Further Education and Training Bill [Lords]

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Clause 6

Duty in relation to diversity and choice
Question proposed, That the clause stand part of the Bill.
Sarah Teather: I want to probe the Minister a little further on the purpose of the clause. When we talk about diversity, there is sometimes a danger that we talk only about diversity of providers, when what the learner wants is diversity in the provision of courses. Few people particularly care who provides the courses; they want to know whether the type of course that they want to study is available locally and whether it is of high quality.
Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): Is it not the case, however, that many young people need different environments for their learning post-16 and even before? Is it not the case that some need a pastoral sixth-form environment, whereas others will survive perfectly well and, indeed, flourish in the independent learning environment of a sixth-form college or further education college?
Sarah Teather: I take the hon. Lady’s point, but that is not what I was getting at. The point that I am trying to make is that much of what has been said about diversity relates to competition between private providers, who come in and provide one type of course, as opposed to colleges that provide a range of courses. However, I accept the hon. Lady’s point about a sixth form versus an FE college environment, which is valid.
Colleges have expressed concern that private providers will often undercut them on the cost of a particular course, because private providers do not do many of the more complex things that colleges do, such as providing for vulnerable young people or working with schools on their increased flexibility programme, for which all colleges complain that they are not fully funded. It is therefore quite easy for colleges as a whole to be undercut, and all that I am trying to establish is whether we will continue to safeguard the whole range of courses that young people may want to take, rather than focusing on different types of providers who provide the same course.
Mr. Boswell: I very much echo the comments that have been made and, in a sense, I rise only to reinforce those that were made about clause 5. We are talking about a mixed economy, which will function best if people have the widest variety of institutions and vehicles, including workplace institutions, in which to carry out their studies and the widest range of modes of delivery to help them to do so, including distance learning, which we have not discussed but which is important.
There are some structural questions about the way in which the Government channel the money, and I have some slight reservations, although not in a contentious way, about train to gain. I agree with the Minister that we need to put the emphasis on business employment, which he discussed under the previous clause, and the train-to-gain mechanism, although it has not yet been fully tested, is at least interesting. However, what I would not like him to do—I do not think that he has done this yet—is to put all the funding into that mechanism and leave nothing for other activities.
We need a market-driven system, because we live in a market economy and have competing providers. We also have competition in the choice available to individuals, whom we need to empower particularly in relation to the social return of their own learning. It may be that those at later levels can cope with the process and self-fund, but we need to keep all that in mind. The clause should help us to deliver that mixed economy or at least to debate whether it is taking place. It is important for us to encourage that, and when Ministers get something right, we should encourage them in doing so.
Bill Rammell: The debate has been short but instructive. I agree with the hon. Member for Brent, East that there should be diversity of not only provision of courses, but providers. We should certainly be seeking the highest possible quality, and we should acknowledge the improvement in quality in both further education colleges and independent providers in the past five to six years. In further education colleges, for example, the success rate has risen from 59 per cent. to 77 per cent., which is a very significant improvement in performance.
I also agree explicitly with my hon. Friend the Member for Sheffield, Hillsborough that in the provider structure we need a range of provision for the individual at a local level, whether that involves a school sixth form, a sixth-form college, a further education college or an independent provider. Often the judgment will be for the individual to make based on their particular circumstances.
I respect the track record and involvement in the issue of the hon. Member for Daventry. However, I am getting a little confused. In previous debates, I have heard strong demands from the Opposition Benches that we should implement what Leitch said about moving in a demand-led direction. Now we hear that not everything should lead in a demand-led direction and that we should hold back on some things. If there is a need for clarity from the Government, then I think that there is a need for clarity from the Opposition.
Mr. Boswell: Perhaps I can assist the Minister by saying, as a matter of general principle—I have no executive responsibility for this, as he will have noticed—that my view is that we need to move towards a demand-led system. I merely suggest to the Minister, if only for his own protection, that he should moderate or modulate that approach by giving a proportion of assistance for self-funding and self-selection to supplement the system but in no sense to take it over.
Bill Rammell: I think that those comments were directed at the hon. Member for South Holland and The Deepings rather than at me.
