Education Bill

House of Commons, 15 July 2002.

Clause 10 — Powers of governing bodies to form or invest in companies to provide services etc.

David Miliband (Labour, South Shields)

I beg to move, That this House disagrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this we will consider Government amendments (a) and (aa) to the words so restored to the Bill, Lords amendment No. 13 and the Government motion to disagree thereto, and Government amendments (a) to (c) to the words so restored to the Bill.

David Miliband (Labour, South Shields)

We believe that the new freedom for schools proposed in these clauses will be valuable in helping them to work together to raise standards. Labour Members stand for enterprise in, and by, schools. We want new partnerships between schools, and we want best practice to lead the rest—whether in relation to pedagogy, to the curriculum, or to information and communications technology. I am glad to say that in our endeavours, we have welcome support across the House for the measures that we are debating. As a member of the Education Bill Standing Committee, I sat in rapt attention, and was particularly struck by one impassioned speech. The Member in question said, in respect of these specific clauses, that

"we may be on the verge of providing for an extremely exciting new environment that provides scope for new ideas for the benefit of education."—[Official Report, Standing Committee G, 18 December 2001; c. 191.]

I could not have put it better myself. The Committee member in question was the hon. Member for Altrincham and Sale, West (Mr. Brady), whom I am glad to quote in this regard. He was clearly taking his cue from a distinguished predecessor of his, Lord Baker of Dorking, who said in a House of Lords debate:

"I welcome these clauses in the Bill."—[Official Report, House of Lords, 7 May 2002; Vol. 1874, c. 1055.]

Given my strong memory of the hon. Gentleman's impassioned speech, I was more than a little surprised to discover that the Opposition joined in the process of deleting the clauses in the other place.

Graham Brady (Conservative, Altrincham and Sale West)

Perhaps I can help to jog the Minister's memory. I am sure that he cannot recall his predecessor's giving any satisfactory reassurance in respect of the concerns that we raised in Committee about where liability would fall if such companies were set up. As he will learn, it is perfectly normal practice in this House that, if we are not given adequate reassurance, we seek to amend the Bill later on.

David Miliband (Labour, South Shields)

I am grateful for the benefit of the hon. Gentleman's years of experience in this House, which are greater than mine. All I remember from our proceedings in Committee is the eloquence of my hon. Friend the Member for East Ham (Mr. Timms), who was leading for the Government. He rebutted all manner of allegations and put a consistent and coherent view. I wonder whether there is a split on this issue, and whether this is a case of old Conservatives versus new Conservatives—or mods versus trads. I understand that the hon. Member for Stone (Mr. Cash) will lead for the Conservatives on this issue. I can give him my categorical assurance that the European Union has no involvement in this measure, so I hope that he will join me in seeking to reverse the House of Lords' view.

There is a serious point. The Bill is about supporting schools in finding new ways to innovate and work together, so that they can raise standards. The power we are debating is a new freedom for schools. It will not be used by every school, but it will enable those schools that choose to use it to develop new partnerships, to share good practice and to support other schools.

We are widening the choices that schools already have. It is already possible under the law for a single school to form a company, if that is necessary for the conduct of the school. This power will enable schools to work together to form joint companies, or companies that will support other schools. I find it hard to see why that form of collaborative and innovative activity to benefit the wider community of schools should be opposed.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am grateful to the Minister for giving way while he is reading his notes. We want to be helpful this evening, but could he give us examples of how the new powers will be used? What sort of companies will be formed? What will their activities be? Why is it not possible under existing legislation for schools or local authorities to do that work, because they have been doing so ever since 1944?

David Miliband (Labour, South Shields)

I know that the hon. Gentleman is always keen to be helpful. I assure him that this is the best that I can do in terms of a speech and I am not reading someone else's notes. I shall come to some examples of how this will be a beneficial measure in terms of pedagogy and curricula. If he feels that I have not addressed his concerns sufficiently, I hope that he will interrupt me again.

We have always been clear that the formation of a company is not an end in itself. It is valuable only as a means to an end. Forming a company is the simplest mechanism available for groups of schools to have joint legal identity. If a group of schools want to purchase their supplies together and so benefit from economies of scale, it will help them greatly if they can do so as a single legal entity. Because a company provides limited liability status, these clauses will also mean that schools can reduce the financial risk of collaborating. That will leave them free to take advantage of the opportunities offered to them. [Interruption.] I hope that the hon. Member for Harrogate and Knaresborough (Mr. Willis) is not missing the key point that I am making. In relation to both purchase and provision of services, the opportunity to establish a company will stretch the possibilities for schools to share best practice beyond the current boundaries.

Through increased delegation of budgets by local education authorities, schools have the freedom and confidence to buy the services they need from those best placed to deliver them. If private sector providers can sell services to schools, I see no reason to prevent schools themselves, which may have some of the most expert people available, from providing services as well. The services offered by a school company may represent an opportunity for other schools to buy in real practical experience and expertise. A service delivery company may share a particular school improvement expertise, perhaps helping a weak school to become stronger, thereby giving pupils the quality of education that is their right.

We must make the best use of the talent and experience that is to be found in schools. The opportunities could be very wide; I shall give a couple of specific examples for the hon. Gentleman and other hon. Members. A group of schools that has developed a software package or an anti-bullying training pack may join another partner to ease production and distribution of the service. The expertise of the different partners will help to give schools access to high-quality services from which they would otherwise be unable to benefit.

I am clear that the provisions will provide a worthwhile opportunity for schools. I emphasise that it will be an opportunity: there will be no compulsion on schools to enter into companies. Nor will there be any compulsion on other schools to purchase from companies. However, this will be an opportunity to lead the way.

In seeking to restore to the Bill the clauses removed by the other place, we are proposing some small changes that I should explain for the benefit of hon. Members. Two of the amendments will place in the Bill detail that was to be contained in regulations. The first is the requirement that school companies will be required to register under the Companies Acts as companies limited by shares or by guarantee. We may wish to consider that in more detail, given the amendment tabled by the hon. Member for Harrogate and Knaresborough. The second is that only those specified in regulations may join companies. Placing those details in the Bill will offer greater clarity and more visible protection to companies. The other two Government amendments tighten up the requirement for companies to operate only in accordance with the requirements set out in regulations.

We also wish to restore clause 11, which sets out the regulatory regime that we propose to introduce for service delivery and purchasing companies. It will create a necessary framework of safeguards for school companies to operate in. We are preparing regulations that we intend to be flexible and to avoid unnecessary constraint on the operational freedom of school companies. The regulations will include requirements about company operation and membership, and will create supervising authorities to oversee the school companies. The clause will also require governing bodies of maintained schools wishing to form or join companies established under clause 11 to obtain the consent of the LEA. As the House knows, we will consult relevant organisations in the education service on the draft regulations, taking careful note of the responses.

I hope that I have addressed some of the concerns felt by Opposition Members and that the House will join me in rejecting the Lords amendments and agreeing to the Government's substitutes.

Bill Cash (Conservative, Stone)

We have heard an extremely truncated version of what the Government propose. The Minister will be well aware that these matters received extensive consideration in the other place, in Committee, on Report and on Third Reading. I am sure that he did not mean any disrespect, but the manner in which he shot through the Government's explanation left me surprised, as I think it did other hon. Members. It appeared that he was not prepared to go into the serious issues that are involved.

The Minister may wonder why it is that the shadow Attorney-General would rise to deal with these matters. The reason is simple. There are a number of issues that relate to the interaction between company law and education legislation. Precisely for that reason, I have made criticisms of the Minister. He did not even attempt to deal with any of the issues, although he knows perfectly well what they are. When the Lords finished their consideration of the Bill, the relevant issues were left for further consideration. That is precisely why the Lords, by a substantial majority, proposed that clauses 10 and 11 should be deleted. That proposal allows amendments Nos. 12 and 13 to be considered in this place.

We have heard a great deal from the Chancellor of the Exchequer this afternoon about prospective increases in education spending. There was much about freedom and control this morning from the Chief Secretary to the Treasury on "Today". We have been told that there will be no blank cheque. These are important matters because education has been given a certain priority by the Government, at any rate in the initial stages since the Labour party won the general election before last. The debate on school companies raises these issues. Specifically, they are at the heart of the system that the Government have adopted to implement their policy, especially in terms of education. This raises the question of companies limited by guarantee, although at the last minute in the other place the Government added arrangements for companies limited by shares, which the Liberal Democrats in their wisdom—we wait to hear what they have to say—seek to eliminate.

Questions arise that are not confined to education. They arise also in terms of health, not to mention Network Rail. These are matters that relate to the philosophy behind which the Government are hiding on public expenditure.

Similar serious questions and problems arise in many instances, and the debate gives us the opportunity to examine them in the context of education. Let us leave aside the spinning and weaving and examine the mechanics, the legislation and administration, the delivery and practice, the impact on schools, teachers, governing bodies, and local education authorities—and above all what it is all meant to be about, which is the education of our children.

We heard from the Prime Minister only a few years ago that the Government's watchwords were "education, education, education." What do we have? We have administration, administration, administration along with uncertainty, uncertainty, uncertainty. And under the proposed arrangements, we have litigation, litigation, litigation.

There was a protracted debate in the other place on the issue of school companies. I pay tribute to Baroness Blatch and also to Baroness Sharp, of the Liberal Democrats. Similarly, I pay tribute to other noble Lords across the board and to my hon. Friends who considered the Bill in its early stages both in Committee and on Report. I congratulate them on their tenacity and perspicacity in this difficult and opaque area of company law and education. The noble Lord McIntosh cannot be accused entirely of not seeking to alleviate their concerns, but we continue to have them. We do not believe that those concerns have been allayed, whether in the other place or by the absurdly short representations that the Minister has just given in respect of these matters.

The issues with which we are now concerned arise out of Lords amendments Nos. 12 and 13, which seek to reintroduce what were clauses 11 and 12 of the Lords Bill, which were defeated on Third Reading in the other place, with some amendments, by the combined vote of Conservatives, Liberal Democrats and others. I will set out the main features involved in those clauses and deal with our objections.

First I shall raise a question, which, as far as I am aware, has not yet been dealt with in the Bill. It arises from the potential interaction of the implementation of these provisions within part 1, which is entitled, "Provision for new legal frameworks", and which also includes clause 2, which confers power to suspend statutory requirements. The interaction between those provisions is very important.

Clause 2 is very general, especially in its potential implications for the provisions with which we are dealing today. It provides that, on the application of one or more qualifying bodies—which are defined as including, among others, a local education authority, as well as a governing body of a qualifying school, which, in turn, is defined as including a community, foundation or voluntary school, a community or foundation special school, or a maintained nursery school—the Secretary of State can make an order exempting those bodies from any requirement imposed by the Education Acts, the Learning and Skills Act 2000 or any of the subordinate legislation. That will surprise hon. Members, as it is a very big shift.

Indeed, the clause provides that the Secretary of State can relax such requirements, enabling the applicant to exercise educational powers and duties or make modifications to education legislation. That is a very important and draconian measure. I raise that in connection with the clauses that the Government intend to reintroduce to the Bill simply because it relates to the question of ultimate liability were a school's company to fail, whether it is a company limited by guarantee or, in line with the Minister's amendments—which are disputed by the Liberal Democrats—a company limited by shares. In either case, there is only a minuscule, nominal amount of liability.

In a parliamentary answer given by Lord McIntosh on 25 March 2002, which was also given by Baroness Ashton, to which a letter to my noble Friend Baroness Blatch referred, it was stated that the ultimate liability would fall on the local education authority. In such a case, the local education authority will pick up the tab—that is the expression that is being put around. Will the Minister today reaffirm unequivocally whether that is so? If, by order, the Secretary of State has exempted a local education authority or a school of the kind mentioned above from its statutory functions, surely, the opportunity for the enforcement of those duties by judicial review could be taken away by such an order? That would have grave implications were a school's company to go bust, for the creditors and a whole chain of others affected, who would have no recourse in the last resort—on the face of it—to the Government and the Exchequer.

One of the few comments that the Minister made with regard to the Bill and these amendments when he opened the debate was that financial risk to the companies would be reduced. Surely he understands, however, that, although financial risk to the companies concerned is a matter for consideration, there is also financial risk to all the other people in the chain. I shall come to those others shortly.

The matter is also important given the Chancellor of the Exchequer's announcement about the sums of money that will be made available to education. Does the potential removal, under such orders, of the duties—we do not know what they are, because they are so vague—and hence the liabilities of local authorities and governing bodies create the possibility of a legal void? Would the liabilities be off balance sheet? It would be interesting to learn whether the Minister has anything to say about that. Will he address the question of school companies—whether they are limited by guarantee or by shares—as the provision for them was made only on Third Reading, in the dying moments of the Bill's consideration in the House of Lords?

Insurance is another issue that was not dealt with greatly, if at all, in the House of Lords. We all know that the compensation culture, as it so described, is growing. Some claims are entirely justified, but the sums of money involved are growing exponentially. For example, the case of Pamela Phelps is important for local education authorities. In 2000, this former pupil successfully sued the London borough of Hillingdon for more than £44,000 after it was proved that her teachers had failed to diagnose her dyslexia, leaving her with the reading age of a seven-year-old.

I could give many examples and I have no doubt that the Minister's advisers would be able to provide even more. A teacher, Carol Ellen Harper, is suing my county council of Staffordshire in the High Court for more than £50,000 after she slipped on food debris and broke her ankle. In Waltham Forest, the head teacher of the Norlington school for boys said:

"Every day of the week, I am dealing with solicitors. This is taking a substantial amount of time which I and my teachers should be spending doing our jobs."

His school has faced six legal challenges in the past 18 months after legal firms operating on a no-win, no-fee basis targeted parents on surrounding estates, tempting them—so it is said—with the prospect of large compensation payments. Judith Waugh, the head of the John F. Kennedy lower school in Stratford, east London, won £119,000 in High Court damages after she was attacked by a 14-year-old boy in 1998.

There has been a flood of legal actions from pupils, who claim that schools have failed to protect them from bullies. Indeed, a High Court judge ruled that a school had to pay substantial compensation for not protecting a 17-year-old pupil from his own irresponsible behaviour on a school trip. We all know that serious problems can arise from the manner in which schools and education establishments are affected by serious accidents, such as those that have taken place on school outings recently.

The problem of teachers' liability has been discussed by Veronica Cowan, among others. A glance at The Times Educational Supplement, which is bulging with thousands of hard-to-fill teaching vacancies, gives a clue as to how difficult it will be for the Prime Minister to deliver on his promise of "education, education, education". Indeed, teachers could be forgiven for thinking that the more likely scenario will be litigation, litigation, litigation. It would be invidious of me to go through all the examples that I could give, but I will be more than happy to supply them to the Minister in case he has not come across them already.

Newcastle-under-Lyme abuts my constituency and many of my constituents go to school there. In a rugby game in 1997, a boy was lifted into the air and landed on his head. He decided to sue the boy who tackled him, and he was covered by the school's insurance. We are not, therefore, being difficult for the sake of it. I am not using graphic examples to raise questions that are irrelevant to the way in which schools are run. The point is this: we are interested in knowing whether regulations on schools companies will require adequate insurance provision to cover the enormous costs that could arise if a company fails.

There is also the related problem of the responsibility of directors. The Minister probably knows that a Government consultation paper outlines proposals to change the criminal law as it relates to the responsibilities of directors. Although I will not go into that in detail, I want to highlight the fact that the Government seem willing to introduce a proposed new offence of corporate killing, which is broadly equivalent to gross carelessness. Pupils are sometimes involved in desperately tragic accidents on school outings. Will the directors of schools companies be advised in advance, in the practice guidelines, that they could be caught up in serious criminal accusations and convictions if things go wrong?

The emphasis—the rationale of the offence—will be based largely on management failures. Although the offence of corporate killing would apply only to corporate bodies, it is important to take account of the fact that it may affect school companies. The consultation paper and the Law Commission's paper refer to the Health and Safety at Work, etc. Act 1974 and to new offences that are committed if people give undertakings. They say that that offence could apply to all employing organisations, including schools, hospital trusts, partnerships and unincorporated charities. Again, the Government need to give that careful consideration, because we need answers.

What will happen if a company goes bust? That is an important practical matter for those concerned—children, parents, teachers, governing bodies, local education authorities, creditors and local communities. The idea of greater local freedom to manage has its attractions, but has the legislation been properly thought through? We all remember the total failure in some schools and the arrangements for LEAs and/or the Government to step in. We demand to know what will happen under the new arrangements.

In law, if a company goes bust, perhaps because of overtrading or a massive insurance claim, the assets have to be sold. Staff have to be laid off, redundancy has to be paid and the debts must be paid off. If there is no money, insolvency will apply, under which the liquidators' remuneration and expenses take first call even before redundancy payments. Creditors, such as builders, those who provided furniture and other contractors, come way down the line. It will not just be the bankers who are involved; many small businesses will also be affected.

We are told that if a company is limited by guarantee or shares with only, say, a £10 liability, then that is all that will be available. We are also told, however, that the LEA will pick up the tab. How will the liability be enforced? How will the LEA be expected to pay up? If the regulations are implemented, an act which could remove the duties imposed by the Government, what effect would that have? In other words, is there a legal void? If not, will the Minister give us chapter and verse to reassure us that there is none, as I am sure he will want to?

The Government tell us that, under regulations, the company will be prohibited from admitting to its membership any person who is not of a prescribed description, and that regulations may impose requirements for the company's constitution and any other matter connected with its affairs. What exactly will that involve? That is not a theoretical but a practical question. The Minister knows perfectly well that all these matters were considered in the House of Lords and no satisfactory answer was given.

I have a letter dated 28 May from Lord McIntosh to Baroness Blatch, which baldly states:

"LEAs would ultimately be liable for the debts of purchasing companies, just as they are for those accrued by purchasing by individual schools."

What will happen if an order is made under clause 2 with the effect that I have just described?

The key question is whether the proposals will work. Lord McIntosh said that one reason

"for using such companies is that schools may want to join together to deliver services to other schools in which they have real strength. That could result in benefits to company members and to other schools, which could receive good quality support."

He then made a brief point about distance learning and publishing skills, before going on to say:

"They may therefore need to bring in outside organisations . . . perhaps a not-for-profit organisation . . . as members of the company on the basis that they will take a share of the profits. And why not?"

Lord McIntosh also said:

"I cannot reconcile the opposition to that idea with what I understand to be the ethos of the Conservative party."

He could not understand why we would not want commercial freedom for the companies in question. The point to which I return is that if there is merit in the principle of giving further freedom, the key question—this is where the Labour party and the Government always fall down—is not whether the Government have bagged one of our ideas and are stealing our clothes to make it look as though they are giving schools freedom to manage, but whether the policy will work. We do not yet know the detail of the regulations. There are no magic wands to be waved in such matters. My questions concern matters that will have to be dealt with on the ground.

There is a further point. We are indeed in favour of innovation, but the amendments tabled in the other House would have allowed even more freedom, and there is a problem with that. It looks to us as though the issues have not been properly thought through, and there have been no proper answers about culpability, liability and the protection of governors. In the other place, Baroness Blatch asked:

"How on earth will the extra time, money and effort be spent without any impact on the primary duty of a governing body, which is to manage its school?"—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 252-3.]

