§ Sarah Teather (Brent, East) (LD)It is a great pleasure to have been able to secure this debate about education in Brent and to have the opportunity to bring to the Minister's attention a number of issues, particularly about funding. My constituents, local schools and the council—it is Labour-controlled, but we have been working together—have raised the issues with me.
Those who know my constituency will be aware that Brent is a highly diverse borough, but also an area of great need. Brent, East borders Camden to the east and Westminster to the south. It stretches north-west up to Neasden, taking in Kilburn, Queen's Park, Willesden Green and Dollis Hill en route. Most of my constituency lies within the tube's most central zones—1 and 2.
The Audit Commission has said that Brent is an area of significant deprivation. It is the 13th most deprived London borough. Unemployment in Brent, East stands at about 6.9 per cent., a third higher than the average figure for the UK. Deprivation is particularly apparent in the south of my constituency in Carlton Vale, the area that borders Westminster.
The picture is similar in the schools. A recent report by the Audit Commission and Ofsted on Brent local education authority said that
Brent is an outer London borough but faces many of the same challenges as those in inner London with high levels of deprivation in five wards in the south".Brent's schools have many inner-London characteristics. For example, 31 per cent. of pupils in my constituency are eligible for free school meals, compared with an inner-London average of 39 per cent., an outer-London average of 19 per cent. and a UK average of about 17 per cent.Brent is one of two boroughs in which whites are a minority. Its schools are even more diverse: 72 per cent. of pupils in Brent's schools are from ethnic minorities, and around 130 languages are spoken in those schools—an extraordinary figure. English is an additional language for more than half of all pupils. Pupil mobility is high and is growing. That diversity and pupil mobility are partly due to the large number of refugees in the borough; there are about 17,000 refugees and asylum seekers, some 7 per cent. of the overall population. Children of refugees and asylum seekers make up 8.3 per cent. of children in Brent's schools.
There are 27 schools in my constituency: 24 primary schools and three secondary schools. Of the constituency's primary schools, 12 are voluntary aided, 11 are community schools and one is a foundation school. In addition, the borough supports five special schools, four nursery schools and two pupil referral units. Between the two most recent Audit Commission and Ofsted reports in 1998 and 2003, Brent's primary schools steadily improved, as did the progress of vulnerable pupils. The borough's secondary schools were praised in the last report for highly satisfactory progress. The report noted, however, that most of the poor performance issues stemmed from underfunding of education, and I want to turn to that.
Despite the inner-London characteristics that I have highlighted, Brent, along with five other London boroughs—Ealing, Merton, Newham, Haringey and 352WH Waltham Forest—has a legal obligation to pay inner-London weighting. However, that obligation is not recognised in the funding that the borough receives from central Government through the formula spending share, which assumes that it is an outer-London borough. The obligation appears to stem from the pay board review of 1974 and subsequent legislation, but is now defined in the teachers' pay and conditions requirements of the Department for Education and Skills.
Brent LEA has estimated that it costs around £3.5 million a year to pay the extra London weighting to its staff. Brent's contention, and that of the other five affected boroughs, is that they are penalised by having to pay the inner-London weighting because they do not get the compensatory funding via the FSS from central Government, unlike the other inner-London authorities. The argument is that the imbalance should be remedied by a specific grant to the six boroughs concerned, which would be much simpler than trying to tinker with the highly complex funding formula.
The Minister may argue that those councils receive more than the difference between inner-London and outer-London weighting through other money from the grant system, taking into account their outer-London status. However, he will be aware that the inner-London element of the FSS takes into account factors other than pay or inner-London weighting, such as the need to pay extra to retain teachers by moving them more quickly up the pay spine. Whatever the solution, the situation is clearly an injustice. Will the Minister please consider this or another proposal to resolve the funding shortfall in Brent?
