Iain Wright
Main Page: Iain Wright (Labour - Hartlepool)Department Debates - View all Iain Wright's debates with the Department for Education
(14 years, 5 months ago)
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Vernon Coaker
I agree very much with the Minister that this has been an excellent, high-quality debate. There were many contributions, and may I begin by apologising to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) for not being present for his maiden speech? I understand, however, that it was excellent, and I am sure he will be a worthy replacement for a friend of ours, Angela Smith. I wish him well in Parliament, and we look forward to hearing further contributions from him.
I was not quite sure whether the contribution of the hon. Member for Penrith and The Border (Rory Stewart) was a second maiden speech or a maiden, but although he did not agree with me, I still thought it was a reasonable speech, if that makes sense. [Interruption.] No, I say in all sincerity that it was a good speech. Tribute was paid to his predecessor, David Maclean, by the hon. Member for Portsmouth South (Mr Hancock), and we all had great admiration for the way in which he battled against some of the difficulties he faced. I am sure the new hon. Member for Penrith and The Border will be a worthy addition to the House and I wish him well.
I want to pay tribute to some of the other speeches made, particularly that by my hon. Friend the Member for North West Durham (Pat Glass). Many Members have paid tribute to her contribution. Her speech was not only very well informed, but very moving. The power of the stories that Members can bring to the House from our experience as professionals outside it makes a huge difference, and there was great credibility in what she said and we all learned from her remarks. I am sure we will continue to benefit from her contributions as she pursues her parliamentary career. I also thank the hon. Member for Croydon Central (Gavin Barwell) for his generous remarks about my approach and for the conversations we have had about many of the matters we have been discussing today.
I am also very grateful to the Minister for his reply. It is clear that the Government are thinking of making a number of significant changes—I do not want to use the word “concessions” as that makes it sound as if there was a battle—on the issue under discussion as a consequence not only of this debate, but of contributions outside the Chamber. I have to say that some of the concessions—the changes—that are now being made ought to have been made before. I am not trying to be churlish; I am saying that because these are such important matters. As the Chair of the Select Committee said, the evidence base for the Bill—the impact assessment and the equalities impact assessment—really is not good enough, given the Bill’s importance. These are essential documents that go alongside a Government Bill. I say to the Minister and his colleagues that they are extremely important documents because they are the evidence base on which Government legislation is supposed to be based. The Chair of the Select Committee was harsher than I was, but I must say that those documents did leave quite a bit to be desired.
We are all pleased to hear about the Green Paper, the welcome review of SEN funding for academies, and the Minister’s commitment to examine the role of local authorities and to ensure that their role is properly recognised in the system as things progress. There was also a specific recognition of one of the points raised. I am not saying that this happened because of the point I raised, but I did say that the model funding agreement that had been published did not contain a requirement for a teacher in the academies to be responsible for children in care, and the Minister responded by saying that that will be changed. That, too, is very welcome.
It would be churlish of me not to say that significant change has been made as we have progressed through our consideration of the Bill, and that is very welcome. The amendment seeks to push the Government to recognise that important problems remain in how this structure has been set up. The definition of low incidence SEN and low incidence disability is fundamental to the Bill, but we are passing a piece of legislation that contains no definition of that.
As Members from across the House have said, that is a recipe for confusion, litigation and lawyers, because how is a local authority, an academy or whoever supposed to know whether they are meeting the requirements of the legislation, given that we currently have no criteria for determining that? I know that the Minister has given a commitment for this to be contained in codes of practice and in other places. In the spirit of trying to be helpful, may I say that it is essential that that kind of clarity is provided in respect of legislation, particularly with something that is such a key part of the Bill? I know that he will take that on board and take it forward.
The Minister has tried to address the other aspect of what our amendment was trying to ensure, but confusion remains as to what the funding will mean for individual schools and what it will mean for the amount of funding that is left for local authorities in terms of that central provision, which will be essential. Confusion also remains about the co-ordinating role in order to ensure that all of our young people get the support that they need. How the Secretary of State is supposed to do that from the centre right down to school level is a real problem, given that the Young People’s Learning Agency is supposed to be the vehicle by which academies are held to account. The YPLA is a new body, and it has no experience of dealing with special needs or of this provision. So to rely upon it as the vehicle or body that will try to ensure that the Secretary of State is informed about whether an academy is appropriately using the money that it gets to support children with SEN is simply a wish rather than something that the Government have evidence to demonstrate will actually work.
