Technical and Further Education Bill (HC Bill 82)

A

BILL

TO

Make provision about technical and further education.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Technical education

1 The Institute for Apprenticeships and Technical Education

(1) The Institute for Apprenticeships is renamed the Institute for Apprenticeships
5and Technical Education (referred to in this Act as “the Institute”).

(2) Accordingly, in Part 1 of the Apprenticeships, Skills, Children and Learning
Act 2009—

(a) after “Institute for Apprenticeships”, in each place it occurs, insert “and
Technical Education”;

(b) 10in section ZA1(2) for ““the IfA”” substitute ““the Institute””;

(c) for “IfA’s” in each place it occurs, substitute “Institute’s”;

(d) for “IfA”, in each other place it occurs, substitute “Institute”.

(3) In section 122(3)(g) of that Act for “IfA” substitute “Institute for
Apprenticeships and Technical Education”.

(4) 15In the following provisions after “Institute for Apprenticeships” insert “and
Technical Education”—

(a) Schedule 1 to the Superannuation Act 1972;

(b) Part 6 of Schedule 1 to the Freedom of Information Act 2000.

(5) Schedule 1—

(a) 20confers functions on the Institute in relation to technical education
qualifications,

(b) makes provision about the sharing of information,

Technical and Further Education BillPage 2

(c) makes provision about the charging of fees by the Institute in
connection with evaluations of the quality of apprenticeship
assessments, and

(d) makes transitional provision.

5Part 2 Further education bodies: insolvency etc

CHAPTER 1 Introduction

2 Overview

This Part is mainly about the insolvency of further education bodies—

(a) 10Chapter 2 ensures that normal insolvency procedures apply to further
education bodies that are statutory corporations;

(b) Chapter 3 restricts the use of normal insolvency procedures;

(c) Chapter 4 creates a special administration regime;

(d) Chapter 5 is about the treatment of trust property held by certain
15bodies;

(e) Chapter 6 imposes restrictions on existing procedures for dissolution;

(f) Chapter 7 confers power to make provision about the disqualification
of members of further education bodies.

3 “Further education body”

(1) 20In this Part “further education body” means—

(a) a further education body in England, or

(b) a further education body in Wales.

(2) In this Part “further education body in England” means—

(a) a further education corporation in England,

(b)
25a sixth form college corporation, or

(c)
a company conducting a designated further education institution in
England.

(3) In this Part “further education body in Wales” means—

(a) a further education corporation in Wales, or

(b) 30a company conducting a designated further education institution in
Wales.

4 Other key definitions

In this Part—

  • “appropriate national authority”—

    (a)

    35in relation to a further education body in England, means the
    Secretary of State;

    (b)

    in relation to a further education body in Wales, means the
    Welsh Ministers;

  • Technical and Further Education BillPage 3

  • “company” means a company within the meaning of the Companies Act
    2006;

  • “designated further education institution” means an institution that—

    (a)

    is designated under section 28 of the Further and Higher
    5Education Act 1992, and

    (b)

    is principally concerned with the provision of further
    education;

  • “further education corporation” means a body corporate that—

    (a)

    is established under section 15 or 16 of the Further and Higher
    10Education Act 1992, or

    (b)

    has become a further education corporation by virtue of section
    33D or 47 of that Act;

  • “further education corporation in England” means a further education
    corporation established to conduct an institution in England;

  • 15“further education corporation in Wales” means a further education
    corporation established to conduct an institution in Wales;

  • “sixth form college corporation” means a body corporate—

    (a)

    designated as a sixth form college corporation under section
    33A or 33B of the Further and Higher Education Act 1992, or

    (b)

    20established under section 33C of that Act.

CHAPTER 2 Application of normal insolvency to statutory corporations

5 Application of normal insolvency procedures

(1) The purpose of this section is to make the following insolvency procedures
available in relation to further education bodies that are statutory
25corporations—

(a) voluntary arrangements,

(b) administration,

(c) creditors’ voluntary winding up, and

(d) winding up by the court,

30and to make provision about receivers and managers of property.

(2) For that purpose, the relevant insolvency legislation applies in relation to
further education bodies that are statutory corporations as it applies in relation
to companies, subject to—

(a) any modifications or omissions specified in regulations made by the
35Secretary of State, and

(b) sections 7 to 10 (restrictions on normal insolvency procedures to
facilitate special administration).

(3) The “relevant insolvency legislation” means any provision made by or under
the following provisions of the Insolvency Act 1986—

(a) 40Part 1 (company voluntary arrangements);

(b) Part 2 (administration);

(c) Part 3 (receivership);

(d) Part 4 (winding up);

(e) Parts 6, 7 and 12 to 18 (supplementary provision).

Technical and Further Education BillPage 4

(4) The modifications or omissions that may be made under subsection (2)(a)
include modifications or omissions in connection with the interaction between
the insolvency procedures made available in relation to further education
bodies by this section and education administration under Chapter 4 of this
5Part.

(5) Regulations under this section that modify or omit a provision of an Act as it
applies by virtue of this section are subject to the affirmative resolution
procedure.

(6) Any other regulations under this section are subject to the negative resolution
10procedure.