Conservatives and Liberal Democrats in the House of Lords made specific points about that.

The key question here is whether the burden imposed on the companies by the proposals would interfere with the management of the schools. There is no doubt, as the Minister in the House of Lords admitted, that a considerable amount of time and effort would be spent in setting up arrangements of this kind. This would be a recipe for imposing administrative burdens on schools.

In a letter to Baroness Blatch, Lord McIntosh wrote, in respect of profits that may be made by such companies:

"We do not propose that profit must be spent solely in the interests of education."

That raises an interesting question. Schools are, by definition, charities. They are almost entirely governed by the law relating to charities interacting with the state education system. Ultimately, they are run in the context of charitable purposes. It would be difficult to imagine that profits made from those schools should not be returned to the schools themselves.

There was some discussion of that question in the other place, but no explanation sufficient to warrant the arrangements now proposed was given. It seems clear to me that the clauses should be left out of the Bill, because there has been no clear indication of what will happen either under the regulations or in the circumstances that I have described.

Stephen O'Brien (Conservative, Eddisbury)

In the context of distribution of profits, my hon. Friend touches on the relationship with the charitable purposes of education. Does he know whether the Government have considered the point raised in Committee relating to the model of co-operatives, which are run for the benefit of members, especially where schools come together for common purposes? No answer—satisfactory or otherwise—to that question has been given. It strikes me that, of all Members of Parliament, it is Labour Members—especially those who stand to represent the Co-operative movement—who should have considered and answered that question.

Bill Cash (Conservative, Stone)

Indeed, and as one of my forebears invented the Co-operative movement, I have a special interest in the answer. I hope that the Minister will now answer that question, which did not receive an answer either in the other place or in Committee of the House of Commons.

Another important question remains outstanding. It was taken seriously by the Minister in the other place, but has not yet been addressed by the Minister handling the Bill here today. It relates to the question of whether or not undesirable characters could become involved in schools, which they might regard as easy targets for involvement in commercial activities. Baroness Blatch gave an example of someone who was indeed undesirable, saying that,

"Had the school been unwise enough to engage in any kind of commercial activity with that person, it would have ended in tears".

Extraordinarily, Lord McIntosh's reply to the noble Lady's question,

"How can a set of regulations specify such undesirable or unsuitable people for the purposes of becoming a member of a company?",

was:

"There are two lines of protection . . . First, there is the good sense of the schools concerned."

I hope that hon. Members take some satisfaction from that. The noble Lord continued:

"We are talking about people from more than one school"—

as if that had any relevance—

"so such a person could not be the friend of one of the governors or a friend of the head teacher of one of the schools unless the other schools involved in the company were convinced of the integrity of that friend."

Do hon. Members really regard that as a convincing answer to the question of how to keep out undesirable characters—that people will have to go chasing around, asking all the different schools whether they like this chap or that one? The very notion that that is the solution to the problem is utterly unconvincing.

Lord McIntosh went on:

"However, we have the protection that more than one school will be involved and there will be an independent eye cast over any invitation to join."

On the question of leaving to regulations the matter of people who would be regarded as acceptable members of a company, he added:

"Clearly, that will improve with experience."

We have to discover that undesirable people have, in fact, been running those schools or helping to run them before we learn that from experience.

Even more astonishingly, Lord McIntosh went on to say:

"We can state in regulations that the person who becomes a member of a company shall have educational objectives"—

that is basically the point that I was making about charitable purposes—

" . . . or that such a person has something to contribute to the company educationally which cannot otherwise be found."

Lord McIntosh was simply ducking the question. The Government cannot, in those regulations, prescribe which people will not be desirable, so they turn the problem the other way round. Lord McIntosh continued:

"We can say all sorts of things of that kind, but there will always be crooks."

I hope that the Minister heard that. When asked how he would ensure that people in those companies would be fit to run schools, his noble Friend admitted that there will always be crooks.

So many questions have been asked by my noble Friends in the other place, and by my hon. Friends in Committee, that the Government have a duty at least to attempt—so far, the Minister has not done so—to answer them. Baroness Blatch said:

"We know that there will always be crooks. However, we should be in the business of protecting our governors of schools. They are there not to be company chairman, company members or board members, but to ensure that good education takes place in schools and that schools are managed well in the interests of the education of the children within them."—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 241-43.]

I made a similar point earlier.

We must also consider the burdens on company directors and on the people running the schools, as well as the question of costs. I am sure that the Minister accepts that, inevitably, there is a need for lawyers and accountants—no doubt a battery of them—to resolve the many questions in company law that may arise. Will that not increase substantially the cost of running those schools?

Finally, if a company goes into liquidation, there is the question of whether or not the local education authority will have to pick up the tab. We have been assured that the objective of the regulations and the Bill is to provide a light touch. However, there is no evidence whatever from their construction that that will be so—far from it. More likely than not, they will increase the administrative and legal burdens and—I hope that the Minister will deal with this later—the duties imposed by statute on local education authorities would be removed.

Many issues are involved, and as the debate progresses, no doubt we shall hear more about them. The bottom line, however, is that the proposal is not a recipe for good education. Regulations are constantly spilling out of the Government, and huge administrative costs are being imposed. The Minister, I hope, will be able to deal with some of those questions, but will have enormous difficulty discharging his responsibility, as he certainly did not succeed in doing so in his opening speech. He is fairly new to his post—I was astonished by his irresponsible handling of questions that were thoroughly canvassed in the House of Lords and considered carefully in Committee. He gave us about ten minutes of truncated explanation, but did not deal with any of our questions.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

It is a pleasure to follow the hon. Member for Stone (Mr. Cash). When I saw the right hon. Member for Hartlepool (Mr. Mandelson) appear on the Government Benches, I wondered whether he intended to enter the debate, and whether we would go back to old times.

I am grateful to the hon. Member for Stone for using his expertise in these matters to ask the Government some searching questions—I say that quite genuinely. As an opportunity for us to examine the Bill, the Committee stage was a travesty. The one thing that we failed to get was a clear explanation of the Government's proposal.

For the Minister to come along and give a very brief exposé of what the Government are trying to achieve by restoring the two clauses does him and the House a disservice. I say that rather sadly. Either there is a great deal that the Government are trying to hide, or they do not know the answers to the questions. In either case, given the appalling record of private companies formed out of public sector organisations, it is important that we get it right in the case of schools, if we go down that road.

I shall not repeat all the arguments advanced by the hon. Member for Stone. We hope that the Minister will respond to each of the points that he made. The question who will guarantee a company's debts is crucial. I shall speak to amendment (aa) in a moment, but first I shall deal with some of the other amendments, particularly the Government's insistence on restoring clause 10. I shall return to the question whether or not the companies are limited by shares; I have a particular reason for raising it.

Let us say, for argument's sake, that the company is a shareholding company and that the shares are, as the hon. Member for Stone said, as much as £10. The liabilities on the shareholders are therefore relatively small, compared with what could be the company's debts. What would happen to that liability in terms of the assets? As it is a school company, let us say that it is operating from a computer suite within the school, as it may well do—a computer suite that had been funded partly by capital provided as part of a joint company by shareholder capital from outside.

The Minister shakes his head. With respect, that has been the attitude of Ministers throughout the discussion. Every time we ask a question, they shake their head as if to say, "That is irrelevant." Let us say that the company goes bust. What happens to all the equipment in the suite that was used by the company? The shareholders may pay up to their limit. Does the local education authority then come in and pay out the debtors, or the creditors, whichever is the case? If an LEA must be responsible as a backstop for every company set up under the Bill, it will have to find funds from other schools to pay those debts. We need answers to all the important questions of liability that arise from the clause.

We never got a clear answer as to whether the school's assets would be involved in a company. Let me give the Minister another example. There is nothing to stop a group of governors setting up a company to manage the school and its assets—or even a group of schools—and transferring the assets into that company. For example, 3 E's in Guildford set up the new King's College campus. Why should not that company take over all the schools in Guildford as a single company, form a separate company limited by shares, and then be bought out by a major plc and traded on the stock market as part of that company's portfolio? What would happen at that time? What would happen to the assets if the company got into difficulties? If it wanted to realise some of its assets to fund new developments, would it be able to close the school and sell the land, buildings or whatever else? Lord McIntosh rather alarmingly said in another place that people could take profit out of the companies. The Government have made it clear that that is possible. If a company takes profit, it also needs to share the risk.

Stephen O'Brien (Conservative, Eddisbury)

I thank the hon. Gentleman for giving way. He will remember that many of those questions were asked in Committee, so it is hardly that the Government have not been given notice of them. Let us return to his example of the ICT suite, where there are assets, even though their value will be rapidly depreciating. What will happen if there is recourse to those assets, but no contract between those who are damaged and the LEA? Has the Minister discussed that matter with the Chancellor, with a view to computing contingent liabilities on the Government, as the ultimate guarantor for the LEA? Those are the reasons for the hon. Gentleman's questions and why we are looking for answers. The matter is too uncertain for anybody to have certainty about entering into a contract.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am grateful to the hon. Gentleman for raising that issue. He and I know that most local authorities, especially shire local authorities, have fewer assets on their balance sheets than some individual schools. The £1.1 billion on school balance sheets exceeds significantly the assets of a number of LEAs. Recourse to the Chancellor might well be needed in such cases. In Committee, although the Minister was not present at the time—[Interruption.] I apologise; the hon. Gentleman was not a Minister at that time, so I do not hold him responsible for the answers that the then Minister gave. None the less, the Government can also invest in the companies. What will happen to that investment? Does the LEA have responsibility in that regard or is it ultimately part of the Government's liability? We need to know the answer to that question.

The hon. Member for Stone made a crucial point about the relationship between part 1 and the rest of the Bill. The Bill is to become the Education Act 2002, but part 1 is about innovation and the ability to disregard all other education legislation. There is a huge contradiction between part 1 and the intention to introduce school companies. We must be given an answer in that context.

My noble Friend Baroness Sharp of Guildford asked an important question in another place: what is the fundamental role of our schools? I do not think that she received an adequate answer. We have heard from the Chancellor today and I think that we shall hear from the Secretary of State tomorrow—

Estelle Morris (Labour, Birmingham, Yardley)

indicated assent

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

The Secretary of State will make a major statement about investing significant resources in schools.

David Miliband (Labour, South Shields)

Not enough?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

The Minister must wait for my speech to find out the answer.

We have heard today about a raft of new controls that will be placed on schools in relation to accessing the new resources. That is the reality of what we heard today: it is not freedom for schools; it is greater centralisation. We shall debate that issue on another occasion, but it is ironic that one of the Conservative amendments from another place deals with cutting bureaucracy. I am sure that the Secretary of State agrees with the premise of innovation and autonomy, but greater controls and obligations are being imposed on schools at the same time. My party and I believe that the core business of a school and its management and governors is to run the school effectively for its youngsters. I do not want companies to take away from that core function and I think that we need some assurance about that.

It is interesting that neither of the head teacher associations supports that part of the Bill. Neither of them wants the greater levels of autonomy—[Interruption.] The Secretary of State chunters away from a sedentary position, but the private sector does not want those things either. In the private sector, which has the freedom to do all those things, there is no desire to set up companies as well.

Stephen O'Brien (Conservative, Eddisbury)

I thank the hon. Gentleman for giving way a second time. In relation to his argument about regulation, is he aware that significant expertise will be required around the board tables of the new school companies to ensure that there is sufficient knowledge about running a company and the associated liabilities and responsibilities? It is difficult to imagine that such expertise currently exists in schools and governing bodies. In support of his argument that, far from enhancing freedom, the regulations that underpin the provisions will be more burdensome, I suggest that that expertise will be needed somewhere to ensure compliance with all company law regulations.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

That is what is so confusing. What is behind the provisions, and what is their objective? The hon. Gentleman is absolutely right that the bureaucracy, controls and financial investment that will be needed in order to achieve that objective are staggering, but the Government have yet to persuade us about the overall benefit.

Bill Cash (Conservative, Stone)

The hon. Gentleman makes a powerful point in conjunction with my hon. Friend the Member for Eddisbury (Mr. O'Brien). Does he also accept that one of the most difficult aspects of dealing with what is meant to be a standard arrangement with regard to company law, even allowing for the fact that a great deal of competence is needed, is fitting in the required knowledge with all the requirements laid down by model constitutions and regulations? Does he agree that it will be a field day for lawyers and accountants?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

Yes—that is why I was asking why we were taking this particular route. If the Government were proposing wholesale privatisation of the education system, that would be another story. I would not agree with what they were doing, but one could understand why they would wish to take the proposed approach. I cannot understand from the Minister's examples, or indeed those given by colleagues in another place, what great advantages the provisions have that could not already be achieved. We already have examples of schools working together to provide, for example, grant maintenance contracts or schools meals contracts. There are marvellous examples of bodies such as the Yorkshire Purchasing Organisation, which for 30 years has been providing joint purchasing arrangements for schools and local authorities. There are examples of airports, such as Manchester or Leeds-Bradford, in which local authorities are working together to provide a joint service. All the legislation is in place to enable those things to happen, yet we have had no explanation as to why we should proceed with the Bill.

Chris Grayling (Conservative, Epsom and Ewell)

I thank the hon. Gentleman for allowing me to intervene. Does he recall from the Committee stage that one of the areas in which the Government were unable to give clear answers was the possibility of the governing body deciding to close down its educational operations and contract in its entire education service from another school—possibly an independent school? At the extreme, the provisions allow steps to be taken that, I suspect, do not accord with the Government's aspirations.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

That might be a little too close to the bone, because I think that in many ways that is the Government's aspiration. It is difficult to know exactly what they are hiding behind as regards these provisions.

We are concerned that the Government have not properly thought through the implications for schools and LEAs in relation to company law. We are particularly concerned that school companies should not be a means for individuals to make a profit. I ask the Minister this direct question: what is there in the Bill to prevent any individual, including a member of the governing body, from siphoning off profits? On Third Reading, Lord McIntosh of Haringey stated:

"Let me make it clear that when talking about profits there is no question of governing bodies taking their share of the profits to use for anything other than the educational needs of their schools. There is no possibility of siphoning off profits".—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 252.]

In Committee, however, he was less emphatic about public funds being used for private profit when he said:

"Preventing any profit being used for purposes other than education in participating schools may in practice mean that it cannot be paid to company members other than schools. That is an unnecessary interference. There is no reason why schools should not innovate in potentially profitable ways and there is no reason why they should not bring in outside partners to help them to achieve that. They will still benefit financially from it, but that may be achieved only if they have outside partners who can participate for a profit."—[Official Report, House of Lords, 7 May 2002; Vol. 634, c. 1108.]

There is a direct contradiction between the statements that were made in Committee and on Third Reading, and it is important that the Minister makes it clear which is right.

That brings me to my amendment concerning whether school companies should be limited by shares or by guarantee. I want to remove the possibility of the former option because that would remove the element of potential profiteering by individuals. If the Government are determined to get the Bill through—the Minister will have to give a very convincing argument when he winds up—they must give us a guarantee that any profit made out of a public investment of funds into a company returns to the school or schools for investment and does not go to private individuals or private organisations. The amendment would limit school companies by guarantee rather than shares to ensure that no individual profits. If the Minister does not agree with that—if he believes that outside agents can invest and take a profit—he must accept that governors and teachers should also be able to invest and make a profit. I am not debating whether that is an honourable position for the Minister to take, but he must make it absolutely clear whether it is the case. If so, he will not have the support of Liberal Democrats here or in another place.

Chris Grayling (Conservative, Epsom and Ewell)

We had a robust debate about the provisions in Committee, and it is clear that the concerns that were raised in the series of amendments tabled by my hon. Friends and Liberal Democrat Members, and the whole tone of the debate, have been reflected in the other place and back here again through the amendments containing noble Lords' recommendations.

Those concerns arise because the provisions are confused and unclear, and contain several significant weaknesses. I am at a loss, as are other hon. Members, to understand what they will really add to the Bill or what benefits they will bring to schools. There is no great demand for those steps to be taken. The Government seem to be opening up the education system to complexity and risk that it does not need. My hon. Friend the Member for Stone (Mr. Cash) clearly set out many of the issues surrounding liability, especially financial liability, and the complexities of corporate law that schools will end up having to deal with.

The Government have failed to explain several matters. Indeed, some of the contributions made by Ministers in Committee were confused, to say the least. One such matter is LEA liability. The key question is how the LEA's ultimate liability is to be enforced in law. How is somebody who has suffered a loss as a result of mismanagement in a company established by a governing body to go through the process of getting their money back from the LEA? That is far from clear, as it is not stipulated in the Bill. We are on a wing and a prayer. The Government may be able to explain it—no doubt the Minister will say that "regulations may provide"—but there is no clear legal chain that would enable it to happen.

Nor has there been a clear explanation of the nature of the liability that will be built up. There is great confusion about that. The then Minister, the hon. Member for East Ham (Mr. Timms), said in Committee that he envisaged two types of companies being set up:

"One is formed to undertake procurement activities on behalf of several schools, and the other is a service provider company in which several schools come together to provide services to either themselves or other schools."

When he went on to talk about liability, he confused the matter considerably. He said:

"There is a distinction between the two. Local education authorities will be liable for some of the debts of procurement companies, but not for those of the service provider companies."—[Official Report, Standing Committee G, 18 December 2001; c. 170.]

If those lending money to, and doing business with, service provider companies do not have the security of LEA guarantees, where do those companies stand in terms of liability? Who is responsible for debts? What happens if debts are secured against assets? As the hon. Member for Harrogate and Knaresborough (Mr. Willis) said, the nature of those assets is a grey area between operational activities in the school and the activities of the company. How will liability be established in the event of the corporate failure of one of the service provider companies? When Ministers use the phrase, "It is envisaged that", as they frequently have in this context, how can anyone be clear about what the Government are trying to do?

My hon. Friend the Member for Stone referred to the complexities of dealing with company law. School governors already deal with huge amounts of complex rules and regulations. The days are long gone since governors could sit passively on the governing body, listening to what the head had to say and chipping in a few words here and there. That may have been so a generation ago, but there is a world of difference today. Governing bodies need to be sharp, to be on the ball and to have substantial professional expertise. Yet we are now saying to the all-too-few volunteers willing to join school governing bodies, "Not only do you have to take on board the very considerable regulatory responsibilities that are being placed on your shoulders"—particularly, but not exclusively, by this Government—"but if your school is to move down the road towards implementing these provisions, you will have to learn company law as well."

Bill Cash (Conservative, Stone)

Does my hon. Friend agree that one of the most extraordinary contributions made by Ministers in the other House when these arguments were being advanced was to suggest that it is just a voluntary arrangement that does not have to be complied with? That is to dismiss the whole complexity of the framework in the Bill as something that might just happen on the margins. Does my hon. Friend agree that that is an extraordinary position for the Government to find themselves in?

Chris Grayling (Conservative, Epsom and Ewell)

My hon. Friend makes an important point. From the point of view of any governor or anybody who is involved in the management of a school, there is no way in which any of these activities could be at the margins. If the school sets up a company, that person must have a duty of care and a detailed knowledge and understanding of what is going on. The provision could represent a huge diversion for governing bodies.

