Nursery Education and Grant-Maintained Schools Bill

HL Deb 09 July 1996 vol 574 cc254-86

Consideration of amendments on Report resumed.

Lord Henley moved Amendment No. 13: After Clause 3, insert the following new clause—

CHILDREN WITH SPECIAL EDUCATIONAL NEEDS

(" .—(1) It shall be the duty of—

1. (a) any authority or other person providing funded nursery education, and
2. (b) any person employed by such an authority or other person in the provision of such education,

(except where a duty is already imposed by subsection (2) of section 157 of the Education Act 1993) to have regard to the provisions of the code of practice issued under that section (practical guidance in respect of the discharge of functions under Part III of that Act). (2) That code of practice may include practical guidance in respect of the provision of funded nursery education for children with special educational needs in circumstances where functions under Part III of the Education Act 1993 do not fall to be discharged. (3) But unless that code of practice includes provision made by virtue of subsection (2)—

1. (a) the Secretary of State shall publish a document explaining how the practical guidance contained in that code applies in circumstances where functions under Part III of the Education Act 1993 do not fall to be discharged, and
2. (b) the duty imposed by subsection (1) includes a duty to have regard to the provisions of that document.

(4) In this section "funded nursery education" means nursery education in respect of which the Secretary of State is making (or is to make) grants under arrangements under section 1.").

The noble Lord said: My Lords, before I address the specifics of this amendment, I reassure the House of the Government's commitment to ensuring that children with special educational needs also enjoy the same benefits of good quality nursery education. I wrote in some detail to the noble Lord, Lord Rix, about this commitment by Her Majesty's Government at Committee stage. I copied that letter to the two Opposition Front Benches and others.

It is perhaps worthwhile if I explain in as brief a detail as I can what we are doing. I remind the House that the nursery education voucher scheme will not in any respect affect the current duties and responsibilities of local education authorities towards children with special educational needs. I should have said at the outset that I understand why the noble Lord, Lord Rix, is not able to be here this evening. I am sorry that he is not here, but he explained these matters to me and my colleagues.

At Committee stage I made a commitment that I would bring forward an amendment to the Bill on Report which would build on the amendment that the noble Lord, Lord Rix, had tabled to place a duty on all voucher redeeming providers, not already covered by the duty in Section 157 of the 1993 Act, to have regard to the special educational needs code of practice. I move this amendment in fulfilment of that commitment. I explained during Committee that it was important not to forget that the code of practice was written with local education authorities and maintained schools, not playgroups and private nursery schools, in mind. The code provides advice and guidance for schools and LEAs to help them make effective decisions in the context of the duties placed on them by Part III of the Education Act 1993. This reflects the fact that Section 157 is limited to the exercise of functions under Part III. Providers in the private and voluntary sectors do not have any duties under Part III of the 1993 Act, so one cannot simply place on them a duty to have regard to the code.

In addition to the duty on all providers redeeming nursery vouchers to have regard to the code, the government amendment places a duty on the Secretary of State, pending an expansion of the code itself to cover providers in the private and voluntary sectors, to publish a document which will provide practical guidance to help those providers apply the key principles of the code which are of equal relevance to them. I must stress that this complementary guidance will be just that—complementary. It will not dilute the standing of the code itself; it will merely make it more accessible to providers outside the maintained sector. I can assure the House that the code will remain the point of reference. We will shortly be consulting on the detailed content of this guidance. Therefore, I hope that the House will accept this amendment. I beg to move.

Lord Morris of Castle Morris

My Lords, the noble Lord, Lord Rix, proposed this amendment at Committee stage. As I expect the whole House is now aware, he was taken to hospital this afternoon with what we hope is no more than a minor indisposition. The noble Lord wrote to me en route and said that he wished to express his gratitude to the Minister and all who had taken part in the short debate on his amendment at Committee stage. He wished to thank us, especially the Minister, for this happy outcome, which also has the blessing of the Special Education Consortium. He believes that we all recognise that, as regards this issue, common sense has prevailed. He wished that to be conveyed to your Lordships' House. I can add only, in the words of the American satirist, "Them's me sentiments, too!".

Baroness Thomas of Walliswood

My Lords, I, too, welcome the amendment. It is good that the Government have felt able to act in respect of this important matter. The amendment is widely welcomed outside the House, and I congratulate the Government on having come a long way towards what was requested.

Baroness David

My Lords, I, too, requested that the code of practice should be extended to cover other areas, and therefore I, too, am pleased that the Government have produced the amendment.

A few concerns remain, however, and perhaps I may voice them. They have been brought to my attention by the Special Education Consortium. It is concerned that other guidance, in particular guidance on admissions in Circular Nos. 693 and 694, will not apply to settings not in the maintained sector. It will therefore be possible for providers of nursery education which are not in the maintained sector to discriminate against four year-olds with special educational needs in their admissions criteria and in the way in which they operate. The SEC believes that that will undermine the principle of the application of the code to providers of nursery education and, indeed, the Government's intention in extending the guidance in the code to all providers. Therefore, the consortium would welcome some indication of the Government's intention to include in the additional documents which will support the code guidance indicating that admissions criteria which discriminate against four year-olds who have or may have special educational needs will be unacceptable.

Lord Henley

My Lords, I am sorry to hear that the noble Lord, Lord Rix, has gone into hospital. I had heard that he had been unwell but I had not realised that he was in hospital. On behalf of the whole House, I wish him the speediest recovery.

Noble Lords

Hear, hear!

Lord Henley

Having said that, I am hoping that early next week my wife will be going into hospital in happier circumstances and that some consideration will be given to me, or perhaps to my noble friend Lady Miller, if I have to hand over the brief at short notice.

I am grateful for the warm welcome for the amendments and for the way in which the noble Lord, Lord Rix, and the Special Education Consortium came to see me to discuss matters. That often makes for a productive process in the course of legislation going through either House, in particular through this House.

Perhaps I may deal with the particular concern raised by the noble Baroness, Lady David. The two circulars, Nos. 693 and 694, which were brought to our attention by the SEC set out the factors which the admissions authorities should take into account in formulating admissions policies. They state that having a special educational need should not give a child a lower priority, all other things being equal. I can add only that that will be covered in complementary guidance, and I hope that that satisfies the noble Baroness.

On Question, amendment agreed to.

8.45 p.m.

The Lord Bishop of Ripon moved Amendment No. 14: After Clause 3, insert the following new clause—

ADMISSION OF CHILDREN TO NURSERY EDUCATION AT AIDED AND SPECIAL AGREEMENT SCHOOLS

(" . Where nursery education is, or is to be, provided under this Act at an aided or special agreement school it shall not be lawful for a local education authority to impose or seek to impose any conditions or requirements on the governing body of the school as to the arrangements for the admission of children to receive nursery education at the school.").

The right reverend Prelate said: My Lords, we in your Lordships' House are aware of the happy event to which the Minister has referred. I wish to offer him and his wife my congratulations and hope that all goes well for them in the week to come.

The amendment arises from the fact that admissions criteria to aided and special agreement schools are set by the governing body. However, it is not the case in law that those admissions criteria apply to children receiving nursery education in the school. Relationships between aided schools and local authorities vary. At times they are excellent. Indeed, in the authority in which the noble Baroness, Lady Farrington, has served, there are excellent relationships. However, sometimes they fall a little short of excellence and difficulties arise.

Some aided schools have found that when they established a nursery unit and looked for the funding for it the local education authority insisted that admission to the nursery school should be in accordance with the LEA's preferred criteria and not in accordance with the criteria which the governing body was willing to accept. That creates a great difficulty, in particular if a school is over-subscribed. It might mean that a number of children in the nursery class will be unable to transfer to the reception class. If the criteria were different they would fit the criteria for the nursery class but not for the aided school. The governors would then find themselves under pressure to change their criteria in order to be able to accept in their school children who have been in nursery education. We do not want that situation to arise and the amendment seeks to draw attention to the matter. We ask the Minister to recognise the difficulties which exist. I beg to move.

Baroness Farrington of Ribbleton

My Lords, we support the principle of recognising the role and autonomy of governors of aided schools. However, we are a little unhappy about the wording of the amendment. On many occasions it is possible to seek to reach agreement in the interests of all concerned. I think in particular of a situation which arose in the area for which I am a county councillor. A Catholic voluntary-aided primary school happened to be in the best position to have a nursery unit development but there was agreement all round that on the basis of need the first places ought to be given to the children from the community served by the school and by the adjacent county-maintained school. There was a separation and a distinction between the admission arrangements for the nursery unit and those for both primary schools. Of course, it can work the other way round because it might be that the only accommodation is in the non-voluntary-aided school.

