Westminster Hall

Tuesday 18th March 2014 Westminster Hall

Tuesday 18 March 2014

[Mr George Howarth in the Chair]

Teaching Assistants

Tuesday 18th March 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Elizabeth Truss.)

09:30

[Alex Cunningham (Stockton North) (Lab)]

Good morning, Mr Howarth, it is a pleasure to serve under your chairmanship for the first time.

The main reason I sought to become a Member of this House was to see that children had opportunities available to them, enabling them to develop, so I am delighted to have secured today’s debate on the importance of teaching assistants to our children and the whole school system. They add tremendous value to classrooms throughout the country. I hope to be able to counter the attitude of some, which is that they are a high-cost, low-return intervention. I want this House to celebrate their achievements and recognise the positive role they play in developing our children’s future.

I hope to emphasise the huge potential and promise of teaching assistants in improving and enriching educational outcomes, because these valuable assets are currently undervalued, underpaid and their contributions are largely unrecognised. I hope that this debate sets the record straight on this matter, once and for all.

Like many hon. Members present, I have long argued that those teaching our young people and assisting their learning are of the greatest importance to all our lives. That is why I not only supported the call for our teachers to be properly trained and qualified, but tabled early-day motion 753 in November, to recognise the immense value teaching assistants bring to classrooms and schools throughout the United Kingdom.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend is right; there is a difference between teachers and teachers’ assistants. There is no intention that teachers’ assistants should replace teachers—we always have to make that clear, because that is a common misapprehension—but, equally, we can value them by giving them better training as well.

[Alex Cunningham]

I agree with my hon. Friend and will, later in my speech, develop the point about the importance of teaching assistants assisting and teachers teaching.

I am in no doubt that we need great teachers at all levels of learning, each one equipped to deliver a modern education, based on an up-to-date understanding of developments in teaching practice, specific subject knowledge and the latest in educational tools and technology. However, a report from Reform in 2010 took this argument further—much too far, I would argue—when it suggested that Ministers should remove

“the various Government interventions into the cost and size of the teaching workforce”

to increase accountability of schools to parents and to strengthen management and performance. The report went on to contend that a natural consequence of that would be

“a fall in the number of teaching assistants, since the value of the rapid growth in their numbers it claimed, is not supported by the research evidence”.

To give some background to today’s debate, a significant increase in teaching assistants resulted from the 2003 workload agreement in England and Wales—an effort by the previous Labour Government to raise standards in schools.

[Lindsay Roy (Glenrothes) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth, and I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing this important debate.

Teaching assistants are an invaluable asset to youngsters on the autistic spectrum. What would be the likely impact in classrooms of a diminution in the number of people who are involved in that role and of those involved in their training and development?

[Alex Cunningham]

I have been amazed by somebody working with children with special needs; I will give that example later. Those people play a vital role and children with special needs in particular would suffer directly as a result of any reduction.

The aim of the workload agreement was simple: to allow teachers to teach. To do this, the agreement sought to lessen pressure on teachers by reducing the administrative bureaucracy and cutting teachers’ hours through the creation of new and expanded school support roles, including teaching assistants and higher level teaching assistants, and providing extra resource and high-level support for teachers.

Teaching assistants now make up more than a quarter of the total school work force in England, with more than 359,000 in classrooms across England alone. The vast majority—almost 250,000—work in primary schools; almost 20% are in secondary schools; and 9% are in special schools. With primary schools spending £2.8 billion on teaching assistants and support staff in 2010-11 and secondary schools spending £1.6 billion during the same period, such support accounts for a large proportion of the annual education budget. It is for precisely this reason that the role and worth of teaching assistants have been in the public spotlight, particularly since questions were raised several years ago about the value for money that they provide.

[Paul Blomfield (Sheffield Central) (Lab)]

My hon. Friend’s debate is critically important. Many of us have been concerned that the pressure on budgets will lead to the loss of teaching assistants. Does he note that one of our biggest concerns as a society at the moment is adult literacy and numeracy? Does he recognise the research from the Education Endowment Foundation, which highlighted the fact that teaching assistants, used effectively, can play a particularly important role in developing literacy and numeracy among children?

[Alex Cunningham]

Yes, that is most certainly the case. Many years ago my wife was a volunteer assistant with adult literacy. I recognise so much the benefit of one-to-one opportunities for children with particular needs, including language and numeracy, who can benefit tremendously if they have that face-to-face contact with a teaching assistant.

The report by the Institute of Education, “Deployment and Impact of Support Staff in Schools”, was surprising, in that it found a negative relationship between the amount of teaching assistant support and academic progress in students. Similarly, Reform’s report also suggested that as much as £1.7 billion could be saved each year, through reducing the costs associated with teaching assistants, and repeatedly contended that teaching assistants

“have a negligible effect on educational outcomes”,

and even claiming that their interventions can

“harm a child’s education”.

However, these findings are very much the result of a Government who focus squarely on resource allocation and productivity per pound spent, rather than on actual educational outcomes and opportunities provided. To put it another way, this is ideologically driven attentiveness to cost at the expense of value. Indeed, several articles last summer reinforced this point. A piece in The Sunday Times, for instance, appearing in the run-up to the comprehensive spending review, argued that teaching assistants should be cut, as the evidence suggests that they do not have a positive impact on pupil attainment. In a similar fashion, an article in the Daily Mail also reported that officials from the Treasury and the Department for Education were considering mass reductions in the number of teaching assistants working in our classrooms, citing an effort to

“save some of the £4 billion a year spent on them”.

Again, the focus was primarily on finances, with the article suggesting that schools

“could improve value for money by cutting the number of teaching assistants and increasing class sizes”.

[David Simpson (Upper Bann) (DUP)]

Further to the point made earlier with regard to special needs, the special needs schools in my constituency have expressed to me that they could not survive without classroom assistants—teaching assistants—who are invaluable. Does the hon. Gentleman agree that more effort needs to be made to give them encouragement that there is a career for them and that they may, perhaps, move on to full-time teaching?

[Alex Cunningham]

It is down to training and the quality of the teaching assistants. If we can help them develop their careers properly, with ongoing professional development—I will mention that later—it will add real value for special needs children and children across the piece.

[Mr Steve Reed (Croydon North) (Lab)]

Last week, I visited All Saints primary school in Upper Norwood. The head teacher showed me around and introduced me to a group of teaching assistants doing one-to-one remedial work with students who had fallen behind in mathematics. Surely, we should support efforts to improve the performance of our students in maths, given the importance of that subject to our global competitiveness and their future life chances.

[Alex Cunningham]

That is most certainly the case. It does not matter whether it is maths, English or anything else. If children with a particular need can get that extra attention with a teaching assistant, the results can be positive.

The claims made in both newspaper articles that I mentioned were based on assertions from Reform, which in turn were highly selective in the evidence used. For example, although it is true that the teaching and learning toolkit produced by a collaboration of the Education Endowment Foundation and the Sutton Trust suggests that teaching assistants have a low impact for a high cost, it is important to note that the toolkit also specifies that this judgment is

“based on limited evidence”.

The implication, of course, is that the sentiment should not necessarily be taken at face value, or at least not without some fairly substantial caveats.

[Lindsay Roy]

As a former head teacher and school inspector, I have direct evidence of the impact on positive discipline and effective learning. Is that not recognised anywhere in the report?

[Alex Cunningham]

My hon. Friend has me at a disadvantage. I do not have such detailed knowledge, but discipline is critical. Teaching assistants have a role in that because they are able to contain a child and give them the attention that they need.

The Education Endowment Foundation makes it clear that a simplistic reading of its evidence is decidedly unhelpful. To be sure, the toolkit also specifies that teaching assistants can have a positive impact on academic achievement, but that assessment was not given equal weighting by Reform. The Institute of Education’s research openly criticises the idea of cutting teaching assistants as being

“only based on a partial reading of the evidence”.

The institute says that cutting teaching assistants would

“do more harm than good for students, teachers and schools.”

It is sad when institutions pick and choose what they want from research and distort it to give a particular impression. In fact, the Institute of Education’s original research found that support staff can have a positive effect:

“there is more pupil classroom engagement in the sense that pupils are more on-task and less off-task”

when teaching assistants are in the classroom. If that were not enough, the research confirmed that the results

“were not attributable to pupil characteristics”.

The research also found that the results were not attributable to

“decisions made by TAs.”

Instead, they resulted from

“the way schools and teachers deploy and prepare TAs—factors that are out of TAs’ control”.

The report’s intention seems to have been to generate scaremongering headlines, rather than to address the real issues that affect teaching assistants, which I hope to do today.

Before I continue, it is important that we are clear that “teaching assistant” is something of a catch-all term. Teaching assistants carry out a huge range of responsibilities to support teachers, ranging from administration to face-to-face work with children, and I do not doubt that they form a central cog in the modern education system. Many teaching assistants, however, feel that their contribution to education is poorly understood and undervalued. With Reform’s scaremongering being picked up by the mainstream media, many now fear that Government cutbacks and the need to make savings in departmental budgets will inevitably lead to their role being earmarked for job losses.

Although I understand that the Department for Education does not currently have plans for nationwide reductions in teaching assistant numbers, I cannot imagine that my unofficial reassurances will provide comfort to those who see their role as being directly in the firing line. I am therefore sure that teaching assistants would welcome confirmation from the Minister that no plans exist to axe teaching assistants and other support staff through a centrally driven edict.

There is no doubt that the Government’s plans for the future role and contribution of teaching assistants are in need of clarification. Despite the crucial functions that they fulfil, clarity for vital support staff has been notable by its absence. For much of this Parliament, the Government have remained indifferent to teaching assistants and other support staff, rarely mentioning their roles in documents that detail future policy intentions.

The previous Labour Government legislated for a school support staff negotiating body at the end of the last Parliament, but the body, which was intended to look after the pay and conditions of support staff, was abolished within the first year of the coalition as quangos were indiscriminately eliminated as part of a cost-cutting drive. Similarly, the Government have axed national funding for higher level teaching assistant training and have archived all the national teaching assistant and higher level teaching assistant training resources and guidance, with high-quality training for teaching assistants becoming just another victim of the coalition Government’s austerity package.

On that point, it is worth noting that early-day motion 753 had broad multi-party support, although not a single Conservative Member cared to add their name to the motion recognising the difference that teaching assistants make to the education and support of children in our schools. It is little wonder that stories suggesting staffing cuts are causing anxiety within the education profession.

Last year saw two separate days to celebrate the contribution of teaching assistants in classrooms across the country, and I understand that greetings card manufacturers got in on the act, too, to recognise the value that teaching assistants can add to education. Well, they would, wouldn’t they? Although I am sure that, in many cases, teaching assistants ought to be used more effectively, most contribute very positively to education, which is clearly evident in the best cases.

Mark Fielding, for example, is a teaching assistant from Salford who worked one-to-one with a year-11 pupil who has attention deficit hyperactivity disorder. Rather than working in a class-based environment, Mark helped to transform the pupil’s attainment from predictions of Es in maths and English in November to achieving Cs in June. Similarly, Mark has worked with a group with behavioural problems to raise their opportunities. Many were expected to leave school with no qualifications, yet, after Mark’s interventions, all achieved at least 2 GCSEs at C or above.

Guy Smith from Richmond worked with a year-11 student who was involved in offending behaviour and substance misuse and whose attendance at school was dropping. By attending youth offending team meetings with the pupil and providing support in lessons and with homework, as well as offering a contact to speak about any problems the pupil was having and attending meetings with the pupil’s child and adolescent mental health services staff and social workers, Guy helped the student to achieve 5 GCSEs at A to C. The student is now on a business administration apprenticeship with Richmond upon Thames borough council.

Put simply, there is more to be gained from sensible investment in teaching assistants than there is from running down teaching assistant numbers or from abolishing the role altogether. Our recognition of teaching assistants is long overdue, which is only exacerbated by the recent run of negative publicity that has sullied their good reputation. Although days of celebration and recognition are welcome, we must continue to push for more. We need serious action to confirm and codify the role of teaching assistants in our education system and the functions that they can rightly be expected to undertake, not to mention the remuneration that they can fairly expect, to ensure that their contributions are fully recognised.

I consulted a number of organisations as I prepared this speech, and I well understand why Unison and the GMB, which between them represent the vast bulk of teaching assistants, are anxious about the future for those they represent. With teaching assistants not having the reassurance of a national pay scale, pay varies not only according to geographical location but between and within different school types. That results in great uncertainty for teaching assistants, with terms and conditions that are not readily comparable with others who may be expected to fulfil the same role elsewhere, which can be bad for morale and can potentially leave teaching assistants under-rewarded for their contributions.

Fortunately, school leaders, rather than the Department for Education, are responsible for employing support staff. School leaders have sought to recruit more teaching assistants, despite the Government’s negative agenda, with a 5.7% increase between 2011 and 2012. Some 95% of school leaders say that teaching assistants add real value in schools. In case there is any doubt, Ofsted, which routinely reports on the positive impact of teaching assistants despite not having an official remit for inspecting support staff, looks upon the role of support staff very favourably. For instance, Ofsted’s report last year for Gorringe Park primary school in Surrey reads:

“Teaching assistants are sensitive to pupils’ needs and offer good support and guidance to those who need extra help. Consequently, disabled pupils and those who have special educational needs achieve as well as their classmates and sometimes better”.

That is repeated in schools across the country.

Although I will not go into greater detail, the role of teaching assistants has traditionally been closely connected to our schools’ work with pupils with the highest level of special educational needs in mainstream settings—colleagues alluded to that earlier—in terms of both teaching and inclusion, which must not be overlooked. Largely as a result of the failure specifically to address special educational needs in initial teacher training, teachers have historically not been sufficiently prepared to meet the needs of the pupils who struggle most with learning and engagement. Teaching assistants have taken responsibility by stepping up to the mark in such instances. With reforms that will change how schools address the needs of students with special educational needs due in September, clarification could hardly be better timed.

With schools set to receive additional funding to provide better support for disadvantaged students, it is time that the Government clarified their strategy on teaching assistants, not only on how they are to be funded but on how they are to be trained and qualified to ensure that their contributions have the maximum impact on the education of the young people they help. At the same time, school leaders also need to be clear about the role and purpose they see teaching assistants fulfilling in their schools by defining the contributions that teaching assistants will make to learning. That means initiating specific opportunities for teachers to liaise with teaching assistants in advance of lessons, not only so they know what will be taught but so they are clear on what tasks will be undertaken, their specific responsibilities and the teacher’s expectation of pupils. That happens in many schools, but it needs to happen everywhere.

We must also ensure that teaching assistants are not deployed in inappropriate roles. They are not there to substitute for teachers on a temporary or permanent basis. They are not trained to take a class of 30 children or to prepare detailed lesson plans for a term, and they are not there to help the school stretch the budget by substituting for a teacher, even on the odd day. They are there to assist classroom teachers in helping to enhance the educational achievement of the pupils and to provide that vital one-to-one support that some children need to ensure they reach their full potential. We have to get the roles right, so that teachers teach and teaching assistants assist. We must foster an environment of openness and collaboration if we are to raise standards and rival the best education systems in the world.

[Lindsay Roy]

Is there not a role for the Government to be a catalyst to share good practice?

[Alex Cunningham]

There is always a role for the Government to share good practice, and that is why I hope they will define training for teaching assistants across the country.

As with teachers, one key measure that raises standards is promoting continuous professional development throughout a teaching assistant’s career. That will ensure that their knowledge and skills remain at the fore. That level of training and development will allow teaching assistants properly to deliver specific, high-quality teaching interventions to the advantage of teachers and pupils alike, whether that is specialist support for pupils with special needs, administrative support to teachers to ease the pressure or targeted interventions in other areas of learning.

[Mr Steve Reed]

My hon. Friend is eloquently explaining the many ways that teaching assistants assist teachers in the classroom. One other way they do that is by helping to maintain discipline, which is one of the things that most concerns parents and can create a conducive atmosphere for learning. Does he therefore share my regret that instead of supporting teaching assistants in that important work, the Secretary of State chooses to undermine them?

[Alex Cunningham]

I certainly do. I hope that when the Minister speaks, she will confirm her personal support for the role of teaching assistants across all their duties. The discipline element is important. Some parents tell me that their child is not getting the best opportunities in class because of other disruptive children. Teaching assistants can have a role in working with those children to maintain discipline and so enhance the learning opportunity.

I have said before that education is a dynamic field, but it cannot be greater than the sum of its parts unless teaching as a profession is ambitious and continually striving to improve and to provide the skills our young people need and employers demand. To do that, we must enhance the standards of the teaching professions across the board, including those of teaching assistants. We know that well-trained teaching assistants can make a real difference. The latest research from the Education Endowment Foundation confirms the significant positive effects—as mentioned earlier—that teaching assistants can have on literacy and numeracy

“when they are deployed well”.

Crucially, teaching assistants, when properly instructed and deployed,

“can be effective at improving attainment.”

What we need, then, on top of greater clarity on surrounding roles, is enhanced sharing of best practice on how teaching assistants are trained and deployed to ensure that the myths on teaching assistants are dispelled and their contributions recognised. The very fact that they are valued and utilised in increasingly large numbers should be the starting point for the analysis of their worth.

As I conclude, I pose a number of questions for the Minister. What does she see as the future for teaching assistants? Do the Government plan wholesale reductions? Will the Government consider reintroducing a national pay body? Does she recognise and support the need for formal ongoing professional development for teaching assistants? Will funding for the training of higher level teaching assistants be reinstated to aid development? Properly utilised, teaching assistants are neither low-cost substitute teachers, nor high-cost babysitters. Rather, when deployed effectively, they add real value to our education system and improve the learning and support that our young people can access. It is only right that we recognise that.

09:54

[Mark Hendrick (Preston) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing this very important debate on the value of teaching assistants. Teaching assistants make up something like a quarter of the schools work force and carry out a huge range of responsibilities, supporting teachers and forming a crucial part of the modern education system. Any Member of Parliament who visits schools in his or her constituency will see the excellent work that teaching assistants do and the tremendous support they give to teaching staff. I have seen many schools in my constituency where they are doing a fantastic job in backing up and supporting the work of teachers. Behavioural levels, for example, have improved significantly as a result. Teaching assistants, however, feel that their work is poorly understood and undervalued. They are among the lowest paid in public services, and they are overwhelmingly women and part-time workers. They work hard for little reward, often dealing with the most challenging and difficult children in school. They are very much valued in their communities, as I have seen from my visits to schools.

According to the latest official figures for publicly funded schools in England, there are some 360,000 teaching assistants, representing 27.4% of the schools work force and 25.8% of the full-time education work force. Some 93% of teaching assistants are women, which is an indication of the skew. Some 87%—that is, 312,000 teaching assistants—work part time. The growth in the number of teaching assistants was due to the previous Labour Government’s initiative to raise standards in schools and tackle teacher work load. The teaching professions had a little unease on the introduction of teaching assistants, a little like how the police force felt about the introduction of police community support officers. There was a worry that teaching assistants would try to take on duties meant for teachers, in the same way that police officers worried that PCSOs would take positions. That has not been the case, however. Teaching assistants, as with PCSOs, have provided excellent back-up and support.

On pay and conditions, teaching assistants are some of the lowest paid in the country in the public services, as I have mentioned. Their rates, as the Minister knows, vary across the country and in different schools. They are often paid at the lower levels of local authority pay scales and are under a massively diverse range of contracts and conditions, which vary by authority and school. For example, in local authority schools, teaching assistants are employed by the authority or the school, usually on local authority terms and conditions, and are then deployed by schools. That arrangement frequently causes confusion between local authorities and schools on contracts of employment and employment conditions. That in itself would be bad enough, but the academies have control over staff pay and are not bound by the collective agreements of the National Joint Council for Local Government Services. Larger academy chains conduct their own pay negotiations, while the majority of stand-alone academies follow the national negotiations.

I am deeply concerned that the lack of a national framework for pay and job evaluation means that academies are frequently hiring teaching assistants on lower grades than are appropriate, depressing pay and assigning duties to teaching assistants that are outside their job descriptions. I will give some examples. A teaching assistant in north-east Lincolnshire said:

“I have been regraded from Teaching Assistant level 4 to level 2. I now have two contracts, one at level 2 and one at level 4 for two afternoons per week when I provide…cover.”

A teaching assistant from Plymouth said:

“I have to work one extra week a year with no extra remuneration.”

That cannot be right. For someone to work a week with no remuneration in the 21st century is appalling.

The previous Labour Government rightly recognised that something needed to be done on the shambolic nature of terms and conditions of employment for teaching assistants. Labour agreed to establish a new body: the School Support Staff Negotiating Body, to which my hon. Friend the Member for Stockton North referred. It comprised unions and employers and was created to set pay and employment conditions for the school support staff work force. It was put into statute in 2009, but was cancelled in 2010 by the current Secretary of State, who said that it did

“not fit well with the Government’s priorities for greater deregulation”—[Official Report, 28 October 2010; Vol. 721, c. 116WS.]

