Education Bill

HL Deb 27 April 1993 vol 545 cc149-218

3.10 p.m.

Baroness Blatch

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Baroness Blotch.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES (Lord Ampthill) in the Chair.]

[Amendment No. 157B not moved.]

Lord Peyton of Yeovil moved Amendment No. 157BA:

After Clause 52, insert the following new clause: ("Audit Commission In section 220(1) of the Education Reform Act 1988 for the words "may, at the request of the appropriate body" there shall be substituted the word "shall" and at the end there shall be added the words "and shall have the right to appoint auditors." ").

The noble Lord said: To begin with, I wish to apologise to the Committee for returning so quickly to a topic which we discussed at some length last week. I am encouraged to do so for two reasons: first, the matter will still be fresh in the minds of the Members of the Committee, and, secondly, the more I look at the very complex arrangements under this Bill and previous Acts of Parliament, the more I become concerned about their practicability.

I start by saying what these amendments are not. They are not attacks upon the policy of Her Majesty's Government, which in this particular respect I greatly support. Even more so, they are not critical in any way of my noble friend Lady Blatch: I share in the widely held admiration for her skill, patience and courtesy. She has the terrible task of piloting these huge and massive Bills through this Chamber. I pay her the compliment of not considering her to be entirely responsible for all their contents.

It is common ground that this Bill represents a major initiative in the direction of grant-maintained schools. The more successful the measure is, the larger will be the sum of public money involved. It is no party matter when I say it is really important that the progress made under the legislation once it comes into force should be most carefully monitored, both for the expenditure which is involved and for the quality of the product which comes out at the other end. It is very important in this connection that we should have available comparisons not only between what happened before the Bill and afterwards but also between individual schools as they emerge into new grant-maintained status. The principal question which has to be settled is whether the National Audit Office or the Audit Commission is the best body to carry out the audits.

I wish to make it absolutely clear that there is nothing in anything I say or in these amendments which implies any criticism whatsoever of the National Audit Office. That is far from being the case. I invite the Committee—I hope the Committee will be patient as this matter is rather complicated—to consider for a moment the arrangements as they will be for the audits of the accounts of the various types of school which will then exist. The position will be governed by two Acts of Parliament and by the present Bill, which will in due course become one. I need hardly pause to comment that the fashion of complexity will be at least provided for in full.

First, I shall deal with the position of local education authority schools. The audit arrangements are governed by the Local Government Finance Act 1982. The audit of the accounts of these schools will therefore continue to be carried out by firms appointed by the Audit Commission. Quality and value-for-money surveys will also be carried out by the Audit Commission.

However, the position will be different when it comes to grant-maintained schools. Under the 1988 Act and under this Bill they will be free to appoint their own auditors. It is true that they will have the right and the possibility of calling upon the district audit service, that is the service provided by the Audit Commission, to carry out the audit of their accounts. They will also be able to call for value-for-money surveys from the Audit Commission. But I think that in practice they are hardly likely to do so. No one really welcomes severe and strict scrutiny before disaster has occurred, at which point it becomes essential. The poorer the performer, the less likely is it to welcome the intervention of the commission.

Amendment No. 157BA, standing in my name, would require grant-maintained schools to look to the Audit Commission to appoint auditors for their accounts and require them also to look to the Audit Commission to carry out value-for-money surveys. My Amendment No. 159A seeks to make an appropriate amendment to the Local Government Finance Act 1982.

I now turn to education associations, for which again the audit arrangements are different. I believe they will in practice be free to appoint their own auditors but they will not be able to seek the advice and the assistance of the Audit Commission. That difference seems to me at the least slightly perverse and eccentric. I have tabled Amendment No. 243AB to the Local Government Finance Act 1982, which would look after that position.

I now turn to schools of which the governing bodies will have been incorporated under Clause 225 of this Bill. For them no arrangements at all have as yet been made for audit. I am almost prompted to call to mind Mark Anthony's words and say to the Committee: if you have tears, prepare to shed them now, not for a dead Caesar but for a live accounting officer who could face a prospect of deep and lasting anxiety. I wonder very much whether that particular individual is not feeling a few twinges of apprehension, even at this early stage. In the case of these schools the Audit Commission will continue to audit the local education authority accounts. As those particular schools will be largely financed by local education authorities, it will be possible for the Audit Commission to look down through the authorities at individual schools and at such records as are maintained by them. That will fall far short of an effective audit. Here again Amendment No. 262A on the Marshalled List also changes the Local Government Finance Act 1982. That would secure the necessary rectification.

I apologise to your Lordships for the complexity, but I can only say that I am not its parent. I turn now to the two funding organisations, which are answerable directly to the Secretary of State and whose accounts will be audited by the National Audit Office. That body, therefore, will be able to look through the accounts of the two funding bodies and those of the schools which they finance. However, it lacks the local organisation available to the Audit Commission and will have to set one up anew or will not be able to carry out the task with the same efficiency as has been displayed in the past by the Audit Commission. It would appear likely that at least in the case of those schools the Audit Commission will fade out and be replaced by the National Audit Office.

I cannot for the life of me imagine any benefit which that change will confer on anybody. I believe that it would make sense and be far better for all concerned if the arrangements for the auditing of all public sector accounts were carried out in the same way by the same body. The Audit Commission is well placed both to appoint local auditors to carry out the audit and itself to carry out the quality and value-for-money surveys which it has undertaken in the past and which have been very useful.

I should like briefly to sum up the merits of the Audit Commission as I see them as against the National Audit Office, of which, as I have already said, I intend no criticism. The Audit Commission is accustomed to overseeing locally delivered services; the National Audit Office is not. The Audit Commission already has a local network; the National Audit Office does not. The Audit Commission is accustomed to working with schools; the National Audit Office is not. The Audit Commission does not just look at what has gone wrong, it helps audited offices to correct faults and put matters right. Importantly, it would provide continuity for those schools which change their status from local education authority schools and become grant-maintained schools.

I do not believe that the reputation or achievements of the Audit Commission over the years it has been in existence are a matter of controversy. Indeed, my noble friend on the Front Bench paid tribute to it the other day. It has emerged with a first-class record, particularly in relation to the monitoring of and assisting local services. All the jealousies and concerns which were generated when the commission was first set up have been laid to rest.

I turn to the individual amendments. I do not intend to take up the Committee's time with any detailed consideration of them. I am happy to admit that they may not be ideal. However, I believe that my noble friend would be making a grave error if she were to put them aside on the grounds that they could be better and that I ought to prepare them better, because I do not have the same equipment for doing so as the Government. I would gladly accept that they could be improved provided she would take upon her shoulders the task of so doing. Nor should they be set aside merely on the grounds that they are incomplete, as often happens.

I suggest to the Committee that the amendments point the way for the Government to escape from a muddle which, if left alone, could prove to be extremely expensive and very much against the interests of all those whom this Bill aims to serve. I beg to move.

Lord Renfrew of Kaimsthorn

There is one element in the amendment proposed by my noble friend Lord Peyton of Yeovil which he may not have intended but which will be of deep concern to many Members of the Committee. The Committee will recall the very first debate on the first amendment on the first day in Committee when there was a widespread feeling that the Bill we are discussing should not confer any powers or obligations in relation to higher education and to universities in particular. We had a prolonged debate on that subject, which was ably led by my noble friend Lord Beloff. My noble friend the Minister agreed to take her own amendment away and to bring it back subsequently, making it absolutely clear that no additional powers were being conferred upon the Secretary of State or anybody else in relation to the universities.

There is a problem in relation to Amendment No. 157BA in that it refers to a section of the Education Reform Act which does not make reference exclusively to grant-maintained schools. If it did, then no doubt the amendment proposed by the noble Lord might succeed in fulfilling his intentions. However, Clause 220(1) of the Education Reform Act 1988 states that the Audit Commission for Local Authorities in England and Wales: may, at the request of the appropriate body, promote or undertake studies designed to improve … efficiency … in the management or operation of the Polytechnics and Colleges Funding Council, a higher education corporation or the governing body of a grant-maintained school". No doubt it is that last point which would fulfil my noble friend's intentions, but the Higher Education Funding Council (as the formation body has become) or higher education corporations are at the heart of university government.

The proposed amendment would have the effect not merely of allowing the Higher Education Funding Council or a higher education corporation to call on the services of the Audit Commission when it wished to do so—which would be an entirely appropriate power and one which is at the heart of the 1988 Act—but it would be a requirement that the Audit Commission move in and audit the Higher Education Funding Council and universities. It would also be a requirement that the Audit Commission itself would have the right to appoint auditors for the Higher Education Funding Council and for universities.

We all agreed, on every side, at an earlier stage that it is not the intention that the Bill should interfere with the operation of higher education or that it should place constraints on the Higher Education Funding Council or upon universities. It is certainly not the intention that it should give anybody, whether the Secretary of State or the Audit Commission, powers in that respect. Unfortunately, that is precisely what my noble friend's amendment would do.

I am sure that there are other worries with regard to the amendment. Rather than replacing the existing scope of the National Audit Office by the Audit Commission, it seems to add the Audit Commission to the National Audit Office. It is therefore heaping Pelion on Ossa. However, I am not a specialist in that area. It seems a dangerous amendment. It brings the universities and the higher education funding council into the scope of the Bill.

3.30 p.m.

Lord Peyton of Yeovil

Perhaps it would help if I reply immediately to my noble friend. To some extent I am the victim of Clause 1 which was not of my occasion or drafting. As I said, I am happy to amend the provision to make it generally acceptable. I acknowledge, of course, the knowledge and mastery of university affairs of my noble friend. Unfortunately, I do not share those with him. However, I understand absolutely his desire to defend the universities against inappropriate intervention. That is certainly not the intention of my amendment.

When my noble friend replies from the Front Bench, I shall be glad to hear her say that she will amend the provision as she has offered to do with regard to Clause 1.

Baroness Seear

I welcome the main thrust of the amendment of the noble Lord, Lord Peyton. However, I agree with the noble Lord, Lord Renfrew, that the provision must be separated from any interference with university affairs. I am sure that ultimately that can be achieved. But I wish to register support for the intervention by the noble Lord, Lord Renfrew. It most certainly should be done.

Baroness Carnegy of Lour

I appreciate what my noble friend has in mind in seeking to obtain the expertise of the Audit Commission in those areas where it would be an advantage. However, would the schools in which the National Audit Office already operates be beset by the National Audit Office and the Audit Commission if the amendment were passed? Would there be a double audit? The noble Lord made it plain that in some areas that was not so. I may have misunderstood. I do not believe that that was his intention in moving the amendment.

I too observed the problem with regard to universities. His amendment would mean that the Audit Commission was crawling all over Oxford and Cambridge universities to see whether they were giving value for money, even money not provided by the taxpayer.

Quite apart from universities, is the double-banking implied by the amendment desirable? I may be wrong. The Minister may be able to put me right.

Lord Peston

I support the amendment of the noble Lord, Lord Peyton. However, Members of the Committee will forgive me if I do not agree with all his remarks in support of the Government and the Bill. On the other hand I stand second to none in admiration of his noble friend Lady Blatch. She and I were members of the same intake of Peers. She knows that I hold her in high esteem; she has been the great achiever of our entry. But that does not cause me to be sympathetic towards the Government's policies.

I take the point made by the noble Lord, Lord Renfrew, and others about universities. However, although I speak as a university person, I become extremely irritated by my university colleagues distorting debates simply in order to grind a university axe. The point about universities can be dealt with with the greatest of ease. But it is time that the universities realised that there are other parts of the education system. It is about time that they showed sympathy towards them. I hope that the debate will not be totally distorted, as it was last week, by the universities aspect.

The point at issue is straightforward. We need to audit. By that we mean two things. We are to ensure the correct use of funds—the fiduciary question, or whatever we call it. Equally, we are anxious to obtain value for money. That, too, is a matter on which I am willing to pay tribute to the Government. Those are the two aims that we wish to achieve. How are they to be achieved? They are achieved by the bodies themselves, the schools. But someone has to audit their function. As the noble Lord, Lord Peyton, pointed out, the auditing body can also encourage and help them. It is not a threatening or necessarily destructive matter.

I do not wish to become involved in details of the perfection or otherwise of the amendments. The noble Lord, Lord Peyton, states that the right body is the Audit Commission. It is a body with expertise and experience. As I believe I pointed out last week, if one reads the reports, one cannot but be impressed by what it does and how supportive it is of the bodies with which it is involved. That is why I support the spirit of the amendment. If the proposals are badly drafted—I have no expertise in that area; the noble Lord, Lord Peyton, stated that, too—I hope that the Government will take the provision on board.

What puzzles me is the fear of double-banking. It was a point raised by the noble Baroness, Lady Carnegy. It is a simple point; namely, that the Audit Commission should do the work and that the National Audit Office should not. That seems to be the aim. The Audit Office has many admirable qualities and can do excellent work. The amendment may not be written in a way which achieves that aim, but that can be accomplished. Therefore, I wish to hear a sympathetic response from the noble Baroness stating that she understands the point made and that the commission is the correct body because of its expertise and sensitivity at the local level of the individual school. We can then all get together and devise the appropriate amendments. A most unattractive response would be for the Government simply to say, "No, we did not think of it. We shall not accept it. We are happy with things as they are and we shall reject the amendments because we do not like the drafting."

My main task is to say that the noble Lord, Lord Peyton, is on the right track and that the Audit Commission is the right body. I strongly support what he says.

Lord Acton

I too support the thrust of the amendment of the noble Lord, Lord Peyton, if not the detail. The points that he made about the Audit Commission seem overwhelmingly strong. He appeared to highlight some gaps in the auditing arrangements for schools. I hope very much that the Government will accept the amendments in principle. If they are unable to accept the Audit Commission as the correct body, I hope that they will produce satisfactory auditing arrangements to cover the gaps that the noble Lord highlighted.

Baroness Blatch

Perhaps I may take the final part of the debate first in responding to the amendment. No one, including my noble friend Lord Peyton, either in the debate last week or again today, has stated what is unsatisfactory about the present arrangements for auditing our schools. If we are to enter into a debate about the comparability between the National Audit Office and those arrangements on the one hand, and the Audit Commission on the other, I believe that it would be more honest for this Chamber to have that debate. However, we have not had such a debate. The debate has been about double-banking. I have been invited time and again by my noble friend to get his amendments right for him. I have to be told unequivocally by the Committee that the current arrangements are not working or have no prospect of working.

I have said this once and I say it again. First and foremost, the amendments would super-impose an additional audit regime. It would not replace the existing proper role of the National Audit Office, which is accountable to Parliament, to perform value-for-money studies on the various funding councils and their client schools, colleges and universities.

As I said to noble Lords earlier, where bodies are in receipt of Exchequer grants—and that includes the new funding authorities to be established under the Bill—they will be subject to scrutiny by the National Audit Office and the Comptroller and Auditor General. Grant-maintained schools are required, under their financial memoranda, to open their books to the National Audit Office for inspection or value-for-money studies, and the governing body must secure that the National Audit Office's officials are given reasonable assistance.

I cannot see the need to double-bank this requirement with a roving brief to the Audit Commission. There is nothing in the amendment about who will pay; the cost has to come from somewhere. Indeed, that could confuse the issue of accountability. One particular concern I should have were the Audit Commission to have a roving brief of value-for-money studies would be to establish who was the client. We do not know who the client is. The National Audit Office is accountable to Parliament. To whom would the Audit Commission be accountable? Who would meet the audit fees? The amendments do not make that clear.

Secondly, Amendment No. 157BA includes the provision for the Audit Commission to appoint all auditors. That is a difference between the 1988 Act and the present Bill. It would apply not only to grant-maintained schools and the funding authority, but also to the higher education funding council and the further education funding council and to all the universities and colleges in their sectors. In defence of my noble friend Lord Renfrew, perhaps I may say to the noble Lord, Lord Peston, that my noble friend was simply pointing out that the consequence of the amendments would be all-embracing and would cut right across the whole educational sector.

I think that my noble friend is right to take into account the debate we had on Clause 1. If the Clause 1 debate is unacceptable or if the implications of Clause I are unacceptable to the Committee, it is clear that the amendments go much further. Imagine the reactions of noble Lords if the Government were to propose that the Audit Commission—or any other central body for that matter—should appoint the auditors for the University of Oxford. As my noble friend Lady Carnegy said, just imagine it! But that would be one of the effects of the amendment. I am afraid that it is shades of Clause 1 all over again. There was a temptation at least for a fleeting moment this morning to accept the amendments.

The other three amendments are somewhat more limited, extending the Audit Commission's powers in respect of grant-maintained schools, education associations and incorporated LEA-maintained schools. Some Members of the Committee are, I know, concerned to ensure that we have an effective audit regime for the grant-maintained sector. I share that view absolutely. They may be interested to know that, in a sample of over 270 grant-maintained schools recently taken by my department, the Audit Commission, through its district audit service, was found to have the largest number as clients—some 30 schools. That indicates to me that grant-maintained schools not only can, but do use the Audit Commission. However, I see no reason to make use of the Audit Commission compulsory, which is what the amendments do. It seems to me to be quite contrary to the intention of placing the responsibility properly on schools' governing bodies, as long as they remain fully accountable for and open to scrutiny of their actions.

We are concerned, as will be the funding authorities, that a high standard of audit is maintained. There is absolutely no question of grant-maintained status allowing schools to slip the net—either on accountability or on value for money. The department requires schools to conform to a detailed financial memorandum and it has issued an external audit code which sets out its expectations of audits for governors and auditors.

That is the point which I believe unites all of us in the Committee, it certainly unites me with my noble friend in what he wants. But if he tells me that that is not secured by the present system—I believe that it is—then the Committee must explain to me why the present situation is so unsatisfactory. Those requirements have been generally welcomed, including by the National Audit Office in its recently published report on financial controls for grant-maintained schools. I have the report with me.

I cannot say much about the report because it is awaiting consideration by the Public Accounts Committee in another place. It is part of the full-blown scrutiny of how our grant-maintained schools are performing. It may be worth me quoting just three extracts, which I understand is permissible. The report states, first, that one of its main conclusions was that: The Department and individual schools had approached the change of status and the new financial regime positively and with a large measure of success, and both were developing sound financial procedures". Secondly, the National Audit Office found that: the schools visited had … responded positively and vigorously to their new responsibilities under grant-maintained status and had developed or acquired the necessary expertise and procedures". Thirdly, the National Audit Office nevertheless pointed to: some areas where improvements were required", in particular cases, including, internal control, financial reporting, documentation of procedure and responsibilities, the custody and control of assets, and purchasing and contracting procedures". Those quotations have a clear message in relation to the amendments. Generally sound procedures are being developed and the National Audit Office already provides a mechanism to encourage improvements where they are needed. The National Audit Office does not flinch from criticism, nor should it. We always intended that the regulations to be made under Clause 216 would apply, among other things, the auditing arrangements for grant-maintained schools to education association schools, so that they will have the same entrée to the Audit Commission.

As regards local authority maintained schools, which would be incorporated under Clause 225 of the Bill, my advice is that their expenditures under Local Management of Schools schemes should still be classed as local authority expenditures, and thus they would continue to fall squarely within the Audit Commission's ambit.

The funding agencies and councils already have, or through this Bill will have, the ability to employ the Audit Commission, should they so wish. Under the terms of the Further Education Act 1992, the Audit Commission may undertake value-for-money studies at the request of the further or higher education funding councils. Under the terms of Clause 8 of the Bill, it will be able to undertake studies for the new funding authorities. There is no reason to suppose that value-for-money studies across the sector could not occur under their auspices. But, equally, there is no reason why the Audit Commission should be given a compulsory role in that respect, or to double-bank the role of the National Audit Office.

