Lords Sitting of 4 June 1998

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Wakefield.

Medical Drugs: Public Scrutiny
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
Whether they intend to take any steps to reduce the secrecy around the trials, licensing and marketing of medical drugs.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the Government's White Paper Your Right to Know was published last December. That sets our proposals to allow closer public scrutiny and to remove unnecessary secrecy. We hope to publish a draft Bill later this year. The Bill will cover information about medicines. In addition, the Medicines Control Agency is examining its current policies in advance of legislation. Its review is taking into account the White Paper on the NHS. The Government will consider, in the light of that review, and our other proposals on assessing medicines, what further action we can take to make more information available.
Lord Ashley of Stoke: My Lords, I am grateful to my noble friend for that promising and comprehensive reply. Is she aware that the time is now right to abolish the secrecy surrounding the trials and licensing of drugs? That can be done, as in the US, without jeopardising commercial viability, by changing the existing regulations. The Medicines Act 1968 gives the Secretary of State powers to change the regulations and to end the secrecy without waiting for a special Bill. Will my noble friend bear that in mind and consider making those representations to the Secretary of State?
Baroness Jay of Paddington: My Lords, I am grateful to my noble friend for that suggestion. As I understand the White Paper on freedom of information, it says that the Government intend, where appropriate and consistent with EU law, to repeal or amend the statutory bars that exist in British law to freedom of information and bring them into line with the harm-and-public-interest tests which are already outlined in the White Paper. The section of the Medicines Act to which my noble friend referred is specifically identified as one of those provisions in the freedom of information White Paper.
Earl Howe: My Lords, I welcome the principle of greater transparency in relation to medicines and greater access by patients to relevant information. Under the freedom of information Bill, how will the
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Government ensure that information which is genuinely commercial-in-confidence is protected from compulsory disclosure?
Baroness Jay of Paddington: My Lords, the noble Earl rightly raises the question of commercial-in-confidence information. He will be aware that there are specific recommendations within the White Paper which may cover that, although we have to wait until the details of the legislation are produced to see exactly how that will be addressed. Interestingly, given the atmosphere, which has changed since the publication of the White Paper, some of the international pharmaceutical companies have now agreed to ensure that their clinical trials are in the public domain in association with the Cochrane Collaboration based at Oxford which is interested in spreading the details of the meta-analysis of those trials.
The Countess of Mar: My Lords, will any of those reviews cover veterinary medicines? I am thinking particularly of sheep dips.
Baroness Jay of Paddington: My Lords, as I said in reply to the original Question, as I understand it, the freedom of information White Paper allows for disclosure of information about medicines in general, and that would presumably include veterinary medicines.

Pregnant Women: Maternity Rights at Work
3.10 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether they are satisfied with the protection available to pregnant women against dismissal as a result of pregnancy or for taking time off for ante-natal classes.
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, the current legislation gives comprehensive protection to women dismissed for any reason relating to pregnancy or childbirth. However, we recognise that difficulties may arise because of the uncertainty over the status of the employment contract during extended maternity leave. The Fairness at Work White Paper, published on 21st May, proposes that legislation should provide for the contract of employment to continue during the whole period of maternity leave.
Earl Russell: My Lords, I thank the Minister for that reply. I note that while he said that the legislation provides comprehensive protection, he did not say that it provides effective protection. Is he aware that NACAB and many other bodies report a constant stream of dismissals for pregnancy and of people returning from maternity leave being told things such as that the only work available is on the night shift, which one

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might be tempted to regard as constructive dismissal? Has he any proposals for making the law more effective than it is at present?
Lord Clinton-Davis: My Lords, I am obliged to the noble Earl for his continuing interest in this important issue. If we have laws on the statute book, it is of course important that they are enforced and are capable of being enforced properly. That is something which we are examining with care and which we have forecast in the White Paper. Ultimately of course it is for the complainant to take the matter to the appropriate tribunal or court. If she does not do so there is nothing very much that one can do about that. Part of the job is to keep people properly informed of their rights. That is something that we have done and will continue to do.
Baroness Lockwood: My Lords, welcome though the proposals in the White Paper Fairness at Work are, is the Minister aware that there is still the important question of ensuring that the measures are enforced? Is the noble Lord aware that, for example, at present the Equal Opportunities Commission receives something like 15 complaints a month about women being dismissed once they have announced their pregnancy? It is not simply a question of ensuring that rights are known but also that responsibilities are known and recognised by employers. Will he take steps to ensure that the new measures are sufficiently publicised?
Lord Clinton-Davis: My Lords, my noble friend is right. But it remains for the complainant to take the appropriate action. It is not a matter that is punishable criminally. The Government have a duty to extend knowledge as far as concerns employers and employees about what is happening. A DTI booklet, Maternity Rights, provides plain English guidance on the rights available. In addition, other departments provide guidance on the legislation. The Department of Social Security produces information as regards babies and benefits. The Health and Safety Executive provides useful information in that regard. The Government are using their best endeavours to make sure that the rights of people are known and understood on both sides.
Lord Gisborough: My Lords, does the Minister agree that the more rights and protection given to pregnant women, and the more costs put on employers, the more difficult it will be for those people to gain jobs because employers will avoid employing them?
Lord Clinton-Davis: My Lords, I could not disagree more fundamentally with the noble Lord. In order to achieve a workforce that is co-operative, helpful and involved in a company, a management also has duties to ensure that it behaves in a civilised way. Both the previous government and this Government have taken that point on board. We feel that there is a case for real improvement in this regard.
Baroness Turner of Camden: My Lords, is the Minister aware that it appears that many employers are
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ignorant of the fact that they will receive reimbursement for the cost of paying a woman maternity pay while she is on maternity leave? Could that be made more widely known? Perhaps then employers would be less inclined to ignore the law.
Lord Clinton-Davis: My Lords, I do not think that there is overwhelming evidence of an exodus from responsibility on the part of employers. There are serious situations which have to be addressed. I take note strongly of what my noble friend properly suggests.
Lord Milverton: My Lords, does the Minister agree that it is wrong and disgraceful for an employer not to fulfil his duty as regards a woman having a child? In fulfilling one of women's most lovely functions, is it not unfair that women should be penalised and unable to continue a career, as is right for any woman to be able to do?
Lord Clinton-Davis: My Lords, the noble Lord has addressed all the relevant points in that fairly brief intervention. The task of the Government, and part of the role of the White Paper Fairness at Work, is to use their best endeavours to seek to promote a family friendly culture at work. Sometimes it does not exist, and we have to rectify that position.
Baroness Carnegy of Lour: My Lords, the noble Baroness, Lady Turner, mentioned the booklet Maternity Rights. It is extremely clear for the recipient, as is the package for employers. Problems in arrangements may be considerable for employers, but does the Minister agree that the information cannot be faulted? It is extremely clear.
Lord Clinton-Davis: My Lords, clearly where people do not take advantage of rights that are available to them it gives rise to a prima facie assumption that something is going wrong in the information available. It is important therefore for us to look at the situation, as my noble friend suggests. I am sure the noble Baroness agrees that that is the appropriate role for the Government.
Baroness Blatch: My Lords, perhaps I may refer to a case that is well known to the department. A shopkeeper's wife became ill. He advertised for someone to undertake the work that his wife had done in the shop. A lady responded on the telephone to the advertisement. During the course of the telephone call she let the shopkeeper know that she was pregnant. In a civilised way the gentleman in the shop said that the work involved quite heavy lifting and he did not think that it would be suitable for her. Not even having gone further with the application, the lady successfully sued for discrimination. Is that a fair burden on an employer?
Lord Clinton-Davis: My Lords, the noble Baroness refers to a hard case of which she has knowledge and I do not. I shall not therefore comment on the specific circumstances. She seems to make the assumption that the whole of the legislation is impaired because of a single case or a minority of cases.

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I think that one will always have difficult situations in relation to the enforcement of the law, whether civil or criminal. I shall look into the case if the noble Baroness will let me have the details. I do not have them. They are not in this voluminous and very useful document that I have before me.
Lord Vinson: My Lords, the Minister wrote to me on this subject a year ago, but perhaps he forgets that he signed the letter. I queried the fact that a £2,000 fine should fall on this small shopkeeper and asked whether somebody should be responsible for the costs of the pregnancy of a third party with whom he has had no biological association. That seemed to me to be wrong. Does the Minister recall my letter?
Lord Clinton-Davis: My Lords, I recall every single letter I have ever signed.
Noble Lords: Oh!
Lord Clinton-Davis: My Lords, what I sometimes forget is the detail.
Earl Russell: My Lords, the Minister is undoubtedly correct that it is the responsibility of the woman to make a complaint. However, does he agree that between the firm and a woman who has recently given birth, lost her job and lost statutory maternity pay there is a real inequality of power? Will he give attention to the doctrine of a level playing field? Will he remind employers that if they take the advice of the noble Lord, Lord Gisborough, they will lose a large proportion of the workforce in this generation and an even larger one in the next.
Lord Clinton-Davis: My Lords, I thought that I had dealt with that question. Yes, of course, there is an inequality of power, but this is not the only area in which that occurs. I welcome the fact that we have concentrated on this important issue. No doubt the noble Earl will continue to raise these matters. I do not wish to encourage him too much—he needs little encouragement—but it has been a useful exercise.

Airports: Medical Arrangements
3.21 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton asked Her Majesty's Government:
Whether they are satisfied with the existing arrangements at international airports in Great Britain for treating passengers who arrive suffering from ill-health as a consequence of long-distance flights.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, medical arrangements at British airports for treating long-haul passengers are a matter for the individual airport managements. I understand that they have arrangements
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in place for summoning ambulances to meet aircraft where that is necessary and for assisting passengers who need medical help elsewhere on the airport.
Lord Graham of Edmonton: My Lords, I am grateful for that Answer. Is the noble Baroness aware that following a long journey I suffered a DVT—for the curious, that is a deep vein thrombosis—following which I received a letter from Dr. Dale Egerton? He informed me that when his wife left a flight from Cape Town seriously ill he was told that at Heathrow:
"they had no medical facilities or medical room for a basic examination".
Will the Minister comment on the situation? Will she reassure the House that it is not general and that there is inter-departmental collaboration, in particular between the Department of Health and her department?
Baroness Hayman: My Lords, there are a number of issues of common concern between the Department of Health and my department which we discuss. I became aware of the deep vein thrombosis which my noble friend unfortunately suffered after his journey during our recent debate. I have drawn to the attention of the chairman of the CAA and the secretary-general of the British Air Transport Association the issues which he related in particular in relation to the need for information to be given to passengers about the potential risks of thrombosis after long flights.
As regards on-site facilities at airports, I am surprised to hear of his correspondent's experience because at Heathrow, Gatwick, Glasgow, Manchester and Birmingham airports there are medical facilities which offer nurse-based treatment. Airport staff should be fully briefed to direct passengers to those as necessary. If my noble friend has further information about what happened on this occasion I should be happy to bring it to the attention of the BAA.
Lord Morris of Manchester: My Lords, has my noble friend seen the disturbing recent reports of an increasing number of people arriving at British airports suffering ill health due to very poor in-flight air quality? Have the Government undertaken any research into that problem? If not, will they do so?
Baroness Hayman: My Lords, I am aware that there is concern about this issue. I am advised that it is unlikely that the spread of infectious diseases on aircraft is caused by the recycling of cabin air by air-conditioning systems. Those systems on modern aircraft have high efficiency particulate air filters which filter out bacteria and almost all viruses. I know that it is a matter of concern, and the consistent and satisfactory performance of the air-conditioning system should be ensured by correct maintenance procedures. The conduct of those maintenance procedures is audited by the Civil Aviation Authority.
Lord Marlesford: My Lords, does the Minister agree that for most people, of any age, before undertaking a long flight it is a sensible precaution to take an aspirin?

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That is particularly relevant to the noble Lord's problem. Will she make that advice more widely known?
Baroness Hayman: My Lords, rather than give any medical advice myself, it would be sensible to draw the attention of the House and the public to the fact that the Aerospace Medical Association has produced medical guidelines for air travel which addresses deep vein thrombosis. Most airlines give advice to passengers, particularly those who are at risk of DVT, as to the precautionary measures they could take both before flying and in flight.
Lord Winston: My Lords, is the Minister aware that, sadly, the medical arrangements for emergencies on aircraft are sometimes woefully inadequate, even with carriers which originate from Great Britain? Is she further aware that on one occasion on mid-Atlantic flight I was called as a doctor to attend a collapsed individual with chest pain? The individual being 79, it seemed unlikely that it was a case of contraception or emergency fertility treatment. However, there was no equipment whatever to deal with the patient. Is there a case for having basic provisions such as drip sets and blood pressure equipment on aircraft which are registered in Britain?
Baroness Hayman: My Lords, I am sure that there is such a case, although I know of examples of improvisation in flight where the treatment has been extremely successful without what might be called conventional equipment. I am thinking of the coat hanger and the mineral bottle. Obviously, my noble friend raises an important point which I shall be happy to pass on to carriers and to the CAA.
Lord Rotherwick: My Lords, does the Minister agree that the useful request made by the noble Lord, Lord Graham of Edmonton, would be better addressed to the International Civil Aviation Organisation rather than the CAA as that would ensure that all planes throughout the world carry such equipment?
Baroness Hayman: My Lords, I know that the noble Lord has great experience in aviation matters and I will take his advice on this. I am sure that the advice could well be promulgated at a national, European and international level.
Lord Graham of Edmonton: My Lords, will the Minister take note of the fact that British Airways was kind enough to write to me following our recent debate? I was delighted to learn of the range of issues which are drawn to the attention of the travelling public once they are on board the plane. Does the Minister agree that the problem is in preparation for the flight and in having medical facilities available at the end of the flight? If the Minister can consider the matter seriously in collaboration with all those concerned this initiative may well produce a good outcome.
Baroness Hayman: My Lords, as in all health matters, education is important. Information provided to
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passengers before they travel as well as in flight is something which we should encourage. I believe that emergency procedures are in place at most airports for dealing with in-flight emergencies. Those work well. At Heathrow Airport, for example, there is a dedicated ambulance ready to take passengers off when a pilot signals that that service is required. I understand that BAA is reviewing its facilities at airports and I am sure that it will be interested in any suggestions to improve them.
Lord McColl of Dulwich: My Lords, does the Minister agree that the answer to the question posed by the noble Lord, Lord Winston, is that any doctor travelling on a flight ought to carry a little Ambu bag containing a mask which is put over the patient's face, and you can, thereby, conduct mouth-to-mouth resuscitation with impunity? It means that if someone has a large moustache you do not get mixed up with it in the process.
Baroness Hayman: My Lords, I am not sure that it would be prudent for me to try to intervene in what I suspect may be a professional debate between the two Benches.

Sorbonne Agreement and Student Mobility
3.30 p.m.
Lord Wallace of Saltaire Lord Wallace of Saltaire asked Her Majesty's Government:
What significance the agreement, signed by them with the French, German and Italian governments at the Sorbonne on 25th May, will have for British higher education.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the main implication of the agreement signed at the Sorbonne on 25th May is that European higher education institutions in the other three countries can be expected to offer a structure of qualifications similar to the undergraduate and postgraduate degrees offered by higher education institutions in the United Kingdom. That should enable British universities, if they wish, to develop closer links with their European counterparts and should also enhance mobility for students.
Lord Wallace of Saltaire: My Lords, I thank the Minister for her Answer. I should also like to congratulate her on the honorary degree which I understand from French, German and Italian press reports she was awarded. Can the noble Baroness explain why the agreement was given so much more publicity in the other three countries than it was in Britain? Further, as the agreement, which the Minister kindly sent me yesterday, refers to,
"facilitating student mobility … [and] endeavouring to create a European area of higher education",
can she tell the House what the DfEE intends to do to facilitate such expanded student mobility, given the fact

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that, on many figures, the number of British students going to study abroad is currently declining rather than expanding?
Baroness Blackstone: My Lords, I have no idea why the newspapers in France, Italy and Germany gave the agreement more coverage. I suppose that it was understandable in France which is celebrating the 800th of the anniversary of the founding of the Sorbonne. I believe that there was much interest among the French public in the event.
As to the noble Lord's second question, I can tell him that the Government do want to see more mobility among university students and university staff, together with more opportunities for students from the UK to study in Europe. One measure we have taken is to exempt students on ERASMUS programmes from the tuition fee as part of our aim of narrowing the gap between the number of students coming to the UK and the number of students from the UK going to Europe on those programmes. Of course, it is also for individual universities to promote co-operation of this kind. I know that the noble Lord has been involved in such schemes at the London School of Economics.
Lord Beloff: My Lords, does the Minister agree that some French press reports suggest a rather more ambitious programme—namely, the harmonisation of higher education between the four countries to promote mobility, which is in itself a good thing—but say that the autonomy of British universities makes such co-operation difficult to attain? Can the Minister assure the House that there is no question of intervening in the autonomy of our universities in order to fulfil the terms of this agreement?
Baroness Blackstone: My Lords, it is always dangerous to believe what one reads in newspaper reports which appear in any country, including France. There is absolutely no intention of harmonising programmes or of trying to develop some kind of common curriculum. Indeed, that would be totally inappropriate. The autonomy of British universities is in no way threatened by the agreement. The agreement is simply about broad structures based on a system of undergraduate degrees, followed by masters degrees and then research degrees. That system does not exist in all of the countries concerned but it is available in the UK. I hope that the noble Lord will agree that what we see here is European universities becoming more like British universities and that that is to be welcomed.
Lord Mackay of Ardbrecknish: My Lords, did I understand the Minister to say that students coming from abroad under the scheme would be excused the fees? If so, does that mean that students from English universities going to Scottish universities might be excused the fees, instead of being discriminated against as this Government seem determined to do?
Baroness Blackstone: No, my Lords. As I believe the noble Lord is perfectly well aware, the decision to charge English students who decide that they wish to
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take a four-year course in Scotland stands. I am sure that the noble Lord is also well aware that an amendment passed in this House has been overturned in the other place—or, indeed, will be—
Noble Lords: Oh!
Baroness Blackstone: It is well known, my Lords. The Government have made clear their intention. It is only right to ensure that students taking four-year degrees in England, Wales and Northern Ireland are treated in the same way as students from England taking four-year degrees in Scotland. As the noble Lord knows, it is also the case that encouragement is being given to Scottish universities to take students from England with two or three A-levels on to the second year of degrees, and many are already doing so.
Earl Russell: My Lords, does the Minister agree that many university activities are affected by what happens in schools and that, although British universities benefit immensely from the arrival of students under the ERASMUS scheme, British students might take more advantage of the scheme in return if language teaching in our schools were to begin earlier?
Baroness Blackstone: My Lords, I have long been an advocate of teaching European languages as early as possible in our system. Indeed, more and more primary schools are trying to undertake a little European language teaching for children aged 9, 10 and 11; in some cases, for even younger children. However, it is important to ensure that we have well-qualified language teachers to undertake the work. If it were done by people not properly qualified, it might put off more pupils than it would encourage.

Shrewsbury and Atcham Borough Council Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Statute Law Repeals Bill [H.L.]
3.38 p.m.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg to move that this Bill be now read a second time.
When the last Statute Law (Repeals) Bill was before your Lordships' House in 1995, I said, for the Opposition, that my party was committed to the reduction of the statute book and the simplification of legislation. I am now pleased to bring forward this Bill, which will make further progress in the modernisation of the statute book.
The Law Commission and the Scottish Law Commission have a statutory duty to promote the repeal of obsolete and unnecessary laws. Over the past 29 years the two commissions have presented to Parliament 16 reports on statute law revision, with draft Bills

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attached. The 15 previous reports have led to the repeal of more than 4,000 enactments, including about 1,800 whole Acts. The present Bill proposes the repeal of 180 whole Acts or orders and the removal of redundant provisions from about 200 others.
The repeals in this Bill are set out in Schedule 1. They are in 10 parts. These range from the administration of justice, ecclesiastical law and education to obsolete enactments concerning inclosures and the slave trade. The Law Commissions' continuing work in rationalising local authority legislation bears fruit in this Bill in Part V of the Schedule. This contains repeals of legislation affecting Hereford and Worcester. Over 70 Scottish local Acts, set out in Part VII, are also repealed.
Although these provisions no longer have a place in today's statute book, there is of course much historical interest in some of them. The oldest group of statutes to be repealed are the Ecclesiastical Leases Acts of 1571 to 1575, which were passed to prevent the continuing dilapidation of ecclesiastical property that had occurred during the reformation. I might also mention an Act of 1662 to repair Bengeworth bridge in the county of Worcester—a reminder of the damage and disruption caused during the Civil War.
Your Lordships will wish to know that there has been full consultation with interested bodies on all the proposed repeals. I am sure that your Lordships would wish to join me in paying tribute to the two Law Commissions for their thorough and painstaking efforts in this important work of modernising the statute book. I should also thank those who have been consulted by the commissions, for their contribution, and in particular those who have been involved in the work on local Acts. If your Lordships are content to give this Bill a Second Reading, it will be referred to the Joint Committee on Consolidation Bills in the usual way. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
Lord Kingsland: My Lords, on behalf of the Opposition I join the noble and learned Lord in congratulating those of your Lordships who serve on the joint committee. Its work is hardly the stuff of newspaper headlines; and yet it is a necessary burden for both Houses to bear. The work that your Lordships do is greatly appreciated.
Looking through the list one finds some remarkable relics of our past; for example the Incitement to Mutiny Act 1797. The Government of India Act 1935 is redolent of a great imperial responsibility, and—I trust the noble and learned Lord will agree—not undertaken in vain.
I was pleased to hear the noble and learned Lord say that he supported the principle of simplification in the drafting of Bills. Your Lordships will not be surprised to hear that the Opposition also support that principle. I think it was Viscount Falkland, writing over 300 years ago, who stated famously that if it is not necessary to do something, it is necessary not to do it. Some adaption of that phrase might well be an appropriate instruction to the parliamentary draftsmen; namely, if it is not necessary to say something, it is necessary not to say it.
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However, if there is an even bigger problem than that of an Act of Parliament saying too much, it is the problem of an Act of Parliament saying too little. Here Her Majesty's loyal Opposition must own up to their own failings. Consider, for example, the Environment Act passed in 1995. We have now waited nearly three years to see Part IIA of that Act become effective in law because the necessary statutory guidance that will give that Act meaning has not yet emerged from the Civil Service.
During this parliamentary Session we have already been presented with a number of Acts which are but bundles of bare bones and which will not acquire meaning until the appropriate statutory guidance is issued. This is no way to legislate in a representative democracy. I trust the noble and learned Lord, in contemplating the opening remarks that he made to your Lordships this afternoon, will also bear that problem in mind.
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

School Standards and Framework Bill
3.44 p.m.
Baroness Blackstone: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
Baroness Blatch: My Lords, I take this opportunity to thank the Minister and the Chief Whip most profusely for finding another day to discuss this important Bill. I know that is appreciated greatly by noble Lords on all sides of the House, particularly those with amendments to be dealt with, as we are aware that today we must finish by 11 o'clock.
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 42 [Annual parents' meetings]:
Baroness Young Baroness Young moved Amendment No. 156:
Page 34, line 24, at end insert (": and
(c) the aims and values of the school, and the ways in which the school intends to promote the spiritual, moral, social and cultural development of its pupils.").
The noble Baroness said: In moving Amendment No. 156 I wish to speak also to Amendments Nos. 157, 236 and 239. I preface my remarks by saying how grateful I am that I can discuss these amendments at this stage of the afternoon and not at two o'clock in the morning.
These amendments are similar to those which I tabled to the 1996 Bill, which fell at the time of the general election. When I moved the amendments on that occasion they received considerable support from all parts of the Chamber. These are modest but important amendments. I have tabled them because I believe that this area of the school curriculum should not be

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neglected. I make two general points. First, I am the first to say that schools cannot do everything as regards moral and social education. We should recognise that and not pretend otherwise. Secondly, in legislation, we should support good parents where we can as they are struggling to bring up their children in a difficult world and at a difficult time. They face all kinds of problems that did not exist even 30 years ago. I refer to drugs, drink and sex. Thirty years ago those problems were certainly not prevalent on today's scale. We should do all we can to encourage co-operation between schools, homes and the wider community.
I regard these amendments as complementary to those which the Minister has tabled to Clause 59. I also regard those amendments as extremely important. They have been tabled in response to my successful amendment to the Human Rights Bill. I attach great importance to the amendments, as I believe does the Committee. I am grateful to the Minister for tabling the government amendments. When we discussed this issue earlier in the year it received the support of the Chamber. We are grateful that the Government have tabled amendments with regard to Church schools and employment matters which meet our concerns.
What do these amendments seek to achieve? Amendments Nos. 156 and 157 require governing bodies to include a statement about the spiritual, moral, social and cultural development of pupils in the annual report to parents and to provide an opportunity to discuss that at the annual parents' meeting. Amendment No. 156 would add a new paragraph to Clause 42 dealing specifically with annual parents' meetings to ensure that the aims and values of a school would be discussed at the meeting. Schools' compliance with the terms of Amendment No. 156 would be monitored by the parents themselves. Amendment No. 157 seeks to insert a new clause after Clause 42 to ensure that governors have to publish a statement on the spiritual, moral, social and cultural development of school pupils setting out targets and means of assessment.
Amendments Nos. 236 and 239 to Clause 103 require the home-school agreement to include specific reference to spiritual, moral, social and cultural development of pupils and require the consent of parents to the home-school agreement.
Amendment No. 239 seeks to add another paragraph to Clause 103. Parents will have to accept the content of the home-school agreement before it is adopted, and then give their consent annually at the annual parents' meeting. I realise that that may sound like a difficult procedure. However, I suggest that the consent of the parent body required by this amendment could be obtained at the annual parents' meeting through a show of hands. That currently happens in some schools as a means of gaining parental consent for the school's sex education policy. The future monitoring of parents' consent could be achieved by keeping a minute of the vote taken. I make that practical point because the question of monitoring has been raised.
Existing legislation requires that the curriculum for a school should promote the spiritual, moral, cultural, mental and physical development of pupils in a school.
However, there is no requirement in existing legislation for schools to report to parents on the way in which that is done and the way in which schools promote those principles or develop those policies in consultation with parents and the wider community. That is what these amendments set out to do.
There is widespread public and professional concern in regard to the spiritual and moral development of young people. One has only to open a newspaper to see columns about bullying in schools as an example of the kind of problems that are faced. I am sure that all of us who take an interest in these matters have read the reports of the speech by Professor Michael Barber to the Secondary Heads Association suggesting that moral education might be based on global citizenship. That is one of the serious issues to be addressed if the matter is being considered at all. It needs to be thought through very carefully before all this is put in front of young people.
The Qualifications and Curriculum Authority has sought to address some of the difficulties that schools face by seeking a broad consensus on values in schools and by producing material to help schools develop the whole school policies for the promotion of moral and spiritual development. However, it is important that these issues should not be sidelined in a school. It is equally important within the context of academic development, which we all acknowledge to be of prime importance, that spiritual and moral development should continue as well.
In its draft guidance issued in November 1997, the QCA stated:
"The promotion of pupils' spiritual, moral, social and cultural development provides the 'why' as opposed to the 'what' and the 'how' of education. It is an essential ingredient of schools' success".
That emphasises the importance of including this issue in the home-school agreement and the need for a whole school policy. Personal and social education and citizenship form a part of the whole school policy, but treated on a basis of single themes, or even as subjects, cannot replace a whole school approach to the spiritual and moral development which should lie at the heart of a school.
I think that all of us recognise that one of the reasons why church schools are often so effective is that their aims and values are known, and parents make an active choice to opt for what they are saying. We need to make sure that parents who can choose a mainstream school should also have the opportunity of opting for something very positive in the school's curriculum. I return to the point that I made at the beginning of my remarks. It is very important that this Bill should help to support good parents in what they try to do at home, by linking what is done in the school with what is done in the home and the wider community. I beg to move.
The Lord Bishop of Ripon: I support the amendment. Spiritual development is the first aim set out in the Education Act 1944 and repeated in the 1988 education Act. I am grateful to the noble Baroness,

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Lady Young, for bringing forward these amendments. Perhaps I may also make reference to Clause 59, since the noble Baroness has already referred to it. In case she is not present when we come to debate that clause, perhaps I may pay tribute to the noble Baroness for her commitment and tenacity in moving and carrying her amendment, which has resulted in changes to Clause 59. I agree that they are of great significance. I am enormously grateful to the noble Baroness for the part she has played in enabling these points to be considered.
As the noble Baroness said, spiritual development, along with moral, social and cultural development, is not confined to schools but is a part of family and community life. Equally, these are not separate aspects of education to be placed in compartments. They are a dimension of all education. I have argued many times in this Chamber that the spiritual dimension to education is vital to an understanding of education, and to the whole notion of learning. Without some recognition of the inner life associated with being a whole person, no genuine learning takes place.
Schools have had some difficulty in understanding just what is meant by spiritual, moral, social and cultural development. However, Ofsted inspects schools on these aspects of education. It is my impression that schools are increasingly developing a language and understanding—an articulation—of the meaning of those dimensions of education which I believe to be very important in school life. Therefore, anything that can be done to strengthen that aspect of education in schools is significant and important.
I support these amendments for the reasons already indicated by the noble Baroness; namely, that they draw parents into the ethos of the school. They require a school to report to parents; and one amendment requires the consent of parents in the home-school agreement to the school's understanding of spiritual development as well as other aspects of education.
It is generally accepted that Church schools are successful in both academic and other terms. It is arguable that part of their success is due to their ability to bring together governors, heads, staff, parents, youngsters and members of the community within a shared value scheme and a shared understanding of what is meant by education to support a particular school. Indeed, I had a conversation with the Secretary of State in which we debated this matter. That was certainly his view. I long for that sense of involvement which is significant in many church schools also to be the mark of all county schools, as indeed it is already in some. These amendments play an important part in reinforcing that understanding of shared values in relation to which the work done by the Qualifications and Curriculum Authority is important. The Values Forum has done significant work in that area.
The amendments are, as the noble Baroness said, modest. They do not make any difference to the emphasis of the Bill. However, they underline certain
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important dimensions in education. I therefore believe that we shall see a positive response to this important aspect of education at this time.
Lord Ashbourne: I support these amendments so cogently moved by the noble Baroness. I very much agree with the remarks of the right reverend Prelate the Bishop of Ripon.
There is widespread public and professional concern about the spiritual and moral development of young people. Schools more than ever have a key role to play in raising standards. Professor Michael Barber's speech to the Secondary Heads Association highlighted the importance of the moral agenda in education.
Amendments Nos. 156 and 157 are practical amendments. There is not likely to be any particular difficulty in schools meeting those requirements. The point of the amendments is to bring greater clarity and explicitness to this key issue for parents and schools themselves at the time each party commits to its responsibilities. Moreover, the requirements set out in the amendment will be monitored by parents themselves. Greater openness will promote participation by parents. Where schools fail to discharge their responsibilities, that will be apparent to parents, who can be expected to take up specific matters with head teachers and governors. I commend the amendments to the Committee.
4 p.m.
Lord Dormand of Easington: I wonder if the noble Baroness, Lady Young, can explain what is meant by the word "spiritual". I believe that no one would disagree with the words,
"moral, social and cultural development of … pupils".
That is something which I am sure we all very much support, and indeed would support the kind of push—if I may use that word—behind the two amendments before us. But, if the word "spiritual" is used in what I might call the religious sense, I would have to repeat, as I have said on a number of occasions in your Lordships' House and in another place, that a number of us do not have any religious belief at all. There are some 50 Members of this House and another place who declare themselves in that sense. There are other meanings of the word "spirit", in terms of a rugby or a cricket team, for example, and that is something I go along with. However, where there is this exception—if I may use that word—it should be clarified.
Some Members of the Committee may say that there is provision in the education Acts for a child not to attend classes where religious education is taught if the child or its parents so wish. Those of us who have been engaged in the day-to-day working of education all know that that usually means standing in a corridor outside a classroom, which is not a satisfactory situation in which to place a child. It is important that we have clarification on this matter, and I hope that the noble Baroness will be able to say a little more about it.
Lord Pilkington of Oxenford: I share one common experience with the noble Lord, Lord Dormand: we

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were both educated in County Durham. I think I can begin to answer his question, although my noble friend may want to do so in greater detail.
If Members of the Committee will pardon anecdotal evidence, I spent six or seven years in the 1940s at school in a Durham mining village. Many of my teachers were, as the noble Lord described, not practising Christians. They had been Methodists; they were socialists. However, they combined a real sense of spiritual values. That was associated with religion; in some cases religion that they had left. There was no doubt about the moral depth of the school. It imparted a feeling that there was depth to life. It was in part attached to an agreed religious syllabus. The teachers drew out of the syllabus moral and ethical points.
I agree with my noble friend that this matter is of enormous importance. Schools form a morality. That is particularly important in our present society, which is very fragmented. We are the end generation of massive industrialisation. Communities such as those in which the noble Lord, Lord Dormand, and I were brought up have been broken up, are now dispersed and have vanished forever. This amendment is possibly one of the most important of the amendments to the Bill.
We could argue about what we mean, but I think that the noble Lord, Lord Dormand, knows as well as I do the situation which used to exist and which can still exist. Teachers are by nature bound to morality because that is the nature of their profession.
I should like this amendment to go on the face of the Bill. Pretty well everything else goes on the face of the Bill. The Government almost tell head teachers when to wash their faces. I shall be protesting about some of this later on. Most of us in this Committee, educated in various ways, having decided our destiny, be it religious or non-religious, know that in our schools we experienced something which has guided us in later life. I can only say in the vaguest way that it is depth of life and care for values. One might become a socialist. My schoolmasters tried very hard to make me one, but they failed in that. Many Members of the Committee would say that their schools did all this, and certainly the schools of County Durham did so. The amendments would provide that teachers should have regard to this as a most important facet of their profession. I therefore commend the amendments to the House.
Lord Northbourne: These amendments raise in my mind three questions, which I should like to ask the Minister. Is it the Government's policy to support and encourage schools to prepare statements on spiritual, cultural, moral and social values? Is it the Government's policy, in doing so, to make use of the agreed values, which have been prepared and are now being tested in schools, which were developed by the School Curriculum and Assessment Authority? Do the Government believe that parents have an important role to play in developing a school's moral values? If the answer to those three questions is yes, I think the amendments probably should be accepted.
Lord Milverton: I rise to support the amendments tabled by my noble friend Lady Young. My noble friend
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made an important point about parents feeling that they have some support from schools in giving spiritual education to their children, which parents do by example. It was not the Church alone, of which I am a minister, that gave me my spiritual feeling; that was something which happened from birth, before I became fully involved in the Church. Some might say that I had a privileged upbringing. I am very grateful for what I sense about spiritual dimensions, sensing the dignity, worth and sacredness of the human being. To me, that is what spirituality is. Spirituality brings in morality and ethics and gives greater depth to them. We should not feel ashamed of emphasising the word "spiritual".
I said that some might say that I was privileged. I do not know whether that is true. For instance, most people started school at the normal school age. Because of my father's position in the Colonial Service, I did not attend any school until I was 10 or 11. That was in Jamaica, where my father was governor. Prior to that I had tutors. I therefore do not think it is true that I speak from a privileged position. I had to work very hard for my education, in Canada as well as in England. In Canada, although the education system is run in the same way as in England—I went to a school called Ridley in Ontario Province—the schools are called public schools rather than private schools, and they really are public. Many parents make a tremendous effort. Children from all kinds of homes go to those schools.
In that way I am not as privileged as some may think. But throughout my life, even as a choir boy in Jamaica, I got my sense of spirituality from more than just being a member of the C of E and feeling a call to the priesthood while at school. It is important therefore that we encourage those who find it difficult to comprehend spirituality at least to begin to have an understanding of it. It is important especially for those parents who are desperately trying to uphold something which they are often told is "silly billy". It is important to help those parents and get schools to do the same.
Baroness Carnegy of Lour: The noble Lord, Lord Dormand, put his finger on the problem that exists in most schools today. However, there was an encouraging response from the right reverend Prelate who told us that schools in the Church of England's experience are increasingly trying to discuss and articulate between themselves what they mean in these areas; what they are trying to do; and how they are approaching the whole matter.
Our past experiences may be interesting and significant, but for today it is important that staff, governors and parents agree and are clear about their school's intentions in these areas, what they are trying to do about them and how they want to progress. It is important that governors and staff, having agreed those matters, discuss with parents what the school is trying to do. They need feedback and the support of parents for what they are doing.
I do not believe that our experiences from the past necessarily help. We live in a different world today and the way young people see these things has changed. The approach must therefore be different—and different in every school. My noble friend Lady Young put the point