What are the implications of that shortfall for schools? As a result of the budgetary pressures, Brent LEA spends a much higher percentage of its school budget on pay—85 to 90 per cent., compared with an average of about 70 per cent. for other LEAs. That is highly significant. High wage costs result in reduced funding for other areas; that is common sense. Brent cannot provide the teaching assistants that it feels it needs; it cannot refurbish buildings; and it has a higher proportion of schools in budget deficit than the rest of London. Some 12 Brent primary schools, about 20 per cent. of the borough's total, are in deficit, compared with 12 per cent. in Greater London. Five Brent secondary schools are in deficit, 37 per cent. of the total, compared with 24 per cent. in Greater London.
Refurbishment is a particular concern for such schools. The executive summary of the Government's consultation document, "Building Schools for the Future", stated:
School buildings are important to pupils' education.The research showed a clear link between capital investment and school standards. In practical terms, the budgetary pressure has prevented the council from taking action to replace the portakabins in the John Kelly secondary schools. Brent has a poor stock of school buildings; the lack of available cash for maintenance means that many have a large backlog of minor repairs that may well be more expensive to fix now than if they had been dealt with sooner. Brent is desperate to be part of the second wave of "Building Schools for the Future", which is due to be announced in the autumn. At the moment, some schools are 353WH forgoing expenditure in the hope—indeed the expectation—that BSF funding will be made available soon.The budgetary pressure has other implications for Brent schools. Although most special educational needs support comes from the non-delegated part of the schools budget, the growth of some of the more innovative and exciting schemes is being hampered by pressures on the delegated portion. For example, the council is keen to provide extra, preventive, support for pupils with special needs through behaviour support teams in mainstream schools. Such work is highly inclusive and works with children ahead of their being statemented; they may never be statemented, but they need that extra support. I am sure that the Minister would agree that that is vital work.
The Minister may argue that Brent council is not spending the expected spending share allocation on education, although it has passported 100 per cent. of the FSS increase in the past two year That underspend is largely due to a large historic debt burden, owing to decisions made by the council when it was under Conservative administration. It made decisions to lay off many staff and pay for early retirement, and the heavy costs of paying pensions continue to be a problem for the council.
The Minister will know that a council can find it difficult to get out of the trap of underspending in a particular area, because of the various checks and balances that tie its hands. For example, Brent's revenue support grant is, in effect, capped by a ceiling on the percentage increase in the FSS. If the council attempted to raise more revenue to meet that or any other shortfall, it would have to resort to local revenue-raising powers. However, the gearing effect in local government funding means that that would require a substantial increase in council tax, and councils were warned that if they increased their council tax too much, they would be capped. So the council finds itself in a Catch-22 situation. In January, extra funding was announced for local authorities, and Brent received a relatively generous £4.2 million from a total of £340 million. However, those extra funds were intended to ease budgetary pressures on environmental and social services. It would be disingenuous to imply that such funds would solve the problem in education.
In addition to the problem of inner and outer-London weighting, Brent suffers as a council because of the ceiling on possible increases in Government funding. The council estimates that that cost it about £1.3 million this year.
A similar funding dichotomy affects Brent's further education sector. The Learning and Skills Council is implementing revised area uplift costs in further education and reducing the number of London areas from three to two. Brent is the only borough not to have moved from the old London area B to area A. Its uplift therefore remains at only 12 per cent., compared with 20 per cent. for those in area A. That affects sixth-form colleges, but it particularly affects the College of North West London in my constituency. As the Minister will know, the college is already at a disadvantage because the LSC agreed in evidence to the Education and Skills Committee that further education colleges are under-represented in funding compared with sixth-form colleges. That college has a high proportion of students 354WH who are asylum seekers or refugees, and it suffers particular disadvantage. On Friday, it heard that it would have to cut 220 full-time students in 2004–05, which is equivalent to about 1,000 part-time students. There is no additional funding for any college covered by the London West LSC, even though it knows that it is one of only four LSC areas to have exceeded its overall targets.