I understand that the amendment will not be pressed to a Division tonight. I hope that it will be possible to put forward some wording which will recognise the importance of achieving a consensus while recognising the legal status of the decisions of governors of aided schools with regard to admissions.

Lord Henley

My Lords, I thank the right reverend Prelate for his congratulations on doing my bit towards yet further over-populating this planet. I hope that all goes well early next week in more than one way.

Perhaps I may briefly explain why I believe the amendment is unnecessary. The right reverend Prelate will know far better than I that decisions about admission arrangements for maintained schools rest with the admissions authorities. For most county or voluntary-controlled schools, that is the maintaining LEA. We must be careful about the distinction between voluntary-controlled and voluntary-aided schools. It was an interesting lesson in history to discover the difference between the various types of school. For voluntary-aided and special agreement schools, that is usually by virtue of articles of government; that is, the school's governing body. A voluntary-aided or special agreement school can therefore determine its own admissions arrangements. If the right reverend Prelate has specific examples of problems, I should be more than happy to know of them.

However, these schools are required, as the noble Baroness, Lady Farrington, made clear, to consult the maintaining LEA should they propose to make changes to their publicised admission arrangements and, although it is important that the maintaining LEA has an opportunity to comment on the proposed changes—again, this is the point that the noble Baroness was making—the decisions in the end rest with the school's governing body. I hope, therefore, that the right reverend Prelate would feel his amendment is not necessary. Of course, if he wishes to have further discussions with my officials before another stage, I would be more than happy for that to take place.

The Lord Bishop of Ripon

My Lords, I am grateful, first, to the noble Baroness, Lady Farrington, and I entirely accept the point she made. This amendment sought merely to ensure that admissions criteria should not be imposed on a governing body, but to seek consensus or agreement is of course entirely right in the circumstances that she outlined.

I am grateful to the Minister for saying that he is willing to engage in further consultation on this matter, and it may be that we will wish to bring something back in the light of those consultations. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morris of Castle Morris moved Amendment No. 15: After Clause 3, insert the following new clause—

PURPOSE OF GRANTS

(" .—(1) No arrangements may be made for or in connection with grants made under sections 1, 2 or 3 above, in respect of nursery education provided during a financial year, in respect of which—

1. (a) vouchers are to be, or have been, issued to parents or guardians for the purpose of claiming such education for their children; or
2. (b) any method of funding grants made under this Act is to be, or has been, employed under which calculations of grants are made wholly or partly by reference to the presentation of vouchers by parents or others for the purpose of claiming nursery education.

(2) For the purposes of this section, "voucher" means a document issued on application to a parent or guardian and designated by or on behalf of the Secretary of State as having a value equivalent to a specified sum, whose acceptance (after presentation by that parent or guardian) by or on behalf of a person to whom section 1(4) applies, enables a child of that parent or guardian to receive nursery education within the meaning of this Act.").

The noble Lord said: My Lords, part of the difficulty in dealing with the debate on this Bill has been that many of the principal objections to the voucher scheme which the Government propose to introduce lie outside the Bill altogether. The legislation presents virtually skeletal powers which can be used to make grants, and that in itself is unexceptionable. The grants may go to the maintained sector, to the private sector or to the voluntary sector, and that is well and good.

The main feature which gives rise to concern for many of us is the creation of the voucher system itself, which will produce enormous financial upheavals within the existing nursery educational system, which is doing quite well as it is. Local authorities will have deductions in advance from their levels of revenue support grant in order to provide the major part of the funding for the scheme, and this makes rational planning virtually a gamble. It is disruptive, it is divisive and, to use the Minister's favourite word, it is unnecessary. We do not have to do it.

The introduction of vouchers is not being accompanied by any proper planning for the filling of gaps in provision nor for the adequate preparation through capital expenditure and training of staff which would ensure that the kind of high levels we are looking for in quality were maintained. The looseness of the inspection regime and the ease with which new providers can get into the system underline the impression that expansion is being sought with insufficient regard for the quality and integrity of the provision.

It is ironical that the pilot schemes are already demonstrating that there is very little expansion outside the maintained sector. It is rather like the parallel I thought of to the student loans legislation, where, for ages, nobody came forward to provide the service and, if I am not totally wrong, the Government had considerable difficulty in persuading anyone to come forward. Certainly, there was no great difficulty in deciding between the competitors. Surely, the most effective way to develop nursery provision would be to ask local education authorities to work in partnership with other sectors, deploying such resources as are available.

We put forward this amendment to hear what the Minister says, and the degree to which the Government seek to resist this amendment will give us some idea of the extent to which the real purpose beneath this Bill is not so much educational as political. I beg to move.

Lord Tope

My Lords, I rise briefly at this time of night simply to add support from these Benches to the amendment and to look forward with at least equal interest for the same reasons to the Minister's reply.

Lord Henley

My Lords, I do not intend to follow the noble Lord, Lord Morris, down the tracks of the student loans legislation. I cannot remember whether it has received Royal Assent yet, but the student loans legislation has completed all stages in both Houses of Parliament.

The noble Lord, Lord Morris of Castle Morris, alleged that the legislation is mere skeletal legislation. That is quite a serious allegation. I have to say that we did have considerable discussions with my noble friend Lord Alexander and the Delegated Powers Scrutiny Committee, before which my honourable friend Mr. Squire appeared. We have made a number of amendments in another place and a further amendment here. They are perfectly satisfied that this is an appropriate use of the powers. Therefore, I believe it is unfair, if I may put it at that, to say that it is a mere skeleton.

In relation to the amendment itself I feel that it would be technically wrong for me to say it was a wrecking amendment, but it certainly seeks to destroy the very policy which the Bill, as we set out at Second Reading, is designed to put into place; that is the nursery education voucher scheme. It is designed to ensure, if I read the amendment correctly, that that could never be implemented. That would be a direct blow against the policy of parental choice which we have pursued.

We believe that all parents should have the opportunity to gain access to an element of state funded education for their four year-old child. But different parents and children have different needs and different desires. We do not believe that one uniform type of provision should be imposed on all children and all parents. We believe that parents should have the right to choose the type of provision which is right for their child.

That is exactly what the voucher scheme will enable parents to do. It will ensure that funding, including the substantial amount of new money—some £400 million over three years—which Her Majesty's Government are providing for the purpose will flow to those institutions which are providing what parents want. Parents will be able to choose between good quality provision in the state, private or voluntary sectors—handing over their vouchers for the place they choose.

I believe that this will also have the effect of improving the quality of provision available. Providers who do not meet parents' needs will not receive grant. This will put all providers on their mettle and encourage them to ensure that what they offer is the best provision within their power.

We have never claimed that new places will be created overnight, but I have to say that from the evaluation that is already ongoing in the phase 1 areas there are already encouraging signs. Twenty-seven per cent. of playgroups in phase 1 have increased the number of sessions they offer, and the survey indicates some new places are being created in phase 1. There are new LEA places, too.

I would therefore reject the suggestion made by the noble Lord, Lord Morris, that there is merely some political motive behind what we are doing; what we are trying to do is to increase parental choice, and what this amendment would do is deny them just that. I hope, therefore, that the noble Lord will feel able to withdraw his amendment.

Lord Morris of Castle Morris

My Lords, before the noble Lord sits down perhaps I may ask him one question. Is it not the fact that Norfolk LEA were given approximately £1 million to begin a building programme of 25 to 30 new nursery units? They built nine of these before 15th April 1996, which was the date of the start of the pilot scheme. We are not sure how many more have now been completed. We would be very interested to hear if the Minister could add anything to that.

Lord Henley

My Lords, perhaps I may take this opportunity to correct something I said earlier to the noble Baroness, Lady David, when I said that I thought it was that they had not been given new capital. They were given a small amount of new capital. This was because we are still in the early days of the PFI initiative. It was quite right, therefore, that some new capital should be made available. Off the tip of my tongue I cannot remember exactly what new provision that has allowed them to make, but I believe it was quite right, in the phase 1 areas, to do just that. I certainly have great faith in the PFI initiative and what it might offer in the future. However, I will write in greater detail to the noble Baroness, Lady David, and I offer my apologies for misleading her and possibly the House at an earlier stage.

Lord Morris of Castle Morris

My Lords, I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9 p.m.

Baroness Farrington of Ribbleton moved Amendment No. 16: After Clause 3, insert the following new clause—

DUTIES OF LOCAL AUTHORITY

(" .—(1) An early years strategy shall be prepared annually by each local authority to whom a grant is made under section 1 or in whose area a person to whom a grant is made under section 1 has his premises.

