§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell]
§ 10 pm
§ Mr. Eric Joyce (Falkirk, West)A couple of months ago, I read in bold print on the front page of The Times Educational Supplement that more—[Interruption.]
§ Mr. SpeakerOrder. Hon. Members should not walk in front of an hon. Gentleman who is addressing the occupant of the Chair.
§ Mr. JoyceMore than 9,000 teaching jobs were advertised in that edition of the newspaper. The figure was intended to catch the eye of teachers looking for new jobs. What struck me, however, was the amount of advertising revenue that the newspaper must have been receiving, mainly from the state education budget. Although the advertising rates varied depending on the size of advertisement taken out by schools and local authorities, it seemed reasonable, comparing rates with the size of the advertisements in the newspaper, to assume that the average advertisement cost more than £200. If so, by my reckoning, that single edition of the TES could have generated about £2 million in advertising revenue just from the teaching vacancy advertisements.
That certainly was a bumper edition of the TES, and teaching vacancies have seasonal peaks and troughs. It would be misleading, therefore, to extrapolate a year's revenue from a single edition. Instead, I asked the previous Minister for School Standards, now the Secretary of State for Education and Skills, how many teaching jobs were estimated to become available each year in England and Wales. I was given a figure of about 55,000, although that did not cover quite a large number of jobs of which the Department might not be notified.
If we therefore assume that the vacancies were filled at the first advertisement and that the average cost was only £200, that would be an annual revenue from teaching vacancy advertising in England and Wales alone of well over £10 million. However, there is a great deal of evidence to suggest that the true figure is rather higher. There is good reason to suppose that state expenditure on such advertising could be closer to, or even more than, £20 million, perhaps considerably more. As that is a great deal of money, it is worth expanding on both the demand and the supply side of the teaching recruitment market.
On the demand side, schools need to advertise in response to staff turnover and school expansion. In the past, when the numbers of teachers chasing jobs were great, it might have been possible to have 50 or more applications for just one job. Currently, however, that is usually not the case. In some parts of the country, advertisements for a maths post, for example, are likely to elicit only three to four applicants even before any short-listing process. In such circumstances it is quite usual for jobs to be advertised more than once.
Staff turnover rates vary across the country, but turnover in high-demand subjects can be very high indeed, as can turnover in schools in metropolitan areas. No school wants to be left with a gap at the start of the year, so in those circumstances advertising becomes very aggressive. Particularly in shortage subjects, each school 117 is aware that it is chasing the same few applicants as other schools in the area. Schools might use various tactics to attract staff, and an important one is the advertisement itself. It is not purely a matter of stating that a job is available; the advertisement needs to grab the attention of potential applicants and persuade them that that is the job and school that they want, rather than the 15 or 20 others that could be on offer.
How do schools achieve that? They do not do it by placing a dinky little advertisement. It is certainly a case in which size does matter. When teachers looking for new jobs are faced with four or five pages of adverts on their subject area, eyes tend to be drawn to the larger box adverts. These can cost between £300 and £500 each, which leads to an inflation of the costs borne by schools.
One school that I know of—one without significant staffing difficulties that no doubt spends rather less than others—has still spent more than £12,000 this year on advertising, 95 per cent. of which is through the TES. However, another has spent more than £40,000 in one financial year. While this must look like a small element of a school budget of well over £2 million—or, in Scotland, of a local authority budget that is many times that—the fact is that labour costs and other fixed costs dominate the budgets of all schools. The cost of advertising looms quite large with regard to that truly flexible part of a school's budget.
This year, some schools have received very welcome additional funding for recruitment and retention. For a school of more than 1,000 students, this could be as much as £25,000 to £30,000, depending on how the local authority wants to slice up the cake. Schools would like to spend this on funding imaginative ways of limiting staff turnover, by enhancing opportunities within the schools, for example, or by offering support for new staff, particularly in areas where the cost of living is high. But to some extent, scope for imaginative uses of this extra money is limited by the high cost of advertising. That is why driving down that high cost is so very important.
Schools and local authorities represent the main driver on the demand side in the teacher advertising market. When it comes to staff recruitment, schools and local authorities basically want three things: first, a cost-effective means of reaching a wide audience; secondly, scope for a quick response time as regards requests for information and the processing of applications; thirdly, in a broader sense, promoting the attractions of the school. At present, the plain fact is that the market is not delivering what schools and local authorities want.
Simply put, advertising is unnecessarily expensive and leads to unnecessarily long response and administration times. The main supplier of teacher vacancy advertising is The Times Educational Supplement, or TES. The overwhelming majority of expenditure by schools and many colleges is spent there. It is true that some rivals nibble at the margins, but there is no doubting the fact that the TES dominates that market. The market operates in a way not dissimilar to a monopoly.
