Previous Section Back to Table of Contents Lords Hansard Home Page

Lord McIntosh of Haringey moved Amendment No. 61:

Page 104, line 31, after ("State") insert ("and to the Comptroller and Auditor General").

The noble Lord said: In moving this amendment, I shall also speak to Amendments Nos. 62, 62A and 257M.

Amendments Nos. 61 and 62 require education action fora to send their accounts to the National Audit Office and for the NAO to report on them to Parliament. It is important that the fora which run action zones are subject to financial scrutiny. That is why, as well as being sent to the Secretary of State, accounts should also be available to the Comptroller and Auditor General. In this way, reports on the use of funds in education action zones will be available to both Houses of Parliament.

Amendments Nos. 62 and 62A propose exempt charitable status for those education action fora. An important aspect of action zones is the partnership between the public and private sectors. We know from discussions that contributions from the private sector are more likely if the action fora are charitable. Increasingly, private sector contributions will improve the value for money of the programme. Action fora should be exempt charities, which means that they are free of some of the powers of the Charity Commission and the Charities Act 1993 because they are already accountable to the Secretary of State, and, through Amendments Nos. 61 and 62, already open to inspection by the National Audit Office. I beg to move.

Baroness Blatch: I wish to ask the noble Lord two questions. First, whether it is making money or making a profit, how does charitable status fit with a surplus being made from the fee that is paid for taking on an action zone? It is important to consider that point. Perhaps the noble Lord can throw a little more light on the technicality of how charitable status would work.

For example, as I understand it, there are bodies that are likely to be part of the partnerships that set up the action zones. But equally, the same bodies are likely to receive funds for providing services to the action zone. If they are already part of a consortium and are receiving funds from the consortium for providing services to the group of schools, will they receive money as though they were charities? How will that interrelate?

Lord McIntosh of Haringey: Exempt charities are outside the supervision of the Charity Commission because they are considered to be adequately supervised. But they are still subject to the legal rules generally applicable to charities and a few of the provisions of the Charities Act 1993. For example, they must meet certain accounting guidelines, but these are less stringent than we would expect from education action fora in any case. They do not have to be submitted to the Charity Commission.

19 May 1998 : Column 1592

The fiscal benefits of exempt charity status are the same as those for registered charities. They have relief from income tax, corporation tax and capital gains tax. They have exemption from inheritance tax and relief from business or non-domestic rates. They are not VAT-exempt as a class but some of their activities are.

That leads me to the second part of the noble Baroness's question. As she knows, many charities which are themselves unable to make a profit--and the education action fora will not be able to make a profit-- are able to have trading arms which are companies usually in charitable circles limited by guarantee. Alternatively, they are private companies to which the charities contract to perform a service for them as could, for example, the Prince's Trust. Those private companies can make surpluses on the fees they charge. I hope that that answers the questions put by the noble Baroness. I should be glad to go into more detail if she needs it.

Baroness Blatch: No, I am grateful to the noble Lord for that answer. However, if the companies are part of the consortium and provide services to it and they are allowed to make profits for the services they render to the consortium as members of it, they will be making profits from schools within the consortium.

Lord McIntosh of Haringey: Unfortunately the noble Lord, Lord Rix, has left the Chamber. He has been advising me on this matter and is a great expert on it as the Committee knows. As my noble friend Lady Blackstone said in response to an earlier discussion, what happens is that the trading part or private companies who are carrying out contracts on behalf of the fora can charge fees. Part of those fees can be a profit, but the fora, because they will be exempt charities, will not be able to make a profit.

Baroness Thomas of Walliswood: I understand the explanation which the noble Lord gave about charitable status. I welcomed the first two amendments. If I remember correctly, at Second Reading my noble friend Lord Tope referred to the desirability of involving the Auditor General. I am happy to see the two amendments.

I am much less happy about the charitable status element of the group for a much more general reason than the reasons given by the noble Baroness, Lady Blatch. It seems to me rather curious that in education some organisations have charitable status and some do not. Private schools have charitable status. I think I am correct in saying that grant-maintained schools have charitable status. I believe I am also correct in saying that in this Bill foundation schools, which are the successors to grant-maintained schools, will have charitable status. But ordinary maintained, about to be called community, schools do not. That is quite indefensible. Either all education establishments ought to have charitable status or none of them. I urge the Government to think carefully because the matter of

19 May 1998 : Column 1593

rates is important to large secondary schools. It is not a small amount of money in terms of the business rate paid by large secondary schools out of the funds given to them by local authorities.

