Schools Funding

HC Deb 17 September 2003 vol 410 cc272-94WH

2 pm

Andrew George (St. Ives)

I am pleased to have secured this debate. The subject is of deep concern to many right hon. and hon. Members, especially in the current financial year when many schools are facing significant funding crises. I raised the issue in this Chamber on 2 April at column 309 of Hansard. The Minister for School Standards responded to that debate, which was entitled "Education Funding (Cornwall)". Our forthcoming 90-minute debate will give us the opportunity to consider more wide-ranging issues, and I have no doubt that other hon. Members will wish to ask questions about schools in their constituencies.

I know that it is customary for debates in this Chamber to descend towards a party political spat, but I want at least to set the right tone. Now that the problem has been acknowledged, I hope that our debate can be constructive and conciliatory. I say that for three reasons.

First, I must congratulate the Government on having achieved many of the outcomes that we want for our schools. For example, the school building programme is at an unprecedented level of improvement and development. Wendron school in my constituency has just had a new school and, after many years of pleading, Bodriggy school is now coming on to one site of the school in Hayle. Many other building programmes have been needed for a long time, and developments such as general investment, identification of need and promotion of teacher training are much appreciated.

Mr. Graham Brady (Altrincham and Sale, West)

In a wholly conciliatory and constructive sense, may I ask whether the hon. Gentleman agrees with my identification of one of the greatest tragedies of the schools funding crisis this year? Schools have shifted money, earmarked for capital projects, to revenue budgets to keep the staff on which they depend to educate their children.

Andrew George

I acknowledge that problem; in fact, I shall be referring to it in a moment.

I come now to the second reason why our debate should be constructive and conciliatory. I noted that, in the live online webcast prior to the commencement of the present academic year, the Secretary of State for Education and Skills admitted that the Department had made a mistake. I could not cope with a live online webcast, but I am told that that is what he said via that medium, which is beyond the wit of someone as IT challenged as myself.

Thirdly, the Secretary of State announced his intention to deal with the problems that he now acknowledges exist in many schools with the addition of £800 million from departmental resources over the next two years. Earlier this year we were promised a likely settlement for school budgets in the next financial year.

In the same spirit—I have to be honest—I, too, must apologise for having got my predictions on 2 April rather wrong. I said that "many schools that I have visited recently face the stark choice of sacking staff and increasing class sizes or going into debt. They may not go into debt this year but they will do so next year".—[Official Report, Westminster Hall, 2 April 2003; Vol. 402. c. 310WH.] I failed to get that right; in fact, the situation was worse than I said it was, because some schools are going into debt this year. Many classroom assistants have already lost their jobs—something that I did not mention on that occasion—and the impact is deeply felt.

Mr. John Horam (Orpington)

The hon. Gentleman just touched on classroom assistants. One of the problems in the present crisis—certainly in London, and perhaps in Cornwall, too—is that, increasingly, classroom assistants are being employed instead of real teachers, often even when a supply teacher is available.

Andrew George

I have always understood that the purpose of classroom assistants is to assist the teacher. When classroom assistants are employed effectively, and provided that the classroom can cope, I am reassured, although my concern about large class sizes does not totally evaporate.

Ms Candy Atherton (Falmouth and Camborne)

In the spirit of constructive information, may I ask whether the hon. Gentleman is aware that in January 1999 Cornish schools had 3,570 full-time equivalent teachers, and that by January this year, the number had leapt to 4,020? We need to remember that when talking about any changes in numbers.

Andrew George

There are statistics and statistics. The local education authority has told me about both compulsory and hard-fought voluntary redundancies. In a moment, I will go through some of the extremely difficult circumstances in which many schools have found themselves this year; they are not congratulating the Government on teacher recruitment. The hon. Lady made a brave attempt, but I am not sure that her comment was entirely in the spirit of what the Secretary of State said. He has admitted that there is a serious crisis. All parties accept that, and we cannot simply put a veneer on the situation by the selective use of statistics.

The Secretary of State and the Department have accepted that, in Cornwall, the LEA has passported more money than the Government intended it to. In fact, the agreed figure is 105 per cent. Therefore, some of the claims that the Department made in spring and early summer about LEAs not passporting money to schools were simply not true; in Cornwall, the LEA had gone over the top. Obviously, debates ensued, although my debate came earlier than some of the others. I certainly made it clear that national insurance contributions, teacher pensions, performance-related pay and other matters, all of which arose in one year, clearly increased costs for many schools. Many of them could not cope with those factors within their budgets from the Government.

There was eventual acceptance by the Department for Education and Skills that its model was insufficient; it did not take into account those additional costs. The Secretary of State apologised, which was much appreciated, and the Dept promised to work to find a solution.

I have kept in close contact with the Department and my schools since that debate. In a letter of 11 June, the Minister for School Standards, with whom I have corresponded on a number of occasions, helpfully said: "LEAs and schools would be given flexibility to use their devolved formula capital funding"— which the hon. Member for Altrincham and Sale, West (Mr. Brady) mentioned earlier— "to support their revenue budgets, where failure to do so would lead to excessive instability within the school." However, having made those concessions, he went on to say: "It is now for LEAs, with their schools, to take matters forward locally and to sort out remaining problems." I am pleased to say that, since June, the Department's position has shifted, and it is prepared, quite rightly, to get more involved in tackling many of the problems that a lot of schools face.

I have kept regularly in touch with schools. In the last few days I have heard from the following primary junior schools: Bodriggy, Connor Downs, Coverack, Grade-Ruan, Gulval, Leedstown, Marazion, Mousehole, Mullion, Nansloe, Newlyn, Parc Eglos, Pendeen, Penpol, St. Erth, St. Ives infants, St. Levan, St. Uny and Wendron. I have also heard from secondary schools: Humphry Davy and Mounts Bay schools in Penzance, and Mullion and St. Ives school. A picture emerges from that ad hoc collection of data. I will quote from some of the examples because it is important that people understand the impact that this year's budget settlement is having on some of the schools.

Mary Holloway, the head teacher of Grade-Ruan Church of England school, telephoned my office just yesterday. Grade-Ruan is a successful school, which achieved beacon status two years ago; I was proud to be there on the day that that was announced and presented. Mary Holloway said that the school has had a really tight year; all reserves have now been used up and, in January 2004, redundancy procedures will be issued for August. That means that one full-time teacher out of the current four will be made redundant, resulting in increased class sizes across mixed school years. That will affect standards because it is a village school.

