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Baroness Blatch moved Amendment No. 57:

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 58. The amendment seeks to delete from Clause 15(4)(a) the words,

    "in conformity with directions of the Secretary of State or with conditions imposed under section 27".

Again, we return to the constant theme of everything emanating from the Secretary of State. Indeed, this is a very seriously top-down, bureaucratic set-up. It seems to me that this is yet another part of the Bill where it would make sense to change the position to provide a more local focus. Therefore, I believe that the provision should reflect the education and training needs of each local skills area if it is to be a meaningful plan; in other words, in relation to local areas, it should not conform with directions from some stratospheric central government office. That is an important consideration.

Amendment No. 58 deals with where the information should go. It provides for the council to send a copy of the financial plan to the Secretary of State and to each local authority. I am mindful of what the Minister said when responding to my Amendment No. 54. She agreed that the local education authority is important, but asked what would happen about all the others if we put it on the face of the Bill.

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The Government see fit constantly to refer to the Secretary of State on the face of the Bill. They also see fit to refer to the RDAs on the face of the Bill. However, given that local education authorities are losing so many powers to the LSCs--yet they will still organise the provision and be responsible sometimes for standards within the institutions offering the provision--they seem to be completely sidelined. Under the terms of the Local Government Bill, new obligations are being placed on local authorities with regard to the economic well-being of their areas. It seems to me quite incredible that in the Bill we are discussing tonight local authorities are not properly recognised. I suspect that yet again the Government will find some reason not to allow local authorities to receive a copy of the plan that I am discussing. I believe that as regards,

    "the Council's financial proposals for the year, and in particular proposals as to how it plans to keep to its budget for the year",

in the words of my Amendment No. 58,

    "The Council must send a copy of the financial plan to the Secretary of State and to each local authority".

I beg to move.

10 p.m.

Baroness Blackstone: My Lords, Amendment No. 57 seeks to remove the requirement for the national LSC's annual plan to set out how it will achieve objectives set by the Secretary of State.

The LSC will spend £6 billion of public money and it is only right that in formulating its annual operational plan it should set out how it plans to achieve the Secretary of State's objectives for this expenditure. The plans of local LSCs as provided for in Clause 22 will set out how they propose to discharge their responsibilities in the light of the education and training needs for their area. There is no need to replicate these plans in the national plan.

As regards Amendment No. 58, I am only too happy to reiterate what I said in Committee: the LSC will publish its annual operational plan for anyone who wants to read it by making it available on the Internet. It is an unnecessary provision to specify that hard copies have to be sent to each and every local authority in England. I hope that the noble Baroness will not feel the need to press the amendments.

Baroness Blatch: My Lords, the Government cannot have it both ways. They cannot say that this is very much a locally focused arrangement providing locally effective services to meet the needs of local areas because, as I said, everything emanates from the Secretary of State. The noble Baroness has just said that if the Government are providing this large sum of money, everyone must do what the Secretary of State dictates. I understood that there was to be a considerable amount of local autonomy in this matter. However, I was clearly wrong in that and my suspicions were clearly right. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 58 not moved.]

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Clause 18 [Supplementary functions]:

Baroness Blatch moved Amendment No. 59:

    Leave out Clause 18.

The noble Baroness said: My Lords, the noble Lord, Lord Bach, sent a helpful letter and a fairly detailed explanatory note on Clause 18, which I welcome. However, as so often happens, such detail begs even more questions. The noble Lord stated that the national learning and skills council, and in particular the local learning and skills councils,

    "are to play a more important role in local partnership working than the current funding councils".

That is interesting. Will that role be more important than those of the TECs, of local education authorities, or of local authorities?

In the detailed explanatory note that I was sent, as regards the sentence that the council may,

    "acquire and dispose of land and other property",

it would be helpful to know what constraints exist in that respect. Is it a totally open-ended permissive power to acquire and dispose of land and other property? What accountability would exist in that respect?

Paragraph (2)(b) of the note is headed "enter into contracts". In this paragraph the noble Lord says,

    "FEFC contracts worth over £20,000 are normally listed in their annual report. As private companies TECs have entered into a variety of contracts with training providers, and others such as local authorities, and local partnerships involved in promoting training and employment".

I understand the need to enter into contracts, but what public accountability will be available? Indeed, who is liable? Where does the responsibility lie?

The next paragraph is headed,

    "invest sums not immediately needed for the purpose of exercising its other functions".

Interestingly, it says:

    "Public funds paid to the LSC will normally rest in a Paymaster General account until disbursed to providers. It may be necessary for some funds to be held in other bank accounts so as to be readily available for day-to-day purposes, e.g. petty cash. Such accounts may be interest bearing".

Who decides the funds that are to be deposited with the Paymaster General and the funds that are to be held? What control will there be over the amount to be held? The example given is petty cash, but what other examples are there? As I said, what rules will govern that?

The note goes on to say:

    "As private companies, TECs are able to invest any funds".

Invest any funds in what? Stocks and shares? I shall ask a question about that issue later. It goes on:

    "If the LSC receives funds from sources other than Grant in Aid it must be allowed to use these to the best effect, subject of course to standard financial control provisions applying to NDPBs, so as to maximise the resources available to secure delivery of its objectives".

Again, how will it know when such moneys are available for investment and what kind of investments will be available?

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Paragraph (d) refers to financial "gifts". What kind of gifts? Again, where gifts are received, what accountability will there be for the acceptance of them? There is a reference in paragraph (e) to "gifts of land and other property", where the same points apply.

But the council has no power to borrow money. Interestingly, the TECs had power to borrow money. So what makes the councils different from the TECs in this regard? The TECs had a great deal of flexibility. Are the Government to argue that the TECs abused or misused their powers? I do not believe that that will be the case. But it would be helpful to know why the TECs, with their great flexibility, are being swept away, and why the LSC will not be given that flexibility. What will be the restrictions on the council? Can the Minister say how the TECs operated under these powers and whether there were any problems?

The council does not have power to lend money unless, of course, the Secretary of State consents. The note states:

    "TECs have the power to make loans in furtherance of their objectives".

Sometimes that is quite important.

    "In the past loans have been made to training providers who have been experiencing short-term cash flow problems and to local partnerships or community groups where, for example, funding will be available from the European Social Fund but not until after set-up costs have been incurred".

What will happen to those people in the future? TECs will not be around; they will not be able to do that. If the power is not to be transferred to the councils, what will happen to training providers experiencing short-term cash flow problems? Will they have to go through a bureaucratic procedure to the Secretary of State?

Paragraph (3)(c) states that the council will have no power to hold shares in a company or to become a member of a company. The note continues:

    "Unlike the FEFC which had no such express power, TECs with their standing as private companies were able to set up subsidiary and associated companies. However, contractual conditions operate to ensure that public funds are not put at risk as a consequence of the organisation incurring liabilities in respect of any other company. Many training and enterprise councils have significant holdings in, for example, Careers Service Companies which may be jointly owned by the TEC and the local authority. TECs may also be stake holders in companies set up to deliver other government measures such as the New Deal. Where the LSC can demonstrate benefits arising from participation in another company the Secretary of State will not ... withhold his consent".

Again, the TECs did not have to go through this bureaucratic system. However, it looks as though the local skills councils will, making it a much clumsier arrangement. One wonders why a framework cannot be laid down within which the local skills councils can operate just as the TECs did. There are constraints; there is a great deal of bureaucracy; and there will be a built-in institutional delay. Regrettably, the powers of the TECs are not being replicated. I wonder why. I beg to move.

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