Education Bill

Public Bill Committee, 5 April 2011.

Clause 52

Iain Wright (Labour, Hartlepool)

I beg to move amendment 198, in clause 52, page 43, line 3, at beginning insert—

‘(A1) The Secretary of State must by regulations ensure the periodic inspection by the Chief Inspector of 16 to 19 Academies and Alternative provision Academies.’.

Good morning and welcome back to the Committee’s deliberations, Mr Walker. It is customary—with your permission and leniency—for me in this Committee to wish members of my family a happy birthday. May I deviate slightly and wish my hon. Friend the Member for Walthamstow a happy birthday? I hope that she has a very good day, and I cannot think of a better present for her than to sit in Committee with all of us for seven hours thinking about the Bill.

Amendment 198 requires an inspection of the new types of academies. What are the Minister’s intentions about the Ofsted inspection regime for those new academies? In particular, might any of them immediately fall into the new inspection category of exempt institutions, which he will recall that we discussed under clauses 39 and 41? If so, what safeguards are in place to ensure that quality is unaffected by the conversion to academy status? I hope that the Minister will respond to my concerns.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Welcome to our penultimate sitting on our final day, Mr Walker.

I am sympathetic to the concerns of the hon. Member for Hartlepool that the new types of academy that the Bill will create should be inspected by Ofsted. I am pleased to be able to reassure him that it has always been our intention that the two new types of academy will be inspected. We intend to use the delegated power in clause 52(2) to make the necessary legal provision.

For alternative provision academies, the situation is not entirely straightforward. Pupil referral units are inspected by Ofsted, but some alternative providers are not inspected due to their legal status or small size. Only those providers that have at least five full-time pupils on roll are required to be registered as an independent school and so inspected by Ofsted. In 2010, Ofsted was commissioned to review and report on whether all non-pupil referral unit alternative provision—that is, voluntary and private providers—should and could be inspected. Ofsted is due to report its findings this spring. In any case, I reassure hon. Members that we will ensure alternative provision academies are inspected in line with the position in the maintained sector, but we want to do so in the light of Ofsted’s findings.

As I set out in the policy statement that I circulated on last Wednesday—at 12.4 pm—and as I explained to hon. Members in our debate on Thursday on amendments to clause 51, I intend to provide the House with further detail on the consequential changes that we will make under clauses 51 and 52 at a later stage in the passage of the Bill.

The hon. Gentleman raised the issue of exemptions. If free schools are established, they will be inspected. As newly established free schools, they will not have been expected, so they will not be exempt. I hope that, with those few words, the hon. Gentleman will withdraw his amendment.

Iain Wright (Labour, Hartlepool)

I thank the Minister for his response. He has provided a degree of reassurance. I look forward to the imminent publication of Ofsted’s review. On that note, I beg to ask leave to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I beg to move amendment 197, in clause 52, page 43, leave out lines 5 to 11.

The amendment would remove the Henry VIII power. As the Minister will appreciate, in legislation such power should always be used sparingly and only in unavoidable and exceptional circumstances. If the amendment were not accepted, will the hon. Gentleman inform us what use the Government will make of the provisions? When does he anticipate such power being used? Our proposal is a probing amendment, and I hope he will be able to provide us with some reassurance.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I understand the hon. Gentleman’s desire to scrutinise closely the intentions behind the clause, and I hope that he will have found helpful the policy statement that I circulated last week. I wish to reassure him and members of the Committee that the power relates only to changes to legislation that are consequential to the creation of 16 to 19 and alternative provision academies. It will be used to make provision for what existing legislation is to apply, or not as appropriate, to each of the new types of academy. How the new educational institutions will fit into the existing legal framework is complex. We shall have to consider legislation relating to maintained schools, independent schools, sixth-form colleges, pupil referral units, schools generally and academies, which is why we need additional time to ensure that we get matters right.

The concerns expressed by the hon. Gentleman about the element of power that we are taking under the clause, to which he refers correctly as a Henry VIII clause, to enable us to amend primary legislation are entirely proper. To raise such concerns is something that I did when in opposition, too. It is only with reluctance that we have put such provisions in the Bill. However, I hope that such fears are allayed by the fact that we have made the exercise of the power subject to the affirmative procedure so that both Houses would be required to debate the specific proposals when they are brought forward.

As I said in Committee on Thursday, we are working on the consequential amendments and I will be happy in response to the worries raised by the hon. Gentleman to provide more detail of our proposals later during the passage of the Bill through the House. With those reassurances, I hope that the hon. Gentleman will withdraw the amendment.

Iain Wright (Labour, Hartlepool)

The Minister’s tone was very helpful and reassuring. The policy statement that he provided last week was helpful by putting on the record his intentions. His willingness to make sure that the affirmative procedure is used with regard to such aspects of the Bill is positive and welcome. I look forward to hearing further details as the Bill progresses through the House and, based on what he has said, I am reassured by his determination to make sure that the power will be limited to the specific aspect to which he referred. On that basis, I beg to ask leave to withdraw the amendment.

Clause 53

Kevin Brennan (Labour, Cardiff West)

I apologise for correcting your pronunciation of the word “schedule”, Mr Walker. It might help Hansard if I explain that the way to remember it is that the British love a shed, and that to pronounce it the other way is an Americanism.

John Hayes (Conservative, South Holland and The Deepings)

Presumably, on that basis, the Americans love a sked, whatever that is.

Kevin Brennan (Labour, Cardiff West)

I am not sure about that. Mr Walker, it is good to have you back in the Chair on this last day of our proceedings in Committee, before we take what we might call a pause at the end of the Committee stage. I do not know about you, Mr Walker, but often when I pause something I want to rewind a little, and perhaps that is what the Government should do with this Bill, as well as with the Health and Social Reform Bill.

Clause 53 states:

“Before making an Academy order…in respect of a foundation or voluntary school that has a foundation, the Secretary of State must consult—

(a) the trustees of the school,

(b) the person or persons by whom the foundation governors are appointed, and

(c) in the case of a school which has a religious character, the appropriate religious body.”

The clause also requires similar consultation in respect of any decision by the Secretary of State not to grant an academy order. As we are having a clause stand part debate, will the Minister explain to us the purpose of the clause?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am happy to do that. Clause 53 amends the Academies Act 2010 so that in the case of a foundation or voluntary school with a foundation that is underperforming and eligible for intervention, the Secretary of State will not issue an academy order unless he has consulted the appropriate religious body, in the case of schools designated with a religious character, along with the trustees and any person who appoints foundation governors in the case of any foundation or voluntary school. The Government recognise the enormous contribution that different religions have made to the education of children in this country. We believe that it is important that religious bodies such as the diocesan authorities are aware of concerns in relation to any of their schools that are consistently underperforming.

It will also be important and of course valuable to seek the trustees’ and religious authorities’ views on the best way to improve the schools, including whether an academy conversion is the right solution. In many cases, such bodies will have made a significant investment in the school—for example, by the provision of land and buildings—and it is therefore right that this investment and partnership in the provision of education is recognised and reflected in our processes. In many cases, the religious authority will own the land on which the school sits, and consultation and co-operation will therefore already be necessary if conversion is to be successful. We recognise that in all cases intervention will work best if it is done in collaboration, which is what the clause aims to reflect.

The clause also ensures that whenever the Secretary of State issues an academy order in respect of a foundation or voluntary school that has a foundation, he must give a copy of the order to the trustees of the school, the person appointing the foundation governors and, in the case of schools with religious character, the appropriate religious body. If the Secretary of State decides not to make an academy order following an application by any of those schools, he will also have to inform those parties of his decision and the reasons for it.

Good communication between trustees, religious authorities and the Government in respect of the schools is vital, which is why the clause ensures that those bodies receive notice of any academy orders that have been made for applications for conversion that have been rejected. It also allows diocesan boards of education and other religious authorities to continue to keep an informed strategic view across all their schools.

Clause 54

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 218, in clause 54, page 44, line 20, leave out

‘is converted into an Academy’

and insert

‘applies for an Academy Order’.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss amendment 219, in clause 54, page 44, leave out lines 23 to 25.

Kevin Brennan (Labour, Cardiff West)

The amendments seek to ensure that there is proper consultation prior to the application by a school to become an academy. As it stands, the clause would allow a school to convert to an academy without consulting the pupils’ parents, the local authority or other interested local groups. The NASUWT told us:

“these provisions enable parents, the local community and the publicly accountable local authority to be omitted entirely from the process of decision making to convert to an academy or to establish a free school.”

We need to understand the Minister’s thinking in introducing the clause. Does he not think that consultation with parents and local bodies is not only desirable, but crucial to making decisions that best reflect local needs? If he does not think it crucial, how will the Secretary of State be sufficiently well informed to make a right, proper, fair and reasonable decision when he grants an academy order?

Will the Minister explain why he is excluding parents? Again, their rights are being ignored in the Bill. They are being deprived of a voice in a crucial decision that affects their child. Is he concerned that local consultation might result in the opinion that a school should not convert to academy status?

The NUT told us:

“it is entirely illogical that consultation may take place after the Academy order has been made. Such an exercise would be wholly cynical and not ‘consultation’ in any meaningful and genuine sense of the word, but rather ‘information’ after the event.”

Given that some kind of consultation is required before a school enters into academy arrangements, how does the Schools Minister define the minimum level? With whom should the minimum level of consultation take place? For example, would it count as consultation under the provisions if a chair of governors spoke to a head teacher about plans while holding the pen in their hand to sign the academy agreement?

Again, the NUT told us that the clause

“contains an unwelcome and curious provision which would permit a proposed Academy provider, who clearly has a vested interest in the outcome, to carry out the consultation on conversion to academy status.”

What will the Minister do to mitigate those risks?

There are some serious concerns about the Government’s general attitude towards consultation, particularly with teachers, who are the employees of schools. That was highlighted in a letter that the Minister’s colleague, Lord Hill—another Education Minister—sent out before Christmas. He wrote to head teachers to warn about what would happen if they decided that, in their professional judgment, it would be a good idea and in the best interest of their school community to honour the national terms and conditions of members of staff on converting to academy status. He wrote:

“The existence of any such agreement will be a significant factor in the assessment the Secretary of State will make before deciding whether or not to enter into a funding agreement for an Academy.”

So much for head teachers’ professional freedom; they may think that something is in the best interests of their school, but then they get a warning shot across their bows from Lord Hill, who says that if they have that kind of relationship with their local staff, they can pretty much forget any application for academy status in the current round.

Richard Fuller (Conservative, Bedford)

The hon. Gentleman makes some interesting points about teachers’ participation in decisions to convert to an academy. We heard in the evidence sessions from the head of the NASUWT, Chris Keates, who felt that it was entirely appropriate for her member teachers to strike as part of the process of an academy conversion. Does the hon. Gentleman agree with that suggestion?

Kevin Brennan (Labour, Cardiff West)

Whether people carry out industrial action is a matter for them. Generally, it is not a good idea for teachers to go on strike for the obvious reason—the impact that has on pupils. The hon. Gentleman should understand, however, that if he were experiencing a change that could significantly affect his pay and conditions, he would be very interested in the outcome, and he would want to discuss it.

My point is that the Minister, Lord Hill, took the trouble to write to all head teachers. Believe it or not, that is something that a Minister cannot just do. There is a presumption in the Department against sending stuff out to head teachers. There was when I was a Minister there, and I am sure there still is. We do not want to burden head teachers with lots of letters and e-mails. There is a presumption in situ against doing that. Lord Hill took the trouble to breach that presumption and wrote to head teachers—people who are trusted to make their own professional judgment—to say “Do not, if it is your local choice to apply for academy status, under any circumstances enter into an agreement to honour national pay and conditions, because we will consider that a mark against you in the decision-making process.” It is a blot in a head teacher’s copy book if they decide to do that. At that moment, the Government’s mask slipped, and we saw how they regard professionals, including head teachers.

Returning to the amendments, there is serious concern about the Government’s attitude to consultation. There is the question of what the Government regard as the desirable minimum level of consultation. Does the minimum level include consulting parents? Does it include consulting other local interests, including a democratically elected local body? Perhaps the Minister can give us some clarity on that.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Clause 54 amends section 5 of the Academies Act 2010 to ensure that where a school is eligible for intervention, the consultation on becoming an academy can be carried out by people with whom the Secretary of State proposes to enter into academy arrangements, as an alternative to the school’s governing body. Consultation is facilitated in those circumstances.

Amendments 218 and 219 seek to achieve the same end: their aim is to ensure that consultation takes place before an application for an academy order is made, whereas currently consultation can take place at any point prior to conversion, either before or after the order, or the application for the order, is made. Members of the Committee will remember that we had significant debate about consultation in both Houses during the passage of the Academies Bill. I think that both the Government and the Opposition are agreed that a thorough, open and fair consultation is important; where we may differ is on our approaches to how that consultation should be captured in legislation and carried out in practice.

As we said during the passage of the Academies Bill—this is still our position—schools are in the best position to determine when and how that consultation should take place. Having the flexibility to consult before or after an academy order, or an application for an order, is made allows each school to determine when it has sufficient information on which to consult, and at what point during the process it wants to do so. We do not think that it is necessary to require consultation before applying for an academy order. Academy orders are simply a procedural milestone that make it possible for the Secretary of State to sign academy arrangements; they do not require that he goes on to do so. Consultation is important before a school becomes an academy, but a school becomes an academy when the funding agreement comes into effect, rather than when the academy order is issued. I hope I have reassured the hon. Member for Cardiff West on that issue.

The hon. Gentleman asked why parents are not included in the list of consultees. Parents are not excluded from those who should be consulted. We expect schools to consult them as a matter of course. We do not want to be prescriptive about who should be on the list. We want the consultation to be meaningful and to include all those who have an interest. Once we have a list of the groups that we think should be consulted, however, it raises the question of why other groups are not included. If the consultation is not appropriate, the Secretary of State will not allow conversion.

Kevin Brennan (Labour, Cardiff West)

Will the Minister outline the circumstances in which it would not be appropriate to consult parents?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

It is not for me to come up with such scenarios. As I said, I would expect parents to be consulted. The point is that if we start to list all the people whom we expect to be consulted, or if we list just parents and not other residents or groups that may have an interest, people will ask, “Why have those groups been omitted?” The important point is that the school determines whom it thinks it is appropriate to consult. The Secretary of State will look at the consultation process, and if he feels that it was not appropriate or adequate, he will simply not allow the conversion.

Kevin Brennan (Labour, Cardiff West)

The Minister cannot give us an example of when it would not be appropriate to consult parents, and he says that he would expect parents to be consulted. That is a pretty clear statement on the record, and it means that if parents are not consulted, the consultation may be challenged legally.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I would expect that to be the case anyway. What we are resisting in Committee today is the concept of establishing in legislation a list of who should be consulted. The moment we put a single group anywhere in the Bill or in regulations, we prompt the question of who is omitted, which will cause greater problems.

Richard Fuller (Conservative, Bedford)

I appreciate the Minister giving way. I urge him not to listen to the Siren voices from the Opposition Benches that wish him to put in a list of potential consultees. We are all aware of the previous Government’s understanding of what consultation meant —a thin veneer of supposed democratic accountability for decisions already made by bureaucracy. We are also aware that consultation can often be used by those who wish to impede the opportunity for people to set up a free school or an academy in their local community. If the Minister were to listen to those Siren voices and doled out a list of people who should be consulted, it would give ammunition to those who wished to stop the advance of educational opportunity for people in our country.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

My hon. Friend makes the point better than I could have done, so I am grateful to him for putting those comments on the record. I think I have covered all the points raised by the hon. Member for Cardiff West, and on that basis, I urge him to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I am conscious that we will come to the issue of parents in a later amendment, so I will not press the amendment to a vote. I will reflect on what the Minister said about the amendment, but I put on record that we remain extremely concerned about the Government’s attitude towards consultation; the hon. Member for Bedford sums up that attitude by saying that consultation is just another form of bureaucracy, rather than a form of democratic accountability. That is an unfortunate attitude, and one that will come back and bite the Government.

Richard Fuller (Conservative, Bedford)

I appreciate the hon. Gentleman giving way, and his parody of what I said. I was trying to make two points. First, under the previous Government, consultations too often turned into precisely what he was saying. Many of us feel that that was the case. Secondly, we want consultation to be meaningful, and not to be an impediment to progress. The Minister’s approach provides the flexibility to ensure that we get the best of both worlds.

Kevin Brennan (Labour, Cardiff West)

To coin a phrase, I think that that is just a thin veneer over the attitude that lies underneath, which is currently causing great problems for the Government on the issue of health; they believe that they can get away with bringing about major changes without proper consultation. Consultation is there not to put bureaucratic stones in the road, but to ensure that when reforms are brought in, there is if not complete consent, then an opportunity for everyone to express their view, and indeed occasionally enlighten the Government about the consequences of their reforms. I think the Government will learn that, once they have gone on a bit; indeed, they are currently learning it to their cost elsewhere, and may do so during the Bill’s proceedings. I beg to ask leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 220, in clause 54, page 44, line 29, at end insert—‘(aa) the local authority, or’.

The amendment is intended to ensure a role for local democracy in the form of the local council—I am looking at our Liberal Democrat colleagues, who are sitting in their little huddle, to see if that wakes them up a bit. It is about whether local authorities should have a role in our education system in the future. The amendment would ensure that the relevant local authority is able to consult before the conversion of a school that is eligible for intervention—a failing school—into an academy.

As was previously argued under clause 43, the Bill will lead to more schools being eligible for intervention and therefore to more schools being converted to academies. The local authority is responsible under part 4 of the Education and Inspections Act 2006 for various intervention measures, so it should have a duty to consult. As the clause stands, a school’s governing body must consult those that it thinks appropriate on the question of whether the school should convert into an academy. The amendment would also enable local authorities to consult those that it thinks are appropriate, and for the results to be considered in making the decision on whether the school should convert. It would open up the consultation to wider voices based on the local authority, which is the locally elected and democratically accountable body. I want to hear what the Minister’s thoughts are on the amendment and on the role of local authorities.

Graham Stuart (Conservative, Beverley and Holderness)

I want to raise the issue of selection in grammar schools that convert to academies. On 21 July 2010, the hon. Member for Altrincham and Sale West (Mr Brady) and the Minister debated the provisions of the then Academies Bill on the selection process of grammar schools choosing to become academies. I was pleased to note that, during that debate, the Minister made it clear that any grammar school that transferred to academy status would not be able to change its admissions policy under the terms of the funding agreement, without the support of a parental ballot. In some ways, it is an irony that parental ballots, which were so often seen as an enemy of grammar schools, turned out to be a protection. That goes to show how often provisions have unforeseen consequences and ones that were little envisaged by those who put them forward for legislation and raised them elsewhere.

