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Session 2001- 02
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Delegated Legislation Committee Debates

Special Grant Report 106 (Teachers)

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First Standing Committee

on Delegated Legislation

Monday 22 July 2002

[Mr. Roger Gale in the Chair]

Special Grant Report 106 (Teachers)

4.30 pm

The Chairman: Before we commence our proceedings, I wish to say that members of the Committee may remove their jackets.

The Parliamentary Under-Secretary of State for Education and Skills (Mr. Stephen Twigg): I beg to move,

    That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 106) (HC 1019) on Special Grants for Performance Pay Progression for Teachers on any Qualified Teacher Pay Scale, for Performance Pay Progression for Teachers on the Leadership Group Pay Spine, and for Threshold Payments for Teachers Employed by Local Authorities in Children's Homes.

I have a croaky voice, so I wish first to make an apology to you, Mr. Gale, and to members of the Committee if I start coughing in the middle of my short speech. Some hon. Members have previously discussed special grant reports that support the teaching reforms introduced in September 2000. I hope that they will bear with me while I outline briefly the background of the reports for the benefit of the members of the Committee who were not involved in earlier debates.

Previous special grant reports provided funds to local education authorities to meet the additional costs of teachers passing the performance threshold, which entitles them to be paid on point 1 of an upper pay scale. Teachers pass the threshold by being assessed by an external assessor against agreed national criteria. Subsequent movement on the upper pay scale for classroom teachers and movement on the leadership group pay scale are according to performance points awarded at the discretion of the governing bodies of schools. Through the new performance pay grants, we are providing some ring-fenced incentive funding alongside general funding to encourage the use of performance pay.

Performance management is critical to the successful leadership of our schools and we believe that there should be a genuine link between performance management and pay. To provide a real incentive for continuous improvement, performance pay should be awarded to the most effective teachers. Although all teachers should be able to rise up their pay scale, we expect the rate of progress to vary from one teacher to another.

Our drive is to strengthen the teaching profession. Since 1997, we have raised school budgets substantially year on year and have invested more than £900 million in special grants in a new pay structure that rewards excellence in the classroom. We want to give schools flexibility to manage for themselves performance-related pay structures that attract, retain and motivate the sort of people who

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make good teachers. Schools will be able to decide how much to invest in performance pay points and how to allocate that investment. That will take place within the context of the new grants and increases in real terms in general school funding.

I shall explain the three grants. In the current financial year, the performance pay progression general grant is worth £90 million. It will support the cost of performance points for members of the leadership group, advanced skills teachers and teachers on the upper—post-threshold—pay scale. We will divide the £90 million fairly between schools, according to the actual number of teachers who are eligible for the grant at September 2002. That is the date from which the first classroom teachers on the upper pay scale can receive performance points.

Secondly, there is the performance pay progression leadership grant. Heads and deputies have had performance-based pay progression on their salary ranges since 1991. When special grant was introduced in September 2000 to support part of the cost of pay spine points, take-up rose from 25 per cent. to nearly 50 per cent. That grant has now ended, but the similar new grant will contribute 60 per cent. of the cost of a performance point awarded to a head, deputy or assistant head in September 2002.

Thirdly, there is the threshold children's homes grant. The Committee will note that the special grant report also includes payments for teachers employed solely in local authority children's homes. An existing special grant provides funding for the additional salary costs in maintained schools of promoting teachers to the upper pay scale. At present, that grant does not cover local authority employed teachers working in local authority maintained children's homes because, when the legislation was approved by Parliament, such teachers were not eligible for threshold assessment. However, the Government have since decided that threshold assessment should be extended to include teachers in local authority children's homes—hence, this proposal.

These grants end in March 2003. Discussions are still taking place about funding levels and mechanisms for after that date. We have announced that funding for performance points on the leadership and upper pay scales in the next financial year will not be less than the £150 million that was announced last year by the previous Secretary of State for Education, my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett).

This special grant report is an important part of our pay reforms, and it is right to expect these increases in teachers' pay—which are in addition to the cost of living increases—to be linked to improvements in our schools. Rigorous performance management is essential to the professional success of teachers, and to improved standards in schools. Our communities expect nothing less, and I commend these proposals.

4.35 pm

Mr. Graham Brady (Altrincham and Sale, West): If I were presenting the compassionate face of Conservatism, I would severely limit my questioning to allow the Minister to rest his voice. However, my

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duty to the House must override my urge to help the vulnerable.

Observers might be tempted to think that this Committee sitting provides an interesting insight into the way in which the House conducts its business. Even if we debate only the general grant, we have 90 minutes in which to deal with a grant that accounts for £90 million of public expenditure. Even I, with my limited mathematical competence, can calculate that that means £1 million a minute. If we take the leadership grant into account, the figure is significantly higher.