I strongly agree with the hon. Member for Daventry about the importance of individual learning accounts. If he examines the commitments that we gave in the further education White Paper, he will see that we have made it clear that from September we will trial individual learning accounts at level 3. We all know the difficulties that we had with the original notion of individual learning accounts, but virtually everyone to whom I have spoken in the further education and training sector has acknowledged that that initiative, although there were flaws in its design structure, unleashed something in personal commitment to education and training that we should value and capture. That is why, in my view rightly, we are looking to trial those learner accounts from September.
On the specific arguments, the clause is about ensuring that there is a duty in relation to diversity and choice.
Mr. Wilson: We spoke earlier about savings to the Learning and Skills Council. Does the Minister agree that the provision of diversity and choice could actually lead to an increase in costs for the LSC? Once choice is introduced into the system, it has the potential to cause major shifts in the nature of the market because of the introduction of learner choice into the marketplace. Has an impact assessment of the potential for the LSC to incur increased costs been carried out?
Bill Rammell: The hon. Gentleman is eliding the issue of expenditure on administration, which was his original point, with expenditure on the provision of the service to the young person or adult. In terms of a variety of providers being able to meet that demand, we stand by the Government’s track record of investing in the further education and training sector in a way that has not happened in the past.
In certain circumstances, there will be a need to open up the market to new entrants, which is only one of a range of options that can be used to tackle poor quality. The right intervention will depend on the circumstances, but under the right circumstances contestability in competition can act as a powerful lever to raise quality by increasing the rewards to good providers and the penalties for poor providers. However, as we said in the White Paper, it is important that there is not competition for its own sake. The LSC will review provision every five years in each area to establish whether competition is needed to improve quality, promote innovation or expand provision, and new and existing providers throughout the country will be able to bid.
To respond to the point made by the hon. Member for Brent, East, all providers will have to meet rigorous quality criteria, which will include the ability and commitment to collaborate with other providers when appropriate and to deliver curriculum choice in 14-to-19 learning.
I want to make it clear that further education colleges have nothing to fear from that competition and the expansion of the demand-led approach. Before we launched the train-to-gain initiative, further education colleges were nervous about how successful they would be under it. In fact, they have been very successful in gaining the business, which demonstrates their quality and their success. I urge the Committee to agree that the clause stand part.
Question put and agreed to.
Clause 6 ordered to stand part of the Bill.
Clauses 7 to 13 ordered to stand part of the Bill.

Clause 14

Incorporation of further education institutions
12.30 pm
Mr. Hayes: I beg to move amendment No. 26, in clause 14, page 10, line 7, leave out ‘Learning and Skills Council for England’ and insert ‘Secretary of State’.
The Chairman: With this it will be convenient to discuss amendment No. 28, in clause 15, page 10, line 40, leave out ‘Learning and Skills Council for England’ and insert ‘Secretary of State’.
Mr. Hayes: We are making progress and storming through our consideration of the Bill with the alacrity that one would expect.
Clause 14 concerns the power to incorporate further education colleges. In Wales, the power is being transferred to Welsh Ministers, yet in England, the powers are being transferred from the Secretary of State to the Learning and Skills Council. Why should the powers be held by accountable Ministers in Wales, but by the somewhat less accountable—I choose my words carefully—Learning and Skills Council in England?
These are probing amendments to discover from Ministers why the Learning and Skills Council is being given this role. I said earlier that the problem is not what the Bill contains, but what it does not contain, but at this juncture I want to point out an exception to that general rule. In some ways the Bill reinforces, or embeds, the Learning and Skills Council in a process of managing and funding skills that is not entirely consistent with where the Leitch review and its likely repercussions will take us. I suspect that in the coming months and years we might seek to remove powers from the LSC, rather than adding to its already extensive competence.
This small aspect of the Bill is an example of where it seems to me that we are embedding the authority of the LSC. When we come to consider the LSC’s relationship with further education colleges in respect of college principals, governors and managers, we will see another example. I thus qualify my earlier remark just to say, in that respect, that what the Bill does might not be helpful or in tune with current thinking. This probing amendment is designed to establish exactly what Ministers feel about that issue. I look forward to hearing the Under-Secretary’s response before deciding whether to test the mood of the Committee on this small but important matter.