Rod James, a relatively new and very enthusiastic head teacher from Humphrey Davy secondary school, told me in an e-mail yesterday: "What we set appeared to be a balanced budget. It also appears that we have not made anyone redundant. However

1. (1)We did not replace at least 1.5 staff that resigned.
2. (2)We have not replaced 2.5 learning support assistants that resigned.
3. (3)We have had to draw down all of our devolved capital money to make the staffing budget balance.
4. (4)We have had to raid the small reserves we had, the committed pension fund, almost all the staff training budget, the repairs and maintenance, and the capital projects planned.
5. (5)Capitation to departments was reduced to an unsustainable level.
6. (6)The only way I can continue refurbishment is by committing 2004–5 and 2005–6 devolved capital.
275WH
7. (7)The cracks are now appearing in the budget as we say no to everything that staff propose including new books for new courses.
8. (8)We will be in deficit before the end of the year.
9. (9)Some of this reduction was planned because we knew that we would reduce by about 15 pupils.
10. (10)The crunch will be in the 2004–2005 budgets. Although we will start to grow again, we will have no carryover, reserves, devolved capital, a back log of repairs and expectations.
11. (11)To create a budget with these funding levels we will have to cut staffing by at least two teaching staff and three non teaching staff.
12. (12)This is at a time when I have a legal requirement to introduce the workload agreement and when 22 of my staff will expect to move to threshold three, a cost of more than £25,000, which the government will not fund.

This is all set at a school that the government should be proud of. A school that works in one of the most deprived communities in Britain, and yet like other Penwith schools achieves above national levels at GCSE, and key stage 3 … A school that works hard to be highly inclusive, taking a truly comprehensive intake and being successful with them."

Roger Bunt, the head teacher at Mullion community primary school, where I used to go, told me that a special needs teacher has been made redundant, that there has had to be a "change from 5 classes to 4 for part of the week", and that the "Head is teaching for 3 days rather than 2."

Paul Hodson, the head teacher at Penpol school in Hayle, the primary school that my children attended, said this to me about the standards funds: "It is sad to think that the government spent so much money on these very good schemes, designed to be delivered by Teaching Assistants, only to cut funding with so many schools now laying off the very people who were to lead them. At Penpol we have decided to keep everyone in post and try to bring in as much new money as possible. I bring in around £5,000 a year to the school working as an Ofsted inspector and I will plan to double my number of inspections this year."

Mr. Mark Prisk (Hertford and Stortford)

I congratulate the hon. Gentleman on securing the debate. Does he agree that in the individual cases that he describes one of the common patterns revealed by the comments of head teachers and teaching staff generally is that the many and varied funding streams complicate the issue, they have clearly upset Government funding and they are working against schools being able to plan properly for the future?

Andrew George

I am sure that schools, head teachers and their governors do not wish to reject the additional money that has been made available through various standards funds, funds to reduce infant classes and so forth, although they may sometimes find the strings attached to those funds irksome and bureaucratic. However, we have learned over the past year that when funds are withdrawn at the same time as significant additional costs are placed on a school, that has a significant impact on the school.

If standards funds are to be reduced, that needs to be planned. The reduction must be achieved in a way that does not result in many schools being left high and dry in the current financial year—which they have told me is the situation. Richard Zolkiewicz, the head teacher at St. Ives secondary school, told me that that is hard to quantify, but that this year there is a "Huge deficit of the order of approximately £100,000." Schools are being deeply affected.

I have given the Minister for Lifelong Learning, Further and Higher Education advance notice of some of my questions. I hope that that was helpful, and that he will have enough time to answer them.

Mr. David Drew (Stroud)

I apologise for intervening in the first few minutes of this interesting exposition, but I have to attend a statutory instrument Committee, so I shall not be present for long.

Does the hon. Gentleman agree that two specific things have gone wrong this year? First, because Gloucestershire has now been included in the area cost adjustment, it has done significantly better this year than previously—we used to moan like hell about those who got it and those who did not. However, I presume that Cornwall is still outwith the area cost adjustment, and that has a significant impact. I have always argued that the area cost adjustment should be removed. Secondly, until we grasp the nettle of preparation for early retirement and redundancy throughout the entire public sector, there will inevitably be a cost implication. We must be open and honest with teachers and other public sector workers about the fact that retirement at 60 is the likelihood rather than the exception.

Andrew George

I am grateful for that intervention. Time is moving on so I shall try to be brief, and I am sorry that the hon. Gentleman will not be present for the entire debate. The Minister has heard the point that he made about teacher pensions and redundancy ages, and I have some sympathy with it. It is important that the Government, LEAs and teacher unions reflect on that matter.

With regard to the area cost adjustment and local government settlements, the hon. Gentleman is right to assume that Cornwall always seems to get the rum end of any deal for formula funding. Schoolchildren in Cornwall seem to be given significantly less per head than is the average for England. The area cost adjustment has not worked out well for Cornwall, because there are low wages. In fact, it results in Cornwall getting significantly less than we should.

Perhaps the Minister will tell me how the announced extra £800 million for the next two years will be spent. That sum was mentioned earlier. Will there be a formula for that? When will LEAs and schools be told about it? Will his Department make it clear that it will support schools that have no alternative other than to go into budget deficit? When will the LEAs be told the indicative budget for the next financial year? How much of next year's funding for schools will need to be found by council tax payers? Will the guidelines on teachers' performance-related pay change, because those increases are not 100 per cent. centrally funded?

What are schools supposed to do to stop making teachers and support staff redundant? How can secondary schools applying for specialist school status meet the criteria for sound financial management, if, through no fault of their own, they are unable to live within their budgets this year? I understand that that is one of the criteria on the basis of which a hid may proceed.

Perhaps the Government will accept that current demographic trends, as is widely predicted, mean that primary school rolls will decrease. If so, does the Minister agree that that would provide an opportunity to consolidate and build capacity and resources, thus achieving a reduction in class sizes, rather than an opportunity to reduce the number of primary school teachers? I believe that the Department has a prediction that by 2010 the reduction could result in the loss of as many as 6,000 teachers. This is a golden opportunity that the Government could grasp.

What is an appropriate level for school reserves? What are schools supposed to do to maintain standards, particularly in learning support and special educational needs? What plans has the Department for the standards funds? The original plan was that they be removed in the next financial year and the year after that. Will they remain, and if so, are they to be used for the same purpose? What assessment has been made of the flexible use of devolved formula capital in building improvements and developments?

Despite a previous debate and an exchange of correspondence with the Minister for School Standards, many difficulties remain in Cornwall. Will the Minister commit his colleague to meeting me, together with representatives of schools in my area, to go through some of the issues that I have mentioned today? There are, of course, many more issues remaining. I am grateful for the forbearance of hon. Members. I look forward to hearing the Minister's reply.

