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Baroness Farrington of Ribbleton: My Lords, I must tell the noble Baroness that she is already two minutes over time and that there is very little free time available.

Baroness Sharp of Guildford: My Lords, I am very sorry. I thought I had twenty minutes. I beg the House's pardon.

The problem here is that we have school set against school, with each school claiming to have special status. That is not a satisfactory situation, and it is why I have asked this Question. As I indicated earlier, I wish to elicit from the Government a clear answer as to where they stand on the issue. How far do they back the initiative in relation to King's Manor of bringing in private contractors to run the school? Do they recognise the dangers that such a course may bring in setting school against school? Are the procedures and the criteria used by Surrey County Council, which are taken from EU procedures in judging such bids, satisfactory, or is there a need to develop separate criteria which give greater weight to community considerations?

7.48 p.m.

Lord Baker of Dorking: My Lords, I thank the noble Baroness for raising this issue. It gives us an opportunity to discuss an interesting matter, although I must say that I do not share her concerns and anxieties about it. I shall explain why in a moment.

My former constituency extended into parts of Guildford but did not include this school. I am, however, very familiar with Surrey Education Authority's policies. In relation to this school, it cannot be faulted for trying to correct it. It changed the name of the school and brought in a new team of people, as the noble Baroness will know, but still the school failed. The roll declined from 1,200 to about 350. It was the classic

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problem of a school sinking. Indeed, Surrey Education Authority, I believe under Lib-Lab control, recom- mended the closure of the school for a time but that was rescinded as the result of parental pressure. I am glad that that parental pressure succeeded.

I fundamentally disagree with the noble Baroness's argument that if one concentrates in a novel way on trying to improve a failing school one somehow disadvantages the other schools in the area. That was always the argument of the Liberal Party and the Labour Party--it has changed, I am glad to say--in opposing the creation of city technology colleges. I still believe that that position filters through the noble Baroness's view.

This school was failing and failing badly. It was the classic case of falling school rolls, which created further falls in school rolls. There was very little discipline and there was absenteeism. I prefer the word "absenteeism" to the word "truancy". The latter has an element of a lark about it, whereas absenteeism is a determination not to attend. There was a determination among many of those pupils not to attend that school or any other school. As a result, Ofsted decided upon special measures. The management of Surrey Education Authority was condemned.

Then they went out to tender. This was a very good initiative, and I entirely support the Government's attitude on this matter, they will be glad to hear. When they get education policy right, I am the first to praise it. Usually when they get it right, they follow policies that I introduced, but this is one they thought up by themselves, and I warmly welcome that as well.

When faced with a failing school, what can you do? You can either close it or you can try to make it better. There are very good examples in America of both those principles being applied. I remember one school in Spanish Harlem which had all the problems of King's Manor, but many times worse, where pupils had to be frisked as they entered the school in the morning, and there was even drug-dealing in the classrooms. A group of local people outside the local education board decided literally to close the school but to keep it as a building. Then it was refurbished and an entirely new team of people was brought in. They saved that school and made it a significant and successful school.

The important thing was that a break had to be made. I believe that a break had to be made in this particular school, and that it would not have been possible to save the school through Surrey Education Authority. The school is now very popular with the parents. That is something which the noble Baroness omitted to mention. They are 98 per cent behind this school. They had the presentation from the four bidders and they supported it. I am particularly pleased that Kingshurst is the school that has been given the task to save this school.

Kingshurst City Technology College was the first of the colleges that I announced in 1986. It was a failing school, and was in worse condition than King's Manor. It had a 17 per cent stay-on rate at the age of 16. The stay-on rate at Kingshurst today is now 90 per cent. Kingshurst is in a much worse catchment area than

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Guildford; it is an appalling catchment area. Forty per cent now go to university. In the old days not one of them ever thought of going to university. This has been a remarkable turn-round.

The noble Baroness mentioned that in Kingshurst 80 per cent get grades A to C in GCSE. They have one of the most successful turn-round teams that is now available to this school, and the noble Baroness should recognise that fact. I do not believe that the procedures that have led to the selection of Kingshurst were anything other than totally appropriate and correct. They were in accordance with the EU procedures, thus ensuring that the bidders had experience in turning round failing schools.

