§ 11 am
§ Mrs. Anne Campbell (Cambridge)
I am pleased to have the opportunity to talk about a subject that is dear to the hearts of people in my constituency. I pay tribute to my hon. Friend the Member for Stafford (Mr. Kidney); he cannot be here today, and has made his apologies, but he convened the all-party group on this issue, which I think will be a very effective force. I hope that it will make a real input into the reforms of the system.
I want to express my gratitude for the increase in the education standard spending assessment in my constituency since 1997. I have asked a number of parliamentary questions on the subject over the past few months; indeed, my right hon. Friend the Secretary of State must be rather fed up with signing answers to my questions, but I have managed to elicit some useful information.
Cambridgeshire's SSA per pupil was at its previous highest, in real terms, in 1992–93. Schools then received today's equivalent of £2,578 per pupil. Throughout the years of the Tory Government the amount fell steadily, reaching its lowest level of £2,455 per pupil in 1995–96. There was a fall of £23 per pupil in three years. In those days we had a Labour-Liberal county council, which markedly increased the top-up provided from its own funds. It was at its highest in 1995–96, when it topped £15 million—but not for long: unfortunately, in the following year the council's budget was capped by the then Conservative Government, and it was no longer able to provide such a large top-up.
It is not difficult to see that it is the Labour party that believes in education, and the Conservative party that does not. Throughout the 1990s, the same pattern was repeated—a Conservative Government cutting money for schools, and a Labour-Liberal county council increasing the top-up. Since 1997, it has been a different story. The education SSA per pupil has increased in real terms year on year, and at £2,591 is now higher than it has ever been. However, the county council, which is now Tory-controlled, has reduced its top-up from £15 million in 1995–96 to under £5 million today. In 1998 and 1999, the council failed to pass on £3 million that was intended for school budgets. This year, pressure exerted by myself and others has forced it to pass on the full increase in education spending. At last schools are beginning to experience some relief from the downward spiral in their budgets.
Of course, SSAs are not the only source of funding for schools. The Government have also markedly increased the amount available for capital spending, and new classrooms and additional facilities are springing up like mushrooms all over the county. The cash that has made the largest difference has come from the standards fund: money to match the numeracy and literacy strategies, for computers, drug prevention and ethnic-minority achievement, and for many other important purposes. It totalled a massive £11 million last year, and will reach £15 million this year. That money has not been provided through the SSA, but has gone directly into school budgets.
We were all delighted with the additional £1 billion that the Chancellor found in his Budget this year 69WH specifically to support school budgets. David Somerville, head teacher of St. Matthew's primary school. received £9,000 extra in his school budget. He wrote to me:Please continue to do all that you can to support growth in school budgets. The modest increase in my school's budget this year has had a positive impact on morale—it is a pleasure to be having discussions with the staff about what to spend the extra money on rather than having to decide what to cut.Another school in my constituency, Priory infants school, has been able to reinstate the post of home-school liaison officer, which was removed some years ago because of the loss of funds. It will make a huge difference in a part of my constituency where levels of social deprivation are high. Chesterton community college will be able to create an extra teaching group in year seven, thus reducing class sizes. It will also be able to create two groups for GCSE music, rather than one that would have consisted of 32 pupils. The head teacher, Bev Jones, e-mailed that information to me on her new laptop, provided from Government funds.
That money has been handed directly to schools, and is making a real difference. It is a source of enormous frustration to me, and, I am sure, to my right hon. Friend the Secretary of State, that money made available for education has not always found its way into school budgets. Sometimes that is because it has been siphoned off for other services, like the £3 million that I mentioned earlier; sometimes it is because the local education authority is top-slicing the money allocated and spending it on unnecessary central support services. I was quite shocked by the answer to a question that I asked my right hon. Friend last year about the percentage of the general schools budget that was devolved to schools by each LEA. In one of our neighbouring counties, Suffolk, the figure was nearly 80 per cent., but in Cambridgeshire it was a paltry 64.9 per cent., lower than in any other shire county.
I wrote to the Conservative chairman of the education committee, Councillor Wilkinson, to ask why the amount was so low. His reply made it clear that he did not consider the matter important. It would have been of enormous interest to schools. If Cambridgeshire had delegated its budget at the same level as Labour-controlled Suffolk, schools would have had an additional £27.7 million to spend. It is true that they would have had more services to buy, but they could have made their own choices about expenditure rather than the decisions being made for them centrally.
With the introduction of fair funding, Cambridgeshire has had to delegate more of its budget to schools. The way in which that has been done is a complete sham. I do not believe that any school has yet noticed a difference, or has been able to make decisions different from those dictated by the county council. In the past, Cambridgeshire held a very high proportion of the special needs budget centrally, and allocated resources to schools on the basis of the number of statemented children. Now the council is required to delegate that money to schools. Its pamphlet containing guidance for special-needs delegation to schools operating bank accounts was issued in March this year, and makes it clear that it regards the fair funding scheme as a bit of a distraction. It admits in the pamphlet that for new statementsThe nominal budget allocation bears little relation to the allocation of resources to the school.70WH It also says:A number of schools have expressed concern that having a budget on their budgetary control printouts that bears little resemblance to the actual allocation of resources could create a distraction and perhaps confusion.I should say so! There is a considerable disincentive for schools to run their own bank accounts and to take control of their budgets.
The LEA points out that all is not lost: if schools were prepared to join its learning support assistance indemnity scheme, lo and behold, the LEA would continue to operate the existing familiar arrangements. In other words, nothing changes. It is clear that Cambridgeshire LEA is doing its best to ensure that it retains control of the school budgets. The method of achieving the 80 per cent. required delegation is highly questionable. I recently spoke to inspectors from the Office for Standards in Education who were completing their inspection of Cambridgeshire county council, and I hope that those concerns will be reflected in their report.
I welcome the recent announcement by my right hon. Friend the Secretary of State that he was considering funding schools directly from Whitehall, without the money being filtered by the LEA. That would certainly overcome the problems that I have outlined. His statement produced a mixed reaction in Cambridgeshire. Conservatives condemned the proposals, but Labour councillor Josephine Percy was quoted in the Cambridge Evening News as saying:This government is trying to do something about it by giving money to schools to spend their own way and not to someone else's sticky fingers at Shire Hall.She went on to make the good point thatSome School Governors are better business people than County councillors. It's a very good idea.In Cambridgeshire, it is clear that Conservatives want to hold on to central control of budgets while Labour councillors are prepared to give schools the autonomy that they want.
