Amendment 158, tabled by the noble Baronesses, Lady Hughes and Lady Jones, and the noble Lord, Lord Touhig, seeks to protect the right of children, young people and their parents to choose the school or institution named in their EHC plan. I agree with the intention behind the amendment—the importance of a person-centred system is at the heart of our reforms. The Bill places specific duties on local authorities to consult a child’s parents or a young person while drawing up an EHC plan. Clause 38 requires the local authority to send the draft plan to the parents or young person and to make clear their right to make representations about its contents, including the right to request a particular school or institution. In the event that a parent or young person is not satisfied with the school or institution named in their EHC plan, they have recourse to mediation and an independent tribunal.

7 pm

The Bill makes the local authority statutorily responsible for producing and delivering EHC plans and for securing the special educational provision specified in them. Although I agree that the child, their parents or the young person should be at the centre of all decision making, the noble Baroness’s amendment could make it impossible for the local authority to fulfil its statutory obligations if a parent or young person refused to accept the school or institution named in the plan. As noble Lords will have heard me say before, the focus of our reforms is that decisions should be made collaboratively, but the ultimate responsibility for securing support is with the local authority.

I turn now to Amendment 161 and the questions raised by the noble Lord, Lord Touhig. Clause 41 and the regulations made under it allow the Secretary of State to approve independent special schools and independent specialist colleges to be included in a published list. This clause is not an approval process for the institution per se. The majority of institutions

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which are approved under Clause 41 will already exist. An institution which is removed from the list will not be closed down or have funding withdrawn. Children and young people may still attend the institution and may ask to have it named in an EHC plan. However, the local authority will not be under a conditional duty to name the institution; it will have to agree to do so. It will also need to seek the institution’s consent, since it would not be under a statutory duty to admit the child or young person. Since this is a limited, enabling clause which does not affect the operation of an institution, we do not believe it is proportionate or necessary to set out a process for appeals. I hope this reassures the noble Lord. The list will be kept up to date so that parents and young people can make informed decisions about the range of specialist provision available to them. It does not seem appropriate for this to be prescribed by regulation.

My noble friend Lord Lexden referred to a letter I recently sent to the Independent Schools Council in which I said that draft regulations made under Clause 30 will ensure that a link to the list of approved providers is included in the published local offer. Regulation 13(1)(a) of the draft assessment and plan regulations requires local authorities, when they send a parent or young person a draft EHC plan, to advise them where they can find information about the schools and colleges that are available for the child or young person to attend. This would include institutions on the list produced as a result of Clause 41 and other independent schools catering for children with SEN.

I hope that my response reassures noble Lords on the points they have raised during the debate. I therefore urge the noble Lord to withdraw his amendment.

Lord Lexden: My Lords, I thank all who have taken part in this brief debate, and particularly my noble friends Lady Perry and Lord Addington for making clear their strong support for the great work that is done in independent schools, particularly those of a specialist character dealing with special educational needs. I listened carefully to my noble friend’s reply, and I thank him for dealing with the points so fully. He will understand that in listening to him I did not extract complete assurance and total satisfaction. I shall read the comments in Hansard in full and consider what further action might be appropriate, as many other noble Lords will be doing. For the time being, I beg leave to withdraw the amendment.

Amendment 153 withdrawn.

Amendments 154 to 156 not moved.

Clause 38 agreed.

Clause 39: Finalising EHC plans: request for particular school or other institution

Amendments 157 and 157ZA not moved.

Amendment 157A had been withdrawn from the Marshalled List.

Amendments 157B and 158 not moved.

Clause 39 agreed.

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Clause 40: Finalising EHC plans: no request for particular school or other institution

Amendment 159 not moved.

Clause 40 agreed.

Clause 41: Independent special schools and special post-16 institutions: approval

Amendments 160 and 161 not moved.

Clause 41 agreed.

Clause 42: Duty to secure special educational provision and health care provision in accordance with EHC Plan

Amendments 162 to 164B not moved.

Clause 42 agreed.

Clause 43 agreed.

Clause 44: Reviews and re-assessments

Amendments 165 to 169 not moved.

Clause 44 agreed.

Clause 45: Ceasing to maintain an EHC plan

Amendments 170 to 174 not moved.

Clause 45 agreed.

Clause 46: Maintaining an EHC plan after young person's 25th birthday

Amendment 175 not moved.

Clause 46 agreed.

Clause 47 agreed.