The philosophy behind city technology colleges was to place them in areas of acute social need. We never placed them in the leafy suburbs. We placed them in difficult areas because that is where the challenges were. We need to motivate youngsters to go to those colleges. The Labour Party opposed the concept at the time, but it has extended the 15 colleges to 300, and only a fortnight ago the Prime Minister and David Blunkett extended them to 800 specialist schools. I applaud and support that measure. That is the way forward. This discussion is part of that programme.

The noble Baroness used the word "privatisation" in the pejorative sense. As a Tory, I find nothing wrong with that word, but she is not addressing me; she is talking to other people to alarm them into thinking that somehow this school is being privatised. Fees will not be charged. It will still be supported by state money on exactly the same basis as other schools in Surrey, but it will raise more money from its own resources to plough back into the school. What is wrong with that? Although the noble Baroness says that this will be to the disadvantage of other schools in the area, it has been shown that, when there is a successful technology college, the other schools move up to the level of that performance. So there is not a "no-win" situation; there is a definite gain. I am therefore very pleased, on all those grounds, to support the Government's initiative.

The team still requires official approval from the Government. I hope that that approval will be forthcoming, because there are other failing schools--for example, the Regis School in Wolverhampton. There is a slightly different arrangement there. I suppose that the noble Baroness might call it privatisation, but it is a combination of another team with a local school pulling it round. There are many ways to achieve success.

The present Labour Government will be faced with even bigger problems because one local education authority has been designated as being unfit to provide education. The schools in Islington will have to be handed over to other agencies to run. Thank heavens! If Islington cannot provide education to the children of Islington and they are letting those children down, then other measures are needed. I welcome the fact that the Government recognise that situation. Other measures will mean new teams of people coming in, starting afresh. The whole thing is called A Fresh Start.

I do not share the anxieties of the noble Baroness. I believe that this is an interesting and exciting way forward. It creates a diversity. I thought we had won the

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argument that only the local education authority in the area should be the provider of education back in the 1980s when we provided choice and diversity in the form of grant-maintained schools, city technology colleges and proposed that grammar schools should be retained. There was a choice for parents. That is an effective way forward. If this school is successful, parents over the next two or three years will want their children to go to that school. That is the test. I am quite sure that that test will be fulfilled and that the school will be regenerated and become a star performer in Guildford.

7.55 p.m.

Lord Dearing: I am delighted that the noble Baroness has raised this issue since the decision by the Surrey County Council to contract the management of King's Manor, because others may wish to follow this precedent. It is helpful for noble Lords to look to the Government and invite the Government to consider the principles or the issues of principle that may be involved.

As is appropriate for someone who sits on the Cross Benches, I have no principles to argue in this matter. If a school has gone through a bad period, with continuing problems, I have no difficulty with a situation where the local authority invites tenders for the management of the school, and where the outcome appears to be the award of the tender to a group which includes a very successful city technology college. I have visited that college and met the head. I know that the results are remarkable and there is a very good chance that the children of Guildford will benefit under that kind of leadership and management contract.

I adopt a totally pragmatic approach to whatever course is most likely to benefit young people, rather than starting from a point where the school is managed directly by a governing body and local authority or by any other means.

It would be helpful for the Minister to reflect on the issues that may be at stake for some. The noble Baroness, Lady Sharp, wondered whether this decision would be to the detriment of the resources of other schools in the public sector. Apart from any initial funding that may be needed to correct what has gone wrong and to avoid this becoming a matter of acrimony between one set of schools and another, would it be a valid principle that, for that kind of education to that kind of standard, the basis of funding should be exactly the same for a school of this kind under new management as it would be had it continued under the direct aegis of the local authority?

Secondly, does the Minister consider it a valid principle that the governing body should always contain a substantial minority of local people or nominees of the local authority? Does he think that the application of that principle, at least for the next few years, should be limited to rescuing schools that are in difficulty? Does he consider that in any contract there should be provision for its cancellation if there is failure to perform in accordance with its terms? Does he agree that there should always be clear performance criteria

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against which managers can be held to account? Those are legitimate issues of public concern on which clarification would be helpful.

I wish to make a further point. I am glad to assure the House that, if the noble Baroness, Lady Sharp, took a extra few minutes, I shall sacrifice some of my own time. As this may be the first of several such processes, I counsel that the Government should take action to fund experience from the King's Manor initiative and from other such initiatives in regard to the procedures that are proper in such cases. Will the Government consider carefully the noble Baroness's points about not disabling local people from participating in the creation of groups to tender? It seems from her remarks that an ad hoc group such as this, without a track record and without assured funding, is disabled from participation. Do the Government consider it to be in the public interest to enable such bodies to tender and to be considered on merit?

