Chris Grayling: The amendments and the clause to which they relate are about a totally unnecessary addition to the responsibilities of schools and governing bodies. As hon. Members suggested, the Government last attempted to regulate the structure of governing bodies a short time ago. Thus, the response from governing bodies and their representatives to the new proposals has been, ''Not again.'' Why is it necessary to add yet another set of tasks to the agendas of governing bodies? The effect of the clause will be that governing bodies will, once again, have to work their way through the meaning of the changes and make adjustments accordingly. That is totally unnecessary. I have much sympathy for the amendment of the hon. Member for Harrogate and Knaresborough, which says that regulations are not appropriate.
Equally, there are glaring omissions from the stipulations. Amendment No. 176 refers to the absence of any mention of teaching staff. I have reached the inescapable conclusion that the Government are again making stipulations that will add no value whatever to our schools but will add to the work load and create confusion as governing bodies try to work out what changes they must make and how the new regulations affect their constitution. None of that helps solve the problems in classrooms.
The Ministers said that the Government are trying to deregulate. How can it be deregulatory to change the constitutions of governing bodies again and to provide yet another set of legal documents that governors must go through to decide whether they are doing the right or the wrong thing? Why is it necessary to provide more, not fewer, regulations? The measure states:
Why do we need more regulations? Do Ministers really not understand the challenges that face our schools, such as discipline in the classroom and excessive bureaucracy? How do the provisions address those two issues in any way?
Mr. Miliband: We have discussed the amendments for 40 minutes, but not once have we discussed the potential contribution that governing bodies, or even reforms to governing bodies, could make to higher standards. In the remaining minutes, will the hon. Gentleman address the possibility—
Mr. Willis: That would be out of order.
Mr. Miliband: It would not be out of order to address the possibility that changes to governing bodies could contribute to the Bill's overall purpose.
Chris Grayling: Were I to respond specifically to that intervention, Mr. Griffiths, I suspect that you would rule me out of order. Suffice it to say that the requirements of the new regulations will certainly make it more difficult for governing bodies to find time to devote to issues that relate to standards. That is why it is important to consider the amendments and ask whether we need to go through the process again for governing bodies. Have Ministers nothing better to do than to return to those bodies and say, ''Time for a change, guys. It's only been two years since the last change''? We should give them a chance.
Mr. Ivan Lewis: We have had an interesting debate, in which a number of important issues have been raised. On objectives, I do not think that there is a great difference between hon. Members on the ultimate composition of governing bodies. In addition, I see little point in going over the argument that we had about the balance between primary legislation and regulations. We have spent a long time on those issues, so I shall focus on the amendments and the clauses to which they relate.
It is important to clarify the comments of the hon. Member for Harrogate and Knaresborough on the private sector controlling a governing body.
Mr. Willis: It does at King's Manor.
Mr. Lewis: I shall come to that.
Under clause 18, there is provision for a maximum of two additional governors where the governing body has a financial or other sponsor, but I stress that they will not form the majority. As the hon. Member for Isle of Wight said, the only governing body constitution that provides for a majority is the voluntary aided model. For the reasons that he will know more about than us, King's Manor school in Surrey, which is run by 3E's, became a voluntary aided school. A private company did not control the school; its status as a voluntary aided school was the key to the governing body's composition, as the hon. Gentleman explained.
I have a question that the hon. Gentleman might like to answer later in the proceedings, although it is directly relevant to his declaration of an interest. I think that he referred to being a shareholder in a company that provides services to local education authorities. In the declaration of interests, he described himself as a registered shareholder in the Empire Packet Company Ltd. and referred to no other registerable shareholding. Is that the company that provides the services? That is the only shareholding that is declared in the Register of Members' Interests.
Mr. Willis: The Minister has asked a pertinent question that relates to whether someone with a shareholding in a company that could be a direct beneficiary of the Bill should serve on the Standing Committee that considers it. However, that is a matter for the hon. Member in question, not for me or the Minister.
