Mr. Willis: I almost entirely agree with the hon. Members for Altrincham and Sale, West and for Epsom and Ewell. We described the previous clause as bizarre, and this clause, too, is bizarre. I am sure that the Minister will realise on reflection that it has not been fully thought through.
I have several questions. Does the Minister envisage that the employment of teachers will continue to be with the local education authority or that, in the context of disapplication, schools will be able to take on the employment of individual teachers? The remarks about the cost to LEAs were right. For many years, Labour Members and I, particularly those of us who were involved with local government, found it unacceptable that each year the Government heaped new responsibilities on to local authorities, but did not give them the resources to meet them. I think that I strike a chord with Labour Members.
We are talking now about an open chequebook. Let us consider a large secondary school with 120 staff, all of whom have individual contracts under this arrangement. All those contracts have to be negotiated, and the Minister is saying that that is the LEA's responsibility. It had no say in the arrangements, but has to pick up the legal costs, pension costs, et al. The Minister must recognise that, because of current pension arrangements, which attract an automatic subsidy from the local authority, that would affect the budgets not only of schools but of local authorities in the area.
Has that cost been estimated? We understand that only 10 per cent. of schools will be involved initially, so that cuts the cost a little. Over time, however, far more schools will earn autonomy—perhaps a significant number. Has that cost been estimated? Does the Minister not find it somewhat bizarre—l>to use that word again—that if an LEA must pick up what could be a considerable bill, the only way in which it can find the money is to take money out of school budgets? The Minister shakes his head, but where else will the LEA get the money? Will there be another glorified pot of money that goes to a particular group of schools?
The reality is that if an LEA must find that money, it will take it from the budget for schools. That means that other schools will pay for the cost of the innovation. Why does the school itself not have to pick up the costs, if it, and its governors, want to go down the road of disapplication, and make arrangements—bizarre or not—on pay and conditions? Why must the LEA—and, therefore, other schools within the authority—meet those costs?
Mr. Timms: Several misunderstandings have arisen, and I shall try to address them. The matter is straightforward. There is not a problem with the drafting.
We have discussed the matter at length, and I regret that, as we also need to address in detail several further weighty matters. I wanted the Committee to sit again this evening: Labour Members made it clear that we would welcome that extra sitting, but the proposal was rejected by Opposition Members.
The phrase ''do anything necessary'' has prompted four amendments from Conservative Members, and three of them have been selected. As I mentioned to the hon. Member for Altrincham and Sale, West, Conservative Members have been free to explore a wide range of approaches to such matters. I welcome that, and I hope that it continues for many years.
We would not have debated the matter, if the clause had read:
A question therefore arises: why has the phrase ''do anything necessary to'' been inserted? It has been inserted because the LEA will not have to do anything in many cases—for example, if the exemption concerns the curriculum. We must allow for that by inserting those four words in paragraph (b).
The governing body of a school where earned autonomy applies will make decisions that take account of the school's resources. It will not be able to make decisions that involve spending money that is not in the school's budget. The schools budget will act as a constraint, and we have made that point.
Given that, there must be a related responsibility, with the LEA, to take account of the governor's power, and to ensure that the procedure's work smoothly. That will involve deciding whether the LEA should take action to ensure that the changes to teachers' contracts are implemented—for example, to ensure that they are paid in accordance with the provisions agreed by governors, in consultation with their teachers, and in accordance with the order issued by the Secretary of State, or the National Assembly of Wales. Changes to the payroll system will frequently have to be made.
Mr. Brady: The Minister has explained what the local authorities will not have to do, but the only example that he has given of what they would have to do related to the payroll. That is an interesting example. Schools would usually have a delegated budget. They would have freedom with regard to contracting. Therefore, they could use either the payroll services of the local authority or those provided by an outside contractor. Given that, any requirement with regard to payroll would be covered by the contractual requirements between the school and the provider—regardless of whether that was the LEA or a commercial provider. Therefore, so far, no justification has been given for the measure. I want the Minister to give concrete examples of what an LEA would have to do, which would not ordinarily be covered by contract.
Mr. Timms: There are many schools for which the LEA provides a payroll service, not on the basis of a contract, but as an extension of a long-standing arrangement. When that position obtains, the LEA must change the details on the payroll.
Chris Grayling rose—
Mr. Timms: I will give way in a moment, if we need to spend even more time on this matter.
Such changes may be necessary to give effect to the governing body's decision. As I have repeatedly made clear, that is within the constraints of the schools budget. It is not the case that LEAs will have to carry out an extreme or extraordinary task. We certainly do not want to enter into another lawyers charter about what constitutes ''reasonable action'' or the other forms of wording inserted. It is made clear that the LEA does not have the option to refuse to implement changes made or to refuse to pay teachers in accordance with what the governing body has decided, which may be a consequence of the amendment.
Chris Grayling: The Minister talks about lawyers charters, but the phrase ''do anything necessary'' is just as much of a lawyers charter as anything else. Will he address a practical example? Let us suppose that a teacher negotiates with his or her governing body an attractive performance-related package—he or she is paid less, but a bonus is paid on top for performance in exam results—and that package is not consistent or workable within the LEA's payroll software package. The package cannot cope with the pay model that the school has agreed. Is the LEA therefore required to spend a large amount of money on recommissioning its payroll software, so that it can deal with the new pay structure for that teacher?
Mr. Timms: I am not sure what age of computer system the hon. Gentleman is referring to. The LEA would indeed have to make whatever change was needed to its payroll system in order to make the slight change that he described. That would not be onerous for any payroll system in use in any LEA in the country.
On amendment No. 71, necessary action by the LEA clearly needs to be within the law. The school's budget share will be subject to the same requirements, and there is therefore no question that an LEA would have to pass on extra funds to a school. Given our lengthy discussion, I hope that the amendment will be withdrawn.
Mr. Willis: I asked the Minister why it was necessary to pass this responsibility to the LEA, and why should the school not take on those responsibilities, including payroll functions, under earned autonomy.
Sitting suspended for a Division in the House.
Mr. Timms: I was responding to an intervention from the hon. Member for Harrogate and Knaresborough. The position is that if the LEA is the employer, the legal obligation to provide a payroll service rests with the authority, although it is worth noting that nothing in this part of the Bill changes the employer. The LEA can delegate the payroll responsibility to a school, but that does not change the legal responsibility.
Mr. Willis: Payroll is not a big issue, and I agree with the Minister that any modern piece of software will be able to deal with it. The question is about the legal contracts. If a school varies those contracts, should it be responsible for drawing up the legal documents?
Mr. Timms: If a discussion between the school and teachers leads to changes in contracts, that will need to be determined locally. The school will have that responsibility, although that is not affected by this part of the Bill. As the hon. Gentleman said, the payroll issue is a minor issue, but it is an example of what may arise under the clause. The LEA has to put the steps in place to ensure that the governing body's wishes can be implemented. On the specific question of contracts, the answer is yes, schools will be responsible for drawing up the documentation.
Mr. Brady: I was a little concerned that the Minister may be padding out his replies somewhat, and I was wondering whether that was in the hope that the Government may obtain a majority in the Committee again before we move to a vote on the amendment.
Mr. Timms: I reassure the hon. Gentleman that I am anxious to make progress as rapidly as possible. I would be glad to be in Committee this evening to make further progress. The raft of interventions has concluded, and I shall resume my seat.
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