Education Bill

Baroness Sharp of Guildford Excerpts

Monday 12th September 2011 Grand Committee

[Baroness Hughes of Stretford]

My Lords, under Clause 43, the Secretary of State will be given new powers to intervene directly and to move quickly—much more swiftly than hitherto—to close schools. In response to that proposed new power, I shall move Amendment 122ZC.

Currently, the Secretary of State can direct the closure of a school only if it has already been categorised by Ofsted in its independent inspection as requiring special measures. Clause 43 will allow the Secretary of State to step in and close schools on the basis not of an independent, standardised assessment but of any judgment that he comes to that that route of closure is required. Under subsection (3), he will be able also to direct a local authority to issue a performance standards and safety warning notice where it has decided against it. Then, when a warning notice has been given for whatever reason, and the school has not complied, the school will automatically become eligible for intervention and it will be open for the Secretary of State to close it.

Closures of schools could therefore be triggered in this way by the Secretary of State, and not on the basis of an independent assessment by Ofsted. That is a serious extension of power. Closing a school is a nuclear option and has serious implications for parents and an area. The provision would also mean a transferring of schools into academy status by diktat of the Secretary of State without the normal processes having been gone through. I shall explain shortly what I mean by that.

Will the Minister set out his thinking on how closures allowed under the clause would take place and how they would contribute to increasing standards and meeting parents’ and pupils’ needs? Under what circumstances would the Secretary of State step in to close a school that was not in special measures rather than, as is the case at the moment, help drive improvements in the school as a first option? How would such closures that the Secretary of State could simply enforce enable a local authority, for instance, to plan strategically to meet pupil place needs?

As noble Lords may gather from our amendment, which is different from those that will be moved by Liberal Democrats, we do not have a particular problem with the power contained in the clause giving the Secretary of State the power to direct a local authority as there may be circumstances in which local authorities are or have been slow to act in relation to schools where improvements are required. However, we do have a problem with the uncircumscribed and unfettered power of the Secretary of State himself to close a school, and there are two reasons for that. First, there is an issue of principle relating to such a serious option in an area; that if a school is not in special measures, it is right that parents, teachers and locally interested parties are able to play a part in determining what happens to it. There ought also to be an independent assessment by Ofsted on the need for that option. Secondly, I question whether the clause is something of a Trojan horse to accelerate the establishment of academies. The clause, coupled with Clause 36 on the establishment of new schools and the presumption in the Bill that any new school will be an academy, will mean that where, outside an Ofsted inspection and the conclusion of special measures, the Secretary of State decides to close a school—he can do so for a whole variety of reasons—the new school that takes its place will, by default, be an academy. It will not have to go through the normal processes that schools are now required to go through to become academies. It is conceivable that even some relatively well-performing schools could be required to close by the Secretary of State.

I would therefore be grateful if, in addition to dealing with the points I raised earlier, the Minister could reassure us on this point. Will he set out the vision for the future education system and say whether the Government see a place for maintained schools in that? Is it the case that this provision and Clause 36, and the presumption that all new schools will be academies, are designed to ensure that the Secretary of State can accelerate the establishment of academies, irrespective of the views of parents and teachers, by closing schools directly himself and then reopening them as academies?

[Baroness Sharp of Guildford]

My Lords, I, too, want to speak to Amendments 122A and 122B. Clause 43 gives the Secretary of State powers to intervene and close schools that are in special measures. That widens the powers of intervention to schools causing concern. Subsection (3) strengthens the Secretary of State’s powers so that where a local authority, having been directed to consider set performance standards and to issue a safety warning notice, has decided not to do so, the Secretary of State may direct the local authority to give such a warning notice. If such a warning notice is issued to a school and it fails to comply, it immediately makes itself eligible for intervention. As the noble Baroness explained, that may well mean that it is closed and an academy is opened in its place. Under the Education and Inspections Act 2006, the warning notice gives the school the right to ask the chief inspector whether the warning notice is justified and the chief inspector may confirm it or otherwise.