Will the Minister please confirm that that is still the plan? Will he tell the Committee what steps have been taken to include protections in the funding agreements for new academies? Will he also provide any additional details on what protections will be put in place for grammar schools that become academies in future? If it is necessary and helpful, I will extend my remarks, but I think that the Minister is fully au fait with the issues, so I am happy to sit down and to hear from him.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Amendment 220, moved by the hon. Member for Cardiff West, seeks to add the local authority to the people who, under the clause, may consult on whether a maintained school that is eligible for intervention should be converted to academy status. We are all in agreement on the importance of requiring a school to consult before it converts. That consultation will usually be carried out by the governing body. Clause 54 addresses the need for an alternative option for a consultation where a school is eligible for intervention. In these underperforming schools, an academy solution may be proposed to turn the school’s performance around and we would not want governing bodies to be able to frustrate such a school improvement proposal by failing or refusing to consult. Clause 54 addresses this issue by ensuring that a consultation is still carried out, but that it can be alternatively conducted by the person entering the academy arrangements for the Secretary of State; in other words, the proposed sponsor. It seems logical that this alternative consultation duty should fall to the proposed sponsor. The sponsor will be heavily involved in a school’s potential future direction and it seems right that they should consult on the plans that they have proposed to turn a school around.

The amendment to include the local authority as an alternative body which can consult seems unnecessary. The conversion of a school to academy status provides schools with autonomy to raise standards and, in the case of underperforming schools, it is integral that a strong sponsor is put in place to ensure that these freedoms are used effectively to ensure improvement. Given the vital role that the sponsor will play in a sponsored academy, it seems right that the alternative consultation duty falls on the sponsor and not on the local authority, especially given that the consultation will be on a proposal to move the school from local authority control. As I have set out, it is important that we have an alternative to governing body consultation where a school is eligible for intervention so that the governing body cannot alone frustrate proposals to turn the school around. I am convinced, however, that the Secretary of State’s proposed sponsor is the best person to carry out this alternative consultation.

I turn to the intervention of my hon. Friend the Member for Beverley and Holderness regarding the exchange that took place between me and my hon. Friend the Member for Altrincham and Sale West during the passage of the Academies Act about grammar schools and grammar school ballots. The funding agreements of wholly selective grammar schools that convert to academies contain provisions which reflect the parental ballot system which applies if a grammar school is within the maintained sector and that has now been put into model funding agreements. I hope that that will reassure my hon. Friend that the commitments given during the passage of the Academies Act have been fulfilled.

Graham Stuart (Conservative, Beverley and Holderness)

During that exchange the Minister said,

“we will include the provisions in the funding agreements of academies”.

He has confirmed now that that has taken place. He went on to say:

“That will provide strong protection—as strong, in effect, as it would be if the measures were on the statute book.—[Official Report, 21 July 2010; Vol. 514, c. 462.]

Is that the case? What if another Government were to come to power that was less sympathetic on these issues? What would be the obstacles in the way of their changing the funding agreement and what real protections do we have compared to something put in a Bill such as the one we are debating here today?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Of course, a contractual agreement between the Secretary of State and an academy trust would be binding on future Governments. There is nothing to stop a future Government changing the model funding agreements and taking out such provisions. There would also be nothing to stop a future Government, particularly one peopled by Opposition Members, from abolishing selection altogether, but when a Labour Government was elected in 1997 that was a decision that they did not take. The 1998 Act prevented further extensions of selection, but it did not remove selection from the existing 164 grammar schools. That would be a political decision for a future Government and, of course, my hon. Friend is aware of the parliamentary convention that an existing Parliament cannot bind future Parliaments—they are sovereign to do what they wish, so long as they have the backing of the public to do it. There is a limit to what we can do to protect grammar schools from the vicissitudes of politics in generations to come, but I think that a binding contract between a Secretary of State and an academy trust is a very good protection.

Charles Walker (Conservative, Broxbourne)

Order. The debate is ranging extremely widely now. Can we move on?

Graham Stuart (Conservative, Beverley and Holderness)

I am extremely grateful to the Minister for that response. It still seems to me that, judging by the record so far of the new leader of the Labour Party and their reversion to the left, the reality recognised by the incoming Labour Government in 1997 is unlikely to be repeated were a Labour Government to be elected in future. Therefore it seems to me that every possible barrier should be put in the way. Putting something on the statute book would at least provide a clearer hurdle than being able to change funding agreements As we know, Governments can apply pressure through funding agreements. Will the Minister consider whether clause 54 could provide protection in the statute book and on the face of the Bill?

Charles Walker (Conservative, Broxbourne)

Order. Minister, we have ranged widely. Could you confine your response to the amendment we are debating?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Very well, Mr Walker. I believe that contractual arrangements are more difficult to change than legislation from a Government that has an overall majority. I have addressed all the comments raised by hon. Members and I hope, therefore, that the hon. Member for Cardiff West will withdraw his amendment.

Kevin Brennan (Labour, Cardiff West)

I am not entirely satisfied that the Minister understands why local authorities need to be involved with this. However, it is also subject to the next group of amendments, so with the permission of the Committee I beg leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 221, in clause 54, page 44, line 36, at end insert

‘including parents of registered pupils, registered pupils, school staff and the local authority.’

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss amendment 226, in clause 57, page 46, line 41, at end insert

‘but must include parents of registered pupils, registered pupils, staff of schools in the area of the proposed new educational institution and the local authority.’

Kevin Brennan (Labour, Cardiff West)

Amendment 221 concerns the issue of consultation. I will avoid repetition as much as possible, though it covers some of the ground we have already discussed.

The purpose of the amendment is to ensure that proper consultation takes place before a school governing body applies to become an academy. This clause should be improved, as a minimum, by requiring consultation with families, staff, pupils and the relevant local authority. The Minister admitted earlier that he would expect parents to be consulted before a school converted to an academy, although his conviction was not zealous enough for him to think that that should form part of the Bill.

Staff, pupils and the families of pupils have a manifest interest in the nature and future of their school. The local authority, which has important statutory responsibilities for the education of children in its area, and a much greater knowledge of local conditions than the Secretary of State, should also be consulted. It makes sense for it to be consulted before the Secretary of State makes his decision, rather than relying on the reports of civil servants. What further assurances can the Minister give the Committee about the nature of the consultation that will be required?

The Government’s “Coalition Programme for Government” states:

“We will promote decentralisation and democratic engagement, and we will end the era of top-down government by giving new powers to local councils,”—

it is not happening here, I am afraid—

“communities, neighbourhoods and individuals.”

Well, how about it? How about some power for councils, communities, neighbourhoods and individuals in this Bill, instead of powers being given only to the governing body and to head teachers? There is a broader interest in the future of a school in an area. Will the Minister respond to the amendment, perhaps by putting on the record that he will expect not only parents to be consulted, but also, for example, the democratically elected local council? There could also be consultation with school staff, rather than threatening letters to head teachers about discussing pay and conditions with staff. What does he have to say about that?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

The amendments list specific categories of people who must be consulted, such as

“parents of registered pupils, registered pupils, school staff and the local authority”

of the school concerned in a conversion and “parents of registered pupils” and “staff of the school” within the relevant area of a new or expanded provision. We agree that it is important to consult such groups, but specifying them in legislation would be only the start of putting in place a prescriptive list. It is hard to encompass all groups that might need to be consulted and, in the end, a prescriptive list might stifle a wider consultation that the governing body would otherwise have carried out.

Stella Creasy (Walthamstow) (Lab/Co-op) rose—

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Before I give way to the hon. Lady, may I wish her a happy birthday? I hope for her sake that she is still in her 20s.

Stella Creasy (Labour, Walthamstow)

That is just one of the many things about which the Minister is wrong. I thank him for his birthday wishes, and I hope that the rule “If it is your birthday, your amendments get accepted” will hold true.

Why does the Minister believe that such groups should not have a right to representation? To make sure that they are involved is another way to ensure that they will always be consulted. The amendments would not preclude including a broader group of people, but we would ensure that such people had a right to representation in consultations.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am putting forward the same argument. I am not saying that the consultation of people such as parents, pupils and staff is not important. In most cases, a consultation could not be deemed reasonable if it did not involve those who would be most affected by academy conversion. We are trying to resist having a prescriptive list because, inevitably, it would miss out some groups that, in certain circumstances, might be more important or as important as the groups that the hon. Lady wants listed under the Bill. That is why we will not accept the amendments and why we are resisting the concept of prescribing in detail who should be consulted. On that basis, I urge the hon. Member for Cardiff West to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

Under our proposal, the list would be not prescriptive but inclusive. Such groups should definitely be consulted, but if it was appropriate to consult the unspecified groups to which the Minister referred, the amendments would not proscribe that. They would not prevent schools from consulting others. All we are saying is that we want to make things absolutely clear in the Bill—not with a nod and wink in Committee. We want everyone to understand that parents, students, staff and local democratically elected council members—they are all the people who anyone reading the coalition agreement would think should be consulted—will be consulted during a conversion.

The Government’s position is curious because at times the Minister says that he does not want to prescribe things, yet I read in The Daily Telegraph today that pupils are being told to do up their top button and tie, so he can micro-manage by being as prescriptive as that. He should, however, encourage his Parliamentary Private Secretary to practice such behaviour sometimes, because he can often be seen, in his louche way, lounging around the precincts of the Palace of Westminster wearing no tie at all. I hope that the Minister will prescribe the appropriate dress.

There is an odd mixture under the Bill. It is pretty obvious to most people that we should consult parents, people working and studying in a school, and the people elected by the local community to represent them who have specific duties in respect of the school, but the Minister is not willing to prescribe such people under the Bill, although he will prescribe that school pupils should do up their top button and tie despite the fact that he finds it impossible to enforce such behaviour on his PPS. Our case has not been met by the Government, so I shall press the amendment to a Division.

Kevin Brennan (Labour, Cardiff West)

I simply wish to put on record that the clause is yet another example of the Government trying to deny parents their rights when important decisions are taken about their children’s education. If we tot them up at the end of our proceedings in Committee, we will find that the number of ways in which the Government are undermining parents’ rights in the Bill will be quite significant.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Schools are always asked to provide evidence of the consultation that they carry out on their proposals to convert. If officials or Ministers have real concerns about such consultation, including if it is thought that a school unreasonably fails to consult directly affected groups such as staff or parents, they would have the opportunity to question that before an academy conversion was approved. Parents are key to the success of an academy after conversion because they are the people who will decide whether to send their children to the academy, so it is of course in the interests of an academy to consult prior to conversion.

As for the hon. Gentleman’s other point, we are not prescribing in legislation that children should do up their top buttons. I have tried unsuccessfully to persuade my hon. Friend the Member for Grantham and Stamford to do up his top button, but I understand that the peer pressure on him is so great that he feels the need to conform to current trends.

Clause 55

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 222, in clause 55, page 45, line 7, after ‘regulations’, insert

‘but in any event is not less than half’.

The clause will allow schools that are part of a federation to become academies and for an academy order to be made even though a school remains part of the federation, and even though the whole federated governing body for the schools in the federation may be against that application. The amendment is designed to probe Ministers on the level of support required in a federation governing body before academy arrangements can be entered into. It would amend the clause so that no academy order should be made unless and until not less than half the governing body for the federated schools votes in favour of the proposal.

The White Paper said:

“we will…ensure that there is support for schools increasingly to collaborate through Academy chains and multi-school trusts and federations.”

The clause as it stands could give rise to a situation in which the whole federated governing body for the schools in the federation was against the application by one of the schools in the federation, but the Secretary of State could grant an academy order. Does the Minister believe that that might harm the trust and co-operation among schools, which should be the basis of any federation? A school that is part of a federation may use the provisions in the School Governance (Federations) (England) Regulations 2007 to leave the federation and thereafter apply to become an academy, so why is it necessary for the Minister to do what he is putting in place in the Bill? I will be grateful if he will enlighten us on those points.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Clause 55 will amend the Academies Act 2010 to enable a federated school to convert to academy status without requiring the agreement of the whole federated governing body. The amendment would require that at least half a federated governing body decided to apply for an academy order on behalf of a single school within a federation that wanted to convert to academy status.

We have already had the opportunity in Committee to discuss the impressive record of the academies programme, which has proved to be a genuine revolution in raising standards in schools throughout the country. I am proud of this Government’s work to extend the programme. As of 1 March, we have received 638 formal applications from schools wanting to convert, with more applications coming in every week. However, conversion to academy status is a significant step that should not be taken lightly. The hon. Member for Cardiff West is therefore rightly concerned that there should be proper consideration and that the decision-making process has appropriate rigour. We share that concern, which is why officials, Ministers and the Secretary of State will look particularly closely at the consultation that has taken place on such schools. However, we also wish to ensure that every eligible school has the opportunity to convert to become an academy.

At the moment, if one or more, but not all, of the schools in a federation wished to convert, a majority of all of the federation governors would need to agree to the conversion. In addition—and before the conversion—the school would need to go through a statutory process to leave the federation, and the local authority would have to set the school up with a new temporary governing body and new instruments of government. That process is unnecessarily bureaucratic, and it might result in schools that are willing and able to convert being unable to do so because of the contrary views of other schools in the federation. The changes in the Bill and subsequent regulations have the purpose of remedying that situation and to allow a group of governors representing a particular school to apply for academy status even if other schools do not wish to do so. We believe that school leaders recognise that federations work only with willing partners, and while we want to enable conversion of single federated schools through the clause, whatever the circumstances, we also believe that in many cases a majority of the full federation would be likely to support the conversion of a single school within it.

I circulated a policy statement last Wednesday setting out the detail of our proposals, but I will summarise them now. We propose to amend regulations so that the proportion of governors required to make a decision is proportionate to the number of schools in a federation. The group of governors would need to comprise at least three members, and it would also need to include at least half the governors who represent the school that wishes to leave the federation. By that we mean parent governors elected to represent the particular school, foundation governors appointed for that school, staff governors working at that school and the school’s head teacher, when he is a governor. That means that for a federation of two schools, at least half the federated governing body would be required to approve the application to convert, while for a federation of three schools, at least a third would be required and so on. Prescribing a minimum without taking into account the number of schools in a federation does not seem appropriate, which is why the Government have proposed this proportionate approach. It would not be the first time that an exception to the usual majority decision-making approach has been made in legislation. The School Organisation (Removal of Foundation, Reduction in Number of Foundation Governors and Ability of Foundation to Pay Debts) (England) Regulations 2007 enable a decision to remove a school’s foundation in certain specified circumstances to be made, in effect, by a minority of the governing body.

We want to help as many schools as possible to have access to the increased freedoms that come with academy status, but we also want it to be up to schools to decide for themselves. The provision supports the expansion of the academies programme by making the process for federated schools to convert to academy status easier so that more schools can benefit from academy freedoms.

I hope that I have answered the hon. Gentleman’s points and that he will therefore feel able to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I thank the Minister for his reply and for his note on the issue to which he referred.

I have a feeling that there could be occasions when the provision as set out in the Minister’s note and the Bill might be a source of ill-feeling locally if one school in a federation was considering converting to academy status. The amendment was probing, so I will not press it to a Division. The Minister rightly pointed out that our proposal would be a restrictive way of achieving its purpose.

I will think further on what the Minister has said and reflect on the note he provided to the Committee about the Government’s intentions. My concern is the possibility that such a mechanism might trigger local ill-feeling and that a minority interest locally could act in a way that was not conducive to the interests of all children in an area. However, I beg to ask leave to withdraw the amendment.

Clause 56

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 223, in clause 56, page 45, line 35, leave out ‘including’ and insert ‘excluding’.

The amendment is probing, to find out more about what the Government mean y this clause. It provides for rights and liabilities in relation to staff transferring to an academy, including a free school, from the predecessor school.

The Government’s intentions in this part of the Bill are not entirely clear. We recognise the importance of academy freedom, which the Labour Government introduced to raise standards in schools that needed to improve and as a targeted measure, if other things had failed to lift schools and enable children to reach their potential. It was a different and less diluted form of academy intervention than the Government are introducing across the board, but the purpose was to raise standards in schools that needed to improve. We support such flexibilities if required.

Teachers who transfer from predecessor schools replaced by an academy currently have their existing pay and condition entitlements protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006. Can the Minister confirm whether the Government’s intention is for TUPE arrangements to remain in place for all new academies? Unison told us in evidence:

“There is much concern at the unknown implications of the change of property transfer schemes into transfer schemes that cover staff.”

I would be grateful if the Minister could outline his intentions in the clause.

The NASUWT told us that

“the transfer of property, rights and liabilities to Academies divides the school from the community and potentially deprives the community of facilities and assets. It prevents the local authority from being able to plan strategically in the interests of all children and young people. This has far reaching implications for the public interest in that the Secretary of State can acquire land and assets for the purposes of an academy or free school or can equally choose to leave liabilities incurred by a converter school to be borne by the public purse and local tax payer”.

That is a wider point, but in his remarks will the Minister refer in particular to the TUPE arrangements and to what happens to staff?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Section 8 of the Academies Act 2010 ensures that the process of converting a maintained school to an academy cannot be frustrated by delays or disagreements on the part of the local authority or a governing body on the transfer of their property rights and liabilities. Clause 56 makes a minor amendment to that section, clarifying that such rights and liabilities include those rights and liabilities relating to staff. The hon. Member for Cardiff West referred to the briefing from the NASUWT, which made that point. I understand that that union and others have voiced a desire for clarity, so that they might understand the intentions of the clause and whether it will impinge on the rights of school staff. The hon. Gentleman’s amendment is helpful in enabling me to make it clear, publicly, that there will be no undermining of staff rights.

The hon. Gentleman asked in particular about TUPE. The clause does not change the legal position on rights of staff. The rights of staff, when transferring from the employment of a maintained school to an academy trust, are protected by TUPE regulations. That holds true whether or not a transfer scheme is put in place. A property transfer scheme may be necessary where the relevant bodies cannot reach agreement. The things that we expect to be transferred to the new academy trust may include classroom furniture, maintenance contracts and staff contracts. In making such a scheme, a Secretary of State would make a fair and reasonable assessment of the property rights and liabilities that should transfer to the academy trust and those that should remain with the local authority or governing body. That is the purpose of the clause and section 8 of the 2010 Act. I hope that I have been able to reassure the hon. Gentleman and members of the Committee on that point, particularly regarding TUPE rights. I hope that the hon. Gentleman will feel able to withdraw his amendment.

Kevin Brennan (Labour, Cardiff West)

I welcome what the Minister has said about TUPE, which, in a sense, just threw into further relief the bizarre comments of Lord Hill in his letter to head teachers on 15 December. I referred to it earlier. He said that any agreement by head teachers to respect pay and conditions of new staff in academies would be

“a significant factor in the assessment the Secretary of State will make before deciding whether or not to enter into a Funding Agreement for an Academy.”