Returning to the funding of experience, will the Government consider introducing measures, perhaps with the assistance of Ofsted, to fund the experience of contract negotiation, the terms of contract and the assessment of performance? As I said, I am not looking for direct assurances from the Minister on these matters this evening. However, I should be grateful if he would consider them and advise the House in due course.

8.2 p.m.

The Lord Bishop of Bradford: My Lords, I am grateful for the opportunity to contribute briefly to this debate. I take up the remarks of the noble Baroness, Lady Sharp, regarding the Church. There is a fine and growing collaboration between the diocese of Guildford and Surrey County Council. I understand that the diocese of Guildford thought very carefully indeed about asking to be allowed to take over the King's Manor school. But Guildford already has a thriving comprehensive school which has over 1,100 pupils. I believe that the bishop himself supported the consortium to which the noble Baroness referred. However, in this case the collaboration was not to be.

I make no comment whatsoever about the details of this case, other than to wish the school and its pupils and staff well. But I should like to underline the importance of collaboration between the local education authority and the Church in a diocese. In the diocese of Guildford, for example, three county schools have become church schools, including a comprehensive school some two years ago. The diocese has pioneered what it calls affiliated status whereby local authority schools which wish to have a closer connection with the Church in parish and diocese become affiliated schools and receive diocesan resources and diocesan in-service training.

I very much hope that the example of Surrey will be followed elsewhere. I am happy to say that in my own diocese of Bradford we are now to have two Church of England secondary schools for the first time, and we collaborate closely with the local authority. I hope that

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Her Majesty's Government will offer the strongest possible support to Church and local authority collaboration in the field of schooling and education.

8.4 p.m.

Lord Tope: My Lords, I, too, am grateful to my noble friend Lady Sharp of Guildford for introducing this important debate. What it has lacked in time and numbers has been made up in quality. We have heard distinguished speakers, including a former Secretary of State. The noble Lord, Lord Dearing, has many distinctions--one of which, noble Lords may not know, is as "official school opener" in the London Borough of Sutton. The noble Lord is regarded with considerable respect by all Members of this House. My only concern is that we are debating King's Manor school, and the debate is to be replied to by a Minister who has King's Heath school in his title, which has already caused some confusion in this debate. Perhaps we need to be clear about that.

My noble friend Lady Sharp was closely involved in the whole process involving King's Manor school. She spoke about it with considerable knowledge and eloquence. I am sure that the noble Lord, Lord Baker of Dorking, similarly has local knowledge. I claim none, save at second hand and a relatively close local knowledge.

I wish to concentrate on the second part of my noble friend's Question. It may well be that this is the first of a number of schools involved in such a process. Therefore it is important that the Government establish some guidelines. We need to think about the implications of any LEAs moving down this road. I say that without wishing to judge whether or not LEAs may wish to do so.

I say that, too, because I begin with what is the most important principle for Liberal Democrats; namely, democratic accountability. First and foremost, it is for the LEA to decide on which course to take, and then to be held properly accountable for what happens. We have a fierce belief in local democracy. We have deplored, and continue to deplore, the trend under both Conservative and Labour governments to diminish the power of democratically elected local councils. That view is shared on all sides of this House, if not by the entire House.

Therefore we begin by recognising fully the right of education authorities to take unusual and imaginative steps to solve problems that they may have, but on the clear understanding that the electorate also has the right to kick them out if and when it becomes clear that their policies have been disastrous. The two are indivisible.

What we object to is the intrusion of central government and outside agencies which unilaterally decide that they know better than the electorate what is best for people. It seems to us important, especially in regard to the governance of schools, that certain guidelines are followed by local and national government if democratic accountability and natural justice are to be preserved.

Turning first to natural justice, it does not seem reasonable for a local education authority--I do not suggest that it has happened in this particular case--to

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spend several years running down a particular school, not funding it properly, denying it capital improvements and so on, and arranging admission policies that guarantee it a poor intake, and then lambasting it in public as a failing school. I stress that I am making a general, not a particular, point, although it is very much what happened with the Ridings school in West Yorkshire. In our view that is not natural justice.

