Minutes of Evidence 26 September 2002

Education Committee

Thursday 26 September 2002


Education and Libraries Bill:
Committee Stage

(NIA 21/01)

Members present:

Mr Kennedy (Chairperson)
Mr S Wilson (Deputy Chairperson)
Mrs E Bell
Mr Gibson
Mr McLaughlin
Mr K Robinson


Mr S Peover )
Mr J Caldwell ) Department of Education
Mr E McCloy )

The Chairperson: Good morning and welcome to the Committee. Copies of questions received during the week from the South Eastern Education and Library Board and the Human Rights Commission will be circulated at the meeting for members’ information. All written submissions received on the Bill should be included in the Committee’s report. The normal procedure is to deal with each clause individually. After witnesses have given a briefing on the clause, members can ask questions.

Mr Peover: Clause 1 sets out the basic provision that introduces the common funding scheme. I told the Committee at our last meeting that existing arrangements do not allow for a common funding scheme. Rather than have a scheme in each board area, another for the Department of Education, one for grant-maintained integrated (GMI) schools and one for grammar schools, statutory provision has been made for a common funding scheme. The purpose of clause 1 is to create a framework for this, to define the schools to which the scheme will apply and to set out the consultation arrangements for it.

The Chairperson: Why are you not required to put an order detailing the formula subject to affirmative, confirmatory or negative resolution before the Assembly? You are seeking fairly far-reaching powers through the Bill. For the purposes of scrutiny and to keep the Committee and the Assembly content, it would be better to make those changes via the democratic process.

Mr Peover: During the general briefing on the Bill, I said that the scheme and the formula are complicated and detailed documents and that they are varied regularly by the Department and its education partners. That has always been the case since LMS was created, and it will continue to be the case under a common scheme because anomalies and hard cases arise. A steering group comprising the Department and its education partners considers amendments to the scheme. The scheme is not only complicated — all the parts are interrelated. It is not simply a matter of changing one element; we have to determine how changing one element will affect the others.

It seems to us appropriate to work with our education partners. We have detailed consultation arrangements in the scheme that require us to take the views of the main partners and schools. We have a mechanism at ground level to agree the details of the best way forward. It did not seem to us that the statutory process of approval for the scheme was desirable or essential.

Mr S Wilson: You do not seem to see a need to talk to the Committee for Education or the Assembly on anything. When I listen to your patronising response and I read your document I wonder if you realise that devolution has taken place. There is no mention in clause 1 of any consultation with this Committee or the Assembly. It may be that we are relegated to "such other bodies and persons" as the Department thinks fit. I hardly think that is the way to treat this elected body on something as important as the amount of money that goes to schools and therefore enables the youngsters of our constituents to be properly educated.

The fact that the scheme is complicated and may require variation should not exclude it from being open to scrutiny. The Committee spent a lot of time responding to your consultation document on the common funding formula, and the way in which you treated that document was to dismiss around a third of the recommendations, some of which were important.

The Chairperson: We will have the opportunity to discuss that at a later meeting.

Mr S Wilson: It is even more important, therefore, that the Department is required to produce the formula for ratification. Can you explain to the Committee why, if it is so impossible for the Department of Education in Northern Ireland to consult and use statutory rules to present the formula for funding schools, it can be done in England and Wales? Is it because we might understand the formula less well than politicians in England and Wales; or is it simply that you want to live in splendid isolation in Rathgael House?

Mr Peover: I am not sure that I understand the reference to England and Wales, and I do not understand Mr Wilson’s point. In England and Wales, LMS schemes are operated by local authorities.

The Chairperson: I understand that in England and Wales the fair funding regulations are remade each year.

Mr Peover: They do not set out the detail of LMS schemes in each local education authority’s area.

The Chairperson: There is a regulation by which the democratic process can make a serious input. That is the point.

Mr Peover: I can only reiterate my point. The Department’s view is that the detail of a scheme of this type, which is only one among many that the education service operates under, is not suitable to be subject to a statutory process. When changes are made on a regular and continual basis, the impact of one proposal for change on all the other aspects of the formula must be modelled before it can be run. That has been the experience of the education and library boards. They do not simply introduce changes as a matter of conceptual scrutiny of the formula. A proposal is brought to them; suggestions are made; and they are modelled against the impact of that change on not only the group of schools affected, but on all schools across the board’s area and on all other aspects of the formula.

I am not trying to be patronising. It is not that the Department is cleverer than other people, but that the formula needs to be modelled against a set of data. Those data have to be run through fully. It is a considerable and complicated process, which the Department does not believe to be appropriate for a process of statutory approval.

Mrs E Bell: Although I do not associate myself with Mr Wilson’s remarks, the Bill does give the Department far-reaching powers, and there needs to be more processing before legislation is produced. The Committee needs to be informed as much as possible about what the modifications are and what the Department does to deal with them.

I want to ask about clause 1(6), which, is about consultation. Having been a member of several boards of governors, I worry about their responsibilities within this clause. It states that

"Each board shall, in such manner as the Department may direct —

(a) consult the Board of Governors of every relevant controlled and maintained school in its area about the draft scheme".

