HL Deb 29 November 1990 vol 523 cc1098-110

5.45 p.m.

Baroness Blatch rose to move, That the draft regulations laid before the House on 8th November be approved [2nd Report from the Joint Committee].

The noble Baroness said: My Lords, these draft regulations provide for the payment of education support grants. They consolidate, with amendments, the previous 1984 regulations.

Before I explain how these new regulations differ from the old ones, it may help your Lordships if I set out some of the background and in particular the new arrangements for combining education support grants with local education authority training grants into a single co-ordinated grants programme.

When last year the noble Viscount, Lord Davidson, introduced regulations to amend the previous education support grant regulations, he informed your Lordships that a scrutiny had been established under the auspices of the Prime Minister's efficiency unit to review the department's two main specific grants—education support grants and the local education authorities' training grants scheme. The scrutiny was asked to examine the administration of the two grants, to consider whether they were effective instruments for supporting the policy objectives they were intended to support, and to make recommendations for improvement.

That scrutiny reported in January. Its first conclusion was that the grants should continue. It found that the grants were broadly meeting their objectives and had exerted powerful influences for change. But the scrutiny also concluded that there was no longer a case for two separate grant systems. Instead it recommended the establishment of a unified scheme combining both grants. This was designed to improve co-ordination between training and other forms of grant support.

The reason for that is that the two schemes have increasingly covered similar ground. Both now have it as a key objective to help schools, colleges and local education authorities to implement the changes flowing from the Education Reform Act. For example, both provide funds to help put the national curriculum in place. But under current arrangements the training that is needed for the national curriculum is considered, and grants are paid, quite separately from the other forms of support that are needed for the national curriculum such as books, equipment and non-teaching staff. Both grants have also allocated funds increasingly according to formulae based on objective measures such as the number of pupils or schools in individual local education authorities rather than on the basis of competitive bids.

The Government therefore readily accepted that bringing the two grants together would make sense. Indeed the principle has received a general welcome as helping to make sure that available funds are used to best effect. The scrutiny report suggested that ideally new legislation might be introduced to provide for a single grants scheme. But it recognised that the prospect for early legislation was uncertain. Meanwhile, we shall continue to keep the two grants formally separate and paid under their respective statutes but administer them side by side so that we can gain the benefits of a co-ordinated approach. The combined programme is known as the grants for education support and training or GEST programme.

It is against that background that we have put before your Lordships new regulations governing education support grants. In practice, the regulations draw extensively on those previously in force. But they make several changes of substance. First, the schedule to the regulations allows for the various ESG activities within the proposed 1991–92 programme. It removes the activities specified in previous schedules which are coming to an end in 1990–91. It updates the descriptions of activities which began in previous years and are continuing into 1991–92; and it allows for the new activities which will begin in 1991–92. In particular, item 28 in the schedule covers the new activity which will support projects to improve the planning and co-ordination of provision for the under-fives.

Secondly, the regulations will enable the department to pay education support grant termly instead of quarterly as in the past. That brings ESGs into line with the existing practice for the training grants which have been paid on a termly basis for some time. It should help to cut down the administrative burden of the grants programme by allowing both grants to be claimed and paid at the same time.

Thirdly, the regulations give my right honourable friend powers to require information to verify that grant has been properly paid and to require LEAs to comply with requirements specified by my right honourable friend including requirements as to the repayment of grants. Both these provisions mirror requirements included in the parallel regulations governing the LEA training grants scheme. Perhaps I may assure noble Lords that the power in regulation 10 about complying with requirements is not for everyday use but is designed as a long-stop which will allow my right honourable friend to protect the taxpayer's investment. In particular, it is designed to allow him to require LEAs to repay an appropriate amount of grant when they sell assets bought with ESG funding. This is a standard requirement for grants.

In addition to these changes of substance we have taken the opportunity to bring the wording of the regulations as closely as possible into line with that of the LEA training grants scheme regulations to mirror the bringing together of the grants into a single programme.

Your Lordships may like to know more about how the combined 1991–92 programme will work. The size and pattern of the proposed programme was announced in July. We expect to support through grants total spending of £364 million. Of that, £215 million is provisionally attributed to education support grants and the remainder to training grants. But the precise sums paid under each set of regulations will be decided when all the grant allocations to LEAs for each activity within the programme have been settled.

