'Free' school meals leave schools facing funding crisis

Ever since its announcement at last year's Liberal Democrat party conference, the government's decision to grant every child aged 5-7 a free school meal has been dogged by controversy.

Aside from it being questionable that in excess of £600million of taxpayers' cash should be spent feeding the offspring of very affluent families (children from the poorest families have long received free school meals, irrespective of the child's age), this politically motivated gimmick has been beset with eminently foreseeable difficulties from day one.

From councils across the country (though thankfully not in Stockton) having to dip into their own education budgets to pay for kitchen improvements (the grant from central government proving insufficient) to thousands of schools unlikely to have the work completed by the first week of term in September, the implementation of the policy has been shambolic. So much so, faced with the number of schools who will be forced to provide meals cooked off-site and then re-heated, or even unable to provide a hot meal at all, the government has quietly dropped the obligation on schools to provide a hot meal.

But whilst these issues could be argued to be temporary, and relatively easily remedied, one enduring problem with the policy will continue to impact schools for years to come.

One of the Lib Dem's proudest - dare I say rightly so - achievements in government is the introduction of the Pupil Premium.

The Pupil Premium is additional funding given to publicly funded schools throughout England to raise the attainment of disadvantaged pupils hailing from the poorest families. During the financial year 2014/15, primary schools will receive an additional £1,300 for each eligible child. These payments soon add up to sizeable sums of money.

Here in the borough of Stockton on Tees, our primary schools registered anywhere up to 74.1% of pupils being eligible for the Pupil Premium - nearly three times the national average. Rosebrook Primary School, to give but one example, received £203,942 in 2013/14 (when the premium was set at just £953 per pupil).

The difficulty such schools face going forward is that eligibility to receive the pupil premium is based on whether a child has been eligible for free school meals at any point during the past 6 years. Given all pupils aged 5-7 will now automatically receive a free meal, their parents will no longer have to apply and prove their eligibility to the local authority, and by extension the school.

The upshot of this is that primary schools throughout the country will not necessarily know which or how many of their Year 1 pupils are eligible for free school meals, and without any previous record of them having been eligible, thereby leaving the school unable to apply for the additional pupil premium for those otherwise eligible pupils. This could easily see primary schools losing tens of thousands of pounds of additional funding.

Upon asking the question of Stockton Council last week, I was pleased to hear that the council has been working with the governing bodies of local schools to encourage parents to still register their eligibility for free school meals and the pupil premium irrespective of the fact their child(ren) will receive a free meal nevertheless. Whilst it's pleasing the council is ostensibly ahead of the curve on this issue, it is ludicrous they have been put in this position in the first place.

Councillors from all across the country will be aware of eligible families who haven't previously registered for free school meals, be it through ignorance of their eligibility or embarrassment at having to do so. Indeed, this was used as one of the justifications for the expansion of free school meals to all infants.

But how many more families will fall into this category when there is no tangible financial benefit to them in them doing so? It seems inevitable that we will see the number of infants recorded as eligible for the Pupil Premium fall as a direct consequence of the new free school meal policy.

It is impossible to say whether this looming crisis was foreseen by the government or simply overlooked, although given I wrote a blog last September highlighting the problem (here) it simply isn't plausible to claim nobody in government saw this coming.

What seems for more likely is that George Osborne did indeed anticipate these difficulties but saw reduced Pupil Premium payments to schools as a means of contributing to the cost of the additional free school meals. Once again it seems the Conservative part of the government is happy to take away from the poorest in society to the benefit of their more affluent core vote.

If you have children attending any publicly funded school within Stockton Borough, you can check eligibility and register for free school meals / the pupil premium online here or by ringing the Free School Meals Team on 01642 526606.

Response to the Autumn Statement

The chancellor's statement (see the key points here) this afternoon once again reiterated how little he understands just how much ordinary families, particularly in the north east, are struggling. Whilst hard working families need help with their bills now, the best the chancellor could offer was a pledge to kick them slightly less whilst they are down.

It would be churlish to admit there wasn't some welcome news.

The increase in personal income tax allowance to £10,000 from April 2014 will help most in work retain more of their wages. It is nevertheless disappointing however that he won't commit to increasing this further and work towards removing all earning the minimum wage from paying income tax altogether.

The increase of £2.95/week in the basic state pension is also welcome. However, this is hardly news - following the changes announced in 2012 the increase was already guaranteed; the announcement was akin to being cheered to the rafters for declaring tomorrow to be Friday.

