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Lord Dearing: My Lords, I hope that I may add a few words on the exit strategy which concerns me. Let us consider, for example, a voluntary-controlled school with only two foundation governors. The majority of the non-foundation governors could take the school into a federation. If the school is then unhappy with that and appeals to the governing body of the federation, a decision will lie with the federation. There seems to be no exit. Some federations will not work. People can be peculiar. If people behave in a peculiar fashion, federations will not work. There is

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wisdom in providing some mechanism for a participant to withdraw other than the final decision lying with the governing body of a federated institution.

Baroness Ashton of Upholland: My Lords, I agree with the noble Lord, Lord Dearing, that people can be peculiar. Of course, he is never ever peculiar!

I start by emphasising that I appreciate the concern of the right reverend Prelate the Bishop of Blackburn and that of the noble Lord, Lord Alton, that federations should in no way diminish the religious ethos of schools of a religious character. As the noble Lord, Lord Alton, rightly said, the Government are equally committed to ensuring that the religious ethos of schools with a religious character should be preserved.

As regards an exit strategy, perhaps I may provide some reassurance on the position for schools that wish to leave a federation. If any stakeholder group, including foundation interests, trustees or the diocesan interests, petition the federated governing body for their school to leave their federation, but have their petition turned down, they will be in a position to refer the matter to the Secretary of State under the provisions of Sections 496 and 497 of the Education Act 1996, if the governing body has failed to fulfil a statutory duty or acted unreasonably.

If the Secretary of State is required to arbitrate on whether a school should or should not leave a federation, she will look at each case on its merits. One of the factors she will consider is whether the religious ethos of a school, as stated in the school's trust deed, is being undermined or would be likely to be undermined by not leaving the federation. I can say clearly that we regard the preservation of the religious character of schools as an important matter. In this, as in any other, determination by the Secretary of State, we would seek to ensure that the duties to preserve and develop the character of schools are fulfilled.

It is important to note that where the religious character of a school has been adversely affected, the Secretary of State would be in a position to direct the governing body of the federation to take steps to rectify that position as they would be under a legal duty to uphold the school's religious character as set out in any trust deed and the ethos statement in the instrument of government.

I turn to staffing. I fully understand that the sharing of staff within a federation is an area of concern to the Churches. However, I emphasise that one of the major advantages of federation is the ability to facilitate the sharing of staff resources to the maximum benefit of all schools within the federation.

We will stipulate that if schools wish to have a policy to share staff within the federation, that must be included as part of the proposals on which they will consult extensively with all interested parties before any decision to federate is taken. I have previously stated that if it is proposed to share staff after schools

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have entered a mixed category federation, voluntary-aided foundation governors can decide whether the voluntary-aided school should be involved in those shared staffing appointments.

I understand the importance of voluntary-controlled and foundation schools with a religious character having the option, as the right reverend Prelate said, of utilising Section 60(4) of the School Standards and Framework Act 1998, which allows the governing body to have regard to an individual's ability and fitness to preserve and develop the religious character of the school when appointing a head. In the event of there being a "same category federation" involving only voluntary-controlled or foundation schools of a religious character, schools will indeed have open to them the option of utilising Section 60(4). However, certain difficulties could arise in the event of voluntary-controlled and foundation schools with a religious character being involved within mixed category federations with schools without a religious character. I hope that noble Lords understand that European law will not allow us to extend what would be described as religious discrimination to schools without a religious character. Therefore, the most sensible solution to me to meet the requirements of voluntary-controlled and foundation schools, while ensuring that we remain in compliance with European law, is the concession that I am about to offer.

I intend that if it is proposed that schools within a mixed category federation should appoint shared staff after federation has taken place, we will allow representatives of voluntary-controlled and foundation schools of a religious character who will sit on the federated governing body to be able to veto the involvement of their school in the appointment of any shared staff, including, of course, head teachers. If representatives take that position, they would effectively be stating that they wish to keep the staffing arrangements for their particular school separate.

I am committed to ensuring that where schools wish to keep their staffing arrangements separate, staff will continue to be appointed to each school within the federation on the same basis as they would have been if the schools had remained separate. That will ensure that voluntary-controlled and foundation schools of a religious character, within a mixed category federation, will be able to appoint a head for their school in accordance with Section 60(4). I hope and believe that that will meet the needs of the right reverend Prelate.

We will put in place arrangements to maximise benefit for schools that wish to share staff by making the process as straightforward as possible and allowing governing bodies to think strategically in terms of allocation of staff resources throughout the federation. I recognise the importance of certain safeguards being in place for the appointment of new shared staff to schools within a mixed category federation. That is why we will allow for voluntary-aided foundation governors to be able to veto the appointment of a particular individual as head to their

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school (whether shared or not), if they feel that such an appointment would be detrimental to maintaining the religious character of their school.

I hope that the right reverend Prelate—and other noble Lords—will see from the detailed nature of this reply that I am as anxious as he is to ensure that the religious character of schools within mixed category federations is maintained. I also hope that he is reassured by the safeguards.

No school will be required to join a federation. Where schools with a religious character have concerns about preserving their religious ethos, the confederation model, which will allow schools to retain their individual governing bodies, will provide an alternative model for collaboration. We will of course be consulting extensively on draft regulations and guidance on federations with all interested parties. Before that stage is reached I will ensure that officials have further discussions with the Churches. It will be our firm principle that federation should not in any way undermine the religious character of schools. I hope that in the light of those assurances the right reverend Prelate will be prepared to withdraw his amendment.

Lord Alton of Liverpool: My Lords, before the Minister concludes, I point out that she has characteristically gone a very long way to try to address many of the arguments that have been advanced; many of us are grateful to her for that. Why is she opposed to the principle—or at least she has not dealt with it in her summing up—of a governing body of a school that is in a federation simply saying, following my noble friend's earlier point, "The relationships are not working and we now wish to leave the federation"? Why should not it be able to do that?

Baroness Ashton of Upholland: My Lords, it can indeed say that within the federation model. The issue is that schools that choose to adopt that model have one governing body, so the appeal is in a sense made to itself. If the body decides that it does not wish to let the school go, by whatever route is chosen—the obvious route involves a vote—I have put in place an appeal mechanism. The diocesan board or the governors involved could appeal to the Secretary of State. I have added on to the process of wishing to leave the federation an additional safeguard to ensure that that is in place.

The Lord Bishop of Blackburn: My Lords, I am immensely grateful to the noble Baroness for her detailed reply and for addressing so many of the concerns that I raised. For me, this is a matter of vision. I want federations—and confederations, for that matter—to have a variety of schools within them. That is the prize. What may appear to some to be rather nit-picking amendments about this or that—I do not much like getting into such debates—are needed in order to enable the wider vision of what might happen, particularly in rural areas, to happen. I am enormously grateful to the Minister, particularly

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for her reply on the exit strategy. That is a critical area for those of us who would like to encourage at least some pilot projects of this kind. I am grateful for the answers on staffing and the vetoes that will appear in regulations. I hope that the federations will be based on such a firm foundation of collaboration and co-operation that vetoes will not need to operate. However, putting them in place can be the basis that ensures that they do not operate because people have a security from which they might work. I am enormously grateful.

Before I withdraw the amendment—it is my last amendment—I pay tribute to and thank the Minister, her ministerial colleagues and the officers of the department for the gracious and kindly way in which they have dealt with me. I am a new boy to this process. I am particularly grateful to the Minister for her open-door policy, which has been extremely helpful in aiding us to construct a Bill which will, I hope, lead to the advancement of better education in our country. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 [Limits on power to provide community facilities etc.]:

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