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Mr. Simon: I will speak to the amendment before responding to some of the points made by hon. Members.
Amendment 3 would require the chief executive of Skills Funding to secure the provision of financial resources to the persons listed in clause 97(1), thereby removing the chief executive’s discretion to decide how the financial resources will be allocated. Clause 80 provides a power for the chief executive to secure apprenticeship places for 16 to 18-year-olds and for people aged over 19 but under 25 who are subject to a learning difficulty assessment. Furthermore, clause 83 imposes an obligation on the chief executive to exercise that power in order to secure sufficient apprenticeship places for everyone who wants one.
The amendment would have some unintended consequences; for example, it would require the chief executive to fund all those providing, or proposing to provide, goods or services in connection with the provision by others of education or training that falls within the chief executive’s remit, irrespective of the quality of such goods or services. I am sure that that is not the intention of the hon. Member for Bristol, West; he would rather, as he has said, raise the more general question of the funding of adult apprenticeships, and ask what deductions or inferences can be drawn from the Bill and the structures in it about the future funding of adult apprenticeships in particular and apprenticeships as a whole.
It would be wrong to believe that we are trying to send coded signals of any kind about any intention to change or reshape the future priorities or direction of the apprenticeships system. We fund them as we fund them now—very successfully, and increasingly so year on year. Last year, at every level and age group, there was an increase and improvement from the year before—indeed, to a record level. That is what we intend to continue doing.
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The hon. Member for Bristol, West mentioned his party’s and the Conservative party’s plan to cut Train to Gain. We think that is a mistake, because it is an increasingly successful programme that has high satisfaction rates. In two years’ time, there will be 1 million people learning in the workplace, with work-relevant, high quality learning. A programme that seeks to make progress by cutting Train to Gain is a mistake for him and for the hon. Member for South Holland and The Deepings.
Mr. Hayes: As I understood it, the intervention powers of the LSC will be transferred to the SFA.
Mr. Simon: We are not talking about the intervention powers, but about the delivery model—not that that is actually what is before us at present, but as the hon. Gentleman has moved on to that conversation I am happy to have it as long as you, Mrs. Humble, permit me.
Review of the decisions and performance in that funding envelope will be taken up at regular points during the year; the single account manager—the single funding interlocutor—will be able to vary the funding envelope in-year if demand is lower than expected, or if a provider is underperforming. The process will not be too complex because the funding will flow in direct response to learner choices, which frees up providers from being constrained by rigid funding agreements, and enables them to provide the courses that students and employers want, rather than the courses that the LSC thinks they want. In return, money will be routed more quickly to colleges and providers, and be settled more quickly, because it will be based on real demand, not on complex planning decisions.
Mr. Hayes: The reason I mentioned intervention powers is that the LSC and therefore, I assume, the SFA have the ability to adopt or create performance assessment systems, which could be directly linked to funding. Perhaps, therefore, the Minister might comment on the 157 Group’s suggestion that the SFA should have been a non-departmental public body. Was that option considered, particularly given the fact that the Young People’s Learning Agency enjoys that status?
The Chairman: Before I call the Minister, I must point out that we are wandering away from what is a very narrowly drawn amendment. I must advise members of the Committee that, if they continue in this fashion, I shall treat the debate as a stand part debate.
Mr. Simon: Thank you, Mrs. Humble.
I have said this before, but I can tell the hon. Member for South Holland and The Deepings that we did consider whether the SFA should be a non-departmental public body or a typical executive agency, which it is not, or the more unusual body we finally decided on, or whether we needed to legislate at all, which, strictly speaking, we do not. Fundamentally, the reason that we decided on the body that we now have—as I say, we have covered all this before—was that we wanted the SFA to be closer to Ministers, as part of a more streamlined process that gets from policy making to delivery in colleges and on high streets more quickly, efficiently and cost-effectively, while retaining some of the distance and operational independence that is also appropriate for the use of such large sums of public money.
The hon. Gentleman made an initial point. I would be grateful if he could remind me of it.
Mr. Hayes: The LSC enjoys intervention powers around performance and the relationship between funding and performance. When I intervened on intervention powers, the Minister replied in a way that suggested that those two things are not associated with one another, but we know that, in practice, they are. There is close alignment in the relationship between funding regimes or methods and the powers to deal with performance in colleges, is there not?
Mr. Simon: Obviously, there is a relationship and when we say “demand-led”, that does not mean “quality neutral”. Yes, the intervention powers transfer to the new body, as do many of the previous powers of the LSC. The LSC is a body that evolved over nine years and it was, in many ways, very successful, with much good practice that we can continue. We are not chucking the baby out with the bathwater.
Mr. Hayes: Including the management of the FE capital budget?
Mr. Simon: In framework for excellence, we have a single quality performance management tool for the whole of the 16-plus environment, and the SFA’s chief executive has explicit powers on top of that. However, the operational intention is for the process to be as light-touch and streamlined as possible.
On that note, I still hope that the hon. Member for Bristol, West will withdraw the amendment.
Stephen Williams: I have been listening carefully to what the Minister said in his responses to me and to the hon. Member for South Holland and The Deepings, who speaks for the Conservatives.
The purpose of the amendment, and indeed of many previous amendments, was to see if a way could be found to make it easier for employers to offer apprenticeship places. In response to previous amendments, we received assurances from the Minister, for example that the Government would foster the creation of group training associations, through the chief executive of the SFA, to make it easier for small employers in particular to offer apprenticeship places.
I was looking for an assurance from the Minister that the funding regime might be amended to make it easier for employers to fund the off-the-job training costs of an apprenticeship place. It is necessary for me to clear up a comment that the Minister made about my party’s policy—the hon. Member for South Holland and The Deepings, who speaks for the Conservatives, can defend himself. We are not proposing to cut the Train to Gain budget. We are simply saying that the future growth of that budget, which is quite substantial at around £500 million over the remainder of this comprehensive spending review period, should be specifically allocated to the funding of the off-the-job training costs of adult apprenticeships. Rather than a cut in expenditure, it is more imaginative use of existing budgeted Government resources, and it is important that we have such debates to make clear what we each propose.
None the less, it would not be appropriate for a simple amendment to alter fundamentally the Government’s current budgetary provisions. That is a matter beyond the Minister’s pay grade, let alone mine. We look forward to the Budget statement on 22 April to see whether something more imaginative will come from the Treasury to fund skills during the difficult economic circumstances that we are facing.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 97 ordered to stand part of the Bill.

