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Lord McIntosh of Haringey moved Amendment No. 92:

Page 111, line 1, leave out ("new").

The noble Lord said: I beg to move Amendment No. 92 and speak also to Amendments Nos. 93 and 94. In anticipation of the speeches of the noble Lord, Lord Lucas, and the right reverend Prelate the Bishop of Ripon, I should like to speak also to Amendments Nos. 95 and 96. Amendments Nos. 92, 93 and 94 are

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technical amendments that clarify that where a local education authority has a duty to provide an additional or alternate site for a voluntary aided school, the authority must always transfer ownership of the site to the school trustees or foundation body if there are no trustees. The amendments do not change existing responsibilities for voluntary aided schools but simply put the provisions and existing practice beyond doubt.

Amendment No. 95 in the name of the noble Lord, Lord Lucas, does not take account of the grant payment system and therefore is defective. In practice, payment and acceptance happen simultaneously because grant is paid direct to school governors' bank accounts by the Bank Automated Clearing Service. I understand that the noble Lord seeks to protect voluntary aided school governors by offering them an opportunity to consider the grant conditions before accepting payments. I reassure him that we recognise the implications of the grant condition systems for school governors. We shall ensure that, where a condition of grant is to be applied, the governors will fully understand and can comply with the requirements being stipulated before any building work starts and grant is paid. In those circumstances, I hope that when the noble Lord comes to speak to his amendment he will understand the points that we make.

Amendment No. 96 in the name of the right reverend Prelate the Bishop of Ripon is concerned with the grant condition system. The grant condition system will protect public fund investment in voluntary aided schools. Where any voluntary aided school property is bought or enhanced with public funds and ceases subsequently to be used for a maintained school, we want to ensure that if the assets are not recycled within the maintained school system, public funds will be appropriately compensated. The Churches have always made it clear that they support that principle.

I understand the right reverend Prelate's reservations about the Secretary of State's power to set a condition of grant after the grant has been paid. Therefore, I propose to bring forward an amendment on Report which I hope will meet his concerns. We cannot agree to forfeit completely the power to set a retrospective condition of grant. However, we expect to use the power rarely and only when it is reasonable to do so. The amendment I shall table will modify the power so that it is exercisable only where the Secretary of State is of the opinion that it is reasonable to set a retrospective condition.

It may help if I give a couple of examples where we judge that it will be reasonable to use the power; for example, where, as a result of clerical oversight, the grant condition is excluded from the formal grant letter which sets out how much grant is to be paid. In such a case, the governors will already be aware of the intention to set a condition and it would be quite reasonable, in our view, to correct the error and set the formal condition after grant payment has commenced.

Another example may be that when grant is requested, the school trusts appear to secure satisfactory recycling and a condition is not set. However, it may be that the terms of the trust deed have been misconstrued or that the trusts are subsequently changed and

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satisfactory recycling is not secured. In such circumstances, we should want to have the power to set a condition after the grant has been paid and we believe that that would be entirely reasonable.

As I have said already, we expect such cases to arise rarely. I do not consider that there is a real threat to Church schools. I hope that the right reverend Prelate will accept my proposal for an amendment on Report and therefore will in due course see fit not to move his amendment.

The Lord Bishop of Ripon: After the disappointment of Amendment No. 77, I am delighted at the announcement by the noble Lord, Lord McIntosh of Haringey. As he said, the Churches have always accepted the principle that if public money is used to enhance trust assets and those trust assets in due course may be realised, then any public money should be returned. We have no difficulty with that.

The difficulty lay only in the power of the Secretary of State to impose requirements at any time after the making of a grant. Once again, we accept entirely the situation which the noble Lord has described, that there may, on occasions, be administrative oversights, and in those circumstances we are prepared to accept that a retrospective imposition would be right.

However, I am grateful to the noble Lord for the assurance that he has given that that power will be rarely used and for outlining the amendment which he will bring forward on Report to make it clear that such a retrospective condition would be imposed only when the Secretary of State regarded it as reasonable to do so. In those circumstances, I shall not move the amendment.

As Amendment No. 96 is the last amendment which we are considering this evening, I should say that at least one of your Lordships will be returning home tonight with a lighter heart.

Perhaps I may also express my thanks to the noble Baroness, Lady Blackstone, and her colleague, the Minister for Schools, for their graciousness in receiving representatives of the Churches to attempt to sort out some of those difficulties. Also, I thank the officials of her department for the way in which they worked so closely with staff of the Board of Education, the Catholic Education Service and the Free Church Federal Council. I believe that those consultations have enabled us to iron out most of the remaining difficulties that we have in this Bill, and I am delighted by the announcement made the noble Lord, Lord McIntosh of Haringey, this evening.

Lord Lucas: I should just like to thank the Minister very much for what he said. Indeed, I am quite content.

On Question, amendment agreed to.

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Lord McIntosh of Haringey moved Amendments Nos. 93 and 94:

Page 111, line 14, leave out ("new").
Page 111, line 22, leave out ("new").

On Question, amendments agreed to.

[Amendments Nos. 95 and 96 not moved.]

Schedule 3, as amended, agreed to.

Lord McIntosh of Haringey: I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

        House adjourned at eleven minutes past three o'clock.

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