Similarly, it is also open to schools to appoint professional advisers to undertake value-for-money studies. I heard the note of caution that my noble friend expressed. It will be the wrong schools that do not invite the Audit Commission and it will always be those schools which feel that they are able to withstand scrutiny which will do so. But even that is taken account of. The governing body of a grant-maintained school could, if it wished, commission a value-for-money study from the Audit Commission, just as it could from any other suitable professional adviser. However, I see my noble friend's point.

On the other hand, I cannot see that the Audit Commission should itself appoint all the auditors for schools and universities. Removing the choice at present given to governing bodies—which, as I said, are subject to full scrutiny in all their actions—would do nothing to encourage the sense of freedom allied to the responsibility that is so important for governors. In my view, it would be more likely to create a quite inappropriate dependency culture.

I am sure that Members of the Committee, and in particular my noble friend, share my concern that the audit regime of all educational institutions, including grant-maintained schools, should be strong. My department has provided guidance for grant-maintained schools in this area and we continue to keep the subject under review. I do not believe that the reduction of competition in the market, the reduction of freedom of choice and the reduced responsibility for governing bodies is the way to achieve success; nor indeed do I believe that we should give all that work to the Audit Commission.

I do not believe that there is much between my noble friend and Members of the Committee who have spoken in the debate about the need for proper scrutiny and full accountability for grant-maintained schools. Therefore, I do not wish to respond to the invitation to take these flawed amendments away and bring them back in another form. However, if there is to be any intellectual validity in the argument, it must be for the Committee to convince me that the present arrangements are unsatisfactory. Then we shall have a proper debate about whether the responsibility should he that of the National Audit Office or the Audit Commission.

3.45 p.m.

Lord Peyton of Yeovil

I do not pretend that I listened to my noble friend with any great pleasure or satisfaction. I shall, of course, read what she said. She covered much ground rather faster than my mind is capable of going. That is my fault, not hers. I will do my best to wrap such mind as I have round what she said when I have greater leisure than is available at the moment.

Perhaps I may interject a comment to my noble friend Lady Carnegy, who was worried about double-banking. I believe that the danger of double-banking is much more likely to occur under the arrangements adumbrated by the Bill than it is as a result of what I suggest. Moreover, the idea of schools being subjected to a double audit is one of nightmare quality. It is unlikely to occur under the arrangements which I have suggested.

I am grateful to my noble friend for coming round at long last to the three minor detailed amendments which are calculated to look after the provisions of the Local Government Finance Act 1982. If she were to admit that there was a point there, I would be grateful. But she does not. However, she seemed a little less hostile than she was to my first amendment.

I want to deal with the question of Back-Benchers' amendments. We try our best to find out in these exceedingly opaque and complex measures possibilities of things going seriously adrift. I believe that there are such possibilities. Otherwise I would not have dreamt of troubling the Committee for a second time within a few days on this issue. I am exceedingly disappointed that my noble friend is content merely to say that there is no problem, that the arrangements suggested are perfectly all right, that they will work fine, that there will not be any double-banking, and that the National Audit Office is absolutely qualified to do the job. I tried to keep my remarks as short as possible. But I mentioned about six respects—I do not want to repeat them; they will be on the record—in which the Audit Commission was better qualified to carry out an essentially local function than was the National Audit Office, which is a central affair. I am bound to say that when my noble friend says that I come here pleading that she should tidy up my amendments, that is, whether intentional or unintentional, a gross misconstruction of my suggestion. I ask her to tidy up her Bill.

Baroness Blatch

I am grateful to my noble friend for giving way. I am sorry that he takes such a disparaging view of the seriousness with which I approach the amendments. I take them extremely seriously. I take particularly seriously the importance of having a rigorous and extremely robust system of accountability for those individual establishments within the state sector of education. Having said that, my noble friend has indeed given a large number of reasons—and I have taken them all on board—why he believes that the Audit Commission would do this job very well. But I believe that it is for the Committee to take a view on the present arrangements. They are entirely local. The auditors who carry out the audit of the schools are local. They are drawn from the Audit Commission, from local companies and from approved bodies. That part of the exercise is entirely local and subject to scrutiny. But the overall value-for-money studies are always done from a national position. Indeed the Audit Commission would take an overall perspective. It could carry out the audit on a single-school basis under the present system. It could do it on an overall, across the sector, basis, as it can under the present system.

Nor was I rather flippantly saying to my noble friend, "Don't ask me to tidy up the amendments". I pose a more fundamental question than that, one which I believe should be addressed by the Committee before we tidy up the amendments. It is absolutely legitimate for any Back-Bench Member of the Committee to call into question the provisions of the Bill. I take that extremely seriously.

Lord Peston

Perhaps I may interrupt the noble Baroness a second time. I agree entirely that the Committee has to take a view about this matter and express its view, and that she must respond to it. It might help—she emphasised the role of the National Audit Office—if she could tell us how many grant-maintained schools the National Audit Office has audited so far. Does she have the data before her? Essentially, what sort of job is it doing? Has it looked at most of the schools or one or two schools? How many has the NAO audited?

Baroness Blatch

The National Audit Office does not audit. As I said, the schools appoint their auditors and the auditors appointed have to be approved bodies. I can be very specific. They can come from the Audit Commission itself. It appoints the district auditors, and those are predominantly the bodies which are called upon by the schools to do the audit. The largest group of GM schools uses the district audit service under the umbrella of the Audit Commission. Auditors may also be members of the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in Ireland, the Chartered Association of Certified Accountants or the Association of Authorised Public Accountants; or members of any other body approved by the Department of Trade and Industry to audit companies; or any bodies that may be approved by my department to audit grant-maintained schools.

There is another principle which I believe is debatable. It was debated during the passage of the 1988 Act and will clearly be debated as part of the amendments. It is this. So long as those bodies are approved and subject to scrutiny, should we interfere with a grant-maintained school's right to appoint an auditor from one of those categories? That is another debate, one which we have not had but which may need to be held in the context of the amendments put before us.

Lord Renton

I think that the noble Lord, Lord Peston, is trying to find out something which is of interest to all of us; namely, whether under the present arrangements there is an audit of accounts of all the schools, or only a proportion of schools.

Baroness Blatch

To respond first to my noble friend's point, each school's accounts are audited annually and the result of that audit is made public and presented to the annual meeting of governors and parents. The National Audit Office does not audit in the sense to which we refer now; namely, an annual audit of individual schools. But in the course of carrying out its studies of the grant-maintained sector, and indeed in order to arrive at this report, it clearly had to go into individual schools in order to arrive at some view about whether the performance of the grant-maintained sector was good, bad or indifferent. I believe that I am right in saying that 15 individual schools were visited in order to arrive at some evidence for the information in the report which is now before the Public Accounts Committee.

Lord Peston

I thank the noble Baroness for that answer, which is what I expected. It seems to me that therefore we have to some extent debated this matter at cross purposes. In terms of the audit of individual schools, which is what I am interested in and what the noble Lord, Lord Peyton, is interested in, the National Audit Office has nothing to do with it. This has been a red herring. I am sorry about that. It was certainly not introduced by me; nor was it introduced by the noble Lord, Lord Peyton. We are discussing the specific auditing of specific schools by appropriate auditing bodies. Our view is that the commission is the right body. Therefore, the audit office has nothing to do with the matter so far as the auditing of specific schools is concerned. I certainly do not suggest that the macro-studies that the NAO does should be discontinued. They are excellent. That is not what this debate is about. I think that for a little while at least we have been rather at cross purposes because that was not made clear.

Lord Peyton of Yeovil

I gave way, which is why I rise to my feet again. There are two points that I would like to make in conclusion. First, there is absolutely nothing new in having an element of compulsion where audits are concerned; nor is there anything undesirable in having the degree of co-ordination which the Audit Commission would make available.

I am troubled about this matter. The Bill is a government Bill. As I see it, there is a serious defect here. I have done my best in the limited amount of time to point out as clearly as possible that it is messy and untidy to have four different arrangements for schools just because of their status. They are all public sector schools. I have not heard even a tremor of an answer to justify the distinction between those schools which are still local education authority schools, the schools which are grant-maintained, the schools which are education societies and those whose governing bodies are incorporated. I do not see why they should all be treated in different ways. My noble friend has done nothing to justify that.

In conclusion, I hope that she will recognise from the mere fact that this matter has come up twice so early in our proceedings, that there is serious concern about it. I hope that she will have the grace to take it away and ask herself and her advisors whether there may be a problem here and consult without any commitment to bring forward an amendment at Report stage. I hope that she will go that far. If she cannot, I shall take the opinion of the Committee.

4 p.m.

Lord Harmar-Nicholls

My noble friend the Minister has said that it is for the Committee to decide. It is an intricate problem which has been very well debated. Her weakness is her answer to the noble Lord, Lord Peston, that the system is adequate despite the plea and the evidence of my noble friend who said that it is inadequate. She said to the noble Lord, Lord Peston, that the National Audit Office has no practical experience of having done the job. If she could have said, "Yes, it is doing the job already, it has done it well and that is why I am defending it", I would have been inclined, as part of the Committee, to come down on her side. But in the absence of that—there is a vacuum at the moment—I agree with the plea of my noble friend that the least that she can do at this stage is, while not accepting the amendment, to say that she will, in the light of the uncertainty on both sides, have another look at it. If that is not Parliament at its best, I do not know what is.

Baroness Blatch

There is not a single amendment that comes before the Committee for debate which, short of being determined by a vote, I do not take back and think about in the course of the gaps between Committee stage and other stages of the Bill. But I think that we are talking at cross-purposes. Certainly, I have not appeared at this Dispatch Box and said that the National Audit Office has no experience of what it is doing. It is a matter of understanding the role of the National Audit Office—its overall detailed studies and its individual or across-the-sector studies—which is precisely what the Audit Commission does. It is for the Committee to determine the relative merits of the Audit Commission vis-á-vis the National Audit Office.

I say to the noble Lord, Lord Peston, that I have not been talking at cross purposes. The effect of Amendment No. 157BA would be to require the Audit Commission to carry out value for money studies covering the new funding authorities, and also in respect of universities, further education colleges and grant-maintained schools. At this moment we have the National Audit Office doing just that. I have in my hand its first report. It is before the Public Accounts Committee at the moment.

The other side of the matter, which I do believe is a legitimate debate for the Committee, is the right of a grant-maintained school to choose its auditors. We believe that that is part of the freedom of being a grant-maintained school. As long as, first, schools engage a bona fide company to carry out that audit and as long as, secondly, they are fully subject to all the scrutiny of their actions, I believe that that is appropriate. The amendment before us asks that the Audit Commission appoints the auditor for each grant-maintained school. The amendments say nothing about who would fund the Audit Commission in that work. It would have to become involved as a national body in the local appointment of every auditor for every school. As the number of schools grew, that would be not only unwieldy—it would not be consistent with local democracy. Those are the two aspects of the debate. I hope that I have not misled the Committee in my understanding of the amendments.

Lord Peyton of Yeovil

I am very disappointed. I do not wish to be diverted into a discussion as to whether or not an element of compulsion is necessary in auditing. I believe that it is, and that is that. The only way that I can express my dismay that my noble friend will not say quite simply that she recognises that there must be a problem here and that she will therefore undertake to have a really careful look at it between now and the next stage, is to take the opinion of the Committee. I beg to move.

4.5 p.m.

On Question, Whether the said amendment (No.157BA) shall be agreed to?

Their Lordships divided: Contents, 121; Not-Contents, 167.

Division No. 2
CONTENTS
Acton, L.	Jeger, B.
Addington, L.	Jenkins of Putney, L.
Airedale, L.	John-Mackie, L.
Alport, L.	Judd, L.
Archer of Sandwell, L.	Kilbracken, L.
Ardwick, L.	Kinloss, Ly.
Ashley of Stoke, L.	Lawrence, L.
Attlee, E.	Listowel, E.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Baldwin of Bewdley, E. [Teller.]	Lockwood, B.
	Longford, E.
Barnett, L.	Lovell-Davis, L.
Beaumont of Whitley, L.	Mclntosh of Haringey, L.
Boston of Faversham, L.	Mackie of Benshie, L.
Bottomley, L.	Mallalieu, B.
Brooks of Tremorfa, L.	Masham of Ilton, B.
Bruce of Donington, L.	Mason of Barnsley, L.
Campbell of Eskan, L.	Mayhew, L.
Carmichael of Kelvingrove, L.	Merlyn-Rees, L.
Cledwyn of Penrhos, L.	Molloy, L.
Clinton-Davis, L.	Monson, L.
Cocks of Hartcliffe, L.	Morris of Castle Morris, L.
Craigavon, V.	Mulley, L.
Darcy (de Knayth), B.	Nicol, B.
Dean of Beswick, L.	Ogmore, L.
Donaldson of Kingsbridge, L.	Parry, L.
Dormand of Easington, L.	Peston, L.
Eatwell, L.	Pitt of Hampstead, L.
Ennals, L.	Ponsonby of Shulbrede, L.
Ewing of Kirkford, L.	Prys-Davies, L.
Faithfull, B.	Rea, L.
Falkland, V.	Richard, L.
Fisher of Rednal, B.	Ritchie of Dundee, L.
Gallacher, L.	Robson of Kiddington, B.
Galpern, L.	Rochester, L.
Gladwyn, L.	Russell, E.
Glenamara, L.	Seear, B.
Graham of Edmonton, L. [Teller.]	Sefton of Garston, L.
	Serota, B.
Grey, E.	Shackleton, L.
Guildford, Bp.	Shepherd, L.
Hampton, L.	Stoddart of Swindon, L.
Ham wee, B.	Strabolgi, L.
Hanworth, V.	Strafford, E.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Healey, L.	Thurlow, L.
Henderson of Brompton, L.	Tordoff, L.
Hilton of Eggardon, B.	Turner of Camden, B.
Hollis of Heigham, B.	Whaddon, L.
Holme of Cheltenham, L.	White, B.
Hooson, L.	Wigoder, L.
Howell, L.	Williams of Elvel, L.
Irvine of Lairg, L.	Winchilsea and Nottingham, E.
Jay, L.	Young of Dartington, L.

NOT-CONTENTS
Aberdare, L.	Hemphill, L.
Addison, V.	Henley, L.
Aldington, L.	Hesketh, L. [Teller.]
Allenby of Megiddo, V.	Hives, L.
Annan, L.	Holderness, L.
Archer of Weston-Super-Mare, L.	HolmPatrick, L.
	Hood, V.
Arran, E.	Hooper, B.
Ashbourne, L.	Howe, E.
Astor, V.	Hunt of Tanworth, L.
Astor of Hever, L.	Hylton-Foster, B.
Barber, L.	Ilchester, E.
Barber of Tewkesbury, L.	Jenkin of Roding, L.
Belhaven and Stenton, L.	Johnston of Rockport, L.
Bellwin, L.	Kimball, L.
Belstead, L.	Kitchener, E.
Bessborough, E.	Lauderdale, E.
Blatch, B.	Layton, L.
Blyth, L.	Lindsay, E.
Boardman, L.	Lindsey and Abingdon, E.
Borthwick, L.	Liverpool, E.
Boyd-Carpenter, L.	Long, V.
Brabazon of Tara, L.	Lucas, L.
Brentford, V.	Lyell, L.
Brigstocke, B.	McAlpine of West Green, L.
Brookeborough, V.	Mackay of Ardbrecknish, L.
Brougham and Vaux, L.	Mackay of Clashfern, L. [Lord Chancellor.]
Buxton of Alsa, L.
Cadman, L.	Macleod of Borve, B.
Caithness, E.	Manchester, D.
Carnegy of Lour, B.	Manton, L.
Carnock, L.	Margadale, L.
Chalker of Wallasey, B.	Marlesford, L.
Chelmsford, V.	Marsh, L.
Clanwilliam, E.	Mersey, V.
Clark of Kempston, L	Middleton, L.
Colnbrook, L.	Milverton, L.
Colwyn, L.	Monteagle of Brandon, L.
Constantine of Stanmore, L.	Montgomery of Alamein, V.
Cork and Orrery, E.	Mottistone, L.
Cornwallis, L.	Mountevans, L.
Cox, B.	Mowbray and Stourton, L.
Craigmyle, L.	Moyne, L.
Cranborne, V.	Munster, E.
Crathorne, L.	Murton of Lindisfarne, L.
Cross, V.	Nelson, E.
Cumberlege, B.	Norfolk, D.
Dacre of Glanton, L.	Norrie, L.
Davidson, V.	Northbourne, L.
Denham, L.	O'Cathain, B.
Denton of Wakefield, B.	Orkney, E.
Downshire, M.	Orr-Ewing, L.
Eccles of Moulton, B.	Oxfuird, V.
Eden of Winton, L.	Palmer, L.
Ellenborough, L.	Pearson of Rannoch, L.
Elles, B.	Pender, L.
Elliott of Morpeth, L.	Perry of Southwark, B.
Elphinstone, L.	Peyton of Yeovil, L.
Elton, L.	Radnor, E.
Fairfax of Cameron, L.	Rankeillour, L.
Ferrers, E.	Reay, L.
Flather, B.	Renfrew of Kaimsthorn, L.
Fraser of Carmyllie, L.	Rennell, L.
Geddes, L.	Renton, L.
Gibson, L.	Rippon of Hexham, L.
Gisborough, L.	Rodger of Earlsferry, L.
Goschen, V.	St. Davids, V.
Grantchester, L.	Saltoun of Abernethy, Ly.
Grimston of Westbury, L.	Savile, L.
Hailsham of Saint Marylebone, L.	Sharpies, B.
	Sherfield, L.
Halsbury, E.	Shrewsbury, E.
Hamilton of Dalzell, L.	Simon of Glaisdale, L.
Hardinge of Penshurst, L.	Skelmersdale, L.
Harmar-Nicholls, L.	Stockton, E.
Harmsworth, L.	Strange, B.
Harvington, L.	Strathcarron, L.
Haslam, L.	Strathclyde, L.
Hayhoe, L.

Strathcona and Mount Royal, L.	Ullswater,V.
	Vaux of Harrowden, L.
Strathmore and Kinghorne, E. [Teller.]	Vivian. L.
	Wade of Chorlton, L.
Sudeley, L.	Wakeham, L. [Lord Privy Seal.]
Swinton, E.
Teviot, L.	Whitelaw, V.
Thomas of Gwydir, L.	Wynford, L.
Trumpington, B.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

Resolved in the negative, and amendment disagreed to accordingly.

4.14 p.m.

Earl Baldwin of Bewdley moved Amendment No. 157BB:

After Clause 52, insert the following new clause: ("—(1) Where the governing body of a grant-maintained school—

Proposals for county or voluntary status by a grant—

maintained school

1. (a) decide by a resolution passed at a meeting of that body ('the first resolution') to hold a ballot of parents on the question of whether county or voluntary status should be sought for the school, and confirm that decision by a resolution (`the second resolution') passed at a subsequent meeting of the governing body held not less than twenty-eight days, nor more than forty-two days, after that at which the first resolution was passed; or
2. (b) receive a written request signed (or otherwise endorsed in such manner as the governing body may require) by a number of registered parents of registered pupils at the school equal to at least twenty per cent. of the number of registered pupils at the school to hold a ballot of parents on the question of whether county or voluntary status be sought for the school; and in this subsection "registered" means shown in the register kept under section 80 of the Education Act 1944 as that register has effect on the date on which the request is received;

they shall—

1. (a) secure that the ballot is held in accordance with subsections (2), (3), (4) and (5) of section 25 of this Act, as though section 25 applied to a ballot under this section; and
2. (b) give notice in writing that the ballot is to be held to the local education authority, and in the case of a former voluntary school, the trustees of the school, and any relevant diocesan authorities.

