Education Reform Bill

HL Deb 10 May 1988 vol 496 cc1048-116

House again in Committee.

Clause 25 [Schemes for financing county and voluntary schools]:

Baroness David moved Amendment No. 178B: Page 21, line 32, at beginning insert ("Subject to subsection (3)(b) below,").

The noble Baroness said: In moving Amendment No. 178B I shall also be speaking to Amendment No. 179B. We are now moving to a different stage of the Bill. I wish to make quite clear, in talking about local finance management or local management of schools—LFM or LMS—we are not opposing the principle; in fact, we are very sympathetic towards it. However, we are worried about it being brought in compulsorily and too quickly. The aim of the amendment is to make it voluntary, starting when schools and the governing bodies are ready. As the Bill stands it is to be compulsory from a certain date. That is what we do not like.

The generally accepted principle is that schools should be given greater flexibility as to the most effective use of resources; that we agree with. The proposals of the Government in the Bill, at Part I Chapter III, go much further than introducing local financial management. One of the first books to be written about local financial management, entitled Local Financial Management in School and edited by Peter Downes, was published in April this year. It states that the Government's proposals go considerably beyond LFM, for example in connection with the appointment of teaching staff. The staffing aspects of this chapter were not contained within the Conservative Party manifesto and are not necessary for financial delegation. This point was picked up by many of those who responded to the Government's consultation papers. For example, the division for education and youth of the Methodist Church asked for withdrawal of the staffing aspects which, are not a consequence of financial delegation and will limit the powers of LEAs". This aspect of the Bill seems to be designed to weaken the strength of national and local agreements on pay and conditions for non-teaching staff. We feel very strongly about this matter. It is not acceptable.

To go back a little in history, the principle of local financial management has been developed over a period of 30 years. There are complex schemes in existence today, though some are still limited in scope. In my own county of Cambridgeshire, and in Cheshire, Solihull and ILEA, it is thought that over 20 LEAs have pilot schemes in operation though no LEA has a scheme that covers schools throughout its area that can match the scheme that the Government are proposing in the Education Reform Bill.

It took Cambridgeshire 10 years, from 1977 to 1987, for all its secondary schools to be included in the scheme of LFM. I checked this by telephoning our chief education officer at the weekend: he told me that this is so. It was 1977 when the first pilot scheme was suggested. I have been involved with a governing body of a sixth-form college where the whole process was going through. It is a process that takes time.

Only 10 primary schools out of 300 operate the scheme. Part of the success of Cambridgeshire was that the original schools had volunteered for local financial management and the LEA officers had time to devote to the schools, the training of the heads and other staff. It should be borne in mind that present schemes only go as far as financial decision-making. The Government propose to include staffing matters and at the same time responsibility for delivering the national curriculum. It is a very big leap for all those involved to go from the present to a position where the governors, heads and school staffs have to take a view on the relationship between the finance available and the overall curriculum offer.

Even with the present schemes, the LEAs retain control over the level of staffing to ensure that schools provide a broad and balanced curriculum. This will not be the case in the future. The only power an LEA has to ensure that a curriculum will be provided is to suspend in its entirety the scheme for local financial management for that school. Later there will be amendments in my name and in the name of the noble Baroness, Lady Seear, which seek to make it possible to withdraw partially but not wholly. This concern was repeated many times in the responses received. For example, the National Union of Teachers said that, the Union supports the principle of a degree of financial delegation to schools but believes the current proposals go too far too quickly with as yet insufficient knowledge derived from existing experimental schemes. The Union is deeply concerned that financial delegation on this scale will lead to a diversion of the heads professional skills and a change in the whole nature of leadership in schools".

There are advantages, and we do not for one moment wish to lessen them. There is greater flexibility in schools; there is greater confidence and understanding. Knowing the financial cost of activities undertaken in the school can lead to a greater awareness and understanding of what is going on, especially when decisions have to be made on priorities. There is greater participation and governors are brought more into management by LFM. Providing more information to staff can enhance teamwork. As regards greater economy, there is an incentive to make possible savings on items such as postage, telephone calls, fuel and so on, especially when it is known that any savings could be used by the school.

There are also disadvantages. Some most certainly occur when the scheme of LFM is adopted. They are principally of a structural nature and cannot be limited if a scheme of LFM is introduced. The LEAs will have a decreased role because they will lose their day-to-day involvement with individual school administration. They will also lose responsibility for overall curriculum development and management resources. It has been suggested that this could be an advantage as it will enable the LEAs to concentrate upon strategic issues.

Judging from the letters I have received I believe a great worry is the changing role of the head teacher. A great many head teachers simply do not want to have this responsibility. It seems a little hard that if they do not want responsibility it should be foisted upon them. They are afraid that they will be distracted from teaching and from staff development and that they will have to develop skills in management and accountancy.

The teaching staff may be pressurised to find economies and they may have an increased workload, which is different from what they expected. There may be a disincentive for schools to employ staff near the top of the main professional grade because of the greater cost. The LEAs might be tempted to employ cheaper teachers so that they have more money for other projects. Again, some of the staff do not want that.

As regards non-teaching staff, there will be more work for them within the school because, even if there is a full-time person appointed—possibly a bursar—there are still many additional tasks to be done in connection with pupil welfare, correspondence and so on. There is also the need for training; as there will be for heads and for governors.

Much greater commitment will be required. I have had a vast number of letters from governors, as I am sure other members of the Committee have. They do not want this responsibility. They became governors to deal with education matters and now find that they may be involved in management finance. Some feel that they are not qualified to do that, but still have an interest in the school and want to maintain that same interest.

Our amendments do not seek to get rid of the local financial management scheme. However, we do not want it to be forced on to schools. We want them to have plenty of time to think about it. Let them apply when they themselves feel that they are ready for it. If they do not want it, why should they have to have it? I beg to move.

Lord Trafford

I listened with great interest to the speech of the noble Baroness and I sympathise with a good deal of it. She outlined some of the problems with which anybody taking over the management of what is a significant financial and administrative undertaking will be confronted. In addition the directly educational teaching duties of such a person will be quite a burden. However, I feel stongly that financial delegation in most public sector areas, including education, is beneficial. I say that for a number of reasons. First and foremost, for those who have worked at the other end of the telescope, so to speak, in this field, it is extremely welcome to see those acting directly at the point of what might be called delivery—in this case, it is schools—having a control over their own budgets.

The noble Baroness very fairly mentioned some of the advantages, but there will also be some disadvantages. Overall the delegation to the most local level where education is delivered is extremely advantageous, especially in terms of creating the team spirit of that school. It has been beneficial in the health service where cost centres have been introduced in some areas. It has been beneficial in some universities, as the noble Baroness and others on the Benches opposite will be aware. It has also been introduced in part following the Jarratt Report. There have been definite pluses. However, no system is perfect, and there have been a few minuses.

The noble Baroness pointed out that some headmasters might not wish to undertake this responsibility or might find that alongside education and finance the burden was too great. I would be sorry if most headmasters did not take the opportunity. They would have support and the ability to acquire support within the environment, an essential factor in the delegation of financial responsibility.

The noble Baroness also said that staff might be employed at the lower scale as a cost saving exercise. The finance officer of an undertaking will always be looking for savings and will always be suggesting that people could be employed at a lower cost. However, if a headmaster is any good at all, he will be significantly concerned with the quality of his school. If he employs people for financial reasons only, his school will not show up very well as a education institution. This aspect depends on the type of headmaster. One may find headmasters who are brilliant educationalists and teachers, and they are much to be encouraged. Through this system they would need specific support in terms of financial delegation. Equally, if headmasters are brilliant financiers and administrators they might look for even more qualified deputy headmasters for teaching or in whatever area they felt themselves deficient. Above all, it would give them freedom to act at this level. For this reason more than any other, I feel strongly in favour of the form of financial delegation outlined in the Bill.

8.45 p.m.

Baroness Blackstone

I should like once again to refer to the fact that the noble Lord, Lord Trafford, used the term "headmasters". Perhaps I shall offer to put on a short course in non-sexist terminology. I shall make a very small charge for noble Lords to come on that course. Perhaps we will then avoid my having to make this speech every time I rise to speak.

The difference between us in relation to this amendment is not that those on this side of the Committee oppose local financial management. I very much agree with what has just been said about many of its advantages. What is important is how we implement it.

As members of the Committee will be aware, at present at least—and it is proposed that this should continue—governing bodies are made up of unpaid volunteers. Governors give valuable public service to education and do so in their own time. A great many of them are themselves parents. Anyone who has brought up a family and at the same time has had a job will recognise that increasing numbers of families have both parents working. To insist that these volunteers take on major financial responsibilities when they do not want to do so will lead to some of them resigning and to others not putting forward their names. There is a danger that we shall lose a great many talented and able people who want to give service to our education system but consider that they do not have enough time or expertise to take on these very much more onerous unpaid responsibilities. If that is the case, as I believe it is, they will be lost to the system, which would be sad.

It is not the principle of financial delegation that is at issue. That is to be welcomed, and I do not want to go through the advantages. Those have already been discussed. Indeed, in the longer term one hopes that nearly all schools will be willing to take on a number of additional delegated powers or functions, although, as my noble friend Lady David pointed out, later amendments will seek to qualify the extent of delegation in some areas. In starting a new scheme of this kind we should all benefit from a rather more gradualist approach. Headmasters and governors without training—they cannot all be trained at once; and it is unrealistic to imagine that that can happen—and without much experience of financial management may wish to have time to observe the schemes working elsewhere.

Cambridgeshire, which has led the way recently with a local financial management scheme, did not try to impose it on all of its schools but introduced it on a rather more limited basis, using a voluntary system and leaving it to schools to decide whether or not to opt in. In trying to impose it universally—with talk about September 1989 as the starting date, although perhaps the noble Baroness will reveal exactly when it will be implemented—and in trying to apply it right across the country the Government appear to be moving with unseemly haste.

Like many other parts of the Bill, this is a new and untried system. I wonder whether a little Fabian gradualism would not go a long way in this respect. Let us start by encouraging as many schools as possible to participate but allow governing bodies to volunteer, rather than frogmarching them into the new arrangements. As in some other parts of the Bill there are considerable costs involved, as the Coopers & Lybrand report clearly set out. It has been suggested that for the scheme to work properly most secondary schools will need bursars in addition to their existing secretaries and clerks. I think that the report is right about that. They will be needed for two reasons. First, they will have to undertake a great deal of additional administrative work; they will need to ensure that proper accounts of expenditure are kept and they will be responsible, with the head teachers, for allocating resources between different parts of the school. In addition to those duties, they will have to provide local education authorities—which are, after all, still going to be responsbile for what happens in the schools—with much extra information on just how they have spent the money that they will have the freedom to allocate.

Secondly, bursars will be needed so as to make it possible for head teachers to continue to undertake their professional educational duties in implementing the new national curriculum and the new assessment scheme; in sorting out in-service training for the teachers on their staff; in dealing with the recruitment and promotion of teachers, and so on.

A voluntary system would allow the introduction of the new category of staff, the school bursar, over a longer period of time and would allow some time in which to build up the numbers of people who would be required to take on such work—people who were able to do the job properly. Can we really expect the scheme to be a success if we force it on the schools, instead of allowing volunteers while the new system is developed? I believe the amendment should help local financial management to work better.

Lord Taylor of Blackburn

I did not intend to speak on the matter but nevertheless I feel that I should. As the originator of the idea of the scheme in the 1970s, and as one of the people who persuaded Cambridgeshire in the early days to carry out the pilot study on the scheme, I am delighted that it should be included in the Bill. I support it completely.

However, one of the things we realised when we were looking at the proposal to bring governors into local finance and give them more responsibility—that is one of the reasons why we suggested it in the report which was published in my name—was that we wanted to implement it gradually and not rush into it. I have spoken to the people in Cambridgeshire—some time ago I attended a meeting at which the Cambridgeshire officers were present—and they again urged us to be most cautious in this and to undertake it gradually.

I know that many teachers are frightened of the unknown and therefore they must be led forward somewhat on this matter. Bearing in mind all the other proposals that are being introduced at the same time, I do not think that it will get off to a fine start. I think this will be one of the most important jobs that governing bodies and teachers can do in controlling their own finances, because I can see the schools deriving a great deal of benefit from it. However, I urge the Government to be most cautious in the implementation of the scheme.

Baroness Blatch

Much has been said about Cambridgeshire, which I found quite interesting as one who was there when the full-blooded pilot scheme was sent on its way. I should like to make some reference back to the fact that it has taken since 1977 for the Cambridgeshire scheme to be refined. I must say to the Committee that those of us who in 1981 had tried a very limited scheme for local financial management became most frustrated. That was not out of our own sense of frustration, but from picking up the sense of frustration of those schools which were operating a very limited scheme. They were asking, "Why is it that we can't have more delegated powers and responsibility for our budgets?"

I must also say that for year after year as a member of an education authority, I was tired of listening to head teachers and teachers who said, "If only we were allowed to make some of the decisions about the allocation of resources and not you at shire hall." Inevitably, at shire hall, at local education authority level, much of what was determined was determined across the board and the sensitivities of each individual school were not always taken into account.

It was from that type of frustration that we took the decision—which I think we are probably on the brink of taking now—which was: you can wait forever, in advance of trying a scheme, for it to be perfect before you try it. It seemed to us that we needed to jump into the deep waters, along with the head teachers, their schools and their staff, and learn how to swim together. Indeed, that is what actually happened.

No one is suggesting that everyone should start from a position of total ignorance. A great deal of expertise has been developed within the country as a whole, not just in Cambridgeshire. Solihull and many other education authorities have tried the scheme and are now operating varying degrees of financial management. So there is a great deal of expertise within local government now. I am sufficiently cynical to believe that, if we do not take the plunge and say that all schools should have the responsibility for their own budgets, a large number of schools simply will not do so. That will come about from a perfectly understandable human trait: the fear of the unknown.

I should like first to recommend to the Committee a very good and readable book about local financial management edited by Peter Downes, the headmaster of a school where I am a governor and where my children were educated. I think the book will throw a great deal of practical light upon the subject. I should like to talk about one person in particular—Robert James, who was the then leader of the council. Despite all one reads about this being a Liberal innovation in Cambridgeshire, it was in fact Robert James and a few of his colleagues who started it.

We started from a recognition that whenever we interviewed someone for a head teacher post in Cambridgeshire one of our standard questions was: "How much does it cost to run your school?" Time and time again—I think I shall probably have to give the Committee a particular example in order to make the point—a teacher applying as a candidate for a head teacher post would say on being asked that question and after having given some thought to it, "Well, I think about £100,000". So I would ask the candidate to think again. In this particular case she became rather embarrassed and said, "Perhaps I have overestimated". I reminded her that there were 750 children in the school and suggested that perhaps she would like to think again. She came up with a figure of just over £100,000. The figure was in fact nearer to a million pounds. The truth of the matter was that she was not thinking about teacher costs and all the costs involved: she was actually thinking about capitation and a few fringe costs of education. It became very clear that there was an enormous lack of real understanding of the cost of education. It was as a result of such experiences that we felt the need to bring teachers to an understanding of the cost of education

However, that is not the only aspect of the matter. I want to talk about the positive side of local financial management. I especially want to mention those people who are now in the scheme and to suggest that perhaps we should return to what some would call the good old days but what I believe they would call the bad old days. They are people who had to be plunged into the deep end before they could come up with this kind of statement. I have here a paper written by David Hill, who was the headmaster of a school which I referred to in my speech on Second Reading. It reads: The scheme has led to greater cost awareness for heads and governors with greater efficiency leading to an improvement in the education of pupils. Schools have transferred funds from premises costs to create additional staffing (both teaching and teacher support) and to spend more on books and equipment. The realisation that a school can spend over £300 a day on heating its building naturally made governors look towards energy conservation schemes".

9 p.m.

Baroness David

Is the noble Baroness speaking to the amendment or talking generally about the whole subject?

Baroness Blatch

I am arguing that we need to get all our schools into the scheme, because people will never get over the fear of the unknown. It is only when schools are in the scheme and are responsible for their budgets that they will realise the positive advantages of the scheme. I am referring to some of those consequences: The governing bodies took on a sense of purpose that had been lacking previously. Governors began to take decisions on improving the curriculum and were able to provide the financial resources required by the changes". As a governor of a school with its own budget I can say genuinely that we talk more about education matters and development and curricular changes now that we have our budget and the power to move resources around than we ever did when shire hall controlled the budget.

The scheme must go ahead. The Government will only allow schools to go ahead when they have submitted schemes that have been approved by the Secretary of State; in other words, when they have demonstrated to the Secretary of State that they have a scheme for allocating resources that is acceptable to the department.

I wish to finish with a statement written by the headmaster of a school in Huntingdon: Lest the message appear to be a confused one, let me conclude by saying that, in spite of the reservations which have surfaced from time to time, I remain totally convinced that Local Financial Management is a most worthwhile development for schools and that, in the not-too-distant future, students of educational history will wonder why we took such a long time to adopt it!".

Lord Taylor of Blackburn

May I mention one matter to the noble Baroness before she sits down? When the scheme was introduced in Cambridgeshire they did not have all the other schemes. There are now about 70 new items for the head teachers and governors to look at. Cambridgeshire was an experimental one-off area. One scheme only was going on at that time. All the other new proposals are an aggravation. That is why we are asking for the scheme to be introduced gradually.

Baroness Blatch

My only reply to that point is that I believe that the freedom to adapt individual schools to the national curriculum will be greatly enhanced by their having power over their own budgets.

The Minister of State for Defence Procurement (Lord Trefgarne)

Rising to reply to the amendment, I should explain that I am here in place of my noble friend Lord Arran who, unfortunately, like a number of Members of the Committee, has been laid low, as I was over the weekend.

I shall start by describing the broad aims underlying financial delegation. I am confident that if I do that the Committee will feel able to support them, These aims are, first, to reduce—

Baroness Seear

We do not quarrel with the idea of financial management but with the speed of introduction. I am only trying to save time.

Lord Trefgarne

I too am trying to save time. I assure the noble Baroness that I shall not detain her for a moment longer than is necessary. There are four broad aims underlying financial delegation. The first is to reduce unnecessary bureaucracy; secondly, to give governors and heads the powers to match their responsibilities; thirdly, to enable schools to target the available resources to meet the needs and priorities of the pupils in the schools; in other words, to make schools more responsive to local needs; and, finally and most important of all, to encourage the efficient and effective management and deployment of resources since better management means better education.

