Education Bill

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The Chairman: At this stage, the knife is well and truly buried in my back and I cannot take the discussion back to clause 12 when we should be discussing clause 13. The House of Lords can examine the clause, although it cannot amend it, and it can raise issues that can be considered when the clause comes back to the House of Commons. So that does not mean that the clause has been lost and forgotten. Now that the revelation about the italics has been made, hon. Members can return to the Committee next year in an even better state that they are in now.

Mrs. Eleanor Laing (Epping Forest): Further to that point of order, Mr. Griffiths. I am grateful for the explanation about the italics. I do not speak for my hon. Friends who know about things, but I am never too proud to admit ignorance. I had no idea until you explained to us a few moments ago, Mr. Griffiths, that italics in a Bill are used where there are expenditure implications. That is very important. Can you tell me, Mr. Griffiths, if I should have known that or found that out somewhere, as a Member of Parliament, before your explanation a few moments ago, which arose only as a result of a point of order, because my hon. Friend the Member for Eddisbury (Mr. O'Brien) and I were concerned about not having considered clause 12 at all?

The Chairman: I am not aware of a particular place where one can look that up. I can only reassure the hon. Lady that it has been the practice in the House of Commons for many years. I do not know whether a special adviser suggested that that might be a good

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way of doing things. At least we all know now what the italics mean. I correct myself on one point: the House of Lords can make amendments to the words in italics, even though there are expenditure implications. You can rest assured that the clause will not go unexamined or even unamended in the Lords.

Mr. O'Brien: I am grateful.

5 pm

Mr. Timms: I respond first to the concern raised by the hon. Member for Harrogate and Knaresborough. In introducing this consolidated power 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. The White Paper on local government published last week confirmed, as the hon. Gentleman already knew, that we plan to reform the system from April 2003. We shall not remove education funding from the local government system as part of that review. We are engaging in discussion with local government to agree the right formula for the future distribution of education funding.

As a result of the local government finance review we hope to be able to fund more education through general funding for local authorities and less through grants paid under the proposed new power, reflecting our commitment to reduce the level of ring fencing, which, as the hon. Gentleman is aware, is a current concern in local government.

The new power allows us to provide the support already in the pipeline which Parliament has voted for the Department for Education and Skills, but in a less burdensome way by streamlining administrative procedures and removing some restrictions on the use of funds by schools and LEAs. We have already simplified the standards fund as far as possible under current legislation. This clause will allow further simplification and additional flexibility for schools.

The matter has already been raised during our deliberations, but most Members of the Committee will have heard from schools that obtaining funding through the standards fund is a particularly onerous process, with a great deal of associated bureaucracy. We have made some simplifications, and this change will help further. The overall cumulative effect will be a significant work load reduction for schools and LEAs. That has been a theme of our discussion; we need to be sensitive to work load implications. This clause is especially good news in that respect. The ensuing work load reductions will be particularly welcomed.

Other financial aspects of the Bill, in particular the reserve power over local authorities' education projects and the introduction of schools forums, are not under discussion today and are not affected by this clause. We will deal with issues arising from those proposals later. The purpose here is to provide a single, simple power to provide financial support across the full range of education and childcare.

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Chris Grayling: Does the clause permit the Government to overhaul the arrangements for student finance without bringing new funds to the House of Commons?

Mr. Timms: No, it does not. I can reassure the hon. Gentleman. The intention is to reduce bureaucracy and unnecessary administration, particularly for schools. Let me give examples of the difficulties that arise under the current arrangement, where we have to use many different powers to provide financial assistance, all hedged about and qualified in rather different ways, each with its own restrictions and obligations. We have had to set up a new funding stream through which to pay teachers' threshold pay grant rather than use the existing standards fund mechanisms. That process has added to schools' work load; it is a different administrative procedure. We have had to limit the scope of virement in the standards department rather than give schools freedom to vire the money for any use within the school that best raises standards. That means that despite the improvements we have made the use of the money is still somewhat restricted; schools still need to operate some otherwise unnecessary accounting procedures for the standards fund.

A good example of problems with the current system is that we were unable to use education funding powers to support the threshold pay cost of teachers employed by local authorities working in care homes. The reason is that they were employed by social services departments rather than education departments and, therefore, the powers available to us did not extend to paying their extra salary costs.

Obviously we have no desire to treat such teachers differently from those working in schools. It is hard to think of any reason why they should be treated differently for salary purposes, but we were forced to set up an entirely separate payment mechanism for them because of the limitations in the existing legislation. I think that, on reflection, the Committee will accept that it should not be like that. There is no reason for those teachers, in comparison with any others, to be disadvantaged because of historical accidents and arbitrary distinctions made in a series of regulations over the years.

By amalgamating all the existing powers into a single new power with no unnecessary obligations written into the legislation we will be able to remove difficulties of the kind described, saving schools and LEAs considerable time, both in accounting for funds and also in understanding the funding system. Members will have repeatedly heard concerns about the complexity of all the different regulations through which funding is provided. I accept that this is a significant change, but it will allow us to remove a great deal of that complexity.

Mr. Willis: I am genuinely encouraged by what the Minister says. Before he finishes his remarks will he say how Parliament will scrutinise the new powers that the Secretary of State is taking, answering the point made

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by the hon. Member for Isle of Wight, particularly whether there would be any regulations that the Secretary of State would have to observe?

Mr. Timms: I shall come to that point shortly.

The power needs to cover many different payments and grants. From the substantial sums paid to LEAs through the standards fund or the grant in aid that supports, for example, the National College for School Leadership, right down to one off, individual payments to a private company, a school or perhaps to a company to provide a particular service such as a training programme. So there is a wide range of types of payment that the power needs to cover.

Under the Bill—I believe this covers the point just raised by the hon. Member for Harrogate and Knaresborough—Parliament will agree the broad framework under which grants and other financial assistance will be provided. Further, Parliament will, of course, continue to control the support provided under this power through the normal process of voting the funds. That is rightly a matter of parliamentary interest. However, that the detailed terms and conditions under which grants and other financial support are made are fundamentally administrative matters. They do not merit the detailed scrutiny that would be provided if they were set out in secondary legislation as has tended to be the case in the past.

This is a significantly deregulatory proposal. In bringing in this new power, members will see from clause 17 that we propose the repeal of 13 individual powers in all. Of these 13 powers, 11 currently demand their own set of regulations to bring them into effect, none of which would be required in the future.

Mr. Brady: The Minister has just said that, under the Bill, Parliament would retain control over the way in which grants and other expenditure may be made. I may be failing to detect the relevant passage in clauses 13 to 17, but I cannot see any such requirement or reference, perhaps he would be good enough to point out the phrase in question.

Mr. Timms: The clause that we are addressing sets out the purposes for which the payments can be made, that is what I mean by the broad framework under which grants and other financial assistance will be provided. That is subsection (2) setting out the purposes

Mr. Brady rose—

Mr. Timms: Let me just carry on for a moment. Beyond that, Parliament will continue to control the support provided under this power through the usual process of voting the funds. Regulations would not add anything to the scrutiny of the amounts involved. Currently, the standards fund comprises about £3.6 billion, and the regulations do not mention the amounts attached to the powers. Although I understand the hon. Gentleman's concern, he should be more relaxed about it. If he allows me to continue,

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I may be able to reassure him further. We can dispense with 11 sets of regulations with a significant beneficial impact for schools.

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