Education and Adoption Bill

Lord Nash Excerpts

Tuesday 1st December 2015 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I apologise for missing the opening part of this discussion on Report. Amendment 1 in my name and that of my noble friend Lord Storey has a distinct purpose, which is one that I raised in Committee. Schools are a locally delivered service and that will not change, even with the implementation of the Government’s desire that all schools become academies. Consequently, once school-specific processes have been exhausted, parents tend to seek redress for their concerns about a particular school from a local body. Currently, parents see their local authority as that body. Already, in my experience as a local councillor, parents seeking to take a complaint about their local school to the next level turn to the council only to find, where it is an academy, that this is no longer within the remit of LAs.

The second reason for tabling this amendment is that schools are a major spender of public money. More than 50% of a local authority’s revenue spending is on schools. Where is the local accountability for that expenditure, especially as the number of academies increases and their diversity grows? Sadly, there have been a number of high-profile failures of financial governance in the academy sector, which includes some serious allegations of fraud, some of which have been proven; for instance, in schools in Bradford and County Durham. They are not the only ones. The Education Funding Agency has issued financial notices to improve on several academy chains, including the Academies Enterprise Trust, which was served with a notice only last year. Therefore there are already examples of the failure of local accountability to highlight issues of concern about public expenditure on something as important as education and schools.

Multi-academy trusts, which seem to be the current favoured way forward, are accountable only to the Education Funding Agency and the Secretary of State for their strategic and financial performance. Governance models in multi-academy trusts ensure that the sponsor or sponsoring body controls the trust. The strategic direction and decisions on the school’s budget are, crucially, in the hands of the directors of the trust and the trust members, who are self-appointed and accountable for their actions only via agreements signed with the Department for Education. In this model there is no accountability to the local community, which the academy and the academy trust serves, and no accountability to local parents for the investment in the education of their children. This amendment seeks to address some of those concerns.

In 2006, the Government established local authority health scrutiny committees. The scrutiny committees comprise both elected councillors and co-optees with relevant experience in the health sector. The purpose is to provide a public forum where local NHS bodies—hospital trusts or commissioning groups—can present policy changes which are discussed and are subject to questioning from the perspective of the local community. In other forums they are questioned as regards their financial position or their general direction—as regards trusts—from a clinical commissioning point of view. However, the local community has the opportunity through the scrutiny committee to raise issues of concern, such as access to the services that are going to be provided. In my experience, health scrutiny committees can add value by providing access to strategic leadership across the sector and by enabling generalised complaints and concerns about the service to be given a local and public hearing. I suggest that local education scrutiny committees would fill a vacuum by providing a process, based on this sort of model, to have a forum for discussing issues pertinent to the local community.

One of the keys to success in schools is harnessing the support of the local community they serve. The risk in the multi-academy trust model is that the schools become more remote from the communities they serve. I suggest that a successful multi-academy trust would welcome the opportunity of a public platform where it could demonstrate transparency in its decision-making and respond to questions from local people regarding performance. A scrutiny model would also enable the regional schools commissioner to report back via a local public forum. I hope that the Minister will be able to respond positively and constructively to this proposal. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, responding to the original remarks of the noble Lord, Lord Hunt, I am glad that he used the word “dissembled” over the question of the future of the academy programme and local authorities. I think that it is a better word than “dishonest”, which he used in Committee. I have made it absolutely clear on a number of occasions that the default position for a coasting school is not to become an academy. However, the Prime Minister has been clear that our ambition is that, in time, every school will have the opportunity to become an academy. Given that ambition, it is right that we look at how we might reform the role of local authorities in education, although there is no intention of taking them out of education totally. Obviously their role in school improvement will reduce as regional schools commissioners take more responsibility.

[Lord Hunt of Kings Heath]

I hear what the Minister says but what did the Chancellor mean by saying:

“We will make local authorities running schools a thing of the past”.—[Official Report, Commons, 25/11/15; col. 1370.]?

What does that mean in relation to what the noble Lord has said? He may not like my use of the words “dissembling” or “dishonest” but I come back to the core point. Is it the Government’s intention that, willy-nilly, all schools will be academies, as the Chancellor said last week?

