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Sarah McCarthy-Fry: One of the main objectives of Ofqual is the maintenance of standards. If it is felt that the chief regulator has not fulfilled the objectives of Ofqual, that would be a consideration in deciding whether they should be removed from office.
Mr. Laws: I know that Ministers come programmed to reject all Opposition amendments—perhaps understandably—but does the hon. Lady agree that the intention behind the words that the hon. Member for Bognor Regis and Littlehampton is trying to amend is ambiguous? An
“inability or unfitness to carry out the duties of office”
almost suggests a medical reason for the potential dismissal, rather than the quality of the job that is being done. Will she reflect on whether the hon. Gentleman is actually being extremely helpful in trying to make this paragraph clearer and firmer?
Sarah McCarthy-Fry: I take the hon. Gentleman’s point, but I did not read the paragraph as saying that the removal could be only for medical unfitness.
Mr. Laws: I was not necessarily suggesting that medical unfitness would be the only grounds, but the words “inability” and “unfitness” suggest a basic problem with an individual doing a job, rather than the quality of the job that is being done. That is the ambiguity in the paragraph.
Sarah McCarthy-Fry: I disagree about the degree of ambiguity because the duties of office are the duty objectives that have been set out. The hon. Member for Bognor Regis and Littlehampton raised the example of the maintenance of standards. Meeting the standards objective is one of the main duties of Ofqual and of the chief regulator. I do not agree with the point the hon. Member for Yeovil is making.
Amendment 416 proposes that:
“The terms of the conditions of service of the Chief Executive, including all refunds of expenses incurred by the Chief Executive in carrying out his duties shall be published annually.”
Paragraph 6(5) of schedule 9 states that the terms and conditions of the chief executive and the
“amount of remuneration, allowances and expenses”
will be determined by Ofqual with the approval of the Secretary of State. That will ensure that the payments are set at a fair level that represents good value for money. We do not consider it appropriate to place a requirement in legislation to publish an individual’s terms and conditions of service or expenses repayments.
Similarly, amendment 417 proposes that payments made to the chief regulator and ordinary members
“shall be published annually together with the contracts of employment and pension arrangements of the chief regulator and the ordinary members.”
Mr. Walker: I really should have read the Bill more closely than I did. Am I right in thinking that the chief executive will have a rolling contract or will it be a fixed-term contract of three years or whatever, subject to renewal at the end of that period?
Sarah McCarthy-Fry: My understanding is that it is a fixed-term contract, but I stand to be corrected.
Amendment 417 proposes that payments to the chief regulator and ordinary members be published annually. Again, the amount of those payments is approved by the Secretary of State. We do not consider it appropriate to place a requirement in legislation to publish those payments. The terms of contract will be up to Ofqual and subject to the Secretary of State’s approval.
Mr. Gibb: The Minister says that there is no need to put the publication of remuneration in the legislation. Does that mean that she intends that terms and conditions, annual salaries, expenses and pension contributions will be published in the annual report?
Sarah McCarthy-Fry: I am not sure whether it will go in the annual report, but Ofqual will be subject to audit by the National Audit Office. It will have to produce accounts, and my memory of most organisation’s accounts suggests that that has to be stated in broad terms.
Mr. Laws: Is it not standard procedure that even if something is within particular bands, the amounts of the salaries and pension entitlements of senior individuals in organisations such as this would be included in the annual report?
Sarah McCarthy-Fry: I am not saying that it will not be included. My point is that I envisage other mechanisms being used to ensure the accountability mentioned in the amendment, rather than it being in the Bill.
Mr. Gibb: I am still not clear about whether that information will be included in the annual accounts. One of our prime roles in this place is to maintain and look after tax revenues and ensure that they are spent properly. Neither I nor the hon. Member for Yeovil have been able to get the answer to a simple question: will the annual salary and pension contributions of the chief regulator and the chief executive be included in the annual report of Ofqual?
