My Lords, the amendments my noble friend has tabled really show how interconnected all the Bill’s clauses are. You cannot envisage one without the other; they are interdependent. It is very difficult to move an amendment to any one clause that does not affect other clauses.
I said last week that I would try to find out from our legal advisers the extent to which the Bill may threaten the charitable status of all schools. I had a letter this morning from our advisers, Stone King, one of the leading education law firms. I will read it to the Minister so that she and the officials can reflect on it:
“The Bill sees, accordingly, a material shift from a contract-based system to one which is statutorily controlled.”
At the moment, the relationships between schools and the Secretary of State are as a contract: it is an agreement, and both sides can change it. It is subject to contract law. The Bill would change that to statutory control.
The letter continues:
“It also introduces much more stringent termination powers which include not only existing termination rights, but also the ability for the Secretary of State to flood the board of an academy trust.”
The Secretary of State has never had that power in the past, ever since 1870. This is a fundamental change—a major shift of authority from local authorities to Whitehall. Local authorities were responsible for closures in the past, but then they had checks and balances: before a closure could be decided on, they would have to check with the local community, local councillors and parents. There are now no such balances.
The letter continues:
“It was considered that such flooding rights were incompatible with the independence of an academy trust as a charitable company and that a contractual breach should lead to a contractual remedy—not to seek to control … the academy trust itself.”
This matter has been dealt with by the Charity Commission in the past, so I ask the Minister to reflect on, or find out from her officials, what the exact position is. The position was that, before 2010, the Charity Commission was very concerned about the independence of schools, so it made them all statutory charities. That gave them certain very clear rights. The letter states:
“The Charity Commission had doubts, in the late 2000s, about the charitable status of academies given the controls which could be exercised then by the Department for Education and Skills … This led to the provisions of the Academies Act 2010 which made academy trusts charitable”—
all the schools in our country today are statutory charities. The letter continues:
“It would be very hard to see how the Commission would be at all comfortable with these additional restrictions, and it would be interesting to understand whether there has been any dialogue between the DfE and the Charity Commission”.
If the Minister says that there has not been, I intend to write to the chairman of the Charity Commission tomorrow.
3.45 pm
This is important because, as the letter continues:
“A further point arises with regard to HMRC, and whether HMRC would be willing to continue to afford charitable tax breaks to academy trusts in circumstances where they are so very tightly controlled that their charitable status is in doubt. We wonder whether this point has been considered, and whether the views of HMRC have been sought on this point. Clearly, the removal of charitable tax breaks would have a significant and detrimental impact”
on all schools.
I raise this now only because this is such a fundamental point. It is saying that the 18 clauses could challenge the charitable status of a school, in which case it would lose the tax breaks. I ask the Minister and the officials just to take all this on board. When she winds up, perhaps she will be able to tell me whether the Charity Commission has approved the proposals in the Bill.