A Strong Voice for Croydon Central - Gavin Barwell MP
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Speech – value for money in education
27/09/2012 14:56:00

This morning, I spoke at a conference organised by the think tank Reform about the Government’s agenda for improving value for money in our education system – in essence, how we can continue to improve attainment during this period of austerity.

The speech was due to be given by Lord Hill but his role changed in the reshuffle and the new Minister, David Laws, was unable to make it so as Michael Gove’s PPS I was asked to step in. Anyway, here is what I had to say:

I want to start by congratulating Reform for holding this conference. As the Deputy Prime Minister made clear the other day, whoever was in government at the moment – and indeed whoever wins the next election – is going to have to take some very difficult decisions to make on public spending. The news from Spain this morning reminds us this is not just a UK phenomenon. How to do more with less, I would argue, is the key challenge for the current generation of politician’s right across the developed world.

It’s particularly important in the field of education for two reasons. First, because beyond the importance of learning for its own sake I believe that education is key to building a fairer society and if we genuinely want to tackle poverty in the long term then it is by ensuring that where you are born, where you start off in life, doesn’t determine your prospects in terms of education and beyond that in terms of career prospects. Secondly, because if the UK is to rise to the challenge of competing with the rising economies of the Far East and elsewhere then education must have an absolutely key role.

A few words at the outset on the scale of the challenge

Total public spending is still increasing in cash terms – recently leading some to argue there’s no austerity going on at all at the moment. But if you strip out debt repayment, welfare, the NHS and overseas aid then you’ll see that many other departmental spending is indeed seeing cash cuts.

The Government has protected school funding at flat cash per pupil for the duration of the spending review period, with the Pupil Premium on top of this worth an additional £2.5bn by 2014-15. You could definitely argue that in the current climate, this is – in relative terms - a very generous settlement for our children.

But with demographic pressures, and as an outer London MP seeing huge demands in primary school places, inflation and the demand for pay increases that we’ll see once the public sector pay freeze finishes; we shouldn’t kid ourselves that it is not also in absolute terms a challenging time.

The key argument that I’d like to make is that austerity need not mean worst outcomes.

Indeed, it’s important that we do not see this as being about cost cutting for its own sake - it is about making savings where we are able to so that we can invest more in teaching and learning. Schools that are committed to continuously improving the value for money of their spending often tell us that what they’ve done has had a positive impact on their pupils’ performance.

Raising attainment is not primarily just down to money. Of course money spent in the right way makes a difference but it is equally true that throwing money at a problem doesn’t on its own necessarily solve it.

According to the Office for National Statistics, total Government spending on education soared from just over £35 billion in 2000 to nearly £64 billion - nearly twice as much in cash terms - in 2009.

But while all this money was being pumped into the system, our performance relative to our key competitors declined. The OECD’s respected PISA study found that between 2000 and 2009 15-year-olds in England fell from 7th to 25th in reading, 8th to 27th in maths, and 4th to 16th in science.

And crucially this wasn’t because other countries were increasing spending even faster or because other countries were increasing spending faster but because although we were improving other countries were improving faster.

The OECD report found that:

“Expenditure on primary, secondary and post-secondary non-tertiary students by educational institutions increased by 50% between 2000 and 2009, even as student enrollments declined by 11% over the same period. As a result, expenditure per student increased by 68% between 2000 and 2009, the 8th highest increase among 29 countries with available data. At the same time, however, results from PISA show no improvement in student learning outcomes”.

Of course every extra penny helps but I believe that it is the quality of teaching and of school leadership in particular that is the key to improving attainment alongside a lack of tolerance of low-performance in schools.

One of the arguments that I hope that the Government will make is from talking generically about academies and free schools - which in my experience as a local MP are terms that most voters don’t understand – to talking about school leadership which is a quality that all parents understand.

I want to give an example from my constituency. There was a school called Ashburton, geographically in the centre of my constituency. The Labour council, who used to run Croydon, during their period of office, completely rebuilt the school. This was right as the school was in dire need of repair – but crucially this had no impact on the attainment of pupils at the school.

When a Conservative administration followed, one that I was a part of, we closed the school and turned it into an academy – now the Oasis Shirley Park. In just two years of exam results we have seen a huge transformation in pupil attainment. A change in the leadership and the ethos of the school has had an enormous impact on the perception that parents have of the school so much so that now local parents are choosing to send their children to that school instead of seeking out better alternatives further away.