During my own extremely modest business education, I was taught that a market environment consisted essentially of five elements: buyers, suppliers, competitors, threats of new entrants and threats of new products replacing the need for one's own. It is instructive to apply this elementary template to the case in point. 118 Buyers in this case are, on the one hand, schools and local authorities who pay for the adverts and, on the other hand, teachers who pay through the cover price to look for jobs. Since revenues from the former hugely outstrip the latter, it is the purchasing power of the former—the schools, essentially, and local authorities—that acts as the driver. If a sufficiently large critical mass of schools and colleges chose other mediums, the teachers would follow. However, they do not, because there is only really one prime supplier: the TES.
As I have mentioned, there are other niche suppliers, such as The Guardian, The Scotsman and the regional press, which focuses on higher education, part-time vacancies and so on. However, they lack the wherewithal and the habit of readership to compete head on with the TES. Indeed, even these rivals at the margins can manage to compete in the modest way that they do only because they are already in the business of producing and delivering newspapers in high volumes. That very fact restricts any new entrants to the market since, by general consent, it would not be viable to publish a competitor to the TES without the supply chain and economy of scale benefits afforded to that publication.
It is clear that there exists no effective competition in the market as it is currently structured. Teachers buy or borrow the TES because that is where the jobs are, and schools advertise there because it is where all the teachers are looking for jobs. The net effect of this on pricing is predictable, and it is exacerbated by competition between schools, particularly in shortage subjects.
There remains one component of the simple market environment that I have not yet touched on: the threat of new products entering the market that replace the need for one's own. This Labour Government created the position of Minister for E-commerce and are emphasising educational technology because it is plain that the internet has exciting potential radically to restructure certain markets, to the benefit of both consumers and the companies that seek to operate within those markets.
The market that we are discussing tonight is a classic case in point. I believe that, at present, there is a form of market failure in advertising for teaching vacancies caused not by any questionable practices—indeed, the TES is an excellent newspaper—but simply by an overwhelming dominance of a single supplier, combined with high barriers to entering the market.
The situation could be transformed overnight by using the internet. Many dotcom companies have failed recently, but that is primarily because of the speculative element of their business, with the supposed demand for novel products as well as methods of delivery. In the case of teaching vacancy advertising, we know that there is a predictable demand. Should the market make the leap from a heavy newspaper to the web pages, the other benefits of an internet business would apply, minus the risks faced by dotcom companies in other markets.
Some farsighted companies have seen this already. For example, Schoolsnet offers unlimited recruiting advertisement for schools for the princely sum of £300 a year, which is something of an improvement on the £12,000 to £40,000 that I mentioned earlier. Of course, that low price reflects the current relatively low demand, since without the critical mass of subscribers, very few teachers use the service; but it also reflects the low set-up 119 costs of the medium, and points the way, ultimately, to much lower costs for the buyers of the advertising service delivered.
I am not convinced that the structure of the market would necessarily change all that much, and I suspect that one or two suppliers would still dominate, because of the convenience for teachers of having most jobs advertised in the same place; but I believe that the threat of new entrants will be made far more meaningful with web-based advertising, and that will inevitably lower the costs for schools and local education authorities and remove the modest costs faced by teachers altogether.
It is difficult to miss the fact that the best internet site advertising teaching jobs is none other than that of the TES, which includes all the jobs advertised in the newspaper. A switch of the main medium would still leave the TES with a striking advantage over organisations such as Schoolsnet, gained from a critical mass of advertisers, and hence readers—or perhaps, in future, loggers on. Indeed, the site is so good and so complete that I suspect that News International already has that contingency well planned for—I commend it for that—but the fact remains that the internet provides meaningful scope for a critical mass of advertisers to switch together to a new competitor, which gives more power to their elbow. The switch could begin on a geographical or a subject basis or, more likely and more meaningfully, it could be agreed en masse among schools and LEAs to switch, or threaten to switch, at the same time.
I have spoken to a number of teachers and local authority administrators on the subject in the past few weeks, and it is abundantly clear to me that the conditions now exist such that a determined effort by budget holders to work together to secure a better deal would very likely meet with success. Schools would continue to compete keenly for the best staff, but with hyperlinks patching the main advertising sites with the schools' own, the cost of such competition would be much lower than at present, and perhaps restricted to in-house web design costs. Moreover, the dissemination of information about schools and jobs would take place instantaneously and applications would be progressed far more quickly, and without the expense of surface mail.
The time has come when, if the TES will not provide website advertising with direct links to schools' own sites at a cost much lower than that of advertising in the newspaper, someone else will. The Department for Education and Skills must now galvanise schools by urging them to seek the best deal and to work together to maximise their bargaining power with the present prime supplier—the TES—or potential future suppliers; and the time has come for the Scottish Executive to watch developments carefully, so that it can learn from practices down here, just as we learn from practices there.