In other words, head teachers have to respect TUPE in relation to existing staff. If they want to employ new staff, however, and have an agreement to employ new staff on the same basis as existing staff—because they think that would be good for staff relations, in the interest of the school and an all-round positive thing for the school when it converts to an academy—and if they come to that agreement with their staff’s representative associations, the Secretary of State would be minded to regard that as a negative factor in considering whether a school should apply for academy status. That sentence in Lord Hill’s letter clashes in a discordant way with the Minister’s point that TUPE, employment continuity and provision in law apply to staff who are transferring into a new academy. The amendment was probing. Having got that off my chest, I beg to ask leave to withdraw the amendment.

Clause 57

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 224, in clause 57, page 46, line 10, at end insert—

‘(1A) An “existing educational institution” must not be a “selective school” as defined in section 6(4) (definition of selective school).’.

The clause allows selective schools to become academies and to widen the age range of their intake. We want to understand whether the Minister is proposing that the state education system should be able significantly to extend selection to primary schools or, rather, to primary age pupils. If that is the case, it should not be entered into lightly and people will want to consider it much more fully.

The previous Secretary of State, my right hon. Friend the Member for Morley and Outwood (Ed Balls), raised that point as shadow Secretary of State during the passage of the Academies Bill. He described the potential ability of selective grammars to expand in that way as “a Tory Trojan horse” for the expansion of selection. I note that the Secretary of State has indicated that he favours the expansion of grammar schools—at least, that is how I interpret his remarks. An article in The Daily Telegraph last October stated that he had

“signalled to campaigners that existing grammars will be able to create more places but also, crucially, could be given permission to build new premises and start ‘satellite’ schools.”

In his exuberance at meeting grammar school campaigners, the Secretary of State made some highly significant points.

Will the Minister tell the Committee whether that is in fact what the Government intend by introducing the clause? We tabled the amendment—to restrict the ability of selective schools to become academies and to widen their age range when they do so—to find out whether that is possible under the clause and what the Government’s intentions are.

Dan Rogerson (Liberal Democrat, North Cornwall)

It is a pleasure to have you back in the Chair again on our final day in Committee, Mr Walker.

The hon. Member for Cardiff West has, as usual, moved his amendment in a cheerful and concise way. I always start off with a certain sympathy for some of the topics that he discusses, but by the end I have been persuaded not to follow his argument. I have to say that on this occasion it is absolutely right to have a discussion on the sensitivities around selection.

Although this may go slightly beyond the amendment, I hope that the Minister will reassure members of the coalition, who might certainly be less enthusiastic about any expansion of selection, that what is proposed is to ensure that all schools throughout the country have access to the same freedoms and that we will not see any change to admission procedures. That particularly applies in relation to the issue that we discussed earlier about the decision on whether selection is right for a local area and has the support of the local community. If a community has decided that that is not a pattern with which it is happy, schools from neighbouring areas might offer provision on a selective basis in that area. I hope that the Minister will be able to offer reassurance on those sorts of issues, either now or at a subsequent stage.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

We believe that the intention behind the amendment is to prevent the expansion of an existing selective school by an extension to its age range. The actual effect of it would be to prevent the Secretary of State assessing the impact on other local educational institutions of any academy or free school proposals that envisage new provision within an existing selective school—for example, proposals for new all-age provision that incorporated an existing grammar school. I am sure we all agree that we do not want to restrict the circumstances in which an assessment must be made of the impact of new provision on other educational institutions.

That is what his amendment does in practice, but I shall reply to the points that the hon. Member for Cardiff West raised about what it was intended to do. I shall respond to his concerns and to those of my hon. Friend the Member for North Cornwall by explaining the circumstances in which it will be possible to expand existing selective provision.

Under current legislation, which was introduced by the previous Government, grammar schools can expand in a number of ways. They, and other maintained schools, are free to determine their published admission number annually or publish statutory proposals to expand the school, either by extending age range or by expanding the overall size of existing year groups. In relation to statutory proposals, the presumption for approval by local decision makers that applies to successful and popular schools does not apply, as the hon. Gentleman will remember, to grammar school enlargement proposals. That does not mean that such proposals would not be carefully considered or be successful.

The Government’s general principle is that academies should not be prevented from taking any action that might be possible within the maintained sector, such as proposals to expand or increase their numbers—whether they are maintained comprehensives or maintained grammar schools. We believe that all good schools should be able to expand where there is demand. Nevertheless, as with the maintained sector, we do not believe that there should be new provision for selection by ability, and we do not intend to change that. All good and popular schools should be able to expand, but that does not extend to selective schools extending selection into the primary age range.

Kevin Brennan (Labour, Cardiff West)

That is the issue in question. I appreciate the Minister’s point about the technical nature of the amendment, but I want to be clear about his last point. Is it the case that grammar schools cannot legally extend downwards to primary-age pupils, or is the Minister simply stating that he thinks they should not do so if they convert to academy status?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

My understanding is that schools can expand down the age range, but the issue is selection, which they cannot introduce into primary education, even if the school becomes part of a larger school.

Kevin Brennan (Labour, Cardiff West)

As the Minister will appreciate, I am trying to be helpful to him in the spirit of understanding his need for inspiration to arrive. To be clear, I am certainly not against the concept of all-age schools, because there are some very good ones, including those that I visited as a Minister. However, the Labour party and I are against selection being extended down to primary age pupils. It would be helpful if he were able to say that he and the Government are against that and that such an extension will not be possible under any provisions in the Bill.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Yes, I am able to say that. It is certainly not our policy for selection to be introduced into primary education. The legal position is as I have explained. Our policy is not to allow grammar schools to expand down to the primary sector and they will not be legally permitted to be selective lower down the age range. I think that I have addressed all the issues that have been raised by the hon. Gentleman and by my hon. Friend the Member for North Cornwall. I hope, therefore, that the hon. Gentleman will feel able to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I am extremely sorry for the effect that my remarks have had on the hon. Member for North Cornwall. I sense, however, that his lack of agreement with me might come from another source. At the risk of sounding like the Minister for Further Education, Skills and Lifelong Learning, the hon. Member for South Holland and The Deepings, I quote Disraeli:

“A majority is always better than the best repartee.”

I suggest that the source of the hon. Gentleman’s convictions is not the weakness of my argument, but the strength of numbers on the Government side of the Committee. However, I am satisfied that the Minister has provided a clear assurance that it will not be legal for grammar schools to expand selection down the age range—I think that is what he said and he is nodding, although he is being tapped on the shoulder as I speak. He told the Committee that that is not Government policy, and went on to say that it would not be legal for grammar schools converting to academy status to expand selection to pupils of primary school age. On that basis, I am happy to withdraw the amendment, but perhaps the Minister wishes to intervene.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

The legal position has not been changed by the Bill. It is not our policy for grammar schools to expand down the primary age range, and it would not be legally possible for them to select at an earlier age.

Kevin Brennan (Labour, Cardiff West)

I suspect the Minister has repeated something that is not true. My general ability to absorb feelings in a room suggests in my waters that what he said was not quite correct, and that the legal position might be different. It would be helpful for him to make the current legal position clear to the Committee once again. Secondly, will he make it clear that it is not the policy for grammar schools to expand selection down the age range, and that if such an application were to be made, it would not be approved?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am happy to say that the legal position of selection down the age range is the same as under the previous Government. It would technically be possible, but it is not our policy to permit such a move. Therefore, I can give the hon. Gentleman the assurance he seeks about the approval of such an arrangement.

Kevin Brennan (Labour, Cardiff West)

I thank the Minister for the clear statement that the Government will not approve the extension of selection down the age range when grammar schools convert to academies, and on that basis, I beg to ask leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 225, in clause 57, page 46, line 15, at end insert—

‘(2A) In considering the effect of a proposed new or an expanded educational institution on existing educational institutions in the area, the Secretary of State must consider the effect in the light of the future need for school places.’.

The amendment would ensure that any decision about a new or expanded educational institution is made with the full understanding of pupil place requirements in the area, and the infrastructure—public transport, for example—needed to service the new or expanded establishment. Will the Minister assure the Committee that any such decision will be made with full knowledge of local pupil place needs, and of the potential impact on existing establishments in terms of pupil numbers and, as a consequence, funding and future viability? What steps will be taken to ensure that decisions about new or expanded schools do not have a damaging impact on the ability of local authorities to strategically plan and manage pupil place needs? What considerations will be required in terms of transport and other infrastructure before any decision is made? How will local affected groups be consulted in relation to the measure? Will he assure the Committee that each decision will be made in the broader interests of the area and its pupils?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Clause 57 provides for the addition of new section 9 to the Academies Act 2010. That will ensure that before the Secretary of State enters into academy arrangements with a new educational institution or an educational institution that provides for a wider age range, he must take into account what the impact will be on maintained schools, academies, further education colleges and alternative provision institutions in the area. The amendment would prescribe that future demand for school places must be considered as part of that impact assessment.

I agree with the hon. Gentleman on the importance of the impact assessment taking account of the pressure on existing places and the demand for future places, and I assure the Committee that we would consider that as a matter of course. Assuring appropriate levels of demand for new places is a core part of the process when considering free school proposals. I do not wish, however, to prescribe in law the content of an impact assessment for a school. When we begin to make specific reference to individual considerations, questions are asked about why other considerations are not also specified, and whether those considerations are to be ignored. It is hard to encompass all characteristics that may need to be considered in specific local circumstances, and it is unnecessary to do so. Instead of taking that approach, we expect to take into account all the relevant factors, but they might differ between different proposals and in different areas. On the question of transport, we would take into account any relevant considerations, and they could include transport when appropriate to the proposal involved.

I have addressed the hon. Gentleman’s points, and I hope that he will withdraw his amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to ask leave to withdraw the amendment.

Clause 58

Kevin Brennan (Labour, Cardiff West)

This clause clarifies the position of reserved teachers who are employed to give religious education in line with the tenets of the religion or religious denomination of certain schools when they become an academy. The law on the employment of staff in independent schools with a religious character is amended to preserve the arrangement about reserved teachers as if the school had remained a voluntary controlled school.

The clause gives the Secretary of State the power to disapply the provision in respect of an academy that was once a voluntary controlled school if he has agreed changes to the governance of the academy that mean that a religious body gains majority control of the academy trust. In that case, all teachers can be appointed for their fitness to teach religious education in accordance with the tenets of the religion or religious denomination of the academy.

The Minister has supplied a note on that, for which I am grateful. Comments have also been made to the Committee, for example by the National Secular Society, which said:

“If a religious ethos can be achieved with a maximum one fifth of teaching staff in VC schools, our advice suggests that 100% of Reserved Teachers cannot be justified under the Directive as being necessary to achieve the ethos in VA schools or religiously designated academies.”

I will be grateful if the Minister will put on record the need for the change in the law and explain briefly the points in his note.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am happy to do that.

The clause amends part 5A of the School Standards and Framework Act 1998, which deals with the employment of teachers at independent schools that have a religious character. In the maintained sector, there is a clear distinction in staffing provisions between different categories of schools with a religious designation. Voluntary controlled and foundation schools with a religious character have a minority of church representatives at governor level, so they cannot have in excess of one fifth of staff as reserved teachers.

Reserved teachers are specifically appointed and selected on the basis of their ability to give religious education in accordance with the tenets of the religion or religious denomination of the school. In contrast, a voluntary aided school with a religious character may have a majority of church representatives at governor level and may apply faith criteria in the appointment of any teacher at the school. A central principle of the academies programme is that schools will convert as is. In particular, academy status should not be used as a back-door method to gain extra power or to extend a school’s provision, nor indeed to reduce it. Clause 58 embodies that principle. Legislation covering all independent schools with a religious character, including academies, currently states that preference on the basis of religion may be applied to all staff. The clause ensures that in the case of converting voluntary controlled or foundation schools with a religious character, the limit of a fifth of reserved teachers will be retained in the converted academies, which simply provides parity with the position in the maintained sector.

As the hon. Member for Cardiff West will be aware from debates during the passage of Bill that became the Academies Act 2010, our preference is to regulate academies through their funding agreements, but it is necessary to legislate in this case because that ensures that new staff employed at, and people applying for posts at, these academies will have the same access to statutory protections, in particular to legal redress such as employment tribunals, as their peers in maintained schools.

As the hon. Gentleman is aware, we have received a number of representations from the National Secular Society raising concerns about the clause, and particularly about proposed new section 124AA(2) of the 1998 Act. I responded to Mr Porteous Wood personally to address his concerns and I hope that that letter and the policy statement, which have been circulated to the Committee, reassure the National Secular Society, the hon. Gentleman and other Committee members about the intentions behind that provision, which makes it possible for the Secretary of State to issue an order disapplying the clause for a specific academy.

In the maintained sector, it is possible for a school to move from a voluntary controlled foundation school with religious character that has minority faith representation to being a voluntary aided school with majority faith representation. With that change comes the ability to appoint 100% of teachers on the basis of religion, with protection for existing non-reserved teachers as set out in regulations. The change would be available only if a school had set out a proposal for its plans, if it had consulted and if it could demonstrate sufficient support for the change.

As our policy statement sets out, the Secretary of State would similarly issue an order disapplying proposed section 124AA of the 1998 Act only if an academy had consulted on, and attracted support for, a change from minority to majority faith representation on its governing body. Proposed new subsection (2) therefore simply ensures that there is a level playing field between the processes available in the maintained and academy sectors. It is important to re-emphasise that any order disapplying these requirements would contain provisions to protect the position of existing non-reserved teachers. On the basis of that assurance, I hope that the Committee will agree to clause 58.

Kevin Brennan (Labour, Cardiff West)

I thank the Minister for that helpful explanation. It shows that to achieve, to use his words, a “level playing field” between the maintained sector and academies, it is sometimes necessary to do something in legislation. It might have been sensible at this juncture—following the Academies Act 2010 and given that the Government are effectively seeking to make all schools academies in the longer term—to create that level playing field right across the piece in legislation, rather than having the situation that we are going to inherit now. According to the Minister, all new academies will have funding agreements to put in place the commitments he has set out to the Committee according to Government policy, but there will be a whole batch of existing academies with different funding agreements to which such provisions will not necessarily apply.

The Bill would have been an opportunity to tidy all that up and make sure that there genuinely was a level playing field across the piece for all schools, whether maintained or academies—and whether new academies or Labour’s academies, if we like—for the powers that they have, as well as their responsibilities around staffing and employment law. Rather than putting in place the untidy mess with which we will be left as a result of these uneven provisions, we could have taken the opportunity to use the Bill to put everyone on the level playing field to which the Minister referred. However, I am grateful to him for his note and for his further explanation, so I will not divide the Committee on the clause.

Clause 59

Kevin Brennan (Labour, Cardiff West)

The clause consolidates and extends the law on land occupied by academies. Together with schedule 13, it gives the Secretary of State additional powers to transfer publicly funded land to academies. Will the Minister tell us the intentions behind extending the Secretary of State’s powers in this respect? What evidence does he have to demonstrate that such powers are needed? What assessment has he made of their impact? Will he confirm to the Committee whether he intends that the powers will relate to the transfer of the publicly funded land of maintained schools to free schools?

Graham Stuart (Conservative, Beverley and Holderness)

Under the clause and schedule 13, school land and property that become vacant as a result of amalgamation, closure and other reorganisations of school facilities may be forfeited to the Secretary of State rather than remaining under the ownership of a local authority. I represent a largely rural constituency with a greater than average number of schools for its population, including a number of small Victorian primary schools, many of which have fewer than 60 pupils on roll. I am extremely concerned about the provision. Many local authorities rely heavily on the receipts from the disposal of surplus accommodation and land to fund capital improvements in their area.

Areas such as the East Riding of Yorkshire received no money—absolutely nothing—under the wasteful, bureaucratic and outrageously unfair Building Schools for the Future programme. East Riding, along with Cornwall, has the greatest backlog of maintenance and building need. The cost of addressing the deficits and inadequacies of school accommodation and facilities in the East Riding of Yorkshire has been conservatively estimated at £491 million. Between 2008-09 and 2010-11, the council had on average less than £21 million a year for capital expenditure on schools. The sum available for 2011-12 is £10 million. We therefore have £10 million available for capital this year, thanks to the financial wasteland left behind by the previous Administration, versus £491 million of requirements.

My concern arises because excellent local authorities such as East Riding have worked creatively and innovatively to use capital receipts and to help put nurseries and junior schools together to form primary schools. They basically found ways of using every possible receipt they could to deliver higher quality services. Despite their best efforts, however, they are still seriously behind. Wilberfoss primary school brought in £364,000 and Bridlington lower school brought in £2.4 million. In each case, those moneys were repurposed and reused to provide better and more appropriate facilities for local children.

At a time when local authority funding is under significant pressure, we should ensure that schools have the flexibility to use surplus assets to improve what, in many cases, is not an acceptable situation. Will the Minister assure us that such points have been considered and that they will be factored into the implementation policy?

Richard Fuller (Conservative, Bedford)

It is a great pleasure to follow my hon. Friend the Chair of the Education Committee, who made some strong, general points. I have two precise questions about the transfer of land for the establishment of academies, which relate to local authorities and decision rights in federations of schools if one of those schools will have its land and buildings transferred to create an academy. In such circumstances, what are the necessary and sufficient conditions for that to take place? If a request to the Secretary of State is made solely by a local authority without the support of the federation, is that necessary and sufficient to enable a transfer of land and buildings to take place? Alternatively, are there circumstances in which the transfer may happen at the request of a federation without the support of the local authority? On my reading of the Bill, both those circumstances would be sufficient to enable the Secretary of State to facilitate a transfer of land and buildings, so I would appreciate it if the Minister would answer my questions, either in this debate or at some other time.

Stella Creasy (Labour, Walthamstow)

The Minister is well aware of my great concerns about the clause and what it might mean for a number of schools across the country. In particular, I am worried about what it might mean for schools that had been part of Building Schools for the Future. I have no desire to start a debate with the hon. Member for Beverley and Holderness about whether BSF was a good programme, but I think we can all acknowledge that there is a need for investment in the schools infrastructure in the UK, particularly in Wales, and that many schools have great capital needs.

One of the ways in which BSF was resolving those needs was by moving to new sites. I can think of several schools in my constituency—Willowfield school, the Holy Family school, William Morris school and Lammas school—which acquired land to redevelop and are in various stages of that process. In particular, Willowfield was cruelly stopped just as it was about to start the process of building on the new land. For many of us looking at the clause, that is where we have concerns.