2.22 pm

Mr. Mark Prisk (Hertford and Stortford)

I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate, not least because I, too, am from his part of the world originally. This is a vital and timely debate, because it deals with something that is strongly represented in my postbag and of great concern for many parents in my constituency.

Moving a little further east of Cornwall, in Hertfordshire the problem of funding our schools this year is severe—that is the word used by many secondary school head teachers in my area. Indeed, according to the Hertfordshire Association of Secondary School Headteachers, which has conducted a survey, 95 per cent. of Hertfordshire's secondary schools have had to make significant cuts this year, including more than 70 teaching posts. Some 90 per cent. of those schools expect that they will be in deficit, despite having already raided their reserves. The average deficit in the county is expected to be £63,400 per school—a total of £4.8 million throughout the whole county. That is a significant sum.

I am delighted to see that the Minister is with us today. However, I am sure that he will understand that it would have been equally pleasant for us if the Minister for Schools Standards had attended. Perhaps, having made notes, this Minister will tell us at the end of the debate how those deficit figures compare with the national average.

On 14 July I met with the heads and deputy heads of the schools in Hertford and Ware. Indeed, I have met heads and deputies in Bishop's Stortford and Sawbridgeworth, too. We are lucky because in our county we have many excellent professionals working in schools. However, in all honesty, I have never known them to be more anxious about their schools' future or more depressed about their own. They have explained to me that, although this year is difficult, they fear that the worst is yet to come.

As Members know, our schools face a raft of changes to the standards fund, the EFSS—the education formula spending share—and the Learning and Skills Council. We have had deep cuts in area cost allowances, and there is a continuingly significant gap between what the Government promise on employment costs and what the money provides. In many ways, the Government have failed to think through or cost properly the combined effect of the many changes. Individual changes may not be welcome, but for some schools they are manageable. However, together the changes are confusing. The financial impact means that many schools in my constituency in east Hertfordshire and across the county will face even larger shortfalls in the years to come.

That leads me on to a broader point that I sought to raise briefly with the hon. Member for St. Ives. The complexity of initiatives, proposals and announcements as well as the small streams of funding and the hypothecation of money means that head teachers spend more time chasing little pots of money than undertaking the job for which they were trained. Many of them would welcome what my own party is looking at and what others with expertise in the field have suggested—namely, sweeping away the complexity and giving our schools genuine flexibility to meet the needs and priorities of their areas. I hope that the Minister will address that broader point. The danger in discussing school funding is that, if we look solely at which area does slightly better or slightly worse than any other, we ignore the crucial and fundamental way in which the Government have sought to skew education funding.

I want to look to the next year in detail. For Hertfordshire, the gap between what the county requires and what it has stands at £15.2 million—that is based on the Government's own formula. That is bad enough, yet it could swell to a black hole of £25 million if, as seems likely, schools are yet again unable to draw on their reserves. Over the past year, schools in Hertfordshire, many of which have been putting money to one side to bid for things such as the specialist school status that the Government have been promoting, have had to raid their reserves. We have seen £10 million of that money put into current expenditure to ensure that schools can cope this year. That could mean, in the coming year, a gap of £25 million across the county.

What does that mean in real terms? In human terms, almost 600 teachers in our county alone could see their jobs go. That is bad enough, but the impact for some schools could be even worse. Subjects would have to be curtailed, options for GCSEs and higher levels would have to be cut, and classes would have to be missed. The impact of that would further demoralise remaining staff. They will find, yet again, that they are being asked by the Government to do more with less.

I wrote to the Secretary of State for Education and Skills about those problems on 17 July, highlighting all the fears and raising specific questions. Sadly, I did not get any answers. I merely received a standard letter from the Minister for School Standards, who obviously has something more important to do today. In that response, he sought to pass the buck by implying that the local education authority should share the blame. I cannot speak for other areas, but I can tell this Minister that the view in Hertfordshire is not that the LEA is in any way responsible. I asked my local schools, and not one reported any money being withheld by the county council. Indeed, the chairman of the Hertfordshire Association of Secondary School Headteachers went further. In his letter to the Secretary of State on 6 June, Mr. Alan Gray stated: "We have worked closely with Hertfordshire LEA and are confident the LEA has passported funds to schools as you require." The fault lies firmly in Whitehall, not in Hertford. I hope that when the Secretary of State meets with the all-party—I stress that—delegation from Hertfordshire next month he listens and responds accordingly.

Will the Minister assure me that all the changes in employment costs for the forthcoming year will be matched? Will he undertake to ensure that when our schools face particular problems from the combined effect of differing schemes the Government will be open to reconsidering whether the combined effect is detrimental to certain types of school in certain types of area? Are the Government prepared to recalculate the net effects of those changes? Will he ask his colleague the Minister for School Standards to ensure that when he responds to Members in future, he does so according to the concerns that they have raised about their LEAs and does not merely issue a standard letter? Frankly, that letter was irrelevant and somewhat insulting to those people I am trying to represent—that is the crucial part.

All we seek is a fair deal for our schools. However, unless there is a significant move from the Government to match the funding of the many initiatives that they promote and unless they ensure that the combined effect of departmental plans is properly accounted for, the danger in Hertfordshire is that many teachers will be lost and many of our pupils left behind.

2.31 pm

Mr. Jim Cunningham (Coventry, South)

I thank the hon. Member for St. Ives (Andrew George) for securing this timely debate. In Coventry, the Government have done much about class sizes and funding. Nevertheless, there is a problem. Last Friday, the three local Coventry MPs met the director of the local education authority. The LEA raised a number of issues with us. It wants those issues to receive Ministers' attention and it wants to receive some answers. Prior to that, we met the trade unions. They also voiced concern about the arrangements for this and future years.

The view of Coventry's education authority is that there have been problems in relation to the transition to a new system for education and local government finance. The LEA says that the underestimation of the cost of national insurance, pensions and salaries is another factor that has been giving it many concerns. It has also expressed concern about standards fund changes and I hope that the Minister will consider that. Although Coventry recognises that it has done reasonably well, it still has problems of that type.

This is the second time that I have spoken in a debate about education funding, and particularly about school amalgamations and closures. I initiated a debate two years ago. Coventry is going through the same exercise this year and will be going through it next year. Let me highlight some of the problems. Sixteen schools have had to use capital and convert it into revenue—something that the hon. Member for Altrincham and Sale, West (Mr. Brady) mentioned earlier. Another three schools needed loans, which demonstrates that we have some serious problems. There is pressure to pull back in budgetary terms to cover the shortfalls. There are probably at least 43 teaching jobs that are at stake and could go, plus 27 support jobs.

