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Miss Julie Kirkbride (Bromsgrove): Following the point made by the hon. Member for North-West Leicestershire (David Taylor), can the Secretary of State, as a Birmingham Member, explain why every year in her patch all the children in secondary schools get in excess of £500 more per pupil than those in my patch? Under the proposed SSA formula, that situation will become even more extreme. Why is that?

Estelle Morris: I shall let the hon. Lady into a big secret. People in my patch got more money than people in her patch when the Tories were in power as well. That's life. The difference between the two Governments is that we are trying to do something about it, whereas the Conservative Government did nothing about it. [Interruption.] Let me give a word of warning. There is life beyond the SSA formula. I have been talking about a new structure of secondary education—a lot of new money going into schools, wherever they are and whatever the funding formula. I understand the importance of the SSA formula in areas such as Staffordshire, Leicestershire, Nottinghamshire and Worcestershire. The consultation is

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out, with four options for people to comment on. In due course, we shall receive their representations and arrive at a decision.

Helen Jones (Warrington, North): My right hon. Friend rightly stressed the lack of progress made by many children in the early years of secondary education. Can she assure me that the flexible staffing that she wants to encourage would facilitate the use of expertise from the top end of primary schools in the early years of secondary school? That could be beneficial to many children and make the transition easier.

Will she tell me whether she envisages that schools in the middle of constituencies such as mine will qualify for the leadership grant? They do not qualify under many of the other categories that she mentioned, but they are nevertheless in challenging circumstances—although the authority as a whole might not show up in many of the deprivation indices.

Estelle Morris: I entirely support my hon. Friend in saying to heads that they should consider the option of linking with primary schools and using year 6 teachers for year 7. I say that because when I visit schools that have done that, staff speak highly of the results that have been achieved. It is the schools' decision, but we want to encourage them to work in partnership. Before 1997, the atmosphere was not such that schools would share their resources and good ideas. That is one of the major changes in climate that we have helped to bring about since 1997. I thank schools for their generosity of spirit in increasingly being prepared to share their good work and good ideas with others.

On my hon. Friend's second question, some schools in extremely challenging circumstances are outside local authorities that measure up in terms of free school meals. That is a dilemma, and we want to target that group. Without giving assurances about particular schools in the middle of her constituency, I can say that we have made allowance for some schools outside excellence in cities areas to be included for a leadership grant.

Mr. John Redwood (Wokingham): I welcome any extra money going directly without strings to schools in my area, and I welcome the idea of more specialist schools. Maiden Erlegh school in my area is developing as a centre of excellence in arts and St. Crispins school in Wokingham would like more Government support to develop in technology. Does the Secretary of State agree that in a secondary school it is important that a head teacher should have taught all the pupils in the school in at least one year in one subject, so that he or she knows the school better and is aware of the pupils' academic aptitudes?

Estelle Morris: I would not dare to be so prescriptive as to tell head teachers in which years they should teach. I have a genuine difference of opinion with the right hon. Gentleman about that, although I take his point seriously. If a school's governing body had decided what was right for the school in terms of a head teacher's background, of course I would value that opinion. I go to schools where the head teachers know the name of every pupil, and if they have taught in every year, of course that is a strength.

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I hope that the right hon. Gentleman accepts that some governing bodies choose a different model of leadership and that they should have the freedom to follow that route.

Mr. Tam Dalyell (Linlithgow): Could we acknowledge the significantly excellent settlement for the science budget? Will the ministerial team also turn their minds, however, to the intractable and growing problem of the dependence on short-term contracts in both universities and scientific establishments? Scientists do not do their best work if they are for ever fussing, understandably, about their personal future in the short and medium terms.

Estelle Morris: My hon. Friend is right. I know from my visits to universities and from people involved in research that part of the underfunding of recent decades has resulted in short-termism in relation to contracts. Some of the announcements made by my right hon. Friend the Chancellor yesterday will go some way towards addressing that problem. We shall not be able to solve all the problems when the Department makes further announcements on the future of HE, because there is no magic wand to restore the funding that has been cut from universities over the past two decades, but I hope that we shall begin a journey of improvement towards increased sustained investment in our universities.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): According to the House of Commons Library, the increases in expenditure in England between 2002 and 2005–06 will be £12.8 billion—a 28.5 per cent. increase—whereas in Wales and Scotland, the increase will be £1.9 billion, a 21.6 per cent. rise. That is a 7 per cent. discrepancy. Will the right hon. Lady explain and justify that difference?

Estelle Morris: As the hon. Gentleman knows, the allocation to Wales is worked out by means of some historic Barnett formula. That is the nature of the system, and the explanation as to why the amounts of money going to Wales may seem somewhat different from those allocated to England.

Mr. Gerry Steinberg (City of Durham): May I say how delighted I am with the huge investment in education? It is great news. I have to say, however, that I am a little sceptical about the principle of so many specialist schools. I want to put to my right hon. Friend two questions that I am asked virtually every time I am in my constituency. Does she agree with the teachers who tell me that the amount of bureaucracy that they have to deal with really affects their work load, and consequently prevents them from raising standards? What do we intend to do about that? The second question relates to university lecturers, as my right hon. Friend would probably expect, as Durham university is in my constituency. When does she intend to ensure that university lecturers receive a substantial pay increase, bearing it in mind that they have dropped back by some 40 per cent. in the past few years?

Estelle Morris: I tend to think that teachers use the term "bureaucracy"—as do I—as shorthand for extra work, extra demand and extra pressures. That does not always involve paperwork, although I accept that there is a lot of paperwork in the system now. I have always

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accepted that the Department has a responsibility to do better than we do, and constantly to strive to cut it back. Although we have put extra flexibility into the standards fund, we still have fairly complex reporting arrangements. That is why we have decided, only this week, to write to schools shortly to say that they will be required to report on expenditure from the standards fund only once a year. That will result in a sizeable cut in the amount of bureaucracy to which they are currently subjected. So, we must do better, but we do try, and we are doing better.

This is a huge and complex system. We want to invest money in reform and, because we have a responsibility to ensure that the money is spent well, we must have an accountability mechanism in place. I entirely accept, however, that we must do more to make that process leaner.

On university lecturers, we put extra resources into universities last year so that they could begin to reverse the trend of underfunding. For the first time, they saw an increase in their funding after the diminishing resources that they had received year after year. It will be up to the universities, but I hope that university lecturers' pay will benefit from the settlement that we have been able to award this year.

Mr. Stephen O'Brien (Eddisbury): While I understand where the money announced today will be spent, the Secretary of State will be aware that the Education Bill now going through Parliament contains provision for private companies limited by guarantee to provide educational services. Some of those companies will inevitably fail from time to time. Will she confirm definitively whether the taxpayer will be the ultimate guarantor in such arrangements, whether the companies will be indirectly guaranteed by the local education authority, or whether she will simply allow those companies to go to the wall?

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