Select Committee on Education and Skills Minutes of Evidence

Examination of Witness (Questions 140 - 159)



  140. Earlier this week the Chairman of the General Teaching Council, who claims to speak to you up to five times a week, was quoted as saying that further education is in a "potentially catastrophic state. The present situation in FE is completely unsustainable. It's risible, frankly. Salaries in FE are an embarrassing joke." Do you intend to use some of that huge underspend to respond to his criticism of the situation in FE?
  (Estelle Morris) Two things. Not the underspend. In fact, I made clear when I spoke to FE and other post-16 staff that I would not use the underspend for that. Just on the underspend, half of it is in ring-fenced budgets. I am not going to repeat evidence given by my Permanent Secretary, but a lot of it is in Sure Start, a lot of it is in the Children's Fund that I cannot switch to my general budget and a lot of it is capital. So it is not that it will not ever be spent, it is about re-profiling it. It will be spent in subsequent years. I think I have used some of it for the behaviour improvement initiative which we launched in 34 LEAs with the highest truancy and the highest crime rate. I will correct myself if I am wrong on that. I know I have used £66 million and I think it was from the underspend, but I will clarify that.[1] I will tell you why I do not want to use the underspend, because it is rather like the school budget: you cannot spend it once and then not put it into your baseline for the next year. So it is not the way to do that. I do acknowledge that partly "life is not fair, is it" but partly as a result of our decision to put more money into teacher pay we have widened the gap between FE pay and teacher pay. I cannot defend that except to say that we live in the real world and when you are trying to change things as radically as we are you have to do it orderly, but what you have to be is absolutely clear about what the order is. My predecessor was never anything but not honest about saying that schools were a priority and the early years were a priority between 1997 and 2001. I do not make any excuse about FE salaries, I do not like the nature or the number of people on short-term contracts and the lack of stability in the FE workforce, and I do find it difficult, in front of an FE audience, to justify that we have increased teachers' salaries so much to open the gate. I only wish I got a bit of recognition from the teachers, but that is life. So you lose out at both ends. So it is not the ideal situation but you have to do things in order and as and when you can.

  141. Can I just clarify? You did say you were using part of the underspend for the college pay initiative? How much will be allocated for that?
  (Estelle Morris) For the college pay initiative? I do not think I am. No, I am not using the underspend for that. I will send you a note.[2] I have used some of the underspend into the college of FE. I can recall, for instance, that I put some of it into e.learning, I put some in for training for non-teaching staff and we have made an announcement about the teachers' pay initiative for the non-teaching staff as well. I would sooner drop you a note about that.[3]

  142. As yet there is no specific budget allocation for improving or reducing the pay gap, the pay differential?
  (Estelle Morris) No, that will be subject to the Comprehensive Spending Review settlement.

  143. You understand that the differential, particularly for 16-19, between college budgets and school budgets has been significant. Do you think that has increased since the transfer of funding to the LSCs for 16-19 funding for sixth forms?
  (Estelle Morris) It should not have done. There is a real terms guarantee and the money has been passed back to schools. I think two-thirds of school sixth forms or providers have done better out of the new system than worse.

  144. So if two-thirds have done better the differential would have increased.
  (Estelle Morris) It was not intended to widen the gap but what is true—

  145. Has it happened?
  (Estelle Morris) We have done nothing to close the gap. That also is subject to the spending review. It is a manifesto commitment of the Government and an over-time move to close the gap but we have not made progress on that yet.

