West Sussex Schools Funding
Nick Herbert (Arundel and South Downs) (Con)
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on securing the debate on behalf of West Sussex Members, who are concerned about school funding in our county.
I will not repeat the case so ably made by my right hon. Friend and by my hon. Friend the Member for Horsham (Jeremy Quin) for redress to the unfair funding for the county over the mid to long term, because it has been perfectly well set out. I have also set it out before, in a debate in this Chamber last November, and I will spare my colleagues from hearing precisely the same remarks again. Another reason I am not going to set it out is because the Government accept that there is unfair funding in West Sussex. In response to the petition that has been organised by schools in West Sussex, the Government said:
“We recognise West Sussex is a relatively low-funded local authority.”
That is objectively the case—it is the third worst funded authority and is pretty much on the bottom as far as shire counties are concerned.
The Government have recognised the need to something about that, so we do not just have warm words from them; we have a commitment to introduce the national funding formula. It is important that that is recognised and welcomed, because it is a brave step. Future funding should not be allocated to schools on a rather arbitrary and unfair basis but should be based on a proper assessment of need and with a view to ensuring greater fairness. That commitment was in the Conservative manifesto, the policy was announced by the then Chancellor of the Exchequer and it has been reiterated by the current Education Secretary. I understand that the introduction of a national funding formula has cross-party agreement; perhaps we will have confirmation of that later.
We are not arguing about the need to move to a fairer system in the mid to long term, or whether that will happen. I should just say that I think it is important that those who are pressing for fairer funding in West Sussex acknowledge the Government’s position on this and the commitment to introduce a national funding formula. It does not help when our county council issues statements on the matter and does not recognise that the national funding formula has been pledged, or when headteachers refuse to acknowledge it. I urge those who I am supporting to take a little more care in ensuring that the way in which they present their case is balanced and is likely to be well received by those who have made a commitment to move in the right direction.
We are discussing the interim situation before the national funding formula is introduced, and the recognition that that formula has been delayed by one year, to 2018-19 rather than the year before as was originally pledged. On the expectation of fairer funding, it will be hard to introduce a fairer formula and not see some improvement for West Sussex, which is funded on the most palpably unfair basis at the moment, and for the situation to improve—but we should recognise that that improvement might be incremental.
In the meantime, schools in West Sussex face a particular difficulty. The Government have protected school spending overall, in the same way they have protected other key budgets, and that should be recognised. In a difficult fiscal framework, when there is a need to save money and when the country still spends more than it earns, the schools budget—a massive budget in the Government’s overall programme—has been protected. Nevertheless, the way in which that has been achieved means there has been flat cash for schools in West Sussex at a time when their costs have increased and costs have been loaded on to them. That was ably set out my by right hon. and hon. Friends.
It might help the Minister if I give a practical example, because I want to persuade her that the impact on these schools is real. In my constituency, we have a very good school, Steyning Grammar School, which is in fact a comprehensive, not a grammar school. The excellent headteacher, who is presiding over an increase in standards year on year, has supplied me with figures, which I am happy to send to the Minister. The school has seen a real-terms cut in funding of around 10% since 2010 as a consequence of the increased costs it is having to meet and reductions in certain grants. As a consequence, the percentage of the school’s budget that is accounted for by staff costs is increasing from around 80%, where it should be, to 84%. Teaching full-time equivalents have fallen from 132 in 2010 to 118 in 2016-17.
In budgetary terms, this meant that in 2015 the school’s budget was just at break-even. In this financial year, 2016-17, the school has set a deficit budget of £600,000, which it will cover from reserves, but for 2017 it forecasts a deficit growing to £850,000 a year, which it will not have the reserves to cover. That will require the school to take action and to reduce its staff levels, which are at the national average in terms of ratios. Unlike schools in other parts of the country that are much better funded and have more generous staff-to-pupil ratios, that school does not have room to make those reductions without there being an impact on the delivery of education and, it fears, on standards.
I strongly urge the Minister to look at the funding and the impact on school budgets in counties such as West Sussex that are facing real-terms funding reductions because of these cost pressures. She must look at the impact on those schools’ budgets on the ground, to recognise that they are not engaged in a game of playing bleeding stumps but face particular difficulty.
Constituents of mine attend Steyning Grammar School, which is an excellent school. With a deficit of £850,000 and staffing at 84%, 85% or 86% of the total budget, if there are forced changes in staff numbers, it would be particularly galling to go through the cost and the pain of reducing staff numbers by whatever means, only to be required as a result of fair funding coming through to then source and recruit new teachers to resurrect those posts and start delivering again for pupils.
I agree with my hon. Friend. He is much better at maths than I am and is able to point such things out. That is what underlines the whole case for transitional funding. I do not necessarily argue that there is a link between performance in the public sector and funding. We should never assume there is an automatic link between the two, such that any reduction in funding is unmanageable or will have an automatic effect on performance. It is incumbent on any public sector institution to run efficiently and to make savings, but by any objective measure the funding of schools in West Sussex is already among the lowest in the country, so there is no fat to cut without there being an impact.