(2) The local authority in preparing such an early years strategy shall make arrangements for consulting residents in its area and any organisations representing the interests of parents within its boundaries.

(3) In carrying out such a strategy each local authority shall—

1. (a) consult any relevant body within its area for the purpose of establishing where such provision does not exist, and
2. (b) take such steps as may be practicable within the resources available to it and to other providers to seek to secure provision for all eligible children as specified in section 1(2) within its area.

(4) In subsection (3), "relevant body" means—

1. (a) every health authority the whole or part of whose area lies within the area of the local authority;
2. (b) every National Health Service trust which manages a hospital, establishment or facility in the authority's area;
3. (c) any organisation which represents schools in the authority's area which are grant-maintained schools or grant-maintained special schools;
4. (d) the proprietors of every such school providing primary education in the authority's area which is not so represented under paragraph (c) above;
5. (e) such voluntary organisations as appear to the authority to represent the interests of persons who use or are likely to use services as specified under subsection (1) above;
6. (f) any other persons to whom a grant is made under arrangements under section 1; and
7. (g) such other persons as the Secretary of State may direct.

(5) In drawing up such a strategy, each local authority to which this section applies shall have regard to—

1. (a) the local authority's children's services plan, as specified in paragraph 1 of Schedule 2 to the Children's Act 1989; and
2. (b) the local authority's review of daycare, childminding and out of school provision as specified by section 19 of the Children Act 1989.").

The noble Baroness said: My Lords, the amendment deals with the issue of strategic planning and early years services. There is a view from certain elements of the Government that there is absolutely no need to intervene; that the market place will take care of meeting the needs; that all will be well; that no one will fall through the net; and that there is no need to plan.

In the context of looking at the issue of planning to ensure that all children whose parents wish it do have access to nursery provision, the Government's apparent belief that, beyond the pilot stage authorities, the Private Finance Initiative will make up the capital necessary to expand and meet demand is a cause of some concern. We shall read the Hansard report very carefully to see exactly what the Minister said in that respect.

However, it is certainly the case that there is a need for planning; and, indeed, that has been demonstrated by all the organisations in the pilot schemes in the four areas involved. It is quite obviously the case that, however much the Government may refer to the vouchers in PR terms as giving all four year-olds whose parents wish it access to nursery education, the voucher offers them an entitlement, not a guarantee of a place.

The amendment would be the mechanism for providing such an opportunity. It would impose a new duty on local authorities to produce an early years strategy for all providers of voucher funded nursery education. That would include consultation with all the relevant bodies, as well as with residents of the LEA and organisations representing the interests of parents, and taking such steps as may be practicable to ensure that provision exists for all children within the boundaries.

The amendment contains a much needed reference to the importance of consultation with users of nursery education services and the institutions involved. That would help to ensure that the needs of children with special educational needs are met. There are many children in need who do not come specifically within the legal definition of special educational needs and who do not benefit from being covered by the code of practice. I have in mind children on the at-risk register, those with mild emotional and behavioural difficulties and those from homeless families and asylum-seeking families.

It is also equally vital to ensure that there will be sufficient provision in rural areas where there is a preponderance of families living in poverty and in areas where there are concentrations of children from ethnic minority families where English is the second language. All those situations can be met by the parties coming together and seeking to produce development plans for the area in order to identify any factors which may be inhibiting progress towards that stated goal of the Government; namely, ensuring that all children have access to provision rather than merely access to a voucher which gives them an entitlement if they can find a provision. It is an extremely important issue. I hope that the Minister will be able to support the underlying principles of the amendment. I beg to move.

Lord Henley

My Lords, as I believe I made quite clear earlier, we do not believe it is right that central government, or for that matter local government, should make the various choices that, quite obviously, parents should make. The gentleman in Whitehall, as someone once said,—or, for that matter, the LEA—does not always necessarily know what is best. We have never said that the choice to which we are looking should immediately lead to automatic entitlement. We look to a growth of provision over time. We want a diversity of provision to build up in response to the needs of parents.

However, having said that, nothing in the Bill prevents a local authority putting together an early years strategy for expansion of nursery education. None of this prevents local authorities working closely with the private and voluntary sectors. Any local education authority can put together a development plan, or a strategy, for a particular element of its provision and, in doing so, can consult interested parties.

Of course social services departments and local education authorities have a duty under Section 19 of the Children Act 1989 jointly to conduct and publish a report on a review of day-care provision for children under the age of eight in their area, at least every three years. Such reviews cover services that they run themselves and those in the private and voluntary sectors. Although the legislation as such does not require the review of nursery or primary education facilities, the social services department and the LEA will need to inform themselves about the quantity and availability of such services. Let us be clear that nothing in the voucher scheme in any way affects local authorities duties and responsibilities under the Children Act 1989.

With that background, I hope that there will be some agreement—indeed, we seek that from the noble Baroness—that there is already legislation ensuring that the provision within an area is being looked at, and that there is nothing to prevent an LEA putting together a development plan of any description to inform its own actions and to help parents understand its plans more clearly.

There is no need to require LEAs to draw up a strategy under the provisions of this Bill. In summary, we believe that the manner of the expansion of nursery education should be determined by parental choice, not by LEAs.

Lord Ponsonby of Shulbrede

My Lords, it may be of interest to the Minister to know that it was my noble friend the late Lord Jay who said that the gentlemen in Whitehall sometimes do know best. I believe that the Minister was misquoting him.

Lord Henley

My Lords, I was aware that it was the late Lord Jay who made that remark. I was just transferring it into a form which I believe is certainly more acceptable to most of us; namely, that the gentleman in Whitehall does not necessarily always know best.

Lord Dormand of Easington

My Lords, if a local authority did not undertake the kind of consultation that is included in the amendment, would the Government encourage a local authority to do that in any way in view of the undoubted merit of the scope of the amendment, which covers a wide range of people like, for example, members of health authorities, and so on? In other words, would the Government remain completely neutral on the matter?

Lord Henley

My Lords, with the leave of the House, we are getting somewhat out of order at Report stage. I tried to remind the House—and I advise the noble Lord to read what I said—that there are certain duties on a social services department and on an LEA under the Children Act. They have a duty there, but we do not think it necessary to extend it in the way suggested by the amendment. We believe that it is better to leave the matter to LEAs to do so if they so wish.

Lord Dormand of Easington

My Lords, with great respect, that does not answer my question. In those circumstances, would the Government do anything about it or would they remain neutral?

Lord Henley

My Lords, with respect, that does answer the question. We believe that this is a matter for the LEAs but, as I said, there are certain things that they have a duty to do.

Baroness Farrington of Ribbleton

My Lords, I am often reminded, as a Member of your Lordships' House, that different political gatherings bring together different experiences of life. I have talked to Conservative colleagues, independent colleagues, Liberal Democrat colleagues and Labour colleagues in different parts of the country. The idea of local education authorities, together with voluntary-aided, voluntary-controlled, special-agreement schools, trying to increase the level of provision of nursery education for pre-school children in order to force on parents who do not wish to exercise the choice that provision and give them no alternative is something which is quite remote from the reality of life. Therefore, I find it difficult to understand what is the combined experience of Members of Her Majesty's Government that leads them to view nursery education in that way.

Secondly, there may be a group of parents out there, as yet undiscovered, who do not wish to have nursery education provided by the local education authority. But in that case, as I said on an earlier occasion in our debates in Committee and today on Report, there is absolutely nothing to stop the Government coming up with a scheme which offers parental choice to parents who wish to take a voucher from the Government in order to purchase something else.

But it is not the reality of life in the average community in England, Wales, Scotland or Northern Ireland that parents actually want to turn down something which is in danger of being offered to excess. In the next-steps document the Government aim to offer to all parents who want it for their children nursery education at the age of four. If that aim is to be met, 150,000 new places will have to be found.

In rural communities and in some of the more impoverished, difficult communities, it is only by co-operation and bringing together the community that it is possible to have development plans. Frankly, it is only when the Government are able to look at a collection of such development plans that they will be able to measure whether what they are prepared to say is their aim in election literature is actually being delivered in the country.

It is late and I shall not seek to press this matter to a Division at this stage. But it is a fundamental criticism of the Government's approach underpinning the whole of this Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 [Power to borrow]:

Lord Tope moved Amendment No. 17: Page 3, line 8, at end insert ("as does not fall within the meaning of the "core assets" of the school as prescribed by regulations made under section (Core assets) of the Nursery Education and Grant-Maintained Schools Act 1996.").

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 18. At this stage we move from consideration of the nursery education provisions of the Bill to the provisions relating to grant-maintained schools.

We dealt with the question of core assets very briefly in Committee. I return to it today, and the purpose of the amendment is to try to tease out a little more from the Government about exactly what they propose and to what extent they propose to define the term "core assets".