As a result, school support staff are still employed badly on low pay.

As my hon. Friend said earlier, there is now a severe threat to teaching assistants’ jobs. Teaching assistants feel that their contribution to education is poorly understood and undervalued. Government sources are suggesting that teaching assistant jobs will be put at further risk. A May 2013 report by the right-wing think-tank Reform, which has been closely linked with the Secretary of State and Conservative party policies, cited past research to argue that savings in schools spending should be found by dramatically reducing the number of teaching assistants and increasing class sizes. Reform claimed that teaching assistants had a

“negligible impact on pupil progress though some impact on teacher productivity”.

It recommended:

“Ministers should support schools that reduce numbers of teaching assistants and allow class sizes to rise.”

In June 2013, as referred to by my hon. Friend, the Daily Mail reported that the Treasury and the Department for Education

“are considering getting rid of the classroom assistants in attempt to save some of the £4 billion a year spent on them”,

and that the director of Reform had said that

“the money spent on teaching assistants would be far better spent on improving the quality of teachers.”

As someone who served, along with the Front-Bench spokesman, my hon. Friend the Member for Cardiff West (Kevin Brennan), on the Bill Committee of the Education Act 2011, I saw that the Government intend to introduce teachers with no academic qualifications. We have a right-wing think-tank saying that

“the money spent on teaching assistants would be far better spent on improving the quality of teachers”,

but the Government are quite happy to employ unqualified teachers, which flies in the face of everything they have been saying.

The Institute of Education ran a project between 2003 and 2009 entitled “Deployment and impact of support staff”. One of its researchers said in The Guardian in early 2014:

“TAs can only be as effective as teachers enable them to be and they shouldn’t have to mind-read. Think carefully about TAs’ contribution to learning and communicate your intentions to them. Inform them of the skills or knowledge the students they support should be developing, and what learning you want them to achieve by the end of the lesson…TAs can have a potentially transformative impact on learning by making small adjustments to their practice. A growing number of schools are reaping the benefits of changing the nature of TAs’ interactions with students”.

The original Institute of Education research found that support staff

“can have a positive effect on teaching and teacher workloads and job satisfaction. We can also say from the systematic observation results that support staff presence leads to pupils being better behaved in the sense that there is less dealing with negative behaviour, and there is more pupil classroom engagement in the sense that pupils are more on-task and less off-task.”

Reform’s ideological targeting of teaching assistants is not supported by academic evidence and does not fit with the reality of the modern school system. Even Reform acknowledged that cutting teaching assistants would mean larger class sizes, which cannot be good. Our pupils deserve better than that. I urge the Government and the Minister to rethink how they view and value teaching assistants. As my hon. Friend the Member for Stockton North said, Ofsted has stated that teaching assistants

“are sensitive to pupils’ needs and offer good support and guidance to those who need extra help. Consequently, disabled pupils and those who have special educational needs achieve as well as their classmates and sometimes better”.

That can only be good for children. Teaching assistants are an essential part of their development.

10:04

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing a debate that is of great importance to this country’s children.

Children benefit immensely from the hundreds of thousands of fantastic support staff in our schools, who do amazing work every single day of the academic year to support qualified teachers and the children in their care. We should value and support all public sector professionals, something which has been overlooked, particularly over the past four yours, because we have some superb teachers and teaching assistants. By any measure, we have the best generation of teachers that we have ever had, which the Government have admitted, and it is about time that the culture of criticism and attack on the professional work force in our schools and across the public sector came to an end. As MPs, who are responsible for public services in this country, it is about time that those who deliver public services, who are expected to deliver such services and to ensure that our children get the best possible education, get the support and encouragement that they deserve and need to do a good job.

[Alex Cunningham]

I am interested in my hon. Friend’s reference to the Government recognising that we probably have best generation of teachers, which is tremendous. Many of them trained over the past 10 to 15 years. Does he agree that Members of Parliament have a responsibility to lead our communities in appreciating the teachers’ expertise and valuing them highly? Communities do not necessarily value teachers in the way that we might expect and hope for.

[Bill Esterson]

My hon. Friend is absolutely right. It is all about culture. If the people at the top show leadership by saying that teachers should be supported and encouraged, and by making it clear what we think of the people running our public services and those responsible for our children’s education, the rest of the country is likely to follow suit.

This debate, however, is about teaching assistants and the support that they provide to qualified teachers, whom I mention because, as my hon. Friend the Member for Preston (Mark Hendrick) stated, we now have a Government who say that teachers do not have to be qualified. It is worrying that that is now the situation in more than half of secondary schools. The role of teaching assistants is directly linked to that point and I will return to that later in my remarks.

The support that teaching assistants are able to offer, where we see good practice, provides support for teachers, whether helping in small groups or one-to-one situations, working with teachers to plan activities, or doing administrative tasks, or a combination of those, and many other activities.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is outlining the benefits offered by teaching assistants. Does he agree that if the Government are contemplating significant changes, they should think about what damage would be done were they to reduce the number of teaching assistants? They not only help out with maintaining good order in classrooms and dealing with difficult-to-manage children, but offer a much-needed guidance role to special needs children in many schools.

[Bill Esterson]

I agree with the hon. Gentleman, who makes an excellent remark. I hope the Minister responds to that point and other comments of a similar nature.

Teaching assistants also allow teachers the time to plan lessons, to mark work and to carry out their own duties and responsibilities, but such things can happen only if teaching assistants are supported in the right way. My hon. Friend the Member for Stockton North made a point about support and continuing professional development for teaching assistants. The same applies to teachers.

Under the previous Labour Government, an agreement was reached for teachers to have some time each week for planning, preparation and marking, which is an important part of learning. If teachers have that time, they are in a stronger position during lessons, and support from teaching assistants contributes to that. Without good planning time and good preparation, learning can only suffer. Allowing good planning time and preparation is one of the values of having good teaching assistants.

The Reform report referred to by my hon. Friend the Member for Preston drew on evidence to show where practice has not always been very good. It is worth reflecting on where things have gone wrong in the past; that is part of learning for the future. Is it any surprise that teaching assistants struggle when they are forced to take classes without proper training and expertise; that children may not learn as effectively when teaching assistants are required to do a significant amount of teaching, without the support, training or preparation to enable them to support children; or that when teaching assistants are given responsibility for the children who need the most support, and are then left to their own devices, learning outcomes are not that good? Of course it is not a surprise; but cherry-picking the evidence and saying that it demonstrates that teaching assistants do not perform a valuable role misses the point. The evidence makes the case for giving them the support and training that they need to do a good job; it is not an argument for not having teaching assistants in the first place.

There is a big difference between leaving unqualified teachers in charge—whether they are teachers in academies or free schools, or teaching assistants—and providing teaching assistants with support and training from qualified, experienced teachers, so that they can provide structured, individual support, one to one or in small groups, and receive continuing back-up and review from the teacher. Those are very different situations. It is clear that where there is proper structure, support and review, learning improves. It is a shame that some people cherry-pick information and evidence to support their conclusions.

I looked at the report, “Deployment and Impact of Support Staff in Schools”, to which my hon. Friend the Member for Preston referred, which made the point:

“Given that lower attaining pupils are more likely to be given extra support it is vital that this is well organised and effective.”

To me, that statement summed up what is needed. At the time of the report and its analysis of the effectiveness of teaching and learning support assistants, the big expansion in numbers had only just started. There was scope for a great deal of learning about the most effective way of deploying them. The authors of the report analysed what was going wrong and what constituted good practice, and made recommendations:

“More needs to be done to prepare newly-qualified and in-service teachers with the necessary skills and preparation to help them manage the growing number of support staff with whom they work.

More needs to be done to prepare, particularly classroom based, support staff for their role in schools, especially for the now common, pedagogical, instructional role with pupils.

More time should be available for joint planning and feedback, and recommendations should also be made concerning ways in which TAs can be deployed effectively.”

Commenting on the deployment of support staff, the Institute of Education said:

“Schools should examine the deployment of classroom or pupil based support staff to ensure that they do not routinely support lower attaining pupils and pupils with SEN”,

which makes the point that children with the greatest needs need the greatest support from the classroom teacher. Some evidence shows that there have been times when the opposite has happened. It was published in 2009, so it has been available a long time. The report stated:

“We suggest that pupils in most need should get more not less of a teacher’s time”—

I hope that the Minister will respond to the point about special needs children—and added:

“Teachers should take responsibility for the lesson-by-lesson curriculum and pedagogical planning for all pupils in the class, including those pupils being supported by support staff.”

The evidence in the 2009 recommendations by the Institute of Education about best practice in the use of teaching assistants to support teachers is entirely consistent with the evidence from the Education Endowment Foundation and the remarks of other hon. Members in the debate. It shows that teaching assistants who are supported, encouraged and trained, who plan jointly with teachers, and who receive the right preparation and constant review, feedback and support are an invaluable addition to the educational landscape. They support children and improve young people’s life chances. We should support and encourage them and celebrate their work, as happened in November. The Opposition are clear about the important role of teaching assistants in schools. The Minister should do all that she can to support them and ensure that good practice is shared and should dismiss the suggestion that teaching assistant numbers should be cut.

[Mr George Howarth (in the Chair)]

Order. The two Front-Bench spokesmen have until 11 o’clock to make their speeches. If the debate concludes before then, I have the power to suspend the sitting until 11 o’clock.

10:18

[Kevin Brennan (Cardiff West) (Lab)]

I am sure that the Minister will have plenty to say and that you will not need to exercise your power to suspend the sitting, Mr Howarth.

I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing a debate—which has, so far, been very interesting—on this important subject, my hon. Friend the Member for Preston (Mark Hendrick) on his thoughtful remarks, and, as ever, my hon. Friend the Member for Sefton Central (Bill Esterson) on his thoughtful and erudite contribution. I also congratulate my hon. Friend the Member for Glenrothes (Lindsay Roy) on his interventions. The hon. Member for Upper Bann (David Simpson) and the hon. Member for East Londonderry (Mr Campbell), although they are not now in their place, are also assiduous in attending such debates.

Schools have always had support staff. My mother was a dinner lady, and dinner ladies and others working in schools, such as caretakers, cleaners and so on, are all part of the support structure in a school. In other words, schools are made up of more than only teachers, head teachers and pupils. It is extremely important, from the outset, that we should take the opportunity to pay tribute to the work of support staff in our schools—not only teaching assistants, but dinner ladies, caretakers, and lunchtime supervisors—because they are part of the fabric of school life and part of the process of caring for, safeguarding and educating our children. Such roles are perhaps not emphasised enough in our debates on education.

[Alex Cunningham]

My granny was also a dinner lady, and I valued her. I used to nip in to see her at lunchtime, and she would give me two old pennies for me to spend in the sweet shop, but only if I ate my school dinner. That was how she encouraged me. Dinner ladies are a tremendous encouragement to children generally, and they help with discipline. My hon. Friend will recognise why I wanted to mention that.

[Kevin Brennan]

I do indeed recognise that. In fact, I am also ancient enough to remember the pre-decimalisation era. There are certain disadvantages, however, for people whose mother is a dinner lady, particularly if they go to the same primary school: despite my picky eating ways, I was forced by embarrassment into eating my school dinner every day, whether I liked it or not. I want to make that tribute from the start, because it is important to remember that. Later, I will talk a little about support staff pay, which has been mentioned by other hon. Members.

Schools have changed immensely in the past couple of decades, particularly in relation to the provision of teaching assistants. When I taught in a comprehensive school between 1985 and the end of 1994, teaching history and economics and eventually being a head of department, there were no teaching assistants at all. Occasionally a special educational needs assistant might appear with a pupil with particular special needs, but teaching assistants were not otherwise present in schools. They would have been a great benefit, which is why there was a big expansion in the number of teaching assistants under the previous Government. They recognised that it was helpful to have support from teaching assistants available, as that would help pupils and enable teachers to get on with the job of teaching, they being the professionals in pedagogy.

Under Labour, the number of teaching assistants trebled. The number of regular, full-time-equivalent teaching assistants overall increased from 61,000 in 1997 to 194,000 in 2010, with the greatest increase in the primary sector, but there was also a 36% increase in the secondary sector, including academies. There was a large expansion, as well as a degree of debate about the effectiveness of teaching assistants and about what jobs they carried out, because they have a wide range of duties when helping out in schools.

The Government have been sending out mixed messages about teaching assistants, and that has been reflected in the debate. I hope that the Minister will, in her response, set out with more clarity the Government’s vision for the future of teaching assistants in our schools. We have already seen the Secretary of State’s failed attempt to dismantle completely the 2003 workforce agreement. That attempt was rejected by the teachers’ pay body, which did not believe that we should return to the days of teachers being expected to undertake many tasks that were not directly related to their teaching. That was the first mixed message given out by the Secretary of State.

As hon. Friends have pointed out, there have also been leaks to the press about other messages, presumably from the Secretary of State, or perhaps from some of his special advisers on the lunatic fringe—we never know the sources of such press stories for sure. One story, which appeared last year in the Daily Mail in response to the Reform report, has already been referred to:

“The Treasury and Department for Education are considering getting rid of the classroom assistants in an attempt to save some of the £4 billion a year spent on them...Think-tank Reform found that schools could improve value for money by cutting the number of teaching assistants and increasing class sizes.

Thomas Cawston, the think-tank’s research director, said: ‘We cited a swathe of evidence that questioned the value for money of teaching assistants and demonstrated that their impact on educational outcomes for pupils was negligible.’”

I apologise for quoting at length, but I will quote a little more from what was reported:

“We found that while they were supposed to help teachers, they were actually being allowed to take classes themselves. Not being prepared or qualified to do those classes, they were not doing a very good job.

The money spent on teaching assistants would be far better spent on improving the quality of teachers.”

Understandably, that story led to speculation and to concern and uncertainty in the world of education about the Government’s position on teaching assistants. The Government seem to support the idea that assistants are a waste of money. I do not know whether that message is driven from the Treasury, to put pressure on the Department, or if that is what the Secretary of State for Education and his Ministers believe. I hope that the Minister present will today clear up the matter and give us all—the country, everyone interested in this and the people working in our schools, including teaching assistants, teachers and head teachers—a clear view, rather than strange mixed messages.

My next example is not of a mixed message, in fairness to Ministers, but of a straightforward two fingers up to teaching assistants and support staff, including dinner ladies and others working in our schools. My hon. Friend the Member for Preston, who served as a Whip on the Bill concerned, has mentioned this. Within months of coming to power, the Government abolished the School Support Staff Negotiating Body.

Let me explain. That body was not a national pay review body in the way that the teachers’ one is, or other public sector workers’ bodies are. It was not charged with recommending and setting pay and conditions for staff; it was simply there to provide for the whole country a framework or guide, including descriptions of the type of work undertaken in schools by support staff, such as teaching assistants. It acted as a valuable reference point for school leaders, managers, governors, local authorities, academy chains and so on, so that they knew what the rate for the job roughly was, and what the job undertaken by support staff was—what the job descriptions were, and so on. Through the School Support Staff Negotiating Body, a huge amount of work by everyone involved went into putting together those job descriptions and providing the framework that enabled everyone to have a clear sight of the kind of work undertaken by support staff.

[Alex Cunningham]

The National Education Trust suggests that we should go a step further and introduce professional standards for teaching assistants. Does my hon. Friend have a view on that?

[Kevin Brennan]

So much damage has been done by the Government that we need to attend to that first and reconstruct something from the vandalism undertaken by Ministers immediately following the election. I said it at the time, and I will repeat it now: that was one of the most short-sighted, mean-spirited decisions undertaken by the Government when they came to power. So committed are they to a market ideology that they could not see the value or usefulness to school leaders, governors, leaders of academy chains and others of having a reference point for job descriptions and the work being undertaken, to enable a judgment to be made about a job’s value. The ludicrous but sadly real example read out by my hon. Friend the Member for Preston of a teaching assistant being employed on different terms from someone else while undertaking the same job is a good demonstration of the problem.

Let us combine that decision with the Government’s deregulation of teaching, whereby they are saying that people now need no qualifications whatever to become teachers in state schools. There are all sorts of jobs out there for which people require qualifications, including working for McDonald’s, but under the Government’s right-wing deregulation of the teaching profession, people do not need any qualifications whatever to teach in our schools.

In answer to criticism of that policy, the Government cite individual examples of people without teaching qualifications who teach in private schools. There are a few things to be said about that. One is that it is not the individual example that counts, but the impact over time of deregulating the system and allowing unqualified teachers into the classroom on the quality of teaching and on the teaching profession. Over time, as we have seen in Sweden, the results of that kind of deregulatory, right-wing approach are disastrous, with schools failing and being closed down. As for private schools, the Minister never mentions that of the 50% of private schools inspected by Ofsted because they are non-association schools, 13% were found to be inadequate in the previous Ofsted inspection report, published in December. Those are the sorts of schools she seems to be suggesting we should follow.

Taken together, those mixed messages are causing a real sense of uncertainty within our schools. We therefore want clarity from the Minister today. What is the Government’s vision for the future of teaching assistants and support staff in our schools? Are there plans to axe them, as hinted by sources in the Department for Education in that Daily Mail article last year? Will she clear up the position once and for all today, and give us a clear message on the future for teaching assistants?

Hon. Friends have talked about the debate and controversy since the publication of the Reform report last year. That report has been used by some—including, it would seem, people briefing on behalf of Ministers and the Treasury—to say that we should reduce the number of teaching assistants in our schools.

Recently we have also had a helpful report from the Education Endowment Foundation, an organisation that has received an endowment from the Government—a positive policy that we fully support. Its recent report concluded that teaching assistants can improve literacy and numeracy skills when they are deployed well. Those conclusions came from a series of controlled tests; I will not go into the details, but the foundation used a group of reports based on trials in 238 schools, giving us a major new source of independent evidence to help schools use teaching assistants to narrow the gap—the professed aim of the Government and the Opposition.

It is important to pay attention to the evidence, positive or negative, rather than simply cherry-picking it. When we look at that evidence, the conclusions are interesting. The Times Educational Supplement has recently looked at what the Education Endowment Foundation has produced, and said:

“Children struggling with reading and maths make significant progress when given as little as 30 minutes’ individual attention a week by a teaching assistant, research has revealed.

Primary school students who received two 15-minute maths sessions a week made three months more progress over the course of a year than their classmates, according to a study published today by England’s Education Endowment Foundation”.

The foundation has made a useful contribution to the debate by publishing its research.

The Education Media Centre recently made an interesting assessment of research around this issue, which shows that there are concerns about how teaching assistants are deployed in our schools. That is the key issue: we need to get away from the question whether we should have that kind of support within our schools and on to the issue of how teaching assistants are best deployed for maximum impact. The way that Reform—it has an agenda, to be honest—used the research last year, and was backed up by sources purporting to speak on behalf of Ministers, was pretty disgraceful. It was used simply as a way of saying that we need to get rid of the support that is available through having teaching assistants in our schools, rather than looking at what works when we deploy them.

In the Education Media Centre’s recent article, which can be found on its website, the following point was made:

“Therefore, schools must make interventions, delivered by properly trained TAs, part of a coherent, integrated package of learning for those falling behind…On the basis of the available evidence, it can be argued schools must fundamentally rethink how they use TAs and ensure they add value to teachers, not replace them.

We need to make sure TAs are not given primary responsibility for pupils in most need and are used in ways to allow teachers to spend more time with these pupils.

Allied to this is the need to develop what we might call an improved teaching method for TAs: a way of interacting with pupils using effective styles of questioning to promote and support independent learning.

Finally, we need to guarantee time for teachers and TAs to liaise and seriously invest in TAs’ professional development.”

The conclusion that I and most hon. Members here have drawn from the evidence is that we should get away from a debate about cutting away swathes of teaching assistants, which is what we were hearing last year, and get on to a debate about what works, as shown by the evidence. The evidence clearly shows that teaching assistants have a discrete role that needs to be supported by professional development. It would be a great benefit if the Government could indicate their support for teaching assistants by putting in place once more a proper negotiating body for support staff, so that they feel that they are valued and there is a future for them. That would also be of great assistance to schools.

The evidence shows that teaching assistants work best when they are allowed to perform their discrete role and are given the support to do so, rather than being used simply as a way of covering lessons or filling in holes. We would welcome the Minister giving us a clear message today on these questions. What do the Government think the future role is for teaching assistants? What will they do to enhance that role and give assurance to people working in those roles that they have a future? What are the Government doing to promote the best evidence on how teaching assistants are best deployed for the purpose for which they are there—in other words, to help the education of pupils?

