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Lord Hanningfield: My Lords, on this amendment my name and that of my noble friend Lady Morris are added to those of the noble Baronesses, Lady Sharp and Lady Walmsley. I shall not add much to the debate other than to say that, if we are not careful, we shall create an unelected body that takes decisions on behalf of many people. One has to be very careful how one uses the schools forum. It might be a useful talking shop but it certainly should not be empowered any more than it was under the original Act, as my noble friend Lady Blatch and the noble Baroness, Lady Sharp, sought to secure. If
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this is something that is being brought in by the back door, I am sure that we shall all regret it, and so I support the amendment.

Baroness Andrews: My Lords, I suspect that the unholy alliance rides again. I must say to the noble Baroness that I cannot respond in kind to the forensic analysis that she has offered. This is an instance when we shall read Hansard carefully. But I want to reassure the noble Baroness, and I shall do so in the simplest way possible. If I have reason to write to her, I shall of course do so.

However, I reassure the noble Baroness and the noble Lord, Lord Hanningfield, emphatically that this is in no way a sneaky way of reopening or overturning the debate that we had on schools forums in 2002. We were beaten on that issue in 2002 and we remain beaten in that sense. The powers proposed in this Bill do not remove powers that currently rest with local authorities.

As the noble Baroness said, I stated in Committee that the powers seek to allow schools forums to take decisions in respect of two very specific issues where proposals currently have to come to the Secretary of State. As I argued then, this was a way of reasserting some local control. Those two issues are: variations in the limit on central expenditure within an authority's schools budget; and variations in the detailed operation of the minimum funding guarantee to reflect schools' individual circumstances. That is the burden of those interrelated schedules and details.

Secondly, I want to emphasise and make clear that schools forums will not be able to make proposals themselves. Their decision-making power is limited to approving proposals that come to them from the local authority. The purpose of the proposed powers is simply to ensure that those decisions, which are very specific to the local circumstances of each local authority, can be taken locally. As I said in Committee, it is a principle that I hope noble Lords will agree is entirely correct. I would be very surprised if they did not do so in view of what noble Lords have always argued. On that basis, I applaud the tour de force of the noble Baroness and I hope that this simple but honest response will suffice for her to withdraw the amendment.

Baroness Sharp of Guildford: My Lords, I thank the Minister for praising my efforts on Saturday afternoon but I am not totally satisfied, partly because of the weasel words. The local authority has to ask for approval. Asking for approval from the schools forum is different from the schools forum being merely advisory. In 2002, the issue was the determination of budget allocations. It was a question of whether the schools forum should be able not just to advise on, but determine, budget allocations. The decision taken by Parliament was that the LEA—which is, after all, the elected authority—would decide on its own budget allocations and it would take the advice of the schools forum on that occasion.

The Minister will say that the power of the Secretary of State to override that was written into the Act. Neither the noble Baroness, Lady Blatch, nor I was
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particularly keen on power of the Secretary of State to override, but we wore that one because we recognised that Parliament makes Acts and can override local authorities. Indeed, to our regret, Parliament has taken over many of the powers that local authorities used to exercise and overrides local authorities on many occasions. We would like to see it otherwise. But it is established that the Secretary of State, with the authority of Parliament, can override the will of a democratically elected local education authority.

What is being suggested here is that a local authority should have to go cap in hand to an unelected body and say, "Is that all right? Can we do it?". We do not think that that is the right procedure. We believe that decisions on spending money should be derived from the democratically elected body representing those people and that the local education authority is the right authority to make these decisions. Ultimately, if the electorate does not like the decisions the local education authority makes, it throws it out. We have seen that happen quite often. But that is the right procedure and is the one that we think should happen here.

The Minister may use her weasel words and say that that is not the intention of the Government, but I think that her officials have perhaps pulled a fast one here and that the power goes further than the Minister thinks. I shall withdraw the amendment for the moment, but we may well return to this at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Walmsley moved Amendment No. 106:

( ) "After subsection (5) insert—
"(5A) An authority's schools' budget will include such amount as the authority may determine for meeting expenditure by the authority to secure improvement in the provision of services by some or all schools within its area.""

The noble Baroness said: My Lords, the purpose of Amendment No. 106 is to ensure that an authority's schools budget includes an amount determined by the local authority to enable it to plan inclusive services strategically to promote improvement for children locally. The amendment was suggested to us by the LGA, which represents local authorities. It is concerned that ring-fencing 100 per cent of local authorities school budgets would impede the ability of local authorities to plan strategically.

While it welcomes the assurance given in Committee by the noble Lord, Lord Filkin, that the Government do not want to alter the relationship between schools and local authorities, and that schools should continue to go to their local authorities, which will have the role of leadership and support for raising educational attainment for children in their areas, it does not believe that local authorities will be able to perform that role if the budgets are completely ring-fenced. It feels that will lose the flexibility that local authorities
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currently have to pool funding for schools and other local authority services in order to shape services locally.

There is concern that the link between schools and other services in the community will weaken. There is a wide range of examples of services that local authorities provide that could be threatened if the entire schools budget was ring-fenced. I have two examples. The first is a county council that uses its detailed knowledge of schools to inform its preventative work. That knowledge is used to support schools' self-evaluations and is used comparatively to inform improvement. Its support programme has been developed jointly with schools. Critical information is brought together from a range of areas to identify additional support needs. Such early intervention enables performance issues to be addressed at an early stage to avoid the more expensive approaches to school and community regeneration that become necessary if early intervention is not carried out. I know that sort of approach is exactly what the Government really want.

The second example is support on issues such as attendance. The local authority is well placed to draw together strategic approaches to the complex issues underlying the challenges facing schools and the community in the area of attendance. We fear that the local strategic knowledge and resource may be lost as a result of the proposed changes. Councils' ability 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 or health visitors being located on school sites—would also be affected.

The LGA agrees that it is important to provide schools with greater certainty over school budgets, but it does not agree with the Minister's statement in Committee:

The organisation is concerned that the decision to move to three-year ring-fenced budgets was taken with no consultation with local government, and without waiting for the outcome of the ODPM's consultation. The decision means that school funding will be placed on a completely footing from other local government services, with councils becoming in effect an agent of central government. That will lead to decreased flexibility and autonomy at a level with regard to education funding, and contradicts the Government's policy of restricting ring-fencing in order to allow local authorities greater flexibility.

With consultation on three-year budgets not yet having been published, we believe that the provisions have not received proper parliamentary scrutiny, because we do not have the wherewithal to do so. While local authorities welcome the Government's assurance that, with regard to the powers that will introduce three-year ring-fenced school budgets and abolish the existing reserve power to set an authority's minimum school budget, they will consult fully before putting in place regulations under any of them, the LGA still believes strongly that it does not make sense
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for the Government to introduce those new provisions without having undertaken comprehensive research and consultation with local government and other key stakeholders regarding the implications of the new powers. If they did consult, I think they would hear a unanimous call for our amendment. I beg to move.

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