Pupil Premium

Tuesday 16th April 2013 Westminster Hall

10:59

[Sir Nick Harvey (North Devon) (LD)]

An estimated 3.6 million children in the UK live in poverty according to the Government’s own measure, but recent figures from the Children’s Society have uncovered that 1.2 million of those children who are of school age do not receive free school meals. Notwithstanding the nutritional benefits that children receive from free school meals, the problem is that free school meals are used as a predominant marker for educational attainment. The well known attainment gap at GCSE level is between those who receive free school meals and those who do not—36% of pupils in receipt of free school meals achieved five or more A* to C grades at GCSE, compared with 63% of all other pupils. That is a useful indicator of the inequalities in children’s educational achievement.

That is also why the pupil premium, which is undoubtedly one of the proudest achievements of the coalition and of Liberal Democrats within the coalition, follows those children who receive free school meals. Designed to help pupils who are most in need and to close the attainment gap, the pupil premium is available to children who are currently eligible for free school meals, who have been eligible in any of the past six years or who have been in continuous care for six months. Those criteria are known as “ever 6 FSM.”

[Karen Lumley (Redditch) (Con)]

I congratulate my hon. Friend on securing this debate. Does he agree that, although the pupil premium is a great first step, we should be looking for a national funding formula that is fair for every child in this country?

[Sir Nick Harvey]

I strongly agree, and I welcome the suggestion from Ministers that they are working towards that objective. I also appreciate that, particularly in the current financial climate, it cannot be achieved overnight, but it would be a great pity if, during the five years in which the Conservatives and Liberal Democrats form a Government together, we do not see at least some tangible progress towards that object.

[Robert Halfon (Harlow) (Con)]

I am hugely grateful to my hon. Friend for giving way, and I congratulate him on securing this debate. Does he agree that a huge injustice is being done to students who are eligible for free school meals? If they go to school, they get free school meals, but if they go to a further education college, such as mine in Harlow that has 500 poor students who would otherwise be eligible, they are denied free school meals. Is that not something we need to reform urgently?

[Sir Nick Harvey]

My hon. Friend makes an interesting point. In a minute or two I will address the reforms that I think are necessary. Happily, the coming of universal credit gives the Government an opportunity to reform the system. Of course, universal credit has great potential for considering household income holistically, and I would like to believe that, at the end of the process, where a student is studying will have less to do with whether they receive free school meals and that their family’s circumstances will have rather more to do with it. I hope there might be a solution to that problem in the pipeline.

There are still significant numbers of children living in poverty who are simply not picked up by the free school meals measure, and therefore they and their schools lose out on the valuable support that the pupil premium could give to them. There are families suffering on cripplingly low wages of just above £16,000—those receiving working tax credits—and there are those for whom the stigma of claiming free school meals is still enough to deter them from doing so, although I do not think the significance of that should be exaggerated.

Receipt of free school meals is simply not an accurate proxy for poverty, so I question the logic of linking pupil premium funding to free school meals. In many constituencies, such as my constituency of North Devon, the link is simply not the way to address the underlying inequalities in children’s attainment relative to their socio-economic background.

Parents who receive income support, income-based jobseeker’s allowance, income-related employment and support allowance, support under the Immigration and Asylum Act 1999 or the guaranteed element of state pension credit are eligible to receive free school meals, as are parents receiving child tax credit so long as they are not also receiving working tax credit and have an annual gross income of no more than £16,190.

In its report “Fair and Square,” the Children’s Society found that some 700,000 children living in poverty are not entitled to receive free school meals, in the majority of cases simply because their parents are working. As six in 10 children in poverty live in working families, there is clearly an urgent need to address the situation of those children who do not happen to qualify for free school meals yet grow up in circumstances just as dire as many who do.

In my constituency of North Devon, an estimated 1,400 children in poverty—47% of whom live below the Government’s own poverty line—are missing out on free school meals not because they are not claiming them but because they are not eligible. North Devon has the 30th-lowest wages of all the mainland British constituencies, and the neighbouring Torridge and West Devon constituency is third in that dire ranking.

