Education Bill

HL Deb 13 May 1993 vol 545 cc1371-429

3.38 p.m.

The Minister of State, Department for Education (Baroness Blatch)

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

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

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Earl Baldwin of Bewdley moved Amendment No. 287BA: After Clause 246, insert the following new clause: ("Information on provision of goods and services .—(I) The governing body of any grant-maintained or grant-maintained special school shall in accordance with any regulations made by the Secretary of State make available at the commencement of each academic year to any parent or guardian of any pupil admitted to the school (and on request to any other parent of a pupil registered at the school) information falling within subsections (2) and (3) below. (2) The information referred to in subsection (1) above shall include any statement made in accordance with section 265(4) below by a local education authority which has in the previous academic year supplied goods and services to the school concerning contracts for the supply of such goods and services and any period over which such contracts might have effect. (3) The information referred to in subsection (1) above shall also include whether any local education authority other than that in whose area the school is situated has in the previous academic year supplied goods and services to the school in accordance with section 265 below.").

The noble Earl said: In speaking to this amendment I am also speaking to Amendments Nos. 299ZA, 299BA and 300ZA. There are two strands involved here. The first is a matter of the information that we feel that parents ought to receive concerning the goods and services that are available to their children's grant-maintained school from the local education authority. The second deals with the question of those goods and services themselves and the stipulations for them which the Government are putting forward in this Bill. This strand brings in the other amendments that are grouped with mine.

Let us look at Clause 265 as printed. In the normal way local authorities may supply goods and services, for example to schools, but only within their existing spare capacity; under the Local Authorities (Goods and Services) Act 1970, an LEA is not permitted to retain staff and operate any services which go beyond what it requires for the efficient exercise of its own functions within its own area. This is called trading at the margin of capacity, and it is an ill-defined area where the Audit Commission takes a restrictive line and the courts have never yet pronounced.

What the Government are proposing under Clause 265 is a relaxation of this rule. We welcome this. But before we get too excited about it we must be aware of the restrictions that are to be imposed. An LEA will only be able to trade beyond the margins, first, when the Secretary of State by order says it can, and specifies which services; secondly, for a period of two years thereafter; thirdly, in its own or adjacent area, again as specified by the Secretary of State; and, fourthly, at full cost. It is with some, but not all, of these stipulations that we see some difficulty. I think that it is fair to say that the great majority of local councils (of whatever complexion) are deeply worried about them and have made their views known.

"Goods and services" is a wonderfully nondescript phrase. We are talking here about county music services, in all their richness and variety; about out-of-school drama; about the schools library service; about in-service training, career development for teachers, and all the networks of professional advice and support; about legal advice on school matters, and about personnel advice; about maintenance, repair, cleaning, catering; about school transport; about educational psychology and welfare. They are not just the optional extras—except I suppose in a world where the Back to Basics lobby has taken total control. They are part of the fabric of our children's education, and in the brave new world which is being ushered in the parents of the future, as they make their choice of school, will want to know whether and for how long these services will be available from the sources that have supplied them, on the whole successfully, up until now. This is what Amendment No. 287BA, with its cross-reference to Clause 265 (4) in Amendment No. 300ZA, is all about.

I said that we saw some difficulty with Clause 265 as it stands, with its four main restrictions. The chief problems appear to be these.

As schools opt out, so the operational base of the LEA declines and it becomes harder and harder to maintain a viable core of services. Diseconomies of scale begin to make themselves felt. "Well, good", say the Government, who want to see LEAs wither and perish. But there are children in LEA schools as well as in the GM schools who might want to buy in these services, and these children are bound to suffer if services decline in quantity and quality. That should concern us all.

The Government hope and expect that a thriving market will come into being to replace the local authorities. In some areas, and in some services, I dare say it will. But in others, notably in rural areas and where specifically educational expertise is called for, it will not be so straightforward. What if no market emerges in some of these areas—or no quality market—or at least no market within the specified two years? This is more than likely. What of the schools that only opt out after the two-year period has run? These are serious objections to the Government's plans as drafted.

It is claimed that, where gaps exist, schools themselves will be able to band together into co-operatives to supply the services. Well, it is a possibility. My scepticism springs from experience of schools getting together for these kinds of purpose in the past. It has often been tried, and it has not often worked. Schools are so different from each other (despite what many people think): each has its own agenda, which becomes all too apparent when the going gets tough. They may be attractive on paper, but arrangements of this kind so easily come apart at the seams, however enthusiastically they start. And we must remember that schools are now being set more and more in competition with each other, which is likely to make future co-operation even more problematic. And, again, in rural areas things will never be easy. An awful lot of schools would have to come together to produce the quality and economy of some of the LEA services they would be replacing.

I can foresee a difficulty with the Secretary of State's order which is to bring this clause into play. When will he know to make it? No one knows for certain at what point an authority is going beyond its margin: there are no certain definitions here; red lights do not begin to flash. What if he gets it wrong, which is not unlikely? Schools of all kinds will suffer.

Just as important—and it is curious to be making this point to a market-orientated Government—there is the issue of choice. Why should schools not purchase their goods and services from whomever they choose? Knock out the most experienced player, and you will ensure that in some areas children will get second-best. One odd effect will be that schools that remain with their LEA will be able to choose between their local services and the private sector, whereas grant-maintained schools can only choose the latter. Many schools in fact went grant-maintained in the full expectation that they would be able to continue to trade with their LEA.

On this point of choice, let me quote from a number of interested parties. First, the National Confederation of Parent-Teachers Associations: This is an area where parents have come forward in numbers to voice the desire to keep services under LEA responsibility safe for the future, eg school library service, peripatetic music teaching. They believe these services will disappear along with other much needed services in the name of cost effectiveness".

Next, the Association of Heads of Grant Maintained Schools: AHGMS is uncertain about the reasoning behind the proposal that local authorities should be restricted over the services which they may offer to GM schools. Many of us, particularly in rural areas, have valued the services offered. These have been freely negotiated after competition with other suppliers from both public and private sectors and we cannot understand why it is proposed that there should he restraint of such trade". The Museums Association has written similarly—but we shall doubtless be hearing about that in due course.

Then, the Girls' Schools Association: We cannot understand why, after two years, the LEAs must cease to market their services. The independent sector has taken advantage of these which are often excellent. If they are not no-one will buy them and they will, in any case, die. Why abandon a source of expertise already assembled? We are concerned lest the communities created by LEAs and their schools are to be destroyed and the smaller entities of single schools, with their parents and governors, become isolated islands, all competing against each other". That was the Girls' Schools Association. It is quite clear that the users of these services want them to continue at full strength.

I have described some of the problems. Other noble Lords may find other ones. Our solution in Amendments Nos. 299ZA, 299BA and in 300ZA is quite clear-cut. We have no quarrel over full costs, and not enough of a quarrel over geographical boundaries to make an issue of it here. But we want to do away with the need for the Secretary of State to intervene, in subsections (1) and (2). We think, for the reasons I have given, that there should be a genuinely free market, for the benefit of all schools and all children. And we believe that there should be no artificial time limit on it, in common with the noble Baroness, Lady Warnock, whose Amendment No. 300 also seeks to do away with the two-year restriction in subsection (4). If LEA music, grounds maintenance and curriculum advice are what GM schools want, let them have them; if not, they will wither away.

There cannot be an argument of principle against relaxing the Local Authorities Act of 1970, or the Government would not be proposing it themselves to meet the new situation. And that is the point: we have a new situation in our school system, and to meet it the legislative dog should wag the tail and not vice versa. We must do what is best for our schools—all our schools—and legislate accordingly. Common sense requires it. I beg to move.

Lord Judd

The proposals in the clause have caused widespread concern. Many schools have adopted grant-maintained status, as the noble Earl has been arguing, on the assumption that they would be able to continue to buy local authority services. They are worried by the Government's proposals. The clause could, paradoxically, act as a disincentive to parents in seeking grant-maintained status. Grant-maintained schools may, under the clause as it stands, have their main supplier of particular goods and services (the LEA) disbarred from trading with them. Parents put an enormous amount of time and effort into selecting schools for their children and take many aspects into consideration, including those which may be affected by the clause, such as the provision of school meals, library services, music tuition and the rest. Therefore it seems right that information as to which are provided by LEAs, and for how long LEA provision may continue, should be notified to parents. That would also mean that such information is in the public domain and therefore available—this is crucial—to prospective parents.

Clause 265, as it stands, provides for exemptions allowing LEAs to provide goods and services to grant-maintained schools by order of the Secretary of State and with an upper time limit of two years on such provision. The Secretary of State may also decree which goods and services may be supplied. The amendments to Clause 265 would enable LEAs to provide goods and services to grant-maintained schools so long as both the LEA and the school wish the service to continue.

If such trading is not allowed, a variety of problems might arise. For example, the proposed time limit will act as a disincentive to set up new or to develop existing LEA-based service provision. What privately run business would start up knowing that its markets could disappear in 24 months? Diseconomies of reducing scale as more schools opt out will make it increasingly difficult for LEAs to retain core services in support of their own schools without disproportionate expense. It is doubtful whether others will necessarily enter the market to provide those services. In some areas—I hope that we all listened to the point the noble Earl was making about this—particularly rural ones, schools could end up with a monopoly private sector supplier of some goods and services which the LEA could provide more efficiently and cheaply were it permitted to do so. The restriction is nothing more than a denial of choice to grant-maintained schools which perversely, as I have said, could inhibit future moves to grant-maintained status.

What I am very worried about in all this is the inevitable drift in the new policy. Are we really supposing that people who are driven by the profit motive—that is the honourable purpose of business—will be looking at the educational needs of the children all over the country or will they be looking for the opportunity for profit? Is this a sensible provision to introduce for the heart of our educational system?

Many of us who look at the provision are also worried by another insidious attack on the whole concept of service. At a time when we talk to young people about values and responsibilities, the message again being sent out is that provision can be made only by those who are profiting out of provision. The sense of service to the community, and effective service, is being dismissed. We know that the better local authorities have been providing outstanding services in that respect. If we become more specific, the issues that must worry us are in the sphere of, for example, outdoor activities. Outdoor activities can be highly dangerous. We have seen that in recent months. Surely the only acceptable standard for our children is a standard of provision which puts safety, professionalism and quality above all else. The thought that people may be coming into the operation merely to be able to make money has frightening dimensions for the future.

As it stands, the clause—I emphasise this point—has met with considerable opposition. The quotations given by the noble Earl were a good illustration of the breadth of the anxiety, because they came from quarters from which anxiety might not necessarily have been expected. I wonder whether I might add to his quotations one which I find particularly telling in this debate. It is from the secretary to the Headmasters' Conference, no less. What more prestigious body is there in the independent sector of education? He wrote: We are concerned that Clause 244 of the current Education Bill will effectively prevent local education authorities from providing support services to grant-maintained and independent schools after two years. Many independent schools have been pleased to take advantage of the services supplied by LEAs and are concerned that such activities will be now left to private enterprise. While our schools will certainly not need to be persuaded that educational activities can be effectively provided by the private sector, there is a serious danger of a valuable resource being eroded to a point where it ceases to be viable. We hope that Clause 244 can be suitably amended to allow the LEAs to complete with private enterprise in providing services to the grant-maintained and independent sectors". That was officially from the Headmasters' Conference to the Secretary of State.

In its report, The Implementation of Local Management for Schools, published by the DFE itself, HMI noted: The support offered by LEAs is an important contributor to the successful implementation of local management by many schools. The grant-maintained and independent sectors too have taken advantage of those quality services. It is difficult to see why this choice should be restricted in the way proposed". It is also worth recognising that not all grant-maintained schools will be able to benefit from the two-year concession, because, as the noble Earl underlined, that will be true only in respect of grant-maintained schools established at the date when the relevant order is made. Others established later will have a reducing period of discretion. Indeed, as he said, those established more than two years after the date of the order will not benefit at all.

It has been argued that the local authorities exist to provide services to those in their area and not to trade. Surely that should enable them to provide educational services to those pupils for whom they have a responsibility —those who reside in their area. That is not trading in simple market terms, but provision for the residents in their authority, which should be available whether they attend county or grant-maintained schools.

In conclusion, perhaps I may make this point: of course we want the provision of public services to be cost-effective. Nothing less than cost-effectiveness is acceptable. The electorate, and others, should keep its local authorities under sharp scrutiny in that respect. If the free market principle is to be applied, why should not the local authority be able to compete with other private suppliers? There is a basic illogicality here. It seems to me that, regretfully, here we go again at the beginning of our last day in Committee with a distressingly marvellous illustration—if that is not a contradiction in terms—of the way, repeatedly in the Bill, dogmatic ideology comes before common sense and quality. I am glad to support the amendment.

Baroness Blotch

Perhaps it would help the Committee if I come in on what I believe to be a misunderstanding of the relationship between the 1970 Act and the provisions of the Bill. If the Committee is agreeable it might inform the debate and of course it would not preclude anyone from coming in after me.

There has been considerable misunderstanding about this part of the Bill. Under the 1970 Act, as the noble Earl said, although he did not go on to discuss the relationship, so long as the LEA does not exceed the margin of capacity, it can provide services to schools (LEA-maintained or grant-maintained) in and beyond its own authority's boundaries. A designation order under Clause 265 would enable the authority, in addition to the 1970 provisions, to trade beyond that margin with grant-maintained schools within the authority or in the area of an adjacent authority. That is in addition to trading up to the margin of capacity in any other local authority.

During that period the LEA could also continue to provide services to schools in other authorities so long as in doing so it was acting within the margins of capacity of any service that relates to the functions of that authority. At the end of the two-year period, which has already been referred to, the authority will continue to have power under the 1970 Act to provide services to grant-maintained schools in any authority in the country, again, so long as it did so within the margin of capacity. These amendments call for the provision of services to anyone and for local authorities to he able to develop businesses to any size whatever.

It is important to make one or two comments about the margin of capacity. First, since 1970—that is 23 years—the margin of capacity has never, ever been determined because no authority has been challenged to have been operating beyond margins of capacity. The noble Earl, Lord Baldwin, asked how the Secretary of State will know. The Secretary of State has no hand in this. He will make no judgment on a local authority. It will be for the district auditor to judge that a local authority is spending money over and above money which it ought to be spending on services to people in its area and well beyond using any spare capacity which it may have. If a local authority disagrees with that judgment it will be for the local authority to challenge it. It will then be for the courts to decide the matter, which has not happened in 23 years. Only when the courts have determined will the provisions of Clause 265 come into play. The Secretary of State will indeed be invited to grant an order to a local authority to operate and to trade additionally to the provisions of the Local Authorities (Goods and Services) Act 1970.

Local authority services—and I mean local authority services, which subsume local education authority services—are many and varied. There is, for example, the payroll service. While a local authority exists and has a payroll service it may sell on capacity.

Earl Baldwin of Bewdley

Is the noble Baroness making a final speech or is she just clarifying a point?

Noble Lords

No.

4 p.m.

Baroness Blatch

I thought that I had made that clear at the outset. Another service is personnel advice. So long as the local authority has the facility and the provision to offer personnel advice, and so long as it does not operate beyond the margin of capacity, it can continue to do that into the mists of time.

So long as it is responsible as a local authority for museums that will continue to be its function and, therefore, they will not disappear as local authority schools become grant-maintained. The same applies to libraries; so long as libraries exist under the function of the local authority generally, the libraries will not disappear and the local authority grant-maintained schools will be able to borrow books from the libraries.

The noble Earl, Lord Baldwin, mentioned transport. I wish to inform the Committee at this point, because it is important, that transport is not affected by the provisions of Clause 265 of the Local Authorities (Goods and Services) Act 1970. Local authorities have the power to provide transport to any pupil at any school. The noble Earl also mentioned psychology services. As I said in previous debates on the Bill, they too are not affected by its provisions. They are protected by Clause 154, which empowers local education authorities to offer special educational needs services to pupils at any school.

When local education authorities have no schools in their areas they will still continue to have trading provisions as local authorities; for example, libraries and museums, which will continue to be a proper function of the local authorities. I hope that my comments have been helpful in relation to some of the debates that may follow.

Lord Dormand of Easington

In order to be sure what we are talking about, will the Minister define "margin of capacity"?

Baroness Blatch

I thought that I had made that clear and I had hoped to be helpful. However, I fear that I was not helpful enough. There is no way of defining "margin of capacity" for any one service. Local authorities have statutory functions. In providing for those functions, they will have departments which offer payroll services, in-service training, libraries, museums, social services and so forth. They will have those departments for the purposes of providing such services to people in their own areas. When they are deemed to be employing extra staff or using extra equipment to satisfy the needs of customers over and above the people for whom they are providing, they will then probably be in the area where they can be deemed to be exceeding capacity.

