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Baroness Park of Monmouth: I should like to add my strong support for the amendment, principally because I am most concerned about the anxiety which is to be found among all students and prospective students regarding the lack of clarity on what is going to happen. I refer especially to the respective responsibilities of the LEA, the Student Loans Company, and others. If loans are to be paid termly, for example, there is very great scope for problem and delay. Is the Student Loans Company now fully organised and able to respond to students? Moreover, will it be accessible and effective?

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The LEAs are local and accessible but, as I understand it, they are no longer to have the responsibility in the long run for paying grant cheques.

I am particularly concerned about the mayhem that could occur and the blow to student morale if students are unable to get through, not once a year but every term to the Student Loans Company to secure their loans. At present, in Scotland, the Student Awards Agency, which deals with payment of grants, is the subject of an inquiry because some grants which were due in October last year have still not been paid. As with the Student Loans Company, students telephone the agency and receive no answers. Telephoning costs money. The student union in Aberdeen, for example, has helped to pay for telephone calls and even helps students to fax their increasingly urgent inquiries.

Another aspect which concerns me very much is that, hitherto, students coming up could count on the maintenance grant as some money while they sorted out everything else. If they are to lose that, and unless they arrive with everything completely sorted out on the loan side, they will be in desperate straits. I therefore feel that it is extremely important that those aspects of the situation should be cleared up as soon as possible.

Lord Tope: I should like, first, to express my support for the amendment. I want very much to support what the noble Baroness, Lady David, said in moving it. Perhaps on this occasion I may do so as a leader of an LEA, although I forget what the description was of an LEA--perhaps "a beleaguered LEA". If this is to happen, the sooner that LEAs are clear about their role and responsibilities, the better. It is not surprising that students and prospective students are ringing up their LEAs to find out what is happening. The fact that LEAs are not in a position to tell them in detail simply adds to the pressure and stress of students, of parents and indeed of the staff of LEAs.

As I believe is well-known to Members of the Committee, LEAs are undergoing a considerable amount of change and innovation in one way or another at this time. A lack of early clarity adds to the stress that students feel. As soon as the Government are in a position to give clear instructions to LEAs it will be appreciated by all concerned, not least, I suspect, the Government.

Lord Walton of Detchant: In reply to the amendments raised by the noble Earl, Lord Russell, the Minister said that special arrangements would be made for students reading for a postgraduate certificate in education. It has been reported that similar concessionary arrangements will be made available to medical students in the final year of a five-year course.

Will extended concessionary arrangements be made for medical and dental students, and perhaps some architectural students, who may be studying on a six-year course?

Baroness Blackstone: To deal with the specific question by the noble Lord, Lord Walton of Detchant, yes, special arrangements will be made for fifth and subsequent years.

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My noble friend Lady David made clear that these amendments are designed to elicit a statement of our plans for the future administration of the system. I am very pleased that I am able to oblige.

The Dearing Committee argued for the establishment of a single student support agency to replace the functions currently performed by local education authorities. There are attractions in setting up such a body rather than continuing to rely on more than 160 LEAs. In most cases their performance has been perfectly adequate, although there have been exceptions and some LEAs appear to operate much more efficiently than others in this area. But there must be doubts about whether an essentially executive function needs quite so many local delivery agents.

But there are arguments the other way. LEAs have been doing the job for many years, as Members of the Committee have said, and have built up a lot of highly specialist knowledge; and the Dearing Committee was not able, in the very short time it had to examine a huge range of topics, to look at the issue in detail. Furthermore, as the committee recognised, the priority must be to implement the new arrangements, in particular those for new fairer loans. The next couple of years will be transitional ones.

We have therefore decided that during that period we shall continue to use LEAs and the Student Loans Company to deliver the new arrangements. LEAs will conduct the means test and the student eligibility checks. They will therefore have a key role to play for at least the remainder of this Parliament.

The Student Loans Company will be expected to pay loans on time--that is very important--so that students have the money they need in order to live.

We shall be setting rigorous performance standards for LEAs and a new specific grant regime will be based on those standards. We shall involve LEAs and other interested parties in devising the detail of the new arrangements. Our priority will be to ensure that students and others receive a high level of service.

Once the system has bedded down we shall review the arrangements and look, in more detail than the Dearing Committee was able to do, at the best way of administering the student support system. We shall aim to complete that review in 2000. We shall make an announcement about the terms of reference and nature of the review shortly.

Perhaps I may say this to my noble friend Lady David. As regards the other review taking place on discretionary grants, I shall put a note in the Library which sets out the membership, terms of reference, and so on. They are already publicly known, and I can certainly do that. I also confirm that it is the Government's intention to leave with LEAs the power to make awards on a discretionary basis.

I should add that no amendment will be needed to the Bill to facilitate the new arrangements. Although the power to make grants and loans will rest with the Secretary of State, he will be able to delegate certain functions to LEAs and the SLC under Clause 16(7). The

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first of these amendments is not therefore necessary: regulations will in any event prescribe administrative arrangements insofar as it is necessary to regulate in this area.

The noble Baroness, Lady Blatch, raised the issue of means testing for EU students. It has been decided that it would make more sense if, from the beginning, there was a small central unit in the Department for Education and Employment taking on that work rather than that 160 LEAs should undertake it separately. I confirm that the intention is to do that in 1998-99 rather than in the subsequent year. I do not think that civil servants in the department will need to travel around Europe in order to do that work. I believe that through other means they will be able to acquire information about the tax regimes of European Union countries.

The clause as it currently stands would also enable the Secretary of State to make regulations under which he could pay grants to students in exceptional circumstances, such as exceptional financial hardship. It would be difficult, however, if not impossible, to make regulations that specifically addressed the potential needs of every student facing financial difficulties. I have listened carefully to representations by local education authorities that they should continue to have a discretion to offer financial support to students in exceptional circumstances. As I have already said, I agree that such discretion is needed. The primary legislation already exists to permit my right honourable friend the Secretary of State to make regulations allowing authorities this discretion. The Education Act 1996, Section 518, provides for the Secretary of State to make regulations which empower local education authorities to grant allowances in cases of hardship. In view of this existing power, the second of these amendments is also unnecessary.

I hope that the information I have provided is what is sought by my noble friends and that they will therefore be able to withdraw the amendments. I am very confident that the local education authorities will be able to rise to the challenge--a number of Members of the Committee have referred to it--and I know that the LEAs are anxious to do so.

Lord Peston: Leaving aside the European Union question, the Minister said that LEAs will be dealing with the issue until the year 2000. Did I understand the noble Baroness to say that what will happen after the year 2000 is still open? I believe that that is what she said. Is there not a slight problem? If LEAs are to handle the matter--as the Minister said, it is not an easy matter--they will have to invest in systems. If they are no longer to deal with it after two years, there will be less of an incentive to invest in those systems.

Can we be assured that the LEAs will be given good notice? I appreciate that the department has problems. I do not change my views on tuition fees, which is another matter. But, given the other pressures on them, can we be assured that the LEAs will be given as much notice as they will require? Will they be asked suddenly,

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"Can you keep going?"; or will they be told, "We don't need you any more"? The answer has been left out of the reply.

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