Are you content that that will be done properly and that it will be done efficiently, so that everyone concerned is clear about how it is implemented? It states in subsection (b):

"inform the Department of the outcome of those consultations."

Is that a statutory duty on the boards? Should they inform the Department in an unofficial manner?

Mr Peover: It is a statutory requirement to inform the Department. It expects boards to consult every Board of Governors, as they are currently required to do.

Mrs E Bell: I understand the difficulties that arise from that.

Mr Peover: I do not minimise the difficulties. Boards of Governors largely comprise lay people with many responsibilities, and the formal operations are complicated. Ultimately, it is important that boards of governors, which are advised by their senior management teams in schools, principals and vice-principals and so on, are able to consider the effect of the formula on their particular schools.

It has always been a principle of LMS that schools are consulted at various stages of the process, because they can judge how changes affect them. That is simply progressing what the Department believes has been good practice with regard to the existing LMS formula. If anything, it is more necessary to make that formula stronger.

The Chairperson: Will you clarify the position? Is the Department trying to get power to bring in a formula after consultation, either with or without modification? In other words, will it do what it likes?

Mr Peover: That is not my interpretation of the matter.

The Chairperson: Is it a fair interpretation?

Mr Peover: No, it is not a fair interpretation. A variety of views will be expressed in any consultation about change. Some people will like the change; some will be indifferent to it; and some will oppose it. Some organisation, whether the education and library board, the Department, or both, must decide how to proceed. Someone has to be responsible for decision making when different views expressed by various interest groups about the effects of the change are involved.

The Chairperson: Is it unreasonable for the Committee or the Assembly to expect to make a greater contribution than that which the Department envisages?

Mr Peover: It is entirely reasonable. We sent a draft of the common funding scheme to the Committee, and we envisage pursuing that process and consulting the Committee about the scheme and the formula. We have undertaken to offer the Committee an illustrative assessment of the impact of the common formula when we have enough information on the outcome of the current budget round and pupil projections. We intend to be as open and transparent as possible. Schools will have a budget, and they will know what the impact is. There is no point in hiding it. Schools must make their input based on as much information as possible.

The Chairperson: We will be returning to the Committee’s recommendation.

Mr S Wilson: Mr Peover, if you intend to allow the Committee to see, and be consulted on, the proposals — I assume that it is a body that you think fit — and to see the outworking of that, why should the Assembly not make the final decision? It will affect so many people across Northern Ireland. Will the scheme not have more authority if it has the imprimatur of the Assembly, rather than just that of officials? What is the Department running away from? As it is going to explain the model, the impact on schools and the changes, why should the Assembly not make the final decision on whether those changes will be desirable?

Mr Peover: The Department is not running away from anything. The consultation process, as described in the legislation, is as open as possible. All the interested parties, including the management authorities and individual schools, are in involved. They can make representations to the Department, their managing authority, MLAs, MPs or whoever. The process of consultation and agreement is open.

The scheme is a detailed, practical matter of funding schools, and it did not seem to the Department to be an appropriate subject for statutory clearance. It seemed unnecessarily detailed. The Department is happy to consult all the parties, including the Committee. It has consulted the Committee extensively already and will continue to do so.

Mr S Wilson: What should be more open to account than the amount of money available to a school for the delivery of education? We will all bear the consequences if it is wrong and disadvantages schools in our constituencies. If we are talking about accountable government, that sort of issue should be more open to account than some of the others that the Assembly has a say in.

The Chairperson: We have dealt with the general principles fairly well. I wish to turn to the detail of clauses, including clause 1. Clause 1(10) says that where changes to the scheme are not considered significant by the Department, the need to consult can be waived. What does the Department consider to be significant changes, and what changes would not fall into that category?

Mr Caldwell: That is the standard arrangement which applies in education and library board schemes where there are variations judged significant or otherwise. There is no hard-and-fast rule as to what constitutes a significant difference, but in practice, if it were the simple upgrading of a factor to take account of average teacher salaries, that would not be judged a significant variation. If we completely changed the way a factor operated or introduced a new factor or way of processing the data within a factor, that would be a significant variation, and we should want to consult on it.

The Chairperson: So it is entirely at the discretion of officials.

Mr Caldwell: In precedent and practice, yes.

The Chairperson: And you are obviously content with that.

Mr Caldwell: You can set out a significant variation, but it would be hard to describe the other one.

The Chairperson: Yes. In my experience, it has been very hard to describe anything as being insignificant.

Mr S Wilson: Something is significant to a school if it affects its budget.

The Chairperson: Are there any other questions on anything in clause 1?

Mr McLaughlin: Is there a reason for not involving recognised unions under clause 1(4)?

Mr Peover: There is no specific reason for it. Such other bodies as we see fit can be consulted — anyone.

The Chairperson: Perhaps they are insignificant.

Mr Peover: They are far from that.

Mr McLaughlin: You have not specified them.

Mr Peover: No, we have not. What we have specified are the —

Mr McLaughlin: Why did you not specify the unions?

Mr Peover: The existing local management of schools schemes are operated by education and library boards, and they are required to consult not only schools but also the CCMS in relation to the sector. The Department consults the grant-maintained integrated and voluntary grammar school sectors.