Lord McIntosh of Haringey: The noble Baroness is tempting me way outside the scope of these amendments. They are about the charitable status of education action fora. If the noble Baroness wants to have a debate on charitable status for schools, let us have it at some decent time of day.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 62:

Page 104, line 39, at end insert--
("( ) The Comptroller and Auditor General shall examine, certify and report on each statement received by him in pursuance of this paragraph and shall lay copies of each statement and of his report before each House of Parliament.").

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 62A:

Page 105, line 11, at end insert--

("Charitable status

. An Education Action Forum shall be a charity which is an exempt charity for the purposes of the Charities Act 1993.").

On Question, amendment agreed to.

Schedule 1, as amended, agreed to.

12.30 a.m.

Clause 12 [Functions of Education Action Forum]:

[Amendments Nos. 63 and 64 not moved.]

Lord Skidelsky moved Amendment No. 64A:

Page 11, line 25, at end insert--
("(7) A Forum may lease out any school in its zone designated by the Chief Inspector for England as failing to an approved educational body on such terms and conditions as it may specify.
(8) A school leased out under subsection (7) above shall remain accountable to the Forum but shall not be subject to its direct management control.").

The noble Lord said: I am sorry to return to a subject we started two hours ago. We just have to continue with it.

The aim of Amendment No. 64A is to use the machinery of the forum which Clause 12 of the Bill sets up for a rather more flexible purpose than envisaged by the clause. I move the amendment in a constructive spirit. I would have moved exactly the same amendment had I been on the Benches opposite and I hope that the Minister--I do not know which Minister is to reply; perhaps I should say the ministerial zone--treats it no less sympathetically because I am here rather than there.

The amendment seeks to give effect to what I believe was the main idea behind the action zone concept; that is, to give the worst performing schools new leadership and fresh ideas. That is what Mr. Blair proposed in his

19 May 1998 : Column 1594

Ruskin College speech in December 1996 and somehow it has been lost in the complicated legislation before us tonight. I want to put it back.

Action zones are defined as clusters of schools up to around 20. Not all of those schools will be failing. No doubt the whole zone might benefit from what the Minister called improvements across the zone. That is not in dispute. But seriously failing schools may well require special treatment--often a different school ethos; often a different, special kind of stimulus for that specific school which might in turn light the way for other schools.

Mr. Stephen Byers talked about beacon schools. Schools such as those I am proposing might become beacon schools--beacons to others throughout the land--and the amendment is designed to make that possible. Why should not groups of teachers, parents or other educational bodies be allowed to bring their enthusiasm and energy to bear on the task of raising standards in schools which, year after year, defy the best efforts of local education authorities to do that? We know that that can happen.

We have heard of the spectacular successes of the charter schools. There are now 1,000 charter schools in the United States; it is the largest growing educational reform movement in that country. We have seen what can be done by dedicated groups of teachers in East Harlem. In all those cases, school district boards have been courageous enough to say to the proposing group, "We think your ideas are worth a try. Here are your targets. You have three to five years to achieve them. Get going." But that movement could not have got going with this legislation.

The trouble with the present legislation is that no educational trust, no groups of parents and no groups of teachers can ever get into the bidding system. They cannot apply for a charter to run an individual school as they can in the United States. I am appealing to the Government to be bold enough to allow a charter school movement to develop in this country out of the idea of the education action zone. There is a great deal to be said for studying how charter schools in the United States deal with the difficult problems of pay and conditions, which were raised earlier in our debates.

My amendment has roughly the same purpose as Amendment No. 49 moved by my noble friends Lady Blatch and Lord Pilkington, but with this difference, which I want to stress. My leased out schools will be inside the action zone forum framework set up by the Bill. The individual school will be in the zone and responsible to the forum. It would be the job of the forum to decide which of its schools to put out to tender and on the terms and conditions of the charter, if I may call it a charter. The school will be responsible to the forum for its results but it will not be managed by the forum. It will be the proposer's task, and the proposer's task alone, to make a success of the job, and the proposer will be accountable to the forum for results but

19 May 1998 : Column 1595

not for processes. I believe that this extra flexibility is needed to round out what is a valuable concept--that of the education zone--to make sure that the seeds which Ministers have talked about actually fall into fertile beds and not on stony ground. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page