My Lords, I beg to move the second order standing in my name on the Order Paper.. The order is the first from the Department for Education and Skills to be brought forward under the Regulatory Reform Act 2001. It demonstrates the department's commitment to regulatory reform and, in so doing, allows us to reform fundamentally a system that has become increasingly bureaucratic and unworkable since the basic arrangements were introduced in the Education Act 1944.

The order is designed to simplify the arrangements for funding premises-related work at voluntary aided schools in England. Liability for funding such work is currently divided between the governing bodies of such schools and local education authorities in what is recognised to be a complicated way. It requires much detailed negotiation between the various parties, including departmental officials. That time could be better spent on more important matters such as continuing the drive to raise standards. The details are so complex that the relevant scrutiny committee in another place invited officials to make a presentation to help provide a better understanding of what is entailed. I am pleased to say that the presentation was well received by the committee.

The package of changes will place more responsibility on the governing bodies for all of the school buildings and playgrounds. It will enable the governors to have more involvement in decisions affecting those buildings. It will also mean that governing bodies can use the available funds for a wider range of purposes. That is particularly important at a time when the amount of capital grant that we are making available to the voluntary aided sector has increased fourfold from what it was in 1996. That level of investment has, of course, been matched for other schools. The additional responsibility brings an increased financial commitment for the governing bodies of voluntary aided schools.

It is an essential feature of the voluntary aided sector that its schools make a contribution towards the cost of work on their premises. That principle will be retained under the new arrangements. However, in recognition of the increased financial liabilities falling on the governing bodies, we have proposed that their normal contribution should be reduced from its current 15 per cent minimum rate to 10 per cent. That will ensure that the changes will be broadly cost-neutral, in overall terms, to voluntary aided governing bodies. In order to help ensure cost neutrality, we are also introducing an option to pay grant at up to 100 per cent in exceptional cases.

I thank members of the Select Committee on Delegated Powers and Regulatory Reform. They spent considerable time on scrutinising the proposals and were able to recommend the proposals to the House. The committee accepted that our proposal to increase the rate of grant support to governing bodies of voluntary aided schools relieved a burden, within the meaning of the Regulatory Reform Act 2001. The committee noted that it would therefore appear to be possible to use the Act to change entitlement rules in a wide area of welfare funding. The vigilance of the appropriate committees in both Houses will guard against any improper use of the power.

As a consequence of the more simplified system that the order will introduce, we can also improve the way in which we fund routine repair and maintenance to voluntary aided school buildings. That will have two major benefits. First, it will enable us to place more of the funds directly into the budgets that are delegated to schools, giving greater local autonomy. Secondly, the processes will be more consistent with those for other types of school, although the essential characteristic of the voluntary aided sector would, of course, be retained.

We have also worked with the committee in the other place to reassure it on several issues, including the insurance implications and our ongoing commitment to pay grant at the normal rate in certain prescribed circumstances. We consulted widely on our proposals and received overwhelming support for them. The committees in both Houses commended us on the way in which we consulted on the reforms. We worked hard with the Churches, which have a key role in the greater part of the voluntary aided sector, and we are pleased that they asked us to introduce the changes as rapidly as possible. We also worked closely with the Local Government Association and the National Governors' Council to ensure that the proposals are workable and fair to all stakeholders. That extensive consultation has encouraged us to proceed with the proposal that the changes should be introduced with effect from 1st April this year.

I must emphasise that the changes have nothing to do with the wider debate on faith schools. They are about reducing the burden of bureaucracy, simplifying a complex system and, in so doing, introducing policies that bring about greater consistency with other categories of school. The scrutiny committees have recommended acceptance of the changes on that basis.

I realise that the timing of this debate does not give us much time to begin the process of implementing the changes. However, we have continued to keep all stakeholders—voluntary aided schools, the Churches, the National Governors' Council and the local education authorities—informed of our proposals. We have demonstrated to the committees that we are in a position to introduce the changes at short notice should the order be approved.

Finally, the order applies only in respect of England. The National Assembly for Wales was consulted on the proposals and following responses to its own consultation decided not to seek any change to the law. I confirm that the terms of the order are fully compatible with the European Convention on Human Rights. The order was approved in another place on 12th March and I commend it to the House.