Question time / Is opting out more than cashing in?

Grant-maintained schools: nWhat are they? nIs Labour against them? nAre they better for pupils?

LAST WEEK it was reported that the National Union of Teachers was on the verge of dropping its opposition to opted-out (or grant-maintained) schools. And this week, as we report on page 2, Labour will announce its new policy on the schools. Here, Judith Judd, Education Editor, explains the arguments and the facts behind the most controversial of the Government's educational reforms.

What are opted- out schools?

Schools that have left the local authority and are run by their governors. They receive their funds direct from central government. Local authorities keep back some money to pay for central services such as help for children with learning difficulties but opted-out schools get the lot. They are set up when a majority of parents at a school vote to leave the local authority. Usually, though, it's the head who takes the lead in persuading a school to opt out. If the head is either against it or neutral, it tends not to happen. John Major's old school in Merton, London, voted not to opt out after its head refused to commit himself to either side. The Government has tried to get people to talk about grant-maintained instead of opted-out schools as this sounds less negative. Ministers' latest wheeze, calling them "self-governing state schools" has been even less successful.

Why did opted-out schools start?

Officially, to increase parental choice and raise standards. Kenneth Baker, the former secretary of state for education, said when the opting- out legislation was going through the Commons in 1988: "This will widen choice for many parents in the state-maintained sector, for whom all too often the choice is to take it or leave it. This wider choice will help improve standards in all schools, not just those which opt out . . . as we introduce a competitive spirit into the provision of education." The Conservatives have always been muddled about opting out. Margaret Thatcher saw it as a way of bringing back the 11-plus. She said most schools would opt out. Mr Baker said only a minority would. He wanted it to help schools escape from left-wing authorities more interested in anti-racism than in teaching children to read. And he said opted-out schools should remain comprehensive. She was right. He was wrong. There has been as much opting out from Tory as from Labour councils - Essex, Kent and Lincolnshire have the most - and more than 30 opted-out schools are trying to become grammar schools or to select some of their pupils.

What can opted-out schools do that council schools can't?

The main difference is that opted-out schools can choose which pupils they admit. Pupils are allocated to council schools by the council. Opted- out schools can also apply direct to the secretary of state to become grammar schools. Council schools can't unless the local authority agrees. In opted-out schools, the governors employ staff. In council schools the local authority is the employer.

But don't council schools have more freedom too?

Yes. The 1988 Education Reform Act which set up opted-out schools also said that councils should delegate most education funds to individual schools. The two policies were contradictory because one of the main attractions of opting out was that heads didn't have to make 20 phone calls to the council to get a window fixed and then wait six months for the workmen to turn up.

The Government has kept on increasing the amount councils have to delegate: it is now a minimum of 85 per cent; some councils give as much as 95 per cent.

It was not just the financial arrangements that changed. Council school governors now hire and fire staff, though the local authority is still technically the employer; and councils, which have been frightened by opting out, have become less bossy and patronising towards schools. Some opted-out schools complain that they have swapped one set of bureaucracy and regulation (councils) for another (the Department for Education).

Is it true that they get more money than council schools?

Yes. Ministers started off saying that they wouldn't but have ended up boasting that they do. And the opting-out gravy train has left some opted-out schools with surpluses of more than pounds lm in the bank. The Prime Minister said: "We have made no secret of the fact that grant-maintained schools get preferential treatment in allocating grants to capital expenditure."

All schools in the same area receive the same money for running costs. For opted-out schools this is based on what council schools receive. But opted-out schools can apply for generous capital grants for building. Pate's Grammar School in Gloucestershire, a voluntary-aided school, whose buildings were falling down, has received pounds 5.5m since opting out.

Some get paid twice for services. The rules for schools opting out before 1993 said that they would receive 15 per cent for services such as libraries and advisers that they would have received had they stayed with the council. Since some councils allow only 7 per cent for central services and delegate the rest to schools, opted-out schools are better off. The Government promised to change the rules but recent figures show 447 schools still getting double funding. However, the gravy train is slowing under Treasury pressure.

Is it true that they are full of middle-class children?

A recent parliamentary answer showed that 12.4 per cent of children in opted-out schools get free school meals compared with 17.7 per cent of children in all schools. Middle-class parents have been quick to grasp that if you want a new science lab or sports hall the quickest way to get it is by opting out. They also cottoned on to the fact that it's a good way to stop a school being closed down. Research from Warwick University shows that, while opted-out school heads hold forth about the joys of greater freedom, there are two main reasons for opting out - funds and self-preservation.

Is there any evidence that pupils get better exam results in opted-out schools?

Research from the local-authority-funded Local Schools Information last month suggested their GCSE results didn't match up to their middle- class intake. The Department for Education says it will publish figures showing that, when schools with similar intakes are compared in detail, opted-out schools do better. It admits, however, that the difference will be small.

Is the policy a success?

No. Of a total of 24,526 schools only 1,051 have opted out and the number applying has fallen to a trickle. Margaret Thatcher predicted that opting out would be as popular as council-house sales. John Patten, former secretary of state for education, said at the Conservative party conference two years ago: "I predict that by 1996 a clear majority of secondary schools and a small but growing number of primary schools will have opted out. I will eat my hat if what I have predicted does not come true - garnished." Luckily for his digestion, he has moved on.

Why have the Labour Party and the NUT been against them?

They said the extra funding was unfair and that it was wrong for some schools to get a competitive edge over their rivals. Opted-out schools were seen as "trying to make themselves into second-rate independent schools", according to one critic. Opponents argued that, because opted-out schools controlled their own admissions, they would pick the best pupils. They also said that councils could not plan properly and the number of empty places in schools was growing because schools threatened with closure were allowed to opt out.

Have they changed their minds?

Both Labour and the NUT are still opposed to the present system. At the last election, Labour said the schools should be brought back into local-authority control. It now argues that they can remain distinct from council schools if they get the same funding, agree to more control over their admissions and have some accountability to the local community. Whether the differences between council and opted-out schools under a Labour government would amount to something will not be clear until the party publishes its new policy this week. It is not clear that the NUT has changed tack. Doug McAvoy says he was misquoted and his executive members appear to have given him a slap on the wrist.

Why did Labour change its mind?

Even before Tony Blair sent his son, Euan, to an opted-out school - the London Oratory - it was on the cards that he would want to change a policy which involved turning the clock back. He dislikes the word "back" and thinks that local authorities, like unions, are bad for the party's image. He said that he would not make a choice of school for Euan "on the basis of what is the politically correct thing to do". Labour is also worried about the parental vote in marginal seats.

What difference does it make to childrens' education?

Probably little. If they wanted standards to rise, both Labour and the Conservatives would be better employed worrying less about school organisation and more about what happens in the classroom. The Warwick research shows that parents do not choose opted-out schools because of their status and that opted-out schools remain remarkably like council schools.