Statement by Justine Greening: schools update

This Government believe that all children should have an education that unlocks their potential and allows them to go as far as their talent and hard work will take them. That is key to improving social mobility.

We have made significant progress. Nine out of 10 schools are now good or outstanding, the attainment gap is beginning to close and we have launched 12 opportunity areas to drive improvement in parts of the country that we know can do better. But that has all been against a backdrop of unfair funding. We know that the funding system is unfair, opaque and out of date, and that means that although we hold schools against the same accountability structure, wherever they are, we fund them at very different levels. In addition, resources are not reaching the schools that need them most.

School funding is at a record high because of the choices we have made to protect and increase school funding even as we faced difficult decisions elsewhere to restore our country’s finances, but we recognise that at the election people were concerned about the overall level of funding for schools as well as its distribution. As the Prime Minister has said, we are determined to listen. That is why I am today confirming our plans to get on with introducing a national funding formula in 2018-19. I can announce that that will now be supported by significant extra investment into the core schools budget over the next two years.

The additional funding I am setting out today, together with the introduction of a national funding formula, will provide schools with the investment they need to offer a world-class education to every child. There will therefore be £1.3 billion for schools and high needs across 2018-19 and 2019-20 in addition to the schools budget set at spending review 2015. This funding is across the next two years as we transition to the national funding formula. Spending plans for the years beyond 2019-20 will be set out in a future spending review.

As a result of this investment, core funding for schools and high needs will rise from almost £41 billion in 2017-18 to £42.4 billion in 2018-19. In 2019-20 it will rise again to £43.5 billion. This represents £1.3 billion in additional investment, £416 million more than was set aside at the last spending review for the core school budget in 2018-19, and £884 million more in 2019-20. It will mean that the total schools budget will increase by £2.6 billion between this year and 2019-20, and per pupil funding will now be maintained in real terms for the remaining two years of the spending review period to 2019-20.

For this Government, social mobility and education are a priority. The introduction of the national funding formula—from which previous Governments shied—backed by the additional investment in schools we are confirming today will be the biggest improvement to the school funding system in well over a decade.

I said when I launched the consultation last December that I was keen to hear as many views as possible on this vital reform. I am grateful for the engagement on the issue of fairer funding and the national funding formula. We received more than 25,000 responses to our consultation, including from Members from across the House. We have listened carefully to the feedback we have received and we will respond to the consultation in full in September, but I can today tell the House that the additional investment we can make in our schools will allow us to do several things, including increasing the basic amount that every pupil will attract in 2018-19 and 2019-20. For the next two years, this investment will provide for an up to 3% gain a year per pupil for underfunded schools, and a 0.5% a year per-pupil cash increase for every school. We will also continue to protect funding for pupils with additional needs, as we proposed in December. Given this additional investment, we are able to increase the percentage allocated to pupil-led factors; I know hon. Members were keen for that to happen. This formula settlement to 2019-20 will provide at least £4,800 per pupil for every secondary school, which I know Members in a number of areas will particularly welcome. The national funding formula will therefore deliver higher per-pupil funding in respect of every school, and in every local area.

These changes, building on the proposals that we set out in December, will provide a firm foundation as we make historic reforms to the funding system, balancing fairness and stability for schools. It remains our intention that a school’s budget should be set on the basis of a single national formula, but a longer transition makes sense to provide stability for schools. In 2018-19 and 2019-20, the national funding formula will set indicative budgets for each school, and the total schools funding received by each local authority will be allocated according to our national fair funding formula, transparently, for the first time.

Local authorities will continue to set a local formula to distribute that funding, and to determine individual school budgets in 2018-19 and 2019-20, in consultation with schools in the area. I will shortly publish the operational guide to allow them to begin that process. To support local authorities’ planning, I also confirm that in 2018-19, all local authorities will receive some increase to the amount that they plan to spend on schools and high needs in 2017-18. We will confirm gains for local authorities, based on the final formula, in September. The guide will set out some important areas that are fundamental to supporting a fairer distribution through the national funding formula. For example, we will ring-fence the vast majority of funding provided for primary and secondary schools, although local authorities, in agreement with their local schools forum, will be able to move limited amounts of funding to other areas, such as special schools, where this better matches local need.

As well as this additional investment through the national funding formula, I am confirming our commitment to doubling the physical education and sports premium for primary schools. All primary schools will receive an increase in their PE and sports premium funding in the next academic year.

The £1.3 billion additional investment in core schools funding that I am announcing today will be funded in full from efficiencies and savings that I have identified in my Department’s budget, rather than higher taxes or more debt. That of course requires difficult decisions to be taken, but it is right to prioritise schools’ core funding, even as we continue the vital task of repairing the public finances. I am maximising the proportion of my Department’s budget that is allocated directly to frontline headteachers, who can then use their professional expertise to ensure that the money is spent where it will have the greatest possible impact.

