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Baroness Sharp of Guildford: I speak to Amendment No. 79, which is also in this grouping. We thank the Minister for her explanation and for the clarification involved, but we are still not completely convinced by what she said. Clause 11(2) at present gives unconstrained powers to allow the learning and skills council to appoint up to two governors to any or all colleges within the further education sector. That seems an unreasonable interference with the autonomy of individual colleges and is inconsistent with the Government's declared policy of intervention only in inverse proportion to success.

The Secretary of State will have powers to intervene under the amended Section 57 of the Further and Higher Education Act 1992, including the power to dismiss existing governors or to appoint new governors on his initiative. No explanation has been given as to why it is necessary for the learning and skills council to have parallel powers to those of the Secretary of State. The amendment would restrict the powers of appointment to those situations in which the Secretary of State has the power to act; in other words, where colleges are having serious

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problems of mismanagement; where there is a failure to discharge a statutory duty; where the governors are acting unreasonably; or where there are serious weaknesses. In that sense, our amendment is totally reasonable.

Baroness Blatch: I rise to support the noble Baroness, Lady Sharp. She has gone further than I have in trying to at least bring forward some rationale for the use of the power whilst at the same time querying the power. All that we know is that there is a power to appoint additional members to a governing body; the conditions under which the power would be used are not spelt out in any way. As the noble Baroness, Lady Sharp, said, there are other powers in statutes. I do not see the repeal of those powers anywhere in this Bill.

No trigger mechanism is set out. We do not know what would trigger the concern; on what basis that would happen; what would be the process; or what consultation would take place with the governing body. It is an open-ended power that allows the council to add, either objectively or subjectively, additional governors to the governing body.

I know of the powers in the previous Act and I know the reason for them. There are real examples--the Minister has already referred to one or two of them--where FE colleges have quite clearly needed some external influence in bringing sanity to bear on their management arrangements. At the same time, the way in which Clause 11 is set out is really not acceptable. I support the noble Baroness, Lady Sharp, and shall accept the government amendments so far as they go, but when I first read the Bill, the idea that the council could simply fill vacancies was entirely unacceptable.

Baroness Blackstone: There really is some misunderstanding here. I have tried to explain that there have been a number of highly regrettable cases where the governing bodies of large FE colleges have failed to ensure that the quality of provision, standards and probity in relation to financial activities that we all require from an FE college have been pursued properly. Where it looks as if things are going wrong, it is entirely right that the LSC, which is to be the frontline body in close contact with providers, should be able to intervene early and provide for additional governors to help remedy the situation.

There can be no question of the LSC filling normal vacancies. That is not what the provision is about. It is a last resort measure when a governing body of an FE college is failing in its duty. It would be completely wrong for noble Lords opposite to oppose amendments which are entirely designed to try to make sure that we have an adequate system on which we can rely and can intervene to prevent the kind of failures that have been happening, I am afraid, with some regularity under the existing system. In the light of what I have said, I greatly hope that the noble Baroness, Lady Sharp, will not press her amendment.

Baroness Sharp of Guildford: I thank the Minister for her response. The powers are seen to be somewhat

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draconian in relation to what is proposed. I shall not move the amendment, but I shall read in Hansard what the Minister has said and I shall look more carefully at the government amendments. We may want to return to the matter at Report stage.

On Question, amendment agreed to.

Baroness Blackstone moved Amendments No. 78:

    Page 6, line 9, leave out subsection (1).

    Page 6, line 13, leave out ("fill the vacancy") and insert ("be a member of the governing body of an institution which--

(a) falls within the further education sector (within the meaning given by section 91(3) of the Further and Higher Education Act 1992), and
(b) mainly serves the population of England").

On Question, amendment agreed to.

[Amendment No. 79 not moved.]

On Question, Whether Clause 11, as amended, shall stand part of the Bill?

Baroness Blatch: My name is on the Marshalled List as opposing the clause. I did not make myself clear enough to the Minister when I responded to the amendment of the noble Baroness, Lady Sharp. I referred to the way in which I read the Bill when it was first drafted. The Minister has tonight amended the Bill. It provided at the outset that the council would have the power to fill vacancies. I said that I was somewhat relieved that it was not the case that the body would be given the power to fill vacancies.

In speaking to the amendment of the noble Baroness, Lady Sharp, I said that I wholly accept the need to do something externally by way of putting in extra governors--that is one mechanism which has worked. It has certainly worked in some grant-maintained schools in the past and it seemed a proper way to go about it. But this clause does not say that. It does not specify the conditions under which that power will be exercised. It gives no indication of what would be the trigger for such a power to be exercised.

