Education (Grants and Awards) Bill

HL Deb 19 January 1984 vol 446 cc1164-201

3.57 p.m.

Second Reading debate resumed.

Baroness David

My Lords, we now return to the Bill. I should like to thank the Minister for his speedy explanation of the Bill, which is the fifth Education Bill this Government have introduced since they took office in 1979. I have been spokesman for the Opposition from these Benches on each occasion. I think this is the first time the noble Earl has taken an Education Bill through all its stages in this House. I do not really count the 45 minutes we spent on the Education (Fees and Awards) Bill one afternoon last May just before the last election. So I congratulate him on that, and I am quite sure that from our opposing Benches with our opposite views we shall get on very amicably. Whether, as a member of a local authority for many years and as a member of an education committee, he can be so totally enthusiastic for the Bill as he appears to be I do wonder.

Of the five Bills so far introduced, three have been short, as is this one. But this Bill, with virtually only four clauses, is important because of its implications for local authorities, their expenditure and their powers. The noble Earl seemed to take the opposition that has come from the local authorities rather lightly. So far as I can make out, both local authority associations have expressed their hostility in no uncertain terms and they resent their loss of autonomy. The ACC—Conservative controlled, it must be remembered—has said that it cannot support the principle, that the Secretary of State should take money away from all LEAs in order to pay it back to some, especially when local government spending was being further restricted and local authorities which exceeded the Government's limits were being threatened with severe penalties. This Bill is going through Parliament at the same time as the rate capping Bill, which had its well publicised Second Reading in another place last Tuesday. It is no wonder that local government feels that it is under attack. The AMA expressed its indignation and objections in similar terms to the ACC in press releases in March—when the consultation document was first circulated—in June and in October. It also said that the first and most basic criticism of the scheme for the educational support grants was that it would interfere with the power of LEAs to make local choices on the basis of assessment of local priorities—which, of course, is why there are local education authorities.

As regards the principle of the Bill that there should be a power conferred on the Secretary of State to grant-aid developments which seem to him to be important, there are no powerful objections to that. I expected, of course, to be reminded that the last Labour Government were preparing to make some specific grants. The AMA says: It is important to remind those who might exaggerate our views on specific grants that the Associations do not oppose them for agreed national priorities, as demonstrated by the encouragement given to the new in-service training grants". So the quarrel is not over whether there should be specific grants—after all, they already exist in mandatory awards, urban aid, Section 11 grants, and so on—but over where the money should come from. The Opposition, together with the two associations, believe that it should be new money, not provided through the switching of an element of the ordinary RSG into the Secretary of State's hands. One can sympathise with the Secretary of State wanting to have some money for expenditure on innovations and improvements in the curriculum. I believe that successive Secretaries of State have felt frustration at not having any development money at their disposal and that when they put money into the RSG for a particular purpose the local authority decided to use it for some quite different purpose. We have one ex-Secretary of State speaking today and I wonder whether he will have any comment to make on that.

When the Manpower Services Commission takes over funding for the Technical Vocational Education Initiative, with hardly a by-your-leave to the Secretary of State for Education, and when the Department of Industry starts equipping schools with microcomputers, it must be even more galling. In its report the Select Committee on the Secondary School Curriculum and Examinations welcomed the Department of Industry's initiative, but added that, it involves the anomaly that those schools and authorities which have already equipped themselves with microcomputers are discriminated against in favour of those which have not. It is not an exaggeration to describe a situation in which the only possible specific ear-marked developments are those promoting policy priorities of departments other than the DES as absurd". In that same report in 1981 the Select Committee drew attention to the effect of expenditure cuts in the maintenance of standards. It said: Provision was widely threatened by shortage of resources". It referred to the problems arising from the current low level of resources, especially in relation to national aspirations regarding the curriculum. So it recommended, as the noble Earl quoted, that the DES should, have the ability … to fund direct such new developments on a temporary basis as may seem to it to be desirable". But it did not recommend that money for this purpose should come from the rate support grant.

The Select Committee further proposed that because of the great need—partly because of falling rolls and partly because of shortage of finance in local authorities—in-service training should be treated on a special basis. The Government, recognising the importance of in-service training, responded to this by introducing this year, 1983–84, a limited programme of specific grants through the application of Section 3 of the Education Act 1962. If the department can find a way of funding for one purpose need which it feels is urgent, why on earth not for another? After all, the DES does have research funds. Last year it produced £2 million for a development programme to provide more effective education for those pupils for whom public examinations at 16 are not designed. It funds the Further Education Unit and the National Foundation for Educational Research. The Secondary Education Council is to spend a couple of million pounds or so in producing new criteria for examinations at 16. Why should the hard-pressed LEAs be deprived by this Bill of their scant money?

There is the rub. In Clause 2 the Bill says that the expenditure in respect of which educational support grants are paid in a particular year shall not exceed 0.5 per cent. of the overall expenditure which the Secretary of State considers it would be appropriate for LEAs to incur in that year. The figure of 0.5 per cent. may not sound much but I calculate that it would be about £47 million this year, although the Minister says it is £45 million. In the light of the cuts experienced by local education authorities since 1979, of what the Select Committee said about shortage of resources two whole years ago, and of what HMIs have said about the lack of provision and falling standards in their past three reports, £45 million is not an insignificant sum, particularly when one remembers that nearly 70 per cent. of expenditure on education is committed to teachers' salaries.

I consider it unwise and even insulting to ask authorities for this. What is worse, those authorities willing to tender for the grant by proposing schemes will get at most only 70 per cent of the cost. They will have to produce the other 30 per cent. Therefore, it will be about £32 million, and not £47 million, that will be distributed by the department, while the other £15 million will have to come from the already depleted funds of the local authorities. This may mean further cuts in other areas such as books and equipment.

This could also risk putting an authority into the penalty area. What is the Government's response if that happens? I have read the debates and the Committee stage in another place, but I found no adequate reply there. Will the Government give a commitment that authorities so caught will not be put into the penalty box for overspending? I hope for some clarification from the Minister today. There is, of course, the danger that the hard-pressed authorities will for this reason be nervous of making proposals. The result would be that the money would go to the better-off authorities and that the less well-off will be further disadvantaged. In parenthesis, I am told that authorities would have been very doubtful about putting in bids for the NTVI if they had not been 100 per cent. funded.

There is another possibility. Some authorities may put in a claim for something that they are already doing. What machinery will be devised to ensure that those LEAs which have the greatest need will benefit most from ESGs? How will the activities be chosen? Also very important is what monitoring will take place both of the success of projects and of the effect on local authority services of the whole scheme. The risks that I have listed which are associated with the method of funding could be eliminated if it were new money and not RSG money that is to be used. Some authorities may feel that it is simply not worth applying.

I have a few questions on how the funding works. I understand from the Bill that 70 per cent. is always the maximum, but I think from what the Minister said that it is not necessarily the minimum. Could it be 60 per cent., 40 per cent., or 20 per cent? Can the LEAs be asked for more than 30 per cent? How long a period will each grant cover? Will it be one, two, three, four or five years? What happens at the end of that period? Will the LEAs have to pick up the tab? Currently, difficulties are being experienced by those authorities which have been receiving joint financing monies from the Health Service or urban programme funds where these funds have become time-expired.

I also have a question concerning the timetable. I take it that the projects cannot be agreed before the summer. When will the first bids have to be in, and when will they be decided upon? Will it be before the rates support settlement is announced? If so, will the successful bidders still get as much under the RSG as they would have if they had not been successful? That is not clear to me. If that is the case, other authorities presumably will be worse off than if there had been no Bill. I hope the Minister will make this absolutely clear. I know that he said a certain amount about this in his speech, but he spoke rather fast and I may not have totally picked it up if he did so.

I turn now to another aspect of the Bill. I refer to the powers given under Clauses 1 and 2 to the Secretary of State to make regulations. Just as there has been a tendency for this Government to concentrate more power at the centre, so also there has been a tendency to legislate by regulation. This puts much more power into the Secretary of State's hands and much less in the hands of Parliament. The activities that might be supported by the grants are to be announced in regulations; the rate at which the grants will be paid will be announced in regulations; the time and manner of payment will be announced in regulations. We have been told that these regulations will be made by statutory instrument and the regulations will be subject to approval by resolution of both Houses of Parliament. But this is not a totally satisfactory safeguard. I believe I am right in saying that regulations, when debated in another place, can only be debated for one and a half hours. If five or six schemes are proposed for ESGs, that does not give long for discussion of each. The package has to be voted on as a whole, so that if there are reservations about one or two, nothing can be done. In this House we are even more hamstrung as, by convention, we do not vote against regulations that have been passed by the elected House. All we can do is talk; so the safeguards amount to very little.

Clause 3(5) states that the Secretary of State shall consult such bodies representing local authorities as appear to him to be appropriate. So he should, of course, and we hope that having consulted he will listen and pay attention. Not much came out of the consultations after the consultative document was published last March.

What I am sure the local authority associations will not want is just a one-off meeting when the Secretary of State produces his suggestions. Some sort of permanent joint committee made up of Ministers and officials from the DES, representatives of the associations and possibly of the teaching profession, should be set up to consider what activities ought to be chosen, and to oversee the disposal of the money.

This would appear not only essential in the interests of the LEAs but also wise in the interests of the Secretary of State who will otherwise assume a massive, lonely and vulnerable accountability, which he might in due course regret handing over to a Secretary of State in a successor Government.

I have said that this Government have been concentrating power at the centre, and I have mentioned the enabling power of making regulations as an example; but, of course, the taking by the Secretary of State into his own control of half per cent. of the education share of block grant marks the most significant change in central/local relationships this century. 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. No wonder LEAs express anxiety and indignation.

There is one interesting outcome of this proposed legislation. The DES will be accountable for the first time as it will have a general development function, and it will be responsible for giving a lead. As The Times Educational Supplement said back in March when the Bill was promised: It will—or should—have dynamic consequences at Elizabeth House. It will make it even more important to broaden the range of experience and expertise among the assistant and under-secretaries in the DES, and make it easier for high powered chief education officers and heads to move in and out of the top echelons of top policy making". If the bill does have that particular effect, I think that could be a very good thing.

I have not touched on the activities suggested in the consultative document and in the Secretary of State's speeches, or what the noble Lord said today—and these were not all identical—because my noble friend Lady Lockwood, who I am very pleased to have as a spokesman on the Front Bench, will be dealing with them when she winds up for the Opposition at the end of the debate.

