Mr. Timms: The hon. Gentleman said that he welcomes the idea of making LEAs more accountable to their schools, but that that is not possible. His perception is not shared by many schools. Schools generally will agree that it is helpful to increase the amount of consultation on financial matters. That is essentially the role that the forums will play.
Mr. Willis: Consult, yes.
Mr. Timms: Consultation will constitute most of the forums' activity, but there will also be decision-making powers in restricted matters. It will be possible for the Secretary of State to promulgate new regulations in the future to extend that list, but I should make it clear that it would not be possible under this primary legislation to make regulations to allow the forums to determine the size of a school's budget or its individual budget share. That was the hon. Gentleman's central concern in moving the amendment, although we have moved on to other concerns, and I hope that I have addressed that first one.
Mr. Andrew Turner: Will the Minister give way?
Mr. Timms: I have finished.
Mr. Turner: I wanted to ask the Minister—he may speak again—what he meant when he said that the forum will not be able to determine a school's individual budget share. We understand that forums will not be able to decide that one school should receive X pounds more or Y pounds less, because that would be determining a school's individual budget share. However, the adjustment of the value of elements in the formula, or the introduction of additional elements, may have the consequence of changing a school's individual budget share. We know from local authorities that they sometimes introduce new elements with the intention of changing a school's individual budget share. If the Minister speaks again, that is one point on which I hope he will be able to help us.
Column Number: 309Perhaps this is for a later debate, but the Minister has not responded to my point about the effective representation of different kinds of secondary school. A local authority may have a two-tier system in the bulk of its area but a three-tier system in places where the middle schools are deemed to be secondary schools. The majority of secondary schools may be 11–18, but some will be 8–13 or 13–18 middle schools that are deemed to be secondary. The proposed system will put them all in one pot and call them secondary schools. However, it would be possible for middle schools not to be represented in the forum, even though it would be entitled to make decisions that affected their funding.
Similarly, a local authority area could contain only a few schools with sixth forms—Hampshire is an example. It would be possible for all the secondary representatives on the forum to represent schools without sixth forms, because the only definition included in the draft regulations is ''secondary schools''. The Minister would agree that such a forum would not be representative, so would it have the right to take the decisions that he is proposing in the clause?
Mr. Timms: The hon. Gentleman asked whether the forum could take decisions about the formula that is used for determining a school's individual budget share. The answer is no, and I refer him to the wording of new subsection (4)(a), which makes it clear that we are debating
In other words, we are talking about which parts are or are not delegated. That is the context within which we are debating the amendment, so the forum does not and cannot have the wider powers that he is concerned about.
When we get to clause 41, we will further debate the membership of schools forums, but I will say now that we expect that sensible decisions will be made to ensure that schools are properly represented on the forums. The hon. Gentleman may have noted in the last set of papers circulated to the Committee that we will issue guidance on school forums, which will include points on membership. That should reassure him.
Mr. Willis: We have had a good debate, and the Minister satisfied one of our prime concerns. However, I think that he was just about to confirm that the cost of the exercise will come out of every school's budget. It will be a huge, bureaucratic exercise, and the costs will include providing meals for people at lunch times and travel and other expenses. The small primary school in north Yorkshire will have to find a share of that cost, whereas at present the LEA provides the service and pays for it from its retained element at no cost to the schools. The Minister shakes his head, but that is the reality.
At present, the cost of the consultative processes that local authorities carry out—according to the Audit Commission and Ofsted, 75 per cent. of schools say that they do it well—comes out of the authorities'
Column Number: 310retained share of the revenue support grant. Those costs will now be passed on. Sadly, Conservative Members do not see that as a major issue, but it is, so we will press the amendment to a vote.
Mr. Brady: The official Opposition have considerable reservations about the schools forum model, and not least about the funding for schools forums, to which the hon. Gentleman alluded. That is covered in a later amendment that I have tabled.
My initial reaction to the hon. Gentleman's amendment was that schools forums surely must have a function. I am slightly agnostic as to whether the amendment makes sense. However, having listened to his comments and to the intervention of my hon. Friend the Member for Isle of Wight, I do not think that the Minister has adequately explained why the provision is necessary. My hon. Friend asked about representation on the schools forums and possible imbalances between different types of schools, but the Minister did not clarify the point satisfactorily. Therefore, I am minded to urge my hon. Friends to support the hon. Member for Harrogate and Knaresborough if he presses the amendment to a vote.
Question put, That the amendment be made:—
The Committee divided: Ayes 5, Noes 10.
[Division No. 21]
Mr. Willis: I beg to move amendment No. 220, in page 25, line 23, leave out 'end of January' and insert '15th February'.
