Select Committee on Education and Employment Minutes of Evidence


Examination of Witnesses (Questions 20 - 39)

TUESDAY 1 MAY 2001

SIR MICHAEL BICHARD, KCB, MR DAVID NORMINGTON AND MS RUTH THOMPSON

  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 that.
  (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 departments—and these are not universities but departments—which 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 external challenge.

  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 election—this is not a political thing—in 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 timetable.

  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 that calculation?
  (Sir Michael Bichard) This is a discussion we have every year.

  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 it.
  (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 standards—and that is an average real term growth of over 5.7 per cent—that 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 crisis?
  (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 achieved.

Mr Derek Foster

  35. May I just underline this point by asking whether it is not true that if the economy—and we hope this does not happen—went 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 country?
  (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 schools—not posts but teachers—than 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.


 
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