The Secretary of State for the Home Department (Mr. Hurd) : With permission, Mr. Speaker, I wish to make a statement about our plans for charities legislation. I have laid a White Paper before the House today.
It is about 30 years since the last major charities legislation. Since then the charitable world has seen substantial changes. The number of charities has grown enormously--with a corresponding increase in the funds flowing through them. That is welcome news. The part which charities and the voluntary sector play in meeting genuine need at home and abroad is increasingly impressive and important. But that expansion makes safeguards essential. My right hon. Friend the Chancellor of the Exchequer and I jointly commissioned in 1987 an efficiency scrutiny of the supervision of charities. The scrutiny team, led by Sir Philip Woodfield, submitted its report in June that year. We welcomed the report. The White Paper now sets out how we propose to implement it.
We have also taken the opportunity to raise some fundamental issues relating to charitable status. They are difficult and we invite views on them.
The White Paper concerns England and Wales. My right hon. and learned Friend the Secretary of State for Scotland will be putting forward separate proposals. We shall be considering to what extent the changes proposed in the White Paper should be extended to Northern Ireland.
Our aim has been to strike a balance between freedom and control. Charities should be able to go about their business without unreasonable interference but within a framework which ensures that they are properly accountable to the public.
At the core of the White Paper are proposals to give the commissioners new powers in dealing with mismanagement and abuse. For example, there will be a new power for the commission--in the last resort--to transfer a charity's assets to another charity. To enable the commissioners to concentrate on their new priorities we are proposing that the commission should be relieved of some of its present statutory duties. For example, we propose to relieve the official custodian of his responsibilities for administering charity investments, and we are also proposing that the commission should largely withdraw from its present responsibility for overseeing many charity land transactions.
Other major reforms are necessary to enable the commission to monitor charities adequately. It needs more information, and in particular financial information, about charities. In future all registered charities will have to submit fuller accounts to the commission each year. Accounts of all but the smallest charities will need to be professionally audited or independently examined. The commission's register of charities has been criticised as out of date and of limited use. An accurate, up-to-date and accessible data base is needed in which the public can have confidence and which the commission can use as its basic supervisory tool. The White Paper provides for that.
Column 168The Charities Act 1985 has improved the effectiveness of small charities. We believe that it would be right to build on the experience which has been gained by extending its effectiveness. We have consulted widely on the reform of the law relating to fund-raising. We are proposing measures to clarify and simplify the present law on public collections and to deal with malpractice. We look to voluntary efforts to regulate the newer means of charitable appeal, such as telethons, but we propose to take powers to regulate these forms of appeal should this become necessary in future. We believe that charities should make some contribution towards the Charity Commission's costs--now over £7 million a year. So we propose a registration fee of £25, and graduated charges for some other services. Small charities will continue to receive the commission's services free. We reckon that some 90 per cent. of the commission's costs will continue to be borne by the Exchequer.
The commission has already acted to carry out the recommendations of Sir Philip Woodfield which do not require legislation. It has improved its management and the efficiency of its procedures ; it has developed its capacity to monitor and deal with abuse ; and it is preparing the ground for computerisation. Those changes will fit the commission for the active exercise of the new powers that we propose, and I believe that the result will be a better service to public and charities alike.
The cost of the commission is only a small part of the Government's contribution to charities, and to the voluntary sector more generally. The proposals that we are putting forward will help to provide a framework within which the health and integrity of charities can be assured. Our duties in respect of grants to individual organisations go beyond this. Our immediate concern must be to ensure, on behalf of the taxpayer, that we get value for money and effective services in return. It is for that reason that I have today announced, in response to a written parliamentary question from my hon. Friend the Member for Daventry (Mr. Boswell) plans for a scrutiny of Government funding of the voluntary sector.
We shall take careful note of views expressed on the White Paper, both inside and outside the House. We hope then to bring forward legislation.
We are uncertain about whether paragraph 5 of the White Paper goes far enough in dealing with abuse. Will the Charity Commission have all the powers that it needs to root out abuse? Have all the recommendations of the Woodfield report on the matter been included in the White Paper? If not, why not?