[Lord Nash]

Perhaps the noble Lord will let me finish. In a situation at some stage in the future where all schools were academies, obviously local authorities would not be running schools. However, we certainly anticipate them continuing to have a role in the sufficiency duty, admissions, SEN and safeguarding. Perhaps I may make it absolutely clear that it is not about making every school an academy overnight at the stroke of a pen. That is not what we are after at all; we are about organising schools so that through academies and the multi-academy trust programme many more of them can, by working with each other, take advantage of the benefit of economies of scale efficiencies and deliver career enhancement, better CPD and leadership development. Given that ambition, it is right that we look at how we form the role of local authorities, as we have discussed.

The noble Baroness, Lady Pinnock, referred to financial irregularities in academies. I think that we have covered this before but I re-emphasise that academies are subject to far greater financial scrutiny than local authority maintained schools. They have to publish annual accounts which are audited by third-party accountants, something local authority maintained schools do not have to do. They are subject to the scrutiny of the EFA and the Charity Commission, and they are also subject to company law. I do not wish to make comparisons—

[Baroness Pinnock]

My Lords—

[Lord Nash]

Perhaps I may finish before the noble Baroness gets on her feet. I do not wish to make comparisons but a couple of years ago the Audit Commission found in, I believe, one year alone nearly 200 cases of financial irregularities in local authority maintained schools.

[Baroness Pinnock]

In response to the proposal that I made in Committee, the Minister said that academies’ accounts undergo greater audits than those of local authority maintained schools, but I suggest that that is probably not the case. I am the governor of a school in the local maintained sector. The school’s accounts are published as part of the local authority’s accounts, which are audited by a senior auditing company—KPMG in this case. Therefore, the internal and external audit of the accounts is carried out by the council’s own internal auditor and by external auditors. I am not suggesting that they are any better than the audited accounts of academies in terms of overall performance, and I think it is erroneous to suggest that one is better than the other.

[Lord Nash]

I am sure that anything the noble Baroness is involved in is very well scrutinised financially but, as a rule, all academies have their accounts audited but not all maintained schools do.

Turning to the subject that we are here today to discuss, I shall speak to Amendment 1 tabled by the noble Lord, Lord Storey, and the noble Baroness, Lady Pinnock. This proposed new clause would allow a local authority to establish a committee to review and scrutinise the provision of education in coasting schools where coasting schools make up more than 10% of the schools in the local area.

From our debate on a very similar amendment in Committee, I know that the noble Lords’ concerns are that, where a local authority has a number of coasting schools, the education provision in these schools is monitored and reviewed at a local level, with direct intervention happening where necessary.

I share the noble Lords’ desire to ensure that coasting schools are subject to robust oversight and intervention but, in the past, too many local authorities have made little use of their intervention powers, as we have discussed in earlier debates. The Bill now gives regional schools commissioners working on behalf of the Secretary of State the powers to work with and intervene in any school that is coasting. The Bill provides RSCs with additional intervention powers for maintained schools so that they can tackle schools directly that have been allowed to fail, or indeed coast, under the local authority’s watch. This means that all coasting schools will come under the scrutiny of the RSCs.

The revised Schools Causing Concern guidance, which is currently out for consultation, will set out what steps RSCs will take when schools in their area have been identified as coasting. Initially, the RSC will make contact with coasting schools in their area to identify whether the school has the capacity to improve sufficiently by itself. If the RSC deems that additional support or intervention is needed, there are a variety of intervention options, such as bringing in additional support from a national leader of education, temporary support from a local school or becoming a sponsored academy.

I emphasise that, throughout this process, no coasting school will go unchecked. RSCs will not wait until more than 10% of schools in a local authority have been notified that they are coasting before they start reviewing the education provision in these schools. The work of RSCs in relation to coasting schools will be continuous and thorough, with the aim of intervening swiftly where necessary. It is just not fair on the pupils in a coasting school to have to wait for an extraneous event, such as more than 10% of schools in their LA to be coasting, for support to take place.

RSCs are based in the regions that they serve, which means that they will make decisions on coasting schools based on their knowledge of the local area and with the input from their head teacher board. Head teacher board members are recruited from across the region and so bring local intelligence to RSC decision-making. I welcome the positive comments made today in Ofsted’s annual report about the appointment of RSCs as overseers of school performance.

