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My noble friend Lady Maddock spoke about the experience of learners and in particular about travel costs. We on these Benches want to put the interests of students, not the ambitions of a few colleges, at the heart of provision, as the noble Baroness, Lady Morgan, said. We need to retain and develop the co-operation that already successfully exists between colleges and universities and not set one against the other in head-to-head competition for foundation degree students. In the week when the Bill was published, a vice-chancellor said to me, “We will take our students back if that is what is going to happen”. The students were from one of the universities mentioned today but I shall not say which one. It has long been the policy of these Benches to give post-16 purchasing power to the student, so we welcome the learning accounts part of the Bill. There are other parts of the Bill which we welcome, too, as my noble friend Lady Sharp said.

The noble Lord, Lord Leitch, emphasised the importance of the portability of qualifications, not just in the UK but across Europe. There have been difficulties in getting our three-year degrees accepted through the Bologna process. In Europe, many degree courses last four years or even longer. Foundation degrees already muddy the waters simply by the fact of being called “degrees”, although we on these Benches support them and welcome the contribution they make to giving young people access to higher education. However, more than half of students taking foundation degrees already go on to take full honours degrees. That does not indicate to me that there is really any barrier to a student taking a university-accredited foundation degree in a college and going on to an honours degree in a university. I do not agree with the concerns of the noble Baroness, Lady Warwick, about that; I cannot see it happening. So why not leave well alone? Why rock the boat, as the noble Baroness, Lady Morris of Yardley, asked?

There is a very great danger of upsetting the balance of co-operation and competition between universities and colleges. Only a few colleges may currently be showing interest in getting accreditation to award their own degrees, but I agree with the noble Lord who said that such an ability will become a status symbol. They will all want it before very long.

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It may not upset the current balance if there are only a few degree-awarding colleges, but the balance will be changed very much indeed if they all have it.

That is why I do want to whinge about the lack of consultation. It is vital that we study the possible unintended consequences of a measure such as Clause 19. As it stands, we will probably see another Bill later this year anyway, as a result of the report of the noble Lord, Lord Leitch. Why not wait on Clause 19 and consult further? If the Government have to bring another FE Bill before the House later in the year, they can choose then whether to bring forward Clause 19, depending on the consultation at that stage. That would be a sensible way forward.

8.39 pm

Baroness Verma: My Lords, I am mindful of the time, so I will keep my comments brief. I join all noble Lords in wishing the right reverend Prelate the Bishop of Portsmouth well.

This has been a very interesting debate. I am glad that so many Members of this House with experience and interest in this sector were able to join us. Their contributions to the Bill will be invaluable and I hope that we will hear more from them as the Bill moves through its later stages. Many noble Lords have raised concerns over the lack of consultation on Clause 19. I hope the Minister will reassure the House that he will listen closely to the highly experienced voices in your Lordships’ House.

The noble Lord, Lord Low of Dalston, and other noble Lords highlighted the need to ensure far greater access to education, employment and training for people with disabilities. I agree that providing access enables enjoyment of a whole range of other life chances. I think the noble Baroness, Lady Lockwood, misunderstood my noble friend Lady Morris of Bolton. She, like the rest of us on these Benches, wants to see more powers devolved to FE colleges. No one can argue that, alongside academic and vocational achievements, the development of interpersonal and communication skills is not crucial. The noble Lords who made that point offer great insight into why many sections of our community fail to aspire to, or have confidence in, any form of education or training.

The Bill is certainly in need of as much constructive criticism as this House can offer. On these Benches we want, as my noble friend Lady Morris said, to use the opportunity represented by the Bill to improve the independence, strength and flexibility of the further education sector. We find it extraordinary that the Bill contains nothing that would address the challenges before us, which the noble Lord, Lord Leitch, and Sir Andrew Foster before him, so clearly identified. Instead, this Bill takes steps to give yet more control to the LSC, an unelected, unaccountable body.

The one step taken that could improve the status of colleges—that of giving them the power to award foundation degrees—has been taken in a way which one would think was designed to cause divisions between universities and colleges. It has been done

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without consultation or explanation, and we are still in the dark about what standards will be applied to maintain the credibility of foundation degrees. As has been said so many times today, what will happen to the relationships that have grown up between colleges and universities? What effect will this have on students’ progression from further to higher education?

