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Baroness Scott of Needham Market: My Lords, from these Benches we also offer our broad support for the aims of the order, as outlined by the Minister. However, that support is given very much on the basis that this process should be driven by the local education authorities themselves in the best interests of the people whom they serve and not in pursuit of ticking boxes on government forms or adhering to a raft of best-value performance indicators. I declare an interest as a member of a local education authority. I have been a county councillor in Suffolk for a decade.

I am sure that there will be many occasions when this order can be used usefully in order to respond to temporary circumstances as well to deliver the type of partnership and new arrangements for service delivery which the Minister has outlined. However, we also remain profoundly concerned about the accountability aspects of contracting out. Although we broadly welcome the assurances given by the Minister in terms of the strategic functions being retained by the LEAs, we nevertheless remain concerned that many of the issues which are contracted out should also be democratically accountable. At present, people who seek to challenge the system are faced with a minefield. If there is now to be an added layer for them to fight through, it will be very difficult for people to challenge decisions or simply to make their voice heard when they are not happy. With those caveats, we support the order.

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Lord Davies of Oldham: My Lords, I am grateful for the contributions to the debate from both Front Benches. It has been a particularly lively debate, even though it has taken place somewhat late in this part of the parliamentary Session. I appreciate the fact that support has been expressed on all sides for the concept of achieving best value. I accept straightforwardly that the noble Baroness, Lady Blatch, is right when she says that initial costs are bound to be involved in the drawing up of a contract and that a local authority would have to take account of those costs in working out whether it would obtain best value from the contract.

However, those initial costs might relate to a contract which would obtain over several years. Therefore, the assessment of the viability of the contract and the advisability of going forward with it would obviously have to take into account such costs. However, they might be reflected in the achievement of best value by the quality of the service that could be guaranteed from the contract. I want to emphasise—I believe that it was the subject of significant debate in the other place and has been reflected, in particular, in the contribution of the noble Baroness, Lady Blatch, today—that the question of best value must mean that built into the contract is a guarantee of the efficiency of the service.

As the noble Baroness indicated, it is possible that special provisions will need to be made in certain areas. In anticipating this debate, I did not doubt that the noble Baroness would refer to the case of a child with special educational needs. I know of the very keen interest that she has always taken in this area and of her expertise in the field. Of course, the contract which would be developed in such a situation would involve the LEA being liable if the contractor took a decision which the parent of a child disputed. Therefore, the structure of the contract would contain the necessary appeal procedure in order to guarantee that, where the parent justifiably felt aggrieved, the decision would have to be taken at the local education authority level. That would be consistent with the Bill which I recall debating with the noble Baroness a short while ago. During our discussions, we expressed concern about the issues of appeal procedures and the rights of parents who, inevitably in this area of educational provision for children, take the most keen interest and who need to be satisfied that the best possible service is being offered to their children.

With regard to one or two other areas, I shall write—

Baroness Blatch: My Lords, I am grateful to the noble Lord for giving way. I want to raise a point before he leaves the subject of special educational needs. My concern relates to the example that I gave where it is not incompetence or inefficiency that is being appealed against but the judgment made by a third-party contractor. If the tribunal considers only the process—in other words, if the process is immaculate and is not at fault in any way—then the local authority is exonerated from any responsibility. That leaves an aggrieved parent with no one to turn to.

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There is no process set down for the contractor to be accountable to the parent. As I understand the order, the LEA is accountable to the parent, but an unaccountable third party makes the decision. That leaves the parent of a child with special educational needs in a difficult position.

1 p.m.

Lord Davies of Oldham: My Lords, I understand the noble Baroness's anxiety, which needs to be relieved. As we have indicated, local authorities have a particular and obvious responsibility for policy relating to special educational needs. Any such contract would make it clear that the local authority took responsibility for the parent's appeal against the decision and the work carried out by the contractor. It would be a different kind of contract from that used for less significant and sensitive areas of education provision.

I recognise and accept that considerable care would need to be taken in the drawing up of contracts in that area and that there would be some initial cost. If local authorities did not feel that there was a contractor capable of providing better-value service, the service would remain with them.

The noble Baroness questioned whether a third party should provide a service, which she recognised as essential and proper for the local authority, and whether the third party would have a role to play. With regard to parental choice and—perhaps I may tread on this sensitive area—grammar school ballots, a third party could not necessarily be ruled out. Of course local authorities take responsibility for the ultimate decision on the provision of places and the admissions strategy in their area. However, I recall the noble Baroness's government ensuring in legislation that third parties were involved in ascertaining the democratic voice.

The industrial relations legislation indicated that ballots should be held under proper terms. In many cases they are carried out by a third party. The Electoral Reform Society has established a significant reputation for carrying out sensitive ballots. It may not be that particular body, but comparable bodies have the expertise to carry out the appropriate processes of ascertaining—under the direction of the local authority on what needs to be ascertained—the views of the people concerned. We could surely see a third party undertake that process without any direct implications for the value judgments eventually involved in the local authority's decision.

The process of electoral testing has not been the subject of great controversy in any of the sensitive areas of national life where third parties have played their part. However, I accept that this is a strategic issue for which the local authority is ultimately responsible.

Baroness Blatch: My Lords, I agree with the Minister that the Electoral Reform Society is greatly involved in that process. But what else relating to grammar school ballots could additionally be contracted out?

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Lord Davies of Oldham: My Lords, the order lists all the areas currently undertaken by local authorities where they may choose to employ a third party. There is no question about the decision being taken by the local authority. Following widespread consultation, we have sought with this order to create the greatest freedom for local authorities to make the choice. If in an area as sensitive as grammar school ballots—into which I seem, somewhat ill-advisedly, to have clambered—the intrusion of a third party might in some way be a derogation of the local authority's responsibility, local authorities are wise enough not to put themselves in jeopardy with regard to process. I believe I can reassure the noble Baroness on that matter.

The noble Baroness raised parental choice in general. Local authorities will set agreed admissions policies. The process by which parents express their choices could be provided by another competent body with the expertise to carry out a survey of parental choices. As we have made clear with regard to the legislation, local authorities are responsible for their admissions policies. The process of ascertaining a choice and defining the issue could be contracted out to those capable of ascertaining opinion.

The legislation draws a clear line between the strategic issues of principle, on which the noble Baroness and I are in agreement, which are the responsibility of democratically-elected local authorities, and the process through which the basis on which decisions are taken can be improved. In that sense, this is enabling legislation. Local authorities are under an obligation to achieve best value. Bearing in mind the reservations expressed by both noble Baronesses, if an authority is engaged in an exercise in which the process of drawing up the contract defeats the objective of getting better value for money, it will not act in that area. However, it is surely right that the order should maximise the opportunities and lead to democratically elected local authorities taking the decisions.

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The noble Baroness, Lady Blatch, drew a number of other detailed points to my attention. If I have omitted to cover them in sufficient detail, I shall write to her. I am grateful for the fact that both noble Baronesses have recognised the value behind the principles of the legislation. The noble Baroness, Lady Blatch, said that she would take the Government on trust. I shall not ask her for the timescale of that commitment—it is probably until our next debate. Under best value procedures we expect to be able to establish that the legislation works to the benefit of the people whom we serve and provides them with the best services that can be secured. If there are difficulties in that respect, the issues will have to be revisited, but in the meantime, I commend the order to the House.

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