Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 60-79)

MR DAVID BELL AND MR JON THOMPSON

11 JULY 2007

  Q60  MR CHAYTOR: My question is if there is going to be a six month process of consultation and then possibly some additional legislation, are there going to be any surpluses left because surely any headteacher worth his or her salt will have spent the money before we get to that point?

  MR BELL: Provided people do not get into the bad old days of getting to 27 March and spending everything and buying things that they do not need then most of us would argue that spending in schools for the purposes of education of those young people is what we want to see, but we also want schools to be intelligent in their planning so that there is a longer term project. Five per cent is a pretty modest premium on the basis of the surpluses that actually exist in schools.

  Q61  MR CHAYTOR: Would you see this as a one-off or as a regular mechanism to reclaim excessive surpluses?

  MR THOMPSON: The proposal is that it would be an annual mechanism for the local authority to operate with their schools forum and then the money would be returned back into the schools system to be redistributed.

  Q62  MR CHAYTOR: Would it apply to all schools?

  MR THOMPSON: That is my understanding at the moment.

  Q63  MR CHAYTOR: That is including Academies?

  MR THOMPSON: Yes.[3]

  Q64 MR CHAYTOR: So if an Academy has in its budget the total of the two million that the sponsor has provided, five per cent of that two million would be reclaimed?

  MR BELL: In a sense that is the capital contribution so that would not be part of the revenue costs of the school.

  Q65  MR CHAYTOR: If that two million sponsor's contribution had not been actually spent in terms of the capital investment in the Academy and was sitting in an account somewhere accruing interest, that would not be subject to the five per cent reclaim?

  MR BELL: No, because we would not do likewise with maintained schools that have got, for example, targeted funding allocated to them. The purpose of targeted capital is precisely to enable schools the predictability to plan over a slightly longer term, and likewise that would be the case with Academies. As we have said often with Academies, the capital contribution is really about the upfront building costs of the school rather than something that is sitting, as it were, in the accounts for a long time.

  CHAIRMAN: We have got to move on. Andrew and Rob have been very patient.

  Q66  MR PELLING: Did the DfES know about this intention to transfer the granting process away from the LSC to give the monies to the local authorities before the announcement was made about education funding on 25 June?

  MR BELL: It was part of the discussion that I was having with the Cabinet Office about machinery of government changes, yes.

  Q67  MR PELLING: Would it have been better to have delayed the overall announcement, do you think, so they could have been done together?

  MR BELL: In a sense that was a judgment made by the Prime Minister, obviously, about the structure of Departments. I am not sure it would have made much difference because the key announcements that affected our Department were in relation to 16-19 funding and the proposition to bring that back into local authorities under the DCSF. We have to now go out and consult on that and we would have had to do that anyway. I think it was important to get the policy intention upfront and say, "This is what we are going to do", and be very clear about that, and then consult. Obviously this is something that cannot be introduced overnight so there is going to be a consultation, probably beginning in the autumn.

  Q68  MR PELLING: The consultation is not about the principle of the policy, it is how the allocation of monies is going to be made?

  MR BELL: That is correct.

  Q69  MR PELLING: How do you think it will fall out in terms of the funding mechanism? Is it going to be designated fixed grants again or is it going to be some formulaic approach?

  MR BELL: We have to have it clear and transparent with all the rules that would apply normally to the distribution of funding in any system. Part of the consultation exercise will be to lay out possible options for distribution by the local authorities. I confess that we have not yet started the detailed thinking of what will be in that consultation paper but we know that we have to have options available for the autumn to be able to go out and consult.

  Q70  MR PELLING: As was discussed on the rather more fundamental point earlier about the funding formula and its application to deprivation, quite often there are winners and losers in this process. What do you see as the risks and who might the losers be who need to be protected in the change and the application of a different formula?

  MR BELL: I think there is a general principle of stability, that is the `s' word of the morning! It is actually a very serious point because—

  Q71  MR PELLING: Of course it is, it is estimated that instability can be very costly.

  MR BELL: If you take, for example, the Association of School and College Leaders, essentially the organisation that represents secondary headteachers, they would say that the current funding arrangements where the funding for 16-19 in school sixth forms comes via the LSC has worked reasonably well. We have to be very careful about bringing forward proposals that would destabilise the funding. The same will be true in colleges where you will have funding for both 16-19 students in colleges as well as the funding that may be available in the college. On the winners and losers, I think it is very difficult to predict that. I guess one of the things that we will be consulting on is any sort of interim or transitional arrangements that might be acquired. That would not be unusual because most consultations in the past 20 years on funding formula have taken account of transition and, in a sense, have tried to cushion that. Again, without getting into the detail, that will all be picked up in the autumn.

  Q72  MR PELLING: Is this all going to be just passported though local authorities and, if it is going to be passported, what is the point of doing it?