Since the Committee stage, the Minister has very kindly written to me a very helpful letter with more information on the Government's views. Towards the conclusion of his letter, he says that he very much shares my concern about the importance of protecting publicly-funded assets. I entirely accept that statement. The difference between us is as to how we see the best way to protect them. It is my view and the view of the supporters of the amendment that they are best protected through regulation so that the position is clearly stated and defined. The matter is then clear to the schools, which will want to know what is the position when they first come to consider it, and it will be known also to the funding agencies which will have to consider the applications.

I am sure that the Minister will tell us in a few moments that his view is that the matter is best left to the administrative discretion of the funding agencies and that that should be done on a case-by-case basis, perhaps a basis of merit. That is the difference of view between us. I suspect that it is for those reasons that the Minister will not be able to accept the amendment. If that is the case, it is all the more important that we press for more details of what is to be in the remit letter. In his letter to me the Minister said: This guidance will take the form of a remit letter and it will be based on the consultation paper which we published last October". But he then went on to say: It will also reflect commitments we have made during the passage of the Bill". I hope I may press the Minister to be a little more specific when he replies about exactly which commitments he has in mind that should be included in the remit letter. For instance, he went on to say in his letter to me that when the funding agency has to make decisions about what assets schools should be able to use as collateral it would have, two simple rules of thumb: A. is the asset essential to allow the school to meet statutory requirements? B. is the asset essential to its functioning in other respects? In practice, this means that for school land, there will be a reasonably objective way of determining what is core; schools will not be able to mortgage playing fields that they need to comply with the School Premises Regulations. For school buildings, the starting assumption of the Funding Agency for Schools will be that all buildings are core assets. But it will be open to schools to argue to the Agency, in submitting their loan applications, that particular buildings are not essential to a school's functioning—that the main business of the school could be carried on without them—and that they should therefore be mortgaged". It would be useful to know whether the Minister intends that that is one of the commitments that will be continued and will be put in the remit letter in those terms.

The purpose of the amendment and of the debate tonight is to try to tease out a little more understanding of what is meant by core assets and to understand a little better what is in the remit letter and particularly to press again for an assurance that there will be further consultation with interested bodies on the contents of the remit letter before it is published. I realise that it will be published and of course they will see it then. I know that local authorities and others were consulted in the original consultation paper. They stated in response to that consultation paper: It will also be necessary to have a much clearer definition of core assets if schools and FAS are to be able to form a reasonable idea of what is allowable. This might, for example, include specific reference to whatever guidance the Department issues on teaching areas and particular subject requirements in lieu of statutory minimum area requirements following the proposed revision of the School Premises Regulations. Even so, we are not confident how well placed FAS would be to reach judgement from a distance about what is core and what is surplus. A dispassionate and fair assessment will be important". That is what was said in response to the consultation paper. The final sentence of that response remains central to this issue. If the FAS has no detailed guidance to follow, it will be even more difficult to ensure that it has reached the right decision. Better safeguards need to be put in place. We believe those should be on the face of the Bill; the Minister does not, but I hope he will be more specific about what exactly he intends to include in the remit letter. I beg to move.

Baroness Farrington of Ribbleton

My Lords, we support this amendment.

9.15 p.m.

Lord Henley

My Lords, I congratulate the noble Baroness on the wonderful brevity of her speech. That is something that I pass on as guidelines to her noble friend Lord Morris of Castle Morris. I also offer my thanks—I do not know whether it is thanks or what it is—or perhaps congratulations to the noble Lord, Lord Tope, that he has managed to discuss this amendment at something nearer to prime time, even if it is not prime time, than we did at the previous stage of this Bill. I am glad that he received the copy of my letter, which I think I copied to the noble Lord, Lord Moms of Castle Morris. I hope that that letter was of some use.

We in the Government are fully committed to ensuring that essential school assets are protected. It is equally clear that the noble Lord, Lord Tope—and the noble Baroness, Lady Farrington, in her admirable speech—are equally committed to that aim. For that we are grateful. I think where we differ from one another is in how that common aim should be achieved. As I said at Committee stage and in that subsequent letter to the noble Lord, I am not convinced that his suggestion to put every detail in regulations is the right way of going about things.

Under Clause 6 governors may only offer assets as security if they have first obtained the written consent of the Secretary of State. When my right honourable friend the Secretary of State delegates this consent-giving function to the Funding Agency for Schools, as provided for in paragraph 10 of Schedule 3, she will set out in the remit letter referred to how she expects the borrowing regime to be operated. Under that guidance schools will not normally be allowed to offer as collateral—I hope that this will help the noble Lord—assets needed to allow the school to meet statutory requirements and assets essential to a school's functioning in other respects. In practical terms, this means that for school land, schools will not be able to mortgage playing fields that they need to comply with the School Premises Regulations 1996.

For school buildings, the starting assumption of the Funding Agency for Schools will be that all buildings are core assets. But it will be open to schools to argue to the agency, in submitting their loan applications, that particular buildings are not essential to a school's functioning and that they should therefore be mortgaged.

There is nothing unusual in that approach. There are parallels to Clause 6 where administrative safeguards have been effectively applied without recourse to regulations.

Under Sections 19(4)(c) and 19(5) of the Further and Higher Education Act 1992 further education corporations may borrow and charge their land or other property with the consent of the Further Education Funding Council. The funding council's safeguards are not set out in the statute.

Another parallel is provided in the case of the Education Assets Board. Under paragraph 2(2) of Schedule 8 to the Education Reform Act 1988—I am sure that all noble Lords remember it intimately—the board may borrow money subject to the approval of the Secretary of State. Once again, the safeguards are administrative.

We intend rather that the funding agency should look at applications for consent on a case by case basis. The onus will be on schools to satisfy the agency that particular assets are not likely to be essential to the school's functioning. In deciding whether particular assets should be deemed "core" or "non-core", the agency will want to take into account a variety of complex factors, including future projections of demand and the adequacy of the premises for the purposes of the national curriculum.

These kind of decisions are best left to administrative discretion in the light of very specific local circumstances.

I hope that I have satisfied the noble Lord and that he will not think it necessary to press his amendment on this occasion, as I have dealt with his concerns. I hope that he will feel able to withdraw the amendment.

Lord Tope

My Lords, before the Minister sits down, perhaps I may ask whether he is willing to consult with interested bodies on the contents of the remit letter and its status before it is published. Perhaps he will deal with that point.

Lord Henley

My Lords, we consulted widely with local authority associations last year. I suspect that whether it is necessary to consult further is another matter. I should not wish to give an assurance to the noble Lord that we would do so. There is a considerable amount of consultation, if I may so put it, flying around at present. I have never been in a department that has consulted more than my current department. Consultation was not indulged in to a great extent by some of my previous departments.

However, there has to be a limit to consultation. All I can say is that I shall consider the matter. I can assure the noble Lord that those bodies were consulted fully last year.

Lord Tope

My Lords, I am aware that the interested bodies were consulted last year on the consultation paper. I quoted their response at some length in order to have it on the record. I congratulate the Minister on being in a department which is apparently blazing a trail on consultation. Not all of us had noted that attribute of the department. Nevertheless, it is one that we welcome. Perhaps I may remind him that in his letter to me he stated that, [The remit letter] will also reflect commitments we have made during the passage of the Bill". In other words, the Minister stated that the remit letter will contain matters that were not in the consultation paper because the Bill had not started its course there. I am sure that he recognises the crucial importance of the remit letter. As the proposals are to be extended from those upon which there was consultation, it might be appropriate not to engage in a lengthy consultation process but at least to give interested parties the opportunity to comment on the proposals before they are published and therefore presumably cast in stone.

As to the best way of protecting the public assets, we have to agree to disagree. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 18 not moved.]

Clause 10 [Citation, interpretation, commencement and extent]:

[Amendment No. 19 not moved.]

Schedule 1 [Nursery education grants: inspections etc.]:

Lord Ponsonby of Shulbrede moved Amendment No. 20: Page 5, line 33, after ("education") insert ("with particular reference to—

1. (i) qualifications and training of staff;
2. (ii) staff-child ratios; and
3. (iii) space regulations and guidance").

The noble Lord said: My Lords, the purpose of the amendment is to develop a better and more robust inspection scheme which makes specific reference to key indicators of quality in provision. My noble friend Lord Morris moved the amendment at Committee stage and withdrew it with the promise that, like General MacArthur in the Pacific, he would return. I am afraid that General MacArthur has not returned but your Lordships have an infantryman instead.

