masses of letters in support of foxhunting have been greatly exceeded by those on the issue that we are considering. I was trying to calculate how long it had been since I previously received such quantities of mail. I believe that it was in 1974, when there was a mass revolt against the rate rises that were introduced by the then Labour Government.

Mr. Michael J. Foster (Worcester)

Does the hon. Gentleman agree with the sentiment of a letter that was sent to the Parliamentary Secretary, Lord Chancellor's Department, my hon. Friend the Member for Wyre Forest (Mr. Lock), from a Conservative councillor in Bewdley? Mr. Stephen Groome said: I am upset that both my children and yours are disadvantaged by virtue of the fact that we live in one of the poorest funded Counties. The letter continues: The funding provided by the previous Government was derisory".

Sir Michael Spicer

That is a good cue for my next point. It is no good the hon. Gentleman or the Minister saying that they inherited the problem. Labour's rhetoric, to which the hon. Gentleman was doubtless party, was partly responsible for bringing the Government to power. It suggested that they would wave a magic wand over education. However, for Worcestershire, the slogan "Education, education, education" is a sick joke.

Education services in Worcestershire are being progressively run down on the Minister's watch. The Government are going to have to do better than simply publish Green Papers that kick the problem into the long grass. That is not good enough. I hope that the Minister will not spend much of her speech saying that this problem is someone else's fault. She is in charge at the moment, and the problem has risen to a critical level during her term in office.

Of course, it is general election time, and the Government have felt the need to be seen to be doing something to remedy the problem. Instead of setting out to change the basic formula, they have this week made a larger than average one-off payment to Worcestershire of £1.35 million. That is about £1 million short of the amount needed to allow schools to run a standstill budget compared with last year. Unless the county steps in with local taxpayers' money, schools that might have ended up with a deficit budget of, say, £50,000—as was the case in one of the secondary schools in my constituency—will now be able to cut that by half.

As for the revenue support grant and the area cost adjustment formula—the source of the inequality of treatment between local education authorities—nothing has changed. As it is, the gap between the recipients of the largest amounts and the smallest will continue to grow, and dissatisfaction and disenchantment will well up. No amount of temporary bandaging will put that right.

What is required from the Minister is a clear statement that the present mumbo-jumbo, masquerading as a rational formula, will be abolished and that it will be replaced by a procedure that can be clearly understood. When costs are set nationally, allocation of funds should be on a strict per pupil basis. When there are genuine differences in costs or needs between areas, they should be properly identified. I hope that the Minister will at least say that this is her intention, and that she understands the growing urgency of the matter.

I would also like the Minister to respond to one more point. Next Wednesday, 7 February, a large delegation of governors and head teachers is coming to the House of Commons. Will she please say that she or one of her colleagues will meet a representative delegation from that group?

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

I congratulate the hon. Member for West Worcestershire (Sir M. Spicer) on securing this debate. I readily accept that this is what might be called the hot political issue in Worcestershire. The Under-Secretary of State for Education and Employment, my hon. Friend the Member for Redditch (Jacqui Smith), is in Worcester tonight, so she cannot be with me on the Front Bench, although I know that she would otherwise have wished to be here.

I shall first respond to the request that the hon. Gentleman has just made about the meeting that is being held here next Wednesday. I received a letter today from a group calling itself parent governors. I had not realised that the group would consist of head teachers and governors. I told my office that I would be delighted to call in to the Grand Committee Room some time between 3.30 and 5 pm to meet them and listen to what they have to say.

Mr. Luff

I appreciate that this problem is not all the Minister's fault—it is also the fault of the Department of the Environment, Transport and the Regions. Will she put pressure on one of her ministerial colleagues in that Department to meet the group, which will consist mainly of parent governors, but also of some head teachers? It would be only a small group, and it would be most helpful if the Minister could do that.

Ms Morris

I cannot commit my ministerial colleagues, and I know that the hon. Gentleman would not wish me to do so. It is sometimes difficult to secure time at such short notice. On the two days before the meeting, I shall visit schools outside London and I would not have been able to attend a meeting on those days, although I should not have intended any discourtesy. I am sure that people will have heard what the hon. Gentleman has said, and that the invitation will be extended to my colleagues at DETR. I accept that SSAs are essentially a DETR responsibility.

