Education (Grants and Awards) Bill

HL Deb 14 February 1984 vol 448 cc150-201

4.14 p.m.

House again in Committee on Clause 1.

Baroness David moved Amendment No. 2: Page 1, line 15, after ("him") insert ("and to bodies referred to in section 3(5) of this Act").

The noble Baroness said: The purpose of this amendment is to give the local authority associations an effective veto on the uses to which specific grants under the Bill may be put. The associations are concerned that the Secretary of State might seek to use such grants to skew the curriculum in ways that are controversial or, at worst, in pursuit of politically objectionable aims, such as the setting up of pilot schemes in selection or, indeed, for areas that are already being covered by a particular local authority, or for projects that do not seem of high priority to them. They want to be free to use their local knowledge at their own discretion. It is local authority money that is planned to be used, and, that being the case, they should have the right to say, "No".

We have various amendments down on the Marshalled List which attempt to restore a little power of choice to the local authorities. Our new clause, which appears as Amendment No. 18, suggests an advisory board. We are not satisfied with the suggestions for consultation which appear in Clause 3(5).

Behind the resentment is the fact that education spending will have declined by more than 6 per cent. in cost terms since 1978–79. This comes from the White Paper of last February. The percentage of the national cake going to education is now less than it was in the last year of the Labour Government. Spending on defence will shortly be greater than spending on education. According to the White Paper, in cost terms the expenditure on education in 1980–81 was £12,065 million; in 1981–82 it was £11,828 million; in 1982–83 it was £11,747 million; and the estimated expenditure for 1983–84 is £11,127 million—that is, about £1 billion less than in 1981. These cash figures have been adjusted for general inflation as measured by the GDP deflator at market prices; and the figures all depend, of course, on how you look at them.

The ACC reckons that the expenditure plans will mean 12,600 fewer teachers, a 40 per cent. reduction on school meals and milk and no improvement in the spending on books and on the maintenance of schools. The series of HMI reports over the last three years shows that the service is being run down, and these reports reflect a very real concern about the reduction of standards and threats to the curriculum.

Against this background, is it surprising that the local authority associations are angry and resentful? It is not only this Bill but the fear of being pushed through the ceilings into the penalty area, the fear of rate-capping and, as I said earlier, just recently the threat to hand over a very large part of non-advanced further education to the MSC. So in order to restore some confidence in central government within local government I suggest that the Government should graciously give way and accept our amendment, and allow the local authorities a definite say in what projects the education support grants are to fund. I beg to move.

Baroness Cox

May I suggest that this amendment could cause more problems than it solves? I appreciate, of course, that the local authorities have every right to be consulted, and they will indeed be consulted. The Secretary of State has ensured a position for them in the consultation process. Indeed, they will be partners in any decisions that are made. More fundamentally, the whole purpose of this Bill is precisely to give the Secretary of State some money to use at his own discretion. This is indeed desirable, because in Britain our education system has such a high degree of local autonomy that it is among the highest in the world in terms of the local autonomy enjoyed. I think the noble Baroness, Lady Lockwood, has herself acknowledged on a previous occasion the advantages of this high degree of local autonomy in meeting local needs, but she also acknowledged some concomitant disadvantages, in that sometimes the local education authorities may overlook the country's national economic and industrial needs.

The purpose of the Bill is to give the Secretary of State precisely those powers to encourage initiatives not currently being met by the present dispensation. However, this amendment as it stands, with its veto, would shift that balance back again towards the local authorities. It would also possibly cause considerable delay in setting up initiatives when time is of the essence.

May I say just a final word by way of reassurance to those who are concerned about consultation with the local authorities and their associations? The Government are concerned about that consultation to such an extent that the journal of the local education world, Education, which is not always known for its eulogistic appreciation of the Government, has actually described the Government in this case and in this Bill—and I quote—as "bending over backwards" to allay local authority sensibilities. I am not sure how a Bill bends over backwards, but I hope that the journal's response may reassure those who share the concern underpinning this amendment.

The Earl of Swinton

I am most grateful to my noble friend for what she has just said. One of the dangers of leaning over backwards is that you can get a kick on the backside from time to time, and I think that perhaps that is what is happening here. This amendment seeks to extend the involvement of the local authority associations in the process of defining what activities will attract education support grant.

This Bill already provides a far greater protection of local authority interests than does the legislation governing the urban programme which was passed when the party of the noble Baroness, who introduced the amendment, was in power. Not only is there a statutory limit on the level of expenditure which can be supported by ESGs, but Clause 3(5) provides that before making any regulations the Secretary of State, shall consult such bodies representing local education authorities as appear to him to be appropriate". This amendment, as proposed, would give the local authority associations not simply a right of consultation but, as the noble Baroness, Lady David, said, a power of veto over the activities to be eligible for support by ESGs.

Regulations setting out activities to be supported by ESGs will be subject to the affirmative resolution procedure both here and in another place. Therefore, Parliament will have the final say. But the amendment would unreasonably restrict the Secretary of State's freedom to make his proposals to Parliament regarding the content of the regulations.

I believe that the amendment goes far too far in trying to fetter the discretion of the Secretary of State. The regulations wil be laid by the Secretary of State, and the final decision regarding their contents must be his. Of course, in deciding what activities are to be included in the regulations he will have careful regard to the views expressed during his consultations with the associations. No doubt their views may find further expression during the debates on the regulations both here and in another place. There is no danger whatsoever of local authorities' views being ignored. But I believe to give the local authority associations the right of veto over the contents of regulations is constitutionally wrong, and therefore this amendment should be rejected. I hope that the noble Baroness will withdraw it.

Baroness David

To respond to what the noble Baroness, Lady Cox, said about delay, I hope there will be some delay because some delay is written into Clause 3(5). I think the comments in Education about the Secretary of State falling over backwards probably referred to the changes made in the Bill after the first suggestion was made. For instance, I believe that the 0 5 per cent. figure was put into the Bill, and that figure could only be changed by primary legislation. I suspect that those were the sort of things to which Education was referring in that article, which I read.

Having listened to the noble Earl, I shall withdraw the amendment and rely on our later Amendment No. 18 to strengthen the position of the local authorities. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.24 p.m.

Baroness Lockwood moved Amendment No. 3: Page 2, line 8, leave out ("exceeding 70") and insert ("less than 75").

The noble Baroness said: It might be helpful if I take Amendments Nos. 3 and 4 together. Amendment No. 4: Page 2, line 8, leave out ("70") and insert ("75"). My noble friend Lord Graham of Edmonton will probably also speak to Amendment No. 5 in this debate. Amendment No. 5: Page 2, line 8, leave out ("70") and insert ("90").

The purposes of Amendments Nos. 3 and 4 are somewhat different. In the first amendment it will be seen that we are seeking to remove "exceeding 70" per cent. and to insert "less than 75" per cent. In other words, we are asking that the grant for the purposes under this Bill shall be not less than 75 per cent., whereas the second amendment would have the purpose of replacing "70" by "75". In other words, the purpose of the second amendment would enable the grants to go up to 75 per cent.

It will be obvious that on this side of the Committee we are supporting and are very much in favour of the first of these amendments; that is, Amendment No. 3.

There appears to us to be no particular reason for the Government to have selected 70 per cent. in the first place. For example, under the urban aid programme, to which the noble Earl referred on the previous amendment, the figure was 75 per cent. It is felt that there would be some conformity if, under this Bill, we had the sum of 75 per cent. and, for generosity's sake, and if the Government felt so inclined, it could be above the rate of 75 per cent.

The other point behind the amendment is along the lines of the argument that my noble friend followed in the earlier debate, when we were talking about additionality or new money. The fact is, as has been said by my noble friend and by others, local education authorities are already having difficulties in meeting the costs of the services for which they are responsible, but this Bill will require them not to spend at their own discretion the money which is presently available, or which would be available, to them. The purpose of the Bill is that they will have to compete with others for a share of that money. This could cause some considerable difficulty for some local authorities, particularly those local authorities which are on the fringe of the penalty area.

We are not just talking about the 30 per cent. which the local education authorities would have to provide for any particular project. In the first place, a local education authority would have to put in a considerable amount of work and use resources in drawing up the project for which it was bidding. If it were successful, presumably the costs of preparation would be added to the total cost of the project. If a local authority was not successful, then, unfortunately from its point of view, it would have thrown money down the drain in preparing a scheme which was not acceptable to the Minister.

In addition to a local authority having to provide 30 per cent. of the cost of the project, assuming that the local authority received the full 70 per cent. it would have lost the proportion to go towards the £45 million or £46 million that the Secretary of State is clawing back for the purpose of this whole exercise. Therefore, it is our view that it would be more sensible to take a figure which has been used previously and to make that figure 75 per cent. Furthermore, we are suggesting that the 75 per cent. be the minimum grant which would be available to the LEAs. I beg to move.

Lord Graham of Edmonton

May I introduce and move the amendment in this group that stands in my name and that of my noble friend Lord Taylor of Blackburn—that is, on page 2, line 8 to leave out—

The Earl of Swinton

I think the noble Lord cannot move the amendment at this stage but he may speak to it.

Lord Graham of Edmonton

Not having moved the amendment, I now wish to speak to it. I think that my noble friend Lady Lockwood made it quite clear that it is acceptable to the Committee that we are debating a number of related topics. We are arguing about—and, certainly, I want to argue about—the premise upon which this particular part of the Bill is built. That premise is that, having lost the ½ per cent. of the rate support grant element which is given for education, authorities (if they are lucky or successful) will get hack a proportion of the costs of their bid. I am in the business of trying to minimise costs to the local authorities. It is wrapped up in these arguments in the percentage that is going to go towards the project but, at the end of the day, a London borough like Enfield—and it is not the worst though certainly not the best endowed; it may be typical; I just do not know, but it has its problems—certainly cannot afford to lose a penny of the monies that it gets either from the ratepayer or from the taxpayer.

I am also in the business of trying to persuade the Minister of the inequity of this particular part of the Bill. I can tell the Minister that there is great resentment in the London borough of Enfield—in the very limited quarter in which these matters are discussed; certainly in the Education Office, in the Education Committee and among others—because any hurt to the education budget is seen to have possible consequences. I indicated to the House at Second Reading that the figure involved at Enfield is £180,000. A ½ per cent. of the education element within the rate support grant at Enfield is £180,000. Enfield resents losing a penny of that, even though the Minister will profess that, if they are lucky, they might get back 70 per cent. of anything they have lost, providing that Enfield does something that it may not want to do but which the Minister says he is prepared to grant-aid.

Let me take the Minister very carefully through the policy of authorities who pay 30 per cent. towards the cost of a project. In Enfield, ½per cent. of the education element within the rate support grant is £180,000; and, whether we like it or not, that is £180,000 denied to the managers of education in Enfield. They have lost that money. Let us assume that they make a bid for one of the projects or in one of the spheres which the Minister says he is prepared to entertain. Let us assume that they are successful in their bid and that it is for £500,000—a not inconsiderable sum of money but not an unreasonable sum to talk of in terms of a major element. If one gets 70 per cent. towards the £500,000, Enfield will get £350,000,

The situation is that, in Enfield, they will have already lost £180,000, They will have to spend £500,000. That makes £680,000, and the grant they get is £350,000. So the net cost to Enfield in spending £500,000 is £330,000; that is, £180,000 that they have lost to begin with and £150,000 that they have to put in, besides the figure which, as my noble friend Lady Lockwood has pointed out, they may have incurred in preparing themselves for the project. If you spend £500,000 and it has cost you £330,000 then the cost to the Enfield ratepayers is 66 per cent. So 66 per cent. of £500,000 has to be funded by Enfield.

Surely the Minister ought at least to acknowledge that, when one talks in terms of being given a 70 per cent. grant, what Enfield is given is a 33⅓ per cent. grant towards an expenditure of £500,000. Even if what I am asking for—which is 90 per cent.—is reduced; if, in fact, it was reduced to any element (for example, down to 90 per cent.) and the grant was towards £450,000 and not £500,000, then the net cost to Enfield would be £230,000 and the percentage would be 46.

I can assure the Minister that there is a sense of rank unjustice not merely in Enfield but in many other places. There has been no quibble in this House and on this side at the concept of specific grants for specific purposes. What we object to is the fact that no new money is being provided. I feel that the Secretary of State really ought to address himself, and the Minister tonight ought to address himself, to the position facing councils. Can any authority afford to lose ½ per cent. of the education element within the rate support grant? I very much doubt whether any of them can. Any fat that was on the bone before now has been trimmed off a long time ago. Many authorities will actually lose the money because many of them will not make a bid since they resent the fact that they have got to make a bid for a project that they do not really want. Many of those who make a bid will not be successful. There will be some authorities who actually lose the whole of their ½ per cent., and I think that that is very wrong.

I certainly want the Minister, again on this matter, to address himself to the question about who makes local decisions. I take the view, regardless of the political complexion of the council of the London borough of Enfield, that those who are elected by the local people have a better knowledge than those in the centre—and certainly those in Elizabeth House—as to the priorities that need to be exercised by the elected people in Enfield in these matters. The Minister is going to tell the education committee at Enfield, "If you want some of your money back, then you have got to look at a fairly narrow range of options"—and of course we can look at those options and we can criticise them. But I wonder whether the Minister is prepared—and this may not be the appropriate time—to look at the other options for money to be spent upon to which no reference has been made: for instance, further education. Why is that not something for which bids can be made? Why not include special education, or primary education? What we object to in Enfield is that the Minister is using our own money to tell us what we should do and what priorities the education commttee of the London borough of Enfield should have. What I am trying to seek is the maximum support from the Government with our own money by making sure that Enfield spends the minimum amount towards the cost of a project. I beg to move.

Lord Taylor of Blackburn

I support my noble friend Lord Graham of Edmonton on this, but I am looking at it from the broader point of view and not just from the point of view of a London authority. I am looking at it throughout the country and from the point of view especially of the shire counties—for the same applies there. Some time ago the watchword of most political parties was, "Make government local" and "Bring in the local people, who know what is required in their districts!" This, again, is taking it away from the local people. My noble friend and colleague used the expression, "The fat going away from the bone and the meat". I use another expression: "The jam went away some time ago; the butter is gone and now you are taking away half the bread, too".

It is absolutely wrong for this to be carried out in this way. The only thing that we are asking for, repeatedly, and will go on asking for, is more money to the local authorities, more money for them, not the people in Elizabeth House, to decide what is best. They know something of the national situation throughout, but we know what is happening locally.

Baroness Trumpington

Before the noble Lord sits down I think I must just clarify; for when the noble Lord, Lord Graham, finished his speech he said, "I beg to move"—although we had already gone into that and when the next noble Lord got up, he said "I beg to second".

Lord Taylor of Blackburn

I beg to support.

Lord Graham of Edmonton

I beg to unmoved!

4.40 p.m.

Lord Alexander of Potterhill

I find this discussion very difficult to follow. At one stage, I took a degree in mathematics but I found the arithmetic somewhat confusing. It seemed to me that what we were discussing was a much simpler issue. Having lost the first amendment seeking that it would all be additional money, we are now discussing how close we can get to its being all additional money.

