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Lord Bach: My Lords, in a tour de force the noble Baroness has asked the Government a stack of questions. I cannot pretend that I shall be able to answer

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all of them this evening. I thought that it was a good idea to send her a letter. I am not quite so certain now. We believe that the letter set out clearly the points that really matter. So we are rather surprised that the noble Baroness has moved this amendment to have Clause 18 removed entirely. Perhaps it is a vehicle for her questions.

As we indicated in Committee, our starting point in framing these provisions has been the supplementary powers currently available to both the FEFC and the HEFC, as set out in the 1992 Act. I gave more detail in the letter, a copy of which is available in the Library.

The clause gives the LSC the powers it needs to acquire and dispose of land and other property, for example, computers and furniture, for its own use; enter into contracts with third parties, such as training providers and local authorities; hold small cash balances as petty cash and invest sums it may receive from sources other than grant-in-aid; accept financial resources other than grant-in-aid, for example, from the European Union or in partnership arrangements with the private sector; and accept gifts of land and other property from any other sources.

The council will have no power to borrow money because it will be a non-departmental public body under Treasury control--unlike the TECs which were private companies so no such restriction on borrowing could occur. However, the council, with the Secretary of State's consent, will be able to lend money. It is obvious that it might want to lend money, for example, to local partnerships or community groups where funding will be available from the European Social Fund but not until set-up costs have been incurred. Alternatively, it might help training providers who have been experiencing short-term cash flow problems.

The council will also be able to become a member of a company, again with the Secretary of State's consent. That is an important flexibility currently enjoyed by TECs which will enable the learning and skills council to play a much more important role in local partnership working than the current funding councils.

The LSC may need to use that power to take part in local economic development or regeneration initiatives where a company structure is helpful in levering in wider resources. But we should not regard such arrangements as being widespread or the norm, nor do we want the learning and skills council engaging in widespread commercial enterprises. That is why we have made the ability of the LSC to hold shares in a company dependent upon the approval of the Secretary of State. That is an important safeguard, as I hope the House agrees.

If the noble Baroness is serious in wishing to delete Clause 18 entirely, which she is not, I should then go on to talk about the necessity of the LSC being able to buy paper clips, A4 paper, tea and coffee and all the other attributes of a modern office. The whole point behind Clause 18, and subsection (1) in particular, is to enable the LSC to do what is necessary to carry out its functions as set out in Clauses 2 to 11; namely, the securing of education and training. As I am sure the

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noble Baroness accepts, Clause 18 is a necessary part of the Bill. As to liability and responsibility, that matter lies with the accounting officer of the LSC.

The noble Baroness referred to my letter and quoted the words,

    "more important role in local partnership working than the current funding councils".

The point that the letter seeks to make is that that is more important than the FEFC.

I promise to read in tomorrow's Hansard the series of questions posed by the noble Baroness and, if necessary, to provide the noble Baroness with answers in writing.

10.15 p.m.

Baroness Blatch: My Lords, I am grateful to the noble Lord and look forward to another detailed missive. It is becoming increasingly obvious that it is a great pity that the TECs are to be dissolved. They have greater flexibility of operation than NDPBs. If the Government had any concerns about them they could have dealt with the matter by modifying or redefining their role. However, they have pressed on with all the flexibility that is now being removed from the system in order to put a straitjacket on the new councils. If business people are to become members of both the national and local councils as the Government intend, they will become frustrated, especially if they are the same people who come from the TECs. They will not have flexibility and will be constrained; and they will also have to deal with a heavy bureaucracy, resulting in delays. Those councils will be unable to keep good business people, and that is very regrettable.

If the only example that can be dragged up to provide a rationale for the volume of money to be held back is simply the need to buy tea, coffee, paper clips and one or two bits and pieces to keep the office going, that seems to be a pretty poor do, given that all other surplus money to which they do not have immediate access must be deposited. In the light of the fact that I shall receive yet another detailed explanation, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 19 [Local councils]:

Lord Tope moved Amendment No. 60:

    Page 8, line 33, at end insert ("and a co-ordinating mechanism for the local councils established in greater London").

