Education Spending

HC Deb 16 July 2002 vol 389 cc155-73 3.30 pm

The Secretary of State for Education and Skills (Estelle Morris)

With permission, Mr. Speaker, I wish to make a statement. Yesterday, my right hon. Friend the Chancellor confirmed that education is this Government's No. 1 priority. Since 1997, we have broken the cycle of underfunding in education, but we have done more than that: we have demonstrated that our policies of resources for reform work.

In 1997, we took the tough decision to focus our extra resources and reforms on early years and primary schools, because we knew that we had to get the basics right, and the results are there to see: more nursery places; 500 sure start areas; the biggest ever expansion in child care; and every primary teacher has been retrained in the teaching of literacy and numeracy. The result has been a huge leap in the performance of our 11-year-olds.

We also laid the foundations for raising standards in secondary schools. Again, where we committed resources for reform, we delivered results. The number of specialist schools increased from 181 in 1997, to 982 by September this year, and GCSE results are rising more swiftly in those schools. In our excellence in cities areas, results are increasing faster than elsewhere. Our record is one of investment and reform, and thousands of pupils and parents have benefited from it.

We know that it works, so it is now time to step up the pace of investment, matched by a step up in the pace of reform. In England, education spending will rise by an average of 6 per cent. a year over the next three years—a £12.8 billion increase. Total investment in my Department will be nearly £58 billion a year by 2005–06—more than £1,000 per pupil more in real terms than we inherited in 1997.

In the time available to me today, I cannot possibly do justice to every issue covered by my responsibilities as Secretary of State. I therefore intend to focus on the reform of secondary education, but when we have completed our consultation on our reform document for further education I will make further announcements. I can confirm that, subject to agreement to that reform, core unit funding in FE will increase by 1 per cent. per annum in real terms over each of the next three years.

In the autumn, we will publish a 10-year strategy for our universities, setting out how we will deliver the twin goals of excellence in teaching and research and widening access and participation. However, I can announce today that, as part of the Government's commitment to research excellence, we will substantially increase recurrent funding for research, raising the additional investment by more than £200 million by 2005–06. Alongside the investment in the science budget announced by the Chancellor yesterday, that will enable our research to be truly world class.

To carry on now to raise standards in our secondary schools, we need to make a decisive break with those parts of the existing comprehensive system that still hold us back. In saying that, I want to be clear about one thing: this is not a return to the old, failed two-tier system. The comprehensive principle was right and remains right. Every child is of equal worth. Ability is not determined by the family or background into which people are born, and all children have a right to an education that meets their highest aspirations and helps them to achieve their individual potential. That is as true now as it has ever been.

Again, without doubt, the move to comprehensive education brought progress. It has given more people the qualifications for higher education and more children have gained good GCSEs. It has produced an entitlement to a broad and balanced curriculum for all children. It has delivered huge progress in the achievement of girls. It has brought more life chances to so many of our young people.

Progress at secondary level has not been fast enough, however, and no one can say that what we have now is as good as we want it to be. Too many pupils are still going backwards between the ages of 11 and 14. Pupil behaviour often deteriorates at secondary level. Half of our 16-year-olds still leave school without five good GCSEs. The UK still has one of the greatest class divides in education. Too many schools are failing or coasting along without being able to stretch all their pupils.

We have not, therefore, achieved all for which we hoped. We need to be bolder and change our secondary system if we are to deliver high standards for all our children. We need radical reform in four key areas: in school structures; in school leadership; in teaching and learning; and in the link between rights and responsibilities both within schools and between schools and the broader community.

First, I shall deal with reform of school structures. In the past, the comprehensive system has been too uniform. There have been insufficient incentives for schools to improve, and excellence has been isolated and has not been used to raise standards across the school system as a whole. We therefore need a secondary system that instead promotes specialism and diversity, in which every school is honest about its strengths and weaknesses and is given clear incentives to improve, and in which our best schools are rewarded for levering up standards in the rest.

The new secondary system must have schools that are, in some respects, the same as each other. High aspirations, a broad and balanced curriculum, good-quality teaching and leadership, fair admissions and clear routes of progression are essential for every school. Every school also needs to be different, however, which is why specialist schools are central to our school reform. Their specialism is in addition to the national curriculum and encourages them to develop their own ethos and mission. Let me be clear: our aim is that, over time, every school that can be and wants to be a specialist school will be able to be one. I can announce today that we will increase the number of specialist schools to 2,000 by 2006. That will mean more than half our secondary schools will be specialist within the next four years.

It is not just a question of specialist schools. We will create at least 33 new city academies by 2006, and new extended schools. Each school will have its own mission and its own strengths, all contributing to raising standards. We also need a ladder of achievement to make sure that every school has clear incentives to improve—a system in which every school knows where it stands, is challenged to raise its level, and is incentivised and supported when it does so. Rather than having a one-size-fits-all approach, we need to acknowledge the truth that different schools are at different stages in school improvement and need different levels of challenge and support, freedoms and responsibilities.

On this ladder of improvement, weak and failing schools will be provided with extra resources, but those will be matched to tough improvement programmes. If schools do not improve, there will be quicker action to close them down, reopen them as academies, replace their leadership or enable them to be taken over by more successful schools. For coasting schools, there will be incentives to develop school improvement plans and work towards specialist status. For good schools, such as our specialist schools, training schools and extended schools, extra resources will be matched to the development of real centres of excellence in each school. For our best schools, there will be new resources and new freedom. but those will be matched to new responsibilities to improve the school system as a whole.

