Education Bill [H.L.]

HL Deb 24 January 2005 vol 668 cc1004-78

3.3 p.m.

The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin)

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.—(Lord Filkin.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEESin the Chair.]

Clause 91 [Duty to provide information]:

[Amendment No. 139H not moved.]

Clause 91 agreed to.

Clause 92 [Power of maintained schools to provide training for the school workforce]:

[Amendment No. 139J not moved.]

Baroness Walmsley moved Amendment No. 139K: Page 50, line 15, leave out "maintained" and insert "relevant

The noble Baroness said: The intention of the amendment is to probe the provision of initial staff training and professional development in academies. It seeks to test the Government's intentions regarding the role of academies and city technology colleges as training providers. Maintained schools may well be best placed to provide training for the school workforce. In fact, there was a piece in last week's Times Educational Supplemen which reported that Eton was sending teachers to be trained in state schools. That was a matter of some surprise to some people.

Given that the Bill limits the definition of "relevant" to Clause 112 only, I am aware that the amendment may be technically flawed. However, we are using it as an opportunity to debate the matter, because we feel that it is important and merits further clarification and debate. If such an amendment were adopted, albeit in a redrafted form, we would be concerned to ensure that academies and city technology colleges could provide courses only if they were subject to the same quality assurance procedures as independent schools.

The TTA currently has a statutory function to accredit and fund providers of initial teacher training to those who can demonstrate that they will satisfy the criteria laid down by the Secretary of State. It is assumed that that will still be the case—but will that include academies as well?

In addition, city academies are eligible for employment-based routes into teaching. Will they continue to be eligible as providers of those routes? Quite correctly, independent schools are not eligible for salary or training grants, but are still able to apply for the employment-based routes. The cost of the qualified teacher's status assessment is normally covered by the teacher training agency. So will the academies benefit from public funds as training providers also?

Currently, if an integrated early-years centre includes a maintained nursery school, a nursery-qualified teacher can complete the induction period in that school. If an early-years centre does not include a nursery school, it cannot offer that induction period. Will the Minister clarify the position of children's centres in that respect?

Having said all that, I make it clear that the amendment is a probing one. Will the Minister clarify the situation in the respects that I have highlighted? I beg to move.

Baroness Morris of Bolton

I shall speak to Amendments Nos. 139L and 139M. I apologise for not being here to move Amendment No. 139J; I was taken aback by the speed with which the fourth Starred Question was dealt with.

Amendments Nos. 139L and 139M would allow a teacher or other member of the support staff to receive courses in education as part of his or her training provision. That is a sensible and welcome measure; however, we believe that it may be necessary to test the semantics used in the clause.

As it stands, a teacher or a member of the support staff can be provided with a course in training by his relevant school. We feel that that implies that the training will be limited in its nature and possibly restricted to one area of the individual's daily work— for example, sending the school secretary on an IT-based course to improve skills in administration and administering the school's database. However, we are keen to test what the clause actually means by that wording.

Our amendment would incorporate the idea that a course in higher or, indeed, any nature of education could be included as part of the training. Therefore, with our amendment, it would be perfectly possible for classroom assistants to receive class-based tuition, and possibly even courses towards achieving a certificate in education, rather than merely gaining on-the-job training for one particular aspect of their present job. Our amendments would expand the definition and meaning of training provision to incorporate a far wider understanding and interpretation of the word.

I have some other questions for the Minister. How many individuals does she believe will receive some form of training under this clause each year? How will the training differ between teachers and non-teachers? Is it her understanding that the cost of such training will be met out of existing school budgets, or will schools receive additional funding to cover this welcome part of the Bill?

Baroness Andrews

I am grateful to the noble Baronesses for explaining the purpose of their amendments. It is very difficult to disagree with the intention behind any of the amendments. Although we have not discussed Amendment No. 139J, we would want to insist that any decision on training is taken by the full senior management team and that the head teacher and governors are at one on the need for training and the importance of its quality. I just wanted to put that on the record.

Amendment No. 139K would change Clause 92 to confer power to provide workforce training not on maintained schools but instead on relevant schools. The noble Baroness specifically asked whether that would cover academies. Clause 97(1) defines a maintained school as, a community, foundation or voluntary school … a community or foundation special school, or … a maintained nursery school". The amendment would widen that definition to give a power to provide training to independent schools. However, as academies are indeed independent schools, the power would be unnecessary.

The clause applies only to maintained schools because they are the only ones that need power in law to provide training. I remind the Committee that whereas Section 12 of the 1994 Act applies only to maintained schools, that fact has not prevented independent schools participating in TDA-funded activities and in employment-based training programmes. The Government would certainly expect academies to continue to do that, and indeed we want it to continue. The wording of Clause 92 in no way prevents that being achieved.

As for whether academies can offer employment-based training, I assure the noble Baroness that they can. She asked some slightly technical questions that are not covered in my brief. I should prefer to write to her so that we can ensure that the answers are correct.

There was a question about "education" and "training". As I understand it, the one subsumes the other. Technically and historically, there has always been a distinction in vocational emphasis between education and training. However, the two terms are interchangeable. The noble Baroness asked many other rather technical questions on the nature of what can be offered, how many people will receive teacher training, under what conditions and according to what definitions, and how the training will differ. I would prefer to write to her on those points also, if I may.

With those assurances, and with further and better information forthcoming, I hope that the noble Baronesses will not press their amendments.

Baroness Morris of Bolton

I thank the Minister and look forward to receiving her letter. I thank her also for making reference to Amendment No. 139J. After all, it is the head who will have daily contact with the staff, and one may well ask how such a scheme could operate without the head's input. I am pleased with the Minister's answer. Training to improve and open new possibilities is important for all staff and for schools to grow their own talent.

Baroness Walmsley

I thank the Minister for her reply and look forward to hearing from her on the issue of children's centres and whether they will be able to provide training to the nursery-qualified teacher and whether the academies will benefit from public funds for training. I notice that she referred to academies as independent schools even though they are built with 92 per cent government money. The Minister knows that I have concerns about that. However, I look forward to her letter and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 139L and 139M not moved.]

3.15 p.m.

Baroness Morris of Bolton moved Amendment No. 139N: Page 50, line 19, leave out from "providers" to end of line 21.

The noble Baroness said: Clause 92 would allow the governing bodies of maintained schools to provide training for members of the school workforce in addition to the power that they already have to provide training for teachers, and schools will be allowed to provide such training either on their own or in partnership with other schools or training providers.

Amendment No. 139N is designed to probe how the measure would actually work in practice. We would be particularly grateful for any explanation that could be provided on how such schools would come to work together and work in partnership with others and other training providers. Paragraph (c) would allow governing bodies of maintained schools to create a new body to provide courses for training for teachers and/or other members of the school workforce. With the Committee's permission, I should like to ask a number of questions on this specific aspect of the clause.

How would such a body operate in practice? How many schools could apply to join such a body, and how? What powers and responsibility would it possess? How would it commission and pay for such training provision? Would it be free to put out tenders on a commercial basis? How would membership of the body be constituted and who would decide that? Would it, for example, include the headmaster of the relevant school? Would it be legally responsible for the quality of training? Would it be personally liable were something to go wrong? What expenses would there be, and what would be the likely cost of setting up and running such bodies on an annual basis? How would the body ensure that the quality of training was to a suitable standard and met the requirements of a particular school that may well differ from another school within the same grouping?

I have asked a number of fairly technical questions. However, I have tried to highlight just some of our unanswered queries on the clause. I beg to move.

Baroness Andrews

As the noble Baroness said, Amendment No. 139N would delete the latter part of paragraph (c) of subsection (1), which is in the same form as an exiting provision of the 1994 Act. I remind the noble Baroness that that was Conservative policy at the time. However, we are content that it should go forward.

As the Committee will be aware, schools currently may work in association with each other in a variety of formal and less formal ways for the purposes of providing teacher training. This part of Clause 92 gives them the ability to do that by forming a body with its own legal personality. For the sake of convenience, I shall refer to that body as a company. We are, however, hardly talking about ICI. These are terribly small and specific organisations designed for a specific purpose.

The main reason why schools and others might wish to act in this way might include, for example, the ability to handle grants from the TTA in situations where a consortium or company is a better arrangement, especially when none of them wants to act as the banker for the others. The effect of the amendment would be to prevent that happening. This is, however, a probing amendment and I am happy to try to answer the noble Baroness's questions.

As I said, the provision was created in 1994 to allow companies to be formed by schools working together for teacher training. We propose to extend that to training for the wider school workforce. I think that the noble Baroness's first question was how many schools are involved. I do not have the answer, but we suspect that very few schools are involved. The power is nevertheless important as that flexibility and the make-up of a consortium that provides school-centred initial teacher training is one of its great advantages. It is very useful for schools to retain that flexibility according to what the training providers involved decide is the most convenient arrangement for their specific circumstances.

Perhaps I may work through the questions that have been asked. I shall cite for illustrative purposes the example of a school-centred initial teacher-training consortium. When we discussed Clause 72 last Tuesday, noble Lords highlighted, among other things, how important it is that schools should be closely involved in the training of the school workforce. Indeed, as it has evolved, the school-centred approach is halfway between a conventional PGCE course—where training is based partly in higher education and partly in the classroom—and an employment-based training course, where trainees are employed as teachers in schools. There are currently about 60 SCITTs—if I may use the term—in operation although they cater for only about 10 per cent of trainees. School-centred trainees are legally students rather than teachers but spend a large majority of their training gaining practical experience in schools.

School-centred training usually involves a number of schools forming a consortium with a higher education institution to offer a predominantly classroom-based form of training. It is a recent development and was introduced to counter the belief that our teacher training may have been too academically based at one point and that there needed to be more classroom-centred training. It has been very useful. Unfortunately, the Bishops' Benches are empty, but I know that they would agree that it has been very useful in denominational schools as well. The TTA encourages SCITT provision by providing start-up grants of about £15,000. That is considered to be an adequate contribution towards costs. Once a SCITT is established, it is funded through grants like any other training provider.

The key fact to remember is that in most respects a SCITT constituted as a company with separate legal status would operate in exactly the same way as one constituted as a partnership. It would be bound by the terms and conditions attached under Clause 76 to grants received from the TDA and would have the same responsibilities in respect of the content and quality of the training it provided. That is extremely important. Quality of provision and the presence of robust quality assurance procedures are two of the main factors that the TTA considers before awarding grants, and which it takes into account in deciding whether to continue funding. The noble Baroness also asked whether a company of this sort would be liable if a person's training went wrong. Yes, it would. However, the same sort of contractual obligations and liabilities would link any sort of trainee and training provider.

The noble Baroness asked about the number of partners. There is no minimum or maximum number of partners for a SCITT, but capacity to do the job and critical mass involved in making a success of it are factors that would be taken into account by the TDA in deciding whether to award grants. Most SCITTs involve groups of schools in the same area and between which there are already good contacts. As with any other company, a SCITT provider formed as a company would conduct its business in accordance with its articles and memorandum of association. In terms of its practical dealings with the outside world, the way in which it conducts its business would, however, probably differ very little from that of one formed as a partnership. In both cases there would clearly be matters such as its initial establishment that required the consent of the governing bodies of the schools concerned.

Finally, the noble Baroness asked whether a consortium formed as a company could contract out provision. That would depend on the terms of its constitution as with any other type of training provider. I expect that many probably could although I find it hard to imagine circumstances in which a consortium whose sole purpose was to provide training would want to do that.

I believe that I have addressed most of the specific questions of which the noble Baroness was courteous enough to give us advance warning. However, I shall read her comments carefully and if I have not addressed all the questions that she asked, I shall write to her to fill in any gaps.

Baroness Morris of Bolton

I thank the Minister for her detailed reply and look forward to receiving further information if she considers that her response contains gaps. It is a probing amendment. We welcome partnership, flexibility and the practical experience gained through school-centred training. The measure builds on previous good Conservative legislation. However, it never does anyone any harm to go back, have another look and ask a few questions. I thank the noble Baroness for her reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 92 agreed to.

Baroness Walmsley moved Amendment No. 140:

After Clause 92, insert the following new clause—

"OFFENCE FOR AN UNQUALIFIED PERSON TO ACT AS A TEACHER

1. (1) The Education Act 2002 (c. 32) is amended as follows.
2. (2) After section 135 insert—

"135A OFFENCES

1. (1) Any person who contravenes the provisions of regulations made under sections 132–135 by carrying out work specified under such regulations or by serving as a head teacher in contravention 1011 of regulations made under section 135 shall be guilty of an offence and liable on conviction on indictment to imprisonment for not more than two years or to a fine or to both.
2. (2) Any unqualified person who wilfully pretends to be, or takes or uses any name, title, addition or description implying that he is, qualified or recognised by law as qualified as a teacher shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fourth level on the standard scale.""

The noble Baroness said: The purpose of this amendment is to ensure that it is against the law for a person to masquerade as a qualified teacher. The amendment seeks to provide teachers with the equivalent legal protection to their status already afforded to solicitors and other professionals. For example, noble Lords may know that it is illegal for an unqualified person to pose as a lawyer under the Solicitors Act 1974.

More importantly, the amendment will help ensure that no one will be able fraudulently to work in the name of a teacher already on the General Teaching Council register. It would also in effect ensure that any teacher who had been removed from the register for any reason could not work as a teacher under an assumed name.

Members of the Committee may not think that there is a problem in relation to this. We are more often told about fraudulent doctors than teachers. There must be something rather glamorous about the medical profession that attracts unqualified people to masquerade in a white coat with a stethoscope around their neck. Doctors have their patients' lives in their hands. Teachers also have children's lives in their hands. It is very important that only people who have achieved the appropriate standard of understanding of child psychology and development, their subject matter, how to protect children and the health and safety of those children and so on, can teach.

There have been various cases of "fake" teachers in the United States. In 2002, three teachers in Oregon had their credentials revoked after claiming to hold degrees from a now defunct diploma mill in Louisiana. In 2003 in the state of Georgia, an audit was carried out of its 130,000 teachers and 11 were found to have received salary increases based on so-called "degrees" from Saint Regis University, a diploma mill in Liberia, Africa. It is understood that Alan Merrick, the registrar of the General Teaching Council, would also be in favour of the provision that we are proposing today, which has come to us from the NUT. I would be most interested to hear whether there are any good reasons why, for the sake of the children, teachers should not be protected in the same way as other professionals. I beg to move.

Baroness Andrews

The noble Baroness's amendment would do two things. Although she focused on the second part, I shall also address the first part as it raises some interesting issues. The first part of the noble Baroness's amendment seeks to introduce new criminal offences punishable by fines or imprisonment, or both, for people who breach the limitations set under the Education Act 2002 on the types of work in schools that may be carried out by different types of staff. The second part—to which the noble Baroness particularly addressed her remarks— would extend to those claiming falsely to hold qualified teacher status criminal sanctions mirroring those which already apply to persons pretending to be qualified doctors or solicitors.

Let me begin by addressing the first part of the amendment. We are pleased that the evidence which we have shows that the school workforce reforms are timely and welcome. As the noble Baroness will know, one of the things that we wanted to address on the basis of research evidence and what teachers were telling us was excessive workload. We believe that the future lies in the development of a more varied and specialised school team. Within that team, teachers will remain a distinctive group with a unique and protected role as the people responsible for steering the education that children receive. However, they will have access to support in the classroom and outside from a variety of other specialists, including trained and certificated higher level teaching assistants. That will help to reduce teachers' workload and help them to focus their own work.

None of this means that we will let just anyone walk into a classroom and teach children. Regulations made in England and Wales under Sections 133 and 134 of the Education Act 2002 guarantee that certain types of work shall be the preserve of teachers who have QTS and who hold full registration with the General Teaching Councils for England or for Wales, together with some other specified types of teachers. These include overseas trained teachers and so on. Other types of staff, such as teaching assistants, may carry out these specified tasks only if they are acting under the direction and supervision of a qualified or nominated teacher in accordance with arrangements made by the head teacher of the school in question. We believe that we have guarantees and boundaries which ensure that those provisions can be enforced.

Section 496 of the Education Act 1996 provides that my right honourable friend the Secretary of State can direct LEAs and school governing bodies about the exercise of their powers if she is satisfied that they have acted, or are proposing to act, unreasonably. That might include knowingly employing or deploying someone to perform tasks in contravention of regulations. Alternatively, it would be open to a parent or teacher to seek judicial review of the lawfulness of the employment or deployment of someone in contravention of the regulations. A head teacher would also be open to disciplinary action if they failed to put proper arrangements in place for carrying out specified work, and that is also covered by the school teachers' pay and conditions document.

3.30 p.m.

We have a robust series of safeguards that address the question of the distribution of work in the classroom. We would certainly not want to invoke the criminal law in those situations, which is what that part of the amendment would do.

On the second part of the amendment, we are not in favour of criminalising situations such as this. We have robust provision in place. The second part of the amendment addresses a different matter; people who obtain employment as qualified teachers by deception. Teaching is unlike other professions, such as law and medicine—this is certainly not pejorative—where many practitioners are self-employed. Teachers cannot just set themselves up as such. They must apply for a post, which means having references taken up and checked. The General Teaching Council for England must be approached to verify that the teacher in question is qualified, holds full registration, has not been barred from teaching by the Secretary of State and is not on List 99. A teacher's employment is also subject to clearance from the Criminal Records Bureau. If someone managed to evade all those safeguards and obtained a post for financial gain by masquerading as a qualified teacher, they could potentially face up to five years' imprisonment under the Theft Act. That combination of safeguards is a better way to regulate the profession.

The noble Baroness addressed the question of fake degrees and diploma mills, which should be controllable in the first instance by the General Teaching Council for England and the equivalent body in Wales, which act as gatekeepers for the award of qualified teacher status. Registration is mandatory for all qualified teachers carrying out specified work in schools. I hope that the scrupulous application of those requirements would mean that we will not see this in the future. On those grounds, I hope that the noble Baroness will withdraw her amendment.

Baroness Walmsley

Will the Minister clarify something for me? Am I right to understand that she is rejecting the first part of my amendment so that the Government can continue to allow people to teach subjects for which they are not qualified?

Baroness Andrews

Absolutely not. I am saying that as we have worked through the provisions for workforce reform, putting the higher teaching assistants in place, and so on, that has been accompanied by sets of regulations. I am sure that the noble Baroness will remember the debate that we had in 2002 on those regulations, which make it clear what tasks are permissible for people supporting teachers in the classroom. If, for any reason, mistakes are made and people are deployed in an inappropriate manner, a whole range of things can be done that do not involve criminalising the teacher or person involved.

Baroness Walmsley

I thank the Minister for that qualification. Certainly, on the second part of my amendment, I am aware of the robust system that is in place to ensure that unqualified people do not masquerade as teachers. It was helpful to have that on the record. I hope that other teachers, certainly the head teacher, would notice if someone who was unqualified was in charge of children. I thank the Minister for her reply, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 93 to 95 agreed to.

Schedule 14 [Amendments relating to the training of the school workforce]:

[Amendment No. 140A not moved.]

Schedule 14 agreed to.

Clause 96 agreed to.

Schedule 15 agreed to.

Clause 97 agreed to.

On Question, Whether Clause 98 shall stand part of the Bill?

