Schools: Funding

Lord Nash Excerpts

Tuesday 22nd March 2016 Lords Chamber

[Lord Borwick (Con)]

My Lords, on behalf of my noble friend Lady Eaton, and with her permission, I beg leave to ask the Question standing in her name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, the current schools funding system is not fit for purpose. A secondary pupil with low prior attainment would attract over £2,200 of additional funding in Birmingham, compared with £36 in Darlington. The Government are committed to addressing this unfairness by introducing a national funding formula from 2017, based on pupils’ needs rather than purely historic calculations. Fairer funding will mean that every pupil, whatever their background and wherever they live, can achieve to the best of their potential.

[Lord Borwick]

My Lords, how many different local authority funding regimes are there at present? How many basic funding streams will be present after this change? May I also take this opportunity to wish my noble friend a happy birthday today?

[Lord Nash]

I am grateful to my noble friend for his good wishes. As local authorities are currently responsible for setting their own funding formula for schools, there are 152 varying local funding formulae. We are currently consulting on our proposals to introduce one single national formula for schools. From 2019, funding will be allocated directly to schools on the basis of that formula. This means that, for example, a secondary school pupil with lower prior attainment will attract the same amount of additional funding wherever they are in the country.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, does the Minister accept that deprivation and need must be part of fairness?

[Lord Nash]

I agree entirely with the noble Baroness. That will be very much behind our reforms.

[Baroness Howarth of Breckland (CB)]

My Lords, does the Minister also share my concern about services for under-fives, which I know he has come across, where specialist services are funded by local authorities at their whim? I hope that when he is reviewing the schools programme he will also look at under-five services and ensure that they get an equal proportion of funding.

[Lord Nash]

I assure the noble Baroness that we will look at that.

[Baroness Pinnock (LD)]

My Lords, will the Minister share his initial thoughts on the weighting for each of the fair funding criteria, which are outlined in the government consultation, so we can understand his definition of “fair”?

[Lord Nash]

As I think the noble Baroness knows, the consultation is in two parts. The first looks at the principles of the policy and the building blocks. We will set out the detailed design in the second part.

[Lord Watson of Invergowrie (Lab)]

My Lords, without suggesting that the current funding formula is beyond improvement, the proposed national formula is another example of the Government’s centralist mindset. It is not the latest because, since this was announced, we have also had the White Paper on academisation. However, the national funding formula proposes to remove from head teachers the ability to have any say in the distribution of funding within their local area. Why does the Minister believe that civil servants are better placed, and know more, than head teachers about the funding needs of each area of the country?

[Lord Nash]

The simple fact is that we inherited a funding formula from the Labour Government which was incomprehensible and confusing and which, through centralist diktats, got more and more complicated. We have to simplify it.

[Lord Lansley (Con)]

My Lords, the Government’s announcement of a national funding formula, and its implementation in my own county of Cambridgeshire, is extremely welcome. Following the Chancellor of the Exchequer’s announcement in the Budget last week of an additional £500 million to support the introduction of the national funding formula, can my noble friend give an indication of how quickly the transition from the present situation to meeting the target allocations in each part of the country will be achieved?

[Lord Nash]

We will introduce the national funding formula for schools in high need from 2017-18 but the length of time it will take for all schools to reach their formula will be considered in the second stage of the consultation. We want areas that appear to be underfunded—I am aware that that is the case in Cambridge—to have their funding improved as quickly as possible, but also to move at a pace that is manageable for all schools.

[Lord Kinnock (Lab)]

My Lords, what contribution to fair funding will be made by forcing all schools to become academies, whether they want to or not, and getting rid of parent governors?

[Lord Nash]

The answer to the first point is that the contribution will be massive efficiency savings as schools collaborating in groups will be able to hire much higher calibre financial people and make purchasing savings. We are not getting rid of parent governors; we are merely saying that governors do not have to be parents. Schools can have as many parent governors as they need. We will also ensure that schools engage with parents on a much more consistent and effective basis than having the odd parent governor if they want it.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend confirm that the historic underfunding of counties such as North Yorkshire will be rectified by having regard to rural depravity, isolation and rurality factors?

[Lord Nash]

We are intent on rectifying these issues, but I think that the noble Baroness will have to wait for more detail in the second stage of the consultation.

[Lord Harris of Haringey (Lab)]

My Lords, need and deprivation—I think that that is what the noble Baroness meant—are going to be at the core of the new system. Will the Minister give us an assurance now that in, say, four years’ time, when we look back at how this new formula has been applied, it will not simply have benefited Conservative-controlled areas?

[Lord Nash]

I can give the noble Lord that assurance. It is quite clear that the formula will benefit many areas that are Labour controlled, and it is being driven entirely on the basis that we have a level playing field for all pupils so that we can deliver educational excellence everywhere.

[Baroness Hussein-Ece (LD)]

My Lords, does the Minister think that the very high salaries paid in some instances to the heads of academy chains—some are reportedly paid three times as much as the Prime Minister—is a good use of public funds?

[Lord Nash]

We set out in great detail in the White Paper our thinking behind multi-academy trusts. Where schools are delivering educational excellence people deserve to be rewarded accordingly.

[Lord Cormack (Con)]

My Lords, from the dubious areas of Yorkshire to the elevated areas of Lincolnshire, surely all schools can benefit from having parent governors. Can my noble friend be a little more encouraging than he was in his answer on that subject?

[Lord Nash]

I entirely agree with my noble friend that all schools can benefit from that, but we are trying very hard to focus governance on skills, so that people must have the relevant skills. But they may represent all sorts of different groups, and parent governors have a great deal to contribute.