Oral Answers to Questions

Vince Cable Excerpts

Monday 24th June 2019 Commons Chamber

[Anne Milton]

We are determined to make the apprenticeship system work for small and medium-sized enterprises, and smaller businesses get 95% of their training costs paid. We will move smaller businesses on to the apprenticeship system: we want to do that well and smoothly to make sure that we make it work for them.

[Sir Vince Cable (Twickenham) (LD)]

Can the Minister explain why very good companies with generous apprenticeships and training schemes are making a net contribution to the Treasury through the levy scheme rather than being rewarded through tax relief or in other ways?

[Anne Milton]

Those decisions were made some time ago. They have enabled us to make sure that by 2020 spending on apprenticeships will have more than doubled since 2010.

Special Educational Needs and Disabilities Funding

Vince Cable Excerpts

Tuesday 12th February 2019 Westminster Hall

[Sir Gary Streeter (in the Chair)]

Before I call Sir Vince Cable to move the motion for this important debate on special educational needs and disabilities funding, I can report that 12 colleagues have put in to speak from the Back Benches. Therefore, after Sir Vince’s speech, there will be a voluntary time limit of three and a half minutes. Please try to contain yourselves a little in interventions; otherwise, we will go well over time.

[Sir Vince Cable (Twickenham) (LD)]

I beg to move,

That this House has considered special educational needs and disabilities funding.

It is a privilege to speak on this subject, which is of immense concern to a large number of us and to our constituents, and that is reflected in the demand to speak. It is rare that we get a Brexit-free zone in Parliament at the moment, but this is one, and it is right that we pay attention to it. Far too many Government problems have been squeezed out by the attention given to a single issue, but how we treat children with special educational needs will have enormous implications for decades to come.

Essentially, I will speak about the conflict between two sets of pressures: an irresistible force and an immovable object. The irresistible force is, of course, the demand of parents of children with special needs, who have been led to believe, by the very progressive Children and Families Act 2014, that their children’s needs will be met and their full potential realised through education, health and care plans. The immovable object is money, manifesting itself now in a serious financial crisis for local authorities, which are expected to meet statutory obligations, but find that demand is rising and becoming much larger than the funding available through the special needs block. In some cases, those local authorities are in extreme difficulty.

I will introduce the debate by quoting a parents’ group called Richmond SEND Crisis, which wrote to me yesterday, describing the problem from the parents’ point of view. The group said:

“The crisis in funding has consequences. It means more stress and mental health issues for both parents and children, parents being forced to give up work, increased levels of family break up, increased levels of children being disruptive in school, failing in school or not being in school at all. It means that schools and the wider school community suffer, as children without proper support tend to absorb a disproportionate amount of time from school staff and may be disruptive in class.

All of these consequences inevitably hit the most vulnerable… families the hardest.”

[Dr David Drew (Stroud) (Lab/Co-op)]

Does the right hon. Gentleman agree that one significant change is the growth in home-school education? Given the amount of time it takes to get an assessment, parents are now just taking their children out of school. That cannot be a good thing.

[Sir Vince Cable]

Indeed. That is happening on a growing scale, and is augmented by the fact that many children are being excluded because of the lack of support. That, in turn, contributes to home education, which may be inferior.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Does my right hon. Friend agree that the crisis in funding is about not only the overall sum of money but the distribution? Government policy means that schools have to absorb up to £11,000 of the cost of meeting an EHCP. Schools that do the right thing and accept children with special educational needs are therefore punished, and those that do not are rewarded. Does he agree that that is an unfair and wrong distribution?

[Sir Vince Cable]

Indeed. In addition to the problem facing local authorities, schools in effect pay a £6,000 penalty. Many schools that were committed to inclusion now find that increasingly difficult and are shying away from their obligations.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the right hon. Gentleman on securing the debate. I fully agree with him about funding for special needs schools. Hereward College in Coventry has struggled with funding for a number of years, and does an excellent job. Another dimension is that children who have mental health problems often go home to a disruptive family life. That is not conducive to their education or mental health. Does the right hon. Gentleman agree that something should be done about that?

[Sir Vince Cable]

Yes, I do. By mentioning mental health, the hon. Gentleman reinforces the point that I will go on to make. When we talk about special needs pupils, we are talking about significantly different classes of people with fundamentally different problems. Of course, they are all individuals, but we are talking about 1.2 million people altogether in the SEN system—up by about 0.5 million since 2014. About a quarter of them, according to Mencap, have learning difficulties. That actually understates the problem, because Mencap estimates that about 40% of children with learning difficulties are never identified at school.

