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Lord Ewing of Kirkford: In the light of the Minister's comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 38 and 39 not moved.]

Clause 32 agreed to.

Lord Ewing of Kirkford moved Amendment No. 40:

After Clause 32, insert the following new clause--

Further Education Bursaries

(". In section 12 (Boards of Management) of the Further and Higher Education (Scotland) Act 1992 after subsection (2) there shall be inserted the following subsection--
"(2A) Subsection (2) above does not confer power to grant and make payments in pursuance of bursaries, scholarships or other allowances to persons over school age for which provision can be made under section 49(1) of the Education (Scotland) Act 1980.").

The noble Lord said: This new clause deals with the whole question of higher education bursaries and is indeed a very important issue, particularly for local authorities in Scotland. I hope the Minister will explain to us what actually happened when the Secretary of State took his decision to transfer from the local authorities to the higher education authorities and the colleges the right to allocate grants and bursaries for higher education. That decision was taken without consultation with the Convention of Scottish Local Authorities, and it was taken only a week after the Secretary of State gave an absolute assurance to the National Union of Students that the allocation of grants and bursaries would be left with the local authorities. There has been no explanation of why the Secretary of State, first, did not consult with the Convention of Scottish Local Authorities, and, secondly, why he

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changed his mind within seven days of giving the assurance to the National Union of Students that this function would be left with the new unitary authorities. So the purpose of the new Clause is to enable the return to the local authorities of this function, which has been taken away from them without, as I say, any consultation by the Secretary of State. It is, indeed, a very important function, and the funding of that function will obviously be taken away from the local authorities as well and given to the colleges of higher education. In these brief comments, I hope that I have given the Minister a platform on which to explain to us how on earth this all came about. There was no consultation with CoSLA and a guarantee to the National Union of Students was within seven days, without any notification to anyone, just overturned. I hope that I have said sufficient to allow the Minister to explain just exactly what happened behind closed doors. I beg to move.

Lord Addington: In dealing with further education, surely those authorities who know the conditions for further education in relation to jobs and practical tasks are the people best placed not only for providing the funding but also knowing where it should go. The amendment seems to be very straightforward. It deals with an area of concern. I hope the Minister will give some assurance that local authorities will still have a very close control and influence over where the funding for further education goes.

The Earl of Lindsay: As from 1st April 1996, each incorporated further education college is responsible for dealing with the applications for bursaries for students attending their college. Following a consultation exercise with regional and islands Councils, £45 million was transferred from the aggregate external finance settlement to the colleges for 1996-97. The consultation did take place.

The unitary authorities retain responsibility for further education bursaries for students not attending one of the 43 incorporated colleges. In recognition of that, £4.7 million remains in the AEF to assist authorities in meeting these residual responsibilities.

Using financial and student information provided by the local authorities, the 1996-97 bursary allocations have been issued to each college in line with their historical position. Bursary policy guidelines have been issued which are based heavily on those issued by CoSLA and hitherto operated by the local authorities on their bursary scheme. To assist colleges in their preparation, we have distributed instructions on eligibility and residency; we have issued a national policy document; a commentary on its application; guidance on an appeals and complaints procedure; a "standard" bursary application form for session 1996-97, and indeed a student guide. These measures will ensure that there is minimal disruption to the service being provided to students, and it is the students, as recipients and beneficiaries, who we see as being the priority in terms of how the arrangements are made.

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Linking bursaries to other college responsibilities will enable colleges to deliver an integrated service to students. The responsibility transfer will enable greater control to be operated, in that funding and payment cancellation decisions can be made and implemented more quickly. It will also be possible for students to know whether they have been successful in obtaining a study place and bursary award at the same time.

Given that there was consultation with the regional and islands councils on this, that the financing has been worked out fairly on information provided to us by the local authorities and students; and given that the arrangements reflect the fact that we want the students themselves to be the beneficiaries, I hope that the noble Lord feels more reassured than he did when he stood up to move the amendment.

