Mr Graham Brady (Altrincham & Sale West, Conservative)

I beg to move amendment No. 16, in page 6, line 19, leave out 'do anything', and insert

'take all reasonable action'.

Mr Win Griffiths (Bridgend, Labour)

With this it will be convenient to take the following amendments: No. 37, in page 6, line 19, leave out 'do anything necessary' and insert

'use its best endeavours'.

No. 71, in page 6, line 19, after 'necessary', insert—

', other than adjust the budget of a school,'.

Mr Graham Brady (Altrincham & Sale West, Conservative)

These significant amendments probe the heart of the Government's apparent treatment of local authorities. I am pleased to see that my hon. Friends have tabled amendments that take slightly different approaches. That is part of my strategy to attract the next defector from the Labour Benches. When that person has become fed up with overbearing Whips, he or she can come to us because we allow proper discussion in Committee.

The clause features a remarkably open-ended requirement in subsection (1)(b) that local education authorities

''shall do anything necessary to give effect to the governing body's determination under paragraph (a)''.

Paragraph (a) details the determination of pay and conditions during and after exemption. That requirement might be appropriate if the local authority agrees with the proposed variation of pay and conditions, but to impose it is strange.

Amendment No. 16 would replace the phrase ''do anything'' with the less open-ended ''take all reasonable action''. Amendment No. 37 requires ''best endeavours'' to be used, and amendment No. 71 would insert

'', other than adjust the budget of a school''.

All the amendments have the same aim. The clause empowers schools to vary pay and conditions for teachers. The Minister said that earned autonomy schools will not receive additional funds, but the clause seems to undercut that assurance. Should a governing body vary pay and conditions, possibly quite dramatically, the local education authority has a statutory duty to do ''anything necessary'' to provide for that. That duty might vary the school's budget, which is addressed by my hon. Friend the Member for Isle of Wight in amendment No. 71.

The Minister suggested that bizarre changes to the curriculum might occur. Are bizarre changes to pay and conditions equally possible? They may be an attempt to void particular tax liabilities, or structure pay in a more attractive way. That is relevant when schools increasingly have to trawl for teaching staff overseas to fill vacancies. Pay and conditions requirements typical in other countries are not so here, and may place an unreasonable burden on the local education authority. The Minister must reassure the Committee and LEAs. Local education authorities' powers on school budgets may be seriously constrained and controlled by ministerial order.

The provision, which is very broad, places requirements on local education authorities that will have to be met using a small fraction of their current budgets. The larger portion of their budgets will be removed from their control and ring-fenced by Ministers. Local education authorities might have little discretion left with which to meet the requirements of subsection (1)(b). I am sure that the Minister will want to reassure the Committee on the matter.

If I am right to say that this is an open-ended clause, the Minister will want to make proposals to deal with it. Otherwise, he needs to reassure the Committee and those who follow its proceedings that the provision can be included elsewhere in the Bill and can be prevented from causing enormous damage to local authorities.

Mr Chris Grayling (Epsom & Ewell, Conservative)

I support all three amendments, including those tabled by my hon. Friend the Member for Altrincham and Sale, West and by my hon. Friend the Member for Isle of Wight, who apologises because he has been called briefly out of the Room. He is committed on the matter and has tabled two amendments in order to encourage the Government to think again about this sweeping measure.

Mr Graham Brady (Altrincham & Sale West, Conservative)

I take the opportunity to put it on record that my hon. Friend the Member for Isle of Wight has been called away in connection with serious job losses in his constituency. Hon. Members of all parties will understand.

Mr Chris Grayling (Epsom & Ewell, Conservative)

I thank my hon. Friend for making that point. My hon. Friend the Member for Isle of Wight raised the issue in the House this morning. Today's large job losses are extremely bad news for his constituency, and I am sure that the Committee would like to send its commiserations and condolences to his constituents.

As a new Member participating in my first substantial Standing Committee, I feel great anxiety about the response to amendments. Many of the Conservative amendments are measured, well thought out and designed to enhance the Bill. They do nothing to drive the Bill in a different direction. Conservative amendments were tabled in an attempt to improve law that is not as good as it should be.

It is distressing to learn how unwilling Labour Members are to take on board any constructive suggestions from Opposition Members. Committees are supposed to be constructive and thoughtful, and they should be about improving the quality of legislation. It is disappointing that not one amendment has so far received a positive response from the Minister.