This is not just anecdotal - research by the National Foundation for Educational Research found that pupils at Building Schools for the Future schools made less progress than other pupils, even when pupil and school-level prior attainment is taken into account.

Another project that has had a transformative effect on education, at relatively low cost to the tax-payer, is Teach First. It is now the 4th most popular graduate employer in just 10 years. Over half of the 1,500 Teach First members placed in our most deprived schools are still in the profession. Almost 1,000 are in the 2012 cohort. Research by the University of Manchester has demonstrated a strong correlation between this and improved GCSE results.

If we accept the argument that delivering value for money does not mean lowering outcomes, we must ask: where does the responsibility lie for delivering greater value for money?

At the school level, achieving overall value for money means:

• spending wisely to ensure the inputs needed to deliver education are being secured in a way that makes the most of the money available;

• using those inputs efficiently to provide the best education possible; and

• ensuring that education is improving pupil attainment.

The Government believes passionately in greater school autonomy so we will not dictate how schools should improve their efficiency but we will ensure that they can easily access the advice and support they need.

Schools’ financial management capability has improved very significantly in recent years. There are now something like 12,000 school business managers operating across most secondary schools and 40-45% of primary schools.

The Schools White Paper 2010 stated that obtaining the services - shared or full time - of a high quality school business manager should be a priority for all governors and head teachers, unless there is someone already in the management team with the relevant skills to undertake the role. The level at which they operate varies greatly from basic administrative support to providing strategic business leadership across a family of schools.

Research is very clear that well qualified and well deployed school business managers can save up to 35% of head teachers’ time and between 5 and 10% of school resources, which has to be a good return on investment.

Governors have an important role in supporting and challenging head teachers. Their key responsibilities include:

• setting financial priorities for the school

• oversight of the school budget, including considering and approving the annual budget plan and any proposed revisions;

• making sure accurate accounts are kept and ensuring accountability; and

• determining the staff complement and a pay policy for the school.

The Government believes that it is essential for governing bodies to have adequate financial skills, or have access to these skills, to ensure that they meet their responsibilities for the financial management of the school. Maintained schools can now establish smaller governing bodies with appointments primarily focused on skills, including financial skills.

Local councils and Academy Trusts are ultimately responsible for ensuring good value for money in the use of the public funds delegated to them. In the case of local councils, this includes the funds that they then delegate to maintained schools - however, it is important that individual head teachers and governors have the day-to-day responsibility and are empowered to make the decisions that secure good value for money.

Local councils are responsible for overseeing financial management in maintained schools - the Department of Education does not have a direct relationship with schools and receives assurances through local authorities.

Academy Trusts have to produce and submit annual, externally audited accounts to the Educational Funding Agency. The audited accounts of each academy trust must be published openly to ensure proper transparency of how resources have been used. This is much more rigorous than for local authority maintained schools, reflecting their additional freedoms and their direct funding from the Department.

The role of Government, as I’ve argued, is not to dictate how schools should be spending, but to empower all schools to achieve value for money across all of their spending.

One obvious way the Government can help is to get rid of unnecessary bureaucracy:

• We’ve abolished eight education quangos, reducing staff in the Department’s quangos by 26%.

• We’ve slashed guidance to schools from 28,455 pages to 6,978, a cut of 75.5%. Guidance on ‘improving pupil performance’ is down from 2,500 pages to just 174. My favourite has to be the ironically titled 200-page volume ‘Reducing Bureaucracy’ that we’ve cut altogether.

But it’s not just about Government getting out of the way where it’s not needed. It’s about ensuring that schools have access to the support they need by:

• enabling schools to compare their spending through the Schools Financial Benchmarking website and publishing schools’ income and expenditure data alongside the key attainment indicators which I hope will provoke a much wider debate on the link between attainment and expenditure;

• offering a “one-stop-shop” website for efficiency tools and support;

• developing a bank of case studies to guide best practice on the ground

• providing procurement advice for all major areas of school spend e.g. energy, photocopiers and administrative supplies on the Department’s website as well as referring schools to other joint public sector procurement frameworks and offering online tools and e-learning for procurement such as BuyWays; and finally

• introducing the Schools Financial Value Standard, which is designed to help governing bodies ensure effective financial management in their schools and to give assurance to their local authority that they have secure financial management in place.

