FUNDING AGENCY FOR SCHOOLS

HC Deb 19 July 1993 vol 229 cc65-79

Lords amendment: No. 7, in page 2, line 7, at end insert— ("() persons who appear to him to have experience of, and to have shown capacity in, the provision of education in voluntary schools, or in grant-maintained schools having foundation governors")

Mr. Forth

I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker

With this, it will be convenient to consider the following Lords amendments: Nos. 8 to 10, 23 and 175.

No. 177, Government motion to disagree and Government amendment (a) in lieu.

No. 180 and Government amendments (a), (b), (c) and (d).

No. 181 and Government motion to disagree.

Nos. 397 to 399, No. 401 and No. 403.

Mr. Forth

This group of amendments concerns the funding authorities; many of them are either technical or deal with minor omissions and tidying up. The main issues covered by the amendments are membership of the funding authorities and a new function for the Funding Agency for Schools in respect of 'value of money'.

Let me deal first with the amendments on membership. In response to concerns expressed in the other place by representatives of the voluntary sector, the Secretary of State will now be under a duty to consult both the Church of England and the Roman Catholic Church before making any appointments to the Funding Agency for Schools. In reality, those organisations will be the Church of England General Synod Board of Education and the Catholic Education Service. In addition, the Secretary of State will be required to consider the desirability of appointing as a member of the funding agency for schools an individual representative of the voluntary sector.

By virtue of amendment No. 8, the Secretary of State will have to consider the desirability of appointing as a member of both the FAS and the Schools Funding Council for Wales an individual with experience in providing for pupils with special educational needs.

The hon. Member for Bath (Mr. Foster) has tabled two amendments which would tie the LEAs into the Funding Agency for Schools. I hope and expect—I have said this many times in Committee and in the House—that the FAS and LEAs will work together in close co-operation, but it would not be appropriate to place a requirement on the face of the Bill that the Secretary of State should consult representatives of local education authorities before making appointments to the FAS. That agency has a role in relation to grant-maintained schools, not to LEA-maintained schools.

I refer now to amendment No. 177, which I cannot commend to the House. Of course the Government are wholly committed to ensuring that public funds are used with economy, efficiency and effectiveness in the growing grant-maintained sector. My noble Friend agreed in the other place that there should be a clear requirement on the face of the legislation for value-for-money studies to that end, but right hon. and hon. Members will realise that there are technicalities which need to be got right, which include safeguarding the valued independence of the National Audit Office.

The fundamental problem with amendment No. 177, although I support its thrust, is that it places a duty on the Secretary of State to make regulations which could be regarded as biting on the independent role of the Comptroller and Auditor General. I know that that would be of concern not only to hon. Members in general but to the Public Accounts Committee in particular.

To rectify that defect, the Government propose a new clause in lieu of Lords amendment No. 177 in part 1, as set out on the Paper. That would place an explicit duty on the funding authorities to ensure value-for-money studies of grant-maintained schools. That duty is already implicit in the monitoring roles proposed for the FAS and its Welsh counterpart, but the amendment will place beyond all possible doubt both the duty on the funding authorities and the importance that the Government place on accountability and the proper stewardship of taxpayers' money. The amendment would not trespass on the responsibilities and independence of the National Audit Office, whose recent report on financial controls in the grant-maintained sector I am sure hon. Members will have read with interest, as I did.

Indeed, the NAO's responsibilities and independence of action in this matter are properly enshrined in Lords amendment No. 180, which I fully support. That places on the face of the legislation the Comptroller and Auditor General's right of access to the accounts of each and every grant-maintained school. That right is presently secured only through secondary legislation. The amendment also provides for the Comptroller and Auditor General to report to this House each Session on whether he has carried out any value-for-money studies of GM schools, and if so, what are their results. In determining the programme of studies of the National Audit Office, he will also be required to take account of any relevant report published by the Audit Commission.

That provision will have a dual effect. It will ensure that there is no unnecessary double banking. However, if the findings of the Audit Commission indicate that further investigations are warranted, the Comptroller and Auditor General may build on what has already been made public. I am sure that the increase in transparency—through the annual reports to Parliament and the encouragement for more professional scrutiny in a co-ordinated way—will be welcomed by hon. Members.