Clause 98

Financial resources: conditions
Amendment made: 277, in clause 98, page 60, line 7, leave out ‘a learning difficulty assessment’ and insert
‘an assessment under section 139A or 140 of the Learning and Skills Act 2000 (c. 21) (assessments relating to learning difficulties)’.—(Mr. Simon.)
This amendment is consequent on amendment 278.
Clause 98, as amended, ordered to stand part of the Bill.

Clause 99

Performance assessments
Mr. Hayes: I beg to move amendment 136, in clause 99, page 60, line 20, at end add—
‘(3) The Chief Executive must consult with the following when adopting or developing schemes as set out in subsection (1)—
(a) The YPLA,
(b) a local education authority,
(c) Ofsted, and
(d) the Quality Assurance Agency for Higher Education.’.
The amendment would ensure that, when the CEO of the Skills Funding Agency is adopting or developing a performance assessment scheme, he does so in conjunction with the YPLA, an LEA, Ofsted and the Quality Assurance Agency for Higher Education. As we discussed earlier, the CEO of the Skills Funding Agency is in charge of a large centralised and relatively unaccountable body. I share the 157 Group’s fears about that. It suggests strongly in what it describes as its supplementary evidence to the Committee that the status of the newly created Skills Funding Agency be formally clarified under the Bill and, as I have argued, that it should have the same status as the YPLA rather than being the close-to-Ministers body the Minister described, which simultaneously is supposed to be decentralised, responsive and light touch. I am not sure that those things can be reconciled, given the past experience of how Governments have managed their affairs.
The 157 Group was at pains to point out that too much power is being placed in the hands of Ministers and officials, which is out of line with the experience at HEFCE and with the proposed status of the YPLA. The amendment is designed to ensure that even if the SFA must remain within the Department, it consults closely with other key agencies in the development and adoption of performance methods and schemes. The performance schemes are vital when deciding where funding should go and, as such, are vital to the continuing existence and success of many education providers.
We should ensure that every effort is made to see that the performance schemes are developed with the closest co-operation of the providers, namely LEAs and the YPLA. It is critical for the vitality of the sector and to progressing to the light-touch mode that the Government claim they want to see characterising the new system for the funding and management of skills.
As the 157 Group commented:
“You have to remember that the SFA does not actually deliver anything. The delivery has to be done through the provider network with employers and so on, which is where you want to put the most resources to ensure that you can do the maximum to help the nation.”——[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 3 March 2009; c. 31, Q85.]
It argued for more power and action at local level with local authorities, providers and employers. That is central to the Bill and to our disagreement with the Government. A theme emerges from the analysis and recommendations of the Leitch report on how the system needs to change—with much of which we agree—the comments of witnesses in the evidence sessions of the Committee and other statements from experts in the field. There is a need to decentralise, to move to a lighter-touch regime, to be more responsive to demand and to involve employers at every stage of devising and delivering skills training. However, time and again, those who have commented on the Bill have concluded that the Government are at best paying lip service to that approach, while simultaneously establishing a byzantine bureaucracy that is frankly unlikely to deliver what they want or the nation needs. At the very least, the Government should accept the amendment to ensure that the SFA is consultative, if they must have an SFA in the proposed form at all.
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Stephen Williams: I rise briefly to support the amendment. It is common sense that consultation should take place with the YPLA and local education authorities as they are co-funders under the new arrangements for the provision offered by colleges and other training providers. It is good practice to consult with other bodies that are already concerned with quality assurance in higher education, such as Ofsted and the QAA. The only point that I would add to the amendment is consultation with representatives who offer a learner’s perspective on how the quality of the provision offered by colleges and other providers should be assessed. The National Union of Students or some other mechanism could be used to ascertain the opinions of learners of the training courses that are delivered to them. I support the amendment, but I would add that point.
Mr. Simon: I do not know whether to deal first with the amendment or with the concerns of hon. Members, which do not seem to be exactly the same.
Amendment 136 would place a duty on the chief executive to consult specified organisations when adopting or developing schemes for the performance assessment of training or education providers that fall within his remit. It is similar to amendment 135 in respect of the YPLA, which we debated last Tuesday.
We share two of the concerns. First, we must ensure that the interests of certain bodies are considered when adopting or developing performance assessment schemes. That is essential in ensuring that learning providers are treated fairly and encouraged to take responsibility for self-assessment and improvement. Secondly, we must encourage the YPLA, the SFA and others to work together to develop a co-ordinated approach to performance assessment that keeps the burdens on colleges and other providers to a minimum. All of that is already happening, as is joint working.
In the “Raising Expectations” White Paper, we committed to a single tool for the assessment of all post-16 providers.
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