As has already been said, the idea of financial delegation is not new. It has been in place in a number of ways and in a number of places for some time. The Bill sets out the broad framework for financial delegation to schools. My right honourable friend the Secretary of State has recently issued a consultation document which takes the form of a draft circular which sets out in greater detail how those broad principles might be put into practice. Copies of the draft circular are available in the Library of this Chamber and in the Printed Paper Office. I hope that Members of the Committee have found time to read that useful document. I believe they will have found that the document offered reassurance on some of the aspects of delegation which have caused concern and which have been referred to tonight, as well as offering a wealth of helpful guidance.

I shall now turn to the amendments that we are considering. They are essentially intended to allow schools to opt in or out of managing their own budgets under delegation. We shall reach similar amendments later. I am sure that everyone is in favour of local choice, and the keynotes of financial delegation are flexibility and local accountability. We are therefore looking to local education authorities to devise their own schemes of delegation, in consultation with their schools, for approval by the Secretary of State.

If the delegation requirement were optional, LEAs would not be able to develop a coherent scheme; they would not be able effectively to plan such vital matters as training programmes and the installation of information systems. If some schools were subject to delegation and others of the same size were not, the LEA would have to run a complex system of dual administration. That could prejudice the success of delegation in the schools which had delegated budgets, and could undermine the stable regime which both LEAs and schools will need, especially in the initial period of the scheme.

I recognise that at first sight it may appear reasonable to look to the governing body in the individual school to decide whether it wishes to manage its own budget. In practice, however, the governors are likely to be faced, first, with the new responsibilities which delegation will involve, and which may appear daunting, and only subsequently will they experience the benefits of delegation as they exercise their new-found freedom to direct resources to meet the school's actual needs. Those considerations apply just as much to proposals that schools should be able to opt out of delegation in Amendment No. 182B, which comes later, as to those presently under consideration.

To give governing bodies the right to opt out of delegation would run the risk of depriving those schools of the opportunity to discover for themselves the benefits which it brings. It would also open up the possibility of an LEA that was resistant to the principle of delegation putting pressure on governors to opt out. That cannot be right. It could seriously jeopardise the aims of this section of the Bill.

As the draft guidance on financial delegation makes clear, LEAs will be expected to monitor their schemes and provide advice and support to schools. That should provide the best guarantee that delegation will be introduced coherently and effectively in a way sensitive to local needs. The amendment is a recipe for confusion, and I hope it will not be pressed.

Baroness Lockwood

The Minister has given us a very fine treatise on what undertaking financial delegation could imply. But I do not think he has his feet on the ground; he is not aware of some of the problems that are likely to occur in cities like Bradford, for instance, a city which has difficulty in recruiting enough people to act as governors of schools in the first place. If there is difficulty in recruiting an adequate number of governors, the responsibilities that the Minister has outlined which will be imposed upon governors in a short period of time are not likely to encourage people to come forward.

It is not a question of governors wanting to undertake these responsibilities but of finding governors who have the time to carry out the obligations of their position under the present system. I do not think that the noble Lord is aware of some of the problems which a city like Bradford would have to face. The governors would have to be trained not only to deal with the financial obligations of delegation but they would also have to be trained to deal with some of the very difficult problems that arise in a multi-racial community. To expect schools and local authorities to be able to move into such a situation in a short period of time is unrealistic.

Lord Trefgarne

Perhaps I may reply to the noble Baroness in two ways. First, some of the specific problems to which she refers are addressed by amendments which we shall be considering later during the course of the Bill. I understand that some governors will face the future under these new arrangements with trepidation but I believe that the great majority will think that the future will be better and that their job will be much more satisfying given the new proposals contained in the Bill. I believe also that those who may be facing the future with trepidation will find that when the new system is in place their job is altogether more worth while.

Baroness Seear

I do not know whether the noble Lord is right. Will he tell us what his belief is based on? It is good to know that he has such faith, but it would be nice to have it backed up by facts.

Lord Trefgarne

The answer to that question is simple, if I may so to the noble Baroness. It is surely beyond peradventure the case that people given much greater freedom, flexibility and responsibility in doing their job will find that job more satisfying.

Lord Taylor of Blackburn

I support the Minister on this. More people will volunteer to be governors if they find that they have more responsibility and a better job to do than in the past. I support the Government all the way on that. It will encourage people to come forward. There is nothing worse than being a governor at present when at a governors' meeting the only matters for discussion are the minutes of the last meeting, the headmaster's report and the date of the next meeting. It is difficult to get people to be that sort of governor. That is what has been happening in certain schools up and down the country over the past 20 or 30 years.

Things are changing. By giving governors responsibility for finance we are encouraging people to come forward and to feel that they are doing a worthwhile job. However that does not mean that authorities which have problems, like Bradford and others up and down the country, should not be looked at with special care and consideration. That is what we are asking for—for the changes to be deferred or phased in in certain authorities. In the long run I believe that the majority of people will accept the responsibilities of being governors because they have a more worthwhile job to do.

Baroness Blackstone

The Minister referred to governors doing a job. Does he not accept that many governors, as I said before, will be parents? They have other jobs to do besides being governors and as well as bringing up their children. To ask them to take on all these extra responsibilities if they do not wish to take them on and if they feel trepidation about them, and even to insist that they take them on, will be likely to destroy the Government's proposals.

In putting forward this amendment we are trying to be helpful. We think that local financial management has many advantages, but if it is implemented in this way, by asking people who have many other duties in their lives to take on this over and above all the other matters when they do not want to do it means that the entire scheme will be jeopardised.

Baroness Young

What the noble Lord, Lord Taylor of Blackburn, said about governors was important. We shall come to his amendment, with which I have very considerable sympathy. However what is important about the change in the Bill concerns the work of school governors. Like the noble Lord, I have served on a good many maintained school governing bodies and I must confess that it was not the most exciting of tasks. Suddenly there is an opportunity for real responsibility.

I take the point of the noble Baroness, Lady Blackstone, because I think this provision could cause difficulties for some parents, although I am bound to say from my experience of life that if one wants something done there is no point in asking anyone other than a very busy person to do it, because he is usually the most effective person.

I think that the subsequent amendments concerning the training of governors are extremely important because I do think that there is a very great measure of a fear of the unknown, as my noble friend Lord Trefgarne has quite properly said. But he did in fact in his remarks draw our attention to this most helpful draft consultative document which indicates in quite considerable detail how the schemes will be prepared and set out. It really is worth studying that. I have no doubt that local authorities will be doing just that, to make quite sure that when they introduce their schemes schools understand these very new proposals.

It is immensely encouraging that there is such a large measure of agreement on the importance of the proposals themselves. I believe that the proposals, taken with some of the other measures that we shall be discussing later, will make the schemes acceptable and certainly better for the schools.

9.15 p.m.

Baroness David

I should like to ask the Minister about the Government's reaction to the Coopers and Lybrand report. This was commissioned by the Secretary of State in May 1987 and it certainly suggested that it would take quite a long time to get LFM schemes in operation. It stated that a good deal of money would be needed and 12 to 18 months to undertake the consultation leading to the development of the schemes let alone the actual implementation.

The report further states that: It will in fact be extremely difficult for many authorities to clear the necessary ground if they are to have schemes ready for the Secretary of State's approval by September 1989. I should like to ask the Minister whether the Government have taken any notice at all of the report which they themselves commissioned. As I said earlier, the Government always seem to be asking for committees and reports, but the moment that they announce their decisions the Government decide that perhaps they do not like them altogether and start off again with another committee. I should like to have the Minister's comments on what the Coopers and Lybrand report said.

Lord Dormand of Easington

I rise briefly to mention a factor which does not seem to have been mentioned so far in the debate. It concerns the amount of money which is to be delegated. I have experience of one authority which was very generous indeed and where there was no problem in getting all the textbooks and the exercise books and other things that were wanted. In my experience of governing bodies the governors on the whole were very happy because their schools were getting all of the equipment that they wanted. If they wanted an extra classroom built they would have to make recommendations, but they would get a very sympathetic hearing

However, if the amount of money which is to be delegated is very small, and if the governors had the power to, for instance, buy half a dozen new spades for gardening lessons, a new vaulting horse for physical education and a couple of new Bunsen burners or such things—I am not sure whether my noble friend would agree that that is likely to inspire a governing body—

Lord Taylor of Blackburn

Definitely not.

Lord Dormand of Easington

My noble friend says, "Definitely not". Surely that is the crucial point. This Government, both in this Chamber and in another place, tell us that the country has not been more prosperous for many, many years. Let me say at once that I have no objection in principle to delegation, but it seems to me that if there is an adequate amount of money to be delegated so that governors can make worthwhile decisions that is a different matter, but I suspect that that will not be the case.

Baroness Blatch

I should like to add to that particular point by saying that whatever the level of resources may be one can be sure that they will be better used at school level than they will be at local authority level.

Lord Trefgarne

I shall not follow my noble friend down that particular path, but in reply to the noble Lord, Lord Dormand of Easington, I would explain that the idea is that the governing bodies have the responsibility to manage their schools within the kind of budgets that the schools have been used to having recently. This is not a measure that provides more or less money for the educational system; it simply ensures that the money that is available is employed more efficiently. I was glad that the noble Lord acknowledged and, as I understood it, accepted the proposed improvement in the arrangements.

May I say a few words about the timing, about which the noble Baroness, Lady David, asked me. The Bill does not set a timetable for the introduction of this system to schools.The draft guidance envisages that LEAs will be required to submit schemes to my right honourable friend by 30th September 1989. The intention is that most approved schemes will come into force from 1st April 1990. There will then be a phasing-in period of up to three years as authorities and schools develop and learn from experience. Inner London apart where some delay may be necessary, full implementation of delegation in all the qualifying schools will be required by April 1993. The Government believe that this is a realistic timetable given the resources which we propose to make available and the progress which has already been made. I hope that that will reassure the noble Baroness.

The Lord Bishop of Manchester

Before the Minister sits down, can he tell us why it is that there is the necessary delay for inner London which does not apply to some other parts of the country? One of the matters which is of very deep concern is getting sufficient people who are prepared to serve and give the time on school boards of governors, and also giving them the resources to back the financial administration.

Lord Trefgarne

So far as inner London is concerned, of course this Bill contains proposals about the arrangements for inner London, and the Government apprehend that in the light of the proposals contained in the Bill with regard to inner London it is likely that a further short time will be required.

Baroness David

I thought that we could get quite close on this amendment because, as I said, we are agreed on the aims. We want to go along with local financial management. We do not want to have pistols put at the heads of governors. I think that the Government could have given way on this amendment. They have not given way on anything so far. I thought that was something on which we might have sympathy, so I shall divide the Committee.

9.21 p.m.

On Question, Whether the said amendment (No. 178B) shall be agreed to?

Their Lordships divided: Contents, 35; Not-Contents, 95.

DIVISION NO. 3
CONTENTS
Airedale, L.	Jay, L.
Baldwin of Bewdley, E.	Kinloss, Ly.
Basnett, L.	Lawrence, L.
Blackstone, B.	Lockwood, B.
Blease, L.	McCarthy, L.
Brooks of Tremorfa, L.	McNair, L. [Teller.]
Callaghan of Cardiff, L.	Meston, L.
Cocks of Hartcliffe, L.	Molloy, L.
David, B.	Morris of Kenwood, L.
Donaldson of Kingsbridge, L.	Nicol, B.
Donoughue, L.	Ponsonby of Shulbrede, L. [Teller.]
Dormand of Easington, L.
Elwyn-Jones, L.	Rochester, L.
Gallacher, L.	Seear, B.
Glenamara, L.	Stewart of Fulham, L.
Hatch of Lusby, L.	Taylor of Blackburn, L.
Hylton, L.	White, B.
Irvine of Lairg, L.	Winstanley, L.

NOT-CONTENTS
Astor of Hever, L.	Kaberry of Adel, L.
Beaverbrook, L.	Kilmarnock, L.
Beloff, L.	Kimball, L.
Belstead, L.	Kinnaird, L.
Blatch, B.	Kinnoull, E.
Brabazon of Tara, L.	Lindsay, E.
Broadbridge, L.	Lindsey and Abingdon, E.
Brougham and Vaux, L.	London, Bp.
Butterworth, L.	Long, V.
Caithness, E.	Lyell, L.
Campbell of Croy, L.	Mackay of Clashfern, L.
Carnegy of Lour, B.	Mersey, V.
Carnock, L.	Monk Bretton, L.
Clinton, L.	Mountevans, L.
Coleraine, L.	Nelson, E.
Cork and Orrery, E.	Norfolk, D.
Cowley, E.	Norrie, L.
Cox, B.	Oxfuird, V.
Cranbrook, E.	Pender, L.
Davidson, V. [Teller.]	Portsmouth, E.
Denham, L. [Teller.]	Radnor, E.
Derwent, L.	Rochdale, V.
Donegall, M.	Rodney, L.
Eden of Winton, L.	St. Davids, V.
Ellenborough, L.	St. John of Bletso, L.
Faithfull, B.	St. John of Fawsley, L.
Ferrers, E.	Saint Levan, L.
Flowers, L.	Saltoun of Abernethy, Ly.
Forester, L.	Sanderson of Bowden, L.
Fraser of Kilmorack, L.	Skelmersdale, L.
Gibson-Watt, L.	Stedman, B.
Gisborough, L.	Stodart of Leaston, L.
Grantchester, L.	Strathclyde, L.
Gray of Contin, L.	Swinfen, L.
Greenway, L.	Swinton, E.
Gridley, L.	Thomas of Gwydir, L.
Haig, E.	Thorneycroft, L.
Hardinge of Penshurst, L.	Torrington, V.
Harris of High Cross, L.	Trafford, L.
Harvington, L.	Trefgarne, L.
Henley, L.	Trumpington, B.
Hereford, Bp.	Ullswater, V.
Hesketh, L.	Vaux of Harrowden, L.
Hives, L.	Whitelaw, V.
Hooper, B.	Windlesham, L.
Huntly, M.	Wise, L.
Jenkin of Roding, L.	Young, B.
Johnston of Rockport, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.30 p.m.

Baroness Seear moved Amendment No. 178C: Page 21, line 35, at end insert ("after the making of an Order by the Secretary of State in respect of that authority under subsection (2A) below").

The noble Baroness said: In moving Amendment No. 178C, I wish to speak also to Amendment No. 179A.This is to some extent an elaboration of the amendment on which we have voted.

We on these Benches agree with the idea of local financial management but we are keen that it should work. To an extent not shared on the Government Benches, we believe that there will be difficulties in some areas in getting this going. We accept that it makes the Government's job a great deal more worth while. It is highly desirable that it should take place. We want to see it successful, as I believe the Government do. Therefore, in Amendment No. 179A we ask that before making an order the Secretary of State should be satisfied that the resources are there for the governing body and that there are training arrangements to enable the schools to be run in a cost-effective manner.

In non-parliamentary language, we ask the Government to put their money where their mouth is. If this is to be successful it must have money behind it. We do not believe that it will be successful if it is not accompanied by adequate financial resources.

In so far as I have heard anything from the Government about money behind the scheme—I hope that the Minister will tell me that I am wrong—the money available to the local authority will be handed over to the governing bodies for them to deal with. This does not allow additional money for the governors taking on the job. We ask for the assurance that the additional money will be available to make a success of these worthwhile proposals. I beg to move.

Lord Trefgarne

These amendments relate to the implementation of schemes of financial delegation and in particular to the training of governors. The Government recognise the vital importance of school governors being able to carry out their functions effectively both through training and through a coherent scheme of delegation with active local education authority support. The provisions of this chapter, together with the specific grant proposals for 1989–90 recently announced by my right honourable friend, are designed to achieve precisely that.

Let me turn first to the question of resources, which is the concern of paragraph (a) in Amendment No. 179A. We recognise that there will be start-up costs in introducing financial delegation. They will fall mainly into three categories: preparing schemes, which some authorities are already doing; supporting schools, including the provision of training; and installing management information systems. These are the three areas which my right honourable friend now proposes to support through specific grant.

Expenditure of £30 million would be supported in 1989–90, including around £5 million for the training of governors. The extension of that support for subsequent years will be considered in the normal way. The experience of the authorities that have made most progress in this area indicates that the level of support envisaged should meet the bulk of the initial costs to LEAs of introducing delegation. As for ongoing costs, we believe that over time increased costs to individual LEAs should be offset by the more effective use of resources at the school level and by economies centrally as decision-making is delegated to those directly responsible.

Amendment No. 178C, however, implies that all this support should be in place before delegation schemes are actually prepared by the LEA. That is a recipe for confusion. Local education authority support, training arrangements and information systems will need to be planned as part of a coherent scheme of delegation. The LEAs cannot be expected to decide on what information will be needed until they have determined how their scheme will work—in particular, what will be delegated and how it will be allocated to schools. Nor can governors be trained without knowing what responsibilities they are being trained for.

The implementation of delegation is a major undertaking, and it would be far more practicable to carry it out as schemes are phased in. Paragraphs 67 to 70 of the draft guidance on financial delegation issued by my right honourable friend make it cleaer that LEAs will be expected to include arrangements for implementation and training in their schemes. It is they who will be responsible for preparing schemes and who are best placed to judge their own local needs and circumstances. I hope that I have reassured the noble Baroness and that she will see fit to withdraw her amendment.

Baroness Seear

From what the noble Lord has told the Committee, I hope that this will be additional money from the centre and not a reallocation of already allocated resources, because that is a trick with which we have become all too familiar. I am glad to have the noble Lord's assurance that this is new money. It is quite impossible to know whether that amount of new money will be just about right, too much or too little. One suspects that it will be too little but at least it is good to have an assurance that there will positively be new money, which in itself is a recognition of the need to provide these services. That seems to me to be at least a step in the right direction. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Taylor of Blackburn moved Amendment No. 178D: Page 21, line 44, leave out ("; and").

The noble Lord said: I take it that the remarks made earlier by the Minister apply equally to this amendment and therefore that money will be made available. If that is so, surely the Government will accept this amendment without any difficulty at all and this will become part and parcel of the Bill. I hope that the Government recognise their responsibility toward local authorities to reimburse them for any training and that therefore the department will be glad to help them in that way.