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extremely well and reminded us that one can learn from Church schools something about how they turn ethos into practice. A good Church school can teach any school a great deal in these matters, even if the definitions and the process are different.
The amendments are important. The Minister helped with other amendments to which we shall come later. That will carry the matter further. She is making sure that head teachers are people interested in these matters who will be capable of giving the right leadership in the school. But there must be something for schools to follow. If that could be on the face of the Bill, it would be extremely helpful. Schools need support; they are trying hard. There is a great hunger among young people and their parents for help in these matters. It is not easy. If an amendment of this kind can help, we should accept it.
Lord Desai: Like my noble friend Lord Dormand I am an atheist and therefore should not speak too much about religion, but I am glad that the C of E, having lost money in real estate, is now interested in sex and making money. That is always welcome.
As to Amendment No. 157, I do not understand how one can set targets for cultural, social or moral development. I spent my life measuring things and making indices. The other day in Committee we had great difficulty defining "value added", and that is near enough a numerical concept. Given the difficulty and given six months, I could do it. But how does anyone set targets in moral development? How does anyone assess and monitor targets of moral development? I should have thought that if one can measure moral attitude it is not moral. I shall not say anything about whether we should or should not have spirituality but we certainly should not have targets. They are a difficult notion to accomplish in this vague and mushy area.
Lord Dearing: As one who was once a member of the School Curriculum Assessment Authority and had some statutory responsibility for offering guidance to schools in these matters, perhaps I can offer a comment. I warmly support Amendment No. 156 and the purpose of Amendment No. 157. We struggled with a definition of "spiritual". I recall using phrases like "to go beyond", and making it much broader than spiritual values based on religion. We wanted to incorporate a sense of wonder; a sense of awe; beauty; respect for one's fellow human beings; and appreciation of courage, both physical and moral. I remember Margaret Thatcher once describing courage as the ultimate virtue.
Those are the kinds of thing we had in mind. However, when it comes to setting targets and making assessments of such delicate, fragile, magic things, it is extremely difficult. I have a feeling of great compassion for a body of school governors in a primary school with children aged between five and nine trying to define targets and assess them for such delicate but wonderful things. One can describe one's objective as a process of gaining knowledge, but in terms of the development
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of those things it is difficult. Nevertheless, I commend warmly the intention behind the amendments and hope that the Government will make a positive response.
Baroness Maddock: I am pleased to speak after the noble Lord, Lord Dearing, who articulated extremely well much of what I feel. For many this is a difficult area. If one is convinced of one's religion, it is much easier. I appreciated the manner in which the noble Baroness, Lady Young, and the noble Lord, Lord Pilkington, explained what they wanted to see. I did not feel uncomfortable. But many people outside this Chamber may feel that we are trying to indoctrinate people with a specific religion. I know that that is not the intention. As the noble Lord, Lord Dearing, explained, we should be helping young people in schools. I think of it in terms of helping people to be good citizens. If one is a good citizen, one is mindful of the community and of all the people who live in it. In my lifetime of being involved in schools, I have noticed going out of the curriculum not only the spiritual area, but also how our whole society operates, how we make laws and how they fit into the moral framework of our lives. Certainly in the latter days when I was involved in schools, politicians often thought that political indoctrination was involved. That is why it is such a difficult area. We have moved around it over a number of years. I am therefore grateful to the noble Lord, Lord Dearing.
I want to make one further point regarding how we discuss these matters in schools and persuade parents to become interested in them. I was chairman of the governors in a first school and sat through annual meetings. Every year we tried to thinks of ways to persuade more people to attend the annual meeting. I am pleased to say that the figures went up each year, but it was not easy. Also, it is not always the most appropriate forum in which to raise big issues. I think particularly of the problem of drugs in schools. In some areas local authorities have a good drugs unit which can provide interesting speakers and information for parents.
It seems to me that sometimes, by choosing an issue that perhaps has had some relevance in the community, we are able to persuade parents to discuss these matters in a better way. I am not saying that we should not attempt to discuss these issues at an annual meeting, but by putting that in the Bill, we could fool ourselves into thinking that that shall make all the parents come along to discuss these issues.
4.15 p.m.
The Earl of Halsbury: It is not for the first time that I rise in support of the noble Baroness, Lady Young. I supported her on her earlier attempts to pass this amendment through the House, and I continue to do so.
There is some confusion over the word "definition". There are two kinds of definition: one is a lexical definition in which you define words in terms of other words; and the other is an ostensive definition from the Latin word ostendere, in which you show a daffodil to a child and say, "That is a daffodil", and that is how the child learns the language.

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If the noble Lord, Lord Dormand, requires a definition of "spirituality", I can give him an ostensive one. If you wish to be a better person than you are, or you feel ashamed of something which you have done, or admire beautiful music, or admire courage and courageous action in other people, or admire the way in which they attend to the sick and the invalid, and so on, that is a spiritual exercise. That is the only definition that one can give.
I remember that Xenophon or one of his contemporaries asked a Persian educationist, "What do you teach children?". The answer was, "We teach them to ride hard, shoot straight and speak the truth". One can add that that was the beginning of wedding the spiritual side to the material side of education. If we try to divorce them for the sake of some kind of intellectualist doctrine, I do not believe that we shall make a success of the society in which we hope to live and raise our children.
Therefore, I support the noble Baroness in what she has done and if she chooses to divide the Committee on the issue I shall walk into the Lobby behind her.
Baroness Blatch: I rise to support my noble friend, but may I also wish the noble Earl a very warm and happy birthday?
Noble Lords: Hear, hear!
Baroness Blatch: Once again we have listened to the wise counsel of the noble Earl and it is something from which we always benefit. In my maiden speech in this House I used the phrase that an educational experience is nothing more than a clinical and arid experience if it does not involve a spiritual dimension. It seems to me that the spiritual dimension is very important.
For those who are afraid of doctrination or indoctrination, religious education in schools has never been, and should not be, about trying to make little Christians. It is concerned with raising spiritual awareness. At the end of the day, educationally, it is about understanding our spiritual heritage. I wish, most warmly, to support my noble friend.
Lord Walton of Detchant: I, too, should like to give my warm support to these amendments, if only briefly.
Like the noble Lords, Lord Dormand of Easington and Lord Pilkington, I was educated in a council school in Durham County and later attended a grammar school almost equi-distant between the two that they attended, and we regularly beat them at cricket and football.
Leaving that aside, perhaps I may say how much I support the principle underlying these particular points that have been so well articulated by the noble Baroness, Lady Young, and by the noble Lord, Lord Dearing, who defined what he meant by spirituality in a way in which, I believe, I could not challenge.
I was brought up in a powerful Christian household, a Methodist household. I have to confess that when I went to medical school, and was educated in science, I developed an increasing scepticism about some of the religious tenets that I had been taught in my childhood.
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It was only in latter years that I began to recognise, as the Bard said, that, "There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." It was that which brought me back to an understanding of what I believe is the true meaning of spirituality. More than anything else in this country, we need a mechanism in schools, in collaboration with parents, by which we can offer a spiritual, moral and social understanding of the important issues which are all too often neglected in current-day education, but which we all, in this Chamber, learnt in our youth.
Perhaps I may add one point, which I believe is relevant, arising out of my experience in a totally different field; namely, the field of medical education? When I was chairman of the Education Committee of the General Medical Council we struggled with the problem of trying to define, in our recommendations on education, the various tenets that should be looked at in detail relating to knowledge, skills and attitudes.
I would disagree with the noble Lord, Lord Dearing, on this point. In trying to educate people in such qualities as compassion, humanity, understanding, kindness and all the other values which are so fundamental to our society, I believe that we came up with recommendations which helped us to indicate how these qualities should be transmitted to students and how they could be assessed. I do not believe that the target setting or the assessment is as difficult as the noble Lord, Lord Dearing, suggested. I warmly support these amendments.
Lord Sheppard of Liverpool: I should also like to support the proposal of the noble Baroness, Lady Young. Some fears have been surfacing in this debate, and I believe the noble Baroness, Lady Blatch, was right to point out that when people have quoted the example of Church of England schools, the Church has not been trying to make little Christians of everybody. That is the task of home and of church. I believe that the task of schools in a spiritual dimension is to give the pupils the opportunity to make up their own minds. We should all like to say that people should make up their own minds, but unless you have some information on which to make up your mind, you are unlikely to get very far.
I believe also that there was a misunderstanding in what the noble Lord, Lord Dearing, said about setting targets. I do not contemplate that a school should be expected to set the targets of the spiritual understanding which they expect each pupil to achieve. It would be perfectly reasonable and possible for a school to speak about the kind of experiences that they have allowed children to have, as they face some of the issues that human beings have to face, as schools already do. That could offer a strong report to show the power that some spiritual values have in motivating people in service to other people and facing some of those human issues.
I hope that some of those fears may be put away and that something of immense value in our history may become part of that which we hope for from our schools.
The Earl of Sandwich: I wish to congratulate the noble Lord, Lord Dormand of Easington for inspiring many fine sentiments. Whether he intended that or not

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in this debate I do not know. I shall not add to the high-flown words, but in support of the noble Baroness, Lady Blatch, I think she is right in saying that the Church of England orthodoxy is long behind us when talking about moral and spiritual education.
I should like to add one dimension; that is, the international side. Many young people are responding to the experience that voluntary organisations and churches are bringing back from overseas, and some of that is material education, which can be measured. I agree completely with previous speakers in response to the noble Lord, Lord Desai, that this can be measured. Inspectors have measured it and have said that schools come up to expectations. Therefore, I believe that that is an important aspect.
Lord Stallard: I rise briefly to support the noble Baroness and her amendment. The noble Lord, Lord Pilkington, seemed to assume that because one espouses socialism that means that one is anti-Christian. I should hate people to go away from here thinking that all the Christians are on that side and all the atheists are on this side. That is not true.
If the noble Lord studies social history he will see that most of the early socialists were Christians and upheld the Christian faith. I know for a fact that Keir Hardie was a lay preacher in the place where I was born. I had great respect for his Christian views as well as his socialism. I am very sad that he was not converted because he would have found, I am sure, as much satisfaction as I have over a long period in having both socialist principles and Christian morals and spiritual values.
I can only speak from previous experience of a recent Bill in this House, the Education Bill, when we talked about a conscience clause, and so on. I had literally hundreds of letters—perhaps more than that—from people pleading for that to be carried and pleading for support from politicians of all kinds for the values that parents thought were being attacked, mainly through television advertising, through politically correct school teachers, and so on. I know from 30 years' experience as a school governor in different schools in a London borough that there is a feeling of support for such a provision among parents who admire the ethos of the Church schools with which they have been involved or with which they would like to be involved. I hope that the noble Baroness's amendment will be carried. But if it goes to a Division, I shall certainly support her.
4.30 p.m.
Lord Baker of Dorking: We are not debating whether these matters should be taught in a school framework. The Minister will know and those who are familiar with the legislation will know that schools are obliged to observe spiritual, moral, social and cultural matters. That is on the face of the 1988 Act. When we first drafted the Act we had just "mental and physical education". That was really what education was all about. In fact, it was very close to the definition given by Xenophon. But we added to the Act spiritual, moral, cultural and social matters because obviously education
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is much wider than physical and mental education. What we wanted to do was to remind schools and teachers that what was important was not just physical and mental education but also the need to awaken a spiritual awareness, which may or may not come from a religious belief. In fact, religious education is defined quite separately in the basic legislation. We also wanted to remind them that there is a wider awareness—social and cultural, which has hardly been touched on this afternoon, and spiritual and moral.
The spiritual development of a child goes rather wider than just being aware of good neighbourliness. Good neighbourliness can be taught in many different ways. For example, it can be taught in citizenship lessons. What we meant by spiritual was touched on by my noble friend Lord Pilkington when he said that it added to the depth of life. If one can strike the flint in the child and get the spark from the flint and raise the imaginative concept that is really behind spirituality, that is an enormous enhancement.
What the first amendment does—I support the first amendment rather more keenly than the other ones—is to require the governors to report to the parents on these matters, so there will have to be debate and discussion. It cannot just be brushed aside casually with the words, "Well, we do that, don't we?". I very much support the first amendment and I hope that the Government will support it as well.
Baroness Blackstone: These amendments take a threefold approach to confirming the significance within the curriculum of pupils' spiritual, moral, social and cultural development, an annual statement by the governing body, the annual parents' meeting and the home-school agreement. Before I go further in discussing the amendments, I should like to say how grateful I am to the noble Baroness, Lady Young, and to the right reverend Prelate for what they have said about the government amendments that come later to Clause 59.
Many of your Lordships have spoken in favour of at least some of these amendments so I fear that I shall disappoint many of those who have spoken in support of them, not I think because of any difference in principle about the value of what lies behind them or their intent but more because of a difference in terms of the approach that is entailed. They do add weight but also, if I may say so, quite a lot of significant detail to the existing statutory requirement. The noble Lord, Lord Baker, is right. The 1988 Act included clauses on this matter. More recently, Section 351 of the 1996 Act provides that the governing body and head of every school shall exercise their functions with a view to securing that the curriculum,
"promotes the spiritual, moral, cultural, mental and physical development of pupils at the school and of society, and … prepares pupils at the school for the opportunities, responsibilities and experiences of adult life".
Perhaps it would be a little foolhardy for me to get into debating the meaning of all these terms, but I simply want to say that the Government attach great importance—when I say "great importance" I really mean "great importance"—to pupils' spiritual, moral,

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social and cultural development. As the right reverend Prelate said earlier, Ofsted inspectors have looked at these aspects of education when inspecting schools. Their evidence shows that schools experience a particular difficulty with pupils' spiritual and cultural development in terms of how to interpret that and how to implement it. The noble Earl, Lord Sandwich, said that inspectors had found a way of measuring it. I am unaware of how they have done this. Perhaps I am not adequately informed, but that is the first I had heard that they had been able to measure it in the sense that I understand the term "measurement".
Shortly after taking office the Government approved a Qualifications and Curriculum Authority pilot of the draft guidance that it had prepared on the whole school approach to spiritual, moral, social and cultural development. That guidance is now being piloted in 150 schools. The pilot is very important from the point of view of informing the national curriculum review which is being undertaken by the QCA; specifically, the focus that that review gives to preparation for adult life. The QCA's recently published advice on the scope of the review notes:
"There is a strong case for recognising the central place of citizenship, personal, social and health education and spiritual, moral, social and cultural development in the education of all young people by introducing more explicit provision within the statutory framework".
However, it concludes that it will not be possible to decide the best way forward until we have considered the recommendations of a range of advisory groups covering areas such as PSHE, if I may use the acronym, creative and cultural education, and sustainable development education, which I know is an interest of the noble Earl, Lord Sandwich. My right honourable friend the Secretary of State has agreed this advice and the QCA will provide him with further recommendations in September. Perhaps I may say to the noble Lord, Lord Northbourne, that it will be rather easier for me to give a definitive government response to his first two questions then.
As part of its review, the QCA will also be developing a statement of the core values and aims which should underpin the school curriculum and identifying aims and priorities for each key stage. We would expect the spiritual, moral, social and cultural aspects of children's education to be reflected in that work. So this area is very firmly on the Government's agenda, with the possibility of more explicit statutory provision in due course. However, at this stage, the Government feel, given the work that is going on in this area, that it would be premature to put such amendments into law. Moreover, significant as this issue is, the approach taken in the amendments is rather prescriptive and detailed. They would put extra pressure on schools. I am sure many Members of the Committee would agree that we want to avoid the danger of threatening to overburden the vehicles which carry them.
Perhaps I may deal with each of the amendments in turn. With regard to Amendment No. 156, we do not want to be unduly prescriptive about the items for discussion at annual parents' meetings. That could possibly divert governing bodies from their main
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purpose, which is to provide parents with an opportunity to discuss the annual report and the conduct of the school generally. Many governing bodies will see the promotion of the spiritual, moral, social and cultural development of the pupils as part of their conduct of the school and will want to discuss it. Nothing will prevent them from doing so. They will be free to do that and I hope that they will.
I turn to Amendment No. 157. Similarly, we see no need for the governors to publish a curriculum statement akin to that which they are required to produce on sex education, but with much greater specificity as to content. Indeed, the Bill actually removes the existing requirement for the governors to produce a general statement on the secular curriculum because we judge that to be unnecessary.
I also have some sympathy with what the noble Lord, Lord Dearing, and my noble friend Lord Desai had to say about targets in this amendment. If what is meant by "targets" is broadly expressed good intent, all well and good, but the normal use of that word in educational law and in all the guidance that is given to schools these days, is much more precise than that. It is about being able to measure a particular objective and set a goal for schools to achieve. Perhaps the disagreement here is simply a matter of definition.
I turn to Amendment No. 236. Clause 103 defines a home-school agreement as a statement specifying the school's aims and values and the responsibilities which the school intends to discharge in connection with the education of pupils who are of compulsory age. I believe that this definition covers the proposal of the noble Baroness, Lady Young. We have made it clear that home-school agreements should include expectations regarding the ethos of the school and we shall reinforce this in our guidance to schools. However, we do not want to be too prescriptive about the content. Schools and parents should be free to determine the detail of their agreements.
The Bill really requires that a home-school agreement should specify the school's aims and values and that the instrument of government for a school with a religious character should include a statement of the school's ethos. Governing bodies are already required to publish in the school's annual prospectus a statement on the ethos and values of the school which underpin the spiritual, moral, cultural and social development of the pupils through the curriculum and any other activities that the school may provide.
We are currently consulting on proposals to give governing bodies more freedom to determine the content of prospectuses that propose to retain the requirement for a statement on ethos and values. So parents who want to discuss the school's aims and values at the annual meeting can do so in the context of the prospectus, the instrument of government or the home-school agreement.
I know that what I have said may be disappointing to some of those who have participated in this debate, but in the light of what has been said I hope that the noble Baroness will accept that the Government are very

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committed to this area. It is waiting for further QCA advice. In the light of what has been said, I hope that she will feel able to withdraw her amendment.
Lord Northbourne: Before the noble Baroness sits down perhaps I may raise with her the point I made about the importance of parents being involved in, and contributing to, the implementation of the values policy. These amendments would facilitate parents becoming involved and they will encourage them to do so. From what the noble Baroness said it did not appear that the Government see that as an important issue.
Baroness Blackstone: I am very sorry that I forgot about that. I agree that all parents must be given the opportunity to express their views on the home-school agreement. That is why we require the governing body to consult all parents at the school before adopting or reviving a home-school agreement or any parental declaration. I hope that schools will involve parents very substantially in drawing up the agreement. Our guidance on home-school agreements will include many examples of good practice in this area. I hope that that reassures the noble Lord.
The Earl of Sandwich: Perhaps I may ask the noble Baroness a question about inspections since she mentioned my name. I am aware of a particular case in which a school from the west country made a visit to Brixton. The children were exposed to the culture of the Caribbean for the first time. That occurred shortly before an inspection. As I understand it, it was recorded. Whether one can call that a mathematical measurement, I am not certain. Perhaps the noble Baroness can help.
Baroness Blackstone: I know that Ofsted inspectors are looking at many aspects of this part of the curriculum and they may well record good practice of that sort. I understood the noble Earl's use of the word "measurement" to be something rather more precise. I understand what he is saying.
4.45 p.m.
Baroness Young: I thank all those who have taken part in this debate. I am extremely grateful for the extensive support that I have had from all parts of the House. Perhaps I may begin by reassuring the noble Lord, Lord Stoddart. We agree so regularly on these matters. I believe that those of us who are Christians are not confined to any one party or part of the House. We share common values and that is what we are talking about in particular.
Today I would not wish to emphasise particularly that we are talking about some kind of Church of England education. I believe that these are very modest amendments. I am very interested in the support that I have received from all parts of the House. I believe that frequently the danger for young people today is that this area of the curriculum is neglected. I was very disturbed to hear the noble Baroness, Lady Blackstone, in replying to the debate, say that this matter would go to the annual meeting with parents and that she did not
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want to divert governing bodies from their main purpose. It is that kind of attitude which causes anxiety about this issue. Of course, we care about the academic side of the school and sport, music and other subjects. But there is something very fundamental about the spiritual, moral and cultural side of a child's development.
I would love to answer the noble Lord, Lord Dormand, and explain what I mean by spiritual, but I shall not take up the time of the Committee to do so. The point has been made by my noble friend Lord Pilkington. I was very interested in the comments made by the noble Earl, Lord Sandwich. When one visits schools and meets young people one is very conscious of the numbers who devote a lot of time to charitable work. They devote a lot of time to work overseas, particularly in their "gap" year between school and university. They also help in their own communities. That is some measure of the kinds of things that we are talking about. When I was a child I was taught the values of truth, beauty and goodness. We all know what they are. Those are the kinds of things that we are looking for and which we share.
Lord Dormand of Easington: I am most grateful to the noble Baroness for giving way. I thought that my question was a very simple and innocent one. It has given rise to quite an interesting debate, not least about the benefits of education in County Durham. All I can say is that I spent more than 70 years in a mining village in County Durham and look what it did for me! It is different from the effect that it has had on the noble Lord, Lord Pilkington.
My main point was to try to define the position. I say this not just to the noble Baroness but to other speakers. There is a need for good citizenship. No one would disagree with that. Those who do not have religious beliefs would not disagree with that. We are saying that there is a different way of achieving the objective and that the views held by people such as myself could also achieve that end. However, I am grateful to the noble Baroness for at least attempting to give me more information on the matter.
Baroness Young: I shall give the noble Lord a lot more information on another occasion. I do not think that the Committee wants to hear it now. However, I note what the noble Lord says.
On the whole question of the spiritual and moral side of education, the words of the noble Lord, Lord Sheppard, were most helpful. I am also grateful for the support of my noble friend Lady Carnegy who pointed out that many of the experiences of the past have not necessarily been helpful but that we can learn from the strengths of Church schools. I am also grateful for the support of the noble Lord, Lord Dearing, whose knowledge of education is infinitely greater than mine, and for that of the noble Lord, Lord Walton.
I am grateful for the trouble the Minister took in replying to the debate. I recognise that the Government attach importance to this area of the school curriculum.

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I know what has been done—at any rate, what has been published—by the QCA and following Ofsted inspections.
However, I am concerned about the Minister's reply on two counts. First, I have an uncomfortable feeling that the noble Baroness was not talking about what I and those who support my amendments have been talking about. The noble Baroness suggested that citizenship could be a substitute for spiritual and moral values. I am not against citizenship. Of course, being a good citizen is in itself a good thing, but I am talking about something infinitely greater and deeper than that.
My second concern about the Minister's reply relates to the point I made at the beginning and to the Government's suggestion that spiritual and moral values are not central to a school. Anyone who visits a school can tell its ethos, almost on walking through the front door. Perhaps I may give one small illustration. Where I stay in London I go first thing in the morning to buy a newspaper from a small shop run by an Indian family. Invariably when I am in the shop, it contains a number of pupils, obviously from the local comprehensive. I regret to say that they are usually buying sweets and soft drinks, which I strongly suspect comprise their breakfast. Nevertheless, those large boys are nearly always in the shop. They are universally polite. It is extraordinarily impressive that if they bump into you, as teenagers can so easily do in a confined space, they invariably apologise. They hold open the door for the customers. That school has got those children to do something remarkable—and the outsider immediately judges the school on that. Its young people are very thoughtful. They have no idea who I am, so I am certain that they behave in that way to everyone. That school has given those children something, a moral education—and it shows. However, it is more than that. It is something of value and we all know how important it is.
Although I had not intended to divide the Committee on this amendment, in view of the support that I have received, I now seek the opinion of the Committee.
4.53 p.m.
On Question, Whether the said amendment (No. 156) shall be agreed to?
Their Lordships divided: Contents, 119; Not-Contents, 104.

Division No. 1

CONTENTS

Addison, V.

Brentford, V.

Alexander of Tunis, E.

Broadbridge, L.

Anelay of St. Johns, B.

Brougham and Vaux, L.

Annaly, L.

Burnham, L. [Teller.]

Ashbourne, L.

Butterworth, L.

Attlee, E.

Byford, B.

Baker of Dorking, L.

Cadman, L.

Belhaven and Stenton, L.

Caithness, E.

Beloff, L.

Calverley, L.

Birdwood, L.

Campbell of Alloway, L.

Blatch, B.

Carnegy of Lour, B.

Brabazon of Tara, L.

Carnock, L.

Braine of Wheatley, L.

Chesham, L.

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Coleridge, L.

Mersey, V.

Colwyn, L.

Miller of Hendon, B.

Cope of Berkeley, L.

Milverton, L.

Craig of Radley, L.

Monckton of Brenchley, V.

Crathorne, L.

Monson, L.

Cross, V.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Munster, E.

Davidson, V.

Northbourne, L.

Dearing, L.

Northesk, E.

Denton of Wakefield, B.

Norton, L.

Dixon-Smith, L.

O'Cathain, B.

Ellenborough, L.

Orr-Ewing, L.

Elliott of Morpeth, L.

Oxfuird, V.

Fitt, L.

Park of Monmouth, B.

Foley, L

Pilkington of Oxenford, L.

Fookes, B.

Rawlings, B.

Gainford, L.

Reading, M.

Gardner of Parkes, B.

Renton, L.

Gilmour of Craigmillar, L.

Ripon, Bp.

Halsbury, E.

Rix, L.

Harding of Petherton, L.

Romney, E.

Hayhoe, L.

Sainsbury, L.

Hemphill, L.

Sandwich, E.

Higgins, L.

Seccombe, B.

Shaw of Northstead, L.

Holderness, L.

Sheppard of Liverpool, L.

HolmPatrick, L.

Skelmersdale, L.

Howe, E.

Slim, V.

Hurd of Westwell, L.

Soulsby of Swaffham Prior, L.

Hylton-Foster, B.

Stallard, L.

Kimball, L.

Stockton, E.

Kinnoull, E.

Strathcarron, L.

Kintore, E.

Strathclyde, L.

Kirkwood, L.

Swansea, L

Lauderdale, E.

Swinfen, L.

Layton, L.

Teviot, L.

Liverpool, E.

Thurlow, L.

Long, V.

Vivian, L.

Longford, E.

Waddington, L.

Lucas, L.

Walton of Detchant, L.

Lucas of Chilworth, L.

Warnock, B.

Luke, L.

Weatherill, L.

McColl of Dulwich, L.

Westbury, L.

McConnell, L.

Wharton, B.

Macleod of Borve, B.

Wilcox, B.

Marlesford, L.

Wise, L.

Mayhew of Twysden, L.

Young, B. [Teller.]

NOT-CONTENTS

Acton, L.

Dubs, L.

Addington, L.

Evans of Parkside, L.

Allenby of Megiddo, V.

Ezra, L.

Annan, L.

Falkland, V.

Archer of Sandwell, L.

Farrington of Ribbleton, B.

Blackstone, B.

Gallacher, L.

Borrie, L.

Gilbert, L.

Bruce of Donington, L.

Gladwin of Clee, L.

Burlison, L.

Glasgow, E.

Callaghan of Cardiff, L.

Graham of Edmonton, L.

Carlisle, E.

Grenfell, L.

Carter, L. [Teller.]

Hardie, L.

Castle of Blackburn, B.

Hardy of Wath, L.

Cledwyn of Penrhos, L.

Harris of Greenwich, L.

Clinton-Davis, L.

Haskel, L.

Cocks of Hartcliffe, L.

Hayman, B.

Craigavoa, V.

Hilton of Eggardon, B.

David, B.

Hogg of Cumbernauld, L.

Davies of Coity, L.

Hollis of Heigham, B.

Davies of Oldham, L.

Hoyle, L.

Desai, L.

Hughes, L.

Dholakia, L.

Hughes of Woodside, L.

Diamond, L.

Hunt of Kings Heath, L.

Dixon, L.

Irvine of Lairg, L. [Lord Chancellor.]

Donoughue, L.

Dormand of Easington, L.

Jay of Paddington, B.

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Jenkins of Hillhead, L.

Prys-Davies, L.

Jenkins of Putney, L.

Puttnam, L.

Judd, L.

Ramsay of Cartvale, B.

Kilbracken, L.

Randall of St. Budeaux, L.

Kirkhill, L.

Rea, L.

Leigh, L.

Rendell of Babergh, B.

Linklater of Butterstone, B.

Richard, L. (Lord Privy Seal)

Lockwood, B.

Rodgers of Quarry Bank, L.

Lovell-Davis, L.

Russell, E.

McCarthy, L.

Shepherd, L.

McIntosh of Haringey, L. [Teller.]

Shore of Stepney, L.

Simon, V.

Mallalieu, B.

Smith of Clifton, L.

Mar and Kellie, E.

Stoddart of Swindon, L.

Merlyn-Rees, L.

Strabolgi, L.

Milner of Leeds, L.

Symons of Vernham Dean, B.

Mishcon, L.

Taverne, L.

Molloy, L.

Thomas of Macclesfield, L.

Monkswell, L.

Turner of Camden, B.

Montague of Oxford, L.

Wallace of Coslany, L.

Morris of Manchester, L.

Wallace of Saltaire, L.

Nicholson of Winterbourne, B.

Wedderburn of Charlton, L.

Nicol, B.

Whitty, L.

Orme, L.

Williams of Elvel, L.

Peston, L.

Williams of Mostyn, L.

Pitkeathley, B.

Winston, L.

Ponsonby of Shulbrede, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
5 p.m.
Baroness Blackstone Baroness Blackstone moved Amendment No. 156A:
Page 34, line 27, leave out first ("special school").
On Question, amendment agreed to.
Clause 42, as amended, agreed to.
Baroness Young Baroness Young moved Amendment No. 157:
After Clause 42, insert the following new clause—

STATEMENT ON SPIRITUAL, MORAL, SOCIAL AND CULTURAL DEVELOPMENT OF PUPILS
(" . The governing body of every maintained school shall publish, once in each school year, a statement on the spiritual, moral, social and cultural development of its pupils which shall—

(a) describe how the school intends to promote such development;

(b) describe what targets the school has set for this development;

(c) describe what means of assessment will be used to monitor this development; and

(d) report upon the achievement or otherwise of those targets.").

