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Baroness Blatch: My Lords, in the course of making my statement I said that I understood and understand that the noble Baroness could not have been here; she was in the Division Lobby. I am saying that, because she was in the Division Lobby and her colleagues knew that, it was possible for us to have waited no more than one minute for the noble Baroness to return.

Lord McIntosh of Haringey: My Lords, it is a decision of the Chair.

Baroness Blatch: My Lords, I have been in that position before and, on behalf of the Government, I have asked for an adjournment for one or two minutes. That is always possible from the Chair. The Chair has no instructions if they are not given.

However, no apology is forthcoming and it is no more than I expected. But perhaps I can say also that, to add insult to injury, I learnt the details of this Statement this morning from journalists. It is not unusual for me to do so because that is happening on a regular basis. The details of the Statement were made widely available to journalists. In fact, the first details of the Statement came very early this morning on Radio 4.

There is considerable confusion. I hope that the noble Baroness will address some specific questions to clear up that confusion resulting from the Chancellor of the Exchequer's Budget Statement, taken together with the Statement today. I should like to quote from the Budget speech when the Chancellor said,

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The Chancellor then said at col. 1112,

    "We are determined to improve education all round, so I am allocating for the coming year to education an additional £250 million".

The Statement today refers to an extra £250 million, which is part of the money already pledged last year. The Statement makes that clear--£35 million extra to improve toilet facilities; £15 million extra to improve heating systems; £40 million extra for the class size pledge. It goes on to state that those three pledges were in addition to the £250 million already pledged.

On 2nd July last year, (at cols. 315 and 316)--at the time of this Government's first Budget--£1 billion was earmarked for education from reserves; £1.3 billion was to be made available over the course of the whole Parliament. That was to be allocated in the following way: £83 million for this year, 1997-98, and £250 million for each of the following four years. My specific question therefore is: what spending referred to in the Budget speech and in the Statement today is part of that £2.3 billion? What expenditure announced today is new money and what is the source of any new money?

Higher inflation during the current year has cost local authorities around £1.2 billion on the education budget. The changes to taxation dividends in the July 1997 Budget are also estimated to have cost local authorities up to £300 million. Does not the noble Baroness agree, therefore, that the additional moneys of £1 billion from reserves and £83 million allocated this year of the £1.3 billion, does not compensate the authorities for such a loss? If the noble Baroness agrees, will she explain what capacity and from what source local authorities will meet such pressures caused specifically by measures set out by the present Chancellor of the Exchequer?

While referring to the measures set out by the Chancellor of the Exchequer in the Budget, perhaps I can ask what the cost implications are as a result of changes to the national insurance contributions paid by the employer for schools and local education authorities which employ staff earning above £23,000 per year. The noble Baroness will know--indeed, it was widely welcomed--that £1,000 was allocated to each school throughout the country in this financial year to meet the cost of extra books. What was the source of that money? Was it top-sliced from local authorities' total budgets?

With all the financial changes since the July Budget, what is the percentage increase in real terms and the increase in cash terms that has been made available to local education authorities in 1997-98 and 1998-99? That is one question about which the noble Baroness will probably need notice but the rest of my questions are pertinent to the Statement today.

As a result of announcing an additional £40 million, can the noble Baroness now confirm that the money released from the assisted places scheme was, as was widely predicted, not sufficient to fund the class size pledge? While on the subject of measures in the Chancellor's speech, perhaps I can refer the noble Baroness to education action zones. Let me say right away that I welcome more innovation in education. I welcome more private sector involvement, though, as

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the noble Baroness may understand, I shall have more to say about the detail of that policy when the Bill comes before the House.

My understanding is that five of the action zones are to be up and running by September, which is a mere 22 weeks away. I understand also that a further 20, as a result of the Statement, are to be up and running by January 1999--just 38 weeks away. I say nothing about the complexity of such arrangements--to be discussed later on the Bill--with regard to proper consultation, the views of parents of children attending each school in the action zone and the detailed contracts which will have to be made, including very complex financial arrangements, with the private sector.