About 120,000 children are on the autistic spectrum, which is the most rapidly growing and difficult group to accommodate. About 300,000 have attention deficit hyperactivity disorder. Others have a physical disability. I have had correspondence with those with visual impairment problems, who lack equipment, and other groups such as deaf children, who are not included in the SEN categories at all.

We are dealing with large numbers of very different categories of people, but what they have in common is that demand for EHCPs is growing rapidly: it has grown by about 35% over the four years since the legislation was enacted, which is about three times the growth of the school population. It is also three times the amount of funding available through the Government grant allocation.

--- Later in debate ---

[Sir Gary Streeter (in the Chair)]

Order. I remind Members that interventions should be brief.

[Sir Vince Cable]

My hon. Friend is right; that is one of many anomalies. Many such issues were not properly accounted for and are not being fully funded. I will come to others in a moment.

The consequence of the growing demand is that many local authorities, which are genuinely trying to do their best in most cases, are accumulating large financial deficits. The Local Government Association, which has done lots of research on it, believes that there will be a gap of about £1.6 billion at the end of the next financial year. That is unaccounted for at present.

Some London authorities—I speak as a London MP, but I know that other parts of the country have similar problems—have a shortfall from the high needs block of about 7%. For about six boroughs in London, it is more than 10%. For my borough, Richmond, it is 20%, and I think three others are in an even worse position, including the borough of my right hon. Friend the Member for Kingston and Surbiton (Sir Edward Davey). For his borough, I think it is 40%.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

My right hon. Friend is right that the situation for Kingston is the worst of any London borough. We are spending more than 40% above our allocation, with a potential knock-on to the budgets of schools across the board, and potentially even the solvency of the local authority. Given how serious that is, does he agree that Ministers need to take action now and that we need to talk to the Department of Health and Social Care? The health service is often not paying for the health part of EHCPs.

[Sir Vince Cable]

My right hon. Friend is absolutely right: those are both key parts of the solution. For example, I have discovered that there are children whose need for wheelchairs—clearly a health requirement—is treated as an educational need. There are many such cases in which the finance sits in silos and is not sensibly dealt with.

[Layla Moran (Oxford West and Abingdon) (LD)]

My right hon. Friend is being very generous with his time, and I congratulate him on securing this debate. My constituent Sally Foulsham, who runs a parent group called SHIFT, is in contact with more than 100 parents. She reports that what most frustrates them is the lack of funding for child and adolescent mental health services, which is a major block to unlocking the funding that should be available for EHCPs in the first place. Does my right hon. Friend agree?

[Sir Vince Cable]

Yes. The decline in CAMHS has led to a lot of children not being properly helped at an early stage and requiring greater special needs provision as a result.

To conclude my point about finance, a large number of local authorities are in serious financial trouble, and not just in London—even those that are doing their best and are perfectly competent. Consequently, they have a large financial deficit sitting on their balance sheet. One of their main sources of anxiety is what will happen with respect to Government legislation that treats them as requiring special measures if they do not sort out the problem. At the moment, they are not sure whether to deal with the problem immediately. Perhaps the Minister could advise us what conversations her colleagues in the Ministry of Housing, Communities and Local Government have had about how to deal with the problem.

[Mike Hill (Hartlepool) (Lab)]

The right hon. Gentleman is making a powerful speech. My council, Hartlepool Borough Council, will have a shortfall of £621,000 in its high needs block funding for 2019-2020. Does he agree that our children and schools need a dedicated schools grant that is sustained and reflects local need?

[Sir Vince Cable]

I am sure that that would be sensible. The hon. Gentleman represents Hartlepool—a very different kind of community from mine in Twickenham—but his helpful intervention illustrates that the problem is felt across the board.

Why has the problem arisen? Why is there such rapid growth in demand, and why is it not being met? There are good reasons and bad reasons. One of the good reasons is that the 2014 Act extended entitlement to special educational needs provision from 18 up to 25. That was a progressive step, but nobody thought about how it would be paid for. Another big biological change is that perinatal and natal mortality has been reduced; that has been a great step in medicine, but it means that there are now many more children who are much loved by their parents but who do need extra help. We are also getting more successful early intervention and diagnosis, meaning that children with special needs are being identified but then have to be helped.

