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The noble Lord, Lord Pearson of Rannoch, made great play of looking at the conclusions and the Statement that we made. This is an old game to play and the noble Lord does it with great skill. I assure him that again there is no difference between the conclusions and the Statement that we made. They can live together entirely side by side and there is no difficulty for the Government.

Lord Grocott: My Lords-

Lord Hylton: My Lords-

Earl Attlee: My Lords, I think we should hear from the Labour Party.

Lord Grocott: The Leader of the House has reported, quite rightly, that there were extensive discussions about the ongoing problem of Iran. Were there any discussions on the wider issue of the region and the ongoing problem of the blockade of Gaza? How can the suffering of the people of Gaza be relieved? How and when will there be discussions at some stage, as surely there must inevitably be, between representatives of the European Union and representatives of the current Administration in Gaza?

Lord Strathclyde: My Lords, there was a discussion on Gaza. Generally speaking, the conclusion was positive about the steps that have been taken and we very much hope that the measures taken by the Israeli Government will be part of reducing tension in the area.

Lord Hylton: Are the Government aware of the very delicate situation now existing in Kosovo? This is already sub judice at the European Court of Justice. In addition, it so happens that the new Patriarch of all the Orthodox Serbs will be enthroned in the historic monastery of Pecs in October. This event could be seen by the Albanian majority as provocation or an act of cultural assertion. Do the Government agree that this makes it urgent to normalise relations between all the Serb monasteries and their Albanian neighbours?

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These have been tense since 2000-10 years ago. Will the Government ask the European Union to commission and pay for an independent third-party attempt at conciliation, which has already, I am glad to say, been invited by both parties in the conflict? I conclude by declaring a non-financial interest in the NGO in question.

Lord Strathclyde: My Lords, I cannot confirm that there was a discussion at the European Council but clearly the situation in Kosovo is immensely tense and the noble Lord has great expertise on it. The words that he has spoken today will of course be taken fully into account by my colleagues in the Foreign and Commonwealth Office.

Lord Trimble: Further to the point made earlier by my noble friend Lord Higgins, I draw the attention of the Leader of the House to what happened under the Bretton Woods system of fixed exchange rates whereby on occasions Germany revalued the deutschmark upwards, thus taking account of the changes between it and other countries on competitiveness. Surely what we need in the eurozone is some mechanism of that nature whereby one can adjust for changes in competitiveness rather than force countries, as is proposed to be done, through incredibly tough measures which they probably are incapable of sustaining.

Lord Strathclyde: My noble friend raises a point that we could debate and discuss for a very long time. He is right to mention the Bretton Woods arrangements. As to whether there should be an automatic mechanism to adjust for competitiveness, that is a matter not for the Government but the European Bank. It must take into account all the needs of all the economies within the eurozone and it is one of the reasons-only one-why we supported the view of the then Government that we should not join the euro in 1999.

Lord Stoddart of Swindon: I want to make two points. First, with regard to the reference to budget surveillance on page 4 of the Statement, this does not go far enough. It says that,

It is not a question of showing the Budget to the House; it is a question of the House of Commons agreeing the Budget before the Commission has its way. Surely that is right.

Secondly, why on earth do the Government continue to harp on about 40 per cent of our trade being with the European Union? The world is a much bigger place than that these days, so would it not be better if we expanded our trade with China, South America, India and indeed the Commonwealth, instead of concentrating on the backyard of Europe?

Lord Strathclyde: My Lords, on the question of the Budget, the noble Lord is in danger of tilting at windmills. We are not playing any verbal gymnastics that somehow when we say that it will be presented to Parliament first it means that round at the back door we are busily presenting it to the Commission. We are not. Tomorrow there will be a British Budget which will be presented to the British Parliament first. After it has been presented it will be a matter of public record and knowledge. I dare say that the Commission

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may be interested; it may indeed be very interested in looking at it before it is finally agreed by Parliament. Therefore, I do not think that there is a fundamental difference between the two of us on this issue. Neither, incidentally, is there about what the noble Lord Stoddart of Swindon, said about trade with the rest of the world. It is an important plank of British foreign policy to expand our trade beyond Europe. That is vital to our long-term prosperity and the creation of jobs in this country. We are using all the natural advantages that this country has built up over many decades-centuries even-with countries whose economies are growing extremely quickly. To ignore them would be an enormous mistake. So I hope that I can put a smile on the face of the noble Lord, Lord Stoddart, by saying that I very much agree with what he said.

