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§ Mr. Anthony Steen (Totnes)It is fitting that one of the first debates after the return of Parliament should highlight the unfair treatment of Devon schoolchildren in the educational funding that they receive from central Government. Mr. Deputy Speaker, I thank you for allowing the debate to take place.
The national average spending per pupil in England is £2,567, but a school child in Devon receives only £2,372, which represents a shortfall of £195 per pupil. Devon's 95,896 pupils are getting a raw deal, and the county is being deprived of £18 million per annum. If one multiplies £195 by 95,896, one gets a total of £18 million, so we are receiving £18 million less than the average county.
Last June, the Government issued a consultation paper on local government finance. Consultation on the document ended on 30 September. As part of the review, several options for change in education funding were proposed. The debate provides the opportunity to put the unfair and inequitable system of educational finance right once and for all.
The Government do not like discrimination, and neither do the Opposition. I do not like the postcode lottery in the health service or discrimination in education funding based on which county people live in. The current system for the funding of local education depends on a variety of factors. The Minister must excuse me if I am unclear on the matter—he may be an expert on it, but I am not. However, as I understand them, the factors are as follows: 26 per cent. relates to the number of pupils in schools within the local education authority area; 37 per cent. relates to the number of pupils in the catchment area; 10 per cent. relates to sparsity and reflects the added cost of school transport; and 27 per cent. is based on additional educational needs for deprived areas, which takes into account poor language skills and parents on income support.
The Government have proposed four options for the funding of education in the consultation paper. Regrettably, those options continue to discriminate against schools, pupils and teachers in Devon. Of the four options, only option 2 has a small financial advantage for Devon; the other three would make the funding gap considerably worse for Devon and would mean that the shortfall per pupil was even greater than £195. However, option 2 would result in £2 million of additional funding, which would translate to an additional £21 per annum per pupil. That would reduce the shortfall to £174—but there would still be a shortfall. The four options proposed by the Government still provide Devon with less money than the average county.
The consultation document introduces the concept of using the working families tax credit as a measure of deprivation. That is most welcome, as it recognises the effect of low pay on educational needs and the fact that the number of people on income support is not the only measure of financial deprivation in an area.
In conjunction with the F40 group of the lowest funded LEAs, I ask the Minister to consider a fifth option, which could be an improved version of option 2, 55WH and would achieve a fair financial settlement for Devon schoolchildren. The Government claim to be spending more money than ever on education since they came to power. Fine. Well done. I am all for it. However, option 5 would provide a more equitable funding system by shifting from the additional educational needs criteria towards a basic allowance per pupil. For those who say that that would be unfair, especially as the additional educational needs criteria deal with those who are more vulnerable, I would point out that there are real problems with the criteria.
An independent study by PricewaterhouseCoopers shows that the average funding given to a school to support a child with additional educational needs is £1,150. However, some £550 of that can be provided through what is called unmet needs, which is neither defined nor subject to any scrutiny; it is simply a wish list that allows the local education authority to claim more money from the Government, whether the child needs it or not. That sounds like gobbledegook, and that is where the problem lies—the present criteria are gobbledegook. Additional educational needs funding should be made available entirely on a needs basis, set out and scrutinised by the Government. It should be excluded from the general education funding formula.
The consultation paper did not offer any solution or mention the problems of funding for school transport. Only 10 per cent. of the Government's block education grant is dedicated to that under the heading of sparsity. Yet Devon has more roads than Belgium, and less public transport than almost any other county. It spends over £16 million a year of its education budget on transportation to and from school. If it did not do that it would contravene the Education Act twice—first by not getting the children to their schools and secondly by not providing full-time education. The matter has been festering since 1944.
Option 5, backed by the F40 campaign, has the support of Devon's parents, governors, teachers and teaching union representatives and councillors, over 200 Members of Parliament and all Devon MPs, whatever their political affiliation. My postbag has been overflowing for the past few weeks with hundreds of letters from concerned parties, who are desperate for a change in what they recognise to be a totally unfair system. In July, a delegation of teachers and parents, led by the admirable Helen Nicholls, head teacher of South Brent primary school in my constituency, presented a 60,000-name petition to the Prime Minister, when he accidentally came out of the door of No. 10.
