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I do not support amendment 71, but I think that it may be looking for an explanation from the Minister of how the system will work. The hon. Member for North West Durham, who will be an excellent Member of the House and an excellent member of the Select Committee, talked about priorities. That brings me to my favourite topic when dealing with public service reform: incentives. Too often, we reorganise the system without fully understanding the incentives that are in place for the various players in it. We deserve an explanation from the Minister. Given his ability, I know that we will get it. I want to hear how precisely the incentives will work for schools that at times resist parents who are trying to do the best for their children, to the extent that only parents with the nous, money and self-confidence can challenge them and get their child statemented. What happens to the others? I want to hear how the system will work so that, following the changes, it does not become worse. There is nothing obvious in the Bill to make it worse, but I want a cohesive narrative from the Minister about how the system will be better even
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before the Green Paper is produced. I want to be assured that it cannot possibly get worse. We cannot have more parents in that position.

People come to us, as constituency MPs, about all sorts of topics. I can think of many constituents who are particularly articulate, well educated and well placed, and who have relatives and friends in good positions, yet they are still endlessly and unjustly frustrated by a system that can often seem unbelievably resistant to doing the right thing.

5.30 pm

Whenever I meet those people and try to help them-sometimes successfully, sometimes not-I reflect on the people who do not have their self-confidence, education and ability. It is therefore incumbent on us to ensure that legislation creates something that will be more just, not less. We need to hear that from the Minister, as I know we will. I wish we had more time to reflect on the Bill, and that members of the Education Committee from both sides of the House and others were in a better position to improve the Bill, but we are where we are.

The hon. Member for North West Durham talked about the hard-end drift-perhaps it will be called the "Glass drift"-and said that even when money goes in, it somehow drifts away. That must be because of the pressures within the system: the way human beings work-those who do the jobs that she did in the past, parents and people in schools-leads to money not going where people want it to go. It is therefore not enough for Ministers to wish the right outcomes-all hon. Members wish the right outcomes. Rather, they must show that they understand the engineering of the system sufficiently to deliver them. We are dealing with the most vulnerable of our children, and we cannot have an already bad situation made worse inadvertently by Ministers in a hurry who do not have sufficient explanations. I am sure that that is not the case, but I would hate to think it was. We should not be blinded by the desire to appear to be acting if we are doing the wrong thing.

Ian Mearns: Having worked in the system and taken a number of cases to education appeals panels, I have often seen a situation in which council officers think they are doing the right thing by the system by refusing parents what they want, because they believe that other provision is nearly as good but less costly. Does the Chair of Education Committee accept that if parents want provision that costs tens of thousands of pounds a year, allowing that provision incurs an opportunity cost to the system and other children within it?

Mr Stuart: There is always an opportunity cost and people always have to make judgment calls. We need to know who makes those calls, what the pressures on them and their incentives are, and their accountability. It all comes down to that, and understanding what the accountability mechanisms will be if there is a much-increased number of free academies.

Mr Hayes: Rather than waiting till I sum up, may I deal with that point head-on now? My hon. Friend, as Chair of the Education Committee, clearly has an entitlement to ask such penetrating questions-indeed,
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we expect him to do so-so let me be clear. The Secretary of State would decide whether appropriate provision had been made. If not, he would either direct the local authority to make it, or in exceptional circumstances, ask an alternative body to do so. The funding for such provision in the latter case would come in the first instance from the Department for Education, which would then consider how to ensure that funding in the longer term prevails. That is an absolute assurance that the Government take my hon. Friend's point seriously: those powers rest with the Secretary of State.

Mr Stuart: I am grateful to the Minister for that explanation. I assume that in reality, the "Secretary of State" means the Young People's Learning Agency. My understanding is that the systems, embryonic as they are, are probably not as good as they ought to be, and I assume that YPLA officers representing the Secretary of State will do that work. I understand and accept the Minister's reassurance, and I think the Bill has been improved, but I am trying to work out how the pressures and incentives will work to ensure that the school admits fairly and looks after SEN children in the appropriate way when the decision gets all the way down to the school, the parent and the local authority officer, who is quite a long way away from the YPLA officer. I am struggling to imagine what will happen at that level and to think that all the way through.

Mr Hayes: My hon. Friend underestimates himself: I have a very high regard for his imagination.

Mr Stuart: I am grateful for the Minister's compliment, which was not flattery-if I had said that it was, he would have corrected me.

One of the issues in this Bill, which the amendment seeks to draw out, is the system-wide implications of a growing number of schools-including free schools and existing schools-becoming independent and taking away money currently spent on their behalf by the local authority. Those of us of a supply-side revolution, 1980s, turning the sick man of Europe around disposition naturally think that things will regrow and they can be better directed by people closer to the front line. However, we need an explanation, because schools are not businesses and we need to understand how it will work.

I wish to chide the Minister gently, although he may not have been responsible, because the place that one would naturally look for that explanation-it may be a by-product of the last Government's approach-is the equalities impact assessment. At the risk of upsetting my right hon. and hon. Friends, I would criticise the hon. Member for Gedling (Vernon Coaker)-I will pronounce his constituency correctly-because in many ways he has been too gentle about the equalities impact assessment in the last couple of days. I think it is less adequate than he has made it out to be.

The equalities impact assessment is rather thin. It provides fair information, but it tries to put the best gloss on that information. Given that this is an important document to accompany a flagship Bill, I would not expect paragraph 22 to be repeated, in its entirety, as paragraph 24. I would not expect paragraph 23, which is quite long, to be split and repeated in its entirety as paragraphs 25 and 26. It would suggest that someone has not even bothered to read this so-called important
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equalities impact assessment. At the end, I was waiting for an assessment of the system-wide impact and the long-term and profound implication of having lots of free schools. But when I got there I found paragraph 31, which states:

Well, thank you very much. That is not an adequate explanation of the possible system-wide impacts of this Bill.

I know that we will have a master class and a tour de force explanation from the Minister on the system-wide impact and why the Bill will work, but the impact assessment is inadequate. I meant to be gentler about this than I have been-I have a tendency to overstatement -and I apologise to the Minister. But I wish that the impact assessment had been a better document and included more recognition of the potential system-wide impacts, especially on marginal areas-if I may call them that-such as SEN.

Gavin Barwell: I will keep my remarks brief as I am conscious of the time and that the Committee wishes to hear the Minister's reply. I pay tribute to the hon. Member for North West Durham (Pat Glass), who made an exceptional speech. She brings real expertise in this area to the House and I am sure that we will benefit from that in the months and years ahead. I also pay tribute to the hon. Member for Gedling (Vernon Coaker). Both yesterday and today he has approached these proceedings in a much more conciliatory tone than the right hon. Member for Morley and Outwood (Ed Balls) did on Second Reading. That may reflect the difference between Second Reading and Committee stage, or it may reflect the difference in their personalities, but it is certainly appreciated on this side of the Committee.

I disagreed with the hon. Gentleman on whether primary schools should be allowed to be academies and whether surplus places would be a ban on academy status. However, he is right to bring the issue of special educational needs up today. I imagine that all hon. Members have received a briefing from the Special Educational Consortium, which tells us that 21% of children have some form of SEN and that 12% of children with SEN achieve five grade A* to C passes at GCSE, compared to 57% of their peers. That shows the importance of getting this issue right-not just for the children with SEN, but because if we do not get it right there will be an impact on other children in the mainstream setting. The likely impact of this policy on children with SEN is therefore a key test. I am not sure whether the amendment addresses some of the concerns that he raised in his speech, but he is right to ask for some more detailed clarification, particularly in the light of the important amendments that came through on Report and Third Reading in the House of Lords.

It is worth briefly putting on the record the improvements that the Government have already made by ensuring that for the first time academies will have the same SEN obligations as maintained schools. I also want to mention the improvement that I referred to in an intervention that the hon. Gentleman kindly took, which is that the new model funding arrangement now provides that the
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Secretary of State can direct academies to comply with any obligations relating to SEN. Although the new agreement will not apply to existing academies, hopefully many of them will choose to convert to it, given that in other ways it will provide more freedoms. Over time, therefore, the new agreement might spread.

The core of the objections and concerns raised relates to what will happen if many more schools become academies and the pressures that that will put on services provided by local authorities. Yesterday, the hon. Gentleman expressed concern about the scale of the changes-he used the phrase, "opening the flood gates"-although Ministers have provided reassurances on the pace at which they think things are likely to proceed. However, many of the same issues arise over the role of local authorities in school improvement. For example, my council provides a very good school improvement service, which I hope schools will still want to buy into when they become academies.

I want to make three more quick points. First, the requirement for academies to have the same obligations as maintained schools is not in the Bill, but will be in the funding agreements, which means that parents who think that academies are not fulfilling those obligations will need to go to the Secretary of State, I presume, if they have a problem, rather than resort to the law. Not to have to resort to the legal route, but to go to the Secretary of State, might actually be an advantage to parents. However, as the hon. Member for North West Durham said, we should think about this from a parent's perspective, so it would be helpful if the Minister could provide more guidance on how that complaints procedure would work. What does a parent do if they have a child in an academy that they think is not meeting their child's SEN needs? What is the process for making a complaint?