RSCs are already successfully scrutinising academies in their region when they have concerns, and intervening where necessary. The proposed powers for them to do the same for maintained schools are an extension of this and they will be resourced up to enable them to do so.

RSCs are already working closely with local authorities, meeting them regularly to discuss schools of concern. Since their appointment, RSCs have been proactive in using their intervention powers in relation to academies and encouraging local authorities to do the same for maintained schools. We know that some local authorities have been positive about the introduction of RSCs, and have found that this partnership working can result in a joint understanding of local priorities, a new energy and an effective approach to tackling underperformance in their areas. In some areas we have seen a marked increase in local authorities issuing warning notices to their poorly performing schools.

Noble Lords will be aware that the Chancellor’s spending review speech restated the Government’s position on reforming the role of local authorities, as we have discussed. They will remain responsible for the maintained schools for which they are accountable, but the local authority role will, as I said, have to change in the light of the growing number of schools becoming academies. I therefore do not consider this amendment, which proposes additional responsibilities for local authorities in respect of non-maintained schools in their area, appropriate in that context.

I hope I have been able to reassure noble Lords that RSCs will be actively monitoring and reviewing all coasting schools, not just ones in areas where they are in bad company, and intervening when appropriate. I therefore urge the noble Lords to withdraw their amendment.

--- Later in debate ---

What is more important than speed for the children concerned is an appropriate family that will stick with them through thick and thin. The children placed in adoption are often not the easiest children to go into a new family. While I welcome the broad approach that the Bill describes, I hope that we will put more emphasis on finding the right family for the right child than on speed. Mistakes will be made if we put the speed of the adoption process first, as happened in the very sad case I came across.

[Lord Nash]

My Lords, I will speak to Amendments 2, 6 and 7, which aim to ensure that voluntary adoption agencies play an important role in the move to, and the future services provided by, regional adoption agencies. Broadly, the amendments in the names of the noble Lords, Lord Watson and Lord Hunt, and the Government’s intentions are in the same place.

First, I take this opportunity to again set out our commitment to the voluntary adoption agency sector. Its expertise and the services that it provides have already been central to the improvements we have seen in the adoption sector. We absolutely want this to continue. As I have previously told the House, these organisations have a central role to play in regionalisation, as referred to in the letter that my honourable friend the Minister of State for Children and Families recently sent to the chief executives of all VAAs, reiterating our commitment to their involvement.

Voluntary adoption agencies have knowledge and specialist skills that will be crucial in ensuring that the new regional agencies provide the high-quality services we expect to see. That is why all the projects we are funding this year include VAAs. We have also been clear with projects that VAAs should not simply be involved once decisions about the design of the new regional adoption agency are made. We have required all projects to commit to involving voluntary agencies in the early design phase of their work.

Amendment 2 would mean that local authorities and VAAs would jointly decide who should deliver the adoption functions on behalf of the local authorities being directed. I absolutely agree that it is important that VAAs have a role in any conversations about using the power introduced through the Bill, and I assure noble Lords that this will be the case. As I set out in our last debate, where the power is needed, decisions about its use will be made following extensive discussions with all those involved or affected, including VAAs. All relevant agencies will have the chance to comment on the proposal before a final decision is taken. In addition, the Adoption Leadership Board, of which the Consortium of Voluntary Adoption Agencies is a key member, will have an important role to play in shaping any decisions about regionalisation.

It would, however, be impractical and unbalanced to give a VAA joint decision-making power with the local authority in relation to the question of which agency should carry out the functions on the authority’s behalf. The local authority has statutory responsibility for delivering its functions. Although it is appropriate for the Secretary of State to make a decision, instead of a local authority, about who should carry out those functions in the limited circumstances where this proves necessary, it is not appropriate to give a VAA the power to make that kind of decision on behalf of a local authority or to veto a local authority’s proposed course of action. Instead, we need to use the mechanisms I outlined above to ensure that the views of VAAs are taken into account when decisions are made about how the power will be used.

