Building Schools for the Future

Lord Hill of Oareford Excerpts

Monday 14th February 2011 Lords Chamber

[The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)]

My Lords, with the leave of the House, I will now repeat the Statement on Building Schools for the Future, made earlier in another place by my right honourable friend the Secretary of State for Education. The Statement is as follows:

“Mr Speaker, I am grateful for this opportunity to repeat the points made in my Written Ministerial Statement on Friday. On Friday, Mr Justice Holman handed down judgment on the judicial review brought by six local authorities, including Waltham Forest, following my decision to cancel BSF projects in their areas. It was of course deeply regrettable that any building projects had to be cancelled, but the scale of the deficit we inherited meant that cuts were inevitable, and the inefficiency that characterised the BSF schemes meant that we needed a new approach.

All the local authorities that pursued the action agreed that cuts had to be made, but, as the judge records, the local authorities argued that other unidentified projects should have been stopped, rather than theirs. The claimants argued that the Government’s decision-making was confused and irrational, but the judge makes it clear that the decisions that I made were clear and rational. He states that,

‘the Secretary of State intended to draw, and did draw, a clear demarcation between situations where there were obligations under contract and those where there were not. The decision is not open to challenge on irrationality’.

The claimants argued that the chosen cut-off date for projects was wrong, but the judge also makes it clear that a cut-off date of 1 January reflected government-wide policy and helped to achieve that policy by making very large savings.

The claimants also argued that there was a breach of promise in stopping their specific projects, but the judge also said:

‘I do not consider that there was any failure … because there was no such promise or expectation’.

I am grateful that on all these substantive points, the judge found as he did in our favour.

On two procedural grounds, the judge ruled in favour of the claimants. In essence, his view is that my consultation with 14 local authorities in relation to 32 sample schools and a further 119 individual academies projects did not go far enough, and that I should have included the six claimants in my consultation. He judges that I should have had rigorous regard to equalities considerations in reaching my decision.

The judge has not ordered a reinstatement of funding for any BSF project; nor has he ordered me to pay compensation to any of the claimants. Instead, he concluded that I must give each of them an opportunity to make representations, and must review the decision, in so far as it affects the six authorities, with an open mind. I am happy to do so.

The judge has made it clear that the final decision on any given school or project still rests with me, and that I may save all, some, a few or none. He concluded by saying that no one should gain false hope from this decision. I am grateful to the judge for that direction, for the fair and careful manner in which he appraised the evidence and for his support for the Government on the substantive decisions that we took to repair the economic mess that we inherited”.

My Lords, that concludes the Statement.

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[Lord Hill of Oareford]

My Lords, I start by saying a word in response to the point made by the noble Baroness, Lady Jones of Whitchurch, on Labour’s record and its intent in the Building Schools for the Future programme to restore, rebuild and refurbish the school estate. I completely recognise that that was the intent and I think it is one that all parties share. Therefore, I have never knocked—if that is the right word—the intent behind Building Schools for the Future.

I spent much of the autumn talking to those in schools and local authorities and to MPs representing some of the areas where Building Schools for the Future projects have been stopped, as referred to by the noble Baroness. Much as they wanted their school building projects to go ahead, they all accepted that the way in which the scheme developed, silted up and accreted meant that it was a flawed process. Obviously, they all said that they would have liked their school building projects to go ahead but they did not seek to persuade me that the way in which the programme operated was perfect.

On the background to the decision taken by the Secretary of State—a point that is sometimes forgotten—I think I am right in saying that the previous Government themselves acknowledged, and said before the general election, that there would need to be capital cuts of some 50 per cent and that the education budget and building budget were not exempt from that reduction.

As for saying that my right honourable friend the Secretary of State has been reckless in his decision, I hope I made it clear in the Statement that the judge found that it was a rational decision, not a reckless one.

On the ruling that was handed down on Friday—I am sorry that the noble Baroness, Lady Jones of Whitchurch, was subjected to me fumbling my way through a media interview—I was trying to draw the distinction between the substantive points about whether it was a rules-based approach, a rational approach, and whether the Secretary of State had raised any false expectation in the minds of local authorities. On all those substantive points the judge found in the Secretary of State’s favour. However, on the procedural points, I did not seek to hide the fact that the judge very clearly found that the department needed to look again at consultation and the equalities impact assessment. We will approach the nature of that consultation with an open mind. Obviously we will need to work out how to carry that out in connection with the local authorities and the local communities to ensure that it is carried out properly. The judge was clear in his ruling that the Secretary of State should decide himself whether to remove himself from that process. The information that the department had on the whole Building Schools for the Future process and the decision that we took was all passed to the judge.

