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On Question, amendment agreed to.

Clause 24, as amended, agreed to.

Clause 25 agreed to.

Clause 26 [Proposals under section 24: implementation]:

Lord Adonis moved Amendment No. 118:

On Question, amendment agreed to.

Clause 26, as amended, agreed to.

Clauses 27 to 29 agreed to.

Schedule 3 [Amendments relating to school organisation]:

Lord Adonis moved Amendments Nos. 119 and 120:

(a) where the school is a voluntary school, for a change of category to foundation school, or (b) where the school is a foundation school, for a change in the instrument of government which results in the majority of governors being foundation governors.

On Question, amendments agreed to.

Schedule 3, as amended, agreed to.

Clauses 30 and 31 agreed to.

[Amendments Nos. 121 to 123 not moved.]

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Clause 32 [Requirements as to foundations]:

Lord Adonis moved Amendment No. 124:

(a) acquired its foundation, or (b) became a school whose instrument of government provides for the majority of governors to be foundation governors, in pursuance of proposals falling to be implemented under regulations under section 23 of that Act.

On Question, amendment agreed to.

[Amendment No. 125 had been withdrawn from the Marshalled List.]

[Amendments Nos. 125A to 125D not moved.]

Clause 32, as amended, agreed to.

Clause 33 [Parent councils for certain foundation or foundation special schools]:

[Amendment No. 126 not moved.]

Clause 33 agreed to.

[Amendment No. 127 not moved.]

Clauses 34 and 35 agreed to.

The Lord Bishop of Peterborough moved Amendment No. 128:

The right reverend Prelate said: In moving the amendment I shall speak also to AmendmentsNos. 130, 131, 132 and 137 in my name. They relate to technical matters relating to ownership of sites. We understand that new foundation schools will be owned not by the local authority but by one or more foundations. When such schools close or are moved to new premises, the public interest in the land needs to be preserved. However, the Bill needs to recognise that the provisions intended to protect the public interest might also catch existing schools, owned not by the local authority but by trustees, principally among some Church schools where there is already a strong existing body of law and practice.

Amendment No. 128 relates to reverter of sites. It makes a tentative proposal, broadly worded, to limit the circumstances in which the premises of closed schools revert to the original landowner. The amendment would have the effect of placing some small limits on reverter in the case of the discontinuance of certain schools. Amendment No. 130 to Schedule 4 recognises

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on the one hand the right of the local authority to make decisions about the use of land following the closure of a school, and on the other hand the right of the trustees to compensation for costs and expenses they have incurred in waiting for a decision. These costs are likely to be those of boarding up, providing security for the premises to avoid vandalism and depredation of a closed school building.

Amendment No. 131 to Schedule 4 would have the effect of ensuring that two obligations working in opposite directions did not make it impossible for the trustees of a closed school to do the right thing. The terms of their trust might make it impossible to pass proceeds of sale to a third party even though that was the decision of the local authority supported by the adjudicator. The amendment would have the effect of overriding the limitations imposed by the trust.

Amendment No. 132 would require a public hearing where the adjudicator is to determine the destiny of proceeds of sale. That would seem to be best practice and indeed the adjudicator might hold a public hearing in any case. That would simply require that such a hearing was held. The final amendment in this grouping in my name is Amendment No. 137, which concerns the disposal of hard play areas attached to closed school premises. The Government and Sport England are committed not to dispose of playing fields unless that can be avoided. Hard play areas around a closed school could, we understand, attract the interest of those seeking to prevent their disposal. The most obvious problem for us would be in relation to the disposal of former school premises in an urban area without playing fields, as generally understood, with a playground and a tennis court. If the Secretary of State were to rule that the hard play areas in such cases were to be retained for educational purposes, which although it might be illogical is not inconceivable, that could blight the premises and render it virtually or actually impossible for the trustees to dispose of the land or gain any benefit from its disposal. In those perhaps unlikely circumstances, we propose that the Secretary of State would have to acquire land that he had blighted from the trustees. I beg to move.

10.30 pm

Baroness Walmsley: My amendment in this group is Amendment No. 132E. A very similar amendment was tabled by one of the Labour rebels in the other place. Since there do not seem to be too many Labour rebels around in your Lordships' House this evening, it is up to the real opposition lay it and to stimulate a debate a debate here.

