Technical and Further Education Bill (HC Bill 82)

Functions of administrator and conduct of administration

22 General functions of education administrator

(1) Where an education administration order is in force in relation to a further
education body, the body’s affairs, business and property are to be managed
5by the education administrator.

(2) The education administrator must carry out his or her functions for the
purpose of achieving the objective of the education administration (if possible).

(3) In pursuing the objective of the education administration set out in
section 14(1)(a) the education administrator must, in particular, take into
10account the needs of existing students who have special educational needs.

(4) The education administrator of a further education body that is a statutory
corporation must, so far as is consistent with the objective of the education
administration, carry out his or her functions in a way that achieves the best
result for the further education body’s creditors as a whole.

(5) 15The education administrator of a further education body that is a company
must, so far as is consistent with the objective of the education administration,
carry out his or her functions in a way that achieves the best result for—

(a) the company’s creditors as a whole, and

(b) subject to that, the company’s members as a whole.

(6) 20For the purposes of this section an existing student has “special educational
needs” if he or she has a learning difficulty which calls for special educational
provision to be made for him or her.

(7) In subsection (6)—

• “special educational provision”, in relation to an existing student, means
  25provision for education or training that is additional to, or different
  from, that made generally for other students of the same age;

• “learning difficulty” is to be read in accordance with section 19(6) and (7)
  of the Further and Higher Education Act 1992.

23 Transfer schemes

30Schedule 2 gives an education administrator the power to make transfer
schemes.

24 Conduct of administration

(1) Schedule 3 applies provisions of the Insolvency Act 1986, with modifications,
in relation to the education administration of a further education body that is
35a statutory corporation.

(2) Schedule 4 makes similar provision in relation to the education administration
of a further education body that is a company.

Financial support for bodies in education administration

25 Grants and loans where education administration order is made

(1) If an education administration order has been made in relation to a further education
body, the appropriate national authority may make grants or loans to the body for the
5purpose of achieving the objective of the education administration.

(2) A grant or loan under this section may be made on whatever terms the
appropriate national authority considers appropriate (including terms relating
to repayment of the grant or loan, with or without interest).

(3) In the case of a loan, the terms must provide for paragraph 99(7)(a), (b) or (c) of
10Schedule B1 to the Insolvency Act 1986 (vacation of office: charges and
liabilities) to apply in relation to any sum that must be paid by the further
education body in respect of the loan or interest on it.

(4) In subsection (3) the reference to paragraph 99 of Schedule B1 to the Insolvency
Act 1986 is to that Schedule as applied by Schedule 3 or 4 to this Act.

26 15Indemnities where education administration order is made

(1) If an education administration order has been made in relation to a further education
body, the appropriate national authority may agree to indemnify persons in respect of
one or both of the following—

(a) liabilities incurred in connection with the carrying out of functions by the
20education administrator, and

(b) loss or damage sustained in that connection.

(2) The agreement may be made in whatever manner, and on whatever terms, the
appropriate national authority considers appropriate.

(3) As soon as possible after agreeing to indemnify persons under this section, the
25appropriate national authority must lay a statement of the agreement before
Parliament or the National Assembly for Wales (as appropriate).

(4) For repayment of sums paid by the appropriate national authority in
consequence of an indemnity agreed to under this section, see section 27.

(5) The power of the appropriate national authority to agree to indemnify
30persons—

(a) is confined to a power to agree to indemnify persons in respect of
liabilities, loss and damage incurred or sustained by them as relevant
persons, but

(b) includes power to agree to indemnify persons (whether or not they are
35identified or identifiable at the time of the agreement) who
subsequently become relevant persons.

(6) The following are relevant persons for the purposes of this section—

(a) the education administrator;

(b) an employee of the education administrator;

(c) 40a partner or employee of a firm of which the education administrator is
a partner or employee;

(d) a partner of a firm of which the education administrator was an
employee or partner at a time when the order was in force;

(e) a body corporate which is the employer of the education administrator;

(f) an officer, employee or member of such a body corporate;

(g) a Scottish firm which is the employer of the education administrator or
of which the education administrator is a partner.

(7) For the purposes of subsection (6)—

(a) 5references to the education administrator are to be read, where two or
more persons are appointed as the education administrator, as
references to any one or more of them, and

(b) references to a firm of which a person was a partner or employee at a
particular time include a firm which holds itself out to be the successor
10of a firm of which the person was a partner or employee at that time.

27 Indemnities: repayment by further education bodies etc

(1) This section applies where a sum is paid out by the appropriate national
authority in consequence of an indemnity agreed to under section 26 in relation
to the education administration of a further education body.

(2) 15The further education body must pay the appropriate national authority—

(a) any amounts in or towards the repayment of that sum that the
appropriate national authority directs, and

(b) interest on amounts outstanding under this subsection at whatever
rates the appropriate national authority directs.