On the educational maintenance allowance, the noble Baroness, Lady Jones of Whitchurch, will know that we will bring forward proposals on how to move towards a more discretionary fund in the near future. In reaching the decision that we did, I completely understand that we caused schools, head teachers and local authorities a great deal of difficulty and concern. I cannot remember how many meetings I had with them over the summer but I had an awful lot. I told them all how much I regretted the difficulty that it caused them. I have apologised for the way in which the decision that we took has led to their hopes being stopped. I recognise the need for investment in building schools to continue. However, I do not apologise at all for the fundamental decision to stop the Building Schools for the Future programme, which was forced on the Government by the state of the deficit and the interest payments that are mounting up. As I have argued in this House before, interest payments each day of £120 million would allow us to build the best part of 10 new schools each day.

[Baroness Walmsley]

When the Secretary of State comes to do his consultation, as the High Court has required him to, what criteria will he use when reaching his further decision? What elements will be contained in that and what priorities will he give to each one? Will he be prepared to publish them?

[Lord Hill of Oareford]

The best answer I can give my noble friend is that I think the department needs to work out how best we can carry out the consultation. There are important issues to address of the sort that my noble friend raises. As we have not yet done that, as we had the ruling only on Friday, we need to ensure that the process is carried out in a proper and fair way with those six local authorities. I think it is best if the department reflects on that and then I can come back to my noble friend in due course.

[Lord Lloyd of Berwick]

I make it clear that I have not read the judgment, only the extracts which have appeared in the Written Ministerial Statement. Is it not apparent from the Ministerial Statement, at any rate, that there was not a complete failure to consult on the part of the Secretary of State? Indeed, he consulted 14 local authorities and 119 individual academies. He did not consult, of course, the six claimant authorities and that was a grave error. He should have done that. He has not exactly apologised for that but he will make it good by consulting them now with an open mind. Is that a fair way of looking at the situation?

[Lord Hill of Oareford]

I think that that is an extremely fair and probably more concise way of summarising the position than I was able to manage.

[Lord Grabiner]

I have two points for the Minister. First, is he telling the House that a decision has been taken not to appeal against that judgment? I could not tell that from the Statement. Secondly, some play is made in the Statement of the fact that no compensation order was made by the learned judge. My understanding is that that issue was not even before him, so it is entirely unsurprising that no such order was made. Can the Minister confirm whether that is the position?

[Lord Hill of Oareford]

I can certainly confirm that the department accepts the judge’s ruling. On the second point, I will have to check whether that was at issue.

[Lord Knight of Weymouth]

My Lords, the judge found that there was an abuse of power by the Secretary of State. Given the unrepentant tone of the Statement and the unrepentant nature of the Secretary of State in the other place in answering this Question earlier today, is it not important that the public believe that a fresh, objective look is taken at the circumstances of the six authorities? Is it not therefore right that the decision should be taken away from the Secretary of State—just as the decisions about Sky were taken from Vince Cable and given to Jeremy Hunt—and given to a Minister whom we all trust, such as the noble Lord?

[Lord Hill of Oareford]

I am most grateful to the noble Lord for his attempted hospital pass, which I decline to accept. The reason that I decline to accept it is that although, as I said, I have spoken to a large number of local authorities concerned over many months and will be happy to do so again, the judge makes clear in his ruling that in his view the decision as to what to do subsequent to the representations made by the six local authorities rightly rests with the Secretary of State.

[Lord Willis of Knaresborough]

My Lords, the essence of the judgment in the High Court is that the Secretary of State did not carry out appropriate consultation. What consultation has my noble friend had with local authorities about the top-slicing of capital budgets for academies and free schools? If he has not had legal advice on that matter, will he take it urgently to avoid going to court again?

[Lord Hill of Oareford]

I think that I am right in saying that that question should be directed to the DCLG, which is the responsible department, but I will follow up my noble friend's question.

[Baroness Morgan of Drefelin]

My Lords, I appreciate that the Minister had to respond to a number of questions from my noble friend Lady Jones on the Front Bench, but can he answer her question about publishing all the relevant information regarding the case of the local authorities and how much public money was spent on legal fees to advise the department on those proceedings? Can he answer more fully my noble friend Lord Knight’s question: what reassurance can the Government offer the public that a truly open mind will be brought to the second attempt to make the decisions according to due process?

[Lord Hill of Oareford]

It is clearly the case that an open mind will be brought to it. We have been told by the judge that it needs to be considered in an open way, and we would be extremely foolish if we did not listen to what the judge said to us.