Amendment No. 37 highlights some particularly poor drafting in the Bill. Let us consider the exact wording of subsection (1)(b):

''the local education authority shall do anything necessary to give effect to the governing body's determination under paragraph (a)''.

What does ''anything necessary'' mean? Does it mean closing another school or cutting jobs at the LEA in order to release financial resources? Does it mean restructuring or merging schools? Does it mean closing buildings? Does it mean taking money from other budgets or reorganising the structure of the council? That cannot be good law by any definition.

For precisely what does the Minister intend the provisions to be used? Why is it necessary to be so sweeping and dictatorial? If the legislation is not about instruction, mandate and centralisation, I should like to know what is. If ever there were an example of a declaration of instruction from central Government, surely this is it. The local education authority is required to ''do anything necessary'' to facilitate the legislation. I am sure that the Minister did not draft the clause, but he has the unhappy job of defending it. If ever there were a moment for him to step back and listen to the constructive comments of Opposition Members about elements of the legislation, this is it.

As we consider the group of amendments, the Minister could say that he is happy for the provision to say ''take all reasonable action'', ''use its best endeavours'' or to include the caveat about adjustment to a school's budget. However, if this is to be a good, well-drafted piece of legislation, commensurate with the responsibilities of the House, surely he should accept at the very least that the clause's wording is not satisfactory, is not good law, does not add value to the Bill, will not improve the quality of our education system and will not lessen the work load of teachers, heads, LEAs or, indeed, Ministers. There is no reason whatever not to accept a minor redraft and say, ''Okay, we'll ask LEAs to do the best that they can, but we won't tell them to do absolutely anything.''

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

I almost entirely agree with the hon. Members for Altrincham and Sale, West and for Epsom and Ewell. We described the previous clause as bizarre, and this clause, too, is bizarre. I am sure that the Minister will realise on reflection that it has not been fully thought through.

I have several questions. Does the Minister envisage that the employment of teachers will continue to be with the local education authority or that, in the context of disapplication, schools will be able to take on the employment of individual teachers? The remarks about the cost to LEAs were right. For many years, Labour Members and I, particularly those of us who were involved with local government, found it unacceptable that each year the Government heaped new responsibilities on to local authorities, but did not give them the resources to meet them. I think that I strike a chord with Labour Members.

We are talking now about an open chequebook. Let us consider a large secondary school with 120 staff, all of whom have individual contracts under this arrangement. All those contracts have to be negotiated, and the Minister is saying that that is the LEA's responsibility. It had no say in the arrangements, but has to pick up the legal costs, pension costs, et al. The Minister must recognise that, because of current pension arrangements, which attract an automatic subsidy from the local authority, that would affect the budgets not only of schools but of local authorities in the area.

Has that cost been estimated? We understand that only 10 per cent. of schools will be involved initially, so that cuts the cost a little. Over time, however, far more schools will earn autonomy—perhaps a significant number. Has that cost been estimated? Does the Minister not find it somewhat bizarre—lto use that word again—that if an LEA must pick up what could be a considerable bill, the only way in which it can find the money is to take money out of school budgets? The Minister shakes his head, but where else will the LEA get the money? Will there be another glorified pot of money that goes to a particular group of schools?

The reality is that if an LEA must find that money, it will take it from the budget for schools. That means that other schools will pay for the cost of the innovation. Why does the school itself not have to pick up the costs, if it, and its governors, want to go down the road of disapplication, and make arrangements—bizarre or not—on pay and conditions? Why must the LEA—and, therefore, other schools within the authority—meet those costs?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

Several misunderstandings have arisen, and I shall try to address them. The matter is straightforward. There is not a problem with the drafting.

We have discussed the matter at length, and I regret that, as we also need to address in detail several further weighty matters. I wanted the Committee to sit again this evening: Labour Members made it clear that we would welcome that extra sitting, but the proposal was rejected by Opposition Members.

The phrase ''do anything necessary'' has prompted four amendments from Conservative Members, and three of them have been selected. As I mentioned to the hon. Member for Altrincham and Sale, West, Conservative Members have been free to explore a wide range of approaches to such matters. I welcome that, and I hope that it continues for many years.

