The clause is the provision at the heart of part 4, which transfers the registration of independent schools from the Department to Ofsted. The amendments replace “Chief Inspector” with “Secretary of State” in order to maintain the current position, under which the registration and regulation of independent schools lies with the Department. Schools in the Independent Schools Council are inspected by the Independent Schools Inspectorate, while those that are not members are inspected by Ofsted. In addition to opposition to the proposal from the bodies to which it applies, there is also concern about the quality of the work carried out by the Department in preparing and researching the policy.
I am assuming that in talking about schools that are inspected by the Independent Schools Inspectorate or, if not, by Ofsted, that the hon. Gentleman is not saying that he does not support the moves to inform the Bridge Schools’ Inspectorate or the Schools Inspectorate Service.
No, I am not saying that at all. For shorthand, I was saying the ISC and Ofsted, but of course the Minister is right and I should have mentioned the other inspection bodies, and the Focus Learning Trust as well.
In addition to opposition to the proposal, there is concern about the process leading up to the legislation. Jonathan Shephard said, in his evidence to the Committee, at question 191:
“If you look at the regulatory impact assessment, page 14, under the title ‘Analysis and Evidence’, it says,
‘Independent schools will benefit from only dealing with Ofsted.’
But that is untrue in respect of more than 80 per cent. of the children in independent education in England who will deal not only with Ofsted but with the ISI.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 83-84.]
The consultation document was incorrect too, in a material way, when the original version was published on 27 July, at the beginning of the consultation process. It said at paragraph 2.23 that the rationale for moving registration from the Department to Ofsted
“has been prompted by the transfer of boarding school and children’s home registration and regulation to Ofsted from CSCI from April 2007.”
However, that is not correct. Ofsted does not register or regulate boarding accommodation. That remains with the Secretary of State. What transferred from CSCI to Ofsted was the inspection of boarding provision. That is not a minor drafting error, but goes to the root of the rationale for the whole policy, which, according to the consultation document, is to rationalise the registration and monitoring of the sector prompted by the transfer of
“boarding school...registration and regulation to Ofsted from CSCI from April 2007.”
Had the paragraph been worded correctly, that this was prompted by the transfer of inspection from the Commission for Social Care Inspection to Ofsted, it would not make sense and would not justify the rationalisation of regulation and monitoring.
The Government changed the wording in the consultation document on 5 September 2007, but now the paragraph is clear that the reason given for the policy does not make sense. There are two errors of fact——the one that I have just explained and the fact that there will not be a unified strand of regulation, registration and inspection. They are fundamental to the whole explanation and thrust of the policy in the clause and undermine it completely.
“One of the thrusts of these proposals reflects the desire to create a unified body, but that will not occur”.
However, there are problems with the policy, too. It is important to keep the functions of regulation and inspection separate. As Christine Ryan said:
“One of the very important functions that we carry out is to check on regulatory compliance of independent schools. The regulations—as is the nature of the beast—are often open to some interpretation. If a school challenges whether or not regulatory compliance is there or not and we want to be sure, we can go to the Department and we agree a decision on interpretation”.——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 85, Q193.]
Jonathan Shephard, the chief executive of the Independent Schools Council, said:
“As a matter of principle, it is very important that inspection and regulation should be separated. Inspections can be wrong. Inspectors can make mistakes. It is important that when they go to a regulator to say that there is a problem ... that is a necessary check and balance. If the inspector goes to itself, that check and balance is not there.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 84, Q191.]
The policy to transfer registration and regulation from the Secretary of State to Ofsted is not driven by the need to create a unified point of contact for all registration, regulation and inspection procedures. It is not driven by the transfer of functions relating to boarding schools from the Commission for Social Care Inspection to Ofsted, because that relates to inspection, not regulation. It is not good policy, because it will remove an important separation of functions and instead set up conflicts of interest.
Once those things are taken out of the equation, the only reason that is left is efficiency savings. Paragraph 2.1 of the consultation document says:
“We believe that it would be more efficient to transfer the registration and monitoring functions for education provision from DCSF to Ofsted thereby creating a single regulatory body for independent schools.”
Leaving aside the obvious point that the measure will not create a single regulatory body for independent schools, because Ofsted does not register or regulate boarding, welfare and independent schools, let us look at the simple efficiency argument from the point of view of the Government and of tax payers.