It will be for the local authority itself either to offer up and say that it is operating to capacity or for the district auditor to make a judgment. The local authority would be in a position to challenge that if it thought that it was unnecessary. If when a local authority is deemed to be trading at capacity, or verging on exceeding capacity, it has two choices. First, it can remain within capacity of any service and never, ever require a two-year extension. It can continue to provide services and to sell capacity to any customer it wishes. Secondly, it can, if it wishes to go beyond capacity, apply for a two-year extension. It may be that there is a good need, which is why the two-year extension exists, and that grant-maintained schools in an area adjacent to the authority will find it difficult to find services until there is another provider in the area. It will be for my right honourable friend to make a judgment about whether he grants that application.

Lord Ritchie of Dundee

From these Benches I had intended to rise in total support of the amendment. Indeed, we support the amendment but we have a confused situation. Many parents, teacher and those connected with education are confused by the situation. They fear that Clause 265 is threatening the continued services and goods offered by local education authorities. As the debate proceeds today we hope that the Government's intentions will become clear.

Many people are worried, confused and suspicious of the Government's intentions. Is it their intention that ultimately local education authorities shall dwindle into mere services for special needs and that everything else will be provided by private enterprise? That idea is extremely problematical. The services may not arise, they may work only for profit, they may become private monopolies, and people are anxious that services such as outdoor education will cease to be adequately supervised.

I ask the Committee to bear with me because I wish to seize the opportunity to read a brief excerpt from a letter which I received from the recently-retired chairman of the Association of Heads of Outdoor Education Centres, Mr. McMorrin. He stated: Whilst I would not wish to anticipate the findings of any inquiry, the recent tragedy at Lyme Bay has focused attention on the need for staff supervising pupils in potentially hazardous situations to be appropriately qualified and experienced. The LEA Centres, particularly those whose Heads are members of the AHOEC, have constantly sought to ensure the safety of their pupils by investing in qualifications and experience. Our concern is that, since such staff are the most expensive item in any Centre's budget, they are the most likely to suffer reductions when cuts have to be made. Since the thrust of Government policy in the Education Bill is for the Outdoor Education service increasingly to be provided by the private sector, we are concerned that the need to operate at a profit will result in corners being cut in the provision of qualified staff". That is a real anxiety from an important source. I hope that today we shall have some reassurance from the Minister about the issues which worry many people most seriously.

Lord Jenkin of Roding

I had thought that when the noble Lord, Lord Ritchie of Dundee, said that he had intended to support the amendment he would go on to say that, having heard the explanation of the background, which was given by my noble friend on the Front Bench, he had reached the conclusion that the matter was rather more complicated than he had assumed. That is certainly my experience. In the briefs that I have received from reputable organisations representing, for example, local authority finance officers, and others, there is no reference whatever to the 1970 Act.

The noble Earl, Lord Baldwin of Bewdley, had obviously done his homework extremely well because he started by quoting the 1970 Act. I am immensely grateful to my noble friend for explaining the matter so clearly because the 1970 Act remains at the heart of this and all the powers still exist. I had not understood that. That is perhaps my fault and I should have gone into the matter more deeply. I find that I have added my name to an amendment already tabled by the noble Baroness, Lady Warnock, to take out subsection (4) on the understanding that this was merely a two-year transitional period after which a grant-maintained school would not be entitled to use local authority services.

My noble friend has entirely satisfied my doubts on that score. It is clear that the 1970 Act refers not just to education services but to all the services which a local authority is entitled to provide. Nothing in this Bill reduces that. On the contrary, Clause 265 extends it to some extent and gives a power to the Secretary of State. Although I shall listen carefully to the rest of the debate, I must say that those of us who were anxious about the effect of Clause 265 have had our anxieties substantially removed.

Baroness Hamwee

Before the noble Lord sits down, is he satisfied that if in five years' time there is merely marginal capacity, will all the grant-maintained schools which may wish to look to local authorities, be able to obtain the services that they require? That seems to be what the noble Lord is saying.

Lord Jenkin of Roding

On the contrary, it seems to me that, where there is a creation of grant-maintained schools which had previously been local authority maintained schools, there is no increase in the demand and, therefore, no need for any increase in capacity. If the local authority is then able to show that it can continue to deliver satisfactorily, for example, library services, outdoor sports services and all the other services which have been mentioned in the course of the debate to the benefit of those authorities, it seems to me that the limit is adequate. I am grateful to my noble friend for making that clear.

The Earl of Onslow

I had some doubts about this clause. I was approached by a clever man who understands these matters much better than I do to mention the music side of this issue. Having listened to the noble Lord. Lord Judd, I thought, "There is a splendid old-fashioned high Tory speaking", as I seemed to agree with everything that he said.

I then thought to myself that the 1970 Act was probably passed for a system of education and local authorities where outward contracting was not thought of at all. My noble friend on the Front Bench has comforted me and the noble Lord, Lord Jenkin, has helped even further my understanding, for which I thank him.

If I have no worries about schools losing music teaching, orchestras and bands because the situation is more or less the same plus a hit extra if needs be, then we can all tear up our speeches and go home and not do all the homework which we thought we might have to do. In saying that, I must thank my noble friend for sending me a long and detailed letter which was helpful and explanatory even though I had to try hard to understand it.

If she is saying that there is nothing to worry about, I shall sit down, shut up and thank God for that.

4.15 p.m.

Lord Judd

Perhaps I may comment on the Minister's intervention which did not clarify the situation for me. The 1970 Act was passed when there were no grant-maintained schools. Therefore, the question of trading with them did not arise. Surely that means that the Minister's comment that authorities have never gone beyond the margins of capacity is rather irrelevant to our considerations.

It is more significant that once a number of schools in an area have opted out, authorities will inevitably quickly move beyond the margins of capacity in educational services, such as music teaching and outdoor education. That is the ground for our anxiety.

I believe that legislation should clarify issues. After all, this Bill has 229 pages. However, we are now told by the Minister that at the very best there is a confusion which the courts must sort out. Therefore, we are going into the educational future of our country by saying to local authorities and schools, "There is a muddle, hut, if necessary, the courts can sort it out". Surely legislation should clarify the situation from the start.

People reading the Bill will see, as distinct from the convoluted arguments used by the Minister this afternoon, that Clause 265(4) states: This section may not apply to a local education authority after the expiry of the period of two years beginning when it first applies to the authority".

Lord Campbell of Alloway

With respect, the observations of the Minister were not confusing at all. They were declaratory and most helpful. Indeed, they stated in plain English that what would happen in the courts is a matter of construction which I had not appreciated until—I agree—the matter was clarified. The courts construe and must construe the 1970 Act as applicable to changed circumstances.

I seek further clarification on one point. It has been said that, as regards contracting out services, standards would fall, qualifications would not be demanded and safety provisions and so on would slip. If the local authority contracts out, can it not impose conditions to safeguard qualifications and standards? If that is done, everything would be all right, would it not?

Lord Rochester

I asked the Minister a question following a point made by my noble friend Lord Ritchie: are the Government proposing to provide LEAs with guidelines which will enable them to fulfil their statutory duty to secure adequate facilities for recreation and social and physical training and also, for that matter, to maintain the youth service as a priority concern? It is the definition of that word "adequate" on which I seek such reassurance as the Minister is able to give.

Earl Baldwin of Bewdley

The noble Baroness on that point did not say anything that I had not myself assumed. If I pretended to be an expert on the 1970 Act, I am certainly not in comparison with the noble Lord, Lord Jenkin, but my firm understanding was that, yes, it would continue within the margins. But the issue is, I think, whether those margins are going to be wide enough to enable anything realistic to survive afterwards. An awful lot of people in the country have studied this and have come to the very firm conclusion that they will not. Therefore I was surprised but very interested to hear the comment of the noble Lord, Lord Jenkin, that there was no problem. I continue to believe that there is a big problem.

Baroness White

I tried to follow the Minister's explanation. I am still not quite clear why we need to worry about two years. Why is it necessary to have two years?

Lord Montagu of Beaulieu

I am sure that the Minister is aware that Clause 265 has given rise to a great deal of worry on the part of a number of organisations. As past president of the Museums Association and a patron of the Association of Independent Museums, my chief concern is the possible damage which may be caused to museum education and services traditionally provided by the LEA.

But, having heard my noble friend's reply, I think that perhaps our worries have been dissipated in many ways. I should like to thank my noble friend for explaining it so well. 1 am sure she will agree that local education authorities can make a major contribution to museum education, most particularly as regards the secondment of teachers which is a two-way traffic whereby teachers can also benefit enormously in their careers by working in museums. That was the reason behind my amendments to the clause. I am now mostly satisfied by my noble friend's reply.

Lord Dormand of Easington

Perhaps I may, unusually, help the Minister by asking a very simple question. Is she saying that the position will be no different from what it is at present?

The Earl of Onslow

I have one very small point to raise. It appears that there has been genuine confusion in the matter. Therefore, would it not be better at some stage to insert in the Bill a clause which makes it much more difficult for people to arrive at such a confused view? I suppose that asking for legislation to be clear is asking for the impossible, but that is just a rather cynical view.

Lord Ritchie of Dundee

I trust that the Minister will bear with me for a moment. Is it true that in two years' time local authorities will be in direct competition with possible private companies that may come forward, but that the former will have the prohibition on them that they may not trade beyond marginal capacity, whereas the private companies can trade as they wish? In that case, the LEAs would surely be at a disadvantage in an open market, especially so as their central funding from the schools within the authority is likely to have diminished; more schools will have opted out and so they will not be trading on equal terms—or, to use that other cliché, on a level playing field—with the private companies that the Government hope will come forward. Is that the case? Am I right in my assumption?

Lord Boyd-Carpenter

Before my noble friend the Minister replies, I should like to ask her a question. It is possible that she covered the ground in her earlier intervention. However, if she did, I did not understand it. My question is a simple one and it is about Clause 265(4). What is the point of the two-year time limitation?

Lord Campbell of Alloway

I should like briefly to support the suggestion made by my noble friend Lord Onslow. It may well be a good thing if the clause itself could be clarified so as to show that it is in fact in terms applying the 1970 Act, without amendment, to change the circumstances.

Baroness Hamwee

Perhaps I may speak again just shortly simply to say that I wonder whether we are going down quite the right road. I well understand that Members of the Committee opposite are satisfied as to what the provision means. However, I am not satisfied that what we have heard so far actually answers the real underlying problem, which is not whether local authorities will be in the same position in two years' time as they are now—that is, able to trade at the margin of capacity; I understand that that is the case—but whether trading at the margin of capacity will be sufficient for the educational demands of grant-maintained schools.

Baroness Blatch

I began by saying that there has been misunderstanding. I am totally confirmed in my perception of the misunderstanding by the noble Lord, Lord Ritchie. Even after my intervention and what has been said today, the noble Lord stood up and asked what would happen after two years and whether local authorities would have to compete with the private sector. The most commonly-held perception is that, when the Bill receives Royal Assent, the clock starts counting on two years at the end of which local authorities will no longer be able to trade.

Perhaps I may counter a quote used by the noble Earl, Lord Baldwin of Bewdley, when he mentioned the NCPTA (the National Confederation of Parent-Teacher Associations). I can remember attending a conference when a very senior member of that body gave me an explanation of how she perceived that part of the Bill. It was quite clear to me that she actually believed that the two years started counting once the Bill received Royal Assent. Nothing of the kind is going to happen; that is a wholly wrong perception.

I am constantly asked—and, indeed, I have been asked again—for a definition of the word "capacity". It is difficult to define. If one looks at services that schools require, some of them are very school specific, such as in-service training which would be a totally school specific provision. But many of the services that schools require, especially as they become grant-maintained, are, for example, advice about personnel matters, payroll and managerial issues which local authorities generally provide. That is a local authority function. I have already mentioned many of them: museums, transport, personnel matters, payroll matters and psychological services for special needs children. So there are many services which relate specifically to local authorities' functions generally. They will continue to operate under the 1970 Act. There is nothing in the Bill whatever that cuts across or renders invalid the provisions of that Act.

My noble friend Lord Onslow said that that means that we no longer have any worries. I do not wish to be over-simplistic in the matter because I think that that would be wrong. Of course the world is changing because more and more schools are becoming grant-maintained. But the world is changing in any event for local education authorities. As local management of schools becomes a firm policy in all local education authorities, the money for many of those services is actually in the hands of the schools. I think that those who support the amendments on the Marshalled List have already said that they have no quarrel whatever with services being paid for at a proper cost.

Therefore, having agreed that, all we need to be certain about is that schools—whether they are LMS schools within a local authority or whether they become grant-maintained—can purchase the services. It is only when a local authority ceases to have a function that it is not able to provide the service. It is very difficult to find any particular function that it will not have in at least the short to medium term future. It is a long way into the future when it is conceivable that any local authority will have no local authority schools at all. Indeed, out of 24,000 schools, 18,000 to 19,000 of them are primary schools and the others are secondary schools, in addition to special schools. It will only be when they cease to have a function to provide services to those schools that the provision will seriously start to bite.

My noble friend Lord Campbell of Alloway asked about the position when a local authority contracts out services. He is indeed right in the assumption he made that, of course, local authorities are able in very great detail to specify the standards required. Even better, they are able to build in penalty clauses for those contracts to ensure that those standards are achieved. That is not so with local authority provided services. The standards are very often hit and miss. If it is a good, well run local authority, the services will be good and the quality will be high; but, if it is not, there is no guarantee that the services will be of high quality. Moreover, there is no contract to enable one to do anything about it.

My noble friend Lord Boyd-Carpenter asked what was the purpose of subsection (4). I should like to reply in a way which I believe will also partly answer the point raised by the noble Baroness, Lady Hamwee. Let us think, for example, of all the secondary schools in a particular area moving into the grant-maintained sector and something which is entirely school specific. As I said, I find it very difficult to define services as entirely school specific, but if there was a department in the local authority that provided in-service training for secondary schools only—although that is not the way that local authorities usually set up their in-service training—it would cease to have the function to provide that service to its secondary schools, because it would cease to have LEA maintained secondary schools. Schools (whether they were locally managed schools within the LEA-maintained sector or grant-maintained schools) have the money in their hands to purchase the services. While they were in the local authority (while they were LEA-maintained) they would clearly purchase those services from their local authority. If those schools were all grant-maintained they would not be able to do that because the LEA would not be free to provide them. They could seek for a two-year period of extension in order for the providers of services in that area to adjust to the new situation; in other words, for other providers to come up in their stead. Very few services fall into that category.

Perhaps I may give an example that relates to a query of my noble friend Lord Onslow about music. Kirklees, a Labour-controlled local authority, representatives of which came to my department yesterday and have been talking with my department for some weeks, has an excellent peripatetic music service. It has already made it a self-contained entity within the local authority where the peripatetic services are bought in by the schools. I understand that the next stage is probably that it will become private, with the same professionals providing the lessons and the schools purchasing that provision, but purchasing it from this body which was once wholly controlled by the local authority, then given trust status and then moving out into the private sector. The two-year extension is to allow for that period of adjustment for grant-maintained schools to secure services.

I have a very long speaking note to which I have not referred because it relates specifically to individual amendments. I believe that there has been sufficient debate for me to say how I believe that this part of the Bill would work. If people—

4.30 p.m.

Baroness David

I am sorry to interrupt the noble Baroness. I want to speak to the amendment that is in my name because I am not altogether convinced, as some people seem to be—I do not think that the noble Baroness, Lady Hamwee, is. In case the Minister was going ahead with the total reply, I should like to inform her that I intend to speak to my Amendment No. 300B.

Baroness Blatch

I was about to suggest to the Committee that I abandon my detailed note, which is rather long, because in a general sense many of the points raised have been addressed during discussion of the amendments. I will of course sit down and allow the noble Baroness, and anybody else who wishes to speak to individual amendments, to do so, and I shall continue to answer questions. But I believe it would be tiresome for the Committee if I went over a very detailed reply to the amendments when I may well have covered the points generally. But of course I stand to be advised by the Committee.

