Examination of Witnesses (Questions 20
TUESDAY 1 MAY 2001
BICHARD, KCB, MR
20. Was it an easy decision to decide to rule
out top-up fees, which clearly would have been one avenue for
universities to go out and compete globally? Certainly there was
a strong lobby within some of the universities to be able to do
(Sir Michael Bichard) It was not my decision. It was
the Government's decision, the Prime Minister's decision not to
go ahead with top-up fees. I did say at the time to Vice-Chancellors
and Chancellors that sometimes the debate around top-up fees was
fairly crude, but what we actually needed to do and still need
to do perhaps was to think a little bit more widely about our
objectives, our ambitions for HE in this country and then think
about funding as part of that rather than only talking about one
particular method of funding universities in the future.
21. You have mentioned bureaucracy in schools.
It is also very much an issue for people in HE who have certainly
complained to me that at the time that the unit funding has been
restricted they have also had a huge increase in their burden
in terms of passing through the hoop set by the Quality Assurance
Agency. I understand there have been recent announcements on that
but are you able to reassure the Committee that bureaucracy in
HE is being seriously looked at and that we are not having our
academics spending too much time jumping through hoops when actually
what they are doing is a very good job and some of the hoops perhaps
are unnecessary and are taking away from teaching time.
(Sir Michael Bichard) It is an issue we need to take
seriously and we are taking it seriously. The reduction in subject
review inspection, so that departmentsand these are not
universities but departmentswhich have achieved 21 or more
points will not in the coming round be inspected because we are
sufficiently satisfied about the quality. That should reduce in
one go by about 40 per cent the inspection bureaucracy. We need
to look hard and the HEFC will be looking hard after this RAE
round, research assessment exercise round, as to whether or not
there is not yet more we can do to reduce any bureaucracy which
surrounds that. The good news for David Normington is that I shall
be applying whatever pressure I can apply from the HE world in
the future to ensure that we minimise the bureaucracy, but not
to a level where you can no longer be sure about quality. We spend
in this country £1 billion of public money every year in
research funding based on the RAE. It is important that we should
be able to satisfy ourselves about the quality of research in
the HE sector. Obviously as a sector overall we spend some £6
billion a year. Self-assessment is important but you need some
The Committee suspended from 4.47 p.m. to
4.57 p.m. for a division in the House.
Mr Derek Foster
22. You have mentioned centralisation and devolution.
I had a mostly mischievous question in my mind which has some
seriousness to it. I was going to ask whether the most important
bit of synergy which the new department learned was that centralisation
from the Department of Employment was easiest and worked very
nicely for education if you could fit it together. Are we now
at the stage of the Department of Health where we need to devolve
much more decision making to frontline staff?
(Sir Michael Bichard) In employment?
23. No, in DfEE. I think the education side
learned centralisation from the employment side because education
was extraordinarily diffuse before, was it not, our decision making
within education, to such an extent that one often wondered what
the Secretary of State for Education was for except to win the
battle in the Government for the money?
(Sir Michael Bichard) I know there is a sense that
we have centralised and on literacy and numeracy it is true that
we have been pretty interventionist. Where we have found problems
with local education authorities we have been pretty interventionist
but if you look otherwise across the piece a huge amount of devolution
has been going on on either side of the electionthis is
not a political thingin the most recent past taken a step
further with the direct grant arrangements. It is not right to
suggest that this has been totally centralisation. Mr Normington
has been very much at the centre of this and maybe this is an
opportunity for him to comment, if you would allow him to.
(Mr Normington) If you look at international comparisons
we have in terms of funding and governance the most devolved system
of decision taking in schools in the world, with possibly the
exception of the Dutch, but somewhere right at that end. Schools
have a great deal of autonomy over how they spend their budget
and over the employment of staff and so on, in a way which astonishes
people in other parts of Europe. You have to balance that with
the fact that central government has spent a lot more time setting
standards and holding schools to account and the tier which has
been squeezed in that has been the intermediate tier which has
been local authorities. There is no doubt about that. It depends
how you look at this. In many ways it is a very devolved system
and there is a lot of discretion in schools to decide how they
spend their money and what they spend it on.
24. From our brief, the most rapidly rising
bit of the expenditure, certainly on schools, has been that controlled
by the department itself, where you have been ringfencing tranches
of money as though you did not trust the local education authorities
to spend that money and that this was the only way of getting
what the department wanted.