This has been a hugely important debate, and the Government have made some significant concessions. It is a shame that we cannot amend the Bill to give it the legislative and statutory force necessary to give all of us the reassurance that we need. However, given the Minister’s concessions, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 7
Transfer of school surpluses
Mr Iain Wright (Hartlepool) (Lab)
I beg to move amendment 61, page 5, line 22, leave out from ‘proprietor’ to end of line 23 and insert ‘to appeal to a Local Commissioner’.
The First Deputy Chairman
With this it will be convenient to discuss the following: amendment 62, page 5, line 25, leave out ‘review’ and insert ‘appeal’.
Amendment 63, page 5, line 26, leave out ‘review’ and insert ‘appeal’.
Amendment 64, page 5, line 43, at end insert—
‘“Local Commissioner” has the meaning given by section 23 of the Local Government Act 1974.’.
Mr Wright
I begin by paying tribute to the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes). I class him as a good friend. He is a kind and courteous man and I am sure that my daughter Hattie will be very pleased that she has been mentioned in the House again. He is more than welcome to join us for “Toy Story 3”—indeed, I see him as the Buzz Lightyear of the coalition Government. To infinity and beyond!
May I clarify a point made by my hon. Friend the Member for Gateshead (Ian Mearns), who was in the Chamber assiduously this afternoon, until I got up, when he left? He mentioned that his area produces angels, and in many respects he is right—Gateshead is a fantastic place—but I think that he was referring to the angel of the north, which is a strong and proud icon of our region of the north-east, and I should point out to the Committee that the angel of the north was fabricated in Hartlepool. That is an important point.
I shall be brief, because there is not a lot of time left and there is a lot of work still to do. It was very important that we had considerable debates on Building Schools for the Future and on special educational needs. Clause 7 requires that where the Secretary of State approves a maintained school’s application to become an academy, the local authority must determine whether, immediately before the conversion date, the school has a surplus and, if so, the amount of the surplus. Once that is done, the local authority must pay the surplus over to the proprietor of the academy.
Subsection (4) states that regulations may be brought forward on how the payment of any identified surplus could be made and subsection (5) lists what those regulations can include. An important part of those regulations would be the manner in which the proprietor of the academy can apply to the Secretary of State for a review of the determinations. I argued in Committee last night that the nature of the Bill is to force schools to consider that their most important relationship is not with local parents or pupils but with the Secretary of State.
This is a centralising Bill that concentrates power and decisions into the office of the Secretary of State. The Opposition think that there should be more independence from Whitehall and more power for local people, which could include the proprietor of the academy. On that basis, amendment 61 would replace the idea of the proprietor going directly to the Secretary of State to ask for a review and allow the owner of the new academy to appeal to a local commissioner.
Amendment 64 would make it clear that the term “local commissioner” has the same meaning as that given by section 23 of the Local Government Act 1974, which essentially means the local government ombudsman. That is a well-recognised route for conducting investigations into local matters and gives a degree of impartiality and independence because the local commissioners are appointed by the Secretary of State for Communities and Local Government. We think that the Secretary of State for Education, under the provisions in the Bill, is responsible for a number of things, namely entering into an academy arrangement, making an academy order and reviewing the transfer of school circumstances among other things. There does not seem to be any effective challenge to the single authority of the Secretary of State, which is one reason why we have tabled the amendments.
The inclusion of the word “review” is also somewhat vague and does not give reassurance and confidence to the proprietor of the academy, or to anybody else for that matter, that a proper procedure will be followed. Amendments 62 and 63 would strengthen the wording of the Bill by leaving out the word “review” and inserting the word “appeal”, which gives a sense, in our opinion, that a proper and transparent process must be adhered to. The amendments would not increase any bureaucratic burden on any interested party, but they would provide a degree of certainty and reassurance for stakeholders, particularly the proprietor of the new academy. For that reason, I am interested to hear what the Minister has to say about the amendments, and I commend them to the Committee.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
It is a pleasure to participate in this debate. These four amendments have been grouped together because they concern the appeal procedure. It is our policy that a maintained school that converts to academy status should take with it any funds that it has accumulated in previous years. I do not think that that is news to the shadow Minister. Schools might have earmarked such funds for particular purposes and we would not want them to be prevented from carrying out their plans as a consequence of their conversion to academy status. The Bill therefore makes provision for that and for an academy to appeal to the Secretary of State, as we see fit, where it believes that the local authority has wrongly calculated the appropriate amount.
