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Baroness Lockwood: The noble Baroness has made rather hard weather of this issue. We are debating the Bill. The document published about a week ago elaborates on some of the clauses. The noble Baroness went through not only the various categories stated in the consultation paper, Fair Funding, but also the additional pages which elaborate those various categories.

Baroness Blatch: I thank the noble Baroness for giving way. Everything I have said is entirely pertinent.

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This is the scheme that will be in place for schools for the next financial year. The clauses in the Bill are the legislative basis for the money that will go to schools in the next financial year.

Baroness Lockwood: I do not dispute that. I agree with the noble Baroness. All I say is that she makes heavy weather of the issue. We are not debating what newspapers say. We are debating the Bill. To help us we now have this consultation paper. I did not hear the noble Baroness discuss the merits of items for which local authorities will be responsible. I merely heard the noble Baroness list all the subjects under those categories. Only a few days ago the noble Baroness and her colleagues argued that we should not have an adjudicator, and that local authorities should be responsible.

In many ways the noble Baroness argues against herself. It is clear that local authorities have important responsibilities. Those are outlined in the document. I am sure my noble friend will reply to some of the factual questions put by the noble Baroness. However, I believe that the document is helpful and valuable to us in our discussions.

Lord Dixon-Smith: I sympathise with everyone involved in this area, whether in LEAs--where I spent a great deal of my life--the Department For Education and Employment, or even sitting on these Opposition Benches. This subject puts one between a rock and a hard place.

The Bill is immensely detailed. There are many opportunities for differences in practice between different education authorities and different schools. The announcement in the consultation paper last week was made in such terms--I read it in the Financial Times--that I believed that everyone would be on a par with a grant-maintained school. That was an initial reaction. It may have been misleadingly reported in the press. But that reaction would have been common across the general broad perspective of the public. We know that that was not the detailed intention. Anyone with his head half screwed on who thought about it for five minutes would have realised that. But the general public, who are not intimately involved in these matters of detail, may not have seen the actual picture.

When the Minister replies--I sympathise with her in her difficulty--perhaps she will give a pledge which might simplify the situation. Perhaps she will state that, while allowing for variations across the country, no school in future will have less of its budget under its control than it had in the past. If we have that assurance people will be able to relax somewhat, and the concerns of many will be diminished.

5.30 p.m.

Lord Peston: I wish to speak to all the amendments in the group except Amendment No. 158C in the name of my noble friend Lady David. I can see why it is in the group, but it involves slightly different issues. Reserving the right to return to the matter, all I shall say today is that I support what she says about school

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libraries. All the other amendments are in the name of the noble Baroness, Lady Blatch, who, not surprisingly, did not speak to my noble friend's amendment.

Perhaps I may begin with two or three matters of principle. The document is called Fair Funding and the Government's intention is that there should be fair funding. The noble Baroness, Lady Blatch, was a member of a government who did not believe in fair funding. When I sat in exactly the place she is sitting now, I spent a great deal of time pointing out that extra money was being found for those schools which already had more and that the Government showed not the slightest interest in those schools which needed extra funding. They invented a peculiar formula to the effect that it was "extra" money and therefore not available to be allocated to the schools which needed it.

First and foremost, the Government are to be congratulated on believing in fair funding. I take it that the Conservative Opposition have come round to the idea of fair funding. The Liberal Democrats have always held views similar to ours. Fair funding is important and I am delighted that the Government are to treat schools fairly rather than singling out some for special treatment. That is germane to the point raised by the noble Lord, Lord Dixon-Smith, who might like to reflect on the matter before this section of our deliberations is over.

Secondly, as a matter of principle, those of us on this side have always been supporters of delegation and the local management of schools. We have argued that on many occasions. I certainly did so when I was responsible for education on the Opposition Front Bench. My noble friend Lady Blackstone can speak for herself, but my recollection is that she took exactly the same view. I know that when I was number two to my noble friend Lady David she took the same view. Therefore, no one has any lessons to teach us about the values of delegation and local management or any lessons to teach Labour authorities about it.

The Government's position is that core functions should remain with local education authorities but, in principle, everything else should be delegated. Perhaps my noble friend will confirm that that is the case.

The reason we favour delegation and local management is that it is a way of operating efficiently and gearing the schools to the needs about which they know; that is, the education of their children. That is common ground between us all. I am not sure whether I used the word "openness", but I like the fact that the new document is an attempt to make the funding formula transparent and to move us away from the mysticism of funding.

I turn to the specific amendments. I shall do my best to keep a straight face and take them seriously. Amendment No. 158A suggests that however we fund we must take account of,

    "the number of children in the school; ... the general education needs of those children; ... and any special costs associated with the area where the school is based".

I decided to turn that on its head. Could anyone believe a funding formula which said, "No, the one thing you cannot take account of is the number of children in the

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school. Of course, you must not look at the general education needs of those children and you must not look at any special costs"? In other words, the amendment is preposterous. Of course, any formula will take precisely those aspects into account in addition to others. I am totally at a loss as to quite what the noble Baroness and the noble Lord have in mind, other than to say that we should always do what is right. I agree with them entirely. So we do not need that amendment.

I am also struck by the provision for £50 per pupil in Amendment No. 158B. The amendment refers to educational expenditure. My noble friend Lady Blackstone knows a great deal more about the matter than I do because she has been briefed and I have not--

Baroness Blatch: Perhaps the noble Lord--

Lord Peston: Is the noble Baroness sure that she wants to intervene?

Baroness Blatch: I am open-minded and will listen to what the noble Lord has to say. I intervene to say that he should not be perplexed about the £50. It is taken from the Labour Party policy document published during the election. Indeed, Mr. Byers thought that no local education authority should hold back more than £50 per pupil.

Lord Peston: I feared that the noble Baroness wanted to say that, which is why I asked her whether she was sure she wanted to intervene. My honourable friend Mr. Byers did not say that. As I understand it--and I am sure that my noble friend Lady Blackstone will remind us--he was referring to administrative expenditure rather than to educational expenditure. The two are not the same. He was saying that there should be a limit on how much should be restricted to administration. He certainly did not mean that that would be the sum which would be retained by the local authority in general. I say "certainly", but as I am a person who always speaks with caution, I am sure that my noble friend the Minister will be able to confirm that. I believe that Amendment No. 158B is peculiar.

I have a final query. The Government's policy is that we are supposed to view as a partnership the LEAs' delegation of schools. That is the Government's philosophy and I strongly support it. Amendment No. 164A implies that there will not be a partnership; there will be a struggle between the two in which schools must be protected from what we might call the appalling behaviour of the local education authorities. There is nothing in the Bill, which I hope will become an Act, that gives the local authority such powers. Therefore, Amendment No. 164A is based on a misunderstanding of what we envisage is developing. However, I rely on my noble friend the Minister to expatiate on that in due course.

It is good that we are making a step forward in the direction of fairness. It will go hand in hand with delegation, which we strongly support, and the sooner

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we can get this part of the Bill over and done with the better because there are one or two interesting amendments to come.

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