HC Deb 09 December 2002 vol 396 cc22-36 3.32 pm
The Secretary of State for Education and Skills (Mr. Charles Clarke)

With permission, Mr. Speaker, I shall make a statement on the Government's education and skills plans for the coming three-year period.

In July, my right hon. Friend the Chancellor announced the outcome of the 2002 spending review. He stated that education spending will increase by an average of 6 per cent. a year in real terms over the three years beginning in April 2003. Following that announcement, my predecessor, my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris), published our agenda for change, which was called "Investment for Reform". This set out how we would match those extra resources with sustained reform to achieve our objectives of a world-class education and training system that meets the needs of individuals and the economy. I now want to tell the House more about these investment and reform plans.

With the exception of higher education, which will be the subject of an announcement next January, I am today announcing the details of our three-year settlement for the whole education and skills sector. I begin with the early years. The Government remain of the view that a strong early start is vital to continued educational success, so, as the Chancellor announced in July, we will be continuing our substantial investment in the early years, including our sure start programme, and funding a further expansion of 250,000 child care places.

Working together with my colleagues in other Government Departments, particularly in the Department of Health and the Department for Work and Pensions, we will continue to expand our sure start programme and to mainstream the approaches in those areas that we believe have been successful. As the Chancellor announced in July, expenditure on early years and child care will rise from about £1 billion this year to some £1.5 billion in 2005–06. Next year £300 million will be transferred to enable local authorities to provide universal nursery provision for three-year-olds.

I turn now to schools, which will form the subject of most of my statement today. The reforms that I am announcing will provide a simpler, fairer system. Alongside this, we are seeking a continued drive to raise standards in every school in the country. Last week my right hon. Friend the Minister for Local Government and the Regions announced the outcome of the review of local authority funding. As he announced, the national average increase in overall funding for schools and local education authorities is 6.5 per cent. Moreover, every local authority will next year receive an increase in funding per pupil of at least 3.2 per cent. The new system provides every local authority with a basic entitlement per pupil, plus more money for authorities with significant deprivation or recruitment and retention difficulties. Our three-year funding announcement means that we are giving local authorities certainty about their budgets in future years, so they can give schools indicative three-year budgets—and we expect them to do so. That will enable head teachers and governing bodies to plan and implement longer-term reforms.

As my right hon. Friend the Minister for Local Government and the Regions announced last Thursday, the Government are committed to allowing local authorities more freedom over the use of resources. Ring-fenced grants will form a reducing proportion of local spending, so on top of the £4.3 billion increase by 2005–06 in local authority general education spending, which we have already announced, substantial funds will be moved from central DFES spending to local authority spending. That will be an extra £500 million in 2003–04 and a further £800 million in 2005–06. That means that, by 2005–06, more than 92 per cent. of all schools funding will be allocated through local authorities in accordance with local priorities. That compares with 87 per cent. in the current year of 2002–03.

Thus we will end the ring-fenced grants from my Department for the following programmes in 2003–04: nursery education for three-year-olds, funding for infant class sizes, the school improvement grant, school inclusion-pupil support, performance management and induction for newly qualified teachers. In 2004–05, in addition to the above, we will do the same with grants for special educational needs, study support, golden hello payments, advanced skills teachers, school support staff, drugs education and teacher sabbaticals. We will also focus grants for the national literacy and numeracy strategies and the key stage 3 national strategy. The substantial increases in local authority funding that I have set out will enable authorities to take over the delivery of those important programmes in ways that meet local needs. Of course, we will closely monitor the effects of those changes.

From 2005–06, we will also reform the system for rewarding those good, experienced teachers who pass the performance threshold. The money for teachers who pass the threshold will be devolved to the schools budget in that year. In the new year, we shall announce further measures to strengthen performance management in schools and cut associated bureaucracy. We shall also discuss with all stakeholders measures to ensure that the allocation of money meets the cost of the threshold payments made by schools.

We will however continue with ring-fenced funding to provide national drive in some key areas. Three key grants will contribute to that aim. First, the leadership incentive grant will be £175 million a year for each of the next three years. We will provide £125,000 to each of 1,400 secondary schools in the inner cities and in challenging circumstances beyond. That money is being provided because it is clear that a good head teacher and leadership team are the key to raising expectations and achievement in schools. The grant is intended to support them.