The amendment focuses on the quality indicators of staff qualifications, staff/child ratios and space regulations. It does no more than require, as one of his functions, the chief inspector to keep the Secretary of State informed about those important matters. It is the most modest of amendments.

In his response to the arguments put at Committee stage, the noble Lord, Lord Henley, stated: We believe that it is unnecessary to prescribe the scope of the chief inspector's duty to report to the Secretary of State, or the scope of the inspections, in any greater detail than that already provided for in the Bill".—[Official Report, 17/6/96; col. 148.] The noble Lord went on to claim that: The Bill provides for that in some detail and in a manner very similar to other bits of legislation which have been before the House relating to inspectors". In that case, how is it that in the Education (Schools) Act 1992, Section 2(1)(c), one of the functions of the chief inspector is to keep the Secretary of State informed about: whether the financial resources made available to those schools are managed efficiently"?

It is clear that issues of efficiency are covered in other relevant and comparable legislation. Issues of efficiency relate clearly to the thrust of the amendment. In management terms, the qualifications and training of staff, staff/child ratios and the adherence to space regulations and guidance are not only indicators of the quality of education per se but, taken together, they balance out and demonstrate how efficiently the nursery setting is operating. These are key inputs into the system, and reporting on them, together with a requirement to keep the Secretary of State informed about quality and standards, provides a good indication of value for money and efficiency.

Let me describe another example and cite the Overview Report of the Inspection of Local Authority Day Centres for Children under Eight (1995), issued by the Social Services Inspectorate for the Department of Health. It provides a list of 14 standards against which provision may be judged. Standard 9 relates to physical environment and standards 11 and 12 respectively relate to staff competence and training. Here is further and ample evidence, derived from a different source, that inspection of those aspects is a prime need for the service. Interestingly, and further strengthening the argument for reporting in a summary form on the issues, the social services inspectors commented comprehensively in the report on training and qualifications. They stated: Inspectors were surprised that the use of NVQ training was not well developed despite the standards for Level 2 and 3 of the Childcare and Education NVQ being specifically developed for staff in day centres for under eights".

At Committee stage my noble friend Lord Morris argued for the clear identification of the focus for the chief inspector, citing relevant research studies. In particular, in reference to the importance of qualifications, he quoted from the Audit Commission's report Counting to Five by referring to its conclusions on the relationship between high quality settings and the feature of staff trained specifically for working with young children.

Earlier this evening, on Amendment No. 8 we debated fully the merits of lowering the staff/pupil ratios. It is, I believe, right that the Secretary of State should be informed of changes made in that area. The benefits of an inspection regime which aims to report and keep the Secretary of State informed as to the way that the scheme is operating is far from being a radical suggestion. I beg to move.

Baroness Thomas of Walliswood

My Lords, in addition to the matters raised by the noble Lord, Lord Ponsonby, the amendment also has to do with recording and measuring what happens in nursery education if or when the nursery voucher scheme is introduced. The amendment directs the chief inspector to keep the Secretary of State informed about, inter alia, the qualifications and training of staff, child/staff ratios and space/child ratios in provider organisations.

We have argued in this Chamber at length on two occasions about all these matters. There are real doubts as to what effect the Bill will have in these respects. There are doubts as to whether providers will be able to fund improving qualifications for their staff; as to whether or not the competitive situation will result in worsening staff/pupil ratios; and as to the likelihood or not of competition for pupils and for the funding they bring with them leading to a tendency to over-crowd classrooms.

Argument in this House and outside is all very well. But one of the points of this amendment is that the inspector should include in his reports data on these important matters so that all of us, and in particular the Government, may have the data available as a basis for rational decision-making and as a means of checking that the policies are working well.

9.30 p.m.

Lord Henley

My Lords, the noble Lord, Lord Ponsonby, quoted the remarks of General MacArthur, saying that he would return. The noble Lord, Lord Morris, did not have to return. Sadly, I do have to return on these occasions.

As I believe I have explained on other occasions, it is unnecessary to prescribe the precise scope of the chief inspector's duty to report to the Secretary of State, or the scope of inspections, in any greater detail than the Bill already does. Again, I refer the noble Lord to my earlier remarks about the 1992 Act and the occasional need to keep a degree of consistency, which his noble friend does not always like.

Paragraph 3 of Schedule 1, relating to the inspection, sets out the scope of the chief inspector's report. It is very broadly drafted. In the light of that, the chief inspector has developed a framework of inspection which incorporates all these issues in assessing whether the SCAA desirable learning outcomes are likely to be achieved. The provision for the inspector and chief inspector to consider the quality and standards of funded nursery education embraces the standard and suitability of teaching alongside other aspects of quality. I hope, therefore, that the noble Lord will accept that, even if like General MacArthur he wished to return to these matters, on this occasion his amendment is not necessary.

Lord Ponsonby of Shulbrede

My Lords, I am sorry that the noble Lord did not feel able to indicate that at least he would expect the chief inspector to include in his report the sort of information that is outlined in this amendment. I understand that the Minister might not want that on the face of the Bill. However, this sort of general information is a way of objectively monitoring the progress of nursery education in the years to come. I am sorry that the noble Lord did not feel moved at least to say so in reply to my amendment.

Nevertheless, I do not wish to pursue a battle at this stage, even though I am a member of the infantry. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 21 and 22 not moved.]

Baroness Thomas of Walliswood moved Amendment No. 23: Page 6, line 18, leave out ("with others") and insert ("with another member or other members of the inspectorate").

The noble Baroness said: My Lords, with the leave of the House, in moving this amendment I shall also speak to Amendment No. 24. I hope that that will lead to a slight shortening of our time in the House.

Both amendments speak to the quality and impartiality of the inspection process. Amendment No. 23 would prevent the chief inspector delegating his powers to other organisations. It is in response to government suggestions that a number of umbrella organisations, as they are called, might be suitable as contracted inspectors. One suggestion is that the Pre-School Learning Alliance would be a suitable body. I yield to nobody in my admiration for the work of the PLA, but I do not believe that it would be the best body to ensure an independent, professional and disinterested group of inspectors.

All providers should be inspected under the same rules, against equitable criteria. Some progress towards that has been made during the consultation period of the DfEE's quality assurance procedures. That should not be undermined by the chief inspector being given powers to delegate responsibility to any organisation he chooses. Our amendment would prevent a patchwork of organisations emerging and would keep accountability firmly within the realms of Ofsted.

Amendment No. 24 would ensure that all inspectors have experience of teaching the age group for which nursery education is provided. It may be argued that such a specific requirement as the amendment demands is not put on registered inspectors under the 1992 Act. The 1992 Act specifies the non-teaching experience of lay-inspectors, and by implication all other registered inspectors must have teaching experience. The judgments of inspection teams under the framework are required to be corporate and therefore always include the views of an inspector with teaching experience. However, under this scheme, the arrangements are that a single inspector will be making the judgments. How much more informed and appropriate those judgments would be if the inspectors had experience of teaching four year-old children. We note that the credibility, even of Ofsted inspectors, can be undermined if inspectors have no experience of the relevant age group. We maintain that the best inspections do include a real understanding of the process being inspected.

I would remind the Minister that earlier today he said that inspectors would monitor language skills and that those providers who fell short in satisfying the outcomes in the matter of language skills would be criticised. Yet language teaching is a subtle skill best appreciated by those who have practised it.

Therefore we should take account of these considerations and ensure that inspectors have experience of teaching the particular age group that we are concerned with.

Baroness Farrington of Ribbleton

My Lords, I speak to Amendment No. 23 and in support of Amendment No. 24. This amendment does not prevent the chief inspector from delegation within the inspectorate, and so does allow for arrangements to be made with another member or members of the inspectorate. But, as the noble Baroness, Lady Thomas, said, it is important that there is a consistency of standards and that the quality of experience is such as to give everyone confidence in the process.

I did not think, even at this hour, that I would be standing at the Dispatch Box referring to comments made earlier by the noble Baroness, Lady Young, in a rather defensive approach to criticism, and that I would be praying in aid the chief inspector, Mr. Woodhead. But at a conference earlier this year the chief inspector said he was not complacent regarding the consistency of inspectors' judgments. He hoped that safeguards would be introduced to redress some of the problems associated with inconsistency of human judgments. This is particularly important in the circumstances of the proposed inspections of the nursery providers. That is not meant to cast aspersions, as the interpretation from the noble Baroness, Lady Young, appeared to imply in an earlier debate. It is extremely important that we establish criteria that will lead to common judgments, as the chief inspector said, and that there should be increased monitoring and training of inspectors and additional monitoring of the practice of lead inspectors.