Finally, wide differentials in funding per pupil between LEAs are immensely important to parents and schools in my constituency. We are still operating a system introduced by the Conservative Government, and I am disappointed that the method of allocating funds has not been reformed. Most authorities compare themselves with Hertfordshire, one of the most generously funded shire counties. Cambridgeshire has the misfortune to share a boundary with Hertfordshire, and our schools know that others a few miles down the road have £160 a year more for each primary pupil and £206 a year more for each secondary pupil. The system is unfair, and I know that my right hon. Friend the Minister for School Standards is as keen as I am to see it reformed.
§ Mr. David Taylor (North-West Leicestershire)
Does my hon. Friend acknowledge that Leicestershire, which has a short common border with Cambridgeshire, is the worst-funded of all counties? We are £332 per secondary school pupil adrift of Hertfordshire, and that plus our primary underfunding amounts to £13 million a year.
§ Mrs. Campbell
I am grateful to my hon. Friend for making that point. Propaganda is often put out that 71WH Cambridgeshire is the lowest funded shire county for education, but I know that that is not true as Leicestershire is in an even worse position.
A White Paper is expected in July, and I hope that it will produce a workable and fair system. It will take time to implement its proposals, and schools cannot therefore expect real reform before 2002. In the meantime, however, some extra money allocated for education should be used to raise the funding of authorities in the bottom half of the league table to the funding of the middle one. Answers to my questions suggest that the costs of implementing that idea in England would be £511 million. It is a large sum, but the idea is affordable given the expanding education budget that the Government have provided. It would bring primary funding up to £2,435 per pupil, and secondary funding to £3,130, in each of the bottom 75 English authorities. That would aid my hon. Friend's county as well as my own and others.
That system would win widespread support, and it could be implemented quickly and easily. It would be seen to be fair, and it would not reduce funding for authorities in which there is high social deprivation. It would do an enormous amount to reduce pressure on authorities languishing at the bottom of the league. I hope that my right hon. Friend the Minister will consider the proposal seriously. She is not responsible for deciding how SSAs are allocated, but I hope that she will press for the proposal, at least as interim relief for authorities, such as Cambridgeshire, that are in the bottom half of the league.
§ Mr. Andrew Lansley (South Cambridgeshire)
I am pleased to be the first to congratulate the hon. Member for Cambridge (Mrs. Campbell) on securing the debate. Like hers, my constituents see this as a matter of great importance and will welcome a debate that allows us to examine it. Several Members wish to speak, and the debate is a short one, so I shall make just three points on my constituents' behalf and leave it to my hon. Friend the Member for Hertsmere (Mr. Clappison) to make points from the Front Bench.
My first point is that the Government have plainly shifted the basis on which standard spending assessments—education and others—have been calculated. Far from being unable to change the system inherited from the previous Administration, the Government have, the evidence increasingly suggests, distorted the system. I recall the Government's introduction of a plain English guide to grant distribution. In the first edition, in 1998, the document contained a section on SSAs entitled "Assessing Spending Needs". It referred to the fact that an SSA, though not a spending target, was an assessment of the budget required for an authority to meet a standard level of service, given its needs and costs.
When the second edition came out in 1999, that sentence had disappeared, and the paragraph was retitled "Sharing Out Resources", which is indicative of the route taken by the Government. They have stopped trying accurately to assess the needs, costs and relative resource of areas when it comes to distributing grant. 72WH Instead, they take account only of their own choice of social deprivation indices and raw population statistics. The net result is a mechanism by which the Government have shifted resources away from shire counties and districts to metropolitan areas outside London. I am sure that my hon. Friend the Member for Hertsmere will pursue that point further.
Secondly, that policy has unhappy consequences for Cambridgeshire, which has the lowest SSA per head among education authorities in 2000–01. The Government are increasingly moving away from recognising the additional costs and needs associated with counties such as Cambridgeshire. The Secretary of State for Education and Employment was bold enough to admit that in a letter to me of 20 December. He acknowledged that Cambridgeshire's SSA increase was below the national average on a per pupil basis, but added that thatreflects a reduction in the share of the national total which it receives to reflect social deprivation and area costs.The point is that matters that should have been considered for the SSA on a per head or per pupil basis were not included. The Secretary of State and other Ministers have acknowledged that the difference in funding for education SSAs between areas has largely to do with differences in area cost adjustment and the additional educational needs index. On both counts, I share the view of the hon. Member for Cambridge that the Government could and should have done more to arrive at a more equitable basis for distribution of funding.
The combination of failure on those two counts disadvantages Cambridgeshire pupils. The hon. Lady mentioned the relationship between Cambridgeshire and Hertfordshire—the border lies in my constituency, and I know only too well that there are variations between £150 and £200 per pupil in some schools.
Thirdly, not only should the Government have done something, but they promised that they would. The hon. Lady did not refer—unsurprisingly—to a an interview given by the Prime Minister to the Cambridge Evening News on 30 April 1997, days before the general election, when he said that he would review the area cost adjustment and that its abolition would deliver at least £5 million more for Cambridgeshire. He also said that he would review it in time for the next financial year. The Prime Minister is presently making a speech elsewhere about traditional values, and I reckon that one traditional value that he should have maintained after the election was honesty. When he said that he would review the area cost adjustment in time for the next financial year, he did not mean that he would look at it; it had been looked at already.
§ Mrs. Anne Campbell
I hope that the hon. Gentleman will accept that my right hon. Friend the Prime Minister said that he would review it, and that he would do so in time for the next financial year. Review it he has certainly done, and that promise has been met. I am just disappointed that the review did not lead to fundamental changes in the formula and that we are still undergoing that process. However, my right hon. Friend has met his promise to review the SSA.
§ Mr. Lansley
I am grateful to the hon. Lady for making precisely the point that I was making. The Prime 73WH Minister made a pledge to review it in time for the next financial year. However, a review had already been done. The subsequent specific costs inquiry was, in practice, a basis on which a decision could have been made—arguably, not necessarily for the 1998–99 financial year, but certainly for the 1999–2000 financial year. The reason that the Government give for not having made a change to the area cost adjustment is that local authorities were not able to reach a consensus on it.
Forgive me, but I thought that the job of Government was to decide on grant distribution the basis of consultation, not necessarily to delegate their responsibility to the Local Government Association. It would come as an interesting revelation to the LGA if it were told that it was in charge of the standard spending assessment and grant distribution structures, as the association thought that the Government were in charge of them. The way in which, in particular, the Deputy Prime Minister has worked other changes in grant distribution demonstrates that he does not necessarily take the actions that the LGA would have told him to take.
It is also true that the Prime Minister, in saying that he would review the area cost adjustment, made it very clear that, on the basis of the current Elliott review, he was prepared to take action. He made it absolutely clear that he was making effectively a promise to the people of Cambridgeshire—it would have been read similarly in other places—that the system would be reformed. It has not been reformed. The hon. Member for Cambridge is disappointed that it will not be reformed until 2002—not that there is a promise that it will be—but I think that it is a disgrace. This summer's consultation paper—it may or may not be a White Paper—should be a proposal for substantial reform, so that something can be achieved by 2001.