(2) This section does not apply if in the case of the school in question—

1. (a) a ballot has been held in accordance with this section within the period of twelve months ending with the date immediately preceding the date on which the request is received; or
2. (b) a ballot has been held in accordance with section 25 of this Act within the period of five years ending with the date immediately preceding the date on which the request is received;

unless in any case falling within either paragraph (a) or (h) above the Secretary of State has given consent in writing for a new ballot to be held.

(3) For the purposes of this section a person is eligible to vote in a ballot if he is a registered parent of a registered pupil at the school, where "registered" is as defined in section 26(2) of this Act, as though that section applied to a ballot under this section.

(4) Where in any ballot held in accordance with the requirements of this section (other than one held by virtue of this subsection) the total number of votes cast by persons eligible to vote is less than fifty per cent. of the number of persons eligible to vote, the governing body shall secure that a second ballot is held within the period of fourteen days beginning with the date immediately after that on which the result of the first ballot is determined.

(5) In such a case as is referred to in subsection (4) above—

1. (a) the result of the first ballot shall be disregarded for the purposes of subsection (6) below; and
2. (b) subsections (2), (3), (4) and (5) of section 25 of this Act shall apply subject to the omission of section 25(3) (a) and to the reading of section 25(4) as if the information there referred to were the information given for the purposes of the first ballot.

(6) Where the result of a ballot held under this section shows a simple majority of votes cast (by persons eligible to vote in the ballot) in favour of seeking county or voluntary status for the school the governing body shall publish proposals to that effect as though they were publishing proposals for grant-maintained status under section 29 of this Act.

(7) Section 30 of this Act shall apply to proposals published under subsection (6) above as though they were proposals for grant-maintained status.

(8) Sections 24 and 28 of this Act shall be deemed to apply to ballots under this section.

(9) The Secretary of State shall make such regulations as he considers appropriate to have effect, where proposals published under this section have been approved in respect of any school, in relation to—

1. (a) the transfer or vesting of property, rights and liabilities;
2. (b) the transfer of staff;
3. (c) disposals of land and the control of contracts;
4. (d) restrictions on changes of purposes of property or changes of staffing; or
5. (e) any other matter he considers relevant to the carrying out of proposals as approved.").

The noble Earl said: Fortunately, this amendment looks more complicated than it actually is. It is designed to correct a major anomaly in the schools legislation of the last five years. Parents have been able to take their school out of the local authority sphere of influence and into a quite different set of regulations. But, curiously, there is no provision for schools to go the other way if circumstances change and a later generation of parents decide that that is what is best for their children.

This lack of symmetry is extremely puzzling. In almost every area of life or law that one can think of, it is possible to change a decision that has been taken. To be actually debarred from doing so in this case is unjust and we are convinced that, if parental choice means anything, there should be a right on the statute book to go back, however seldom it may be exercised.

The provisions of the amendment are designed to produce, with two exceptions, a mirror image of the opting-out process. That is essentially what all the words are about. We look for no special favours to induce parents to opt back in; we are not, for example —as the Government are in Clause 21—seeking to compel governors to vote on the issue year after year.

The wording of the amendment therefore follows the wording of the clauses in this Bill as closely as possible, consistent with producing the necessary reversal of direction and consistent with building in two restraints which, to encourage stability, we have thought it right to require. The first, in subsection (1) (a), is the provision for a second governors' resolution which, as we know, the Government have dropped from the opting-out clauses of the 1988 Act. I hope that this will be seen as an earnest of our intention not to make it unduly easy to opt back in. There will be an extra hoop to jump through.

The second, in subsection (2)(b), is the requirement that no ballot may be held until five years have elapsed since the school balloted to opt out. The reason is obvious. Any major change should be given a chance to prove itself and to show if it can bed down satisfactorily before the question is reopened. It would be quite wrong, we felt, for a school to make another major change within a period of five years, for reasons both of common sense and stability.

The only place where it has not been possible to echo the wording of the Bill is subsection (9), which sweeps up the Chapter III provisions of Clauses 35 to 44 which cannot neatly be reworded and are best left, we feel, to separate regulations.

If there is one metaphor which has recurred throughout our debates so far it is the "level playing field". The Minister took us last week into the realm of motives and told those of use who opposed some of the clauses in the Bill that we were "running scared" of the move towards grant-maintained status. It is always tricky when you start imputing motives. I cannot speak for other noble Lords. I can only say that what principally offends me in this Bill is the unfairness of so much of it. I have highlighted the example more than once and do not need to do so again. It is a matter of equity. At so many points the parents' choice is being influenced: it is made easy for them to vote for GM status and less attractive to stay with their local community of schools.

When the noble Baroness said the other night when we were debating Clause 33 that the Bill intended to provide a level playing field, she took my breath away. If she sees the playing field as level, she must be lying on her side. The playing field cannot be level if parents can opt one way but they cannot opt the other. I should have thought that this was unarguable. You may have other reasons for making this step irreversible, but you cannot say the choices are equal, and they clearly should be.

For one thing, as matters stand, it is just one generation of parents that can vote to change a school's status for all time. Since it is hard to see how else the voting constituency could work, it is imperative that this amendment be enacted so that future parents are not permanently disenfranchised. It is their school as well.

Again, the importance of this particular issue was evident in the way it underlay a number of our debates last week. Time after time, on questions such as the majority vote and the second governors' resolution, we found ourselves saying, "This would not matter so much if the decision were not irreversible". I do believe that, if we can get this bit right, quite a number of the other inequities in the Bill will lose much of their sting and ruffled feathers will be smoothed to some degree. Surely, the Government must hope for this as much as we do.

I lay my own preference upon the table. The noble Baroness knows it quite well. I think grant-maintained status is largely an irrelevance to raising educational standards, a red herring that loses more than it gains in rejecting the local community network of professional support and expertise in a framework where all schools under LMS now have a large measure of control over their own affairs.

I only want to make two brief points on the merits of opting out. The first is to draw attention to what I believe to be the first reliable evidence, as opposed to impression and anecdote, of which we have heard quite a bit during our debate so far, on the success or otherwise of the GM sector. Both the new inspectorate and the authors of a separate three-year Government-funded study reported three weeks ago that the reforms had made little or not difference to teaching standards or exam performance in GM schools or, interestingly, to parental choice, which, if anything, has become more problematic, and this in spite of the extra funding that these schools get and LEA schools do not. Also it appears that the power of LEAs, such as it is, is being replaced not by the consumer but by the power of head teachers. That is what those two reports tell us.

My second point is that you do not opt out into a vacuum: you opt from one system into another. Where does the ultimate power over a school reside under the new system? With the person who can close it, and that is the Secretary of State. If this Bill goes through unamended, he can open it, close it, enlarge it, change its governors, move it, inspect it. tell it what to teach, virtually without let or hindrance.

But that is all as it may be. I make these points to show that some parents and governors, some time, may decide to take a different view from that of the noble Baroness and her colleagues. Indeed, I would say that it is statistically certain that some of them will. But there is no way in which they can express that view, and it is to correct that anomaly, that injustice, that we have put down this amendment. It is not about the views of the noble Baroness or mine: it is a straight issue about parental choice.

I conclude with a word about the objections which I suspect the Government may put forward. They may say that it is a threat to their programme of reform. I hope that the noble Baroness will not argue that. There are certain beliefs that the Government, in logic, cannot hold at the same time. They cannot believe in the merits of grant-maintained status, trust in market forces and parental choice, and believe that this amendment threatens their reforms. It is an impossibility. If they believe the first two—and I think they do—then they must believe that no one will want to avail themselves of the opt-back, in which case they can have no problem whatever with our amendment. This is the converse of the argument that the noble Baroness used against the noble Lord, Lord Dormand, at Question Time.

They may also say that it could open the door to further disruption and instability in the educational field. If they say that, then, in addition to the difficulty in logic, I believe they would have quite a big problem of credibility. Since 1980 the Government have introduced change after change after change to our system of schools. When someone else puts forward a measure, as we do—one measure, and an enabling measure at that, which in the Government's eyes few people will want to take up—I believe that they can hardly be heard to object.

The Government's reasons for all their changes are presumably that they are necessary. The reason for our proposed change is the same. So in the end it is the merits of the case that count. Our case is that to give parents a decision that cannot be reversed if circumstances change is indefensible. This amendment, I stress again, is not about the pros and cons of grant-maintained status; it is about parental choice. If you oppose this amendment, you oppose the rights of parents and governors. I beg to move.

Lord Judd

It is a great privilege to follow the noble Earl who has so powerfully moved this amendment. I can think of few people in this Chamber who have a greater record of professional engagement in the sphere of education and who have brought to that work a greater degree of public service and objectivity. Therefore, I believe that the Committee would be wise to listen very carefully to the argument that has been presented. Whilst we continue to have parallel systems of education in the state sector with local authority and grant-maintained schools existing side by side, if the Government are serious about parental choice and freedom to decide it is essential that transfer both ways should be possible. Without such a provision where would be the freedom of choice for the next generation of parents?

As the noble Earl has argued, the requirement that no school may opt back within five years of opting in is by contrast designed to ensure more stability than the Government's destabilising policy of the annual consideration of opting out. Five years seems to be a reasonable interval since it will recognise the arrival of a new generation of parents who are entitled to make their own decisions for their own children. There are numerous reasons why a school may wish to opt back. It will be different parents who will be taking the decision, but the decision may also be influenced by a change in attitude or political control of the local authority. For example, a school might have opted out to avoid a reorganisation or the introduction of selection which it no longer saw as a danger. It might be opting back into a different local authority altogether—one that had been reorganised by the local government commissioner. It might be that the new parents wanted to take advantage of first-rate local education authority services in the particular area.

The Government and others have often claimed that the only advantageous funding enjoyed by grant-maintained schools is that relating to their capital grant, usually in cases where schools have been (as it is described) neglected by their local education authority. If schools could opt back into their local education authority there would be an incentive for the Government to ensure that funding, including capital provided by them, was equitable because an advantageous allocation of grant could subsequently be transferred back to the local education authority sector. The main difference would then be a matter of autonomy, as Ministers have often claimed.

The possibility of opting back would also offer parents some protection from the possible excesses of either heads or governors who would become far more accountable to parents than under the present arrangements. Should they seek to abuse the autonomy of grant-maintained status against the wishes of parents such status could be removed. I suggest that that would secure a greater degree of accountability for future generations of parents who might have quite different views from those who had voted to opt out.

Although I totally endorse the argument put by the noble Earl that this amendment is not about the merits or demerits of one form or the other but about the right to choose, I come back to what I understand to be the underlying position of the Minister as repeatedly put in the debate on the Bill so far. I have come to accept that the noble Baroness argues the point with integrity and sincerity. It is her conviction that the quality of democracy will be enhanced by giving authority to parents in their local communities, as distinct from the rather over-structured system of democracy that we have at the moment either at the centre—as we participate in debate here and in the other place—or at local authority level.

However, with great respect, the Minister cannot have it both ways. If she is taking away the democratic powers or diminishing them at the central or local level, when we cannot be bound by our predecessors and have a perfect right to change legislation whenever we wish, as that is the basis of our constitution, then, even if we were to accept her argument, surely parents who are acquiring those democratic rights must have the ability to be able to change the situation so long as an option exists.

I hope that the Minister will take this point seriously. We do not put it in a personally antagonistic way. We have a genuine anxiety. It is that underlying issue which makes so many people in the country fear that the Bill is either naive in that respect—and that is a generous interpretation—or a little sinister. It is about a form of democracy in which, through attrition of the rest, one goes on and on persuading people to consider an issue until they finally cave in and come round to one's point of view but give them no similarly balanced opportunity to make the alternative choice. For that reason I believe that this amendment is very important. I hope that the Minister will, perhaps I may say a little uncharacteristically, feel able to accept it.

4.30 p.m.

Baroness Faithfull

I wish particularly to speak on subsection (2) (b) of this amendment, which lays down that no opted-out school may take a decision either way to opt in or out under five years. I believe that it would be very disruptive for the present parents if that were to be the case. However, after five years it should be possible for parents to decide to stay in a grant-maintained school or to opt back.

This country is changing at an incredible rate. Perhaps I may give just two examples to illustrate my point. Suppose that a village disappears and a new estate is built on the site. That estate would have a completely different ambience, a completely different set of people and an altogether different ethos. It may be that those people would wish to remain with grant-maintained schools; but, equally, they may wish the schools to return to a local authority. A second extreme example would be if, with the Channel Tunnel, an enormous number of French people came to live in Kent. Quite a number have already bought houses in Kent. In five years' time they may prefer the schools to be run by the local authority rather than to be grant maintained.

I believe it fair and honest that if, after five years, a school wants to change, it should be able to do so.

Baroness Hamwee

From these Benches I too support the amendment. During the passage of the Bill we have heard and will continue to hear about, on the one hand, the concepts of partnership and parallel and comparable provision by the two sectors, and, on the other hand, the centralising tendency moving not to direct provision but to direction from the Secretary of State. That centralisation is an inevitable concomitant of grant-maintained status, where the autonomy of individual schools must be limited to some extent.

I hope that the Government will be open to the idea, though opting in and out may be the wrong notion. Schools are opting for the alternative arrangement. That possibility in itself may give parents the confidence to know that education is not being treated as a political football. I have no particular liking for the phrase "a level playing field" but perhaps that is the analogy that one must draw. I appreciate that the Minister will tell us that education is not a political football. I share with her every endeavour not to make it so. But the debate about grant-maintained status has, I fear, left parents feeling that such a highly political issue calls into question whether or not education is a political football.

I welcome too the proposal for the five-year bar on the consideration of the matter. The new demography to which the noble Baroness, Lady Faithfull, drew attention is a very real issue. The five-year bar will allow a new generation of parents to consider the matter. It is a sensible compromise to achieve flexibility without producing an unstable system. That the five-year bar and the second governors' resolution, to which the noble Earl, Lord Baldwin, referred, are included, must reassure the Committee that this is not a frivolous suggestion.

Baroness Cox

I am deeply impressed by the plausibility both of the amendments and those who have spoken to them. Indeed, in an ideal world I should be delighted to support them in principle and in practice. I would go into the Division Lobby with those Members. But we do not live in an ideal world and I am afraid that I must introduce some counter-arguments from the real world of realpolitik.

I am the strongest possible supporter of parental choice but I am also a realist so far as local education authority politics are concerned. It has been the reality that, when many schools have been going through the process of considering opting out and through the process of ballots, they have been subjected to the most appalling intimidation and parents and teachers have been subjected to the most appalling victimisation.

When I mentioned those words on an earlier evening, Members opposite were surprised, as though there were no such thing as intimidation or victimisation. I am afraid they have been a reality. What has also been a reality is that once the schools have achieved their grant-maintained status and been allowed to be established, the dogs of war have been called off and the schools have been able to develop in stability and peace.

Members opposite challenged me and said that they did not recognise the kind of local education authority about which I was talking. The noble Lord, Lord Dormand of Easington, said that if there were examples of victimisation or intimidation, we should hear them. Therefore, for the record, the examples I give are real.

The noble Baroness, Lady Warnock, said that she did not recognise the kind of authority of which I was speaking. I have lived for over 30 years in what I call the People's Republic of Brent. We sent our children to state schools in Brent, both primary and comprehensive schools. We paid a price for that. Brent is not unique. There are many authorities which give their children very short shrift and where I am afraid tactics of intimidation are at work. I wish Members of the Committee could have heard the telephone calls that I had from a very brave parent, Mrs. Yasmin Ahmed, who was trying to work with other parents in Humberside, encouraging parents to vote in a ballot for Toll Bar School. Teachers came knocking on the doorsteps with misinformation about what would happen to the pupils. The head was subjected to threats about the future of his job. The intimidation to which individual parents and individual teachers were subjected was quite grim.

In my own area of Brent, one of our councillors, Councillor Graham Durham is quoted as saying that it was his borough's "duty" to "strangle" any grant-maintained school. Referring to Claremont School, which has now run the gauntlet and is grant maintained, he said, "We must do everything we can as an authority to ensure that this school cannot and does not work".

The council went on to remove the school from the list of secondary schools given to parents with children at primary school, so that the parents would not necessarily be aware of that school as an option to which to send their children from primary schools. I should point out that Brent has a very high proportion of parents from ethnic minority families who would not necessarily know how to challenge that kind of policy from the local authority.

Boldon Council refused pupils at St. James' School access to the local swimming pool while it was contemplating going for a ballot and opting out. A teacher was banned from a training course on child abuse run by the council. A Labour councillor was suspended by his local party for three years for daring to support St. James' campaign to become grant maintained. He was accused of bringing the party into disrepute.

I have given two examples beginning with the letter B, from Brent and Boldon. I could give other examples beginning with B—from Birmingham—and with C from Clwyd and Calderdale. I could go down the alphabet to Swansea, Tameside and North Tyneside. However, I shall not delay the Committee unless I.am asked for further examples, in which case I shall be happy to oblige.

The point I am trying to make is that, tragically, in the real world, if this amendment were agreed to, these schools would be put into a state of instability, confusion and uncertainty. I find it a little strange that among its supporters is the noble Lord opposite. Ann Taylor, speaking at the Labour Party Conference, said that a school does not belong to any one set of governors—I think she also mentioned parents.

I wish that I could take the idealistic and principled view to which these amendments aspire. But in the real world parents and teachers are subjected to sustained intimidation. If this amendment, which would allow one set of governors to initiate a reverse procedure, is agreed to, it would be opening up a veritable can of worms, creating instability among schools which are now settling down, the great majority of which are thoroughly enjoying their freedom from local education authorities and going from strength to strength. I hope that they will be able to retain that autonomy and prove themselves in the way that they have already begun to do without this very destabilising amendment.

Earl Russell

I have listened fascinated to the noble Baroness, Lady Cox. I welcome her realism, but it is insufficient. I, too, come from what used to be the people's republic of Brent, now the banana republic of Brent, which has passed from loony Left to raving Right, without passing through the intermediate stage of civilisation. I listened to the quotations from councillor Graham Durham and I do not argue with them. The noble Baroness might also have quoted councillor Nkechi Amalu Johnson who remarked that she admired Margaret Thatcher for the same reasons as she admired Winnie Mandela and Idi Amin.

Extremism happens on both sides of the political fence; intimidation happens on both sides of the political fence. But I believe that the noble Baroness's realism is insufficient to the extent that she has underestimated the determination of extremists to go to meetings. I believe that she has underestimated their capacity to make attending meetings extremely unpleasant for other people. Therefore, I believe that she has underestimated the very grave danger of extremists gaining control of the governing body of a grant-maintained school.

That is one of the circumstances in which a school might well wish to opt back. I see that the Minister shakes her head. But I am sure she remembers the case of the Stratford School. If this power had been available in the Stratford School, it might have helped.

Baroness Blatch

I am grateful to the noble Earl for giving way. I would like him to- give me, first, an example of how that can happen and, secondly, to continue with his example of the Stratford School and to say how it came right in a faster time than any local education authority might have put it right. We followed a proper procedure and that school is now a very good one and performing very well.