Amendment 6 would allow the Bill to be used in relation to particular groups of children. This would enable the legislation to be used to make specific arrangements relating to hard-to-place groups of children. Over the last few years we have made significant strides to improve things for this section of children but there is a lot further to go. I completely agree with the motivation behind this amendment. We know that certain groups of children wait much longer for adoption than others. In 2014-15, hard-to-place children waited, on average, almost seven months longer for adoption than other children.

I am pleased to be able to clarify that subsection (5) of the clause is intended to enable it to be used in exactly this way. Subsection (5) enables a direction to be made in relation to certain categories of children. If, for example, arrangements between a group of local authorities are not working well enough for disabled children, this legislation could be used to direct those authorities to make different arrangements for them. This could, for example, include requiring local authorities to make arrangements for their family-finding functions in relation to those children to be undertaken by a specific, specialist VAA.

Finally, I turn to Amendment 7. When we discussed this issue previously, and again today, the noble Lord, Lord Watson, expressed his concern that VAA adopters would not be used by regional adoption agencies in the future because of financial considerations, and that this would lead to a continuation of the practice of sequential decision-making, which we are all keen to see end. First, I can clarify that VAA adopters do not represent a higher cost than adopters recruited by a local authority. A report by the University of Bristol in 2009 found that interagency fees were perceived as excessive by local authorities, despite the fact that they were found to be lower than what local authorities spend on placing children internally. It is crucial that we address this myth, as it is damaging to VAAs and drives the poor practice of sequential decision-making. I emphasise again that one of the key objectives of the policy is that each regional adoption agency will have a single pool of adopters. This is key to ensuring that swift, non-sequential matching decisions can be made. This is what we all want to see.

The local authorities and VAAs which make up a regional adoption agency will need to come to an agreement about which adopters are part of their central pool, and how the VAAs are remunerated for their investment in recruiting and approving adopters. The department is not prescribing the financial arrangements that will underpin new regional agencies, as we want to be led by what VAAs and local authorities think works. However, we are providing a comprehensive package of support to help local areas work through issues such as these, and come up with models which enable VAAs and local authorities to work together seamlessly and fairly.

Some regional adoption agencies may have the VAA partners doing all the adopter recruitment, given their skill and track record in this area. This would certainly be an interesting model. We will be working with VAAs and local authorities to develop fair and robust financial models which ensure that VAAs are not disadvantaged. However, I note the concerns of the noble Lord, Lord Watson, about the financial drivers in this. He raised a number of points that we want the sector not to be nervous about. I think that it would be helpful—if the noble Lord is willing to do this—if I organised a meeting with the noble Lord, the Consortium of Voluntary Adoption Agencies, Minister Timpson and officials, to discuss these issues in greater detail. I am glad to see that the noble Lord is nodding in agreement to that.

Finally, I remind noble Lords that regional adoption agencies will not be, and are not intended to be, entirely self-sufficient. There are, of course, some children for whom even a regional agency’s larger pool of adopters will not suffice, either because the child has particular needs or because the agency does not have an appropriate approved adopter ready at the point the child needs a match. Social workers in regional agencies will be expected to identify these children quickly and act promptly on their behalf by engaging with the national pool of adopters using national matching tools.

In view of my comments, I hope that the noble Lord will feel reassured and will withdraw the amendment.

[Lord Watson of Invergowrie]

I thank the Minister for that comprehensive reply, much of which I welcome. The noble Baroness, Lady Pinnock, commented on the Yorkshire pilot and the support for voluntary adoption agencies. Given the very sad episode that she related, I could not agree more that permanence has to be the aim when children are being placed. It is not just a question of finding a place fairly quickly but of finding one that both the child and the family have a good chance of making sustainable and, ultimately, permanent. That is what we are looking for. That is why I raised concerns about the Prime Minister’s comment that we should simply look to double the number. It is not a numbers game in that sense. I will raise this issue again in the next group of amendments, but I point out that Clause 13, on the terms of adoption, concerns only 5% of the children in care.

