Amendment 39A

Schools Bill [HL] - Committee (2nd Day) – in the House of Lords at 6:30 pm on 13th June 2022.

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Lord Knight of Weymouth:

Moved by Lord Knight of Weymouth

39A: Clause 5, page 5, line 11, leave out “satisfied” and insert “the Chief Inspector has given notice that an inspection of the Academy proprietor’s operations and educational provision has identified”Member’s explanatory statementThis amendment, along with the amendment to Clause 6, page 6, line 11, in the name of Lord Knight of Weymouth, is designed to require Ofsted to inspect multi academy trusts and restrict the use of the Secretary of State intervention powers to when an inspection has revealed the need for such powers to be used.

Photo of Lord Knight of Weymouth Lord Knight of Weymouth Labour

My Lords, I rise yet again. This substantial group is about intervention and termination powers. Most of the group is made up of stand part debates on a series of clauses. My amendments are about a level of accountability for the Secretary of State around the use of powers. The clauses we will be thinking about in this group relate to the power for the Secretary of State to give compliance directions, give a notice to improve to an academy provider, impose directors on the trust and then, if none of that works, terminate both the single academy agreements and the master agreements, perhaps after seven years’ notice by mutual consent or if the academies are perceived to be failing, if the trust becomes insolvent, after failure to address concerns or after warning notices. That is what the set of clauses that we are about to debate is all about. They are substantial and, in my judgment, overweening, and that is why I have also signed up to the stand part debates in the names of the noble Lords, Lord Agnew, Lord Nash and Lord Baker.

My problem at its heart is the sense that the Secretary of State becomes judge, jury and executioner. The Secretary of State is taking powers, essentially, I think in reality, through a network of regional directors, as they are now called, and officials appointed on a regional basis. They will be monitoring the performance of academies across anything and everything they do and will then be suggesting to academies that do not do what they want that they have this huge range of powers and will make them do as they are told. I am mindful of the discussion we had earlier, what the noble Lord, Lord Baker, said and the advice from Stone King about how that might impinge on the independence of the trustees of multi-academy trusts. I was grateful to hear the Minister’s reassurance that the Government have been given legal advice that it will not, but I still have concerns.

My amendments would add in Ofsted, the Office for Standards in Education, and once it has made a judgment about a multi-academy trust—yes, my amendment says that Ofsted should now inspect multi-academy trusts as a whole, not just the individual academies—that can act as a trigger; it is acting as the judge or jury and the Secretary of State can then act as the executioner. An independent party will have been able to have a look at it, and one would assume that Ofsted, in coming up with its framework for how to inspect multi-academy trusts, would be informed by the academy standards that eventually, in one form or another, we think will be in place.

I would anticipate that the MAT inspection would look at the educational quality and safeguarding and governance arrangements and ensure they were sound, and at the trust’s compliance with various regulations, including financial. When that judgment is passed, action can be taken. All my amendment seeks to do, whether perfectly or imperfectly, is to introduce that.

In thinking about the stand part debates, of course there are questions about some of these clauses. Clause 6, which provides the power to give notice to improve, as I interpret it, reflects the academy agreement academy by academy, rather than the master agreement with the whole academy trust. Clause 6(4) includes the phrase “make representations”. I should be interested to know to whom—one assumes the Secretary of State. In a world where every one of 25,000 schools is an academy, one assumes that they will not all be failing at once. Let us say that the figure is 1%, if we are generous, which is 250 schools at once making representations. In reality, they will be made not to the Secretary of State but to the regional directors. I should be interested to know how the Minister sees the representations process working, because it is as close to some sense of appeal as we have in the clause. Subsection 5 says that the Secretary of State “may make regulations”. Will those regulations be one by one, school by school? Perhaps that gives a little bit of power to Parliament, but I should be interested in some clarification of that.