The noble Lord said: My Lords, I rise to move Amendment No. 60 in my name and that of my noble friend Lady Sharp. We return to the issue of London and the need for some form of co-ordinating mechanism. We had a fairly full debate on this matter in Committee. The special case for London was then fully made and accepted by the Government and others. In view of the time I do not need to make the special case for London again. Suffice it to say that London is by far our largest city. For the time being it will be the only city region that has an elected mayor and assembly with

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statutory powers to produce and implement a regional economic development strategy. It will have a single small business service franchise.

London covers by far the largest travel-to-work area in the country and yet it will be the only city in the country to have more than one local learning and skills council. The nature of London is such that the boundaries of the five local councils will be primarily administrative. On the whole, natural boundaries no longer exist in a big urban sprawl.

I believe that the case for some form of co-ordinating mechanism is made out. The only reason why the Government have accepted the need for five local councils within London is that by a narrow margin that was the recommendation of the London Development Partnership, with the proviso that there should be a strong co-ordinating body. I am in some difficulty here. The more I look at the role, functions and need for a co-ordinating body the more convinced I become that all this would be unnecessary if we simply had one learning and skills council for London. That would remove Ministers' fears about unnecessary layers of bureaucracy, the need for co-ordination and so on. But, surprising as it may seem, I accept that that is not where we are now. The Government have made clear that London is to have five local learning and skills councils. I think the Government have accepted the need for a co-ordinating mechanism. The Minister has made clear--I have some sympathy with the point--that she does not want another layer of bureaucracy and administration.

The purpose of the amendment is twofold. First, I believe that some reference to the need for a co-ordinating mechanism for London should be on the face of the Bill. I say that from long experience in London politics. I was an opposition leader on a London borough council in the years running up to the abolition of the GLC. I became, coincidentally, a London borough council leader in the month that the GLC was abolished. One of my many early duties on behalf of my party was to try to establish some method of running London in the post-GLC period. I remember that only too vividly.

It may be obvious to most, if not all, of us now that there needs to be some co-ordinating mechanism in London between the five LSCs; and that that is best left to them to sort out. In a properly ordered world, I am sure that is the case. But I remember 15 or so years ago a strong prevailing view in London that no such entity was necessary; that London was a collection of villages (rather large villages perhaps); that there was no such single entity as London and therefore any such co-ordination should be kept to the absolute minimum.

I realise that it is hard for the Government to contemplate, but there may come a day when they are no longer in power. There may come a day when the view which prevailed 15 years ago will return. Indeed, the choice on 4th May of the person I suspect is likely to be elected mayor may hasten that day. I believe it necessary to have the safeguard on the face of the Bill. There needs to be a co-ordinating mechanism. In Committee, the noble Lord, Lord Harris of Haringey, moved a detailed amendment about the nature,

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membership and purpose of that co-ordinating committee. I have deliberately not done so. First, I do not think that the Government will accept it. Secondly, I am not sure that it is appropriate.

However, the second reason for moving the amendment is to press the Government a little further on what they envisage the role of the co-ordinating mechanism to be; and how and when they believe that it will come into existence. I hope that the Minister will be able to tell us something of her intentions in this respect. I am aware that the London TEC and others are working out options and proposals for a light touch co-ordinating mechanism to respond to the Minister's recognition of the need, but concern to avoid another layer of bureaucracy. I know that the matter will be discussed by the London Partners group. I shall be interested to know when and how any such agreed proposals will be implemented. Do the Government envisage implementing them in time for the creation of the LSCs on 1st April next year; or do they intend to wait until the national and local LSCs are established and running so that those LSCs can determine the mechanism? In that case, the system is unlikely to co-ordinate until nearly half-way through the mayor's first term. That would be a serious setback for London, which is working reasonably well under the circumstances.

I move the amendment for two reasons. First, I want the safeguard of having the provision on the face of the Bill so that, if so minded, future governments cannot do away with the system without legislation. Secondly, and with a little more hope of success, I hope to receive from the Government a clearer and more up-to-date view of the exact role and functions of the co-ordinating mechanism; and when they envisage having it in place. I beg to move.

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