Although Coventry recognises, as most people do, the extent of the Government's investment in education, there are still problems that must be addressed. I understand that the cuts to the standards fund will be deferred from 2004–05 to 2005–06. However, we do not have much detail, so may we have more detail about what will happen?

There is funding for changes, which can give rise to concern about industrial relations. That is a big concern for Coventry, but money may have been allocated for that.

In conclusion, some hon. Members who spoke before me have covered some of the concerns and I do not want to go over them again, but I have highlighted the concerns of Coventry's education authority about the impact that the changes may have. The problem is that while we recognise that the Government have attempted to raise standards and done a lot for education, all that good work could be undone if the problems are widespread throughout the country. I hope that the Minister can give some assurances on that. Members of Parliament and trade unions in Coventry would certainly like to talk to him about those problems.

2.35 pm

Sitting suspended for a Division in the House.

2.50 pm

On resuming—

Sue Doughty (Guildford)

First, I congratulate my hon. Friend the Member for St. Ives (Andrew George) on bringing this issue once more to the House's attention. It is part of a long-running saga for all Members present and many others. Members for Surrey constituencies always seem to be standing up pleading for special treatment, or we are treated by the Government as if we are. That is not the case. In Surrey we are experiencing the same problems as those that have been so eloquently described by my hon. Friend and by the hon. Members for Hertford and Stortford (Mr. Prisk) and for Coventry, South (Mr. Cunningham). We are struggling with our schools.

Ours is a tale of despair. We have all been closely in touch with our schools and have talked to our head teachers. The Government wrote to me with a list of schools that received school achievement awards, and although they have been controversial, the Minister suggested that I should go and congratulate those schools' staff. I was delighted to take the opportunity to thank all the staff at those schools for the tremendous work that they have done to get those awards.

As is the nature of such occasions, I asked to stay behind for coffee so that I could have a chat with the teachers, classroom assistants, teaching assistants, dinner ladies and everybody else, because giving them a chance to talk to us is part of the day. What did they talk about? A teacher who had changed career in her late 20s said to me, "I love teaching in this school but I am not staying because I cannot afford anywhere to live. I've done living in bedsits all my life and now I need to move forward." A head teacher said to me, "My struggle is holding on to staff at all, yet we have been developing the role of teaching assistants. They look, quite reasonably, for a pay rise and career development, some hoping to train as teachers, but I cannot pay them any more."

One problem is the 25 per cent. turnover of teachers, year after year. There are schools in Surrey where hardly one teacher stays for the length of a child's course through school, so that child will not have the same teachers at the end of school life as at the beginning. We have problems recruiting head teachers. One of the few ways in which we are fortunate in Surrey is that we often attract extremely good teachers by virtue of the fact that they are married to a much higher earner in the county. That takes us back to the days when a teaching job was a second profession in Surrey.

Mr. Prisk

The hon. Lady has described the difficulties that her schools have in retaining their head teachers. Does she share my concern that many leave because they do not feel able to carry out their professional job? They are constantly having to chase lots of little pots of money rather than having the professional freedom to do the job for which they were trained. Does she agree?

Sue Doughty

I thank the hon. Gentleman for that intervention. He is absolutely right. A disproportionate amount of time is spent chasing money, not only by heads, but by chairs of governors and other teachers. They are constantly chasing initiatives and recasting budgets. One result of the Government having left our schools so short of money has been a huge stress on the governing bodies and non-teaching staff—those responsible for managing budgets. They should be managing budgets to go forward, but at the moment they are managing budgets to survive. We have a problem because career aspirations are stunted—if someone wants to get on, they move away from Surrey.

A further aspect of this tale of woe is that the director of education for Surrey has been in close contact with the Government at every opportunity to explain to them the fact that Surrey passported its money through and to show that the finances are completely transparent. We received visits from the Minister for School Standards and, surprisingly, the Minister for Local Government, Regional Governance and Fire on 17 July. On that morning, Surrey MPs and members of the Surrey education department met the Minister and, with the charming smile that he knows how to do, he said, "I can't tell you what this news is, but I am sure you're going to be pleased." We listened to the announcement and more money was on the table, but it was not all the money we needed to stop the rot.

The announcement said that there was to be a minimum per-pupil guarantee for schools. That has taken away the freedom of counties to juggle in such impossible situations to make the sums balance, which is a problem. This is not an addition to the current funding received by schools. There is no additional money to pay for the per-pupil allowance. Teachers still have to be paid for and the money has to be found—Surrey had one of the highest council tax increases this year to make good Government shortfalls, not extra spending. There is no more money in the pot from the council tax.

Schools' balances have been reduced by £12 million. Of Surrey's schools, 66 will have deficits totalling £7.5 million and 17 are seeking licensed deficits from the county council because their deficits will exceed 5 per cent. Indeed, Guildford county school in my constituency wants permission to go into the red by more than £170,000 each year for the next two years, with overspending continuing until 2008. That school's annual budget is £2.6 million. How are those schools that are going into deficit going to repay that debt? In future years, are we going to see a cycle of money being spent on servicing that debt rather than on what it should be spent on? How is the debt to be managed and how will schools plan their budget?

As has been alluded to by other Members, there is a real threat to the quality of the curriculum, the teaching staff and the courses that will be offered in our schools. Guildford county school is planning teacher redundancies, although it hopes not to have to make any redundant. However, teachers are not being replaced. We have a major problem, which is one that the Government knew was going to happen. They had endless information, and delegation after delegation told them what was happening in Surrey schools. There is no comfort in saying that Surrey is an affluent county. They could be cynical and say, "If they are so rich in Surrey, they could pay for private education." Many do, but many others cannot afford it—the housing costs in Surrey take care of that. Disposable income is no higher than anywhere else in some families.

My concern is for the Minister to recognise where the knife has cut too deeply. He needs to understand that no extra money will come from council taxes—our pensioners are struggling as it is to meet the current increases. He must understand that we need to operate in a debt-free environment, and that we need to move on from that to encourage our schools and ensure that they do not have to take money from the school fabric fund, which has been badly raided, to pay for teaching salaries. We should give real hope, encouragement and fair reward to the people who serve our children so well.

2.58 pm

Mr. David Rendel (Newbury)

This has been an excellent debate, although sadly it has been attended by far too few hon. Members, given the importance of the subject. I would like to start by congratulating my hon. Friend the Member for St. Ives (Andrew George) on raising the subject again. As my hon. Friend the Member for Guildford (Sue Doughty) said, it is of fairly widespread concern across the country. It has affected Members throughout England, and I have no doubt to some extent in Scotland and Wales, although their funding for education is very different. In this country, there has been an enormous problem throughout a large part of local education authorities. It is good that we have the chance to debate the subject again, although it has been debated this year on different occasions.