We would not have debated the matter, if the clause had read:

''The local education authority shall give effect to the governing body's decision.''

A question therefore arises: why has the phrase ''do anything necessary to'' been inserted? It has been inserted because the LEA will not have to do anything in many cases—for example, if the exemption concerns the curriculum. We must allow for that by inserting those four words in paragraph (b).

The governing body of a school where earned autonomy applies will make decisions that take account of the school's resources. It will not be able to make decisions that involve spending money that is not in the school's budget. The schools budget will act as a constraint, and we have made that point.

Given that, there must be a related responsibility, with the LEA, to take account of the governor's power, and to ensure that the procedure's work smoothly. That will involve deciding whether the LEA should take action to ensure that the changes to teachers' contracts are implemented—for example, to ensure that they are paid in accordance with the provisions agreed by governors, in consultation with their teachers, and in accordance with the order issued by the Secretary of State, or the National Assembly of Wales. Changes to the payroll system will frequently have to be made.

Mr Graham Brady (Altrincham & Sale West, Conservative)

The Minister has explained what the local authorities will not have to do, but the only example that he has given of what they would have to do related to the payroll. That is an interesting example. Schools would usually have a delegated budget. They would have freedom with regard to contracting. Therefore, they could use either the payroll services of the local authority or those provided by an outside contractor. Given that, any requirement with regard to payroll would be covered by the contractual requirements between the school and the provider—regardless of whether that was the LEA or a commercial provider. Therefore, so far, no justification has been given for the measure. I want the Minister to give concrete examples of what an LEA would have to do, which would not ordinarily be covered by contract.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

There are many schools for which the LEA provides a payroll service, not on the basis of a contract, but as an extension of a long-standing arrangement. When that position obtains, the LEA must change the details on the payroll.

Chris Grayling rose—

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I will give way in a moment, if we need to spend even more time on this matter.

Such changes may be necessary to give effect to the governing body's decision. As I have repeatedly made clear, that is within the constraints of the schools budget. It is not the case that LEAs will have to carry out an extreme or extraordinary task. We certainly do not want to enter into another lawyers charter about what constitutes ''reasonable action'' or the other forms of wording inserted. It is made clear that the LEA does not have the option to refuse to implement changes made or to refuse to pay teachers in accordance with what the governing body has decided, which may be a consequence of the amendment.

Mr Chris Grayling (Epsom & Ewell, Conservative)

The Minister talks about lawyers charters, but the phrase ''do anything necessary'' is just as much of a lawyers charter as anything else. Will he address a practical example? Let us suppose that a teacher negotiates with his or her governing body an attractive performance-related package—he or she is paid less, but a bonus is paid on top for performance in exam results—and that package is not consistent or workable within the LEA's payroll software package. The package cannot cope with the pay model that the school has agreed. Is the LEA therefore required to spend a large amount of money on recommissioning its payroll software, so that it can deal with the new pay structure for that teacher?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I am not sure what age of computer system the hon. Gentleman is referring to. The LEA would indeed have to make whatever change was needed to its payroll system in order to make the slight change that he described. That would not be onerous for any payroll system in use in any LEA in the country.

On amendment No. 71, necessary action by the LEA clearly needs to be within the law. The school's budget share will be subject to the same requirements, and there is therefore no question that an LEA would have to pass on extra funds to a school. Given our lengthy discussion, I hope that the amendment will be withdrawn.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

I asked the Minister why it was necessary to pass this responsibility to the LEA, and why should the school not take on those responsibilities, including payroll functions, under earned autonomy.

Sitting suspended for a Division in the House.

On resuming—

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I was responding to an intervention from the hon. Member for Harrogate and Knaresborough. The position is that if the LEA is the employer, the legal obligation to provide a payroll service rests with the authority, although it is worth noting that nothing in this part of the Bill changes the employer. The LEA can delegate the payroll responsibility to a school, but that does not change the legal responsibility.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

Payroll is not a big issue, and I agree with the Minister that any modern piece of software will be able to deal with it. The question is about the legal contracts. If a school varies those contracts, should it be responsible for drawing up the legal documents?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

If a discussion between the school and teachers leads to changes in contracts, that will need to be determined locally. The school will have that responsibility, although that is not affected by this part of the Bill. As the hon. Gentleman said, the payroll issue is a minor issue, but it is an example of what may arise under the clause. The LEA has to put the steps in place to ensure that the governing body's wishes can be implemented. On the specific question of contracts, the answer is yes, schools will be responsible for drawing up the documentation.