(Mr Normington) It is mainly the Standards Fund which
is ringfenced as the DfEE's budget and that accounts for about
ten per cent of the total spending on schools. Yes, it has gone
up, but it is still only ten per cent of the total. There are
very strict rules about how much of that money has to be devolved
to schools. It is for specific purposes and it is for specific
Government priorities. From this April we have greatly freed up
the ability of schools to shift that money almost at will between
the different purposes of the Standards Fund which is a significant
step in saying yes, there is some ringfenced money from the DfEE
but actually you can spend it on the things you in the school
think are the priorities.
(Sir Michael Bichard) You will know that there is
a review of the funding arrangements going on at the moment and
clearly one of the things that needs to be looked at is whether
this balance is right, whether ten per cent is an unreasonably
high sum. At the end of the day Ministers, whoever they are and
whatever party, are going to want to be sure that their policies
have a pretty good chance of being implemented when they are the
people who are held responsible. The current Secretary of State
made it clear that if the literacy and numeracy targets were not
achieved then he was going to resign. It is unlikely in those
circumstances that anyone is going to be prepared just to leave
it to chance.
25. Most of the increase of the last two years
has been of the kind of expenditure which I have indicated. Would
you like to comment on that?
(Mr Normington) Though there have been substantial
increases in the Standards Fund, really substantial increases,
those have been a substantial part of the overall increase in
spending on schools and the Standards Fund is hypothecated to
particular priorities which the Government has set like literacy
and numeracy. Having said that, from this April, schools have
much more discretion about moving it between different priorities
as they judge them to be within the school.
Mr St Aubyn
26. Could you tell us why the DfEE resource
accounts were not published until 22 March this year?
(Sir Michael Bichard) No, not immediately.
(Ms Thompson) That was within the timetable set by
Parliament. There were a few delays; it is the first set of full
accounts which were required but they were published within the
27. According to figures I have been given by
the Library, what the resource accounts reveal is that spending
as a proportion of GDP is planned to be less in the period 1997
to 2002 than in either the last five years of the last Parliament
or in fact over the whole period 1979 to 1997. Do you agree with
(Sir Michael Bichard) This is a discussion we have
28. As you are coming to the end of the Parliament,
the Government might have done something about it.
(Sir Michael Bichard) I am happy to go over the ground
again. The situation in 1996-97 was that education expenditure
stood at 4.7 per cent of GDP. It is 4.8 per cent in 2000-01 and
it is projected to go up to 5 per cent next year and by 2002-03
to 5.1 per cent. As we always discuss each year, the equation
is a complicated one in that it depends not just upon your input,
how much you are investing in education, but also on the performance
of the economy. There have been periods over the last 20 years
when the economy has not been performing well, when the percentage
of education expenditure to GDP looked very healthy. The position
at the moment is that it is on a rising curve at a time of economic
growth. Perhaps I might anticipate a further question, this Government's
manifesto commitment was to see an increase in the expenditure
proportionate to GDP and that is what we are currently seeing.
29. Some might say that the fact that spending,
even taking in this boost over the three years projected, would
still be lower than over the 18 years of Conservative rule. Is
what you are saying that how much you spend on education is not
really the important thing, it is how you spend it. Is that your
approach to running the department?
(Sir Michael Bichard) If you remember, the investment
in education and indeed in training in the last four years has
increased dramatically, so there is a vast amount of additional
money going into education and training. That does not produce
the growth proportionate to GDP that in other circumstances it
would because the economy is growing at the same time. It is entirely
untrue to suggest that there has not been a significant increase
in the investment in education and training.
30. Given that in this field so much of expenditure
relates to salaries, either of teachers or of support staff, and
given that the demand for salaries and the level of salaries are
directly linked to the level of demand in the economy, that is
the level of GDP, is not this measure for education an absolutely
critical one? Does not the fact that the Government has failed
to increase spending in a timely fashion go some way to explain
the very serious problem we face today of teacher shortages.
(Sir Michael Bichard) I cannot accept that the Government
has not invested in education, has not spent on education, as
you put it. It has. There has been a dramatic increase every year
since 1997 and projected
31. But talking as a percent of gross domestic
product is the framework in which I should like you to examine
(Sir Michael Bichard) I am sorry in your last comments
you were not actually talking about the relationship between expenditure
and GDP. You were, unless I misunderstood you, suggesting that
the Government have not invested in a timely manner in education.
I was right to point out to you that the Government has invested
dramatically in education over the last four years and the projection
is that they will continue to do so.
32. May I clarify that point? It is that to
do it in a timely manner the amount you invest in education, spend
on education, should keep pace with the rise in the economy, otherwise
the resources available at the school level to attract teachers
is not sufficient to retain the numbers needed to do the job,
which is exactly the problem we found today.