(3) 20The payments must be made by the further education body at times, and in a
manner, determined by the appropriate national authority

(4) Subsection (2) does not apply in the case of a sum paid by the appropriate
national authority for indemnifying a person in respect of a liability to the
further education body.

(5) 25The appropriate national authority must lay before Parliament or the National
Assembly for Wales (as appropriate) a statement relating to the sum paid out
in consequence of the indemnity—

(a) as soon as possible after the end of the financial year in which the sum
is paid out, and

(b) 30if subsection (2) applies to the sum, as soon as possible after the end of
each subsequent financial year in relation to which the repayment
condition has not been met.

(6) The repayment condition is met in relation to a financial year if—

(a) the whole of the sum has been repaid to the appropriate national
35authority before the beginning of the year, and

(b) the further education body was not at any time during the year liable to
pay interest on amounts that became due in respect of the sum.

28 Guarantees where education administration order is made

(1) If an education administration order has been made in relation to a further education
40body the appropriate national authority may guarantee—

(a) the repayment of any sum borrowed by the body while that order is in force,

(b) the payment of interest on any sum borrowed by the body while that order is
in force, and

(c) the discharge of any other financial obligation of the body in connection with
45the borrowing of any sum while that order is in force.

(2) The appropriate national authority may give the guarantees in whatever
manner, and on whatever terms, the appropriate national authority considers
appropriate.

(3) As soon as possible after giving a guarantee under this section, the appropriate
5national authority must lay a statement of the guarantee before Parliament or
the National Assembly for Wales (as appropriate).

(4) For repayment of sums paid by the appropriate national authority under a
guarantee given under this section, see section 29.

29 Guarantees: repayment by further education body etc

(1) 10This section applies where a sum is paid out by the appropriate national
authority under a guarantee given by the appropriate national authority under
section 28 in relation to a further education body.

(2) The further education body must pay the appropriate national authority—

(a) any amounts in or towards the repayment of that sum that the
15appropriate national authority directs, and

(b) interest on amounts outstanding under this subsection at whatever
rates the appropriate national authority directs.

(3) The payments must be made by the further education body at times, and in a
manner, determined by the appropriate national authority.

(4) 20The appropriate national authority must lay before Parliament or the National
Assembly for Wales (as appropriate) a statement relating to the sum paid out
under the guarantee—

(a) as soon as possible after the end of the financial year in which the sum
is paid out, and

(b) 25as soon as possible after the end of each subsequent financial year in
relation to which the repayment condition has not been met.

(5) The repayment condition is met in relation to a financial year if—

(a) the whole of the sum has been repaid to the appropriate national
authority before the beginning of the year, and

(b) 30the further education body was not at any time during the year liable to
pay interest on amounts that became due in respect of the sum.

Supplementary

30 Education administration rules

(1) The power to make rules under section 411 of the Insolvency Act 1986 is to
35apply for the purpose of giving effect to this Chapter as it applies for the
purpose of giving effect to Parts 1 to 7 of that Act (and, accordingly, as if
references in that section to those Parts included references to this Chapter).

(2) Section 413(2) of the Insolvency Act 1986 (duty to consult Insolvency Rules
Committee about rules) does not to apply to rules made under section 411 of
40the Insolvency Act 1986 as a result of this section.

31 Application of other insolvency law

(1) The Secretary of State may make regulations, in consequence of this Chapter or
subordinate legislation made under it—

(a) providing for any legislation about insolvency to apply in relation to a
5further education body (with or without modifications);

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

(2) In subsection (1) “legislation about insolvency” includes any legislation that
makes provision by reference to anything that is or may be done under any
10provision of the Insolvency Act 1986, or under any provision of subordinate
legislation made under that Act, as applied by this Chapter.

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

(4) Any other regulations under this section are subject to the negative resolution
15procedure.

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

32 Modification of this Chapter under the Enterprise Act 2002

A power to modify or apply enactments conferred on the Secretary of State by
20section 248 or 277 of the Enterprise Act 2002 includes power to make such
consequential modifications of this Chapter as the Secretary of State considers
appropriate in connection with any other provision made under that section.