Subsection (6) seems pretty wild:

“A notice to improve may … require the proprietor to obtain the Secretary of State’s consent for” almost anything they then do. What is the point of carrying on chairing a trust or being on the trust board if every decision you make is then subject to Secretary of State approval? That seems a bit wild to me.

I am struggling the most with Clause 7, on the powers to appoint or require the appointment of directors. Obviously, I want Ofsted to be the trigger, but I am still concerned about how this will work. For those who are not involved in multi-academy trusts, we have members and members of the trust board, and the members of the MAT appoint the trustees, the members of the trust board. Clause 7(2) proposes that the Secretary of State directs “the proprietor”. Is that a direction to the members to use their powers and responsibility, when they meet annually, to reappoint the trustees? Is the proprietor in this context the members, who then appoint the people the Secretary of State chooses, or is it directing the trust board, in which case, it is subverting the role of the members altogether, which feels quite challenging? The only point I could find at which the legislation mentions members is in Clause 7(2)(c), where it refers to

“the proprietor and its members”.

That suggests that the reference in paragraph (a) is to the proprietor being the trust board, so it feels to me as if the members are being undermined by this clause, which is problematic.

Then there is the fundamental policy question about remuneration in subsection (5). I am not absolutely against remuneration. I spend many days every month chairing a multi-academy trust board for nothing, and there are times when my family question why I do that, so part of me is sympathetic to the idea of some remuneration, but how will it look in practice? There is the issue of motivating people like me to do this for nothing, who then see this other bunch of people who suddenly start getting paid. Will that not raise the question in my mind and that of other trust board members of whether that is fair and whether they should be paid? A potential financial pressure might be being created there. My more significant worry is that the regional directors will end up having a bunch of usual suspects they go to—they will probably be consultants—who will end up being paid to sit on boards as interim trustees.

Perhaps this is how I satisfy my family: perhaps I will chair the trust board, become a usual suspect and be asked every now and then to sit on an interim board and turn it around, for my sins. Perhaps I will get three, four or five and it might end up being a living; I do not know. I am interested how this will work in practice, because my sense is that we will have quite a number of MATs where these intervention powers may be necessary at different times, and I should like to know how that is likely to play out.

Finally, perhaps the Minister could reflect on the interplay between master agreements and individual academy agreements, which feels quite muddled as I read through this set of clauses. As a MAT, a single problem in one of your academies, if people do not like the cut of your jib, could end up with you having the master agreement taken away and losing the whole thing. All of this feels disproportionate; none of it feels well thought out. It all feels very rushed, as ever with this Bill, and yet again, my plea to the Government is to take some time, do the regulatory review, publish the outcome of the consultation on the review and come back on Report with something informed by the sector and by proper consultation. I beg to move.

Photo of Baroness Pitkeathley Baroness Pitkeathley Deputy Chairman of Committees, Deputy Speaker (Lords) 6:45 pm, 13th June 2022

My Lords, I remind the Committee that the noble Baroness, Lady Brinton, is taking part remotely. I now invite her to speak.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat Lords Spokesperson (Health)

My Lords, I start by apologising to noble Lords who have their names against amendments and clause stand part notices in this group. The rules for remote contributions mean that I am always called after the mover of the first amendment in the group; I would have wanted to hear other expert contributions before speaking.

Amendments 39A and 39B in the name of the noble Lord, Lord Knight, make it absolutely plain that the Secretary of State’s powers should be used only when an Ofsted inspection has made it clear that there are issues. Amendment 39C in the name of the noble Lord, Lord Mendelsohn, asks for further qualification to inform a Secretary of State’s intervention decision on the replacement of directors or trustees, which include those who pose

“a risk to the duty of the institution”.

I hope that this would also include those who do not respond to safeguarding concerns. The detail of this comes to the nub of the issue that we have faced in our day and a half of Committee so far: exactly how the Bill will work in practice.