It is interesting how the debate has changed during that time. The Government refused to accept any blame when the problems first became apparent. They were prepared to blame almost everyone except themselves: the LEAs for not passing on the money that they were given, the head teachers for not managing their budgets properly, and the governors for not running the schools efficiently. That was at the start when the Government were perhaps not showing any humility.

Later on, as my hon. Friend the Member for St. Ives pointed out, the good news was that the Government began to accept part of the blame. In July, the Secretary of State admitted that mistakes were made in his Department, and that they had led to a serious shortfall in funding for schools. "Mistakes" barely brings out the extent of what had happened given the catalogue of incompetence and evasion that characterised the Department's handling of the matter. Nevertheless, I honour the Secretary of State for admitting that. It was brave because few Secretaries of State are prepared to accept that there have been problems in their Department's handling of anything. It was a welcome admission from him.

When the Secretary of State made his statement to the House, I was able to catch the Speaker's eye and ask a question. As a member of the Public Accounts Committee, I pointed out that, when permanent secretaries come before the Committee as witnesses and we find out that things have gone wrong, we often ask them whether anyone has been held to account, and whether anyone has lost their job, which they might have done had such mistakes occurred in the private sector. Sadly, it was no great surprise to hear—we have heard it again and again in Committee—that no one had been held to account, and that no one had lost or would lose their job. That is not a party political point; it is a point raised by all members of the Committee, regardless of party.

We treat people very differently in the public sector, and sometimes—this may sound terribly Tory, which is not something that I like to do—there are occasions when the public sector does not hold people to account sufficiently for their failures. It treats people much more leniently than they would be treated if they made the same errors in the private sector, which is a pity.

Mr. Prisk

Without wishing to interrupt the hon. Gentleman while he is being terribly Tory, does he therefore feel that someone should have lost their job over that?

Mr. Rendel

The question that I asked was whether anyone lost their job, and the answer from the Secretary of State was, "No, no one has lost their job." I hope that my question indicated the serious point that so often when such problems arise in the public sector, no one loses their job. It is time that the public sector thought about that. That point is made time and again by Labour, Liberal Democrat and Conservative members of the Public Accounts Committee. There is a clear difference in how public sector workers are treated when they are shown to have failed catastrophically.

The Government failed to take account of several issues when they set up the funding system for schools this year, which has led to problems. They failed to take account of the extra costs that schools were facing, which have now become clearer with increased national insurance contributions, the costs of teachers pensions and their pay settlement, and the impact of the local government funding arrangement.

The Government failed, importantly, to model how those changes would affect individual schools. My local authority, West Berkshire, sent a delegation to the Department for Education and Skills, where it pointed out that it had fully modelled how the changes would affect its schools. The Department told the delegation that it was the only LEA in the country—let alone the Department itself—to have gone through such an exercise. I found it extraordinary that the Government had not made any attempt to model how those changes would affect schools.

The Government also misled schools about what to expect. Stories said that there would be a growth of about 7 per cent. in funding and that it would be the best sustained rise in education spending for at least a generation. The Chancellor was saying that, and his language was mistakenly repeated by DFES Ministers at the time—the Minister present today has not been in his position for that long, so he can perhaps be absolved of blame for that. However, Ministers throughout the DFES were saying that there would be a huge rise in the grants given to schools, without taking into account that costs would rise by more than that—as much as 10 per cent.

Many schools were left with not only no real-terms increase but a decrease in their funding for the year, with the result that teachers are now being made redundant. As mentioned already, support staff are also being made redundant, with all the difficulties that that entails for the new school system in which support staff are expected to take on more responsibility. Some schools have even been forced to cut aspects of their budget such as capital funding, and we have already alluded to the difficulty that that causes given the underspending on capital funding over many years.

On 29 August, The Times Educational Supplement estimated that 700 teachers had been made redundant and a further 2,700 were not being replaced because of the funding crisis this year. I understand that the net increase in the number of secondary school teachers this year is just 89, while rolls are rising by about 25,000. That is set against the background that the number of fully qualified—I emphasise fully qualified—teachers has fallen since 1977.

I want to raise another point that has so far not been discussed. What has happened to the local authorities that suffered the worst underfunding in the past? The Government's new funding formula for local authorities has led to significant rises in some cases. Those are inevitably for the areas that the Government believe have received less funds than they should have, as that is what the formula means. Having proved that those areas are underfunded, the formula has raised the funds but, unfortunately, in many cases those funds have hit a ceiling.

I understand why the Government have introduced floors and ceilings into the formula. It is important not to allow cash falls and to set a floor to prevent the situation becoming impossible for certain local authorities. However, the fact that they have paid for that by introducing a ceiling in other areas means that the local authorities that were underfunded in the past are not receiving as much as the Government's own formula calculates that they should.

Those areas face a particular difficulty. They have been underfunded and so have deficits to make up. There may be a backlog of work in their schools, a lack of library books or funding for special needs, and various other deficiencies resulting from underfunding. Now, although the funds are theoretically supposed to come through, the ceilings mean that they are not doing so.

Andrew George

Does my hon. Friend agree that his statement presupposes that the Government's new funding formula properly reflects the requirements of a local authority area? In my area, for example, secondary school pupils receive about £126 a year less than the average, while primary school pupils receive £220 a year less. Does he agree that, in areas where there are additional costs because of peripherality, rurality and higher transport expenses, the formula may not reflect genuine need across the country?

Mr. Rendel

Of course I accept what my hon. Friend said about the difficulty of getting the formula right. There will always be arguments over exactly what the formula should be, but I was merely making the point that the Government are failing to meet their current funding estimate. I am taking their point of view. I have taken the Tory party's point of view, and there is no reason why I should not take the Labour party's point of view for a while—I like to be even-handed whenever I can.

According to the Government's formula, areas that have been underfunded in the past are being further underfunded in the present, and are therefore unable to make up for the underfunding in the past. I hope that the Government will take that into account. When my authority went to see the Department for Education and Skills, it was told that it could have no more funding for this year, in spite of the fact that the Government's formula says that it should have more funding.

There has been a lack of transparency and openness in how the Government have handled funding for schools this year, which has undoubtedly damaged some schools. Sadly, it has also done little for the reputation of politics and politicians in general. Councils have been left to pick up the pieces. In many cases, they have been forced to increase council tax to make up for this year's lack of Government funding. There is still a mismatch between assessments of local need and the sums that local councils are given to spend. It is the old story of the Government retaining their grip on the purse strings while local councils are asked to accept accountability without responsibility.