The registration and regulation of independent schools are carried out by the independent education and boarding team in the Department for Children, Schools and Families. On 9 January, the Minister responded to a parliamentary question I had tabled, and said:
“There are currently 18.2 full-time equivalent (FTE) posts in the Department’s independent education and boarding team.”—[Official Report, 9 January 2008; Vol. 470, c. 655W.]
I do not know whether Miriam Rosen, the director of education of Ofsted, or Roger Shippam, the deputy director, knew about that answer. When she gave evidence to the Committee on 24 January, she was asked:
“How many members of staff would you need to run the registration and monitoring of the independent sector?”
“We are still working on the exact numbers. I am not quite sure exactly what numbers we will need to transfer to us, to do that work.”
She then suddenly said:
“We think it will be about 10.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 95, Q225.]
In answer to a question from the hon. Member for Yeovil, she replied:
“I do not know the exact costs because we are still working on them with the Department.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 96, Q228.]
I am not sure where the figure of 10 came from if they are still working on the costs. It is all very odd, but I will say nothing stronger than that, Mr. Bayley.
Is the hon. Gentleman aware that Ofsted has been asked to achieve some very challenging expenditure reduction targets? When representatives of Ofsted last appeared before the Select Committee on Children, Schools and Families, of which I was then a member, it was some way off meeting those targets. That may explain the confusion over the head count and the budgets.
If that function was transferred to Ofsted, I would very surprised if it were carried out by 10 people. I look forward to monitoring that matter as an Opposition Member through parliamentary questions, or by asking Ofsted directly as a Government Member.
When replying to a question that I put to her in that evidence session, Ms Rosen agreed that we would need a procedure for dealing with the sort of disputes that my hon. Friend has outlined. That procedure would not be the responsibility of the part of Ofsted that we are discussing. There would have to be a separate organisation, so there would clearly be staffing demands for that as well.
My hon. Friend makes a good point. It would be expensive, too, because the people involved would have to get up to speed with the matter, as they would not have dealt with it regularly as part of the independent schools team in the Department.
The existing arrangements work well. Christine Ryan said in her evidence:
“That link and that contact with the Department works very smoothly—it has a dedicated team who know our system very well. Ofsted is already having to cope with a very large number of changes from the other duties it has taken on. If this transfer happens now, we are concerned about the loss of that communication.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 85, Q193.]
This is one of the management issues that the Government do not understand. They fail to understand human frailty. They created a tax credit system that is too complex to be administered smoothly, and they took responsibility for the monitoring and supervision of banking away from the Bank of England, with which it had been for centuries, and gave it to a new bureaucracy, the Financial Services Authority. The FSA flunked its first test by merging Customs and Excise with the Inland Revenue, not understanding that the academic disciplines of the tax code are very different from VAT and excise duties, to create the administrative shambles that is Her Majesty’s Revenue and Customs. I am sure that the same will happen under this provision.
In paragraph 36 of its written response to the consultation, the Independent Schools Council stated:
“There is an implication in the proposals that the Department wishes to transfer responsibility for regulation and registration as part of the process to remove its operational responsibilities. However, ISC would argue that this is not a reason in itself: administrative convenience should feature low in any list of factors justifying reform of a statutory regulator. We recognise that other functions of the Secretary of State may have been transferred over the last few years—student loans, pensions, IT advice etc.—but these are, we submit, wholly different functions from those of a regulator. As a matter of principle”—
I agree strongly with this point—
“ISC believes that, as in the maintained sector, responsibility for overseeing the regulation of the independent sector should rest with the Secretary of State, accountable in and to Parliament, rather than a non-governmental public body such as Ofsted whose officers report to the Education and Skills Committee only twice a year.”
In addition to those arguments of substance, there are genuine concerns about the consultation process as a whole. Jonathan Shephard said in his evidence to us:
“It is quite clear that the consultation did not follow Cabinet office guidelines in that ISI, an important stakeholder, was not consulted as it should have been, in advance of the consultation going out.”
Christine Ryan said:
“The simple answer to your...question about whether we were consulted prior to the formal consultation is, no.”——[Official Report, Education and Skills Public Bill Committee, 24 January 2008; c. 85, Q194.]