The managing authorities have been the providers of funding under existing local management of schools schemes. It seemed appropriate to bring them into the legislation explicitly as the authorities to be consulted. The chief executives of the education and library boards are accounting officers for the resources in the maintained and controlled schools in their areas. They have personal financial responsibility, as does the board, so we felt it desirable to specify the boards and the CCMS in the legislation as groups which must be consulted as part of the process of preparing draft schemes. It is a transfer of responsibility from the boards to us in the Department. That is the rationale for having them there.

Mr McLaughlin: All parties in the Assembly, as well as society in general, would recognise that teachers and their unions are key stakeholders in the education system and should be specified as of right.

Mr Peover: We too recognise that they are key stakeholders, and we have mechanisms for consulting teaching unions on issues to do with policy, salaries and conditions of service through the negotiating machinery. We regularly consult the teachers’ unions. To date, they have never been specified under local management of schools schemes, but that does not prevent their being consulted. The rationale for that part of the clause is that the current managing authorities are brought forward from the existing legislation into the new legislation.

Mr McLaughlin: Without your trying to improve things as you go on.

Mr Peover: Yes. If I can go back as far as 1989 —

Mr McLaughlin: I presume the existing model would not be changed unless we thought that it could be improved.

Mr Peover: Yes, the rationale behind the process set out in 1989 was that the groups affected by schemes, such as LMS and the Curriculum Advisory and Support Service (CASS), were schools. They knew whether their services would be enhanced or detrimentally affected by any changes and what their priorities and pressures were. Other people can act as proxies and put views on behalf of groups, but schools were the bedrock of the consultation, and that concept is maintained in the Bill. Every school is consulted on the content and impact of the formula on its circumstances.

The Chairperson: In the common funding formula proposal, the Department intends to fund preparatory departments at 30% of the approved teaching costs. Why is clause 2(7) included? Does that mean that the Department can reduce the funding without consultation or approval from the Assembly?

Mr Peover: The Department has reduced the funding of preparatory departments over several years, and it now runs at 30% of the teaching costs.

The Chairperson: I understand that, but I am not querying the background. We know by how much the Department has reduced the funding of preparatory departments. However, can the Department reduce the funding to nil without consulting with or getting approval from the Assembly? Yes or no?

Mr Peover: A Bill will come before the Assembly. If it is passed, the Assembly will have approved the Department’s power to reduce the subsidies to nil. The Assembly is being —

The Chairperson: So, the answer is yes.

Mr Peover: The question was whether the Department would reduce funding without consulting the Assembly. The Assembly is being consulted through the Committee Stage of the Bill, and the power to enable that reduction is being included in the Bill.

The Chairperson: Yes, but —

Mr Peover: The Department would not just announce that from next September it will reduce the funding for preparatory schools to nil. The Department always consults with education partners and schools before changes are made. It is merely a proposal that the Bill contain a provision to reduce funding to nil.

Mr S Wilson: Why is that provision being sought?

Mr Peover: The Department has reduced the subsidy, and the provision is being sought to enable us to reduce the funding to nil. The rationale is that the only real admissions criterion for preparatory departments is the parents’ ability to pay the fees. We have more than enough primary school places, so there is no rationale for providing a subsidy to a fee-paying arrangement.

Mr S Wilson: According to the Programme for Government, you are going to subsidise Irish-medium and integrated schools, even though there is surplus accommodation, so your argument is a bit thin.

Mr Peover: It is not thin. We do not subsidise Irish- medium schools. We meet the costs of Irish-medium and grant-maintained integrated schools because, so far as possible, we are required to provide education according to the wishes of parents. Preparatory schools have no distinctive ethos, background or religious traditions. They are primary schools on the sites of grammar schools.

Mr S Wilson: Yes, but parents have chosen them.

Mr Peover: No one is required to cater for every choice that parents make.

Mr S Wilson: Are you saying that some choices are more important than others?

Mr Peover: Yes.

Mr S Wilson: Oh right. Thank you very much.

Mr Peover: Of course they are. How else —

Mr S Wilson: And the Department, without consulting the Assembly, will be the final arbiter on the provision.

Mr Peover: As I said earlier, the Department will submit proposals if it seeks to amend legislation, such as that to change the rates of subsidy to schools, but current legislation allows us to meet the expectations of parents if it does not involve unreasonable public expenditure. The question is: what is unreasonable public expenditure? The Assembly could debate any proposal to remove subsidies from preparatory departments. In the past we have taken the line that, in the main, there are more than enough primary school places in the controlled and maintained sectors. There is no rationale for heavily subsidising what is effectively a form of private education.

The Chairperson: Could not the same argument be made in respect of the integrated sector and the Irish- medium sector? For instance, provision could be made for a more natural integration or to enable certain schools to focus on teaching Irish— it could be taught on a widespread basis in most of the maintained sector. However, instead, special arrangements have been entered into for those sectors. Clearly, this has more to do with the politics of envy.

Mr Peover: Which is more to do with the politics of envy?

The Chairperson: The politics of envy are that you are not prepared to give funding to parents who have a perfect right to choose to send their child to a preparatory school. Why are you being inconsistent?

Mr Peover: It is not inconsistent. What distinctive features do preparatory departments have that ordinary primary schools do not have?