The schools whose sixth forms are funded by the LSC to the tune of about £15 million have also lost out because of the lack of uplift. That translates to an annual cost of about £800,000. Hon. Members may not think that that is very much, but it probably equates to about two teachers for each of the 13 sixth-form colleges in the borough and is highly significant.
I want to make a final point about the implication of funding pressures in Brent for the provision of voluntary aided status to two faith schools in my constituency: the independent Jewish Menorah high school for girls and The Avenue independent Islamic school. Following provisional agreement of VA status for those two schools, Brent council obtained permission from the DFES to include their pupils in the borough's pupil level annual schools census return for 2004. That is important, because it means that the schools' pupil numbers will be included in the Government's calculation of Brent's RSG for 2005–06. However, as annual increases in funding cannot rise above the Government's ceiling, granting either or both schools VA status would mean that Brent might not obtain any additional funding for the schools in 2005–06. The council has argued that the simplest solution to that problem would be to amend the 2004–05 education formula spending share baseline by the amount that those extra pupils would have attracted in that year. The additional grant would not then be treated as a pure gain for Brent and hence would not be subject to the ceiling or scaling factor.
The transfer of independent faith schools to VA status is very much in line with the Department's policy of encouraging as wide a spectrum of educational provision as possible in the maintained sector. Indeed, it has agreed capital funding of about £8.5 million for those two schools, and that will be at risk if the council cannot support the applications. I have written separately to the Minister for School Standards asking for a meeting about that, but I hope that the Minister who is present will be able to respond to those points.
In conclusion, I thank the Chamber for providing me with the opportunity to raise the important issues of education and funding in Brent. I ask the Minister to take action to address the shortfall of funding and its impact on students in my constituency. I accept that in all arbitrary funding calculations there are winners and losers. However, I am sure that he agrees that in an area of such considerable deprivation as Brent, East it should be a priority to remedy such an injustice.
§ The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis)It is a privilege to appear before you in Westminster Hall, Mr. Deputy Speaker. It has become a regular occurrence in the past few months. I congratulate the hon. Lady on speaking in her second Adjournment debate today. Her 355WH productivity is to be commended. This is an important issue, and I acknowledge at the outset that there are legitimate, important matters that need addressing. I will attempt to do that in my response to her contribution.
I must first make some general points. She will forgive me for making political points; this is a political environment. Her contribution was slightly misleading. For example, advocating faith schools and their expansion is not a policy that her hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis) has shared. This Government have proudly advocated that since they were elected in 1997, and they have expounded the importance of newly created faith schools and of giving existing ones the opportunity to come into the state sector from the private sector. In fact, the Liberal Democrat party has been hostile to the concept of expanding the number of faith schools in the maintained sector. I must say to the hon. Lady that that is another example of the Liberal Democrats saying one thing in one community and then attempting to give an entirely different impression in another.
§ Sarah TeatherThe Minister should be aware that the Liberal Democrats' official policy is to leave the matter up to local authorities to decide. It is at their discretion depending on local need. I personally think that faith schools can play an important role as part of the multiple provision of services in an area, but they are not the sole source of that provision.
§ Mr. LewisI would not pretend that faith schools were the sole form of providing education. They are part of a diverse education sector, in which parents have access to a range of choices that meet their needs. I remember some hostile contributions that her hon. Friend made about faith-based education and single-faith schools. Frankly, it is not good enough to say, "I personally believe", when the Government have fought for the right of the faith-based sector to expand where appropriate and when the Liberal Democrats have opposed such moves at every opportunity.
The other issue in the political context is about finite resources. The Government's level of investment in education is unprecedented, historic and sustained—I shall come to the figures for Brent, which highlight that. However, let us be absolutely clear about the spending commitments, as I understand them. The Liberal Democrats said that they would increase the 40 per cent. rate of tax to 50 per cent., which would pay for two things: the subsidy for university graduates, so they would not have to pay fees; and free care for the elderly. There would not be a penny piece more under Liberal Democrat spending plans for local government, schools or further education. We should not attempt to mislead constituents in these debates into thinking that the Liberal Democrats would make significantly more resources available for schools or further education colleges than the Government. It is disingenuous of politicians to pretend that there are infinite resources. The hon. Lady knows full well not only that the Government's record of investment is unprecedented, but that hard decisions will always have to be made.