This measure is important not only because of the money being spent but because it raises questions about the Government's approach to the payment of teachers and the funding of schools. We welcome the fact that the provisions rectify the anomaly which meant that the grant was not provided to fund threshold payments for teachers in children's homes, and we have no difficulty in principle with performance-related pay. We welcome the linking of performance and pay where that is practicable. However, we are acutely aware that there are difficulties with paying teachers by results, and it is absurd for the threshold to be described—in any meaningful way—as performance-related pay. Assessments of the threshold cost a huge amount of time and energy and result in a reward for 97 per cent. of those who apply.

In the leadership group, performance-related pay is more realistic but, even given these proposals, Government funding is only partial. As the six teacher organisations made clear in their submission to the School Teachers Review Body, prior to its report in February 2002:

    ''Teachers have had their expectations of reasonable rewards in response to their performance raised, yet headteachers would be obliged to make potentially highly destructive judgements between equally deserving teachers solely on the grounds that the funding available for performance progression is cash limited. This would damage industrial and professional relations in schools. Recruitment could be adversely affected with potential new entrants concluding that the Government's promises on pay progression cannot be trusted since they rely on the diversion of schools' budgets from other essential areas of spending. There are clear indications from schools that they will need to make cuts in precisely the sort of areas where the PWC report is likely to require additional expenditure.''

The most notable of those areas in the PricewaterhouseCoopers report is the reduction of teachers' workloads.

There is a degree of confusion in the Government's thinking in this area of policy. The threshold is a form of performance-related pay that is not really performance related. We have difficulties with the funding of the leadership group. This statutory instrument is the product of a compromise that followed the threat of industrial action by head teachers earlier in the year and, even with the compromise settlement on the table, it is still only a partial payment. It still leaves head teachers with many questions about how payments for leadership groups should be made and how the expectations of their staff can be met.

Several other changes in Government policy are in progress. Autonomy over pay and conditions is being

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offered to a tranche of schools under the Education Bill currently before Parliament. There is a possibility that, through its provisions, the whole national pay bargaining structure will be removed. Governing bodies will be able to form companies that can run schools and provide school services. That was confirmed by the then Minister for School Standards, the hon. Member for East Ham (Mr. Timms) in Standing Committee G on 13 December and is in column 157 of the Official Report.

Where would a company providing educational services stand under the measures? Under the grant, how would funds be allocated to a school with earned autonomy exemptions for pay and conditions? Given that such a school could, presumably, opt out of the performance pay system structured by the Government, what provision will be made to allow its head teacher to put in place his own system for rewarding performance? Surely it is not the Government's intention to allow some schools autonomy but not give funding to those which practice what the Government all too often preach.

Can the Minister say what percentage of eligible teachers meet the threshold, what assessment he has made of the value of the threshold as a management tool, given the high percentage of teachers that qualify, and how many teachers are eligible to apply but do not? What assurance can he give on the long-term continuation of the payments for head teachers, even if it is just to say that next year's amount will be at least equal to this year's? The Government have the luxury of making funds available from one year to the next. A head teacher making pay awards and allowing people to progress up the leadership spine will have long-term commitments to his staff that the Government are not necessarily committed to meeting. On the leadership group, what, as an aggregate figure, is the excess cost to schools as a result of those who have been allowed to progress up the leadership spine in cases in which funding has been limited or has not been available?

Annex E of the report requires an audited statement of the amount of grant carried forward by schools or authorities. Can the Minister confirm whether it remains acceptable for schools and local education authorities to carry forward unspent sums of grant—not only in relation to the current period but as a rule—in cases where it is may be necessary for a school or local authority to manage pay progression in a more appropriate way than is allowed under the Government's formulae?

In annex A, detailed formulae are set out for the calculation, first, of the grant paid by the Government to the authority and, secondly, the grant paid by the authority to the school. What is the reason for directing funds via the local education authority when it has no discretion as to how the funds are spent? Why not pay the money directly to the schools, thereby obviating delay and reducing bureaucracy? Why leave the local education authorities with administrative and audit costs for payment of the grant when they are being asked to cut their central budgets?

A very brief period of consultation was allowed in relation to the report. It was announced on 14 May by

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the Department for Education and Skills but was required to conclude by 13 June. At that point—just a couple of months ago—there was a clear question in the Government's mind about how best to define the groups of teachers that would be relevant in assessing payment of grant. Paragraph 4 of the letter sent to chief education officers and others by the deputy director of the school work force unit on 14 May states:

    ''Grant allocations will be based on numbers of relevant teachers. Relevant teachers can either be defined as all teachers on the leadership, AST and upper pay scales or the teachers on those pay scales who are eligible to be awarded a new performance pay point in September 2002. Each definition would produce different numbers at national, LEA and school level. This is because, for example, only teachers on the upper pay scale since September 2000 will be eligible for a performance point in September 2002 and newly-appointed leadership group members will not be eligible for an immediate performance point.''

What was the Government's logic in arriving at the conclusion to that dilemma?

I apologise, Mr. Gale, for talking all about the annexes to the report, but, as all Committee members will have discovered, the report has little substance before the annexes.

Annexe B sets out the formula that the Government have devised by which grants for the leadership group will be calculated. It is P = N x D x 1.157 x 0.6 x (7/12).


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Prepared 22 July 2002