I shall start on a note of agreement with the hon. Member for West Worcestershire. I am not here to defend SSAs; I am not prepared to do so. In his closing remarks, he spoke of a system of financing that was fair, transparent and flexible and that would acknowledge the needs of local areas. That is what we want as well.

Under this Government, the system will be changed. We are consulting on the matter at the moment. We really tried in our first year: we got everyone together from the Local Government Association, the counties and the urban areas, including London. The hon. Gentleman will not be surprised to hear that not one local authority leader—Tory, Liberal Democrat or Labour—is volunteering to say that they do well out of the present SSA structure. Therein lies the problem. London appears, on paper, to be exceptionally well funded. Representatives of London bodies come to the House and talk about the difficulties that they have with asylum seekers, and with people coming here without English as their first language. All those needs must be acknowledged.

I have said many times in Adjournment debates and outside the House that during our first year in office, when we hoped to achieve general agreement about changing the SSA system, we did not manage to achieve that agreement. We had a choice at that point: push a measure through, which we could have done with our majority and even though there was no consensus among local authorities, or wait, talk more, consider different models and try to get it right. I would sooner do the latter because getting it right is in the best interests of pupils, parents, governors and teachers. We will not be able to make a change again for a long time. The Conservative Government had experience of that. Changing the way in which education is funded year after year after year just confuses the situation.

The change to the formula will be massive and it has to be right. If making that change takes longer than we expected, I will make no apologies for that, although I am happy to acknowledge that I wish that we had been able to achieve agreement among local authorities in our first year in office.

When I was in opposition, I, too, received lots of letters from people in Staffordshire and Worcestershire about exactly the same problem. People have not begun to write such letters since 1997. We had big postbags before then, and the Conservatives did not make such a pledge. They did not even consider the SSA and did nothing to resolve what is essentially a difficult situation. I do not want to spend all my 15 minutes talking about that, but it is the truth.

The hon. Member for West Worcestershire is right that the formula is historic, but history did not begin in 1997. The formula has not served the people of this country well for many years, and that has affected his constituents and mine. Changing it is a tough job, but one that we are determined to do. I want to discuss general financing in Worcestershire.

Mr. Michael J. Foster

Before my right hon. Friend moves on to the current position and the future, may I take her back a step? Although there is consensus across the House about the need to change the SSA formula, is she aware that in 1991–92 Conservative-controlled Hereford and Worcester county council deliberately set a budget £5.4 million under education SSA? The consequence of that over the next 10 years was that children in Worcestershire were short-changed by some £42 million.

Ms Morris

My hon. Friend is right. He and my hon. Friend the Member for Wyre Forest (Mr. Lock) have worked hard and lobbied on behalf of their constituents in the county to get the formula changed. Now we know what the hon. Member for West Worcestershire meant when he described the previous finance figures as representing a good, tight ship with tight budgeting and tight financing. That they were, but as a result spending was below SSA and children did not get the investment that they needed.

That gives me the opportunity to say that, shamefully, secondary and primary funding per pupil in Worcestershire fell during the last four years of the Tory Government. There was no year on year improvement. The hon. Gentleman did not come to the House to discuss how much extra his area had received; it received less. That is why people are so cross in Worcestershire today. I understand that and feel for them. Their children are in school while education expenditure is increasing and they want a fair share of the extra money that we are allocating. They feel that they have got a rough deal, but let us be clear about the fact that the letters that they wrote before the election of a Labour Government in 1997 were about a real cut in funding, year on year on year. Under this Government, their argument is that they are not getting as big a share of a bigger cake as they would like. I have some sympathy with them on straight SSAs.

Sir Michael Spicer

There is no example that I can recollect, certainly in my constituency, of schools saying under a Conservative Administration, "We simply cannot carry on with our present budget." Under the Minister's Administration, that is exactly what is being said. It is absolutely outrageous. Her party came to power on the slogan, "Education, education, education", and it is hypocritical to take such a line.