On Question, amendment agreed to.
Clause 43 agreed to.
[Amendment No. 158 not moved.]
Clause 44 [Maintained schools to have budget shares]:
Baroness Blatch Baroness Blatch moved Amendment No. 158A:
Page 36, line 21, after ("is") insert ("calculated to reflect—

(a) the number of children in the school;

(b) the general education needs of those children; and

(c) any special costs associated with the area where the school is based,

and which is").
The noble Baroness said: I beg to move Amendment No. 158A. As the Committee begins to discuss the finance clauses of the Bill it will be of assistance if the noble Baroness is able to answer the straight question: under the new proposals of what is the 100 per cent. a delegation?
Baroness Blackstone: It is a 100 per cent. delegation of the budget for schools that is not designated as the core budget of the local education authorities. That was defined and set out in the document published on Friday.
Baroness Blatch: Schools can be forgiven for the feeling of euphoria around the country. Thanks to the Minister making it available, I have had the opportunity to read in detail the fair funding paper. The news release of the Department for Education made reference to "Byers outlines plans for new 100 per cent. delegation". The expression "100 per cent. delegation" appeared in all newspapers and throughout the press release. I looked very hard at what that meant. I shall return to that in some detail when speaking to these amendments.
In moving Amendment No. 158A I should like to speak also to Amendments Nos. 158B, 158D, 158H and 164A. The first amendment is fundamental and I do not believe is contentious among any party. The principle is that funding for schools should reflect the numbers of children in those schools and their educational needs. Amendment No. 158B is about restricting hold-back. My amendment reflects precisely what was in the Labour Party's general election policy document which stated that no local education authority should withhold more than £50 per pupil centrally from the school's budget. Therefore, I have codified that in an amendment.
Amendment No. 158D refers to the present aggregated schools budget system, and Amendment No. 158H refers to the individual school's budget, which is the new terminology. It does not take a genius to see that there are two different figures there. I shall not move Amendment No. 158D. I prefer to consider Amendment No. 158H, my first amendment having been overtaken by the publication of the paper and my second look at the percentage of delegation to schools by local education authorities which gave rise to Mr. Byers' comment in the first place. He found that the amount of money delegated to schools varied greatly from 85 per cent. in one authority, which was the basic amount, to 96.3 per cent. in another authority. cent. The variation is considerable.
If one takes a 95 per cent. delegation, only 79 of the 131 local education authorities have to delegate between 0 and 5 per cent. more. A further 52 per cent. of the authorities have to delegate between 5 and 10 per cent. more. One is considering relatively modest sums of money that need to pass down to the schools. Those sums are modest in terms of the amounts held by the local education authorities but very significant when they are translated into money for schools. For example, if a local authority delegated at the level recommended in the amendment, it would give £214 more for each child in each school. The figures go down to zero in the case of the best authorities. They are already giving over

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the 95 per cent limit. For many authorities it means a good deal more for each child in the school. I have taken the figure recommended by the Labour Party.
Amendment No. 164A seeks to remove the terms on which service and facilities are provided by the authority for schools maintained by them. That gives enormous scope to circumscribe the money that schools do not get as opposed to the money that they do get. For the sake of the record, I should like to put some flesh on the bones of the press release of the Department for Education and Employment and put into perspective the expectations of schools and those who have welcomed this statement as to what must be top-sliced from the money that eventually finds its way to the schools.
We start of course with non-school expenditure. As everyone will be aware, that includes education for children under five, adult and community education, life-long learning programmes, student awards, youth service, which can sometimes be dealt with nationally, and revenue funding of capital expenditure which is related to those services. That is one block of money that comes off schools' money.
The second block that comes off is what is called—it is an awful word that I do not like—ongoing school-related commitments. That includes servicing and repayment of school-related capital debts, early retirement and redundancy costs that flow from decision taking before April 1999, expenditure on recruitment and retention schemes and arrangements for personal salary protection instituted by the LEA before 1st April 1999. That is another block that comes off the sum of money before it reaches the schools.
Then we arrive at the local schools' budget. That is interesting. It will include strategic management, access, LEA support for school improvement and special education expenditure. That is a factor with which no one would wish to take issue. Let us look at that category in more detail. It covers some aspects of expenditure that LEAs do not have now. It covers preparation for the LEA's educational development plans, including negotiation of targets with schools, which will be a time-consuming business, monitoring and challenging schools' educational performance, implementation of the programme set out in the approved education development plans which of course includes support for schools causing concern, support to turn around failing schools, schools with serious weaknesses, and any other non-delegated activity. Of course it includes some local authority level activities—advising, inspection, and monitoring duties—and, I have not yet mentioned, organisational committees, adjudicators, accommodation for organisational committees and all the trappings for that which will have to be paid for. That is another block that will come off the money for schools. As the document says, all LEAs will continue to need funding for those roles.
We then move on to yet more money. We come to the heading "Strategic Management" I mentioned earlier. That is to pay for the LEA education chief officer, all the staff, its corporate planning for the service, administration of the authority, audit and monitoring functions, the statutory financial functions of
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a local authority and the revenue budget for the LMS schemes, all the preparation and administration of grants, the closure and reporting of accounts, the financial monitoring, the personnel management for staff funded by that expenditure, expenditure on legal services relating to the statutory responsibilities for the local authority, and, of course, cross-service statutory plans—there are many of them—children's service plans, inter-agency work, education business partnerships, asset management plans, and so on. One has to consider also grants funding and matched expenditure for cross-service programmes—for example, the single regeneration budget, in which much is involved—information technology systems, and of course the Standing Advisory Committee for Religious Education which will have its work cut out after the previous amendment. So it goes on.
We come to the sub-heading, "Access." I have not yet finished the items of expenditure that will have to come off the money before we get down to what is called 100 per cent. delegation. That includes preparation for the local authority's asset management plan and monitoring of the LEA's school performance against the plan, the management and implementation of the LEA's capital programme, the planning and supply of school places, including preparation of the school organisational plan, the admissions and appeals duties, and the powers of the LEA. I have mentioned the school organisation committees. There is home-to-school transport which has to be paid for, the provision and administration of clothing grants, boarding grants, educational maintenance allowance, and the welfare service and school attendance functions. There is much more.
Will the LEAs be funded to meet their obligations under the national minimum wage? There will be a cost for local authorities. The Minister knows that. It would be helpful to know if those costs will be met. Will local authorities be reimbursed for the costs that they will have to meet under the national insurance changes for all staff earning over £23,000? I did some research on a number of secondary schools, in particular. It would seem that there is an average of about 2 per cent. on salary bills because the national insurance changes for salaries below £23,000 come nowhere near offsetting the costs above £23,000.
Music is a fairly confusing passage in the Bill. It is to be top-sliced, again from the money that would find itself going to schools. What is the proposition in the paper? Is it that music will be paid nationally, because the money will be top-sliced by the department? Will it be fed back to local authorities on the basis of the provision at the time that the Bill is enacted? In other words, there will be a freeze of musical provision across local authorities at this time for three years to fund that level of provision. So school by school, where music education takes place and moneys are received from their LEAs today, they will continue to receive money at that level.
What about schools like the Oratory, for example, which is on a rising curve of expenditure on music because it has introduced a prep school department? Will it be expected to find that money or will that money

497
be funded? At the end of the three-year period, with the move from guaranteed funding, there is to be a bidding system. Does that mean a free-for-all bidding system or is there any intention of continuing to build on what is there and perhaps move on and expand further?
There are many more, but the final area of expenditure to which I wish to refer is that of the reorganisations that will flow from the demise of any grammar school that is unfortunate enough to lose the ballot that will be triggered by a petition. We all know that the paper insists that if a ballot is successful the local authority must produce reorganisation plans to remove selective education from those schools. Trafford LEA has already expressed some anxiety about that, because it knows that its capital moneys will be pre-empted because there will be a cost.
The land and buildings of many of the grammar schools are owned by trusts. Some establishments will be too small, catering only for single-stream ability, to become comprehensive or non-selective schools. There will have to be some physical reorganisation in those authorities. For authorities with a large number of grammar schools, the cost and expenditure will be considerable.
It is important that we hear from which pool the money will come. All the other heads of expenditure that I have mentioned will come from the overall budget for local authorities. The statement made in the fair funding paper uses Tory rhetoric, and uses it well. The spin doctors in this Government deserve an Oscar. They are past masters at producing the warm glow. They have done it this time. There were letters of congratulation, and favourable comment in the newspapers, although one newspaper, the Daily Telegraph, sussed it out, and did so rather quickly. I congratulate it. It saw immediately that no one had said 100 per cent. of what, and no one had itemised or categorised all the heads of expenditure that would have to be top-sliced or removed or deducted from the sums of money.
When one gets down to the basic information, one finds that there will be more costs centrally for local authorities. It is therefore likely that at the very best the delegation will be at about the level that it is at the moment, but, in practice, it could be worse.
I support this aspect very strongly. Much was made of LEAs being encouraged to produce as much money as possible to local authorities so that local authorities can decide whether or not they buy back services. However, there are a couple of stings in the tail. A school and governors may have proven beyond doubt that they can manage their funding extremely efficiently. The grant-maintained schools are praised somewhat in the document. In those LEAs—we all know where they are—where perhaps 80 per cent. vote to leave their money with the local authority on the ground of economy of scales and the persuasive information received from those authorities, the schools will lose the ability to control their budgets.
I shall later press the Minister very hard to accept one of my amendments. An ex-grant-maintained school, a new foundation school or a school which will become a
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foundation school has produced the evidence that it can manage its funding. Irrespective of how many schools in the authority decide that they would like the LEA to continue to provide services, if the department believe that the school is capable of doing so, the school should be free to control its budget. It should be free to purchase from wherever it wishes, whether from the local authority or elsewhere. That is important.
Returning to the point relating to the figure of 100 per cent., I believe that the headline and the genius of the spin doctors is a confidence trick. My authority gives schools an opportunity to purchase their services back from the local education authority. Quite a number of enlightened authorities do that already. It is not New Labour policy or new old Labour policy. It is existing Conservative policy. I support the fact that the Government agree that it is a good way to manage and that more schools should be encouraged to do that. However, at the end of the day, the figure of 100 per cent. comes very close to the current 85 per cent. to 90 per cent. of money delegated down to schools.
Finally, it is important to know the timescale. We know that the Fair Funding consultation document will not return to the department with responses until, I believe, 30th July. Then there are to be regulations. Then there are to be LEA indicative budgets. At some point schools will need to know precisely what order of additional funds they will receive. There is now a high expectation that schools will receive a great deal more money in the next financial year. If that is so, indicative budgets will be important to local education authorities. They will then be able to pass statistical information to the schools. It will be important to hear whether we shall know by the autumn of this year. Schools will then have some idea before Christmas exactly what their budgets will be.
We hear from the Chancellor now almost on a daily basis that limits will not change; it is the priorities within the policy areas that will change. If that is so, some redundancies will occur in the coming year. If LEAs and schools are to face that prospect, the sooner they know the better. The notices they have to give materially impact upon the costs that have to be found by the LEAs.
The schools have had what amounts almost to a confidence trick played on them. It is deeply depressing. I hope that what the noble Baroness says proves me entirely wrong. I can then join her in lauding the news that was passed down to schools earlier this week. I beg to move.
Baroness Lockwood: The noble Baroness has made rather hard weather of this issue. We are debating the Bill. The document published about a week ago elaborates on some of the clauses. The noble Baroness went through not only the various categories stated in the consultation paper, Fair Funding, but also the additional pages which elaborate those various categories.
Baroness Blatch: I thank the noble Baroness for giving way. Everything I have said is entirely pertinent.

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This is the scheme that will be in place for schools for the next financial year. The clauses in the Bill are the legislative basis for the money that will go to schools in the next financial year.
Baroness Lockwood: I do not dispute that. I agree with the noble Baroness. All I say is that she makes heavy weather of the issue. We are not debating what newspapers say. We are debating the Bill. To help us we now have this consultation paper. I did not hear the noble Baroness discuss the merits of items for which local authorities will be responsible. I merely heard the noble Baroness list all the subjects under those categories. Only a few days ago the noble Baroness and her colleagues argued that we should not have an adjudicator, and that local authorities should be responsible.
In many ways the noble Baroness argues against herself. It is clear that local authorities have important responsibilities. Those are outlined in the document. I am sure my noble friend will reply to some of the factual questions put by the noble Baroness. However, I believe that the document is helpful and valuable to us in our discussions.
Lord Dixon-Smith: I sympathise with everyone involved in this area, whether in LEAs—where I spent a great deal of my life—the Department For Education and Employment, or even sitting on these Opposition Benches. This subject puts one between a rock and a hard place.
The Bill is immensely detailed. There are many opportunities for differences in practice between different education authorities and different schools. The announcement in the consultation paper last week was made in such terms—I read it in the Financial Times—that I believed that everyone would be on a par with a grant-maintained school. That was an initial reaction. It may have been misleadingly reported in the press. But that reaction would have been common across the general broad perspective of the public. We know that that was not the detailed intention. Anyone with his head half screwed on who thought about it for five minutes would have realised that. But the general public, who are not intimately involved in these matters of detail, may not have seen the actual picture.
When the Minister replies—I sympathise with her in her difficulty—perhaps she will give a pledge which might simplify the situation. Perhaps she will state that, while allowing for variations across the country, no school in future will have less of its budget under its control than it had in the past. If we have that assurance people will be able to relax somewhat, and the concerns of many will be diminished.
5.30 p.m.
Lord Peston: I wish to speak to all the amendments in the group except Amendment No. 158C in the name of my noble friend Lady David. I can see why it is in the group, but it involves slightly different issues. Reserving the right to return to the matter, all I shall say today is that I support what she says about school
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libraries. All the other amendments are in the name of the noble Baroness, Lady Blatch, who, not surprisingly, did not speak to my noble friend's amendment.
Perhaps I may begin with two or three matters of principle. The document is called Fair Funding and the Government's intention is that there should be fair funding. The noble Baroness, Lady Blatch, was a member of a government who did not believe in fair funding. When I sat in exactly the place she is sitting now, I spent a great deal of time pointing out that extra money was being found for those schools which already had more and that the Government showed not the slightest interest in those schools which needed extra funding. They invented a peculiar formula to the effect that it was "extra" money and therefore not available to be allocated to the schools which needed it.
First and foremost, the Government are to be congratulated on believing in fair funding. I take it that the Conservative Opposition have come round to the idea of fair funding. The Liberal Democrats have always held views similar to ours. Fair funding is important and I am delighted that the Government are to treat schools fairly rather than singling out some for special treatment. That is germane to the point raised by the noble Lord, Lord Dixon-Smith, who might like to reflect on the matter before this section of our deliberations is over.
Secondly, as a matter of principle, those of us on this side have always been supporters of delegation and the local management of schools. We have argued that on many occasions. I certainly did so when I was responsible for education on the Opposition Front Bench. My noble friend Lady Blackstone can speak for herself, but my recollection is that she took exactly the same view. I know that when I was number two to my noble friend Lady David she took the same view. Therefore, no one has any lessons to teach us about the values of delegation and local management or any lessons to teach Labour authorities about it.
The Government's position is that core functions should remain with local education authorities but, in principle, everything else should be delegated. Perhaps my noble friend will confirm that that is the case.
The reason we favour delegation and local management is that it is a way of operating efficiently and gearing the schools to the needs about which they know; that is, the education of their children. That is common ground between us all. I am not sure whether I used the word "openness", but I like the fact that the new document is an attempt to make the funding formula transparent and to move us away from the mysticism of funding.
I turn to the specific amendments. I shall do my best to keep a straight face and take them seriously. Amendment No. 158A suggests that however we fund we must take account of,
"the number of children in the school; … the general education needs of those children; … and any special costs associated with the area where the school is based".
I decided to turn that on its head. Could anyone believe a funding formula which said, "No, the one thing you cannot take account of is the number of children in the

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school. Of course, you must not look at the general education needs of those children and you must not look at any special costs"? In other words, the amendment is preposterous. Of course, any formula will take precisely those aspects into account in addition to others. I am totally at a loss as to quite what the noble Baroness and the noble Lord have in mind, other than to say that we should always do what is right. I agree with them entirely. So we do not need that amendment.
I am also struck by the provision for £50 per pupil in Amendment No. 158B. The amendment refers to educational expenditure. My noble friend Lady Blackstone knows a great deal more about the matter than I do because she has been briefed and I have not—
Baroness Blatch: Perhaps the noble Lord—
Lord Peston: Is the noble Baroness sure that she wants to intervene?
Baroness Blatch: I am open-minded and will listen to what the noble Lord has to say. I intervene to say that he should not be perplexed about the £50. It is taken from the Labour Party policy document published during the election. Indeed, Mr. Byers thought that no local education authority should hold back more than £50 per pupil.
Lord Peston: I feared that the noble Baroness wanted to say that, which is why I asked her whether she was sure she wanted to intervene. My honourable friend Mr. Byers did not say that. As I understand it—and I am sure that my noble friend Lady Blackstone will remind us—he was referring to administrative expenditure rather than to educational expenditure. The two are not the same. He was saying that there should be a limit on how much should be restricted to administration. He certainly did not mean that that would be the sum which would be retained by the local authority in general. I say "certainly", but as I am a person who always speaks with caution, I am sure that my noble friend the Minister will be able to confirm that. I believe that Amendment No. 158B is peculiar.
I have a final query. The Government's policy is that we are supposed to view as a partnership the LEAs' delegation of schools. That is the Government's philosophy and I strongly support it. Amendment No. 164A implies that there will not be a partnership; there will be a struggle between the two in which schools must be protected from what we might call the appalling behaviour of the local education authorities. There is nothing in the Bill, which I hope will become an Act, that gives the local authority such powers. Therefore, Amendment No. 164A is based on a misunderstanding of what we envisage is developing. However, I rely on my noble friend the Minister to expatiate on that in due course.
It is good that we are making a step forward in the direction of fairness. It will go hand in hand with delegation, which we strongly support, and the sooner
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we can get this part of the Bill over and done with the better because there are one or two interesting amendments to come.
Baroness David: Although my Amendment No. 158C is in the group, it is slightly different from the others and I have chosen to speak to it separately. As soon as I tabled the amendment Fair Funding came out, but I am pleased to welcome the consultation paper as an innovative way of meeting the difficult problems left by the previous government. The desire to create competition between the schools by differentially funding them was wrong. It would be better for the noble Baroness, Lady Blatch, to admit that past funding policies were wrong—the policies she advocated as Minister for Education—and learn from the Government's courageous attempts to ensure that the education of all children is fairly funded and not left to accident and the school they attend.
It would be a miracle if the Government got everything right in the consultation paper. That is the function of consultation. We look forward to seeing the Conservative Party's response.
My Amendment No. 158C looks at the special case of the school library service. It is a pleasure to note that paragraph 44 of the DfEE consultation paper addresses the need to provide centrally a school library service. The Government should be congratulated on giving at long last the right place for schools library services. It is an invaluable service. If used and funded properly, it can be of enormous help to teachers and pupils. Sadly, it has declined in recent years. Out of 121 authorities, only 47 operate with delegated funding. Since the advent of LMS five services have completely closed. We do not want that decline to continue.
The consultation will tease out the nature of "significant majority" voting and it might have been better if the Government had not included a draft letter for head teachers to send to their LEA. I am sure that all head teachers know how to write letters. What sort of message are the Government trying to convey when the Chief Education Officer is called "Jeeves"? Is the Permanent Secretary a "Wooster"? Can my noble friend the Minister please state whether the Bill will have to be amended to take account of significant majority voting? Will this be a decision made by the head teacher or by the governing body? How can it be done to minimise bureaucracy? Will there be separate arrangements for primary and secondary schools? In a typical LEA only 20 per cent. of the schools will be secondary. Will primary schools be able to outvote secondary schools?
Further, will money for library services still be notionally delegated to schools if significant majority voting takes place? That is to say, will the service be based on an entitlement to schools rather than on the resources that end up in the school's budget? Will a school a long way from an urban centre be disadvantaged compared with a school situated next

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door to the school library service office? These are important matters that need to be resolved. I very much look forward to hearing my noble friend's response.
Baroness Byford: I should like to follow the comments made by the noble Baroness, Lady David. My contribution is merely a question for the Minister. Under the new arrangements that were announced last weekend, my understanding is that schools will be able to decide what they do and how they do it. In other words, they will have the freedom to decide whether they use the school library service, whether they use other libraries, buy in books, or whatever. I should like to have clarification in that respect from the Minister when she responds, because I am still a little unclear as to what their role will be in this new concept.
5.45 p.m.
Baroness Blackstone: I should point out to the Committee that I am speaking to Amendments Nos. 158A, 158B, 158C, 158H and 164A. I believe that Amendment No. 158D will not be moved. Between them, these amendments touch on most of the fundamental issues of school funding policy. These issues are of course explored in the consultation paper Fair Funding, which we issued last week. It may be helpful, therefore, if I begin with a few general observations before I move on to the more specific questions that have been raised.
I should like, first, to stress that this is a consultation paper and that we want to hear the views of LEAs and all schools which will be affected by its proposals. It is most important that we should take them seriously. I should say also that Fair Funding which was issued last week, will, I believe, be followed up with a similar consultation document to be issued by the Secretary of State for Wales next week. It is likely that the two papers will be very similar but, obviously, the latter will take account of circumstances which will be a little different in Wales. The consultation period in Wales will run until early August and my right honourable friend will announce his decisions after that time.
Of course I sympathise with what the noble Lord, Lord Dixon-Smith, said about the complexity of many of the matters that we are debating today. Indeed, I am grateful also for his sympathy because they are indeed complex. The expression "100 per cent. delegation" is simply designed to point up a contrast with the present LMS rule. As my noble friend Lord Peston said, the present rule is very complicated and requires each LEA to ensure that its aggregated schools budget—that is to say, the total amount delegated to the schools—amounts to at least 85 per cent. of something called the potential schools budget, or PSB. At any rate, that is the position in England: in Wales I understand that LEAs are required to delegate 90 per cent. of the PSB.
I doubt if it would be helpful to take up the Committee's time with a detailed, blow-by-blow exposition of which central budgets fall within the PSB and which fall outside it. What matters is the effect of the rule. What it means in practice is that LEAs are able to retain central budgets not only for the essential core functions which they have to carry out in order to do
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their own job as LEAs, but also for a range of purposes which relate, in one way or the other, to the operation of the schools rather than the operation of the LEA. That is what we wish to change.
In doing so, the schools and the LEAs have to keep on the right side of the 85 per cent. line. But this still leaves a good deal of leeway. I am afraid that it leads to a situation in which some LEAs, although not all, are holding large central budgets for services which schools could, in principle, obtain from other sources and for which funding has been delegated by many other LEAs. What the "100 per cent. delegation" model seeks to do is to get rid of what one might call this twilight zone, and replace it by a rule requiring full delegation of funding for all services and activities which fall beyond the core responsibilities of the LEA.
I fear that the noble Baroness, Lady Blatch, was just a mite too sceptical about the Government's intentions in that respect. I certainly dispute with her that there has been a confidence trick. I believe that the proof will be in the pudding. We shall demonstrate next year, when they are given their new budgets, that schools will in fact have—and I address this to the noble Lord, Lord Dixon-Smith—rather more control over their expenditure than has been the case than in the past.
As many noble Lords will know, our consultation paper envisages that LEAs will need to retain four main blocks of expenditure so that they can function properly as LEAs. Of course, it is vital that they should be able to do so. Indeed, to suggest that that kind of expenditure should be removed from them—and I am sure that the noble Baroness, Lady Blatch, does not intend that that should happen—would be patently absurd and would damage our education service right across the country.
Those core areas relate to what the paper describes as "strategic management", which means the management of the LEA itself as distinct from administrative and management services provided by the LEA for its schools. I hope that I have made that distinction clear. They also relate to "access" which means, essentially, the various functions of the LEA which are bound up in one way or another with ensuring that school places are available and that pupils can and do attend. Again, that is an absolutely central function which has to be carried out by the LEA. Further, they relate to "school improvement", which we envisage as meaning the cost of preparing and implementing the programmes set out in LEAs' EDPs. The noble Baroness, Lady Blatch, drew attention to that, but EDPs are the key mechanism that the Government wish to use to ensure that standards are raised in all of our schools. Finally, they relate to "special educational expenditure", which in this context should be understood to include expenditure on behaviour support. Again, I believe that Members of the Committee will agree that that must, for the most part, be provided centrally by the local authority.
I am sure that Members of the Committee will appreciate that this is the start of a process which will lead, in the end, to the making of regulations under Clause 45. These regulations will be debated in this Chamber and will, among other things, define the kinds of expenditure which LEAs may retain centrally. I refer

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here to subsection (3)(a) of Clause 45. While I understand the concerns behind some of the amendments which have been tabled, it would be unfortunate if this Chamber were to try to start writing the regulations at this stage by taking detailed decisions as to what should be in and what should be out of them, especially when we are at the beginning of what should be a very important consultation process. I am sure that we shall receive a great many responses that both the Government and other noble Lords who have spoken in the debate will wish to consider carefully.
The other main issue on which a general comment may be helpful is whether quantitative limits should be imposed on the funding which LEAs are authorised to hold back. I should stress that a good deal of this funding is likely to relate to items which are not subject to any upper limit now. Moreover, some of these items—school transport is a very obvious example—would be very difficult to restrict fairly.
Nevertheless Clause 45(3)(b) enables us to introduce these limits. We do not believe that that is a power to be used indiscriminately. In our view if it is to be used, it is best used on a selective basis, in terms of the kinds of expenditure to be subject to limit. Nor is it a power to be used hastily. However, the consultation paper makes it clear—here I refer in particular to paragraph 69—that we shall be prepared to invoke this power if experience shows that there is a need for restraint which cannot be achieved in any other way.
I now turn to the amendments. Amendment No. 158A is not in fact concerned with delegation, but with an equally important issue; namely, the methods used by LEAs in calculating individual schools' budgets. This again will be a matter for the regulations under Clause 46. As the consultation paper makes clear, the Secretary of State is likely to adopt an evolutionary approach in making these regulations. Up to now LEAs have been allowed a fair amount of freedom to decide the detailed make-up of their funding formulae, so long as they comply with certain basic principles. They have had to distribute a certain proportion of the available funding on the basis of pupil numbers, and have been expected to distribute the rest on the basis of objectively-measurable criteria.
That leaves a good deal of local discretion which we want to preserve. The consultation paper states plainly that,
"The Government believes that there is no one right way to allocate resources from LEA-level to individual schools. Different arrangements will be right for different parts of the country".
The paper also makes clear that pupil numbers can be expected to continue to play a prominent part. That is common sense.
Against this background, I turn to Amendment No. 158A. It is, I suppose, rather difficult to visualise a formula which does not seek in one way or another to take account of the factors which the amendment lists. But on closer inspection, the list looks more problematical. For example, it refers to "general educational needs". Is this intended to imply that LEAs
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should not take account of special educational needs? I suspect not, but the amendment might perhaps be understood in that way. It could be confusing. Formulations of this kind in primary legislation have a habit of meaning more than anyone suspected at the time of their enactment.
As the Bill stands, these matters would be dealt with entirely through regulations under Clause 46, and I hope that on further reflection the noble Baroness may agree that this is the wisest course, not least bearing in mind that the first regulations to be made under Clause 46 will require the approval of this Chamber following debate, when we shall have a chance to consider this matter in more detail. I hope that she will therefore see fit to withdraw her amendment.
Amendments Nos. 158B and 158H are concerned with the balance between funding held centrally by the LEA and funding delegated to schools, although they approach the matter in different ways. For our part, and as some Members of the Committee may have gathered from what has already been said, we want to break with the previous practice of regulating this balance by the use of overall percentage limits. This is not because we believe in delegation any less than the previous government, but because we want to bring it about in a different way: by establishing a budgetary framework in which funding follows function.
Amendment No. 158B is rather reminiscent of a proposal which we ourselves made when in opposition. As my noble friend Lord Peston has already said, it sought to restrict LEAs' central expenditure on management and administration to £50 per pupil. It was in no way intended to be a total hold back. This has now been overtaken by the proposals in Fair Funding. As currently recorded in LEAs' LMS financial statement, management and administration is a mix of core administration, which the LEA must undertake if it is to operate at all—I assume that the chief education officer has to be paid—and administrative and management support for schools. The first step, then, is to try to disentangle the strands and get the support services delegated, rather than impose a limit on the whole, and that is what we shall do. Once that has been done, the question may arise as to whether a limit should be imposed on those categories of administrative expenditure which are left with the LEA. But that, we think, must await the availability of much firmer evidence of LEAs' expenditure, based on satisfactory definitions.
Having said that, I note that the £50 limit envisaged by this amendment would apply to educational expenditure. If that is really intended, I ought to point out that LEAs currently retain more than this for SEN purposes alone. Construed literally, the amendment would make it impossible for LEAs to do their job. I am sure that is not what noble Lords opposite want. We see much greater difficulty with the idea of imposing a limit on LEAs' central expenditure as a whole, as envisaged by Amendment No. 158H. Many of the items which will quite properly be left with LEAs under the 100 per cent. model would be difficult to restrict fairly, as I have already indicated.

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It follows that Amendment No. 158H, which seeks to raise the figure to 95 per cent. is even more unrealistic. In this connection I note that the previous government's 1996 proposals would have required LEAs to delegate 95 per cent. of the much smaller potential schools budget. However, the individual schools budget corresponds not to the potential schools budget but to the general schools budget.
I repeat that we are committed to delegation, in spite of what I thought was undue scepticism on the part of the noble Baroness, Lady Blatch. We will be ready to make appropriate use of the powers in Clause 45 to bring this about. But this should be dealt with through the regulations, prepared after consultation and reviewable in the light of experience. The amendments before us would force us from the outset to make what we are convinced would be an inappropriate use of the powers. I hope therefore that the noble Baroness will agree on reflection to withdraw the amendments and leave these matters to secondary legislation.
I believe the noble Baroness asked some questions about national insurance. That is not a matter of delegation but of central and local government negotiations about what the overall funding of local authorities should be in the light of changes that may have been made in an earlier budget. The noble Baroness also asked about reorganisation and about selective schools becoming non-selective. Over the past 30 years there have been many such reorganisations. The extra costs involved are always covered by local education authorities.
I turn now to Amendment No. 164A, which seeks to remove an item from the list of topics in subsection (2) of Clause 47. This subsection is concerned with the content of schemes which will govern the financial relationship between LEAs and the schools which they will maintain. Clause 47 empowers the Secretary of State to make regulations prescribing the topics which schemes must cover, and subsection (2) provides a non-exhaustive list of some of the main topics likely to be prescribed.
The item which the amendment seeks to delete is the,
"terms on which services and facilities are provided by the authority for schools maintained by them".
I think this amendment is based on a misreading of the provision. Paragraph (e) is entirely neutral. It carries no implication whatsoever as to the nature or scale of the services to be provided. The purpose of prescribing this item in the regulations is simply to ensure that, if the LEA is in the business of selling services to its schools, that is done in accordance with the LEA's scheme. I agree with my noble friend Lord Peston that partnership is a key theme.
The reason for bringing these matters within the scope of the scheme is precisely to protect schools. Schemes will require the Secretary of State's approval, and they must be drawn up with due regard to his guidance. As I hope our consultation paper makes clear, we shall make it our business to ensure that LEAs cannot impose onerous requirements on schools—for example, by insisting on excessively lengthy service agreements, or agreements which require schools to buy a lot of
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services which they do not want in order to get the service which they do want. I am sure the noble Baroness would agree that that is not in the spirit of delegation and we shall certainly want to prevent that happening. I hope that LEAs would not in any case want to go down that road. I am sure that the noble Baroness, Lady Blatch, will see that as a desirable objective. In the light of my explanation, I hope that she will feel able to withdraw this amendment too.
I now turn to the amendment proposed by my noble friend Lady David. The Government understand, and are very sympathetic to, the concerns which have led my noble friend to table this amendment. However, we have some difficulties with it. First, and more generally, it tries to pre-judge a matter which really ought to be left to the regulations to be made under Clause 45. The clause itself would look strange if it were amended to single out this one service. The Bill will not have to be amended on majority voting; and there will be separate votes for primary and secondary schools.
It is worth noting that at least 40 LEAs showed their planned expenditure on library and museum services—I am sorry to say, as somebody who has long supported both types of service—as zero in their 1997–98 LMS budget statements. Either those LEAs have no central library service of the kind which my noble friend has in mind; or the funding has been delegated and the LEA provides the service on a buy-back or subscription basis. Even if it could be said that the range of learning materials in schools leaves something to be desired in some of those LEAs, I think it might be difficult to show that was true of all of them. I suspect that in some cases the schools will have very good library provision.
It is therefore difficult to accept the notion of requiring all LEAs to hold back funds centrally to support a school library service, if that is what my noble friend has in mind. But we readily acknowledge the important role played by centrally organised library services in many LEAs, and we are all too aware of fears that some of those services might be put at risk if funding were fully delegated to schools. The suggestion, as I understand it, is that the service's viability could be disproportionately affected if even a small number of schools ceased to subscribe to it. We are sympathetic to that worry.
Therefore, in Fair Funding we suggest that LEAs should be allowed to retain central funding for school library services where a sufficient majority of schools have voted for this. We have not arrived at any final conclusion in regard to the proportion; again, it is a matter upon which we wish to consult. The figure of 80 per cent. has been suggested; however, that does not have to be final. This is a consultation proposal, not a decision. But I hope my noble friend will be able to accept it as an important indication of our concern for the future of school library services, and that on that basis she will feel able to withdraw her amendment.
6 p.m.
Baroness David: Before the noble Baroness, Lady Blatch, replies to the whole group of amendments, I should like to thank my noble friend for what she has

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said. She obviously appreciates the good that the school library service can do. However, I must ask her whether she is not afraid that if these services are not kept with the LEA providing the money for them, they will decline further. They have declined. Would my noble friend not be very upset if that decline continued?
Baroness Blackstone: Yes; this is a decline that began some years ago under our predecessors, and which we certainly want to stem. We are examining the matter and shall be determined in the action that we take following the consultation, when we know the views of the schools and local authorities, to ensure that there is a good library service in those LEAs which wish to retain one and where the schools are in favour of it.
Lord Lucas: The noble Baroness's reply raises a number of questions, and this might be a good point at which to raise them, rather than troubling the Committee with them later. The noble Baroness talked about waiting to see how the pattern of local authority expenditure develops in relation to the items which it is allowed to retain under non-school expenditure and the local schools budget. Will the figures in the categories set out on page 9 of the consultation paper be published and available to us in this House as part of the local authorities' budgeting procedure and reports to the DfEE? Shall we know at a fairly early stage what levels are proposed for strategic management expenditure and other items set out in the document, or are they to remain private between the Government and local authorities? What level of information shall we receive as to how the pattern of expenditure is developing?
How will the figures that are to be provided be audited? There is a mention of that in the consultation paper; however, I believe it refers only to auditing the local schools budget, whereas an enormously important aspect in understanding and controlling expenditure is to make sure that the local authority is putting into the general schools budget all the expenditure that it should be. There has certainly been much avoidance of LMS by shoving off schools expenditure under other general headings within the local authority, and money which should belong in schools budgets has been spent in a way which does not appear in the schools budgets. It would therefore be nice to know that that level, too, was audited, so that we have genuinely comparable figures.
The question of music was raised by my noble friend Lady Blatch. This area causes me concern, too. How, for instance, under this proposal, will the specialist music course at Pimlico School be funded? The school looks after a number of London boroughs and provides a specialist course to which children travel from 10, 15 and 20 miles away. How will that sort of course be funded under the proposed arrangements?
To return to a matter that has puzzled me for a long time, what is different about school transport? The idea that a school is not capable of paying a bus company for a bus seems enormously strange. There is a structure of school transport which could be immediately delegated. The schools could merely buy back what is there, and there would be no difference in total cost or
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expenditure. The system might then develop in a way that was much more cost-effective and which made use of a school's ability to do things in ways that are more innovative and improve its use of money in the same way as happens in other parts of the school budget. What is it about school transport that makes that impossible?
Baroness Blackstone: I shall try to answer all of those questions. Regarding strategic management expenditure, it is right that we should try to provide as much information to Parliament as we possibly can. There will be enormous variations in what that will amount to according to different authorities. However, we can certainly try to provide as much detail as possible on the overall amounts that are likely to be spent in this area. I shall come back to the noble Lord on the likely timing for that. As yet, it is not fixed.
On the question of auditing, local authority financial statements are already audited by the Audit Commission. That will continue. LEAs are under fairly strict auditing arrangements, so there can be no question of schools being audited but LEAs not.
The noble Lord asked about school transport. I think the answer to his question is a commonsense one. There may well be children living in villages quite a long way from the nearest secondary schools but the children may go to a variety of different schools. For each school separately to provide transport to pick up children from 10 different villages, who may be going to three or four different secondary schools in a town which serves a big rural area, would not make much sense. I think the answer to the question is that, for the most part, school transport can be provided more cheaply and effectively if it is provided collectively.
Lord Peston: I am sorry to interrupt my noble friend. As someone who has moved back to a rural area, I have become very sensitive to rural issues. It seems to me that school transport is different from other matters for economy-of-scale purposes. From my observation of what happens in practice, I believe that the noble Lord, Lord Lucas, is right. A local authority does not usually use its own transport; it buys it from the private sector. It therefore meets the objective, anyway. I believe that the noble Baroness, Lady Blatch, referred to returns to scale. Certainly, it was referred to. I believe that this is a straight returns-to-scale phenomenon. I must say to the noble Lord that, although I no longer have children of school age, I am at least as sensitive to the needs of school transport as anyone could be.
Lord Lucas: I cannot see the difficulty in schools co-operating with each other to provide transport. We are in an age of co-operation. Much co-operation is encouraged by the Bill. For the rural areas that I know, the picture that the noble Baroness paints is completely wrong. School transport from the local area around Winchester goes to one school; it does not go to the others. The local authority will not provide transport to any other than the designated school. As far as I know, that pattern is common throughout the country. I am not aware of any local authority which provides rural

