HC Deb 30 October 2003 vol 412 cc415-21
1. Mr. Tony McWalter (Hemel Hempstead)

What guidance he gives to local authorities on the priorities for cuts in the educational service in authorities which are deemed to have the highest levels of efficiency, but which claim that Government-induced expenditure and retention of services would necessitate such a large increase in council tax in 2003–04 as to be unacceptable to the Minister for Local Government. [135231]

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

Local authorities have already determined their spending plans and council tax levels for 2003–04. Yesterday I announced that for the next two years the additional spending on schools that the Government expects local authorities to provide will be fully backed by additional formula grant. We expect every authority to pass on all this additional spending, barring wholly exceptional circumstances. Because it is backed with additional central funding, there is no direct impact on council tax levels.

Mr. McWalter

In the case of an authority such as Hertfordshire, which is at the floor, has no transitional funding arrangements and faces a large number of additional pressures, the 0.6 per cent. headroom that my right hon. Friend announced yesterday seems wholly inadequate. As was said in yesterday's debate, Hertfordshire is facing a £15 million cut next year. Does my right hon. Friend realise that head teachers in Hertfordshire are cutting their own wages to meet the bills? Yesterday's announcement will not meet those needs.

Mr. Clarke

I understand the issues that my hon. Friend raises, but I point out first, that Hertfordshire is one of the authorities that will receive targeted transitional grant to deal with the issues that he described. The final figures will be announced at the time of the local government settlement, but there will be additional resource to deal with the situation. Secondly, the gap between the 4 per cent. minimum per pupil guarantee that I indicated and the minimum of 5 per cent. of the local education authority grant is a significant amount of resource, which can and, I hope, will be used by the local education authority to target the schools in particular difficulty in my hon. Friend's constituency and elsewhere in Hertfordshire. I hope that after full consideration, the county council, schools and all parliamentary colleagues will acknowledge that my statement yesterday offers a framework for addressing the issues that my hon. Friend rightly raised.

Michael Fabricant (Lichfield)

The Secretary of State will know, because I told him, that when he was blaming local education authorities for not passing on all the money, Staffordshire county council last year passed on 106 per cent. of the Government allocation. Can the right hon. Gentleman assure parents, children and teachers in Staffordshire that Staffordshire schools will receive the transitional grant?

Mr. Clarke

The list of authorities in receipt of the transitional grant was published yesterday. I cannot recall offhand whether Staffordshire was in that list, but authorities in the position of Staffordshire that passport the money through fully—I acknowledge the truth of what the hon. Gentleman says—will not suffer sanctions from us. Indeed, the reverse is true: they will be fully funded to carry that through and provide the kind of settlement that is needed for schools in his constituency and elsewhere in the county. I hope that the authority will work with schools to address any particular budget problems that may exist in particular schools. The announcement that I made yesterday was designed to facilitate such flexibility.

Mrs. Anne Campbell (Cambridge)

I sympathise to some extent with my hon. Friend the Member for Hemel Hempstead (Mr. McWalter), but I remind my right hon. Friend that those of us in authorities that were poorly funded, such as Cambridgeshire prior to last year, have long looked with envy at Hertfordshire's level of grant. May I urge my right hon. Friend not to go back on the arrangement that was made a year ago, but to continue to increase the level of funding, as he outlined yesterday?

Mr. Clarke

I am grateful for those remarks, and we will continue on that path. I have acknowledged in the House and elsewhere that there was school funding issues in various parts of the country this year, and I continue to believe that my statement yesterday offers a framework to address them in the way that is necessary in Cambridgeshire and other parts of the country.

Mr. Damian Green (Ashford)

Yesterday, the Secretary of State accused local authorities such as Hertfordshire of scaremongering about the settlement. It is up to him if he wants to insult the many heads, teachers and parents who have written to me about the severe problems that he has created, but what does he have to say to the Labour leader of the Local Government Association, Sir Jeremy Beecham, who commented: Some schools will be left short next year. Existing inequalities will be perpetuated"? If the Secretary of State has not convinced his own colleagues or his own Labour local government leaders that his settlement is fair, why does he think he will convince anyone else?

Mr. Clarke

I had a meeting yesterday with the leaders of the Local Government Association, including Sir Jeremy and the leader of the hon. Gentleman's county council, Sir Sandy Bruce-Lockhart. The hon. Gentleman will have noticed the transitional grant of more than £12 million that is going to Kent to try to address some of the issues. I believe that there are issues and I do not claim that everything is resolved—on the contrary. However, we have provided a framework to address those issues properly and we have put in resources to give local education authorities a real ability to deal with them.