6 Application of other insolvency law

(1) The Secretary of State may make regulations, in consequence of section 5 or
regulations made under it—

(a) providing for any legislation about insolvency to apply in relation to a
15further education body that is a statutory corporation (with or without
modifications);

(b) amending, or modifying, any legislation about insolvency as it applies
in relation to a further education body that is a statutory corporation.

(2) In subsection (1) “legislation about insolvency” includes any legislation that
20makes provision by reference to anything that is or may be done under any
provision of the Insolvency Act 1986, or under any provision of subordinate
legislation made under that Act, as applied by section 5.

(3) Regulations under this section that apply, amend or modify a provision of an
Act are subject to the affirmative resolution procedure.

(4) 25Any other regulations under this section are subject to the negative resolution
procedure.

(5) In this section “legislation” means provision made by Schedule 3 to this Act or
provision made by or under any other Act passed before or in the same session
as this Act.

CHAPTER 3 30Restrictions on use of normal insolvency procedures

7 Making of ordinary administration orders

(1) This section applies if a person other than the appropriate national authority
makes an ordinary administration application in relation to a further education
body.

(2) 35The court must dismiss the application if—

(a) an education administration order is in force in relation to the further
education body, or

(b) an education administration order has been made in relation to the
further education body but is not yet in force.

Technical and Further Education BillPage 5

(3) If subsection (2) does not apply, the court, on hearing the application, must not
exercise its powers under paragraph 13 of Schedule B1 to the Insolvency Act
1986 (other than its power of adjournment) unless—

(a) notice of the application has been given to the appropriate national
5authority,

(b) a period of at least 14 days has elapsed since that notice was given, and

(c) there is no outstanding education administration application.

(4) Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium)
does not prevent, or require the permission of the court for, the making of an
10education administration application.

(5) In this section “ordinary administration application” means an application in
accordance with paragraph 12 of Schedule B1 to the Insolvency Act 1986.

8 Administrator appointments by creditors etc

(1) Subsections (2) to (4) make provision about the appointment of an
15administrator under—

(a) paragraph 14 of Schedule B1 to the Insolvency Act 1986, in relation to a
further education body that is a company, or

(b) paragraph 22 of Schedule B1 to the Insolvency Act 1986, in relation to
any further education body.

(2) 20If in any case—

(a) an education administration order is in force in relation to the further
education body,

(b) an education administration order has been made in relation to the
further education body but is not yet in force, or

(c) 25an education administration application in relation to the further
education body is outstanding,

a person may not take any step to make an appointment.

(3) In any other case, an appointment takes effect only if each of the following
conditions are met.

(4) 30The conditions are—

(a) that notice of the appointment has been given to the appropriate
national authority, accompanied by a copy of every document in
relation to the appointment that is filed or lodged with the court in
accordance with paragraph 18 or 29 of Schedule B1 to the Insolvency
35Act 1986,

(b) that a period of at least 14 days has elapsed since that notice was given,

(c) that there is no outstanding education administration application in
relation to the further education body, and

(d)
that the making of an education administration application in relation
40to the further education body has not resulted in the making of an
education administration order which is in force or is still to come into
force.

(5)
Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium)
does not prevent, or require the permission of the court for, the making of an
45education administration application at any time before the appointment takes
effect.

Technical and Further Education BillPage 6

9 Winding-up order

(1) This section applies if a person other than the appropriate national authority
petitions for the winding up of a further education body.

(2) The court is not to exercise its powers on a winding-up petition unless—

(a) 5notice of the petition has been given to the appropriate national
authority, and

(b) a period of at least 14 days has elapsed since that notice was given.

(3)
If an education administration application is made in relation to the further
education body before a winding-up order is made on the petition, the court
10may exercise its powers under sections 17 and 18 (instead of exercising its
powers on the petition).

(4) References in this section to the court’s powers on a winding-up petition are
to—

(a) its powers under section 125 of the Insolvency Act 1986 (other than its
15power of adjournment), and

(b) its powers under section 135 of the Insolvency Act 1986.

10 Voluntary winding up

(1) A further education body has no power to pass a resolution for voluntary
winding up without the permission of the court.

(2) 20Permission may be granted by the court only on an application made by the
further education body.

(3) The court may not grant permission unless—

(a) notice of the application has been given to the appropriate national
authority, and

(b) 25a period of at least 14 days has elapsed since that notice was given.

(4)
If an education administration application is made in relation to the further
education body after an application for permission under this section has been
made but before it is granted, the court may exercise its powers under sections
17 and 18 (instead of granting permission).

(5) 30In this section “a resolution for voluntary winding up” has the same meaning
as in the Insolvency Act 1986.

11 Enforcement of security

A person may not take any step to enforce a security over property of a further
education body unless—

(a) 35notice of the intention to do so has been given to the appropriate
national authority, and

(b) a period of at least 14 days has elapsed since the notice was given.

12 Interpretation of Chapter

(1) In this Chapter—

  • 40“the court”, in relation to a further education body, means the court
    having jurisdiction to wind up the body;

  • Technical and Further Education BillPage 7

  • “education administration application” has the meaning given by
    section 16;

  • “education administration order” has the meaning given by section 15.

