Examination of witnesses (Questions 200
- 219)
WEDNESDAY 15 DECEMBER 1999
MS ESTELLE
MORRIS and PROFESSOR
MICHAEL BARBER
200. In your document issued in September on
the role of private companies in the management of state services,
you say under Local Management at paragraph 3, "School governing
bodies ..... have the freedom to choose where and how to purchase,
and every incentive to do so wisely as they can redeploy resources
saved through effective procurement." Do you see it being
entirely valid, and indeed they do have the power to do this,
where they can achieve value for money for schools to buy provision
from the independent school sector?
(Estelle Morris) Only in the prescribed circumstances
which are set out in law. If I could give an example, where I
do think it is appropriate is in the area of special educational
needs, but I think the challenge, as we have debated on many occasions,
for the education service is to make sure that high quality provision
is there in the maintained sector and I believe it can be, so
there is not a need in general to buy from the independent sector,
but there are in terms of special education needs and the NVS
scheme, and those are the best two examples I can give and we
will continue to do that. We have no plans to change that.
201. Forgive me, but we can talk about the private
sector and now we have mentioned independent schools it seems
there is a sort of element of denial which comes into this conversation.
In the course of the Schools Standards and Framework Bill both
you and Stephen Byers made it clear that although you proscribe
the power of LEAs to purchase provision from independent schools,
individual schools could buy provision from the independent sector
if they chose to; they have that power. Is that not correct?
(Estelle Morris) They have the power in certain circumstances
and I have just given you two examples of that. I do not believe
that governing bodies should actually opt out of their obligations
to raise standards for every single child in their school—
202. I entirely agree with that.
(Estelle Morris)—by moving children to the independent
sector. My commitment is to two things, a strong and vibrant maintained
sector which raises standards and a healthy relationship with
the independent sector, and Mr St Aubyn knows well the parameters
which govern that relationship.
203. But you have said as a prime Government
pledge that primary schools in the first three years must reduce
class sizes. We have looked at the cost you have run up of £620
million over four years of achieving that, and compared that to
what the cost would have been of achieving the same aim from simply
buying those additional places in the independent sector, and
they have told us they would be quite capable of absorbing the
extra 6,000 places which would have been required, which would
have amounted to a cost of £10 million a year or only £40
million over four years and not £620 million. If we are talking
about value for money in the procurement of services, which is
what you are asking school governing bodies to achieve, should
they not have the right to choose that route and use the resources
saved to improve the quality of teachers and other facilities
in the school rather than going through the cumbersome route that
you have imposed on them, which is ending up costing over six
times what you originally budgeted for?
(Estelle Morris) I would not like to be the Government
Minister who had to decide which little ones were forced to go
into the independent sector. I am not so sure whether we want
to get into the class size argument. All I would say is that £600
million to take half a million 5, 6 and 7 year-olds out of classes
of over 30 is money well spent; it is the greatest investment
in raising standards we could have made.
Helen Jones
204. In my previous incarnation I was involved
in an inquiry on another Select Committee into public accountability,
and one of the things I think we have to get right in all of this
is preserving the lines of democratic accountability when the
private sector is involved either with LEAs or in running schools.
Perhaps you could tell us how you see those lines of public accountability
working when, for instance, a private company is involved in delivering
services in schools with an LEA still operating above it? Where
are the lines which make it clear that the LEA, the elected members,
actually have some accountability for those services?
(Estelle Morris) I think that is a very important
question and it is one which I have given a great deal of thought
to, and I think there has to be that continuing role. As I have
said, I think in response to Mr O'Brien, one of the things about
contracting out is that it does define the relationship between
elected members and the provider in a way which I think elected
members sometimes get wrong in local authorities which are-under-performing.
So I see it as I always thought it should be, which is reflecting
local wishes, being a voice for the electorate, parents and people
in their wards, and in the case of where we have contracted out
actually monitoring the contract. Because the contractual relationship
is between the local authority and the private sector I see it
being elected politicians who have that obligation to actually
monitor the contract. Indeed, in the cases so far they have agreed
to sign off the contract to the private sector, but what it prevents
them doing is interfering in the delivery of services. In some
under-performing LEAs that is what local elected councillors have
been doing, interfering with the delivery of services. They never
should have been doing that and in some ways I think this process
helps to define the relationship.