That money will be used in a variety of ways, including strengthening poorly performing departments, helping strong departments to help other schools and buying in specialist advice on leadership or working together with other schools to provide leadership training. In the weakest schools in particular, the money can be used to change the school's leadership. One purpose of the money is to encourage local schools to behave in a more collaborative fashion. It will be for local schools to decide how best to use it to strengthen their leadership teams, but I will reserve powers to ensure that the weakest schools make effective use of it.

Secondly, the school standards grant, at £800 million in 2003–04 rising to £875 million by 2005–06, to be paid directly to schools, is intended to drive forward reform of the school work force. It will allow more and better trained teaching assistants to be employed to help the school team to work together more effectively. As we made clear in July, our substantial extra investment in the school standards grant must be matched by a commitment from unions and employers to a restructured teaching profession and a reformed school work force that is more flexible, diverse and focused on raising standards. We are making good progress towards agreement, but the extra resources will not be released until a satisfactory agreement is reached.

Thirdly, the standards fund—about £1.5 billion in each of the next three years—will enable schools to galvanise reform on standards, behaviour and choice. In 2003–04, that will allow us to support, for example, the following programmes: the key stage 3 strategy at £120 million, ethic minority achievement at £80 million, music services at £60 million, excellence in cities and excellence clusters at £290 million, and school support staff and training at £170 million.

As I announced a couple of weeks ago, we will provide sufficient funding for every school that fulfils the required standard to become a specialist school. The money will also provide support for primary literacy and numeracy. We are determined to build on the outstanding improvements that our primary schools have made since 1998. The national literacy and numeracy strategies have transformed standards but much remains to be done to achieve the ambitious targets that we set. We shall therefore continue to provide funding and support that is focused on schools which are under-performing by comparison with similar schools.

Schools will have the freedom to spend their standards fund budget on any purpose, provided that they deliver the improvements in standards, behaviour and choice that we seek. We have already given the details to local authorities and we want significant improvements in outcomes.

I am publishing today details of the capital funding that schools will receive to improve and modernise buildings. A typical secondary school will get £75,000 of devolved capital funding next year, increasing to £82,000 by 2005–06. That is part of a total investment in school buildings which, including private finance initiative credits, will increase from £3 billion in the current year to £3.8 billion in 2003–04, to £4.5 billion the following year, and to more than £5 billion by 2005–06. Although that represents a sevenfold increase in capital spending since 1996–97, too many school buildings have suffered decades of underinvestment. The extra amounts that I am announcing today include substantial extra resources to provide clean, modern and secure places for children to learn.

I have announced a real-terms increase in overall funding for schools of more than 7 per cent. from 2002–03 to 2003–04. That will be followed by annual real-terms increases of more than 4 per cent. and subsequently 5 per cent. That is a total of more than 17 per cent. in real terms over the three years of the spending review. It means an average real-terms increase in revenue funding per pupil of more than £1,000, from approximately £2,840 to £3,850 in the 10 years between 1996–97 and 2005–06.

I conclude with further education and skills. Its importance cannot be overstated. Developing our people's skills is critical to improving our productivity and hence to the country's economic and social future. We must transform the performance of the learning and skills sector and make it far more responsive to the needs of learners, employers and communities. We need to improve the quality of the sector and increase the achievement of those who study and learn in it.

The document that I published last month, "Success for All", sets out our work on the further education reform strategy and our challenge to the further education sector. We shall work closely with the Department of Trade and Industry to co-ordinate our Departments' work more effectively. We are investing to match our ambition. I have already announced, at the Association of Colleges conference on 19 November, £1.2 billion for reforms to further education. That forms part of the Learning and Skills Council's budget, which I announced last week. It will rise by £1.4 billion, reaching a total of £9.2 billion by 2005–06. That means an increase in total spending on skills from £8.6 billion in 2003–04 to more than £10 billion in 2005–06—a real-terms increase of almost 12 per cent. over the spending review period.

As the Chancellor made clear in his pre-Budget statement a fortnight ago, we face economic uncertainty and it is therefore more important than ever to continue to invest and reform to increase the skills of our people and improve our productivity as a nation. The substantial investment in education and skills funding that I announced today is a necessary but not sufficient condition for raising standards in our schools and colleges, thereby tackling the attainment gap and creating a world-class education and training system at all stages. That will be achieved only if, as well as investing, we reform our schools and colleges so that they genuinely fulfil every child's aspirations. That is the ultimate test of our success at the end of the spending review period. I am confident that, with the help of the millions of people throughout the country who are committed to our educational success, we will pass the test.