Also in July the department issued a single draft circular to LEAs inviting them to submit bids for allocations under the combined programme. Although each activity has been separately identified as payable under ESG or training grant regulations, by grouping activities together the circular is designed to help local authorities develop more coherent responses which can treat training and other forms of support as parts of a single package. The department has now received authorities' bids and we are considering the final shape of the programme. We shall announce allocations to local authorities as soon as practicable, subject to these draft regulations receiving approval.

The Government's overriding priority for the 1991–92 programme is to help schools, colleges and LEAs to implement the education reforms. Consequently, of the £364 million total programme no less than £270 million is being targeted on different aspects of the reforms. As in previous years my right honourable friend the then Secretary of State consulted the local authority associations on the shape of the programme. Within the £270 million for the reforms some £170 million will be allocated for various elements of the national curriculum and collective worship. This includes, first, £35 million of support for implementing the new national curriculum assessment regime, helping LEAs administer the new arrangements, promote consistent assessment standards and give teachers and other staff the necessary training; secondly, £30 million of spending on information technology systems for teaching, with a particular focus on primary and special schools and on the support of children with communication difficulties; thirdly, £15 million of spending on extra books for the national curriculum; and fourthly, £16 million for other ESG support on materials and equipment for the national curriculum and the appointment of staff such as technicians to help implement it. A further £100 million will support projects to improve the management of schools and colleges primarily by helping LEAs implement schemes of local management. This includes expenditure on management training for staff, computerised management information systems and additional administrative support.

But, as in previous years, the programme will also support other priorities not directly related to the education reforms. There is additional support for projects to increase local recruitment of teachers, particularly former teachers and nature entrants to teaching. We shall continue to support projects in the areas of health education and school discipline. There will be a new activity to improve the planning and co-ordination and provision for the under-fives across the LEA and voluntary sectors. There will also be continuing support for a range of ESG activities in adult education including adult literacy, educational guidance and support for the Workers' Educational Association.

Thus far I have focused on the operation of the programme in England. My right honourable friend the Secretary of State for Wales is responsible for the operation of education support grants in Wales. There too, ESGs are being combined with training grants in very much the same way as in England.

The programme in Wales will support expenditure of nearly £25 million in 1991–92. The activities to be supported closely mirror those in England in reflecting the priorities of the Education Reform Act. But in addition funds will be available to support Welsh in the national curriculum.

I believe that the value of the Government's specific grant programmes in education is widely acknowledged. The efficiency scrutiny report commented: The evidence we have received, from all sources, provides overwhelming support for the two schemes. Specific grants have funded important and beneficial developments which would not have happened otherwise".

It is always a pleasure to receive such a ringing endorsement. But there is more that we can do and I have tried to set out for your Lordships the approach that we are taking to ensure that ESG and training grant allocations become even more effective. The regulations currently before us will allow education support grants to continue to provide a vital margin of funding to help schools, colleges and LEAs make a real success of implementing the education reforms and to respond to other education priorities. I beg to move.

Moved, That the draft regulations laid before the House on 8th November be approved [2nd Report from the Joint Committee].—(Baroness Blatch.)

Baroness Blackstone

My Lords, I am grateful to the Minister for taking time to explain the background to the currently complex situation in relation to grants for education support and training. I wish to make two or three general points before making two or three specific points. I hope that the Minister will be able to answer some of the queries and questions that I wish to put to her.

There is considerable and justified anxiety about the loss of local flexibility as a result of the new arrangements for education support grants and local education authority training grants. The Efficiency Scrutiny Study, to which the Minister referred, was undertaken last year. It recommended that the greater flexibility that was entailed in the training grants should be applied to education support grants. However, the reverse has happened; any streamlining of the system to try to bring the two closer together has resulted in less flexibility. That is a great pity and perhaps the Minister will comment upon it.

The scrutiny study suggested that the two schemes should be properly integrated and I wish to endorse its recommendation. However, it appears that the Government have gone only half way down that route. It now appears that as regards the timetable the schemes are being run together but essentially kept separate as regards funding and bidding. That means that local education authorities must prepare two separate bids at the same time. Therefore, there is no opportunity to take into account the outcome of one set of bids when constructing the other set and there is no opportunity for local authorities to try to obtain a balance between the two schemes.