§ Mr. David Heath (Somerton and Frome)
Would it surprise the hon. Gentleman if I told him that the view that he has just ascribed to the Prime Minister is exactly the same as the one that was presented year after year by the right hon. Member for Suffolk, Coastal (Mr. Gummer), who required consensus between the then Association of County Councils, the Association of Metropolitan Authorities and the Association of District Councils on reform of the area cost adjustment? That requirement is precisely why no change was ever made.
§ Mr. Lansley
The hon. Gentleman may make that point, but we are not here to debate the previous Conservative Government. Moreover, it was the previous Administration who instituted the Elliott review, which provided a basis for the work. He may also care to read my Adjournment debate of July 1997, in which I acknowledged that the Government had a responsibility to undertake further work and that the specific costs inquiry was intended for that purpose.
The question is, which Government made promises to change the system, which Government undertook the second review to do it, and which Government had the material on which to do it, but have failed to do it? The answer is the current Government.
§ Mr. David Taylor
I agree with the hon. Gentleman that there is still some way for the Government to go in 74WH reforming education finance. However, does he agree that the problems and difficulties that we need to resolve pale into insignificance compared with the distortions that the previous Administration incorporated into education finance in relation to, for example, grant-maintained schools and the chronic neglect of the fabric of British schools, including information technology systems? The current Government have dealt with those matters in a major way.
§ Mr. Lansley
The hon. Gentleman is tempting me into the debate on grant-maintained schools. I should dearly love to do that, because many of the schools in my constituency that were grant maintained, but have lost that status precisely because of the Government's interference, were exhibiting precisely the qualities that the hon. Member for Cambridge exhorted when she said that the county council should be passing money to schools.
I should add that the hon. Lady should have applied that principle not only to the county council but, even more so, to the Government. The need for the principle to be applied to the Government is demonstrated by the size of the standards fund and by the fact that the annual report of the Department for Education and Employment lists 38 schemes—I counted them the other week—by which the Government are top-slicing money for this and for that. The Department has even top-sliced the SSA to cover the teachers pay and performance review. If the principle of getting money into schools applies to the county council, it applies even more to the Government—who are engaging in bureaucratic management from desks in Whitehall, rather than concentrating on supporting teachers at desks in schools.
§ Mr. David Chaytor (Bury, North)
Although we are not debating the previous Government's record, we are concerned about consistency. Did not the previous Government say, year after year, that there was no agreement among local education authorities, and use that as an excuse for not changing the system? The real question is, which Government are now about to publish a document that will introduce proposals for the definitive reform of the system that I think all hon. Members in the Chamber desire?
§ Mr. Lansley
The hon. Gentleman is a rampant optimist, as the Government may or may not make such proposals—although such proposals already existed. There were 23 proposals in the specific costs inquiry on mechanisms to reform the area cost adjustment, but the Government chose to adopt none of them. If consistency is what he is looking for, he should have been there making that point—perhaps he was—in December 1999, when the Deputy Prime Minister said that he was dealing with the unfairnesses in the grant distribution system and the standard spending assessment. He clearly did not deal with unfairnesses in SSA in December 1999. He did not do what the Prime Minister, back in 1997, had promised my constituents, and, I think, what he had promised the constituents of the hon. Member for Cambridge. I am afraid that the Prime Minister and the hon. Lady will have to suffer, at the minimum, the embarrassment and, potentially, the harm that will come when, at the next general election, my constituents and theirs realise that that promise has not been fulfilled.
75WH I hope that the Minister will be able to give us a positive statement on what will be said in the document that will be published in July.
§ Mr. David Chaytor (Bury, North)
I, too, should like to congratulate my hon. Friend the Member for Cambridge (Mrs. Campbell) on initiating this debate. It is extremely timely in view of the imminent publication of the Government's proposals, which I believe are expected in July. The matter is extremely important for the local authority in which my constituency is located.
Although I do not necessarily wish to contradict the hon. Member for South Cambridgeshire (Mr. Lansley), on the figures that I have, Cambridgeshire is not the lowest-funded local education authority by any stretch of the imagination. For the current year, the standard spending assessment for my local authority of Bury is £2,299, whereas it is £2,313 for Cambridgeshire. In my local authority, the secondary SSA is £2,941, whereas in Cambridgeshire it is £2,964. I should like, therefore, to shift the emphasis a little from Cambridgeshire and describe very briefly some of the difficulties faced by the local education authority in Bury.
§ Mr. Lansley
There will be a limit to how often we can trade statistics, but my hon. Friend the Member for Hertsmere (Mr. Clappison) has very kindly supplied me with the figures. According to an answer given on 10 May by the Minister for Local Government and the Regions, for 2000–01 Bury has an SSA per head of £782, whereas Cambridgeshire has an SSA per head of £613—which, according to the Department's table, is ranked 150th out of 150 education authorities—[Interruption.] The hon. Member for North-West Leicestershire (Mr. Taylor) interrupts, but—
§ Mr. Deputy Speaker (Mr. Frank Cook)
Order. The hon. Member for South Cambridgeshire (Mr. Lansley) is making an intervention, not a speech.
§ Mr. Chaytor
I think that the confusion may have arisen because I am quoting education SSAs, not per capita SSAs.
§ Mr. James Paice (South-East Cambridgeshire)
The point is that there is a direct correlation between the education SSA and the SSA per head. The hon. Member for Cambridge (Mrs. Campbell) failed to emphasise the point that Cambridgeshire county council, under several different political leaderships, has consistently added to the education SSA, because it was not enough. However, as she said, the council has done it at the expense of other services. The fact is that, if the overall education SSA were higher, it would be much easier not only to pass on education SSA increases, but to improve the other services that have had to suffer, rightly, to maintain the higher level of education spending.
§ Mr. Chaytor
Of course there is a relationship. The hon. Gentleman's argument is exactly the same as the one that we in Bury put to the previous Government. Our local education authority spent at about 10 per 76WH cent. above SSA to ensure that schools were adequately funded. It is interesting that, in the year before the last general election, our capacity to spend above SSA was almost entirely taken away by the spending cuts in the Conservatives' last Budget.
I shall move on from trading statistics relating to Bury and Cambridgeshire and focus entirely on Bury. In addition to being in the bottom sixth of authorities for education SSA, Bury is one of the smallest metropolitan districts in the country, and the combination of low funding and small size causes particular problems. Bury has historically been underfunded—it was underfunded by Conservative Governments throughout their 18 years in office—but, as I said, the local authority was able to compensate by spending above SSA. It spent about 10 per cent. above SSA for several years, which provided a degree of protection to Bury schools and laid the foundation for their now widely recognised excellent quality. That capacity was taken away by the Conservatives' last Budget. As a consequence, the local authority had to cut education funding by 10 per cent., which resulted in dramatic cuts in local school budgets. That became one of the most important themes of the general election campaign in my constituency.