Our problem with the subsection is the degree to which it removes all discretion from local authorities. The problem is that a local authority is asked to consider whether to give a warning notice and to set performance standards. If, having looked at the school, it decides that other measures might be more appropriate and it therefore does not issue a warning notice or the appropriate performance standard, the Secretary of State may now just peremptorily intervene. At a time when the Government are anxious to try to devolve responsibilities—the Localism Bill is going through the main Chamber today—it is against the whole spirit of localism that the Secretary of State should be given these somewhat draconian powers.

Amendment 122B is to some extent a probing amendment. It suggests that we want to know, if academies fail in the same way as some schools fail, whether they have to obey the same rules as maintained schools have to. Is it appropriate that there should be intervention in exactly the same way and that they might be closed down? If they are closed down, the obvious solution would be for the local authority to have the power to step in and open a maintained school in its place—a sort of quid pro quo for the shutting down of a maintained school and the opening of an academy. Here we would have the equal and opposite effect. We would like to know a little more about what happens if an academy fails.

[Lord Hill of Oareford]

My Lords, none of us wants to see underperforming schools letting down pupils year after year. To answer the question put by the noble Baroness, Lady Hughes of Stretford, it is to tackle that entrenched underperformance in certain areas that we are keen to take these measures, which are similar to measures that the previous Government intended to take. We know that out of the 200 worst performing primary schools in the country, over half have been below the floor standard for over 10 years, and 112 of the 200 worst performing primaries are in local authorities that have never issued a warning notice. I know that the previous Government were keen to tackle underperformance, and so are we.

Our starting point would certainly be that underperformance should ideally be addressed by locally developed and agreed solutions, and we are seeing more and more examples of local authorities working with the Government and schools to come up with agreed sponsored-academy solutions. Where there is consistent underperformance, however, and the school and local authority seem unable or unwilling to tackle it, we think that the Secretary of State needs to be able to intervene. This is an urgent and important issue so we intend, subject to the passage of the Bill, to commence the provision on Royal Assent.

The Secretary of State already has a range of intervention powers. Where schools are eligible for intervention—because they have failed to comply with a warning notice or have been judged to require special measures or to require significant improvement by Ofsted—the Secretary of State can appoint additional governors, impose an interim executive board or make an academy order. The Secretary of State can also require the closure of a school in special measures and direct a local authority to consider issuing a warning notice. It is these two powers that the previous Government’s Children, Schools and Families Act sought to extend, and which Clause 43 of this Bill also seeks to extend.

We believe that there is an inconsistency in the current law that means that one intervention option, directing closure, is available only for schools in the Ofsted category of special measures. Where the Secretary of State needs to intervene, he should be able to choose a form of intervention that is most appropriate for the circumstances. If he chooses to direct closure, he has a duty to consult, including with the local authority and the school, and he will have to take account of the views expressed in reaching a fair and reasonable decision.

Warning notices are a well established legal tool for addressing underperformance. They can help schools to recognise and address their problems or, if the school is not capable of addressing the action, they can enable further intervention by either the local authority or the Secretary of State. However, it is the case that local authorities use their power to issue warning notices inconsistently. Two-thirds of them have never issued a warning notice at all. That is why the Secretary of State needs to be able to direct the local authority to issue a warning notice: so that they can be used where they are necessary, as opposed to being dependent on the practice of the local authority. However, we accept that there need to be checks and balances. Therefore, we have included a provision giving the governing body a right to appeal to Ofsted against a direction to issue a warning notice. It would remain the case that the Secretary of State would first have to direct a local authority to consider giving a warning notice. It is only if the local authority decided not to do so that the Secretary of State, having considered the reasons given by the local authority, could then direct it to issue a warning notice, subject to that check of the appeal to Ofsted.

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Moved by

[Baroness Sharp of Guildford]

122BZA: Schedule 12, page 90, line 17, leave out paragraph 3

[Baroness Sharp of Guildford]

My Lords, I shall speak also to Amendments 122BZB, 122BZC and 122BAA. These four amendments fall into two groups, which are about linked but separate issues. I shall start by speaking to Amendments 122BZA and 122BAA and shall then move on to the other two. Both these amendments propose that we do not delete the duty on further education colleges and sixth-form colleges to promote the well-being of their local area.