Another deplorable trend in the "devil take the hindmost" world of league tables is where a school is stigmatised because it has taken on more than its usual share of children with special needs, whether learning difficulties or emotional and behavioural problems. Far from being supported as centres of excellence with a mission to combat social exclusion, such schools cannot be attacked because they cannot produce results which compare, for instance, with selective schools. That is not natural justice either. A government who claimed--sincerely I am sure--in their Green Paper on special needs to support integration and social inclusion should be creating a very different climate. It seems at least possible that King's Manor School, Guildford, may have been unjustly treated in that kind of way. As my noble friend pointed out, in Hackney, Lambeth or in other inner city areas, it may not have been seen as a failing school, but it was in the Guildford context.

I want to return to the central issue for us which is democratic accountability. We have no difficulty with the principle of a democratically elected local authority contracting out some of its services; indeed, many authorities of all political complexions have long done so. We accept that in certain circumstances it might well be worth setting up a contract with a firm of private consultants to advise and oversee the management of a school or group of schools. However, we see it as quite crucial that elected councillors remain responsible. The contract needs to be set up in such a way that it is effectively way-staged so that at clearly identifiable points during the life of the contract the elected councillors can judge whether the private firm is coming up to scratch. There need to be penalty clauses and mechanisms for ending the contract early if things are not working out. The councillors need to be able to go back to the voters and say, "Because we hired this company these goals have been achieved". It may be that they have not been achieved. Then the voters can judge whether or not it has been a success. That needs to be set at the start and not invented part way through.

I now turn to the question of financial profit. It is our natural inclination on these Benches to prefer a co-operative and communitarian culture to that of the cut-throat free market. There is perhaps something uncomfortable--I put it no stronger--about making a profit out of running schools. In that spirit where a group other than the education authority itself is going to oversee the management of a school, we would ideally prefer to see the wider community to which the school belongs organising itself to take it on.

I come to the point which my noble friend made and which the noble Lord, Lord Dearing, took up. The community group that constituted itself in the hope of bidding for the King's Manor franchise, if I may call it that, was debarred from doing so, not least under EU

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regulations. That is a matter of considerable concern to us. It would certainly not suggest that a local community group should automatically get the franchise. It is a very important decision for any LEA in this matter to be as confident as it can be that any group, especially one that cannot have had previous experience, is capable of running such an important operation effectively. It is an important decision, but the LEA should be able to make it and the group concerned should not be debarred because of regulations set up for an entirely different purpose. I do not believe that the EU regulations were established on the basis of companies running schools. If the effect is to debar local communities from doing so, then that is a bad thing.

Where the use of a private firm is preferred for good reasons to the community model then the watch words have to be "value for money". If the parents, pupils and the wider community are getting a better service than they would otherwise have done, even private profit may be acceptable as long as democratic accountability remains. It is important, too, that the involvement of private companies and private finance does not prejudice the freedom of headteachers and staff to make the purchasing choices that they believe to be in the best educational interests of their pupils rather than in the best commercial interests of the promoters.

When the Minister responds I hope that he will be able to tell us a little more clearly just what the Government regard as acceptable guidelines for preserving both natural justice in particular schools and democratic accountability for both the management of schools and of their LEAs. I also hope that he will be in a position to say something about the effect of the EU regulations in this area. Finally, I hope that he can tell us how the needs and wishes of a school's wider adult community can be secured especially when either a private company or private finance is involved.

8.14 p.m.

Baroness Blatch: My Lords, I, too, am grateful to the noble Baroness, Lady Sharp, for giving us this opportunity. I come at this debate from a very different angle to that of the noble Baroness. My honourable friend in another place, Nicholas St. Aubyn, the Member for Guildford, has sought over many months clarification from Mr. Blunkett, the Secretary of State and Ms Estelle Morris, the Minister of State, of their attitude towards the King's Manor scheme involving the private sector. Therefore, it will be very welcome if tonight the Minister is able to offer a definitive view of the scheme.

I shall pose my questions at the outset to give the officials in the Box time to produce the answers, because I am usually accused of asking them at the end of my speeches. First, now that private sector involvement in schools is acceptable, what action is the department taking to simplify and clarify the tender process and its EU dimension? That is a question which has already been posed. Secondly, where are the regulations on partnerships between LEAs and local independent schools? The department promised a consultation draft earlier this year. Why has it not yet

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been written? The School Standards and Framework Act, which requires these arrangements to be regulated, came into force over a year ago.