In his response, the Minister cited a letter dated 9 May 2006, from Penny Jones. Since then Jonathan Shephard has written to the Committee. He wrote on 4 February that the letter to which the Minister referred stated that the transfer of regulation would be
“subject to a full consultation with all independent schools”.
He said that the consultation
“was expected to be in autumn 2006. It never happened. There is no record of any ISC school being consulted, and we are not aware of any non-ISC school being consulted. The Committee should note that the letter specifically asks me not to share the contents of the letter with member schools, and therefore I could not have consulted them on the basis of the letter.
For the Minister to imply that this letter was (or even approached) adequate consultation is unsound. The reality is that there was no effective consultation with ISC or with its member schools.”
I am not addressing that point. Jonathan Shephard did not mention whether the ISI was different from the ISC, but the organisations were very different bodies based in different premises, even though they were legally part of the same body. His point was that the schools were not consulted, and that he was not allowed to consult them. Although he had received the letter, was happy to read it and could discuss it with Christine Ryan of the ISI, he was not allowed to discuss it with ISC schools, which is how a representative body should conduct itself. He could not just come up with an opinion of his own; he needed to discuss the matter with the schools but could not do so, because of the contents of the letter. A real consultation did not happen.
If the Government introduces legislation and there is hostility and concern from the bodies to which the legislation directly relates, the Minister has a duty to reflect on that. I hope that in his response he will indicate that he intends to give further consideration to the valid points raised in the very detailed briefings given to members of the Committee.
The hon. Gentleman has raised all sorts of points, and I will respond to them as briefly as I can. This clause proposes that responsibility for the registration and regulation of independent educational institutions be transferred from the Secretary of State to Ofsted. In doing so, the chief inspector will have responsibility for the registration of new institutions. Applications for registration will be made to her, she will determine those applications and enter successful institutions on the register.
The chief inspector will also be responsible for approving certain changes to provision in independent educational institutions. She will have broader monitoring and enforcement powers under this clause, including powers to remove institutions from the register. It will be the chief inspector who has day-to-day contact with independent educational institutions. Concentrating registration and regulation in one organisation will reduce red tape, particularly for the 1,180 smaller independent schools not in the Independent Schools Council or the Focus Learning Trust. Under current arrangements, non-affiliated schools have to deal directly with Ofsted and DCSF. Many ISC schools already have a relationship with Ofsted, as well as with DCSF, either because Ofsted inspects boarding provision in ISC schools or because it registers or inspects their child care provision.
Overall, 2,019 out of 2,359 independent schools will see a reduction in bureaucracy as a result of these changes. That is because, in future, they will deal with an independent inspectorate and Ofsted rather than with an independent inspectorate, Ofsted and DCSF, or because they will have to deal only with Ofsted, rather than with Ofsted and DCSF. Importantly, the remaining schools will see no increase in burdens and therefore will not be disadvantaged. It will also be a more efficient way for the Department and Ofsted to operate. Unlike at present, there will be no need for paperwork and reports to be shuttled backwards and forwards between the organisations, and Ofsted will be able to draw on the significant body of expertise it has built up in this area. We have not reflected that in the impact assessment, because the estimate of cost savings has not been made. It is a benefit, and the impact assessment tends to focus more on costs than on benefits.
It is worth my saying, however, in response to the exchanges we have just had, that I anticipate significant savings. I cannot predict whether we will move from 18.2 members of staff to approximately 10, but savings will be made, because Ofsted has well-established and substantial computer and other systems to deal with its existing regulatory functions. Those systems can be extended to cover independent schools work, and there will no longer be the need for DCSF to retain separate systems.
Staff at Ofsted can be deployed flexibly to cover peaks and troughs across the full range of its operations. It will no longer need to pass information to DCSF for consideration. All deliberative and administrative work can be done within the same organisation, and they can combine regulation of boarding, child care and education in individual schools, cutting down on duplication in cases where different inspectors check broadly similar requirements for different regulators.
The Minister has given the impression that this is an act of kindness for the independent school sector, reducing their red tape and the necessary number of engagements with officials in his Department and at Ofsted. If such a neat arrangement is appropriate for the independent sector, why does he not consider legislating to streamline the regulation of the state sector along the same lines?