Mr. Green

The minimum funding increase that the right hon. Gentleman announced is 4 per cent., and he claims that costs will increase by 3.4 per cent. However, school inflation this year was 8 per cent., so his figures already appear unrealistic. He will also know that the teachers' workload agreement makes bigger demands of school budgets every year. So will he now concede that, after this year's fiasco, the effect next year of what he has announced will be that even more teachers are made redundant, and that there will be even lower morale in schools and a further betrayal of thousands of our children?

Mr. Clarke

I am certainly hoping that the coronation of the hon. Gentleman's right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) will increase his basic numeracy. For example, in respect of the inflation considerations, two major issues were teacher pensions and national insurance, which will not play again this year. We discussed the 3.4 per cent. figure very fully with representatives of local government, including his authority, as well as the teacher associations. I stand by that figure; I think that it is a good assessment of the average and that the 4 per cent. guarantee that I have issued provides a basis for moving properly forward.

Mr. David Watts (St. Helens, North)

Is it the case that many councils have been able to levy very low council tax in comparison with that levied by my council because they have received such generous support from central Government? Is there not a case for allowing those councils to increase their council taxes and to switch resources to poorer areas such as mine?

Mr. Clarke

My hon. Friend makes a powerful point. Indeed, he has a strong reputation for campaigning for the needs of the urban and metropolitan authorities that were so poorly treated over decades and which we have sought to put straight. I am glad that, in my statement yesterday, I could not only announce a floor of 5 per cent. for each local education authority, but say that the ceiling would be at least 6.5 per cent. for authorities that are in a position such as that which he describes. What I announced enables us to continue the process in precisely the direction for which he has so powerfully campaigned, in order to get a just funding system for people in all parts of the country.

Mr. Phil Willis (Harrogate and Knaresborough)

Does the Secretary of State agree that even the most efficiently run education authorities and schools, whether in Hertfordshire or Kent, have struggled this year with the escalating costs of special educational needs, largely as a result of SEN and disability legislation and the new code of practice? How can he abandon direct SEN funding for schools by linking it with the schools development grant while limiting local authorities to a 4 per cent. figure that in effect represents a 0.6 per cent. increase in funding for what is, after all, a demand-led service? Does not that undermine the whole premise of the Government's policy in terms of inclusion and say to head teachers, "You cannot take a child on their merits; you take a child with SEN according to what you can afford"?

Mr. Clarke

I would usually agree with the hon. Gentleman on issues such as SEN, and I accept the integrity of what he is trying to say. I acknowledge that there are major issues in respect of special education needs, but I think that he has got the matter wrong in the context that we are discussing. Every local education authority must make a strategic decision about how much it will allocate to each school in its LEA area, to special educational needs and to other borough-wide or county-wide costs in any given area. That is the responsibility of those authorities. We cannot escape the pressures that he mentions, but the strategic decision must be taken by the local education authority, and I have provided the resources that will allow that to be done properly.

2. Mr. Michael Jack (Fylde)

At what level funding for Lancashire's schools will be set for 2004–05. [135232]

7. Mr. Andrew Robathan (Blaby)

If he will make a statement on the provisional education funding settlement for 2004–05 for Leicestershire. [135238]

11. Angela Watkinson (Upminster)

How the per pupil funding guarantee will be calculated for schools in the London borough of Havering. [135242]

The Minister for School Standards (Mr. David Miliband)

My right hon. Friend the Secretary of State made a statement in the House yesterday about support for schools in 2004–05 and 2005–06. It includes guaranteed minimum increases in every school's per-pupil budget; increases for LEAs to target financial problems; additional money in the standards fund; and transitional support to help schools in the greatest difficulty. We will be able to announce further details in the provisional local government funding settlement in November.

Mr. Jack

Overnight, Conservative Members have had a lot of things to think about, one being the content of the Secretary of State's statement. Were local authorities advised in December 2002 that, under the educational formula spending arrangements, they should plan on the basis of a 6 per cent. increase? Yesterday's statement indicated a 5.5 per cent. increase. That leaves Lancashire £2.5 million short. Can the Minister confirm that there has been such a change in the planning assumptions? Does the 3.4 per cent. costs increase formula take into account the necessary moneys fully to implement the school work force agreement?

Mr. Miliband

I wondered whether the right hon. Gentleman was going to announce that he had been thinking hard overnight about putting his name into the ring for the Conservative leadership contest.

I do not recognise the figures from December 2002 that he quoted, although I know that some figures were set out in the spending review that took place in 2003. In relation to extra costs, the 2004–05 work force agreement includes only the requirement that no teacher should do more than 38 hours' cover a year. Most people—certainly, the head teacher and teacher unions—agree that very few teachers are in that position.