Turning to the 14 clause stand part notices in this group for Clauses 5 to 18, I hope that, after our debates so far in Committee, the Minister is in no doubt about the concern right across the House, including from all the former Education Ministers present, about the first part of the Bill on academies. The noble Lords, Lord Baker, Lord Nash and Lord Agnew, have made it absolutely plain in our debates today and last week that this Bill, especially this part of it, is not fit for purpose and that it would be sensible to delay until more detail can be provided to Parliament, the education sector and parents.

Normally, when a major change in the structure of our entire education system occurs, there has been broad consultation with the public, schools and the bodies that deliver educational services to education directly. That just has not happened here. It is evident that your Lordships’ House remains concerned that this part has not been thought through in the detail needed. All schools that are funded through the public purse becoming academies, bringing virtually all schools under the direction of the Secretary of State, is one such major change.

That brings us to the other conflicting issue to which noble Lords have referred in almost every debate on each grouping: the Henry VIII powers that the Secretary of State will take on in the Bill; again, without wider consultation or understanding of the implications. I want to focus on the latter point for a second. Page 55 of the White Paper, Opportunity for All: Strong Schools with Great Teachers for Your Child, sets out the standards, regulation and intervention from the department’s perspective. Given the debates we have had, the White Paper is remarkably coy about the powers of the Secretary of State. In fact, according to the schedule on page 55 of the White Paper, the Secretary of State’s only role is to sign new funding agreements and amend them “for material changes”. Intervening in schools is listed as happening by the regions group, on sufficiency, admissions, safeguarding, attendance and ensuring quality; whereas the Bill appears to give decisions over these powers directly to the Secretary of State. So, what is on the face of the Bill sets out neither a strategic framework nor the detail of how it will work in practice; it also contradicts the White Paper.

This reflects the difficult debate that we are having at the moment. My noble friend Lady Garden of Frognal said during our debate on the first group of amendments that there should be delays in the progress of the Bill until some of these matters are clarified and put out for consultation. Other noble Lords have said the same; they are right. As more and more issues and concerns emerge, grouping by grouping, it is not right to proceed until they are discussed and then consulted on with the wider public.

As the noble Lords, Lord Agnew and Lord Nash, made clear in our debate last Wednesday, the Academies Minister has already had to take a large number of decisions in relation to schools that are not maintained. Some of us argue that this results in a closed and untransparent system that is particularly opaque for parents, their children and their communities when key and serious decisions need to be made about their local school. It now appears that these powers, given to the Secretary of State but with a recommendation presumably to be made by the relevant Academies Minister, will apply to all 20,000 publicly funded schools once the Bill has gone through. How on earth will this work in practice? Also, how will it be publicly accountable to the parents and communities that these academies will serve? Can a junior Minister manage this workload or will the practicalities of it mean that it will be made by invisible and unaccountable civil servants?

In the Clause 3 stand part debate earlier, the Minister said that the Government will always consult the sector, but I did not hear anything about consulting parents and communities on changes to their local schools. I hope that the Minister can provide some answers or a timetable for your Lordships’ House as to when our many questions can be answered in detail and then debated properly; otherwise, we must delay the next stage of the Bill until we know and understand more about what the Government are trying to achieve through it.

Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative

My Lords, I agree with everything that the noble Baroness said; I congratulate her on saying it.

May I express the hope, which I think is in the interests of many people, that we might finish these clause stand part debates before the dinner hour? Every morning, as I leave my apartment to come to the House of Lords, my wife waves me away with the comment, “Don’t speak too much.” So I do not expect to elaborate again all the points that the noble Lord, Lord Knight, made. In fact, I do not intend to move my stand part notices for Clauses 8 to 14 at all because they use exactly corresponding words in the funding agreements. Clauses 16 to 18 are exactly the same; I do not intend to move my amendments on them in order to accelerate the movement of the House.

I will say a just few words on Clause 5, which gives the Secretary of State the power to give directions rather than advice. The noble Baroness, Lady Morris, and I did not have that power. I would not seek it. No Minister has had it since 1870. I do not believe that it is right for Ministers to interfere with the actual management of schools at the local level.