Lord Hanningfield

Clause 98 introduces a sizable and significant change to the mechanism for the funding of schools in England. The background to this provision is the schools funding crisis of two years ago. Due to the mismanagement in Whitehall of the changes to the then formula, we were left with the undignified sight of schools without budgets and even teachers and support staff being laid off. This eventually led to the then Secretary of State apologising for the fiasco. I do not intend to go over old ground, but I stress once more, as I did at Second Reading, that we simply cannot afford a repeat of those circumstances as we embark once again on changes to the funding system.

Yet, we are here today to give the green light to those proposals with scant knowledge of their details or of how they will operate in practice. Much of the provisions in the Bill will be implemented at a later date through regulations and guidance issued by the Secretary of State. That, for any major legislation, is a constant concern. However, for something that will have a direct impact on the country's education system, it is even more of a worry.

I thank the Minister for sending me his department's policy paper in advance. However, I am afraid that the information in that document was restricted in the extent of detail provided. I cannot help but think that we are putting the cart before the horse with this section of the legislation, which is highly complex, and experts in the field are still grappling with its implications. It is being published at a time when a number of consultations, which have potential impact in areas covered by the Bill and for local government, are ongoing and have not yet reached conclusions. Ofsted currently has a consultation in train on the framework for inspection of schools, and is leading a 10-inspectorate-wide consultation on the framework for inspection of children's services, encompassing joint area reviews and annual performance targets. These are all results of the recent Children Act. Meanwhile, the Audit Commission is consulting on how a comprehensive performance assessment, which includes education, will work from 2005 for all local authorities. We now learn that consultation on this section of the Bill will not be launched until some time next month. Is the Minister satisfied that this part of the Bill has been handled in the best possible way?

In relation to the proposed funding changes, the House of Commons Education Select Committee report makes the point: For a Department that believes in evidence-based policy the DfES has remarkably little evidence to support the changes it is making". Equally, given the complexity of this section, and the Government's stated aim that they wish all legislation to receive parliamentary scrutiny, it is disappointing that this Bill was not debated in Parliament before being introduced. It is therefore imperative that it receives proper parliamentary scrutiny and is not rushed through the process here.

That said, the main issues that cause concern are, first, three-year budgets for schools; I know that there is a lot of support for this, and it is probably the best way to give schools some security in the financial provision that they are going to make, but I will go on to talk about the problems associated with it. Secondly, there will be a new ring-fenced specific government grant for the schools budget; obviously there is a move away from funding based on the financial year. Thirdly, new powers will be given to the schools forums.

I have a number of specific questions to ask the Minister on the first of these areas, the three-year funding. How will the level of three-year budgets for individual schools be determined, when the main driver for funding purposes is pupil numbers? What forecasting methodology is proposed? At what level will the new ring-fenced grant be set—current spending or schools' FSS? What impact will that have, if any, on the level of funding available for other local authority services? Can the Government give a firm assurance that no authority would lose grant due to spending differences with schools' FSS, with possible knock-on effects on other services or the authority's council tax?

The formula for the new dedicated schools grant is likely to start from the schools' formula spending share—that is, the FSS. That will be constrained by both a floor and a ceiling for increases to take account of the fact that some authorities are spending over and some spending under the schools' FSS and the fact that distribution still does not reflect the 2003–04 formula changes. My own authority—Essex—of which I am leader, still benefits considerably from the floor and ceiling in the mechanism, and we have not fully lost the grant that we shall eventually lose.

Can the Minister also comment on the impact that the measure will have on the flexibility of local authorities to move money between central services and social services and schools and shape services locally? Can he also confirm that schools' funding will no longer be paid for partly by the council tax, and will he comment on where the additional resources channelled through council tax into schools on an annual basis will now come from? I believe that, in the past year alone, the figure was in the region of £331 million. Will a school's funding and expenditure remain part of the local authority accounts?

There are important transitional issues owing to the fact that authorities do not spend at their schools' FSS levels. That is likely to be dealt with in the ODPM's floor and ceiling mechanism, which I have just mentioned, to limit grant changes to authorities. I should be grateful if the Minister could give us any further information that he may have on this subject.

At what date in the year will budget shares be issued to schools? August could be problematic if budget shares are for the year commencing 1 September. Given the proposed new powers for the schools forum, is there any intention to extend these powers in future years to the potential detriment of the ability of local authorities to influence allocation methodologies related to school funding?

How will overspending and underspending of the new ring-fenced grant in budgets be retained centrally to manage LEA activities—for example, in relation to special schools? Under the proposed new arrangements, what are the funding implications for schools in deficit? Many schools are in deficit and at present the Government provide a special fund to help them in the early years with a change of grant. Those schools are benefiting from the fund this year and they will benefit from it for another year.

I also want to ask the Minister whether he believes that ring-fencing makes the links between other services for children and schools more difficult. The Children Act 2004, which we all support, places local government as the accountable body for children's services in their locality. But does the Minister agree that the proposed changes in the funding system reduce further the ability of local councils to influence schools and promote their wider role in the children's agenda—for example, becoming extended schools— with the possibility of other children's services, such as social workers and health visitors being located on school sites? Personally, I believe that that is the future of school sites and that they will be developed to benefit the community. But part of the school site will be used with a budget which runs from April to April and the other part will come under a budget running from September to September.

Do the Government envisage that the budget shares for schools will in future be calculated on similar lines to those used by the Learning and Skills Council to fund sixth forms? Frankly, the need to convert academic year funding into financial year funding causes confusion and uncertainty at the individual school level.

Will the statutory S52 budget and outturn statements for schools move to a different accounting period, thereby requiring local education authorities effectively to close their school accounts twice each year? Again, as local authority leader, I am aware of that situation with regard to presenting our annual accounts to the auditors. There are also divergent systems for England and Wales. Perhaps the Minister will comment on whether he sees any particular problems in that respect.

Finally, we are concerned that paragraph 6 of Schedule 16 makes amendments to Section 47 of the School Standards and Framework Act 1998 along the same broad lines as those contained in paragraph 4. These will give the Secretary of State powers to issue regulations which could have a broad-ranging effect. As it stands, Section 47 allows the Secretary of State to make regulations on school budget matters, such as timing, factors and criteria, which should be taken into account. It is contended that these arrangements would give the Secretary of State power to issue regulations specifying limits on particular classes of expenditure without seeking the consent of Parliament. Perhaps the Minister can comment on why this clause is required and in what circumstances it could be used.

In conclusion, Members of the Committee will see that, although we very much support the three-year principle, we have a number of grave concerns not only about the Government's proposals under this clause but about the way in which they have gone about introducing them. Therefore, I look to the Minister today to provide the reassurances that we seek.

3.45 p.m.

Lord Smith of Leigh

I rise to speak to the amendments standing in my name in this group. Before doing so, I declare my interest as leader of a local authority and as being married to someone who has been a teacher for many years.

I apologise to Members of the Committee for not being present at the Second Reading. My excuse is that, under the provisions of the 2002 Act, we had to produce the schools budget by 31 December. I had arranged a meeting on 13 December thinking that the Second Reading would be on the 20th, but the date of the Second Reading was changed and I was unable to be present.

However, I read the debate with interest and found that there was little mention of Schedule 16 or, indeed, of Clause 98. As the noble Lord, Lord Hanningfield, implied, those parts of the Bill move a great deal of responsibility away from local authorities. At present, through local authorities some £24 billion is spent on schools. These provisions would bring about a huge change and they deserve some consideration by this House. Therefore, the purpose of my amendments is simply to retain the status quo.

I shall try to argue in three general areas: first, I shall refer to the strategic role of local authorities; secondly, I shall talk about raising school standards; and, thirdly, I shall echo some of the practical issues raised by the noble Lord, Lord Hanningfield, although I shall try not to repeat too much of what he said.

During the Second Reading debate, my noble friend made great play of the strategic role that local authorities should play in education, and I agree with him. I do not see a contradiction between a strategic role and a funding role. Indeed, in my experience, if you want to have a strategic role, having a little money to play with usually allows greater influence. That is certainly the way in which I tried to proceed in health matters in my own authority because we got greatest reward from the areas where we had funding influence. I can see no requirement in the Bill to make schools participate either in the general children's agenda or in the wider strategic agenda for local authorities. I think that that is a great omission and perhaps I may give an example to illustrate it. If, as the Government wish, a local authority wanted to pursue a public health agenda, raising fitness levels, and it wanted to get schools to co-operate in raising standards of fitness among their pupils and also perhaps in making their facilities available for the wider community, that participation would depend on the views of individual head teachers and governors. I do not think that that is a really strategic way to manage affairs.

I think that everyone in your Lordships' House agrees with the aim of the Bill—to ensure that we raise school standards. Certainly there is evidence that that has happened. Schools have done a great job with the support of government and, if I may say so, with the support of local authorities as well. But there now seems to be an indication that we have reached a plateau: we have raised standards to a certain point but the rate of increase has stopped. That is because we no longer need to pay so much attention to what is going on in schools—it is what is going on outside schools that is important. Again, perhaps I may use two illustrations to show the importance of providing a broader education and the importance of those social issues.

My own authority operates an outdoor pursuit centre in the Lake District. It gives children the opportunity to visit the Lake District which, despite its proximity, many of them would never do of their own volition. It gives those urban children a chance to see a different lifestyle and it gives them practical experience of subjects such as geography. It also helps them to develop social skills among themselves. As it is down to all schools to participate, rather than it being a local authority activity, we believe that under the new funding arrangements, the future of such activities is certainly under a big question mark.

I am concerned that the social side of education is not taken into account. Perhaps I can use an illustration that may be extreme, but it is real. To understand the way in which drugs affect communities, my authority carried out a study of a small housing area. The most shocking case that we came across was of a single mother—a chaotic drug-user—who was injecting drugs. The only person she could trust to inject her with drugs was her 14 year-old son. That young man did not have a perfect attendance at school, not that one would expect him to, and when he attended his mind was probably not always on the subject being taught.

If we are trying to achieve change for such individuals, we cannot leave the matter to schools. Schools will have to work with wider social partners. The recently published statistics, the tables set out by authority and by school, show very convincingly that social factors affect performance. I believe that the Bill is moving in the wrong direction.

On practical matters, I shall try not to repeat what the noble Lord, Lord Hanningfield, said, although I agree with him. Potentially, there is a £400 million problem for the Government: the £300 million odd that the noble Lord mentioned of overspending and the £100 million of underspending that takes place at the moment. Where will that money come from? Can we be assured that it will not come from raising the council tax or, as in my authority, continuing to subsidise schools through the council tax? What about the requirement on schools to operate the principle of best value? There has been great progress in achieving efficiency in local authorities, but where is that requirement on schools?

In conclusion, I shall repeat the questions raised by the noble Lord, Lord Hanningfield. What has changed to require this? Why is it different in England and Wales? Perhaps I may quote from the then Minister of State for School Standards, In introducing this consolidated power"— he was talking about the 2002 Act— to provide Financial assistance there is no intention of moving away from the current situation where the great bulk of support for schools and LEAs—the £22 billion to which he referred—is directed through the local government finance system. That arrangement will remain in place".—[Official Report, Commons Standing Committee G, 18/12/01; cols. 199–201.] It has not remained in place for very long. I believe that local authorities, unlike some advisers to government, are part of the solution for education and not part of the problem. The Government should act only where they have evidence that local authorities are not performing properly and should not break up strong, important relationships between local authorities and schools.

Baroness David

I want to speak in support of my noble friend Lord Smith of Leigh. First, I congratulate the Government on the excellent way in which funding has increased over the past seven years—over 30 per cent in real terms. I am confident that the money is worth investing for our future in that it will provide better education for children.

The increase has been managed by local government and almost without question local government has delivered the additional resources to schools. As I understand it, Amendment No. 141C, moved by my noble friend, would remove the Secretary of State's power to direct finance into schools and enable the money to continue to be routed through the local government finance settlement. I think it was in the late 1950s that the former Ministry of Education stopped funding local authority education services directly and the vote was transferred to local government. The reason, I recall, was that that would give more responsibility to the local authorities which would be able to decide better between the competing demands for local funding than central government could. It would promote joint working and the integration of services.

The Bill appears to unravel nearly 50 years of practice in this area which is a trifle ironic given that in the previous Session of Parliament we passed a Children Act which has, as one of its objectives, support for joint working between education and other local services, as the noble Lord, Lord Hanningfield, said. I understand that one of the Bill's proposals is to provide a three-year budget for schools. Perhaps the Minister could say in his summing up why that could not have been achieved by guaranteeing a three-year budget to local government.

I am sure that the Minister has read the recent report of the House of Commons Education and Skills Select Committee on Public Expenditure on Education and Skills (First Report of Session 2004–05, HC 168). For example, the report concludes in paragraph 25: The DfES reacted to perceptions of crisis rather than an actual widespread funding crisis, and in the solution that it has provided it has changed the nature of the funding allocation, the role of LEAs in education at the local level, and the role of the DfES". In paragraph 34 it states: There is no proper evidential basis for saying that change is merited, and no way of being confident that the changed system will adequately address any problems that exist". That is worrying. The expert Commons committee believes that DfES has brought forward this provision in the Bill, not because of actual problems, but because of perceptions and there is no evidence that the solution which the Bill is proposing will work anyhow.

The committee went on to record, in paragraph 30, that the change will lead to, the loss of LEAs' ability to make any executive decisions about schools' funding in their areas I am concerned about the effect of withdrawing upwards of £20 billion from local government finance and the effect on other local government services. Although the money will be channelled through local authorities, there must be a massive upheaval as local authorities will no longer be able to take an overview of the funding of all local services. What are the implications for other local government services such as transport, housing, planning, social services for the elderly and children?

I hope that the Minister will be able to give answers. I am a great local government sympathiser. Having served in local government in the 1960s and 1970s, I know how good and how helpful local authorities can be. I very much hope that the Minister will have some good answers to those points.

The Lord Bishop of Manchester

I regret that my friend the right reverend Prelate the Bishop of Portsmouth cannot be in his place today. In his absence I would like to add a Church of England perspective to the matter before us in relation to Clause 98. As the noble Lord, Lord Hanningfield, has noted, it is complex, but nevertheless, it goes a long way towards addressing a major problem that we in the Church of England know schools face on budgeting.

The Church of England manages over 4,600 maintained schools in England. Its national and diocesan officers are constantly aware of the difficulties presented to schools by the year-on-year unpredictability of both capital and revenue budget allocations. Much positive work is currently being undertaken between the Church of England Board of Education staff, other voluntary-aided school providers and the department's officials on revised and simplified capital procedures. We are grateful for those conversations.

However, they need to be matched by the provision for three-year indicative revenue budgets which this Bill seeks to put in place. Such a provision is very important to all our schools. It will provide a financial framework within which strategic planning may take place, leading to improvements in both behaviour and achievement for pupils, and creating a more stable environment for school staff.

As has already been indicated in the debate, some schools are facing falling rolls because of a declining local child population. Where housing increases are planned, the number of children of school age thereby generated is much less predictable than was the case only a few years ago. Furthermore, many new behavioural and educational strategies are being promoted in schools as they continue to improve. In all these cases, the consequent planning at the individual school level will be materially enhanced by the provision of sensible budget predictions. Individual schools need the maximum knowledge about and control of their budgets to provide cost-effective, efficient and effective learning.

4 p.m.

Baroness Walmsley

We on these Benches, too, have major concerns about Clause 98 and Schedule 16 in so far as they take away the power of the local authority to do its best for its local schools. We see it as part of the incremental removal of power from local authorities and the further centralisation of power over education in the guise of giving schools more power to spend their own money.

However, there are things in these arrangements of which we approve—the school-year budgeting, the three-year budget and the year-on-year guaranteed increment for pupils. So I do not propose to oppose Clause 99 I just want to record our major concerns about the gradual withdrawal of power from local authorities.

Lord Dearing

In my local church on Sunday the first reading was from Proverbs, which extolled the virtue of wisdom. One of the wisdoms in this House is not to speak on a subject you know little about in the presence of those who are highly expert. I have listened with great respect and some awe to the speeches that have been made.

Reference has been made to the concerns of local authorities. I, too, have seen and thought about the representations by the LGA. Reference has not been made to the representations that I, at least, have received, from the Secondary Heads Association and the NAHT in support of this clause. Its deep concern has been about instability, uncertainty and confusion. It refers to it—I do not know whether it is true—as the annual dispute on who is to blame for the budget situation. Its representatives have written and spoken to me about its support for this greater certainty.

As a former school governor, I like the idea of relating the provision to the school year, and—if it can work—a three-year indicative budget, as the right reverend Prelate said, with arrangements for flexing it in changing circumstances. That is difficult, but the principle is very good.

The ring-fencing is difficult. I very much understand the position of the primary and secondary heads. They want to know where they stand. But I should be concerned if there were not some room for manoeuvre. I can see the nexus between—indeed, in this Bill—the welfare side and the educational side coming together. If this clause stands part, could there be some provision for the Secretary of State to consider an appeal from the LEA that in its particular circumstances there were grounds for shifting some money, in the interests of the pupils in its schools, from such a movement? This is all very complex and needs time for thought. I hope that we shall not be driven to a vote this afternoon.

Lord Hunt of Kings Heath

Like my noble friend Lord Smith, I am interested in the impact that the changes in this Bill will have on the role of local education authorities, although I do not think that I have reached such a pessimistic conclusion as he has. It must be right in the current context of public services to want to give individual schools as much authority as possible. A three-year funding mechanism surely goes hand in hand with giving them more executive responsibility. So I very much support the thrust of this clause and hope that the Committee will also.

My own background, as noble Lords will know, is in the health service. We have seen a similar move in the past few years to try to give people running frontline services as much responsibility and control over their own destiny as possible. That must make sense. It is very important for parents, when they are concerned about a particular school, to be able to meet the people who are responsible for that performance and look them in the face. All too often in the past it has been easy for governors to put the blame on to someone else—either the Government or the LEA—and of course the resources made available by the Government are a very important component.

However, when one wants to point the finger of responsibility at people for the performance of a particular school, it is much better and more straightforward if one can point to the governing body and hold it responsible because it has now been given the tools, the ammunition and the resources responsibly to discharge its job. So I very much welcome the introduction of three-year budgets. It will give much greater flexibility to governing bodies and enable them to plan for the future. I accept that the noble Lord, Lord Dearing, is right in terms of in-year flexibility because of changes in school circumstance. I am sure that my noble friend will be able to respond on that point. In giving people the opportunity to make changes and develop policies, this must be the right direction in which to go.

Like my noble friend Lord Smith I come from local government and saw the LEA in Birmingham, under the inspired leadership of Tim Brighouse, a few years ago totally turn around the ethos, quality and product of the schools. I do not think that it had much to do with money. There is no doubt that in the past few years we have seen a generous injection of funds into Birmingham's school systems, for which I am very grateful. But essentially the reason we have seen such an improvement in the quality and morale of people in our education system in Birmingham is because of leadership. We had a chief education officer who was an inspired leader. It did not depend on the LEA having micro-management control over the budgets of individual schools, it depended on leadership.

I do not think that moving to a three-year funding mechanism for schools, or the ring-fenced approach that is being taken, should necessarily impact on the leadership that the local education authority will still be able to give. Of course it will depend on whether the LEA is up to the task. I see no objection in moving to a situation where the LEA has to earn leadership and influence rather than simply accepting that it has that job, whether or not it does a good job.

