HC Deb 15 July 1998 vol 316 cc480-4

Lords amendment: No. 53, in page 37, line 2, leave out (" "general") and insert (" "local")

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Mr. Byers

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

Mr. Deputy Speaker

With this, it will be convenient to discuss Lords amendments Nos. 54 to 70, 146, 149, 158, 160, 165, 175, 180, 259, 260, 404, 405 and 407.

Mr. Byers

The amendments are grouped under the heading "Local management of schools", although they are narrowly drawn in the issues that they address, which relate to the delegation of budgets to individual schools. They fall into three broad categories. The first category of amendments relates to the names to be used in the new procedure that the Government want to adopt in delegating budgets to individual schools. They replace the general schools budget and the aggregated schools budget—most people could not understand what those terms meant, and the definitions and descriptions added to the confusion—with the local schools budget and the individual schools budget. That makes the distinction between the local education authority's responsibility, which will be the local schools budget, and the element that will be devolved to schools, which will be the individual schools budget.

The second category of amendments reflects the debate in Committee and confirms that the financial arrangements will start in the new financial year—April 1990. I mean 1999; my numeracy is letting me down again.

Mr. Damian Green (Ashford)

Never mind, it will soon be the reshuffle.

Mr. Byers

I hope so.

The new framework will start in September 1999. The amendments will put in place the procedures that will be needed to cover the interval between April and September. They particularly reflect the concerns expressed by the grant-maintained schools sector about its position in the new arrangements.

The third category contains technical amendments. The important one allows local education authorities to reclaim value added tax. It will apply also to VAT paid by the grant-maintained sector and former grant-maintained schools, which already receive that benefit.

I hope that I have adequately explained the consequences of the Lords amendments, which make considerable sense. I ask the House to agree with the Lords in these amendments.

Mrs. May

I shall speak only briefly to the amendments, because, as the Minister has made clear, they partly reflect an earlier debate on this issue. They also put in place the technical changes for the local management of schools scheme, which the Government proposed in May in their "Fair Funding: Improving Delegation to Schools" paper, by replacing the general schools budget and the aggregated schools budget with the local schools budget and the individual schools budget.

The Minister's explanation seemed to suggest that suddenly a light will shine and that changing the terminology will make the definitions extremely easy to understand. We know that reference has been made outside the Chamber to the wonderful new world in which schools will have 100 per cent. of their budgets delegated to them. In this last opportunity to consider this aspect of the Bill, it is important to put on record that the reality is far from the rhetoric. The names of the budgets will be changed, but far from schools having 100 per cent. of the budget delegated to them, they will receive 100 per cent. of what is left of the budget after the local education authority has top-sliced however much it wants to remove in certain categories.

Far from making matters simpler, there are four categories for which the local education authority will be able to retain blocks of expenditure: strategic management, access, LEA support for school improvement and special educational expenditure. Missing from the consultation document, which I fear will cause concern when the proposals are put into practice, are the definitions of those blocks of expenditure that the LEA will be able to retain before delegating the individual schools budget.

Mr. Hayes

My right hon. Friend speaks with great authority on these matters because of her background in local education authorities. The critical issue, and the point that she is seeking to make, is that there is a great difference between the potential schools budget and the amount that is devolved to schools. It would be more honest of the Government to publish those precise figures, so that people would know the potential amount and the amount that is actually devolved.

Mrs. May

My hon. Friend's point is absolutely right, although by referring to me as his right hon. Friend, he erroneously promoted me. It is important to enable people to know what amounts could have been delegated to the schools and what amounts are held back by the local education authority, so that they can make judgments about how the LEA is managing its education budget. I hope that the Minister will respond specifically to that point when he sums up.

I shall not go into the details of all the amendments in the group. I simply wanted to point out that far from all schools suddenly having a delegated budget that is much larger and gives them much more flexibility than before, the position will be exactly the same—the local education authority will be able to top-slice funds out of the overall education budget and determine the sum that will be delegated to schools.

We certainly welcome opportunities for schools to manage their own budgets. The previous Conservative Government introduced such measures. I have always been in favour of as much decision making and flexibility over budgets as possible being at local school level. However, the Government are not introducing such flexibility, but setting up, in the four blocks of expenditure that the LEAs can retain, categories that I fear LEAs will be able to manipulate to determine how much they will delegate to schools. The proposals will give LEAs the flexibility not to pass money down to schools if they so wish. That is a worrying proposal, and its real impact will be far from the Government's rhetoric.