I tabled some questions to the Government to try to understand their thinking on school closures and the disposal of surplus land. The hon. Member for Beverley and Holderness has set out how schools and local authorities have been using land and capital to try to invest in new school provision. The Minister, in response to my question about how much land the clause will apply to, said that the Government did not hold a record of that, and that decisions on school closures and the disposal of surplus land will normally be taken by local authorities. Those of us who are becoming increasingly aware of the kind of language used by the Minister will be supremely worried by the concept of “normally”, which opens the door for many decisions that are not normal.

The clause creates some worrying principles. I hope that the Minister will address some of those concerns today, so that not just MPs, but local authorities, which are deeply concerned about the future of the school maintenance and building projects in England and Wales, will have some clarity, particularly on paragraph 1(2)(c) of schedule 13, which sets out the proviso that if the Secretary of State thinks that a piece of land is

“no longer about to be so used”,

it may also be included. I also hope that the Minister will remember the evidence that we heard from Councillor Pugh during the evidence sessions, when we talked briefly about the clause and the concerns that local authorities have about it. He said:

“Clearly, where schools become academies, those school sites then transfer out of local authority control…there is a balance to be struck. If schools are going down that route and the local authority is comfortable…local authorities should be relaxed...There is a need to explore this particular area further, because if it does not tie in with an authority-wide approach to school sites…it could become disjointed.”

He continued:

“There needs to be the opportunity for the local authority to have a discussion with Government about how that is best used, so that we are not losing sites that are of particular value for educational purposes, or not getting best value for money out of the future use of those sites and any capital receipts.”––[Official Report, Education Public Bill Committee, 1 March 2011; c. 40, Q84-5.]

With that in mind, I have a number of questions for the Minister. First, what discussions has he had with local authorities about the clause? Secondly, will he confirm that the disposal of land and assets will remain the right of local authorities and schools, and that there will be no interference by the Secretary of State in those decisions? Thirdly, will the Minister explain how he expects the Secretary of State to divine when a piece of land is no longer about to be so used, as set out in schedule 13? Fourthly, who does the Minister imagine will benefit from such transfer powers, and will he say more about why he thinks those powers are needed? Fifthly, schedule 13 3(3) talks about

“incidental, consequential, supplemental and transition provision.”

Can the Minister explain further what he means by that, because it is a wide rubric under which the Secretary of State can intervene in capital receipts and how land is used by local authorities?

Sixthly, what assessment has the Department made of the need for such land by schools to meet the existing needs of maintained schools? I am thinking particularly of the schools in my local authority area that were part of BSF, but which now have no clarity about whether they will have the land. They were also part of providing additional places. I am sure that the Minister is aware of the severe pressure on school places in the London area, and that many of the BSF projects in London were precisely about meeting that need and making sure that we could provide schooling for all our children. The idea that land may be taken from those projects for unspecified purposes is worrying for several schools.

Seventhly, in what circumstances does the hon. Gentleman envisage the Secretary of State not consenting to local authorities disposing of land? Turning that question the other way round, I notice on page 94, line 45 of the Bill that the Secretary of State also has the ability to prevent local authorities from doing exactly what the hon. Member for Beverley and Holderness has said that many do to manage the needs within their school provision. How does the Minister expect disagreement between local authorities and the Secretary of State on the disposal of land to be resolved, especially if the professionals in the school support such a disposal?

My eighth question is whether the Minister would rule out requiring local authorities that wish to dispose of land from making schools become academies as a way of reclaiming the assets that will be generated through the disposal of that land. Ninthly, what is the purpose behind the powers on page 95, line 25 of the Bill in respect of being able to reverse the purchase of land? Can he give some examples of where those powers could be enacted and say how such action could occur?

The Minister will be pleased to know that I am on my last question about the purpose of page 95, line 43 and the requirement for local authorities to help the Secretary of State with compulsory purchase applications. Will he clarify when those powers will be used? Given that local authorities have stretched budgets, who would underwrite the legal fees that such action could incur? I hope that he accepts, from the questions that I have outlined, our genuine worry about being able to meet the ongoing maintenance needs and the demand for school places, especially in London. I fear that the clause could make such problems worse, not better.

We can see a situation in which much needed land for maintained schools could be given to free schools for their renovations, and that could raise all sorts of questions about whether or not the provision is appropriate in meeting the need for school places. Furthermore, the threat that the Secretary of State might decide that land and building are surplus to schools could create huge problems for schools trying to manage their estates in the future, especially if we cannot understand how he will divine whether the land is no longer needed. Above all, the clause will make it hard for schools to plan for future provision. In communities such as mine where there are fluctuations in the number of pupils, the ability to plan for how land is used is something that is done well with the local authority.

I hope that the Minister will take the chance of our debate on the clause to allay the fears that I have set out and confirm the important role that local authorities have to play in managing school assets. How will such measures support the schools that were trying to meeting a need through BSF? I understand that we do not yet have the details of the capital investment in schools that the Government now recognise has to be made, but I hope that he can understand our worries that the funds that might be generated by the transfer of land could inadvertently be put towards purposes other than education and supporting existing schools and their needs for maintenance. I hope that he will respond to my wide-ranging questions. If he needs further clarification of my points of reference, I shall be more than happy to provide it.

Dan Rogerson (Liberal Democrat, North Cornwall)

It is a great pleasure to follow the hon. Lady. I wish her a happy birthday. It is good to see that, on such an august occasion, she is taking her responsibilities to the House so seriously and scrutinising proposed legislation in such detail. I am sure that the Minister will feel ready for a specialist subject section of “Mastermind”, and we will be looking to see whether he gets through it without too many passes.

The Chair of the Education Committee asked crucial questions, and he was kind enough to refer to the situation in Cornwall. It is certainly my experience that, in an area similar to his with many small, ageing, rural primary schools, there is pressure and demand for investment. For example, on Friday I visited St Tudy school and St Mabyn school now in a federation under their excellent head, Karen Holmes, at a local leisure complex at which they were displaying their work. They put up a fantastic exhibition for parents and the community, and it was great to see the two schools working effectively in a federation. St Tudy was to be in receipt of money for a rebuild scheme—not under the BSF but a different mechanism—but there were problems with planning. After explorations, the first site identified was judged far too costly to get to the required standard, so the school looked at another site and eventually got planning but, by that time, the clock had been ticking and, unfortunately, the money was lost. The school is therefore looking keenly for the Government’s proposals for targeting capital spending at capacity in areas. The two villages have affordable housing being developed, hopefully expanding the number of younger families, which might give the opportunity to bid for some of the capital.

There is concern that capital that becomes available for improvements from sites surplus to requirement elsewhere should be focused on meeting identified need. The primary school in Camelford, another town in my constituency, has now moved to the site of the Sir James Smith secondary school—a school named after a Conservative MP, which I am sure the Minister is pleased to note. The original primary school site is now surplus to requirements, and there has been a lengthy process of discussion in the community and with the council about its future. It should secure a capital receipt for the local authority, so it will be able to meet the aspirations of the community in other regards, including the council’s existing capital programme.

I am delighted that we are starting to make progress with a new medical centre for Camelford on the site, as well as securing some of the playing fields as open space. I am not sure how well the Minister knows the geography of north Cornwall, but Camelford is a rather hilly little town and there are not that many flat areas where people can engage in sporting activity, so the playing fields are crucial.

The community has therefore been involved with discussing all such issues. I have my frustrations with how long it has taken the Cornwall council property function to reach a conclusion in its negotiations with the primary care trust and so on, and to come forward with a plan for the site, but there has at least been a process with local involvement. Hopefully, the plan will secure the capital that the council needs to meet its commitments but will also secure a site meeting the needs of the local community.

I have some concerns about aspirations for free schools, for example, which might come to fruition in the near future but also might not, possibly causing other things to be delayed or to be influenced in unhelpful ways. So I share the concerns voiced by other Committee members about the provisions. I would hate to see too much power for the Secretary of State to step in and grab chunks of land which might well be used for other purposes in the community and which could provide capital resources to meet the already long list of priorities in local authority areas.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

May I start by making an important point? The schedule does not extend the Secretary of State’s powers. It mostly re-enacts existing provisions, except that ex-academy land is now included.

Finding suitable land is a key hurdle for free school proposals so we want to help overcome that. The schedule is quite long, as a consequence, because we also thought it preferable, in making the change to include ex-academy land, to replace the existing schedule 1 of the Academies Act 2010, rather than introduce a further layer of amendments. Some of the former provisions of schedule 35 of the School Standards and Framework Act 1998, which was added by the Education Act 2002, had already been carried forward into schedule 1, and the remaining provisions are now being carried forward into the schedule. We will therefore repeal schedule 35A as well.

In summary, the schedule re-enacts and amends the existing provisions in respect of school land, in order to give the Secretary of State additional powers to ensure that publicly funded land is available for free schools and to protect land at academies, including free schools, that has been provided or improved at public expense.

There is no doubt that the availability of land is the key impediment to new schools being set up by local groups. We are unapologetic about using powers to make land available for new schools to meet local needs, when that land is no longer needed by existing schools. The Bill contains no powers in respect of wholly private land or land that continues to be needed by schools, but when a governing body, a trust, or a local authority is of the view that publicly funded land can be disposed of, it is reasonable that one of the options considered is that the land be used for a new free school or an existing academy, as those are the institutions that will open up new opportunities for young people to be educated.

The Secretary of State already has powers in schedule 1 to the Academies Act 2010 to make a scheme to transfer local authority land to an academy. Those powers were carried forward from schedule 35A to the Education Act 1996, into which they were inserted by schedule 7 to the Education Act 2002. Schedule 13 to the Bill puts a replacement schedule 1 into the 2010 Act. The Secretary of State also has the power to direct the transfer of publicly funded land at foundation and voluntary schools when the school closes, and the schedule extends that power to situations in which a school or a local authority thinks that publicly funded land is no longer needed for the purposes of a foundation or voluntary school. Before a school or a local authority can dispose of the land, it must obtain the consent of the Secretary of State, who may instead direct that the land should continue in educational use for a free school or an academy. In many cases, there might be no viable proposal for a free school in the area, but if such a direction were made the Secretary of State would pay appropriate compensation for any private interest in the land, just as he would if the transfer were directed on the closure of the school. The schedule also applies those protections to land at academies, so that an academy cannot dispose of publicly funded land without the consent of the Secretary of State, who again may direct the transfer of the land to another school—an academy or a maintained school.

On the specific issues raised by my hon. Friend the Member for Beverley and Holderness, the Education Committee Chairman, I can reassure him that the clause and the schedule relate to the retention of surplus land for educational purposes, and I hope he approves of that. The phrase “unspecified purposes” has been used in the debate, but the power, which already exists and is being extended slightly to ex-academy land, enables the Secretary of State to use the land only for educational purposes. The power will be used only when a school converts or if there is a suitable free school proposal in the area. All alternative proposals will be considered before a decision is made, and in many cases it is likely that the land will continue to be disposed of by local authorities for the purposes that my hon. Friend suggests, of spending capital on repairs and refurbishment.

Graham Stuart (Conservative, Beverley and Holderness)

On special schools, often, as in the East Riding of Yorkshire, provision is never quite where we want it or how we want it. Plans are made—which are challenging from a capital point of view—to establish new provision and to restructure existing provision, using capital receipts for that purpose. Could there be a conflict if some parents wanted the existing special school to stay where it was, maintaining what they had and found convenient, even if it was not convenient for most children in the area? It might then be impossible to restructure special school provision in that area.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am not sure whether I totally understood my hon. Friend’s point. If the school remains on the site, it will not be regarded as surplus land. If it continues to be used for a special school, the powers will not be invoked by the Secretary of State.

Graham Stuart (Conservative, Beverley and Holderness)

If it were proposed to close an existing special school and develop a new one somewhere else, it would be expected that some people would oppose the change even if, taken in the round, it would be better provision that was better suited to the needs of the area.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I will come back to my hon. Friend on that point. The basic principle is that where the land that is being proposed to be disposed of is regarded by the local authority as surplus to its requirements, albeit that the local authority is buying land elsewhere, the land that is being disposed of would be subject to these provisions. However, I just want to clarify my own thinking, to ensure that I am right about where it is being done as part of an overall proposal, of swapping one piece of land for another piece of land, and I will come back to him on that point.

I will address some of the other comments about how the Secretary of State will divine when land is no longer needed. We are not trying to take land away from schools. The powers have already existed for 10 years or more and they only apply where a school is about to close or where the land has been clearly identified as not being needed for the school. If a school and local authority do not accept that the land is surplus, these powers would not be applicable.

Stella Creasy (Labour, Walthamstow)

That is very helpful. Can the Minister clarify why paragraph 1(2)(c) of schedule 13 says:

“or the Secretary of State thinks it is about to be no longer so used”?

The Minister just said that if local authorities disagree that land is no longer in use they will have the right to veto any powers of the Secretary of State. Can he clarify why that line is in schedule 13 and what the intention behind it is, because it is quite hard to understand why the proviso exists—

“or the Secretary of State thinks it is about to be no longer so used”—

that will allow the Secretary of State to use these powers?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

That provision simply replicates existing law; it does not change anything that has been in existence for the last x number of years, including the time that the hon. Lady’s party was in power.

I want to come on to some of the other points raised by hon. Members. My hon. Friend the Member for Bedford asked what the necessary and sufficient grounds are for land to be transferred to a federated school that wishes to convert. The federated school would need to apply to the Secretary of State for an academy order and the local authority would then need to provide the school’s land on a long lease, or the land could be transferred if the school was previously a community school. If the school was a foundation or voluntary school, appropriate arrangements would need to be made with the relevant landowner.

The hon. Member for Walthamstow asked a number of questions, many of which do not relate to the changes that we are making to the Bill. She is, in fact, questioning existing legislation rather than our amendments to the Bill. It would be better if I wrote to her to set out the answers to her questions where they do not relate to issues that are being changed by the Bill.

The hon. Lady also asked what discussions there had been with local authorities about the clause and its implications. The clause extends existing law and makes new provision only in relation to foundation and voluntary schools. We have discussed the land provisions with representatives of local authorities as part of our regular discussions and we made that point very clear.

I want to clarify one thing that I said earlier. I said that these powers do not extend the Secretary of State’s powers. What I meant to say is that they do not extend the Secretary of State’s powers in relation to community school land. That is an important point to make. I think that I also referred to schedule 25, when I should have referred to schedule 35A. I just want to ensure that the record is absolutely correct.

I hope that I have addressed all the points that have been raised.

Stella Creasy (Labour, Walthamstow)

The Minister will not be surprised to know that I am very concerned that he does not know the answer to a number of my questions. The particular issue that really troubles many of us is whether he can rule out the notion that land can only be disposed of for the purposes of free schools or academies, so that where there might be a maintained school that would benefit from land, such as the school described by the hon. Member for Beverley and Holderness, such a scenario would not be acceptable any more under the Bill. Perhaps the Minister can do things the other way round—if he does not know what the provision is for, can he rule out what it is not for?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Again, the hon. Lady refers to previous legislation, which existed under the Labour Government. I know that she is new to the House, but her points relate to existing legislation. I have offered to write to her and I am happy to provide her with a full explanation of the legislation that was passed by the previous Government.

The essential issue is that such matters will be dealt with case by case. Broadly, the provisions enable the Secretary of State to prevent a sale of land for cash where there are alternative provisions—where that land could be used for educational purposes. The Government are maintaining and continuing that position with the consolidation of the provisions in new schedule 1 to the Academies Act 2010. We are extending the provisions, however, to include former academies’ land.

To answer the question raised by my hon. Friend the Member for North Cornwall about whether land is being tied up unnecessarily, I should say that land will be transferred to a free school only when the school is ready to proceed. It will not be held by the Secretary of State to await a future free school in the area, so we will not be creating a supermarket land bank that we can tap into when someone wishes to expand a free school in a certain area.

I think that I have covered all the points made by hon. Members and I have corrected one or two points on the name of the schedule. I hope, therefore, that hon. Members will accept the clause.

Kevin Brennan (Labour, Cardiff West)

It has been an interesting debate. As is the convention, the Minister will copy to the Committee his letter to my hon. Friend the Member for Walthamstow, and we look forward to that. May I, too, take the opportunity to wish her a happy birthday? I caution the Minister against saying that she is new to the House. Ministers usually use that phrase when they are thinking, “I have absolutely no idea of the answer to the questions that she is asking, but perhaps if I patronise her a bit, I might get away with not answering them.” That is not something that we should do to someone on their birthday. I am sure that he will be prompt in answering her letters. [ Interruption. ] It is not his birthday, so I can be rude to the Parliamentary Private Secretary—I would not be rude if it was. Perhaps he will reply to my hon. Friend today and include a birthday card with his letter.

We have had a wide-ranging debate. The Minister has made it clear that despite the incredibly long schedule that is attached to the clause, he is making a small change, which relates only to ex-academy land. In performing our textual exegesis of his letter to answer my hon. Friend’s questions, we will check that that is so. I do not intend, however, to press the matter to a vote.

Schedule 13

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 227, in schedule 13, page 93, line 17, before ‘school’, insert ‘maintained’.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss the following: 228, in schedule 13, page 94, line 43, before ‘school’, insert ‘maintained’.

Amendment 229, in schedule 13, page 96, line 11, before ‘school’, insert ‘maintained’.

Kevin Brennan (Labour, Cardiff West)

The amendment is intended to probe whether there is anything in the provision that might result in a land grab. For example, a local authority might acquire land from a former independent school that has ceased to operate within the past eight years. As part of its estate strategy, the authority might plan to use that land to provide homes at a local level.

In such circumstances, could the Secretary of State use the powers in the clause to claim the land for use as an academy, for example? What matters would be considered if the local authority had specifically acquired the land from an independent school as part of its strategy to provide necessary housing for people in the area? Would it be an extreme measure to take at the centre to prevent a local authority from pursuing its democratically accountable objectives, on which it might well have fought an election?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

As I said, the Secretary of State has had the power since the Leaning and Skills Act 2000 to make a scheme to transfer local authority land to an academy if it has been used for a community school in the previous eight years, but is no longer so used, or is about to become so. Since then, there has been an increase in the different sorts of schools and therefore in the powers that need to be updated.

The Academies Act 2010 changed “community” school to “maintained” school to include, for example, foundation and trust schools. The purpose was to treat all publicly funded land in a similar way, which is why the Bill makes a change yet again, and refers simply to “schools”. That means that local authority land that has been used by an academy will be treated in the same way as land that has been used by maintained schools.

The effect of the amendments would be that land that had been returned to a local authority from an academy would be exempt from the Secretary of State’s power in relation to land. He would be unable to make a scheme to transfer the land to an academy, and he would be unable to object to its disposal or appropriation for the authority’s non-educational functions. It is reasonable that local authority land that has been used for a school, but is no longer being used for that purpose, should be available for a new free school if suitable proposals come forward. The option of its remaining in educational use should be fully considered before it is disposed of or otherwise appropriated by the local authority.

