Self-Governing Schools Etc (Scotland) Bill [Money] (Hansard, 6 March 1989)

§ Mr. Malcolm Bruce (Gordon)
The money resolution should not pass without one or two queries being directed at the Government. The Government's wont on Scottish Bills has been to attach money resolutions stating that the costs will not be significant, or containing estimates of costs which experience has shown to be wild underestimates.
In one or two areas covered by the Bill it is unclear what the financial effects of the Bill are likely to be. The Bill states, for example, that The … provisions … should be generally neutral. Self-governing schools are to receive funding from the Secretary of State at the level they could have expected had they remained under local authority control. As has already been said, however, there is every sign that schools that seek to opt out may be the very schools that would otherwise have been closed or rationalised. Although the Secretary of State has partially answered that point, he has not made it clear whether additional charges could fall on the local authority or the Government from that commitment. If the Bill prevents rationalisation from going ahead or ensures an unequal distribution of costs, the costs will not be neutral.
The Bill also states that there will be small additional costs relating to the funding of parents' ballots. The Government have no experience of such ballots. They may be contested, or they may need to be re-run—that would lead to higher than expected costs.
Other aspects of the Bill certainly suggest that the determination of costs will be inequitably decided. Clause 26 allows the Secretary of State to determine the transitional amount due from or to the local authority when a school opts out, with no right of appeal by the local authority against the Secretary of State's determination. That might lead to an extra cost for the local authority which might require it to seek more direct grant or increase the poll tax.
The Minister's estimates proved to be way below the actual costs during the passage of the School Boards (Scotland) Bill. The original estimates were increased during its passage, as the Minister knows. The outturn of costs for the collection of the poll tax has been much higher than the Government estimated. As the orders to be 706 discussed tonight will show, that tax is proving a most cumbersome, complicated arid expensive tax to collect, which means that the costs have turned out way above the Government' estimates.
Some of us are sceptical about the idea that no additional costs will be levied on the public purse; the Government are not clear about what the take-up will be or about the costs.
I hope that if and when the Minister responds to this debate, he will do just that. He failed to respond to the main debate tonight. I do not mind that he did not respond to the points that I or the hon. Member for Moray (Mrs. Ewing) made, but he did not even answer his own Back Benchers' points—for instance, those made by the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith) and the hon. Member for Dumfries (Sir H. Monro). No doubt that contributed to the smallness of the Government's majority because the provocation of not even having their arguments acknowledged, never mind responded to, must have been the final straw that drove them into the Lobby with the Opposition parties.
The Bill is not opposed, as the Minister tried to make out, simply by the Labour party and it is not the root cause of some curious ideological struggle. It is opposed by all the representatives of all the Opposition parties and by the overwhelming majority of the people of Scotland. It is a pity that the Minister tried to pretend differently and to turn the debate into a sort of Labour-Tory dog fight. H e also failed to answer the questions that have been asked. The costs associated with the Bill are likely to be far greater than the Minister has said. Even if the costs in money terms are not great, the cost in human terms will be very high.

§ Mr. Andrew Welsh (Angus, East)
I should like some information from the Minister. As the hon. Member for Gordon (Mr. Bruce) has said, the Minister did not respond to the issues raised by my hon. Friend the Member for Moray (Mrs. Ewing). In this short debate I should like the Minister to put some flesh on the bones and tell us about the matters under the heading, "Financial Effects of the Bill". What exactly is meant by the phrase efficiency savings from more locally based decision-making"? What is meant by offset by savings on local authority central administration"? Will the Minister make clear what savings he has in mind? Surely the cost of training college councillors and the running costs of the councils will be increased because of duplication. Could the Minister tell us how the figures have been calculated and say why he is so sure about the statements in the Bill?
We are told that training costs will be "offset by savings". Can the Minister tell us what the savings are and whether they can be quantified? Are they pious Government hopes? Costs will eventually be passed to the taxpayers and the Minister should at least give an indication of what he has in mind. What is the expected allocation of costs to the technology academies? The Bill says: the cost of introducing and administering appraisal schemes will fall on Government and local authorities,". What is meant by that. What proportion will fall on local authorities and what proportion do the Government 707 expect to take up? Can the Minister reveal what he has in mind or whether he has any figures? That would certainly help to clarify matters.
I wish that the Government had spent money on the Scottish education system instead of transferring it out of the system. We can all be proud of that system. It deserves more resources and should be given more. This trivial Bill contains an alien set of principles which are to be imposed on the Scottish economy. The Government should give more resources to the teaching staff in further and secondary education in Scotland rather than acting in the way that they are.