My second point is one that has already been made-it is about the Opposition amendment passed on Third Reading in the Lords on protecting low incidence SEN services. The point made by the hon. Member for Gedling about the need to define exactly what those services are was spot on. It is really important that we get a clear definition, either today or on Monday, as the Bill goes through this House.

My final point concerns children receiving central SEN services. Children with high levels of need will tend to have statements, so the idea that the money follows the pupil and goes to the schools is very important. In my constituency, we have a school called Addington high, which has an excellent unit for children with autism, and most of the children there will have a statement. It is right, therefore, that the money goes to the school, but clearly, as some of my hon. Friends have said, where local authorities are providing services, much will depend on the value that schools place on those services. If they are good services and the local authority is doing a good job, it seems likely that any academy that takes over will want to purchase those services.

The hon. Member for Gedling was right to raise the issues before us, because further clarity is required in certain areas. However, I do not support the amendment, because I am not sure that it directly addresses some of his points. I very much look forward to hearing the Minister's winding-up speech.

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Guy Opperman (Hexham) (Con): I will be brief as well. Many would have liked to speak in this debate, but time is short. I pay tribute to today's maiden speeches, particularly that of my neighbour, my hon. Friend the Member for Penrith and The Border (Rory Stewart). Together, the two of us represent 2,500 square miles-it would cover several countries. He has walked across his, I have attempted to ride across mine, and I can assure hon. Members that I prefer my form of transport. Anyway, he is making great steps and it is great to have him as my neighbour. I also pay tribute to the hon. Member for North West Durham (Pat Glass), who is also my neighbour-we cover so much of the north! She and I have worked for many years in special educational needs, and she spoke eloquently and with great force about the issues.

I look at things from a different angle, having represented local authorities and individual applicants for some 15 to 20 years in special educational needs tribunals and SENDISTs-special educational needs and disability tribunals. I have seen all manner of proposals put forward. In particular, I have represented the Hillingdon association of secondary heads, which is known by the acronym HASH, which is appropriate for all the 1960s head teachers.

5.45 pm

I want to make three points. First, I welcome the fact that the Minister indicated at the outset that the code of practice would be revised and, as I understood it, that that would be legislated for in this House. I hope that that will take place in September, or at the earlier possible opportunity, because the whole problem with this debate is that, as far as an assessment of special educational needs is concerned, there is a parallel process. In that respect, I urge hon. Members to read the comments of Lord Baker of Dorking, who said in another place:

The proposal at present is that the LEA will not be taking over, and that the matter will go first to the Young People's Learning Agency and then, in theory, to the Secretary of State.

Pat Glass: No doubt the Minister will confirm this for me, but I understand that the YPLA is the rump of what was the Learning and Skills Council. If that is the case, does the hon. Gentleman share my concerns about that? I am not aware that the Learning and Skills Council has the level of SEN expertise needed to deliver on some of the things that we are discussing.

Guy Opperman: I hesitate to say that I agree absolutely, but I have great sympathy with the hon. Lady's argument, because the local education authority will have all the educational psychologists and other areas of expertise that are required in these processes. I would question whether the alternative provision exists; indeed, I would go further than that. Everyone who has done a SENDIST case, running it through the myriad reports, will know the tremendous difficulty that exists in obtaining the right level of reports and presentation to push the thing forward. I would suggest that if people have to go to the Secretary of State, things will take much longer and be
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much more complicated. I return to the point that this is not me rebelling; I am just saying that the assertions of the founder of all these kinds of reforms-Lord Baker of Dorking-was clear at the outset of this process that we should keep it very simple and put the matter to the LEA, because it will be best capable of dealing with it.

I accept what the Minister said when clarifying the point approximately 15 minutes ago. He said that there is always a duty to ensure that the needs are met. That is entirely true, but anybody who does SENDIST work will know that there is a parallel duty to perform with the financial resources available. The complication is that there are genuine concerns that the financial resources will not necessarily be available in the processes that are being proposed. That particularly applies where there are special educational needs in more rural areas such as mine, where we have 1,200 square miles to cover, catchment areas the size of the M25 and an ability to provide for those needs, along with the necessary rural transport. However, I have not heard sufficient clarification that those rural transport needs will be accommodated as part of the Bill.

Briefly, let me finish by saying that I do not support the amendment, but I hope that we will receive a great deal of further explanation.

Mr Hayes: We have had a long and interesting debate on this subject, have we not, Mr Evans? It has been a good-natured debate too, with high-quality contributions by hon. Members from across the Committee, who have drawn on their extensive experience and expertise. I defer to those hon. Members who have that professional expertise-expertise that they have been able to articulate today in a way that has shown the House and this Committee at its best, as was made clear in his generous contribution by the hon. Member for Gedling (Vernon Coaker), who I can confirm is a stallion, by the way. [Hon. Members: "How do you know?"] Because I have known him for a very long time, and I know that his reputation precedes him.

On the subject of my friends on the Opposition Benches, I count the hon. Member for Hartlepool (Mr Wright) as a friend, and I have not yet had the chance to congratulate his daughter, Hattie, on her eighth birthday yesterday. I shall do so now, because I want to get it into Ha nsard . In addition, I want to mention that he has a number of other children and I hope that they enjoy "Toy Story 3" when they go to see it on Sunday. Moving on! Time is short.

The amendment would have the effect that, before making any payments under an academy agreement, the Secretary of State would have to assess the impact on local authority-funded SEN services of a new academy or an academy conversion before deciding funding levels for such academies. I had thought that I would have to speak for longer on this subject in order to cover it in considerable detail. I have before me the Balfour Act and the Education Act 1944, along with every other significant education Act at my disposal. It is a sad fact that I will not be able to draw on them, but in the few remarks that I will make, I shall try to answer the salient questions posed by hon. Members.

The hon. Member for North West Durham (Pat Glass) said that there was no definition of special educational needs. They are, however, defined in some detail in
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section 312 of the Education Act 1996. I will not go into those details now, but the Bill will not change them at all; that definition will remain in place and it is important.

The hon. Member for Portsmouth South (Mr Hancock) spoke about autism, and-I say this from the heart-gave a rather moving account of his experience of parents dealing with the challenges of special educational needs. Academies will be under the same obligations as other schools in respect of special educational needs. As I said to him earlier, academies are already providing evidence that they are looking at these matters with appropriate diligence. The Haberdashers' Aske's Hatcham College academy has an autism unit, for example, of which other schools are taking advantage. However, I heard what the hon. Gentleman said today, and we will ensure in our study of special educational needs in the Green Paper that autism receives the particular attention it deserves. I have worked closely with the Lincolnshire Autistic Society, and I know of the good work done by that society and others. The hon. Gentleman has done a service to the House by raising that matter today.

My hon. Friend the Member for Mid Derbyshire (Pauline Latham) asked two specific questions. Yes, although we intend to convert special schools into academies, we understand that that will need to be done on a considered and measured basis. We need to do work on the issue of funding in particular, and we will do so before the conversions take place. She also asked about the role of the health service in respect of children and young people with SEN. Primary care trusts contribute to the costs of individual placements as well as supporting pupils. Their responsibility is to the whole population, however, so that funding should be unaffected. The costs of non-maintained special schools remain with the local authority, and none of that budget will be transferred to the academies.

My hon. Friend the Member for Beverley and Holderness (Mr Stuart), the Chairman of the Select Committee, asked a number of questions. I have dealt with the question of the Secretary of State's responsibilities. I can confirm that, as he suggested, the YPLA will be instrumental in ensuring that those responsibilities are carried out. A number of hon. Members asked how a parent could complain if an academy did not meet a child's special educational needs. That was a theme that emerged implicitly throughout the debate.

Let me make it clear. An academy must have a clear complaints process, and a parent who wished to complain would have to be dealt with in line with that process. If that complaint were not satisfied, the YPLA would enforce the obligations in the funding agreement. If that does not prove satisfactory, a complaint about the YPLA can be directed to the Secretary of State, who will enforce those obligations in the courts if necessary.

My hon. Friend the Member for Hexham (Guy Opperman) made a number of points about parents who, he said, would not have the wherewithal required. He said that these things were all very well in theory. I spoke earlier about redistributing advantage in society. I am very conscious of the need for us to get the statementing process right, given how often it disadvantages parents in that position.

My hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), the Minister of State, Department for Education-with whom I have worked
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hand in glove in the House for many years-will be looking closely at the whole issue of statementing. We understand some of the concern that has been expressed. It is crucial for parents of the kind described by my hon. Friend the Member for Hexham to be dealt with appropriately, fairly and reasonably, rather than being bemused and bewildered by a process that is bureaucratic and insensitive to their circumstances.

The amendment raises issues similar to those that were raised in another place. As Members have pointed out, the main issue is the fear that an increasing number of academy conversions will render local education authorities unable to maintain the level of centrally funded services that they currently offer. That fear is not without grounds, and I entirely agree that we must consider it. I am also convinced, however, that we will have time in which to do so. The number of schools that will convert in September will not be large enough to have a significant impact on local authority services.

I see the hon. Member for Gedling egging me on, stallion-like, but I have a number of other things to say which I hope will satisfy him.