I should like merely to make one suggestion; it is that environmental education should be seriously considered as a candidate for grant. Last year saw the publication of the United Kingdom response to the World Conservation Strategy. One of the seven groups involved in making the response was an environmental education group which I chaired. So I should like to put in one bit of special pleading and quote a few lines from the shortened overview report: … environmental education has, up to now, been accorded no more than a humble ancillary role … In terms of any level of educational curriculum, the new thinking reflected in the World Conservation Strategy calls for drastic re-writing of the content and approach of educational strategies hitherto adopted. It should have corresponding repercussions on the outlook and training of teachers and on other parts of education which have failed to take account of this new thinking so far". A very helpful member of my group worked for the schools council.

Speaking of the schools council, has that body not carried out curriculum innovation and experiment of just the sort envisaged in this Bill? It has initiated some 180 curriculum projects: the schools council industry project is just one.

If the Secretary of State had been prepared to reform rather than abolish the council—and the death throes seem to be very extended—there might have been no need for this Bill, or for the setting up of two separate organisations (one for examinations and one for the curriculum) which should surely be looked at together, not separately. Sir Keith, in his speech at the North of England conference, showed some signs of acknowledging that the curriculum should lead and not vice versa, and I hope he sticks to that.

It seems strange that in the whole of that speech, which has been labelled as bold, ambitious and radical, and which contains a whole section on the curriculum, Sir Keith made no reference to this Bill whose main object is to allow the Secretary of State to exercise greater influence over curricular improvements. I suppose he is really interested in the Bill. I notice he left fairly early on in the Report and Third Reading debates in another place.

Is this short Bill really necessary? Will it do anything to raise levels of attainment and improve standards? I suggest that standards will continue to fall if all the Secretary of State does is to earmark funds from an ever-diminishing educational budget to pursue what he alone feels is needed. I believe that it will be ineffective in influencing the educational element in our schools. When local authorities have been antagonised, when LEAs up and down the country are struggling with falling rolls and falling income, when a curriculum development council is just now being set up, is this the best moment to bring forward a mini-Bill which can surely have only minimum effect?

4.17 p.m.

Lord Beaumont of Whitley

My Lords, I had imagined that probably most of your Lordships would applaud the purposes of this Bill. To a certain extent, I think that is probably still true. Even the noble Baroness, Lady David, in her very luke-warm reception of it did say that she could see no powerful objections, I think, to its main purposes.

I will go further than that. I think that it is a step forward in the right direction. Even those of us who most applaud the way in which our education system is run, cannot deny that it is cumbersome. Those of us who are party politicians and engaged in the educational field are sometimes abused by educationalists for dragging politics into education. Nothing, in fact, could be further from the truth. It is the party politicians who are the puppets of the educational system. That, on the whole, is I think as it should be.

All the great reforms of the educational system over the last 100 to 150 years have been put together by an educational consensus which has employed politicians, or political parties, to put into operation what has been basically agreed by people involved in the educational world. It was true of the reforms of the last century; it was true of the 1944 Act; it was true of the comprehensive system. Since then, political history has rather re-written itself so that the Labour Party is seen as the protagonist of the comprehensive system and the Conservative Party as its opponents.

Lord Graham of Edmonton

No.

Lord Beaumont of Whitley

Nothing, of course, is further from the truth. We were all involved. My party—and I am not making any particular claim for it—was the first to incorporate the comprehensive system in its party manifesto. I remember a time when the Conservative local authorities were leading the way in moving over to the comprehensive system, at a time when Labour local education authorities in the North of England were very much dragging their feet and putting up a rearguard fight. It was a move forward altogether and it was powered by the educational system and not by the party politicians.

Control of the educational system by those who work in it, admirable though it is, has been achieved at the expense of a certain inability to keep up with fast changing times. I hope that all of us, even those great centralisers, the present Government, will continue to defend the existing system of control. But that is not to say that if we can find ways of hurrying on the implementation of good ideas, we should not take them; and that is basically what the Bill is about.

Every now and then we get a Secretary of State for Education who both cares for education and who thinks. They are rare, but they do occur. It would be invidious for me to list them, even though it would not take a very long time; but Sir Keith Joseph is quite clearly one of them. If he is allowed to stay in that position long enough, we can expect some useful and provocative contributions from him.

This, I think, is the first fruit. Though it may not be a very major Bill, and though Sir Keith might not be very much involved with it—as the noble Baroness, Lady David, has hinted—nevertheless, it is slightly cheering to note that, while it is good only in parts, the parts that are good come from the Secretary of State, and the bad parts come from the Treasury. Mind you, my Lords, we cannot give Sir Keith an entirely clear sheet on this matter. After all, he was one of the gurus of the economic policy of the Government, but at least he always gives the impression of being a slightly schizophrenic guru.

The good part of the Bill is that the DES is to have the money to fund experiments in education. There is, I suppose, never a time when experiments in education are to be discouraged. There is no country so civilised that it can regard its education system as being incapable of improvement. Indeed, it can be said with some dogmatism—atleast I shall certainly say it with some dogmatism—that all national education systems are had. Some are less bad than others; and ours is undoubtedly among the less bad. But it is certainly capable of improvement.

This is an important time to inject improvements, since we are going through a revolution in society, and a revolution in society calls for a revolution in its educational system. First of all, we are abandoning the old industrial revolution—which, incidentally, gave rise to our present educational system—and moving on to a new one; and that will call for a new kind of educational approach. It will involve not just the teaching of the young to use computers, though we must not underestimate the speed at which this is happening. This week I was present at a conference where one of the speakers asked for hands up from those of the audience who had home computers. About a third of us put up our hands, and the speaker commented that this time last year, by his reckoning, the proportion would have been under a quarter, and the year before a tenth. Things are moving very fast indeed.

Another of the speakers at the conference recalled a story by Isaac Asimov, in which two children are discussing their school work in the year 2020, or thereabouts. The boy describes the research that he is doing on the history of education. The girl says: "Do you mean that all those children came together every day and stayed together for most of the day to get their schooling?" The boy says, "Yes, it sounds weird, but they did". "Gosh!", the girl says, "They must have had fun".

But along with the positive changes that are to come—and I am sure that there are to be very many of them—there will be changes that we shall be forced into in order to cope with future social developments. It is, I think, fairly clear that the effects of the second industrial revolution will include (indeed, they are already including), first, a shortage of employment—not necessarily work, but employment—and, secondly, an even worse maldistribution of wealth than we have at the moment. It would be ridiculous to think of the present Government being able to cope with these problems, wedded as they are to a rather outdated capitalism. But some quick thinking will have to be done by whichever Government are in power as to how to deal with the massive difficulties which are arising, and as always the field of education will be one of the main areas involved. Governments of all complexions will need the instruments proposed by the Bill.

So far so good. Unfortunately, we now come to the snags. The snag is that the Government want these advantages without paying for them. Well, I suppose that we all want our jam free, but I should have thought that the present Government had done enough preaching to others about this to learn themselves. So they are merely going to divert money already earmarked for the education budget. This is clearly a bad thing. No one can discern more than the smallest amount of waste, in the conventional sense of the term, within our school system at the moment. Indeed, all objective judges, including HMIs, have said, and are saying, that the education service has already suffered from the Government cuts; and those criticisms are a clear indictment of the arrangements in the Bill.

But we in the Alliance would go further. My noble kinsman and ally, the noble Lord, Lord Kilmarnock, who will be winding up the debate on behalf of these Benches, will, I understand, be saying more about this. However, we would say that this is a heaven-sent opportunity to inject more money into the educational system. We do not expect the Government to see this. They are too stuck in their anti-Keynesian groove, too tightly bound into the cycle of contraction, to realise the opportunities that they are losing. But this is the time of all times when the country wants, and should have, more education. We need it to cope with the innovative world outside.

Are we so rich in talent that we can go on using our educational system as a funnel for filtering out 85 per cent. of our youngsters from ability to cope with the world? Are we so happy with what is happening in Liverpool 8 and Brixton that we are not prepared to use unemployed teachers to give our schools the kind of intensive manning that they could use? In the present scene the very thought of unemployed teachers is obscene. I know that noble Lords opposite agree with this, but they just shrug their shoulders and say, "What can we do? It is economically impossible".

If it is economically impossible, there is something wrong with our economics—or rather with the Government's economics; and there is. That is the problem with the Bill. It is educationally sound, but it is economic rubbish. If there is a way of amending the latter without damaging the former, we shall seek it and join with all others who are seeking it.

4.27 p.m.

Lord Graham of Edmonton

My Lords, it was Lord Salisbury who once said that the purpose and function of local government is to diminish the power and influence of central Government. That could certainly be said again in the light of the present intentions of the Government. The main charge that I wish to make against the Government is that in this measure, as in many others, they continue, as they will in the coming parliamentary session, to diminish the power, responsibility and influence of local democracy.

I want to begin by congratulating my noble friend Lady David on doing what I consider to be a very effective demolition job on the hypocrisy aspect of what the Government have said of their intentions in respect of this Bill. At the same time I wish to acquit of any charge of hypocrisy the Minister who introduced the Bill. He described it in a fair, cogent and lucid way. He constantly stressed—from not only the Government's point of view but also that of those outside—that whatever is intended to be attained by the Bill, there will be no new money.

At this stage I want to plead in aid the observations of the chief education officer of the London Borough of Enfield, Mr. Gordon Hutchinson. I sought his observations on the Bill as I consider it germane when debating these matters to have the views of those who will be at the sharp end. In part of his letter, Mr. Hutchinson said: What is wrong with the Government's proposals however is that the Secretary of State's initiatives are being funded by clawing back money from local authorities. I think that the proposals would have been welcomed more generally if new money had been available to finance them…This would not matter so much if LEAs were not subject to such tight financial restraints with severe penalties in loss of grant for exceeding Government guidelines and with the threat of rate capping to come". The spokesman from the Liberal Benches was very fair when he pointed out that no caveat could be entered on any side of the House on the question of specific grants. It is a question of the specific grants having to be financed from the people. The Liberal spokesman was clear when he pointed out that this would be done at the cost of depriving local education authorities not only of freedom in the abstract but also of the ability to do the things they wanted. I have always supported the view that there is consensus as to the value of education, together with the need to provide financial support to the greatest extent possible, and also that local authorities should spend the money as they think fit and for purposes that they think fit.

