Draft Contracting Out (Local Education Authority Functions) (England) Order 2002

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Mr. Timms: I am not sure that the hon. Gentleman is right. Many local authority contracts are monitored in the way that he knows. The order simply means that the scope for them will be wider. The change is not as major as he suggests. Of course, I agree that it is important to have an assurance that things will be done properly.

Mr. Brady: Will the Minister give way?

Mr. Timms: I should perhaps make a little more headway. I will be happy to pick up other points that arise as we proceed.

I was talking about best value, and there is no reason why a best-value provider should not be an in-house provider. In many instances, that is the case. However, we are opening up the possibility that some functions that cannot be contracted out currently could be if the local education authority decided that that was the best way for those functions to be fulfilled.

Let me deal with some of the detailed points about how particular elements of one or other of the schedules will work in practice. I think that the hon. Member for Altrincham and Sale, West asked whether the order could apply in intervention authorities or said that things would get rather complicated if an intervention were under way. The order could apply in what one might describe as a soft, non-directed intervention, when a support package was offered to an LEA to enable it to raise standards, and the LEA chose to contract out particular functions. Such an arrangement might obtain, but the powers that we are discussing are different from those that have been applied in the interventions that have been undertaken so far. Those circumstances are different.

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I know that special educational needs are of great concern to hon. Members on both sides of the Committee. In recent months, we have had valuable discussions on that issue elsewhere. The LEA would retain overall responsibility. Ultimately, an aggrieved parent would always have recourse to an LEA if a problem arose. However, the procedure for dealing with internal appeals and complaints would need to be governed by the contract between the LEA and the service provider. Clear contractual provisions would be needed to ensure that there were not two parallel processes. I can assure the Committee that we will highlight in guidance the importance of clear contractual provisions to ensure that confusion does not arise.

Mr. Brady: I am grateful to the Minister for that useful clarification. Is he saying that the guidance will suggest that the appeals process should remain with the LEA, or that the guidance might allow for a contracting body to carry out even the final appeal on behalf of the LEA? Does he accept that this is a clear case in which it is not possible to divide the final responsibility from the exercise of discretion?

Mr. Timms: The legal obligation will remain with the LEA. Ultimately, an aggrieved parent could take an LEA to court, and the LEA would always be the respondent in such a case. One could imagine various kinds of approaches to an appeals process in which varying degrees of the process were handled by the contractor—just as at the moment they are handled by the LEA—but ultimately, the LEA would have the responsibility.

Mr. O'Brien: I am sorry to intervene yet again. I may sound a touch legalistic, but according to that description of the arrangements, it would be possible for an agreed party to have the primary relationship with the contracting party, but their ultimate recourse, according to the Minister's welcome reassurance, would be to the LEA. If the Department has not already done so, perhaps any advice on the question as to whether the contracts would involve an agency or two principals could be deposited in the Library. It could be of serious consequence in determining whether the aggrieved party genuinely has the right to go to the LEA, given that privity of contract might mean that the provision of services by the contracting party had excluded the opportunity to get to the LEA other than via the contracting party. It might mean, at best, the aggrieved party joining the LEA as a party to an action in the courts.

That might sound legalistic, but there is a danger that the difference between being a principal or an agent could become confused in the analysis that has just been given. I recognise that this is not the place for the Minister to give a detailed legal response, hence my hope that some clarification could be given by way of advice deposited in the Library.

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Mr. Timms: That did sound a touch on the legalistic side. The legal obligation and responsibility rests with the LEA. If some clarification of the kind sought by the hon. Gentleman is available, I will be happy to provide it.

The hon. Member for Harrogate and Knaresborough raised some interesting points. He asked me whether the services covered by the order were the only things that LEAs can contract out. There are already lots of things that LEAs can contract out, such as operational services, and the order does not interfere with that. However, under the terms of the Education Bill that we have been debating in recent weeks, the power to innovate is available to local education authorities. Nothing in the order constrains their ability to exercise that power. The order gives them an automatic right, without having to apply for the power to innovate, to contract out certain functions, but the power to innovate remains available to them.

The hon. Gentleman asked me some specific questions about the schedules. He asked me about the consideration and disposal of complaints under paragraph (bb) of schedule 1, seeking to know whether, if the complaint was rejected by the contractor, that would be the end of the matter. In many cases, a different contractor would be dealing with the complaints under that part of schedule 1 from that running another service under the schedule. It would not invariably be a different contractor; it could be the same one, but the LEA would not be obliged to have a back-up complaints system if the power under the schedule was being used. However, an individual can always complain to the local authority and to their local councillor, or take another route to complain about the contractor's performance or the handling of the complaint.

