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Mary Creagh: I thank the hon. Member for Yeovil for setting out so eloquently the reasons behind my amendment. He has given many of the arguments that I was to use.
The amendment is not perfect, but I believe that perfection is the enemy of the good. As the hon. Gentleman said, it is a good amendment. Most other regulators have the power to fine, and regulation should create an environment in which innovation can flourish and people can take risks, while still safeguarding the public interest. The ultimate deterrent, to keep the public interest at the forefront of regulators’ minds, is the ability to impose a fine. I am not sure whether I can imagine the circumstances in which such a fine would be imposed. There would have to be catastrophic failure on behalf of the examining organisations, with consistently poor service and behaviour—egregious examples, which cannot be imagined because they have not happened. In some ways, that shows that we already have a reasonably good system of regulation, but the deterrent is important.
The issue of whether Ofqual should have the power to fine is not new. It was raised by the Government in the 2007 consultation paper, “Confidence in Standards”, and 62 per cent. of respondents felt that Ofqual should have such a power. Unsurprisingly, none of the awarding organisations felt it necessary. It was important that we listened to the chair of Ofqual, as we did on 3 March, when she gave evidence to the Committee asking for the power to be included in the Bill.
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Mr. Gibb: Does the hon. Lady envisage the power to fine being applicable to the QCA as well? If it failed to deliver proper assessments of SATS, as it did last summer, could Ofqual fine it, under this amendment? Is that how she envisages the amendment working?
Mary Creagh: In an ideal world, yes, but in the real world it would be bizarre for the public purse, which pays for the QCA, to be fined by a regulator and for that money to re-enter the public purse. That circularity would militate against it, although I acknowledge that the case that the hon. Gentleman raised caused enormous distress and stress to many learners. I am glad that my right hon. and hon. Friends took appropriate action.
The amendment would put in place a failure-free system. Interestingly, we were talking about other potential awarding organisations, such as Flybe, which, like all airline companies, is a failure-free organisation. Every day, they cannot take the risk of something going slightly wrong with a plane that could have catastrophic consequences for the pilot, crew and passengers, as well as, obviously, their business. Failure-free organisations are now entering the learning environment and, perhaps, passing on some of their quality and assurance systems to the development of qualifications for learners in their companies.
The mere existence of the power to fine will influence the behaviour of those that Ofqual regulates, which can only be to the benefit of learners. As the hon. Member for Yeovil said, it would be an intermediate step—a sanction falling short of the more serious one of removing recognition of the awarding body. The ultimate step would be to prevent it from awarding recognised qualifications, which, of course, could be damaging to learners past and present. We never want somebody to receive a qualification from an awarding body that then is no longer allowed to give them out. By implication, that would devalue past awards.
The ability to fine is a sign of a robust regulator. It would force organisations to think twice before taking measures that could impact on the learner. Most measures tend to relate to doing things cheaper, faster and—supposedly—better. However, we know that cheaper and faster is not always better, either for the learner or the exams and tests being marked. We hope that Ofqual will co-operate with organisations, but as the hon. Gentleman said—I am sorry that he is not here to hear my response to his eloquent outlining of his amendment—there would be risks. We would need to be confident that a fine would not result in fee increases. Most exam fees are paid for out of the public purse by public bodies, such as schools, colleges and so on, and we do not want fee increases to be passed on to the learner, so I understand the Government’s reluctance.
Ofqual would need to set out its own sanctions policy and ensure that any fines levied are proportionate. It would also need to reflect the changes to the qualifications made by this Bill, because, as we have heard, a wider range of organisations could be recognised in the future to award qualifications. For example, I would not want a fine to jeopardise the existence of a charity. I must declare a past interest as a board member of Rathbone Training for seven years. I hope that the time would come when it could, as a large national charity providing life skills training, develop its own qualifications. However, if something went wrong and a fine was imposed, we could not jeopardise the charity’s existence. In any fine-imposition regime we would therefore need to separate off the amount of money generated by the qualifications and protecting the rest of the organisation which, in Rathbone’s case, is delivering skills and learning.
