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Lord Filkin: My Lords, we did indeed have a discussion in Committee about regulations on school funding being subject to the affirmative procedure. In fact, debating "affirmative or negative" is one of the leitmotivs of this House. I do not mean to be flippant. We signalled that it was excessively burdensome always to have the affirmative procedure, but, recognising the feeling of the House, I accept that the introduction of three-year budgets based on the academic year is an important and significant change and that the House has a legitimate interest in scrutinising the detail of the proposals.

I remain of the view that we do not need this to be done every year, but the amendment does not require that. I am happy therefore to signal that the Government will
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not resist the amendment proposed by the noble Lord, Lord Hanningfield. I thank him for his measured thoughtfulness in this respect.

Lord Hanningfield: My Lords, this is an example of how this place can work. I am grateful to the Minister for accepting the amendment. Given, as I said, that this is complex legislation, this amendment is the right way forward.

On Question, amendment agreed to.

Schedule 1 [Her Majesty's Chief Inspector of Schools In England]:

Lord Filkin moved Amendments Nos. 15 to 22:

"(2A) The Chief Inspector must ensure that additional inspectors have the necessary qualifications, experience and skills to assist him in the effective discharge of his functions.
Page 68, line 14, at beginning insert "In pursuance of the duty imposed by sub-paragraph (2A),"
Page 68, line 19, at end insert "and the skills that they are to be required to demonstrate in the exercise of those functions"
Page 68, line 24, at end insert—
"(4A) If the Chief Inspector has entered into arrangements with persons who are not themselves additional inspectors ("inspection service providers") for the provision by the inspection service providers of the services of inspectors, the Chief Inspector must publish, at intervals of not more than 12 months, a list of the names of those persons who, as at a specified date, are currently notified to him by any inspection service provider as persons with whom the inspection service provider proposes to make arrangements for the carrying out of inspections on behalf of the Chief Inspector."
Page 68, line 25, leave out sub-paragraph (5).
Page 68, line 30, leave out from "England" to end of line 32 and insert—
"(7) The Chief Inspector may not authorise an additional inspector to conduct an inspection of a school under section 5 unless—
(a) the inspection is to be supervised by one of Her Majesty's Inspectors of Schools in England, or
(b) the additional inspector has previously conducted an inspection under that section under the supervision of one of Her Majesty's Inspectors of Schools in England ("the supervising inspector") to the satisfaction of the supervising inspector."
Page 69, line 15, after "sub-paragraph (3)" insert "and paragraph 2(7)"

On Question, amendments agreed to.

Schedule 16 [Funding of maintained schools]:

Lord Hanningfield moved Amendment No. 23:

"(c) following the initial allocation of its schools budget to a local education authority in England, there shall be a 30 day period of consultation and clarification in regard to the amount referred to in subsection (2)."

The noble Lord said: My Lords, I have tabled Amendment No. 23 at this late stage in an attempt to clarify further and to help with regard to the complex issues referred to in previous amendments.
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With most funding systems, such as local authority grant settlements, the Government announce a provisional settlement and people are able to make representations and comment on it. A little later, the Government will announce a final settlement. In view of the discussion we had previously about the muddle between Bromley and Buckinghamshire—even if it concerned only capital—I believe that there should be some mechanism to enable schools and local authorities to comment on government settlement arrangements in case there are any anomalies.

Therefore, even at this late stage, I hope that the Government will reflect on this amendment and assure us that something like this will be done. The process should be transparent and schools and local authorities should be able to spot any problems. Given that modern technology does not always work, there could be loops in the system that prevent the delivery of what is expected. Thus, at this late stage of the Bill, I am proposing this amendment in the hope that the Government will give us an assurance about how the process will work. I beg to move.

6.30 p.m.

Lord Filkin: My Lords, I thank the noble Lord, Lord Hanningfield, for what I heard as an important probing amendment. The noble Lord is seeking to get on to the record some clarification of the detail of these mechanisms. I will do my best to be as helpful as I can. If there are further points of detail, I will seek to buttress it with further correspondence—copied, of course, to both opposition parties—if that would be helpful.

I should explain that under the new system of three-year budgets, initial allocations of the dedicated schools grant will be based primarily on estimates of future pupil numbers rather than actual data. Those estimates will be used to determine a unit of resource per pupil for each authority, which will then be guaranteed. There will then come a point, of course, when allocations will be finalised based on actual data. I accept entirely the need to consult local authorities at that point to ensure that the underlying data are accurate. That would, for example, parallel the existing system for the local government finance settlement as a whole, under which a provisional settlement is issued for consultation and that is then followed by a final settlement. I am happy to give the House an undertaking that this kind of consultation will take place.

I do not think that it is necessary to put on the face of primary legislation a requirement to consult, because it is in everybody's interest that such consultation takes place. If there were to be a mistake in the underlying data then it is in the Government's interest, as well as in the authorities' interest, to be alerted to that as soon as possible. These are, however, broad framework powers and including detail about exactly how and when consultation should take place would be unnecessarily prescriptive and could get things wrong.

I fully sympathise with the underlying purpose of the amendment but, for the reasons I have explained, it is not necessary to have this requirement on the face
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of primary legislation. I should also add that, for various technical reasons, the amendment would not achieve its intended effect. I also understand the desire of the noble Lord to see full consultation on the distribution formula as well as on the data underlying the distribution. Of course, any such consultation would in practice have to take place well before allocations were issued to authorities rather than after—as implied by the amendment.

We have made clear that we do not intend to make any significant changes to the existing SFSS formula in the short term. There will be some minor technical changes, and we will consult all interested parties on those in due course, just as we have in recent years. If, in the future, we were proposing to make more fundamental changes to the formula, we would again consult interested parties fully on those. Again, however, it does not make sense to tie such consultations to the determination of the authorities' schools' budget, because, as I have said, the formula will have to be determined well before the DSG is allocated. Nor will there necessarily need to be a consultation every year, since allocations will cover more than one year at a time.

As I have said, I do not think it is necessary to have such a requirement on the face of the Bill. I hope that what I have said is helpful. I shall be happy to amplify anything that is not clear and I hope that I have set, at least partly, the mind of the noble Lord, Lord Hanningfield, at rest.

Lord Hanningfield: My Lord, I thank the Minister for that reply. It does set my mind partly at rest. I was also reassured that he might set out some further thoughts in writing. As we are now probably moving to this legislation becoming law, we want to make certain that three-year funding, which we all support, will work. We want to make certain that the Government have all the procedures in place and the arrangements for consultation.

I thank the Minister for his comments today. I shall certainly read in Hansard what he has said. If he can amplify it further, I would be grateful. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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