Ms Morris

I am not sure where the hon. Gentleman was in the years before 1997. For many of those years, I taught in schools and I remember what happened under the Conservative Government. Year after year, there were teacher redundancies because of shortfalls in the budget. I do not think that Worcestershire's schools were different from any other schools in the country in having to cope with a reduced budget. Under the Government whom the hon. Gentleman supported, the amount of money per pupil fell, but it has risen under this Government. Those are not our figures. No one contests them. The hon. Gentleman must justify the history; I do not have to do so.

Expenditure is increasing. The soreness felt by Worcestershire's schools is about their share of a bigger cake. That is why there is an urgency about changing the formula. I cannot in all honesty explain why children in Worcestershire get less money than children in Wiltshire—I think that that was the example given by the hon. Gentleman. I do not know the exact figures for those two counties, but the system is irrational. He is right about that. It is a historic system, which does not serve us well.

The hon. Gentleman is right that we were elected on a pledge of "Education, education, education". We said that we would spend more on education than did our predecessors, and we have delivered. There is more money going into the SSA. There is an increase this year of £8.82 million, or 3.71 per cent.—not a cut, as there was under the Conservative Government.

More money is going into Worcestershire's schools, and I know that the hon. Gentleman will welcome, as the head teacher of Droitwich Spa high school has welcomed publicly in a letter, the £1.3 million that my right hon. Friend the Secretary of State made available last Monday, in acknowledgement of the fact that Worcestershire has had a difficult settlement this year. The money will go some way towards helping with that.

Mr. Luff

Will the right hon. Lady give way?

Ms Morris

I will, but this will be the last intervention that I take, because of shortage of time.

Mr. Luff

I have a letter from the head teacher of Droitwich Spa high school, in which she makes it clear that the extra £1.3 million is welcome. We all welcome it, but it is only a little over half the amount required to close the funding gap between what we have now and a standstill budget. Schools in Worcestershire are still facing a crisis, and the gap is growing between them and the national average for funding per pupil, as it has grown every year under the right hon. Lady's Government.

Ms Morris

The hon. Gentleman is right that the head teacher goes on to say that. I was going to deal with that. One of the things that has changed between the previous Government and the present one is that money goes into schools in many different ways. That does not happen just through the SSA, although the SSA is the major source of funding for schools.

Money is allocated through direct special grant, and Worcestershire's schools will receive £6.3 million in direct grant this year. That is worth an average of £20,000 for primary schools and £60,000 for secondary schools. It has been promised that that will be uprated by 2.7 per cent. to cover inflation for each of the next two years. The hon. Gentleman called for transparency. In fairness, we must look at the different routes for funding and the amount that Worcestershire's schools end up with, compared with what they would have received had the Tories still been in power.

I draw the House's attention to capital investment. One of the most shameful things that happened under the previous Government was the manifest under-investment in the school buildings in which our teachers teach and our pupils learn. The figures for Hereford and Worcester—the joint county before the split—show that in 1996–97, the last year for which the Conservative Government had responsibility for the budget, capital expenditure was £6.02 million. That is the figure for both counties.

In this year, in Worcestershire alone, the corresponding figure is £26.5 million—not for the two counties, but for Worcestershire alone. There is El 1 million as part of the new deal for schools, in direct grant—no borrowing and no interest to be paid by taxpayers in Worcestershire. A further £1 million has gone to the county in order to achieve our class size pledge. Money directly allocated to schools in terms of capital will increase over the next few years.

I am not seeking to defend a formula that ill serves the children of Worcestershire—that would be dishonourable and dishonest. I am saying that we are trying our best, with all reasonable speed, to change that. We are the Government who have given a pledge that that will change. We are the only Government who have set in motion a consultation system under which we hope to bring about change. I would sooner achieve that through consensus among local authorities than have one local authority at another local authority's throat, as is the case at present.

Despite that, children in Worcestershire now receive more money for their education than they ever did under the Government whom the hon. Member for West Worcestershire supported. Schools and buildings in Worcestershire are in better shape and are becoming fit for education in the 21st century, because the Government have invested in education. In that way, we have more than kept our pledge.

Question put and agreed to.

Adjourned accordingly at ten minutes to Eight o'clock.

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