Academies Bill [HL]

Baroness Morgan of Drefelin Excerpts

Wednesday 7th July 2010 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, it is very encouraging to see my noble friend the Minister bring forward his Amendment 30, but I join others in hoping that he may bring forward an amended version of it at the final stage of the Bill. None of these amendments, except Amendment 26—that may be inadvertent—takes account of new academies: the so-called free academy schools. All these amendments speak of the conversion of existing schools into academies.

[Baroness Morgan of Drefelin]

As I understand it, throughout the passage of the Bill, there has been no such thing as a free school; free schools are academies. I am sure that will help the noble Lord.

[Lord Phillips of Sudbury]

I am grateful for the intervention but I am not sure that it does. I was merely repeating the parlance used by the Government when they talk of academy schools that are not conversions as free schools. I am merely making the point that every one of these amendments is drafted on the basis of an existing maintained school converting to an academy: except Amendment 26, which would cover new free academies, as they are called, as well as existing secondary schools. It is blazingly obvious that our consultation provisions must apply to these new academies. In fact, the need for consultation where a brand new academy springs up in an area is even more acute than when an existing school converts into an academy. I hope that the Minister will say in response to this mini debate that he will bring forward an amendment at Third Reading that includes the new academies.

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[Baroness Morgan of Drefelin]

My Lords, I am grateful to the noble Lord for moving what I am sure are technical amendments. It would be helpful if he could explain whether these amendments apply equally to independent schools and to schools transferring from the maintained sector to become academies. If land is donated to a free school, a new academy, how will these provisions apply in those circumstances?

[Lord Hill of Oareford]

My Lords, I believe that they apply across the board. Should I need to be precise in some of those details, it might be best if I follow that up subsequently. I believe that because this will be in the general provisions of the Bill, it will apply equally to all academies.

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[Lord Phillips of Sudbury]

My Lords, I shall speak to Amendments 40A and 40B and build to some extent on what the noble Lord has just said. As a long in the tooth charity lawyer, I have come to believe that the law of charity is best regulated by the Charity Commission. It may not be a perfect regulatory animal but it is, by a measure that you cannot count, more experienced in regulating charities than any of the other principal regulators. It is worth adding that charity law is one of the most difficult branches of law, as it is both a combination of common law and statute law and calls for more judgment in its application than perhaps any other branch of law. It is not textbook law.

I have heard what my noble friend the Minister has said on past occasions and I am content, despite misgivings, to go along with Clause 8, but only on condition that, if the principal regulator proves inadequate to the difficult task of regulating not only the large number of academies to come but the 200-plus academies that already exist, the Charity Commission should then be able to intervene and exercise powers.

For noble Lords who are not aware of it, I should say that the Attorney-General has jurisdiction with regard to all charities. The Minister might say that that should be enough, but the Attorney-General will not intervene other than in quite exceptional circumstances and, frankly, he is not supposed to be an alias principal regulator. The problem is that the powers in Sections 8 and 18 of the Charities Act 1993 were given to the Charity Commission to ensure that charities are charitable—and there is no more precious name or reputation in this country, I suggest, than that of charity—and can be exercised only by the Charity Commission. They cannot be exercised by a principal regulator unless that regulator asks the Charity Commission to exercise those powers on its behalf.

My Amendment 40B says that when the Charity Commission has concerns over the regulation of a principal regulator and what it is doing, or more likely not doing—in this case it will deal with the Young People's Learning Agency, because my noble friend has indicated that that is to be the regulator of academy schools—the commission will consult the principal regulator, the YPLA. If, having consulted the YPLA, it remains unhappy at what the YPLA proposes to do or not to do, having given notice to the YPLA it can institute an inquiry under Section 8 of the 1993 Act that will lead to the much wider powers that it will have under Section 18 of that Act. This is a power, a provision, that I would not expect to be exercised at all, but it is well worth having in the Bill because it may prove to be just the sort of spur that may be needed—I hope it will not—in order for the YPLA to do the job properly. That longstop—the prospect of being exposed to public ridicule and contempt by the Charity Commission having to intervene under the provisions of this subsection—would ensure, as far as anything could, that the YPLA did the job properly.