I have put forward these amendments because I am currently leading a commission of inquiry promoted by NIACE, the National Institute of Adult and Continuing Education, the AOC, the Association of Colleges, and the 157 Group of large further education colleges to look into the role of colleges in their communities. This follows directly from last November’s two White Papers on skills—Skills for Sustainable Growth and the accompanying strategy document. Both these White Papers proposed a considerable freeing-up of colleges from the micro-management of the Learning and Skills Council, and this is now embodied in many of the amendments to Schedule 12.

The aim is essentially to free colleges to take their own decisions. There is particular emphasis on their working for and in partnership with local employers on the one hand and individual students on the other, and on making sure that they meet the needs of these two groups. However, the White Papers also refer to colleges meeting the needs of their local communities. Implicit in the deregulation is that the needs of employers, individuals and local communities vary from area to area and, therefore, that what is required also varies from area to area. My job in chairing the commission of inquiry is to put a bit of flesh on what the notion of serving the local community might mean for such colleges. We published an interim report in July and our final report is due in November. The outcome of our inquiries has been to highlight the potential of further education colleges to play a vital role within their communities in all kinds of ways.

For example, the provision of youth activities might be seen as important in relation to the riots that we saw this summer. Some colleges link up with local authorities to provide imaginative and extensive youth activities, ranging from sport and motor mechanics to drop-in clubs. These bring young people into the college to see the facilities and use the canteen. They then learn that the college is not such a frightening place. The evaluation of these experiments is that they have been very positive in reducing the number of local NEETs, drug-taking and youth crime. Likewise, in some areas colleges play a major part in outreach activities for ethnic minorities. They provide English classes for speakers of other languages, parenting, home-making and cookery classes, and classes in basic numeracy and literacy. These lead to other college courses and often to higher qualifications, so that many people in these communities move from being dependent on welfare benefits to sometimes quite substantial jobs.

On a different tack, some colleges run consultancies for small and medium-sized businesses, helping them with business planning, financial management and even a limited amount of R&D. The activities vary from community to community, depending on local needs. Many are run in partnership with other organisations. We have coined the phrase “colleges as a dynamic nucleus within their communities”. They are proactive, forming partnerships and companies and leading consortia. The Minister of State for Skills and Further Education, Mr John Hayes, is anxious to see colleges pursue this role, particularly in disadvantaged communities, to provide a focus for regeneration and generate a sense of pride in their local communities. Therefore, from the point of view of my commission, I am very anxious that this duty to promote well-being in a local area should remain. The best of our colleges do it already but it is very useful that there should be a statutory obligation to promote well-being to put pressure on those colleges that do not. I know that the Association of Colleges took the view that any good college would do it. Yes, good colleges do it, but it is those that do not that we want to put pressure on.

I turn now to Amendments 122BZB and 122BZC, which concern a different issue. The passage of the Apprenticeships, Skills, Learning and Children Act 2009, with which many of us around the Table were involved, established sixth-form colleges as separate entities. On examining the Act, the Office for National Statistics decided that both sixth-form colleges and further education colleges had been wrongly classified back in 1992 as being part of the non-profit sector, rather than as public sector institutions, and that the right classification for them was as public sector institutions. The deciding factor was that it is the Secretary of State who ultimately agrees and sets their articles of governance and has the right to dissolve them. If further education colleges are, however, classed as public sector, they will be required to obey all kind of Treasury rules about managing their finances. This effectively stops them from doing all the enterprising things—like setting up subsidiary companies and forming partnerships in their communities—that I would like to see them doing, in order to satisfy my remit in leading this commission, and in order to get things moving after that. The Office for National Statistics is sympathetic to this, and has allowed time for the legislation to be amended in this Bill, so that further educational colleges remain, as they have been, classed as non-profit institutions. The purpose of these two amendments is to have a shot at doing this, by helping to change their status.