Clause 6 gives the Secretary of State the right to get involved in schools’ financial matters and the running of schools. Again, I do not believe that that is the right function for the Secretary of State.

Clause 7 is a significant clause because it is the one that allows the Secretary of State to appoint a new board, governor and governing body. Ministers have never had this power. In fact, the noble Lords, Lord Agnew and Lord Nash, operated the whole problem of failing schools very effectively by using funding agreements. I recommend that their practice should continue, and that this measure should not be attempted in the Bill.

That is all I have to say. I hope that we will be able to proceed quite quickly.

Photo of Lord Nash Lord Nash Conservative

My Lords, I appreciate that my noble friend the Minister is in a difficult position; I am sure that she is reflecting greatly on the points that noble Lords across the House have made. However, as we are here, I will make a few further points. Some of them might be a bit technical; I apologise if that is the case.

On Clauses 5 and 7, I should say at the outset that, as my noble friend Lord Baker said, when I and my noble friend Lord Agnew were Academies Minister—for a combined period of seven years—neither of us felt at any stage that we did not have enough shots in our locker or enough in our armoury to deal with difficult trusts. We feel that Clauses 1 to 18 are unnecessary, which is why we have joined our noble friend Lord Baker in trying to strike them out.

Dealing specifically with Clause 5, which covers the power to give a compliance direction, this can be given if the Secretary of State is satisfied of a breach or likely future breach of any enactment or funding agreement, including a master funding agreement. There is no concept of materiality, which there is in many funding agreements, and no right to make representations. Anyway, it is unnecessary because under contract law, the current regime for academies, if a party breaches or threatens to breach a contract—that is, a funding agreement—the other party can require that party to perform the contract. They can issue a notice requiring them to perform it; if they do not, they can go to court to seek an order requiring performance. The DfE has these powers already, it just needs to use them where necessary.

Also, under the trust handbook, the DfE can already issue a notice to improve. I understand that the DfE says that the compliance direction will allow it to issue notices for minor breaches which may not warrant termination, but Clause 12 then goes on to say that the only consequence of failing to comply with the compliance direction is termination, so this justification is completely invalid. Anyway, as I have said, the department has the ability under contract law to impose what amounts to a compliance notice and to obtain an order for specific performance. Under the handbook, it also has the power to issue a notice to improve. Therefore, again, these powers are unnecessary.

Clause 6, covering notices to improve, can be issued for a breach of a duty under any enactment or under any academy agreement or master agreement. Again, there is no concept of materiality or significant weakness in the proprietor’s governance procedures or management. One could ask whether the DfE is competent to make this latter judgment. The only issue should be educational outcomes, as overseen by Ofsted. I will return to the point made about Ofsted by the noble Lord, Lord Knight, in a minute, but in any case, there is already the power to issue a notice to improve in the academy handbook, which the department can update as it goes along. Why is it necessary to legislate for it when we already have a structure which, as my noble friend Lord Agnew said, works perfectly well and the system understands?

I turn to Clause 7, on the power to appoint additional trustees, which the noble Lord, Lord Knight, has been very powerful about and which I referred to earlier. It talks about interim trustees on the face of it, but it is far worse than that. Under paragraph 2(b) of Schedule 2, if interim trustees are appointed, all existing directors cease to be directors automatically. Therefore, the noble Lord, Lord Knight, need not worry about chairing a board with all these paid people on it because he will not be there anyway.

Clauses 8 to 11 are, by the department’s own admission, unnecessary because they are already in funding agreements. They are not in all funding agreements and, to the extent that they are not, why should they be imposed on people who have negotiated and signed a contract? The department has not shown a necessity for any of this. It also says that a level playing field will be created in this way, which would be helpful. Well, we have a level playing field in the handbook. The department also says that this level playing field will help schools joining trusts to understand the rules of the game. Well, these rules are very clearly set out in the handbook and the model funding agreement, to which all schools are subject on becoming academies.