§ Sarah TeatherThe increase in taxation from 40 per cent. to 50 per cent. would not only pay for the two things that the Minister outlined, but enable us to lower the burden of local taxation. We would also give more freedom to local councils to raise revenue, depending on their priorities. As the Minister knows well, I am arguing about fairness for the borough, which is out of step with other areas; I am not arguing for a complete change in the formula spending share.
§ Mr. LewisI thank the hon. Lady for her clarification. I can see the "Focus" leaflets emerging which say, "We advocate higher taxation"—at local discretion, of course—"but you can significantly put everybody's local taxes up." I look forward to hearing about the Lib Dems' election results in local authority areas where they make that offer overt in their election literature. Of course, that was not the offer to the people of Brent in the by-election. Then, as I remember, people were promised that everybody would get a council tax subsidy. However, the leader of the Liberal Democrats subsequently said that that offer was only for the period of the by-election and would not be sustained on a long-term basis. We now hear the hon. Lady talk about local discretion to increase council tax to significantly higher levels.
Let us focus on the amount of the funding increases that Brent has received. In 2004–05, the increase in Brent's school formula spending share was an above average 6.8 per cent. per pupil. When the increase in its pupil numbers is taken into account, Brent's overall FSS increase was 8.1 per cent. Over the longer term, between 1997–98 and 2004–05, we estimate that Brent's total funding per pupil will have increased in real terms from £3,590 to £4,660. That is an increase of more than £1,000 per pupil. Brent received an 8 per cent. increase in formula grant from the Office of the Deputy Prime Minister in 2003–04 and a 7.5 per cent. increase in 2004–05. The hon. Lady was good enough to refer to the extra £4.2 million that the local authority received—in January this year, I think. Even to suggest that resources that could be provided are not being provided is therefore slightly disingenuous.
Everyone in this place advocates making available more resources for their constituents and it is appropriate that the hon. Lady should make the case for Brent. My constituency was one of the biggest losers under the old local government finance regime. My colleagues and I fought for a fairer share of that settlement, and we were delighted that the Government reorganised the local government finance settlement. My local authority would never say publicly that it had enough money, because local authorities never do, but its share of resources is fairer. In that context, other local authorities would say that they have ended up worse off as a consequence of the change.
In any reorganisation of the local government finance system there will always be winners and losers. The question is whether the system is fair or fairer than it was prior to the changes. The current local government finance system is considerably fairer than the previous system, and I sure that it could have be even better from the point of view of some authorities.
One reason why there are ceilings is that there has to be a phasing in of the gains over a period of time—again, in terms of real economic and realpolitik. If the gains 357WH were not phased in, the horrendous short-term consequences for local services of the "losers" would be devastating. It is about a sensible and balanced approach, and trying to create a fairer system. It is good news if Brent is at the ceiling, rather than somewhere near to the floor, because that means that there is a recognition of its needs.
On the hon. Lady's comments on "Building Schools for the Future", we are proud that the Government are rebuilding from top to bottom the secondary school stock in this country over a 10 to 15 year-period. Local authorities such as Brent that are facing genuine deprivation and challenges, which the hon. Lady outlined, as well as local education authorities and local partners that are able to demonstrate innovative and imaginative proposals, will be considered sympathetically as part of the decision-making process.
The hon. Lady was hoping that Brent would feature in the second wave of "Building Schools for the Future", and if an application is made, it will be considered. Consideration will be given to the priority of upgrading the stock in Brent in comparison with other LEAs, and to ensuring that the proposal is genuinely imaginative and innovative and would create 21st century schools. I have no reason to believe that that is not so. I will speak to my hon. Friend the Minister for School Standards about the comments that she has made about the "Building Schools for the Future" programme.