We also, finally, had confirmation of the married couples and civil partners tax break to be introduced from 2014. Granted, this only qualifies as good news if you are married or in a civil partnership - if you are single, cohabiting, or widowed this announcement might well be considered a waste of £700million (which, don't forget, we don't have so needs to be borrowed).

Oh, erm, this is rather embarrassing. That seems to be all the good news I can find.

What we also found out is that, despite the much publicised government announcement of a £50 saving, the average energy bill will still rise by £70 this winter. Already exorbitant rail fails will, on average, rise by inflation (ie by more than your wages are rising). Fuel duty will once again be frozen, but that is hardly a help if you already cannot afford to fill and run your car.

Of particularly concerning news for the north east is the announced increase in state retirement age, to 68 in the mid-2030s and to 69 in the late-2040s. Given the Healthy Life Expectancy for the North East is 59.7 years for men and 60.2 years for women - the lowest of any region of the UK - and the disproportionately high number of employees engaged in heavy manual labour in the region, increasing numbers of us will be forced to, literally, work until we drop.

Although it has been patently obvious for some time now, this government of millionaires really does not comprehend how increasingly difficult the average family is finding it to get by. For 40 out of the 41 months of this government, inflation has outpaced the rise in incomes.

Put another way, for 40 out of 41 months of this government we have been getting poorer. Much poorer.

Indeed, figures publicised by Labour today show that the average household is £1,600/year worse off than when this government came into power. (NB I use this figure with a caveat: as is Labour's way, this figure is incredibly simplistic as it only compares inflation directly with wages and fails to take into account changes to tax allowances, benefits, etc.).

What is clearer than ever is that this country, and particularly the North East, needs support and a change of government priorities. What is clearer than ever is that the Conservatives and Lib Dems have no intention of delivering that change.

What is also clear is that Labour can never, ever be trusted with our economy again. Although the ConDem coalition have proved to be poor stewards, it would be sheer lunacy to throw Labour the keys to the economy they crashed so spectacularly.

Only one party pledges to cut your fuel bills, not just marginally slow the rate of their increase; only one party pledges to cut taxes and business rates across the board for every small and medium sized business in the country; only one party pledges to put the poor of our own region ahead of those in foreign countries.

And that party is UKIP.

Lies, damned bank bailouts and statistics...

A week ago today, George Osborne announced the government had sold a 6% share in Lloyds Banking Group at 75p per share, raising a cool £3.2billion. As the shares were bought by the previous government in 2008 at a price of 73.6p, we are told this represents a profit to the taxpayer of £61million.

Not bad you might think.

However, as demonstrated on the Ripped-off Britons website (an official Guardian blog), and as one might expect from a chancellor who couldn't lie straight in bed, the truth is predictably altogether very different.

Firstly, Osborne's claim failed to take inflation in to account.

We all know, and as the graph below illustrates, inflation has been running well above the 2% target for most of the past 5 years (We also know inflation has been running higher than average pay rises in every month bar one since Osborne entered Number 11, but more on that another time).

The Office National Statistics data shows inflation between 2008 and 2013 has totalled approximately 15%. This means the value 73.6p in 2008 taking into account inflation is approximately 84.6p in 2013.

Suddenly a sale price of 75p is not looking to be such a good deal. But that's not the end of it.

As a consequence of the previous decade of profligacy by Labour, the government didn't have the money in the kitty to buy the Lloyds Bank shares; they had to borrow it. And that comes at a price.

On 13 October 2008, when the terms of the bailout were announced, the UK government gilt yield (ie the cost of government borrowing) ranged from 4.15% for 5-year bonds to 4.50% for 30-year bonds.

What that means is the cost to the government of borrowing 73.6p per share between 2008 and 2013 would be somewhere in the region of 15.2p and 16.6p.

Therefore, just to break even in real terms the government would need to sell its holding in Lloyds Banking Group at a price in the region of 99.8p (84.6p + 15.2p), perhaps more. Furthermore, this real-terms break-even price will increase with every year that passes.

Far from the £61million profit George Osborne claims to have made from the sale, it is clear from the figures above that this most slippery of MPs couldn't be further from the truth. And this is just the tip of the iceberg - even after the sale the government still owns 32.7% of Lloyds Banking Group.

Only time will tell if the loss inflicted on the government by bailing out Lloyds will rival Gordon Brown's catastrophic sale of the country's gold reserves at rock-bottom prices in 1999.

What we do know, however, is that with the government still saddled with an 81% stake in RBS too, the total loss to the taxpayer of the bank bailouts is likely to be colossal - the RBS shares were bought at an average price of 502p; at the time of writing they are worth 362p.