Before finishing, I would like to say a word about the YPLA. It has been in existence for just three months. Noble Lords may wonder, as I do, whether such a new organisation can possibly be in a position almost immediately—we are talking about the autumn—to undertake this huge and difficult regulatory role. People capable of exercising these powers in a knowledgeable and practical way are few and far between, and it will not be easy to put in place the team necessary to do this job properly. It must be done properly because these academy schools are hugely important in public interest terms. I am anxious that it will not be possible for them to assemble the necessary expertise to do that job, which makes my amendment all the more important.

I am also concerned, to be honest, about the potential conflict of interest that the YPLA will have. Its principal responsibilities, as made clear by the former Minister, Ed Balls, are, first, to support local authorities in commissioning suitable education and training for 16 to 19 year-olds; secondly, to fund academies; and, thirdly, to provide financial support to young learners— none of which is anything to do with the difficult regulatory function that is to be cast upon it under the Bill. I am sorry to have had to explain all that at length, but it is not easy to get across the background to and the need for this amendment.

Finally, and much more simply, my Amendment 40A adds to Clause 8 the charitable incorporated organisation alongside companies limited by guarantee as the alternative vehicle for an academy school. This charitable incorporated organisation was brought into existence by the Charities Act 2006. It is a specially tailor-made corporate animal for charities and is therefore infinitely simpler than the company limited by guarantee, which is subject to the vast forest of company law. I have no doubt that when the regulations come into effect, which will in effect give birth to these charitable incorporated organisations, all the academy schools will want to convert into that new charitable corporate vehicle. It would be remiss if we were not to include that now alongside companies limited by guarantee. I hope that both these amendments will appeal to your Lordships and indeed to my noble friend the Minister.

[Baroness Morgan of Drefelin]

My Lords, I have listened to the debate on Report with even more concern than I did in Committee. I was hoping that, following meetings between noble Lords and the Minister, there would be more on offer to meet the concerns raised by the noble Lords opposite.

When thinking about this group of amendments, I had similar concerns to those of the noble Lords, Lord Hodgson and Lord Phillips. I was particularly concerned about the role of the YPLA as a regulator when there are conflicts of interest and about the YPLA’s capacity to deal with this. Will the Minister tell us how many staff with charity law experience the association has in place who are ready for this retrospective legislation that will put it in charge of regulating the academies that are currently charities, if that is what is going to happen? I am very concerned about Clause 8.

This reminds me of a storyline from “Yes Minister”. When a new Government come in, officials dust down an old policy that they were not able to convince the previous Government to pursue and suddenly it finds its way into legislation. That is what appears to have happened here. When we were in government, this proposal was put to us. We listened to the concerns voiced by many and to arguments similar to those put by the noble Lord, Lord Hodgson, and we did not pursue this approach.

In Committee, the noble Lord, Lord Phillips, described the clause as “a dog’s dinner” and made clear his view that the regulator should be mentioned in the Bill. The noble Lord, Lord Hodgson, made the important point that the Bill would damage the “delicate balance” between,

“the many strongly held views about the charitable sector”.—[Official Report, 28/6/10; col. 1632.]

He said that this would particularly be the case in the area of education, which has been highly controversial.

The Government should tread carefully in this area. I offer the Minister some advice: it would be sensible to listen to the advice that he is being given at this Report stage and to think further about how the issue can be managed in the Bill. I do not think that it would be a good thing to go forward with this clause, as it would unsettle the settlement achieved in the Charities Act 2006, which was a well deliberated piece of legislation about a hugely controversial area. I hope that the Minister will think further about this.

[Lord Hill of Oareford]

My Lords, as usual this has been an interesting debate. My noble friend Lord Hodgson has set out important points of principle, which, as he said, we have had the chance to debate outside the Chamber—I am grateful to him for taking the time to do so.

I start by setting out the purpose of Clause 8(1), which is to put beyond doubt that academies are charities. Because it is proposed that academies will be exempt charities, they will not in the future be registered with the Charity Commission. It follows from that that they will not receive a charity registration number from the Charity Commission or the Charity Commission’s confirmation of charitable status that comes with being registered. Therefore, we think it important statutorily to confirm academies’ status as charities in this clause.

