My Lords, there are 10 amendments in this group, and my name is on two: Amendments 92 and 93. I have found the debate and discussion on a number of issues in this group extremely helpful, and I hope the Minister will be able to respond more when we get to Report.
I want to take us back to the issue of the centralisation of powers on the national funding formula. For me, that is a really important issue, because there are a number of practical problems that will be produced, which I think my Amendments 92 and 93 would help with. However, at this stage, they are probing amendments.
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In the Explanatory Notes to the Bill, the Government say that a directly applied national funding formula will ensure that funding is allocated on a “consistent basis” that will meet
“schools’ and pupils’ needs and characteristics.”
The Government have also said that
“each mainstream school will be allocated funding on the same basis, wherever it is in the country, and every child will be given the same opportunities, based on a consistent assessment of their needs.”
Those are the Government’s words. I think that may be difficult to achieve in practice, because I feel that the system proposed is complex—and anyway, too much is being left for regulations. The Government’s approach may address some of the unexplained differences that can arise with service budget allocations between local authorities, which the Government are understandably keen to address, but the proposed solution for direct control will inevitably create other anomalies, given the extra rigidities proposed.
Clause 43, for me, is a bit of a giveaway. Under the heading “Funding: other”, on Clause 43, “Provision of information to the Secretary of State”, the Explanatory Notes say:
“This clause provides that a local authority, the governing body of a maintained school, or the proprietor of an academy or non-maintained special school must provide reports, returns and information to the Secretary of State as and when required, in order for the Secretary of State to exercise their functions under this Part.”
Various examples are given, including
“pupil numbers …; planned school closures and mergers; planned school expansions to meet basic need; and information on whether a school operates across split sites, to underpin split sites funding.”
In the 2020-21 academic year, there were 9,444 academies, with 4.5 million pupils attending them, and there were 12,603 maintained schools, with a total of 3.7 million pupils. How many civil servants will there be to do all the allocations, responding to questions and all the administration and inquiries? Particularly at a time when the Government are trying to reduce the size of the Civil Service, I find it very hard to understand how this system could practically work. My Amendments 92 and 93 provide part of the solution to that problem.
Turning to my Amendment 92, I think it is essential that
“A local authority in England may make a national-to-local budget reallocation, up to a certain percentage of the national funding formula without the requirement to apply to and receive the agreement of the Secretary of State”,
and that
“The percentage of the national funding formula … must be agreed between the local authority and all local schools that will be impacted by the national-to-local budget reallocation.”
Amendment 93 simply spells out that
“when the reallocation is higher than the amount agreed by a local authority and their local schools”,
the regulations and the role of the Secretary of State can then apply.
Under existing school funding arrangements, we currently have a situation where councils, with the agreement of schools, can move away from the national funding formula to address local needs. That flexibility will be removed once the direct national funding formula has been implemented. These amendments retain an element of local discretion to deal with additional school costs that cannot be adequately addressed through a formula. That might relate to, say, PFI costs; the revenue costs of funding new schools, which might need additional funding in their early days as the number of pupils builds up year by year; the additional costs of schools located on split sites; and additional funding to support small schools in rural areas, which is the sparsity funding that we were talking about earlier. There is a solution to the problem if the Government could just think a little bit further about how this is going to work in practice.
Within this area of thinking, there is a difference between multi-academy trusts and councils. At present, the Government’s proposals will enable multi-academy trusts to top-slice and reallocate funding from school budgets within their trust, with no requirement for transparency as to how this money is spent. However, councils which support maintained schools will not be afforded the same flexibility, despite being subject to democratic accountability and a higher degree of transparency and scrutiny. This will create a two-tier system of funding between academies and maintained schools.
This is a huge Bill, and there are many things wrong with it. One of the things that your Lordships have expressed concern about is the overcentralisation in Whitehall with the powers of the Secretary of State. Funding will go exactly the same way through the national funding formula proposals unless some leeway is allocated so that, at a local level, changes can be made where they are needed.