I understand that the noble Baroness, Lady Young, intends to move two amendments later this evening, and no doubt they will be similarly affected. I am delighted that the Government intend to provide money for training and I am sure that this amendment will be carried I beg to move.

Baroness Lockwood

Following the remarks of my noble friend, if the Government accept responsibility for training and agree to the amendment of my noble friend so that they will be accepting complete responsibility for the training of governors, will they also bear in mind the kind of problems that I mentioned in my previous intervention; namely, that in some LEA districts there will be a greater need for training than in others? In other words, in areas in which there is a substantial proportion of professional people on a board of governors the same amount of training will not be required as would be required by a group of people on a board of governors who come from different ethnic communities. Will the Minister take that point on board?

Lord Kilmarnock

Before the Minister replies, perhaps he will clear up a doubt in my mind. He referred to £35 million of new expenditure and also to an additional £5 million for the training of governors of schools and colleges. On 19th April his noble friend Lady Hooper referred to, the establishment of central implementation teams to plan and oversee the introduction of financial delegation".—[Official Report, 19/4/88; col. 1471.] I wonder whether the Minister can put a gloss on that. I am not quite sure what that statement means, what the work consists of or indeed what it might cost.

Lord Trefgarne

The sum of money to which I have just referred (which was £30 million and included the £5 million specifically for the training of governors) was announced by my right honourable friend quite recently. It is money that will be made available to the local education authorities in order to enable them to implement the schemes that they will be bringing forward for his approval.

In answer to the noble Baroness, Lady Lockwood, I agree that the kind and extent of training that may be required in some areas no doubt will be different from, or even greater than, that required in others. The noble Baroness rightly said that there will be some governors who have less experience of these matters than others and who will require rather more training. That is just the kind of thing that the local education authorities will need to address in preparing their schemes, which will need to include provision for the training of governors and which my right honourable friend is prepared to fund to the extent that I have indicated.

Turning to Amendment No. 178D, I think I am right in saying that in addition to the amendment that specifically has been moved we are at this moment discussing Amendments Nos. 178E, 202A and 202B. The Government share the objective of these amendments and new clauses in ensuring that governors, head teachers and deputy heads receive appropriate training and support to enable them to fulfil their new responsibility under schemes of delegation. My right honourable friend has made it clear that he fully accepts the need for training in order to secure the successful implementation of schemes of financial delegation and that he will expect LEAs to set out their proposed training arrangements in their schemes.

That training will need to cover each of the key groups who will be responsible for making delegation work, including heads, school adminstrative staff and LEA officers, as well as governors. The implication of the amendment and new clauses that school staff and LEA officers do not have a vital role and training needs is unfortunate, and one which I would not accept.

The 1986 Act already required LEAs to offer governors appropriate training. For their part, the Government are already funding a series of pilot studies on governor training; are supporting the work of the National Association of Governors and Managers, and the production of training materials nationally by what is known as the LMS Initiative; and have proposed specific grant support of around £5 million in 1989–90 for the training of governors to which I have already referred. Significant resources are already available under the LEA training grants scheme for the management training of heads and senior teachers, and proposals for 1989–90 will be announced in due course.

While we sympathise with the general intention behind the amendments, it would not be appropriate to include on the face of the Bill unspecified duties in relation to training that could unduly delay the start of schemes. Nor is the implication of new Clause 202B that all additional resources should be provided by central government acceptable. My right honourable friend will provide pump-priming but the main and ongoing responsibility must be for the LEAs. Training must form part of a phased introduction of delegation and is only one element—though I agree it is a vital one—needed for the success of that process. To single out training of governors to the exclusion of school adminstrative staff or information systems is not right or helpful.

The amendments therefore do not add to what is already provided for in the draft guidance and existing statute. However, I hope nonetheless that the noble Lord will be reassured by what I have said and will feel able to withdraw his amendments.

Baroness Young

It may be helpful to the Committee that my noble friend responded to two amendments down in my name—Amendments Nos. 202A and 202B—but which I have not moved. I am happy to speak to them. It was not my intention to press these two amendments. I was very glad to hear what he had to say about the training of governors and that there will be £5 million available for that. I have read the relevant paragraphs, 69 and 70, in this helpful advice which set it out in some detail.

There are two points of concern. First, I am glad that considerable amounts of training have been going on since the 1986 Act. It is now almost two years since we debated that Act. My impression—I agree that it is only an impression—is that there are still considerable worries. Those have been reflected in the debates this evening about inadequate training. We need a thoroughgoing, consistent approach to the training of head teachers and governors if this is to work. Secondly, I am concerned about something my noble friend said when he drew a distinction between the training of governors and of administrators. I should have thought that qua administrators had had some experience of this kind. What we shall find is that many parents, teachers and head teachers will be confronted with new situations, and they will need guidance.

I have heard it said before, and it is a view that I support, that a school governor of the future will have a responsibility that in many ways is similar to that of a magistrate and where training is an accepted part of the course for everybody. I should like to understand—and I believe that it is the wish of the Committee—that the Government had a scheme whereby anybody who was made a governor would automatically go on a training course to understand this. It is that kind of thing that we understand.

I do not expect my noble friend to give an answer to all these questions tonight. It would be immensely helpful if we could have some more information before the Report stage, perhaps in the form of guidance. I am pleased at how far we have gone. But this is an extremely important matter. It would be very useful to hear more and to hear of a consistency of practice throughout the country.

9.45 p.m.

Baroness David

I should very much like to support what the noble Baroness has said. Governors will play an important role when the Bill becomes an Act. I hope, perhaps by Report stage, to hear something more definite from the Government.

Lord Kilmarnock

I agree very much with most of what the noble Baroness, Lady Young, said. Whether the busy, energetic people who are likely to become governors of schools will be able to afford the time for these training courses raises some doubts in my mind. I suggest to the noble Lord that the Government might consider some other method of disseminating the necessary guidelines and information for potential governors in written form.

Lord Trefgarne

I shall see what I can do to find some additional information for my noble friend between now and the next stage. The noble Baroness, Lady Lockwood, rightly pointed out that the requirements of governors for training will vary very much from place to place and from school to school. No doubt some governors and others will have much experience in these sorts of affairs; they may have experience in business as well. They will be more than willing and more than able to discharge their new duties, perhaps with the minimum of additional training. There will be others, however, who do not have that range of experience and for whom the training would clearly have to be in greater depth and more comprehensive.

Therefore, there would be a risk in imposing on all local education authorities some stereotyped form of training which all new governors would be required to undergo willy-nilly when perhaps in some cases such training might be excessive and unnecessary. However, I shall reflect upon what my noble friend has said to see what additional information can be provided between now and the next stage.

Baroness Blackstone

Will the Minister accept that having a business background does not necessarily qualify someone in understanding about the needs of schools in contemporary society? That person may know quite a lot about finance but may not know how to apply that financial knowledge to the education system.

Lord Trefgarne

Of course I accept that. I believe that a business background might be useful for the financial aspects of managing a school. But the educational and social aspects would call for a different range of experience.

Lord Glenamara

As many thousands of governors will have to be trained throughout the country, have the Government talked to the Vice-Chancellor of the Open University to try to interest him in running a course? That would probably be the most efficent and most economical way of doing it.

Lord Trefgarne

I understand that the vice-chancellor's interest in this matter has already been engaged. Indeed a video has been prepared for this purpose.

Lord Taylor of Blackburn

Obviously I shall not press this amendment after what the Minister has said. I ask the Minister most sincerely to press on his right honourable friend the fact that we who have been engaged in this field for many years and who have looked at authorities throughout the length and breadth of the country realise how important training is. We also realise how difficult it is for local authorities to find their own finance. If the Secretary of State wants the job to be done well, then I am sure he must be prepared to pay for it. Will the Minister again give us the assurances that he will reconsider the amendment and come back in some way at Report stage? On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 178E not moved.]

Baroness Seear Amendment No. 178F:

Page 21, line 48. at end insert ("and (c) the determination under any formula drawn up within guidelines specified by the Secretary of State of amounts separately identified within the school's budget share in respect of pupils with special needs.").

The noble Baroness said: On behalf of my noble friend who has succumbed to the travailing bug I beg to move Amendment No. 178F. In the hope of having the provision added to the Bill the amendment is tabled in order to emphasise the additional costs required for pupils with special needs. We fear that unless the provision is written into the Bill, then because of the need to make the money stretch as far as possible, the expenses incurred for providing for pupils with special needs may be overlooked. I am sure that that will not be anyone's intention, especially as so much emphasis has been put on the importance of educating pupils with special needs in the general schools system. However, if that intention is to be carried out properly additional money will be required.

Baroness Faithfull

Amendment No. 178F, moved by the noble Baroness, Lady Seear, is a paving amendment to Amendments Nos. 183, 184, 185 and 186. Therefore I should like to speak to Amendments Nos. 183, 184 and 186.

I was grateful for the Minister's sympathetic response to Amendment No. 158 concerning facilities in schools for children with special educational needs. However, as has been stated by the noble Baroness, Lady Seear, there exists a certain amount of nervousness as regards resources. There is a scepticism as regards the circumstances of such children. We are apprehensive on two counts. First, so little has been done by the Department of Education in the last eight years since the passing of the Act and the services in the local authorities are uneven throughout the country. Secondly, until the amendments were moved, nowhere does the Bill make any statement in connection with children with special educational needs. That has been of concern and worry to all Members.

It is well known that the facilities for children with special educational needs are expensive but they are cost-effective. If such children are able to earn their living and live alone throughout life then their education is cost-effective, however much may be spent on it.

The purpose of Amendments Nos. 183 and 184 is to ensure that special educational needs receive a weighting under the allocation formula in delegated financial budgets. That was recommended in the Coopers and Lybrand report. The noble Baroness, Lady Seear, made the point that if that is not specified in the Bill local education authorities may not adequately cater for pupils with special educational needs in mainstream schools. We believe that we must state that because it has not been provided in the past. We should like to know whether it will be provided in the future unless resources are available.

Provision for children with special needs will include extra staffing, teachers and ancillary helpers, modifications to buildings, special equipment, adapted curriculum materials and lower pupil-teacher ratios. Teachers will then have time to give attention to children with special needs and to other children in their class. I made that point in connection with Amendment No. 158, and I repeat it.

As regards Amendment No. 186, the provision of education for such children is expensive. I would ask the Minister: what will happen if the local authority is unable to make provision for children with special educational needs? Will it be possible to use the rate support grant to help them? Let us suppose that the local authority finds that it cannot meet the resources required for these cases which are so important; what will happen and what recommendations will the Government make to the local authorities?

Lord Kilmarnock

Perhaps it would help the Committee if the Minister could tell us whether it is the view of the Government that the provisions of the Education Act 1981 concerning children with special educational needs will be preserved in their entirety under the Bill at present before the Committee. If that is so, does the Minister not agree that in certain circumstances that could impose very difficult decisions on the governors who will decide on the deployment of the devolved finance? If the obligations on the educational system with regard to children with special educational needs are the same as in the 1981 Act, then there may be some very tough decisions arising as to whether they are to be implemented at the expense of other things in certain determined schools. Perhaps the noble Lord could clarify that matter.

Baroness Darcy (de Knayth)

As my name is included on Amendment No. 185, as is that of my noble friend Lady Kinloss, perhaps I could support this group of amendments. Much of what I was going to say has already been said, and said very well. However, when a school is controlling its own money it is true that there will be pressures to provide the best facilities in schools for the largest number of pupils. Therefore, schools could be reluctant to take on children with special educational needs, and the move towards integration could slow down or even cease unless they are given some assurance about the provisions which will be made available. These amendments encourage the policy of integrated education which is enshrined in the 1981 Act and, indeed, was the policy of various governments before that time.

As I have said, Amendment No. 185 is in my name but, on reflection, I prefer Amendment No. 186 in the name of the noble Baroness, Lady Faithfull, and the noble Lords, Lord Seebohm, Lord Ritchie and Lord Carter, because it provides better safeguards for the 18 per cent. of children who do not have statements. Therefore, I hope the noble Baroness will be able to say something positive about this group of amendments; and it may be that she would prefer Amendment No. 186.

Lady Kinloss

I should like to say a few words in support of these amendments, especially Amendments Nos. 185 and 186. I too agree with much that has been said in regard to this group of amendments. The Bill does not state specifically that special needs provision is a criteria within the delegation formulae, and it appears that the need still exists for an explicit statement. The argument against too much prescription in the legislation has been made repeatedly and yet the Government have retained many powers by not allocating duties and responsibilities to others. There will be need for some prescription. It is better to know the areas which require it and ensure that the necessary information is made available to the Secretary of State now and in the future through the appropriate legislation.

10 p.m.

Lord Trefgarne

Perhaps I can assure the noble Lord, Lord Kilmarnock, that there is nothing in this Bill to affect the provisions of the 1981 Act to which he referred. However, the Government recognise the necessity of ensuring appropriate provision for pupils with special educational needs under schemes of financial delegation. My right honourable friend has recently issued draft guidance about the preparation and implementation of schemes. That guidance makes clear the Secretary of State's view that LEAs should take account of special needs in their formula for allocating resources between schools.

If the Committee will allow me, I shall quote from paragraph 54 of that guidance, which states: in the Secretary of State's view, the formula should include at least two other specific factors"— as well as the numbers and ages of pupils— namely, (i) the additional costs of children with special educational needs, including the needs of statemented children under the Education Act 1981 … and (ii) the additional costs in small schools of providing a standard of teaching and learning comparable to that available in larger schools". Under Clause 26(2) the LEA will be required to take account of this guidance in preparing its scheme. However, it would not be appropriate to embody this guidance on the face of the Bill. Where a provision such as Clause 30(3)(b) allows a general freedom to include any relevant factors, it is unnecessary to specify what individual factors it might include. To do so may imply that factors which are not listed are irrelevant, which would be confusing and unhelpful. There could also be significant problems in deciding locally exactly which pupils were covered by the definition of special needs and how their needs should be taken into account.

LEAs would be open to challenge that they had not taken special needs into account, leading to disputes and delay in implementing schemes. Schemes will be expected to reflect the relevant requirements of the 1981 Act. But it should be for LEAs themselves to determine through their schemes what particular needs they will take into account and how, after consulting the governing bodies of their schools and subject to approval by the Secretary of State for their schemes as a whole.

Amendment No. 186 specifically would adopt the definition of special needs in Section 1 of the Education Act 1981 as the bench-mark for additional provision. But although Section 1 of the 1981 Act contains a clear definition of a pupil with special educational needs, that definition would not help those locally who would have to decide what particular weightings should be taken into account in respect of individual children with special needs. Such weightings will depend upon a range of indicators and local interpretation of them and are not suitable for inclusion on the face of the Bill.

The Committee will also wish to know that paragraphs 38 to 41 of the draft guidance provide for certain specialist support services for pupils with special needs to be excluded from delegation at the LEAs' discretion where that will ensure that the needs of individual pupils are targeted more accurately. This will ensure further protection for pupils with special needs where LEAs consider that that is required.

I hope that I have been able to reassure my noble friends and others who have spoken and that it will not be thought necessary to press these amendments. I can perhaps give one crumb of comfort to my noble friend Lady Faithfull. As regards her Amendment No. 183, to which I believe the noble Lord, Lord Ritchie, put his name, besides two other noble Lords, I may be persuaded to look again at the possibilty of including on the face of the Bill the words contained in that amendment. I do not think it is necessary for the reasons I have described. However, if my noble friend will be further reassured by such an offer I shall be happy to consider it.

Baroness Seear

I am disappointed that the Minister is not prepared to incorporate the words into the Bill. We said earlier in this Session when he was not with us that we would be very much more reassured by finding these essential items on the face of the Bill and not merely in circulars and recommendations. Once they are on the face of the Bill people who feel that they are not properly dealt with are in a much stronger position to raise an issue.

The noble Lord said that he was casting a crumb of comfort towards his noble friend Lady Faithfull, but he did not cast a crumb to me. Nevertheless, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 179 to 179B not moved.]

Lord Dormand of Easington moved Amendment No. 179C:

Page 22, line 30, after ("expenditure)") insert— ("( ) the amount of any expenditure of the authority for or in connection with the provision of teaching and non-teaching staff at the school; and").

The noble Lord said: I should like to speak also to the associated amendment, Amendment No. 189AB. The Bill places increased responsibilities on governors of schools in relation to the appointment and dismissal of staff. Although the local education authority remains the employer except in the case of aided schools, it will have a greatly diminished influence in dealing with the numbers and the deployment of teaching and non-teaching staff.

The Committee will be fully aware that staff salaries form a significant proportion of the education budget. I intervened briefly a short while ago on the issue of financial delegation. It seemed to me that not to mention teachers' salaries—the issue was not mentioned in any of the contributions—was completely unrealistic.

The allocation of responsibility for teachers' salaries to governing bodies would have three important effects. First, the level of staffing establishments might differ seriously not only between one school and another but from year to year in the same school as governors changed their spending priorities. That in turn would also make curriculum planning difficult and introduce even greater stress for staff. Anyone who has had the slightest connection with curriculum planning will know what a problem that can be. A small number of local education authorities have introduced computer planning but that is in its infancy and has brought its own difficulties.

Secondly, the planning of staffing levels overall by the local education authority would become extremely difficult. Indeed, as one who for a number of years dealt with overall staffing, I am tempted to say that it might sometimes prove impossible. Thirdly, there could be losses due to, if I may use the economists' jargon, diseconomies of scale.

I assure the Minister that this is not a destructive amendment. It would not detract from the governors' participation in the choice of staff, which most people would feel is the most important aspect of the matter anyway. It would allow the LEA to carry out rational planning of its general staffing requirements and to relate them to national agreements on salaries and additional allowances—some Members of the Committee will know how complicated that can be at times. It will also enable the LEA to deal with difficulties thrown up by the Bill's provisions on such important matters as redundancy, as mentioned in Clause 36(4), and the lack of provision for deployment arrangements. On that latter point I predict trouble ahead.

In my speech at Second Reading I said that my main general criticism was the sheer lack of reality in the Bill's provisions. The provision in this part of the Bill is a perfect example of that lack of reality. I go further and say that there is no great desire on the part of governors to be involved in this kind of financial management. Their role should be as it is now—to deal with teaching and non-teaching staffs within a general framework laid down by the local education authority. That is not a forfeiting of responsibility or a sacrificing of accountability. In any case there would always be the freedom to discuss special difficulties with the LEA, again as occurs at the present time.

