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First, I warmly welcome that announcement and that change and I invite the Minister to do likewise. I believe that if it is done well, this could offer an exciting shift in policy. It could finally allow us to join up 14-to-19 education in a genuinely coherent way. It could provide an opportunity finally to end the invidious gap between students in the sixth form and those at further education colleges. It could herald the opportunity mentioned in the White Paper for funding to follow the student, so that people in the 14-to-19 range could move between institutions if required in the light of the Government’s reforms of diplomas. I view this as genuinely exciting and I hope that the Minister has reflected on the change over the past two weeks and will feel as excited as I am and willing to embrace it.
In order to generate the necessary change, we need legislation. I am trying to be helpful by tabling amending provisions to repeal part of the Learning and Skills Act 2000, which would be required for enactment. It will also be necessary to amend the Education and Inspections Act 2006 to place a new statutory duty on local authorities for 16 to 19-year-olds. That is not in order for this Bill, so I cannot do that, but I have done what I can to help. I hope that the Minister will receive it in the helpful spirit in which it is intended.
I assume that the Minister will respond in a few moments and say that he does not wish to enact these provisions now, but to go away, consult and consider them very carefully. If so, will he tell me when he wishes these changes to be brought forward and whether it is his intention to repeal the relevant section of the Learning and Skills Act? If not, why not? Does he intend to continue to use the Learning and Skills Council as a conduit for money for 16 to 19-year-olds? If so, does he not think that it could be an extra barrier of bureaucracy? If he thinks that the LSC should continue to play a role in 16-to-19 education, is it mainly in respect of apprenticeships?
There seems to be a bit of turf war going on at the moment between the Department for Innovation, Universities and Skills and the Department for Children, Schools and Families. I hope that the result of that turf war will be that, eventually, many apprenticeships will be transferred to the DSCF and not continue to remain with DIUS. Only in that way will we get genuinely joined-up treatment of all 14-to-19 provision. It would be unfortunate if that were to generate weird barriers between part-time and on-the-job learning.
The important thing is how the transfer of 16-to-19 money is done: the transfer alone will not generate what we want if the money continues to be ring-fenced, and if the 0-to-16 funding continues to be ring-fenced in a separate grant. If there must be ring-fencing—which, on the whole, I am not in favour of—it would be much better to ring-fence 14-to-19 funding, and then to have 0 to 13, or at least 0 to 10 and 11 to 13, in separate grants.
The announcement has enormous implications for the Bill. Indeed, it renders some aspects of the Bill redundant. Does the Minister intend to bring forward legislation at a later stage to amend the Bill in the light of the announcement? We are being asked to pass a Bill that contains a number of powers that will be irrelevant
if the Government move the 16-to19 money—in particular, clause 17, which we will debate at some length on the next group of amendments, which gives intervention powers to the Learning and Skills Council. Were the money for 16 to 19-year-olds moved, however, many colleges would no longer have the LSC as their funding partner. That would seem to bring the proposal into question. Similarly, with regard to clauses 14 to 16, which refer to the merger, dissolution and publication of proposals for new colleges, the Learning and Skills Council may not fund such colleges at all, and would certainly never be the major funder. Of the £9 billion now provided by the LSC, the Government propose to move £6 billion to local authorities.
I hope that the Minister will tell us whether he intends to amend the Bill in the future. I do not feel comfortable passing a Bill now that gives powers to the LSC that will clearly become irrelevant in a relatively short period. It will be unhelpful if the Minister cannot assure me on the record that the Bill will be amended when the new proposals come forward, with respect not only to the duties on local authorities, but to other clauses that relate to LSC powers over colleges.
Lastly, what will remain with the LSC and what might its role be? In Committee, the Minister said:
“Even under the demand-led approach that we are moving towards—we envisage most of the funding going through the demand-led process—there would still be a relationship with the Learning and Skills Council. Funding would still come from the council. If it will not have the ultimate power of intervention, and if we want to protect the public purse and the public interest, who will take on the responsibility?” ——[Official Report, Further Education and Training Public Bill Committee, 14 June 2007; c. 110.]
In the light of the recent announcement, does the Minister still believe that to be the case? Does he still see a role for the LSC? Many rumours abound about the Government’s intention to move that money for 19-plus adult skills to regional development agencies or to sector skills councils. I was hoping that the Treasury sub-national review might have been published by now to give us at least some hint of the direction of the Government’s travel. Although ministerial appointments have been published, those proposals have not.
Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): The hon. Lady is very knowledgeable in this area, and I was not privy to the Committee’s discussions. What is her view of what should happen to the LSC, which seems increasingly endangered?
Sarah Teather: At the moment, we are simply consulting on what should be done with the money. An internal party working group is in the process of taking evidence, and I would be happy to discuss such proposals at a later stage. I am interested to know the Government’s intentions and whether they have a view on the matter. A move from a £9 billion organisation to a £3 billion organisation would seem to undermine the future of the LSC.
