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Primary School Places (London)

My hon. Friend is right, and I am disturbed to hear about what is clearly a challenging situation for the local authority in Brent. It will need some support from the Department for Children, Schools and Families. She is also right that many local authorities are having to use modernisation funds. They are supposed to be used for developing and improving information and communication technology in existing schools, but they are being used to provide new places. That is not what the Government intended and not what the money was for, but local authorities are given no choice because they do not have the cash. We need clarity from the Government on statutory consultation. Funding needs to be in place before the statutory consultation can take place, but given the size and urgency of London's problems, Ministers need to act very quickly—action within the next two months might just be fast enough. If councils are to stand any chance of getting new permanent classes and schools ready for September 2010 or September 2011, they need ministerial decisions on financial support rapidly. Without those, councils can at best consult only on small-scale, partial and inadequate plans that they might just be able to afford from their own finances. Will the Minister address that problem in relation to all London boroughs? My information for this debate essentially comes from London Councils and other published data on birth rates. It suggests that many London boroughs are in the same pickle. London Councils tells me that 25 out of the 33 boroughs are facing capacity and capital funding problems at primary level—17 outer-London boroughs and 8 inner boroughs have reported problems. Already, at least 12 London boroughs are using large numbers of temporary classrooms. Enfield and Merton have predicted that more than 3,000 reception-aged children will be taught in temporary classrooms between now and 2014. Kingston estimates that it needs 13 new permanent forms of entry by 2014, but the range of new permanent classes required, according to London Councils data, is from seven to 19 new forms of entry. Of course, the costs will be huge. Let us look at the capital costs alone. Barking and Dagenham says that its shortfall in capital investment between now and 2014 is more than £86 million. London Councils estimates the figure for all London boroughs at £740 million. We should remember that I have some evidence that London Councils's figures are out of date already, and that they underestimate the actual funding shortfall. In essence, we should be in no doubt that we are talking about a lot of children, and a requirement for a massive increase in capacity at a high capital cost. I am sure that the Minister's brief will say the following: first, that surplus places in some boroughs can easily take care of the problem; secondly, that data supplied to the Government show that the problem is not nearly as serious as I am suggesting; and thirdly, that the issue cannot be a surprise to councils because the number of four-year-olds now was known about when they were born. She might ask why there is a fuss all of a sudden. Not least because I want to be helpful to the Minister, and because I want to bring out the underlying causes of London's massive problem, I will deal with those entirely predictable Government defences in turn. London has relatively fewer surplus places. In outer London, the average of surplus places in January 2007 was only 8.8 per cent. of the primary capacity and it is certain to be lower by now. The Minister will be well aware of the work by the Audit Commission and others suggesting that surplus capacity of 10 per cent. or less is about right, enabling some choice and flexibility in the system while achieving value for money. For Kingston, the January 2007 figure on surplus places—certainly an overestimate—was 6.1 per cent, whereas in Sutton, it was as low as 4.3 per cent. and it is probably lower still now. In other words, surplus places in many London boroughs cannot solve the problem, especially because those surplus places data refer to all year groups in a school. They are therefore useless when it comes to tackling the problems affecting one year group. Please, Minister, let us not say that surplus places are the way out of the problem. I have looked at the Government data that the Minister might use to dismiss my argument, and I have talked to civil servants. I must tell her that the data are largely out of date. Essentially, the Department is using figures for 2007 supplemented by some for 2008, but there have been major and sudden changes. Also, my analysis is that there are clearly various misunderstandings between councils and the Department about which figures are required for the predictions. Rather than denying that there is a problem, it is time that everyone involved recognised the problems with the data and did something about them. Will the Minister ask her officials urgently to set up a new formal process for collecting, from all London boroughs, up-to-date data on all aspects of the matter and for cleaning that data? Will she guarantee that, in the next two months, she will require her Department to work urgently with London Councils and individual boroughs to refresh all the data? On the final argument that the Minister is likely to use, I recognise that it is hardly intuitive that the problem of four-year-olds can should be such a surprise, but having considered the matter, I am beginning to understand why it was so unexpected. The facts are as follows. For some considerable time, by and large, councils have been pretty good at predicting primary school place demand. Kingston's predictions, made using the GLA model and data, had been accurate for nearly a decade. However, in 2008 and this year, the long-standing model broke down. I think it broke down because of a powerful combination of several effects that cumulatively led to a radical