The Earl of Onslow

I am sorry to come back to my noble friend again. I think it is probably because I am not being as intelligent as most other Members of the Committee on this occasion. Am I right in saying that if all schools in a local authority go grant-maintained as opposed to local authority area, the LEA would have to close down, say, its peripatetic music organisation or form it into a trust; that it would not be allowed after two years of the vanishing of the purpose to run a system of peripatetic music? I understood from my noble friend's first reply that they were to be allowed to do that. It is the let or hindrance bit that worries some of us. If it will be the same as it was with a little extra help to allow people to go outside, that seems to be excellent. But if at one stage one is going to say, "No, you can't", some of the easing of my worry has now been "uneased", if that is the right word.

Baroness Blatch

First, perhaps I may draw a distinction in respect of music. There is music within the national curriculum which this Bill does not affect. The national curriculum music is an entitlement to children which local authorities are under an obligation to provide. The peripatetic music provision in most local authorities deals mostly with providing music tuition to children in schools. At this time the money for purchasing that music is now in the hands of schools under the local management-of-school system. So already local authorities' schools purchase musical tuition from the peripatetic musical staff, which in many local authorities now is a self-contained entity within the local authority. That continues.

It is a very long time in the future, but if every school in a local authority were in the grant-maintained sector, then the local authority would not have that function to provide, other than to provide for its music within the national curriculum. What would happen is that those same professionals would probably have moved to the halfway stage of being a trust within the local authority—my own local authority is one such example; Berkshire is another; Kirklees is another (there are many of them up and down the country). Instead of local schools purchasing their music from the peripatetic music service which is part of the local authority, that peripatetic music service would not be allowed to function under the local authority if it had no schools at all in its charter.

Baroness Seear

I am sorry to prolong this discussion, and it may be my fault because I have had to pop in and out. It seems to me that a lot of trouble arises from the use of the word "may", which is always ambiguous. Does "may not" mean "shall not" (will be prohibited) or does "may not" mean "perhaps it will" (perhaps it won't)? Is it to mean: this section may or may not apply to a local authority, or the section must not apply?

Baroness Blatch

The point I have been making is that Clause 265 is permissive. There are local authorities in this land which may never need the provisions of Clause 265. They will provide services only to their own customers and they will operate wholly within capacity. I should say to the Committee that when we talk about exceeding capacity, we are talking about a local authority that has a function to provide a service but is providing it not only for its own people; it has used up all its capacity and still wants to go to customers beyond that.

All I am saying is that we then come to a point which I believe seriously divides both sides of the Committee. Are we going to allow unlimited capacity in scope for local authorities to become businesses—for that is what they do once they go past needing to provide services for their own people and enter the business of selling services to anybody, employing more staff, employing more equipment and attracting more customers? If they do that, then they are becoming businesses as opposed to local authorities, there to provide services for local people. When they get into that situation there is a serious philosophical difference between those of us on this side of the Committee and those on the opposite side.

Having said that, I believe, first, that there is genuine concern about the future of services for grant-maintained schools and, secondly, there is a serious misunderstanding about the clauses in the Bill. These will be triggered only if the local authority is literally operating up to and beyond the margin of capacity and has used up two years doing so. Then it is not allowed to provide any more services. We are talking about local authorities entering into the world of being businesses rather than local authorities providing local services.

Lord Judd

The Minister was very helpful in her last intervention. She has made it very plain that there is a more fundamental difference within the Committee over this matter than was perhaps suggested at the beginning. She said very specifically in her last remarks that the objective is to prevent the local authority becoming a business. None of us wants the local authority to become a business. But we do believe—if she reads Hansard she will find that that is what she said.

Baroness Blatch

I do not deny that. But I said businesses "over and above" providing services that relate to its own functions for its own people.

Lord Judd

I accept the point that the noble Baroness makes and I believe she hopes to clarify the situation. What some of us are saying is that some local authorities have built up unrivalled expertise and quality of service, and it is quite extraordinary that they should then be artificially debarred from competing in the market-place. That is what we find very odd in terms of the commitment of the Minister and her colleagues to the market. It is not an open market; if the local authority wants to compete, it is not allowed to. That deeply disturbs us and is causing a great deal of anxiety in the country; particularly because in areas such as outdoor activities—I do not think that we can emphasise outdoor activities too much because of the dangers and the hazards that operate there—some local authorities have built up their reputation on the basis of safety, quality and professionalism. There are genuine anxieties about the cowboys who may begin to operate when they see the opportunity for profit, and children's lives become at risk.

I am very grateful to the Minister for having opened up this debate. She has, almost painstakingly, made it clear that there is perhaps a bigger issue here than at first we were led to suppose.

The other point I must make is that I find her argument tortuous. If local authorities were not likely to go beyond the margins of capacity in providing specific goods and services there would be no need for the clause. So why is it there? The clause has obviously been introduced because there is a problem. The Minister really cannot have it both ways.

Perhaps the most important point arising from the debate in Committee is that it is becoming clear—if this is not a contradiction in terms—that the Bill is about as clear as dust. The Minister herself has said that there is a serious misunderstanding about the Bill. If there is such a serious misunderstanding about the Bill, she and her officials should be worried about that. It would be encouraging if she felt able to say to the Committee this afternoon that she accepts that there is a misunderstanding and that the situation must obviously be clarified and she will therefore take the clause away, have a look at it and come back at Report stage having made the situation much clearer.

Lord Campbell of Alloway

I should like to ask the noble Lord, Lord Judd, for his help. Is the burden of his first point that the long-stop provision of the Audit Commission and the facility to go to the courts for a declaratory judgment—which has never been done—is not satisfactory and the mechanism ought to be changed? Is that one of the aspects which he believes should receive attention?

Lord Judd

I always respect interventions by the noble Lord. My response is that it does not seem to me to be satisfactory that when we are considering a Bill which is supposed to be taking the educational system of Britain into the next century we should be told that the drafting has led to a great deal of misunderstanding. We have been told that by the Minister herself. We have been told that there will be misunderstandings and tangles ahead but if they arise they can be sorted out in court. That is an admission of inadequacy in drafting.

I have been longing to applaud the Minister on something during our deliberations. I would applaud her if she felt able to say to us this afternoon that, having said that there is serious misunderstanding, clearly the matter ought be put in language which can be better understood. If even the Headmasters' Conference has misunderstood the situation, what hope is there for the future of Britain? It seems to me that the Minister should tell us now that she is taking the matter away and will come back at Report stage with the situation clarified. We would then almost give three cheers.

Baroness Blatch

The noble Lord is contributing to the confusion in this debate as much as anybody. The Act which I described has been on the statute book since 1970. That Act, which underlines all of this and which my noble friend Lord Jenkin of Roding mentioned when I first intervened in the debate, has served local authorities very well. Local authorities provide all manner of services: social services, housing, street cleaning, collection of waste, all aspects relating to education and so forth. Local authorities have always provided those services. They have no need whatever to make judgments themselves about what is marginal capacity. They behave in what they believe is a sensible way, providing services for their people.

It is for the local district auditor, who every year inspects local authorities' books, to make a judgment about whether authorities are spending local ratepayers' money in a way which is defensible and consistent with their functions. The system has worked for 23 years. There is no confusion about that.

There is nothing in the Bill which cuts across that or invalidates the provisions of that Act. The local authority will continue to operate under the 1970 Act, just as it has for 23 years. However, because of the growth of the grant-maintained sector, and because there has been some anxiety, we have allowed an extension should a local authority find itself, at some time in the future, with no local authority schools at all and its functions in that area cease to exist. I have named a large number of local authority functions, which are not school specific, which will continue and which schools will use. Those functions include payroll, advice about industrial relations, transport and psychology services for children with special needs. Those are all important.

There is one other Act of Parliament which I have not prayed in aid of my case but which may help my noble friend Lord Onslow. In addition to national curriculum music and the arrangements which I have spelt out, and in addition to the provisions of the 1970 Act, there is also Section 145 of the 1972 Act. That section gives local education authorities the ability to assist in enabling the setting up of orchestras and bands. That is outside the curriculum. It is a local decision. It is for local authorities to decide. Where they do so the law allows pupils who attend grant-maintained schools to participate without having to seek a designation order under Clause 265.

Some local education authorities, despite having that freedom to act on behalf of their grant-maintained schools, are denying grant-maintained schools that service. Here we have people pressing us to allow local authorities to provide the service. Under the 1972 Act they are free to do just that.

4.45 p.m.

Lord Boyd-Carpenter

Will my noble friend answer the question which was originally put to her by the noble Baroness opposite, which I found rather difficult to follow? I do not believe that my noble friend has answered that question. In the famous subsection (4), around which a good deal of discussion has centred, the word "may" is used. It reads: This section may not apply to a local education authority". Is that equivalent to "will not apply", or is it equivalent to saying that it may or may not apply? If it is the latter, in what circumstances would it apply or not apply?

Baroness Blatch

I was going to have a stab at clarifying that point myself and stand corrected if necessary. My understanding is that under subsection (4) a designated order may not apply after the two-year period. That means that it shall not apply. If the Committee believes that it should read "shall" rather than "may", I shall take that point back to my department and I shall beat counsel over the head in order to have the matter made even clearer on the face of the Bill.

Lord Boyd-Carpenter

I should be very glad if my noble friend would amend "may" to read "shall". Then we would really know what it meant.

Lord Ritchie of Dundee

At the risk of being thought boneheaded and obstinate, I feel that what we are really talking about and what a great many people and organisations in the country, parents and the education profession are concerned about is quality assurance. They are afraid that as the system is unravelled the quality of services which have been offered successfully for a number of years will decline.

I believe that I am right in saying that there was a parallel fear at the time of the abolition of the ILEA which, with all its disadvantages, offered excellent services of this type. Although the individual boroughs have made a good attempt a great deal of expertise was lost. That is the fear in this case. Many people do not see the two-year period in a positive sense. They see it as a negation. That is what is misunderstood. I believe that people are really concerned about quality assurance and what will happen as the system is unravelled.

Baroness Warnock

I am almost ashamed to say that I still do not understand what the Minister has said, because she has taken immense trouble. Like an excellent teacher she has made allowances for the stupidities of those of us who still do not understand. However, whether or not I decide to move the amendment to which I have put my name—Amendment No. 300 —depends upon the answer to a question which I must put. We have heard that in the event that there were no longer any local authority secondary schools in a particular local authority area but all of those schools were grant-maintained, it would not be possible for the local authority to continue to supply services which were wholly school related. I think that I understand that.

But let us consider that that the local authority area is divided 50:50, or 60 per cent. grant-maintained schools and 40 per cent. local authority schools. The local authority still has the power and duty to provide school services such as peripatetic music teaching for its own schools. It has the ability to provide for grant-maintained schools also if those schools so wish. When the number of local authority schools drops to zero the local authority has no schools function whatever. It can no longer supply the grant-maintained schools with those services.

That is the point that I do not understand. When the local education authority still has two or three schools to supply why is it possible still to supply the grant-maintained schools with services but no longer to be able to do so when the last local authority school becomes grant maintained? I do not understand why the local authority can provide such services in the first instance but not in the second.

Baroness White

Has the noble Baroness taken into account the entire reorganisation of the local pattern by the Secretary of State for Wales? The provision is not as important as it is for England because I do not believe that we shall have many grant-maintained schools in Wales. However, has the situation been taken into account? It will involve a completely different balance between the authorities.

Baroness Blatch

No, it makes no difference. Whether or not there are grant-maintained schools, there will be local authorities with a local authority function. Perhaps I may say to the noble Baroness, Lady Warnock, that even if there were no local authority maintained schools in an area—in other words, if every single school had become grant maintained—there would still be a local education authority which has functions as set out in the Bill. Those authorities have serious functions to do with transport, special needs, psychology services and a host of matters. They continue to have those functions with or without their own maintained schools. Those functions remain. It is the service which a grant-maintained school purchases. If it is one of the general services, there will always be a local authority in the area with a function to provide most of those services. The services that are entirely school specific are very narrow and few. Those professionals who provide those services now—we are referring to a long way down the track—continue to be the same professionals, living and working in the area. They will simply provide those services, in the first instance perhaps under trust status. I have a long list of local authorities which are doing just that. The next step down the road, which again some local authorities are undertaking, involves their becoming private entities within the local authority area.

Baroness Warnock

The noble Baroness takes a very philosophical view. She takes the extreme case of an authority which is no longer an education authority because there are no more local education schools. That is an extreme—and at present I believe fairly fanciful—example. However, I worry very much about the transition period towards that glorious day when all schools are grant maintained. It will be extremely difficult for local education authorities to plan which services they will be required to provide as their own schools diminish in number and they do not know for certain whether the grant-maintained sector will wish to buy those services. How can a local authority regulate the cost of continuing its provision if it does not know which services will be required for any length of time? The period may be two years, five years or whatever; it is irrelevant. It is difficult for the local authority to be told that it may or may not be required to provide services. It will not know the answer until the grant-maintained school has made up its budget.

I realise that it can be argued that under LMS the same system applies. However, the LMS school is still a local authority school and the local authority is therefore responsible for the supply of services. There is an enormous difference in the situation when the numbers of schools are becoming fewer and the local education authority has a smaller area of responsibility.

Baroness David

I appreciate the Minister seeking to explain this complicated affair. However, some of us thought that we understood it previously. From his opening speech I am quite sure that the noble Earl understood it.

I wish to speak about school libraries and museums. From my brief I believe that the people who are anxious about the schools library service understood the position perfectly clearly. They are still extremely anxious about the situation. I shall therefore speak to my Amendment No. 300B because it may help a little with the general understanding.

Clause 265 is viewed as a concession by Ministers. At the moment the ability of local authorities to "trade" with other public bodies such as grant-maintained schools is limited by the 1970 Local Authorities (Goods and Services) Act. That has been interpreted by the Audit Commission and by the Government to mean that local authorities can only "trade" at the margin with such bodies using up excess capacity, but not investing extra resources to have the capacity to be able to provide services to them.

If the number of schools opting out increases, then it is likely that the schools library services, and other LEA provision, will soon be trading outside the margin, possibly unlawfully. At this stage the Education Bill provides that the Secretary of State can issue an order exempting authorities from the restrictions of the Local Authorities (Goods and Services) Act for a period of two years. However, after that all the services must be provided by the private sector.

The Local Authority Associations believe that the Audit Commission's interpretation of the 1970 Act is much too restrictive and a number of authorities probably already contravene the Act on that interpretation. However, it has never been tested in the courts and there is a danger that many schools library services could face extinction if the Audit Commission's views were accepted. The proposed amendment, Amendment No. 300B, allows the Secretary of State to extend or renew an order should no alternative schools library service provision be available at the end of the first two-year period. In the light of the debate over what the law means, it is very much a safety-first amendment.

Perhaps I may refer to the role of the schools library service. The schools library services are run either by the public library service as an agent of the LEA or directly by the education authority itself. They support the work of library and information services within primary, secondary and special schools. Typically they will provide a book exchange scheme for schools, a project loan scheme to support individual projects being undertaken within schools, an advisory service to schools on all aspects of school library management and use, training for teachers and information handling skills, and work in skills promoting the enjoyment of reading. They are an essential back up to library and information services within schools as no individual school could hope to provide all the learning resources necessary to support the curriculum. They provide a network of professional support for librarians within schools. They are also highly commended in most HMI reports and on occasion highlighted as the only good thing about a school library.

Numerous HMI reports attest to the sorry state of library and information services within schools. The Book Trust report, Books in Schools, was published only a few months ago. It highlights the importance of reading ability in relation to overall educational attainment. However, the report opens with the statement, Rarely have so many pupils had so few books". The last HMI report on secondary school libraries revealed that almost half the schools surveyed did not offer a satisfactory service.

The agency best placed to counteract those inadequacies of provision is already in existence—the schools library service. If it disappears, all schools in an area are likely to end up having no service rather than increased choice. We can see no reason why a local authority should not be able to continue to provide a service to grant-maintained schools in competition with others. It is known that many grant-maintained schools appreciate the schools library service which they receive from the local education authority, with many opted-out schools buying back in.

There is little or no evidence to suggest that the private sector will be able to provide an alternative service in all areas of the country. The private sector has shown little interest, for example, in providing public library services where these have been offered to private tender. If current schools library services set themselves up as independent trusts, it will presumably remove them from the proposed restraints, but we cannot be confident that the availability of such a provision will be consistent across the country after two years. There is a great danger, therefore, that many schools would have no provision available.

The proposed amendment is intended to give the Secretary of State powers to renew orders in areas where no alternative provision will be available from the private sector, thus ensuring that all pupils have access to their full entitlement of schools library services.