10:39

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this important debate. I know that he is a passionate supporter of the work of teaching assistants and the valuable and important contribution that they and others make. I also know that there are many across the House of Commons who support teaching assistants. Yesterday, I bumped into the hon. Member for Barrow and Furness (John Woodcock), who is training to be a teaching assistant himself. I note that he is sorry that he could not be here to speak in this debate.

There were some aspects of Opposition Members’ speeches with which I was not quite up to date. I was in school after decimalisation came in, so I cannot relate to that experience. In fact, I did not actually eat school dinners at my primary school. There was a chip shop over the road, and the school provided a special lollipop lady to take us to the chip shop at lunchtime instead. So I did not avail myself of the services of the school dinner ladies at the time, but lollipop ladies were also an important part of our school infrastructure.

The Government value the important contribution made by teaching assistants, often in challenging circumstances, to the teaching, effective management and organisation of schools. We also value hugely the role of teachers and we recognise that teaching is the No. 1 factor in high-quality education systems.

[Lindsay Roy]

Given the Minister’s recognition of the valuable role of teachers and teaching assistants and what she said about the importance of this debate, can she explain why the seats opposite are empty?

[Elizabeth Truss]

I am sure that it is because Government Members have every confidence that the Government are taking action on the issue.

We know that teaching assistants are dedicated to improving the learning and life chances of children and young people in our schools. I note that the number of teaching assistants has increased under this Government: the number of teaching assistants employed in maintained schools and academies was 97,000 in 2005 and more than 200,000 in 2012. It is not just the Government who value teaching assistants; we know that schools value the roles that TAs perform.

[Alex Cunningham]

I am absolutely delighted to hear the Minister speak so glowingly about teaching assistants and recognise that numbers have increased under the current Government. Can she therefore tell us that central Government will take no action that will discourage the recruitment of teaching assistants in the future?

[Elizabeth Truss]

I can confirm that. I was going to come to it later in my comments.

Over the time in which teaching assistants have become part of our school life, their role has developed from providing general administrative and logistical support to teachers to supporting the attainment of groups of pupils in schools. As many Members have said, teaching assistants are not employed simply to support the classroom teacher; they play an active role to improve children’s literacy and numeracy skills and behaviour, and often work tirelessly to help children with special educational needs and complex emotional, medical and physical needs achieve academic success. As many hon. Members have mentioned, evidence from the Education Endowment Foundation and others has shown that to be the case. Teaching assistants also have a positive effect on teacher morale and reduce stress, which is another important factor. It is absolutely right to consider teaching assistants as part of a school team made up not just of teachers—the pedagogical experts—but of all kinds of support staff, including teaching assistants, those who work with school meals and school librarians. We should see them as part of a whole.

In my comments, I want to address a misconception about the future of teaching assistants and the claims that many will lose their jobs. I absolutely assure the hon. Member for Stockton North and his colleagues that neither the Department for Education nor the Government have any plans or powers to make that happen. I welcome the opportunity laid out by the shadow Minister, the hon. Member for Cardiff West (Kevin Brennan), for us to have a debate about the best use and deployment of teaching assistants and how it works with other aspects of school organisation, such as continuing professional development and training. We all want a highly trained, highly skilled work force of teachers and teaching assistants. That is our aim.

The evidence is clear that teaching assistants’ impact on pupil attainment is varied. The best teaching assistants are well-trained, informed, skilled and well-managed, but that is not true universally. We can do more to help school leaders understand how to get the best from their teaching assistants for the benefit of their pupils.

[Alex Cunningham]

I put a question to my hon. Friend the shadow Minister about the ambition of the National Education Trust to have professional standards for teaching assistants, which is supported by Unison and other trade unions. Would the Minister push it that far and go for professional standards in the development of teaching assistants?

[Elizabeth Truss]

I will come to that later in my comments. We do have some plans with reference to teaching assistants.

[Bill Esterson]

Before the Minister moves on—this may come later in her remarks as well—I welcome what she said about ensuring that good practice is everywhere when it comes to teaching assistants. Does she have an assessment of how much good practice there is and how much practice she would like to change?

[Elizabeth Truss]

No, I do not have that assessment at this stage.

In 2013, the Department published a review of efficiency in the school system showing that the differences in the impact of TAs on attainment can be explained largely by how individual schools choose to deploy them. That is supported by the recent report from the Education Endowment Foundation, which showed that TAs can improve literacy and numeracy skills when deployed well and suggested that when used to support specific pupils in small groups or through structured interventions, TAs can be effective at improving attainment.

My main point of contention with the speeches made by Opposition Members is about how to improve attainment. The Government do not believe that there is a one-size-fits-all solution. We believe in a school-led system. As the hon. Members who are on the Education Committee will be well aware from Andreas Schleicher’s evidence to the Committee recently, international statistics suggest that a combination of autonomy and accountability achieves the best results for schools. When head teachers are given the power to make decisions about how to deploy staff in their schools, create an effective team, develop that team and manage talent, but are held to account through rigorous systems of inspection and external accountability, that leads to the best results, which is why we are reluctant to dictate to schools how to deploy teaching assistants or impose rigid boundaries about what teaching assistants can and cannot do. We know that there are different types of schools with different students, and there might be different factors in different areas of the country, so we are reluctant to create a one-size-fits-all policy.

That is my main point of difference from Opposition Members. I certainly do not disagree about the value of teaching assistants—the evidence shows that they are an important part of our education system—but we may disagree about the best way to ensure that schools deploy teaching assistants to students’ benefit.

[Mark Hendrick]

The Minister is giving a positive picture of the role of teaching assistants and is making the point that the Government do not think it a good idea to be too prescriptive about how teaching assistants are used; those considerations are best made locally. However, can she say a little about how she feels about low pay? As I said in my contribution, low pay is a problem for teaching assistants. We obviously value the work that they do, but in doing so, should we not see that they are properly remunerated and not just treated as cheap labour?

[Elizabeth Truss]

The evidence from the EEF suggests that teaching assistants who are properly remunerated and have a clear training structure achieve more, and that is something the head teacher ought to be taking into account.

In view of the evidence, we know that more can be done to help schools ensure that their TAs have a rewarding career and make an even greater contribution and impact in schools. We have been gathering evidence from teaching schools, academy chains and other key stakeholders on what good deployment and support for TAs looks like in our best schools.

We know that successful senior leaders deploy TAs based on their school’s particular needs and that different deployment models can work in the right circumstances. However, underpinning those models is a number of principles that good schools apply universally in deploying TAs. Those include employing suitably qualified TAs. We know that the TA’s level of general qualifications and skills—for example, their literacy and numeracy skills—can vary, and it is important that schools ensure that the qualifications, skills and backgrounds of their TAs are sufficiently robust and match the specific needs of the school.

We know that it is important that TAs are deployed according to their skills and expertise. TAs are employed in a variety of roles in schools, from providing administrative support for teachers to assisting with classroom and SEN teaching, and we have seen that good schools have a very clear structure and description of those roles. It is also important that schools are continually reviewing the deployment of TAs to ensure that they are achieving the stated objectives and are reviewing matters when those objectives have been achieved.

It is important to provide joint preparation and planning time for TAs and teachers to establish clear lesson outcomes and goals, which is a point made by the hon. Member for Sefton Central (Bill Esterson). Planning and preparation time are of course vital for teachers and teaching assistants to get the best out of their lessons. One thing that we are working on in the new maths hubs that the Government are establishing across the country is looking at best practice from overseas on organising the planning and preparation for lessons. However, in a school-led system, that ultimately has to be led by schools, rather than by the Government saying, “This is what we want you to do on a national basis.” I think that Opposition Members and I agree on the outcomes that we want to see; the question mark is over exactly how to achieve them. It is really essential for teaching assistants to understand the targets for pupils and to be trained in assessing pupil progress.

[Bill Esterson]

Does the Minister accept that it is a good idea for good practice evidence to be given to schools, so that they can make those judgements locally?

[Elizabeth Truss]

I do, and I am about to say more about that in a minute; I think the hon. Gentleman has anticipated the rest of my speech.

It is also important to implement strong performance management procedures to improve the quality of support and teaching in the classroom and to provide TAs with quality training and support, along with mentoring programmes and career development opportunities. We have also seen some schools putting in place innovative staffing structures and creating support staff roles that are very different from the traditional TA. Some schools prefer to deploy specialist support staff with degrees to work with high-performing pupils on achieving excellence or to lead classes, allowing teachers to spend more time with underperforming pupils.

Opposition Members have asked what the Government will do about this issue. The answer is that we want to make those principles a reality. That is why our intention is to make the evidence of good practice, supported by case studies, available to schools this year. We will be issuing guidance to schools about the best use and deployment of TAs based on the best available practice. I would very much welcome any practical suggestions on what more we could do to support TAs when the report is published. This is an important development that the Government are undertaking. We recognise the value of teaching assistants and we want to make the debate about how teaching assistants are best deployed and to help schools learn from other schools, because a school-led system provides the opportunity to innovate and develop best practice examples that other schools can then learn from.

[Alex Cunningham]

The Minister talks about the autonomy of schools and about schools being able to innovate and introduce best practice. However, one academy chain is talking about a huge contract for support staff across the entire country, possibly screwing down wages and everything else. Does the Minister really think that that will leave the school with the autonomy that they need and the highly motivated teaching assistants that they want to develop in the school situation?

[Elizabeth Truss]

Ultimately, schools are judged on their results. They are inspected by Ofsted and judged through the accountability system. That will be even better under the new progress 8 measure, in which the achievement of each individual getting a bit better will count. The only way for schools to achieve that is to motivate their staff and to have staff who are well trained, who understand what pupil progress looks like and who feel that they are part of a team. That is about good management. If a school is not doing that, it will find that staff do not have sufficient motivation and that they will not do an effective job. Part of the point of the Government putting together the best practice study is to show schools what good practice looks like for those who are not doing it already.

[Alex Cunningham]

I intervene a final time and I am grateful to the Minister for giving way. She talks about training, autonomy and all manner of things, but the issue is also about remuneration and reward for teaching staff. We face a situation in which the wages being paid to them are being screwed down, rather than the contribution that they make being recognising properly through their pay. Does she not think that it would be better if they were better paid?

[Elizabeth Truss]

When I speak to head teachers, they tell me that staff are motivated by a variety of things—partly the remuneration package, but also such things as the career structure, training opportunities and the atmosphere in a school. All those things contribute to a good package and it is up to school leaders who want to retain and recruit the best people to offer an attractive package to encourage people to join or stay part of their school.

We also want to see more effective use of TAs to support pupils with SEN to progress. It is not enough simply to allocate hours of support; we also have to look at outcomes. TAs can play a very positive role in helping teachers to meet children’s special educational needs, and there are many good TAs doing that. However, the support that they provide should be part of a well-thought-out package of support for the individual child, rather than as a substitute for teacher involvement with that child.

We have built on reports from Ofsted and Brian Lamb when developing our SEN and disability reforms, first in the Green Paper, “Support and aspiration”, and now through the Children and Families Act 2014. Reforms will ensure that there is a greater focus on outcomes rather than on the hours of provision in agreeing the teaching and support to be provided for pupils with SEN, giving families and young people a greater say. We have also established a national scholarship fund for support staff, helping them to develop expertise and higher level skills. In the most recent round, 113 support staff were funded to undertake postgraduate qualifications and training in supporting children with SEN and disabilities.

We have encouraged schools, when deciding how to invest the pupil premium funding, to engage actively with high-quality evidence from robust research studies. That includes the research summarised in the EEF teaching and learning toolkit.

In summary, the Government value the role of teaching assistants. We believe that it is down to schools to make sure that those teaching assistants are deployed in the best possible way to support the learning of students and the best possible pupil progress. However, this year, we will be publishing best practice evidence to help show schools how they can deploy teaching assistants to the benefit of both teaching assistants and the students in a school. I thank hon. Members for what has been a very interesting and helpful debate, and I would welcome their contributions to the work we are doing on teaching assistants.

Fair Tax Mark

Tuesday 18th March 2014 Westminster Hall

11:00

[Caroline Lucas (Brighton, Pavilion) (Green)]

It is an honour to serve under you in the Chair, Mr Howarth. I am grateful for the chance to raise the subject of fair tax today. I intend to build on the work that went into one of my first private Member’s Bills, on tax and financial transparency. I want to highlight the growing case for the Government to require companies to come clean, and I want to explain why that should be matched by efforts to recognise and reward those companies that currently and proactively pay their fair share of tax. I will set out, too, why fair tax ought to be at the heart of the Government’s corporate social responsibility agenda.

No one, I am sure, will be surprised at the timing of my request for the debate. We will all assemble tomorrow to hear the Chancellor of the Exchequer present his latest Budget. Among the measures he presents, there will no doubt be many references to taxation. Equally, I have little doubt that he will refer to the tax contribution that companies make to this country. After all, the UK’s limited companies, of which there are now more than 3.2 million, make a valuable contribution to our Exchequer, including by way of corporation tax. That tax on the profit of companies is scheduled to raise £39 billion in total this year, for example. However, it is, as hon. Members will know, that tax in particular that has attracted so much public attention, not least because of campaigns by organisations such as the Tax Justice Network, ActionAid, Oxfam and Christian Aid, but also because of the invaluable work of the right hon. Member for Barking (Margaret Hodge), the Chair of the Public Accounts Committee.

The taxes paid by corporations were also, of course, the focus of much of the Prime Minister’s attention last year during his period as chair of the G8, when he drew attention to the problem of international tax abuse and its impact on tax revenues in both the UK and elsewhere. Partly as a result of his efforts, the Organisation for Economic Co-operation and Development is now devoting much of its attention to addressing what it describes as the problem of base erosion and profit shifting, which is a somewhat Orwellian term for something that most of us would simply call “shifting profits to tax havens”.

As anyone who has looked at this issue will know, it is incredibly difficult in many cases to work out precisely what tax is paid by which corporation, in what state, where and when. There are a number of reasons for that, including that both generally accepted accounting principles in the UK and the rules set down by the international accounting standards foundation are full of weaknesses when it comes to the requirements for accounting for tax. In both cases, it is necessary for a company only to specify a total tax charge, split between current taxation and deferred taxation. There is no need for a company to explain in which country the liabilities are due, to report when the actual sum is settled or to set out why the current tax liability has been reduced from that which would be expected if paid at the full UK corporation tax rate.

Criticism of those rules is widespread and not just from those who might be dismissed as the usual suspects. International accountants Ernst and Young—hardly associated with being anti-establishment—said this in a report that it issued last year:

“Public debate is increasingly focused on the tax policies of companies as well as the amount of tax they pay. With the dialogue played out across a number of channels including investors, parliamentary committees, governments and the EU as well as the national press and social media, there is growing pressure on organisations to respond or face reputational damage…In our view, the debate around ‘fair tax’ has raised the bar in terms of the expectations of the level of tax information provided by multinational companies and we expect the response will be a greater degree of disclosure by many organisations. Indeed, the debate is progressing at such a pace that it is difficult to envisage an environment where increased tax transparency in some form or another is not on the near horizon.”

The report concludes:

“Reporting, both voluntary and mandatory, is therefore a key element of tax transparency—simply complying with the current rules may no longer be enough.”

I could not put it better myself, which is why I have quoted the report at such length. As the accountants at Ernst and Young clearly understand, the time has come for companies, both large and small, to come clean about their tax affairs.

My Tax and Financial Transparency Bill, published in 2011, was designed to help the UK to recover billions of pounds of lost tax by forcing companies to become more transparent in their accounting. It included a requirement on multinational companies to publish information on where they make their sales, record their profits and pay their taxes, to ensure that corporations make a fair and proper contribution to society. The Bill would also have ensured that banks had to provide details on all accounts that they maintained for companies operating in the UK, so that Her Majesty’s Revenue and Customs and Companies House could chase those companies that did not file the returns that they are obliged to make for the missing information—and the tax that they owed.

I hope that, in tomorrow’s Budget, we will get an update on the latest action that the Treasury has been taking to tackle tax evasion and to promote tax and financial transparency. Every step in the right direction is to be welcomed. However, we have yet to see any commitment from the Government to the kind of overhaul that would put fair tax, as envisaged by my Bill or indeed by Ernst and Young’s accountants, centre stage.

This is an issue at the heart of corporate social responsibility. That is why I support the fair tax mark, which was launched in February of this year, and I am pleased that 40 Members of this House have signed my early-day motion commending the mark. I applaud those behind the mark, who are seeking to mainstream responsible tax in corporate responsibility discourse. For far too long, the issue has simply been ignored.

I equally applaud the three companies that pioneered the fair tax mark at the time of its launch. The Midcounties Co-operative, Unity Trust Bank and the Phone Co-op deserve to be praised for their courage in standing out from the crowd and making it very clear that they are committed to paying fair tax in this country.

For too long, the corporate responsibility world has been silent on this issue, and a jolt was needed to force it to come out into the open. It is not a coincidence, I believe, that social enterprises are at the forefront of this development, given the key role that they have already played in the global roll-out of Fairtrade—a scheme that works along similar lines. I hope that companies of all types and persuasions will join the early pioneers in applying for the fair tax mark over the coming years and that this mark will become as familiar as the Fairtrade mark has become to many. Indeed, I have written to a number of businesses in my constituency that have already demonstrated strong ethical principles in their commitment to the living wage to make them aware of the fair tax mark scheme.

The potential is enormous. Recent polling by the Institute of Business Ethics has found that corporate tax dodging is now the No. 1 concern of the public when it comes to business conduct. This, though, will not be enough. Voluntary arrangements are important, and pioneers indicate the way in which society should change, but it is down to this House, and the Government whom we hold to account, to respond to such demands in ways that meet public expectation. Therefore, in the time remaining to me, I would like to ask the Minister four questions with regard to fair tax.

First, does the Minister welcome the development of the fair tax mark and the necessity of tax being a mainstream issue for corporate responsibility? Secondly, many other hon. Members will be familiar with what is called country-by-country reporting by multinational corporations. It was a demand made by the tax justice movement that multinational companies publish separate accounts for each and every jurisdiction in which they trade. It was a requirement of my 2011 private Member’s Bill that companies operating in the UK do that, so I was encouraged when, at the G8 summit last year, the Prime Minister asked that that information be supplied by multinational companies to their tax authorities, yet we know that his own Government have been working incredibly hard at European Union level and elsewhere to ensure that that information will not be required by the new EU accounting directive. Indeed, the UK has been reported to be blocking progress on that issue at present, so will the Government reflect the mood of some in the accounting profession, of the public, of this House and of stakeholders throughout the UK and the rest of the world and demand that companies put that information on public record?

Thirdly, I think that the time has come for the Government to initiate reform in the disclosure required concerning tax liabilities and payments in the accounts of UK companies. For too long, we have devolved responsibility on this issue to members of the accounting profession, whether in this country or internationally, because it is they who now set the disclosure rules, yet it is that same profession that has also promoted so much of the tax abuse that is now costing our country, and many countries in the global south, dear. I do not think that it is a coincidence that the big four firms of accountants are present in every major tax haven in the world. Can the Minister therefore tell me whether a review might be established to determine what disclosure should be made to ensure that we can hold all companies—large and small, national and international—to account for the tax that they should pay in this country?

Lastly, I, like many, think that the Government should reward responsible tax payment. It was only a year or so ago that the Government said that they were going to consider a company’s tax record in their procurement policy, and I welcome the fact that the Cabinet Office has clearly stated in a procurement policy note of July 2013 that Government contracts worth more than £5 million will not be awarded to companies that aggressively avoid paying their tax. However, it is disappointing that the Treasury backed off from further action when it realised that there were problems with compatibility with EU law. I recognise that there are problems, but I have been told that they are not insurmountable. I have also been told that there is demand for reform on this issue in many countries in Europe—in particular France, Finland and Sweden—and elsewhere. Is it not time for the Government to say that they want to trade with businesses that show they recognise their responsibility to society by paying their tax? That might come from a straightforward endorsement of companies that have a fair tax mark. The Government might also try to revise EU law or seek informed opinion about how procurement arrangements can be revised within existing law.

The right hon. Member for Barking said in a Public Accounts Committee hearing last year that the tax avoidance that Her Majesty’s Revenue and Customs acknowledged in its tax gap calculations was

“the tip of the iceberg”

of the true cost to the UK.

In 2010, the Prime Minister said:

“Sunlight is the best disinfectant”.

I agree that transparency is the best way to ensure that companies are held to account for the tax that they pay. I hope the Government will commit to ensuring that information is made available to make certain that all UK companies pay their fair share of tax. That is exactly what we should expect of them.

11:11

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

It is a great pleasure to serve under your chairmanship this morning, Mr Howarth. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate. As she said, she has a long-standing interest in the issue of tax transparency. She set out her case clearly, and I welcome her contribution. Before I speak about the fair tax mark, I will provide some context about wider Government policy on tax levels and tax avoidance.