Pockets of rural deprivation are commonplace in the south-west. They are less easy to spot in small rural communities isolated from urban centres, and they are exacerbated by the high cost of living. Mothers have come to my advice surgery to tell me that they will not take up offers of employment because doing so would cost them their free school meals, as they would be in low-paid employment and in receipt of working tax credit. It does not seem right that, when the Government are doing everything that they possibly can to incentivise work, hard-working parents in need of help from the state to boost their terribly low incomes are deprived of help to feed their children.

The cash value of free school meals is estimated to be £386 a year for a child in secondary school. One can think how the cost will quickly stack up for mothers with several children who are exempt from free school meals, thanks to their low-paid jobs that entitle them to working tax credit. Barnardo’s has calculated that, for a workless single parent with two children, the cash value of their entitlement to free school meals is worth 5% of their income. That money would otherwise be spent on paying bills, financing the rising cost of living and, in rural areas such as North Devon, paying for high travel costs over some distance to and from work and possibly even school.

In summary, free school meals are a blunt measure that fails accurately to represent the extent of rural poverty in areas with traditionally low wages. All that is problematic enough in itself, but the fact that the Government have chosen to target the pupil premium at children receiving free school meals makes the implications go even further than just the immediate family situation.

Schools in areas with high rates of low-paid employment will receive lower pupil premium entitlements than they need to support children from disadvantaged working families. In Devon, where we already suffer with the six worst-funded schools in the country—this addresses the point made by my hon. Friend the Member for Redditch (Karen Lumley)—that is pushing to the brink the capacity of schools to support disadvantaged children. Surely, distributing pupil premium on that basis is widening the attainment gap between rich and poor. The distribution is certainly widening the funding gap because, if areas such as Devon are getting less pupil premium than the national average when, as the second-poorest county in the country, it would be expected to receive far more than the national average, a bad problem is being made worse, which is a terrible pity when the objectives of the pupil premium are so laudable and so widely supported.

The linkage of the pupil premium to free schools meals presents other problems. I have mentioned the residual, underlying problems of having some of the lowest school funding per child in the country. Every pupil in Devon receives £480 less each year for their education than the national average. In 2012-13, that has meant an annual loss in the county of some £49 million. I am not pretending for one moment that that is unique to Devon, and I am grateful to the F40 school funding group, which comprises some of the 40 lowest funded local authorities, for its work in raising awareness of these issues in political circles and specifically with Ministers. However, when small rural schools with a high proportion of children from low income, rural families are not receiving the pupil premium on the scale that they could reasonably have expected, the consequences are felt even more keenly.

What the pupil premium is spent on is also an important consideration because it has the potential to exacerbate the flaws inherent in its link with free school meals. Schools are rightly given a pretty free rein in how they spend the pupil premium allocation, but if they choose to spend it on individual tuition or personalised support, the gulf between children from poor working families and their contemporaries continues to widen even further.

A report by the Association of School and College Leaders published early this year also highlighted that the pupil premium in its current form represents an all-or-nothing approach to additional funding. The report expressed concern about low income families being ineligible for free school meals and called for greater sophistication in the pupil premium policy. No one doubts the clear benefits of the extra support that the pupil premium offers, but it is wrong for a significant number of children to lose out, while their families struggle to stay afloat financially.

What is the solution? Help may be at hand. The introduction of universal credit means that eligibility for free school meals must be revised. The criteria used to define who receives them will no longer exist and the system will have to change. We do not know whether or how free school meals eligibility will be determined with universal credit, but I hope that Ministers will seize this opportunity to improve both the entitlement to free school meals and distribution of the pupil premium. The Children’s Society estimates that if all families receiving universal credit were entitled to free school meals, registrations would increase to around 2.7 million with about 900,000 more children being eligible for the pupil premium than at present. In this financial year, each pupil premium payment is £900, and spreading the same money among more children would dilute the payment, but surely the rationale should be to extend the benefits of extra support to the maximum number of children who need it.

The Children’s Society has also calculated that, based on the 2014-15 allocation of some £2.45 billion, a rate of £918 for each child receiving the payment could be maintained, and would still be a little higher than this year’s figure. I understand why the Government are keen to see the headline rate of pupil premium rising, but there is no point ramping it up if many children who should receive that help miss out on it. Linking the pupil premium to universal credit would provide a more accurate picture of deprivation, so ensuring the inclusion of low income families and reflecting income relative to household need. That would offer greater sophistication and a more holistic view of family circumstances.