Why did Mr. Blunkett take so long to reply to the letter from his shadow, Mr. David Willetts, MP? The letter was written on 16th October and it was not replied to until the middle of December. Even then it did not provide all the answers to the questions. Again, it seemed that the department was ducking each question on private sector involvement while this bid was proceeding.

Fourthly, does the department agree with Her Majesty's Inspector in his evidence to the House of Commons Education Select Sub-Committee on 10th February that private sector agencies such as 3Es in Guildford can help solve the problems of failing schools? Does it matter to the department whether the best agency for the job is a profit-making concern as long as it provides the best value? Why is it that EU rules for tendering do not apply, for example, to Hackney where services are being contracted out? What is the distinctive feature of the Surrey County Council scheme which makes it subject to EU rules? Will those rules be applied to the Islington LEA which, I understand, will be contracting out a very large proportion of its services?

The vision that Surrey County Council has for its schools, which I support, is to create an orderly school where best educational practice is followed in academic and pastoral care; to introduce a broad curriculum including opportunities for studying academic subjects; developing facilities for sport and for the performing arts; in addition, to evolve a vision of vocationally- oriented education where businesses can make links with their employees of the future. It seems to me that is followed in the technical college method.

The Liberal Democrats held the key positions in that authority. Indeed, they held the post of chairman from 1993 to 1997. They and their Labour colleagues were hostile, as we all know, to the King's Manor scheme from the very start. Since 1997 the DfEE has prevaricated and has as yet provided no definitive view about the scheme. The successful bidder, 3Es, is a charity whose proceeds are used to advance educational projects. The scheme was supported, as has already been said, by an overwhelming majority of parents in a ballot by a ratio of nine to one. I agree with my noble friend Lord Baker of Dorking that the principal of Kingshurst school and Stanley Goodchild, an ex-chief education officer, who were involved with the 3Es bid, both have excellent track records for turning around failing schools in a way that benefits all concerned.

I am really puzzled by a number of things that the noble Baroness said. I understand she said that closure was not an option. Closure was certainly contemplated by her colleagues. Taking children in from other schools was cited as a contributory factor for the problems of the school. There is hardly a secondary school in the land that does not have to take children in mid-year. We have a large military presence in my authority. The turnover of children in the course of a year is very high indeed. That is not an excuse for failing the children.

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My honourable friend Nicholas St. Aubyn was supportive of the GCET bid. It did not succeed. It was given every opportunity to make a firm proposal and worked very hard at it, but it could not produce a firm backer in the timescale provided. That was a key flaw. Certainly, my honourable friend the Member for Guildford still believes that there is a role for GCET and that it can perhaps become involved in an education action zone. I know that if it did so my honourable friend would support it.

However, progress cannot be made when the tendering mechanism of the European Union takes no account of the overwhelming popular support of parents. It seems that the EU mechanism is such that the contracts manager has more control over the process than the chief education officer. The EU tendering mechanism has also proved to be pretty expensive. The GCET bid by a group of churches had to raise £30,000 just to reach the first round along with eight others. That cannot be right.

There was a complete lack of guidance from the department. That is the subject of one of the key questions that I should like to put to the Minister this evening. The barrier of the EU regulations and the inertia of the department both stand in the way of genuinely innovative proposals to address the vexed issue of failing schools. There are now two choices in the hands of the department: to thwart or to liberate enterprising LEAs to turn around failing schools. Only the Government can clear the hurdles that have been erected by Brussels and Whitehall.

One of the problems is the tension between No. 10 and the department, which was well documented by the Sunday newspapers last December. It was reported that,

    "The Prime Minister and his supporters want the rules relaxed to meet complaints from the business community that they should be able to compete to run schools with local authorities on the same basis. Mr Blunkett, who is uneasy about private companies moving into the state system, is resisting the move".

I find the comments of the noble Lord, Lord Tope, very puzzling. One talks in ideological terms of "private companies". Private companies are making money out of schools. They provide pens, pencils, books and laboratory and other equipment; they build and repair it. Every company that is involved in all the activities that take place in a school makes a profit. What is so wrong about a flourishing business and commercial sector? I thought that that was the policy of the Government.

