Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 700 - 719)



  Q700  Helen Jones: What will happen if the trust fails? What will happen to the land and other assets transferred to that trust?

  Ruth Kelly: They would revert to the local authority or to the governing body. It depends who owns the assets.

  Q701  Helen Jones: The trust owns the assets, does it not?

  Ruth Kelly: If they are local authority assets they revert to the local authority.

  Mr Crowne: The assets in the school are held by the governing body. The trust itself has no access to those assets. If the trust fails or indeed the school fails or closes, those assets revert to the local authority.[4]

  Q702  Helen Jones: Can we try and clarify the exact role of a trust? I think you have said that a trust as a charitable body will have to have certain charitable objects laid down in relation to the school, but it can add other objects. Any charity can by going to the Charity Commission. What would happen in a situation where those charitable objects which a trust might want to add—I am thinking of a worst case scenario—were deemed to be incompatible with the charitable objects it has to have to run the school?

  Ruth Kelly: That is not the situation, as I understand it. We will be working with the Charity Commission to outline exactly what objectives are ruled in and ruled out. We are absolutely clear however that it has to have an educational purpose.

  Q703  Helen Jones: You also said to me that while the delegated budget for a school would have to be applied for the purposes it is now applied for in the school, other income would normally be under the control of the governing body. "Normally" implies that in certain circumstances—I think the example given in the answer was income from lettings and so on—it might be used elsewhere, does it not?

  Ruth Kelly: The situation at the moment is that the school can use some of its resources for family learning and so forth. I would expect that trust schools will be able to do the same sorts of things precisely with their incomes as is currently the situation.

  Q704  Helen Jones: Can I read you what the answer was? Perhaps you can clarify it. You said that delegated budgets would be under the control of the governing body. "Similarly, income generated by a trust school from activities such as letting the school premises will also normally come under the control of the governing body rather than the trust." That seems to me to envisage a situation where it might not come under the control of the governing body. Can you think of examples of when it might not do so?

  Ruth Kelly: The trust will not be able to make a profit out of its relationship. That is ruled out. Secondly, the trust must have an educational objective as outlined in the charitable constitution of the trust. Thirdly, it is the governing body which takes those decisions about income and so forth. There are all sorts of technical issues that we still have to set out in regulations. For instance, precisely how services are bought and sold and so on. I do not see any reason to think somehow the trust will be able to benefit.

  Q705  Helen Jones: I can think of an example in health, for instance, where a trust did change its objects from operating in one particular area to being able to operate in a wider area and that is quite possible within charity law.

  Ruth Kelly: We have not set out the regulations on this yet. In due course we will do that. These are the sorts of issues that need to be clarified.[5]

  Q706  Stephen Williams: I want to follow up an answer that Mr Crowne tried to clear up about the reversion of assets if a trust fails. If I understood you correctly, you said that if the assets were originally LA property they would revert back to the LA if the trust failed. What if they are new assets provided by the trust?

  Mr Crowne: Any asset that the trust brings to the school which is funded not from public funds is for the trust to dispose of. We are not expecting to have leverage over that. The principle is any asset which has been supported by public funds should be retained for public use. That is how we ring fence the publicly funded resources in the system.

  Q707  Stephen Williams: If a trust were to build, say, a new sports hall on LA land, it is going to be quite complicated, is it not, to unravel that?

  Mr Crowne: We have the same kinds of issues now where you have voluntary-aided schools or other kinds of foundation schools with foundations. It is not new territory.

  Ruth Kelly: We apply the same rules.

  Q708  Stephen Williams: Trust schools are effectively the eye catching initiative of this White Paper. Do all the other proposals within this White Paper essentially depend on a large number of existing schools converting to trust status?

  Ruth Kelly: Absolutely not. This White Paper is all about driving up standards for the most disadvantaged children. What we are trying to do is give schools the flexibility they need to be able to meet that agenda, the resources and staff they need and the ability to network in the system. All schools will be able to take advantage of the flexibilities that they think are right for them.

  Q709  Stephen Williams: How many schools will take advantage of the opportunity to convert to trust status?

  Ruth Kelly: We do not have targets. This is something that schools will have to decide, whether it is in the interests of their pupils to take up this option. I think the evidence is such that there are huge potential benefits on occasion but clearly the trust would have to make that case to a school and the school would have to decide that it is in the interests of its pupils to go down that route.