Amendment 175A not moved.

Clause 48 agreed.

Clause 49: Personal budgets and direct payments

Amendment 176

Moved by Baroness Sharp of Guildford

176: Clause 49, page 36, line 14, leave out “must” and insert “may”

Baroness Sharp of Guildford: My Lords, I shall speak also to Amendments 177 and 179 in my name. In Clause 49, we move to the issue of personal budgets and direct payments. The purpose of these amendments is to probe issues concerning direct payments and

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personal budgets. The Bill provides an entitlement for schools or colleges to make representations to the local authority when it is considering making a direct payment to a child or a parent. The amendment provides an alarm for local authorities to be able to exercise a judgment about whether to make an individual payment.

Clause 49 gives the parent a statutory right to require the local authority to prepare a personal budget and to meet direct payments, even in circumstances where the school or college does not think that this would be sensible or justified in terms of efficiency or economy. This is not to disparage the vital contribution that parents make, but to suggest that there will be occasions when their wishes would not necessarily be in the best interests of their children or reasonable in the context of an efficient and cost-effective system.

The case has not been made in the pathfinders that the introduction of direct payments to parents will help children with special educational needs. The evaluation of the pathfinders shows that the demand for direct SEN payments to parents has been extremely low. The evaluation states that many commentators are apprehensive about the extent to which this testing should be rolled out to a wider population. Of the 290 direct payments across the 14 case study sites in the pathfinders, 270 out of 290 dealt only with school personal transport. That means that there has been no investigation of the feasibility or desirability of making direct payments to parents for educational elements of the provision, such as the deployment of a special teaching assistant.

The pathfinder information pack acknowledges that personal budgets are more established in social care and health settings than in educational settings. The pathfinders themselves found that schools, colleges and parents were often confused about which elements of funding, in an educational context, could be used as a personal budget to give families more choice and control. The reasons cited for poor take-up are the challenges and complexities in the direct payments offer. Personal transport budgets were in fact by far the easiest to disaggregate. The pathfinder information pack acknowledges that it is essential to have a good market development strategy in place.

A remaining concern for teachers is that the fragmentation of budgets will have a detrimental effect on the viability and quality of services which pupils need to access, and will lead to a lottery of appropriate SEN provision. Teachers are also concerned about the loss of the quality assurance role carried out by local authorities and do not believe that giving individual packets of money to individual parents is the most cost-effective way to deliver the provision to meet needs. The case for direct payments, they feel, has not been proven by the pathfinders.

The warning in the evaluation report that there are reservations about the extent to which testing can be rolled out to a wider population needs to be carefully heeded. Teachers continue to have significant concerns. In a recent survey, 65% of SENCOs—the special educational needs co-ordinators in schools—were concerned about allowing parents to control funding for SEN provision. That is not because teachers fail to

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recognise the essential role of parents, or their unparalleled knowledge of their child’s individual needs and aptitudes; it is because teachers also recognise that teachers, schools and parents must work as equal partners, with the professional judgments and expertise of teachers respected and valued alongside the contribution from families.

The pathfinders have not, it seems, proven that to be an option that parents are demanding or which teachers have confidence can work, or will benefit the children with special educational needs whom they teach. Demand for direct SEN payments has been low, and many children’s charities believe that the introduction of individual payments will further accelerate the disintegration of specialist services, such as the support services for deaf children, which the Council for Disabled Children is campaigning to save in different local authorities. The case that direct payments will support the SEN reforms in a meaningful way has not yet been proven. I beg to move.

7.15 pm

Baroness Jones of Whitchurch: My Lords, we have Amendments 180, 271 and 273 in this group, which I shall address. We have touched on personal budgets in a previous debate. At that time, the noble Baroness, Lady Howarth, spoke movingly about some of the problems experienced by those in adult social care in managing employment challenges when they had to employ staff and the financial complexities of the budgets that they were expected to manage. We understand the concerns that have been expressed and share a number of those that were raised by the noble Baroness, Lady Sharp. We have taken a slightly different approach to the issue. In principle, we support the concept of personal budgets and direct payments, which give parents more flexibility and say over the support that their children get. It is a principle that we have supported for other forms of care in the past.

This is a new area of social policy. We feel strongly that these reforms are based on evidence and are not rushed through. As we know, the pathfinder pilots have been extended and now will not finish before the autumn of 2014. We very much appreciated the chance to meet with some of the pathfinder champions a couple of weeks ago when there were some very good examples of the improved quality of life that personal budgets could bring, as well as some of the difficulties and challenges that they presented.