A key priority for the Government is to ensure that the UK boasts a competitive and fair tax system so businesses can flourish, but we also want to stamp down on avoidance. We have reduced the main rate of corporation tax from 28% to 21% from next month, and it will go down to 20% next year. We have introduced a single rate for all companies, small and large, and the lowest corporation tax rate of any G8 company and the joint lowest rate in the G20. We have introduced the patent box; the seed enterprise investment scheme, which helps new businesses starting up in the UK with equity finance; and substantial new tax reliefs aimed at the creative and high-tech industries. Taken together, those steps encourage businesses to invest, innovate and create employment in the UK.

We want to offer competitive tax rates to ensure that companies locate jobs, invest and expand in the United Kingdom, but we are also determined to deal with tax evasion and contrived tax avoidance schemes, so individuals or businesses are not able to gain an unfair advantage. It is sometimes argued that the objectives of ensuring competitiveness and dealing with avoidance and evasion are contradictory. I do not accept that. I believe that it is possible to create a tax system that is attractive to businesses, ensures that tax law is not exploited in ways that Parliament does not want and is properly enforced. To that end, the Government are investing almost £1 billion in Her Majesty’s Revenue and Customs in this Parliament to clamp down on avoidance and evasion. We are also giving HMRC new legal powers to tackle tax evaders and the promoters and users of tax avoidance schemes. The amount of money that HMRC obtains from taxpayers as a consequence of the actions it has taken has increased to record levels and is substantially higher than the levels we inherited in 2010. We have made great progress in dealing with tax avoidance and evasion.

It is not surprising that, as the hon. Lady said, public concern and interest in this issue has never been so strong. We are addressing the challenges of our large deficit, and bringing it down requires tough decisions. The public rightly expect the Government to be vigilant and ensure that everybody pays the share of tax that is required under law and that nobody abuses the system that is designed to ensure that everybody makes a fair contribution.

As the hon. Lady said, it is right to say that the issue of tax—corporation tax, in particular—should not be looked at solely as a domestic issue. There is international concern about tax transparency, and we are working closely with our international partners. Our goal is simple: we want to reform the international tax system so companies pay the tax that is due where it is due. It is right and fair that they pay tax in the jurisdiction in which their economic activity occurs. Last year, the United Kingdom used our presidency of the G8 to focus on improving transparency by proposing a new tool to require multinationals to report to tax authorities on where they make their profits and pay their taxes around the world. We also proposed a tool for securing more extensive information exchanges to tackle tax havens and pierce through the corporate veil. On top of that, the Prime Minister announced last autumn that the Government will establish a publicly accessible registry of company beneficial ownership.

Transparency is vital to tackle a range of illicit finance threats and to discourage tax evasion by removing the secrecy that enables businesses and some individuals to hide information from HMRC. As the Prime Minister said,

“We need to know who really owns and controls our companies.”

Therefore, the hon. Lady is right to raise the issue of transparency.

[Caroline Lucas]

I am grateful to the Minister for his full answer, but will he focus on the EU accounting directive? He said that the Government want greater transparency, and he implied that they are in favour of country-by-country reporting, which is positive. However, the message we are hearing is that the UK has not supported the EU accounting directive.

[Mr Gauke]

I will make three points. First, the UK believes that there is a need for greater transparency. There have been discussions about that issue in the G8, in particular about the UK Government’s proposal that companies should provide information about where their activity takes place and where they pay tax.

I will not digress for long on this point, Mr Howarth, but a year or so ago I had a meeting at Euston tower with the HMRC officials who deal with transfer pricing matters. They said it would help them to have a relatively simple form to provide information about the companies into which they enquire so they know where those companies make their profits and where they pay tax. The officials said it would help them to have high-level information that could tell them, for example, that a high proportion of profits were being transferred to a low-tax jurisdiction. They said that type of information would enable them to assess risks and determine where to put their resources. That conversation and others resulted in our proposal for the high-level tool.

Secondly, we want to ensure that we have the information that can help HMRC to make risk assessments and know where to focus its efforts. However, we want to do so without in any way compromising our desire not to impose unnecessary burdens on businesses and not to create a whole lot of bureaucracy that does not necessarily help tax authorities much.

The hon. Lady may not have much sympathy with our third point, but the long-standing position of the UK Government—under all parties—is that tax is principally a matter for member states. We have concerns about a tax measure being included in a non-tax directive, thereby undermining the competency of member states in direct tax matters.

I hope that I have provided some context for our thinking on the matter. Nevertheless, I want to underline the point that that does not diminish the fact that the UK is leading the way in ensuring that the right kind of information is provided to tax authorities to enable them to assess a company, how aggressive it is in its tax planning, how much it is putting into low-tax jurisdictions and how much it is putting into mainstream jurisdictions.

Let me turn to the subject of the debate, namely the fair tax mark, although I appreciate that we are having a wider discussion. I welcome any contribution that informs and progresses the debate about transparency and a better understanding of the taxes paid by companies. We welcome any business moving to improve the transparency of its own tax affairs. Indeed, as a Minister I have made the point for at least three years that companies must do more to explain the tax that they pay and some of the complexities of their situation, which can be lost in a febrile public debate. They must be much more open and transparent in explaining their arrangements, because it would be to the benefit of all companies if people understood such matters better. Often, companies’ silence leads to suspicion, whether well-founded or not.

The specific proposal for a fair tax mark is a new initiative—let us see how it works. I generally welcome anything that progresses the debate. If such an initiative is to work effectively, clear and objective criteria must be in place and must be applied fairly and objectively by informed and credible experts who are well respected by business and the wider public. There must also be a governance structure that addresses any concerns about conflicts of interest and ensures independence. If the fair tax mark can meet those tests, it will be a particularly valuable contribution to the debate.

Of course, HMRC’s role is different. It must collect the tax that is owed under the law, help businesses to understand their obligations and make them aware of reliefs to which they are entitled and, of course, pursue relentlessly the minority who bend or break the rules. HMRC is also leading the way in improving transparency by opening up its own processes to greater public scrutiny, both to restore public confidence and to demonstrate to the public that it does not settle disputes with any taxpayers otherwise than in accordance with the law. We welcome efforts by businesses to improve the transparency of their affairs, and I see the fair tax mark as part of that debate.

As time permits, I would like to say a little about country-by-country reporting. The hon. Lady pointed out that the international base erosion and profit shifting process—the BEPS project—is under way. I very much welcome the development of a standardised country-by-country reporting template, a proposal that the UK initiated under our G8 presidency last year. The template will help tax administrations with their risk assessment, provided that it is focused on useful information that will show, at a high level, where businesses are making their profits and paying their taxes around the world. That will give tax authorities, including those of developing countries, a new tool to help them to identify and assess risks efficiently. I would emphasise that, although the UK supports the OECD’s work on the template, we remain mindful of the need to balance that against the need not to disproportionately increase the compliance burden on business.

[Caroline Lucas]

I am grateful to the Minister for giving way—he is being very generous. I feel that there is a gap between the strong words of welcome he gives to the idea of greater transparency and the actual actions he is prepared to see taken to follow them up. To return to the EU accounting directive for a moment, the issue is simply one of transparency. He says that the Government are not in favour of it because it brings tax matters under a non-tax regulation, but it is about transparency, which is cross-cutting.

Similarly, the Minister says, for example, that the Government would welcome contracts not being awarded to companies that aggressively avoid paying tax. Will he tell me about any concrete action that the Government are going to take to follow that up? We can either change EU laws or work with other countries to make it possible for that to be operational.

[Mr Gauke]

I do not want to repeat myself on the EU accounting directive, but we believe that we must protect the broad principle that tax matters are for member states. There has been action at the EU level on banking and extractives, which we recognise and support, but we are sensitive to any creep of powers in this area. I am not at all embarrassed to make that point. We must also find a way to ensure that we get the information that tax authorities need without imposing unmanageable burdens on businesses.

On procurement, it is worth pointing out that we are the Government who have brought in new rules where none were in place before. The new rules will come into effect on 1 April and require all suppliers to declare tax non-compliance. Departments will have the ability to terminate a contract on the basis of such a declaration, if they so wish. From the hon. Lady’s perspective, that should be welcomed, and the Government deserve credit.

Returning to country-by-country reporting, I repeat that although we support the OECD’s work on the template, on which we very much led the way, we remain mindful of the need to balance that against the requirement not to increase disproportionately the compliance burden on business. My officials have worked extensively with business and representative bodies over the past four months to understand the compliance impact of country-by-country reporting and the practicalities of collecting information. I am pleased to see that the OECD work is on track to deliver the September 2014 deadline. I would like to thank business, civil society and the advisory community for their input to date. Work will continue in consultation and discussions with the OECD over the coming months.

The Government want a tax system that is good for jobs, good for growth and good for our economy. I believe that we have taken steps towards achieving all those goals, and I have been grateful for the opportunity to explain why. I would like to underline the fact that we believe businesses should pay the tax that is due. We have been involved in international reforms through the OECD work and been instrumental in encouraging a climate of greater transparency. We continue to welcome the debate.

11:29

Sitting suspended.

Football Clubs (Insolvency)

Tuesday 18th March 2014 Westminster Hall

[Mr Gary Streeter in the Chair]

14:29

[Damian Collins (Folkestone and Hythe) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I thank colleagues from all parties for attending this debate, which is incredibly important for all of us who care about the game of football. There are several Members here who I am sure will want to speak about their experiences in constituencies and communities that have been blighted by the consequences of the failure of a football club. This debate will consider two important issues: the general problem of insolvency that affects football and the specific concerns felt by me and numerous other colleagues about the workings of the football creditors rule.

It is an astonishing fact that since 1992, 46% of all clubs that have played in the Premier League or the Football League have been involved in some sort of insolvency proceedings. There have been high-profile cases involving clubs such as Leeds United, Plymouth Argyle, Crystal Palace and Coventry City, which at the moment is going through a particularly torrid time that no football club should have to face again. There have also been insolvencies in the football conference as well as the lower leagues. The problem runs right across the game.

I know that my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) will wish to talk about the situation at Hereford United, but I too have a particular interest in the fortunes of that club. The first professional football match I ever watched was with my father and brother at Hereford United back in the 1980s. At that time, being a Herefordshire schoolboy, I was happy to watch Hereford United, but I am also a lifelong Manchester United fan. I would go with my school friends to watch Manchester United in the late 1980s, at a time when they were not doing so well in the league—[Hon. Members: “Like now.”] It is amazing how things come around if one waits long enough.

I remember going to Old Trafford in the late 1980s. Not only that club but football has changed with the advent of the Premier League. The great amount of money that has come into football has massively transformed grounds, facilities and players’ salaries. Football is completely different now from what it was 30 years ago. In many ways, that is a good thing, but it is also an issue of great concern. Despite the fact that there has never been more money in football than there is now, there have probably never been more incidents of financial failure and its consequences in the game. I believe that that is partly due to how football finances are structured and administered. It has created a culture of financial irresponsibility, born of the pressure placed on clubs to compete at the highest level to gain the financial prizes available there. That culture of pressure is driving the number of insolvencies in football.

Along with my hon. Friend the Member for Suffolk Coastal (Dr Coffey), whom I see in her place, I was a member of the Select Committee on Culture, Media and Sport when it launched its inquiry into football governance in 2011. Many of the issues highlighted in the report are still current today, three years after the start of the investigation. We considered a number of issues affecting football, but one of our most prominent concerns was what has become known as the football creditors rule, which plays a key part in the insolvency of football clubs.

When a football club goes into administration via a company voluntary arrangement, in which an administrator comes in to restructure the football club’s debts so that it can get back on its feet and playing again, the football creditors rule comes into play, protecting debts owed to other football clubs for things such as transfer payments and debts owed to football players by honouring them in full, whereas other unsecured creditors get just pennies in the pound. For example, when Leeds United went into administration, it was well publicised that former players received owed moneys in full whereas organisations such as St John Ambulance were owed thousands by the club that they did not receive. It has also affected Her Majesty’s Revenue and Customs. In the past, we have seen unpaid tax revenues, money owed by football clubs—

[Mr Jim Cunningham (Coventry South) (Lab)]

On the point about paying players’ wages, I can remember occasions when the Professional Footballers Association—the footballers’ union, if we want to call it that—has had to pay them.

[Damian Collins]

The hon. Gentleman makes an important point. Undoubtedly, in the past, footballers could often be treated poorly by their clubs and had few of the rights that would normally be expected in the workplace. I am certain that no one would want to go back to such a situation, but I will come to how the financial guarantees work to encourage greater risk taking and irresponsibility with the finances of the game, with a direct consequence and knock-on effect for the insolvency of clubs.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Did my hon. Friend just say that under the football creditors rule, football creditors take precedence over the taxman? If so, can he think of any other industry or sporting activity in this country of which that is also true?

[Damian Collins]

My hon. Friend makes an extremely important point. The taxman lost his preferred creditor status in 2003. An informal arrangement exists between HMRC and football, and I will come to that, but the taxman is not a preferred creditor. The only preferred unsecured creditors are people within the game of football, who must be compensated in full under the rules of the Premier League and Football League. Other creditors get only pence in the pound. For example, when Crystal Palace went into insolvency, football creditors were paid in full, but non-football creditors received 2p in the pound. When Plymouth Argyle went into administration, again, football creditors were paid in full, but non-football creditors received less than 1p in the pound in compensation for the debts that they were owed.

[Alison McGovern (Wirral South) (Lab)]

The hon. Gentleman is making an excellent speech, and he is owed much credit for raising the issue. Given what he just said about the impact of insolvency on non-football creditors in a local community, does he agree that the rule does much greater damage to the reputation of the game of football than perhaps is understood by those in the sport at present?

[Damian Collins]

The hon. Lady makes an extremely good point. It does enormous damage to the credibility and reputation of football. That point was made by Niall Quinn, a former player and club chairman of great distinction, when he gave evidence to the Select Committee. How can it be right that in a community where a club has gone through insolvency, a small business that prints match programmes or paints the stadium receives none of the money that it is owed, while watching a player paid tens of thousands of pounds a week drive out of the gates to the ground in a smart car, having received every penny he was owed? It makes no sense at all. It is seen as a massive injustice and, given the huge amounts of money within the game of football, it cannot be justified in any way for football to reserve preferred status for its own creditors.

The Select Committee called in its 2011 report and its follow-up report in 2013 for the football creditors rule to be scrapped. Numerous debates have been raised in the House about both the generalities of football governance and finance, and specific cases relating to clubs such as Coventry and Leeds. Members have raised their concerns about such clubs in particular. Often in those debates, we have been reassured that the Government’s view is that the rule is one whose time has come, that we should move on and that we should not allow it to continue. I secured this debate to ask the Government where they stand on the football creditors rule.

I am grateful that the Minister with responsibility for consumer affairs, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Cardiff Central (Jenny Willott) is here to answer the debate. Often, when we have had such debates, the Minister responding has not been the Minister responsible for insolvency laws in this country. Today we have the insolvency Minister here to answer the debate.

[Jesse Norman]

I absolutely share my hon. Friend’s view. He is making a powerful case, and it is doubly good to hear it from someone educated in Hereford, a city whose football club is in some difficulty due to the imbalance between the money sloshing around at the top of the game and the meagre pickings at the middle and lower end.

The issue I want to raise with my hon. Friend is the Government’s position. When I asked the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), who is Minister with responsibility for sport, she responded:

“The Financial Fair Play rules now introduced across football which, combined with compliance checks…aim to improve financial management and stability...Legislation remains an option if the football authorities do not demonstrate that they can reform their own governance of the game. The Government’s position on the football creditors rule is clear.”—[Official Report, 27 February 2014; Vol. 576, c. 495W.]

I put it to him that, whatever the Government’s position is, it is not “clear”, and that that answer did not particularly clarify it.

[Mr Gary Streeter (in the Chair)]

Order. That was a very long intervention.

[Damian Collins]

Mr Streeter, you are of course right, but it was an intervention made with such great force and we enjoyed it so much that we were happy to listen to it. My hon. Friend makes an important point. The Government have consistently criticised the football creditors rule, and indeed HMRC brought a legal action against the Football League to try to prevent the rule from being used, but failed. The Government and the sports Minister have consistently said that the Government are prepared to use legislation to intervene if the football authorities will not demonstrate their own desire for progress and action. I believe that the time has come for an update on that situation and for a consideration of how legislation could be used to prevent the football creditors rule being used in insolvency cases. There may be a debate to be had about the role of Government interfering in the organisation of sports and sporting bodies in this country, but this issue is clearly one of fairness that relates to insolvency law and the specialist rules that football has created for itself to protect its own interests at the cost of the community.

When the Football League gave evidence to the Select Committee, its representative said that the league could find no moral justification for the existence of the football creditors rule. That continues to be the case. It is there by regret, but the time has come for it to be removed. When the High Court considered the case that HMRC brought against the Football League, Judge Richards said that although he was unable to find in favour of HMRC and against the Football League with regard to the football creditors rule, the judgment should not in any way be regarded as an endorsement of the rule.

I will now say a little about how the football creditors rule works in effect, and how I think we can get rid of it through legislation. All football clubs are required by the football authorities to honour their debts to other football clubs in full. When a club goes into administration, the football authorities use their control of the prize money and particularly the broadcasting money that is owed to the club—it is due only if the club completes the season. Effectively, when a club goes into administration, the Football League and the Premier League can use that money, which they control, to settle football debts on behalf of the club, and the club’s administrator does not have the power to gain access to that money. The Football League and the Premier League also reserve the right to remove the club’s golden share, which it requires to participate in football competitions. The removal of that golden share would effectively make the club worthless and the threat of its removal is one that the Football League and the Premier League can use to ensure that football debts are honoured in full.

If the football authorities refuse to give up the football creditors rule voluntarily, legislation has a role—we should amend insolvency legislation. We should put the administrator in sole charge of the assets of the club, including the golden share and prize money that should reasonably be expected to be owed to it during the season. The administrator can use all that money to settle the club’s unsecured debts equally and fairly—both football debts and non-football debts.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing this timely debate. Does he agree that on some occasions, the problem has been not only the rule to which he refers, but that in some cases, particularly high-profile cases, chairmen and others in charge of football clubs have spent anticipated revenues, including television money and European money, such as champions league money, long before they are in receipt of it, so that there is very little to distribute even before the pot of gold at the end of the rainbow fails to materialise?

[Damian Collins]

The hon. Gentleman makes an important point, which gets to the heart of my great concern about how the football creditors rule works in practice. Although the rule is an administrative tool used to protect football, what it encourages is profligate spending, because football debts are guaranteed by the Football League and the Premier League. A club selling a player to another club will not particularly worry about whether the buying club can afford the transfer fee that they have engaged to pay, and the selling club will not mind if the payment of those fees is spread out in instalments over a number of years, because they know that the money is guaranteed by the football authorities. Similarly, players signing lucrative contracts with a club will not need to inquire too much into the finances of that club because they know that the money is guaranteed. There is no other area of business where that is true, because no other area of business has that sort of protection, which I believe encourages massive profligacy and spending within the game of football—there is no element of shared risk, and there are no consequences or downsides.

I also believe that that is why the level of insolvency in football is so high. There are no other industries in this country in which one would look at the companies trading in it and say that it would be normal for the insolvency rate to be 46%. The practical way in which the football creditors rule is implemented is driving that culture and practice. Getting rid of it would stop that culture and practice.

It may well be that the football creditors rule would have to be phased out over a couple of years, to give clubs a chance to rebalance. If the financial fair play rules were properly enforced across all the top tiers of football, in many ways the football creditors rule may not be needed anyway. If enforced, financial fair play would create a culture of correct spending in which clubs would not be able to live beyond their means. They would be unable, year after year, to gamble tomorrow’s money for success today in the hope of moving further up the football pyramid.

We can take action to address that culture by getting rid of the football creditors rule. If the football authorities did not want to get rid of the football creditors rule entirely, they could consider creating a sinking fund to guarantee that unsecured creditors such as local businesses that are owed relatively small amounts of money are always compensated in full, instead of receiving the derisory penny in the pound that they often receive at the moment, which is completely unjust and unfair. For a game that is as wealthy as football, there can be no moral justification for that situation.

Later this week, I will publish my private Member’s Bill on football governance. I am grateful for the support of a number of hon. Members, including my hon. Friend the Member for Portsmouth North (Penny Mordaunt), the hon. Member for Coventry South (Mr Cunningham) and my hon. Friend the Member for North Swindon (Justin Tomlinson), who are all in the Chamber. In that Bill, I set out my view of how insolvency law could be amended to practically eliminate the football creditors rule. I believe that if the football authorities will not demonstrate their desire to do that themselves, it would be a legitimate course of action for us to use Parliament and the law to get rid of the rule.