I listened with great interest to the reference of my noble friend Lord Smith to outdoor pursuit centres. I certainly understand the point he makes. Outdoor pursuit centres are very valuable. In my own city of Birmingham we have something called the Young People's Parliament, which is funded by the LEA and encourages young people to become interested in politics and to have a say in the affairs of their city. I cannot guarantee it, but I imagine that it is centrally funded from the education budget. Like my noble friend, I would not want to see such initiatives being undone because money was being allocated straight to individual schools.

However, I should have thought it very likely that our schools, in wishing to contribute to outdoor pursuit centres, would wish also to contribute to the Young People's Parliament. It is not as though they are going to take leave of their common sense and suddenly decide to close the door and take no part in some of the inter-school activity which is so valuable. In any case, surely if schools took such a blinkered approach, that would be just the kind of issue that Ofsted would pick up in its inspection process.

My noble friend talked about health. I am well aware of the close working relationship between his local authority and the health service in his patch. In the health service we have the example of strategic health authorities which have a very strong leadership role, but no money because almost all the money is allocated to primary care trusts which do the bulk of the commissioning. That is another example of how you can have strong leadership of a public service but do not need to control a huge budget to discharge that leadership.

Overall, if the answer is yes to the question of whether it is right that we give more authority to individual schools—that, by giving them three-year budgets, we assist them in taking much greater ownership of what they do—we ought to support these measures. I hope that the noble Lord, Lord Hanningfield, will withdraw his opposition to Clause 98 standing part of the Bill.

Lord Ouseley

I support the noble Lords, Lord Hanningfield and Lord Smith, in raising real concerns about Clause 98. There is no doubt that everyone would welcome support for greater autonomy for schools, assured budgets and more money. What is of concern is understanding what benefits the clause proposes for the quality of education. There is no justification for the proposal and, at this stage, no evidence of educational benefits. That view is supported by the House of Commons Education Select Committee. I am most concerned about the lack of public consultation and the lateness with which the noble Lord, Lord Hanningfield, has been given information about how the proposal will be implemented. I am concerned about the scant information that is available and the lack not only of public consultation but of consultation with local authorities about how their role is to be changed.

This proposal has been made before the publication of the detailed consultation documents, which continues to undermine the role of local government. The noble Lord, Lord Smith, rightly pointed out the wider role and responsibilities of local authorities for children. We should be concerned not just for the production of examination factories in schools but with the wider issues affecting vulnerable communities and the needs of children. After all, the Children Act 2004 places local government as the accountable body for all children's services.

I am most concerned about the role of local authorities in applying flexibility to move resources between central services, social services and schools to facilitate its responsibilities to meet the individual needs of all young people. We need to be reassured about many of the questions posed by the noble Lord, Lord Hanningfield. It is important that we get assurances that no local authority will lose grant due to spending differences with schools formula spending shares, so as to avoid possible knock-on effects on other services or, indeed, the council tax.

I conclude by saying that the effect of transferring schools funding from SSS to a dedicated schools grant would be the removal of the link between local council tax payers and schools. It would make difficult the role of councils in seeking to justify spending over and above schools grant, as they would have no influence over how schools served the community. I therefore support the opposition to Clause 98 standing part, pending further discussion about how such a proposal could be implemented.

The Earl of Listowel

I shall speak briefly. The Minister knows my sympathy for what the Government are striving to do here but, listening to the debate, I also had some sympathy with what the noble Lord, Lord Smith of Leigh, said.

The noble Lord, Lord Hunt, drew attention to the parallel with the changes in the National Health Service. He will be aware of the concerns of specialised health service providers, which were brought home to me when I visited a small project for young abusers in north London during the passage of the Sexual Offences Bill. The manager running the project said that she had difficulty getting funding from a primary care trust for that service, which was provided for a very few children with very difficult, specialist needs. So there is a danger that such specialist services, such as the parliament and Outward Bound, might be missed by schools focused on their more narrow immediate concerns.

I rise simply to draw the parallel and to ask the Minister to tell us in his response that the Government are aware of those concerns and that they will from the very beginning seek to ensure that those small services, which we are concerned may be missed out on due to the change, will be carefully considered in future planning and not lose out because of the changes.

4.15 p.m.

Lord Filkin

Clause 98 introduces Schedule 16, which puts in place powers that will enable the Secretary of State to require local authorities to determine school budgets up to three years in advance. It deals with the provision of ring-fenced grant to local authorities for the purposes of funding their schools, and it repeals for England the existing reserve power to set an authority's minimum schools budget where the budget proposed is inadequate. All those powers are permissive, and we will consult fully before putting in place regulations under any of them. A consultation document on three-year academic year budgets in England will be published shortly.

As several speakers said, there was general warm support for the key measure on three-year budgets at Second Reading, and I was pleased to note the support in principle from both the noble Lord, Lord Hanningfield, and the Liberal Democrat Benches. I should have been shocked, although not for the first time, if I had not had the support of the Conservative Benches given that their education policy document states: We will remove the LEA role in funding and managing schools". I will say no more on that.

I also appreciated the support in principle of the noble Lord, Lord Dearing, subject to one or two rather significant challenges. The House, with one or two exceptions, is supportive of the measure because there are many people out there who have been telling us for a long time—as the right reverend Prelate put it explicitly, people at the coalface in real life—that they want this to happen. We have listened to that.

In a sense, that is nothing new. I am amazed by those who say that the proposal is a shock and a horror and ask how on earth the Government can suddenly have done that, because it has been the clear thrust of government policy in this respect for many years. What is passporting about but central government saying to LEAs that the amount of additional money that central government put into the system to increase school budgets should get to schools? The rows about passporting have been about exactly that. This is an utterly logical consequential move in that process. There is nothing fundamentally different; it has been government policy for many years, for good reason.

Many Members of the Committee who have been in government will know partly why. One difficulty with local government funding is that if you persuade your colleagues in government to increase money for X function and then find that the money is spent on Y function, that makes life rather difficult. I will say no more.

However, that is not the reason for three-year budgets. The reason for three-year budgets is that they help schools enormously. Under the current system, they cannot be sure what will be their financial position next year. Understandably, schools make cautious assumptions. For example, they do not employ an additional teacher if they cannot be confident of having that person's salary, for good reasons. The consequence of that is that schools build up surpluses against a rainy day that may never come about, because they cannot be sure that it will not, instead of spending their budgets to the fullest possible extent on the benefit of their pupils.

Our proposals will allow schools to plan confidently over a longer timescale, to use their budgets fully and to afford that extra teacher, which will benefit children in our schools. So this is no technocratic or theoretical set of proposals; it is made for the practical reason that schools want certainty to be able to commit and use their resources. Without knowing what will be their future position, they will not behave so, for obvious reasons. This radical change will apply to all aspects of school funding. It will include grants from DfES and the LSC and devolved formula capital allocations, as well as their core budgets from the LEA. So schools will have a meaningful picture of the overall resources available to them when they plan their provision. That will have a positive impact on pupils.

It will also benefit staff. It has been pointed out to me that every year in some schools there will be some staff who are worried sick about whether their contract will be renewed after the end of the year. Until the school knows its budget, such staff will not know whether they have a job. That should not be a central driver of policy, but it is bound to affect the motivation of such employees, who need to know whether they are likely to be employed. This provision will help them to do so.

For the reasons that I have given, three-year budgets have been very widely welcomed. David Hart, General Secretary of the National Association of Head Teachers, has said that guaranteed three year funding is precisely what heads need if they are going to deliver higher standards". I wish to outline how the budgets will work in practice. The policy statement that I have placed in the Library of the House gives an overview of how we see the new arrangements working. There is a lot of underlying technical detail. My officials have been working closely with officials in the LGA and our national partners, representing local authorities and schools, since the summer on detailed proposals. There is an encouraging degree of consensus on those proposals.

On the flexibility of the budgets, we have no intention of requiring local authorities to set budgets utterly in stone. They must be responsive to appropriate changes in pupil numbers. A school that gains pupils will need more money and one that loses them will need less over time, although that transition must be managed carefully. There may also be other changes in schools' circumstances that should be taken into account in redetermining budgets from year to year. Those are the issues on which it is important that we continue the good discussions that are going on: for example, changes in the number of pupils with free school meals or the size of the school's premises. We plan to consult on whether that is the right way forward.

The initial discussions with our national partners suggest that, schools want to have confidence about the unit of resource from year to year, and under what circumstances that unit of resource will flex, rather than simply a cash sum. If they know the unit of resource and how the system will change, they can make their own calculations and assessment of how they will be affected.

However, we want to go further still. We agree that, alongside giving schools improved information about their budgets over a three-year period, we will also need to give them, where possible, information about cost pressures. The major cost pressure is teachers' pay. We have already taken a major step with the advent of multi-year pay proposals from the School Teachers' Review Body. In 2005 we expect to remit the body to consider a further two-year award, to have effect from September 2006. The benefit is clear: if teachers' pay settlements, as well as the school's budget and revenue position, were clear, the school would be better able to forecast resources and costs and therefore to make judgments about what to do.

We do not believe that the system will create additional burdens for schools, nor do we think that it will cause significant turbulence or a repetition of some of the earlier difficulties. There is no reason why the introduction of three-year budgets should do that. It is not about changing the distribution of funds to schools, which will remain largely the same; it is about giving them more information to enable them to plan ahead with certainty.

The noble Lord, Lord Smith, spoke to Amendment No. 143A. Passporting will be unnecessary under the new arrangements, since the size of the schools budget will be determined by central government, subject to any resources added locally, which will be entirely within each authority's discretion.

To sum up on three-year budgets, Amendments Nos. 143A and 143 would delete the provisions that facilitate three-year budgets. Amendment No. 143B would delete paragraph (5) of Schedule 16, which repeals the existing power of the Secretary of State or the National Assembly for Wales to set a minimum budget. The National Assembly for Wales intends to continue with the existing system of funding schools through the general local government grant system, but the Bill will give it the power to move to the system that we are introducing for England, if it wishes to.

The Bill offers a guarantee that the increases that we announce in a spending review will get through to schools. It is understandable that, without that guarantee, local authorities would be reluctant to offer their schools much information on three-year budgets. Only if we introduce a ring-fenced grant will local authorities and their schools be able to plan more firmly and take into account funding increases.

My noble friend Lady David asked whether giving three-year budgets to local authorities, as we hope to, would do the trick. Although that would help local authorities, there is no guarantee that an authority would pass on the funding to schools. Unless you close that gap, you have not done what this House has a clear wish to do: to enable schools to know what their income will be three years in advance. So it would not do the job.

Local authorities will continue in their existing role of distributing the funding granted to them from central government for the schools in their area. They will also be able to provide their schools with resources over and above the dedicated schools grant in response to what they judge as local priorities. They will therefore continue to play a critical strategic and quality-assurance role in education. I shall not repeat what I said at Second Reading.

This Government have been clear about the priority that they attach to education. Between 1997–98 and 2005–06, recurrent funding for schools in England has increased by an average of over £1,000 per pupil. It is important that that funding gets to schools and pupils. Our proposals make it clear beyond doubt that they will so benefit.

Ring-fencing does not mean that we are introducing a national funding formula, or that local authorities will no longer have a central role. I hope that I made that very clear at Second Reading. Local authorities' day-to-day relationship with schools will not be affected. The only thing that local authorities will not be able to do is to spend funding that central government provides for school education on non-educational provision. That is the nub of the issue; it is at the heart of three-year budgeting.

It has been argued a good deal in this debate that the provisions will mean almost the end of local government, although it was hardly mentioned at Second Reading. One of the practical reasons why that is not true is that most local authorities already behave as the provisions propose. The clear thrust of central government policy through passporting is that they should pass the funding on to schools, and so they do. The measure will cut out the process of tergiversation and argumentation to make it clear and transparent.

It has been argued that the new ring-fenced grant will make it more difficult to achieve joined-up services. I do not think that that is true. We are introducing a 7.6 per cent increase in general funding of children's social services for 2005–06. Although it will never be seen as enough, because that is how life is, it is nevertheless a substantial increase.

Local authorities will not be able to take funding intended for schools and use it for other purposes. However, they will be able to use their considerable discretion to fund other services that they think need more expenditure. So they should, and long may they do so.

The noble Lord, Lord Smith, talked about a £400 million shortfall. The argument that we usually hear is that there will be a £200 million shortfall. It has been suggested that, when the DSG is introduced, it may not take account of the fact that many authorities already spend above the schools formula spending share (SFSS). I can assure the Committee that there will be no shortfall. Our calculations for the new DSG will start from the total of what local authorities are actually spending on schools at present; that is the usual basis for making changes to local government finance arrangements. So it will not be necessary for local authorities to add to the DSG in order to continue spending what they have spent in the past, although they will be able to do so if they wish.

I have spoken about distribution already. In allocating the DSG we do not envisage any significant change to the existing SFSS formula, which was based on a major consultation exercise and introduced only two years ago. Nor will there be micromanagement of schools. We directly rejected that view, which is why we saw it as central to the proposals that the local authority should continue its role of distributing the grant.

On school forums, there is no question of any powers being taken away from local authorities. The powers in the Bill, which we will come to later, are about giving local authorities and school forums more power, at the expense of the Secretary of State, rather than the reverse. We have no intention in this Bill of taking that further to the detriment of local government.

I have spoken briefly about Wales. At this stage, Wales wishes to stay where it is.

I think that I have spoken to my noble friend Lady David. I have heard the comment that there is no evidence that change would be beneficial. I was surprised to hear the noble Lord, Lord Ouseley, also say that. I will put the question back to him. He said that there would be no benefits from moving to a three-year budget. Can he look me in the eye and say honestly that if, when he was chief executive of Lambeth council, he had known his revenue platform for the next three years for the borough, he would not have felt that that was massively beneficial, giving certainty to the local authority about its job? It would have removed a massive amount of officer and member turbulence about their position each year. I believe that he would have snatched at that with both hands, as I would have done when I was a local authority chief executive. One could then have got on with the job, rather than suffering the constant agony of wondering, "Where will we be?" and the short-termism that comes about as a consequence of that sort of financial environment. One should never provoke noble Lords; they always want to respond.

4.30 p.m.

Lord Ouseley

I thank the Minister for the opportunity to clarify. I was saying that I could not see the evidence of educational benefit from the proposal in Clause 98. It is important that we consider that at this stage. That matter has not been clarified, and I am still not convinced. I readily accept the proposition that the Minister put to me, but that is not what I was saying. I was talking about the educational benefits.

I do not think that ring-fencing, which is helpful in the context in which it is proposed, will provide educational benefits. We know about the way in which greater autonomy has helped certain schools to perform well, and we have seen the benefits for some children. Equally, however, we have seen how other children, particularly those from vulnerable communities, have not done so well. It is therefore important that we understand the discretion that is available with the autonomy to ensure that local authorities, which have responsibility for meeting the needs of children across the range of services for which they are responsible, can be effective and will not be hindered by the proposal.

Lord Filkin

I thank the noble Lord, Lord Ouseley, for his helpful interjection. Perhaps we should not protract that debate at this point.

I sought to give three specific reasons why there would be direct benefits for children in schools. One is that more teachers would be employed, rather than the money being kept in budgets. Secondly, the management of the school would have much greater clarity about its resources into the future and would spend less effort second-guessing what those resources might be. Thirdly, the staff would have less anxiety about whether they were going to be sacked as a consequence. I must move on.

I was asked some difficult questions by the noble Lord, Lord Hanningfield. I shall try to answer most of those, at least to partial satisfaction. The noble Lord asked about the Select Committee on Education and Skills and about whether there was evidence for the changes. My noble friend Lord Hunt of Kings Heath, in part, made the argument about that. We believe, as, I think, do many others, that organisations in the public or private sector are more likely to deliver good results if they know what their resources are, if they have control over their inputs, if they are not burdened by excessive bureaucracy and regulation, and if they are judged by the outcomes that they produce, than if they are second-guessed through input controls. That is the central performance analysis that sits under the new relationship with schools and under what we are doing with three-year budgets.

Lord Hanningfield

I hope that the Minister will go on to answer more of the questions that I posed. He mentioned the security of budgets several times. Everyone would like to know what they are going to get for three years; that is fine. However, all budgets are based on pupil numbers. The Minister referred several times to the security of staff. With numbers changing, if we are not going to take money away from schools that lose pupils and give it to schools that gain pupils, we are going to have to pump in extra money. They will not be three-year budgets, because numbers will be changing all the time.

In my authority, for example, we go by the numbers in January. We prepare the budgets, but the schools get them on the basis of the number enrolled in September, which could be different from the suggested number in January. They get their full top-up money in September, on actual numbers, but numbers in some schools change dramatically. If numbers in some schools are falling dramatically, we will have to find extra money for the pupils who are now in the other schools, unless we reduce the money that the schools with falling numbers get. If we do not do that, more money will have to be pumped into the system every year. Also, there will be no security for staff in a school with a falling roll. I do not understand.

The Minister referred to security for staff several times. I do not know how we will get that security in schools with falling rolls. I cannot understand the Minister's point on that issue.

Lord Filkin

There is no such thing as a job for life, in the public or private sector, as we all know now. However, a school that is in the situation that the noble Lord described, with the head and the governors conceding that their rolls are falling, will have a reasonably good feel for likely future losses. It will make high and low assumptions.

With the direct school funding process, schools will know the revenue consequences and will be able to judge whether it is prudent to retain staff or take on more. That is different from the current situation, in which they have two variables to deal with. They know neither what will drive the funding nor what will happen to their volume of pupils.

Lord Smith of Leigh

School numbers can change dramatically in a short time. Often, if a school is losing pupils and parents suspect that the school may be closed, they will often vote early with their feet to get their children into a different school. A school that starts in September with a particular number of pupils may end the year with a substantially smaller number. Whatever system we have, we cannot legislate for that uncertainty.

Lord Filkin

It is a fact that, in this House, we cannot make the world stand still. However, through these measures, we can substantially reduce the uncertainty.

With regard to the forecasting methodology, we are carrying out a study of the methods used by LEAs to forecast pupil numbers. The early results from that work suggest that there is unlikely to be one method that fits all schools. We will make the results of that work available to all authorities to inform their work on forecasting pupil numbers at school level.

I was asked about the level at which the new ring-fenced grant would be set—current spending or school FSS. The underlying formula will be the existing SFSS, subject to any minor change. However, the allocation of DSG will be based initially on actual spend by LEAs, to ensure that there is not a sudden redistribution.

Will the Government give full assurances to local government that no authority will lose grant due to spending differences? We will ensure that there are no adverse effects for the rest of local government and that transitional protection is put in place to ensure that no authority sees an unacceptable change in the central government resources available for non-school services.

Will school funding expenditure remain part of local authorities' accounts? Yes, it will. At what date will budget shares be issued to schools? We intend that they will be issued at much the same time as now— February or March, not August—following the local government settlement in November.

Lord Peston

I interrupt my noble friend for a word of clarification, following on from what the noble Lord, Lord Ouseley, said.

I support my noble friend in everything that he has said, except for one matter that looks a bit obscure. It seems to me that schools will want certainty—that is right—and I am certain that what is allocated to education should go to education. However, if, in a local authority area, one school needs more money for special reasons—perhaps it has a more difficult group of pupils—where is the decision taken, so that the school that needs more funding gets that funding? It is not clear. Are we to believe that it is a central government decision, or will the local authority at least be able to say, "We will certainly allocate all the education money to education, but our judgment is that we take the decision that this school should get it rather than that one"? That is the bit that I got lost on. I am sure that there is a good answer, but I would like to know what it is.