It seems that the rollout of personal budgets is the least well researched and analysed, not only the impact on the individuals concerned but also on the institutions from which the services will be procured. Our Amendment 180 would build in essential time to reflect and learn from the pilots by requiring regulations to be made by affirmative resolution and a report to be published after the pathfinders have concluded, setting out the evidence and guaranteeing proper scrutiny by Parliament.

It very much feels as though we are legislating on this issue prematurely. Given that we are considering the Bill now, it is not clear how the Government plan to take account of the findings of the pathfinders. There are many things on which we remain unclear—for

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example, how devolving budgets will work on a practical level; how they will impact on the quality of provision and on costs; and how we can ensure that providers are reliable and accountable. It is also unclear how institutions with devolved budgets—for example, academies—can be required to make a contribution to personal budgets from their own funds. These are some of the issues that we feel need to be debated further.

As we know, interim findings from the pathfinders were published in June. In a subsequent letter, the Minister stated that they show,

“a clear appetite for parents to be involved in the decision making process and to have choice and control”.

However, he also referred to the challenges that the pathfinders faced in implementing personal budgets, particularly direct payments. He stated that the department has established an “accelerated testing group” to make progress in this area. I would be very grateful if he could update us on that work and explain how the conclusions from this group will impact on the provisions in the Bill.

The findings also made clear that there were complexities about resources being calculated and allocated. Such concerns are exactly why we think that these reforms should not be rushed through. We should take time properly to consider the evidence, and we believe that our amendment provides the mechanism to do that.

Our Amendments 271 and 273 reflect some of the concerns flagged up by the Delegated Powers Committee. It stated:

“We take the view that, because these are novel proposals and the whole system of personal budgets will be set out in the regulations, the regulations should be subject to the affirmative procedure at least in relation to their first exercise”.

We agree that these changes are too big and too significant to be dealt with by negative resolution. Our amendments would guarantee a positive decision of both Houses as these regulations go forward.

We are grateful that, belatedly, the Government have agreed with this view and have gone some way to meeting our concerns. However, we feel that our amendments are more comprehensive than those tabled by the Government. I hope that I have persuaded noble Lords that we should delay a decision on the regulations on personal budgets until the pathfinders have concluded and that noble Lords will agree to support our amendments.

Baroness Howarth of Breckland: My Lords, I spoke at more length than is usual for me on this when I raised it, under Clause 30, in relation to the arrangements to assist young people and parents managing a personal budget, should they choose one. I therefore wish to support the noble Baronesses, Lady Hughes and Lady Jones, on Amendment 180. It is clear that some families find that personal budgets bring them freedom, and freedom of choice, but only if they have help in understanding how to manage that budget. I agree with the noble Baronesses that this is little researched, yet we have more information from the adult services which could be looked at. Some of the problems for these young people and for the families of these children

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will be the same as those experienced by adults who have disabilities. There is no reason why we should not be able to gather that information together and extrapolate from it into some of these areas.

I certainly have grave anxieties about this moving forward quickly, and not only on behalf of the parents and young people. If it is not thought through, in terms of funding, there is a grave danger that educational institutions that depend on payments could find themselves unable to plan; if families have personal budgets with which to pay for the educational element, it could cause serious difficulties. I therefore support the amendment, which moves forward on personal budgets to give families freedom—where there is proper research—but takes it steady so that we do not cause even more difficulties than we already have in the adult field.

Lord Nash: My Lords, I would like to speak to this group of amendments concerning personal budgets and the recommendations of the Delegated Powers and Regulatory Reform Committee on personal budgets and Clauses 54 and 55, on appeals and claims by children.

I first turn to Amendments 180, 271 and 273 and government Amendment 269, which respond to recommendations from the Delegated Powers and Regulatory Reform Committee.

I hope that the noble Baronesses, Lady Hughes and Lady Jones, will be pleased to note that government Amendment 269 to Clause 107 takes forward the advice of the DPRRC, as sought by Amendments 271 and 273. Amendment 269 will require affirmative resolution by both Houses of Parliament for the first order to be made under Clause 49(3) and for affirmative resolution in both Houses, in relation to Clause 54(2), on pilot schemes for appeals by children.