Andrew Povey, Surrey education chairman said:

    "Ministers from the Prime Minister down are sending out conflicting signals". He and his colleagues made the decision to propose the scheme only to be subjected to inordinate delay by the Secretary of State. Mr. Povey also went on to say that if Ministers did not clarify the position without further delay the whole drive to involve the private sector in turning round failing schools would founder. We seek specific answers to these questions from the department but according to Mr. Povey we do not get them.

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I hope that in the interests of the parents and children of King's Manor, who are overwhelmingly supportive of this scheme, the Minister can bring this matter to a successful conclusion. What the Minister says this evening will be critical to that process.

8.23 p.m.

Lord Hunt of Kings Heath: My Lords, first I welcome the opportunity to congratulate the noble Baroness, Lady Sharp, on initiating this important debate in your Lordships' House tonight. I also thank her for the helpful background that she provided to the debate. I acknowledge, as did the noble Lord, Lord Tope, that, although the number of speakers has been small none the less we have gathered an extremely distinguished list of speakers. Time is very limited and I shall attempt to answer as many of the points that have been raised as possible. I respond to the debate in the context of the need, which we all share, to raise standards overall in our schools but also in the context of the contribution that business and the private sector can make in partnership with those very schools.

I start by making it clear that our agenda for raising standards in education, which we believe is ambitious, means that we must work in partnership with local authorities, schools, parents, the local community and businesses to meet that challenge. It is worth recalling that business is already working with schools to raise standards in a raft of ways--for example, through work experience opportunities, work placement for teachers, mentoring, volunteering and the provision of professional advice. Education action zones create new partnerships that involve schools, businesses, LEAs and voluntary organisations. As the noble Lord, Lord Baker, pointed out, city technology colleges have close links with businesses. I am glad to acknowledge the work of Kingshurst CTC based in Birmingham.

In this context it is also right to acknowledge that the Government, in seeking to develop specialist schools, recognise that one of the most important components is the sponsorship that must be raised from business. That is an indication of the contribution of business. My understanding is that a considerable amount of money has already been raised through sponsorship in this area. Therefore, the context in which this debate takes place is the many opportunities for businesses to become involved in schools which benefit both partners. We greatly value this support in the drive to raise standards. Clearly, it is important to learn from the experiences that are gained and to build upon them.

It is against these broad examples that we must examine the actions taken by Surrey County Council in connection with King's Manor. I should make it clear at this stage that in talking about the actions taken by Surrey County Council I cannot in any sense give a government view on the proposals for closing and reopening the school which are now the subject of formal statutory proposals. If there are statutory objections, it will fall to the Secretary of State to determine those proposals. I cannot prejudge his decision, which will be taken in the light of all the facts then at his disposal.

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What Surrey proposes to do in relation to King's Manor represents a very particular type of private sector involvement for a particular purpose--to turn round a failing school. That point was acknowledged by the noble Lord, Lord Baker. We want local education authorities to take decisive action where schools fail, just as we shall take decisive action where LEAs fail to perform adequately. I believe that this is the answer to the point raised by the noble Lord, Lord Tope. We would not seek to take such action in relation to local education authorities, nor would we expect local education authorities to take decisive action where schools fail, if we were not convinced of the value of the role of those LEAs.

I believe that our determination to tackle under-achievement in schools has been demonstrated by the tough new procedures that we have introduced to ensure that failing schools are turned round, closed or given a fresh start. Equally, we welcome the innovative approaches that are being taken throughout the school system to tackle failure. This may include seeking help from the private sector, as Surrey has done, where in the view of the LEA this represents the best option for improving the quality of education for pupils. Surrey has chosen one way to tackle a previously intractable problem.

In answer to a number of points raised by noble Lords, I do not believe that at this stage there is a case for issuing general guidance about how LEAs should proceed in such cases, but some principles are very clear from the current law. The Secretary of State has already made clear that local authorities and governing bodies who involve the private sector in any respect must bear in mind three principles: first, the law does not allow them to abandon their responsibility to raise standards. They simply cannot hand over the running of a school to the private sector. Secondly, the choices that they make about how to carry out that responsibility must be motivated by the best interests of pupils. Thirdly, they must ensure that any expenditure represents best possible value for money. Public accountability demands no less.

