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School Standards and Framework Bill

8.50 p.m.

House again in Committee on Clause 46.

[Amendment No. 162 not moved.]

[Amendment No. 163 had been withdrawn from the Marshalled List.]

Clause 46 agreed to.

Clause 47 [LEAs' financial schemes]

[Amendments Nos. 164 to 166 not moved.]

[Amendment No. 167 had been withdrawn from the Marshalled List.]

Clause 47 agreed to.

Schedule 14 agreed to.

Clause 48 [Maintained schools to have delegated budgets]:

Lord Whitty moved Amendment No. 167A:

Page 39, line 6, leave out subsection (1) and insert--
("(1) Every maintained school shall have a delegated budget.").

The noble Lord said: In moving this amendment, I should like to speak also to the rest of the amendments in the grouping. These are largely transitional amendments concerned with the timetable for implementing key provisions of Part II of the Bill. In essence, the main amendments allow that the financial provision should start from the beginning of the financial year and the administrative framework should start from the beginning of the academic year. I have provided the Front Benches and, as a precaution, the noble Lord, Lord Lucas, with a lengthy letter explaining the background to the amendments. They are relatively straightforward.

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In certain places the Bill as currently drafted assumes that the funding provisions of Chapter IV of Part II will take effect at the same time as the new school categories are introduced. But, as was explained during the proceedings in another place, the Government have concluded that the most appropriate date for introducing the new school categories would be 1st September 1999. But there are obvious problems in attempting to introduce major funding reforms from that date. All previous reforms of this magnitude--including the introduction of LMS itself--have taken effect from the beginning of the financial year in April, and it would be difficult to contemplate any alternative. Our conclusion therefore is that these changes should take effect from April 1999. That has the consequences dealt with by the amendments.

Our intention then is to bring in the new recurrent funding regime from April 1999 and apply it from the outset to all schools in the present LEA and GM sectors. This means, in brief, that GM schools will retain their existing governance arrangements for the five months April to August 1999, pending the transfer to their new legal categories on 1st September, but they would receive their recurrent funding from their LEAs from 1st April, under the provisions of Chapter IV of Part II. A capital grants regime for GM schools would, however, be kept in place for the time being to fund the completion of projects already in progress at 31st March plus any projects on which a start between April and August is essential.

Amendments Nos. 167A and 167B, 168B and 168C, 168E, 168G, 175E, 176G, 176H, 246B, 246E and 259D deal with the date issue. That arises because Clause 48 is the one clause in Chapter IV of Part II which is linked explicitly to the "appointed day", to be designated under Clause 20(6) as the starting date for the new categories. So the aim of the amendments is simply to disconnect Clause 48 from the provision on the appointed day. The effect of this group of amendments is to leave Clause 48 as a set of substantive provisions which define the entitlement of existing schools to delegated budgets from the start of the new regime, and also deal with the position of new schools which open thereafter. We intend to bring these provisions into effect from 1st April 1999.

The present subsections (2) to (5) lay down the circumstances in which, exceptionally, an existing school will not receive a delegated budget under the new regime. The substance of these subsections is now transferred to Schedule 31, by way of Amendment No. 259D. The rest of the amendments simply correct various cross-references so that they refer to Clause 48. None of the amendments affects the substance in terms of who is and who is not entitled to a delegated budget. The only material change concerns the decoupling of the operative date.

Amendments Nos. 257Q, 257Y, 259B and 259C are also concerned with timing. Clause 130 defines the phrase "school maintained by a local education authority" in terms of the new school categories. Amendment No. 257Q simply allows for the situation in which a provision containing this expression comes into force before the new categories. Amendment

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No. 257Y is the key amendment here. We propose to bring about the "phasing" which I have described by using the powers in Clause 132 to make "incidental, consequential, transitional and supplementary" provisions. Some of the provisions in the Bill will need to be applied temporarily to the existing school categories although they are expressed in terms of the new categories.