My noble friend Lord Hodgson has spoken powerfully and from a position of principle. I know how much work he and other noble Lords did on the Charities Act 2006 and, when I heard him arguing his case in Committee and when we met, I found what he said very much worth listening to. He touched previously on his concern that deeming academy trusts to be charities would set a precedent and he set out the response that he was given about that. I reiterate our view that there is a precedent. Our proposal to deem academy proprietors as charities will replicate the current legal position as it applies for a variety of other educational bodies whose status as charities is declared by statute. A range of educational bodies are deemed charities and are made exempt charities. Further education colleges and higher education colleges are deemed charities and are made exempt charities not regulated by the Charity Commission. The governing bodies of foundation and voluntary schools are deemed as charities; they are shortly to become exempt charities as well, following discussion and agreement between Ministers at the Cabinet Office and the department. It seems to me that it is not completely inappropriate for academies to be treated consistently with these other schools and educational bodies and for them to be deemed as charities under Clause 8(1) and made exempt under Clause 8(4).

My noble friend Lord Hodgson reiterated tonight the point that he made in Committee: he has no doubt that academies would be able to pass the public benefit test established by the Charities Act 2006. Given that, it would be appropriate to treat academies in the same way as these other educational institutions. The model articles of association for academy trusts provide that the objective of the academy trust is to advance education for the public benefit. It is only academy trusts which have exclusively charitable objectives that would be deemed charities. The provision of education to pupils without charge is in the public benefit. Therefore, their charitable status should be confirmed.

If Clause 8(4) is enacted, a principal regulator would need to be appointed to oversee academies’ compliance with charity law. The Minister for the Cabinet Office, as noble Lords know, has agreed in principle to appoint the Young People’s Learning Agency as principal regulator. I know that some reservations have been expressed about that. It will clearly need to recruit people to perform that role in just the same way as the Charity Commission would have to. It has made clear that it does not necessarily have the staff to perform this responsibility. As the government body with day-to-day responsibility for managing the performance of open academies, the YPLA could be an appropriate body to carry out this role, since it means that it would be managing academies as a whole. The YPLA and the Charity Commission would agree a memorandum of understanding about the principal regulator role to ensure that academy trusts remain fully compliant with charity law. On the matter of maintaining accountability and transparency, funding agreements or grant arrangements would place an obligation on academy trusts to publish their governing documents, reports, accounts and the names of their trustees.

Amendment 40A, spoken to by my noble friend Lord Phillips, would allow charitable incorporated organisations to enter into academy arrangements. If that is my noble friend’s intention, I am pleased to tell him that the Bill as drafted would allow that to take place. Clause 1(1) allows the Secretary of State to enter into academy arrangements “with any person”. I am advised that it is thus already possible for the Secretary of State to enter into academy arrangements with a charitable incorporated organisation, but it is not necessary for it to be deemed a charity or exempted to enter into such an arrangement. I know my noble friend’s expertise in this area and that he will want to reflect on this point. I will be happy to arrange to confirm that understanding with him.

Amendment 40B would give the Charity Commission the power to institute an inquiry if it considered that an academy trust was not complying with its charity law obligations. We would certainly accept and agree with my noble friend that the principal regulator should seek advice from the Charity Commission where necessary. We expect the YPLA to work closely with the Charity Commission, but are not currently convinced that the commission should be able to override the principal regulator. The Charity Commission has the power to conduct inquiries in relation to exempt charities under Section 8 of the Charities Act 1993, where the principal regulator requests this.

This next point may go some way to meeting my noble friend’s point about the backstop but, again, I am happy to discuss it with him. If the Secretary of State was satisfied that the YPLA was unreasonably refusing to invite the Charity Commission to carry out an inquiry in relation to an academy—I assume that is a conversation that he could have with the Charity Commission, or it with him—he has the power to direct the YPLA to make such a request to the Charity Commission, so that it could carry out that inquiry. I hope that provides a modicum of reassurance to my noble friend, but I am happy to discuss that further.

Overall, it is a clear principle of the academies programme that academy trusts should be charities. Clause 8 will make the process of establishing an academy easier by removing the need for each one to apply to the Charity Commission to be registered as a charity. It will simplify the regulation process. I hope that on some of these points I have provided reassurance that academies’ compliance with charity law, and public accountability and transparency, will be fully maintained.

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[Lord Whitty]

My Lords, it is a bit of a forlorn hope that I can capture the Chamber’s attention at this time of night for a group of people who have not been mentioned at any other point during today, although they were mentioned at an earlier stage by the noble Baroness, Lady Sharp. I am very much on the same wavelength as her.