Kevin Brennan (Labour, Cardiff West)

I understand the Minister’s point about the amendment, but if a local authority acquired a site that was not a former academy, but was perhaps a failed prep school in the private sector, and wanted to develop that land according to its election manifesto—for example, for housing—would it be caught by the changes? The purpose of the amendment is to probe him on that.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

The answer, clearly, is no. That would be way outside the scope of the provisions, which relate to existing, publicly owned land being used for the purposes of a school.

In conclusion, it is reasonable that local authority land that has been used for a school, but is no longer being so used, should be available for a new free school if suitable proposals come forward.

Stella Creasy (Labour, Walthamstow)

Will the Minister say whether that proviso applies to land that has been purchased for a new school-building development that is not currently a school—a blank sheet of paper—and whether that land can be used only for free schools or academies, so that if schools in the maintained sector wanted to benefit from such redevelopment they would have to become academies? Will the Minister rule out that scenario of a forced prescription to become an academy to obtain a new school building?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

If land is purchased for a specific purpose, it will not be covered by the provisions. That is clear.

On the basis of my explanation, I hope that the hon. Gentleman will withdraw his amendment.

Kevin Brennan (Labour, Cardiff West)

I take it, from what the Minister said, that he is confirming that if a local authority purchases a site that had previously been used by an independent school in the private sector, rather than by an independent school defined as an academy, the clause would not apply. There was some ambiguity, because he referred to land that had been previously used as a school. If it had been used as a private school, the interpretation could be the other way. From what he said, I am taking it that he is telling us emphatically that if a local authority purchased a former private school site, it would not be covered by the provision, and it could go ahead and use the site as it, as a democratically elected local body, wanted to, in the interests of the local community.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

That would technically be covered, but policy would mean that we would not use it in those circumstances.

Kevin Brennan (Labour, Cardiff West)

That is a helpful clarification, as what the Minister said previously suggested that it might not be covered. He might add that issue to his letter in order to be absolutely clear about it, although I take the point that he has put it on the record that the Secretary of State would not seek to use the powers in the circumstances that I have outlined—where a former private school site was being purchased by the local authority to be developed for another purpose. I am grateful to him for putting that on the record. I beg to ask leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 230, page 99, line 25 [Schedule 13], at end insert ‘following independent arbitration.’.

As it stands, in the event of any dispute between the local authority and the Secretary of State over land, the Secretary of State will be the arbiter. I suspect that I know what the Minister will say in response to this point, but it is time to reflect whether in the circumstances, given the changes that the Government are making, it would be appropriate for somebody other than the Secretary of State—perhaps an independent body or person—to be the arbiter.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

The land provisions are complicated. The final paragraphs of schedule 13, in particular, apply to some specific and unusual situations. The amendment, as drafted, would prevent the Secretary of State from making a direction before independent arbitration in only one rare situation, in which land is held on trust by both the governing body and other trustees.

The provision replicates existing provisions applying to school closure that were first enacted in this form by the previous Government in the School Standards and Framework Act 1998. Those provisions did not include a requirement for independent arbitration, nor did the more general provisions concerning the transfer of local authority land to academies that have existed in various forms since the Learning and Skills Act 2000.

Whether independent arbitration is needed before the Secretary of State determines the transfer of publicly funded land is an important principle. It is true that in some cases, when schools convert to academy status, it is necessary to do some work to determine ownership of the land. I appreciate the concerns and the intention to provide an additional mechanism for ensuring that decisions on land ownership are fair to all parties concerned, but we believe that it is unnecessary to add a requirement for independent arbitration before the Secretary of State can make a direction. In the vast majority of cases in which the governing body of a maintained school that wishes to convert to an academy holds land, it is clear to whom and under what conditions that land should transfer on conversion.

Where differences of opinion have occurred about the land of converted schools, they can usually be resolved locally, with the Department for Education facilitating any necessary discussions. The Secretary of State would need to act reasonably, or he would risk judicial review.

Stella Creasy (Labour, Walthamstow)

Or she.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Indeed. He or she would take into account all points made by interested parties and consider each case on its individual merits. However, the overriding objective is to make land available, where appropriate, to free schools and academies as swiftly and effectively as possible, to increase the choices available to parents and pupils. We do not consider that adding an additional layer of regulation and bureaucratic procedure would make the process more satisfactory to any party. I therefore urge the hon. Gentleman to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I sensed a sudden frisson of excitement in the Committee when the Minister began his remarks with the possibility of a concession crossing his lips, but he unfortunately returned to his usual riff about regulation and bureaucracy at the end, so that moment passed quickly. I hope he is right that the Secretary of State will act reasonably. I hope that the Secretary of State is listening, because if he does not act reasonably, he may well end up, yet again, being accused of an abuse of power in the courts. However, I do not intend to press my amendment to a vote. I beg to ask leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 231, page 103, line 36 [Schedule 13], after ‘regulations’, insert ‘requiring an affirmative resolution of each House of Parliament’.

This is just a probing amendment to ascertain the Government’s intentions, and I would be grateful for the Minister’s remarks.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Amendment 231 would require that any regulations made in respect of administrative and practical arrangements, which were needed to give full effect to certain land provisions in schedule 13, were subject to affirmative resolutions. That is not merited in this case. The policies are laid out clearly in the Bill. The regulations will be practical and administrative only. On that basis, I hope that the hon. Gentleman will be reassured and that he can withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

I will withdraw the amendment, although we need to know the circumstances under which the Secretary of State will use the extended powers in this part of the Bill, and I hope that the Minister’s letter will reveal that in detail. We look forward to having a much more detailed look at the regulations. If necessary, we can pray against them. However, it may well have been more appropriate to use an affirmative procedure, but I will not press the issue to a vote at this stage. I beg to ask leave to withdraw the amendment.

Clause 60

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 232, in clause 60, page 49, line 15, after ‘Academy’, insert—

(i) the admission authorities for all maintained schools in the relevant area;

(ii) the Academy Trusts for all Academies in the relevant area;

(iii) the governing bodies for all community and voluntary controlled schools in the relevant area (so far as not falling within paragraph (i) or (ii));

(iv) .’.

The amendment would ensure that local authorities, as the admission authorities for community and voluntary controlled schools, and the governing bodies of schools that are not admission authorities, can object to the school adjudicator regarding an academy’s proposal to change its admission arrangements.

We have heard a lot in recent days about the need for the Minister’s Parliamentary Private Secretary to do up his top button and wear his tie while on duty, but we have also heard a lot from the Government about the squeezed middle. Clearly, admission arrangements in the Bill will affect the squeezed middle quite a lot. The implications for parents of what the Bill does on admissions are quite significant.

Objections are limited to schools in the “relevant” area, which is roughly the area in which the parent would send his or her child to school. By virtue of new section 88H(6)(a)(i), maintained schools and local authorities have a right to object, because they are referred to in new section 88F(3). Parents’ right to object to the adjudicator in respect of an academy are dealt with elsewhere, and a parent is not an appropriate person for these purposes. It is said that putting academies in the same framework as other schools on admissions is a good thing, although the objection rights of local authorities and schools are not guaranteed in primary legislation. Why is that not the case?

Which bodies will be prescribed in regulations under new section 88H? If local authorities are not allowed to object, there will be a loss of informed objectors. Elsewhere, the Government want to perform a leadership role for parents and pupils, particularly vulnerable children, so that schools are not tempted to change their admission arrangements to make it harder for such children to gain entry. What progress has been made on the draft code of practice? There was a further leak in The Guardian last Tuesday. Fran Abrams wrote:

“That code will be published in the next few days, and is understood to contain a reform of the measure controlling in-year admissions”—

we have obviously raised that issue—

“designed to hand back more say on the issue to schools. It will not prove universally popular”.

When will the Committee see the draft? If that is after the Committee finishes, will the Minister urge his friends in the Government Whips Office to recall the Committee so that we can debate how that matter relates to the Bill?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

Welcome back, Mr Walker. I see that my hon. Friends have had a good lunch and are raring to go for the final sitting of this mammoth Committee stage on what is quite a short Bill. None the less, it is good to have reached the final stages.

The hon. Member for Cardiff West asked when the revised admissions code will be available. [Interruption.] Some people know how to make an entrance. I fully appreciate the eagerness of the hon. Gentleman and the Committee to see the revised code. I acknowledge that, ideally, it would have been better for the consultation to have begun. However, our aim on the revision of the codes is to get them right, and a huge amount of work has gone into revising, drafting and slimming down the codes. But I will make a concession to the hon. Gentleman that goes further than his amendment.

The clause will bring objections to admission arrangements for academies within the remit of the schools adjudicator. In so doing, the intention is to ensure parity and consistency between the objections processed in relation to admissions to maintained schools and academies. I am certain that the provision enjoys broad support inside and outside the House.

The amendment seeks to prescribe the range of potential objectors to the admission arrangements for academies in primary legislation. We touched on that during our debate on clause 34, and I am happy to reiterate and expand on what I said then to the Committee. I can reassure the hon. Gentleman on our intentions about who can object to schools’ admissions policies. The purpose behind the clause is to ensure parity in the complaints system between maintained schools and academies, and to provide consistency for parents. Therefore, the range of objectors will be the same for both maintained schools and academies, and the clause will give us the power to make the appropriate regulations to achieve that.

There are two issues to deal with on the amendment. First, should the objectors be set out in the Bill? We do not believe that that is necessary; it can be better done through regulations. Secondly, on the specific groups named by the hon. Gentleman, we strongly agree with the spirit of the amendment and that those listed should be able to object to admission arrangements for academies, as they should to those for maintained schools. I assure him that those groups will be included in the regulations. Indeed, we intend to go further than his amendment and to broaden the range of potential objectors to admissions arrangements at both maintained schools and academies. We are currently considering how wide to go in the regulations.

I am grateful to the hon. Gentleman for moving the amendment and for helping us to find common ground on what is quite a contentious issue over admissions. With those assurances and given that we intend to go further than his amendment, I hope that he will withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

Welcome back this afternoon, Mr Walker. I hope that you enjoyed your baked potato with tuna as much as I enjoyed my paella for lunch.

I thank the Minister for his response. As I said in my earlier remarks, it is welcome that the Government will introduce the measure for academies. What he said in his remarks about parity is also welcome. I reiterate that, if we are to have such an approach on academies, an across-the-board level playing field is probably sensible. If it were possible to amend the Bill in a holistic way that achieved that parity and that level playing field across the piece for all academies, it would be better, where it is the intention of the Government to make provisions in the funding agreements, to have them in the Bill. That would be a much tidier way of achieving a genuinely level playing field without there being any doubt about it, but it is welcome that admissions are coming in in this way in the clause.

The Minister referred back to clause 34. I will not repeat the debate we had on clause 34 except to say that we are still concerned about the watering down of the school adjudicator’s role in relation to admissions and, as I said earlier, that is something to which we might return later. I am glad that the Minister said he strongly agreed with the spirit of our amendment and that he wanted to achieve it in regulation and perhaps even go further. That is a welcome concession, if he wants to call it that; certainly a welcome observation on his part.

Finally, it is good to see the Minister’s PPS joining us this afternoon with his dickey. I hope he did not take my remarks too seriously this morning, but it is good to see him appropriately attired for our afternoon sitting. I beg leave to withdraw the amendment.

Clause 62

Iain Wright (Labour, Hartlepool)

I beg to move amendment 233, in clause 62, page 49, line 40, at beginning insert ‘Subject to subsection (2),’.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss amendment 234, in clause 62, page 49, line 41, at end insert—

‘(2) Before the Secretary of State exercises the power to commence this section under section 78 he must lay before Parliament a report which sets out arrangements—

(a) on the funding, commissioning and maintenance of standards of 16-19 education, and funding Academies; and

(b) he has put in place sufficient resource and expertise to carry out the functions he is acquiring following the abolition of the YPLA.’.

Iain Wright (Labour, Hartlepool)

Good afternoon to you, Mr Walker, and to the rest of the Committee. We now come to the abolition of the Young People’s Learning Agency for England. As I see it—the Minister may want to clarify matters for me—the new education funding agency, which is taking in a number of functions from various organisations, including the YPLA, will be responsible for three broad things that the YPLA used to be responsible for. The first is providing money for the 16 to 19 sector. The second is administering financial support for students; this was previously in the form of education maintenance allowance, but that is no longer the case, because we have had a massive reduction in funding for that and we now have the much reduced bursary scheme. The third, which is something which will be growing with increased corporate attention, is support for academies.

Within this last category—again, the Minister can contradict me if I am incorrect—the new agency will be responsible for calculating the grant to academies, will undertake a performance management and monitoring role and provide a more general supporting role for academies. Given the expansion in the academies programme that this Government want to see, that is a massive ask for the new agency. I very much question the capability and capacity of the Department and, through the Department, the new agency, to do this without substantial increases in resources.

In reaching this conclusion I cite two points from the Public Accounts Committee’s investigation of the academies programme, which, if I were the Minister, would give me huge cause for concern. First, as the academies programme expands there is an increased risk to value for money and the proper use of public money, and secondly, there is the YPLA’s struggle with administration and monitoring for the relatively small number of academies to date. It may also be worth putting on the record what the Public Accounts Committee said about the differences between this Government’s approach and the previous Government’s attitude to academies. It said:

“The overall success of the sponsored academies partly reflects the earlier Programme’s clear objective to ‘raise standards of education in some of the toughest, most difficult areas in the country’…The extension of the Programme means that its original objectives and measures of success no longer fully reflect its aims.”

In our oral evidence session, the chief executive of the YPLA admitted the difficulties that the new agency will face given the expansion of the academies programme. In response to a question asked by my hon. Friend the Member for Cardiff West, the chief executive, in classic Sir Humphrey language, stated:

“I do not want to underestimate the challenge.”––[Official Report, Education Public Bill Committee, 3 March 2011; c. 118, Q233.]

The impact assessment accompanying the White Paper acknowledged that the YPLA had had an efficient delivery model. Of its budget of £9.5 billion, £48 million was used on administration. That is 0.505% of the total budget, indicating remarkable efficiency. Some efficient private sector organisations would give its eye teeth for a similar percentage on administration. Will the Minister guarantee that the new executive agency will match those figures, which show unparalleled excellent value for money? If so, will he tell us how he will do it? The impact assessment is incredibly vague, concluding by saying:

“Our expectation is that the costs of this accommodation will not rise as a result of EFA establishment.”

The chief executive of the YPLA also said that the major challenge will not be to reduce posts and jobs, but

“to cope with the increased volume of work that comes from the increasing number of academies.”––[Official Report, Education Public Bill Committee, 3 March 2011; c. 116, Q222.]

As I have already outlined, there are huge risks with that.

The purpose of the amendments is to probe the Government on how they will put in place sufficient resources and expertise to not only carry out what the YPLA was doing before on administration of the massive 16 to 19 budget, but address the new and expanding concerns that it has on the growing academies programme. As the model is a new one, how does the Minister suppose that the agency will acquire the expertise for dealing with the model? Will he buy it in? How on earth will he make sure? The amendments seek to probe the Minister’s thinking on that.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I welcome Members to the Committee again, particularly my hon. Friend the Member for Grantham and Stamford, who is looking extremely smart. If only other hon. Members would follow his approach, the standard of debates in Committee would rise.

Amendments 233 and 234, as we have heard from the hon. Member for Hartlepool, would require the Secretary of State to produce a report for Parliament before he commences the provisions in the Bill to abolish the Young People’s Learning Agency. It might be helpful if I begin by briefly setting out our approach to the education funding system and our proposed changes. In doing so, I hope to provide the hon. Gentleman with the reassurance on the issues that his amendment raises.

In the White Paper, we said that we will replace the YPLA and set up a new education funding agency as an executive agency within the Department for Education. From April 2012, the EFA will bring together the Department’s existing responsibilities for funding maintained primary and secondary schools via local authorities with the YPLA’s responsibilities for funding 16 to 19 education, academies and free schools. All that will be brought together under the EFA. We will have a single body responsible for distributing around £50 billion of education funding for three to 19-year-olds. It will continue the key funding functions that are currently the responsibilities of the Department and the YPLA. Also, as an executive agency within the Department, it will be directly accountable to Ministers and Parliament.

The hon. Gentleman’s amendment suggests that he is concerned that we do not lose the skills, expertise and effective practices of the YPLA in making those changes. I share those concerns and can offer him the reassurance that, in replacing the YPLA, we are not throwing the baby out with the bath water. Indeed, let me put it on the record that we are very grateful to the YPLA’s staff, its chief executive, its chair and its board for their hard work over the past twelve months. The YPLA has played an important role in supporting the expansion of our academies programme and in the provision of 16-19 education. We believe, as the hon. Gentleman said, that the YPLA is an efficient organisation, but, like any arm’s length body, it requires its own back office functions—for example, human resources, finance and legal advice. By bringing all the arm’s length bodies—those that conduct policy or administrative functions—into the Department, there will be access to those shared services.

Clause 64 and schedule 16 of the Bill enable the transfer of YPLA staff and property to the Department—to the new executive agency, the education funding agency. We anticipate that the large majority of YPLA staff will take the opportunity to transfer and will work alongside their departmental colleagues in the new single agency. I hope that reassures the hon. Gentleman that we have taken adequate steps to ensure that the EFA has both the capacity and expertise to carry out its important functions. With this resource in place, the EFA will be in a strong position to hit the ground running, building on the best practices of its predecessors so that we have an effective and efficient funding system that is fully accountable.

The hon. Gentleman’s amendment probes the arrangements for the funding, commissioning and maintenance of standards of 16 to 19 education and funding for academies. Let me briefly set out our position on each of those. On funding, I can confirm that the EFA is likely to operate a system close to the current one, with an annual 16 to 19 funding statement and accompanying guidance. For academies, the EFA will continue with the current arrangements that require an individual funding agreement between the Secretary of State and each academy. Members of the Committee will be aware that the Government do not share our predecessors’ enthusiasm to oversee commissioning arrangements for 16-19 education. As such, we withdrew the national commissioning framework last year, and we are clear that identifying and meeting need in local areas is a matter for local authorities and their partners rather than for central Government.

Similarly, on standards, the White Paper describes a successful education system as one in which schools and colleges have a strong degree of autonomy alongside clear lines of accountability. As we set out in the White Paper, the role for national Government is to look at ways of publishing data in a more transparent way to allow parents and students to compare the different 16 to 19 providers.

The hon. Member for Hartlepool asked about performance management of academies. We are clear that the focus of the education funding agency must be on its core purpose of funding and finance. It will not be responsible for issues such as school improvement or monitoring failing schools. That function will take place within the Department itself. I hope that I have reassured the hon. Gentleman and that he will therefore withdraw his amendment.