Up to now, the DFES and the Scottish Executive have rightly left the decision on where to place advertising to budget holders at school and local authority levels. I would not want to see a departure from the principle that it is up to those budget holders to decide where to spend their money, but many of them would welcome advice from the DFES on the best way of securing partnership across the country and driving down the cost of advertising.
120 It is one of the notable successes of the Labour Government that all secondary schools and the great majority of primary schools are now on the internet. It is a fact of professional teaching today that teachers are comfortable with that medium. Teachers would welcome a change of format that would make the task of applying for a new job more user friendly and perhaps even enjoyable.
I end by reiterating the fact that I believe that the TES is an excellent newspaper that provides a broadly sound service, and I suspect that it is up to the challenge that lies ahead. There is undoubtedly scope substantially to lower the costs that I have spoken about, and it is now time for the DFES to encourage schools and local authorities to press that case with vigour.
§ The Minister for School Standards (Mr. Stephen Timms)I am grateful to my hon. Friend the Member for Falkirk, West (Mr. Joyce) for raising an issue of great topical interest in staffrooms and at school governors' meetings throughout the country. I know that, as a former teacher himself, he is well informed about such matters, and I congratulate him on bringing them before the House so early in this Session.
I shall address my hon. Friend's specific concerns about the problems of advertising for teacher vacancies, but I also want to underline the high degree of energy and investment now being directed at teacher supply, which will ensure that, over time, the problems of which the current advertising pressures are a symptom are resolved.
I do not, of course, speak for Scotland, but I hope that my remarks can convince my hon. Friend of the seriousness with which the Government view the issues that he has raised, and that our policies will help to avoid those difficulties, at least in the medium and longer term.
I acknowledge that the problem of filling teacher vacancies, and the associated costs, are real difficulties that concern the Government, but those difficulties are symptoms of a wider need that we are acting to address. Let me make it clear that the picture for teacher recruitment is by no means all doom and gloom. There are more teachers in post today than at any time since 1984, and 11,000 more than there were in 1997. In January this year there were 5,650 more than in January 2000—the biggest increase in a single year since 1976. There are also more than 44.000 extra education support staff compared with the number in 1997.
However, what I have said is not to be taken as an expression of complacency, or a suggestion that we intend to rest on our laurels. In the manifesto on which my hon. Friend and I fought the election, we committed ourselves to securing at least an extra 10,000 teachers over the next five years. Those increases will themselves, over time, reduce the demand for advertising, because many vacancies will be filled more quickly than at present. My hon. Friend was right to say that at the moment a large proportion of vacancies are advertised more than once.
Despite that massive improvement in teacher numbers, there are still more vacancies in the school system today. Schools are rightly using some of their increased funding—some £540 a pupil since 1997—to employ more teachers. There are 7,700 more posts in the system than last year. The number of teachers moving from post to post between academic years is what generates 121 advertising; there is a lot of "churn" in the system, with teachers moving from one post to another. However, our latest survey shows some 2,070 more real vacancies—using the definition that we have used for a number of years—in January 2001 than in January 2000.
It is also clear that there are particular points of pressure. Vacancy rates for most main subjects remain below 2 per cent., but the rate for maths, for example, is 2.1 per cent., and in information technology it is 2.8 per cent. It is in such shortage subjects that much of the expenditure on repeated vacancy advertising is being incurred.
We have taken further measures to address the problem. I have mentioned the pledge that there will be 10,000 more teachers by 2006. In the meantime, pay for all teachers has been raised by more than inflation for the third year running. New teachers now start on salaries of £17,000 a year outside London, and £20,000 in inner London. There are more teacher training places this year than at any time in the 1990s, and more than 6,000 more than there were 10 years ago. We have introduced £6,000 training bursaries and £4,000 golden hellos for shortage subjects to encourage more graduates into teaching. The number of school-based training places for mature career-changers on the graduate teacher programme has also been trebled—a massive increase—to 2,250. Each place attracts funding of up to £17,000 a year.
We are now funding more than 1,300 refresher courses a year for returners to teaching, and we are consulting this month on the proposed welcome back bonus of between £2,000 and £4,000 for teachers who return to the profession and take up posts in the maintained sector between Easter and Christmas this year.
The maximum time that an overseas-trained teacher can work in this country without gaining qualified teacher status has been increased from two to four years. A fast-track route to QTS is also available for experienced overseas-trained teachers who want to develop longer-term careers here. The recruitment and retention fund is providing £35 million this year to allow heads in high-cost or challenging areas to put together priority packages to help recruit and retain staff.