  MR BELL: That is also one of the issues for consultation because if you are going to get an integrated 16-19 funding system you have to think about the different mechanisms for doing so. As you know, with the schools funding via the dedicated schools grant, that is very clearly earmarked only for expenditure on schools and that kind of guarantee about funding for 16-19 will be very important for the Department in consulting so that we do not have funding that previously has been for 16-19 education in the round diverted for other purposes. We need to think through the consultation what those mechanisms might be.

  Q73  MR PELLING: What worries me about my particular part of the country, in South London, is we have a situation where there may even be a need to reduce the number of places available and it is going to be the local authorities that are going to have blood on their hands when it should have been done by others.

  MR BELL: Removing places, whether that is in schools or colleges, is never a pleasant business. The current responsibility for schools, as you know, still rests with the local authority working within the local arrangements and, of course, you cannot keep institutions that are not viable going in the medium to long-term because students are choosing not to go there. In a sense, however you organise the funding and whoever has to make the decisions, these decisions have to be made as patterns of choice change.

  Q74  MR PELLING: So who is making those decisions? Is it the local authorities who will now make those decisions, bearing in mind that the intention is to put the money through local authorities?

  MR BELL: That is part of the consultation because if you think about further education colleges, further education colleges will have, and do have, funding responsibilities post-19 and much of what has been accounted for in the Departmental Report, the direction of travel for funding for post-19 and adult skills, has come through the Train to Gain mechanism so, in a sense, colleges are having to compete more for that funding given the funding has gone to employers. Again, there is a whole set of questions that have to be consulted upon about quite where planning decisions are made, about the sufficiency of places, who will have responsibility for making decisions about which institutions should or should not continue, and that is why we also have to think about the legislative implications of making these changes because we are fairly certain that there will be some.

  Q75  MR WILSON: If I look at the families and children part of your brief rather then specifically schools, although they all combine very neatly together, I have never been entirely convinced that spending on schools is the major factor in a child's chances in life. You can have as many glossy brochures and shiny new schools as you like but at the end of the day I think they make a marginal difference to the overall life chances of a child. Is it your view that spending makes the biggest difference in a child's chances in education or are there bigger social factors at play? Which way does it weigh in your mind?

  MR BELL: I certainly would not argue that just spending through schools or children's centres is the key or only determinant in a child's life because clearly the family, the comfort and support they get from home, the wider support they get from grandparents and the community, all of those things are important. I do not think it is an either/or situation because you want children to be well-supported by their families and given lots of opportunities to succeed, but at the same time we know that if we get the right kind of opportunities in schools then you give youngsters a better chance of success. It seems to me, as always for a Department with our range of responsibilities, it is about trying to support families and children together at the same time as ensuring that the funding we provide for schools, colleges or whatever, maximises the opportunity for those children or families to succeed.

  Q76  MR WILSON: We had the Children's Commissioner before us a few weeks ago and he suggested in his evidence to us that, for example, a child's chances in education are greatly improved in a two parent family. What research have you looked at in your Department that reflects that view and has looked at the effect of family breakdown on educational attainment?

  MR BELL: Our research demonstrates clearly that stability in family life is important, but that is not necessarily stability that you get only through a two parent family. What we want to do is ensure that the kind of stability that we can help support is suitable and appropriate to what family structures exist. I do not think we are in the business of saying that there is only one kind of approved family, that would be quite inappropriate for us to do, but what we want to try to do is help families, however they are structured, to get the best opportunities for their children. That has got to be our priority, whether that is about support for very young children or it is about supporting parents helping their child through school or making the right choices when they go to college.

  Q77  MR WILSON: Of course you are right, the Department should not have an approved family style, but do you recognise that a two parent family is of any assistance to a child's chances in education? Do you clearly recognise that?

  MR BELL: We know that there is research about stability in family and about two parents and the contribution that they make, but I think you have to be very careful in this whole discussion and debate that you do not imply that people who are not in those sorts of family structures and relationships are somehow letting their children down.

  MR WILSON: Of course.

  MR BELL: Our responsibility as the Department of State for Children and Families is to help parents, families, in whatever circumstances they find themselves to have the best opportunities for their children. That has got to be our priority as well as looking at the wider social context in which children are growing up.

  Q78  MR WILSON: If you know that children do best in a two parent family, are there initiatives you can undertake amongst other initiatives that you take to help other styles of family?

  MR BELL: Absolutely.

  Q79  MR WILSON: What are those initiatives and how much spending is going on them?

  MR BELL: I cannot answer the question directly about spending, although I can look into that. What we would say is whether it is in the support that parents get for their children at school or whether it is over a parent or parents coming into a children's centre, these services are designed to enable parents to be well-supported. They are not about saying, "This is a particular kind of family structure so we will support it in this particular kind of way", they are about saying, "We want to provide support to families, wherever they are and however they are organised". That is our responsibility through the policies that we are trying to promote.


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