Mr. Stephen O'Brien: I shall speak to amendments Nos. 24, 25 and 59. Amendment No. 27 was submitted in due time, but was not selected. It might have been, were there not a typographical error on the amendment paper. The amendment, as I wrote it, stated:
That would have made sense. I am sorry to see that error, and that the amendment was not selected. I do not know what procedural opportunities may be open to me to table the amendment again, or whether you have the discretion, Mrs. Adams, to enable me to cover the point. May I have guidance?
The Chairman: It is reasonable for the hon. Gentleman to speak to amendment No. 27 as well, given the correction.
Mr. O'Brien: I am grateful, as it hangs together with the other amendments. I wanted to give the Minister notice that I was also speaking to that amendment, and I hope that he will give a happy and instinctive response.
It would help if the regulations already existed for us to study, but they do not. Amendment No. 24, which my hon. Friends and I tabled, follows on from amendment No. 97, which my hon. Friend the Member for Isle of Wight (Mr. Turner) discussed. However, they are mutually exclusive, in that my hon. Friend's amendment would leave out clause 11(1)(a), so that the LEA's consent would not necessarily be required. If the Minister is not minded to accept that amendment, I hope that he will find it reasonable and practical to accept amendment No. 24, which would amend the clause so that a local education authority could not unreasonably withhold its consent to a governing body of a maintained school exercising any power conferred by any of the subsections (1) to (4) of clause 10.
It could be argued that a local education authority would never-shock, horror-act unreasonably and that the amendment is therefore otiose. On the contrary, all hon. Members, irrespective of party affiliation, have witnessed-only, I hasten to add, outside our own constituencies-apparently extraordinary decision-making on the part of LEAs that would not pass Lord Denning's famous test of what the man on the Clapham omnibus would think reasonable. We must insist on trying to prevent such unreasonable decision-making, not just because it is wrong in itself-that would not be a strong argument for acceptance of an amendment-but because of the arguments that were made for previous amendments. Although those amendments were withdrawn, they have a major impact on unreasonable decision-making and time delay-factors that are at the heart of amendment No. 25-that could put some companies, particularly service provision companies, into a cash-flow crisis. That could be critical for children at a school in receipt of those services.
It is therefore important to demonstrate that no dogma will be attached to any of the decision-making. I would be extraordinarily surprised if any member of the Committee had not seen, at some time in their political experience, evidence of local decisions that are informed by dogma. Labour Members have often levelled that criticism at Conservative Members, and we have not infrequently levelled it at them. It is a fair point. LEAs could engage in deliberate stalling and be determined to prevent the mechanism. The Secretary of State seeks general powers to intervene, but such override powers can be politically inconvenient and dangerous; all the political responsibility would fall to him and no Secretary of State could say that his hands were clean.
Chris Grayling: My hon. Friend may not have noticed that there is a further intriguing dimension to this: under clause 12, the Secretary of State has the right to invest in any company that is to carry on such activities. That opens up the intriguing possibility of a school setting up a company, the Secretary of State agreeing to support it and the LEA deciding to veto or delay it to make it impossible to set up. That would obscure the dividing line between where responsibility starts and stops.
Mr. O'Brien: My hon. Friend makes a precise and valuable point. It is not light-hearted; it is deeply serious. If we do not accept the amendment, the only safeguard against dogmatic and unreasonable behaviour would be the exercise of power by the Secretary of State, which, in the nature of things, will not necessarily always be politically convenient. It may therefore affect the exercise of that decision and intervention.
Amendments Nos. 24, 25 and 59 apply to subsection (7):
Such a refusal may not be exercised unreasonably. All the amendments are consistent and are designed to inject a clear expectation that dogmatic, unreasonable behaviour will not influence decisions by local education authorities. One would patently expect that from the Secretary of State. I have not even bothered to pursue that, because any Secretary of State would seek to act reasonably.