33 Interpretation of Chapter

(1) In this Chapter—

• 25“business”, “property” and “security” have the same meaning as in the
  Insolvency Act 1986;

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

• “education administration application” has the meaning given by
  30section 16;

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

• “education administration rules” means rules made under section 411 of
  the Insolvency Act 1986 as a result of section 30 above;

• “education administrator” means a person appointed by an education
  35administration order and is to be read in accordance with subsection (2)
  below;

• “existing student”, in relation to a further education body that is in
  education administration, means a person who—

  (a)

  is a student at the relevant institution when the administration
  40order is made, or

  (b)

  has accepted a place on a course at the relevant institution when
  the administration order is made;

• “financial year” means a period of 12 months ending with 31 March;

• “member”, in relation to a further education body that is a company, has
  45the same meaning as in the Insolvency Act 1986;

Technical and Further Education BillPage 15

• “objective of the education administration” is to be read in accordance
  with section 14;

• “the relevant institution”—

  (a)

  in relation to a further education corporation, means the
  5institution which the corporation is established to conduct;

  (b)

  in relation to a sixth form college corporation, means the
  relevant sixth form college as defined by section 90(1) of the
  Further and Higher Education Act 1992;

  (c)

  in relation to a company conducting a designated further
  10education institution, means that designated further education
  institution;

• “Scottish firm” means a firm constituted under the law of Scotland.

(2) In this Chapter references to the education administrator of a further education
body—

(a) 15include a person appointed under paragraph 91 or 103 of Schedule B1
to the Insolvency Act 1986, as applied by Schedule 3 or 4 to this Act, to
be the education administrator of the further education body, and

(b) if two or more persons are appointed as the education administrator of
the further education body, are to be read in accordance with the
20provision made under section 19.

(3) References in this Chapter to a person qualified to act as an insolvency
practitioner in relation to a further education body are to be read in accordance
with Part 13 of the Insolvency Act 1986.

(4) In relation to a further education body that is a statutory corporation,
25references in this Chapter to a provision of the Insolvency Act 1986 (except the
references in sections 25, 30 and 31 and Schedule 3 and in subsection (2) above)
are to that provision as it applies to further education bodies by virtue of
section 5.

CHAPTER 5 Trust property held by sixth form college corporations

34 30Trust property held by sixth form college corporations

If a sixth form college corporation to which section 33J of the Further and
Higher Education Act 1992 applies is being wound up under the Insolvency
Act 1986, any property held by the corporation on trust for the purposes of the
relevant sixth form college must be transferred to the trustees of the relevant
35sixth form college (as defined by section 90(1) of that Act).

CHAPTER 6 Restrictions on other dissolution procedures

35 Restrictions on dissolution of further education corporation

(1) The Further and Higher Education Act 1992 is amended as follows.

(2) In section 27A (dissolution of further education corporation), after subsection

(5) insert—

“(6) See also section 27C (restrictions on dissolution in insolvency
situations).””

(6) After section 27B insert—

“27C 5Restrictions on dissolution in insolvency situations

(1) A further education corporation have no power under section 27A to
resolve that the corporation should be dissolved if—

(a) the corporation is in education administration under Chapter 4
of Part 2 of the Technical and Further Education Act 2016,

(b) 10a voluntary arrangement in relation to the corporation has been
proposed under Part 1 of the Insolvency Act 1986 and the
matter has not been finally concluded,

(c) the corporation is in administration under Part 2 of the
Insolvency Act 1986,

(d) 15paragraph 44 of Schedule B1 to the Insolvency Act 1986 applies
(interim moratorium on proceedings where application to the
court for an administration order has been made), or

(e) the corporation is being wound up, whether voluntarily or by
the court, under Part 4 of the Insolvency Act 1986 or a petition
20under that Part for winding up of the corporation by the court
has been presented and not finally dealt with or withdrawn.

(2) For the purposes of subsection (1)(b), the matter is finally concluded
if—

(a) no meetings are to be summoned under section 3 of the
25Insolvency Act 1986,

(b) meetings summoned under that section fail to approve the
arrangement with no, or the same, modifications,

(c) an arrangement approved by meetings summoned under that
section, or in consequence of a direction under section 6(4)(b) of
30that Act, has been fully implemented, or

(d) the court makes an order under section 6(5) of that Act revoking
approval given at previous meetings and, if the court gives any
directions under section 6(6) of that Act, the corporation has
done whatever it is required to do under those directions.

(3) 35In this section—

(a) a reference to paragraph 44 of Schedule B1 to the Insolvency Act
1986 is to that paragraph as it applies to a further education
corporation by virtue of—

(i) section 5 of the Technical and Further Education Act
402016 (application of normal insolvency procedures), or

(ii) Schedule 3 to the Technical and Further Education Act
2016 (special education administration);

(b) any other reference to a provision of the Insolvency Act 1986 is
to that provision as it applies to a further education corporation
45by virtue of section 5 of the Technical and Further Education
Act 2016.””

36 Restrictions on dissolution of sixth form college corporation

(1) The Further and Higher Education Act 1992 is amended as follows.

(2) In section 33O (dissolution of sixth form college corporation), after subsection
(4) insert—

“(5) 5See also section 33Q (restrictions on dissolution in insolvency
situations).””