change. First, there has been a huge rise in birth rates. Since 2001-02, London's birth rate has been much faster than England's, at 20.5 per cent. compared with only 16.8 per cent. Some boroughs have seen far higher rises, with Barking and Dagenham at 40 per cent., Greenwich 36 per cent., Hounslow 29 per cent. and Sutton 28 per cent. Although the birth rates have been known, the sheer size of them has, I believe, helped to distort previously reliable forecasting models. We should also consider the effect of the private education sector, which is important. The sector is significantly more important in London's primary education sector than elsewhere in England. The Audit Commission and others have argued that parents are deserting the private sector for the state sector because of the recession. That may be true in some cases, but I do not think that it explains the present problem, not least because most private schools are full. My theory is that while the number of London's infants has been rocketing, the number of places in London's independent schools sector has not grown as rapidly, thus the state sector is being asked to provide places for a higher proportion of a larger cohort of children. In Kingston, up until 2006, 79 of every 100 five-year-olds would end up requiring a state primary school place. Two years later, that figure reached 89 out of every 100 five-year-olds. That rise in the so-called retention rate was not predicted and perhaps it could not have been predicted. However, if Kingston's experience was repeated across London, it could explain to a large extent the unexpected nature of the problem. Will the Minister ask her officials to write to every independent primary school or prep school in and around Greater London to seek data on their numbers and how they have changed? In my view, we will need to take much greater notice of the independent sector's dynamics if we are to improve forecasts. We could theorise about other changes which, if true, would have been difficult to predict, such as the impact of the housing and jobs markets on internal migration in England. Demographic data from the GLA last month suggest that there was a record low outflow of people from London to the rest of the UK last year, but a record high inflow from the rest of the UK to London. The report concludes:""The general decline in the numbers of people moving between regions and particularly those leaving London is an indication of the impact of the present financial downturn. While people coming to London tend to be young singles who rent, those who leave tend to be families who are owner occupiers."" In other words, that theory suggests that the unexpected increase in demand for primary school places in London is due to a change in migration patterns, with more children born in London needing a primary school place in London. The Minister may say that any effect of the recession might not be sustained when the upturn comes and that the demand for primary school places might therefore go away, but I do not think so. There are plenty of other competing, complementary and equally plausible theories beyond the recession that explain the changes in family moves within and from London. The first theory is a positive one that she should welcome: as London's education has improved, more parents think that they will stay in London for the primary education phase rather than move for the sake of the state primaries in cities and towns elsewhere in England. Then there is the theory that factors such as housing stock, crime levels and general environment have improved to influence patterns of movement and keep families in London. Those are only theories, and I could suggest others, but I think that the point is made: many factors are likely to be behind the dramatic figures; some are predictable, but many will be with us for the foreseeable future. I hope that I have persuaded the Minister that she needs to consider the problem seriously, whatever her brief says. I especially hope that she will consider Kingston's case, of course, although I acknowledge that quite a few boroughs have more severe problems than the royal borough. I am surprised not to see any Labour London Members present, not least because I contacted them specifically to invite and urge them to participate in this debate, as some of their boroughs are more seriously affected than Kingston. It is a shame that they are not here. What about the solutions? To start with the capital side and money for investment, undoubtedly my favoured solution is urgent extra capital grant. Where Ministers become convinced of the need, quick solutions are necessary and capital grant is the quickest way to deliver. Coupled with a commitment to extra capital in the next spending review round, it would really help. The Department will no doubt say that there is no money, but if Ministers want a quick, pump-priming boost in demand to tackle the recession—one that will not suck in imports, will use unemployed resources, will provide good value for money for taxpayers and will leave a legacy worth having—a primary school building programme is the answer. As it is the one preferred by the Department, the Minister's preferred funding route will undoubtedly not be the capital grant but the basic need route, which involves supported borrowing, in which the Government support the revenue cost of the borrowing needed to fund the capital investment. The problem with that route is that that theoretical support is already out there—it is often provided—but it is rolled up with a council's revenue grant. The majority of London authorities are unable to use that support because their increases in revenue grant are so low that they are called floor authorities and they cannot access it. Places such as Kingston are receiving real-terms cuts in their revenue grant, so any theoretical allocations for supported borrowing are eaten up in the cost of providing basic, legally required services. Supported borrowing is just not helping.