Mr. Tim Boswell (Daventry) (Con):
The hon. Lady raises an entirely proper point. Does she agree that for those of us who have sometimes been critical—perhaps
not always fairly critical—of the administrative costs of the LSC, it is self-evident that if the volume of traffic or turnover through the council is reduced, the ratio of overheads to final expenditure is commensurately increased?
12.45 pm
Sarah Teather: I agree with the hon. Gentleman. I do not want to criticise the announcement, as we have been calling for it for a long time, as the Minister knows. I am extremely pleased that the Government have announced their intention to move 16-to-19 money to local authorities. My question is: what happens next? Certainly, the announcement has enormous implications for the LSC. I have been similarly critical of some of the LSC’s overheads, although I have not used the same language as the hon. Gentleman. I am aware that the LSC has been through several restructuring processes and that staff face quite a lot of uncertainty. It would be helpful if the Government were to put on the record their intentions for the organisation, at least to indicate to staff employed by that organisation the future direction of Government travel.
Mr. John Hayes (South Holland and The Deepings) (Con): It is good to welcome the Minister back to his job, albeit in a new Department, and I look forward to exchanging various comments and ideas with him over the coming weeks and months, in the happy spirit that has pervaded our previous exchanges.
I digress from that sentiment in no way by saying that the new clause and amendments seem to highlight a fundamental flaw in the Government’s thinking. In a sense, the amendments prise open a gap between the Bill and the Government’s strategy. The hon. Member for Brent, East (Sarah Teather) was measured in her comments; she could have been altogether more direct. She might have asked why we were debating a Bill in isolation from the Government’s approach to the Leitch review of skills. We still await the Government’s response to that fundamental review, which, we think, will come out next week—it has been delayed three times already. We understand that one of the reasons for the delay was that the first draft was simply not up to scratch: one agency told me that it could have been written by a seven-year-old child with chickenpox.
Given the paucity of the Government’s approach and the delays suffered, it is unsurprising that we are debating in isolation a Bill that might contradict some of the Government’s response to Leitch, and which certainly contradicts much of Leitch’s analysis. The new clause and amendments relate to the departmental reorganisation and its implications for the LSC. The Chairman of the Select Committee, the hon. Member for Huddersfield (Mr. Sheerman), asked the hon. Member for Brent, East what she thought about the LSC, and in doing so prompted the question of what the Government think about it. Leitch does not mention the LSC until about page 75 of his report, and then talks about further rationalisation in that body. We are not clear whether the Government see a long-term future and a central role for the LSC. We certainly do not know whether the Government’s response will merely be to bolt on a new structure to the existing one. I suspect that we might end up with that, and that would be thoroughly unsatisfactory.
As the hon. Lady said, the decision to create two new Departments to cover education and skills has significant implications for FE colleges because of the plan to route funding for 16-to-19 education via local authorities. That is what the new clause and amendments address.
Mr. Boswell: Does my hon. Friend agree that the last thing that the sector needs is more bodies, or a further proliferation of bodies? I am already uneasy about splitting the Department. What the sector needs is a simple line of funding and communication so that it can get on with its job.
Mr. Hayes: My hon. Friend, in his typically learned and well-informed way, makes two points. First, he makes the point that the split into two Departments creates a problem of clarity—it is difficult to know where responsibilities will lie for different aspects of the previous Department’s work. He then made a second and even more profound point about the bureaucracy, over-regulation and micro-management that has typified the Government’s approach to further education and to skills more generally.
Because I have high hopes of the Minister—rejuvenated by his reappointment—I hope that he will take the opportunity of the response to Leitch to clear away some of that bureaucracy and lift some of the burden on our excellent further education colleges, so that we can meet the skills targets that he wants to be met and on which we share a view. I do not take a negative view—I am not pessimistic—but unless the Minister rises to the challenge identified by my hon. Friend, I am afraid that my hopes will be dashed and the whole House, indeed the whole country, will be disappointed.
According to the Times Educational Supplement,
“Billions of pounds in funding for colleges is due to be taken from the Learning and Skills Council and put under the control of local authorities. The handover of about £7 billion of the LSC’s £11bn-a-year budget will be the culmination of Gordon Brown’s reorganisation of education.”
The reform will require yet more legislation, presumably as part of the proposed Bill to raise the school leaving age to 18. We had a taste of it in what could be described as the early Queen’s Speech—the pre-Queen’s Speech Queen’s Speech—which hinted that there might be further legislation to do just that.
Sarah Teather: The hon. Gentleman will have observed that the publication accompanying yesterday’s statement contained no information about the proposed Bill. That suggests that the Government will use it to amend the process of funding 16-to-19-year-olds.
Mr. Hayes: I agree. It is not as though we did not tell the Government—we said that this Bill was not fit for purpose because it had come to the House irrespective of the Government’s response to Leitch. We may well see, in the autumn, a further Bill dealing with skills and further education and making structural changes to the way in which skills are funded and managed, although this Bill will have only just hit the statute book. It strikes me as bizarre to publish the Leitch report and the Bill simultaneously, given that the one bears very little relation to the other.
Jeremy Wright (Rugby and Kenilworth) (Con): Would it not be very much in the interests of the Learning and Skills Council for the Government to clarify their thinking on its future? The Bill talks of moving from a local to a regional structure. The LSC will inevitably need to do some work on that, which may come to nothing if the Government change their mind later.