Mr Graham Brady (Altrincham & Sale West, Conservative)

I was a little concerned that the Minister may be padding out his replies somewhat, and I was wondering whether that was in the hope that the Government may obtain a majority in the Committee again before we move to a vote on the amendment.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I reassure the hon. Gentleman that I am anxious to make progress as rapidly as possible. I would be glad to be in Committee this evening to make further progress. The raft of interventions has concluded, and I shall resume my seat.

Mr Graham Brady (Altrincham & Sale West, Conservative)

I am not persuaded by the Minister's argument. All those responsibilities will have to be met from the school budget. What about future commitments? What about performance-related pay and pension commitments? I will press the matter to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 8.

Mr Graham Brady (Altrincham & Sale West, Conservative)

It is unfortunate that the Minister has not dealt with the concerns of Opposition Members about clause 9 and the obligations that it would place on local government. Although he narrowly saved the subsection, and the Government Whip narrowly secured his position, I hope that he will give further thought to this important question. I hope that he will also reflect on the number of hon. Members who raised sensible concerns about the matter, and consider whether it may be appropriate to table an amendment of his own.

Mr Andrew Turner (Isle of Wight, Conservative)

I apologise that I was not in Committee for much of the debate on my amendment No. 71.

I listened to the Minister's answer, which I was looking forward to hearing. I am not convinced that he understands how schools work, nor was I convinced from his responses to the hon. Member for Harrogate and Knaresborough that he understands delegation and what is and is not delegated. I will extend the example that was given by my hon. Friend the Member for Epsom and Ewell. The Minister suggested that the LEA has a duty to amend its payroll software system, if necessary. He thought that it would not be necessary, but accepted that, if it were, it would be the duty of the LEA. I presume that the cost would be met entirely from the LEA's held-back budget if there were no contract between the school and the LEA. That is an entirely unfair burden on the LEA and, more importantly, on the schools that have not taken advantage of earned autonomy. We all want equity between schools with and without earned autonomy.

The Minister could not answer the hon. Member for Harrogate and Knaresborough on the issue of the responsibility for drawing up the contract. He fiddled around with a piece of paper that landed on his desk from I know not where. He clearly did not have an answer on that piece of paper.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

I am grateful to the hon. Gentleman for giving way, as he makes an important point. I understood the Minister to say that the contract would be the responsibility of the school, which was an important statement because it means that any school that applies under earned autonomy would have to pick up the significant legal costs in its budget.

Mr Andrew Turner (Isle of Wight, Conservative)

Indeed, the Minister said it would be the school's responsibility, but he did not point to any part of the legislative framework that confirmed that it would be. That is why my hon. Friend the Member for Epsom and Ewell was right when he said that the proposal was a lawyers' charter. It is not only a charter, but a blank cheque for lawyers; when a contract is drawn up between a local education authority and a teacher in a community school, it is usually drawn up by the local authority's legal department or by its personnel service. Most personnel services are devolved; the funding for most legal departments is not delegated to schools. It would therefore be entirely a matter for the local authority's internal arrangements under which budget heading to include responsibility for drawing up the new legal contract for the members of staff employed under the new framework for earned autonomy. In such circumstances, it is hard to see how there could be equity between schools in different local education authorities.

Another issue is whether the delegated personnel service includes the construction of a contract; that may not be clear, because it may have been assumed in drawing up the scheme of delegation that only one more-or-less standard contract of employment, with variations, would be in existence.

I want the Minister to point to the legislative provision that overrides subsection (1)(b). As he has not done so, I am not convinced that such a provision exists.

Mr Chris Grayling (Epsom & Ewell, Conservative)

I want to make two further points, pursuant to those made by my hon. Friend the Member for Isle of Wight. First, on the nature of the contract, I am well and truly confused about whether the new contract will be with the school or with the LEA. If it is with the school, it throws into sharp relief several issues, such as the provision of pension fund arrangements. What happens to a teacher who is in a local education authority pension fund if the contractual arrangement reverts to being with the school? What happens in respect of other terms and conditions of employment?