Among the groups that my amendment on consultation would cover are the teaching staff in general and teaching support staff in particular. This has been an area of expansion of employment in schools—in old jobs such as school secretaries and wider management roles, and in new jobs such as classroom assistants, paraprofessionals and other specialists. Because they are a relatively recent phenomenon, the terms and conditions under which such staff are employed are variable and are not on the same basis as other groups of staff within schools and local authorities.

Local authorities of all political persuasions, the LGA and the unions got together over the past three years to establish the support staff negotiating body and establish a national framework for the terms and conditions of such staff. This has proved beneficial to the management of schools which previously had found difficulty in having to manage individuals under separate terms. In some cases, there were serious conflicts.

This is not just a trade union point; it is a point about how smoothly schools can be managed and how we can avoid conflict in those schools. The problem of when academies are created under the Bill is that without consultation and the normal processes, public servants will be transferred into what will, in effect, be the private sector in terms of the employers they have to deal with. There would be an element of stability in that process if academies were to remain in the support staff framework. It is true that existing academies do not have to be in that framework, although they can opt to be, but it would be helpful to the management of schools which will face all sorts of more complex matters of self-management, once they become academies, if they were to remain or be assumed to remain within that structure.

When the noble Baroness, Lady Sharp, raised this at an earlier stage, she was told by the Minister that it was not deemed appropriate since the market would determine the rates—that would be the situation with teachers and what was good for teachers must be good for all other staff. Actually, it is the opposite situation. Academies will compete for teaching staff who are specialists or good teachers or teachers in subjects where teachers are scarce and thereby improve their conditions above the norm. In the area of support staff, what is likely to happen is that they will undermine what has previously been the rate in the continuing maintained schools in the local authority area, and will provide pay and conditions that are worse than they were prior to conversion to academy status. That will cause unnecessary conflicts between the management of the schools, the staff and in most cases their unions.

This amendment would provide an element of stability. I hope that the Minister will consider the implications as we go forward with the Bill. I beg to move.

[Baroness Morgan of Drefelin]

My Lords, I am delighted to support my noble friend's amendment. It may be late, but the contribution that support staff make to our country’s schools is worthy of significant attention. In Committee, I and the noble Baroness, Lady Sharp, reminded noble Lords of the important role of support staff, and I am delighted to support my noble friend's analysis of the challenges that they face with a major expansion of the academies programme. This amendment provides a framework that is markedly different from the national negotiating body that the Minister referred to in Committee. When one looks at the contribution that the 123,000 new classroom assistants have made across the school system, it is important that we take all possible steps to maintain stability in the workforce. A framework such as this would contribute to that. In the past, as the noble Baroness, Lady Sharp, eloquently said, support staff have been undervalued, and we should put in the work to create a new school support staff negotiating body. A lot of work and thought has gone into defining the roles and contribution that the staff make, and this could be a great support, particularly to small academies such as the primary academies that some noble Lords have been concerned to promote. I hope that the Minister will support this approach.

[Lord Wallace of Saltaire]

My Lords, I hope that the noble Lord, Lord Whitty, will forgive me if at this late stage I do not read out the whole of the 15-page brief that I have been given in reply. We are all conscious of the importance of support staff. From the anecdotal evidence that I have picked up both in Yorkshire and London, many classroom assistants and support staff working in maintained schools are working for remarkably low pay on part-time contracts that do not include lunch. Therefore, this is not simply a question about the transfer to academies: there is a broader question of how we all value the very useful contribution that they make. Having said that, and underlined the fact that it is not just a question of the conditions of support staff in schools that convert to academies, but that the problem exists across the board, I also emphasise that academies are intended to have freedoms over staff pay and conditions. That is precisely the point of freeing academies from the deeply complex, embedded structures of maintained schools across the country. Freedom in relation to pay and conditions has been a core freedom since the academies programme started under the previous Government, and indeed that was part of the reason why the previous Government set it up. It enables academies to establish pay and conditions which reflect their approach to the school day and to attract and appropriately reward innovative school leaders and practitioners.

As academies recruit good support staff, I urge them to value them as well, and perhaps to value them more than some maintained schools under local authority control do at present. Having said that, at this early hour, as it has just become, I urge the noble Lord to withdraw his amendment.