Amendment No. 181 and the Government's amendment to amendment No. 180 are technical ones relating to definitions. Parliamentary counsel has advised that the approach in amendment No. 180 is preferable. Amendments (b), (c) and (d) to amendment No. 180 would require grant-maintained schools to send their accounts to the Comptroller and Auditor General and for him to make them available for public inspection.

I want to make two comments on that. First, the amendments are defective, unless the hon. Member for Dewsbury (Mrs. Taylor) intended to place on schools the onerous burden of sending to the Comptroller and Auditor General not simply the audited accounts but all the supporting documentation of financial transactions during the year. Secondly, the amendments are unnecessary, because grant-maintained schools are already required to make their audited accounts available for inspection by any member of the public.

Mrs. Ann Taylor (Dewsbury)

We are discussing a wide group of amendments, but that is part of the difficulty with the time constraint under which we are operating this evening. The amendments to which the Minister referred initially—those relating to membership of the funding agency—are generally welcomed, not least because we made suggestions along similar lines in Committee and, indeed, along the lines suggested by the hon. Member for Bath (Mr. Foster).

In Committee, the Minister told us that it would be inappropriate to prescribe who should be on the funding agency and it should not be a "ragbag of individual interests". I am glad that he has changed his approach and is willing to accept that there should be some guidance with regard to the membership of the Committee.

The Minister did not mention the amendment dealing with section 11 funding and the distribution of section 11 funds through the funding agency. I wish that he had said something about section 11 funding because many of us are waiting for Ministers to recognise the problems that the cuts in section 11 money are causing schools at present. The fact that the Government have reneged on their initial deal on section 11 funding is causing great and real hardship. I wish that we had more time to explore that fully and that the Minister had spoken about that aspect as well.

The amendments that I want to concentrate on are those that the Minister dealt with at the end of his contribution—amendment No. 177 and the Government's amendments to the Lords suggestions. Clearly, there is a need for greater accountability for grant-maintained schools. After all, we are talking about public money. The recent debate, abeit a brief one, on the Select Committee report on education expenditure threw up many interesting items. One of the most significant items was the extent of double funding of grant-maintained schools and, indeed, the bias with regard to capital for grant-maintained schools.

6.15 pm

It is clear that GM schools had an unfair share of the cake in the past. The fact that there has been insufficient scrutiny of the distribution of funds is a cause for great concern and alarm. I remind the Minister that more than half the present 492 GM schools are double-funded with regard to their annual maintenance grant. Many of them gain considerable amounts of money at the expense of local education authority schools in that area—the budgets of local education authority schools are robbed to give grant-maintained schools extra provision.

It is a fact that the first schools to seek grant-maintained status got a higher degree of double funding and that advantage may be drying up. When the hon. Member for Rugby and Kenilworth (Mr. Pawsey) talked about funds for GM schools, he said that funding would become increasingly tight. That is the case. However, there is still a great deal of double payment, and the Government have done nothing whatever to redress that problem. The Government have acknowledged that that happens, yet they continue to pour money in that direction. When the civil servants appeared before the Select Committee recently to discuss the problem, they said that there had been a deliberate political decision by Ministers to double-fund GM schools because that was their political preference and they wanted to reward schools that went in that direction.

The extent of the double-funding on an annual grant basis is £13.6 million. The highest beneficiary is St. Bartholomew's school in Newbury, which benefited to the extent of more than £200,000. Obviously, that did not pay off in terms of the by-election result in that area. I have not had an opportunity to find out whether any schools in the Christchurch area have had the advantage of double funding—perhaps the Government have already given up on Christchurch.

There has been a stunning silence from the Government as to why grant-maintained schools are being double-funded at a time when public expenditure is so tight. It is clear from paragraph 22 of the Select Committee report that The Government's plans for capital spending on schools appear to us to favour the GM sector rather than the LEA sector". The Minister is nodding. That is an admission that education funding is determined by political and ideological soundness, not by education need. That is a disgraceful situation, and Ministers should be ashamed of it. If they had any real interest in the educational development of children, they would not tolerate it for one moment.

I return to the main point—the need for further scrutiny of grant-maintained schools with regard to both the money they receive and the way in which they spend it. Recently, the Audit Commission reported on some of the problems that LMS has created for many schools. The report detailed the way in which schools operate under LMS at present. We know from previous debates that all hon. Members support the principle of LMS.