The Chairman: With this it will be convenient to take amendment No. 192, in page 25, line 23, after 'year', insert:
Mr. Willis: Having narrowly lost the argument on the previous amendment for the time being—we shall return to it on Report—I hope that I can persuade the Minister of the sense of this amendment. If he cannot accept it, I hope that he will at least think about it.
The amendment would leave out 'end of January', which is the current deadline set by the Government, and insert '15th February'. Although allowing an extra two weeks might not seem terribly important, I hope to persuade the Minister that it is. The amendment would bring the timetable required for the so-called reserved power into line with the existing DTLR timetable for setting local authority budgets, which seems to be a reasonable proposition. The amendment would also allow the schools budget to be set after variables such as the teachers pay award and revenue support grant settlement are known.
Column Number: 311One of the great bugbears for those of us who have been involved in local authorities, and for heads and governors of schools, is securing budget certainty as early as possible. I recognise that the present Government have tried hard to create certainty for schools, particularly in the three-year settlements. They have also recognised that schools need certainty about budgets in order to appoint staff and carry out initiatives. The amendment would provide a wonderful opportunity to enable some cross-departmental thinking on the setting of school budgets.
Local authorities are likely to have received their indicative RSG allocations before Christmas, and once they have, they undergo the traditional to-ing and fro-ing with the Department. Despite the Deputy Prime Minister's statement that no one would be listened to, that has not been the reality—thank goodness—and many local authorities, including my own, have made representations to the Department. This year, the Government accepted that there were some glaring errors in what was proposed, and local authorities eventually secured changes. It is not normally until mid-January that that process is completed. During that time there is a lot of to-ing and fro-ing as treasurers and elected members decide how to allocate the budget.
One of the most crucial tasks left to local government is the annual round of budgets, and hon. Members will know that a variation of about a quarter of 1 per cent. in one of the variables can make a significant difference in what is passed on to schools in their budget share. The teachers pay settlement is not known until the end of January or early February. I accept that that creates a difficulty: I would like the settlement to be resolved by the end of December of the previous year. It would be far more sensible to include the School Teachers Pay Review Board's recommendation—and the Government's reasons for supporting or denying its recommendation—in the final RSG so that everything could be wrapped up together.
Currently, the RSG is given and then there is some to-ing and fro-ing. After that, local authorities have to guess the outcome of the teachers' and the manual workers' pay settlement, although that has become slightly easier because of the single status agreement. At least a plethora of different organisations do not have to be managed at one time, but the situation is difficult and much of the information is not known until late January or early February.
It is nonsense to tell local authorities that they have a certain amount to spend and two weeks later to say, ''This is what the teachers' pay settlement will be. We have allocated 2.4 per cent for you, as last year, but we shall implement the teachers' pay settlement of 3.5 per cent.'' At that point, unless authorities have huge reserves to meet the additional pay settlement—schools often have greater reserves than the local authority, but I shall come to that later—they have to reduce the schools' budget share, which immediately affects schools.
Column Number: 312I have given two reasons why the Government should accept at least the spirit of the amendment, and I accept that they will need to think about it. The third element is the involvement of the Learning and Skills Council. Most hon. Members' postbags will be full of letters from heads of schools with sixth forms, who say that they were given a real-terms funding guarantee for two years in respect of the LSC, but that they are not getting it.
Some authorities spent less than the £2,600 that the LSC gives, and it is starting to claw back that money from schools to make up the deficit. They were allocated only what they were spending. Schools with additional numbers of sixth formers—particularly because 2000, not 2001, was the baseline figure—that were spending £3,400 or £3,500 now have only £2,600 to spend, which is the new learning and skills element. I do not want to get into that debate, but it is an important factor in the final allocation to schools. The LSC has announced that it will be 2003–04, which will be its first full year with all its costs under control when it will be able to take some decisions, before it will give schools their allocations and local authorities the amounts that are being clawed back. That is an unholy mess.
With the amendment, the Government have an opportunity, instead of creating a mythical date at the end of January that does not meet any of the other requirements, to set a date at the end point when all the information is available to local authorities so that they can provide a school's budget.
I accept that if we went down the road suggested by the hon. Member for Altrincham and Sale, West everything could be decided from Sanctuary house or the No. 10 policy unit, and money could be allocated quite easily. Fortunately, however, the Minister is a decent chap, and the Secretary of State is even more decent. They assured the north of England conference on Friday that that is not their intention and that local authorities will continue to play a pivotal role, and I was delighted to hear the Secretary of State say that. I therefore ask the Government to use this opportunity to do something that everyone is crying out for. Every head and local authority in the land would support them in providing a reasonable timetable. I am sure that the Minister has found my case compelling and will respond accordingly.
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