3.10 pm

Mr. Graham Brady (Altrincham and Sale, West)

I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate and on his consistency, because he previously raised the matter in this Chamber on 2 April. I am always concerned when Members say that they will be entirely constructive and conciliatory, but he did open the debate constructively.

I am grateful to the hon. Member for Newbury (Mr. Rendel) for taking a slightly more party political stance, even though he spoke as both a Conservative and a socialist. None the less, I hope that that absolves me of any blame that might be attributed for beginning a descent into party political wrangling, which I would never seek to do. We have discussed this important issue on many occasions, but, for reasons that I shall go into shortly, this is a crucial moment in the ongoing saga of school funding.

I should also like to welcome the Minister for Lifelong Learning, Further and Higher Education. He is one of the more persuasive Ministers, which is why he picks up all the impossible briefs. He has already been saddled with the task of defending the Government's policy on tuition fees, and now he has been asked to come here to defend their gross betrayal of parents, pupils and schools the length and breadth of the country.

The hon. Member for St. Ives gave credit to the Secretary of State for Education and Skills for accepting his Department's incompetence in dealing with the school funding situation this year. It would have been so much better if he had taken that stance much earlier. When he spoke to the Secondary Heads Association in the new year, he uttered the memorable words: "It just floods straight over my head. I don't listen to what you say quite frankly". That was not a perfect illustration of listening government or of a Government who are prepared to accept their failings. Perhaps we have made a little progress in the months since then.

The hon. Member for St. Ives raised concerns about classroom assistants, worries about redundancies for existing support staff and the implications of the proposed teacher work load changes. The latter is one of the crucial problems faced by the DFES. The Department has put yet another burden on schools and their budgets; they have to try to cope with teacher work load changes this year and, more particularly, next year, when those costs will kick in. The Department has made those changes against the backdrop of this year's funding crisis, which has left many schools with a budget deficit from which to deal with expanding costs.

The gravity of the situation was highlighted by the hon. Gentleman when he referred to a small local school having to make one of its four teachers redundant, which is clearly a serious problem for that school. Such problems have been reflected and picked up by hon. Members from all parties and from different parts of the country. The hon. Member for Coventry, South (Mr. Cunningham) referred to 43 teaching and 70 support staff posts being lost. The hon. Member for Guildford (Sue Doughty) spoke about the problem of attracting and retaining staff, and she referred to the experience of a local school that had received a school achievement award. A few months ago that award was hailed by Ministers as crucial in motivating staff, but it is now being quietly dropped as an inconvenient complication in the arrangements for paying teachers and rewarding them for success.

The hon. Member for Newbury went on to talk about one of the shabbiest parts of the whole episode: the Government's preoccupation throughout this year with shifting the blame for what has gone wrong instead of tackling the root cause of the problem. They tried to blame head teachers and local government, but eventually they were left with that blame; they have been caught fairly and squarely for what they have done wrong. The hon. Gentleman also spoke about proper accountability in dealing with errors in the public sector.

I do not want to rehearse in detail the causes of the crisis, which we have discussed many times here and in the main Chamber in recent months, but they include the increase in national insurance contributions, the removal of elements of the standards fund and the cost of increased superannuation contributions from schools. That is effectively an additional tax take because the pension scheme is not funded, and the Treasury decided to increase the contributions from teachers' employers towards the cost of paying pensions. There has also been a failure in successive years fully to fund the teachers' pay settlement. All that together has created a serious situation in schools throughout the country.

What steps have the Government taken? Reference has been made to most of them during this debate. Flexibility for capital funds is very welcome for schools in a crisis which are faced with the possibility of making redundancies among valued teaching and support staff. However, head teachers are put in an impossible position, which was memorably expressed by one of the leaders of a teachers union as having to choose between having the boiler fixed in the middle of winter and retaining the deputy head teacher. The flexibility for capital funding does not solve such impossible dilemmas.

The Government have made a U-turn on their decision to withdraw elements of the standards fund, and if that money finds its way to the right schools in the right way, that will help. The rules on deficit budgets have been relaxed, and that was covered earlier in the debate. However, schools that have had to go into deficit this year face an ongoing problem in trying to climb back out of deficit without a reduction in the costs that they face. In addition, as my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) made clear, there is the problem of further increases in employment costs occurring this year.

Measures are being taken in the Local Government Bill, which was debated on the Floor of the House on Monday, and it is proposed to bring forward the timetable for school budgets to the end of December. I shall comment briefly on that, as I did on Monday. It is rather sad that those measures could have been taken much sooner. They may help, but they, or measures very like them, were offered to the Government in January 2002 by the Standing Committee on the Education Bill. There have been constant warnings of the coming problems from Members and from people outside the House who are involved in education. That was yet another occasion—nearly two years ago, in that instance—when Ministers were told that difficulties were approaching, and they were offered a solution that they were too arrogant and intransigent to accept. Now, rather belatedly, they are trying to pick up the pieces in a crisis.

On 17 July, the Secretary of State promised a minimum-per-pupil funding increase for schools, but as yet we have no details of what that will mean. We do not know the percentage increase and, more worrying, we do not know what it will be based on. However, there has been a development. On Monday last week, I received a written answer to a question that I had asked which will be very instructive to Government and Opposition Members. I have with me only one of two volumes that give per pupil funding for every school in the country for the current financial year. I also asked for that information for the previous financial year.

The hon. Member for St. Ives gave a long list of schools in his constituency. I could not look up all of them in this volume, but I have found two schools that I assume are in his constituency. St. Ives infants appears to have per pupil funding of £2,360, and St. Ives junior school has per pupil funding of £1,993. I know that Members are looking forward to getting their hands on this mine of information.

If the promise of a minimum-per-pupil funding increase is to mean anything, it must start from the baseline of current per pupil funding. Until we have an absolute guarantee from the Minister and his colleagues that that is the case, we will all look with a rather sceptical eye at what the Government are promising.

We also need to know what will happen in the instance, acknowledged by the Secretary of State as far back as 17 July, of LEAs not passporting 100 per cent. of education funds to schools. He admitted that that would be possible in exceptional circumstances, but he has not been prepared to define them. If there are situations in which money is not passported to schools, how will the Government ensure that schools get their minimum per pupil funding increase? Will it be made by direct payments, thereby circumventing the LEA, or by some other means?

My hon. Friend the Member for Hertford and Stortford spoke of the 95 per cent. of secondary schools in his constituency which face significant loss of teaching posts, and of the average school deficit of some £63,000. He said that head teachers in his constituency had never been more anxious about their own future and that of their schools. That is a picture that we all see wherever we go visiting schools. I hope that the Minister is now prepared to listen to those concerns, which demonstrate the gravity of the situation that the Government have created.