If we are to obtain governors of the right calibre—and I support my noble friend in this matter—and with a genuine interest in education, it is proper that they should be given the correct degree of responsibility. However, if this part of the Bill is enacted as it stands, I can foresee governors' meetings being taken up with wrangling and disputes on financial matters and not tackling education issues. It will lead to discouragement, dissatisfaction and disillusionment, and schools will be much the worse for it. I commend the amendment to the Committee and turn to the associated amendment, Amendment No. 189AB.

This amendment is a necessary follow-up to the amendment which I have just proposed. Local authorities will continue to have financial responsibility for staff, whether or not they are directly the employers, yet they will have little direct control of the numbers employed. Clause 36(2)(a) refers to Sections 34 and 35 of the 1986 Act. Section 34 gave LEAs responsibility for determining the complement of teaching and non-teaching staff at all except aided schools. The overall policy which each LEA developed as a result gave rationality to the planning of its general staffing requirements as well as guidance to aided school governing bodies within its area. That planning could of course be related to the total salary budget, to various national agreements, and so on.

Chapter III of the Bill takes that responsibility away and frankly lands it in the unknown. The LEA continues to meet the salary bill but the expenditure is channelled through governing bodies. Idiosyncratic decisions may now be taken by governing bodies which make for inequalities and uncertainties in staffing levels. That is the main point which I make in this connection. Teacher supply becomes a matter for speculation rather than calculation. It is to protect schools endeavouring to plan a viable curriculum, indeed to protect the national curriculum—which I am sure has the assent of Ministers—that the amendment is proposed.

Section 35 of the 1986 Act deals with the appointment and dismissal of staff and the relative responsibilities of the LEA, the chief education officer and the governing bodies. The Bill also removes that section of the 1986 Act relating to schools within a scheme of financial delegation. My concern about that removal will be voiced in connection with other amendments.

However, if LEAs are, through their overall budgeting, to have influence over staffing levels and offer expert and professional guidance to governing bodies on that complex subject—I fail to see how it could be otherwise—it is necessary to restore the position, so recently granted to them in the 1986 Act, by removing the reference in Clause 36(2)(a) to Section 34 of that Act.

For the sake of emphasis I repeat that any substantial variation in staffing levels would cause great dissatisfaction in schools. I hope that the Government will recognise these amendments as an important improvement. I commend both amendments to the Committee. I beg to move.

Baroness Blatch

In my view this amendment applies mainly to secondary schools in terms of the type of flexibility which a secondary school will have. I believe that the amendment if passed would put an unnecessary restriction upon secondary schools. Most decisions about allocation of resources in schools that have their own budgets are taken by a finance committee, either a sub-committee of the main governing body or possibly the whole governing body. On the committee sit representatives of the staff, the head teacher, the parent governors and the governors of the school.

It seems to me that it would be wrong to deny a school at least the opportunity, if a teacher left for whatever reason around Easter—a time when the main teaching requirement is over and one is moving towards revision and perhaps invigilation—to take the decision that a permanent replacement for that member of staff at that time is probably not appropriate. Therefore the school could opt to replace the teacher permanently in September. By taking that action about seven-twelfths of a teacher's salary is saved. It could be redeployed in many ways. One possibility would be buying in temporary part-time teaching to cover part of the teaching load in what is the fallow time of the school year before making the permanent appointment in September. That is one good reason why flexibility should remain in the hands of the school.

Another reason is reflected in some of the problems of the present system. If the bill for all salaries is picked up centrally, we go back to the old system. Why should a school think along those lines? Why should it think about redeploying precious resources? It will leave to the county council the decision about filling a vacancy. The flexibility should be left to the school governing body and teachers. As for professional guidance, it does not go away with the scheme; it remains. Schools that require it can demand it.

10.15 p.m.

Lord Trefgarne

The main thrust of financial delegation is to make individual schools responsible for their budgets since spending decisions are surely best made by those most closely involved with the school.

Amendment No. 179C removes expenditure on teaching and non-teaching staff from the general school budget before the remainder of the budget is delegated to the schools within the authority. The amendment is, I am afraid, contrary to the fundamental principle of financial delegation that governors should be responsible for the great majority of expenditure connected with their school.

Staffing costs account for between 75 per cent. and 85 per cent. of a typical school's budget. The governing body must be given full responsibility for decisions about expenditure on staffing if it is to have genuine responsibility for the management of the school's budget. The transfer of responsibility for staffing expenditure from the LEAs to the governing bodies of individual schools is at the very heart of financial delegation.

As Coopers & Lybrand emphasised in its report: Delegation of responsibility for teaching staff is fundamental to the success of any scheme of local management schools". The report also emphasised that the numbers of non-teaching staff should be within the competence of the school.

Leaving staffing costs out of the budget would remove the opportunity for governing bodies to balance expenditure between staffing and non-staffing costs and would mean that in many schools the extension of powers of financial responsibility was little more than they presently have. I hope that the noble Lord will see the force of that argument and not wish to press the amendment.

I turn now to Amendment No. 189AB. Its effect would be to keep in being Section 34 of the 1986 Act. That section provides that each county, controlled, special agreement and maintained special school shall have a complement of teaching and non-teaching posts determined by the local education authority. We believe that for schools with financial delegation it would be inappropriate for the authority to be able to specify a precise complement of teaching and non-teaching posts.

An essential part of financial delegation are decisions about staff numbers. Staff costs can, as I said, account for up to 85 per cent. of a school's budget. Financial delegation is meaningless if it does not include control over staff and their costs.

I have already quoted from the Coopers and Lybrand report. It also emphasised that numbers of non-teaching staff should be within the competence of the school.

Resources will be deployed most efficiently and effectively if they are under the control of the school itself. Schools will be more confident and more responsive to local needs, and all the staff of the school should feel a greater sense of involvement.

I hope that from what I have said the noble Lord will accept that we do not think that his amendments are an improvement to the Bill.

Lord Dormand of Easington

It may be asking a great deal of the Minister, but I wonder whether he is prepared to say how a school's overall budget is determined. For example, would the Minister say that if, according to the numbers on the roll, there ought to be six teachers on the basis of 30 pupils per class or something of that order, the governors could say, "No, we should only have five or four teachers and spend the rest of the money improving the school playing field or getting another couple of acres on to the school playing field", or something of that nature? If that is the kind of flexibility which will be given to governors, I think many people, including parents, will have grave doubts about it.

I am pleased that the noble Lord stressed that salaries were of the order of 75 per cent. or 85 per cent. I thought that 85 per cent. was nearer the actual amount. Would he be prepared to say what are the general points to be borne in mind for setting the budget for any school?

Lord Trefgarne

If the noble Lord is asking how the system will deal, for example, with a maverick board of governors who might, as the noble Lord suggests, want to invest all the school funds on the 3.30 at Kempton rather than running the school in a proper way, that would be wholly irresponsible.

More sensibly, if governors were perhaps in some genuine dilemma as to what priorities to apply to a modest improvement to the playing fields or an additional teacher or two, they would want to turn to the chief education officer of the LEA concerned for advice as to the right way forward. So I do not think that the awful difficulties which the noble Lord had in mind will come to pass. The overall budget of the school will be set by the local education authority. The important feature of this arrangement is that the board of governors would have the responsibility of managing the budget allocated to them in the way which they think best meets local needs.

Lord Irvine of Lairg

Perhaps I may call attention to one point. My noble friend Lord Dormand of Easington has moved Amendment No. 179C in conjunction with Amendment No. 189AB. However, the latter amendment is in a separate grouping which includes Amendments Nos. 189B and 190A. I propose to speak to these two amendments at the appropriate time.

Baroness Lockwood

Before my noble friend responds, I wonder whether the Minister could comment on another situation. In some districts the LEAs are under a TVEI scheme, for instance, and they have teachers who would not necessarily cover just one school. The resource is shared by a number of schools. How does the noble Lord see that kind of appointment being handled under financial delegation?

Lord Trefgarne

Presumably the local education authority, which will be overseeing the management of all the schools within its area, will have a view on that. But where a school employs only the part-time services of a certain teacher it would only be responsible for part of the costs of that teacher.

Lord Dormand of Easington

I do not think that the Minister has covered the essential points which are made in the amendments. While not pressing the amendment now, I shall certainly return to it at a later stage. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Kinnoull moved Amendment No. 180: Page 23, line 6, at end insert— ("(7) A scheme drawn up under this section shall provide for any governor of a school to which the scheme applies to have the right to receive special leave with pay for up to six days in any academic year for the purpose of carrying out duties at the school, or in relation thereto, during the period of the school day or for attending any training course and the Secretary of State shall make regulations within three months of the passing of this Act as to the definition of duties or any course in respect of which special leave shall be granted,").

The noble Earl said: I beg to move Amendment No. 180, standing in the name of the right reverend Prelate the Bishop of London and myself. Before speaking to it I should like to congratulate the noble Lord, Lord Airedale, who is in the Chair, on his very alert handling of the Committee at this time of the evening. It is becoming very confusing to know which amendment we have come to, and about five minutes ago I was horrified to think that I had missed my amendments. I should like to propose the award of an A-level in committeeship to the noble Lord who is in the Chair.

My noble friend will be glad to hear that this is a probing amendment. Its purpose is to make certain that in the future under this important Bill schools do not lose out or are not denied the services of potentially excellent governors because no allowance has been made under their terms of employment for leave of absence with pay to attend to their duties as governors. I recognise that this is an important and difficult issue because the governors of the future, as we have heard many times in this Committee, will have a very real front line responsibility to run the financial affairs of the school and will of course be responsible for hiring and firing staff as well as the many other duties of discipline, dealing with grievances and the not unimportant points of getting to know their pupils, their staff and indeed attending functions with parents.

I do not think that it is good enough to argue that good governors will now come forward because there is a real job to do which is a prestigious honour. Of course it is and of course many governors may be encouraged to come forward simply for that reason, but in many less prosperous areas that will not apply. It would be a very sad state of affairs if we found that potentially good governors could not attend to their duties for financial reasons.

The amendment seeks to introduce an onus on employers to give up to six days leave of absence with pay for employees to attend their governors' meetings. I would remind my noble friend that this is not inconsistent with or indeed a precedent for other public duties such as serving on a jury or serving in the territorial army. Those are two specific occasions where there is a precedent for employers. It is not inconsistent with the Protection of Employment Act where there is a requirement for three days leave of absence to be given, although not with pay. It is not inconsistent with the Civil Service or the trade union employment contracts, both of which give pay and leave of absence for attending public duties. As the Committee will see, the amendment suggests six days leave of absence.

The draft guidance to local education authorities is a very important document, although I stress that it is a draft guidance. I turned to it with some hope to see whether there was a reference to governors as regards leave of absence. But I could find no reference to that. All I could find was reference to the training of governors so that they could excel in their duties or for them to be trained for their duties. But I could find nothing about special leave. I may be wrong about that and my noble friend will correct me if that is the case. But the issue is very important.

The Government have brought into this Bill a very important duty for governors. Obviously one cannot assist those who are self-employed who seek to be governors, but surely we can make certain that those who are employed should be able to attend to their school duties. No potentially good governors should be lost to our education system at a time when they are needed to meet the responsibilities and challenges which have been set by Her Majesty's Government. I beg to move.

10.30 p.m.

The Lord Bishop of London

In supporting this amendment I hope that it brings us to face in reality the situation concerning the supply of governors. We have heard a great deal this evening about the additional powers which will be laid upon governors both in financial delegation and in other respects in running schools. I welcome those without reservation. But I have doubts as to whether sufficient attention has been paid to the supply of governors.

I accept, as has been said, that the new powers and responsibilities may well attract people. That is absolutely right, but it is not a question of whether people are just willing but whether they are actually able to serve. That is the crucial point. I know that my concern is shared by many of the directors of education for our Church of England dioceses who have raised this point with me. We have found this to be the case in the efforts which we have made in many dioceses, including my own here in London, in our attempts to train governors. It is a question of finding people who are able and willing to devote themselves to what will in the future be a much more physical task.

When I say that I am speaking from experience, not so much in the educational field but in the Church of England as a whole. In recent years we in synodical government have been giving considerable powers to lay people; and I hope that the noble Baroness, Lady Blackstone, will note that I said "lay people" and not "laymen". But there is a very real difficulty in my own diocese of London in finding a truly representative and broadly based supply of people who are prepared to serve on the various bodies which we now have for administering my very large diocese.

The work of administration which has to be exercised with a pastoral understanding simply cannot be done at weekends or in the evenings; it is just physically not possible. A body like our property sub-committee of the board of finance has to meet for a long period during the day—it is unavoidable—and the same kind of situation will obtain with the additional powers of governors.

As a result of this situation we find that those who would be admirable to serve and who would, as it were, represent every type of community within the diocese are simply not in a position to do so. So what worries me is that, again and again, when I go to one of our diocesan committees, I see the same people. That is not because they are obsessed with committees. It is not because they are people who love spending their time on committees. In many cases, it is because they are the kind of people who are able to give time to this particular work. I worry whether this situation might be repeated when we come to the additional responsibilities laid upon governors. As I said, it is not a question of competence; it is not a question of ability. It is a question of the circumstances in which people live, whether employment or domestic circumstances.

I know that encouragement is being given—I heard this from the Secretary of State himself—to firms to be generous and encouraging in their attitude to those who want to serve as governors, but that will help only a minority. The purpose of this amendment, as the noble Earl, Lord Kinnoull, said, is simply to draw attention to this fact. I expect that the Government have it in mind, but I think we need a greater sense of awareness of, as I believe, a very real problem which will need be faced in working the Bill when it becomes an Act. So I hope that this amendment has the understanding and support of this Committee, though, as the noble Earl, Lord Kinnoull, said, we shall not be pressing it to a Division.

Lord Kilmarnock

Before the Government give their view on this amendment moved by the noble Earl, I wonder whether I might ask him why he has not thought fit, or why he finds it difficult, to include the self-employed in his scheme. It seems to me that there are many self-employed small businessmen who might be ideally suited to be school governors, and it should not be impossible to devise some system which would take account of their particular position, whether on a standard flat rate or in relation to earnings. Would the noble Earl agree, if the Government smile on this amendment, that some such measure might be taken for the self-employed?

The Earl of Stockton

Interestingly enough, I have just come from a meeting with the Westminster Chamber of Commerce at which representatives of 11 major employers in the central area of London, who employ 18,700 people, were present. One of the questions that I asked them—knowing that this matter was coming up—was whether any of them were school governors. None of the 11 representatives of those companies was, but they all felt that they could and should be. The concern they expressed was that, while they felt certain that their firms would allow them time off, they would not be given time off with pay. The representatives of British Telecom and the Post Office were almost certain that they would not be allowed time off with pay. Therefore, although they were keen to help and were all men and women who are directly responsible for training and job selection, they felt unable to offer their services to the schools of London as governors under the present arrangements.

Baroness Lockwood

I support the amendment. There are two groups of people whom it is difficult to recruit as school governors. One group is made up of those who feel that they are not confident and competent enough to become governors. Training is very important for that group, and we have already discussed that matter.

The other group is made up of people who are on the promotion ladder in their jobs and professions. I spoke recently with the managing directors of two medium-sized companies in West Yorkshire about giving time off to magistrates, the training of whom was mentioned earlier. Their response was that they would never openly stand in the way of employees who wanted to undertake such responsibilities. However, if it was a question of promotion, availability would be taken into account. Therefore, there is a real cultural problem to be overcome.

A provision on the face of the Bill dealing with the matter would be at least a first step in dealing with some of the practical problems that arise. I welcome the remarks of the noble Earl, Lord Stockton, and many of the comments made by the CBI and other organisations at a national level. However, the solution to the problem lies in the hands of management of local companies and we have a very important educative job in that area.

The Duke of Norfolk

I should like to support the amendment in every way. It broadens the scope in the choosing of school governors. It is an excellent amendment.

Lord Donaldson of Kingsbridge

I also support the amendment. My experience has been that of finding members for prison boards. The same problems arise. Recruitment is spreading down to the best type of person in what used to be called the upper working class—the names are quite different now—which is the type that one particularly wants in such positions. It is impossible to get such people unless they can get time off with pay.

Lord Trefgarne

Let me say at once that we fully recognise that appropriate leave arrangements for governors and effective provision for clerking and other administration are central to the success of delegation in both voluntary and county schools. I am answering on Amendment No. 180 and also on Amendment No. 181, unless it is desired that that should be moved separately.

The Earl of Kinnoull

We should like to move Amendment No. 181 separately.

Lord Trefgarne

I agree that that should be so. However, I should remind my noble friend that it was agreed that it would be debated with Amendment No. 180.

The Earl of Kinnoull

Not by me.

Lord Trefgarne

Turning to Amendment No. 180, Section 29 of the Employment Protection (Consolidation) Act 1978 provides for governors to be entitled to time off in order to perform their duties effectively. We fully support this, and indeed the Bill extends this provision to the governors of grant maintained schools. Amendment No. 180 would, however, go further by giving extra privileges to governors of all schools covered by schemes of financial delegation. That would include small primaries without delegated budgets, as well as large secondary schools with them. It would entitle governors to time off without regard to the impact on their employer's business. Furthermore, it would entitle them to paid leave, whereas the 1978 Act left that to the discretion of the employer.

We do not believe that governors will be overwhelmed with extra work as a result of financial delegation, particularly as they get accustomed to their new responsibilities. They will not be expected to get involved in the detailed running of the school but to take major management decisions at periodic meetings. The experience of LEAs with pilot schemes has been that the job has not become excessively demanding of people's time. In order to ensure that it does not, we have provided in the Bill for delegation to sub-committees, which may include non-governors, and are proposing to support expenditure on the establishment of information systems and central advisory teams to ensure that governors are able to carry out their duties promptly and effectively.

I hope that those arguments have reassured my noble friend and that he will not wish to press the amendment.

The Lord Bishop of Manchester

The Minister may be unduly optimistic in saying that these additional burdens will not be so great as may be supposed. It seems to many of us that what is being delegated, particularly on the financial side, will involve great pressures on the governors. Their support and training, which we have already considered, are vital.