If we still have to make national savings and the schools budget is to be included within that, that should be achieved on a fair basis, but at the moment, the situation is impacting disproportionately on schools that are poorly funded. That is unfair. I was Police Minister when we cut the policing budget by 20% in real terms, but the impact was felt across all police forces. Although there was some difference in how forces were funded, we did not have a situation where some forces faced no cuts at all and others faced reductions and therefore felt they were being treated entirely unfairly.
It is important to recognise the particular situation of these authorities. That lends weight to the case for some kind of transitional help. Again, the Government recognised that, because in announcing the national funding formula they announced a £390 million uplift nationally in school funding, which was then put in the baseline. That has been applied year on year and is a large sum of money nationally. I recognise that, but if we look at the practical effect, the uplift amounted to less than £1 million for West Sussex’s budget, which meant the actual increase was something like £10 per pupil. The impact on schools’ budgets was therefore relatively low.
Because it was very broad, the distribution of that sum in the transitional uplift did not give sufficient help to the areas of the country that most needed it and was not sufficient to cushion them against the increased cost pressures they are facing. To bring West Sussex up to the average level of county councils—never mind the average national level—would require an uplift of £15 million a year, and it has had less than £1 million. That is why the schools are in this position. To bring funding up to the national average, as my hon. Friend the Member for Horsham said, would require a much greater uplift of £40 million a year.
Because of the cost pressures, the reduction in funding and its effect on schools in the county, and because the national funding formula will not be introduced for two years, there is a strong case for interim funding for the worst funded areas, despite the Government’s overall protection of the budget nationally. That would require taking decisions ahead of the introduction of the formula, which I appreciate would be difficult. It would require finding a basis on which to fund only those schools right at the bottom of the pile, rather than too broadly, which is what happened before. Again, that would be difficult, but it is necessary and right, or else schools in West Sussex will cut their budgets in a way that will see staff numbers fall. That is why I urge the Minister to look at this carefully and to recognise that a very fair and reasonable case is being made by schools in the county and that this deserves special attention.
The Parliamentary Under-Secretary of State for Education (Caroline Dinenage)
It is a pleasure to serve under your stewardship, Mr Gray. I congratulate my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) on introducing this really important debate on funding for schools in West Sussex. He presented it in his usual robust, assiduous and charming style. I also congratulate his colleagues from West Sussex, who present a formidable, united front on this issue. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) and my hon. Friends the Members for East Worthing and Shoreham (Tim Loughton), for Worthing West (Sir Peter Bottomley) and for Horsham (Jeremy Quin) are a veritable tag team to be reckoned with. I know that when they go and speak to the Secretary of State this afternoon, they will make their case powerfully and persuasively, as they have done today. I know we all share the same ambition: to see a country that works for everyone, where schools improve and where every child, no matter which county, constituency or part of the country they live in, has the opportunity to go to a good school, to get a great education and to fulfil their potential.
Let me start with the fundamental reason we are here today: to make sure that our children benefit from an outstanding education. We need good schools in every area of the country. Investing in education is truly an investment in the future of our nation as a whole. That is why we are committed to providing equal opportunity for all children to succeed, irrespective of where they come from in the country and where they happen to grow up. A fair funding formula is a fantastic way of achieving that and providing a crucial underpinning for the education system to act as a motor for social mobility and social justice, as we all desire.
As many of my hon. Friends have said today, the Government are prioritising investment in education. As pupil numbers increase, so will the amount of money for schools. This year the core school budget will be more than £40 billion—the highest on record—which includes £2.5 billion for our most disadvantaged children through the pupil premium. That funding is also protected for the rest of this Parliament. The current funding system is holding us back, though. I do not think anyone in this Chamber disagrees with that. It is preventing us from getting the record amount of money that we are investing to the parts of the country where it is most needed.
Sir Nicholas Soames
I am grateful for the constructive and helpful way in which the Minister is winding up the debate. To pick up her point about the welcome increase in education expenditure and the number of new pupils coming into schools, the excellent St Paul’s Catholic College in Burgess Hill—a really good school in my constituency—has had a 31% increase in pupils, but there is so little money and room to manoeuvre in its staff budget that it does not have enough staff to cope with that 31%. It makes do, but it does not have adequate staff, which is one of the problems of the existing baseline and why the school needs the transitional funding to get through to the national funding formula being introduced.
My right hon. Friend makes an excellent point. I will talk shortly about the transitional funding, which I know he and his colleagues from West Sussex are all very keen on.
We are clear that without reform the funding system will not deliver the outcomes we want for our children. As many Members have said today, it is outdated, inefficient and unfair. There are two reasons for that: first, the amount of money that local authorities receive is based on data that have not been updated for more than a decade, so although local populations have changed the distribution of funding has not, and the impact of that is hugely unfair. We have heard many of the relevant figures today. West Sussex is receiving just under £4,200 for every pupil, whereas in Birmingham, for example, that figure is £5,200. Although there will always be variations in the amount different areas receive, because their needs and local costs vary, a system that creates such significant differences cannot be fair.
