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Lord Bach: The learning and skills council will pass considerable sums of taxpayers' money--some £6 billion a year--to a wide range of providers of education and training. The Government believe it is essential that the council should be able to establish whether these funds have been used properly and in accordance with the conditions on which they have been given. If public funds have not been used properly the council will be able to take steps to recover them. Amendment No. 67 would restrict the exercise of the council's right of access to its statutory functions. The council is to be a statutory corporation created by Parliament and it may exercise only those powers granted to it by Parliament. This is a well-established principle of law. I have no problem with the concern that lies behind the amendment. For example, if the LSC funds workplace training at a major company--for example a car-maker or supermarket--clearly it is wrong for it to rummage through documents that deal with entirely unrelated and perhaps confidential manufacturing or retailing processes. But the amendment is unnecessary because this kind of behaviour would clearly not be permitted under the Bill.

The Government believe that the remaining amendments will add considerably to bureaucracy and, although genuine, are misconceived. Under Clause 25 the Secretary of State may attach conditions to the grants that he makes to the council. Those conditions will in turn apply when financial resources are passed on to providers. It would be bizarre to require the Secretary of State to make statutory instruments to approve LSC conditions of funding which he had made in the first place. These amendments would require every change in a condition to come back to the Secretary of State, who would have to make a new order to amend previous orders, and so on and so forth. That is a waste of everybody's time, not least that of Parliament and this

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Chamber, and is hardly consistent with the concerns that noble Lords have expressed about excessive bureaucracy.

But, more generally, these arrangements impose constraints upon the ability of the LSC to exercise flexible judgments about the financial agreements that it needs to reach with providers. By comparison, currently the FEFCs have a financial relationship with a relatively homogenous group of providers, principally further education colleges and some institutions in the higher education sector. The LSC, through its local bodies, will have direct financial relationships with several thousand providers, including employers, colleges, LEAs and voluntary organisations. To work properly it must have the ability to tailor its arrangements and should be able to do this flexibly. The Government believe that it would be inappropriate to impose on those arrangements a superstructure of statutory bureaucracy. I hope that that explains to some extent the rationale behind this part of the Bill and that the noble Baroness will feel able to withdraw her amendment.

Baroness Sharp of Guildford: I thank the Minister for his explanation, but I cannot say that I am satisfied on either count. The advice that I received from some of our lawyers in relation to the first matter was that the powers in the Bill were extremely sweeping and there was a case for curbing them.

As to the second issue, I am disturbed because Clause 6 (3) represents a major extension of current powers. I shall withdraw the amendment for the present, but we may wish to return to it at the Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.45 p.m.

Baroness Blatch moved Amendment No. 64:

    Page 4, line 15, leave out paragraph (a) and insert--

("(a) require any person receiving financial resources from the Council to provide the Council with such documents as requested by the Council as relate to their application for that financial resource;").

The noble Baroness said: Perhaps I could start by saying to the noble Baroness, Lady Sharp, that I would have supported her very warmly on all the arguments she put. The whole of Clause 6 is extremely worrying. I think the autonomy of further education colleges and training providers is going to be seriously inhibited by it. The noble Lord the Minister is always eloquent on all these occasions, but he used a phrase which may resonate rather nervously outside this Chamber. He said that he would not want people to go rummaging around people's computers and files and all the rest of it for irrelevant material. I would not want them to go rummaging around even for relevant material.

Clause 6(1) says that if the council itself provides financial resources it may impose conditions, which may include "any provisions described below". Clause 6(2)(a) refers to designated people being allowed access to a person's accounts and documents, and also to a person's computers and associated apparatus and

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material. That can only be done by gaining access to premises and there is absolutely nothing here about how that would be done, whether under licence or with some kind of permit. This simply is an unacceptable paragraph and I think that it should come out.

I have no quarrel with the principle that where a provider is grant aided or receives money from the council there should be an obligation to provide all that the council may need that is relevant to the way in which it disposes of those funds and the way it uses them, given that the council would only grant aid or allocate funds on the basis of a specific remit to achieve a particular service which would have been specified at the outset.

I have no quarrel with the idea that the provider must be accountable and that there should be an obligation to provide information to the council. Therefore, Amendment No. 64 would include any training providers receiving financial resources from the council being obliged to provide the council with such documents requested by the council as relate to their application for that financial resource. I think there is a very real issue here of autonomy and of access. Quite frankly, the method by which this information could be provided is very debatable. I believe that the wording in my amendment should be substituted for the wording in Clause 6(2)(a). I beg to move.

The Deputy Chairman of Committees: If your Lordships agree to this amendment, I shall be unable to call Amendments Nos. 65 to 67.

Lord Bach: The Government feel that circumstances covered in the noble Baroness's amendment do not exist in the real world. It would remove the provision giving the LSC access rights to any person it funds and substitute that with a bit of a mouse; that is, a requirement for potential providers to provide no more than information relating to an application for funding. The persons would include LEAs, FE colleges and private providers. The LSC will need powers of access for audit and related purposes connected with the proper use of council funds. An inability to seek assurance that funds are being used properly could severely hamper its ability to claw back funding which has been improperly used and put a large amount of taxpayers' money at risk.

We argue that the simple reality is that the effect of Amendment No. 64 would be to deny the council the ability to inspect relevant providers' records, whether written or held on computers so as to establish whether taxpayers' money had been used properly. That is rather irresponsible and not something that any government could do. On that basis, we resist the noble Baroness's amendment and hope that she will withdraw it.

Baroness Blatch: That was a disappointing answer. The Minister gave no explanation of his meaning of "access". Can the council force access? Can it break in? Can it hack any computer?

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As I pointed out when I spoke to the amendment, I have no difficulty with someone who receives public funds being accountable for the use of those funds and being obliged under the law to provide the information required for audit purposes and/or the local council's satisfaction that those funds were being used for the purpose for which they were given.

The Bill does not define the kind of person referred to. It could be the caretaker, the cleaner or anyone. The council designates "a person" and allows him access to a person's accounts. No one could see my accounts without breaking into my home. And if that person broke into my home he would not see those accounts unless he broke into my computer. And he could only break into my computer if he hacked into my password. Is that the power being given to the learning skills council? If so, it is important that the Minister explains what he means by "access".

If I were in receipt of funding from the council for a purpose laid down by the council, I am proposing an obligation under the law to provide the council with all the information it needs as evidence that I am using that money for the purposes for which it was given. If I broke that law it would be for the law enforcers to deal with and not some undefined member of the council to come to my home, the premises of a private company, or an FE college and simply force access. It is important that the noble Lord spells out precisely what the provision means in practice.

Lord Tope: I share the concern expressed by the noble Baroness--although my accounts are far less interesting than hers must be!

We share strongly the concern. I do not argue with the noble Baroness about which of our amendments is the most appropriate. What is appropriate is the concern we share. Neither of us may yet have found the right words for an amendment. But can the Minister tell us--I do not know the answer--where else in legislation similar powers are granted to funding bodies? If he cannot answer tonight, perhaps he will let us know before the next stage of the Bill. I am sure that it is a subject to which we shall wish to return. The powers granted here seem excessive and draconian. We should not lightly let them pass.

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