Mr. Willis

I agree with the hon. Member for South Holland and The Deepings (Mr. Hayes) that the hon. Member for Maidenhead (Mrs. May) has a great deal of experience from her local government background. However, we get far too hung up on what percentage of budgets should be delegated to schools. The issue is the quality of service that schools and the local education authorities provide, and the resources that they each receive to enable them to do so. Before I spoke, my hon. Friend the Member for Bath (Mr. Foster) reminded me that we want the LEAs and the schools each to receive 100 per cent. of their funding so that they can all carry out their allotted tasks.

I was intrigued, before I came to the debate, to read the Minister's letter of 9 February on the percentage of budgets delegated to schools by LEAs. I picked out two LEAs: North Yorkshire, which is the excellent LEA for my constituency, and Leeds, which was my LEA when I was a practising headteacher just over a year ago. Leeds delegated 93.9 per cent. of its budget and was one of the table's top seven or eight authorities. It is a very good, innovative, Labour-controlled local education authority and has decided to delegate services such as music and special needs education.

I then looked at North Yorkshire. That LEA is in the top five virtually every year in terms of GCSE, A-level and standard assessment tests results, truancy rates and any other measure that one would care to name. However, it comes very low down the table, delegating only 90.5 per cent. of its budget in 1997–98. That is because it is a different sort of authority; it has a different organisation. The LEA has a large rural catchment area and many small rural primary schools that depend on it to provide services. It does so in agreement, not in competition, with those schools.

Baroness Blatch asked a question of the Secretary of State, which appeared in the House of Lords Hansardof 15 June 1998 at column 2161. In replying, Baroness Blackstone made it clear that consultation funding could create exactly the same problem. The hon. Member for Maidenhead has asked what services the LEA is expected to deliver and what budget it will receive, and what schools are expected to deliver and what their budgets will be. We do not want to spend a great deal of time arguing about the delegation issue. That argument has been won: it is acknowledged that schools require as much flexibility and as many resources delegated to them as possible. The whole House accepts that fundamental point.

Equally, LEAs have some important duties to perform and it is essential that we make their responsibilities clear as soon as possible. We must give them a clear budget that is open and transparent, and then we shall see which LEAs and schools deliver good services. I hope that the debate about delegation will then cease.

Mr. Byers

I shall reply briefly to this debate. I state at the outset that the whole purpose of the "Fair Funding: Improving Delegation to Schools" document, on which we are consulting, is to provide opportunities and real choices to individual schools through the delegation of even greater sums to individual school level. We believe that the prime responsibility for raising standards rests with individual schools, and particularly in the relationship that is established between a teacher and a class of pupils. That is the reality of the situation. If we are to raise standards, a school-based initiative will be necessary.

That is why the "Fair Funding: Improving Delegation to Schools" document seeks to devolve as much as possible to individual school level. The hon. Member for Maidenhead (Mrs. May) is absolutely right: the consultation document refers to four areas remaining the responsibility of individual local education authorities—strategic management, access, school improvements and special educational provision. However, there is clarity in that.

On completion of the consultation exercise, we shall make clear what we expect will fall within those four categories. In that way, the confusion and the funding fog that currently exists in relation to the delegation of budgets will be lifted. Local education authorities will know—and people and schools will see—what they can retain at the centre and what they will be required to delegate to school level.

The Bill provides an additional power that did not exist previously under legislation introduced by the Conservatives: we will have the power to cap spending levels. If a local education authority abuses its position and holds back unfairly money that should go to individual schools, as a result of the measures in the Bill, we shall have the power to cap that LEA's spending in each of the four blocks referred to in the "Fair Funding: Improving Delegation to Schools" consultation document.

We are sending a message to every local education authority: yes, LEAs need the resources to promote high standards in schools and we are giving them that welcome new duty. However, they cannot abuse that position by withholding more money than is necessary for the delivery of those four specific areas. That is how we shall push more money to school level, which will allow schools to raise standards and provide a higher quality of education.

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That consultation is continuing, and it would be inappropriate to pre-empt the outcome. In considering the responses that we have received, we shall seek to provide greater opportunities and choice for schools. They should have the choice to select local education authority provision when it is of good quality and is attractive to them. However, if a school decides that what is on offer is not appropriate, it should have the opportunity to look elsewhere. That is what we intend to do through our "Fair Funding: Improving Delegation to Schools" document. The Lords amendment reinforces that point, and I invite the House to agree with the Lords in the said amendment.

Lords amendment agreed to.

Lords amendments Nos. 54 to 70 agreed to.

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