The amendment probes the issues of land transfer. The Education and Skills Select Committee expressed concern about trust schools having control of their assets. It said:

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The model of independent trust schools that own their own assets as described in the original White Paper which preceded this Bill raises questions over who will be contractually responsible for the service charges. We understand that the Department for Education and Skills might be expected to announce that when schools becoming trusts are part of PFI schemes, the liability for paying contractors will remain with the local authority. Perhaps the Minister can confirm whether that is the case. It means that investors will be concerned about the future of exclusivity arrangements with local authorities because in the past the carrot for the private sector has been to carry out all the future work—maintenance, refurbishment, cleaning and so on—over the whole local authority’s school estate. But if over the course of time eight out an estate of 20 schools become trust schools, for example, the business opportunities are significantly cut because you can no longer have the exclusivity arrangements. So it is possible that private contractors might respond to that new business risk by increasing the cost of schemes during their initial phases, which would cost the taxpayer more.

An alternative solution that the department might favour is to make building schools for the future the only option for capital investment, forcing all schools to take part. I wonder whether that is the case. Claudia Wood from the Social Market Foundation has said:

It is clear that the limited freedom implied by Building Schools for the Future raises questions about the need to transfer school assets to trusts in the first place. Will the Minister tell me whether the assumptions that I have made are true and how Building Schools for the Future might affect the situation for business?

Lord Adonis: I hope that the noble Baroness does not feel that she has reached her vocation as a Labour rebel but, if she does, she is very welcome to join us on this side of the House.

My understanding of Amendment No. 132E, to which she spoke and which as she said was moved in another place, is that it would enlarge the scope for local authorities in seeking transfers so that land could be sold, for example, for housing or to provide a facility such as a transport depot or a refuse site. What a local authority might seek to get a transfer order in respect of a school site for is left much more to the discretion of the authority. Our concern on this amendment is to protect the educational interest, which local authorities should be seeking to safeguard over the transfer of educational sites.

I should make it clear that the requirements on trusts are that they should operate for educational purposes and in the best interests of the educational community they serve, not to engage in property transactions of a kind for which there are plenty of regulations laid down to prevent them if they do not remain true to their purpose. That is why we have said

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that the stated purpose for which a local authority may seek a transfer order should relate to the purposes of the school, to another educational use or to the delivery of children’s services, and not beyond that purpose. We seek simply to safeguard educational interests in the case of an authority which might seek to take the opportunity of a transfer to trust status to try to transfer land right out of educational purpose. Earlier in our debates the noble Baroness, Lady Williams, referred to the important issue of playing fields. Let us be clear on what will happen if local authorities are given wider rights. It would not be the essential core buildings of a school which local authorities not having regard to the educational interest might seek to transfer to other purposes, it will be ancillary sites. The most obvious of those sites will be playing fields or vacant land. Our concern is to safeguard the educational interest.

In respect of the PFI deal issue raised by the noble Baroness, I am advised that even though the local authority remains the signatory to the PFI deal, the governing body would have to pay the unitary charge. However, it could not unilaterally break any agreement made by the predecessor governing body. It would inherit the obligations that were made before, so there would be no change in that respect.

I turn now to the five amendments in this group spoken to by the right reverend Prelate. Amendments Nos. 128 and 131 concern the details of trusts and trustee rights which have consequences in charity law as well as in education law. I have requested my officials to work further with the Church’s lawyers, and if necessary with the Charity Commission, to explore these highly technical matters. I will keep him informed of progress with a view to reaching an agreed position before we come to the Report stage. Amendments Nos. 130 and 132 impose duties on the adjudicator in respect of compensation to trustees for costs while the adjudicator considers referrals, and a duty to hold a public hearing. Neither of these provisions, we believe, are required in the Bill, but are better dealt with in guidance to which the adjudicator has a statutory duty to have regard. We have made guidance available to the House which sets out our position on these matters and it is our intention that this guidance will be further developed in the light of experience.

Amendment No. 137 would require the Secretary of State to purchase playing fields and adjacent land from trustees when he refuses consent for playing field disposals under the provisions of Section 77 of the School Standards and Framework Act 1998, which has been referred to several times in our debates. This section covers protections for school playing fields to prevent them being sold off to the detriment of the sporting facilities available to the school and the local community. The provisions of Schedule 4 bring the trustees of foundation and voluntary schools in line with other categories of school in having to seek the consent of the Secretary of State when disposing of any playing field land which has been provided or enhanced at public expense. We have considered representations made by Church lawyers in this area, but we believe that the extension of protection to playing field land in these respects is right. There is

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rightly no requirement in existing legislation, the 1998 Act, for the Secretary of State to purchase land when he refuses consent to disposal. In some cases that could be a hugely expensive undertaking and we do not believe it would be right to introduce such a provision for some categories of owners of publicly funded land rather than others.