Secretaries of State know that their decisions may be subjected to judicial review. That is equally the case when so much that flows from the Bill will be in secondary legislation. It is more difficult to seek a judicial review of decisions taken under secondary legislation. Because the power set out in clause 12 is under primary legislation, any decisions that follow are open to judicial review. A local education authority could be open to review through the ombudsman, and ultimately the courts, because the grounds for an application for judicial review would be clear: the reasonableness test would be applicable, and would have to be justified.
Without amendment, the Bill will be seriously deficient. It will become a hollow call to an entrepreneurial and exciting form of providing services and facilities for education. Although it may be a bumpy ride, it could be valuable if implemented correctly. However, dogma may get in the way, not making the Bill a mere damp squib, but deliberately undermining it. That would thwart the will of Parliament.
Mr. David Laws (Yeovil): I am pleased to take part in the debate in the absence of my hon. Friend the Member for Harrogate and Knaresborough, who will rejoin us in his robust way for this afternoon's exchanges.
The amendments are important, and I hope that the Government will accept several. I shall speak to amendment No. 56, which is designed to clarify the circumstances in which LEAs may be able to deny governing bodies the exercise of powers. We have already discussed amendments Nos. 97, 24, 25 and 59. I support the latter three, which create a sensible presumption that LEAs that deny governing bodies those powers should do so for good reason. I support the amendments tabled by the mainstream Conservative party, but I cannot go as far as the Isle of Wight branch in denying the LEA a role altogether.
The hon. Member for Isle of Wight raised two objections to the element that he seeks to delete. The first was that a specific LEA might have a political presumption against granting powers to a governing body. Amendments Nos. 24, 25 and 59 address that concern. The hon. Gentleman raised a legitimate point about the Government's intentions in restricting the powers, and I hope that amendment No. 56 will shed light on them. It is reasonable to give LEAs some power in circumstances where there may be serious doubt over whether schools and governing bodies can exercise those powers. I imagine that the number of cases would be small. It is reasonable to give LEAs the power to prevent governing bodies from entering into those arrangements for a period of time.
There is a strange anomaly in the Government's thinking. They seem relatively happy to give a great deal of flexibility to schools to set up such companies, yet at the same time they envisage that earned autonomy will be available to only about 10 per cent of schools. There seems to be a tension in the amount of power the Government are willing to allow individual schools to exercise.
Sharp-eyed members of the Committee will have noted that the wording of amendment No. 56 is not perfect in terms of what it seeks to replace, so I may not press it to a vote, but amendments Nos. 24, 25 and 59 are important and I hope that the Government will accept them.
Mr. Timms: The provision for regulations under clause 11 will restrict the circumstances where an LEA may refuse to give consent to a governing body applying to form or join a company. We intend that those regulations will go further than amendments Nos. 24 and 59, in that they will prescribe the circumstances in which consent can be refused. Both amendments refer to unreasonableness-that local education authorities are required in general law to act in a reasonable way. Because the regulations will prescribe the circumstances in which consent can be refused, the reasonableness points in amendments Nos. 24 and 50 will be covered.
In contrast to the views of the Isle of Wight branch of the Conservative party that the hon. Member for Yeovil (Mr. Laws) has just described-that local education authorities are best placed to make decisions on school membership of companies-amendment No. 97 would remove the need for schools to obtain consent from their local education authorities to join companies.
The hon. Member for Isle of Wight asked some entirely reasonable questions about the circumstances in which we would envisage LEAs being able to withhold their consent. There will inevitably sometimes be an element of judgment. It will not always be a question of meeting an objective test. There will be only limited circumstances in which the regulations will allow an LEA to refuse permission. We shall consult on them, as I have said. I envisage, as the hon. Gentleman suggested, that a weak or failing school would be one criterion; a second would be where the financial circumstances of the school are weak; and a third would be if the leadership of the school was weak. An LEA will not have to refuse in such circumstances. A weak school might sensibly join a company in order to gain the benefits of partnership with a stronger school. However, it would be appropriate to permit LEAs to refuse permission if any of those three circumstances prevailed. There is inevitably a measure of judgment, not in the first set of circumstances to which the hon. Gentleman referred, but in the other two, where the judgment necessitates obtaining permission.
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