I have spoken about the 14-to-19 work that my local West Yorkshire fire service is doing with young people in local schools such as Wakefield City high school and across the region. To go back to equivalence, which is the bugbear of the hon. Member for Bognor Regis and Littlehampton, that is the equivalent of GCSEs or level 1 qualifications. We cannot have a fire service being fined for a failure in its qualification awards. We cannot jeopardise the future of the fire cover service in Wakefield because there may have been catastrophic errors on behalf of the awarding body. I am also keen to ensure that this new power does not stifle innovation or lead to conservative—with a small “c”—organisations or encourage bodies to be risk-averse. On that note, I would like the Minister to respond and I stress that it is a probing amendment.
Sarah McCarthy-Fry: I shall first address amendment 8, which seems a long time ago, as we have moved on. I hope be able to reassure the hon. Gentleman. His amendment is intended to allow Ofqual to direct an awarding body in relation to the setting of standards if that body is failing, or likely to fail, to comply with a condition and that failure would be prejudicial. However, clause 144(2) already gives Ofqual the power to direct a recognised body in the way that the amendment intends because it states:
“Ofqual may direct the recognised body to take or refrain from taking specified steps with a view to securing compliance with the condition.”
That includes the power to direct a recognised body to set the standards in a specified qualification on a specified occasion at a specified level in order to secure compliance with a condition. The amendment seeks to address concerns that we have considered. We agree with them and have dealt with them in the Bill.
Some concern has been expressed, in particular by Dr. Mike Cresswell, director general of the AQA, whose comments were mentioned by the hon. Member for Yeovil, that the powers of Ofqual will not allow it to maintain standards. I shall put on record once again the Government’s absolute intention that Ofqual will have the powers it needs and our confidence that the Bill will give it those powers. For example, Ofqual could set a condition requiring those awarding bodies offering GCSEs and A-levels to work together to ensure consistency of standards, to notify Ofqual by a specified date where there are problems with agreeing the standard and to accept Ofqual’s judgment about that standard in that event.
There can be no doubt that Ofqual has the powers to set such a condition, not least because its first objective is the qualification standards objective. It has the power to direct if those conditions are not met. Parliament will hold Ofqual to account in relation to its effectiveness in securing that recognised bodies comply with conditions of recognition and directions given to it under this section. As the Bill stands, Ofqual will have robust powers to direct recognised bodies where necessary, including on standards. I hope that I have satisfied the hon. Gentleman on that account.
With regard to amendment 559, I am well aware of the request made to us by Ofqual. It has made it clear on numerous occasions that it wants the power to fine—we had this in evidence from earlier sittings and in conversations with, and correspondence from, the chair of Ofqual. I understand why it needs to have this. I have listened carefully to both the hon. Member for Yeovil and my hon. Friend the Member for Wakefield and I undertake to the Committee to reflect on that. I ask my hon. Friend to withdraw the amendment on that basis because, as she acknowledged herself, it is not perfect and there is more work to do, not least the talks that we will have to have with the awarding bodies and with Ofqual, with whom we will discuss how it thinks it might, and how we think that it should, use that power.
The hon. Member for Yeovil asked about the fining powers of other regulators. I do not have examples to hand but I think all of them have used their fining powers at some point. We will certainly take that into account when we consider it further.
Mr. Laws: I am grateful to the Minister for her undertaking to reflect on the matter and to include a discussion on the awarding bodies. It is right that if such a measure is to be introduced, they should have a chance to respond. The Minister is clearly minded to look at this seriously, but obviously she still has some reservations. However, will she put on the record today the concerns and reservations that the Government have about granting the power? They are still considering it and did not put it in the original Bill.
Mr. Laws: I am grateful to the Minister. She gave a very clear exposition of the position on amendment 8 and a clear reassurance that the Bill already has those powers. She also gave a helpful response to amendment 559. I hope that the Government will now go and talk to the awarding bodies and bring back some sensible proposals. We should all accept that it is very difficult to expect enthusiasm from any body or organisation that is being invited to discuss whether it should be fined. If any rational organisation were asked whether it wished to be fined or have a body given powers to fine it, it would be likely to say no. It is important that the awarding bodies are consulted, but ultimately the Government must decide and pay due heed to Ofqual’s concerns that it needs to be an effective regulator.