I want to return the Minister to the thrust of his comments about governance and foundation governors. I accept the point, as I accept the point made by the hon. Member for Isle of Wight, although I suspect that he now wishes that he had not commented. Is the Minister saying that clause 1 would allow any governing body to become a foundation school and follow the innovation of King's Manor school—now King's college—in allowing a company, perhaps even that of the hon. Member for Isle of Wight, to take over and run the school?
The Chairman: The question was in the context of the constitution of the governing body.
Mr. Ivan Lewis: Thank you, Mr. Griffiths.
It would be unusual to believe that in most cases, companies would be attracted to creating a structure for a voluntary aided school. As the hon. Member for Harrogate and Knaresborough will know, profit-making establishments would be required to contribute 10 per cent. of the capital contribution. We do not believe that they are likely to go down that route.
The hon. Member for Isle of Wight may be involved in the next 3E's project, but the school in the previous project was a foundation, not voluntary aided school. No such majority exists anymore on the governing body of a foundation school. Only a voluntary aided school would guarantee a majority on the governing body, and it is highly unlikely that private companies, which have to make a profit, will want to make a 10 per cent. contribution to costs. The fact that 3E's has changed its approach demonstrates that.
Mr. Willis: I hope that you do not cut us off on this debate, Mr. Griffiths, because it is an incredibly important part of the Bill.
The Chairman: It is about the constitution.
Mr. Willis: It is about the constitution, but it is an important part of the whole Bill.
We must examine the other aspects of the Bill that impact on this part. Governance is only one element of what the Government are trying to do throughout the Bill. We should imagine a scenario in which Surrey county council encourages 3E's to take over all the schools in Guildford, and they all become voluntary aided. The company accepts that it will get 10 per cent. less capital, but, because every single penny of the revenue funding is still provided by the Government and taxpayer, that is the only loss. What would prevent it, under joint governance, from creating one governing body for all the schools, which is allowed in the legislation, and then saying that the company's objectives would be furthered by closing one school and developing the site for housing? As some sites in Guildford are incredibly valuable, that is how companies would make their profit. If I were a private sector company, I would examine all my assets and decide whether to dispose of them.
I am not raising the question for a point of debate, but for the reality of what the Government want to do with the legislation and whether a joint governing body, either through a foundation or voluntary aided status, could assume those powers and earn its money in that way. There are areas in the south-east in which huge killings could be made.
Mr. Ivan Lewis: The hon. Gentleman made a fair point. However, companies do not get 10 per cent. less; they get nothing without making a 10 per cent. contribution. It would seem unlikely that a private sector company, which would have to consider its profit-making responsibilities, would want to go down that road.
It was suggested that companies may dispose of land and buildings if they were part of a federated structure—for example, if they decided to close the school—but current legislation prevents their doing so. It would not allow them simply to take the land and buildings and dispose of them as the hon. Gentleman suggested.
Mr. Willis: If a company planned to close the school, sell it and invest a significant part of the proceeds in, for example, four schools in Guildford—I do not know how many there are—the proposal would go to the Secretary of State, who, given the current scenario, I think would not say no.
Mr. Lewis: The hon. Gentleman acknowledged that such a proposal would go to the Secretary of State. No Secretary of State representing this Government would regard it as a contribution to raising standards to flog off land and buildings simply to boost a company's profits. There must be a full consultation process and the company would have to show that its decisions were not about its profit-making interests but about raising standards. There are some circumstances in which a governing body, of any status, can show clearly that changing the status quo and closing a school will significantly raise standards and offer a better quality of education to pupils and, in the context of extended schools and policy development in the area, offer a wider and enhanced service to the community.
Whatever the structure of the governing body, the key is that it must be able to demonstrate that the rationale behind the decision was as I have outlined. The Secretary of State would seek explicit advice on whether it had been shown that such a proposal authentically and transparently led to an improvement in standards, which is what the power to innovate is all about. The hon. Member for Harrogate and Knaresborough must be aware of that safeguard. In a situation such as that described by the hon. Gentleman, in which an LEA took the route on a wholesale basis, which would ring alarm bells with some members of the Committee, it would require extremely close scrutiny to show that the measures taken by the governing body or a federation of governing bodies were objectively justifiable and contributed towards—
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