The Opposition’s amendments would change the whole appeal process so that the academy would appeal to the local government ombudsman rather than the Secretary of State. I think the shadow Minister characterised the measure as being centralising rather than localising, but we do not believe that what the Opposition suggest is appropriate. We have published draft regulations to enable hon. Members to see the Government’s intentions in this regard. The draft regulations state that the local authority would have to determine, within three months of the conversion date, whether the school had a surplus immediately prior to the conversion date and, if so, the level of that surplus. That is consistent with the usual period for finalising local authority accounts at the end of the financial year and should give sufficient time to calculate accruals and commitments accurately. If the academy’s proprietor did not agree with the determination, they would have one month from being informed of the determination to apply to the Secretary of State for a review. On receiving such an application, the Secretary of State would have three months in which to determine whether the school had a surplus and, if so, the amount of that surplus, and to inform the academy’s proprietor and the local authority of those determinations.
If there has been a review, the local authority must pay over any surplus within a month of being informed of the Secretary of State’s determination. If there is no review, the authority would have to pay over any surplus within one month of either the proprietor informing the authority that they agreed with the determination or at the end of the period in which the proprietor may apply for review—whichever is earlier. That is very clear.
Tim Loughton
If the hon. Gentleman bears with me, there is a further explanation that might satisfy him.
Decisions regarding financial disputes of this kind should rest with the Secretary of State, as they do currently. The Secretary of State is responsible for making a decision when the local authority and schools forum disagree about the operation of the minimum funding guarantee or about the level of central expenditure retained by the local authority in the schools budget. The Secretary of State is also able to approve additional arrangements when local authorities request to have school finance regulations disapplied and so is well used to evaluating these issues.
What is proposed would be an unnecessary extension of the role of the local government ombudsman, whose role is to deal with complaints from members of the public about local authorities rather than to deal with disputes between two publicly funded bodies about the detail of financial accounts. We do not think it appropriate for that role to lie with the ombudsman. Dealing with that sort of dispute is already an established part of the Secretary of State’s role. On that basis, we do not think that the amendments are necessary and I urge the hon. Gentleman to withdraw the amendment
Mr Wright
I thank the Minister for clarifying the situation, but I still am not entirely certain about the right to appeal. If a review had taken place and the proprietor was still unhappy with the situation, would they be able to appeal again to the Secretary of State or an independent body? We have suggested that they could appeal to the local government ombudsman, but there could be other routes; we are quite flexible about that. Will the Minister clarify that?
Tim Loughton
I thought I had made this clear, but obviously I have not. The Secretary of State’s decision is final, so the Secretary of State will be the final arbiter.
Mr Wright
I thank the Minister for confirming that. My fundamental concern about this aspect of the Bill remains the same, namely that it seems to be a very centralising Bill. It diverts the relationship away from a school thinking about local stakeholders, and having a good, constructive partnership and collaborative arrangement with local people, pupils, staff and so on, and towards having a direct relationship with the Secretary of State. I thought that was contrary to what the coalition Government would want to do with regard to empowering local people. In that respect, I remain unhappy.
Jeremy Corbyn (Islington North) (Lab)
Is there not a problem with the lack of accountability of the Secretary of State? The Secretary of State effectively approves the transfer of funds between the local authority and the academy, in one way or another. If there is a dispute, it is resolved by the Secretary of State, who gave his approval in the first place. There is no obvious transparency in the system, as far as the Secretary of State is concerned, and it is not obvious where one goes if either party simply does not accept the Secretary of State’s decision.
Mr Wright
I certainly agree with my hon. Friend. The Secretary of State has made it clear that he is keen to expand academies as quickly as possible, so he has a vested interest in making sure that that happens. Then there is the decision on the transfer of surpluses; as my hon. Friend says, the Secretary of State is the final judge and jury on that issue. There is an inherent conflict of interest between various bodies, and I am concerned about that. There is a general concern about the complete lack of consultation with local stakeholders on the provisions, and I remain concerned about that.