Lord Filkin

My noble friend is right to ask that question, as I skated over it in my response. There will be no change from the current situation, in which local authorities distribute the funding to schools according to a formula that they determine in a manner consistent with central government guidance. It is essentially a continuation of a local authority decision on how to distribute; that is, the "principles" that should drive the distribution—not whether the local authority likes school A or school B. That is consistent with government guidance and will continue unchanged.

As regards the question about LEA powers, there is no intention to remove LEA powers and give them to schools forums, a point that I have already covered. On under-spending or overspending the new ring fence grant in terms of budgets retained centrally to manage LEA activity, our proposals will not affect the position in relation to central spending by LEAs.

In 2004–05, we introduced a limit on the annual increase in authorities' central spending that is not delegated to individual schools, such as PRUs and some SEN expenditure, to ensure that funding increases reach schools. We envisage that that will continue under the new system. Where an LEA can make an exceptional case for exceeding the limit— which is germane to the question asked by the noble Earl, Lord Listowel—it can currently apply to the Secretary of State for approval for a dispensation. In future, we propose that such proposals can be agreed locally with the school forums. If there is no agreement, as now, they can be referred to the Secretary of State. So there is the potential for flexibility.

I was also asked about the funding implications for schools in deficit. At present, schools are able to carry forward unspent balances. If they overspend, they can also carry forward a deficit. The introduction of DSG will not change that situation. I was asked whether this would limit extended schools development. That is a good question because I think that throughout the House we support that. The answer is, "No, it will not", in terms of the specifics for support for implementation. If memory serves me right, central government funded £50 million to the early pathfinders on extended schools development. Again, from recollection, we will be putting more than £100 million in the next phase to support the early development of that process. Schools, as the noble Lord knows, are strong supporters of extended school in general because they see the benefit. The noble Lord, Lord Hanningfield, spoke strongly and clearly about what a good thing it is. We agree with him on that.

On the statutory S52 budget and outturn statements, the official closure of accounts will remain at 31 March. So there will be no change in that respect. As regards different systems in England Wales, yes, there will be different systems. That is a consequence of devolution, which we believe in, as the House well knows. On the question that paragraph 6 of Schedule 16 makes amendments to Section 47, I do not have an answer, so I shall have to write to the noble Lord.

In conclusion, I think that we have covered most of the issues. If it is not to full satisfaction, I have no doubt that we will come back to them later. In the House and in wider society, at heart there is a strong consensus for this measure, which is the logical consequence of the way in which policy has been moving for years. But it retains the important role of local authorities, which are massively important in terms of educational leadership in their communities, as my noble friend Lord Hunt so powerfully put across.

The Secondary Heads Association and the National Association of Head Teachers have said: Why our two associations support the introduction of dedicated school budgets for the LEA and three-year budgets for the school is because it will bring clarity and predictability". They are absolutely clear. It will remove also the major areas of uncertainty in the funding fog as to who is to hold account the basic level of their funding". We have not spoken about that accountability, but it also is good in terms of democratic health. People will know the amount of money that has gone into schools and the responsibility for that. So both SHA and NAHT feel that all the provisions in the Bill work together to provide schools with a more coherent and stable funding system. They state: The changes are not a radical step forward, but the sensible, rational, next steps needed to develop greater equity, clarity and predictability in the system". I am glad that largely the House supports them in that view.

I hope that my responses to the probing amendments put forward by the noble Lord, Lord Hanningfield, have been helpful and that I have persuaded my noble friend Lord Smith not to press his amendments.

Lord Smith of Leigh

Before my noble friend sits down, I would like to probe him on a couple more points. He talks about the logic of the Government's position as an extension of policy. Yet why in 2001 did the then Minister for schools standards state exactly the opposite?

There is a clear distinction of principle here. The Government are saying that any additional money for schools from the government should go to schools. From the total budgets that are being spent on education, a substantial part does not come from the Government but from local authorities or council tax payers. That is the distinction between the positions.

My noble friend made much about the position of certainty. We had a small debate on student numbers. I am pleased that he thinks that he can get an agreement on the long-term issue of teachers' pay. I hope that he is right. He is not right yet. I am sure that all parts of the public sector would welcome three-year budgets. I am sure that children's social services will also look for certainty for three years so that they can plan. We would all like that, but we can never be certain.

4.45 p.m.

Let us remind ourselves that the Government are taking responsibility for 25,000 schools up and down England, which is a huge responsibility. In terms of accountability, if a school comes to me and says that it does not have enough money, I will tell it who to go to and it will not be the local education authority.

We have also conducted this debate with the background of the current Government. I welcome the additional funding that has gone into education in the past few years, but I can remember when schools were losing money. Head teachers welcomed the fact that local authorities were able to put additional money into schools to make sure that they could survive. So perhaps—

Lord Hunt of Kings Heath

I am grateful to my noble friend for giving way. But is that not the point? In those situations, it was not clear which public authority should take responsibility for the problems that schools had then. Now, in terms of how well the money is spent, responsibility is clearly with the governing body. With three-year flexibility, they have been given more opportunity to ensure they use that discretion wisely. When it comes to the overall funding level, the responsibility is clearly with central government.

Is it not better to be straight, rather than to have the traditional approach where so many bodies are involved? It is very difficult for the punter to know to whom they should go.

Lord Smith of Leigh

As complex as education funding is, I am sure that it is not quite as complicated as health funding. My point is that when schools have lost money because of decisions from central government, they have looked to local authorities for additional support. In the new arrangements that will not happen. We should be clear about that.

I would welcome clear responsibility. Responsibility is not quite clear because when the money gets to the schools, who takes direct accountability? At the moment, it is difficult enough to get sufficient people of quality to fill governing bodies. Most authorities in my area have a number of vacancies, which we do our best to encourage people to fill. If more responsibility is being given to school governors and heads, we must ensure that they can exercise it.

I will not bore Members of the Committee, but for as many rogue local authorities, I can quote many rogue head teachers—one of whom decided that the best way to solve the home-to-school transport situation was to use school funding to put a deposit on a new car for himself.

My noble friend should remember that, like financial investments, this should come with a health warning that spending on education can go down as well as up. We are assuming that it will always go up, which cannot be the case.

Perhaps I may just press my noble friend to reflect on these two points, which he did not really cover. First, how can we be certain that we can continue to get management efficiency in the money going to schools? Secondly, would he be supportive of trying to make sure that schools are involved in the wider agenda beyond the school gate, so that some kind of responsibility for schools is in the Bill?

Lord Filkin

I shall be brief. My noble friend Lord Hunt's interjection about it being better to be straight got to the nub of it. This has clarity and a certain intellectual honesty as a consequence. I take the noble Lord's point about governance. It is important that governance can cope with those issues, to which I am sure we will return in the future.

On three-year budgets for local government, I agree with him. My right honourable friend the Deputy Prime Minister has as one of his objectives the introduction of three-year budgets for local government because it would be good for local authorities as well. However, I should not refer to "three-year budgets" because those will be set by local government; rather, I refer to greater certainty about the forward grant from central government.

On management efficiency, my noble friend Lord Smith was not able to be with us when we considered other parts of the Bill and therefore missed our many happy hours spent looking at the very strong relationship between the new Ofsted inspection system and the performance of the school. We are confident that the new system will continue to drive greater efficiency forward.

I turn to my noble friend's comment that local government will stop putting any money into schools, that it will never do so again. I do not know how he can say that. I cannot speak for 150 local authorities or predict the future, and I do not know who can. We will see what happens. I expect that local authorities will think that they do want to do things with their schools because their children are being educated in them. They will want to put forward initiatives that they believe should be supported. However, we shall let that pass.

I hope that my noble friend will withdraw his amendment.

Lord Lucas

Perhaps I may ask a couple of brief questions about the reply given by the Minister. Am I right in understanding that the ring-fencing will apply to the entire school budget; that is, the money given to schools and the funds spent centrally by the LEA, and that the starting point will be what is in the budget at the moment? An LEA which has been contributing an extra £10 million a year to its schools is effectively now stuck with that commitment because it will become part of the central ring-fencing. They will lose any ability to cut back on the commitment if children's services need it.

Let us take two local authorities with budgets of around £200 million. One has been spending £100 million on schools while the other has been spending £110 million. It is at that point where the ring-fencing will be set. In effect, therefore, in two all but identical local authorities, one will have a budget for £100 million for non-school services while the other will have a budget of £90 million. That is the position in which they will find themselves stuck. In other words, past generosity will come back to hit them in the face, which will give them a jolly good reason not to do it again. Am I right in my understanding of how things will work?

Lord Filkin

Perhaps I may put it like this: up to a point, Lord Copper—and I mean no disrespect. In the situation described by the noble Lord, if for the sake of argument a local authority has been putting money into schools over and above the schools formula spending share, the SFSS—let us say £10 million, a rather large amount—while in the medium term the level of central government grant will be set at the level of the SFSS, in the short term—to avoid exactly the problem envisaged by my noble friend Lord Smith; that of a school finding that its grant is suddenly reduced—central government will protect the school from that by providing funding at the level that the school had been receiving in total prior to the changes. That will not mean that the local authority itself will be putting its hand in its pocket to sustain that school's budget, a point of concern for the noble Lord, Lord Lucas; it will be provided as part of the damping arrangements for the totality of the changes.

Lord Lucas

Perhaps I may press the Minister a little further. If an LEA has been spending an extra £10 million, those schools will do relatively badly because that extra £10 million will be absorbed over time. The government grant will start at £10 million higher and that particular authority will get the money. However, will it receive the extra funding in each budget?

I want to find out how this will work. Will additional government grant be provided to local authorities to cover their extra funding or will the ring-fencing be set high so that local authorities will find that some of their own money is ring-fenced, as it were? Will the ring-fencing then squeeze school funding? Moreover, if a local authority does put additional money in, am I right in interpreting paragraph 3(7) as providing that the Government will have control over how the money is spent or will the local authority be entirely free in how it spends the additional sums? In other words, will local authorities be constrained by considerations such as how much of the budget should go to schools or how allocations should be made between schools? Are these decisions to be left entirely to local authorities? Will they be able to distribute these funds as they wish?

Lord Filkin

On the noble Lord's last point, that is exactly so. The additional moneys that local authorities choose to put into schools in their area will be completely within their discretion.

On the situation described by the noble Lord in terms of the transition from one system to another, local authorities will not be required to continue to put funding into schools. They will not lose funds from the rest of their grant to fund the transitional damping process because central government themselves will provide it in order to avoid exactly the problems about which my noble friend Lord Smith was concerned. He asked whether there would be a hard landing and a sudden shift.

The noble Lord, Lord Lucas, is also right in that over a period of time, school funding will move towards accordance with the general formula for distribution as indicated by the dedicated schools grant and as vitiated through the distribution decisions made by local authorities themselves as part of their distribution responsibilities.

That is so complicated that it may be better if I put the detail into a full note to the noble Lord and copy it to other Members of the Committee.

Lord Hanningfield

I do not want to start another detailed discussion, but it is worth pursuing this a little further. What is likely to happen to local authorities? They will not put money into schools actually to fund basic five-to-16-years education, rather they will fund the extended school way. In partnership with schools, they will support extended schooling, family development, social services and children's issues on each school campus. I sought to make that point when I introduced this debate.

Local authorities are to leave it to central government to fund the basic education budget, which is to be dealt with on the other financial year basis—from April to April with no three-year guarantee on funding. I know how that will operate in my own local authority. A lot of money will be injected into schools for supporting families and children outside the education system. We will find that school campuses will be supported in different ways. Part of the money will come from central government through the new system being introduced and part from local authorities, which will fund other things happening on the school campus. I am sure, as the years go by, that that is how this system will operate.

We are now in a major transition in the way that schools operate. Given that, it would have been more appropriate if this legislation had been introduced three years ago rather than now, given the way schools are to develop over the coming few years. Perhaps the Minister will clarify that that is what will happen. Money is to go into schools from different sources.

Lord Filkin

I should not venture to display my forecasting skills on decisions over which I have absolutely no control whatever. The noble Lord may well be right, in which case what he says will give some comfort to the noble Lord, Lord Dearing. In truth, I do not think that any of us really knows. It may be that it will be exactly as the noble Lord, Lord Hanningfield, has set out: LEAs which still have a passion for raising the educational and other attainments of their children will choose to behave in the way he has described, or it may be a more mixed picture. I think that I would put my money on it being a more mixed one, given the diversity of local government and the range of local politics. However, I could be wrong and I have no knowledge either way.

Lord Lucas

Before the moment passes, I rise only to accept the offer of a note from the noble Lord.

Lord Hanningfield

We have had a very extensive debate on an extremely complicated issue. Like myself, the noble Lord, Lord Smith, is the leader of a local authority and therefore becomes involved in these things in considerable detail. Wearing my other hat as the leader of a local authority and not speaking as a Member of this House, at the moment even a small school usually knows where to go. I am often approached, even though we have over 600 schools in the county of Essex. It is a pity that we shall lose some of those links.

Some schools have only two or three teachers, while other schools operate on budgets in excess of £10 million. There is a tremendous diversity in school provision. I would not want to be the Government Minister who has to introduce this for our 25,000 schools because there are going to be a lot of problems.

Lord Filkin

I am genuinely sorry for interrupting the noble Lord. We do not want to alter in any way the relationship between schools and the noble Lord when he is wearing his hat as the leader of a local authority. Schools should continue to go to their local authorities, which will have the roles of leadership and support for raising the educational attainment of the children in their area. I expect that schools will continue to turn to their local authority leaders.

Lord Hanningileld

The Committee will probably have had enough of this debate today. We shall analyse everything that has been said. I hope that the Minister will write to me and others, as he has promised. With that, I shall not pursue my opposition to the clause standing part of the Bill today.

Clause 98 agreed to.

5 p.m.

Lord Lucas moved Amendment No. 141:

After Clause 98, insert the following new clause— Local education authorities as champions of the child and the family The Secretary of State shall take such measures as he considers necessary to promote and provide for the role of local education authorities as champions of the child and the family, and in particular shall issue a consultation document on the central funding of statemented pupils and of pupils whose education is being provided in pupil referral units.

The noble Lord said: At Second Reading the Minister said that he was intent on moving local education authorities away from the historic position of being the controllers and distributors of money at their own discretion towards being champions of the child and family. I find that ambition wonderful and I very much hope that the Government will make it happen.

However, the obstacle in the way of that, with which I am familiar, is the conflict between the fact that the local authority may wish to be the champion of the child but, on many occasions, being the champion of the child can put it under impossible financial strain.

Special educational needs are a case in point. If local authorities became the champions of the child and the family and were out there trying to discover which children have special educational needs and providing properly for them, in ensuring that that happened, their SEN budgets would run beyond their extremely limited ability to deal with them under the current financial systems.

As a result, many local authorities have become the enemy of the child and the family by imposing extreme delays and denying that special educational needs exist. This makes the whole process very difficult. It is the articulate and the persistent who get what they want, and ordinary citizens—particularly their children—have an extremely miserable time. A two-year delay in dealing with children with severe dyslexia, dyspraxia or other behavioural special educational needs can cause long-term damage and make them very difficult to deal with.

A parallel problem occurs in pupil referral units. which are expensive. Very often the best thing for such children—and very often the best thing for their classmates—is to give them a breather; to give them a chance to get straight, to re-motivate them and to get them going again in an environment which is designed for them rather than for other children. Where these units work well, I have been impressed by what they achieve. But they are expensive and local education authorities, if they are keen on providing such facilities, often seem to be held back by the fact that the funding has to come out of a very limited budget.

Both of these matters conspire against local authorities becoming the kind of creature that the Minister said he would like them to become. I should like to know what he proposes to do about it. I beg to move.

Lord Filkin

If the noble Lord, Lord Lucas, will bear with me, I shall speak without my notes. This is an issue on which I have a policy responsibility as well as the pleasure of taking the Bill through. It is the kind of issue that would genuinely benefit from the opportunity for a fuller debate than that offered even by the Committee stage or Second Reading.

I strongly agree with much of what the noble Lord said. When we are dealing with special educational needs—whether at the softer end of a mild slowness in learning, for whatever reason, or at the very severe end of low incidence, high cost need—it is critical that there is early identification and early intervention. All the evidence shows that if you can identify with the parents that there is a problem and work with them on what might be an appropriate set of interventions very early on, you achieve two things: you reduce the risk that the child's education will suffer through the alienation that can follow on from that; and you reduce the risk that the parents will feel forced into an adversarial relationship with the local authority because they are worried about their child and it does not appear to them as if the system is responding adequately.

I am simplifying matters greatly, as the noble Lord, Lord Lucas, knows, but why I understand and support what he is trying to do in principle but do not support it in practice is because, essentially, he is pushing it all into a central pot and using—although he did not say this exactly—a statement-type process to get provision made and then to get the intervention. While undoubtedly a statement is necessary for some children with particularly complex needs—because that is the only way in which you can bring to bear the expertise, diagnosis and the funding package to intervene—in very many cases you do not need a statement.

The best local authorities have demonstrated in practice that they can reduce the need for statements by getting better at much earlier intervention and identification. That is why we have been really pleased by the evidence of the early support programme which tries to bring intervention in the first less than three years of the child's experience and into early primary school settings. So you identify that there is a problem and you bring in the package of support.

That works by increasing, rather than reducing, the amount of budget that the school itself has to deal with SEN issues so that it does not need to go elsewhere to get either the cash resources or, for example, to get an educational psychologist to come into the school and to work with it on identifying the needs of the child. We have now seen enough of this to know that it is not theory; that, where it is working, it is good practice. Without threatening the noble Lord with two letters, I should be pleased to set out this argumentation in more detail.

This is the thrust of our policy. It does not mean that there is no role for the centre—there is a massive role for the centre—but it does not mean that the answer is to push all of the resource into the centre either. The more that the school or pre-school setting can identify the problem and have the skill, the resource and the access to specialists to intervene early, the better the service to both the child and the parent.

I hope that has been helpful. I am happy to write to the noble Lord in more detail if he would like me to do so.

Lord Dearing

The Minister has threatened another letter; may I have a copy? The noble Lord is right to say that there is an issue of resource and, as the Minister said, to get that resource early to the child will make a fantastic difference. However, it is my experience that there is not enough resource around to meet the needs of these children.

Lord Lucas

I am grateful for the noble Lord's reply. Yes, I would love to spend another few hours reading his letters.

One of the reasons I do not share the pessimism shown by the noble Lord, Lord Smith of Leigh, in the previous debate is that I can see that the Government are doing on school funding as a whole what I would like to see them doing—or suggest that they might do—on SEN funding. They have taken responsibility now for the level of funding that schools will receive. So the local authorities, instead of becoming the devils who will not give the extra 1 per cent, become the angels who might give it without in any way having to change their spots.

The Government have taken the responsibility for setting the level; the LEAs' money is entirely extra— the schools do not have a right to it—and is therefore positive. By setting the level centrally, by having central control and central determination of what should be done—which may well be, say, that much more should be distributed to schools—the LEA no longer has to fight that corner and has instead total freedom to line up alongside the parents and fight their corner.