We must all acknowledge that there are many problems in terms of the formulae that have been created and the many difficulties that have arisen as a result. The report shows that there has been an increase in the pupil-staff ratio. Since LMS was introduced, class sizes have increased. That is partly a problem of the formulae and partly a problem of the arrangement that was imposed by Ministers with regard to the payment of staff salaries. Nevertheless, it is a significant problem that should be addressed in the future. It is right that the Audit Commission should be able to identify such problems with regard to local authority schools. It is also right for the Audit Commission to examine GM schools, identify such problems and warn us that those problems are arising.

The Audit Commission report highlighted many of the anomalies, difficulties and problems that have arisen from LMS in terms of the tendering process and letting contracts. The press picked on the more sensational aspects of the report, such as the odd occasions when head teachers let contracts to relatives and improprieties of that sort. Obviously, such matters should be brought into the open.

There is a clear need for such constraints and scrutiny to apply to grant-maintained schools as well as schools in the local authority sector. Therefore, we do not accept that the amendment tabled by the Minister is an adequate substitute for amendment No. 177, which was passed in another place. The advantage of amendment No. 177 is that its intention and wording are clear, and it provides for a proper basis for scrutiny. The Minister's amendments fudge the real issue. They do not ensure the level of scrutiny that we require. Given all that has been said recently by the Prime Minister, Ministers in the Cabinet and junior Ministers about the need to remove secrecy from all levels of Government, it is about time that Ministers sought to remove secrecy from quangos and those who benefit from the money distributed by quangos.

The Funding Agency for Schools will have a great deal of power and money at its disposal. It already has. It is essential that every aspect of public funding is open to the fullest scrutiny. We do not believe that the Minister's amendments will achieve that aim. We believe that Lords amendment No. 177 in particular should become part of the Bill because it will ensure a higher level of public accountability and we should be responsible for ensuring that that is achieved.

Mrs. Mahon

I shall speak to amendment No. 177, which deals with value for money, and touch on some of the points made by my hon. Friend the Member for Dewsbury (Mrs. Taylor) on double funding.

Two years after the Government introduced changes to allow schools to opt out, we face a potential crisis in Calderdale local authority. The entire council structure is being undermined by the Government's changes. So alarmed are councillors from all parties that, as I mentioned in an intervention on the Minister, Calderdale council is to spearhead a national campaign to highlight the unfairness of the funding of grant-maintained schools. I may add that scrutiny and accountability come into that campaign.

Tory-led Calderdale council claims that the current formula pumps thousands of pounds a year into grant-maintained schools at the expense of schools that remain under local authority control. From the way in which the Minister nodded, I suppose that he thinks that that is all right. It is worth emphasising that the campaign has all-party support and that the council is at present run by the Conservatives.

I have already told the Minister the position of the ex-mayor on the matter. The ex-mayor said: The education department had been placed in a financially perilous position by the opting-out legislation. A third of all secondary schools are now grant maintained in Calderdale and the proportion could rise to almost half by April next year. He also said: If we do not do something about it, we could be committing our schools to a potentially disastrous situation. It is vital that we achieve the scrutiny and accountability that Lords amendment No. 177 would provide. The truth about the current unfairness in the financing of grant-maintained schools is that it takes place at the expense of local authority schools. I see the Minister nod in approval again. Grant-maintained schools are also receiving extra capital. They receive a far more generous allocation of resources than the equivalent local education authority schools. Other LEA services are being deprived of resources to provide the additional funding for schools which have received grant-maintained status. Opposition Members believe that that is simply unfair.

My hon. Friend the Member for Dewsbury referred to capital grants. Earlier this year in Calderdale, we saw the real face of the Government's ideological commitment to one type of education, when they granted three grant-maintained schools in Calderdale over £400,000 in capital grants while the other 109 LEA schools received thousands of pounds less. One grant-maintained school received £225,000, which was £20,000 more than the other 109 schools put together. That is wrong.

What does the Minister have against children in LEA schools? Why do the Government discriminate in that way? Why did that one school receive £225,000 more than all the other 109 put together? It is simply unfair. I submit that it was simply a crude bribe to encourage the other schools to opt out as they became desperate for funding

Mr. Don Foster

In November 1992, the Secretary of State categorically stated: Grant-maintained schools and local education authority schools must operate on equal terms."—[Official Report, 9 November 1992; Vol. 213, c. 651.] Is the hon. Lady surprised to hear that, in view of what she has been saying?

