Schools: Local Financing Scheme (Hansard, 24 October 1989)

§ Viscount Davidson
My Lords, local education authorities' funding formulae under their schemes for the local management of schools are not due to be introduced until 1st April 1990. However, the design of formulae is certainly proceeding satisfactorily. My right honourable friends the Secretaries of State for Education and Science and for Wales have now received scheme submissions from all local education authorities.

§ Baroness Lockwood
My Lords, I thank the Minister for that rather complacent reply. However, can he tell the House how he reconciles it with the concern that has been expressed by other bodies, for example, by local authorities? Some local authorities are asking for salaries to be based on actual costs instead of averages. The Audit Commission has suggested that there will be significant job losses. A survey of the teachers' organisations has indicated that at least 58 per cent. of secondary schools will lose out. Those concerns do not seem to fit in with the Minister's bland reply.

§ Viscount Davidson
My Lords, of course I can understand the concerns expressed, particularly about the transitional period. Any change can give rise to worries, but the fact that all the local education authorities have submitted schemes within the timescale required means that most of them are on target for them to be approved and ready to start next April.

§ Lord Taylor of Blackburn
My Lords, is the Minister aware that, even taking into account his 1259 reply, local authorities are still not satisfied and governing bodies are still not satisfied that there will be adequate funding? The majority of us are in principle agreed with local autonomy of financing but unless the Government are prepared to supply the tools for them to do the job they will not be able to do it.

§ Viscount Davidson
My Lords, I believe that the Government are prepared to give them the tools. I will certainly have a word with my right honourable friend to ensure that that is correct.

§ Baroness Blackstone
My Lords, can the Minister reassure the House that there will not be a substantial number of schools, especially small schools, with reduced budgets at a time when educational expenditure has been for some time under pressure?

§ Viscount Davidson
My Lords, as regards small schools, the LEAs may protect them in their formulae in two ways; by giving additional resources for small school curriculum protection which will ensure that smaller schools can maintain the breadth of curriculum necessary, and for schools with fewer than 10 teachers LEAs can take into account the variation between the actual teacher costs and the LEAs' average costs of employing teachers. The precise arrangements for dealing with these two factors will be for LEAs to determine locally in their schemes.

§ Lord Peston
My Lords, since the point of Local Management of Schools is to give each school a budget and let them get on with the job of allocating it, can the noble Viscount reassure the House that whatever solution the department finds to deal with the many anomalies that are clearly arising, that solution will not involve detailed DES interference with the schools?

§ Viscount Davidson
My Lords, I think I can give that assurance. Your Lordships know that there will be a general four-year transition period. LEAs have until April 1994 to introduce formula funding. It has been made clear that Ministers will look sympathetically at proposals to extend the transition period selectively for schools which would otherwise be faced with annual reductions of 1 per cent. or more in their total budgets in each year of the general transition period because their staff costs were above the LEA average.

§ Lord Glenamara
My Lords, is the noble Viscount aware that there is a special fear among olders teachers who are on the maximum salaries that because they are more expensive they may be squeezed out by the governors who otherwise cannot make ends meet? Will the Minister pay some attention to that fear?

§ Viscount Davidson
My Lords, I will of course do so. Under Local Management of Schools, funding is to be pupil-led and not teacher-led. The school's budget will be determined broadly by the number and ages of its pupils. If a school is popular and 1260 attracts more pupils it will be rewarded for its success, and the teachers also.

§ Baroness Lockwood
My Lords, surely the Minister will acknowledge that it is not only a question of the number of children and hence the number of teachers but the grading of those teachers. Has the Minister any solution as regards the teachers who have grown older and are on a higher salary point as my noble friend indicated, or who have special responsibility? What are such schools to do?

§ Viscount Davidson
My Lords, under Local Management of Schools, the schools will have an increasing measure of control over matters affecting teachers' pay. Therefore it is surely right that schools should be financially accountable in this key budget area and meet their real costs. It will be up to the governors and head teachers to make sure that the problem to which the noble Baroness refers does not exist.

§ Lord Molloy
My Lords, if all the endeavours that the Government thought of in introducing this system are not realised, in the interests of teachers and the children would not the Government be prepared to have another look at the system?

§ Viscount Davidson
My Lords, the scheme has not been realised because it has not been started.

§ Lord Parry
My Lords, in the light of one of the answers given by the Minister, does he not accept that it has left some disquiet and not only on this side of the House? I am referring to the answer that he gave, that school organisation and financing will be pupil-led, and his estimation that people would choose a school that was successful. Does the Minister not agree that he is leaving a very large area of the country with a great many schools that have no competition, in the sense that in rural districts they exist only within those areas? Does he not further agree that, first, there is no competence that people can look to for management because there is no training in that regard? Secondly, does he not agree that there is no alternative for a school that is the only one in a rural district?

§ Viscount Davidson
My Lords, that question is a rather long one to answer. Local Management of Schools is first and foremost about delegating responsibility to the governors and head teachers of schools. It is they rather than the town halls who are best placed to judge priorities and to decide how the school's budget should be spent.

§ Lord Parry
My Lords, I am very grateful to the noble Viscount. Can he now tell the House whether there is any arrangement for the curriculum of the training colleges and universities to include managerial competence?

§ Viscount Davidson
My Lords, that is another question. I shall write to the noble Lord.