Of course some local authorities already have a majority of secondary schools as academies. Those academies were approved by the last Government, who funded academies in the same way as the current Government intend to fund them. However, we also intend to review funding from 2011 onwards. We will be working closely with local authorities and other partners, and I can confirm that we will give specific consideration to the funding of SEN services. That consideration will be in addition to the Green Paper that I mentioned earlier. The work will take place over the autumn, and as my noble Friend Lord Hill, the Under-Secretary of State for Schools, said yesterday, we have instructed officials to ensure that the Special Educational Consortium is involved in the work.

We are committed to ensuring that children with special needs in both the maintained and the academy sectors receive the services that they require and, indeed, deserve. My commitment to children with special educational needs stretches a long way back. As a member of the Government, I will do nothing that would act to their detriment, and we as a Government will do nothing in respect of the academies programme that would disadvantage them or the people who care for them in any way. I am pleased to be able to put that on the record.

Barry Gardiner (Brent North) (Lab): I am sure that the whole Committee will welcome the Minister's assurance, but he also mentioned a review of funding in 2011. Can he tell us what impact that might have on the commitment in the Bill that the funding agreement will last for at least seven years? How will the two interact?

Mr Hayes: The hon. Gentleman should bear in mind what I said a moment ago. We would not expect special schools to be in the first tranche of academies, and we will review the funding before those schools become academies. That is entirely consistent with the Bill. We hope that when the schools have become academies the arrangements will be in place, and the seven-year period will kick in after that.

We have also set up an advisory group to help us to work through, in particular, issues relating to SEN and special schools. It is because we want to use the practical
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expertise in the sector that the group includes heads and governors from special schools-including the non-maintained sector-and mainstream schools with specialist units, as well as local authority representation at officer and political level. As Lord Hill said in another place, the Government undertake to monitor the impact of the increasing number of academies on local authority SEN services and will continue to work with local authorities to ensure that adjustments to their funding with respect to the academies properly reflect their changing responsibilities. Make no mistake: local authorities will continue to have key responsibilities in respect of SEN, including their responsibility to statement children. We intend to ensure that that is properly funded.

6 pm

Officials will also be working with organisations such as the National Sensory Impairment Partnership on this matter. Where particular issues arise, I hope to reassure Members by committing to consider very carefully the local authority representations that I have just mentioned and, indeed, the contributions from both sides of the House during the Committee. I entirely understand what the hon. Member for Gedling said about Bills being improved by Ministers listening closely and carefully to Members of this House and that is very much the spirit that imbues this coalition Government.

We will commit to making adjustments to local authority funding arrangements to ensure fairness; for example, local authorities can ask us to take account of SEN units housed in maintained schools so that funding for such units does not form part of the resources distributed to academies. That point was also raised by the hon. Member for Gedling.

Members will be aware that an amendment was made in the other place to provide safeguards-indeed, the hon. Member for Gedling has referred to it repeatedly both today and yesterday-for the provision of children with SEN. I can confirm that we have accepted the amendment and that we intend to take the necessary steps to ensure that SEN children are protected as the noble Lords intended.

On the other questions that I have not yet answered in this all too short peroration-I am not suggesting for a minute that all questions do not deserve an answer- [ Interruption. ] I can hear what the hon. Member for Hartlepool (Mr Wright) is saying. I described him earlier as my friend; he is now paying me back.

The hon. Member for Gedling asked about the definition of low incidence SEN. The Department has commissioned a report on low incidence needs and the project specification lists definitions. We are determined to ensure that the new provisions in the Bill are reflected in the SEN code of practice, which has always been a fundamental part of implementing policy.

The hon. Gentleman also referred to looked-after children. Funding for looked-after children is, as he knows, the responsibility of the education authority, and funding for educational psychologists too remains with the local authority and does not transfer to the academy. Both are outside the schools budget. I accept entirely the point about the need to retain the quality and quantity of peripatetic services. I am confident that academies will purchase those services and will face up to the responsibilities that Members across the House
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have made clear are so close to the intentions of those who value the role of teachers, respect the wishes of parents and regard seriously the needs of special needs children.

The admissions code requires all schools, including academies, to give priority to looked-after children when making decisions as to which children to admit. That does not change as a result of the Bill. I can commit today to including within the academy model funding agreement a requirement for all academies to have a designated teacher with responsibility for looked-after children. That comes as a result of overtures made outside the House and of the comments made from both sides within the House. The law relating to governing bodies' obligations relating to SEN is in part IV of the Education Act 1996. The code of practice must also be taken into account. The academy funding agreement applies these obligations to academies, and we are absolutely sure and certain that that will not change. The hon. Member for Gedling also raised issues about how these things will develop over time. Of course it is true that we will need to consider how they develop and what changes will need to be made as a result.

Let me conclude, however, because I do not want to delay the House too long. I do not want to stretch your indulgence to its famous but limited degree, Mr Evans, and I do not want to go further than my colleagues would wish in making these immensely generous concessions to the hon. Gentleman, but none the less I want to say the following. I have enjoyed the debate not merely because it has been a good example of Parliament in action, but because it has highlighted the very wide measure of agreement that exists between those on the Front Benches and throughout the Chamber about the significance of special needs provision and the importance of maintaining it. The Government are absolutely determined to do that in the interests of special needs children and their parents, whatever structures we put in place.

On that basis I assume that because we have been so reasonable and generous, the hon. Gentleman will rush to his feet in a moment and beg to ask leave to withdraw his amendment.

Vernon Coaker: I agree very much with the Minister that this has been an excellent, high-quality debate. There were many contributions, and may I begin by apologising to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) for not being present for his maiden speech? I understand, however, that it was excellent, and I am sure he will be a worthy replacement for a friend of ours, Angela Smith. I wish him well in Parliament, and we look forward to hearing further contributions from him.

I was not quite sure whether the contribution of the hon. Member for Penrith and The Border (Rory Stewart) was a second maiden speech or a maiden, but although he did not agree with me, I still thought it was a reasonable speech, if that makes sense. [Interruption.] No, I say in all sincerity that it was a good speech. Tribute was paid to his predecessor, David Maclean, by the hon. Member for Portsmouth South (Mr Hancock), and we all had great admiration for the way in which he battled against some of the difficulties he faced. I am sure the new hon. Member for Penrith and The Border will be a worthy addition to the House and I wish him well.

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I want to pay tribute to some of the other speeches made, particularly that by my hon. Friend the Member for North West Durham (Pat Glass). Many Members have paid tribute to her contribution. Her speech was not only very well informed, but very moving. The power of the stories that Members can bring to the House from our experience as professionals outside it makes a huge difference, and there was great credibility in what she said and we all learned from her remarks. I am sure we will continue to benefit from her contributions as she pursues her parliamentary career. I also thank the hon. Member for Croydon Central (Gavin Barwell) for his generous remarks about my approach and for the conversations we have had about many of the matters we have been discussing today.

I am also very grateful to the Minister for his reply. It is clear that the Government are thinking of making a number of significant changes-I do not want to use the word "concessions" as that makes it sound as if there was a battle-on the issue under discussion as a consequence not only of this debate, but of contributions outside the Chamber. I have to say that some of the concessions-the changes-that are now being made ought to have been made before. I am not trying to be churlish; I am saying that because these are such important matters. As the Chair of the Select Committee said, the evidence base for the Bill-the impact assessment and the equalities impact assessment-really is not good enough, given the Bill's importance. These are essential documents that go alongside a Government Bill. I say to the Minister and his colleagues that they are extremely important documents because they are the evidence base on which Government legislation is supposed to be based. The Chair of the Select Committee was harsher than I was, but I must say that those documents did leave quite a bit to be desired.

We are all pleased to hear about the Green Paper, the welcome review of SEN funding for academies, and the Minister's commitment to examine the role of local authorities and to ensure that their role is properly recognised in the system as things progress. There was also a specific recognition of one of the points raised. I am not saying that this happened because of the point I raised, but I did say that the model funding agreement that had been published did not contain a requirement for a teacher in the academies to be responsible for children in care, and the Minister responded by saying that that will be changed. That, too, is very welcome.

It would be churlish of me not to say that significant change has been made as we have progressed through our consideration of the Bill, and that is very welcome. The amendment seeks to push the Government to recognise that important problems remain in how this structure has been set up. The definition of low incidence SEN and low incidence disability is fundamental to the Bill, but we are passing a piece of legislation that contains no definition of that.

As Members from across the House have said, that is a recipe for confusion, litigation and lawyers, because how is a local authority, an academy or whoever supposed to know whether they are meeting the requirements of the legislation, given that we currently have no criteria for determining that? I know that the Minister has given a commitment for this to be contained in codes of
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practice and in other places. In the spirit of trying to be helpful, may I say that it is essential that that kind of clarity is provided in respect of legislation, particularly with something that is such a key part of the Bill? I know that he will take that on board and take it forward.

The Minister has tried to address the other aspect of what our amendment was trying to ensure, but confusion remains as to what the funding will mean for individual schools and what it will mean for the amount of funding that is left for local authorities in terms of that central provision, which will be essential. Confusion also remains about the co-ordinating role in order to ensure that all of our young people get the support that they need. How the Secretary of State is supposed to do that from the centre right down to school level is a real problem, given that the Young People's Learning Agency is supposed to be the vehicle by which academies are held to account. The YPLA is a new body, and it has no experience of dealing with special needs or of this provision. So to rely upon it as the vehicle or body that will try to ensure that the Secretary of State is informed about whether an academy is appropriately using the money that it gets to support children with SEN is simply a wish rather than something that the Government have evidence to demonstrate will actually work.