My hon. Friend went on to call for a simpler funding system. One of my concerns is that the Government are now creating, instead of a simple funding system, an utter mess. Effectively, we will have a local funding system that is controlled from the centre—the worst possible combination of factors. The LEA will be responsible for the distribution of funds but that will be prescribed in great detail by Ministers who will not, as they claim, have all the levers to control the expenditure. It is not entirely clear what the mechanism will be for delivering a minimum-per-pupil funding increase.

I hope that the Minister will answer some key questions. I hope that he will give a simple, straightforward guarantee that the minimum increase promised will be worked out from the baseline of existing per pupil funding. I also hope that, as my hon. Friend requested, the Minister will confirm that that will mean a net increase above costs for this year. What hurt schools and teachers most last year was that they were promised so much and then the Government took away more with one hand than they gave with the other. Will the Government also guarantee that we will have the provisional local government finance settlement by mid-November?

In conclusion, schools throughout the UK have had a dreadful year. Head teachers have been forced to contemplate and begin a process of redundancies of staff whom they value and need to teach our children well. It would be unacceptable to have another year in which those sorts of problems are inflicted on our schools. If that were to happen, Ministers could not avoid responsibility by seeking scapegoats or otherwise shifting the blame, and they would not be forgiven for it. We all look forward to the Minister's usual persuasive response, but we need more than that. Real and effective action is needed in the coming year, because all the schools, parents and pupils in the country are watching.

3.26 pm

The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson)

I congratulate the hon. Member for St. Ives (Andrew George) on securing this important debate, to which I am pleased to have the opportunity to respond, although it has not been as constructive as the hon. Gentleman might have wanted. I have dealt with him on many occasions, and he tries hard, in his own words, to be "constructive and conciliatory." However, after he had finished speaking, those principles disappeared, so it would be remiss of me not to put some balance back into the debate.

I agree that there have been problems, some of which were highlighted by my hon. Friend the Member for Coventry, South (Mr. Cunningham). I am not trying to understate those problems, but I am attempting to put a bit of balance back into the debate.

I had some close dealings with the hon. Member for Hertford and Stortford (Mr. Prisk) when he first came into the House. He was such a pleasant and rational human being at that time that it makes me wonder what happens to people when they have been in this place for a while. The hon. Gentleman commented on the fact that the Minister for School Standards was not present. However, he should know that my hon. Friend has another parliamentary commitment on the Committee Corridor—he is currently strutting his stuff on a statutory instrument Committee. He would have loved to have been here—[Interruption.] The hon. Gentleman is now going through the whole ministerial team, but his point was about the Minister for School Standards, and I hope that he now accepts that my hon. Friend's absence is not an insult to him or anyone else who has taken part in the debate.

I understand the interest of hon. Members in the impact of this year's funding changes on schools, not just in Cornwall, but throughout the UK. I shall say something about Cornwall and then about the national situation. I shall then try hard to answer the 13 questions put to me by the hon. Member for St. Ives; since it is his debate, he deserves a response.

I shall begin by discussing the performance of schools in Cornwall. When we in the House speak about education, it is important, as several hon. Members pointed out, that we recognise the outstanding work that is done in our schools. Teaching numbers in Cornwall have increased by 11 per cent., from 3,610 in January 1997 to 4,020 in 2003. Over the same period, the number of school support staff working in the county has risen from 1,600 to 2,490, while the teacher vacancy rate remains at 0.1 per cent. I would like to put on record my gratitude for the work of the teachers in Cornwall who have been responsible for significant improvements in the quality of education in the county, and I will give some examples of their achievements.

Andrew George

I fully acknowledge the investment and the increased numbers, but that comes against a backdrop of steeply increasing pupil numbers. The point that I was trying to make in response to an earlier intervention by the hon. Member for Falmouth and Camborne (Ms Atherton) was that although the record is good, we are still having problems this year with some compulsory and many voluntary redundancies.

Alan Johnson

If I have a few minutes at the end, I will come on to that, but it would be remiss of me not to put the points into context; indeed, people would drop to the floor in amazement if I did not.

Returning to the achievements of teachers and support staff in Cornwall, I can tell the Chamber that the percentage of pupils leaving primary schools in the county who are doing well in English has risen from 66 per cent. in 1998 to 74 per cent. in 2003. Over the same period, the figures for those doing well in maths and in science have increased from 62 to 71 per cent. and from 74 to 86 per cent. respectively. I am sure that hon. Members will agree that that represents outstanding work in the county's primary schools.

In the early years of secondary education in Cornwall, there is impressive evidence of improvement with pupils reaching level 5 at age 14. Results are up from 65 to 69 per cent. in English, from 65 to 70 per cent. in maths and from 63 to 72 per cent. in science. We all hope that that can be translated into continued rising achievement in GCSEs, A-levels and vocational qualifications.

Mr. Rendel

I do not know about Cornwall, but I know that when Ministers have claimed increases in figures for some other areas, it has turned out that staff increases have not been in fully trained and qualified teachers. Will the Minister assure us that the increases that he mentioned are in fully trained and qualified teachers?

Alan Johnson

I have not got on to teachers properly yet, but I will later. The increase has been in fully trained teachers. Opposition Members have made the point that some of the teachers come from overseas, but they are fully trained. I have more to say on teacher numbers, which will please the hon. Gentleman, who in his own words is being "terribly Tory" today.

It is also worth reflecting on the increases in funding that Cornwall has received since this Government came to power. The hon. Member for St. Ives mentioned that and congratulated us on it, and I will put some flesh on that skeleton. From 1997–98 to 2003–04, Cornwall's total funding per pupil has increased by almost £1,100—an increase of 46 per cent. over five years. The hon. Member for Hertford and Stortford, who was so balanced when he first came into the House, neglected today to mention that funding per pupil in Hertfordshire in the same period has increased by 40 per cent.

Capital investment has also greatly increased in Cornwall. In 1997–98, capital funding in Cornwall was £8.1 million. By 2002–03, it had risen to £23.9 million, and this year, taking into account private finance initiative projects worth £71 million, it is more than £99 million. That jump in capital investment should be mentioned in a debate on school funding. Nationally, there has been a record £2.7 billion increase in funding for schools this year. That will go up by another £4.1 billion in 2004–05 and by a further £2.1 billion in 2005–06, which will mean a total cash increase over three years of more than £6 billion.

Mr. Brady

Do those figures take into account the element of capital funding that the Department has urged schools to transfer to support revenue deficits?