The Chairperson: It is to do with the principle of parental choice that you have already mentioned.

Mr Peover: Why do parents choose to send their children to preparatory schools? What distinctive features attract parents to those schools?

The Chairperson: They choose to have their children educated in that way. They are not asking for 100% funding.

Mr Peover: Why do they make that choice? Funding is available for parents, if their requests can be fulfilled within the controlled or the maintained sectors. In some cases, they may also be fulfilled in integrated Irish-medium schools. There are some controlled and integrated schools in the controlled sector. There are also grant- maintained integrated schools. Some Irish-medium units are part of the maintained sector, but there are also free-standing Irish-medium schools. All those choices are available to parents, and they are distinctive choices. What distinctive aspects of preparatory education justify the public purse’s meeting the costs, either partially or fully?

Mr S Wilson: Parents who send their youngsters to preparatory schools also pay into that public purse. You are not dispensing largesse to people who have not made a contribution. It is nonsense to suggest that this is a gift to those people — they have already made a contribution to the public purse.

Mr Peover: The basic point remains: what is the rationale for providing a subsidy for preparatory departments when the form of education that they offer is available in controlled and maintained schools where we have surplus places? If the controlled and maintained schools were full and extra capacity was needed, I could understand the rationale for effectively buying places in other types of schools. However, no such restrictions exist — plenty of places are available.

The Chairperson: The Department would incur a cost if pupils from preparatory departments were driven into either the controlled or the maintained sector. Why then is the Department not prepared to subsidise preparatory departments? Is it because you consider that form of education to be a privilege or in some way inconsistent with certain social outcomes? Some of us get the rather uneasy feeling that the boot is aimed at the preparatory sector in particular. It is a small sector, but it is being dealt with on a political basis. It is almost a political agenda that finally puts that sector to bed.

Mr Peover: You cannot expect me to comment on political agendas. As far as we are concerned, there is a long-standing arrangement under which preparatory departments receive partial funding. Over the years, we have taken the view that that arrangement is not defensible given that the needs of the children concerned could be more than adequately met in the mainstream sectors.

Over the years we have progressively reduced the subsidy to its current level of 30%. I do not see how that can be portrayed as political, because it is about continuing change in the education system. If someone could provide me with a rationale about the form of education on offer in the preparatory departments and how it is distinct from that offered in a mainstream primary school, perhaps I could see the rationale for a subsidy. However, I have not seen a distinctive argument about their particular features that justify their being funded outside the normal system.

Mr S Wilson: The rationale that you give for other sectors is that choice should be paramount. If you accept the principle of parental choice, it is total arrogance on your part then to suggest that some choices are acceptable but others are not.

Mr Peover: I do not think that you should paraphrase what I say, because that is not what I said.

Mr S Wilson: That is what you said, and Hansard will show it.

Mr Peover: I did not say that parental choice was paramount; I said that under article 44 of the Education and Libraries Board (Northern Ireland) Order 1986 the Department is obliged to make provision for parents to exercise choice, but not where unreasonable public expenditure is involved. We acknowledge that parents want to make distinctive choices for the maintained sector, the controlled sector and for groups such as the integrated sector and the Irish-medium sector where distinctive forms of education are on offer. If someone can show how the form of education on offer in a preparatory department is distinct from that in a primary school, we will certainly consider it, but I am not aware of any rationale that would say that that is a distinctive choice.

The Chairperson: We have exercised that point very well.

Mr S Wilson: Clause 2(2) says that

"The common funding scheme may include such other provisions…as appear to the Department to be necessary or expedient in connection with the funding of relevant schools."

Clause 2(5)(c) says that the common funding formula

"may include provision taking into account factors affecting the needs of individual schools… subject to variation from school to school".

Clause 2(5)(b) says that the common funding formula

"may include provision for taking into account factors affecting particular needs of any class or description of school".

Are we having a common funding formula or not? If you are going to make all these variations, how do you then maintain that this is a common formula funding?

Mr Peover: I fully understand that point. As we have a very diverse education system with different types of schools that have different relationships with managing authorities, there is a need in the scheme to provide for a very large common core, particularly on issues such as age-weighted pupil units. Other points must also be considered; for example, some schools must meet their own insurance, some must meet part of their administration costs, some operate on a cash basis — there are many differences between types of schools. The legislation for the formula and the formula itself must allow for as large a degree of commonality as possible, given our variety of types of schools.

Mr S Wilson: Is it not going to be a common formula?

Mr Peover: If by "common" you mean regardless of whether a school is a grammar school, an integrated school, a maintained secondary school, a controlled grammar, or controlled secondary school, it will not be entirely common; there will be differences which should relate only to objective factors about the nature of the school, not to the fact that it is in one area rather than another, or that it is being funded by the Department rather than the boards, or being funded by the Western Board rather than the Belfast Board and so forth. We are looking for a formula, which, as far as the common features are concerned, will not differ between schools of different types in issues such as pupil numbers, accommodation and sports facilities. However, where there are real, substantial and significant differences between schools that affect how they operate, it would be unfair for the formula not to have some regard to that.

