The party has not abolished grant-maintained schools but it will deprive them of powers central to their status.
Most opted-out schools would be expected to become foundation schools, which would be remarkably similar to other state schools. The party's foundation school plan is a fig leaf that barely conceals its opposition to grant maintained status.
Under the arrangements, opted-out schools would lose the right to set their own admissions policies and those with surplus places would face closure by the council.
Local authorities were well-satisfied when told of the proposals yesterday. A spokeswoman for the local authority-funded Local Schools Information Service said: "It spells the end of grant-maintained status and the beginning of equality and fairness for all pupils."
But Robert Balchin, chairman of the Grant Maintained Schools Foundation, said that opted out schools were being "killed by a thousand cuts".
The document, Diversity and Excellence, says a Labour government would introduce three new categories of school to replace all the existing types, including voluntary-aided church schools, grant-maintained, and city technology colleges.
Foundation schools would have charitable status and stewardship of their own assets. They would have two local authority governors but these would be outnumbered by parent-governors. The paper says "they will offer a new bridge between the powers available to secular and church schools".
The other two types would be community schools similar to existing local authority and voluntary-aided schools. Parents would be given the chance to vote on which of the three categories they want their children's school to join but governors would take the final decision. Some opted-out schools might choose to become aided or community schools. More than 30 per cent of opted-out schools were previously either voluntary aided or controlled.
There are at least two potential areas of conflict between opted-out schools and local authorities. One is admissions, the other is surplus places.
Some opted-out schools have wide catchment areas and tend to attract middle class pupils. Foundation schools would have to agree their admissions policy in the same way as other schools. "The admissions procedure would remain for the school to propose and it would be agreed with the local education authority while an independent arbitration process will be established for cases of disagreement."
Opted-out schools which are former grammar schools and those which have become partly or wholly selective would have to consult local authorities about their admissions policies. A Labour authority might object and the decision would be taken by an independent panel which would take into account the views of local parents and advise the Secretary of Sate.
The document says "our opposition to academic selection at 11 has always been clear. We have never supported grammar schools in their exclusion of children by examination". But it makes it clear that existing grammar schools will not be abolished "without a clear demonstration of support from the parents affected by such a decision".
Local authorities will make proposals to close schools with surplus places, public inquiries will be held and the Secretary of State will have the final say on schools' futures. Since 60 schools opted out to avoid closure or reorganisation and there are 43,000 surplus places in grant-maintained schools, some opted-out schools would almost certainly close. Opted- out schools receive all their money direct from the Government. Council schools must have a minimum of 85 per cent of their budget delegated to them by the council.
Under Labour, all schools would receive funding through the council which would be allowed to keep no more than 10 per cent for central services.
Parents would have more seats on the governing bodies and would outnumber council representatives in all schools.
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