I wanted to end by touching on four or five other areas where I believe the Government is helping schools to raise their attainment despite the financial pressure that they are under.

• Teacher training – raising the bar for the entrance into the profession, ensuring that people that have been trained are spending more time in the classroom, and ensuring that outstanding schools have much more of a role in driving training than they have done in the past.

• Teachers pay – which I’m conscious is a sensitive subject. There is a review underway at present but there is evidence that automatic pay progression means that there is a poor link between performance and reward. Certainly from my own experience as a Chair of Governors, there is also a poor awareness of how increases in salary work. In addition national pay scales mean schools in some parts of the country struggle to recruit and retain good teachers, while others may be paying salaries which are significantly above local professional pay levels.

• I want to say a few words about the Pupil Premium. If we’re passionate about raising attainment, then the focus must be on those young people from backgrounds who are struggling to achieve the necessary qualifications – and it is for that reason that the Government has introduced the Pupil Premium.

We have given schools the freedom to use the additional funding as they see fit in innovative ways. However, it is vital they use it to boost results for the most disadvantaged pupils.

The Premium has only been in place for one year, but £1.25bn has already been distributed to schools. This will grow throughout the Parliament so that, by 2014-15, some 7,000 schools — getting on for one-third of all state primary and secondary schools — will each be in receipt of more than £100,000 of pupil premium cash.

The recent OFSTED report identified, and I quote: “in some schools it was clear to inspectors that the spending was not all focused on the needs of the specific groups for whom it was intended”. The Government has no intention on micromanaging how this money should be spent but more must surely be done to ensure it is used on disadvantaged pupils.

A few words about capital – the Building Schools for the Future initiative that the Government inherited has been well covered today. It was over budget (National Audit Office report in 2009 found costs up by about 20 per cent in real terms), behind schedule, bureaucratic (eight stages of approval before construction could begin, taking about 30 months) and large amounts of money spent on non-building costs.

The current Government’s approach focuses money where it is most needed – the priority school building programme prioritises dilapidated buildings and deals with the demographic pressures that have not previously had the attention that they deserved. Despite the tough decisions that we have taken, we will still be spending more on education capital each year on average than the previous Government did in their first two terms - a total of £17 billion over the spending review period. Procurement time has been reduced by up to 14 months, construction will begin in half the time and anticipated project costs are 30% lower via standardised designs.

But value for money, as I said at the outset, is not just about cutting costs. I have recently learned that of 261 schools on the Priority Schools Building Programme only 69 were included in the planned BSF schemes. In other words there were many schools, in very urgent need of repair, that were not going to get any funding under that scheme in anything like the medium term.

Finally a few words on three other topics.

• On early years - there is very strong evidence that children from the most deprived backgrounds are up to a year behind when they actually start at school. So if you’re passionate, as I am, about closing the attainment gap in our education system, and about building a fairer society, then the real focus has to be about early years rather than the debate which has achieved a lot more media coverage: higher education tuition fees.

• The Government is committed to providing 15 hours of free childcare for all two year-olds from the poorest 40% of households by September 2014.

• On raising expectations – we’ve had the announcement recently about reforming our GCSE system. One of the points that struck me in a previous seminar that I attended was that a number of teachers from schools that have recently changed from the GCSE to the iGCSE were arguing that, counter intuitively, when you raise the bar of what you expect of our young people then you actually see an improvement in performance. That issue of raising expectation, and altering what we expect, can help to deliver improved attainment. Likewise, the Government is raising its expectation in terms of the way Primary Schools and Secondary Schools are run.

So in conclusion, ministers do not in any way underestimate the challenges facing our schools, and facing many of our public services, as we try to get the nations finances back in order. But the evidence is that there are plenty of things that we can do to ensure that we deliver more in terms of outcomes for less money, in real terms.

The way to do that, we believe, is by giving schools more freedom; increasing the already high quality of our teaching profession; by being intolerant of low performing schools; by cutting back unnecessary bureaucracy; by ensuring that at a national level the government is providing the advice and support that schools need; by focusing resources on to those from the most deprived background and early years; by raising expectations and by reforming the system by which we allocate capital funding to ensure that we get better value for money.

We believe that we have literally left no stone left unturned in helping schools to cut costs while raising outcomes. If anyone here thinks there is anything else the Government could be doing then I would be very pleased to take your comments back to ministers.

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