The implications for the work load in schools are substantial. The Government failed to respond adequately to a point that was made about that in Committee. My hon. Friend the Member for Eddisbury (Mr. O'Brien) tabled an amendment that would have provided for the head teacher of a school that set up a company to be on the company's board. The Government said that that was unnecessary, but how can governing bodies make decisions that can fundamentally affect the school's operation, assets, grounds, space, staff and resources without the head teacher having a say in them?

Let us consider the work load of other staff. That, too, was tackled in Committee, but again the Minister gave only vague responses. When we considered work load, he said:

Any member of . . . a school who became involved with a company's activities would have to agree to do that. There is a variety of ways in which the member of staff could work for the company. For example, they could be on a temporary secondment, or part of the working week could be spent on company rather than school business. Different remuneration arrangements would be needed in different circumstances . . . In reality, arrangements would be best left to local discussion and agreement."—[Official Report, Standing Committee G, 13 December 2001; c. 157.]

How would that work practically in schools? When the governing body says that it has set up a company and needs the school to take specific action to contribute to it, how many members of staff will dare to say, "No"?

At a time when teachers' work load is already great, we risk placing on head teachers and staff considerable additional responsibilities for a measure that will provide no obvious benefits. As hon. Members have said, many schools are already undertaking the activities for which the Bill provides. The Minister mentioned common procurement; many schools do that. Many LEAs procure collectively on behalf of their schools. Schools already have the ability to work together. In Committee, the Minister suggested that schools might work together to provide common transport services. They do not need to set up a company and take on all the attendant responsibilities to do that.

As I said in my intervention on the hon. Member for Harrogate and Knaresborough, the provisions' boundaries are unclear. A school could contract out its whole education system under the Bill. When I made that point in Committee, the Minister replied:

"That does not sound like a likely scenario."—[Official Report, Standing Committee G, 13 December 2001; c. 157.]

In other words, it is possible in law; it is simply unlikely.

Let us consider the borrowing restrictions and the liabilities that the companies could accumulate. The Government are quick to say that the companies need the LEAs' permission to borrow and that everything is nicely covered. What about contingent liabilities? They are topical because the Government are keen on them and their non-appearance on national balance sheets. What happens if a company that a school set up accumulates substantial contingent liabilities that are not related to borrowing? Where is the watchdog control over that? Are we saying that LEAs are liable, regardless of what happens and of the financial steps taken by the directors? Can directors trade in the full knowledge that the LEA will ultimately pick up the bill if they do not succeed?

Bill Cash (Conservative, Stone)

Does my hon. Friend agree that the National Audit Office is taking a diligent interest in off balance sheet activities and that we are considering another example that it will have to examine?

Chris Grayling (Conservative, Epsom and Ewell)

I hope that the National Audit Office never gets the opportunity because the House will accept the Lords amendment and reject the provisions. I do not believe that the measures will provide educational benefit or generate significant cost savings for schools. They risk being a distraction to those who run schools—a job that is already greatly burdened. I hope that hon. Members will come to their senses, support the Lords and accept that such provisions should not be included in the Bill.

David Miliband (Labour, South Shields)

Our debate of the past hour and a half has been interesting. The hon. Member for Stone (Mr. Cash) said that he did not want to be considered difficult. I do not want to make any such accusation against him; his contributions are all part of the parliamentary scrutiny that the Government welcome because we hope that it will improve the Bill. However, I wish that he had shown a little more of the spirit of the hon. Member for Altrincham and Sale, West (Mr. Brady), who so passionately supported the concept. The debate has covered a wide range of issues, and I shall try to deal with as many of them as possible.

Many contributions focused on liability and I shall deal with that. I shall also try to cover the more basic issues that the hon. Member for Harrogate and Knaresborough (Mr. Willis) raised. He asked what the point of the provisions were. First, I want to make an important preliminary point. No school will be able to form a company unless it gets the LEA's agreement. The hon. Member for Stone gave an example of a failing school that, not content with failing its pupils, could create a company that would fail the pupils of other schools. Frankly, that will not happen. No LEA will agree to allow a failing school to set up a company.

Bill Cash (Conservative, Stone)

The Minister knows about the exchanges that took place in another place. First, there is the question whether the LEA has the competence to handle questions on the matters that we have been discussing. Secondly, I am sure that he remembers that Lord McIntosh said that the LEA would intervene only when the companies had got into serious trouble. That is too late. We want to avoid companies getting into trouble in the first place. The Bill will not help with that problem.

David Miliband (Labour, South Shields)

I look forward to lengthy discussions about the operation of local education authorities as part of the hon. Gentleman's new, roving brief. We will see whether his new alliance with the Liberal Democrats survives such scrutiny. We are now in the second round of Ofsted inspections of LEAs. That is a rigorous process, and it is inconceivable that any LEA, however poor its performance, will agree that a failing school should set up a company. The Bill contains a safeguard that LEAs can agree or disagree with any proposal.

Andrew Turner (Conservative, Isle of Wight)

Perhaps LEAs would not agree to allow a failing school to set up a company. However, some LEAs are surprised by the failure of schools. They may already have given such schools approval.

David Miliband (Labour, South Shields)

We have rich data sets that explain the performance of different schools. They are based not only on raw scores but increasingly on value-added information. The identity of schools that are not performing as well as they might are clear to any LEA. Ofsted inspection increasingly focuses on making sure that LEAs are clear about that. The hon. Member for Isle of Wight (Mr. Turner) missed the early part of the debate and I do not believe that his point was valid. Out of the corner of my eye, I can see the hon. Member for Harrogate and Knaresborough twitching, and I am delighted to give way to him.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am delighted that the Minister is delighted. However, there is a genuine contradiction in the provisions. It relates to part 1, which deals with innovation. In some of the so-called failing schools or schools in challenging circumstances, there may be a need to do exactly what the Minister supports. Is the Minister saying that we want the Bill only for so-called successful schools?

David Miliband (Labour, South Shields)

The hon. Gentleman may be trying to have his cake and eat it. I am trying to make it clear that the provisions contain a safeguard to ensure that LEAs consider seriously any proposals for school companies.

Graham Brady (Conservative, Altrincham and Sale West)

Will the Minister confirm whether it would be possible for the LEA to contract out that function?

David Miliband (Labour, South Shields)

It would not be possible for LEAs to do that. The Bill is clear that LEAs must give the school permission to set up a company. We focused on the financial management of companies.

It is important that companies, like schools, are well managed. That is why we proposed a supervising authority to provide a protective framework. If a school company fails financially, each company member's liability will be limited to a nominal figure of approximately £10 in the case of a company limited by guarantee, or the amount outstanding on the shares in the case of a company limited by shares. Company members would determine the value of the shares, which may be a nominal sum and the amount, if any, outstanding on the shares would always be comfortable with the liability.

Hon. Members asked what would happen if the company got into debt. It will be difficult for a company to get into debt through borrowing and be unable to repay the debts out of future income. We are including in the regulations the requirement for the company to seek the supervising authority's permission before it can borrow money. A company that gets into debt will have to arrange a schedule of repayments with its creditors.

Chris Grayling (Conservative, Epsom and Ewell)

rose—

David Miliband (Labour, South Shields)

I want to make some progress, because I have taken five interventions and I am still on my first point. [Interruption.] I shall answer hon. Members' questions in my own way. I think that I am answering them pretty accurately, but it is hard to answer them if I am not allowed to make my case.

I shall carry on with my argument. Several hon. Members asked what would happen if a company were to fail. The delegated budget of individual member schools would not be at risk, and I shall explain why. Purchasing companies would be spending member schools' delegated budgets, and would therefore be deemed to be acting as agents of the LEA. The LEA would be liable for the company's debts, in the event of company failure, in the same way that the LEA would be liable for an individual school's debts when the school was acting as the LEA's agent. This would not be the case for service delivery companies, because such a company would not be acting as the LEA's agent. If a service delivery company became insolvent, its liabilities would not pass to its members, because it would be a limited liability company.

If a school company were unable to pay its debts, the normal route, which applies to all companies, of placing the company in administration or winding the company up, would be open to it and its creditors. I can see the hon. Member for Harrogate and Knaresborough twitching again. If he will let me proceed, I shall see whether I can answer his question.

Clause 2 has been mentioned by several hon. Members. Nothing in the power to innovate can affect company law. This provision will apply only to educational law, so it cannot affect liability in the way that has been suggested. School companies are not qualifying bodies under clause 2, so companies cannot be exempted from any law. All the examples, including that of sports injuries, raised by the hon. Member for Stone in his wide-ranging speech, are existing potential liabilities. The existence of companies will have no effect on them. Companies will not be running schools, so none of the issues raised in relation to the running of schools arises. The companies will not own schools' premises or employ their staff.

The hon. Member for Stone also asked whether a school company would be required, by regulations, to take out insurance to cover potential liabilities. These companies would not be able to take over the running of a school, so they would not be liable in the example that he gave, which related to negligence and causing injury during sports activities.

Bill Cash (Conservative, Stone)

The Minister is obviously relying heavily on the notes with which he has been supplied. [Interruption.] That is a simple fact; he is just reading out what he has been given. I have the gravest doubt that what he is saying will turn out, in due course, to be the case. There is an interaction between the potential use of clause 2 and the removal of these education functions—if that is to happen. The Minister has not given the House an answer on whether it is intended to use those provisions in this context, and we take issue with the Government on that point.

David Miliband (Labour, South Shields)

I am not sure whether the hon. Gentleman is as well known for his generosity to other hon. Members as he is for his warnings about the dire consequences of various Government actions, but we shall see.

The hon. Gentleman also raised the question of assets, as did the hon. Member for Harrogate and Knaresborough. It will be up to a school to decide whether to transfer assets to a company, but there would be no reason for it to do so. A school would be no more likely to transfer assets to a school company in future than it is now. Schools do not do so now, and there will be no reason for them to do so in future.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

The Minister said that I was twitching earlier. Is he saying that a school can use its budget share, or part of it, to set up a company and that, if it fails, it will be the LEA that will be subject to the liabilities under the new arrangements?

David Miliband (Labour, South Shields)

Yes. That is why a safeguard has been set up for LEAs, in that they will need to approve the setting up of the companies.

Chris Grayling (Conservative, Epsom and Ewell)

The Minister did not answer a question I asked him a moment ago. Will a company have the right to enter into leasing agreements and other off balance sheet arrangements, and would the LEA ultimately be liable if the company failed, despite having had no sanction over whether it should be set up?

David Miliband (Labour, South Shields)

I do not think that the off balance sheet question arises. Opposition Members are asking us to prescribe every conceivable detail of innovation that a school might exercise in relation to setting up a school company. We are saying that we have an exciting avenue for development here, and we want to give schools wide discretion to avail themselves of it, with safeguards built in.

The question of enforcement was raised by various hon. Members. This would involve an ordinary civil action in the courts, and recovery would be by debtors in the normal way, as is the position now for all purchasing by schools. The power to innovate, for which we are legislating, has no impact on that. The hon. Member for Stone also mentioned undesirable people being brought into schools to run the companies. The Government have made it clear that they will regulate to prevent undesirable people from being members of a company; we have said so in correspondence. All categories of persons who are prevented from being school governors will also be prevented from joining school companies.

The hon. Member for Harrogate and Knaresborough asked whether we would be distracting schools from their core function. The answer to that is no. These proposals are about encouraging co-operation between schools to help them to perform their roles more effectively, serving their own pupils and other pupils in the locality. Allowing teachers the professional development benefits of sharing their expertise with other schools can benefit both the providing and receiving schools. The hon. Gentleman asked whether that was not being done already. A certain amount of co-operation does already take place, but the power will provide clarity that the school's governing body can form a company to do more than it is able to do at the moment. Without such a power, there would be considerable doubt that a governing body could participate in a company that did more than oversee or carry out functions in relation to an individual school.

Andrew Turner (Conservative, Isle of Wight)

rose—

David Miliband (Labour, South Shields)

I have been extremely generous in giving way, and I think it is about time that we finished this debate. There are some big issues still to be debated, and I am sure that we should be attacked later for not giving enough time to them, if we did not get on and get through this part of the debate.

The amendment tabled by the hon. Member for Harrogate and Knaresborough seeks to remove the option for companies to be limited by shares. I do not think he has made a strong case for that. When school companies choose to deliver services to other schools, they may well find being limited by shares rather than limited by guarantee a better, easier structure in which to work. I do not see why they should be denied that choice. For example, if a private sector body generated some innovative curriculum materials, it would make a profit from them. If one of our best schools did so, I see no reason why the school itself should not benefit. It is not true that a company limited by guarantee could not distribute any operating profit to its members. It is not the normal type of company structure adopted for paying profit to members, but there is scope for that to happen.

I hope that I have answered in full all the points that have been raised. This is an important provision and I urge the House to support the Government.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I beg to ask leave to withdraw amendment (aa).

Amendment, by leave, withdrawn

Government amendment (a) to the words so restored to the Bill, agreed to

Lords amendment:No. 13 disagreed to.

Government amendments (a) to (c) to the words so restored to the Bill, agreed to.

Before Clause 18

David Miliband (Labour, South Shields)

I beg to move, That this House disagrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this we will consider amendment (a) in lieu.

David Miliband (Labour, South Shields)

I hope that we shall not lose the attendance of the hon. Member for Stone (Mr. Cash), whose new-found interest in education has added a lot to our debate. I am disappointed that he does not perceive the legal aspects of the clauses with which we are about to deal.

I recognise that the amendment is well-intentioned [Interruption.]—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I am sorry to interrupt, but will Members who are not staying for the debate please leave quickly and quietly? Not to do so is a discourtesy to the Minister and to the House.

David Miliband (Labour, South Shields)

I recognise that the amendment is well-intentioned, and the Government certainly support its underlying principle of reducing burdens on schools. However, as drafted it risks leaving schools in the dark about vital educational developments, and damaging the interests of pupils and those who work with them.

We all know that there are important matters in education about which schools require guidance and information. Unforeseen events can give rise to a need for such guidance. We must be able to move swiftly to protect the rights and needs of pupils and school staff. An important example has come to the fore during the passage of the Bill. I refer to the Government's response to pressure, not least from the Opposition in the House of Lords, to make statutory provision for the welfare of children. That will require more material to be sent to schools, something that would be jeopardised by the Lords amendment as it stands. That cannot be right. I think there was support for the Government's amendment throughout the House.

Such vital information is not the same as reams of red tape. Here we are in full agreement with the terms of the amendment: we are committed to removing bureaucratic burdens on our schools. Schools obviously exist to deliver high-quality education, and we wish to remove anything that frustrates them in performing that task. We have set out our programme for reducing burdens in the Government's regulatory reform action plan, and we have made radical changes to simplify the operation of the standards fund, making it easier for schools to gain access to a significant proportion of their budgets.

We said last year that we would implement this Bill according to best practice, aiming to reduce burdens on those in schools. We recognise that there must be some administration for schools to function properly, but teachers' paramount task is teaching. The greatly increased number of support staff in schools who can carry out administrative work—some 80,000 now—will help schools to ensure that teachers can focus on their core tasks.

However, the Lords amendment as it stands could be counter-productive. In the Bill we move significant detailed prescription out of primary legislation. In place of that, we will make regulations that will be less detailed and less prescriptive. That will reduce burdens on schools. The unintended effect of the amendment would be to prevent us from doing that, because of its narrow focus.

If we imposed illogical constraints on that system, as would be the case if we were to adopt the Lords amendment, we could face the bizarre situation of being severely hampered in introducing a lighter touch schools framework, with more devolution and more decision making at school level. Surely we do not want to do that.

There is, however, one aspect of this Lords amendment that we do think could be made workable. It is the subject of the Government amendment.

As I have said, we want to reduce burdens on schools. One aspect of that is reducing the flow of material from central Government. I believe, and the Government believe, that a requirement to report annually to Parliament listing the Department's direct communications with schools could reinforce our determination to do so. We would report at the end of each school year. The number of communications with different types of school will inevitably fluctuate from year to year according to policy needs. Since the school year 1999–2000, we have achieved a significant reduction—of about a third—in the number of documents sent to schools. We continue to monitor all proposed communications stringently so that schools receive only material necessary for legal or policy reasons.

Chris Grayling (Conservative, Epsom and Ewell)

Does the reduction in the number of documents sent to schools to which the Minister has referred include the number of e-mails sent to head teachers by the Department?

David Miliband (Labour, South Shields)

I used the word "documents" advisedly, but as the hon. Gentleman will know all documents we send to schools are also sent to them by e-mail so that they are available in electronic form if that is what schools want.

The Department has some internal controls allowing us to appraise critically what goes on in schools, how and when. The most important thing is for schools to receive the right information at the right time, and that it is easy to use. I believe, however, that an annual report to Parliament would establish the right incentives for both Ministers and civil servants, making them think not just twice or three times but perhaps four times about communications to schools. As I have said, we want to reduce the number of communications.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

It is interesting that the Minister can now provide information that it has not been possible to provide in written answers in the past, and we welcome that. Does the Minister agree, however, that if the exercise is to be truly valuable there needs to be a way of debating the information that goes to schools in some forum in the House of Commons? We need to be able to decide objectively whether it has some value, or whether it is simply furthering the Government's political objectives.

David Miliband (Labour, South Shields)

I am tempted to suggest that that is an uncharacteristically ungenerous response from the hon. Gentleman. Like him, I would like us to spend all our time debating education in the House, but there are many other matters to discuss, and I hesitate to trespass on the timetabling responsibilities of Members greatly senior to me. I think, however, that this is an indication of the Government's commitment to taking seriously the need to reduce the bureaucratic burdens imposed by communications. I think the establishment of an annual report is the right direction to take: it will provide much greater transparency in regard to the Government's communications with schools. We have proposed a new clause to achieve that.

I believe that the amendment meets the concerns expressed in the House of Lords, and I therefore invite the House to agree to it in lieu of the Lords amendment.

Graham Brady (Conservative, Altrincham and Sale West)

I hope that I can put the Minister's mind at rest. He was obviously concerned about the fact that my hon. Friend the Member for Stone (Mr. Cash) was no longer present. I am sure that the amendments have legal aspects, so perhaps if the Minister repeats his entreaties, my hon. Friend could be prevailed on to return and give the House the benefit of his legal knowledge.

The Minister mentioned in passing what happened in the other place with amendments relating to child protection. I pay tribute to my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), who campaigned very effectively and established cross-party support in another place. She deserves enormous credit.

When speaking on the last group of amendments, the Minister made a little play of my enthusiasm for some of the Government's stated aims. I am not at all embarrassed by that: I stand by my support and enthusiasm for the Bill's aims of raising standards in education, increasing autonomy for schools and removing central control. Our concern throughout has been that what the Government have been doing is the opposite of what they have been saying.

Lords amendment No. 14 is another clear example of how it has been left to the Opposition to try to put into practice what the Government say they want to achieve. After many years of the Opposition's arguing that an intolerable burden of regulation and red tape is being placed on schools, the Government are increasingly prepared at least to echo our rhetoric. According to a Department for Education and Skills press release of 8 May, entitled "Tackling teacher workload and red tape will raise standards further", the Secretary of State said:

"It is vital that teachers spend their time teaching, not doing tasks that can be done by others".

We wholeheartedly agree, but the acid test of whether the Government really mean what they say is found in the detail of the amendments.

