Schools Funding (Hansard, 29 April 2003)

§ Baroness Ashton of Upholland
My Lords, the Government have increased funding for schools this year by £2.6 billion—£250 million greater than cost pressures. The Government have cushioned the introduction of new funding arrangements by ensuring that every authority receives a minimum increase of 2.3 per cent per pupil in addition to provision for increased pension contributions and grant changes. However, while central government provides most of the funding, it is for local education authorities to decide education budgets and to allocate funding for schools.

§ Baroness Sharp of Guildford
My Lords, I thank the Minister for that reply. She is inclined, as is the Secretary of State, to blame local authorities for the failure of the money to reach the schools. Is that fair? Did we not pass an Act last year which passported the money directly through to the schools and gave local authorities very little discretion? Can the Minister really assure the House that, in doing its sums, the DfES made proper calculation for the increase in national insurance contributions, for the increase in pension contributions, for the transfer of pension contributions and for the increase in costs as a result of performance-related pay? Is she sure that this is not another example of a mess of the Government's own making, where the right hand does not know what the left hand is doing as a result of the redistribution exercise pursued by the Office of the Deputy Prime Minister? As I said, the right hand does not know what the left hand is doing and this is a mess of the Government's own making.

§ Baroness Ashton of Upholland
My Lords, this is not about the Government blaming local authorities but about a shared responsibility. We provide most of the funding for education but it is for the local authorities to decide the budgets that go to the schools. They decide by how much to increase council tax, if they feel that that is appropriate, how much to spend on central education services and how much money to allocate to individual schools. The point made by my right honourable friend was about shared responsibility. While we have made clear that we have put within the system the appropriate amount of money— including an increase above cost pressures—we recognise that we have to work closely with local education 578 authorities to ensure that the money reaches the schools. On Friday, my right honourable friend will be publishing information to help to inform the debate more appropriately.
Perhaps I may comment on a couple of the points that the noble Baroness made in what was a very long and wide-ranging question. There have been many changes within the system; we believe that we have a fairer funding system. In making calculations, the department looked at all the pressures we knew were under way this year—I have mentioned pensions—national insurance contributions, the shortening of the pay scales, non-teacher pay and so on. Having calculated those pressures, which we reckoned were about a 10.5 per cent increase, we then put in 11.6 per cent over and above the pressures that we had calculated. We are confident that those figures are correct.

§ Baroness Blatch
My Lords, the Minister has defended the Government very well on that point. However the truth is that Mr Miliband and Mr Charles Clarke have quite overtly blamed local government. Regarding the pressures that the noble Baroness has referred to, does she agree that national insurance, pensions, threshold and incremental increases for teachers and classroom assistants, the effect of the recent special educational needs provisions, in addition to the Government urging local authorities to spend more on social services and more policemen on the beat, have made the pressures on local government impossible? The local government award to local authorities has not kept pace. Does the Minister also accept that local authorities are in fact passporting £100 million more than the Government say they should in terms of schools funding?

§ Baroness Ashton of Upholland
My Lords, I do not accept the analysis of the noble Baroness, Lady Blatch, about the way that we are treating local authorities. We are clear that this is understood to be a joint responsibility. What we are aware of, and noble Lords will see for themselves on Friday, is a huge variation, not only in the way that local education authorities work out the formula for themselves, but also variation between individual schools within local education authorities. There may be perfectly valid reasons for that, but I think that is right and proper, with the comments and questions that are coming forward about funding, that we ask those questions. That is very important, when one sees the breadth of the variation. I have the figures from this morning, and I say to the noble Baroness that the number of children with a statement of special educational needs remains constant from last year. The number of children with special educational needs without a statement has actually fallen from 16.8 per cent to 14 per cent.

§ Earl Russell
My Lords, the Minister said in her first Answer that the majority of the money comes from central government. Has she just heard it illustrated that in letting that come about the Government have pickled not merely a rod but a cat-o'-nine-tails for their 579 own backs? Would it not be better to go back to local government? After all, were we not once rather good at it?

§ Baroness Ashton of Upholland
My Lords, I believe that most noble Lords would accept that it is the job of central government to ensure that we fund education appropriately. I think that that is the right way to proceed. What we do, of course, is to allow local education authorities to determine the way in which they pass money down. Certainly, in my discussions with schools in different parts of the country it is clear that there are different ways of approaching it. They are not good or bad, they are simply different. The impact and effect on schools, when one has the kind of changes seen with the new funding formula, have therefore been different in different parts of the country. That is what local government is entitled to do and there to do.

§ Lord Roberts of Conwy
My Lords, can the Minister say what proportion of the money that goes for education to local authorities actually finds its way into the schools?

§ Baroness Ashton of Upholland
My Lords, again the information will be available on Friday. Certainly my right honourable friend tells me that more authorities than expected appear not to have passported the 100 per cent through to education, even though in February we were hearing that the vast majority would. Obviously we will have to explore with them why that has happened because I appreciate that there are pressures on local government. They are trying to do the best within their budgets. This is not about saying that they are wrong to do it. None the less, we are clear that the money is for education and needs to reach the schools. That is what we will endeavour to do.

§ Baroness Carnegy of Lour
My Lords, over the whole piece, can the Minister tell the House, so that we can he clear about this issue, what proportion of the school budgets has to cover salaries, national insurance and pensions? Those are figures which are determined by the Government centrally. Can she tell us what the proportion is, because that would give us some idea of the discretion that local authorities have?

§ Baroness Ashton of Upholland
My Lords, it is very difficult to give the noble Baroness those details, because this is about individual schools. They employ different numbers of teachers; they have different cost pressures as a consequence; they have different numbers of classroom assistants. We do not collect the kind of detail that would give me the snapshot that the noble Baroness would like. If I have more information I will write to her and place a copy in the Library.
The critical factor is to make sure that within the education budget the money reaches schools. We know that, on the current information on the local authorities available, £339 million has yet to reach schools. My right honourable friend has been using a 580 figure of £ 500 million across all education authorities, which is about right. Maybe that is yet to get through to schools. We are keeping a careful watch to ensure that money is reaching schools.

§ Baroness Blatch
My Lords, the Minister said that they do not collect the statistics. Every single year at about this time of year there is something— I think it is the Form 7— which gives exactly and precisely the information to which my noble friend referred. The department has that information in great detail for every local education authority in the country.
Regarding something else the Minister said earlier— the Secretary of State said on 13th February in a DfES press release: The great majority of LEAs have passed on the increase in schools funding, and we welcome that. That does not fit with what the Minister has just told us.

§ Baroness Ashton of Upholland
My Lords, it is exactly what I have just been telling noble Lords. I said that as late as February my right honourable friend had understood that that was the situation. However, the information that is currently coming through seems to suggest that it is not. When noble Lords have the opportunity after Friday, after the local elections, which is the appropriate time, to look at the figures, they will be able to judge for themselves and come back to your Lordships' House and decide. We have to publish after the local elections, because that is the appropriate way to behave as the Government. It would be completely inappropriate to publish before then, and I am astonished that noble Lords opposite should think otherwise.
If the noble Baroness is correct about the figures I apologise unreservedly. The information I thought that she wanted now was the full funding formula that we have just put into the system and whether I have an absolute analysis of the percentage that goes on wages and national insurance. The answer to that is no. If I have that available shortly, I will of course produce it for the House.