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Baroness Andrews: The noble Baroness's amendment would do two things. Although she focused on the second part, I shall also address the first part as it raises some interesting issues. The first part of the noble Baroness's amendment seeks to introduce new criminal offences punishable by fines or imprisonment, or both, for people who breach the limitations set under the Education Act 2002 on the types of work in schools that may be carried out by different types of staff. The second part—to which the
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noble Baroness particularly addressed her remarks—would extend to those claiming falsely to hold qualified teacher status criminal sanctions mirroring those which already apply to persons pretending to be qualified doctors or solicitors.

Let me begin by addressing the first part of the amendment. We are pleased that the evidence which we have shows that the school workforce reforms are timely and welcome. As the noble Baroness will know, one of the things that we wanted to address on the basis of research evidence and what teachers were telling us was excessive workload. We believe that the future lies in the development of a more varied and specialised school team. Within that team, teachers will remain a distinctive group with a unique and protected role as the people responsible for steering the education that children receive. However, they will have access to support in the classroom and outside from a variety of other specialists, including trained and certificated higher level teaching assistants. That will help to reduce teachers' workload and help them to focus their own work.

None of this means that we will let just anyone walk into a classroom and teach children. Regulations made in England and Wales under Sections 133 and 134 of the Education Act 2002 guarantee that certain types of work shall be the preserve of teachers who have QTS and who hold full registration with the General Teaching Councils for England or for Wales, together with some other specified types of teachers. These include overseas trained teachers and so on. Other types of staff, such as teaching assistants, may carry out these specified tasks only if they are acting under the direction and supervision of a qualified or nominated teacher in accordance with arrangements made by the head teacher of the school in question. We believe that we have guarantees and boundaries which ensure that those provisions can be enforced.

Section 496 of the Education Act 1996 provides that my right honourable friend the Secretary of State can direct LEAs and school governing bodies about the exercise of their powers if she is satisfied that they have acted, or are proposing to act, unreasonably. That might include knowingly employing or deploying someone to perform tasks in contravention of regulations. Alternatively, it would be open to a parent or teacher to seek judicial review of the lawfulness of the employment or deployment of someone in contravention of the regulations. A head teacher would also be open to disciplinary action if they failed to put proper arrangements in place for carrying out specified work, and that is also covered by the school teachers' pay and conditions document.

We have a robust series of safeguards that address the question of the distribution of work in the classroom. We would certainly not want to invoke the criminal law in those situations, which is what that part of the amendment would do.

On the second part of the amendment, we are not in favour of criminalising situations such as this. We have robust provision in place. The second part of the
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amendment addresses a different matter; people who obtain employment as qualified teachers by deception. Teaching is unlike other professions, such as law and medicine—this is certainly not pejorative—where many practitioners are self-employed. Teachers cannot just set themselves up as such. They must apply for a post, which means having references taken up and checked. The General Teaching Council for England must be approached to verify that the teacher in question is qualified, holds full registration, has not been barred from teaching by the Secretary of State and is not on List 99. A teacher's employment is also subject to clearance from the Criminal Records Bureau. If someone managed to evade all those safeguards and obtained a post for financial gain by masquerading as a qualified teacher, they could potentially face up to five years' imprisonment under the Theft Act. That combination of safeguards is a better way to regulate the profession.

The noble Baroness addressed the question of fake degrees and diploma mills, which should be controllable in the first instance by the General Teaching Council for England and the equivalent body in Wales, which act as gatekeepers for the award of qualified teacher status. Registration is mandatory for all qualified teachers carrying out specified work in schools. I hope that the scrupulous application of those requirements would mean that we will not see this in the future. On those grounds, I hope that the noble Baroness will withdraw her amendment.

Baroness Walmsley: Will the Minister clarify something for me? Am I right to understand that she is rejecting the first part of my amendment so that the Government can continue to allow people to teach subjects for which they are not qualified?