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transport to all the secondary schools in a town so that parents have a free choice. I should be delighted if the noble Baroness could inform me of local authorities where that is the practice; I do not know of any.
Baroness Blackstone: I think perhaps the noble Lord, Lord Lucas, misunderstood what I said, or perhaps I did not make it clear enough. The local authority provides transport across the authority for all the schools. It may not take individual children from particular villages to different schools in the town to which they are going. It is a matter of economy of scale. Maybe the noble Lord is right; maybe in the longer term this is something that could be delegated to schools. We should not be ideological about a matter of this kind. It is a matter of what makes good, practical common sense. If, on consultation, we find that those who have to make decisions about these matters share the view of the noble Lord, Lord Lucas, and can demonstrate that it would be cheaper, more efficient, more effective and more sensible from the point of view of the consumers—in other words, the parents and the pupils—and of the schools, in relation to how they make their arrangements, to provide transport in that way, I see no particular reason why that should not be considered. However, I suspect that the arguments will fall in the other direction.
6.15 p.m.
Lord Lucas: The argument of economy of scale applies to almost all these bits of funding which are being delegated. The local authority has always said that it can buy school books more cheaply and that is why it should do so and distribute them to the schools. Much of the success of LMS has been in proving that many of the arguments about economies of scale do not apply in practice because an individual school can use the money much more effectively, even if it has to pay a little more for the lesser quantity that it uses. This is a side issue. I shall not continue to burden the Committee with it.
Lord Tope: I wished to hear the Minister before intervening briefly. The Minister has demonstrated what those of us who have some experience of these matters know already: that this is an enormously complex subject and not well-attuned to simplistic slogans about how much delegation there is. The noble Baroness, Lady Blatch, was right to ask at the beginning: a 100 per cent. or 90 per cent. of what? This is a difficult issue. There was a little bit of, "Who thought of this first?" and "Who is keenest on delegation?" It was suggested first that it was old Labour, then that it was new Labour, then that it was really the Conservatives. I need to put on record that it was actually the Liberal Democrats who thought of it first, and, indeed, as I am certain the noble Baroness, Lady Blatch, will remember, introduced it first, not far distant from her area.
Baroness Blatch: I hope that the noble Lord will give way. If the noble Lord is claiming that the Liberals introduced this in Cambridgeshire in the early 1980s, I ask him to go back and examine the books. I was the
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leader of the authority; I and my Conservative colleagues introduced it, and we were the first in the country to do so.
Lord Tope: I readily accept that I asked for that. I shall not pursue the matter now. We have already been down enough byways, rural or otherwise, tonight. I simply wanted to put the matter on record.
Let us accept that all of us favour the greatest possible delegation. It is what it means and what effect it has that is all-important. The Minister was right on this occasion to say that we must await the results of the consultation, which has only just begun. It is consultation we sought when the Bill was in the other place, and I am pleased that it is taking place. We need to await the results. LEAs, schools and others will have useful and important points to make. It is too early, and probably not necessary, to be too prescriptive on the face of the Bill. In fact, I believe it would be positively dangerous to do that. I shall return to that point.
It is said that schools were delighted to know that there would be greater delegation next year. I am sure that, on the whole, that is true. I am sure that schools are delighted to know that they will have more money next year; it would be remarkable if they were not. But it remains to be seen how much money they will have when they have to buy back services. Whether from the LEA or anywhere else, they are going to buy back services. In my experience, most schools, head teachers and governors know enough about the complexities of the matter not to think that a great bonanza has suddenly been unlocked simply through greater delegation. It has not been, and will not be.
Not all schools welcome delegation. I believe I have mentioned before in this Chamber that I am a governor of a junior school with about 300 pupils. Of course, the principle of delegation is welcomed, but the extra administrative burden and buying back services, whether from the LEA or anywhere else, make my fellow governors wonder whether it is worth their time and worry. While a larger secondary school, with perhaps a larger and more experienced governing body, might take it in its stride, and indeed welcome it, that is not necessarily the case with smaller schools, which are usually primary schools. Let us not be too carried away with the rhetoric that all of this is good and that anyone who has reservations about it must necessarily be wrong. That is not the case.
I worry about the Government being over-prescriptive. What is most important is that the balance and the relationship between the schools and the LEA should be right and agreed mutually between them. I readily accept that that is not the case now in all LEAs. If schools generally feel that they are happy to have less delegation, I believe that that should be a matter between the schools and the LEA. Our role as legislators is to ensure that neither party—more usually the schools—is in any way disadvantaged in reaching that agreement. As to whether it is right for government to prescribe that it should be 90 per cent., £50 per pupil, or any other figure, that suggestion makes good headlines but bad practice on the ground.

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I want to say a few words on the amendment. The noble Lord, Lord Peston, dealt with Amendment No. 158A extremely well, if a little unkindly. He turned it on its head and asked how one could have a formula that did not include those matters. I wondered about that and thought: why only this? Why is there no reference, for example, to special needs, to English as an additional language and to any number of other factors? Indeed, any number of other factors may be in a formula. The danger of putting some obviously right things on the face of the Bill is that one then wonders about the things that are equally right, but are not on the face of the Bill. For that reason alone I feel not only that the amendment is unnecessary, but also that if it were to be on the face of the Bill, it could be dangerous.
I want to say a few words also about the amendment of the noble Baroness, Lady Blatch, in relation to school library services. That is something which I am sure we all strongly value. We all view with concern the decline in school library services in most areas—some much more than others—for understandable reasons. I do not want to provoke the noble Baroness, Lady Batch, again, but school budgets have been under pressure in recent years—I make that as neutral a statement as I can—for all sorts of reasons. LEAs and schools must look at what they spend and where they have to make unwelcome cuts, and I am afraid that the school library service has too often been a victim of that.
The Minister illustrated the difficulty of those matters when she acknowledged that in some of the 40 LEAs to which we were referring it may be a matter that is being dealt with and shown in a different way. The point that that illustrates, which I come across time and again, is the importance of comparing like with like. One of the dangers of just looking at statistics produced in a column for every LEA in the country is that behind those figures are a lot of stories which do not reveal the whole picture. That may attract one's attention and require one to look behind the figures, but we need to do that to make sure that we are comparing like with like; that one LEA is including in those figures the same factors as another LEA. That is often not the case. The illustration involving the library service is just one aspect of that. It happens, for example, with youth services and all sorts of other factors.
The Minister is right to approach this matter with considerable caution. I am pleased that the consultation is taking place. There is a general feeling in all parties and among government and LEAs in favour of greater delegation. I do not believe that that is an issue any more; what is an issue is what is delegated and how it is delegated. In that regard we are right to proceed cautiously with proper and full consultation and to be no more prescriptive than we need to be.
Baroness Blatch: I am grateful to all those who have spoken because it was important to try to elicit information. My starting point was 100 per cent. because that focused everybody's mind on the fact that all money for LEAs will be given to schools and they will purchase back. As the noble Baroness and other
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noble Lords said—indeed, the noble Lord, Lord Tope, just repeated it—it is not as straightforward as it seems and the consultation paper makes that clear.
The merits of what local authorities should be responsible for needs reviewing constantly. One needs to ask whether what they are doing is important; whether it could be done in another way and whether the schools themselves could be doing it. That is all part of the delegation budgetary debate. My noble friend Lord Dixon-Smith will know—his comments showed great understanding—of the debate that goes on within local authorities.
When we devised the early financial delegation system, our starting point was whether we had to do everything as a local education authority. I can remember so often when we were adjusting budgets at central level that schools would say, "If you would give us the money, we could make the policy decisions rather than making one policy decision at central level which pleased some schools and not others". The noble Lord, Lord Tope, is right when he says that that is no longer an issue and I am pleased about that.
The truth is that there are additional expenditure items for local authorities to take on board. There are so many in the Bill that I do not intend to go through all of them. The ones we have discussed so far include the management of the class pledge—an interesting report came out today which will add a little more fuel to that debate. But the organisation committees and the adjudicator will have to be funded by education authorities. Even if the matter was delegated to schools it would not make any difference. It is a cost that would have to be paid and therefore there would not be much choice on the part of individual schools.
The noble Baroness, Lady David, referred to the special treatment of grant-maintained schools. That has been almost a fetish for the Labour Party. It is unfortunate because grant-maintained schools were not specially treated. They volunteered to become grant-maintained schools. They received a sum of money from central funds which was commensurate with the extra responsibilities that they had. It was not just a financial delegation; it was the responsibilities that went with it, including being completely responsible for curricula matters and curricula development. They were accountable to parents, governors and external inspectors without any intervention from the local education authority. The delegation we are discussing does not go that far. The LEA interventional powers are back in the Bill and will relate to the grant-maintained schools as they become foundation schools. Grant-maintained schools received those funds.
I want to ask the noble Baroness a question which will be important in the context of this debate. Grant-maintained schools as they exist at the moment receive as a delegated sum of money from their local authorities 100 per cent. of their share of central moneys. They stand completely outside of the LEA. Some work well with the LEAs and the purchasing, but some do not.
Is the new system intended to bring all other schools up to that level of delegation? In other words, can we expect under the new system that grant-maintained

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schools—as they are now and when they become foundation schools—will be funded at least at the level at which they are presently funded, possibly even greater if there is more money for education, and that all other schools that are not receiving those delegated funds, where they opt for them, will be brought up to the level of grant-maintained schools?
That is an important point. For grant-maintained schools there is an issue of phasing. The noble Baroness talked about phasing this in; that it will not all happen in one fell swoop because it is an extremely big exercise, and I accept that. But does that mean that grant-maintained schools will lose the degree of autonomy they presently have in terms of financial autonomy? Will they go down to the level of whatever the phased level is, and then move back up to a level of delegation as the system is phased in? Or will grant-maintained schools keep their level of financial delegation while the phasing in applies to the community schools and what will be new community schools into foundation schools? That is an important point.
A point I did not make, but which I feel I should make for the record—there are a number of points in the paper with which I agree—relates to insurance. It was dealt with extremely well in the paper. It is a big issue for local authorities and schools. Under a delegated system I am sure that the schools will have much to contribute in the course of the consultation period, which will be helpful. I agree also that there has been a real attempt at transparency. I feel that it will be a more transparent system and I welcome that also. Like the noble Baroness and her colleagues, we have all been concerned about those local authorities which appear to be able to salt away money which ought to go to schools without our being able to find it.
The confusion will arise as people read the words on the page. They will be reassured by the document, as they have been already, but until the local schools budget is known, until schools have some notion about what it is and what it contains, and certainly until figures are put upon it, nobody will be in a position to know what the 100 per cent. will be measured against. It is only when they know what the 100 per cent. will be measured against that they will be able to make a judgment as to whether it is a good or a bad thing.
The noble Lord, Lord Tope, put his finger on another point, which is that what matters is the cash that will go into the schools at the end of the day. Will the level of funding that goes into schools be at least commensurate with the present level of funding, or will it be greater? All the expectations are that it will be much greater because that is what the rhetoric has been from the Government.
The noble Baroness referred to national insurance. That is not a matter of delegation, but a matter for the schools. They have to pay it, even without the level of delegation which the Government are talking about. At the moment, schools pay the salaries of their teachers and if national insurance is an extra cost to them, that cost has to be met. This is definitely a matter for delegation. If it is not, then schools will have to meet it
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out of their internal funds. Every pound they spend on making up the deficit of national insurance costs will be money that will come out of the classroom.
The noble Baroness did not go far enough on grammar schools. My understanding is that within a relatively short time of this Bill receiving Royal Assent, the grammar school provisions will be brought into play. Once a petition has taken place, and a ballot has been successful, so that a school loses its selective educational system, then the local authority has to move straight in and produce a reorganisation plan. The capital costs of that plan, and the revenue costs that flow from it, will pre-empt all its capital budget, whether or not it is a priority for that local authority.
My understanding is that Trafford is concerned about this. It is the one authority that appears to have looked at this issue. Just one ballot will take the grammar schools out of the LEA. The resulting reorganisational costs to that authority will be extensive indeed. As the Bill progresses through this House we shall want to come back with more detailed questions about that.
The noble Baroness did not refer to the Oratory School special music provision, and I would be grateful for a letter about that, and the way in which that fits in to the proposals in the paper.
The national minimum wage was also not mentioned. That will be a cost on local education authorities. One thinks of school cleaning and school catering. There will be costs there. Who will meet them? Are they part of the system? Will that be additional? Does that come within the present limits? We simply do not know.
I was worried about lines 39 and 40 on page 38 of the Bill because that gives more scope for setting the kind of conditions that inhibit the freedom that I believe the Government genuinely want and which we, too, would want.
As to transport, there are some good examples of individual schools and groups of schools arranging good deals on transport. I am not always convinced, having come from local government, that local government necessarily drives the hardest bargain. There is no greater incentive for driving a hard bargain than when you are dealing with your own money. Local authorities are dealing with someone else's money and when a school is driving a bargain it is dealing with its own money.
On the point made by the noble Lord, Lord Tope, about statistics, I think that will be a difficulty as time moves on, where one local authority is delegating money for libraries and another is not. I agree with the noble Baroness that it will be possible, over time, to look at library services or music services in an authority, however they are paid for, whether that is through delegated moneys or paid for centrally, and make a judgment about the quality of those services, and the amount of money going into them. The source of money will be known; it will be there and it will be transparent. That is an issue. The statistics will be difficult to start with but, over time, I think it will work.
We have not had enough information about the timetable. I am concerned that this consultation paper may not be finished until July. If so, when are we likely

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to see the regulations that will flow from it and that will underpin the LEA's allocation system? More importantly, when are we likely to see the LEA schemes which will follow that? When will the schools have some idea of when the system will operate in their authorities? When will they know the sums of money that will be available?
6.30 p.m.
Baroness Blackstone: I meant to answer those important questions earlier. If I intervene straightaway it might be helpful.
The Government hope to be able to reach decisions after the end of consultation in the early autumn—around late September—and that regulations will be made in late October or early November, and that the schools will get their indicative budgets in early January. I hope that is helpful.
Baroness Blatch: That is helpful. It will be very important for LEAs to know that as they have to have their budgets set in concrete by, March or April. It is at that time that people will have a real understanding of the position.
The purpose was to solicit information, and we have had quite a lot. I am grateful to the noble Baroness for that. We need a good deal more. I accept all the chastening remarks that were made about my first amendment.
It is important to note that some local authorities weight pupils by age, some start by counting them, and only a small percentage of the budget is based on numbers; and sometimes other authorities base a very large percentage of the budget on numbers. It is a question of the weighting given to all these factors. The amendment refers to the education needs of children, and subsumed within that are all the education needs that have to be met, including special education.
I finish where I started. When we know what the 100 per cent. is 100 per cent. of; when we know the local school's budget and we have some understanding of the individual school's budget, it would be helpful if the noble Baroness were to come back on one important question which I raised on grant-maintained schools. They enjoy 100 per cent. delegation of central funds now. Will the other schools be phased to come up to that level or will grant-maintained schools, as they become foundation schools, go down to whatever the phased level is at any given time and then be phased up to what is deemed to be the 100 per cent. funding level as the system beds in?
Baroness Blackstone: The Government's intention is that grant-maintained schools should stay broadly at the same levels of funding as they are at present. I hope that answers the noble Baroness's question.
Baroness Blatch: It does, but it means that they will have more central funding and, therefore, more of the central services which they purchase themselves for quite a long time until all the other schools come into play.
There is another important question which flows from that. If there is a ballot in a local authority, and 80 per cent. of the schools vote to have central services rather than
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individual purchasing, does that mean that the authority will go over to providing services centrally and that any grant-maintained school that may be in the 20 per cent. that opted for individual purchasing will lose that control?
Baroness Blackstone: Yes, it obviously would mean that, because the majority of schools, 80 per cent., voted in favour of doing something in a particular way. We would expect a minority of schools to accept that that was the view of the majority of schools. That seems to be the only sensible democratic way of proceeding.
Baroness Blatch: I find that deeply unfortunate. If 20 per cent. of schools—and in many counties that is a lot of schools—have opted to be individually responsible for their own finances and the management of their own schools, but are forced to hand the money back to the local authority, on the one hand, that seems to fly in the face of individual local financial management. On the other hand, if 80 per cent. of schools in an LEA opt for central services, that is the economical, viable figure; then what is the problem about the other 20 per cent.? The LEA has its viable figure. It has 80 per cent. of schools opting for the LEA to provide services. What is the threat from the other 20 per cent.? What stands in the way of that? We shall press the noble Baroness further on that.
I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 158B not moved.]
Clause 44 agreed to.
Clause 45 [Determination of LEA's general schools budget and aggregated schools budget.]:
Baroness Blatch Baroness Blatch moved Amendment No. 158E:
Page 37, line 2, leave out (""general") and insert (""local").
The noble Baroness said: This is a tease. This amendment tries to do the Government's job for them. The Government have now rendered these clauses invalid. At some point they have to change. They have to be brought into line with the proposals. We have a conundrum. We have a consultation paper which was issued this week. It is out for consultation and it is not due back until the end of July. I believe that the Government expect this Bill to have Royal Assent by then. Almost as the ink is dry on the Royal Assent, this Bill will be inaccurate.
I have to express some serious disappointment. We have rafts of technical amendments to the changes being made to this Bill. We had some before us on Monday and we have some again today. To incorporate the technical changes the counsel and officials must be extremely busy rewriting this Bill as we go along. We know that these clauses will change and we know what the nomenclature will be. My attempt may be feeble; I do not know. When the question was asked whether the clauses would be rendered redundant if the new system was eventually adopted, the department said that the changes were only ones of nomenclature and that nothing else would change. I could have said "Amen" to that, because the system of delegation is well established and will continue.
To come back again to the point made by the noble Baroness, Lady David, the schools which became grant-maintained schools did so voluntarily. All of the other schools had the opportunity if they had wanted to but they did not take it. Under this system the grant-maintained schools will be foundation schools or will have a chance to be foundation schools and/or voluntary-aided schools. The other schools continue to have an option. They can opt to stay with the LEA for everything or they can opt to become self-governing. So nothing changes—only nomenclature. This is my attempt to change the nomenclature. I beg to move.
Baroness Blackstone: I am grateful to the noble Baroness for doing the Government's work for them. Tabling these amendments, which seek to bring the terminology of the Bill into line with the terminology used in our consultation paper, is most helpful, but I invite her to withdraw them. However, that is simply so that we can check the Bill for any other instances of the old terminology which will need to be changed. Having done that, we will ourselves bring forward appropriate amendments along these lines at Report.
I should stress that the change in nomenclature does not in itself affect the definition of either of the concepts which are being renamed. The local schools budget will be what Clause 45(1) currently says a general schools budget will be. The individual schools budget will be what Clause 45(2) says the aggregate schools budget will be.
Perhaps I may add a word about the reasons for the changes. "Aggregated schools budget" is really a rather mystifying term and the new label "individual schools budget" characterises it much more clearly. I suspect that the noble Baroness agrees with that. It is the quantum or total amount which is available to be distributed to the individual schools as their institutional budgets. As to "local schools budget", that simply brings out that this is the local education authority's schools budget. Although "general schools budget" is understood by those who are initiated in all this, I am not sure that it conveys very much to others. We will be bringing forward amendments at Report stage to put all this on the face of the Bill.
Baroness Blatch: On the basis of that, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 158F to 158J not moved.]
6.45 p.m.
Lord Swinfen Lord Swinfen moved Amendment No. 159:
Page 37, line 20, at end insert—
("( ) The classes or descriptions of expenditure referred to in subsection (3) above shall in particular include those that relate to—

(a) the local education authority's duties towards children with special educational needs;

(b) services provided by the local education authority to reduce exclusions; and

(c) services provided by the local education authority to increase the inclusion of children with special educational needs in mainstream schools.").

The noble Lord said: In moving this amendment, I wish to speak also to Amendments Nos. 164 and 165. I say at the outset that these are probing amendments.
The purpose of Amendment No. 159 is to ensure that local education authorities are able to hold back from the general schools budget sufficient expenditure to enable them to meet their duties towards children with special educational needs, to provide services to reduce exclusions and to provide services to increase inclusion. The purpose of Amendment No. 164 is to ensure that local education authorities can build into their schemes for delegation the requirement that schools provide information back to them on particular aspects of their expenditure. The purpose of Amendment No. 165 is to ensure that the amount of money delegated to schools to meet special educational needs is made clear and to ensure that the local education authority publishes an expected level of expenditure on SEN. I should like to take the opportunity to thank the noble Baroness, Lady Blackstone, for kindly writing me a helpful letter after the Second Reading debate.
The Government's consultation paper, Fair funding: Improving delegation to schools, has only just come out and I have given it only very swift perusal. However, it is important to ask for some assurances about what is proposed in that paper. I should say that I am briefed on these amendments by the Special Educational Consortium. As this is only a consultation paper, it is quite obvious that there could be changes before regulations and guidance are produced.
I think there is little doubt that the proposals will make much more transparent a number of areas where LEA expenditure has not previously been so accessible to scrutiny. That is to be welcomed. There will, I understand, be clear blocks of expenditure within the local schools budget, one of which would be for special educational expenditure. Within this, it appears that LEAs will be able to fund special educational needs support services and services concerned with the monitoring of schools arrangements for SEN provision, as well as funding,
"to promote inter-school co-operation in relation to SEN, or inclusive of pupils with SEN".
However, it is less clear how preventive work at earlier stages of the code of practice might be funded, as all funding for stages 1 and 2 will be delegated to schools, as will "general" funding for stage 3, "general" being funding for costs other than the support services and "large and unpredictable pupil-specific costs", which could include stage 3. It would be excellent to have some clarification from the Government, particularly on preventive work at the earlier stages which is emphasised in the Green Paper.
With regard to Amendment No. 164, it does not appear that an arrangement for schools to report back on different aspects of their expenditure would be built into the new arrangements. Clearly, we would want LEAs to be able to require schools to report on their expenditure on special educational needs. It may be argued by the Government that a combination of the schools' SEN policy requirement and monitoring by the LEA could achieve this. The latter is proposed as a function for which LEAs can retain funding. But in

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respect of the former—schools' SEN policies—these are notoriously weak, according to Ofsted in what it says about the allocation of resources, and this would therefore make for a weak link in the chain. Again, it would be helpful to have some clarification from the Minister. What information might local education authorities be able to require from schools?
With regard to Amendment No. 165, in the consultation paper there appear to be arrangements that will meet these concerns. Paragraph 5 in the appendix on special educational needs says:
"Without wishing to depart from the principle that a school's delegated budget is an unhypothecated amount, the Government considers it important that each school should be clear what levels and kinds of special need it is expected to meet from its delegated budget, and how much of its budget is notionally attributable to SEN. This is not always the case at present. The intention is that LEAs' schemes, and the revised reporting statement described in paragraphs 83–88, will ensure that LEAs provide each school with details of the way in which its notional SEN budget has been calculated".
In theory, such information could be available now, but it is difficult for schools to pull it out of the morass of figures in the statement that they receive from the LEA. It would be helpful to know what specific arrangements are proposed that might make it more clear. Would a separate letter be issued to schools? Would it state how much of its budget is notionally attributable to SEN? The concern is that if this information is embedded in other figures it will continue to be unclear. I have tried to précis my speech. I am still not very good at it. I was not good at it at school, but I hope that it is one of the subjects that will continue to be taught at school both for verbal and written work. I beg to move.
Baroness Darcy de Knayth: As I have put my name to this amendment, I give it my wholehearted support. The noble Lord, Lord Swinfen, has already covered the matter very thoroughly. As he said, Amendment No. 159 ensures that LEAs can retain enough money centrally to provide preventive SEN services. It is very important to hold back enough money to deal with helping in areas outside the school's competence to judge what is needed. The Special Educational Consortium says that it is aware that nearly all initiatives that are concerned with helping children with, for example, behavioural difficulties, are funded from outside.
It is interesting that on the chart of the Centre for Studies on Inclusive Education, two of the LEAs which are highest on its list of those providing an inclusive mainstream education for children with special educational needs, are Newham and Cornwall. They are at the bottom of the league of the delegators. It is very necessary to have support from the LEA. Newham is very successful because as its numbers of pupils included in the mainstream have increased, so, interestingly, its number of excluded pupils has decreased.
As the noble Lord, Lord Swinfen, said as regards Amendments Nos. 164 and 165, it is essential to be very clear what is delegated for SEN and just how it is being
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spent. Ofsted's report remarks on the confusion and lack of information. My noble friend Lord Rix also has his name to these amendments. He has asked me to give his apologies as he has had to go to an important meeting. As he has sat and spoken alone from these Benches far into the night just lately, and I have not been here at all, I am sure that the Minister will agree that he need send no apology. When speaking in earlier debates he spoke about the anxiety that if money is delegated to help pupils with special needs, it might be bundled into one large parcel and be spent on other things.
In moving this amendment we hope that local authorities and schools will have clear strategies on how money for pupils with special needs will be allocated. I hope that the Minister believes that these amendments are indeed sensible and will be able to respond positively to them.
Lord Addington: I support these amendments. Amendment No. 159 is effectively the substantive amendment. I read them as being about ringfencing for a vulnerable area. As the noble Baroness, Lady Darcy de Knayth, has said, if one has a central body of money it will always be fought over. There is the experience of Parliament and the Treasury when everyone tries to get a certain amount of money and the money is pulled in various directions. That is a much bigger example of what happens when everyone is competing for money.
The provision for special educational needs is often seen as a Cinderella service. It often depends on having teachers of sufficient power and personality within a school or local education authority as to how the funds are allocated. This type of ringfencing will mean that it will be seen where the money goes.
As the noble Baroness also mentioned, if one deals with educational problems it is very likely that one will reduce the number of exclusions because social problems often arise from educational problems. There may be someone in the classroom who is not coping well with the situation because he has an education problem. If it is not dealt with or it is dealt with very late, one has a pattern of established behaviour which is necessary for basic survival in the classroom among the children themselves. That means that the particular child will try to disrupt the classroom to avoid having to face up to the work level. That is a pattern which is accepted by virtually everyone who has anything to do with work in this field. If this kind of amendment or approach is adopted, it will be one step further towards making sure that the correct resources are spent on what was intended in the first place.
Lord Whitty: I apologise to the noble Lord, Lord Swinfen, that I was momentarily out of the Chamber when he began his speech. That was partly due to the fact that the noble Baroness, Lady Blatch, speeded up dramatically in dealing with the last batch of amendments compared with earlier ones. It was also partly due to the fact that I bumped into the noble Lord, Lord Rix. He conveyed his own apologies, but I agree with the noble Baroness that that was completely unnecessary. We know of his deep interest in this area and I am sure that he would have wished to be here to move this amendment.

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As the noble Lords, Lord Addington and Lord Swinfen, have said, much of this matter is to do with transparency so it is clear what are the levels of funding on special education and where they fall. We thought at some length about the place of SEN in the new funding framework. As the noble Lord, Lord Swinfen, said, the consultation document has a quite substantial appendix which deals specifically with this point. The final arrangements will depend to a large extent on the feedback to the proposals. In the meantime I hope that I can give some reassurance on the points raised by noble Lords as regards the objective and the way we believe SEN expenditure should be covered in the new situation.
The regulations to be made under Clause 45 will specify categories of expenditure which can and must be retained centrally by LEAs as opposed to being delegated to schools and place limits on other conditions concerning the amounts so retained. That will be dealt with by regulation, but this amendment seeks to ensure that certain SEN-related categories of expenditure are identified explicitly in primary legislation as being candidates for retention. Amendment No. 159 deals also with exclusions which we shall debate later in connection with another group of amendments.
Our whole approach to this matter under Clauses 45 to 51 is to construct in primary legislation a framework within which regulations, and not primary legislation, will be used to set out the detailed requirements. The Government's intention on this is clear as set out in the consultation paper and particularly in the appendix. As regards SEN, it is based on the view that responsibility for pupils with special needs is shared between schools and LEAs. Therefore, it is absolutely clear that the LEAs need to retain a significant amount of the funding centrally. Responses to the consultation paper will inform what are to be the final details of our approach, but it is clear that some of the expenditure on SEN will be delegated and some will be retained centrally. Putting that in regulations, of course, is a significant improvement on the present situation whereby the control of items retained centrally by LEAs is dealt with entirely by administrative action.
Under these new proposals schools will have responsibility and funding to meet most of the needs of most pupils with SEN. That is consistent with the SEN code of practice which refers to stages one to three being school-based. As the noble Lord said, the funding of stages one and two will be largely delegated and the funding of stage three will be partly delegated under these proposals.
It is also clear that the intention of Section 317 of the Education Act 1996 requires schools to use their best endeavours to secure that a SEN provision is made. However, we recognise that there will be circumstances when a school needs extra funds beyond what it can be expected to find from its budget to meet the needs of a particular child with special educational needs. The LMS consultation paper envisages that funding may be held back to meet specific or unpredictable needs and it allows LEAs to retain funds for support services for SEN. That will ensure that LEAs are able to meet
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schools' reasonable requests for support. Local education authorities can therefore hold back funds. There are measures to promote inter-school co-operation in relation to SEN, to promote the inclusion of pupils with special educational needs into mainstream schools and to provide for behaviour support.
I hope that what I am saying, and what is said in the consultation paper, will demonstrate that the Government are fully aware of the need for LEAs to retain some funding centrally for SEN and related purposes. Our approach to the drafting of regulations, as set out in the consultation document, will be informed by the feedback to that document.
Amendment No. 164 would add a specific provision that the regulations could require schemes to specify information to be provided to the LEA about the use of a school's budget share. I believe that that point also is covered by the Government's approach. There are already requirements on schools to do that. Although some have taken the view that the existing regulations are inadequate, the proposals in the consultation Green Paper should improve the situation.
We agree that schools need to know what is provided in their budget for SEN purposes. The regulations we shall be making under Clause 51, to which we shall come later, will specify the form of budgetary statements to be published by LEAs. They will be able to include a requirement that the funding formula used in relation to SEN should be fully spelt out in schemes for financing schools. In other words, schools will have made clear to them how much of their budget is for SEN purposes. Paragraph 5, the final paragraph of the appendix to which reference has been made, accepts that degree of hypothecation in the budget regime. So I believe that we have met that point.
Although we do not accept that this should be spelt out in primary legislation, I hope that what I have said, and what is said in the consultation document, indicates that the objective which lies behind the amendment is shared by the Government. The final form of the provision will be based very largely on the strategy set out in the consultation document and on the feedback to it. I believe that the regulations will meet most of the concerns expressed in this debate. On that basis, I hope that the noble Lord will withdraw his amendment.
7 p.m.
Lord Swinfen: I said at the beginning that this was a probing amendment to ascertain the Government's position and to seek reassurance. The noble Lord has, on the whole, given me the reassurance that I sought. However, if I may, I shall reserve my position because once my advisers and I have read and studied the noble Lord's response it may be necessary for me to return to the matter to seek further reassurances and make certain that we are on the right lines. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 160 not moved.]
[Amendment No. 161 had been withdrawn from the Marshalled List.]
On Question, Whether Clause 45 shall stand part of the Bill?
Lord Lucas: Many of the matters that I wanted to raise on the Question of clause stand part have already been covered. If the noble Lord, Lord Whitty, can tell me that the information for which I asked earlier as to what data will be provided, and when, on the breakdown of the budgets of individual LEAs, and what work will be done by the Audit Commission or anyone else to ensure that the figures provided are consistent and comparable, I shall be delighted to withdraw any opposition to this clause standing part of the Bill. Perhaps the noble Lord can provide me with such information by way of a letter before Report stage.
Lord Whitty: Perhaps the noble Lord and I can have a word about exactly what information he will require before Report stage. I shall be happy to assist him.
Clause 45 agreed to.
Clause 46 [Determination of a school's budget share]:
Baroness Blatch Baroness Blatch moved Amendment No. 161A:
Page 37, line 24, at end insert—
("( Every maintained school shall have the right to receive and have control over its full share of the individual schools budget.").
The noble Baroness said: This is an amendment about which I feel extremely strongly, particularly given the reply of the noble Baroness a moment ago about grant-maintained schools which wish to continue to manage their own affairs but which will lose that right if they happen to be in an authority where most schools vote not to become self-managing. It is not inconceivable that that will continue to be the case. The noble Lord, Lord Tope, rightly said earlier that even when schools were completely free to opt to become grant maintained, many considered that option positively and then quite positively decided that they wished to remain within the bosom of the LEA. It is also conceivable that the economy of scale argument will be used persuasively by LEAs.
I return to the example of the Oratory School which is in an authority where 80 per cent. of the schools could easily vote to stay with the LEA. The Oratory School has proven beyond any doubt that it is able to manage its own affairs, but it may not be allowed to do so. That could happen in any other authority.
Grant-maintained schools have now become accustomed to running their own affairs. What will happen to schools in the foundation school category which, over time, build up expertise and are successful at, and philosophically enjoy, managing their own affairs? Eighty per cent. of schools in an authority may create a block of economically viable schools for which the LEA is to run the services. But are they then to deny the other 20 per cent. their right to be self-managing for no better reason than saying, "If the LEA controls 80 per cent., it might as well control 100 per cent.?"
The amendment is now crucial. My understanding is that grant-maintained schools have enjoyed self-governing status. I believe that one of the reasons they have gone along with what the Government have been saying about foundation schools—I think that they are wrong; I do not think that they should have been quite so trusting—is that they believed that at least they would continue to be self-governing, but under the foundation school system. There is now a proposition that if 80 per cent. of schools decide that they would like to remain with the LEA, all schools would have to be subject to central provision from the LEA. I know that that is still a proposition and that the paper is out for consultation, but I think that it is now a point of principle that we must establish the right of every maintained school to continue to determine its own affairs. I am not speaking only about grant-maintained schools. I use grant-maintained schools as an example simply because they have visibly proven their worth at running and managing their own affairs. Any school in the maintained sector which opts to have a delegated budget and makes a success of it should continue to enjoy the right to run its own affairs.
If that cannot be guaranteed by the Government, we must question many of the things that have been said to the grant-maintained sector. The Government have said, "Don't worry; under the foundation school system you will continue to enjoy delegated functions and the system of self-governing at which you have been so successful." However, we now know that the Government are also saying, "That is subject to the other schools in your authority not opting for self-governing status".
The current system is voluntary. Any school in the land may opt to become grant maintained. By the next stage of the Bill I shall have done the arithmetic, but in many local authorities 80 per cent. of schools are still with the LEA. If they have already chosen positively not to have a full delegated budget, it is conceivable that they will continue to do that. They may wish to continue to stay with the LEA because they are completely satisfied with the LEA's provision. That will continue because nothing in the Bill forces schools down the road of self-regulation. That is why I believe that grant-maintained schools are at much more risk than has hitherto been judged to be the case.
I hope that tonight the Government will respond positively and give every school the right to receive, and to have full control over, its full share of the budget. I beg to move.
Lord Whitty: This amendment appears to be directed at the question of how under the new system LEAs conduct their relationship with all schools. I believe that it is a fairly broad brush amendment. I am not clear from the comments of the noble Baroness whether it is intended to be quite as broad brush as it appears. The noble Baroness dealt primarily with the situation of existing grant-maintained schools. Clearly, there is a serious difference of strategy and opinion here. The whole point of the new funding arrangements is that we wish to bring the current grant-maintained schools back into the overall umbrella of local education authorities

