Academies Bill [Lords]

As I mentioned earlier, clauses 7 and 8 are significant elements of the Bill; they change dramatically the current situation on the transfer of school surpluses and property. It is worth reiterating the point that I made about clause 7. Clause 7(2) requires that when the Secretary of State approves a maintained school's application to become an academy,"““The local authority must determine…whether, immediately before the conversion date, the school has a surplus, and…if so, the amount of that surplus.””" Under clause 7(3), once that is done the local authority must pay the surplus over to the proprietor of the academy. As I said earlier, that represents a fundamental change to the current landscape, as at the moment surpluses of closing schools remain with the local authority. That includes cases in which an existing school is closed to become an academy. A school might have built up a surplus for many reasons. Shared facilities might generate an income, for example, or a local authority or other party might have provided additional funding for work in the community and the maintained school might have been encouraged to build up a surplus to ensure that the new community facility could be built or established. That has certainly happened in my constituency, and I am sure that it has happened in other Members' as well. In Hartlepool, a sports centre has been built on the estate of a particular school, through increased funding from various sources and surpluses held by that school. The understanding is that it will be used by other schools and by community groups. Under the terms of the Bill as it stands, in such a situation the surplus would be transferred to the new academy, and any benefit to the wider community that was originally envisaged—the original purpose of the surpluses—would be lost. What reassurances can the Minister give to ensure that that does not happen? What is the Minister doing to stop a situation in which, somewhat late in the process, a school that has built up surpluses and is anticipating the building of a new community or shared facility on its estate, following negotiations with the local authority, then decides to convert to an academy? That could happen without real consultation, but the school would hold on to those surpluses. The issue comes back to unilateral decisions that fail to take into account the wider community and collaboration between schools and the local education authority. In essence, the amendment tries to probe the Minister by asking what checks and balances he will insert into clause 7 to ensure that such surpluses are identified as appropriate and constitute value for money.