The benefits of a complete merger of the programme as recommended by the scrutiny study will not materialise. Parallel running will not achieve all the benefits and instead we shall be left with a continuing set of administrative complications. I know that the Government will say, as the Minister has already said, that the legislative position prevents total merger. Novertheless, can she say what the Government intend to do about removing the legislative technicality which is preventing complete merger? If, as she said, it makes sense to bring the two grants together, why not do so? Surely there is not so much legislation around in this Session that a fairly minor piece of legislative adjustment cannot be undertaken.

A number of important items are listed in the schedule to the draft regulations. However, the overall funding for the grant is decreasing in real terms. I know that specific grants have always been somewhat controversial in the local education authority world because local authorities prefer not to be tied down by a range of specific grants. However, we may decide to introduce them for important aspects of education provision. As the Minister said, there is great emphasis in the list on the implementation of the national curriculum. There are other important items such as the teaching of mathematics in schools; science and technology teaching and learning in primary education; the training of school governors; the provision of health education, the development and use of information technology in our schools; and the provision of open learning centres for adults in order to provide tuition in literacy and numeracy. Those matters are all vitally important areas of our educational provision. Surely we should not cut funding on those matters. And yet, that is exactly what the Government are doing.

There is an increase of £8 million over the 1990–91 figure of £364 million; in other words, in cash terms that is an increase of just over 2 per cent. In real terms, that must be a cut of around 5 per cent. if we assume inflation at 7 per cent. When local education authority budgets are already so constrained, it seems to me very odd to make such a cut if the Government regard those items to be of great importance, as we have been told that they do.

Perhaps I may now turn to the more specific matters which I wish to raise. I was very glad to see that the management and appraisal of school teachers, including training for the appraisal of school teachers, is first on the list of items in this schedule. Clearly, that is a matter of high priority but I am puzzled as to why only £9 million has been allocated to such a high priority item. I believe that the £9 million is for pilot projects but perhaps the Minister can confirm that that is the case.

I am particularly puzzled because the new Secretary of State is now saying that appraisals should be compulsory in all authorities for all teachers. Does he mean that? If so, where is the money to come from? Why has not more money been allocated for that purpose? The national steering committee on teacher appraisal estimated that some £35 million to £40 million was needed. Perhaps the Minister could enlighten the House on that matter.

I also welcome very much the inclusion in the list of improvement of planning and co-ordination of educational provision for children under five by education authorities and other bodies. I hope that that will encourage those Tory authorities which are doing absolutely nothing to expand and develop provision for under-fives. I referred to that in our recent debate on education and I hope that the Government will start to make a serious effort on that vital stage of education.

I believe that that item allows for the training of non-teaching staff working with children under five, such as nursery assistants. That was not possible under the training grant scheme which specified the training of teachers only. That must be welcomed. It is something for which the local authorities and teachers' unions have been asking, and I must compliment the Government on listening for a change. However, can the Minister explain the basis of the allocation of money under this item? Is it based on population figures in the authorities or on the number of children under five who are in the education system?

Last year there was a great deal of anxiety in the Workers' Educational Association about the transfer of funding from the association to the education support grants mechanism. Can the Minister confirm that the new method of funding is now working to the satisfaction of the Workers' Educational Association, to the satisfaction of local authorities and without any loss of funding to the WEA, particularly in those areas where WEA provision is quite extensive?

Finally, can the Minister explain why the Government have rejected the scrutiny report's recommendations on allowing virement between the various items which are listed under the education support grant regulations? Circumstances can change quite quickly and when one takes into account that bids are made over a six to 12-month period before the money is spent, it would do a great deal to cut down potential waste and bureaucracy if virement was allowed as the scrutiny report recommended. That would be very much welcomed by the local education authorities, yet it would still mean that money was being spent on the 28 items which the Government listed as of sufficient priority to justify those specific grants.

6 p.m.