On the first point made by the noble Baroness, Lady Morgan of Drefelin, about the publication of information, as I said, all that information was given to the judge and the court, so he had all that information in front of him when he reached the decision that he did.

[Lord Beecham]

My Lords, in reference to the question asked by the noble Lord, Lord Willis, will the Minister confirm that, despite the top-slicing to which the noble Lord referred, which amounts to £435 million over the next two years for new academies, the sum in the department’s own estimates is £75 million? Will he explain the difference between those two figures? In the circumstances, would he consider avoiding adding insult to injury to the six authorities and other authorities affected by the Building Schools for the Future programme by exempting them from that top-slicing?

[Lord Hill of Oareford]

My Lords, I do not think that I am able to add a huge amount to the answer I gave my noble friend on that point.

[Baroness Farrington of Ribbleton]

My Lords, would the Minister, who I thank for his courtesy and his careful responses, care to inform the House how much money is available for people setting up free schools and how, having due regard to equality issues, that money should not be put alongside the available capital when considering the needs of schools in these authorities?

[Lord Hill of Oareford]

I should like to provide some context in terms of scale. As I am sure the noble Baroness will know, this year, the amount of money made available for free schools is £50 million. The department’s capital budget in total this year is in excess of £7 billion, so the scale of the sum of money made available to the free schools when viewed in the whole is small. One of the points of the free-school policy is to find new ways to set up schools that are quicker and cheaper, and to look at things such as leasing and the different uses of school buildings in order that we can try to get schools open more quickly and more cheaply than in the past.

Free schools will, I hope, be a great success if we manage to get them open and delivered more quickly and cheaply. I hope that they will provide a good education for children in the same way as all maintained schools; that is, they will follow the admissions code and all the other things that I know the noble Baroness would be keen to see.

[Baroness Hughes of Stretford]

My Lords, will the Minister explain why the Secretary of State did not consult properly with every local authority in the first place? Given the fundamental criticism that the judge has made of the consultation process, will he confirm that there is an intention to consult properly, not just with the six which brought the case but with every local authority which was not consulted during the first stage of these decisions?

[Lord Hill of Oareford]

My Lords, I have two answers to those two questions. As regards the broader application of the ruling to other local authorities, the judge is clear that the ruling applies to those six local authorities, which are those which the Government will consult. The basic answer to the noble Baroness’s first question, which the judge accepts in his ruling, is that Governments, particularly after a change of Government or a general election, have every right to make decisions. Given the scale of the deficit, the Government felt that the overriding imperative was to make decisions quickly and that the longer the process was drawn out, the more money would be wasted and the more uncertainty caused.

[Lord Howarth of Newport]

My Lords, the Secretary of State has quarrelled not only with local authorities but also with architects. Can we hope that we will not hear a repeat of the diatribe he launched against architects at the Free Schools conference? It was a diatribe that was particularly ill judged, as he commented individually on my noble friend Lord Rogers. After all, it is widely accepted that the design of the Mossbourne Academy by my noble friend did contribute to the transformation of academic achievement there.

If the Secretary of State is turning over a new leaf in this regard, will he listen carefully to what has been said by Sunand Prasad, the former president of the Royal Institute of British Architects, who is not entirely opposed to the new approach that the Secretary of State wishes to adopt? He sees a place for templates, prefabricated parts and repeated designs, but has advised that you still have to take account of site, locality and context. Surely that is important in relation to the Government’s own aspirations for a new localism. Does he expect that people, within their localities, will take kindly to having designs centrally imposed upon them? Can we learn the lessons from the Building Schools for the Future programme? Can we also learn the lessons from the Australian experiment, which is rather more akin to the approach that the Government intend to adopt and which, although it has its limitations, has been partially successful? Finally, does he recognise that schools historically have been built as statements of civic and community values, and that if you impose central, standardised and banal designs of the kind epitomised across the country by Tesco and Dixon’s, whose representatives are advising the Secretary of State, then you will be falling short in your responsibilities?

[Lord Hill of Oareford]

I have rather a lot of sympathy with the thrust of the remarks made by the noble Lord. Through the James review, the Government are striving to achieve on the standardisation of design a sensible balance between as much standardisation—if that is the right word—or replication as is possible. That is because, in a time of limited resources, to design each school ab initio every time and not to learn the lessons from what has worked well in previous school buildings does not make sense, and neither does each time to incur a set of consultants’ fees, architects’ fees and all the rest of it. Our view is that there must be ways of getting greater standardisation, but at the same time I accept that part of gaining acceptance of a building involves including the people who will be concerned with running it—the head, the staff and the pupils—in the process. It is a matter of trying to find the balance between a common-sense approach to standardisation while also allowing some flexibility around local circumstances.