Paragraph 2.4 appears to leave open the question whether there will be changes in the legal meaning of charitable status. Will the Home Secretary say a little more about his feelings on that vital and central matter? Why have the Government decided to introduce charging for registration? Does not the Home Secretary accept that many very small charities might encounter financial difficulty with those proposals? Does he agree that charities would not receive services from the commission for those fees and that the real purpose of registration is merely legal recognition? Are not the Government being rather mean in making the proposals? Is it not the thin end of the charging wedge?
Column 169Does the Home Secretary feel that the White Paper goes far enough beyond the Charities Act 1985 in encouraging the large number of very small and ineffective charities to merge or to amalgamate? Does he agree that rationalising the existing registration structure is still long overdue?
We welcome the proposal to allow the Charity Commission direct access to the courts for the first time instead of having to work through the Attorney-General. Will the Home Secretary tell the House how the relationship between the Attorney-General and the Charity Commission will work in practice?
Does the Home Secretary agree that if the commission is to be effective in tackling many of the unacceptable shortcomings in its organisation which were presented in the Woodfield report it will need resources? Will he assure the House that all the resources needed by the commission to modernise its organisation, including the means for regionalisation, will be made available?
Mr. Hurd : I am grateful to the hon. Gentleman, and will try to deal with his questions. His first point dealt with abuse. Chapter 5 of the White Paper sets out specific ways in which we believe that the powers of the Charity Commission could be strengthened, but there is a further and perhaps more substantial factor. It is not always understood that under the existing law the commissioners have the power to remove a body from the register of charities if there is evidence that it is pursuing its objectives in ways that are not to the public benefit. That is an important safeguard, and I believe that there is a strong case for clarifying it in law.
The hon. Gentleman talked about the legal definition of a charity, which is dealt with in chapter 2 of the White Paper. We have come to the tentative conclusion that the common law definition--the M'Naghten definition--is probably as good as any that could be worked out in statute, but the House and experts on the matter will no doubt wish to consider that conclusion.
If the hon. Gentleman examines the carefully regulated proposals for charging, I do not think that he will find that any charity, however small, could conceivably suffer financial hardship as a result of them. Yes, I believe that the 1985 Act deals adequately with the point about small charities.
We shall need to work out the exact procedures for the commission's direct access to the courts. If the hon. Gentleman wishes to pursue that point, I will gladly write to him.
Yes, the Charity Commission will need to strengthen its effort. A major part of the White Paper's purpose is to relieve the commission of a number of rather fiddling duties which are actually already the responsibility of the trustees of individual charities--I mentioned land transactions, for instance--so that it can deploy its resources for the important purpose of monitoring and investigation. That is already happening, in fact. The chief commissioner tells me that the commission has raised from 14 to 38 the number of people in the commission now engaged on that central task.
Column 170in mind that this takes place on average once a generation, his apparent readiness to continue consultations widely until the very moment of the legislation is most welcome.
Will my right hon. Friend take into account one or two points of concern? The first relates to charging for the services of the Charity Commission. I accept that in principle, but will my right hon. Friend confirm that arrangements will be made in practice to ensure that the revenue is additional to that obtained by grant in aid so that the commissioners may use it, for example, for the promotion of development schemes and local reviews?
My second question relates to the linked issue of the review of funding of voluntary bodies. Will my right hon. Friend confirm that it is designed to secure more value for money rather than a reduction in the total amount paid to such bodies?
I understand that the White Paper contains no proposals relating to the Inland Revenue. Does my right hon. Friend accept that in the long run it must make sense to move towards a system whereby the registration of charities by the commission, and their acceptance of charitable status, is in parallel with and identical to their treatment by the Inland Revenue?
Mr. Hurd : I am grateful to my hon. Friend. He is right to stress the importance of the charitable sector, whose turnover is now £13 billion a year. A new charity comes to the commission for registration about every half hour of every working day ; that is the scale of it.
I cannot give my hon. Friend the exact assurance for which he asks on charges. Charges will contribute about 10 per cent.--about £750, 000-- a year and will clearly add to the strength and effectiveness of the commission. My hon. Friend also raised the question of the Government's contributions to the voluntary sector. Our aim is to ensure that the taxpayer, whom we represent, receives value for money. The Government contribution is now running at £293 million a year. If we add in all public sector contributions to the voluntary sector, the figure is £2 billion a year, but £293 million is a big enough sum. We need to look closely at the way in which choices are made and the criteria that are used.