Perhaps above anything else, Lords amendment No. 14 crystallises the divide over how we should best proceed. In the light of recent disturbing evidence about the impact of excessive red tape and bureaucracy on the teaching profession—and in particular on the Government's ability to attract and retain good people—I hope that Ministers will reflect on this issue. Last Friday's edition of The Times Educational Supplement made the following encouraging point:

"New teachers are enthusiastic about the job, but most are unsure just how long they will stay given the workload and bureaucracy."

It continues by pointing out that, according to a new survey:

"Only just over a third"

of new teachers

"expect to be teaching after 10 years".

The blame for that is placed on work load and bureaucracy. Teachers whom I meet express concerns about work load not in the context of time spent teaching, but of time spent on the unnecessary diversions that the Government put in their way.

The extent to which our views are gaining currency, and to which the teaching profession is uniting behind the argument that we have advanced consistently in the past four or five years—Ministers may consider this an unholy alliance—is demonstrated by the latest edition of NUT News. That may not be an obvious source for me to quote, but I am pleased to do so because it gives credit to the splendid and noble Baronesses Blatch and Miller—a description with which the Under-Secretary would doubtless entirely agree. Under the heading, "The Lords protect us", NUT News states:

"All teachers now look to the Government for measures to reduce workload and make their teaching more effective. The Government needs to show that it shares with the House of Lords the view that bureaucracy must be attacked and that teachers need protection from excessive workload, new regulations and initiatives."

That was a direct response to Lords amendment No. 14—a point that should give Ministers pause as they try to dismiss what is one of the most important Lords amendments.

I should briefly point out to the hon. Member for Harrogate and Knaresborough (Mr. Willis)—I almost described him as my hon. Friend, as we worked together on the Bill rather well—that I am slightly disappointed that the amendment was passed in the Lords by Conservative and Cross-Bench peers without the support of the Liberal Democrats. Liberal Democrat peers—and, indeed, Government peers—said that they supported the amendment in principle and the spirit behind it, so I hope that we can persuade the hon. Gentleman that it would be preferable to support it in more than spirit.

Baroness Ashton said in the other place:

"I wish to make clear that the Government wholeheartedly support the spirit of the amendment. We understand that head teachers and teachers are under pressure."—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 259.]

That gives rise to an important question. The Government say that they support the spirit of the amendment, and the view that something needs to be done about the pressure that head teachers and teachers are under. However, those involved in education throughout the country will want to see solid evidence that the Government really want to do something about the problem. The Government's response to the amendment shows that, unfortunately, they are prepared to be held only to the declaratory aspect of the amendment. They are prepared to publish an annual report to Parliament, setting out the progress made in controlling or reducing the volume of regulation.

In passing, we should note the short exchange between my hon. Friend the Member for Epsom and Ewell (Chris Grayling) and the Minister, in which the latter came clean and said that he was choosing his words advisedly, and that in counting documents, the Government do not include all directives, circulars and consultation papers that are submitted to schools by electronic means, for example. Such evidence—that the Government are already trying to get round some of these constraints—is not a sign of a Government acting entirely in good faith.

If the Government were to accept subsection (1) in Lords amendment No. 14, which states:

"the Secretary of State and local education authorities shall have a duty to limit new regulation and to control the amount of material they send to governing bodies and head teachers",

all hon. Members and teachers throughout the country would heave a sigh of relief. For once, they would have concrete evidence that the Government really do intend to take some action, because the Government would be placing themselves under a statutory obligation to limit regulation, bureaucracy and work load.

Rob Marris (Labour, Wolverhampton South West)

What do those words actually mean, because they seem extremely vague in the context of such legislation? Does the phrase

"a duty to limit new regulation"

refer to less regulation than would otherwise have been the case? In other words, would the provision require that 50 new regulations be added, rather than 100? I suspect that that is not what the hon. Gentleman or the Lords were trying to achieve. The phrase

"to control the amount of material they send to governing bodies and head teachers"

is not only incredibly vague but suggests that the Department has no control at all. Is that what the hon. Gentleman intended to suggest?

Graham Brady (Conservative, Altrincham and Sale West)

It sometimes seems to head teachers and teachers that the Government do indeed have no control, and that they simply spray out regulations, directives and circulars daily. In that regard, perhaps the hon. Gentleman has inadvertently put his finger on the matter. In describing the amendment as vague, he is probably trying to suggest that, if we had a duty to control the volume of paper pumped in the direction of schools—4,400 pages of documentation were produced last year, equivalent to some 17 pages a day—the danger is that useful regulations might go, rather than useless and unnecessary ones. It would be a useful discipline for Ministers to know that they had to limit the amount of dross and rubbish.

Kevin Brennan (Labour, Cardiff West)

I am following the hon. Gentleman's argument carefully. In the light of his proposal to put a statutory limit on departmental circulars, how many pages and Government directives would be appropriate in a given year?

Graham Brady (Conservative, Altrincham and Sale West)

There is a very simple answer—an awful lot fewer than we have at the moment. The whole teaching profession would like such a reduction. The rhetoric from Ministers is that they want autonomy for schools and teachers to be given the freedom to teach, but in practice they are trying to micro-manage every minute of the school day in every school in the land.

Rob Marris (Labour, Wolverhampton South West)

I should declare an interest to the House, in that my partner is a primary schoolteacher. When the hon. Gentleman responded to my earlier intervention, he referred to lessening the volume of paper. Leaving aside the electronic issue that we mentioned earlier, that would appear to be more specific than the vague wording in subsection (1) in Lords amendment No. 14.

Graham Brady (Conservative, Altrincham and Sale West)

If the hon. Gentleman's partner is a primary schoolteacher, perhaps we should all wish that she were here to vote on the amendment tonight instead of him. I suspect that a primary schoolteacher would find the amendment irresistible, because it would be an opportunity to lighten the work load that is put unnecessarily on teachers. He says that the wording is too vague. I do not hold that against him because he was not in Committee with us, but if he considered the original wording, he would discover that the new subsection (1) would be one of the most precise and closely defined aspects of the Bill. The idea that the Bill should allow the exemption of schools or LEAs from any aspect of education legislation—

Rob Marris (Labour, Wolverhampton South West)

It is very specific.

Graham Brady (Conservative, Altrincham and Sale West)

That tells the House a great deal. The Bill is specific about the huge powers that it seeks to give Ministers. Those who are interested in such matters know nothing, however, about Ministers' intentions once the Bill is enacted.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am loth to help the hon. Gentleman, but will he also address the issue that the Minister mentioned in his opening remarks and which hon. Members who were not in Committee will not fully appreciate? One of the central aspects of the Bill is that it depends on secondary legislation at every step. It is the secondary legislation that will create a new raft of bureaucracy that we cannot even imagine, because the regulations have not been published.

Graham Brady (Conservative, Altrincham and Sale West)

The hon. Gentleman is right. The amendment is an opportunity to reduce the secondary legislation necessary and to provide clarity for those who need to get on with the running of schools. The Government believe that they have addressed the concerns of the teaching profession that were raised in the other place. I imagine that one or two Labour Members will have received the NUT briefing on this evening's proceedings. If they have not, it explicitly states:

"the NUT would be extremely concerned about the message Government would be giving if it sought to simply overturn the amendment without replacing it with a similar duty.

The Government's amendment does not go nearly far enough. Teachers and head teachers will see little point in an annual report which does nothing more than describe what has been sent to schools. The amendment does not commit the Government to reducing the amount of paperwork sent to schools and does not provide any indication that the Secretary of State is prepared to stop imposing centrally prescribed initiative after initiative on schools and to finally start 'trusting teachers'."

It is clear that the teaching profession wants that limitation on what Ministers can do to the nation's schools.

Teachers want the freedom to teach and to have a breathing space from the torrent of regulations that are placed on them. They want an explicit and clear statutory requirement that will give some relief from what has, admittedly, been the education practice of all Governments—although this Government are particularly bad—which is to over-regulate, over-control and centralise education provision, even as they claim that their objective is to deregulate, decentralise and allow greater autonomy.

James Purnell (Labour, Stalybridge and Hyde)

Does the hon. Gentleman agree that extra classroom assistants and administrative support are key to reducing the bureaucratic work load faced by teachers? Will he therefore support the extra funding announced today and will he argue with the shadow Chancellor that the Conservative party should also support it?

Graham Brady (Conservative, Altrincham and Sale West)

It is obviously excellent if we have classroom assistants in schools, but we do not want teachers to have to employ accountants and lawyers so that they can process the heaps of documentation that are thrown at schools by the Government. We want teachers and classroom assistants to be able to get on with the job of teaching. Lords amendment No. 14 would deliver that.

Mark Hoban (Conservative, Fareham)

In this afternoon's statement by the Chancellor, he talked about the joys of localisation and decentralising power. Is not that in stark contrast to the Government's failure to embrace Lords amendment No. 14? They should welcome a statutory limit, because it would accord with the new localisation of which the Chancellor was so proud this afternoon.

Graham Brady (Conservative, Altrincham and Sale West)

My hon. Friend has hit on the point that the Government do not want to be subject to controls on their interfering and meddling tendencies. The Government are happy to have extra levers of control over others, but they should accept that they are the worst offender. They are producing needless documentation, bureaucracy and regulation, and taking teachers away from the task of teaching. It is not schools that need to be regulated or from which teachers need to be protected: it is Ministers. If they want to be taken seriously when they say that their aim is to allow teachers the freedom to teach, Ministers would embrace Lords amendment No.14. I hope that the Minister will come to his senses and do so, especially on this most auspicious day. I understand that it is his birthday and I wish him the happiest day possible under the circumstances. I accept that this may not be the way in which he would have chosen to celebrate his birthday, but perhaps he will offer—in a spirit of friendship—a present to teachers and head teachers and signal a genuine commitment to reducing bureaucracy and red tape in our schools.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I support many of the comments made by the hon. Member for Altrincham and Sale, West (Mr. Brady) and I, too, wish the Minister a happy birthday. The hon. Gentleman made some slightly barbed criticisms about the fact that Baroness Sharp and my other colleagues in the Lords did not support the amendment. They did not do so because of subsection (3), which states:

"Each set of regulations, circular or code of practice issued by the Secretary of State shall include a statement by him of the time he expects it will take for governing bodies or head teachers of schools or nursery schools, as appropriate, to read, consider and implement the regulation, circular or code of practice concerned."

Much depends on the resources that schools have available, and it would be unreasonable to expect the Secretary of State to carry out what the amendment would require of him. That notwithstanding, the effect of the amendment, and the principle behind it, is right.

Graham Brady (Conservative, Altrincham and Sale West)

The hon. Gentleman said that the Liberal Democrats in the other place did not wish to support new subsection (3) of the new clause that is amendment No. 14. Is he prepared to confirm that the Liberal Democrats support the principle in new subsection (1), and may we hope to have the support of his colleagues on such an amendment in the future?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I never bind my colleagues in respect of what they will or will not do. The hon. Gentleman will know that he could not do that in respect of his own colleagues in the other place. However, the principle of having a statutory duty in the Bill to reduce bureaucracy and work load is fundamental to our view of developing secondary education in this country. More resources coming into schools will matter nought if the process is accompanied by endless amounts of regulation and red tape that tie up a great deal of those resources unproductively. I am with the hon. Member for Altrincham and Sale, West on that point.

Rob Marris (Labour, Wolverhampton South West)

I believe that the hon. Gentleman used to be a head teacher; indeed, I think he used to teach my niece. Will he refer to three pieces of regulation that he would get rid of?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

That is a fair question, and one which the Secretary of State frequently throws at those of us who wish to see a reduction in bureaucracy. When we consider what is emerging from the Department for Education and Skills, and what emerged from its predecessor Department, we find that virtually everything has some value to somebody. The problem is that it does not have value to everybody. That is the great problem with this Government, especially in terms of education. To ascertain what is valuable to them, the individual has to read everything that comes through. When I meet head teachers—I am sure that the hon. Member for Wolverhampton, South-West (Rob Marris) has the same experience—I find that they do things and read things just in case. We would like to see discretion exercised in the initiative overload coming into schools, so that it is not necessary to follow every initiative.

One of the problems is the way in which the Government have set up their funding streams, especially through the massive expansion of the standards fund from £0.7 billion to more than £4 billion—the sum announced in the statement tomorrow will no doubt be even greater. So much of the resources in schools are dependent on their following a certain initiative, bidding for that money and obtaining the resources. That is the exercise that lies behind the amendment.

Baroness Ashton of Upholland recognised what the Opposition were trying to do in reducing bureaucracy: indeed, reducing it is the Government's stated aim. Yet the amendment before us is a mere sop. Anyone in this place should be able, as of right, to table a question to the Secretary of State to ask for the necessary information. The idea that it should be put together once a year as a huge concession to the bureaucracy and work load problem is insulting to the House; to right hon. and hon. Members who genuinely want to make progress; and to all head teachers and teachers. They face a huge problem, and I hope that the Minister will take this issue back rather than dismiss the Opposition's claims. When the Bill returns to another place, I hope that the Government will produce an amendment that genuinely satisfies the desire to see scrutiny of initiative and scrutiny of work load. There should also be sunset clauses for new initiatives.

Let me refer to Baroness Blatch's amendment in another place, of which Baroness Ashton said that it

"is lacking in that it does not address the issue of the quality of information issued."

That is the point that has been made. She continued:

"I know from my own experience of being both responsible for issuing information and being on the receiving end as a chair of governors until last year that it is the quality equally as much as the quantity—indeed, more so—of the communication or regulation that is of paramount importance."—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 261.]

Yet the Government's amendment does not deal with that issue. Bringing forward a list of all the initiatives does not address the issue of what is important and what is not. I do not believe that every document issued by the Secretary of State is of equal importance.

We shall support the Conservative party's new clause and reject the Government's amendment should they press it to the vote. I trust that by the time it returns to another place we shall have a sensible amendment from the Government that addresses the entire issue of bureaucracy and work load.

Rob Marris (Labour, Wolverhampton South West)

Lords amendment No. 14 is bemusing: subsection (1) is vague and subsection (2) could be recorded in a parliamentary question—the criticism that the hon. Member for Harrogate and Knaresborough (Mr. Willis) makes of the Government's amendment. That does not take us any further forward in the hon. Gentleman's frame of reference. Subsection (3) introduces more red tape, and that does not take anyone anywhere. Subsection (4) is extraordinary: it tells us that there shall be "no additional burden," which again is vague and would stop fresh initiatives of any sort. The hon. Gentleman talks about discretion—

Chris Grayling (Conservative, Epsom and Ewell)

I suggest that the hon. Gentleman rereads subsection (4), which is simply and specifically in relation to subsection (3). It does not preclude additional regulation on a broad basis.

Rob Marris (Labour, Wolverhampton South West)

I take the hon. Gentleman's point, but the amendment refers to "no additional burden" and to providing "with information". Under subsection (3), that would unreasonably fetter the discretion of any Secretary of State for Education and Skills in terms of new initiatives. The hon. Member for Harrogate and Knaresborough talks about discretion, and I am not sure how it could be incorporated into Lords amendment No. 14. I take his point, but it is extremely difficult to read discretion into the amendment that he told the House he would be supporting.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I was trying to point out that neither of the two amendments is perfect. There is general agreement in the House that we need to reduce bureaucracy. Indeed, that is the Government's stated aim. We are trying to encourage the Government to frame an appropriate amendment that deals with the core issues rather than one that states that we shall have a long list in the Library.

Rob Marris (Labour, Wolverhampton South West)

The issue of red tape has probably been before the House for 300 years. To suggest that right hon. and hon. Members have not got the message on that is extraordinary. We have had a considerable amount of regulation in schools over the past five years, but the Opposition seem to be suggesting that that was done to no end and for the sake of doing it. We have had a step change in education in schools given the results that have been produced. That has been positive. I will not bore the House with statistics that we all know. There have been improvements in education, especially in primary schools but also in secondary schools.

The hon. Member for Altrincham and Sale, West (Mr. Brady) mentioned that he had not heard teachers complaining about work load in the classroom. Perhaps that is a paraphrase, but that is broadly what he said. I am not surprised. We have 20,000 additional teachers. Class sizes have been reduced considerably, especially in primary schools. We have 80,000 classroom assistants. It is not surprising that teachers are not complaining about work load in the classroom, given the extra resources that have been put in. The extra resources will continue to be made available, as we heard in my right hon. Friend the Chancellor's statement.

I will not bore the House with all the figures, but 1,400 secondary schools will receive £1 million over three years. That could be described as over-centralisation, and Opposition Members have spoken about that. But when I talk to head teachers, that kind of centralisation is what they like. They like that sort of money coming in.

Andrew Turner (Conservative, Isle of Wight)

Perhaps the hon. Gentleman will tell me on what basis the schools will be selected, and by whom.

Rob Marris (Labour, Wolverhampton South West)

With respect, that is a question to put to my right hon. Friend the Chancellor of the Exchequer, not me.

Andrew Turner (Conservative, Isle of Wight)

That is the problem.

Rob Marris (Labour, Wolverhampton South West)

The hon. Gentleman can address his questions to my right hon. Friend. We have 1,400 schools with leadership incentive and grants. I do not profess to be an expert on those schools. A considerable amount of money has already gone into schools in the last five years, and a considerable amount more will go into them in the next three. If Conservative Members are decrying that kind of centralisation, it is incumbent on them to say what they would do instead.

Chris Grayling (Conservative, Epsom and Ewell)

The last few remarks have been extremely illuminating, and they highlight my biggest concern about many of the Government's actions, not only in education but across the board: they do not understand the consequences of what they are doing.

The hon. Member for Wolverhampton, South-West (Rob Marris) showed a complete absence of understanding of the predicament that head teachers face and of the real resentment in the teaching profession about the extreme levels of bureaucracy and work load being imposed by unnecessary regulations from central Government. One merely has to talk to head teachers, as I do regularly, to understand the consequences of that. The most consistent message is that new, young teachers are not staying in the profession. That was amplified by the piece in The Times Educational Supplement read out by my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady). The reality is that teachers are not staying in the profession.

Chris Mole (Labour, Ipswich)

Will the hon. Gentleman acknowledge that he slips smoothly from observations about head teachers to observations about teachers, whereas, clearly, the majority of classroom teachers will not read every one of the circulars from the Department for Education and Skills or have every regulation impact on them as individuals. The hon. Member for Harrogate and Knaresborough (Mr. Willis) suggested that, as a matter of security, teachers would read everything. Surely, the heads read the executive summaries and decide which of them are appropriate for which of their teaching staff to examine in detail.

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Gentleman should visit some of the head teachers in his constituency and ask the question that I recently asked a primary school head in my constituency: "Can you show me an example of the kind of bureaucracy that is causing teachers to resent the work load that they face at the moment?" She showed me the course planning required by Ofsted, which is set out in the frameworks and curricula provided by the Department. One example struck me as demonstrating the absurdity of what we ask of our teachers at the moment.