Sarah McCarthy-Fry: I cannot answer that question at the moment, but I will get back to the hon. Gentlemen on the matter. I intend Ofqual to be as transparent, visible and accountable as we want it to be. Certainly in respect of the annual accounts, National Audit Office guidelines will be used as to what is published and audited.
Bill Wiggin: My understanding is that if a Minister says in Committee that something should be so, any judge who later looks at the musings of the Committee will try to take the Minister’s decision as part of the judgment. Therefore, if she says that those figures will be published, it is highly likely that that will happen. Why will she not say that?
Sarah McCarthy-Fry: I said that we intend Ofqual to be as visible, transparent and accountable as all of us wish it to be. I do not intend to go into detail at this stage. We will look further into what is in the annual report and refer back to the matter as we progress further with the legislation.
Amendment 420 is about the removal of ordinary members. It is similar to amendment 385 and seeks to state in the Bill that ordinary members can be removed from office by the Secretary of State on the grounds of
“failure to ensure the standard of regulated qualifications is maintained.”
Under paragraph 4(5) of schedule 9, the Secretary of State may remove an ordinary member from office on the grounds of
“inability or unfitness to carry out the duties of office.”
The same argument as the one I made earlier applies.
Amendments 40, 197 and 198 propose restrictions on the appointment of Ofqual members. It goes without saying that we need Ofqual to have top-notch people with a mix of the necessary skills and experience and the fibre to act independently and take the flack that will no doubt come their way. We must ensure that Ofqual membership attracts the best possible candidates. Ofqual members will need a wide range of experience and expertise to ensure and account to Parliament that Ofqual is a well-run organisation that meets its objectives and responds well to all those, including employers, higher education institutions, schools and colleges, that rely on it to do its job thoroughly and effectively.
I can tell the hon. Member for Leominster that salary and pensions contributions will be included in the annual accounts. I do not know whether that goes forward to the annual report, but annual accounts are a matter of public record.
Appointments will be made by the Secretary of State to ensure that the best possible candidates are chosen. As I said earlier, the public appointment process will be regulated by the OCPA to ensure independence and transparency. If we are to have the best possible candidates, I do not want the Bill to narrow down the field. Amendment 197 proposes that one of the members of Ofqual should be a member of another regulatory body. I do not think that we should go down that route. Does Ofqual need to work closely with fellow regulators in the UK and overseas—with Ofsted and other regulators? Absolutely, of course it does. Does that mean that we need to write something into the membership provisions? No, I do not think that it does.
Mr. Gibb: Do other regulatory bodies in this country have a requirement for their board to contain a member of another regulatory board?
Sarah McCarthy-Fry: Not to my knowledge, but I will find out. Amendment 198 proposes that the chair and chief executive must be full-time positions. Again, we do not need legislation on that. Will the posts be demanding, high-profile, key leadership roles in the education sector? Yes, of course they will. Will the posts be full-time? The chief executive position is pretty much bound to be and the post of chief regulator may well be too, but, again, I am not sure that we need it in legislation.
Mr. Walker: The Minister says that the post of chief executive is “pretty much bound to be”, which is not quite a cast iron assurance. Will it be a full-time position?
6.15 pm
Sarah McCarthy-Fry: I certainly envisage it being a full-time position, but I do not think that it is necessary to put that in the Bill.
Amendment 40 proposes that ordinary Ofqual members
“must not have financial or other occupational interests that might be regarded as constituting a conflict of interest with that of promoting the objectives of Ofqual.”
I am not entirely clear what the amendment is intended to achieve. It would clearly be inappropriate to appoint anyone directly connected to an awarding body that Ofqual would be regulating, but I do not think the amendment is about that. I cannot see who else would have a conflict of interest serious enough to bar them from membership. Ofqual will have procedures to manage conflicts of interest over specific issues. I do not accept that there is any professional who would have an interest that would conflict with maintaining standards or confidence in exams and assessments. What matters most to head teachers, like the rest of us, is that confidence in the system is high because of robust regulation, so their students get the results and credit they deserve for their achievements.