We cannot regard what the Government are doing in this respect merely as a one-off and as though the cuts, restrictions and reductions that local education authorities have had to suffer over the last four years never took place. One has to consider the situation in its totality. One has also to recognise that over the past four years the rate support grant element of income to local authorities—not education authorities, but local authorities—has been reduced from 62 per cent. to 52 per cent. Here, we have the Government saying that not only are we giving you a reduced figure of 52 per cent. but we are also going to take 0.5 per cent. of the educational element within your rate support grant, and we are going to tell you what to do about it. The Minister knows very well that this will mean, in a number of cases, fewer teachers, fewer swimming pools, fewer libraries, fewer books and poorer maintenance in our schools. The Minister must know—it is his job to do so—what was stated in the latest report by Her Majesty's inspectors on the general state of schools. The report stated: Deficiencies were quite commonly noted in respect of remedial teaching, mathematics, science, music, art and design. Primary schools were frequently dependent upon parental contributions not only for extras but to buy books and basic materials". These are not the views of a party politician, nor the views of someone making a special case or pleading. These are the objective views of an impeccable source, HM Inspectorate. This was the situation that existed last year and the year before. Yet local authorities are to have visited upon them this further impost. It is against this background that we need to see the situation. In only two-fifths of local education authorities is the book supply satisfactory. This year the rate support grant reduction was estimated to result in a loss of 12,600 teachers. Then, there is the legislation, which we know that the Government are determined to try and drive through Parliament, for rate capping and other matters.

My noble friend Lady David has already pointed out that 70 per cent. of education expenditure goes on teachers. This 0.5 per cent. reduction therefore assumes an even greater significance. Like other Members of the House, I have read the debates in another place. The Bill was described by the honourable Member for Halton as a viperous little measure. I support that observation. The impact of the Bill on authorities will be varied. There will not be equalisation of opportunity. Every authority, big or small, fat or thin, rich or poor, well endowed or not, will be deprived of the same percentage. We know, however, that there are clever chief education officers, clever committees and those who will be able to use and milk the situation far better than others. Some authorities will be quick and perhaps able to recoup all the money denied them. I should like to give an illustration from the London Borough of Enfield of what the present intentions will mean. Mr. Hutchinson informs me: Of the £47 million quoted, £32 million will be deducted from rate support grant. In Enfield's case this reduction of 0.35 per cent. would amount to about £180,000. Although Enfield to a very large extent has not cut back on the education service, the loss of £180,000 in 1984–85 for example would be very damaging. It could mean for example the loss of 31 teachers from September or cutting out school swimming entirely". These are very serious impacts and consequences. One point that I wish to make—I shall give illustrations later—is my sincere belief that the Government do not think sufficiently of the consequences of what appear to be attractive financial manipulations at the time. Mr. Hutchinson goes on: In order to regain that £180,000, Enfield would have to bid for a project costing £260,000 and to find £80,000 to make up the contribution of 30 per cent. envisaged from the local authority. Although the borough would have not lost financially, it would still have lost £260,000 which otherwise would have been devoted to maintaining the education service in its present form. This would mean further harsh cuts in the service provided. If Enfield bids successfully for projects totalling £500,000 it would receive £350,000 in grant but would contribute £150,000 towards the projects. Taking this £150,000 together with the £180,000 which would be lost in RSG it is clear that Enfield would have contributed £330,000 in order to receive £350,000-worth of grant. So its real contribution to the scheme would be nearer 50 per cent. rather than the 30 per cent. quoted in the Government's proposals. Furthermore that £330,000 would not be available for the normal service which it provides. The Minister should take these matters fully on board. He glossed lightly over the impact. I should like very much to hear quoted in his reply the bodies, the individual authorities and even the individuals claiming, on balance, that what he proposes is likely to be in the best interests of educational opportunities.

We should also be sensitive to the possible consequences not easily seen, I admit, of all legislation. I hope that the Secretary of State has taken fully on board that cutting the effective amount of money available to councils overall at a time of inflation means that, on the margin, some worthwhile recipients of public money will experience a reduction, even complete starvation.

I can sympathise with education committees that are forced to recast their priorities. I have in mind such institutions as the Open University. I declare an interest as a graduate and now a governor. There is now little need to plead the case for support of the Open University in Parliament or in the country at large. This is not a debate in which to plead for more generous treatment for the Open University; but the Minister can note that I shall be taking opportunities as often as I can to do just that in the future. However, the headline in the latest issue of the Open University journal Sesame makes depressing reading. It reads, "Fees go up to £133 as grant is cut again." Under the sub-heading, "Bleak Outlook", it says: In a sense, the news for 1984 is no worse than had been expected. The bleakest part of the message from the DES is the indication that the grants for 1985 and 1986 will be £59.1 million and £58.2 million respectively, with no allowance for inflation, pay awards, or other unavoidable increases in costs. Unless the Government can be persuaded to change its mind before these grants are actually paid, the cuts in 1985 and 1986 will be even more severe than those in the current year". A feature of recent years as far as the Open University is concerned has been the steady drain on two Open University funds, the financial assistance fund and the fund for unemployed students. More than 6,000 students have had to ask for assistance in the past year—assistance towards tuition fees; assistance towards course fees, summer school fees, travelling, et cetera. Suffice it to say that, with support for students being wholly discriminatory—not mandatory—I fear that, on the margin, a deduction of even 0.5 per cent. from the rate support grant education funds will turn the screw just a little more and the success of the Open University could very well be at risk.

I want to ask the Minister a straight question which I hope he will be able to answer when he winds up. The Minister knows that the Open University is well capable of responding to national needs. Will he examine ways in which it can be made possible for the Open University to bid for a share of these specially created monies—this clawed back 0.5 per cent? Is it possible for the Bill to provide for it even now, or by amendment? If, in Committee, I move an amendment to provide for this, will I get the Minister's support?

There is a further category of institutions able and willing to play their part, and which can well feel the pinch when this 0.5 per cent. "chop" takes place. I have in mind adult residential colleges in the nonpublic sector, and I have especially in mind the Cooperative College, supported and sustained by the British co-operative movement. I declare a further interest in that I am a former student of that college and I continue in your Lordships' House, as in another place, my long association with the co-operative movement.

If it is the purpose of this Bill to stimulate certain educational innovations—and I do not seek to question those needs—my plea would be to both the Secretary of State and to local education authorities to utilise the non-public sector for some of these redirected monies. The Secretary of State knows very well the value of places like the Co-operative College. Students in the policy studies faculty are fully funded by mature student grants from the DES, and this collaboration is beneficial to state and student. The House will be aware that many local education authorities have extensive industry liaison programmes. Industry, the CBI, and the TUC are all involved in special projects with schools. Wall charts from industry have proved to be valuable educational tools.

The education department of the Co-operative Union has—like many other non-public sector educational establishments—always been willing to initiate and innovate (latterly highly successfully) projects with local education authorities and schools. I quote as an illustration the in-service residential training courses for secondary and further education teachers which are fully supported by local education authorities from all over the country and provided by funds from the Co-operative College—not from public funds. At present the college is involved in a self-financed research and development project which looks at the problems of the low achieving child in secondary schools and the kind of materials which would be useful in stimulating and motivating them to learn when they have left school.

All of these projects are small-scale, practical and relevant to the needs of pupils and teachers. I believe that small-scale innovatory projects such as these, undertaken by independent agencies, offer the key to some of the developments of the future. I ask the Minister again: is the Secretary of State in earnest when he talks of innovation? Is he prepared to look at perhaps a system of matching grants to draw non-public sector institutions into the process of educational development where they could act as acatalyst? I know that there are many institutions which are well able to respond.

In conclusion, the Secretary of State in his speech to the North of England Conference spoke of the need for a curriculum which would combine breadth, relevance and balance and would still be able to differentiate between the abilities and aptitudes of different pupils. These are laudable aims, but I wonder how they can be achieved if the dialogue is only between the department and local education authorities, and if the only substantial development programmes are those devised by the public sector and which fall within the pooling arrangements operated by local education authorities.

4.46 p.m.

Viscount Ridley

My Lords, first I should like to apologise to the House as I may not be able to stay until the end of this debate owing to another appointment; and in particular I should like to apologise to my noble friend Lord Swinton whose introduction of this Bill was so lucid and so clear to all of us, and who set an example of brevity which I hope I can follow.

I intervene in this debate only to put the view of the Association of County Councils, of which I am president, and which represents education authorities responsible for running the service for about three-fifths of the population of England and Wales. They have no quarrel at all with the objective of the Bill which is, as we know, to give the Secretary of State power to grant-aid developments which seem to him important. Anything which can increase the quality of our education in these difficult times must be welcomed and encouraged. I have little doubt that the Secretary of State will use his new powers wisely when the time comes.

Nor is there any argument at the moment that the sum of money involved is so large as to affect the education budget seriously. The £30 million about which we have heard, which may well be spent in this way, is not a large percentage of the education budget, although I have no doubt that there will be plans to increase that figure should the scheme be successful, and the percentage taken is more likely to grow rather than to diminish in the future. The recommendation that the Secretary of State should have this power is, as we have heard, as a result of the report of the Select Committee on Education, Science and the Arts in another place who recommended that that power would be a very valuable addition. In the sense that education is a partnership between the Government and local government, these matters must require urgent and serious discussions in order to make the most of the limited resources. I am not suggesting that these discussions will not take place. But on this occasion the Government are in effect saying, "Can we talk about how we spend the money that we are going to take from you?"

The ACC's objection to this Bill—and this has been mentioned at least three times in three speeches—is very simple. The £30 million which the Secretary of State proposes to pre-empt in order to fund these projects will be taken from the rate support grant. The Select Committee to which we have referred did not recommend that at all. What it actually said was: The DES should have the ability to fund direct such new developments on a temporary basis as may seem to be desirable". The important words are that the DES should have powers "to fund direct". What is now proposed is quite different—namely, that the DES should have the powers to allocate to itself part of the rate support grant which otherwise would have gone to all local authorities, the rate support grant being reduced by the equivalent sum.

The principle of specific grants is one which, as we know, is established, for better or for worse, in the fields of police and transport. But it was abolished as long ago as 1958 when the legislation of that year made a great step forward in saying that local authorities should be responsible for the allocation of their funds, in the manner which they thought fit, between the different services for which they were responsible.

This Bill is therefore seen by the ACC as a small but important step backwards from the principle of local autonomy. It is, to use the inevitable cliché—and at last this is something I can say which has not already been said—thethin end of the wedge. It amounts simply to substituting central priorities for local ones at local expense. We can understand the desire of officials of the DES, HMIs, et cetera, to have their hands on more levers of educational power and to control yet more things. Such powers could have been very useful to previous Governments who were trying to alter the basis of education in a comprehensive way, for example, and the principle is one which I think should give us grave cause to stop and think. If the Government wish to increase the quality of education—and who does not?—then they should be prepared to put their money where their mouth is and bring forward the £30 million from their own resources.

It has already been said that local education authorities, together with everyone else in local government and indeed many other people, at the moment are subject to severe financial restrictions. Savage penalties are to be enacted on local authorities who go beyond the rules and overshoot their targets, and so forth. This small measure will, in fact, add yet another complication to the calculation of the rate support grant, which is quite complicated enough already, and in trying to follow the recommendations of the department it may well push authorities over the top and into penalty, thus creating yet more problems for them, and they will be forced to lose yet more rate support grant. So yet another spanner is there to be dropped in the works.

