Examination of Witnesses (Questions 700
- 719)
MONDAY 19 DECEMBER 2005
RT HON
RUTH KELLY
MP, RT HON
JACQUI SMITH
MP, AND MR
STEPHEN CROWNE
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
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