Mr. Damian Green (Ashford)

I am, as ever, grateful to the Secretary of State for advance sight of his statement. He knows that most of it was a series of re-announcements, including welcome news on early years and further education. I shall concentrate on the small amount of new material that he produced. It is clear that he wants to appear in a seasonally appropriate role as an early Father Christmas for schools. Sadly, the wrapping is more enticing than the contents of the package. Behind the rhetoric, the right hon. Gentleman is making artificially inflated claims for all areas of this country, and, in some areas, schools and pupils will rightly feel betrayed by the way in which he is fixing the distribution.

It is perhaps appropriate that the Secretary of State is making this statement on the day on which the Department has been forced to admit that it is missing more than half the targets that it has set itself on school standards. Even when the Government are in control of the figures, they fail to meet them. Perhaps the right hon. Gentleman will understand, therefore, why today's announcement will be greeted with an appropriate degree of scepticism.

I want to ask the Secretary of State about some of the issues that affect every part of the country. The first concerns the extra costs that his Government have imposed on schools, but which did not feature in his statement. Will he confirm that, next April, schools will have to find another £79 million simply to meet the employers' element of the national insurance increase that the Chancellor announced in his last Budget? Will the Secretary of State also give the House some idea of the scale of the extra money that will be needed to make up the value of pension funds for teachers and other local education authority staff—pension funds whose value the Chancellor has done so much to erode?

Will the Secretary of State also confirm that there is an element of double counting in the increases that he is claiming? Specifically, has money been taken out of the standards fund—where it was already available for schools—transferred to the LEA budget line, and then claimed as an increase in the money available to schools through the LEA? Schools may well feel that this is an act not of generosity but of accountancy. While the Secretary of State is contemplating the standards fund, will he also confirm that, after the Government's most strenuous efforts at deregulation and cutting red tape, the number of funding streams within the standards fund has been cut from 71 all the way to 65? Today, he says: Schools will have the freedom to spend their Standards Fund budget on any purpose—providing they deliver the improvements in standards, behaviour, choice we need … we are looking for significant improvements in outcomes. It takes some cheek for the Department to talk about improvement in outcomes on the day when it has admitted that it is missing most of its own targets. Will The Secretary of State explain what will happen to schools that miss their targets? Nothing happens to Ministers who miss theirs. Will he claw back the standards fund money from such schools?

Why has the Secretary of State not responded more to the real desire both in schools and LEAs for more local control of spending? He made much of this in his statement, but, frankly, he protested too much. Does he agree that, in 1997, the central ring-fenced grants were just 4.5 per cent. of the schools budget? His predecessors increased that figure to 13 per cent., and he has done nothing like enough to bring it down. Centralised control is blighting our schools, and when he preaches about reform, he should start close to home, in his own Department. While he is doing so, perhaps he could answer a question that his colleague the Minister for Local Government and the Regions failed to answer on Thursday. Why has £250 million disappeared from the schools budget between the Chancellor's spending review and this statement?

On reforming the system of performance-related pay, the Secretary of State said that, from 2005–06, the money for teachers who pass the threshold would be devolved to the schools budget. Will he give schools an assurance that that money will be available to them between now and 2005–06, particularly for the upper pay spine, which is causing severe problems in many schools?

Every school in the country has reason to feel that the Secretary of State is trying to sell them a false prospectus, but some schools and pupils will find that they have been singled out for unfair treatment at the hands of the Government. Last Thursday, it became clear that the Government were declaring war on the shire counties, and those areas come out of today's statement particularly badly. There are a number of examples of this, but I will stick to one that is close to home for me: the treatment of Kent. On the Government's own figures, the increase per pupil is 3.2 per cent., but the effects of the teacher's pay settlement, the pensions problem, and the national insurance increase mean that schools will be facing a cost increase of 7 per cent. just to stand still. So pupils in Kent, including poor pupils, deprived pupils, and pupils from ethnic minorities, will lose out. So much for New Labour's ridiculous claim to be have become a one-nation party.

What we see today is a classic new Labour con trick—shouting about what they are giving with one hand, while staying silent about what they are taking away with the other. It is a con trick the Government have tried many times, but they will find that the House and the British people have seen it all too often before. The Government will be judged by what happens in our schools, and after five years, it is a test that they continue to fail.