In regard to what has been said about the difficulty of obtaining people to serve as governors, from the Greater Manchester perspective I endorse entirely what the right reverend Prelate has said about finding people able and willing to give the time required. I am not entirely sure about the thrust of the amendment. I take seriously what has been said about the burdens on industry. I am not convinced that this is the right way forward. I think that the Minister should take seriously what was said about the difficulty of getting able people to give time to running this effectively.

Lord Trefgarne

The issue is whether people should have paid time. Time is provided for by other legislation.

The Lord Bishop of Manchester

That is why I referred to the burdens of industry: I meant paid time.

Lord Trefgarne

I accept what the right reverend Prelate says. From my experience of the territorial army a year or so ago, I recall that we considered once whether we should require employers to give members of the TA time to attend to their duties. We soon concluded that imposing a duty on employers to provide paid time for personnel to undertake such duties was not generally in the interests of the employees themselves. Therefore, the proposition was not proceeded with. I believe that similar considerations apply in this case.

The Earl of Kinnoull

The debate has been valuable, and a number of points have been aired. It was a probing amendment, and I think that we should probe on. With the Minister's good will, perhaps we shall have a chance to consider the question again at the next stage to see whether we can turn up some acceptable proposal. As we said, it is a difficult area, and one does not necessarily come up with the right answer. It is an important issue in the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.45 p.m.

The Earl of Kinnoull moved Amendment No. 181:

Page 23, line 6, at end insert— ("(7) A scheme drawn up under this section for voluntary schools shall include an allocation in respect of—

1. (a) a reasonable level of remuneration to the clerk at the school together with any associated staff costs; and
2. (b) any other administrative costs of the governing body, and these costs shall be treated as a maintenance item for the purposes of section 15 of the Education Act 1944.

(8) Section 58 of the Education (No. 2) Act 1986 shall not apply to any remuneration or other costs falling within subsection (7) above.").

The noble Earl said: I apologise to the Minister if I sounded a little rough when he said it was agreed that the two amendments shall be moved together. I am sure that that was agreed, but I was not present at the time. At this stage of the Bill we should not feel in any way rushed, as I know he would agree. This amendment deals with an entirely different issue from the previous amendment, and I had no wish to muddle the Committee, the Minister or indeed myself as to the issues under discussion.

Two financial aspects are involved that worry the voluntary aided schools. The first is the remuneration costs of school clerks and the associated staff costs involved. As I understand it, these costs are discretionary at present. Sometimes the county councils meet the cost of clerks for voluntary aided schools; sometimes they do not. Sometimes the clerks work for no pay and sometimes, perhaps not surprisingly, there are vacancies. There are no clerks available, as one can understand.

Under this Bill no mention is made of the position in respect of the pay of clerks in voluntary aided schools. To be fair to the Minister, an undertaking was given in another place that provision for the pay of clerks of voluntary aided schools would be included in the delegated budgets, but the fear is that it might still be discretionary. The clerks of schools will have increased responsibilities under this legislation and will be leaned on very heavily by governors; yet there seems to be nothing specific on this point written into the Bill and it is not clear how they will be paid.

The purpose of this amendment is simply to seek a mandatory obligation that such payments will be met. It is hoped that the costs will come out of the county council's budget pari passu with the payment of clerks of the county council's schools.

The Committee will note that paragraph (b) of the amendment seeks to ensure that reasonable administrative costs of the governing bodies will be allowed under the budgets. As I understand it, governors are at present allowed to claim travelling expenses but not the cost of administration. The duties of the governors clearly will involve an enormous amount of paperwork. There will also be an enormous number of telephone calls. All that is necessary when one is considering employing people, undertaking changes, taking on the financial running of the schools, and so on. I do not think it requires a tremendous degree of questioning of my noble friend, and perhaps I am wrong and this matter is included in the Bill; but, if not, I hope that he will accept the amendment and therefore see clearly the need to amend Section 58 of the 1986 Education Act. I beg to move.

Lord Trefgarne

I very much share my noble friend's view of the increasingly important role that clerks will have to play in the future. As governors take on more responsibilities, they will place a premium on good advice about their statutory and other responsibilities and on efficient organisation of their business. Clerks are there to provide just that.

The draft guidance on financial delegation makes it clear that my right honourable friend will expect all maintained schools to be funded on the same basis. A school's allocation will depend mainly on the numbers of its pupils and their ages, so that schools with a similar composition should receive similar budgets. There will be no discrimination between county and voluntary schools. Administrative costs delegated by the LEA as the amount of central decision-taking falls will be passed on to voluntary as well as to county schools. Once provision is delegated it will be up to the schools themselves to decide how to spend it. It would, however, be contrary to the aim of delegation to force schools to pay their clerks. By requiring LEAs to delegate provision to voluntary schools only, the amendment implies that it is open to LEAs not to make such provision for county schools. That is unacceptable both in principle and in practice.

Amendment No. 181 also provides for Section 58 of the 1986 Act—which restricts payments to governors to travelling and subsistence allowances—to be disapplied in relation to the administrative costs of governors. That would enable governors to act as paid clerks or to receive payment from the school for attendance at meetings. But the principle of voluntary public service by governors would be at risk if governors could claim allowances beyond those for travelling and subsistence. We do not consider that such changes would be appropriate.

Bearing in mind the assurances to which I have referred and which are contained in the draft guidance, and in view of the difficulties in my noble friend's amendment, I hope that he will not press this matter.

The Earl of Kinnoull

There seems to be a lack of support in the Committee for this amendment. However, I am grateful for the assurance that my noble friend has given. I should like to ask him to confirm that the clerks of county schools and the clerks of voluntary aided schools will be paid out of the same county council budgets. Can my noble friend confirm that point?

Lord Trefgarne

I believe that I can confirm what my noble friend has mentioned. Both categories of schools to which he has referred will receive a budget in relation to the size of their student roll, the ages of the children, and so forth, and will be at liberty to pay the clerks or not as they think fit.

The Earl of Kinnoull

That I assume is out of the same budget. There was a point put to me previously that it would be a different budget.

Lord Trefgarne

I believe not.

The Earl of Kinnoull

I am grateful for the assurance of my noble friend, and for his reply. I shall read it carefully. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 agreed to.

Clause 26 [Preparation and imposition of schemes]:

Lord Glenamara moved Amendment No. 181A:

Page 23, line 19, at end insert— ("(3A) Guidance under subsection (3) above shall include guidance as to the manner in which the school shall meet recognised standards for the health and safety of staff pupils and visitors.").

The noble Lord said: This is a very simple amendment. Its purpose is to impose a statutory requirement for local authorities to satisfy the Secretary of State that any school being considered for local financial management must meet adequate standards relating to health and safety. A similar amendment was discussed in the other place and the Government replied that there was no need to prescribe regulations because health and safety must be dealt with locally.

There have been surveys of local authority provisions in health and safety which I am happy to send to the Government if they wish. They show that health and safety cannot safely be left to local authorities as a voluntary matter. For example, there are a great many schools without proper first aid facilities, and very few schools throughout the country could meet the standards required for a fire certificate. Most local authorities do what they have to do and nothing more.

Perhaps I may say a few words about each of these two points. The Fire Precautions Act 1971 demands that designated premises have a fire certificate. Section 1(2) of that Act lists the premises that the Secretary of State can designate. This list includes schools. However, at the moment schools do not have to have a fire certificate. The Secretary of State has the power to designate schools; but at the moment these powers have not been implemented. I believe that that is nothing short of disgraceful.

Secondly, with regard to first aid, the Health and Safety (First Aid) Regulations 1981 say that employers must provide such equipment and facilities, as are adequate and appropriate in the circumstances for enabling first aid to be rendered to his employees if they are injured or become ill at work". But we adopt the good old British habit of letting a code of practice determine what is adequate and appropriate. This code deals only with employees. That means that children at school are not counted. They are not counted in this sense. The code lays down that where there are 150 employees on the site a qualified first aider must be provided. This ratio of 1:150 obviously applies to very few schools and only the bigger colleges, because they need to have 150 employees on site.

I believe that the problem is much greater and much more serious than many Members of the Committee may imagine. A Health and Safety Commission Report on the 12 months ending March 1987 showed that there were 1,227 fatal and major injuries to employees in the education service, but there were 9,267 fatal and major injuries to non-employees—that is, in the main, to children. Just imagine that! Over 9,000 children are fatally or seriously injured in our schools in one year. These figures are very much higher than, for example, for any service industry. Let us take one that one may imagine would have very high figures—the transport industry. Some 861 employees and 86 non-employees were involved in fatal or major accidents.

Schools are very dangerous places, and they always will be. Where young people are involved in vigorous games, such as football and rugby, or carrying out experiments in science laboratories, somebody will always get injured. The purpose of the amendment is to control that injury and as far as possible to mitigate it. I see that the draft circular, to which the noble Lord referred, has a section on health and safety. The opening words of that section are: That statutory responsibility for health and safety is substantially unchanged by financial delegation". That is the point with which I disagree. I want it changed.

Let me summarise. The two points which I believe should apply to schools being considered for local financial management are, first, that they should be required to have a fire certificate, and, secondly, that children as well as employees should be counted in applying the code on first aid.

The Committee may consider it illogical that I am making the proposal only with regard to schools being considered for a local financial management scheme. But this is a category of schools for which we are at the moment in Parliament making statutory regulations. Now is an opportunity to take the first step to make our schools safer places. I very much hope that Parliament will pass this amendment and that eventually it will apply to all schools in our education system. I beg to move.

Lord Trefgarne

As the noble Lord has indicated, the draft guidance to which I have referred on a number of occasions this evening refers to the health and safety arrangements that should apply in these cases. However, I think that the noble Lord has made a powerful case. If, therefore, he will withdraw his amendment now, I will undertake that the matter will be considered further between now and the next stage with a view to considering the possibility of bringing forward an appropriate government amendment.

Lord Glenamara

I am most grateful to the noble Lord and I gladly withdraw the amendment.

Amendment, by leave, withdrawn.

11 p.m.

Baroness Carnegy of Lour moved Amendment No. 181AA: Page 23, line 21, after ("body") insert ("and the Head Teacher".)

The noble Baroness said: In moving Amendment No. 181AA I shall speak also to Amendments Nos. 182ZA, 182AA, 182C, 182D, 182E, 182F and 189AA. If it is convenient to the Committee— because I believe this to be an uncontroversial set of amendments—I shall speak also to Amendments Nos. 201C and 201D, which are amendments to Clause 37.

This is a large group of amendments, but they all relate to one single very important issue—the position of the head teacher in the new circumstances of financial delegation by the governors to him or her, and to the need for enhanced clarity in the definition of the head teacher's role in relation to the governors and the local education authority.

They are probing amendments. I do not intend to press them this evening. They are designed to ascertain how the Government see the problem, to ask why in this part of the Bill, in a number of the procedures that are provided for, the head teachers are not mentioned. The local education authorities are mentioned, but not the head teachers. How is it envisaged that the head teachers' role will be safeguarded if things go wrong?

Increasingly during the past few years head teachers have found themselves required to become managers as well as leaders of the teaching team. With financial delegation, as Members of the Committee have been saying, they will have enormously enhanced responsibility, including financial responsibility. In many ways they will be like chief executives with a delicate combination of answerabilities to the governing body, to the authority and to the parents.

It is not easy to understand how that will work out in practice. As I said at Second Reading, I have high hopes of the effect of financial delegation. However, it may be that in the early stages the governors of some schools in some areas will find themselves behaving in a politicised way. For whatever reason, some may attempt to bypass or disregard the head teacher, as has been known to happen.

It appears that in the Bill the role of the head teacher is not adequately safeguarded. The head teacher may not be a member of the governing body. The Bill appears to assume that the governing body and the LEA will always consult the head teacher when it is sensible and right to do so and pay proper attention to his or her views. I have spoken with the National Association of Head Teachers. It agrees that the essential right of head teachers must be set out in certain respects. These amendments attempt to do that.

Amendment No. 181AA proposes that when the local education authority consults the governing body before preparing a scheme for financial delegation it must also consult the head teacher. As Clause 26 stands it requires the governors to consult the head teacher before they respond to the LEA but it does not require the LEA to consult the head teacher in the first place. The amendment rectifies that.

Amendments Nos. 182AA and 182C, 182D, 182E and 182F relate to the procedure for withdrawing financial delegation from the school, the periodic review of that withdrawal and its revocation. As Clause 29 stands it would be possible for all that to happen without the proper involvement of the head teacher. The amendments seek to put that right.

Amendment 182ZA suggests that if members of governing bodies are to have protection for personal liability it should also apply to head teachers. It will if they are members of the governing body, but it will not if they are not members. The amendment rectifies that situation.

Amendment No. 189AA proposes that when the local education authority furnishes the governing body with an annual financial statement it must also send a copy to the head teacher. That appears to be only reasonable but it is not included in the Bill.

Finally I turn to Amendments Nos. 201C and 201D. I realise that it is not cricket to throw in these amendments because they are not anticipated by Members of the Committee. However, I hope that time will be saved. The amendments make the same point and relate to the procedures for the selection of staff of the school. Clause 37 is worded in such a way that the governing body and its selection panel may carry out the whole process and make all the decisions in appointing staff without involving the head teacher in any way. It would be extremely foolish to do so but it might. Again I have consulted the National Association of Head Teachers. These amendments contain what we regard as essential safeguards.

The form of the amendments may not be perfect. As I said initially, I do not intend to press them this evening. However, I hope that my noble friend will agree that each amendment makes an important point. Perhaps she will take them away and look at them carefully. She may even come back with her own amendments at a later stage. The head teachers' role in this part of the Bill is crucial. To leave anything to doubt on the face of the Bill in respect of these aspects appears questionable. I beg to move.

Baroness Young

I, too, have attached my name to this series of amendments. I have discussed this with the representatives of the National Association of Head Teachers. I entirely agree with what my noble friend Lady Carnegy has said. Indeed, I believe all sides of the Committee agree about the extreme importance of teachers under this Bill and of head teachers in particular—men and women. I hope that there will be more women heads of school.

At this late hour I do not wish to repeat the arguments, but I hope that the Minister will look very carefully at these amendments. Certainly to a non lawyer reading parts of the Bill, it sometimes gives the impression that the only people to be consulted are the governors and not the head of the school. It is very important that the head should be completely involved in the school because at the end of the day he or she will carry a large measure of the responsibility. Therefore, I believe that those points need to be looked at very carefully.

Baroness Seear

I, too, should like briefly to support these amendments.

Lord Kilmarnock

This seems to me to be a very sensible series of amendments. They are of a nuts and bolts nature, but at this stage of the Bill it is very important that the nuts and bolts work. I support the amendments.

Baroness Hooper

The Government fully recognise the vital importance of the head teacher, and indeed other senior staff, being fully involved in the decisions of the governing body under a scheme of financial delegation. That partnership will be the cornerstone of any successful scheme. But the partnership must be based on trust. The 1986 Act already provides for head teachers to be members of the governing body, except where they choose not to be. We expect that increasingly head teachers will exercise their right to be members. Even where they do not, the school government regulations give a head teacher who is not a member of the governing body the right to attend any of its meetings. So heads will be fully involved with the decisions of the governors. This existing framework offers as good a guarantee that the partnership will work as it is possible to provide through legislation.

Turning to the specific point raised in the first amendment, I would point out to my noble friend that Clause 26(4) already requires the governing body to consult with the head teacher, where he has chosen not to be a member of the body, on the LEA's proposals for making a scheme of delegation. The additional consultation requirement imposed by the amendment is redundant, and would simply impose the added burden on the LEA of doubling its number of formal consultees.

The second amendment seeks to ensure that the head teacher will not incur personal liability for anything done in the exercise of his delegated authority under a scheme. That is clearly desirable. But, as an employee, the head teacher is in a different position from lay governors. As now, the employer will be liable for anything a head teacher does in the course of his employment. That will of course include running a delegated budget. The same protection is not available to governors—who are agents, not employees of the LEA under a scheme—and hence Clause 26(5) is needed to make it clear that they are also protected. In either case, acting in bad faith would expose the individual concerned to liability.

The third group of amendments relates to the procedure for withdrawal of delegation. The head teacher will be at the sharp end of any problems, and his views will be of particular relevance. Nonetheless, the framework I have already described should be well capable of taking his views into account. He or she will either be a member of the governing body, or choose only to attend particular meetings. Either way, he or she will have access to notifications given by the LEA and will be in a position to make his or her views known. The amendment would not in practice confer any extra rights on the head.

The last amendment is designed to make sure that the head teacher receives a copy of all financial statements produced by the LEA. That is clearly desirable. But Clause 34(9) already provides for the statement to be made available in the school free of charge, and the governors must also include a copy or summary of a statement in their annual report. There is therefore no question of the head, teachers, other staff or parents being denied access to financial information. In the light of the protection that already exists I hope that my noble friends will be reassured and will feel able to withdraw this amendment. Indeed, they have already indicated that they will do so. I have noted my noble friends' concerns and I will continue to ensure that they are well covered.

Baroness Lockwood

I am rather surprised by the Minister's response to this series of amendments, which I certainly support. Does the Minister agree that even if a head teacher is a member of the board of governors he or she may have a particular viewpoint based upon his or her professional standing and therefore should be consulted as of right as a head teacher? That is a point that ought to be borne in mind.

Baroness Seear

The Minister made the extraordinary suggestion that, as matters stand, the board of governors could appoint staff without consultation with the head teacher. I cannot imagine anything more ridiculous.

Baroness Carnegy of Lour

I am not altogether happy with the reply of my noble friend. I do not believe she has picked up the point I was making, probably because I did not make it very well and it is late in the evening. As regards the first amendment, she said that the governing body has to consult the head teacher before it responds to the scheme for financial delegation. I said that that was so, but my point was that when the LEA originally consults the governing body before it draws up the scheme for financial delegation, it does not have to consult the head teacher. That is the flaw. I hope the Minister will look at that matter.

The point is not that, by implication, these matters are all right but that it would be possible to implement measures without the head teacher being involved in a politicised situation where, for whatever reason, the authority wants to bypass the head teacher who is annoying it or the governors are annoyed with their head teacher and they want to bypass him. I know from experience that this can happen and all the matters that I raise result from my experience and, I believe, from the experiences of other Members of the Committee.

