Further Education and Training Bill [Lords]

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Clause 15

Dissolution of further education corporations
Mr. Hayes: I beg to move amendment No. 27, in clause 15, page 10, line 26, leave out subsection (4).
Having started somewhat slowly, we are moving ahead with great speed. I note that my hon. Friend the Member for Upminster, with her typical efficiency, has passed me the details of the amendment. It would delete the provision that states:
“An order under this section made by the Learning and Skills Council for England in respect of a further education corporation in England may provide for the transfer to the council of property, rights and liabilities of the corporation”,
and that the
“council must obtain the consent of the Secretary of State before making provision of a kind mentioned in subsection (3A).”
The gist of my argument is similar to that on the previous group of amendments: the subsection seems to transfer power to the Learning and Skills Council. We are concerned throughout our consideration of the Bill that the necessary accountability for decisions, which rests quite properly with Ministers through this place, should be maintained. Official Opposition Members have some reservations about the power of the Learning and Skills Council and the way in which it is exercised.
Let me lay my cards on the table in that respect because it is important that we are not seen to be dogmatic about this subject. Of course, we recognise that much of the work of the council is necessary and that much of the money that it spends would be spent under whichever structure were to ensue from changed considerations of policy in this area.
We do not believe that we will save all that the council spends simply by changing the structure. Heaven knows that the vast bulk of that money is spent for good purpose, but that does not mean that there is neither room for greater efficiency, nor scope for reducing bureaucracy, given that we are talking about a budget that is considerably bigger than that of the Royal Navy. The Government have acknowledged that in what they have said today and previously. The structural changes that they believe will make the body more lean and efficient have been advertised to the Committee and have been set out previously. Ministers say that they are determined to ensure that there is the kind of value for money that is bread and butter to Conservative Members because efficiency and effectiveness are our second names in the official Opposition.
12.45 pm
We recognise that there has to be a management and funding structure and expenditure on such matters, but we want to test Ministers throughout the Committee to ensure that all the money that is expended is best spent for the best purpose. With this amendment, as with the last one, we want to be absolutely sure that, in transferring authority to the Learning and Skills Council, we do not embed a system that could be improved. I await with interest the Minister’s comments on those matters.
Phil Hope: I congratulate the hon. Gentleman on coping so well with the pace of the Committee’s proceedings so far. The amendment would prevent the transfer of property rights and liabilities by the Learning and Skills Council to itself when a further education corporation is dissolved. Why do not we wish to support that amendment? Under the current arrangements, the Secretary of State may, by order, transfer to the LSC the property rights and liabilities of a dissolved further education corporation, where he deems it necessary and appropriate. In future, it is possible that the LSC might need temporarily—I emphasis that word—to transfer such rights and liabilities to itself, to achieve the best results for an area. In what circumstances might the LSC need to do that? It might happen if it were not possible to find a suitable alternative body to which to transfer the property when two colleges merge, for example.
A merger is a common reason for dissolving FE corporations—seven mergers of FE corporations will take effect during the summer, and more are under discussion. That is part of the process of developing the FE system. The mergers have been discussed and planned over time to ensure more effective local arrangements. It will be a temporary requirement in cases where we cannot find a suitable alternative body to which to transfer the property. In such cases, we will require the LSC to seek the prior agreement of the Secretary State before it transfers the assets to itself as part of the process of managing the merger. It is expected that the provision will be used rarely, if at all. However, we are trying to anticipate situations that might arise and provide contingency arrangements. I ask the hon. Gentleman to withdraw the amendment, given my account of the purpose of the clause and the safeguards that we are putting in place.
Mr. Hayes: I understand those safeguards, and, given the Minister’s comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 ordered to stand part of the Bill.