As a result of that ladder of improvement, a vital new principle for our new secondary system will be that, for the first time, we will use our best schools and head teachers to lever up standards in the rest. That is why we will encourage our best schools to expand. That is why we will promote our best schools to take over and run weak and failing schools. That is why we will provide incentives for our best schools to federate and improve standards in our weaker and coasting schools. That is why we will reward our best heads for taking on new roles as chief executives of clusters of schools.

Today, we are announcing that we will designate 300 advanced schools over the next four years. The schools will be charged with helping to lever up standards in our weaker schools and will have the resources to do so.

It is not only school structures, however, that we need to reform. Leadership is essential to the success of any school. We have already established the national college for school leadership as the world's first institution dedicated to identifying and training excellent leaders in our school system. The college will make sure that every new head is properly qualified, and that existing heads are properly supported and trained with access to mentors from outside education. The college will take on new roles in developing a new generation of transformational leaders.

We recognise that it is vital to secure the best possible leadership for the schools that face the toughest challenges. Next year we will introduce a leadership incentive grant to ensure that excellent leadership exists in our most challenged secondary schools. The grant—about £125,000 per school per year—will be paid to about 1,400 secondary schools in excellence in cities areas and excellence clusters, and to schools in challenging circumstances outside such areas. Where schools are well led, the grant will be paid directly with no strings attached; where leadership is weaker, heads and governors will need to agree a development plan with the directors of education in their local authorities. When necessary, and if it is in the best interests of a school and its pupils, the plan will include the replacement of the head teacher.

The third area needing reform is that of teaching and learning. The realisation of every child's potential is what all teachers want for their pupils and what all parents want for their children. Increasingly, the new specialist secondary school system will be able to tailor education to the needs of individual children; but that will require a radical change in the way in which teachers use their expertise and their time, in their professional development and in how they use technology—in fact, in how they do their job.

We have already been discussing with the profession how we can bring about those changes: now we can back up the discussions with resources. The money that schools receive through the standard spending assessment will rise by 3.5 per cent. in real terms in each of the next three years. On top of that record sum, the Chancellor has announced a substantial increase in the schools standard grants, paid directly to schools. The grant will increase by £325 million in 2003–04, and by £375 million in each of the following two years. That means that from next year direct payments will rise by £50,000 a year to at least £165,000 for a typical secondary school in England. Direct payments to a typical primary school will rise by £10,000 to at least £50,000.

That money, together with the increased general funding, can be used at head teachers' discretion. Let me make it absolutely clear, however, that the extra schools standard grant is conditional on reform of the way in which schools work. It must be matched by a commitment across the schools sector to a restructured teaching profession and a reformed school work force: more flexible, more diverse, and focused on raising standards.

We need commitment to new professional roles for teachers. We need commitment to new roles for school para-professionals, enabling them to take on new tasks in schools and to support teachers. We need commitment to an improved pay and performance management regime that rewards excellent teaching and eliminates poor teaching. In the autumn we will set out our more specific proposals, and the process for achieving the necessary agreement.

Finally, we must strengthen dramatically the link between rights and responsibilities. The new system needs to capture not only what schools can do for themselves, but how parents and the wider community can play their part. We must have zero tolerance of indiscipline in schools. Today I can announce a significant expansion of measures taken earlier this year to tackle poor behaviour and crack down on indiscipline. We have already seen the success of learning support units, on-site centres that can better deal with the small minority of pupils who cannot settle and who disrupt others in the classroom. As part of a national behaviour strategy to be launched in the autumn, we will provide learning support units for every school where they are needed. There will be more police on site at our toughest schools, if heads agree to that. Outside schools, truancy sweeps will be extended.

More broadly, however, I want to break down the walls and do more to help schools become a central part of their communities. We will therefore develop new extended schools that will provide a range of services, along with education, on the same site.

Moving to the new comprehensive ideal means higher standards, zero tolerance of bad behaviour and a greater choice of good schools for parents. The Government have made their choice. We have chosen to make education our No.1 priority, and we have backed that choice with sustained investment on an unprecedented scale, matched by reform involving unprecedented ambition. We have a proven model of reform; we have the best teachers ever in our schools; we have the resources and the ambition to achieve the change. A world-class education system is what we aim for, and that is a prize well worth winning.

Mr. Damian Green (Ashford)

I am grateful to the right hon. Lady for her characteristic courtesy in giving me advance sight of her statement. I welcome the extension of city academies and learning support units—two Conservative ideas that deserve to flourish under this Government.

The right hon. Lady said that she wanted to help schools, but we already know that she is flexible in her use of language. We read in today's newspapers that she deliberately used different language when she negotiated with the Prime Minister from the language that she used with the Chancellor of the Exchequer before yesterday's statement. I commend her ingenuity but, unfortunately for her, the British people are less easily fooled.

Today, the right hon. Lady has talked the language of believing in the comprehensive principle. Last week, she told the Daily Mail that the comprehensive school was a "worn out vehicle". Could she tell the House which is her real view? Her Back Benchers need to know whether to believe what she says to them in the House or what she says to the Daily Mail. It is this gap between rhetoric and reality that haunts the statement she has just made. She uses words and phrases such as "radical reform", but the reality is that she is travelling ever further down the path of central direction, second-guessing from the centre and nitpicking interference in our schools.

Today's statement will not promote any improvement in what parents worry about. It will not help to solve the crisis in discipline that has seen 130 teachers seriously injured in violent incidents in schools in the past year. The measures that she has announced will not compensate for the Government's consistent undermining of the authority of head teachers—an undermining that some of her announcements today will simply make worse.