Alan Johnson

I am not entirely sure, but I guess that the figures do. I will come on to that point, because it was raised by the hon. Member for St. Ives.

We recognise that local authorities and schools have had to contend with significant changes in funding arrangements this year, and we are aware that schools have faced tremendous difficulties with their budgets. The responsibility for the funding of schools is, of course, shared between central and local government, and we recognise that the challenge this year has been to manage the interaction of complex changes—the introduction of the new formula funding system, the transfer of funding to reflect teachers' increased pensions, the working through of the teachers' pay settlement and the end of a substantial body of ring-fenced grants from the Department's standards fund. Although there have been large cash increases in education this year, cost pressures have been substantial and have varied at school and authority level, depending on cost structures and local deployment of resources.

Mr. Prisk

The Minister talks of the important shared responsibility between Government and local authorities. The authorities need to have information from Government in order to play their part. Can he explain why the information relating to performance-related pay—a clear Government policy—was not provided to LEAs, which were therefore unable to work thoroughly through their budget considerations? That undermined their ability to do their job. Thankfully, in Hertfordshire, we passported all the money through. Why will the Government not give that information to LEAs?

Alan Johnson

In terms of learning lessons from what has happened this year, the Secretary of State has made it clear that we will try to ensure that some of the issues are raised next year. We accept that it is important for LEAs to receive information early enough. I shall come to that when I respond to the points raised by the hon. Member for St. Ives.

There have been problems, and we have sought to help local authorities to manage this year's changes by moderating the impact of the funding formula changes and, through additional grant, to ensure that all authorities have received an effective minimum increase of at least 3.2 per cent. per pupil. The increase for Cornwall is 4.1 per cent. That is on top of the transfer of £586 million to cover the teachers' pension increases, and the transfer of £500 million to cover the transfer of nursery education grant and infant class size grant.

In addition, the Secretary of State announced on 15 May flexible ways in which schools could use their budgets: for this year only, he has relaxed the regulations so that devolved capital can be used for revenue purposes; he has allowed schools to borrow from consolidated balances; and he has allowed LEAs to license schools to set deficit budgets. We consider those sensible measures that will avoid unnecessary redundancies.

I shall move swiftly through the hon. Gentleman's 13 questions, in no particular order, before turning to the general points. This might be a bit of a school test for me. I have been asked what schools are supposed to do to maintain their standards, particularly on learning support and special educational needs. The Secretary of State said on 17 July: "This year most LEAs' spending on centrally funded pupil services, such as special educational needs … has increased significantly faster than their spending on budgets delegated to individual schools. It is essential that, in future … spending on such central items should rise no faster than spending on the individual schools budget."—[Official Report, 17 July 2003; Vol. 409, c. 456.] We have, however, commissioned an investigation into SEN spending. With the support of the Local Government Association, the Audit Commission and the head teacher unions, the investigation will provide more detailed information about the ways in which money is spent on special educational needs.

The hon. Member for St. Ives asked what schools are supposed to do to avoid making teachers and support staff redundant. As I have mentioned, the Secretary of State made a statement on 15 May allowing schools to use their budgets flexibly this year—in particular, the formula on capital funding to support revenue spending—to borrow consolidated balances and to set deficit budgets. The appropriate level of school reserves is a local matter to be agreed between schools and LEAs. They are best placed to understand the situation on the ground.

The next question concerned whether the DFES would make it clear that it would support schools that had no alternative but to set a deficit budget. We appreciate that some schools have found it necessary to set deficit budgets this year by agreement with their LEAs. Some have found it necessary to spend from their reserves or devolved formula capital allocations. Schools and LEAs have the primary responsibility to manage the ongoing consequences of such decisions, including maintaining sound financial management and balancing budgets. We recognise that that could be beyond the capacity of individual schools and LEAs, and in those few cases, we will be prepared to consider limited, transitional support to avoid damage to children's education, where that is part of the recovery plan agreed locally by the LEA, schools and the Department. We shall discuss with heads and LEAs how best to provide such support.

We intend that the extra £800 million over two years will be provided without any strings attached for schools and that they should treat it precisely as a top-up to their budgets, just like the school standards grant. With our national partners, including LEA representatives, we are considering how best to ensure that we deliver that.

Andrew George

Does the Department intend simply to disburse that money per capita across the country, or will it use a more sophisticated method?

Alan Johnson

I am afraid that I, or the Minister for School Standards, will have to contact the hon. Gentleman because I do not have that information. [Interruption.] I will resist the temptation to repeat what the hon. Gentleman is saying from his sedentary position.

The hon. Gentleman asked me, as did the hon. Member for Altrincham and Sale, West (Mr. Brady), when the LEAs will be told the indicative budget for the next financial year. We will announce the figures by the time of the provisional local government financial settlement in November, when we have completed the work with our education partners on the detailed analysis of cost pressures in the system. Once we have that analysis, we will be able to set the minimum percentage increase for 2004–05.

I was asked about the Department's plans for the standards funds, which were originally to be removed in 2004–05 and the following year; the question was whether those will remain and, if so, whether they will still be used for the same purpose. We intend to provide that new money—£400 million in each of the two years—without any strings attached, as I have already mentioned.

I will write to the hon. Member for St. Ives about what assessment has been made of the impact of the flexible use of devolved formula capital for building improvements and developments. As to how much of next year's school funding will have to be found by council tax payers, I remind hon. Members that council tax is an essential element of paying for local services. Providing funding for education is a shared responsibility, so it is appropriate that it should be met by both central and local taxation. There is no reason why any authority should need to increase its council tax excessively.

I will write to the hon. Gentleman about changing guidelines and teachers' performance-related pay. I am sure that the Minister for School Standards would be pleased to consider meeting a delegation from Cornwall, and I suggest that the hon. Member for St. Ives write to him directly. I am happy to assure the hon. Gentleman that schools facing deficit budgets this year will in no way be disadvantaged in their bids for specialist status. I will write to him also on the question of demographic trends.

I know that the funding situation this year has been difficult. I do not agree with the hon. Member for Altrincham and Sale, West that this is a gross betrayal of parents and teachers. I have dealt with him a great deal over the years, and he has made some very flattering comments, but he is the man who put the hype into hyperbole. Let us get some rational balance in the debate. We provided additional help from the centre, and some authorities have provided more from their own resources.

Many authorities and schools have faced up to difficult decisions, and it is clearly vital that we continue to focus on the problems that we face and that we seek to resolve them. We have to look forward and learn quickly from this experience so that we can put in place better arrangements for next year. We have been working hard to do that. We have been working hard to do that, and we will shortly be making a further announcement that will cover many of the points raised by hon. Members from all parties about the necessary changes.