Will the Minister consider not rejecting this out of hand, and will she look very carefully at what has been said? I am sorry that I threw in the other two amendments and that I did not inform the Minister I was going to do so. Perhaps she will look at those too. I thought it might stop us having to go through them this evening, as they are right at the end of the amendments that we hope to cover. Can the Minister give me an assurance that she will look at that before I withdraw the amendment?

Baroness Hooper

Yes. I should have thought that a head teacher who is a member of the board of governors of a school would be aware of all that is going on to the extent that he or she desires. Nevertheless, I agree to look further at these amendments to ensure that all the concerns of my noble friends are covered.

Baroness Seear

The noble Baroness has missed the point. It is not just being or not being a member of the board of governors; the head teacher in her role as head teacher, and not because she is a member of the board of governors, should be consulted and involved in all these decisions.

Lord Harmar-Nicholls

Can my noble friend interpret a little further what she means in terms of getting the Bill through to its next stage? My noble friend said that she will take into account what was said by her noble friend in moving these amendments. My noble friend said that she will give further thought to them. Does she mean that she hopes that at a later stage the provision can be inserted in the Bill in some way which will perhaps make specific the points that have been made during the course of the debate? Is that the interpretation to be put on what she said?

11.15 p.m.

Baroness Hooper

Perhaps I may clarify the position. My noble friend's concerns are covered in the Bill as it stands, but I undertake to look at the matter again to ensure that that is so.

Baroness Carnegy of Lour

It may be that my noble friend will find that this matter should be set out in guidance, but the points have to be covered somewhere. Not all head teachers will decide that they want to be governors. My own view is that they get on very much better if they are not governors. The head teacher who sits back while the governors meet, without a vote but as their principal adviser, and now as chief executive, may well be in a much stronger position to carry out his or her role. This point needs to be considered. It is very late and we still have a long way to go. For the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 26 agreed to.

Lord Irvine of Lairg moved Amendment No. 181AB: After Clause 26, insert the following new clause:

("Access etc. to school facilities.

—(1) Every governing body required to be covered by a scheme shall prepare and adopt a written policy in respect of the use of the facilities of the school by the local community within guidelines established by the local education authority under subsection (2) below.

(2) The local education authority shall publish guidelines for governing bodies for the purposes of securing the effective implementation of this section.

(3) The policy of the governing body shall include a statement of the practice to be followed in respect of allowing access to and charging for the use of school facilities by local voluntary and community organisations.

(4) The governing body shall consult such voluntary and community organisations as appear to it to be concerned before adopting the policy.").

The noble Lord said: I speak only to the first amendment in this grouping, Amendment No. 181AB, in the place of my noble friend Lord Morton of Shuna who is temporarily laid low.

The amendment concerns the use of schools by local communities. It is well known that school premises are used for a broad range of purposes and by a wide variety of groups. I give a few examples. I think of recreation and leisure, youth groups and clubs, sports clubs, adult education in all its forms, public events—from village fetes to public meetings on all manner of subjects—and many other meetings ranging from regular committee meetings to groups with particular interests or hobbies.

The local school operates as a valuable resource for the whole community. It enables people to come together at times that are most appropriate—evenings and weekends—and, rightly, at little or no cost to themselves. In some cases, particularly in rural areas, the school provides the only available meeting place. It is at the very centre of local activity.

Some schools have carried the process further. Instead of merely allowing access to facilities designed basically for school use, they take community use into account when developing their facilities. I do not see that the Bill takes any account of the need for schools to be accessible to the community. I hope that on consideration the Government will wish to ensure that it does.

A danger to community use comes from increasing pressure on governing bodies to maximise revenue. This could lead to schools taking a strong and inappropriate value-for-money line in charging for the use of school premises, ignoring the less tangible but nonetheless real value to the community of access to facilities. I hope that the Minister who is to reply will feel able to say that the Government will give sympathetic consideration to this amendment.

The purpose of the new clause is to ensure, first, that local education authorities provide guidelines on community use of schools to assist governing bodies in the local education authority area in developing appropriate policies on access to, and charging for, the use of school facilities by voluntary and community organisations; and, secondly, that governing bodies should consider the matter of community use of schools in full consultation with representatives of the groups that may be affected, so that they are fully aware of the consequences of any decisions they make on access to, and charging for, use of school premises.

I hope that the Government will find this amendment not only unobjectionable but positively beneficial. I look forward with hope, as well as my usual interest, to what comes from the Front Bench opposite. The procedures envisaged by the amendment should ensure that any decision on the use of school premises taken by governing bodies is taken with the full knowledge both of present use by voluntary and community groups and of the implications of any changes that may be under consideration. The amendment would also ensure uniformity of practice among schools in a local authority area. It would emphasise the wider role of the schools as a community resource and would ensure that that role is taken into account by school governors when carrying out their responsibilities. I beg to move.

Baroness Faithfull

I support the amendment but nevertheless I have to sound a note of warning. All my working life I have tried to use schools for community purposes—for clubs and for all types of outside activities—but one is always up against the caretakers. Therefore, unless we take into account the fact that more money must be paid out to a deputy caretaker, we shall never have the use of the schools. That factor has always stood in the way.

Baroness Seear

I very much want to support what has been said from these Benches and the caveat from the noble Baroness, Lady Faithfull. I hope that the Government fully realise how important community groups are with the variety of work carried out by the voluntary bodies on which we rely increasingly, and how valuable they are to the people who take part in such activities. Without access to free, or nearly free, accommodation a great many of these groups would never be able to start and many of those which have started would fade away. Therefore I hope that the Government will agree to the amendment.

The Earl of Swinton

I support entirely what my noble friend Lady Faithfull said. In my involvement with schools I have tried as a governor and in the local community to get places opened up. It is always the caretaker who does not want his beautifully polished floor ruined by people coming in and playing badminton or something else in the evening. I say caveat caretaker!

Lord Taylor of Blackburn

There is a further point which worries me. One of the things we are doing in the Bill is encouraging governors to have control over their own expenditure. That is only right and proper. Nevertheless, I am afraid that governing bodies might decide that they now have a policy for charging every voluntary organisation an excessive amount of rent for the use of certain premises, which would mean that some voluntary organisations, with no finance at all, would be unable to use those schools. In my view such points have not been properly thought out and I ask the Government to think seriously about them.

Lord McNair

Amendment No. 185A has been grouped by the powers that be with the amendment that the noble Lord, Lord Irvine of Lairg, has just so ably moved. Therefore I take it that I should speak to it now.

I start with the subject of a school's budget share, which will be expressed as a formula. Clause 30(2) says that the word "formula": includes methods, principles and rules of any description, however expressed", and that gives all concerned a pretty free hand. However, in Clause 30(3)(b) a note of caution can be faintly heard. It provides that the formula, may include provision for taking into account any other factors affecting the needs of individual schools which are subject to variation from school to school". I ask the Committee to please note the word "may"; it means that the formula may or it may not.

Clause 30(3)(a) obliges the local education authority to take into account, the number and ages of registered pupils". Indeed, how could it fail to do so? However, it may consider other factors. The amendment to which I have my name lists some of those other factors.

I understand that the Secretary of State has published a draft circular which lists those services that he intends to describe as mandatory and those that he will allow an LEA to include in its scheme if it wishes to do so. I only heard about that circular this morning, and I apologise to the Committee for not having read it.

I understand that the LEAs must take into account the number of sixth form pupils—that is the first on my list of items that must be taken into account—but the question is the weighting to be given to the different subject choices. All sixth form teaching is expensive, but it is much more expensive to teach science than, for example, English or history.

I am told that the circular suggests that additional costs may be provided for small schools, which is right, but that no account must be taken of the state of repair of the buildings, and that seems extremely unfair. The state of repair varies dramatically from one school to another, chiefly according to the age of the building.

Sub-paragraphs (iii) and (iv) of the amendment refer to staff. Most of the money for the training of staff comes from essential government grants which are excluded from the schemes and formulae. It is surely difficult for an LEA to take full and proper account of all the variable factors. One school may have a higher than average number of probationary teachers; another may have to engage in more redeployment of teachers than the average. Reliance upon averages is invariably unfair.

Sub-paragraph (v) brings up the question of ethnic minority pupils. In some schools, but not all, such pupils will require not only extra help with English but education to literate standards in the mother tongues which they have picked up colloquially at home.

Sub-paragraph (vi) raises the difficult question of what is known as community education. We attach the highest priority to that subject, as did the noble Baroness, Lady Carnegy, before dinner.

The problem of costing the use of school buildings and facilities by non-school groups, whether youth clubs or adults, is difficult in the extreme. If governing bodies are forced to see such activities as competing with normal education for scarce money, what, we may ask, will their reaction usually be?

I have tried to draw the Committee's attention to some of the problems of imposing centrally a fixed scheme of financial management before there has been time to work out the best way to provide a sufficiently flexible local scheme. I beg to move.

11.30 p.m.

Lord Rochester

I too should like to support the amendment moved by the noble Lord, Lord Irvine, and speak to Amendment No. 119A which stands in my name and is in the same group of amendments.

There is no doubt that the delegation of certain financial responsibilities to schools and the establishment of grant maintained schools puts at risk current arrangements for the use of school premises by the statutory and voluntary youth service.

Perhaps I may speak as a member of the council of the Scout Association who for many years has been an office holder in the movement in Cheshire. At present thousands of scout groups and members of other youth organisations meet on school premises, the use of which they enjoy at no charge or at preferential rates. Scouts may be rather better at dealing with the problem of caretakers. I do not know. However that may be, if schools are now required to manage and to raise their own additional funds that could jeopardise, and perhaps force the closure of, some scout groups which meet in schools, especially if those schools ignore the arrangements which already exist with the local education authority, increase their own charges or make commercial lettings a priority. To illustrate more precisely what I have in mind, let us suppose that a scout group of about 15 boys meets in a school hall once a week for two and a half hours. Based on figures for some local education authorities, a charge of at least £6 per hour may, I understand, in future be made for the hire of the premises. That would mean that each boy would have to pay an extra £1 per evening for the hire of the hall, compared with an average current weekly subscription of 25p.

I realise that a number of objections may be raised to my amendment—that it is too detailed, its content is already implicit in earlier clauses of the Bill, that once financial responsibility for such matters has been delegated, schools should not have any constraints of this kind placed upon them, or that if anything is to be done to safeguard youth organisations in the way proposed it should be done by order in subsequent regulations.

With all those points in mind, my purpose at this stage is a limited one. It is to establish whether, in the overall national interest, the Government have sympathy with movements like the scouts in the predicament in which they may find themselves if the Bill is passed without an amendment of the kind proposed. Given such sympathy, all that then needs to be decided is how it can best be put into practical effect. I am sure that that is a matter that can easily be resolved in a generally acceptable way.

Baroness Lockwood

I should like to support the amendment of my noble friend. I know that the draft consultative document discusses this matter and leaves it open to local authorities to determine whether or not they will delegate such responsibility. I note that it says nothing in the scheme of financial delegation should restrict LEAs' freedom to issue such directions within the framework of the 1986 Act or to maintain existing community provision on school premises. I think the sentiments there are fine, but they are in a draft consultative document. I prefer to see them written on the face of the Bill, as my noble friend's amendment would provide.

I have some sympathy with the amendment of the noble Lord, Lord Rochester. I am not sure whether the wording of his amendment is correct, but I think we want to safeguard the low charges that have been placed on these organisations. That is not just for the Boy Scouts but also for the Girl Guides and right through the whole process to the senior citizens.

Lord Trefgarne

At the outset perhaps I may reassure the noble Lord, Lord McNair, that the draft circular does not rule out an LEA taking account of the repair of schools or, for that matter, any other factor that it considers relevant. What paragraphs 54 and 55 do is to give guidance on factors which the Secretary of State thinks are particularly relevant. But the noble Lord may be assured that providing funds for repairs, for example, is certainly not ruled out.

This group of amendments deals with a number of special factors which the LEAs might take into account in allocating resources to schools and making arrangements for community and youth provision. Amendment No. 185A lists six specific items, including provision for community use of schools which the LEA would be required to take into account in its resource allocation formula, while the new clause and Amendment No. 189A relate specifically to arrangements for community and youth provision.

Perhaps I may turn first to Amendment No. 185A. This seeks to prescribe a list of special factors which LEAs may include in the formulae which they devise as a basis for determining the budget shares of schools covered by a scheme of delegation. The Government would not want to rule out any of these factors being taken into account by LEAs in devising their formulae. But it would be wrong to prescribe them on the face of the Bill.

The Government have made clear that they do not intend to impose a uniform scheme of delegation on authorities and the Bill does not therefore prescribe in detail the content of formulae. The essential aim of delegation is that the available resources should be allocated among schools on the basis of each authority's own formula, derived from an assessment of local needs and circumstances. To include a detailed list of the kind proposed here would unnecessarily constrain the freedom of authorities, in consultation with their schools, to judge for themselves those factors which they wish to reflect in their formulae.

Also to list just these factors would imply that other factors which might account for differences in costs between schools could be ignored. For example, the list does not refer to children with special educational needs; there are likely to be additional costs in catering for these pupils. Our earlier debate made it clear that the Committee would not wish to see the needs of this group in any way devalued.

For their part the Government have made clear that, if delegation is to be successful in enabling parents and the wider community to see how money is being spent, the formula should be simple and clear. If the legislation laid down a large number of detailed factors for consideration, this would encourage authorities to devise more complicated and less accessible formulae which would not necessarily be any more equitable in their effect.

Clause 30(3)(a) requires that the central determinant in the formula shall be pupil numbers, weighted for differences in age. Sub-paragraph (i) of this amendment will therefore automatically be taken into account.

The draft guidance on financial delegation discusses the basis for the formula in paragraphs 53 to 56. A number of the items listed in Amendment No. 185A are covered. The draft makes clear that the Secretary of State will expect the formula in particular to reflect the additional costs of children with special educational needs and the additional teaching costs of small schools. It also indicates that the formula may provide for different subject weightings within sixth form provision.

The amendment also refers to the use of the schools by community organisations. I should point out that adult provision and youth service provision are not part of the schools budget and cannot therefore be included in an LEA's formula. The draft guidance does however make it clear that LEAs will be able to maintain existing community provision in schools under schemes of financial delegation.

Turning to the new clause and Amendment No. 189A, this last point applies equally to that new clause and to Amendment No. 189A in the name of the noble Lord, Lord Rochester. The new clause relates to the use of the school premises by voluntary and community organisations, yet requires the governing bodies of all schools covered by a scheme to draw up a policy on the community use of school premises within the guidelines set out by the LEA and after consultation with community interests. Amendment No. 189A provides for conditions imposed by a scheme to include the continuance of current arrangements for free or subsidised provision of facilities for the statutory and voluntary youth services.

The Government entirely agree with the sentiment behind these amendments. Nothing in schemes of financial delegation should restrict LEAs' freedom to maintain existing youth or other community provision on school premises, but this part of the Bill is not the vehicle for that. As I have said, provision for community activity does not form part of the schools budget and cannot therefore be covered by schemes of delegation as defined in this chapter.

Most of the safeguards sought by the amendment are already provided for through existing legislation. Under Section 42 of the 1986 Act the LEA has power to issue directions to the governing body of county and maintained special schools on the use of school premises outside school hours. That may include directions and guidance to schools on charging and letting policies in return for which the LEA will need to compensate the school for the additional costs it incurs.

Section 22 of the 1944 Act provides for the LEA to have power to issue directions in certain circumstances as to the use of voluntary school premises outside school hours for the education or welfare of young people. Section 30 of the 1986 Act requires the governing body of a maintained school to include in its report a description of the steps taken by the governors to develop or strengthen the school's links with the community. These issues are covered in paragraphs 82 and 83 of the draft guidance on financial delegation to schools. These make it clear that community provision at subsidised rates can continue under schemes of delegation. I hope that I have been able to reassure all the noble Lords who have spoken in connection with this group of amendments and that they will not be pressed.

Lord Irvine of Lairg

The response of the noble Lord the Minister will cause great disappointment to voluntary organisations throughout the country. In fairness to the noble Lord, he did not rely upon the caretakers' point. I well remember some years ago when Haringey closed its schools due to a caretakers' strike, and what was said about that by the political friends of the noble Lord. There is, of course, a practical problem about the caretakers but they cannot determine the use that is made of the schools.

I must say that I am disappointed and had hoped for a more positive response and a willingness to require a policy to be adopted on this subject by every governing body in line with uniform guidelines published by local education authorities. The noble Lord asserts that he agrees with the sentiment behind the amendments, but then says that he proposes to do nothing about them. He says that there is some inappropriateness, which we cannot see, in dealing with this matter as it should be expressly in this part of the legislation. However, at this hour of the night I am not minded to test the opinion of the Committee. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Clause 28 [Delegation to governing body of management of school's budget share]:

Baroness Seear moved Amendment No. 181B:

Page 25, line 6, at end insert— ("(2A) It shall be the duty of any governing body to which a scheme of financial delegation applies under this chapter to exercise its functions under that scheme having regard to any policy relating to equal opportunities published by the local education authority and within the limits of any existing statutory duty in relation to any curriculum statement issued by that authority.").

The noble Baroness said: I should like to move this amendment which, as your Lordships will see, is to ensure that policies relating to equal opportunities which have been promulgated by local authorities shall be carried over as a duty by the governing bodies. The point is that such policies in many cases go beyond the minimum legal requirements; otherwise, there would be no necessity for an additional clause of this kind.

Progress has been made in a number of areas by progressive and rational equal opportunities policies. I am sure that Members on the Government Benches may also be able to think of some local authorities whose policies were not perhaps as rational and practical as they might have been. But that should not blind them to the fact that positive policies of the kind that have been promulgated have had very good effects in an area in which a great deal of work still needs to be done. I beg to move.

Baroness Lockwood

My name is also appended to this amendment and I should like to support it. There are two aspects of equal opportunities policies in which local education authorities are involved. One is the educational side, and under the Sex Discrimination Act 1975 local education authorities have a general duty to ensure that there is provision of educational facilities without discrimination for both boys and girls. It is important that the work that has been done in that sphere should be carried on by schools which have been given financial responsibility. The second aspect is the employment one and, again, many education authorities have drawn up equal employment policies for the staff in their educational institutions.

It is not possible for the Equal Opportunities Commission to deal individually with every school. However, during the last 13 years it has built up relationships with local education authorities. If some of the schools which have been given financial responsibility were to withdraw from the positive approaches which they have undertaken, it could leave a gap in the equal opportunities policy. I therefore hope that the amendment will be accepted.

