Academies Bill [HL]

Debate between Lord Knight of Weymouth and Lord Phillips of Sudbury

Tuesday 13th July 2010 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I am most grateful to my noble friend for listening to the arguments advanced at the previous stage, with which I was involved, and for bringing forward the new provisions that meet satisfactorily the matters concerned. There is just one point on which I would be obliged for his assurance. Some noble Lords will find that the wording of subsection (1) of the proposed new clause, although it mirrors the new consultation clause, still appears somewhat subjective, requiring the people promoting the new or additional school to,

“consult such persons as the person thinks appropriate”.

It would be helpful to have in Hansard an assurance from the Minister that, in considering the impact of a new or additional school on other schools under the new impact clause, the Secretary of State will have to take a view as to whether the consultation undertaken by the promoters of the new school is adequate and sufficient in order for him or her to come to a view on whether the impact is on the right side of the line.

As I say, I hope that the Minister will be able to assure the House that, if the Secretary of State considers that the consultation undertaken by the promoters is simply not adequate to establish whether the impact is on the right or wrong side of the line, he or she will be able to undertake further consultation as will lead to the facts that he or she must have in order to reach a proper conclusion on impact.

[Lord Knight of Weymouth]

I pay tribute to the Minister for ceding the principle around the impact of additional schools. He has listened to the House and we are grateful to him for that. Like the noble Lord, Lord Phillips, I pay particular attention to Amendment 7 and the phrase,

“a person must consult such persons as the person thinks appropriate”.

Given the excellence of the people drafting the clauses, I am sure that that is perfectly sound technically. However, it is wide in its effect. I would argue that in the case of additional schools, in particular, we have to include in that consultation the local authority and possibly the schools forum. I ask the Minister to commit to amending the Bill in the other place, particularly as he already may need to do so. If he does not like the amendment agreed earlier, that may open up the possibility that he will agree to an amendment on this.

My concern is around the funding of these additional schools and it may help your Lordships if I briefly explain how the existing funding works. The bulk of schools funding comes through the dedicated schools grant—except for academies, which are funded directly by the Secretary of State. The dedicated schools grant is then allocated by local authorities as agreed by the schools forum, which is made up of schools, pre-schools, further education colleges and other 14 to 19 providers. It is notable that the Minister does not include pre-schools in Amendment 6 and, given that under his policy academies can now include primary schools, which may be providers of pre-school education, there may be an issue about pre-schools not being consulted. However, I shall not dwell on that.

When academy arrangements are entered into, the necessary funding for the academy is taken away from the local authority’s dedicated schools grant and allocated direct to the academy. Additional schools need revenue funding, and that will come from that local authority allocation. That is why it is essential that the local authority is consulted—unless, of course, the Minister has a pot of money for revenue funding. I know that capital funding is allocated and, like other noble Lords, I have been on the web today trying to understand these issues. On the Department for Education’s website I found a press release from the Secretary of State dated 18 June in which he refers to capital funding by reallocating £50 million from the enhancing technology grant to create a standards and diversity fund. However, there is no mention of the revenue funding needed for these new schools.

The frequently-asked-questions section on free schools contains six lines outlining how much funding I will get to run my free school. That remains very vague. It states that,

“we will work with the early groups of Free Schools to develop a sustainable and fair funding model and publish further detail as it becomes available”.

Perhaps the Minister is ready to publish that further detail to help inform the debate today.

Determining the revenue of an additional school requires a prediction of pupil numbers. This then determines both how much the new school will get and how much the other schools will lose because we are working within a constrained pot—unless, of course, the Minister has his pot of gold. Can the Minister tell the House where the revenue will come from in the first few years as the additional schools are established? A modest-sized, virtually unviable, secondary school would have 400 pupils at £4,000 per head per year, which is probably lower than the current average per pupil funding. According to my calculator, that is £1.6 million of revenue funding per school in its first year of operation. We need to know where that money is going to come from.

Who agrees the predicted number of pupils for the additional school? That will have an impact on the surrounding schools because they will then know how many they are likely to lose. What form of appeal will there then be for those schools, the local authority and the schools forum, which advises on the detailed allocation to each school? What form of appeal will they have on the decision on the predicted number of pupils? Has the Minister taken legal advice on whether the current process that we are being asked to agree today is challengeable if there is no consultation with local authorities or schools forums?