I have challenged my civil servants to find efficiencies, just as schools are having to. I want to set out briefly the savings and efficiencies that I intend to secure. Efficiencies and savings across our main capital budget can, I believe, release £420 million. The majority of this will be from healthy pupils capital funding, from which we can make savings of £315 million. This reflects reductions in forecast revenue from the soft drinks industry levy. I will be able to channel the planned budget, which remains in place, to frontline schools, while meeting our commitment that every single pound of England’s share of spending from the levy will continue to be invested in improving children’s health; that includes £100 million in 2018-19 for healthy pupils capital.

We remain committed to an ambitious free schools programme that delivers choice, innovation and higher standards for parents. In delivering the programme, and the plans for a further 140 free schools announced at the last Budget, we will work more efficiently to release savings of £280 million up to 2019-20. This will include delivering 30 of the 140 schools through the local authority route, rather than the free schools route. Across the rest of the Department for Education resource budget, which is more than £60 billion a year, I will reprioritise £250 million in 2018-19 and £350 million in 2019-20 to fund the increase in core schools budget spending that I am announcing today. I plan to redirect £200 million from the Department’s central programmes towards frontline funding for schools. Although these projects are useful, I strongly believe that this funding is most and more valuable in the hands of headteachers.

Finally, alongside the extra investment in our core schools budget, it is vital that school leaders strive to maximise the efficient use of their resources, to achieve the best outcomes for all their pupils and to best promote social mobility. We already provide schools with support to do this, but we will now go further to ensure that that support is used effectively by schools. We will continue our commitment to securing substantial efficiency gains over the coming years. Good value national deals that procure better value goods and services on areas that all schools spend money on and purchase goods in can save significant amounts. They are available under the deals based on our existing work such as on insurance or energy. Schools can save an average of 10% on their energy bills if they use a national deal. We will expect schools to be clear if they do not make use of these deals and consequently have higher costs.

Across school spending as a whole, we will improve the transparency and usability of data so that parents and governors can more easily see the way in which funding is being spent, and understand not just educational standards in schools, but financial effectiveness too. We have just launched a new online efficiency benchmarking service that will enable schools to analyse their own performance much more effectively. We recognise that many schools have worked hard up to this point to manage cost base pressures on their budgets, and we will take action this year to provide targeted support to those schools where financial health is at risk, deploying efficiency experts to give direct support to those schools.

The significant investment we are making in schools and the reforms we are introducing underpin our ambition for a world-class education system. Together, they will give schools a firm foundation that will enable them to continue to raise standards, promote social mobility, and give every child the best possible education and the best opportunities for the future.

4.32 pm

Angela Rayner (Ashton-under-Lyne) (Lab)

I thank the Secretary of State for the slight advanced sight of her statement.

I will always be the first to welcome new money for schools. After all, I have spent a year asking the Secretary of State to give our schools the funding they need. It is nice to know I am finally getting through to her. I thank parents, school leaders and teachers across the country for all their work in pushing this issue up the political agenda. Both the Secretary of State and I know that this would not be happening today without them. But, sadly, today’s statement raises more questions than it answers.

I welcome the £1.3 billion announced today, but will the Secretary of State confirm whether it will protect per pupil budgets in real terms, or just the overall budget? Astoundingly, this has all been funded without a penny of new money from the Treasury. Perhaps the Chancellor did not want to fund schools, and thought that teachers and teaching assistants were simply more overpaid public servants. I wonder whether the Secretary of State agrees with him. Does her decision to seek savings from the free schools programme mean that she finally agrees with Opposition Members who believe that the programme has always been inefficient? It has always been more expensive than Ministers hoped it would be, so the idea that hundreds of millions of pounds can now be saved seems like a bad joke. Will she simply be honest with the House and tell us all exactly how much money will be cut, from which spending items and who will lose out as a result?

I know that Conservative Members are in full retreat from their own manifesto, but I do not see how this £1.3 billion can possibly fit with it. We were promised £4 billion—[Interruption.]

Mr Speaker

Order. A kind of group hysteria takes over. Mr Chalk, you are usually a very understated fellow—rather a gentlemanly type, I had always thought. Calm yourself. And you are sitting next to a very senior Member—Prince Andrew over there—who normally behaves as the very embodiment of dignity. Anyway, I am sure you will recover your composure in a minute. You should watch a few Federer matches; you will learn something about composure.

Angela Rayner

Conservative Members are in full retreat from their own manifesto. We were promised £4 billion only a few weeks ago, and now we are getting only £1.3 billion. Can schools expect anything else in future, or is this yet another broken promise?

The Conservative manifesto promised a free breakfast for every primary school pupil. First, the Secretary of State said it would cost £60 million, leaving parents across the country wondering how you can provide breakfast at under 7p per meal. Then she said that it would be £180 million, but that it would go only to the most disadvantaged pupils. She has had plenty of time to get her figures straight, so can she tell the House whether this is still her policy? How many pupils will benefit, and how much it will cost?