  146. Coming back to the question of targets, and Meg Munn talked about Sure Start targets, in terms of the FE targets it is significant that the FE targets—the proportion of students with level 2s at 19, and the adult literacy and numeracy targets—also have not been achieved. Is there some relationship between the failure to achieve those targets and this widening gap between schools funding and FE funding?
  (Estelle Morris) I do not think so. Just to put on record, we put more money into FE than the previous government. We have not put as much as they wanted and we have not put as much as we put into schools and early years, but we have reversed the decline. We have put more money in, both in capital and revenue. You are right about the level 2 target. We have not met that. Can I say just a bit about where I think FE is in terms of the cycle of reform. I look at each of my areas of responsibility in terms of the cycle of modernisation and reform, and I think FE was furthest away from that. So much of the early years has been about reorganising the structure and making sure that we have got rigorous inspection, making sure that we have got the intervention strategy to actually deal with under-performing colleges, and making sure that we have got a rewards and incentive structure to deal with good colleges. That has taken a lot of the resource, the effort and the energy in the first five years. We have seen some improvement. Some colleges have improved and there are improvement indices there. That is what we have had to do during the first term. I would be very disappointed if having put that infrastructure in place we did not see movement towards improvement in output targets and attainment targets over the second term.


  147. Secretary of State, just to tie that one down, we have got a Green Paper that many of us found very interesting and stimulating on 14-19, and it is this very area of FE that we expect great delivery from over the next few years if we are going to achieve the kind of ambitions that are really described in that paper. Are you saying that you are in there fighting like mad to get the allocation that could transform the FE sector? I am looking at the figures here: yes, schools up from 1996 to 2001, up plus 4 per cent; yes, you are right, adults, is up at 0.2 per cent. So you have reversed the decline but the Green Paper suggests that this is an area needing massive investment.
  (Estelle Morris) I am fighting for all the areas of my departmental expenditure, as one would expect. I suppose I am going to be a bit like schools and get more, but never actually tell anybody I have got as much as I want. I absolutely acknowledge that if you look at FE it delivers most of our targets. It is actually a crucial sector for the Government. It attracts those sectors of the community more often turned off by learning. I cannot ask it to deliver those targets unless we invest in a better and targeted way. We will have to wait until after the spending review, but I will be hugely disappointed if we do not increase investment in FE over the next five years.

  148. At the sort of level which Lord Puttnam mentioned in his famous article[4] when he says: "My message to Gordon [Brown] is very simple. If you believe that incremental improvements in educational expenditure will deliver you the country that's worth being prime minister of in five years' time, you are making a horrible mistake. If you want this nation to have a future in 2030, 2040, you've got to- in the same way you did in health—dramatically re-evaluate the level of expenditure required to produce the workforce, the citizens and the ethos of success that might just carry us through"?

  (Estelle Morris) I am always interested in the views of individuals, and I am always grateful for pressure put on senior members of Government. I am the Secretary of State and I have got responsibility for making sure that the money is spent well as well. One thing on that, because this is important. I will tell you what the best thing has been about money in education in the last five years: it has been the stability. It has been the fact that we have had a stable economy. I worked in education when we got more money one year and had to cut it back the next year. That has not happened. I would always, always, always sooner go for steady growth and stability than massive investment one year and massive cutbacks the next.

  149. Secretary of State, that is exactly the point, is it not? What Lord Puttnam is flagging up is the fear that Members of this Committee have, that there is a feeling out there, perhaps in places like Number Ten, that education had a good five or six years, now it is health's turn and education goes on a back burner. Is that the feeling you get?
  (Estelle Morris) Absolutely not. I have never, ever, ever had for one moment that feeling at all. Not just by words but by actions. Both the Prime Minister and the Chancellor of the Exchequer have taken every opportunity during recent months to say that education remains a top priority. I do not think Lord Puttnam does not think that it remains a top priority. I suspect that what he is saying is that he would want even more than, probably, people have asked for. You could spend billions and billions and billions. I understand that. If you are asking me whether education remains a priority, of all the things I might worry about in terms of my doing the job, the fact that it is not a Government priority is not something that has ever caused me a moment's concern. It is, and it will continue to be so.

