Academies Bill [HL]

Baroness Garden of Frognal Excerpts

Wednesday 23rd June 2010 Lords Chamber

[The Lord Speaker (Baroness Hayman)]

I have to inform the Committee that if Amendment 6A is agreed, I cannot call Amendments 7 or 8 by reason of pre-emption.

[Baroness Garden of Frognal]

My Lords, I shall speak to Amendments 7, 11, 15, 16 and 80 in this group. While not agreeing with everything that the noble Lord, Lord Hunt, has said, we share his admiration for the work that is done by further education colleges. Amendments 7 and 11 innocently seek to change “or” to “and” and “and” to “or”, but they in fact raise one of central issues in the Bill; that is, the difference between an academy agreement and academy financial assistance. At present the only route to becoming an academy is by negotiating a detailed funding agreement which sets out the terms and conditions under which the academy is to operate. This Bill introduces a new route; namely, academy financial assistance granted under Section 14 of the Education Act 2002, which I think is the one that the noble Lord seeks to delete.

In the guidance issued by the Department for Education to schools thinking about applying for academy status in response to the Secretary of State’s recent letter, it is clear that there are two distinct stages in the application. The first stage is submitting an application for approval to convert to an academy, having it checked over by the department and, if approved, receiving an academy order. Only after receiving an academy order can the school begin detailed negotiation over the funding agreement which becomes the academy agreement. This includes such things as negotiating the TUPE arrangements with the unions and leasing land transfer agreements with the LEA. There will be annexes dealing with such things as admissions, exclusions and SEN.

Although the Minister has made it clear in the discussions we have already had that there is now a standard form of the funding agreement on which most funding agreements would be based, it is and will be an individually negotiated contract between the Secretary of State and the academy trust. In his letter of 18 June, the Minister made it clear that academies funded by the financial assistance route would not have a contract as such but would receive their funding through a grant letter from the Secretary of State. The provisions of that letter would be in line with those in the funding agreement, including commitments on admissions et cetera.

There are however a number of questions still unanswered on which I would like to probe the Minister further. First, how far are the two routes exclusive? Is the second route under subsection (2)(b) essentially that by which the new free schools will be set up, whereas subsection (2)(a) is the route for the conversion of existing schools? Alternatively, is it envisaged that the new fast-track procedures for outstanding schools should use the financial assistance route because the flexibility this gives the Secretary of State means that negotiations can be concluded more quickly?

Secondly, I turn to the issue addressed in Amendment 11. Might a school be partially funded by one method and topped up by another? The use of the word “and” in subsection (3)(a) is ambiguous and could imply that funding will be both by agreement and by grant, or does this deal exclusively with academy agreements? Where is the accountability in the financial assistance route when funding is given under Section 14 of the Education Act 2002? Does that not give the Secretary of State remarkably wide powers. A letter dated last Friday, 18 June to the Times from Peter Newsam, for example, suggested that whereas the academy agreements give schools the security of a seven-year agreement against arbitrary changes, Sections 14 and 16 of the 2002 Act give the Secretary of State almost unlimited powers to vary the terms of payment. What recourse, if any, would a school have against such arbitrary actions?

--- Later in debate ---

It is a laudable aim to ensure that money allocated for children’s education is used for that purpose, and it would run completely counter to that aim if schools were allowed to retain excessive balances and avoid action to reclaim them simply by taking on academy status. This approach would provide for the transfer of only those balances that fall outside the category of excessive. The definition of what would constitute “excessive” appears in current government guidelines to local authorities. This approach would ensure that academies were treated consistently with local authority maintained schools with regard to balances, as they are with regard to other aspects of funding. Like local authority maintained schools, they would be permitted to retain balances set aside for identified purposes and non-excessive balances. Amendment 142, tabled by my noble friend Lord Whitty, would ensure that a surplus held by a local authority could be transferred to an academy on conversion only with the permission of the local authority concerned. We support that amendment.

[Baroness Garden of Frognal]

My Lords, in this group I shall speak to Amendments 154, 155 and 156, which would alter the subsection that provides for a review by the Secretary of State of a school’s surpluses. Of course, we would also seek clarification on any school deficits that might be involved. These amendments provide for review by the Secretary of State. He or she may be predisposed to the establishment of an academy, and this would give the academy proprietor leave to appeal to a local commissioner or local government ombudsman—again getting a third party who might bring more transparency to the discussion. They would secure a degree of independence in the determination of the surplus to be made available to the academy, and would avoid any suggestion of political interference and bias with that determination. The amendments would give equal status in the appeal to both the academy proprietor and the local authority. Replacing “review” with “appeal” would follow on from those changes.