However, this policy has only recently been presented to Parliament. The Bill has not even completed its stages through another place. It has yet to be discussed and considered for approval in this place. There are no draft regulations in existence which support these proposals. The closing date for applications to become an education zone is tomorrow. Decisions as to which schools will become action zones will be approved by the end of April. Is it not astounding arrogance on the part of the Government to be pre-empting so blatantly both Houses of Parliament in this way? How can the noble Baroness--I hope she will tell the House--and her right honourable friend the Secretary of State justify the statement, and I quote:

    "I can further confirm that we will be expanding rapidly our education action zones programme".

On whose authority?

Will the noble Baroness list the local authorities which continue to have schools with outside toilets? I agree with the noble Baroness and her right honourable friend the Secretary of State that it is right to wish to see an end to all outside toilets. However, as a past county council leader I am conscious that there was a wide variation in the way in which local authorities managed their capital programmes. Often those with the greatest backlog of repairs were those which had not managed their financial programmes very well. Therefore, some of this expenditure could be seen to reward inefficiency. Is it the Government's intention, irrespective of the level of inefficiency and irrespective of the track record of an authority, that they shall be rewarded if they continue to have schools in their area with outside lavatories?

Welcome though it is when any government find additional funds to address problems such as better sanitation, improved heating systems and smaller classes, these proposals further erode local authorities' power to determine their own priorities in their own areas, and in many instances will reward the poorest financial management in local education authorities.

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6.52 p.m.

Lord Tope: My Lords, I thank the Minister for repeating the Statement. Personally, I was content to wait a few minutes longer to hear the Statement, although I share the concern which has been expressed here and in another place that its contents were so widely known early this morning.

I was not quite clear whether the noble Baroness, Lady Blatch, was or was not welcoming the contents of the Statement. I say quite clearly that I do welcome the contents of the Statement. It is scandalous that in this day of the information superhighway literally thousands of our children under 10 years of age still have to go outside to use the toilet. It may well be that after 18 years of Conservative government the noble Baroness, Lady Blatch, felt a little constrained to give too warm a welcome to that. But I feel no such constraint.

I welcome the additional money for improved heating. As the leader of an LEA, I have some experience of such matters. I know that building maintenance, whether in schools or elsewhere, is always the easy cut to make each year. But I think we all know that the accumulative effect of so-called easy cuts each year becomes more and more serious. Local authority associations predicted a year or more ago that a sum in excess of £3 billion additional money would be necessary to bring school buildings up to an adequate state of repair. This is a small step in that direction; it is nevertheless a welcome step.

We welcome the move to provide the additional classrooms that will be necessary to reduce class sizes. We regret that it is limited only to infant classes, although that in itself is welcome. There is a recognition that the money from the assisted places scheme is not enough to meet this. I can only echo the statements made by others, including the noble Baroness, Lady Blatch, that we told you so. It is nevertheless still welcome.

As has been said, we shall be debating education action zones in the not-too-distant future when the Bill comes to the House. I know that they have been welcomed by my colleagues in the other place.

I have some specific questions which I think are directly pertinent to the Statement and which I ask as the leader of a local authority that happens to be a local education authority. I know that these are questions which I shall be asked in the morning. The Statement gives the impression that this is real money being given to LEAs by a generous Government. I ask the Minister specifically: are we talking here about cash grants, or are we talking, as I suspect we are, about permission to borrow--credit approvals? Are we saying therefore that LEAs will have permission to borrow this money, with the consequent effects that that will have on revenue budgets through debt charges?

I understand that this is to be a bidding process. Although I am not surprised, I am disappointed by that because bidding inevitably means a lot of work, raised expectations and then, for many, some disappointment. I am little confused. The Secretary of State has made a clear commitment to end outside toilets by next year.

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Does that mean that every LEA will be entitled to receive the money necessary to remove the outside toilets--presumably to provide inside toilets? Is there sufficient money? On average it costs about £58,000 per school. That does not seem to me sufficient in all cases.

Will it be a condition of the application that the LEA will be required to contribute towards such costs? Will there be an upper limit for each grant, or, as is more likely, for the permission to borrow that is going to come? As I said, one of the problems with bidding is that a lot of work goes into preparing the bids and no one is too sure what the outcome will be. Will the Government be publishing the criteria against which they will be judging those bids so that at least LEAs know what they are aiming for when submitting the bids?