Earl Russell

I accept that the Secretary of State did succeed in pulling the chestnuts out of the fire at Stratford. I congratulate him on that. I was hoping to save him from the rather painful need to burn his hands next time. It was not a pleasant business and I am sure that the Secretary of State did not enjoy it.

I am also concerned that this amendment would actually make it easier to put the case in favour of opting out. In 1988 the school which my two sons were then attending discussed a proposal to go grant-maintained. All parents were consulted by letter. I wrote back that I was not prepared to support going grant-maintained while the status was irreversible. I believe that I was not the only parent who said that. So the noble Baroness might just find that going grant-maintained is a little easier if freedom of choice points both ways.

This is the hub of the whole argument. It is an argument of freedom of choice. The Government tell us that that is the central thrust of their reforms. Either that is true or it is not. If it is true then it must be possible, if freedom of choice is the ideal, to make the choice either way. I have been trying to think of other irreversible choices. The only one that I have thought of in the past few minutes is the choice of selling oneself into slavery, but I do not believe that that is an appropriate parallel. If the Minister can think of any others I shall be glad to hear of them.

But if the Government's purpose is not freedom of choice, then what is it? If it is not freedom of choice it must be some other purpose about which, as yet, we have been told nothing. When the Minister comes to reply I shall be very glad to know some of those purposes. It is precisely because some of us find it so completely impossible to understand what the real purpose of grant-maintained schools is, that we get so regularly tempted to go looking for hidden agendas which is a process in which we may perfectly well be making mistakes.

We on this side of the Chamber believe in freedom of choice, but we shall find it very hard to believe that the Secretary of State does until he changes his name by deed poll to Hobson.

4.45 p.m.

Baroness Young

Like the noble Earl, Lord Baldwin, the noble Earl, Lord Russell, has put up a very enticing argument. It sounds so reasonable. As my noble friend Lady Cox has said, the idea of the level playing field and voting in and voting out sounds very reasonable and something which everybody should accept. Not only do I support the arguments so clearly put by my noble friend Lady Cox that one has to face the political reality of the situation, but the fact of the matter is that were this amendment to be agreed to, schools would become a political football. There would be votes and pressure put on parents to vote one way or the other. Five years is a very short time in the life of a school. At the end of the day, we are talking about the children.

I do not believe that this point applies to my noble friend Lady Faithfull who has supported this amendment, but others who have supported it are themselves entirely opposed to grant-maintained schools. They have never made any bones about it and in a free society they are perfectly entitled to take that point of view. That is yet another way of attacking the whole system which, as we all know, is beginning to work extremely well. I do not believe for one moment in this argument about getting extremists on a governing body. We already find that a great many able people are coming forward to serve on the governing bodies of grant-maintained schools. The question of the Stratford School was dealt with very rapidly by my right honourable friend the Secretary of State.

In comparison, when I first became a Minister at the Department of Education and Science, almost the first school problem that crossed my desk concerned William Tyndale school. I remember it extremely clearly. It was an absolute scandal which was not dealt with by ILEA for a very long time. I do not believe that we can suppose for one moment that all schools under local authority control will be all right and that grant-maintained schools will not.

I hope that the Committee will not agree to this amendment. It is very important that grant-maintained schools should be given the opportunity to succeed which certainly requires more than five years. I believe that they will succeed in raising standards. The Committee should really address the very important questions about educational standards within schools which is the point of the whole Bill, instead of trying to find other ways of disposing of grant-maintained schools.

Lord Dormand of Easington

The Government's slip was showing right from the start in this matter. The man from Mars would have asked immediately: "With all this talk of opting out, what happens if it does not turn out to be such a wonderful thing? What can be done about it?" The man in the trim, dark suit and with a quiff replies: "Nothing, because it is so good and no-one will want to opt back in". That argument really cannot be sustained. Although I am against opting out and have made no bones about it —I shall continue to do so throughout the debates —I know as everyone else does, that some schools will be successful under the system and some will not. I return to my theme: opting out means getting away from, at best, an inadequate system and, at worst, out of the hands of those awful, dreadful, doctrinaire and bureaucratic local education authorities. Those are pejorative terms, and, I suspect, deliberately so in this context.

Much of the Government's legislation since 1979 has been directed against local democracy in the shape of the various types of elected councils, and that shows up especially strongly in this measure. Some of the arguments in favour of being allowed to opt back in are so obvious and simple that one hesitates to use them. They have already been put forward strongly by a number of Members of the Committee, but some, at least, have to be repeated. No one can say that all succeeding boards of governors will take the same view over the years. Some, for a number of different reasons—one has to emphasise this point—will wish to return to LEA control. That is as certain as night follows day, but the Bill's provisions would make it either permanent night or permanent day.

Of course the Government will say—I assume that this will be the major argument that we shall hear today—that we cannot have this chopping and changing. Schools, teachers, governors, children and parents will not know where they are. Without some provision, that, of course, would probably be the case, but the answer is that there must be a time limit to the period when opting back can take place. Part of the amendment suggests five years. I would go partly along the way with what the noble Baroness, Lady Young, said: seven years or even longer would not disturb me. In education, especially in schools, these matters cause a great upheaval. There is a need for a settling down period. However, five years to seven years seems to me an eminently reasonable period to bring about change, if it is thought to be necessary.

A mighty big change is soon to take place in local government. The review which is presently being undertaken by the Government will, without any doubt, bring about substantial changes which will include, among other things, the disappearance of some local authorities and a change in political control. Such changes will inevitably cause some schools to reconsider their position. New or different local authorities are a legitimate reason for schools to consider changing their status. Another reason occurs to me. We tend to believe that head teachers and governors are, if not perfect, adequate and competent to meet every task and problem put before them. I hope that I need not argue the case that some heads and some governing bodies do not meet those criteria. There are difficult heads—if I may use the word "difficult"—and difficult governors, just as there are difficult pupils. One way, and, indeed in my view it is the way, of meeting such a difficulty would be to opt back in.

There are then those who will say that the LEA may not be able to support such schools. As the Secretary of State would have to approve the proposal—one assumes that would be the case—I cannot visualise any circumstances in which he would allow a school to return to a local authority which could not support it.

The Government are showing remarkably little flexibility over this matter, and this is an excellent opportunity for them to demonstrate that they are willing to change. Those now famous words "freedom of choice" in that famous document just do not apply here. My noble friends have emphasised the fact that the essence of the amendment is concern for freedom of choice. I support that view. I hope that I have made it clear—if not, I repeat it—that I happen to believe that the system of grant-maintained schools, as visualised under the Bill, will be less effective than LEA control. I shall continue to believe that throughout the Bill's passage.

There are two factors involved, as I see it. If I am pressed by any Members of the Committee I would say that the first relating to freedom of choice is the more important. Despite all the fine words being used to justify opting out, the failure of so many schools to apply to become grant-maintained demonstrates the doubt that they have about losing the advantages of being an LEA school.

Let me assure the Minister, because of the exchanges that took place today on my Question, that my Question was put down a month ago. If she believes that I was able to anticipate a debate on the subject so early, then she attributes to me an ability which I do not possess. The fact that we have had—I call it a poor response, but I know that the Minister will disagree with me—what is, by any standards, a poor response to grant-maintained status, considering that 24,000 schools are eligible to apply, in itself justifies giving those who feel that a mistake has been made the safeguard of being able to change their mind. I strongly support the amendment.

Lord Boyd-Carpenter

There is one important point which none of the four Members of the Committee who proposed the amendment has cleared up. The amendment provides clearly that after five years it will be possible for a grant-maintained school to opt back into being local authority supported. But what is not clear is whether that can happen only once. If the amendment were included in the Bill, and the Bill became an Act, would it be possible for the school, after, presumably, another five years, to opt back to being grant maintained? Then perhaps after another five years it would be able to opt back, and so forth, indefinitely. That is an important aspect of the matter.

Is it contemplated that there would be one option, and one option only, if the amendment were enacted, or would it be a right that would appear and reappear every five years indefinitely? It is important to get that point clear. The otie thing that would be hopeless for the school would be for it to be changing over every five years between the two bases. One has to think especially in that context of the staff of the school. What would be the position of the headmaster, for example, and of other senior masters in a school which was alternating between two systems almost indefinitely?

On my reading of the amendment, it is not clear, and it has not been made clear in the speeches of those who put it forward, whether what is proposed is a once-and-for-all choice, or a choice on a quinquennial basis indefinitely. It is important to get that point clear and to get those who advocate the change to be clear in their minds as to what it is they propose, because, whereas one choice would be difficult, a regular choice every five years would plainly be catastrophic.

The only other point I wish to make is that one or two Members of the Committee have referred to the fact that some parents may well wish their child to go to a local authority-supported school. So far as one can see, in urban areas there will always be a choice between a grant-maintained or a local authority-supported school. It would be up to the parent to choose the particular school to which, in his or her view, it was sensible to send the child. Therefore there does not seem, except perhaps in remote country districts, to be any very serious point to be made about depriving parents of choice. Under the law as it stands, in all built-up areas parents will have a wide choice and be able to come to the decision that they want. That, I imagine, is what the Committee would wish to see.

Lord Renton

The point that worries me about the amendment—this is a fresh point not so far mentioned in the debate—is that, if opting out is to be possible, the original decision will be made upon a somewhat experimental basis, and that would be a bad thing. Clauses 20 to 34 deal with the original balloting, confirmation and so on, for obtaining grant-maintained status, and they contain careful safeguards. They will cause parents, governors and so forth to think most carefully before applying for grant-maintained status. However, if there is to be the possibility of opting out, even after five years, some parents who may find it difficult to make up their minds, will unfortunately say, "Let's have a go for five years". That would be bad and the argument is reinforced by what was said by my noble friend Lord Boyd-Carpenter.

Furthermore, I wonder whether it has occurred to those who are opposed to grant-maintained status that there may be more votes for grant-maintained status simply because it is to become experimental. That, too, would be bad. I suggest that there should be a degree of finality. If grant-maintained status goes wrong there are in Clauses 100 to 103 powers to enable the Secretary of State to withdraw the grant and to wind up the school. That is an additional factor which should be borne in mind. No, we should be aiming not at experiment but at finality.

5 p.m.

Lord Elton

I wish to endorse and to emphasise a comment made by my noble friend Lord Boyd-Carpenter and to tie it to the point made by the noble Earl, Lord Russell. The prospect in the curious borough of Brent is oscillation—violent, perhaps frequent and not always predictable—between what the noble Earl described as the loony Left and the raving Right. He asked what would happen if one of the extreme bunches were to capture the board of governors of a school and take advantage of the opportunity given under the Act and to opt for GMS—thereby one knows which faction the noble Earl was talking about.

Under the proposed amendment the prospect is that at some time on the unfortunate frail craft—that is the school—there will be the thunder of the boots of the opposite faction climbing on board. The tiller will then be swept hard over to the other side and the school will be taken back into the control of the local authority. No sooner will she have steadied on that course for a further five years when again the thunder of boots will be heard overhead. The crew will then cower, the children will be terrified and the ship will be turned back towards GMS. Everyone will know that that might happen. Therefore, the circumstances pointed out by my noble friend Lady Cox will appertain from the start and not to the finish because there will not be a finish. Forever that school will always be the prize to be captured by the "outs" from the "ins".

In order to prevent that happening the Committee should be persuaded by my noble friend and not by the otherwise attractive arguments of the noble Earl, Lord Baldwin of Bewdley. Both the noble Earl and the noble Lord, Lord Dormand of Easington, said at an earlier stage—and I told Members of the Committee that I should remind them of the fact when we reached this amendment—that we must have certainty and stability. They said that schools must be in no doubt about their future. The way to do that is to reject the amendment.

Lord Parry

Listening as we did with awe and admiration to the speech of the noble Earl, Lord Baldwin, we were taken logically through his considered opinions as to how we should advance. Since then some of the arguments have been specious and incapable of holding water. Some Members of the Committee opposite quickly contradicted themselves. In passing the Bill as a whole we are moving into an experimental situation. We are experimenting with the tried and trusted system of education, some parts of which have worked badly and inadequately and have been properly challenged.

We have heard repeated arguments which seize on bad examples of bad practice and try to make the case sound logical. If we are to create a system in which parents can opt out of local authority control there should, if democracy is to continue, be built into the system the equal and opposite opportunity to opt back at some point. The period of five years was notional and was thrown into the debate as it took place. To seize on that and to assume that every five years everyone will opt in or out as this or that local government system changes is to ignore the fact that an experiment is taking place as regards the total reorganisation of local government.

I urge the Committee to treat the amendment not in a specious and party political way, as it has been by Members opposite, but on the basis of the terms used by the noble Earl, Lord Baldwin, when he moved it.

Baroness Perry of Southwark

I am grateful to Members of the Committee opposite for raising the issue of children in the schools. I too wish to register my deepest anxiety about the amendment and the effect that it would have on pupils in schools. The Committee is united in its concern to remove the degree of turbulence which for various reasons is currently being experienced in our schools. I could not bear to think of the prospect of our children being dragged through the process of changing from one status to another every five years.

Surely all Members of the Committee, whether or not they are antipathetic to the principle of grant-maintained schools, must want those schools to succeed because if they fail the children within them will fail. We must in every way possible ensure that once the schools have chosen grant-maintained status they succeed. If they are to succeed everyone must be fully committed to working with them as they are. If there is a simple escape route and if as soon as circumstances become difficult it can be said, "Never mind, we can always go back into the arms of the local authority", there is the minimum motivatidn for people to work with the school and to make it succeed. I hope that the amendment will be rejected.

Lord Pearson of Rannoch

I, too, wish to oppose this somewhat beguiling amendment. I do so for several reasons but perhaps in particular for the reason mentioned by my noble friend Lady Cox and others. Allowing schools to have the prospect of opting back into LEA control would inevitably prolong the very unpleasant intimidatory atmosphere and the tactics which some LEAs have been using against governors, parents and teachers to persuade them not to opt out.

As I said on Second Reading, dishonourable resistance to grant-maintained status would not appear to have been confined to Labour-controlled LEAs. I understand that Hampshire, Hereford, Worcestershire and East and West Sussex have all been guilty of using large sums of public money to lobby against GMS. But I believe that it is when we come to consider Labour-controlled LEAs that the tactics become somewhat more serious. I must say that when some Members on this side of the Committee dare to mention the viciousness of the hard Left in our state system of education I am always surprised by the show of apparent disbelief and protest which comes from the Benches opposite. Of course, I have to accept that Members of the Committee opposite are acting in good faith. I should not dream of suggesting that they are not doing so. But, by the same token, I have to assume that they are genuinely not aware of the behaviour to which I refer. I hope that I shall not be considered too rude if I say that the thought does occur to me that perhaps they do not look for it all that diligently, and that is perhaps understandable.

On this occasion my noble friend Lady Cox mentioned a very brave lady in the shape of Mrs. Yasmin Ahmed and the tribulations which she has been put through by the attempt of Toll Bar School to opt out. That reminds me that I first met Mrs. Ahmed some 10 years ago when she lived in Haringey. At the time she and other parents in Haringey were bravely fighting against their local education authority's policy of what came to be known as "positive images". That, as many Members of the Committee will recall, was the ardent promotion of homosexuality, often to very young children. Mrs. Ahmed and her friends rightly found it most objectionable.

I had the privilege of helping Mrs. Ahmed and her friends to form the Haringey Parents' Rights Group. In that capacity I observed at close quarters the virulent beastliness of the hard Left within Haringey LEA. I do not know whether to trouble the Committee with too many examples of that kind of behaviour but, for example, my friends were shouted down at council meetings, they were urinated upon from the gallery at the same meetings and they and their children were threatened with violence in person and by telephone.

This sort of behaviour in support of positive images was not confined to Haringey. It was widespread throughout the country and it was encouraged by the Left-wing controlled Labour LEAs, by elements of the Association of Metropolitan Authorities, by elements of the Left-wing teaching unions and so on.

I mention all that because I am sure that I smell the same fraternity at work in the more vicious opposition to opting out. Once again, it is not good enough to pretend that the sort of behaviour referred to by my noble friend Lady Cox and others is confined to one or two exceptional LEAs because, as with the promotion of positive images, it appears to be endemic in the Labour LEA system.

The noble Lord, Lord Dormand of Easington, asked earlier in the Committee stage of the Bill for examples of the sort of unacceptable behaviour of which we accuse LEAs, and particularly Labour LEAs. I have here some 40 examples of the sort of thing that we are talking about and they emanate from some 30 Labour controlled LEAs. My noble friend Lady Cox has given some examples and so, for my part, I propose to put in the Library only a brief summary of some of the cases which I have mentioned. If the noble Lord, Lord Dormand of Easington, or any other Member of the Committee opposite feels that any of those cases do not represent examples of inappropriate action by Labour controlled LEAs, I should be very happy to hear from them.

In the meantime, I submit that those examples confirm the kind of atmosphere which will continue to surround the opting out process if this amendment is accepted; and so I very much hope that the Committee will not accept it.

Lord Addington

I should like to intervene briefly in this slanging match which seems to be taking place between the two 'sets of Benches. We are not talking about what has happened or what could happen occasionally. We are talking about future plans. Two alternative systems of schools are operating. We have heard a great deal about parental choice and about the marketplace. Thus, we have a situation in which it is logical that you can choose one or other of the systems. Also, it is logical that in the marketplace, if you make an inappropriate choice, you can change. If we try to remember that, we may possibly make some headway.

Also, if the Government had chosen one system and had elected to work with that system, much of our discussions today would have been unnecessary because we should know how authorities are to be divided up and who will take over certain activities within the educational system. I believe that at least 50 per cent. of the debate on the Bill so far would have been superfluous. Therefore, I suggest that the noble Earl's amendment is totally within the spirit of the Bill and is totally appropriate to it.

5.15 p.m.

Lord Renfrew of Kaimsthorn

A number of Members on this side of the Committee have been willing, as am I, to concede some elements in logic to the case put forward by the proposers of the amendment. Certainly my noble friend Lady Cox made that point. I too see that it is extremely final to suggest that a school should never be able to reconsider its position and never be able to consider the possibility of returning to local authority maintained status.

However, a point which a number of Members of the Committee have emphasised—and the noble Lord, Lord Dormand of Easington, was one of them —is that schools need a measure of stability. In my view, a period of five years is totally inappropriate. When a school changes, it needs to feel that for the foreseeable future it has a stable system of school government and it knows where it stands. Inevitably it will take a year or two for the school to settle down within the grant-maintained system and, lo and behold, on the horizon—

Lord Judd

I am grateful to the noble Lord for giving way. If he is as concerned as he claims to be —and I am sure that he is—about stability, how does he reconcile his position on this amendment with supporting a government position whereby, if the school does not make the right decision in the Secretary of State's mind in any one particular ballot, it can be required to consider voting year after year until it does make the right decision? How does the noble Lord reconcile those two positions?

Lord Renfrew of Kaimsthorn

I take the point which the noble Lord, Lord Judd, makes that there is likely to be continuing debate about the status of a school under the present recommendations. However, the stability to which I was referring, which is ultimately of greater importance, is the stability of the regime of the school. The damaging aspect is that schools will be oscillating with a five-year periodicity.

The noble Lord, Lord Dormand of Easington, was moving towards that position and that is why I mentioned his name. A period of 10 or 15 years might be a much more feasible proposition. If the word in the amendment were "fifteen" rather than "five", I should be willing to support it. However, if we are not careful we shall be in the position in which one finds oneself in regard to American presidential elections. Before one President is elected, people are already beginning to debate who the next President will be. I realise that that is four years rather than five years, but five years seems to be an unrealistically short period.