11.45 p.m.

Baroness Hooper

The Government support the general intention behind the amendment. However, we believe that its aims are adequately provided for in existing legislation. By seeking to enforce the curriculum through schemes of delegation, the amendment risks upsetting the balance which the existing provisions were intended to create.

The amendment overlaps with the provisions of the 1986 Act, which provides for the local education authority to make a statement of its curricular policy and for governors to have the power to modify the statement for their school. It is not appropriate to seek to use schemes of delegation to constrain the freedom of governors to modify the local education authority's curricular policy. Also, governors will remain subject to the requirements of existing legislation to prevent discrimination on grounds of race or sex both in the curriculum and in other areas.

The governors of all schools, including those without delegated budgets, will have specific duties on the national curriculum under Clauses 1 and 6 of the Bill. In particular, they will have a duty under Clause 6(1)(a) to exercise their functions with a view to securing the implementation of the national curriculum. They will also have a range of other curricular duties under the provisions of the 1986 Act. The draft guidance issued by my right honourable friend makes it clear that schemes of delegation will operate within that framework of statutory duties.

Given the extensive protection already built into the Bill and existing statute, as well as the terms of the draft guidance, I hope that the noble Baronesses will feel able to withdraw the amendment.

Baroness Seear

I do not find that answer satisfactory in the least. The noble Baroness is confusing the enforcement of a purely—the noble Lord, Lord Trefgarne, is looking at me questioningly. A cat may look at a king? However, the noble Baroness is relying on legislation under the Sex Discrimination Act. The whole point is that many authorities have developed policies in amplification of their legal requirements. It is those policies that we wish to see continued. However, at this time of the night I do not propose to press the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 182 and 182ZA not moved.]

Clause 28 agreed to.

Clause 29 [Withdrawal of delegation]:

[Amendments Nos. 182ZB to 182F not moved.]

Clause 29 agreed to.

Clause 30 [Schemes: determination of budget shares]:

[Amendments Nos. 183 to 185 not moved.]

Lord McNair had given notice of his intention to move Amendment No 185A: Page 27, line 3, at end insert ("including—

1. (i) the number of sixth form pupils at the school;
2. (ii) the state of repair of buildings at the school;
3. (iii) any training needs of staff;
4. (iv) any special factors relating to staffing levels;
5. (v) any special factors related to ethnic minority pupils at the school;
6. (vi) community education and use of the school by community organisations.").

The noble Lord said: I apologise for any inaccuracies in what I have been told about the circular.

[Amendment No. 185A not moved.]

[Amendment No. 186 not moved.]

Baroness Faithfull moved Amendment No. 187:

Page 27, line 15, after ("description") insert— ("( ) expenditure on local education authority support services for special educational needs including a schools psychological service, child guidance services, education welfare service, and peripatetic teaching and advisory services;").

The noble Baroness said: The amendment falls within the group dealing with financial delegation. It is a probing amendment concerning services not directly concerned with the school; that is, outside services. If ILEA is disbanded, can my noble friend the Minister say what will happen in regard to the expenditure on local authority support services—for instance, those covering special education needs, including a school psychological service, and child guidance? Child guidance clinics, about which people know little, are an important part of the children's service. They consist of a psychiatrist, a psychologist and a social worker.

Difficulties arise because of the shortage of social workers in various parts of the country. A number of social workers are being withdrawn from child guidance clinics to work in social services departments which are thus able to carry out their statutory duties. If ILEA is disbanded, I fear that social workers will be withdrawn from child guidance services in London where there is already a shortage. It will be a question of robbing Peter to pay Paul. Given the number of cases of child abuse and emotionally disturbed children now being treated at clnics, this would lead to a difficult situation. Where would the expense fall in future?

The education welfare service is comprised of education welfare officers who deal mainly with truancy. These are the peripatetic teaching and advisory services. What will the local authorities do about them? I do not wish to press the matter. The amendment is a probing one. However, it would be useful if my noble friend the Minister could consider the matter. It is my intention to withdraw the amendment after hearing his reply.

Lord Trefgarne

The Government are fully committed to the intention behind the amendment. It is essential that the support services necessary for the effective delivery of education to pupils with special needs should be preserved under schemes of delegation.

The draft guidance issued by my right honourable friend makes it clear that schemes will need to make suitable provisions for pupils with special needs. Paragraphs 38 to 41 provide for local education authorities to have discretion to exclude the costs of specialist support services from delegation where they consider that this will lead to a more effective targeting of the needs of individual pupils.

I recognise that my noble friend raised some specific points. Perhaps she will allow me to write to her between now and the next stage of the Bill. If I am unable to give her a satisfactory response, she can raise the matter again at the next stage.

Baroness Faithfull

I thank my noble friend the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 188 not moved.]

Clause 30 agreed to.

Clause 31 [Schemes: provision for financial delegation:]

Baroness Cox moved Amendment No. 189: Page 27, line 31, after ("pupils") insert ("or following a request by its governing body").

The noble Baroness said: I should like to speak extremely briefly to this amendment. Many people have expressed puzzlement as to why Clause 31 as it stands excludes nearly half of all primary schools, in that those with fewer than 200 pupils are precluded from benefiting from financial delegation even if they wish to do so. The effect of this amendment would be to enable governors of these smaller schools to request that financial delegation be extended to them.

Very briefly, the arguments include first the fact that many small schools, especially village schools but also small schools in urban areas, would welcome the opportunity to manage their own affairs. Secondly, it is simpler to operate financial delegation for small schools because their affairs are less complex than those of larger schools. Thirdly, 200 is an arbitrary number and there will, therefore, be many borderline cases and schools may well move in and out of eligibility for financial delegation as their rolls change from year to year.

Fourthly, all local education authorities are required to set up schemes for financial delegation in any case, so the system is there and can easily be applied for further applicants.

In conclusion, perhaps I may point out that the report entitled Local Management of Schools, commissioned by the Government from Coopers & Lybrand, concluded that: if a small school thinks that the balance of advantage would lie with it having delegated powers, we can see no reason why it should not volunteer to have them". Therefore, many people could not really see any good reasons for not extending this financial delegation to smaller schools. The amendment is entirely within the spirit of the Bill and I and many people outside this Chamber would greatly value some explanation for Clause 31 as it now stands.

Lord Trefgarne

The Government have considerable sympathy with the intention behind my noble friend's amendment, which would allow primary schools with fewer than 200 pupils to opt in to delegation. We believe that the benefits of delegation should be extended to as many schools as possible. Pilot schemes have shown that all schools—including the smallest primaries (for example, in Northumberland)—can benefit from the freedom to target resources on their own educational needs and priorities.

But the Bill already provides scope for extending delegation to these schools. Clause 31(10) allows LEAs to propose to include small primaries in their schemes of delegation if they wish, and we expect that quite a few LEAs will indeed wish to include all primary schools in their schemes from the start.

Clause 33(1) empowers my right honourable friend to make regulations reducing the threshold for delegation to fewer than 200 pupils, or to extend delegation to all primary schools. Once there is more experience of voluntary delegation, my right honourable friend will consider making regulations requiring delegation to some or all small primary schools in all LEAs.

There is therefore ample scope for the inclusion of these schools when the time is right. But premature delegation could be worse than delay. The Government have taken the view, after extensive consultation, that all secondary schools and larger primary schools should be able to manage their own budgets. But smaller primary schools will have fewer management resources to call upon. It would not be desirable to extend delegation to such a school at an early stage if the LEA considered that it was not ready for it. Where the LEA agrees with the governors that delegation is appropriate, the present provision for voluntary extension of delegation will apply; and primary schools without delegated budgets will continue to receive financial information and the more limited delegation provided for in the 1986 Act.

I hope that my noble friend will feel reassured by what I have said and not seek to press her amendment.

Baroness Cox

I thank my noble friend the Minister for that sympathetic and helpful response. I am not certain that I entirely understand all the reasons for the delay but I am reassured and in the meantime beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 189A not moved.]

Clause 31 agreed to.

Clauses 32 and 33 agreed to.

Clause 34 [Publication of schemes and financial statements, etc]:

[Amendment No. 189AA not moved.]

Clause 34 agreed to.

Clause 35 agreed to.

Clause 36 [Staff employed by local education authority]:

[Amendment No. 189AB not moved.]

12 midnight

Lord Irvine of Lairg moved Amendment No. 189B: Page 31, line 28, leave out paragraph (b).

The noble Lord said: At the same time I shall speak to Amendment No. 190A. These amendments go to very important principles in the Bill. Despite the lateness of the hour they merit a detailed discussion in this Committee.

They concern Clause 36, and it is important to be precise about what Clause 36 sets out to achieve. The provisions of the 1986 education Act concerning the determination of the staff complement and the procedures for appointment, suspension and dismissal of staff will cease to apply. The new procedure which will apply is to be found in Schedule 2 to this Bill. Its effect is to leave the local education authorities as the employers but without any of the powers which any other employer in the country has.

Power is to be concentrated in the governors. They will recommend appointments, but the local education authority is obliged to act on their recommendation and appoint unless the individual does not meet certain staff qualification requirements. That is Schedule 2, paragraph 2(10).

Then paragraph 7 of the schedule gives the governing body and or the head teacher power to suspend on notification to the local education authority. On dismissal it is the governing body that will decide, and the authority is again obliged to act accordingly. That is Schedule 2, paragraph 8. Finally discipline too will become a matter for the governors. That is Schedule 2, paragraph 6.

The effect of Amendments Nos. 189B and 190A is to ensure that these powers remain where they properly belong, with the employers, the local education authority. Therefore these amendments involve a major question of principle.

The effect of Clause 36 is that local education authorities are divested in their continuing capacity as employers of the most basic powers associated with the employment relationship. The governors by these provisions are given powers without responsibility, whereas the local education authorities are saddled with responsibility without powers. In principle that must be wrong. Power and responsibility should go together. So I ask the Minister to tell us when replying what good reason there is for separating power from responsibility in this case. It is a basic question and it should admit of a clear answer. It is difficult to think of any larger insult that could be hurled by government at local authority than the insult that it cannot be trusted with the same powers as every other employer in the country.

The more diverse the bodies to which these powers of suspension and dismissal are given, the greater the disparity in their exercise, the greater the likelihood of inconsistency and the greater the unfairness—not just perceived unfairness but actual unfairness, because like cases should be treated alike. This is not just a point in support of collective bargaining, as it were. I am seeking to make the case for rational, orderly and consistent policies to be fashioned by the one body—the local education authority—with the best overall view of the needs of the particular area.

I now speak a word, not about school governors but about the present governors of our country. Clause 36 is an ill-judged reaction by government to a few isolated cases of alleged misjudgment by local authorities in their role as employers. But surely the most important attribute of government is a sense of proportion. It is a sense of proportion that is so signally lacking in these provisions. The remedy proposed by Clause 36 is to strip every local education authority in the country, the overwhelming majority of which are excellent employers, of the ordinary combination of rights and duties that every employer in this country has. In substance, each body of governors will become a law unto itself and such elementary virtues of government, indeed of employment, as uniformity, consistency and both the reality and the appearance of fairness will be casualties of the Bill.

So the argument in favour of these amendments is the maintenance of consistency of standards where local dislikes or prejudices may run high; and by "local" I mean in the schools or their governing bodies. Teachers should be subject to a body, a local education authority, which is sensitive to and knowledgeable of local issues, but is not dominated by any preconceived view. The local education authority can take a detached objective view based on a uniform policy throughout its area. Where, for example, there are disputes between teachers and governors on issues that could lead to suspension or dismissal then it is better that these issues should be dealt with by a body, a local education authority, which by definition can stand back from local pressure and feeling.

So on these grounds I commend the amendments because the responsibilities of an employer should not be separated from the powers of an employer and because the local education authority is much better suited to resolve in a detached and dispassionate way local disputes on which feelings may run high. I hope that the Minister, when replying to the debate that I hope these amendments will generate, will not simply intone that these two amendments are incompatible with financial delegation on the basis that financial delegation necessarily entails that everything must be delegated to the governors regardless of the other considerations to which I have called attention and regardless of the obvious appropriateness of certain powers remaining with local education authorities.

I sit down on the basis that these amendments give the Minister—either the noble Lord or the noble Baroness—a first-class opportunity to demonstrate flexibility and not rigidity; a first-class opportunity to demonstrate that the Government of whom each is a member are not opaque to reason on this subject. I beg to move.

Lord Trefgarne

These amendments concern the appointment and dismissal of staff at schools with delegated budgets, and procedures for suspension, discipline and grievance. They would retain various provisions on appointment, dismissal and suspension deriving from the Education (No. 2) Act 1986, and would strike out from the Bill the procedures in Schedule 2 which will regulate such matters when schools have a delegated budget.

It may be said that the 1986 Act was approved by Parliament not so very long ago, and that the procedures established under it have not even been tested. However, there is now a growing acceptance of the value of financial delegation to schools. An essential part of such local management is the management of staff.

It is against that background that one must look at the provision on staffing of the 1986 Act. It is true that that Act involved governing bodies in staffing matters to a greater extent than before. But it still left control with the LEA. The LEA could refuse to appoint a new head teacher chosen by a selection panel, or any other member off staff selected by the governing body. The LEA could appoint to a school, against the wishes of the governing body, any person already in its employment. The LEA could compel governors to end the suspension of a member of staff. And the LEA was responsible for dismissing staff or withdrawing them from the school, subject only to consultation with the governing body and the head teacher.

These arrangements simply would not give enough power to the governing body of a school with financial delegation. They would not have meaningful control over staffing matters. Therefore we have devised the arrangements set out in Schedule 2. They will give governors the power to select staff for appointment, subject only to the LEA checking their status against the teachers' regulations. Governors will establish discipline and grievance procedures and make them known to staff. Governors will have the power to suspend staff and to end suspension. In the rare cases where it will be necessary, governors will have the power to require the dismissal of a member of staff. In this way they will acquire the powers over staffing which we believe to be necessary, indeed essential, for the proper operation of financial delegation.

We strongly believe that governors must have sound professional advice when carrying out their new responsibilities on staffing. Therefore Schedule 2 provides for the head teacher and the chief education officer of the LEA or his representative to give advice on both appointments and dismissals. They will have the right of presence at all relevant proceedings and the governors will have to consider their advice before acting.

We accept also that there should be safeguards for staff under the procedures in Schedule 2. In response to concerns expressed by the teacher unions we introduced amendments in the other place which gave staff an explicit right to a hearing when their dismissal is being considered, and a right of appeal against a decision to require dismissal before that decision is transmitted to the LEA.

I hope that I have explained to the Committee's satisfaction why the procedures in Schedule 2 are an essential part of financial delegation, and must for that purpose replace the procedures laid down under the 1986 Act. I hope that the noble Lord will not wish to press the amendment, but if he does I must ask the Committee to reject it.

Lord Irvine of Lairg

At this hour of the night all that I can find to say about the noble Lord's response is that it was predictable. That is the only respect in which it has not disappointed me. It would not now be appropriate to test the opinion of the Committee, and accordingly I beg leave to withdraw the amendment. However, I give notice that emphatically the matter is of such great importance that we shall return to it on Report.

Amendment, by leave, withdrawn.

12.15 a.m.

Baroness Hooper moved Amendment No. 190: Page 31, line 43, after ("applies") insert ("and the determination of their duties, grading and remuneration").

The noble Baroness said: At the same time I shall speak to Amendments Nos. 196 to 201 which relate to the terms and conditions of non-teaching staff in schools with delegated budgets.

Paragraph 4 of Schedule 2 requires LEAs to appoint non-teaching staff to these schools on the recommendation of the governing body. The Government's concern is that governing bodies should have adequate discretion over the terms on which non-teaching staff are appointed. In order for financial delegation to be meaningful, governors need the discretion to decide on the duties and grading of a post, the hours for which a part-timer is employed and some aspects of remuneration.

Therefore, Amendment No. 196 defines governors as having discretion over certain specified aspects of terms and conditions. First, it starts from governors having discretion over the duties staff will be expected to perform, including, where the post is part-time, the hours of work. This is consistent with governors defining the complement of non-teaching staff and the nature of the non-teaching posts. It then requires governors to recommend a grade for the post from one of the scales of grades currently operated by the local authority. For example, this would give the governors discretion about the grade in which, say, a new secretary would be placed. Once they have chosen a grade the governors will be bound to respect the terms and conditions (such as leave and pension entitlement) which are attached by the authority to that grade. The amendment then specifies that where the authority has discretion over how much the person appointed should be paid, that discretion should be exercised by the governors: this could apply, for example, to the starting position on a salary scale for a new appointee.

We believe that this amendment strikes a proper balance between the need to give governors flexibility over the kind of appointment they make and the need to give reasonable assurance to staff about their terms and conditions. It will give governors a clear framework within which to recommend people for appointment.

The governors are already required to consult the head teacher and, in the case of posts involving more than 16 hours' work a week, the CEO, before selecting someone for appointment as a member of the non-teaching staff. Amendment No. 197 requires that there must also be consultation before the governors take decisions about the matters within their discretion under Amendment No. 196. We believe that this is an important safeguard for the LEA.

Amendments Nos. 198, 199 and 201 are technical and consequential. Amendment No. 200 simply requires LEAs to give effect to the governors' decisions on terms as required by Amendment No. 196. Amendment No. 190 is a paving amendment to Clause 36 which allows for these amendments to Schedule 2.

I commend these amendments to the Committee. They clarify the arrangements for appointing non-teaching staff in schools with delegated budgets and should result in a fair system for employees as well as giving the governing body the discretion it needs. I beg to move.

Lord Irvine of Lairg

I must say that sometimes I wonder whether the Government understand what they are doing. By this amendment they are seeking to carry further the process which I criticised when speaking to other amendments of divesting the local education authorities, as employers, of the powers that every other employer in the country enjoys. Powers to determine the duties, grading and remuneration of staff are to become subject to Schedule 2; namely, the province of the governors. It must be appreciated therefore that this is a far-reaching amendment.

We oppose it. These matters—that is to say the grading, remuneration and so on—should par excellence not be determined according to the subjective notions of each governing body. There must surely be a uniform policy consistently applied throughout the education authority. Nothing could be less desirable than to have grades and remuneration in schools which differ according to each governing body. In a profession where there is already serious dissatisfaction and unrest this amendment adds fuel to the flames. Non-teaching staff at one school will simply not understand or accept that those at a neighbouring school, doing identical work are receiving more pay and enjoying a higher grade. They will not understand or accept why that should be so. This new power which is to be added to the governors' powers is obviously inimical to ordinary collective bargaining.