Tim Loughton
To respond to the point made by the hon. Member for Islington North (Jeremy Corbyn), there are many areas of schools business where the final decision will remain with the Secretary of State, and that is proper, but remember that the Secretary of State needs to have regard not just to the future and the financial viability of academies, but to the sustainability of other schools, which will continue to be administered through local education authorities. The Secretary of State is interested not just in academies, but in all schools.
Mr Wright
I thank the Minister for his contribution. I am keen for him to intervene again, because I still think that the word “review” is very vague. It does not set out in any degree what the process would be, so that the proprietor of the academy could be reassured that appropriate processes had taken place. Our amendments 62 and 63 would tighten up the language of the Bill. They would ensure that there was not a review, to use that broad, somewhat ambiguous word, but an appeal. That would help to clarify certain matters in the Bill. I would be happy for the Minister to respond further on that point.
Dan Rogerson
I am intrigued by this role reversal: the hon. Gentleman is standing up for the proprietor of the academy against the local authority in this instance. It seems a reversal of the way in which the arguments have gone throughout the day. It strikes me that we are talking about a one-off instance, not a continuing relationship. Once the decision has been made, the academy is in the area, doing things with the local community. On his point about the provisions being a centralising measure, what he describes may not happen in every case, and the measure is a one-off.
Mr Wright
The hon. Gentleman makes a fair and reasonable point. I am anxious to proceed with business; I want to put it on the record that that is one of the reasons why my hon. Friend the Member for Gedling (Vernon Coaker) and I did not press amendment 71 to a vote. I understand what the Minister is saying, but I still think that this is a centralising Bill. The comments of the hon. Member for North Cornwall (Dan Rogerson) put the matter in a wider context. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Iain Wright
I beg to move amendment 76, page 5, line 34, leave out from ‘time’ to end of line 36 and insert
‘after deducting from any amount made available by a local authority to the school’s governing body (under section 50 of SSFA 1998 or otherwise) that has not been spent by the governing body or the headteacher, all existing and contingent liabilities not transferring to the Academy under a property transfer scheme (including any liabilities of the local authority incurred on behalf of the school), there is a net amount available.’.
The First Deputy Chairman
With this it will be convenient to discuss amendment 66, in clause 8, in page 6, line 22, leave out ‘property, rights and liabilities’ and insert ‘property and rights’.
Mr Wright
As I mentioned earlier, clauses 7 and 8 are significant elements of the Bill; they change dramatically the current situation on the transfer of school surpluses and property. It is worth reiterating the point that I made about clause 7. Clause 7(2) requires that when the Secretary of State approves a maintained school’s application to become an academy,
“The local authority must determine…whether, immediately before the conversion date, the school has a surplus, and…if so, the amount of that surplus.”
Under clause 7(3), once that is done the local authority must pay the surplus over to the proprietor of the academy. As I said earlier, that represents a fundamental change to the current landscape, as at the moment surpluses of closing schools remain with the local authority. That includes cases in which an existing school is closed to become an academy.
A school might have built up a surplus for many reasons. Shared facilities might generate an income, for example, or a local authority or other party might have provided additional funding for work in the community and the maintained school might have been encouraged to build up a surplus to ensure that the new community facility could be built or established. That has certainly happened in my constituency, and I am sure that it has happened in other Members’ as well. In Hartlepool, a sports centre has been built on the estate of a particular school, through increased funding from various sources and surpluses held by that school. The understanding is that it will be used by other schools and by community groups.
Under the terms of the Bill as it stands, in such a situation the surplus would be transferred to the new academy, and any benefit to the wider community that was originally envisaged—the original purpose of the surpluses—would be lost. What reassurances can the Minister give to ensure that that does not happen? What is the Minister doing to stop a situation in which, somewhat late in the process, a school that has built up surpluses and is anticipating the building of a new community or shared facility on its estate, following negotiations with the local authority, then decides to convert to an academy?
That could happen without real consultation, but the school would hold on to those surpluses. The issue comes back to unilateral decisions that fail to take into account the wider community and collaboration between schools and the local education authority. In essence, the amendment tries to probe the Minister by asking what checks and balances he will insert into clause 7 to ensure that such surpluses are identified as appropriate and constitute value for money.
Mr Graham Stuart
Why would a school that had built up such surpluses to provide a community facility for joint use suddenly wish to deviate from that when it sought to become an academy? I am not saying that that would be impossible, but the hon. Gentleman seems to be suggesting that it would be the norm.
