My Lords, I totally support the amendment moved by the Front Bench. If this change in the system of funding schools goes ahead, it is essential that an assessment along the lines proposed is made.
However, I question the need for—indeed, am deeply opposed to—Clause 33 and Part 2 as a whole. I am against the proposal for a hard national funding formula, fundamentally because I am a believer in local education authorities—LEAs—as a matter of principle. My noble friend Lord Knight is not in his place, but he said that everyone would be raising their hobby-horse, and this could well be mine. I am in favour of a seamless education system that works for local people through their local representatives. I am prepared to accept that there is scope for debate on the structure of LEAs. Personally, I have a predilection for bodies of sufficient scale which have significant financial and organisational autonomy—basically, a service that is run democratically and is responsive to local voices. Unfortunately, the trend over the last 40 years has been the other way: centralisation and financial restrictions.
I have re-read the debates that have brought us here and it is my view that no case has been made for a hard formula. Some figures are quoted showing what might be thought were gross discrepancies in what individual schools were receiving in financial support, but without providing the context within which these figures have been reached, it tells us nothing. We are also told that the new system will provide “a consistent assessment,” as if that in itself was sufficient justification, when in my judgment it will be consistently bad. In truth, a close reading of the White Paper tells us that it
“supports the expansion of … trusts.”
What we have here is little more than a by-product of the move to full academisation.
I am against a hard formula in principle, but I am also against it in practice, because it will not achieve a workable or effective outcome. I endorse the comments of the noble Lord, Lord Shipley, during the last debate, where the problems were made clear.
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My view is that there is simply no formula that the Government can reach that will work without local input. No practical formula will encompass the range of possible circumstances that arise in running schools. We know that every school is different: different intakes, different buildings and different social environments. To account for these differences, a complex formula will be needed, and it will be impossible to comprehend its full consequences. It will be an untameable beast, including—to mix metaphors—feedback loops, so it will be uncontrollable. It is also inevitable that a hard formula will rely too much on hard parameters—those factors that are easy to quantify—and not give sufficient weight to more subtle factors that are less susceptible to easy measurement but still affect the resources required to run an individual school.
I also endorse the remarks made in the previous debate by the noble Lord, Lord Deben, who is not in his place, about the increased importance of getting the right data in a hard formula. The difficulty of this should not be underestimated.
It is inevitable that rough justice will be built into the system, and in practice there will remain a need for fine tuning, but unlike the existing system it will be done in a place remote from the local area.
In summary, I am totally against the implementation of a hard, national funding formula that removes any local flexibility from the school funding system. The current soft formula enables head teachers and local authorities, via the schools forums, to address any local issues through a local formula applied on top of the national formula in a fair and transparent way. Local decision-making is tried and tested. It has supported many schools through difficult financial periods, such as a sudden change in leadership or growth. Local decision-making is vital in the school funding system to ensure that any local issues can be addressed immediately and sympathetically. LEAs will lose the ability to take local priorities and the needs of all schools in their area into account, and will have to deal with the additional school costs that are bound to arise and cannot adequately be addressed through a formulaic approach.
Just as an example, forecasting accurate roll numbers while the long-term impact of both Brexit and Covid-19 is still uncertain is very difficult. There is no way of knowing what the school roll will be in advance. There have been significant changes in demand for places over the past decade which the local formulae have been able to respond to swiftly to ensure budgets could cope with a sudden sharp increase or decrease in places. Local formulae are, as discussed and agreed at the schools forums, published and transparent, and I simply do not recognise the need to move to a hard formula.
A further reason to oppose a hard formula is that I simply do not trust this Government. This is a general problem with central government decisions on local spending: there is inevitably an element of political bias. The auguries are bad, given, for example, the impact on London’s schools of the Government’s levelling-up agenda. Such discrimination between areas is bad enough; just imagine if it were to occur on a school-by-school basis.
Finally, the Government need to give more thought to the political consequences of having a hard formula—be careful what you wish for. Every MP in England will have cases brought to them about the funding of individual schools in their constituency, and they will expect an answer from the Minister. It is inevitable that the funding of almost every school will become a political problem for the Government. That will not be good for politics and it certainly will not be good for education.