Mr. Clarke

Talking of con tricks, the hon. Gentleman is trying to con the country with his suggestions about my announcement today of a real-terms increase in schools spending of more than 17 per cent.—7 per cent. next year, then 4 per cent., then 5 per cent. It is extraordinary that he should do so given that we all know that he is not prepared to commit himself to a single penny of those increases—indeed, interviews given by his party leader and others in this period imply further reductions in education spending rather than the increases that we have announced.

As for the shire counties, I, too, represent a shire county seat—Norwich, in the shire county of Norfolk. The response of Norfolk's Conservative leaders to the settlement was to say that it was a good deal better than they had expected after the propaganda put out earlier by Conservative Front Benchers. I hope that the hon. Gentleman notes and appreciates, as I do as a representative of Norwich, the various aspects of our agreement that encourage local authorities to focus resources on real educational need in their area.

The hon. Gentleman raised some specific points. Yes, the pensions amount is fully covered in the way that I indicated. As for the amounts from the standards fund, we are reducing the number of elements in that fund. I set out reductions in that area continuing during 2003–04, 2004–05 and 2005–06. That is being done because we accept the argument from head teachers that we need a less complicated system of school funding and the removal of some of the separate streams. We are carrying that through, but I make no apology for the process that we have followed, which is to put in money to galvanise the system—for example, the primary literacy and numeracy strategy has made a significant material difference to education standards compared with the position that we inherited. That is also true of the question of greater local control—I stated the figures on that and will not repeat them; and on performance-related pay, I give the hon. Gentleman the assurance he sought.

In short, I think that this is a profound and solid statement, which shows the continuing commitment, not only of the Government over the next three-year spending review period, but of every school in the country. Schools will have a three-year programme that they can develop to raise standards. Never before have they had a three-year commitment in advance. That is a tremendous achievement and I am proud of it, and I am sorry that the hon. Gentleman can only sneer, rather than join in trying to raise standards in our schools.

Mr. Phil Willis (Harrogate and Knaresborough)

We will not begin our response to the statement in so churlish a fashion. We welcome any additional spending on our schools, and it is rather sad that the Conservative spokesman cannot simply welcome those additional resources.

We welcome the capital resources, but how much—what percentage—of the grant announced today is PFI capital? We welcome, too, the 250,000 child care places, but will the Secretary of State confirm that they will be quality places and not summer play schemes, as was the case previously? We welcome the £1.2 billion increase in the FE budget, but will the right hon. Gentleman confirm that that money will not meet the 14-to-16 element of the new 14-to-19 proposals, but will be entirely for use within the traditional FE sector?

We welcome the three-year budget certainty, but that certainty rings rather hollow in the absence of advance knowledge of results from the School Teachers Review Body or the manual pay round. Will the Secretary of State make sure that the results of those pay rounds are announced before the traditional December settlement, not afterwards? We welcome the move away from ring-fenced grants to core budgets. We regard that as an admission that previous Secretaries of State have got it badly wrong by trying to dictate from the centre how everything is spent.

Will the right hon. Gentleman confirm that, when the fog has lifted from today's statement, we will see a £400 million deficit on the figures announced in the comprehensive spending review in July, rising to £530 million next year? How much will be cut from the CSR amount in 2005–06?

Will the Secretary of State confirm that 9 per cent. of the 7 per cent. increase for schools will be met from council tax—[HON. MEMBERS: "Churlish!"]—and that council tax payers will therefore finance a significant part of the settlement? Will he confirm that schools will have to meet the costs of the £600 million transfer of pensions liability from the Treasury? Will he confirm that local authorities will have to meet the entire cost of special educational needs statements for 2004–05—[HON. MEMBERS: "Churlish!"]—and that the quantifiable resources agreed in the new code of practice simply mean the transfer of the budget to those authorities?

Where does the statement mention resources to meet the 100 per cent. pledge on specialist schools, which we welcome and the Secretary of State has guaranteed? Will he agree to drop the £50,000 entry fee for the specialist programme?

Finally, will the Secretary of State tell us why he has refused to accept the activity-led formula, which was agreed by all bodies from Ofsted to the teacher organisations, rather than returning to the historical base for the allocation of resources to primary and secondary schools?

Notwithstanding those few deficiencies, we welcome the statement. [Laughter.]

Mr. Clarke

It may seem uncharacteristic, but I welcome the welcome given by the hon. Gentleman. I do not think he was churlish; I think he asked fair questions, and in that general spirit I will do my best to answer them.