Lord Martin of Springburn: My Lords, the Statement mentioned the banking sector. We all agree that, less than two years ago, young couples with children, first-time buyers, were sometimes offered a mortgage of more than 100 per cent. It is understandable that the banks have to tighten their belts-or, perhaps, to behave themselves-but young couples are now being required to find 25 per cent of their new mortgages. For young couples with children to find £25,000 to £30,000 is very difficult. Can the Prime Minister speak to the banking sector to make the point that if young couples can buy homes, that will help the building industry and relieve tension on community-based housing associations and local authorities?

Lord Strathclyde: My Lords, that may not have been quite a matter for the European Council, but the noble Lord, Lord Martin, raises an important point for young people and people starting families who are trying to purchase a house. The background against which we operate is now extremely different from what it was only two or three years ago vis-à-vis the whole question of mortgages and deposits. I assure the noble Lord that the President of the Board of Trade, the Chancellor of the Exchequer and the Prime Minister himself are very involved in trying to ensure that lending is allowed and encouraged to people who can pay it back, not just in the commercial and business sector but in the domestic sector.

Academies Bill [HL]

Bill Main Page
Copy of the Bill
Explanatory Notes

Committee (1st Day) (continued)

5.41 pm

Amendment 2

Moved by Baroness Morgan of Drefelin

2: Clause 1, page 1, line 3, leave out "any person" and insert "the governing body of a school"

Baroness Morgan of Drefelin: We turn now to the issue of free schools. As I said a moment ago, I am very grateful to the Minister for making the Statement repeating the Answer given to the Urgent Question asked in the other place, and for taking such a

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comprehensive set of questions. However, the Statement has generated more questions than answers. I am sure that as we go on in Committee we will learn a lot more.

Even the disinterested passer-by cannot help but notice that free schools are a flagship policy of the coalition Government-or at least of the Conservative part of the coalition Government. The Prime Minister and the Secretary of State were clearly delighted to be photographed during the election campaign with parents celebrating their promise of a new school on demand. It was great campaigning, I am sure that noble Lords will agree. A whole page of the Conservative manifesto was devoted to a case study of the Swedish education system, the model for the Government's free school proposals. Actually, when I looked at it, most of the page was taken up by photographs-very nice too-but at least nominally there was a page on the subject.

The Chancellor cited the reform as key to the Government's plans to close the deficit, as it would see free schools use money more efficiently. The Secretary of State says that he has seen the future in Sweden and it works. The Government seem to want a great deal of attention focused on this policy, but considerably less scrutiny about the practicalities of it. We may be changing that today.

Nowhere, however, in the pronouncements of the Secretary of State in connection with the Swedish-style free school reform, of which we have heard so much, has the Academies Bill been mentioned-until today. The Bill was announced under the headline, "Legislation to give more schools opportunity to become academies". The Department for Education website carries a document outlining the purpose of the Bill. It states:

"The Academies Bill will enable more schools to become Academies and give them the freedoms and flexibilities they need to continue to drive up standards".

The document makes no mention whatever of new providers entering the school system. The Explanatory Notes to Clause 1 state:

"This clause replaces similar existing provisions in section 482 of the EA 1996. It enables the Secretary of State to make 'Academy arrangements' with another person, to establish and run an Academy. That person will be funded by the Secretary of State further to either a contractual agreement (an 'Academy agreement') or, by new subsection (2)(b), through grant funding under section 14 of the Education Act 2002".

There is no mention of new providers here either, merely an oblique reference to previous legislation and "other persons".

5.45 pm

As the Minister pointed out just now during questions on the Statement, the clauses allow the Secretary of State to open a school, or to authorise anyone whom he sees fit to open a school, with almost no safeguards or undertakings. As the Secretary of State and the Minister know very well, that wholesale copy of the Swedish school model will not necessarily drive up standards in our schools. If the Minister has evidence that that is not the case, I would be very grateful to hear about it. I would also be interested to know where in the impact assessment evidence of the value of the Swedish model is set out.