Baroness David

If I may add one word about this group of amendments, there seems to be a great deal to be said for certainty in the amount of grant, and that is what this group of amendments aims at. When I asked at Second Reading into what proportions the amount could be divided—whether it might be 60/40, 50/50 et cetera—the Minister said that it would not go below 50 per cent. But that means that a local authority has to find a great deal. So what we are aiming at is certainty, and my noble friend Lady Lockwood and I chose 75 per cent. as being in line with the urban programme. That should be both the maximum and the minimum provided, so that the local authority would be left with 25 per cent. The amount that they would have to produce would, in any case, be reduced by 5 per cent., so that that would be 25 per cent. instead of 30 per cent.

I believe, having looked at the report of the Committee stage in another place, that the excuse which the Minister gave there for reducing the figure to 70 per cent. from 75 per cent., when the urban programme and the Commonwealth immigrants scheme both stand at 75 per cent., was that the overall rate of grant paid in support of local authority expenditure as a whole has been reduced. That is a very weak reason. Is there an intention to lower the figure of 75 per cent. for the urban programme to 70 per cent., too? This excuse seems very poor to me and I hope that the Government will think again about these figures. I should like them to think in the direction of my noble friend's 90 per cent., rather than our 75 per cent.

The Earl of Swinton

These amendments would alter the provision in the Bill regarding the rate at which education support grants would be paid. It may be helpful if I explained the thinking behind the present provision. The Bill provides that grants shall be payable at such a rate not exceeding 70 per cent. of approved expenditure as may be specified in regulations. The Bill sets no lower limit on the rate, but during the debate on Second Reading I indicated that the rate is unlikely to be set below 50 per cent. So, in practice, the rate of grant is likely to be in the range between 50 per cent. and 70 per cent. of the expenditure to be supported. The Bill allows for the possibility that different rates of grant may be paid on different activities.

I do not believe that there is any single rate of grant which is necessarily right for all circumstances; it is a question of judgment and of striking a balance. The rates paid on existing grants vary widely. The police grant is paid at 50 per cent., the transport grant is in 1984–85 being paid at approximately 55 per cent. and the urban programme grant is paid at 75 per cent. This is quite an interesting point because the noble Baroness, Lady David, said that she wanted certainty, as did her noble friend Lady Lockwood. In fact, there is no sum laid down in the Act covering the urban programme grant, which was produced by the party opposite, and it is only by custom that it is paid at 75 per cent. Grants towards the cost of mandatory student awards are paid at 90 per cent.

On the one hand, the rate of grant should be sufficiently high to attract bids from local authorities. On the other hand, it should not be so high as to eliminate the authority's own contribution to the expenditure. The purpose of education support grants is to encourage local authorities to redirect their expenditure at the margin into areas of national priority. But the final decision will remain with the authorities themselves. They will have to decide whether they wish to put up some of their own money for activities which should serve to improve the quality of their education. If they are ready to do so, the Government will help them meet the cost.

There is another point which I should ask noble Lords to bear in mind. The higher the rate of grant, the more grant will be paid and the less will remain for distribution as block grant. This will be true of education support grants, as of virtually all other local authority grants. Of course, we are talking about relatively small sums in the case of education support grants. Nonetheless, a higher rate would reduce the total of block grant.

The noble Lord, Lord Graham, and his noble friend Lord Taylor mentioned the difficulties facing the LEAs. One point which has not come out so far and which I must make clear—because it is a very important one—is that the balance of expenditure which is not met by an education support grant will attract block grant. Hence, if the rate of grant for an activity was 70 per cent., the 30 per cent. contributed by the authority would itself be supported by a block grant, except for any authority who received no block grant. I cannot say whether or not this would be true of Enfield. I imagine that it would certainly be true of some of the shire counties to which the noble Lord, Lord Taylor, referred. So that that probably plays havoc with the figures of the noble Lord, Lord Graham, and I shall not go into them from this Dispatch Box. In fact, if some authorities redeploy their current expenditure to a scheme which is supported by ESGs, they may find themselves a great deal better off under this Bill.

These considerations have led the Government to specify an upper limit of 70 per cent. on the rate of grant in aiming to provide a balance between providing grants aimed at encouraging local education authorities to seek education support grants and contributing to them from their own resources. Indeed, there may be circumstances where a lower rate of grant than 70 per cent. would be appropriate; for example, where in the past a lower rate has been paid by another government body for a similar activity. In answer to the question, "Why 70 per cent. and not 75 per cent. as in the urban programme?", I have to repeat that the upper limit is a matter of judgment. I must say that the rate of 90 per cent., as suggested by the noble Lords, Lord Graham and Lord Taylor, is far too high for this type of grant where a shared commitment by both partners is so important. So I urge the noble Baroness and her noble friends to withdraw these amendments.

Lord Mulley

Before the noble Earl sits down, perhaps he could clarify a point. It seems at the moment, when the Committee is being asked to approve the legislation, that the Government are not forthcoming as to what they intend to pay by way of grant. Yet they are shortly, presumably, if it will mean anything, to issue regulations. If they can specify a figure in the regulations, which is what I understand the Bill will require them to do, why cannot they tell us now?

The Earl of Swinton

I thought I made it clear in my speech that there will be different rates envisaged for different projects under the regulations.

Lord Graham of Edmonton

I am even more disturbed by the remarks of the Minister. If, in practice, 70 can mean 50, which is what the Minister said—it could be between 50 and 70—and if by asking for 90 one assumes that it could be 50, then one has the following situation. If, in the illustration that I gave, expenditure on a project in Enfield was £500,000, and having gainsaid £180,000 in grant and obtained 50 per cent. towards it, which is £250,000, they have to pay £250,000 plus the £180,000 which they lost, they are paying £430,000 towards a project that cost £500,000, which is 86 per cent.

The Minister might say. "It is up to Enfield. The Ministry is trying to guide Enfield into spending money on projects which the Minister thinks it ought to be spent upon". Our case is quite simple. Enfield has a very good record of knowing what is best for the people of Enfield and the Minister has made a very poor and arrogant case. He believes that the people in Whitehall know better than the people in Enfield what is best for the children of the people in Enfield, and how to spend the money which has been given to them with one hand and taken back by the Minister with the other.

Baroness Lockwood

I am sorry that the Minister has not been more sympathetic towards this group of amendments. He said that we were talking about grants for areas of national priority. The Bill says nothing about areas of national priority and we do not know what those areas will be. We shall not know until the Bill has been passed. Therefore we are discussing matters in the dark. A number of projects have been suggested: in the consultative document, in the discussions in another place and in our discussions on Second Reading, but we do not yet know what the projects will be. Therefore nobody at this stage can judge how much priority to attach to them.

We accept that the urban grant is very important. The noble Earl said that no specific figure has been laid down for the urban grant and that it is by virtue of practice that the figure of 75 per cent. has been awarded. There is no likelihood that we shall arrive by consensus at a particular sum. The Government have chosen 70 per cent., but I am not convinced by the arguments of the noble Earl that any real thought has been given to that figure. As the noble Earl said, the figure could vary between 50 per cent. and 70 per cent. When the regulations are published, the authorities will presumably know what grants the projects in the different areas will attract, but they will not always know sufficiently in advance for planning purposes. Authorities make long-term plans; they do not think just about what they are going to put into next year's budget. They have in mind a much longer time span when planning their programmes. They will therefore be in some difficulty.

To be realistic, the figure ought to be at least 75 per cent., although I suspect that the agreed figure would be 75 per cent. In that case, local education authorities would know what to expect and they would be provided with more background information for planning purposes. We have to take into account the fact that local education authorities have their own priorities. If the Bill is passed in its present form, some of the projects will have to supersede the priorities of local education authorities. I believe that some of the areas to be covered by the Bill should be areas of national priority which ought to attract at least a 75 per cent. grant, which would encourage local education authorities to put forward their bids.

4.54 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 91; Not-Contents, 139.

DIVISION NO. 2
CONTENTS
Airedale, L.	Llewelyn-Davies of Hastoe, B
Amherst, E.	Lloyd of Hampstead, L.
Ardwick, L.	Lloyd of Kilgerran, L.
Attlee, L.	Lockwood, B.
Aylestone, L.	Longford, E.
Banks, L.	Lovell-Davis, L.
Barnett, L.	McNair, L.
Beaumont of Whitley, L.	Mayhew, L.
Birk, B.	Milford, L.
Bishopston, L. [Teller.]	Molloy, L.
Blyton, L.	Morris of Grasmere, L.
Briginshaw, L.	Mullev, L.
Brockway, L.	Nicol, B.
Bruce of Donington, L.	Oram, L.
Burton of Coventry, B.	Ponsonbv of Shulbrede, L. [Teller.]
Caradon, L.
Chitnis, L.	Raglan, L.
Cledwyn of Penrhos, L.	Ridley, V.
Collison, L.	Rochester, L.
Cooper of Stockton Heath, L.	Ross of Maraock, L.
David, B.	Seear, B.
Davies of Penrhys, L.	Sefton of Garston, L.
Denington, B.	Segal, L.
Diamond, L.	Shinwell, L.
Elwyn-Jones, L.	Simon, V.
Ennals, L.	Stallard, L.
Fisher of Rednal, B.	Stedman, B.
Fitt, L.	Stewart of Alvechurch, B.
Foot, L.	Stewart of Fulham, L.
Gaitskell, B.	Stoddart of Swindon, L.
Glenamara, L.	Stone, L.
Graham of Edmonton, L.	Strabolgi, L.
Gregson, L.	Taylor of Blackburn, L.
Grimond, L.	Taylor of Gryfe, L.
Hale, L.	Taylor of Mansfield, L.
Hall, V.	Tordoff, L.
Hatch of Lusby, L.	Underhill, L.
Hughes, L.	Wallace of Coslany, L.
Jacques, L.	Walston, L.
Jeger, B.	Whaddon, L.
Jenkins of Putney, L.	White, B.
John-Mackie, L.	Wigoder, L.
Kagan, L.	Wilson of Langside, L.
Kilmarnock, L.	Winstanley, L.
Kirkhill, L.	Winterbottom, L.
Leatherland, L.	Wootton of Abinger, B.

NOT-CONTENTS
Airey of Abingdon, B.	Bauer, L.
Alexander of Potterhill, L.	Belstead, L.
Alexander of Tunis, E.	Bessborough, E.
Allerton, L.	Broadbridge, L.
Alport, L.	Bruce-Gardyne, L.
Ampthill, L.	Caccia, L.
Auckland, L.	Carnegy of Lour, B.
Avon, E.	Cathcart, E.

Chelmer, L.	Luke, L.
Cockfield, L.	Lyell, L.
Coleraine, L.	McAlpine of Moffat, L.
Constantine of Stanmore, L.	McAlpine of West Green, L
Cork and Orrery, E.	McFadzean, L.
Cottesloe, L.	Mancroft, L.
Cox, B.	Mar, C.
Craigavon, V.	Margadale, L.
Crawshaw, L.	Marley, L.
Cullen of Ashbourne, L.	Marshall of Leeds, L.
Daventry, V.	Melville, V.
Davidson, V.	Merrivale, L.
De La Warr, E.	Mersey, V.
Denham, L. [Teller.]	Milverton, L.
Drumalbyn, L.	Morris, L.
Dundee, E.	Mottistone, L.
Ebbisham, L.	Mowbray and Stourton, L.
Effingham, E.	Murton of Lindisfarne, L.
Ellenborough. L.	Northchurch, B.
Elliot of Harwood, B.	Nugent of Guildford, L.
Elphinstone, L.	O'Brien of Lothbury, L.
Elton, L.	Orkney, E.
Enniskillen, E.	Orr-Ewing, L.
Faithfull, B.	Pender, L.
Fanshawe of Richmond, L.	Peyton of Yeovil, L.
Fortescue, E.	Plummer of St. Marylebone, L.
Fraser of Kilmorack, L.
Gainford, L.	Porritt, L.
Geoffrey-Llovd, L.	Portland, D.
Gibson-Watt, L.	Radnor, E.
Gisborough, L.	Rankeillour, L.
Glanusk, L.	Rodney, L.
Glasgow, E.	Romney, E.
Glenarthur, L.	St. Davids, V.
Glenkinglas, L.	Saint Oswald, L.
Gormanston, V.	Saltoun, Ly.
Gray of Contin, L.	Savile, L.
Grimston of Westbury, L.	Seebohm, L.
Grimthorpe, L.	Selborne, E.
Hailsham of Saint Marylebone, L.	Sempill, Ly.
	Shannon, E.
Hanson, L.	Sharples, B.
Hempill, L.	Skelmersdale, L.
Henley, L.	Sligo, M.
Hives, L.	Stodart of Leaston, L.
Holderness, L.	Strathcarron, L.
Home of the Hirsel, L.	Strathclyde, L.
Hornsby-Smith, B.	Sudeley, L.
Hylton-Foster, B.	Suffield, L.
Ilchester, E.	Swinton, E.
Ingrow, L.	Terrington, L.
Kaberry of Adel, L.	Teviot, L.
Killearn, L.	Thomas of Swynnerton, L.
Kilmany, L.	Thorneycroft, L.
Kimberley, E.	Tranmire, L.
Kinloss, Ly.	Trumpington, B.
Lane-Fox, B.	Vaux of Harrowden, L.
Lauderdale, E.	Vivian, L.
Lawrence, L.	Westbury, L.
Liverpool, E.	Whitelaw, V.
Long, V. [Teller.]	Wynford, L.
Loudoun, C.	Young, B.
Lucas of Chilworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 4 and 5 not moved.]

Clause 1 agreed to.

[Amendment No. 6 not moved.]

Clause 2 [Limit on expenditure approved for grant purposes]:

5.3 p.m.

Baroness Lockwood moved Amendment No. 7: Page 2, line 42, leave out ("0/") and insert ("0.25").

The noble Baroness said: The purpose of this amendment is to reduce the total amount available for grants under this particular Bill from one half of 1 per cent. to one quarter of 1 per cent. When we had the Second Reading of the Bill in this House, the noble Earl the Minister said that we were talking about expenditure "at the margin". He has repeated that statement again today. On the Second Reading, he pointed out that if the grants had been paid out this year, they would have amounted to £33 million, compared with a total Exchequer grant of £ 11.8 billion. That figure of £11.8 billion includes £8.7 billion block grant and £2.4 billion specific and supplementary grants.

In fact, we are not really talking about a small amount, as the noble Earl implied, because we are discussing the £8.7 billion block grant less a very substantial amount in relation to teachers' salaries, which I understand amount to at least 70 per cent. of the total grant given to local authorities. Then there are other costs which cannot be varied. Therefore, if we were to take the £8.7 billion as being the starting point and reduce that amount by the various sums which are static, it can be seen that the balance left to local authorities for their discretionary expenditure is a very small amount. The £46 million then becomes a much more substantial element of the amount which is left to them.

At the Second Reading, my noble friend Lady David said: The Secretary of State is creating the most powerful force for the central direction of the curriculum that this country has ever seen. The half per cent.—the £45 million—will give the department a budget of at least 10 times that of the schools council and far exceeds the margin available to LEAs collectively for curricular developments".—[Official Report, 19/1/84; col. 1168.] So we are not really talking about a small sum at the margin; we are talking about a sum which is a very significant amount to the local education authorities concerned.