[Lord King of Bridgwater]

My Lords, does my noble friend recognise that the greatest disappointment was caused when new school projects were either cancelled or postponed? Indeed, two schools in my old constituency were seriously affected. Having said that and having heard a former Minister of education who was responsible for these matters in the previous Government claim that the current Minister is unrepentant, can I ask my noble friend what examination has been made of the fact that, as he referred to in his Statement, the previous Chancellor of the Exchequer recognised that the school building programme and expenditure on education could not be exempt from the cuts that the then Government knew would have to come? They were staring a very serious deficit in the face. Could an investigation be made into what warnings were given to schools in those circumstances? Were they told that it might not be possible to continue with the full programme in the recognition that they were approving projects for which there was no money?

[Lord Hill of Oareford]

I am afraid I have to agree with my noble friend Lord King of Bridgwater that that was indeed the case. I fear that it is part of a broader picture. I understand why the party opposite will, perfectly properly, question spending decisions and cuts that this Government are having to make but hope that they can see the reason we are having to make those decisions and cuts. I do not enjoy finding myself in the situation of going around the country having to turn down all kinds of applications for school capital. It is because we inherited a situation in which we had no capital.

[Lord Griffiths of Burry Port]

My Lords, first, I should express a possible conflict of interest as the vice-chairman of an educational foundation that underwrites two schools, or at least collaborates with the Government in that, in the East End of London. The Minister may remember that almost before he had drawn his first breath as a Minister, before the Recess last summer, I asked questions about the status of one of those schools in the borough of Tower Hamlets that had made a great deal of effort to get itself into the right position to have its Better Schools for the Future programme agreed. At that time, despite my asking him on two separate occasions, the Minister was not able to answer my questions because, as he honestly said—he is a man who always says what he honestly feels—he did not know the answer.

That was last summer. I expressed on that occasion anxiety that the foundation of which I am vice-chair had already incurred £5 million-worth of expenditure to acquire a piece of land and was incurring significant legal costs as it sought to process the application. Everything was on hold; everything went into abeyance; nobody knew what was happening through the autumn. We worked through the Christmas holidays with lawyers—our legal fees have now accumulated to nearly £500,000—and, just last week, I signed off an agreement with the London Borough of Tower Hamlets for it to hold £7.4 million on behalf of our trust against the day when, or if, the Government allow the £13 million that we still hope to get from the Building Schools for the Future programme because we were one of the schools that was in the end spared last summer.

Is the Minister able at this stage to enlighten me as to whether we can go ahead, because we still do not know? Will he agree that the word used of the BSF by the Government to describe it, inefficient, happens to be exactly the word that the trust of which I am vice-chair thinks applies to the Government to describe the way in which they have handled this matter?

--- Later in debate ---

[Lord Hill of Oareford]

I understand the frustration that the noble Lord feels and I accept the reproach if it has felt to him like a poor process. I am not able, I am afraid, to answer the specifics now, but I shall go back after this Statement and check what they are. I shall then follow up the matter with him as soon as I can.

[Baroness Armstrong of Hill Top]

We appreciate the way in which the Minister deals with this House, but will he accept that there was real feeling when the Secretary of State made his announcement because it was so precipitate, because it had not been consulted on and because it was so quick? He would not have saved any more money if he had taken another two or three weeks properly to consult and make sure that he knew what he was doing. The announcement sounded ideological to most people. Will he accept that the decision has had devastating effects on some schools that are well past their sell-by date and where children are being educated in conditions which are inadequate for an education in this country? What will the Government do to make sure that those children are able to have their schooling in adequate and decent buildings so that they can get a more-than-adequate education, particularly in the most vulnerable and deprived areas?

[Lord Hill of Oareford]

I do not accept that the decision taken by the Secretary of State for Education was ideological. No one takes any pleasure from having to stop investment in schools. As I hope I have said a number of times, it was something to which we felt impelled by the state of the finances with which we found ourselves. I accept what the noble Baroness said about the need for good places and I would very much want to be in a position where I had a larger capital pot to do more for schools. I hope that she might accept in turn that had the result of the general election been different and the Labour Party were in government it would have found itself in a similarly difficult situation, having to stop capital spending on schools. It had said before the election that there would need to be a 50 per cent cut in capital, and the then Secretary of State for Education was clear that the schools building programme and schools would not be exempt from that.