My Bill also addresses a couple of other important areas related to the insolvency of football clubs and to the culture and practice that I believe drive that insolvency. In addition to getting rid of the football creditors rule, I suggest that there should be a test, which would be particularly relevant to cases such as that of Coventry City, whereby there should be a public declaration of the identity of the owners and investors in a club. I do not think there has ever been a case where the owners of a club have been shrouded in mystery and that club has been a financial success. People rightly question the motivation of people who obscure their identity, often through myriad dummy companies all registered and trading offshore. People question the reasons for that. Football fans should have the right to know the identity of the people who own their club and where their money comes from, which should also be a matter of public investigation.

Alongside that system, we should have a fit and proper person test that is robust and that has teeth, to be administered at the discretion of the football authorities. The situation we have now is ridiculous. In the case of Leeds United in particular, Mr Cellino wants to buy the club. He was formerly convicted of fraud and faces another conviction today, but the Football League might have to wait nine months until the Italian courts hear his appeal case before deciding whether or not to allow him to buy the club. That is totally ludicrous. It should be entirely at the discretion of the football authorities, including the Football Association, as to whether they feel that someone is a fit and proper person.

There is already a helpful precedent for that: the way in which the fit and proper person test is administered by Ofcom with regard to people who may hold a broadcasting licence in the UK. That power was created by the Broadcasting Act 1990 and is administered entirely at the discretion of Ofcom, based on its consideration of whether someone can or is likely to comply with UK broadcasting law, and therefore of whether they are a fit and proper person to hold a broadcasting licence.

[Mr Jim Cunningham]

Returning to the point about ownership, we recently had a case—about a week or 10 days ago—where the owner of Birmingham City was sentenced to a number of years in jail. It comes back to the issues that the hon. Gentleman mentioned: who are these people who own clubs and what is their credibility? The Football League should have been looking at such people and asking, “What is their credibility?”

[Damian Collins]

The hon. Gentleman makes a very good point. The Birmingham City case is particularly relevant. It is believed that there were grounds for concern about the former chairman of the club—there were outstanding previous charges against him relating to dishonesty in the Hong Kong courts. Very recently, he has been convicted of money laundering. Although he has stepped back from control of the club, I believe his son now runs it in his place. There is nothing the football authorities can do about that. It is quite clear that he should never have been allowed to buy the club in the first place, and his family should have no direct involvement in the club any more.

The Football League should not be fearful of taking legal action against people who want to buy a club—that should be at its discretion. In the United States of America, there is a discretionary test for those who want to own a franchise in major league baseball. It is administered by the league, and by other owners of the league. They will look at the business case, the plan and the credentials of the would-be owner and decide whether they want them in their league. We should have the same rules here. It would probably be right for the Football Association, as the guardian not just of the law, but of the ethics of the game, to administer that test and use it at its discretion. I included such a test in my private Member’s Bill because there may need to be some statutory underpinning of that authority if the football authorities fear legal action being taken against them by people who would otherwise seek to invest in the game.

The hon. Member for Coventry South will speak about Coventry City, but I should like to add that the club’s being run into the ground, its finances being in ruins and its being separated from its ground and stadium seem entirely to suit the financial interests of its mysterious, secret owners. That should never be allowed to happen again. The Football League claims that it knows who owns the club. I believe it should publish all that information, which should be a matter of clear and open record. To its credit, the Premier League said that it would require that to be so, should Coventry play in that league.

The situation of Coventry City is desperately sad and it should never, ever be allowed to happen again. In our consideration of issues relating to the insolvency of clubs, hon. Members should consider what next steps need to be taken to ensure that such things do not happen again.

Other hon. Members wish to speak and I have spoken probably for long enough in setting the scene. I should like the Minister to say what positive action the Government are prepared to consider to move to abolish the football creditors rule, and I should like to hear her thoughts on other matters relating to the culture in football that have a negative influence on the finances of the game. I should also like to hear whether the Government are prepared to back up their criticism of the football creditors rule with action. Will they set out now, or in writing after the debate, a timetable—a schedule—by which they would take action if the football authorities are not prepared to do so?

14:50

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank the hon. Member for Folkestone and Hythe (Damian Collins) for securing this debate. His private Member’s Bill is timely and I wholeheartedly support it, as he knows. We both share considerable frustration with and concern about the inadequacy of the football governance system. It is now apparent to everyone that reform is long overdue, as he said. I intend to speak for just a few minutes about how this issue affects Coventry.

I have spoken many times about my disgust at what has happened to Coventry City football club. The whole affair has been a disgrace, particularly given that some fans have to do a round trip of about 70 miles, which is expensive in the present economic climate. In the past three or four months, the weather has been pretty appalling, too, to say the least. Fans are always the last to know what is happening at a club or who owns it, but they foot the bill. They are treated quite appallingly, to say the least.

This business with Coventry City has been going on for about two years, and it is about time it was resolved by Government action and regulation. That is one reason why I support the hon. Gentleman’s Bill. I do not need to go into further details, because we have had a number of debates about Coventry, secured by me, my right hon. Friend the Member for Coventry North East (Mr Ainsworth), and my hon. Friend the Member for Coventry North West (Mr Robinson), who are not here today because they have other business on. We have raised questions, debated the matter two or three times and met Ministers to discuss the issue. We should have got legislation last year, which was promised but never came forward.

Coventry is not the only club to have suffered from poor governance and financial mismanagement, but it is a useful example to discuss, because it has displayed many of the problems endemic in the system. It is for this reason that I asked the Select Committee on Culture, Media and Sport to consider a short investigation into what has happened to the club. It would be a useful case study to highlight areas where reform is needed, as the hon. Member for Folkestone and Hythe said. The idea would be to hear from both sides in the dispute and discuss what pitfalls might have been avoided had legislation been in place. I have yet to hear back from the Committee Chairman, and I do not know whether the Committee will accept my suggestions. I should be grateful if the hon. Gentleman considered supporting me in that, as it may help to make a compelling case for legislation.

The hon. Gentleman explained the football creditors rule well, and I do not intend to go back over that. Coventry City FC has had a number of problems and the football creditors rule is just one among many. However, the creditors rule rewards poor management and irresponsible governance. It is one rule for the football industry and another for all other businesses in the economy. Why should a club be responsible if, once it is in administration, it will not be obliged to pay its debts? Footballers’ salaries and other clubs must be paid before anyone else, even secured creditors and Her Majesty’s Revenue and Customs. The taxpayer is not considered until the players’ huge salaries are paid in full and, in Coventry, the rent that is due to be paid to the stadium is not considered.

Coventry’s Ricoh arena is owned by Arena Coventry Ltd, which in turn is half owned by Coventry city council, but the rent owed on the stadium is just ignored, as that company is not a football creditor. No other business failure would be protected in this way. What company would be able to pay its employees astronomical wages it could not afford?

The club is protected from its debt obligations to the taxpayer, in respect of rent arrears; to cleaners; to St John Ambulance; and to kit suppliers—the list goes on, as the hon. Gentleman said. The creditors rule seems to protect clubs from bad management and encourages recklessness. Of equal concern is the fact that most Football League regulations give it flexibility of application to suit individual circumstances, so that organisations dealing with football clubs cannot rely with any certainty on how the rules will be applied. This lack of clarity is a problem; it leaves organisations unclear of their position.

When a club goes into administration, the golden share held by each club, giving it membership of the FL and permission to play in the league, is suspended and reverts to the FL. The FL normally allows the club to play on to see if things can be resolved—a lot of times they are not resolved—but football creditors will still need to be paid. The operation of this rule has been an issue in many football administrations, including that of Coventry City Football Club Ltd.

There was a huge debate about whether the golden share lay in the hands of CCFC Ltd or its parent company, Coventry City Football Club (Holdings) Ltd. Ultimately, it was clarified that the share sat with CCFC Ltd, but that some or all of the players’ contracts are with CCFC (Holdings), which should not be the case under FL rules. That clarification came too late, and by this point the administrator had already sold assets. In any event, CCFC Ltd has been through administration and is being liquidated. All football creditors have been paid in full, while other creditors, notably ACL, the owner of the stadium, will not be paid.

The Select Committee launched its report on domestic football governance in December 2010, publishing the report in July 2011. The report was very clear: the Football Association was in need of urgent reform. Leagues—the Premier League in particular—have too great an influence over the decision-making processes of the FA. The game has seen increasing commercialisation, and there is a distinct lack of financial regulation. This has led to significant financial risk-taking among football clubs. The Select Committee urged the industry to reform itself; otherwise, there should be legislation. Football authorities put forward proposals for reform, but their proposals simply did not address the key issue. I hope that the Minister will deal with some of those issues.

On 30 April last year, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), when he was Minister for Sport, wrote to the Select Committee, agreeing with its recommendations, which he described as “much needed”. He said:

“in the absence of significant progress with these by the beginning of next season, we should seek to introduce legislation as soon as practically possible.”

I agree. We really want to know what the legislation is and what the Government’s timetable is. On at least two occasions, I have asked when the Government will take action, and have been told that they are considering and looking at the issue, but they do not tell us what their proposals are. That is why I agree with the hon. Member for Folkestone and Hythe that we should have a time scale and should know what the proposals are. Everybody should support him in trying to get the Government to come clean on this.

A lot of these companies can be intimidating. The hon. Gentleman mentioned the Football League being frightened to take action; a lot of these companies want to go to court, and that can lead to individuals being intimidated. These companies would not get away with some of their practices anywhere else; the mafia probably would look like saints next to them.

The right hon. Member for Faversham and Mid Kent continued:

“I have already been given drafting authority by the Parliamentary Counsel, and my officials have started working up a draft Bill and supporting documentation, should football fail to deliver. This Bill will reflect the conclusions of your report.”

[Damian Collins]

Does the hon. Gentleman agree that it would be helpful if the Government produced the draft Bill and supporting documentation?

[Mr Cunningham]

That would be very helpful. If we saw what was in the draft Bill, we could decide whether we could support it, and I am not just talking about Opposition Members; the hon. Gentleman might disagree with some of the draft Bill, for example. There is a clear promise on the creditors rule, too. The Committee’s report stated that if the courts were to reject the challenge to the creditors rule by Her Majesty’s Revenue and Customs, the Government should introduce legislation to abolish it—the High Court has clearly upheld the challenge.

I conclude by saying to the Minister that football has failed to deliver, and it is now time for the Government to deliver. When will we see the promised Bill before Parliament? What more do the Government need before they decide to legislate?

15:00

[Penny Mordaunt (Portsmouth North) (Con)]

I apologise to colleagues in advance for being absent for the remainder of the debate. I wish to speak in the debate in the main Chamber on Ukraine.

I start by rebutting the claim, often made, that we politicians should butt out of discussing football because football is a business and it should not be in our remit to meddle in it. Leaving aside the rather unbusinesslike practices that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) outlined, I make this comparison: if a supermarket—Tesco, say—folded in my constituency, I could comfort my constituents with the fact that they can buy their bread and milk from Sainsbury’s. I could provide no equivalent comfort to Portsmouth football club fans by pointing out that they can buy their season tickets from Southampton, a bit further along the coast. That is clearly nonsense, and it goes to the heart of what is special and unique about football clubs. They are more than just businesses. Football clubs bring tremendous economic value to an area, but they also carry tremendous social value.

I pay tribute to my hon. Friend for his work in raising the issue, his Bill—which I am happy to support—and his work on the Select Committee. I pay tribute to all the other members of the Committee, too, for their sterling work on raising this issue and on concentrating the Government’s mind on getting that result. My hon. Friend spoke eloquently on football’s finance and governance problems, so I will constrain my comments to putting on record some of the trials that faced Portsmouth football club, which, happily, recently managed to achieve the largest and fastest ever 100% community buy-out.

The club, which was established in 1898, has had no fewer than nine owners in the past 15 years. The supporters’ rescue bid was triggered in January 2012 as the club entered administration for the second time in two years, with debts of £100 million. A scheme was launched inviting fans to pledge a £1,000 investment in Pompey Supporters Trust, starting with a down payment of £100. Discussions were also held with high-net-worth individuals. The trust’s plan was to create a new legal entity, Portsmouth Community Football Club Ltd. The trust would invest in that new entity the share capital raised from its members. Alongside that, there would be direct investment by wealthier fans. The trust would be the majority shareholder in the new club, with community interests further protected by a shareholders’ agreement.

In October 2012, the Football League announced that the trust had won its support as the preferred bidder. By then, the trust had received pledges from more than 2,000 fans who had paid the initial £100 sum. Eleven presidents pledged a further £1.5 million, having already provided the administrator with £400,000 in cash to keep the club afloat. Obviously, they gave that cash without any guarantee that they would take over the club. The trust put together a £2.75 million loan from a local property developer and Pompey fan, secured against the future ownership of the stadium and backed by a £1.5 million loan from Portsmouth city council, which further completed the bid.

Chainrai, who was the default owner and who retained a £17 million charge on the stadium, refused the trust’s £3 million offer for the stadium. Eventually, despite prolonged legal battles and counter-offers, in April 2013 Chainrai accepted an out-of-court offer of £3 million for the stadium, along with a further £450,000 for the release of the floating charge against the club’s other assets.

I could talk at great length about the trials that we went through to secure that deal, but I will give three examples. Before an administrator was even appointed to kick off the process, a football administrator who thought they were going to be appointed was already in the club trying to strip assets. When we were putting together the business plan and trying to figure out and unravel the complex web of who owed what to whom, which resulted from having nine owners in 15 years, we could not see the football authorities’ rulebook, which would have let us know where the parachute payments should have gone and under what circumstances. It is hard enough for a trust to put together a business plan, but in those circumstances it was nearly impossible.

There was a lack of transparency, and I know that problem is adversely affecting Coventry City at the moment. At the eleventh hour, our bid was nearly knocked out by a coalition of people who arrived on the scene without having previously expressed an interest in taking over the club. They claimed that they were going to offer more for the club, which was clearly an attempt to knock our bid out of the competition. Those were dark days indeed, and a strong supporters’ trust bid was made fragile by the lack of a level playing field.

Happily, the trust was successful, and it took a club such as Pompey to achieve it. Anyone who has played us knows the tenacity of our fans. They are troupers, and it was their faith, and the support of a few individuals who were prepared to risk a considerable amount, that meant that we were successful, that Pompey are still playing, and that the good guys won.

I see Portsmouth football club as a trailblazer, and I hope it is a catalyst for change. If we do not change, many of our much-loved clubs will not be around in the future. The ordeal was worth while, and the club is now making a profit. There has been considerable investment in the grounds, and I am happy to report that Portsmouth won their regional FA community club competition last Sunday.

The football authorities have moved somewhat, but they have not moved enough. In this House, we have to show the same resolve that Pompey fans showed during their battle and see through the reforms. I am happy to support this debate, and I am very happy to support my hon. Friend’s Bill. We must be resolute in getting a proper finance and governance structure for our national game.

15:00

[Justin Tomlinson (North Swindon) (Con)]

I apologise for arriving late, but I had to serve on a Delegated Legislation Committee. It is a great pleasure to support both this debate and the private Member’s Bill of my hon. Friend the Member for Folkestone and Hythe (Damian Collins).

I am an unabashedly huge football fan, and I have two brief points that are slightly too long for an intervention. My first point is on the Insolvency Act 1986. I represent North Swindon, and we have Swindon Town football club, which has entered administration twice and avoided it on many other occasions. We have had a number of owners, some good and some less good. The hon. Member for Coventry South (Mr Cunningham) mentioned St John Ambulance, and his point applies to Swindon, too. We had a number of good local businesses—genuine suppliers—that were left high and dry each time the club’s ownership changed. Various wealthy people managed to get away completely unscathed while those who were working hard to support our vital community football club were left with their fingers burned, which made it a lot harder for the town to continue trusting the new owners.

My second point is on transparency. We have heard about the situations in Portsmouth and Coventry, and the same applies to many football clubs across the country. As supporters, we simply do not know who is responsible for the football club and who is ultimately making the decision to spend more money than the club can viably sustain. I have previously called for every football club to have an elected fans representative on the board. Ultimately, we need business people who are good enough to raise sufficient money, but stupid enough to go and waste it chasing domestic success when running the club, and an elected fans representative would at least always ensure transparency.

My hon. Friend the Member for Portsmouth North (Penny Mordaunt) described people trying to work out who the administrator was, but the fans representative would provide a link inside the football club. The football clubs would benefit, because at the end of the day, we long-suffering supporters are the customers. We buy the season tickets, the replica shirts, the Christmas presents, the programmes and the pies at half time. Having that rep on the board would offer a link to those customers. The rep could suggest where things are going right and where there are further opportunities to grow, as well as perhaps being the front that liaises with the local community, building trust in and support for the club.

[Jim Shannon (Strangford) (DUP)]

I also apologise for not arriving on time for the debate. I was also on a Delegated Legislation Committee and I took a little bit of time to get down here. I am pleased to have the chance to support this debate. I support Leicester City, and have done since I was a wee boy. We are looking forward to going back to the premier league, but we have had difficulties in the past. The loyalty of supporters and their contribution to their club, whether socially, physically, monetarily or in time—they might attend all the matches—are important. I totally support the hon. Gentleman’s point that the clubs should have within their administration some method whereby supporters clubs, or individuals on behalf of supporters clubs, can have an input into what happens.

[Justin Tomlinson]

I thank the hon. Gentleman for his comments, which I agree with. I see that representative being elected through the supporters trust network. We have had a number of Supporters Direct events in Parliament, and we have all seen at first hand the fantastic work that it does.

[Damian Collins]

My hon. Friend raised an interesting idea. Does he agree that there is a necessity for the public declaration of the ownership to be clear? That was not clear with Leeds United and when the chief executive gave evidence to the Select Committee, he said that he did not know who owned the club. That kind of situation cannot be allowed to continue.

[Justin Tomlinson]

That is the absolute minimum we need. Supporters and suppliers should have a right to know who the custodian of their community football club is. The fans representative could then give a day-to-day commentary where appropriate and link the supporters and the club. That would be a win-win, particularly for the Football League, in ensuring that fans are engaged with the football club. The hon. Gentleman is absolutely right that we need that public declaration.

[Mr Marcus Jones (Nuneaton) (Con)]

Does my hon. Friend agree that there should be more transparency within the Football League? I and many of my constituents support Coventry City, and the Football League has been completely not transparent in allowing the club’s owners to move it to Northampton, without any proper plan to get it back where it belongs in Coventry.

[Justin Tomlinson]

I know that my hon. Friend has worked tirelessly to support the long-suffering fans of Coventry City. Long gone are the days of the 1987 FA cup final, when Coventry had a 3-2 win over Tottenham. Watching that on the television is one of my earlier memories. My brother went to Coventry university, and it was the only time he was interested in football. He was pleased by the result on the day.

We keep coming back to the point on transparency. My hon. Friend the Member for Portsmouth North made the point that there would be alternatives if a supermarket was closing, but that people generally have only one community club to support. Yes, there will be good times and there will be bad times—in Swindon’s case, there have been a few more bad times than good times of late, but that adds to the excitement—but it should always be about transparency for the fans and for suppliers, who work hard to do their bit to support their community clubs and often give generous deals. We cannot simply abandon them and create this unique rule that protects wealthy people within football. I say that as a huge football fan myself. We have to do right by the community, the fans and the suppliers.

[Mr Jim Cunningham]

I thank the hon. Gentleman for giving way. I agree with the hon. Member for Nuneaton (Mr Jones): whoever owns the club, they have been playing ducks and drakes with the fans in Coventry. The fans are vitally important, but they are playing a guessing game on whether they will go back to the stadium or whether there will be a new stadium and, if so, where it will be located. It is 20 questions all the time, and that is how contemptuous they are of the people and fans of Coventry, quite frankly.

[Justin Tomlinson]

I agree wholeheartedly with that. What frustrates me, whether it is the Premier League or the Football League, is that it is in their interest that football clubs remain viable and continue to grow. It is a brand, and by and large it does work. The frustration was highlighted in the example given by my hon. Friend the Member for Portsmouth North. She said that at the eleventh hour—a huge amount of work had been done, the community had raised money and different people had pledged money—the goalposts seemed to be moved.

The Football League and the Premier League should have all the information registered and available, so that those seeking to step in to rescue, protect and save those valuable community assets are armed with the information that they need. In some cases, football clubs will disappear because it is just not meant to be, and some clubs will do better than they should, but that is just the nature of competitive sport. Where a set of owners have been reckless and the community wants to step up, whether that is through a new business owner or a community, fan-owned club, they should be able to have that information. The Football League and the Premier League should have it at their fingertips.

[Damian Collins]

My hon. Friend makes an important point. It is why it is important to have a proper fit and proper person test, administered by the Football Association, that can be done quickly. It can assess whether a new bid is worth pursuing or worth looking at, saying, “Is it from a fit and proper organisation or is it spurious?” If it is spurious, it should be set aside. It should not be down to the administrator to get the most money regardless of where it is coming from.