Lord Ewing of Kirkford: I am sorry to say that I am not more reassured. I do not doubt that consultation took place with local authorities that were on their death bed. They were going out of existence. I do not doubt that, but I would like to see an account of the consultation that took place because the report that I have is that certainly no consultation took place with CoSLA. It is normal practice in local government in Scotland that consultation on issues that will affect all the local authorities, all the education authorities--in this case regional and island councils--takes place with the organisation representing the local authorities, the Convention of Scottish Local Authorities.

The Minister has not referred to the fact that there was a joint bursaries working group between the Scottish Office and CoSLA in which new regulations had already been prepared in order that the new unitary authorities coming into being, as they did on 1st April this year, would administer these bursaries. I hope the Minister was not trying to present a case that the students wanted this change, because far from the students wanting this change, the record shows quite clearly that the students did not want the change, and indeed their representations to the Secretary of State were to the effect that they did not want the change. The Secretary of State gave them an assurance. The Minister has not dealt with this. He gave the National Union of Students an absolute assurance that the allocation of bursaries would be left with the local authorities.

The Secretary of State's original thinking was that he would give the function to the company that administers the student grants, but then he was approached by the colleges. It was not the Secretary of State who thought about giving the function to the colleges; it was the colleges that thought about getting the function from the local authorities. On being approached by the colleges, the Secretary of State then decided that he would transfer the function from the local authorities to the colleges. The Minister must be aware that it could not have happened at a worse time. Here we had new unitary authorities coming in, in a year in which they had been preparing their administration, and part of that administration was the allocation of bursaries. They were all geared up for that, but colleges are not geared up. From the reports I have the colleges are struggling to come to terms with administration of the scheme, and

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they are very fortunate indeed that, notwithstanding the fact that the function has been removed from the local authorities, the local authorities through their chief executives, chief education officers and finance departments are giving assistance to the colleges in order to administer the scheme. The whole thing is absolutely crazy. It was taken away from the local authorities which then, of their own volition, give assistance to the colleges to administer a scheme that has been taken away from people who are experts at administering the scheme. The local authorities are giving this assistance because they do not want the students to suffer. This is about the only point on which the Minister and I agree on this issue--it is crucial that the students should not suffer.

I should like to hear more. I simply cannot accept the not lame but certainly flimsy explanation that was given about the Secretary of State's approach to this matter, because all the evidence that I have is that it was the intention of the joint working group that was set up between the Scottish Office and CoSLA to leave this with the local authority. The new regulations were already in being and were part of the discussion that was ongoing in the joint working party, and yet suddenly the feet were cut away from it all because the Secretary of State in a blinding flash decided to accede to the request of the colleges and give this work to the colleges. We need a much more substantial explanation than we have already had. I hope that the Minister is now better prepared to give us a much more substantial explanation.

4.30 p.m.

The Earl of Lindsay: I have been prepared from the beginning to give the noble Lord a substantial explanation, but he perhaps disagrees in principle with the fact that something has been devolved from the local authorities to the colleges in the running of their own affairs. In the same way on a broader scale we are seeking in the Scottish Office to devolve down some of our current powers to local authorities. This is one of a number of measures that we are encouraging, or guiding, local authority duties further into the community or into the institutions over which they otherwise have control. There was consultation with the regional and islands councils. The Secretary of State himself on 10th November 1995 met with CoSLA representatives and outlined his intention to transfer responsibility for further education bursaries to further education colleges from 1st April 1996.

As I have explained, the unitary authorities retain responsibility for further education bursaries for students not attending one of the 43 incorporated colleges. The noble Lord quite rightly said that the students themselves are one of the most important factors in that they should not suffer. We have guided and assisted the colleges very heavily in this matter. We have used the guidelines that CoSLA itself issued in the operation of bursary schemes. We have issued other instruction and guidance in other matters to ensure that students have to suffer minimal disruption from such changes.

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At the end of the day we want the colleges and the students to benefit from a more integrated service, the greater control that colleges can have over their affairs and, indeed, the speed with which they can make decisions on various matters without having to await those decisions being made by local authorities. The consultation existed. CoSLA was informed and the maximum amount of help was given to the colleges to ensure that they took on these new duties efficiently. I hope that the noble Lord, on reflection, will feel that the picture he paints is much worse than what exists in reality.

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