I did not deal with taxation issues, but my hon. Friend knows about the closer relationship that has developed in recent years between the Inland Revenue and the Charity Commission. Nothing in the proposals will impede that.
Mr. Robert Maclennan (Caithness and Sutherland) : Does the Home Secretary propose to legislate to alter the rules and laws governing the right of charities to advertise and to broadcast direct appeals for funds, especially in view of the extensive use of telethons for fund-raising?
On the regulation of collections, does the Home Secretary accept that it would be undesirable that charities should have to accept more stringent control than other forms of collection? Does he intend to deal with that?
Mr. Hurd : My answer to the hon. Gentleman's first point is that we have no intention of dealing with that. Chapter 10 of the White Paper deals at length with the problem of fund-raising. The hon. Gentleman will know that there has been some concern about possible abuses of fund-raising. We propose certain changes, such as that all funds collected should be passed to the charity in whose name they have been collected and that there should be discussion about administrative expenses after that rather than deductions being made before the money has been
Column 171passed to the charity. Chapter 10 contains one or two similar suggestions, but we are open to comments. I do not want to introduce unreasonable, extra regulations for charitable fund-raising, but there has been concern about it. If, when he looks at chapter 10, the hon. Gentleman feels that we have gone too far, or that we have not gone far enough, I am sure that he will let me know.
Dame Janet Fookes (Plymouth, Drake) : What assurance can my right hon. Friend give us about adequate staffing for the Charity Commission? When the old Expenditure Committee looked at charity law, it found that there was not a single accountant to scrutinise accounts at that time.
Mr. Hurd : It is precisely those initial critical reports which led to the Woodfield scrutiny, which, in turn, led to the White Paper. The Woodfield scrutiny found that the Charity Commission was so bogged down in a number of relatively trivial duties imposed on it by statute that it was unable to do the job of monitoring and investigating, which was at the heart of its duty. That is why, without legislation, the Charity Commission has shifted its priorities and I gave the figures for those engaged in monitoring and investigation compared to the past. The commission understands the importance of accountancy and it employs members of that profession, as well as having access to the talents and activities of accountants whom it does not employ directly.
Mr. Robert Hughes (Aberdeen, North) : As the chairman of a small but important charity, the Bishop Ambrose Reeves Trust, I want to ask the Home Secretary about definition. Will he confirm that the future definition will be broadly the same as the present one, and that there will be no redrafting to exclude charities already accepted by the Charity Commission?
Mr. Hurd : If the hon. Gentleman looks at chapter 2, on which we spent a great deal of effort, he will see an analysis of definitions, beginning with 1601 and going on to Lord M'Naghten's definition of the four main heads of charity in 1891. We are inclined to believe that the hon. Gentleman is right and that it is better to rest on that than to try to devise some new statutory definition. It is a matter on which there are differing views and we have set out our provisional conclusion.
Mr. Jack Ashley (Stoke-on-Trent, South) : The Home Secretary has used the phrase "value for money", which is understandable, but will he assure the House that none of the proposals will bring undue pressure, financial or otherwise, to bear on the small charities, especially on those that help disabled people?
Mr. Hurd : When I used the phrase "value for money", I was talking about the £293 million that central Government give in different forms each year to the voluntary sector. That will be subject to the scrutiny that I announced in reply to a question from my hon. Friend the Member for Daventry (Mr. Boswell). Value for money for charities is a wider question and, although it does not involve value for money for the taxpayer in most cases, I can assure the right hon. Gentleman that nothing in the proposals will bear heavily on the smaller charities. Indeed, the existence of a good up-to-date register and of
Column 172proper safeguards against abuse will help to build up the general health of the charitable sector, including the small charities.
Sir Charles Morrison (Devizes) : Is my right hon. Friend aware that if he were to step out of the corridors of power into the highways and byways he would discover that the taxpayer believes that he already receives good value for money from what he provides already to charities? Is he aware that, when my right hon. Friend introduces his welcome proposals to reduce abuse still further, the taxpayer will feel even happier without the necessity of the introduction of a charge which will upset the taxpayer as much as it will upset many small and medium-sized charities?