Those are the good reasons. One of the bad reasons is the decline in CAMHS that my hon. Friend the Member for Oxford West and Abingdon (Layla Moran) referred to. Another is the pressure on schools, partly as a result of the minimum £6,000 requirement, and partly because they are having to dispense with teaching assistants—in my area, certainly, cuts are reducing schools’ capacity to handle children with behavioural problems. There is also a rapid rise in exclusions. All those things are bringing pressure to bear on the system.

[Ruth George (High Peak) (Lab)]

I have just received figures from my local authority, Derbyshire County Council, that show that children who have special needs but no statement or EHCP are five times as likely to be excluded as children without special needs, whereas those who have a statement or plan are more than 12 times as likely to be excluded. Does the right hon. Gentleman agree that that is a shocking indictment of what we are delivering for children with special needs?

[Sir Vince Cable]

It is a shocking indictment, but it brings to the surface the dilemmas that many local authorities face when they are forced into a position of rationing. They are not allowed to describe it as rationing, because they would be admitting to a legal offence that could be held against them in a tribunal, but we all know that rationing takes place.

Rationing happens in several forms. One, which relates to the hon. Lady’s intervention, is that local authorities drag their feet with what were once called statements but are now called healthcare plans. I believe that the National Autistic Society says that 50% of parents with autistic children wait more than a year for those plans to appear. In other cases, provision is cut to well below the necessary standard: the Young Vision Alliance draws attention to the fact that one of the casualties of the recent rationing has been the issuing of aids to children with visual impairments, which is becoming a serious problem.

Another device that authorities resort to, although of course they do not present it as such, is refusing residential places. In most cases, inclusion in mainstream schools is much the best course of action, but in other cases residential schools are more appropriate. Yet, authorities refuse to agree to them, so the parents have to become carers while the children sit at home, become socially isolated and are never able to develop properly into adulthood.

The main consequence of the conflict between supply and demand is that more and more parents are having to go to tribunal. There has been a 20% growth in tribunals in each of the past few years, and 86% of parents win them, although perhaps “win” is not the right word—in some ways it is a lose-lose situation. Nevertheless, that is an extraordinary figure. It indicates that many local authorities are pushing parents to tribunal, knowing that they themselves will lose, incurring significant costs—about £34 million a year, I believe—simply as a way of holding off demand that they are legally required to meet.

My concluding section is about solutions. How do we deal with this? First, there is a broad acceptance that children should be kept, as far as possible, in mainstream and maintained schools rather than in more demanding provision elsewhere. That is true for educational reasons—inclusion is a good philosophy and has good results—but it is also more economical. The figures are striking: in mainstream and maintained schools, the cost is about £6,000 more for SEND pupils than for non-SEND pupils, while for maintained special schools the cost is about £23,000 more, and for private special schools it is about £40,000 more. In many cases, the private special schools perform a very important function and are of very high quality, which is clearly why people seek them out, but there is certainly some evidence that those schools are exploiting monopoly provision and taking advantage of local authorities. In some cases, they should be referred to the Competition and Markets Authority.

Notwithstanding that issue, the differential suggests an enormous demand for specialist provision that the maintained sector should cater for, but the trend is in the opposite direction. Last year, for the first time, the majority of special needs pupils were not catered for in mainstream maintained schools—a big backward step that reflects the pressures that I have described.

The second clearly undesirable mechanism being used is shifting the burden to other schools, which unfortunately is happening in my own borough. The council is deeply regretful, but it has had to ask the Department for permission to raid the schools budget because the special needs block is grossly insufficient. That is bad not just in itself, because schools are under financial pressure, but because it sets mainstream pupils against special needs pupils. It is quite wicked, actually—it creates resentment in an area in which we should be united in compassion.

[Layla Moran]

Is my right hon. Friend aware that the practice is now ubiquitous throughout the country? In Oxfordshire, we have a bizarre situation in which the heads board has refused the extra transfer of money, yet the council is now going to the Secretary of State to override what the heads of local schools believe is the right thing for everyone else. There is an inherent tension around where the money will come from. In the end, it should just be more money.

[Sir Vince Cable]

Indeed. My hon. Friend graphically highlights the dilemma that I am describing: people acting with very good intentions are now being forced into conflict, in a very damaging way.