Mrs. Mahon

We have clear evidence that the Government do not intend all schools to operate on equal terms

Mr. Steinberg

What the hon. Member for Bath (Mr. Foster) has said seems remarkable. I am a member of the Education Select Committee. We wrote to the Secretary of State asking him what was the policy on capital expenditure in opted out schools. He categorically said that it was the Government's policy to ensure that opted-out schools received more money for capital expenditure than LEA schools. That was in a letter which he wrote to all members of the Select Committee. So he appears to say one thing at one time and something else at another time.

Mrs. Mahon

That shows that the Government are willing to use children and their education as political footballs.

I take this opportunity to congratulate the teachers, governors and parents of the excellent Ryeburn comprehensive school in Calderdale in my constituency who resisted the bribe. They voted two to one against opting out. The school was built for 600 pupils and now has more than 1,150. It is bursting at the seams. If there was accountability in distributing capital grants, the school would have more than qualified for the extra money that the Minister gave out so liberally to the other schools.

I ask the Minister now whether he will treat Ryeburn school as generously as he treated Crossley Heath school, which received more grant than the rest of the schools put together and, if not, why not? He must answer that question because the children at those schools are all his responsibility.

I have with me a report which I intend to send to the Minister after tonight's debate on the Lords amendments. It was produced by the financial department of Calderdale council and it deals with the financial implications for the local education authority of grant-maintained schools. I ask the Minister to consider it carefully. It exposes the double standards—it is factually correct—if what is happening in Calderdale.

The report expresses doubt about double funding. The extra money that goes to grant-maintained schools comes from an already grossly underfunded local education authority budget. It is a shrinking budget, thanks to the Government's cuts. Since 1979, we have lost about £160 million in grant from the Government. We were also unfairly poll tax-capped. But the inadequate budget for LEA schools has to provide for school meals, special needs and a host of other essential services for all LEA schools. It provides no luxuries.

I submit that the Government are deliberately creating a two-tier system of funding. I can only conclude that their aim is to produce a segregated schools system. That will damage children's education. If Calderdale becomes the pilot for the funding agency, I agree with my hon. Friend the Member for Dewsbury that parents will have to deal with Government appointees to a remote, unaccountable, secret quango. What will parents do when they want to appeal about which school their children attend or to complain about something?

Next year, the LEA schools in Calderdale will face the possibility that their delegated budgets will be cut to fund grant-maintained schools. That would be an absolute outrage. It would be grossly unfair to children, teachers. parents and governors.

I shall support the local authority's campaign, which will be led by a Tory education spokesman, to warn other authorities about exactly what is happening on the ground in terms of unfair, unaccountable funding and the creation of a two-tier system. If even a Tory council such as Calderdale recognises the iniquity of the system, there is something seriously wrong. Will the Government use the Bill's powers to end a potential disaster for children in Calderdale?

6.30 pm

Mr. Andrew Miller (Ellesmere Port and Neston)

Several hon. Members have spoken about the Government's double standards in refusing to accept amendment No. 177. This is a fundamental issue and the principle seems to emerge in two areas. I suppose that we should be grateful that the Government are at least doing something consistent, but it is distasteful.

Like schools in the constituency of my hon. Friend the Member for Halifax (Mrs. Mahon), none of the schools in my constituency has yet been persuaded, despite enormous bribes, to accept grant-maintained status. Indeed, Whitby high school recently voted firmly against grant-maintained status. Many parents and teachers have started to worry about the Government's double standards.

The Minister referred to the problems created by cutting across the role of the Audit Commission or the Public Accounts Committee. So what? Is not the essence of openness that those at the sharp end—the parents of the pupils and the teachers—should be entitled to the fullest information on what is happening in the school in question?

My hon. Friend the Member for Dewsbury (Mrs. Taylor) commented on the Government's claim that they seek to open society. Just last week, the Chancellor of the Duchy of Lancaster—who, a moment ago, fortuitously popped in, heard 30 seconds of this debate and left—introduced a White Paper on openness in government. Do the Government intend to provide access to information just in Whitehall? Are we to learn only about who was spying for whom 50 years ago, or will the Government get down to openness in current issues that affect real people, such as children in our society?