This has been a hugely important debate, and the Government have made some significant concessions. It is a shame that we cannot amend the Bill to give it the legislative and statutory force necessary to give all of us the reassurance that we need. However, given the Minister's concessions, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Clause 7

Transfer of school surpluses

Mr Iain Wright (Hartlepool) (Lab): I beg to move amendment 61, page 5, line 22, leave out from 'proprietor' to end of line 23 and insert 'to appeal to a Local Commissioner'.

The First Deputy Chairman: With this it will be convenient to discuss the following: amendment 62, page 5, line 25, leave out 'review' and insert 'appeal'.

Amendment 63, page 5, line 26, leave out 'review' and insert 'appeal'.

Amendment 64, page 5, line 43, at end insert-

'"Local Commissioner" has the meaning given by section 23 of the Local Government Act 1974.'.

6.15 pm

Mr Wright: I begin by paying tribute to the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes). I class him as a good friend. He is a kind and courteous man and I am sure that my daughter Hattie will be very pleased that she has been mentioned in the House again. He is more than welcome to join us for "Toy Story 3"-indeed, I see him as the Buzz Lightyear of the coalition Government. To infinity and beyond!

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May I clarify a point made by my hon. Friend the Member for Gateshead (Ian Mearns), who was in the Chamber assiduously this afternoon, until I got up, when he left? He mentioned that his area produces angels, and in many respects he is right-Gateshead is a fantastic place-but I think that he was referring to the angel of the north, which is a strong and proud icon of our region of the north-east, and I should point out to the Committee that the angel of the north was fabricated in Hartlepool. That is an important point.

I shall be brief, because there is not a lot of time left and there is a lot of work still to do. It was very important that we had considerable debates on Building Schools for the Future and on special educational needs. Clause 7 requires that where the Secretary of State approves a maintained school's application to become an academy, the local authority must determine whether, immediately before the conversion date, the school has a surplus and, if so, the amount of the surplus. Once that is done, the local authority must pay the surplus over to the proprietor of the academy.

Subsection (4) states that regulations may be brought forward on how the payment of any identified surplus could be made and subsection (5) lists what those regulations can include. An important part of those regulations would be the manner in which the proprietor of the academy can apply to the Secretary of State for a review of the determinations. I argued in Committee last night that the nature of the Bill is to force schools to consider that their most important relationship is not with local parents or pupils but with the Secretary of State.

This is a centralising Bill that concentrates power and decisions into the office of the Secretary of State. The Opposition think that there should be more independence from Whitehall and more power for local people, which could include the proprietor of the academy. On that basis, amendment 61 would replace the idea of the proprietor going directly to the Secretary of State to ask for a review and allow the owner of the new academy to appeal to a local commissioner.

Amendment 64 would make it clear that the term "local commissioner" has the same meaning as that given by section 23 of the Local Government Act 1974, which essentially means the local government ombudsman. That is a well-recognised route for conducting investigations into local matters and gives a degree of impartiality and independence because the local commissioners are appointed by the Secretary of State for Communities and Local Government. We think that the Secretary of State for Education, under the provisions in the Bill, is responsible for a number of things, namely entering into an academy arrangement, making an academy order and reviewing the transfer of school circumstances among other things. There does not seem to be any effective challenge to the single authority of the Secretary of State, which is one reason why we have tabled the amendments.

The inclusion of the word "review" is also somewhat vague and does not give reassurance and confidence to the proprietor of the academy, or to anybody else for that matter, that a proper procedure will be followed. Amendments 62 and 63 would strengthen the wording of the Bill by leaving out the word "review" and inserting the word "appeal", which gives a sense, in our opinion, that a proper and transparent process must be adhered
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to. The amendments would not increase any bureaucratic burden on any interested party, but they would provide a degree of certainty and reassurance for stakeholders, particularly the proprietor of the new academy. For that reason, I am interested to hear what the Minister has to say about the amendments, and I commend them to the Committee.

The Parliamentary Under-Secretary of State for Education (Tim Loughton): It is a pleasure to participate in this debate. These four amendments have been grouped together because they concern the appeal procedure. It is our policy that a maintained school that converts to academy status should take with it any funds that it has accumulated in previous years. I do not think that that is news to the shadow Minister. Schools might have earmarked such funds for particular purposes and we would not want them to be prevented from carrying out their plans as a consequence of their conversion to academy status. The Bill therefore makes provision for that and for an academy to appeal to the Secretary of State, as we see fit, where it believes that the local authority has wrongly calculated the appropriate amount.

The Opposition's amendments would change the whole appeal process so that the academy would appeal to the local government ombudsman rather than the Secretary of State. I think the shadow Minister characterised the measure as being centralising rather than localising, but we do not believe that what the Opposition suggest is appropriate. We have published draft regulations to enable hon. Members to see the Government's intentions in this regard. The draft regulations state that the local authority would have to determine, within three months of the conversion date, whether the school had a surplus immediately prior to the conversion date and, if so, the level of that surplus. That is consistent with the usual period for finalising local authority accounts at the end of the financial year and should give sufficient time to calculate accruals and commitments accurately. If the academy's proprietor did not agree with the determination, they would have one month from being informed of the determination to apply to the Secretary of State for a review. On receiving such an application, the Secretary of State would have three months in which to determine whether the school had a surplus and, if so, the amount of that surplus, and to inform the academy's proprietor and the local authority of those determinations.

If there has been a review, the local authority must pay over any surplus within a month of being informed of the Secretary of State's determination. If there is no review, the authority would have to pay over any surplus within one month of either the proprietor informing the authority that they agreed with the determination or at the end of the period in which the proprietor may apply for review-whichever is earlier. That is very clear.

Mr Wright: Will the Minister clarify something? If a decision is made by the Secretary of State following a review, would the proprietor of the academy have a right to appeal that decision?

Tim Loughton: If the hon. Gentleman bears with me, there is a further explanation that might satisfy him.

Decisions regarding financial disputes of this kind should rest with the Secretary of State, as they do currently. The Secretary of State is responsible for making a decision when the local authority and schools forum
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disagree about the operation of the minimum funding guarantee or about the level of central expenditure retained by the local authority in the schools budget. The Secretary of State is also able to approve additional arrangements when local authorities request to have school finance regulations disapplied and so is well used to evaluating these issues.

What is proposed would be an unnecessary extension of the role of the local government ombudsman, whose role is to deal with complaints from members of the public about local authorities rather than to deal with disputes between two publicly funded bodies about the detail of financial accounts. We do not think it appropriate for that role to lie with the ombudsman. Dealing with that sort of dispute is already an established part of the Secretary of State's role. On that basis, we do not think that the amendments are necessary and I urge the hon. Gentleman to withdraw the amendment

Mr Wright: I thank the Minister for clarifying the situation, but I still am not entirely certain about the right to appeal. If a review had taken place and the proprietor was still unhappy with the situation, would they be able to appeal again to the Secretary of State or an independent body? We have suggested that they could appeal to the local government ombudsman, but there could be other routes; we are quite flexible about that. Will the Minister clarify that?

Tim Loughton: I thought I had made this clear, but obviously I have not. The Secretary of State's decision is final, so the Secretary of State will be the final arbiter.

Mr Wright: I thank the Minister for confirming that. My fundamental concern about this aspect of the Bill remains the same, namely that it seems to be a very centralising Bill. It diverts the relationship away from a school thinking about local stakeholders, and having a good, constructive partnership and collaborative arrangement with local people, pupils, staff and so on, and towards having a direct relationship with the Secretary of State. I thought that was contrary to what the coalition Government would want to do with regard to empowering local people. In that respect, I remain unhappy.

Jeremy Corbyn (Islington North) (Lab): Is there not a problem with the lack of accountability of the Secretary of State? The Secretary of State effectively approves the transfer of funds between the local authority and the academy, in one way or another. If there is a dispute, it is resolved by the Secretary of State, who gave his approval in the first place. There is no obvious transparency in the system, as far as the Secretary of State is concerned, and it is not obvious where one goes if either party simply does not accept the Secretary of State's decision.

Mr Wright: I certainly agree with my hon. Friend. The Secretary of State has made it clear that he is keen to expand academies as quickly as possible, so he has a vested interest in making sure that that happens. Then there is the decision on the transfer of surpluses; as my hon. Friend says, the Secretary of State is the final judge and jury on that issue. There is an inherent conflict of interest between various bodies, and I am
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concerned about that. There is a general concern about the complete lack of consultation with local stakeholders on the provisions, and I remain concerned about that.

Tim Loughton: To respond to the point made by the hon. Member for Islington North (Jeremy Corbyn), there are many areas of schools business where the final decision will remain with the Secretary of State, and that is proper, but remember that the Secretary of State needs to have regard not just to the future and the financial viability of academies, but to the sustainability of other schools, which will continue to be administered through local education authorities. The Secretary of State is interested not just in academies, but in all schools.

Mr Wright: I thank the Minister for his contribution. I am keen for him to intervene again, because I still think that the word "review" is very vague. It does not set out in any degree what the process would be, so that the proprietor of the academy could be reassured that appropriate processes had taken place. Our amendments 62 and 63 would tighten up the language of the Bill. They would ensure that there was not a review, to use that broad, somewhat ambiguous word, but an appeal. That would help to clarify certain matters in the Bill. I would be happy for the Minister to respond further on that point.