Mr. Hurd : The charging arrangements serve to provide a total of £750,000. This is a worthwhile exercise which will not bear hardly on the smaller charities as my hon. Friend will see if he looks at the proposed charges. Indeed, it will involve them usefully in the process. The £293 million that the taxpayer contributes direct to the voluntary sector is increasingly important. More and more we in the Home Office find activities that are performed best by the voluntary sector--indeed, better than they would be performed under a statutory scheme. However, we must ensure, both as regards our own voluntary service unit in the Home Office and more widely across central Government, that there are reasonable criteria and standards by which the money is expended. That is the purpose of the scrutiny.
Sir David Price (Eastleigh) : Is my right hon. Friend standing on the answer that he gave both to the hon. Member for Kingston upon Hull, West (Mr. Randall) and to the hon. Member for Aberdeen, North (Mr. Hughes) that he is satisfied with the current legal definition of "charities"? Is he aware that many of us feel that the definition is drawn far too wide and that we all have evidence from our personal experiences of organisations, often of a dubious religious nature, which enjoy charitable status, but which many of us feel should not enjoy the tax advantages that genuine charities certainly should enjoy?
Mr. Hurd : My hon. Friend's objections probably do not arise so much from the professed objects of the charity as from the way in which they carry on their activities and from what they do. That is why it is important that the law should make it clear that the commissioners have the power to remove a body from the register where there is evidence that it is acting in pursuit of its objects in ways that are not for the public benefit. If we can make that clear and strengthen that power, as we propose in chapter 5, we have a hope of meeting my hon. Friend's point.
Mr. Eddie Loyden (Liverpool, Garston) : Does the Home Secretary agree that the definition of "political activities" can differ widely depending on the way in which one wants to interpret the activities of certain charities? Will he give an assurance that those charitable organisations that "campaign" against certain activities of the Government, such as, from time to time, the citizens advice bureaux, will not be affected by any legislation to be proposed by the Government?
"governing instruments should not include a power to exert political pressure except in a way which is ancillary to a charitable purpose ;
--the powers and purposes of a charity should not include the power to bring pressure to bear on the Government to adopt, to alter, or to maintain a particular line of action, although charities may present reasoned argument and information to Government ;
--where the objects of a charity include the advancement of education or the power to conduct research, care must be taken to ensure that both objectivity and balance is maintained and that propaganda is avoided."
That is the Charity Commission's existing guidance, and it appears to meet the case.
Mr. Ivan Lawrence (Burton) : Is my right hon. Friend aware that his proposals will be especially welcome to all genuine charities in this country because, if there is greater public confidence that all the money given to charities will go to charitable ends and that the charities are properly run, obviously, in our affluent society more people will give? However, I am not sure about the effect of my right hon. Friend's answer to my hon. Friend the Member for Eastleigh (Sir D. Price). Can my right hon. Friend assure the House that action against charities whose activities are against the public interest, because they are anti-social or oppressive, will be easier to take than it has been hitherto?
Mr. Hurd : The powers exist, but I do not believe that they are widely recognised, which is why we put stress on them in the White Paper. We also propose to strengthen them. My hon. and learned Friend will find that in paragraph 5.11 especially of the White Paper we propose those powers which bear, as he knows, on what registered charities actually do rather than attempting to redefine the definition of a charity.
Mr. D. N. Campbell-Savours (Workington) : Is the Home Secretary satisfied that the arrangements that he wishes to introduce will deal with the widespread failure of many charities nationally to present accounts to the Charity Commission, as identified in the reports of the Public Accounts Committee and the National Audit Office, and the Charity Commission's failure to examine the accounts of 96 per cent. of charities in a particular year at which the National Audit Office looked? Will the right hon. Gentleman assure us that all charities will be required to submit their returns annually and that, if they fail to do so, they will be subject to penalty? Will he also assure us that the Charity Commission will have the resources to examine the accounts of a far greater proportion of charities than is currently the position?
Mr. Hurd : As a result of the work mentioned by the hon. Gentleman, and in which he probably participated, and the Woodfield scrutiny, it is proposed in the White Paper, and it will be an obligation under the law, that registrable charities should make an annual return of their accounts to the Charity Commission, and in the case of all but the smallest those should be audited. I have already given the numbers and how they are employed, which show that in advance of legislation the Charity Commission is shifting its resources to deal with those accounts.
