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Schools: Funding Reform

My Lords, I am grateful to the noble Baroness for her response. I welcome her offer to contribute to the consultation and to have constructive conversations about the way forward. I will answer the questions that she asked. I am glad that she welcomed the announcement on capital that we made today. She called the decision taken by the Secretary of State last July to cancel the Building Schools for the Future programme ““precipitous””. We had to stop it and act rapidly because of the economic situation that we had inherited. We could not carry on with the programme and, as a consequence of having taken that decision, we have been able to make savings on some of the programmes and projects that have gone ahead, which has contributed to the £500 million that we were able to announce today to help with basic need. The details on private finance will need to be worked out. The Government believe that they can learn from previous schemes and find ways of doing it better. My noble friend Lord Sassoon announced today that the Treasury has identified £1.5 billion-worth of savings from running current PFI projects, but we will need to work out the details. The noble Baroness is absolutely right that the condition survey needs to be carried out speedily. We want to start straightaway. She asked about basic need and free schools. This is a pot of money that will be allocated to local authorities on the basis of demographic need, where the need for new places, particularly primary places, is greatest. I accept the noble Baroness's point about revenue. She said that some schools need more than others. The principle that we are striving for, which I am sure she shares, is that schools in similar circumstances, with similar conditions and similar pupils, should be funded on an equal basis. However, I accept her underlying premise that some schools will have different needs. I also agree with her that moving to a national funding formula may not be simple. The system is inherently complex. That is one reason why we will do this very cautiously—which the noble Baroness welcomed—rather than rush it; we will have a lot of consultation, make sure that there is proper transitional protection in place and not implement it before 2013-14 at the earliest. As the noble Baroness knows, one of the questions in the consultation is whether we should do this on an even longer timescale. On the question of academies funding, I am absolutely clear that the principle to which we are working is parity of funding. We are having this consultation because of the views expressed to us by local authorities, and the concern that they expressed about the decisions that the Government reached at an earlier point about the basis on which funding would be taken from them, to stop the double-funding that had been going on. The noble Baroness asked about special needs. It is very much our intention that everything we do should be compatible with the direction of travel set out in the Green Paper. Another proposal out for consultation is that we should have a special block of money for high-needs pupils to make sure that their needs are properly protected. The subject of 16 to 19 funding is extremely important. We propose to look at that, too, and see whether we can simplify it, on the same lines as we are trying to simplify schools funding. We will run a review on that, which will start in the autumn. On overall funding, I agree with the noble Baroness about the importance of maintaining funding in schools. In difficult circumstances, my right honourable friend the Secretary of State managed to protect funding for schools at flat cash levels with the pupil premium on top. In the circumstances, that was a good settlement for the Department for Education. On our announcement today about capital and about basic need, I am the first to concede that it is not the answer to everything, but it is a step in the right correction. I am glad that the noble Baroness welcomed our announcements on capital and revenue—with the caveats that she expressed —as a step in the right direction.