In fact, I prefer Amendment No. 300 which deletes subsection (4). What I have said about the schools library service refers equally to the museum education service which I believe does an absolutely marvellous job. I cannot see how any private business could possibly provide what it provides. Only about six weeks ago I went to the Dulwich Picture Gallery and was shown round by Mrs. Gillian Wolfe, who is in charge of the education department there. I spent a morning watching schools parties going round and it was a marvellous occasion. The children were absolutely rapt, there was an actor dressed up as Van Dyck, who was explaining the period of the pictures, when they were painted and so on. I do not think that any other private service could possibly supply what those people are doing. The departments for education in the museums rely very much on local authority funding. It is that kind of service that I believe is in danger of disappearing. I understand and I believe that the schools library service understands what the clause means. I very much hope that the Minister will agree to take the amendment back; we should all be happy if she did so. But I felt that I wanted to say my piece about the schools library service and the education side of the museums.

5 p.m.

Lord Renton

Perhaps I may remind the Committee briefly that this long and marvellous discussion on Clause 265 and the amendments to it has taken place on the first amendment on the Marshalled List, which is to add a new clause after Clause 246 and which has only a slight effect upon Clause 265. The first amendment has scarcely been discussed.

I feel bound to make the comment, however, that as it requires only one parent or guardian to seek any information from the governors collectively about a matter arising under Clause 265, the amendment should not be at all necessary. I should expect the governors, if circumstances require, to give information about the operation of Clause 265—indeed about the operation of the 1970 and 1972 Acts.

However, I say with deep respect to the noble Earl, Lord Baldwin, and the noble Lord, Lord Judd, whose names are to the amendment, that it is an over-zealous provision of the kind which makes our legislation so detailed and voluminous and, incidentally, it raises further problems of interpretation. It would also add to the cost of administration. Therefore, I wonder whether in those circumstances it might be better for the noble Earl and the noble Lord not to press the first amendment. We have had a wonderful discussion on Clause 265; we shall obviously all have to think about it. The discussion has gone on for one hour and 21 minutes.

Lord Lucas

I have learnt a lot in the last hour and 21 minutes, but have not really understood how the definition of "trading at the margin" will operate. As an accountant, I know that it is hard to define and is capable of being interpreted much more fiercely than the Government appear to interpret it. I feel uncomfortable that this important idea should be left for some future definition by the courts.

Perhaps I may pick out an example from the subject addressed by the noble Baroness, Lady David. If a museum, which is clearly protected under the current arrangements, had a number of staff guiding school parties around, it is quite clear to me that, under any reasonable definition of "trading at the margin", if the number of grant-maintained schools in an area grew to the point where one of the staff were solely concerned with guiding grant-maintained pupils round the museum, it would be trading beyond the margin.

Baroness Blatch

Perhaps I ought, first, to refer to museums and libraries because I understand the anxieties that have been expressed about them. However, I also need to say to the noble Baroness that at least one illustrious Member of the Committee runs a private museum very well and does extremely well by young people. First, perhaps I may refer specifically to museums.

Baroness David

I know that that covers one museum, but there are areas where the children need to go; it is more than just one museum.

Baroness Blatch

Of course, I concede that point, but the noble Baroness said that it was inconceivable that a private museum could provide the same kind of service as a local authority-run museum. I am simply saying that they can do so, and there are examples where private museums provide very good services to young people.

Museums which receive funds other than from a local authority, including nationally funded and private museums, are not the issue here. Nothing in the Bill affects them. My noble friend Lord Montagu's museum—the one to which I referred just now—is most impressive and one which I have had the pleasurable experience of visiting. It provides a wonderful experience for young people and is also not at all affected by the legislative framework which we are now discussing.

Where local authority-funded museums occur, they exist to provide a museum service in all its guises and to all the people within the local area. There is no question of any of that being affected by the provisions of the Bill. In the course of their work in some areas, the museums will provide services to schools in terms of school visits, help to teachers and exhibition artefacts being taken into individual schools. Under the Public Libraries and Museums Act 1964—another Act of Parliament which I pray in aid of my case—a local authority is required to take into account the need to secure that a museum or gallery plays its full part in the promotion of education in the area and to have particular regard to the interests of children and students.

A local authority may also make contributions towards the expense incurred by any person in providing advisory or other services or financial assistance for the benefit of a museum or art gallery. So it goes on being a function of the local authority. Finally, a local authority maintaining a museum or art gallery may establish a fund to be used for the purchase of objects for exhibition in any museum or gallery maintained by that authority. Of course, under local management of schools schemes, where money is delegated to schools, whether a school actually wishes to use any of the services is very much a matter for the head teacher and governors of the school.

The provision of museum services of that kind to grant-maintained schools will not run into difficulties under the 1970 Act. As to libraries, where a schools library service might well be part of the local authority-wide public library service, which provides a service to the community as a whole, it is difficult to imagine circumstances in which a library service will operate beyond the margins of capacity, even if all its school-based work were in grant-maintained schools. I hope that that will satisfy my noble friend Lord Lucas.

However, even if the 1970 Act and Clause 265 came into play, the amendments essentially boil down to whether the services are, by their nature, so different from others that the LEA monopoly must be protected and, in trading terms, local taxpayers' money put at risk, because that would certainly be the effect of Amendments Nos. 299A, 299B and 299C. I believe that in practice it would also be the effect of Amendment No. 300B.

We want the full effects of the 1970 Act to continue, the extension and permission to operate under the provisions of Clause 265, which is additional to that, with the 1972 Act as it relates to orchestras and so forth and the other Act to which I have just referred in the case of museums.

We could talk ourselves into a great frenzy about fears about the Act. I believe that they are mostly unfounded and that we need to make sure that schools, whether grant-maintained or LEA-maintained, continue to receive the services that allow them to provide a high-quality education service.

Baroness Blackstone

Perhaps I may ask the Minister a question. Is she confident that local authorities will continue to be able to run local education authority museum services when they are no longer responsible for the majority of primary and secondary schools in their areas? There must be some anxiety that those services will fall by the wayside in those circumstances.

Perhaps she will also explain a distinction that she appeared to make earlier in the debate between what she called school-specific services and other services. I must admit that I am a little confused by that distinction. What is it based on and why should such a distinction be made?

Baroness Blatch

On the first point, it will be a local authority function, not an LEA function, to provide museums. If it continues to provide museums, so long as a museum is there people can partake of its services. The museum is for all the people in that area. Even under the local management of schools system the schools have the money—so too will the grant-maintained schools have the money—and they can continue to buy into that service so long as that museum is in that local authority area. The same goes for libraries so long as the libraries are there. As regards education services local authorities have passed the money down to schools and schools will continue to provide the service because it will remain a local authority function to provide museum and library services for all of its people, whatever their age.

On the second point concerning the school-specific service, as I believe I have said a number of times, but I shall reiterate it, a school-specific service would be in-service training for a particular subject taught in schools, with courses laid on to enable teachers to teach a subject of the national curriculum. That is a school-specific service. Non-school specific services, which a school would still need, as would other organisations within the local authority, would be payroll services, advice to deal with industrial relations and personnel management issues. Those are non-school-specific services. They are general services for which the local authority will continue to have a function and an obligation to provide whether there are schools in the LEA sector or all the schools are in the grant-maintained sector.

The Earl of Onslow

I am sorry to intervene again. Is my noble friend saying that the only school-specific service is in-house training for teachers? If not, will she tell us what the others are? I do not think that I am the only person who is confused, otherwise I would not have intervened.

Baroness Blatch

I cannot think of many services. I am finding it very difficult to think of one, but if any Member of the Committee can suggest a service that relates to a function of the local authority which would be provided only for schools and not for any other organisations within the local authority, that would be described as a school-specific service. As I said, in-service training, which is concerned with the delivery of the national curriculum, would be entirely school-specific, but beyond that I cannot think of any other examples. So long as the local authority has any schools in its charge for which it is responsible, it will need to provide those services—training for the national curriculum and so on.

When local authorities run courses it makes good sense to allow them, under the 1970 Act, to fill up the places on those courses with anyone who wishes to purchase their services. Only when they go beyond that capacity are they allowed to call for a two-year extension and only at the end of that two-year extension are they deemed to be trading well beyond provision for local authority services.

The Lord Bishop of Guildford

Perhaps the noble Baroness will help me. I am becoming more and more embarrassed at revealing my total stupidity. If I have understood her correctly, she now appears to be saying that the provision in Clause 265 is only for school-specific services of which she cannot think of any. Have I misunderstood the position?

Baroness Blatch

I said that Clause 265 is a permissive part of the Bill. When local authorities provide services to their schools they have to ensure that those services relate to their functions as set out in law. When they are deemed by the district auditor to be selling so many of their services that they are trading beyond the margins—in other words, if they are selling services to numerous other local authorities in the country and the district auditor takes the view that they now employ more staff and equipment than they need to provide for their own services—they can come to the Secretary of State for Education and ask for an extension to provide a service for two years beyond which that permission falls. It need not be a school-specific service. They could come to the Secretary of State and be at the margin of capacity for payroll services or personnel advice, but if they wish to continue to provide those services to schools, whether grant-maintained schools or schools in another authority, they would need to seek permission if they were above the margin of capacity for that service.

As I said earlier, the only services that cause anxiety are those which will be affected as schools become grant-maintained. Local authorities will be expected to adjust their central services to the number of schools for which they are responsible. It is only that aspect which may throw up the need to invoke Clause 265.

Baroness Hamwee

I hesitate to raise this point because I might have missed it being dealt with elsewhere, but would supply teaching be one of the school-specific services that might be affected by the provision?

Baroness Blatch

If a local authority had no schools whatever in its charge and was responsible for no schools at all, it would provide no teachers. As teachers came along and wished to be recruited, they would be recruited by the schools as they are now LEAs employ their own teachers in maintained schools and grant-maintained schools employ their own teachers. Indeed, they employ most of their own local supply teachers.

However, let us take the most extreme example, that a local authority has no schools in its charge for which it is responsible. It would not provide a pool of supply teachers. Notice has been given of the intention to oppose the clause regarding the number of agencies that now supply teachers to schools. The noble Baroness is absolutely right to say that, if a local authority had lost all its schools and had ceased to have a function, it could operate the two-year extension to provide those services, although once it had reached the end of that period it could no longer provide those services. One of the problems is that there are now so many agencies supplying teachers to schools. Schools can recruit teachers from their local areas so it is ceasing to be a big issue for schools.

Baroness Fisher of Rednal

I shall he brief. I am a little worried because all local authorities now have to put everything out to competitive tender and this has become a huge job for them. All local authority departments are now called trading departments, whether they are looking after consumer services or parks and playing fields, and at the end of the financial year they have to report their profits and losses. None of them can make losses any more when they are tendering. School transport has gone out to competitive tender. There are contracts on playing fields and open spaces which schools use for sporting events. School dinners have gone out to competitive tender and many local authorities have lost their tenders. Swimming is also going out to competitive tender. In the long run all those departments will have to ensure that they receive the money from somewhere for the schools that have come out of local authority control and become grant-maintained. In the long run they will not accept it because the trading departments are standing on their own feet and are not part and parcel of the education department. They will say, "No. Those schools will have to put in a special tender to use our facilities". Is not that a problem that could arise?

Lord Northbourne

I ask the Committee to forgive me for intervening from the Cross Benches. I should like to draw attention to the fact that this is the first amendment and we have spent nearly two hours on it. There are a great many Members of the Committee who fear that they will be here not only until the early hours but to the late hours of tomorrow morning.

Earl Baldwin of Bewdley

Perhaps this is a moment to bring the discussion to an end, if there is nobody else who wishes to come in on it. I shall try to keep my reply as simple and short as I can. This afternoon's debate has taken some very interesting turns. I have listened very hard to what the Minister said. I thank her for her clarifications, one or two of which put my mind at ease over certain points. But on the major issue, I still have a difficulty with trading at the margins.

It seems to me—and I believe the noble Lord, Lord Lucas, and the noble Baroness, Lady Warnock, also pointed it out—that as the market shrinks, so the moment at which one trades beyond the margins comes ever closer. Therefore, despite what the noble Baroness said, it seems to me that there are services, which may not be exactly school or education specific but for which a large amount of the market is out in schools, that will soon be trading beyond the margins. In that case it will be disallowed and there will not be the choice. We are not talking about a monopoly. There is no question of a monopoly—that is the word she used. It is a free choice for everybody. It is this business of quality assurance, as the noble Lord, Lord Ritchie, said.

On that basis I cannot be convinced that all the services, or most of them, will survive in the way that the noble Baroness says, nor that we will not be in a position quite soon when the margins are exceeded and all this rigmarole is brought in. If the Minister were going to do as the noble Lord, Lord Judd, said and bring in some clarification—I do not know whether she is with me on this—perhaps we might think again. Am I right in guessing that she does not propose to do that?

Baroness Blatch

I am not sure on which question the noble Earl, Lord Baldwin of Bewdley, wishes for clarification.

Earl Baldwin of Bewdley

It was the suggestion from these Benches earlier that perhaps the whole clause should be taken away and re-worked to bring some clarification to it.

Baroness Blatch

If that is the question, the answer is absolutely not.

Earl Baldwin of Bewdley

I thought so. Therefore our feeling is that at least our amendment brings a measure of quite strong clarity into the matter and will produce an educationally desirable result for all the schools. On that basis I should like to press the amendment to a division.

5.23 p.m.

On Question, Whether the said amendment (No.287BA) shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 122.

Division No. 1
CONTENTS
Acton, L.	Jeger, B.
Addington, L.	Jenkins of Putney, L.
Ailesbury, M.	John-Mackie, L.
Ardwick, L.	Judd, L.
Aylestone, L.	Kitchener, E.
Baldwin of Bewdley, E.[Teller.]	Llewelyn-Davies of Hastoe, B.
	Longford, E.
Barnett, L.	Lovell-Davis, L.
Beaumont of Whitley, L.	McIntosh of Haringey, L.
Birk, B.	McNair, L.
Blackstone, B.	Mayhew, L.
Bonham-Carter, L.	Merlyn-Rees, L.
Bottomley, L.	Molloy, L.
Bridges, L.	Morris of Castle Morris, L.
Carmichael of Kelvingrove, L.	Mulley, L.
Carter, L.	Ogmore, L.
Cledwyn of Penrhos, L.	Palmer, L.
Clinton-Davis, L.	Peston, L.
Cocks of Hartcliffe, L.	Pitt of Hampstead, L.
David, B.	Plant of Highfield, L.
Dean of Beswick, L.	Ponsonby of Shulbrede, L.
Desai, L.	Prys-Davies, L.
Donoughue, L.	Rea, L.
Dormand of Easington, L.	Redesdale, L.
Ennals, L.	Richard, L.
Falkender, B.	Ritchie of Dundee, L.
Falkland, V.	Rochester, L.
Fisher of Rednal, B.	Russell, E.
Foot, L.	Russell of Liverpool, L.
Gallacher, L.	Seear, B.
Gladwyn, L.	Serota, B.
Graham of Edmonton, L.[Teller.]	Shannon, E.
	Stedman, B.
Gregson, L.	Stoddart of Swindon, L.
Hampton, L.	Strabolgi, L.
Hamwee, B.	Strafford, E.
Hanworth, V.	Taylor of Gryfe, L.
Harris of Greenwich, L.	Thomson of Monifieth, L.
Hayter, L.	Thurlow, L.
Hilton of Eggardon, B.	Tordoff, L.
Hollis of Heigham, B.	Wallace of Coslany, L.
Holme of Cheltenham, L.	Warnock, B.
Houghton of Sowerby, L.	White, B.
Hughes, L.	Wigoder, L.
Hylton-Foster, B.	Williams of Crosby, B.
Jay of Paddington, B.	Winchilsea and Nottingham, E.

NOT-CONTENTS
Addison, V.	Bessborough, E.
Aldington, L.	Birdwood, L.
Allenby of Megiddo, V.	Blake, L.
Archer of Weston-super-Mare, L.	Blatch, B.
	Blyth, L.
Ashbourne, L.	Boardman, L.
Astor, V.	Boyd-Carpenter, L.
Astor of Hever, L.	Brabazon of Tara, L.
Auckland, L.	Braine of Wheatley, L.
Banbury of Southam, L.	Brigstocke, B.
Beloff, L.	Brougham and Vaux, L.