Baroness Andrews: Absolutely not. I am saying that as we have worked through the provisions for workforce reform, putting the higher teaching assistants in place, and so on, that has been accompanied by sets of regulations. I am sure that the noble Baroness will remember the debate that we had in 2002 on those regulations, which make it clear what tasks are permissible for people supporting teachers in the classroom. If, for any reason, mistakes are made and people are deployed in an inappropriate manner, a whole range of things can be done that do not involve criminalising the teacher or person involved.

Baroness Walmsley: I thank the Minister for that qualification. Certainly, on the second part of my amendment, I am aware of the robust system that is in place to ensure that unqualified people do not masquerade as teachers. It was helpful to have that on the record. I hope that other teachers, certainly the head teacher, would notice if someone who was unqualified was in charge of children. I thank the Minister for her reply, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 93 to 95 agreed to.
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Schedule 14 [Amendments relating to the training of the school workforce]:

[Amendment No. 140A not moved.]

Schedule 14 agreed to.

Clause 96 agreed to.

Schedule 15 agreed to.

Clause 97 agreed to.

On Question, Whether Clause 98 shall stand part of the Bill?

Lord Hanningfield: Clause 98 introduces a sizable and significant change to the mechanism for the funding of schools in England. The background to this provision is the schools funding crisis of two years ago. Due to the mismanagement in Whitehall of the changes to the then formula, we were left with the undignified sight of schools without budgets and even teachers and support staff being laid off. This eventually led to the then Secretary of State apologising for the fiasco. I do not intend to go over old ground, but I stress once more, as I did at Second Reading, that we simply cannot afford a repeat of those circumstances as we embark once again on changes to the funding system.

Yet, we are here today to give the green light to those proposals with scant knowledge of their details or of how they will operate in practice. Much of the provisions in the Bill will be implemented at a later date through regulations and guidance issued by the Secretary of State. That, for any major legislation, is a constant concern. However, for something that will have a direct impact on the country's education system, it is even more of a worry.

I thank the Minister for sending me his department's policy paper in advance. However, I am afraid that the information in that document was restricted in the extent of detail provided. I cannot help but think that we are putting the cart before the horse with this section of the legislation, which is highly complex, and experts in the field are still grappling with its implications. It is being published at a time when a number of consultations, which have potential impact in areas covered by the Bill and for local government, are ongoing and have not yet reached conclusions. Ofsted currently has a consultation in train on the framework for inspection of schools, and is leading a 10-inspectorate-wide consultation on the framework for inspection of children's services, encompassing joint area reviews and annual performance targets. These are all results of the recent Children Act. Meanwhile, the Audit Commission is consulting on how a comprehensive performance assessment, which includes education, will work from 2005 for all local authorities. We now learn that consultation on this section of the Bill will not be launched until some time next month. Is the Minister satisfied that this part of the Bill has been handled in the best possible way?
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In relation to the proposed funding changes, the House of Commons Education Select Committee report makes the point:

Equally, given the complexity of this section, and the Government's stated aim that they wish all legislation to receive parliamentary scrutiny, it is disappointing that this Bill was not debated in Parliament before being introduced. It is therefore imperative that it receives proper parliamentary scrutiny and is not rushed through the process here.

That said, the main issues that cause concern are, first, three-year budgets for schools; I know that there is a lot of support for this, and it is probably the best way to give schools some security in the financial provision that they are going to make, but I will go on to talk about the problems associated with it. Secondly, there will be a new ring-fenced specific government grant for the schools budget; obviously there is a move away from funding based on the financial year. Thirdly, new powers will be given to the schools forums.

I have a number of specific questions to ask the Minister on the first of these areas, the three-year funding. How will the level of three-year budgets for individual schools be determined, when the main driver for funding purposes is pupil numbers? What forecasting methodology is proposed? At what level will the new ring-fenced grant be set—current spending or schools' FSS? What impact will that have, if any, on the level of funding available for other local authority services? Can the Government give a firm assurance that no authority would lose grant due to spending differences with schools' FSS, with possible knock-on effects on other services or the authority's council tax?