Valerie Davey

  150. I think the department can be congratulated on one of its documents, and that is the last departmental report, which I think everyone, when they finally get a copy, will recognise is laid out in a clearer form than it has been for many years. So congratulations on that. It does show that it consists of extra spending and it does show that money going into schools. Having said that, what was the overall objective which you were hoping to achieve by this shift of money into schools? Secondly, will that level in schools continue, because I think one of the uncertainties in schools is that they can hardly believe their luck and are always questioning whether it will come for the next few years?
  (Estelle Morris) I understand that, which is why some schools have actually got sizeable underspends themselves and are holding money in budgets. They are always waiting for the rainy day because they have been brought up to behave like that. Most heads will have got used to managing a diminishing budget, and (I say this in the gentlest of ways) managing an expanding budget is a different skill, and I do think that is part of the problem I have got with teacher workload and trying to remodel the workforce in the schools. I am running 30 pathfinders to try to find ways forward on that, which you may be interested in. Schools will not stop being a priority. If you actually look, we have got to maintain and expand all the time. We had massive investment to get the literacy and numeracy strategy off the ground, and we can keep that going because there is a point in the improvement cycle where you invest more than in other years, and I suspect that the biggest investment in literacy and numeracy was in its opening year. If we look at the profile of that expenditure it will change over time. School is important to us because we know that it is the gateway to higher education, further education, jobs, lower criminality, decent health and communities and all those things we care about. So we are not going to stop investing in schools. What we do have to do, however, is to not ignore other sectors as well. We are in a difficult game, really, because every one of my sectors can make an argument for being incredibly important, and they have all suffered from decades of under-investment. I do not want any of them to stop yelling for more money. I am not going to stop campaigning for more money with the Government, but I am happy to give that assurance to schools that they are not about to go off our agenda. Anybody who has been listening to what I have been saying over the last couple of weeks, I think, should see that.

  151. Can I follow that up by saying that clearly you will need to justify that extra expenditure. Can you indicate what evidence is coming forward of the relationship between the extra money you are putting in—we are putting in—and the performance in the various sectors which you have indicated already—not just academic?
  (Estelle Morris) Yes. It is varied. EMAs, for instance, have brought about evidence of increasing participation. It is very, very early days yet on attainment levels but there is increasing participation. Excellence in Cities has brought about evidence of reductions in exclusions, improvement in attendance and a faster than national average rate of improvement in GCSEs. There is the fact that the money put into numeracy is targeted so that the most under-performing LEAs—and those in the most deprived areas—get more money and it is good that Tower Hamlets is the fastest improving local authority. So, in general, I think the extra investment has brought about improved results. We are, quite rightly, as a department always being questioned by the Treasury, making sure that the money is spent to good effect. I feel quite strongly—and I do not want to be party political about this—that we have got a Government that has probably invested over a period of time more money in education and is more determined to make a difference than any other. We cannot waste it, because the chance might not come round again. I do not mind that pressure to always equate money to results, and the evidence is beginning to be there.

Paul Holmes

  152. On the question of funding, whether it is in schools or—particularly I want to ask about—FE. You get the difference, which you have already touched on, between what the Government say they are putting in overall terms into a particular area and what the people on the ground feel that they are getting. One of the charts in your departmental report, on page 43, for example, talks about FE college funding. One chart shows total funding and shows that it fell for the first two years after 1997 but has gone up in the next three years, so that overall there has been an increase in total funding. However, the first part of the chart looks at funding per full-time equivalent student and shows that, in effect, over five years if you average out in real terms the amount spent per student there has actually been a fall from the baseline of 1996-97. If the baseline in real terms was 100, over the next five years the average is 99.4 per full-time student. So colleges in this instance—and schools sometimes—say that "Yes, you are saying there is an overall increase in money but what we are getting for core funding on the ground per student is down."
  (Estelle Morris) But the other stuff is real money, it is not monopoly money, it is exchangeable for goods in the economy. I think TPI is part of the non-core funding on that. Let us just take TPI. I am rightly worried about the levels of FE pay, as Mr Chaytor mentioned. If you are in my position sometimes you have to use the levers you have got to bring about the change in behaviour you want to bring about. Sometimes, for a period of time, using ring-fenced, targeted money, is the only thing that will bring about a change in behaviour. So we have to move over time to un-ring-fencing it, because it should always be a transitional state of affairs, to some extent. At the end of the day you have to trust that behaviour has changed and that people on the front line know best how to spend the money. I go back to the point that, you are right, the table says that, but all I am saying is that it is not unreasonable to be asked to be judged on the total amount of money that we put in, not how it was actually categorised in expenditure terms.