As I said on the last amendment, we have not yet decided the categories on which this money will be spent. There will be some consultation, and we have been told by the Minister that there have already been three meetings between the Secretary of State and the local authority bodies concerned. I understand that those three meetings have not been very productive so far.

The fact is that the meetings, when they do take place, and the subsequent regulation, when we get it, will be on a sum of money which we have already determined, although we do not know on what that money is to be spent. I am therefore suggesting that if we do not know on what this money is to be spent, it would be better to leave local authorities with more discretion to follow their own priorities and reduce the amount from one half of 1 per cent. to one quarter of 1 per cent.

Another factor we have to bear in mind is the statement made, I believe at Second Reading (and certainly it was made in another place), that the Government are not expecting to use up the whole of the £46 million in the first years, but expect to build up to the total amount that they will be able to obtain under this particular Bill. It seems that this has not been properly worked out by the Government. If we were talking about national priorities, we would have had our consultation already and would have determined what the national priorities were. Then we could have decided how much we needed and how much we could afford to spend on those priorities. Instead, we have this Bill, which tells us little about national priorities. Yet we are expected to give a blank cheque to the point of 0.5 per cent. of the education expenditure.

In the light of all those circumstances, and in the light of the fact, as we have said already, that many local authorities are already running into difficulties—or are at the margin of running into difficulties with overspending and could thus just be pushed into the penalty area if they were to be successful in obtaining one of these grants—we are moving the amendment so that the total amount be reduced from 0.5 per cent. to 0.25 per cent. of expenditure. I beg to move.

Baroness Cox

I am a little surprised to hear the noble Baroness, Lady Lockwood, arguing for a reduction in the size of the education support grants, because she, together with her noble friend Lady David, are among those who have very clear ideas of very good purposes to which these grants should be put. In later amendments they are each advocating earmarking at least 20 per cent. of amounts available for specific and indeed very worthwhile purposes. So I suspect that there must be some ambivalence in their position if they are simultaneously advocating earmarking money for eminently good causes and at the same time recommending a reduction in the overall amount, which might mean that such money might not be available to fund those very worthwhile causes.

However, I think their enthusiasm does suggest that there will be no shortage of good and worthwhile causes meriting support from these grants, and that the amount to be made available should therefore not be reduced but should remain at 0.5 per cent.

The Earl of Swinton

I am grateful to my noble friend once again for pointing that out. I must say I was rather intrigued when the noble Baroness, Lady Lockwood, spoke about a blank cheque of 0.5 per cent. If I was offered a blank cheque of half of one per cent. I would not think it was a very good blank cheque. I certainly would therefore totally refute the idea that this is a blank cheque.

The effect of this amendment would be to reduce by half the upper limit on expenditure approved for the purposes of ESGs. If we take 1983–84 as an example, the upper limit for expenditure by LEAs in England would have been around £23 million instead of £46 million. The Government have repeatedly made it clear that this Bill is concerned with a limited redeployment of expenditure. That is why the Government decided to include an upper limit in the Bill. I can indeed confirm what the noble Baroness, Lady Lockwood, said, that my right honourable friend stressed during the Second Reading debate in another place that he did not envisage reaching the upper limit at the outset. It is our intention that the level of expenditure supported by these grants should build up over a period of years. At the same time, it is important that the limit placed on the grants is not so restrictive as to make the whole exercise less worthwhile.

Let me put the figure of £46 million in perspective. Estimated specific and supplementary grants in 1983–84 total approximately £2.4 billion. They include grants totalling £65 million under the Commonwealth Immigrants Scheme and £150 million under the urban programme. Incidentally, that, by my calculations, is about three times as much as this present scheme, and both these measures were introduced by Labour Administrations.

Reference has been made to local authorities' fixed costs. These limit the scope for redeployment and, the argument runs, make the proportion of one half of one per cent. bigger in effect than it sounds. I see the argument about fixed costs, but I do not believe that the comparatively modest redeployment implied by the grant proposals is unobtainable. It would, of course, be for an authority to decide whether it felt able to redeploy its expenditure and bid for ESG funds for a particular activity. There continues to be scope for further savings within local authority budgets—especially in the higher spending authorities—in areas such as caretaking and cleaning costs, school meals and the removal from use of surplus school places.

The noble Baroness, Lady Lockwood, mentioned the important point about expenditure on teachers' salaries. I would confirm that these do in fact account for about 70 per cent. of total schools' expenditure. But even here some flexibility is provided through staff turnover. About 7½ per cent. of school teachers leave the service each year. Others change jobs or are assigned to new work by their employers. Turnover of this scale would permit LEAs some flexibility to redeploy their existing expenditure in line with the new grants, if they wished to do so.

I believe, therefore, that an upper limit of one half of one per cent. strikes the right balance between a sum which is too low to permit the range of important initiatives identified by my right honourable friend—and here I was delighted that my noble friend Lady Cox mentioned the fact that even noble Lords opposite think that there are some things which could benefit from this grant—and a sum which is so high as to represent an unacceptable increase in the total of specific grant.

This House has endorsed the principle of the Bill. I really think that if we get down to one quarter of one per cent. we are really very nearly talking about peanuts. I hope therefore that this amendment, which would severely restrict the Bill's practical benefits, will be withdrawn.

Baroness David

I wonder if the noble Earl could say something more about the slow build-up he mentioned. If the Secretary of State is so keen on innovation in the curriculum and experiment, why is he taking these powers to himself in this Bill and then deciding not to use them for several years? I gather that in the debates in Committee in another place the Minister, Mr. Dunn, said perhaps there might be only one scheme at first. It does seem to me the most extraordinary behaviour to take the power and then do nothing with it. If he is really not going to do anything with it, why not reduce the figure which he is going to take out of the rate support grant, as we are suggesting in the amendment?

So far as concerns the savings the local authorities are said still to be able to make, I really am very doubtful about this, particularly when caretaking and cleaning costs are mentioned. I know that in my authority they have gone over to private cleaning and there has been absolute uproar in the schools; in fact two schools had to be closed because the lavatories and cloakrooms were so filthy. I do not believe there is quite so much possible in the way of further savings in a great many authorities which have tried very hard and are very hard-pressed indeed. I would hope that the Minister can say something about this slow buildup of one or two schemes to start with.

The Earl of Swinton

It seems common sense when embarking on a new scheme to go fairly softly at first. On the other hand, this is primary legislation, and if we did not have the whole one half of one per cent. it would obviously mean coming back with further legislation when the scheme is fully operational. I do not see any harm at all in the "softly softly catchee monkee" approach.

Baroness Lockwood

I wonder if I might first of all reply to Lady Cox, who expressed surprise at my noble friend and I supporting this particular amendment in view of our later amendments; she suggested we were ambivalent. I do not think we are at all ambivalent. I think it is the Government that are being ambivalent. If the Government knew what they wanted to spend the money on then I think we could look at the situation objectively, but the Government at the present time do not know what the money is going to be spent on. The purpose of the later amendments is to try to identify what it should be spent on.

The Earl of Swinton

I am sorry, but I think that is rather unfair. The noble Baroness says that if we ask for consultation and say we want to find out what people want to spend the money on, then we have not got any definite plans. On the other hand, if we do not consult we are told that we are not consulting people and our minds are firmly fixed. I do not think the noble Baroness can have it both ways.

Baroness Lockwood

The process of consultation usually takes place before a Bill is placed before the House. Had there been proper consultation before the Bill was introduced we would all have known where we were. This is one of the difficulties local authorities are now faced with. They are being asked to consult after some of their power has been taken away from them. They may have been perfectly happy to give up some of their own powers had they known exactly what the money was going to be spent on. So I really do not think there is any ambivalence here.

I think the difficulty is the approach which the Government have taken to the whole of this Bill. On this side we recognise that there are some very important national priorities in our education system, and we would welcome an opportunity to discuss those national priorities. But we are not doing that under this Bill. We are taking away from local authorities a certain percentage—0.5 per cent.—of their income and it will be used at the discretion of the Secretary of State—"discretion of the Secretary of State" was a phrase used by noble Lords and noble Baronesses opposite. It is in that context that we on this side of the Committee are saying that if we do not know what the money is to be spent on we would prefer that a smaller amount be taken away from the local education authorities in the first place.

5.20 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 130.

DIVISION NO. 3
CONTENTS
Ardwick, L.	Kirkhill, L.
Barnett, L.	Leatherland, L.
Birk, B.	Llewelyn-Davies of Hastoe, B
Bishopston, L.	Lloyd of Hampstead, L.
Blyton, L.	Lockwood, B.
Brockway, L.	Longford, E.
Brooks of Tremorfa, L.	Lovell-Davies, L.
Bruce of Donington, L.	Melchett, L.
Caradon, L.	Milford, L.
Carmichael of Kelvingrove, L.	Mishcon, L.
Cledwvn of Penrhos, L.	Morris of Grasmere, L.
Collison, L.	Nicol, B.
David, B.	Northfield, L.
Davies of Penrhys, L.	Oram, L.
Dean of Beswick, L.	Ponsonby of Shulbrede, L. [Teller.]
Elwyn-Jones, L.
Ennals, L.	Ross of Marnock, L.
Fisher of Rednal, B.	Sefton of Garston, L.
Fitt, L.	Shinwell, L.
Gaitskell, B.	Stallard, L.
Glenamara, L.	Stewart of Alvechurch, B.
Graham of Edmonton, L. [Teller.]	Stewart of Fulham, L.
	Stoddart of Swindon, L.
Hale, L.	Stone, L.
Hall, V.	Taylor of Blackburn, L.
Houghton of Sowerby, L.	Taylor of Mansfield, L.
Hughes, L.	Underhill, L.
Jacques, L.	Wallace of Coslany, L.
Jeger, B.	Whaddon, L.
Jenkins of Putney, L.	White, B.
Kagan, L.	Wootton of Abinger, B.

NOT-CONTENTS
Airey of Abingdon, B.	Cox, B.
Alexander of Potterhill, L.	Craigavon, V.
Alexander of Tunis, E.	Cullen of Ashbourne, L.
Allerton, L.	Daventry, V.
Alport, L.	Davidson, V.
Ampthill, L.	Denham, L. [Teller.]
Auckland, L.	Drumalbyn, L.
Bauer, L.	Dundee, E.
Bellwin, L.	Ebbisham, L.
Belstead, L.	Effingham, E.
Bessborough, E.	Ellenborough, L.
Bruce-Gardyne, L.	Elliot of Harwood, B.
Caccia, L.	Elphinstone, L.
Campbell of Croy, L.	Elton, L.
Carnegy of Lour, B.	Enniskillen, E.
Cathcart, E.	Faithfull, B.
Chelmer, L.	Fanshawe of Richmond, L.
Cockfield, L.	Fortescue, E.
Coleraine, L.	Gainford, L.
Constantine of Stanmore, L.	Geoffrey-Lloyd, L.
Cork and Orrery, E.	Gibson-Watt, L.
Cottesloe, L.	Gisborough, L.

Glanusk, L.	Morris, L.
Glenarthur, L.	Mottistone, L.
Glenkinglas, L.	Mowbray and Stourton, L.
Gormanston, V.	Murton of Lindisfarne, L.
Grimston of Westbury, L.	Northchurch, B.
Grimthorpe, L.	Nugent of Guildford, L.
Hailsham of Saint Marylebone, L.	O'Brien of Lothbury, L.
	Orkney, E.
Hampden, V.	Pender, L.
Hanson, L.	Peyton of Yeovil, L.
Hemphill, L.	Platt of Writtle, B.
Henley, L.	Plummer of St. Marylebone, L.
Hives, L.
Home of the Hirsel, L.	Portland, D.
Hylton-Foster, B.	Radnor, E.
Ilchester, E.	Rankeillour, L.
Ingrow, L.	Rodney, L.
Ironside, L.	Romney, E.
Kaberry of Adel, L.	St. Aldwyn, E.
Killearn, L.	St. Davids, V.
Kilmany, L.	Saint Oswald, L.
Kimberley, E.	Saltoun, Ly.
Kinloss, Ly.	Savile, L.
Lane-Fox, B.	Sempill, Ly.
Lauderdale, E.	Sharples, B.
Liverpool, E.	Skelmersdale, L.
Long, V. [Teller.]	Soames, L.
Loudoun, C.	Stodart of Leaston, L.
Lucas of Chilworth, L.	Strathcarron, L.
Luke, L.	Strathclyde, L.
Lyell, L.	Sudeley, L.
McAlpine of West Green, L.	Suffield, L.
McAlpine of Moffat, L.	Swinton, E.
McFadzean, L.	Terrington, L.
Mancroft, L.	Thomas of Swynnerton, L.
Margadale, L.	Thorneycroft, L.
Marley, L.	Tranmire, L.
Marshall of Leeds, L.	Trumpington, B.
Maude of Stratford-upon-Avon, L.	Vaux of Harrowden, L.
	Vivian, L.
Melville, V.	Westbury, L.
Merrivale, L.	Whitelaw, V.
Mersey, V.	Wynford, L.
Milverton, L.	Young, B.
Monk Bretton, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.29 p.m.

Lord Stewart of Fulham moved Amendment No. 8:

Page 2, line 43, at end insert— ("( ) The Secretary of State shall prepare and lay before Parliament before the determination of the Rate Support Grant for the financial year following a statement of expenditure incurred in the preceding financial year under section 1(3)(a) above.").

The noble Lord said: This amendment, like some we have discussed earlier, is concerned with the principle of additionality, or whether there should be new money for these specific grants. As we have discussed the matter earlier I do not think it need detain us long. I am encouraged to move the amendment in view of what has been said by members of the Government on the finances of the matter. A little earlier this afternoon the noble Earl, Lord Swinton, told us that we were in error if we supposed that the aggregate Exchequer grant was made up by adding together specific grants—rate support grant, and so on—and that it worked the other way round; that the Government decided, as a matter of policy, what the aggregate Exchequer grant to local authorities would be. That being decided, one then deducted such specific grants as there were and the rate support grant was what was left. That was the doctrine as announced from the Government Front Bench this afternoon.

However, I see that on Second Reading the Secretary of State expressed a different view. He said that the Government will take a wide range of factors into account, including the expenditure to be supported by specific grants, before making a decision about the level of aggregate Exchequer grant. That is to say, in the Secretary of State's view, one considers first what specific grants one is going to make and in the light of that and other factors one decides what the total Exchequer grant is going to be. That is the reverse of what we were told this afternoon. In the light of that it seems to me that it might be helpful for Parliament and the public to have the opportunity of a little more information as to how the finances of this will work out.

That is why we make the proposal in this amendment that before the rate support grant for a particular financial year is decided there should be a statement of the expenditure incurred in the previous year under this Bill. If we had that information the public would be able to discover as the years went by what was the effect of the introduction of the Act, whether it was providing new money for the local authorities or whether it was simply passing round the hat among them all for the benefit of a limited number. The Government cannot tell us that they are wedded absolutely to something on principle which prevents them from doing that, because they have already expressed two contradictory views about how the whole thing works. This information—and the amendment asks for no more than information—would be useful to the public and should be provided.