The statement will not help teachers to spend more time in the classroom teaching; indeed, it will hinder them. The Secretary of State already sends 4,500 pages of guidance and advice to every school every year. Has she estimated how much extra paperwork will be generated by the changes that she has announced today? This is not the real reform that our schools need.

The Secretary of State talks tough about closing schools that miss their targets. She wants to sack teachers who miss their targets, so let me ask her about her targets. What about truancy? In 1998, the Department set a target to cut truancy, and the target was strengthened in 2000. However, this year, the old target was scrapped and replaced with a new one that aims to achieve a reduction 70 per cent. less than the original target. Does she accept that that is an appalling example of double standards? If teachers miss a target, the teacher gets sacked; if Ministers miss a target, the target gets sacked.

The centrepiece of the statement is the introduction of new types of school. Does the right hon. Lady accept that the fact that schools will seek to jump through these new hoops to get the extra money will inevitably lead to a further increase in red tape? What has she got to say to the head teacher, Janet Smith from Lealands high school in Luton? [Interruption.] Labour Back Benchers groan at the mention of head teachers; they do not want to hear things from the real world of education. What has she got to say to—[Interruption.]

Mr. Speaker

Order. Please allow the shadow spokesman to be heard.

Mr. Green

Labour Members never like to hear from head teachers, who know the truth of what is going on in schools. Janet Smith is quoted today as saying about the Chancellor's spending plans: It's always been tied up, attached to this initiative or that scheme. I need to be trusted to decide what my school needs. Is she not exactly right?

What about the practicalities of the Secretary of State's proposals to lever up the best? Many good heads are good precisely because they concentrate on every detail of what happens in their schools. Her proposals would take the best heads out of the school and make them strategic chief executives of half the schools in the area. What evidence does she have that that is the best way to improve all those schools that she would not touch with a bargepole? People will worry that the proposal is a gimmick that will do more harm than good. It will especially concern parents who have children in the schools with the good heads that she is taking away.

What is the logic behind concentrating on 300 schools out of 25,000 to solve the crisis? Would not it be better to focus directly on the failing schools, addressing their problems, rather than concocting this half-baked mess, which heads will not welcome? After the 300 advanced schools, the next tier is the 1,400 schools that will receive the leadership incentive grant. Will the right hon. Lady reassure the House that the distribution of the grant will not be manipulated for party political purposes in exactly the way that the distribution of grant to local education authorities will be?

For a statement that was billed as setting the course for education policy in this Parliament, there are several glaring gaps. There is nothing about reducing exam overload in secondary schools or slimming down the national curriculum. The Secretary of State accepts—indeed, she promotes—further delay in finding a policy for our universities, where morale is even lower than it is in the school sector among both students and teachers. Does she accept that her dithering over student funding, on which we were promised a decision early in the new year, has contributed to the collapse in morale? She said little about further education, where morale is even lower than it is in the universities. What has she done today to simplify the system in which colleges need to cope with 73 different funding streams? She said nothing about vocational education, which has been a key failure for generations of children in this country.

The statement is a sad waste of an opportunity by the Government. Instead of retreating from the path of dictating to our schools, they have chosen to go further down that route than ever before. When will they learn that micro-management from the centre is not the way to create world-class schools? The right hon. Lady talks about diversity, but it is an imposed diversity: "You can do what you want as long as the Secretary of State approves." That is a sham diversity.

I will disappoint Labour Members by saying that we are not in principle opposed to spending more on education. [Laughter.] Let me repeat that in case they did not hear the shadow Chancellor say it yesterday: we are not in principle opposed to spending more on education. But money without real reform will be wasted, as it has been over the past few years. There is an alternative vision for our schools, which the Government have rejected. In that alternative vision, heads control the discipline policy, teachers concentrate on teaching, not form filling, and parents know that the school is concerned with their children's needs, not the latest gimmick from the Government. Sadly, the Government have rejected that vision and chosen the dead hand of central control. This is not reform; it is a recipe for continued crisis in our schools.

Estelle Morris

Quite honestly, one is left wondering: if the Conservatives are not opposed to spending money in principle, where were their principles during 18 years of Tory Governments? They certainly did not turn that principle into the reality of spending.

I listened in vain to hear whether the Tories support the extra money for schools and are in favour of the direct grant that will provide an extra £50,000 for secondaries and an extra £10,000 for primaries. I listened in vain to find out whether they support the leadership grant, without strings attached, to 1,400 secondary schools. I listened in vain to find out whether they approve of a ladder of improvement, whereby every school is incentivised to achieve at high levels. The truth is that not only do they have no policies, but they have stopped believing in investing in education.

The hon. Gentleman is bothered about the number of pages sent to schools, but I can think of five pages that we could not send to schools that appear in "Conservative Education: Breaking the Link", which was published last week. The document seems to have taken five pages to conclude that there is no clear correlation between spending and results. In principle, the party is not opposed to spending money; in practice, it does not actually spend it; and in reality, it does not believe that it brings about improvements in results. That is what we have got from the hon. Gentleman, and that is why after 18 years of performing according to those rules, he and his party are no longer trusted to run this country's education system.

I turn to a few of the points that the hon. Gentleman made. He must listen carefully and understand a statement that says that the comprehensive principle is right in practice—the belief that every single child matters, that one's ability is not determined by family income and that every child has the right to the highest aspirations in a school system that is geared to meeting them. The hon. Gentleman repeated the view that comprehensive schools, as structured, do not sufficiently deliver that comprehensive principle, and they are a worn-out vehicle for doing so.