(2) For the purposes of this Chapter an application made to the court is
5outstanding if it—

(a) has not yet been granted or dismissed, and

(b) has not been withdrawn.

(3) An application is not to be taken as having been dismissed if an appeal against
the dismissal of the application, or a subsequent appeal, is pending.

(4) 10An appeal is to be treated as pending for this purpose if—

(a) an appeal has been brought and has not been determined or
withdrawn,

(b) an application for permission to appeal has been made but has not been
determined or withdrawn, or

(c) 15no appeal has been brought and the period for bringing one is still
running.

(5) In relation to a further education body that is a statutory corporation, a
reference in this Chapter to a provision of the Insolvency Act 1986 is to that
provision as it applies to the body by virtue of section 5.

CHAPTER 4 20Further education bodies: special administration

Introduction to education administration

13 Overview of Chapter

(1) This Chapter creates a procedure to be known as education administration.

(2) The main features of an education administration are that—

(a) 25it can be used where a further education body is unable to pay its debts
or is likely to become unable to pay its debts,

(b) the court appoints an education administrator on the application of the
appropriate national authority, and

(c) the education administrator manages the body’s affairs, business and
30property with a view to avoiding or minimising disruption to the
studies of existing students.

14 Objective of education administration

(1) The objective of an education administration is to—

(a) avoid or minimise disruption to the studies of the existing students of
35the further education body as a whole, and

(b) ensure that it becomes unnecessary for the body to remain in education
administration for that purpose.

(2) The means by which the education administrator may achieve that objective
include—

(a) 40rescuing the further education body as a going concern,

Technical and Further Education BillPage 8

(b) transferring some or all of its undertaking to another body,

(c) keeping it going until existing students have completed their studies, or

(d) making arrangements for existing students to complete their studies at
another institution.

5Process

15 Education administration order

(1) An education administration order is an order of the court appointing a person
as the education administrator of a further education body.

(2) A person is eligible for appointment as an education administrator only if the
10person would be qualified to act as an insolvency practitioner in relation to the
further education body.

(3) While an education administration order is in force the further education body
may be described as being “in education administration”.

16 Application for education administration order

(1) 15An education administration order may be made only on an application by the
appropriate national authority.

(2) The appropriate national authority must give notice of an application—

(a) to the further education body to which the application relates, and

(b) to any person specified in education administration rules (for those
20rules, see section 30).

(3) An application for an education administration order is referred to in this
Chapter as an “education administration application”.

17 Grounds for making an education administration order

(1) The court may make an education administration order on an application only
25if satisfied that the further education body—

(a) is unable to pay its debts, or

(b)
is likely to become unable to pay its debts.

(2) The court has no power to make an education administration order in relation
to a further education body which—

(a) 30is in administration under Schedule B1 to the Insolvency Act 1986, or

(b) has gone into liquidation (within the meaning of section 247(2) of the
Insolvency Act 1986).

(3) For the purposes of this section a further education body is unable to pay its
debts if it is deemed to be unable to pay its debts under section 123 of the
35Insolvency Act 1986.

18 Powers of the court on hearing an application

(1) On hearing an education administration application the court may—

(a) grant the application,

(b) adjourn the application conditionally or unconditionally,

Technical and Further Education BillPage 9

(c) dismiss the application,

(d) make an interim order,

(e)
treat that application as a winding-up petition and make any order the
court could make under section 125 of the Insolvency Act 1986 (power
5of court on hearing winding-up petition), or

(f)
make any other order that it thinks appropriate.

(2) An interim order under subsection (1)(d) may, in particular—

(a) restrict the exercise of a power of the further education body,

(b) in the case of a further education body that is a statutory corporation,
10restrict the exercise of a power of its members,

(c) in the case of a further education body that is a company, restrict the
exercise of a power of its directors, and

(d) make provision conferring a discretion on a person who would be
qualified to act as an insolvency practitioner in relation to the further
15education body.

(3) An education administration order comes into force—

(a) at the time appointed by the court, or

(b) if no time is appointed by the court, when the order is made.

19 Appointment of two or more education administrators

20If an education administration order appoints two or more persons as the
education administrator of a further education body, the order must set out—

(a) which (if any) of the functions of the education administrator are to be
carried out only by the appointees acting jointly,

(b) the circumstances (if any) in which the functions of an education
25administrator are to be carried out by one of the appointees, or by
particular appointees, acting alone, and

(c) the circumstances (if any) in which things done in relation to one of the
appointees, or in relation to particular appointees, are to be treated as
done in relation to all of them.

20 30Duty to dismiss ordinary administration application

(1) On the making of an education administration order in relation to a further
education body, the court must dismiss any ordinary administration
application made in relation to the body which is outstanding.

(2) In this section “ordinary administration application” means an application in
35accordance with paragraph 12 of Schedule B1 to the Insolvency Act 1986.

(3) Subsections (2) to (4) of section 12 (meaning of “outstanding”) apply for the
purposes of this section.

21 Status of education administrator

(1) An education administrator is an officer of the court.

(2) 40In carrying out functions in relation to a further education body an education
administrator acts as its agent.