205. I understand that but could we perhaps
look at a possible example? Let us say, there is a private contractor
working in a school and for various reasons the local people may
not be satisfied with those services. That has not happened yet
but it is always a theoretical possibility. How in that situation
can they work to improve services through their local representatives?
(Estelle Morris) I would have thought by talking to
the provider about what they were dissatisfied with. I suppose
if a parent is dissatisfied, they could either be dissatisfied
with the contract which was drawn up or they could be dissatisfied
with the performance of the provider against the contract, and
whose fault that would be would differ in both those cases. I
suspect it is no different from local authorities contracting
out the refuse collection or cutting the grass; there is a contract
there and part of the local elected councillors' accountability
is how well they have negotiated that contract and what they have
actually put in it. I hope they would do one of two things; either
say to their constituents, "I will defend what I put in that
contract and you can vote me out at the next election", or,
secondly, that clearly they are not delivering the contract and
go in and do something about it.
206. In that situation, the parents' first line
of contact is often the governing body. In the case of King's
Manor, which Nick St Aubyn has mentioned, 3E's appointed most
of the governing body, did they not, and Mr Goodchild did tell
this Committee, "3E's have their influence on the future
of the school through the governing body". Do you not see
a conflict in that between a governor's duty to represent the
various stakeholders, whether parents, students or whatever, and
a lot of the governors being appointed by the private company
which is actually contracted to provide the services in the school?
(Estelle Morris) I suppose there is a conflict if
people behave irresponsibly, which I do not believe they would
do either in King's Manor or elsewhere. I would say there are
two safeguards to that. No matter whether they are foundation
governors or whom they are appointed by, their legal obligation
is still to raise standards in the school, so their first commitment
is to what they do in the school in terms of supporting the school
and not to a foundation or whoever appointed them. Secondly, it
is very clear that if ever there was a situation in King's Manor
or elsewhere where there was a contract involving 3E's, there
are regulations which would mean that that conflict would not
influence the awarding of the contract.
207. It is a whole new area, and admittedly
we are learning as we go along, but are there any particular ways
that you have come across where you would like to see public accountability
strengthened?
(Estelle Morris) Thinking off the top of my head,
I think one of the things we ask local authorities and schools
to do is to be innovative and proactive in communicating with
parents about what they do, as some of them have done very well.
I see no reason why, and I have not had this conversation with
anybody, we should not ask our private sector providers to make
sure they communicate in the widest sense with parents as well
as with schools. I would not see a problem with that and I would
welcome it if they show that initiative, but I have to say it
is not a conversation I have had with them.
Charlotte Atkins
208. If I can come in on the back of the issue
about governors, Francis Beckett in the NUT's Education Review
suggests that governors are going to be in the pockets of the
contractors at King's Manor. What I am concerned about is the
role of parents. The Government has made it very clear that the
role of parents on governing bodies is particularly strong and
you have increased the number of governors in other schools for
parents. What do you see the role of parent governors in King's
Manor to be? Are you concerned, given the experience of governors
in further education, that we would have to ensure that governing
body is fully accountable and democratically accountable to the
school community.
(Estelle Morris) Yes, I am, and I was pleased that
3E's appointed at least one parent as one of their foundation
governors—they could have taken all seven places themselves
but had five, one and one. I think that was right, I think that
showed a commitment to the community, and I welcomed that. Going
back to something I said right at the start, what we had in King's
Manor was an historic failure of the school to deliver the standard
of education that it should have, and what I would never be happy
with is somehow justifying leaving levers in place which on paper
offer democratic accountability but let down the very people who
are meant to be benefiting from the service. I would feel more
uncomfortable coming to you and saying, "I am giving a very
clear diagram of who is accountable to whom, but, I am sorry,
it is going wrong and it is not delivering the service."
We are learning and they are new ways and clearly the whole area
of governor accountability to their electorate is one which has
exercised our minds for quite a while. The bottom line always
is that the structure which is now in place, I believe, in King's
Manor and elsewhere is one which will actually deliver better.
I suspect that given the choice that is what the community would
want.
(Professor Barber) First of all, as a former editor
of the Education Review, can I congratulate you on quoting
it, but secondly can I say that King's Manor is a non denominational
voluntary aided school and its governing body is constructed in
the way that voluntary aided school governing bodies are constructed,
so the parallel is with other voluntary aided schools rather than
the further education sector.
