After section 259 of the Education Act 1996 there shall be inserted—

"Significant enlargements for the purposes of section 259

259A.—

1. (1) For the purposes of section 259 an enlargement of the premises of a grant-maintained school is a significant enlargement of those premises if (and only if) the effect of the enlargement, taken with all previous enlargements (if any) taking place since the appropriate date, would increase the school's capacity by more than 50 per cent. or 30 pupils (whichever is the greater) as compared with—
   1. (a) its capacity on the appropriate date; or
   2. (b) if at any time after that date its capacity was lower than its capacity on that date, its lowest capacity at any such time.
2. (2) An enlargement of the premises of a grant-maintained school is accordingly not a significant enlargement of those premises for the purposes of section 259 if its effect, taken with all such previous enlargements (if any), would not be to produce such an increase in the school's capacity.
3. (3) In subsection (1) "the appropriate date" means whichever is the latest of the following dates—
   1. (a) the date falling four years before the date on which the governing body form the intention to make the enlargement concerned,
   2. (b) the date when the school was established,
   3. (c) where any proposals for a significant enlargement of the premises of the school have been approved by the Secretary of State under—
      1. (i) section 261 below or section 98 of the Education Act 1993, or
      2. (ii) section 37 or 43 above or section 12 or 13 of the Education Act 1980.
      the date (or latest date) on which any such proposals were implemented, and
   4. (d) where the local education authority have determined to implement any proposals for a significant enlargement of the premises of the school under section 38 above or section 12(7) of the Education Act 1980, the date (or latest date) on which any such proposals were implemented.
4. (4) The Secretary of State may by regulations prescribe the method for determining a school's capacity for the purposes of this section; and in this section references to a school's capacity are references to its capacity to accommodate pupils.
5. (5) Nothing in this section applies to a school requiring special measures to be taken.".'.—[Mr. Forth.]

Brought up, and read the First time.

7 pm

I beg to move, That the clause be read a Second time.

Some hon. Members will recognise this clause as an old friend—which almost survived a number of attempts in Committee to spoil its clarity and simplicity. In re-introducing it, we have felt the need to change only one word in new section 259A, and that change is purely technical.

New clause 3 makes an important contribution to the deregulation of controls over the expansion of grant-maintained schools, by enabling GM schools to enlarge their premises by up to 50 per cent. without the need to publish statutory proposals. The provision is not entirely new, as non-significant enlargements can already be made to all schools without the need for publishing statutory proposals. Under current legislation, changes would normally be regarded as non-significant—and therefore not require statutory proposals—if they increased the size of a school by less than 25 per cent., or fewer than 30 places.

New section 259A(1), which is introduced by the new clause, would effectively change the definition of "significant enlargement" for grant-maintained schools to one in which the capacity of the premises is increased by more than 50 per cent. Similarly to current provision, schools would be able to add 30 places without publishing proposals, even when such a change would increase the size of premises by more than 50 per cent. To avoid very rapid cumulative increases occurring, schools would be required to examine the previous four-year period to assess whether a change is significant.

The increased freedom provided by the new clause would enable grant-maintained schools to respond to the wishes of parents and to decide for themselves what size of school will most usefully serve their specific area. Such changes will not necessarily require investment of additional public funds, because putting decisions more directly into the hands of schools will increase incentives for governors to explore other ways in which to finance necessary capital work. That is not freedom without responsibility, because—as we made clear in Committee—the Bill requires governors who propose to make enlargements to decide who has an interest, and to consult them about the proposals before making a decision to proceed.

Some hon. Members may be concerned that the change is limited to the grant-maintained sector, but we believe that it is appropriate for GM schools to take the lead in this matter. Not only are many GM schools popular with pupils and parents, but they are in the best position to investigate innovative approaches to funding additional provision. New clause 3 should enable them to expand to meet demand. I realise that, in some cases, expansion will occur in areas where there are surplus places, but there are ways in which to remove those places if they are in schools that parents do not choose.

I also realise that many popular schools are outside the GM sector. Those schools will continue, in the normal manner, to be able to make proposals for significant enlargements. We have made it clear that there will be circumstances in which, in the interests of increasing choice and diversity, we will be willing to approve increases in places, even when surplus places exist in the area, and especially when subsequent removal of unsatisfactory provision is likely.

I hope that hon. Members will therefore understand that new clause 3 is a useful measure in increasing the autonomy and responsibility of GM schools and in giving them an opportunity to respond imaginatively to parents' wishes. It is an integral part of the Bill, and I hope that the House will approve it.

As we have already fully deployed our arguments in Committee on new clause 3—on 3 December 1996—and it was lost by the Government, there is little or no point in revisiting them; they have been reported in Hansard. I believe that we should move to a vote on the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 272, Noes 273.

Question accordingly negatived.

On a point of order, Mr. Deputy Speaker. In view of the consequential measures dependent on the new clause and given that the Bill is now severely damaged, will the Government withdraw the measure and come back to us so that we can form a consensus on those parts of the Bill on which the whole House agrees?

That is not a matter for the Chair.

On a point of order, Mr. Deputy Speaker. I seek clarification. The clause was lost in Committee, but we went on to consider further clauses that related to it on the understanding that the Government would bring it back on Report. The Government have failed to carry this important new clause, on which later clauses depend. Can we have your guidance on what will happen to clauses that refer to the new clause that has been lost?

We must proceed with the Bill. The Government will no doubt take note of the points that have been made.

On a point of order, Mr. Deputy Speaker. I would not dream of challenging your decision, but as it was ruled in Committee that the deletion of the clause would have consequential results on the remainder of the Bill, it is difficult to see how the Government can proceed with the Bill in its present form. They said in Committee that they could not.

I have nothing to add to what I have said. We must carry on with consideration of the Bill. I have no doubt that the Government will take note of what the hon. Gentleman has said.