I cannot give details of the PFI proportion, but the overwhelming majority of schools' capital will continue to come directly from the usual sources. I will write to the hon. Gentleman giving him the exact proportion for each year. The 250,000 child-care places are "real places", in the hon. Gentleman's words; they are not manufactured in any way. There will be a genuine increase in the number of places in pre-school education. The £1.2 billion is extra money allocated through the learning and skills councils, which, as the hon. Gentleman will recall, will fund both sixth forms and further education colleges over the period. I hope that co-ordination will be possible. So the extra money will be provided for post-16 education, as indicated. As I have said, 14-to-16 education will be funded through the schools budget for key stage 4.

The hon. Gentleman is right: neither I nor anyone else can predict the outcomes of the review body's decisions. I can only say that, like other Ministers, we are trying to secure long-term agreements over two or three years, which we hope will help schools to plan effectively.

I cannot confirm the existence of the alleged £400 million deficit. As for council tax—I make a political point here—elected local authorities must decide what tax rates to set, and must make balanced judgments on services and on the taxes that they levy. Everyone will want to know what the various authorities decide, but I hope that they will make a proper commitment to funding services. It is not true that, as the hon. Gentleman implied, all the increases will be financed by extra council tax. They will be financed by mainline spending.

We are currently allocating £540 million to pensions directly. We are not asking others to provide the money.

The hon. Gentleman made a serious point about special educational needs. We decided, as a matter of principle and in the spirit of giving more money to local authorities, to allocate the 2004–05 SEN resources by means of the local authority grant settlement. That is because we believe that our mainstream approach is right. As the hon. Gentleman said, however, some people will have worries. Some authorities will take their responsibilities more seriously than others. We will monitor local authority decisions very closely, and report to the House in due course.

It is certainly our belief that dealing with special educational needs should be part of the mainstream function of any local education authority, and that it should take it up properly and carry it through. That is why we have made the funding change but issues could arise, as the hon. Gentleman suggests.

The funding for specialist schools is within the £1.5 billion for the standards fund that I have just announced but we have not put a figure on it because it is a demand-led programme, for the reasons that I indicated earlier. On the £50,000 entry fee, as the hon. Gentleman calls it, as I said in the House the other day, we are setting up a special fund to allow the £50,000 to be reduced in cases where a school demonstrates that it tried to build the relevant partnerships but simply did not have the cash. We will publish guidelines on that shortly.

The activity-led formula is an old chestnut and I am sure that we will keep going over it in the next few years in an entertaining fashion.

Jim Knight (South Dorset)

I very much welcome the great increases▀×the further increases—in education funding announced by the Secretary of State, but I am concerned about their distribution, particularly given the announcement last week. Sure start is welcomed in my constituency, where there is a detailed measure of rural deprivation—Dorset is 34th out of 34 shire counties—but that rigour is not applied in the new formula that was announced. I ask the Secretary of State to agree to meet a delegation from Dorset to discuss the effects of the settlement on our schools, which appear to be destined to continue to battle against an unfair funding formula.

Mr. Clarke

I am delighted that my hon. Friend, who I think I am right in saying—he will correct me if am wrong—is the first ever Labour Member of Parliament for Dorset, is arguing much more powerfully for his county than some of his Conservative colleagues in other parts of the county. The spirit of the Tolpuddle martyrs lives on and I commend him for that. I will be delighted to meet a delegation to discuss those questions. In all seriousness, we put in a floor on funding per student precisely for the reasons that he raises, and indeed for the reasons that I would raise as a Member of Parliament for another shire county, Norfolk. Whatever the issues of equity, it is important that there should be basic guaranteed minimum funding, and that was guaranteed last Thursday. I am happy to meet a delegation to discuss those issues in more detail.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

The Secretary of State's spending plans are of course welcome, but can he give an assurance that additional spending will be accompanied by major changes in the teaching methods and ethos of many of our state schools, which in aggregate are resulting in the United Kingdom education system coming 20th out of 40 in international league tables; a quarter of 11-year-olds not being able to read properly; a quarter of 15—year-olds saying that their lessons are blighted by noise and disorder; and half of 15-yearolds saying that they are bored by their lessons?

