Appendix 4
Letter from the Chairman of the Committee to the
Chairman of the Education and Skills Committee
The Regulatory Reform (Voluntary Aided Schools
Liabilities and Funding) (England) Order 2002
As you may be aware, on 20 November the Secretary
of State for Education and Skills laid before Parliament a proposal
for a Regulatory Reform (Voluntary Aided Schools Liabilities and
Funding) (England) Order 2002, together with a statement from
the Department for Education and Skills. The Order would simply
the arrangements for deciding liability, and thus funding, for
premises-related work at voluntary aided schools.
The Deregulation and Regulatory Reform Committee
considered the proposal for the first time at its meeting last
week. Subject to a few outstanding issues on which the Committee
has asked the Department for further information, and to confirmation
from representatives of the parties affected that they are broadly
content with what is proposed, the Committee does not anticipate
having any great difficulty clearing the Order, which appears
to offer a sensible and well-balanced approach to reform of the
Byzantine structure of financial support for provision, repair
and replacement of school property.
However, as non-specialists in the subject area,
we would welcome any views your Committee may have on the proposal.
There are two issues in particular where an informed view from
your Committee would be particularly helpful to us in our deliberations.
Firstly, the Government has of course recently published,
and the House has given a second reading to, the Education Bill.
Ministers have described this Bill, not least, I note, in evidence
to your Committee, as a "deregulatory" measure. We assume
that the above proposal has been introduced through the regulatory
reform procedure, rather than being included in the Bill, because
it is intended that it have effect from 1 April 2002, by which
time it is unlikely that the Bill will have completed its passage
through Parliament. However, we have invited the Department to
clarify how this proposal fits with the remainder of its legislative
programme; and why no proposals contained in the Bill have been
brought forward as regulatory reform proposals. In this regard,
we note particularly that the Bill includes, for example, provision
to give governing bodies the power to provide after-school childcare,
one of the list of 51 examples of potential regulatory reform
orders which the Government published during passage of the Regulatory
Reform Act.
I will be particularly interested to see the Department's
response to this request because it is my view, which I expressed
during debate on the Regulatory Reform Bill, that regulatory reform
proposals are subjected in many cases to much more thorough scrutiny
than is the case for primary legislation. However, we also would
be interested to hear any views which your Committee may have
on the matter.
Secondly, there is a particular point of principle
connected with the proposal on which your Committee may be well-placed
to take a view. Currently, grant support to VA governing bodies
from the DES for those items which are their liability is limited
to 85%. We understand that the rate of support has been set down
in primary legislation since the settlement reached in the Education
Act 1944 (at which point the rate was 50%; it has been subject
to change since then, most recently in 1974), and reflects the
fact that VA schools retain specific rights in relation to the
constitution of the governing body, the arrangements for pupil
admissions, and the employment of staff.
This aspect of the proposal drew significant support
from the vast majority of consultees. This is perhaps unsurprising
given that those responding to the consultation were overwhelmingly
either those with a direct interest in having the level of grant
support raised (i.e. VA schools themselves, or Dioceses); or LEAs,
which are not in a position to comment on the point of principle
involved (although in fairness it should be noted that the main
Churches have made it clear that, because of the link between
governing body contributions and the rights enjoyed by VA schools,
they would not want the standard rate of grant to be any higher
than 90%). However, it was objected to by both the National Secular
Society and the British Humanist Association, on the grounds that
it was unfair for VA schools to receive the proposed increased
rate of grant support whilst their rights remained in place.
The Government argue that the change is necessary
for three reasons:
1. to compensate for the additional liabilities
which are being placed on VA governing bodies;
2. to compensate for increases in VAT since the
last change in the rate of support was made (1974); and
3. to enable governing bodies to take advantage
of the increased grant available from the Department (grant which
is being made available entirely separately from this proposal).
It appears to the Committee that the first two of
these are entirely reasonable grounds on which to raise the rate
of support given to VA schools, and that it would be entirely
appropriate to do so by means of this Order. The third, however,
gives us cause to consider this aspect of the proposal further,
since it could be argued that it confers additional financial
advantage on VA schools over and above what is necessary as a
result of the changes to arrangements for liability.
The Department argue that no additional funding is
being made available over and above what has already been agreed
for the VA sector for the period to the end of the 2003-04 financial
year: the change will simply enable VA schools to access funding
which is already available, but which they could not afford to
take advantage of if they had to match it with 15% from their
own funds, rather than just 10%. They argue that the change is
necessary if the requirement for VA schools to make a contribution
is not to prevent the achievement of Government policy to improve
the condition of schools.
This may well be the case: but it could nevertheless
be argued that, even if additional support would be provided from
funds already allocated to the sector, VA schools should still,
as a matter of principle, have to pay a contribution equivalent
to that which they paid previously if they are to access the funds
available. Further, although there may be no additional money
for the VA sector as a whole in the period up to 2003-04, an increase
in the rate of grant support could imply an increase in the support
otherwise available to them after that period. Consequently, and
given that 'faith schools' are the subject of some degree of controversy,
the question arises of whether it is appropriate to introduce
such a change by means of delegated legislation.
You may find it helpful to see the Department's response
to these points before making your own reply, in which case I
am sure that the Committee would be very happy to enable that
to happen. In the meantime, if you would like to discuss any aspect
of this letter, or of the proposal, further, please do not hesitate
to contact either myself or Huw Yardley, Clerk to the Committee.
I am copying this letter to Liam Laurence Smyth,
Clerk to your Committee.
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