The Earl of Swinton

The purpose of the noble Lord's amendment can be met without the need for a special statement by the Secretary of State. The noble Lord is concerned that Parliament should know how much had been spent by local authorities on ESG activities in, say, year one, when towards the end of year two the rate support grant settlement is considered for year three. The rate support grant report for year three will include a figure for the amount of education support grants to be paid in year three; and this amount will be deducted from the total amount of Exchequer grant in order to calculate the balance of rate support grants. From successive RSG reports noble Lords will be able to compare the figure for education support grants for successive years, as annex B of the RSG report has traditionally listed the totals for each of the specific grants.

The appropriation accounts are generally published in the autumn following the finanical year to which they relate, and I understand that the intention is to publish them earlier in future. Therefore the appropriation accounts published in year two will show the amount paid in education support grants in year one. The accounts for year one will be published before the RSG report for year three. It would be possible to add a footnote to the accounts showing the amount of expenditure by LEAs in year one in support of which the grants had been paid if that would be helpful—although I think the main concern of the noble Lord, Lord Stewart of Fulham, is with the amount of grant paid.

In addition, of course, noble Lords will know from the published estimates how much the Government are planning to spend on education support grants in year two, prior to the RSG settlement for year three. I hope that this range of information will be sufficient for the noble Lord and that he will withdraw his amendment.

Lord Stewart of Fulham

I think I understand that, though I shall feel more certain tomorrow after I have had an opportunity of reading it. I dare say other noble Lords feel the same. Perhaps it means that we shall have some information of the kind for which I was asking. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.35 p.m.

Lord Kilmarnock moved Amendment No. 9:

Page 2, line 43, at end insert— ("( ) Should the total funds available for the payment of education support grants exceed expenditure in this area for any year, the residue shall be returned to local education authorities for general educational expenditure.").

The noble Lord said: The object of this amendment is very clear. The Secretary of State, having appropriated 0.5 per cent. of the education budget, plans to redistribute it into such schemes as meet with his approval. However, if no schemes or insufficient schemes which meet with his approval come forward he will be left with the money or some of it on his hands. Equally, if local education authorities are frightened to come forward with schemes that would or might meet with his approval because the schemes would take them into penalty, he will be left with money on his hands. This amendment is designed to ensure that any such money is returned to the education system and not sent to the Treasury or used for some other purpose. I beg to move.

Baroness Cox

I should like to suggest that it seems most unlikely that the consideration underpinning this amendment will come about. It has already been indicated that there will be no shortage of good ideas for projects which would merit the education support grants. This is instanced not only in amendments yet to be discussed but also in the suggestions which have been put forward in a very tentative way in discussions in another place. Also, if we look at the past, local education authorities' previous initiatives have led to a very widespread response. For example, the Manpower Services Commission's technical training initiative has been taken up very widely. Therefore, I beg to suggest that the concern underpinning the amendment has no real substance.

Baroness David

I find it rather strange that the noble Baroness, Lady Cox, should say that it is unlikely that money will be left over. On a previous amendment we heard that there was going to be a very slow build-up and that there might be only one or two projects in the first year. So I do not see that that quite matches.

The Earl of Swinton

I think we are getting into slightly troubled waters. As I understand it, a sum of money will be made available for the education support grant scheme. Money that is not claimed by local authorities for the use of that scheme will go back into the general rate support grant. What we are talking about here, as I understand it, is money that authorities say they will spend on the scheme. Then for some reason they change their mind and find they cannot. I believe that is what we are arguing about. I am trying to catch the eye of the noble Lord, Lord Kilmarnock, to see whether he would nod at me or shake his head, but I cannot do it.

This is an amendment which I cannot support. I hope that I shall be able to persuade noble Lords that their amendment is unnecessary. To do so I must briefly describe how the proposed grants will fit into the wide financial relationship between central and local government. Each year, as part of the rate support grant settlement, the Government determine the total amount of grant which will be made available in the coming year in support of expenditure by local authorities. That grant is divided into two broad parts—specific and supplementary grants on the one hand, and rate support grants on the other. The estimated amount which will be paid to local authorities in specific and supplementary grants is deducted from the total and the balance is distributed as rate support grants, in accordance with the principles described in the annual rate support grant report.

Perhaps here might be a good opportunity for me to reply to the noble Lord, Lord Stewart of Fulham, on the point he made on his last amendment. There is no question of a detailed series of plusses and minuses. What my right honourable friend said in another place was in very general terms and related to the broad total of overall specific grants. I do not think there was really any difference between what he said in another place and what I said here earlier this afternoon.

The effect of the amendment would be that, if the estimated amount of education support grants made in the original RSG report proved too high, a revised, lower, figure would be substituted at a later stage and the total of rate support grants would be increased accordingly. This is not the general practice regarding the total of rate support grants. Clearly if the total were to be adjusted it could move either way, up or down, and that would introduce an unwelcome additional uncertainty into local authorities' budgeting regarding the amounts of rate support grants which they would receive.

In practice, I do not believe that that will make much difference so far as education support grants are concerned. Unlike some other grants, they will not be open-ended. It is envisaged that the amount of expenditure which the Government propose should be supported by ESGs will be set out well in advance. Local Authorities will be invited to apply for a share of the grant total. We envisage that this process of making bids will be completed well in advance of the beginning of the financial year—I think that it was the noble Baroness, Lady Lockwood, who said previously that as early as possible would suit the local authorities, and we would concur with that—and before the RSG report for that year is laid before Parliament. Hence the estimates of the amount of education support grants made in the RSG report will be able to take account of whether the bids from LEAs are more or less than the figure originally proposed. If their applications fall short of the total originally envisaged by the Government, the estimate in the RSG report would reflect that. Therefore, if local authorities whose bids have been accepted spend at the level at which they had wanted to spend, the total grant set aside for ESGs would not be underspent. In those circumstances, I believe that a signficant shortfall from the estimate made in the RSG report to the amount actually spent in education support grants is very unlikely to occur.

Lord Kilmarnock

I am most grateful to the noble Earl for that explanation, if I understood it 100 per cent. Like the noble Lord, Lord Stewart of Fulham, I should like tomorrow to look at what the noble Earl has said. But two points immediately come to mind. The first concerns what the noble Baroness, Lady Cox, said about there being no shortage of good ideas and that therefore there is not likely to be any shortfall in demands on the money and grants. That would seem to me to be a very good reason for not rejecting the amendment, just in case anything fell by the wayside.

I turn to the points raised by the noble Earl. Clause 2 of the Bill states: the Secretary of State in pursuance of section 1(3)(a) above shall not exceed 0.5 per cent. of the amount determined by him for that year in accordance with this section". Therefore, it seems quite clear that he is bound to determine an amount for the year. I think I also heard fall from the noble Earl's lips the statement that the amount available would be set out well in advance. That would seem to open the way to the possibility of applications falling short of the amount available that was set out in advance, and that is the situation which my amendment was designed to correct. However, I realise that these matters are slightly complicated and so I should like to look very carefully at what the noble Earl has said and possibly come back with a similar amendment at the Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Baroness David moved Amendment No. 10: Page 3, line 2, after ("section") insert ("and shall report to Parliament the views of Her Majesty's Inspectors of Schools on the continuing need for the Secretary of State for Education and Science to determine")

The noble Baroness said: The Bill is probably the first piece of legislation which imposes on the Government a duty to reach a view on the amount of local authority expenditure on a particular service in the context of rate support grant and in the absence of a major proportion of the funding coming from specific or supplementary grants. Local authorities are ambivalent about such a development. It is necessary to provide a limitation on the powers of the Secretary of State in the context of the Bill.

On the other hand, the Bill represents a further inroad into local autonomy. The Secretary of State is seen as becoming more accountable for the totality of spending on education. It might be possible to turn such a situation to the advantage of the education service in particular and of local government in general.

Increasingly the Government have been setting unrealistic expenditure targets for individual local authorities and for local government spending in total. That lack of realism and detachment from the effects locally of Government spending policies could be exploded by this amendment. For some years now HMI has reported to the Secretary of State on the effects of expenditure policies on the education service and has seriously criticised those observed effects. Those reports have been retrospective. In fact last year's report came out very late, in July—the previous ones came out in February—and the chance of influencing the following year's expenditure becomes less the later the report comes out.

However, the amendment provides for a forward look at the position at the time when decisions are still fresh in the minds of Members of Parliament. This could be a useful by-product of the Secretary of State for Education and Science having a duty to take a view upon the total local government expenditure on education.

I was cheered to see an Answer to a Question by the Secretary of State in another place on 7th February last. He was asked whether HMI has a profound influence on standards of education, and whether he was satisfied that there are enough inspectors in post. He replied, as reported at col. 747 of the Official Report, I agree that HMI has a great influence on standards of education. Because of the range of its coverage, a recruitment programme is now going on to increase its strength". So I am glad to see that there are to be more HMIs and I hope that perhaps one of their duties will be to do what this amendment asks, so that there can be some kind of report on what the education support grants are being spent on. It would be very valuable to have an independent view, and that is what we should get from the HMI. I beg to move.

Lord Alexander of Potterhill

I wonder whether the noble Earl can tell us whether Section 1 of the Education Act 1944 has been abolished altogether? That section provides for the administration of the education service by local education authorities under the Minister's control and direction. What I gather is now being proposed is that he has no right to have any control at all; somebody else must have it.

The Earl of Swinton

I can assure the noble Lord, Lord Alexander of Potterhill, that whatever it was he said has been done to the Act has not been done to it.

The effect of the amendment would be to provide that under Clause 2(2) for each financial year the Secretary of State would determine the planned level of total local authority expenditure from which the grant limit of half a per cent. will be derived, and would report to Parliament the views of Her Majesty's Inspectorate on the continuing need for him to do this. However, I do not think that that is the intention behind the amendment. I have gathered from the noble Baroness opposite that the intention behind the amendment is that the Secretary of State should be required to report to Parliament the views of Her Majesty's Inspectorate on, in effect, the Government's plans for local authority expenditure on education.

I can assure your Lordships' Committee that my right honourable friend listens most carefully to the advice and reports which he receives from Her Majesty's Inspectorate. I should remind the Committee that the decision to publish the annual report on the effects of local education authorities' expenditure policies was taken by a Government of my party. My right honourable friend has extended this policy to include the publication of all formal reports by Her Majesty's Inspectorate, and I believe that that move has been welcomed in all parts of the Chamber. Those actions reflect the value which my right honourable friend attaches to the advice given by Her Majesty's Inspectorate, and I can assure the Committee that that applies equally to advice on spending on educational provision and other educational matters.

However, I do not consider that the Government should be required to commission and to publish the further report mentioned in the amendment. Indeed, I believe that it would be improper so to do. Noble Lords opposite are asking the Committee to make an amendment requiring a Minister to report the views of his advisers about a decision which, in the light of their advice, he has taken. I hope that the noble Baroness will withdraw the amendment.

Baroness David

I should like to read carefully what the Minister has said and if I am not satisfied with his reply, I can come back on Report. But for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness David moved Amendment No. 11:

Page 3, line 38, at end insert— ("( ) In section 8 of the Local Government Finance Act 1982 there shall be added— (12) No determination made for the purpose specified in subsection (6)(cc) of the said section 59 of the Local Government Planning and Land Act 1980 shall have effect so as to decrease the amount of block grant payable to a local authority in any year on account of any cash increase in expenditure in respect of which Education Support Grants are paid to that authority under section 1(3)(a) of the Education (Grants and Awards) Act 1984.".").

The noble Baroness said: We now come to an important amendment which deals with penalties and attempts to avoid local authorities having to pay penalties if they get into that area as a result of spending on education support grants. The Explanatory and Financial Memorandum to the Bill explains that Part 1, is intended to facilitate a limited redeployment of local authority expenditure on education: there should be no increase in local authority expenditure in aggregate".

The purpose of the amendment is to ensure that an individual authority, which accepts a share of education support grants, is not required to find compensatory reductions elsewhere in its education expenditure if it wishes to avoid incurring grant penalties on its share of the cost—at least 30 per cent.—of the experiment which it is carrying out on behalf of the Department of Education and Science.

The legislation that enables the Secretary of State to issue expenditure guidance—prescribe targets—to individual authorities requires that this must be done in accordance with principles common to all authorities. There is however a device that enables individual authorities to escape grant penalties on particular categories of expenditure. This is achieved by the Secretary of State disregarding expenditure of that kind in determining the extent to which an authority has complied with its expenditure guidelines. The report on the rate support grant settlement for 1984–85 has stated that the Secretary of State would disregard, for the purposes of grant penalties, spending on certain kinds of expenditure: first, increases in expenditure on urban programme projects which are aided by grants under the Local Government Grants (Social Need) Act 1969 and which form part of an inner area programme drawn up at the invitation of the Secretary of State; secondly, increases in expenditure on civil defence which is aided by Government grant; and, thirdly, increases in expenditure on projects towards which health authorities are making payments under joint financing arrangements.

These categories of expenditure have in common the fact that the local authority is receiving financial assistance, in two cases directly from central government, and, in the third case, indirectly via health authorities. More particularly, all are areas where the Government have identified the need for increased expenditure to meet their own priorities. There is considerable similarity between these three cases and the proposed education support grants. In the latter case, the Government have identified a shortcoming in teaching facilities and teaching skills that they are prepared to see put right by investment of extra resources. In the long term, this might remove the need for a local authority to spend this money from its own resources; but, in the short term, there is no doubt that the authority will be involved in additional expense. It would be regrettable from the Government's point of view if authorities had to refuse assistance in carrying out what the Government believe are necessary reforms. But it would clearly be foolish for an authority to accept aid from the education support grants if this was offset by grant penalties for over-spending its expenditure target.

The reality of the situation is illustrated by the very large number of education authorities, particularly county councils, which are currently spending above their targets and suffering grant penalties but which are spending below the amount that the Government have assessed as their spending need. There seems little prospect of an authority that is already spending less on its education service than the Government have assessed as necessary now reducing that expenditure still further in order to find money to pay for new developments at the behest of the Department of Education and Science. Some of the county councils suffering in this way are Kent, Norfolk, Surrey, Cambridgeshire, Devon and Cornwall, which are getting into the penalty area although they are apparently spending less than they should.

I have the news and information sheet from my own county. The chairman of the finance committee said: This aim of giving the Cambridgeshire ratepayer value for money is now being made difficult by the absurd system of targets and penalties. For 1984–85, Cambridgeshire's GREA—the measure of what we should be spending to provide a standard level of service—is £11 million more than our target. If we spend more than our target—£194.5 million—our grant will be cut. If we spend what the Government's own formula indicates we need to spend to provide an average level of service, the Government will cut our grant for 'overspending'. Reform of this system must be a high priority, and in the interests of natural justice it must be achieved".