The last time we discussed the Bill, I said that we are not seeking to make all schools the same. The Chairperson asked if this is a way of forcing grammar schools into the controlled or maintained sectors. I said that it is not; it does not change the ethos or traditions of any school. It acknowledges that schools have always had differences in status and different needs because they have traditionally met different aspects of costs themselves. This is not easy: it is common as far as we can make it common, but there will be areas of difference that must be reflected.

Mr Gibson: Clause 2(10) is more or less a variation of what we have been discussing. It relates to awarding money outside the common formula. In what sort of circumstances would that be used? In other words, what departure would be necessary to give additional money that is not already dealt with?

Mr Caldwell: That is again part and parcel of all current local management of schools arrangements. That is the amount of funding known as "excepted items" that boards — and the Department in the case of grant- maintained integrated and voluntary grammar schools — use when schools have a higher incidence of substitution because of long-term sickness or statemented children. Those costs have always been held centrally because there is no formulaic way of distributing the money in advance of a school year. They are held centrally and claimed back by schools. The common scheme introduces a completely common set of arrangements for the claiming back process.

Mr Gibson: That is really an additional common formula?

Mr Caldwell: Except it is not a formula. It is a common claiming process. There is a high degree of harmonisation in that already, but this standardises it.

Mr K Robinson: In clause 2(11), how likely is it — or historically how many times has it happened — that a school would open, close or amalgamate in the middle of as opposed to the beginning or end of a school year? Is this provision included to give advantage to one or a couple of particular types of school management over the traditional school management types?

Mr Peover: It does not happen often. It has been happening less often in recent years than before. Under the development proposal process that we now have, we expect school authorities to adhere to a timetable. That is for a variety of reasons, not least so that parents know whether a school will be open at the start of a school year. The process will ensure that most development proposals will result in schools opening from 1 September in whatever year it might be.

However, schools open occasionally at times other than at the start of a school year. It is not common, but it has happened in the smaller sectors. It may happen because a school is dependent on building work that is delayed beyond the start of a school year. There are circumstances in which a school may open or close during a school year, but you are right that it is rare.

Mr S Wilson: The import of clause 2(1)(b):

"provides for the common funding scheme to require each ELB to delegate to the Board of Governors of each relevant controlled or maintained school its budget allocation for each financial year."

Sorry, that is not the one that I meant.

The Chairperson: We will move to clause 3. Do you have any comment, Mr Peover?

Mr Peover: Clause 3 is taking forward existing provisions in legislation to enable conditions to be applied under the scheme or in accordance with the scheme, via boards and so on. It is designed simply to enable some conditions to be applied to deal with any problems that might arise in a school.

The Chairperson: Is clause 3 not contrary to the ethos of the local management of schools funding, in that it provides for restrictions to be placed on Boards of Governors with regard to what they can and cannot do without the approval of the relevant education and library board? Will the clause also apply to voluntary grammar and grant-maintained integrated schools?

Mr Caldwell: These arrangements apply only to education and library board controlled and maintained schools. The funding arrangements for voluntary grammar and grant-maintained schools are different because, as they receive cash, they are subject to a financial memorandum that must be agreed with the Department. In effect, the memorandum is the contract between the Department and the school. A document was issued, which we sent to the Committee, that replaced part of the local management of schools schemes that boards published. It set out the financial management arrangements that should exist between the chief executive of the education and library board, as the accounting officer, and the Board of Governors. It also set out the conditions on which the school is given a delegated budget.

The Chairperson: In that case, could the Department place restrictions on the voluntary grammar and grant- maintained integrated schools?

Mr Peover: The Department has done so. The purpose of the financial memorandum is to ensure regularity and propriety in the way that schools handle public money.

Mr Gibson: Are you saying that, regardless of the administration of a school, it is the responsibility of the various Boards of Governors to ensure that there is a common funding formula?

Mr Peover: Yes. We must ensure that control can be exercised over how schools spend their budgets.

Mr K Robinson: If we are discussing school Boards of Governors, I should declare an interest.

The Chairperson: That probably applies to almost everybody here. We could all declare something — other than a unilateral declaration of independence.

Mr Peover: Clause 4 is a basic provision to ensure that the Boards of Governors have decision-making powers over their delegated budgets. It requires that the amounts be put at the disposal of a Board of Governors for each financial year. It is part of the scheme under which a school’s budget share is determined and then made available to the Board of Governors, which has discretion in the allocation of resources to staffing, books and materials.

The Chairperson: The Transferor Representatives’ Council has questioned the need to include the words "under subsection 4" in clause 4(5).

Mr Peover: Subsection 5 exists to ensure that people who sit on Boards of Governors are not personally liable for decisions made by the board, if those decisions are challenged. When Boards of Governors took on these responsibilities, under the Education Reform (Northern Ireland) Order 1989, there was a great deal of concern that individuals, who served on boards on a voluntary, unpaid basis, might become personally liable if a legal challenge were made to the actions of the board. Clause 5 is a way of ensuring that the board is a corporate entity for the purposes of such decisions.

The Chairperson: The view of the Transferor Representatives’ Council is that that should be clarified to ensure that

"members of the Board of Governors of a school shall not incur any personal liability in respect of anything done in good faith in the exercise or purported exercise of their powers".

Mr S Wilson: What does the term "in good faith" mean?