Regulation of state-maintained schools is carried out largely by local authorities. There is a separate inspection by Ofsted, which is an important part of regulation, maintenance of standards and accountability in the maintained school system. I do not, however, think that the two are directly comparable, because of the important role of local authorities and their accountability to local communities. I have no reason to doubt Miriam Rosen’s statement to the Committee that the transfer will result in the efficiencies that I have set out. Ofsted has already put in place processes to deal with the regulation of almost 100,000 child care providers and 2,000 children’s homes. Setting aside the strong arguments for reducing bureaucracy, which provide support for the proposals, I will touch briefly on some of the other misplaced concerns that we have heard.
One such concern is that the transfer of registration to Ofsted and the other provisions in part 4 of the Bill are part of a wider process of “Ofsted-isation”—a horrible word—in the independent sector. I want to reassure the Committee on two points. First, I do not see Ofsted-isation in the negative way that the term was meant or in the negative way that it sounds. Ofsted has an outstanding reputation. One need only look at the statistics: last year, about 30,000 inspections were conducted, and there were only 26 complaints to the independent adjudicator. That is the crux of the discussion on part 4. I am striving to put in place a system that will provide a better service to the majority of institutions in the sector. Ofsted will be able to do that, even for ISC schools, whose concerns were fully represented by the hon. Member for Bognor Regis and Littlehampton.
Secondly, I would not want Members to take from my arguments for Ofsted-isation the belief that there are plans afoot to introduce greater regulatory strictures for the independent sector. Part 4 is deregulatory, concentrating operations in bodies that are best placed to deal with them. The Secretary of State will continue to set the standards against which independent educational institutions are judged. I agree that flexibility and choice are important in the independent sector, and that is why clause 90 provides for the Secretary of State to appoint independent inspectorates for groups of independent educational institutions. I am sure that we will discuss that later. The fact that we are willing to let other inspectorates emerge does not smack of Ofsted-isation.
Other arguments against the transfer have intimated that some ambiguous or misleading wording in the consultation documents renders the whole legislation and its rationale invalid. I recognise that some of the wording could be seen as misleading. As soon as the wording—to which there has been reference—on the regulation of the welfare provision was brought to the attention of officials in my Department, the consultation document was altered on the website. However, the whole consultation was not rendered invalid by a few sentences.
In a minute. May I get my argument out first? The consultation, when read in its entirety, made clear exactly what the proposals were. The Committee will also be reassured to hear that none of the organisations from which we heard evidence missed the consultation. Of the 337 responses received during the consultation on the transfer of registration, 257 were from ISC member schools. To say that those schools were not consulted or that they did not hear about the consultation is palpable nonsense. On 6 July 2007, Mr. Shephard was offered the chance to go through the consultation document with departmental officials. He never took up that offer. As 257 of the 337 responses, many of them in a standard campaign format, were from ISC member schools, I would say that we have had full consultation with that sector. The Independent Schools Inspectorate also responded in full to the consultation.
We are talking about the pre-consultation process, not the consultation itself. If the wording in the consultation is wrong, but is given as justification for creating a unified body, when it will not do so, does the Minister not accept that that is not simply a drafting error to be corrected, but exposes a fundamental flaw in the whole thrust of the policy?
What we were suggesting in the whole consultation was perfectly clear, despite that inaccuracy, which was corrected. I do not accept that the argument stands or falls on that. The hon. Member for Bognor Regis and Littlehampton and I simply disagree.
One further objection to part 4 has been put forward, based on the so-called principle that registration and inspection should be kept in separate bodies. It is not clear to me where that principle is set down. It is certainly not borne out by other examples across the public sector. In the health sector, for example, the Healthcare Commission regulates and inspects private hospitals and independent clinics against national minimum standards set by the Department of Health. To use the ISC’s word, if it is a “referee” that the independent sector is looking for, the sector can, I hope, be reassured.
Part 4 introduces new appeal rights to the Care Standards Tribunal. We plan to extend the role of Ofsted’s independent adjudicator to cover complaints about the quality assurance of independent inspectorates. Ultimately, the Secretary of State, by laying regulations in this House, retains overall responsibility for setting the regulatory regime in the independent sector.
The Minister will recall that I asked Ms Rosen about that. How will he accomplish the extension of the role of the adjudicator? Will it be in legislation or is it an administrative act? When will it happen, because it is clearly important that there should be a referee.