Mr. Gibb: Can the hon. Lady not understand that if someone who runs a school and is judged on the exam results of pupils were also a member of Ofqual, it would theoretically be in their interest to allow standards to decline, so the school’s results would rise by more than the standard of education provided there would normally demonstrate? It is a clear and obvious conflict of interest.
Sarah McCarthy-Fry: It sounds a little convoluted to me. The Bill provisions are consistent with provisions for the membership of the Higher Education Funding Council for England and Ofsted. Indeed, there are several vice-chancellors on the board of the HEFCE, which has a role in funding teaching and research in universities and colleges. The HEFCE has successfully managed any conflict of interest, but the important thing is the essential expertise that those individuals bring. We need Ofqual members who bring a range of experience and expertise.
Mr. Gibb: Does the hon. Lady think that it would be right for a serving bank board member to be on the board of the Financial Services Authority?
Sarah McCarthy-Fry: We are talking about a different issue.
Mr. Gibb: We are talking about regulation.
Sarah McCarthy-Fry: I accept that it is regulation but, in this instance, I think it important that Ofqual has the flexibility to have a range of expertise. I do not want to impose restrictions and say that it cannot bring people in because they were head teachers.
Mr. Gibb: But does the FSA not need expertise as well? It has to go out and employ somebody from the City of London, who has to abandon all their interests in a bank or financial institution. Should the hon. Lady not ensure that any board member of Ofqual is not a serving professor of education in a teacher training college or a serving head teacher?
Sarah McCarthy-Fry: I think that this case is different. The two cases cannot be compared. Ofqual’s conflict of interest rules will cover it. I do not agree with the hon. Gentleman and his FSA and banking analogy.
Amendments 54 and 55 propose that Ofqual rather than the Secretary of State should appoint Ofqual’s first chief executive and determine his or her conditions of service. On the other hand, amendments 418 and 419 propose that the Secretary of State should appoint all future Ofqual chief executives, not just the first. There is provision in the Bill for the Secretary of State to appoint the first chief executive because we have a chicken and egg situation. Ofqual will need a chief executive on day one to lead on the set-up of the organisation and ensure that it hits the ground running. Indeed, we will do our best to ensure that the chief executive is in the post before day one as part of a shadow arrangement, again so that Ofqual can get off to the best possible start. However, Ofqual itself will not exist at that stage; there will be no formally appointed Ofqual members, so they cannot appoint of the first chief executive. What we will need is for the Secretary of State to appoint on the first occasion, looking to Kathleen Tattersall, as the chair of interim Ofqual, to play a leading role in the appointment. Future chief executives should of course be appointed by Ofqual rather than the Secretary of State, and their conditions of service will be decided by Ofqual.
Mr. Laws: Did the Government consider any other options for the appointment of that individual the first time round? Did they consider any role that Parliament, through the Select Committee, might play?
Sarah McCarthy-Fry: As I said, the important thing is that we need to get the chief executive in as soon as possible, which is why we have taken the route we have—that the Secretary of State appoints the first chief executive.
Amendment 415 proposes that the Secretary of State should have the power to remove the chief executive, but that is neither necessary nor appropriate. Ofqual should have the power to both appoint and remove the chief executive. The conditions of service are set by the Secretary of State for the first chief executive, while Ofqual will be able to do that for future chief executives.
There are two amendments that propose a role for the Select Committee on Children, Schools and Families in the appointment of staff. They refer specifically to that Committee, even though Ofqual’s role is also of interest to the Select Committee on Innovation, Universities, Science and Skills. The Children, Schools and Families Committee is appointed by the House of Commons to examine the administration, expenditure and policy of the Department for Children, Schools and Families, including the work of non-departmental public bodies and Ofsted. Amendment 57 proposes that the appointment and conditions of service of Ofqual chief executives after the first appointment should be subject to the approval of the Select Committee rather than the Secretary of State. Amendment 58 proposes that the number of Ofqual staff, their conditions of service and the amount of remuneration allowances and expenses of staff should be subject to the approval of the Select Committee.
 
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