When Sweden tried the reforms on which this proposal is based, standards fell sharply. The new schools founded

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under Sweden's reforms educate children of educated parents to a greater extent than those from educationally disadvantaged backgrounds. They have opened in rented office blocks and former commercial properties. That is not just according to the critics of the scheme-that account came from the Swedish National Agency for Education, their equivalent of Ofsted.

On the financial side, creating new schools and deliberately generating surplus places-as you will have to do to make them work-costs money. Without additional funding being promised, that will take money from existing schools. We have heard about a very small amount of money, which may suggest that the scheme may be more modest than the election campaigning suggested. There is also the question of capital. We will not see great new schools coming into being without tackling the issues mentioned by the noble Lord, Lord Greaves.

It is extraordinary that such a major change in approach to schooling in this country should be made in this way, where private companies will be invited to manage schools on behalf of groups of parents-although the message has now moved slightly to include groups of teachers-with no necessary regard to the well-being of children in nearby schools.

At the start of Committee, we had an interesting debate about the name. Given all the PR, positioning and developing of the free school brand, it would be very helpful if we could be consistent about names here. If free schools are academies, let us call them academies, as noble Lords argued persuasively earlier.

I am sure that we would all agree that there is no such thing as a free lunch or a free school. According to what I can glean from the Bill, the Explanatory Notes and so on, a free school is actually an academy without an academy agreement, so it is an exceptional academy. I would be grateful if the Minister could explain the intentions for free schools and the legislative process around the development of this flagship government policy. I beg to move.

Lord Greaves: My Lords, Amendment 3 in this group is tabled in my name. It is similar to the amendment that the noble Baroness, Lady Morgan, has just moved. I tabled this amendment because I have read the Bill several times-more times than is good for me-and I cannot work out whether the Government intend to include free schools within this legislation, and this is meant to be the legislation that will apply to free schools, or whether it is just about converting existing schools. My confusion, which is similar to that of the noble Baroness, arises because all the Government's statements about the Bill relate to converting existing schools into this new kind of academy. That is how the Bill was promoted. I read the Second Reading debate, and that was largely what it was about. So I was confused as to whether Clause 1, in particular subsections (1) and (2), could apply to free schools. The Bill states:

"The Secretary of State may enter into Academy arrangements with any person".

That seemed to me to provide an ability to include any group of people who put themselves forward to set up a so-called free school.

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Then there was the announcement at the weekend and the Statement that we have just had, and it now appears that the Bill includes free schools and that they will be set up within the terms of the Bill, if and when it becomes law. That is the real reason I put this amendment down for clarification. Will the Minister confirm that that is the case? Or do the Government think that free schools can be set up under existing legislation? In that case, they have a choice. If free schools are included in the Bill, a great deal of unanticipated extra discussion and debate is required, particularly in Committee.

I thank the Government and Ministers in both Houses for the amount of discussion they have been prepared to enter into with all Members of the House, and in particular with the Liberal Democrats, concerning the Bill. However, going over the notes I have made of meetings, I see that free schools have hardly been mentioned. The meetings have all been about conversions. Suddenly this weekend, the terms of the debate on the Bill seemed to change substantially. At this stage I do not want to enter into detailed debate about free schools. However, if there are to be free schools, the legislation and rules under which they are set up will need to be laid down at least as clearly as the rules for conversions are set out in the Bill. Given the quantity and detail of the amendments that have been tabled, we may feel that the detailed rules and regulations for conversions are insufficiently set out in the Bill and need improvement.

The system for setting up free schools does not exist in the Bill, as far as I can see, unless there is stuff that I have read without understanding what it means. This amendment is a means of getting from the Minister some clarification of these matters so that, in the rest of this debate in Committee and when the Bill goes back to the House, we can understand exactly what we are talking about. It may be that amendments that noble Lords might want to see in the Bill will be different according to the answer that the Minister gives. The basic questions are: do free schools need new legislation; can they be set up under old legislation so that the Bill does not apply to them; and, is the Bill necessary and fundamental to the setting up of free schools?