Mr St Aubyn
209. Just to confirm what the Minister has said,
in the case of King's Manor, 3E's have given the local community
a pivotal role in governance and given up their ability to dominate
the decisions, which is a very wise and sensible thing to do.
One other aspect on accountability is in the choice of the private
sector provider. In the case of our school, we have involved the
teachers, we have involved parents, there was a ballot of them,
this was an informal process but it certainly informed the decisions
of the education authority. In the evidence we have had from Hackney
and Islington, it appeared there was very little general public
involvement, there were no town hall meetings where the public
could come along and meet the various potential bidders. This
would be a relatively simple, informal but surely necessary part
of the whole process of involving the private sector and making
sure the bidders knew more about whom they were going to be dealing
with and who were the actual customers for whom they are supposed
to be taking on the job.
(Estelle Morris) I think we are learning from your
good practice, Mr St Aubyn. Certainly in Islington we have ensured
that happens. Each of the providers which were on the short list
were invited to Islington to meet with Islington heads and both
the elected officials as well as the heads had the opportunity
to express an opinion. In fact in Islington, when I last met the
heads some months ago, I invited them to elect or decide on a
group who would not work with us—because I do not think
it is right that the heads share the responsibility for awarding
the contract—but certainly they have had an input into guiding
our choice of preferred bidder. I think you are right, I think
it is rather like us talking to the LEAs before we announce we
are going to intervene. If you are going to get that relationship
right, you have to get it right at the start. What is true is
that for each of these teachers it is new for them as well and
they are uncertain about their own future and I think the model
you have just indicated happening in Surrey is one that we have
certainly used in Islington. We have probably developed it further
since we did Hackney and we would want to go along that line;
I think you have got that one right.
Chairman: We are all learning from Mr St Aubyn's
best practice.
Valerie Davey
210. You are talking of immediate experience
and needing to learn and there are 15 schools which went down
this track to some extent earlier, namely the CTCs. Have we carefully
monitored what has happened from that experience, both the dangers
and the benefits?
(Estelle Morris) Yes, we have. We constantly monitor
what they are doing. I have certainly visited two myself over
the last two years.
211. I do not want to prolong this so could
you send us the detail of the analysis of what has happened?
(Estelle Morris) I think we can possibly do more than
that. We have actually commissioned the evaluation.
(Professor Barber) We can certainly provide you with
a report.[3]
There has been a number of changes in the CTCs since this Government
was elected and we have very good working relationships with CTC
principals and indeed their governors and would be happy to send
you an analysis of the changes which have taken place and the
standards being achieved.
Charlotte Atkins
212. You have mentioned the role of the elected
members of LEAs in terms of private companies, what do you think
the line of accountability is from elected members to the private
sector companies, particularly now that so many local authorities
are moving towards the Cabinet model of local government?
(Estelle Morris) I apologise because I am probably
going to be repetitive but I perhaps have not grasped what I should
be saying. There are two lines: their legal obligation to award
the contract, and that is very, very important—they might
be instructed to do it in certain circumstances but it is their
contract—and, secondly, through regular report-back from
the private sector, monitoring against the contract against the
processes and against outcomes. I would say in some ways to some
extent maybe that is what good LEAs do with their officers, actually
monitor their performance, and I do not see it as being significantly
different. I think that is the role of their locally-elected representatives,
not to deliver the service but to monitor the delivery of the
service. In that respect, I am not sure whether it matters whether
it is the private or the public sector which is delivering.
(Professor Barber) In Liverpool, that is precisely
the model which the local education authority is moving towards.
The contract specification which has been drawn up will be used
to define the service provided by the LEA officers and the LEA
members will monitor the performance of the officers against that
contract through the board that Estelle mentioned a few minutes
ago.
213. What do you think should be the role of
the Audit Commission and OFSTED? Do you think they have sufficient
powers to inspect the work of the private sector? Should they
be auditing the private contractor's work as well as inspecting
the quality and delivery and outcomes, because clearly they are
used to inspecting the quality of it and the outcomes but not
the broad range of private contractor work?