Cadman, L.	Lye L.
Caithness, E.	McColl of Dulwich, L.
Campbell of Alloway, L.	Mackay of Clashfern, L.[Lord Chancellor.]
Chalker of Wallasey, B.
Charteris of Amisfield, L.	Macleod of Borve, B.
Chelmsford, V.	Mancroft, L.
Clark of Kempston, L	Marlesford, L.
Cochrane of Cults, L.	Merrivale, L.
Coleraine, L.	Mersey, V.
Colnbrook, L.	Montagu of Beaulieu, L.
Colwyn, L.	Mottistone, L.
Constantine of Stanmore, L.	Mountevans, L.
Cornwallis, L.	Mowbray and Stourton, L.
Cranborne, V.	Moyne, L.
Crathorne, L.	Munster, E.
Crickhowell, L.	Murton of Lindisfarne, L.
Cumberlege, B.	Nelson, E.
Dacre of Glanton, L.	Northbourne, L.
Davidson, V.	O'Cathain, B.
De L'Isle, V.	Onslow, E.
Denham, L.	Orkney, E.
Denton of Wakefield, B.	Orr-Ewing, L.
Dormer, L.	Park of Monmouth, B.
Eden of Winton, L.	Pearson of Rannoch, L.
Ellenborough, L.	Pender, L.
Elles, B.	Prentice, L.
Elliot of Harwood, B.	Pym, L.
Elliott of Morpeth, L.	Reay, L.
Ferrers, E.	Renton, L.
Fraser of Kilmorack, L.	Rodger of Earlsferry, L.
Gainsborough, E.	Romney, E.
Goschen, V. [Teller.]	St. Davids, V.
Granard, E.	Sandford, L.
Grantchester, L.	Seccombe, B.
Hailsham of Saint Marylebone, L.	Selkirk, E.
	Shaughnessy, L.
Halsbury, E.	Sherfield, L.
Harvington, L.	Skidelsky, L.
Hayhoe, L.	Slim, V.
Henley, L.	Strathclyde, L.
Hesketh, L.	Strathmore and Kinghorne, E.
Howe, E.	Sudeley, L.
Huntly, M.	Swinfen, L.
Jenkin of Roding, L.	Tebbit, L.
Killearn, L.	Teviot, L.
Kinnoull, E.	Thomas of Gwydir, L.
Lauderdale, E.	Trumpington, B.
Layton, L.	Ullswater, V.
Lindsey and Abingdon, E.	Wakeham, L.[Lord Privy Seal.]
Liverpool, E.
Long, V. [Teller.]	Wilberforce, L.
Lucas, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.31 p.m.

Clause 247 [Sponsor governors for aided secondary schools]:

Lord Ponsonby of Shulbredemoved Amendment No. 287C: Page 146, line 34, leave out ("aided") and insert ("county, voluntary or maintained special").

The noble Lord said: I trust that this group of amendments can be dealt with more swiftly than the last.

The purpose of Amendment No. 287C is to enable all LEA-maintained schools to have sponsor governors and thus the financial and other benefits of business sponsorship. It is unfair to discriminate in this respect between categories of school.

The Minister may argue that only the trustees of an aided school can hold an endowment or other large capital gifts from businesses, since they own the school premises and governing bodies of LEA-maintained schools do not. But that technical difficulty is reduced by the Bill's provision for legally incorporating all governing bodies of state schools. In any case, it can be overcome by the governing body setting up a trust. The trust can be administered together with the sponsors and sponsorship money paid into it.

It is a simple amendment. It is another example of trying to level the playing field between different statuses of school so that the competition which the Bill seeks to set up between different schools can be on a fair basis. I beg to move.

Lord Northbourne

I rise to speak to Amendment No. 288 in my name and that of the noble Duke, the Duke of Norfolk. Clause 247 amends the Education (No.2) Act 1986. It relates only to aided schools in which the trustees at present have a right to a majority of two governors, or three if the total number exceeds 18.

Clause 247, as drafted, would reduce the majority to one in schools where there was one or more sponsor governors. The purpose of the amendment is to restore the status quo so that there should be two trustee governors, which we feel to be reasonable. Although that would mean a slightly larger governing body due to the addition of the sponsor governors, we feel that trustees should preserve their majority of two so as to give more certainty that they would be able to ensure that the duties and responsibilities of the trustees are properly enforced.

Lord Addington

The noble Lord, Lord Ponsonby, made a good point. If we are to have equal types of school, we should try to ensure that the same requirements apply equally across the board, especially when we are talking of sponsor governors. Bearing in mind the extra benefits that may arise, it would be extremely equitable to have the same requirements.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

The purpose of Clause 247—and for that matter Clause 63 which we discussed some time ago—is to enable those schools which already have a considerable degree of autonomy to extend that by direct association with a private sector sponsor. That sponsor, with the consent of the Secretary of State, will be able to nominate a minority of members of the school's governing body.

Amendment No. 287C would allow county and special maintained schools to appoint sponsor governors. We feel that grant-maintained schools have demonstrated their wish to take parent power seriously by seeking self-governing status. Aided schools already have a strong relationship with their foundation. Those schools, standing free of the local authority, are best equipped to take advantage of the benefits sponsor governors can offer. That is not so in the case of other schools.

The amendment would also cause an unacceptable increase in the size of governing bodies of county and special maintained schools. The Education Act 1944 establishes that a school of more than 600 pupils shall have five parent governors, two teacher governors, five LEA governors, six co-optees plus, optionally, the head teacher. Thus such a school already has 18 or 19 members and could find itself expanding the board to 23 or more. In fact, it is quite possible for a county school to achieve the benefits of sponsorship sought by the noble Lord and of direct private sector involvement in its governance by bringing in sponsors as co-optees. Authorities, such as Lincolnshire with its College of Science and Technology and Wandsworth with Battersea Technology College, have already demonstrated how successful such an arrangement can be. I do not believe, therefore that the noble Lord's amendment would take us any further.

Amendment No. 288 in the name of the noble Lord, Lord Northbourne, requires the foundation governors to have a majority of two on the governing body of an aided school. Original thinking was that a simple majority would be sufficient to preserve the balance of interests on any governing body if sponsor governors were appointed. However, I understand the anxieties of the noble Lord and those for whom he is speaking. I am sure that that small increase in the majority of foundation governors would not adversely affect what the appointed sponsor governors could achieve. Consequently, I am sympathetic to the amendment. Though I shall want to take advice as to whether the amendment is satisfactory, I am prepared to give an assurance that at Report stage we will come forward with a government amendment to the same effect.

Therefore I will accept Amendment No. 288 in principle, but I cannot accept Amendment No. 287C and hope that the noble Lord will be prepared to withdraw it.

Lord Ponsonby of Shulbrede

I am somewhat surprised by the response that somehow grant-maintained parents have exercised parent power and for that reason deserve to have business sponsors. I have heard many speakers over the past few years talking about parent power under LMS schemes within local education authorities. I therefore find the argument particularly perverse.

I shall not press the amendment to a vote. I am sorry that the Minister does not see the argument of levelling the playing field and being seen to be fair between the different status of schools. My understanding of the primary purpose behind the whole of the legislation is to establish competition between schools. Surely that competition should be on the basis of the well-known phrase of "the level playing field". Nevertheless, I beg leave to withdraw the amendment.

Lord Henley

Before the noble Lord sits down, perhaps I may add a word in regard to what we feel is the difference between the two groups of schools.

As the noble Lord will be aware, we are giving the opportunity of appointing sponsor governors to the voluntary-aided and grant-maintained schools because they will have full responsibility of governance. In contrast, the county or controlled schools still have a strong link with the LEA. If the county or controlled schools were to seek a direct relationship with a sponsor, it may be that the LEA would wish to use some of its positions on the governing body to accommodate a sponsor. I do not see that, because parents have not taken the same steps as those in the grant-maintained sector, the amendment takes us any further.

Referring to the amendment of the noble Lord, Lord Northbourne, I understand that counsel have advised us that we can accept it as it is. If that will speed up Report stage by avoiding the need to bring forward another government amendment, I can assure the noble Lord that when he comes to move his amendment I shall have no objection to it.

Lord Northbourne

I am most grateful.

Amendment, by leave, withdrawn.

Lord Northbourne moved Amendment No. 288: Page 148, line 6, leave out ("one") and insert ("two").

On Question, amendment agreed to.

Clause 247, as amended, agreed to.

Clause 248 [Power of governing body of county school to propose change of character etc.]:

Baroness Blatch moved Amendments Nos. 288A and 288B: Page 148, line 26, after ("been") insert ("withdrawn or"). Page 148, line 29, leave out ("change in character or enlargement") and insert ("alteration, etc.").

The noble Baroness said: These amendments were spoken to with Amendment No. 171ZC. I beg to move.

On Question, amendments agreed to.

Clause 248, as amended, agreed to.

Clause 249 [Power to make and deal with proposals in the case of schools eligible for grant-maintained status]:

[Amendment No. 289 not moved.]

Baroness Blatch moved Amendment No. 289A: Page 150, line 5, leave out ("(change of character or enlargement)").

The noble Baroness said: I have spoken to this matter together with Amendment No. 171ZC. I beg to move.

On Question, amendment agreed to.

Clause 249, as amended, agreed to.

[Amendment No. 290 not moved.]

Clause 250 [Revision of schemes for financing schools maintained by local education authorities]:

Lord Henley moved Amendment No. 290A: Page 150, line 25, leave out from beginning to ("(replacement") in line 26 and insert: ("( ) For section 34(4) of the Education Reform Act 1988 (duty to consult before preparing a scheme) there is substituted—s "(4) Before preparing such a scheme a local education authority shall consult—

1. (a) the governing body and the head teacher of every county, voluntary or special school maintained by the authority,
2. (b) the governing body of every grant-maintained school in the area of the authority, and
3. (c) the governing body of every grant-maintained special school which—
4. (i) is established under section 173 of the Education Act 1993 in the authority's area, or
5. (ii) before becoming a grant-maintained special school was a special school maintained by the authority,

but the Secretary of State may, by notice in writing to the authority, dispense with the duty imposed under paragraphs (b) and (c) above in respect of such schools, or class or description of schools, as are specified in the notice." ( ) For section 35 of that Act").

The noble Lord said: In moving Amendment No. 290A I shall speak also to Amendments Nos. 290B to 290D. This group of amendments, together with the other provisions in Clauses 250 and 251, is intended to make useful improvements to the sections of the Education Reform Act 1988 which cover local management of schools. In respect of LEAs' LMS schemes, Amendments Nos. 290A and 290B will impose a requirement that grant-maintained primary, secondary and special schools are consulted both on new LMS schemes and on revisions to schemes. However, the Secretary of state will have power to dispense with that requirement for certain schools; that is, those that are funded according to a common funding formula rather than the LMS scheme formula. In respect of LEAs' LMS financial statements, Amendment No. 290D will enable regulations to prescribe that outturn statement contain details of planned as well as actual expenditure. It will also allow for regulations to prescribe that grant-maintained schools for whom the statements are relevant are furnished with a copy. It will enable regulations to allow LEAs to furnish only relevant parts of their financial statements to schools, and it will empower the Secretary of state to direct some or all LEAs to have their LMS financial statements audited.

Amendment No. 290C is purely a drafting amendment. I beg to move.

5.45 p.m.

Lord Judd

Amendment No. 290A obviously shows the continuing close link between grant-maintained schools and LEAs. I see that the next amendment continues the requirement to consult grant-maintained schools where the local education authority is proposing the revision of a scheme for local management. I take it that there has been a specific recent incident that has caused the department to require the involvement of grant-maintained schools in the drawing up and approval of LEA local management of school schemes. Is the fear that, unless that is done, LEAs will devise a way of reducing the direct funding part of annual maintenance grants to grant-maintained schools by making amendments to the local management of schools scheme?

The Minister has frequently said that it is the desire for independence from the LEA that is the cause of grant-maintained school applications. If that is the case, why is it that the Government are providing a way for grant-maintained schools to continue to be heavily involved in the affairs of local education authorities and those schools that have not sought grant-maintained status? Perhaps I may ask the Minister what account local education authorities will have to take of representations by grant-maintained schools in this context.

Referring to the other amendment, perhaps I may ask the Minister whether the Secretary of State will provide financial information to all LEA-maintained schools in the area about the excess resources that grant-maintained schools are receiving. Quite a lot of people believe that the grant-maintained school sector is probably already giving this information to schools as an incentive to get them to opt out. I should like to ask also what access local education authority-maintained schools will have to the accounts of grant-maintained schools. One other question that needs to be answered is what is the specific incident that has caused this amendment to appear. I should be very grateful if the Minister could enlighten us on those points.

Lord Henley

Grant-maintained schools are currently funded according to the formula in local authority local management schemes. Therefore, it makes obvious sense for them to be consulted on any scheme changes proposed by that authority which may have the effect of redistributing resources between schools. Whether any particular case has cropped up is not relevant. They have a particular interest in this matter and therefore it is important that they are consulted. It will be for the LEAs to take note of any representations that those grant-maintained schools may make.

On Question, amendment agreed to.

Lord Henley moved Amendment No. 290B: Page 150, line 37, leave out from ("consult") to ("section") in line 39 and insert ("every governing body and head teacher whom they are obliged to consult under").

On Question, amendment agreed to.

On Question, Whether Clause 250, as amended, shall stand part of the Bill?

Baroness Young

I should like to intervene briefly to raise a point that was touched on in the course of the very long debate on the first amendment. The issue of supply teachers has not been debated. The point that I want to raise is quite separate from the matters discussed earlier. We are all aware of the need for supply teachers in schools and the valuable role that they play in helping out when permanent members of staff are away sick or otherwise absent. This often happens quite suddenly. It has been drawn to my attention that it is important that supply teachers should be subject to the same conditions of employment as full- or part-time teachers; that is, that there is a need to ensure that they are properly qualified and do not have criminal convictions or any psychological problems that expose children to danger. Historically, local education authorities have maintained a pool of supply teachers. A school that needs a supply teacher will ask the LEA to supply one and the LEA will undertake the whole process of vetting the individual to make sure that the proper conditions are met.

As I understand it, there now appear to be some difficulties over that procedure. Smaller local education authorities have problems in maintaining a pool of supply teachers. It is possibly a new problem that may come up in relation to the future of county councils as a whole. As schools are no longer obliged to use local education authorities some may cease to provide a pool of supply teachers even for maintained schools. As my noble friend the Minister indicated when the noble Baroness, Lady Hamwee, raised this point earlier on, employment agencies are now helping to overcome the problem of supply. An agency can, of course, act for either one or a number of local education authorities or indeed for individual schools. If an agency is working through an LEA or a group of LEAs, it can arrange vetting by a local education authority. But now that we have schools with local management of funds, local decision taking and budgets under LMS, as well as grant-maintained schools, they can go themselves direct to an agency.

The point that I wish to raise is this: it would be possible in the future—we need assurance on this point—for there to be either no or inadequate vetting of supply teachers, with all the dangers for children that this could entail. There are, I believe, a number of possible options that could meet this difficulty. It may well be that there ought to be a granting of approval to an employment agency by regulation before it could supply a supply teacher and some way of monitoring its standards. But it is essential that both heads and governors know that when they are dealing with an agency its standards are as high as those of the local education authority.

If this is not an acceptable way it might be possible to meet the difficulty by an amendment to the Bill—I have not put down one because I should like to hear what the Minister has to say in her answer—or it would be possible to place an obligation on either the local education authority or the grant-maintained school to undertake the vetting procedure in all cases. I should be most grateful if my noble friend the Minister would let me know how she sees this important problem being dealt with in the future.

Lord Dormand of Easington

I strongly support what the noble Baroness, Lady Young, has said. I presume that it would not happen too often that a teacher would be available through an employment agency. The main point of what the noble Baroness is saying is that these teachers should be qualified and experienced teachers. I am glad that the noble Baroness is indicating her assent. That is the most important part of it. However, if there is the possibility that teachers would be recruited through an employment agency, who would do the assessing and the investigation? Presumably, an employment agency would say, "Yes we have a teacher who is on our books", and not look at the qualifications, training and so on. I believe that the point is worth investigating.

Baroness Blatch

Perhaps I may pick up the final point of the noble Lord, Lord Dormand. That is less of a problem. It is not a problem that a teacher should be qualified. If a school goes to an agency and asks for a qualified teacher, it expects to receive a qualified teacher. It must be for the local employment agency taking people on to its books to check that it is employing on its books qualified teachers. Clearly, if a school was let down and found for one reason or another that a teacher was not competent or qualified, the local employment agency would stand culpable.

My noble friend is concerned about other aspects about which it is much more difficult to secure information. I refer to people on what I think the noble Lord, Lord Dormand, would know as List 99 in the department; teachers who have qualified in the first instance but been struck off for one reason or another. That is a much more sensitive and difficult issue.