Clause 16

Publication of proposals
Mr. Hayes: I beg to move amendment No. 29, in clause 16, page 11, line 4, leave out subsection (2).
The Chairman: With this it will be convenient to discuss the following amendments:
No. 19, in clause 16, page 11, line 10, leave out ‘and (2A)’ and insert ‘(2A) and (2B)’.
No. 20, in clause 16, page 11, line 16, at end insert—
‘(2B) The third requirement is that the council—
(a) has regard to any representation from a local authority which has children’s services and education responsibilities in the area in which the establishment or dissolution of a further education corporation is proposed, and
(b) provides such an authority with written reasons for any decision to establish or dissolve a corporation.’.
No. 36, in clause 16, page 11, line 16, at end insert—
(2C) The council must, after considering representations, publish a policy statement which must include reference to—
(a) the preferred structure of provision of post-16 education;
(b) the need to ensure a choice of qualifications and courses at all levels;
(c) the impact of any new provision of post-16 education on existing providers of post-16 education;
(d) the procedure to be followed when two or more further education corporations are seeking to merge.’.
Mr. Hayes: This, in a sense, is more of the same, because with clause 16 we are in the business of empowering the Learning and Skills Council and qualifying those powers. Much of this part of the Bill, as I said at the beginning of the sitting, is about changing structure and competence with respect to the Learning and Skills Council. It is important that accountability should be retained, that the circumstances in which the competencies are exercised should be, as the Minister said, transparent and, therefore, well understood by all concerned and that there should be appropriate sets of safeguards to ensure that perverse or unreasonable decisions can be challenged from the bottom up.
My anxiety about this part of the Bill—although the Minister has been reassuring about previous clauses—is that that transparency may not be all that it should be and that the lines of accountability will become more blurred. The amendment is intended to probe in that respect. The clause would make modifications to the 1992 Act, reflecting the transfer of powers to establish and dissolve further education corporations, and we have concerns about that.
We look to a halcyon age of FE colleges. I am disappointed that my hon. Friend the Member for Daventry has had briefly to leave the Committee, as he has already made a telling contribution to our considerations. He was one of those hon. Members who were pivotal in establishing that halcyon age of incorporation. Many college representatives tell me that they look back to those golden days, post-incorporation, when the FEFC provided light-touch regulation, affording them a degree of freedom to innovate and excel. College principals to some degree feel that much, or at least some, of that has been lost since, with an altogether more bureaucratic structure surrounding them, and an unhelpful level of micro-management.
Mr. Austin Mitchell (Great Grimsby) (Lab): All this talk about a halcyon age under the Tories is bringing tears to my eyes. Does the hon. Gentleman agree, as an avid reader of Private Eye’s higher education supplements, that that halcyon age of freedom also led to problems? Companies were established and failed; relationships were established with Singapore, Malaysia and elsewhere—there was scandalous extortion; and there were various financial problems accruing from the power given to principals to run colleges’ financial affairs in theirown way.
Mr. Hayes: I shall break a habit, Mr. Atkinson, because I generally do not repeat private conversations in Committee or on the Floor of the House but I must reveal to you that the hon. Member for Brent, East and I had a conversation before the Committee began. She implored me not to speak at too great length or indeed—
Mr. Mitchell: Why?
Mr. Hayes: Members across the Committee begged me to take no notice of the hon. Lady. They told me that I should not restrain myself and that within the very strict guidance of a diligent Chairman, I should feel free to range widely because they enjoy my casting pearls before them, but I owe an obligation to her—I know that she has a busy social diary and I do not want to keep her from it.
Mr. Mitchell: If the hon. Gentleman is casting pearls, what are we?
Mr. Hayes: The hon. Gentleman has rightly drawn attention to the price of freedom. In a world which is frail and faulted, as we have fallen from the state of grace, the price of liberty is that sometimes there are imperfections in the way in which individuals and organisations operate. If the choice is between the risk of that kind of imperfection and a system which is so strangled by bureaucracy and so micro-managed from the centre that every opportunity for any kind of imaginative exercise of the very substantial talents that lie in the FE sector is limited, I will go with the risk of imperfection. I would rather that than see people constrained; strangled and suffocated by bureaucracy, over-regulation and control freakery. I know the hon. Gentleman would no more want to see that than Opposition Members would. I happily give way to the Minister, as we are running into lunch.
Bill Rammell: I thank the hon. Gentleman for giving way. In terms of the pearls of wisdom he is positing before the Committee, I have to place on the record that in the last two years I have not met one further education college principal who has told me that we should return to the halcyon days of the Further Education Funding Council. If, however, in my extensive conversations with numerous FE principals round the country I have missed somebody, perhaps the hon. Gentleman could tell us which individual said that we should return to that structure.
Mr. Hayes: I have already revealed one small element of our private discourse, and I hope that the hon. Lady will forgive me, but now I shall reveal something more. I hope that in the course of the time that I do my job—I shadow half of one Minister and the whole of another, so I am doing one and a half jobs—the Opposition can lay out a plan for how we might move to a system where colleges were self-regulated to a much greater degree.
The Chairman: Order. Before the Minister replies, may I remind the Committee that we started off discussing the dissolution or the establishment of further education corporations? We seem to be talking on a rather wider level than was perhaps justified by the amendments.
Bill Rammell: Very briefly, Mr. Atkinson, I take your guidance, but an important point has been raised. I also want to ensure that we do not get on to clause 17 before this afternoon. The hon. Gentleman has talked about the importance of self-regulation, and I agree with him. Is he not aware of the body of workand the working party that we have established under Sir George Sweeney’s chairmanship? It is taking forward that agenda on self-regulation.
Mr. Hayes: The Minister says that the Government are advancing self-regulation and, to draw attention to the specifics of this amendment, it is critically important that we are bold and brave about taking the necessary steps to ensure the kind of freedoms that I have described. It is not appropriate to maintain the level of bureaucracy. The Government have abolished one body and added another with a role in managing, regulating or controlling FE colleges during the hon. Gentleman’s tenure. I am not sure that shows the kind of determination that I want to see in respect of the Foster recommendations.
We need to be much bolder and braver about allowing for a system which is diverse, subject to much greater levels of local accountability and is less directly managed from the centre. If one follows through the combination of Leitch and Foster and moves to a demand-driven system with a heavy emphasis on local economic activity and need, with deregulated colleges we could have a system in which colleges were responsive and imaginative in the kind of partnerships that they form to deliver the skills agenda, to which this side of the Committee is committed and which the Government are grudgingly and hesitatingly following us towards.
It being One o’clock, The Chairman, adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at Four o’clock.
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