School Funding Formula and Northern Schools

(Limited Text - Ministerial Extracts only)

Tuesday 17th January 2017 Westminster Hall

[The Minister for School Standards (Mr Nick Gibb)]

It is a pleasure to serve under your chairmanship as always, Mr Streeter. I start by congratulating the hon. Member for Southport (John Pugh) on securing this important debate. He is right—this is one of a number of debates we will undoubtedly have as we consider the second stage of the consultation on our national funding formula. We will debate funding in Devon tomorrow, and I am looking forward to that debate as I much as I have looked forward to this one. This is part of a process of consultation on the second phase, in the same way as we consulted on the first.

The Government are committed to improving educational outcomes in the north, and reforming the funding system is essential to underpinning that ambition. Although I represent a southern constituency, I spent many years of my childhood living in Leeds and Wakefield in the 1970s, and I do not recognise some of the hon. Gentleman’s comments on the opportunities available for people in the north. The hon. Gentleman spoke of cost pressures on schools in general, and in the north in particular. Through our careful management of the economy, we have been able to protect the core schools budget in real terms, which means that schools are receiving more funding than ever before for children’s education—more than £40 billion.

We of course recognise the cost pressures facing schools, and we will therefore continue to provide advice and support to help schools use their funding in cost-effective ways and improve the way in which they buy goods and services, so that they get the best possible value for their pupils. We have published a wide range of tools and support on gov.uk, including support for schools to review their level of efficiency, to investigate expenditure levels of similar schools and to take action to improve efficiency in practice. We are also launching a schools buying strategy that will support schools to save more than £1 billion a year by 2019-20 on non-staff expenditure. It will help all schools to improve how they buy goods and services, allowing them to invest more in high-quality education for their pupils.

As well as helping schools make the best use of their resources, we urgently need to reform the unfair system that currently distributes funding across the country. The Government are committed to creating a country that works for everyone no matter where they live, whether in the north or south, in a city or the countryside. Whatever their background, ability or need, children should have access to an excellent education. We want all children to reach their full potential and to succeed in adult life. We know that the current schools and high needs funding system does not support that aspiration—it is unfair, untransparent and out of date. Similar schools and local areas receive different levels of funding with little or no justification.

For example, secondary schools in Darlington receive an additional £40 for each pupil with low prior attainment—pupils who did not reach the expected standard at primary school—but secondary schools in Richmond upon Thames receive £3,229 for such pupils, which is a difference of more than £3,000. We do not only see such differences by comparing the two ends of the country; sometimes it can be a matter of a few miles down the road. For example, a 13-year-old pupil from a deprived background for whom English is an additional language would attract £5,150 to their school if they lived in Redcar and Cleveland; next door in Stockton-on-Tees, that same pupil would attract £8,242 to their school, which is an addition of more than £3,000.

The huge differences in funding that similar areas receive to educate similar pupils are clearly not sustainable. Underfunded schools do not have access to the same opportunities to do the best for their children. It is harder for them to attract the best teachers and to afford the right support, which is why introducing fair funding was a key manifesto commitment for the Government. We need to introduce fair funding so that the same child with the same needs will attract the same funding, regardless of where they happen to live. That is the only way that parents can be sure that there is level playing field.

We launched the first stage of the consultation on reforming the schools and high needs funding systems in March 2016. That consultation set out our principles of reform and our proposals for the design of the schools and high needs funding system. I am grateful to the more than 6,000 teachers, headteachers, governors, local authority representatives and others who took the time to respond to that consultation, and I am pleased that our proposals received wide support.

In the light of that, we are now consulting on the detailed proposals for the design of the schools and high needs funding formula. We have also published illustrative allocations data, so that every school and local authority can see the impact of the proposals. The second stage of the consultation will run until 22 March, and we are keen to hear from as many schools, governors, local authorities and parents as possible. I welcome this debate as a valuable addition to that consultation.

Our proposed formula would result in more than 10,000 schools throughout the country—54% of all schools— gaining funding, with a quarter of all schools gaining more than 5.5%. Those that are due to see gains will see them quickly, with increases of up to 3% in per-pupil funding in 2018-19, and up to a further 2.5% in 2019. Our formula will target money towards pupils who face entrenched barriers to their success, particularly those who are deprived and those who live in areas of deprivation but who are not necessarily eligible for free school meals—those whose families are just about managing. We are putting more money towards supporting pupils who have fallen behind their peers, in both primary and secondary school, to ensure that they get the support that they need to catch up.

Our proposed national funding formula will see gains for schools right across the north. In the north-east, schools will see an average 1% increase, while schools in Yorkshire and the Humber will see a 1.5% average increase. I acknowledge that the outcome will be more mixed in the north-west, but schools there will also be small gainers on average under our proposals. I recognise that our proposals would result in budget reductions for schools in the constituency of the hon. Member for Southport, but I nevertheless believe that our proposed formula strikes the correct balance between the core schools budget, which every pupil attracts, and the extra funding needed to target those with additional needs.

[John Pugh]

I probably made my point quite imperfectly. Can the Minister assure me that if a secondary school—those are the worst-affected schools in this respect—is in an area in which primary schools have made good progress, and the children who are handed on to them are therefore attaining the expected level and do not enter the secondary school with poor prior attainment, that secondary school will not lose out simply because it has good feeder schools? That scenario would discourage the kind of collaboration between secondary schools and feeder primary schools that the Minister wants to see, because it would almost be in the vested interest of the secondary schools to have incompetent feeder primary schools—from a financial point of view, if not an academic one.

[Mr Gibb]

I do not accept that argument. It is important to ensure that schools—primary or secondary—are well funded for pupils who start school academically behind their peers. I do not believe that any professional I have ever met would deliberately not collaborate with another school to improve pupils’ attainment simply to attract an element of the funding formula. Of course, the biggest element of it depends on deprivation, whether measured by receipt of free school meals or by children in one of the lower IDACI—income deprivation affecting children index—bands. That is important to ensure that children from those areas are properly supported.

The hon. Gentleman managed to mention Manchester, Kirklees, Liverpool and Sefton. However, he forgot to mention areas that will receive an increase in funding under the proposed funding formula, including 1.7% in Durham and Gateshead; more than 2% in Newcastle; nearly 3% in south Tyneside; nearly 2% in Sunderland; 3.4% in Blackpool; 4.3% in Bury; 4.9% in Knowsley; and 4.3% in Leeds. Schools in northern urban areas will continue to be highly funded; even areas that will see a small reduction under the proposed national funding formula will still be some of the highest-funded in the country, including Manchester and Liverpool, which the hon. Gentleman mentioned. That is right, as those areas have higher levels of socioeconomic deprivation and children with additional needs. Matching funding to need will see schools in those areas funded higher than those elsewhere in the country. A secondary school pupil with significant additional needs could attract more than £10,000 to their school through the proposed national funding formula and the pupil premium.

While introducing these significant reforms to the funding system, we are also delivering stability. We have listened to those who have highlighted the risks of major budget changes.

Motion lapsed (Standing Order No. 10(6)).