At this point, I shall draw another comparison between Bury and Cambridgeshire. It will be the last, because I am not criticising my local authority in any way—it is one of the best-regarded local authorities in the United Kingdom. It received an excellent Ofsted report and it is highly regarded by schools in the district, which is an important test of an LEA's value. Despite the historically low funding, the local authority's fine track record of making valiant efforts to compensate for that means that it has delivered, through local schools, remarkably high achievement. In SATs and GCSE results—I regard league tables with some scepticism, but that is the raw information we have to work with—Bury is always one of the best-performing metropolitan districts. In terms of key stage 2 results, it is one of the best-performing districts in the United Kingdom.
I concede that some might say that, even if it is poorly funded, the authority has recorded high achievement, which undermines the argument for an increase in funding. My response is to say that that high achievement has been achieved by staff, both at the LEA and in schools, working in excess of reasonable expectations. They are overworked, stressed and exhausted, entirely because the funding available to them is significantly less than the national average and significantly less than that received by districts that, to all in intents and purposes, are similar or even parallel in terms of socio-economic indicators.
That brings me to the index of social deprivation produced by the Department of the Environment, Transport and the Regions. There is an interesting contrast between Bury's positions in the SSA league table and in the index of social deprivation. I realise that the index is under review and that consideration is being given to new methodology, but in the 1998 aggregate index of social deprivation, Bury is 116th out of about 355 local authorities—not all of which are LEAs, of course. Therefore, we are in the bottom third of authorities in terms of socio-economic indicators. However, in terms of education SSA funding, we in the bottom sixth of authorities; in primary SSA, we are 126th out of 150 LEAs; and in secondary SSA, we are 77WH 128th out of 150 LEAs. There is a clear discrepancy between the methodology used to arrive at education SSAs and that used to compile DETR's index of social deprivation. That discrepancy between Bury's socioeconomic status and the funding the authority receives is the cause of our concern.
There are weaknesses in the system. The hon. Member for South Cambridgeshire mentioned the area cost adjustment, which is the subject of our strongest criticism as well. He also said that tie Government have not changed the SSA methodology, but that is not strictly true. I recall that a change was made two years ago to the social services SSA to cover the element relating to children's services. There was almost, but not quite, a change made to the additional educational needs allowance. However, a significant feature of the debate in the past two years is that, finally, all sides have come to agree that the area cost adjustment is no longer an accurate or sustainable measure by which to allocate SSAs.
The area cost adjustment gives a significant advantage to London boroughs. No one denies that London boroughs have special needs that have to be addressed, but it is ludicrous that the 20 best-funded authorities in the education SSA league table are all in London, whereas in the index of social deprivation the ratio of the major midlands and northern cities to the poorest London boroughs is about 50:50. There is clearly a problem in distribution between north and south.
Another problem is that all London boroughs and those on the fringes of Greater London benefit from the impact of the area cost adjustment, regardless of the precise needs of their area and their position in terms of socio-economic indicators. Therefore, many boroughs located in the leafier suburbs receive a generous benefit and, even within authorities, many schools located in leafier suburbs receive the general benefit from the increase in authority's funding attributable to the area cost adjustment.
We have made progress in the past two or three years, albeit riot as much as we would have wanted. I welcome the announcement of the publication in July of the Government's paper—I am not sure whether it will be a Green or a White Paper. My local authority, Bury's schools and I are not ungrateful for the changes that have already been made—for example, the year-on-year increase in SSA for the past three years, the new funding through the standards fund, and the new deal for schools. In the last year of the Conservative Government, about 50 per cent. of primary school classes had more than 30 pupils, whereas, as of this September, no child in Bury will be in an infant class of more than 30 pupils. There has been a significant increase in funding. Like my hon. Friend the Member for Cambridge, I regret that the standards fund and the new deal have not been used more specifically to correct the deficiencies inherent in the SSA mechanism. The Government could have done that over the past two or three years. None the less, we are grateful for the extra funding.
My main point is that the current SSA system is unsustainable and methodologically unsound. The results stand in contrast with the DETR index of social deprivation because the two methodologies used contradict each other. Reform is needed. To an 78WH increasing extent, we are operating a national system of education: teachers salaries are set nationally and we have a national curriculum. There is clearly a minimum amount of spending needed to run a school successfully in any part of the country, so we must examine the possibility of setting a national minimum level of funding. In the interests of fairness and equity, that funding should not vary much between different parts of the country. I support the E40 group of local authorities, which is campaigning for a basic standard of funding that does not vary by more than 5 per cent. from the median SSA for all local authorities.
§ Mr. Steve Webb (Northavon)
I shall be brief because I know that several hon. Members wish to speak.
I congratulate the hon. Member for Cambridge (Mrs. Campbell) on securing this important debate. The first of my three points is to thank her for her role in the all-party group that is trying to tackle the issue on an all-party basis. So far this morning, we have—perhaps understandably—slipped into a bit of a party political dogfight, but the only way forward is for us to come together to recognise common cause. Sniping at each other's records or achievements does not help to achieve a fair deal for all authorities of all political complexions. I hope that we can maintain that cross-party drive, because we will make more progress by doing so.
Secondly, I continue my campaign to ensure that, when the Minister is opened up, the words "South Gloucestershire" are written across her heart. Statistics have been traded, but if I may, I shall quote just one. Of all unitary and metropolitan authorities and shire counties, South Gloucestershire is at the bottom of the league for primary education funding.
I mention that because South Gloucestershire is a young authority. It was created as a shadow authority in 1995, but it is like a child who has been shackled from birth. In every year of its existence, under both major political parties in government, it has been bottom of the table and never received fair funding. That is a dreadful birthright for a new authority which wanted a bright new start.
The Minister knows that I am concerned that the position is made worse by out-of-date data. Many children regularly move into the area, but official figures take a long time to catch up. I have even offered to type them in myself if it would speed up matters. I implore the Minister in this age of the internet and modern technology to consider the use of provisional school numbers. If they turn out to be wrong, adjustments can be made the following year. It is unacceptable for funding to take nearly two years to catch up with pupil numbers. We end up educating a primary school's-worth of pupils for not below average funding, but for nil money. Therefore, we suffer a double whammy: less funding per head than anybody else and many invisible pupils. That is the background against which we are working.
I pay tribute to my local authority, South Gloucestershire, as the hon. Member for Bury, North (Mr. Chaytor) has to his. It has achieved very good results—not least because it is having to spend well above the standard spending assessment for education. 79WH That extra is found by putting up council tax by much more than anybody would want, and by starving some other vital community services. A low education SSA has a knock-on effect on the range of council services. Many of the things about which people complain in our surgeries are rooted in the fact that education, which my authority prioritises, is starved of adequate cash.