We understand that the concern behind the amendment relates to hard play areas, playgrounds directly attached to school buildings which come under the provision of the Act. Should the Secretary of State refuse an application for disposal, it could blight the sale of a discontinued school owned by trustees, including Church trustees. However, a general consent for disposal of such land already exists from the Secretary of State, provided that the land is not needed by another school. The amendment is therefore unnecessary.

Finally, the provisions of Schedule 4 allow a local authority to seek the transfer to it of surplus publicly funded school land that is owned by governing bodies, foundation bodies, or trustees. We have deliberately restricted the purposes for which such a transfer can be sought, so that school land continues to be used for the benefit of the children and young people in the area.

The great majority of the government amendments to Schedule 4 in the group are technical, consequential and repetitive, and I have written to noble Lords about them. School land can be owned in a number of ways by different categories of bodies, reflecting the extremely complex history of the development of school sites. It has been acquired and funded through a number of routes. It is necessary for legislation relating to school land to include all those possibilities, and the amendments seek to tie up loose ends.

The provisions in Schedule 4 mean that where there is not local agreement to disposal or reinvestment proposals, or a claim by a local authority for a share of the proceeds relating to public funding, the schools adjudicator will determine. The amendments, which have been discussed in detail with the Churches that are principally affected, make clear that provisions apply only to land that is acquired or has been enhanced by public funding and to that share of proceeds that can be attributed to public funding and not that share that could be attributed to trustees in respect of that land. They also define public finding more clearly, and they make procedures simpler and clearer.

They provide that where a local authority successfully objects to a proposed land sale or deployment on the grounds of local need, the land should be transferred to the local authority expeditiously for proper consideration, which meets one of the major concerns that the Churches had. They also replace a complete moratorium on disposal until any matters referred to the schools adjudicator are determined, with a moratorium only where the authority has objected to the disposal itself in question, which we think is a more sensible way of proceeding. I hope that has given the right reverend Prelate some comfort.

Baroness Walmsley: Before the right reverend Prelate responds and, I presume, withdraws the amendment, I have one point to make on my amendment. As I

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understand it, the Minister said that the governing body will have to undertake the agreement that it already had on PFI, and it is liable for the costs. Is there any mechanism for preventing the upward pressure on costs that might result from this break-up of the school system, so that PFI private sector partners no longer have an opportunity for an exclusivity arrangement with the local authority? Is there any way in which the school can resist upward pressure on the PFI costs?

Lord Adonis: My understanding is that the nature of PFI contracts and the relationship between schools and local authorities under PFI contracts is not affected in any way by a move to trust status. I will happily write to the noble Baroness about that if my understanding is in any way incorrect. They are still maintained schools. The local authority under Building Schools for the Future, for example, where the obligations are undertaken, maintains the same responsibilities as it does for other maintained schools. My understanding is that it makes no difference at all, but I will write to the noble Baroness if I am incorrect on any point.

Lord Lucas: I have a quick question. The local authority appears to be the only body that can intercept the land in this way to use for educational or similar purposes. If the land is required by the proposer of the new school who is not the local education authority, does the LEA have any obligation to act on its behalf to make sure that the land stays in educational use? Or is it possible that the LEA could frustrate the new school by denying it access to old premises?

Lord Adonis: The local authority can act only in very specific circumstances relating to other education or children’s services’ uses for the lands. The noble Lord asked whether that other use could include the creation of a completely new school, fulfilling the local authority’s duties to permit diversity and choice. My understanding is that where the local authority formed the view that such a new provision was in the local public interest, it would be a legitimate reason for it to seek to act. Could others seek to oblige it to do so? The could do so indirectly through the provisions in the opening clauses of the Bill, which require local authorities to have regard to the promotion of choice, diversity and to take full account of parental demands, but they could not refer proposals to the adjudicator. It is important to understand why. We are talking about school sites. There has to be some overriding public interest for the rights of trustees or the governors of schools to be overridden in the decisions that they wish to take about the disposal of sites which are legitimately theirs.

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