In conclusion, the ACC welcomes this Bill and its general intent, but must ask the Government most seriously to look at the way in which the extra money is to be found. Despite the safeguards to which my noble friend referred, I cannot believe that the Government have realised quite what problems this may create for local education authorities if it is to be funded solely by deduction from the rate support grant.

4.51 p.m.

Lord Prys-Davies

My Lords, we are proud of the state education system in this country. In the past education was for many of us the way out of an inheritance and environment of poverty and a dependence on monopoly industries. But the fact that we are proud of a system which has developed through generations of concern by local authorities should not make us complacent.

I very much agree with the noble Lord, Lord Beaumont of Whitley, that more—much more—needs to be done. No one, not even the Secretary of State and his staff, the local education authorities, teachers or school governors, always knows best the initiatives which are required. But I believe that the education service would benefit by giving to the Secretary of State the statutory powers to enable him to grant-aid developments which appear to him to be important in order to respond to new needs or to close gaps which are opening up in the service. The needs and the gaps to which I have referred do not always reach the headlines. Some may well argue, and some have argued, that to give such powers to the Secretary of State is misconceived. But, as I have indicated, I find it acceptable in principle.

The present holder of the office of Secretary of State for Education was formerly the Secretary of State for Health, and during his term of office at the Elephant and Castle he was able to take initiatives from the centre, to tackle many shortcomings, to overcome problems and to cross administrative boundaries—although his legislation for the reorganisation of the health service was misdirected.

However, the success of the many initiatives for particular categories of patients which he was able to encourage, finance and direct from the centre, might well appear to him to point the way for an education administration to follow, as far as it is possible to apply the lessons of the DHSS to the Department of Education.

The noble Earl the Minister has indicated to us the projects which the Secretary of State has in mind if Parliament gives him the powers for which he asks. He has referred to the innovations in the curriculum, the development of records of achievement, improving certain aspects of mathematics teaching, and possibly supporting the special educational needs of handicapped children. There are many other possibilities. My noble friend Lady David has referred to the need to improve environmental education. Perhaps the Minister will indicate how these projects are to be selected before they are funded by the department.

I wish to turn particularly to Wales, and I note that the Bill gives the same but separate powers to the Secretary of State for Wales. In response to the noble Earl the Minister, I very much trust that the regulations to be made under Clauses 1 and 3 of the Bill will be so framed that they will enable the Welsh Secretary of State to use those powers to encourage the integration of Welsh into the broader curriculum and to produce suitable Welsh language textbooks and teaching materials for the schools. We must be concerned with the need to defend the traditional culture associated with the language as well as to prepare our young people for an increasingly complex society.

However, the initiatives which the present Secretary of State was able to promote at the Department of Health and Social Security were almost always undertaken with the help of extra money which he was able to find and then set aside for the purpose. The difficulty with this Bill—and it is a substantial weakness—is that there is no extra money to finance the developments which the Secretary of State considers to be important. The point has already been made by many noble Lords that each development will be at the expense of local authorities generally.

It is said by the Government that we are concerned with very modest sums of money—insignificant sums. But it bespeaks an extraordinary sense of priority that they cannot find these so-called insignificant sums from central Government funds. In years gone by the present holder of the office was fond of pointing out and preaching that critical variations, often involving quite small sums of money, can lead to substantial changes. By the same token, they can lead to severe changes. My noble friend Lord Graham of Edmonton has already demonstrated how this will bite in his own area. That is one of the LEA's fears: knowing as they do that, with existing resources, they are unable to meet the existing needs, the known needs, let alone the unknown needs, of their areas.

Undoubtedly there are many imaginative local education authorities already undertaking some of the work which the Secretary of State would wish to initiate or support from the centre. In my view, there is no inherent reason why such work should be retarded or stopped. Nevertheless, there is some reason to suppose that the growing competition of the demands for scarce resources which assails the LEAs could lead to this result. If that were so, what then would have been achieved?

I very much agree with my noble friend Lady David that inadequate attention has been paid to the views of the LEAs by an Administration which appears to be in an undue haste to produce this small Bill. If this Bill is enacted in its present form—and I fear that it will be enacted—my hope is that in the longer run a more enlighted Government, in their wisdom, will make the necessary alterations to this piece of legislation to enable additional money to be set aside for the purposes from central Government funds. The principle that the Secretary of State for Education should grant-aid developments which he favours out of additional funds is not an easy one to get through in many local government circles, but the principle embodied in this Bill that he should fund his favoured programmes by reallocating existing resources is totally opposed by the local authority associations.

Those of us who believe in the principle of central Government grant-aiding the programme which they consider important must be concerned that elected representatives, in the light of their experience of this Bill, will come to oppose even more the principle of grant-aid from central Government, believing that by accepting this principle their job is being taken away from them, believing that by this means the financial relationship between local authorities and central Government is gradually being changed. In the words of the noble Viscount, Lord Ridley, this is the thin end of the wedge, and they will oppose it. I conclude by merely saying that we fear that this Bill can do a great deal of damage to a principle which some of us consider to be sound.

5.2 p.m.

Lord Alexander of Potterhill

My Lords, I should like to begin by offering my congratulations to the noble Earl, Lord Swinton, for the admirable way in which he introduced this Bill on the first occasion on which he has had the opportunity to do so. I rise in complete support of this Bill. I disagree with the noble Baroness, Lady David, when she says that this is the most important change in the relationship between central and local Government this century. She must have forgotten the small change to which the noble Viscount, Lord Ridley, referred as a major step forward in 1958. The education service was funded by specific grants from 1902 until 1958, and showed the capacity for great development during that period. But in 1958 the local authorities brought enough pressure on the Government to have general grant introduced, which, in my judgment, has been a tragedy for the education service. I hope to set out the reasons why I reach that conclusion.

The argument against this Bill submitted by the local authorities can really be stated another way. They do not object to specific grant as long as the Secretary of State finds the money. Another way of saying that is that they insist on reserving the principle of general grant that monies allocated for the educational service in rate support grant can be used by the local authorities as they think fit, and not necessarily for the education service. If there is any doubt on that, may I remind your Lordships of the number of occasions in recent years when a question has been asked about the failure to meet a specific need in the education service, and the reply of the responsible Minister has always been the same. He has assured the House that money was put into rate support grant to meet that need, but the money was not spent to meet that need.

The examples are endless. The noble Baroness, Lady David, referred to the specific grant for the in-service training of teachers. When Mrs. Shirley Williams was the Minister responsible for education some of us managed to convince her of the urgent need for agreat advance in the in-service training. She accepted the validity of the arguments. She put £8 million in rate support grant—or I believe general grant as it was then called—for that purpose. If in the relevant year the local authorities had added their proper proportions, between £12 million and £13 million would have been spent on the in-service training of teachers. What happened? The total expenditure on the in-service training of teachers was £2 million. What happened to the rest of the money, I do not know.

Viscount Ridley

My Lords, may I inform the noble Lord? The Chancellor of the Exchequer took it out of the rate support grant.

Lord Alexander of Potterhill

My Lords, it was in the rate support grant for that purpose, and the local authorities knew that.

Baroness David

My Lords, would the noble Lord allow me to say that I said when I was speaking that I sympathised with the frustration of Secretaries of State that when they have put money into the rate support grant for a special purpose it was not used for that purpose. Of course I was thinking of Mrs. Shirley Williams and the in-service training money at that moment.

Lord Alexander of Potterhill

My Lords, I entirely accept that. The point I am making is that the effect of general grant is that national policy in education cannot necessarily be carried out. The Secretary of State has virtually conceded a complete alteration of Section 1 of the Education Act 1944, which provides for the education service to be administered by local authorities under his control and direction. He has no power over local authorities at the present time.

What has happened as a result of the step forward to which the noble Viscount referred? The next step was the development of corporate management. Corporate management is an interesting thing. I should myself call it corporate mismanagement. It has two important effects. The first is that half-a-dozen or more chief officers waste half-a-day a week discussing problems, and on almost every occasion one of them knows what the problem is about and knows what the answer should be, and the other six do not know anything about it. This is inevitable.

Corporate management has another effect. When the local authority comes under financial pressure, it has a serious effect on the education service, because local authority finance is inevitably very imbalanced. The education service requires roughly half the total expenditure of the local authority. That is an even money bet, until you go into a meeting of the corporate management team, because then a problem in education that requires money is a bet of 6 to 1 against.

What has been the effect of the cuts on the education service? It must bear its fair share of economies. That is entirely reasonable. But the fact is that it has borne more than its fair share. If your Lordships want an example of that, you have it at the moment in Kent. Kent has discovered, with 10 weeks to go in the financial year, that it is likely to overspend by £2 million, so £2 million has to be saved in the next 10 weeks. How does it propose to do that? Quite simply by telling the education department to save £2 million. So the chief education officer has written to all the head teachers instructing them in the economies which must be made. However urgent a letter is, they must use a 12½ pence stamp; they must not make a phone call except during the cheap period, which roughly means either before the school opens or after it closes and they must not buy books or other equipment until after the end of the financial year. That is the effect of the operation of a general grant system.

When the Government provide money for the police, they insist that it is spent on the police. When they provide money for health, they insist that it is spent on health. But when they provide money for education, the local authorities object to their saying that it should be spent on education. I accept that both in health and in the police there is central control and direction. I have no wish to see central control and direction in education. Distribution of power in the education service is imperative in a free and democratic society. But distribution of power can be sustained with a system of specific grants for a particu lar service just as adequately as under a general grant. Indeed, it was so sustained until 1958.

I support this Bill for one simple reason. It is, I hope, the beginning of a process that will restore specific grants for the education service. It will take a lot of doing, but it should be done, because what Disraeli said a long time ago is still true: the future of the nation depends very largely on the future of the education service. I believe that it has suffered desperately under an obstructive general grant. I hope that the system of specific grants will be restored in the interests of the nation.

5.12 p.m.

Lord Taylor of Blackburn

My Lords, I have listened intently to what speakers from each side of the House have had to say and I was particularly interested in what my noble friend Lord Alexander of Potterhill had to say about this. I wonder whether Lord Alexander, with his great knowledge and wisdom on education, if he was still in the capacity of secretary of the association of education authorities, the defender of local education authorities, would still hold the same views that he holds today.

Lord Alexander of Potterhill

My Lords, if I may intervene, I may say that, as secretary of the Association of Education Committees, he did, in 1958, totally oppose general grant and so did the association. It was largely because of that that the local authority associations made dead sure that after local government reorganisation in 1974 the Association of Education Committees would not be able to continue.