If the contract is not with the school, there are implications under employment law if terms and conditions are varied. There are European legislative stipulations surrounding the variation of terms and conditions for employees. Can the Minister tell us which, if any, of the regulations would apply as a result of the changes? What consultation would each LEA have to go through? My understanding of European employment law is that if employers vary the terms and conditions of employees, they are obliged to go through a period of statutory consultation with them. I presume that the mere presence of the possibility for individuals to negotiate contracts, which has not previously been the case, would be covered by European employment law. I should be grateful if the Minister would clarify that point.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I am continually surprised at how much time Opposition Members want to spend on this matter, given the limited time available.

I am entirely satisfied that the wording in the clause is robust. I listened carefully to the points made by the hon. Member for Isle of Wight because he has a good deal of experience in these matters. It is true that an LEA could delegate to schools the job of drawing up contracts. That is what I envisage would happen if there were to be such a variation. The LEA would not have to do that. It could maintain that responsibility and produce the contracts itself, but the most sensible arrangement would be for the LEA to delegate that task to the school. As we are starting to get questions relating to transfer of undertakings legislation, I must emphasise that nothing in the Bill changes the employment relationship. Teachers who are LEA employees before the exemptions are put into effect will continue to be LEA employees. I have made that point repeatedly.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

The Minister has now raised an important issue. As he knows, the provision it does not work under the Transfer of Undertakings (Protection of Employment) regulations. Is he now saying that a school that had earned autonomy and had disapplied its staff's pay and conditions would be allowed to issue a contract to an employee who wanted to stay on his existing terms and conditions? Alternatively, if a school forced that employee to go on to new terms and conditions, as happened after 1993 with the incorporation of further education colleges, who would have the legal responsibility for sorting out that mess? Would it be the school, the LEA, the Secretary of State or the company?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

There is no transfer of undertakings. That is the point that I have been emphasising. The identity of the employer does not change. If the LEA was the employer before the exemptions were applied, it would still be the employer afterwards. We are not in the terrain that the hon. Member for Epsom and Ewell suggested we were getting into.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

We are in that terrain. The Bill goes on to talk about setting up companies that could provide those services. Private sector companies could also run the management of a school. If a private sector company such as Nord Anglia took over a particular school there would be new contracts, and TUPE arrangements would apply.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I look forward to those discussions when we reach that part of the Bill. The issue does not arise here.

Mr Graham Brady (Altrincham & Sale West, Conservative)

The Minister has confirmed that the LEA will remain the employer, yet the school will be able to vary the pay and conditions of members of staff and will have a responsibility to do so in budget. What would happen if a school varied pay and conditions to include a bonus or a performance-related arrangement that would apply at a future date? I assume that as long as the school had acted in good faith in entering into a contractual agreement with the employee, it would be doing its job properly if it worked within what it believed the budget would be, yet it would be the LEA, as the employer, that would find itself liable for the payment of those sums of money. How does the subsection exclude the possibility of the LEA finding itself with a future liability that is difficult to quantify and to which it has not given any approval?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

There is no difference between the situation that the hon. Gentleman describes and the one that prevails now. Decisions need to be made within the budget that is available to the governing body. At the moment they need to be made within the budget that is available to the school through the LEA. The situation has not changed.

Mr Chris Grayling (Epsom & Ewell, Conservative)

Will the Minister address one more possible scenario? It is important to get this right. The Minister does not seem to appreciate the significant implications of the clause. Let us consider the example of a school that agrees to enhance a teacher's pension fund as part of pay and conditions. This year, pensions of Members of the House were changed from a one fiftieth to a one fortieth arrangement. If such a change were replicated in a school, would the local authority be required to implement it? If it were required to implement it, would it legally be able to avoid making the same offer to all teachers in the LEA area? If it were not required to do that, there would be a limitation on the powers of the school to operate freely in setting terms and conditions.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

Any financial implication arising from an exemption being exercised would have to be picked up from within the school's budget, and the administrative implications would have to be taken up with the LEA.

Mr Chris Grayling (Epsom & Ewell, Conservative)

Pension fund payments do not come from the school's budget. The pension is part of a teacher's pay and conditions, but the payments are made at a future date from a central pot held by the local authority. The obligation to the teacher will have to be met from the local authority pension fund but, according to the Minister, the negotiation about terms and conditions will be between the school and the teacher. That loop does not join up.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

The employer's contribution to the pension fund would have to be made by the LEA; that is correct.