My noble friend raises the issue of the operation of private sector employment agencies in the supply of teachers. Many such agencies are now offering a service to schools, sometimes to help fill permanent posts but more often to provide what are usually called supply teachers who stand in at short notice for permanent teachers when they are absent. When a teacher is appointed to a school, whether permanently or temporarily, a number of conditions must be satisfied. The employer is responsible for ensuring that they are satisfied. The teacher must be a qualified teacher and have the health and physical capacity for teaching. Critically, he or she must not have been excluded from teaching by the Secretary of State on health or educational grounds or on the ground of misconduct. Those conditions are laid down by law for teachers in local education authority maintained and self-governing state schools. They are designed to safeguard the health and well-being of the pupils.

The Committee will readily agree that it is vitally important to ensure that pupils are not exposed to unsuitable teachers and especially to any person who is excluded from teaching because of misconduct against pupils. It is entirely understandable that schools should wish to have teachers' credentials suitability checked by the employment agency before they work in the school. The department is considering how the arrangements for doing that might be improved. We already provide a service to the agencies by checking teachers' names against the list of teachers who are excluded from teaching. Any licensed agency is able to request such a check before accepting a teacher on to its books. That is an important safeguard. But we must not lose sight of the fact that the ultimate responsibility again must rest with the employer.

My department is also consulting the Employment Department, which licenses all agencies under the Employment Agencies Act 1973, about the possible issue of guidelines by that department. We are also investigating whether there are other facilities we might be able to make available to help agencies perform a useful service. I do not believe that new legislation is needed for this purpose but I can assure my noble friend that we have the issue clearly in our sights. I shall keep my noble friend informed of any action we may take from the department.

Baroness Young

I thank my noble friend for that reply. I hope that she will address the issue urgently. It is an important issue which we would all agree needs to be dealt with. It is very important that either the agency or the school should be responsible for ensuring not only that the teacher is properly qualified but does not appear on List 99, nor has committed any of these other offences. It should be laid down clearly who is responsible. If I might leave that point with my noble friend, I should be glad if she could write to me on a future occasion on the issue.

Lord Dormand of Easington

I should be grateful if the Minister would keep me informed too.

Clause 250, as amended, agreed to.

Clause 251 [Publication of financial statements]:

Lord Henley moved Amendment No. 290C: Page 151, line 36, leave out ("and").

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

On Question, amendment agreed to.

Lord Henley

moved Amendment No. 290D: Page 151, line 37, at end insert: ("( ) in subsection (6) after "with respect to" there is inserted—

1. "(aa) the planned financial provision in that year specified in the statement prepared by the authority under subsection (3) above", and
2. ( ) for subsection (8) there is substituted—

"(8) The authority shall furnish—

1. (a) the governing body of each school required to be covered by the scheme in any financial year, and
2. (b) the governing bodies of such grant-maintained schools in the authority's area and grant-maintained special schools mentioned in section 34(4) (c) of this Act as may be prescribed,

with a copy of each statement prepared by the authority under this section in relation to that year or, in such circumstances as may be prescribed, with such part or parts of it as may be prescribed." ( ) After that. section there is inserted— "Certification of statements by Audit Commission. 42A.—(1) This section applies where in the case of any local education authority the authority's financial provision for county and voluntary schools is subject to regulation by a scheme. (2) Any such local education authority shall, if directed to do so by the Secretary of State, require the Audit Commission to make arrangements in accordance with section 29(1) (d) of the Local Government Finance Act 1982 for certifying such statement or statements prepared by the authority under section 42 of this Act as may be specified in the directions; and any statement under that section shall be treated for the purposes of section 29(1) (d) of that Act as a return by the authority. (3) The arrangements made by the Audit Commission in pursuance of subsection (2) above shall include arrangements for sending a copy of any such statement or statements as so certified to the Secretary of State. (4) Directions given under subsection (2) above may relate to any local education authority or to local education authorities generally or to any class or description of such authorities." ").

On Question, amendment agreed to.

Clause 251, as amended, agreed to.

Clauses 252 and 253 agreed to.

Lord Judd moved Amendment No. 291: Before Clause 254, insert the following new clause: ("Duty with regard to provision of resources .—(1) It shall be the duty of the Secretary of State and of the funding authorities, local education authorities, governing bodies of grant maintained schools and the governing bodies of voluntary schools in the exercise of the functions conferred upon them by or under this or any other Act to have regard to the principles set out in subsection (2) below. (2) The principles referred to in subsection (1) above are that— (a) the resources available for the provision of education shall be distributed so that so far as is reasonably practicable all those seeking access to maintained schools shall be afforded equality of opportunity to benefit from those resources; (b) in the distribution of resources available for the provision of education in maintained schools, the weighting attached to factors related to age, ability, aptitude and need shall be such but no more than is judged necessary and appropriate to ensure that the skills of each pupil may be valued equally; (c) no pupil shall be disadvantaged in terms of the share of the available resources for his or her education in comparison with the availability of such resources for other pupils by reason of any policy of specialisation of provision in any school or other educational institution; (d) every pupil shall so far as is reasonably practicable be afforded access to a broad and balanced curriculum and shall not be disadvantaged in terms of the share of the available resources for his or her education by reason of the fact that his or her primary skills lie outside the core and foundation subjects of the National Curriculum; and (e) every pupil shall have the right to he educated in a physical environment maintained to a minimum acceptable standard of repair, cleanliness and safety.").

The noble Lord said: At Second Reading we made it plain that what we lamented about the Bill was its lack of vision. We were told that it was about accountability, it was about control and it was about management, but where was the vision of where we wanted education to go into the next century? Far be it from us to write the vision for the Government, but what we are trying to do is to introduce into the Bill some sense of perspective. This new clause provides for a basic set of principles to form the foundations of education in our schools. Those running our schools—the Secretary of State, the new funding authorities, LEAs and governing bodies of grant-maintained and voluntary schools—will be expected to respect those principles in making decisions which may deeply affect our children and their future.

Of fundamental importance is the right to a free, high quality education system for all with no reliance on parental contributions; an education service fundamentally committed to equal opportunities for all pupils. Although the Bill adds a national funding agency to the already existing national curriculum and national testing, at present it does not allow for nationally agreed, minimum levels of funding for all our schools. Similarly, there is no commitment to limit class sizes, which we debated the other night. There is no commitment to ensure that existing and new school buildings comply with agreed standards. There is no commitment to provide all schools with books and equipment to an agreed and adequate level, with all schools equitably resourced.

Indeed, there are wide variations between the grants per head even in adjacent neighbouring authorities. The introduction of pupil-led funding has very clearly exposed those disparities in the levels of finance available to schools. We now see that the money available varies significantly between schools even of the same size. Research recently undertaken by Coopers & Lybrand for the National Union of Teachers has revealed a substantial shortfall in the resources necessary to fund the Government's national curriculum. Coopers & Lybrand argue that over the next five years £4,618 million will be required for implementation of the national curriculum for primary schools. In addition, in secondary schools a further £1,598 million will be needed in start-up funding phased over four years. Then there will be necessary recurrent funding of £484 million.

The effects of the inadequate funding of education on a national basis obviously tends to magnify inequity at school level. The Government have set a series of targets for schools to achieve; for example, that the national curriculum should be taught to all pupils, with the consequent median of achievement according to the national curriculum assessment arrangements; that truancy should be kept at low levels; that there should be comprehensive availability of information to parents; that pupils should be educated in a safe environment, and the rest. Yet it is not clear what the Government consider to be the basic minimum level of resourcing to achieve those targets. Guaranteed standards must be laid down and resourced for all schools to give every child a fair chance. Those minimum standards of provision really must apply across the board.

There is nothing new per se in this call for basic minimum standards of provision for all pupils. What is new is the government's realisation that there needs to be consistency in grant-maintained school funding and that, if consistency of funding is to be achieved, it can only be by the Government themselves determining, and consequently explaining, their criteria for spending levels on education both nationally and at local level.

There is an inescapable argument for equity in funding between schools with similar age groups, intake and educational needs. Each pupil should be entitled to a guaranteed level of service on which the cost of that service should be based. This has clear parallels with the Government's own charter approach for service delivery elsewhere in our society.

The Government themselves have outlined the basic common criteria for achievement in schools in the Education Reform Act 1988. That Act not only defines the national curriculum as a common entitlement; it argues for, a balanced and broadly based curriculum".

The new clause sets out the principles to underpin that entitlement: that resources be distributed in a way which ensures the equality of opportunity to benefit from education; that no child should be disadvantaged by disproportionate funding going to selection or policies of specialisation, nor by the fact that a child's primary skills lie outside the core curriculum; and the basic principle that every pupil shall have the right to enjoy education in a physical environment maintained to a minimum acceptable standard of repair, cleanliness and safety. In a Bill which is as long as this, with so much detail about the administration, surely there is room for a reassuring statement of purpose and intention of this kind. I beg to move.

6 p.m.

Earl Russell

I am fully in agreement with the spirit of this amendment. We on this side of the Committee are quite as deeply concerned as anyone on the other side about standards, spelling, numeracy and other questions of this kind. We too recognise that there is a real problem. What we are querying is the appropriateness of the Government's solutions.

I know that the noble Baroness has said twice in the course of debates on this Bill that she has some evidence to suggest a negative correlation between quality and funding. I cannot believe that she takes that too far because, if she did, she would be wide open to criticism for giving any funds to schools at all. As the noble Baroness's face signals very plainly, there is a point beyond which she will not take that argument and it is that point which signals the underlying solid point behind this amendment.

I say by the way that I have been very much irked, in my capacity as a parent, by the noble Baroness citing ILEA schools as an example of this alleged negative correlation. I had two sons in an ILEA school at the moment when the ILEA was abolished. It was a good school before that body was abolished, but as the funding was reduced after the ILEA went, you could see the quality draining out of it. My experience is totally different from that of the noble Baroness. When she made a face of displeasure at what I was saying about negative correlation, she was indicating that there is a basic level, in her mind as well as in ours, below which financial provision should not be allowed to fall.

The question is where that level comes. It has struck me many times that some people in government circles do not really have a concept of a true cost. They are so struck with the virtues of competition that they believe that it is capable of lowering costs indefinitely. It is not. There is a point where, even in the most competitive society, you cannot have something for nothing. There are certain basic minimum items of provision in a school which you cannot have without funding—class sizes, buildings and books, although I know that we cannot get the department to attach importance to books. I ask the noble Baroness: is it true, as reported in The Times a few weeks ago, that a high proportion of the books recommended for Key Stage 3 in English are not actually in print? It really should not be regarded as trivial if the actual process of teaching is brought to a halt because the basic raw materials are not available. That is the solid, irreducible point behind this amendment and I am glad that the noble Lord, Lord Judd, has moved it.

Baroness Blatch

This amendment is drafted in very broad—not to say very vague—terms and it roams extensively across wide areas of policy. The funding of schools is also, inevitably, a rather technical matter.

The noble Lord has justified his amendment by invoking the principle of equality of opportunity. The surest guarantee of equality of opportunity is the national curriculum, which for the first time gives to all pupils the entitlement to study a broad and balanced curriculum, including the 10 core and foundation subjects.

But while the national curriculum lays down the framework of what must be taught, as a matter of common sense it leaves individual schools and teachers a sensible discretion as to how it is to be taught, according to local circumstances and the needs of individual pupils.

The present arrangements for distributing funds for maintained schools allow similarly for local discretion within a national framework. The arrangements sensibly combine the objective allocation of resources between local authorities according to need, with a broad measure of local discretion to tailor spending to suit local circumstances.

Central government make grant available to local authorities, taking account of pupil numbers, adjusted to take account of local factors which affect the cost of providing education: notably the additional educational needs of certain pupils, and higher labour costs in London and the South East. The underlying principle is to give each authority a level of support which would allow authorities across the country to provide a consistent standard of service.

Local authorities in their turn do precisely the same. They distribute funds through their schemes of local management of schools, rooted in principles of fairness and equity of funding. They ensure that local education authorities allocate resources to schools by means of an objective formula based primarily on the number and ages of children, but taking into account also special needs factors in their area. The factor most commonly used by all local authorities is free school meals. Indeed, the very transparency of the LMS funding arrangements reinforces the emphasis on equality of treatment and consistency of funding, but that does not mean that there are equal sums of money attached to every child, irrespective of their needs.

Funding for grant-maintained schools follows the same principles. Each school's annual maintenance grant (AMG) is based on the LMS scheme of its former maintaining authority, with additions to reflect a share of the LEA's previous spending on central services and an allowance for school meals. So grant-maintained school funding takes account of the funding available in each LEA area.

The noble Lord believes that there is a need to provide legal guarantees of equity of funding, but the system already works that way. The guiding principle underpinning the distribution of revenue support grant is that it should be shared equitably among authorities, recognising their variable differences, and the Government go to elaborate lengths, in consultation with the local authority associations, to secure an even-handed distribution. The legal framework for the local management of schools supports the basic principle of equity of funding.

But within that framework, there is a proper and valuable role for local discretion, for which, each authority is accountable to its local electors. This amendment would undermine that discretion and that accountability. I find it extraordinary that noble Lords opposite, who in the past have protested that local government discretion is being limited, now seek to hobble it in this way.

Turning to specialisation by schools, the amendment specifically sets out to prohibit any financial encouragement for specialisation. I find this attitude profoundly depressing. The noble Lord's proposals echo an obsession with uniformity which has long been the enemy of a flourishing education service. Our commitment is to increase the opportunities for schools, pupils and parents, not to oppose them for reasons of dogma.

The implication of the amendment is that no school or pupil should have any benefit of any sort: the dreary philosophy that all should be held down at the same level, just in case one child gains an advantage, perhaps—heaven forbid—through his or her particular talents, whether in art, music, technology or whatever. Specialisation will increase the real choice available to parents and pupils. It will allow parents to choose the school best suited to the needs of their children. It will enrich the experience of pupils.

Our aim of achieving diversity and choice means that there will be some differences between schools, but that in itself will not mean that any pupil need suffer a disadvantage. Every pupil remains entitled to receive the education guaranteed by the national curriculum.

The amendment proposes that no pupil should be disadvantaged in terms of resources because his or her primary skills lie outside the core and foundation subjects of the national curriculum. These subjects are the core of what is taught in schools. If that were not the case, there would be no point in having a national curriculum. But there is already a statutory requirement that they must be taught in the context of the general requirement that the curriculum should be broad and balanced and seek to achieve pupils' spiritual, moral, cultural, mental and physical development.

Schools and teachers are always the first to encourage pupils' talents. I cannot imagine schools disadvantaging pupils in terms of resources because they are particularly good at something outside the national curriculum. Besides, since all aspects of the curriculum will be reported publicly and to parents, it will be in schools' interests to maximise the achievements of all pupils, whether within or outside the national curriculum. That might mean that some children have more money applied to their education than others.

As to repair, cleanliness and safety, there is already a statutory duty on local education authorities and school governors of grant-maintained schools to ensure that school buildings within their responsibility are in an acceptable condition. It is for governing bodies to determine their priorities from the capital and recurrent resources available to them. Underlying all this is the question of the size of the cake overall, but that is another debate and is not related to these amendments. We are talking about the money that is available and how it is distributed.

So far I have dealt with the policy implications of the amendment. But even if your Lordships were minded to accept the principle underlying the amendment, in practice it is thoroughly impractical to lay down these kinds of rules. The amendment assumes that it is a simple matter to quantify the resources available for one pupil compared with another. On the contrary, it is remarkably difficult. How does one allocate support staff time between pupils? How does one allocate a schools' non-staff costs between pupils? This has the makings of a complex and confusing accountancy exercise, largely irrelevant to the task of educating pupils.

Furthermore, this web of principles, although sufficient to hinder local authorities' discretion, is drafted in such vague terms that it will be impossible to interpret them in any meaningful way.

The fundamental principle of equity of funding is already built into the education funding system. The amendment, I believe, is unnecessary, impractical and a recipe for confusion. It would undermine local initiative and opportunity and would instead impose a stultifying uniformity across the education system.

Perhaps I may advise the noble Earl, Lord Russell, that the one thing that I have always said (and which I shall continue to say) is that it is over-simplistic simply to say that "money in" equals "quality education out". I do not believe that this is a simple issue; it is very complex. It has a lot to do with how the money is spent and deployed and with the quality of the teachers. Of course, money is important. However, nor have I said that I believe that over-simplistic statement to be so untrue that I would end up not funding any school at all. That is an absurd interpretation of what I have said both in this and previous debates.