Mr. Clarke

I would not entirely accept what the hon. Gentleman says because, if we look at some of the international studies, British education does well, but I agree that change is necessary in a number of the areas that he has identified; that is precisely what I have been saying today. We need to move forward in order to generalise some of the changes that we have been developing—for example, advanced skills teachers. Therefore, we need change, but not in response to the pessimistic position that the hon. Gentleman is inaccurately describing.

Mr. Harry Barnes (North-East Derbyshire)

Have not ring-fenced grants been used well by the Department for Education and Skills to iron out some of the injustices that inevitably arise from the Local Government Finance Act 1987? Perhaps we should hold on to them until we get the new legislation to see how fair it is, and so that that avenue can be used to improve matters in counties such as Derbyshire, where grants are still deficient.

Mr. Clarke

I agree with my hon. Friend that those ring-fenced grants have been used well in a number of cases, for example, the primary literacy and numeracy strategy, and I could cite others. The impulse that the standards fund gave helped schools not only in his constituency but more widely to make profound changes. However, I also believe—it is policy right across Government—that we should try to devolve more decisions to local government.

My hon. Friend will know from his own county council and from others that local authorities have not been able to engage with our programme as fully as they would like. That is why we have tried to make changes gradually over the period of the spending review. We have retained some central grants funds, for the reason that my hon. Friend rightly cited, and we have tried to ensure that others are mainstreamed by being passed to the local government settlements, so that the policies and achievements to which he rightly refers can be made part of general practice. I would be happy to discuss with him further any of the specific matters about which he is concerned, but I do not think that there is a contradiction in saying that we have done well in many respects, but that now we should try to generalise that good practice across the whole system.

Mr. John Randall (Uxbridge)

Can the Secretary of State confirm that the excellence in the cities scheme will be extended to the London borough of Hillingdon to help us sort out our crisis in teacher recruitment and retention?

Mr. Clarke

I cannot confirm that, but I can confirm that Hillingdon, like other London boroughs, has the admirable and tremendous services of the Under-Secretary, my hon. Friend the Member for Enfield, Southgate (Mr. Twigg), and of Mr. Tim Brighouse, in trying to transform the entire approach of education throughout London through the London challenge approach. I acknowledge the implication of the hon. Gentleman's remarks—that improvements in education in Hillingdon are needed—but the performance in Hillingdon is not as poor as in some other areas of London, in which we have prioritised the issues taken forward. However, my hon. Friend the Under-Secretary will be happy to discuss with him precisely what measures he thinks would help to improve the situation in Hillingdon.

Mrs. Ann Cryer (Keighley)

Is my right hon. Friend aware that in three primary schools in my constituency, 95 per cent. of the intake of children at reception level do not speak a word of English—in fact, some of them have never even heard English? I therefore welcome the expansion of the sure start programme, to which he refers. That will doubtless help a great deal; it is very popular—in fact, I think that it is wonderful. Combined with universal nursery provision for three-year-olds, that will certainly help to decrease the number of children entering school without any English. I should also mention that parents bear some responsibility in terms of using English in the home, so that we can avoid the trauma of little children going to school without a word of English.

Mr. Clarke

I agree profoundly with my hon. Friend on the issue of sure start schemes, which have been tremendously successful. I have one in my constituency, and like that in my hon. Friend's, it has made a real difference. The challenge that we have to accept is not only to increase the number of sure start programmes, but to generalise the practice and experience of sure start, so that it spreads throughout pre-school education in her constituency and in mine. That is what we are trying to do.

I also take my hon. Friend's point about the importance of relations with parents. That is at the core of the sure start approach, and needs to be at the core of all our pre-school education. On language, all that I can say is that I heard what she has to say, and she makes an important point. Children of that age are obviously growing up in a society in which English will be the dominant language, and they should focus on speaking English well. That is an important part of the job—a job that exists both in school and in the home.

Derek Conway (Old Bexley and Sidcup)

Can the Secretary of State explain to the House whether he has reviewed the £50,000 barrier for specialist school status? It is an entrance hurdle that is proving a problem in many London boroughs, including my own of Bexley. On further education, which he touched on in his statement, can he assure us about the future of adult education colleges, many of which feel the squeeze? The issue concerns not just those who want to increase their skills for their working life, but the contribution to the community of those who have retired. Such people are increasingly feeling the squeeze because of the funding process for further education colleges such as Bexley college.

