Standing Committee F
Thursday 11 May 2000
[Mr. Mike Hancock in the Chair]
New Clause 3
'.--(1) A Local Learning and Skills Council established under section 19 shall have power to accept, hold and administer any property on trust for purposes related to any of their objectives, or for any other purpose connected with eduction.
(2) The Secretary of State may by order make such provision as he thinks appropriate in relation to the appointment as trustees and impose conditions on persons to administer such trust property; and such trustees shall cause proper accounts to be kept of the capital, accretions, income and expenditure vested in, received by and expended by them; and shall cause such accounts to be audited and an abstract thereof to be published in such manner as the Secretary of State may from time to time approve.'.
Brought up, and read the First time.
Mr. Tim Boswell (Daventry): I beg to move, That the clause be read a Second time.
It is nice to have you back in the chair, Mr. Hancock. We have been well looked after in this Committee and I do not intend to trespass on your generosity unreasonably today. However, there are important issues to raise: two in relation to new clauses on provisions for England and a number in relation to those for Wales.
New clause 3 appears to be technical. For reasons that I shall go into later, it is couched in legally terse language and might, at first sight, seem dry and boring.
Mr. Phil Willis (Harrogate and Knaresborough): Never.
Mr. Boswell: I am grateful for that encouragement from the hon. Member for Harrogate and Knaresborough (Mr. Willis). The new clause involves a substantial issue on which I and, I am sure, my colleagues feel strongly.
During exchanges in our last sitting, remarks by the Minister, the hon. Member for North Swindon (Mr. Wills) clarified two points. The first was that the Learning and Skills Council will have the power to receive and make use of any assets or money it can get its hands on. By that I mean, it will receive its substantial, base-load funding from the Government, but that will not prevent it from taking money from elsewhere. If, for example, someone wished to leave money to the council, or there was an educational trust that no longer wished to fulfil its functions independently because of overhead costs or administrative difficulties, that money could, I think, be reversed into the remit of the LSC. Those assurances primarily arose in the discussion we had on new clause 1--or was it new clause 2--about partnership working, so that is not a problem. We want the council to be able to use any money that is sensibly to hand.
The second point that became clear from the Committee's deliberations, which were wider than that on the new clause, was that the LSC and its constituent or local learning and skills councils will operate as a single entity, a unitary body. On reflection, this morning I realised that I had not asked the Minister, the hon. Member for Croydon, North (Mr. Wicks) whether it is intended that the LSC will produce what in the private sector would be called consolidated accounts, including the activities and assets of all the local learning and skills councils for the time being on a yearly basis. That would be a large task, although it is not beyond the powers of most commercial companies. It would make for good order and a business-like approach if we knew at least what the total assets were, and it would be important for the council to have that information. I see that the Minister is acknowledging the point that I am making.
The new clause explores whether property that may come from outside public sources to the council is held centrally or locally. That is a substantial point. The Minister is engaged indirectly in the Bill--and we are not challenging Government policy in this clause at least--in winding up the training and enterprise councils. As the Committee knows, those are private sector entrepreneurial bodies, albeit primarily publicly funded. They have a good deal of flexibility and, to some extent, display considerable variation in delivering their missions locally. Along the way, they may or may not have acquired property, and a body might do so in future.
I have sought to draw out this point from the Minister in a number of written parliamentary questions and we are beginning to get a clearer picture. We all understand that grants have been directed from public funds and it is perfectly proper for the Government to seek to recover those assets for the Learning and Skills Council, although there will be opportunities to discuss that when later we look at the more administrative clauses of the Bill. Then there is a grey area about assets that have arisen from any TEC surpluses derived from effective trading out of money primarily derived from public funds. That may not be the only explanation for such surpluses, but we will assume for this purpose that it is. There is also the question of entirely private acquisitions, which will be their money.
Mr. Ken Purchase (Wolverhampton, North-East): I think I see where the hon. Gentleman is going, but he needs to tell us, in the context of companies by guarantee--as the TECs generally are--how he knows what the distribution of surplus assets will be.
Mr. Boswell: For this purpose I can certainly call the hon. Gentleman my hon. Friend because he is assisting me. That is precisely the conundrum with which Ministers are faced. One assumes, for the purpose of debate, that the process will be broadly agreed and that there is not--although there might be, given the circumstances--a turf war or argument going on about it. The hon. Gentleman has, through his intervention, helped me to put to the Committee that whatever the present position, there is the potential that money could have been derived from a number of sources. One of those is, of course, directly private accretions.
There is, therefore, a need to start to apportion this, unless one takes the view that the money should simply be collared by the centre for the Learning and Skills Council. If that is the view of Ministers it should be explained. Given that some of the money came from private sector sources or may have arisen as a result of surpluses that are at least arguably derived from private sector funds, the matter is worth consideration, particularly in connection with the 16 TECs that have merged with their local chambers of commerce. I can see the hon. Member for Wolverhampton, North-East (Mr. Purchase) nodding. My own Northamptonshire TEC chamber of commerce is in precisely that position, although I have not been heavily briefed by it. The matter is of more general application.
Where there are such chambers of commerce mergers--and I find that an attractive model that has worked well locally--the private sector partners have an interest in the disposition of funds. As the hon. Gentleman anticipated, since these are not profit-making companies, there is a question about how the surplus could be run off and so on. I am not seeking to argue that the money should be returned to the private sector.
Mr. Purchase: May I probe a little further? It seems to me that an examination of the source and application of funds within any of the companies limited by guarantee would show that any unapplied government cash would then return automatically to government. I can see no other way to proceed with that part of any surplus.
Mr. Boswell: I do not want to lengthen the debate because another related issue follows shortly. The hon. Gentleman is enunciating a principle that seems to be entirely acceptable. If it is possible to say that a certain asset was derived from public funds or a cash balance results from having been given public funds, the principle of returning that and redistributing it on whatever basis Ministers are accountable for doing, is entirely fair. It is not always easy to unpick this, but unless Ministers say that they are going to nationalise the assets of the TEC movement collectively, whatever those are, there has to be some element of appraisal and apportion. That is all that I am saying. I shall go on to develop the argument in relation to the new clause which is geared not only to the existing assets of TECs but to potential future activities of local learning and skills councils and any private sector accretions that may come to them in the way that I have briefly mentioned.
The other point that I wish to make on apportionment is that, as a Minister coming into the further education portfolio shortly before incorporation of the sector and having had, as it were, to manage that process, I had a good deal of experience about some complicated property issues relating to apportionment--in that case between further education colleges and, typically, local education authorities. There could be, and sometimes there were, animosities stirred up about the ownership of a car park or the primary assets and so forth. We sought to deal with those various disputes on what I believed to be a fair basis and they were eventually resolved. What I am seeking to point out in relation to the clause is that unless Ministers decide to collectivise all the assets of the TEC movement, wherever derived--and there are certain problems in equity and fairness in doing that--there will have to be an apportionment process to sort it out.
Mr. Gordon Marsden (Blackpool, South): I am listening with interest to the hon. Gentleman. What does the hon. Gentleman believe would happen if, for example, a few years down the line when, as we all hope, local learning and skills councils and, indeed, the national Learning and Skills Council will have gained a high profile, someone makes a significant bequest to a local learning and skills council in his locality or attempts to do so by some form of will procedure? Will the current form of legislation be able to cope with that and, if not, how would the new clause address it?