That point brings me to the crux of the problem: the Government’s role via the high needs budget. I acknowledge that the Government have taken some action—I do not want to be completely grudging. There was an increase of £250 million in the 2018-19 and 2019-20 budgets, part of the special provision announced last year, and that is welcome. However, the LGA has run its ruler over that and has computed that it accounts for about a quarter of the deficit. It is a small step forward. A much bigger step is required.

The second thing the Government can do within existing budget constraints was raised by my right hon. Friend the Member for Kingston and Surbiton. Some money should be diverted to special needs school provision from within the large increase in cash that is being made available to the health service.

We cannot avoid the conclusion that, in the spending review ahead, the Government are simply going to have to review the weight they give to special needs provision as opposed to the normal school funding block, and to be substantially more generous in respect of special needs provision. They have announced that we have come to the end of austerity. Some of us are a bit sceptical, but this is one area where they can prove it.

[Several hon. Members rose—]

--- Later in debate ---

[Sir Vince Cable]

I thank the 13 Members who have contributed to the debate, which was very rich in content. They all pointed in pretty much the same direction, regardless of region of the UK or political party. We heard plenty of examples of the extreme tensions that parents face because of the pressures of special needs, and how so many of them have been disappointed.

I was struck by the example that the hon. Member for High Peak (Ruth George) cited of children being kept waiting and falling two years behind in their learning before they are even assessed. There are many similar cruelties and disadvantages of that kind. We also heard many examples of the pressures on schools. The Minister acknowledged the point raised by several hon. Members about the £6,000 hurdle—the perverse incentive—and although I did not hear in her speech whether she was going to change that, she at least acknowledged the problem and recognised that much of it is hidden by home schooling, which is growing rapidly.

Several Members from different parties mentioned how their councils—of different kinds—are being put into serious financial difficulties as a result of the problem. Worst of all, councils, schools and parents are reduced to fighting and blaming each other for what is actually a collective problem. The aim of the 2014 Act was to deal with all this in a consensual way, and to focus on the needs of pupils, but the issue has become a cockpit of conflict—manifested in the tribunals system—which is growing rapidly and becoming increasingly costly, both emotionally and financially.

To conclude, I wish to acknowledge some of the constructive thoughts in the debate. The hon. Member for Bexhill and Battle (Huw Merriman) talked about creating an intermediate triage system for picking needs up early before the formal assessment process is completed. The hon. Member for High Peak and others suggested that we could focus on getting more information to parents about their entitlements, to avoid their missing out or finding out too late in the day, and on changing Ofsted’s terms of reference, so that it incentivises rather than penalises inclusion, as is very often implicitly the case in its rating system. We also heard suggestions from my hon. Friend the Member for Kingston and Surbiton (Sir Edward Davey) and others about how the funding formula should be changed and how we could make more use of flexibility between health and education.

All that ultimately comes back to—I know that the Minster is painfully conscious of this—more money and the spending review. I know just how fraught that process is because I have been the head of a spending Department, but I can do no more than wish the Minister well and say on behalf of us all that we basically want a significant enhancement of special needs provision—alongside schools, not at their expense.

Finally, I will quote what I thought was one of the more memorable phrases. The hon. Member for Gedling (Vernon Coaker) said that parents just want to stop fighting and get on with being parents. I thought that was a very good way of summarising what we are all trying to say.

[Sir Gary Streeter (in the Chair)]

May I break a few rules by saying from the Chair that I strongly support the broad thrust of the debate? I very much hope that our Government will sort this out in the next 12 months. [Hon. Members: “Hear, hear.”] That is the end of me chairing.

Question put and agreed to.

Resolved,

That this House has considered special educational needs and disabilities funding.

Oral Answers to Questions

Vince Cable Excerpts

Monday 17th December 2018 Commons Chamber

[Mr Speaker]

I gently exhort the Minister of State to face the House so that we can all benefit from his mellifluous tones.

[Sir Vince Cable (Twickenham) (LD)]

The level of educational funding will be radically affected by the new treatment of public sector pensions. Can the Minister confirm that it is the Government’s policy to cover the majority of costs for schools and colleges, but not for universities, and explain the different treatment?

[Nick Gibb]

Yes, I can confirm that.

Oral Answers to Questions

Vince Cable Excerpts

Monday 12th November 2018 Commons Chamber

[Anne Milton]

I had a wonderful visit to Kirklees College and I was impressed with all I saw there. It is important that young people have a grounding in English and maths. I know this is difficult for some young people, and we are doing a great deal to improve the teaching of maths. Where people have failed after all those years in school, we cannot just go on doing the same thing. We have the opportunity to offer functional skills, which offers those young people an alternative way of getting a good qualification in maths.