(Estelle Morris) I would expect them to use the framework
for inspecting LEAs, for inspecting providers, whether they be
public or private. Certainly as a private sector provider you
cannot avoid the rigour with which LEAs are inspected by OFSTED
and the Audit Commission.
214. Do you think they should be looking at
other aspects of the private company's work, or should they just
literally treat it like the public sector?
(Estelle Morris) I think at the moment they should
keep to the framework against which they inspect the services
in the local authority areas. If the question is, do I think they
should go and look at other areas of that company's activities
outside what they are doing in that local authority, the answer
is no.
215. What about the DfEE role in this case in
terms of the private companies? Will you be monitoring on a regular
basis what these private companies are doing? Gordon asked earlier
at what point would the LEA be looked at in terms of coming back
into running those schools, running the LEAs, so what role would
the DfEE take on in terms of monitoring what the private companies
are doing? Will that be on a monthly basis, six monthly, annually?
How will you work it?
(Professor Barber) First of all, we will be involved
in monitoring the success, hopefully, of these interventions and
the outcomes of those and the performance of the private sector
companies in Hackney and shortly in Islington and wherever else
that occurs, and we will want to monitor how well they carry out
the duties they take on as a result of the contract. Certainly
in the early stages we will want to monitor on a very regular
basis. I think I said a few minutes ago that in Hackney we have
a monthly meeting with the contractor and the local education
authority and I would have thought that we would need to monitor
with that regularity in the early phases. It may be that in an
LEA if we have a contract running for five or seven years, once
the thing is up and running and going smoothly and seen to be
going smoothly, we would not want to carry on monitoring at that
level, but certainly in the early phases we really do need to
know what is going on, not only because we want the services to
be delivered well in the schools for the pupils in those areas
but because we need to learn from that to apply that learning
elsewhere as the policy develops.
216. Presumably at the later stages of the contract
you would also want to be monitoring carefully to decide what
should be the successor arrangements?
(Professor Barber) Absolutely.
Mr Marsden
217. When the chairs of Hackney and Islington
education authorities came before this Committee on this inquiry
there seemed to be some confusion as to the extent to which elected
members had been involved in the process of contracting out the
services there. The Audit Commission has recommended that wherever
possible at least two elected members of the authority should
be present at all meetings between potential contractors and the
authority, and of course those meetings should be thoroughly minuted,
the argument being that this would help to ensure proper governance
and control of public money. Do you agree with the Audit Commission?
(Estelle Morris) You talk about democratic accountability,
and where that feeds into the system it is important that that
happens. That is why, when we have met local authorities, it has
invariably included chairs of education or whoever they have wanted
to send along, and it is usually cross-party. So I do think members
have got a role in approving contracts. In Hackney, we had no
problem whatsoever in taking the draft contract to the Education
Committee if that is what they wished to do, as long as it is
observed as private, and I know what would have happened. The
way Hackney chose to deal with it was to use Regulation 40 in
their own Standing Orders which meant that it was approved by
a smaller group. That was legal within their Standing Orders and
equally we have no problem with it but I just want to assure you
that there is no pressure from us not to take it to the Education
Committee.[4]
218. So you will make sure in future contracting-out
procedures there is a very strong emphasis and a very strong steer
from the DfEE that elected members, subject to the confidentiality
safeguards you have mentioned, should be involved in that process?
(Estelle Morris) All I could say and all I would want
to say is that we will ensure that local authorities act within
their Standing Orders.
Mr Gordon: That is not quite the same thing,
but never mind.
Helen Jones
219. The Schools Standards and Framework Act
obviously gave local authorities a duty to raise standards and
it gave them powers to intervene in certain cases, for instance,
where warning notices had been issued to schools causing concern.
I am wondering how that works. When LEA services are contracted-out,
who will be responsible for discharging the duties with regard
to schools causing concern? Who will issue the warning notices
to governing bodies and who will be responsible for decisions
such as decisions to appoint extra governors?
(Professor Barber) Precisely what will happen in each
circumstance will be a matter for definition in the contract.
In the case of early warning notices, in what is proposed in Islington
that power would be transfer to the function provider. There is
some discussion in relation to that contract about who would hold
power to appoint additional governors, so that is not clarified.
3 Ev. p.54. Back
4 Note by Witness: Whether or not members are involved in
the day-to day negotiation of contracts is a matter for the LEA. Back
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