[Justin Tomlinson]

I agree with my hon. Friend. A whole review of the fit and proper test is needed, because my understanding is that while one of the tests is that a person must have a certain amount of money deposited in a bank account, they do not necessarily have to put that money into the club. I have seen that with Swindon Town. Wealthy people take over a club and have the potential to cover its liabilities, which would cover the suppliers, but that money is not necessarily used.

[Mr Jim Cunningham]

The hon. Gentleman is making a very important point. If we go back 15 to 20 years—I cannot remember the exact date—an individual wanted to buy Manchester United. Everyone was led to believe that he was going to buy the club, but at the end of the day he could not put the deal together. He totally misled people for some months.

[Justin Tomlinson]

I believe the individual ended up at Carlisle, and the club had a chequered time under his stewardship. Time and again, we are seeing people coming in for various different reasons without the interests of those football clubs at heart. I understand the world of business, but these clubs are valuable community assets. The Government need to apply pressure to the Football League and the Premier League, because it is in their interest to get their houses in order.

[Jim Shannon]

The hon. Gentleman is being gracious and kind in giving way again. We are referring to the English Football League. Will there be an opportunity for the Minister to look at what is happening in Scotland and the other leagues? I think of Rangers FC, which is an institution. I have supported the team since I was a young boy. The club has dipped in and out of administration and still has difficulties in the board room. The club is important: at its past three matches, 115,000 fans have come to support it. Does the hon. Gentleman feel that we have to look beyond the English league to the leagues in Scotland, Northern Ireland and Wales?

[Justin Tomlinson]

I absolutely agree. The issue affects football clubs across the country. In Scotland, there is the worrying experience with Hearts. As with Portsmouth, people are trying to do deals, but even the club cannot identify the owner.

[Damian Collins]

I just make the helpful point that many aspects of football are devolved. I originally wanted the debate to encompass Scotland, too, but I was advised that it could not.

[Justin Tomlinson]

I thank my hon. Friend for that.

In conclusion, there are huge amounts of good will towards sport and football, whether that comes from supporters or suppliers. We need to do whatever we can to ensure that they are equipped with knowledge, so that things can be remedied as quickly and swiftly as possible when they go wrong. That is absolutely vital for our local communities.

[Mr Gary Streeter (in the Chair)]

An injury-time strike by Marcus Jones.

15:19

[Mr Marcus Jones (Nuneaton) (Con)]

Thank you, Mr Streeter, for allowing me to make a short speech. I did not intend to speak when I entered the Chamber, but the issue that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) raises is important and we should support his endeavour to get the law affecting football clubs changed.

I am a long-suffering fan of Coventry City football club, like probably thousands of my constituents, who are extremely depressed and disappointed about what is happening to their football club. All football supporters follow their clubs for different reasons, and all experience tremendous highs and lows. Most probably get more lows than highs—unless they support one of the glory teams or are one of what I used to call Alex’s armchair army, supporting a team that might be many miles from where they live. Regardless of football affiliation, we must recognise that football clubs are community-based assets. They are not like any other type of business. If, for example, the customers of a supermarket chain suddenly decided they did not like what it was offering, they would usually abandon it and go elsewhere. Football supporters, however, regardless of how bad their team is at times, stick with it and support the club through thick and thin—or thin and thinner, in the case of my team at the moment. We must realise that; the clubs are embedded in communities.

Transparency has been raised several times. The people who follow clubs week after week, spending money, as my hon. Friend the Member for North Swindon (Justin Tomlinson) said, on season tickets, shirts and all sorts of things to support their club, deserve some transparency. They deserve to be able to hold their club’s owners to account. As to Coventry City football club, we do not even know who owns it. Many of the constituents whom I speak to are mortified that they cannot even find out who is to blame for its present situation. We need more accountability. We should never allow people to take on a football club that is embedded in a community, and then for whatever reason use it as a toy, thinking they can abandon the community, lift the football club up like a moveable commodity, and take it elsewhere.

[Mr Jim Cunningham]

The hon. Gentleman makes an important point. When we talk about wages, salaries and ownership, we tend to forget that football started with individuals playing in the street. The moral of the story is that it started with the fans, who created the teams in the first place; yet the fans get kicked in the teeth all the time when things go wrong.

[Mr Jones]

The hon. Gentleman and I do not often see eye to eye, but we probably do in this instance. Coventry City were a factory team, and started in the 19th century as a group of people from the Singer factory, who came together to play football. From that a great club was formed, which has lasted more than 125 years. We need to make sure we can see that the people running football clubs are fit and proper people. The clubs are not just commodities that can be shifted from person to person and area to area. They are organisations that communities depend on, particularly in a financial sense. When Coventry City left Coventry, it left a huge hole in the city, and that has particularly affected the local economy.

I support my hon. Friend the Member for Folkestone and Hythe, who is doing a fabulous job of raising the issues. He deserves every support, and I hope that the Minister will show him that she is in touch with the issue and willing to take action on behalf of millions of football fans throughout the country.

15:19

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship again, Mr Streeter. I thank my hon. Friend the Member for Coventry South (Mr Cunningham), and the hon. Members for Portsmouth North (Penny Mordaunt) and for North Swindon (Justin Tomlinson). There was also a good late substitution when the hon. Member for Nuneaton (Mr Jones) came on to the pitch. Most of all I thank the hon. Member for Folkestone and Hythe (Damian Collins) for securing the debate. The manner in which he advanced his excellent, eloquent argument was first class, and he set the tone for the rest of the debate. He closed his remarks by explaining that the issue is one that arguably affects all our communities. It certainly affects millions of football fans.

I was particularly pleased that my hon. Friend the Member for Wirral South (Alison McGovern) was here, because she is a fan of Liverpool football club, and Bill Shankly, one of this country’s greatest ever managers, famously said:

“Some people believe football is a matter of life and death, I am very disappointed with that attitude. I can assure you it is much, much more important than that.”

In many ways that is true, as we have heard today. Football makes a remarkable contribution to society. In my own patch, about a fifth of Hartlepool’s population travelled to Cardiff’s Millennium stadium to see Hartlepool United against Sheffield Wednesday in the league one play-off final in 2005, where we were cruelly robbed by an appalling refereeing decision. [Interruption.] It was a fabulous stadium.

Football provides a place with a sense of identity and belonging, and a recurring theme of the debate has been that clubs are much more than merely businesses. They are vital social institutions that bring and bind communities such as the people of Hartlepool together. There is a strong case for saying that in matters of business, governance, ownership, transparency about those matters and insolvency, the wider effects on society and communities should be considered.

It always strikes me as odd that, given football’s central importance to our society and communities, its finances are often precarious. Every year, Deloitte, a firm for which I used to work—I draw the House’s attention to my entry in the Register of Members’ Financial Interests—produces a review of football finance. The latest review showed that in the 2011-12 season, the total revenues of the 92 clubs in the top four divisions of English football exceeded £3 billion for the first time. However, the Premier League accounted for almost four fifths of that total. Lower down the leagues, it is a different story. In the 2011-12 season, the average revenue of a league one club was £5 million, with an average net loss of £2.4 million; and in league two revenue was £3.3 million, with an average net loss of £0.3 million.

My local club, Hartlepool United, has had its fair share of flirtations with insolvency, although not in recent years, thankfully. We are infamous for a record number of re-elections to the Football League, and in the 1980s there was a time when we owed £52,000 to the Inland Revenue and a six-figure sum to other creditors. We were days away, in 1983, from being wound up, and the bailiffs took the goal posts, goal nets and grass cutter to pay the debt—not that we noticed much, because that year we finished third bottom, with a goal difference of minus 30. The only people below us, funnily enough, were Hereford United. It is funny how things go. We were actually wound up in the High Court in 1992-93 but the town’s club was saved by a great man—Harold Hornsey—and that helped to put Hartlepool United on a much better, sound financial footing.

[Jim Shannon]

Even though a club may be small, it makes a contribution to its town or city, and to society, and gives people pride even when it is not playing as well as it might or as well as people would like. Those are important factors for communities, and we should not take away from that. Perhaps a club will never become a Manchester United, Liverpool or Rangers, but it can always be an Ards football club, or a Hartlepool United. Those things are important to society.

[Mr Wright]

I must disagree with the hon. Gentleman. In my lifetime, Hartlepool United will become a Manchester United or a Liverpool, and I will live to see us lift the champions league trophy, so the hon. Gentleman is wrong in that respect. He is right, however, about the vital contribution that clubs make to local businesses. Hartlepool borough council recently undertook an assessment of Hartlepool United’s economic impact on local businesses and, astonishingly, the club provides something like £5 million to Hartlepool’s economy.

The figures I have quoted show how inherently uncertain is the business model on which much of football is based. The hon. Member for Folkestone and Hythe said that 46% of clubs have been through a formal insolvency procedure since 1992. No other sector of the economy has had that level of insolvency, which highlights—this was one of the hon. Gentleman’s most articulate points—the possibility of reckless spending. Entry into the premier league—the most exciting and followed league on Earth—could mean as much as £50 million to a club. It is the glittering prize to which all supporters and owners aspire, but it leads to reckless gambles in the transfer market, which could undermine the financial viability and long-term security of a club. Some argue that the football creditors rule prevents clubs from spending money on players whom it cannot afford, but we have heard today that that is far from the case. The football creditors rule means that there is no inherent brake on transfer spending or on—as the hon. Gentleman said—the shared risk of a club not being paid for the transfer of a player, because football creditors are paid in full at the expense of other unsecured creditors.

[Damian Collins]

I agree with the hon. Gentleman’s point. Does he agree that, without the creditors rule, clubs would have to be much more open about their financial status, because that would be a prerequisite of clubs wanting to enter into transactions with them?

[Mr Wright]

That is a fair point. The insolvency rule specifically, as well as the hon. Gentleman’s wider point about governance and transparency, would be better for the game. He also suggested replacing the football creditors rule with some form of sinking fund, and I would be interested to hear whether the Minister is working with the Football League, the Football Association and others to examine such a proposal.

The rule can often act as a drag on a club returning to speedy financial health. I am pleased that the hon. Member for Portsmouth North was here earlier, because Portsmouth football club is now owned by the fans, but still has a significant liability of some £7 million owed to ex-players, which the supporters, because of the football creditors rule, must pay in full. That cannot be a good way of getting the club back to financial health. The need to curb the tendency to overspend makes the financial fair play rules, which cap the salaries of league one and league two clubs against a percentage of their turnover, so important, but are the rules the full answer? What will the Minister do to ensure that they are complied with and enforced?

The essence of today’s debate, which has been articulated by many hon. Members, is this: why should we have the football creditors rule if it means that clubs and players are paid in full ahead of all other creditors when a club enters insolvency? This quote from former Sunderland chairman, Niall Quinn, has been mentioned before, but it is worth repeating, because it sums up the problems of the game. He said:

“The fan in the street meets the guy who printed the programmes who didn’t get paid and he sees the player driving out in the big car who was paid, and I think that’s damaging.”

As mentioned by several hon. Gentlemen, there seems to have been a marked shift in tone and emphasis since the Government response to the original Culture, Media and Sport Committee report in 2011, which stated:

“We have sympathy for those who described the consequences of the rule as ‘morally indefensible’.”

“Morally indefensible” is an extremely strong phrase, and the Government sympathise with the position, from which I can infer that the Government wanted to see an end to the rule and wanted to move, through legislation if necessary, as quickly as possible. After the follow-up investigation by the Select Committee, however, the Government response in April 2013 stated that the Government hope that financial fair play rules will

“negate the need for football to rely on the Football Creditors Rule in cases of club insolvencies. However, we will monitor the effect this self-regulation has on the financial discipline and solvency of clubs, and, if necessary, will re-consider whether legislation is needed to address this issue.”

The tone is markedly different. The hon. Member for Hereford and South Herefordshire (Jesse Norman) also referred to a written parliamentary question from last month, in response to which the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Maidstone and The Weald (Mrs Grant),said:

“The Financial Fair Play rules now introduced across football which, combined with compliance checks that the FA and league administrators carry out on participating clubs, aim to improve financial management and stability across the leagues…Legislation remains an option if the football authorities do not demonstrate that they can reform their own governance of the game…The Government’s position on the football creditors rule is clear.”—[Official Report, 27 February 2014; Vol. 576, c. 495W.]

As we have heard time and again in today’s debate, the position is far from clear. The Government seem to be shying away from the necessary heavy tackle. What are the criteria for legislation to be brought forward? What is the time scale on such legislation? How long do clubs have to demonstrate reform of governance and financial management before the Government act?

There is a wider point here about insolvency policy in general. The Opposition are keen to improve the insolvency regime, so that the public and investors have greater confidence that delinquent directors who are unfit to run a company are pursued efficiently and effectively, which is not the case under this Government. In 2012, just a fifth of reports passed to the Insolvency Service by insolvency professionals resulted in a disqualification court order or an undertaking, compared with 45% 10 years ago. Why has there been such a drop? Why are the Government allowing unfit directors to walk away from their responsibilities? What are the Government going to do about it? Last week, we tabled an amendment to the Deregulation Bill to scrap the need for insolvency practitioners to submit certain forms in hard copy and allow them to do so online, as a means of streamlining the process and ensuring that insolvency policy can be brought up to speed. Will the Minister accept that?

I thank all hon. Members for contributing to today’s debate, which has been incredibly important. We have seen a cross-party approach to this important matter, and I hope that the Minister will provide what hon. Members are calling for: greater clarity and a plan to address the wider point about an insolvency policy that is allowing delinquent directors to get off scot-free both in football and elsewhere.

15:29

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I thank the hon. Member for Folkestone and Hythe (Damian Collins) for calling for this debate. He has shown his commitment to football issues over several years—issues that many hon. Members feel strongly about.

Football is a fundamental aspect of British life. I married into a family of Evertonians. My children were wearing Everton babygros before they reached the age of one—the indoctrination started early—so they have absolutely no choice in the matter of whom to support. The financial health of football clubs is a hot topic on both the terraces and the sofas of Britain. Fans are perpetually nervous about which club will be the next to struggle or fail and endlessly discuss clubs’ costs and budgets. The Government appreciate the part that football clubs play at all levels across British society. They are a fundamental part of the social fabric of communities up and down the country.

None the less, the rules that govern corporate life cannot be selectively applied. Those who deal with a football club—its suppliers, its employees, the Crown—should have the same confidence that they will be paid as they would if they were dealing with any other business in any other industry. Insolvency is a risk—hopefully a low one—in all industries, including football. No honest person runs a business expecting it to fail, but when there is failure, it is important to have an insolvency process that is fair and transparent and, where possible, saves viable businesses; that applies as much to football as anything else. The UK’s insolvency framework was recently judged by the World Bank to be 7th best out of those of 189 nations; it came ahead of France, Germany and the United States.

The hon. Member for Folkestone and Hythe pointed out that quite a number of clubs have experienced financial difficulties in recent years. The majority of premier and Football League clubs that have become formally insolvent in the last 20 years have entered the insolvency procedure known as administration.

[Mr Jim Cunningham]

Does the Minister intend to answer my questions, and those of the hon. Member for Folkestone and Hythe (Damian Collins)? What are the contents of the legislation that is to be proposed by the Government? Will the Minister support the hon. Gentleman’s Bill? Alternatively, may we have a date for when the Government will introduce legislation? The situation has been going on for far too long—for about two years—and we have heard the evidence from Coventry, which is a good test case.

[Jenny Willott]

If the hon. Gentleman gave me some time, I might be able to answer some of his questions.

Most clubs that have entered insolvency have gone into administration. The primary objective of an administrator is to rescue the company wherever possible. If the business can keep going, that is the best outcome for employees and other stakeholders. Administration is therefore a rescue procedure and, judged on that criterion alone, football administrators have been successful. In spite of the number of clubs facing difficulty, as highlighted by a number of hon. Members today, no Football League club has gone out of business mid-season since the demise of Aldershot in 1992.

Administrators are governed by statute. Their primary focus is on rescuing the company, but the survival of the company or business will always be balanced against the interests of the creditors. Put simply, an administrator cannot save the company if that is not in the interests of the creditors. As was highlighted by the hon. Members for North Swindon (Justin Tomlinson) and for Portsmouth North (Penny Mordaunt), generally, rescuing a football club is in the broad interests of the creditors and the fans. That is because the alternative to a rescue out of administration is liquidation, in which a club’s assets are turned into cash, its affairs are wound up and any remaining funds are distributed to creditors.

On liquidation, football players’ contracts are void and they receive what is known as a free transfer, which means that no transfer fee need be paid to the liquidated club. That is clearly not in the interests of creditors, as the players’ contracts are an important asset of the club, being worth significant amounts of money. As hon. Members have said, including the hon. Member for Coventry South (Mr Cunningham), the Football League is in essence a members’ club, with all the clubs having a share in it, sometimes known as the golden share. To continue membership of this club and to retain the share, members must abide by the rules. Among the rules is the Football League’s insolvency policy.

One aspect of that insolvency policy, as we have discussed today, is the football creditors rule, under which all football creditors must be paid in full if a club is to remain a member of the Football League. The list of football creditors is long, so it would be slightly tedious to read out, but it includes players, the staff of the club, the leagues, the Football Association and other clubs, as was mentioned by a number of hon. Members. Other than in exceptional circumstances, if the football creditors rule is not followed, the club will lose its share in the Football League. Without the share, the club cannot take part in league matches and will in effect cease to trade. If a football club is in administration, the loss of the share will almost inevitably result in liquidation, which, as I said, voids all player contracts. If that happens, the football club is in effect dead, which is disastrous for all classes of creditor, because there is no value in a club that has been kicked out of the league and has no players.

[Damian Collins]

What the Minister says is correct, but that is down to the rules of the Football League. We could amend insolvency law to give the administrator the power to compensate all unsecured creditors equally and fairly, and it would then be a matter for the Football League to decide what it did with the club after the administration.

[Jenny Willott]

The administrators are regulated professionals and are obliged by law to perform their functions in the interests of the company’s creditors as a whole. They are complying with insolvency law. The administrators are not bound by the Football League’s rules on football creditors; they are required by law to treat all unsecured creditors equally. Those are the rules under which administrators operate, but it is clearly in the interests of a potential purchaser to abide by the Football League’s rules and to ensure that football creditors are paid in full, to be able to keep the club operating. It is usually in the best interests of administrators to sell to someone who will do that to keep the business operating and keep the club playing as part of the league. If the purchaser does not do that, there is a significant risk that the Football League will not allow the club to compete, and the purchaser would then own a worthless club.

[Damian Collins]

I question that, on behalf of non-football creditors. Under insolvency, they might get less than 1p for every pound that they are owed. What interest of theirs does the process serve? They are in effect watching football creditors being compensated fully, but are themselves walking away with what in any other administration would be considered practically nothing.

[Jenny Willott]

It is important to remember that the money being used to pay the football creditors is not drawn from the assets being used to fund the other unsecured creditors. It is not the same pot of money.

[Damian Collins]

The Minister makes an important point, but this is where legislation might be necessary, because the football authorities will withhold money that is due to the club at the end of the season to carry out, in effect, their own administration process by settling football debts that the club cannot manage. We should make it a requirement that administrators have access to those funds that are due to the club at the end of the season, so that they can be factored into the administration of the club.

[Jenny Willott]

This was looked at fairly recently by the High Court, which decided that those funds did not count as assets of the club. The assets of the club have to be divided up in accordance with insolvency law, under which the administrator has to look at all the unsecured creditors. I completely understand what the hon. Gentleman is saying, but following the High Court ruling, I believe that those funds do not count as assets of the club.

[Damian Collins]

Under the Football League rules, those funds are not necessarily due until the club completes the season. If the administrator were free to carry on the administration until the end of the season, I do not see why the administrator could not reasonably draw on those funds as well.

[Jenny Willott]

The hon. Gentleman makes an interesting point, but I have to confess that I do not know the answer. If it is okay with him, I will write to him after the debate to clarify that point.

When a football club is sold, which takes it out of insolvency, the purchaser generally funds the payment of the football creditors, or other funds that do not belong to the club are used. A different pot of money is therefore paying for the football creditors. That is one of the reasons why the football creditors rule does not breach existing insolvency law. Were the funds to come from the same pot, it would breach the law, because it would be treating different unsecured creditors differently. Nevertheless, today and on a number of occasions in the past, it has been suggested that the football creditors rule should be abolished through legislation. The hon. Member for Folkestone and Hythe has made that point today.

The number of Football League club insolvencies has declined significantly in recent seasons. In the 2003-04 season alone, six clubs became insolvent. Five years ago, there were around three or four failures per season. Happily, however, there have been no football insolvencies at all so far this season and only two in the season before that, and in one of those there were no football creditors, so the situation seems to be improving slightly. Insolvency is not the cause of a football business’s problems; it is a symptom arising from an underlying lack of financial stability.