Mr. Ian Gow (Eastbourne) : Did my right hon. Friend share my sense of shame when he read the report of the Comptroller and Auditor General and the Public Accounts Committee about the Charity Commission? Does he understand that, welcome and long overdue though these reforms are, they will amount to nothing unless my right hon. Friend is able at once to instil into the Charity Commission that level of competence and efficiency that has been so grievously lacking for far too long?
Mr. Hurd : I believe that that is already happening. If my hon. Friend went alongside the present Charity Commission--on behalf of the commission I warmly invite him to do so--he would find already a substantial change of the kind that he has advocated. Obviously it is limited in what it can do in advance of legislation, because the Charities Act 1960 to some extent imposed upon the commission a method of working and a choice of duties which are really not sensible in 1989, and probably my hon. Friend was right when he said that they have not been sensible for some years.
Mr. Tam Dalyell (Linlithgow) : As one who called for the reform of charities during several Finance Bills, may I defend the Charity Commissioners, who have an extremely complex job to do? I welcome the fact that the Home Secretary has introduced this White Paper and the manner in which he has put the proposals before the House. With regard to Scotland and paragraph 11.4, what investigation of abuse has taken place? I imagine that it is the same in Scotland as in England. What has the Home Office found to be the major cause of this most worrying abuse?
With regard to paragraph 4.11 and the question of malpractice what appropriate publicity will be given to default markings and how will that be arrived at?
The Home Secretary referred to charity land transactions, but will that cover the thorny problem of inalienability? Is inalienability to be respected in relation to land transactions?
The Home Secretary referred to acting not to the public benefit, but how is the public benefit to be defined?
With regard to paragraph 4.12, how will assets be assessed? It is easy to load logical schemes on charities, but given that they have limited resources, will not they be overwhelmed by the sheer difficulty of working out proposals, particularly on the estimation of assets as outlined in paragraph 4.12?
Mr. Hurd : I am grateful to the hon. Gentleman, but I do not intend to venture into Scotland, which has a different system without a Charity Commission. As I have said, my right hon. and learned Friend the Secretary of State for Scotland will be making his proposals on that known fairly shortly.
I cannot add to what the hon. Gentleman has already spotted in paragraph 4.11. Default markings are clearly intended to give publicity to a failure on the part of the trustees and we shall have to work out in greater detail what form that publicity takes. Land transactions are meant not to touch on the question of alienability or inalienability, but simply to withdraw from the Charity Commission the duties which it has now and which to a large extent duplicate the trustees' present duties.
Column 175I did not haul on board the hon. Gentleman's final point about paragraph 4.12, but I will, and I shall write to him on it.
Mr. Michael Morris (Northampton, South) : Is my right hon. Friend aware that one of the difficult areas in religious charities is created by the so-called cults, not so much because of their religious activities as such, but because of the way in which they impinge on society, families and individuals? I have not had the opportunity to see the White Paper, but is it his intention, under chapter 5, to address the rights of individuals and families within those organisations and how they may, in effect, escape from them?
Mr. Hurd : My hon. Friend puts that fairly. This matter has a long rather unhappy history. As he says, it is not so much the aim of a body that is called into question--it is difficult to argue about or define aims in statutes--but rather the way in which such organisations treat individuals. It is their activities in pursuit of the objectives that they define that is offensive to many people, and that is what we must concentrate on. The law already gives the commissioners stronger powers than most people realise to remove a body from the register if its activities are not for the public benefit, and we propose in chapter 5 to strengthen that in a number of ways.
Mr. Dennis Skinner (Bolsover) : Does the Home Secretary recall the discovery about 12 months ago of the river companies that were laundering money to the Tory party? Under the proposals contained in the new report, will they be able to launder that money to the Tory party, disguised as charities? Has he noticed that the first recommendation says that the Chief Charity Commissioner should appoint a project officer? There is a charity in here that needs a job, a national charity--the leader of the SDP. Is he going to show some charity? Here is a man who appeals to everyone. He should think about it.
Mr. Hurd : I have no recollection of the first point about which the hon. Gentleman tries to remind me. I am not sure whether the right hon. Member for Plymouth, Devonport (Dr. Owen) has quite the necessary element of charity in his own nature to make him suitable for the appointment.
Mr. Roger Gale (Thanet, North) : My right hon. Friend obviously recognises the genuine contribution made to charity by many religious organisations. Will he assure the House that he intends that the full weight of the law should now be brought, as it has not been previously, against quasi-religious and bogus cults which use charitable status as a tax haven and are nothing more than a front for international fraud?