I was shown a course plan in which someone had planned physical education lessons for the term. It contained a detailed paragraph written at the start of term, weeks in advance, explaining a section of a PE lesson in which groups of pupils were doing star jumps. It contained phrases such as, "Divide into pairs. One child does star jumps while the other one counts, then we reverse. The other child does star jumps while the first one counts." Can the hon. Gentleman explain what possible benefit there is in expecting a primary teacher to sit down, probably in their own time, to work their way through the whole of a course plan for a term, setting out what each individual activity in an individual PE lesson will be? Do we not trust our teachers to take those decisions for themselves?

Is it any wonder that not only teachers but heads who have to supervise this convoluted process and deal with an in-box full of e-mails from the Department every day—and who have to recruit to replace younger teachers who are saying, "Enough, I'm leaving," after three or four years in the profession—are over-burdened? I was due to visit a primary school in my constituency, but the head was not able to see me because he was too busy interviewing potential recruits to fill the gaps in his staff over the summer. That is what heads across the profession face at the moment, and it is an unwelcome and unnecessary burden that does nothing to help the education of the children.

James Purnell (Labour, Stalybridge and Hyde)

Is the hon. Gentleman aware of the work being done by the School Teachers Review Body on cutting bureaucracy and freeing teachers up to teach? Does he agree that that is a proper, sensible way of reducing bureaucracy, instead of the spin to which this proposal amounts? Does he agree with the recommendation that administrative support should be provided for teachers, which will require money? Given that he is not under the vow of silence on spending pledges that applies on the Opposition Front Bench, will he welcome the extra money announced today?

Chris Grayling (Conservative, Epsom and Ewell)

This goes to the heart of the difference between the Opposition and the Government over the public spending review. This is the question that must be asked: is it sensible to tax the North sea oil industry, thereby reducing investment in the North sea, to generate money to pay for administrators in schools to help teachers to deal with the unnecessary bureaucracy—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. The hon. Gentleman is speaking somewhat wide of the debate.

Chris Grayling (Conservative, Epsom and Ewell)

We must not spend money helping teachers deal with administration instead of simply cutting the burden of an unnecessary work load coming from central Government.

The Minister's comment was enlightening. I visited a special school in south London recently, and I talked to the head there about the flow of bureaucracy from the Department. She opened up her in-box, and it was absolutely full of documents, contacts and communications from the Department. We all receive large numbers of e-mails in our daily lives, so we know how long it takes us to go through them and deal with them effectively. It cannot be a sensible use of time to expect a head teacher to deal with a huge swathe of e-mails containing detailed information about their responsibilities on a daily basis.

I am delighted that the hon. Member for Harrogate and Knaresborough (Mr. Willis) and the Liberal Democrats are going to back the proposal despite their reservations about subsection (3), as that subsection represents the nub of the problem: it is probably the most important subject of debate in relation to the Bill because it requires the Secretary of State before issuing a new regulation to pause for thought and try to understand the consequences for teachers and head teachers. On far too many occasions, the Government enforce new rules and regulations without the slightest understanding of the consequences of those measures in schools; of the time they will take; of the way in which they will disrupt the working life of the school; of the additional burden that they will place on individuals; and of how they will force people to give up their spare time, as many teachers do, to deal with the bureaucracy that they face in their daily lives. That is why the new clause deserves the backing of the House. We must take not just the window-dressing steps that the Minister's alternative amendment represents: we must take tangible steps to start reducing the work load and burden of bureaucracy that our teachers face.

My hon. Friend the Member for Altrincham and Sale, West was asked earlier what "less" means in this regard. I question whether we need to increase the burden of regulation on our schools at all. Why do we not start to implement sunset clauses, examining rules and regulations that we no longer need and considering how we can simplify and streamline provisions? There is no need to add to the burden of regulations year by year and pass statutory instrument after statutory instrument. We need to cut, rather than increase, the overall burden.

Rob Marris (Labour, Wolverhampton South West)

As the hon. Gentleman is talking about sunset clauses, will he tell the House which three regulations he would get rid of?

Chris Grayling (Conservative, Epsom and Ewell)

I am talking about the streamlining of provisions across the board. I shall not deal with specifics now—[Interruption.] In relation to the example of the Ofsted inquiry that I gave earlier, I would not require primary teachers to plan courses to such a high degree. I would not require teachers in the foundation stage to complete convoluted course plans for three-year-old kids in a nursery. Those are two examples, for starters.

I hope that the House will back the new clause. We must take a first step. The Minister's proposals are not adequate; we need to take real steps to cut the burden on our teachers.

Andrew Turner (Conservative, Isle of Wight)

I am pleased to support the new clause proposed by my noble Friends in another place. In particular, I want to refer to three points.

First, I want to congratulate my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on his attribution to the Secretary of State of an understanding that there must be a reduction in bureaucracy, although I think that he is being a little generous. When the Secretary of State appeared before the Select Committee, she argued that the cloud of new paperwork did not amount to an unnecessary burden on head teachers because they did not have to read it. There may be several pieces of paper coming in daily from the Department—and doubtless many others from other quangos for which the Government are responsible—but the Secretary of State said, with great confidence, that that was not a burden on schools because heads did not have to read them. If so, I fear that the hon. Member for Harrogate and Knaresborough (Mr. Willis) was overworking himself, and that he has friends who have overworked themselves as head teachers. However, I suspect that the Secretary of State, and not the hon. Gentleman, was wrong. Head teachers want to know what additional regulations, codes of practice and responsibilities will bear down on them every day. If they do not know, they cannot direct the information to the correct teacher or administrator.

My second point is about parliamentary questions. Hon. Members on both sides of the House have referred to the possibility of extracting information through parliamentary questions. I fear that that is not so. I have tried unsuccessfully to extract from the Department information about the additional legislative requirements placed on head teachers, governing bodies and Ofsted. In some cases, the Department has been able to answer my questions, but it has not been able to answer those about schools and head teachers. So many additional burdens—not only in the form of paper, but in the form of legislation and regulation—tumble down on head teachers and schools that even the Department itself does not keep a record. It is unable to answer parliamentary questions without undue expense.

My third point relates to the comments of the hon. Member for Wolverhampton, South-West (Rob Marris). Subsection (1) of the new clause is a masterpiece of clarity. It says that

"the Secretary of State and local education authorities shall have a duty to limit new regulation."

They would have to do the limiting. They could decide on the target and they would then have to meet that target when they imposed a limit. What could be clearer than requiring them to do the limiting? We are not setting targets and we are not being unreasonable. We accept that it is sometimes necessary for the Secretary of State perhaps even to increase—I hope that she would not—the amount of material going before governing bodies and head teachers, but she would have a duty under the new clause to limit the amount of that material. Local authorities would have a similar responsibility, and that is one reason why I disagree so much with Government amendment (a), which does not refer to local education authorities at all.

Like the hon. Member for Harrogate and Knaresborough, I would like there to be further improvements to the new clause, and that is why I want it to be returned to the other place. It should apply not only to the Secretary of State and to LEAs but to that host of quangos and other bureaucracies that are involved in education. From the Health and Safety Commission through to the Ofsted, let them all endeavour to reduce the burden on head teachers, schools and school governors.

Subsection (3) again sets out a perfectly sensible requirement that already applies to other legislation and regulation that comes before the House. It would provide for a regulatory impact assessment. One wonders what the Secretary of State is about if she cannot see the consequence on schools of additional codes of practice, circulars or regulations. Many primary schools in my constituency have fewer than 100 pupils, and some have fewer than 50. That means that, however well or badly the Chancellor funds education, they do not have a huge number of teaching and administrative staff to deal with additional codes of practice, regulations and circulars. That point needs to be assessed by the Secretary of State and her officials. In every case, she needs to be advised that some regulation is over the top for a small school. Perhaps such regulation should not even apply to small schools.

From time to time, we recognise that some regulations are too much for the smallest businesses, so we should also recognise that some regulations are too much for the smallest schools. That is why I will support the Lords amendment. Like the hon. Member for Harrogate and Knaresborough, I recognise that the Government could improve it further when it returns to the other place. I hope that they will do that and accept the amendment in the spirit in which it was meant. I hope that they will try to improve the existing provision rather than pressing their amendment, which would quite unnecessarily water our proposals down.

John Redwood (Conservative, Wokingham)

I wish to speak because I was very disturbed by the Chancellor of the Exchequer's announcement earlier today. It makes it even more imperative that the Government take action on the over-regulation of the school sector and LEAs. I therefore welcome any initiative that will try to reduce the burden of circulars, advice notes, instructions and regulations that emanate from the Department for Education and Skills.

This has been a curious debate. The Government say that there is no problem, but all the head teachers to whom I and other Members speak confirm that there is a problem. The Government then say, "Trust us. Don't worry. We believe in deregulation too. It must not be overdone. We will get on with a little bit of deregulation, but not yet, not in this way, or in this clause, or this legislation."

I urge the Government to think again, because they have unleashed a dangerous set of ideas in the Chancellor's statement about how he wishes to get value for the larger sums of money that will be offered directly to schools and to LEAs. The regulations, the advice notes and codes of conduct will presumably be integral to that. We are told that those schools that do not perform or live up to the expectations expressed in the advice notes and the circulars may be subject to all kinds of torture coming from the centre. There may be direct intervention at the school level. For example, the Government may wish to remove a head teacher or change or influence the board of governors.

Alternatively, the Government may wish to override local democracy if they judge a whole local education authority to be inadequate or non-performing. They will then start a process that will usurp the local democratic process, with a view to trying to take over the management of the authority itself. By that route, they will have influence over a school. That is why we must be ever more critical of and sceptical about the many centralising directives, codes of conduct and advice that come from the Government. They will probably be used as a stick with which to beat schools and LEAs if the Government do not like the way they are developing—whether they are good, bad or indifferent.

David Wright (Labour, Telford)

Does the right hon. Gentleman therefore seriously support failing schools?

John Redwood (Conservative, Wokingham)

Of course I do not support failing schools. However, there are two ways in which they can be dealt with. First, in the world that I like—it is partially available to the Government, and the provisions for this could be strengthened—parents would have a real choice. They would be able to send their children to a better performing school and the poor performing school might then get the message and would have to take action to correct itself. Secondly, a democratically elected LEA would either take action or, through the ballot box, local people would make their preferences clear. They would throw out the council that presided over the failing school or schools and would produce an alternative.

I do not like a Government who centralise so much by directive, instruction and code of conduct and who set up methods by which they will use those codes of conduct to judge or prejudge the schools and LEAs, with the possibility that local democracy and democratic boards of governors would be overridden—even when the local community might think that the school was good but the Government, for one reason or another, decided that it was bad. I therefore urge the House, particularly in the light of today's chilling words from the Chancellor—he does not seem to like local democracy or democratic school governors—to be even more wary of a Government who will not reduce the number of centralising directives. They say that they wish to decentralise, but every action that they take centralises. They say that they trust teachers, LEAs and schools, but we heard from the Chancellor today that they do not trust any of them and wish to challenge and judge them by all sorts of methods. It is therefore vital that the House express the clear wish that there must be much less regulation and central control.

David Miliband (Labour, South Shields)

This has been a notable debate. I am grateful for the many congratulations on my birthday. However, I look forward to the day when, rather congratulating me on my birthday, the hon. Member for Altrincham and Sale, West (Mr. Brady) will congratulate the Government on investing in our education system and on putting 24,000 more teachers into the system. I look forward to the day when he will say that he will defy his party, which is ready to cut the education budget. Until then, his professions of wholehearted support for the aims of improving standards in our schools will ring very hollow to all those Labour Members who have sat through the hour and a half of this debate. When he professes support for raising standards but offers no support for investment in information technology or for reforming the teaching profession, we will not believe him.

The debate ranged wide of the amendment and I want to pick up on two main points. We discussed at length the situation in the teaching profession. The latest figures suggest that 80-plus per cent. of newly qualified teachers are in the profession three years after entering it. So it is not true to suggest that over-regulation is causing a mass exodus. Hon. Members know that the Government are committed to the fundamental reform of the teaching profession. We want to reform the contact time that teachers have with children and to improve their productivity. We also want to improve the support of the teaching profession by expanding the classroom assistant scheme and by providing the learning mentors and learning support staff who do so much in our schools to support teachers. In addition, we want to improve school leadership so that teachers spend their time on teaching.

There is an issue about regulation; it is a matter on which all hon. Members should have some humility. Governments historically have not been good at limiting their tendency to over-regulate. I will not say that everything is fine. The hon. Member for Harrogate and Knaresborough (Mr. Willis) put his finger on an important point. There is a tendency to believe that because an initiative is right for some schools, it needs to be advertised and sent to all schools. His comment was constructive and we will take on board the idea that, in our desire to ensure that no one is left out, we sometimes overburden those who want to get on with their work.

The debate was noteworthy. A couple of hon. Members were asked to name regulations they would cut. The House has welcomed the increased regulation on child welfare introduced by the Bill. We know that the literacy and numeracy strategies have been hugely successful in raising standards in primary schools. We also know that the key stage 3 strategy, which involves regulation, gives many teachers much needed support in the critical middle years of secondary schooling. It would be folly to retract those regulations.

Graham Brady (Conservative, Altrincham and Sale West)

The Minister says that we have been unable to name regulations that should be removed. Can he name three of the 4,770 regulations issued by the Government in the past year which, on reflection, might not be necessary?

David Miliband (Labour, South Shields)

Let us understand how the Opposition reach that figure. A document that is sent to primary schools and to secondary schools is counted twice even though it is one document. So one document counts twice in the Opposition's new mathematics. We should not fall for the hon. Gentleman's fuzzy maths.

Adam Price (Plaid Cymru, Carmarthen East and Dinefwr)

The Government have seen fit to extend the scope of their amendment to the National Assembly for Wales. Did they seek the approval and consent of the Minister for Education and Lifelong Learning in the National Assembly? If so, was it given? There is an appetite in the National Assembly to move much further on the issue. Surely that is a matter for the National Assembly.

David Miliband (Labour, South Shields)

The hon. Gentleman knows that Labour is committed to working closely with our partners in the devolved bodies, and I can reassure him that we consulted the relevant authorities in Wales.

The Government amendment is a serious step forward. I urge the House to welcome it.

Lords amendment disagreed to.

Amendment proposed: (a), in lieu of the Lords amendment.—[Mr. Miliband.]

Clause 32 — Federations of Schools

David Miliband (Labour, South Shields)

I beg to move, That this House disagrees with the Lords in the said amendment.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this we may discuss Government amendment (a) in lieu of the Lords amendment.

David Miliband (Labour, South Shields)

I know that the whole House will agree that there must be strong partnerships between parents and schools. That is important for children, for schools and for parents. A good and open relationship between home and school can make a huge difference to a child's progress. Annual parents meetings are one means to that end: a positive and productive partnership between parents and schools that contributes to raising standards. Of course, meetings can be particularly important where parents have concerns that they want to express.

Currently, governors are obliged to hold meetings once a year. They are intended to be an opportunity for all parents to influence the running of schools, and at present they are subject to considerable regulation. When we introduced the Bill, we proposed to re-enact the existing requirements essentially as they are. On reflection, however, we accept the Lords' view, expressed in amendment No. 23, that there is no need for detailed regulation of the meetings. Since they were introduced, they have been prescriptively regulated, but we agree that the detailed arrangements can perfectly well be left to schools.

We want to retain the current exceptions from the general duty to hold parents meetings, as I shall explain in due course. We are ready to go further and to consult on whether there are circumstances in which the requirement could be further relaxed, especially where schools can demonstrate that they have involved parents thoroughly in the life of the school throughout the year. Although we cannot accept the Lords amendment, because it would leave us with a clause that does not legally serve its purpose, we very much accept its thrust.

There is an important principle here that will be supported across the House. Governors should give parents the opportunity to hold them to account for what they are doing. The requirement left in the Bill by the Lords does not quite do that job, because it does not specify the purpose of the annual meeting. As it stands, there would be no requirement on governing bodies to allow parents to present their views on how their child's school was being run, or might be run in future. Schools would be able to claim that they had fulfilled the duty to hold an annual parents meeting by inviting parents to a party, a sports days or a school play. I hope that the House agrees that we need to tidy up the matter.

The removal of the regulation-making powers would also put some schools in a worse position than they are in now, because it would remove the possibility of exemption from that duty, to which I referred a moment ago. For example, at present special schools established in hospitals, or maintained schools where at least 50 per cent. of the pupils are boarders, do not have to hold annual parents meetings if the governing body of the school concerned does not think that it would be practicable to do so. Many of those schools would find it extremely difficult to persuade any parents to attend annual parents meetings. We do not believe that they should be required to do so in future.

As we have said throughout, we believe that if schools have held a meeting to discuss an Ofsted report, they should be exempt from a requirement to hold a further meeting. We want to ensure that parents have an annual opportunity to hold the governors to account, but we do not want that requirement to be more burdensome than absolutely necessary. As I have said, we are prepared to look further to see whether there are other circumstances in which it would be right to relieve schools of that duty. We will invite suggestions on that when we come to consult on the draft regulations and guidance. I do not want to revisit a previous debate, but this issue might be one in which we can achieve a measure of deregulation that is welcomed by both sides of the House.

The Government amendment closes the unintended loophole created by the Lords amendment, so that only a meeting in which the governors can be held to account is counted as an annual parents meeting. It also ensures that there can be exemptions where it does not make sense to hold a meeting. The annual parents meeting is a backstop, and it is important that we keep it; but I hope that the House will join me in supporting the Government amendment, which accepts the thrust of the Lords amendment while ensuring that the basic principle of parents meetings and the current exemptions are retained.

Graham Brady (Conservative, Altrincham and Sale West)

Given the consensual tone in which the Minister has presented the Government's response to the Lords amendment, I do not want to be too strongly controversial or party political—the Minister knows that that is not in my character anyway. However, I am tempted to make the observation that if only the Government had not, at earlier stages of our consideration of the Bill, denied the House of Commons the chance properly to scrutinise the Bill, we might have saved both ourselves and another place considerable effort. The clauses relating to annual parents meetings were among those many clauses that, sadly, fell victim to an extremely arbitrary timetable and the use of so-called knives throughout the Bill's Committee stage. It is sad that on a matter on which, as the Minister has shown, there is room for agreement across the House, as well as room to make sensible improvements to legislation, the use of procedural devices should have prevented consideration that might have enabled those things to happen.

In Committee, I tabled an amendment that would have had a slightly different effect from the Lords amendment. The detail of that amendment was to provide that a school would not need to hold a parents meeting annually unless there was a requirement or demand to do so from a certain number—a small number—of parents. The objective was to provide the sort of backstop that the Minister rightly says is important. Unfortunately, because of the timetable and the use of the knife, the Committee was unable to debate not only my amendment but this entire part of the Bill. Had Members of Parliament been given an opportunity to do their job properly, we might already have arrived at the sensible agreement towards which we are now moving.

The Minister has spoken of a desirable removal of unnecessary regulation. On the previous group of amendments, we were seeking precisely such an example of where it might be possible to remove some elements of unnecessary regulation without damage. The other place has made a sensible proposal that is designed to remove unnecessary regulation of the way in which parents meetings are held—how they should be publicised and their precise format. I am sure that most hon. Members on both sides accept that that is unnecessary detail for primary legislation.

The Government amendment specifies the minimum regulation necessary for the meetings, providing only that they must take place and that they must be an opportunity to hold the governors and school to account, and stating that in certain circumstances exemption from the obligation to hold a meeting is possible. The Minister mentioned the circumstances in which a meeting to discuss an Ofsted report has already been held. As I read it, new subsection (3) would create the sort of regime that I sought at an earlier stage of consideration, but would do so by regulation.