That is particularly so when one takes into account not only the status of individual children but also the status of individual teachers. Some teachers will prefer to teach within a school of one kind or another and will deliberately seek recruitment into such a school. It will do them no good at all to be thinking in terms of a five-year timescale when they are naturally thinking about their own status and their own career prospects within a school. They should be able to think in terms of a decade or considerably longer.

I believe that there is a case in logic being made by the proposers of the amendment. I should support the amendment if the time were 15 years rather than five years. However, a period of five years offers a process of endless oscillation and disputation which would be damaging not only to the pupils and to the parents but also to the staff of the school.

Lord Dormand of Easington

Before the noble Lord sits down, perhaps he will give a more specific answer to the question asked by my noble friend Lord Judd. At present the Bill says that a governing body is compelled at least once a year to consider the holding of a ballot. There is no freedom of choice. Will the noble Lord deal more specifically with that point, because he rather brushed it aside?

Lord Renfrew of Kaimsthorn

Once 15 years have elapsed, I should be happy for there to be an annual ballot about the return of the school to local authority governance. The point which I am making is the undesirability of the governance of the school oscillating on a five-year periodicity. I am not concerned about how often the matter is discussed but about how often it happens.

If we take the logic of the amendment and call it 15 years rather than five years, then once the school has settled down into that system, by all means let there be an annual debate about it. It is not the annual debate to which I object but the oscillation in the governance of the school.

The Earl of Strafford

It cannot be right that schools cannot change their status for all time. That is what the Bill suggests. As the noble Lord, Lord Renfrew, and others have quite rightly pointed out, the weakness of the amendment is the timescale. I should have thought that we could reach a consensus that 10 or 15 years is a reasonable time for a school to adjust to change and then it should be allowed to reconsider its position. I believe that the Government should include such a provision in the Bill.

Earl Russell

I listened with great interest to the remarks made by the noble Lord, Lord Renfrew. If the noble Baroness would indicate that a longer period of time makes the amendment more acceptable, I think that that would be helpful to the Committee.

Baroness Blatch

I shall certainly touch upon that matter before I finish my response to the amendment. But, first, perhaps I may tell Members of the Committee that I am exceedingly touched by the outbreak of democracy on the question. If noble Lords opposite really mean what they say—namely, that this is only about choice, and democratic choice at that—I would have been more impressed with the case that they put forward if they had supported this side of the Chamber in allowing parents to exercise their democratic choice to go into the grant-maintained sector in the first place.

Members of the Committee opposite make no secret of the fact that they start from a position of being anti grant-maintained status. The energy they are using now is not about extending democratic choice. It is about how to scupper the policy of the Government. If Members of the Committee will give me time, I shall explain what I mean.

I am sorry that the noble Lord, Lord Addington, rather disparagingly referred to my noble friend having a slugging-out match with noble, Lords opposite, along with a passing reference to my noble friend Lady Cox. The stories that they recounted were examples of the totally real experiences of real people trying to exercise their democratic rights under the law. That is not slugging something out; that is speaking with conviction about a policy which they support. They feel that if we believe in the extension of democratic choice we should allow parents to exercise that democratic right without being intimidated.

I take the point made by my noble friend Lord Boyd-Carpenter about the five-year period flip-flopping in and out of the sector. Let us imagine 1993 after Royal Assent when the provisions of the Bill will be triggered. Some schools will be close to being able to exercise that right. By 1998 the school may opt back to what may be a very different local education authority. That point was made by the noble Lord, Lord Dormand of Easington. Indeed, the local education authority which the school left may not even be there. Moreover, if a unitary authority takes its place, it may be a totally different body. Come 1999, the school decides to opt back to grant-maintained status. But, by 2004, the school may opt back to an even more different local education authority. By the year 2005, we are back again to opting in. Is a flip-flopping in and out of the LEA control really what we want?

The noble Lord, Lord Judd intervened during the remarks of my noble friend Lord Renfrew of Kaimsthorn about the annual ballot. If we really did believe in democracy, why is it that we require governing bodies to do anything as draconian as to consider in one meeting a year whether it is appropriate for that school to seek, on behalf of the parents, grant-maintained status? That is all that is required. That is not undemocratic. It is saying to the parents annually at their meeting, "We have considered this. We have taken the view that it is a good idea and we would recommend that we now start the process", or, "We have considered it and for the following reasons we do not believe that this is the road down which we should go". At least the parents would know what their governors were thinking on the issue. I give way to the noble Lord.

Lord Dormand of Easington

I am grateful to the Minister. I shall be very brief. Why make it compulsory?

Baroness Blatch

Because we believe that it is right that the parents should have some information about how the governors are thinking. In fact, the noble Lord has given me the answer. He said—and it was refreshing to hear him say it—that not all head teachers are good people and that not all teachers are. Indeed, he said they are good, bad and indifferent, just as other people are good, bad and indifferent. He added that that applied also to governing bodies. There are some governing bodies that would never broach the subject unless we made it a requirement upon them to do so. We make it a requirement that they should only consider and then give their views to parents and the Government. There is nothing undemocratic about that. In fact, it is a protection of the interests of the parents. What is crucial at the end of the day is real democracy. It is for parents to vote, not governing bodies.

It is worth correcting figures that were bandied around the last time we debated the strength of parental choice. Out of the 1,044 ballots which have closed to date, 93 per cent. had turn-outs of over 50 per cent. the first time round. Of the 75 ballots that did not achieve 50 per cent. the first time round, 45 achieved a 50 per cent. turn-out the second time round. That means that 97 per cent. of the ballots to determine whether a school should or should not go grant maintained produced a turn-out of over 50 per cent. Of the remaining 3 per cent., in over half—we aretalking about a very small number—the turn-out improved in the second ballot. So the strength of voting is very good. Indeed, the average turn-out in ballots that did determine whether or not a school should seek grant-maintained status was 64 per cent. Let us compare those figures with the average turn-out in local government which is barely 40 per cent. We have here governing bodies achieved through the parents, who are the consumers of the school system, making the judgment.

What really matters—as comments during the debate, including those of my noble friends, have shown—is the kind of school it is. That is where we should direct our energies rather than concerning ourselves with a hollow outbreak of concern for democracy from the Benches opposite.

The Government have made their policy on grant-maintained status clear. There should be the opportunity at each school for parents to seek grant-maintained, Status and to move out from the LEA umbrella when they deem it ready. That has not been presented as anything other than a lasting and definitive move for self-government. We have never hidden that fact. As the White Paper indicated, the Government firmly believe that self-government is best for state schools and we remain firmly committed to that end. We have not taken the road along which we were tempted by noble Lords on the Liberal Benches and made every school become grant maintained. We believe that that is a choice which should be exercised by parents.

Parents know when balloting that they are being allowed to choose the appropriate form of control for that particular school, now and for the future. Parents have that option—an option which was not even available before the 1988 Education Reform Act. The option is clear and the decision to seek grant-maintained status is only made when each school is ripe for grant-maintained status. Indeed, we make it clear in the information leaflets that go to schools when they are seeking grant-maintained status that they are making a decision for all time. There is no hiding that fact at any point.

I emphasise to noble Lords that this is a choice by parents, and that they have the option of seeking grant-maintained status. The Government are not forcing parents to seek grant-maintained status: it remains a voluntary decision for them. The Government are committed to ensuring that parents receive full and balanced information on the subject of grant-maintained status which will give them every opportunity to make an informed decision when voting in a ballot. If, for whatever reason, parents are not convinced of the merits of grant-maintained status for their school at a particular time, they are perfectly able to vote against the motion and to reconsider at a later date. Indeed, some of them do just that.

The Bill is about choice, diversity and meeting local needs. Parents have the choice, as exercised through the ballot and further confirmed through proposals, before a school obtains grant-maintained status. Having exercised that choice, it is only reasonable to allow the school to settle down in order to operate at its best under its new status. I note that the amendment suggests that there should be a period of five years before a school could seek to relinquish self-government. I appreciate the intention of that period of restriction on the length of time between ballots. Clearly, it is supposed to limit disruption, but I cannot agree that the length of five years would sufficiently meet concerns about the stability of a school which had assumed self-governing status. How could stability be achieved if at the end of five years the governing body had to change its system of ' management and funding arrangements, knowing that in another five years the system could be changed yet again? A school could be continually switching, as I have said, from one form of control to another, causing perpetual change in the system of management, which would be in the Government's view and in my view a recipe for disruption. Once the choice for self-government has been made, it is only fair that the school should be given every opportunity to stabilise and progress under its new status.

I must come clean with my noble friend Lord Renfrew of Kaimsthorn. I will not join him in the Lobby if this amendment returns to this House with a proposal for a 15-year period. The decision we are discussing is properly thought out and it allows for a full gestation period and a proper consideration. After all, it is the good running of the school with which we should be concerned. The school takes a considered view over whether it would like more control over its own affairs. That is what the decision is about.

The provisions of the Education Bill are intended to last a good deal longer than five years. We should ask what are the practicalities of a system that would allow schools to shuttle back and forth in and out of local authority control. Such a decision to keep seeking change could mean a lack of continuity. Our Bill will provide that, when 75 per cent. of secondary (or primary) pupils in an LEA are in grant-maintained schools, responsibility for securing sufficient secondary or primary places for the area will transfer to the Funding Agency for Schools, though an LEA may apply to be relieved of this responsibility at an earlier stage. There is already one local authority beyond the 75 per cent. point and a number are very close to it.

Bearing this in mind, let us look at the possible effect of this amendment in an LEA where the trigger has been reached, or indeed where all of the LEA's schools have achieved grant-maintained status. What if one school then, for its own reasons, decides to relinquish self-government and be maintained by the local authority which has already run down its services for controlling either primary or secondary schools? In those circumstances we should not forget that when an LEA ceases to be the umbrella body for schools in its area, it is unlikely to continue to be staffed-up to manage schools. The LEA may itself have reorganised better to meet functions other than maintaining schools. It would have to look again at re-organising in order to manage one school and potentially others. Having relinquished responsibility for most of the pupils in the sector, it would have to resume responsibility for some of them. The school's resources for central administration would have to go to the LEA. In the circumstances the LEA might decide that maximum delegation of those resources would be sensible; then what advantage would there be for the school to return to the LEA maintained sector? Overall, opting back and forth would be a recipe for little but chaos and confusion, producing a total lack of stability in which to manage a school to deliver quality education. If the LEA is reluctant to take the school back what could be worse than the school opting back to an LEA that does not want to control that school? Is that a good arrangement for a school?

The noble Earl, Lord Baldwin of Bewdley, was exceedingly selective in his quotation from the Ofsted Report published at the end of March. For while Ofsted does not yet (I underline the word "yet") observe statistically significant differences in performance between grant-maintained schools and local authority schools with otherwise similar characteristics—that is for the obvious reason that the schools in question had hardly been in the new sector for any length of time—nevertheless it observed many improvements in grant-maintained schools that give grounds for confidence for the future. In particular the report noted: improvements in the allocation of resources within schools; an increase in provision especially for books and equipment; improvements in teachers' morale, pupil discipline, general attitude and school ethos; doing more for allowing school premises to be made available to local communities and taking more than their fair share of children with special needs". All of those observations strike me as absolutely correct. They confirm my own observations obtained during my visits over the past year to local authority and grant-maintained schools. I conclude that self-governing status will lead to higher standards in our schools.

The noble Earl, Lord Russell, was concerned about the position in Stratford. While that was a regrettable situation, Stratford was a good example of how a governing body was taken over by the system provided by us and brought back on track in good time. My noble friend Lady Young reminded us all of the years during which the children of William Tyndale School were allowed to be subjected to the most appalling conditions when the school was failing them. The LEA did absolutely nothing about that.

My noble friend Lady Cox and my noble friend Lord Pearson of Rannoch both gave examples of schools. I wish to give one more example which concerns Derby Moor Community School. We in the department were most disturbed at the nature of the complaints which were brought to our attention. We find it highly regrettable that third parties apparently sought to interfere in the ballot process. There were allegations that parents have been intimidated on their own doorsteps and the Electoral Reform Society subsequently reported to us indications that ballot papers had been tampered with. I do not wish to name names but in different complaints alleged bullying tactics have been adopted to persuade voters to vote in a particular way. There have been allegations of attempts to collect ballot papers and attempts to get unauthorised people to complete ballot papers. There have been substantial campaigns of misinformation in which statements have been made where the intention seemed to be to alarm parents who were taking part in a ballot on the future of their own children's school. Those complaints are not dreamt up; they are real. Members of the Committee opposite cannot keep burying their heads in the sand and pretending that these things do not happen.

The noble Lord, Lord Dormand of Easington, talked about chopping and changing. It is precisely that argument that we are deploying here against this amendment. The noble Lord referred to the work of the Local Government Commission. The LEAs we are discussing may not exist in the same form as they existed when schools left their control. They may not exist at all as a whole new authority may have taken their place. Indeed a local authority may not even want a grant-maintained school to come back under its control.

5.30 p.m.

Lord Dormand of Easington

The Minister has only half-quoted me. She is aware that I went on to suggest that a period of five, seven or even nine years might be more appropriate. The Minister should have added that.

Baroness Blatch

That is still a short time in the life of a school. The point has already been made that when staff are recruited they like to think that their school will retain its identity. I put my cards on the table. I do not believe we should place any time limit on this matter. We should make the system democratic and people should make their own choices. I end where I started. I believe that this Government have done more to take the politics out of governing bodies than was hinted at by the noble Earl, Lord Russell. There are more parents on governing bodies now than ever before. They are elected to the governing bodies by parents. There are more teachers on governing bodies than ever before and they are elected to governing bodies by teachers. The governing bodies themselves fill vacancies. That is not an undemocratic system. It gets away from the former system of local government appointees. Formerly when an entire LEA became Conservative, it took over all the governing bodies in its area, as did Labour if it took over an entire LEA. That politicisation has now been removed from the system. I believe that this amendment is an important amendment. I hope the Committee will now agree that this matter could not have been dealt with at Question Time as we could not have done justice to this point.

The Shadow Minister responsible for education in another place has said: We oppose opt-out in principle because it is wrong. It is wrong in principle for a group of parents to be able to hijack a school". I rest my case. This side of the Committee believes in a democratic process that was violently opposed by the other side of the Committee. We believe that that democratic process should be allowed to go ahead. For the sake of stability and for the sake of good schooling we ask that this amendment be rejected.

Lord Judd

I am diffident about intervening again in this debate because we have an extremely long night ahead of us. The amount of time available to us to give these vital matters of democracy and education the attention they deserve will be all too limited, as indeed it was in another place.

I begin by making the point that when the Labour Party spokesman on education in another place, Mrs. Taylor, made the observation to which the Minister referred, she was making an honourable point in the context of democracy. She stated the position of the Labour Party. The Government stated the position of the Government. In the traditions of our democracy the public as a whole should then be given an opportunity in a democratic election to decide which they favour. We do not accept the business of attrition, to which we have already referred in these proceedings, whereby if people in a particular school do not make the decision which the Government favour, they will be asked to continue voting on the issue year after year until they do.

Baroness Blatch

I must correct the noble Lord. There is nothing in the Bill which requires parents to vote for grant-maintained status. I have said that a great many times but the noble Lord refuses to believe it. All that is asked is that governing bodies consider whether to start the process. It is the parents who ballot and the parents who determine whether or not to seek grant-maintained status.

Lord Judd

The Minister is quite correct. The Bill says that every year the governing body will be required to consider the matter. However, it is a little disingenuous of the Minister to suggest that that is merely an academic debate which will take place every year and that it is not intended to bring about a vote. The Minister shakes her head, but I do not see the point of taking up the time of governors in their voluntary service if the intention is not to try to secure a different outcome from that which was achieved on the previous occasion.

I turn now to one or two substantial points which have been raised. The first point is that when the Minister says that the Bill transfers democracy from traditional democratic structures to parents she must make it plain that power is being transferred to one generation of existing parents. That is the point. In this part of our deliberations we question whether that one generation of parents should be able to make a decision, which is irreversible, for all future generations. That is the issue: If we are moving to a form of parental democracy in schools then it must be a form of democracy which takes into account the future, and future generations, as much as the present. That is the issue, and it has not been answered at any point in our deliberations so far.

I should also like to pick up the point made by the noble Baroness, Lady Cox, and others. I would take second place to nobody in my unqualified condemnation of intimidation, as I would take second place to nobody in my condemnation of ballot rigging in any form or any attempt at ballot rigging. However, surely the reason for our condemnation is that we believe in freedom and democracy. We should therefore be considering how we can enhance that freedom and democracy. As the noble Earl, Lord Russell, said so tellingly in the debate, the paradox in what we are putting forward is that we shall be producing a more secure environment, in which parents can make a more objective decision about the future because they know that they will not be binding all succeeding generations of parents for all time and that succeeding generations will have the opportunity to return to the issue and make their own decision. That is also an important point which has not been dealt with adequately.

Another point came out in the debate, which the noble Baroness, Lady Young, emphasised in talking about education becoming a political football. She will know that I have a genuine and deep personal respect for her and her contribution. Indeed, we serve together on the governing body of a college of education and see a great deal of each other. I have a great deal of respect for the commitment and experience which she brings to that role. However, I am a little surprised by the noble Baroness, as I was by the noble Lord, Lord Renfrew. They suggested that there is a difference in character between the degree of instability which results if the possibility of reverting from one status to another is being debated and that which arises when parents, teachers and children are anxious about such a bothersome debate arising yet again each year, and using up a great deal of time and energy, and whether they can be certain that their school's present status will continue.

Lord Renfrew of Kaimsthorn

I thank the noble Lord for giving way. I should like to reiterate the point that I made earlier. The stability to which I referred is in the governance of the school. The debate can be as lively as one wishes, but I am concerned that the school should remain in a system of governance for a sufficient period of time to settle down for the forseeable future.

Lord Judd

That is where I find the noble Lord's position ludicrous. The governance of the school will be every bit as disturbed by a debate as to whether or not the governors want there to be another vote as it would be by a debate on whether or not the school was to change its status. That would be a real debate and very disruptive. I do not believe that the noble Lord, with all his experience of the reality of the politics of educational institutions, does not know exactly what I am saying on that point. Of course he does.

I return to the central issue about which we feel very deeply in putting forward this sincere and genuine amendment. We believe that we must have a system whereby, if democracy is given to parents, it should be given to all parents and not just one generation.

Earl Baldwin of Bewdley

We have had an interesting and hard fought debate and have covered just about every point there is to cover on this disputed topic. I have been called plausible, enticing and beguiling. I am not sure whether to take those remarks as compliments, or perhaps they referred to my arguments.

I should like to pick up a few points made by one or two of the speakers before addressing the Minister's remarks. In doing so I shall reinforce some of what the noble Lord, Lord Judd, said. Like the noble Lord, I do not deny the experience mentioned by the noble Baroness, Lady Cox. I condemn it as strongly as anyone. That was echoed by the noble Lord, Lord Pearson, and others. That experience is thoroughly bad and must be condemned. However, that cannot be a reason to deny all parents everywhere their choice for all time. It seems to be a case of hard cases making bad law. When one puts it against what we are principally standing out for here—namely that parents should be allowed to choose—bad though everything that has been said in that regard may be, I do not believe that intimidation is endemic to LEAs rather than to any other system. But to deny all parents everywhere their choice on that basis is not right. After all, even intimidation is better than no choice at all.