Dan Rogerson: I am intrigued by this role reversal: the hon. Gentleman is standing up for the proprietor of the academy against the local authority in this instance. It seems a reversal of the way in which the arguments have gone throughout the day. It strikes me that we are talking about a one-off instance, not a continuing relationship. Once the decision has been made, the academy is in the area, doing things with the local community. On his point about the provisions being a centralising measure, what he describes may not happen in every case, and the measure is a one-off.

Mr Wright: The hon. Gentleman makes a fair and reasonable point. I am anxious to proceed with business; I want to put it on the record that that is one of the reasons why my hon. Friend the Member for Gedling (Vernon Coaker) and I did not press amendment 71 to a vote. I understand what the Minister is saying, but I still think that this is a centralising Bill. The comments of the hon. Member for North Cornwall (Dan Rogerson) put the matter in a wider context. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.30 pm

Mr Iain Wright: I beg to move amendment 76, page 5, line 34, leave out from 'time' to end of line 36 and insert

The First Deputy Chairman: With this it will be convenient to discuss amendment 66, in clause 8, in page 6, line 22, leave out 'property, rights and liabilities' and insert 'property and rights'.

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Mr Wright: As I mentioned earlier, clauses 7 and 8 are significant elements of the Bill; they change dramatically the current situation on the transfer of school surpluses and property. It is worth reiterating the point that I made about clause 7. Clause 7(2) requires that when the Secretary of State approves a maintained school's application to become an academy,

Under clause 7(3), once that is done the local authority must pay the surplus over to the proprietor of the academy. As I said earlier, that represents a fundamental change to the current landscape, as at the moment surpluses of closing schools remain with the local authority. That includes cases in which an existing school is closed to become an academy.

A school might have built up a surplus for many reasons. Shared facilities might generate an income, for example, or a local authority or other party might have provided additional funding for work in the community and the maintained school might have been encouraged to build up a surplus to ensure that the new community facility could be built or established. That has certainly happened in my constituency, and I am sure that it has happened in other Members' as well. In Hartlepool, a sports centre has been built on the estate of a particular school, through increased funding from various sources and surpluses held by that school. The understanding is that it will be used by other schools and by community groups.

Under the terms of the Bill as it stands, in such a situation the surplus would be transferred to the new academy, and any benefit to the wider community that was originally envisaged-the original purpose of the surpluses-would be lost. What reassurances can the Minister give to ensure that that does not happen? What is the Minister doing to stop a situation in which, somewhat late in the process, a school that has built up surpluses and is anticipating the building of a new community or shared facility on its estate, following negotiations with the local authority, then decides to convert to an academy?

That could happen without real consultation, but the school would hold on to those surpluses. The issue comes back to unilateral decisions that fail to take into account the wider community and collaboration between schools and the local education authority. In essence, the amendment tries to probe the Minister by asking what checks and balances he will insert into clause 7 to ensure that such surpluses are identified as appropriate and constitute value for money.

Mr Graham Stuart: Why would a school that had built up such surpluses to provide a community facility for joint use suddenly wish to deviate from that when it sought to become an academy? I am not saying that that would be impossible, but the hon. Gentleman seems to be suggesting that it would be the norm.

Mr Wright: I am not suggesting at all that that would be the norm, but we could provide a control mechanism in the legislation on this issue, to tighten up the existing provision. We are not suggesting that the transfer of
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surpluses should not take place, but wider circumstances might be considered that could prove detrimental to neighbouring schools.

The whole Committee would agree with the need to see transparency and value for money in all aspects involving public money and public assets. To respond to the Chair of the Education Committee, I should say that, essentially, clause 7 moves taxpayers' money from the public sector to the private sector. What controls is the Minister proposing to ensure that that is subject to appropriate balance, scrutiny, transparency and probity?

Mr Graham Stuart: It is surely unfair to say that the clause moves resources to the private sector. We are talking about an independent state school, but it would still be a state school and not part of the private sector. Yesterday evening, the hon. Gentleman made a desperate effort to change the wording to "free market schools" rather than the wording in his amendment; that suggested more political desperation than is the norm with him.

Mr Wright: I thank the Chair of the Education Committee and I entirely understand his point. Perhaps I should moderate my language in Committee. However, the point is essentially the same: how do we ensure that local taxpayers get good value for money? Like the equalities impact assessment, the impact assessment of the Bill is somewhat vague and light on detail. It states:

Will the Minister outline the evidence base for this? No mention whatever is made of the transfer of surpluses in this regard. In preparing for the Bill and with regard to the impact assessment, what work has been done in relation to surpluses that could be transferred to the academy? I would be interested in any information that he could provide about that.

The purpose of amendment 76 is to address those concerns about transparency and accountability and to try to ensure that there is an appropriate process.

Dan Rogerson: I am not sure whether the hon. Gentleman intends to discuss amendment 66, which is grouped with amendment 76. I may be misreading those amendments, but as I understand it, they are contradictory, because one of them seeks to remove liability while the other seeks to offset liabilities and surpluses. What is the thinking behind that?

Mr Wright: I will come to that, but I assure the hon. Gentleman that the amendments are not contradictory-they are trying to address a similar problem and to ensure that we can resolve this issue.

Amendment 76 would ensure that all existing and contingent liabilities, including any liabilities that have been incurred on behalf of the school by the local authority, should also be considered. In this context, I take the contingent liability to mean a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence of one or more
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uncertain future events not wholly within the existing school's control. An example could be outstanding legal cases. We discussed in Committee last night the possibility of legal challenge from staff who might not have had the opportunity or the time to consider properly the TUPE arrangements of moving from a maintained school to an academy-a point that has been well articulated by my hon. Friend the Member for Blaydon (Mr Anderson). That might be considered a possible contingent liability.

Another example, which has been discussed this afternoon, could be any liabilities arising under current private finance initiative arrangements. We had an interesting debate about amendment 70, with particular regard to PFI. One of the risks is that a local authority could have a potential 25-year period of liabilities arising from PFI, and converting a maintained school to an academy means that the academy has no way of being liable for that payment over that quarter of a century. What reassurance can the Minister give in that regard?

Mr Graham Stuart: May I take the hon. Gentleman back to TUPE and the speech last night by the hon. Member for Blaydon (Mr. Anderson), who was passionate about the uncertainty that could beset many employees of schools? Will he, as the Minister did, but from his side of the House, put their minds at rest? Can he confirm that when a school converts and becomes an academy, the staff will have no reason to believe that they will have any different conditions, and that it is therefore hard to see exactly what great liabilities could be in store in that transfer?

Mr Wright: I am not suggesting that there would automatically be any sort of change or reduction in terms and conditions. However, the freedoms and flexibilities, and the movement away from national terms and conditions and pay scales, could provide a degree of anxiety for staff, particularly low-paid staff who may have given good and loyal service to the local education authority for many years. For example, staff might think that they have had insufficient time to consider what converting to an academy might mean, and therefore, in conjunction with the union, take their employer to a tribunal. Perhaps that should be considered as part of a contingent liability. We need to ensure that all possible scenarios have been considered when taking into account the transfer of surpluses.

Clause 8 allows for the transfer of other property, and amendment 66 would remove the word "liabilities" from subsection (5)(b), which refers to the apportionment of properties, rights and liabilities. In response to the point made by the hon. Member for North Cornwall (Dan Rogerson), the reasoning behind the amendment is similar to the point that I made earlier about contingent liabilities. I reiterate that there is a particular concern about arrangements such as those under the private finance initiative regarding the transfer of liabilities, and the potential for them to be apportioned between the local authority and a new academy. In a PFI arrangement with 25 years of payments still to go, we must ask how appropriate costs should be so apportioned, and the amendment is an attempt to resolve that question.

We reason that if an academy is to operate as an independent school with full autonomy and freedom from the local authority, it should be responsible for full
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liability under any PFI arrangement in respect of the school. That seems balanced and fair, and I ask the Minister whether he is opposed to it.

We seek reassurance from the Minister that local authorities, which will face immense financial pressures over the next few years, with enormous potential cuts and pressures from changing social circumstances such as the ageing population, will not be liable for the debts of schools that have transferred as well as having to cover the costs of central services such as payroll, human resources and other infrastructure that they were, and will be, providing to maintained schools. I hope that he can provide that reassurance, and I commend the amendments to the Committee.

Tim Loughton: I seek to provide the shadow Minister with some reassurances on the various concerns that he has raised about surpluses. I support his objective that the whole system should be transparent and properly accountable. I think he is perhaps unduly concerned, but he is right to tease out some more information through what I believe are probing amendments. I shall address them in order and then turn to his points on the PFI.

Amendment 76 would widen the definition of the surplus to take account of all liabilities not being transferred to an academy, including any liabilities that a local authority incurred on behalf of a school. In calculating the surplus, local authorities will follow normal accounting procedures and take into account expenditure in respect of which work has been done or goods received but invoices have not yet been paid. As we see the new converters as continuing schools, we will seek to ensure that local authorities are not left to fund any remaining costs that would otherwise have been charged to the school's budget-that is only fair. If a school has ongoing commitments such as an internal loan, we will expect it to continue those payments and the local authority to accept that.