Lord Taylor of Blackburn

My Lords, I do not intend to go into details because I have worked for so long with my noble friend Lord Alexander that to do so would be bringing up things that happened in the past, something which I have no intention of doing now. I do not want to deal with a great deal of what has been said because I would merely be repeating what has been said by other noble Lords. I want to deal with the way in which I have tackled this particular problem and the consultations that I have held with different people of all party colours and all associations to try to get a balanced view. I think that the majority of people accept the concept of this Bill and the principle of this Bill, but they are not happy with the means by which this Bill has been presented on the grounds of the financial implications.

For a long time now local authorities have been at loggerheads with central Government because powers have been taken away from them. I do not think that this Bill will help them in this direction. It will constitute a step towards a further bringing away of the local authorities from central Government. A lot of local authorities and associations feel that, once again, this is not the partnership between central Government and local government that has been asked for by so many people for such a long time. I think that the noble Baroness, Lady David, in making her suggestion of a consultative committee, of a partnership between central Government, the local authorities and also the teaching profession, puts forward a good idea. If some sort of consultative committee were set up in this direction it would certainly be worth while.

Again, one of the main stumbling blocks of this Bill is the financing of it. This criticism has been repeated by practically every speaker. They are not happy at all about the way in which it should be financed—with the exception of my noble friend Lord Alexander. And I am sure that if Lord Alexander thought a little more about the financing of it he, too, would not be all that happy about the way in which it is proposed here. Therefore, I support the association, who say, "If this is going to be enacted"—and I am sure it will be enacted—"then please give us more money for it. Give us new money. Do not take it out of the rate support grant". This is where our differences lie. I hope that when we reach the Committee stage of the Bill the Minister will come forward with new ideas.

5.18 p.m.

Baroness Cox

My Lords, I am happy to speak in strong support of this Bill on a number of grounds. They are, first and foremost, because its provisions can be used to further this Government's commitment, as outlined in the gracious Speech at the opening of this Parliament, to promote educational standards; secondly, because the Bill will encourage local education authorities to respond more flexibly and sensitively to educational needs; and, thirdly, because the proposals are couched in a form which retains the sacrosanct autonomy of local authorities with safeguards to ensure that this is not the thin end of the wedge of centralist control.

If I could amplify those three points, first, your Lordships will recall that the gracious Speech identified this Government's general commitment to: pursue policies for improving standards of education". More specifically, this Bill has been promised with these words: Legislation will be introduced to enable grants to be paid to local education authorities in England and Wales for innovations and improvements in the curriculum". The beauty of this Bill as it has been formulated lies in the balance it achieves between initiative and constraint and between freedom and accountability. For example, the availability of education support grants will help local education authorities to respond swiftly and flexibly to new educational demands, to undertake initiatives, to improve standards and to set up pilot projects which could have far-reaching and indeed national implications.

We have heard some of the suggestions which have been put forward for which the grants might be used. I should like to highlight the one suggestion of the need to improve the teaching of mathematics. This has recently been highlighted by the very interesting but very disturbing research undertaken by Professor Prais at the National Institute for Economic and Social Research. His study compared mathematical attainment by British and German school children and it is very worrying that he found that nearly all British pupils were two years behind their German counterparts in absolute levels of attainment in mathematics. The recommendations of the Cockroft Report could go a long way towards helping to remedy the problems of poor mathematical attainment in English schools. The availability of some funds in the form of support grants such as those envisaged in this Bill could help innovatory schemes to be established along these lines.

This Bill, I believe, is to be welcomed for the freedom it bestows—freedom to local education authorities to apply for education support grants, and freedom for the Secretary of State to encourage specific innovations. It is an extraordinarily anomalous position which pertains at present, in which the Department of Education seems to be the only Government department which cannot pay grants to local education authorities except for in-service training. If the Secretary of State wishes to encourage a particular development, he must depend on grants administered by other departments. For example, the funding for the important initiative designed to encourage the setting up of some technical schools had to be provided by the Manpower Services Commission.

I think if there had to be one single justification for this Bill, it is to be found in that anomalous situation in which the Secretary of State for Education and Science has to rely on another Government department to fund such an important educational initiative, because he himself has no powers or funds to do so. As The Times Educational Supplement commented: It is frankly absurd to have education innovation sponsored by Employment and Industry but not by the one Government Department with any direct responsibility for education. I therefore welcome the opportunities which this Bill will foster, but I am also relieved to see that there are safeguards. As I said earlier, I believe that it does achieve a balance between freedom and constraint, between autonomy and accountability; and the constraints are twofold. First, there is that overall constraint on the total amount of money to be made available for dispensation in the form of specific grants. That upper limit of one-half of 1 per cent. means that the overall balance between local autonomy and central control will not be upset.

Secondly, the types of policy initiatives for which grants will be paid, and any changes in these initiatives, are always to be specified in the regulations which require the affirmation of both Houses of Parliament. Therefore, they will not be chosen at the whim of any Secretary of State but will always be subject to parliamentary control.

Thirdly, the Bill does not give the Secretary of State any new power to do anything. Local education authorities will always be free to decide whether they wish to apply for the new grants and it is up to them to decide that they wish to do so. However, the availability of such grants may encourage them to consider the implications of national priorities and initiatives for their own particular areas.

Therefore, the philosophy underpinning the Bill is one of partnership: a partnership between the Secretary of State, who has the ultimate responsibility for the quality of education provided in our schools and colleges, and the local education authorities, with their responsibility for education in their ownareas. The Bill provides one mechanism for meshing national priorities with local initiatives within a framework which retains the autonomy of the local authority.

I hope I have indicated why I am pleased to speak in support of this Bill, but I am aware that there are many people who are responding with outrage or dismay, worried that the Secretary of State is filching money from education budgets which have already been subjected to cuts. In reponse, it might be helpful briefly to remind those who are worried that more is now being spent on education in this country in real terms than ever before. Moreover, given the falling number of school pupils, the increase in per capita expenditure is greater than the overall increase and is going to increase further, because the number of school pupils is going to diminish even further—indeed, dramatically—and whereas 700,000 pupils entered secondary school last autumn, that figure will fall to only 500,000 in the next few years. So, whether we like it or not, there is bound to be some slack in the system, some leeway and some room for manoeuvre. It is indeed a time for unprecedented flexibility and creativity.

I should like to make just one point concerning the argument that with this Bill the Government will be taking money away from local authorities, money which rightly belongs to them. My point is this: At this stage nobody has any idea what the rate support grant figure will be for 1985–86 when the Bill is due to come into force. It would have been perfectly feasible for the Government in due course to set the rate support grant at a half of 1 per cent. lower than it would otherwise have been and to announce that extra money was generously being made available for education support grants. That would have been perfectly possible and it would have caused less opposition, but arguably it would have been less honest than the course the Government have chosen to adopt. The difference is perhaps more one of political presentation than of substance, and the Government are to be commended for the principled way in which they have presented their proposals.

In conclusion, my Lords, I would point out that consideration of this Bill is particularly timely, given the Secretary of State's recent welcome speech at the North of England educational conference in which he gave an unequivocal commitment to improve standards of education. This Bill offers a framework within which such improvements can be encouraged in a spirit of partnership and in a way which preserves the fundamental principles of both autonomy and accountability.

5.27 p.m.

Lord Stewart of Fulham

My Lords, there were references earlier in the debate to the great change in educational finance which occurred in 1958. I wish to draw attention to one particular aspect of that. Before 1958 the grants given by central Government to local authorities for education were not only a specific grant—that is to say, for education and nothing else—but also a percentage grant—that is to say, not a fixed sum of money but a percentage of the local authority's expenditure.

The nature of the change was not only to shift from a specific grant to a general grant but to shift from a percentage grant to a fixed one; and the purpose of that—the then Secretary of State for Education made no bones about it when speaking to the House of Commons—was to secure governmental economies, because the percentage grant system undoubtedly put the local authorities in a very favourable position. If they decided that they wanted to spend, say, £100,000 more on a particular part of the education service, they could do so in the knowledge that perhaps some 40 per cent. of that would be met by central Government. Conversely, if they were considering reducing educational expenditure by £100,000, they might be a little discouraged in that process by the reflection that they would be saving central Government £40,000 and not saving it all for themselves. In fact the percentage grant encouraged a local authority to be generous and it discouraged the parsimonious.

The change had the reverse effect, and was intended to have that reverse effect. That was really what was done by the change made in 1958. It was a measure taken to try to reduce central Government's expenditure on education. That was why a great many people opposed it. Similarly, we find ourselves now with a Government who are taking a step in the direction of specific rather than general grant and who are also doing it in a way which will save some money for central Government. That seems to be the guiding theme of Conservative Governments' policies.

I think we have to ask whether this proposal can be justified at the present time. Let us say that it is a move towards specific grant rather than general grant. That is why the noble Lord, Lord Alexander of Potterhill, welcomed it. Indeed, so far as I can understand, while some noble Lords were assuring us that the Bill is not the thin end of the wedge, the noble Lord, Lord Alexander of Potterhill, earnestly hoped that it would be and was supporting it for that reason. All I can say is that it is a very thin end of the wedge, indeed, and it will take a very long time before thrusting it in will make very much difference.

We have to consider whether this process, which is really having a whip round among all local authorities for the benefit of those who select schemes which meet with the Secretary of State's approval (that is the nature of the Bill) is a good thing to do. To besure of that, we want to know a little more about the purposes for which this is being done. It is very sensible and praiseworthy to say that there are certain parts of the education service which we particularly need at the present time and which are particularly relevant to the nation's and the community's needs, and we must see that local authorities spend on them. But we could say that with more enthusiasm, if the Government were a little clearer in their own mind as to what those purposes were.

What we have found is that, every time this matter has been discussed, there has been a bit of a shift in the list of things for which these special grants are to be available. When a consultative document was put forward it was one thing; speeches made by Ministers in another place have given other suggestions. The range seems to increase with every successive pronouncement. The one thing that seems to be agreed is that something should be done for mathematics, but then, in addition, there is to be something done about teacher management. about peripatetic teachers, about arranging records of achievements, about providing for handicapped children, and so the list goes on and on.

We are obliged to ask: if this is so, if it can be as varied as all this, when you have finished scraping a bit of rate support grant off every local authority and have distributed it out for almost every special purpose you can think of, is there really going to be any difference at the end or is the whole process a piece of bureaucratic elaboration? I hope, therefore, that before we have finished with this Bill we can have a more positive and—if it is to be useful—a more limited description of the purposes for which these special grants are to be provided.

We have had some indication of what they are not to be provided for. Amendments in another place suggested that anything done to help nursery schools and nursery classes should rank for these special grants, but the Government turned them down. It was suggested that anything done for remedial education should qualify for grants of this kind. The Government turned that down. Then the fear was expressed that help would be given by means of these grants to schools which were seeking to turn themselves into grammar schools; in effect, to restore the 11-plus. An amendment was moved to try to prevent that, but the Government pushed it aside. That possibility, therefore, is still there. These special grants may be used to make it easier to re-introduce the principle of selection according to ability in secondary education. None of this is very encouraging.