This is a fraught area. Many people have learnt many skills in the nurturing and education of young children. Often those skills have been developed to a high level, but have never been tested in terms of any formal judgment in relation to the ability of individuals to demonstrate that they have acquired a degree of professional expertise. Our query is not whether those skills exist—they undoubtedly do; we question the assumption that they always exist and that there is no need to come up with imaginative ways of validating prior learning experience.

We agree that there are many people involved in the educational process; we agree that they could be offered opportunities to test that knowledge and skill. But if at the end of the day those involved—the parents and the teaching and non-teaching staff—are to have confidence, we must ensure that the quality of those given the task of inspection is accepted by all concerned.

Baroness David

My Lords, I put my name to Amendment No. 24 and I support it. I should like to hear from the Minister a little more about the experience that the new inspectors will have.

I was surprised and shocked when I met somebody at the station about three weeks ago who had been a deputy chief education officer of Cambridgeshire. He is now a consultant, of course, like so many others. I asked him what he was doing in Cambridge that day. He said, "I am going to train some new inspectors for the nursery Bill". I replied that I was not too happy about the Bill. He said, "I am pleased. We are going to make a lot of money out of it".

I should like to know who the people are who are being trained. Are they teachers with experience of teaching nursery children? How many new ones will be appointed to supply the need? I hope that the Minister can give us more information about who and what the inspectors are, what their experience has been and how the system will work.

Lord Henley

My Lords, I hope that I can provide a degree of reassurance to all three noble Baronesses on Amendments Nos. 23 and 24. I thank the noble Baroness, Lady Thomas of Walliswood, for grouping the amendments together and thereby assisting the process of this evening's debate.

In relation to Amendment No. 23, inspecting provision in the private and voluntary sectors will involve considerable organisation. That is a purely administrative task; no educational judgments are involved. The Bill currently allows the chief inspector to delegate the organisation of inspections if he considers that to be appropriate. The intention is that an agent or agents will arrange for other organisations to act as inspection contractors. The inspection contractors will take responsibility for scheduling groups of inspections in a specific area, including the letting of contracts with individual registered nursery education inspectors.

I must emphasise that these are purely administrative functions which have no link with judgments about educational quality. Those judgments will be made by registered nursery education inspectors alone. I can see no reason why the administrative functions cannot be carried out effectively by others, regardless of whether they are members of the inspectorate. I hope that that deals with the concern expressed in relation to the Pre-School Learning Alliance. Ofsted has experience of running the system of inspecting maintained schools. It will draw on that experience to monitor the work of the agent and inspection contractors. Against that background, Amendment No. 23 adds nothing to what Ofsted is already doing or has planned.

Turning to Amendment No. 24, inspecting provision in the private and voluntary sectors must be undertaken by registered nursery education inspectors. That will be a new group of people who will be recruited, trained, assessed and registered by Ofsted.

We spoke earlier of 4,000 possible new inspectors. However, I made it clear that that figure was based on the idea that one inspector was doing no more than one inspection each term. The figure may be much lower if they could do more inspections than that. Ofsted is already preparing for the inspections in Phases 1 and 2.

I should like to say just a little about the experience of training on which the noble Baroness, Lady David, pressed me regarding the inspectors. They will need to possess a recognised qualification with a significant element of early years education. They must also have recent and relevant experience of nursery education, such as teaching four year-olds, managing nursery education provision for four year-olds and inspecting or advisory work. If the references taken up are fully supportive, they will be invited to attend a course of training and assessment. Taken together, these three factors give a sound assurance that the inspectors will have appropriate backgrounds to enable them to do their job.

But it does not stop there. The courses that we have designed are specifically for potential nursery education inspectors and not just for inspectors generally. Crucially, they include an assessment element which potential inspectors must pass before they are registered. The assessment will involve considering a case study, video material and making judgments about the educational programme and quality of teaching.

Against that background and with those assurances of what Ofsted is planning, I hope that all three noble Baronesses will accept that Amendment No. 24 is—dare I say it because I have used the word overmuch of late—"unnecessary" to put on the face of the Bill. I hope that the assurances that I have given will be sufficient to satisfy the three noble Baronesses.

9.45 p.m.

Baroness Farrington of Ribbleton

My Lords, before the Minister sits down, I am tempted to ask him whether there is any truth in the accounts in the press that the sort of umbrella organisation for administering the system of inspection is Group 4. Do the Government genuinely have that in mind? Perhaps I may ask a totally unrelated question. Can the Minister say whether any assessments have been made about any possible drop out rate as regards the number of people recruited at the beginning?

Lord Henley

My Lords, I cannot answer the second question. As regards the first, I do not frequently comment on some of the allegations that we see in the press. We are giving a power to the chief inspector to delegate these matters. They are matters for him. As I have stressed, we are talking about administrative functions. We are not looking at the functions relating to the actual judgments about educational quality. I hope that the assurances I have given on the appropriate recruitment, training and assessment of the inspectors will ensure that we have the right sort of registered nursery education inspectors.

Baroness Thomas of Walliswood

My Lords, I thank the Minister for his reply. I stand corrected as to the import of Amendment No. 23 and the clause to which it refers. Nevertheless, I am a little distressed to gather from the Minister's remarks that there might be three separate levels of administration involved. I hope that we can get rid of at least one of them. I have some concerns, but no doubt as time goes by we shall see whether they are well based or not, as to who will be doing all the organising.

As regards Amendment No. 24, I am genuinely grateful for the information which the Minister has given us. Again, it may not satisfy every requirement that we wished to put on the face of the Bill, but I believe that we have learned something useful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 24 not moved.]

Lord Morris of Castle Morris moved Amendment No. 25: Page 8, line 23, at end insert—

("Quality

.—(1) A registered nursery inspector may, where he has conducted an inspection in accordance with this Schedule and considers that the education inspected was not of a satisfactory quality and standard, recommend that the payment or grant to the provider concerned should cease or be suspended.

(2) The Secretary of State shall, where he receives a recommendation to which sub-paragraph (1) above applies, as soon as practicable withdraw arrangements for the making of grants in respect of that provider for such period as he considers necessary.").

The noble Lord said: My Lords, the purpose of this amendment is to give a registered nursery inspector a power to recommend that the payment of grant to a provider should cease or be suspended where, after inspecting the provision concerned, the inspector believes that it was not of a satisfactory quality or standard. It pinpoints the difficulty in the Bill under which remarkably little seems to flow from the finding that quality in an institution is below par. Very little seems to flow from that. On the contrary, we believe that heads should roll. I beg to move.

Lord Henley

My Lords, I regret that I shall not be able to respond to the noble Lord in quite as speedy a fashion as he moved his amendment. I believe that Amendment No. 25 goes slightly too far in allowing the mere uncorroborated evidence of one inspector to, as he puts it, roll ahead. I believe that the provisions that we have put in place would be more suitable and I should like briefly to explain what we are intending.

If, after the first inspection, the registered nursery education inspector judges that there are weaknesses in the educational provision, but there is potential for improvement, he will recommend that the provider should be given one to two years for improvement before reinspection. And, if after a second inspection, the inspector judges that improvement is still required, initial validation will normally be withdrawn and the provider will no longer be eligible to redeem vouchers. We envisage that it will only be in exceptional cases, where the inspector judges that there is no potential for improvement, that the inspector recommends that initial validation should be immediately withdrawn.

I should add that before validation is withdrawn, Ofsted will visit the provider to corroborate the judgment of the registered nursery education inspector. That will take place as speedily as possible. I believe that that corroboration will be very important—I am sure that the noble Lord agrees—as it is an additional safeguard, as the recommendation to withdraw grant should not rest with the inspector alone.

Ofsted will then make a recommendation to the Secretary of State. It is appropriate that the final decision should lie here. The Secretary of State will bear in mind the individual circumstances and the needs of the children in arriving at her decision. She will consider each case on its merits in deciding how quickly to discontinue voucher funding, but funding could be discontinued at the end of a term.

The amendment refers to the payment of grant being "suspended". I do not think the use of the word "suspend" is appropriate. Providers will either be in receipt of grant or they will not. I should explain that we do not normally propose to suspend funding in any circumstances, particularly in the context of doubts about the educational provision on offer. As The Next Steps document explains, however, nursery education providers who have had their validation withdrawn will be free to reapply for validation, but that would be granted only after inspection and if the provider were found to be providing appropriate education. I hope that that satisfies the noble Lord.

