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Baroness Farrington of Ribbleton: My Lords, we support this amendment.

9.15 p.m.

Lord Henley: My Lords, I congratulate the noble Baroness on the wonderful brevity of her speech. That is something that I pass on as guidelines to her noble friend Lord Morris of Castle Morris. I also offer my thanks--I do not know whether it is thanks or what it is--or perhaps congratulations to the noble Lord, Lord Tope, that he has managed to discuss this amendment at something nearer to prime time, even if it is not prime time, than we did at the previous stage of this Bill. I am glad that he received the copy of my letter, which I think I copied to the noble Lord, Lord Morris of Castle Morris. I hope that that letter was of some use.

We in the Government are fully committed to ensuring that essential school assets are protected. It is equally clear that the noble Lord, Lord Tope--and the noble Baroness, Lady Farrington, in her admirable speech--are equally committed to that aim. For that we are grateful. I think where we differ from one another is in how that common aim should be achieved. As I said at Committee stage and in that subsequent letter to the noble Lord, I am not convinced that his suggestion to put every detail in regulations is the right way of going about things.

Under Clause 6 governors may only offer assets as security if they have first obtained the written consent of the Secretary of State. When my right honourable friend the Secretary of State delegates this consent-giving function to the Funding Agency for Schools, as provided for in paragraph 10 of Schedule 3, she will set out in the remit letter referred to how she expects the borrowing regime to be operated. Under that guidance schools will not normally be allowed to offer as collateral--I hope that this will help the noble Lord--assets needed to allow the school to meet statutory requirements and assets essential to a school's functioning in other respects. In practical terms, this

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means that for school land, schools will not be able to mortgage playing fields that they need to comply with the School Premises Regulations 1996.

For school buildings, the starting assumption of the Funding Agency for Schools will be that all buildings are core assets. But it will be open to schools to argue to the agency, in submitting their loan applications, that particular buildings are not essential to a school's functioning and that they should therefore be mortgaged.

There is nothing unusual in that approach. There are parallels to Clause 6 where administrative safeguards have been effectively applied without recourse to regulations.

Under Sections 19(4)(c) and 19(5) of the Further and Higher Education Act 1992 further education corporations may borrow and charge their land or other property with the consent of the Further Education Funding Council. The funding council's safeguards are not set out in the statute.

Another parallel is provided in the case of the Education Assets Board. Under paragraph 2(2) of Schedule 8 to the Education Reform Act 1988--I am sure that all noble Lords remember it intimately--the board may borrow money subject to the approval of the Secretary of State. Once again, the safeguards are administrative.

We intend rather that the funding agency should look at applications for consent on a case by case basis. The onus will be on schools to satisfy the agency that particular assets are not likely to be essential to the school's functioning. In deciding whether particular assets should be deemed "core" or "non-core", the agency will want to take into account a variety of complex factors, including future projections of demand and the adequacy of the premises for the purposes of the national curriculum.

These kind of decisions are best left to administrative discretion in the light of very specific local circumstances.

I hope that I have satisfied the noble Lord and that he will not think it necessary to press his amendment on this occasion, as I have dealt with his concerns. I hope that he will feel able to withdraw the amendment.

Lord Tope: My Lords, before the Minister sits down, perhaps I may ask whether he is willing to consult with interested bodies on the contents of the remit letter and its status before it is published. Perhaps he will deal with that point.

Lord Henley: My Lords, we consulted widely with local authority associations last year. I suspect that whether it is necessary to consult further is another matter. I should not wish to give an assurance to the noble Lord that we would do so. There is a considerable amount of consultation, if I may so put it, flying around at present. I have never been in a department that has consulted more than my current department. Consultation was not indulged in to a great extent by some of my previous departments.

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However, there has to be a limit to consultation. All I can say is that I shall consider the matter. I can assure the noble Lord that those bodies were consulted fully last year.