Mr. Robathan

The Minister will know that this year Leicestershire was the worst-funded education authority in the country. I reiterate my gratitude to the Secretary of State for seeing a cross-party delegation of Leicestershire Members, which I led, in the summer. Following yesterday's announcement, can he reassure parents, teachers and governors in Leicestershire that we will not, yet again, face such a crisis? If he gives that assurance on the Floor of the House, we will know that all will be well in this coming year.

Mr. Miliband

I am disappointed that the hon. Gentleman did not refer to the nearly £4 million of transitional grant that is being provided to Leicestershire next year—that would have been the least that he could do. Of course, difficult issues are involved in falling pupil numbers in certain parts of the country, but he knows that these figures allow Leicestershire schools to plan, with the LEA, on the basis of genuine stability and predictability for the future.

Angela Watkinson

Yesterday, the Secretary of State made a very complex statement on school funding in which one thing that was clear was that an additional 4 per cent. would be made available. That will not allow the London borough of Havering even to set a standstill budget. Will the money that it receives be real cash?

Mr. Miliband

I think that I can reassure the hon. Lady. The minimum increase for local education authorities will be 5 per cent.; the minimum increase for schools will be 4 per cent.; and we have made it absolutely clear that every local authority will be in fund to passport that 5 per cent. in full.

Mr. Peter Pike (Burnley)

Does my hon. Friend accept that although yesterday's revenue statement was very important to Lancashire, the capital issue is of crucial importance to Burnley? Will he welcome the bid submitted to his Department by Lancashire county council that will assist every secondary school in Burnley to solve current problems and to add the vision to give all young people in Burnley a better secondary education in the years ahead?

Mr. Miliband

I congratulate my hon. Friend on the work that he does with Burnley schools, including on the capital issue. I am afraid that I cannot promise him that his bid will be successful, but I can promise him that it will be considered very carefully, along with every other bid that we receive.

Diana Organ (Forest of Dean)

Gloucestershire county council's response to yesterday's announcement about funding settlements for 2004–05 was to say that a chance has been lost to make sure all schools around the country are fairly funded, rather than perpetuating a funding regime where a pupil in East Sussex is worth £243 more per year than a Gloucestershire pupil. Has it missed the announcement of the changes that were made from last April?

Mr. Miliband

Gloucestershire county council received an increase of 6.6 per cent. in its education formula spending share last year. Similar pupils in different parts of the country are treated similarly, so that whether they live in Gloucestershire or anywhere else a similar amount of money is attached to them. That is the assurance that we give and the basis on which we say that it is a fair system.

John Cryer (Hornchurch)

Further to Question 11 by the hon. Member for Upminster (Angela Watkinson), the London borough of Havering, which is my borough, is attempting to close R. J. Mitchell primary school in south Hornchurch on the basis of a specious argument involving, in part, the funding formula. The school is popular and sought-after and has a specialism in children with special needs. I know that my hon. Friend does not have the power to halt school closures under current legislation, but will he at least agree to examine the case and give a view on the threatened closure of the R. J. Mitchell school?

Mr. Miliband

My hon. Friend makes an important point. Of course, changing demographics and pupil numbers can mean difficult decisions. However, he is also right to say that not only do we have a formula for giving money to local education authorities but also they have a formula for giving it to schools. The LEAs have considerable freedom of action with that formula. I shall examine my hon. Friend's case and subsequently write to him.

Mr. Peter Luff (Mid-Worcestershire)

Notwithstanding the Minister's great courtesy in listening to two delegations from Worcestershire in meetings at which I was present, does not he appreciate that there will be genuine disappointment and probably anger in the county because he has been party to an education funding settlement that has continued to increase, albeit more slowly, the gap between Worcestershire and neighbouring authorities? In those circumstances, why will Worcestershire not receive targeted transitional grant?

Mr. Miliband

I was happy to meet the delegations from Worcestershire. I explained to them that the Government treats similar pupils in different parts of the country similarly but that we have to work with local authorities to raise and distribute money for education. Worcestershire will not receive transitional grant because it received an increase of at least 12 per cent. over two years. The transitional grant was allocated on that basis.

Mr. Brian Jenkins (Tamworth)

My hon. Friend keeps assuring us that similar children are treated similarly in different parts of the country, although he knows only too well that different LEAs redo the calculations. Is not it time for my right hon. Friend the Secretary of State to present a realistic appraisal of where money should be spent? He should allow money for deprivation to be spent on deprived children, not—as happens in some instances—on supporting and subsidising the general ratepayer.

Mr. Miliband

I was pleased to meet my hon. Friend and other Staffordshire Members two weeks ago. He points out that although we treat similar pupils in different parts of the country similarly, the money that reaches schools depends on the amount of money that LEAs raise and the way in which they distribute it. He asks about the dilution that he perceives in the distribution of funds towards needy pupils. It must be tackled not only by the Government but locally because the dilution takes place locally.