For the same reason, it would not be appropriate to offset against the surplus any liabilities incurred by the local authority on behalf of the school that would not otherwise have been charged against the school's budget. We understand that closing the old school's accounts can be a lengthy process, and that authorities are concerned that they might pay over a final cash sum to the academy in accordance with the regulations, only to be left later with outstanding bills without any funding, which would not be fair.

We are drafting guidance on the calculation of surpluses, which I hope will give the hon. Gentleman the assurances he seeks. It will cover debtors and creditors, bank accounts and internal loans and is being developed with partners including the Chartered Institute of Public Finance and Accountancy. There is also a model commercial transfer agreement for adoption by the school's governing body, the academy and the local authority, which will deal with possibilities such as he described.

Mr Iain Wright: I thank the Minister for his clarification and welcome the fact that guidance will be provided. Can he give us any reassurance about the status of that guidance? Will it be, say, in secondary legislation subject to a negative resolution of the House, or will it be simply a press release on the Department's website?

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Tim Loughton: I do not know. It is right for the hon. Gentleman to ask-we will give him the information as soon as possible. It is a policy matter and, in the interests of transparency and accountability, we will ensure that we keep him informed of how the guidance is being worked up, unless I am told something while I am on my feet.

We expect all those matters to be agreed between the local authority and the governing body before conversion, and for the new academy to work within that agreement. The power to make a scheme under clause 8 is a reserve power for the Secretary of State to exercise in the absence of agreement, to ensure that liabilities are appropriately covered.

6.45 pm

In a similar vein, amendment 66 attempts to remove the Secretary of State's ability in clause 8 to apportion liabilities when considering a property transfer to an academy company. To revert to the question of the hon. Member for Hartlepool, the guidance will be non-statutory.

Under clause 8, the Secretary of State has the power to make a scheme to transfer the property of a maintained school, about which an academy order has been made. The scheme may include any liabilities of the school. It may provide for their transfer to the proprietor of the academy that replaces the school, and that will be the legal entity-an academy trust-that enters into a funding agreement with the Secretary of State.

As with the agreement between academies and local authorities on the academies surplus, I expect that, in the majority of cases, property, rights and liabilities would transfer to the academy by mutual agreement, without any need for the Secretary of State's intervention, and there would not generally be any need to apportion liabilities between the school and the academy. However, that might be necessary in relation to contractual liabilities, where it would not be fair for the academy to take the burden of liabilities incurred when the school was a maintained school. A good example of that might be insurance contracts, when it would often be appropriate for the liability for personal injuries to remain with the local authority for the period before conversion, and for the academy to take them from the point of conversion, or other contracts, when it would not be fair for the academy to take responsibility for the actions of its predecessor. That is normal practice in other such arrangements.

That will depend, of course, on the circumstances of the transfer: it may be much fairer if the school is a converter by application of the governing body than if it is a new academy replacing one eligible for intervention. However, the provisions of the clause need to cater for all those situations. We think that they do.

It is important that the Secretary of State can transfer appropriate liabilities in any transfer scheme and share out existing and future liabilities in a fair way. On that basis, we do not think that the amendments are necessary.

The hon. Gentleman asked specifically about PFI. In a PFI scheme, a local authority typically enters into a contract with a PFI contractor, under which the latter agrees to build a school and keep it in good condition for 25 years, and often to provide additional services such as catering and maintenance during that period. During that 25-year period, the authority has several
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obligations, for example, making monthly payments to the PFI contractor and not wilfully impeding the contractor and its subcontractors in the performance of their obligations. If the authority does not comply with its obligations, the PFI contractor can claim damages and ultimately terminate the contract and receive compensation. The value of a PFI contract is typically tens or hundreds of millions of pounds. The worst case scenario, in the event of any breach of contract, is that the authority would have to compensate the PFI contractor for the full value of the contract.

How, therefore, are we handling PFI for converting schools? We will not attempt to buy schools out of a PFI contract-that could cost many millions of pounds for each school and would not represent good value for money. Instead, the school remains in the PFI contract and the Department indemnifies the local authority against any losses that it might incur as a result of any act or omission of the academy trust that now occupies the land and buildings. That indemnity is necessary because authorities do not have the power to ensure that the academy trusts will not act in such a way as places the authority in breach of the terms of the PFI contract.

Our approach ensures that local authorities are financially no better or worse off as a result of a conversion, and those arrangements are set out in legally binding agreements that need to be negotiated between the Department, the local authority and the academy trust. I hope that that gives some assurance on the hon. Gentleman's specific questions about PFI.

Mr Iain Wright: That sounds like a potential nightmare, and an awful lot of work needs to be done on it. The impact assessment mentions the negotiations between the DFE and DCLG only very briefly. What further information and clarity can the Minister give the Committee to ensure that good cross-departmental work is done so that local authorities are not penalised financially?

Tim Loughton: Such negotiations are not only between the DFE and DCLG; it is also a Treasury matter. We have had discussions involving those parties. I have heard what the hon. Gentleman has said and in ongoing discussions, we will take note of his point. However, I think he is unduly concerned. He quite rightly said that it is a complicated matter, but we have looked at the PFI scenario to ensure that there are no contingent liabilities that could queer the pitch for the authorities or academies involved. The Government believe that amendments 76 and 66 are unnecessary. It is appropriate that he has used them as probing amendments, but on the basis of those assurances, I invite him not press them to a Division.

Mr Iain Wright: The Minister has clarified many of my concerns, but some remain. This is another example and illustration of the Minister and his team legislating in haste. They may have to unravel much of the Bill in subsequent legislation in the next few months and years. I hope that he keeps the Opposition informed about discussions with his colleagues in DCLG, because I do not want local authorities to be liable for anything that could harm them financially in the next few years.

I hope that the guidance is slightly more than just that. It would have been a good idea to subject it to the negative resolution of the House. The Minister could
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have reflected over time and perhaps tabled a Government amendment on Report to that effect, but alas, that option is not available to us.

I am anxious to move proceedings on. I hope the Minister and his team will keep us informed. I understood him when he said that I was unduly concerned, on which basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clause 8

Transfer of other property

Mr Iain Wright: I beg to move amendment 65, page 6, line 38, at end add-

'(11) The Secretary of State before making a property transfer scheme shall consult with-

(a) the local authority;

(b) the current owner, if not the local authority;

(c) such other persons as the Secretary of State considers appropriate.'.

An identical amendment was tabled in the other place by the noble Baroness Sharp of Guildford, and the rationale behind the proposal remains sound. The clause allows the Secretary of State to "make" a property transfer scheme, which might involve the transfer of IT equipment and other assets. I mentioned last night the weakness in the Bill regarding consultation, and amendment 65 would improve the consultative process. It seems perfectly reasonable to the Opposition that the local authority and the current owner-if that is not the local authority-are consulted to ascertain what should happen to other property or assets, and whether they could be used elsewhere in the area for alternative educational provision.

In speaking to the identical amendment in the other place, Baroness Sharp also said the clause does not mention consultation with interested parties that might be affected by such a transfer, such as catering contractors. My hon. Friend the Member for Blaydon (Mr Anderson) and I made a similar point last night about proper consultation with hard-working staff within the estate, such as catering and cleaning staff, as well as consultation on other assets such as IT equipment.

The amendment would mean a much smoother transfer from the existing school when it converts to academy status. The Minister in the other place said that he would reflect on the matter, and I believe that clause 10 arose as a result of that reflection. However, what should happen to other property, because that too should be subject to wider consultation? There should be proper consideration on important assets, of which the most important are the people who will be affected by the transfer. By doing so, we would ensure a much smoother, less painful and more considered transfer.

Mr Gibb: Clause 8 gives the Secretary of State the power to make a scheme to transfer the property of a maintained school in respect of which an academy order has been made. Amendment No. 65, ably moved by the hon. Member for Hartlepool (Mr Wright), would
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require the Secretary of State to consult the local authority or other owner or any other appropriate persons before making a property transfer scheme that would affect, among other things, desks, computers and the assets of any existing school.

In the case of converting academies, we intend that there should be a seamless transfer between the existing maintained school and the academy, as part of which the school will clearly need to be able to continue to use its property, and to take advantage of contracts into which it may have entered, such as those for cleaning, catering and insurance. It may also need to transfer the benefit of trust funds left in trust for pupils or the school. The trust-say, a bursary for art left to the school many years ago in the will of a benefactor-may well mention the name of the predecessor school, and clause 8 would enable it to be transferred to the new entity of the academy.

Jeremy Corbyn (Islington North): In this consultation, is there a specific undertaking given by the Government that in any transfer they would consult the staff or staff organisations of those employed by contractors in one building, as my hon. Friend the Member for Hartlepool (Mr Wright) pointed out in his contribution?

Mr Gibb: In earlier debates we talked about TUPE. If staff are subject to the TUPE regulations, all the relevant consultation processes would apply. But if the hon. Gentleman is talking about a contractor who works neither for the previous maintained school or the local authority, and who will not become an employee of the academy, his or her employment rights continue to lie with the contracting company, not with the predecessor school or the academy.