The flaws of basing the pupil premium on free school meals have not toppled out by accident, and many of us saw them coming in advance. When all three political parties started talking about the pupil premium or something akin to it back in 2008, I immediately received a telephone call from Devon county council saying, “For goodness sake, flag up to your colleagues that basing the pupil premium on free school meals will be a complete disaster and it will miss its target.” We are rightly proud that we have introduced the pupil premium, but we must take the opportunity of universal credit to adjust to whom it is targeted.

I hope that I have outlined today the case for change in the distribution of pupil premium. Using free school meals to target the payment excludes some of the children most in need of help. Some 1,400 children in my constituency alone, and many more throughout the country, should not suffer the consequences of this clumsy and inaccurate measure to define poverty. Schools with limited resources in some of the worst-funded areas should not be left to cope with the needs of deprived children who do not happen to meet the eligibility criteria. If left to continue in its current form, it will continue to mask inequalities and worsen the attainment gap. I appeal to my hon. Friend the Minister to find the best way to envelope free school meals into universal credit and to ensure fairer and more effective distribution of pupil premium to all who need it.

11:10

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

It is a pleasure, Mr Crausby, to serve under your chairmanship. I congratulate my hon. Friend the Member for North Devon (Sir Nick Harvey) on securing this debate. I discussed the matter with the Minister for Schools yesterday, and my hon. Friend will know that the two of us have ministerial responsibility for the matter, not least because of the importance of the 16-to-19 question, which is a subset to which my hon. Friend the Member for Harlow (Robert Halfon) referred.

The nub of the debate is the right eligibility for the pupil premium. There is consensus in the Chamber that it is an unalloyed good policy, and I think there would also be consensus if a member of the Labour party were present. There is a good reason for that. The school meals service extends back to the mid-19th century, and was introduced by charities to ensure that disadvantaged children had the opportunity to eat at least one good meal a day. Since then, provision has been broadened to paid-for and Government-funded meals, but the aim remains of ensuring that families who struggle to afford to pay for school meals are helped to do so, not least because healthy meals and good nourishment make it easier for children to concentrate, and help them to be better behaved and more able to learn.

The key question of how to support free school meals and, through that, how to support and decide on allocations for the pupil premium is critical. The debate comes at a good time, as universal credit is introduced in pilot areas this month and will shortly be in full force. Eligibility for free school meals and therefore the pupil premium is a live issue and the Government have not yet announced exactly how that eligibility will match up, so it is a good time to have this debate.

We know that income matters, but the measure of poverty is important. The relative poverty measures that my hon. Friend the Member for North Devon mentioned do not in isolation provide an accurate picture of the experience of poverty in the UK. It is important when talking about eligibility not to compare raw poverty figures with eligibility because every measure of poverty is imperfect. Poverty based on relative poverty—40% of median income—is only one way of measuring it. For example, the latest figures show that 300,000 children moved out of poverty, in large part due to a drop in incomes at the top, not least because of taxation policy. The question of which poverty measures impact on the ground is therefore critical. An important consideration is that such measures need to be attuned enough so that financial allocations can be based on them. As a result, receipt of welfare of benefits has been seen as a more reliable basis for identifying disadvantage, not least because it can be proven easily by parents. Over the years, the list of qualifying benefits for free school meals has increased to ensure that the children who most need free school meals are entitled to them. My hon. Friend mentioned the change to the “ever 6” formula so that those entitled to free school meals during the past six years are eligible for the pupil premium, rather than only those who are currently entitled.

[Sir Nick Harvey]

The Minister’s point is that there are many different measures that could be used, and that the relative poverty figure is a percentage of the whole and thus prone to fluctuation from time to time. Nevertheless, can he not see the point made by the Children’s Society that, if the Government have an accepted measure of children living in poverty, it is strange to have free school meals based on measures that are so far apart from it that a significant proportion of those whom the Government deem to be in poverty are not entitled to the meals?

[Matthew Hancock]

The measure my hon. Friend refers to is one measure of poverty; it is not the measure of poverty. Crucially, however, the link between eligibility for free school meals and poverty is changing with the universal credit, as he said, and I shall come on to that in a second.

