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Baroness Blatch: I am grateful to all those who have spoken because it was important to try to elicit information. My starting point was 100 per cent. because that focused everybody's mind on the fact that all money for LEAs will be given to schools and they will purchase back. As the noble Baroness and other

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noble Lords said--indeed, the noble Lord, Lord Tope, just repeated it--it is not as straightforward as it seems and the consultation paper makes that clear.

The merits of what local authorities should be responsible for needs reviewing constantly. One needs to ask whether what they are doing is important; whether it could be done in another way and whether the schools themselves could be doing it. That is all part of the delegation budgetary debate. My noble friend Lord Dixon-Smith will know--his comments showed great understanding--of the debate that goes on within local authorities.

When we devised the early financial delegation system, our starting point was whether we had to do everything as a local education authority. I can remember so often when we were adjusting budgets at central level that schools would say, "If you would give us the money, we could make the policy decisions rather than making one policy decision at central level which pleased some schools and not others". The noble Lord, Lord Tope, is right when he says that that is no longer an issue and I am pleased about that.

The truth is that there are additional expenditure items for local authorities to take on board. There are so many in the Bill that I do not intend to go through all of them. The ones we have discussed so far include the management of the class pledge--an interesting report came out today which will add a little more fuel to that debate. But the organisation committees and the adjudicator will have to be funded by education authorities. Even if the matter was delegated to schools it would not make any difference. It is a cost that would have to be paid and therefore there would not be much choice on the part of individual schools.

The noble Baroness, Lady David, referred to the special treatment of grant-maintained schools. That has been almost a fetish for the Labour Party. It is unfortunate because grant-maintained schools were not specially treated. They volunteered to become grant-maintained schools. They received a sum of money from central funds which was commensurate with the extra responsibilities that they had. It was not just a financial delegation; it was the responsibilities that went with it, including being completely responsible for curricula matters and curricula development. They were accountable to parents, governors and external inspectors without any intervention from the local education authority. The delegation we are discussing does not go that far. The LEA interventional powers are back in the Bill and will relate to the grant-maintained schools as they become foundation schools. Grant-maintained schools received those funds.

I want to ask the noble Baroness a question which will be important in the context of this debate. Grant-maintained schools as they exist at the moment receive as a delegated sum of money from their local authorities 100 per cent. of their share of central moneys. They stand completely outside of the LEA. Some work well with the LEAs and the purchasing, but some do not.

Is the new system intended to bring all other schools up to that level of delegation? In other words, can we expect under the new system that grant-maintained

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schools--as they are now and when they become foundation schools--will be funded at least at the level at which they are presently funded, possibly even greater if there is more money for education, and that all other schools that are not receiving those delegated funds, where they opt for them, will be brought up to the level of grant-maintained schools?

That is an important point. For grant-maintained schools there is an issue of phasing. The noble Baroness talked about phasing this in; that it will not all happen in one fell swoop because it is an extremely big exercise, and I accept that. But does that mean that grant-maintained schools will lose the degree of autonomy they presently have in terms of financial autonomy? Will they go down to the level of whatever the phased level is, and then move back up to a level of delegation as the system is phased in? Or will grant-maintained schools keep their level of financial delegation while the phasing in applies to the community schools and what will be new community schools into foundation schools? That is an important point.

A point I did not make, but which I feel I should make for the record--there are a number of points in the paper with which I agree--relates to insurance. It was dealt with extremely well in the paper. It is a big issue for local authorities and schools. Under a delegated system I am sure that the schools will have much to contribute in the course of the consultation period, which will be helpful. I agree also that there has been a real attempt at transparency. I feel that it will be a more transparent system and I welcome that also. Like the noble Baroness and her colleagues, we have all been concerned about those local authorities which appear to be able to salt away money which ought to go to schools without our being able to find it.

The confusion will arise as people read the words on the page. They will be reassured by the document, as they have been already, but until the local schools budget is known, until schools have some notion about what it is and what it contains, and certainly until figures are put upon it, nobody will be in a position to know what the 100 per cent. will be measured against. It is only when they know what the 100 per cent. will be measured against that they will be able to make a judgment as to whether it is a good or a bad thing.

The noble Lord, Lord Tope, put his finger on another point, which is that what matters is the cash that will go into the schools at the end of the day. Will the level of funding that goes into schools be at least commensurate with the present level of funding, or will it be greater? All the expectations are that it will be much greater because that is what the rhetoric has been from the Government.

The noble Baroness referred to national insurance. That is not a matter of delegation, but a matter for the schools. They have to pay it, even without the level of delegation which the Government are talking about. At the moment, schools pay the salaries of their teachers and if national insurance is an extra cost to them, that cost has to be met. This is definitely a matter for delegation. If it is not, then schools will have to meet it

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out of their internal funds. Every pound they spend on making up the deficit of national insurance costs will be money that will come out of the classroom.

The noble Baroness did not go far enough on grammar schools. My understanding is that within a relatively short time of this Bill receiving Royal Assent, the grammar school provisions will be brought into play. Once a petition has taken place, and a ballot has been successful, so that a school loses its selective educational system, then the local authority has to move straight in and produce a reorganisation plan. The capital costs of that plan, and the revenue costs that flow from it, will pre-empt all its capital budget, whether or not it is a priority for that local authority.

My understanding is that Trafford is concerned about this. It is the one authority that appears to have looked at this issue. Just one ballot will take the grammar schools out of the LEA. The resulting reorganisational costs to that authority will be extensive indeed. As the Bill progresses through this House we shall want to come back with more detailed questions about that.

The noble Baroness did not refer to the Oratory School special music provision, and I would be grateful for a letter about that, and the way in which that fits in to the proposals in the paper.

The national minimum wage was also not mentioned. That will be a cost on local education authorities. One thinks of school cleaning and school catering. There will be costs there. Who will meet them? Are they part of the system? Will that be additional? Does that come within the present limits? We simply do not know.

I was worried about lines 39 and 40 on page 38 of the Bill because that gives more scope for setting the kind of conditions that inhibit the freedom that I believe the Government genuinely want and which we, too, would want.

As to transport, there are some good examples of individual schools and groups of schools arranging good deals on transport. I am not always convinced, having come from local government, that local government necessarily drives the hardest bargain. There is no greater incentive for driving a hard bargain than when you are dealing with your own money. Local authorities are dealing with someone else's money and when a school is driving a bargain it is dealing with its own money.

On the point made by the noble Lord, Lord Tope, about statistics, I think that will be a difficulty as time moves on, where one local authority is delegating money for libraries and another is not. I agree with the noble Baroness that it will be possible, over time, to look at library services or music services in an authority, however they are paid for, whether that is through delegated moneys or paid for centrally, and make a judgment about the quality of those services, and the amount of money going into them. The source of money will be known; it will be there and it will be transparent. That is an issue. The statistics will be difficult to start with but, over time, I think it will work.

We have not had enough information about the timetable. I am concerned that this consultation paper may not be finished until July. If so, when are we likely

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to see the regulations that will flow from it and that will underpin the LEA's allocation system? More importantly, when are we likely to see the LEA schemes which will follow that? When will the schools have some idea of when the system will operate in their authorities? When will they know the sums of money that will be available?

6.30 p.m.

Baroness Blackstone: I meant to answer those important questions earlier. If I intervene straightaway it might be helpful.

The Government hope to be able to reach decisions after the end of consultation in the early autumn--around late September--and that regulations will be made in late October or early November, and that the schools will get their indicative budgets in early January. I hope that is helpful.

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