Noble Lords will see that there is a good deal of feeling about this already among those Conservative authorities which will get into the penalty area when they consider that they do not deserve to do so. If this amendment or something similar is not accepted, it is likely that the Secretary of State's initiatives will not be taken up by local authorities or, at best, will be taken up by authorities not according to their need but rather according to their willingness to incur further grant penalties at the expense of their ratepayers. This amendment is intended to require the Secretary of State to disregard expenditure for the purposes of this Bill for grant penalty purposes and differs to that extent from the voluntary disregards that I have already mentioned. I beg to move.

The Earl of Swinton

This amendment would ensure that expenditure supported by education support grants should be disregarded when comparing an authority's total expenditure with its expenditure target. Noble Lords will be aware that under the arrangements proposed for 1984–85, if an authority exceeds its target, it will incur penalties by the hold-back of block grant. However, I should remind noble Lords that the Government have not yet decided about the future of expenditure targets beyond 1984–85. The earliest date for the introduction of education support grants is 1985–86. Therefore, it is a little premature to consider the relationship of education support grants to targets and penalties.

If targets were set in 1985–86, the Government would consider carefully all representations that might be made by local authorities, including any about the treatment of expenditure supported by education support grants. Indeed, the law requires the Government to do so. So this question will not be overlooked: if local authorities are concerned and wish to raise it, it will be carefully considered. Having said that, I should add that, when this matter was raised during the Committee stage in another place, the Government made clear their view that education support grants should be treated for these purposes in the same general way as for other specific grants.

The noble Baroness mentioned the exceptions under the urban programme. I should inform her that expenditure under the urban programme is generally treated for the purposes of targets and hold-back in the same way as expenditure supported by other specific grants; that is, the balance of expenditure after the grant has been deducted is counted as part of an authority's total expenditure for comparison with its target. The expenditure is not disregarded. A special exception has been made for increases in expenditure under the urban programme by the partnership and programme authorities. This limited exception applies to only a small part of the overall expenditure of the urban programme and applies to only a restricted number of local authorities. It does not form a precedent for a general disregard of expenditure funded by education support grants as the amendment proposes.

An expenditure target relates to an authority's total expenditure in all its services. The expenditure is expressed net of income from specific grants. In other words, any specific grant received by an authority is deducted before its expenditure is compared with its target. Only the balance of expenditure funded by the authority is counted. The Bill puts an upper limit of 70 per cent. on the rate at which education support grants may be paid. So the balance of expenditure funded by the authority itself could range from 30 per cent. to say about 50 per cent. of the total approved expenditure. The question is, whether that 30 per cent. or whatever is the proportion provided by the authority should count against an authority's target.

The Government have made clear their intention that the purpose of education support grants would be to encourage the redeployment of a relatively small proportion of local education authorities' expenditure. The grants are not intended to encourage an increase in the total amount spent by local authories. Hence the Government have taken the view that it would be inconsistent to exempt, or disregard expenditure approved for education support grants from targets and hold-back. For these reasons, I ask the noble Baroness to withdraw the amendment.

Baroness Lockwood

There are some difficulties and some complications here. The grants are not going to fall evenly on all authorities. It could be that one authority which was getting very near to the penalty area could be successful in obtaining a grant under this scheme. If that was so, the authority would be co-operating with the Government in expending 30 per cent. at any rate of the expenditure from its own funds on what had been regarded as a national priority. In other words, it would be co-operating with the Secretary of State. The purpose behind this Bill is to give the Secretary of State more power to deploy local education authority expenditure. The authority would therefore he co-operating with him while at the same time it could get itself into the penalty area. There could be other local education authorities who would just pay up their 0.5 per cent. of the grant and then decide not to bid because of the costs involved in bidding and because they knew that they were already in difficulty. However, I think that there is little incentive to the local education authorities to cooperate if there is a risk of them moving into the penalty area.

Perhaps I may quote another example, because my noble friend has already quoted one. I was in Bradford on Friday of last week looking at some of the problems. There we have an authority which has been traditionally a low-spending authority. Nevertheless, it is an authority which has a great many problems, including problems derived from being a multiracial city, and for the first time it is beginning to move near the penalty area. I should have thought that a city like Bradford would be the type of authority that could put forward a project which would be both useful to the city and part of the national experiment. But I would see little to encourage them to do so if, as a result, they were going to be put into the penalty area not just on the basis of that project but as regards other projects that they had in mind too.

Baroness David

I cannot say that I am very satisfied with the noble Earl's response. It seems to me that it would not be difficult to make this an area which could be disregarded in relation to the penalties. If there are not going to be targets and penalties in 1985–86, then this matter will not come into it. However, in case there are to be such targets and penalties, I think that while we are discussing the Bill it would be wise to have this safeguard so that there is no danger of the balance of the expenditure on the grant—the 30 per cent., the 50 per cent., or whatever it may be—just tipping them over the edge. Therefore, I should like to press the amendment.

6.3 p.m.

On Question, Whether the said Amendment (No. 11) shall be agreed to?

Their Lordships divided: Contents, 75; Not-Contents, 129.

DIVISION NO. 4
CONTENTS
Alexander of Potterhill, L.	Lawrence, L.
Ardwick, L.	Leatherland, L.
Attlee, E.	Llewelyn-Davies of Hastoe, B.
Aylestone, L.	Lockwood, B.
Beaumont of Whitley, L.	Lovell-Davis, L.
Birk, B.	McGregor of Durris, L.
Bishopston, L.	McNair, L.
Blyton, L.	Mar, C.
Brockway, L.	Melchett, L.
Brooks of Tremorfa, L.	Mishcon, L.
Bruce of Donington, L.	Molloy, L.
Carmichael of Kelvingrove, L.	Mulley, L.
Chitnis, L.	Nicol, B.
Cledwyn of Penrhos, L.	Oram, L.
Collison, L.	Perry of Walton, L.
David, B.	Ponsonby of Shulbrede, L. [Teller.]
Davies of Penrhys, L.
Dean of Beswick, L.	Raglan, L.
Diamond, L.	Rhodes, L.
Elwyn-Jones, L.	Ridley, V.
Ennals, L.	Rochester, L.
Ewart-Biggs, B.	Ross of Marnock, L.
Fisher of Rednal, B.	Sefton of Garston, L.
Foot, L.	Simon, V.
Gaitskell, B.	Stallard, L.
Graham of Edmonton, L. [Teller.]	Stedman, B.
	Stewart of Alvechurch, B.
Grimond, L.	Stewart of Fulham, B.
Hall, V.	Stoddart of Swindon, L.
Hampton, L.	Stone, L.
Hatch of Lusby, L.	Taylor of Blackburn, L.
Hughes, L.	Taylor of Gryfe, L.
Jacques, L.	Taylor of Mansfield, L.
Jeger, B.	Tordoff, L.
Jenkins of Putney, L.	Underhill, L.
John-Mackie, L.	Whaddon, L.
Kagan, L.	Wigoder, L.
Kilmarnock, L.	Winstanley, L.
Kirkhill, L.

NOT-CONTENTS
Ailesbury, M.	Auckland, L.
Airey of Abingdon, B.	Bauer, L.
Allerton, L.	Belhaven and Stenton, L.
Alport, L.	Bellwin, L.
Ampthill, L.	Belstead, L.

Bessborough, E.	Loudoun, C.
Brookeborough, V.	Lucas of Chilworth, L.
Brougham and Vaux, L.	Lyell, L.
Broxbourne, L.	McAlpine of Moffat, L.
Bruce-Gardyne, L.	McAlpine of West Green, L.
Buxton of Alsa, L.	McFadzean, L.
Caccia, L.	Mancroft, L.
Caithness, E.	Margadale, L.
Carnegy of Lour, B.	Marley, L.
Cathcart, E.	Marshall of Leeds, L.
Chelmer, L.	Massereene and Ferrard, V.
Cockfield, L.	Melville, V.
Coleraine, L.	Merrivale, L.
Colville of Culross, V.	Mersey, V.
Constantine of Stanmore, L.	Milverton, L.
Cork and Orrery, E.	Monk Bretton, L.
Cottesloe, L.	Montagu of Beaulieu, L.
Cox, B.	Morris, L.
Craigavon, V.	Mottistone, L.
Cunliffe, L.	Mountgarret, V.
Daventry, V.	Mowbray and Stourton, L.
Davidson, V.	Murton of Lindisfarne, L.
De La Warr, E.	Northchurch, B.
Denham, L. [Teller.]	Norwich, Bp.
Dundee, E.	Nugent of Guildford, L.
Eccles, V.	O'Brien of Lothbury, L.
Effingham, E.	Onslow, E.
Ellenborough, L.	Orkney, E.
Elliot of Harwood, B.	Orr-Ewing, L.
Elphinstone, L.	Pender, L.
Elton, L.	Peyton of Yeovil, L.
Enniskillen, E.	Platt of Writtle, B.
Faithfull, B.	Plummer of St. Marylebone, L.
Gainford, L.
Gibson-Watt, L.	Portland, D.
Gisborough, L.	Radnor, E.
Glanusk, L.	Rankeillour, L.
Glenarthur, L.	Rodney, L.
Gormanston, V.	St. Aldwyn, E.
Grimston of Westbury, L.	St. Davids, V.
Hailsham of Saint Marylebone, L.	Saint Oswald, L.
	Saltoun, Ly.
Hanson, L.	Savile, L.
Hemphill, L.	Sharples, B.
Henley, L.	Skelmersdale, L.
Hives, L.	Soames, L.
Holderness, L.	Somers, L.
Home of the Hirsel, L.	Stanley of Alderley, L.
Hylton-Foster, B.	Strathclyde, L.
Ingrow, L.	Sudeley, L.
Ironside, L.	Swinton, E.
Kaberry of Adel, L.	Thomas of Swynnerton, L.
Killearn, L.	Tranmire, L.
Kimberley, E.	Trumpington, B.
Kinloss, Ly.	Vaux of Harrowden, L.
Kitchener, E.	Vickers, B.
Lane-Fox, B.	Vivian, L.
Lauderdale, E.	Westbury, L.
Lindsey and Abingdon, E.	Whitelaw, V.
Liverpool, E.	Wynford, L.
Long, V. [Teller.]

Resolved in the negative, and amendment disagreed to accordingly.

Clause 2 agreed to.

Clause 3 [Regulations]:

Baroness Lockwood moved Amendment No. 12:

Page 3, line 40, at end insert— ("( ) No regulations under this Part of this Act shall be laid before Parliament until three months after the laying before Parliament in the form of a consultation document of a statement of the purpose of such proposed regulations.").

The noble Baroness said: The purpose of this amendment is to try to improve the consultative process about which the noble Earl and I spoke during an earlier debate, although from different points of view. We are suggesting that three months before a regulation under this part of the Act is laid before Parliament, a consultative document should be issued stating the purpose of the proposed regulations; in other words, this is proposed in order that there can be more discussion before a regulation is laid in this House and in another place.

If there is to be a partnership between the local authorities and Government, it is important that there should be an opportunity for open discussion between them and that we all know the subject of that discussion. Certainly in this House there is some reluctance to see the growth of government by regulation. It is often necessary that regulations have to be introduced under primary legislation, but this does place the two Houses under a difficulty. I understand that in another place they have a limited time in which to consider the regulations; I think they have a time limit of an hour and a half. In this place we do not have such a time limit, but we are restricted by the tradition of the House in the sense that we do not like to overturn a piece of secondary legislation which has been passed by the other place. Therefore, this means that there is a limit on the discussion that can take place and on the determination that both Houses can have.

Furthermore, once a draft regulation is before us, we have no opportunity to amend it in any way. It is laid before the two Houses and we either accept or reject it. As I understand it, under this particular Bill the purpose of the regulations will be to indicate those areas of priority which have been selected by the Secretary of State and to indicate the amount of grant which will be attached to them. If there is to be this dialogue and if it really is to have some purpose, it would seem appropriate to have a consultative document before we have the regulations, which could either be accepted or rejected, but in their entirety. I beg to move.

The Earl of Swinton

During the debate on Second Reading, the noble Baroness, Lady David, referred to what she considered to be the general shortcomings in the use of secondary legislation, and her noble friend has referred to them again this evening. As I said in my speech on Second Reading, I could see their point but this is a fact of life. If the unfortunate position ever arose and one of the noble Baronesses found herself speaking from this Dispatch Box, I am sure that she would be stating my point of view, which is that it is a fact of life and it is one of the avenues that is open to the Government.

In the case of education support grants, the most important subject covered by the regulations will be the definition of the purposes of the grants. The other subjects will be concerned largely with the nuts and bolts of administering the grants. Obviously, it will be important to get these details right, and my right honourable friend will wish to hear the views of the local authority associations before making firm proposals in the regulations; but I imagine that the principal point of concern to noble Lords will be the definition of the purposes of the grants.

The Government have already set out their preliminary views about the purposes of the grants in the early years, possibly starting in 1985–86. I set out our preliminary views in the debate on the Second Reading; and there have been similar accounts in another place. As I said at Second Reading, my right honourable friend wants to discuss in due course in some detail with representatives of the local authority associations this list of possible activities to be supported by ESGs with the local authority association. This has been mentioned in earlier debates this afternoon and for reasons which I respect, the associations felt unable to enter into discussions of the purposes of the grants while the Bill was still being considered by Parliament. Nonetheless, my right honourable friend looks forward to discussions with the associations as soon as practicable.

These preliminary views of the Government—and I stress that they are preliminary because we have not yet heard the associations' views—have attracted wider attention. I understand that my right honourable friend has already received some comments from people in the education world. These are very welcome, and will be considered carefully.

All this goes to show that the debate about the purposes of education support grants has already begun, and this will be continued later on this evening. The purpose of the amendment is to extend the period of the debate by requiring my right honourable friend to issue a consultation document three months before the regulations are laid. I understand the concern behind this amendment, but I do not consider that it is necessary; and I have serious doubts about its impact upon the timetable for introducing education support grants.

I want to be as helpful as I can, and I hope that the concerns underlying the amendment can be met in another way. When a similar point was discussed in another place, my honourable friend the Parliamentary Under-Secretary of State undertook on behalf of my right honourable friend that a statement would be issued prior to the laying of draft regulations. The statement would set out in more detail the activities which it was proposed should be supported and the reasons behind the proposals. My right honourable friend would do his best to ensure that this was given the widest possible publicity.

I hope that this suggestion will meet the spirit of the amendment without imposing a three-month requirement on the consultations. As I have explained, this requirement really is unnecessary because, in effect, the debate about the use of education support grants is already under way. Therefore, in the light of this suggestion, I hope that the noble Baroness will withdraw this amendment.

Baroness Lockwood

I thank the noble Earl the Minister for his reply. The purpose behind the amendment is to focus on what is going to be in the regulations. That would not in any way detract from the detailed discussions that might be going on between the Minister and his department and the local authority bodies. However, in the light of what he has said, I will not press the amendment at this point. I wonder whether he can assure me that the statement which will be made will be capable of change in response to comments which are made—because that would be the whole purpose of the consultative document. If the statement that is to be made will have all the t's crossed and all the i's dotted, there would be no difference between that and the laying of the regulation.

The Earl of Swinton

I cannot add very much to what I have said, which is that the statement will set out in more detail the activities it was proposed should be supported and the reasons behind the proposals. That is all I can say on that.