Lord Morris of Castle Morris

My Lords, I am grateful to the Minister for that explanation. What he has said makes very good sense and I found it helpful, especially with regard to Ofsted following up a report of an unsatisfactory provider, and what he said about the word "suspension", which suggests hanging rather than the decapitation of which I was in favour. I am relieved by what the Minister has said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Farrington of Ribbleton moved Amendment No. 26: Page 9, line 3, at end insert—

("Action Plans

.—(1) Where an inspection of funded nursery education has been conducted under paragraph 6 and a report has been made under paragraph 13, the authority or other person responsible for providing the funded nursery education shall, within such a period as may be prescribed but not exceeding 3 months, prepare a written statement of action which they propose to take in the light of the report.

(2) Where a statement has been prepared under sub-paragraph (1), the authority or other person responsible shall without delay send copies of it to—

1. (a) the Chief Inspector,
2. (b) the Secretary of State, and
3. (c) the local authority in which the funded nursery education is situated.").

The noble Baroness said: My Lords, in moving Amendment No. 26, I should like to speak also to Amendments Nos. 27 and 28. Amendment No. 26 deals with the requirement for action plans to be drawn up by grant-receiving institutions following inspections. The best argument for this amendment was made by the Minister in another place during Committee stage there. Mr. Squire said: I agree that it is important that all providers prepare action plans, in the same way as schools do under the 1992 Act to deal with key issues highlighted by the inspector. That should apply even where standards are high, so as to ensure that those high standards are maintained".—[Official Report, Commons, Standing Committee F, 20/2/96; col. 361.] However, this Bill contains no such requirement.

It is clearly evident that where an inspection has taken place, it should be the responsibility of any nursery education provider to devise and write an action plan. That would be a response in writing to the main findings and the key issues for action, derived from the inspection report. That process is recognised good practice, but it also provides levels of accountability for the use of public funds. It would inform parents and carers of how seriously the nursery education provider intends to address any weaknesses and to build on any strengths that emerge from the inspection.

The production of an action plan within a set time period, stating what will be done, will, if managed carefully, become an important process by which the nursery education provider can improve the quality of the provision. It will enable the provider to gain assistance from specialists and advisers as to the most effective means of addressing any weaknesses and improving performance. The action plan, if prepared in a responsible and efficient way, will also serve to instil a sense of achievement as issues are addressed and resolved over a period of time.

In forming a general picture of both individual providers and what is happening in the system, subsequent inspections by social services inspectors and registration officers can draw on and form a benchmark for the way in which such action plans can be developed and judged. The Government need to explain why, as with other amendments to this part of the Bill, they rely on the Opposition Benches to hold up to them the precedents contained in their own legislation and why a light touch inspection regime is preferable to one containing proper provision for follow-up for our very youngest children.

Amendment No. 27 replicates the provisions of the 1992 Act. Under this provision inspectors would benefit from meetings with parents prior to inspections in order to gain valuable information. This is in keeping with the practice in Sections 9 and 13 inspections provided in accordance with the Education (Schools) Act 1992. It would be helpful for inspectors to hold such meetings, report their findings and for parents to understand the result of the process of inspection. We believe that this is part of the essential strategy of encouraging a partnership with parents to support the child's learning. Often nurseries already have a strong partnership. We would like to see that good practice extended.

Amendment No. 28 clarifies the offence of obstructing an inspector. It is important that nursery education inspectors have the same powers as registered inspectors of schools. The need for the amendment underlines the poorly structured way in which the inspections schedule has been drawn up. This is surprising in view of the precedent provided by the 1992 Act. Further credence is given to the need for this amendment by virtue of the fact that the Children Act 1989 gives the person carrying out the inspection power to examine the premises, the children being looked at, the arrangements for their welfare and so on.

The managers of new private nursery voucher provision are likely to be less familiar with systems of public accountability and the need for transparent and scrupulous probity than those who have had longer experience in dealing with public sector funding. Therefore, it is possible that occasionally there will be a greater risk that they will react in adverse ways to visits from nursery-registered inspectors. There is a risk of fraud and the illegal use of vouchers. If those circumstances arise they may give rise to obstructive behaviour.

At the end of the day, to guard the interests of the children is our prime concern, but we must also ensure that there is the greatest possible likelihood of dealing with actions that hinder and impede lawful inspections and access to premises by registered inspectors. For that reason, I beg to move.

10 p.m.

Baroness Thomas of Walliswood

My Lords, we support the amendments. As regards Amendment No. 26, as a school governor for many years I can confirm the extremely beneficial effect of having to respond with a plan to any criticisms or commendations which an Ofsted inspection has left in its wake. That exercise not only improves the education provided for the children in the school but also brings together governors and teachers in planning for the school's further progress.

Amendment No. 27 deals with the concerns expressed at an earlier sitting about the need to involve parents in the education of their children, in particular of their young children, and it is the only place where those concerns appear. It would be of enormous benefit if parents and teachers together could meet the inspector so that each could understand the other better and so that parents could understand the process which is going on in the nursery schools to which they send their children.

Lord Henley

My Lords, I hope that yet again I can demonstrate why the amendments are unnecessary.

In publishing our proposals for inspection in The Next-Steps document we made clear that all providers covered by the grant arrangements would need to prepare an action plan following the first inspection or any subsequent inspections. We shall give this effect by making it a requirement of grant. Perhaps I may explain why we have chosen that method rather than to put the requirement on the face of the Bill. In the case of maintained schools, securing compliance with such a requirement has to be by means of statute; there is no other way. For the private and voluntary sectors, however, the grant mechanism provides a highly effective way of ensuring that action plans (or any other requirement) are fulfilled.

Bearing that in mind, it will also be a requirement of grant that participating institutions submit to the inspections provided for in the Bill. That will obviously include giving inspectors access to the premises and any documents they require and not obstructing inspectors. It is unnecessary to replicate the offence which applies to school inspections under the 1992 Act.

Sub-paragraph (a) of Amendment No. 27 would require managers and governing bodies to inform parents when an inspection is due to take place. I agree that it is very important to involve parents in their children's education. Ofsted will therefore arrange for inspectors to send providers a notice to display informing parents of the date of an inspection. However, I do not believe that this type of detail needs to be prescribed on the face of the Bill.

Furthermore, I am not attracted to sub-paragraph (b) of Amendment No. 27. The 1992 Act requires inspectors of schools to meet parents before the inspection. But a nursery education inspector will typically spend one day at a nursery education provider, compared to three days for a proper school inspection. For practical reasons, it would therefore be difficult to schedule a meeting with parents. Moreover, I believe that the amendment would be far too heavy handed for many small nursery education providers. We do not want to cause undue disruption.

I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Farrington of Ribbleton

My Lords, the simple question is: why not replicate the 1992 Act? The Minister is merely arguing that grant is the sanction of the private sector and that therefore the provision does not need to be on the face of the Bill. That leaves a whole lot of variable pre-five and post-five systems in place. In the majority of cases we are dealing with the same institution, which is the local school. It does not make sense to legislate in this way in respect of those institutions.

I believe that the Government made our case for us in earlier debates. The Minister replied that because the time given to inspection is short, it is not possible to meet the parents. I should have thought that if the time is short, by the Minister's own admission in replying to the debate on this matter, then the question is whether it is more important to have an opportunity to have a meeting with the parents. However, at this stage I shall read most carefully the Minister's words in Hansard. With your Lordships' leave, I seek to withdraw Amendment No. 26.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 to 29 not moved.]

Schedule 2 [Nursery education grants: disclosure of information]:

Lord Ponsonby of Shulbrede moved Amendment No. 30: Page 9, line 36, at end insert ("or (b) other information which would assist with the making of a grant under this Act in respect of a child about whose parent or guardian information falling within sub-paragraph (a) is not available, and information falling within this sub-paragraph shall for the purposes of this Schedule be treated as though it fell within that sub-paragraph").

The noble Lord said: My Lords, the purpose of this amendment is to broaden the information available to enable those not on the DSS database to be eligible to receive a voucher. The declared purpose of this Bill is to provide nursery education for all four year-olds. This amendment is intended to highlight the fact that there are some families who are not on the Child Benefit Agency register and they will not receive a letter asking them to apply for a voucher. They will, therefore, be excluded from the scheme unless other information can be made available to include them.

These families include those who are in temporary accommodation, those who have no permanent home, travellers, refugees and asylum seekers. Their children are often vulnerable and most in need of a nursery place. I believe it is discriminatory not to include them in the scheme. Parents who have moved house who may not have informed the Child Benefit Agency of their new address will also lose out. Four year-olds whose parents have split up are often living with other relatives or foster parents; they will not have the opportunity for a nursery place if the information does not go to the right address.

If, as has happened in Phase 1, the onus is on the provider to find these families and to provide them with forms, as well as to help them fill them in, then this requires considerable additional time, which will be costly. Some providers, who may currently have a high percentage of families not on the Child Benefit Agency register, may be forced to close because of insufficient funding. The vouchers should be produced at the beginning of the term if grants are to be received in time to pay staff, so any delays are crucial.