Despite media reports, I stress that the proposals now up for consultation would not result in King's Manor being privatised. There is no question of a state school being run for profit by a private firm. That would not be legal. Governing bodies run schools and councils run local education authorities. The point is that governing bodies and education authorities can buy in outside help to offer advice or undertake specific functions on their behalf. In the case of King's Manor, Surrey has chosen to seek private sector help because it has not been able to prevent the school sliding into failure and is not confident that it can turn the school round without outside help. Therefore, 3Es will help the authority to improve existing school, establish a foundation to support the use of the school, appoint foundation governors and--if the proposals are approved--continue to provide support to the new school on the LEA's behalf.

The noble Baroness, Lady Sharp, made a point about the submission of the Guildford Community Education Trust, which involved the provision of charitable

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funding for the school over and above that received from Surrey County Council; a package of radical change that would differentiate the school from other secondary schools operating in Guildford; and the active support of the community and other local education providers. As the noble Baroness said, that bid was not shortlisted by Surrey County Council. The council required evidence of technical capability and financial standing but the bid from the GECT was considered not to meet those conditions. I recognise the disappointment felt by the noble Baroness over that decision but the trust has offered its support to the initiative in future. That is in the spirit of the partnership that the noble Baroness mentioned and I am sure that it will be heeded by the school and county council.

As to the bidding rules--which were raised by the noble Baronesses, Lady Blatch and Lady Sharp--European Union rules are designed to ensure open and fair tendering and LEAs are used to applying them. In the case of the interventions in LEAs, I say to the noble Baroness, Lady Blatch, that we have operated a tendering process in accordance with EU rules to establish framework contracts from which tenders can be invited at short notice. Both the law and good practice require contracts of that sort to meet procedures and ensure fairness and value for money. At the end of the day, they must be the crucial criteria.

I recognise the difficulties for a local community consortium in developing the necessary expertise. While it is unlikely that any ad hoc local grouping could contain within itself such expertise, it would be open to such a consortium to buy in the services of the relevant personnel, to show that it could address the challenges posed by the contract on offer. Ultimately, it must be right that the LEA is absolutely confident that any organisation to which it gives a contract is up to the task.

The noble Baroness, Lady Sharp, felt that the school's development in the way suggested would create an unlevel playing field for other Guildford schools. A number of points can be made. First, children at the existing school have been disadvantaged because of the failures there. Secondly, the proposals are focused on turning that situation around. They are aimed at ensuring a much higher quality of education for pupils who are not receiving it at the moment. Far from fearing that, turning the school around would act as a stimulus to other schools in the Guildford area. Surely we want to drive up standards in all schools and ensure that the choice on offer to parents and pupils in the Guildford area is between equally good schools.

I take note of the comments of the noble Lord, Lord Dearing, in relation to the need to secure best value from all investment of public funds. The continuing accountability of the LEA and governors for the expenditure should secure that and the public accountability that we regard as so important. Turning around failing schools often requires significant investment, and that would come whatever the particular status of the school and the circumstances in which it finds itself.

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The noble Lord also raised the question of governors. There will be LEA governors as well as teacher and parent governors--as for other aided schools. Local community involvement will be assured.

The noble Lords, Lord Tope and Lord Dearing, asked about the nature of the contract between the county council and 3Es. The contract is a matter for the county council but there should be no problem in making sure that the necessary performance criteria are in place; there are penalty clauses, if required; and there is monitoring of the contract.

I take very much to heart the point made by the noble Lord, Lord Dearing, about sharing experience. We shall certainly be happy to consider with the school and Ofsted the lessons that may be drawn from the process of improvement and applied to other schools. I thank the right reverend Prelate for his comments about partnership and collaboration between schools, Church schools and LEAs--with which I agree strongly.

As to the relationship between the DfEE and Surrey County Council, the department has no locus in the county council's current action, provided that it is within the law. We have always made clear to the LEA that we think it has proceeded in line with the law.

Time presses on, so I will conclude my remarks. I reiterate my welcome to the opportunity to debate this issue. I stress the context in which the matter is being decided, which is to address a serious problem in relation to King's Manor School. It is important to recognise the contribution that the private sector can make to help improve the existing school, advise on establishing a charitable foundation and provide support to the new school.

I make it clear that the governing body of such a new school, if established, would remain entirely responsible for all key decisions. That is a matter of law. The school budget will be under the control of the governors and must be spent in the best interests of the pupils. It is clear that we should all be keen to draw on the best expertise and new approaches, to tackle long-standing failure with swift and remedial action. The noble Baroness's Question is surely best considered in that context.

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