I can see that the Minister and I want to end up in the same place. I shall be fascinated to read what the noble Lord has to say about the progress he is making towards it—not least because an awful lot of these kids are ending up in prison education, which is another area of his responsibilities. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Walmsley moved Amendment No. 141 A:

After Clause 98, insert the following new clause—

"ACADEMIES: ADMISSIONS

After section 89 of the School Standards and Framework Act 1998 (c. 31) insert— 89A An Academy shall be treated for the purposes of section 89 as a maintained school in the area of the local education authority in which the Academy is situated save that the governing body of the Academy shall be in all cases the admission authority for the Academy."

The noble Baroness said: In moving Amendment No. 141 A, I shall speak also to Amendment No. 141B, which is grouped with it.

The amendments seek to address the issue of academy admissions policies. The first amendment seeks to ensure a level playing field in the way in which academies compete with other schools within the same pupil admission system. The second amendment seeks to probe the more particular concern about the impact of academies on neighbouring schools and to help ensure that they do not poach pupils.

Academies may be appropriate in certain areas but they must sit comfortably within the LEA's local plan. That is why it is quite inappropriate for the Government to have a target of 200 academies, or any other number come to that. The number of different admission authorities and the variety of admission arrangements add significantly to the level of complexity present in the school admissions system. While attempts to co-ordinate admissions arrangements may simplify the process to some extent for parents, it will not address variation in admissions policies. As the Select Committee on Education and Skills concluded last July, in the report of its inquiry into school admissions: The School Admissions Code of Practice is an advisory rather than a regulatory instrument and has proved insufficient for the task of ensuring widespread good practice in school admissions. Inconsistency in the definition and application of over-subscription criteria has been raised repeatedly during the course of our inquiry, as the cause of much confusion and complaint. This is a failure not of the Code itself but of the legislative framework in which it sits. Our recommendations call for a shift towards greater regulation of school admissions in the interests of fairness, consistency and clarity". Local democratic accountability will inevitably be undermined by a large number of academies being set up, operating as independent schools, outside the aegis and control of the local authority. The impact of a substantial number of academies on school admissions arrangements could be quite dramatic. They are likely to undermine the LEAs' ability to plan coherent education provision.

Academies have the potential to disrupt fair and efficient admissions arrangements within authorities and in neighbouring authorities. Their establishment gives parents the perception that the academy is the best secondary school in the area, irrespective of the quality of other schools. Their designation as academies and the extra resources given to them could act as a magnet for parents who could be attracted by the sales pitch of such a designation, irrespective of the good Ofsted reports obtained by other secondary schools in the area.

Concerns have also been raised about academies targeting future pupils. In Bristol, for example, where the St George Community College is due to reopen as an academy, glossy leaflets have been distributed only in the more affluent areas. The Greig City Academy in Haringey experienced difficulties in recruiting pupils and targeted only the leafy suburbs rather than the neighbourhood area of Tottenham.

We very much approve of the idea that extra resources should be deployed in very deprived areas. There is considerable evidence, for example in the HEFCE report published last Thursday, that children in deprived areas need additional resources and help. However, we believe that that should be planned for by an accountable LEA which will take account of the wider impact and the interests of all the children in the area.

We object to the fact that academies' admissions policies are outside democratic accountability. Therefore, their overall impact cannot be planned for. We are concerned not just about the children who are receiving extra resources—which, I accept, they very often need—but all the children in an area. I beg to move.

Lord Filkin

As the noble Baroness, Lady Walmsley, indicated, the intention behind the first amendment is to ensure that local schools and academies work together to achieve co-ordinated admission arrangements which are straightforward, transparent and fair for local children and parents. We agree. That is precisely why we already require academies, as part of their funding agreement which they have to sign with the Secretary of State, to have admission arrangements which are consistent with the school admissions code of practice and with admissions law more widely. The words "consistent with" are, in fact, more powerful than those which apply to maintained schools.

Academies are also required, by the Education Act 2002, to have regard to advice from the local admissions forum. For all practical purposes, this puts them in the same position as a maintained school. They are also required by their funding agreement to consult locally on their admission arrangements each year. Representations about admission arrangements can be made to the Secretary of State and changes to admission arrangements have to be agreed with the Secretary of State. There is therefore no need for the noble Baroness's amendment; existing mechanisms and the existing policy seek to do exactly what she proposes. That aim is already met by existing requirements that we have placed on academies.

On Amendment No. 141B, academies have been established to tackle the problem of poor schools which have failed local children over many years. To make a real difference to those children's life chances, a radically different approach is needed. Academies are replacing schools which have been failing for too long, whatever the reason.

Academies are dealing with long-term failure through innovative new approaches, and they need to be able to retain the freedoms to innovate. They are set up with the support of funding from private sponsors, but more important than their money is the vision and sense of ethos that they bring to the academy. Sponsors often have exciting and innovative ideas, which help raise the expectations and ambitions of their pupils.

Academies are revenue-funded at comparable rates to all maintained schools in their locality. Capital investment is available to all maintained schools from other school programme initiatives. Academies mainly replace schools which have received very little investment in the past. We are targeting resources at the most needy schools, pupils and communities.

It is right that academies should be funded at a level comparable with LEA schools in the same area. Part of the rationale behind the academies programme is to transfer good practice and lessons learnt on transforming poor schools to the maintained sector. It is important that those lessons learnt cannot be distorted or ignored because of arguments about differing funding levels.

The noble Baroness said on Second Reading that in setting up academies, the Government have given away 17 valuable sites. It is true that academies are usually established on sites transferred from the previous owner, usually the local authority, to the Academy Trust. But the Academy Trust is typically a charitable company, responsible for the building and running of the academy. If the academy were to close, provisions in the academy's funding agreement and in the Education Act require that ownership of the land and the buildings or the proceeds of any sale must revert to the previous owner.

Similarly, academies' building plans are based on the same cost benchmarks as all other schools whose buildings are approved by the DfES. While they receive an initial substantial capital investment, they are simply sharing in our ambitious capital plans to replace or modernise every secondary school in the next 15 years.

Being independent and state maintained gives academies the freedom to innovate in the governance, staffing, curriculum and organisation of the school, and to explore new ways of organising the school day and term length. We have spoken previously about some of these issues.

On the suggestion that there is a target of 200, that is not a quota, it is just a statement of what we believe to be the likely numbers and the conditions that can enable an academy to be set up. I hope that that is helpful.

We do not believe that academies will disrupt local admission arrangements for the reasons I have indicated. The requirement to be consistent with the code of practice goes further than the requirement on maintained schools merely to have regard to the code. So there is a stronger lock on academies in that respect for good reasons.

I hope that my explanation is helpful and that the noble Baroness, Lady Walmsley, is not minded to press her amendment.

5.15 p.m.

Baroness Walmsley

I thank the Minister for his reassurances in this respect. However, it strikes me that the control over the admissions policy relies to a very great extent on the funding agreement and the funding contract with the academy. What sanctions are there if the academy should move away from that in a few years' time? For example, what sanctions does the department intend should be placed on the schools in Bristol and Haringey that I gave as examples? It is quite clear that they have targeted students from particular areas where academic attainment is likely to be higher than in the poorer parts of the catchment area.

Lord Filkin

I will chance my arm and no doubt correct what I say in a letter. Essentially, I would not have expected that the literalism of a sanction was enormously necessary. To put it another way, we have a body set up under statute as a charitable body, which is utterly reliant on central government for its funding. It cannot survive without that. If, as part of its foundation agreement with that totally dominant funding body—the central state—it has a set of clear agreements that it has to behave in a certain way, it is my experience of public or charitable bodies that it will not lightly ignore those issues.

I suspect that there is a more specific answer which, I guess, is that withdrawal of funding is one possible sanction. No doubt there are others, and I shall give the noble Baroness chapter and verse on that.

Baroness Walmsley

I thank the Minister for that. I am interested to know whether the department will be asking any questions of the schools in Bristol and Haringey—the examples that I have given. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 141B not moved.]

Schedule 16 [Funding of maintained schools]:

[Amendment No. 141C not moved.]

Lord Livsey of Talgarth moved Amendment No. 142: Page 134, line 23, leave out "or the Secretary of State

The noble Lord said: Amendments Nos. 142, 143 and 144 address the whole question of the Secretary of State in relation to local authorities and in particular to schools forums. In moving this amendment, I am asking a simple question. Does a local authority which has failed to obtain authority from its schools forum then have a second bite at the cherry by seeking authorisation from the Secretary of State? We see no justification at all for that. This is a simple set of amendments that deal with that problem, which we feel is inappropriate.

The intention of Amendment No. 144A, which is in the same group, is to probe the extended powers of schools forums. The Bill allows for an increased role for schools forums which will be given decision-making powers in addition to their current advisory role. We want to focus on this and see the extent of it. During the passage of the Education Bill 2002, there was much debate about the role of schools forums. The main concern was that the Bill would allow schools forums to determine whether some school support service budgets should be delegated to schools. In effect, that would give the forums de facto employer capacity over employees in those services without any of the accountabilities to which LEAs are subject.

At the time, Opposition Peers won a vote by 161 to 130 in favour of removing the provision for the establishment of schools forums. The then Minister, the noble Baroness, Lady Ashton, came back with a helpful amendment which led to the current position whereby schools forums can now perform only an advisory role and cannot take any binding decisions on LEA's central retention of funds. This Education Bill, under Schedule 16, will give limited decision-making powers to schools forums. The purpose of this amendment is simply to probe exactly what those powers are.

The DfES memorandum to the Delegated Powers and Regulatory Reform Committee refers to regulations under Paragraph 3(7) and Paragraph 6(3)(d). Paragraph 6(3)(d) provides that regulations may set out the circumstances in which a schools forum or the Secretary of State may authorise changes to the operation of an LEA's school funding formula to take account of local circumstances. Paragraph 109 of the memorandum states: It is appropriate that the detail of, the circumstances in which this should occur, should be set out in regulations together with other detailed … provision relating to school funding". By tabling this amendment, we are seeking some of that detail. Will the Minister oblige us by giving us some of that detail?

The other issue of concern in 2002 was whether schools forums were suitably representative. Many governors remained concerned about the low level of governor representation on some LEA schools forums falling well short of the proportionality originally envisaged as well as the need for training and good practice guidance. I understand that similar concerns are shared by the Audit Commission. Indeed, similar concerns were raised at a schools forums conference organised in conjunction with ConfED, NASG, NGC, NAHT, SHA and the LGA on 22 October in London. One delegate from Buckinghamshire reported: What struck me was that different Schools Forum were constituted in very different ways. In some there were virtually no governors, or no Teachers Panel representatives, in others, the Portfolio Member was the Chairman". He continued: Despite the fact that Buckinghamshire's forum was slow to be properly constituted and formed, I was quite pleased that we had a balance of Headteacher and Governor representatives, that officers were in attendance but not members of the Forum, and that our Portfolio Member was an interested observer, welcomed at our meetings to contribute—but not a member of the Forum and certainly not the Chairman! There is little to require schools forums to consult and obtain views from those that they purport to represent. The next sentence is important. School governors, who are volunteers and already give heavily of their spare time to their schools, are unlikely in many cases to seek or play an additional role in schools forums. Head teachers in one particular sector, whether primary or secondary, may come to dominate their proceedings by virtue of the demographics or inequity of representation. What impact are such situations likely to have on the operation of the extended powers of schools forums? I beg to move.

Baroness Andrews

I am grateful to the noble Lord for giving me the opportunity to explain, as he has invited me to do, some of the implications of the powers that we seek and the impact that his own amendments will have on the proposals. I will start by saying, because this is the way that he started, that this is in no way a second bite of the cherry that was snatched away from us in the 2002 Bill. The decision-making powers that we are proposing to give the schools forums are very different from the powers that were proposed in that Bill. This is important to the noble Lords on the Liberal Benches—in this Bill we are proposing to take away powers that are currently held by the Secretary of State and not elected members. There is no intention to transfer powers from elected members. I will explain that in some detail.

However, I will first turn to Amendment 144A, which would remove the ability of the schools forums to acquire powers which we want to provide them with in order to replace central and local control. As I said, we have no intention of taking powers away from the LEAs. The powers would allow the schools forum to agree to certain types of proposals which themselves come directly from LEAs. These are proposals that would hitherto have had to come from the Secretary of State for approval. We aim to make what is a cumbersome process easier to operate but also allow local decisions to be taken locally.

Amendments 142, 143 and 144 would remove the powers of the Secretary of State to agree to variations in the budget and school funding regulations. I stress that these are existing and important powers. If they were removed, we would either have to devolve existing powers to schools forums or reduce the flexibility of LEAs to adapt regulations to reflect local circumstances. I am sure that neither of those things would meet the approval of the noble Lord.

To backtrack a little, I know that noble Lords on the Liberal Benches were sceptical about the schools forums and I trust that they are open minded enough to recognise that they are growing in capacity and confidence. I will return to the issue of representation later. Certainly, the conferences to which the noble Lord referred have shown that there is a great deal of exchange of best practice and information and there is a general sense that they are coming to terms with and doing the job that they were intended to do.

We propose to extend the powers of the schools forums in only two limited areas and to strengthen local accountability in so doing. The powers will apply to two sets of regulations, the first of which govern the composition of the LEA, schools and individual budgets and the second of which governs the determination of the individual schools' budget shares.

Under existing legislation, the Secretary of State and the National Assembly in Wales must make amending regulations to vary the operation of the budget regulations for an individual LEA. However, Section 47(2)(g) of the School Standards and Framework Act 1998 already allows the Secretary of State and the Assembly to vary the operation of the school funding regulations without the need to lay amending regulations. It is true that those powers have been used sparingly in recent years; however, in the current financial year they have been used to a greater extent and in two key situations, which I shall outline.

5.30 p.m.

Our intention is to streamline the process further so that schools forums can agree to these types of proposals from LEAs, without the need to trek over to the Secretary of State for approval. There are only two types of proposal to which we intend that forums will be able to agree. The first is applications for an extension to the limits placed in regulations on central spending by LEAs—that is, for example, funds spent directly on provisions for SEN or PRUs, rather than delegated to schools. We know that the limit on central items of expenditure in an LEA is necessary to ensure that expenditure does not rise from year to year at a faster rate than do individual school delegated budgets.

That limit was introduced in England in response to the fact that in 2003–04 there were significant increases in LEA central spending at the expense of individual school budgets. We propose to continue to have such limits under the new funding arrangements, as we feel that it is right that schools themselves should receive their fair share of increases in the schools budget. We have debated that, too, at some length this afternoon. But there will sometimes be exceptional circumstances which mean that the limit set for an individual LEA should be higher than the one prescribed in regulations—for example, as a result of the reorganisation of LEA-funded SEN provision.

Currently, applications for a higher limit have to come to the Secretary of State, who, if she agrees, then has to make amending regulations. To date, the great majority of cash applications from LEAs have been supported by the schools forums. We have no evidence that these are areas in which the schools forums and LEAs disagree and fall out. We think that in future— reflecting that fact not least—those should be matters for LEAs and their schools forums to resolve on their own.

The second instance involves variations in the detailed application of the minimum funding guarantee for individual schools, to avoid anomalous budget outcomes. For example, that would apply when, because of the change in circumstances of a school, such as the addition of a special needs facility, which would obviously have a major impact on the budget, making a like-for-like comparison of the school's budget share to calculate its guarantee is not possible. In that case, the new funding for the facility is excluded from the guarantee calculation and then added back to the school's budget share. This ensures that the school gets the full benefit of the guaranteed per pupil increase and the new funding for the facility. Again, we believe that LEAs should be free to make such decisions in future without reference to the Secretary of State, so long as the schools forum agrees. Again, those are areas in which one would expect full resolution between the schools forums and the LEA.

Two benefits come from pursuing this approach. First, it is right for decisions to be made at local level— we all agree about that—by the people who are best placed to judge the impact, and schools forums are well placed. Secondly, by allowing schools forums to agree to these kinds of local variations in national arrangements, we are reducing burdens on LEAs, reducing bureaucracy and reducing time.

To reiterate, it is not the case that we are seeking to introduce powers that we did not succeed in introducing in 2002. There is no power in the Bill to transfer powers which currently sit with elected members in local authorities to schools forums. These are very limited powers, and can be exercised only when an LEA itself puts a proposal to the forum. Schools forums will not be able to initiate the exercise of this power on behalf of the schools forum, and limitations will be placed on what they can agree to, which will mean that we have consistency across all LEAs. We believe, quite sincerely, that that enhances the democratic process.

I turn, very briefly, to Amendments Nos. 142, 143 and 144, which would remove the powers of the Secretary of State to agree to variations. Again, all our evidence is that in the vast majority of cases, a consensus is reached by the LEAs and schools forums about these issues, and there has been and will be no need to intervene. There may be occasional cases in which agreement cannot be reached, but in those cases we do not believe it would be right to give the schools forums a veto over the local authorities' proposals, which would be the effect of the amendment.

There is another knock-on effect: as well as retaining the powers of the Secretary of State to make a decision in the event that agreement cannot be reached between an LEA and a schools forum, we also need to retain those powers to consider requests for a variation to the regulations which fall outside the scope of a schools forum's decision-making powers. In England, for example, that might be agreeing to an LEA delegating funding to schools through a method that is not currently approved in the regulations; or altering, in a more fundamental way than the forum can agree to, the workings of the guarantee to ensure that it reflects local circumstances. So there are difficulties with the amendments, both from the point of view that noble Lords are expressing and in principle.

I turn, finally, to what the noble Lord said about representation and the way in which the schools forums are working. We should congratulate schools forums on undertaking a new role during their operation, and on doing so successfully. Our evidence is that they are working well. The department is doing all that it can to enable sharing of good practice, to enable training and support and to be alert to the need to continue to do so. The membership is not only drawn from head teachers and governors but can include representatives of childcare partnerships, special needs organisations, dioceses and staff associations. Those people bring knowledge and expertise from different aspects, which is all extremely important when considering the issues that schools forums are there to address. They are evolutionary and we hope very much that people will continue to commit their time and energy to them to make them even more successful.

I hope that I have succeeded in giving the sort of detail that the noble Lord was seeking and that on that basis he feels able to withdraw his amendment.

Lord Livsey of Talgarth

I thank the Minister for that reply. A lot of ground has been covered, and there has been a very detailed response. I shall certainly wish to read Hansard and the detail that she has given us this afternoon to evaluate what she has said.

There is an issue about the second bite of the cherry, which we feel should not be given an opportunity. That relates to Amendment No. 144A, concerning the schools forums. We feel, particularly with regard to the Minister's later comments, that there seems to be no enormous confidence in the operation of the schools forums at present; they are finding their way. The Minister was, rightly, happy to relate details of good circumstances on schools forums, when there was a range of representation. However, the uncertainty with which the role of the forums is being addressed at the moment means that it needs to be defined rather more clearly.

With regard to best practice and representation, given the range that is desirable, which the Minister mentioned—indeed, she gave a very good example of the range of people that might be found on a schools forum—I do not quite see why it cannot be laid out in best practice, so that we know the type of people who ought to be on the forum. That would be desirable with regard to the whole issue of special needs. Obviously, we welcome what the Minister has said in that regard, and the provisions that are being made. That is a good example; but the voices of those concerned with special needs need to be found on the forum as well. I am sure that some authorities would need a little push in terms of guidance to ensure that we have a fair balance on the forum.

Having taken account of what the Minister has said, I shall study Hansard. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 143 to 143C not moved.]