I believe I am correct in saying--perhaps the Minister can confirm this--that the closing date for bids for this money or permission to borrow is 30th April, which is just six weeks away. If that is correct, can she tell us when the announcements will be made? I am sure she will recognise that that is particularly pertinent because much of this necessary work, especially if it is to be done before next winter, will have to be done during the school summer holidays, which begin in the middle of July. Can she assure us that announcements on successful bids will be made in enough time to enable LEAs to do all the work that is necessary to bring the contractors in to carry out this work during the school holidays?

Lastly on bidding, I have a concern which I have expressed before in your Lordships' House about those good local education authorities, regardless of political control, that have managed their capital programmes well, as the noble Baroness, Lady Blatch, said; that have made education a priority; that have long since removed outside toilets; and that have, it is to be hoped, despite all the difficulties, tackled questions of heating and so on. Are they once again to lose out because the money is being provided inevitably to meet need and some LEAs have for years failed to meet that need themselves? What are the Government going to do to ensure that good LEAs are not further penalised in this way?

Finally, the Statement is about schools' funding. I am certain that the Minister shares my concern and the concern of other noble Lords that there seems to have been nothing in the Budget for lifelong learning. When does she expect to make a Statement about additional funding for further education?

6.58 p.m.

Baroness Blackstone: My Lords, the noble Baroness, Lady Blatch, was, I am very sorry to say, unable to welcome the Statement which provides substantial additional funds to ensure that our schools are brought into the last part of the 20th century and do provide hugely better conditions for both young people and teachers. That is important if we are to improve standards of education and the conditions in which people work. I am very grateful to the noble Lord, Lord Tope, who was able to welcome the Statement in that respect.

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The noble Baroness, Lady Blatch, referred to a great many different figures and quoted, if I may say so, rather selectively from the Chancellor's Statement yesterday. I think she has confused a number of different elements of the Government's new budget proposals. It might be best to write to her to ensure that she fully understands the wider context for today. What I have spoken about today is the new--and it is new-- £90 million of expenditure on a package of important measures to improve the quality of our school buildings. That is the focus of today, plus a small sum of additional money to allow education action zones to be increased in number. I very much look forward to debating with her some of the issues that she has raised on education action zones and class sizes when the Bill comes into this House.

The Government, under the new deal for schools, were able to provide last year an additional £1.3 billion of capital for the UK as a whole and £1.085 billion for England in order to deal with the high priorities of repairing, renovating and replacing in many of our schools, where there is an appalling backlog of urgent repairs which need to be done. The noble Lord, Lord Tope, referred to a backlog of £3 billion. Of course, that depends on how one defines what needs to be done but the Government figure is £4 billion.

So far as recurrent spending is concerned, the Government were also able to provide an additional £835 million above the planned expenditure for 1998-99 in the announcements that were made in July of last year. I think that this additional money is greatly welcomed, not just by teachers, not just by local education authorities, but also by the hundreds of thousands of parents who have children in our schools.

The noble Baroness asked what the implications of the national insurance increases would be on local education authorities as employers. I cannot give her the precise figure and I am happy to write to her about that. They do have a very substantial improvement in the amount that they have for recurrent expenditure, as I have just indicated.

The noble Baroness also asked about the assisted places scheme and whether the abolition of that scheme provides sufficient additional resources to fund the class sizes pledged. What the Government have always said is that that would provide adequate funding for the recurrent needs of bringing class sizes down, but the Government never said that they would provide enough money for the capital side. The additional £40 million that we are able to make available today is making a start on the whole issue of trying to provide adequate classroom provision to ensure that no child aged five, six or seven is in a class with more than 30 children.

The noble Baroness asked whether it was right that we would be getting five education action zones off the ground by September with a further 20 in January. I can confirm that that is our intention and that the date for applications ends tomorrow. The noble Baroness suggested that the Government are pre-empting both Houses of Parliament. May I say that the Government have inherited a situation in which we believe that standards of provision in a variety of respects in our

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primary and secondary schools are not good enough? We want to try to encourage exciting and interesting innovation. That is what education action zones will do. Of course, they will not be able to be established until after the legislation is through.

The noble Baroness also asked about which local education authorities are still running primary and secondary schools with outside lavatories. I obviously cannot give her a complete list. I am happy to write to her about that. There are some 600 schools--

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