I would welcome clarification of whether, under new subsection (3), the circumstances in which there is no need to hold an annual meeting could be extended to include a presumption that an annual meeting may not be held unless certain circumstances prevail. I simply wonder how much latitude there is in the new subsection; it seems on the face of it that the provision could be interpreted quite broadly. I have no difficulty with that, so long as a backstop position remains—a guarantee that parents will have an opportunity to hold the school to account when there is a need to do so.

We want to avoid meetings being held unnecessarily—perhaps a meeting has already been held, or the school's experience is that when an annual meeting at which governors and the head teacher can be held to account is convened, no parents attend. It is a question of finding a sensible way forward.

George Osborne (Conservative, Tatton)

My hon. Friend is making an excellent speech. Does he agree that it is important that the Minister gives us a clue as to the likely nature of the regulations issued under new subsection (3), so that we have some idea of what he has in mind?

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to my hon. Friend and neighbour for his helpful intervention, in which he tries precisely to pin down the Minister on the key point. The Opposition have no difficulty in principle with the fairly broad provisions of the permissive new subsection (3), which states that regulations may specify

"the circumstances in which a governing body are to be exempt from the obligation imposed by subsection (1)."

However, if regulations are to be the instrument used, it is not only appropriate but, as my hon. Friend suggests, necessary and important that at this point the Minister puts a little flesh on the bones of what the Government envisage those circumstances being.

Andrew Turner (Conservative, Isle of Wight)

Does my hon. Friend agree that the provision on annual parents meetings was a necessary part of previous education legislation? It was part of either the 1986 or the 1988 Act—I cannot remember which—and was designed in an era in which parental choice was far more restricted than it is now and there was far less parental representation on governing bodies than there is now. None the less, it is necessary to provide that such meetings should be held until we reach that fortunate position in which there is total parental choice and schools that do not respond to their market as they should do not need to be prompted by means of meetings, but are instead prompted by means of the exercise of parental choice.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to my hon. Friend, as I was throughout Committee, for his helpful and knowledgeable contributions. He is right that the circumstances or ground rules have changed since the provision was introduced. I set out to be helpful and accommodating to the Government, but he brings me back to the formula which I sought to float in Committee: there should be a provision to allow parents to require an annual meeting to take place if one would not otherwise take place. I should be grateful for the Minister's elucidation on whether, in any regulations that he may introduce, if an exemption is granted, it would be appropriate to set out the circumstances and a mechanism by which parents could overturn it. If there has been a meeting with Ofsted to discuss an Ofsted report in general terms, it may not be necessary to hold a further parents meeting. There may be a material change in a year in which a meeting has already taken place, in which case parents should have the opportunity to require another meeting. I would be grateful for clarification from the Minister on that point.

No debate of the provisions of this unusual Bill would be complete without looking at the huge scope of powers to make exemptions under part 1, particularly the ability to make exemptions for the purposes of innovation. As we know, part 1 allows for exemption from any requirement in education legislation. In Committee, we clarified the fact that the provisions to make an exemption from the requirements of education legislation are self-embracing—they include measures in the Bill. I therefore urge the Minister to consider in what circumstances a school may seek to deviate from the regulations provided for under Government amendment (a). Is he prepared to give a clear and definite answer this evening about whether he would exclude exemptions for the purposes of innovation from measures on parents meetings, or are there circumstances in which he would be prepared to contemplate allowing a school to make its own amendments to the regulations?

Finally, throughout the progress of the Bill, there has been agreement between Members on both sides of the House about reducing the burden of regulation on schools. I welcome the fact that at this late stage in consideration of the Bill, Ministers are prepared to accept that there is room for movement and scope for relaxation of the law. We can therefore make progress on removing an irksome, if minor, aspect of regulation that impinges on schools. I welcome the extent to which the Government have changed their position, but I wish that the problem could have been dealt with earlier, as clearing it up would have saved us and another place time.

Chris Mole (Labour, Ipswich)

I, too, welcome the reduction in the prescriptive arrangements for annual parents meetings. The hon. Member for Altrincham and Sale, West (Mr. Brady) asked whether I had met any head teachers recently. I was a governor until just after my election at the beginning of this year, which is pertinent to our debate because, like many governors up and down the country, I have spent many happy evenings sitting with my colleagues, consuming small mountains of peanuts, Twiglets and cheese and small lakes of wine and coffee as we waited for parents to come to meetings, the agendas for which were prescribed under the previous Government, as the Opposition pointed out.

That was a dispiriting experience for my governor colleagues. We have talked about the challenge of recruiting and retaining teachers, but there also remains a challenge about recruiting and retaining school governors. Dry, prescriptive agendas for things like annual parents meetings tend to put governors off. Occasionally, however, it is right that there should be an opportunity for governors to hear parents' voices. When, under the previous Government, the school where I was last a governor wanted, for sensible budgetary reasons, to change the number of days of swimming that it could offer during the year, a sizeable number of parents managed to come and register their concerns.

George Osborne (Conservative, Tatton)

The hon. Gentleman's experience as a governor is illuminating. Could he throw some light on his point about the retention of governors by explaining why he ceased to be a governor?

Chris Mole (Labour, Ipswich)

When I became MP for Ipswich, I did not believe that I would have enough time in my constituency to attend governors meetings. I should be interested to know how many Members retain such a role and believe that they do it justice.

The annual parents meeting provides an opportunity for parents to raise issues with governors. I believe that my hon. Friend the Minister has said that the framework introduced by the previous Government was carried over into the Bill, but accepts that it should be looked at again, thus giving schools a welcome flexibility on things like school plays, cheese and wine evenings and fairs or any opportunity that allows the schools to bring parents in and hear their views.

Graham Brady (Conservative, Altrincham and Sale West)

My understanding was that the Minister was concerned that schools should not count a school play, sports day or cheese and wine evening as the annual meeting.

Chris Mole (Labour, Ipswich)

I did not hear the Minister say that, nor was I suggesting that he did. We want such events to provide an opportunity for the annual parents meeting to be held at the same time. My understanding is that such an arrangement may have been prescriptively precluded by the previous framework.

Andrew Turner (Conservative, Isle of Wight)

Does the hon. Gentleman accept that although the framework may preclude holding the annual parents meeting at the same time as a play, it does not preclude holding it before or after a play, or before or after a social event? Many governors, governing bodies and head teachers have exercised considerable ingenuity in trying to attract parents to annual meetings by running them alongside, or at the beginning or end of, other functions.

Chris Mole (Labour, Ipswich)

The hon. Member for Tatton (Mr. Osborne) asked what interests school governors in remaining school governors. I suggest that they are motivated by the chance to raise standards and improve opportunities for the children in the school, not by the challenge of finding creative ways of circumnavigating the prescriptive legislation introduced a number of years ago by the Government whom the hon. Member for Isle of Wight (Mr. Turner) and his hon. Friends supported.

I welcome the Minister's suggestion that he will look for ways of giving schools new flexibility to strengthen the partnership between parents and governors. We all know that the most successful schools are the ones where there is that tripartite, if not a quadripartite, partnership, primarily between heads, governors and parents, but also with the local education authority. I welcome the proposals.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

We on the Liberal Democrat Benches wholeheartedly support the amendment. We consider it a sensible compromise that takes us forward. On the previous set of amendments, we discussed the need to get rid of bureaucracy. The current arrangements are a classic example; they clearly have not worked and need to go.

I had to organise a set of annual parents meetings, and I did so with great dread. I remember that in one round of parents meetings in 1996 in Leeds, the average number of parents who came was 10, and in some cases, we did not get a single parent attending the annual parents meeting, so I welcome the changes. However, they do not remove one of the great challenges facing all of us: how do we engage parents in the schools?

The hon. Member for Ipswich (Mr. Mole) made a number of references to the prescriptive nature of the previous Conservative Government. I believe that the existing provisions were a genuine attempt to engage parents in what was happening in school, but it did not work. My worry is that we are in danger of saying, "Phew! That's that out of the way. Let's fall back and not engage our parents." One of the sadnesses, to me, is that whenever we have formal meetings with parents, it is usually because there is a crisis over the swimming or over something that has occurred because of an Ofsted report.

I am reminded that when I was recently in the United States, in North Carolina, the head of one school was talking about parents meetings and said about public meetings, "Few people ever come with affirmation in their minds." There is some truth in that. We need to encourage parents to come into school with affirmation and with questioning in their mind.

I support subsection (3) and we look forward to those regulations. Will the Minister give the House a guarantee that he will consider the annual report to parents? The requirements for that are incredibly prescriptive. I can remember the first year that I did an annual report to parents. I covered all that the Government said we had to do, and it ran to about 15 pages. When I started to condense it, it became a meaningless document, rather like an "In Touch" leaflet from the Conservatives. I ask the Minister to include—possibly when the matter returns to the House of Lords—a simple additional subsection deregulating the annual report to parents. We welcome the initiative.

Andrew Turner (Conservative, Isle of Wight)

I, too, support the broad thrust of the Government's proposal in respect of annual parents meetings. It is important not to allow the hon. Member for Harrogate and Knaresborough (Mr. Willis) to fail to take credit where credit is due. In my experience, an annual parents meeting that is badly attended is a sign of a well run school, and a sign that parents in general are happy with the way in which the school is being managed, and with the way in which the governors and head teacher are conducting affairs.

Stephen Twigg (Labour, Enfield, Southgate)

Not necessarily.

Andrew Turner (Conservative, Isle of Wight)

I notice that hon. Members on the Government Benches shake their heads at that assertion. I hope that they do not wish to condemn the performance of the hon. Member for Harrogate and Knaresborough in his previous incarnation. I accept that on occasions it is difficult to provide the open and welcoming atmosphere, or perhaps schools are less successful at providing the open and welcoming atmosphere that they should provide to encourage parents to attend the annual parents meeting. On those occasions, I am sure that a little lubrication of the kind referred to by the hon. Member for Ipswich (Mr. Mole)—or even a lake of lubrication—may be helpful.

The thrust of the Government's amendment is right. However, I echo the remark of my hon. Friend the Member for Altrincham and Sale, West about the possibility of a back-up. If the Government decided to remove all requirements for the governors to hold a parents meeting annually, perhaps they would consider a back-up provision enabling parents to require such a meeting to be held if they so wished. I can think of certain circumstances in which the Government might consider that appropriate, especially in the case of the exercise of powers to suspend the statutory requirements in clause 2.

If the governors were, for example, seeking the Secretary of State's approval to suspend the statutory requirement that prevents them from charging for certain school functions, that might be a matter on which parents should be empowered to call a meeting. Alternatively, the Government might set that down as an exemption of a governing body from the requirement to call an annual parents meeting.

It is important to recognise that we have a mixed economy of schools, not only in terms of the huge—and, indeed, burgeoning—number of different types of school that the Government propose, some of which reflect rather well on what went on between 1988 and 1997, but in terms of the amount of choice that parents have. Frequently, my suggestion that Government and local education authorities should allow parents greater choice has been countered by the assertion that if choice cannot be provided in rural areas, it is wrong for it to be provided in urban areas. That is tantamount to saying that because we cannot provide choice everywhere, we should provide choice nowhere.

I do not take that view at all. Indeed, I should have thought that where there is less choice, there needs to be marginally more safeguards and more prescription, but where there is great choice, that is exactly the sort of condition in which there needs to be less prescription and fewer safeguards, because parents have the safeguards in their own hands. They can choose schools of different ethos, different appearance—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. May I remind the hon. Gentleman of the amendment that we are discussing? He seems to be going rather wide of it.

Andrew Turner (Conservative, Isle of Wight)

Indeed, Madam Deputy Speaker; I am grateful for your guidance. One of the bases on which such choice may be exercised is whether a school decides of its own volition to hold an annual parents meeting.

I, too, support the broad thrust of the amendment, but I am interested to know whether a change of the sort that it proposes would have to lead to the promulgation of a new set of regulations or whether existing regulations could be cross-applied. In the context of the previous amendment, we might need to consider whether consultation on the new regulations would in itself place a new burden on teachers, heads and governors.

David Miliband (Labour, South Shields)

This has been rather a good debate and I shall put aside the voluminous facts and figures that I have been given to help me to rebut the outrageous claims of the hon. Member for Altrincham and Sale, West (Mr. Brady) about the desultory nature of the Committee stage. I shall put them aside in the interests of the new co-operative spirit that is pervading our discussion.

What we are talking about is getting the right balance between encouraging all governing bodies to have a genuine partnership with their parent communities and regulation that is "irksome"—a word used by the hon. Member for Altrincham and Sale, West that I want to return to later. The Government have acknowledged that annual parents meetings have been over-regulated in the past and have genuinely listened to the concerns expressed about meetings. We think that we have come up with a workable solution by deregulating some processes and procedures and limiting the bureaucracy associated with the meetings.

The amendment is an example of where the Government's much-maligned approach in the Bill may serve a purpose, as it gives us scope to go further in future in relieving more schools of the duty to hold meetings where they have already given parents the opportunity to have their say. That will benefit schools, while ensuring that we retain the essential right of parents to question the governing body and the head teacher about the way in which their child's school is run. That is why I return to the notion of balance. We want to keep a situation in which parents have some weapons in their armoury to ensure that accountability is maintained.

The hon. Member for Altrincham and Sale, West took us back to the happy days of his amendment that was never discussed in January and February and to his presumption of not having a meeting. Despite my new role, something in me thinks that introducing legislation not to do something or with a presumption that something will not be done is a rather backward way of doing things. We are trying to express our presumption that school governing bodies should have a genuine partnership with their parenting communities, and we want to give them different ways of giving effect to that intention. He may come to think that his use of the word "irksome" in relation to parental meetings may be slightly over the top. There are many examples of parental meetings that work well and we should not denigrate the efforts that go into making them a success and a useful part of parent-governor dialogue.

Graham Brady (Conservative, Altrincham and Sale West)

First, I am sure that the Minister will agree that a requirement to hold a parents meeting may appear irksome to a school in the circumstances to which the hon. Member for Harrogate and Knaresborough (Mr. Willis) referred, in which no parent attends the meeting. The regulation may certainly be irksome in that context. Secondly, he dealt only with the first half of the amendment that was never moved—the presumption that there would not ordinarily be a parents meeting. May I ask him for his thoughts on the second part, however, and the idea of a positive mechanism in which a requisite number of parents would have to ask for such a meeting?

David Miliband (Labour, South Shields)

The hon. Gentleman anticipates me. If he will forgive me, I shall come to that point in a few moments.

The hon. Gentleman asked about the criteria for exempting schools from the requirement to hold a parents meeting. The overriding criterion must be that there is evidence to show that a genuine partnership exists between the governing body and the parental community. There is a need to prove that that relationship exists. I am in danger of skiing off-piste, so I must be slightly careful, but I shall give some examples of what might count as evidence of genuine partnership. There might be year-group sessions in which parents from different years are brought together to discuss provision for a particular year group. When a school is trying to achieve serious dialogue with parents in different year groups, it would seem odd subsequently to force a great gathering of the whole school. That is just one example that springs to mind. Different schools may organise different patterns of meetings. There may be discussion forums in which parents are brought together to discuss different aspects of the school's policy.

It may also be worth our while to think about cases in which the governors' attempts to hold meetings have not been successful. Perhaps we need to think about whether that indicates that the governors are not trying hard enough or not offering the right sort of wine and cheese—or pie and peas in my part of the world—but it may also be evidence to suggest that such meetings are not an appropriate way of achieving the sort of discussion and dialogue that we want.

In terms of the overriding criterion of partnership, but a keenness to find ways of achieving it that are appropriate to the school, I should like to refer to the notion of the trigger mechanism mentioned by the hon. Member for Altrincham and Sale, West both today and in his amendment. If we are convinced that our overriding criterion of partnership is fulfilled—it must be evident before exemption is given—the trigger mechanism will not be necessary. If there is genuine partnership, it will be the reason why there does not have to be an annual meeting. Layering a new load of bureaucracy on top by introducing a trigger mechanism is over-egging the pudding.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

rose—

David Miliband (Labour, South Shields)

I am about to come to the hon. Gentleman's point about annual reports, which I find very exciting.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am delighted that I have been able to excite the Minister. Before he leaves the trigger mechanism, may I ask him to think very carefully before introducing such a provision? A trigger mechanism that can be invoked by 10 parents may cause a real problem, especially in schools where groups of militant parents have an axe to grind as regards a particular teacher.

David Miliband (Labour, South Shields)

I apologise for not articulating my point clearly enough. We do not propose to introduce a trigger mechanism. [Interruption.] I assure the hon. Gentleman that when I say that we do not intend to do it, that means that we do not intend to do it. We are in happy agreement in that respect.

The hon. Member for Isle of Wight (Mr. Turner) urged us to trust markets rather than dialogue as the answer to the need for proper links between governing bodies and parents, but one cannot rely on parental choice alone to provide the sort of engagement that we are seeking to promote. It is an important part of the equation, but the right to exercise a voice, as well as a choice, is an important part of the schooling process, and we should welcome the chance for parents to have a serious and deep involvement in their children's education. I would be very wary of pretending that markets can substitute for that dialogue.

I conclude with the exciting point about annual reports. If the word "irksome" can be applied to parents meetings, for many schools the annual report requirements are indeed irksome. My hon. Friend the Member for Ipswich (Mr. Mole) hinted at that when he suggested using the provision and the regulations that will follow it to think broadly about how we can achieve the right sort of light-touch involvement from the centre. I have glad tidings for the House—the Bill already provides an opportunity to deregulate annual reports. That is not a birthday or Christmas present, but merely continuing evidence of the Government's serious commitment to deregulation for which the House affirmed its support only half an hour ago. That power to deregulate annual reports is the merit of the approach that we have taken in moving the detail of the Bill to regulations. I must provide some context for my glad tidings. Hon. Members will have to agree to pass regulations to achieve the deregulation of annual reports that has gained support across the House.

I assure the hon. Member for Harrogate and Knaresborough that we want to consider the structure of annual reports in terms of what is required, when it is required and how they are required to be written. We can try to ensure that that accountability operates without in any way undermining a school's accountability to its parent community.

Chris Mole (Labour, Ipswich)

If my hon. Friend were to take that path, it would be another factor that would aid the recruitment and retention of school governors.

David Miliband (Labour, South Shields)

We all owe a debt to our school governors, and we want to make their contribution as productive as possible. Let us consider annual reports, but let us not, when the time comes, score points against each other about the regulation that may be required to achieve that important step forward.

Lords amendment disagreed to.

Government amendment (a) in lieu agreed to.

Clause 41 — Schools forums

David Miliband (Labour, South Shields)

I beg to move that this House disagrees with the Lords in the said amendment.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to discuss Government amendments (b), (c) and (a) to the words so restored to the Bill.

David Miliband (Labour, South Shields)

Collaboration between schools and LEAs is an integral part of the new funding system, and we want that partnership to be effective throughout the country. The forums that we are about to consider put that principle into practice. I hope hon. Members will forgive me if I dally slightly longer than normal to explain the Government's approach fully.