Baroness Walmsley moved Amendment No. 143D: Page 137, line 26, at end insert— ( ) in sub-paragraph (b)(i) after "factors or criteria" insert ", including in particular factors and criteria relating to the ages, abilities, aptitudes and needs of pupils at each such school and the provision which may be made to meet such needs,

The noble Baroness said: This amendment was devised to probe the issues concerning schools funding and in particular to propose a model of activity-led funding for both England and Wales. As we know, and as we heard at great length earlier today, the Bill allows for the Government's proposed changes to the way in which schools are funded to take place. Those include all the issues that we debated at great length earlier.

In its report on public expenditure published on 7 January 2005, the Education and Skills Committee said that the changes made by the DfES to the funding system had resulted in the loss of LEAs' ability to make any executive decisions about school funding and would inevitably lead to far greater involvement of the DfES in day-to-day management of the school funding system. The committee argued that the DfES did not understand the problem on which it based its decision to centralise funding. There was no proper evidential base for the view that change was needed and no confidence that the changed system would address any problems. You do not have to agree with every word of the Select Committee's report, but you do have to take note of that level of concern and the level of concern that has been expressed in Committee today.

Paragraph 27 of the Select Committee report states: The decision to change to three year budgets with ring-fenced grants and minimum funding guarantees was taken quite abruptly". I think that there is far too much of that. There has so far been no consultation with local authorities, as mentioned earlier, on the way in which their role is to be changed. A consultation paper is promised very soon, but it will be some time after the Government are committed to this legislation. I think that that is putting the cart before the horse. We have far too much of that with this Government.

According to the LGA, most local authorities continue to pay more into funding their local schools than the amount given them by the Government. The most reassuring thing that I heard earlier from the

noble Lord, Lord Filkin, is that the basis of the new direct schools grant will be the amount currently being spent, at least initially, including the extra money that is coming from the LEAs. I am a little concerned that that will gradually disappear over the years. At least initially, however, I was most reassured that that money will be there.

The NUT and the LGA have briefed us about their concerns that these proposals will significantly reduce local democratic control over school funding, and that has been reflected today by leaders of local authorities in the Committee. Under the proposals, funding will be determined not on an objective basis but on the basis of historic spending patterns, including the extra money that local authorities have until now been putting in. LEAs that have historically spent less than others would be under no pressure to increase spending.

It would be fairer for all schools and children to have an activity-led model of funding. That is the intention behind this amendment. This model determines the basic entitlement of schools to funding by identifying the cost factors involved in the delivery of the national curriculum. An activity-led approach seeks to identify the real costs faced by schools and represents a bottom-up approach to quantifying school funding. The current system, by contrast, is a top-down approach.

The use of pupil numbers as the central determinant for funding can cause problems for schools. Apart from problems related to cost pressures which may not be related to pupil numbers, there is the problem of falling rolls which has also been mentioned today. Between 2004 and 2012, full-time equivalent pupil numbers in England and Wales are expected to fall by half a million. This is a rare opportunity to keep the funding stable and to improve teachers' working conditions and the quality of education—but one which I am afraid is likely to be missed under a system where funding is based on pupil numbers alone. That is why my amendment proposes an activity-led model. I beg to move.

5.45 p.m.

Lord Filkin

I agree with one of the objectives outlined by the noble Baroness, Lady Walmsley: the concern to ensure that the funding which a school receives should reflect the different cost basis that the school experiences, often driven by differences in the age, abilities, aptitude and needs of its pupils. However, we do not believe that this amendment is necessary. Let me try to explain why.

Section 47 of the School Standards and Framework Act makes provision for regulations that specify the factors or criteria to be used by an LEA in calculating the school's budget share. As we know from our previous discussion, the role of the LEA as the distribution decision-maker for the school grant continues. At present, Section 47 enables the Secretary of State or the National Assembly to put into those regulations permission, or a requirement, to use any reasonable factor or criteria. The regulation-making power is drawn widely. In our view, it is therefore not necessary to insert specific factors on to the face of the Act. The regulations are reviewed regularly after consultation with our school and local government partners to reflect current policy and the needs of the school. They already deal with most of the factors listed in the amendment.

In one technical respect the amendment is flawed. It seeks to widen the scope of the regulations to include the provision to be made to meet the needs of pupils, but these regulations are specifically about the calculation of schools' budget shares, as Section 47(1) makes clear. It would be contrary to that for the regulations to say anything about provision, for example, by specifying staff levels or class sizes. Decisions on the use of a school's budget share are a matter for the governing body, subject to the restriction that they must be used for the purposes of the school. We think that it is fundamental that the governing body and the head, working with it, should retain that discretion.

As the noble Baroness signalled, activity-led funding is what the NUT was after on this. I think that it has been after that for a number of years. The regulations do not refer specifically to activity-led funding. If they had, I am sure that the amendment would not have been moved. Activity-led funding is a model that uses an attempt at a detailed assessment of the cost of delivering education to pupils at particular key stages by reference to teacher time and other measurable input costs.

In fact, some authorities have used activity-led funding assessment to revise their funding formula— for example, to check whether their balance of funding between primary and secondary is correct. The age-weighted funding per pupil contained in most authorities' funding formulae is based on assumptions about the relative staffing costs. But as the noble Baroness indicated, those may have a historical basis that may have become distorted over time or not fully reflect the changes in schools.

So, activity-led models can be one of a number of useful tools to assess and challenge the validity of the formulae to allocate resources between schools. There is nothing in the Section 47 regulations to prevent an LEA going down this road, although in doing so it will have to have regard to overall affordability. On the other hand, we see no justification for seeking to impose this method of funding on schools. As I am sure the noble Lord, Lord Hanningfield, and others will agree, the attempt to find universal agreement on the distribution formula between local government or between schools is a bit of a will-o'-the-wisp. We have been debating SSA for many happy decades, but there is never a single right answer. So we think that, consistent with the framework of national guidance, local authorities should have the freedom to make their decision on these issues.

Local authorities should by all means use activity-led models as a mechanism if they think that it is useful as a way of checking the validity of some of the inbuilt assumptions in those distribution practices. However, I do not think that it is helpful for us as the centre or state, or for Parliament, to tell them that they have to use such a method. They should use the method that they think is most sensible, consistent with their statutory obligations. That is why we think that it is not necessary to go this far in this respect.

The noble Baroness made one or two comments about consultation and what the Government are seeking to do. As I think I said, we are not seeking to remove LEA influence over decision-making on school funding. In fact, the local authority is absolutely central. The new dedicated school grant will simply ensure that the increases in central government funding intended for the schools actually reaches them.

As has been signalled—I think the Prime Minister gave an indication in May 2004, and as I indicated earlier—this move is a clear and logical extension of the movement of government policy over time. As regards consultation on the detail, while we have not yet formally published a public consultation paper, but hope to do so shortly, there has been very detailed engagement with local government finance specialists and others in schools about these issues. They are very much involved with them.

There has also been considerable discussion with local government about the changes in role—I have been part of those discussions—that the Bill is making; in other words, affirming the enormous leadership role of local authorities over the totality of the children's agenda of which education is part. I believe that the noble Baroness was a little harsh on us in that respect. but be that as it may. Essentially, local authorities can use such methods if they want to, but it should not be for us to tell them that they must.

Baroness Walmsley

I thank the Minister for his reassurances that my amendment is unnecessary. When my copy of Hansard arrives tomorrow I shall read what he said with great care to confirm that he is quite correct, although I am sure that he is. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 144 to 144A not moved.]

Schedule 16 agreed to.

Clause 99 [LEA targets: England]:

Lord Livsey of Talgarth moved Amendment No. 144B: Page 52, line 30. leave out "educational performance" and insert "educational opportunities to be made available to

The noble Lord said: In moving Amendment No. 144B, I shall speak also to Amendments Nos. 144C and 144D. The emphasis here is to assert educational opportunities rather than to be bogged down with educational performance. Indeed, the amendment seeks to take out the provision to allow LEAs to impose targets on schools. Clause 99 re-enacts provisions in the School Standards and Framework Act 1998 for England because the Children Act has repealed this previous legislation.

The Bill re-enacts the requirement for schools and local education authorities to set challenging annual targets for pupil performance and to submit those to the Secretary of State. The Explanatory Notes state in paragraph 189: This is a continuing power which is needed because the existing requirement contained in regulations relating to education development plans will cease to have effect when the repeals of sections 6 and 7 of SSFA 1998 effected by the Children Act 2004 come into force". However, no pupil targets are set by LEAs in Wales, so why is this needed in England? As a Welsh Peer, I thoroughly approve of the situation in Wales in that regard. Target setting should be a collaborative exercise beginning with the pupil and his or her teacher. From individual pupil-teacher targets, those for teacher-head teacher, head teacher-governing body, governing body-LEA and LEA-government can then follow. Any target-setting exercise should be based on a mature understanding of current achievement and a realistic set of aspirations about what can be achieved in the future. With all their emphasis on personalised learning it is very disappointing that the Government have chosen to reintroduce the top down imposition of LEA level targets.

Amendments Nos. 144B, 144C and 144D will no doubt be criticised as completely unworkable—as, indeed, they would be. But that is exactly what very many head teachers feel about imposed targets. Real achievement by schools and local education authorities is obscured by pointless debates about whether arbitrary government or LEA targets have been achieved. Parents and teachers are better informed of pupils' strengths and weaknesses by teacher assessment. That assessment provides valuable information rather than a simple label that tells no one very much. I beg to move.

Lord Filkin

This is the first of a number of important groups of amendments about targets. Clause 99 maintains the current statutory accountability regime whereby the Secretary of State requires local education authorities, through regulations, to set annual targets for the educational performance of pupils for whom they are responsible and to notify those targets to her for England.

The requirement for LEAs to set targets for pupils' educational performance has provided a powerful stimulus for the improvements in educational standards at both primary and secondary level since 1997. We believe it is essential to include a power in this Bill for local education authorities to set and submit educational targets for the attainment and attendance of pupils in their area. These targets have helped us to deliver the impressive rise in standards that we have seen over the past seven years. Primary schools are now performing better than ever. We have halved the number of schools where fewer than 65 per cent of 11 year-olds achieve level 4 in English or maths and we have doubled the number of schools where more than 80 per cent of pupils achieve level 4.

In addition, over half of all 14 year-olds are now achieving level 6 in maths—above the expected level for their age. London is now the fastest improving region in the country for GCSE results, and maintained schools in London are now performing for the first time above the average for all maintained schools. Such rapid improvement would not have been achieved without the challenge of specific and focused targets related to performance outcomes.

However, I agree with the noble Lord, Lord Livsey, that targets should be a collaborative and bottom up process. I reassure him that what he asserts is not the case. The clause will not change the bottom up process for setting targets that we have now introduced for both schools and local education authorities for the good reasons that he set out. Schools will continue to set their targets first with local education authorities setting their targets after they have had proper debate with the schools in their area on whether they think the targets are sufficiently challenging and ambitious, and whether they are realistic. That is how the process should work. We will not go back to top down target setting, nor will we impose unrealistic or unachievable targets on local education authorities.

We recognise that for targets to have relevance and be a powerful tool for helping to drive school improvement, they must be owned by schools and local education authorities and they must be realistic as well as challenging. However, they must be capable of being challenged; that must be part of the process of setting targets. I hope the Committee understands what I mean by that. Local authorities and government must have the power to ask schools and local authorities respectively whether targets are sufficiently ambitious and clear and whether that is as far as they should be going in that respect; otherwise, there is the danger of complacency setting in within the system and, as a consequence, children will lose out if the relevant school or local authority does not do as much as it could do.

Targets have been a powerful tool for school improvement. Head teacher associations, schools, local government associations and chief education officers have all welcomed the changes we have made to the target setting arrangements over the past year. Therefore, I am delighted to give the reassurance that the noble Lord, Lord Livsey, sought in that respect.

The national targets are ambitious. We make no apology for maintaining our commitment to them. We will not give up on ambitions for children, but that has to be the product of debate between local authorities and their schools, and between central government and a limited number of local authorities where, at least on first look, it seems that there is a question about whether they are being ambitious enough. Our five-year strategy sets out our aims for primary and secondary education. We want the best in the basics of reading, writing and maths for every primary age child.

Amendments Nos. 144C, 144D and 144E would replace the requirement for LEAs to set targets for educational performance with the vaguer notion of opportunities. Of course, we all want children to enjoy a rich mix of opportunities throughout their education. Every Child Matters shows the Government's commitment. Schools should offer an enriched curriculum that stretches and engages the children and prepares them better for adult life. Services and learning should be designed around the needs of the individual child. However, we should not prescribe those opportunities through targets. That should in general be for the local education authority and schools to determine. Therefore, it is slightly surprising to see an amendment that would appear to want to prescribe how they do that—in other words, to specify inputs—rather than focus on the standards of education.

The children and young people's plan will be the strategic, overarching plan for all services for children and young people, which will address the local authorities' wider responsibilities, including how they would provide educational opportunities for all children and young people in their area.

As to why targets are set in England and not in Wales, I am afraid it is the standard answer, on which I would have expected support from the Liberal Democrat Benches. We believe in devolution, and that means that sometimes people will do things differently. I will say no more. I hope that has been helpful.

6 p.m.

Lord Livsey of Talgarth

I was particularly pleased to hear what the Minister said on devolution. It is interesting to observe that two different systems are operating and in the past 18 months the results in Wales have overtaken England. Perhaps this can be achieved in two different ways by two different recipes. We have a probing amendment here on which we want to test the Government. I acknowledge what the Minister said, with his examples on level 4 targets reaching 80 per cent of achievement, which is to be welcomed.

One of the main thrusts of Amendment No. 144B was to look particularly at educational opportunities in relation to the alternative of educational performance. Obviously, there is room for both in the education system. We are particularly concerned about the motivation of children and that they have interest in a variety of subjects, some of them outside the school curriculum, which would motivate them to perform rather better, whereas a prescribed educational performance method would switch off some children.

I am glad to hear the Minister say that it is not totally a top-down situation, and that the LEAs and schools will be involved in the target-setting procedure. We need to examine what the Minister has said, and evaluate it in relation to what I have just said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 144C and 144D not moved.]

Baroness Walmsley moved Amendment No. 145: Page 52, line 38, leave out paragraph (c).

The noble Baroness said: The whole concept of the Secretary of State setting annual targets is questionable in itself, but the provisions of Clause 99(2)(c) are particularly inappropriate. We now have a situation where the Government have agreed that schools will be responsible for setting their own targets at key stage 2, key stage 3, and at other key stages, and that neither the local authority nor the Secretary of State can impose targets on individual schools. The powers set out in Clause 99(2)(c) would enable the Secretary of State unilaterally to amend targets provided by LEAs or require modification in a manner that could bring unacceptable pressure on individual schools, because targets will be used by LEAs to provide an aggregate target for that authority, as just described by the Minister.

We have tabled this amendment because we feel that the imposition of the Secretary of State here is totally inappropriate. I beg to move.

Lord Hanningfield

In moving that Clause 99 does not stand part of the Bill, I will be adding to what the noble Baroness, Lady Walmsley, has just said. Clause 99 enables the Secretary of State to make regulations requiring local authorities to set annual targets in respect of schools. There are a number of pertinent questions as to why the Secretary of State should possess such powers and oppose such targets these days.

The recently changed regulations now require schools to set their own targets on improved pupil performance. Formerly, the LEA played an active "challenge" role in the school target-setting process, and LEAs strove to get schools to set targets that would aggregate up to the LEA target. The approach now is that the LEA would only challenge or intervene where the school has set targets outside the range suggested by its data. With this change of emphasis on the school setting its own targets and becoming far more of an independent entity in its own right, which we all support, why does the Minister believe that such targets are still relevant? I believe in devolution too, and I believe in devolution to local authorities and schools, so this is not the sort of thing in which the Secretary of State, in this day and age, should be involved.

LEA targets were set in a dialogue between LEAs and DfES senior officers. I have spoken to a number of senior LEA officials throughout the country, who have said that there has often been pressure from the DfES to inflate LEA targets. Therefore, in interpreting some of this, we might interpret that the Secretary of State might want to bring back LEA-wide targets: I would not approve of that. The setting of overstretched targets has led to such targets ceasing to be motivating for LEAs and schools. Therefore, I hope that the Minister can give assurances that these targets will be set on a realistic basis to reflect the circumstances of schools in a particular LEA. Can he also assure me that local education authorities will be consulted during the target-setting process? Working in partnership is a far more effective way of achieving things than having unrealistic edicts passed from the Secretary of State down, if the Secretary of State is going to continue to intervene.

With the development of alternative education schemes for 14 to 19 year-olds who are not benefiting from full-time schooling, there is a growing problem that these pupils' achievements are not captured in the data on GCSE/GNVQ. Schools may be providing appropriate schemes for 14 to 16 year-olds but not meeting targets for GCSE. What assurance can the Minister give that this growing trend will not unduly penalise and distort the results and targets that local authorities are expected to meet?

Lord Filkin

To start with, this is not a new power. This does not impose additional burdens either on local education authorities or schools. Clause 99 maintains the current statutory accountability regime, whereby the Secretary of State requires local education authorities, through regulations, to set annual targets for the educational performance of pupils for which they are responsible and to notify those targets to her. In that respect, I do not imagine that there is any debate between us that local authorities should be setting targets for the schools in their area, both in the specific and the aggregate. That is part of the "challenge" function, to be matched hopefully by the "support" function that the local authority will provide. Perhaps the debate is about the role of the Secretary of State rather than the role of the local authority.

The setting of ambitious national targets and the requirement in turn for local authorities and schools to set their own targets has provided a powerful stimulus for improvements in educational standards at both primary and secondary level since 1997. The existing power for local education authorities to set annual targets for the performance of pupils at key stages 2, 3 and 4; for school attendance; and for children leaving public care has been in place since 2000 through the education development plans. The requirement to produce and submit an education development plan has been repealed under Schedule 5, Part 1, to the Children Act 2004 as part of the streamlining of local authorities' planning arrangements. From 2006, there will be a single children and young people's plan, which will not have to be submitted for approval to the Secretary of State.

The Government believe that it is essential to include a power in this Bill so that local education authorities are required to set educational targets for the attainment and attendance of pupils in their area. As I have signalled, that is a fundamental part of the job of a local authority in giving leadership to its schools, both collectively and individually, to raise their ambition to get better results for their children. That is one of the critical and crucial roles of the local authority in adding value to the education system of its area over and above what individual schools do. We have talked about the contribution of school improvement partners as part of that. Therefore, we do not believe for a second that now is the time to sweep away the gains that a stronger system of accountability has delivered. Without being too bureaucratic about it, having accountability expressed in a way that one can measure—

Lord Hanningfield

But the targets may be as obvious as the fact that a school must have a playing field. That is the point that we are trying to make. Whether one is talking about targets or trying to improve performance, that is obvious everywhere in local authorities and, if that is the case, local people should be left to get on with it. The Secretary of State might as well prescribe that a school should have doors. It is accepted that targets are part of the system, but it is far better if they are set at a local level because people there know the circumstances and they know what they are trying to improve.

Lord Hunt of Chesterton

As I understand it, the provision is included in the Bill because, if local authorities are the only ones to set the targets, there will be very large discrepancies across the country. I was a governor of a secondary school in Cambridge and I noticed that, depending on where they came from, the people applying for jobs at the school had totally different concepts of what was required in terms of standards and so on. Unless I have misunderstood, that is partly what the Bill touches on. It seems to me to be a question of having the same standards across the country.

