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Lord Tope: My Lords, I did not follow that explanation at all. I do not understand how a requirement to consult, which the noble Lord said would be the norm anyway and certainly should be the norm under good practice, "imposes constraints", to use his words. The Bill still gives the council the power to impose conditions. All I am suggesting is that before imposing the conditions it should discuss them with the provider. That is not in the least consistent with imposing constraints.

I understand the need to tailor arrangements, the need for flexibility and so forth. Again, discussing conditions with providers before they are imposed does not seem to inhibit that in any way; on the contrary, it is a co-operative approach which I thought this Government endorsed. It involves discussing with providers whether or not conditions are right and appropriate. If agreement is reached, so much the better; the situation will work well. If at the end of the day agreement cannot be reached, the council still has the power to impose such conditions as it wishes. It will be under no constraints that prevent it from doing so. I do not accept the explanation. I do not understand it. It is entirely unreasonable. But I beg leave to withdraw the amendment.

13 Mar 2000 : Column 1352

Amendment, by leave, withdrawn.

Baroness Blatch moved Amendment No. 41:

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

("(a) require the Council to be allowed access to relevant accounts and documents and to be given rights in relation to computers, associated apparatus and materials which have been used in association with Council-funded provision;").

The noble Baroness said: My Lords, when we last spoke on this matter the noble Lord, Lord Bach, accused both myself and the noble Lord, Lord Tope, of becoming somewhat overwrought on the issue.

Lord Tope: My Lords, overexcited.

Baroness Blatch: My Lords, overwrought or overexcited; I do not recall which. However, I plead guilty. I am concerned about this issue, mostly because in Committee the noble Lord, Lord Bach, said,

    "We argue 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".--[Official Report, 8/2/00; col. 634.]

I refer to "relevant providers"; the Bill does not. The Bill simply says, in imposing conditions, that,

    "The conditions may ... require the Council or a person designated by it to be allowed access to a person's accounts and documents and to be given rights in relation to a person's computers and associated apparatus and material".

It is for that reason that I press my amendment. I want to remove the council's right to have access to,

    "a person's accounts and documents",

and substitute for it rights to access documents and technology used in association with councils so that there is a relevance in relation to both the equipment being inspected and audited, and the specific person. We knew that there would always be a relevance to the institution, but the idea, for example, that if I were a lecturer in an FE college, someone could come to my home and inspect something which had no relevance whatever to the fact that all that I was doing in relation to the course was housed and located in the college and/or college-related buildings, is unacceptable.

I am concerned about the fact that the provision is not qualified in relation to relevance. It is because of the words the noble Lord himself used and his misunderstanding of what my amendment related to that I wish to press Amendment No. 41. I beg to move.

Lord Tope: My Lords, I shall try to avoid becoming overwrought again. I share the concerns expressed by the noble Baroness. As drafted, the provisions of Clause 2(a) are wide-ranging and far-reaching and I am not happy with them. Nor am I sure that the noble Baroness's amendment has it quite right. I am wholly with her in what she is seeking to achieve; I am not certain that the amendment achieves it.

I realise that I cannot now introduce an amendment, but I would be a little reassured if we took the last words from subsection (b) and included them within subsection (a); that is,

    "for the purpose of carrying out its functions".

13 Mar 2000 : Column 1353

That may provide some reassurance. I drop that into the debate now though it is possible that we shall come back to this at another stage. As I say, I cannot support the provision as it stands in the Bill; nor am I convinced that the noble Baroness's noble attempt to make it better--and it does make it better--is the right substitute. I hope we can consider this problem a bit further.

Lord Bach: My Lords, Amendment No. 41 involves two points. First, the noble Baroness is seeking to restrict the rights of access the learning and skills council would enjoy in connection with ensuring the proper use of public funds. We appreciate the points she makes. She expressed concerns, as she did in Committee, among other things that the clause, as drafted, might extend to the home premises of, for example, a tutor at an FE college. I should like to reassure her that her anxiety is unfounded.

Clause 6 is underpinned by subsection (1), which secures that the conditions the council may set attach to its provision of financial resources. Under Clause 6(2)(a), the LSC will be able to ensure it could have access to the accounts and premises of those bodies it funds. But it will have a funding relationship with the governing bodies of FE colleges, not with the teaching or other staff that the governing body chooses to employ. Clause 6(2)(a) simply allows the LSC to have access to information and materials held by the bodies it funds--access it will need if it is to secure the proper use of those public funds.

The noble Baroness also expressed anxiety that the power would allow access to documents and other information that are quite unrelated to the education and training provision funded by the LSC. That concern is quite unfounded. The LSC is a statutory body and can only exercise the powers granted to it by Parliament as a result of this Bill. It may not act outside its power; that is ultra vires. Hence it may not examine materials that are unrelated to its functions. That goes without saying and applies to all statutory corporations like the LSC, and makes the amendment fundamentally unnecessary.