The hon. Member for Hartlepool (Mr Wright) and other hon. Members mentioned financial fair play; the football authorities have made significant moves in recent years to put clubs on a stronger financial footing. They have introduced an early warning system for tax debts, salary caps and an agreement on financial fair play rules, which will ensure that clubs do not spend more than they earn. Those measures are possibly already having a beneficial impact in increasing financial stability, which will lead to a decrease in the number of insolvencies.

[Jim Shannon]

I intervened earlier to ask hon. Members what talks the Minister has had with other Administrations, because the Scottish Football Association is separate, and sport is devolved to the Northern Ireland Assembly and the Welsh Assembly. I am not trying to be nasty, but I want details on any discussions that the Minister has had with the devolved Administrations on these problems, which are very apparent in other regions of the United Kingdom of Great Britain and Northern Ireland.

[Jenny Willott]

The issues that the hon. Gentleman is raising are more connected to the administration of the game of football as a whole than to insolvency. I have not discussed those issues with counterparts in other Administrations, but Ministers in the Department for Culture, Media and Sport may have done. I am happy to write to him to clarify that point; I do not know the answer to his question off the top of my head.

It is important that we encourage the football authorities to continue with the financial fair play rules, to ensure that football has a solid financial base on which to operate. If there are no insolvencies, the football creditors rule does not come into play, so we get around the problem.

[Damian Collins]

I do not think that it is fair to say that if there are no insolvencies, we should not look at getting rid of the football creditors rule. In her opening remarks the Minister said that the rules of corporate life cannot be selectively applied, but that is what is happening. It should not; it should stop.

[Jenny Willott]

Insolvency law is applied equally to football clubs and any other businesses facing insolvency.

[Damian Collins]

The Minister says that, but there is no other sector of industry in this country that has a rule whereby it treats one group of unsecured creditors—its friends—differently from another group. I know that this has been tested in the High Court and is legal, so clubs can do it. The purpose of the debate is to question whether it should be legal, or whether we should stop it.

[Jenny Willott]

I appreciate what the hon. Gentleman is highlighting. I have sympathy for the views he is expressing.

[Mr Iain Wright]

To back up what the hon. Member for Folkestone and Hythe (Damian Collins) says with a specific example, Plymouth Argyle FC went into administration in 2011. Its football creditors were paid in full, but the unsecured creditors received a dividend of 0.77p in the pound—less than a penny. That cannot be a fair means of making sure a business can become viable. Will the Minister change legislation to change that?

[Jenny Willott]

Changing the legislation would not necessarily have made any difference. The money that goes to pay the football creditors does not come out of the pot of assets that is used to pay the unsecured creditors. There is no evidence that if we changed the football creditors rule there would be more money available for the unsecured creditors. They would quite possibly still get exactly the same return on a pound. Clearly, in the case the hon. Gentleman cited, the return was extremely low, but I have seen no evidence to suggest that it could have been greater. It is not the same pot of money that is used to pay each group.

To put the matter in the context of insolvencies as a whole, in 2013 there were about 20,000 corporate insolvencies in England and Wales, of which around 2,400 were administrations. The Government feel that using primary legislation to outlaw a provision that is relatively infrequently used is disproportionate, particularly given that the industry is already trying to improve the underlying financial stability of clubs via the financial fair play rules. Other than those to which special regimes apply, all insolvencies are subject to the same legislation, the Insolvency Act 1986. It would be potentially confusing for users of that legislation if we modified it just for football insolvencies. No other industry is treated differently under general insolvency legislation, and the Government feel that there is no compelling reason why football club insolvencies should be.

Football is undoubtedly incredibly important for fans. I understand the frustration of fans whose clubs become insolvent through no fault of those in the stands or on the terraces. Given the emotional importance of football for fans, I understand how distressing it can be when a club goes into insolvency. However, as I said at the start, the rules that govern corporate life cannot be selectively applied—they apply across the board—and those who act as directors of football clubs should act properly in execution of their duties.

A number of hon. Members have highlighted concerns about directors. The law allows the Secretary of State to undertake civil proceedings against company directors who are found to have been culpable in the failure of a company. However, until a person has been disqualified, they are free to act as a director of any number of companies in the UK, irrespective of their track record or any criminal charges that may be pending, although someone who is personally bankrupt or subject to bankruptcy restrictions is prohibited from acting as a director.

Hon. Members have mentioned the owners and directors test, which places additional restrictions on clubs. I understand that those restrictions are increasingly based on intelligence, and that football authorities are co-operating to make the test as effective as possible.

Overseas convictions were mentioned. At the moment, there is nothing to prevent a person who has been convicted of offences in connection with a company overseas from acting as a director of a UK company. However, the “Transparency and Trust” discussion paper published last year included a proposal to enable the Secretary of State to bring disqualification proceedings in the UK against anybody convicted of a serious offence in connection with a company overseas. We will publish the Government response to that consultation soon. The issue is currently being considered.

We want the UK to be a trusted place for people to carry out business. Part of that is ensuring that directors of limited companies take responsibility for their actions and have regard to creditors and employees. The majority of directors do that effectively, but action can and will be taken against those who do not play by the rules. When a company enters formal insolvency, such as administration, the administrator has a duty to report on the conduct of all directors in office in the previous three years. The Insolvency Service, which acts on behalf of the Secretary of State, looks at all reports in which the administrator suggests that misconduct has occurred, and when it is in the public interest to investigate, it will do so.

If disqualification proceedings are highlighted as being necessary, once the Secretary of State has authorised them, the company director can either give an undertaking or be disqualified. If disqualified, a director can be banned for up to 15 years, depending on the seriousness of the misconduct. Over 100 directors are disqualified each month; the average period of disqualification is around six years, and over 10% of disqualifications are for more than 10 years. That is all a matter of public record, as details are held at Companies House.

Various football directors have been disqualified over the years. For example, in 2011 four directors of Luton Town football club were disqualified for a combined total of 19 years, a significant penalty. They were found to have breached Football Association and FIFA rules and caused the company to trade at risk to, and to the detriment of, HMRC.

Hon. Members raised issues about specific clubs. I am an MP for Cardiff, where the Bluebirds now wear red, and was previously a local councillor in Merton, when Wimbledon football club was having a number of local difficulties about where they were going to play, so I have witnessed at first hand the trauma that club ownership issues can cause to supporters. A number of Members have mentioned their concerns about Coventry City football club. The hon. Member for Coventry South raised the golden share, which I mentioned earlier. My understanding is that the Football League has learned from the case of Coventry City and has strengthened its checks on who holds the golden share in response.

[Mr Jim Cunningham]

It took a long time to get an answer from the Football League on that question. It was not clear-cut at the beginning; it took a considerable period of time.

[Jenny Willott]

That may well have been the case. I take the hon. Gentleman’s point. On club ownership and the identification of club owners, the football authorities are confident that they can identify club owners. The Football League has responded to the situation at Coventry City to ensure that that picture is not replicated elsewhere.

[Mr Marcus Jones]

rose—

[Jenny Willott]

I will not give way, I am afraid, as I have about one minute left. Portsmouth football club is a strong example of a supporter-owned club. The Culture, Media and Sport Committee recommended that the DCMS set up an expert group to consider supporter ownership within the sport. That is now happening, and the experience of Portsmouth FC will be invaluable in shaping considerations on that issue.

This is an extremely emotive issue. Members demonstrated in their contributions how strongly people feel about football. I appreciate that Members will be disappointed that I will not commit today to changing the law in this area. DCMS Ministers have meetings with the football authorities about a variety of issues and have discussed the football creditors rule in the past. However, there has been a significant reduction in insolvencies following the introduction of the financial fair play rules, with no cases this season. We want to encourage responsible spending in football to avoid the pain, both financial and emotional, of insolvency. That is a better way for those working in or supplying a football club, as well as being in the best interests of supporters. If that does not work, the issue will merit further examination, but I hope other hon. Members remain as optimistic as I am about the situation.

Whitchurch Playing Fields

Tuesday 18th March 2014 Westminster Hall

16:00

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I wish to raise an issue regarding Whitchurch playing fields—which are, as I will describe, unique—and general issues for the Department for Education in the longer run.

The Whitchurch playing fields are very much a beloved local resource in my constituency, being 25 acres of grass land, enclosed by Abercorn road, Old Church lane, Wemborough road and the aptly named Marsh lane in Stanmore. They are a wide open space, with trails for dog walkers and a pavilion, which has been subject to vandalism, graffiti and severe fire damage over recent years.

The fields are used by 35 local schools for sports purposes, including Whitchurch First school, which is on the site itself. They are also used by youth groups, community organisations, religious groups and football clubs on a regular but, unfortunately, informal basis at present.

Just to give some background, the site was originally called the Carreras sports field and was owned by the Carreras cigarette factory as a place for employees to exercise and for general use. It was subject to a compulsory purchase order by what was then Middlesex county council in 1960, to be used specifically as school playing fields. The usage of the playing fields has a long precedent, and that is why residents and local groups are fighting extremely hard to protect them.

It is important to state up front that the issue is not about maintaining a green space for sentimental reasons; this is not nimbyism—far from it. Campaigners are open to appropriate suggestions about the future of the site, but they are wary of shady deals behind closed doors that prevent local groups, particularly local schools, from using the fields as they have done for decades.

The Conservative administration in Harrow between 2006 and 2010 looked at the possibility of using a group of sports clubs or a consortium to run the playing fields, but dropped the idea, owing to a number of concerns raised by residents. In 2010, Harrow council fell under Labour control and then, after an acrimonious split, independent Labour control. That was when all the trouble began.

The Labour-run council decided to progress a private consortium, known as the Whitchurch consortium, made up of Blake Hall Club, Runwood Homes and Cavendish Rowe, which stepped in with proposals to spend millions on rehabilitating the pavilion and building a sports and leisure complex on the site, which they said could be used by local schools. Everything was promised, including the earth and the kitchen sink. We were to expect improvements to the playing fields’ surface; a new sports pavilion with changing rooms and showers; a café and a bar; as well as numerous football and cricket pitches. The nearest school, Whitchurch First, was duped into offering support for the proposal, lured in by the brand-new sports facilities and a clean-up of the dangerous pavilion structure that adjoins the car park on its part of the site.

However, the Labour-run council completely failed in its duty to look past any of the smoke and mirrors and made some very questionable arrangements. For a start, the lease was given at a peppercorn rent, which, after a long battle was fought under freedom of information laws, turned out to be zero—absolutely nothing. Effectively, Harrow council was giving away those 25 acres of communal land to a private consortium for free.

The original bidding process was short lived and resulted in only two bids, one of which was later withdrawn. Even worse, the lease term for the development was changed to 99 years, with no stipulations given to ensure that the site would be used entirely for sports for the benefit of local schools and people.

The numbers do not add up. There is no way the consortium could use their investment in the site as it currently stands. It can be no coincidence that the head of the consortium is a private property developer. The fields are a large site with immense value for housing. Given the 99-year lease, how long after the sports facilities are built will it be before the site is earmarked for residential or business development to get a return on the investment? Beyond those concerns, residents also fear that the bar would be open all hours of the day and night, and that the sports centre would be used for large-scale events, with consequent traffic and noise.

I wrote to the auditor last year about the conduct of Harrow council in its dealings with the consortium. In its reply, the auditor reminded the council that it had to make

“all decisions about this land on a lawful and proper basis and after taking appropriate advice.”

In particular, the council’s attention was drawn to the advisability of

“carrying out a valuation prior to any disposal of the land, and to the need to ensure their tender processes are fair and transparent.”

The profiles of the people leading the consortium are somewhat questionable. One member, Mr Ramesh Nadarajah, is director of two Lancaster Gate-based firms: Cavendish Rowe and Cavendish Investments. Cavendish Rowe is an estate agent, with specific interest in the W2 London postcode. It describes itself as

“prime central London property specialists dealing in investments, sales and acquisitions”,

and says that it is

“fluent in understanding the value of each specific area. Our unique knowledge of London allows us to make fast decisions and act quickly on opportunities offered to us.”

Another of the groups involved in the consortium is Runwood Homes, a residential care service provider with no link to the Harrow area. The company has courted controversy, with some of its homes failing to meet adequate standards of care for service users while delivering seven-figure dividends to director George Sanders and his family. In 2009, Mr Sanders was involved in a case with Castle Point borough council, regarding his close friendship with a member of the council, Bill Sharp, and subsequent improper influence of planning officers by Councillor Sharp when dealing with an application made in 2007 by Runwood Homes plc, which resulted in Councillor Sharp’s suspension from the council.

The final company in the consortium, Blake Hall Club, is now referred to as Wanstead Sports Club LLP. The club was fined in 2012 for breach of its licence conditions, failing to prevent excessive noise and antisocial behaviour. The local licensing sub-committee in that area was critical of the club in a further report as recently as last year.

I am yet to be made aware of any connection linking that sports club, or any of the developers, with Whitchurch playing fields, let alone the wider Harrow area. That hardly suggests a group of stakeholders with a clear commitment to community ventures in Harrow.

Whitchurch residents discovered only by chance that the playing fields had been signed over to development, without even the slightest attempt at consultation, in 2011. Local residents Melanie and Stephen Lewis put in an application to have the site recognised as a village green, which I supported; even if it failed, it would delay things enough for the proposals by the consortium to receive far greater scrutiny. As it happens, the village green bid was rejected by Harrow council’s licensing committee at the end of last year, leaving the fate of the fields open for debate once again.

The deal that was struck was a bad one for local schools and community groups, which have always used the fields on an as-need basis, and there has yet to be an issue. The consortium proposed to allow only 1,000 hours’ use a year, 9 am to 5 pm weekdays in term time, with no word on whether that would be collectively or per school. The changing rooms would be made available free of charge only to a small number of schools in the local area—Stanburn and Whitchurch—and only community schools, so any academies would not be allowed access. Indeed, if those schools applied to become academies, they would be barred as well. All other local schools would have to pay for use—half price up to 200 hours a year but full price after that. Again, academy status would render them all ineligible for discounts.

Community groups would also be hard done by. Stanmore Baptist church, which adjoins the site, would have to cancel all but one event a year, and Age UK Harrow restricted to a mere 100 hours a year before having to pay its way.

It is true that something has to be done on the site. Some 60,000 square metres of the fields are on a flood plain—hence the name of the road, Marsh lane. The site provides necessary drainage—estimated as equivalent to 28 Olympic swimming pools—and any overdevelopment could damage existing properties in the surrounding area. The pavilion is a material consideration as well, as it will cost money to remove or save. The playing fields need more maintenance than they are currently receiving, so some strategy would be welcome.

I believe that the answer is now in evidence. The Avanti Schools Trust has identified the playing fields as a potential site for the desperately needed Avanti House secondary school. The existing Avanti House school is the only state-funded Hindu school in the country, offering all-through education, with both primary and secondary provision. The primary school, operating under the name Krishna Avanti primary school, is based on Camrose avenue in Edgware, on a site developed by the Conservative administration of the council.

The school, however, has had several difficulties during its formative years. The secondary school has struggled to settle at a permanent site. Having been transferred from the Teachers’ Centre in Harrow, it is now in Stanmore on the site of a former private school, which cannot be expanded any further. The fields are less than two miles from that main school site, so they are perfectly placed for the school’s expansion to accommodate 1,260 students at full capacity. That is a popular solution, which I praise the current Conservative administration for identifying and pursuing. Local residents back the idea as a means to provide more school places locally, which are desperately needed in the area.

If allowed, that alternative development would preserve the use of the fields for school sports for many years to come, not only for the immediate schools, but for all local schools, and it would provide an alternative green space. Currently, the schools have to face an over-strict booking system and the prospect of paying through the nose to use fields that should be free by right.

Other areas have used funding from a private consortium to create sports complexes for use by schools, but this is a unique position. Nowhere else in the country has the sheer number of schools needing to use an open space like this. There is simply no way that a booking system will be able to accommodate them all. It is a fundamental reality that provision for school sports locally would be harmed by the consortium’s proposals, and there is no way around that.

Crucially, when the application for village green status was being considered, papers were discovered that listed the site as school playing fields and therefore protected them from any redevelopment. The Department for Education’s permission is therefore required for any proposal that would have an impact on school sports locally.

I have secured this debate because it is vital that the playing fields are preserved for the use of all the schools that need them. I also believe that the site should be put into the hands of the Avanti Schools Trust, on the condition that the majority of the fields continue to be used, as they are now, for local sports, schools and local communities.

The Minister’s Department has begun a feasibility study into whether the Avanti House secondary school solution is a genuine prospect. If accepted, that would lead to a planning application being submitted soon and a school on the site by 2016. The Avanti Schools Trust is already a strong presence in our area, which has a very significant Hindu community, and it has proved itself trustworthy as a developer and as an excellent provider of quality education.

By contrast, the Whitchurch consortium is now threatening to sue the council if it does not get its way with the site. It claims loss of income and the cost of work carried out, which is ridiculous, given the peppercorn rent that it obtained in the original deal. Frankly, it has no interest whatever in doing what is best for our community. All it wants to do is make a profit, and it will threaten and bully as much as it can to get its end product. Is it any wonder that local residents are concerned?

The Minister was kind enough to attend a meeting with local councillors and campaigners at the end of last year and to elaborate on what would happen with the site. I fully understand that matters related to planning permission, noise pollution and so on do not come into the role of the Department for Education or that of the School Playing Fields Advisory Panel, but there is a duty to ensure that proper consultation takes place before the council can agree to any development on land that has been classified as having school playing fields status. It is very clear that no consultation took place in relation to the consortium’s plans in this case, which should render its application invalid. I call on the Minister to ensure that it is proven that any development would enhance school sports provision locally.

I understand that it is a matter of oversight, and it is not for the Minister to block applications based on local opinion, history, or on other things—even on what I think about the issue. It is about securing the future of the playing fields for their intended purpose. I believe the objections I have raised must cause concern to the Department for Education.

I shall end with a few questions for the Minister, which I hope he will answer in his speech. The feasibility study is currently being carried out for the Department and is likely to lead to the use of only a portion of the site by the Avanti Schools Trust. Will the Minister take steps to ensure protection from further attempts by private groups to land grab the rest of it, given the site’s status as school playing fields? Will the Minister confirm that the Department has not received any other applications to change the status of the fields—from school playing fields to private playing fields or for them to be used in any other ways that I described—from private consortiums, developers or any other interested parties?

Will the Minister offer any advice in relation to the issue of the playing fields being on a flood plain? Will the Department or the Avanti Schools Trust bear any responsibility for its drainage, particularly given the educational status and strategic nature of the site?

Finally, if the consortium were to gain control over any part of the playing fields, what protection can be given for use by schools that have opted for academy status? As I have demonstrated, the plans that the consortium currently envisages distinctly disadvantage those schools from using the land. Thank you for your forbearance in listening to me, Mr Streeter, and I look forward to the Minister’s response.

16:16

[The Minister for Schools (Mr David Laws)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing the debate on behalf of his constituents, and thank him for the support he has consistently given to the Avanti House free school, which, as he knows, is one of the largest free schools in England. I have carefully noted the comments he has made about the consortium and the concerns that he and many of his constituents have. We discussed those concerns in the meeting we held at the end of last year. The debate provides us with an opportunity to consider the possibility of building a new school on Whitchurch playing fields in this suburban area of Harrow, and to touch on a number of the other associated issues and concerns that he raised during his speech.

I know how concerned my hon. Friend is about the possible development of the site. It was just over three months ago, in December last year, that I met him and a number of his constituents to discuss those concerns. In that meeting, we looked at the possible development by a consortium and what that would mean for other users of the site, especially the local schools. I understand why he is concerned about some of the potential implications.

Today, we are talking about the site being considered for building a new school. Harrow is one of the many local authorities in London and beyond with pressure on school places, as my hon. Friend well knows. The population of the area is growing and we need to meet the potential future shortage of places in both primary and secondary schools. Harrow predicts that in 2021, it will have a shortfall of 700 places for 11-year-olds, so a large expansion programme of school places is already under way in the area. Avanti House will help significantly in meeting that potential deficit in school places, with 180 places created in each academic year within the school.

As my hon. Friend knows, the school only opened in 2012, but it is already extremely popular with local parents. When it reaches capacity in 2018, it will be providing almost 1,700 much needed new places. Indeed, it will most likely be the second largest free school in England at that point. The local authority supports the school, and its sister school, Krishna Avanti, is very popular, too—so much so that it is doubling in size to provide places to meet the local demand. Naturally, parents wish to send their parents to schools with a strong history of providing a good quality education.