The position can be compared to what is happening in the health service. I was recently berated by a Government employee—the chairman of a hospital trust—for having the temerity to publish a policy document from that hospital trust showing how £1.7 million-worth of cuts would be imposed. The public are entitled to such information.

In another area of the Government's dogmatic approach—the creation of grant-maintained schools—are not the public entitled to know precisely what is happening? The only conclusion that one can draw from those two examples in the education service and hospitals is that the Government have a particular form of double standards. They will happily tell the public about certain pieces of information but, when it comes to the cost of implementing policies based on sheer dogma, they will not tell the public what is happening.

I challenge the Minister to get his feet off the Dispatch Box and come clean. Is he simply saying that the only reason for keeping information about grant-maintained schools from the public domain is that it hides part of the Government's dogma and it would suit the Government not to tell? Everyone knows that that is so. If the Government were sincere, they would accept amendment No. 177.

Mr. Don Foster

The hon. Member for Ellesmere Port and Neston (Mr. Miller) referred to national health service trusts. May I draw his attention and, more important, that of the Minister to the importance, when applying for NHS trust status, of combining operational and financial details? As I said in Committee, if the governors were required, when applying for grant-maintained status, to provide full details of their financial projections for the next two or three years, that would go a long way towards resolving some of the concerns in schools.

I rise to speak because of the Minister's comments in introducing this string of amendments. Amendments Nos. 7 to 10 extend the Secretary of State's responsibility not only to consider, as members of the funding authorities, those with experience of voluntary and grant-maintained schools and special educational needs, but to consult the Church of Engand and the Roman Catholic Church before appointing members of the funding authorities. The Minister said that he did not believe that it was necessary to consult local education authorities in the same way as the amendment would require the Secretary of State to consult those other bodies. He explained the rationale behind that as being that the funding authorities were set up to deal with grant-maintained schools.

Will the Minister reflect not on anything that I may say on the issue but on what he said at various stages during the Bill's passage? For example, at the Committee's third sitting, on 19 November 1992, he said: In other words, the duty of the FAS to secure sufficient school places need not. and should not, operate where it is economically more sensible for an LEA to make provision in that way."—[Official Report, Standing Committe E, 19 November 1992; c. 82.] The Minister accepted the important liaison between the two bodies. At the eighth sitting, on 1 December 1992, he said: Both bodies will be able to bring forward statutory proposals only in respect of their own sector. But, when considering the needs of their particular sectors, both bodies will have to take account of the provision that exists in the other sector. Again at the eighth sitting, the Minister said: LEAs will need to carry out a more strategic planning role in partnership with funding authorities, if we are to ensure that there are sufficient school places. He went on to say: An essential aspect of the activities of the funding agency for schools and of clause 7 is to provide a strategic planning framework for the grant-maintained sector alongside that of the LEA."—[Official Report, Standing Committee E, 1 December 1992; c. 337–39.] At the 10th sitting, the Minister said: I expected the funding agency for schools to work in close harmony with LEAs".—[Official Report, Standing Committee E, 3 December 1992; c. 443.]

Mr. Forth

indicated assent.

Mr. Foster

Given that the Minister nods his head and acknowledges his earlier comments, it is difficult to understand why he is willing to accept that it is important and relevant to consult the Churches, but not the local education authorities, when appointing members to the funding authorities. Although none of us fully understands how it will work, he seemed to be saying that there will be a close working relationship between those two bodies at a local level. It therefore makes sense, if not to accept our proposal, which would allow people with experience of LEAs to work in the funding authorities, at least to agree to the detailed consultation.

Dr. Spink

The hon. Member for Dewsbury (Mrs. Taylor) referred in her opening remarks to section 11 funding. That is a Home Office grant directed towards the teaching of English—largely on a one-to-one basis—to pupils who may not have English as their first language. That grant will cut in 1994–95 and 1995–96. Does the hon. Lady realise that those areas that typically receive that grant get a higher level of standard spending assessment, and they are free to redirect part of that SSA to teaching those children?

Mrs. Ann Taylor

I am grateful to the hon. Gentleman, both for asking that question and for allowing me to respond.