[Sir Vince Cable (Twickenham) (LD)]

A very successful Queen’s award-winning company in my constituency provides examinations and training standards throughout the world in contemporary music, but it cannot provide these apprenticeship standards in the UK because of the Government’s rigidity in not allowing them or providing them in industries with a lot of freelance workers. Can the Minister address that problem?

[Anne Milton]

Yes, I can. The right hon. Gentleman perhaps ought to know that I have continued contact with my fellow Ministers in the Department for Digital, Culture, Media and Sport, because this issue is important. We are not being rigid. There are ways around this, and I had a recent meeting to discuss exactly this point. It is important for the industry to get together and talk to the Institute for Apprenticeships, because there are ways around this.

Oral Answers to Questions

Vince Cable Excerpts

Monday 25th June 2018 Commons Chamber

[Damian Hinds]

My hon. Friend raises a very important point about the construction sector, and of course we have considerable requirements because of the need to accelerate residential development. One of the first T-levels will be in construction, and we are working closely with the sector to bring that on.

[Sir Vince Cable (Twickenham) (LD)]

Is the Secretary of State aware of the concern in the creative industries about the contraction in the number of pupils in maintained schools studying performing arts, and how does he intend to address that problem?

[Damian Hinds]

The right hon. Gentleman is correct about the importance of the performing arts. In fact, the number of children taking a GCSE in arts subjects has not really moved very much, but we very much believe in a broad and balanced curriculum, with the breadth of opportunities he would want.

Oral Answers to Questions

Vince Cable Excerpts

Monday 11th December 2017 Commons Chamber

[Justine Greening]

As the hon. Gentleman will know, we are putting more money into making sure that post-16 education is consistently gold standard, regardless of whether young people follow academic or technical education routes. I am sure he will have welcomed the announcement in the Budget a couple of weeks ago, of extra premiums for maths students.

[Sir Vince Cable (Twickenham) (LD)]

Since the Secretary of State was the only member of the Cabinet to get a pass mark from the Social Mobility Commission, will she now cement her reputation by intervening to stop the catastrophic decline in apprenticeship starts?

[Justine Greening]

I will set out a social mobility action plan later this week. On the right hon. Gentleman’s claims about apprenticeships, starts remain on track to reach 3 million by 2020. There have already been 1.1 million since May 2015. Rather than talking them down, it would be better if he talked our education system up.

Social Mobility Commission

Vince Cable Excerpts

Monday 4th December 2017 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

(Urgent Question): To ask the Minister for Children and Families if he will make a statement on the resignation of the board of the Social Mobility Commission.

[The Minister for Children and Families (Mr Robert Goodwill)]

Thank you, Mr Speaker, for allowing me to take this urgent question, which gives us an opportunity to underline our commitment to improving social mobility in our country.

I am extremely grateful to Alan Milburn for his work as chair of the Social Mobility Commission over the past five years. We had already told him that we planned to appoint a new chair. We will hold an open application process for that role to ensure that we continue to build on this important work and that the foundation laid by Alan and his team can be built on.

Tackling social mobility is the Department’s priority. We are driving opportunity through the whole education system. We have made real progress in recent years. The attainment gap between disadvantaged children at the end of reception has narrowed, and the proportion of eligible disadvantaged two-year-olds benefiting from funded childcare has risen from 58% in 2015 to 71% in 2017. We are putting more money into the early years than ever before, spending a record £6 billion a year on childcare and early education support by 2019-20. We are also increasing the number of good school places, with 1.9 million more children in good or outstanding schools than in 2010. There are over 15,500 more teachers in state-funded schools in England than in 2010. The £140 million strategic school improvement fund will target resources to support school performance and pupil attainment at the schools that need it most.

The attainment gap, as highlighted by the commission, between disadvantaged pupils and their peers has narrowed since we introduced the pupil premium—now worth around £2.5 billion a year—in 2011. That is a coalition policy that we continue to embrace.

We know that there is more to do and we are focusing on areas of the country with the greatest challenges and the fewest opportunities, including £72 million in the 12 opportunity areas. Plans for the first six areas were published on 9 October 2017 and we will publish plans for the second six areas early in November.

