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Madam Deputy Speaker: It is most unfortunate that the terms of the answer to the hon. Gentleman's question

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were given in the other place in the way that he described yesterday, before the question had been answered in this House. As he has said, he received a holding answer to the question on 22 July and the Department is to reply fully today. The Minister concerned has written to the him. May I suggest that he leaves it at that?

Mr. Jonathan Sayeed (Mid-Bedfordshire): On a point of order, Madam Deputy Speaker. It has been reported in the press that a number of questions tabled by right hon. and hon. Members have been lost, mislaid or just not answered by Ministers. Will you inquire of the Government during the recess how many questions are outstanding and check that all those questions have been answered by the end of the recess?

Madam Deputy Speaker: I regret to inform the hon. Member that that is not a matter for the Chair. Perhaps hon. Members who have outstanding questions will pursue that with the Departments or the Table Office.

Mr. Simon Thomas (Ceredigion): On a point of order, Madam Deputy Speaker. May I draw your attention to the increasing practice of releasing unfortunate announcements on the last sitting day? There are 170 planted questions on the Order Paper today. One of them is the announcement of the loss of 400 jobs in the defence industry, including 100 at West Freugh in Scotland, 150 at Aberporth in my constituency, and the closure of Llanbedr in the constituency of my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd). The arrangement of the business has been such that we do not have a motion for the Adjournment of the House today under which we could raise the announcements that the Government like to release on the last sitting day. Is it in order to describe that arrangement of the business and the way in which that announcement—which will affect 150 of my constituents—has been made today as a despicable act?

Madam Deputy Speaker: I am afraid that the hon. Gentleman will be disappointed with my reply, because I must tell him that the practice is entirely in order.

Mr. David Rendel (Newbury): On a point of order, Madam Deputy Speaker. The Chancellor announced the outcome of the comprehensive spending review on Monday last week and I presumed that "comprehensive" meant that it covered the whole of Government spending. Following the statement, on Tuesday the Secretary of State for Education and Skills said next to nothing about

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spending on higher and further education. I tabled a written question for answer on Monday of this week asking how much spending was expected in the HE and FE sectors for the current year and next year according to the previous CSR, and for the next three years according to the new CSR. On Monday, the Secretary of State's answer was the standard one that she would reply as soon as possible. This afternoon, on our last sitting day, I received a further answer, which gives the figures according to the previous CSR, but says that figures for the present CSR will be announced later. Neither part of that answer can conceivably have been unknown to her when the answer was provided on Monday. Moreover, the actual figures that she says will be announced later must have been calculated long since. Is it acceptable for the Secretary of State to refuse to give out figures in response to a Member's written question simply because it would be embarrassing for her to do so at this stage and because she would rather hide them until a time of her choosing?

Madam Deputy Speaker: I am somewhat pleased to say that the content of answers from Ministers is not the responsibility of the Chair, but I note that the Secretary of State is in her place and has no doubt heard the hon. Gentleman's comments.


Domestic Combined Heat and Power (Reduction in Vat)

Alan Simpson, supported by Sir Sydney Chapman, Mr. Andrew Stunnell, Dr. Brian Iddon, Llew Smith, Sue Doughty, Dr. Ian Gibson, Mr. Simon Thomas, Mr. David Drew and Julia Drown, presented a Bill to reduce the rate of value added tax levied on domestic combined heat and power units and on the costs of their installation: And the same was read the First time; and ordered to be read a Second time on 14 November, and to be printed [Bill 192].


Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Local Government Finance

Question agreed to.

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Orders of the Day


Lords Reasons for insisting on certain of their amendments to which the Commons have disagreed, considered.

Clause 10

Powers of governing bodies to form or invest in companies to provide services etc

Lords Reason:
The Lords insist on their Amendment No. 12 and disagree to the Commons Amendment No 12A for the following Reason—
Because the provisions on the formation of companies are not good practice and have not been thought through.

5.49 pm

The Minister for School Standards (Mr. David Miliband): I beg to move, That this House insists on its disagreement to Lords Amendment No. 12 but proposes the following amendment (a) to the words restored to the Bill by that disagreement, in page 7, line 12, at end insert—

I am delighted to welcome back the shadow Attorney-General, in his new roving brief, to his now frequent place on the Front Bench in an education debate.