The difference between the Government and the Opposition is that we believe in the principle. We believe that every child matters, that every school should deliver and that every child, not just a few, should have the right to an education that can deliver for them. That is the challenge that we take on and that is the nature of our higher ambitions and our aspirations. It is also why in 1997 we were right to turn our back on a school system that had failed too many people and delivered for a few, at the expense of too many children and their families, in too many communities.

We have made significant progress, but we are honest enough to admit that we have not made as much progress as we wanted to. If we are to have a vehicle that can deliver even more reform and higher standards, we must improve it.

The hon. Gentleman talked about money with strings and about head teachers not having flexibility. The 3.5 per cent. extra increase in SSA goes to schools with no strings attached, to spend as they wish to meet their development plan. The leadership grant for those schools that are well led, which will be the vast majority, goes to schools to spend as they wish with no strings attached, as is also the case with the schools standards grants. We are not only putting more money into schools, but devolving it to the front line and ensuring that those schools with good leadership can play the accountability system and spend the money as they see fit.

We will work with those schools that do not have the leadership in place and that are not as strong as they should be to raise standards and to guarantee to every parent that money going to those schools will also bring about reform and high standards. The hon. Gentleman is right—money without reform does not work. In our good schools, we will put in the money and they can handle the reform. In our under-performing schools, we will put in the money and the support, so that together we can deliver reform.

Mr. Phil Willis (Harrogate and Knaresborough)

We, too, are grateful to the Secretary of State for allowing us sight of the statement half an hour before we came to listen. It was worth coming just to hear the latest Tory U-turn on spending—that makes four this week.

This package has all the hallmarks of a Reader's Digest prize draw: people think that they have won until they examine the small print. Yesterday, we had a proud statement about extra grants to primary and secondary schools; today, we have the small print, which says that the grants are conditional on schools meeting certain criteria. Similarly, leadership grants were announced, but today we have the small print, which sets out criteria.

The Secretary of State must recognise that although she is right to say that simply putting money into schools will not resolve all their problems, managing every school from her office is not the way to improve matters.

To rely on a Government policy of naming, shaming, controlling and sacking hardly unites the profession or makes it want to raise standards.

Why is there nothing in the statement about the two crucial issues affecting schools? Yes, there is a little bit about discipline, but there is nothing about any new policy initiative to tackle the problems facing our schools. Let us talk about the other big issue: the number of teachers going into our schools. Evidence produced this week by the Teacher Training Agency showed that the number of mathematics teachers entering the profession was down by 30 per cent. and that of science teachers by 25 per cent. There was not a single new proposal in the statement to deal with those key issues.

On ideas about specialist schools, I apologise sincerely to the Secretary of State for saying that she was setting up a two-tier system, because today it is a three-tier system, or perhaps even a four-tier system. How will super-specialist schools, as they will now be called, be chosen and funded? How will we guarantee that the children who need extra resources and would benefit from the initiative can get into those schools? Can the Secretary of State tell the House why, at the end of the Labour Government's second term, 40 per cent. of our secondary schools will not come into any of those categories and will receive fewer resources, presumably because they are the bog standard schools that Alastair Campbell has talked about?

Why is there nothing about further education in the statement, apart from a 1 per cent. increase in funding? Fourteen to 19-year-olds have been identified as a key sector, yet FE, we are told, will get a 1 per cent. increase—we have not been told what strings are attached. We welcome the universal expansion of education maintenance allowances—[HON. MEMBERS: "Hurrah!"] He pauses. How will those allowances be paid for? Will the Secretary of State guarantee that they will not be paid for by removing the universal access to child benefit, as the Chancellor wanted to do two years ago, or by raising tuition fees and interest on grants? Will she make sure that both those things do not happen?

Finally, the Cassells report recommended a 28 per cent. target for the increase in modern apprenticeships, and we are delighted that the Secretary of State included that in her statement. Will she make it clear to the House that that target will not simply mean a re-badging of other provisions, but will be a genuine target to get 28 per cent. of young people into modern apprenticeships by 2004? There is a great deal in the statement and we welcome the extra resources, but please do not tell everybody how to do their job.

Estelle Morris

I am grateful that the hon. Gentleman acknowledged and welcomed the increase in resources. We have spent many more pennies than his party has promised at successive general elections, and have delivered our pledge.

I shall deal with FE and HE, which were mentioned by both the hon. Gentleman and the hon. Member for Ashford (Mr. Green). We are always faced with difficult decisions. My Department has a wide range of responsibilities and deals with education from the cradle to the grave. I decided that the statement should be about secondary education, because I wanted to do it justice and have said all along that it was one of the main priorities of the spending assessment. So that there is no misunderstanding, let me say that the statement was not intended not to value further or higher education. We have decided to make a separate announcement on further education once we have completed consultation on the reform document that we launched some weeks ago, in recognition of the importance of that document.

However, I wanted to send a clear signal to people in further education that extra funding is available as part of the comprehensive spending review, which is why I made an announcement about the 1 per cent. annual increase in real funding now and did not hold it back until the autumn. That was a tough decision—the hon. Member for Harrogate and Knaresborough (Mr. Willis) will do as he wishes, but I hope that the FE sector will not regard it as diminishing its responsibilities. Equally, with higher education, I decided, rightly or wrongly, that I wanted to look at long—term funding for higher education, student finances and ways in which to extend participation and value research and excellence. To split it up would have been bitty. That is the decision that I took. Neither decision is meant to diminish the part that both play in our education system.