Baroness Lockwood

At this point I should like to seek leave to withdraw the amendment and look carefully at what the Minister has said in his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.22 p.m.

Lord Graham of Edmonton moved Amendment No. 13: Page 4, line 11, after ("authorities") insert ("and Education Departments").

The noble Lord said: I beg to move this amendment and I do not think I need detain your Lordships too long. It concerns the principle of consultation. The Minister will recall that at Second Reading I indicated that I felt there were bodies, apart from local education authorities, which could have a contribution to make in the formulation of new initiatives which could be of benefit to the public sector. I drew his attention—I am sure he will recall this—to the fact that there were bodies in the non-public sector which had some very good work behind them as a record in a number of ways. I referred to the Co-operative College, but that was not isolated. I declared an interest then and I declare an interest now.

If the Ministry is serious about genuinely wanting to find new initiatives and is not narrowly restricted to new initiatives between itself and local education authorities, I would have thought it would welcome advice and guidance and perhaps the relief of some of the work by some bodies that I believe it would respect. I have already mentioned that the Co-operative College has the respect and support of the Ministry in a number of matters, and of course there are many others too.

I should like to refer the Minister to the debate in Standing Committee "G" on 1st December on this Bill, at cols. 105 and 106 of Hansard. I should mention that the words I shall quote are those of Mr. Ioan Evans, who, as your Lordships will appreciate, sadly died last Friday. He had very close associations with the Co-operative movement, as I have. He made a very constructive contribution, and the Parliamentary Under-Secretary acknowledged this. He raised the important point of bodies other than local education authorities having the opportunity for discussion and consultation. On that occasion the Minister said he could see no objection to bodies other than the LEAs writing or making their views known.

What I am seeking to do is to ensure that not necessarily one particular body or another but bodies like the TUC and colleges, in addition to the Co-operative College, have the opportunity of giving the Minister the benefit of their long experience. The Co-operative movement, for instance, besides having 200 co-operative societies with education departments, has a long history of having provided education when others did not. I refer to libraries, reading rooms and education departments being provided long before they became mandatory or statutory. I think there is a field that the Ministry could very well tap. I am asking the Minister to accept the principle of consultation not merely as a form of words but written into the Bill so that he has the obligation to consult with such other education departments as he himself will choose. I am not being narrow in that sense. I beg to move.

Lord Somers

I should have said that this was a very useful amendment because after all it is a mistake to try to divide education into two separate categories: one public and one private. Education is education. It spreads over the entire population, and I should have thought that many other bodies besides the local education authorities would have useful things to contribute.

The Earl of Swinton

We have had a full debate upon the role of the educational interests in the planning of education support grants. I hope I have made clear that my right honourable friend will consider carefully all points which may be put to him. However, the present amendment would go further than this, by establishing the right of other bodies besides the local authority associations to be formally consulted before regulations are made. I do not believe this is necessary. The local authorities have a special position, as the recipients of the grants, and their interests are safeguarded in the Bill. I have made clear the Government's readiness to consider views from other quarters; but to establish the general right of consultation envisaged in the amendment would go too far. I should remind noble Lords that such provision does not appear in legislation governing other specific grants involving considerably larger sums of money. I would ask the noble Lord to withdraw his amendment.

Lord Graham of Edmonton

I can give the Minister the assurance that I intend to withdraw my amendment and not press it; but it is rather sad that the last argument was that this does not appear in other legislation. I understood that the Government were attempting to break some new ground in this particular matter, and in 1984 were prepared to listen afresh to people who may have a contribution to make. The last thing I want to do is to diminish the stature of local education authorities in this matter. They are supreme: it is their funds that we are talking about. It is rather sad that the Minister is not prepared to provide non-public educational bodies with at least the feeling that they have a part to play in helping the nation to better expand its initiatives in education.

However, he has said—I do not think he used the word "welcome"—that they are entitled to submit their views. I very much hope that when views, ideas and initiatives from bodies including the Co-operative movement, the TUC and a wide range of other bodies are received, they will be treated with sympathy and perhaps followed up in the form of some courses. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Baroness David moved Amendment No. 14: After Clause 3, insert the following new clause:

("Pupils with special needs.

. In any year in which educational support grants are made at least 20 per cent. of any such expenditure shall relate to projects dealing with integrating pupils with special needs in ordinary schools.").

The noble Baroness said: In bringing forward this amendment, and indeed several others, we want to probe ministerial departmental thinking about activities that they will be wanting to support by ESGs. The list has changed from the time of the consultation document to the Second Reading debate in another place, and so we want to know what are and what are not now the priorities in the minds of Ministers. One of the projects on the Secretary of State's list earlier was to introduce technology for the handicapped child in special schools, or integrated in general schools. Could we hear a little more about this? Is it still one of the favoured plans?

Areas that we feel are important will be seen from the amendments we have put down in the shape of new clauses. Turning to special education, at the time the 1981 Bill was going through this House we warned constantly that it was no use changing the legislation unless substantial extra resources were made available. We doubted that they would be. What I am interested in is integrating the children with special needs into the ordinary school. So far only 11 per cent. of the 145,155 pupils receiving special education and treatment are in ordinary maintained schools. There will be a shift and many more will be going there. Already, since the implementation of the Act, 42 special schools have been closed under the provisions of Section 14. No application for closure, I understand, has been rejected.

There is a great need for experimentation and monitoring as more and more of these children move over. Much in-service training of staff will also be needed. I shall be glad to hear from the Minister that he accepts that this is an area about which we need to learn a lot more and that it is important that if ESGs come into being, as a result of the Bill, integration of children from special schools into ordinary schools would be a suitable subject for a grant.

As the Minister himself said in January in this House at Second Reading, when speaking about possible activities to be supported: Other developments may owe their origins to the report of a group with wide experience in the education service: for instance, the Warnock Committee's report on special educational needs".—[Official Report, 19/1/84; col. 1201.] I would imagine therefore that he will be supporting me and the noble Baroness, Lady Masham of Ilton, whose name is also to this amendment, so I hope to have good news about this. I beg to move.

The Lord Bishop of Norwich

May I—

Baroness Masham of Ilton

I am very very willing for the right reverend Prelate to speak before I do if he so wishes. If some children with special needs are to be integrated in ordinary schools then they may well need special facilities to be able to cope, such as electric typewriters, aids for the partially sighted and hard of hearing, computers and many developing aids of the future. Also teachers who do not understand the special needs of the pupils should have in-service training, otherwise there will be misunderstanding and breakdown between teachers and pupils.

My noble kinsman Lord Swinton, with his many years on the North Riding County Council Education Committee and then the North Yorkshire Special Schools Committee, took great interest in children with special needs of all sorts. He is personally interested and I would hope that he would try to do the best be can for all these children throughout the country. In fact, he has a party of children with special needs coming to your Lordships' House tomorrow.

I always think that when money is short, with so many demands on it, it is useful to have special categories who should have priority written into the Bill, so that their needs are not forgotten. These pupils have many needs. I do not think the Government will like the 20 per cent., but perhaps the noble Baroness, Lady David, and my noble kinsman can get together to work out something more satisfactory before the next stage.

The Lord Bishop of Norwich

Far be it from me to enter into a family discussion between the second mover of the amendment and the reply from the Government. I leave that aside except to say how delighted we are to have this expression of warm family feeling and understanding, very much like the experiences that most of us who are married have when we are discussing issues in this way at home. I am keen on home life, as your Lordships will know.

May I make one comment here? From these Benches on Second Reading your Lordships will remember we spoke in general terms of the support of the Church for this Bill and asked one or two specific questions. Also we had the opportunity of saying again that right back to the Butler Act of 1944, notwithstanding governments of all persuasions and parties, the link between Church, State and education has been profitable for the nation. We were glad to make that point.

On this particular amendment I make just one speech in my intervention here, but refer, with your Lordships' permission, to one or two other of these amendments. I notice, for example, that Amendment No. 14 is asking for 20 per cent. of the expenditure. I notice that Amendment No. 15 is asking for 20 per cent. of the expenditure and that on the mathematics side. Amendment No. 16 is asking for 20 per cent. That totals 60 per cent. Amendment No. 21 is asking for 20 per cent. and the noble Lord, Lord Mulley—whom we welcome so warmly to our fellowship, I think is the word we use in this case—tops it up to 100 per cent. By which time there is nothing left for the imaginative plans and ideas which your Lordships were sharing together on Second Reading; for instance, the imaginative experiment of Christian drama in worship. Since Second Reading we have had Martin Blogg's Christian dance group of young ladies called Springs leaping about all over the place in our diocese in county schools, church schools and independent schools, but all had private financial dependence.

If we should take so many amendments and ask for specific cuts of the cake—20 per cent., 20 per cent., and so on—and all those amendments went through, we should not have the flexibility of imaginative experiments which, as I see it, this Bill is seeking to provide for us. I have added it up and I think that there are nine noble Ladies and Lords taking part in these "20 per cent." amendments—a partridge in a pear tree: "nine lords a-leaping" up and down moving these amendments—and I hope that they may not win.

Baroness Masham of Ilton

Before the right reverend Prelate sits down, may I ask if he thinks that a child who cannot see properly or a child who has to use an electric typewriter because it has no proper fingers does not have more important needs than a Christian child—though the disabled child may be Christian as well—who has Christian teaching, leaping around? Could they not do that out of school?

The Lord Bishop of Norwich

If I may reply to that question, I believe it is difficult to differentiate between needy children. The nice thing is that quite often the children with special needs, as mentioned in this amendment by the noble Baroness, Lady Masham of Ilton, find particular enjoyment in the free movement which they are taught in schools by these peripatetic groups for whom some money will be provided here. Therefore, I should like them to have lovely special typewriters and Christian dance.

Lord Somers

I do not know whether what I have to say is strictly relevant to this amendment, but I should like to hope that the Government will also remember that there are children with special needs, not owing to some handicap, but because of some particular talent they have in one of the arts. They do not need computers, special equipment or anything like that. What they need is an adjustment to their curricula so that they can receive the teaching they require. I hope it is possible for that sort of provision to be made.

Baroness Cox

I have the greatest sympathy for the nature of the project specified in this amendment, particularly for that project that would enhance the integration of children with special needs into ordinary schools. I also have sympathy for that amendment which would help to improve maths teaching—a need which is so urgently highlighted in the Cockcroft Report, in the Institute of Maths survey and Professor Prais' recent research which shows that British children on the whole are two years behind their German counterparts. Here is an urgent educational need.

However, I must emphasise reservations about this fundamental principle of earmarking any proportion of this expenditure for education support grants. Apart from the fact as has been pointed out that such different allocations would soon add up to more than 100 per cent., there is a fundamental reservation that such earmarking would deprive the Secretary of State of precisely that autonomy which the Bill is designed to provide. Particularly, that inflexibility would be built in because the wording of these amendments specifies that such earmarking should operate year by year so that for every year in which the support grants are provided these 20 per cent. special allocations are to be built in.

The fundamental reservation must be that the amendments would destroy the flexibility of the scheme and the ability of the local education authorities to adapt to changing needs and priorities. It is this adaptability which lies at the heart of the Bill and, of course, it does not mean that this in any way precludes the very worthy causes that have been specified in the amendments.

The Earl of Radnor

I should like to support this amendment, which the noble Baroness Lady David has said is a probing amendment. We have lists of the various bits and pieces towards which money might go. For my money, I like No. 14—the integrating in schools of children with special needs in schools—simply because since 1981, when the Special Education Act was passed, so far as I can make out by talking to people, children with special needs still have rather a raw deal in our society. One of the troubles always seems to me that in our Education Acts, nothing at all is mandatory. It is always left to the local education authorities to decide what goes on. With great respect to the noble Baroness, Lady Cox, who has just sat down, I think that this might be an occasion where inflexibility would be a good thing just to make quite certain that, for once, money gets allocated towards these particular people.

I should like to re-emphasise another point, which is that integration into a school might—and I should declare here my interest in dyslexia, which is not terribly well dealt with in state schools—(as has been said in another context) mean leaving that school for a period before the child was suitable to come back and share teaching with other children. On the whole, I think it would be a very good thing for this 20 per cent. to go straight and unequivocally towards these children with special needs.

Earl Attlee

I think that the right reverend Prelate was quite correct when he was talking about the cutting up of the cake and getting 100 per cent. but I fear somehow that he has missed the point. The point which the noble Baroness was making was that we have one group of special people who are disabled. If you look at the other subjects mentioned, you have got mathematics and you have got environmental education. The point that has been missed is that a disabled person integrated into a normal school can still study mathematics, can still study the environment; but your mathematical person will not necessarily be disabled. So cutting up the cake does not really matter so long as we get one group of people who can study all the other things you want. The only thing that we are saying is that these people are disabled.

Apart from this, there are two great benefits. For the disabled person to be educated in a normal school is a great benefit to the disabled person because he or she is then living in a normal environment. Also, it has been shown very clearly that those ordinary people who are not disabled also benefit from mixing and working with those who are disabled.

6.44 p.m.

The Earl of Swinton

This has been a very interesting debate. I think that I need hardly add to what noble Lords have said: that the effect on the Bill if all these various amendments were accepted would be that the total sum would be earmarked. I understand that the intention of noble Lords and noble Baronesses in moving the new clauses is, in part, to draw attention to the aspects of education referred to in the new clauses. I am willing to speak on all of them but I hope that, in view of the fact that we have 20 stubble burners waiting to get burning their midnight stubble (or midnight oil if that is the right thing), perhaps noble Lords may think about not moving their amendments when we come to them. But I am quite willing to answer them all if they do so.

I must first express my firm opposition to the general proposition that a proportion of the grant be earmarked for specific purposes. As noble Lords have said, taken together, these amendments would mean that the total sum available for educational support grants was permanently earmarked to specific parts of education in schools. That would leave no flexibility in the Bill for responding to new needs or priorities in the education service. One thing struck me during the debate: that, if we did this and 100 per cent. went, we should then have no money whatsoever to give (should it be wished) to a handicapped child who, through no fault of his or her own, was not capable of being integrated into an ordinary school. There are—alas— some children who, however good the intentions—and I, for one, should like to see all handicapped children in ordinary schools so far as that is possible—will never be fit, for one reason or another, to go to a special school. We shall be cutting off from those the opportunity of our buying them some of the equipment that has been mentioned.

We should also remember that the school service is only one part of the education service. I am rather surprised that the noble Baroness, Lady David, has not put down some amendment for further education tabled on this; because I know that she is a great proponent of that. The other point which I think has not been made is that we cannot predict 10 years hence what will be the main priorities. The integration of handicapped children into ordinary schools may well be a priority at the moment but may not be so much a priority in 10 years' time. We think it is right for the overall level of expenditure which can be supported by ESGs to be limited to one-half of 1 per cent. of the Government's plan for expenditure; but, within this limited total, the holder of the Secretary of State's office should have considerable flexibility to respond to changing needs.

These new clauses will also limit the scope of the Secretary of State's consultation with the local authority associations. I am sure that noble Lords will agree that it would be most unfortunate if a particular activity falling outside the scope of these clauses could not be supported even if the Secretary of State and the local authority associations agree that it is important. As noble Lords will appreciate, needs and priorities in the education service are likely to change. Wider changes in society and the economy may create new priorities. The developments in information technology are an example of this.