The Secretary of State said that the full funding formula has been delayed again, with local authorities playing a role in setting budgets until 2020. Is this because she has finally acknowledged the role local authorities have to play? Or has she simply realised that to implement her plans fully she would need to pass primary legislation, and that her Government are so weak and wobbly that they cannot even get new money for schools passed through this House?

What the Secretary of State has announced today is nothing more than a sticking plaster. Per pupil funding will still fall over this Parliament unless further action is taken urgently. I will welcome the opportunity to protect budgets for our schools, but this statement alone will do nothing of the kind.

Justine Greening

There is only one party that is in full retreat from its manifesto, and it is certainly not the Conservative party. We heard over the weekend that the promise to students was not worth the paper it was written on. I think it was one of the most dishonest pieces of electioneering I have seen in many, many years. Our young people deserve better than to be peddled some snake oil propaganda that proves to be not true.

I am pleased that the hon. Lady recognises this extra investment. I am shocked to hear that the Labour party has now turned its head on fair funding and suggested it might have voted against introducing the fair funding approach of a hard formula. I think many schoolteachers will be deeply concerned by that change of stance—yet another one.

The hon. Lady talked about getting through to the Conservative party in relation to school funding, but we have been funding schools. I think the message that has not been getting through to the Labour party is that simply loading up more taxes on people and more debt on our country for the young people of the future is not a sustainable way to run the public finances. What the hon. Lady’s response shows is that Labour has learned nothing in its time in opposition and has, in fact, gone backwards.

The hon. Lady asked some questions. I can confirm to her that we are, indeed, saying that we are going to have per pupil, real-term protection for the next two years. In relation to the free schools programme, what I was actually setting out—I do not think she properly understood it—was that we are protecting it, but we think we can finance it in a more cost-effective way.

She then talked about the £4 billion, not realising, I think, that it was £4 billion over four years. I have set out £2.6 billion over two years. I think she will recognise that that is bringing the process forward at a faster pace, which is something to be welcomed.

One of the hon. Lady’s few questions—she did not have a lot of questions to ask—related to the approach we are taking to local authorities. She may have realised—I am not sure from her question—that we were always going to have local authorities use an approach involving a local formula in 2018-19, as it was due to be a transition year anyway. We are simply saying that we want that to extend for a longer time period. Given the historic nature of this change, it is right that we take the time to make sure that we work at local level to allow local authorities to adjust their funding to start matching the funding formula. However, schools locally will of course be able to see what amount they should be getting. I have no doubt that teachers, parents and governing bodies will raise questions for local authorities that deviate significantly away from the formula settlement that schools think they are entitled to have.

This a strong announcement of additional money combined with making sure that our schools budget is, for the first time in a generation, spread fairly across our schools and our children wherever they are growing up in this country. I hope that the House will broadly welcome it.

Several hon. Members rose—

Mr Speaker

Order. I call the Chair of the Education Committee, Mr Robert Halfon.

Robert Halfon (Harlow) (Con)

Thank you, Mr Speaker.

This news will welcomed by schools, teachers and parents, especially given the additional costs facing schools. In addition to moving money from healthy pupil programmes, my right hon. Friend said that she is redirecting £200 million from the Department’s central programmes to the frontline in schools. Which programmes are included?

Justine Greening

We will now go through a process of looking across programmes to identify the £200 million. Across an entire departmental budget of £60 billion, it is reasonable to make sure that my Department and its civil servants have to make efficiency savings in the same way—my right hon. Friend set this out—as we are expecting schools to do. I believe that we can and should do that. The alternative response—simply to dip into taxpayers’ pockets every time we want to look at how we increase frontline school spending—is not only unsustainable but wrong when we can do a better job using the money we have got.

Lucy Powell (Manchester Central) (Lab/Co-op)

While I welcome this announcement of extra money today, is not the fact that the Government got themselves into such a mess over schools funding an indication of the fact that they have not been straight with people all along—and I am not sure they are being entirely straight with people now? The Secretary of State talks about an increased schools budget but fails to mention that the number of pupils has increased significantly. Is it not the case that, even taking into account the money announced today, when considering per pupil funding the real-terms cuts that schools have faced since 2015 is £2.8 billion, with additional cuts of £8.9 billion, so there is still a massive shortfall? It is about time that the Government started being straight with the figures on the reality of what schools are facing on the frontline.

Justine Greening

I think we are setting out our figures very transparently. The numbers given on the website about school cuts have been worrying parents, but one thing I do not expect to happen as a result of today’s funding announcement is for those numbers to be updated because it is far easier just to continue to peddle out-of-date data. The hon. Lady asked about the numbers of pupils. She is of course quite right, and that is why I am sure she will welcome the fact that I am saying that real-terms per-pupil funding will be maintained.