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while delegating budgets to all schools in a new relationship with LEAs with maximum funding ability in relation to all schools.
As to the 80 per cent. ballot, we are consulting. It is not intended to be an indiscriminate, across-the-board provision. We shall consider very carefully which services of the local authority are to be covered by it. We want all schools to be in a different relationship with the local education authority with the delegated financial arrangements that flow from that.
Baroness Blatch: The Government are not delegating money to all schools but making it available to them. Schools can opt for self-government or pass the money back to the local authority to continue to run the schools. Unless the noble Lord is putting forward a new policy on the hoof, nothing in this Bill does anything other than allow money to be devolved down to schools, with a good deal of encouraging rhetoric from the Government. The Government would like to see greater delegation to schools, as would I and the noble Lord, Lord Tope, and his noble friends. The noble Lord is wrong in what he said. If, when the requisite number of schools vote to have their services provided by the LEA—the percentage may be 70, 80, 90 or some other figure—a school that is presently self-governing will lose control over its central finances.
Lord Skidelsky: I support my noble friend. Why should schools in an LEA wanting to remain self-managed be compelled to surrender that right because 70 or 80 per cent. want them to do so? The noble Baroness the Minister says that this is democratic. That appears to be the basis of the argument. I do not believe that democracies have any right to compel minorities to surrender liberties unless the exercise of those liberties injures the interests of those minorities. If 80 per cent. of people vote to pay taxes clearly the majority has the right to compel the minority because the 20 per cent. cannot be excluded from the benefits that are provided by the taxes. That is a very clear philosophical argument as to why the majority should prevail. What is the argument in this case? If 80 per cent. agree, why should 20 per cent. be brought into the system? I do not believe that that is democratic; rather, it is illiberal.
7.15 p.m.
Lord Whitty: To revert to the point raised by the noble Baroness, we are delegating budgets to all schools. We seek to introduce a regime that will apply broadly to all schools. In many situations former grant-maintained schools may wish to continue to provide internally services that would still be provided centrally by the local authority. Some schools will wish to buy into them and others will not. The 80 per cent. simply refers to the fact that in a very limited number of cases it will not be sensible for particular services to be provided unless 100 per cent. of the schools do so. We are talking about limited services, not local authorities controlling everything that grant-maintained schools previously controlled. If the vast majority of schools wish to buy back into a limited service in certain
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circumstances it will be sensible for all schools to do so. But we do not envisage that to be a broad-ranging power across services or areas.
Lord Skidelsky: Can the noble Lord give an example of the services he has in mind which have to be provided either to all schools or none at all?
Lord Whitty: We have had a lengthy debate about transport. It could be that there was a transport system run by a local authority and it was judged that that could not be provided centrally unless all schools bought into it. That is a hypothetical example, and there may well be others. If the noble Lord wishes, I shall ask for advice on what other services may be considered in these circumstances. I envisage that in certain small education authorities library services may be part of it. There may be a number of services that are not viable unless all schools buy into them. I believe that it is only in those circumstances that the 80 per cent. provision is intended to apply. However, we are still consulting on the whole area.
However, the general proposition—that is what I believed was addressed by this amendment until the noble Baroness spoke about the 80 per cent.—is that there will be delegated budgets for all schools, both ex-GM schools and ex-local authority schools, and control over those budgets by the local education authority will be as limited as possible. However, the amendment as drafted appears to be designed to deny LEAs the basic right to put in place safeguards over the deployment of those budgets or to do away with the right of LEAs to suspend delegation for mismanagement in certain circumstances under Clause 50 and Schedule 15. If the amendment is as wide ranging a prohibition as that, the Government certainly cannot accept it. I hope that the noble Baroness will understand that and on reflection withdraw her amendment. She may wish to consider alternative wording at a later stage. If the noble Baroness intends to achieve a more limited objective we are prepared to look further at that and consider the possibility of a more modest amendment at a later stage. The amendment as drafted appears to impose a very drastic limitation on the powers of LEAs.
I appreciate that there is some anxiety in parts of the former GM sector as to the balance between local authority control and their own delegated powers in future. We do not want the return of GM schools to the local authority sector to involve the re-imposition of unnecessary controls. But in the new circumstances there must be a degree of accountability, just as there was a degree of accountability for the management of the budgets of GM schools under the rules and procedures of the Funding Agency for Schools.
Inevitably, there will need to be changes in the way in which accountability operates. Because of the statutory responsibilities of local authority chief finance officers under the Local Government Act, LEAs will require a degree of flexibility to decide on such matters as accounting and audit requirements. We intend that they should be reasonable and clear to the schools when operating delegated budgets. We are considering how the best features of the package used in the GM sector—

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the rainbow pack system—can be transferred not only to ex-GM schools but across the board to local education authority schemes.
I believe that that provides some reassurance that local education authorities do not intend to be heavy handed in their exercise of what ultimately must be their accountability for the schools budget. Our aim is a light touch regime supported by no more restrictions than are properly necessary. We must safeguard propriety and accountability. We must ensure that LEAs are not exposed to unfair risks on their own resources and assets.
Action or inaction by a governing body could leave an LEA with a liability to pick up. LEAs are entitled to protection from that. We want to confine all this to cases where LEAs are genuinely at risk. That is the philosophy behind this proposal. We cannot accept the amendment as drafted because it appears to remove even that light-touch control that we envisage for LEAs under the new regime.
The Lord Bishop of Ripon: Before the noble Lord sits down, he returned briefly to the subject of transport. Perhaps I may make a point that I should have made earlier. I speak here on behalf of my Roman Catholic colleagues. Many Roman Catholic schools have a considerable number of pupils requiring transport. Were there any thought of transferring that aspect of the budget from LEAs to schools, it would raise huge problems for some of those schools. If there is the slightest thought that that might be a possibility, the Catholic Education Service should be consulted.
Lord Whitty: I take that point. Part of the consultation will no doubt yield the concerns of the Roman Catholic schools about that prospect.
Baroness Blatch: I am deeply depressed by the noble Lord's answer on that. I say to the right reverend Prelate that I do not wish to cut across that issue, because my understanding is that at the moment the Government presume in favour of schools' transport money remaining with the local authority. I am talking about those funds that the Government themselves envisage transferring to the budgets of schools. They are then giving schools the option to purchase from wherever, including local authorities.
The noble Lord gave some examples. I have read the words on the page. There will be some services about which the local authority will say, "If we are only left with a rump of schools to provide for, we regard it as uneconomic to provide the service". Therefore they may take a vote in the primary and/or secondary sector to get an economically viable unit. If they achieve their 80 per cent., they will have an opportunity to take back that service. The answer I received to my first question from the noble Baroness was that that would mean that 100 per cent. of the schools would have to do it.
The noble Lord has not said that the subjects for delegation will be limited to prescribed areas. That is new. It is not in the paper. The paragraph preceding the paragraph that mentions the 80 per cent. merely says
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that some LEAs have argued that without a minimum level of buy-in from schools—it is claimed that this level is sometimes at a high percentage for economic reasons—they cannot afford to run any service for any school. While the Government do not wish to preside over any control by the majority, they also wish to avoid the actions of a minority, preventing those schools from having what they want. In other words if most schools—that is, 80 per cent. is the suggestion—want a particular service from the LEA, the view is that all schools shall have it.
I did not mean by my amendment that schools which fail in self-management should continue to have full control over their budgets. There are measures in the Bill which override that anyway. There are provisions in the Bill which allow special measures to be taken where a school fails in its self-management duties. I wish that to remain because, whether or not they have delegation, that is important.
The Minister is now saying—this is important for the schools which are listening to the debate or which will be reading it—that a grant-maintained school and/or a foundation school, or even a community school, in the future, may opt for self-management. In other words, it opts to keep all its central funds to purchase services. If there is a vote on any particular service—the noble Lord mentioned two, but, as I say, there is no definition—in a primary and/or a secondary sector and 80 per cent., or whatever the required percentage is, votes to have the service provided by the LEA, those schools will lose that degree of delegation. If that is what he is saying, there will be deep consternation about that outside this Chamber. I ask the noble Lord to answer me on that point.
Lord Whitty: I thought that I had said earlier that the areas to which the 80 per cent. suggestion would apply would be limited and not indiscriminate. It would not be down to individual local authorities to decide which areas could be subject to that. The Government could prescribe which areas would be subject to the voting procedure. The LEA would not be able to decide for itself.
There is some misunderstanding here. When we started, the presumption seemed to be that we were talking about buying back into all centrally-provided local authority services, and that the 80 per cent. provision would relate to that. In fact, we do not envisage a large number of services being subject to that provision. We are still consulting as to whether we need the provision at all. It does not affect the vast bulk of the new financing arrangements.
The noble Baroness is starting fears in former GM schools, and possibly elsewhere, that they will be overridden in areas to which it would be extremely unlikely that this would apply. If the noble Baroness wishes to consider the amendment as it stands—it is a broader amendment—she will no doubt come back to it. There will be other parts of the Bill to which the voting procedure would be more appropriately applied. It is not our intention to override the minority of schools in the

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vast majority of cases. When we say "delegation", we mean delegation. When we say a light hand from the LEA, we mean that.
Baroness Blatch: The noble Lord totally misinterprets me. He has done it every time he has returned to the Dispatch Box on this point. I am not talking about the whole package of delegation. There will be services within delegation for which the local authority may take a view that it needs 80 per cent. of the schools or it cannot cope. I give another example. The schools in a local authority, especially a relatively small local authority, may decide that they want to have payroll services from the local authority. The local authority may say, "Of course we will provide payroll services, but unless we get a certain percentage of schools in this area to agree it, we cannot provide them".
That then becomes an issue for this majority voting. The noble Lord is making policy on the hoof. He is now suggesting that it applies to one or two subjects only. Is it one or two? Which are they? These are only down here as examples. I have given another example. There may be many more examples of where a percentage of schools wants a service from the local authority. There may be some schools—I suspect that the noble Lord, Lord Tope, is right—that will want the local authority to continue to provide all their services. They do now, and they may want that to continue in the future.
In future, local authorities will have to turn round and say to them, "We need an economically viable number of schools". That will trigger a ballot in the primary or the secondary sector. If the noble Lord is saying that we are going to discount certain elements of delegation, fine, let us have what they are. They are not in the consultation document. The noble Lord has not given me a straight answer. Is the noble Lord saying that if a school enjoys a level of delegation, and a vote takes place on any aspect of delegation, and the vote reaches the required percentage—whatever that may be—all schools will lose their right to have control over that particular service?
Lord Whitty: The noble Baroness referred earlier to paragraph 59 of the consultation paper, where all this is set out. It describes that the Government would welcome views on that issue, in particular the 80 per cent.—as we are calling it—formula in relation to particular services. We do not prescribe the services there. The noble Baroness is correct. We do not prescribe them for the very good reason that we are consulting as to whether schools and LEAs think that this provision should apply to certain services.
However, at the end of that consultation, such services will become subject to majority voting only if the Government prescribe them. We will not prescribe them unless the result of the consultation is that there is widespread support for some services to be treated in that manner. I cannot go further than that in describing the services to which it would apply, except by example.
7.30 p.m.
Baroness Blatch: I know that it is a consultation paper. I have said it endlessly over the course of the afternoon. I know that the consultation does not finish until towards the end of July. If the Bill is passed, it will have had Royal Assent by then. Under the proposals, I wish to encode on the face of the Bill the right of a school which has enjoyed self government not to have that right of self government taken away from it. I do not know what the Government have to fear. The local authority may require 60 per cent., 70 per cent. or 80 per cent., and receives that percentage. The local authority has its viable number. What is the problem in allowing the other 40 per cent., 30 per cent. or 20 per cent. to be self governing?
The Government have nothing to lose. Those schools which opt for self control have it; and those schools which opt for self government have it. Those self governing schools which have enjoyed their freedom for so long will come into a sector where all the promises made to them in the back room will seem empty.
The noble Lord puts much store on the "light touch authorities". "Light touch authorities" is an exhortation. There is no breach for being medium or heavy touch other than promising legislation in the future. I know that the Government, rightly, have an antipathy to local authorities' packaging; I agree with them. If a local authority genuinely believes it needs an economically viable number, and puts to the vote any one single service, or a selection of services, the schools lose their autonomy. I am fighting for the right of the schools to keep their autonomy.
Lord Whitty: I do not think that the noble Baroness's amendment achieves the objective she states. There is a clear non-meeting of minds on this. The noble Baroness does not want to wait until the end of the consultation period. She does not accept that even in the most acute circumstances the substantial democratic majority of schools in the area should decide the issue. She does not accept the central provision of the changes. We are not concerned simply with those schools which were GM schools. We want a regime which applies to all schools. The Opposition have never accepted that. That is reflected in the contributions from the noble Baroness to the debate on the amendment.
In addition, the noble Baroness is hoping that we shall take a decision which will pre-empt the outcome of consultation. I do not think the amendment achieves what the noble Baroness intends. It could have a damaging effect on the new framework which I do not think she intends. Nevertheless at the end of the day it is clear that the Opposition have not accepted that the new framework will attempt to treat all schools equally. Schools will come from different backgrounds. They will take clearly different decisions as to how they will conduct their budgets, the degree of delegation and the buying back of services that they want.

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That level playing field does not seem to be accepted by the Opposition. That is a central problem on the Bill. However, the amendment does not do what the noble Baroness wishes. Perhaps she will see fit to withdraw it.
Baroness Blatch: I shall not withdraw the amendment at this moment. The noble Lord continues to misinterpret me. I am becoming quite cross about that. The noble Lord said that we do not agree that schools should be treated equally. We do agree with that. We agree that all schools which presently do not enjoy self government should have the opportunity to become self governing. We agree with delegation; we agree with further delegation; we agree with the further development of delegation. We have had arguments about what is meant by 100 per cent. delegation. That is history. We shall wait to see what happens in practice.
The noble Lord says that I do not accept the democratic majority. I accept the democratic majority. I argued for accepting the democratic majority. If 80 per cent., 70 per cent. or 60 per cent. (whatever is the required percentage of people) vote, and it is economically viable for the local authority to provide one or more services for that unit, I accept that and believe it to be right. What I do not accept is that that majority should drag the other 30 per cent. or 40 per cent. with them. If it is an economically viable unit for the local authority, why does one need the others? It is pure administrative tidiness. What is wrong with having your cake and eating it? What is wrong with allowing the schools which want an LEA service to get it from the local authority, and those which want self government to have it? I simply fight for the right of a school which enjoys self government, and has proved itself able and skilled in managing its own affairs, not to be dragged into a situation which it does not want.
I remind the noble Lord that in the grant-maintained schools the parents voted for self government. The 80 per cent. of other schools would take that facility away. It seems absurd. The noble Lord continues to misinterpret me. The democratic majority can have its way. I fight now for a minority. I refer to allowing community and foundation schools to enjoy the same delegation, and the same level of financial management which has been enjoyed until now by grant-maintained schools. I accept what the noble Baroness says: that there will be no diminution in the level of delegation for grant-maintained schools; and that all other schools will be brought up to the level of GM delegation. I accept that and think it right. I accept the transparency. I accept much of what is written in the paper, although I have argued about the mechanics of delivery. I find it extraordinary that the Government set their face against an individual school having the right to control its own budget.
My amendment is not flawed. It achieves the right for an individual school to have control over its own budget. If the Government are prepared to accept that, I shall
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bring forward an amendment to ensure that if any school fails, it shall be subject to the special measures that are set out in the Bill, which we support.
Lord Whitty: I do not think that we should carry on this ding-dong much longer. Clearly the noble Baroness has misunderstood me. She claims that I have misunderstood her.
In the vast majority of cases, we are proposing that schools will be able to do exactly as she proposes and decide whether or not they buy back into local authority services. However, the noble Baroness keeps going back to special treatment for GM schools, which we do not accept. Paragraph 59 relates to a very limited area of schools. It in no sense destroys the principle of delegation. It in no sense destroys the principle that we are giving delegated powers to all schools, whatever their previous capacity. The noble Baroness is making a mountain out of a molehill on an area which will be limited in effect even if the consultation process yields a positive result. Therefore it would be extremely misleading for her to take through such a draconian measure and one which she admits would require substantial amendment in order to meet the problems I have outlined.
Baroness Blatch: I shall test the opinion of the Committee. My amendment is modest. It simply asks that each school shall be given the right to control its budget once it has been given to it. I rise to protect the minority when an economically viable number of schools have voted to have LEA services. I seek to protect the position of those schools. The end of the consultation process will be too late. If the Government hedge now because they cannot go along with the amendment, I am deeply suspicious that they do not intend to agree with the amendment after 30th July. Therefore I wish to test the opinion of the Committee.
7.39 p.m.
On Question, Whether the said amendment (No. 161A) shall be agreed to?
Their Lordships divided: Contents, 21; Not-Contents, 61.

Division No. 2

CONTENTS

Baker of Dorking, L.

Miller of Hendon, B.

Blatch, B.

Northesk, E.

Byford, B. [Teller.]

Park of Monmouth, B.

Carnegy of Lour, B.

Pilkington of Oxenford, L.

Dixon-Smith, L.

Rennell, L.

Glenarthur, L.

Seccombe, B. [Teller.]

Skelmersdale, L.

Hardwicke, E.

Skidelsky, L.

HolmPatrick, L.

Vivian, L.

Jopling, L.

Young, B.

Lucas, L.

Zouche of Haryngworth, L.

NOT-CONTENTS

Acton, L.

Berkeley, L.

Addington, L.

Blackstone, B.

Allenby of Megiddo, V.

Borrie, L.

Archer of Sandwell, L.

Callaghan of Cardiff, L.

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Carlisle, E.

Hughes of Woodside, L.

Carter, L. [Teller.]

Irvine of Lairg, L. [Lord Chancellor.]

Chandos, V.

Clinton-Davis, L.

Janner of Braunstone, L.

Cocks of Hartcliffe, L.

Jay of Paddington, B.

Currie of Marylebone, L.

Jenkins of Putney, L.

David, B.

Kennedy of The Shaws, B.

Davies of Coity, L.

Lovell-Davis, L.

Dean of Beswick, L.

McIntosh of Haringey, L. [Teller.]

Desai, L.

McNair, L.

Dixon, L.

Maddock, B.

Dubs, L.

Mar and Kellie, E.

Evans of Parkside, L.

Molloy, L.

Ezra, L.

Monkswell, L.

Farrington of Ribbleton, B.

Ponsonby of Shulbrede, L.

Gallacher, L.

Puttnam, L.

Gilbert, L.

Randall of St. Budeaux, L.

Gladwin of Clee, L.

Richard, L. [Lord Privy Seal.]

Grenfell, L.

Simon, V.

Hanworth, V.

Stoddart of Swindon, L.

Hardie, L.

Symons of Vernham Dean, B.

Hardy of Wath, L.

Tope, L.

Harris of Greenwich, L.

Tordoff, L.

Haskel, L.

Walker of Doncaster, L.

Hilton of Eggardon, B.

Wedderburn of Charlton, L.

Hogg of Cumbernauld, L.

Whitty, L.

Hoyle, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.47 p.m.
Lord Haskel: I beg to move that the House do now resume. In moving this Motion, I suggest that the Committee stage begins again not before 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Energy Policy
7.48 p.m.
Lord Ezra Lord Ezra rose to ask Her Majesty's Government what progress is being made in the formulation of an energy policy.
The noble Lord said: My Lords, I thank all noble Lords who have waited until this late hour to take part in the debate. However, it is earlier than it would have been had we tried to debate it on the previous occasion that was scheduled when we gave up at about midnight.
The purpose of the Question is to ask the Government when they propose to introduce a co-ordinated energy policy. It is a matter on which they spoke many times when in opposition. They are in the process of carrying through a number of important reviews. The issue is whether there should be a general policy within which current and future reviews will be carried out rather than wait until various aspects of energy policy are dealt with and then try to bring them together. That issue is implicit in my Question.
The studies which are under way or have been completed include the utilities regulation report, which touches on this subject. The inquiry into energy sourcing and power stations is reported to be near completion. There is the climate change programme, the inquiry into
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the electricity pool, and the review of renewables policy. There may be others to which the noble Lord will wish to refer.
I should have thought that by now the elements of an overall energy policy are becoming clear and that there should be no further delay in introducing one. In my opinion, there would be four dimensions in such a policy; the competitive dimension, the social dimension, the security dimension and the environmental dimension. The skill will be in reconciling those various aspects because they will not necessarily be compatible.
We start with competition, which is acknowledged to be the basis of energy policy at present. Indeed, we in Britain have led the way. The noble Lord, Lord Wakeham, who, I am glad to see, will be taking part in the debate, was very much involved in that process. The policies now being applied here in energy are being taken up progressively within the European Union with the recently announced electricity and gas directives.
However, competition cannot solve all the problems in the energy sector, as indeed the recently published document on the regulation of the utilities made clear. For example, there is the case of the networks—whether it be wires or pipes—which must be subject to regulation because they are operated by monopolies. But there is also the social factor to be considered. That came out clearly in the report on regulation.
I was disturbed to read in an article in the Financial Times of 28th February that the opening up of the electricity and gas markets has led to a degree of mis-selling and to the misleading of potential consumers; indeed, some quite serious cases were mentioned. That sort of mis-selling, which, unfortunately, we have had in the pension sector and in other financial sectors, now seems to be spreading. Therefore, some regulation in that respect will be required.
However, the social aspect of energy policy goes deeper than that, especially as regards people who are disadvantaged. They have to be specially cared for. It is a sad fact that there are still many homes in this country inhabited by people on low incomes, especially the elderly, which are inadequately heated because they were built a long time ago and their owners do not have the necessary resources for improvement.
The home energy efficiency scheme, which was set up to cater for that social need, has gone a long way towards doing so. Unfortunately, its resources were cut by 30 per cent. by the previous government and it is now a question of whether the present Government, who opposed that cut, will restore it. In addition, there is the approach that my noble friend Lady Maddock introduced with the Home Energy Conservation Act, which has stimulated local authorities to do much to improve energy efficiency particularly for the benefit of those on low incomes.
In turn, that leads me to the question of security of supply. While there is no shortage of energy at the present time and prices are relatively low, nevertheless, those of us who have been in the energy business all know that the situation can change very rapidly. It is an important element of energy policy that there should be

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some degree of security. That is where the present review affecting the coal industry comes into the picture. I hope that the Government will propose a solution which will enable coal not only, in the short term, to face up to the present difficulties but also, in the longer term, to continue to be a major source of supply in this country so as to provide an element of security.
However, if that is to be done it is important that there should be further developments in the application of clean-coal technology. Unless coal can be used in ways which are acceptable from the environmental point of view, it will not be possible to see a long-term role for coal. That leads me to the environmental aspect to which I referred—namely, the fourth aspect of the problem—which will need very positive action on the part of the Government.
We have a market situation which is not in the least encouraging people to save energy. If it is considered that the climate change problem is a serious one, then positive action must be taken. Let us hope that that will emerge from the review currently being undertaken. There will be need not only for legislation; resources will also be required. The issue of a levy on gas and electricity must be seriously considered. There was a gas levy at one time which raised substantial resources for energy efficiency schemes. But it was discontinued. I hope very much that it will be looked at again; otherwise, the necessary resources will not be available to carry out the sort of improvements that are required. Such levies can be relatively small and will not seriously affect electricity and gas bills.
Further, there needs to be a degree of local action in such matters. This is where my noble friend's Act comes into the picture. I am involved in an initiative which is trying, on a local level, to achieve the sort of energy savings which the Government have in mind nationally. It is based in Nottingham. We have formed the Nottingham Energy Partnership, which I am glad to say the noble Lord, Lord Clinton-Davis, will be publicly launching before long. It aims to activate all users—that is, domestic, commercial, industrial and transport—towards achieving energy savings.
I feel that the time has come for the Government to put together various strands of policy. They are becoming very clear and the issues are pretty obvious. As I said at the beginning, the skill will be in bringing them together to make a coherent whole.
7.56 p.m.
Lord Hardy of Wath: My Lords, the House will be grateful to the noble Lord, Lord Ezra, for initiating this debate. Indeed, as we all know, he brings experience and knowledge to these matters in a very high degree. I do not wish—and the rules of the House will not allow me to do so—to speak at great length. Some of the points that I make may have been made before. Nevertheless, I believe that they are of such significance as to merit reiteration.
The major points that I should like to make are as follows, and my noble friend will probably be as aware of them as I am. The cost of producing coal in the UK
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is one-third of the cost of producing it in Germany and one-quarter of the cost of producing it in France and Spain. The costs of producing coal in Britain fell by 18 per cent. during the past two or three years. That was the result of investment approaching £1 billion. Our achievement has been well and harshly bought. Therefore, it would be foolish for that investment to be wiped out.
The industry provides 50,000 jobs in Britain and, most importantly, sustains a major export-earning capacity and a capacity to export earnings which the world may well need very much in the next century. Moreover, we have the largest coal reserves in Europe and have already locked away far too much. In a previous debate, I referred to a colliery in my constituency which the noble Lord knows well; namely, Silverwood colliery. It was one of the 30 collieries which Mr. Heseltine saved—indeed, one of the collieries with "a long future". The neighbouring colliery of Kilnhurst had been closed and its reserves were added to those of Silverwood. Nevertheless, Silverwood was still closed. The closure of such collieries—and there have been many of them—creates enormous economic, environmental and social problems. Therefore, for us to embark upon a policy of inflicting mass local unemployment to no long-term national good would not be very sensible.
The costs of production are interesting, but the cost of electricity burnt by the various fuels is also very significant. For example, the price of UK deep-mined coal has fallen by half in real terms in recent years. The price of electricity has fallen by 20 per cent. The comparison is important. The price of coal has halved and the price of electricity has fallen by one-fifth. I cannot understand the reaction of the stock market which appears to anticipate an announcement by Her Majesty's Government which may be helpful to coal. I believe it would be helpful to the electricity consumer too.
We must bear in mind that the cost of electricity from coal-fired stations is 1.5p per kilowatt hour. The cost of nuclear power is double that. The cost of electricity from the older gas-fired stations is 3.2p per kilowatt hour—a great deal more expensive than that from the coal-fired stations. The newer gas-fired stations produce cheaper electricity, but even so it is 50 per cent. higher than the cost of coal-fired generation. Should we therefore seek to burn gas with feckless abandon, particularly when we should understand that gas reserves, proved and potential, are by no means sufficient to give great confidence that the supply of gas at reasonable prices will last for the lifetime of the gas-fired stations?
We must understand also that there are already pressures to treat with derision the Monopoly and Merger Commission's identified need for 10.5 gigawatt gas capacity—that is 17 per cent. of our total energy requirements—by the year 2001. We already have 12 gigawatt gas capacity at present. I know that the emission problem is serious. However, the United Kingdom ought to understand that it is already more than fulfilling the second sulphur protocol. To go further may well be unwise and could add £200 million to the cost of electricity and would ignore the evidence of the

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CBI which called for the removal of distortions which favour a particular energy source and prevent the establishment of the level playing field which is all that the coal industry has asked for for a long time.
We must understand that we need to burn coal cleanly. If we opt out of the coal industry that will not necessarily help the environmental cause. If we stop producing coal, India, China and other countries with vast reserves will continue to mine it and burn it. They will not have the advantage which we could gain of a return to clean coal technology, which I know the noble Lord, Lord Ezra, was eager to sustain during his time at the National Coal Board.
Not long ago I attended a meeting where I was told there would be no coal in future and that we would have to rely on gas, nuclear and renewables. Renewables have a major role to play. Only this week a Question was asked in the House about coppicing. A field close to my home which was coppiced had previously sustained overwintering sheep.
I shall finish shortly as I know my noble friend would not wish me to trespass upon the patience of the House. Nuclear energy has a role to play but we need to ensure that in future the nuclear industry will not seek markets and seek public support on the basis of grossly inaccurate financial calculations and a rather dismissive attitude to the environmental problems which are associated with that industry. Coal can be burnt and it is in the nation's interest to do so. It is in the world's interest that it should be burnt cleanly.
8.3 p.m.
Lord Wakeham: My Lords, the previous time I addressed your Lordships on matters relating to energy was on 20th October 1992. It was a time of great concern for the British coal industry.
I took the opportunity of that debate to set out the then Government's energy objectives. I should like to quote today what I said then.
"It is the Government's energy policy to achieve, through promoting competition and developing competitive markets: secure energy supplies at the lowest possible prices; diversity of supply and in decision making; meeting the customer's needs with maximum efficiency; and maximising the economic exploitation of the UK's energy resources, while at the same time meeting the growing requirements of environmental policy".—[Official Report, 20/10/92: cols. 669 and 670.]
I think that this was the right policy then, and I think it is the right policy now.
I declare an interest in energy matters as I am a Director of the Enron Corporation of Houston—the largest natural gas company in the world—which has significant operations across the globe, including in the UK and the rest of Europe.
As I said, I stand by the statement I made on behalf of the then government back in October 1992. However, things have clearly moved on since then and this short debate—for which we are much indebted to the noble Lord, Lord Ezra—is therefore most opportune.
At the time of the 1992 debate, the big question was what size the coal industry would become in a competitive environment. It was inevitably going to be
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smaller, but in my judgment there would always be a market for coal-fired generation. Six years on, we face the same question. I have a great deal of sympathy for the Government as they seek to answer it. However, if they try to tackle the problem by non-competitive, interventionist means, they will do great damage, not just to the energy industries, but to the wider credibility of the Government on economic matters. It is simply not necessary to do so.
It is in my judgment possible to help the coal industry substantially and to do so by using the market rather than restricting competition, as is rumoured. The key to the problem is the mothballed fossil fuel generators. The effect of their being mothballed is to restrict competition. They should therefore be brought back into use, but only as free-standing competitive forces and not as part of the portfolio of the major generators who dominate the pool. As free-standing generators—operating at their written down value—these stations would be able to generate electricity efficiently and at comparable prices with electricity generated from gas.
The effect of these stations re-entering the market would be that we would use significantly more coal for a number of years, increase competition in the pool and reduce the use of gas—because only the most economical gas projects would go ahead. The alternative to this—artificially to restrict the development of a competitive market by continuing the moratorium on gas-fired generation—would be to keep electricity prices artificially high; to protect the existing dominance of a few players in the market and to reduce competition accordingly; to destroy many construction industry jobs and a great deal of inward investment; and certainly to damage seriously the confidence of overseas investors in the United Kingdom.
Why do it? It is simply not necessary because there are many ways in which the output of the mothballed generators can be sold competitively into the marketplace. I therefore urge the Government not to take a massive, anti-competitive step in the wrong direction, and one which would, in any case, not deliver the result they want.
I have heard it said that there is only one show in town. That is simply not so. There are several solutions, all of which would use more coal and at the same time protect the consumer from unnecessary price rises.
8.8 p.m.
Lord Cooke of Islandreagh: My Lords, I am grateful to the noble Lord, Lord Ezra, for introducing this debate. I believe that a national energy policy is an imperative at this time. As the noble Lord said, the different elements are all there. It is a matter of pulling them together and producing a reasoned, balanced policy. I hope that that will not be a party political matter because the policy should cover several decades and be periodically updated.
I listened with care to the noble Lord's coverage of the elements in the national policy. I approve of them. The noble Lord explained them well. I shall not cover that ground and waste time.