Clauses 13 and 14 relate to existing powers. Clause 14 directly corresponds to existing funding agreements but goes wider, dealing with any breach of funding agreements or where the Secretary of State considers the standards of pupil performance unacceptably low. This takes us back to the whole argument about standards.

Regarding Clause 15, under contract law there is, as I said, the right to terminate the master agreement for a breach, so the clause is unnecessary.

Turning lastly to the points raised by the noble Lord, Lord Knight, about Ofsted, as a number of noble Lords have said, we were promised a regulatory review, which is frankly far more important to the sector than tinkering with funding agreements and existing arrangements. That regulatory review would presumably look at how the DfE, regional directors, the ESFA and Ofsted all interact with each other. We might well have a consensus that Ofsted inspects MATs but only, I would say, in relation to the educational outcomes, the outputs and the safeguarding, which, after all, we all should be concerned about. I do not think that it is set up to inspect the organisational structure of the MATs operation in the broader sense. That is also not relevant. If we have the outputs, we have the educational outputs, which is exactly why we need a regulatory review—to discuss these points.

Photo of The Bishop of Chichester The Bishop of Chichester Bishop 7:00 pm, 13th June 2022

My Lords, I speak on behalf of my colleague, the right reverend Prelate the Bishop of Durham, and declare his interest as chair of the National Society.

I speak very briefly against Amendment 39C. It is well intentioned but poorly drafted. Its wording is too broad and too open to interpretation. For example, what would constitute “supportive”? How would “other considerations” be interpreted? As it stands, this amendment is unable to have meaningful impact.

Photo of Lord Addington Lord Addington Liberal Democrat

My Lords, my degree of fellow feeling for the Minister is growing, as it was when the noble Lord, Lord Knight, was talking, because of the amount of nodding and smiling in agreement behind her from her distinguished predecessors in the post—both of whom are true believers in academies—saying that this series of powers is unnecessary. The noble Lord, Lord Nash, has given us a classic example of “Don’t make us pass this because you can do it already. You’re effectively wasting ink.” The fact that it comes from the Secretary of State and not from another structure merely enhances the problems that there already are on this.

I would be interested to see what the down side of going back would be if we were to go through this. Can the Minister point out what the problem is with having this all in the office of the Secretary of State? Is it going to the Secretary of State themselves and this is some form of punishment for whoever holds the position, for having that amount of power? It is going to concentrate everything and it is already done. What great failings are we addressing? This is not the first Bill where we have thought that something must be done so we do it and then discover that it can already be done somewhere else. The Home Office normally holds the record for this, but if the Department for Education is going into some sort of competitive tendering process on this, I hope that the Minister can tell us how. Possibly it is some sort of Whitehall competition. If there is a problem, can the Minister identify it for us?

I appreciate what the right reverend Prelate has said about Amendment 39C. I was going to ask the Minister whether she could give us some description of what this would mean in practice if it was implemented. I appreciate that there may be problems with it. There are a series of arguments and messages running around the place about certain smaller religious groups that are getting very worried about this. What would be the result here and what is the Government’s thinking about how smaller religious schools will fit in?

Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative

I understand that the noble Lord, Lord Mendelsohn, will not move Amendment 39C. Is that right?

Photo of Lord Addington Lord Addington Liberal Democrat

My Lords, it is something running through this debate; there has been discussion on it. I hope we can find this out. I assumed that the Minister would have been briefed.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Opposition Whip (Lords), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade) , Shadow Spokesperson (Justice), Shadow Spokesperson (Education)

The Government are in a bit of trouble here. I have not previously sat through a debate where there has been no support at all for what the Government are trying to do. I do not see how the Bill can leave this House intact. It is becoming quite urgent for the Minister to share with us the Government’s intentions around it. I appreciate that may not be possible today, but on Wednesday we should have some indication of how the Government intend to respond. This is getting repetitive and very frustrating. Deep concerns have come up through this discussion that demonstrate again the failure of the Government to engage with academies, particularly on their approach.

