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Mr. Brady: I am pleased that the Government have taken some small steps to allay the fears that have been raised about the potential role of schools forums, although the Minister has not gone as far as we would wish. He spoke of the importance of collaboration and partnership between local education authorities and schools, but this is, in a sense, partnership by diktat. To move from a situation in which schools forums already operate perfectly successfully on a voluntary basis—as the Minister accepts—to one in which there is a statutory requirement to form and operate such forums, especially when there is a clearly recognised cost element to be borne, is to take a significant step.

If the Minister's interpretation of the Government amendments is accurate, and the role of the forums is to be purely advisory and consultative, it is even more surprising that we should need a measure to require their establishment. As the Minister knows, that was one of the principal bones of contention in another place. Less than a month ago, on 19 June, during an exchange on this issue in another place, the Minister, Baroness Ashton commented:

That led to a brief misunderstanding, in which some Members thought that she had said "purely advisory", and she was obliged to clarify her comment, saying:

The Minister's statement that the forums are now to be purely advisory bodies is, therefore, an interesting and useful development. It sits ill, however, with the statutory nature of the forums.

The Minister's statement also sits ill with his remarks a few moments ago about the importance of deregulation, which he says that he accepts. This is clearly a regulatory measure that will increase the bureaucracy imposed on schools and local education authorities. It carries a cost, which is required by law, and according to statute will be placed squarely on the local education authority. The Minister prays in aid the consultation that ended in May. He says that the consultation largely supported the establishment of statutory schools forums in that there was support for consultation between LEAs and schools. It is easy for schools and LEAs to engage in such consultation at present, if there is support for it.

It is not surprising that many Members in the other place and in this House fear that the Government have other intentions that perhaps go beyond the limited aims that the Minister has set out. He spoke about the context of these proposals in the light of the self-managing nature

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of our schools. He said that the role of the forums would be mainly consultative, and that although the consultation showed that there was support for a limited decision- making power, the Government's amendments do not proceed in that direction.

The Government made some welcome concessions on Third Reading in the other place. They were prepared to set back the date of implementation of the schools forums provisions from 31 October to 15 January 2003. They allowed LEAs more discretion on how the schools forums should be constituted, and accepted that forums would have to include governors and head teachers, but the balance would be at the LEA's discretion and the method of election would be locally determined. The minimum size would be raised, but there would be no maximum. There would be a requirement to ensure exact proportionality between school phases. The Learning and Skills Council would have only observer status. The maximum percentage of non-schools members would be reduced from 25 to 20 per cent., and would include elected members of the LEA.

Even with those changes and concessions in the other place, there is still a nub of concern about the nature of schools forums. The reassurances that were given on the size of the forums and the balance between the different phases of education implicitly accept that there is a danger that schools forums may in practice not represent the interests of all schools or all phases of education in an area. There may be some room for the balance to be tilted between different schools or phases of education.

Many schools forums already operate successfully on a voluntary basis, and the Minister cited some of them. The Government say that their education policy is about shifting away from one-size-fits-all provision, so it is ironic that schools forums are moving in the other direction towards such a policy, with a new arrangement being imposed on schools and LEAs.

We also concerned about the constitutional implications of this provision with regard to responsibility for LEA expenditure. There is a wider debate about the best mechanism for funding schools, how much money should go directly to schools, whether that should be done through a formula or in the spending review, as has been discussed once again today, or whether it should be done on a direct payment basis, which cannot be relied on in the long term. Although the Chancellor today spoke about a three-year period, that is hardly a hard and fast guarantee of a funding stream that can be relied on and that enables schools to plan accordingly.

It is felt that bodies are being established which, even if they have no decision-making powers, will be there to advise Ministers on a massive power that they are taking to control local authority expenditure. Again, responsibility for the expenditure will rest with local education authorities, but control over it is being shifted—in the small matter of funding for the forums themselves, but more significantly in the context of the proposals to ring-fence schools budgets.

By what mechanism, and in what circumstances, will funds be moved from one budget to another? How do Ministers intend to exercise their sweeping new power over local authority budgets? How will it be decided whether schools budgets are inadequate or sufficient? What procedures will be used to assess the recommendations and advice given by schools forums?

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They will be able to express concerns about the way in which money is disbursed, which will be passed to Ministers to interpret.

The massive central power that Ministers are taking is a thread that runs through the Bill. The forums could almost be seen as a cloak beneath which Ministers can hide their actions.

Rob Marris: I understand the hon. Gentleman's concern about the balance of power between local education authorities and Government here in Westminster. Would he care to tell the House how he would organise that balance, and how his party would like it to be struck between the centralisation that he sees as a thread running through the Bill and powers for LEAs? I am thinking about what was said earlier about local democracy by the right hon. Member for Wokingham (Mr. Redwood).

Mr. Brady: I should be delighted to do as the hon. Gentleman asks, but I fear that I cannot. He will probably not be surprised to learn that I feel very comfortable with the system of allowing schools the maximum resources, power, independence and freedom. I hope that, when we are in a position to consider the details of what we will say before the next general election, that view will feature strongly.

It should be noted that the Government are themselves engaged in a profound redefinition of what LEAs should do. I am not necessarily suggesting that the Government are being sneaky in any way, or trying to hide their true motives. A genuine debate is probably taking place in Government about the exact role of LEAs.

I was not taking a shorthand note, and I am sure that the Minister will forgive me if I misquote him slightly, but I think that when he appeared before the Select Committee recently, he made it very clear that LEAs should not be running schools—that their role should be strategic, and that they should take an overview. My hon. Friends and I feel comfortable with that. I suspect, however, that over the next couple of years the local education authority will become a very different animal from the one that we see today, or the one that we saw a year or two ago.

9 pm

There is certainly potential for movement in a certain direction. We heard today about direct payments to schools. We are trying to be consensual and non-partisan this evening, but we could comment that those payments may only just cover employers' national insurance contributions, and that they may be eaten up by the funding for Curriculum 2000, which never reached many schools. We should also bear in mind the shortage of funds currently experienced by many schools with sixth forms because of the Learning and Skills Council settlements. None the less, there is an increasing tendency towards direct payment in the form of a cheque submitted to the head, thereby bypassing the LEA. At the same time, through the Bill, the Government are assuming the power directly to squeeze the LEA side of the budget.

We have various concerns, which in part relate to the point that was rightly raised about the exact role of LEAs and of individual schools, and about the extent to which

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we are moving in a particular direction. The Minister might want to add something to that debate. However, there is also the real constitutional concern about the divergence between where the responsibility lies for control and expenditure of public money through the local authority, and the increasing shift towards taking decisions about how that money is spent elsewhere—notably, by Ministers in the Department for Education and Skills.

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