Mr Graham Brady (Altrincham and Sale West) (Con)

This is very good news for schools as they prepare to break up for the summer holidays. May I thank my right hon. Friend for engaging so constructively with colleagues across the House to make this progress? I particularly welcome her focus on bringing up the worst-funded schools, which has been so critically important for so long.

Justine Greening

This is a fundamental change to how we fund our schools and it is extremely challenging to get right. We held a very long consultation and took our time because we want to make sure that this work can take place on the ground. I appreciate that a formula needs to work for all colleagues, not just some, in very different communities up and down the country. That is why we have been listening to what people had to say, and we have reflected that today.

Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)

On Friday I visited Airedale Academy, which this year alone has already had £140,000 cut from its budget. That amounts to £190 per child. Was there anything in the Secretary of State’s statement to indicate that it would get any of that money back? Despite being in a deprived coalfield area, our schools are being hit heavily by her funding formula. She has just said that schools will lose. They will get only a 0.5% cash increase per pupil, so will she confirm that that means that a lot of kids will still have a real funding cut? How many pupils will still face a real cut to their funding next year?

Justine Greening

I think that the right hon. Lady will welcome a number of things in the statement. Indeed, she has just pointed out that we will introduce a 0.5% increase per pupil for those schools that are currently above the formula, as opposed to those that need to catch up through additional funding. The position taken by both her party and mine was that there would be no cash losers, and we are going beyond that today. In other words, her school will receive more than it would have done had her party won the election.

Nicky Morgan (Loughborough) (Con)

Clearly, more money going to the frontline of schools is a very good thing. Obviously, the devil will be in the detail of the funding formula, which I know well having spent many hours poring over it myself. I want to pick the Secretary of State up on two things. First, on the increase to the percentage allocated to pupil-led factors, she will be aware that many people were unhappy with the overall percentage allocated to basic per-pupil funding. Secondly, many schools in Leicestershire and elsewhere have been historically underfunded for many years, but the allocation of £4,800 per pupil is not the same as the £6,000 per pupil that schools in other parts of the country will get. I fully appreciate that the Secretary of State has to operate within the constraints of responsible public funding, but schools in Leicestershire really need that historical underfunding to be corrected at some point.

Justine Greening

My right hon. Friend will no doubt welcome the fact that today’s announcement means that there will be an increase in funding through core pupil-led factors. I felt it was also right to protect the amount that was already going to children with additional needs, because we want them to catch up. On the overall amount, I assure my right hon. Friend that the formula takes into account the different cost bases in different parts of the country. Today’s announcement means not only that schools will get more funding, but that they will catch up faster because of the 3% increase for two years, which replaces the previous proposal of 3% and then 2.5%.

Liz Kendall (Leicester West) (Lab)

It is very unclear whether the Secretary of State has dealt with the underlying problems with the funding formula. Nine schools in some of the most deprived parts of Leicester West would have lost out because the Government’s initial proposals drastically reduced the amount of money allocated according to deprivation.

Justine Greening

indicated dissent.

Liz Kendall

The Secretary of State shakes her head, but that is what happened in my constituency. Has the underlying basis of the funding formula been changed, or are schools in the most deprived areas still going to get a bigger cut, harming not helping social mobility?

Justine Greening

We will set out the detail of the national funding formula in September, but it is not true that the deprivation amounts were cut. In fact, as I have said, I actively made sure that they were protected. The hon. Lady will no doubt welcome the fact that, as I said to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), the schools in her community that were already well funded are being protected more than they would have been had her party won the election.

Philip Davies (Shipley) (Con)

I welcome the Secretary of State’s statement and applaud her for listening to the concerns that many of us have expressed about the funding formula for our local schools. At the end of the day, what really matters to schools is the budget that they are going to get. When will schools be told exactly what this will mean for their individual budgets? That is what headteachers, teachers, parents and governors want to know, so when will that information be disseminated? Can she confirm that the promise not to cut funding from any school applies to special schools as well as to mainstream schools?

Justine Greening

Briefly, the local authorities will now go through a process of setting a local formula, but we will confirm the allocation notionally to each school in September. That is a significant process, which involves confirming allocations for around 24,000 schools. Today, I have set out the funding not just for the core schools budget, but for high needs, and I hope that that is good news for my hon. Friend.

Andrew Selous (South West Bedfordshire) (Con)

Schools in central Bedfordshire that currently get £4,314 per pupil will be very grateful to learn of the new figure of £4,800 per pupil. What can the Secretary of State do to spread best practice across academies regarding covering lessons when teachers are not ill? Some of my academies do this really well. They timetable a bit of extra time in so some staff can cover other staff. Could she have a word about spreading that best practice across all academies so that children do not miss out on lessons?

Justine Greening

I certainly will. One of our biggest challenges and opportunities is to enable best practice to spread more rapidly around our school system. That is one reason why I have introduced so-called research schools, which can be hubs in their local area for disseminating best practice and ensuring that it spreads quickly.