Iain Wright (Labour, Hartlepool)

The Minister has not reassured me on the central point that I tried to raise when I spoke to the amendments. The YPLA does excellent work, and I echo what the Minister said about the fantastic professionalism of all the staff, the board, the chairman and the chief executive. But given the new role in which, as the Minister said, there will be individual funding agreements not only for a couple of hundred academies but potentially thousands, that is a major administrative and logistical nightmare. He has not really said anything about how we will have the expertise and capability to be able to fulfil that role efficiently and responsibly. I hope that he will be able to provide me with that reassurance, because it is an important point. The Public Accounts Committee had already criticised to some extent the body’s ability to be able to manage and monitor the academies programme. When it is increased severalfold, it will be a major plank of the Government’s education policy and it will fail if it is not put in place effectively.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I am happy to respond to the hon. Gentleman’s points. Under his Administration’s direction of travel, the YPLA would have been the body that not only administered the funding arrangements of the academies but it would also have conducted monitoring and other functions. Nevertheless, the previous Government also intended to expand the academies programme, and all the issues that he raises would have applied to that policy, albeit that they went at a slightly slower pace than this Government are proceeding at. We have ensured that the education funding agency is a specialist agency relating to accountancy and funding, so it will take all the expertise in that area from the YPLA and it will become a specialist body full of people with the best qualifications in the world, as he and I know—accountants. I hope that we will have a number of accountants working for the education funding agency, who will then be able to require a level of expertise in delivering funding for the whole of education from 3 to 19. Having expertise is how we deliver efficiencies.

We will also be consulting on arrangements to replace the complex calculations of academies’ grants, which are not sustainable, as the hon. Gentleman hinted, with the expanding number of academies. That is something on which we will be consulting shortly. With those two issues together, it will be an efficient way of dealing with what could be a very complex issue.

Graham Stuart (Conservative, Beverley and Holderness)

May I return to the issue of primary schools, about which I questioned the chief executive of the YPLA during evidence to this Committee? Will the Minister tell us about the regime going forward for primary schools, because we could conceivably have hundreds, even thousands, of primary school academies? As I have said before, primary schools are often pretty fragile. How will they be supported—

Graham Stuart (Conservative, Beverley and Holderness)

Will the Minister tell us whether he envisages evolution in future, if large numbers of primaries take up academy status and were not to become parts of chains or firm federations? Perhaps there might be bodies between the Secretary of State and those primary schools. Will he say a little more on that, as Peter Lauener, the chief executive of the Young People’s Learning Agency, was cut off by the bell when I was questioning him about it during the witness session?

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

As I mentioned earlier, we will be consulting on arrangements to replace the complex calculation of academies’ funding, which will deal with the funding arrangements. I understand my hon. Friend’s point. When there are many hundreds, if not thousands, of schools that have become academies, simply administering the funding arrangements will be complex. Simplifying the formula is a key component of trying to introduce streamlined efficiencies into that process.

As far as oversight is concerned, even now the Department will be monitoring any school that falls below the floor standards. School improvement processes within the Department existed before the election and will continue to do so under this Administration. We will keep all these matters under review. Section 11 of the Academies Act 2010 asks us to report annually on the academies programme. The kind of issues raised by my hon. Friend the Member for Beverley and Holderness will be addressed in the report. That is something that we are keeping under review, to see whether we can continue to administer, oversee and distribute the funding in an efficient way when the number of academies increases beyond 500. My hon. Friend is right to raise the issues but I am confident that we will be able to handle that challenge. If not, we will keep the matter under review.

Iain Wright (Labour, Hartlepool)

I do not think that the Minister does have a handle on it, to be honest. Though relatively new, the YPLA has been an extraordinarily effective and efficient organisation. The Minister has not provided me with any reassurance. I will give notice that I do not intend to divide the Committee on the amendment, but I think I share the concern of the Chair of the Select Committee, whose body language indicates that he is not convinced either. We have an efficient organisation. Frankly, the Secretary of State and his ministerial team will have to throw money at the new system to ensure that it works. That is not often the answer and we will have greater inefficiencies as a result. We will have a bloated EFA and that will not be in anyone’s interest. We might return to this issue on Report. I beg to ask leave to withdraw the amendment.

Clause 63

Schedule 15

Iain Wright (Labour, Hartlepool)

I beg to move amendment 236, in schedule 15, page 111, line 1, leave out paragraph 2.

Essentially, all that schedule 15 seems to do is remove references to the YPLA from the statute book and amend other legislation to take into account the centralisation to the Secretary of State. It also requires local authorities to have regard to guidance issued by the Secretary of State—this is why we tabled the amendment—when schools exercise their duties in respect of education and training for young people.

Dan Rogerson (Liberal Democrat, North Cornwall)

How does it represent a centralisation? I can see that it is moving one central organisation into another. It does not, as far as I can see, represent a centralisation of a devolved or more local body into something more central.

Iain Wright (Labour, Hartlepool)

My main concern, and the purpose behind the amendment, is that paragraph 2 states that a local authority

“must have regard to any guidance issued by the Secretary of State.”

That is not “may” or “should consider”, but “must”. That is a level of centralisation. Why is that the case? Why must a local authority have regard? Given what the Minister said earlier, about local authorities and local people making local decisions according to their circumstances, how does this schedule coincide with the rhetoric of localism? Will the Minister concede that such definitive language may place a burden on the local authority that cannot be realised, whether that be financially, practically or some other way, which then leaves the local authority exposed to a legal challenge?

I am not unreasonable; it is fair that a local authority, as a matter of course, would routinely consider guidance from the Secretary of State, to assist with local decision making and to have some consistency with national policies and priorities. I would question, however, whether they must be obliged to. That is the context of amendment 236, which would remove that requirement from the schedule. I hope that the Minister will provide a reassuring explanation as to why the schedule is part of the Bill.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

The amendment seeks to remove paragraph 2 from schedule 15. Paragraph 2 makes a consequential amendment to the Education Act 1996, which is necessary as a result of the abolition of the YPLA. At present, the Apprenticeships, Skills, Children and Learning Act 2009 requires the Young People’s Learning Agency to issue guidance to local authorities on the performance of their duties under the Education Act 1996 relating to the provision of 16 to 19 education. In turn, when performing those duties, local authorities are required to have regard to the YPLA guidance. Once the YPLA is abolished, such guidance will be issued by the EFA—in law, by the Secretary of State.

Paragraph 2 amends the 1996 Act to reflect that change of responsibilities. It does not impose any additional bureaucracy or regulatory requirements on local authorities; it simply takes account of the fact that from April 2012, the guidance will be the responsibility of the EFA. “Must have regard” is the usual statutory phrasing, but it does not mean that local authorities must follow the guidance slavishly. They can depart from it if they have good, justifiable reason to do so. The current guidance was published by the YPLA in December 2010 and is available to the Committee on the web. With those few words of reassurance, I hope the hon. Gentleman will be persuaded to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

The Minister has reassured me on the wider context of the measure and previous legislative requirements. I beg to ask leave to withdraw the amendment.

Clause 65

Graham Stuart (Conservative, Beverley and Holderness)

I beg to move amendment 65, in clause 65, page 52, leave out lines 6 to 16.

It is a great pleasure to be called to speak on this subject. Briefly, the amendment would remove provisions allowing the Secretary of State to suspend the apprenticeship offer. I am delighted to say that the Minister, who is as sensitive, listening and mindful as ever to improve the Bill, has provided me with assurances about the Government’s view on that matter. I am therefore happy not press the amendment to a vote, although I hope that he will have a few words to say on the subject.

John Hayes (Conservative, South Holland and The Deepings)

Given those generous comments from my hon. Friend the Member for Beverley and Holderness, I shall restrict myself to saying merely that I understand the reasons for his tabling the amendment and I am, as he has said, sensitive to its content. While we cannot accept the amendment at this juncture, it is something that I will look at closely again during the passage of the legislation.

Graham Stuart (Conservative, Beverley and Holderness)

I beg to ask leave to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I want briefly to ask a number of questions. I can understand fully the Government’s intentions behind this particular aspect of the Bill. I have found E101 very helpful in setting out further detail.

Could the Minister provide a little more detail? I think he will share our intention on this side of the House to ensure that young people have the best possible start to their career, in terms of training and skills and access to the job market. How does the ending of this apprenticeship offer help encourage that? Youth unemployment is at an all-time high as a result of the global recession; young people find it difficult to get access to the job market when there is an available pool of experienced former employees. What further help will the Government be providing? I understand the Minister’s commitment to apprenticeships—that is not in doubt. However, I am concerned that the prospects for young people of getting a job are as bleak as they have been for a generation. We must avoid the prospect of a lost generation. How does this clause help to do that?

John Hayes (Conservative, South Holland and The Deepings)

The hon. Member for Hartlepool will know that the difference between what is being proposed and what existed previously is that we are not withdrawing the offer; we are amending it. The offer we are making is that anyone who secures an apprenticeship will be funded—hence amendment 65 tabled by my hon. Friend the Member for Beverley and Holderness, to which I spoke when I rose last.

We think that that offer is realistic. For the sake of brevity and clarity I will not say much more, other than that the offer as it stood was less realistic. To say that everyone is entitled to an apprenticeship ignores the salient fact that, if they are anything, apprenticeships are jobs. Employers must be engaged and must offer a job: if an apprenticeship is less than that, it is not worthy of its name. We are determined that apprenticeship should be properly linked to employment. So we wanted to recreate an offer that was real and deliverable, and did what it said on the label.

I accept the argument put by the hon. Member for Cardiff West that the existing offer gave a bit of a poke to the system. Not his most elegant phrase, but none the less it made the point. I take the argument that by raising the profile of apprenticeships, as the last Government did, they assisted the business of establishing apprenticeships as pivotal to skills. I think the hon. Gentleman would want to acknowledge, in similar vein, that we have not only taken up that baton but run with it pretty hard since our election, in terms of funding, advocacy and engagement.

We are looking to build the number of apprenticeships and of employers involved with them, and the number of opportunities at all levels and ages. I hope to be able to report to the House accordingly. So I think it is about making the offer real, rather than in any way diminishing the significance of apprenticeships. I think that everything else we have done makes that clear.

Iain Wright (Labour, Hartlepool)

I understand fully where the Minister is coming from. I agree with a lot of what he says. However, in terms of ensuring that the apprenticeship offer is a real and valid one, one of the levers at the Minister’s disposal in a way that the private sector might not be, is public sector apprenticeships. He has been curiously silent on the possibility of such apprenticeships. There was nothing about that in the Budget a couple of weeks ago.

The great work that my hon. Friend the Member for Cardiff West did on public sector apprenticeships, aided by the hon. Member for Hartlepool, was a good foundation on which the Minister could build. Given the difficulties in the job market at the moment, could not the public sector step up to the plate here?

John Hayes (Conservative, South Holland and The Deepings)

Yes. The hon. Gentleman is right. It would be wrong if we did not emphasise the important part that public sector apprenticeships have to play in achieving the ambitions that I described. The ambition is straightforward: I want there to be more apprenticeships in Britain than we have ever had before. That will include apprenticeships in small businesses, in large organisations and in the public and private sectors. The hon. Gentleman will understand that at times of restraint, things are quite tough in parts of the public sector. None of us hides from that. Nevertheless, there is more that can be done.

I have written to all Government Departments asking them what they are doing. I have pushed the idea—I do not claim it is new and I think the previous Government took a similar view—that every Department should have an apprenticeship champion. I have written to all Members of Parliament saying that they should play their part. Indeed, many of them have either taken on an apprentice or are looking to do so. The changes to the Independent Parliamentary Standards Authority rules—one of the few bright lights emerging from IPSA—have made that more straightforward. Lots of things are happening around public apprenticeships. The Department of Health has allocated £10 million to NHS apprenticeship programmes to create 6,000 new NHS apprenticeships. Even in these tough times, we are not neglecting the public sector.

Iain Wright (Labour, Hartlepool)

I am grateful to the Minister for mentioning the NHS. I have to pay tribute to my right hon. Friend the Member for Leigh (Andy Burnham). When he was Secretary of State for Health he really pushed the prospect of apprenticeships in the health service and that was very welcome. My question is simple: how many additional public sector apprenticeships does the Minister think will be in place this time next year?

John Hayes (Conservative, South Holland and The Deepings)

As a former Minister, the hon. Gentleman will know that it would be inappropriate for me to set a target on the hoof, or even to set a target at all in those terms. Apprenticeships are a feature of economic change. They are a feature of employer engagement. Employers in the public sector need to be encouraged. We need to look at the burdens and barriers. We need to look at the bureaucracy that surrounds apprenticeships. We need to facilitate the process. We need to market apprenticeships. We need to encourage learners. We need to do so much. That is why the Government have committed to the resources necessary to fund the training. We are working closely with the National Apprenticeship Service to market the product. We are delivering a firm and enthusiastic message to colleges and private training providers.

I am putting in place all the necessary measures, the ingredients to grow apprenticeships to record levels. I do not want to be in the business of dictating how many apprenticeships there should be across each Department. That would be out of step with the Government’s approach. We have a more organic view of these things. Get the components right, remove the obstacles and I am confident the system will grow and the hon. Gentleman will be able to judge me on that. When the figures come to the House he will say—he will be the first in the queue because he is a very assiduous shadow Minister, and long may he remain so—“Has the Minister delivered on his ambition?” Not my target but my ambition. I would never be so pompous as to have targets; I merely have ambitions.

Graham Stuart (Conservative, Beverley and Holderness)

May I urge on my hon. Friend a consistent, considered and purposeful application of work and encouragement in this sector? Although I recognise that the belief of Opposition Members is genuine, it was only in the last spluttering hours of the 13 years of the Labour Government that the number of apprenticeships in the public sector started to rise. The record of apprenticeships in the public sector was dire until very near the end, when there was a late push. We need consistency if we are to ensure that every sector—from small businesses right through to the public sector—plays a part in ensuring that we do not have a lost generation, members of which were inherited by this Government in record numbers when they came to power.

John Hayes (Conservative, South Holland and The Deepings)

I shall finish by praying in aid people considerably more worthy and knowledgeable than I am. I was pausing so that Members could object, but clearly they are not going to.

The hon. Member for Liverpool, Walton (Steve Rotheram), himself a former apprentice, has said, “Employers create apprenticeships”. He is right; they do. He emphasised that the link to employment is critical and that we cannot make up a number unless employers are engaged.

The Association of Learning Providers told us in our evidence session:

“The entitlement was always a difficult one because of the employer element within it.”

The Association of Colleges said in reference to the previous entitlement:

“We are always unconvinced about that stipulation”.

The UK Commission for Employment and Skills said:

“The Bill’s amendment is a pragmatic response. It seemed a responsibility that would be very difficult to fulfil”.––[Official Report, Education Public Bill Committee, 3 March 2011; c. 105-166, Q119, 219 and 357.]

We are therefore travelling with the tide of expert, professional opinion, and we want to do so in a way that delivers such ambition.

I think that there is little difference between Members on the two sides of the Committee. There is an absolute determination to deliver on the ambitions that I have set out. Apprenticeships are a pillar of our skills policy, and they bring light to the lives of those who are engaged in them, just as I want to bring light to the Committee in my own humble way. I hope, on that basis, that the hon. Member for Hartlepool will accept that this is a sensible progression—an evolution if he likes—of a start that was made previously.

Iain Wright (Labour, Hartlepool)

The Minister’s comments have been illuminating, but I want gently to point out the levers at his disposal because the public sector is a very large employer and the Government have huge potential to provide apprenticeships through procurement. Hopefully the Committee will soon discuss new clause 12, which is similar to a private Member’s Bill promoted by my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell). There is a huge potential for locking in apprenticeship places as part of the procurement model. I acknowledge the Minister’s commitment, but I ask that he looks at the provision afresh to ensure that he uses all the possible levers at his disposal to allow him to achieve his ambition.

John Hayes (Conservative, South Holland and The Deepings)

Yes, one is never too old to learn, and it is absolutely right that we look at a range of levers to catalyse such public sector apprenticeships. The hon. Gentleman and his colleagues have engaged in discussions with me on procurement, and we will talk a little more about that later because an amendment has been selected that allows us to do so. He is right, however, that we are not closed-minded at all about the levers that we might be able to use to stimulate apprenticeships in the public and the private sectors. Let that debate continue, because it is good that it should, and it is good that we should examine all the ideas that are brought to our attention.

Clause 66

Iain Wright (Labour, Hartlepool)

I beg to move amendment 237, in clause 66, page 52, line 44, after ‘guidance’, insert

‘which must be aimed at guaranteeing standards of apprenticeship certificates.’.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss amendment 78, in clause 66, page 53, line 7, at end insert—

‘(5) The guidance or directions given by the Secretary of State to the person designated under this section to issue apprenticeship certificates must include measures to ensure the timely delivery of certificates, a competitive apprenticeship market and a process to appeal decisions of the chosen body.’.

Iain Wright (Labour, Hartlepool)

The amendments probe the Government’s thinking on how they will safeguard standards of apprenticeship certificates. As with the note we received on clause 65, I found memorandum E 99 on clause 66 incredibly helpful, so I thank the Minister for that. I was worried about what role the sector skills councils would have, and the document gives us some clarity. However, paragraph 4 of the note states that in most cases the responsibility for apprenticeship certificates

“will be the appropriate Sector Skill Council (SSC), although in some instances, such as cross-cutting sectoral areas where there is not clear SSC responsibility, this will be another body.”

It would be helpful if the Minister could put a bit more meat on those bones and say how he thinks that the Government can safeguard standards of apprenticeship certificates.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman again draws our attention to the Government’s commitment to apprenticeships. He knows that that was made clear in the comprehensive spending review and then reinforced in the Budget—to the surprise of some because we are in difficult times and we want to get the public finances in shape. It is important that we take this opportunity to say that there are two pillars of the Government’s macro-economic policy: to deal with deficit; and to invest in infrastructure. Infrastructure and investment are often characterised as being about plant and machinery, but they are also about human capital and investment in the most valuable resource of all: the work force. Getting infrastructure and investment right for skills is important—indeed, it is pivotal to the policy.

Amendments 78 and 237 are concerned with ensuring the highest possible standards in the certification of apprenticeship achievements through the guidance to be issued by the Secretary of State. The hon. Gentleman will understand that, again, I want to recognise cross-party consensus and the importance of that aspect of the apprenticeship programme. I wholeheartedly share the spirit that lies behind the amendments, but having welcomed them in those terms, let me explain why I intend to resist them. We are in complete agreement about the prudence of providing guidance in relation to such matters to certifying authorities.

Graham Stuart (Conservative, Beverley and Holderness)

Just to be clear, amendment 237 was tabled by the hon. Member for Hartlepool, while the second amendment was tabled by me. I have not yet had chance to speak to it.