Jeremy Corbyn: My point is that if there is a contract for, say, computer maintenance, with clear employment implications, and it is transferred, the employment requirement also carries on. If it is not transferred, there would be employment implications to which the Secretary of State might be blind because he is looking only at the transfer of property.

Mr Gibb: In those circumstances, the contract would transfer under this clause, but the employment rights would be between the company that is the subject of the contract and the employee, who is not employed either by the predecessor school or the successor academy. The employment rights would not change because the contract would continue with the employer, who would not change.

I should say that we anticipate that the making of any scheme under the provisions of this legislation will be rare. We hope that, in most cases, the transfer of property in connection with a school converting to an academy would be, as now, by agreement among the parties. In most circumstances, a transfer of contract would take place by agreement. That would be our starting point for any property transfer, and this would ensure that all those with an interest in the transfer of such property would be involved in negotiations about their potential transfer. Therefore, we would not get to the point of considering making a scheme under this clause until such discussions were exhausted. It is therefore inconceivable that anyone with an interest in the property to be
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transferred would not be consulted on a possible transfer in advance of any scheme being made. There is no reason why the Secretary of State would go to the trouble or expense of making a scheme if matters could be resolved amicably. There might be some contracts though, where the other party might try to use a transfer to obtain further financial benefit. The possibility of the making of a scheme would remove that incentive. The provision is an attempt to prevent the possibility that someone might be able to leverage financial compensation, knowing that the transfer has to take place. It is to avoid that possibility that this clause is in place, so that the Secretary of State can make a transfer against the wishes of people who are party to the contract.

The amendment is therefore unnecessary and I ask the hon. Member for Hartlepool to withdraw it.

Mr Iain Wright: In the large amount of time I have available, I would like to say that the Minister has explained a lot, and to be fair he has gone some way further than the Minister in the other place-

7 pm

Debate interrupted (Programme Order, 19 July).

The Chair put forthwith the Question already proposed from the Chair (Standing Order No. 83D), That the amendment be made.

Question negatived.

The Chair then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Clauses 8 ordered to stand part of the Bill.

Clauses 11 to 13 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 14 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 15 ordered to stand part of the Bill

The occupant of the Chair left the Chair to report progress and ask leave to sit again (Programme Order, 19 July).

The Deputy Speaker resumed the Chair.

Progress reported; Committee to sit again on Monday 26 July.

Business without Debate

Adjournment of the House (27 July)

Motion made,

Hon. Members: Object.

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John McGrath

Motion made, and Question proposed, That this House do now adjourn.- (Miss Chloe Smith.)

7.2 pm

Anna Soubry (Broxtowe) (Con): Before I begin the Adjournment debate I will let hon. Members leave, as I anticipate and understand they will, given the hour.

As you will know, Mr Deputy Speaker, I bring to the House's attention a very serious and tragic matter. It is almost a year to the day since John McGrath was killed by his grandson, William Barnard. John McGrath's wife, Mabel, was seriously injured in that unfortunate incident. William Barnard was sentenced last month and is now in Rampton secure hospital, where he will be, no doubt, for a considerable time, because at the time of the incident he was seriously ill, suffering from paranoia and schizophrenia. Those who were supposed to be in charge of his care in the mental health services team available to him have helpfully provided a report that goes into considerable detail about the events that led up to that dreadful incident.

I will not go into the detail of that report. It is available for anybody to read if they contact me or Nottinghamshire Healthcare. However, it is clear from the report that there was a significant and serious failing in the care and supervision that should have been enjoyed by William. That is deeply regrettable, because this incident happened without that care and supervision. Had he had it, this tragedy would not have occurred. I am grateful that the Minister has come along today, and I know that, if time allows, he will meet the family. On their behalf, may I extend to you, Mr Deputy Speaker, their thanks for allowing me to address the House in this way? In short, they are very keen to ensure that John McGrath did not die in vain.

The report contains many recommendations. The NHS trust in Nottinghamshire, Nottinghamshire Healthcare, assures me that it has learned many lessons and has said the failings identified that will not happen again, as a result of the recommendations that it is determined to implement. However, through this debate, I want on behalf of the family to ensure that everyone-every team, every trust, every authority-not only reads the report, but understands the failings that it identified and is made aware of the recommendations that it contains, in order to ensure that such a tragedy never occurs again anywhere else in the United Kingdom.

I will quote from the report in time, but I would like to begin by talking briefly about John McGrath. John earned the nickname Dr John, because of his kindness and his willingness to help anyone who came his way, in any way that he could. At the time of his death he was almost 82, and he and Mabel lived in Stapleford, a small town in my constituency. William was the son of their youngest daughter Kathleen. The couple had three other children, all of whom are in the Public Gallery today, as is Mabel. Her other grandchildren, and William's sister and her boyfriend are also here.

As the report says, William Barnard is part of a large and supportive extended family, who played a significant role in providing care for him under extremely difficult circumstances. I have met the family and they are remarkable. They are an example to us all of the sort of love and support that we wish we could all enjoy. They
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are good people. Indeed, it is perhaps testimony to the sort of people the family are that they have come to this place today with a file containing other cases-cases that I know will cause the Minister great concern, as they concern us all-cases of other people who were meant to be in the care of mental health teams and workers, but who unfortunately did not receive the care and support that they should have had, and either killed or injured other people. I know that the Minister will take that dossier and read it.

It is because of the love and support within that family that they have always had great concern for William, to whom I want briefly to turn. In his late teens, he began to exhibit signs of a serious mental illness. He spoke to his mother, who at that time was training to be a nurse. She knew that there was a problem, and together they engaged with mental health services. Again, I will not go into all the detail-the appendix to the report makes clear some of their dealings with mental health services-but it is clear that, from 2002, he exhibited many of the symptoms of a serious mental illness. That, if I may say so, was clear for all to see.

I am no expert, but if I may say so, in 2007 William was exhibiting some of the stereotypical behaviours of somebody in need of serious help and assistance. There were a number of unfortunately very typical symptoms shown by people who experience such an illness, but the important features included a non-engagement with, and suspicion of, mental health care workers and their team. There was also a lot of evidence that William was at great risk of inflicting serious harm to himself through self-neglect. I would say that there were also features-I have read about them in the appendix-that should certainly have caused those responsible for his care to be alerted to a potential risk to other people.

Today I was shown a photograph of Will, as he was known by his family, from when he was well. He was described by his family to me as a gentle giant, and in the photograph-I am sure that the family and he will forgive me for saying this-one can see a rather chubby-faced young man, and he is smiling. He looks happy, and he is clearly well. That stands in sharp contrast to the photograph that has appeared in some of the local papers-understandably so-of William on his arrest. In that photograph, he is a gaunt, haunted young man. That just shows how his illness had affected him.

In 2007 going into 2008, William was sectioned, which was largely due to the efforts of his mother. Again, it was clear that he had a problem, with a lack of engagement with, and a great suspicion of, those charged with his care. Indeed, he escaped from hospital in Derby. He was, in effect, captured-again, it is thanks to the family that he was detained-and he returned to hospital, before being discharged in due course from that Mental Health Act order and returning to Stapleford, into his loving and caring family.

Because of the nature of William's illness, he should have been looked after by the assertive outreach team. In my work as a criminal barrister, I have represented a number of people who have suffered from mental illness. I have come into contact with some of the people who work with people with mental health difficulties and serious mental illnesses, and I have not met one who did
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not have the most remarkable skills, and a commitment to the person in their charge. They perform a difficult job, and often struggle to resolve huge conflicts. The outreach team in this case was well staffed and well equipped. According to the report, its members were trained. So this was not one of those cases involving a pitiful lack of funding or staff, or any other such deficiency. There were enough people; that was not the problem. The problem was a lack of care and supervision. No one took responsibility for William's care. According to the dossier that the family has handed to me, that is all too common a feature of these terrible tragedies.

In December 2008, William refused to take his medication. That is typical of people with these conditions. He did not take his medication for some seven months before the incident, and those charged with his care knew about that. There were 30 attempts to make contact, but they resulted in only four face-to-face meetings, some of which were only fleeting. For four months before the incident, he was not seen by any professional health team workers at all. There were, however, 11 recorded occasions on which the family contacted the assertive outreach team, and 13 other instances in which other people and agencies, including the pharmacist and even the police, contacted the team to express their genuine, well-founded concerns.

The report talks about an "excessive passivity" in the management of William's case, and a lack of information and detailed knowledge. It describes a breakdown in the assertive outreach team's function. Concern was expressed by some workers, and I do not seek in any way to go behind that. No doubt there were people who were there to look after William and who had concerns about him, but the lack of communication and the systemic failings meant that no positive action was taken. There was no proper analysis of the signs of William's deterioration. According to the report, there was "confusion" and "inaction", as well as ineffective leadership and absent leadership. The report is a damning indictment of what happened in this case. It reveals a systemic failure.

I want to give the House an example, which makes profoundly sad reading. On 20 April, a meeting was called to consider the information that had been placed before the team. It was decided that Will would be monitored for six weeks, after which time a further meeting would be held to reassess his case and to decide whether he should be sectioned under the Mental Health Act. No one made a proper note of what was to happen, however; certainly, no one carried out any work. No review date was set, and there is no record of any action being taken. Worse still, perhaps, was the fact that no attempt was made to see Will for a month.