My noble friend Lord Knight makes very sensible suggestions about the appointment of trustees, which highlights the issues around remuneration. We get the impression that the Government have not thought this through sufficiently. He rightly highlights the dangers of a gang of usual suspects taking roles—although he did not rule out being one himself. This makes us all realise, the Bill being as it is, that none of us has the first idea where the Government will take us. This is not a sustainable position for the Government to put the Minister in day after day as we go through Committee.

The Bill is muddled and rushed and has not benefited from the regulatory review. We do not understand the haste. There is no clarity about how all this will work in practice. The noble Baroness, Lady Brinton, summed it up really well. She said there was no strategic framework and no detail, and that it does not reflect the White Paper. I am afraid that is where we find ourselves. Several noble Lords have proposed a delay. It would appear a justifiable proposal at this stage, given everything we have heard. It would be in the Government’s interest—perhaps not today but on Wednesday, before we go much further—if we could have some indication about what they are going to do about the fact that they clearly will not have sufficient support to get the Bill through as drafted.

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

I start by acknowledging the noble Baroness’s last comments. I will endeavour to come back on the next day of Committee with more clarity on the points she raises.

I thank my noble friends Lord Agnew, Lord Baker and Lord Nash, who have so much experience in this area, for discussing their concerns in respect of Clauses 5 to 18 with me ahead of today’s Committee. As we know, the vast majority of academy trusts are well managed and meeting their obligations, but it is right that the Secretary of State should be able to step in where trusts fail to safeguard children’s education and public money.

These intervention powers form part of a toolbox of measures enabling the Secretary of State to intervene in trusts in a proportionate way. The powers enable the department to tackle failure at the multi-academy trust level. In response to my noble friends and the noble Lords, Lord Knight and Lord Addington, and the noble Baronesses, Lady Brinton and Lady Chapman, I shall attempt to explain why these powers are necessary, offer some assurance as to how they will be used proportionately, and summarise our plans for building confidence in the department’s decision-making processes.

The powers are necessary for two main reasons. First, they will provide a strong platform on which to build a fully trust-led system. Under the current framework the Secretary of State’s intervention powers are set out in individual funding agreements, as we have heard. These powers can vary, depending on when the agreement was signed. In the case of a multi-academy trust, there may be several funding agreements with different termination provisions. We believe it is the right time to create a more coherent trust framework under which the Secretary of State’s powers can be applied consistently and transparently.

Secondly, the powers will allow the Secretary of State to intervene, where necessary, in a more proportionate way. The current tools are limited and blunt, relying heavily on the power to terminate the funding agreement. For example, Clause 5 will give the Secretary of State a targeted power to act where a trust is failing to fulfil a specific legal duty. This could include, for example, not complying with the new attendance legislation under this Bill or a misuse of funding.

My noble friends have suggested that the Secretary of State could enforce such requirements under common law by taking legal action against the trust for breach of contract. I fear that such an approach to enforcement would be costly and burdensome for both the department and trusts. Instead, the Bill provides for a straightforward remedy, while allowing for resolution through legal action as a last resort.

Through Clause 6, the Bill incorporates into legislation the existing power for the Secretary of State to give a notice to improve to an academy proprietor. This power is currently set out in the Academy Trust Handbook, an annexe to the funding agreement. A notice might be issued, for example, where there was weak financial management. This could include where a trust had missed the deadline for approving the budget for the academy financial year or authorised staff compensation payments above delegated limits.

The noble Lord, Lord Knight, asked about representations relating to Clause 6. The existing funding agreement provisions relating to termination provide for trusts to make representations in specific circumstances. In practice, as the noble Lord said, these would be representations to the regional director. This power is intended for intervention at trust level where a trust is not meeting a legal obligation or there are serious weaknesses in governance. The regional directors would of course take account of trust representations before exercising their power.