Mr Graham Brady (Altrincham & Sale West, Conservative)

We are now getting somewhere. The Minister confirms that the employer's contribution would have to be met by the LEA, but he also said that the amount of any contribution to a pension fund would be covered by pay and conditions, from which exemptions can be granted under the legislation.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I am sorry, but I missed the hon. Gentleman's question.

Mr Graham Brady (Altrincham & Sale West, Conservative)

Local education authorities are responsible for the cost of employer's contributions to the pension fund, but pension arrangements fall under pay and conditions, which are exempted so that schools can make their own arrangements. Is there not a possibility that a school might make arrangements for the amount or terms of payment of a pension that would then become a liability that the LEA would have to meet?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I think the answer is yes. The hon. Gentleman is making a fair point. As the LEA would pay the employer's contributions, there is a potential liability for the LEA, although such liabilities are generally modest.

Mr Graham Brady (Altrincham & Sale West, Conservative)

The generally modest liability—to use the Minister's words—could be increased by a decision made by the school and not the LEA. If the answer is yes, we are right in asserting that an open-ended commitment is being placed on the LEA.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

It certainly is not an open-ended commitment. On reflection, I may be able to provide further helpful information to the Committee on the subject. If that is the case, I will do so shortly.

Mr Chris Grayling (Epsom & Ewell, Conservative)

While the Minister is beginning to think about things again, let us develop his thinking one step further. The issue is that a school will be able to negotiate new pension arrangements with a teacher and, under the clause, the LEA will have to do anything necessary to give effect to such a determination. I question whether in law it is possible for an LEA pension fund to offer different terms to one member and not to the rest. In theory, a decision taken by one school could require an LEA to vary its pension terms for all its teachers. That is unreasonable. A decision taken in negotiation should not vary the pension arrangements for every member of staff in the LEA. That would be unacceptable, which is why we need a caveat that would allow the local authority to do its best to follow the school's instructions. If it is mandated to do whatever the school wants, the clause will not work.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

The teachers' pension scheme is a national one. The hon. Gentleman's suggestion that a change for one person would mean a change to everyone's position throughout the LEA is incorrect.

Mr Andrew Turner (Isle of Wight, Conservative)

May I posit a different scenario?

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

I would welcome a different scenario.

Mr Andrew Turner (Isle of Wight, Conservative)

In a local authority that has several secondary schools, two are single-sex: more men teach at the boys' school, and more women at the girls' school. The boys' school achieves earned autonomy and introduces a new pay structure along the lines described by my hon. Friend the Member for Epsom and Ewell, with the result that men teachers earn more than women teachers employed by the same local education authority. I do not mean foundation or voluntary-aided schools, but community schools. In those circumstances, women teachers would not receive equivalent pay for equivalent work from the same employer. The employer will be required to do ''anything necessary'' to give effect to the governing body's decision, which may create difficulties under equal opportunities legislation.

Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)

The hon. Gentleman raises an interesting point. That difficulty would not arise because the school would take the decision via its powers under the provisions. I do not think that the LEA would face the problems that he envisages.

Mr Graham Brady (Altrincham & Sale West, Conservative)

The Minister was bemused by the concentration of so much effort on the clause, but subsequent debate has proved it necessary. He has allowed the power to negotiate terms and conditions to become divorced from the connected liabilities. The governing body of an exempted school will have power to vary pay, pension provisions or performance-related pay.

The local education authority will be responsible for the employer's contribution to a pension fund. If a governing body varied pension fund terms, local education authorities would have a statutory duty to meet any extra costs. The Minister has accepted that. Although we approve of earned autonomy, and would like to see it work, clause 9 should not stand part of the Bill. Without amendment, which may come from the Government later—

Mr. Timms indicated dissent.

Mr Graham Brady (Altrincham & Sale West, Conservative)

The Minister is shaking his head, but I hope that he will read our exchanges and reflect on what he is about to do.

I urge my colleagues, and Government Members, not to place the open-ended liability on local education authorities and to vote against clause 9 standing part of the Bill.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 9, Noes 7.