Academies Bill [HL]

Baroness Sharp of Guildford Excerpts

Tuesday 6th July 2010 Lords Chamber

Moved by

[Baroness Sharp of Guildford]

2: Clause 1, page 1, line 8, at beginning insert “Subject to section 4(4) for a former maintained school,”

[Baroness Sharp of Guildford]

I shall speak also to Amendments 12A, 19, 19A and 28A. The purpose of this group of amendments is to probe a little further the proposed financial arrangements in the setting up of academies. Amendment 2 has unfortunately been placed on the wrong line. It should have been on line 7 and would, therefore, have amended Clause 1(2)(b) to read:

“Subject to section 4(4) for a former maintained school, arrangements for Academy financial assistance”.

We are talking about the financial assistance route as distinct from the agreement route for former maintained schools. This amendment is linked with Amendment 28A, which puts the amendment in its proper place and becomes subsection (4) of Clause 4. It requires that where the Secretary of State makes a grant of financial assistance under Section 14 of the Education Act 2002,

“he must … secure the agreement of the governing body to the terms of the financial assistance”,

before the school can go ahead and convert into an academy.

The purpose of these two amendments is to ensure that all those responsible for the school are fully aware of the terms under which financial assistance is given. When we discussed this issue with the Minister in Committee, he made it clear that for existing schools, as distinct from new schools, the financial assistance route would be the exception rather than the norm. The financial agreement route requires the full co-operation of the governing board, which is kept informed all the time because it is party to the agreement. With the financial assistance route, Section 14 of the 2002 Act gives the Secretary of State considerable powers to decide unilaterally how much finance to give and to set the terms under which that finance is given. This amendment ensures that the governing board is aware of the terms that are being asked for by the Secretary of State before the terms of the grant are agreed. We think it only right that, just as with academy agreements, where the governing board is kept fully informed, when a school goes down the financial assistance route—the grant route—the school’s governing board should be kept in the picture and be informed about what is happening.

Amendments 19, 19A and 20 relate to numbers and needs. They elucidate the terms of financial agreements and financial assistance. The Minister made it clear that that part of the school’s budget that is retained by the local authority—funding for special educational needs and transport—will remain with the local authority. This is often the larger part of the moneys kept by local authorities. The remainder goes on such things as payroll and property management and general support services. However, included among general support services are important services; for example, educational psychologists and language and behaviour specialists. They provide valuable support, especially to smaller primary schools, particularly where special educational needs funding comes from the school for school action and school action plus. If the resources that are left are distributed evenly between schools on a per capita basis according to the number of pupils, schools with a disproportionate number of pupils with learning difficulties of one sort of another and pupils with other disabilities will receive less funding than they do under the present arrangements.

There are worries in two directions. First, will academies with a disproportionate number of pupils, as well as the remaining maintained schools, receive enough funding in these situations? Secondly, many of the schools that are outstanding and are therefore being fast-tracked to academy status are often located in better-off areas and have a relatively low number of children from disadvantaged homes. Dividing local authority funds on a straight per-pupil basis would give them rather more funds than they have traditionally received and would leave a lesser amount in the kitty to be shared out among the SEN services of other schools.

The key amendment in the group is Amendment 20, which stipulates that the funding should follow needs, not numbers. It also raises five additional questions to which I would like the Minister to respond. Will the Young People’s Learning Agency, which is to distribute funds to the academies, distribute the dedicated schools grant in the way that the local authority would have distributed it to each school, or will it have a separate funding arrangement? How accurate is the ready reckoner on the DfE website? Does the money proposed for the removal from local authority expenditure replicate the costs of services that schools will lose from their local authority? What will be the effect on those local authority services, including services outside children’s services, if a significant proportion of schools become academies? Lastly, the pupil premium is not discussed in this Bill. We presume that it will come up in the next Bill, but will the Minister elucidate?

Finally, Amendment 12A is different and arguably should not have been in this group, but I will speak to it now. It is fairly straightforward and brings us back to an issue that we raised in Committee: monitoring the characteristics of an academy as listed in Clause 1(6). In Committee, we asked who was going to monitor how far academies actually adhered to the commitment that they had made to retain those characteristics. The Minister assured the House that the Young People’s Learning Agency would be responsible for monitoring academies’ activities. We have some reservations about this. The Young People’s Learning Agency is very new; it got off the ground only in April. It will be responsible for distributing money to these new academies, but it is understood that it is to be a very lean agency and will not have large numbers of people. Will it have the capacity or the capabilities to monitor the characteristics of an academy? Would it not be better, as we have suggested, for some independent agency, possibly the schools adjudicator or someone like that, to act as monitor on such an occasion and to keep an eye on whether the academies are living up to their promises? I beg to move.

[The Deputy Speaker (Lord Geddes)]

My Lords, to the best of my knowledge, the amendment proposed is on page 1, line 8.

--- Later in debate ---

[Lord Hill of Oareford]

We discussed this point in connection with the free schools announcement, which was raised in the first group of amendments. It also relates to the amendment tabled by my noble friend Lord Phillips and the desire of people to have some reassurance that the effect to which the noble Baroness refers will be taken into account by the Secretary of State. One of the purposes of the free school measures is to ensure that a new school which proves attractive to parents is able to take funds from a failing school to which parents do not want to send their children. The purpose of the reform is to introduce competition of that kind into the system.

Continuing compliance with the characteristics and all aspects of the funding agreement is monitored by the Young People’s Learning Agency. The Secretary of State has intervention and, ultimately, termination powers that can be used if an academy is not complying with the fundamental characteristics. I say in response to the question asked by my noble friend Lady Sharp that the YPLA has the capacity and capability to do that, but we shall certainly keep it under review.

My noble friend Lady Walmsley asked about the ready reckoner, picked up on also by the noble Lord, Lord Hunt. I understand that there have been issues with the ready reckoner. I shall write to my noble friend about the situation in York.

If anyone has concerns that an academy is not complying with its statutory characteristics or the terms of its academy arrangements, these can be brought to the attention of the YLPA or the Secretary of State, who will look into them and take such action as is appropriate.

I hope that I have provided some reassurance to the House generally and to my noble friends in particular on these matters relating to the funding arrangements. In the light of that, I ask them not to press their amendments.

[Baroness Sharp of Guildford]

I am grateful to the Minister for his response. I am glad that the governing boards will be kept informed about the financial assistance grants.

On needs versus numbers, I am still a little uncertain. If a free school is to be set up, it will have projections of how many pupils it will take but will not necessarily know how many it is going to enrol. How will the Government set its grant in the first place? Is the first year of grant taken from local authority funding when they do not know how the school is going to do?

Will the Minister copy to me the letter that he writes about the York ready reckoner? I am a little unhappy about that, because it seems to set expectations unduly high for a quite a lot of schools. The bulk of money kept back by local authorities goes to meet special educational needs and transport. When that is deducted, the sum likely to be distributed will not be very great. The ready reckoner is leading a number of schools to have quite inflated ideas as to how much they might receive. If the Minister is unable to respond to any of these issues now, perhaps he could write to me. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.