Then one has to notice that this is being done at a time when local authorities are, all of them, hard up. We all listened with sorrow to the troubles afflicting the Kent education authority at the present time, but I think the noble Lord, Lord Alexander of Potterhill, will know that Kent is by no means the only sufferer. Up and down the country, local authorities are faced with the problems of shortage of teachers, shortage of books and shortage of equipment, and to tell them that their rolls are falling is no very great comfort. It is well-known that if the roll of children in a school is diminishing by a certain amount, you cannot immediately reduce its expenditure by that amount unless you reduce the range of services which it offers.

My noble friend Lord Graham of Edmonton drew attention to difficulties of this kind which a great many local authorities face. Some of them, if they try to qualify for grant by deciding to spend their own contribution—which will be necessary in order to get a grant of this kind—may be obliged either to reduce ordinary, necessary educational expenditure or to run themselves into the risk of incurring penalties for overspending on education. It is not therefore a very satisfactory picture—an arrangement of special grants for purposes not very clearly defined, to be paid for at the expense of local authorities in general at a time when they are all hard up.

If I may say so with respect to the noble Lord, Lord Beaumont of Whitley, it really was not much of a defence of the Bill for him to say that it would be a splendid Bill if it did not raise the money in this manner and that the Government were in a sort of cleavage. We were told earlier today, in the course of a Statement made by the noble Lord, Lord Skelmersdale, that the Government invariably speak with one mind and one purpose on all matters. The noble Lord, Lord Beaumont of Whitley, endeavoured to defend the Secretary of State's action in this Bill by the most backhanded compliment I have ever heard. He explained that he was a guru, but he was a schizophrenic guru. That, apparently, made matters better and not worse. I have been puzzling out that one ever since. It seems to me typical of the general muddle in the Bill.

A number of local authorities are already engaging in important innovations. There are innovations in the use of computers, in the development of practical design, in arrangements between primary and secondary schools for the teaching of French or the teaching of science, and arrangements to deal with the problem of children who under-achieve in mathematics and in one or two other subjects. The country is full of innovations made by local authorities. What are these local authorities to do when this Bill comes in? They may put in a claim to get a special grant for the thing that they are already doing. They may be lucky. But, if not, they must either go on doing it and risk overspending and getting into penalties, or they must cut it because the particular innovation that they have developed is not one that happens to meet with the approval of the Secretary of State—or perhaps I should say Parliament.

This is not the way in which to promote effective innovation in education. If the Secretary of State wanted to do that, he ought previously to have consulted some time ago with the local authorities and with the educational world in general and have been able to come to the House with certain definite and precise proposals, and with the money that he proposed to provide for them, apart from the money normally provided for education purposes. He has not done that. He has presented us instead with a Bill which is really a slovenly piece of work and which I do not think can commend itself to the House.

5.40 p.m.

The Lord Bishop of Norwich

My Lords, by inadvertence, I am afraid that my name is not on the list of speakers. Therefore, I plead the goodwill of your Lordships. The Church has one or two views on this Bill which I think I may be able to share with your Lordships. May I make special reference to the speech of the noble Earl the Minister He spoke about small rural schools. Although the Bill covers the whole country, in my own diocese, which is typical, one-third of all our small rural schools are church schools and faced with the problems which the Minister mentioned.

I was encouraged when I heard him say that the Bill might help peripatetic teachers of drama, music and other subjects. We have found that peripatetic teachers have raised not only the educational standard but also the breadth of interest of the teaching which the children receive. Whenever we on these Benches speak we are glad to pay tribute to the partnership between church and state. For over 100 years this has been to the good of the nation. It has helped the church. Ultimately, therefore, it has helped with the care of children in voluntarily aided and voluntarily controlled schools. These include not only Church of England but Roman Catholic and Jewish schools.

It seems to me that the Bill is attempting to bring about innovations and improvements. I find myself in particular agreement with the middle part of the speech made by the noble Lord, Lord Beaumont of Whitley. He spoke about future experiments and innovations. May I give one illustration. In the last two years a group called Springs, which is concerned with Christian dance in worship, has been going round the schools. We have had to support it voluntarily. They will be touring our schools in the next few weeks. They are proving to be a most exciting new concept in education. The children are deeply involved. We find that the teaching of Christian dance in worship brings a new dimension to assemblies. Often they can be dull but they can be improved immensely. It seems to me that in such areas as this the Bill will be able to encourage experiments.

Again may I refer to what the noble Lord, Lord Beaumont of Whitley, said about pilot experiments. Our own board of education has considered the matter carefully because of the close association between church and state in education. I have given notice to the noble Earl of a question which I should like to share with your Lordships. Clause 2(1) on page 2 of the Bill reads: The aggregate amount of the expenditure of local education authorities in England and Wales approved for any financial year by 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". This subsection has been mentioned two or three times during the debate. The Bill states that only 0.5 per cent. of the expenditure approved for a given year by the Secretary of State shall be used for the prescribed expenditure, which is then described in outline in the Bill. Since this figure has been included in the Bill rather than in any regulations which may be made, might we be informed whether this is an indication of reassurance to local education authorities that the Bill is not the thin end of the wedge of more central control of finance? The answer to this question would be of help not just to our board and to the church, with its widespread engagement in education, but to many others. Perhaps we might have an assurance on that specific point from the Minister.

5.45 p.m.

Lord Kilmarnock

My Lords, it is abundantly clear what the purpose of the Bill is and the means set out to achieve it. It is also clear from what my noble friend Lord Beaumont of Whitley has said that it is hard to disagree with the purposes for which the proposed grants might, in the Secretary of State's view, be used. They include such unexceptionable projects as innovations and improvements in the curriculum; pilot schemes in developing records of achievement; the implementation of the recommendations of the Cockcroft report; desirable development in the management of the teacher force (I am not quite sure what that means; those are the Secretary of State's words, but it sounds a good thing); the support of special educational needs, including the provision of micro-electronic aids for handicapped children; and the encouragement of developments in information technology within non-advanced further education.

So far, so good, though the noble Lord, Lord Stewart of Fulham, suggested that this shopping list is too long and is growing all the time. But the rest is not so good. Quite simply, the money to be provided is not new money, as the majority of speakers so far have pointed out. I do not want to be repetitive, but it cannot be over-emphasised that the bone of contention in this Bill is the principle of additionality. Some local authorities, I understand, are refusing to talk about the possible uses that grants might be put to, as long as the Government insist that they will result in a compensating reduction in the rate support grant rather than making these grants additional.

To get their money back, local education authorities will have to put up at least 30 per cent. of the expenditure, reducing the sum proposed to approximately £30 million when the scheme is fully in operation. One would have thought that this was small enough for the Secretary of State to have made it truly additional and thus rebuild his bridges and re-establish trust between the Secretary of State and the local authorities. But this is not to be. The Secretary of State will in effect claw back 0.25 per cent. of education money and reallocte it to schemes of his own choosing.

In recommending the Bill at Second Reading in another place the Secretary of State used—rather disingenuously, I thought—the phrase "expenditure at the margin" on a number of occasions. The local education authorities were to be encouraged, he said, to redeploy their expenditure at the margin in accordance with objectives of particular national importance". He said that on more than one occasion. But how big is a margin? What is marginal when you are stretched to the limit to fulfil your obligations under the 1944 Act? The fact of the matter, as the Secretary of State said, is that, the total amount of education support grants will be deducted from the total of aggregate Exchequer grant, along with other specified grants, before the balance is distributed as rate support grant". What could be plainer than that? It is simply a system of earmarking, by which some authorities will do better than others but from which, in aggregate, the education service will gain nothing in financial terms. Also, as my noble kinsman Lord Ridley said, it is a step back from the principle of local autonomy.

What is the background to all this and what is the point of this relatively minor re-jigging of the education budget? As we all know, local authority grants have, with rare exceptions in recent times, not been earmarked (this applies both to education and to the social services) so that central Government have never had any real control over where and how they might be spent. This is one of the reasons why the Government have pumped so much money into the Manpower Services Commission, because it can be earmarked by that route.

It was a Conservative Member in another place, whom of course I paraphrase, who put his finger on it when he pointed out that the Government had to introduce the technical education initiative, referred to by the noble Baroness, Lady Cox, using Manpower Services Commission funds. He went on to suggest that it was ridiculous that the DES and the local education authorities had the schools but only the MSC had the money. There is certainly an anomaly here.

We in our party have proposed a new department of education and training to bring all these interests together into a harmonious and co-ordinated whole. I seem to remember that the noble Lord, Lord Vaizey, on the Conservative Benches had a similar idea. This Bill does absolutely nothing towards ending the present dichotomy. It will simply move a little money from the LEAs to the DES, which will then decide how it is to be redistributed.

We do not consider this to be very satisfactory. As I said at the outset of my remarks, we do not disagree with the Secretary of State's objectives but we see little merit in his method of achieving them. We feel that the money should be genuinely additional. In this way, the Secretary of State would be inviting the LEAs into a genuine partnership in the pursuit of new ideas and new initiatives. If the Secretary of State does not want to go that far—if he is too timid, or too inhibited, or too in awe of the Chancellor of the Exchequer—then we shall have to do what we can to help him at Committee stage with some modest improvements to his Bill.

I shall not go into detail on Second Reading but we may want to suggest to him, for instance, that expenditure incurred by local authorities providing education support grants shall be disregarded for the purpose of calculating rate support grant. We may also suggest specific targets for his earmarking, such as remedial education, nursery schools—to which the noble Lord, Lord Stewart of Fulham, referred—or education maintenance allowances. But the Secretary of State will know that none of these initiatives or any that he himself may prefer—will have much effect unless he fights his corner and gets a little more money out of his colleagues for those purposes. It will be the purpose of our amendments to help him do precisely that.

We were impressed—as my noble friend Lord Beaumont of Whitley said—by the Secretary of State's ability to see the light, but I would remind both him and the noble Earl of Professor Pigou's famous dictum in another context in the economic field: It is the promise of fruit and not light that chiefly merits our regard". My noble friend Lord Beaumont of Whitley spoke of the fruit, but Sir Keith's fruit will not flourish without a little more irrigation. One needs not only light but also water if one wants fruit to grow. Perhaps I may suggest to the noble Lord, Lord Stewart of Fulham, without having previously consulted my noble friend, that this is possibly the explanation for the schizophrenia of the guru to which my noble friend Lord Beaumont of Whitley referred.

