HC Deb 26 June 2003 vol 407 cc1186-90
5. Mr. Michael Jack (Fylde)

What assessment he has made of the use by schools of their reserves to meet funding shortages. [121698]

The Secretary of State for Education and Skills (Mr. Charles Clarke)

We do not yet know to what extent balances will be used by schools in this financial year, 2003–04, because in many cases local education authorities are still considering schools' budget plans.

Mr. Jack

In the course of the Secretary of State's inquiries, I invite him to consider Freckleton Church of England school in my constituency, which has already used the school's piggy bank to try to stay in business, but is £49,000 short. It is, in effect, sacking two members of staff, and is having to introduce mixed ability teaching simply to keep its head above water. There is a real problem in Lancashire, and Freckleton is but one of a number of schools that are suffering. Notwithstanding the extra money that Lancashire has received, might I ask the Secretary of State to look closely at the problems in Lancashire, especially on the Fylde coast?

Mr. Clarke

I do not know the particular circumstances of Freckleton school, or whether falling rolls have been an issue there, but I can say that our information about school balances in Lancashire shows that the situation is very straightforward. At 31 March 2002, the end of the previous year, those balances totalled £40.876 million, which at 9.8 per cent. of budget share is above the national average. In the previous year ending March 2001, the total school balances in Lancashire had been only £33.663 million. We do not yet know the figure for the end of March 2003, but we understand that the latest estimates are that those balances will be greater than the £41 million that I mentioned. Schools in Lancashire have significant balances that are above the national average, so a serious resource is available.

Mr. Barry Sheerman (Huddersfield)

Does my right hon. Friend agree that although we have a Government who have piled a fantastic amount of investment into schools, the turbulence that has occurred this year has given many schools a pretty hard time? Does he accept that it is not good enough simply to blame local authorities, given that yesterday the permanent secretary told the Select Committee on Education and Skills that only 11 local authorities were guilty of not passporting money through to schools?

Mr. Clarke

The fact is that the funding of schools is a shared responsibility between national Government and local government. The turbulence, to use my hon. Friend's word, was caused by some decisions in national Government, as I have acknowledged in this House on many occasions. Local education authorities take decisions of various kinds—how much to distribute to individual schools, how much is operated centrally, and so on. I believe that both the national Government and local authorities should take responsibility for the effects of those decisions on the funding of individual schools.

As for passporting, my hon. Friend's figures are entirely correct. I am glad that the Select Committee is considering these matters, and I am to give evidence to it shortly. In relation to those 11 authorities that did not passport the money, there is a fairly high correlation between the areas with the biggest reported problems and the LEAs that did not passport the money.

Mr. Andrew Turner (Isle of Wight)

Does the Secretary of State know that the permanent secretary also told the Select Committee yesterday that there was inadequate time between making the decisions and the beginning of the financial year for the Department to model the effect on schools or for local education authorities to change their funding formulae? That inadequacy, which has been recognised in normal years, was worsened by the extent of the turbulence. Did the Secretary of State's officials warn him that the time was simply too short?

Mr. Clarke

The permanent secretary was right and the hon. Gentleman, in citing him, is therefore also right that there was an issue about timing. Modelling is interesting because local authorities' real decisions, for example, in setting council tax, must be taken into account. We have debated the issues fully and we shall ensure that the problems do not recur next year.

Mr. David Chaytor (Bury, North)

The budgets of schools in my constituency were screwed into the ground for the 12 years of the old unfair funding system. Schools in my constituency and many other poorer metropolitan districts in the north of England welcome this year's overall settlement. Will my right hon. Friend ensure that the manufactured crisis that some local authorities have generated is not allowed to derail the new funding system and turn the clock back to the previous system?

Mr. Clarke

I have two things to say. Despite my hon. Friend's support, which I appreciate, I do not associate myself with his language in his description of a "manufactured crisis." There is no doubt that a genuine problem had to be tackled in many schools. However, I can assure him that the fundamental formula for distributing resources throughout the country was established for three years and will remain on the basis that he described.