Mr Ben Bradshaw (Exeter) (Lab)

Will the Secretary of State confirm that protecting per-pupil funding from next year does nothing to reverse the cuts that are leading schools in Exeter to lay off teachers and staff now? What assessment has she made of the impact of raiding her own capital budget on vital improvements, for which many schools in my constituency will now have to wait longer?

Justine Greening

The funding I have set out is indeed for 2018-19, which is when the national funding formula will be introduced. In relation to capital, I simply believe that we can make better use of our budget. Significant funding has been set aside from the sugary drinks industry levy, and we have been able to retain that additional money despite the fact that receipts from the levy were slightly lower than we originally expected. I hope hon. Members welcome the fact that I am therefore pushing that to the frontline.

Mr Speaker

Mistakenly, because I was trying to do two things at once, I called two Government Back Benchers in succession. I would not want there to be a lingering sense of resentment on the Opposition Benches, so I call Mr Christopher Leslie.

Mr Chris Leslie (Nottingham East) (Lab/Co-op)

Thank you, Mr Speaker. I want to press the Secretary of State a little on the point that the right hon. Member for Harlow (Robert Halfon)—the new Chair of the Select Committee on Education—and some of my hon. Friends have mentioned: where in the Department is the money coming from? It sounds as though the Secretary of State will be robbing Peter to pay Paul from within central programmes. Will she set out a bit more clearly which of these central programmes will be cut: the teaching and leadership college, the standards agency, the mentoring programme, the longer school day programme, the 16-19 budget, university technical colleges or the apprenticeships programme? Or is she promising not to cut any of them?

Justine Greening

It is important to look across the piece to gain additional efficiencies from the Department. The hon. Gentleman talks about cuts, but the reality is that we have to take every single pound of taxpayers’ money and get the most out of it. It has struck me how many different pots of money there are across the Department, and we have to make them work more strategically. In doing so, we can unlock funding that can go directly to the front line of schools.

Anna Soubry (Broxtowe) (Con)

I welcome the statement and give the Secretary of State 10 out of 10 for progress and a huge gold star for listening to the concerns of Members on the Government Benches and, no doubt, on the Opposition Benches. This morning, I was at the George Spencer Academy, an outstanding academy in my constituency—that is not my view, but the Ofsted rating. The reality is that it will not be replacing eight teachers and a librarian because of the difficulties with its budget. I hope that today’s announcement will go some way towards rectifying that.

The complaint of that academy is not the formula, but its rising costs. There are huge rises in pension and national insurance contributions, which nobody begrudges. Although it is a small part of the piece, I urge the Secretary of State to look at why local authorities are putting the apprenticeship levy on our schools. That cannot be right. It is not a lot of money, but it is very meaningful for school budgets.

Justine Greening

It is important to get on with making more apprenticeships available for young people, including in sectors like education, but I recognise what my right hon. Friend says. It is important that my Department does more to work proactively with schools to help them deal with some of the cost base pressures they have been facing. I feel that best practice can be spread more effectively through schools when they are working out ways to do smart timetabling and smart procurement deals. We need to do that much more systematically in the future and if we do, I believe that we can get much more out of the budget we already have.

Mr Speaker

Order. Pursuant to the plethora of points of order that I took on the subject of HS2 from right hon. and hon. Members on both sides of the House immediately after questions, I can inform the House that the Secretary of State for Transport would like to make a statement at the moment of interruption—that is to say, at 10 pm—this evening. I have acceded to that request on the basis that the official Opposition are content to hear the statement at that time, and I have received that assurance. There will be a statement, I believe entitled “HS2 Update”, at the moment of interruption tonight. I hope that that is helpful to the House.

Clive Efford (Eltham) (Lab)

In December last year, the National Audit Office said that the Secretary of State’s Department was expecting 8% cuts, which is equivalent to £3 billion, in our school budgets—no one else but her Department. The figure was £24 million across Greenwich schools, which is the equivalent of 672 teachers. She went into the last general election saying that my schools were overfunded. Does she still believe that?

Justine Greening

I do not believe we did say that, but what I can say is that the hon. Gentleman’s schools will now get a better settlement under the national funding formula than they would have got under his party.

Mr Speaker

I know that the House will want to be well informed. The moment of interruption would ordinarily be expected to be 10 pm on a Monday, but it is not certain to be at 10. It could be a bit earlier and it could be a bit later. The point that colleagues need to have lodged in their little grey cells is that the statement will come at the moment of interruption. Keep an eye on the annunciator—always a very good piece of advice to proffer to new Members.

Antoinette Sandbach (Eddisbury) (Con)

Parents and pupils in my constituency will be delighted with the minimum funding of secondary school education, which will represent a substantial increase in secondary school funding. However, I would be grateful if the Secretary of State outlined the minimum level of funding for primary school pupils, which was not addressed in her statement.