To give an indication of the magnitude of the problem, my authority has calculated that, if it received average education and social services funding, the council tax could be not £20 or £50 but £200 lower. To put that another way, the authority could spend more on education and other services and the council tax could still be lower. The scale of underfunding is huge. In a band D council tax of about £820, £200 makes up the shortfall. My constituents are very angry about the council tax that they must pay. They recognise the council's commitment to education, but such underfunding surely cannot be allowed to continue.
My final point is about how long such underfunding will go on. I hope that the Minister will give a clear idea of time scale. My worry is that, following the consultation paper—perhaps no more—in July and completion of consultation on it, there is no way that, on the brink of an election, there will be any change by April 2001. Therefore, adjustments will probably not be made until the financial year 2002–03. Presumably, in any change, there will be many gainers and many losers, but the Government will not want big losers. Unless there is significant extra money, there will be no big gainers. Therefore, it will be years before the injustice disappears. Children who entered school when the Government were elected in 1997 will have probably completed their primary education and have missed out before the problem is rectified.
I hope that the Minister will give a clear indication that, during the transition, additional money will be made available to oil the wheels in order to protect the losers, so that those who have suffered rough justice will not be told that they will have to wait another five years for a fair deal.
§ Mr. David Rendel (Newbury)
I am also delighted that we have had this important debate, as I am part of the group of 40. Needless to say, I would not be in that group if my local education authority, West Berkshire, were not among those most poorly funded under the standard spending assessment system. I am sorry to see that and hope that something will be done about it. The Government have a wonderful opportunity to do so in the spending review this summer. I hope that we shall see more funding for education, particularly for authorities that are among those least funded.
My point about West Berkshire is not the main subject of my remarks. I should like to make a much more fundamental point about the methodology under which SSAs are calculated. There is an important lesson to be learned in considering future methodology.
As I understand it, the current system is an attempt to decide the standard spending assessment in each area according to need. Obviously, the number of pupils, both primary and secondary, is the main consideration, 80WH but SSAs are also based on the number of pupils with additional needs of one sort or another—whether they come from single-parent families, have parents who live outside the United Kingdom or whose parents are on income support—on sparsity, which affects the size of schools and the amount of school transport needed, on the number of pupils who are eligible for free school meals and on the area cost adjustment. Most of us would accept that all those indicators in some sense affect educational needs. The question, however, is how much weight is given to each indicator.
The weight is calculated through regression analysis of education spending in each area in 1990–91. The system works only if one assumes that such spending was a fair indication of each area's needs. The flaw in the logic of the methodology is that we do not know whether such spending was an accurate indicator of real need. Indeed, it is fairly clear that it was not. In 1990–91, a number of shire authorities were Conservative-controlled, and spending on education in them compared with that on other things was probably lower than in areas elsewhere. On the whole, the emphasis in those shire counties was to try to keep down local taxation.
It is not my case to argue whether that was right or wrong; it does not matter to my argument whether it is politically more sensible to try to keep down local taxation or to push up education spending. My point is that, if one assumes that education spending in that year is dependent on need, one fails to take into account the fact that some areas were keeping down their education spending for political reasons rather than because their needs were not as great.
§ Mrs. Anne Campbell
I am grateful to the hon. Gentleman, who makes the point well. It is one that I shied away from making. It is certainly true that Cambridgeshire county council, which was a very low-spending authority in 1990, has suffered from that legacy ever since. I hope that that will be put right by the White Paper.
§ Mr. Rendel
I thank the hon. Lady for that intervention.
On the whole, those areas that were controlled by authorities that were trying to keep down local taxation tended to be ones with comparatively high sparsity and comparatively few pupils with special needs, whereas those areas where education spending was higher and the need to keep down local taxation was less of a priority tended to be ones with lower sparsity and more pupils with additional needs. The regression analysis may simply show which parts of the country were controlled by which party rather than the real weight that should be attached to the different need factors.
If we continue to use such regression analysis, we will always come up against that problem. To make sense of such analysis, one would have somehow to find a year in the past in which the spending of local education authorities was in proportion to each area's real needs. If it is not true that 1990–91 is such a year, it is even less true that any subsequent year is, because education spending has continued to be based on what it was in 1990–91 and the flaw has been maintained throughout. If we were to choose a year before 1990–91, we would 81WH have to find one in which every authority in the land was governed by the same party or al least had the same weight given to the area's real needs. Frankly, there is no such year.
My point is not only that West Berkshire would like some more money but that, more importantly, the use of regression analysis to discover what weight should be given to the various additional needs of different education authorities has a basic logical flaw. I beg the Government, when they come up with their new system, not to use such analysis but to try to come to an objective view of what extra money should be given to each area because of sparsity or special needs.
In practice, the Government have already accepted that regression analysis does not work, because the value that would be given to the sparsity factor according to such analysis is lower than the value that is currently given. It has become clear from the level of funding that is given to local education authorities with a high sparsity factor that the regression analysis has failed to come up with an adequate value. The Government have had to intervene and give an artificially high value.
Having accepted that such analysis does not work, I hope that the Government will abandon a false methodology that inevitably leads to a formula that is not fair and does not provide for the real needs of an area. I hope that they will look for a more sensible way of calculating the weight to be given to each value in future.
§ Mr. David Taylor (North-West Leicestershire)
I want to high light the Leicestershire position and to endorse the comments of my hon. Friend the Member for Cambridge (Mrs. Campbell), whom I congratulate on securing this debate at precisely the right time. We may be having a Dutch auction concerning who has the lowest SSA per capita, but Leicestershire is at the bottom of the league tables for county, not unitary, authorities. We are 6 per cent. adrift of the county average for primary and secondary pupils and about 12 per cent. adrift of the best-funded county, Hertfordshire.
We are pressing my hon. Friend the Minister to ensure that a more equitable system results from the review, which is at such an advanced stage. Yes, we want a national pupil funding rate and a minimum education funding level, but we must not fail to recognise the key measures of social deprivation—London weighting and rural weighting—and squeeze out those attempts to create a fairer system. We all know that there is no absolutely fair system, no holy grail in some cellar of the Department of the Environment, Transport and the Regions that, when opened, will reveal the perfect SSA formula., but we want to alter the mechanisms at the fringes in a way that will improve matters significantly for our own authorities.
I strongly welcome the recent initiatives, especially in the last Budget, for some direct funding of schools. I chaired the governing body of one of the largest schools in Leicestershire, Ashby Grammar school—despite its name, a comprehensive—until the general election. The last governors' meeting that I attended was heartened and encouraged by the announcement that we were to receive £50,000 for our standards fund, and that is most welcome.
