Special Grant Report 106 (Teachers)

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Kevin Brennan (Cardiff, West): 42.

Mr. Brady: I am very impressed. The hon. Gentleman will be resigned to the fact that his witty intervention will be attributed to the hon. Member for Ealing, North (Mr. Pound).

I draw the Minister's attention to the figure of 1.157, which represents the additional payment for pension and national insurance costs. Why does that figure not reflect the full cost of those payments, given that increased pension costs for the current year leave a shortfall of 0.15 per cent.? Will the increase in national insurance costs be fully reflected in future?

The figure of 0.6 is the Department's 60 per cent. contribution to the payments. Why 60 per cent.? I ask baldly where the other 40 per cent. is expected to come from.

On 6 April, The Guardian, a journal that the Minister may read from time to time—

Mr. Twigg: Every day.

Mr. Brady: I read it avidly. The article states:

    ''The government had refused to shift its position, claiming that headteachers had to make difficult decisions. Earlier this week, as the terms of the deal were being finalised, the school standards minister Stephen Timms insisted the scheme was never intended to be fully funded and demand-led.''

However, the funds have to be found from somewhere and the fact that the Government are prepared to provide only 60 per cent. of the cost presents a every head teacher in the country with a dilemma.

What provision does the Minister envisage for circumstances in which teachers move between schools

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during a school year? How will the grant payment to schools vary in such circumstances?

We welcome the funding provided for teachers in children's homes, but what provision is being made for the leadership group outside schools, including, for example, teachers in charge of pupil referral units, who are typically paid as heads or deputies?

I said at the outset that I did not want to place too great a burden on the Minister's vocal cords, which I know are suffering. Brief responses to my points will suffice, but I hope that he will take the opportunity to put the special grant report and the performance-related pay proposals that it contains in the context of wider questions about teachers' pay and the Government's approach to PRP in future.

The funding of education and the funding and function of local education authorities are in a state of flux. The Government claim to promote greater autonomy for schools and to encourage schools to reach their own arrangements for pay and conditions, but there is no provision in the report for what will happen if a school takes advantage of the freedoms that Ministers plan to offer.

4.50 pm

Mr. David Rendel (Newbury): Liberal Democrats have always been more than a little wary of the performance pay scheme, although I am sure that the Minister is aware of that. It is odd that the Government consider that teachers will perform well not because they love their job and want to do the best for children, but only if they are paid a bit more for doing it. That theory was tried in the private sector a long time ago. I worked for several firms that had performance pay systems. Interestingly, as the Government are introducing performance pay in various areas, the private sector is turning against it and realising that it does not have the desired effect. We have very grave concerns about the whole scheme.

The original Green Paper contained no suggestion that schools would have to pay for part, or all, of the reforms. It was believed that the Government would pay the whole cost of the reforms, and it was a bitter pill to swallow when schools discovered that that was not to happen and that they would have to pay the costs for people who passed a threshold under one or more of the schemes.

However, following a row when schools and Opposition politicians made a fuss and argued that schools could not be expected to pay, the Government backed down, but only to the extent that they will pay 60 per cent. of the cost and schools will have to pay the remainder. In which document leading to the final decision is it made clear that the Government will pay only 60 per cent. and that schools must pay 40 per cent.? I cannot find anything in any document that makes that clear.

A great many schools will find that the new comprehensive spending review money, which was so proudly announced by the Chancellor the other day, will be completely eaten up by paying 40 per cent. of the cost of the schemes. That makes a nonsense of the

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Government's proud proclamation that they are putting so much extra money into schools.

Will the Minister confirm that the money that schools will pay for the first term from September this year will be covered by the budget that the Government will pay out at the beginning of January? It would be grossly unfair if the money that will be paid to local education authorities in January did not cover the first term. If I have read paragraph 5 of annex B on page 10 correctly, I think that that scheme is fully covered. Will the Minister reassure me that there is no question of schools being asked to cover the cost of the whole scheme during the first term of the new academic year, with the Government providing money only for the second and future terms?

A further question relates to the administrative burden on schools. It has already been pointed out that the scheme is very complex and that the report has many annexes. The scheme will undoubtedly impose a considerable administrative burden on schools and local education authorities. Will schools and LEAs be reimbursed for the extra administrative costs of putting it into practice?

Finally, I have a question that picks up on something that the hon. Member for Altrincham and Sale, West (Mr. Brady) said. Why is the scheme being implemented through LEAs? Would it not be better if schools made a return of the actual numbers of teachers who have passed the different thresholds and are eligible for extra payments so that the Treasury can make direct payments to schools based on the actual numbers of eligible teachers in each school? We well know that the Treasury has been paying out more and more of schools' annual budgets in direct payments. If it can do that for other payments, there is a good argument for it to base the sums of money provided on the actual number of eligible teachers in each school, and for paying those funds directly to schools. If the Minister insists on his chosen method of payment, I hope that he will give us better arguments to explain that choice.

4.56 pm

Mr. Twigg: I thank the hon. Member for Altrincham and Sale, West for his kind words about the vulnerable. I hope that my voice can hold out in responding to the points raised by the hon. Gentlemen.

I do not want to rehearse the arguments about performance-related pay, because the two Opposition parties have had plenty of opportunities to express their views, and have done so. We want to ensure that we are implementing the scheme in the best possible way. When concerns are expressed—whether by schools, LEAs or teachers' associations and unions—we will respond to them.

A point was raised about the short length of the recent consultation. It was a re-consultation—we reopened the consultation because concerns were expressed about the way in which we previously proposed to take the matter forward. We have listened to the views of schools, LEAs and others to ensure that we implement the scheme in the most appropriate way.

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On the question of how the scheme will apply to schools that have earned autonomy, we will have to draw together the guidance on how earned autonomy will work in practice. The matter will have to be considered, but I cannot envisage circumstances in which a school that has earned autonomy would not receive a grant that it was receiving prior to earning autonomy. We will clearly have to look into that issue when we publish our guidance on schools that have earned autonomy.

Mr. Brady: Before the Minister moves on, I am grateful to him for being so candid. To put it charitably, the Government's thinking remains unformed.

Mr. Twigg: It is being rapidly formed.

Mr. Brady: I hope that our various discussions will be of assistance. Is the Minister suggesting that the starting point for a school with earned autonomy would involve retaining the same sum of money but allowing the head to spend it in other ways to reward staff? If so, does he take the view that it would be appropriate to maintain a similar level of additional payment, and does he envisage that being done via the local education authority or through direct payments to a school?

Mr. Twigg: I shall come back to the hon. Gentleman's last point, because it clearly relates to the broader issue of why we will make payments via local education authorities as set out in these proposals. The hon. Member for Altrincham and Sale, West is tempting me to go down a path that I do not feel ready to go down. We need to consider earned autonomy in the round, and guidance will be issued. All I can do is to repeat what I said just now: it would not be right, given the purpose behind earned autonomy, for us to place schools in a position in which they are worse off because the grant is not available to them.

The hon. Member for Altrincham and Sale, West is aware, because he used the figure in his speech, that 97 per cent. of teachers who applied for threshold payments were successful in the first year of the arrangements. However, of those eligible to apply for threshold money, 80 per cent. did so and 20 per cent did not. Some of those probably realised that they would not have been successful had they made an application. I am not yet in a position to give figures for the second year of the new threshold arrangements.

The hon. Gentleman asked me about the carry forward. Obviously, that will depend on how much of the specific expenditure a school has actually spent. There will be pressure in schools and in the wider local community for them to spend the money. It is for a positive purpose, and there will be an expectation that it will be spent. If that does not happen, the expenditure can be carried forward from one year to the next.

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