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I listened with interest to the remarks of the noble Lord, Lord Hardy of Wath, in relation to coal. I agree with most of what he said. We must not forget coal. It will be needed before the end of the next century. We must continue with research into burning coal cleanly. As the noble Lord said, that could be of help not only to this country but to the world; it is an important factor in reducing emissions throughout the world.
I am sure that this policy, when it is put together, will take account of the undertaking at the recent Kyoto conference to reduce CO2 emissions by 20 per cent. over the next 11 or 12 years. That is the subject of my remarks. I wish to suggest ways in which a substantial reduction in CO2 emissions can be made relatively quickly. I believe that such measures must be incorporated into national policy when it is formulated.
Thirty per cent. of all energy used in the UK is in the domestic field; 23 per cent. is used by industry, offices, public buildings, schools, hospitals and so on. A high proportion goes in heating. Here I must declare an interest. The company of which I am chairman manufactures insulation for buildings, offers insulation products designed to solve particular problems, and promotes building systems which have low energy costs.
Generally speaking, the heating of buildings in the UK is very energy wasteful. Building regulations have included a Part L which sets a requirement for insulation and has done so for 40 or 50 years. However, the standards set in the past were the lowest in Europe. That is partly because energy was cheap and seemingly inexhaustible, and partly because as a nation we were slow to appreciate comfort conditions in the home. Not long ago, if you felt cold, you put on an extra jersey. But we are now catching up. We are trying to heat old homes which were not designed to be heated and wasting perhaps 60 per cent. or 70 per cent. of the energy in attempting to warm up the countryside.
The current building regulations are, in theory, almost up to European standards. Unfortunately, new houses built to that standard use at least 25 per cent. more energy than the theoretical energy cost. That has been going on for many years without ringing any alarm bells. I believe that it will be relatively easy to reduce the energy requirement for new homes by 25 per cent. initially, and later by 50 per cent., and that, combined with a resolute programme to raise the standard of insulation in our existing housing stock, will substantially reduce CO2 emissions.
Three factors account for most of the additional energy requirement. The first is air leakage. There is no standard for air tightness in the regulations. Most houses are like sieves. Secondly, the regulations do not take proper account of the effect of cold bridging, which reduces the effect of insulation. Thirdly, poor construction standards are widespread in the building industry. Those defects can be verified at any time by tests for air tightness and infra-red photography.
To indicate the scale of the energy losses, I quote from figures recorded for houses constructed in the West Midlands for the same housing association. Four houses
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were built to a system developed by my company and were compared with three new brick and block houses built close by with similar floor areas, all with all-electric heating, hot water and ventilation systems. The national energy ratings were similar. The running costs were monitored by Midland Electricity. The average total energy cost in 1995 for the four system-built houses was £37 per month; for the brick and block houses, it was £69 per month. The annual savings were £384 per house, or 46 per cent. I emphasise that the houses were built to the same energy rating and should have had similar heating costs. It is most likely that the reasons for the difference in cost were air leakage and cold bridging.
My view is that revised Part L building regulations should be put into operation quickly to meet the problems I have mentioned. That will reduce carbon emissions by dwellings built to such standard by a minimum of 25 per cent. In addition, the new regulations should become effective on the date announced. At present, housing developers rush through planning approvals under existing regulations whenever new regulations are threatened, and there is a delay of one or possibly two years before new regulations become effective.
But that is only a start in terms of what can be achieved. Houses are being built today by people who are interested in energy saving, with an energy requirement that is down to 50 per cent. less than the theoretical figure for current regulations. It is being shown that such houses can be built at little increase in cost. I sincerely hope the Government will appreciate what is achievable and will propose a radical upward step change for homes and public buildings, perhaps giving three or four years' notice in order to allow the construction industry time to develop building methods to meet future demand.
I have gone into this matter in some detail and there is no time for me to go further. However, I hope that the policy will include a proper reform of the building regulations.
8.16 p.m.
Baroness Young of Old Scone: My Lords, energy policy impacts highly on the environment, as has already been stated. Climate change is undoubtedly happening. The estimated cost of climate-induced severe weather events in 1996 was 50 billion dollars' worth of damage. We set targets in 1992 for the industrialised world which we have failed to reach; we have exceeded them by 10 per cent. and that percentage is rising by 1 per cent. a year. We have now set more stringent targets at Kyoto, and the UK Government have a commitment to an even higher target than the protocol for CO2 emissions. Therefore the challenge must be to cut drastically the use of fossil fuels.
I wish to examine two areas: first, energy use and, secondly, energy sources. Many speakers have referred to the potential for demand management in energy efficiency. The Energy Efficiency Best Practice Programme and the Energy Savings Trust, between them, have estimated potential CO2 reductions in the

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industry and services sectors of 30 per cent. and in the household sector of 25 per cent., with the potential for reductions being even greater if we embrace leading-edge technologies. I hope that we shall hear from the Minister tonight as to what action the Government intend to take in a range of areas to promote energy efficiency and demand management, including a regulation for energy efficiency standards, advice to households and industry and energy services packages being promoted by the regulatory system to produce warm homes for fuel-poor people. Energy efficiency capital funding schemes such as the Energy Savings Trust and Neighbourhood Energy Action can give assistance to fuel-poor families possibly funded through energy generation efforts. The need for the Government to promote research and development into energy efficient technologies continues. I hope that we shall see Sir Colin Marshall pressing forward very quickly with his initiative on industrial energy, and that we shall see either a tax or tradeable permits, but certainly something by way of economic instrument very soon.
I now turn to energy sources. We have seen the dash for gas, which helped with CO2 reduction and a reduction in other pollutants. However, there must be a question about long-term sustainability. Nuclear power is unviable on economic and long-term safety grounds.
Several speakers have referred to cleaner coal technologies. Those technologies do help in relation to sulphur and Nox, but they do not contribute much in terms of CO2 reduction. In particular, open-cast mining is damaging in terms of its impact on biodiversity and habitats. I welcome the proposed tightening of the minerals planning guidance for open-cast mining.
We must take a major step forward in our use of renewables. We are currently at a pathetic 2 per cent. of energy generation from renewable sources. The Government have set a target of 10 per cent. by 2010, which, in terms of the available technology, is quite modest. I welcome the extension of the non-fossil fuel obligation, but we need more. I welcome the fact that companies of the size of Shell and BP are now entering into areas such as off-shore wind, biomass and solar energy, but we need more. We are behind in the renewables development race. There are huge world markets out there, particularly in off-shore wind technology, for example, where the US and the Germans are the biggest players. The Dutch, the Danes and the Swedes are rapidly catching up, but we are nowhere as yet. In solar energy the Japanese are developing a massive world market.
One note of caution has to be sounded on the issue of renewables with regard to the potential environmental damage that some of those technologies can create. A sensible environmental assessment and a careful siting of many of these technologies can remove these environmental downsides. I look forward to the outcome of the government review on energy sources for power generation.
Perhaps I may mention again some of the wider economic issues surrounding the question of energy policy and its impact on the wider economy. We are in
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a transitional position in which we are no longer able to be dependent on some of the old technologies because of their overwhelming environmentally damaging impact. We need to manage that transition. We need to see jobs in fossil fuel industries decrease and jobs in sustainable energy technology industries increase. I believe that the support to the coal industry must be transitional because of coal's environmental impact. Energy for Sustainable Development has calculated that, in the face of the 20 per cent. CO2 reduction target, there would be room for a modest coal market—perhaps 13 per cent. or so of our energy output as opposed to over 40 per cent. which it currently represents. If we have to make major reductions beyond 20 per cent. in CO2 emissions, which I believe we shall have to do rapidly after 2010, there will probably not be a place for coal, with its carbon dioxide emissions. We need to see proper support for the coal industry in a transitional mode, but we cannot see coal continue if we are to deal with climate change, which is probably one of the most overwhelming threats the world has ever faced.
8.22 p.m.
Lord Ponsonby of Shulbrede: My Lords, with the leave of your Lordships, I wish to speak briefly in the gap. When he introduced the debate, the noble Lord, Lord Ezra, mentioned four aspects, on which the debate has concentrated: the element of competition; the social requirements of an energy policy; the security requirements of a diverse supply of energy; and the environmental requirements, to which a number of noble Lords have referred in the course of the debate.
I wish to raise a fifth aspect: the importance of Europe, and in particular of eastern Europe. Eastern Europe already provides a huge supply of energy into western Europe. The energy tends to be very cheap; and it tends to be a very dirty source of energy. The purpose of my intervention is to ask a question of my noble friend the Minister, although I know that it will probably be impossible to answer. How is this very dominant supply of energy from eastern Europe to be incorporated into a UK energy policy and a western European energy policy? It seems to me that the cheapness and dirtiness of this energy will be a very dominant factor in the way we form our own national energy policy.
8.24 p.m.
Baroness Maddock: My Lords, it is clear that all noble Lords who have stayed behind tonight care deeply about the issue of a proper energy policy for this country. The debate has ranged over the importance of the coal industry, what has happened to it and how we can deal with it in the future; the environment; energy efficiency; and renewables. We have now had thrown into the pot the European dimension. I hope noble Lords will forgive me if I concentrate on the area I know most about; namely, energy efficiency and conservation in our homes, which I believe is an important topic in this debate.
My noble friend indicated when he introduced the debate that I had had the opportunity to take a piece of legislation through the other House. I chose the Home Energy Conservation Bill. I did so partly because of my

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life experiences, of which I was particularly reminded when I was listening to the noble Lord, Lord Cooke. I lived for three years in the late 1960s and early 1970s in Sweden, when I had the experience of living in a properly insulated home. I have never since lived in such a well insulated home. But I partly chose the subject of home energy conservation because I believed that, if we were to have a proper, comprehensive energy policy which could target our sources effectively and produce warm homes, we needed to know the scale of the problem. That was the point behind the Home Energy Conservation Act.
The Act provided for local authorities to be energy conservation authorities, which were charged with drawing up annual reports. In those reports they had to state the energy efficiency of all the properties in their areas, across all tenures. They had to produce plans for how they could reduce carbon dioxide emissions by significant amounts. The Act did not lay down that the reduction was to be by 30 per cent., but fortunately the regulations did. They were required to draw up plans to deliver education about energy efficiency. Plans were required for working with local businesses and the community for job creation and for targeting the fuel-poor, which have been mentioned this evening. These energy authorities are required to send reports in to government each year with their housing reports—their HIP reports. We now have a good database on which to start targeting our action and our finances.
Much to my surprise, the Government came up with some grants to go with the Home Energy Conservation Act: £10 million was made available over a period of three years. This week we have come to the last bids for the money given on the back of that Act. I should declare an interest here as I have had the opportunity, as a non-voting chairman, to chair the committee that has distributed the money each year.
The interest from local authorities has been enormous. In 1996, 138 authorities applied for grants and we were oversubscribed by five times. In the end, 72 authorities were in receipt of grants totalling £5.6 million which were made to pump-prime local initiatives, which would run for a number of years, with continuing investment involving partners in all sectors.
In 1997, the bids were five times over the allocation. We learnt from the year before and introduced priority areas. One of those priority areas was schemes to reduce fuel poverty, particularly schemes for improving health and sustainable schemes which did not need grant aid for more than one year. Another priority area was schemes which generated employment, and particularly training. At that time we were looking at the provision of gateway jobs. That was before the New Deal, but this year the bids are looking at involving the New Deal project. Another area we looked at was the private rented sector, which is a very bad area as regards energy efficiency. We were desperately trying to find schemes that would work in the way that we wanted them to work. That was quite difficult, but the position has improved this year. We also looked at schemes to enable the development of energy service provision, particularly the development of energy saving
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companies (ESCOs), which link energy efficiency measures to fuel supply, which is something that noble Lords have talked about tonight.
The scheme is administered under the auspices of the Energy Saving Trust. Partnership has played a key role. Installers, retailers, manufacturers, financial institutions, housing associations and utilities are all involved. Public networks have been formed between energy conservation authorities, health authorities, schools and education authorities. Voluntary groups have played a part through charities, credit unions and community groups. Groups of local authorities often get together to form consortia to bid for money. As I said earlier, in 1997 there was only £2.5 million of funding, but the research done by the Energy Saving Trust shows that from those grants we drew in, in total, probably £20 million to be spent on the energy measures I outlined. In relation to good job creation, the work being done on the finances shows that the cost of providing jobs in that way has been extremely efficient.
I hope that I have convinced the Minister. I know that in the Department of the Environment, Transport and the Regions there is considerable support for continuing the scheme. In theory, the grants come to an end this year. I hope that the Minister will be looking at ways in which we can build on what happened following the Home Energy Conservation Act. My biggest fear when the Act was passed was that nothing would happen because it was an enabling Act. Quite frankly, if grants had not been given it could simply have lain there. Much has come from it.
Perhaps I can conclude by returning to one issue which came up again recently—it comes up every year. I refer to the problems of fuel policy for elderly people. This was one of the aspects which we asked local authorities to examine. I regret that recent figures from the Department of the Environment, Transport and the Regions, show that 2.5 million households live in homes cold enough to increase the risk of ill-health during the winter because people cannot afford to heat them. Every winter 250 elderly people die as a result. Lone pensioners account for 44 per cent. of households in that situation. I hope that the Government can see that the work done is good and include it in a comprehensive energy policy.
8.31 p.m.
Earl Attlee: My Lords, I too am grateful to the noble Lord, Lord Ezra, for tabling this Unstarred Question. The noble Lord has been pre-eminent in the field of energy policy for many years, while I have had a formal involvement for only a few weeks. However, at the time of the passage of the Coal Act in 1994 I was able to visit, I think it was, Rosington Colliery operated by RJB Mining. I was struck by the enthusiasm of not only the management team, but also of the men who were literally at the coalface. They were enthusiastic, but at the same time they recognised that their future depended upon competitiveness, marketing and of course the emissions policy.
I listened with great interest to my noble friend Lord Wakeham who was heavily involved in the reorganisation of the energy industry. He made the point

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that there are two solutions to the coal question: intervention or leaving it to market forces and recommissioning mothballed power stations.
The noble Baroness, Lady Young, covered the interesting subject of renewables. There are all sorts of interesting technologies being developed and I look forward to seeing what comes from further rounds of NFFO to support them. However, between 1980 and 1995, despite a large increase in electricity demand, the policies of the last government resulted in substantial reductions of emissions from the electricity industry. According to government figures, total emissions of CO2 are down by 24 per cent.; SO2 by 47 per cent. and NOx by 33 per cent. Of course, those improvements were not made without great hardship and trauma, particularly from those who worked in the deep-mining industry. One must recognise also that working in a deep mine is arduous and hazardous and any accidents are often serious.
The situation in the energy industry is that it is now impossible to plan and invest for the future as there is no published energy policy. We are all aware that Section 36 applications are subject to a moratorium, but we do not know for how long that will be the case. An example of the impact of that is the proposed Baglan Bay CCGT plant which should be an eminently sound project as National Grid identified a one gigawatt generating capacity deficit in South Wales.
There are many other projects in the pipeline. In addition, officials at the DTI will be experiencing difficulty with giving advice and making low-level decisions as there is no policy to which to refer. I am sure that the Minister will agree that gas will still represent only 40 per cent. of UK generating capacity by the year 2000 and 55 per cent by the year 2005. That compares to 65 per cent. that coal enjoyed only eight years ago.
In the Government's pre-Budget report of last year, reference was made to the current review of the North Sea fiscal regime and its aim of ensuring that an appropriate share of North Sea profits is taxed while maintaining a high level of oil industry interest in the future development of the UK's oil and gas reserves. The Minister needs to take account of the effect of the so-called windfall taxes and any perception of lack of stability in the fiscal regime. That will be a crucial factor in encouraging the development of existing fields in order to improve the recovery factors. The Minister may have to consider varying the rate of tax as a basin matures, so that new technology can be developed with less risk rather than simply developing new opportunities away from the UK continental shelf.
The Minister will no doubt be happy to confirm his confidence in his honourable and right honourable friends in the DTI. That being the case, why is it necessary for his right honourable friend the Paymaster General to become so closely involved in the future of the coal industry? There have been reports in the press this week concerning the possibility of redistributing the assets of National Power and PowerGen in order to benefit the consumer, with propping up the coal industry as a side effect. Can the Minister say whether the coal
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industry problem can be solved without either legislation or arm-twisting combined with hidden deals? Further, can he assure the House that any solution will not disadvantage the consumer?
If the Minister and/or the Environment Agency relaxes the emission limits for coal, how can they be sure that the coal burnt will be British rather than cheaper imported coal? I fully accept that some adjustments to the electricity pool are desirable. The current arrangements have worked to increase competitiveness but it is clear that there is opportunity for improvement in the light of experience. We look forward to seeing the conclusion of this review.
This Government acted big at Kyoto. They claim to be a green government but, at the same time, they face severe challenges as regards what to do with the coal industry. We look forward to the conclusion of the various reviews and to examining the Government's energy policy when it appears.
8.38 p.m.
Lord Clinton-Davis: My Lords, first, I join with all those noble Lords who have complimented the noble Lord, Lord Ezra, on introducing the debate. There have been some interesting comments—so diffuse however that it will be extremely difficult for me to cover the entirety of the ground and I apologise in advance.
Most noble Lords have spoken from a position of some expertise but a different form of expertise in almost every case. I know that the noble Lord, Lord Ezra, is particularly interested in the progress being made in formulating an energy policy and in the reviews. He initiated, or was involved in, a similar debate some four months ago in this House. My noble friend Lord Haskel, who spoke for the Government on that occasion, said that the Government were carrying out a thorough review of the whole question of energy policy. He said that it was essential to get the answers right rather than rush into conclusions; after all, we have been in office for only just over 12 months. I want to assure the House that matters are proceeding well and we are now much nearer to announcing a comprehensive energy policy.
We have already taken some action to address specific problems; for example, in tackling subsidised and unfair competition from coal in Germany and Spain and in passing the Fossil Fuel Levy Bill to remove subsidy from nuclear power and to create a more level playing field in the wholesale electricity market.
Our broad energy policy is to ensure secure, diverse and sustainable supplies of energy at competitive prices. Those are all desirable aims. It is a much more formidable task, however, to work out the detailed steps to be taken to integrate such aims, not least when some are in conflict.
Security, diversity and sustainability of supply have been the keystones of energy policy for several years. The difference now is that we are looking hard at those concepts and trying to define their actual meaning in terms of how markets need to develop. It may be that

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progress in one area leads to the detriment of another, so that we shall constantly need to weigh the overall balance of advantage.
The issues involved are numerous and complicated, devolving from technical, economic, social and industrial change and from the actions of the previous administration over a number of years. They intertwine with other responsibilities and policies, as we have heard tonight, notably those relating to environment and trade.
Many of the problems we confront today reflect the way in which the energy industries were privatised: much too cheaply, based on too much ideology, and with insufficient regard paid to longer term implications. That, in turn, has created new problems since the structure of the industries and the new regulatory regimes were, in my submission, not properly thought through. The large and continuing structural changes in the electricity industry over the last few years have brought into focus the frailties of the system which was set up in the early 1990s. That is part of the inheritance that this Government have received.
The mistakes of privatisation and subsequent changes to the utility sector mean that we now have to overhaul the regulatory framework, upon which the noble Lord touched at the beginning of his speech, to ensure that prices and service standards properly balance the needs of consumers and investors.
An unforeseen consequence of the liberalisation of the electricity markets was the rapid market driven switch to gas fired generation—driven, in large part, by market arrangements which did not work effectively. Gas fired power stations were able to enter the market at prices significantly above present levels and were able to ensure that they ran ahead of coal plant, which was paid less. The former administration granted consents for new power stations almost on request, which meant that permission was given for new gas fired generating capacity equivalent to about a third of the whole generation sector in England and Wales.
Questions have been raised about the wisdom of generating a significant proportion of our electricity from gas when demand for both fuels tends to peak at the same time and about the depletion of United Kingdom gas when we may need to rely on imports of gas, and whether that is a strategic security issue.
The market view of security is that commercial pressures on individual companies will ensure that they will do whatever is necessary to keep the lights on now and to meet likely future demand. That only works if the commercial pressures are pushing in the right direction. This Government felt that they needed to have a more informed view. We decided upon a review of energy sources for power generation to enable us to take that informed view on the future direction of energy policy. As I indicated, we hope to be able to announce those conclusions quite soon.
Energy is absolutely central to modern society and social function. Its importance is surely reflected in the fact that we are debating energy policy for the second time within a very few months.
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I now turn to specific points raised during the debate, some of which I have already covered. The noble Lord, Lord Ezra, spoke about a levy on gas and electricity. That would, of course, be a burden on all consumers, including the poorer ones.
My noble friend Lord Hardy spoke of the cost of coal and the cost of electricity. I accept the thesis that he advances about the distortion of the market. That is why we are having a review of energy sources and reviewing electricity trading arrangements. Coal may indeed have been disadvantaged by the structure of the privatised electricity market.
I turn from that to the noble Lord, Lord Wakeham, whom I am delighted to see here, an old friend from another place. Of course, as he reminded us, he was Secretary of State for Energy and was responsible, I fear, for a substantial degree of the distortion of the electricity and the coal market structure which we inherited. He will not agree of course. I nevertheless assert it because I agree with what I have just said.
On the question of other companies using old coal plant, the Director General of Electricity Supply is looking at opportunities for third parties taking on surplus plant for National Power and PowerGen.
I turn to the contribution of my noble friend Lady Young who has an excellent reputation in relation to environmental causes, on many of which I have supported her before and will probably continue so to do. Emissions and energy efficiency are covered by the climate change consultation, following the Kyoto agreement. We recognise that the Kyoto agreement is just a milestone on the way to a radical reappraisal of the way in which we use energy. It is hard to say at this moment what that will imply, but, of course, the points she made will certainly be taken into account.
The points made about insulation and poor buildings are covered by the climate change consultation.
My noble friend Lord Ponsonby spoke about central and eastern Europe and the problems which will be confronted from that source. We are talking about the way in which we utilise our energy resources here, of course. Although central and eastern Europe does not figure centrally, and should not, in this debate, nevertheless it is a point worth noting. I cannot provide a substantive answer tonight but no doubt my noble friend will wish to pursue these matters in more detail on another occasion.
I turn to the contribution made by the noble Baroness, Lady Maddock. I can deal with only one of the points—the energy efficiency programmes which were really the key to what she was saying. We have a range of energy efficiency programmes. There is the capital receipts initiative, which will make nearly £800 million available to local authorities over the next two years for capital spending on housing and other regeneration schemes and which will specifically encourage energy efficiency. I accept that there is much substandard housing in this country, and there are a lot of poor people. I cannot undertake that we shall be able to achieve all this in the very near future, but we shall use our best endeavours to tackle the problem.

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The noble Earl, Lord Attlee, was kind enough to provide me with a note of his specific points. However, I have already spoken for 11 minutes and I shall have to deal rapidly with some of them. I think he will understand that I shall not be able to deal with them all.
Many of the points the noble Earl raised will be dealt with in the announcement that will be made quite shortly. When he says that it is impossible to plan without policy, of course, that is why we are undertaking the exercise now. It is a pity that it was not done during the course of the previous government.
The question of the North Sea fiscal regime was more than touched on in the Budget. There is further consultation on that, and a decision will be made in the near future. The noble Earl mentioned unfair subsidies. I have already said that we have taken action in that regard because of Spain and Germany.
I have dealt as best I can in such a short time with a number of the points that have been made. I know that I have not done justice to all of them but I hope that I will not be unduly blamed for that. I thank the noble Lord, Lord Ezra, once again for introducing this subject, perhaps a little prematurely on this occasion because, as I said, I hope that we will be able to come back to the issue in the Statement that we shall be making in the relatively near future.

School Standards and Framework Bill
8.50 p.m.
House again in Committee on Clause 46.
[Amendment No. 162 not moved.]
[Amendment No. 163 had been withdrawn from the Marshalled List.]
Clause 46 agreed to.
Clause 47 [LEAs' financial schemes]
[Amendments Nos. 164 to 166 not moved.]
[Amendment No. 167 had been withdrawn from the Marshalled List.]
Clause 47 agreed to.
Schedule 14 agreed to.
Clause 48 [Maintained schools to have delegated budgets]:
Lord Whitty Lord Whitty moved Amendment No. 167A:
Page 39, line 6, leave out subsection (1) and insert—
("(1) Every maintained school shall have a delegated budget.").
The noble Lord said: In moving this amendment, I should like to speak also to the rest of the amendments in the grouping. These are largely transitional amendments concerned with the timetable for implementing key provisions of Part II of the Bill. In essence, the main amendments allow that the financial provision should start from the beginning of the financial year and the administrative framework should start from the beginning of the academic year. I have provided the Front Benches and, as a precaution, the noble Lord, Lord Lucas, with a lengthy letter explaining the background to the amendments. They are relatively straightforward.
In certain places the Bill as currently drafted assumes that the funding provisions of Chapter IV of Part II will take effect at the same time as the new school categories are introduced. But, as was explained during the proceedings in another place, the Government have concluded that the most appropriate date for introducing the new school categories would be 1st September 1999. But there are obvious problems in attempting to introduce major funding reforms from that date. All previous reforms of this magnitude—including the introduction of LMS itself—have taken effect from the beginning of the financial year in April, and it would be difficult to contemplate any alternative. Our conclusion therefore is that these changes should take effect from April 1999. That has the consequences dealt with by the amendments.
Our intention then is to bring in the new recurrent funding regime from April 1999 and apply it from the outset to all schools in the present LEA and GM sectors. This means, in brief, that GM schools will retain their existing governance arrangements for the five months April to August 1999, pending the transfer to their new legal categories on 1st September, but they would receive their recurrent funding from their LEAs from 1st April, under the provisions of Chapter IV of Part II. A capital grants regime for GM schools would, however, be kept in place for the time being to fund the completion of projects already in progress at 31st March plus any projects on which a start between April and August is essential.
Amendments Nos. 167A and 167B, 168B and 168C, 168E, 168G, 175E, 176G, 176H, 246B, 246E and 259D deal with the date issue. That arises because Clause 48 is the one clause in Chapter IV of Part II which is linked explicitly to the "appointed day", to be designated under Clause 20(6) as the starting date for the new categories. So the aim of the amendments is simply to disconnect Clause 48 from the provision on the appointed day. The effect of this group of amendments is to leave Clause 48 as a set of substantive provisions which define the entitlement of existing schools to delegated budgets from the start of the new regime, and also deal with the position of new schools which open thereafter. We intend to bring these provisions into effect from 1st April 1999.
The present subsections (2) to (5) lay down the circumstances in which, exceptionally, an existing school will not receive a delegated budget under the new regime. The substance of these subsections is now transferred to Schedule 31, by way of Amendment No. 259D. The rest of the amendments simply correct various cross-references so that they refer to Clause 48. None of the amendments affects the substance in terms of who is and who is not entitled to a delegated budget. The only material change concerns the decoupling of the operative date.
Amendments Nos. 257Q, 257Y, 259B and 259C are also concerned with timing. Clause 130 defines the phrase "school maintained by a local education authority" in terms of the new school categories. Amendment No. 257Q simply allows for the situation in which a provision containing this expression comes into force before the new categories. Amendment

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No. 257Y is the key amendment here. We propose to bring about the "phasing" which I have described by using the powers in Clause 132 to make "incidental, consequential, transitional and supplementary" provisions. Some of the provisions in the Bill will need to be applied temporarily to the existing school categories although they are expressed in terms of the new categories.
Amendments Nos. 259B and 259C are concerned with the winding up of the GM school funding regime. Again they are about timing. Schedule 31 enables the Secretary of State to specify an "appointed day" for this purpose, which need not be the same day as that appointed for the new school categories. But since Schedule 31 at present provides for only one appointed day, we wish to be able to extend the GM capital funding regime beyond that point. Those amendments provide for that.
There are other relatively technical amendments which are not timing amendments. I refer to Amendments Nos. 257T to 257X. Clause 132 confers a power to make incidental, consequential, transitional or supplementary provisions by order. However, these amendments convert that power into a regulation-making power so that it can be used in conjunction with other regulation-making powers in the Bill to produce a single set of regulations rather than hybrid orders and a set of regulations. The purpose is simply to reduce complexity and bureaucracy and to enable users to rely on one statutory instrument instead of having to refer to two. Again, no additional power is conferred by the amendments.
Finally, there are two further technical amendments, Amendments Nos. 168D and 168F. These relate to Clause 49(7), which provides that, in spending its delegated budget, the governors and heads of a maintained school are ordinarily deemed to be acting on behalf of the LEA. That is to say, they are in law acting as agents, not as principals. This is not intended to change the law. It frankly reflects what the department has always understood to be the legal position. However, for the avoidance of doubt, it seemed advisable to put this express provision in the Bill. One reason for that is that it removes any doubt as to whether VAT can properly be reclaimed by LEAs under Section 33 of the VAT Act in respect of purchases made by schools from their delegated budgets and other funds provided by the LEA.
The present amendments reflect discussions with Customs and Excise. I understand that that department is satisfied that the amended provisions are sufficient to meet its requirements for the purposes of that Act not only in relation to schools now maintained by LEAs but also in relation to former GM schools from the point at which they begin to receive funding from their LEAs under Chapter IV, Part II of the Bill.
That is a rapid explanation of the changes. As I say, the bulk of them relate to timing and there are the other two batches of technical amendments. I beg to move.
9 p.m.
The Deputy Chairman of Committees (Lord Lyell): For the convenience of the Committee I advise it, and especially the noble Lord, Lord Lucas, that if Amendment No. 167B is agreed to I shall not be able to call Amendment No. 168, which would have been pre-empted.
Lord Lucas: Therefore I am required to speak to Amendment No. 168 at this stage, with apologies for it not having appeared at its right place in the groupings. If I leave it where it is I cannot speak to it. However, I would like to begin with a small protest directed generally at the House. For amendments to Clause 131 the alphabet goes C, D, E, R, F, G, S, H, T, U, V, W, X, Y, Z, J, A, A.
There is a well-established system of ordering sequences of characters, which is employed in a dictionary or telephone directory. It is perfectly adequate for all purposes and it can be easily adapted to the numbering of amendments. It occasionally leads to slightly long strings, but at least one can find what one is looking for. It has been a real terror trying to find my way round to my amendments. I have been backwards and forwards. Even the old arrangement was better.
That said, perhaps I may turn to Amendment No. 168. It deals with the deletion of a subsection which has now been moved to become Amendment No. 259D and paragraph 3 of the schedule, if I have got it right. Therefore I shall address it in that place, where it will be in the Bill if these amendments are agreed to. In this new amendment we have removed from its original place in the Bill a totally unjustified, random power in suddenly deciding that a school should not have a delegated budget. That is not based on any factual evidence, as required by the immediately preceding subsection, but at the whim of the Secretary of State.
I would like to know in what circumstances the Government propose to use the power and why they consider it necessary as a part of the Bill? Will the Government choose to specify a school to which, if this clause became active today, it would then apply? What circumstances are we looking at? How can we justify a power that is so wide and random and, to my mind, so unusual? Surely, it is something that can be conveniently forgotten. If a school has been condemned by Ofsted that is fine; if it has been found to be failing in conventional ways, then that is fine; but if it has not, then it has not and it should receive its delegated budget until it is found to be failing. That is the question.
If we are forced to pursue this matter to an issue I would point out that the amendments I object to in this group are the first two and the last. I would not be seeking to bring down any others in the group were we to win the vote.
Lord McIntosh of Haringey: Perhaps I may make an immediate response to the first point made by the noble Lord, Lord Lucas, about numbering. I learnt only this week that a new system of numbering had been introduced towards the end of last year. I have already entered my protest, which is exactly that of the noble

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Lord, Lord Lucas. It seems to me that we had a numbering system which, although complex, was profoundly rational in that one could always find an amendment in its place in the Bill. We have now introduced a system in which the time of the tabling of the amendment becomes a significant factor in the numbering. I can assure the noble Lord that the Government Front Bench will take up the issues that he has raised.
Baroness Blatch: I, too, am very grateful for what the noble Lord has just said. It may also be convenient to deal with the tabling of amendments. The truth is that we spend a long time looking for our amendments and reporting back to the office that they are not there only to be told through a telephone call that they are there. That adds a great deal of time to our handling of the Bill, particularly when we have a group of amendments such as this, which is a very large batch of technical amendments.
I wish to ask the noble Lord, Lord Whitty, some questions on Amendment No. 257Y under Clause 132 relating to articles and instruments of government. I am decidedly unhappy about that. If I read the notes properly, it is designed with an eye to the position of GM schools from Easter through to September and that somehow it will be at variance with the GM articles of government. I see no reason whatsoever why the GM articles of government cannot continue until the school formally becomes a foundation school. I see no reason at all for Amendment No. 257Y.
My other point relates to Amendments Nos. 168D and 168F. I join with my noble friend Lord Lucas on the points he made about these amendments. I have worries about the schools acting as agents and not principals. My understanding is that GM schools have been principals and not agents. Even so, under the new system—and this is another bit of autonomy that will be removed—they will become agents and not principals. If that is the case the school spends the money and the LEA collects the VAT. Is the VAT then reimbursed to the school? If it is not then the LEA receives a nice little pot of money. I hope to have that clarified.
I also take this opportunity to say that it is helpful to have the explanatory notes in advance. It gives us the opportunity to see what the amendments are about. But the letter I received was copied only to the noble Lord, Lord Tope. My noble friend Lord Pilkington received a "Dear Lord Tope" letter and my noble friend Lord Lucas received no letter at all. Given that we are now seasoned participants in these debates, when letters of this kind are sent out, which are meant to help everyone in the House, anyone participating in the debates should receive copies of the letters. It is not only me who is interested but everyone in the Chamber.
Lord Lucas: Perhaps I may add that it is very helpful, when faced with a small desk and a pile of junk mail, if envelopes containing important documents have
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"ministerial/urgent" stickers on them. Such stickers help one to identify which envelopes to open first. I confess that my copy may be lying unopened on my desk.
Lord Whitty: I note those points. We shall attempt to ensure that the Front Benchers participating in these debates receive copies. Frankly, it is impossible for us to predict which other noble Lords are likely to participate in any debates. The question of misaddressing mail is slightly different, and I apologise for that. However, we managed to anticipate that the noble Lord, Lord Lucas, would be participating in this debate though, unfortunately, not early enough or clearly enough to ensure that he received the note.
The noble Lord's main concern relates to the justification for the Secretary of State having the power to remove a delegated budget. We would not see that power being used on a whim, as the noble Lord implied, but that is the only provision which allows the Secretary of State to suspend the delegation of a budget if the governing body has been guilty of financial mismanagement. That is the reason for that provision. I think that I am right in saying that these amendments do not alter that provision, which has been there throughout.
With regard to the point raised by the noble Baroness about Amendment No. 257Y on the overriding of instruments and articles of government of GM schools, we do not imagine that that provision will come into play extensively. It is designed mainly with an eye to the position of a GM school which finds itself without a delegated budget in the transitional period—that is, between April 1999 and August 1999—before the new regime is operating. In that event, we intend that staffing matters at the school should be governed by the rules which will apply to aided and foundation schools from September 1999. That would be at variance with the pre-existing articles, and it does not seem sensible to deal with the conflict by producing an amended set of articles which would be valid for only a few weeks. That is the reason for that provision.
The noble Baroness also asked about VAT. These amendments seek to make clear the position with regard to VAT payments which will normally be reimbursed. The removal of doubt as to that provision should enable a more favourable VAT arrangement to apply to schools as well as to LEAs.
With those comments, I ask the Committee to accept Amendment No. 167A—
Lord Lucas: Although the noble Lord's comments are much appreciated, they did not answer my question on sub-section (3) of what will be new Section 4A, under Amendment No. 259D. The basic powers for suspending delegated budgets are contained in Schedule 15. I refer to the continuing power which the Secretary of State or a local authority or whoever—it is principally the local authorities—has under various other pieces of legislation. We are looking at the transitional provisions that will apply as the Bill comes into effect. It is not clear to me that there is any necessity for this as a transitional provision. It is drawn

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extremely widely and, unlike the other powers under Schedule 15, it is not controlled by way of requiring there to be prior evidence of suitability.
Can the noble Lord give an example of the sort of circumstances in which this provision will be required? I do not wish to deprive the Government of this provision if it is clearly required to deal with some massive crisis. However, if it is merely a matter of a safety provision to a safety provision, which is the way it looks, it is drawn far too widely for us to regard it as a reasonable provision for the Government to have.
Lord Whitty: Schedule 15 will apply to LEA maintained schools. It would be needed to stop a GM school getting a delegated budget on entry into the new framework if during the transitional period there occurred an impropriety, or whatever, in relation to which the Secretary of State would normally intervene. Again, this reflects the transitional provision. Without it, the school would move immediately into the new framework, under which it would be entitled to a budget.
Lord Lucas: Perhaps a short letter with an example and some dates would be the best way of handling this.
Lord Whitty: As this provision will arise later perhaps we may deal with it then. In the meantime, I shall let the noble Lord have some further information.
Baroness Blatch: If a school does not have a delegated budget between May and September, what on earth does it have? Is the noble Lord suggesting that this applies only to a GM school that has failed to manage its affairs, has been formally decreed by the authorities to be incapable of self-management, has had its management responsibility taken away and is without power to manage a delegated budget? If that is so, I understand the position. I would find it helpful if that was confirmed.
As to VAT, will the noble Lord return to the Dispatch Box and make clear that, where self-governing schools spend money and incur VAT, that will be reclaimed by the LEA merely as a technicality and pound for pound it will be reimbursed to the particular source of the expenditure?
9.15 p.m.
Lord Whitty: On the first point, I believe that the noble Baroness has correctly interpreted the position, but I welcome the opportunity to provide an answer in writing. This relates only to the situation during the transfer period and to financial mismanagement. I shall clarify that matter by way of clause references, if that helps the noble Baroness. As to the question of VAT, that is exactly the regime that we intend should be put in place, and this amendment is for the avoidance of doubt.
On Question, amendment agreed to.
Lord Whitty Lord Whitty moved Amendment No. 167B:
Page 39, line 9, leave out subsections (2) to (5).
On Question, amendment agreed to.
[Amendment No. 168 not moved.]
Lord Whitty Lord Whitty moved Amendments Nos. 168B to 168E:
Page 39, line 37, leave out ("Every maintained school other than an existing") and insert ("A new").
Page 39, line 40, leave out ("A school within subsection (6)") and insert ("Such a school").
Page 40, line 12, at end insert—
("(8A) Any amount made available by a local education authority to the governing body of a maintained school (whether under section 49 or otherwise)—

(a) shall remain the property of the authority until spent by the governing body or the head teacher; and

(b) when spent by the governing body or the head teacher, shall be taken to be spent by them or him as the authority's agent.