82WH This may seem perverse, but I would caution against going too far down the path that leads to very high levels of funding going directly to schools, because that way lies the inevitable demise of local education authorities. I am troubled by the language that I hear, sometimes from Ministers but more often from Opposition Members, about local education authorities top-slicing and siphoning off funding that is intended for schools. If we are not careful, we will starve and accelerate the end of some well-regarded education authorities, with Leicestershire among them.
Leicestershire was one of the very first authorities to introduce an effective system of comprehensive education when the 11-plus was widespread and to introduce high-quality community education. We are highly regarded not only in the United Kingdom but in Europe for the musical, literary and cultural dimension in our schools.
I hope that there is no hidden agenda to let local education authorities wither on the vine. If there is, I cannot subscribe to it. Poorly funded though Leicestershire is, we are immensely grateful for the huge strides that have been made since 1 May 1997. The improvements in our overall grant and other forms of finance outstrip the gaps that we still have.
Let us put the matter in context. There are still one or two steps that my hon. Friend the Minister can take to ensure that the Department of the Environment, Transport and the Regions responds effectively and provides an adequate formula, but let us not overstate the case or have a secret agenda to end LEAs, particularly in areas with a record like Leicestershire's.
§ Mr. David Heath (Somerton and Frome)
I congratulate the hon. Member for Cambridge (Mrs. Campbell) on securing a debate that I have been trying to get for the past two months. She obviously has some secret that I do not share. I also congratulate the many hon. Members who have spoken today. There is an element of repertory company about this debate. My hon. Friend the Member for Northavon (Mr. Webb) and I have certainly had many debates on the subject with the Minister, and it is good to see that some of the old arguments are being rehearsed yet again. They are arguments that we have been urging both at Westminster and elsewhere for many years.
One of the problems is that there was a real expectation, or at least aspiration, that the new Government would introduce changes in this area, and many of us whose education authorities are losers have not seen the changes that we had hoped for. Indeed, to some extent, the distortion in the SSA distribution is increasing, which means that the disparities between the authorities with the highest funding per pupil and those with the lowest are increasing all the time. That is difficult to accept for the education of children in our areas.
I shall start with some basic premises. We cannot get away from the need for a distribution system, and whatever system is chosen will inevitably have its complexities. We should also accept the fact that there will be differences in the total amount of funding available to pupils in different situations in different parts of the country, because there are differences in needs. A simple flat rate would not achieve the sort of education system that we want to see.
83WH We should also accept the fact that some variation is acceptable, but it could reach a level that is unacceptable and that is the difficulty that many of us perceive in the system at the moment. The variation has grown to such an extent that it is clear that some children in some schools are not getting the entitlement that they should expect from a state education system in comparison with their better funded peers elsewhere.
Many components contribute to that, and we have already discussed some of them. For example, the area cost adjustment is significant. We have discussed that over the years, and we have asked what possible justification there can be for a system that gives additional funds to London and the home counties to meet so-called additional employment costs that simply do not exist, because we have a national wage rate for the major labour areas of teaching, the police and other services. Indeed, the argument could be made the other way that in some parts of the country—the west country, the midlands and the north—teachers tend to stay longer in their schools and reach the higher end of the scales, so that they cost more than teachers in London schools. That is why the area cost adjustment has been described in my part of the country for many years as a tax on the west. It is equally a tax on the midlands, the north and East Anglia, but not on the home counties, which do very well out of it.
Ministers have adduced the argument that stability itself provides a value. My argument—and the Minister has heard it before—is that stability of injustice is not stability but perseverance with an unfair system. Although I acknowledge the fact that we seek stability of funding throughout the education system, we want stability of fair funding, not stability of an unfair system.
My hon. Friend the Member for Northavon and the hon. Member for South-East Cambridgeshire (Mr. Paice) have made the point about the effect on other services of an inadequate education SSA, and it applies within the education service and outside. If a local authority does not have sufficient funding for education, it still has to channel what it has into the statutory education service, because that is a principal responsibility. The effect is that the non-statutory sector loses out. Other essential services have to be robbed to maintain the education service. The social services do not receive the money that they should and highway maintenance is affected.
In Somerset—I was trying not to mention Somerset too often, but I have failed—we have, for many years, moved massive amounts of money out of the highways budget into education to fund our schools and that has the obvious knock-on effect that the roads do not get mended. People eventually wonder why they are paying higher council taxes but getting a lower service for their roads, and they are right to do so. It is a political decision that we are happy to take, but it is based on a basic injustice in the national system of distribution.
We have already touched on the impossibility of reaching a consensus on the issue, and I urge Ministers not to retreat again behind the facade of waiting for consensus from the Local Government Association. That would be like waiting for Godot. It is not possible 84WH to achieve consensus, because that would mean that some members of the LGA were failing in their duty to represent their areas properly. Consensus cannot be achieved, because any system would create winners and losers—and the losers cannot be expected wholeheartedly to support that system. For many years, I represented the Association of County Councils in its negotiations with Government, and every time the right hon. Member for Suffolk, Coastal (Mr. Gummer), the then Secretary of State, would say, "Well, you do not agree about the matter; therefore, we cannot do anything." That is not acceptable, because it is the Government's responsibility to make the system fairer.
The Elliott review has been mentioned, but I hope that the Government do not go back to it. It was a disastrous review that made matters worse rather than better in many parts of the country. It was based on false premises and arrived at the wrong conclusions. I hope that we hear no more about Professor Elliott and his review.
The Government have, in previous answers on this issue, laid stress on the other funding mechanisms that are available and the extent to which they have been used to mitigate the unfairnesses in the SSA. It is true that, up to a point, standards funds and other funds have been used for that purpose, but, first, they are no replacement for basic, stable funding. Secondly, they put too much power in the hands of Ministers to decide what is appropriate, rather than the schools themselves—which is where we would like to see it. Thirdly, they involve new thresholds. In my constituency recently, we had the ridiculous situation in which a primary school lost £3,000 from the Government's welcome initiative to provide more money simply because its roll, which had been at 102 for the past six years, dipped to 99 because one family moved in the crucial month. A new family has moved in, so the school roll is back over the hundred mark, but the school has still lost the £3,000. That is an illustration of the blunt instrument of the thresholds for funds. The bidding system itself consumes huge resources.
Adjustments in the distribution formula will be made effectively only in the context of rising overall budgets. If there are real-terms losers across the system, people will object—and rightly—if their schools lose money because of a change in the system. If budgets are rising, a differential can he introduced that enables the poorest authorities to catch up a bit. That is what we ask Ministers to do.