With Amendment 180, the noble Baronesses, Lady Jones and Lady Hughes, also seek assurance that the pilot scheme for direct payments for special educational provision will be evaluated. I am pleased to be able to reassure noble Lords that we are meeting the commitments, given when the pilot scheme was established, to evaluate the scheme. For example, the Process and Implementation Research Report on the pathfinder programme, published by the department in June, includes a standalone chapter on the testing up to March this year.

However, we recognise that there is more to learn. That is why, as the noble Baroness, Lady Jones, mentioned, we established our accelerated testing group of pathfinders, whose work has been fundamental in developing the draft regulations made under Clause 49 and section 7.13 of the draft code. It is also why we have asked the evaluators of the pathfinder programme to deliver a standalone thematic report on this subject in 2014.

The specification for the report has yet to be finalised, but it will involve in-depth work with a small cohort of pathfinders and include further research on how direct payments for special educational provision have operated. In addition to the thematic research, I should stress that this is not the only source of evidence to support this policy. A quick comparison of the indicative code, published to aid consideration of this Bill in the other

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place, against the consultation draft, shows how far our knowledge and understanding have developed this year. This knowledge continues to grow. Pathfinders are increasingly offering personal budgets to all new EHC plan-holders with a resultant increase in numbers. We have also recently supported the development and publication of an implementation framework, for personal budgets for children and young people, by In Control and SQW, the pathfinder evaluators that are widely acknowledged to be the experts in this field.

We are therefore confident that we will have the knowledge and understanding to make the regulations ahead of the initial implementation of our reforms in September 2014, while accepting through my Amendment 271 that the House must have the opportunity to debate this issue further before we do so.

I turn to Amendments 176, 177 and 179. I completely agree with my noble friend Lady Sharp that schools, colleges and other institutions need to retain control where provision is delivered on their premises. I hope that Regulation 11 in the draft regulations to be made under Clause 49 reassures my noble friend, as it states:

“A local authority may not make a direct payment in respect of agreed provision which will be used or provided in a school or post-16 institution unless the head teacher, principal or the person occupying an equivalent position at the school or that institution agrees”.

Amendment 179 brings the issue of transparency to our attention. I agree that this is extremely important and is a key point of learning from the pathfinder programme, in relation to personal budgets. I hope that I can reassure my noble friend that we have made comprehensive provision in draft regulations and the draft code of practice.

Regulations to be made under Clause 30 will require that the local offer provides information about how to request an assessment for an EHC plan. The draft code of practice builds on this requirement and explains in section 5.2, on page 34, that this should include information about eligibility for personal budgets.

Draft regulations relating to Clause 49 set out the right of parents to request a review and require the local authority to provide in writing the reason for any decision to decline a request for a direct payment. Again, the draft code builds on this requirement. Section 7.12 states:

“The decision making process to establish and agree a budget should be clear and must be open to challenge, with parents able to request a review of decisions in relation to direct payments”.

With these reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Jones of Whitchurch: Can I just ask for a point of clarification? I thought that the Minister was beginning to say that he agreed with our Amendment 180. That would be lovely, but I just want to clarify the timescale on this. As I understand it, the pathfinders are due to finish in June next year. The Minister then said, I think, that a report would be written by September 2014. Is the idea that when the Houses reconvene in October 2014 they will have before them a report that we would then agree through an affirmative process before the personal budget regulations have gone ahead? That is my question; it is quite simple.

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Lord Nash: I think I will have to respond to the noble Baroness in more detail. I think the top and bottom of her point is that we will try to do it in the timescale, but I understand that that may not be possible. I will come back to her on this.

Baroness Sharp of Guildford: I am very grateful to the Minister for his reassurances, about the role that school or college principals might play when direct payments are proposed and it is not necessarily in the interests of either the child or economy and efficiency to proceed along that route, and that the process of decision-making will be an explicit one.

I am also glad to have the assurance that, when decisions are made, they will take account of the pathfinders and that the process will not be put into effect until the full evaluation has been made. I welcome government Amendment 269 implementing the recommendations of the Delegated Powers Committee

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relating to the positive agreement of the House that we should go forward with this. In the light of this, I beg leave to withdraw the amendment.

Amendment 176 withdrawn.

Amendments 177 to 180 not moved.

Clause 49 agreed.

Clause 50 agreed.

Earl Attlee: My Lords, I think that this may be a convenient moment for the Committee to adjourn.

The Deputy Chairman of Committees (Baroness Andrews) (Lab): The Committee stands adjourned.

Committee adjourned at 7.30 pm.