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Paul Holmes: I accept the figure, because it was given to the Select Committee last week. However, sending pupils to a pupil referral unit is not necessarily the same as permanent expulsion, as the Minister well knows.

To add insult to injury, when a state school expels a pupil, the money attached to that pupil rightly goes back to the LEA, which must provide a teaching alternative such as a pupil referral unit. The academies, however, hang on to the money. Not only are the two academies in Middlesbrough dumping their 42 problem pupils on the system but they keep the money.

Concerns about teaching creationism in science lessons or explaining that God saved us in the second world war in history lessons have been aired before. Bob Edminster, who is to sponsor two more city academies, defended the Vardy schools' teaching of creationism:

Such people should not be given control of two tax-funded state schools. Faithworks is a Christian consultancy that seeks to help Church groups to set up more academies, and provides advice on the way in which organisations can get round anti-discrimination laws that protect gay people. I thought that we had got rid of section 28, but perhaps it will return via the back door.

Business sponsors may get something back too. This summer, The Times Educational Supplement pointed out that the West London academy, Ealing, paid £108,000 to businesses and a charity with major connections to Alec Reed of Reed Executive, who sponsors the West London academy. The King's academy, Middlesbrough, paid £290,000 to organisations and individuals connected with Sir Peter
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Vardy, its sponsor. Both academies admitted that none of the work for which those payments were made had been put out to tender, which is a legal requirement in state schools.

In conclusion, the Minister said last year that every town should consider whether it needs an academy, but I disagree, because setting up one independent school funded by the taxpayer but placed outside the system would be to the detriment of any town. Parents want good, local community schools; they do not want a minority of well-funded, star-rated schools outside the system, which will soon reach the point at which they are selecting pupils, rather than pupils are selecting them.

5.30 pm

Mr. Mark Hoban (Fareham) (Con): The debate has been interesting, and the majority of contributors have adopted a sceptical tone towards the Government's policy on city academies.

The hon. Member for Huddersfield (Mr. Sheerman) said that the Government's policy is about autonomy, diversity and choice, although I was not sure from his remarks whether he is for or against that. That sense intensified when he said that he is not against academies—it was not clear from his speech whether he is in favour of academies. The hon. Member for Bristol, West (Valerie Davey) and he both asked whether academies contradict the Government's policy of collaboration. In my experience, people who run academies see their role as working with, not against, local schools. Yesterday, I heard that message clearly, when I visited the City of London academy, Bermondsey. In Shropshire, the Thomas Telford school has used its resources to part-fund two other academies in the area.

The contribution from the hon. Member for Huddersfield was characterised by scepticism, but the hon. Member for Harrogate and Knaresborough (Mr. Willis) abandoned that tone and spoke against city academies—apart from when Liberal councils call for them to form part of the Liberal manifesto. He rightly raised the combined admissions code and its effects. Having talked to a wide range of schools and organisations in the school sector, I get the sense that the combined code is not working well. In some ways, it diminishes choice with regard to voluntary aided schools in particular and grammar schools in part. Schools that act as their own admissions bodies have certainly experienced an increase in the number of applications that they have had to process this year. In some cases, the number of applications has doubled or trebled, because they have had to process applications not only from applicants who have put them first, but those in which parents have rated them as their second or third preference.

The hon. Member for Bristol, West was in a typically celebratory mood about the academy in Bristol. The increase in the number of children who go on to university since the academy has been set up is interesting, and it should be commended and celebrated. She also said that one cannot allow some to steam ahead at the expense of others. If one encourages excellence, however, it helps to drive up standards in other schools. Rather than establishing equality of misery, we should aim for the best for all schools and make sure that, where possible, every school achieves it.
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In a typically thoughtful contribution, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) highlighted the need to expand and improve standards in not only the 5 per cent. of schools that will become city academies, but all schools. He returned to the theme of setting and phonics. The best way to bring about setting and phonics in our schools is to give parents control and make schools accountable to parents rather than politicians. He commented on the relationship between independent schools and performance. Where schools are accountable to parents and responsible for meeting children's aspirations, better performance is achieved and, perhaps, more traditional methods are used.

The hon. Member for Chesterfield (Paul Holmes) continued the hostility towards academies. He criticised the academy in Sandwell for its approach to banding, but had it not taken that approach, he and others would accuse it of creaming off the best. One cannot have it both ways. I know that it is Liberal party policy to try to do so wherever possible, but there are times when one has to be consistent.

Yesterday, I visited the City of London academy in Bermondsey—an excellent school that will make a great contribution towards raising standards in the area. It is an example of a city academy that has been opened to fill a gap in existing schools provision. I have also been to the Greig city academy in Haringey and the Walsall city academy, which are funded by the Mercers Company—the latter academy is also funded by Thomas Telford school. Those are examples of academies that are not funded by businesses, fat cats or entrepreneurs but by people who have a strong educational vision and a commitment to education that has existed, particularly in the case of the Mercers, for many years.