John Hayes (Conservative, South Holland and The Deepings)

That is absolutely the case, and I should have differentiated the matters. My hon. Friend is right; his assiduity is matched only by his perspicacity, as I have said before.

Kevin Brennan (Labour, Cardiff West)

Many times.

John Hayes (Conservative, South Holland and The Deepings)

Absolutely.

We are in agreement with the need to provide guidance. We propose that the directions and guidance will recommend a maximum of 10 days from the receipt of an application for an apprenticeship certificate being issued. It is also intended that there will be a process for handling complaints relating to those matters. We chose not to set out such detail as duties under the Bill for obvious reasons: we wanted to allow sufficient flexibility in the instance of unforeseen circumstances. The Committee will understand that such detail would not be appropriate. As my hon. Friend the Member for Beverley and Holderness has recognised in his amendment, however, it would be sensible to change official guidance to cover such matters, and we shall do so. On that basis, I hope that he will not press his amendment to a Division. Perhaps I can persuade him absolutely of that, without equivocation, by dealing with his points about a competitive apprenticeship market. The Secretary of State will designate one body as a certifying authority, so there will not be a competitive market for issuing apprenticeship certificates, which I know was the worry that lay behind his amendment.

The certificating authority will be required to issue a certificate if an apprentice meets all the completion criteria set out in the framework. There will be one English apprentice certificate of high quality, with strong and consistent branding. The branding of apprenticeships is critical to their aesthetic, and their aesthetic is at the heart of our determination to drive up the appreciation of practical and craft skills. I want the branding of apprenticeships to be much more in those terms. Like the branding of academic qualifications, I want it to enjoy all the riches of the academic aesthetic. To that end, the amendments are useful in giving us the opportunity to make that clear. Fees for issuing the certificates and copy certificates will operate on a non-profit basis that will be set down in regulations.

On the point that the hon. Member for Hartlepool made about sectors, and sector skills councils in particular, I know that the Opposition and I share a deep passion for ensuring standards across the whole gamut of the programme. The hon. Gentleman will see that the measures that have been taken by the Government—I have already mentioned standards and prestige, as well as money and numbers—are about all that. It is not only about quantity but about quality. That quality must be seen to be what it is: the highest kind of competencies conferred on people with the right kind of aesthetic. Part of that is about standards and the specification of apprenticeship standards.

There are those who say that it is impossible to grow the numbers and improve the standards, but I disagree fundamentally. I agree with the TUC about this. It said that there could never be a guarantee of an apprenticeship for young people because apprenticeships are jobs. The Government cannot create jobs or tell employers whom to recruit as apprentices. Unless the standards are high enough, employers will not engage, because they will not think that this is a qualification of merit, and learners will not engage either.

It is right that we channel this through the conduit of sectors, and sector skills councils in particular. The Government have contributed to the work of raising standards with the help of the sector skills councils by issuing a new statutory document, but we have also crowned it with other measures to boost the status and aesthetic of apprenticeships. We already have a good record on the emphasis that we have placed on apprenticeships, but I suspect that the hon. Gentleman and others will require greater assurance. I have set out some of the topics that we intend to be covered in the certification directions and guidance to be issued by the Secretary of State, but I am happy to say on record that all certificates, no matter what body issues them, will have to contain specific and standardised features. That is a requirement of section 11 of the Apprenticeships, Skills, Children and Learning Act 2009, as the hon. Gentleman knows. We will not in any sense dilute or diminish the standards to which he is alluding, and I guess that the determination to maintain standards lies behind amendment 237.

If hon. Members will allow me the privilege of going further still, there is a threat, which I am sure was not the Opposition’s intention, that that amendment could limit the full range of issues that the guidance could cover. We are interested not only in certificates but in the process of certification, which we intend that the guidance will deal with. If the Bill stated that the guidance would focus on standards, other elements that the guidance could cover such as time scale, timeliness and the complaints procedure that I have mentioned could be ignored.

I am grateful to my hon. Friend the Member for Beverley and Holderness and the hon. Member for Hartlepool for tabling the amendments. I will, as I said, do more in guidance, but I assure them that our intention is very much that the standards, the process and the aesthetic of apprenticeships should be enhanced by what we do.

Graham Stuart (Conservative, Beverley and Holderness)

I brilliantly anticipated the fullness of the response from the Minister, which has addressed all the points that I was going to make. That has saved the Committee time because I will not rehearse the arguments again. I am grateful to the Minister for agreeing to issue guidance, as per my amendment, on those three topics, and without further ado, we can move on.

Iain Wright (Labour, Hartlepool)

I join the hon. Member for Beverley and Holderness in thanking the Minister for his reassuring words. The point about maintaining the provision of standards as set out in section 11 of the 2009 Act is welcome, as is his commitment to provide guidance. He might have said this already, in which case I apologise to the Committee, but do we know when the guidance will be issued? Is it imminent? Will that be soon—perhaps spring? It would be useful to find that out.

While the Minister is contemplating that, may I point out that we all share the notion that standards in apprenticeships have to be maintained? The brand needs to be of extremely high quality to provide reassurance for employers, parents and learners. It would be useful if we could work together on that particular point. I do not think that the Minister is receiving any inspiration at the moment, but it would be useful if he could tell us, as soon as possible, when he thinks guidance could be issued.

John Hayes (Conservative, South Holland and The Deepings)

Perhaps, with the hon. Gentleman’s indulgence, this is something that I can return to, but I commit to let him know—[ Interruption. ] I will let him know now, actually. We will issue the guidance imminently, but we cannot issue it until the proceedings on the Bill have been completed. I will return to this matter and confirm some detail before we finish our Committee stage.

Iain Wright (Labour, Hartlepool)

On that basis, I beg to ask leave to withdraw the amendment.

Clause 67

Iain Wright (Labour, Hartlepool)

Clause 67 alters the power of the chief executive of the Skills Funding Agency with regard to the conduct of consultations. In the Minister’s response to the clause stand part debate, could he clarify what he wants to achieve under the clause? We should be concerned about the fact that it is another example of the Secretary of State centralising more power, putting it into his own hands. Before the hon. Member for North Cornwall asks how that is the case, let me quote directly from the clause:

“The Secretary of State may direct the Chief Executive to carry out consultation in connection with matters related to the performance of any of the functions of the office.”

That seems centralising to me.

Dan Rogerson rose—

Iain Wright (Labour, Hartlepool)

However, I have not reassured the hon. Gentleman, so I shall let him intervene.

Dan Rogerson (Liberal Democrat, North Cornwall)

I was seeking to make the point that there is a difference between transferring something that is already a central function and centralising something from a lower level. Sometimes the word “centralising” is bandied about when what is actually meant is that a power is moved from an unelected body to an elected Secretary of State.

Iain Wright (Labour, Hartlepool)

I understand what the hon. Gentleman is saying, but I think that he will recognise—regardless of which side of the Committee he is on—that the Bill does centralise an awful lot of power into the hands of the Secretary of State. Some 50-odd powers are being transferred—or centralised, or whatever we want to call it—to a single authority, which is a matter of concern. Given the concerns that there have been about parliamentary scrutiny on a whole range of issues, including holding the Executive to account through written parliamentary questions and Ministers’ responses to letters, it is right that the Opposition should voice their concern. Will the Minister set out the safeguards that he will put in place to monitor what happens under the clause in practice?

We also have concerns that giving the Secretary of State power to direct the chief executive to consult with specific people effectively means that the Secretary of State can decide who to include and who to exclude, which risks injecting political bias into the process. What safeguards will be put in place to prevent that, and how will the decisions be scrutinised? In theory, the clause does not stop chief executives carrying out other forms of consultation in addition to those that they are directed to carry out by the Secretary of State. Have I interpreted that correctly? How does the Minister think that will work in practice? Will the majority of those consulted be involved as a result of directions by the Secretary of State, or will the Secretary of State only use the power in exceptional circumstances, with the chief executive picking the majority of those consulted, on the majority of occasions? Some clarity on whether and when the Secretary of State would use the power would be helpful. I hope that the Minister can respond reassuringly.

John Hayes (Conservative, South Holland and The Deepings)

I think that I can deal with that very quickly. The hon. Gentleman is right that the clause provides a power for the Secretary of State to direct the chief executive of the Skills Funding Agency to consult specified people on matters associated with the exercise of the chief executive’s function. That builds on the Apprenticeships, Skills, Children and Learning Act 2009. The clause does not prohibit current consultation, or any consultation that the chief executive of the Skills Funding Agency might think appropriate, but it adds powers to encourage wider consultation. It is not a prohibitive power; it is permissive, and should be welcomed.

I shall explain why. The chief executive of the Skills Funding Agency exercises a number of important functions, as the hon. Gentleman will understand. This is as good an occasion as any on which to make a case for politicians, and for Ministers, who are answerable to Committees such as this one, and to Parliament. Ministers, accountable to their electorate and to the House, hold the key to representing the people’s interests. I would not want the people who run agencies not to be encouraged by Ministers, when appropriate, to consult more widely than they otherwise might do. I am not suggesting that the chief executive of the Skills Funding Agency does not currently consult—of course he does—but the extra emphasis on consultation implicit in this part of the Bill is surely welcome, particularly when it comes from an elected Minister, rather than an official. I see this as a chance to champion the role of politicians in the process. I believe in politics and politicians, and I believe that they add value.

A Secretary of State might feel that a consultation should be widened because of its sensitivity and the circumstances associated with it. Ministers should be in a position to make a decision on the basis of either their judgment or information that they receive from a Member of the House, a Select Committee or a shadow Minister. All those groups and individuals have a right to suggest to a Minister that a consultation should be widened, and this part of the Bill allows that opportunity.

Iain Wright (Labour, Hartlepool)

Is there anything in current legislation to stop that happening now? I always ask myself when scrutinising the Bill: what added value is this clause providing? The Minister pointed out that the chief executive of the Skills Funding Agency already consults. Has he noticed anything negative in the 11 months that he has been a Minister to warrant the inclusion of such a clause? I do not see why it is necessary.

John Hayes (Conservative, South Holland and The Deepings)

I think it is important that stakeholders feel that they could approach Ministers with a view about consultation, which Ministers could then pass on to the chief executive of the Skills Funding Agency through a direction. The provision does not create an additional burden on the chief executive. The purpose is merely to provide legislative backing to ensure that proper and regular consultation with stakeholders does take place, and to enable the Secretary of State to offer a steer on that. It is not that I have particular concerns; it is just a matter of principle. As I have said, through Ministers, the House and the Government should be able to exercise a role in encouraging the widest possible consultation when and where appropriate.

Clause 68

Iain Wright (Labour, Hartlepool)

I beg to move amendment 238, in clause 68, page 53, leave out line 24.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss amendment 239, in clause 68, page 53, leave out line 25 to 32.

Iain Wright (Labour, Hartlepool)

The clause effectively reduces the range of courses provided for free. It also lowers the age until which young people can access free courses from 25 to 24. The Bill amends section 88 of the Apprenticeships, Skills, Children and Learning Act 2009, and brings into effect the proposals in the Minister’s skills strategy document, so that the entitlement to fee remission for a first full vocational qualification at level 2 and a specified qualification at level 3 is restricted to those aged over 19 and under 24. The purpose of amendments 238 and 239 is to stop those reductions.

I ask the Minister again: what is his intention in introducing the clause? Is he serious, as I think he is, about wanting to ensure that young people get the skills that they need? If so, can he explain why he is making the reductions? The Alliance for Inclusive Education has expressed concerns that the Bill discriminates against disabled learners:

“Too often disabled learners take longer than their non-disabled peers to gain qualifications if they are able to pass. First, disabled learners may want to leave education earlier than their non-disabled peers in order to train for employment. Disabled learners often leave school because they find school more challenging than others, either because of the level of work required or because their learning needs are not always consistently met”.

Will the Minister address those concerns, and will the Government consider making special provision for those who might need longer to complete their courses? Can the Minister assure the Committee that the move is not purely aimed at making savings? Can he tell the Committee what impact he believes it will have on young people’s access to skills provision?

It appears that 24-year-olds have had a right removed, and a charge will be imposed on adults over 23 who are doing a level 2 vocational course. Is that really what the Government want? I hope that the Minister will look at the amendment favourably and feel able to accept it.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman is right to point out that the subject was rehearsed in the Government’s skills strategy, published last November. I recommend it to anyone who has not studied it in detail, as I have been obliged to do. The essence of the amendments—indeed, of this part of the Bill—is to look again at entitlements. The truth, as he knows, is that we are in a very different place from the one that we were in when the entitlements were introduced. The simple fact is that in the skills strategy, we have to address the financial circumstances implicit in the comprehensive spending review, which took place in parallel with the development of our skills strategy. I was absolutely determined that the skills strategy should be not merely a response to changed economic and financial circumstances, but a fresh look at how we manage and fund skills, and who pays for what.

The question of who pays for what has pervaded the debate about skills for as long as I have been interested in the subject, and no satisfactory answer has really been provided. I wanted to begin to provide an answer. The debate about entitlements needs to be seen in that context. The fact is that in the current fiscal climate we simply cannot fund everything that, in ideal terms, we would like to. We had to look hard at priorities, and it is critical, in our view, that public investment is focused where its impact can be maximised—on individuals who would not otherwise have training, and where the market failures are strongest. Those individuals are young adults and those with poor levels of literacy and numeracy. If we are to fund fully those who need it most, as well as support sustainable levels of adult participation, there needs to be a change in the balance between what Government fully funds, and where costs are shared between Government and other agencies, particularly business and learners.

That is why we have said that we will fully fund a first specified vocational qualification at level 2 for learners who are 19 or over but under 24, and co-fund those for learners who are 24 years old or over. Sharing costs in that way enables us to retain capacity for learner places at level 2 despite an overall budget reduction. We considered carefully at what point we should maintain full funding at level 3, bearing in mind that that is where returns to the learner, in terms of the subsequent income premium that they might enjoy as a result of their acquisition of skill, is higher.

Learners aged 25 and over are already expected to contribute more towards the cost of their training; we propose lowering that to those aged 24 and over. That change is necessary to support our wider package of changes, in which we will move away from grant-funded provision for learners aged 24 and over who are undertaking a level 3 qualification to a more progressive free loan system, which will provide up-front support to enable learners to continue to undertake advanced and higher-level training.

Learners aged 19 to 24 years old will continue to be entitled to full fee remission for their first specified level 3 qualification, in line with our commitment to focus funding on young adults and the low-skilled. We had to make a judgment on where we focused the available funding. Level 3 learners should enjoy the same circumstances as students in higher education over the age of 25, on the basis that we know that the income premium that a level 3 apprentice enjoys once they have gained their apprenticeship is roughly equivalent to that of a graduate. Similarly, in terms of getting and keeping a job, they are as well off as a graduate. The return on their investment of time seems to be the greatest.

Although it is not strictly relevant to the amendments, it is important to say that I wanted to protect basic skills provision and adult and community learning, as I believe that they in particular support learners who are most disadvantaged, and provide important bridges into further learning and acquisition of skills. To do that, we needed to look at the entitlement that previously existed. That is the essence of what we tried to do. It can be justified and legitimised in the circumstances that we now face. I appreciate that there may be differences of nuance between those on either side of the Committee on the issue, but I think the shadow Ministers would acknowledge that, had they been returned to Government, they would have faced similar circumstances and would have had to look at the entitlements carefully themselves.

Iain Wright (Labour, Hartlepool)

I am somewhat disappointed that the Minister is disregarding people who are in need of upskilling. I know that the issue of priorities is always there in Government Departments, and I understand that these are straitened financial times in which the Department is operating; that is caused by the Treasury’s determination to go far and fast. However, looking at the wider point about the opportunity cost of not providing help and support to those people, the Minister has missed a trick. I will not divide the Committee on the amendment, but it is disappointing.

I know the Minister’s commitment to skills across the board; he has been put in a difficult position that is probably not of his own making, but the priorities should have been looked at again. I beg to ask leave to withdraw the amendment.

Iain Wright (Labour, Hartlepool)

I beg to move amendment 240, in clause 68, page 53, line 33, leave out subsection (3).

Clause 68 removes, among other things, the powers of local authorities to develop skills strategies in conjunction with local employers. These have been used successfully across the country—for example, in the west midlands and in the Greater Manchester area—to develop an integrated regional wider skills strategy that seeks to match supply and demand.

I have probably used words that are anathema to the ministerial team, such as “regional” and “strategy”, but I shall persist. The Association of Colleges written submission to the Committee expressed concern:

“This”—

that is, clause 68—

“and Clause 65 do not reflect the stated desire of Government policy to give Colleges greater freedoms to respond to their local community and economic needs.”

That is a big concern, so will the Minister explain any intended benefits he expects to see that will result from the removal of that power, because the amendment would reinstate those powers? I have tried to pursue that point throughout the afternoon. What added value is the clause providing?

John Hayes (Conservative, South Holland and The Deepings)

There is a difference between those who would want to fund and manage skills through a sectoral mechanism of the kind we talked about a few moments ago, and those who see the management of funding skills on a more spatial basis. The origins of some of the specified bodies dealt with in the amendment formed around a view of skills that I do not share. Skills should be funded and managed sectorally. Of course, that is not to say that there is no geographical dimension. Clearly, local authorities, through their economic development function, will have an absolute need to engage with skills systems. Similarly, we would want to encourage local enterprise partnerships to do so. However, the funding and management of skills should not be out of step with the structure, form and character of the economy, which is essentially sectoral rather than geographical. That is not to say that different areas do not have different economic profiles; of course, they do. In essence, however, skills in an economy need to be transportable and defined around purpose rather than around where they are gained and used.

Iain Wright (Labour, Hartlepool)

Does the Minister really believe that? I know he talked about his constituency being predominantly agricultural and relatively low skilled. Is he suggesting that improvements to his local economy will be made as a result of placing an emphasis on sectoral priorities, as opposed to local authorities coming together to share an economic development vision in that area?

John Hayes (Conservative, South Holland and The Deepings)

The amendment would retain a skills landscape dominated by intermediary bodies, formed around the idea—I do not accuse the hon. Gentleman of thinking this—that they might command and control the supply of and demand for skills. I am talking about a much more skeletal arrangement for funding and management that is more dynamic and responsive. Some of the bodies that would be retained if we accepted the amendment—it is an allusion to the employment and skills boards and other intermediate bodies in London and elsewhere that previously prevailed—would create clutter and bureaucracy, making the system less responsive and dynamic.

The Bill will free providers and trading organisations to respond with what employers and learners want, without some of that bureaucracy. In essence, formal powers of control are not necessary; they add to the bureaucratic burden. Although I understand the intention behind the amendment, the experience of recent years has been that those bodies, while well intentioned and not without some value, in the end, in net terms, created a bureaucratic system that bemused employers and confused learners.