Noble Lords

No!

Earl Baldwin of Bewdley

Parents have no choice to come back under the present scheme.

The noble Baroness, Lady Young, pointed out that it was the opponents of grant-maintained status who were making the running in this debate. So it is, but we hold a brief for those many parents and governors who, as I said in my opening remarks, share our view. Therefore, it is not only on our behalf that we are making this case; it is on behalf of parents who also feel as we do about grant-maintained schools. Statistically there are bound to be a great many of those.

We have dealt briefly with the question of parents or governors playing ping-pong, or flip-flop. The noble Lord, Lord Boyd-Carpenter, raised that issue. One point that has not been made is that all such proposals have to go to the Secretary of State, quite apart from the fact that I do not believe that the governors and parents themselves, if one trusted them, would be foolish enough to become involved in such a game. There is always the long-stop of the Secretary of State. Therefore there is a double check against any untoward instability in schools going backwards and forwards.

I was as attracted as other noble Lords by the idea of the noble Lord, Lord Renfrew, of lengthening the period, because I would not nail my colours to the mast on five years. For an exciting moment I wondered whether the noble Baroness would accept that proposal. She did not, and it has gone down the drain and there is no need to talk about it further. There would have been a case for extending it.

I was a little confused by the remarks of the noble Lord, Lord Renton. He argued that it was hard to opt out and quoted all the clauses relating to opting out, but without mentioning that we have made it harder to opt back in again. Therefore it is not as though people would be saying, in his words, that "Opting back is experimental, let's give it a go". It is a union in the same sense as anything else in life. Do people go into marriage saying, "There is always divorce, we can always get out if we want to"?

Lord Hailsham of Saint Marylebone

Some people do!

Earl Baldwin of Bewdley

It is one of those decisions in life—is it not?—which in practice can be reversed if things go wrong.

The noble Lord, Lord Elton, made this point. It is one of the chief points I wish to raise. If one gives people a choice one takes risks. They are inseparable. One cannot give people a choice and then expect them to do everything perfectly. That is not how democracy works. I accept that if one gives parents the choice to opt back, as we suggest, there is the risk that some rogue people will cause disruption. They may exercise their choice badly. They may not like grant-maintained status, or whatever. That risk is inseparable from giving people choice.

Much of the debate went off that basic point with many interesting red herrings. They have occurred in debates on previous amendments and will doubtless arise again. The issue comes back to the question of choice.

I always admire the Minister, in particular the way that she makes the very best of a not very good case. She referred to motives again. The less said about that the better. According to the Minister, we—perhaps not myself, but the party opposite—were not the right people to talk about democracy, the grant-maintained issue and so on. I shall leave that matter on one side: it is, I believe, a red herring. We should be looking at the merits of the case.

I agree with the Minister that it matters what kind of school it is and what goes on in it. We hold different views on the types of school but I am at one with her on that factor. The problem is the one-way approach. I believe that the noble Baroness has much in common on this issue with the late Henry Ford: you can have any colour so long as it is Blatch!

The Minister raised the point that if a school wished to opt back and there was not much of an LEA to opt back to, that would be a bad thing. Of course it would. If there were no proper home to go to, no governing body in its right mind would seek to opt back. If it did, it would be foolish; and the Secretary of State is a long stop to prevent that. I do not believe that there is much in the argument about what one opts back into. No one would wish to follow such a course; and one has the Secretary of State as a long stop.

I conclude on the basic principle of parental choice. We went round the houses with many interesting arguments. I had sympathy with the intervention by the noble Lord, Lord Addington. Many noble Lords opposite argued in the manner of special pleading. They sought to get round the fundamental point. It comes down to the basic question of giving parents a choice which should not be irreversible.

I have not sensed any give from the Government —quite the reverse. For those of us who believe in the amendment, I do not consider that there is any alternative but to test the opinion of the Committee.

5.53 p.m.

On Question, Whether the said amendment (No. 157BB) shall be agreed to?

Their Lordships divided: Contents, 106; Not-Con tents, 169.

6.1 p.m.

Schedule 5 [Governing bodies of grant-maintained schools]:

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley) moved Amendment No. 157C:

Page 177, line 26, at end insert: ("( ) In the case of a governing body incorporated under Chapter IV, any governor of an elected category appointed before the date of implementation of the proposals shall hold office for the prescribed term.").

The noble Lord said: This amendment concerns parent and teacher governors in schools which are established as new self-governing schools by the funding agency or by promoters. To set the amendment in context, it may be helpful if I explain some of the arrangements surrounding how the governing bodies of such schools are established.

When proposals for the establishment of a new school have been approved, the funding agency or the promoters will put together a list of appointed governors who will form the core of the governing body. These appointments are subject to the approval of my right honourable friend the Secretary of State. There may, however, still be a number of years before the proposals are due to be implemented. During this period the governing body should not consist solely of appointed members: other governors, such as parent and teacher governors, will also be needed to provide the necessary balance of interests on the governing body.

Clearly there will be no pupils or teachers before the implementation date: parent and teacher governors cannot therefore be elected in the normal way. The Bill therefore provides that, before the date on which the proposals are implemented, the governing body can appoint such governors. Regulations will, of course, ensure that these appointees satisfy certain requirements. For instance, we may regulate for any person appointed as a parent governor to be the parent of a child of compulsory school age; and for appointed teacher governors to satisfy the requirement that they would be eligible to serve as a teacher at the school. I think the Committee will agree, however, that these appointments should be temporary, stop-gap measures and that appointed governors should be replaced by suitably elected governors as soon as is reasonably practicable after the establishment of the school.

This brings me on to the amendment itself. As the Bill stands, all parent and teacher governors in a school being established as self-governing will have terms of office of four years. This could lead to a parent or teacher governor being on the governing body of the school for a number of years after it is established without necessarily being representative of the usual electoral bodies. The amendment will allow us to make regulations to specify the terms of office of these appointed parent or teacher governors. This will also allow us to determine precisely how soon after the electorates are in place normal elections should be conducted.

Without wishing to prejudice the process of consultation that will take place on those regulations, we feel that it would be appropriate for elections to be held in the first term after the school is up and running. This requirement would mirror that for schools being established in the LEA sector.

The amendment merely ensures that the parents and teachers in new schools have the opportunity to elect representatives to the governing body as soon as the school is established. I beg to move.

Lord Judd

Can the Minister clarify and underline one or two points? First, I notice that the length of office is not stated in the amendment. Can he comment and clarify the situation? Can he explain whether there is an additional power for the Secretary of State in that respect and, if so, what it would be? For example, could he prescribe an extension?

I also wonder whether the Minister could clarify the point that as the provision applies for an incorporation, that is before the school is functioning, we need to know in some detail how parent and teacher governors are to be elected.

Lord Henley

Details of how the parent-teacher governors are elected is something we will come to later. As regards the first question, the noble Lord asked for how long the new governors would be appointed. As the noble Lord appreciates, the first governors have been appointed. The point of the amendment is so that we can make provision to elect new governors representing the parents, as I suggested, as likely as not following consultation in that first term. So there are properly elected parent governors representing the parents of the school. They would then, I believe, remain in office until the usual elections the following year, or whatever, in the normal way.

On Question, amendment agreed to.

[Amendment No. 158 not moved.]

Baroness Blatch moved Amendment No. 158A: Page 178, line 4, leave out from ("among") to end of line 6 and insert ("persons who are eligible to be lay members. ( ) A person is eligible to be a lay member for the purposes of sub-paragraph (4) above if—

1. (a) he is a person without personal experience in the management of any school or the provision of education in any school (otherwise than as a governor or in any other voluntary capacity); and
2. (b) he does not have, or has not at any time had, any connection with—
   1. (i) the school, or
   2. (ii) any person who is a member of, or employed by, the governing body of the school,
   of a kind which might reasonably be taken to raise doubts about his ability to act impartially in relation to the school.").

The noble Baroness said: The effect of this amendment is to remove the requirement that lay members of admissions appeals committees of grant-maintained schools be appointed from a list drawn up by the Secretary of State and appointed. Perhaps the Committee will forgive me saying so but it was a rather bureaucratic system. We now believe that the requirement that lay members must be appointed from a central list is too bureaucratic a solution to the problem of ensuring that lay members are properly independent. We believe that it would be more within the spirit of local management and local discretion to allow admissions authorities to make their own choice, subject not to the appearance of the desired candidate on a list held by the Department for Education, but rather to certain safeguards designed to help ensure that the individual is truly independent.

We propose to table a further amendment at Report stage which will require governing bodies and local authorities to seek applicants for lay member positions by advertising the criteria, for example, in local newspapers. We believe that this will act as a further safeguard to help ensure that lay members are independent and comply with the spirit of the Parent's Charter. I beg to move.

Lord Judd

As I understand it, the original idea, when the Parent's Charter was put forward, was that appeals committees for hearing appeals from parents against governing body and LEA decisions over school admissions and permanent exclusions should include independent members. That was to ensure that parents had a fair and independent hearing. However, in the deliberations I seem to recall that it was felt that as members of appeals committees were chosen by governing bodies and LEAs, they would not appear to be sufficiently independent.

Then it seemed to me that we progressed to the position where it was learnt at an early stage that what was then envisaged was that the public appointment unit and the Cabinet Office would maintain the list. However, when the Bill was brought before us, it provided for the Secretary of State to maintain the list.

I should like to be quite clear about this point. The amendments obviously remove that responsibility from the Secretary of State and define "lay members". There seems to be a slightly different definition for grant-maintallied schools compared with that for county and voluntary schools, although perhaps that is not of major concern. It will cheer the Minister up when we say that this proposal can be welcomed, in that the Secretary of State must have seen at long last that there is a limit even to his capabilities, powers and responsibilities. It would certainly be an impossible task to maintain a central list of perhaps 5,000 people to do this work on paltry expenses.

However, the solution of defining an independent member as a "lay member" is not altogether satisfactory; after all, presumably that member will be chosen by governing bodies and LEAs and thus the problem identified in the Parent's Charter will not be met. I wonder whether the Minister can clarify the situation.

I wonder also whether the Minister will clear up one point of detail; namely, will a lay inspector, under the terms of the Education (Schools) Act 1992, be able to be a lay member for the purpose of Schedule 15?

Baroness Blatch

I am not certain of the answer to the final question, but I shall let the noble Lord know. It is an interesting question. I suspect that the answer may be yes, but I shall not guess at it at the Dispatch Box.

I detect a meeting of minds about the principle of having lay membership, the principle of independence and the need to have as little bureaucracy as possible surrounding the issue. The noble Lord is right when he refers to the thousands of names that would need to be held centrally, whether it is a matter for the Cabinet Office or for my right honourable friend the Secretary of State. As the noble Lord will know, it is not just a question of keeping a list. Every time a school wished to appoint a lay governor to an appeal committee it would have to refer to the whole of the list and choose from it; there would have to be biographical details, contact points and so forth. So we thought that the matter would be better managed at a local level. I must say that I have some personal claim to trying to make the system more manageable.

We have taken the view that we ought to set down very firm criteria about what is meant by independence—in other words, it should characterise someone who is not a member of the local authority and has not had any connection with the school. At the end of the day, whoever makes the choice, and whether the list is kept by a local authority or a third party, nationally or locally, there will always be some subjectivity in choosing from a list for a school. Also —and this safeguard may meet the noble Lord's concern—if the person who appeals has a view about bias (after all that is the person who wants a fair hearing) and is sufficiently concerned that there might be bias, it is possible for him to make a complaint to the Secretary of State. I think that that is the better way to do it. I shall give the noble Lord an answer to the specific question that he asked.

Lord Merlyn-Rees

I wonder if I am in order in asking a few questions in preparation for a later debate regarding the use of the same words as are used in this amendment—a point which rather nonplussed me. Within a couple of days I have to get my mind clear on another aspect of the Bill which refers to a "lay panel". So I presume that I am in order in raising the matter now. I do so not in order to pre-empt a debate later on, but to wonder whether the word "lay" means the same thing here. I refer to the special educational needs tribunal. The Bill says that there will be a panel of persons, referred to in this part of the Act as the 'lay panel'". This amendment mentions "lay members". Does that mean exactly the same thing? The people cited in this amendment will be, without personal experience in the management of any school". The more it reads on, the clearer it becomes that they are never to have had anything to do with schools. Later, in reference to special needs—an area which interests me particularly though I shall leave this argument until later —I do not know how on earth a person with no experience relating to special educational needs will play any part. So I wonder whether the word "lay" means the same thing.

With regard to this amendment, on the question of impartiality, surely it does not mean the same as "independence". Some of the most independent people I have known have been amongst the most biased in many of their beliefs, though none the worse for that. The amendment does not say "independent"; it says "act impartially". There is a newspaper in Northern Ireland, in County Fermanagh, which is called the Impartial Reporter. I leave the matter at that. It is rather nice to find something in Northern Ireland that is impartial. "Impartial" is quite different from "independent". Yet the Minister and my noble friend Lord Judd used the word "independent". The meaning is quite different. So what do we mean? I do not wish to pre-empt the coming debate on special educational needs, but I wonder whether "lay" has the same meaning and whether we are talking about "independence" or "impartiality". They are different things.

6.15 p.m

Baroness Blatch

I am not certain which particular part of the Bill the noble Lord refers to. I wonder if he can help me by explaining where the reference to "lay panel" occurs.

Lord Merlyn-Rees

That expression appears later, at page 100. The Bill refers to a "lay panel" to deal with the tribunal for statementing.

Baroness Blatch

We are talking about two very different things. I shall write to the noble Lord about the "lay panel", as it refers to another part of the Bill. Here we are talking about a panel that listens to parents who feel aggrieved that they did not get a place for their child in a school. It is an admissions panel. For that reason, one would expect the school to be represented on the panel, together with the governing body and whoever was responsible for making the judgment about whether or not there was a place for a particular child.

I happen to believe that the noble Lord makes a good point about independence. I accept all that the noble Lord has said on that matter. It is "impartiality" in the sense that what the parent sitting before that panel wants is a totally objective hearing. The parent did not get a place for the child in a school and has reasons for feeling aggrieved. Those reasons ought to be properly judged. To make it easier to make the judgment, it is essential that all schools, whether they are local authority-maintained or grant-maintained, have published criteria against which they accept children. Once a school is full to capacity—which is the point at which this question arises—it must resort to properly set out criteria for accepting young people. It is against that list that the judgment will be made. The panel must include not just the school representative—the school would suggest that, wouldn't it?—but somebody who is sufficiently impartial and independently minded to give the parent a fair hearing. I shall write to the noble Lord about the lay panel as it applies to another part of the Bill.

Baroness Fisher of Rednal

Before the noble Baroness sits down, may I ask how we define "lay" and which people would fit in to that group which is "independent" or "impartial". How will the panel be composed in each local authority area? Will somebody ask for nominations which they then send in in the same way as the Honours system will now be operated; or will people in London know somebody in Birmingham who could be a lay member? How will a person become a lay member?

Baroness Blatch

The important point is that first of all "impartiality" needs to be set out. The definition of "impartiality" will include somebody who has, and has had, nothing to do with the school and who is not involved with the immediate local authority and has had nothing to do with that authority. The choice will be decided on questions of that sort. But at the end of the day if the parent who received the hearing had a suspicion that somebody was, for example, politically in tune with the chairman of the governors, that would be very good grounds to ask for another lay person. That suspicion would certainly be grounds for a parent to complain.

But at the end of the day there must be somebody who does not have a vested interest or who had some real connection with the school and/or the local authority, who can stand back from the case being put by the school as to why it did not accept the child and the grievance being put by the parent as to why the parent thought the child should be accepted. There are some very clear criteria set down against which that judgment is made. But at the end of the day a lay person can always be subject to challenge.

Baroness Fisher of Rednal

Before the noble Baroness sits down perhaps I may repeat my question. I may not have phrased it in the right way. Is there in the Bill a clause which says that lay persons will be appointed by someone? In other words, how can one become a lay member?

Baroness Blatch

The whole point of the amendment is to replace what is in the Bill. Instead of taking what was in the Bill—namely, a very centralised compiling of the list—it is sought to make it a more locally determined matter. The criteria and regulations that will surround that provision flow from what goes on the face of the Bill. That there should be a lay person on the panel is established in primary legislation; and the responsibility should be as set out in these two amendments. But the detail that flows from that provision will follow in regulations.

On Question, amendment agreed to.

Baroness Hamwee moved Amendment No. 159: Page 178, line 6, at end insert: ("(5) The instrument shall make provision for securing that, where functions are conferred on the governing body by regulations made under section 49 of the Education (No. 2) Act 1986 (appraisal of performance of teachers) which include the appointment of any person to conduct the appraisal of the performance of the head teacher, the person appointed has no connection with the school, the head teacher or any person who is a member of the governing body, of a kind which might reasonably be taken to raise doubts about his ability to act impartially in making the appraisal; and in this sub-paragraph "head teacher" has the same meaning as in that Act.").

The noble Baroness said: Amendments Nos. 159 and 290 are addressed to securing—I say with some diffidence—the greater impartiality of the two-yearly appraisal of the head teacher which is already required by statute. Perhaps the word here should be "independence". In my introduction to the amendment it may be that at some time we use the term "independent" when we mean impartial. I agree with the noble Lord, Lord Merlyn-Rees, that independence is a very different concept.

For grant-maintained schools the present arrangement is that the school's governing body, which includes the head, has a choice of whom to appoint as the two appraisers. In the case of LEA schools, the governing body appoints one appraiser and the LEA appoints the other. There is no requirement for impartiality or indeed independence in the appointments process.

The proposed wording to secure impartiality is taken from the Government's own drafting—not only the amendment that we have just been discussing but the Education (Schools) Act 1992, paragraph 3(5) of Schedule 2—to ensure that no member of an inspection team had a connection with the school. That is the basis of the drafting. We believe that evaluating the head's performance should similarly be informed by a standard of impartiality.

The effect of Amendment No. 159 is to integrate rather better the impartial four-yearly inspection reports of the school by Ofsted into what the school does on a year-by-year basis by bringing an equal degree of impartiality to bear in the annual reviews of the head teacher's performance within a two-yearly appraisal cycle to remove or at any rate to minimise the risk that appraisers might give an unduly optimistic view of the head teacher's performance and achievements.

The requirements for appraisal of the performance of teachers come from the 1986 Act. The first national regulations to implement appraisal were made in mid-1991. Each appraisal cycle lasts two years. Half of the teachers in post in September 1992 had started their appraisal by then. An appraisal interview in each year of the cycle leads to a written appraisal statement with an annexe of targets for action.

I know that the Government place great stress on the importance of the four-yearly inspections by Ofsted's registered inspectors. It seems that the measure proposed in this amendment would help to limit the danger of school governors drifting perhaps into an attitude of complacency between the four-yearly inspections. The amendments are not intended to disturb any of the features of successful appraisal schemes but to secure further assurances of good practice. I beg to move.

Baroness Blatch

I understand and indeed sympathise with the noble Baroness, Lady Hamwee, in her plea for fairness. But in my judgment fairness lies at the heart of our present arrangements for head teacher appraisal. The regulations require that each head teacher be appraised by two persons, one of whom should be a head teacher from a similar category of school. The involvement of two persons, rather than just one, already affords a degree of objectivity.

I am always baffled by the sensitivity of this issue. In industry and commerce—for as long as there has been an industry and commerce—people are appraised by their peers. It happens and works rather well. In this case there is a second person present for the appraisal.