I want to go over two key points, but first I shall give the hon. Gentleman an assurance about modern apprenticeships. We were extremely grateful for the Cassells report. What has come out of that is a better modern apprenticeship than we had before. We are keen to promote and extend modern apprenticeships to encourage as many young and not-so-young people as possible to enter them. It is not our intention merely to badge something else to reach that target. In the months ahead, we shall say more about our ambitions for those who follow the vocational route. I know that the hon. Gentleman and I share at least the wish to improve that, and I hope that he will accept from me our commitment to improve modern apprenticeships and to retain the modern apprenticeship as a high-status vocational route.

The hon. Gentleman and I differ in two areas. He may not accept it, but if he looks at the grants that have been made available today, he will see that there are far fewer strings attached than in the Government's first term. I say that partly at my own expense. If he goes through the grants one by one, he will find that in the vast majority of cases, and in some cases at all times for some schools, the grant comes without strings attached.

I shall be clear about why I have made the two provisos. I see no point in putting extra money into a school that does not have a leadership that is geared up to spend it effectively. I shall defend that, otherwise at the end of my time in this post, people will say, "You put in the money, but you did not bring about the change." There is always a tension between giving the money to those who can spend it and letting them do it, and supporting those who cannot and making sure that they spend it effectively. I feel that we have got the balance right.

We might disagree on my decision to hold back some of the increase in the special grant until we get the work force agreement. The grant would not go out until next April anyway. I am hugely heartened by the approach of the trade unions and their representatives in the education service to the talks that we have been holding over the past few months. I have every confidence that we will come to an agreement, but make no mistake: I need to fund that work force reform, and that money has now been announced. I have no intention of letting it go to schools unless I am assured that it will bring about the biggest prize—a remodelled teaching work force.

On the advanced schools incentives for improvement, the hon. Gentleman says that there is no incentive for improvement, only strings, and he does not like advanced schools and specialist schools. He must accept that those are incentives for improvement. We are on a journey. I hope that in 10 years' time, we will have reached the point where every school that is able and wants it is a specialist school.

We must start somewhere, and at every opportunity that we have had as a Government, we have increased the number of specialist schools and we shall continue to do that. That is where the incentive for improvement is in the system. It is not a two-tier system, because it holds out that hope and ambition for every single one of our secondary schools.

David Taylor (North-West Leicestershire)

I congratulate my right hon. Friend on articulating so clearly the links between resources, reforms and results. There will be a warm welcome in North-West Leicestershire secondary schools—I am a governor of two: Ibstock community college and Ashby-de-la-Zouch grammar school—for the 3.5 per cent. increase in SSA funding year on year.

Will my right hon. Friend look closely at the review of the SSA formula? Three of the four options would leave Leicestershire worse off. The grant needs to bridge a gap of 6 or 7 per cent. relative to the average county and 13 per cent. relative to the most generously funded county. Will she make it clear to her colleagues in government that any review of the formula that leaves Leicestershire worse off will run entirely counter to the warmly welcomed statements that we heard yesterday and today?

Estelle Morris

I expect that my hon. Friend will make representations to the effect that the one option by which Leicestershire apparently does well is the one that he prefers. He is entirely within his rights to do that. The matter is out to consultation. If one makes the arguments about the SSA consultation document, one must make them about the formula, not about whether this area or that area is better or worse off. The formula must be fair. That is the key criterion. I understand my hon. Friend, and no doubt I would do the same on behalf of Birmingham, but the debate must be about the formula, as it is that which dictates the outcome. All that I would say is that the leadership grant and the increase in the schools standard grant are not weighted for any of the things for which the SSA formula is weighted. I remind my hon. Friend that, as ever under this Government, we are talking about a larger share of a larger cake. Under the previous Government it was always a larger share of a diminishing cake.

Miss Julie Kirkbride (Bromsgrove)

Following the point made by the hon. Member for North-West Leicestershire (David Taylor), can the Secretary of State, as a Birmingham Member, explain why every year in her patch all the children in secondary schools get in excess of £500 more per pupil than those in my patch? Under the proposed SSA formula, that situation will become even more extreme. Why is that?

Estelle Morris

I shall let the hon. Lady into a big secret. People in my patch got more money than people in her patch when the Tories were in power as well. That's life. The difference between the two Governments is that we are trying to do something about it, whereas the Conservative Government did nothing about it. [Interruption.] Let me give a word of warning. There is life beyond the SSA formula. I have been talking about a new structure of secondary education—a lot of new money going into schools, wherever they are and whatever the funding formula. I understand the importance of the SSA formula in areas such as Staffordshire, Leicestershire, Nottinghamshire and Worcestershire. The consultation is out, with four options for people to comment on. In due course, we shall receive their representations and arrive at a decision.

Helen Jones (Warrington, North)

My right hon. Friend rightly stressed the lack of progress made by many children in the early years of secondary education. Can she assure me that the flexible staffing that she wants to encourage would facilitate the use of expertise from the top end of primary schools in the early years of secondary school? That could be beneficial to many children and make the transition easier.

Will she tell me whether she envisages that schools in the middle of constituencies such as mine will qualify for the leadership grant? They do not qualify under many of the other categories that she mentioned, but they are nevertheless in challenging circumstances—although the authority as a whole might not show up in many of the deprivation indices.

Estelle Morris

I entirely support my hon. Friend in saying to heads that they should consider the option of linking with primary schools and using year 6 teachers for year 7. I say that because when I visit schools that have done that, staff speak highly of the results that have been achieved. It is the schools' decision, but we want to encourage them to work in partnership. Before 1997, the atmosphere was not such that schools would share their resources and good ideas. That is one of the major changes in climate that we have helped to bring about since 1997. I thank schools for their generosity of spirit in increasingly being prepared to share their good work and good ideas with others.