Lord Ritchie of Dundee

My Lords, from these Benches I should like to thank the Minister for her clear exposition of the changes which have been made. We notice that the ESG and local education authority training grant schemes are to be run in parallel. I must echo what the noble Baroness, Lady Blackstone, said. I believe that the local education authorities are concerned that they have lost the flexibility which they had when the training grant schemes were open to them for suggestion and they could work out their own projects, submit them for approval and go ahead with them. They are now confined to specific projects. That does not permit a local initiative. If we approve the existing scheme whereby education is delivered by local authorities, then they should not have their opportunities for initiative reduced in that way by central authority.

All the activities named in the new regulations are thoroughly worthwhile. However, the original idea of the 1984 Act was that money would be forthcoming from central government for specific projects on specific aspects of education. One wonders whether some of the activities named in that list can come under that heading. I am thinking of such matters as the teaching of mathematics in schools. Can the Minister explain in what way that is a specific project? The teaching of mathematics in schools is and should be carried out in any case. In what way is that an object of an education support grant? The same applies to the training of teachers in schools to improve pupils' use and understanding of the English language. Surely that too is part of the education service of the country. It does not seem to be legitimate that that should be a specific purpose of the education support grants.

I mention also a difficulty which the local authorities have as regards timing. Most of these ideas are floated by the Government in the spring. They have to be considered by local authorities during the summer and autumn. Bids must then be submitted. The work done in planning the projects and putting in the bids, which involves time and money, may then be wasted because those projects may be entirely rejected or under-funded. It is a recurrent complaint by local authorities that that can happen. There is a loss of time, money and labour because of that.

I should be interested to know if the Minister can give me any idea of the take up of some of the excellent suggestions. What sort of progress is made as regards projects to meet the educational needs of persons from ethnic minorities? Has there been a worthwhile take up and successful progress as regards the promoting of social responsibility in children? I am thinking also of item 21 —that is, the provision of open learning centres for adults in literacy, numeracy and such skills, the implementation of provision for pupils whose behaviour poses difficulties and action to improve rates of attendance in schools. Those matters are all terribly important. One wonders what success there has been and what has been the take up.

I too hope that the schemes will be merged, and that in doing so there will be full consultation with local authorities so that whatever scheme is thought of and whatever legislation is introduced will be satisfactory to all. At the moment there are anomalies and sources of inefficiency which the whole of the new scheme is designed to prevent.

Baroness Seear

My Lords, I should like briefly to reinforce what was said by the noble Baroness, Lady Blackstone, about virement. It is maddening that the allocation of money, which is decided in advance of the grants, is rigid. Anyone who has had the job of administering moneys from central government knows that over time the best use of that money changes. To be stuck with the exact allocation of money that has been incorporated in the budget is extremely uneconomic. It produces very bad results and wastes money.

This plea for more virement—I know I am crying for the moon but that is what I shall do—refers to virement not simply to the different kinds of work to be done using the money but also to what happens at the end of the year. The situation is absurd. We all know that at the end of the year the people who received a grant say that they have not spent it, and if they do not do so they will not receive as much money the following year. Therefore they feel they must rush out and spend it. That is an appalling waste of money. It leads to bad administration. If there could be greater flexibility at local level both between categories of work to be done and overtime it would lead to much better results and save money.

That is not the point I primarily wished to make. The noble Baroness, Lady Blatch, in the account she gave us of these grants spoke briefly on allocations for adult education. We who are connected with adult education know that it is the Cinderella of the education services. There is no statutory obligation on local authorities to fund adult education. When they are hard up the temptation is not to fund it. That is happening at a time when adult education needs to expand rather than contract for economic reasons as well as social reasons.

I did not fully understand what was implied in what the noble Baroness said. If there is money in the schemes for adult education, will it be in some way ring fenced so that the adult education colleges actually receive the money? If it is not, and the money goes into the general pool, the temptation will always be to use it for something else. Can the Minister tell us what is intended by her reference to adult education? I should like to know how much will be expected, but the Minister probably cannot answer that. What rights over the money will the adult education colleges have?

6.15 p.m.

Baroness Blatch

My Lords, this was a short but useful debate. There has been a wide measure of support for the education support grants programme. Everyone will have their own view of the real priorities. It would always be nice to have more money to do things. Nonetheless, it is common ground that ESGs and the parallel training grants are having a beneficial impact and provide a key margin of funds to help ensure that the education service can respond to changing needs.