(8B) Subsection (8A)(b) does not apply to any such amount where it is spent—

(a) by way of repayment of the principal of, or interest on, a loan, or

(b) (in the case of a voluntary aided school) to meet expenses payable by the governing body under paragraph 3(1) or 3(2) of Schedule 3 or paragraph 14(2) of Schedule 6.").

Page 40, line 13, leave out subsection (9).
On Question, amendments agreed to.
Clause 48, as amended, agreed to.
Clause 49 [Effect of financial delegation]:
Lord Whitty Lord Whitty moved Amendment No. 168F:
Page 41, line 8, leave out subsection (7).
On Question, amendment agreed to.
Clause 49, as amended, agreed to.
Clause 50 agreed to.
Schedule 15 agreed to.
Clauses 51 and 52 agreed to.
Clause 53 [Staffing of community, voluntary controlled and community special schools]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 168G:
Page 42, line 37, leave out ("Or by virtue of section 48(2) or (4)").
On Question, amendment agreed to.
Clause 53, as amended, agreed to.
Schedule 16 [Staffing of community, voluntary controlled and community special schools]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 168A:
Page 162, line 5, leave out ("below") and insert ("in paragraphs 4 to 7").
The noble Lord said: The Committee having now moved into that part of the Bill which deals with staffing, it may be of assistance if I say a few general words before I introduce this amendment and speak to the amendments of other noble Lords. The main purpose of the staffing provisions is to carry existing provisions forward into the new framework. Most of these provisions appeared in the Education Reform Act 1988

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and some have their origins in the 1944 Act. I have in mind the basic provisions on appointments and dismissals and religious safeguards.
The changes that we have introduced arise mainly from, first, the need to provide for foundation schools which will come back into the LEA-maintained fold but retaining their power to employ their own staff; secondly, the abolition of articles of government, which means that we need to provide to allow some historical practices to continue, such as the right of Catholic religious order schools to give prior consideration to members of the order when a headship becomes vacant; thirdly, the need to clarify but not extend the religious safeguards for Church schools which were couched in the outdated language of the 1944 Act—which I shall gladly explain to the very reverend Canon the noble Lord, Lord Pilkington, if necessary—and, fourthly, our policies set out in the White Paper Excellence in Schools in support of good management and leadership, in particular the requirement for schools to have capability procedures and the local education authority's right to make representations to the governing body on unsuitable head teacher appointments.
The basic principles of the staffing provisions reflect earlier arrangements, including those put in place when Local Management of Schools was introduced 10 years ago. I hope that, since there are no changes involved, we need not spend too much time on those provision.
I should like to speak first to the government amendments. There are two amendments in the name of the noble Lord, Lord Lucas, in the group. If he agrees, I shall speak to them after he has spoken. There is also an amendment tabled by the noble Lord, Lord Elis-Thomas. As he is not in his place today, I assume that it will not be moved.
Government Amendment No. 168A is a tidying-up amendment which removes the need for the governing body initially to notify the LEA of a vacancy for a head or deputy head teacher in circumstances where the incumbent is merely absent and the governing body proposes to recommend someone as an acting head or deputy head teacher.
Government Amendments Nos. 175A and 176E will provide Church of England and Roman Catholic diocesan authorities with advisory rights on the face of the Bill. Those are currently provided in the Church of England Board of Education Measure 1991, in the case of Church of England voluntary aided schools, and in the articles of government of Catholic voluntary aided schools. The entitlement for a diocesan authority to advise at a governing body's proceedings on appointments and dismissals will apply where the chief education officer of the LEA has advisory rights on staffing matters. The amendments will also provide Church of England, Church in Wales or Roman Catholic foundation and voluntary controlled schools with the discretion to extend advisory rights on staffing matters to diocesan authorities. The scope to accord advisory rights will apply at any time in the case of voluntary controlled schools, as the chief education officer of the LEA enjoys advisory rights at all times. In the case of foundation schools, it will apply only where the
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governing body has agreed advisory rights for the chief education officer of the LEA. These amendments represent a rolling forward of the current arrangements for diocesan advice on staffing matters in these church schools, and I therefore trust that the Committee will agree that they should be included in the Bill.
Government Amendments Nos. 176A, I76B, 176C, 176D and 176F also roll forward arrangements that currently exist. They are provided for in the articles of government of those voluntary aided schools which deal with head teacher appointments in the way permitted by those provisions. The effects of amendments are twofold. In the case of a voluntary aided school which is run by a Roman Catholic religious order, provision is made for the major superior of the order to propose a suitably qualified person from the order for appointment to a head teacher vacancy. Provision is also made for the governing body of a voluntary aided school to determine the selection of a head teacher by the whole governing body rather than using a selection panel.
These amendments have benefited from consultation with the churches and I believe that they represent a sensible way forward for providing these church schools with advice on their staffing functions. I hope that the Committee will join me in supporting their inclusion in the Bill. I beg to move.
Lord Lucas: Perhaps I may speak briefly to the two amendments in my name in this group of amendments. They cover the circumstances, which I must say I have been in on the other side of, where the chief education officer, or one of his delegates, gives advice on the appointment of a teacher or head teacher. On one occasion that person gave extremely prejudicial advice about a certain individual, saying, "Oh, we have heard this, that and the other about him". The chief education officer—in that case he was giving information on a deputy head in his care—is in a position to deny that person promotion and advancement by spreading information—rumour—which is totally unsubstantiated.
The Government, and the previous government, have gone to considerable lengths to prevent credit reference agencies from doing that. It is now a well-established principle that a person has the right to his personal file in order to know what is being said about him on occasions which make a great difference to his life. The chief education officer is and should be a responsible person. If he is prepared to give advice to the governors of a school, those people appointing a head teacher, he should do so in writing. He should make that advice available to the person about whom he is writing. There should be nothing secret, underhand or under the counter about it. If the chief education officer is prepared to say something in public, he should say it, otherwise he should keep decently quiet about it.
The Lord Bishop of Ripon: I welcome the amendments relating to Church schools. I refer to Amendments Nos. 175A and 176E. Amendment No. 176E refers to voluntary-aided schools. As the Minister said, that extends on to the face of the Bill the provision which has been made by articles of association until now. That is a different provision from that in

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Amendment No. 175A for controlled schools, whereas for aided schools the Bill provides that the appropriate diocesan officer shall have the same advisory rights as the chief education officer. In relation to controlled schools, the governing body may agree that that shall be the case. Their consent is required. It seems to me that that is proper.
Although many controlled schools had articles of association which provided in that regard, it was not universally the case. Therefore that amendment extends to all voluntary controlled schools a practice which was already largely but not universally in place. It is important because in recent years voluntary controlled schools—they are not on precisely the same basis as aided schools—have come to recognise their Church affiliations, not least because of the Ofsted inspections of such schools. This provision will help those who appoint the teachers to such schools to recognise the Church association and the provision which such a controlled Church school can make to education in the locality.
I welcome the amendment, which will encourage controlled schools to recognise their Church affiliation.
Lord McIntosh of Haringey: Perhaps I may reply to Amendments Nos. 172 and 173, in the name of the noble Lord, Lord Lucas. I understand the point he makes about the possibility of any superior, whether a chief education officer or anyone else providing a reference, for example, behaving in an irresponsible way. But the place to remedy that is in a code of practice rather than on the face of the Bill. I do not know whether the noble Lord has taken part in the selection of a head teacher in a governing body, as I have. As chair of a governing body, I have run the selection panel which selects the head teacher. We have the chief education officer of the local education authority with us during the interviews. At the end of the interviewing process he or she gives his or her opinion on the candidate. That cannot be in writing. Therefore, the noble Lord's amendment, which requires it to be in writing, cannot be achieved.
Similarly, where a meeting takes place in those terms, what the chief education officer says cannot be and normally should not be revealed to the candidates. Even if it should be revealed to the candidates, the effect would be to make it impossible for the meeting to come to a conclusion about which candidate to appoint. Therefore, on purely practical grounds, I ask him to withdraw his amendment and to accept our assurance that in terms of general employment law a code of practice is the better approach.
I am grateful for the comments of the right reverend Prelate about the government amendments. I commend Amendment No. 168A to the Committee.
On Question, amendment agreed to.
9.30 p.m.
Lord Lucas Lord Lucas moved Amendment No. 169:
Page 162, line 6, leave out ("and either") and insert (", and").
The noble Lord said: In moving Amendment No. 169, I shall speak also to Amendment No. 170. These are
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purely grammatical quibbling. Quite clearly, a comma is required after "teacher", otherwise the vacancy is "in and either" the post. A comma is required. I would prefer the word "either" to be removed because I find the either/or construction in that particular collection of commas and sentences to be inelegant and it looks better without. I am certain about the commas, but the word "either" may give rise to a bit of an argument. I beg to move.
Lord McIntosh of Haringey: I have consulted Fowler and Sir Ernest Gowers and neither of them gives me any guidance. I must point out that legislation is not a literary form and where, in a literary form, we probably would include a comma, in legislation we do not. I am advised that the professional draftsmen have it right and that the noble Lord's amendment would make no practical difference. I ask him to withdraw it.
Lord Lucas: I retire defeated.
Amendment, by leave, withdrawn.
[Amendment No. 170 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 171:
Page 162, line 36, leave out ("England and Wales") and insert ("the United Kingdom").
The noble Lord said: I do not see why we should deprive our schools of the many wonderful teachers from Scotland, many of whom I remember with pleasure. It seems to me an unnecessary bit of provincialism to leave out Scotland, in particular at a time when what we can do to keep the Union together seems to be worth doing. I beg to move.
Lord McIntosh of Haringey: I shall not respond to the noble Lord's unionist point; we can deal with that when we come to the Scotland Bill. Amendment No. 171 could place an additional burden and additional financial cost on the governing bodies of voluntary controlled and community special schools. The purpose of the provision requiring them to advertise their senior posts throughout England and Wales is to ensure that the vacancies come to the attention of the best possible candidates both within and beyond the local area of any school.
The noble Lord will know as well as I that many of the places where one might advertise senior vacancies—notably, without giving undue prominence to the publications of Mr. Rupert Murdoch, The Times Educational Supplement and The Times Higher Educational Supplement—are circulated throughout the United Kingdom. Therefore, it is likely that what he proposes would be the case. To put it on the face of the statute underestimates the ability of those in Scotland or in Northern Ireland who wish to apply for jobs in England and Wales to use their initiative to do so. If they were not willing to use that initiative they might not be the best people for the job. Let us keep the matter as simple as we can. I ask the noble Lord to withdraw the amendment.
Baroness Blatch: In the light of that answer, why should we not put an obligation on schools simply to

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publicise the post in appropriate documents? Why should Wales have any superiority over Northern Ireland or Scotland? It seems to me that, in some subjects which are short of teachers, schools will want to advertise more widely.
The Minister will no doubt say that schools can advertise where they like, if they wish to do so. But why put a legal obligation in the document? Such examples appear throughout the document. Indeed, there is great prescription in areas that really do not matter, but no prescription in those that do. It seems to me that the obligation on the school should be to advertise the post: end of story.
Lord McIntosh of Haringey: We are concerned to ensure that the post should not simply be advertised locally. I agree that it specifies England and Wales, and perhaps that is an historical accident. Indeed, perhaps it tends to be thought of as a single phrase like, for example, fish and chips—although I probably should not say that. I shall consider the remarks made by the noble Baroness but, in the meantime, I urge the noble Lord to withdraw his amendment.
Lord Lucas: My noble friend is probably more sensible in this respect than I am. It is indeed an old phrase and I understand that it has an historical background. However, if we are going to specify something, I believe that "The United Kingdom" is the right expression and is as it should be for now. The Welsh will end up with a different curriculum and a different school system pretty rapidly under this Bill and under the Welsh Bill when they are enacted. There is no reason to link England and Wales together and exclude Scotland and Northern Ireland. It should either be a general requirement to publicise, or the document should specify the United Kingdom of which, thank goodness, we are still part. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 172 and 173 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 174:
Page 167, line 8, after ("capability") insert (", or the failure to give education efficiently and suitably,").
The noble Lord said: This amendment explores a particular phrase used in paragraph 22 of Schedule 16 to the Bill which is used to describe the rules for dealing with staff who are not up to the job, if I may employ ordinary English. The phrase chosen in that particular part of the Bill is,
"lack of capability on the part of members of the staff".
It may be lack of capability on some occasions but, generally speaking, what we are faced with in such circumstances is lack of performance. The teacher may be capable of doing his job but he is not doing it. A good school with a good system for looking after teachers will endeavour to train and encourage them. However, at the end of the day, the problem is lack of performance and not lack of capability.
Elsewhere in the Bill in the section which deals with the employment of teachers of religion in religious schools, the phrase is used that I have included in Amendment No. 174; namely,
"the failure to give education efficiently and suitably".
The two together seem to me to give the right answer. I hope that the Minister will feel able to accept my amendment. I beg to move.
Lord McIntosh of Haringey: I, too, had teachers like that. The amendment is unnecessary. The provision in the Bill requires the governing body to establish disciplinary rules and procedures including rules and procedures for dealing with lack of capability of staff. Normal disciplinary rules and procedures would cover such matters as the conduct of someone who does not provide efficient or suitable education, to use the perfectly legitimate phraseology of the noble Lord, but whose capability is not in question.
One can quite see that those who have, for example, been good teachers may have become slack and not actually do the job. It is important to remember that disciplinary rules and procedures should be able to deal with problems of both conduct and capability. The requirement for disciplinary rules and procedures already provides adequately for school staff whose performance is not satisfactory. Therefore, as I said, the amendment is unnecessary.
Lord Lucas: I am duly comforted and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No. 175:
Page 168, line 1, at end insert—
("( ) In determining whether to make such a suspension, the governing body shall have regard to any guidance given from time to time by the Secretary of State.").
The noble Lord said: This amendment addresses the problem which, again, I can remember not quite coming across as a governor. When one becomes involved in the question of suspending a head teacher, most governing bodies—thank goodness—are entering into complete terra incognita; indeed, sometimes one has never been through such things before.
These days, if one is anywhere near a national newspaper, one is in danger of becoming featured in television and radio reports in a very big way and entering into extremely deep water. At that time I was aware of no guidance from the DfEE as to how one should conduct oneself in those circumstances. I am not aware that any exists now, although that may be due to my ignorance. However, it would be an enormous help to have some. I beg to move.
Lord McIntosh of Haringey: I must confess that in many years of being a school governor I never had the misfortune to need to suspend a teacher. I bow to the noble Lord's superior experience on that. His amendment would require governing bodies to have regard to guidance provided by the Secretary of State before suspending a member of staff. It would

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encourage a prescriptive approach to this function which in practice might not always be wise or helpful. As he said, there are many circumstances in which it may be necessary to suspend an employee. The kind of guidance for which he asks could involve an exhaustive list of circumstances in which suspension would be appropriate, or indeed circumstances in which it would not be appropriate.
In practice I believe one would seek advice locally from the local education authority, the social services department or even the police, if that were necessary. As regards the protection of children, the Secretary of State already provides guidance in the context both of teachers' misconduct and the medical fitness of teachers. That guidance sets out general advice to schools but it cannot take the place of local professional advice on the circumstances of any particular case. Generally, suspension of staff is an employer function. It would be neither necessary nor appropriate for the Secretary of State to provide general guidance on the exercise of that function.
The ACAS code of practice on disciplinary procedures in employment which is available to all employers recommends that in serious cases consideration should be given to suspension with pay for a brief period while the matter is being investigated. The problem with the guidance the noble Lord asks for is that it would be either too general to be useful, or it would be so detailed that it would run the risk of covering far too many, but perhaps not quite enough, cases. I hope that in the light of that response the noble Lord will withdraw the amendment.
Lord Lucas: I thank the noble Lord for that reply. It is not what I had hoped for, but I shall take instruction. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 175A:
Page 169, line 5, at end insert—
("Advisory rights for appropriate diocesan authorities
.—(1) This paragraph applies to a voluntary controlled school which is a Church of England, Church in Wales or Roman Catholic Church school.
(2) The governing body may agree with the appropriate diocesan authority to accord to the appropriate diocesan officer—

(a) with respect to all teachers at the school, or

(b) with respect to any particular description of such teachers,

the same advisory rights in relation to their appointment. engagement or dismissal as are exercisable by the chief education officer in accordance with paragraphs 18 and 28.
(3) The agreement of the governing body for the purposes of sub-paragraph (2) must be given in writing and may only be withdrawn by notice in writing to the appropriate diocesan authority.
(4) In paragraphs 18 and 28, as they apply to a voluntary controlled school within sub-paragraph (1) above, references to the chief education officer accordingly include the appropriate diocesan officer, so far as necessary for giving effect to any advisory rights exercisable by him under this paragraph.
(5) In this paragraph "the appropriate diocesan officer" means such person as the appropriate diocesan authority may nominate.").
On Question, amendment agreed to.
Schedule 16, as amended, agreed to.
Clause 54 [Staffing of foundation, voluntary aided and foundation special schools]:
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 175B:
Page 43, line 7, leave out subsection (1).
The noble Lord said: As ever, the noble Lord, Lord McIntosh, provides me with a marvellous introduction. He does not believe in prescriptive legislation and I want to talk about prescriptive legislation. In moving Amendment No. 175B I wish to speak also to Amendments Nos. 175C and 175D which underline my wish that Schedule 17 shall not stand part of the Bill.
As we are all mentioning our credentials at the moment I should say that I have been a governor of seven schools and I was a headmaster for 17 years. I have suspended teachers and therefore I suppose I can speak with some authority on the matter. The most important function of governing bodies is to appoint heads. It is possibly the only great thing that they do, because the future of their school depends on it.
The amendments relate to Schedule 17 standing part of the Bill. Therefore I am referring to Schedule 17. My worry is that, under the schedule, too much is referred back to the local authority. On page 171 of the Bill, Schedule 17 reads:
"If, within the period of 14 days beginning with the date when they receive a notification under sub-paragraph (2)(a), the authority make written representations to the selection panel that any of the applicants selected by the panel is not a suitable person for an appointment".
I should have thought that a governing body would be quite capable of making its decisions without an extra level of bureaucracy referring matters to the local authority.
I welcome the amendments in relation to foundation and voluntary-aided schools allowing for the normal procedure to be followed, which was not to be followed under the Bill as originally drafted; namely, a selection panel referring people to the whole governing body. I am delighted about that, as I am about the fact that the superiors of religious orders have rights of appointment.
9.45 p.m.
Lord McIntosh of Haringey: They have rights of inclusion in a list for consideration, to be precise.
Lord Pilkington of Oxenford: They own the buildings, it must be remembered. But I thank the Minister.
Line 16 refers to the chief education officer and the provision states that,
"the selection panel's notification … shall be accompanied by such information",
and so on. The provision introduces needless bureaucracy. So far as I can gather, the whole essence of the Government's policy is to hand autonomy to schools, to give them responsibility for these issues. However, under Schedule 17, the Government are

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nannying more than is necessary. Governing bodies are ready to be responsible. They will appoint the right person. We do not need this extra bureaucracy.
Turning to the appointment of teachers, if a head is going to be any good at all in his job, the appointment of staff is the key test of his ability. A head teacher stands or falls on whether or not he appoints the next member of staff. The Bill lays down a regulation that a post has to be advertised. Perhaps I may relate an anecdote. It is very hard to get teachers of mathematics or physics. A colleague of mine was searching for a teacher of physics. He heard from Australia that a brilliant teacher of physics was moving back to England. He telephoned him, trusted the advice of his colleague, and appointed him without advertisement. He proved absolutely superb. I myself appointed a teacher of mathematics in a similar way. I went to a dinner at Oxford and met a student fellow who was giving up his fellowship and said he was looking for a job. I saw him as a genius, and I appointed him. He was a genius. That would be forbidden under this provision. The initiative of an enterprising headmaster such as myself or many of my colleagues would be stopped. Posts would have to be advertised throughout England and Wales. Under this provision many noble Lords on the Benches opposite would not have occupied their posts. Many jobs have been given to people.
My point is that this measure is prescriptive. I hope the noble Lord will justify that prescription, which I am sure has never applied in his own career. A manager at Marks & Spencer would not accept the restrictions that would be laid upon him under this schedule. It does not exist in many other fields. It is sheer waste in terms of local authority bureaucracy. Will the noble Lord therefore tell us how this prescriptive provision could be relaxed? I beg to move.
Lord McIntosh of Haringey: I admire the noble Lord's initiative in recruitment. I think it is fair to say that, having run a business myself for 30 years as a managing director, I would have done exactly the same as he did. When I found somebody, particularly if they were working for a competitor, I would try to poach them. But I have to remind the noble Lord of what I said when we began to talk about staffing. I pointed out that, with the very few exceptions that I read out, we are carrying over into this legislation, with only the minimum necessary adaptation, prescriptions which already exist in legislation.
The noble Lord is right to say that this is prescriptive, but he is attacking something that has been around for a very long time. He, as a head teacher of an independent school, was able to act as a buccaneer, but his colleagues in the state system have never had the type of freedom that he describes—or, if they have, they adjusted the rules slightly.
As I am sure the noble Lord would acknowledge, the effect of these amendments would be to remove Schedule 17 from the Bill, which could have been done more simply by the clause stand part procedure, which has been given notice of. I hope to persuade the noble Lord that Schedule 17 is an essential part of the structure of the new framework, providing for the staffing
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provisions for foundation, voluntary aided and foundation special schools where the governing body is the employer.
The schedule contains the details of the arrangements for the appointment of heads and deputies, other teachers and non-teaching staff; the regulation of conduct and discipline of staff; the suspension and dismissal of staff; and, where appropriate, the provision of professional and expert advice on those functions from both the chief education officer of the LEA and the diocesan authority. The noble Lord's attack has been very narrowly focused on the appointment of teachers, and in particular of teachers other than the head, and not on the other elements of Schedule 17 which would be removed by his amendments.
I hope to persuade the noble Lord of the need for the staffing functions of the schools to which this schedule will apply to be dealt with in a consistent and considered way as between schools and as between education authorities. These arrangements are currently provided in the instrument and articles of government for voluntary aided and grant-maintained schools, which will be replaced in the new framework. The Churches, which have interests in both voluntary aided and grant-maintained schools with a religious ethos, have made no representations to us about removing the staffing provisions for these schools from the face of the Bill. Indeed, they have worked closely with us in order to include additional staffing provisions in the Bill, as provided for in the government amendments on diocesan advisory rights, head teacher appointments at religious order schools and governing body selection panels to which we have just agreed. If these schools were left to provide for all the details of Schedule 17 themselves, we would create a large vacuum that would need to be filled in some other way to ensure that schools were governed and managed in a prudent and responsible fashion.
Staff appointments, particularly those of head and deputy head teachers, are among the most important decisions that fall to governing bodies. In that I entirely agree with the noble Lord, Lord Pilkington. I am reminded of the late Nicholas Ridley, who thought he could reduce local authorities to bodies which met once a year to award contracts and then adjourn for a good lunch. I think that that is carrying it to extremes, but there is no doubt that this is the most important thing that governing bodies do. The composition and abilities of the staff, and in particular the head teacher, are vital to the success of any school. The teacher appointment provisions give governing bodies the overall decision on who to appoint to their schools.
It is right that governing bodies should have this responsibility. They are best placed to understand their schools' needs and serve their schools' interests. But the appointment provisions provide for governing bodies to take a responsible and considered approach to this important function. They require detailed consideration of head and deputy head teacher vacancies by a duly appointed selection panel of governors after such posts have been advertised—my text says "throughout England and Wales", but that is perhaps a reserve issue—and for the panel's recommendation to be

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approved by the full governing body. They also provide for the governing body to agree advisory rights for the chief education officer of the local education authority and, where those are not agreed, for the Secretary of State to determine that such rights be accorded if necessary. The Secretary of State might, for example, determine that advisory rights be accorded to the chief education officer where a governing body is unable to satisfy him that they are receiving an appropriate level of good quality professional advice from some other source and that the school is in no way failing to provide a good quality of education to its pupils.
So it is not necessarily the case that the chief education officer will always get advisory rights, but even where he does not, the local education authority will enjoy specific entitlements to make representations to any governing body. That underpins the local education authority's enhanced role of intervening and supporting those schools which fail to provide a satisfactory level of education for their pupils. This is a schools standards Bill and this is the role of the education authority.
Included in the teacher appointment provisions are new arrangements—this may relieve the noble Lord's mind—which give governing bodies the scope to engage staff on a temporary basis; that is, engage persons to provide services as teachers at schools otherwise than under contracts of employment. This includes temporary teachers for less than four months and acting heads and deputies while a permanent replacement is being found or the incumbent is on long-term sick leave. The teacher employment market has changed in recent years, as the noble Lord made clear, and there are now a number of ways to meet short notice staffing needs. Schools need to be able to get the best available local support and that sometimes means using teacher supply agencies. They also need to be able to take decisions on covering absences at short notice. The staffing provisions of the Bill provide governing bodies with the scope to meet such staffing needs as they see fit. The scope to engage staff also extends to heads and deputy heads. Very often it is possible to cover short absences or gaps by using recently retired staff and there are many good retired teachers who can help schools in that way, including retired heads and deputies.
I will not go into the detail of disciplinary procedures or of suspension and dismissal since the noble Lord did not raise objection to those elements in Schedule 17. However, I urge him to recognise that Schedule 17 is much wider than the specific points he raised and deserves and needs to stay in the Bill.
Lord Pilkington of Oxenford: The noble Lord's reply worries me. In essence we are trying to draw out of the maintained sector the initiative and imagination that is there. As the noble Lord knows from his practice in business, initiative and imagination are drawn out by giving responsibility for decisions.
Schedule 17 is a belt and braces operation. Fundamentally, it says that we cannot really trust a governing body to appoint the right man or woman; we need the local authority to look at it. We cannot rely on
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the head to appoint the right teacher; we need to safeguard. As the noble Lord said, that does not apply anywhere else. The schools are surrounded by the diocesan authorities and the local authorities. My objection to Schedule 17 is that it does not allow the initiative which exists to come through.
I do not want to harp on about the Oratory School and I do not raise that as a political point in relation to the Prime Minister. However, I must mention the name of John Mackintosh. He is a distinguished headmaster who transformed his school on his own initiative, on his own appointments within the state sector. I want to see 3,000 John Mackintoshes and this schedule stops that happening.
The fact is that people like the noble Lord apply one rule in their business, as does everyone else in society. It is true that the flag of the independent sector, like the flag of the noble Lord's sector, was the skull and crossbones. I acknowledge that, but we followed our initiative and we failed if we did not do that. Why not allow this in the state sector? What is it about teaching that needs this elaborate, complicated control which does not apply in any other area of English life?
I shall withdraw the amendment, but the noble Lord has not proved his point and he did not live his life by the philosophy which he is putting forward.
Amendment, by leave, withdrawn.
10 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 175E:
Page 43, line 11, leave out ("or by virtue of section 48(2) or (4)").
On Question, amendment agreed to.
[Amendments Nos. 175C and 175D not moved.]
Clause 54, as amended, agreed to.
Schedule 17 [Staffing of foundation, voluntary aided and foundation special schools]:
[Amendment No. 176 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 176A to 176F:
Page 170, line 9, at end insert ("(but paragraphs 6 to 8 so apply subject to paragraphs 28 and 29).").
Page 170, line 11, leave out ("below") and insert ("in paragraphs 5 to 8 (or, in a case where paragraph 28 or 29 applies, any of the steps falling to be taken under that paragraph)").
Page 170, line 35, at end insert—
("(6) In sub-paragraph (1) the reference to paragraphs 6 to 8 includes a reference to paragraph 28 or 29; and in sub-paragraph (2) the reference to paragraphs 6 to 8 includes a reference to paragraph 29.").
Page 173, line 23, after ("9") insert ("or 28 and 29").
Page 176, line 4, at end insert—
("Advisory rights for appropriate diocesan authorities
27.—(1) This paragraph applies to a voluntary aided or foundation school which is a Church of England, Church in Wales or Roman Catholic Church school.
(2) If the school is a voluntary aided school, the appropriate diocesan officer shall have the same advisory rights in relation to the appointment, engagement or dismissal of teachers at the school as are for the time being exercisable by the chief education officer in accordance with paragraph 2(3).
(3) If the school is a foundation school, the governing body may agree with the appropriate diocesan authority to accord to the appropriate diocesan officer—

(a) with respect to all teachers at the school, or

(b) with respect to any particular description of such teachers,

the same advisory rights in relation to their appointment, engagement or dismissal as are exercisable by the chief education officer in accordance with paragraph 2(3).
(4) The agreement of the governing body for the purposes of sub-paragraph (3) must be given in writing and may only be withdrawn by notice in writing to the appropriate diocesan authority.
(5) In paragraphs 18 and 25, as they apply to a school within sub-paragraph (2) or (3) above, references to the chief education officer accordingly include the appropriate diocesan officer, so far as necessary for giving effect to any advisory rights exercisable by him under this paragraph.
(6) In this paragraph "the appropriate diocesan officer" means such person as the appropriate diocesan authority may nominate.").
Page 176, line 4, at end insert—
("Appointment of head teachers for schools of Roman Catholic religious orders
28.—(1) This paragraph applies to a voluntary aided school if the trustees under a trust deed relating to the school are also the trustees of a Roman Catholic religious order.
(2) Subject to sub-paragraph (6), sub-paragraphs (3) to (5) shall have effect in relation to the filling of a vacancy in the post of head teacher of the school, in place of paragraphs 6 to 8.
(3) The governing body shall notify the Major Superior of the vacancy in writing.
(4) The governing body shall—

(a) interview such persons who are members of the order as are proposed as candidates for appointment to the post by the Major Superior; and

(b) appoint to the post one of the persons so interviewed by them unless, by virtue of sub-paragraph (5) or otherwise, they have good reason for not making any such appointment.

(5) No person shall be appointed under sub-paragraph (4)(b) if he does not meet any staff qualification requirements which are applicable in relation to his appointment.
(6) If no appointment is made by the governing body under sub-paragraph (4)(b), paragraphs 6 to 8 shall have effect in relation to the filling of the vacancy.
(7) In this paragraph—
"the Major Superior" means the Major Superior of the order;
"the order" means the order mentioned in sub-paragraph (1);
"Roman Catholic religious order" means a Roman Catholic religious institute or society of apostolic life.
Selection procedures involving whole governing body
29.—(1) If the governing body of a voluntary aided school so determine (and paragraph 28 does not apply), sub-paragraphs (2) to (6) below shall apply in relation to the filling of a vacancy in the post of head teacher or deputy head teacher of the school, in place of paragraphs 7 and 8.
(2) No selection panel need be appointed by the governing body under paragraph 7(1), but the following provisions, namely—

(a) paragraph 7(2)(a) and (b),

(b) paragraph 7(3), and

(c) paragraph 7(6),

shall apply to the governing body or (as the case may be) to any decision of that body taken by virtue of this paragraph as it applies to a selection panel or (as the case may be) to any decision of such a panel taken under paragraph 7.
(3) If, within the period of 14 days beginning with the date when they receive a notification under paragraph 7(2)(a) (as it applies in accordance with sub-paragraph (2) above) the local education authority make written representations to the governing body that any of the applicants selected by them is not a suitable person for appointment to the post of head teacher, the governing body shall not appoint that person unless they have—

(a) considered those representations, and

(b) notified the authority of their response to the representations.

(4) The governing body shall not appoint any person if he does not meet any staff qualification requirements which are applicable in relation to his appointment.
(5) If the governing body do not appoint any person interviewed by them, the governing body—

(a) may, if they think fit, re-advertise the vacancy in the manner required by paragraph 6, and

(b) whether or not they re-advertise the vacancy, may repeat the steps mentioned in paragraph 7(2)(a) and (b) (as they apply in accordance with sub-paragraph (2) above).