Amendments Nos. 259B and 259C are concerned with the winding up of the GM school funding regime. Again they are about timing. Schedule 31 enables the Secretary of State to specify an "appointed day" for this purpose, which need not be the same day as that appointed for the new school categories. But since Schedule 31 at present provides for only one appointed day, we wish to be able to extend the GM capital funding regime beyond that point. Those amendments provide for that.

There are other relatively technical amendments which are not timing amendments. I refer to Amendments Nos. 257T to 257X. Clause 132 confers a power to make incidental, consequential, transitional or supplementary provisions by order. However, these amendments convert that power into a regulation-making power so that it can be used in conjunction with other regulation-making powers in the Bill to produce a single set of regulations rather than hybrid orders and a set of regulations. The purpose is simply to reduce complexity and bureaucracy and to enable users to rely on one statutory instrument instead of having to refer to two. Again, no additional power is conferred by the amendments.

Finally, there are two further technical amendments, Amendments Nos. 168D and 168F. These relate to Clause 49(7), which provides that, in spending its delegated budget, the governors and heads of a maintained school are ordinarily deemed to be acting on behalf of the LEA. That is to say, they are in law acting as agents, not as principals. This is not intended to change the law. It frankly reflects what the department has always understood to be the legal position. However, for the avoidance of doubt, it seemed advisable to put this express provision in the Bill. One reason for that is that it removes any doubt as to whether VAT can properly be reclaimed by LEAs under Section 33 of the VAT Act in respect of purchases made by schools from their delegated budgets and other funds provided by the LEA.

The present amendments reflect discussions with Customs and Excise. I understand that that department is satisfied that the amended provisions are sufficient to meet its requirements for the purposes of that Act not only in relation to schools now maintained by LEAs but also in relation to former GM schools from the point at which they begin to receive funding from their LEAs under Chapter IV, Part II of the Bill.

That is a rapid explanation of the changes. As I say, the bulk of them relate to timing and there are the other two batches of technical amendments. I beg to move.

4 Jun 1998 : Column 554

9 p.m.

The Deputy Chairman of Committees (Lord Lyell): For the convenience of the Committee I advise it, and especially the noble Lord, Lord Lucas, that if Amendment No. 167B is agreed to I shall not be able to call Amendment No. 168, which would have been pre-empted.

Lord Lucas: Therefore I am required to speak to Amendment No. 168 at this stage, with apologies for it not having appeared at its right place in the groupings. If I leave it where it is I cannot speak to it. However, I would like to begin with a small protest directed generally at the House. For amendments to Clause 131 the alphabet goes C, D, E, R, F, G, S, H, T, U, V, W, X, Y, Z, J, A, A.

There is a well-established system of ordering sequences of characters, which is employed in a dictionary or telephone directory. It is perfectly adequate for all purposes and it can be easily adapted to the numbering of amendments. It occasionally leads to slightly long strings, but at least one can find what one is looking for. It has been a real terror trying to find my way round to my amendments. I have been backwards and forwards. Even the old arrangement was better.

That said, perhaps I may turn to Amendment No. 168. It deals with the deletion of a subsection which has now been moved to become Amendment No. 259D and paragraph 3 of the schedule, if I have got it right. Therefore I shall address it in that place, where it will be in the Bill if these amendments are agreed to. In this new amendment we have removed from its original place in the Bill a totally unjustified, random power in suddenly deciding that a school should not have a delegated budget. That is not based on any factual evidence, as required by the immediately preceding subsection, but at the whim of the Secretary of State.

I would like to know in what circumstances the Government propose to use the power and why they consider it necessary as a part of the Bill? Will the Government choose to specify a school to which, if this clause became active today, it would then apply? What circumstances are we looking at? How can we justify a power that is so wide and random and, to my mind, so unusual? Surely, it is something that can be conveniently forgotten. If a school has been condemned by Ofsted that is fine; if it has been found to be failing in conventional ways, then that is fine; but if it has not, then it has not and it should receive its delegated budget until it is found to be failing. That is the question.

If we are forced to pursue this matter to an issue I would point out that the amendments I object to in this group are the first two and the last. I would not be seeking to bring down any others in the group were we to win the vote.

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