§ Mr. John Burnett (Torridge and West Devon)I do not know whether the hon. Gentleman intends to mention the fact that it took less than a week to get those 60,000 names. Had we had slightly longer, the number would have doubled.
§ Mr. SteenWell, we can put that right. If the Government feel that it would be helpful, I am sure that we can oblige. Miss Nicholls gained the Prime Minister's attention and he listened carefully to her explanation of the fact that the system of funding penalises Devon's children. The Government, like others, listen carefully; we hope that that listening will yield some productive and constructive results.
56WH There are 95,896 pupils in primary and secondary schools in Devon. An increase of £195 per pupil, bringing them up to the national average, would result in a net increase of just over £18.5 million a year to the education budget. The practical difference that option 5 would make would be in the provision of funding to cover the immense burden faced by Devon in transporting pupils from home to school—some £16 million. For an average secondary school in Devon, that would mean an extra £250,000 that could be translated into 16 classroom assistants or eight teachers. That would be a godsend for Stephen Jones, the head teacher of King Edward VI community college—KEVICC—in Totnes, who is beside himself with concern as to how he will manage under the present financial arrangements. For an average primary school of around 200 pupils, with six or seven teachers, it would mean an increase of around £40,000 per annum. That money would pay for an extra teacher or two classroom assistants, dramatically reducing the pressure on the existing teachers. Dartington Church of England primary school has almost double the average number of students in Devon. Its head teacher, Annie Tempest, would be over the moon if extra money were to come her way each year.
In Devon, as I believe that the Minister knows, standard attainment test results in both primary and secondary schools, as well as GCSE results, are consistently higher than the national average. That is thanks to the dedication of the teachers and the quality of the students. I should also mention the outstanding contribution of that talented county councillor, John Hart, who, as executive portfolio holder for education, has put education above politics. All schools in Devon follow a national curriculum and national targets for pupil attainments. They work hard to meet national political expectations, employ staff on national pay scales and purchase additional resources from national educational companies, but Devon does not receive equal national funding. An increase in funding to the average level per pupil in England through option 5 would ensure that Devon schools could build on the excellent standards that they have achieved and make rapid progress. Conservative Members believe in excellence—in the highest common denominator—not in trying to level downwards to the lowest common denominator.
In a House of Commons debate on 26 April 1999, the present Secretary of State rightly stated that this Government are committed to fair funding for all schools and to a process of phasing out unfair funding. That is just what we wanted to hear, and no doubt the review will give her the opportunity to put things right.
§ Mr. Deputy Speaker (Mr. Edward O'Hara)Before we proceed, several hon. Members have made arrangements with the hon. Member for Totnes (Mr. Steen) and with the Minister to make contributions. It may help them to gauge the length of their contributions if I say that it is desirable that the Minister be called to speak not later than 1.22 pm.
§ Mrs. Angela Browning (Tiverton and Honiton)I congratulate my hon. Friend the Member for Totnes (Mr. Steen) on the case that he made on behalf of Devon schools, which I completely endorse.
57WH I want to pick up a couple of points. First, my hon. Friend rightly spelt out the critical situation of the Devon local education authorities in having to provide for school transport in a large rural county. A letter from the Department in August, in response to a chairman of governors in my constituency, stated:
We know that pupils from poor backgrounds generally achieve worse results than those from more affluent backgrounds and that it costs more to educate them to the same level. So poverty is one of the pupil characteristics that we want to take into account in drawing up the new funding system.I do not think anyone would disagree with that statement, but if one of the criteria for determining affluence and poverty is to be car ownership, I should tell the Minister that although car ownership in Tiverton and Honiton—my very rural and not very wealthy part of Devon—is one of the highest in the country, the two and three-car families mostly own old bangers, not new Mercedes, and so on. I hope that the Minister will analyse carefully the rather rigid criteria that determine affluence and poverty.Secondly, there are schools with genuine problems that the Minister's Department would not determine as being in areas of poverty. Earlier in the year, I wrote to him about one such school, Uffculme, a school for 11-to-16 year olds, saying that it could not meet its statutory requirements now, never mind under the proposals for changes in the formula, but the Minister declined to meet my local education authority, the school and me. I raised the matter in the summer Adjournment debate and I hope that the Minister will reconsider my request, not least out of courtesy to a Member of Parliament. If good schools in areas not deemed to be of known poverty fail to meet their statutory requirements—we are not talking about a sink school, but about an excellent school—I hope that the Minister will take into account the difficulties they are suffering.