Mr Wright
I am not suggesting at all that that would be the norm, but we could provide a control mechanism in the legislation on this issue, to tighten up the existing provision. We are not suggesting that the transfer of surpluses should not take place, but wider circumstances might be considered that could prove detrimental to neighbouring schools.
The whole Committee would agree with the need to see transparency and value for money in all aspects involving public money and public assets. To respond to the Chair of the Education Committee, I should say that, essentially, clause 7 moves taxpayers’ money from the public sector to the private sector. What controls is the Minister proposing to ensure that that is subject to appropriate balance, scrutiny, transparency and probity?
Mr Graham Stuart
It is surely unfair to say that the clause moves resources to the private sector. We are talking about an independent state school, but it would still be a state school and not part of the private sector. Yesterday evening, the hon. Gentleman made a desperate effort to change the wording to “free market schools” rather than the wording in his amendment; that suggested more political desperation than is the norm with him.
Mr Wright
I thank the Chair of the Education Committee and I entirely understand his point. Perhaps I should moderate my language in Committee. However, the point is essentially the same: how do we ensure that local taxpayers get good value for money? Like the equalities impact assessment, the impact assessment of the Bill is somewhat vague and light on detail. It states:
“Total one-off costs incurred by schools converting to an academy are estimated to be an average £78k including VAT.
Since the VAT costs are a transfer payment from DoE to HMRC, they are not economic costs. The total economic costs per conversion to academy are therefore £66k.
However, there is scope for Academies meeting these costs from within their existing balances which could reduce the cost to DFE to as little as £25,000 per Academy.”
Will the Minister outline the evidence base for this? No mention whatever is made of the transfer of surpluses in this regard. In preparing for the Bill and with regard to the impact assessment, what work has been done in relation to surpluses that could be transferred to the academy? I would be interested in any information that he could provide about that.
The purpose of amendment 76 is to address those concerns about transparency and accountability and to try to ensure that there is an appropriate process.
Dan Rogerson
I am not sure whether the hon. Gentleman intends to discuss amendment 66, which is grouped with amendment 76. I may be misreading those amendments, but as I understand it, they are contradictory, because one of them seeks to remove liability while the other seeks to offset liabilities and surpluses. What is the thinking behind that?
Mr Wright
I will come to that, but I assure the hon. Gentleman that the amendments are not contradictory—they are trying to address a similar problem and to ensure that we can resolve this issue.
Amendment 76 would ensure that all existing and contingent liabilities, including any liabilities that have been incurred on behalf of the school by the local authority, should also be considered. In this context, I take the contingent liability to mean a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the existing school’s control. An example could be outstanding legal cases. We discussed in Committee last night the possibility of legal challenge from staff who might not have had the opportunity or the time to consider properly the TUPE arrangements of moving from a maintained school to an academy—a point that has been well articulated by my hon. Friend the Member for Blaydon (Mr Anderson). That might be considered a possible contingent liability.
Another example, which has been discussed this afternoon, could be any liabilities arising under current private finance initiative arrangements. We had an interesting debate about amendment 70, with particular regard to PFI. One of the risks is that a local authority could have a potential 25-year period of liabilities arising from PFI, and converting a maintained school to an academy means that the academy has no way of being liable for that payment over that quarter of a century. What reassurance can the Minister give in that regard?
Mr Graham Stuart
May I take the hon. Gentleman back to TUPE and the speech last night by the hon. Member for Blaydon (Mr. Anderson), who was passionate about the uncertainty that could beset many employees of schools? Will he, as the Minister did, but from his side of the House, put their minds at rest? Can he confirm that when a school converts and becomes an academy, the staff will have no reason to believe that they will have any different conditions, and that it is therefore hard to see exactly what great liabilities could be in store in that transfer?
Mr Wright
I am not suggesting that there would automatically be any sort of change or reduction in terms and conditions. However, the freedoms and flexibilities, and the movement away from national terms and conditions and pay scales, could provide a degree of anxiety for staff, particularly low-paid staff who may have given good and loyal service to the local education authority for many years. For example, staff might think that they have had insufficient time to consider what converting to an academy might mean, and therefore, in conjunction with the union, take their employer to a tribunal. Perhaps that should be considered as part of a contingent liability. We need to ensure that all possible scenarios have been considered when taking into account the transfer of surpluses.
