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Lord Tope: Having been attacked this evening for being too sympathetic to the Government, I now find the Conservative Opposition moving an amendment on the grounds that they are being helpful to the Government. Perhaps it is my turn to get my own back.

Lord Pilkington of Oxenford: Constructive opposition.

Lord Tope: Constructive opposition. Well, there is a novelty. I have much sympathy with the intentions behind the amendment. Indeed, in some respects it reflects Liberal Democrat policy which would have allowed and encouraged local education authorities, where they see fit, to meet the fees in whole or in part. I believe that whoever is to reply to the amendment may say that it is not necessary. My understanding is that the power is already there should local education authorities--and incidentally, Guildford is not one--feel willing and, more important, able, to do that. It will probably be exceptional for local authorities to take the view that it is the best use of their money and also that they will have the money to use in that way. I am sympathetic to the aims of the amendment but I do not think it is necessary because the power is already there.

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9 p.m.

Lord McIntosh of Haringey: The noble Lord, Lord Pilkington, has once again referred to the publication Excellence in Schools. He is right to say that it spells out that one of the ways in which we aim to raise standards in schools is by encouraging local partnership. I was interested to hear his examples of Guildford and Totnes. He is also right in saying that there may be sponsors and trusts willing to fund places at independent schools. He mentioned education charities and the wholly admirable motive of raising money to help the state. All of that was music to my ears, and I have no quarrel with him whatever. In many years of opposition on the Front Bench there was nothing more infuriating than Ministers standing up and saying that an amendment was either unnecessary or undesirable, or both. I have not said that the amendment is undesirable, but I have to say that it is unnecessary.

If a local authority wants to use money that it raises locally to fund a place at an independent school it can do so under the long-standing powers in the present legislation. It does not mean that it will get extra money for that purpose, as the noble Lord, Lord Tope, rightly pointed out. There will be no supplement to the standard spending assessment, but if the local authority decides to place a pupil in a school and is willing to pay the full cost of the place, then there is no bar to that situation. Under Section 18 of the Education Act 1996, LEAs already have a wide discretion to make arrangements for the provision of primary and secondary education for pupils at schools not maintained by them or other LEAs.

Section 517 of the 1996 Act requires an LEA to pay in full the fees of pupils provided with places at independent schools under arrangements made by that authority pursuant to Section 18 where there is a shortage of suitable places for those children in the maintained sector in the LEA's area.

Further, when the local education authority is satisfied and decides that a pupil's special educational needs can be appropriately provided for in an independent school and subsequently names that school in the pupil's statement of special education needs, it is under a duty under Section 517 to fully fund that place.

The noble Lord will also find that under the Scholarship and Other Benefits Regulations 1977, local education authorities can already pay the whole or part of the tuition fees, boarding or lodging fees and other expenses related to the attendance of a pupil at a fee-paying school. The regulations require support to be means-tested and local education authorities must be satisfied that the education at the school is suitable for the pupil.

I repeat that it is simply unnecessary to place this power on the face of the Bill and I urge the noble Lord not to press the amendment.

Lord Lucas: Does that long answer mean that a local education authority in Guildford faced with the problems described by my noble friend would have total freedom to work with funds provided by education charities attached to that school or other education charities and fund places in that school in that way?

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I understood from what he said that there is a restriction on the LEA in that it had to pay the whole of the school fees charged. In that case it would be difficult for it to work with charities or others to make up the total fee. Presumably there is a prohibition on the LEA paying part of the fee and the pupil's parents paying the rest because that may be described as charging for state education. Can the noble Lord clarify the point?

Lord McIntosh of Haringey: I do not know the formal answer to that and I shall write to the noble Lord. There should be a very easy way around the situation. If an education charity is willing to contribute the money could be paid to the local authority so that it could pay that part of the fees or board or lodging charges required from the independent school. I cannot imagine that it could be a problem but I will reply in writing to the noble Lord, Lord Lucas.

Lord Tope: The Minister might not be quite right about that matter but there is no point in speculating tonight. I would be grateful if he could send me a copy of his letter because I am interested to know the official answer. I am sure the Minister is aware that Guildford is in the county of Surrey, which is now a Conservative controlled local education authority. We will be watching with great interest, assuming the powers are there, to see whether or not Surrey council feels that it is a worthwhile use of the very generous grant it receives from central government.

Lord McIntosh of Haringey: Like the noble Lord, I wait with bated breath.

Lord Pilkington of Oxenford: I am delighted that I have produced a little discussion. I will be interested to read the Minister's reply. I think that there are more complications than meet the eye and the noble Lord may find that the Conservative council will meet these matters. The publicity generated may produce results. It will also test whether the Government believe in the famous page 72 of the White Paper. I know that the noble Baroness is an honourable woman and will certainly do that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [Regulations for purposes of transitional arrangements.]

Lord Pilkington of Oxenford moved Amendment No. 14:

Page 3, line 2, leave out from ("to") to ("fees") in line 3 and insert ("direct a school to refrain from making, or postpone or reduce an increase in,").