It may be easier if I start with the last matter and address the point made by the noble Baroness, Lady Seear, on adult education. My understanding in regard to ESGs and training grants is that when the bid is made for them they are specifically spent consistent with the details set out in the bid. It relates to the virement point, to which I shall turn in a moment. On the one hand, the noble Baroness was saying spend it for the purpose for which the bid was made but then add flexibility to allow virement when it makes sense.

Baroness Seear

My Lords, I only want virement for the concerns in which I am particularly interested.

Baroness Blatch

My Lords, I shall allow that comment to pass.

Perhaps I may deal with some of the points made in the debate, with the caveat that should I omit anything I shall write to the noble Baronesses and the noble Lord. The first point made by the noble Baroness in her introduction was: why is there less flexibility at local level? That is an issue which was considered very carefully. We recognise that the LEAs use the local priority area to fund various forms of training not covered by nationally specified priorities and that its withdrawal would require some reordering.

The heart of the matter is that the GEST funds are limited. The Government must take a view on the best way of using them and the pattern of activities which will obtain best value for money. Schools in particular have a lot of work to do to implement the education reforms. Our judgment was that the overriding priority for the 1991–92 programme must have help to implement that work. Within the limited funds available it was not possible both to continue with local priority area funding and to fund at the same time at the appropriate level all the national priorities which need support; for example, information technology equipment, information systems, books and materials, extra administrative staff, extra support staff, and so on.

It is a question of judging priorities. We recognise that some people may judge differently. However, I make no apology for the fact that the Government's judgment was that it would be absurd not to use all the levers at their disposal to give schools all possible help to implement the reforms.

There is a partial replacement for the local discretion in the new activity within the 1991–92 GEST programme which will support the overhead costs of managing INSET and spending on non-subject specific training. For 1991–92 that activity, which is to be paid for under the LEATGS, not the education support grants regulations, is much smaller than the former LPA. But we said that its scale and effectiveness will be reviewed for next year.

Finally, it is important to keep the figures in perspective. The combined GEST programme will account for some 2 per cent. of education's share of the 1991–92 local authority proposed grant settlement. While I recognise that resources are not unlimited it remains true that LEAs, schools and colleges are free to add to their GEST allocations to support particular training to which they wish to give priority. The noble Baroness referred to it being a cut in real terms. It is important to set it against the spending on education as a whole. In real terms an increase of more than 40 per cent. in spending per pupil in primary and secondary schools has taken place between 1979 and 1989. The 1990–91 local authority grant settlement allows for local education authorities in England to spend £15 billion on education, which is over 9 per cent. higher than the comparable figure for 1989–90. The proposals for local authority grant settlements in 1991–92 will allow English LEAs to spend £17.5 billion on education. That will represent a 16 per cent. increase over this year's total.

Baroness Blackstone

My Lords, before the noble Baroness sits down perhaps I may pick up what she just said. Giving the overall per pupil increases in spending over the past decade is hardly relevant to this argument. If it is indeed the case that only 2 per cent. of the share of total LEA spending is allocated through this mechanism, it is particularly odd that the proportion should actually be reduced when the Government have a number of priorities that they have allocated; and many are priorities that we on this side of the House would welcome. I do not feel that I have had an adequate explanation of why there has been a cut in real terms for ESG.

Baroness Blatch

My Lords, the point I am making is that overall expenditure has gone up by 9 per cent. this year, and will go up by 16 per cent. next year for education spending. The local authority expenditure prescribed nationally by the Government as a proportion has gone down. In other words, the flexibility for local determination has been increased by the reduction in national prescription.

Another point raised by the noble Baroness related to why we did not complete the merger. That was also mentioned by other noble Lords. I said in my initial speech that one difficulty was the legislative one. I know that the noble Baroness asked why we did not bring forward a minor Bill. We took advice on the scrutiny suggestion that the combined programme might be paid wholly under ESG legislation. We were advised that it would not be acceptable in terms of legal propriety. Given that Parliament enacted in the Education Act 1986 that there should be grants specifically to support training, the advice we received was that it would not be proper to let that statute lie fallow and pay training grants under the ESG legislation.

The scrutiny report recommendation for new legislation is the preferred option, not only of the report but of the Government themselves. I can promise the noble Baroness that the position will be kept under review. In the meantime, rather than delay bringing these two grants together we have set in train the arrangement as set out in my original speech.