Will the Minister enlighten the House about whether any areas will lose out because of the introduction of a new national fair funding formula?
We are still in the consultation period, the next stage of which will be announced shortly, so I am not able to comment on that today.
Different local authorities take very different decisions about how to distribute their funding. There are 152 different local formulas, so a primary pupil in West Sussex with low prior attainment currently attracts £863 in extra funding, whereas in Trafford, for example, they attract more than £3,000 extra, and in four local authorities they get nothing. My county, Hampshire, provides no extra funding for pupils in receipt of free school meals, whereas Warrington chooses to allocate more than £3,000 to each secondary pupil in the same situation. That is why we are committed to fixing the system.
Earlier this year we launched a consultation on the new fairer funding formula for schools. The second stage, including the details of the national funding formula, will be announced in the next few weeks. Our aims are clear, and I hope Members from all parts of the House will agree that they are worthy ones. We want to create a formula that is fair, objective, transparent and simple. It should be clear how much funding is available for each pupil and that should be consistent wherever they are in the country. From 2018-2019, we intend to begin moving towards a system where individual school budgets are set by a national formula and not by 152 locally devised ones.
The reforms will mean that the funding is allocated fairly and directly to the frontline where it is most needed. They will also mean that funding reflects the needs of pupils, so the higher the need, the greater the funding. The reforms will be the biggest step forward in making funding fair in well over a decade. It is therefore vital that we take time get them right. We need to debate the important principles that will underpin this and listen to the submissions that are coming back as part of the consultation. We have a responsibility to ensure that the system we set up now enables schools to maximise the potential of every single child.
I am aware of the concerns raised by hon. Members today that fairer funding for schools in West Sussex and other parts of the country is very much overdue. We agree that the reforms are vital, but they are also an historic change, which is why we have to take the time to consider the options and implications very carefully. We cannot afford to get this wrong. Crucially, we must consult widely with the education sector before we make changes. We will carry out the second stage of that consultation later this year and make final decisions in the new year. The new system will be in place from April 2018.
In the meantime, we have confirmed arrangements for funding in 2017-18 so that local authorities and schools have the information and certainty they need to plan their budgets for the coming year. That is so important, because a key message coming out of the first round of the consultation is about the ability to plan ahead and certainty about the future. Schools need to know where they stand.
Areas such as West Sussex, which benefited from the £390 million that we added to the schools budget in the previous Parliament, will have that extra funding protected in their baseline 2017-18, as they did in 2016-17, but I take on board the comments of my hon. Friend the Member for Worthing West, who said that West Sussex received a disproportionately low amount. We will look into that.
The next stage of our consultation, which is coming out shortly, will set out the detailed proposals for the national funding formula and show how the formula will make a difference to every school and local authority budget in the country. We will explain how quickly we expect budgets to change. We have been clear that we want schools to see the benefits of fairer funding as quickly as possible, but the pace of change must be manageable for them. The strong message is certainty and the need to be able to plan ahead. We fully take on board the real-term impact on budgets of the recent changes to pensions and national insurance contributions that my right hon. Friend the Member for Arundel and South Downs mentioned.
All local Members have spoken about the transitional arrangements. I hear them and I know that they will make a powerful case to the Secretary of State this afternoon when they see her. The Minister for School Standards has been working hard on the arrangements. As usual, we will finalise school funding allocations for the coming financial year in December, taking into account the latest pupil numbers from the October census.
Reforming the funding system to ensure that areas such as West Sussex are fairly funded is only half the story. As hon. Members have pointed out, as with all public services, it is vital that schools spend the money that they receive as efficiently as possible. The most effective schools collaborate through academy trusts and federations, or as part of teaching school networks or clusters. They share knowledge, skills, experiences and resources to drive the important changes that support their school’s education or vision. Schools are best placed to decide how to spend their budgets and achieve the best possible outcomes for their students. Lots of schools in West Sussex are already doing that, despite having very low funding compared with other parts of the country. We recognise that the Government have a role to play in ensuring that schools are supported to make every single penny of their funding count. That is why we launched a package of support for schools in January that includes new guidance and tools to help them make the most of the funding they receive, and we will continue to update and improve that offer to schools.
I am enormously grateful for the support that my right hon. Friend the Member for Mid Sussex and the other West Sussex Members have given to the agenda. They have all raised important issues. I hope that they are reassured, more than anything, about the Government’s long-term commitment to reform school funding so that there is a fairer system for children in West Sussex and across the country—a system where funding reflects the real level of need, so that pupils are able to access the same educational opportunities wherever they happen to live.
A fair national funding formula underpins our ambition for social mobility and social justice, and will mean that every pupil is supported to achieve the very best of their potential, wherever they happen to live. Although we should recognise that there are challenges currently, and that challenges will lie ahead, I hope all hon. Members give support to and work with the Government to achieve that vital aim.
You can read the full debate here: http://tinyurl.com/hmrg234