School Funding: North-east of England

Debate between Alex Cunningham and Nick Gibb

Wednesday 26th April 2017 Westminster Hall

[Mr Gibb]

It is not convenient, actually.

School funding in the constituency of the hon. Member for City of Durham (Dr Blackman-Woods) will rise by £0.4 million—a 0.9% increase—as a direct consequence, again, of introducing the national funding formula. School funding is at its highest level on record, at almost £41 billion this year, and it is set to rise to £42 billion by 2019-20 as pupil numbers rise.

However, the current funding system is preventing us from getting that record sum of money to where it is needed most. Underfunded schools do not have access to the same opportunities to do the best for their children, and it is harder for them to attract the best teachers and afford the right support. That is why we are reforming the funding system by introducing a national funding formula for both mainstream schools and the high-needs support provided for children with special educational needs. It will be the biggest change to school and high-needs funding for well over a decade.

Such change is never easy, but it will mean that, for the first time, we have a clear, simple and transparent system that matches funding to children’s needs and the school they attend. In the current system, similar schools and local areas receive very different levels of funding with little or no justification. Those anomalies will be ended once we have a national funding formula in place, and that is why we are committed to introducing fair funding. Fair funding will mean that the same child with the same needs will attract the same funding regardless of where they happen to live.

We launched the first stage of our consultation on reform in March last year. We set out the principles for reform and proposals for the overall design of the system, and more than 6,000 people responded, with wide support for those principles. Last month we concluded the 14-week second stage consultation, covering the detailed proposals for the design of both the schools and high-needs formulae. Our proposals would target money towards those who face the greatest barriers to their education.

In particular, our proposals would boost the support provided for those who are from deprived backgrounds and those who live in areas of deprivation but who are not eligible for free school meals—those ordinary working families who are too often overlooked. We propose to put more money towards supporting those pupils who have fallen behind, in both primary and secondary school, to ensure that they have the support they need.

[Alex Cunningham]

Will the Minister give way?

[Mr Gibb]

I will not give way now, because of lack of time; I apologise.

Overall, 10,700 schools would gain funding under the new national funding formula, and the formula will allow those schools to see gains quickly, with increases of up to 3% in per-pupil funding in 2018-19 and 2.5% in 2019-20. Some 72 local authority areas are proposed to gain more high-needs funding, and they would also do so quickly, with increases of up to 3% in both 2018-19 and 2019-20.

We have listened to those who have highlighted the risks of major budget changes in our first-stage consultation, which is why we have introduced a floor of a 1.5% minimum funding guarantee per year, and no school can lose more than 3% overall per pupil as a consequence of these changes.

Schools in the north-east would, on average, see a 1% increase in funding as a result of our proposals, and 60% of schools in the region would see an increase in funding, compared with 54% nationally. Schools in the north-east are doing well: 68% of pupils in key stage 2 SATS reached the expected standard in reading in 2016, compared with 66% nationally, and 82% of children are passing the phonics test, compared with 81% nationally.

Of course, the picture would not be uniform across the whole of the north-east. I recognise that the proposals would result in budget reductions for schools in the local authority of the hon. Member for Washington and Sunderland West and no real overall change in funding to schools in her constituency. However, I believe that the formula we have proposed strikes the right balance between the various competing considerations for funding, such as the balance between the core funding that every child attracts and the extra funding targeted at each of the additional need factors. We propose to use a broad definition of “disadvantage” to target additional funding at schools most likely to use it, comprising pupil and area-level deprivation data.

I want to turn to the issue of costs. We recognise that schools are facing cost pressures, including salary increases, the introduction of the national living wage, increases to employers’ national insurance pension scheme contributions and general inflation. From the start of 2016-17 to the end of 2019-20, we have estimated that those pressures will amount to approximately 8% per pupil, on average. To be clear, that is not an 8% pressure in a single year, nor is it an 8% pressure that is all yet to come. In fact, some of those pressures have already materialised and been absorbed in the past financial year. Over the next three years, per-pupil pressures will, on average, be between 1.5% and 1.6% each year. The current, unfair funding system makes those pressures harder to manage, and introducing a national funding formula will direct funding where it is most needed.

We have published a wide range of tools and support to schools, available in one place on gov.uk. That includes tools to help schools to assess their level of efficiency and to find opportunities for savings; guidance on best practice, including on strategic financial planning and collaborative buying; case studies from schools themselves; and support for schools to acquire greater financial skills. We have launched a school buying strategy to support schools to save more than £1 billion a year by 2019-20 on their non-staff spend. That will help all schools to improve how they buy goods and services.

I am grateful for today’s opportunity to debate school funding. A fair national funding formula for schools and high needs underpins our ambition for social mobility and social justice, and it will mean that every pupil is supported to achieve to the best of their potential, wherever they are in the country.