There is information about ILEA. The noble Earl, Lord Russell, referred to one school of which he has great knowledge. What he said may be so, but the reason that it may not be a good school now may be due to other factors. I can only speak as somebody who operated in a shire county and who looked enviously year after year as money poured into ILEA at the expense of those of us living in more rural areas. Taking that considerable differential, "money in" did not equate to "quality education out". Neither do I believe that class size of itself (although it is important) can provide a straightforward correlation with quality.

I should like to end on this point. We believe that resources for education are very important, and my right honourable friend and I will fight like tigers for our share of what is available in the public expenditure round this year and in any other year for which we are responsible for the service. We will fight for our fair share, but once we receive our fair share, it is then a question of distribution. Our record on this is good. In real terms—that is, discounting inflation—we are now spending 45 per cent. more on the children in our schools than we were in 1979. Although I do nod have the specific figures with me perhaps I may repeat that the number of classes in this country containing more than 30 children is now lower both in the primary and secondary sectors. I refer the noble Earl to the debate on Monday evening for the specific figures which provide the evidence for that statement.

6.15 p.m.

Earl Russell

I think that if the noble Baroness looks at the Official Report tomorrow, she will find that we are not perhaps as far apart as she thinks. I agree that it was an absurd interpretation. If she follows what I said, I think that she will see that I was saying so. But, by saying so, she may perhaps concede some part of my argument. May I ask her finally whether she concedes that there can be such a thing as a level of funding too low to permit the delivery of the national curriculum?

Baroness Blatch

Deciding what is available for any service must always be a matter of judgment for any government. We are now talking specifically about education. I would not be able to put a specific figure on it, nor do I believe that primary legislation is the place to do that. I could not say at this moment whether it should be £1,000 or £2,000, or any figure in between. What I know is that a political judgment is made by the government of the day about what can be afforded for public services. Within that, I believe that it is right that education should fight for its fair share and, within that, I believe that we should have the fairest possible distribution. To look to primary legislation for a specific sum of money is, I believe, impossible.

Lord Judd

I am sure that we are all grateful to the Minister for giving us that lengthy reply to the proposal. We must just dwell on what she said for a moment or two. First, perhaps I may ask her about the SSA system. Does she agree that it is acknowledged on all sides to be imperfect, and that it was designed as a way of distributing central government grant as a minority supplement—that is the point—to locally raised finance? Recently, the advent of capping and the council tax has effectively removed LEA discretion. The inequitable SSA is now what determines local spending. It would have been helpful if the Minister had faced up to and dealt with that point a little in her reply.

I am sorry to say this, but I think that the Minister has again demonstrated a lack of imagination. I do not blame her personally for that because she is a spokesperson for the Government as a whole; but it is this Government who like to make proclamations about one nation. If they really believe in one nation, they have to follow that through in the various segments of national life. They have to establish principles which are unquestionable about how we approach the management of our affairs in each of the segments in England and Wales.

When we come to education, the Minister must surely realise that there are genuine anxieties in many places that what is now happening is a drift back to selection and to competition between schools, with published leagues and all the rest, and that the end product of that will be that we will have success schools and failure schools. That is the nightmare away from which many people on all sides of the Committee believed we had moved finally and completely; we were not going to operate our educational affairs in that crude manner.

I was hoping that the amendment might have achieved some consensus in the Committee that there were principles to which we were all committed, whatever our differences on other aspects of educational arrangements and the rest, and a determination to ensure basic conditions and a fair, level playing field—the expression we all use so often now—upon which flexibility and the work of LEAs, grant-maintained schools and the rest could be based. We know that the position will not be equal, as it is at the moment; that some will be able to maximise their advantage at the expense of others.

I am therefore sad that the Minister has not seen the opportunity tonight to join with us in reassuring the nation that despite the vigorous debates we have about how we organise education, there are certain principles upon which we all agree. Because we believe it to be so important to send a message of hope to children, parents, teachers, dedicated governors and councillors on LEAs and the rest, we are going to pursue the amendment to a Division tonight.

6.24 p.m.

On Question, Whether the said amendment (No. 291) shall be agreed to?

Their Lordships divided: Contents, 50; Not-Contents, 113.

Division No. 2
CONTENTS
Addington, L.	Morris of Castle Morris, L.
Airedale, L.	Ogmore, L.
Ardwick, L.	Peston, L.
Beaumont of Whitley, L.	Pitt of Hampstead, L.
Blackstone, B.	Plant of Highfield, L.
Carter, L.	Ponsonby of Shulbrede, L.
Cocks of Hartcliffe, L.	Portsmouth, Bp.
David, B.	Prys-Davies, L.
Desai, L.	Rea, L.
Eatwell, L.	Redesdale, L.
Falkland, V.	Richard, L.
Fitt, L.	Rochester, L.
Gallacher, L.	Russell, E. [Teller.]
Gladwyn, L.	Seear, B.
Graham of Edmonton, L.[Teller.]	Serota, B.
	Southwark, Bp.
Guildford, Bp.	Stedman, B.
Hampton, L.	Stoddart of Swindon, L.
Hamwee, B.	Strabolgi, L.
Hilton of Eggardon, B.	Taylor of Gryfe, L.
Jeger, B.	Thomson of Monifieth, L.
Jenkins of Putney, L.	Tordoff, L.
Judd, L.	Warnock, B.
Longford, E.	White, B.
McIntosh of Haringey, L.	Williams of Crosby, B.
Molloy, L.

NON-CONTENTS
Addison, V.	Brigstocke, B.
Allenby of Megiddo, V.	Brougham and Vaux, L.
Archer of Weston-Super-Mare, L.	Cadman, L.
	Caithness, E.
Arran, E.	Campbell of Alloway, L.
Ashbourne, L.	Carr of Hadley, L.
Astor, V.	Chalker of Wallasey, B.
Auckland, L.	Chelmsford, V.
Banbury of Southam, L.	Clark of Kempston, L.
Bauer, L.	Cochrane of Cults, L.
Belstead, L.	Constantine of Stanmore, L.
Blatch, B.	Cornwallis, L.
Blyth, L.	Craigavon, V.
Boyd-Carpenter, L.	Cranborne, V.
Brabazon of Tara, L.	Crathorne, L.
Braine of Wheatley, L.	Cumberlege, B.

Dacre of Glanton, L.	Mowbray and Stourton, L.
Davidson, V.	Moyne, L.
De L'Isle, V.	Munster, E.
Denham, L.	Murton of Lindisfarne, L.
Denton of Wakefield, B.	Northbourne, L.
Dormer, L.	O'Cathain, B.
Dunrossil, V.	Orkney, E.
Eden of Winton, L.	Palmer, L.
Elliot of Harwood, B.	Park of Monmouth, B.
Elliott of Morpeth, L.	Pearson of Rannoch, L.
Ferrers, E.	Perry of Southwark, B.
Fraser of Kilmorack, L.	Prentice, L.
Gainsborough, E.	Pym, L.
Goschen, V.	Rankeillour, L.
Halsbury, E.	Reay, L.
Hardinge, V.	Rees, L.
Hayhoe, L.	Rennell. L.
Hayter, L.	Renton, L.
Henley, L.	Rodger of Earlsferry, L.
Hesketh, L.	Romney, E.
Howe, E.	St. Davids, V. [Teller.]
Hylton-Foster, B.	St. John of Fawsley, L.
Jeffreys, L.	Sandford, L.
Jenkin of Roding, L.	Seccombe, B.
Kimball, L.	Selborne, E.
Kitchener, E.	Sherfield, L.
Lindsey and Abingdon, E.	Simon of Glaisdale, L.
Liverpool, E.	Skidelsky, L.
Long, V.	Stewartby, L.
Lucas, L.	Strathclyde, L.
Lucas of Chilworth, L.	Strathmore and Kinghorne, E.
Lyell, L.	Sudeley, L.
Mackay of Clashfern, L.[Lord Chancellor.]	Swinfen. L.
	Tebbit, L.
Macleod of Borve, B.	Teviot, L.
Mancroft, L.	Thomas of Gwydir, L.
Marlesford, L.	Trumpington, B. [Teller.]
Merrivale, L.	Ullswater, V.
Mersey, V.	Vivian, L.
Milverton, L.	Wakeham, L.[Lord Privy Seal.]
Mottistone, L.
Mountevans, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.32 p.m.

Clause 254 agreed to.

Clause 255 [Inter-authority recoupment]:

Baroness Seear moved Amendment No. 291ZA: Page 153, leave out lines 38 to 45 and insert ("to reflect relevant costs incurred by the local education authority in question.").

The noble Baroness said: I move the amendment in the absence of my noble friend. It is intended to provide that the costs to be charged should be the actual costs and not the average costs. They should be the relevant costs actually incurred by the local authority in question. It is a simple point and I beg to move.

Lord Peston

I rise before the Minister even though her amendment occurs earlier in the grouping. As regards procedure, the usual logical problem arises; that I object to the whole clause. I shall speak first to my amendment and to the others as though I do not object to the clause and then I shall rise a second time to explain my objection to the clause. I shall not make my clause stand part speech under this group of amendments.

If there is to be such a change in the recoupment procedure I support what was said by the noble Baroness, Lady Hamwee. I should be interested to hear any argument from the Government as to why all the costs incurred are not the costs which are recouped. We can debate whether we consider them to be the marginal or average costs. I am also intrigued by the Government's Amendment No. 219A, in which they have decided to use the expression: the whole or any part of". That makes no sense but I am open to argument as to why the expression should not be "the whole".

The second point, which relates to my amendment, is that, throughout, the provisions use the word "may" rather than "must". Therefore, two issues arise. The first is that logically regulations may not be made if they "may" be made. The second is that within the regulations there may be examples of recoupment that would not occur. In an area which the Committee has debated at some length it should be without doubt the case that recoupment should occur because otherwise the activity simply will not take place. That is why I have tabled my amendment to include hospital education. I do not believe that any Secretary of State of probity worth his salt will not produce regulations for recoupment. However, we do not write legislation on the assumption that the Secretary of State is a decent person or will do the right thing; we write legislation in order that what we want to happen does happen. That is why I have tabled this specific amendment.

I look forward to hearing the Minister's reply. I shall then explain why I believe that the whole clause should be withdrawn.

Lord Henley

I appreciate that the noble Lord will explain why he believes the clause should be withdrawn. It may help if I first speak to the whole clause and then deal with the specific amendment. As the Committee will be aware, at present the schools-related part of LEAs' standard spending assessments is calculated not on the number of pupils actually enrolled in an LEA's schools but on the number of pupils resident in the LEA, whether they attend schools within their home LEA or in another LEA. When a pupil attends a school outside his or her "home" LEA the "providing" LEA can recoup the cost of provision from the "home" LEA.

This system is unsatisfactory and burdensome for two reasons. First, the number of pupils crossing LEA boundaries to attend school is increasing fast. Secondly, the expansion of the grant-maintained school sector makes it increasingly anachronistic for money to pass between LEAs when the main financial relationship is between central government (or the FAS) and GM schools.

The present system shuffles money between LEAs to little good purpose. This clause will end LEAs' right to automatic recoupment, and will give the Secretary of State power to make regulations specifying the nature and scope of recoupment. Once this amendment is enacted we intend to simplify the recoupment system by two simultaneous changes. First, by calculating the schools' element of SSAs on the basis of the number of pupils attending the LEA's schools, regardless of their LEA of residence. Secondly, by confining recoupment to special cases.

It may well be necessary to continue recoupment where costs are high and the pattern of provision is uneven. In particular, it may prove desirable to retain recoupment for pupils with statements, including those educated in ordinary schools, and it may prove desirable to retain recoupment for special and hospital school pupils, and for children receiving education in other hospitals. I shall deal later with the amendment tabled by the noble Lord, Lord Peston. I can assure the Committee that we will consult local education authorities on these proposed arrangements, and will also invite their views on whether to include other categories of pupils, such as under-fives, in the new arrangements. I can also confirm that the new regulations will be subject to the affirmative resolution procedure in Parliament.

We are minded to introduce the new regime at the beginning of the financial year 1994–95. Although we may retain recoupment for some or all of the categories of pupils I have mentioned, we shall still be able to dispense with it for most pupils, with a consequent saving in the administrative burden of authorities.

Baroness Seear

If the authority providing the service is to be paid less than the authority which is receiving it will that authority have the right to refuse to provide the service?

Lord Henley

I shall deal specifically with the noble Baroness's amendment in due course. At present I am trying to explain that the present arrangements are to some extent unnecessarily bureaucratic and burdensome in providing for automatic recoupment—that is, merely shuffling money from one authority to another. If the SSA is to be based on the number of pupils attending a school in that authority, there is no need for recoupment from the other authority because the authority in which the pupil is at school provides the money. In other words, it is the money following the pupil or rather, the SSA is based on the number of children attending the school rather than the number of children living in the area. That seems to be a perfectly logical and sensible arrangement which saves a great deal of shuffling money around.

The amendment proposed by the noble Baroness would, I fear, lead to prolonged, unnecessary inter-authority wrangling and would impose a huge administrative burden, taking up time and money which would be better spent on providing education. In addition, I believe that it is wholly unnecessary.

I understand the point that actual costs incurred by local authorities in providing education may be different from the average recoupment rates, but I would ask the noble Baroness to look carefully at the flexibility already provided by Clause 255.

Subsection (1) (a) of that clause provides that recoupment between authorities shall be for whatever amount they agree between themselves. In practice, what happens at the moment is that the Council of Local Education Authorities recommends a national set of rates, varying on a regional basis, and authorities either use those rates or, using them as a basis, reach local agreements, based on their knowledge of the individual pupils involved and the education provided. The Secretary of State only imposes a recoupment rate if a recoupment claim cannot be sorted out locally.

The second point to note is that subsection (3) of Clause 255, which is the subject of the amendment, is only permissive. It does not say that the regulations must provide for the amounts payable to reflect average costs. Indeed, the regulations could provide for the amounts payable to be based on a different principle. There will be no general direction from the Secretary of State that all recoupment claims must be dealt with on the basis of average costs.

Finally, I turn to the amendment in the name of the noble Lord, Lord Peston, on hospital education. I realise that he gave a specific example. We are well aware of the view, strongly voiced by several noble Lords at an earlier stage of our proceedings, that the funding of hospital education needs to be safeguarded.

In the Government's forthcoming consultation document, we shall be inviting views on the future scope and nature of recoupment. We shall in particular seek views on the desirability of retaining recoupment for the various kinds of hospital education. To that extent, this amendment seeks to anticipate the outcome of that consultation. Again I stress that the regulations resulting from that consultation will be subject to the affirmative resolution procedure and will be debated in this Chamber.

The Government cannot accept an amendment to require recoupment whenever hospital education is provided for more than half a day. Many pupils' stay in hospitals is extremely short, and they will receive only a short period of education. There is an obvious danger that the administrative cost of recoupment would be larger than the sum recouped. No doubt the point which the noble Lord made can be taken care of by consultation.

My noble friend's amendment is a minor technical one. The new subsection (3) of Section 51 states that: The regulations may provide for the amount payable from one authority to another … to reflect average costs". The amendment would allow the regulations to provide for those amounts to reflect the whole or any part of the average costs. That would allow slightly greater flexibility when drafting the regulations so that one possibility might be to allow the authority importing pupils to receive basic credit for the pupils in its grant from central government but to recoup any extra marginal costs of provision from the pupils' home authority. Therefore, the amendment extends the possible range of options for recoupment which can be canvassed in the consultation exercise which we intend to conduct with the LEAs.

I hope that I have reassured the noble Baroness sufficiently so that she will withdraw her amendment. I hope that I have dealt with most of the noble Lord's queries about the clause itself but no doubt the noble Lord will decide whether he wishes to speak on the Motion that the clause shall stand part of the Bill.

6.45 p.m.

Lord Renton

Before the noble Lord, Lord Peston, replies, perhaps I may respectfully point out to him that his amendment does not fit into the clause as it is. The clause is entirely an enabling clause but he turns it into an obligate clause in respect of one detail only. The amendment would have to be redrafted even if he wanted it dealt with in substance.

The other point is that it seems to me that the point which the noble Lord is after is taken care of when the amendment of my noble friend Lady Blatch is made to the clause. That enables the whole of or part of any costs to be dealt with in the regulations. The noble Lord, Lord Peston, has just given one example of "part" of the cost. Therefore, there would in any event be an overlap if the amendment were accepted.