On 15 June, reports were received from the police and from the pharmacist, who, according to the report, did a remarkably good job of trying to get this young man the help he needed. There were also reports from the family. All kinds of alarm bells should have been ringing loudly at this point, but again, nothing was done or planned. On 24 July, Will was deemed to be an acute risk, not only to others but-most importantly, it could be said-to himself. There was another failed visit. Those who attended his flat saw blood on a door handle, and strange writings and other things on his door. All that clearly indicated that this young man was in desperate need of assistance. Again, his family was
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spoken to, and his grandfather spoke of his grave concern for the grandson he loved so much. And that grandson loved him and saw him very much as a father figure. A request for a Mental Health Act assessment to be carried out that very day, as it should have been, was turned down, and a decision was made to wait until the following Monday. By then, of course, it was too late, for it was on that very day that this dreadful incident took place.

The real question to be asked is, "What is to be done, and why are we in the House of Commons raising this matter?" We know that there is to be a report from the strategic health authority, and we look forward to reading its comments and recommendations. We believe that there will also be a coroner's inquest report, as well as the report to which I have referred.

As I have said, lessons must be learnt, not just by Nottinghamshire Healthcare NHS Trust-which has given me an assurance, for whose assistance I am grateful, and to whose representatives I have spoken at length-but throughout the country. We are keen to ensure that when reports such as this are produced, whatever tragedy they concern, it is not one of those cases in which all that happens is that someone says, "Yes, we will carry out all the recommendations." Perhaps that is done for a short period, but there is no long-term, regular audit to ensure that everything that should have been put right has indeed been put right for the future.

The other thing that everyone wants is for families to be far more involved in the care of people like Will who mean so much to them. According to the report, there was a lack of interaction, and we want that to change. Of course there are some cases in which the family does not need to be involved, and of course there are real conflicts over the autonomy of a patient; but in this case, as in so many others, the people involved should have been listened to, and should have been involved to a greater extent. It could be said that William's grandparents, Mabel and John, were themselves vulnerable people to whom a duty of care was owed. They should have been listened to, and they should have been involved.

As a result of an Act introduced by the last Administration, those who work with people who suffer from the sort of illness from which William Barnard suffered, and still suffers, have powers to enter homes. They also have powers to ensure that someone who should be taking medication and is not doing so can be "recalled"-a criminal barristers' term-to hospital. I ask the Minister to ensure that everyone involved in local health services is aware of those powers and willing to use them, and that the assertive outreach teams that exist throughout the country do exactly what it says on the tin, and are assertive in their care and support.

7.17 pm

The Minister of State, Department of Health (Mr Paul Burstow): I congratulate my hon. Friend the Member for Broxtowe (Anna Soubry) on securing what I think is her first Adjournment debate. Adjournment debates provide an opportunity for issues such as this to be debated in the House, and for the Government to account for what they are responsible for and ensure that others do the same. It is entirely appropriate for such a tragic and distressing case to be raised in an Adjournment debate.

22 July 2010 : Column 690

Our thoughts must go first to the family whose lives have been turned upside down by this devastating incident. I offer them my deepest sympathies. As my hon. Friend said, members of the family are in the Gallery listening to the debate, and I look forward to meeting them afterwards and discussing the case with them directly. I fully understand their desire to ensure that something positive comes out of this terrible tragedy. As my hon. Friend said, our priority now is to ensure that the NHS learns from the incident, at a local and also, where appropriate, at a national level. I have asked my officials to look carefully at the issues raised by the case as they consider the future direction of mental health policy.

I shall say a little more about the national context later, but let me begin by focusing on the local issues. As my hon. Friend explained, Nottinghamshire Healthcare NHS Trust launched an internal investigation, which reported in April. It is a frank and honest account of what went wrong, and it gives the local NHS a good basis on which to improve the safety and effectiveness of its mental health teams. All that precedes the full external and independent investigation that the strategic health authority will commission in the near future. The trust has assured me that since the internal report came out it has taken active steps to address the weaknesses identified. It tells me that it is improving records management, strengthening communication between teams and reviewing its policy and procedures for assertive outreach. It is also addressing the way that mental health teams assess and manage risk, as well as looking at leadership issues and how they manage a patient's condition over the long term.

In addition, the trust has reviewed the cases of every patient using assertive outreach services to ensure that their care is not being compromised by the same failings. It has commissioned an external review of its assertive outreach teams, which is due to report in a fortnight. I have been reassured that the trust's board will examine the findings and respond swiftly and diligently to them. My hon. Friend and I would agree that all that work must feed directly through into better and safer practice on the ground. Crafting objectives and principles is one thing; achieving tangible improvements to practice is quite another.

My hon. Friend is absolutely right to emphasise the issues of strong leadership and clear lines of responsibility in assertive outreach teams. I can tell her that what should happen is that every assertive outreach patient has a named care co-ordinator. The co-ordinator takes overall responsibility for the appropriate assessment, care and review of the patient. There is no nationally prescribed model for who must take on that responsibility. I do not think that it is sensible to start prescribing how local teams are structured or run through a mandatory code. After all, patients' needs will differ, and so will local circumstances.

However, there must be clarity. Everyone should know who is responsible for what, and people should be properly qualified, skilled and supported to discharge their responsibilities. The trust accepts that point. It tells me that it has set out a clear process for responding to service users who have not adhered to the agreed level of contact. Team managers are now responsible for monitoring that. I also understand that a risk assessment expert has spent a week with the assertive outreach team and is now developing a risk training programme for all staff. That training will be delivered in October.

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Building on that point, I have also asked the trust about its quality assurance procedures. Assertive outreach obviously depends on strong relationships across different teams. That can be hampered if people change jobs, or if the continuity is broken in some other way, so the right quality assurance process is vital. Change has to be embedded within the organisation through regular and robust assessment of the competency of assertive outreach teams. In this regard, the trust tells me that it has improved clinical and managerial supervision as well as its performance management arrangements. For instance, attendance at multidisciplinary team meetings is now compulsory for anyone involved in a patient's care. Team managers now carefully monitor attendance at these meetings, and ensure that all actions coming out of the meetings are properly followed up.

I am keen that lessons from this tragedy are shared and absorbed by the rest of the NHS. In our White Paper, we talk about an NHS freed from the endless succession of top-down mandates and departmental circulars. That is the right approach. We want to replace command and control with much stronger local accountability, with councils in particular taking a much stronger role in working with the NHS and holding it to account. We have also said that the NHS will focus much more on achieving better outcomes; there is a debate to be had about what those outcome measures will be. A consultation is happening over the summer, and outcomes for mental health patients will form part of those discussions.

However, cutting the Whitehall apron strings does not mean abandoning our duties to look at local incidents and consider national repercussions. I will not pre-judge the external investigation. My hon. Friend would not expect me to do that, but I can tell her that the external investigation will be sent to the National Confidential Inquiry into Suicides and Homicides by People with Mental Illness as a matter of course. The inquiry team will consider the findings as part of its regular reviews of homicide investigations. The National Patient Safety Authority would respond to any points of national concern raised by the independent investigation.

In addition, my hon. Friend may be aware that the NHS already flags patient safety incidents via the NPSA's national reporting and learning service, and if a trend or pattern emerges the NRLS can issue an alert to all relevant providers. Those alerts would give advice to the NHS on how to prevent such events from occurring.

My officials have contacted the NPSA about the specifics of this incident and it says no similar problems affecting other assertive outreach teams have been reported
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to it. Therefore, I will be particularly interested to see the dossier of evidence and I will follow that through.

Mary Macleod (Brentford and Isleworth) (Con): This incident was very movingly described by my hon. Friend the Member for Broxtowe (Anna Soubry), and I do not think it is an isolated incident-I think it has happened elsewhere around the country. Can the Minister give an assurance that the lessons from this case will be learned across the country and that it will change the way things are done in the future?

Mr Burstow: In terms of the systems as they work now, we will do all we can to make sure that that learning is embedded, but I am concerned that my inquiries today have shown that the NPSA was not aware of this dossier and I will therefore look into that, and look at the dossier itself in order to see what it can teach us.

However, I want to reassure both hon. Ladies-and other Members-that if the independent investigation were to make recommendations with national implications, we would look at them very closely and make sure they were translated into action and learning around the country.

Let me end by saying that mental health professionals have an extremely difficult and challenging role; the hon. Member for Broxtowe was right to acknowledge that. The judgments they make are often finely balanced, and the risks they shoulder are considerable. Most professionals are doing an excellent job, and we ought to acknowledge that while also being concerned where practice falls short, but sometimes there are failures in care that could and should have been avoided. Tragedies like the case of John McGrath demonstrate the need for constant vigilance, scrutiny and self-improvement.

When such tragedies do happen, it is vital that all responsible authorities, both local and national, are honest about the weaknesses and diligent about putting things right for the future. Like the hon. Lady, I will take a close personal interest in the independent investigation and the coroner's report. I want to ensure that this incident leads to improvements, because that is probably the only consolation that can come from such a tragedy.

That is my message to the McGrath family and the hon. Lady who has secured the debate tonight. I look forward to meeting the family shortly to discuss these matters further and to working with colleagues across the House to make sure our mental health services protect and give good quality care for people with mental health needs.

Question put and agreed to.

7.28 pm

House adjourned.

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