My hon. Friend set out what I want to put on record: the link between poverty of income, education or aspiration and the prediction of a child’s future life chances. The issue is important because disadvantage remains strongly associated with poor performance throughout school, a fact that provides the central driving mission of the reforms to education under this Government. We wish to close the attainment gap by improving the quality of education through a range of measures, not least the pupil premium; by improving schools through free schools and academies; and by improving the quality of teachers going into the profession, not only in schools in well-off areas but throughout the country. We in this Chamber agree on that central driver and on the many reforms that are taking place in order to achieve it. The link between free school meal eligibility and underachievement is strong. At every national level of educational attainment, pupils eligible for free school meals are at a lower stage than their peers.

[Robert Halfon]

Does my hon. Friend agree that that also applies to sixth-form students in colleges? Three times as many students at colleges are eligible for free school meals as students in maintained sixth forms. If we are serious about levelling the playing field, should we not concentrate our resources on those most in need, in particular those who go to sixth-form colleges?

[Mr David Crausby (in the Chair)]

Order. The Minister earlier referred to the absence of Opposition spokesmen, but I understand that “Erskine May” notes that these debates are personal to the Minister and the Member, so reference to the absence of Front-Bench spokesmen is not appropriate because they could not speak from the Front Bench in any case.

[Matthew Hancock]

I am terribly sorry. I was referring not to Front-Bench spokespeople but to any Opposition Members. I take your point, however, Mr Crausby.

On colleges, I understand the point made by my hon. Friend the Member for Harlow, but we need to be careful about what we wish for, because schools are not funded for the provision of free school meals to those over the age of 16, although they have a legal requirement to deliver them. Colleges have the 16-to-19 bursary fund to support those most in need, which can pay for anything, at the discretion of those colleges that receive it, including meals. A requirement on colleges to provide free meals to students who are eligible for them—in schools, funding is not provided to do that—would fetter the discretion of those administering the funds provided for bursaries. We therefore need to be careful about how we look at this important question.

I understand the point made about the spending on the pupil premium being spread more thinly or, as my hon. Friend the Member for North Devon said, diluting it by extending its reach into younger years. We all understand the importance of early years, which is backed up strongly by the evidence, but we have already increased funding to early years education: 20% of two-year-olds now have a commitment of 15 hours of funded education a week from this September, rising to 40% next September, with the funding increasing to £760 million per annum in 2014-15. We have a responsibility to primary schools not to dilute their agreed funding. I understand the argument, but the question is how best to deliver for early years; our preference is to extend the breadth of the target group reached by the premium in the age ranges covered.

[Sir Nick Harvey]

The dilution I was talking about was spreading the premium to a larger number of entitled children, not taking it to a lower age.

[Matthew Hancock]

In either case, the increase in the funding over the past couple of years has gone not only to broaden the eligibility, for which my hon. Friend is calling, but to increase the rate. A balance has been struck between the two, and the premium now reaches about a quarter of all pupils, compared with 18% in 2011-12. Furthermore, we cannot identify the children concerned unless they have been registered as eligible at some point in the previous six years, hence the introduction of the “ever 6” extension and our work to improve take-up, for example with a new online facility for local authorities to contact the Department to find out about eligibility.

I now turn to the crucial point of the introduction of universal credit. As my hon. Friend the Member for North Devon said, the under-registration rate for free school meals is remarkably low in Devon, at only 3%. I commend those concerned, such as those working in the local authority, for that extremely good rate; in Devon, we have identified only about 300 children eligible for free school meals who do not claim them, which is one of the lowest rates in the country. The question, however, is what we do when we introduce universal credit.

Crucially, universal credit includes low-income working families, which is not currently the case in consideration of free school meals, because those on working tax credit are excluded, although they will be included in universal credit. In order to make work pay, universal credit will ensure that reduction by withdrawal of benefits is done in a way that does not stop work paying. The case of free school meals, put so powerfully by my hon. Friend, matters because we have to look at the marginal withdrawal rate of all state benefits, and the free school meal is a benefit in kind. We will take that important consideration into account.

The universal credit reforms give us the opportunity for such consideration, and it is taking place right now, so my hon. Friend’s speech was extremely timely as well as powerfully put. I will ensure that those examining the matter see the transcript of the debate in Hansard, and I am sure that he will make the point directly to other Ministers as well, including the Minister for Schools. We have to get things right, because the pupil premium is an important policy, and we must ensure that it is fairly distributed and gets to the people who need it most.

11:29

Sitting suspended.