The noble Baroness, Lady Blackstone, also referred to funding. Again, I think I probably addressed that point earlier. I am measuring ESG and training funds against the education funds as a whole. The noble Baroness also asked about the basis on which we are determining ESG funding for under-fives. The ESG element of the under-five activity is being distributed to give an equal share to all local education authorities. Given what the noble Baroness said in her speech, I believe that she may actually welcome that. The training element is based on the number of pupils in nursery and primary schools.

The next point is that regarding teacher appraisal. The Government's view is that appraisal for school teachers can assist teachers to realise their potential and to carry out their duties more effectively. In September my right honourable friend the former Secretary of State issued for consultation his proposals for an appraisal scheme under which employers would have been left to judge for themselves whether to introduce appraisals. However, employers would have been able to require teachers to participate if they wished to implement that scheme.

My right honourable friend the new Secretary of State is currently considering the whole question of how best we can move forward in the light of the consultation responses that we receive. The noble Baroness is right to have exposed his current thinking on that subject, but I must say in response that the matter is being considered. The resource implications of various options will have to be considered, but no final decisions have been made. In the meantime, the appraisal moneys will be given to local education authorities on the basis of their bids and the local authorities voluntarily entering into those agreements.

I promised the noble Baroness, Lady Seear, that I would deal with the point she raised about virement. The virement procedures under the LEA training grants have caused considerable problems in relation to the auditing of expenditure. Auditors find themselves unable to keep track of changes resulting from virement. Instead, we have invited LEAs, in putting to the department their bids for allocations for relevant activities, to say if they want to switch the money from one area to another; for example, from training into education support grant and vice versa. We would try to accommodate that. We believe that the new arrangements will allow LEAs sufficient scope to transfer funds. That links with the original point that when a bid is made specifically to do something, the general expectation is that that is what the money will be spent on. If voluntary virement takes place in any sense other than it being flagged up at the outset when the bid is made, then it is difficult to make sure that the money is spent for the purpose for which it was bid.

Baroness Seear

My Lords, I am sorry to interrupt the noble Baroness, but I must register a protest. The change is made for administrative convenience and not in order to achieve the best possible educational results. We should not organise matters for the convenience of civil servants who administer them. We must run them to get the best schools and colleges that we can. If there are difficulties for the auditors, that is just too bad.

Baroness Blatch

My Lords, I said earlier that the proportion of these moneys is 2 per cent. of the budget overall. I believe I have answered the criticism that the percentage is reducing. It is because local authorities are being given greater discretion over the moneys that they are spending. That 2 per cent. is specifically set aside for the Government to have their national priorities met and to assist local education authorities to implement, as current thinking goes, the national curriculum and the measures in the Education Reform Act.

We are saying that as far as possible we want the moneys to be spent on the purposes for which they are bid. One of the duties of the auditor will be to make sure that that happens. If the moneys are vired and there is no control over what has happened to moneys at local level, difficulties arise. Our concern is not to make the position administratively tidy, and it is certainly not to make things easier for the auditors, but to make sure that the money goes to meet the Government's national priorities and to benefit local authorities who implement the measures of the Education Reform Act.

The noble Baroness, Lady Blackstone, referred to the WEA. The new arrangement will provide opportunities for the development of partnerships and collaborative styles of working between the local education authorities and the WEA. That has been evident from information supplied in local authority bids for 1991–92. I can say that the WEA activity is a success and the signs are that it is. We had an excellent response from LEAs bidding for funds for this year's programme. We have also had a very good response this year and will be monitoring the impact of the scheme as it operates.

I have not answered all the questions raised in this debate. If I have missed an important point I shall write to the noble Baroness or noble Lord concerned. Perhaps they will be good enough to remind me of any specific points to which replies are required. I hope that I have responded to the main issues raised. I believe that the ESG activities which my right honourable friend proposes as part of the combined grant programme for 1991–92 will provide valuable assistance to local education authorities. In particular, they will help schools which are already working hard to make a success of the education reforms to carry on their good work. The regulations we have discussed today will enable us to build on previous successes and to establish new and better arrangements for a co-ordinated grants programme. I commend the regulations to your Lordships' House.

On Question, Motion agreed to.