We want to be constructive. Whether the money is additional or not—and we should much prefer it to be so—if the Secretary of State is going to set priorities and earmark funds, he should do so on the basis of consultation wider than that which he appears to be contemplating at the moment. We would suggest, for example—and we might suggest this in an amendment—that a revised Central Advisory Council, with employers and parents represented, would give a greater consensus than just making it up as the Secretary of State goes along. The noble Baroness, Lady David, was speaking somewhat along those lines when she talked about a possible joint committee, with representation from LEAs and teachers—although I should like to suggest to her that such representation should be slightly wider. Perhaps we might talk about that before we reach Committee stage to see whether we can reach an agreed formula.

The noble Lord, Lord Stewart of Fulham, was unhappy with the hasty and constantly expanding shopping list, and certainly it seems to me that some forum is required in which the priorities can be sorted out. I do not wish to say any more. I have said quite enough to show that we want to be constructive and to try to improve the Bill at Committee stage. We shall certainly come forward with amendments to that effect.

5.54 p.m.

Baroness Lockwood

My Lords, I am sure that the noble Earl will feel we have had a very interesting debate on the basis of his introduction of the Bill. Most of the speakers who have taken part in this debate have not objected in any way to the idea of encouraging innovation in education; but the majority have objected to the way in which the Secretary of State is suggesting that it should be done.

It seems to me that in its present state the Bill is unfortunate. It is unfortunate that at a time when there is so much interest and discussion about the future course of education—discussion initiated to a very large extent by the Secretary of State himself as to how education can be made more relevant to the needs of the country and more rewarding to the present generation of young people—we are here concerned with what is in essence an irrelevant little Bill about a redistribution of finance.

There are three aspects directly involved in the Bill. The first involves initiatives, experiments or pilot projects in education. The second is the funding of such initiatives. The third is the way in which Parliament gives its approval. Something has been said about all those aspects. My noble friend Lady David and the noble Viscount, Lord Ridley, made reference to the views of the local authority associations and the way in which they are concerned about the funding of the initiatives and the powers which will be to some extent taken away from local authorities. My noble friend spoke also about the difficulties inherent in the way in which Parliament will be asked to give approval to the broad areas for the projects.

Underlying those three aspects is the more fundamental problem of the bounds between central and local control of education. It seems to me that in view of the discussion it would have been better if a Bill dealing more specifically with this central problem of the balance between central and local Government—not only in the control and financing of education but also in the development of education—had appeared before us, because this House could then have directed its mind to that fundamental issue. It is an issue that will be with us for a considerable length of time.

It is true to say that of all modern industrial countries Britain is the one with the least central control over its education system. As with most British institutions, this brings advantages and disadvantages. The advantages are that local needs, initiatives, traditions and cultures and individual innovation can bring variety and richness into the system. The disadvantages are—and these were mentioned by my noble friend Lord Stewart of Fulham—that very often the national, industrial and economic needs of the country are not a focal point for the system and can be very easily overlooked in its diversity.

It is interesting that Japan, whose modern education system has been built up to meet the needs of the modern Japanese industrial revolution, is an example par excellence of the highly centralist system. Yet I was reading only recently that the Japanese are now casting covetous eyes over what they regard as Britain's more flexible and innovative system. I believe that there is a problem here which needs to be looked at very carefully—and the Secretary of State also believes that, because he made it quite clear on Second Reading in another place that he considers the balance has swung too far in the direction of local control of education and that national needs should be given more influence. Personally, I do not altogether disagree with his analysis. Certainly I think that there is much to be said, for example, in favour of a core curriculum, a core curriculum that takes account both of the future technological development of industry and services and of the needs of young people as people with a cultural as well as an economic need. But a Bill like this is not the vehicle for such a discussion, and we do need a vehicle for that kind of discussion with the prospect of reaching conclusions that can affect the future pattern of education in this country.

What are we legitimately concerned with in this Bill? We are concerned, of course, with the new initiatives in education, and, as I say, most Members who have spoken, indeed I think all, are in favour of that. In the consultative document many ideas were put forward. Ideas were put forward at Second Reading in another place, and the noble Earl in his introductory remarks talked about the initial candidates and asked that we should put forward further ideas. If I may, I should like to add an idea of my own; that is, breaking down the different traditional curricular patterns of boys and girls and seeking ways to encourage more girls to continue with maths, physics and technical subjects, and to encourage boys to continue with languages. Again I am glad to say that the Secretary of State apparently shares my view, although whether that is to the extent of my suggestion being included in his final list of chosen initiatives remains to be seen.

Perhaps I may appeal to the Minister opposite to draw his right honourable friend's attention to my suggestion. I do this because in his recent North of England speech he enumerated four principles with which the primary and secondary curricula need to accord. The first of these principles was: First, it should be broad for all pupils, both in the development of personal qualities and in the range of knowledge and skills to which pupils are introduced. That means, for example, that every primary school, should be properly introduced to science, and that every secondary pupil shoud not drop subjects in the fourth and fifth years in a way that leaves them insufficiently equipped for subsequent study or training. In my previous reponsibility with the Equal Opportunities Commission I was saying that for 7½ years, and I am glad that it is now beginning to penetrate the corridors of power.

But, of course, with all the suggestions that have been made it seems it has been possible for someone to say that that is already being done. Again I am glad to say that in this particular area, too, there have been innovations which are beginning to show some results, innovations in the sense of experimenting with teaching girls separately for maths and physics. But, when I discussed initiatives with educational bodies on behalf of the EOC, the story was always the same, and it is the same as the story that has been told this afternoon: "Of course, we would like to innovate, and of course we would like to try out pilot schemes, but we do need more funds." It is really that that is the problem; it is resources, not ideas for projects, that form the main stumbling block.

My noble friend Lord Stewart of Fulham has said some very interesting things about the list of projects which the Government themselves have initiated. For instance, he made reference to the fact that we started with the consultative document, and some of the ideas from the consultative document appear to have been tossed on one side and we now have another list, a list which, I repeat, the noble Earl referred to as a preliminary list. So that means that there is not, as my noble friend said, a perceived national list of ideas at the present time. There are some vague ideas and there are going to be consultations about those ideas. I should like to say that on all the ideas that have been put forward in the original list there are already pilot projects or some activities already under way.

So what is different about the purpose behind this new Bill? If we are not concerned with new initiatives, why should we be concerned with taking money away from local authorities when they are already involved in innovation? Why should we interfere with their particular priorities in this way?—because the Minister must be aware that even to put forward our initiatives is going to involve the local authority in spending additional resources. If you are preparing a project, then you have to divert to that project manpower resources and physical resources which would be used for other purposes. At the end of the day, under this Bill, the local authority is not going to be sure whether or not its own project is going to be selected for a grant. Therefore, in that sense it will be wasting its resources.

There is another problem. If we are inviting local authorities to put forward their ideas, somebody, of course, will have to sift through those ideas, and that, too, can be an enormous exercise if it is going to be done properly, and that, too, is going to occupy resources. If I may take a parallel, I was recently told that just before Christmas those people who were concerned with sifting the projects for TVEI—that is, the Technical Vocational Educational Initiative—found themselves the recipients of 25 kilos of paper containing projects from 68 education authorities bidding for half a million pounds.

Really, unless there is going to be new money available for specific projects which the Government feel are essential to the national needs and to the future development of education, I do think we have to have another look at this Bill and see if it is necessary for us to go through all the processes that we are, according to the Bill, supposed to be going through in order to divert resources from one local education authority to another. The real thing that worries local education authorities is that there are no criteria by which the priorities will be judged. You might have an inner city area which has very few resources compared with its problems finding itself having to cut down on some of its own educational services in order to meet the demands of the 0.5 per cent. of the grant which the Secretary of State is going to claw back, and against that the money might go to another education authority in a better placed district which will be undertaking initiatives or projects in the same area in which the deprived authority has had to sacrifice its own projects. Therefore, it is redistribution of resources without any real attention to the needs of local authorities.

I should have hoped it would be possible for the Government to take the Bill back and to come to us again with a different kind of Bill which provides for additional resources to meet some of the problems that have been raised in the course of the debate today, but that, I know, is too optimistic a hope. I can only trust that in Committee the Government will be sufficiently receptive to amendments so that before the Bill leaves this House it can at least apply itself more directly to the problem and be more acceptable to the local authorities concerned.

6.11 p. m.

The Earl of Swinton

My Lords, my first and very pleasant task, at the end of what I think everyone will agree has been a most interesting debate, is to congratulate the noble Baroness, Lady Lockwood, on her performance from the Dispatch Box opposite. The noble Baroness, Lady David, was kind enough to congratulate me on starting on my first Bill in this House. I think life is seldom fair. When I look across and see the two charming and eloquent noble Baronesses both speaking against me from the Dispatch Box I think that perhaps I have a very good case to take before the Equal Opportunities Commission—and I think it might well come down on my side. However, it is a pleasure to see the noble Baroness, Lady Lockwood, and I hope she enjoys her work on the other side of the Table.

Before I turn to the specific points raised during the debate I should like to set the Bill in its context. It is an important Bill. It is not a mean or spiteful little Bill, as has been said by one or two noble Lords. It will enable the Secretary of State for Education and Science to direct a limited amount of funds to local education authorities who wish to undertake projects in areas of particular national importance. This should assist in the continuing process of the education service being able to be responsive to changing needs and priorities. But the final decisions about the deployment of expenditure will remain with the local authorities. There is no question of forcing local authorities to incur expenditure in specified areas.

The grants will lead to a change in the distribution of grants to education authorities, but we are talking about a marginal adjustment to the distribution of grant. I think it was the noble Lord, Lord Kilmarnock, who asked what "marginal" meant. To take 1983–84 as an example, if education support grants had been paid in this year to the maximum amount permitted under the Bill, they would have amounted to about £33 million; that is 70 per cent. of one half of 1 per cent. of the Government's plans for local authority expenditure on education. This compares with total Exchequer grant of £11.8 billion, including £8.7 billion in block grant and nearly £2.4 billion in specific and supplementary grants. Education support grants would have shifted, as I have just said, £33 million at most from the block grant to the total of specific grants. I am sure that even the noble Lord, Lord Kilmarnock, will agree that this must be a marginal adjustment to the distribution of the overall amount of grant available to local authorities.

Very nearly all noble Lords who have spoken did so without enormous enthusiasm for the Bill. Here I think I disagree with the noble Baroness, Lady Lockwood, in that I thought that nevertheless everyone, with perhaps the exception of the noble Lord, Lord Stewart of Fulham, who did not seem to have anything to say in favour of the Bill, thought that basically the Bill was quite a good idea but it all came down to where the money was coming from. That is the message that certainly came across to me—that is a question of resources and where the money is to come from. I believe it was my noble friend Lord Ridley who said that it would be right if the Government used their own resources. The noble Lord, Lord Kilmarnock, spoke about enabling the Government to have a chance to get their money back—in other words, a clawback. I must make it absolutely plain that the money we are talking about is not local authority money or the Government's money. It is the taxpayers' money. It is money which at the moment the Government are giving in the form of rate support grant. It is Government money and it is not taking anything away from the local authorities. It may be changing the way in which they can spend it but it is their money, and their money first and foremost.