Furthermore, we may all have our perceptions and awareness of particular problems sharpened by the conclusions of a committee of wise men and wise women. I think it is no coincidence that two of the areas which are possible candidates for support by ESGs—namely mathematics and special education—owe much of their thrust to the reports of committees chaired so ably by Dr. Warnock and Professor Cockcroft. We are all in their debt for new insights which these committees brought to these areas. We should not rule out the likelihood of similar reports in the future which might imply a similar role for education support grants in other areas, including other parts of local authority education services besides schools.

Furthermore, I believe that these amendments are unnecessary. As I explained on an earlier occasion, the Bill already includes important safeguards on the use of the grants. The Secretary of State is required to consult with the appropriate level of local authority associations about the purposes to which education grants might be put. After those consultations, he must seek the approval of both Houses of Parliament for regulations to determine the purposes. However, unlike the new clauses which we are discussing, regulations could be changed if Parliament agreed to take account of changing circumstances. It is both unnecessary and undesirable to add to this process of consultation and approval the further limitations in the Bill itself which these new clauses would impose.

I should now like to say something brief on the integration of pupils with special educational needs into ordinary schools. I appreciate that the intention of this amendment is to draw attention to the need to make adequate provision for those children who, while not requiring education in special schools, need something more than what is provided for the majority of children in ordinary schools. In passing the 1981 Education Act, the Government recognised that ordinary schools have a responsibility to provide for a large minority of children of special needs who are, quite properly, placed in ordinary schools. Those schools, since the 1944 Act, have had a duty to provide for them according to their aptitudes and abilities. The 1981 Act also provided that these children should have their needs assessed individually and by a combined professional assessment, drawing upon advice from at least three sources—educational, medical and psychological—as well as involving their parents in this process.

It is our aim, just as much as the aim of noble Lords on the other side, to see that special education gets a fair share of the resources available. It was a decision of my right honourable friend who is now the Prime Minister to establish the committee of inquiry under Mrs. Warnock. That committee reported in 1978 when another right honourable lady was Secretary of State, but it was a Conservative Government which brought in the Bill to give effect to those recommendations for changes in the law.

I do not believe that a proportion of ESG expenditure should be earmarked for the education of children with special educational needs, but we think that there may very well be a role for the use of education support grants in encouraging constructive developments for children with special educational needs. Two possibilities which have been identified are their use to assist in the establishment of resource centres in ordinary schools, or in providing microelectronic aids for handicapped children. My right honourable friend the Secretary of State will want to discuss these possibilities and any others that the associations might suggest with representatives of the AMA and the ACC in some detail.

I think that I have said enough on this amendment. I sincerely hope that the noble Baroness will withdraw this amendment, and I also hope that the noble Baronesses and noble Lords who follow might not feel like moving theirs. But perhaps that is a vain hope.

Baroness Masham of Ilton

Before my noble kinsman sits down, may I ask him whether he will ask his colleagues to consult also with the National Bureau for Handicapped Students? They are now doing a survey of micro-computers and technology of that kind for handicapped children and his colleagues might learn something.

The Earl of Swinton

I am most grateful to my noble kinswoman for that advice. I am also very grateful for the compliment that she paid me earlier on. I thought that it might look like a put-up job so I was not going to say anything about it. But of course I shall draw her points to the attention of my right honourable friend.

Baroness David

I am extremely grateful for the support which this amendment has had from all sides of the Committee. As I said when I moved it, it is a probing amendment—and, of course, I can add 20, 20, 20 and 20 as well as the right reverend Prelate. I think that all these amendments are intended to be probing. I thought that the reply was quite sympathetic and, owing to the number of people who have spoken to this amendment, I think that there is a strong case for some of the money being put to this cause. So I hope that the Minister will take that back to his friends in the department. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.53 p.m.

Baroness Lockwood moved Amendment No. 15: After Clause 3, insert the following new clause:

("Standard of mathematics.

In any year in which educational support grants are made at least 20 per cent. of expenditure shall be used for projects designed to improve the standard of mathematics in schools.").

The noble Baroness said: This series of amendments shows the difficulty that we are in when we have a Bill of this nature in front of us because, as the noble Baroness, Lady Cox, has said on a number of occasions this afternoon, there is no shortage of subjects on which money could be spent. There are certainly a number of very important and very significant subjects which need urgent attention and improving the teaching of maths is one of them.

In all the various documents that have been circulated in relation to this Bill, improvement in the teaching of maths in the light of the Cockcroft Report, has been consistent. If we were to take the Cockcroft Report seriously, we could spend the whole of the £46 million on that one subject because there is an enormous amount of work that has to be done. The Cockcroft Report has drawn attention to the under- supply of teachers in maths, as well as to the under-qualification of many of the teachers who are struggling to teach this very important subject to children in our schools at the present time. So clearly in this area there are a number of very important things to be done.

There is an enormous initial and in-training job to be done, there is the mammoth task of attracting more qualified people into the profession and there are changes in the approach to teaching to be brought about, both teaching the subject per se and teaching at different attainment levels within the age group. I was interested to see in Cockcroft that the whole problem of teaching maths to girls was highlighted, because this in itself is a very considerable task.

For example, under this one heading we have the problem of overcoming the psychological expectation of girls not to achieve excellent results in maths, and we have to show beyond doubt that this is not a male subject; it is a subject for both boys and girls. We have the task of overcoming girls' previous lack of special and mechanical training, and we also have the problem of training teachers to pay just as much attention to girls during maths sessions as to boys. These are not comments from a person who was previously the chairman of the Equal Opportunities Commission. These come from the Cockcroft Report itself. So it shows that there is a lot of work that must be done here, both in the interests of children and in the interests of the nation as a whole.

I suggest that this is not just a question of one or two pilot projects. We now have the basis and the benefit of the Cockcroft Report, and it is a matter of the Government grasping the nettle and providing adequate resources to deal with this essential subject if Britain is to regain its competitive role in the world. I beg to move.

Lord Stewart of Fulham

I think that all of us who are moving these amendments know that it would be quite impracticable for them to be carried. What we are endeavouring to do is to draw the Government's attention to what we believe to be the particular importance of certain subjects. There was a time in the history of the world when a country could enjoy, comparatively with other countries, a high standard of life, culture and civilisation even if most of its population were illiterate. That is not so today. A country where most of the population are illiterate is at a desperate disadvantage. We shall find increasingly that, unless we can raise the general standard of numeracy among the population as a whole, we are at a disadvantage. That is one reason for giving particular importance to this subject.

Another is that, as I understand it, mathematics appears to have progressed by a series of leaps rather than by a gradual process. For example, you had such an astounding step forward as the invention of a symbol to represent nought or zero. If your Lordships do not think that is important, try to do a multiplication sum using Roman numerals and you will see how important it is to have the numeration system that we have today. There was the concept of imaginary numbers, without which, paradoxically enough, one cannot solve certain absolutely vital practical problems. Then there was the invention of logarithms and calculus; and, more recently, those developments of mathematics which are concerned with the invention of the computer and which have put the teaching of mathematics into a different box altogether.

At the same time, we are still uncertain about how mathematics ought to be taught. This is still a matter on which there is a good deal of difference of opinion. We have, then, a subject of great importance; a subject where great changes are occurring and where the method of teaching is still a matter of argument and dispute. We badly need more knowledge in this field and I hope that as a result of this Bill the opportunity will be taken to get it.

Lord Mulley

I rise to support my noble friends Lady Lockwood and Lord Stewart of Fulham. We have no intention of trying to tie the hands of the Secretary of State. The purpose of my amendment No. 22 was to take up the remaining 20 per cent. before somebody else laid claim to it. I shall respond to the noble Earl by not seeking to move the amendment. However, I wish to draw to the attention of your Lordships the importance of mathematics teaching. It is essential for good science teaching. The most sombre fact which occurred to me last year was that this nation, once the workshop of the world, is now a net importer of manufactured goods. One wonders what will happen when, as we are told they will, the oil supplies dry up. How shall we make a living unless we have a greater number of highly qualified technicians who will be able to cope with the demands of modern technology which, as my noble friend Lord Stewart of Fulham indicated, have been growing, not gradually but by leaps and bounds?

My experience is that, with notable exceptions, the teaching of science is below the general level of teaching in many other subjects. What is worse, because of the competition for qualified scientists, science teachers are very often less impressive personalities. Therefore, at a crucial time in their career many pupils are attracted to arts courses. When I was Secretary of State I had hoped to introduce a project whereby universities could make an arrangement with the schools in their neighbourhood under which sixth formers could spend one day, or part of a day, in the university in order to foster greater interest in the subject at that level.

We have spoken in the debate as though the Bill confers immense powers upon the Secretary of State. The Bill does no such thing. Its powers are quite derisory. I wonder why the Secretary of State went to the trouble of steering through both Houses of Parliament a Bill which gives such little additional power to him. I am bound to tell your Lordships that, as Secretary of State, I was completely frustrated by the fact that after battling (and very often it was a battle) to get extra money, I knew jolly well (although I could not prove it) that when it went into the rate support grant a great deal of it was not spent upon education—certainly not upon the categories which we had argued for many months ought to be provided for in the rate support grant formula. Not only did I not know how much money went into my own city's education allocation; not even the director of education, not even the Secretary of State, not even the education committee knew how much of the rate support grant was spent upon education as a whole. If there was going to be a block grant for education. I should have preferred it to be run by education and spent on education instead of being spread across the whole field.

I fear that now I am often out of tune with my noble friends, because I have not changed my mind very much since 1958 when it was the concern of my party to oppose the introduction of the rate support grant. Apart from the fact that it is not the best way of providing the money we need, a fact which this debate has underlined. I do not believe that it would be so easy for the present Government to impose penalties and rate capping if they had to do so over a series of specific grants. In each case those who were going to lose money would be up in arms and very many votes would be at stake. It is a quite different matter, though, if it looks as though you are just cutting the rates. My experience over a period of many years as a Member of Parliament was that nobody complained to me about local authorities doing too much; people came to see me because they wanted this or that to be done—because they wanted additional housing accommodation or the roads to be mended. They never complained about local authorities spending too much in that sense. However, I received very many complaints about the level of rates. We have never managed to resolve this dilemma.

To illustrate the complete weakness of the powers of the Secretaries of State for England and Wales, the noble Lord, Lord Alexander of Potterhill, said that Section 1 of the Education Act stands. It does. However, the noble Lord will recall that all the powers of the Secretary of State—or the Minister of Education, as he then was—were taken away in 1958. The Secretaries of State for England and Wales have far less power over their expenditure than does their colleague the Secretary of State for Scotland. My modest ambition when I was at the education Ministry was to get England and Wales on to the same basis as Scotland and to get put back into the 1944 Act some of the powers which had been taken away.

Finally, when I moved from education to defence it came as quite a shock to me to find that, although my total budget, on paper, at the education Ministry was higher than at defence—I am glad about this, because I believe that we should spend more on education than we should spend on defence—I was in charge of and responsible, at defence, for greater expenditure on education than I had been responsible for as Secretary of State for Education. I was accountable for every penny which was spent in the schools provided for Service families and for forces' education. In terms of the education department budget, when the rate support grant element was taken away and when the University Grants Committee was taken away and a number of other statutory obligations were removed I had direct control over a smaller sum than was the case when I was Secretary of State for Defence.

The Bill is a very modest extension of the powers of the Secretary of State. I do not suggest that we should try to tie his hands. However, I would ask the Secretary of State to take note of the matters to which noble Lords have rightly drawn attention: the defects in the present system, for which central Government money should be made available and for which the Secretary of State needs far greater powers than the Bill confers. However, I shall meet the very reasonable request of the noble Earl the Minister not to move my amendment.

7.8 p.m.

Viscount Eccles

The noble Lord who has just spoken reminds me of the time when I was Minister of Education. I held that post, off and on, for eight years—for longer than anybody else has ever held it. As a result of that experience, I agree entirely with the Government. We do not want any of this money to be earmarked. The emergency which keeps cropping up is the shortage of teachers in one subject or another. It is not always the same teachers who are in short supply. Sometimes there is a surplus of arts teachers while there are no mathematics teachers. I hope, therefore, that there will be no question of money being earmarked. The Secretary of State must be trusted to spend the money where it is most needed. And these needs are going to change.

The Labour Party has a rotten record in mathematics teaching. When Mrs. Shirley Williams's Bill, a pro-comprehensive school Bill, was before this House, we moved an amendment that for mathematics, like dancing, children ought to be chosen by merit. Children are selected by merit to go to a dance school. We moved an amendment that the same should apply to the teaching of mathematics. We knew perfectly well that there were insufficient teachers of sixth form mathematics to match the children who deserved to be taught by good teachers. Therefore, selection at that time was the only way in which to match clever children with the right teachers. However, the comprehensive education principle advocated by the other side won the day, and mathematics teaching lost the day. That was a very great pity and I hope that under this Bill it will be put right.

Baroness Masham of Ilton

. I should like to ask my noble kinsman the Minister how much research the Government are doing on the teaching of mathematics. He knows as well as I know that we have two children. Both went to totally different schools, and neither of them can do maths. Our daughter passed seven good O levels but still she could not do maths; she took the subject three times and failed. Our son, who happens to be dyslexic, had a very attractive English teacher and passed O level English, hut he cannot do maths either. I believe that written into the Bill ought to be more attractive or more handsome maths teachers; maybe the children will then start learning maths.

The Earl of Swinton

If I may deal with the last question first, I believe it is fair to say that our children take after their mother rather than their father when it comes to mathematics.

I was rather surprised to hear the noble Baroness, Lady Lockwood, in introducing this amendment, saying that all the £46 million could happily be spent on mathematics. It was not many hours ago when she was urging us to spend a total of £23 million instead of £46 million. I am glad that the noble Baroness has had such a rapid conversion to the good points of this Bill.

Activities aimed at improving the standard of mathematics in schools have been agreed to be an important priority for support by ESGs. The Government's commitment to improving mathematics teaching in schools is quite clear. We have welcomed the Cockcroft report. We believe that the way ahead it charts is very largely the right one and we attach very high priority to the action in the light of that report.

Allow me to list just a few of the steps we have taken. First, during the first period of the new in-service training grant scheme, £2.1 million has been set aside to support attendance by mathematics teachers on in-service courses. Secondly, we are funding three research and development projects in the field of mathematics for lower attainers at a cost, over three years, of £0.5 million. I believe that point may bring rejoicing to my noble kinswoman. Third, my right honourable friend asked in his provisional comments on the draft national criteria for 16-plus examinations in mathematics that these criteria should more closely reflect the recommendations of the Cockcroft report.

It is in the context of these other steps we are already taking that we should like to discuss with local authority associations whether ESG can be used to help in the implementation of the Cockcroft recommendations. That would enable the Government to give further support to some of the chief priorities for bringing about change which the committee itself identified. For example, one possibility I mentioned in the Second Reading debate would be to encourage the appointment of additional teachers to act as advisers and to support development work within schools. The local authorities may also have suggestions as to activities which could be supported. I therefore invite the noble Baroness to withdraw her amendment.