Our debates on the Bill have not shifted our perspective that forums have an important role under the new regime. We have always said that some LEAs have effective consultation arrangements on funding matters. However, that is by no means the case in every authority. Clause 41 provides a real opportunity to ensure that schools in every area have a voice on a range of matters that are directly relevant to school funding. We are in the era of the self-managed school, where the delegation of school funding has greatly increased. Given that landscape, it is only right that local schools have the opportunity to articulate views on financial matters that affect them, in partnership with their LEAs.

In considering the attempt to remove schools forums from the Bill, we have the benefit of the consultation exercise that we launched in May. It ended last month and we have been able to consider the results, which I should like to report. There were a little under 200 responses in the period for reply. They showed general support for the concept behind schools forums: partnership and consultation on managing the schools budget, which clause 39 would create. We therefore believe that we were right to include schools forums in the Bill and to persist with them. As one school said,

"the establishment of a schools forum on a statutory basis is absolutely necessary as a part of the new framework of school funding and it would be a major breach of faith if the proposals were to be dropped."

Andrew Turner (Conservative, Isle of Wight)

The Minister said that 200 people responded. How many were consulted?

David Miliband (Labour, South Shields)

I do not know the figure off the top of my head, but I shall intervene later to provide it or include it in my winding-up speech.

The National Assembly for Wales strongly backs schools forums. It set out its proposals for them in "The Learning Country", the policy paper that it published last year.

We have also received strong backing for forums from bodies such as the National Association of Head Teachers, the Secondary Heads Association, the National Governors Council and other schools organisations. I shall quote an extract from a letter that we recently received from the SHA. It states that

"the overwhelming majority of our Council believes that the Schools Forum proposal should go ahead and we very much hope it does not get lost in the parliamentary process".

The Foundation and Voluntary Aided Schools Association wrote:

"We do see these as a very significant step towards bringing informed professional judgements to bear on local LEA funding . . . we have tried to get across . . . how strongly we feel on this."

Debate on schools forums in the House and in another place has been about two main issues—the way in which forums are to be constituted, and their functions. We have tried to ensure that authorities are not required to change arrangements that work well and are designed to establish proper dialogue between schools and LEAs over the allocation of funding.

We want to tackle practice that does not work well and reinforce rather than disturb good practice. A dialogue between an LEA and its schools on the management of the schools budget is essential, and there will be different ways of achieving that. However, forums have been identified as an important factor in facilitating a mutual understanding of budget management. Examples that have been brought to our notice include the Bath and North-East Somerset LEA's school budget forum; Croydon LEA's leadership groups; Hampshire's standing conferences for head teachers, and the forum established by Telford and Wrekin LEA. We want such local arrangements to be able to continue with little or no change, and other LEAs to be able to design their schools forums to evolve out of bodies such as head teacher consultative groups.

Our amendments therefore propose much greater flexibility. There will be local flexibility about the balance between head teacher and governor representatives, and the size and method of selecting school members. Elected members of the LEA will be allowed to join forums. The Learning and Skills Council will have only observer status. The quorum requirement will be relaxed. Costs will be charged to the schools budget, but detailed provisions will be for local decisions.

We will give guidance on a range of issues, but this will be non-statutory and for each LEA to use as it wishes. Those significant changes introduce much greater flexibility and will enable many LEAs to turn existing local groups into statutory forums. We believe that those changes are a substantial and positive response to consultation and show that we have listened to the concerns expressed during the Bill's passage.

We have also listened to what has been said about the functions of the schools forums. There was substantial agreement in the consultation responses that the functions that we envisaged for the forums—mainly consultative and advisory, as we have consistently emphasised—are on the right lines. This has confirmed our belief that the forums will provide a valuable resource for education authorities.

The consultation exercise also showed considerable support for a limited decision-taking function, although we recognise that many have expressed a fear that this function would be expanded over time. That was never our intention, but nor was the decision-making function ever the main point of school forums, which are intended primarily to strengthen local partnerships. We have, therefore, considered the matter further, and, in consequence, we have tabled the amendments now before the House, following extensive discussions in the House of Lords. The amendments emphasise the advisory and consultative role of the schools forums, and restrict the role of the forums so that advice and consultation will be the limit of their function. The forums' advisory role is much the same as before, involving the funding formula for schools, service contracts, specific issues such as the balance of special educational needs spending, and arrangements for education otherwise. There will, however, be no power to take financial decisions.

I have been passed a note giving me the answer to the question raised by the hon. Member for Isle of Wight. I am told that all LEAs were consulted, and about 90 responded. About 30 national organisations were consulted, 20 of which responded. The consultation was not sent specifically to schools. Perhaps my colleagues in the Department were worried about the bureaucracy that might be involved, and about the taunting that might come from Opposition Members about that. A summary of the consultation was placed on the Department for Education and Skills website.

I hope that the House will join me in rejecting the Lords amendment and agreeing to the Government amendments, which preserve the most important aspects of schools forums while limiting their role to advising LEAs.

Graham Brady (Conservative, Altrincham and Sale West)

I am pleased that the Government have taken some small steps to allay the fears that have been raised about the potential role of schools forums, although the Minister has not gone as far as we would wish. He spoke of the importance of collaboration and partnership between local education authorities and schools, but this is, in a sense, partnership by diktat. To move from a situation in which schools forums already operate perfectly successfully on a voluntary basis—as the Minister accepts—to one in which there is a statutory requirement to form and operate such forums, especially when there is a clearly recognised cost element to be borne, is to take a significant step.

If the Minister's interpretation of the Government amendments is accurate, and the role of the forums is to be purely advisory and consultative, it is even more surprising that we should need a measure to require their establishment. As the Minister knows, that was one of the principal bones of contention in another place. Less than a month ago, on 19 June, during an exchange on this issue in another place, the Minister, Baroness Ashton commented:

"As will become clear when we reach Clause 41, the schools forums are primarily advisory bodies."

That led to a brief misunderstanding, in which some Members thought that she had said "purely advisory", and she was obliged to clarify her comment, saying:

"My Lords, I am sorry; I said "primarily advisory" and not "purely advisory".—[Official Report, House of Lords, 19 June 2002; Vol. 636, c. 799.]

The Minister's statement that the forums are now to be purely advisory bodies is, therefore, an interesting and useful development. It sits ill, however, with the statutory nature of the forums.

The Minister's statement also sits ill with his remarks a few moments ago about the importance of deregulation, which he says that he accepts. This is clearly a regulatory measure that will increase the bureaucracy imposed on schools and local education authorities. It carries a cost, which is required by law, and according to statute will be placed squarely on the local education authority. The Minister prays in aid the consultation that ended in May. He says that the consultation largely supported the establishment of statutory schools forums in that there was support for consultation between LEAs and schools. It is easy for schools and LEAs to engage in such consultation at present, if there is support for it.

It is not surprising that many Members in the other place and in this House fear that the Government have other intentions that perhaps go beyond the limited aims that the Minister has set out. He spoke about the context of these proposals in the light of the self-managing nature of our schools. He said that the role of the forums would be mainly consultative, and that although the consultation showed that there was support for a limited decision- making power, the Government's amendments do not proceed in that direction.

The Government made some welcome concessions on Third Reading in the other place. They were prepared to set back the date of implementation of the schools forums provisions from 31 October to 15 January 2003. They allowed LEAs more discretion on how the schools forums should be constituted, and accepted that forums would have to include governors and head teachers, but the balance would be at the LEA's discretion and the method of election would be locally determined. The minimum size would be raised, but there would be no maximum. There would be a requirement to ensure exact proportionality between school phases. The Learning and Skills Council would have only observer status. The maximum percentage of non-schools members would be reduced from 25 to 20 per cent., and would include elected members of the LEA.

Even with those changes and concessions in the other place, there is still a nub of concern about the nature of schools forums. The reassurances that were given on the size of the forums and the balance between the different phases of education implicitly accept that there is a danger that schools forums may in practice not represent the interests of all schools or all phases of education in an area. There may be some room for the balance to be tilted between different schools or phases of education.

Many schools forums already operate successfully on a voluntary basis, and the Minister cited some of them. The Government say that their education policy is about shifting away from one-size-fits-all provision, so it is ironic that schools forums are moving in the other direction towards such a policy, with a new arrangement being imposed on schools and LEAs.

We also concerned about the constitutional implications of this provision with regard to responsibility for LEA expenditure. There is a wider debate about the best mechanism for funding schools, how much money should go directly to schools, whether that should be done through a formula or in the spending review, as has been discussed once again today, or whether it should be done on a direct payment basis, which cannot be relied on in the long term. Although the Chancellor today spoke about a three-year period, that is hardly a hard and fast guarantee of a funding stream that can be relied on and that enables schools to plan accordingly.

It is felt that bodies are being established which, even if they have no decision-making powers, will be there to advise Ministers on a massive power that they are taking to control local authority expenditure. Again, responsibility for the expenditure will rest with local education authorities, but control over it is being shifted—in the small matter of funding for the forums themselves, but more significantly in the context of the proposals to ring-fence schools budgets.

By what mechanism, and in what circumstances, will funds be moved from one budget to another? How do Ministers intend to exercise their sweeping new power over local authority budgets? How will it be decided whether schools budgets are inadequate or sufficient? What procedures will be used to assess the recommendations and advice given by schools forums? They will be able to express concerns about the way in which money is disbursed, which will be passed to Ministers to interpret.

The massive central power that Ministers are taking is a thread that runs through the Bill. The forums could almost be seen as a cloak beneath which Ministers can hide their actions.

Rob Marris (Labour, Wolverhampton South West)

I understand the hon. Gentleman's concern about the balance of power between local education authorities and Government here in Westminster. Would he care to tell the House how he would organise that balance, and how his party would like it to be struck between the centralisation that he sees as a thread running through the Bill and powers for LEAs? I am thinking about what was said earlier about local democracy by the right hon. Member for Wokingham (Mr. Redwood).

Graham Brady (Conservative, Altrincham and Sale West)

I should be delighted to do as the hon. Gentleman asks, but I fear that I cannot. He will probably not be surprised to learn that I feel very comfortable with the system of allowing schools the maximum resources, power, independence and freedom. I hope that, when we are in a position to consider the details of what we will say before the next general election, that view will feature strongly.

It should be noted that the Government are themselves engaged in a profound redefinition of what LEAs should do. I am not necessarily suggesting that the Government are being sneaky in any way, or trying to hide their true motives. A genuine debate is probably taking place in Government about the exact role of LEAs.

I was not taking a shorthand note, and I am sure that the Minister will forgive me if I misquote him slightly, but I think that when he appeared before the Select Committee recently, he made it very clear that LEAs should not be running schools—that their role should be strategic, and that they should take an overview. My hon. Friends and I feel comfortable with that. I suspect, however, that over the next couple of years the local education authority will become a very different animal from the one that we see today, or the one that we saw a year or two ago.

There is certainly potential for movement in a certain direction. We heard today about direct payments to schools. We are trying to be consensual and non-partisan this evening, but we could comment that those payments may only just cover employers' national insurance contributions, and that they may be eaten up by the funding for Curriculum 2000, which never reached many schools. We should also bear in mind the shortage of funds currently experienced by many schools with sixth forms because of the Learning and Skills Council settlements. None the less, there is an increasing tendency towards direct payment in the form of a cheque submitted to the head, thereby bypassing the LEA. At the same time, through the Bill, the Government are assuming the power directly to squeeze the LEA side of the budget.

We have various concerns, which in part relate to the point that was rightly raised about the exact role of LEAs and of individual schools, and about the extent to which we are moving in a particular direction. The Minister might want to add something to that debate. However, there is also the real constitutional concern about the divergence between where the responsibility lies for control and expenditure of public money through the local authority, and the increasing shift towards taking decisions about how that money is spent elsewhere—notably, by Ministers in the Department for Education and Skills.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

This was an important issue for Liberal Democrats in Committee—in the Commons and in the Lords—and it remains important as we consider the amendment before us. When the Minister introduced this group of amendments, he referred to those who support the recommendations of schools forums. The hon. Member for Isle of Wight (Mr. Turner) was right. I had intended to ask how many consultation documents were issued and how many replies were received. The Minister rightly pointed out that the organisations that were very supportive of schools forums—they supported them as described in the original Bill, not in its amended form—included the National Association of Head Teachers, the Secondary Heads Association and the National Association of Governors and Managers.

If I were still a practising head, I would be somewhat attracted to the concept of schools forums. I was often at odds with my local authority about my school's budget share, and during area meetings, local primary heads were at odds with me about how much money they were getting in comparison with the secondary school. In turn, the local special school argued that the primary and secondary schools were getting a greater share. It was very difficult to decide which of them was being disadvantaged. Of course, that is one reason why we elect local authorities, and why members of all political persuasions—and independents—put themselves up for election. Taking such decisions is a fundamental role of local authorities. I might disagree with certain of their decisions from time to time, but it is important that this House preserve local government's right to take decisions on matters for which it has a distinct responsibility—a point to which I shall return in due course.

The Minister mentioned Wales—an issue on which I, too, have been lobbied. The National Assembly for Wales's Green Paper, "The Learning Country", was a very good document. I urge the Minister to reconsider separating schools forums for Wales and for England, because under the legislation it is possible to do so.

I am pleased to see that the Welsh Minister is in his place to answer these deep questions, if he is still a Minister in that Department—[Interruption.] There have been so many changes recently that I did not know whether he was just sidling on to the Front Bench for a chat. One of the advantages of having an elected Assembly for Wales is that it has every right to say what it would like for its schools. The Minister is at leave to exclude schools forums for England and have them only for Wales. If that is what the Welsh Assembly wants, the Liberal Democrats would accept that, as is only right and proper.

I agree with the Minister and the hon. Member for Altrincham and Sale, West (Mr. Brady) about the need for better consultation with head teachers and governors about school budgets. That is said with due humility. The examples that the Minister gave of forums that have been organised by local authorities and their schools are shining examples of what can be done within existing regulations. We do not need a raft of new regulations and organisations to achieve what the Minister wants. We—and probably the Conservatives, too—would be happy to make it a duty on local authorities to consult head teachers and governors about school budgets and to publish the arrangements for so doing. That can be done within existing arrangements without all the paraphernalia of schools forums. That would protect the position of head teachers and governors.

The schools forums proposed in the Bill now are very different from those originally intended by the Government. The original intention was for schools forums that would have considerable powers, if the Secretary of State decided to give them those powers. The forums would have had direct powers over local authority budgets and how they were devolved to schools. I am delighted that the Minister has agreed that those powers are not necessary. However, if the bodies will be merely consultative, why are we going to such great lengths?

I also agree with the Government that schools should have a right to petition the Secretary of State if they feel that they are being disadvantaged. That is right. Head teachers and governors have a duty to ensure that the resources that they get meet their school's needs, especially now that they will be held more and more responsible for what happens.

Ivan Lewis (Labour, Bury South)

They will get more money.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

The Minister is so excited about the additional money. I am excited too, and I just wish that I was still leading my school as these resources were pouring in. However, I was in the House when the additional £19 billion was announced, but it turned out to be £6.1 billion.

Valerie Davey (Labour, Bristol West)

Will the hon. Gentleman give way on that point?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am sorry, but I do not want to be distracted on to that issue. I am sure that the hon. Lady is far too wise to lead me astray.

The hon. Member for Altrincham and Sale, West made a telling point. [Interruption.] It is always sad when Ministers cannot even be bothered to listen to the argument, because if they did they might be able to engage properly in the debate. The issue that the hon. Gentleman introduced was the new funding arrangements that are being proposed for schools and local authorities. If the budget for schools—the annual grant from the centre—is to be ring-fenced, with a separate budget for local authorities for running the LEAs, we will have a very different beast from the one that we have now. We have major reservations about the new arrangement, and it will call into question the enormous top-up that local authorities give to schools over and above the standard spending assessment that the Government say that they should spend on their schools.

The Minister knows—he is a highly intelligent young man—[Interruption.] Oh, so he's 37. Wonderful! Heavens above! He knows that in the past financial year local government spent £370 million over and above Government grant on schools in local authorities. It was not heads or governors who raised that money. Those people did not go before the electorate to win seats to sit on the council and to make decisions to raise council tax accordingly.

If we want to go down the road where everything is centrally controlled, where everything is decided in London and is simply imposed on schools and local authorities, I question whether local authorities have any future. On that basis, why do the Government not devolve all the money directly from the centre to each individual school? If that is what they want, let them say so. It seems that that is where we are going on this issue.

The jibe "one size fits all" has been made at our comprehensive system. It is a jibe that the Prime Minister, the Secretary of State and other Cabinet members constantly make at the public sector. The hon. Member for Altrincham and Sale, West is right to say that before us is an example of one size fits all that is being foisted on local authorities and schools irrespective of whether they want it.

Under the Learning and Skills Council arrangements and the Learning and Skills Act 2000, funding for 16 to 19-year-olds is now provided by the Learning and Skills Council—a wholly unelected quango. Yet there is no mention in the Bill, or in the 2000 Act, of the suggestion that there should be a schools forum for the Learning and Skills Council. It seems to me bizarre that a democratically elected body should have to have a schools forum to interject, but that a totally unelected quango can deal with £6 billion of taxpayers' money, without any say from elsewhere.

Graham Brady (Conservative, Altrincham and Sale West)

Does the hon. Gentleman agree that it is even more important a point given that the clear logic of the Government's position is to shift to a 14-to-19 phase of education and that the logical concomitant of that might be that the funding stream will go in the same direction, in which case even less of the money would go through the local authority route?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

That is an area of genuine discussion with the Government and something that we need to have out with them. In an intervention during a recent debate, the Under-Secretary of State for Education and Skills, the hon. Member for Bury, South (Mr. Lewis), gave a definite no to the question. However, the issue remains on the table. I ask the Minister to explain why the Learning and Skills Council does not have to consult schools even though it is determining their budgets; nor, indeed, does it have to consult a further education college.

Rob Marris (Labour, Wolverhampton South West)

Proposed section 47A(1) refers to a schools forum including other bodies if the authority—that is the local education authority—so determines. The words used are:

"representing such bodies as the authority may from time to time in accordance with regulations determine."

That means that there is an avenue available to address the real problem that the hon. Gentleman raises.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

I am glad that the hon. Gentleman raised that. If he reads the background notes, he will find that we are talking about a member of the Learning and Skills Council being allowed on the schools forum not as a voting member but as an observer. No doubt he or she will have nothing better to do than observe. I am making the point that the reverse does not apply. We have an unelected body that is responsible for £6 billion of taxpayers' money, to which none of the regulations that we are discussing apply. At the same time, we apparently have to have a new organisation for the local education authority. I want the Minister to reply to that issue.

The final point that I want to raise is the question of non-school members. That is an important issue on which the Minister can provide clarification. What was the reasoning, for instance, behind the reduction in the House of Lords from 25 per cent. to 20 per cent? It would be useful to put on record that rationale. Will the Minister explain why head teachers and governors are important school members, but teachers and support staff are non-school members? I find that insulting to teachers and non-teachers, who somehow do not even qualify, for the sake of the school forums, to be recognised as part of the school community. If a formula can be devised for the proportion of head teachers or governors on the school forum, surely the same courtesy can be extended to the very people who have an important interest in their schools—the teachers and support staff.

