Sir George wrote to Charles Clarke about the financial problems that confront Winton School in Andover, following this year's Revenue Support Grant settlement which caused difficulties in Hampshire.
"I am glad that the tone of the letter is more conciliatory that Charles Clarke's more defiant attitude a few weeks ago. He puts forward some suggestions which I hope the school can pursue with the County. I want to keep an eye on progress"
This is the text of the reply
Great Smith Street
Westminster London SW1P 3BT
tel: 0870 0012345 firstname.lastname@example.org
From the Rt Hon Charles Clarke MP
The Rt. Hon. George Young Bt MP
2 Church Close
25 June 2003
Thank you for your letter of 13 June, enclosing correspondence from Mr A C Smith, Headteacher, and Mr J Stewart, Chair of Governors of Winton School, London Road Andover, about education funding, and the 2003 budget settlement for the school.
I recognise that local authorities and schools have had to contend with significant changes in funding arrangements this year and am aware that some schools have faced difficulties with their budgets. According to information sent to us by Hampshire LEA, in 2003-04 Winton School's budget share per pupil has increased by 12%. I understand the school will also have been affected by changes to the Standards Fund grants.
The funding of schools is a shared responsibility of central and local Government. In 2003-04, there have been a number of very significant pressures on LEA and school spending. Nationally, the increase in additional resources provided for education of £2.7 billion more than match those pressures. However, central Government, partly in response to the requests of LEAs and schools, has introduced a number of changes to both education funding and the wider local government finance system. In particular, changes to the distribution formula for Education Formula Spending, together with a significant transfer of funding to reflect the teachers' pension increase and the ending of a substantial body of ring-fenced grants from the Department's Standards Fund, have meant that authorities have received different levels of increase.
As well as these changes at the national level, the budgets received by individual schools are also influenced by decisions which the local authority takes on the overall size of its education budget compared to previous years, the proportion of the increase which goes direct to individual school budgets and the operation of the authority's own local funding formula.
The Department has sought to help local authorities to manage these changes by moderating the impact of the funding formula changes and through additional grant to ensure that all authorities have received an effective minimum increase of at least 3.2% per pupil on a like for like basis. This increase is in addition to the transfer of £586m to cover the teachers' pension increase, and the transfer of £500m to cover the transfer of nursery education grant and infant class size grant.
All LEAs have seen an increase in their Education Formula Spending Share of at least 3.2% per pupil in 2003-04, in addition to compensation for the bulk of the pension contribution increase and the transfer into general funding of nursery grant and class size grant: that is what Hampshire is receiving. This translates into an increase in Hampshire's Education Formula Spending Share of 5.9% when pupil number changes are taken into account.
We are well aware of the strength of feeling in Hampshire about the education settlement for 2003-04 and have listened to representations about that. We recognise that in some authorities the combination of a low increase in their Education Formula Spending Share, coupled with reductions in grant through the Standards Fund may result in low budget increases for schools. In order to help such authorities, we have proposed to pay a grant to ensure that the effective increase in education funding between 2002-03 and 2003-04 is no less than 3.2% per pupil for all authorities. Education funding in this context includes Education FSS, the School Standards grant and Standards Fund grant. Hampshire's share of this extra grant will be £278,000: the LEA is required to pass it on in full to schools. We expect that this extra funding for school budgets will be of particular relevance in taking forward the workforce remodelling agenda
I announced on 15 May that for 2003-04 only, LEAs and schools would be given flexibility to use their devolved formula capital funding to support revenue spending. This is in response to the unique circumstances that exist this year. I also urged LEAs and schools to make use of existing school balances and other local flexibilities, and promised that I would give sympathetic consideration to proposals from LEAs to relax Fair Funding restrictions and Standards Fund conditions of grant. It is now for LEAs, with their schools, to take matters forward locally and seek to sort out remaining problems.
I am committed to working in partnership with LEA and school representatives to identify changes that need to be made for 2004-05 so that all schools can expect to receive a reasonable per pupil settlement in that year: We are keen to learn lessons from this year, so that the problems are not repeated. We will aim to ensure that changes are in place in good time to allow LEAs and schools to plan for 2004-05 and so provide increased predictability and stability in school funding.