My noble friend Lady Cox highlighted this. She said it is a question of presentation and if the Government had presented it somewhat differently and perhaps less honestly there might not have been the enormous fuss that there is at the moment.

Much was made about expenditure generally on education. Again, I should like to agree with my noble friend Lady Cox that expenditure on schools by local education authorities has fallen much less rapidly since 1978–79 than the decline in pupil numbers. In fact, figures published by the Chartered Institute of Public Finance and Accountancy show that in real terms spending per primary pupil has risen by 10 per cent. over the past five years and per secondary pupil by 5 per cent. Both the pupil-teacher ratio in schools and real expenditure per pupil is now at a more favourable level than they have ever been previously. Against that background I honestly do not believe that education authorities need experience great difficulty in managing the comparatively modest redeployment of their budgets implied by the grant proposals in the Bill.

I should remind the House that the Government hope to pay the first grants in 1985–86. The Government's plans for expenditure by local authorities in that year will be set out in the public expenditure White Paper which will be published in a few weeks' time. The decision about the proportion of that expenditure to be met by aggregate Exchequer grant will not be made until next autumn. The Government's decisions about overall provision for expenditure and grant will reflect their judgment on the need for continuing restraint in public expenditure and the implication of the Government' spolicies for education and other services. As I said in my opening speech, the grants are not in themselves intended to lead to increased overall levels of expenditure. Their purpose is to encourage redeployment.

A number of questions were asked during the debate and I shall do my best to answer them. If I miss any, I apologise. The noble Baroness, Lady David, asked a number of questions, the first of which was also asked by the noble Lord, Lord Taylor of Blackburn. That related to the administration of education support grants. I shall not attempt to anticipate the details of administration today but I can assure the House that I have noted the concerns expressed and will draw them to the attention of the Secretary of State. Administrative matters will be dealt with in the regulations or in the circular. Clearly it will be essential to discuss the details with local authority associations before reaching a final view about how the grants are to be administered. The aim must be the minimum of bureaucracy consistent with the effective use of the grants.

The noble Baroness also asked how long the grants will run. The Government do not envisage that grants for individual projects would run for longer than five years. Support for longer periods would be incompatible with the broad purpose of the grants of encouraging redeployment or innovation by priming the pump. Moreover, long running projects would tend to eat up most of the limited amount available for grants and reduce the scope for new developments. Within this five-year limit the length of time for which grant is paid on approved expenditure will probably depend on the nature of the project concerned. Some projects might require an investment of grant for several years if they are to be worthwhile. Others—for example, one-off purchases—might involve grant for one year only.

The noble Baroness also asked about the timetable. I am sure that noble Lords will appreciate that at present it is not possible to give a firm timetable for the introduction of grants. This will depend in part on the progress of the Bill. Ideally, we shall want to give local authorities the earliest possible notice of which activities will attract grants. The timing will depend on when regulations are made but we hope that letters inviting bids will be issued before the end of July 1984, the aim being that decisions are taken about the bids to be supported prior to the RSG settlement in November or December. The timetable I mentioned as a possibility is provisional and clearly we shall want to discuss it in due course with local authority associations.

I should expect, nevertheless, that individual local authorities would want to know as early as possible whether they should plan to receive education support grants in the coming financial year. The clear impression we have gained so far from the associations is that it would be helpful to know which bids have been accepted prior to the settling of budgets. My understanding is that local authorities begin their budgeting well in advance of the start of the financial year on the basis of an annual cycle. The possibility of education support grants is something which they will no doubt need to consider at appropriate stages in the cycle. In recent years the Government have given local authorities provisional guidance about the rate support grant settlement in the previous summer. If that practice continues, it would help authorities in deciding whether or not to bid for ESGs.

The noble Baroness also asked me about the evaluation of projects, and I am sure that the evaluation of projects supported by education grants will be very important. As the list of possible activities is made firm in consultation, we shall want to consider how evaluation can best be carried out in each case. The pilot project, which it is hoped will lead to the building up of experience in good practice, will probably be the writing up of a report in a form which could be given wide dissemination. For other activities it may well be appropriate for a research team to be provided with funds in order to evaluate the experience gained. Consultation with the local authority associations will clearly be important. The details will need to be settled for each context separately but the potential value of thorough he valuations of projects seems clear.

The noble Baroness referred to the minimum rate of grant. The Bill provides no lower limit on the rate of grant; but it may help noble Lords if I say that it is most unlikely that in any case the rate would be set below50 per cent.; so in practice the range is likely to lie within the range of from 50 to 70 per cent. of expenditure. The rate for each activity will be specified in the regulations.

The noble Baroness also asked me about consultations. I can assure noble Lords that consultations with the local authority associations will be genuine and thorough. My right honourable friend has repeatedly made clear his wish to consult fully. Indeed, he has already had three meetings with the associations and looks forward to further meetings once the Bill has—as I hope it will—received Royal Assent. I think that has dealt with most of the questions which the noble Baroness has asked. If I have missed any, I apologise; there was quite a list of them.

The noble Lord, Lord Graham, drew our attention to criticisms in the HMI report which was published in July 1983 concerning the effect of local authorities' expenditure policies in the education services. The main messages of the 1983 report were that overall provision for education had not deteriorated since 1981, and that most aspects of education in schools and colleges are satisfactorily provided for. Her Majesty's inspectors did identify certain deficiencies in some areas and in some institutions, especially with regard to the use made of available resources. The report also made it clear however that there is no simple relationship between expenditure on the one hand, and the quality of education offered and the achievement of pupils on the other. The ability and education of teachers is a crucial factor.

The noble Lord, Lord Graham, also asked whether the Open University could bid for educational support grants. These grants were concerned with expenditure by local authorities. It would be wrong to take grants away from local authorities and give them to other bodies, no matter how deserving. Other mechanics exist to provide funds for other bodies. In the case of the Open University, the department makes a grant towards the University's costs.

The noble Lord, Lord Prys-Davies, mentioned arrangements in Wales, and how funds could be used towards buying Welsh textbooks, and so on. The Secretary of State for Wales will carry responsibility for the implementation of the education support grant scheme in Wales. The grants will be issued by the Welsh Office, and there will be separate consultations with the local education authority representative body in Wales on the activities to be selected with funding.

This reflects a separate responsibility already exercised by the Secretary of State for Wales for the greater part of the education service in Wales. The activities selected for funding in Wales will be expected to parallel those in England. because in the main the broad aims and objectives of the education service are very similiar, but they will not necessarily always be identical.

The Bill makes it possible for the grants to be operated to take account of differences between the two countries which may arise from differences of emphasis and the way education has been provided, or from the outcome of separate consultations with the local education authority representative bodies. Final decisions about the activities to be supported in Wales will be taken by the Secretary of State for Wales taking into account all the relative factors which apply there.

The grant used for the Welsh language is already covered by the Welsh language education grants introduced under the 1980 Education Act. We envisage that support for the Welsh language in education will continue to be channelled in this way, although it would be possible, if it were considered necessary, for ESG to be applied to Welsh language projects.

I think the noble Lord, Lord Stewart of Fulham, asked me a question as to whether the education support grants will be used to re-establish grammar schools. It is not the Government's intention that education support grants would be used to establish grammar schools. This was made clear in a debate in another place.

I have described briefly the activities which have been suggested by the Secretary of State as possible candidates for the support, and the establishment of grammar schools is not among those activities. That is not to say, of course, that an authority could not apply for grant to support expenditure on a specified activity in both selective and non-selective schools. The authority would be free to make such an application which would be judged on its merits alongside all the others.

The right reverend Prelate the Bishop of Norwich asked me about safeguards in the Bill. I should just like to reiterate the point that the Bill includes a number of checks and safeguards. First, the total amount of grant which may be approved for grant purposes is limited to one half of 1 per cent. of the Government's plans for local authority expenditure on education, and should any Government want to increase this it would need primary legislation so to do.

Secondly, the purposes to which the grants can be put will be defined in regulations, and these will be subject to affirmative resolution both here and in another place. I notice that the noble Baroness, Lady David, did not think much of those safeguards, but I think, quite honestly, they are the best we can do.

Thirdly, the Bill requires the Secretary of State to consult with appropriate local authority associations before drafting the regulations. Much has been said about the view of local authorities on this Bill. I appreciate the concern which has been expressed today on behalf of local authorities. Indeed, as the noble Baroness, Lady David, said in her opening speech, I was for some time a member of one.

The Government considered carefully the views expressed by the local authority associations before the Bill was introduced, and the provisions of the Bill take their views into account in a number of ways: for example, upper limits of half a per cent. and statutory need for consultation. Clearly the co-operation and participation of local education authorities will be vital to the effective use of education support grants.

I believe that when the various schemes get under way to encourage development in important areas, such as records of achievement and the teaching of mathematics, local education authorities will be ready to respond to the Government's initiatives.

I should like to record that not all the voices in local government have opposed the Bill. I think it was the noble Lord, Lord Graham of Edmonton, who asked if I could produce anybody in support. For example, could I cite my honourable friend, Mrs. Rumbold, a former chairman of the AMA education committee who has expressed her firm support for this proposal? Then there is the chief executive of an outer London borough who recently wrote a very positive column about it in the Local Government Chronicle.

Lord Graham of Edmonton

She would, would she not?

The Earl of Swinton

You asked for it! This Bill should not be taken to imply a desire to impose central Government's views on local government; that is not its purpose. It really is not some vehicle for my right honourable friend to achieve that.

May I say in passing how grateful I was to the noble Lord, Lord Beaumont of Whitley, for the very kind tributes he paid to my right honourable friend in the job that he is doing? They are very, much appreciated and I am sure my right honourable friend will be delighted to read those tributes in Hansard.

This is certainly not some strange scheme whereby my right honourable friend can start doing all sorts of odd things off his own bat as he wishes to do them. That is certainly not the purpose. As the noble Baroness, Lady Lockwood, said, many of the most important developments in the education service have originated in the policy of enlightened and imaginative LEAs. I am sure that this will continue to be the case. These are just the policies we are hoping to encourage by this Bill.

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, or the Cockcroft Committee's report on maths. The purpose of the present Bill is to give financial encouragement to the implementation of important new policies and developments whatever their "oranges"—origins. My Lords, I think it is time I stopped. When one starts saying "oranges" instead of "origins", it is time to stop altogether. I have great pleasure in commending the Bill.

On Question, Bill read a second time, and committed to a Committee of the Whole House.