Lord Filkin

I always find two interruptions at once difficult to handle, particularly when they seem to be on different points. Be that as it may, I shall try to address both.

Essentially the noble Lord, Lord Hanningfield, was saying that this issue is so motherhood and apple pie that it is not necessary to have it and therefore we should not bother to include it in the Bill. If he is right in that argument—it is a bold argument—then there should be nothing burdensome about it.

But, of course, the clause goes further than that and that is what we should engage with. It also states that the Secretary of State is given the power to have a dialogue with local authorities about the targets that they have set. On the earlier group of amendments, on which we had a good debate, I signalled that we have moved away from a system whereby the Secretary of State sets targets, which are meant to cascade down in some way, to a system which is fundamentally much better. In the latter, the schools set the targets, the local authority is challenged to discuss them, the authority locks on to those targets and agrees to support them, and then the targets are set.

Therefore, this a question of whether we really believe that, in all circumstances, it is completely and utterly superfluous for the Secretary of State to have a debate with some—it is hoped, very few indeed—local authorities where, from the evidence, it appears to the Secretary of State that it is open to question that the local authority is setting an ambitious enough target for its area, its schools and itself. It is clear that we would be foolish to throw that away.

It is true that, from recollection, in primary schools where this system of bottom-up targets has been in place for about a year the Secretary of State has had such a dialogue with only about 25 local authorities. With regard to the other 125, it has been possible to say, "We have confidence. We leave it to you and we won't have a dialogue".

For many decades, the House has seen the spread of local authority performance into every indicator that one chooses to identify between the good, the bad and the ugly, if I may put it so coarsely. There will always be some local authorities—I hope that there will be only one or two—where, due to a combination of factors, it appears that not enough is being done to accept responsibility under the Acts to raise children's educational attainment. Then, the role of the Secretary of State is not suddenly to set a target saying, "You must do it". It is exactly as the noble Lord, Lord Hanningfield, signalled—to hold a dialogue with the local authority in which the starting point is, "Can we talk to you about whether you are being ambitious enough, given, for example, the attainment of the children in your area in maths or English? Their attainment for their age looks poor in comparison with other local authorities". In such a situation, without any other stimulus, do we leave it completely to the local authority not to have a debate with the Secretary of State? I think that we would be mad to act in that way.

The trick, of course, as the noble Lord, Lord Livsey, said, is to ensure that this bottom-up process is in place and that an intervention by the Secretary of State is limited to where it appears that there is a case for a debate. It should be a debate between the LEA and the school about whether or not they have it right and, as a result, they should be able to move forward. That is essentially what this measure is about and it is included because we have a passion for raising the educational attainment of children in our society.

Fifteen or perhaps even eight years ago, people might have said that we can expect only so much from some children and that they cannot go further. Over the past seven or eight years, what schools, local authorities and the Government have done has been remarkable in breaking down some of the old assumptions about what is possible in the educational attainment of children—particularly those from poor backgrounds, who might traditionally have been written off in our society.

For that reason, while I hope that we do not need to use this power to a great extent, we would be irresponsible as a government if we did not retain the ability to have a debate with a local authority about whether it was being sufficiently ambitious for the children in its area. Therefore, I believe that it is morally, as well as politically, right for us to retain that power. But I assure Members of the Committee that it is right that local authorities should be realistic and that they should not overstretch schools. There is no point in setting heroic and stupid targets that do nothing but discredit, and the local authority must be actively respected as a consultee in the process. The same applies to looked-after children. I think I have said all that I should say at this stage and I hope that that has been helpful.

6.15 p.m.

Lord Hanningfield

From these Benches there is no denying that we believe in targets. We were the ones who first promoted them. But I believe it is time for the Secretary of State to abdicate any involvement in them. I am entering a complicated area, but most local authorities have what is called a public sector agreement. In Essex, it is worth around £25 million. It contains education targets, and every large local authority has education targets set by the Secretary of State. Not one local authority in the whole country, however excellent, will achieve them because the targets are set too high.

I repeat what I said earlier: these days, targets should very much be set by schools and by local education authorities. There are plenty of ways in which local authorities are challenged. At present, they are reviewed by Ofsted and, in future, there will be joint reviews in which they can be challenged. Schools have Ofsted inspections and local authorities have comprehensive performance assessments. That is where the targets should be challenged. Of course, there will be differences between the targets set in Cornwall and Durham or Essex and Lancashire because of the different nature of the schools. Therefore, there will be differences around the country.

I was disappointed to hear the Minister say that he wants the heavy hand of the Secretary of State still to be involved. We all accept that targets should be set, and there are now many more ways to ensure that that happens through all the other processes.

Baroness Walmsley

I was reassured to hear from the Minister that the intervention of the Secretary of State will be what I should perhaps describe as a last resort and that the process will be consultative. But, ultimately, the Bill gives the Secretary of State the power to impose changes on targets that have been agreed between the schools and the LEAs and aggregated together to achieve the LEAs' targets.

I think it is right that it is done in that way. The schools should agree targets which balance the challenging and the achievable. As the noble Lord, Lord Hanningfield, said, there is no point in having unachievable targets; that does not motivate anyone. But if the Government have confidence in the strength of the system in which schools set targets, they are agreed with the LEAs, they challenge the schools but they are achievable, then there really should be no need for the Secretary of State to intervene at all. It suggests that the Government think that the system may well fail.

I agree that there will be differences in different parts of the country. That is only right because the background of children in different parts of the country will be different. But I still believe that the intervention of the Secretary of State is inappropriate if the system described by the Minister is as robust as he says. Does the noble Lord, Lord Dearing, want to intervene?

Lord Dearing

I thank the noble Baroness. I am surprised that that doubt exists. This is the first time that I have risen to give unqualified support to the Government's position. I come from Hull and my title is Lord Dearing of Kingston-upon-Hull. I fear that in my city the aspirations of the local authority are not as high as they should be. For years we have plodded along at the bottom of the league table. It is fair in those circumstances for a Secretary of State to say, if it was justified and if he felt that the aspirations were not there, "Chums, we should aim to do better for the children of this city. Come on, let's discuss this". I hope that there would be agreement to aim for a higher figure.

Let me put that another way. As a nation we must lift our standards as a whole to allow all our children to earn a decent living. The challenge will be increasing and enormous. The Government can say that standards must be raised, but unless there is articulation of what government see as necessary aspirations and the work that the local authority puts into its schools, they will be paddling in the air with no water underneath. For the first time I find myself giving unqualified support to the Government's rationale, provided that a "bottom-up" process will be discussed between reasonable people. If the Government set an unreasonable target, the results will not happen. There must be reasoned thinking. I thank the noble Baroness for inviting me to comment.

Baroness Walmsley

I could see that the noble Lord, Lord Dearing, was itching to intervene. I would agree with him that if the LEAs only were setting the targets, it might be necessary for the Secretary of State to challenge them. But if those targets came from the schools and were aggregated into the local authority targets, it would become much less necessary, because every school that I know wants the best for its children. The teaching force, the assistants and all the non-teaching staff work towards that. We must trust the schools to be able to set challenging but achievable targets. If those elements were put together, the LEAs would provide the context. The Secretary of State should provide the context and the resources for schools to do that. The noble Lord, Lord Sutherland, wishes to challenge me, too.

Lord Sutherland of Houndwood

The noble Baroness is doubly kind to the Cross-Benchers. I must support the line offered by the noble Lord, Lord Dearing, in support of the Government, by sharing my experience of having to declare the first "failing school" in England. In that school there was, effectively, a collusion of ignorance and lack of aspiration between the local authority, the school and those who were responsible for the governance of the school. Such situations are, happily, not common, but in that case the difficulty was not simply in the school; it went right through the system. Other local authorities have been in difficulties since then, but that case seared my experience; we should be cautious before striking the provision from the Bill.

Baroness Walmsley

That is the most powerful argument that has been put against the amendment, and convinces me to withdraw it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Walmsley moved Amendment No. 145AA: Page 53, line 2, at end insert— ( ) provide for reviews, to be carried out at such intervals as may be prescribed, of the effectiveness and suitability of such targets in relation to the National Curriculum and other assessment arrangements for England made under Part 6 of the Education Act 2002 (c. 32)

The noble Baroness said: The amendment seeks to probe the Government further on their position regarding testing and assessment in England—that is, to enable a review of the national curriculum and assessment system, similar to that which took place in Wales.

For many teachers, a number of government initiatives have had a positive effect on professional lives. In primary schools, standards in the core subjects have never been higher and examination results in secondary schools show that many young people are succeeding. The Government in England must properly acknowledge the major developments which have taken place in reforming assessment in Wales, Scotland and Northern Ireland. The review of assessment in Wales, conducted by Professor Richard Daugherty and his team, whereby SATs and targets are being removed, is a model from which the DfES should learn. An independent review of testing and assessment of children in England could be commissioned by the Government and I hope that they will consider that. Such a review should encourage and support assessment for learning and could examine the role of summative assessment.

There is strong evidence in secondary schools that teachers lack time for reflection and professional space for talking with and learning from colleagues. My experience in schools is many years old, but I remember that such was the case, even then. Many young people in years seven and eight believe that the curriculum does not encourage variety, enjoyment and engagement. We all accept that there is an intrinsic relationship between pupil behaviour and inappropriate curriculum.

The national curriculum and assessment system does not facilitate easily the preparation of pupils for adult life in a diverse society and in a global context. Nor does it encourage the meeting of specific needs, such as those of minority ethnic pupils and those from socially and economically deprived backgrounds. The curriculum must provide schools with the confidence to tackle discrimination, including racism, sexism and homophobic bullying.

The current structure of key stages 2 and 3 does not encourage curriculum continuity between primary and secondary schools—a matter of great concern to both primary and secondary school staff—nor is there a recognition in the two key stages of the different ways that primary and secondary schools are organised. In addition, the piecemeal reduction in the number of statutory subject orders for post-14s has not achieved the aim of all young people being offered a broad and balanced curriculum and of tackling effectively the vocational and occupational skills deficit. The plight of modern foreign languages, which was discussed at Question Time today, and technology for post-14s, is an example of the urgency with which the 14 to 19 curriculum has to be tackled.

All such problems indicate the need for a proper curriculum and assessment review, for which the amendment would provide. I beg to move.

Lord Filkin

Although my speaking notes might say "no", I am inclined to say "yes", but with qualifications. Perhaps I may explain that in more detail. In the two previous groups of amendments we debated our stance on targets. I shall not repeat that, given that we each know our positions, even if we cannot persuade each other.

There are 7 million adults in this country who do not have basic literacy and numeracy skills and that type of horrific figure drives us all to believe that we must do better in our system. We are also comforted by, but not complacent about, the fact that schools in the most deprived areas have seen the greatest improvement in performance in recent years.

The amendment seeks to require the Secretary of State to keep under regular review the targets related to national curriculum and other assessments. It is prompted by the decision of the Welsh Assembly to undertake such a review. We remain committed to our system of national testing and the independent Qualifications and Curriculum Authority maintains a comprehensive system to guarantee that the tests are of good quality and reliable. We are always ready to listen to constructive suggestions about the content of the tests.

The Welsh review is an interesting contribution to the debate on assessment. It centred on the educational needs of pupils in Wales, while ensuring that evidence from assessment is available to inform those who need to know about the learning of individuals and groups. At this point, we see no need to replicate that review in England. We will keep performance targets under review and the national targets are reviewed every two years as part of the Government's spending review.

Perhaps I may go a little further, because it is almost a truism of public policy that after a while the performance lift that is obtained from an innovation in terms of method can start to abate—in other words, over time, you obtain diminishing returns from some initiatives. Over and above that, government should constantly ask themselves, "Are there better means to achieve clear ends?".

Clearly, on much of the children's agenda we share a common goal with local government and with schools as regards our aims. Therefore, we have to continue to review—probably more than periodically—and that is fundamental thinking about whether a different system is likely to give us better lift. That is part of what good government means. I do not believe that we require statute to tell us to do that; we should be doing that anyway, as we must always seek a better outcome for what we put into the system.

I can assure the Committee that part of our responsibility is to reflect periodically on whether the curriculum formula and the performance formula systems are the best or whether there is a case for doing more. That is what we should do. Without agreeing that we should legislate for such a matter, I hope that reply is helpful.

6.30 p.m.

Baroness Walmsley

I thank the Minister for that reply. He has stated that reviews may take place regularly anyway, but the link between the targets and rising standards is not reviewed. It is assumed that the rising standards are a result of the targets, as the Minister has said tonight. I do not think it is unreasonable to scrutinise that assumption very carefully. There may be other reasons. Wales, for example, has carried out a review. We have heard from my noble friend Lord Livsey of Talgarth that Wales is not doing better. Does the Minister want to reply?

Lord Filkin

As the noble Baroness knows, I am absolutely clear that the lift in educational attainment in England, which has been remarkable, has, in part, been the product of the challenge and ambition that targets set. It is a fact of life that if one does not have a target, one just administers; whereas a sensible target motivates one to think about what needs to be changed to improve. I am a passionate zealot for targets.

I am with the noble Baroness on what she was signalling; that—without being silly about it and having debating points—one should periodically reflect on root and branch systems. The Bill does exactly that. The new relationship with schools is about getting out from input controls and giving them the freedom of resources; the new inspection framework is about getting out of much of the detail and asking schools, local authorities and Ofsted to challenge whether they can raise attainment. They are explicit illustrations of a new model about how one improves performance and support people to do that. Therefore, as regards the future, we should consider matters broadly and have everything in scope. Without implying that we are about to throw away targets, which we are not, I am with the noble Baroness on that.

Baroness Walmsley

I have to agree with the noble Lord that targets can be very helpful. No one who has been to Weight Watchers would argue with that. However, the part that targets play, along with other factors, has to be considered. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 99 agreed to.

Clause 100 [Removal of requirements for governors'reports and parents' meetings]:

Baroness Walmsley moved Amendment No. 145AB: Page 53, line 22, at end insert— ( ) In section 22 of the Education Act 2002 (c. 32) after paragraph (b) insert— ( ) take such measures as they consider appropriate to promote and encourage the membership of parents of registered pupils of school governing bodies"

The noble Baroness said: We come now to the part of the Bill which removes the requirement on schools to hold parents' meetings and for the governors to produce annual reports. It replaces the annual report with a school profile. Grouped with my amendment is the question whether Clauses 100 and 101 should stand part of the Bill. I support both of those propositions.

I believe that it is vital that parents should be involved as much as possible with schools and that, for many reasons, everything possible should be done to encourage parents to do that. We need the involvement of parents in their children's education; they need to understand the context in which that education is being delivered; they need to know something of their children's day-to-day experience; and they need to know about the curriculum so that they can help at home. We also need parents on governing bodies. If parents do not become interested in schools and do not have regular opportunities to visit schools, they will not be sufficiently interested to become governors.

If we remove the obligation to have an annual meeting, some schools will decide not to hold one and that will lead to problems with accountability of governors. Every corporate body, every charity has to have an annual meeting, providing financial information for the customers and shareholders of a company or donors to a charity. Schools use hundreds of thousands of pounds of public money and it is being suggested that they do not have to hold an annual meeting at which the governors can be held accountable for all that money. I believe that is very wrong.

Despite the fact that I would like to remove Clauses 100 and 101, I thought it would be helpful to table an amendment to ensure that schools have to take such measures as they consider appropriate to promote and to encourage the membership of parents of registered pupils on school governing bodies. As we heard earlier, many parent governors go on to schools forums where their input is needed.

There need to be better opportunities and strategies for the involvement of parents in schools. Some schools find it very hard to recruit sufficient governors of the right, age, gender and ethnic background to reflect the local community. The School Governance (Constitution) (England) Regulations 2003 require one-third of governing bodies to consist of parent governors by 31 August 2006. One of the most effective ways to tackle under-representation is to target parents. Greater parental involvement has all the benefits that I mentioned earlier, including family learning to support community cohesion. What sort of signal does it send out to parents if schools do not have an annual meeting?

There are approximately 350,000 school governor posts in England, which is about 1 percent of the adult population. I gather it is the largest volunteer force in the country. However, at any one time around 12 per cent of governor posts are vacant with some inner-city areas having higher vacancy rates. This is not the time to remove the obligation on a school to have parents in at least once a year.

One of the three roles of the governing body is accountability. One of the main stakeholder groups that it reports to is the parents and it could be argued that parents are the main stakeholder group. Certainly, by the enlargement of the parent group in the new regulations for 2003 on the constitution of governing bodies, the Government have implied that that is their view, but at the same time the accountability to parents is being considerably relaxed. There appears to be a lack of consistency.

There is an expectation that if governing bodies are no longer required to have annual parents' meetings, a very large percentage of governing bodies will not hold them this year, despite the fact that the Minister reminded us last week that this provision would not stop a school holding an annual meeting if it wanted. That would put more pressure on the annual report as the governors' main vehicle of accountability. However, the school profile proposal replaces the governors' annual report.

I have great problems with the proposals about the school profile. I do not believe it is anywhere near as good as the school annual report. It appears to be a box-ticking exercise and, according to the Bill, it is very prescribed by the Secretary of State.

I have received some briefing from the Special Educational Consortium expressing its grave concern about the replacement of annual reports with school profiles. It believes that information about the school's special educational needs policy, information about the school's arrangements for disabled pupils and information that I mentioned earlier about the finances for schools relating to the accountability of the governors is better given in an annual report.

On top of all that, I just cannot see how you can get a feeling for the ethos, the character, the very nature and the soul of the school, if you like, from a pro forma where you have to tick boxes. I do not see how it could work. Therefore, in the interests of being helpful, at least on Clause 100, we have tabled this amendment which we hope the Government might accept; although we are very firmly against Clauses 100 and 101, and I suspect that view will be echoed in various other parts of the Chamber. I beg to move.

Lord Hanningfield

I support everything the noble Baroness, Lady Walmsley, has said. In questioning whether Clause 100 stands part of the Bill, we wish to understand why the Government have decided to abolish both the annual parents' meeting and the governors' report. I wish to talk also to Amendment No. 145A. That is a simple and straightforward new clause that would give each headmaster the discretion to decide whether his or her school should have an annual parents' meeting. I shall talk a little more about that in a moment.

As the Bill currently stands, the obligation to hold such a meeting will be scrapped, as the noble Baroness, Lady Walmsley, said—I shall not repeat many of the arguments, I just want to stress them—as would be the requirement to produce an annual report to parents. Again that would apply only to England. We see that Wales is to continue with both the meeting and the report unless the Assembly decides otherwise.

Will the Minister explain the rationale behind such a step? In particular, what evidence is there that such meetings are not well attended or are not wanted, and, indeed, that the report is not widely read among parents of registered children?

We are not convinced that this is the best step forward, for many of the reasons given by the noble Baroness, Lady Walmsley. Once again, in adopting such an approach as we did with the discussion on Ofsted in not involving governors and parents so much, we risk loosening and separating the bonds between parents and schools. In Committee, we have mentioned many times the important part that parents have to play in the life of a child's school. Such a step as this in the legislation merely erodes that involvement once again. Most parents find that having a parents' meeting is a useful and productive exercise, as it is possibly one of the few opportunities they have to find out what is going on in the school and how everything is progressing.