§ Mr. Gary Streeter (South-West Devon)I shall limit my brief remarks to the issue of village schools, of which there are many scattered throughout the county of Devon. I congratulate my hon. Friends the Members for Totnes (Mr. Steen) and for Tiverton and Honiton (Mrs. Browning) on the points that they made.
I know the Minister to be a reasonable man who is probably very sympathetic to the cases being made today; however, it is not the Minister's Department but the Office of the Deputy Prime Minister that will decide on the new funding formula and I hope that the Minister will put our comments robustly to the Deputy Prime Minister.
By and large, educating children in small village schools in Devon is a success story, but the cost of so doing is significantly higher than educating children in urban areas. The cost of school transport has already been covered excellently by my hon. Friend the Member for Totnes. The cost of maintaining old buildings is a serious issue and the cost of providing many local services—people have to travel large distances—can also be higher, yet the quality of education that many of Devon's primary school pupils receive is of the highest level. Our village schools produce not just excellent standards but young citizens who have a responsible, 58WH informed approach to society, most of whom will go on to become responsible adults and play an active role in this country.
Village schools hold local communities together. They are what parents want, and their existence is vital in maintaining those communities. However, they cost more, not less. That the children of Devon receive £195 a head less to maintain their education than children in other areas creates a huge problem.
I was part of the delegation—I believe that all colleagues from Devon were there—that handed the petition to the Prime Minister, who listened carefully to the points that Helen Nicholls made to him. That was on 16 July and, as far as I was aware just a few days ago, no reply has been received from Downing street three months later. It is one thing to listen carefully to the points made by responsible senior head teachers from Devon, but it is a pity that Downing street, with all its resources, cannot even find the time to write a letter in response. I hope that that does not sum up the extent to which the Government are listening to the very real concerns of those who live in the countryside.
The countryside has suffered greatly in recent years, as the Minister knows. Farming is in crisis, and we are still trying to recover from the foot and mouth crisis in Devon. It will be another body blow if the fair funding formula is not a vehicle for putting right the shortfall in education funding for the children of Devon. The message to the Minister today is simple: stop the discrimination, give us fair funding, and give us option 5.
§ Mr. Hugo Swire (East Devon)I shall keep my comments brief, but I want to thank my hon. Friend the Member for Totnes (Mr. Steen) for securing this debate so early. It is an extraordinarily important debate for all of us who represent constituencies in Devon. Since I have been a Member of this House—just over a year—I have never had so much correspondence on any other subject. I was part of that delegation on 16 July, and I heard the Prime Minister tell Helen Nicholls that he would study the situation carefully and get back to her. I suspect that all Members in the Chamber today overheard that, as did Alastair Campbell who was also there. He will therefore find it difficult to wriggle out of it.
As a fair man, I compare and contrast that lack of a response with a reply from the Minister, to whom I wrote on 30 September. He had the courtesy to reply to me by 6 October, for which I thank him. He gave some hope in that letter, saying that he was open to other ideas and that he would take on board our strong representations for option 5. I hope that that is the case, and that decisions have not already been made.
My constituency has one of the largest secondary colleges—Exmouth community college—in the country. It also has one of the best grammar schools—Colyton grammar school. Each school is affected by the new proposals in its own way, as are all the primary and secondary schools in the more rural areas. I have raised several times in the Chamber the question of rural sparsity and the incredibly high costs of transport in our part of the world. As we have heard, the bill is £17.5 million. In real terms, that means that more than 6 per 59WH cent. of our education budget is committed before a single child is taught. The Government currently provide £12.8 million towards that, which leaves a gap of £4.7 million. If the cost of school transport were fully funded centrally, that would mean an extra £50 for every pupil in Devon.