Clause 8 allows for the transfer of other property, and amendment 66 would remove the word “liabilities” from subsection (5)(b), which refers to the apportionment of properties, rights and liabilities. In response to the point made by the hon. Member for North Cornwall (Dan Rogerson), the reasoning behind the amendment is similar to the point that I made earlier about contingent liabilities. I reiterate that there is a particular concern about arrangements such as those under the private finance initiative regarding the transfer of liabilities, and the potential for them to be apportioned between the local authority and a new academy. In a PFI arrangement with 25 years of payments still to go, we must ask how appropriate costs should be so apportioned, and the amendment is an attempt to resolve that question.
We reason that if an academy is to operate as an independent school with full autonomy and freedom from the local authority, it should be responsible for full liability under any PFI arrangement in respect of the school. That seems balanced and fair, and I ask the Minister whether he is opposed to it.
We seek reassurance from the Minister that local authorities, which will face immense financial pressures over the next few years, with enormous potential cuts and pressures from changing social circumstances such as the ageing population, will not be liable for the debts of schools that have transferred as well as having to cover the costs of central services such as payroll, human resources and other infrastructure that they were, and will be, providing to maintained schools. I hope that he can provide that reassurance, and I commend the amendments to the Committee.
Tim Loughton
I seek to provide the shadow Minister with some reassurances on the various concerns that he has raised about surpluses. I support his objective that the whole system should be transparent and properly accountable. I think he is perhaps unduly concerned, but he is right to tease out some more information through what I believe are probing amendments. I shall address them in order and then turn to his points on the PFI.
Amendment 76 would widen the definition of the surplus to take account of all liabilities not being transferred to an academy, including any liabilities that a local authority incurred on behalf of a school. In calculating the surplus, local authorities will follow normal accounting procedures and take into account expenditure in respect of which work has been done or goods received but invoices have not yet been paid. As we see the new converters as continuing schools, we will seek to ensure that local authorities are not left to fund any remaining costs that would otherwise have been charged to the school’s budget—that is only fair. If a school has ongoing commitments such as an internal loan, we will expect it to continue those payments and the local authority to accept that.
For the same reason, it would not be appropriate to offset against the surplus any liabilities incurred by the local authority on behalf of the school that would not otherwise have been charged against the school’s budget. We understand that closing the old school’s accounts can be a lengthy process, and that authorities are concerned that they might pay over a final cash sum to the academy in accordance with the regulations, only to be left later with outstanding bills without any funding, which would not be fair.
We are drafting guidance on the calculation of surpluses, which I hope will give the hon. Gentleman the assurances he seeks. It will cover debtors and creditors, bank accounts and internal loans and is being developed with partners including the Chartered Institute of Public Finance and Accountancy. There is also a model commercial transfer agreement for adoption by the school’s governing body, the academy and the local authority, which will deal with possibilities such as he described.
Mr Iain Wright
I thank the Minister for his clarification and welcome the fact that guidance will be provided. Can he give us any reassurance about the status of that guidance? Will it be, say, in secondary legislation subject to a negative resolution of the House, or will it be simply a press release on the Department’s website?
Mr Iain Wright
That sounds like a potential nightmare, and an awful lot of work needs to be done on it. The impact assessment mentions the negotiations between the DFE and DCLG only very briefly. What further information and clarity can the Minister give the Committee to ensure that good cross-departmental work is done so that local authorities are not penalised financially?
Tim Loughton
Such negotiations are not only between the DFE and DCLG; it is also a Treasury matter. We have had discussions involving those parties. I have heard what the hon. Gentleman has said and in ongoing discussions, we will take note of his point. However, I think he is unduly concerned. He quite rightly said that it is a complicated matter, but we have looked at the PFI scenario to ensure that there are no contingent liabilities that could queer the pitch for the authorities or academies involved. The Government believe that amendments 76 and 66 are unnecessary. It is appropriate that he has used them as probing amendments, but on the basis of those assurances, I invite him not press them to a Division.
Mr Iain Wright
The Minister has clarified many of my concerns, but some remain. This is another example and illustration of the Minister and his team legislating in haste. They may have to unravel much of the Bill in subsequent legislation in the next few months and years. I hope that he keeps the Opposition informed about discussions with his colleagues in DCLG, because I do not want local authorities to be liable for anything that could harm them financially in the next few years.