In an earlier debate, the hon. Member for Ipswich (Mr. Mole), who has left his place, raised the issue of the burdens on governors. Most governors apply to join a governing body or—shall we say—are encouraged to do so because they want to become involved with that particular school. That is their real interest. When they get there, they find that they have all sorts of other duties as well. Representing other schools is difficult both for individual governors and for individual head teachers. Head teachers, by definition, as chairmen of governors, have a real interest in their own school and community and have a duty to fight for the best interests of their school and their school community. It is difficult for them to make objective decisions about budgets et al, across a whole authority, without having all the other information. If we want governors to play a key role, as the schools forum legislation clearly envisages, we are putting yet another huge burden on school governors.

At the end of the day, this is an issue of local democracy. As a party, we are fundamentally supportive of the whole principle of local democracy and local decision making. We believe that the balance is just about right between increased autonomy and increased ability to innovate for schools, and local authorities that have become light-touch authorities. They are absolutely essential, however, in terms of making sure that all the machinery fits together. They have key roles to play. All we are saying to the Government is this: why invent a whole area of bureaucracy that is totally unnecessary, when, by simple regulation, using existing provisions, the Minister can have exactly what he wants—advisory bodies including governors and head teachers?

Andrew Turner (Conservative, Isle of Wight)

The reason why I asked the Minister how many people had responded to the consultation was that the Government's consultation record on the Bill, and on a whole range of issues related to it, is excellent, but that the response has been tiny. The Minister kindly gave me the figures. Of the 200 or so responses to the consultation, 90 were from LEAs and 20 from other bodies. I therefore assume that about 110, being from neither LEAs nor other bodies, were from schools. Those 110, of course, represent 110 of 25,000. A provision that was designed originally to give schools a key role in determining their budgets was, therefore, sufficiently popular for only 110 of those schools to respond to the Government, let alone say yes—the Minister did not tell me how many said yes.

Rather like the hon. Member for Harrogate and Knaresborough (Mr. Willis) and my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), I find it hard to understand what the clause's purpose is any more. I understood what its purpose was when the Bill left this House for the other place. The Government were then determined that schools should get it right when LEAs got it wrong, and that schools should be given the opportunity to get it wrong even if LEAs had got it right. The Government do not trust LEAs, and it does not matter what kind of LEAs they are. I am not a great fan of LEAs, but even the budgets for grant-maintained schools were set according to the formula—admittedly with knobs on—determined by LEAs.

When the Bill left this place, the clause enabled LEAs to be overtaken by schools in determining school budgets. As far as I can see from reading the proposed new section 45A in clause 39, schools could determine the size of the school budget as well as how it should be disposed. Schools could decide that money should be spent on schools rather than on old people's homes, transport or roads. That was the Government's absurd purpose, and their lordships rumbled it and got rid of clause 41.

The Government accepted the need to remove the worst bits of clause 41—the power of schools to override LEAs, which, for all their faults, are democratically elected—yet they still think it necessary to keep the rest of the absurd framework. They want to put into statute something that many LEAs do already and that many groups of schools could do even if their LEAs did not want them to. It is not unknown for head teachers and governors to meet outside the arrangement made by an LEA.

It is extraordinary that the Government think that the only things that happen are provided for by legislation or regulation. The Minister shakes his head, and I do not blame him. He is on the new side of the Labour party that does not believe that, but I regret to say that this clause confirms my belief that the Minister shares the Government's outlook that the only things that happen are determined by regulation and legislation. That is not the case, so there is no need for the statutory framework. Unlike the Government, I do not disagree to the Lords amendment.

David Miliband (Labour, South Shields)

I begin with a matter of no significance. The Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), wants the hon. Member for Harrogate and Knaresborough (Mr. Willis) to know that, although my hon. Friend may look like a year 12 in a suit, he is actually only a year 6. He is at least two years younger than me, so he does not want any aspersions cast in his direction. He is very much young Labour, and is coming up sharply alongside us.

I shall deal with three points in my response to this interesting debate: the purpose of the changes, the role of LEAs and the nature of the proposals. It is important to recognise that LEAs are already required to consult on the funding formula and on the scheme in the financial control document that they issue. The quality of the consultation that takes place as a result of the encouragement that is given to LEAs to form the partnership with schools that we want should be honoured in the breach as well as in the observance.

The amendment tries to remedy the problem that, in some LEAs, schools feel that they have insufficient chance to have a proper dialogue with the LEA about the organisation of a school's budget. The forums have received much support from organisations representing head teachers and schools. Notwithstanding what the hon. Member for Isle of Wight (Mr. Turner) said about the consultation, I was impressed by the seriousness of purpose demonstrated by the respondents. We are trying to solve the problem that some schools feel disempowered when the LEA formulates its plans.

On the role of the LEA, the Conservative party cannot decide whether it loves LEAs or loathes them. In the course of a single day, the hon. Member for Isle of Wight has gone from loving them to loathing them and back again. The right hon. Member for Wokingham (Mr. Redwood) made a passionate plea to get rid of them completely. The Government believe that LEAs have an important role, but it is not one of running schools. Their role is to support schools in school improvement, to provide the services that cannot be provided by schools alone and to support the drive to rise standards.

I must tell the Liberal Democrats that the role that the Government have set for LEAs is standing the test of time. It is a proper role that is designed to enhance what schools do, not to replace it.

John Redwood (Conservative, Wokingham)

The Minister misrepresents my view. I said nothing about the abolition of LEAs. However, how much will the forums cost? Why can he not find a better way to take account of the views of schools without creating more expensive bureaucracy?

David Miliband (Labour, South Shields)

I am sorry if I misrepresented the right hon. Gentleman's views. They seemed clear to me, but I am happy to hear that he, too, loves LEAs.

Costs depend on how LEAs decide to develop the forums, which are the mechanisms for consultation. LEAs that already have meetings with head teachers and others can simply extend those to include the forum. We have designed clause 41 to encourage LEAs to exercise maximum flexibility on how they undertake their responsibilities.

The hon. Member for Harrogate and Knaresborough asked who should be represented on the forums. That is a matter for local authorities. We are not trying to create a schools parliament and I would hesitate before inviting a cavalcade of people to come along to the meetings. However, if LEAs think that members of the local schooling community have important points to make, they can invite them to the forums. Heads and governors are referred to as key players because they control school budgets, and it is the purpose of the forums to discuss school budgets.

The hon. Gentleman mentioned the role of the learning and skills councils. It is significant that the Chancellor mentioned in his statement today the need to develop serious relationships at a local level between LSCs and the bodies with which they work. Part of that could involve discussing how the serious dialogue at LEA-school level can be extended to the LSC. The impression from my local experience is that in its first 18 months of operation, the LSC has made serious efforts to be a genuinely open and consultative body, although I take the hon. Gentleman's point that it is not democratically elected.

The Government amendments need to be set in the context of the arrangements that we are introducing to separate the budgets of schools and LEAs. Although LEAs will retain ultimate responsibility, it is time to give schools a sense of collective responsibility, in their partnership with an LEA, for the way in which their budgets are managed. What is the best way to dispose of resources? How are different priorities to be addressed and met? Is it better to spend money at school or LEA level to do best by pupils? Schools have an opinion on those questions and it should be heard clearly in LEAs.

We should not replace the mechanisms that work well, but we should put in place mechanisms if they are missing. The Lords amendment shows a distrust of schools, which is wrong. I hope that the House will vote against it and instead favour the Government amendments.

After Clause 62 — Academies

David Miliband (Labour, South Shields)

I beg to move, That this House agrees with the Lords in the said amendment.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this we may discuss Lords amendments Nos 35 and 36.

David Miliband (Labour, South Shields)

Lords amendment No. 37 gives effect to our intention to require academies, formerly known as city academies, to take part in statutory admission forums and have regard to their advice—an obligation that we have included in their funding agreements. We have already put in place robust arrangements to ensure that academies will be inclusive schools, and that they will agree their admission arrangements in partnership with local education authorities and other admissions authorities.

I shall spell out those arrangements for the benefit of the House. Academies are an integral part of the Government's wider programme to raise standards for all and transform secondary education, and are a new and distinctive kind of school. We are confident that they will offer great opportunities to pupils from some of the most disadvantaged communities in England. As independent schools, academies will have certain freedoms and will be different in certain ways from other maintained schools. We have ensured that they have the flexibility and the freedom that they need to respond to the demands and challenges that they will face. At the same time, we have made sure that, on certain key and fundamental points, they comply with requirements on maintained schools, most notably in relation to admissions.

First, on differences in freedom, academies will have the freedom to offer staff terms and conditions outside the teachers' pay and conditions document, and significant freedom to tailor the curriculum, its development and delivery to meet pupils' needs. There is also great flexibility in the make-up of the governing body of each academy.

Academies are part of the local schooling system, not separate from it, however. Let me explain. They must comply with admissions procedures and requirements as they apply to maintained schools. Their arrangements must be fair, transparent and objective. They have no more ability to select than do maintained schools. They must have independent panels to consider appeals against non-admission, in the same way as maintained schools. If they band by ability, those admitted must reflect the ability of those who apply.

We want to make sure that academies' involvement in their local admissions networks is transparent and strengthened. That is why we have tabled the amendment. I have already said that academies will be required by their funding arrangements to participate in forums. However, the amendment will put a statutory duty on admissions forums to promulgate their advice to academies as well as maintained schools within the forum's area. It will also put a statutory duty on the governing body of an academy to have regard to such advice, which will be in addition to its contractual duty to have such regard through its funding agreement.

Mandatory admissions forums will enable us further to improve the admissions process for parents and pupils. They will consider how well local admissions arrangements are working and they will broker agreements on difficult local issues, such as arrangements relating to challenging and vulnerable children. Well run admissions forums already consider such issues.

A typical forum—for example, the one operating in west Sussex—meets three times a year. At its first meeting of the year, the west Sussex forum considers information to parents, assessing how user-friendly and helpful admissions prospectuses and forms are to local parents. The later meetings review the admissions round, considering what went well and where there are problems to be resolved. From that, the forum might make recommendations for improving the process. In the course of looking at those issues, the forum might identify other issues that it will also address—for example, issues relating to applications outside the admissions round or to applications from neighbouring authorities.

It has always been our intention that academies should have regard to the advice of local admissions forums. The amendment simply makes that position clear and unmistakable. It is important to understand that this is not an impediment to the success of the academies programme. In fact, the academies programme is proving extremely popular with sponsors, LEAs and local communities. In all cases, all parties have agreed that the academy should be a member of the admissions forum and should have regard to its advice.

We have recently awarded development funding to a further five partnerships of LEAs and sponsors working to establish academies to serve their areas. Those new partnerships are in Bradford, Leeds, Liverpool, Northampton and Sandwell. Letters have been sent to the hon. Members for the constituencies concerned.

I draw attention, by way of example, to one of those projects, not because it is more important than others, but because it illustrates an important point. The Sandwell academy is the second to be sponsored by the Mercers Company and Thomas Telford online, joining the existing project in Walsall; so one of the CTCs is sponsoring not one, but two academies. Those sponsors understand and accept entirely that academies are different from CTCs. They are perfectly happy with the position. Sir Kevin Satchwell, head of Thomas Telford school, is the project manager for the new academies sponsored by the Mercers and by Thomas Telford. He has said that he is happy for the academies to be part of the admissions forum. Thus there are CTCs that wish to take advantage of the provisions in the Bill to convert into an academy.

John Redwood (Conservative, Wokingham)

Does the Minister think that grammar schools are a good thing or not?

David Miliband (Labour, South Shields)

As the right hon. Gentleman knows, we have always opposed the 11-plus. I am proud that I went to a comprehensive school. We should be proud of the success in doubling GCSE achievement at age 15 over the past 30 years. The Government are seeking to build on what comprehensive schools have achieved, not turn the clock back.

I was speaking about the wish of some CTCs to convert to academies. Djanogly CTC in Nottingham, for example, is making excellent progress with its plans to become an academy. At the same time, the new academy will replace the existing Forest school in Nottingham. I hope that these examples give some flavour of the popularity of the programme as it is, not as Opposition Members might wish it to be. I commend the amendments to the House.

Graham Brady (Conservative, Altrincham and Sale West)

At the outset of this brief exchange, perhaps I should respond in kind and say that I am proud to have been educated at a grammar school. Even though the Minister was not prepared to pay tribute to the excellent work done in our remaining grammar schools throughout the country, I certainly will. They are a vital part of the fabric of education in our country. It is instructive that the Minister was prepared to congratulate comprehensive schools, even though some of his colleagues believe that they have failed over the past 20 or 30 years, but he was not prepared similarly to congratulate excellent schools that happen to be selective in intake.

The Government are clearly somewhat confused in that regard. In the past few days, the Prime Minister, in comments quoted in the Daily Mail of 13 July, said that it was the "core mission" of the Government's three-year spending plan being unveiled today to spell the end of what he described as the

"one-size-fits-all comprehensive".

It appears that the Minister is perhaps the last defender of the one-size-fits-all comprehensive. Perhaps, since he has not been so close to the Prime Minister, they have been starting to diverge in policy. We also heard on 30 June that the Secretary of State had referred, in relation to Labour's mission to consign the bog-standard comprehensive—a phrase used by Mr. Alastair Campbell, not the right hon. Lady—to history, to getting rid of a

"one-size-fits-all culture"

of failing schools and schools that she would not touch "with a barge pole".

John Redwood (Conservative, Wokingham)

Does my hon. Friend agree that it is a lamentable failure on the part of Ministers not to answer a reasonable question and name the schools that they do not think that people should touch with a barge pole?

Graham Brady (Conservative, Altrincham and Sale West)

My right hon. Friend makes an important point. We are waiting to hear a response from Ministers. I am sure that, in due course, they will supply a list in response to the questions tabled by my hon. Friend the Member for Ashford (Mr. Green).

This is a classic case of our trying to help the Government to achieve what they say they want to do. They say that they believe in a more diverse schools sector, more autonomy for schools and less bureaucracy and red tape, but they are imposing a new statutory arrangement on all schools: the statutory admissions forum. In another place, my noble Friend Lady Blatch tried to amend the Bill to remove the whole paraphernalia of the admissions forums. She said:

"If admission forums are thought to be a good idea by schools in an area and a majority of schools deem that there should be a forum, they should determine whether to have one."—[Official Report, House of Lords, 3 July 2002; Vol. 637, c. 292.]

That is a very clear and permissive approach, which does not burden schools with unnecessary regulation and red tape. The Government are now placing a new statutory duty on schools, however, which gives the lie to everything that they say about believing in diversity, using a light touch and allowing maximum autonomy to schools.

Will the Minister explain exactly what the new legislative requirement will mean in practice? What does the new duty to "have regard" to the forums mean? Is it a duty to follow the instructions of the forum, or merely a fig leaf to allow Ministers to claim that city academies are covered, or a meaningful legal requirement? The Minister said that academies must be inclusive and that they are already required to be so. Indeed, in his opening remarks, he implied that the change was not necessary, before going on to advise the House to accept it. Is not the whole arrangement meaningless anyway, because the sweeping powers taken in part 1 give Ministers power to make exemptions from that legal requirement? Once again, even though city academies will be required to have regard to the views and advice of the admissions forum, that very requirement could be removed. The Minister is legislating to give himself power to remove the very restriction that he is trying to put in place.

The provision is a needless constraint on academies. The Opposition believe in city academies. We believe that they are an exciting opportunity and that they can be a new type of school that will free up innovation and autonomy in schools, provide a new direction, and act as a model that can be followed by other schools throughout the country. However, Ministers who claim to believe in the model of city academies and in freedom and autonomy for schools are contradicting everything they say that they believe by trying to restrict that freedom; they are obstructing schools that could go on to be beacons of excellence in our cities by trying to restrict them in a needless and counterproductive way.

We strongly urge the House to ensure that city academies are given the true freedom and autonomy that they need to go off and flourish in a thousand different ways that Ministers cannot even imagine. If Ministers really believe in autonomy for schools, this is the opportunity for them to prove it and to show that they are prepared to trust schools and give them the freedom to allow them to go out and succeed in our cities.

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

The hon. Gentleman protests too much. It is sad that people on the two Opposition Benches are finishing the evening on a discordant note. This is a key issue. We were delighted that Baroness Sharp was able to get the support of Baroness Ashton in getting the amendment through in another place, and I hope that it will be supported tonight.

The hon. Member for Altrincham and Sale, West (Mr. Brady) mixes up two matters. This is not about the future of academies, but about the future of who can go to those academies. The one thing that guarantees children of all backgrounds, creeds and colours fair access to our schools is a fair admissions policy. That is all we are trying to do, and that is why we support the Government. It may be true that CTCs flourished and were successful, and I do not want to decry their success at all. However, the reality is that Dixons city technology college in Bradford, which is a very successful school, has an arrangement for admitting children that differs from all the other schools in Bradford, and it therefore takes its pick before everybody else. Although it may have a fair and even distribution of students, that skews the whole process. If we are to have voluntary aided schools, more faith schools able to select their own admissions policies, and CTCs and academies with their own admissions policies—all with a different timetable—what is ultimately left for youngsters who had no one to advocate their case? I am delighted that an admissions forum is considering the admissions to all schools at the same time.

John Redwood (Conservative, Wokingham)

Will the hon. Gentleman give way?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

No, I want to finish in the remaining three minutes. Most heads and governors are happy to engage in that process.

John Redwood (Conservative, Wokingham)

rose—

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

All right—how can I resist?

John Redwood (Conservative, Wokingham)

Does the hon. Gentleman think that we should be able to select people who are better at, say, soccer or ballet to go to schools that specialise in those areas, or does he think that anyone should be able to go to those schools?

Phil Willis (Liberal Democrat, Harrogate and Knaresborough)

With respect, I do not want to re-run the School Standards and Framework Act 1998 argument. I agree that the process of selecting by aptitude is nonsense. Indeed, the right hon. Member for Charnwood (Mr. Dorrell) made that point at the time. How do children at that stage display an aptitude, rather than an ability, in something? However, I do not want to go down that road. This is about fairness in the admissions system, and I hope that the Government will continue to support the amendment.

David Miliband (Labour, South Shields)

It is revealing that in 10 minutes we can expose the fact that fair admissions is controversial even for the modern Conservative party. We are discussing the simple principle that we should have inclusive schooling in our communities and that the new city academies should take pupils from a wide range of abilities. Labour Members are happy to stand behind that principle.

Graham Brady (Conservative, Altrincham and Sale West)

One size fits all.

David Miliband (Labour, South Shields)

City academies are an innovation in our schooling system, and I am pleased to say that they will admit pupils from a wide range of abilities. He may be obsessed with the future of 164 grammar schools, but we are not. We are obsessed with the future of 3,500 secondary schools, which are the heart of secondary education. Today we heard from the Chancellor about the investment that will go into our schools over the next three years. We have heard about investment that Conservative Members oppose.

Tomorrow, the hon. Member for Altrincham and Sale, West will hear about reforms to our secondary education system to improve teaching, the quality of leadership and school structures, and to establish the partnerships with local communities that will ensure that teachers and head teachers are not on their own in raising standards but are supported by the wider community, including parents, businesses and universities. I commend that vision of secondary education to the House.