The hon. Lady commented on the area costs weightings, which are complex and technical and a source of contention. We acknowledge that there is a long-standing discrepancy, which is owing to the different origins of pay and funding systems. The pay boundaries date back to the Burnham recommendations, to which the hon. Lady referred. The area cost maps and weightings for schools are determined by the Office of the Deputy Prime Minister, and for colleges and schools by the LSC, through research into costs—most significantly into wage rates in the locality. I accept that that is difficult. The pay arrangements were first developed in the 1960s. Funding arrangements for schools in inner London were set up later on a different geography and to serve different purposes.
School funding has developed to accommodate that partially, but Brent schools remain on the outer-London funding rates. We accept that funding systems need to be updated regularly to respond to local needs, but it is difficult to keep chopping and changing on whether somebody gets an inner or outer-London salary. Local and regional pay discussions, for example, may have a future role in considering any changes, but it has to be acknowledged that that is a long-standing issue and I cannot make any commitments today that those differences will be reconciled. That not to say that I am closing the door, and it does not mean that we will not consider the genuine case that is being made for Brent local authority and others, but I can make no firm commitment today on the changes that the hon. Lady seeks.
In relation to the post-16 sector, the hon. Lady referred to funding affecting the Learning and Skills Council. I accept that there are genuinely serious issues. There were particular problems to do with the College of North West London, to which she directly referred. The LSC has made efforts in its funding allocation to 358WH provide the College of North West London with additional funding in recognition of the particular problems that the funding system creates.
The LSC is advised on these matters by the national rates advisory group, an independent body whose members include representatives from the learning and skills sector. The group commissioned the research that informed the advice that it gave to the LSC. The LSC accepted that advice and the case for change, and started implementing some of the changes in 2003–04. The NRAG and the LSC have been willing to review those decisions. I understand that the NRAG re-examined the data for Greenwich and decided on reflection to change its recommendation. Unfortunately, it also re-examined the data for Brent and decided to stand by its original advice. The LSC has accepted those recommendations.
It would be very difficult for us to ask the Learning and Skills Council, supported by the advisory group, to consider such situations objectively and reach reasonable conclusions, only for Ministers to intervene and undermine the process. That would be inequitable and undesirable. It would therefore be inappropriate for me to intervene at this stage. However, officials from the Department for Education and Skills, the LSC and the Office of the Deputy Prime Minister recently met as part of the planning for the next review of the LSC's area costs for implementation in 2006. As part of those discussions, we will consider area costs as they affect schools, colleges and providers. As I said, I cannot give the hon. Lady the assurances that she seeks today, but I do not totally close the door on continually monitoring any funding difficulties and funding challenges to ensure that we can create the most sensible and objectively fair system.
The hon. Lady has made representations to the Minister for School Standards about the two faith schools, on which I am sure he will reflect and respond in due course. I am also sure that the hon. Lady will welcome the very generous capital allocations of millions of pounds that the Government have been prepared to make available for each of the two faith schools, thereby demonstrating their commitment to supporting those schools' becoming part of the state sector. I genuinely hope that those schools will be able to enter the state sector as soon as possible. That is consistent with this Government's policy of welcoming faith schools, although it is slightly at odds with the hon. Lady's colleague, the hon. Member for Harrogate and Knaresborough, who speaks for the Liberal Democrats on those matters.
In conclusion, I say again to the hon. Lady that it is perfectly legitimate to make representations on behalf of one's constituents and constituency for a greater share of the cake. It is equally important that the Liberal Democrats say the same things in every setting about finite resources and the fact that we must have credible economic policies, yet they offer no additional resources whatever to schools and colleges as part of their spending plans. I congratulate her on securing the debate. I take seriously some of the issues that she raised, but I am also very proud of the additional sustained investment in education from which the people of Brent have benefited as a direct consequence of having a Labour Government.