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Lord Henley: My Lords, I hope that I can deal with a number of the points the noble Lord raised, though whether I can satisfy him on all remains to be seen. I certainly suspect that I cannot satisfy him on the basic principle and on the power, about which he is unhappy, that we are taking on, because quite simply there are ideological differences between us. The noble Lord and his party do not like the private sector. I have no qualms whatsoever, and if I think that the scheme can be better administered by the private sector and at a saving to the taxpayer that is certainly the route I should like to pursue.

The noble Lord said that there was only one option for us--privatisation or contractorisation, or whatever. That is not the case. We shall look very carefully at all the six bids. I can give the noble Lord an assurance that if none of those six bids is satisfactory in the various ways that we wish them to be satisfactory we shall maintain the status quo. I can also assure him that we shall not accept any bid unless there are really genuine savings. As my honourable friend in another place put it--or perhaps not in another place but somewhere else--we are not just doing this for sixpence.

Perhaps I may also assure the noble Lord on redundancies. There may be redundancies. It is quite right that if someone can administer such a scheme with fewer people, they should so do. It would be wrong to maintain people in employment when there was no job for them to do. However, I can assure the noble Lord that we believe that they will be protected by the TUPE regulations. But that is a matter for any successor company to take advice on itself. Our understanding is that that would be the case.

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Perhaps I may briefly answer a number of the noble Lord's questions. I am grateful to him for giving me some idea of those questions in advance. I assure the noble Lord that, as he put it, my honourable friend Mr. Squire has already written to various of the noble Lord's honourable friends answering most of the points that he was unable to answer in the time available. If the noble Lord would like me to put that letter in the Library, I shall be more than happy so to do. I detect assent from the noble Lord.

The noble Lord asked why we commissioned KPMG to advise on only one option for the future administration of the scheme. I assure the noble Lord that the purpose of the report was to establish whether letting the contract to the private sector was feasible and whether it offered scope for greater efficiency. When we announced the period of consultation on the future of the TPA, we made clear that we were looking to secure further efficiency improvements but that we had not yet decided how best to do so and that letting a contract to administer the scheme was only one of the options available. We considered various options before deciding to invite expressions of interest for a contract. As I made clear to the noble Lord, if none of the offers coming forward from those six organisations is suitable, we shall maintain the status quo.

The noble Lord asked in effect why we were inviting tenders now when we decided in 1990 against letting contracts. Both in 1990 and now our key concern has been the same--to find the most efficient way of ensuring that teachers and retired teachers receive high quality pension service. Setting up the initial operation of the Teachers Pensions Agency has shown that letting a contract is indeed feasible. The KPMG report concluded that letting a contract offered a prospect of substantial improvements in efficiency and effectiveness. All six companies have declared that they would intend to seek a fee for administering the scheme that was lower than the expected cost of keeping the administration of it in the public sector. I believe we owe it to the taxpayer to find out whether such additional savings are available. That is why we invited tenders, and that is why we shall let a contract only if it will offer better value for money than keeping the administration of the scheme in the public sector.

The noble Lord asked what we meant by "core administration". All six companies that we have invited to tender intended to keep the core administration of the scheme in Darlington. By "core administration" we mean the functions the TPA currently carries out in Darlington to administer that scheme efficiently. That is what they have all offered to do. I hope that will provide the kind of assurance to those working for the TPA currently in Darlington that the noble Lord is seeking.

The noble Lord also asked about the Hoskyns contract. That is a contract between the Government and its contractor for new IT systems for the TPA. It is subject to litigation. Therefore I am afraid that it would be inappropriate for me to comment further at present. I am sure the noble Lord will accept that.

The noble Lord then asked who, as he put it, would pick up the tab if the contractor failed. I have to say that we certainly do not expect that to arise. We are satisfied

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on the basis of the evidence so far that all six companies are thoroughly reputable organisations. They all have access to substantial financial resources, and the relations between their staff and management are sound. We shall not let a contract unless we are satisfied that the company in question would administer the scheme, as I have stressed on more than one occasion, to the standard required. However, the Secretary of State will remain responsible for the scheme.

In the very unlikely event that the contractor failed, the Government would ensure proper and effective administration of the scheme just as we would if the Teachers Pensions Agency failed for any reason whatever. There is a risk of mistakes or failures in both the public and the private sectors. Risk can never be totally avoided. Our task is to avoid and minimise that risk so far as possible. We shall certainly make sure that appropriate arrangements are in place to do that, and we shall ensure that there are commensurate arrangements following the letting of the contract.