Mr. Hurd : My hon. Friend will remember the statement that my right hon. and learned Friend the Attorney-General made about a particular case not long ago. I shall return to the central point of this issue ; my hon. Friend was right about the concern that it arouses. We are talking about the activities of certain bodies which may have got on the charitable register. What we need to make clear and strengthen, as the White Paper proposals do, are the
Column 176commissioners' power to remove an organisation from the register if it pursues its objectives in ways which do not benefit the public.
Mr. Alex Carlile (Montgomery) : While it is reassuring to hear what the right hon. Gentleman said about the deregulation of cults that act against the public interest, does he recognise that, once registered, a cult can remain on the register for a considerable period, sometimes years, while it goes through a pyramid of legal procedures? Therefore, will he give the Charity Commission powers to examine and regulate religious charities before they are registered to ensure that they act in the public interest from the moment of registration?
Mr. Hurd : That is the purpose of registration. Due to the shift in its priorities, the Charity Commission will be increasingly able to monitor and investigate at an earlier stage. I shall look into the point made by the hon. and learned Gentleman about enforcement procedures because that is important.
Mr. Michael Latham (Rutland and Melton) : Is my right hon. Friend aware that those of us who served on the Public Accounts Committee for some years thought that the inquiry into the Charity Commission came to some of the most woeful findings that we have seen, which is saying something? The commission was extraordinarily complacent and passive, and needed a jolly good boot up the backside. Is my right hon. Friend satisfied that the proposals will instil into the staff the new attitudes which are required and which were certainly lacking then?
Mr. Ian McCartney (Makerfield) : Will the Secretary of State give some assurances about those charities which operate in the front line of social controversy, particularly in view of the recent statement by the Secretary of State for Social Security about the Low Pay Unit, Child Poverty Action Group, Shelter and War on Want? Will he give an absolute assurance that, when dealing with cults, the Government will not widen the issue into an all-out attack on charities such as those which I support and which campaign for social justice in the United Kingdom?
Mr. Hurd : I have already read to the House, and shall forbear doing so again, the guidance which the Charity Commission puts out about the political activities of charities. It is crucial for the health and reputation of the charitable sector that it should respect this guidance and not tread beyond it. Many of us have occasionally been worried by charities which seemed to tread beyond the clear guidance which I have laid down.
Mr. Andrew Rowe (Mid-Kent) : Is my right hon. Friend aware that after that trailer I cannot wait to read his interesting document? Will he consider the possibility that, when a charity is under investigation, its fund-raising activities might be suspended? Will he also consider the fact that when small charities are asked to return their accounts on an annual basis, those accounts should be accepted in a simple form? If they are not returned, will the power to suspend or roll up those charities be used? In the past, the problem has been that, although the powers existed, nothing was done.
Column 177subject to judicial review, if the commission attempted to suspend a body's activities before making any findings against it. As for my hon. Friend's second point, the whole purpose and thrust of the White Paper is precisely what some of my hon. Friends have urged that we should do--to brisk up the activities of the commission so as to strengthen its powers of investigation and enforcement.
Mr. Jonathan Sayeed (Bristol, East) : My right hon. Friend will be aware that some organisations have used their charitable status to hoodwink and to milk a kind-hearted British public in order to line the pockets of the organisers. They have used their charitable status as a vehicle to evade the proper payment of taxation. When there is clear evidence of a major abuse, can my right hon. Friend confirm that draconian powers will be used--including the repayment of tax that has been avoided by a so-called charitable organisation, and quite possibly the imposition of Mareva injunctions to freeze assets and the institution of criminal proceedings against the organisers?
The whole point of the existing law, which, I acknowledge, is rusty and creaking, of the reinvigoration of the Charity Commission which has already started, of the proposals in the White Paper, and of the legislation that we hope to introduce after it has been digested, is to safeguard the charitable sector by making it easier to spot and then to deal severely with any charity or individual connected with a charity who is tempted to act in the way that my hon. Friend has criticised.
That European Community Document No. 10449/88 relating to Community financial procedures be referred to a Standing Committee on European Community Documents.
That European Community Documents Nos. 5211/88 and 10166/88 relating to health and safety be referred to a Standing Committee on European Community Documents.-- [Mr. Chapman.]