(5) After section 33P insert—

“33Q Restrictions on dissolution in insolvency situations

(1) A sixth form college corporation have no power under section 33O to
10resolve that the corporation should be dissolved if—

(a) the corporation is in education administration under Chapter 4
of Part 2 of the Technical and Further Education Act 2016,

(b) a voluntary arrangement in relation to the corporation has been
proposed under Part 1 of the Insolvency Act 1986 and the
15matter has not been finally concluded,

(c) the corporation is in administration under Part 2 of the
Insolvency Act 1986,

(d) paragraph 44 of Schedule B1 to the Insolvency Act 1986 applies
(interim moratorium on proceedings where application to the
20court for an administration order has been made), or

(e) the corporation is being wound up, whether voluntarily or by
the court, under Part 4 of the Insolvency Act 1986 or a petition
under that Part for winding up of the corporation by the court
has been presented and not finally dealt with or withdrawn.

(2) 25For the purposes of subsection (1)(b), the matter is finally concluded
if—

(a) no meetings are to be summoned under section 3 of the
Insolvency Act 1986,

(b) meetings summoned under that section fail to approve the
30arrangement with no, or the same, modifications,

(c) an arrangement approved by meetings summoned under that
section, or in consequence of a direction under section 6(4)(b) of
that Act, has been fully implemented, or

(d) the court makes an order under section 6(5) of that Act revoking
35approval given at previous meetings and, if the court gives any
directions under section 6(6) of that Act, the corporation has
done whatever it is required to do under those directions.

(3) In this section—

(a) a reference to paragraph 44 of Schedule B1 to the Insolvency Act
401986 is to that paragraph as it applies to a sixth form college
corporation by virtue of—

(i) section 5 of the Technical and Further Education Act
2016 (application of normal insolvency procedures), or

(ii) Schedule 3 to the Technical and Further Education Act
452016 (special education administration);

(b) any other reference to a provision of the Insolvency Act 1986 is
to that provision as it applies to a sixth form college corporation

by virtue of section 5 of the Technical and Further Education
Act 2016.””

CHAPTER 7 Disqualification of officers

37 Disqualification of officers

(1) 5The Secretary of State may by regulations—

(a) make provision in relation to further education bodies that are
statutory corporations that is the same as, or similar to, the provision
made by the Company Directors Disqualification Act 1986 in relation to
companies;

(b) 10make provision for the purpose of ensuring that a disqualification
under that Act that has effect in relation to directorship of a company
has the same or a similar effect in relation to membership of a further
education body that is a statutory corporation.

(2) Regulations under this section are subject to the negative resolution procedure.

15Part 3 Further education: information

38 Information for Secretary of State about further education

(1) Section 54 of the Further and Higher Education Act 1992 (duty to provide
information) is amended as follows.

(2) 20For subsection (1) substitute—

“(1) Each of the following must give the Secretary of State such information
as the Secretary of State may require for purposes connected with
further education—

(a) a local authority in England,

(b) 25the governing body of any institution maintained by a local
authority in England,

(c) the governing body of a city technology college in England, a
city college for the technology of the arts in England or an
Academy,

(d) 30the governing body of any institution in England within the
further education sector or the higher education sector, and

(e) any person or body who—

(i) provides further education, and

(ii) is receiving or has received funding to do so from the
35Secretary of State, a local authority in England or a
combined authority.

(2) In subsection (1) “further education” does not include education for
people aged under 25 for whom an EHC plan is maintained.

(3) Each of the following must give the Welsh Ministers such information
as the Welsh Ministers may require for the purposes of the exercise of
any of the Welsh Ministers’ functions under any enactment—

(a) a local authority,

(b) 5the governing body of any institution maintained by a local
authority, and

(c) the governing body of any institution within the further
education sector or the higher education sector.””

(3) Renumber the existing subsection (2) as subsection (4).

10Part 4 General

39 Power to make transitional provision

The Secretary of State may by regulations make transitional or saving
provision in connection with the coming into force of any provision of this Act.

40 15Power to make consequential provision

(1) The Secretary of State may by regulations make provision that is consequential
on any provision made by this Act.

(2) Regulations under this section may amend, repeal or revoke any provision
made by or under an Act passed before this Act or in the same Session.

(3) 20Regulations under this section that repeal or amend a provision of an Act are
subject to the affirmative resolution procedure.

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

41 Regulations: general

(1) 25Regulations under this Act are to be made by statutory instrument.

(2) Regulations under this Act may make—

(a) consequential, supplementary, incidental, transitional or saving
provision;

(b) different provision for different purposes.

42 30Affirmative and negative resolution procedures

(1) Where regulations under this Act are subject to “the negative resolution
procedure” the statutory instrument containing the regulations is subject to
annulment in pursuance of a resolution of either House of Parliament.

(2) Where regulations under this Act are subject to “the affirmative resolution
35procedure” the regulations may not be made unless a draft of the statutory
instrument containing them has been laid before Parliament and approved by
a resolution of each House of Parliament.