Mr. Willis: This is getting farcical. Will the Minister give the Committee a concrete example? Let us say that a student was excluded permanently by a school and that that process was now handled by a contractor. The contractor would have its own appeals process as part of its contract. If that failed, another contractor—an appeals contractor—would go through a further process. At present, a person is allowed to appeal to the elected members of the local education authority and its appeals panel on the question of whether a child should be readmitted to school. Will that process still be in place? I imagine that those processes would all take some time.

Mr. Timms: My point is that in dealing with those two different parts of the schedule, there is no requirement for two distinct functions. We are dealing with entirely different parts of the LEA's activity. There is no requirement for them to be contracted out to the same contractor. In the circumstance to which the hon. Gentleman referred--the single process for dealing with special educational needs--I would expect it to be the same contractor, but schedule 1(bb) refers to a different matter.

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The hon. Member for Eddisbury also asked about schedule 3(s). In response to that and other points that were raised, the general principle will apply. The policy-making strategic decisions, framing of the contract and so on will all rest with the LEA, but it could, if it wished, bring in a contractor for implementation and one can envisage how that would work.

The hon. Member for Altrincham and Sale, West asked about schedule 2(o) and (p), concerning when a delegated budget has been suspended. It would be an extreme case for a delegated budget to be suspended because of concern about what is happening in a school and it is conceivable that, in such circumstances, the contractor would be exercising those functions within the arrangements that the LEA had in place. Again, that does not raise any fundamentally new issues that are not covered by the general account that I gave.

The hon. Member for Eddisbury asked some specific questions about the six-term year and it is for LEAs to decide their policy on that. Again, some implementation matters could be contracted out, but that is all. The provision does not change the nature of the decision on whether a six-term year should be entered into. That should be decided locally by LEAs and the Government will not promote it or encourage LEAs to pursue it. It is entirely a matter for them.

I hope that the hon. Member for Fareham (Mr. Hoban) will accept that I have addressed the point he raised. I noted his affection for monolithic Labour authorities in the north-east.

Dr. Pugh: I am trying hard to read the ministerial mind. It might be suggested from the functions on the list that, in principle, some would be better, or more properly, delivered by an LEA. Is that what the Minister thinks, while saying that it is for LEAs to

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decide, or does he believe that nothing on the list might be better or more properly delivered by an LEA? Could all of the matters be delivered by any other organisation that is capable of having a shot at them?

Mr. Timms: Those functions that we believe should be carried out by LEAs in every case are not on that list. I identified some of them during my opening comments. Hon. Members may be interested to note that we had originally included the power to establish a pupil referral unit, but the response to the consultation was that that was not an appropriate power to be contracted out, so it does not now appear on the list. The Government's view is that nothing on the list should be exercised by an LEA in every case. That is the basis on which the hon. Member for Harrogate and Knaresborough welcomed our proposals.

I commend the order to the Committee.

Mr. Brady: Very briefly, I am grateful to the Minister for what I believe was a genuine and serious attempt to deal with many of the concerns that were raised. On examining the record, he may find that other detailed points were raised that he has not had time to address during this very short debate. When he considers the important and slightly legalistic question raised by my hon. Friend the Member for Eddisbury, will he write to me—and perhaps other Committee members—about those matters that have not been addressed entirely adequately?

Mr. Timms: I hope that I have addressed the points raised, although admittedly in a general way. If hon. Members continue to have concerns, perhaps they will write to me and I shall be glad to respond.

Question put and agreed to.


    That the Committee has considered the draft Contracting Out (Local Education Authority Functions) (England) Order 2002.

        Committee rose at Six o'clock.

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The following Members attended the Committee:
Widdecombe, Miss Ann (Chairman)
Bailey, Mr.
Betts, Mr.
Brady, Mr.
Coaker, Vernon
Cryer, John
Cunningham, Tony
Heppell, Mr.
Hoban, Mr.

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Horam, Mr.
Jackson, Helen
O'Brien, Mr. Stephen
Plaskitt, Mr.
Pugh, Dr.
Smith, Mr. Chris
Timms, Mr.
Willis, Mr.

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