Lord Tope: My Lords, I am aware that the interested bodies were consulted last year on the consultation paper. I quoted their response at some length in order to have it on the record. I congratulate the Minister on being in a department which is apparently blazing a trail on consultation. Not all of us had noted that attribute of the department. Nevertheless, it is one that we welcome. Perhaps I may remind him that in his letter to me he stated that,

    "[The remit letter] will also reflect commitments we have made during the passage of the Bill".
In other words, the Minister stated that the remit letter will contain matters that were not in the consultation paper because the Bill had not started its course there. I am sure that he recognises the crucial importance of the remit letter. As the proposals are to be extended from those upon which there was consultation, it might be appropriate not to engage in a lengthy consultation process but at least to give interested parties the opportunity to comment on the proposals before they are published and therefore presumably cast in stone.

As to the best way of protecting the public assets, we have to agree to disagree. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 18 not moved.]

Clause 10 [Citation, interpretation, commencement and extent]:

[Amendment No. 19 not moved.]

Schedule 1 [Nursery education grants: inspections etc.]:

Lord Ponsonby of Shulbrede moved Amendment No. 20:

Page 5, line 33, after ("education") insert ("with particular reference to--
(i) qualifications and training of staff;
(ii) staff-child ratios; and
(iii) space regulations and guidance").

The noble Lord said: My Lords, the purpose of the amendment is to develop a better and more robust inspection scheme which makes specific reference to key indicators of quality in provision. My noble friend Lord Morris moved the amendment at Committee stage and withdrew it with the promise that, like General MacArthur in the Pacific, he would return. I am afraid that General MacArthur has not returned but your Lordships have an infantryman instead.

The amendment focuses on the quality indicators of staff qualifications, staff/child ratios and space regulations. It does no more than require, as one of his

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functions, the chief inspector to keep the Secretary of State informed about those important matters. It is the most modest of amendments.

In his response to the arguments put at Committee stage, the noble Lord, Lord Henley, stated:

    "We believe that it is unnecessary to prescribe the scope of the chief inspector's duty to report to the Secretary of State, or the scope of the inspections, in any greater detail than that already provided for in the Bill".--[Official Report, 17/6/96; col. 148.]
The noble Lord went on to claim that:

    "The Bill provides for that in some detail and in a manner very similar to other bits of legislation which have been before the House relating to inspectors".
In that case, how is it that in the Education (Schools) Act 1992, Section 2(1)(c), one of the functions of the chief inspector is to keep the Secretary of State informed about:

    "whether the financial resources made available to those schools are managed efficiently"?

It is clear that issues of efficiency are covered in other relevant and comparable legislation. Issues of efficiency relate clearly to the thrust of the amendment. In management terms, the qualifications and training of staff, staff/child ratios and the adherence to space regulations and guidance are not only indicators of the quality of education per se but, taken together, they balance out and demonstrate how efficiently the nursery setting is operating. These are key inputs into the system, and reporting on them, together with a requirement to keep the Secretary of State informed about quality and standards, provides a good indication of value for money and efficiency.

Let me describe another example and cite the Overview Report of the Inspection of Local Authority Day Centres for Children under Eight (1995), issued by the Social Services Inspectorate for the Department of Health. It provides a list of 14 standards against which provision may be judged. Standard 9 relates to physical environment and standards 11 and 12 respectively relate to staff competence and training. Here is further and ample evidence, derived from a different source, that inspection of those aspects is a prime need for the service. Interestingly, and further strengthening the argument for reporting in a summary form on the issues, the social services inspectors commented comprehensively in the report on training and qualifications. They stated:

    "Inspectors were surprised that the use of NVQ training was not well developed despite the standards for Level 2 and 3 of the Childcare and Education NVQ being specifically developed for staff in day centres for under eights".

At Committee stage my noble friend Lord Morris argued for the clear identification of the focus for the chief inspector, citing relevant research studies. In particular, in reference to the importance of qualifications, he quoted from the Audit Commission's report Counting to Five by referring to its conclusions on the relationship between high quality settings and the feature of staff trained specifically for working with young children.

Earlier this evening, on Amendment No. 8 we debated fully the merits of lowering the staff/pupil ratios. It is, I believe, right that the Secretary of State should be

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informed of changes made in that area. The benefits of an inspection regime which aims to report and keep the Secretary of State informed as to the way that the scheme is operating is far from being a radical suggestion. I beg to move.

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