Justine Greening

My hon. Friend is right. We will set out more of those details in September. Today, we are setting out the fact that we recognise that there is an issue of minimum funding levels in secondary education, and we would expect that to be reflected in primary education.

Maria Eagle (Garston and Halewood) (Lab)

Figures from the Secretary of State’s Department showed that 21 schools in my constituency were to lose out under her plans for the national funding formula before her announcement today. I am concerned that they still will, so will she guarantee today that those schools that were going to lose out on the basis of the formula no longer will, and that they will actually see gains?

Justine Greening

I think I have been very clear that every school will see gains from the announcement that I have made today, which I hope is good news. It is a reflection of the need to strike a balance between bringing up traditionally underfunded schools and recognising that those receiving higher funding need help to some extent to get on to the national funding formula.

Geoffrey Clifton-Brown (The Cotswolds) (Con)

I warmly welcome today’s announcement from my right hon. Friend. This is a real moment of celebration for those of us who have been campaigning with the f40 Group for years for a proper fair funding formula. Will she confirm to my governors and headteachers in Gloucestershire that by 2020 all schools currently receiving £3,800 per pupil will be receiving £4,800?

Justine Greening

I have set out that we will have a minimum of around £4,800, which will be transitioned in over these two years. That is good news, and I pay tribute to my hon. Friend who has been a tireless campaigner on fair funding. He has done an outstanding job of being very clear with me about his local community concerns and also his desire to see fair funding. It is responding to colleagues like him that has led to the statement today.

Sir Edward Davey (Kingston and Surbiton) (LD)

The Secretary of State will know that the National Audit Office said just a few months ago that school budgets needed an extra £3 billion by 2020 to avoid cuts. How does she square that figure with the £1.3 billion that she has announced today over two years? She also knows that the high needs budget—spending on special educational needs—is rising faster than inflation and faster than per pupil numbers. What in this statement will deal with that?

Justine Greening

In answer to the right hon. Gentleman’s first point, we are maintaining real-terms funding per pupil, as I have set out today. That sits alongside the other work that we are doing with schools to enable them to unlock efficiencies from the investment that is already there. I have also set out further additional funding for high needs today, which I hope he will welcome, given his long-term interest in this area.

Sir Peter Bottomley (Worthing West) (Con)

I hope that my right hon. Friend will accept that the West Sussex MPs who have been working with heads and parents will welcome the progress in her statement. May I say on behalf of the Back Benchers, perhaps the Parliamentary Private Secretary and the Minister for School Standards that we have all worked together and hope to continue doing so to get even more progress in future?

Justine Greening

It has indeed been a team effort to work out how we can best bring forward what is a very difficult thing: a national funding formula that broadly works for many, many different schools across our country, wherever they are, and one that is fair. We have more detail to set out in the autumn, but I hope I have given a clear signal to the House today that we are moving in the right direction and will indeed take this step forward to ensure fair funding.

Tony Lloyd (Rochdale) (Lab)

The Secretary of State’s partial U-turn is bound to be welcome, but given the extraordinary cost pressures that many schools across the borough of Rochdale already face, can she give me a guarantee that none will be forced to cut teachers or teaching assistants over this two-year period?

Justine Greening

There will be higher per-pupil funding in respect of every school in every local area. What we are saying is that we want to be able to give more money to headteachers to enable them to take the decisions that they think are in the best interests of their schools. I have spent many years as a school governor, and I know the work that goes on to make the most of the budgets. I also want to challenge my own Department to make some efficiencies so that we can put that money in the hands of headteachers to spend on the frontline in schools.

Mr William Wragg (Hazel Grove) (Con)

I welcome the additional funding for Stockport schools, and I also welcome a very listening Secretary of State. Will she prove her mettle further by taking on board the recommendations on recruitment and retention contained in the report of the Education Committee in the last Parliament?

Justine Greening

This is a vital issue. I think we have more teachers in our school system now than ever before but we need more, and we have to ensure that the teaching profession—I have always seen it as a profession—is a strong career and one in which teachers see continued professional development right the way through and one that is competitive. One of my old teachers up in Rotherham is retiring today, and I have just written him a note to thank him for 45 years of service to children in Rotherham. Teaching is an amazing vocation and one that I would recommend to anyone who cares about developing our young people for the future.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)

As other Members have pointed out, the National Audit Office and the Secretary of State’s own permanent secretary have highlighted the £3 billion of efficiency savings that schools were required to make by 2020, including £1.7 billion of savings through what her Department described as

“more efficient use of staff”.

The Secretary of State has now paraded the fact that she is giving £1.3 billion in additional investment. Can she tell us, hand on heart, that she is actually giving more money, or are those efficiency savings continuing as planned?

