Academies Bill [HL]

My Lords, I shall speak to Amendments 7, 11, 15, 16 and 80 in this group. While not agreeing with everything that the noble Lord, Lord Hunt, has said, we share his admiration for the work that is done by further education colleges. Amendments 7 and 11 innocently seek to change "or" to "and" and "and" to "or", but they in fact raise one of central issues in the Bill; that is, the difference between an academy agreement and academy financial assistance. At present the only route to becoming an academy is by negotiating a detailed funding agreement which sets out the terms and conditions under which the academy is to operate. This Bill introduces a new route; namely, academy financial assistance granted under Section 14 of the Education Act 2002, which I think is the one that the noble Lord seeks to delete. In the guidance issued by the Department for Education to schools thinking about applying for academy status in response to the Secretary of State’s recent letter, it is clear that there are two distinct stages in the application. The first stage is submitting an application for approval to convert to an academy, having it checked over by the department and, if approved, receiving an academy order. Only after receiving an academy order can the school begin detailed negotiation over the funding agreement which becomes the academy agreement. This includes such things as negotiating the TUPE arrangements with the unions and leasing land transfer agreements with the LEA. There will be annexes dealing with such things as admissions, exclusions and SEN. Although the Minister has made it clear in the discussions we have already had that there is now a standard form of the funding agreement on which most funding agreements would be based, it is and will be an individually negotiated contract between the Secretary of State and the academy trust. In his letter of 18 June, the Minister made it clear that academies funded by the financial assistance route would not have a contract as such but would receive their funding through a grant letter from the Secretary of State. The provisions of that letter would be in line with those in the funding agreement, including commitments on admissions et cetera. There are however a number of questions still unanswered on which I would like to probe the Minister further. First, how far are the two routes exclusive? Is the second route under subsection (2)(b) essentially that by which the new free schools will be set up, whereas subsection (2)(a) is the route for the conversion of existing schools? Alternatively, is it envisaged that the new fast-track procedures for outstanding schools should use the financial assistance route because the flexibility this gives the Secretary of State means that negotiations can be concluded more quickly? Secondly, I turn to the issue addressed in Amendment 11. Might a school be partially funded by one method and topped up by another? The use of the word "and" in subsection (3)(a) is ambiguous and could imply that funding will be both by agreement and by grant, or does this deal exclusively with academy agreements? Where is the accountability in the financial assistance route when funding is given under Section 14 of the Education Act 2002? Does that not give the Secretary of State remarkably wide powers. A letter dated last Friday, 18 June to the Times from Peter Newsam, for example, suggested that whereas the academy agreements give schools the security of a seven-year agreement against arbitrary changes, Sections 14 and 16 of the 2002 Act give the Secretary of State almost unlimited powers to vary the terms of payment. What recourse, if any, would a school have against such arbitrary actions? I turn now to Amendments 15 and 16, the first of which is a probing amendment. The Government have committed themselves to ensuring that schools that become academies will get roughly the same level of funding as they would have got had they remained with their local authority, and in addition, because they are taking on additional levels of responsibility, they will receive their share of the money no longer required by local authorities to fulfil those responsibilities —but how much more, and is the additional amount of money reasonable and commensurate with the additional level of responsibility? When the grant-maintained schools were set up, little was known about school funding nationally; there was no experience of local management of schools to assess the amount of funding that grant-maintained schools should reasonably have. The then Department of Education veered on the side of generosity to grant-maintained schools which later, when more was known about the local managements of schools, seemed unreasonably generous. In addition, there are fears that when "outstanding" schools convert to academies, local authority moneys, a good part of which goes to fund SEN obligations, will be divided up on a per pupil basis. Because many of these schools have a relatively low proportion of SEN pupils, such an allocation would give them a disproportionate share of that money and leave a lesser amount in the local authority kitty to fund SEN needs. As the noble Lord said, we all share the Government’s wish that schools will not be excessively advantaged or disadvantaged if they choose the academy option. And in a time of limited resources, an advantage for academies will be a disadvantage for maintained schools, and vice versa. Requiring the Secretary of State through legislation to ensure equality of funding between maintained schools and academies is difficult. The purpose of these amendments, particularly through Amendment 15, is to make sure that the Secretary of State is advised publicly by a trusted independent body—the National Audit Office—on what is a reasonable level of funding for academies, taking account of what they do in comparison with local authority maintained schools. Amendment 16 requires that the NAO in turn consults the local schools forum, which is the mechanism by which currently such moneys are allocated. The Secretary of State is not handcuffed to follow NAO advice, nor is the NAO obliged to take the advice of the schools forum. Almost like an educational equivalent of the Office for Budget Responsibility, there will be advice from a respected body on what is a reasonable level of funding in comparison with other schools and that advice will take account of local circumstances. I turn finally to Amendment 80, which states: ""The Secretary of State shall by order specify the mandatory contents of an Academy arrangement"." This is a probing amendment aimed at clarifying those areas of academy arrangements that are mandatory rather than discretionary. Since the main aim of granting academy status is to give schools greater flexibility and therefore discretion over decisions which affect them, it is important to know where the red lines are drawn. Many of the other amendments in this group are seeking to limit that flexibility and ensure that academies fulfil their obligations in relation, for example, to SEN or on admissions. The purpose of this amendment is to ensure that, at the end of the day, the general public know precisely where an academy’s obligations begin and end.