Examination of witnesses (Questions 80
WEDNESDAY 23 OCTOBER 2002
80. You do not think it has been unfair? (Mr
Macpherson) Unfair is a loaded term! I would argue that the
way public service provision is allocated is fair. It is on the
basis of reasonable formulae.
Mr Cousins: I wonder, Mr Macpherson, just to
follow that on directly, if you look at the Government's figures
on spending per head, let us look first at England and its regions.
If we look at spending per head, the last year for which we have
figures, the North East of England, which has the worst educational
achievement in performance on any indicator you choose, has, I
think the figure is, £19 more per head spent on it than the
English average. Does that seem to you to be fair?
Chairman: "Reasonable" was the word
81. Reasonable? Let us try reasonable. Reasonable
in the sense that it will deliver the Government's educational
targets? (Mr Macpherson) I would highlight that the
standard spending assessment formula which clearly is critical
for education spending in terms of schools at least is under review
at the moment and a revised formula will be published in due course.
82. So, the fact that the North East of England,
which has the worst educational experience in the country, has
education expenditure per head virtually no different from the
English average . . . Well, that is under review in the SSA formula,
so perhaps that will get taken care of. Could I try something
else out on you, again looking at England. If we look at the Government's
figures, do you agree with me that virtually all the difference
between spending per head in the three northern regions of England
and the English average is accounted for by social security spending
which on no measure is a measure of positive input? Do you accept
that? (Mr Macpherson) I would have to make the calculations.
83. You would, yes, and I think you would find
that, in the case of the North East of England, if you look at
all Government spending that can be identified apart from social
security, it is £100 higher than the English average. In
the case of Yorkshire, if you take out social security, it is
the same as the English average and, in the North West, it is
about the same as the English average. (Mr Macpherson)
It is quite interesting.
84. This is interesting, is it not? (Mr
Macpherson) Looking at education
85. Are we back to education now? (Mr
Macpherson) I am sorry, I have found your line now. I notice
the difference with the average but, for example, the North East
gets £746 per head, the South East gets £668 per head.
So that is a £78 difference which is about 10-12 per cent,
something like that.
86. Could you try the English average which
is the figure I gave to you. (Mr Macpherson) England
is £719 but you also have to factor in . . . There are cost
87. I understand. I must apologise, I was £8
out, it is actually £27 higher than the English average.
My mistake. (Mr Macpherson) You are right.
88. On any test of reasonability, back to education
if you want to go there, back to total identifiable spending per
head if you want to go there. (Mr Macpherson) I think
these are issues which have to be reviewed regularly, which is
why at the moment there is a review taking place of local authority
grant distribution formulae. I think the results of those are
going to be published fairly shortly because they have to come
into effect, I think, in 2003-04. Clearly issues like deprivation
are important and they need to be given the right weight. As you
say, this data is important.
89. Sticking to education and looking now at
expenditure between countries in the regions, taking the years
for which we have figures in the last public expenditure assessment,
am I right in thinking that, at the present rate, it will take
about 300 years for English spending on education to reach Scottish? (Mr
Macpherson) I think that depends on two things: firstly, how
the Barnett formula works itself out and I think what is known
by some as the "Barnett squeeze" tends to happen more
quickly when spending is growing faster. One reason why the Barnett
formula had less of an effect during the course of the 1980s was
that spending was not growing very fast at all.
90. Mr Macpherson, I am with you. (Mr
Macpherson) The second reason obviouslyand this is
a matter for Scotlandis how it allocates its spending.
It may choose to spend more on education, say, than something
91. Sure, but, in its analysis of regional productivity
performance, the Government have identified education particularly
as being a key test skills and, against that background, 300 years
to close the gap between English spending per head on education
and Scotts does seem a little long. (Mr Macpherson)
I cannot comment on the 300 years because I have not done the
calculation. I do not know if Mrs Dunn or Mr Parkinson wish to
add anything. (Mr Parkinson) There is no convergence
factor built into the Barnett formula that will enable us to say
that it will converge after 10, 20 or 30 years because it depends
92. Mr Macpherson was talking about the "Barnett
squeeze" but there is no convergence factor. (Mr Parkinson)
. . . that will enable us to say exactly when they will converge
because it depends on the rate of growth of public spending. The
rate of convergence varies in terms of rapid growth and in terms
of slower growth, but there is some degree of convergence built
into existing plans because of the
93. I am sorry, there is no convergence factor
but there is some degree of convergence? (Mr Parkinson)
There is no convergence factor which will enable us to say that
it will converge in 10 years or 20 years or 300 years because
it depends on future spending decisions as to how fast public
spending will grow in England, but what we can say is that, with
growth in spending, there will be a gradual convergence.
94. That is a little disappointing actually
because I was going to go on to say, because it was cheering me
up, that it would only take about 25 years for the gap between
the North East spending per head on education and Scotts to close
compared to 300 years if you compare England and Scotland, but
that is not actually something we can rely on. (Mr Parkinson)
Because it depends on future spending reviews and future growth
of spending in England. (Mr Macpherson) I think it
is fair to say that if education remains the Government's number
one priority and we can lock in a successful economic management
so that expenditure on public services continues to grow, there
will be convergence.
95. Sure and I agree with you because the trends
I have identified are looking at three years of this Government,
three years in which education is a priority and three years in
which public expenditure was growing and, on those trends, it
would be 25 years before the gap in spending per head between
the North East and Scotland is closed and 300 years before the
gap between England and Scotland is closed. Is the Barnett formula
under review along with all the other reviews? (Mr Macpherson)
The statement of funding policy was published in July and there
are no plans to review the Barnett formula.
96. You have identified lots of reviews but
that does not include the Barnett formula? (Mr Macpherson)
The Barnett formula is updated to reflect population factors and
the latest statement was set out in July.
97. Do you think as part of the productivity
raising agenda across the whole of Britain which involves skills
and spending on education that the Government will be reviewing
education spending per head across the devolved countries and
the regions of England? Is that under review? (Mr Macpherson)
Education spending in Scotland is a matter for the Scottish Executive.
98. So we have no guarantee that these gaps
in spending per head and the rather slower pace of closing them
under this Government with rising expenditure will speed up the
process? It still might be 300 years or longer, or 25 years in
the case of the North East or longer, and this is not under review? (Mr
Macpherson) The allocation to local Government is under review.
The Barnett arrangements were confirmed in July. (Mrs Dunn)
Can I just add to that. Even if the Barnett formula were to be
reviewed, it need not necessarily have that impact because I think
that the key point here is that, as Mr Macpherson said, it is
for the Scottish Executive to decide how much to spend on education.
So, whatever you did to determine the overall quantum, it would
not necessarily have any impact at all on the policy choices that
were made in Scotland about how much resource to put into education.
So, whatever you did about how much funding went to Scotland,
you would not be able to make that shift.
99. Sure, but of course there is no mechanism
for the regions of England to make those policy choices, is there? (Mrs
Dunn) Because education policy is not devolved in that sense,
it is just on England basis.