Baroness Seear

I have listened to what the Minister said; and, in the circumstances, I beg leave to Withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Henley

moved Amendment No. 291A: Page 153, line 38, after ("reflect") insert ("the whole or any part of the").

On Question, amendment agreed to.

Lord Peston had given notice of his intention to move Amendment No. 291B: Page 154, line 4, at end insert ("save that the Regulations must provide for amounts payable for pupils in hospital education where the period of education is in excess of one half day.").

The noble Lord said: Within the context of the clause, I found the noble Lord's remarks reassuring. Indeed, given the new view of statutory interpretation, when the regulations are made under the affirmative resolution procedure, if subsequently a hospital school felt that it was being dealt with incorrectly, it could at least quote some of the reassuring comments made today. Therefore, I shall not take issue with the noble Lord, Lord Renton, on the difference between what is obligatory and what is permissive because I was trying to argue that the provision should be obligatory.

[Amendment No. 291B not moved.]

On Question, Whether Clause 255, as amended, shall stand part of the Bill?

Lord Peston

There is more than one reason why we should discuss this Motion. Unless the Minister tells me I am mistaken, this is a very, important change in the way in which local education is financed. This is a major change to education finance in this country.

I believe that I am right (but I stand ready to be corrected) that that major change was never debated in the other place. Therefore, it seems to me that when a total change in the way in which we finance local education is proposed, we have an obligation to ask whether that is a sensible way of doing things. It always seems to me to be illogical that we discuss the general principle of a clause after we have discussed the detail of it, but that is the way in which our procedures work and that is why I must speak a second time on this Motion.

The recoupment question is essentially a balance of payments problem. Certain local education authorities are exporting school places and certain other authorities are importing them. In the normal way in which accounting and remuneration takes place, the buyer pays the seller. Indeed, I should add that given the Government's whole philosophy here and in other areas, that is clearly the correct logical way to do it and it is how it has been done up to now.

I listened very attentively to the noble Lord but I still do not understand why these changes must be made. Equally, I am advised—again, I am always open to the noble Lord's arguments and evidence—that there is no major bureaucratic problem; quite the contrary, the present system, as I understand it, is working quite well. It can be expected to work well because that is the correct way to do things.

Those are the reasons why I felt that one had a duty to raise the matter: the Government are actually choosing an illogical way of dealing with the problem. Indeed, I go further. I do not understand why anyone would choose to deal with a problem if there was no problem in the first place. All my advisers tell me that there is no problem and that the present system is proceeding satisfactorily. Therefore, why are the Government suddenly announcing that it is bureaucratic? There is no evidence whatever to show that it is bureaucratic, nor that it has gone particularly wrong. Rather, to the extent that it has gone wrong, it could be dealt with in minor ways.

I do not want to delay the Committee any longer, but, bearing in mind the fact that this is the first time the subject has been discussed generally in either place, it seemed to me that one had a duty at least to place a few thoughts before Members of the Committee before proceeding to other matters.

Lord Henley

I think that the noble Lord is making something of a mountain out of a molehill. I explained in some detail—and I hope that the noble Lord is grateful—why we consider that the old system was bureaucratic and unnecessary. I also explained why we are making the changes. But it is not a major change in the way local authorities are funded for education; it is simply a change in the way we arrange the recoupment. The new arrangements quite simply streamline the funding system and make some savings in LEA administration, which I am sure the noble Lord welcomes, by ending an unprofitable network of bureaucratic transactions.

Quite honestly, I simply cannot see why anyone can object. In any event, the Bill merely establishes the framework for making new rules. I have given an absolute and categorical assurance that we will consult the LEAs on the details of the new system, especially for categories of pupil for whom recoupment will be retained. I have also given an assurance that the regulations, when they come forward, will be subject to the affirmative resolution procedure.

Clause 255, as amended, agreed to.

Earl Russell moved Amendment No. 291C. After Clause 255, insert the following new clause: ("Grants for the education of travellers and displaced persons —(1) The Secretary of State may by regulations provide for the payment to local education authorities of grants in respect of expenditure incurred by them in making provision, the purpose (or main purpose) of which is to promote and facilitate the education of persons to whom this subsection applies. (2) Subsection (1) above applies to a person if—

1. (a) by reason of his way of life or, in the case of a child, his parent's way of life he either has no fixed abode or leaves his main abode to live elsewhere for significant periods in each year;
2. (b) he fell within paragraph (a) above within a prescribed period immediately preceding the making of the provision in question; or
3. (c) he is for the time being resident in temporary accommodation.

(3) Regulations under subsection (1) above may—

1. (a) prescribe classes or descriptions of expenditure in respect of which grants are payable under the regulations;
2. (b) provide for the determination of the amount of any grant so payable;
3. (c) provide for the payment of any such grant to be dependent on the fulfilment of such conditions as may be determined by or in accordance with the regulations; and
4. (d) provide for requiring local education authorities to whom payments have been made under the regulations to comply with such requirements as may be so determined.").

The noble Earl said: I move the above amendment on behalf of my noble friend. It would empower the Secretary of State to make grants for the education of those who might otherwise be slipping through the net—that is, transients, travellers, itinerants, people of no fixed abode and people in temporary accommodation. At present, such people do not always receive an adequate education. We believe that the amendment is necessary because the present state of the law under Section 210(2) (c) of the Education Act 1988 empowers the Secretary of State to make grants for education for people who are resident, in a camp or other accommodation or establishment provided for refugees or for displaced or similar persons". We do not think that that description in the 1988 Act covers all the likely cases. In particular, it does not cover the case of those who necessarily, because of their parents' occupation, have to travel. For example, it used to be notorious in Birmingham that the children of the bargees were normally illiterate because their parents were always travelling. They were not based in any regular local authority area and it was no one's responsibility to educate their children. Being under pressure, local authorities will always tend to give priority to those they recognise as being their responsibility. Therefore, if we want them to take responsibility for itinerants, we shall have to make available some money.

Apart from the bargees, the proposed new clause would also apply to the homeless. On many occasions Amy noble kinsman and I have discussed the plight of people in bed and breakfast accommodation. I can recall the noble Baroness, Lady Faithfull, drawing his attention to the fact that a great many of those children do not receive any regular schooling. That is a pity and something for which, in the long term, we may have to pay. It may perhaps be a good idea for the departments to get together on the matter. As my noble kinsman happens to be on the Front Bench, perhaps he could on occasion let his left hand know what his right hand is doing in the matter.

The proposed provision would also apply to refugees. When we debated refugees during the Asylum and Immigration Appeals Bill, the noble Baroness, Lady Faithfull, recalled trying to communicate with a Somali child who was a refugee. There was no common language between them. She tried to offer him a bar of chocolate in the hope of reassuring him, but he did not know what it was.

There are very considerable problems which will all involve the local authority having to incur costs. We have here what I think is known loosely as the "Hillingdon problem", which is a very regular and well known one. I believe that the amendment kills a good many birds with one stone. I think that that is economical. I beg to move.

Lord Peston

The noble Earl, Lord Russell, stands in as an imperfect substitute for the noble Baroness, Lady Hamwee, while I stand in as an even more imperfect substitute for my noble friend Lady Blackstone. As I was only given the job a few moments ago, I am happy to say that the noble Earl, Lord Russell, has covered all the main points. I simply wish to make one technical point.

Looking at the proposed new clause as drafted, it seems to fit quite logically with Clause 255. Essentially Clause 255 is a grant system of recoupment where one is discussing pupils in one LEA using the facilities of another. In a sense, the travellers and displaced persons are pupils who are not really part of an LEA, and so on. Yet again, the same logic would suggest that the procedures under Clause 255 should be used to fund the LEAs which educate those pupils.

Logically, it seems to me that Amendment No. 291C fits neatly with Clause 255. My reading of the clause as drafted —though perhaps the Minister can enlighten me on the matter—is precisely that it cannot be used for that purpose because it refers to pupils in one authority with respect to another. That is not quite the same thing. However, it seems to me that the spirit of Clause 255 could easily be carried over to accepting either Amendment No. 291C or a suitable amendment to Clause 255 to do exactly the same job.

Lord Renton

I do not doubt the sincerity of the noble Lord; indeed, I never do. He really has put forward a case which, at any rate in part, deserves consideration and which, as he pointed out, is partly covered by existing law. But the proposed new clause seems to me to be most extraordinarily wide.

If we look at subsection (2) of the amendment, provision would have to be made, by reason of his way of life"— that is, the child's way of life— or, in the case of a child, his parent's way of life". The phrase "way of life" is a very broad concept. Any way of life would seem to enable provision to be made. Of course, whether it should be made is another matter and very debatable. The subsection goes on to speak of a person of "no fixed abode". One always feels sorry for children whose parents are just wanderers and who do not take the trouble to settle down into any kind of normal civilised life. I must point out that I am expressing a purely personal view; but, in such a situation, in order to ensure the child's education, I should have thought that it would be better for him to be taken into the custody of the local authority. It is very difficult to generalise because such hard cases must vary enormously.

Another circumstance which is mentioned in the proposed new clause in subsection (2) is where someone, leaves his main abode to live elsewhere for significant periods in each year". I am not quite sure how that is intended to work. Does it mean that the child may have to move so as to be with his parents when they are in the main abode and then move to another area of an education authority when his parents are moving elsewhere?

Admittedly, it is left to the discretion of the Secretary of State to prescribe the period of movement from the main abode to live elsewhere. But the Secretary of State will have to take a somewhat difficult decision in some cases. It is difficult to see how regulations would provide for the enormous variations. I am expressing only my own point of view. I do not know whether the Government agree with it. I feel that this provision is extremely wide, and I can see various difficulties arising with regard to it.

The principal problem, I would have thought, is the great problem (the ancient problem) of gypsies. Over the years that problem has been dealt with more or less satisfactorily. It is very difficult sometimes to deal with. The modern variant of gypsies, less praiseworthy, are the new age travellers. They seem unlikely to co-operate with authority at all. I shall be interested to hear what my noble friend has to say.

7 p.m.

Lord Peston

This is an important point, and it may help if I clarify what we have in mind. We are very definitely at odds. At least the noble Lord, Lord Renton, and myself are at odds; I am not sure about the noble Earl, Lord Russell. So far as we are concerned, we may not care for travellers and gypsies and all that sort of thing (or fellow travellers even) but their way of life happens to be perfectly legitimate in our country. It is not illegal to do that sort of thing and, even though it may not appeal to us, we nonetheless have responsibilities to such people—and more to the point, to the children of such people.

Lord Renton

Our responsibility in the context of this Bill is to their children.

Lord Peston

Yes, indeed, it is to the children. But it is certainly no help to say that the way to deal with the problem is to say that they are taken into care. The point is that these people move from place to place. Even though it is not my way of life—I find the idea of moving under any circumstances quite horrifying—these are fellow members of our society and their education is important. Indeed, we have obligations regarding their education. The central point is that therefore funding should be adjusted to those obligations. That is the point at issue. It is not to my knowledge the case—again the noble Earl, Lord Russell, may be able to enlighten us—that the existing arrangements are satisfactory. Local authorities sometimes bear a disproportionate burden—or, more to the point, their ratepayers (council tax payers) bear a disproportionate burden. The purpose of the amendments is exactly to allow for that. I hold back from making any value judgment about other people's ways of life. I do not believe it is my business. But I do believe that those children deserve a decent education. Indeed, they are obliged to have a decent education under the national curriculum, and the relevant resources must be made available to the bodies that provide it. That is the purpose of the amendment.

Lord Henley

The noble Lord, Lord Peston, said that he stood in as an imperfect substitute for his noble friend Lady Blackstone, and my noble kinsman stood as imperfect substitute for the noble Baroness, Lady Hamwee. I will complete the hat-trick by saying that I stand in as an imperfect substitute for my noble friend.

The amendment seeks to extend the scope of Section 210 of the 1988 Act to enable the Secretary of State to pay grants to local education authorities for the education of persons for the time being resident in temporary accommodation.

I should like to argue that the amendment is unnecessary and would be unworkable in practice. There is no reason to assume that people living in temporary accommodation have by definition any particular educational needs of the kind that Section 210 grant is intended to address.

The aim of Section 210 is to enable the Secretary of State to pay grant to the LEA and also to further education colleges to promote and facilitate the education of travellers and of those who are for the time being resident in a camp or other accommodation or establishment provided for refugees or for displaced or similar persons. The grant replaced an earlier arrangement known as the "no area pool" which enabled local authorities to claim additional funding from central government to meet the educational needs of people who are not ordinarily resident in their area. That included nomadic people and displaced persons who were living in camps or reception centres on first arrival in this country, and later included the bargees, about whom my noble kinsman spoke so eloquently and feelingly.

Section 210 grant supports extra provision made to meet the particular educational needs of travellers and of displaced persons over and above what is normally provided in school. Section 210 was never intended to provide the sole means of support for their education. The LEAs receive allowance in their revenue support grant to meet the basic educational needs of all pupils, including travellers and displaced persons, based on numbers recorded in the annual pupil count.

The education element of revenue support grant contains a generous weighting for the costs of meeting additional educational needs of this kind, including needs that arise from social factors. Those authorities which benefit most from this weighting are those London authorities where, as the noble Earl says, the problem of housing in temporary accommodation is most acute.

My noble kinsman was also concerned that LEAs should receive funding for those who are temporarily housed outside their normal authority of residence. Under the present arrangements, the authority where they are ordinarily resident already receives credit for those pupils in its standard spending assessment. The authority providing the education can recoup the cost of education from the authority. We have just moved on from Clause 255, and under the system which we propose to introduce under that clause, an authority will receive funding based on the number of pupils in its authority regardless of their authority of residence.

My noble kinsman also asked about what help there was for those local authorities faced with the unexpected influx of displaced persons. The Department of the Environment announced two schemes in February to help local authorities facing unexpected hefty demands as a result of displaced persons. Those demands will not be purely on the educational service. One scheme is for those from former Yugoslavia and one is for unaccompanied children. Again, Section 210 grant is not designed to deal with those specific short-term needs, and the LEAs have to submit detailed project proposals well in advance of the start of that year for which funding is sought.

Quite apart from any considerations as to the merits of this particular amendment, which, as I have already explained, I argue is unnecessary, I should inform the Committee that it is defective, since it contains no provision for the repeal of Section 210 of the Education Reform Act, whose provisions, with the exception of subsection (2)(c), it largely replicates. I hope therefore that my noble kinsman will feel able to withdraw his amendment.

Earl Russell

I congratulate my noble kinsman on completing the hat-trick. I also listened with great interest to the noble Lord, Lord Renton. He is, I believe, creating real difficulties. But the amendment was also concerned to meet real difficulties. I do not argue that the drafting is perfect.

But let us take, for example, the "way of life". It was intended to apply to people such as bargees, or people whose parents work in a circus. That can make matters extremely difficult. I am sure that the noble Lord understands the sort of situation to which those words were intended to apply. Should the Government be minded to do more, I am sure that if we sat round a table, we could reach an acceptable wording. On the other hand, I wondered about the suggestion of taking the children of gypsies into care and whether that was perhaps a bit draconian; and whether, in the light of the Orkney case, it was a particularly timely suggestion.

With regard to the phrase "significant periods of the year", again I see the problem of definition. But there are categories of people, notably migrant workers, for whom one needs some phrase of this order in order to indicate what is meant. I can imagine, say, a single parent who is a travelling actress possibly needing very much to take advantage of a form of words of that sort. I believe that these difficulties, though genuine, are not insuperable. If this were to go further, we could discuss it.

I am grateful to my noble kinsman for the care he took in answering. I am not sure that I am convinced by his case. I shall have to read what he said very carefully. His answers in relation to Section 210 illustrated why Section 210 is not sufficient. He said that people who stay in temporary accommodation do not have a particular need, but we are concerned about providing ordinary schooling for people who are in temporary accommodation, moving, and so forth. Therefore, if Section 210 does not cover that, its wording ought to be changed.

I listened with interest to what my noble kinsman said about the pool. Here the Government appear to be suffering from the degree of confidentiality involved in the assessment of standard spending assessments. If cards were placed on the table so that it was known how much was available for what, we would be able to understand each other a great deal more quickly than is sometimes possible.

I heard what my noble kinsman said about the amendment being defective. I take that point. Having listened with care, and being grateful for much of what was said in the reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 292 not moved.]

Viscount Astor

I beg to move that the House do now resume. In moving this Motion I suggest that the Committee stage of the Bill begin again at 8.10 p.m.

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

House resumed.