Mary Creagh: I am grateful to the Minister for her response. It is no surprise to me that the awarding bodies were not in favour of the measure, but I think that there is a case to be made for the new power. We have discussed separating the qualification awarding activity, which gives protection to charitable and commercial organisations. But I am reassured and I look forward to debating this further on Report.
Mr. Laws: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 144 ordered to stand part of the Bill.

Clause 145

Power to withdraw recognition
Amendments made: 482, in clause 145, page 81, line 38, at end insert ‘awarded or authenticated by the body’.
This amendment is intended to ensure that clause 145(2) (which relates to withdrawal of recognition) applies fully to the situation where the body is recognised to award or authenticate credits in respect of components of qualifications.
Amendment 483, in clause 145, page 82, line 17, leave out ‘a person’ and insert ‘—
(i) an individual’.
This amendment and amendment 484 clarify that review arrangements made under clause 145 may provide for decisions on a review to be made either by an individual who is not a member of Ofqual or its staff or by a body none of whose members is such a person.
Amendment 484, in clause 145, page 82, line 18, at end insert ‘, or
(ii) a body none of whose members is a member of Ofqual or Ofqual’s staff.’.—(Sarah McCarthy-Fry.)
See Member’s explanatory statement for amendment 483.
Clause 145, as amended, ordered to stand part of the Bill.

Clause 146

Qualifications regulatory framework
Amendments made: 485, in clause 146, page 82, line 24, leave out ‘regulated qualifications’ and insert ‘qualifications in respect of which they are recognised’.
This technical drafting amendment is one of the changes described in the Member’s explanatory statement for amendment 431. The amendment clarifies that the qualifications to which Ofqual’s guidance refers are those that a recognised body awards or authenticates.
Amendment 300, in clause 146, page 82, line 38, leave out ‘from time to time’.—(Sarah McCarthy-Fry.)
See Member’s explanatory statement for amendment 290.
Question proposed, That the clause, as amended, stand part of the Bill.
The Chairman: With this it will be convenient to take the following: Government new clause 24—Duty not to impose or maintain unnecessary burdens.
New clause 22—Achievement and attainment tables——
‘Ofqual shall set and publish the criteria and indicators, including those for the allocation of credit ratings, which shall be used for the allocation of qualifications contained within achievement and attainment tables published by the Secretary of State.’.
Sarah McCarthy-Fry: New clause 24 will impose a duty on Ofqual not to impose or maintain unnecessary regulatory burdens. The clause is similar in effect to section 72 of the Regulatory Enforcement and Sanctions Act 2008, which imposes almost identical duties on a range of regulators such as the Office of Rail Regulation and the Postal Services Commission.
That sits alongside the other provisions in the Bill that require Ofqual to perform its functions efficiently and effectively and to review its committee structures at least every five years. Ofqual will also need to observe the Government’s five key principles of good regulation: that any regulatory activity should be transparent, accountable, proportionate, consistent and targeted only at cases when action is needed.
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Turning to the different subject matter of new clause 22, I am sympathetic to the thinking behind it. It will be entirely appropriate for Ofqual to have a role in looking at how qualifications are scored for the purposes of the Government’s achievement and attainment tables. That will help to develop confidence in the objectivity of the scoring judgments. It will be related to its duties under clauses 139 and 140 in relation to the assignment of guided learning hours to qualifications for the purposes of determining whether qualifications are sufficient to meet the duty to participate in education and training under the Education and Skills Act 2008. However, we should not put the provisions in legislation and there is no need to do so because achievement and attainment tables are not statutory, and it would be inappropriate to make them so. I am sure that the Committee will be aware that we are reviewing them in the light of our proposals to develop a school report card. Our consultation on that proposal finished recently and we are reviewing the responses. In the light of those responses, we will discuss with interim Ofqual what the role of Ofqual and, if appropriate, that of QCDA, should be in the new arrangements that we are making for providing information about school performance. We do not need to put such provisions in the Bill because, as it stands, it will allow Ofqual to undertake the activity if requested to do so by the Secretary of State. On that basis, I hope that the hon. Gentleman will withdraw it.
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