School Finance (England) Regulations 2006

My Lords, I agree entirely with the noble Baroness on the point and I believe that this is a welcome professionalisation of the financial management of schools. Having dealt with the issue of school balances, I turn to school forums and their powers. There has been some misunderstanding in one respect. In no way do we seek to restrict the legitimate powers of local authorities. The decision-making powers for school forums as laid out in these regulations affect the discretion which currently resides with the Secretary of State in terms of variations in arrangements for school budget shares, issues such as the definition of the minimum funding guarantee, the central expenditure limit and the ability of local authorities to vire funding between the schools budget and the other important priorities referred to by the noble Baroness, Lady Walmsley. I know that she has in mind that the great evil in the education system is the Secretary of State and the Department for Education and Skills. In so far as that is indeed the case, we believe that this evil is being reduced by giving school forums additional powers which they can take on and operate in conjunction with local authorities. I should also stress that we are not talking about local authorities having to agree with school forums or schools on the retention of any funding for central services. It is funding only over and above those maximum levels prescribed in the regulations. We believe that the levels are quite generous because in recent years school funding and funding for central services have been rising substantially ahead of inflation. So we do not believe that this is an onerous burden. However, it is important that local authorities and schools are engaged in dialogue and that schools are properly represented with a strong voice so that they are able to discuss with their local authorities issues to do with the composition of central budgets where they go beyond a certain level. Schools have generally welcomed the role of school forums and are playing an increasingly active role in them. They see them as an important way of discussing with their local authorities the planning of services and a wider set of issues relating to the school system. When we produce the forthcoming education Bill, the school forums and the admissions forums, which operate in a similar way, will be strengthened so as to reflect the important role they play in representing the community of schools within an area in their discussions with local authorities. The noble Baroness, Lady Walmsley, said that turkeys do not vote for Christmas and that schools would not be prepared to see more funding retained centrally for services which take away from their budgets. In my experience of talking to head teachers and local authorities about these issues, in this case the turkeys are quite intelligent. They will not vote for self-mutilation, let alone extinction, and nor would one expect them to do so. However, they recognise that well-planned and properly funded central services are important, especially in the area she mentioned—that of excluded pupils and those whose needs are not adequately being met within schools. I happen to agree with her strongly that we need to provide much better support, including if necessary organised support at local authority level if not at the level of the school or group of schools, for pupils who are temporarily excluded from school well before we reach the current statutory requirement, which is that they are provided for after 15 days of exclusion. That is an incredibly long time for a pupil to be out of school with no properly organised provision. We announced in the White Paper that we would reduce that 15-day period to five days, which I assume the noble Baroness will support. That will have to be funded and we will ensure that provision is made for it. But where schools want to come together with their local authorities to make provision for less than five days, there is nothing whatever to stop them doing so. It is my belief that school forums provide much better discussion mechanisms between schools and will facilitate that, particularly in conjunction with the other important changes we have made. Those include the requirement that all schools should agree a proper protocol for the treatment of and provision for pupils who have been excluded so that all schools feel that they have a real responsibility for providing for such pupils; not, as has often been the case in the past, that a small minority of schools end up picking up these pupils once they have been excluded from other schools. So, taking all these factors into account, I do not believe that the incentives are all one way. With much-increased accountability requirements on schools for what happens to their pupils after they have been excluded; with a much more even spread of hard-to-place pupils across schools; and with much higher public expectations of what should be provided for excluded pupils, I believe that in that area as an example, we shall see greater collaboration between schools and a willingness to pool budgets to provide better for pupils than in the past. I hope that that deals with the main issues. A number of technical issues were also raised. I shall get back to the noble Baroness on music provision, which is as dear to my heart as to hers. As to prudential borrowing, I am assured that, despite the changes to the wording of the regulations, there is no change whatever to the prudential borrowing regime from that which applied before. As to pupils who leave school during the year and how this is dealt with, I am told that there is no change whatever in the treatment of excluded pupils in this respect; it remains a fundamental principle that funding follows the pupils. In conclusion, I simply reiterate the point on which I started. These regulations are intended to enshrine the Government’s commitment to multi-year budgets for schools; to set in place arrangements that will make it possible for those budgets to be delivered to schools; to give schools further stability in their budgetary arrangements; and to strengthen the role of schools forums in representing schools collectively in their discussions with local authorities on these important financial matters. On that basis, I commend the regulations to the House. On Question, Motion agreed to.