Finally, the noble Lord asked whether we would publish the comments of companies on the draft statement of service requirements. We shall not because they would be commercially confidential. But we shall take account of the comments we receive from all the bodies that we have consulted before finalising the statement, and any contractor would have to deliver a standard of service performance at least as high as that which the TPA would achieve. Draft statements provide for such a standard and so will the final version of the statement, which we shall make available to the interested parties. There is simply no question of allowing companies, or anyone else for that matter, to water down the requirement of the statement and certainly none has sought so to do.

I hope that what I have said deals with all the questions which the noble Lord put to me and that he will accept it as the answer. I accept that there is an ideological difference between us, but that, in time, as the party opposite moves further and further towards us, it will recognise the benefits of the private sector. If only it would, it would be a great step forward. With those assurances and that explanation, I hope that the noble Lord will accept this order.

On Question, Motion agreed to.

European Communities (Definition of Treaties) (Statute of the European Schools) Order 1995

6.00 p.m.

Lord Henley rose to move, That the draft order laid before the House on 15th November be approved [1st Report from the Joint Committee].

The noble Lord said: My Lords, I beg to move that the draft order designating the new convention defining the statute of the European Schools as a Community Treaty under Section 1(3) of the European Communities Act 1972, and laid before this House on 15th November, be approved.

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I will briefly explain, first, the convention to which the order applies and then the effect of the order itself. The convention defines a new statute--a set of administrative regulations--for the European schools, as agreed by the European Community member states and the European communities in Luxembourg in June 1994. It replaces the original statute of 1957; an inter-governmental agreement to which the UK acceded in 1972. There are nine European schools in six EC member states, including one in the UK, in Oxfordshire. They provide education for the children of employees of EC institutions and are jointly financed by the EC member states and the Commission itself.

The new statute, as described in the convention, introduces much needed measures to increase the administrative efficiency of the schools. The UK Government have supported the need for such reform for many years, as a means of easing the decision-making progress for routine administrative issues by ending the blanket requirement for unanimity in the governing body. Decisions on policy issues of substance will still require unanimous agreement. The new statute will also encourage the decentralisation of power and authority away from the centre by awarding more financial autonomy to individual schools. It is intended that this will further encourage the more efficient use of resources within the schools, based on local decisions. Finally, the new statute will provide teachers and parents with a more active role in the administration of the schools, through representation on the board of governors.

Having been signed by member states and the European Commission, the convention defining this new statute must now be ratified by each signatory. The debate today forms part of the final stage in this process of ratification by the UK. The convention has already undergone the usual scrutiny procedures, having been laid before both Houses in December last year for the requisite period of 21 days. The order before the House, which was discussed yesterday in Standing Committee

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in another place, will define the convention as a Community treaty and thus enable the United Kingdom to meet its financial obligations under the new statute. The nature and volume of expenditure under the new statute will be similar to existing expenditure under the current statute of the European schools.

It is clear, therefore, that there is nothing in the order, or the convention to which it applies, at which anyone, even some of the noble friends of the noble Lord, Lord Morris of Castle Morris, who sometimes sit behind him, could take offence. Indeed, the new administrative regulations defined by the convention are to be welcomed in the interests of the efficient deployment of United Kingdom resources in Europe. I urge the House to support the Motion and approve this order. I commend the order to the House.

Moved, That the draft order laid before the House on 15th November be approved [1st Report from the Joint Committee].--(Lord Henley.)

Lord Morris of Castle Morris: My Lords, I am most obliged to the Minister for explaining this small but quite complex piece of bureaucratic necessity or necessary bureaucracy. It was, as he said, carefully considered yesterday by the Second Standing Committee on Delegated Legislation, who agreed to it, surprisingly, by nine votes to one, after surprisingly little discussion. It is an uncontroversial measure; we are all committed to excellence and diversity in education and the European schools are a special form of it. This order will increase the administrative efficiency of the schools and our own school at Culham in Oxfordshire will benefit from it. We fully support the order.

Lord Henley: My Lords, I am most grateful for the noble Lord's warm welcome of the order. I certainly look forward to it being passed by this House without even the one dissenting voice in another place to which the noble Lord referred.

On Question, Motion agreed to.

        House adjourned at five minutes past six o'clock.

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