Although it would be counter-productive to allow teachers—even head teachers—to choose their own appraisers, we suggest that local education authorities and governing bodies take seriously any representation that an appraiser appointed by the appraising body would be unsuitable. Indeed, it would be no service to either the school or the person being appraised to have a sycophantic, nepotistic appraisal of that person. In that too, in the guise of the second person, there is a valuable safeguard against abuse.

Thirdly, Regulation 11 of the School Teacher Appraisal Regulations establishes a formal complaints procedure. If a head teacher has a grievance arising out of the appraisal process, he can ask for a formal review. The local authority, or the governing body in an SGS school, must then appoint two independent review officers, who have played no part in the appraisal complained about. If they uphold the complaint, they have the power to amend the appraisal statement in agreement with the original appraisers or order a new appraisal to replace the old. So if there is any abuse of the process, it can be remedied. I am used to speaking of grant-maintained schools but I am now back on track and referring to self-governing schools.

The system is fair and, on that ground alone, I should argue that these amendments are not necessary. In fact, there would also be practical difficulties for schools if these amendments found their way on to the statute book. The local education authorities and governing bodies of these schools are responsible for arranging the appraisal of all teachers, including heads. The amendment would obviously restrict the field of potential appraisers of head teachers and make the task of arranging appraisals much more difficult, most acutely in self-governing schools. It could also lead to a great deal of uncertainty about exactly how "impartiality" is to be interpreted in any given case, and there would be time wasted in arguing about the matter. The point about impartiality and the difficulties that it presents was well made on the last amendment.

I think that it would also disrupt the implementation of statutory appraisal. We are now almost exactly half-way through the implementation period. The regulations specify that all teachers in the maintained sector shall be subject to an appraisal cycle by September 1995 and that, a number equal to 50 per cent. of the total on 1st September 1991 must have begun the first year of their two-year appraisal cycle by September last year. A high proportion of this first tranche are head teachers. To impose this requirement now would mean undoing carefully thought-out arrangements. The value of the time, training, and financial resources already invested in this implementation process would be undermined by such an interruption.

It is not even as if we are aware that there are problems with head teacher appraisal. Far from it. All the evidence is that appraisal generally is bedding in very successfully. That is all the more reason not to change the rules now. The year 1995 will be the time to judge whether changes are necessary, and if they are, to make them. If we do, there will be no need to amend primary legislation. These are regulations made under the 1986 Education (No. 2) Act. My right honourable friend will be able to amend them in 1995, if the need is there. If the noble Baroness believes that the appraisal regulations require amending now, it is open to her to persuade my right honourable friend of the need to do so. But to bind him and his successors by statute in this Bill would be going too far. For that reason I wonder whether the noble Baroness will feel able to withdraw her amendment.

6.30 p.m.

Baroness Hamwee

I thank the Minister for that response. She referred to the question of grievances on the part of a head teacher who is the subject of an appraisal. That is not the point of the amendment. It is in fact the obverse of that coin that I am trying to avoid—too much complacency.

I am glad that the Minister moved away from the term "fairness" to "objectivity". It is objectivity which the amendment seeks. I have always envied those who are in a system which provides for appraisal because it is a valuable tool. I take the point in regard to the possibility of amending the regulations rather than including the point in primary legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 159,4 not moved.]

Schedule 5, as amended, agreed to.

Schedule 6 [Content of articles of government for grant-maintained schools]:

Lord Judd moved Amendment No. 159B: Page 178, line 38, at end insert ("including functions specified in section 76(2A) below.").

The noble Lord said: For the convenience of the Committee, in moving Amendment No. 159B I shall speak also to Amendment No. 159C. Perhaps I can first refer to the consequential amendments and the material covered by them.

We are dealing with Clause 76 and maintenance grants. Our purpose is to require the Secretary of State to make regulations so that he has to fund equitably grant-maintained schools and local education authority schools in a specific area. The amendment is not intended to, and does not, cover new grant-maintained schools which were not previously LEA maintained.

The clause governs the payment of money to grant-maintained schools to cover their main recurrent costs. Such payments are supposed to equate to the money given to an LEA-maintained school through its delegated budget plus the value of free, or so-called free, services provided for the school by their maintaining LEAs. However, there is real anxiety about the bias towards funding of grant-maintained schools as it is perceived. Surely, schools should be funded equitably. It cannot be right that the resources that the state devotes to the education of its children should be affected by the occurrence of a parental ballot for grant-maintained status. There is little justice, we would suggest, in the present funding arrangements.

After 1988 the position of the Government was that grant-maintained schools should receive an appropriate share of public funding as compared with other publicly funded institutions. The idea of grant-maintained status was intended to be sold on the intrinsic merits of self-government rather than by cash bribes. Indeed, Mr. Baker, when holding the office of Secretary of State, made a number of statements to that effect during the run-up to, and the passage of, the 1988 legislation. The noble Baroness, Lady Hooper, then Parliamentary Under-Secretary of State at the Department of Education and Science, said at the Report stage of the Education Reform Bill: The Government's intention is that the financial effect of opting out should be broadly neutral—for the school, for the national taxpayer and for the local ratepayer … we intend the financial position to be broadly neutral".—[Official Report, 27/6/88; col. 1188.]

The noble Lord, Lord Trefgarne, then Minister for Defence Procurement, answering for the Government at Third Reading, said, They [grant-maintained schools] will not be funded any more generously than they would have been had they remained with their local education authority".—[Official Report, 17/7/88; col. 490.]

That was all confirmed explicitly in DES circular 10/88 at paragraph 53 which said that a grant-maintained school's funding should, fairly represent what the LEA would have been likely to provide for the school had it continued to maintain it including expenditure on services provided centrally".

More recently, statements by Ministers have been less clear cut. Kenneth Clarke, in his 1991 speech to the North of England Education Conference, tacitly admitted that the first schools to achieve grant-maintained status had been more generously funded but implied that that generosity would not last when he advised more schools to opt out while the going was good.

In a letter dated 7th August 1991 the Prime Minister told Mr. Doug McAvoy, general secretary of the NUT, that the Government had made no secret of the fact that grant-maintained schools got preferential treatment in allocating grants to capital expenditure. He said, We look favourably at grant-maintained schools in order to encourage the growth of that sector. I am delighted to see that numbers are continuing to grow rapidly".

Nevertheless, the official line is still that grant-maintained schools receive only a proper estimate of what LEAs would have spent had they continued to maintain those schools. But the reality is different. In fact the reality of inappropriate over-funding has been well documented. In a report prepared for the Association of County Councils, the consultants Coopers & Lybrand demonstrated that, on the initial funding methodology, the entire education budget of an authority could have been lost when just over half of its schools had opted out. The same study also demonstrated that the allocation of LEA central service costs pro rata to pupil numbers benefited secondary schools at the expense of primary schools because the latter, as smaller institutions, required a much greater level of central support.

To become more specific, there was a celebrated case where the DES calculation included a proportion of the Section 11 specific grant from the Home Office (to provide English language support for non-native speakers) which was allocated to a grant-maintained school at Old Swinfen in Dudley in spite of the fact that none of the projects covered by the grant were located in that school. There is also an element of double counting in terms of administration and management. While the DFE looks at all of an LEA's central expenditure to work out the grant-maintained schools' share, it takes no account of its own expenditure in the direct support of grant-maintained schools. The estimated out-turn in 1992-93 was, I believe, £1,450,000. There were 278 grant-maintained schools operating at that point, making an average per school of £5,200.

The references in the amendment to the three preceding financial years are intended to draw attention to another important aspect of maintaining parity. Up to now the calculations for grant-maintained funding have been based on the budgetary information for schools and their LEA in the same financial year as the grant-maintained school grant was payable. That is as it should be, but it has tended to mean that grant-maintained schools do not receive the final details of their budgetary allocation until a little way into the financial year.

For the current 1993–94 financial year, the DFE decided that the main part of a grant-maintained school's funding—the central annual maintenance grant—would be that which the school would have received had the school remained LEA maintained. However, for the additional funds to replace the central services that the LEA supplies, the Government decided that figures from the 1992–93 financial year should be used. That will have a disastrous effect as many LEAs have reduced their central services because of the unfavourable local government settlement and their decisions, required by the Government as part of their local management of schools policies, to delegate more to schools.

Grant-maintained schools will be comparatively over-funded for key services such as caretaking, cleaning, grounds maintenance, refuse collection, staff advertising, interview expenses and audio visual repairs. We suggest that that is unacceptable. I understand that the local authority associations, on behalf of their members, have been suggesting ways that the calculation of the grant-maintained budgets can be speeded up while retaining the use of current year data.

We have a long night ahead. I can and will give, if asked, specific examples area by area of what I am talking about. But perhaps it will suffice to say that we are proposing to make a stand against Clause 77 because of the same kind of rationale that I explained previously. Special purpose grants raise exactly the same principles as those raised in the amendment to Clause 76. Indeed, we are putting forward our amendments as they affect Clause 78—capital grants —because we want to ensure that the level of funding available for capital grant for the grant-maintained sector within an LEA area is the same as capital expenditure approved for LEA-maintained schools within the same LEA area. I beg to move.

Lord Jenkin of Roding

I believe that in this group we are taking some of the amendments to Clause 76. I am particularly interested in Amendment No. 168 that seeks to establish the principle of a level playing field. In an earlier debate the noble Baroness, Lady Hamwee, said that she did not much like the phrase "level playing field". I can only assume that she has never had to play rugby football uphill, whereas my noble friend Baroness Young and I have both had to do it. I believe that the noble Earl, Lord Longford, has also played on the same pitch.

Baroness Hamwee

I have never had to play rugby, even downhill. However, I have had to play the game of trying to run a local authority on a field which may not seem level. It was merely the jargon to which I objected.

Lord Jenkin of Roding

I believe it is very useful jargon.

The Earl of Longford

Am I right in thinking that it was the noble Lord who tackled my daughter, Antonia, when they both played rugger together at Dragon School?

Lord Jenkin of Boding

All I can say to the noble Earl is that I wish I had! I believe that it was my younger brother. I have certainly tackled my noble friend Lady Young; we have played on the same rugby field.

We are seeking to establish that there should be equality of treatment between grant-maintained and local education authority schools. I have been asked to raise this point by the London Boroughs Association which, somewhat to my surprise, has been unable to have the matter aired in another place. We are seeking to ensure that the funding that schools receive is decided on a strictly equitable basis without reference to which kind of school the children are attending. My intentions, which I believe are much the same as those of the noble Lord, Lord Judd, are to clarify exactly where the Government now stand on this matter. It may be that the Minister will be able to give me a perfectly clear answer.

I should like to give two examples where it is felt that there has not been a level playing field. The first concerns the amount retained by the local authorities for administration purposes; that is, the provision of payroll and personnel services, legal advice and matters of that kind. In the first tranche of grant-maintained schools the notional budget of the particular school was calculated and it was assumed that local authorities would retain 16 per cent. of the money for central administration of those particular subjects. When the school opted out it took with it the actual sum that would have been delegated to it by the LEA plus an add-on equivalent to 16 per cent. of the notional school budget, whether or not that had been the actual amount retained for the school. It might have allocated to the school more than 84 per cent. and therefore retained less, but when the school became grant-maintained the full 16 per cent. went with it. Where there is not one school but several schools in an area, each of which appears to be taking a disproportionate share of central administration costs, one can reach a point where in theory the local authority has nothing left at all for administration because it has allocated all of it to the grant-maintained schools.

The noble Lord, Lord Judd, referred to the Coopers & Lybrand report that threw a flood of light on this subject. They found that in some local education authority areas the 16 per cent. add-on would exceed the budget available if all secondary schools opted-out. I believe I am right in saying that since then the percentage add-on has been reduced so that as more schools opt out and become grant-maintained the amount is less.

Another area of concern is that the cost of specialist curriculum advisers—one thinks of advisers on science and technology, modern languages and so on—cannot be reduced as schools opt out. In practice, unless cuts can be made elsewhere in their budget the local education authority will be bound to reduce the number of such advisers and the comprehensiveness of the advice available to LEA schools across the range of the curriculum will be reduced. In some areas the amount of money remaining with the LEAs will not be enough to provide an adequate level of central services.

I cannot believe that that is the intention of the Government. The amount of grant allocated to grant-maintained schools and the money therefore left with the local authority should be broadly the same for each pupil, though obviously in the case of primary and secondary pupils the figures are different. But it does not seem to have happened quite like that. I would be most grateful if my noble friend could throw some light on it. In one London borough it has worked out quite unfairly between two schools. In Croydon where two schools became grant-maintained the smaller one, because it was the first to opt out, received —80,000 more. It received an enhancement of 15 to 16 per cent. The second school which opted out later was slightly larger but got only 10 per cent. As a result it ended up with less money. I am sure that that is not intended, but I know that the London Boroughs Association will be grateful if, when my noble friend comes to reply, she can indicate the Government's intention. If they look at this and it turns out that there have been inequities, perhaps they can take steps to put them right.

6.45 p.m

Baroness Hamwee

Perhaps I may support the various amendments. I will give way to the noble Lord.

Lord Lucas

I have an amendment in this group. With your Lordships' agreement, I will speak also to Amendment No. 168A, which is in this group, and the small technical amendment, Amendment No. 304A, that goes with it. These amendments seek to make grant regulations subject to the affirmative procedure. We know very little of what the grant regulations will look like but they will be enormously important. Our school system has grown up over the past 50 years on the basis of local provision, local prejudices, local priorities and a certain amount of local pork-barrelling. There is a wide diversity of provision not clearly related to need, as has been shown by the publication by the further education funding councils of the funding rates of further education colleges.

In any change to a nationally consistent system there will be winners and losers. It will be crucial to know who they are and why, to monitor and review the situation and to gain acceptance of changes through understanding them. Financial regulations are a key part of the system. We can already see in the local management of schools that, for instance, it has been made impossible for small schools to maintain their senior staff. Where they have a group of people who are relatively expensive they now find that they have to dispense with some of them. In one case of which I know it is impossible for any teacher, except the head, to remain with the school for longer than about five years.

We can see in the proposals of the further education funding councils (though it is early days yet) that there may be severe pressure on extra-curricula activities as a result of funding based on outcomes that they propose. They will not take into account the initial states of the colleges, particularly the buildings that they have inherited. That puts at a disadvantage those colleges which have bad buildings when the change is made. They propose to make no allowance for small colleges serving local communities. That may well disadvantage those communities. They have adopted funding arrangements that discriminate against mixed science and humanities courses.

Clearly, funding arrangements are important. These kind of decisions taken at a delegated level are important to the way in which the school system runs. In the section of the system we are talking about, because the population is even less mobile than that in further education, there is even more potential for national financial regulations to induce marked changes in local educational provision. We need to have an opportunity to review the grants regulations as they emerge and over the early years of their operation. An affirmative rather than a negative procedure would seem to be appropriate.

Baroness Hamwee

I apologise to the noble Lord, Lord Lucas. I had not gone far enough through the grouping of amendments. I support the amendments spoken to by the noble Lords, Lord Judd and Lord Jenkin, and wish merely to add one point. I hope that the Minister can confirm that, of the various criteria assessed by parents in judging whether to vote for a school to become grant-maintained or to stay within the local education authority, the question of, call them, bribes, goodies or incentives should not be on the agenda and that what is important is the autonomy and the style of the school and the other things that go with grant-maintained status.

The Minister looks puzzled but I have been at meetings where parents have said, "But should we not be considering moving towards grant-maintained status because we will get more money?" The question in their minds is as simple as that. If we can dispose of that question, we will have done a good evening's work.

Baroness Blatch

I was looking puzzled, first, because the noble Baroness, without evidence, called them bribes. I was puzzled about that.

Baroness Hamwee

I do not call them bribes but I have heard them called bribes.

Baroness Blatch

The noble Baroness did in fact call them bribes. I am responding only to what I heard the noble Baroness say. I say to her, yes, indeed, when parents are considering that they will get more money, they are absolutely right because they are going to get their share of the central costs in addition and they are going to get a per capita sum of money which relates to in-service training. It is very important that they know what those sums are. We do what we can to give them that information. Indeed, we are in a position now to be very specific about that, and that becomes part of the bank of information that schools have. It is information, not bribes. But I shall address the specific points as I respond to the amendments.

Baroness Hamwee

I wonder whether the noble Baroness will give way for a moment. I am hoping that it will be made quite clear to parents that the money they get is money that is required for particular purposes; in other words—I am sorry to use another piece of jargon—the bottom line is the same. The Minister is in fact confirming this. It is important that it should be confirmed and known by parents to be the case. The impression that many parents have is that they will end up with a greater sum of money after they have met the various requirements to run the school.

Baroness Blatch

The noble Baroness misses a very important point. What they get is what the local authority would have spent on them for particular services. They are indeed named when the school receives its allocation of money. The whole point of becoming grant-maintained is for the former, local authority school to make its judgment about how that money should be spent. The rationale for taking independence within the state system is so that they will make a judgment at school level and not mirror precisely what the LEA would have spent that money on.

I am in some difficulty about the amendments. As they are very technical I have to ask a number of questions. I should like to ask my noble friend Lord Jenkin and the noble Earl, Lord Russell, who is not in his seat, whether the criteria referred to in Amendment No. 168 would apply at the point when the Government set standard spending assessments for local authorities or only once budget decisions had been made by the LEAs themselves. The answer to that question is material to the way in which I understand the amendment.

I wish to ask the noble Lord, Lord Judd. a question on Amendment No. 168B. Which of the three conflicting principles in Amendment No. 168B is the dominant one: that the AMG should be based on the retail prices index; or on a guess as to what the former LEA would have spent on the school, or indeed on the average of the three years' funding before the school became grant-maintained? The amendment is unclear on that point. The noble Lord appears to want to create a permanent baseline linked to past LEA spending on the school. That could be very inappropriate over time. Which is the link that he is advocating?

How would the amendment allow for pupil number changes at a school? How would he account for that, given that he is talking about a fixed point in time? How would a school be funded where it was not with the LEA before it was grant-maintained; for example, either because it was a new school or because of LEA boundary changes? Those are important questions that I need to have answered so that I properly understand the amendments.

Lord Jenkin of Roding

As my noble friend mentioned my name first, I have to say straightaway that I cannot answer her questions. When the Secretary of State gave evidence to the Select Committee in another place he was concerned to point out that the SSAs to the local authorities on which the grants are based will not take account of the fact that some authorities, like Sheffield, spend much more on education than the SSA, whereas other authorities, like Birmingham, spend much less. Therefore, I am not in a position, I fear, to answer her question. I shall, if I may, bounce back another question. It seems to me that there is an issue here which needs to be discussed quite urgently. I hope that she or one of her fellow Ministers will be prepared to meet a small delegation from the London Boroughs Association where I am sure these matters could be thrashed out. If she could answer that, we could perhaps resolve the problem.

Baroness Blatch

I can certainly give that promise to my noble friend. I should also say, however, that I believe that we have met the London Boroughs Association on these very matters. The amendment states: In making grant regulations the Secretary of State shall ensure that the criteria for allocating funds for the provision of education to pupils … Therefore, what is important is the point at which that is done—whether it is done at the global level or when the LEA is allocating its money to the schools. At LEA level the playing field is level, as I shall go on to argue in a moment. I wonder whether the noble Lord, Lord Judd, could answer the questions that I put to him on his amendments.