On my hon. Friend's second question, some schools in extremely challenging circumstances are outside local authorities that measure up in terms of free school meals. That is a dilemma, and we want to target that group. Without giving assurances about particular schools in the middle of her constituency, I can say that we have made allowance for some schools outside excellence in cities areas to be included for a leadership grant.

Mr. John Redwood (Wokingham)

I welcome any extra money going directly without strings to schools in my area, and I welcome the idea of more specialist schools. Maiden Erlegh school in my area is developing as a centre of excellence in arts and St. Crispins school in Wokingham would like more Government support to develop in technology. Does the Secretary of State agree that in a secondary school it is important that a head teacher should have taught all the pupils in the school in at least one year in one subject, so that he or she knows the school better and is aware of the pupils' academic aptitudes?

Estelle Morris

I would not dare to be so prescriptive as to tell head teachers in which years they should teach. I have a genuine difference of opinion with the right hon. Gentleman about that, although I take his point seriously. If a school's governing body had decided what was right for the school in terms of a head teacher's background, of course I would value that opinion. I go to schools where the head teachers know the name of every pupil, and if they have taught in every year, of course that is a strength. I hope that the right hon. Gentleman accepts that some governing bodies choose a different model of leadership and that they should have the freedom to follow that route.

Mr. Tam Dalyell (Linlithgow)

Could we acknowledge the significantly excellent settlement for the science budget? Will the ministerial team also turn their minds, however, to the intractable and growing problem of the dependence on short-term contracts in both universities and scientific establishments? Scientists do not do their best work if they are for ever fussing, understandably, about their personal future in the short and medium terms.

Estelle Morris

My hon. Friend is right. I know from my visits to universities and from people involved in research that part of the underfunding of recent decades has resulted in short-termism in relation to contracts. Some of the announcements made by my right hon. Friend the Chancellor yesterday will go some way towards addressing that problem. We shall not be able to solve all the problems when the Department makes further announcements on the future of HE, because there is no magic wand to restore the funding that has been cut from universities over the past two decades, but I hope that we shall begin a journey of improvement towards increased sustained investment in our universities.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

According to the House of Commons Library, the increases in expenditure in England between 2002 and 2005–06 will be £12.8 billion—a 28.5 per cent. increase—whereas in Wales and Scotland, the increase will be £1.9 billion, a 21.6 per cent. rise. That is a 7 per cent. discrepancy. Will the right hon. Lady explain and justify that difference?

Estelle Morris

As the hon. Gentleman knows, the allocation to Wales is worked out by means of some historic Barnett formula. That is the nature of the system, and the explanation as to why the amounts of money going to Wales may seem somewhat different from those allocated to England.

Mr. Gerry Steinberg (City of Durham)

May I say how delighted I am with the huge investment in education? It is great news. I have to say, however, that I am a little sceptical about the principle of so many specialist schools. I want to put to my right hon. Friend two questions that I am asked virtually every time I am in my constituency. Does she agree with the teachers who tell me that the amount of bureaucracy that they have to deal with really affects their work load, and consequently prevents them from raising standards? What do we intend to do about that? The second question relates to university lecturers, as my right hon. Friend would probably expect, as Durham university is in my constituency. When does she intend to ensure that university lecturers receive a substantial pay increase, bearing it in mind that they have dropped back by some 40 per cent. in the past few years?

Estelle Morris

I tend to think that teachers use the term "bureaucracy"—as do I—as shorthand for extra work, extra demand and extra pressures. That does not always involve paperwork, although I accept that there is a lot of paperwork in the system now. I have always accepted that the Department has a responsibility to do better than we do, and constantly to strive to cut it back. Although we have put extra flexibility into the standards fund, we still have fairly complex reporting arrangements. That is why we have decided, only this week, to write to schools shortly to say that they will be required to report on expenditure from the standards fund only once a year. That will result in a sizeable cut in the amount of bureaucracy to which they are currently subjected. So, we must do better, but we do try, and we are doing better.

This is a huge and complex system. We want to invest money in reform and, because we have a responsibility to ensure that the money is spent well, we must have an accountability mechanism in place. I entirely accept, however, that we must do more to make that process leaner.

On university lecturers, we put extra resources into universities last year so that they could begin to reverse the trend of underfunding. For the first time, they saw an increase in their funding after the diminishing resources that they had received year after year. It will be up to the universities, but I hope that university lecturers' pay will benefit from the settlement that we have been able to award this year.

Mr. Stephen O'Brien (Eddisbury)

While I understand where the money announced today will be spent, the Secretary of State will be aware that the Education Bill now going through Parliament contains provision for private companies limited by guarantee to provide educational services. Some of those companies will inevitably fail from time to time. Will she confirm definitively whether the taxpayer will be the ultimate guarantor in such arrangements, whether the companies will be indirectly guaranteed by the local education authority, or whether she will simply allow those companies to go to the wall?

Estelle Morris

There was a lengthy and very constructive debate on school companies during our consideration of the Lords amendments to the Education Bill yesterday. The assurance that the Minister for School Standards gave to the House was that schools wishing to set up such companies must obtain the LEA's permission. That will act as the safeguard. If we want to free up schools and encourage them to innovate, sometimes we have to allow them to have different structures in which to do so. I am on the side of the hon. Member for Altrincham and Sale, West (Mr. Brady), who on Report welcomed companies as an innovative way of raising standards and devolving responsibility to schools.