Amendment 122BZB is about altering the articles of governance. The present legislation gives the Secretary of State—in the form of the Skills Funding Agency, the appropriate authority—powers to modify the articles of governance. The amendment shifts the ultimate decision-making power to the corporation itself, and makes the SFA’s role merely that of having to be consulted. Likewise, Amendment 122BZC places the ultimate decision on winding up the corporation on the corporation itself, although the Secretary of State, through the SFA, may have considerable influence on that decision, not least in refusing funds.

I am aware that these two amendments are not sufficient in themselves. My aim was to get this issue on to the agenda, because I am anxious that colleges should have the power to go ahead and be entrepreneurial in their own right. I beg to move.

[Baroness Jones of Whitchurch]

First, my Lords, we accept the Government amendments which have been tabled. As the Minister set out in his letter to me, they correct what ended up being an unintentional consequence of previous legislation, as it affected voluntary sixth-form colleges. On the presumption that these amendments have been the subject of consultation with the Catholic Education Service, which raised the concerns in the first place, if it is now content with the proposed changes, we echo that contentment.

Secondly, going back to the intent of the changes set out in Schedule 12, I have a number of concerns which I want to share with noble Lords today. First, on the issue of promoting economic and social well-being in their areas, I agree with the points made by the noble Baroness, Lady Sharp—there is a strong argument for sixth-form and FE colleges to play a role in their wider communities, and to link with local youth services. I was very interested in her concept of colleges as a dynamic nucleus in the community, a concept which I think is worth exploring. As she identified, one of the lessons of the recent riots is surely that those areas with the strongest embedded youth provision, providing positive alternatives to gang culture—something in which colleges can play a part—can be the most resilient to unrest and destruction, as they were over the summer. FE colleges have worked hard in recent years to develop robust partnerships with employers in their areas, knowing the local employment market, and tuning the curriculum offers to the needs of local employers. As the noble Baroness, Lady Sharp, says, a number of them already do that, but if we start to remove this provision of promoting economic and social well-being, there is a danger that we will be sending the wrong message: rather than encouraging that development, it will become a licence for colleges to turn inward and insular again, instead of embracing that new role.

Furthermore, on acquiring land and borrowing money by using existing property as collateral, while I would not claim to be an expert on the issues that the noble Baroness, Lady Sharp, was raising, I do have concerns about some of the provisions set out in Schedule 12. I am concerned about the consequences of some of these new freedoms. It is not absolutely clear to me where the demand for this is coming from. It seems to me that the managers of FE colleges have many skills, but intervening in money markets is probably not one of them. My fear is that some well meaning college leaders will quickly find themselves out of their depth.

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[Lord Hill of Oareford]

I am grateful to my noble friend Lady Sharp for moving this amendment and for the work that she is doing on leading her commission. She brings a lot of experience to this debate. Central to our reform of the education and skills system, as the Committee know, is our belief that we should trust professionals. That is just as true for colleges as it is for schools. We all know the excellent work done by colleges as independent institutions, and my noble friend gave a number of excellent examples of colleges being dynamic nuclei, as I think the plural is, and being entrepreneurial. We know that last year’s Ofsted annual report showed that sixth-form colleges are the highest performing sector in providing further education, so we want them and FE to have greater freedom to build on their track record and raise achievement still further.

As well as some non-legislative changes that we are making, such as simplifying the 16-to-19 funding system, the Bill aims to remove the kind of unnecessary regulation that we believe holds colleges back from deciding how to manage their own affairs. That includes things like removing the power to direct a college to consider disciplinary action against a member of staff, reducing the restrictions on sixth-form colleges’ ability to form or invest in a company or removing the duty on colleges in England to have regard to guidance on consultation with students and employers.

In response to the concerns raised by the noble Baroness, Lady Jones of Whitchurch, regarding the capability of FE to manage borrowing and investments, I think that in some ways her questions highlighted a difference between us. Our starting point is that colleges are responsible, high-performing institutions, and we do not think that there is a reason to believe that they will borrow more money just because they no longer need to consult the relevant funding body. We expect them to take steps to ensure that their borrowings are proportionate to their business, as well as affordable. The financial health of a college should be the responsibility of its governing body. However, there are safeguards of the sort that the noble Baroness was seeking. Both the Financial Memorandum and the Financial Planning Handbook set out the mechanisms to ensure the continuing viability of their institutions, the conditions of borrowing, and the controls and monitoring arrangements in place to protect public money and the interests of students.

