The 1988 Education Reform Act gave local authorities the right to take back control of a school’s delegated budget and the powers that go with it - but only where governors were mismanaging the school’s finances. In this case Ealing did have some questions about the handling of Clifton school’s finances, but its real concern was about the quality of education the school was providing.

The authority had offered the school’s then headteacher and governors help and advice but this had not been heeded, according to Alan Parker, currently Ealing’s director of education, but at the time education officer at the Association of Metropolitan Authorities.

The authority’s advice was rejected even after an OFSTED inspection found serious weaknesses at the school. At that point the authority could have sat back and waited for the inspectors to come back to review the situation. If things had still not improved, the inspectors would have said that special measures were needed and it would have been easy for the authority to intervene. But that would have meant waiting another year, an option the LEA rejected.

“The authority felt it would have been failing in its moral responsibilities, if not its legal ones, to allow things to continue to slide till the official mechanisms fell into place,” says Alan Parker.

Instead, the local authority decided to stretch a point and withdraw delegation on the grounds that the school’s failure to deliver an acceptable standard of education amounted to a failure to use its budget properly.

Alan Parker, who in his AMA role was advising Ealing, admits that the authority was “putting a financial spin on a quality argument” but argues that this was a fair construction of the vague wording of the law.

The governors disagreed and appealed to Gillian Shephard, the Secretary of State. But before she had made a decision, financial irregularities came to light which satisfied the Department for Education and Employment that the authority had been justified in taking control of the budget - though not on the grounds of its alleged failure to provide a good standard of education.

Had the provisions of the School Standards and Framework Bill currently going through Parliament already been law, neither the DFEE nor Ealing’s education department would have needed to go through these legal contortions.

The Bill gives local authorities an explicit power to suspend delegation where they are satisfied that pupils’ standards of performance are unacceptably low, as well as where “there has been a serious breakdown in the way the school is managed or governed”. It also allows an authority to step in where a breakdown of discipline threatens staff or pupil safety.

Local authority associations and, to some extent, governors’ organisations, have welcomed the light these provisions cast on previously grey areas. But the jury is still out on whether they will encourage councils to intervene more often.

Pat Petch, chair of the National Governors Council, thinks it will not be any easier for authorities to take powers away from governing bodies under the new regime than it is now.

“We are not talking about an arbitrary removal of powers but of removal at the end of a period during which warning notices would have been sent to the governing body,” she says.

“But even before any of that happened, we would expect as a matter of good practice a good deal of informal communication with the governing body about what was going wrong and what should be happening.”

A code of practice, which the DFEE has sent out for consultation, will govern local authority intervention and set out a series of informal and formal stages that authorities will have to go through before they can take powers away from governing bodies.

“The intention is not that authorities will withdraw delegated budgets more frequently but to make this less likely to happen by virtue of the earlier steps that have been taken,” says Martin Rogers of the Education Network, a think tank funded by local authorities.

No local authority is keen to take on the time-consuming role of surrogate governing body, he claims. The fear of triggering an opt-out ballot also used to act as deterrent. But in recent years the number of governing bodies losing their delegated powers has grown, a trend accelerated by the last government’s 1996 White Paper which recognised that authorities could, after all, have a role in delivering quality.

Most of the schools so far affected have been identified by OFSTED as being in need of special measures. The procedure in these cases, which will not be significantly changed by the Bill, is that the governing body and LEA have to prepare a plan of the action they propose to take to put things right. The authority then has the power to appoint additional governors and give notice of an immediate suspension of delegation. The governing body has no right of appeal to the Secretary of State.

In the past 18 months Lancashire County Council has used the 1988 Act powers to take control of three of its special schools after inspectors found they were in need of special measures.

By intervening the authority has been able to redeploy some of the staff at the schools and in one case to replace the headteacher with an acting head. When the time comes to appoint a permanent head to that school the selection panel will be made up of four governors and four local authority representatives. The authority has also appointed additional governors to help implement action plans.

A spokesman for the authority says all three schools are now moving forward, with one making good progress, but there are no immediate plans to return control of the budgets to their governors.

When a council currently suspends a school’s delegated powers, arrangements revert to what they were before the days of local management.

Governors remain responsible for school discipline and the curriculum but have only an advisory role when it comes to hiring and firing staff and other major decisions.

Once the current education Bill is passed, the suspension of a delegated budget will deprive governors of all their powers over staffing. But the authority will be able to let them take some spending decisions, so long as they comply with any conditions it decides to impose.