Mr. Damian Green (Ashford)

Has the Secretary of State seen today's survey of local education authorities? It shows that, on top of schools using reserves to cover funding shortages, 67 per cent. of the LEAs that were surveyed report redundancies among teachers or teaching assistants. Will he take the opportunity to admit that when the Prime Minister said yesterday that only a small number of teachers were being made redundant, he was simply wrong?

Mr. Clarke

The Prime Minister was not wrong. I have not studied the analysis that the hon. Gentleman mentions, but The Times Educational Supplement last week advertised more than 1,000 vacancies for teachers. As the Prime Minister said the other day, this year's overall number of teacher redundancies, which are due to a variety of reasons, including falling rolls and the financial issues to which the hon. Gentleman referred, is broadly comparable to that of previous years. We have said that all along.

Mr. Green

The redundancies are only the most vivid problem. In the same survey, Labour-controlled Croydon reports more than 100 posts unfilled because of financial pressures. Leeds reports 78 fewer teaching staff than last year, and in Leicestershire, 63 schools have been forced to set deficit budgets. Does the Secretary of State understand why The Guardian yesterday published a poll, which was headed: Voters losing faith in Labour on education"? Will he give schools that are going into deficit a guarantee that next year they will be given enough to get out of deficit and back to normal staffing levels?

Mr. Clarke

I acknowledge that teacher redundancies are only part of the problems and constraints that individual schools have had to tackle. We have said that throughout the process. I also acknowledge that the various reasons for the position have caused genuine problems such as the hon. Gentleman describes in schools. However, he should be honest enough to acknowledge that, under this Government, a further 25,000 teachers and 80,000 classroom assistants have been employed and there has been a vast amount of investment in schools' capital. He should have the grace to acknowledge that, as I acknowledge the strength of one or two of his points. The Government's education record has been outstanding.

Mr. Barry Gardiner (Brent, North)

May I thank my right hon. Friend for Brent's settlement this year and for the way in which the schools have been able to manage it? However, I draw to his attention Claremont school, which has had to go into reserves to balance its books this year. Will he congratulate Brent education authority on the additional contribution, above the 100 per cent. passporting, that it made to ensure that schools throughout the borough can maintain their staffing levels and survive this year? Will he also examine the inner and outer London education authority hangover in the problem of teacher pay with which boroughs such as Brent must cope?

Mr. Clarke

First, I acknowledge the inner-outer London issue that my hon. Friend raises. I am sure that that is one of the matters that the review body will consider for future years. Secondly, I give credit to Brent and the many other local education authorities that have put money above the 100 per cent. passporting into education in their areas. Thirdly, on reserves and balances, there is an issue about what they are for. They are not simply to be kept stored in a bank account; they are there to get real things and good quality education. It is quite reasonable for reserves and balances to be held at a reasonable level, but above that, it is reasonable to use the resources to improve the quality of education.

Mr. David Heath (Somerton and Frome)

Setting aside the £1,500 per child per year difference that still exists between Somerset and leafy London boroughs, may I ask the Secretary of State to look at some of the schools in my constituency—such as Bruton primary school, which I visited last week—which are facing real problems because their reserves have already been factored in for dealing with changes in rolls, yet they still face teacher redundancies? The Somerset education authority has written to him seeking a meeting, but he has written back saying that his diary is too full. Will he please reconsider that and meet the representatives of Somerset to discuss this very important issue?

Mr. Clarke

On the hon. Gentleman's final point, I am happy to meet Members of the House from all parties with delegations to discuss these and other issues. If he cares to write to me, I will certainly look at doing that. My hon. Friend the Minister for School Standards has had a wide range of meetings in precisely that way. As I have said throughout this discussion, particular schools have particular issues, which are real and need to be addressed. We will continue to help local authorities to help them to do that.