Mr. Clarke

For the third time, I am happy to confirm that we have looked again at the £50,000 figure, and in conjunction with the technology colleges trust we have set up a £3 million fund to help schools that want to be specialist schools. We have built the various partnership arrangements with a cash grant to reduce the £50,000 that they might have to pay, if they can demonstrate that they simply cannot raise the money by that means. We have heard the comments of many Members from both sides of the House, and of many schools, and have tried to respond constructively.

On adult education, the increase in resources for the Learning and Skills Council is extremely large. We believe that adult education is tremendously important, particularly issues of adult literacy and numeracy. Some 7 million people in this country still do not have basic level 2 skills. That is a blight on our system. A large amount of money is going into further and adult education because of the fundamental truth that we need to work much harder to ensure that people at all ages and levels, and of all skills, have the talents to meet the needs of the modern economy. That is where the resources will be targeted. That still leaves a place for adult education colleges of type described, which do tremendous work—I have taught in one myself—but the overall mission must be to raise the level of education and skills across the country, and in all areas.

Several hon. Members

rose

Mr. Speaker

I call Mr. Dennis Skinner.

Mr. Dennis Skinner (Bolsover)

I was having a very serious discussion with my hon. Friend the Member for North-East Derbyshire (Mr. Barnes), Mr. Speaker.

I am not in the mood to be churlish because I went to see a consultant about 10 days ago and I got good news. [HON. MEMBERS: "Hear, hear."] However, the important thing is that Derbyshire authorities, including the authority in the constituency of the hon. Member for West Derbyshire (Mr. McLoughlin), had a tremendous result of 12.5 per cent. in the local government settlement last Thursday. We hit the ceiling at 12.5 per cent. and Derbyshire county council got 8 per cent. There is no doubt that irrespective of any comments, the activity in education in the past three to four years has been tremendous, and we want to keep it going, especially in the coalfield areas that need rejuvenation. Keep up the good work—send the money to Bolsover.

Mr. Clarke

I am very grateful for my hon. Friend's remarks, and I am sure that the whole House will be pleased at his good news. He is right in what he said. We will keep the money coming, particularly to Bolsover.

Mr. Patrick McLoughlin (West Derbyshire)

Is it true that there will still be 65 separate avenues through which schools can claim money, even after the changes that the Secretary of State has made? Is he aware of the anxiety caused to many head teachers about the number of forms that they have to fill in? What is he doing to rationalise those forms and the system of grants?

Mr. Clarke

There are a couple of points to address. First, the vast bulk of money—about 99 per cent. of it—goes through six of those funding streams. It is true, as I announced in my statement, that we took six funding streams out this year, thus reducing the number from 71 to 65. I announced that we would take out another seven next year and further funding streams the year after. So we are steadily reducing the number of funding streams to reduce the complexity about which the hon. Gentleman and others have complained. He should not forget, however, that the overwhelming majority of resources are met through just six funding streams, and that is as it should be.

Mr. Chris Pond (Gravesham)

My right hon. Friend will be aware that before last Thursday's announcement, every head teacher in Kent was briefed by Kent county council that they should be looking at 8 per cent. cuts in budget. Clearly, the hon. Member for Ashford (Mr. Green) was at one of those briefings. However, we now know that, overall, Kent will see a 6.6 per cent. increase in its education funding, which I welcome. In the context of increased devolution of education budgets, can my right hon. Friend reassure us that he will ensure that local education authorities get the funding through to the schools that need it? Will he also congratulate Kent county council on giving the news this weekend that Lawn primary school has made such improvements that the council is to keep it open?

Mr. Clarke

I am happy to congratulate Kent on its decision on Lawn primary school. I addressed Kent head teachers with the Conservative leader of Kent county council a couple of weeks ago and we discussed many of these points in a friendly and fraternal way. I am glad that some of the scaremongering that people engaged in before the local government settlement was announced last Thursday has been proved to be demonstrably false. The fact is that we have provided an increase for every school in Britain. Conservative Members should praise us for that rather than carping at us.

Mr. Andrew Lansley (South Cambridgeshire)

The Secretary of State will recall that after five years of our pressing for it, the reform of the area cost adjustment has delivered a welcome substantial increase in the formula spending share for Cambridgeshire. However, the increase in the education formula spending share cannot be matched by grant because of the operation of the ceiling—only 70 per cent. of the notional increase is actually matched by grant. The Secretary of State referred to three-year indicative budgets. How is my local education authority to go about that process with the ceiling in place? Can it be lifted, for example, so that matters could be discharged in two years rather than three, or could we have indicative figures for the ceiling on grant changes in the two subsequent years?