  153. So you then move to the areas of ring-fenced money that schools or colleges have to bid for. They complain about having to fill in some of these forms and so on—the time and bureaucracy involved—and the fact that two-thirds to three-quarters are turned down so they are wasting their time. If I can give you one specific example from this year, the Learning and Skills Council now administer the money for colleges, and one area they have responsibility for is the Standards Fund. The total Standards Fund budget for the next financial year is bigger than this year's, but the colleges overwhelmingly are saying that what they are getting from the LSC is less. So, for example, there are four colleges—three of which do not want to be named. One college this year got £208,000 for the Standards Fund, but for next year the LSC has given it £86,000—a 59 per cent cut. Another college got £527,000 this year for the Standards Fund and next year it is getting £130,000. Another college got a 75 per cent cut. One college which is willing to be named, Amersham and Wycombe College in Buckinghamshire, this year they got £209,000 for the Standards Fund allocation, but next year the LSC will give them £32,000. Research by the Association of Colleges across all colleges is showing that, yes, there are a few who are doing better next year than this year but overwhelmingly colleges are reporting massive cuts of 50, 60, 70 per cent in what they are getting for the Standards Fund, yet the overall budget for Standards Fund that the LSCs have got to spread out is bigger. So the colleges are saying "What is happening?" There is a feeling that the LSC, for example, is top-slicing this particular budget at a national level and then passing it to the 47 regions, and the regions are top-slicing it so the money is going somewhere else—into bureaucracy or whatever—but the colleges on the ground are getting significantly less for next year than they have got this year.
  (Estelle Morris) I must say, without being critical, I find it impossible to imagine why a college which is complaining it has had a 59 per cent cut would wish to remain anonymous. I do not understand that. I think they have an obligation, if their funding has been cut by that much, to say who they are so that I can look at it. Without saying who they are I cannot look at it. It is an absolute nonsense to remain anonymous. Just in terms of what your proposed explanation might be, I know this is something you covered, again, last week with the Permanent Secretary, the admin costs of the LSC are lower than the administration costs of the organisation that it has replaced. I do not have that fear. What it might be—and I would be very happy, given a bit more evidence, to look at that—is that sometimes you re-label money when it comes in through a different route.[5] I do think we need to rationalise the Standards Fund as much as we have done in schools, and we need to do that over the next few years in terms of its complexity and bidding and the different funding systems. If colleges are actually saying to you "It comes in in a form that is difficult for us to deal with, or more complex than we would like" I would probably have a good deal of sympathy with that.

  154. On this question of how much is spent on bureaucracy and what the LSC inherited from previous bodies, there are arguments about that. However, one thing that the colleges are worried about is that under the TECs there is clear evidence that the TECs diverted money from front-line education programmes into expanding TEC bureaucracy, which the LSCs are having to try to deal with, and there is obviously a fear when you see sets of figures like these that it is part of the same process happening again.
  (Estelle Morris) I think we have told Parliament that we expect to make a £50 million saving in administration costs of the LSC, and I note that the accounting officer for the department has said that that will be delivered. I do not want to sound complacent, neither do I want to sound as though the LSC would wilfully keep money back from colleges or providers—it does not do that and it is not in the business to do that. It is right that both yourselves, as the Select Committee, with those powers you have, and us, as the department, always keep an eye on that. It is a very young organisation, it is barely a year old, it is just settling down and I think it has done quite well but there will always, always be the need to make sure that bureaucracy does not grow. Organisations have a capacity to grow their bureaucracy that defies belief sometimes.

  Chairman: We will come back to OFSTED in a minute, Secretary of State, but we have to move on.