Unlike most Members who spoke, I support the concept of city academies. I welcome the support that they get from their sponsors in terms of finance, education expertise, and the drive to ensure the delivery of improvements in school standards. I also believe that it is right to give schools more freedom and flexibility in organising the school day and introducing innovative approaches to the curriculum and changes to the staffing structure. Those are freedoms that all schools should have, not only city academies.

I welcome the way in which city academies are able to develop their own governance arrangements. It was interesting to talk to someone who has been a governor of a maintained school and has also been involved in the governance of a city academy. His strong message, based on his experience, was that those who are involved in the governance of city academies feel that they have responsibility for what happens in the academy as well as ownership of the problems and solutions. As a governor of a maintained school, he did not feel that he necessarily had the same clarity and focus of responsibility.

Academies have been successful. The detailed rebuttal that the Secretary of State issued yesterday demonstrated some of their successes. He said in his letter:

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He points out:

That shows some of the strengths that academies can provide. Results have improved in seven of the 12 academies that were open at the start of this year. The Secretary of State refers to the Walsall city academy, where attendance rates for pupils who had also been at the predecessor school have increased by 10 per cent. Certainly, the pupils to whom I spoke, especially those who had been to the predecessor school, recognised the improvement in education opportunities that the academy had brought.

Why do so many people oppose city academies? Is it because they have raised the level of attainment of their pupils where so many others have failed? Is it because they show that it is not only the educational establishment that can make a contribution to raising standards in our schools? Or is it because they break the monopoly of LEA provision? We need to focus on what works for our children and raises standards in our schools, not on the arguments of the past.

I shall come to my criticisms of city academies in a moment, but I want first to raise a separate issue. It is highly appropriate that the Paymaster General is in her place. When I was at the City of London academy yesterday, I was told that it is required as part of its funding agreement to have a strong community emphasis, and required under a section 106 agreement to provide community facilities. There is a snag about that. Under the VAT rules for charities, for a school to qualify for zero-rated status in order to recover the VAT on its buildings, more than 90 per cent. of the usage of the facilities must be for charitable purposes. If a school chooses, for example, to rent out its sports hall for use by a community group, and that accounts for more than 10 per cent. of the use of the facility, the school will lose its zero rating. It will then have to pay VAT on the building cost of the school. I understand that the matter has been raised with the Secretary of State and that he will discuss it with the Treasury. Perhaps the Paymaster General will take advantage of the next six minutes to resolve the issue, which restricts the use to which city academies can be put to benefit communities.

We have talked about the freedoms that academies have but let us not forget that they are not a new idea. They are the lineal descendants of the city technology colleges that were set up by Kenneth Baker. Although academies have greater freedoms than foundation schools and mainstream schools, there are some freedoms that they lack in comparison with CTCs.

The first concern that academies have raised with me is that some of the funding for them, particularly standards fund funding, comes through LEAs, not direct from the Government. CTCs receive all their funding directly from the Government. Academies find, especially if LEAs are not very supportive of them—in his evidence to the Select Committee, the Secretary of State highlighted the fact that some LEAs are not as welcoming to academies as others—that there may be delays in receiving standards fund money. They have to go cap in hand to the LEAs for their share of the money. I would welcome all moneys for city academies going directly to them rather than being channelled by the LEA.
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Secondly, those who have experience of both CTCs and academies recognise that CTCs have much greater flexibility over staffing, remuneration and rewarding excellent performance. The academies would welcome the opportunity to receive that freedom as well.

The criticism that I have is that we have not simply two-tier schools with two-tier freedoms but multi-tier freedoms. CTCs have more freedom than academies; academies have more freedoms than voluntary aided schools; and foundation schools have more freedoms than community schools. I believe that all schools should have the freedoms that CTCs enjoy. All schools should have greater freedom to innovate, to create new staffing structures that are right for their schools and the needs of their pupils. They should be able to decide the organisation of the school day best to meet the needs of their pupils. They should be able to develop stronger partnerships with the type of organisations that act as sponsors. They should have the freedom to set their own admissions policies.

One of the success factors behind academies, as I discovered from conversations with those involved in them, is that professionals have been set free. They have had the opportunity to reach the cutting edge of academic performance. That is one of the reasons why academies are successful and will become even more successful. Professionals have been set free to develop solutions that meet the needs of their pupils.

We need also to ensure that academies are not established as a result of bullying, cajoling or persuading LEAs, or because gaps are identified in the structure of schools. Under the right to supply, we will give a range of organisations the opportunity to establish new schools where there is parental demand. We will not be dependent on Government diktat to persuade LEAs to have city academies. We want schools that have those freedoms to be able to involve the private sector, to involve voluntary groups, to involve organisations such as the Mercers that have a long tradition in education and to involve organisations that have a different and positive vision about how we will raise education standards.

Some of those organisations will adopt the methods outlined by my hon. Friend the Member for Bognor Regis and Littlehampton. They will offer what parents want by setting parents free, setting professionals free, giving parents the right to choose the best school for their children and ensuring that more organisations are able to fund a greater diversity and choice in our schools, thus raising standards in all our schools. City academies are part of the answer, but I believe that we need to give all schools the same freedoms that they enjoy.

5.44 pm

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