Ms Bridget Prentice (Lewisham, East)

Does my right hon. Friend remember hearing the Opposition spokesperson say that we do not particularly like listening to heads? The head teacher whose pupil, Fiona White, is doing work experience with me, tells me that he has already targeted the extra investment going to his school. The head teacher to whom I spoke last week confirmed that she now has a full staff for the coming year. The head teacher to whom I spoke the week before was delighted with the money that has gone into the capital programme. If the Opposition spokesperson does not want the money going to schools in his constituency, there are plenty of head teachers in mine who would be prepared to take it off his hands.

While my right hon. Friend is transferring that money to Lewisham, will she explain more about the excellent idea of extended schools and the help that they will give to the poorer communities in constituencies such as mine?

Estelle Morris

I am grateful to my hon. Friend for taking on a year 10 student, I suspect, for work experience. Probably more of us should do that, as it is very important.

I, too, have found that head teachers have very much welcomed the grant. I do not want to sound complacent, because I know that some heads face great challenges in recruiting for September, but the excellent school that I was at in Chelsea this morning had also recruited to full complement. We need to get a balance in our discussions and acknowledge that there is much that is good in our schools and much that has improved. Many heads and teachers truly value the resources that we have put in, and have spent them to good effect.

Extended schools will gain approval from all parties. Schools are sometimes the only place in the community that offers professional advice and support and has the space and equipment to serve people. It is wrong that they should be available only from 8.30 am to 4.30 pm. We plan to make them centres of their communities in urban and rural areas. I have heard ideas ranging from having a health centre on site to having the local post office there. I know that a local police station in the north-east has an outpost at a school. Schools are part of the community. Their core job is teaching pupils, but there is no reason why we cannot have joined-up services that go beyond education, and extended schools will be funded to do that.

Ann Winterton (Congleton)

I welcome the Secretary of State's emphasis on diversity in education. Will she give an undertaking to consider the particular circumstances of Sandbach school in my constituency, which I believe is unique in that it is an independent comprehensive school where all the pupils are paid for by the state? It wants to retain that status. Will she investigate whether we can resolve the problems that face it?

I welcome the extra expenditure on education, but what can the Secretary of State say to Cheshire parents about the share that they will get under the funding formula? Will they be worse off, or will they be considerably better off, and is it not time that the fair funding formula situation was resolved?

Estelle Morris

I am aware of Sandbach school, because it is an anomaly within the system. I think that the former Minister for School Standards visited it only earlier this year to have discussions with the head. Because I am not aware of the technicalities, may I resist answering the question from the Dispatch Box but promise to answer it in the near future?

Irrespective of the funding formula, Cheshire will get its extra share of the schools standard grant, which is not weighted, which is one of its benefits for areas that consider themselves underfunded through the formula. All the hon. Lady's schools will get an increase in revenue and capital, subject to our agreement on the release of the grant. It is well worth her looking at the consultation document, and I know she will, because she is an assiduous representative of her constituents on the matter of education, as I know from the many letters that I receive. I look forward to hearing her representations. Formulae cannot be the answer to everyone's problems, but it is important for us to have a thorough debate and come to the best conclusion we can.

Mr. Colin Pickthall (West Lancashire)

Will my right hon. Friend explain exactly what she means by one-size-fits-all schools? Perhaps a list of them could be made available in the Library, because I have never come across one. How does she propose to prevent the specialist school system, as she envisages it, from becoming progressively two tier or three tier—or perhaps even four tier—and increasingly selective?

Estelle Morris

On the one-size-fits-all issue, of course, teachers always think that their school is special; they know the ways in which it differs from neighbouring schools. No one is saying that such differences do not exist, but as I have always said, the perception of comprehensive schools is that of sameness and uniformity. The differences that exist are not celebrated; they are not outwardly visible to parents and to those in the wider community. My point has always been that—as I made clear in the statement—schools do indeed have different strengths, but we do not make the most of them. We do not incentivise schools to use those strengths, and we do not reward them for developing them. In terms of the difference of opinion between us, part of squaring the circle is acknowledging that schools do have different strengths, but that the comprehensive system seems to flatten and hide them, rather than raising and cherishing them, and incentivising more schools to celebrate their differences.

On the two-tier system, it is always difficult to get from where we are to where we want to be, but my hon. Friend should bear it in mind that, over time, every school that wants to become, and is capable of becoming, a specialist school will be able to do so. It is in order to get to that point that we have made more resources available every year. If we did not change—if we were not brave enough to take that risk—our school system would not deliver what my hon. Friend and I want. I should also point out that the ability to select by aptitude is available not only to specialist schools but to any secondary school that feels that it has a specialism.

Bob Russell (Colchester)

Will the Secretary of State confirm that the quality of teaching accommodation is important? If that is the case, will she hazard a guess as to how many temporary demountable classrooms will be replaced at the end of four years? After five years of a Labour Government, there are more demountable classrooms in my constituency than there were in 1997. I suggest that she start with the St. Andrews infant and junior school, which has 11 demountable classrooms.

Estelle Morris

I do not blame the hon. Gentleman for making representations about schools in his constituency—that is his responsibility and his right. However, I suspect that there are few—if any—Members of this House who cannot point to significant capital investment in schools in their constituencies, regardless of the political party that they represent. The figures show that £700 million was invested in capital in 1997, but by the end of this spending review that will have risen to £4.5 billion. Because we do not run such matters from the centre, it is up to local education authorities to prioritise the schools that need repair. If the hon. Gentleman wants me to look particularly at the school that he mentions, I shall do so, but I suspect that his first port of call should be the local authority. That will explain why that school has not been prioritised in the past four years.