As my noble friend Lady Sharp argued, colleges make an extremely important contribution to the social and economic needs of their local communities. They do it in many of the ways that she outlined, and they also do it through the education they provide, the skills with which they equip young people, the jobs they create and through their links with local businesses, for example. Therefore, I think that the question is: given that they are doing this, do they need to have a legal duty to do so? The provision to remove the duty has been welcomed by the sector, including the Association of Colleges and the Sixth Form Colleges’ Forum, and we think that it is recognition of the trust that we have placed on the ability of institutions to take well-informed, rational decisions without the need for there to be too much direction from government.

The other amendments in the name of my noble friend Lady Sharp raise the question of freedoms that FE colleges have. The intention behind her amendments is to remove the Secretary of State’s powers to modify a further education corporation’s instrument and articles of government and to place a condition on the Secretary of State to secure the consent of the corporation’s governing body before making an order to dissolve the corporation. My noble friend mentioned two phrases to which I always respond in a Pavlovian way. She referred to Treasury rules and wanting to encourage FE colleges to be enterprising. I am sympathetic to the intention behind these amendments as the Government are committed to trying to reduce the level of external control. Her amendments raise an important issue. It is one that I am very happy to take away and consider further before Report. Perhaps we could discuss that further.

So regards the Government’s amendments, the noble Baroness, Lady Jones of Whitchurch, was kind enough to make the point that in effect we are trying to do what the previous Government attempted, but did not have the opportunity, to do. The aim of the amendments is to reinstate the statutory safeguards relating to voluntary sixth-form colleges. I provided information in the letter that I sent to noble Lords on 13 July. As the noble Baroness said, it was the Government’s view that legislation should reflect the distinct constitutional position of voluntary sixth-form colleges, and they confirmed that they would look to reinstate those protections through legislation. We agree with that view and, through these amendments, we seek to reinstate the statutory position. This includes ensuring consultation with all persons who may appoint or nominate foundation governors before the Secretary of State exercises his intervention powers. It will include consultation with the bishop where the bishop appoints or nominates foundation governors. To answer the noble Baroness’s question, I think that it reflects the concerns of the CES—a point about which she asked me.

So far as concerns the amendment that the noble Baroness, Lady Jones, moved on behalf of the noble Lord, Lord Knight, we are keen to place accountability for student performance and an institution’s own improvement firmly within that institution. Therefore, the Bill seeks to replace the current complex intervention arrangements, which involve both the YPLA and local authorities, with simpler arrangements where the Secretary of State has reserve powers of intervention. We are lucky to have a high performing college sector and we foresee these powers being used very rarely. These arrangements and the role of the Secretary of State have been welcomed by the Association of Colleges.

I hope that noble Lords will agree that the provisions contained in Schedule 12 and proposed in the government amendments are necessary to support the continued success of the college sector. They will ensure that providers are free to deliver high-quality education. They replace the current, complex arrangements for intervention in colleges with reserved powers and ensure that legislation recognises the specific governance and constitutional arrangements of voluntary sixth-form colleges.

As I said, I will pursue further the points made by my noble friend Lady Sharp. With that in mind, I ask her to withdraw her amendment.

[Baroness Sharp of Guildford]

I am extremely grateful to my noble friend for his sympathetic reply to the amendments. I am sorry that we have not had a little more movement on the amendment concerning well-being. Although in some senses, as my noble friend says, it is unnecessary, because a lot of colleges are doing it and I know that the Association of Colleges and the sixth-form college group welcome that, my point was that it helps to reinforce the issue. However, that is a background issue.

To pursue the other, rather esoteric issue, I know that the team in the Department for Business, Innovation and Skills is working hard on it, and I hope that we can get some changes to the Bill that will satisfy both the Treasury and the Office for National Statistics. With that, I beg leave to withdraw the amendment.

Amendment 122BZA withdrawn.