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Lord Skidelsky: My Lords, I am grateful to the Minister for her words and also for giving way. However, I was not of course talking about marginal cost pricing because that is not the way the state sector costs its pupils. We have a clear difference. The Government have predicted £100 million of savings in year three. The Institute of Fiscal Studies says that it will be £28 million. It has used a sophisticated methodology and seems to have relied on realistic assumptions. Which figure does the noble Baroness believe in? If the Institute of Fiscal Studies is correct, how will the gap in funding be met?

Baroness Blackstone: My Lords, I have made it absolutely clear that the Government believe that there will be savings of £100 million from the scheme. I have not seen the report of the Institute of Fiscal Studies but I shall certainly look at it to see what it has to say.

Last year there were 815,380 surplus school places in England. There was not a single LEA where the number of entry assisted places exceeded the number of surplus places within that LEA. Therefore every local education

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authority has the capacity to absorb the number of pupils no longer entering the assisted places scheme. There are about 10,000 new assisted places available each year. That represents only one-eighth of 1 per cent. of the school population. Most entry places--some 6,000 of them--are available at the age of 11, compared with half a million children transferring from state primary schools. That is fewer than two pupils for every secondary school in England. With over a year's notice, local education authorities have plenty of time to plan and make the appropriate arrangements. The comments that have been made by noble Lords opposite who have suggested that this will be terribly difficult are misconstrued.

Pupil projections underpinning the local government finance settlement for 1998-99 will make assumptions as in previous years about the size of the independent sector as a whole rather than for the assisted places scheme itself. Many assisted places scheme schools are predicting that they will have absolutely no difficulty filling their places with fee paying pupils. This leads us to conclude that overall it is unlikely that the phasing out of the scheme will have any major net effect on maintained sector provision. However, we shall keep the matter under review. For the present we do not believe that educating children who may otherwise have had assisted places will result in a significant additional burden on local education authorities.

Several speakers, including my noble friend Lady David, asked about the position of children in assisted places in primary schools. A number of noble Lords opposite were critical of our decision to cease support at the end of primary schooling. But that is the most sensible age for a child to transfer to the maintained sector. I do not accept that it is unreasonable to expect a child to change schools at the age of 11. Half a million children do so every year. Those who argue for a general extension of support through to the age of 13 do so on the ground that the scheme should provide the bridge until alternative sources of funding are available for them to complete private education through to age 18. I question whether those pupils are genuine candidates for support.

We are honouring commitments made in opposition. We never said that children in integral junior departments would keep their places through to age 13 or 18. Our commitment to those pupils is to the end of the primary phase of their education.

We also made clear that discretionary power to extend support beyond the age of 11 will be used flexibly and in a way that is sympathetic to the needs of individual pupils. For example, we indicated that we propose to exercise discretion in favour of all 10 year-old children who take up entry places at a secondary school. We take the view that although such children may be receiving primary education, they are attending a school which has an age range of 10 to 18, which is essentially a secondary school. Any pupil in a preparatory school going up to the age of 13 who had a clear promise--and I mean a clear promise or understanding--of having a place up to that age will have that place honoured. We shall use the discretionary power already in the Bill to extend places beyond the age of 11.

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The noble Lord, Lord Henley, and, I believe, the noble Lord, Lord Tope, asked about promises before the election to preparatory school children. We always made it clear that we would phase out the scheme over a seven-year period, and that is what we shall do. It would be quite wrong to continue to subsidise private education at the taxpayers' expense when no such promise or understanding has been given. I think that we would be letting down the electorate if we were to do so.

In answer to the noble Lord, Lord Tope, making blanket provision on the face of the Bill for places to continue to 13 is unnecessary. I regret to say that it would also be open to abuse. We intend instead to use the discretionary power which will enable the circumstances of each case to be checked. Each case will be considered carefully on its merits. In due course, we shall let the schools know in detail how that discretion will be exercised. That is the proper way to safeguard the public purse. It ensures that we put the consideration of what is best for the pupil--and that is what we are concerned about--ahead of the school's interest.