I first wish to put on record our regret at the unfortunate incident yesterday when the hon. Member for Altrincham and Sale, West (Mr. Brady) heard an answer to a question to which he had not yet received a reply. That was an administrative slip by the Department and we are sorry about it. I assure the hon. Gentleman and the House that no discourtesy was intended.

I shall now focus on the substance. We shall be disagreeing here, in the next hour, on one simple issue: whether we turn agreement in principle to support innovation, into practice. The issue is whether maintained schools should have the same freedoms to form and participate in companies devoted to educational purposes as private individuals, the private sector, independent schools and city technology colleges already do. This is a matter of freedom and of fairness. We often talk about both those areas; now we can legislate for them.

These clauses will put at the disposal of schools a convenient legal form to buy services at keener prices or sell goods and services to spread best practice, and the gainers will be pupils. The question is not whether there are any activities for which it is essential for schools to form companies, but whether the company structure can make it easier for schools to do so. The clear answer is that it can.

Companies enable groups of schools to establish a single legal identity, overcoming the problem of multiple contracts that would otherwise exist. They provide a vehicle for schools to share expertise with other schools; to benefit from economies of scale; and, crucially, to limit

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their liability. They are a trusted means by which some of our best schools can spread good practice and good ideas around the education system.

Labour Members believe that if schools think that it will be useful for them to form companies, they should be free to do so, subject to some important safeguards. They must not be compelled to, but they can.

Mr. Phil Willis (Harrogate and Knaresborough): Would the hon. Gentleman clarify for the House whether a company that is set up under the Government's proposals can trade outside the education world; in other words, can it sell services into the private sector?

Mr. Miliband: I am happy to answer that question. The matter was discussed at some length in the other place, where it was made absolutely clear that the purpose of setting up a schools company was to trade educational services if it was a service delivery company. If it was a purchasing company, obviously it would be purchasing services for the benefit of schools, but this is for educational purposes.

Mr. Willis: I am grateful to the hon. Gentleman because it is an important point. Would he regard, for instance, a grounds maintenance contract as such, and if so, would the company set up to offer a grounds maintenance service to a group of schools also be able to offer it to the local hospital, or to private residents?

Mr. Miliband: The potential for private companies to offer ground maintenance contracts already exists. The measure that we are discussing now would allow schools to do that. It would not allow them to offer such services to hospitals or to other bodies, as the hon. Gentleman said; this is about schools coming together to offer services, of a widely varied nature, to other schools. That is the point that we are making. I think that that is a clear answer to the hon. Gentleman.

Let me consider the four objections that have been raised in the nearly 10 hours of debate on these issues. The first objection is that these clauses might be a means by which the private sector could take over schools, but that completely ignores a fundamental point: there are clear restrictions on the role of any company in schools. The fact that a school may be a member of a company does not loosen these restrictions in any way, and where schools contract with companies, they work under the orders of the governing body.

For a very long time, governing bodies have had the power to contract out many things, such as catering or teacher supply. What they cannot do is relieve themselves of their duty to "conduct the school". The fundamental duty to run the school always remains with the governing body, which retains the overall responsibility for who works at the school. The school company clauses do not change that a bit. School companies will be able to supply services to schools in the way that private sector companies currently do—neither more nor less. Schools run schools. Private sector companies can currently help them. In future, if this legislation is passed, school companies will also be able to do so.

The second objection that has been raised is that in some way the existence of companies will increase the liabilities that the public sector might face. But that

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ignores the fundamental point that one of the main advantages of companies is the limitation of liability. If a group of schools conducts an activity as an unincorporated association, they face unlimited liability. If they incorporate as a limited company, they can limit that liability.

In that context, it has been said that the LEA will be liable for a company's debts. Let me address that point. That is true only of purchasing companies. The key point is that that is no different from the current position. LEAs are already liable for the purchasing decisions of schools. There will be no change—LEAs will remain liable for purchasing debts of schools, whether the schools purchase individually, or through a company as an intermediary. The only difference is that in purchasing with other schools through a company, a school can benefit from economies of scale to get better prices.

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