That is just one of the points that we seek to highlight. Other factors will be discussed later in this morning's debate. I earnestly hope that the Minister will take on board this cross-party alliance, which represents all primary and secondary school teachers in our part of the world. As David Birch, the principal of Sidmouth college, who now chairs the Devon Association of Secondary Headteachers said:
We are not asking for special treatment. All we want is a fair deal.
§ The Minister for School Standards (Mr. David Miliband)Many congratulations to the hon. Member for Totnes (Mr. Steen) on securing this debate so early. I am happy to engage with him, as I did with one of his colleagues at our meeting last week. I will address the specific issues of sparsity and transport that were raised about the development of the new funding formula, but I also want to present a broader picture.
I start by thanking the hon. Gentleman for his support for the Government's policy of increasing expenditure on schools. I hope that it will not bore him if I at least put that discussion into context by explaining the increased investment in education in Devon. I do not want to trespass into party political territory, but if the hon. Gentleman could also persuade some of his party's education spokesmen that increasing investment is a good idea, he would have not only my thanks but those of his constituents.
I was struck by the figures when they were produced for me. Since the local government reorganisation in 1998, Devon local education authority's expenditure has changed. Its standard spending assessment, which is the key part of local government spending, has increased by about £60 million over four years, which is about 25 per cent. Real-terms funding per pupil from that block has increased from £2,750 per pupil in 1998–99 to £3,220 this year, which is an increase of £470 or 17 per cent. Those figures are rather different from those that the hon. Gentleman gave. I hope that he will accept it if I ask my officials to write to him to explain the disparity so that we can proceed on the basis of similar figures.
Of course, the standard spending assessment is only part of the picture. The amount that Devon receives through the standards fund, which is a central allocation, has increased from £7.6 million in 1998 to more than £26.5 million this year. That money supports a range of features of school improvement.
Those moneys are not the only two categories of increased spending in Devon. Payments from the school standards grant, which is sometimes known as the Chancellor's grant, go directly to head teachers and are announced at the time of the Budget. The grant was introduced two years ago and more than doubled from £3.6 million in 2000–01 to more than £8 million this year. I know that the hon. Gentleman will be pleased by the 60WH Chancellor's announcement in the spending review that a typical 250-pupil primary school will receive more than £10,000 more next year due to the increase in the schools standards grant, which is a rise from £40,000 to £50,000. A typical 1,000-pupil secondary school will receive £50,000 more, which is a rise from £115,000 to £165,000. There is much greater investment in Devon's schools.
I know that the hon. Gentleman will be keen to have it on the record that capital investment in Devon, which reached the shameful level of only £13.1 million a year in 1997, was £26.6 million last year and is more than £45 million this year. That includes a private finance initiative project—
§ Mr. BurnettWe are interested in the present and the future rather than the past.
§ Mr. MilibandI understand that and I promise the hon. Gentleman that I shall respond to the points that were made. It is worth putting on the record that the rising spend is being given to every LEA throughout the country. We are discussing how that should be distributed—the spend has gone to Devon.
The main focus of the debate is the local government finance review. Hon. Members know that it is easier and more popular for a Government to announce a review than to announce a review's conclusions because a review gives hope throughout the country but its conclusions do not necessarily meet all expectations.
It is fair to point out that there are strong passions about the local government review throughout the country. The so-called F40 group has circulated many petitions, as have groups in other parts of the country that hold equally strong views. I am meeting representatives of each group and I met the F40 group on 25 September—a head teacher was present although I am not sure whether she was Ms Nicholls. There was a constructive exchange of views and I made it clear that the Government have not made decisions about the final outcome of the local government funding review and that we are listening seriously to consultation.
As the hon. Member for Totnes said, education is only part of the scene. There are four education options but I confirm that they were there for discussion and not simply for choice. We are happy to take representations on other options and I shall address his description of option 5 later.
We would all agree that the current system has problems—the hon. Gentleman said that that dated back to 1944. I hope that we can all agree that we want a fairer and clearer system that is based on clear elements.