The Chairperson: Presumably, it means a great deal to church representatives.

Mr Peover: One could envisage circumstances in which, despite the advice of an education and library board, a Board of Governors wilfully made an appointment that was not in accordance with procedures. Such action would not be considered to have been taken in good faith.

You are asking why is there a restriction under subsection (4) and if it could be removed. We would certainly consider that. I would need to check with our legal advisers to see if there is any particular rationale. The general intention is that Boards of Governors, when exercising their functions, should not be individually liable in law for decisions made by the board, unless there is some malfeasance or deliberate maliciousness.

The Chairperson: Are there any other questions on clause 4? Are we happy with clauses 5, 6 and 7? Clauses 8, 9 and 10 deal with the resource allocations plans — the funding and the accounts of the boards.

Mr Peover: We had financial schemes that boards submitted to the Department which outlined their intended spending for the year ahead under various categories. The arrangements now are for resource allocation plans, and those are more detailed and give more information about the way in which boards propose to use their resources. Those provisions will enable the introduction of that regime, together with resource budgeting, et cetera, which are all part of the general Government trend to improve the standard of accounting and oversight in the public sector.

The Chairperson: We were wondering why clauses 8,9 and 10 refer to "the Department" rather than to "the Department of Education"?

Mr Peover: In the interpretation of the Bill "the Department" is the Department of Education, and we are adding in the other Departments specifically. When a Bill covers a particular area — for example, education — it is normal for "the Department" to be the relevant Department.

The Chairperson: Are the draftsmen being careful with words?

Mr Peover: The Interpretation Act 1978 has always allowed "male" to cover "male and female", and there are various conventions under which legislation is interpreted. That is one of those conventions.

Mr McLaughlin: It does not mean "the management".

The Chairperson: The CCMS said that it has not been possible to include audited accounts in the annual report in the timescale laid down. Does clause 10 need to be amended to enable a statement of unaudited accounts to be included, with the agreement of the Northern Ireland Audit Office?

Mr Peover: I am not sure that the Northern Ireland Audit Office would be happy with that.

Mr McCloy: The complexities of moving from cash accounting to resource accounting have proved difficult for boards to adapt to and for the audit arrangements to be as effective and efficient. We hope that when these provisions take effect, from 2003-04, the Northern Ireland Audit Office will be able to conform to the timescales laid down.

The Chairperson: Surely CCMS would be expected to conform to the timescales and not the audit office?

Mr Peover: The Audit Office has auditors. All public bodies are required to conform to the timetable for the submission of their accounts, and that is tighter under current arrangements than it used to be.

The Chairperson: We move to clauses 11 to 14 on best value and deal with each separately, starting with clause 11.

Mr Peover: Best value is the replacement for the previous arrangements under which boards were required to test their services competitively. Best value continues to refer to the three Es of economy, efficiency and effectiveness. It also incorporates current approaches to improving the quality of services, particularly consulting the users of services about the way in which they are provided.

It is a different regime, a different approach, to ensuring high-quality and good-value services. As I said the last time this was discussed, the boards voluntarily adopted it and have been engaged in it for some time. Several exercises have been carried out, and a best-value unit has been set up. Outdated arrangements have been replaced by the statutory duty of best value.

The Chairperson: Are the provisions the same as those under which councils now operate?

Mr Peover: Yes. The drafting of these provisions was delayed until the outcome of the discussions on the best-value duty for local authorities was clear.

The Chairperson: Why does the legislation allow boards to decide how to do their duties rather than prescribe the method?

Mr Peover: The method is not prescribed; boards can take on projects and are required to examine areas of their services. Boards are expected to identify their most fruitful areas, as they have done until now, and to pursue investigations. It is preferred — and it makes sense — that that is done collectively rather than individually, since the five boards provide broadly similar services to the schools in their areas. Perhaps Mr McCloy will comment on the approaches taken by the boards.

Mr McCloy: Fundamental reviews of services across the boards are carried out centrally. Similarly, each board has facilities for best-value reviews of specific services in its area. The Department monitors the action plans which stem from them and receives copies of reports and outcomes. Monitoring ensures that effective action is taken to ensure best practice when providing services.

The Chairperson: In respect of clause 11(1), there are variations. The NEELB has suggested including a reference to quality of service. The NASUWT wants health and safety requirements and, with Unison, equality added to the issues to which a board must have regard. What is the Department’s view?

Mr Peover: There are statutory obligations with equality, and I doubt the need to replicate the duty on employers which exists in equality legislation. With regard to quality, "effective" means a service which provides what is needed in an appropriate and relevant way. A poor-quality service is not effective. If it is not what people need, and the intended outcomes are not achieved, I do not know under what criterion it could be regarded as a high-quality service. Efficiency, effectiveness and economy pick up the core requirements. An effective service achieves its objectives and is economic and efficient. That is good quality, and I should be surprised if any of the boards want to provide poor-quality services.

Health and safety is a requirement in its own right. There is no impact in a passing two-word reference to something which is elsewhere the subject of detailed statutory provision. I should expect the draftsman to be dubious about attempting to capture in short form a complex set of statutory duties which are specified in legislation and in good practice guides in other settings.