It is extremely important that if there is to be a clause in the Bill giving power to the council to add additional governors, it must, either in subsections, a schedule, or by means of regulation, set out the rationale for the power. In other words, if the power applies where the behaviour or lack of control of a governing body is such that a further education college is not being managed well by its governing body, it is entirely legitimate. But something along those lines should be on the face of the Bill and not simply an open-ended invitation to the council and power to add additional members. That is why I oppose the clause and why I believe it should be amended and brought back.

11.45 p.m.

Baroness Blackstone: I am grateful to the noble Baroness for explaining what she meant with regard to the amendment of the noble Baroness, Lady Sharp of Guildford. I apologise if I slightly misconstrued what she had to say.

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This is an important clause. The Government and the National Assembly for Wales announced, following the Public Accounts Committee hearings on Halton College and Gwent Tertiary College respectively, that the further education funding councils would be given the power to nominate up to two governors to any college governing body as they thought necessary. That measure was introduced on 11th October 1999 in both England and Wales. We consider that the LSC and CETW should have the same capability. That is what it is about.

Perhaps it should not surprise us that the noble Baroness opposes this clause. It is after all a provision to allow early intervention in colleges to prevent failure and to deal with poor management before it has a serious effect on provision. Our inheritance on taking office was one of sleaze and mismanagement in the further education sector, allowed to flourish by a government who took a back seat whenever they could. We have made every effort to tackle these problems since taking office, but have had to face the serious and much publicised cases that I have mentioned. Unfortunately, these have been the tip of the iceberg. At far too many of our colleges we have found low standards of provision and the improper use of public funds. In dealing with the backlog of failure we have been hampered by the present statutory provisions.

The lack of control which the previous administration had over the sector and the hands-off approach that they took led directly to the problems at these colleges lasting so long and getting completely out of control. The funding councils had been hindered by inadequate powers to intervene. We need to applaud excellence, but we also have to deal swiftly with failure. No one should doubt our determination to do so.

My right honourable friend the Secretary of State's powers to intervene when a college is in difficulty are a last resort. All too often by the time mismanagement or failure is drawn to his attention it is too late to avoid some adverse effect on the quality of education or the proper use of public funds. We want the frontline body with immediate responsibility for the management of the sector to be able to intervene quickly and effectively. We consider that a power to appoint up to two governors is necessary to allow the LSC or CETW to intervene and influence governing bodies where they are aware that there are existing or potential problems. That is the point.

Perhaps I may reassure the noble Baroness. I am absolutely convinced that the LSC would not wish to use this power except in such circumstances. It is not a power that we would expect to be used frequently, nor one that should be used lightly. But its availability may prevent a problem becoming deep-rooted, leading to more widespread failure that could have a serious impact on students. Unfortunately, I am only too aware how the education of large numbers of students has been blighted. I have seen the representatives from staff and students who, through no fault of their own, have been the victims of serious mismanagement.

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However, the nomination of members, as under present arrangements, will not be enough to allow rapid intervention, because appointments need to be made by the governing body and this could be delayed for several months until its next meeting. The power to nominate members already exists, but the power to appoint rests with the governing body. We simply want the LSC and CETW to be able to intervene immediately and not be delayed by the requirement that a governing body, which is in difficulty, meets to make the appointments. Every delay can make the problem worse, and in a case of possible mismanagement the governing body may even attempt to avoid the appointments for as long as six months. That is clearly unacceptable. That is why we have chosen to give the councils the power of appointment in this clause. But I should make clear that, fundamentally, this is a technical change: if we did nothing in the Bill, the LSC would have a power to nominate additional governors in the same way as the funding councils do now. The point of this provision is to make the exercise of the power more effective.

I hope that I have been able to allay the noble Baroness's concerns by my remarks both now and in response to earlier amendments to the clause. I hope that she will accept that there is advantage in intervening earlier, and that this is a power to be used only rarely and after great consideration. It is not a novel power. As the noble Baroness has said, the previous government took similar powers in respect of grant-maintained schools and used them, rightly. I realise that these powers were for the Secretary of State. However, we firmly believe that it will be more effective if the power is exercised by the body responsible for the funding and supervision of the sector. I hope that the noble Baroness will see the strength of our argument in favour of such powers and will feel able to withdraw her objection.

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