Avanti House school is unique in Harrow, as it is the only secondary school with a Hindu ethos. That borough obviously has a large Asian population, and the arrival of a Hindu school will mean increased choice for the residents and reflect the borough’s existing diversity.

As my hon. Friend knows, it has been hugely challenging to find a suitable site large enough to accommodate the entire school. I know that he has been very constructively engaged in trying to find a solution on behalf of his constituents. The problem is faced by a number of new schools, especially those opening in areas such as Harrow and, indeed, right across London. Buildings and land in our capital city are scarce and, in a growing economy, are being sold for increasing sums of money, so they are also expensive to procure.

Avanti House opened in temporary accommodation, spread over two sites, and the secondary phase has already had to relocate once since opening. The search for a site for Avanti House has been a long one. It started in 2011, and many sites both in Harrow and in neighbouring local authority areas have been considered and surveyed. All have so far proven unworkable, for a variety of reasons. We look at a wide range of land and building options for free schools, from office blocks to jobcentres to warehouses, as well as reusing any spare education facilities. A permanent site has now been secured for the primary phase, but a permanent site for the secondary phase has up until now not been secured.

Naturally, and as my hon. Friend knows, we were encouraged when late last year the leader of Harrow council put forward Whitchurch playing fields as a possible option for the Education Funding Agency to consider. I must stress that the project is currently in the feasibility stage. We are carrying out surveys to see whether it is possible and practicable to locate the school on the site. That work will identify any critical issues that may affect development. Obviously, issues such as the floodplain on part of the site will need to be very carefully considered. The review is not due to be completed until next month, and only then can we be sure whether the site is appropriate, so I must emphasise again that the site is currently under consideration. It is not yet secured or confirmed, as my hon. Friend knows. What I can say, as he has said, is that its location is very well placed for the communities that it would serve and for the school’s sister primary school, Krishna Avanti.

It is acknowledged by the local authority and community users that the Whitchurch site is currently not in the best condition. That was made worse by the pavilion burning down a number of years ago and by the loss of changing facilities. It is poorly lit and needs levelling and better drainage, so that it is of a good standard to play on and safe. Not surprisingly, because of that, the playing fields are used at the moment on a much reduced basis, but there are still users. Local schools make regular use of the area and have done so for a number of years, as my hon. Friend has said.

When we met last time, I was able to explain to my hon. Friend that, because the site had been used in that way, the land had a designation as school playing fields, affording it a level of protection from disposal. He will recall that school playing fields are protected from unjustified disposal by section 77 of the School Standards and Framework Act 1998. The consent of the Secretary of State is required for any disposal or change of use of school playing field land. The application to dispose to a consortium would have been considered by the School Playing Fields Advisory Panel. However, the new free school proposal, if it goes forward, would not be considered by the advisory panel, because in effect we would be changing the use of playing field land for educational purposes by placing school buildings on part of it, rather than disposing of it altogether. As I understand it, the current proposal is essentially that the whole site would potentially be put in the hands of the Avanti Schools trust. I can also say to him that, in relation to one of the questions he asked at the end of his speech, we are not currently aware of any other applications being submitted for change of use of the site.

Sites such as Whitchurch playing fields are to be valued, cherished and made the most of. Increasing the use of scarce resources must be a priority. Therefore all school facilities should be community facilities, used out of hours by the wider community, too. This is a very significantly sized site, as my hon. Friend will know better than anyone. It is 10.5 hectares, which is possibly easier to visualise if described as 400 tennis courts or 14 football pitches. That gives plenty of scope for any school site—for the redevelopment of buildings on the site and for the ongoing use of land for sports, both for the school and for other schools in the area.

Should the site prove suitable, discussions will be progressed with the local authority, and consultation with the local community will take place. Thanks to the safeguards that we put in place in the Academies Act 2010, academy trusts must consult on the free school proposal and the Secretary of State must consider the impact that the proposal will have on schools and other institutions. All that is of course without considering the statutory consultation that would be required in relation to planning for such a project.

In relation to one of the other questions asked by my hon. Friend, we are acutely aware that a number of other schools, as he said very clearly, have been using these playing fields for sporting purposes over the years. We would want to ensure that that use continued in the future and that those protections and that availability was there for academy schools as well as the maintained schools in the area.

I am pleased that the desire to set up free schools across the country continues apace and that many more young people will have increased opportunities for high-quality education. However, we are also very aware of the challenge of finding sites for development. That is a challenge right across London and across many key parts of the country where we have basic need pressures. Those difficulties have been particularly evident in Harrow.

I again thank my hon. Friend for his tireless work helping with the site search for Avanti House school, and I congratulate and thank the local authority for its very proactive support in searching for a site. I am also grateful to him for raising the concerns of the other local schools and for making clear how much they value the use of Whitchurch playing fields. If this site does prove viable for Avanti House, that will continue to be the case in the future.

[Mr Gary Streeter (in the Chair)]

Order. Both protagonists for the next debate are with us. We are a few minutes early, which is fine. We will move on to the next debate.

Bost Project (Afghanistan)

Tuesday 18th March 2014 Westminster Hall

16:27

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I am grateful for the opportunity to raise my concerns regarding the Bost agri-park and airfield project. I would not normally seek an Adjournment debate on such an issue, but since January 2013 I have been seeking answers through parliamentary questions on the role of the Department for International Development in this project: how much it cost the taxpayer, what went wrong and what lessons have been learned. I feel as if I have hit a brick wall and have had to prise out any information that I have received from the Secretary of State and her officials. That culminated in a question to the Secretary of State on the Floor of the House on 5 March this year, when she told me that this project was all the fault of the previous Administration and that the biggest waste of money was the £5,000 that she claims it has cost to answer my parliamentary questions. If it really costs in excess of £140 to cut and paste previous answers, perhaps the biggest efficiency saving in DFID might come from the Secretary of State and her Ministers reviewing their approach to answering questions from Members of this House. That is simply not good enough, so today I want to probe whether the public are being kept in the dark over this scheme, and how exactly their money was used. I hope that the Minister will be more forthcoming than others in the Department have been to date.

In January 2013, I discovered that the project was abandoned after a considerable amount of expenditure from DFID, but that a consultant’s report—the Coffey report—had been prepared on the project in July 2010. I asked whether the report was available, which Minister had received it and which Minister had authorised the project. I was told that it was not available and that it had been received not by the Minister but by an official, because at the time officials had the delegated authority to approve expenditure of up to £40 million. The Secretary of State told me that it had been received by DFID’s senior representative in the Helmand provincial reconstruction team and that a DFID deputy director had authorised the project.

Since the Secretary of State would not let me see the Coffey report, I made a freedom of information request to see a report that had been prepared by the Mott MacDonald consultancy firm. I was told that the information was being withheld because individuals have the right to the protection of their personal information, although I am not sure what personal information there could be in a report that is essentially an impact assessment of the project’s viability. It is not right to disguise the key decision makers from public view. I was also told that the public authority has the right to refuse to disclose information containing unfinished material. However, by the time I submitted the FOI request, DFID had already closed down the project.

I reverted to asking parliamentary questions. I asked whether DFID had considered any independent or external reports on the viability of the project, and if it had, whether they might be placed in the Library. By that time, I was aware of the earlier involvement of USAID, and that there were at least three reports querying the viability of the project. I asked whether there had been discussions with US counterparts on the project prior to DFID’s taking it over, and whether the minutes of those discussions were available. The Secretary of State confirmed that DFID worked closely with USAID on a range of projects, including Bost, but refused to make the details available.

To satisfy myself that aid money had not simply been squandered, on 11 September 2013 I asked how much money in total had been spent on the project and what the original budget was. The reply was that in 2009 a total of £8.42 million had been spent on the project and that the money had come partly through the Helmand growth fund and partly through other budgets for which DFID was responsible. There was no reply about the size of the overall budget, but I was told that in 2010 Ministers reached the conclusion that the programme did not represent value for money for the taxpayer, and it was discontinued. The Secretary of State confirmed that £200,000 had been spent on improving local capacity and training costs, including sending Afghan nationals to training workshops in Dubai.

Another cost was the need for fluent Pashto speakers, and I was naturally curious to know how many were employed and at what cost. In a typically helpful answer, the Secretary of State told me that DFID Afghanistan employs local staff and fluent Pashto speakers on all projects as appropriate. I mention that because the Coffey International consultancy group’s 2010 report for DFID specifically recommended hiring a fluent Pashto speaker to negotiate with locals on the issue of leaseholding, which it saw as a major problem with the main economic proposals in the plan.

Given that I knew that Ministers had closed the project after assessing that it would not provide value for money, I asked which Minister had overall responsibility and therefore presumably had made the decision. The Secretary of State replied that the programme had not been approved by a Minister, but that she had personally decided to pull the plug after her visit to Afghanistan in December 2012—two years after the date on which she previously claimed DFID had ended the project.

I thought it might be helpful to try another FOI request, so I asked to see the economic appraisal of the project produced by the Upper Quartile consultancy firm, dated 2010. I was told that DFID did indeed hold information relevant to my request but that it was being withheld on the grounds that it was unfinished material. That was February 2014—at least two or four years after DFID halted the project, depending on which parliamentary answer one relies on.

Although I could not establish exactly when the project ended, what advice Ministers relied on when they made the decision or how much had been spent, I thought it might be worth while trying to work out how much other agencies had contributed, so I asked who had paid for the road-building programme. Helpful as ever, the Secretary of State told me that it had been funded by both the US and the UK. It has been suggested that several million pounds was spent on roads and access to the park. That appears to have involved laying roads, digging them up and relaying them. A journalist was told by locals that many of the roads had been dug and relaid so many times that they could not accommodate the transport used by the local people and that some of the access areas were too small to allow vehicles on to the site.

It seemed obvious that the Department was being less than helpful. I was not asking about national security, issues affecting the safety of our troops or negotiations with the Taliban, but a project on which a considerable amount of British taxpayers’ money was spent by our aid Department. It appears the project was originally intended to assist local traders and businessmen in the Lashkar Gar region, perhaps to divert them from growing poppies. It was envisaged that they could be encouraged to grow crops and develop other products on a safe site with a reliable source of energy and easy access, and then transport their produce to other parts of Afghanistan from the airfield—hardly earth-shattering stuff. But not enough homework was done and not enough attention was paid to concerns before lots of our taxpayers’ money was spent. Apparently, virtually no work was done to identify potential numbers of interested parties who might lease or buy plots of land on the agri-park, a key feature of the plan. As it turned out, people in the region had little knowledge of the concept of leasehold and were hostile to the idea.

I know from the report prepared by the Coffey consultancy group that DFID was told:

“The Bost Park represents a high risk investment that has a high risk of financial failure.”

When I asked about the return on the investment, I was told that the completion of phase 1 enabled three commercial flights per week to Bost airfield, connecting Helmand to the rest of the country and cutting journey times between Kabul and Helmand from two days to a one-and-a-half-hour flight. Naturally, I wondered whether there was evidence that local businesses were using the flights, but when I asked about that, the Secretary of State replied once more that the project had been approved by an official in 2009 who approved projects of less than £40 million, and that she had discontinued it in 2012. I also found out something new: having ended DFID’s involvement, she had handed the completed park designs over to the Afghan authorities.

I also discovered that the first commercial flight to Bost airfield was actually in June 2009, but that although the Department did not hold any information on businesses using such flights, it could confirm that the airfield was not used for any air freight. The Coffey report stated that the consultants were sceptical that local businesses would use the airfield because of the high cost of air freight and the low return local farmers would receive for produce such as flour and maize.

The Secretary of State’s first answer on finance told me that in 2009 a total of £8.42 million was spent on the project. She said in a subsequent answer that £8.8 million was spent prior to 2010, and in a further answer in November 2013 that £4.56 million had been spent between 2009 and 2013. That seems slightly curious if DFID involvement ended in 2010, or even 2012. It appears that, at the very least, £12.76 million has been spent by faceless bureaucrats on a scheme that did not succeed in stimulating local business, leasing or selling plots of land on the agri-park, or transporting goods via flights from the airfield. The Coffey report suggests that there are many additional costs—including salaries, land acquisition, environmental facilities, waste disposal and training—that are not part of the original estimates.

We know that there are a lot of corrupt officials in Afghanistan. The Secretary of State has shown her irritation at being asked to explain the events I have outlined. We are now on the third Secretary of State since the issue started, and I am extremely irritated that the Secretary of State claims to have wasted £5,000 on bland, repetitive, cut-and-paste, often non-answers that seek to obscure rather than reveal the truth about the project.

I am a supporter of aid, but my constituents and I have a right to know what our money is being spent on. There is a funny smell about the Bost agricultural park and airfield project, and nothing that the Secretary of State has done so far has helped to clear it up.

16:44

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Streeter. I am glad to attend this debate and discuss DFID’s involvement in the Bost airfield and agricultural business park project.

I will repeat some of the information that the hon. Member for Birmingham, Selly Oak (Steve McCabe) has already been given and is dissatisfied with, but I hope that the timeline I give him will help to explain why and when decisions were made. He knows that the Bost airfield and agricultural business park project was approved in 2009, under the previous Government, and that Ministers did not authorise the project. At that time, Ministers had delegated authority for routine project spending to officials, up to a maximum value of £40 million. However, approval for the project followed a commitment in March 2009 by the then Secretary of State for International Development to provide £32 million for infrastructure in Helmand over the following four years.

The hon. Gentleman will be aware that DFID was present in Helmand as part of the British-led provincial reconstruction team in Lashkar Gah, the joint civilian-military team working to support the local Afghan government to bring governance and development to the province, alongside the security delivered by NATO and Afghan troops. I am sure the hon. Gentleman would agree that a simple military solution is never the answer; there will always be political considerations, and development and jobs are also required.

The Bost airfield and agricultural business park was approved as part of the provincial reconstruction team’s development plan for Helmand. Both major components of the project—the business park and the airfield—were designed to bolster Helmand’s economy by supporting local businesses and providing secure facilities. Helmand is not the easiest environment in which to work, and the situation was extremely fragile when the project was being planned. The provision of secure facilities was designed to allow local businesses to operate and to increase access to markets and commercial opportunities, which in turn would provide much needed jobs and economic growth for the province.

DFID also agreed to improve infrastructure and provide essential facilities at Bost airfield to connect Helmand businesses to the wider Afghan economy. That included building a fire station, a police station and five security towers, to make the airfield secure and fully operational, as well as an access road and car park. DFID officials met with local businesses to discuss the business park in 2009, in advance of the project being approved. That included regular consultation with the Helmand Business Association—now the Helmand National Investors Association—which represents local businesses. The group confirmed local demand for facilities of the kind planned.

DFID’s financial analysis showed that UK funding would result in a positive return for our investment—at that point. DFID therefore agreed to fund the Bost project in partnership with the Afghanistan Investment Support Agency, which agreed to take on a range of commitments, including finding a regular power supplier, land ownership issues—as the hon. Gentleman has mentioned—and environmental clearance for the park.

In 2011, following some delays in project implementation by our Afghan partners, DFID’s new financial analysis showed a potential negative rate of return on the agricultural business park. DFID’s team in Afghanistan took action based on that evidence. The project was redesigned, separating the business park and the airfield to ensure that progress on the airfield would not be hampered by the problems and setbacks with the business park. It was also agreed that the business park project would be taken forward in phases, meaning that funding could be withdrawn if it became clear that further investment would not be sustainable.

In 2012, DFID—

[Steve McCabe]

Will the Minister give way?

[Lynne Featherstone]

I will, although I might lose my thread.

[Steve McCabe]

My question is very simple. The Minister said earlier that she could give a ballpark figure of £32 million for the project. Can she tell us how much has been spent on the various phases, reshuffles and re-designations? How much British taxpayers’ money has been spent overall?

[Lynne Featherstone]

As I go through, I will set out the sums involved, but the critical point is what sum was not spent because of the non-continuation of the business park, which cost £3.1 million. As the hon. Gentleman rightly said, the plans were then handed over to the Afghan authorities so that the work would not be wasted and the whole thing could be rescheduled. That was not achievable within the original conception, which is why the plan was cancelled. Rather than waste a further £6 million, the Secretary of State decided to stop the project at that point, hand over the plans and let the project continue at a pace that would be more achievable by the Afghan authorities, without involving the British Government or the British taxpayer in further expense.

In 2012, DFID gave our in-country partners a fixed deadline to deliver the commitments that they had previously agreed in relation to the business park. Towards the end of 2012, it became apparent that our Afghan partners would not meet those commitments; they simply were not forthcoming. It was clear, therefore, that the business park could not be completed within the original time frame and that further UK investment in the work would be poor value for money.

On the £32 million, I want to clarify that it was not £32 million for Bost; £32 million was the total commitment to infrastructure in Helmand. Project approval followed the commitment by the then International Development Secretary.

Towards the end of 2012, as I said, it became apparent that the commitments would not be delivered, the business park would not be completed in time and more UK money would be at risk if we pursued it further. The Secretary of State agreed to cancel further investment in the business park in January 2013, to prevent any further waste of taxpayers’ money. However, the completed park designs were handed over to the Afghan authorities to enable them to pursue the project over a revised time frame. Personally, my view is that that was a sensible way to deal with an unfortunate situation, while saying that the project was still a good idea. However, it had to be deliverable in time and on budget, and that is now up to the Afghan authorities.

On the monitoring of projects, Afghanistan is an inherently risky country, as I am sure the hon. Gentleman understands. Development projects, particularly those in insecure and conflict-ridden areas such as Helmand, will always include an element of risk. He might have got hold of a copy of the report to which he referred—as he quoted from it, I think that my assumption is probably correct. As I understand it, the report was unfinished and high-risk, as one would expect for Helmand. That is acknowledged explicitly in the Government’s building stability overseas strategy, which endorses

“taking risks…in order to secure transformational results”.

As a DFID Minister, I am always saying to DFID officials, “I want to know as much as I can about a risk, but I don’t want you not to suggest taking risks if we are to get transformational results.”

[Steve McCabe]

I accept that there is an element of risk, certainly for the money, but now that DFID’s involvement in the project has finished, what is the purpose of keeping all the reports hidden from Members of this House? Would it not be better for us to understand the thinking and the decision-making processes? What is the Minister protecting now?

[Lynne Featherstone]

I am not protecting anything. It is not our practice to publish either unfinished reports or internal reports. I am sure that the hon. Gentleman understands that what is most appropriate is to have checks in place to monitor projects and ensure that they are proceeding as planned. That is what we do with UK taxpayers’ money: we put in milestones so we can check that we are not going off-track. We must ensure that things proceed as planned and take action when that is not the case.

In that respect, the Bost project is a good example of DFID acting on the basis of changing circumstances in Afghanistan. If we saw a project that was beginning to fail, and did not stop it, we would be criticised for not terminating it even though it was not going to provide the return that we expected.

Work continued on the successful upgrades to Bost airfield and was completed in November 2013. There are now two return flights each week from Kabul to Bost, as the hon. Gentleman said, cutting the journey time from two days to one and a half hours.

In recent weeks, the hon. Gentleman has asked a lot of questions. Consequently, I have asked a lot of questions about why he has been asking a lot of questions. As I was responding to this debate, I wanted to understand the basis of the issue. Nothing has been covered up; it was simply that the project was not achievable on the proposed timeline, and the partners involved were not delivering. By separating out the two projects, we ensured that the good part of the project could be finished. He has said that it is a cover-up, but I reject that. There is no cover-up—simply a project, or half a project, that was not going to deliver.

As the hon. Gentleman knows, most of the answers have been set out in departmental responses to his questions. [Interruption.] I am answering one of the questions that he asked. When we responded to his questions in October 2013, a total of £8.42 million had been spent on the Bost airfield and agricultural business park programme, of which, as I said, £3.1 million had been invested in the business park side of the project. The business park was not completed because commitments given by DFID by Afghan partners were not fulfilled. I am sure that he would want us to have Afghan partners. Part of the work that we do on development is growing local business and local capacity.

It was not possible to complete the business park as planned or in a way that would provide value for money for UK taxpayers. As I have said, that part of the programme was cancelled once that became clear. DFID Ministers have taken steps to increase their oversight of programmes approved by the Department—to be frank, we are always doing that. Under the previous Government, Ministers did not approve anything under £40 million. I know, because I now have to go through all the business cases under £40 million with a fine-toothed comb, that Ministers now approve all spending on projects over £5 million.

In conclusion, we have been clear about how much money was spent on the project; how the decision was arrived at; why the decision was made to cancel further funding; the role of Ministers and officials in making those decisions; and what has happened subsequently. That has all been set out in parliamentary answers. I am sorry that the hon. Gentleman thinks that something remains unrevealed after all that I have said. As far as I am aware, we have been completely open and honest about all our decisions and the money that was spent. I hope that he finds those answers sufficient.

Question put and agreed to.

16:58

Sitting adjourned.