HC Deb 25 April 1995 vol 258 cc651-2
9. Mr. Morgan

To ask the Secretary of State for Education what plans she has for amending the law in relation to the holding of financial balances by (a) locally managed and (b) grant-maintained schools. [19176]

Mr. Robin Squire

My right hon. Friend has no such plans.

Mr. Morgan

Do the Government agree in that case that it is totally two faced to set up a large number of systems for grant-maintained schools, for the local management of schools, for training and enterprise councils and GP fundholders—all of which require these new mini-quangos to hold financial balances—and at the same time criticise them for holding those balances? If the Government did not want them to have to hold balances, why did they set up all those mini-quangos in the first place?

Mr. Squire

Within the rules of the House, I might ask the hon. Gentleman to repeat that question, because I think that I lost him a hit when he got on to GP fundholders, which is not something I have previously answered for at the Dispatch Box.

On grant-maintained schools generally, unless things are organised dramatically differently in the Principality, balances are held by grant-maintained schools in roughly the same way as they are by local education authority schools. The majority of schools save for specific projects, but Ofsted and the Audit Commission have commented that a number do not. That is what has attracted comment.

Sir Malcolm Thornton

Is not it a fact that many of our schools hold balances for a huge variety of reasons? Is not it also a fact that one of the reasons is the way in which the local funding formula operates, and that some of the questions that have been directed to my right hon. Friend the Secretary of State should more properly be directed to the LEA, questioning why the funding formula can so often disadvantage many schools in that LEA?

Mr. Squire

My hon. Friend is, of course, absolutely right that there are a variety of reasons why schools hold balances and, indeed, acquire them. The central issue is that the success of the local management of schools has encouraged governing bodies to take a much greater say in the control over their schools, and a logical extension of that is grant-maintained status, to which earlier comments have been addressed.

Mr. Jamieson

Is not the Minister concerned that, because of the liability for grant-maintained schools to pay value added tax in the past financial year, £l7 million was spent on tax rather than books?

Mr. Squire

The short answer to the hon. Gentleman is, no, I am not concerned. Their VAT treatment follows from the nature and status of grant-maintained schools, and the Government have no plans to change that.

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