(6) Paragraph 7(7) shall apply for the purposes of this paragraph.").
On Question, amendments agreed to.
Schedule 17, as amended, agreed to.
Clause 55 [Staffing for non-school activities]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 176G:
Page 44, line 18, leave out ("or by virtue of section 48(2) or (4)").
On Question, amendment agreed to.
On Question, Whether Clause 55, as amended, shall stand part of the Bill?
Lord Pilkington of Oxenford: Following on from the previous amendment, in respect of what other walk of life would you put in an Act of Parliament a provision such as how a school is to employ people who maintain non-school activities and relative staffing provision? I would like the noble Lord to tell me why it is that the headmaster and governing body of a school are not able to deal with these matters.
I shall not dwell on the issue. This is nannying of the highest order. One is talking about a school which has a reputable governing body and head teacher, and the Government wish to put in an Act of Parliament how they should govern the school. Does the Minister think the management of Marks and Spencer would accept that? This relates to employing extra, part-time staff and 25 trees will have to be chopped down to put this in the Bill. Is it necessary? What is it about governing bodies that makes them so helpless that they cannot employ a couple of extra people to organise a fete in the evening?

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I would like the Minister to tell us why he has to put this sort of thing in a Bill? It seems to me to be a waste of trees. I beg to move.
Lord McIntosh of Haringey: The noble Lord fails to recognise that this is a permissive clause. In other words, it only happens to the extent that the local education authority may determine. If the local education authority so determines, Schedule 16—for community, voluntary controlled and community special schools—and Schedule 17—for foundation, voluntary aided and foundation special schools—apply in relation to persons employed to work solely or partly for the purpose of non-school activities. Thus, either the governing body is able to manage all the staff who work on the school premises or, where appropriate, the local authority can take responsibility for staff engaged in non-school activities.
This is not new. The clause appears in similar form in Section 140 of the Education Act 1996—the consolidation Act—and it dates back to the introduction of Local Management of Schools by the noble Lord's own government in the Education Reform Act 1988.
What we want to do is ensure that non-school activities can take place in schools and that there is a legal framework in which that can happen. It does not have to be imposed if the local education authority does not so determine. But schools have found that where they want to encourage non-school activities on school premises it is helpful to have this kind of provision. It should not be a controversial clause at all. It represents a commonsense approach to dealing with responsibility for staffing at those schools where non-school activities take place.
The school of which I was chair of governors for many years called itself a community school. We prided ourselves in Drayton School in Tottenham on the number of out-of-school activities that took place. Some of them had teachers from the school; some of them had people from community groups outside; a lot of them had adults squeezed into children's desks. But the school was an active place right up into the evening. I am sure the noble Lord shares my enthusiasm for that kind of activity. But it is for the comfort of governing bodies and for the security of those involved that we should have this approach to responsibility for staffing. If the clause were not in the Bill it would introduce an element of confusion over the organisation of these activities and take away a sensible mechanism for organising the staffing of these important community services. I beg the noble Lord not to try to take it out of the Bill.
Lord Pilkington of Oxenford: I accept what the noble Lord has said. I have the advantage over him that I was not responsible for the policies of the previous government as he was for the policies of the Opposition. The Bill is being introduced by a new Government, a Government who are prepared, so I am told, to look at history with a new eye, but who are not prepared to question the restrictions of the past. I accept the noble Lord's point that, legally, most likely in terms of
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insurance, this is possibly necessary. But the thrust of the Bill ought to be to hand the governors, the headmaster and the staff responsibility for these matters. The Government have avoided doing it. They have surrounded these schools with the same restrictions that existed historically—in particular, the shackles of local authority control—which makes it rather hard to do the kind of things the noble Lord wants. In various parts of the country some schools have found it hard to do this. Some local authorities have worried about the structure of the buildings.
All these amendments rest on the governors and the headmaster carrying responsibility and the local authority recognising that they are able to enter into insurance arrangements and so on. Unless we achieve that level of responsibility, we will never get English schools right.
I accept the noble Lord's point. I raise my point about giving responsibility to schools which I do not think this Bill does. That is why I have tabled these amendments. Fundamentally, this Government or a subsequent government, will have to do that if English education is to be put right. The same factors as made the Minister a success in business will also make headmasters successful in state schools. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55, as amended, agreed to.
Clause 56 [Payments in respect of dismissal, etc.]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 176H:
Page 45, line 8, leave out ("or by virtue of section 48(2) or (4)").
On Question, amendment agreed to.
Clause 56, as amended, agreed to.
Clause 57 agreed to.
Clause 58 [Staff at community, secular foundation or voluntary, or special school]:
Lord Lucas Lord Lucas moved Amendment No. 177:
Page 46, line 18, leave out ("religious opinions") and insert ("opinions as to religion").
The noble Lord said: In moving this amendment I shall speak at the same time to Amendment No. 181. Amendment No. 177 questions the wording of Clause 58(2). At the moment it says,
"No person shall be disqualified by reason of his religious opinions",
which one might conveniently translate into "religious convictions". There are some comfortable religions in this House and many which are not. Some people's religious convictions may amount to things that one does not want to have in a school and quite reasonably so. I propose to change the wording to "opinions as to religion"—in other words, seeking to mean that the person cannot be disqualified because of his opinions about religion. But opinions may also involve doing nasty things to children in a ceremonial sort of way; for example, at the moment a devil worshipper, according to the way in which things are written at the moment, could get in under this clause. If one can change the wording to make sure that the opinions are about

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religion rather than the nature of the opinions themselves, which are exempt from disqualification, then it will be a safer clause to have in the Bill.
Amendment No. 181 turns to the last line on page 46 of the Bill. I find it an astonishing concept. We are here legislating to make sure that a teacher of religious education in a religious school should not be paid less because he teaches religious education. I find it astonishing that it should be necessary to legislate for that. Perhaps the right reverend Prelate can enlighten us as to whether someone teaching religion in a Church of England school would or could be paid less because he did that. I have not bothered to delete the following line where he could be paid less because he attends church. I find it an astonishing concept. I would like the noble Lord to explain. I beg to move.
Lord McIntosh of Haringey: We accept Amendment No. 177 in principle. There is a question about how to catch all shades of opinion, including those people who have no opinion at all on matters religious. I do not accept that "opinion" means the same as "conviction", but I do not believe that that is essential to the argument. We shall look into this rather than accepting the amendment now. There may be consequential changes. If appropriate, I shall invite the noble Lord to bring forward an amendment at Report stage which we can accept.
I now turn to Amendments Nos. 177A, 178A and 179A, which update and clarify the current safeguards of church schools allowing them to employ teachers with a commitment to the religious ethos of such schools. Government Amendment No. 179A provides for voluntary-aided schools to give preference, in connection with the appointment, remuneration or promotion of teachers to persons whose religious opinions are in accordance with the tenets of the religion or religious denomination specified in relation to the school; or who attend religious worship in accordance with those tenets; or who give, or are willing to give, religious education at the school in accordance with those tenets. Regard may also be had, in connection with the termination of the employment of any teacher at the school, to any conduct which is incompatible with the precepts, or with the upholding of the tenets, of the specified religion or religious denomination of the school.
Government Amendments Nos. 177A and 178A provide a discretion for foundation and voluntary controlled schools with a religious character to have regard to a person's ability and fitness to preserve and develop the religious character of the school in connection with the appointment of any such person as head teacher. The amendments will ensure that Church schools will be able to continue to preserve their religious character and ethos through the discretions that they exercise in employing teachers who support that character and ethos. I commend the amendments to the Committee.
Perhaps I may respond finally to Amendment No. 181, to which the noble Lord, Lord Lucas, referred. I remind the noble Lord that line 42 of Clause 59 refers not only to the question of remuneration but also to
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deprivation of, or disqualification from, any promotion or other advantage. The provision is a good deal wider than the noble Lord suggested. I submit that line 42 fits well into the clause as drafted and with the amendments to this clause to which I have spoken. I hope that the noble Lord will not seek later to press his amendment.
10.15 p.m.
Lord Lucas: I see with relief that Amendment No. 179A deletes the offending subsection, so I take it that that is no longer at issue.
The Lord Bishop of Ripon: I rise to speak to Amendments Nos. 177A, 178A and 179A. These arise from the amendment passed in your Lordships' House to the Human Rights Bill at Third Reading. I have already expressed my thanks to the noble Baroness, Lady Young, for the part that she played in moving that amendment and in being instrumental in having it passed in your Lordships' House. The noble Baroness is unable to be in her place at the moment, but I repeat my previous tribute.
I should like now to express my thanks to the Government for what I regard as a most generous response to the concerns which were expressed by members of the Churches in our debates on human rights. On Report, the noble and learned Lord the Lord Chancellor went to some lengths to make clear his view that appointments to Church schools should have regard to belief and practice in accordance with religious tradition. The amendment moved in your Lordships' House at Third Reading largely reflected the Lord Chancellor's words—and that amendment was passed.
I led a delegation to the Home Secretary which included members of the Roman Catholic Church and the free Churches as well as of the Church of England. The Home Secretary expressed the view that our concerns about Church schools would be properly met by an amendment introduced into this Bill. Therefore, I wrote to the Secretary of State for Education and Employment putting that point. I am delighted that the Government have accepted it. The form of the amendment was prepared in consultation with the Churches and we express ourselves completely satisfied.
Perhaps I may address Amendment No. 179A first. It refers to the appointment, remuneration, promotion and termination of employment of teachers at voluntary aided schools. It is of particular importance to us that the matters that are clarified relate not only to appointment, but also to termination. We are particularly glad that the two words "precepts" and "tenets" appear in the amendment. We take it that "precepts" refers to behaviour and that "tenets" refers to belief. The amendment clarifies what we took already to be the case; namely, that in appointing or dismissing either heads or teachers, regard could be had both to whether their behaviour was in accord with the religious tradition that the Church represented and to whether their belief was in accord with that tradition.
As to Amendments Nos. 177A and 178A, these are new provisions relating to foundation and voluntary controlled schools. Controlled schools are Church

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schools but have a different status from aided schools. The Committee is aware that the 1944 Act gave schools the choice to become aided or controlled schools. In many cases the decision was fairly haphazard. Aided schools were required to make a financial contribution to the capital costs of the buildings and have a majority of foundation governors. Aided schools had various other features. A controlled school made no financial contribution. Although foundation governors represented the religious foundation of the school they were not necessarily in the majority.
However, controlled schools are still quite clearly Church schools. In recent years there has been greater understanding on the part of such schools that they have Church status and need to pay attention to their religious character. But up to this point it has not been possible when interviewing for headships to make any kind of inquiry about a person's religious convictions or sympathy for a religious belief. A friend of mine told me that when interviewing people for the post of head he had to resort to questions such as how the candidate spent his time on Sunday mornings. This amendment means that questions can be put to establish whether a person has the ability and fitness to preserve and develop the religious character of a voluntary controlled school. We regard that as of great importance to Church schools. Therefore, I thank the Government for a most generous response to the concerns that we have expressed. We wholeheartedly support the amendment.
Baroness Byford: Perhaps the Minister can clarify whether this provision will ensure that there is no conflict between this Bill and the Human Rights Bill. This matter may have posed problems in the past. The right reverend Prelate expressed satisfaction with the amendment. However, can the Minister confirm that there will not be any conflict at any stage and that Church schools will be able to ask very direct questions? It is only right that they should be able so to do. Perhaps the Minister will enlarge upon that matter in his response.
Lord McIntosh of Haringey: The noble Baroness will be aware that the Government's position was that nothing in the Human Rights Bill removed the ability of Church schools to act in the way provided for in these amendments. Therefore, the conflict that she describes does not arise. I hope that she is as satisfied with these provisions as is the right reverend Prelate.
Lord Lucas: I am totally delighted and overwhelmed by the reply of the noble Lord, Lord McIntosh, to Amendment No. 177. It is an enormously rare privilege to have an amendment, if not quite accepted, at least approved by the Government. I am particularly delighted because it has arisen for reasons that I had not intended. I have stumbled across something where for different reasons we both agree that the amendment should be made. This is an amusing contrast to Amendment No. 181 where his speaking note appears to deny that my amendment is right whereas his amendments, Amendments Nos. 179 and 179A, clearly
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show that my amendment is right. I have won another amendment by the deletion of Amendment No. 179. However, I have not won any hearts in the DfEE in doing so. I shall chalk it up to my personal score, even if I am not allowed to acknowledge it in public. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 58 agreed to.
Clause 59 [Staff at foundation or voluntary school with religious character]:
The Deputy Chairman of Committees (Lord Cocks of Hartcliffe): I should point out that, if Amendment No. 179A is agreed to, I cannot put Amendment No. 181.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 177A, I78A and 179A:
Page 46, line 33, leave out ("subsection (3)") and insert ("subsections (3) and (3A)").
Page 46, line 38, at end insert—
("(3A) In connection with the appointment of a person to be head teacher of the school (whether foundation or voluntary controlled) regard may be had to that person's ability and fitness to preserve and develop the religious character of the school.").
Page 46, line 39, leave out subsection (4) and insert—
("(4) If the school is a voluntary aided school—

(a) preference may be given, in connection with the appointment, remuneration or promotion of teachers at the school, to persons—

(i) whose religious opinions are in accordance with the tenets of the religion or religious denomination specified in relation to the school under section 66(4), or

(ii) who attend religious worship in accordance with those tenets, or

(iii) who give, or are willing to give, religious education at the school in accordance with those tenets; and

(b) regard may be had, in connection with the termination of the employment of any teacher at the school, to any conduct on his part which is incompatible with the precepts, or with the upholding of the tenets, of the religion or religious denomination so specified.").

On Question, amendments agreed to.
Clause 59, as amended, agreed to.
[Amendments Nos. 178, 179 and 180 had been withdrawn from the Marshalled List.]
Clause 60 [Responsibility of governing body and head teacher for discipline]:
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 181A:
Page 47, line 18, leave out ("ensure that policies designed to").
The noble Lord said: I am sorry that the noble Baroness is not here to listen to my talk on discipline. I am sorry that the Minister cannot make it late in the evening. I hope that her other engagement is equally interesting. So the noble Lords, Lord McIntosh and Lord Whitty, will have to listen to me.
Many a tree has died in vain over this. Imagine this in any other walk of life. You are appointing a head teacher, and, such is the parlous state of English education, you have to put in a Bill what he shall do. He shall promote among pupils self-discipline and a proper

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regard for authority. He shall encourage good behaviour and respect for others, and secure that the standard of behaviour of pupils is acceptable. Why, uniquely, among the professions of England does a head teacher have to be told to do his job? I do not understand why Parliament should have to put what a man should do on the face of a Bill. Is it done for trade union secretaries or directors?
Lord McIntosh of Haringey: The noble Lord did it in an amendment earlier on this afternoon with regard to what happens at a parents' annual meeting.
Lord Pilkington of Oxenford: Oh, spiritual values!
Lord McIntosh of Haringey: Yes.
Lord Pilkington of Oxenford: The noble Lord does not like ideology. He must admit that this is a very different matter. I admire the noble Lord's clever tongue, but he does not get away with it. No, no, this is telling a man how to sign a letter.
Everyone knows that a school depends upon good discipline. A head teacher is judged upon whether or not he or she maintains discipline. The judgment comes from two sources. It comes from the parents, who will not send their children to the school if discipline is not kept. It comes, secondly, from inspection.
In all the amendments that I have proposed, I have said that I find that there is amazing mistrust of the education system so that one has to put on the face of a Bill what head teachers see as the essence of their exercise. All schools work well when the teachers and staff agree on a disciplinary code and the parents accept it. It can sometimes be difficult. Sometimes the parents resist some of it; sometimes there is conflict.
It is amazing that Her Majesty's Government should have such disregard for the teaching profession that they have to tell a head teacher that his job is to promote self-discipline, encourage good behaviour and secure the standard of behaviour of pupils. Are you expecting to take him to court if he does not do it? Are you going to take her to court if she does not do it? It is not necessary. Teachers have a standard of professionalism. God knows, I was part of it for long enough. The profession does not need to be told this sort of thing.
I ask the noble Baroness the Minister to tell us why she has to put on the face of a Bill what every head teacher would expect to be part of his or her job. It is an insult to the job that I carried out for 40 years. I beg to move.
10.30 p.m.
Lord Whitty: As the noble Lord indicates, the amendments would remove the important duties of head teachers for determining the school's discipline policy. They would leave the governing body with the sole duty of promoting good behaviour on the part of the school's pupils. Important though the governing body's duty is, it is only part of the equation in determining the school's discipline policy.
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I find these amendments from the official Opposition somewhat extraordinary. I am advised that Clause 60 with relatively minor amendments, re-enacts Section 154 of the Education Act 1996 as substituted by Section 2 of the 1997 Act taken through this House only 15 months ago by the noble Lord, Lord Henley, for the previous government. I cannot understand the ideological, or almost trade union, position of headmaster that the noble Lord takes—I use the word "headmaster" advisedly in this case—against this section. It is identical to Section 154 of the 1996 Act.
Secondly, the report of the noble Lord, Lord Elton, on discipline in schools made clear how important it is for schools to have a whole school policy, and the responsibilities of head teachers in that respect. These amendments would remove the duty on the head teacher of maintained schools to draw up a disciplinary policy setting out the standards of behaviour: what it expects; how good behaviour and discipline will be encouraged; and the sanctions which will be applied.
It is important that there are separate and specific duties on both the governing body and head teacher for determing the school's disciplinary policy. The governing body sets the framework of that policy by making the statement of general principles. The head teacher has responsibility for determining the measures which make up the school's code of conduct.
That was recognised in the 1996 Act. It was retained in the 1997 Act and we are retaining it now. I therefore believe that the amendments are misguided and in their effect would not help schools to promote and maintain high standards of behaviour. I believe that they should be withdrawn.
Lord Pilkington of Oxenford: I am glad to recognise another dinosaur! I accept that I was not a Member of the previous government, nor I think a Member of this House when the previous legislation was passed. The tendency has been to reiterate clauses from previous Acts as has occurred in this Bill. I am not being trade unionist on this. If a head teacher feels that to maintain discipline it has to be on the face of an Act of Parliament, there is something wrong with the relationship between the Government and teaching profession. Let us envisage a situation where there is fighting in the yard and the head teacher says, "It has nothing to do with me. It is not in an Act of Parliament".
The Government profess to be casting a new light on education. I am encouraging them in that. I ask that the vision should be realised in effect. But the Government prefer to tie themselves to old totems from Acts of Parliament that have been in existence for 50 years. This is not New Labour; it is old-fashioned government.
Lord Tope: It is new Tory.
Lord Pilkington of Oxenford: I hear "new Tory" being mentioned by noble Lords. It is better to trust the head teacher, master or mistress, to do the job than to tell them, "We mistrust you so much we have to put it

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on the face of the Bill". If that is done, those people will go by the letter of the law. I doubt that the noble Lord understands that.
Lord Tope: The noble Lord, Lord Pilkington, is right to say that it is not new Labour. The Minister himself in responding told us that it was old Tory and that is where it comes from. I am afraid that we see that too often.
I have total sympathy and support for what is in the Bill. It is clearly right and proper. However, I share a great deal of what the noble Lord, Lord Pilkington, said about the fact that the provision is included. Much though I support the objectives, it is yet another example of being too prescriptive in telling professionals how to do their job. If it is borrowed from the previous government, so be it.
I have a great deal of sympathy for what has been said. Although I support the provision, I question whether it needs to be included and whether it is not another case of the Government being far too prescriptive.
Lord Whitty: I wonder whether either noble Lord has considered the implication of removing the provision. What kind of signal would be given to head teachers and to people who follow our proceedings if we cross out a requirement for head teachers to have a responsibility for discipline? Whatever the merits of whether it ought to have been there in the first place, a detrimental impression would be given if we removed it at this stage.
Lord Tope: I am not sure that it is a defence to say, "We have included something which should not have been included but we cannot take it out because that would send the wrong signals." There is a changed circumstance. Might the creation of a general teaching council be an appropriate reason for removing provisions from a Bill? When we debated the GTC, many of us argued that this is exactly the kind of aspect for which it should be responsible. We are about to have a GTC undertaking that works so perhaps this is the time to remove such over-prescriptive legislation without sending the wrong message, as the Minister suggests. I do not believe that he has made his point.
Baroness Byford: The Minister asked what signals would be sent to the teaching profession. I believe that to say, "Here we trust you to do a good job. We are not going to prescribe, written down, what you should be about", would send a good signal. I thoroughly support the comments of my colleagues about being too prescriptive. The Government should not be negative but should embrace what we are saying and delete the provision. I do not believe that they should be afraid.
Lord Pilkington of Oxenford: I shall withdraw the amendment, so noble Lords need not worry; there will not be another vote tonight. English education has gone through a considerable amount of turmoil. I agree with the noble Lord, Lord Tope, that with the GTC we are
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moving into a new situation. In my experience, the teaching profession, with proper support from the Government, will behave responsibly. That is why we on this side of the Committee have argued about giving responsibility to schools. Our view is that if you hand out responsibility people will behave. The grant-maintained schools have shown that.
In consequence, we feel a certain amount of distress about putting on the face of the Bill the basic duties which are demanded of a head teacher. Do the Government want to ask people to trust them? This is like telling a bank cashier that he does not take £10 out of the till. It is as crude as that.
The Government will never gain the support of the teaching profession if they tell head teachers that one of their jobs is to promote good discipline. It used to be regarded as par for the course. Quite honestly, the Government are trying to combine stick and carrot and it will not work. They must decide where they stand. On the one hand they say they are giving 100 per cent. responsibility to the schools; on the other hand they believe that they must put on the face of the Bill every prescription that they can as regards the appointment of staff and so much else. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 181B and 181C not moved.]
Baroness David Baroness David moved Amendment No. 182:
Page 47, line 23, after ("principles") insert (", taking account of children who may have special educational needs,").
The noble Baroness said: At last we come to exclusions. In moving this amendment, I shall speak also to Amendment No. 189. In these two amendments I have the support, at any rate in name and spirit, of the noble Baroness, Lady Darcy de Knayth, and the noble Lords, Lord Swinfen and Lord Northbourne, although they are not actually in the Chamber in the flesh. The purpose of Amendment No. 182 is to build into the behaviour and discipline policy the recognition of the need to respond to children's special educational needs. The purpose of Amendment No. 189 is to ensure that the governing body of a school considers whether a child has special educational needs when it is informed of an exclusion.
One of the difficulties that schools have is in identifying and addressing learning difficulties among those pupils who are demonstrating behavioural difficulties. This is not a new phenomenon. David Galloway's work in Sheffield in the early 1980s showed that teachers significantly overestimated the IQ of pupils excluded from school for behaviour difficulties. They construed them as being brighter pupils who were misbehaving rather than children who were having difficulties engaging with the curriculum and for whom learning difficulties might be a factor contributing to their behaviour difficulties.
Those findings were echoed more recently in the 1996 Ofsted report, Exclusions from secondary schools, 1995–1996, which identified significant levels of unrecognised and unmet learning difficulties among those pupils who were excluded. Carol Hayden reports

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similar findings in respect of primary school children and it is here that there has been a significant increase in the number of children excluded—indeed, very young children—which is really very upsetting.
Carol Hayden was the principal researcher on a national research project focusing on exclusions from primary schools. She argues that,
"the evidence about children excluded from primary schools illustrates that they should be viewed primarily as children with special educational needs and/or children 'in need' and therefore entitled to the support and protection from the legislation which recognises these needs, rather than viewed as a discipline problem which requires appropriate sanctions, one of which is exclusion from school… The public debate about exclusion tends to focus upon `naughty', 'bad' and 'ill-disciplined' behaviour and thus views the problem in terms of the need for stronger discipline in schools and more punitive action against those who break the rules. If, on the other hand, we look carefully at the mounting evidence about the circumstances of individuals who are excluded from school, we may decide to try to understand the factors at work in order to provide a considered and, we hope, more effective response".
It is precisely this considered response that may be missing in some schools. One of the difficulties is that children with behaviour difficulties who are seen as naughty, bad and ill-disciplined, may be dealt with through the pastoral side of the school rather than through the SEN side of the school. Where the two sides of the school's operation are not well dovetailed with one another, this may mean that pupils' behaviour and learning difficulties are not given the considered and staged response set out in the code of practice.
Evidence in the Ofsted report, The Implementation of the Code of Practice Two Years On, supports that view. The report showed that a significant number of schools do not put pupils with behaviour difficulties on their SEN register. The consequence of this is that neither their behaviour nor their learning difficulties, where these accompany the behaviour difficulties, are then addressed through the staged response of the code of practice.
These are two important amendments. I look forward to hearing what my noble friend the Minister has to say about them. I hope that he will be able to accept them. I beg to move.
Lord Addington: This amendment addresses the chicken and egg situation which often occurs with behavioural problems resulting from children finding it difficult to cope within schools. Thus it is something which really ought to be on the face of the Bill. In the field that I know most about—namely, dyslexia—it is known that dyslexics have two standard ways of dealing with failure in the classroom. One is to disappear into the middle of the class: "Don't make too much noise; don't attract any attention and let everything go past you". The other one is to sit at the back and disrupt the classroom. We discussed this type of behaviour when dealing with an earlier amendment.
The pupil who follows the more common pattern—that is the second of those two options—will often be treated as having first and foremost a behavioural problem. However, one has to take account of what else may be happening. It could be said that virtually all pupils who have behavioural problems will have some
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form of special educational need. It is vitally important to give such pupils support when possible. Ultimately this will require better training for classroom teachers to enable them to recognise these factors. Disabilities such as autism are being recognised. The behaviour of children suffering from a condition such as autism may be misinterpreted as a behavioural problem. As the noble Baroness said, such problems are surrounded by myth. I have been told that all dyslexics are incredibly bright and I am a dyslexic—
10.45 p.m.
Lord Tope: It is true!
Lord Addington: The noble Lord is very kind. Bright children suffering from dyslexia are easy to spot. Once their condition has been recognised they are easy to help. I do not suggest that that is the case with all such conditions. People like to confine these conditions in a "box", but most of them cannot be confined in such a way. Teachers may well not recognise the real reason for a child's bad behaviour; namely, that he or she may have special needs.
Lord Archer of Sandwell: I support my noble friend's amendment. My noble friend the Minister may be aware of the research carried out by Professor Neville Harris of John Moore University. I believe that research was carried out some two years ago. He carried out research into special educational needs and into related appeals. He has just concluded research into exclusion appeals. He concluded that there is a high correlation between the two matters, and that if they are dealt with separately that can give rise to difficulties on appeals. Certainly, difficulties can arise on exclusion appeals if account is not taken of special educational needs.
Baroness Blatch: I have sympathy for the teachers and the children in the classroom. Whatever the reasons for it, disruptive behaviour in the classroom inhibits the effectiveness of a teacher and inhibits the learning processes of children in the classroom, particularly those children who have not exhibited the disruptive behaviour. The speeches of the noble Lord, Lord Addington, and of the noble and learned Lord, Lord Archer of Sandwell, only strengthen my belief that the disruptive element should be removed from the classroom—whatever the reasons for that behaviour—to enable the problem to be analysed.
My local authority had a primary and secondary support unit. The modern term is a pupil referral unit. Can the Minister say how many pupil referral units exist? I understand that some have recently been closed. How many are planned to support the Government's new policy? I believe there are two keys to solving this problem. One, of course, is early intervention. When I was a Home Office Minister I met young and not so young people who were on probation or in prison. Often those people had not learnt to read and write at an early stage of their education. Often they were bright people who simply had not mastered that skill early enough and had become rather clever criminals. That was unfortunate. There seemed to be a road from disruptive

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behaviour and disaffection to truancy, street corner and prison cell. That process was set out very well by John Patten in his White Paper and has continued to be accepted by the present Government. So early intervention is certainly one key.
The other relates to the points made by the noble Lord, Lord Addington. It is especially important that problems such as dyslexia are properly analysed. It cannot be analysed in a disruptive and chaotic classroom. I strongly support the concerns of the National Association of Schoolmasters/Union of Women Teachers. Its members feel very threatened by the measures that the Government are taking. Setting aside those young people who need special educational measures—in other words, medical, psychiatric or psychological help, or some other form of specialist help—there are young people in our schools who are simply disruptive. They are naughty and badly behaved, and they need managing. The teachers have almost nothing left now by way of sanctions. Even minor forms of corporal punishment have gone. Keeping children in after school is no longer an option because of the difficulties they might have in missing school buses and possibly travelling home in the dark. It is increasingly difficult for teachers to cope.
I am also very concerned about the whole notion of targets. Yes, everybody believes it right to reduce the number of exclusions. But if there is a case for exclusion, there is a case for it—targets or no targets. Either schools are to be made to keep those kinds of cases within the school and manage them, or they must be able to exclude them. The element of second guessing does nothing but undermine the governors and the staff, particularly the teacher who is trying to manage in a classroom. That is very disturbing. When a disruptive pupil is returned to a school where, so far as the school and the governors are concerned, there has been a case for exclusion, the effectiveness of the authority of staff and governors is greatly affected.
I believe that the Government have not found the right remedies. Merely lowering the case for exclusions is wrong. We need to have a care for the orderly running of the schools, for teachers who work very hard to maintain discipline in the classroom.
There was an effective schools unit in the DfEE. I believe it is now called the standards unit. The unit was examining those schools where there was a very low incidence of disruptive behaviour and exclusions to see why that was, and comparing them with other schools which had a high incidence. Very often, it depended upon the regime of the school: how it was run; how it was led; the consistency of approach by staff to the children; the consistency of rules applied; and often the involvement of the children themselves in establishing the rules of behaviour in the school. Some interesting experiments were carried out. That is one area for examination, There is an issue here. It is
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important to speak up for the school that is doing a good job and is now hard pressed by rather rigid and sometimes counter-productive measures.
Lord Whitty: I recognise and sympathise with the situations described by my noble friend Lady David and the noble Lord, Lord Addington, on the one hand, where exclusion is based on behaviour which stems from unmet special needs; and the other side of the coin, as described by the noble Baroness, where failure to deal with behavioural problems affects a whole class. It is therefore important that some degree of balance is maintained.
Turning to the amendments proposed by my noble friend Lady David, the first relates to the drawing up of the general principles of a school. It is important that the requirements of children with special needs are not overlooked when those principles are drawn up. However, the governing body should take account of all the differing needs of all the pupils in a school, including, for example, the differing ethnic and cultural backgrounds of children. I believe it would be wrong to single out one particular group and place a specific requirement on the face of the Bill. However, the situation as described on both sides of the picture makes this matter more appropriate for detailed guidance. I assure my noble friend that we shall ensure that this point is adequately covered in the revised guidance we shall need to issue following the enactment of this Bill.
As for Amendment No. 189, we recognise that there is scope for many exclusions to be prevented through earlier intervention by schools and by other agencies. A strong focus on earlier intervention, co-operation between the SEN side and the pastoral side of the school and a multi-agency approach are important. We are very concerned that exclusion may on occasion—probably quite frequently—be used to punish poor behaviour that arises from unrecognised or unmet special needs. The department will be issuing new guidance emphasising the importance of identifying such cases early and providing the necessary support to avoid exclusion at a later date.
Special needs, such as emotional and behavioural difficulties, are not in themselves adequate grounds for exclusion unless the child is likely to cause injury or severe disruption to other pupils or staff. Our guidance will make that very clear. The whole emphasis of our policy is to try to promote the helping of children by schools and to deal with the position in the school, even if that requires taking the child out of the classroom.
As regards referral units, which apply at a more serious stage of the process, the noble Baroness asked how many such units were now operating. I am advised that it is 330. Whether that has gone up dramatically or down slightly, I am not clear. I may be able to provide the noble Baroness with more information on that matter.
Unidentified special needs may be just one factor that should be considered before taking a decision to use the punitive sanction of exclusion, but it is a very important

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factor. That will be covered in our guidance, along with all the complex issues that have been raised by the noble Baroness, Lady Blatch, and other contributors to the debate. A bald statement on the face of the Bill is not sufficient. We consider that the matter should be covered in guidance. In the light of what I have said, I ask my noble friend to consider withdrawing her amendment.
Lord Addington: Before the noble Baroness decides what to do about the amendment, I should like to make clear that, although I stated that behavioural problems may well be caused as a result of undiagnosed special needs, I agree with the noble Baroness, Lady Blatch, that the other pupils in the class also have rights. School exclusion is something I would be worried about, whereas removal from the classroom is often appropriate. As an example, putting a dyslexic into a conventional English class without proper assistance is the equivalent of putting someone in a wheelchair on a cross-country course. They will not benefit from it. Often a unit within a school is a very practical way forward. I hope that that puts some of my comments in context.
Lord Archer of Sandwell: Perhaps I may echo what the noble Lord said. The whole point of directing the criteria of special educational needs to a particular pupil may be precisely that they are removed from the ordinary classroom situation.
Baroness David: I thank the noble Lord, Lord Addington, and my noble and learned friend Lord Archer for their sympathetic support. I am glad that my noble and learned friend mentioned the research of Professor Neville Harris, of which I had heard, which is very helpful with regard to what I have been saying. Of course, I understand what the noble Baroness, Lady Blatch says. It is very difficult indeed for teachers with disruptive pupils. But my amendments try to get at the cause of the behaviour and to deal with it early on. I thank my noble friend the Minister for his sympathetic response. I shall be happy to withdraw my amendment if I can be reassured, as I think he did reassure me, that both the points I made will be covered in the guidance. That is quite satisfactory and, in the light of that, I shall be pleased to withdraw my amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David had given notice of her intention to move Amendment No. 183:
Page 47, line 37, at end insert—
("(c) registered pupils at the school, and
(d) teaching and non-teaching staff at the school.").
The noble Baroness said: I understood that we were going to stop at 11 o'clock tonight. Amendment No. 183 is the first of a long series of amendments, most of which are mine. I hope that the Deputy Chief Whip will say that this is the moment when the House might resume.
Lord McIntosh of Haringey: I think my noble friend would prefer to move her amendment very rapidly, succinctly and cogently, and then other Members of the Committee can speak even more rapidly and cogently and we can try and get a little bit more business done.
Lord Tope: That is quite wrong. This group of amendments relates to extremely important subjects. It is something on which a number of us want to speak. I am sure we shall all speak cogently: we always do in this Chamber. But to have to rush it through, last thing at night on a Thursday evening, simply to suit the convenience of the Government, is unfair to the Committee; particularly unfair to the mover of these amendments, who I know has a long drive tonight; and, above all, it is unfair to the people who are affected by the amendments. It is now just after 11 o'clock at night.
Lord Archer of Sandwell: My noble friend knows that I do not make difficulties for the Government if that can be helped. But the theme which draws together the amendments in this grouping does not become obvious when one looks at it. I have two amendments which are quite different from the amendments about to be moved by my noble friend. How we can be succinct and rapid when we are dealing with a whole group of different subjects escapes me. My noble friend may want to think again.
Lord McIntosh of Haringey: I yield to the succinct and cogent arguments of noble Lords who have spoken. I beg to move that the House do now resume.
On Question, Motion agreed to.
House resumed.
House adjourned at two minutes past eleven o'clock.