We need a system that is much more driven by employer demand and learner choice, which is what we are determined to deliver. T.S. Eliot said:

“Half of the harm that is done in this world is due to people who want to feel important.”

By the way, I do not want to feel important. I want to be important, but I will leave that to one side.

Iain Wright (Labour, Hartlepool)

The Minister is important.

John Hayes (Conservative, South Holland and The Deepings)

I am important for the hon. Gentleman, which is good enough for me. I wonder whether the amendment is not about creating structures that feel important rather than do the business.

Iain Wright (Labour, Hartlepool)

We have a difference of opinion. I am not obsessed with processes and structures; I want to see skills rise dramatically in this country, and I am interested in the means by which we can achieve that. On the basis of what the Minister has said and given the obvious difference in philosophy, I beg to ask leave to withdraw the amendment.

Clause 69

Iain Wright (Labour, Hartlepool)

I beg to move amendment 241, in clause 69, page 54, line 6, at end insert—

‘(aa) sections 11 to 18;

(ab) sections 19 to 39 (except section 29(1)(b));

(ac) sections 40 to 44.’.

The clause deals with raising the participation age, which is one of the most historic educational initiatives in this country over the past century. Ensuring that people stay on in training or education until the age of 18 has been mooted since the Lloyd George coalition. It took a Labour Government to put it in place. What concerns me about the clause is that, in terms of enforcement, which is probably the wrong word—rather, in terms of compliance, or ensuring that raising the participation age is complied with—it is being watered down dramatically.

Amendment 241 would halt that watering down by allowing for a number of provisions to be brought into force by order of the Secretary of State. Those include provisions covering duties on schools and local authorities to support the rise in the participation age, and on creating a duty to provide information to ensure compliance and attendance—for example, the duty on an institution to notify the local authority when it has evidence that a young person is not complying with their duty to participate. There are provisions creating an obligation on employers to make appropriate arrangements for young people to continue attending courses while in employment, and provisions allowing parenting orders or contracts to be put in place where a young person is not compliant.

I can name many organisations—Barnardo’s, in particular—that welcome the increase in the participation age for education and training because they feel that that will help to develop technical and vocational expertise to ensure that the future skills requirements of this country’s economy are met. I have real concerns that the clause waters down the provisions on raising the participation age, so I ask the Minister to consider accepting the amendment.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I begin by restating that we are fully committed to raising the participation age to 17 in 2013, and to 18 in 2015. Members of the Committee know as well as I do that continuing in education or training past the age of 16 means that young people are more likely to obtain higher qualifications, have increased earnings over their lifetime, be in better health and have improved social skills. In turn, it contributes to a more highly-skilled, productive and internationally competitive work force.

Through clause 39, we are returning some sections of the Education and Skills Act 2008 to the more usual position, whereby they can be commenced at a time to be decided by the Secretary of State, rather than at a date set out in statute. That will allow us to delay commencement of the enforcement process associated with raising the participation age. We are determined to avoid young people and parents being subject to that process when it is not appropriate. The hon. Member for Hartlepool initially referred to it as an enforcement process, then changed the word to “compliance”, which sounds softer and gentler. Actually, it is rigorous, and it involves enforcement through severe processes.

We are committed to reviewing the need for the enforcement process for pupils and parents annually. If, at a later date, we consider it appropriate to commence those powers, we will, but enforcement will always be the very last resort. It is our intention to commence, by order, the duties on local authorities and employers in 2013 and in 2015.

Graham Stuart (Conservative, Beverley and Holderness)

I support the Minister absolutely on that point. Criminalising young people for failure of engagement and acting against them is not initially the right approach, and he has said that he will bear that in mind. We must encourage and enthuse people to carry on in education and training. That would be better than using rather crude enforcement mechanisms, unless all else had failed.

Nick Gibb (Conservative, Bognor Regis and Littlehampton)

I agree with my hon. Friend, who puts it more pithily than I did. He is right. We aspire to achieve full participation, but without enforcement. We want young people to participate because they recognise the benefits that it will bring and because our reforms to education and training will create a system that caters for the needs and aspirations of every young person, not only most of them.

Participating in education or training is essential for all our young people. It brings benefits to them and for their future lives, and to our whole society—not only nationally, but in increasing our international standing and competitiveness. I hope, therefore, that with those reassurances, particularly with regard to raising the participation age as scheduled, the hon. Member for Hartlepool will withdraw the amendment.

Iain Wright (Labour, Hartlepool)

The Minister makes a fair point, which was backed up by the Chair of the Select Committee. The criminalisation of young people is the last thing that we want to see. None the less, it is incredibly important, because it is historic, that we have cross-party support for the raising of the participation age to 18 in a couple of years’ time. The Minister’s comments on his and the Government’s commitment on RPA have been helpful, but I remain concerned that the commitment will be watered down. Given what the Minister has said, however, and with a desire to make progress, I beg to ask leave to withdraw the amendment.

Clause 70

Iain Wright (Labour, Hartlepool)

I beg to move amendment 245, in clause 70, page 54, line 36, at end insert—

‘(2A) In section 22 of THEA 1998 (recovery of amounts due from borrowers), in subsection (5), after paragraph (h), insert—

“(i) imposing on borrowers conditions on which an outstanding amount can be repaid in advance of the term date”.’.

Charles Walker (Conservative, Broxbourne)

With this it will be convenient to discuss the following: amendment 244, in clause 70, page 54, line 43, at end add—

‘(5) In section 42 of THEA 1998 (Orders and regulations), in subsection (4) leave out “the first”.’.

New clause 14—Annual reports on student finance—

‘(1) For each academic year the Secretary of State must prepare and publish a report containing information on the impact on public finances of the financial support given to students under section 22 of THEA 1998.

(2) The report must include information relating to the cost of student loans to persons—

(a) considering undertaking a full-time or part-time higher education course; and

(b) currently undertaking a higher education course;

the life-time cost on persons who have completed a higher education course and taken out a student loan.

(3) The first report under this section must relate to the academic year beginning 1 August 2011.

(4) The Secretary of State must lay before Parliament a copy of each report under this section.

(5) In this section “academic year” means a period of 12 months beginning on 1 August.’.

Iain Wright (Labour, Hartlepool)

The clause is incredibly important, but it has frankly not had the publicity that I thought that it would. I imagine that that is because it is tagged, somewhat incongruously, on to an education Bill, and I will discuss whether that is the appropriate legislative vehicle in a moment. With your permission, Mr Walker, I want to speak to new clause 14 first, because that sets the scene for the problems that the Government have placed themselves in. In so doing, and with your advice and guidance, I hope that we might be able to dispense with the clause stand part, but I will accept your judgment on that.

Clause 70 amends the powers given to the Secretary of State in the Teaching and Higher Education Act 1998 to make regulations setting interest rates. As the legislation stands, section 22 of the 1998 Act provides that the interest rates set must be no higher than the rate required to maintain the value of the loan in real terms and must not exceed the specified rate for low-interest loans. Clause 70 gives the Secretary of State wide and substantial powers to set interest rates. It moves the policy of the Government away from zero rates of real interest to one where the real interest rate would be 3% above RPI. I alluded to this earlier, but quite what that has to do with a Bill that makes provisions about education, child care, apprenticeships and training is beyond me. The Minister can perhaps let us know—either here, or if you are so inclined, Mr Walker, in a clause stand part debate—why these provisions are contained in a Bill that is predominantly about schools and pre-19 education.

Mark Hendrick (Labour, Preston)

Does my hon. Friend, like me, think that perhaps the Government hope to sneak the measure through quietly without the publicity that he mentioned? On a day when the vice-chancellor of the university of Central Lancashire rang me to say that it, along with many other universities up and down the country, would be charging the maximum of £9,000 a year in fees, does this not fly in the face of the £6,000 that was discussed? It was said that £9,000 a year would be charged in exceptional circumstances only.

Iain Wright (Labour, Hartlepool)

My hon. Friend makes an extremely good point. The Government are trying to sweep this under the carpet and do it with as little fuss as possible. Understandably, the trebling of tuition fees from the current level up to £9,000 has received more coverage than the interest rates set on the loans, but I still think that the real rate of interest will act as a barrier for bright kids from poorer backgrounds contemplating university.

Graham Stuart (Conservative, Beverley and Holderness)

We do not want to rehash the argument, but perhaps we need to. Under the new system, the monthly payment will be lower and the lowest-earning 25% will pay less. In terms of progressiveness, the new initiative is better than the previous system. Whatever the political benefits of the shadow Minister saying the opposite and talking about tripled fees when most people will not even pay it all back, I would urge him to see that this is a more progressive system—whether it is affordable is a different matter—and there is no reason why it should put off anyone from a lower-income background from going into higher education. I wish that people like him would stop saying so, stop scaring people off and stop delivering precisely the ill that he says that the scheme does when it is actually the scaremongering of people like him.

Iain Wright (Labour, Hartlepool)

I am glad the Chair of the Select Committee has got that off his chest, but he is wrong. It is not progressive, it will put people off and I am not scaremongering. It will be a high level of debt, which will be repaid over a longer period of 25 to 30 years and the interest paid will not be kept at a steady level to maintain the real value and to ensure that it would essentially be a zero rate of interest. Instead, it will be 3 percentage points above the RPI, which is currently running incredibly high. Surely the Chair of the Select Committee believes that that will act as a massive disincentive to people who are contemplating going to university in the next year or so.

Graham Stuart (Conservative, Beverley and Holderness)

It is a strange kind of debt that is written off at the end of 30 years or if someone ceases to work, and where they do not have to pay anything if they earn less than £21,000 or if they have children and they are not working. It is debt, but not as we know it. It is an undergraduate tax on earnings above £21,000. Only higher earners pay it. If someone starts as a new teacher earning an average £21,500 starting salary, they will pay some £4 a month. The message that the hon. Gentleman is sending out to young people, putting them off with scaremongering, is irresponsible and not based on the facts.

Iain Wright (Labour, Hartlepool)

I do like the phrase, “It is debt, but not as we know it.” We are on planet Klingon when we discuss that. It does act as a disincentive, but I do not want to rehash that argument.

Stella Creasy (Labour, Walthamstow)

Relevant to the clause is the increase in debt that young people will get into as a result of these changes in interest rates. Does my hon. Friend share my concern that, as it stands, those who get into debt and negotiate an individual voluntary arrangement, as a way of managing their debts, are increasingly unable to include those debts in those IVAs? One of the consequences of increasing the interest rate will be that more people will face unsustainable repayments, which will impact on their other debts. As we are seeing an explosion in personal debt, that could be a problem for people.

Iain Wright (Labour, Hartlepool)

My hon. Friend has a fantastic reputation in this House for her championing of consumer credit and financial inclusion. She makes an incredibly knowledgeable and well-put point.

Charles Walker (Conservative, Broxbourne)

Order. I know that the Procedure Committee has said that electronic devices can be used in Committee, but when you are taking part in a debate—this applies to all colleagues—and the Minister is responding, please do not use the electronic devices; listen to what the person responding has to say.

Iain Wright (Labour, Hartlepool)

On a point of clarification. I was not using an electronic device.

Charles Walker (Conservative, Broxbourne)

I know you were not.

Iain Wright (Labour, Hartlepool)

The Deputy Prime Minister has published a report on social mobility today, which everyone wants to see, but the Association of School and College Leaders, in their written submission, stated:

“We would like to see Clause 70 removed altogether. We strongly oppose this change and believe it could have serious implications for social mobility”.

Sam Gyimah (Conservative, East Surrey)

Which of the following does the hon. Gentleman think is a worse situation for students: one in which the Treasury subsidises the interest rate and, given the current financial situation, it arbitrarily limits the numbers that can go to university, or one in which we try to encourage as many as possible to go, where there is an interest rate, but where, if they are not earning above a certain amount of money, they do not have to pay? Which is more of a disincentive to students?

Iain Wright (Labour, Hartlepool)

The hon. Gentleman brings me on to a fundamental point, in regard to not only clause 70, but the whole business model of higher education funding that the Department for Business, Innovation and Skills is putting in place. There is a strong relationship between the level of fees charged, the interest rate on loans, as in clause 70, the amount of money that is available from the Government to higher education for research funding and student numbers.

The Committee would agree that incorrect assumptions about any particular aspect of that business model will have huge implications for other parts of that model, to the detriment of social mobility—as I said earlier—to the viability of the university sector and to this country’s ability to exploit the knowledge economy of the 21st century and to be a leading economic power in the globalised world, which we all want to see. Get one aspect wrong or one assumption of the model incorrect, such as average fee levels, and the whole system comes crashing down. It has become increasingly apparent that the Government have their sums wrong. The policy, which the Minister might acknowledge, is in complete and utter disarray.

In doing their sums for HE funding, implicit in which is the level of real interest that will be charged on the loan, the Government made a clear assumption that average fee levels would be £7,500 per annum. However, we all know now that that assumption is widely out of kilter. The Leader of the Opposition, my right hon. Friend the Member for Doncaster North (Edward Miliband), when questioning the Prime Minister last Wednesday, stated that 78% of higher education institutions—18 out of 23—have announced that their proposed tuition fees will not be £6,000, not the average assumption of £7,500, but the maximum possible of £9,000. The latest universities to announce their fee levels for 2012 in the past few days include the university of Central Lancashire, located in the constituency of my hon. Friend the Member for Preston, the Royal Agricultural college and Kent university, all of which plan to charge £9,000. It seems clear that the highest possible level for fees, £9,000, is not the exception, as the Government suggested, but the norm. That makes the Government’s model, including the points in clause 70 about interest rates, completely and utterly unsustainable.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to spike the hon. Gentleman’s guns as he is just getting going, but we do not know what anyone is going to charge because the amount that a university charges depends on its satisfying the access requirements. That has not been done. The Deputy Prime Minister was questioned on that today in the House, and he made exactly that point. Until that matter is resolved, we cannot speculate on what people are going to charge.

Iain Wright (Labour, Hartlepool)

Perhaps the Minister will intervene on me again. It is my understanding that the access tsar, or whatever one wants to call him, said that he does not have the power to say to higher education institutions that want to charge £9,000, “I am not happy with what you have said on widening access, so I demand that you reduce your fees in accordance to what I think.” Is that correct? Has he got the power to do that?

John Hayes (Conservative, South Holland and The Deepings)

I acknowledge that universities are independent institutions, but the reform of student finance that follows the recommendations of the Browne report makes it clear that there is a relationship between fees and access. Browne’s terms of reference, about which I shall talk at length later, stipulated that the considerations around the funding of universities should be tied to considerations around widening participation. It has been made clear that assumptions about that will be built into the issues that the hon. Gentleman raises. The Deputy Prime Minister made that clear on the Floor of the House today, and far be it for me to second guess him.

Iain Wright (Labour, Hartlepool)

Any pronouncement from the Deputy Prime Minister fills me with reassurance.

Stella Creasy (Labour, Walthamstow)

Will the Minister comment on the evidence that we heard in the Public Accounts Committee last week from the permanent secretary at the Department for Business, Innovation and Skills? We talked about the problems and risks that the new higher education funding model will create as a result of the increased fees and the problems that that would create for the public subsidy from the increased interest rates. Such issues will cause problems for our abilities to deliver the kind of higher education system that we want.

Iain Wright (Labour, Hartlepool)

My hon. Friend must have been reading my notes over my shoulder, because that is the exactly the point that I wanted to raise. The issues are all implicitly linked. The business model stands and falls together.

Meg Munn (Labour, Sheffield, Heeley)

Will my hon. Friend give way?

Iain Wright (Labour, Hartlepool)

I will give way to my hon. Friend, who has a world-class university in her city.

Meg Munn (Labour, Sheffield, Heeley)

Two world-class universities. The point that those universities made to me is that they cannot simply, particularly in the case of Sheffield Hallam, afford to look cavalierly at not charging £9,000. They are looking at it carefully, because if they do not, with the withdrawal by the Government of the teaching fund, they will simply lose thousands of pounds, which will mean that they cannot keep their world-class status.

Iain Wright (Labour, Hartlepool)

That is a fair point. Universities are under two pressures. The first, as my hon. Friend states quite rightly, is the dramatic cut in public funding to higher education institutions as a result of the business model. The second is the perception of the quality of the brand. If a university—Sheffield Hallam, Sheffield university or whatever—charges £6,000 and its rival in the city charges £9,000, does that send a message to potential undergraduates that that university is inferior to others elsewhere? Universities have to grapple with that.

Julie Hilling (Labour, Bolton West)

Does my hon. Friend agree that the courses that have lost all or most of their teaching grant are often those that train people for professions such as youth work or for work in the public sector, where they will never earn big money? They will earn more than £20,000 and they will have to pay back their grant, so they will be paying back their loan over 30 years, which will be a burden around their neck all that time. These people will be going into public service with great debts around their neck.

Iain Wright (Labour, Hartlepool)

I agree 100% with my hon. Friend.

Let me go on to the business model, because I want to explore the accounting techniques—I can hear the groans as I speak. The Government pay student tuition fees to the institution and then recoup the money from the students once they have graduated and are earning more than £21,000. In Government accounting terms, the so-called resource accounting and budgeting, or RAB, classes the subsidy element as the face value of loans in any one year, less the present value of future repayments. That is known as the RAB charge.

The Government think they have played a rather clever trick by looking as if they have reduced DEL—the so-called departmental expenditure limit—by keeping only the RAB charge in that DEL. In so doing, BIS Ministers can look like very good boys with the Treasury, everyone gets promoted and everyone feels better about themselves. However, the model fails to take into account the assumption we discussed regarding average fee levels.

The higher the average fee level, the higher the average fee loan, and that increases public spending in two fundamental ways. First, rather obviously, as the face value of loans rises, the total value increases. Secondly, with a larger loan, the likelihood that graduates repay the debt in full is reduced, so the present value of future repayments goes down. The Department’s exposure and the risk of higher public spending are therefore dramatically increased.

If the average fee is higher than the Government assumed in their calculation, as it clearly seems to be, that will have a number of consequences, and the clause will make matters worse in the wake of that chaos. In the medium term, a higher average fee might mean—the Minister might provide a degree of clarity on this—that that the real rate of interest charged to graduates will have to rise quite sharply, and the clause allows that to happen. More immediately, it might mean that student numbers will have to be cut still further, on top of the 10,000 reduction in places that the Government have already announced. Equally, it might result in a cut in research funding, which would mean that this country would find it difficult to compete with the best research institutions in the world. As I said, I hope that the Minister will give an indication of which options—whether a rise in the interest rate, cuts in student numbers or cuts to the research budget—are being considered.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to spoil the hon. Gentleman’s “When did you stop beating your wife?” question—the ultimate set of options from which no one wants to choose—but he might also consider the issue of how, where, when and in what form people study. As he knows, that has a profound effect on unit costs and funding.

The rest of the debate is in Hansard.