(Sir Michael Bichard) Education spending in England
is projected to increase by nearly £11 billion from 2000-01
to 2003-04. By any standardsand that is an average real
term growth of over 5.7 per centthat is a pretty dramatic
investment. We are talking about salaries and teacher shortages
and we also need to point out that this year those teachers who
have gone through the threshold, and the majority of those who
applied will go through the threshold and the majority of teachers
have applied who are able to apply, then they will be receiving
very substantial salary increases this year, between 12 and 15
per cent. In addition of course, because of the changes the Government
have made to the teacher scales generally, they are in a position
to move to much higher levels of salary as they move through their
career. Again we have seen, certainly in recent years, an unprecedented
investment in teacher pay and salaries.
33. You are saying it is better to follow this
approach where you have famine for three years followed by a feast.
Would it not have been better to have achieved sustainable increases
in the early years of this Government and then some of the problems
arising from that, because of the failure to raise teachers pay
in those early years, a failure to find resources for that, would
not have led to today's teacher retention and teacher recruitment
(Sir Michael Bichard) I shall make an entirely factual
point which you have invited me to make and I do not want it to
be misunderstood as other than a factual point, but under the
current plans UK education spending is planned to increase by
over 35 per cent in real terms between 1997-98 and 2003-04, compared
with around 33 per cent between 1979 and 1997.
34. Is not the critical figure that as a percent
of GDP throughout that period, even taking into account the feast
at the end of the eight-year projection, the Government will not
be spending more as a percent of GDP? Let me move on to the issue
of teacher recruitment.
(Sir Michael Bichard) I just want to draw a line under
it if you are going to move on. It is an important figure, clearly
it is an important figure because otherwise the Government would
not have had it as a manifesto commitment that they should increase
the expenditure as a proportion of GDP, but it is not perhaps
the most important figure because it does depend upon the general
performance of the economy, despite the point you make about teachers'
salaries, it is a figure which can be slightly misleading. But
let us be clear: the Government's manifesto commitment is being
Mr Derek Foster
35. May I just underline this point by asking
whether it is not true that if the economyand we hope this
does not happenwent into recession, then the expenditure
per GDP would actually increase very substantially?
(Sir Michael Bichard) Depending on the level of investment,
yes, that is true.
Mr St Aubyn
36. To draw the line under this point, you have
referred me continually in this exchange to future years or to
the last year and future years. Is it not the case that for the
first three years of this Government there was no real increase
in spending on education? Is that not true?
(Sir Michael Bichard) No, I am sorry, that is not
true. I said that the real term growth between 1997-98 and 2003-04
was 35 per cent
37. But what about 1997-98 and 1998-99 for instance?
(Sir Michael Bichard) If you want to choose a particular
year or particular pair of years and look at those separately
then clearly you may get a particular answer because clearly this
is an equation which will change over a period of time. I take
in one case seven years and in another case 18 years and over
that period of time in one case there was an increase of 35 per
cent over seven years and in another 33 per cent over the 18 years.
I think I would leave it at that.
38. I shall let you have a copy of the Library
paper which shows a standstill in the early period of this Government.
(Sir Michael Bichard) We have said and I have said
here before that it was Government policy after the election to
follow the expenditure commitments of the previous Government
and therefore that would be bound to happen.
39. They abolished the mid-year spending review
which always increased those figures under the previous Government.
May I now move on to the issue of teacher recruitment because
according to the Director of Education in Surrey, who has sent
me a copy of his letter written to your department dated 24 April,
his internal vacancy list contains a record of 174 vacancies,
mainly for September and he is not at all optimistic about the
prospects of filling them. Is not the problem of teacher retention
and attracting teachers a huge crisis now for education in this
(Sir Michael Bichard) I have identified this as an
issue at the outset today, but it does need to be put into context
in several ways. First of all, we now have 5,500 more regular
teachers in England than we had in January 2000 and 12,500 more
than we had in January 1998. We actually have more teachers in
our schoolsnot posts but teachersthan in any year
since 1984. We have more occasional teachers this year than we
had last. The teacher vacancy rate now stands at 1.4 per cent
and that is up from 0.8 per cent in January 2000. It actually
represents just under 5,000 vacancies on a teaching staff of 410,000.
The secondary vacancy rate is 1.3 per cent and that is up from
0.8 per cent in 2000. It is 2,500 vacancies in secondary schools.
So there is a problem. There is a problem which is worse in some
areas than others, which is worse in some subjects than in others,
but it does need to be kept in perspective. As far as head teacher
vacancies are concerned, secondary head teacher vacancies are
down on last year and primary head teacher vacancies have not
changed. That is not something you would gather from the coverage
that the issue has received.