The Chairperson: The draftsman appears to be a cautious individual. If members have no further comments on clause 11, we will move on to clause 12. What is the rationale behind clause 12?

Mr McCloy: The existing provision in article 20 of the Education and Libraries (Northern Ireland) Order 1993 lists some non-commercial considerations which boards must exclude when awarding contracts. The Order-making power will be subject to the approval of the Assembly and is in recognition that some of these non-commercial issues can affect the actual performance of a contractor in relation to value for money. It replicates the provisions in section 2 of the Local Government (Best Value) Act (Northern Ireland) 2002 that are applied to local councils now.

Mr S Wilson: What will be the procedure for seeking Assembly approval?

Mr McCloy: It is an Order.

Mr S Wilson: It just says that a draft Order will be laid before the Assembly for resolution. Will that be by negative resolution, or in what way will the Assembly deal with it?

Mr McCloy: By affirmative resolution of the Assembly.

Mr Peover: I will check that with our legal adviser, but my impression is that it is by affirmative resolution of the Order, which will have to be voted on in the Assembly.

The Chairperson: It is good to know that the Assembly is useful for something.

Mr Gibson: What will be the effect of clause 12 on the public finance initiatives or the public-private partnership contracts?

Mr Peover: Will you repeat that, Mr Gibson?

Mr Gibson: We are discussing the clause on non- commercial interests, and the public-private-partnership contracts will all have a commercial interest, as they are commercial ventures.

Mr Peover: That is the case. Public-private-partnership contracts are —

Mr Gibson: Will clause 12 have an effect on those contracts?

Mr Peover: It will not affect public-private-partnership contracts. The clause refers to considerations that boards must take into account when letting contracts for services, which they would otherwise provide themselves. In a public-private-partnership contract the specification is drawn up and put out to tender in the Official Journal of the European Communities, and prospective contractors can tender against that specification and include in their tender proposals to undertake, for example, cleaning or catering services. Those proposals are tested against value for money or what it would cost the public sector to provide the services itself.

A separate process is undertaken to examine a contract. If you are employing a builder to construct an extension, you could undertake the painting yourself — the builder does not get involved in that. He may submit a tender which quotes £3,000 for the job, including painting and decorating. The job can then be costed without the painting-and-decorating aspect. That complicated process goes on in public-private partnerships but is separate from this approach.

Mr Gibson: Does a conflict not arise?

Mr Peover: I do not think there is a conflict.

Mr Gibson: This is to do with a non-commercial operation, whereas public-private partnerships are commercial contracts.

Mr Peover: That is right. Public-private partnerships are contracts where the private sector is expected to take on a substantial proportion of the risk, and it tenders on the basis that it will provide services for a certain cost, which is tested against the public-sector cost of providing those services.

The Chairperson: We will go on to clause 13, which is to be put to the Assembly for affirmative or negative resolution. Is it likely to be affirmative?

Mr Peover: Yes. I shall check with the lawyers to make sure that I am not misinterpreting them.

The Chairperson: Clause 14 deals with the repeal of competition provisions. We shall move on to clause 27, which is entitled "Determination of travelling and subsistence allowances". Is there anything to prevent a board ignoring the consultation and determining its own rates? Not that they would do that.

Mr Peover: I am sure they would not. There are provisions in previous education legislation that require an education body to conform to the directions of the Department on its statutory duties. If someone behaved totally unreasonably we would issue a direction, but boards always act in accordance with their statutory duties.

Mr McCloy: Perhaps I could explain the rationale behind that. Under existing legislation, the Department is required to determine the rates of travelling and subsistence allowances. The new legislation places that responsibility on education and library boards, which must seek the Department’s approval of those rates. The reason is to allow a comparable rate to other public bodies. The boards do not have to apply on an annual basis to get them uplifted. That approval extends to uprating due to inflation. It is really an administrative change to make the system more streamlined.

Mr S Wilson: Does it make the system more streamlined? Is this not just a con trick? On one hand you are arguing that it gives more autonomy to the education and library boards, and on the other you are saying that the Department must approve the boards’ decisions. Are you saying that if the boards submit wildly different rates, the Department will approve them? Does it not add to the bureaucracy? A board discusses the matter, makes a decision and then has to seek departmental approval. That is just an illusion, is it not? The Department still has the final say. Why pretend that the boards have any say in the matter? Every decision has to be approved by the Department.

Mr McCloy: The education and library boards, as the employers, generally think that they should have that role, because they negotiate terms and conditions of service with their staff. The existing legislation was out of step with the board’s requirement to negotiate the rates of allowances. From an operational point of view, the boards do it on a combined basis. They consult on the relevant areas with the staff commission, which is the central co-ordinating organisation for the operation of the industrial-relations side.

Mr S Wilson: Do you envisage a situation in which, for example, the Belfast Board set different rates from the North Eastern board, and the Department’s approving that?

Mr McCloy: No. We would not approve that.

The Chairperson: Are they allowed to use red diesel?

Mr S Wilson: So the Department makes the final decision. It just strikes me as odd that you grant that power to the education and library board, yet it has to seek your approval. I imagined that you would tell me that the Department would make sure that rates were similar across the Province anyway. Why not just set them in the first place?