  Stephen Williams: This is one of the few areas where the Department does not have targets. The newspapers have been mentioned several times today. I read this in The Times on the train, on the way from Bristol this morning, from John Dunford, the general secretary of the Secretary Heads' Association: "I believe the concept of trust schools will be widely ignored by heads but I am against the introduction of a new category of schools and a new raft of regulations and the prospect of returning to a two tier system for education." I am sure you are used to the NUT blowing a raspberry to government proposals but if the general secretary of the head teachers' organisation is cold about this concept how many schools do you think will take this up?

  Q710  Chairman: One of the head teachers' associations.

  Ruth Kelly: Absolutely. There are others who are more enthusiastic. I talk to individual school leaders who are very enthusiastic about the prospect of being able to develop collaborative arrangements more simply and quickly in the future. There are some people who think that trust schools are a brand new category of school and have not quite realised that what they are doing is taking the system as it is and allowing an extra degree of flexibility.

  Q711  Chairman: If anyone is to blame for that, it is you and other members of the Government. Are you really saying that this whole notion of independent trust schools being a new category does not come from the Government? Surely, you are hoist on your own hyperbole about this because certain people in the Government said it would mean hundreds of new independent schools. It was really hyped when the White Paper was launched. You know that members of the Government did that, did they not?

  Ruth Kelly: I do not think that is the case. I have read some of what has been written since then. Frankly, allegations have been made about what is in the White Paper that are completely untrue.

  Q712  Chairman: We know what is in the White Paper but the concept that this is a new category does not come from this Committee and it does not come from the media; it comes from the Government, surely?

  Ruth Kelly: Legislatively, it is the same as a foundation school with a foundation.

  Q713  Chairman: When this came out, it was not clear. You are saying it was clear from the very beginning that this was the same as a foundation school?

  Ruth Kelly: If you are setting me the challenge to explain this better, I fully take up that challenge.

  Q714  Chairman: The reason you have me excited about this is because you sort of put the onus on other people saying that this was a new category of school.

  Ruth Kelly: What we are doing is allowing schools much more easily in the future to take advantage of existing flexibilities. We build on the best of what there is and we take it to the logical conclusion. The same as proposing a devolution of power downwards, we are proposing that certain strategic powers are lifted upwards to the level of the local authority.

  Jacqui Smith: The intention of the question was wrong in many ways. The idea that the only thing the White Paper is about or, as you described it, that the eye catching initiative is trust schools is wrong. The eye catching initiative of this White Paper is how we can strive to ensure that every child in this country gets the sorts of standards of education that they need. It is pretty important and the answer to that question is through the whole variety of policies that we spell out in the White Paper, starting from how you make sure that young people have a more personalised education and you give them the opportunity to catch up, through to how you engage parents, through to the new opportunity for schools to build on what we have seen in specialist schools and academies that the trust model offers them. All of those things build to what the White Paper is about.

  Chairman: Many of us would agree with that but what we do not agree with is that somebody else started the hare running called independent trust schools.

  Q715  Mr Chaytor: How many specific additional powers will trust schools have that foundation schools with a foundation do not have?

  Ruth Kelly: They are the same vehicle legislatively. The only thing we are proposing is that foundations in the future ought, as voluntary-aided schools now do, to be able to appoint the majority of governors.

  Q716  Mr Chaytor: In the White Paper it says that in the future all schools will be either trust schools or foundation schools. That implies two separate categories.

  Ruth Kelly: There is confusion about the terminology. I fully accept responsibility for this. When I looked at this in the beginning, we had foundation schools that are to all intents and purposes local authority schools that are self-governing. We have foundation schools with a foundation that are slightly different. They have a backer and work as we propose a trust should. I thought the landscape and terminology were so confusing that we ought to try and call them self-governing schools because that is constitutionally what they are, foundation schools, and foundation schools with a foundation self-governing trust schools. Legislatively, they are the same thing.

  Q717  Mr Chaytor: It is now even more confusing because we have foundation schools, foundation schools with a foundation and trust schools.

  Ruth Kelly: Foundation schools will all be called self-governing and foundation schools with a foundation will be trust schools.

  Q718  Mr Chaytor: There will be no longer a category of foundation school?

  Ruth Kelly: In legislation they are still referred to as foundation schools.

  Q719  Mr Chaytor: Who will call them self-governing schools if they are really foundation schools?

  Ruth Kelly: We are trying to describe what they do.

4   Note by Witness-The response is not quite right; the assets are not held by the governing body. The assets would normally transfer to and vest in the trustees rather than the governing body. The arrangements when a trust school closes "will require the trustees of a closing trust school to apply to the Secretary of State for Education and Skills to exercise her powers and direct that the land either be returned to the local authority or to pay to her or the authority the whole or part of the value of the land". Or transferred to the governing body/trustees of a new school. Back

5   Ev 167 Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 1 February 2006