Mrs. Gillian Shephard (Norfolk, South-West) : I beg to move, That leave be given to bring in a Bill to require the registration with local authorities of private residential special schools in respect of their use and residential facilities.
I am grateful for this chance to raise this important and topical matter in the House. It is important because it is about the welfare of children who are amongst the most vulnerable people in society--those with learning or behavioural difficulties or with physical or mental handicaps. It is important, too, because it concerns their placement in such schools by local authorities at tax and ratepayers' expense, and it is topical because, although the vast majority of these schools in England and Wales do a very good job, there have been some notorious cases in the past few years and recently which illustrate that, because of the current state of the law, those responsible have been unable to prevent such cases from occurring, to discover them promptly, or to take swift and effective action when they have been discovered. This Bill seeks to suggest ways of putting that right.
Children in need of special residential education are dealt with in one of three ways. They can be educated in a special school run by a local authority ; they can be maintained by a local authority in a non-maintained special school, of which there are now 88 in England and Wales--they are non-profit-making concerns, usually run by trusts and in receipt of direct grant from central Government ; or they can be educated, often on placement by a local authority, in a private residential special school.
Stringent requirements, in the form of the Education (Approval of Special Schools) Regulations 1983, govern the setting up and running of special schools run by LEAs and non-maintained special schools. Among other things, these regulations require that schools and their government be approved by the Secretary of State ; that the premises must satisfy statutory requirements ; and that non-maintained schools must not be run for profit. There are also requirements governing pupils' health, diet and religious worship. Regular reports have to be made to LEAs on statemented children and the teaching and care staff must be "suitable and sufficient".
In the case of non-maintained schools access must be allowed to representatives of local authorities which maintain a child in school, and the Secretary of State may withdraw his approval of a school if it fails to comply with the requirements either in these regulations or those in force under either section 10 of the 1944 Education Act or section 27 of the 1980 Education Act.
The contrast between these requirements and the regulations for the third category of school, the private residential school, could hardly be more striking, yet the same vulnerable group of children is involved. Private residential special schools are merely required to register and make annual returns under the Education (Particulars of Independent Schools) Regulations 1982. These, with their schedule, require information on numbers of pupils, details of public examinations, change of ownership and address, and any dismissals of staff on the grounds of misconduct. The numbers of statemented pupils, with staff qualifications, also have to be reported.
Column 179Section 11 of the 1981 Education Act points out that where an LEA makes arrangements for the provision of a statemented child at an independent school, the Secretary of State must approve it as suitable for statemented children and must consent to the child being placed there. There are 170 such private residential special schools in England and Wales at the moment, and of these 135 are approved under this section.
Schools are approved as suitable as a result of an inspection by Her Majesty's inspectors, who expect the school to meet the same standards as local authority schools and, according to the Department of Education, the inspection covers all the arrangements for the welfare of the children outside the classroom. An inspector may be accompanied by members of the social services inspectorate. I make no criticism of either Her Majesty's inspectors or social services inspectors, but it must be accepted that nowhere in the legislation are there any requirements other than those criteria laid down 40 years ago in section 71 of the 1944 Act, that registration may be refused or withdrawn if the premises are unsuitable ; if the accommodation is unsuitable or inadequate ; if efficient and suitable instruction is not provided, or if the proprietor or any teacher is not a proper person. There is no mention anywhere of the arrangements that should be made for the care and welfare of the children or for their physical or moral wellbeing.
I have already tried to draw the attention of the House to the contrast between the regulations for this category of school and those governing local authority or non-maintained special schools, but there is an even more striking contrast between the paucity of regulation of these special schools and the arrangements for registration, to be enacted, I hope, through part 8 of the Children Bill, now in Committee, for registered children's homes. These arrangements are comprehensive and drawn up in accordance with professional realities, and indeed, could apply to private residential special schools, were these not already registered under section 11 of the 1981 Education Act, yet, I repeat, the same group of vulnerable children is involved. If these children require the care and protection afforded to them by the provisions made for local authority and non-maintained special schools and for residental homes, they cannot and should not be denied that same care and protection if they happen to be placed by a local authority in a residential special school run privately.
Unfortunately, examples of disaster are not difficult to find. In Norfolk events at the Buxton Red House school five years ago and at the then Walker Foundation school