The pressures on schools that require assistance from section 11 funding are significant. I hope that the hon. Gentleman recognises that, when the Home Office and the Department of Education boasted about increasing section 11 money, they could do so because they said that the money would contribute to the education of children who needed help at a critical stage in their learning of English as a second language. I hope that he agrees that removing section 11 funding will cause more problems for the eduation service. If the Government are to give money for reading recovery schemes, the money that will be required for those schemes will be far greater if section 11 funding is reduced.

Dr. Spink

I accept that section 11 funding is directed in a good area and is used effectively, as was reported by the Audit Commission a couple of years ago.

Does the hon. Lady agree with me on two points? First, LEAs have it within their powers to redirect part of their funds towards continuing the teaching to which she refers if that teaching is so important. Secondly, a large number of children are being presented to school without a word of English because, after they are born in this country, they are sent abroad to live until they are of school age; their parents then bring them back to this country to attend school. Does the hon. Lady think that that is a responsible way for parents in this country to treat their children? Are not the parents giving their children a disadvantage? Should the British taxpayer be footing the bill?

Mrs. Taylor

The hon. Gentleman is talking nonsense. First, local authorities do not have spare cash floating around that they can devote to replacing cuts in section 11 money, any more than they have spare cash for other reasons. I hope that the hon. Gentleman is aware of the pressures that capping of local authorities is causing in many areas.

Secondly, the hon. Gentleman made a point about children from ethnic minority backgrounds who were sent abroad before the age of five. My constituency has a large ethnic minority population and children are not sent away in the way that is suggested by the hon. Gentleman. That is not the reason the children have problems with the English language. The problem is that their home language is not English. If there were investment in nursery education and pre-school provision, there would be far fewer language problems. What the hon. Gentleman is suggesting, and what the Minister is doing in cutting section 11 funding, will cost the education service more in the long run.

Dr. Spink

The Minister is doing nothing of the sort. The grant to which the hon. Lady refers comes from the Home Office, not the Department for Education. No doubt the hon. Lady will look that up later.

I am indebted to you, Mr. Deputy Speaker, for allowing us to have this very important micro-debate within the general debate. The general debate is about driving up standards of education. [Interruption.] The hon. Member for Dewsbury may laugh at me for saying that, but my constituents are not laughing. They want standards to be improved. They are fed up with a situation where three in 10 of this country's children leave school unable to read and write properly.

The debate focuses on the standards of education. The hon. Member for Dewsbury will know that grant-maintained schools deliver 30 per cent. more children with five or more graded GCSE passes and 30 per cent. better results on average than all other schools. The Government are promoting grant-maintained schools because they give choice, opportunity and diversity in education. That is the way to drive up standards, and that is why my constituents welcome grant-maintained schools.

In fact, my constituents have welcomed grant-maintained schools so much that every secondary school in my constituency and many of the primary schools are grant-maintained. South Benfleet primary school has just received a letter from the Minister, giving it permission to become grant-maintained from 1 September, and the school is delighted with that.

Mr. Oliver Heald (Hertfordshire, North)

On the basis of my hon. Friend's experience with the many grant-maintained schools in his constituency, what advice would he give to schools that are considering whether to do so?

6.45 pm

Dr. Spink

My advice is unequivocal—the schools should become grant-maintained as quickly as possible. It gives schools choice and the freedom to make decisions at a point where those decisions matter. It gives parents control over the education of their children. It brings real local democracy into schools, because grant-maintained schools are accountable every year to parent groups.

Lady Olga Maitland (Sutton and Cheam)

Does my hon. Friend agree that it can be difficult to get the good news about the advantages of grant-maintained schools to parents when LEAs use every possible obstacle? Does he further agree that the truth should go out? The benefits are undeniable and the three schools in my constituency that have become grant-maintained have not regretted the move. They are telling the good news to other parents, and the parents are listening.

Dr. Spink

I am indebted to my hon. Friend for her remarks, with which I agree. Grant-maintained schools are so successful that, by April 1994, the trend shows that there will be 1,500 grant-maintained schools. At that point, the Government will need help to perform the functions that are needed to care for the public funds and to ensure that there is intense scrutiny and audit in the schools. The system would become increasingly inefficient and inappropriate if all executive tasks were carried out by the Department for Education. As the diversity of the provision spreads, LEAs will find it difficult to accomplish those tasks. I therefore welcome the establishment of a new statutory body, the Funding Agency for Schools.