Baroness Lockwood

I am very grateful for the support which this amendment has received from all sides of the Committee. In particular, we are grateful for the contributions from two former Secretaries of State—and I will not at this stage take issue with the noble Viscount about the comparative contributions which Labour and Conservative Governments have made to the teaching of mathematics.

I believe that the noble Earl really misunderstood my remarks when I moved a previous amendment to reduce the income available by half. I made the point then that we did not know what we were voting that money for. If we had had before us a specific proposal that X amount of money be spent on improving the teaching of mathematics, then the noble Earl may have had a different reaction from this side of the Committee. However, I will not press the point any further and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness David had given notice of her intention to move Amendment No. 16: After Clause, 3, insert the following new clause:

("Environmental education.

. In any year in which educational support grants are made at least 20 per cent. of any such expenditure shall relate to projects dealing with environmental education".)

The noble Baroness said: I am not going to move this amendment, being kindly disposed towards those who are waiting to proceed with the next business. However, I shall be bringing the amendment forward at the next stage of this Bill.

[Amendment No. 16 not moved.]

[Amendment No. 17 not moved.]

Baroness David moved Amendment No. 18: After Clause 3, insert the following new clause:

("Advisory board.

.—(1) There shall be established an advisory board for education support grants.

(2) The advisory board shall include representatives of local authorities, parents and teacher's organisations.

(3) It shall be the duty of the advisory board to advise the Secretary of State on the payment of education support grants.

(4) The advisory board shall produce an annual report of the progress of projects funded by education support grants".)

The noble Baroness said: I spoke at Second Reading on the need to have some official committee or board set up so that the activities to be chosen and the money devoted to them, and the question of the way in which that money is apportioned, could be properly discussed by all those involved. An informal meeting called by the Secretary of State and involving perhaps just the chairman of the ACC and AMA education committees and their education officers is not good enough. We are proposing an advisory board which could have real influence on what happens.

If this amendment is accepted, the fear of government by regulation will be lessened, as would be the fears of local authorities that they are being bypassed. The point behind this amendment is that already the DES produces some nine topics which the department considers suitable for ESGs. But not all LEAs have these as their top priorities for new initiatives. There is a risk that a very small grant on £50 million or so of expenditure will be spread so thinly as to be unnoticed, but its administrative cost would be disproportionately high.

There is a concomitant risk that the existence of the new statutory grant will preclude the use of other methods of specific funding which have been quite helpful in the past. I have in mind the example of the pilot schemes for teacher induction supported some years ago by the department's own research budget. The associations have grave doubts about grants of limited duration. These serve only to store up problems for the future as grant ceases and authorities are left either to fund the work themselves or to stop it. Currently, difficulties are being experienced by those authorities which have been receiving joint financing monies from the health service or from urban programme funds where these funds become time-expired.

The associations are concerned, too, about the costs of planning and the uncertainty of a grant against bid system. LEAs are wary of expending a great deal of effort where there appears to be little chance of receiving any money. If the proposal for an advisory board is accepted, the associations, the teachers and the parents—and the need for parental choice is a constant theme song from the Secretary of State— can then believe that they have considerable influence on the choices made and the money to be spent on those choices. I beg to move.

7.17 p.m.

Lord Kilmarnock moved, as an amendment to Amendment No. 18, Amendment No. 19: Line 4, leave out ("and")

The noble Lord said: I understand that it may be convenient for me to speak to the amendment which I and my noble friend, Lord Beaumont of Whitley have put down as an amendment to the amendment of the noble Baroness, Lady David. If anything has emerged from our discussions so far this evening it is that if one is not going to earmark—and I can see that there is a strong case for not earmarking—then one is going to have to sift the applications which will be received. If there is to be no earmarking, we certainly feel that the discussion of how money is to be allocated is important and therefore that the Secretary of State should at least be advised and monitored by a body, the composition of which the noble Baroness has suggested much along the lines of her speech at Second Reading.

We do not dissent from any of her recommendations but we should like to add, as a fourth category of persons not specified in her amendment, employers in public and private sector industry who can join in the forum and explain to parents and teachers what their priorities are. It may be found, surprisingly, that employers prefer a good general education to overspecialisation in technical education at an early age. Educationists tend to accuse industrialists of not giving clear signals, and here is an opportunity to have some of their differences ironed out.

I understand that the noble Baroness, Lady David, does not disagree with my modest improvement to her amendment. If other noble Lords feel able to accept it, that would not pre-empt their right to vote against the principal amendment—although I will, of course, be much happier if they do not do so—if the noble Baroness presses her amendment to a Division.

Baroness David

It may be a help if I say at this stage that I accept the amendment to my amendment.

On Question, amendment to the amendment agreed to.

Lord Kilmarnock moved, as an amendment to Amendment No. 18, Amendment No. 20: Line 4, at end insert ("and industry")

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment to the amendment agreed to.

The Deputy Chairman of Committees (Lord Aylestone)

We return now to Amendment No. 18, as amended.

Lord Alexander of Potterhill

I think we should look at this very carefully. If you are going to have a consultative body including local authorities, teachers, employers and a few other people, the idea that you are leaving any discretion to the Secretary of State seems to me nonsense. After all, all these people, particularly the local authorities, have control of all the other money that is provided in rate support grant for education. Any of the things they want to do they are free to do. All the Secretary of State is asking in this Bill is that there should be just a little money—petty cash relative to the totality of rate support grant—which he can, after listening to all the advice that can be offered to him, decide to use on certain projects which in the national interest it is worth spending a little money on. I hope this amendment will not be accepted.

Lord Mulley

Perhaps I may say briefly that I would welcome this kind of advisory board and this kind of discussion over the other 99½ per cent. of educational expenditure as well as over the ½ per cent. my noble friend has proposed.

Baroness Cox

I think I appreciate that the intention behind this amendment is to involve those with a direct and legitimate interest, local education authorities, teachers and parents, and also I think to meet an equally valid concern—the need for evaluation and report on progress of projects which have been funded. However, as far as the first of those concerns goes, there is surely already ample provision made for consultation, and it seems not at all desirable to set up a quango which could well lead to many delays and confusions. So far as the second aspect—evaluation of how the money is spent—is concerned, this, I believe, is an extremely important matter, and I have in mind the funding of research projects which sometimes do not necessarily see fruition. I think there is a need for accountability on the projects which have been funded, but I think this would be particularly difficult for the proposed body to do. I would suggest that a better way of approaching evaluation and accountability would be to build in mechanisms for evaluation within the terms of reference of projects as they are established and funded, and particularly to make sure that the money is spent on the purposes for which it has been allocated.

7.25 p.m.

The Earl of Swinton

Like my noble friend Lady Cox, I understand the intention behind the amendment, which I take to be the desire to make education support grants as effective as possible by involving all interested parties in the administration, but I do not believe that an advisory board is necessary or desirable. During the course of these debates this afternoon I have repeated over and over again the assurance that the Government will listen to the views of all those who have responsibilities within education.

Local authorities clearly have a special interest in the grants. My right honourable friend has stressed repeatedly his concern, which is reflected in the wording of the Bill, that the local authority associations should be consulted about the activities to be supported and about all other matters to be covered by the regulations. Before the Bill was introduced he had two meetings with the associations. He had a third meeting after the Bill had completed its stages in another place, and he looks forward to further discussions when, as I hope and I am sure, the Bill has completed its remaining stages. The need for consultation with the associations is written into the Bill, and my right honourable friend is concerned that these consultations shall be constructive and helpful.

Other bodies will no doubt also have views about the use of education support grants—teachers, parents and industry, for example. So far as parents are concerned, this Government and their predecessor have done more since 1979 to safeguard and extend the rights of parents regarding the education of their children than possibly any earlier government, certainly any government of the party opposite. Our record on parental involvement is excellent.

Also my right honourable friend is always ready to hear the views of the teaching unions on matters which concern them. Indeed he has recently embarked on a series of meetings with the major associations about the important proposals in his speech to the North of England conference last month. Any points which the teacher representatives wish to make about education support grants will be carefully considered. The same applies, of course, to views by representatives of employers and employees in industry.

If the new clause were added to the Bill, another quango would have to be created, which would soon be spawning large numbers of sub-groups and creating unnecessary and undesirable bureaucracy. Its creation would run counter to the concern, which I know is shared by local authority interests, to keep the amount of administration involved to a minimum. I do hope that this amendment will be most speedily withdrawn.

Baroness David

May I say first of all that this is only an advisory board which is being proposed? It is not going to do more than advise. The authorities do very much want to be consulted. As the Secretary of State has agreed that he will have consultations, that they are in the Bill in Clause 3, this is just enlarging a little on how those consultations should be carried out, what they should consult about and who should be there. I really could hardly call it a quango; I do not think it justifies that. I do not imagine that they would be paid for their attendance; that would be voluntary.

However, I will read what the Minister has said, and I should also like to consult the local authority associations to see what their reactions are when they have had a chance of reading what the Minister says. If the noble Lord, Lord Kilmarnock, will agree, I should be prepared to seek leave to withdraw the amendment at this point.

Amendment, by leave, withdrawn.

[Remaining amendments not moved.]

Clause 4 [Amendment of s.1(3)(d) of Education Act 1962]:

On Question, Whether Clause 4 shall stand part of the Bill?

Baroness David

There has been a misunderstanding about Amendment No. 23. It was originally put down and I was told that it was not in order and outside the Long Title of the Bill. It should have been withdrawn, but I think owing to a printer's error it got on to the list. I took the opportunity of putting down that we were going to oppose Clause 4 in order to give me a chance to have a word about awards, which appear in Clause 4.

What I had wanted to do was to suggest various things which could also receive mandatory awards. I think such courses as the certificate of qualification in social work and law diplomas really do deserve to have them. In fact this House in another Bill did carry an amendment moved by Lady Faithfull to enable mandatory awards to be given to the Certificate in Social Work, but in another place that was deleted from the Bill.

However, I do want to say something about the whole field of awards. I do think it should be looked at with great care. Why should a young person doing a degree course automatically be kept for three or even four years, while another person of about the same age doing some testing course at a technical college is entitled to nothing? It may be that he gets a discretionary award, but that depends on where he lives and whether the education authority is a mean or a generous one. It is grossly unfair that young people living five miles apart, and possibly attending the same course, can be treated differently.

Has not the time come when support for all young people over the age of 16 wishing to continue their education or training should be automatic? We surely should want to encourage them. If we look at the figures of education statistics for 1981–82, we find that at 15 we have 862,000 children in education, at 16 the figure drops to 261,000 and at 17 it drops to 147,000. That is a drop from 91.7 per cent. of all 15-year-olds in the schools to 27.2 per cent. at 16. If we look at different figures—I have taken these from A New Training Initiative—in Britain 40–50 per cent. of young people who reach 16 go into jobs where there is little or no systematically planned training or further education. In France the figure is 19 per cent. and in West Germany only 6 per cent. In very many cases there must be a financial reason for young people opting out as well as, of course, inadequate training by employers and the industrial training boards. The fact that a good many of the boards have gone does not help, either.

The Labour Party would like to see a young person receiving support according to his needs and not depending on his status or the type of course he is following. There is very little sense in the variety of support that is now on offer. A student on a full-time advanced course gets about £35 per week. A student on a full-time non-advanced course may get no allowance and LEAs have no statutory duty to provide one. Some could receive means-tested educational maintenance allowances, the amount varying with the LEA but probably only about £7 per week. The young employed get, if they are male, a basic rate of £50.50 and, if female, £51.50. That is also wrong. The young employed on supplementary benefit receive £16.50. The young person on a youth training scheme receives £25 a week and on the young workers' scheme £40 a week. There is no sense in this at all. Could the Minister please persuade his colleagues to have a fresh look at the whole spread of awards and allowances and put some fairness, order and justice into them?

Lord Alexander of Potterhill

There is an important point that should be made. I am not in any way criticising the need for a re-examination of the whole question of awards. I accept that. But there is a reason why not all courses have been approved for mandatory awards. As I understand it, mandatory awards were intended to be restricted to those courses where there were entrance examinations or requirements so that there was some assurance that the student could benefit from the course that was being pursued. In the general range of other awards there was not necessarily any such evidence and therefore it was felt better that the local authorities should have the discretion to make or not make an award according to the circumstances.

Baroness Lockwood

I support my noble friend in opposing Clause 4, on similar grounds. My experience has been quite contrary to what the noble Lord just said. There are a number of courses which lead to professional qualifications but do not receive a mandatory award. It will be seen from the list of courses that receive mandatory awards that very often they are the very courses that are likely to be taken by men, whereas the courses which are likely to be taken up by women do not carry such grants. This was the subject of many complaints to the Equal Opportunities Commission in my days. For example, rightly the BEC and TEC courses receive mandatory grants, but so do a number of comparable courses in subjects such as accountancy, architecture, surveying, engineering, and so on, most of which are very much male dominated. There is then a clutch of courses, mainly paramedical courses such as physiotherapy, radiography, chiropody, and so on, which are at the moment dominated by women and which do not receive the mandatory awards. There is a very real problem here that needs looking into.

There is a further area of concern. I refer to the whole question of part-time degree courses which, again, are the subject of discretionary and not mandatory awards. I think the principle that this is based upon is that part-time degree courses are likely to be for students who are being sponsored by an employer. But that is not always so. There are a great number of married women, for example, who want to prepare themselves to return to the labour market who can do a part-time degree course but cannot do a full-time degree course and who do not get a mandatory award. Therefore, I should like to underline the general problem to which my noble friend referred and also this particular problem which I believe requires some attention.

The Earl of Swinton

I am enormously impressed by the ingenuity of the noble Baroness opposite who has somehow managed to get a debate on all sorts of mandatory awards on what is, after all, a pure and simple technicality in Clause 4.

Clause 4 is a simple technical measure which is necessary following the merger of the Business Education Council (BEC) and the Technician Education Council (TEC) to form the new Business and Technician Education Council (BTEC). If full-time courses leading to the higher national diploma of the new BTEC are to continue to attract the mandatory awards which were available for courses leading to the comparable qualifications of the old TEC and BEC, it is necessary to substitute a reference to the BTEC in the primary legislation in place of the present references to the predecessor bodies. This is the limited purpose and effect of Clause 4.

The noble Baronesses opposite argued that the Government should have taken the opportunity presented by this Bill to have widened the scope of the mandatory awards system to cover all vocational and professional full-time advanced courses. That is a fair enough point. There are anomalies, but life is full of anomalies. I believe it was that great American writer Damon Runyon who in one of his books said that "life is six to four against". I think he got the odds about right. However, it would cost about £11 million, and I am afraid that there is no prospect of resources of this kind becoming available for this purpose in the foreseeable future. We would have to make a commitment to substantial increases in awards expenditure which could not be honoured. This Government are not in the business of raising false hopes.

As I said, the amendment made by Clause 4 is a technical one which is necessary to continue the existing availability of mandatory awards for full-time higher diploma courses now that BEC and TEC have managed to form the BTEC, and I commend it to your Lordships.

Clause 4 agreed to.

Remaining clauses agreed to.

House resumed: Bill reported without amendment.