I hope that the guidance is slightly more than just that. It would have been a good idea to subject it to the negative resolution of the House. The Minister could have reflected over time and perhaps tabled a Government amendment on Report to that effect, but alas, that option is not available to us.
I am anxious to move proceedings on. I hope the Minister and his team will keep us informed. I understood him when he said that I was unduly concerned, on which basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clause 8
Transfer of other property
Mr Iain Wright
I beg to move amendment 65, page 6, line 38, at end add—
‘(11) The Secretary of State before making a property transfer scheme shall consult with—
(a) the local authority;
(b) the current owner, if not the local authority;
(c) such other persons as the Secretary of State considers appropriate.’.
An identical amendment was tabled in the other place by the noble Baroness Sharp of Guildford, and the rationale behind the proposal remains sound. The clause allows the Secretary of State to “make” a property transfer scheme, which might involve the transfer of IT equipment and other assets. I mentioned last night the weakness in the Bill regarding consultation, and amendment 65 would improve the consultative process. It seems perfectly reasonable to the Opposition that the local authority and the current owner—if that is not the local authority—are consulted to ascertain what should happen to other property or assets, and whether they could be used elsewhere in the area for alternative educational provision.
In speaking to the identical amendment in the other place, Baroness Sharp also said the clause does not mention consultation with interested parties that might be affected by such a transfer, such as catering contractors. My hon. Friend the Member for Blaydon (Mr Anderson) and I made a similar point last night about proper consultation with hard-working staff within the estate, such as catering and cleaning staff, as well as consultation on other assets such as IT equipment.
The amendment would mean a much smoother transfer from the existing school when it converts to academy status. The Minister in the other place said that he would reflect on the matter, and I believe that clause 10 arose as a result of that reflection. However, what should happen to other property, because that too should be subject to wider consultation? There should be proper consideration on important assets, of which the most important are the people who will be affected by the transfer. By doing so, we would ensure a much smoother, less painful and more considered transfer.
Mr Gibb
Clause 8 gives the Secretary of State the power to make a scheme to transfer the property of a maintained school in respect of which an academy order has been made. Amendment No. 65, ably moved by the hon. Member for Hartlepool (Mr Wright), would require the Secretary of State to consult the local authority or other owner or any other appropriate persons before making a property transfer scheme that would affect, among other things, desks, computers and the assets of any existing school.
In the case of converting academies, we intend that there should be a seamless transfer between the existing maintained school and the academy, as part of which the school will clearly need to be able to continue to use its property, and to take advantage of contracts into which it may have entered, such as those for cleaning, catering and insurance. It may also need to transfer the benefit of trust funds left in trust for pupils or the school. The trust—say, a bursary for art left to the school many years ago in the will of a benefactor—may well mention the name of the predecessor school, and clause 8 would enable it to be transferred to the new entity of the academy.
Mr Gibb
In those circumstances, the contract would transfer under this clause, but the employment rights would be between the company that is the subject of the contract and the employee, who is not employed either by the predecessor school or the successor academy. The employment rights would not change because the contract would continue with the employer, who would not change.
I should say that we anticipate that the making of any scheme under the provisions of this legislation will be rare. We hope that, in most cases, the transfer of property in connection with a school converting to an academy would be, as now, by agreement among the parties. In most circumstances, a transfer of contract would take place by agreement. That would be our starting point for any property transfer, and this would ensure that all those with an interest in the transfer of such property would be involved in negotiations about their potential transfer. Therefore, we would not get to the point of considering making a scheme under this clause until such discussions were exhausted. It is therefore inconceivable that anyone with an interest in the property to be transferred would not be consulted on a possible transfer in advance of any scheme being made. There is no reason why the Secretary of State would go to the trouble or expense of making a scheme if matters could be resolved amicably. There might be some contracts though, where the other party might try to use a transfer to obtain further financial benefit. The possibility of the making of a scheme would remove that incentive. The provision is an attempt to prevent the possibility that someone might be able to leverage financial compensation, knowing that the transfer has to take place. It is to avoid that possibility that this clause is in place, so that the Secretary of State can make a transfer against the wishes of people who are party to the contract.
The amendment is therefore unnecessary and I ask the hon. Member for Hartlepool to withdraw it.
Mr Iain Wright
In the large amount of time I have available, I would like to say that the Minister has explained a lot, and to be fair he has gone some way further than the Minister in the other place—