The noble Lord, Lord Henley, raised the question about middle schools. We have always said that we would exercise discretion in favour of children in areas with a later age of transfer to secondary schools. That we shall do.

A number of noble Lords raised the question of our attitude towards independent schools. The noble Lord, Lord Tope, mentioned the importance of building bridges between state and independent schools. Perhaps I may reassure him, the noble Lord, Lord Northbourne, and the right reverend Prelate, that there is no vendetta against the independent sector. Nor is there any intention of destroying the excellence of those schools. Indeed, the Government wish to promote excellence for the many children and not the few, as my noble friend Lady Lockwood pointed out. We already make a substantial contribution to the education of children with special needs in independent schools. We provide specialist provision in music and ballet which is not readily available in the state sector. We shall continue to do both those things.

However, we do not think that the scheme is a sensible way of promoting links. But I welcome proposals from the independent sector to build real bridges and forge substantial collaborative partnerships. We shall say something about that in the White Paper. The noble Lord, Lord Pilkington, is wrong to say that we have no interest in supporting bridge building of that kind. We most certainly do.

I am running out of time. Many other issues have been raised including questions by the noble Baroness, Lady Young, about value added. Perhaps I may say to the noble Baroness that I am afraid we disagree about the facts. I have read closely research undertaken by the London School of Economics. Our interpretation is that it does not bear out what the noble Baroness said. There is little value added for the bright children who transfer from the state schools

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to the independent schools under this scheme. These are able and talented pupils who would have done just as well, I am glad to say, in the state sector.

The noble Lord, Lord Northbourne, raised questions about boarding education. We accept that boarding can be valuable especially for children from very disrupted and disadvantaged homes. Questions were asked about whether abolishing the APS would narrow the intake to independent schools. Again I cannot accept the claims made by noble Lords who suggested that.

A number of my noble friends commented on the fact that the assisted places scheme has not entirely reached those for whom it was intended. I remind the noble Baroness, Lady Perry, that the scheme was not designed for the professional classes to whom she referred. It was designed to help poor children from low income homes. In my introductory speech I made it clear that although some children in that category have benefited more than half the children on the scheme are from higher income families or from middle class families. Some may be from middle class families who have fallen on hard times. Some are the children of divorced or separated parents from middle and upper middle class backgrounds where the income of the father is not taken into account. I do not think that that is an appropriate way of defining eligibility for the scheme.

I do not have time to answer all the questions raised. However, I conclude by picking up a point made by the noble Lord, Lord Pilkington. He made rather much of it. He suggested that there were wonderful modern language departments in independent schools. I have no doubt that he is right about that. But as someone who spent 19 years living in Stoke Newington, about which he made some rather derogatory remarks--

Lord Pilkington of Oxenford: My Lords, perhaps I may--

Baroness Blackstone: My Lords, perhaps I may finish. We are running out of time and I have given way on a number of occasions. Many schools in Stoke Newington are making a very good stab at teaching modern languages to state school pupils. What the noble Lord said was extremely unfair to teachers of modern languages in state schools. A modern foreign language is a compulsory subject in the national curriculum for secondary schools. The noble Lord should know better than to suggest that some state schools do not teach it. A number of state primary schools also make provision for early years French. I do not accept the central thrust of the noble Lord's argument. The state sector can provide for the able child, and offer the curricular breadth that he or she needs which is both stretching and relevant.

The right reverend Prelate said that there was no educational reason for phasing out the scheme. I beg to differ. This is about educational priorities. After all, that is what politics is often about. It is about defining our priorities. It is about trying to find a more sensible use of scarce resources. There are many calls on the education

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budget and many improvements that we want to make. The very limited educational benefits of this scheme simply do not justify the educational expenditure made on it.

I have tried to deal with the main points raised during the course of the debate. I look forward to further debate in Committee and during the remaining stages. The Bill honours a pledge to the electorate. I ask the House to give it a Second Reading.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

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