The formula for the new dedicated schools grant is likely to start from the schools' formula spending share—that is, the FSS. That will be constrained by both a floor and a ceiling for increases to take account of the fact that some authorities are spending over and some spending under the schools' FSS and the fact that distribution still does not reflect the 2003-04 formula changes. My own authority—Essex—of which I am leader, still benefits considerably from the floor and ceiling in the mechanism, and we have not fully lost the grant that we shall eventually lose.

Can the Minister also comment on the impact that the measure will have on the flexibility of local authorities to move money between central services and social services and schools and shape services locally? Can he also confirm that schools' funding will no longer be paid for partly by the council tax, and will he comment on where the additional resources channelled through council tax into schools on an annual basis will now come from? I believe that, in the past year alone, the figure was in the region of £331 million. Will a school's funding and expenditure remain part of the local authority accounts?
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There are important transitional issues owing to the fact that authorities do not spend at their schools' FSS levels. That is likely to be dealt with in the ODPM's floor and ceiling mechanism, which I have just mentioned, to limit grant changes to authorities. I should be grateful if the Minister could give us any further information that he may have on this subject.

At what date in the year will budget shares be issued to schools? August could be problematic if budget shares are for the year commencing 1 September. Given the proposed new powers for the schools forum, is there any intention to extend these powers in future years to the potential detriment of the ability of local authorities to influence allocation methodologies related to school funding?

How will overspending and underspending of the new ring-fenced grant in budgets be retained centrally to manage LEA activities—for example, in relation to special schools? Under the proposed new arrangements, what are the funding implications for schools in deficit? Many schools are in deficit and at present the Government provide a special fund to help them in the early years with a change of grant. Those schools are benefiting from the fund this year and they will benefit from it for another year.

I also want to ask the Minister whether he believes that ring-fencing makes the links between other services for children and schools more difficult. The Children Act 2004, which we all support, places local government as the accountable body for children's services in their locality. But does the Minister agree that the proposed changes in the funding system reduce further the ability of local councils to influence schools and promote their wider role in the children's agenda—for example, becoming extended schools—with the possibility of other children's services, such as social workers and health visitors being located on school sites? Personally, I believe that that is the future of school sites and that they will be developed to benefit the community. But part of the school site will be used with a budget which runs from April to April and the other part will come under a budget running from September to September.

Do the Government envisage that the budget shares for schools will in future be calculated on similar lines to those used by the Learning and Skills Council to fund sixth forms? Frankly, the need to convert academic year funding into financial year funding causes confusion and uncertainty at the individual school level.

Will the statutory S52 budget and outturn statements for schools move to a different accounting period, thereby requiring local education authorities effectively to close their school accounts twice each year? Again, as local authority leader, I am aware of that situation with regard to presenting our annual accounts to the auditors. There are also divergent systems for England and Wales. Perhaps the Minister will comment on whether he sees any particular problems in that respect.

Finally, we are concerned that paragraph 6 of Schedule 16 makes amendments to Section 47 of the School Standards and Framework Act 1998 along the
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same broad lines as those contained in paragraph 4. These will give the Secretary of State powers to issue regulations which could have a broad-ranging effect. As it stands, Section 47 allows the Secretary of State to make regulations on school budget matters, such as timing, factors and criteria, which should be taken into account. It is contended that these arrangements would give the Secretary of State power to issue regulations specifying limits on particular classes of expenditure without seeking the consent of Parliament. Perhaps the Minister can comment on why this clause is required and in what circumstances it could be used.

In conclusion, Members of the Committee will see that, although we very much support the three-year principle, we have a number of grave concerns not only about the Government's proposals under this clause but about the way in which they have gone about introducing them. Therefore, I look to the Minister today to provide the reassurances that we seek.

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