Mr Peover: They are set by negotiation. It is just conceivable that there might be circumstances in which different rates were justifiable. I cannot think of one.

The Chairperson: I come to clause 28 about officers of boards. How will that clause change current arrangements?

Mr Peover: It does not change them a great deal in practice. There has always been a requirement for chief executives and chief librarians to be appointed, and the clause acknowledges the existence of the Department of Culture, Arts and Leisure and its role in the library service. When devolution took place, responsibility for the library service moved to the Department of Culture, Arts and Leisure. The clause formalises the arrangements under which libraries are now part of that. However, it has always been a requirement for boards to appoint a fit person as the chief executive and for their decision to be subject to departmental approval.

The Chairperson: We shall not pursue that. Will the Department still be able to direct that certain officers must not be removed from office?

Mr McCloy: No. That provision is removed.

The Chairperson: Should clause 83(1)(a) of the Education and Libraries (Northern Ireland) Order 1986 be amended to include references to the chief executive’s role as accounting officer?

Mr Peover: No. Before the boards’ chief executives were chief executives, they were chief education officers, and the general requirement is for local education authorities to have a chief education officer too. It merely says that the chief executive of the board is the chief education officer and secretary to the board. It spells out in statutory form the responsibilities of the chief executive for the board itself. The accounting officer responsibilities are placed on him or her by means of a letter issued by the Department’s accounting officer nominating him or her as the accounting officer and setting out the duties, so there is a separate process of specification as accounting officer.

The Chairperson: The North Eastern Board drew that to our attention. I thought that it ought to be so.

Mr Peover: It is not necessary, since accounting officer duties were established long since.

The Chairperson: But you will consider it.

Mr Peover: I shall certainly consider it, but I do not feel it is necessary.

The Chairperson: We now come to clause 29, which deals with principals on teaching appointments committees. What is the purpose of the change, and why is it necessary?

Mr Peover: The education and library boards have told us that it can be difficult to have adequate teacher representation on appointments committees. They are keen to have a panel on which to draw, perhaps with people from outside the board area with particular expertise or from a particular type of school. It is intended to reflect the concerns expressed by boards and the representations made to us for greater flexibility in the arrangements for teaching appointments committees.

The Chairperson: Will this change give principals from another board area voting rights? Was consideration given to appointing them in an advisory capacity only?

Mr Peover: That sometimes happens at present. If you wanted someone with a particular background, that person could sit in on a teaching appointments committee as an observer and adviser.

The Chairperson: So such people cannot vote.

Mr Peover: No, they cannot. These arrangements would allow people to be members of the committee rather than observers, so their role would change. As I say, it is in response to comments from boards that it can sometimes be an onerous duty for individuals caught up in many appointments. They would rather have a panel on which they could draw than simply two individuals involved continually, particularly at heavy times of the year when many appointments are made.

The Chairperson: The school population is not too large, so teaching staff, who seek appointments, have regular contact with each other.

Mr Peover: Yes.

The Chairperson: Would that put anyone in an invidious position?

Mr Peover: It is to be hoped that it would not. Such decisions are made at local level. When inviting people to sit on an interview panel, the Board of Governors must ensure that it does not compromise the selection process. As Mr K Robinson said, people must declare an interest if they discover that a member of their staff or families is a candidate. There are arrangements in the standing orders for teacher appointment committees that should deal with such situations.

The Chairperson: How will clause 36 on the annual report of boards change their accounting arrangements?

Mr McCloy: Under current legislation, the Department is required to publish accounts for the five education and library boards and to lay them before the Assembly. Non-departmental public bodies have a responsibility to publish their accounts as part of their annual reports, and clauses 10 and 36 require boards, if they have published their annual reports, including accounts, to lay them before the Assembly. The rationale for omitting the requirement for a summary is that, rather than the previous cashed-based accounts, there is a movement to accruals- based accounts. Consolidation of accruals accounts is misleading because inter-board transactions are included in each set. Although the Department will provide a limited summary in the intervening period to conform to existing legislation, a board’s annual report, including accounts, will be a more informative document.

The Chairperson: Why include clause 1 (12) when the transfer of the funding responsibility for voluntary grammar schools and grant-maintained integrated schools to the education and library boards has been deferred until the outcome of the review of public administration?

Mr Peover: Clause 1(12) is included because it is still the Department’s intention to transfer funding responsibility from the Department to whatever organisation exists after the review of public administration. Clause 1(12) provides the statutory cover for a date to be set on which that transfer can happen. We do not know what the outcome of the review of public administration will be. It may leave the current arrangements in place; it may create radically different arrangements. Therefore, it seems pointless to transfer that responsibility now, when it was intended to transfer it on the implementation date of the common funding formula. Given the potential change in structures, it does not seem sensible to implement the transfer statutorily. When the Department knows the new structures, the transfer will happen on an appointed day.

The Chairperson: Is it reasonable to say that it is not anticipated that the change will happen soon?

Mr Peover: The timetable for the review of public administration assumes that it will publish a report in December 2003, which will be subject to extensive discussion and consultation.

The Chairperson: Thank you for attending the meeting. It has been a useful and, at times, robust exchange.

Mr Peover: We will come back to the Committee on the legal nature of the Orders.

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