Lord Judd

The Minister should be aware that the local authority associations are putting forward proposals on how this could be handled. If the noble Baroness can give an assurance that the points she raises, which are perfectly fair, can be discussed in detail with the local authority associations and that she is prepared to look at the situation again in the light of what happens in those discussions, we shall of course reconsider the amendment.

Baroness Blatch

I shall give general responses and speak to the system as it applies. It will then be for noble Lords to decide where the links should be made. They are questions which can be answered only by the noble Lord.

Amendments Nos. 159B and 159C would introduce an overly prescriptive element into the articles of government of grant-maintained schools. Schedule 6 already applies for an extensive list of material for inclusion in the articles and is not the right place for a list of the functions of the Secretary of State or the funding authority in respect of any of the various types of grant. As far as concerns the annual grant cycle, the grant regulations which will be laid before Parliament will be the place for many of these details.

Amendments Nos. 168 and 168B are clearly about equitable treatment of funding for grant-maintained schools and LEA schools. I believe that the arrangements we have in place now for the annual maintenance grant of grant-maintained schools and the AMG arrangements we have proposed for the future already achieve such equitable treatment. Much of what my noble friend has said has properly been addressed and most of those concerns have been met. But we need to compare notes following the debate.

I assure the Committee that we have a concern to see fair and equitable funding of both LEA and grant-maintained schools. The main form of funding for grant-maintained schools, and the only one which is paid for from local authority funds, is the annual maintenance grant. That is currently calculated to include three main elements. The core element is based on the local management of schools' scheme of each former maintaining authority. On top of that there is a percentage addition to reflect the LEA's spending record on services it has provided centrally to its remaining maintained schools. The final element is for school meals which is again based on the level of the individual LEA's spending. Members of the Committee will therefore see that the calculation of AMG is equitable and takes account of the funding in each LEA.

I say to my noble friend that his particular point about 16 per cent. and 15 per cent. central add-on has been totally dealt with. The figure that applies is the actual sum held back by the local authority. The percentages are running at something below 10 per cent. for many schools. It is higher for primary schools than it is for secondary schools, but it relates to what the local authority holds back.

For the future we have proposed the gradual introduction of a common funding formula for grant-maintained schools. That will provide a new alternative way of calculating AMG. That will be a vitally important option in areas—and there are many already—where a significant number of schools, but not the majority, are in a particular phase and are grant-maintained and not local authority maintained. The CFF will distribute in each LEA area a total based on the relevant standard spending assessment for the local authority concerned. It will do so using a formula which is as simple and as transparent as possible. Transparency will be absolutely essential.

We shall pilot the common funding formula in a small number of areas from April 1994. One consultation paper about the CFF has already been issued last December. Further papers will follow this year. Indeed, there are already local authorities which are keen to be involved in that experiment.

I believe that Amendments Nos. 168 and 168B would introduce uncertainty in a number of key areas. I have named one. I ask the noble Lord, whose amendments are before us, for further clarification on certain points. As I have said, I accept the questions. If we are to vote on these amendments, as I suspect we shall, it is absolutely beholden on the noble Lord, Lord Judd, to tell us precisely what the links are to be.

I shall be grateful for clarification if it comes. If not, then the Committee will be invited to vote on wholly indeterminate links in these amendments. I am not convinced that these amendments would deal fairly or satisfactorily with the future funding of grant-maintained schools. I hope that the Committee will see the good sense and fairness in both our current arrangements for AMG, which will continue for many schools for some time, and of the common funding formula which will gradually replace them. Both will provide for schools a level of funding which is equitable and which recognises their particular circumstances and extra responsibility compared with local authority schools in the area. For those reasons I cannot accept Amendments Nos. 168 and 168B.

I now turn to the amendments of my noble friend Lord Lucas concerning the affirmative procedure. I can understand his concern in wishing to make these regulations subject to the affirmative resolution procedure. That would allow the other place and your Lordships' House the opportunity to debate the regulations prior to their being made by the Secretary of State, rather than after their making as is the case with negative resolutions.

In considering those amendments it is important to remember that this Bill is the first to be subject to the Select Committee on the Scrutiny of Delegated Powers. A copy of its report, which was published on 1st April, is in the Library. I know that the committee has already given careful consideration to all relevant points in its scrutiny.

The report of the Select Committee is meant for the guidance of the House. It is not in the nature of instructions to the House. However, it is interesting to note that the committee raised no questions about the intention for regulations under Clause 76 to be subject to the negative procedure. Where it did have concerns it made references. Neither did the committee make recommendations for change. That is very important. The Committee should take strong account of that. The grant regulations in question already exist under Section 79 of the Education Reform Act 1988. Clause 76 is essentially a re-enactment of that section and not a new provision. The regulations have been made annually since 1989 and have been laid before Parliament under the negative resolution procedure. Those arrangements appear to have worked well. The negative procedure has not precluded debate on the regulations.

Two years ago the other place debated the 1991 regulations after the Opposition prayed against them. This year's regulations are scheduled for debate in May, once again in the other place, as the result of an Opposition prayer. In the light of history, I am not minded to support the introduction of the affirmative resolution procedure. Moreover, I believe that the time delay which that procedure can add to the business of introducing regulations, and any urgent amendments to those regulations, would be unhelpful. There is a detailed annual consultation process with local authorities, with the grant-maintained schools and others before each year's set of regulations is made. I would not want to see that process become cramped if it can be avoided.

In conclusion as regards these amendments, I believe that the current negative procedure will continue to serve Parliament well in respect of these particular regulations. There is scope for full and adequate scrutiny under the current arrangements. But the real danger of accepting the amendment is the delay which will occur to the proper financing system. I hope that my noble friend will take that into account when he considers what to do about his amendments.

Perhaps I may refer to one or two points made in the debate. It was said that local authorities do not have enough money to meet their administrative responsibilities. The cash protection provisions which have been referred to apply to schools operating as grant-maintained schools before 1st April of this year. That is an end to the old arrangements. Moreover, they apply not to the totality of their grant, but only to that small element which refers to LEA central costs. The local authorities were told of the provisions last November so that they could budget accordingly. There is no reason why we should be unable to fund their continuing responsibilities to their own schools.

We shall of course keep the cash protection arrangements under review and will continue to bear in mind the cost to the LEAs. We have indeed met some of their worst fears and concerns as a result of the very constructive meetings with those bodies, including the LBA.

The Government believe that it is right, in order to give certainty, for the central cost add-on to be based on 1992–93 figures. For the noble Lord, Judd, who made this point, it should be noted that allowance has been made for compulsory delegation of cleaning and grounds maintenance for 1993–94. That has been fully taken into account. For many local authorities, moving to individual add-on percentages represents a reduction in the add-on as compared with the fixed rate of 15 per cent., which is the point that I made to my noble friend Lord Jenkin of Roding. Local authorities are continuing to use the fixed average. We have moved away from that.

Over the years, and because of cash protection and the central cost element, schools that became grant maintained early enjoy higher central cost amounts rather than schools which became self-governing later. But the arrangements are always clear. It is felt right that the schools should not have to adjust spending downwards, having let contracts and so forth, faster than cash protection applies.

The last point and, for the noble Lord, Lord Judd, the most vexed one, is the one that I now come to and it concerns capital grants, the subject of Amendment No. 169A. As regards this amendment, I wonder whether I detect a misunderstanding of how the capital funding for LEA schools actually works. In their case there is not a grant regime, but a long-standing system whereby local authorities receive borrowing approvals. My right honourable friend approves annual capital guidelines on the basis of bids submitted by local authorities in respect of the schools which they maintain.

So it is important to note that this amendment would not work as it stands. The drafting implies that a formula exists by which capital funding can be determined, but that is far from the case. The other point which the noble Lord did not include in his equation when he was doing some interesting arithmetic, is that local authorities, in addition to annual capital guidelines and permission to borrow, are also allowed to apply their own capital receipts. On top of that they can also rate for capital. All of that was left out of the equation.

It has been claimed that the current capital grant system is unfair to local authority schools. However, as in previous years, each grant-maintained school's entitlement to capital grant continues to depend on the relative merits of its bids and the total sum available for allocation to grant-maintained schools. It would be a mistake to believe that the funding of grant-maintained schools is at the expense of schools remaining in the local authority sector. Ministers decide the allocation of public spending, looking at competing priorities across all the public services. They allocate separately to the local authority and grant-maintained schools. Less money for grant-maintained schools would not necessarily mean more for local authority schools.

We have made no secret of our intention to set up grant-maintained schools on a sound basis. The noble Lord, Lord Judd, referred to the letter from my right honourable friend the Prime Minister. I do not intend to detract from what was said in that letter. Many local authorities have had wholly inadequate arrangements for maintaining their capital stock. As I said, my right honourable friend the Prime Minister made it clear in that letter, released to the press in the summer of 1991, that we look favourably on grant-maintained schools in allocating grants for capital expenditure. It needs also to be noted, but only in passing because I do not make it a core part of my case, that in certain local authorities many of the schools were sorely neglected compared with other schools. However, in all the circumstances, I believe that the treatment is fair, and I therefore reject Amendment No. 169A.

Lord Judd

I am grateful to the Minister for her full reply. I shall deal first with the point about capital grant. Our amendment is designed to include a requirement that there be parity of capital funding between grant-maintained schools and the remainder of the public sector. There is, in our view, inequality currently at a number of levels. In the first instance, local authorities are given capital allocations which, as the Minister has argued, represent a sanction by central government to raise loan finance; that is, by borrowing money.

On the other hand, grant-maintained schools are, as the Minister explained, given cash grants which carry no revenue implications. In terms of the previous inequality of central government practice, there has, in this case, been no pretence at even-handedness, and we would not suggest that there has been.

From the approval of the first grant-maintained schools much higher levels of capital expenditure were allowed to them. In extreme cases the annual allocation to a single grant-maintained school may even exceed the total sum agreed for the smaller LEAs. The Government's justification, as we understand it, was that they were making up for the previous underfunding by local authorities. I do not believe that that statement has ever been fully justified. We do not see it as a convincing explanation, as central government apply global limits on the amount of capital spending they wish to see LEAs undertake at levels which are approximately one-third of the sums that LEAs estimate that they need to spend.

In the past, local authorities have managed to spend above the amounts set by central government by using capital receipts and other devices. Although that performance cannot be sustained, more than two-thirds of LEAs have felt compelled regularly to spend above education capital guidelines in recent years.

The DFE sent a letter to grant-maintained school governors in the summer of 1992 indicating that some of the more ambitious projects that they might have been contemplating would be unlikely to attract funding. Their spending plans are still relatively generous. As part of the Autumn Statement, the DFE announced plans to spend £501 million on grant-maintained schools over the next three years. For the financial year 1993–94, something like one-third of the available capital has been allocated to grant-maintained schools, as we understand it, even though only 2 per cent of schools are currently grant-maintained.

Even taking account of any increase in the numbers of grant-maintained schools in the coming year, and that such an increase will be concentrated more on the secondary level, with a greater demand for capital expenditure, that is, nevertheless, way above any reasonable estimate of a fair apportionment among publicly-funded institutions.

Another problem caused by favourable funding in general for grant-maintained schools is, we would argue, that it is not sustainable. The present arrangements for 1993–94, and for cash protection of central AMG—both of which deliver artificially inflated budgets for grant-maintained schools —is bound to lead to future reductions just to restore the original LEA funding level, or is the Minister going to tell us that the Treasury proposes to increase expenditure on the school service by several billions of pounds?

All this will introduce a level of financial instability even greater than that experienced by LEAs under pressure from capping. In two or three years' time, schools which have opted out will be subjected, as surely as day follows night, to substantial cuts in their inflated budgets as the inducements for opt-out are withdrawn.

The Minister has already referred, with some pride, to the fact that one LEA already has over 75 per cent. of its secondary pupils in grant-maintained schools. Of course the LEA is Hillingdon. But is the Minister aware of the desperation felt within the primary sector in Hillingdon as a result of the chaos caused to Hillingdon's services to all schools due to the bizarre funding arrangements for 1993–94? If the primary schools in Hillingdon were to opt out in procession, Hillingdon's school budget would run out before all its schools had been able to opt out. What would Ministers do about that situation? What message can they send to the primary schools in Hillingdon? What funding levels will apply in Hillingdon if all the schools opt out? Are the Government going to spend several million pounds more than Hillingdon borough council on its schools? How soon before some intervention in Hillingdon becomes inescapable?

The two key points that the Minister has failed to acknowledge, which render the present arrangements inequitable, are that direct AMG is based upon the 1993–94 figure, while the central AMG is the percentage add-on which applied in 1992–93. In a period of increasing delegation under LMS, that delivers more than 100 per cent. of the budget in either year under the LEAs' LMS scheme. The cash protection of central AMG just compounds the problem.

We contend that the present situation is anything but fair. We also contend that it is not sustainable and that big dangers and problems lie ahead for the opted-out schools. To be absolutely fair, we have heard the points that the Minister has made in the debate. If she is prepared to meet us and give a firm undertaking at this stage that, in view of all the points made by Members on all sides of the Committee, she will reconsider this matter before going firm, we shall reconsider our position on the amendment. If she cannot do that, I shall be compelled to divide the Committee.

Baroness Blatch

I would be less than honest if I were to say that I could take all this back and look at the whole matter again. The noble Lord leaves more questions than he gave answers. In Amendment No. 169A, to which he has spoken mostly in his summing up, he asks that the grants to grant-maintained schools should equate to the grants to local authorities. We do not make grants for capital to local authorities. It is an impossibility unless one changes the whole system.

In Amendment No. 168B the noble Lord has not said how one avoids the contortion of relating, having regard to the value of the RPI, an equivalent to the amount that the LEA concerned would have provided to the school had it continued to maintain it, including an amount equivalent to the value of services provided to the school by the authority, calculated by the reference to the average of the three full financial years preceding the establishment of the school. I hope that the noble Lord is not inviting the Committee to vote on the amendment.

Lord Judd

I am again grateful to the Minister. I am disappointed. I should have rather enjoyed a review of all this with her. I am sorry that we shall not be able to do that. It would have been rather fun. As she does not feel inclined to meet us on that point, it is clear to us that our amendments make it abundantly plain that the Secretary of State would have a responsibility for ensuring even-handedness, and a level playing field. Because we believe that that should not be just left to chance—indeed the Minister herself said she favours that position—we believe that it is best to press the matter to a Division.

7.20 p.m.

On Question, Whether the said amendment (No.159B) shall be agreed to?

Their Lordships divided: Contents, 66; Not-Contents, 126.

Division No. 3
CONTENTS
Addington, L.	Longford, E.
Airedale, L.	Mclntosh of Haringey, L.
Archer of Sandwell, L.	Mackie of Benshie, L.
Ardwick, L.	Mason of Barnsley, L.
Baldwin of Bewdley, E.	Merlyn-Rees, L.
Boston of Faversham, L.	Morris of Castle Morris, L.
Broadbridge, L.	Nicol, B.
Brooks of Tremorfa, L.	Ogmore, L.
Carmichael of Kelvingrove, L.	Parry, L.
Clinton-Davis, L.	Peston, L.
Cocks of Hartcliffe, L.	Pitt of Hampstead, L.
Dean of Beswick, L.	Ponsonby of Shulbrede, L.
Dormand of Easington, L.	Prys-Davies, L.
Eatwell, L.	Redesdale, L.
Ennals, L.	Robson of Kiddington, B.
Ewing of Kirkford, L.	Rodgers of Quarry Bank, L.
Falkland, V.	Russell, E. [Teller.]
Galpern, L.	St. John of Bletso, L.
Glenamara, L.	Seear, B.
Graham of Edmonton, L. [Teller.]	Sefton of Garston, L.
	Serota, B.
Grey, E.	Shepherd, L.
Hampton, L.	Stoddart of Swindon, L.
Hamwee, B.	Strabolgi, L.
Hollis of Heigham, B.	Strafford, E.
Holme of Cheltenham, L.	Taylor of Blackburn, L.
Hooson, L.	Thurlow, L.
Houghton of Sowerby, L.	Tordoff, L.
Howell, L.	Turner of Camden, B.
Jeger, B.	Warnock, B.
Jenkins of Hillhead, L.	White, B.
Judd, L.	Winchilsea and Nottingham, E.
Listowel, E.	Young of Dartington, L.
Lockwood, B.

NOT-CONTENTS
Addison, V.	Jenkin of Roding, L.
Allenby of Megiddo, V.	Johnston of Rockport, L.
Archer of Weston-Super-Mare, L.	Kimball, L.
	Kindersley, L.
Arran, E.	Kinnoull, E.
Ashbourne, L.	Kitchener, E.
Astor, V.	Lauderdale, E.
Barber, L.	Lindsay, E.
Belstead, L.	Lindsey and Abingdon, E.
Blatch, B.	Liverpool, E.
Blyth, L.	Long, V. [Teller.]
Boardman, L.	Lucas, L.
Borthwick, L.	Lyell, L.
Boyd-Carpenter, L.	Mackay of Ardbrecknish,L.
Brabazon of Tara, L.	Macleod of Borve, B.
Brentford, V.	Margadale, L.
Brigstocke, B.	Marlesford, L.
Brookeborough, V.	Marsh, L.
Cadman, L.	Mersey, V.
Caithness, E.	Milverton, L.
Carnegy of Lour, B.	Monson, L.
Carnock, L.	Monteagle of Brandon, L.
ChalkerofWallasey, B.	Mottistone, L.
Clanwilliam, E.	Mowbray and Stourton, L.
Clark of Kempston, L	Moyne, L.
Coleraine, L.	Murton of Lindisfarne, L.
Cornwallis, L.	Napier and Ettrick, L.
Cox, B.	Norfolk, D.
Craigmyle, L.	Northbourne, L.
Cranborne, V.	Park of Monmouth, B.
Cross, V.	Pearson of Rannoch, L.
Cumberlege, B.	Pender, L.
Denham, L.	Perry of Southwark, B.
Denton of Wakefield, B.	Prior, L.
Dilhorne, V.	Radnor, E.
Downshire, M.	Rankeillour, L.
Eden of Winton, L.	Renfrew of Kaimsthorn, L.
Elles, B.	Rennell, L.
Elliott of Morpeth, L.	Renton, L.
Elphinstone, L.	Rodger of Earlsferry, L.
Elton, L.	St. Davids, V.
Fairfax of Cameron, L.	Savile, L.
Ferrers, E.	Seccombe, B.
Flather, B.	Selborne, E.
Fraser of Carmyllie, L.	Sharpies, B.
Gisborough, L.	Skelmersdale, L.
Glenarthur, L.	Strange, B.
Goschen, V.	Strathclyde.L.
Guildford, Bp.	Strathcona and Mount Royal, L.
Hailsham of Saint Marylebone, L.
	Strathmore and Kinghorne, E. [Teller.]
Harlech, L.
Harmar-Nicholls, L.	Swinfen, L.
Harmsworth, L.	Swinton, E.
Harvington, L.	Teviot, L.
Haslam, L.	Thomas of Gwydir, L.
Hayhoe, L.	Torrington, V.
Hemphill, L.	Trumpington, B.
Henley, L.	Ullswater. V.
Hives, L.	Vivian, L.
HolmPatrick, L.	Wade of Chorlton, L.
Hooper, B.	Whitelaw, V.
Hothfield, L.	Wise, L.
Howe, E.	Wynford, L.
Jeffreys, L.	Young, B.

On Question, amendment agreed to.

7.26 p.m.

[Amendment No. 159C not moved.]

Viscount Astor

I beg to move that the House do now resume. In doing so, I suggest that the Committee stage begins again at 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.