Thanks to the work of my noble friend Lord Agnew and others, we have in place more robust oversight of financial management and governance in trusts. These measures will place such improvements on a stronger and clearer legal footing. They will also sit within a revised framework which allows for intervention to be escalated, where necessary, without requiring the funding agreement to be terminated, which is the sanction now where a trust fails to comply with a notice to improve.

In particular, Clause 7 allows the Secretary of State to direct a trust to appoint additional directors—for example, to remedy a specific weakness. It also allows the Secretary of State to replace an entire trust board with a board of interim trustees. We heard a number of noble Lords express concerns about this. The Bill also provides for trustees appointed in this way to be remunerated, although our general expectation is that academy trustees will continue to act on a voluntary basis.

Photo of Baroness Morris of Yardley Baroness Morris of Yardley Labour 7:15 pm, 13th June 2022

May I seek some clarification on that point? Will the payment of trustees and the interim executive board be the same for maintained schools? There is a parallel situation there, where a governing body of a maintained school is not strong and an interim executive board is put in place. Are the Government proposing that they be paid as well in the intervening period?

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

I will come back to the noble Baroness on that point. I do not have the answers to hand but I will write to her.

We believe that there will be circumstances where it is right to remunerate trustees who have the particular skills and experience required to tackle the most serious failings in governance and management. These powers offer an alternative to terminating the funding agreement, which could be costly and disruptive to children’s education.

We would expect any additional directors and members of interim trust boards to be drawn from our strongest trusts, in line with our aspiration for a trust-led system. If noble Lords have colleagues who are trustees, or are trustees themselves and wish to discuss this further, I am happy to undertake to meet and explore this point.

My noble friends expressed concerns that these powers could be used in a heavy-handed way, such as terminating a trust’s master funding agreement on the basis of a single breach. As I have explained, the intention behind these measures is to create a more nuanced framework for intervention which avoids resorting to the threat of termination, while ensuring that weaknesses can be addressed. Any Secretary of State is bound by common-law requirements of proportionality. This means that they would terminate a funding agreement only on the basis of a material breach. Moreover, except in very limited circumstances—for example, where a trust is insolvent—the Secretary of State may terminate a funding agreement only after exhausting other options.

In general, the Bill provides for termination only where a trust has not addressed concerns raised through an earlier intervention, whether a compliance direction, a notice to improve or a termination warning notice. I agree that there should be proper scrutiny of how the Secretary of State, through regional directors, exercises any powers of intervention in academies and trusts. The Government’s recent schools White Paper announced a plan for a review of regulation. I assure the Committee and my noble friend behind me that, as part of that review, we will—

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Opposition Whip (Lords), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade) , Shadow Spokesperson (Justice), Shadow Spokesperson (Education)

Given that the regulatory review seems to be so significant in the Government’s considerations and has come up many times, and that we are discussing pausing the Bill—I know the Minister has not yet engaged directly with that—I wonder whether we could have some idea of the timescale on the regulatory review. Should we wish to suggest a pause, we could make sure that it was for sufficient time, but not too much time, to allow us to benefit from the findings of that review.

Photo of Baroness Barran Baroness Barran The Parliamentary Under-Secretary of State for Education

We plan for the review to be launched in the coming weeks. I cannot give the noble Baroness an exact date, but I think I am allowed to say “shortly”. I have probably said more than I am allowed to.

I will go back, because this is important. The noble Baroness is right to raise the regulatory review; we see it as very important. As part of that, we will look at how we provide for the scrutiny of how these powers are exercised. Critically, we will do that in a way that wins the confidence of the sector.

I have reflected on my noble friends’ concerns, but I believe that, taken together, these clauses create a sound framework for robust but proportionate intervention as we move to a fully trust-led system.