Mr Turner

  155. Would you agree that one of the greatest fears that parents have for the future of their children is probably drugs?
  (Estelle Morris) I think most parents are fearful about that; I cannot judge whether it is one of their greatest fears but it is certainly a fear.

  156. What is your reaction to our colleague, Kate Hoey, who says that as a result of the Prime Minister's experiment on cannabis in Brixton many children are going to school "bombed out of their heads"?
  (Estelle Morris) Miss Hoey, whose constituency that covers, is entitled to make the observation about her constituency. I think it would be wrong for anybody to portray the English secondary education school system as full of children who are going to school, because of drugs, "bombed out their heads". What is true, however, is that we have a growing drugs problem within this country. Children live in the real world, they live in the community and they are of an age where they often do take drugs, and I think that we would all agree that, sadly, drug-taking has increased. When they go into schools they go into schools as the people they were outside in the outside community. Miss Hoey will have to account for herself and the Home Secretary will account for the new drugs policy when he makes the announcement today. I take seriously any drug-taking in schools or children going to schools under the influence of drugs—of course I do—but to build up a picture that it is only happening in one LEA because of the change in drug policy, I think, is scoring political points and not addressing the real issues.

  157. You say that children go to school as they are outside school, and schools reflect what goes on outside. Teachers, very often, are fighting a very difficult battle to prevent the infiltration of some of the external culture into schools. Is it not really making their jobs much more difficult by allowing people unmolested to smoke cannabis at the school gates?
  (Estelle Morris) I have no evidence that that is the case. One of the initiatives I announced some weeks ago was an expansion of the Southwark project of having police based in schools, where that is the wish of the headteacher. In Kate Hoey's constituency that is one of the LEAs which is covered by our behaviour initiative, and that is one of the LEAs that will have funding provided directly by the Government, directly from my department with the Home Office providing the police funds as well, to make available police based in schools, to work with heads, if that is what they wish. I just think that drugs is such a big issue, it is an issue in Birmingham and it is an issue in every one of your constituencies. I think we have to face up to this and talk about it, and talk about education and prevention. My good colleague, the Home Secretary, is doing exactly that. I applaud the fact that he is trying new ways to deal with this problem. Of course he will evaluate it—he is bound to do that—but if you are asking me, whether my department has been over-burdened with extra complaints from schools in Miss Hoey's constituency that life has been made more difficult, my understanding is no, that is not the case.

  158. Of course it happens in every constituency, I am not suggesting for a moment it only happens in Miss Hoey's, but you will have heard, perhaps on the Today programme this morning, about community workers from the Stockwell Park estate saying "It is all very well for Prince Harry if he has a spliff, he can be told what the consequences are" (and I am paraphrasing). The signals going out from the Government are that in working class communities, like Brixton, they do not care as much about the kids in those communities.
  (Estelle Morris) I do not think there has been one message from this Government, across the five or six years we have been in power, saying that we do not care for children in areas like that. All the investment in my department is targeted at areas like that. It is this Government, and my department, delivering the basic reading and writing for kids in areas like that. I will tell you what, one of the things that might actually keep them away from drugs is a decent education, higher expectations, basic skills when they go to secondary school, good comprehensive schools in which to be educated and hope for the future. I take great exception to any allegation that this Government has done anything other than care for children, whether they are children in middle-class, rural, urban areas, north, south, east and west.

Jonathan Shaw

  159. Just a supplementary on that. I understand there was a survey of all the teachers within the trial area and my understanding was that none of them reported any concerns. Perhaps you could look into that and feed that information back to us.[6]

  (Estelle Morris) I would be delighted to do so.

1   Note by witness: The £66 million was reallocated from the underspend. Back

2   See page Ev 38. Back

3   See page Ev 38. Back

4   The Guardian 9 July 2002. Back

5   See page Ev 38. Back

6   Note by witness: No concerns have been received by the Department from teachers or constituents about the use of drugs in the trial area. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 17 October 2002