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Session 2002 - 03
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Delegated Legislation Committee Debates

Draft Contracting Out (Local Education Authority Functions) (England) (Amendment) Order 2003

Second Standing Committee
on Delegated Legislation

Wednesday 17 September 2003

[Mr. Edward O'Hara in the Chair]

Contracting Out
(Local Education Authority Functions) (England) (Amendment) Order 2003

2.30 pm

The Minister for School Standards (Mr. David Miliband): I beg to move,

    That the Committee has considered the draft Contracting Out (Local Education Authority Functions) (England) (Amendment) Order 2003.

As is customary, may I say how much I look forward to serving under your chairmanship, Mr. O'Hara?

The Chairman: Let us get on with the business.

Mr. Miliband: Exactly. The order is made under provisions in the Deregulation and Contracting Out Act 1994. The Contracting Out (Local Education Authority Functions) (England) Order 2002 allowed local education authorities to contract out 103 activities. This order involves a further three such activities, so we are furthering what we started last year. Until last year, LEAs were restricted from contracting with any other body to deliver services that required the exercise of discretion in individual cases: for example, carrying out duties to secure school attendance for pupils not receiving suitable education. Such contracting was possible under a direction from the Secretary of State only when an LEA was not delivering on its statutory functions. That is why we consulted on, and made, the 2002 order, which listed the 103 functions that an LEA may voluntarily contract out to the private voluntary sector or to other LEAs. We debated that in Committee on 5 March last year.

It is important to note that although contractors may carry out functions on behalf of LEAs, the LEAs remain ultimately responsible and accountable for all the contracted out functions. They continue to set direction and strategy, the implementation of which must be reflected in their contracts.

Last year, the consultation and the new freedoms were widely welcomed in local government. Since the main order came into force on 1 April 2002, several LEAs have considered exploiting the opportunities that it offers. Many LEAs, particularly smaller ones, face problems of insufficient capacity to deliver some of their administrative functions. Several have contracted out functions that serve schools.

The 2003 order has a simple purpose: to update the 2002 order with three new functions. First, it enables an LEA to authorise a contractor to co-ordinate school admission arrangements in its area between itself and those maintained schools that are responsible for their own admissions. LEAs already have the right to contract out the administration of admissions functions if they so wish. Giving LEAs the

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opportunity to contract out the administration of co-ordinated admission arrangements is a logical extension of that. It is only the administration that may be contracted out. Decision taking will remain with the LEA. As much of the admissions process is purely administrative, such as sending out consultation letters and collating responses, and administering a database of applications, we see no reason why LEAs should not be given the opportunity to contract out those functions.

Secondly, the order allows LEAs to contract out the review of the sufficiency of child care provisions in their area, and provision of a children's information service. Contractors could run entirely the local children's information service and carry out early years and child care audits. We recently published comprehensive guidance on that for authorities to follow, and we are providing funding of some £31 million for children's information services around the country.

Thirdly, the order allows an LEA to engage a contractor to gather and provide copies of the consistent financial reporting returns of maintained schools to the Secretary of State. LEAs may contract out only the administrative function. The responsibility for the accuracy of those returns and their submission on time remains with LEAs. The duties imposed by section 44 of the Education Act 2002, and by the subsequent consistent financial reporting regulations, fall on the governing bodies of maintained schools. They must submit their CFR returns to their LEA on the date it has set. It then checks the returns and sends them to the Secretary of State.

That explains the three main functions in the order. The order is an enabling measure, so it does not force LEAs to contract out if they do not wish to do so. In that sense, it is a purely voluntary arrangement. The responsibility and accountability for those functions remains with LEAs. We believe that that is an efficient way to proceed. I commend the order to the Committee.

2.34 pm

Mr. Charles Hendry (Wealden): May I also say what a pleasure it is to serve under your chairmanship, Mr. O'Hara?

This has been an exciting time for me—last week I made my first speech from the Dispatch Box, and this week I am doing my first delegated legislation Committee. At such a rate of progress, I will be back on the Back Benches by the time the House returns after the party conferences. However, it is a pleasure to be here, and I commend the Minister for being able to speak at such length on the statutory instrument. We have studied it with some care ourselves, and although I am not quite sure whether we can extract so much from it, I do have a few points to make.

We certainly endorse the principle of contracting out, and wish to associate ourselves with the Government's view that it is the quality of service that is the most important objective, regardless of who provides that service. I would be grateful if the Minister could give us some further information on

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what has happened since these matters were debated in Committee last year. What proportion of local authorities, of the many who were given permission to do so last year, have contracted out? To what extent have those contracts gone to commercial companies, not-for-profit or voluntary organisations or joint ventures?

2.35 pm

Sitting suspended for a Division in the House.

2.50 pm

On resuming—

Mr. Hendry: Scarcely could I imagine, when I began making my first speech in a delegated legislation Committee, that I should be making my second one such a short time later.

I want to probe the Minister on the precise nature of the proposals—particularly the new paragraph (xa), entitled ''Co-ordination of admission arrangements'', which is to be inserted into schedule 2 to the Contracting Out (Local Education Authority Functions) (England) Order 2002. The Minister of State will be aware that his colleague in the other place, Lord Davies of Oldham, said last year that the Government had

    ''excluded from the order a number of key strategic decisions that we believe an authority should not contract out.''

Those included,

    ''setting local policies, such as school admission policies'' .—[Official Report, House of Lords, 28 March 2002; Vol. 633, c. 375–6.]

In his opening comments, the Minister clarified that the policy would remain with the local authority, as distinct from its implementation. Will he make it clear where the boundary between those two aspects of the matter lies, so that we may be in no doubt about what the contractor would be doing? Also, how would the contract be costed? It is a complicated area of work, and that is important.

How much work will be entailed for the local authority in providing the relevant information that the contractor might require? A possible concern is whether any potential savings would be enough to justify the work needed to put together the case for contracting out. How would confidentiality be maintained? Parents are clearly concerned about confidentiality concerning such matters as the schools that their children have applied for, or appeals about school allocations.

We should also like more clarity about the meaning of new paragraph (bba) of the schedule, entitled

    ''Duties of LEA in respect of childcare''.

It could involve an extremely large area of policy, or a small, tight one. Does it refer just to day nurseries, or to residential care for older children and young people? How far could it go? Again, we would like to know how the relevant contract would be costed and how effectiveness would be measured, for those to whom the work was contracted out. Knowing the Minister's intelligence, I suspect that he probably can give me immediate answers to my questions, but if he cannot, I should be grateful if he would write to me to clarify those points.

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I am keen to establish, as a general principle, what precisely the Minister expects to be gained through the order that is not already being achieved through regular inspection and the accompanying improvements in efficiency which that brings about. As he knows, and as I explained before, we are in principle in favour of contracting out, but we also recognise that regular inspection has brought about significant improvements in efficiency. We want to be certain that the order will achieve gains that could not be brought about in that way.

Finally, will the Minister say more about the long-term direction in which the Government envisage such matters developing? He may be aware of comments made in the other place when the matter was debated last year. My right hon. Friend Baroness Blatch said:

    ''Does the Minister agree . . . that, under this order, LEAs would be reduced to advising, consulting and implementing the strategy being farmed out, leaving the LEAs as mere contract managers? I ask that question for clarification, as much as anything, about where the Government expect to see local education authorities over the next few years.''—[Official Report, House of Lords, 28 March 2002; Vol. 633, c. 379.]

That was not adequately dealt with at the time in the ministerial response.

Aside from the few comments that I have made, we are generally happy with the proposal.

2.54 pm


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