Justine Greening

This was clearly an announcement of more money. However, as the hon. Lady will recognise, it is important for us to work with schools not only on their non-staff budgets but on their staff budgets. When I talk to headteachers, they are keen to ensure that they are able to use the staff they have as well as they can. We will be working more proactively with schools to help them to understand how they can do that better.

Ms Esther McVey (Tatton) (Con)

I congratulate the Government on choosing to prioritise school funding, which has been such a huge issue in Tatton and throughout the country. All the Cheshire Members of Parliament have come to my right hon. Friend saying what we need for our local schools, and I therefore welcome today’s announcement. So that everyone can be clear about the position, however, will my right hon. Friend confirm that what she is saying is that there will be a higher per-pupil funding level for every pupil?

Justine Greening

Yes, indeed. We will be making that funding available to local authorities. Ultimately, local authorities will also go through a process of setting their local formulas, but the funding that we are giving them will enable them to do that.

It is fantastic to see my right hon. Friend back in the Chamber. She made a rapid start in representing her community on this issue after returning to the House. It is great to see her. She was, of course, subject to some of the nasty campaigning that I think will be debated in the Chamber later this evening.

Dr Rosena Allin-Khan (Tooting) (Lab)

On Friday, Ravenstone Primary School in Balham sent a letter to parents announcing that it was making five essential support staff go. It has also lost a deputy head. If the school had not made those cuts, it would have faced a budget deficit of more than £150,000. Will the Secretary of State pledge that schools in Tooting will be given the necessary funding to maintain current staffing levels, and will she meet me, and the fantastic head of Ravenstone, to discuss the matter in person?

Justine Greening

I pay tribute to the hard work of many teachers, a number of whom I know, in our local borough of Wandsworth, but I think we should also recognise that were that school in a different part of the country at the moment, it would have a very different funding settlement, but would be expected to deliver the same results for local children. What I am saying today is that we want some fairness in our funding formula, and what I have announced will also mean that additional money will indeed go into schools.

Kelly Tolhurst (Rochester and Strood) (Con)

I welcome my right hon. Friend’s announcement, and I thank her for all her work, but can she confirm that areas such as mine in Medway will benefit from the new funding formula? We are being charged with building historic numbers of homes in the Medway towns. We are seeing new free schools coming on line, but will we get more? Under Labour, we saw schools shut in the Medway towns.

Justine Greening

It was not just grade inflation and poor standards that we inherited from Labour; it was a schools places crisis. That is why we had to get on with building hundreds of thousands of school places for children who needed them, and that is precisely what we have been doing. This funding formula does indeed mean that my hon. Friend’s local schools will be given higher per-pupil funding, and I assure her that we will not make the mistake made by the Labour party of not planning ahead for the school places that children need in their local communities. We will ensure that they do not end up without those places.

Nic Dakin (Scunthorpe) (Lab)

The Secretary of State’s statement did nothing to address the service and consistent underfunding of 16 to 18-year-olds. Over the last two years, there was an underspend of £267 million. Will the Government commit themselves to reallocating those moneys as soon as possible, and also to addressing the underfunding of 16 to 18-year-olds in the future?

Justine Greening

The hon. Gentleman makes an important point. For too long, post-16 technical education has been put to one side; it now needs to be focused on. That is why the centrepiece of the Budget, from my perspective, was the “skills Budget” that we announced back in March. The CBI called it a “breakthrough Budget for skills”. We are now getting on with that reform, and not just by continuing to bring forward more apprenticeships, but by working with organisations such as the CBI and the Federation of Small Businesses to look at how we can bring forward reforms on T-levels so that every child who chooses to go down the technical route, rather than pursuing a purely academic education, receives a gold-standard education.

Heidi Allen (South Cambridgeshire) (Con)

I thank the Secretary of State for this great news. I have been telling my schools and constituents that she has listened, and today she has proved it. I want to ask for a couple of things. I appreciate that time is very tight and that we are due to hear more in September, but my schools are letting teachers go today. If there is any chance that we could have a heads-up on the figures before September, that would be very helpful. My area can offer expertise on efficiency, because our schools have proved to be more efficient than many across the country. Will she look again at the apprenticeship levy? It does not really work for schools.

Justine Greening

I take my hon. Friend’s point and assure her that we will be working very proactively with schools, particularly those that say they face the biggest challenges. I have put together a team of efficiency advisers who will be able to work directly with schools on the ground. I think that we can make a lot of progress in this area—we need to. I recognise her point about the cost base. It is about ensuring that our apprenticeships strategy really does give opportunities to young people in every single sector, while at the same time ensuring that we get funding to the frontline in schools, and that is what I have announced today.

James Frith (Bury North) (Lab)

I welcome more funding. Schools such as Derby High in my constituency cannot recruit teaching talent because they face the rising costs of national insurance, an ageing teaching population, the apprenticeship levy and increasing class sizes, and they need new school buildings. Will this new money be enough to address these complicated problems? Will it go far enough to provide the enrichment activities that have all but disappeared in schools, with a whole generation of children from 2010 missing out on such activities because of the imposition of austerity by her Government?