Mr. Forth

With the leave of the House, I should like to reply to a debate that has covered a wide range of subjects.

For me, the highlight of the brief debate came when the hon. Member for Halifax (Mrs. Mahon) referred to the Funding Agency for Schools as a "remote body"—I think that was the term she used. She is obviously unaware that the funding agency is based in York. It strikes me that for her of all hon. Members to make that reference is charmingly eccentric, and I shall put it no higher than that—I shall leave the hon. Lady to account for her remark.

The hon. Member for Halifax also made a lot about the differences in the Government's approach to funding the grant-maintained school sector and funding the LEA sector. Those of her hon. Friends who heard me speak in Committee will know that the Government have never made a secret of the fact that, in both capital and revenue terms, we have always sought to acknowledge the different role, nature and responsibilities of grant-maintained schools in their funding arrangements.

We have made no secret of the fact that the capital funding regime will recognise that. We have always sought to ensure that, in revenue terms, through the annual maintenance grant, grant-maintained schools receive more money than their LEA counterparts; they have to, because they carry greater responsibilities.

The cash protection provision—I think that that is what is causing such excitement among Opposition Members—rightly provides an element of protection during schools' transition from their LEA incarnation to grant-maintained status. It is somewhat similar to the transitional arrangements that are rightly allowed for in local education authority local management of schools schemes, in respect of which provision is made to afford a degree of protection against violent oscillations or variations in the amount of money available to schools from year to year.

Mrs. Mahon

May we get this clear? Is the Minister saying that it is all right if local education authority schools have their delegated budgets cut next year to fund the handful of grant-maintained schools? Does he believe that that is right?

Mr. Forth

As I told the hon. Lady earlier, I am saying that it is for local education authorities to assess their own priorities and make their own arrangements, through their LMS formulae and through the funding for education in their areas, in respect of which they have a great deal of flexibility. That continues to be the case.

Mr. Don Foster

The House deserves greater clarification than the Minister has given the hon. Member for Halifax (Mrs. Mahon). The hon. Lady has teased out of the Minister his acceptance that, during the undefined transitional period, grant-maintained schools get additional money to protect them. As the Minister well knows, that money comes from the local education authority. That means that an LEA's remaining schools suffer as a result of the additional transitional costs, which the Minister has now accepted exist.

I have another question. Does the Minister accept that, in revenue terms, grant-maintained schools should receive only such additional money as is commensurate with their additional responsibilities—or will they receive money in addition to that extra money?

Mr. Forth

We have always said that the additional money available on a revenue basis to grant-maintained schools was designed to reflect their additional responsibilities. I make no secret of that. It does not have to be teased or forced out of me; I say it gladly.

Mrs. Ann Taylor

The Minister said previously that that is what the additional income should he for. How, then, can he justify the many variations and the clear duplications in funding that have been thrown up by many surveys? Does he think it right that grant-maintained schools should be not only compensated for extra administrative costs but double-funded?

Mr. Forth

I glory in variation. The fact that our White Paper was entitled "Choice and Diversity" and that, as has been said, we welcome specialisation means that I can readily accept what the hon. Lady says. I would go further: we have always welcomed the enormous variation in local management of schools schemes and formulae up and down the country. I think that I am right in saying that no two local education authorities in the land have identical LMS schemes. I do not shrink from—indeed, I positively welcome—the fact that there is a variety and diversity of provision in different authorities and different grant-maintained schools. Given that grant-maintained school funding is closely tied to the LEA funding—and will continue to be so. even under the common funding formula—that degree of variation will continue.

Dr. Spink

Does my hon. Friend acknowledge that, since 1979–80, funding per pupil in primary and secondary schools has increased by 45 per cent. in real terms? Does he agree that LEA schools have received their fair share of that real terms increase and that education has benefited while pupil-teacher ratios have fallen?

Mr. Forth

My hon. Friend makes a fair point. The only gloss that I would put on it, following my previous point, is that there are rightly variations between LEAs, some of which choose to fund way below their education SSA—which I know is only an indicative figure—and others of which choose to fund above it. That variation exists throughout the country. We can all have our own thoughts about it and, from time to time, one is tempted to draw attention to individual authorities that behave rather peculiarly in that respect. Nevertheless, the variations remain.

Mrs. Ann Taylor

Will the Minister give way?