I was pleased to hear the Minister stress what he called the essential role of voluntary adoption agencies—those agencies will also be pleased to hear that—and that he foresees them having a role at the early design phase. That is what they are looking for. I do not doubt the Government’s will in this regard, and nor do the voluntary adoption agencies, but it is a question of how they intend to make it happen. This is a case of walking the walk and talking the talk, and doubts remain about how they will match the intention with the reality. Of course, it is not me, my colleagues or, indeed, the other opposition parties that the Minister needs to reassure on this point, but the CVAA and its member organisations. The CVAA was obviously centrally involved in the Adoption Leadership Board and those discussions can—and I am sure do—take place, but I simply reiterate that that the voluntary adoption agencies need that reassurance.

The Minister said that he agreed with the motivation behind Amendment 6. It is helpful to have his comments on the record that subsection (5)—if I am quoting him correctly—is designed to enable the measure to be used in the way the amendment suggests. That is useful and will be welcomed by organisations such as Barnardo’s, which has real concerns about harder-to-place children and the fact that the numbers are increasing and the resources to tackle that are at least in doubt, although the hope is that additional resources will be made available. The Minister may be able to reveal that in the near future.

I understand what the Minister is saying on the sequential decision-making issue but am slightly puzzled when he says that there is no difference in cost between voluntary adoption agencies and local authorities in this regard. He referred to the Bristol University study. I had not heard of that but, even more surprisingly, it seems to have eluded the Consortium of Voluntary Adoption Agencies, which is saying there are situations where local authorities may have—I will put it no more damagingly than this—a back-scratching operation whereby there might be a bit of a trade-off, such as the whole interagency fee not being required to be paid in certain situations or an understanding about some future arrangement between the two. Voluntary adoption agencies are effectively excluded from that. The new arrangements will certainly make that more difficult but they may not rule it out and that needs to be taken into account. I will look at the Bristol University survey and see what it says. I very much hope that that is the case but it may not be. Finally, I thank the Minister for the offer of a meeting and I would certainly be pleased to take that up.

--- Later in debate ---

[Lord Hunt of Kings Heath]

My Lords, I am sure that we will all be interested to hear from the noble Lord the answers to the noble Baroness’s questions, particularly his response to her suggestion that the money for the implementation of the education parts of the Bill will be top-sliced, presumably from money that would have gone through local authorities to maintained schools. I would be very interested to know the answer to that.

I am going to tempt fate by asking the Minister the same question again, referring to what the Chancellor of the Exchequer said about the education budget in the Autumn Statement and his announcement that all schools in the secondary sector will become academies. He said:

“We will make local authorities running schools a thing of the past, which will help us save around £600 million on the education services grant”.—[Official Report, Commons, 25/11/15; col. 1370.]

I would like to know how on earth that £600 million is going to be saved. Does he think that the £600 million used by local authorities is simply a waste of money? All those central services provided by local authorities are to be destroyed but presumably most maintained schools think they are pretty helpful. I assume that, when they all become academies, the schools will be given some element of the budget to make up for the services they would have received from local authorities.

Understanding education finances these days is a conundrum but I certainly hope that the Minister will clarify what exactly his right honourable friend the Chancellor of the Exchequer meant by what he said last week. Perhaps the answer to the noble Baroness’s question is that the finances are going to come directly from the money that would have gone to local authorities, which may be what she meant by top-slicing.

[Lord Nash]

My Lords, Amendment 8, tabled by the noble Lord, Lord Storey, and the noble Baroness, Lady Pinnock, requires that the Bill cannot be commenced until a report on funding the costs of the academy conversions resulting from the Bill has been laid before Parliament.

As noble Lords may recall, this amendment was also tabled during Grand Committee, when I agreed to say more on the outcome of the spending review in relation to the Bill. I hope the noble Baroness will be delighted to hear that I can now do so. I am pleased to say that, following the Chancellor’s Statement last week, total spending on education will increase in cash terms in this spending review period from £60 billion in 2015-16 to nearly £65 billion in 2020. The exact budget for the academy programme will be finally determined following our internal business planning process, now that we know the exact spending review settlement. But I would like to reassure the House that the Department for Education’s overall settlement clearly recognises the potential costs of academy conversions as a result of this Bill and has been very much part of the detailed conversations we have had with HMT. I hope that the noble Baroness is pleased to hear that.