Although we might be told that schools could do this anyway, our new clause would mean that there would still be meetings, but that the heads would have discretion on whether to hold them. I hope that the Minister may support our amendment. He might say that that may happen anyway, but I should be interested to hear his views.

Lord Sutherland of Houndwood

I speak in support of these amendments for two reasons: first, the set of arguments already given in support of them; but, secondly—a point made earlier in debate from all sides of the Chamber—the Bill seems to be moving in the direction of downgrading the involvement of both parents and governors in how schools are run. There may well be practical problems about organising parents' meetings. I know of one head teacher who, to establish contact with parents, went out to hand the bills through doors and to post them through letterboxes; although she soon found that in certain parts of town you go with an escort before you do that. But that was the determination of the head teacher. I feel this Bill does not support that determination; we are moving away from it.

Had there been alternative proposals for the involvement of parents and governors in the running of schools that strengthened that involvement, perhaps these amendments would not be necessary. But, as the Bill stands, I think that they are.

6.45 p.m.

Lord Livsey of Talgarth

I wish also to support the amendment, in particular on the situation for Wales—and we have clarified the situation as far as concerns devolution. But we have some concerns. Clause 100 demands that the 2002 Act makes the requirement for a governors' report and an annual parents' meeting to apply only in Wales, with, as other noble Lords have said, the Assembly having an order-making power to remove these requirements in due course.

I have consulted a number of communities in Wales on this issue. I was a school governor for some time; I am not at the moment. These proposals are greeted with horror. People want to be involved in their communities. I do not know whether communities are much stronger in Wales, but certainly any prospect of removing the annual parents' meeting and not having a governors' report is treated as plainly unrealistic as far as concerns the cohesiveness of communities and their schools. So this is a matter of some considerable concern. I should have thought that many communities in England have a similar attitude.

Concurrently, I should like clarification in relation to Wales because it is part of the primary legislation. Does the provision in Clause 100(3)(b) mean that the Assembly could adopt the school profiles legislation as a consequence of removing these requirements at some possible date in the future? Given that the Government are rarely silent on anything, will their future position be to continue to urge schools to hold such events? Is there such a commitment or will they discourage them? Presumably saying nothing is certainly not an option in this particular instance.

Lord Hunt of Kings Heath

I hope my noble friend will be prepared to have a look at these amendments, although I am not sure that the amendments that we are debating are necessarily the right way forward. Earlier today we discussed the question of funding for schools and the desirability of giving schools three years' advance budgets as part of the process of giving more responsibility to individual school governing bodies.

My sense is that greater power and authority brings greater accountability. The accountability has to be not only to those who fund the schools—the taxpayers—but also to the parents and the children of individual schools. I think that there is a bit of a problem if parents lose the right to have at least an annual meeting with the governors of that school.

I well understand how we have reached this position. When we debated the question of funding, those of us in favour of the Government's proposals were very happy to quote from the Secondary Heads Association. There is no doubt that the secondary heads have had quite an influence on the drafting of the Bill, but on face-to-face meetings between heads and parents, it is not the Secondary Heads Association that I would turn to for advice. I fear that the Government have listened a little too closely to that august association in this area.

I understand that in many schools these annual meetings are not well attended. That is probably a sign of health, It means that the parents are pretty satisfied with the way the school is being run and that they do not need to turn up to have a go at the governors. But, as noble Lords will know, my own experience is that it is the schools where things are not going well, where you have a weak governing body and a powerful though wrong-headed head teacher, where there can be real problems. I am not suggesting that the annual meeting of the governors with the parents will be a cure-all for solving those problems, but it is a way of at least allowing parents to put their concerns face to face to the governors.

My fear is that if we get rid of this mechanism, there does not seem to be any other way in which parents can require the governors to come and account for their stewardship. For that reason, I do not agree with the amendment of the noble Lord, Lord Hanningfield. He leaves discretion in the hands of the head teacher. The head teacher is the last person who should have discretion on whether to call a meeting of parents.

Perhaps my noble friend may be prepared to reconsider the matter. Would one way of dealing with the problem be for a certain percentage of parents at a school to sign a letter calling for a meeting between them and the governors? In other words, although I accept that, where parents are satisfied, the annual meeting becomes a ritual that no one is interested in attending, there are circumstances in which parents ought to be able to require the governors to account for their responsibilities—where there are real concerns about the running of the school. I do not have an easy answer to how that should be done, but I ask my noble friend to consider the matter and return to it on Report.

Baroness Howe of Idlicote

I know that we are coming to a close, so I shall be very brief, because we have already heard some extremely important points. I am strongly in favour of retaining meetings with parents and governors and of having a real input from parents to the school activities. I want to give two examples that have shown a way to involve parents much more in the future well-being of their children and other children.

The first is the Wales Pre-School Playgroups Association. I have endless examples of diffident young parents who started there who went on to be crucial in the education of their children and other pupils and become much more confident members of society. The other is the Government's own Sure Start programme. That has already shown us how it can bring out the qualities and potential of parents by getting them involved. We must build on that because, once parents have seen the inside of the school and feel that it is friendly towards them, they will be much more part of the scene.

I must disagree with the noble Lord, Lord Hunt, in his assumption that parents do not come because they are satisfied with the school. That is not always true. They could well, truly, not be being encouraged and not feel themselves part of the school. So I hope that we will get some reversion to the original pattern of a really high profile for parents for their meetings both with governors and in the school.

Lord Dearing

I intervene briefly to say that if the Government insist on Clauses 100 and 101, I urge that they accept Amendments Nos. 145AB, 145A—except that it should specify the governing body, rather than the headmaster—145B and 146, which I do not think has been mentioned, in which the governing body, in partnership with the headmaster should, in addition to what the Secretary of State may prescribe, decide the content of the school profile. I ask the Government to think about that.

Lord Taylor of Blackburn

As the chairman of the committee that introduced the Taylor report in the 1970s, which created school governing bodies, I have been reluctant to join in this debate until now. but to do away with an annual general meeting in the way that the Government propose is ridiculous. We need every support to encourage parents to serve on governing bodies. If you do not give them an opportunity to come to an annual meeting and to read an annual report, they will be less interested than ever. I plead with the Government after what has been said from all sides of the House this evening to take the proposal back and think again.

Lord Lucas

I very much agree with those Members of the Committee who want to do away with Clause 100. I mostly ally myself with the noble Lord, Lord Hunt: it is a matter of responsibility and a proper relationship between parents and governors in the school. People may not attend the meeting, but if they want it, it is there. There is a connection and a way to talk.

Indeed, I should like the Government to use Clause 101 to open that door rather wider. I have looked at the current draft of the school profile. It is a deficient document at present. It mentions the name of the chair of governors but gives no means of contacting her, other than through the school. If you have trouble with the headmaster, you want to know how to talk to the governors. It ought to list all the governors; it ought to give a way to contact them that does not come under the headmaster's beady eye.

It is crucial that governors are allowed to play their role in a school and are open and available to contact from parents. It is often extremely difficult for parents to do that, because the only way to find out the information is to disclose to the school the fact that they are talking to the governors. I find that thoroughly difficult and very much hope that, in its final version, this document will remedy that deficiency.

The school profile contains collections of data, such as how well the school's pupils achieved at 14, with a little bar graph, but no space for explanation. So there will be that little graph to show whether they have done well or badly compared to other schools or nationally, but no explanation, no words to provide understanding.

Given all the criticism that has, quite reasonably, come from the Labour Benches over the years about the limitations of league tables, and how much more you need to say about a school to give a reasonable picture of it, it is very disappointing that, here, the Government are sticking to just the figures with no explanation. Well, there is a technical explanation of what they are but no explanation by the school of what lies behind them; nothing to say what subjects are being taught or what rationale lies behind that.

There are technical details, such as how we teach our pupils, which will not really be understood by most parents, but nothing that really speaks to parents directly about how pupils are faring in the school. There is nothing that could be said to be human about it. One of the great virtues of the annual report, when it is written well, is that it gives you a human picture of the school, a feeling of what it is like to be there. That has all been expunged from the school profile. There is nothing current about it. Yes, it will be updated every year, but it is a sort of mission statement tacked on to a few statistics. It is not a bad document in its way, but terribly limited.

It would be nice if there was a standard document— ticking the box at least makes sure that people fill in the various sections—but it should be much better thought out than it is and I want there to be a requirement that it should be on every local authority website. There should be a link to the school profile for every school that it looks after. That way, it will become possible for parents to use that document at a distance.

I also want to pick up on what the Special Educational Consortium has said about disability. There is a little box at the back that contains about five lines of standard wording and then says, effectively, if you want to know about our policy towards pupils with disability, e-mail the school. As the consortium says, that will not do. Parents feel that, by asking such questions, they are putting their child at a disadvantage or putting the school's back up by asking it to do something, becoming a tiresome supplicant of the school, rather than getting something to which they are entitled. That information ought to be readily available, not the subject of some special request of the school.

So, although I approve of Clause 101, it needs to be much better drafted.

7 p.m.

Baroness Andrews

I am very grateful to all Members of the Committee who have spoken in this important and passionate debate—I should expect no less. I shall try to keep my remarks short, because I know that the House is under pressure of other business, but I must take issue with some points. At the same time, I tell all Members of the Committee who have spoken that the Government are listening intently to what is said this evening. I hope that I can give some reassurances and a little extra explanation about why we have taken this route. I hope that it will make sense if I do so.

I could not agree more with the noble Baroness when she said that it is vital for parents to be involved. The noble Lord, Lord Hanningfield, asked me what explanation we can possibly offer for our decision in Clause 100 to get rid of the parents' meeting and substitute other forms of contact. It is precisely because we believe that there are more effective ways to do that and because so much has changed since school annual meetings were introduced in 1986.

To my noble friends, who I know feel passionately about this, I say that accountability is meaningful only if it is owned and supported by those who need to be held accountable and those who hold them accountable. We fear that the annual parents' meeting has not been effective in doing that job.

I shall now deal with some of the evidence and arguments, dealing separately with Wales. We have a great deal of experience to show that participation between parents and schools is not delivered sufficiently through an annual general meeting which involves a very random, and often very small, group of parents. I do not accept the argument that parents' meetings tend to happen only in schools that are doing well; there is fairly random distribution. A great deal depends on the leadership of the school and governors, and the effectiveness of parent teachers' organisations. It is very hard to generalise, so we should be very careful about that.

Most schools, and especially governing bodies, put huge effort into holding meetings and writing the governors' annual report, but our evidence suggests that few parents respond positively. These time-consuming and valuable activities require a lot of resources. The governors' annual report is designed to provide parents with information about the school's performance. Its content is heavily prescribed, detailed, lengthy and time-consuming. Removing the requirement to produce the annual report and introducing the school profile—about which I shall try to reassure the noble Lord, Lord Lucas—is at the heart of what we want to see in the new relationship with schools.

Schools and governing bodies have changed a great deal since 1986, when the annual parents' meeting was introduced by the then Conservative government. The same degree of parental representation did not exist in schools; parents certainly did not have the same rights to express preferences to schools; there were no regular Ofsted reports; no requirements on schools to have a complaints procedure; no home-school agreements; and no public achievement and attainment tables. Things have changed dramatically as regards the amount of information available and the accessibility of that information.

The 1999 Education Select Committee looked into the role of school governors. We pay a great deal of attention to the Select Committee; it is a wise and comprehensive body. Its report recommended the abolition of the parents' meeting, suggesting that governing bodies should find alternative ways—I shall come to Amendment No. 145AB on this point—of promoting good relationships with parents. Over the past 10 years many different ways of bringing parents into schools have been found. I have an inch-thick bundle of evidence about the different methods, such as out-of-school activities and various partnerships related to family learning, to which the noble Baroness pointed. We have moved on a great deal. I know from experience that such contacts generate the commitment that parents develop towards schools. Their commitment develops not from an annual meeting, which may last an hour and have no lasting impact, but from the regular, familiar contact between schools and parents daily. Of course we will want to encourage good practice. When I say that we are listening, we are listening particularly to those sorts of ideas about how best we do that.

When we talk about trust with parents, we send out a very powerful message. We believe in all seriousness that the annual parents' meeting is not sufficient, given the changes since 1986, given our other methods of contacting parents and the changes that we want to bring about in the school profile and the whole way in which schools communicate with parents. On Amendment No. 145A, I reiterate that there is nothing to stop schools holding an annual, six-monthly or three-monthly meeting with parents, if that is their commitment to parents. Many already go far beyond an annual meeting.

I have listened carefully to what my noble friend has said about governors. On the profile, we recognise that if you give schools increased freedoms, there are increased risks, and we must safeguard parents' rights to information. The best evidence of what we want to achieve through the profiles is the fact that they are being trialled. Last year we held a three-month national consultation on the profile. Of the respondents, 81 per cent of primary schools and 82 per cent of secondary schools welcomed the profile. Seventy five per cent of respondents thought that the profile should replace the governors' annual report.

The profile will not be a box-tick mechanism. Formulated information will be provided centrally because that will make it much easier for schools, which will not have to spend time putting together all the statistics. But there will be a narrative about the school, talking about its ethos, its expectations for its students and much more. All the key information will be engagingly written, short, accessible, readable and available in a range of languages. We are trialling the profile at 90 schools. That is why we think we will be on sure ground. However, we will continue to evaluate the proposal as it goes through; in fact, we are still waiting for feedback. We hope to introduce the school profile in the academic year 2005–06.

The noble Lord made a very important point about SEN and disability. He will know that it has always been a statutory requirement to include that in the governors' report. Now it will be in the school prospectus in the same form, under the same requirement. Nothing will be lost as regards the quantity or quality of information. I can enlarge on that when we debate the next set of amendments after the dinner break.

Clause 100 retains the requirements for a governors' annual report and annual parents' meeting in relation to governing bodies in Wales, but it provides the National Assembly for Wales with the power to remove the requirements by order at a later date. Clause 101 does not apply to Wales. In Wales the situation is different—that is becoming a mantra. Already the governing bodies can produce a summary report that is significantly shorter, so the Welsh Assembly Government do not believe that school profiles are needed in Wales.

The Welsh Assembly Government consulted in early 2004 on proposals to reduce the need for governors to hold an annual meeting. Half of the respondents supported this proposal. The National Assembly for Wales proposes to make regulations under the Education Act 2002 giving provision for exemptions to the general requirement, but it wants to assess the impact of the proposal before it makes the next move. It can then determine whether to consult on proposals to abolish the requirement altogether. The situation in Wales is different but it is dynamic.

I have gone very quickly through the arguments in response to what Members of the Committee have said. I thank noble Lords for their remarks. We will continue to listen. We will have the opportunity to debate school profiles in more detail on the next set of amendments.

Lord Elton

The noble Baroness said a great deal about how governors will be able to communicate with parents but almost nothing about how parents will be able to communicate with governors. Do I understand from her reference that she is asking us to take comfort from the fact that parents can call a meeting if they are unhappy about what is going on? Does the noble Baroness really think that it is satisfactory to wait until there is a head of displeasure among parents sufficient to call such a meeting in place of one that takes place regularly?

Baroness Andrews

No, we would expect schools not to wait until such a point but to be on the alert for what parents felt and to ensure that their governors were involved. A great deal has been said in this short debate about governors. I reiterate that we are listening closely to what has been said.

Baroness Byford

Having listened very carefully to the debate, perhaps I may ask the noble Baroness a question before she responds. She says that the annual report is not sufficient or not working well. Is that really a good reason to throw it out? The noble Baroness said clearly that there were other ways of doing things, but surely it would be very sensible to maintain the provision in the Bill rather than get rid of it, until the new ways have established themselves. I should have thought that you could have the best of both worlds. I do not think that the noble Baroness quite responded to the reality. I should have thought that the Government would want to ensure that the annual reports and annual parents' meetings work in addition to the new ways that they seek of encouraging more participation between parents and schools.

Baroness Andrews

We are searching for new and better ways. The annual report, a very long document, has presented schools and parents with problems in the past. We do not want to throw it out without thinking very hard about what the school profile might achieve. However, as I said, we are listening hard. The Committee has made clear its views on the importance of parents in the school relationship and the importance of finding better ways of communicating with them. We are listening.

Lord Lucas

Throwing out something that is okay but could be better before we know what will be better is the wrong way to go about this. It is terribly important that we keep that line of accountability and, as my noble friend said, that we keep that accessibility for parents to the governors. There must be a way for parents, without having to appear pushy or tiresome, to talk to and deal with the governors. Once a year is little enough.

On my calculations, this House is in control of the matter. I think that the Bill will get caught up in the wash-up before the election, if it is when we expect it to be. We are therefore in a position to wipe this clause out without fear or favour. I hope that we will use the time to arrive at something better because the Government are being helpful. We need not live with the clause if we do not want to.

Baroness Walmsley

I thank the Minister for going so quickly through so much information. I agreed with some of the things that she said but disagreed with others.

I agreed with the Minister that an annual parents' meeting was not enough. If the only way in which schools met the need was through an annual meeting, that would be very deficient. However, taking away the obligation to have the meeting does not mean that they do not have to go through all those effective ways of getting in contact with parents.

It has been said that not many people attend the meetings. Annual general meetings of companies and charities often do not attract many people, unless something contentious is being discussed. That does not mean that such meetings should not happen; they are an obligation, and they are a matter of accountability. The same thing should apply to schools that are using hundreds of thousands of pounds of public money.

I turn to the school profiles. The Minister said that information about disability policy, SEN policy, and so on could be put in the school prospectus. The prospectus does not go to every parent; they have to ask for it. The governors' annual report is the only document that is sent to all parents, without their having to ask for it. As, I think, the noble Lord, Lord Lucas, said, some parents might be reluctant to ask for the information about SEN policy or disability, for fear that their child might be victimised. That is surely an unfounded fear, but they may feel it. For that reason, it is important that every parent gets an annual report. It may be long and detailed, but, if it has a summary and a sensible contents page, it can still be a very useful document, even for a parent who does not have a lot of time to read every item in it.

The Minister said that the profiles were being trialled. Why put the cart before the horse and take away the obligation to produce an annual report, before we know that the profiles are better? We do not know that the profiles are better, and many noble Lords have expressed extreme reservations about them.

The Government would be wise to think carefully about the two clauses. I hope that the Ministers—the noble Lord and the noble Baroness—will listen to the concerns that have been expressed this evening. I do not intend to press the matters tonight, but we have a lot of support in the Committee and we may come back to this on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 100 agreed to.

The Deputy Chairman of Committees (Lord Lyell)

Is the noble Lord, Lord Hanningfield, going to speak to Amendment No. 145A? It is part of the same group.

Lord Hanningfield

I am.

The Deputy Chairman of Committees

If the noble Lord wants to speak to the amendment, it might be convenient if we stopped now.

Lord Hanningfield

I wish to speak to Amendment No. 145A. Given the strength of feeling, I wish to test the opinion of the Committee.

The Deputy Chairman of Committees

We have not come to it yet.

Lord Hanningfield

I thought that the noble Lord was going to call it.

The Deputy Chairman of Committees

No.

Lord Filkin

This may be an appropriate time to move that the House do now resume for the Statement and the prayer. In moving the Motion, I suggest that the Committee stage of the Education Bill begin immediately following the conclusion of the prayer to annul the Fire and Rescue Services (National Framework) (England) Order 2004 but not before 8.15 p.m.

Moved accordingly and, on Question, Motion agreed to.

House resumed.