Amendments 39A and 39B in the name of the noble Lord, Lord Knight of Weymouth, envisage a new role for Ofsted in inspecting multi-academy trusts, and make the decision to issue a compliance direction and a notice to improve contingent on the outcome of such an inspection. Currently, the department relies on a range of evidence from a variety of sources to build up a joined-up picture of each multi-academy trust, to inform decisions about intervention. This includes evidence on finance and governance, as well as Ofsted’s school inspection judgments on educational performance.

Through the regulatory review, the department will consider the evolving role of inspection in a fully trust-led system. This will include consideration of how inspection of multi-academy trusts would be co-ordinated with our wider regulatory arrangements, as well as how it would interact with school-level inspection. I hope the noble Lord will agree that it is important that the review runs its course before we make any decisions in this area. He also asked a number of quite specific questions. If I may, I will write in response.

I commend Clauses 5 to 18 standing part of the Bill. I also ask the noble Lord, Lord Knight, to withdraw his amendment.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, the noble Lord, Lord Knight, is right about getting Ofsted into multi-academy trusts. It would make a great difference to how parents are able to interact with the eventual system. Parents need the level of information and reassurance that will come from an Ofsted report, and I hope it would be done in a way that, as others have suggested, is very much focused on the educational aspects, which is where Ofsted’s expertise lies.

Photo of Lord Knight of Weymouth Lord Knight of Weymouth Labour

I am grateful for those last comments, and that I do not have to speak for six minutes before I get my food while others discuss the national food strategy.

I am pleased to hear that, all being well, on Wednesday the Minister will be able to come and give us a little more information about the Government’s intentions, which is really important. It is also helpful that she was able to give us a vague timescale of “in the coming weeks” on the regulatory review. If on Wednesday she was able to give a little more detail on that timescale, I think the whole sector would be really grateful in terms of understanding the sequence of how things are likely to play out on all this.

The Minister talked about the blunt powers in agreements that she is looking to replace with a more nuanced and consistent response through the series of sequences, yet many of us are worried that the nature of the Bill, as written at the moment, will still be heavy-handed. If only all current Secretaries of State paid attention to their common-law responsibility to proportionality, I think we would all be a lot happier in this place.

The issues around paying and governance are issues to reflect on. All those many years ago, when I was Schools Minister responsible for academies, among other things, I commissioned some work around governance but it never really got anywhere. There may well be reasons why we want the ability to bring in people with a much more professional approach who therefore might be paid, but we need a really full debate around that. The people who give of their time voluntarily to be school governors, multi-academy trust trustees, ambassadors for local schools, et cetera, do so willingly, and we have to be really cautious about interfering with that by offering to pay even a few.

We look forward to hearing more on Wednesday. I do not think the Committee is persuaded about these clauses as they stand. I am sure the comments from my Front Bench about what will happen if we do not get a good response are being listened to by Ministers, but I am happy to withdraw my amendment.

Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative

My Lords, I thank the Minister for carefully explaining the Government’s justification for doing this. She is in a difficult and unenviable position, but I do not think anybody could have handled it better.

What the Government need is time to think about this and to reflect on what is needed. I am fairly clear what they are getting at, and it is a very narrow thing they want to do. I do not think that can be covered by tinkering with the existing 18 clauses, quite frankly. It will mean a redraft and new clauses, so I very much recommend what the noble Baroness, Lady Brinton, said on the screen: we should gain time. That is to say that Report on the Bill should take place in the autumn, not in July. The Government really have to reflect carefully and define their targets more precisely than they have, so that solutions can be given. My three friends and I would be able to help and co-operate with that as much as possible. I very much hope that on Wednesday my noble friend will be able to say that Report will be done in the autumn.

Amendment 39A withdrawn.

Clause 5 agreed.

Clause 6: Power to give notice to improve

Amendment 39B not moved.

Clause 6 agreed.

Clause 7: Powers to appoint or require appointment of directors

Amendment 39C not moved.