Mr. Clarke

The reason that we have floors and ceilings—so-called—is that we want to ensure that none of the people who would lose most in any rejigging of the system lose as much as they might. However, that means that some of the people who might have gained most do not gain as much as they might. If we were to remove the ceilings for Cambridgeshire, we might have to remove the floors from some other counties, for example—

Mr. Damian Green

What about Kent?

Mr. Clarke

The hon. Gentleman brings Kent into the equation and that is indeed an example. Perhaps the hon. Gentleman and his hon. Friend the Member for South Cambridgeshire (Mr. Lansley) would like to discuss between themselves whether they want to remove the ceiling for Cambridgeshire and the floor for Kent, or keep the floors and ceilings in place. I shall be interested to hear their conclusion.

Mr. Peter Pike (Burnley)

Will my right hon. Friend ensure that his officials discuss with Lancashire county council at an early date the reorganisation of secondary schools in Burnley to recognise the fact that, for several years, we have had an admissions problem and that, this year, some parents set up a do-it-yourself school? Difficult decisions have to be taken. The resources are there, so will my right hon. Friend ensure that his officials discuss the matter with Lancashire?

Mr. Clarke

I am happy to guarantee that my officials will look at the situation in Burnley and if my hon. Friend would like to bring a delegation to meet the Minister for School Standards or myself to discuss the matter, we should be delighted to do so. It is important to acknowledge the fact that the existing resources—especially on the capital front—allow the resolution of some difficult long-standing issues such as those described by my hon. Friend. I hope that we can help to do that.

Mr. David Curry (Skipton and Ripon)

How all this impacts on local authorities depends on the relationship between the old system, with its large amount of grant, and the new formula. The purpose of a formula is to be redistributive, otherwise it would not exist. In Middlesbrough, for example, they appear to have gained on both the roundabout and the swings, yet a little further south in North Yorkshire there are serious concerns over medium-term funding, especially in relation to the diminishing standards fund and in particular the nursery grants for three-year-olds, which diminish after 18 months. Will the right hon. Gentleman ensure that essential funding is maintained over that medium term, even in the less visible guise of the formula?

While we are on the subject of direct grants, will the Chancellor of the Exchequer renounce his annual habit of dishing out money to head teachers in the course of his Budget as a special headline-grabbing formula? After all, that is a direct grant.

Mr. Clarke

If the Chancellor decides to give a little bit of money to head teachers throughout the country in his Budget next year, I certainly shall not try to prevent it. In fact, the right hon. Member for Skipton and Ripon (Mr. Curry) has given me an idea that I may pursue.

On the right hon. Gentleman's more serious point about nursery grants, I shall look into the comparisons that he gave. The mysteries of the local government grant funding system and the formulae that operate are designed to update the data based on the current situation in each part of the country. That is how the figures emerged. It might be helpful if the right hon. Gentleman dropped me a note about the detail of the particular points he raised. I should be happy to consider them.

Fiona Mactaggart (Slough)

May I start by congratulating the Secretary of State on the great news about universal nursery education for three-year-olds- I did not expect to see that so quickly. It will make more difference to success in education than many of the other things that he has announced.

May I press my right hon. Friend on the leadership incentive grant? Will he ensure that he uses those resources extremely carefully in areas such as mine where there are separate grammar and secondary-modern schools. Langleywood school has got out of special measures by good leadership and is currently working with Langley grammar school, with some teachers holding appointments at both schools. If we can use initiatives such as that to create partnership, I am sure that children in Slough who do not pass the 11-plus will get a better deal from their secondary education.

Mr. Clarke

I very much agree with my hon. Friend. The example that she has given from Slough illustrates precisely the type of collaboration that we are trying to encourage. My hon. Friend the Minister for School Standards is carefully considering how we can use the grant in a way that ensures that schools both receive the money and work collaboratively to deal with particular leadership problems. The kind of scheme that my hon. Friend the Member for Slough (Fiona Mactaggart) mentioned is helpful in that regard.

We want to avoid the money merely being put into budgets where there is no real leadership outcome. We are convinced that when schools work together—especially at post-16, but also in the 14–16 age range—we can make a major difference in their performance. We hope to use the money to encourage that.

Several hon. Members

rose

Mr. Speaker

Order. I have notice of a point of order from Dr. Harris.