Phil Hope: The amendment moved by the hon. Gentleman would, in effect, maintain the current arrangements. We set out our ambition in our White Paper on FE reform entitled “Further Education: Raising Skills, Improving Life Chances”. Our ambition is a simplified and more flexible FE system, and we have the aim of improving performance, increasing choice and improving participation. It is by transferring the powers of the Secretary of State to establish or dissolve a FE corporation to the LSC that we are underpinning the reforms that we set out in that White Paper.
Under the current arrangements, the Secretary of State’s decision to establish or dissolve FE institutions is based on information and a recommendation provided by the LSC. By transferring those powers to the LSC, we are making the current practice simpler, quicker and less bureaucratic—I must say that I think that it will also be more transparent.
Having listened to the hon. Member for South Holland and The Deepings debating issues of bureaucracy in many other parts of the House, I am sure that he would welcome the fact that the clause will not only improve the pace at which decisions can be made and the transparency of those decisions, but reduce the bureaucracy involved. As the LSC is the body responsible for planning and funding high-quality education and training, both for young people and adults, we believe that it is best placed to ensure that the most appropriate delivery arrangements are in place for learners in any particular area.
I want to make the important point that we will retain the current requirement that the LSC must publish proposals to establish and dissolve FE corporations, with some appropriate modifications. That requirement is set out in regulation—S.I. 2001, No. 782. In particular, there is a requirement to consult local partners and consider their views before any proposals are finalised. I hope that that gives the hon. Member for South Holland and The Deepings the assurance that after making this technical change, there will be no diminution in the extent of consultation or engagement with the local community.
Mr. Hayes: One can imagine the circumstances that the Minister describes being fairly dramatic ones. The power that we are discussing would be unusual and would not be exercised in the usual course of events. What right of appeal would there be? What procedure would take place in respect of an appeal? Also, at what point and in what circumstances would the Secretary of State take the power? Answers to those questions might be beneficial to the Committee as we try to decide whether we need to vote on this issue.
Phil Hope: The regulations spell out the conditions under which the LSC must publish its proposals. Clause 16 goes into more detail and clause 10, which we have already considered, gives further clarification on the directions that a Secretary of State might need to give if the LSC was to make a decision that could be described as unreasonable or flawed in some way. The Secretary of State will still have the ability to intervene if he judges that a decision falls into one of those categories. We have considered already clauses that will give the Secretary of State the opportunity to intervene when those rare circumstances occur.
Mr. Hayes: I am seeking clarification because I am beginning to regret the fact that we sped through clause 10—it sounds like we should have had an immensely detailed debate on it. However, will the Under-Secretary be absolutely clear? He said that if the Learning and Skills Council was to act in an unreasonable or perverse way, the Secretary of State would have the power to intervene. Could that be stimulated by an appeal? Would there be an opportunity for those affected to make a case to the Secretary of State? Are there circumstances in which his scrutiny would be required?
Phil Hope: Clause 16 clarifies the process under which the LSC must publish, consult on and carry forward its proposals. A complete process is in place whereby local partners and others affected by its decisions can be consulted formally on the proposals and see the LSC’s decision-making process. I hope that that gives the hon. Gentleman the reassurance that he requires.
If the Secretary of State feels that the LSC has failed to discharge its duty to publish proposals or to carry out that consultation process, or that it is proposing to act unreasonably, he can issue directions. I hope that we have processes in place to ensure that there are opportunities for individuals to influence the LSC’s decisions through the publication of, and consultation on, its proposals, and a fall-back position if the LSC is deemed to have acted unreasonably or failed to discharge its duty.
Mr. Hayes: The Under-Secretary is being immensely generous in giving way and clarifying his position. Will he deal with my initial point about the apparent inconsistency between Wales and England? I made the point that one set of circumstances will apply on one side of the border, but that a different one will apply on the other. It would be helpful if he made clear his views on that.
Phil Hope: I regret not responding to that point before. The power to establish FE corporations in Wales was transferred to the National Assembly for Wales in 1999. By virtue of the Government of Wales Act 2006, that power thus transferred to Welsh Ministers when the new First Minister was appointed. The clause thus makes no substantive change to the situation in Wales, unlike the decisions that affect England. On that basis, I urge the hon. Gentleman to withdraw his amendment.
Mr. Hayes: We are making such good progress that I think that it would be unreasonable to press the amendment to a Division. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 ordered to stand part of the Bill.
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