Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

I beg to move amendment No. 119, page 40, line 38, at end insert:

''which shall be the subject of guidance given from time to time (in relation to England) by the Secretary of State or (in relation to Wales) by the National Assembly for Wales''

In response to an earlier comment from the Minister, the lack of amendment to these clauses reflects not consensus but pragmatic resignation—this is what the Government are going to do and we have to make the best of it.

It is interesting to note that Haringey, Islington, Hackney, Leeds and Bradford where these powers have been used extensively have yet to come up with a solution that is as good as the one in Liverpool where it is the good old LEAs that have turned the authority round. In the words of Mike Tomlinson, the chief inspector of schools, it is the best example of an authority improving itself.

The purpose of this amendment is quite simple. We envisage that contracts will be issued, perhaps even to the company of the hon. Member for Isle of Wight, although I trust that he will declare an interest if he participates in this debate.

We agree with the Minister and the Government that we cannot allow LEAs or schools to fail, and intervention is important in those areas. If the private sector is involved, there is usually a contract with a number of penalties. For example, Islington has a contract with Cambridge Education Associates, and because there was a failure to reach the required five GCSEs at A to C, there were penalties. It also failed to reach the appropriate level of improvement at key stage 2 standard assessment tests, and there were penalties. Equally, if the targets are met, there is a bonus, but that is payable only if the head and the teachers in those schools perform far better and achieve the required results.

It seems to be perverse that, under the current system, if an LEA is failing in the eyes of Ofsted or the Audit Commission, the private sector can be brought in as the result of a direction by the Secretary of State, a profit can be made on that contract but the schools, heads and teachers do not benefit. Will the Minister assure me, in the minute that is left, that schools, heads and teachers will benefit from the contracts if there is real improvement?

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

We will introduce guidance on the way in which LEAs might use external partners. The hon. Gentleman has attached guidance to the wrong part of the clause. I accept the need for guidance, which might include model contracts, to simplify matters. On that basis, I hope that he will withdraw his amendment.

Mr Phil Willis (Harrogate & Knaresborough, Liberal Democrat)

With that wonderful assurance of yet more guidance, I will take guidance and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

It being Five o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 June 2001] and the Orders of the Committee [11, 13 and 18 December 2001], to put forthwith the Questions necessary to dispose of the business to be concluded at that time.

Clauses 60 and 61 ordered to stand part of the Bill.

Adjourned accordingly at Five o'clock till Tuesday 15 January at half-past Ten o'clock.