The noble Lord said: I shall speak also to Amendment No. 15. These are probing amendments. I have no intention of pushing the amendments to a vote. I look for an assurance from the Government that these measures relating to fees and a lump sum will not be used in a punitive or--dare I say it?--even vindictive way. A general control of fees constitutes a broad power. Theoretically it could mean that the Secretary of State could say, "I do not like these fees at all and I want

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to reduce them". This amendment follows the previous pattern of the scheme and suggests a control which could prevent unnecessary increases, for example, in the case of a school which decided to be unscrupulous and raise fees too high. Traditionally, under the scheme, schools have been prevented from doing that. Why not adopt the words of the amendment and,

    "direct a school to refrain from making, or postpone or reduce an increase"?

I am concerned about lump sums. Like myself, the noble Baroness has been involved in education throughout most of her career. She knows of the problems that can arise with educational finances. If it were ever proposed that a lump sum be negotiated with a school that was involved in the assisted places scheme, it would create considerable difficulties. As the noble Baroness knows, any educational institution that has negotiated with the Government has found it difficult to negotiate lump sums. One would, for instance, have to assess future levels of inflation. Traditionally, governments of my party or of the party of the noble Baroness tend not to assess those accurately. Also, they often take into account general inflation figures, but educational inflation can sometimes be higher. Lump sums do not allow for salary increases. Educational salaries may rise suddenly, then remain dormant for many years and then may rise again.

I am therefore worried about a lump sum arrangement. It is always difficult for educational institutions to negotiate with the Government, as the noble Baroness must have discovered in her educational career. I hope that the noble Baroness will be prepared to give us an assurance on this matter as regards the educational institutions that over the next few years they will still be involved with this funding. I beg to move.

Baroness Blackstone: I am a little surprised that the noble Lord, Lord Pilkington, wanted to speak to these two amendments together because I believe they concern rather different matters. I shall deal with them in turn. I begin with Amendment No. 14. Unfortunately I understand that this amendment has a minor technical deficiency, but I hope that what follows gives the noble Lord adequate assurances.

Existing statutory provisions (specifically Section 480(1)(b) of the Education Act 1996) give broad discretion to specify in regulations arrangements to determine fees. The Bill provides for the same degree of flexibility. The more specific approach advocated by the noble Lord, Lord Pilkington, may rule out arrangements for setting fees which, following consultation with representatives of assisted places schools, we decide are most appropriate. Consultations on these matters are standard practice and they are both welcomed and encouraged by representatives of assisted places schools. We intend that they should continue. I give the noble Lord that assurance.

However, what the noble Lord proposes could lead to the paradoxical situation of the department having to reimburse schools for higher fees than they were charging full fee-payers. Occasionally APS schools reduce their fees. It is not often I am ready to admit that. For example, Yarm School in Stockton-on-Tees reduced its sixth form fees for pupils already in the school: in effect that was a

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loyalty incentive. And Denstone College Uttoxeter will be reducing its junior fees by nearly 12 per cent. from September 1997--it has obviously made some efficiency savings--and plans to reduce its senior day fees by some 30 per cent. from 1998-99. If the noble Lord's amendment was passed we would be unable to change the APS fees to take account of these reductions.

No government with a proper concern for the stewardship of public funds would leave themselves without adequate flexibility to respond to circumstances of that kind. The party opposite gave itself a broad power to determine fees and we propose to do likewise.

Amendment No. 15 would remove the provision for lump sum payments by the Secretary of State. I believe the noble Lord suggested that it was a probing amendment to seek assurances that there is no untoward intention behind the provision. I can give him every assurance that this regulation-making power was included with the very best of intentions. It is certainly not intended to be used as a way of avoiding future commitments, nor is it intended to be used to make independent schools suffer financially. It is not intended to bring an unnecessarily rapid halt to the assisted places scheme in general. We are in fact, as I have already said on several occasions, committed to phasing out the scheme in a reasonable timeframe. We shall make good use of this power simply to make sensible administrative arrangements as the scheme winds down and eventually closes.

Towards the end of the seven years the number of pupils in the scheme in a particular school may have gone down to such a level that the administrative costs for an individual school outweigh the benefits of the income that it receives from the Government, and we can foresee a time when it would not be good use of staff resources of either the department or the schools to keep an administrative operation going at perhaps rather considerable cost to pay out tiny amounts of grant. In those circumstances, it may be in the interests of both the taxpayer and the school to introduce a lump sum payment. I can assure the noble Lord that we shall not impose such a position on a school. We would want to proceed on the basis of agreement, something that will of course be a general feature of this Government's educational policies, and we shall not do anything that is not in the best interests of all those concerned. I hope that this gives the noble Lord the assurances that he wanted and that he will now feel able to withdraw his amendments.

9.15 p.m.

Lord Pilkington of Oxenford: Peace prevails, and I welcome the noble Baroness's very kind words. I beg leave to withdraw the amendments.

Amendment, by leave, withdrawn.

[Amendments Nos. 15 and 16 not moved.]

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