§ The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth)
The major payments covered by the Bill are grants to the board of management of a self-governing school under clause 25. The most important of these will be the recurrent grant for each to meet its normal running costs. Our intention is that in every course the recurrent grant will be set at a level which the school could reasonably have expected if it had remained under the control of the local authority concerned. This amount of recurrent grant paid to the school will then be reclaimed from the authority under clause 26.
Grant and recovery regulations will have to be made giving detailed effect to this policy. The principle is clear. The school and the authority are to be left in the same financial position overall. Thus the level of expenditure on any self-governing school will reflect local spending decisions by the authority.

§ Mr. John McFall (Dumbarton)
The Minister speaks about the level of grant that a school can reasonably expect from a local authority. For years the Government have been telling local authorities that they have been spending above budget. Will the budget be decided by the Scottish Office or will it be the budget to which local authority schools have been adhering?

§ Mr. Forsyth
We have entered the new era of the community charge, and it is a matter for the local authorities to decide their own level of expenditure and their own priorities. I have some sympathy with the point—if the hon. Gentleman is making it—that perhaps the Scottish Office should be less proscriptive in these matters than it has been in the past.
Other grants under clause 25 will provide for capital spending in self-governing schools and for special purposes. These equally are aimed at ensuring financial neutrality. Capital projects funded by grants will require the consent of the Secretary of State. Grants will be set against the overall public expenditure programme of the schools' capital works. Special-purpose grants will cover such items of expenditure as it would not be appropriate to recover from the local authority. For example, there could be one-off management expenses associated with the transition to self-governing status. They will also provide a mechanism allowing self-governing schools to give the equivalent benefit to any specific balance available to local authorities, such as those in support of in-service training for teachers. As the financial 708 memorandum states, the overall impact of creating self-governing schools for these grants will be "generally neutral".
The Bill offers a new way to manage Scottish schools within whatever level of resources local authorities choose to spend. Certain minor costs will fall on the Secretary of State as each self-governing school is established. These include the point made by the hon. Member for Gordon (Mr. Bruce)—the costs of balancing expenses under clause 14(6). Our best estimate is about £1,000 for a medium-size secondary school with 500-plus pupils. There will be payments under schedule 9 to cover the work of the commissioners for school assets in arranging for transfer of the property of the school. There is a power under clause 5 to cover special additional costs during the transitional period. For example, in some cases it may be appropriate for a school board to make an early appointment of someone to deal with future financial arrangements for the school. The extent of these various minor payments will depend on the number of schools seeking self-governing status in any year and on the size and circumstances of each individual candidate.
As the hon. Member for Angus, East (Mr. Welsh) does not believe that any school is interested in adopting self-governing status, he must draw his own conclusion as to the likely level of expenditure. It is not possible for me to offer any global figure for the same reason. Setting up and running the new college-based administration for further education colleges under clauses 43 to 58 will involve some added costs. However, these will be offset by savings in authorities' central administration. The hon. Member for Angus, East asked me to explain it, and it is very simple. If the centre is no longer required to administer the colleges, there will clearly be an opportunity for savings. By greater efficiency arising from more locally based decision making—our basic premise is of the people who are involved in providing services making the decisions—then there is likely to be a more efficient allocation of resources.
Moreover, these changes, together with the commercial activity powers granted by the Bill, will allow colleges to generate more income to boost further education. Primary testing will carry additional development costs of £2 million with some recurrent costs in administering the system. This spending falls under the Scottish examination board. We have made it clear that these costs will be met in full by the Government.
To summarise, this is not a Bill with significant consequences for public spending, overall. Where some additional spending is involved in the transition to self-governing status on technology academies or on primary testing, it will be met by Government. It does not place financial burdens on local authorities. I commend the money resolution to the House.