Ms Karen Buck (Regent's Park and Kensington, North)

A few years ago, under a Conservative Government, half of all secondary schools in the Tory flagship council of Westminster were failing in terms of special measures or serious weaknesses; now, none are. That is a tribute to many people, but certainly to the strategy and investment of this Government.

The key factor for the majority of pupils is to be taught in schools with a mixed intake, but inner-London schools rarely have such an intake. Can my right hon. Friend assure me that she is doing everything possible to direct the resources necessary towards meeting the needs of inner-London schools? In some cases, there is a 50 per cent. turnover between key stages, two thirds of all pupils receive free school dinners, and two thirds speak a language other than English. Indeed, up to 70 different languages are spoken in the home. Those schools need a mixed intake and additional resources. In welcoming the strategy and the resources outlined by my right hon. Friend, I ask her to guarantee that inner London will receive the attention that it deserves.

Estelle Morris

I take my hon. Friend's point about the difficulties caused by pupil mobility and by the presence of pupils with a range of challenges in one school. She will accept—as hon. Members from Staffordshire, Leicestershire and Worcestershire know already—that local authorities in inner London receive significantly more funding than those elsewhere. The Under-Secretary with responsibility for London schools—my hon. Friend the Member for Enfield, Southgate (Mr. Twigg)—and I have announced the beginning of a discussion on London strategy. We want to work with local authorities and London Members to raise standards.

I hope that my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) and I do not disagree about mixed intakes. I do not think that they guarantee good schools. Good-quality leadership and teaching do that, and I do not believe that using Machiavellian tactics to ensure that a school's intake is mixed is a way of guaranteeing high standards. However, some schools' intakes mean that they need significant extra resources and support. We need new ways to solve old problems, and I look forward to talking about that in the next few years.

Mr. Roy Beggs (East Antrim)

The shortfall in education funding has had a crippling effect on schools throughout the UK. I welcome the fact that the Government have made education their No. 1 priority. My colleagues and I in the Ulster Unionist party want every child to achieve his or her full potential. I welcome the measures being taken to eradicate poor behaviour and ill discipline in schools. I publicly thank Her Majesty's Government for the extra funding that has been made available to create additional pre-school places and to improve childcare provision, which we have always supported.

I am a former vice-principal of a secondary school that produces high achievers every year, and I am at present a trustee of my local grammar school. I have to challenge the Secretary of State's assertion that the comprehensive principle in education is right for the UK in general. I have much for which to thank Her Majesty's Government, since although I was not privileged to get the paper mill scholarship to the local grammar school in 1947, I did go to that school in 1948. I then managed to go to teacher training college between 1953 and 1957. I therefore believe that the system in Northern Ireland has kept doors open and afforded opportunities so that children can progress.

Are not the Government denying children's individual differences, rather than respecting them? Should we not encourage excellence by retaining the system that is in place in Northern Ireland, which provides the best opportunity for all our children?

Estelle Morris

That is clearly a devolved matter for the Northern Ireland Assembly. My responsibility is to make clear my principles, and the foundation of the Government's policies in respect of their responsibilities in England and elsewhere. However, I listened with interest to what the hon. Gentleman said.

Mr. Tony Lloyd (Manchester, Central)

I also congratulate my right hon. Friend on her statement, on what is a tremendous and significant day for the most deprived areas in this country. However, does she agree that the real test is ensuring that specialist schools do not cream off the best teachers and the pupils who are most easiest to teach, with the result that non-specialist schools become the sink schools in our inner-city areas?

Will my right hon. Friend describe the mechanism that will put an end to the massive problem of teacher rotation? That problem—of better teachers moving on when they get the chance—particularly affects schools in inner-city areas. How will today's statement begin to stop that?

Estelle Morris

I agree with my hon. Friend about the real test with regard to specialist schools. However, those schools did not bring about a system in which some schools attract children with high prior attainment. That has always happened—there has always been a division between strong schools and weak schools. Some schools have found it easy to attract pupils while others have not. The challenge is to change that, and we see the specialist school as a means to that end. This is about trying to build a system with incentives for every school to improve.

In the city of Birmingham, where my constituency is located, many schools in the inner city have striven for specialist school status. They have a huge number of children on free school meals and who have special educational needs. I know that that is the same in my hon. Friend's constituency. Our measures act as an incentive not just for the schools serving affluent areas but for others as well. Is not the test of specialist schools that they are as open to schools that serve deprived areas as to those that do not? Secondly, it is important that we structure them so that, with their strengths, they lever up performance elsewhere in the school system. On those two aspects, which are fundamental to our reform, I pledge that that is the case.

On my hon. Friend's second question, if we put in more support so that teachers are free to teach and to do their job, I think that that will keep children in school. If teachers have classroom assistants, bursars, administrative assistants, laptop computers and good school leaders, the children may love it. It is the paraphernalia around teaching the kids that gets in the way. I hope that much of what we have announced today will make those schools better places to work and to teach.

Mr. Patrick McLoughlin (West Derbyshire)

Paying direct grants to schools was a very imaginative proposal by the Government, and the fact that it was built on by the Chancellor yesterday is to be welcomed. Would the Secretary of State care to go one stage further in her quest for diversity and reintroduce grant-maintained schools?

Estelle Morris

The main difference is that the previous Conservative Government paid the grants only to some schools, whereas we are paying it to all schools.

1. BILLS PRESENTED
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1. PRIME MINISTER (OFFICE, ROLE AND FUNCTIONS) (No. 2) 58 words
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2. CRIMINAL EVIDENCE (PROHIBITION OF SALE) (No. 2) 46 words