Justine Greening

I know that the hon. Gentleman shares my concern about improving educational standards in Derby, which has been a challenge for many—[Interruption.] I apologise to the hon. Gentleman for not recognising him—he is obviously the new Member for Bury North. I was going to talk about how important the opportunity area that we have set up in Derby is to me, but I can also assure him that standards in his schools are just as much a priority for me as standards in any other. Today we are trying to set out a way of ensuring that funding is fair for all schools, including the one he mentioned, but it will be complemented by additional funding, which I think he welcomes. That is part of our strategy for improving educational standards, but by no means is it all of it. It is not just about the amount of money we put into schools; it is about what we then do with it and the strategy behind it. As we have seen, education in Wales has been going backwards under Labour because it has no strategy, and as a result children are getting worse standards. We do have a strategy, which is why standards are going up.

Several hon. Members rose—

Mr Speaker

From one James to another—James from Bury to James from Braintree.

James Cleverly (Braintree) (Con)

I welcome the Government’s delivery on our manifesto commitment to ensure that no school loses out under the national funding formula—it is nice to see that at least one party takes its educational commitments at election time seriously. For clarity, can the Secretary of State confirm to the parents and teachers who were concerned about some of the scare stories that were kicking around in March this year that no school will lose out as a result of the changes in the funding formula?

Justine Greening

I believe that I can, in the sense that we are going beyond saying that no schools will lose out as a result of the formula, and are saying that every school will gain at least 0.5% additional as part of the introduction of the school formula. It is important for me to be clear that the way we are introducing it is through working with local authorities. They therefore will put their own formula—the final allocation—to schools, but we will be very clear that what we are giving them means that no school need lose out, and in fact, further than that, every school should be able to gain.

Helen Jones (Warrington North) (Lab)

Warrington is one of the lowest funded authorities in the country, yet schools in my constituency were still losing out under the funding formula the Secretary of State had proposed, and were preparing to sack teachers and teaching assistants. Can she confirm that she still does not regard these as underfunded schools, and that the 0.5% increase will not meet the costs imposed on them by staff pay rises, the apprenticeship levy and general inflation, and that pupils in those schools will still lose out?

Justine Greening

At this stage, the hon. Lady might be better off lobbying her those on her own Front Bench. What I have set out today will mean that her schools get a better settlement than they would had her own party won—disastrously, in my opinion— the last election.

Richard Drax (South Dorset) (Con)

I thank my right hon. Friend for listening to the consultation. Dorset has been historically underfunded for many years, so we are all extremely grateful for her announcement today. I have two questions. Can she guarantee to me that special needs will be met and properly funded? Also, I am afraid that I, too, do not agree with the apprenticeship levy; will she consider looking at that again?

Justine Greening

I have set out the fact that this additional funding will also in part flow into high needs, which is important. In relation to the apprenticeship levy, we are working with schools on a teaching apprenticeship, which will not only mean we can have more opportunity, but will enable those schools to be able to use that investment wisely.

Laura Smith (Crewe and Nantwich) (Lab)

Does the Secretary of State think it is right that schools in my constituency are already having to rely on donations from parents for books, stationery and other basic resources? This is not scaremongering; this is actually happening.

Justine Greening

I would respond in a couple of ways. First, we all recognise that the most important thing for parents is that standards are going up, and indeed they are, as we saw in the most recent key stage 2 results that came out last week. Also, I hope the hon. Lady will recognise that if there have been concerns about funding, this statement is a step in the right direction, because we are saying that we are going to put more into frontline schools. Additionally, I am saying we are going to fund more fairly, something that is long overdue.

Peter Heaton-Jones (North Devon) (Con)

May I mark my right hon. Friend’s homework today with a resounding tick and “VG”, and may we write in the margin a note to the effect that under her stewardship this Government are spending more on schools than the Labour party ever did? May I ask for her reassurance on a point that I have lobbied her and her Ministers on for some time? Devon has historically been underfunded, so can she assure me that today’s very welcome package means that that historical underfunding, which has existed under Governments of all colours, will be corrected? If she can do that today, I will upgrade her to a gold star.

Justine Greening

Well, I think I might be getting upgraded because I can tell my hon. Friend that this will mean additional funding for schools in Devon. I know the debate that has happened in that part of our country. If we are going to have a country that works for everyone, it is vital that regions like the south-west are able to develop their talent in the same way as any other part of our country, and Devon will indeed benefit from my announcement today.

Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)

I remain concerned about the position of the 28 schools in Liverpool, Riverside that were due to lose funding under the Government’s formula. Can the Secretary of State assure me that they will not lose any funding from any source, and would she not agree that the £200 million cut to central projects that she announced today is really cutting by the back door?