Lord Adonis: I hope the Minister will be able to confirm that entirely new schools can be set up, and indeed are set up at the moment, as academies. So, to the extent that that is true, free schools can be set up at the moment under existing academy legislation. I warmly welcome the suggestion made by my noble friend Lady Morgan that free schools should be called academies. I hope that the Minister is able to accept that suggestion, which my noble friend makes with great generosity of spirit, to make clear that we have a much more uniform nomenclature available. I am very keen to see all categories of schools that have the legal characteristics of academies called academies.

Lord Low of Dalston: I shall speak to Amendments 13 and 76, which are tabled in my name. When we debated the Bill at Second Reading, there was widespread concern throughout the House that academies should

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have obligations to meet the needs of pupils with special educational needs that are no less rigorous than those which apply to maintained schools. The Minister was very clear that he was fully committed to this, and I am grateful to him for the trouble he has taken in meeting Peers with these concerns and also in writing to provide assurance that that is what the Bill achieves. However, there are still areas that remain unclear, where the commitment could do with being spelled out more fully or where gaps in the obligations to which academies are subject need to be plugged. These amendments are directed at remedying these deficiencies.

Amendment 13 is a probing amendment with two purposes: first, to ascertain whether academies receiving academy financial assistance will be required to have funding agreements in place; and, secondly, to ascertain whether meeting the needs of children with special educational needs and disabilities will be included as a standard requirement within arrangements for academy financial assistance, just as it currently is in funding agreements.

Currently, academies are principally accountable through and governed by funding agreements signed with the Secretary of State. Clause 1(2)(b) introduces a new form of funding for academies-

These are not found in the original academies legislation. Arrangements for academy financial assistance are a form of direct funding from the Secretary of State granted through powers conferred by Section 14 of the Education Act 2002. Arrangements for academy financial assistance are an alternative to funding through an academy agreement so that it appears possible that, where arrangements for academy financial assistance are put in place, an academy may not be required to have a funding agreement.

While it is possible to have reservations regarding the scope and effectiveness of funding agreements as accountability mechanisms, there has none the less been clarity in funding agreements signed after 2007 that academies should have regard to the SEN code of practice and use their best endeavours to ensure that special educational needs are met. There are concerns that this new form of academy funding-arrangements for academy financial assistance-will bypass the safeguards contained in funding agreements in relation to SEN provision. This amendment gives the Minister an opportunity to make the position clear and to reassure us that academies receiving academy financial assistance will be required to have funding agreements, and that meeting the needs of children with SEN and disabilities will be included as a standard requirement within arrangements for academy financial assistance.

6 pm

Amendment 76 seeks to ensure that academy funding agreements are comprehensive in their coverage of the requirements that are laid on maintained schools in relation to pupils with special educational needs in Part IV of the Education Act 1996. I recognise that the intention behind the academies programme is not to weaken the SEN legal framework. The Government have stated that one of the broad principles on which

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they have approached the academies programme is that there will be no change to, or weakening of, the requirements governing SEN provision.

In response to questions asked at Second Reading about the safeguards for children with SEN in funding agreements, the Minister made it clear that the provisions of these funding agreements mirror the legislative requirements on maintained schools. Since 2007, model funding agreements, which govern academies' actions, have transposed measures from Part IV of the Education Act 1996 and made it clear that academies should have regard to the SEN code of practice. However, a contractual arrangement is one thing; a law is quite another. Contractual arrangements do not provide anything like the assurance provided by legislation. Even if we accept that funding agreements offer parents the same pathways to remedy as the law, which I question-I will have an opportunity to question this further when later amendments come up for discussion on Wednesday-existing funding agreements still do not refer to certain important aspects of SEN law that it is important not to lose.

It is true that existing funding agreements mirror some of the duties in Part IV of the Education Act 1996, but concerns remain that other aspects of Part IV are not covered. For example, no existing academies have the same duties as maintained schools under Section 317A of the Education Act 1996 to inform a child's parents if they consider that child to have special educational needs, or to admit a pupil with a statement when both the parents and the local authority wish the child to attend that school as maintained schools are required to do by Section 324 of the Education Act 1996.

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