The outgoing chair of the Social Mobility Commission welcomed the launch of the opportunity area programme and the Government’s commitment to addressing disadvantage, which remains a priority for the Government.

--- Later in debate ---

[Sir Vince Cable]

I do not think that the Conservatives have ever claimed to be a party of equality, but they have always claimed to be a party of equality of opportunity—in other words, social mobility. When the Prime Minister took office, her first speech set out very clearly the objective to do everything to help everybody, whatever their background, to go as far as their talents will take them. What does the resignation of the commission tell us about the Government’s success in achieving that objective? The chairman of the commission was very pointed. He said that the worst possible position in politics

“is to set out a proposition that you’re going to heal social divisions and then do nothing about it.”

It would be very difficult to spin the resignation of the commission in partisan terms, because Alan Milburn has conscientiously served Labour, coalition and Conservative Governments. Among the commissioners who have resigned with him, one was a highly respected former Conservative Secretary of State for Education.

I have a specific question for the Minister about the most recent of the commission’s reports, to which he will no doubt be able to respond. Why have only five of the 65 social mobility coldspots—the areas with the least social mobility, everywhere from west Somerset to east midlands cities—been covered by the various growth deals negotiated by the Government? The report makes the point that geographical division in Britain is now more extreme than in any other country in Europe, so will the Government consider reinstating the regional growth fund, which played an important role in addressing that problem during the coalition? As the barriers to social mobility often rest in incentives to work, will the Minister explain how the £3 billion cut to the work allowance will affect people’s willingness to work once they are in low-income employment?

The commission is even-handed and praises the Secretary of State for Education for her commitment. But what does it say about the Government’s commitment when the most committed and conscientious member of the Cabinet is presiding over a 60% cut in apprenticeships, which blocks social mobility through vocational education, and a 6% cut real cut in schools spending over the next five years?

Does the Minister agree with the chair of the commission’s point that Brexit is now sucking the life out of Government, and that the biggest casualties of Brexit—particularly the extreme Brexit of withdrawing from the single market and the customs union—will be the 60 of the 65 social mobility coldspots that voted for Brexit?

[Mr Goodwill]

I do not recognise the right hon. Gentleman’s characterisation that we have done nothing to address social mobility. Disadvantaged children are 43% more likely to go to university than in 2009. Our two-year-olds childcare offer has a 71% take-up compared with 58% in 2015. Some 1.9 million more children go to outstanding schools than in 2010, and there are more teachers in schools than ever before. We have made progress in a number of areas, including our offer of 30 hours of free childcare, which helps working families to cope with the cost of childcare while they juggle childcare and work at the same time.

I reaffirm the fact that social mobility remains a priority of the Government. I am fully committed to that, as are the Secretary of State and the Prime Minister. The right hon. Gentleman mentioned geographical spread. If he reads the report, he will see that the spread is patchy, with parts of London demonstrating a real need for more assistance, and more needing to be done in places such as the east and west midlands. That is precisely why we have designated the 12 opportunity areas in the places where we most need to address the situation for children in the early years, with regard to education, the aspiration to get into employment and get good qualifications and the most difficult nut to crack—the home learning environment. Many young children are starting nursery provision without the basic skills that many other children from better-off backgrounds have.

I want to make it clear that, although Brexit is an important priority for this Government, we can walk and chew gum at the same time. We are absolutely committed to ensuring that we continue the process of improving social mobility for everyone in the country.

Oral Answers to Questions

Vince Cable Excerpts

Monday 11th September 2017 Commons Chamber

[Joseph Johnson]

It is a welcoming place, as attested to by the fact that this year, for the sixth year in a row, we have 170,000 international students coming into our system, which is a record number. We want that to continue. The work of the British Council contributes to that, as does the work of the GREAT campaign. I will be in India in November drumming up business for our universities, and I expect that other Ministers will do so too.

[Sir Vince Cable (Twickenham) (LD)]

What action is the Minister taking in respect of overseas students on vocational courses who need to do work experience, which is regarded as illegal working by the Home Office, leading to unnecessary and heartbreaking deportations?

[Joseph Johnson]

The right hon. Gentleman raises an important question. We must ensure that our offer for international students is competitive in all respects and that they feel they will get the kind of provision that suits their needs and opportunities to learn in a workplace environment. We will study his comments with interest.