Some parents who did not get a letter in Phase 1 had to ring several times before Capita, the private company administering the vouchers, would believe that they were eligible. Some parents are not able to do this.

There have been discrepancies in the figures being produced by the DfEE and the LEAs in Phase 1. This is likely to reflect the fact that the DfEE does not have figures about children not on the Child Benefit Agency register.

In the introduction to the DfEE document The Next Steps, explaining the voucher scheme, it says: Parents will be able to exchange vouchers for up to three terms of nursery education for their child… The scheme will provide choice for parents, diversity of provision and high standards". For some parents it may provide nothing unless this amendment is passed. I beg to move.

Lord Henley

My Lords, I am most grateful to the noble Lord for explaining what he saw as the purpose of this amendment. It also has an effect that I suspect might be unintended. The effect would be to extend the power of the Secretary of State to supply relevant information beyond that prescribed by regulations made under sub-paragraph (2) of paragraph 1. I would regard that extension of powers, which I am sure is no doubt unintended, as undesirable.

As regards the protection afforded to confidential information which, I am sure, is the prime concern of the noble Lord, clearly we are all concerned to protect personal information. We must ensure that proper controls are in place. However, the unauthorised disclosure of information supplied by parents, rather than by the Child Benefit Centre, will, in practice, be prohibited by the Data Protection Act once it constitutes computer data. It is unnecessary to extend Schedule 2 in the way proposed. As I noted before, the amendment as tabled has some undesirable effects.

I should also tell the noble Lord that there is no restriction on the information that anyone can provide to the voucher agency. That information would then be protected by the Data Protection Act. I hope that I have understood the noble Lord. I also hope that he will take care to read what I have said in Hansard and that he will recognise that the amendment contains—I am sure that it was unintentional—an attempt to extend the powers which, as I made clear, is undesirable.

Lord Ponsonby of Shulbrede

My Lords, I thank the Minister for his response to my amendment. He is right to say that it was not the intention of the amendment to extend the power of regulations. As I believe I said, it was merely a vehicle to raise an issue; namely, that some families—and I gave examples of them—who are not currently on the lists of the Child Benefit Agency may not be contacted. I also went on to say that I believe that the onus should be on the provider, as in Phase 1, to contact those families.

However, I am happy to withdraw the amendment and look at the drafting issues raised by the Minister. Nevertheless, I should just like to comment on the fact that the noble Lord constantly refers to what he cites as excellent figures in the London Borough of Wandsworth, which has a 95 per cent. take-up ratio. That means that one child in 20 is completely unaccounted for and, so far as I know, no one in Wandsworth or the DfEE, or, indeed, the Child Benefit Agency, knows what has happened to that child. In my view, that is simply not good enough. The purpose of the amendment was to raise the issue of that small minority of children who may slip through the gap through no fault of their own. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morris of Castle Morris moved Amendment No. 31: Page 10, line 30, at end insert— (". The Secretary of State shall within three months of the coming into effect of this Schedule and annually thereafter lay before Parliament a report setting out the extent and manner of operation of safeguards as to the unauthorised disclosure of information mentioned in this Schedule together with his assessment of the effectiveness of those safeguards.").

The noble Lord said: My Lords, there are major concerns about the use of public money to fund a private company to administer the scheme. The total costs have not been disclosed yet. More serious still are concerns about how the company will use, and who else will see, the information provided by the Child Benefit Agency. I am not properly reassured in that respect. Indeed, we already have reports indicating that some parents have been asked a number of personal questions and have been told to provide a rent book, a birth certificate or other evidence about who they are and where they live.

I gather that the company itself is essentially a debt collecting agency. I should like to quote briefly from its 1992 annual report, which says: Capita has included its innovative telephone based 'collection management' system which has been developed to provide organisations with an efficient means of reaching people who owe them money … Once connected, Capita's callers are guided by a carefully planned script … on line data entry is available to log the results of each call. From each call Capita is able to determine the reason for non-payment … pass on up to date information back to the authority for further action. Capita has contacted households without a valid TV licence".

That extract comes from the 1992 report of Capita Group plc. I find it a little disturbing. I should like the Minister to explain briefly and succinctly what safeguards will be in place to protect parents whose information will be lodged with Capita. I beg to move.

Lord Henley

My Lords, I reject the implied criticism of Capita made by the noble Lord. We are very satisfied with the work that the company has done. As one might expect, a few minor teething problems which arose in the pilot have been quickly dealt with. Indeed, providers, parents and the Phase 1 LEAs have all commented favourably on the quality of the service offered to them by Capita.

But having said that, we, like the noble Lord, are concerned to maintain the confidentiality of social security information. It is essential that we exercise a great deal of care over how this information is used and who has access to it. That is why Schedule 2 to the Bill makes it an offence to breach that confidentiality—and sets out the penalties that would be incurred by anyone who did so.

Similar restrictions apply to a wider range of information under social security legislation, but that makes no provision for annual reports about safeguards employed to ensure confidentiality. And I am not aware of any perceived need for a similar parliamentary report in that context. In my view it would be inconsistent and—dare I say it?—unnecessary to introduce such a provision here.

We will require the contractor appointed for phase two of the scheme to take effective measures to ensure the confidentiality of personal information just as we have in phase one. These measures will be set out in the contract for phase two and we shall ensure that a copy is placed in the Library and in the Library of another place. I am sure that the noble Lord will read it and take appropriate comfort from it. Therefore, I hope that I can persuade the noble Lord that the amendment is unnecessary.

10.15 p.m.

Lord Morris of Castle Morris

My Lords, I am grateful to the Minister for his reassurances. He need not find it necessary to apologise for his use of the word "unnecessary", his apology for which I find quite unnecessary.

I am not wholly persuaded by his arguments about this. I hope that he will watch Capita most carefully in the coming weeks. I shall certainly try to learn more about that interesting plc and I may well wish to return to this matter on Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3 [Consequential amendments]:

The Lord Bishop of Ripon moved Amendment No. 32: Page 11, line 47, at end insert—

("The Education (Schools) Act 1992 (c.38)

.In Section 13 of the Education (Schools) Act 1992, at the end of subsection (7) insert "including any pupils receiving nursery education under arrangements made under the Nursery Education and Grant-Maintained Schools Act 1996".

. In Section 18(1) of that Act, after the definition of "maintained school" insert—

" "nursery education" has the meaning given in section 1(2) of the Nursery Education and Grant-Maintained Schools Act 1996;".").

The right reverend Prelate said: My Lords, we come with a sense of relief to the final amendment to be moved to this Bill on Report. I hope that I shall not detain your Lordships long.

We have been talking about inspection by the new nursery inspectors. It is my understanding that, when nursery education is provided at maintained schools, the ordinary Ofsted inspections which take place will include nursery children. Under Section 13 of the Education (Schools) Act 1992, special provisions are made for certain schools to provide inspection by those who are aware of the denominational character of the school and, in particular, those Section 13 inspections include reference to collective worship, religious education and spiritual, moral, social and cultural development.

In the case of nursery education, there is no requirement to provide either collective worship or religious education. But clearly the spiritual, moral, social and cultural development of children at the nursery age is of importance. Reference is made in Schedule 1 to the chief inspector's responsibility in that area.

With this amendment I merely wish to ensure that, when a Section 13 inspector visits a school in which there is nursery provision, he will be able to include the nursery children in his report and in particular will be able to make comments on the spiritual, moral, social and cultural development of such children. I hope that the Minister will be able to give me some assurance on that. I beg to move.

Lord Henley

My Lords, I hope that I can persuade the right reverend Prelate that this amendment is unnecessary. But I also offer my congratulations and commiserations to him on sitting more or less the whole way throughout the Bill as a Trappist monk with the exception of the amendments which he moved himself.

I do not see what is to be gained from this amendment to the 1992 Act. Section 13 of the 1992 Act deals with the inspection of religious education where this is given otherwise than in accordance with an agreed syllabus. These inspections are distinct, as the right reverend Prelate will know, from those carried out under Section 9 of the 1992 Act, which are under the management of Ofsted.

Inspections carried out under Section 13 of the 1992 Act cover the quality of denominational education provided for all pupils in the voluntary and grant-maintained schools concerned, including four year-olds. This will continue to be the case after the grant arrangements in Clause 1 of the Bill are in place. Amendment No. 32 is therefore unnecessary. Accordingly, I ask the right reverend Prelate to withdraw the amendment.

The Lord Bishop of Ripon

My Lords, I am most grateful to the Minister for that assurance. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

House adjourned at twenty minutes past ten o'clock.