The same employer—the local education authority—may well end up paying different pay for work of equal value. I ask the Minister who is to reply this question: Have the Government given any thought to the implications of this amendment under the equal pay legislation or Article 119 of the Treaty of Rome? Are not the governors being given powers which, when exercised, will put local education authorities under equal pay legislation liabilities or liabilities under Article 119? Have the Government thought about that and, if so, what precisely have they to say on this rather serious point?

Baroness Young

Is it not a fact that were these criticisms to be taken as they have been explained by the noble Lord who has just spoken, they would actually cut at the heart of financial delegation? The fact is that, broadly speaking, the cost of teachers is some 80 per cent. of the cost of schools. I may not be absolutely right about that percentage but that must be the approximate figure. What we have had before in financial delegation is financial delegation as far as it goes but excluding the employment of teachers. Therefore, if one excludes the employment of teachers one is not giving financial delegation to schools. I am sure that my noble friend can answer the specific legal points which must be covered, otherwise this amendment would be quite inappropriate. In its way this is a kind of wrecking amendment on financial delegation.

Baroness Seear

May I ask for clarification? Technically, under financial delegation, who will be the employer of the teacher or non-teaching staff? With whom will the contract of employment be made? Will it be the local authority which does the actual paying, or with the school? This is of extreme relevance to the point made by the noble Lord.

Baroness Hooper

We believe that these amendments flow naturally from the principle of financial delegation, as my noble friend Lady Young said. In making these appointments governors must have regard to a number of factors in deciding on the appointment and what grade to give to the post. Like everyone else, the governors will be obliged to act in accordance with general law, and in particular with the law on sex discrimination. In response to the noble Baroness, Lady Seear, the contract of employment for non-teaching staff, as for teaching staff, will be with the local authority which is the employer.

On Question, amendment agreed to.

[Amendment No. 190A not moved.]

Lord Irvine of Lairg moved Amendment No. 190B: Page 32, line 9, after ("costs") insert ("or any part of them").

The noble Lord said: I should like to speak also to Amendments Nos. 191 and 202. I commence with Amendment No. 190B. My first point is a drafting point and one which I hope the Government can accept. Clause 36(4) provides: Costs incurred by the local education authority concerned which arise from the dismissal or premature retirement of any member of the staff of any such school shall not be met from the school's budget share for any financial year unless the authority have good reason for deducting those costs from that share". With the provision as presently drafted, it may well be that the local education authority can deduct the whole of the cost where it has good reason for doing so but cannot make an apportionment, as it were, and deduct only part of the cost if it thinks that that is the appropriate solution. This amendment, which I hope the Government can accept, gives greater flexibility to a local education authority in allowing it to deduct part only of the cost. I hope that the Government will see the merit of the amendment and accept it.

Amendments Nos. 191 and 202 go to a quite separate point. For this reason the grouping is not a particularly happy one, but I shall speak to these amendments as well. The three lines at the end of subsection (4) of Clause 36 mean that, if, in breach of a no-redundancy policy of the local education authority, someone is dismissed because of redundancy, the costs of the redundancy cannot be allocated to the school budget. The school does not have to pay for redundancies even if those are in breach of local education authority policy.

Amendment No. 202 is the mirror image of Amendment No. 191. The last three lines of Clause 37(11) provide: The fact that the authority have a policy precluding dismissal of their employees by reason of redundancy is not to be regarded as a good reason for the purposes of the preceding provisions of this subsection". The purpose of Amendments Nos. 191 and 202, therefore, is to reverse this. If a school dismisses in breach of local education authority policy on redundancy, the policy can be enforced by attributing the cost of the redundancy to the school's budget share. The case for the two amendments is that local education authorities, which, as the noble Baroness has been good enough to confirm, are undoubtedly the employers in law, should be allowed to enforce any no-redundancy policy by attributing to the school's budget the cost of the redundancies where they are carried out in breach of the local education authority policy.

I appreciate that Amendments Nos. 191 and 202, to which I have just spoken, are controversial. However, I hope that Amendment No. 190B can be approached on a different basis, because it is designed to create more flexibility in a provision of the Bill that is otherwise not challenged. I beg to move.

Lord Rochester

In supporting Amendment No. 190B, I too should like to apeak to Amendments Nos. 191 and 202, which are grouped with it and appear under my name. As the noble Lord, Lord Irvine of Lairg, said, if the words contained in lines 10 to 12 of subsection (4) in Clause 36 and the corresponding words in Clause 37 are not omitted from the Bill, they could result in a school's governing body making an employee redundant at the expense of the local authority, even though the authority's policy is that there should be no redundancy, or only redundancies that are voluntarily accepted. Thus agreements that have been freely negotiated between local authorities and their employees that there should be no compulsory redundancies can be undermined.

That is a good example of the way in which power and responsibility are being separated by the Government under Clause 36 in the way so eloquently described by the noble Lord. I too should like to know what justification the Government have for permitting this to happen.

Lord Trefgarne

Subsection (4) of Clause 36 is concerned with the allocation of costs incurred by a local education authority which arise from the dismissal or premature retirement of any member of staff. The subsection provides that the costs which arise in such cases shall not be met from the school's budget share for any financial year unless the authority has good reason for deducting those costs from that share.

Our assumption has been that there may be cases where the LEA decides that some but not all of the costs should be met from the school's budget share. Amendment No. 190B writes into the Bill itself after "costs" the phrase "or any part of them". There is no need for this amendment as the drafting of the Bill, by referring to costs rather than "the costs", already provides for the possibility that the LEA might decide that only some of the costs would be deducted from the school's budget share.

I now turn to Amendment No. 191. The second part of subsection (4) states that the fact that an authority has a policy precluding dismissal of its employees by reason of redundancy is not to be regarded as a good reason for deducting redundancy costs from a school's budget share. Amendment No. 191 would delete the second part of this subsection.

This part of the subsection puts an important constraint on the good reason that can be used by an authority for requiring costs to be met from within a school's budget share. The deletion of this part of the subsection by Amendment No. 191 would mean that an LEA could refuse to pay the costs of a dismissal resulting from redundancy merely because it had a no-redundancy policy. It could claim that its policy in itself was good reason to refuse to pay costs.

There are cases where LEAs decide on principle that to make people redundant is always wrong. We do not regard that as an acceptable reason for the LEA to refuse to pay costs outside the delegated budget. Under financial delegation the governing body will be responsible for managing the staff of the school. It may on occasion be necessary, for example, to reduce the number of staff working at a school because of falling rolls or to change the mix of teachers because of a change in emphasise in the school curriculum. In those circumstances it must be open to the governing body to decide that someone needs to be made redundant.

Amendment No. 181 would not actually stop governing bodies from being able to determine that someone should be made redundant. However, having to meet the costs of redundancy from within the school's delegated budget could in turn create further redundancies.

We believe that the second part of the subsection as it stands is necessary for the good management of schools. It must be for LEAs to consider each case on its merits. We do not accept that they should be able to decide on the attribution of costs purely on the basis of a blanket no-redundancy policy.

Amendment No. 202 is identical to Amendment No. 191 in suggesting the deletion of the same sentence from Clause 37, which deals with aided schools. We oppose this amendment for the same reasons that I have already referred to.

Lord Irvine of Lairg

As I expected, Amendments Nos. 191 and 202 are controversial. The Government disagree with them, and it would not be appropriate to test the Committee's opinion on those subjects tonight. Therefore I shall not move those two amendments. However, I am distressed at the inflexibility and rigidity that the noble Lord has shown in relation to Amendment No. 190B. I spend my life construing documents, and I believe that my noble friend Lord Morton of Shuna does likewise. I do not agree with the advice that the noble Lord has received. I am reinforced in my view by the knowledge that my noble friend Lord Morton of Shuna agrees with me that there is every likelihood that the courts would construe the word "costs" as meaning the whole sum incurred by the local authority in that way.

If there is any doubt about the matter, and if it is intended by the Government, as the noble Lord says, that part of the costs can be deducted, I see no reason why we cannot just write into the Bill the words in the amendment to which the name of my noble friend Lord Morton of Shuna appears so as to put the matter beyond doubt. It will do no harm, and if it were right it would do good in the sense that what the Government say they want to achieve will undoubtedly be achieved. I press the noble Lord to say that he will at least further consider the advice that he has apparently received on this point.

Lord Trefgarne

If it would help the noble Lord, I shall consider whether the wording can be clarified. I believe that it means what I said it means, but if the noble Lord would like me to consider it further I am happy to do that.

Lord Irvine of Lairg

I am most grateful. I have no doubt that the noble Lord believes that the wording means what he says. I hope that having heard what I have said he will at least have some doubt and question those who are advising him. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 191 not moved.]

Clause 36, as amended, agreed to.

Schedule 2 [Appointment and dismissal of school staff, etc., during financial delegation]:

[Amendments Nos. 191A to 193 not moved.]

Baroness David moved Amendment No. 193A: Page 178, line 47, after ("three") insert ("but not more than five").

The noble Baroness said: In speaking to this amendment I shall speak also to Amendments Nos. 193B, 194A, 194B and 194C. This is an important group of amendments which addresses directly the process whereby head and deputy head teachers are appointed under the Bill. The Committee knows that the Bill, as currently drafted, gives the power to control the appointment of head teachers to the governing body while retaining the employer role for the local education authority, which is what we have just been talking about.

Schedule 2 sets out the process whereby the governing body appoints a selection panel, consisting of at least three of its members, to interview and to make a recommendation to the governing body. If that recommendation is approved by the governing body the applicant is recommended to the local education authority for appointment. The local education authority is obliged to appoint that person as head teacher or deputy head teacher unless, under the terms of paragraph 11 he does not meet a staff qualification requirement applicable in relation to his appointment.

The provisions illustrate the absurdity of divorcing the role of the employer from that of appointment. The amendments set out to produce a fair balance between the interests of the local education authority and those of the governing body, while accepting the broad intention of the Bill to increase its role in this area.

The amendments propose that the selection panel should contain an equal number of representatives of the governing body and the local education authority, numbering between three and five in each case. The panel should meet to interview applicants and make a recommendation to the local education authority as to the applicant whom it considers should be appointed. The education authority would then be bound to consider the appointment of that person. It is important to stress, however, that the amendment would remove the obligation of the local education authority to appoint the person recommended by the panel. This is surely essential if the education authority is to remain the employer.

It is difficult to think of another instance of an employer who is disbarred from the right to appoint and dismiss staff. It would be useful if the Minister could supply examples and point to the benefits which the Government believe could accrue in this area.

The logical position for the Government to adopt in giving control of staffing under local financial management to governing bodies would be to make the governing body the employer in all cases. The fact that this is impractical for financial as well as organisational reasons is testament to the poorly thought out nature of the proposals. Such a significant devolvement of employment opportunities would also substantially prejudice the job prospects of teachers seeking to move from one area to another or between schools.

The Government have attempted, however, a compromise to which it will be very difficult to give effect in practice. The amendments seek to produce a fairer system for interviewing head and deputy head applicants in the interests of the effective implementation of the legislation. These of course are very closely linked to what my noble friend Lord Irvine has been talking about. This is an effort to make the situation slightly better and slightly fairer to the LEA as the employing body, and I hope that the Minister will look kindly on the amendment. I beg to move.

Baroness Hooper

Paragraph 1 of Schedule 2 sets out the arrangements which apply when a head teacher or deputy head teacher is to be appointed. These arrangements require that the governing body shall notify the LEA of the vacancy in writing before taking any steps, and that before recommending any person for appointment the governing body must advertise the vacancy in publications circulating throughout England and Wales.

The governing body is required to appoint a selection panel consisting of at least three of its members. The selection panel is required to interview such applicants for the post as it thinks fit; where it considers that it is appropriate to do so recommend to the governing body for appointment one of the applicants interviewed by it; and if its recommendation is approved by the governing body, recommend the applicant in question to the authority for appointment.

Throughout this procedure the governing body will have expert professional advice. Under paragraph 3 of Schedule 2 the chief education officer is entitled to attend, for the purpose of giving advice, all proceedings of the governing body and of any selection panel which relate to decisions about the appointment of a head or deputy head.

We do not regard the amendments proposed by the noble Baroness, Lady David, as consistent with the necessary consequence of financial delegation that governing bodies should have the responsibility for selecting their staff. Amendments Nos. 193A and 193B would mean that the selection panel would have to consist of equal numbers of LEA nominees and governors with an overall size of between six and 10. Amendments Nos. 194A and 194B would remove any role for the governing body itself in deciding whether to accept the recommendation of the selection panel.

Under the existing wording of paragraph 1 the authority is required to appoint the person recommended by the selection panel unless that person fails to meet specific staff qualification requirements set out in regulations made under Section 27 of the 1980 Act. The effect of this provision is that the LEA is under a duty to appoint the governing body's recommended candidate other than in very specific circumstances. For example, the LEA could refuse to appoint someone if he or she was not a qualified teacher. Amendment No. 194C would mean that the LEA would not be required to appoint the governor's recommendation but would only have to consider the appointment of the recommended teacher.

We believe that these amendments should be rejected as they water down in an unacceptable way the responsibility upon a governing body for selecting the person for appointment to a head or deputy post.

Baroness Seear

The last thing I want to do is argue this matter at this time of night, but the Minister has said that the amendment is not compatible with the authority necessary for the governing body under local financial management. What she has not answered, because it has not been thought out, is how the Government's proposals are compatible with the fact that the LEA remains the legal contractual employer. This is a real difficulty. We ask the Government to take this matter back and think about it again.

Those of us who are keen on local financial management—that certainly includes those on these Benches—are not trying to catch the Government out. But we are saying very seriously that this is an unresolved problem which at a more suitable moment in the 24 hours of the day we should like to hear discussed in much greater detail. We hope it can be resolved.

Lord Irvine of Lairg

It was notable in replying to the debate on earlier amendments which were moved that the Minister did not reply to the point that I raised in relation to the Equal Pay Act and Article 119 of the Treaty of Rome.

She did not reply adequately for the good reason that one governing body will not have the least idea of the pay, the conditions and other terms of service being fixed by another governing body of another school in another part of the local education authority. Because of this detachment of power from responsibility in a really unsought way governors, through no fault of their own, are very likely to run into breaches of the Equal Pay Act and/or Article 119 of the Treaty of Rome.

It is simply not good enough to say blandly that the governors will comply with the sex discrimination laws. They will not have the information or the means at their disposal to do so unless every time they fix someone's terms and conditions of appointment they then conduct a survey of what is happening in all other schools.

Baroness Hooper

I can only say to that that any employer who runs a small business and has to employ someone must be in the most dreadful difficulties.

Lord Irvine of Lairg

With respect, the noble Baroness has totally missed the point. The problem arises because the local education authority remains the employer in law of all these persons, who may end up doing identical jobs at different rates in various schools with different governing bodies. It is the local education authority as employer which will be liable under the Equal Pay Act and Article 119, not the governing body.

Baroness Hooper

I have already explained that the chief education officer of the local education authority is entitled to attend for the purpose of giving advice as regards the proceedings of the governing body.

The Bill sets out a balance of responsibility between the governors and the local education authority. Financial responsibility requires a transfer of responsibilities to the governing body but the advice of the chief education officer will always remain very important. The pay and conditions of teachers will of course be governed by the teachers pay and conditions Act.

Baroness David

But will the advice be taken? There is absolutely no reason to believe that it will. The noble Baroness has read out from Schedule 2 a great deal which I knew. We find that very unsatisfactory for the reasons I have given. The reason for these amendments is to try to improve the situation.

I agree with the noble Baroness that this is a very important matter, but this time of night is not really the time to discuss it. We shall most certainly come back to these matters on Report. We shall then no doubt press them to a Division if we do not receive more satisfactory answers than we have received. For the moment, I beg leave to withdraw the amendment.

The Deputy Chairman of Committees (Lord Grantchester)

Is it the Committee's pleasure that the amendment be withdrawn?

Lord Denham

No.

Lord Grantchester

The Question is that Amendment No. 193A be agreed to?

On Question, amendment negatived.

[Amendments Nos. 193B to 195 not moved.]

Baroness Hooper moved Amendments Nos. 196 to 201:

Page 181, line 32, at end insert— ("(1A) Such a recommendation shall be in writing and shall specify—

1. (a) the duties to be performed by the person appointed (including, where the post is part-time, his hours of work);
2. (b) the grade (on the scale of grades currently applicable in relation to employment with the authority) which the governing body consider appropriate for the post; and
3. (c) where the authority have any discretion with respect to the remuneration to be paid to a person appointed to the post, the determination of any matter to which that discretion applies which the governing body consider appropriate in the case of the person recommended for appointment.").

Page 181, line 33, after ("post") insert ("and determining in relation to any such recommendation any matters mentioned in sub-paragraph (1A) above").

Page 181, line 36, leave out ("selection") and insert ("decision").

Page 181, line 37, after ("involves") insert ("or, in the case of a new post, it is proposed that it should involve,").

Page 181, line 40, after ("body") insert ("on such terms as to give effect, so far as relates to any matter mentioned in sub-paragraph (1A) above, to the governing body's recommendation with respect to that matter").

Page 181, line 42, at end insert— ("(3A) For the purposes of sub-paragraph (1A)(c) above, the authority are to be regarded as having a discretion with respect to the remuneration to be paid to a person appointed to any such post if any provisions regulating the rates of remuneration or allowances payable to persons in the authority's employment either—

1. (a) do not apply in relation to that appointment; or
2. (b) leave to the authority any degree of discretion with respect to rate of remuneration or allowances in the case of that appointment.").

On Question, amendments agreed to.

[Amendments Nos. 201A and 201B not moved.]

Schedule 2, as amended, agreed to.

Clause 37 [Staff at aided schools]:

[Amendments Nos. 201C to 202 not moved]:

Clause 37 agreed to.

Clauses 38 to 41 agreed to.

[Amendments Nos. 202A and 202B not moved.]

Lord Denham

I think that this is the time when we can conveniently adjourn the business for tonight. I beg to move that the House do now resume.

Moved accordingly and, on Question, Motion agreed to.

House resumed.