§ Mr. SteenBefore the Minister moves on to the future, may I get his agreement because my figures were somewhat adrift from his? Does he accept that as things stand there is a difference of £195 per pupil between Devon and the average county? Can we at least get that clear?
§ Mr. MilibandThose figures are not in my notes. I think that the figures to which the hon. Gentleman referred represent average spend across the primary and secondary sectors relating to other counties. It would not be wise for me to say that I recognise the figures 61WH when I have not seen them. I shall write to the hon. Gentleman to clarify what we are discussing. It is clear that Devon's funding is not above average.
A formula for the future that will command confidence and respect will include a basic entitlement, and will recognise additional educational needs—the hon. Member for Tiverton and Honiton (Mrs. Browning) referred to poverty-related indicators—and the extra costs of running the education system in some parts of the country, including Devon.
The Department for Education and Skills has guaranteed that there will be no real-terms losses as a result of the process. Floors in the system will ensure a real-terms guarantee for LEAs. That is important. The consultation process began on 8 July, just after the presentation of the petition, and closed on 30 September. The options discussed today centre on deprivation and area costs.
I do not wish to breach confidentiality so I cannot announce the outcome of the review today, but let me give the Chamber some idea of the direction of our thinking. We are not limited by the options set out in the consultation paper, but we want to achieve a fairer match between needs—a word used by at least two, possibly three, Opposition Members—and spending. That is not the same as saying that we should set an artificial target for the funding gap between authorities. The F40 campaign's option 5, which is not a distinct option but asks for more of one option and less of another, adds up to taking money from the deprivation element of the formula and putting it into the basic entitlement. That obviously has significant implications for other authorities around the country, but we take seriously the case for a higher basic entitlement. However, Devon will benefit from some of the extra money allocated for additional educational needs.
I appreciate that some areas, such as Devon, have substantial areas of sparse population. That is why we propose that the new formula should contain a sparsity element to reflect the costs of home-to-school transport in rural areas and to help rural primary schools. Let me explain this carefully because the hon. Member for Torridge and West Devon (Mr. Burnett) raised the subject previously.
Authorities with sparse populations want us to introduce a sparsity factor for secondary schools, too. We have examined the issue in some detail, but we found no evidence of a connection between secondary school size and sparsity. Small schools are as likely to be found in densely populated metropolitan authorities as in shires, such as Devon, but we recognise that secondary 62WH school pupils often have to travel further to get to schools in authorities with sparse populations. That is why we examined the transport expenditure of each LEA to assess the impact of sparsity. We estimate that, in the new formula, 60 per cent. of the transport element of the LEA block will be distributed through the sparsity index and 40 per cent. according to the number of pupils living in the authority.
§ Mr. Patrick McLoughlin (West Derbyshire)Option 5 is supported by many counties, not just Derbyshire. I know that the Minister has received many representations, and he has told us today that he will consider all of them, but the tight timetable for implementation is causing concern. What consultation period will there be after the Government have put forward their final option, or will it be a matter of take it or leave it?
§ Mr. MilibandI give way to the hon. Member for Torridge and West Devon.
§ Mr. BurnettWill the Minister confirm that the Government intend to provide in the formula for primary and secondary school transport?
§ Mr. MilibandThe consultation on the Government's final proposals will proceed in the usual way for a local government finance settlement in late November, early December. The transport indicator in the LEA block relates to both primary and secondary schools, but the schools block covers only the primary sector.
Finally, on the definition of deprivation, the hon. Member for Tiverton and Honiton referred to the number of cars in a household. I do not know where she got that idea. We made it clear in the consultation paper that there are two options for measuring deprivation. The traditional income support measure includes people on incapacity benefit, so it is a measure of non-employment that targets a particular group of families. However, we flagged up in the consultation paper that we also want to recognise those children who live in working families on low wages. That is an issue in places such as Devon where many rural workers are on low wages. We take that seriously and want to recognise need in a proper not an arbitrary way.
To conclude, this has been a useful debate. I take seriously the points that have been made. However, I reiterate that spend is rising in all LEAs throughout the country. I hope that the Opposition will support us in that.