Those are just some of the ambitious measures that we are taking to invest in a larger, high-quality teaching force, and to bring about the long-term solution to the problems to which my hon. Friend rightly draws attention. I am sure he will agree that the difficulties he mentioned, and the costs involved, reflect difficulties in teacher recruitment. In another move, we also proposed in the Green Paper in February that we should offer to pay off over 10 years the student loans of newly qualified teachers in the five shortage subjects, and we proposed options for extra help for BEd students in their fourth years. A wide range of initiatives is in hand to seek to address the underlying problem, of which the matter we are debating this evening is a symptom.
I accept that that range of activity has not, as yet, taken away the burdens on head teachers who are trying to fill vacancies now. The Times Educational Supplement did indeed come in at record weight recently. Some 6,000 vacancies were advertised on 1 June, but it was down to half that number a week later. The TES is clearly fulfilling a need but it is not, it goes without saying, doing so with any Government recommendation to schools that they pursue that particular avenue alone. As my hon. Friend said, there are other avenues for advertising.
122 My hon. Friend rightly paid much attention to online advertising in his remarks, and it should certainly be cheaper and more flexible than paper-based systems. The number of websites dedicated to online recruitment is growing rapidly. The Government are leading the way in a number of areas, not least through the Employment Service, with its telephone and web-based services.
There are also a number of dedicated education suppliers in the market. My hon. Friend mentioned some and I shall not attempt to mention them all; I am not in the business of endorsing any particular product over and above any other. My hon. Friend mentioned Schoolsnet, and the TES has its own website. The Stationery Office has recently launched an online recruitment facility through its site at schoolmanager.net, which provides for a range of school procurement and recruitment needs. Earlier today, some 100 teacher vacancies were being advertised on the site across a range of authorities and in all types of school.
A range of other firms offers dedicated web-based facilities. Eteach was indicating some 4,700 vacancies on its site earlier today and StepJobs.com was offering more than 1,700. Reed is an example of a high street recruitment agency branching into education on its website. Indeed, Reed wrote to my right hon. Friend the Secretary of State recently to draw her attention to the attractions of the service that it provides in that area.
Local education authorities often co-ordinate vacancy trawls in their areas, providing schools with a free vacancy circulation. Some are backing that up with internet options as well. When we checked earlier this afternoon, kent-teach.com, for example, had more than 150 teacher vacancies from across Kent. Another local initiative is Timeplan's Teachers4London website, which places vacancies from across London online. About half the London boroughs are making use of that service.
An increasing number of private agencies are offering a full recruitment service to schools. That includes several who have more typically been providing supply teachers to schools requiring cover, an area of the market in which the online opportunities have grown significantly recently, making the task a good deal easier and more flexible for schools.
Closer to my Department, the Teacher Training Agency has recruitment strategy managers working in 97 local education authorities to help to provide a co-ordinated local approach to vacancy filling. Three are dedicated to helping schools in challenging circumstances.
My Department does not have any figures to draw on to estimate the current cost to schools of advertising teacher vacancies, nor to make comparisons with previous years. The figure that my hon. Friend gave is probably as good as any, and his assessment is a helpful contribution to the discussion.
Many of the options that have been referred to will make charges and not necessarily reduce costs for schools, but some are available free. My hon. Friend mentioned Schoolsnet, which has more than 250 vacancies advertised today, and makes a very modest charge. That demonstrates again the flexibility offered by the new medium, in linking visitors to information about the school posting the vacancy and generally providing the chance to access much more information than would be available from a typical newspaper advertisement. It is not surprising that the online alternative is proving increasingly attractive to many schools.
123 There is a significant number of players already in the field, some with services that are either free or cheaper than the most popular current avenues. Although The Times Educational Supplement remains popular for very good reasons—because of its stature, its widespread readership and coverage and its quality—many schools have found that it is not the only potential partner that is valuable in filling vacancies.
My hon. Friend suggested that there could be a role for the Government. We need to be clear that the Government do not recruit teachers. Decisions on what positions need filling and who to appoint are, for very good reasons, the preserve of head teachers and governors. There is a market operating in this area and, in our view, our role is to increase supply to that market. We are taking the steps that I outlined to achieve that.
Before intervening directly in the mechanics of the market, I should want to be sure that any Government-backed intervention would not simply provide another 124 website in an increasingly crowded market and that we assisted, rather than undermined, the prospects of existing providers, some of whose work I have mentioned.
My hon. Friend is right to draw attention to a significant problem. We are taking a range of actions to address the supply side. As teacher supply increases, particularly in shortage subjects, I expect the difficulties in recruitment, and thus the costs, to decline over time.
In terms of the symptom of increased teacher vacancies that is the increased cost of advertising, I am prepared to consider any constructive suggestions for helping schools to fill vacancies and reduce this additional call on their budget. That includes considering whether guidance to schools from the Department, along the lines of my observations tonight, would be helpful, and looking seriously at any arguments for a still more direct role.
It is in that spirit that I thank my hon. Friend for raising these important issues. He has helpfully highlighted the scale of the problem and some of the costs involved.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.