Academies Bill [HL]

Debate between Lord Adonis and Baroness Perry of Southwark

Wednesday 23rd June 2010 Lords Chamber

[Lord Adonis]

My Lords, I have two points about the funding of academies. I will speak particularly to Amendments 15 and 16, which were tabled by the noble Baroness, Lady Garden.

Reflecting on the experience of grant-maintained schools, the Minister will accept that the perception of unfair funding, as much as the debated reality of the funding position, did a huge amount to undermine the reputation of those schools in the wider education system. To be fair, they did a large amount to discredit the reform. If the extension of academy status more widely, which I support, is to carry public confidence and confidence in the education world, it is vital not only that the funding arrangements for schools transferring to academy status are fair but that they are seen to be fair. The only way they are likely to be seen to be fair is if there is an independent validation process of the overall financial scheme by which the academies are to be funded.

The amendments in the name of the noble Baroness, Lady Garden, are very interesting in that respect, in that she seeks to inject the National Audit Office into the validation of the arrangements for the funding of academies. I have considered very carefully her amendments. To require the National Audit Office to advise on each individual academy, given that we will be talking about a very large number, would be an extremely bureaucratic process that is not conducive to the public interest. However, it would be worth the Committee reflecting on—and the Minister giving us an initial reaction to considering further—whether the National Audit Office might play a role in validating the overall academy scheme in respect of funding. It could concern the principles of action by which the Government are allocating funds to academies, particularly when it comes to a number of the areas that the noble Baroness mentioned in respect of special educational needs funding, which, to be frank, will be contested by local authorities.

That view is given added force by the letter of 15 June 2010 which the noble Lord, Lord Hill, sent to Members of the Committee. He sets out in the annexe the arrangements for the allocation to academies of funding that otherwise, in respect of other schools, goes to local authorities for children with special educational needs. He states:

“Academies do receive a share of funding which is for: funding retained from the Schools Budget for centrally provided SEN support services; behaviour support services; licences and subscriptions …; therapies and other health related services; and education and welfare services”.

However, they currently,

“do not receive a share of local authorities funding in the following”—

very important—

“areas: educational psychology services; SEN administration, assessment and co-ordination; parent partnership services …; monitoring SEN provision; SEN transport”—

SEN transport is an extremely expensive item in local authority funding—

“support for inclusion between mainstream and special school; and pupil referral units, education out of schools and excluded pupils”.

Those also are very significant items of local authority spending, which have a huge impact on the budgets of individual schools.

It is not clear to me from the noble Lord’s letter what course the Government propose to take in respect of those important items of spending. Clearly, they will need to be considered case by case in some detail before a proper funding scheme can be put together in relation to the expanded number of academies that we are considering in this Bill.

The conclusion of that annexe has a wonderful sentence of the kind which I fear to say I signed off on so many times when I was a Minister, but to which the House should pay very great attention. It says:

“We want to work with local authorities on what these changes will mean for local authorities, and the important … role they have to play”.

Let us be clear—that means that we do not have the foggiest idea at the moment what the actual arrangements are that we are proposing, and a great deal of work will be needed before we will be in a position to give any detailed guidance on what that will mean. That further strengthens the case for having some independent process of assessment and reporting on the overall scheme for funding academies. Having the National Audit Office or some other independent body—although the National Audit Office is clearly eminently equipped for the work—giving independent validation to the overall scheme being used for academies, and advising Parliament that the scheme meets the commitments that the Government have given, that academies will be fairly funded in relation to other maintained schools, could be a very important element in ensuring that these arrangements command public confidence.

[Baroness Perry of Southwark]

My Lords, it is apparent that academies will have more money in their fist, so to speak, than community schools. As the noble Lord, Lord Adonis, has just made clear, an enormous amount of money can be withheld by the local authority, which will now come into the academies’ own purview for them to spend. The difficulty with having an outside agency to lay down frameworks or even to observe the frameworks is that there is enormous variety from one local authority to another in the amount that they hold back and the amount of these services—the noble Lord read them out—that they provide. Authorities such as the London Borough of Wandsworth, where I live, withhold less than 5 per cent from school budgets for their central services, whereas others withhold well over 20 per cent to provide centralised services. The inequality will be very apparent. I share the wish expressed by the noble Baroness, Lady Garden, and the noble Lord, Lord Adonis, to have some way in which to demonstrate that fairness is being exercised and is being seen to be exercised, but it would be difficult to do that, given the huge disparity at present. Of course, it will be possible for schools, once they become academies, as they do now, to contract back with the local authority for some of these services, which will return that money to the local authority. However, in many cases—it is the case in Hackney, for example—very few of the academies do that.