School Funding Formula (London)

Vince Cable Excerpts

Wednesday 28th June 2017 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

Mr Speaker, may I express my appreciation for being able to speak from these Benches again, after a two-year lapse, and to take advantage of the real privilege we have of being able to raise in an Adjournment debate matters of acute concern to our constituents? I wish to raise the issue of school funding, which proved to be one of massive importance during the election campaign, not just to me and my constituents, but to many others.

Let me give some examples of the kind of problems that have surfaced. I have visited three primary schools in the past week, one of which has already had to seek a parental contribution of £120 a head from each parent in order to balance its budget. Another had to put a proposition to the parents to go on to part-time schooling for one day a week, but that has subsequently been withdrawn in favour of a parental contribution and redundancies. This pattern is now being repeated throughout my borough and many others.

[Tom Brake (Carshalton and Wallington) (LD)]

I can confirm that we face exactly the same issues in the London Borough of Sutton, and I believe that every secondary head has written to me expressing concerns, for instance, about requiring schools to cut back on the A-level options that are available. Does my right hon. Friend hope, as I do, that the Minister for School Standards will respond positively and set out how London can benefit from the bonanza that was available to the Democratic Unionist party in the past couple of weeks, so that we can see the right level of funding in our schools as well?

[Sir Vince Cable]

My right hon. Friend anticipates a point I was going to make, but he is absolutely right to say that this problem is widely shared. Several elements have contributed to this anxiety in the schools sector, one of which is that we have had flat or falling funding in nominal terms per pupil, certainly over the past couple of years—it is a small fall but it is significant. Much more seriously, there has been a very big increase in costs. Costs that were previously borne by central Government are now being offloaded on to individual schools. Some of them are obvious ones, such as national insurance contributions, which have added a couple of percentage points to the payroll—that is 80% of the cost of a typical school. The increase in pension contributions is another.

One particularly bizarre item causing considerable puzzlement in schools is the apprenticeship levy. I can perhaps claim some authorship of the original ideas behind the levy, from the coalition years, but none of us ever intended that it would apply to schools. The training of teachers, and indeed other professionals, does not go through an apprenticeship route. It appears that this is being introduced because people in maintained schools are regarded as council employees, and of course the whole direction of Government funding is to move in the opposite direction. In addition, there is a completely bizarre distinction between academies and non-academies. I wonder whether the Minister, in discussions with his colleagues, can lift what is not a massive but an extremely irritating and, at the margin, onerous burden on schools. It is something that would help significantly, and the burden is clearly inappropriate.

The consequence of these changes, together with the new funding formula that the Government have mooted, is very significant indeed. The National Audit Office has estimated that, between 2014-15 and 2019-20, which is when the funding formula comes in, there will have been an 8% real cut overall in English schools. The Education Policy Institute, which has done a parallel study and is broadly in favour of the principle of the funding formula, notes that the cut is something in the order of 6% to 11% in the narrower period of 2016-17 to 2019-20, with more than half of primary and secondary schools facing cuts of that magnitude.

Let me take the discussion very specifically to the funding formula, which is how I couched this debate. I have no objection—I do not think that any of us possibly could have—to the principle of trying to achieve fairness in the allocation of funds. It is a perfectly desirable objective. Although there is never likely to be much of a consensus on this, striving to achieve better fairness in distribution is a perfectly acceptable philosophical principle. I am not coming here to make a particular whinge about my own Twickenham constituency and borough, because, as the figures net out, we are not significant losers. Indeed, on some calculations, there may be a small gain, but that is not the case in many parts of inner London, which will be hit very severely. None the less, there are some very serious problems with the funding formula as it is due to be applied, and I just wanted to raise them with the Minister in the hope that he can give us some confidence that they will be addressed.

My first concern is that, clearly, it is much easier to introduce a new funding formula when budgets overall are flat or rising than when they are falling. It is a simple matter of common sense. Some secondary schools in my constituency face 3% real cuts to meet the funding formula. If that were done at a time when their budget was flat and others were rising, one can see how they could accommodate it, but imposing on already very stressed financial budgets real cuts as a consequence of the formula is just making this deeply, deeply unattractive.

The informed estimate is that if the Government were to bring in the funding formula while ensuring that no school actually loses in absolute terms, it would probably cost them £335 million. That sounds a lot of money, but, as my right hon. Friend has pointed out, in relation to some of the other transactions of the past 48 hours it probably is not all that significant. Can the Minister clarify a commitment, which I think was made in his party’s manifesto, that the Government will ensure that no school is absolutely worse off as a result of the formula? That would certainly help to lubricate the whole process.