We seek a system based on fairness and an entitlement on the part of children and schools to a basic level of funding. The proposals from the all-party group form one way of achieving that. I do not claim that that is the best way, or that the proposals accord with any party's policy position. The mechanism that has been put forward would not create effective losers, because it does not address the issue of the London boroughs: instead, it proposes that the least well funded authorities should have an increase to bring them up to the level of the median. I hope that the Government will take that seriously. The Government profess an interest in education and social justice, and this is a clear illustration of how they can put that into effect.
Ministers in the Department for Education and Employment understand the arguments very well, but the question is whether they are able to put them 85WH sufficiently forcefully to their colleagues to achieve real change in the system. What is the timetable for that change? Those are the questions that we would like the Minister to answer today.
§ Mr. Deputy Speaker (Mr. Nicholas Winterton)
Order. The hon. Member for South-East Cambridgeshire (Mr. Paice) has indicated that he would like to make an extremely brief contribution. He has listened to the whole debate, and I intend to call him.
§ Mr. James Paice (South-East Cambridgeshire)
I shall start my very brief contribution with an apology for the fact that I missed the first minute of the speech by the hon. Member for Cambridge (Mrs. Campbell). I congratulate her on securing this debate.
The central issue is clear cut. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has already spoken about the Prime Minister's broken promise of April 1997. It is nonsense to say that the matter was reviewed. Any fool can hold a review if all it amounts to is looking at the books and then closing them again. A review needs to be comprehensive, and the Prime Minister's promise will not be fulfilled if no changes are made.
The hon. Member for Cambridge criticised Cambridgeshire county council for not spending more than £4.7 million above the education SSA. However, as my hon. Friend the Member for South Cambridgeshire noted, the Government said, in their first 18 months in office at least, that SSAs were designed to provide a standard level of provision. Therefore, if Cambridgeshire were to spend at the level that the Government consider to be the standard level of provision, £4.7 million would be cut from the education budget.
Finally, the hon. Member for Cambridge spoke about transferring other resources as what she called an "add-on" to the education SSA. However that money would have to come from other services. The hon. Lady criticised the county council for taking £3 million out of education for use in other services a year or so ago, but she failed dismally to suggest which of those services should have borne a budget cut. In the year to which the hon. Lady referred, the social services budget was given a zero rise and so could not possibly have absorbed a cut. That means that roads, public safety, or some other service would suffer.
Thank you, Mr. Deputy Speaker, for allowing me the opportunity to contribute to the debate. Cambridgeshire people feel very angry about this matter. They see what happens over the county border and they believe that the April 1997 promise made in Cambridge to the Cambridge Evening News has been broken. Come the next general election, they will remember that broken promise.
§ Mr. James Clappison (Hertsmere)
I, too, congratulate the hon. Member for Cambridge (Mrs. Campbell) on securing this debate. We have heard good and well-informed speeches from my hon. Friends the Members for South Cambridgeshire (Mr. Lansley) and for South-East Cambridgeshire (Mr. 86WH Paice), as well as from the hon. Members for Bury, North (Mr. Chaytor), for Northavon (Mr. Webb), for Newbury (Mr. Rendel), for North—West Leicestershire (Mr. Taylor) and for Somerton and Frome (Mr. Heath).
Two points of controversy arise from the speeches by the hon. Member for Cambridge and by my hon. Friend the Member for South Cambridgeshire. My hon. Friend the Member for South-East Cambridgeshire referred to the promise made just before the general election about the area cost adjustment. There are many differences of opinion on the matter, and the hon. Member for Cambridge offered a defence of the Government's actions, but it is fair to say that nothing came of the Prime Minister's promise. People in Cambridge who relied on that promise will have been disappointed.
My hon. Friend the Member for South Cambridgeshire underlined the extent of that disappointment, when he referred to figures contained in a written answer given by the Minister. It seems that all the hon. Members present for the debate represent authorities that are bottom of the league, but the Department for Education and Employment statistics in the written answer of 10 May show that, on the basis of standard spending assessments per head of population, Cambridgeshire education authority comes 150th out of 150.
That is slightly surprising, as the hon. Member for Cambridge said that Cambridge—and, no doubt, other parts of Cambridge—has its own particular needs. I understand that Cambridgeshire has a rising pupil population.
§ Mr. Clappison
I am afraid not, given the time constraint. I shall come to the point that the hon. Gentleman made earlier in a moment. As he knows, tables of SSAs per head of population are important, given the knock-on effects on other services. My hon. Friend the Member for South-East Cambridgeshire underlined that, as did the hon. Member for Northavon.
Why is Cambridgeshire bottom of the league? Is there a clue in the identity of the authority in 149th place, which is Oxfordshire? I began to wonder whether the residents of those authorities were being punished for the presence of elitist institutions in their midst, but I believe that more of an explanation can be found in the detailed speech from my hon. Friend the Member for South Cambridgeshire. His analysis of the changes that have taken place in SSA distribution under this Government was correct. The changes have happened quietly, while the Government held the review and prepared the Green Paper.
The Government appear to have shifted away from the previous system, which took into account needs, costs and resources. The priorities have changed, and weight is now placed on different factors. That has disadvantaged shire counties such as Cambridgeshire.
Mention has been made of SSA per pupil. Cambridgeshire has slipped markedly down these rankings too during the lifetime of the Government and is now further below the average for SSA per pupil than it was in 1997.
87WH Other changes have taken place since the election. There has been a shift in resources allocation within the SSA, and there has been a very important change in the proportion of SSA funding devoted to core funding for schools. As my hon. Friend the Member for South Cambridgeshire said, that amount has shrunk since the Government came to power. It has been estimated that this year the proportion of funding devoted to schools from SSAs, after local authority contributions are taken into account, will be 92.4 per cent. In 1997–98, the proportion was 98.2 per cent.
Although it is right to say that the proportion of funding for schools coming through the standards fund has grown, that has been at the expense of the proportion devoted to core funding. Many people have pointed to the consequences for schools. Dr. Keith Major of the Wiltshire Association of Governors found that the core funding for his school fell well short of what the Government promised. In an open letter to the Secretary of State, he said:This does not take account of the additional funds for specific purposes available to schools from the Standards Fund. It does seem ludicrous to be having to consider further redundancies in support staff only to be recruiting others, albeit on short-term appointments, supported by the Standards Fund. It should not be necessary for a school to have to rely on this fund to maintain the basic activities of a school.The debate has to be set against the background of a system that has become ever more complex. It was never exactly straightforward, but the Government have heaped extra layers of complexity on it. They have channelled funds through many different streams of funding, to the perplexity of schools, governors and local education authorities alike. We want a more straightforward system that will bring more direct funding to schools. Money should follow schools, and heads and governors should take their own decisions.
Judging by the contributions from the hon. Member for Cambridge and others, we appear to have some support from hon. Members who want more direct funding for schools. In contrast, the Government seem to want to create a very complex system.