Mr. Hayes: The Government’s approach has a touch of rearranging the deckchairs and changing the sheet music for the dance band on the Titanic as we face our journey to the lifeboats. One wonders whether, expecting some massive change, the Learning and Skills Council is desperately trying to reorganise itself before it is reorganised in a way not of its own choosing. We need the Government to be straightforward, and the hon. Lady’s new clause and amendments give them an opportunity to be so. Do they envisage a long-term future for the LSC in its current form, in the context of the new clause and amendments? Do they expect it to continue much as it is now, or do they anticipate fundamental reform of the funding and management of skills of the kind that is hinted at, indeed identified, by Leitch, and which Members in all parts of the House consider now to be necessary?
As I have said, there is mention of further legislation, presumably as part of the proposed Bill to raise the school leaving age to 18. Conservative Members have concerns about the proposal to return college funding to local authority control. We are proud of what many further education colleges achieve. I make no apology for repeating what I have said before—that the House should celebrate their work, congratulate the professionals in them, and applaud the achievements of the many students who pass through them. Conservative Members trace those achievements back to the crucial Further and Higher Education Act 1992, which gave further education colleges their freedom from local authority control and set them on a path to the success that they now enjoy.
Madam Deputy Speaker (Sylvia Heal): Order. I wonder whether the hon. Gentleman will now confine himself to the new clause and amendments under discussion.
Mr. Hayes: I shall be delighted to do so, Madam Deputy Speaker.
The Association of Colleges is concerned about the plan to route funding for 16 to 19-year-olds via local authorities, which is precisely what is dealt with in the new clause and amendments. The proposed changes are creating considerable uncertainty in the sector, as I was told by the principal of a further education college that I visited earlier this week. The colleges are not certain what the change means, and they are not confident about their future. They are not even confident that the Government see a long-term future for further education at all. I do not share the Armageddon view of the Government’s position, but I do think that a lack of certainty and clarity is causing a problem with morale in the sector, particularly in relation to the issues dealt with in the new clause and amendments.
Many young people cross boundaries to attend colleges in other local authority areas, but changing funding responsibilities may make it more difficult for them to exercise that choice. I ask the Minister to comment on that problem in particular. The Bill also creates confusion by extending the role of the LSC in training for 16 to 19-year-olds. Clause 6 would give it a new duty in relation to education and training provision for that group
“with a view to encouraging diversity in the education and training available to individuals”.
It seems to be critical for those individuals to be able to exercise maximum choice, but the fact that the new powers will soon be obsolete again raises the question of the Bill’s purpose. On Second Reading I argued that it was not fit for purpose and that further legislation might well be required. We now learn that the Learning and Skills Council is likely to be stripped of many of its current functions, but we have yet to hear the Government’s detailed response to Leitch.
In the past, the Minister has been dismissive of the inquiries made by the hon. Lady and me, and mentioned by the hon. Member for Huddersfield, about the possibility of new legislation. Will he tell us whether he anticipates further legislation, and whether it will deal specifically with the points raised by the hon. Lady and amplified by me? If he says that he does, it will contradict what he said in Committee, namely:
“To move the system in a more demand-led direction one does not need to legislate”. ——[Official Report, Further Education and Training Public Bill Committee, 12 June 2007; c. 19.]
I was doubtful about that at the time, and I remain doubtful. It appears to me that the Government have changed their position and are now suggesting that they may well need to legislate. The former Leader of the House said that the Government were “planning legislation” on Leitch when he was questioned on the matter as early as 21 June. Can the Minister confirm that, and can he tell us what reason the Government would have to legislate on Leitch if not to introduce the demand-led system that Leitch advocates?
Conservative Members are in favour of reducing the mountain of bureaucracy that stifles the delivery of training and prevents the establishment of a system tailored to the needs of business and learners alike. The Government have been complacent. Debating these very matters in Committee, the Minister said that concern expressed by my hon. Friends, particularly my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright), about the £1 billion of public money spent by the LSC for purposes other than training was “erroneous”. City and Guilds takes a rather different view. Under the heading “The Cost of Bureaucracy”, it suggests that the regulatory impact and overall burden on providers warrants “serious and sustained attention”. Will the Minister deal with the concerns of third parties such as City and Guilds?
In essence, and in conclusion, the hon. Member for Brent, East has done the House a service by proposing the new clause because there is a gaping hole in the Government’s position. It is not clear where responsibility will lie in the medium term, nor is it clear, as my hon. Friend the Member for Daventry (Mr. Boswell) said, whether contradiction and confusion will be a permanent
feature of the Government’s strategy or whether it is merely that the Bill and the Government’s other plans are not consistent. It is not clear whether the Government will have to legislate further. It is not clear whether the Minister will be responsible for these things for very much longer, or whether they will pass to another agency or Government Department. That lack of clarity is doing the sector no favours and the House no service. I hope that the Minister will be able to reassure me that he is rather clearer than he has given the impression of being thus far.
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