I have just said that the Secretary of State, by laying regulations in the House, retains overall responsibility for setting the regulatory regime. Unless it suddenly occurs to me otherwise, I would answer the hon. Gentleman’s question by saying that we will do that by regulation. The new appeal rights to the Care Standards Tribunal against Ofsted decisions are set out in the Bill. In my view, none of the arguments that have been advanced stand up to scrutiny. Furthermore, I can tell the hon. Gentleman that we do not need to regulate to extend the remit of the independent adjudicator. It is something that we can do with Ofsted without having to legislate.
My response would be similar to the one that I gave to the hon. Member for Bristol, West earlier. Most of the regulation of the maintained sector is carried out by local authorities. The arrangements for the independent sector and for the maintained sector are not comparable.
Would not the savings be likely to be even larger? Registration and regulation is taking place in 150 local authorities of varying degrees of efficiency, from efficient Conservative to less efficient Labour ones—I say that tongue in cheek, but the point is that there are 150 local authorities around the country. The argument must apply tenfold to the efficiency of transferring that requirement to Ofsted in comparison with the transfer of responsibilities from 18 officials in the Department.
I am not quite sure whether the hon. Gentleman is proposing that we move registration into local authorities or into Ofsted. We are debating the registration of independent schools by Ofsted.
As a Government, we are committed to rationalising the complex pattern of multiple scrutiny that service providers and some inspectors experience, and reducing the inspection burden and the variety of approaches that are a feature of a system in which many bodies perform similar tasks. The proposals in this part of the Bill achieve that goal. Ofsted will be able to provide a better, more responsive, more cost-effective service to many schools and independent institutions, integrating the different strands of its activity to provide the proverbial one-stop shop that we are so keen to talk about in a variety of settings. In the light of the benefits to the sector that part 4 will bring, I optimistically ask the hon. Gentleman to withdraw his amendment.
You will not be surprised to know, Mr. Bayley, that I am not impressed by the Minister’s answer. In particular, I am not impressed by his responses on the consultation process. We are talking about very respectable people: the chief executive of the Independent Schools Council, and Christine Ryan, the chief inspector of the Independent Schools Inspectorate. Both those individuals, and the bodies they represent, are deeply unhappy about the consultation and how it was carried out. The Minister should reflect on that unhappiness. Whether or not those bodies were unified at the time or legally separate is irrelevant. They are unhappy, and the Minister should reflected on that.
According to the transcript of Miriam Rosen’s evidence to the Children, Schools and Families Committee on 12 December on Ofsted’s work, Ofsted was
“surprised by the opposition to these proposals.”
It is that surprise that alarms me. There should not be surprises in Government proposals at this level. Having worked at KPMG for 13 years before coming to the House of Commons, I can say that the one thing that was frowned upon was surprises. It is always a sign of poor management when people are surprised by reaction to a policy. They should have been aware in advance that there would be problems. Had a proper pre-consultation process been in place, there would not have been surprises.
I am not convinced, either, by the Minister’s explanation of the policy. He said that there will be no more regulatory strictures, and that there this will be a more cost-effective service. He said that the Government were integrating the strands of regulation, and that there will be a one-stop shop. If that is the case, it applies most to the maintained sector, which is inspected by Ofsted. I see no reason, on the basis of what the Minister has said, why that should not be the case under the Bill, and why he has not proposed moving the registration and regulation of all 23,000 schools in the maintained sector from local authorities to Ofsted. That system is bound to be more efficient if what he said about transferring the process from the DCSF to Ofsted is as efficient as he said. Perhaps it is the Minister’s view that the DCSF is deeply inefficient, particularly while he is there.
It is, and I withdraw the remark. It was an unfair comment.
The thrust of his argument is that DCSF is inefficient in its handling of regulation and registration compared with the way in which that is done in local authorities around the country. That is inconsistent, and does not make sense. None of the policy makes sense. The people who use the current regime think it works marvellously and I do not think we should change things when they are working well. It is extraordinary, and I wonder, echoing the comments of my hon. Friend the Member for North-East Hertfordshire, what the driver is behind this policy. Perhaps the Minister is not aware of what it is. I do not think it is good policy, and it will not lead to efficiencies. I would therefore like to test the opinion of the Committee on amendment No. 124, which simply removes the words “Chief Inspector” from clause 79, and replaces it with the “Secretary of State”.