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Resolved in the negative, and amendment disagreed to accordingly.
During the conclusion of the Report stage in the summer I indicated that the statement being made that day by the Secretary of State for Education and Skills on education funding would include a proposal relevant to this Bill, involving a minor amendment to education legislation. I wrote subsequently to the noble Baronesses, Lady Hanham, Lady Hamwee and Lady Maddock, and to the noble Lord, Lord Hanningfield, explaining the Government's intention in more detail, and my letter was placed in the Library of the House. The amendment as now presented for consideration by your Lordships' House has since been extended, as I shall explain. Representatives of local education authorities and head teachers have also been consulted about the amendment over the summer.
The amendment is concerned with Sections 45A and 45B of the School Standards and Framework Act 1998, as amended by the Education Act 2002. Under those provisions, the Secretary of State for Education and Skills and the National Assembly for Wales have a reserve power to set a minimum schools budget for a local authority where the authority's proposed schools budget is considered inadequate in all the circumstances.
First, as advised in my letter, the amendments bring forward by one month to 31st December the schools budget deadline by which local education authorities in England are required to notify the Secretary of State for Education and Skills and their schools of their proposed schools budget for the following financial
Secondly, these amendments change the deadline by which the Secretary of State for Education and Skills or the National Assembly for Wales must give notice of their intention to use the reserve power, to 14 days from the schools budget deadline instead of 14 days from the date of each individual authority's notification of its proposed schools budget. That will ensure a common timetable for the consideration of all authorities' proposed schools budgets.
In short, it is a technical adjustment to the calendar for making the very important decisions on the large expenditureby both central and local governmentof the schools budget for this country. I beg to move.
Lord Hanningfield: My Lords, I thank the Minister for his comments. Unfortunately, I missed the first part of his speech. We have reservations about the timetable. All governmentsthere is no difference between Conservative and Labour governmentsoften give promises about the timetabling of announcements of the grant to local authorities. There have been many years when, for example, Parliament has closed for a week before the Queen's Speech in the middle of Novemberthat is very likely to happen so announcements for local government finance are made 10 days later than originally planned. I gather from officers of the Local Government Association that already there are discussions about the statistics used in making the grant announcements.
Given such factors, it could be early December before the announcement is madefor reasons that the Government might say they cannot control. It will then be impossible to deliver school budgets by the end of December. We all want to support schools as much as possible. But a 1 per cent increase in expenditure in local authorities means a 4 per cent rise in council tax. Most authorities are determined to do all they can to avoid increasing council tax. That might mean not being able to pass money to schools, because it depends on how the grant settlement works out. In Essex last year, council tax had to be increased by 5 per cent virtually to reach the target for schools alone. We are not prepared to do that again, so the schools budget will depend very much on the settlement.
There is also a technical problem as regards local authorities: their budget meetings do not take place until early February. Although they might indicate what they will give schools, they must decide the rest of the budget, and it will not become council policy until early February. Although there will be government indications of what they expect to give schools, it will not be a cast iron guarantee unless the Government expect all councils to change the dates of their total budget processes before Christmas.
We would like those issues clarified. What happens if the Government cannot give the grant settlement at the time that has been mentioned? What happens if the grant settlement means huge increases in council tax, which councils will not agree easily? What happens to legal procedures in councils when the final budget decisions are not taken by a full council until early February? I see that the Minister has been joined by a Minister from the education department and I would be grateful for some clarity about how the system will operate, especially if the Government cannot keep to the deadlines that they have announced.
The noble Lord, Lord Hanningfield, raised important points about the practicality of the policy, which I shall not repeat. We have always opposed this reserve power for the Secretary of State to intervene in the education budget. However, in the light of what the noble Lord, Lord Hanningfield, said, I acknowledge the additional time that local authorities will have to prepare their budgets. Perhaps the key issue is the one that has not been addressedwhether the Government will follow through on their assurance to give local authorities more guaranteed, longer-term funding and fewer year-to-year changes.
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