However, I remind the noble Baroness that we will later be debating government amendments to ensure that the Secretary of State can intervene if the LSC acts unreasonably. That will apply to this provision as it does to other LSC powers. It would be open to any LSC-funded provider to approach the Secretary of State if it considered that access rights were being misused. That is an important safeguard. Moreover, if the LSC acted ultra vires, that would also be grounds for an approach to the Secretary of State or the courts. That is yet a further safeguard.

Our second point is that we believe the amendment would have a serious impact which the noble Baroness may not intend. The LSC should of course exercise its ability to delegate access rights prudently and carefully. But the amendment would remove entirely the LSC's ability to involve third parties to act as its agents in this respect. In most circumstances, the LSC

13 Mar 2000 : Column 1354

would be the body to use access rights to those it funds. Unfortunately, however, it is the case that, when things go seriously wrong, specialist resources and expertise are sometimes required and those may not be readily available within the council.

Although I cannot go into details of specific cases because of the risk of endangering current investigations, an example might be the specialist resources which the department has for investigating cases of suspected fraud. Those may be, and have been, purchased as needed by a body such as the FEFC, and in future the LSC. On occasion it is necessary to purchase specialist audit resources. A restriction such as this would have a real effect and might prevent current investigations from reaching a conclusion.

Obviously, the noble Baroness would not wish to hinder or prevent action that could lead to the recovery of misused public funds or the prosecution of those who have misused them. The £6 billion of public funds for which the chief executive must account to Parliament personally is a very large sum of money. The LSC must be able to investigate a case properly. On occasions it may need to deploy resources that are not available in-house. This is not a theoretical matter that we are discussing, nor is it simply a debating point. These are matters of actual practice and, of course, of genuine public concern.

To summarise, the provision that the noble Baroness seeks to amend in Clause 6 is well precedented and entirely standard. I wrote to the noble Baroness on 28th February to give details of the current use of comparable powers by the further and the higher education funding councils, the TECs and the access rights enjoyed by the National Audit Office, not to mention the European Commission and the European Court of Auditors. I assure the noble Baroness that there is nothing unusual here. I hope that this explanation may reassure her to some extent.

7.30 p.m.

Baroness Blatch: My Lords, I repeat again that I have no wish to see people acting fraudulently or abusing or misusing resources provided by the taxpayer. Therefore, it is precisely for that reason that I want any inquiry to be focused where I believe the suspicion lies.

The noble Lord said that my amendment would deny the council the possibility of using a third body. All the way through this Bill, and all the way through most statutes, there are references to the Secretary of State using a power to do this, that or the other. In almost all cases we know that it is not the Secretary of State who, in person, will do it. It will be someone appointed by him, someone who will do it in his name. It will, in effect, be a third person.

The same applies to the council. Dotted throughout the Bill are references to the council being given powers to secure facilities, to provide this, that and the other. Again, it will not necessarily be the council that secures that provision. It will be someone delegated by the council. In some cases it will be someone at third and fourth remove from the council. If it was the wish

13 Mar 2000 : Column 1355

of the council to call in the police, there is nothing in my amendment to prevent it doing that. If the council wished to bring in the auditors, there is nothing to prevent it doing that. I am not so sure that I accept that defensive argument from the Minister.

The Minister is absolutely right to say that the council will only be able to exercise powers given to it by Parliament. My amendment is precisely about that. In Clause 6 power is being given to,

    "require the Council or a person designated by it to be allowed access"--

with no word or aspect of relevance about it at all--

    "to a person's accounts and documents and to be given rights in relation to a person's computers and associated apparatus and material".

One would expect, in practice, for there to be access to the college, college facilities, college-related premises and facilities that may be housed in them. But there needs to be some protection of the individual against the council or its appointee going to the personal belongings of a tutor. That is what is stated in Clause 6(2)(a).

I am decidedly unhappy with the provision. I am decidedly unhappy with the Minister's response to me. If I have the wording wrong, then I believe it is incumbent upon the Government to do something about the wording of Clause 6(2)(a). Perhaps they should even pick up the suggestion made by the noble Lord, Lord Tope, who linked it with Clause 6(2)(b). One way or another, this is wrong. For that reason I wish to press my amendment, in the hope that the noble Lord will either come back with something or accept my amendment, and then leave it to counsel to put it right.

7.34 p.m.

On Question, Whether the said amendment (No. 41) shall be agreed to?

Their Lordships divided: Contents, 41; Not-Contents, 100.

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