My second concern is different and has nothing to do with money. It is about the centralisation of decision-making that is a consequence of this new formula. At present, there is a significant degree of flexibility for local authorities in moving money within the funding blocks, particularly within the school block. That enables local authorities to take account of local circumstances. In my particular case, we have a significant number of problems in the secondary sector. This involves a significant number of outer borough pupils, the fact that we have a large number of pupils who go into the private sector at 11 or thereabouts, and more challenging demands on the secondary sector. There is an understanding locally that, effectively, there should be a cross subsidy from primary to secondary. That is the result of local circumstances, and people understand that and accept it. Under the funding formula, such local, particular concerns can no longer be taken into account. One of the practical consequences in my area is that the secondary schools, which have particular needs, will be very savagely hit, because the cuts will fall on them disproportionately. As I understand it, there will be very little capacity in the Department for Education or with regional commissioners to handle the kind of local negotiation that would be required to take account of such particularities. I ask the Minister to try to ensure that as we move to a new funding system, it does not become hopelessly over-centralised. There is a real danger that we have a Soviet style of financial allocation that takes no account of local circumstances.

My third concern is about special needs and disadvantaged pupils who fall within the special educational needs block. As the Minister knows, funding for that at a local level is a complete mess. Local authorities are not funded up to anywhere remotely near the level that is required to meet the special needs of statemented pupils. The new plan system, which was passed in the last Parliament, requires substantial funding, which is simply not available. Local schools are having to use out-of-borough private providers of special needs education, which is often very high cost. Indeed, one of the things the Government should think about is a Competition and Markets Authority referral for some of these institutions.

Whatever the reasons, local councils have run up very large deficits on their special needs budgets. They are having to use school block money in order to support it. Many schools are in great difficulty as a result of the financing of special needs, so much so that schools that were regarded as centres of excellence are now trying to deter people from coming because of the extra cost involved, and a pass-the-parcel system is developing with special needs, which is deeply unhealthy, and completely inimical to good schooling.

A fourth concern I have about the proposals as they currently stand is that all kinds of perverse incentives are built into the rather complex formula that the Department has evolved, one of which is that it penalises high achievement. I happen to represent a borough where 50% of schools are regarded as “outstanding” and the other 50% “good”. It is a very high achievement area. Parents have very high expectations: schools deliver. Under the formula, high achievement will be penalised, and the funding is being redirected to schools in which there is low achievement. One of the utterly perverse consequences is that schools in London, particularly in inner London—areas such as Hackney, Lewisham and Lambeth, which 20 or 30 years ago were regarded as dreadful sink schools—are now very high-achieving schools in terms of value added, and those schools will need significant amounts of funding.

[John Redwood (Wokingham) (Con)]

The right hon. Gentleman is making a very good point. Certainly in Wokingham, which has very low per-pupil amounts and good-performing schools, we feel there is a problem. Was not the idea of the reform to have a higher absolute amount for every pupil in the country, because there is a basic cost wherever you are being educated?

[Sir Vince Cable]

Yes, indeed. The right hon. Gentleman makes the important point that it is not just a question to read having a basic amount of funding, but an evidence base for what the cost of running a school actually is. I worry that as the formula is currently devised, there is no evidence base. Wild guesses have been made about the differential costs of secondary and primary schooling, and we need objective studies of what it costs to run a school, so that the formula can work well.

[Bob Blackman (Harrow East) (Con)]

rose—

[Sir Vince Cable]

I just want to round up and come to a conclusion, to give the Minister a plentiful opportunity to reply.

My final point is that in addition to all the difficulties I have mentioned, there is a high level of uncertainty about how the new formula will be applied. Some of our secondary schools, which will face deep cuts, are protected up to a point by the maximum 3% cut—the floor that has been introduced—but we do not know for how many years that will continue. If they take painful corrective measures now, will they have to continue to do so? There is uncertainty about how the growth of pupil numbers will be accommodated. I believe that a system of retrospective prompt rebating could easily be set up and would make the planning of school finances much easier.

To round off my comments, I think there is an acceptance on both sides of the House that funding distribution needs to be looked at in a fair framework. That cannot happen in the current environment of large-scale cuts across the board, and I sincerely hope that the Minister will look at some of the other points that I have made about the need for much more decentralisation and flexibility in decision making, which will make it much easier to carry the reform through.