Mr. Forth

I shall give way once more; then I want to reply to other hon. Members.

Mrs. Taylor

Will the Minister now answer my question? Will he defend the £13.6 million in double funding that has been proved to take place? Does he think that that is a wise use of taxpayers' money?

Mr. Forth

Yes.

The hon. Member for Ellesmere Port and Neston (Mr. Miller) made much play of the need for openness. Had he sat through the long dark hours of the proceedings of the Standing Committee that considered the Bill, he would have heard me speak at some length about non-departmental public bodies. I debated with people in my office whether I should bring with me today the document that I had at my disposal then. I thought that I would not need it on this occasion. I wish that I had brought it, because I could have displayed it proudly, as I did then.

That document sets out in great detail the responsibilities of the NDPBs, of which the Funding Agency for Schools is one. Those Opposition Members who suffered with me—I am sorry, who enjoyed with me—the long proceedings of that Committee will be able to tell the hon. Member for Ellesmere Port and Neston the extraordinary extent to which those bodies are obliged to report and to make public their financial affairs and many of their other activities.

That ties in with the openness that now exists in relation to grant-maintained schools—in some respect, much greater openness that occurs with LEA schools. Grant-maintained schools have to hold annual general meetings and produce annual reports. They have to produce annual accounts, which have to be audited and be available for public scrutiny. I would argue that the openness of the regime is there for all to see—at the level of schools and the funding agency, which will be constrained by the rules referring to NDPBs. There is great openness in the scheme, and the hon. Member for Ellesmere Port and Neston should welcome it.

Mr. Stephen Byers (Wallsend)

In that spirit of openness, will the Minister agree to place in the Library a copy of the internal report of his own chief accountant on the abuse of public money by the Grant Maintained Schools Centre?

Mr. Forth

If I am not mistaken, that document has been made available to the Public Accounts Committee in commercial confidence. [HON. MEMBERS: "Ah."] No, no, no. As my right hon. Friend the Chancellor of the Duchy of Lancaster said the other day, distinctions are rightly made between matters that are properly in the public domain and matters that need not be in that domain. I make no apology for that. I wholly agree with the distinction that my right hon. Friend made.

The hon. Member for Bath (Mr. Foster) was kind enough to quote me in extenso. Like many hon. Members, I suspect, I always enjoy hearing my own words— especially pearls of wisdom of the kind uttered by me at many different sittings of the Committee. The hon. Gentleman made much play of the fact that the Funding Agency for Schools would be expected to co-operate with local education authorities and to exchange information with them as required in the Bill.

I do not know whether we ever sorted out the difference between shared and parallel duties, although in the end I think that we understood very well what they meant. All that is right. However, I do not agree with the hon. Gentleman that simply because different bodies have duties and obligations to work together, they should be cross-represented—that it is necessary for members of one body to serve on the other to achieve that degree of co-operation and that exchange of information.

I believe that the degree of co-operation to which we referred in Committee should be achievable on the basis that we have identified. I think that we were right to make the concession that is contained in the Lords amendment— with which I hope the House will agree—which is designed to ensure that there is proper representation from the Churches, which are an important element, albeit a distinct element, very different from local education authorities and grant-maintained schools. That much I believe, but we cannot go as far as the hon. Member for Bath wanted us to go.

I hope that, in the brief time available, I have answered the substantive points made by Opposition Members and that, in so doing, I have brought out the important distinctions, made across different areas, referred to in the amendments. I felt, if I may say so, that the hon. Member for Ellesmere Port and Neston brushed aside the point that I made earlier about value for money and the concern that I expressed about possible infringement of the role of the Comptroller and Auditor General. The hon. Gentleman was almost cavalier about it. We must surely pay attention to the role, as defined and understood, of the Comptroller and Auditor General, as we must of the role of our own Public Accounts Committee.

I believe that my right hon. Friend the Secretary of State's amendment honours that important—

It being Seven o'clock, MR. DEPUTY SPEAKER, pursuant to the Order this day, put the Question already proposed from the Chair, That this House doth agree with the Lords in the said amendment.

Question accordingly agreed to.

Lords amendment agreed to.

MR. DEPUTY SPEAKER then put forthwith the Question necessary for the disposal of business to be concluded at that hour.

Lords amendments Nos. 8 to 24 agreed to.