We shall wait and see whether the Green Paper will introduce a more straightforward and fairer system, but we doubt that it will remedy all the cries of disappointment. We believe that those who want a more direct and straightforward system will be disappointed by the Green Paper but it is possible that they will get some consolation and satisfaction in the fullness of time—which may be a shorter period than is currently envisaged by Labour and Liberal Democrat councils.
§ The Minister for School Standards (Ms Estelle Morris)
May I first congratulate my hon. Friend the Member for Cambridge (Mrs. Campbell) on securing the debate? She told me last night that she first requested it more than two months ago, so the hon. Member for Somerton and Frome (Mr. Heath) has some time to wait yet.
I find myself in an unusual position, although it is always the same when we debate standard spending assessments. I do not disagree significantly with the 88WH comments of most hon. Members who have spoken in the debate. There is a genuine issue about authorities that are underfunded. It is perhaps opportune that we are in Westminster Hall, where we do not tend to sit in such party political groupings. In the debate on SSAs, the dividing lines of the battle are not drawn along political lines. There is no member here today who represents an inner London borough. As the hon. Member for Hertsmere (Mr. Clappison) did not say so, I will say on his behalf that we are the only two Members here whose constituencies are not massive losers because of the SSAs that relate to Hertfordshire and Birmingham.
Of course there are massive disparities. I do not for a minute defend the fact that children who go to school in Bury, Cambridge, Northavon, Somerset in Oxford or anywhere else should be worth less than those who go to school elsewhere in the country, or that their teachers should have to manage with fewer resources.
The hon. Member for Newbury (Mr. Rendel) summarised the position. In the past, the formula was not perfect, but it has become less perfect as we have tried to adjust it year after year. It is like trying to keep a leaking boat afloat. We plug each hole as it arises, but new initiatives cause funding problems, so we knock the balance out of the funding system elsewhere.
Hon. Members will know, because I have talked about it so often, that I am deeply unhappy at having to explain a system that is flawed. I wish it were otherwise, and I, too, wish that it could have been changed in a year. I will come on to that in a moment. However, the Government do not believe that the way in which schools are funded and the inequality in funding between children in different areas is somehow defensible for reasons of social justice or fairness. To that extent, we are all on the same side.
Since the election, there has been far more public concern about the funding system, yet it is the same as it was before the election. Opposition Members say that that is because expectations were raised and the change was not made in the first year. The Government were right to put this on the agenda. They were right to be open and say that the funding system was not fair enough. I suspect that it was not on the agenda before the election and was not such an issue of public debate across the country because not only did the previous Government do nothing about it, but they did not put it on the agenda or draw attention to it. Not only did they not try to rectify the system, but they never publicly acknowledged that it was wrong.
I do not want to be party political about this, however, because I agree with Opposition Members who have said that the only way to get this right will be to look at the country as a whole. For once—and this will be tough for all of us—we must put party political differences aside and try and secure a system that will give local politicians, whatever their party, an equal chance of running an education service that they can be judged on, without being hampered by inequalities in the system.
The issue is probably more in the public domain now because as more money is pumped into education, the formula becomes more important. If the formula is not fair to begin with, inequality is piled on inequality. Therefore, one is made angry twice, thrice, four, five and 89WH six times. Not only was the base budget not fair in 1997, but Members, local authorities and parents have seen a Government who have honoured their commitment to putting more money into education, and as long as the flawed formula is used, people feel that they are suffering even more than they did in the past.
We could have distributed the £50 million that was made available in the Budget. A number of hon. Members have mentioned this. It would have been reasonable; it might even have been expected. We could have distributed it along SSA formula lines. It would simply have meant that the constituencies of hon. Members here today and others like them would not have received as much money, while others, like me, would have seen schools in our constituencies benefit from more money. I think that what we did was right—it was a small sign, a small acknowledgement. We paid that £50 million through a special grant and, where possible, we took the opportunity to distribute it as a flat rate. There was an element of rough justice in its distribution—I feel desperately sorry for the school that lost its pupils—because it was done quickly, and we wanted to make it as simple and fair as possible.
In the time I have left, I want to concentrate on what we are going to do about it. I accept that there is an obligation to do something. I say openly that I would be deeply unhappy if the Government said in July, "Sorry, we could not get agreement, and will not do anything." Let us go back to what happened—I was there, and I know. It was not a case of opening the books in the first year and saying, "Dear, dear, we can't get agreement, let's move on." There was a more honest and detailed attempt to adjust the formula in the first year.
I take seriously what hon. Members on both sides have said—that if we wait for the Local Government Association and everyone to agree, we will never get anywhere. The Government are responsible for making the decision. We have to accept what the hon. Member for South Cambridgeshire (Mr. Lansley) said—that is why we were elected, and we will have to carry the can whether we get it right or wrong.
The Government need to know that they have explored, as thoroughly as possible, all the different viewpoints. Any decision they make will, inevitably, not suit some local authorities, parents or schools, but the Government need to be able to say, "We listened and explored the solution that you came up with, but at the end of the day, we could not agree with you."
90WH I will be honest—within the first year that the Government were in office, it was not possible to come to that conclusion. We could have said that we had opened the books, seen the figures, looked at the options and now we are making the decision. I would have felt ill at ease doing that. We need to go through the necessary consultation process and explore the range of options in a way that makes such a significant decision defensible for a long time, because I do not want to have to go through this again. What we come up with in the Green Paper will have to be a system of funding that serves us well for years to come. Otherwise, is not fair to Members of Parliament and pupils—it is not even fair to Ministers, because more time is spent, research done and work undertaken to get this right than can be imagined.
Where do we go from here? I did not see it in the first year, but one of the advantages of having gained some extra time was referred to in a very interesting point made by my hon. Friend the Member for Bury, North (Mr. Chaytor) and by the hon. Member for Newbury. Everyone wants a minimum entitlement, but they want a system that acknowledges different needs in local authority communities. Nobody supports the idea of a minimum entitlement with no added extras. My hon. Friend the Member for Bury, North threw out, for instances, the Department of the Environment, Transport and the Regions indices of deprivation. That is an interesting idea that I had not thought about particularly before. Perhaps the advantage of having bought ourselves three months is that we do not have to build on a system that was flawed because it looks back to 1990. Perhaps we will be able to do something more radical so that we do not adjust the weightings to the values that dictate the SSAs, but change the way in which we measure minimum entitlement and added benefit on top.
Nobody would expect me to say what is likely to be in the Green Paper. I can simply give assurances that the hon. Members of all parties who have, on this issue, been excellent representatives of their constituents and have spoken vociferously will have their voices heard in Government. I will, as I have on many previous occasions, give an undertaking to feed their views back to the Government and make sure that they are a proper part of the decisions and discussions that we will eventually hold.