Select Committee on Deregulation and Regulatory Reform Fourth Report

Necessary protection; rights and freedoms

  39. We do not anticipate that any aspect of this proposal would remove any necessary protection to any party affected by the current or proposed arrangements; nor prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue to exercise. There are, however, certain issues to which we wish to draw particular attention, and we do so in the following paragraphs.


  40. Firstly, two particular aspects of the current legislation which help to ensure the protection of VA governing bodies are unaffected by the proposals:

  • the provisions of the School Standards and Framework Act which direct that LEAs shall be liable for any capital work undertaken as a result of a direction by the Authority over the use of the school premises for non-school use will be retained;
  • the provisions of the School Standards and Framework Act which direct that the Secretary of State must give priority to paying grants which are needed to comply with section 542 of the Education Act 1996 in bringing VA school buildings up to a minimum standard, and that this grant shall be paid at the maximum rate (presently 85%, proposed 90%), will be retained (with the appropriate amendment).

The consultation document suggested that both these provisions might be repealed; but the Department has decided, in the light of responses to consultation, that they should be retained.

41. Secondly, we note that some concerns were expressed in consultation by VA schools, who were worried that the necessary funding for revenue work would not be passed on to them, in their "Fair Funding" budgets, by LEAs. The Department has issued guidance to LEAs in another context stressing that VA schools must be treated equitably; and that point will also be stressed in guidance to LEAs on revenue funding should this proposal take effect. The Department also plan to review operation of the new arrangements after they come into operation, at which point we would expect any concerns to be dealt with.[42]


  42. Concerns were also expressed by consultees about the potential insurance implications which might arise from the transfer of liabilities. The explanatory memorandum laid alongside the proposed Order noted that there is already scope for confusion in this area under current arrangements; and that the situation was to be clarified in the Education Bill. In the meantime, the Department was undertaking a study of the insurance arrangements, with a view to providing guidance on best practice.[43] We asked the Department to provide us with further information, and to confirm whether, and how, necessary protection was maintained in respect of insurance arrangements.

43. The Department's reply confirmed that, whilst there would indeed be implications for insurance arrangements as a result of the proposal, current arrangements are in any case the subject of some confusion. Officials were planning to meet representatives of LEAs to discuss the matter, but no final outcome had yet been determined.[44]

44. In view of the fact that current arrangements are already rather unsatisfactory, notwithstanding the proposal, and that the introduction of the proposal would not appear to make them any worse, we would not wish to delay the progress of the proposal on the basis that necessary protection is not maintained in respect of insurance arrangements. However, we expect to be kept informed on progress on resolving the issue, and would hope that a satisfactory resolution can be achieved before any draft Order returns to us for second­stage scrutiny.


  45. It could be argued that the current arrangements whereby payment of grant by the Secretary of State to VA governing bodies can only be made in respect of expenditure which has been incurred and paid for, rather than expenditure which is to be incurred, might be considered to offer some protection against fraudulent or erroneous claims. To the extent that this is the case, it was not clear to us how such protection was maintained. We asked the Department to clarify the point.[45]

46. Restating the benefits which this aspect of the proposal would bring for VA schools and the Dioceses and others who support them, the Department argued that it would be unfair not to implement this particular change. Nevertheless, it acknowledged that it would need to ensure that appropriate controls were in place, and informed us that it had asked its internal auditors for a view on what those controls might be.[46] That advice has not yet been made available to us. Once again, and in view of the undoubted benefits which this change would bring, we do not wish to delay progress on this proposal on the basis that it removes necessary protection. However, as with the insurance arrangements we discuss above, we would expect to receive assurances by the time any draft Order returns to us for second­stage scrutiny that all appropriate controls recommended by the Department's internal auditors would be put in place.


  47. Some concern was expressed by consultees that providing for a statutory definition of 'capital', rather than the prescriptive list of works which exists at present, could lead to disagreements between the relevant parties about whether particular works did or did not conform to the definition. As the explanatory memorandum notes, however, even the current list cannot possibly cover every eventuality, and it ought to be possible to reach agreement in any given case. Furthermore, protection against the possibility that the definition might turn out to be inappropriate or unworkable in practice would be maintained by the definition of this as a "subordinate provision", allowing Ministers to substitute an amended definition at a later date.

42   Explanatory memorandum, para 69. Back

43   ibid, para 81. Back

44   Appendix 2, page 40, para 4. Back

45   Appendix 1, para 5. Back

46   Appendix 2, 'Arrangements for claims and payments', para 3. Back

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