One area on which the Bill is extremely clear is the new powers that are being devolved to the LSC. Ironically, this is an area that the noble Lord, Lord Leitch, barely touched on in his report. Of course the complexity and confusion that pervades further education, with 17 different bodies overseeing colleges, has an effect on the provision these colleges can offer. When the funding application for a Train to Gain programme runs to over 100 pages, it is no wonder that we are not seeing the progress we would like. LSC complexity will only be worsened by the intervention powers in the Bill. We have been reassured by the Minister that these are merely backstop powers and that the LSC is being given the power to sack a college’s governing body or any of its staff only to encourage governing bodies to keep a watchful eye on their institutions. It is hard to see why these powers will be a more effective incentive when held by the LSC than when held by the Secretary of State. The Secretary of State has not used these powers once in the last 10 years. It is completely unnecessary to create yet another layer of guidance, reports and policy documents, and yet another threat for the LSC to hang over colleges’ heads.

This inability to trust colleges to manage themselves is the result of continuing disdain on the part of the Government for skills and vocational training. I found my noble friend Lord Baker’s calls for training to be made available to those over 14 extremely interesting. The only excuse for forcing children to remain in academic rather than vocational study, beyond the acquisition of core skills such as numeracy and literacy, is that the Government believe that vocational skills are only acceptable when other possibilities have been exhausted. Government policy seems to see vocational training as a last-resort intervention, only to be offered to people in danger of failing all other options.

For example, there is nothing in the Bill to address the continuing focus of resources for career guidance towards the young and low-skilled at the cost of adults and those wishing to train to higher levels. Again, that was identified by the noble Lord, Lord Leitch. The Bill should be about giving skills training the status and respect that it deserves by giving it an identity of its own; an effective preparation for the skilled jobs that this country desperately needs filling. We are already seeing the rapid decline of low-skilled jobs, not only in manufacturing but in the services. An ageing population makes it crucial that we give people of all ages the opportunity to reskill and upskill. The Government must stop relying on further education to plug the gaps left by the failings in the school system. It is appalling that so many young people are unable to read and write to the level of an 11 year-old, but it is not right that further education should pick up the tab to the exclusion of all else.

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As my noble friend Lady Morris made clear, we believe that the way forward is not the control freak approach favoured by the Government. We must allow colleges to improve the status and relevance of the courses that they offer by responding flexibly to local demand from both students and employers. We must increase employer investment in further education. I do not just mean investment of money, but also of time and influence. Further education needs business experience and support; a real partnership where employers and educators together provide the best education possible for students.

If the Bill is anything to go by, the Government still have a long way to go before they really believe that further education colleges are to be trusted to provide the skills training that this country so badly needs. We on these Benches will try to improve the Bill as it passes through the House to take more account of the sensible proposals of the noble Lord, Lord Leitch. I hope that the Minister, now that he has had some time to assimilate the report, will respond positively to this effort to make the Bill an effective response to the challenges that his own Government’s reports have identified.

8.47 pm

Lord Adonis: My Lords, I come to this Bill fresh from 70 hours in the Chamber on the Education and Inspections Bill, which involved my inflicting on the House 94 speeches, marginally more than the noble Baroness, Lady Walmsley, I think, although only just. Your Lordships can imagine the relish with which I embark on yet another legislative project this evening, only a month later. I was fondly assured that this would be a largely technical and non-controversial Bill. After piloting four Bills through the House in 18 months as a Minister, I know that while every Bill is largely technical—or, as the noble Lord, Lord Norton, put it, too technical and dense—there is no such thing as a non-controversial Bill. Perhaps it is just the case that I have never had the good fortune to be associated with a non-controversial Bill, which may say something more about me than about the intrinsic nature of legislation.

Let me simply say that clearly there are degrees of controversy. After 30 speeches, all but five or six of which have dwelt long and hard on Clause 19, I can see the contours of our debates ahead. I say right at the outset—because I appreciate the points that have been made about consultation, about the need to get into the nature of the issues at stake and about the impact on all the partners—that we want the collaborative arrangements that have been so carefully nurtured in recent years between universities and further education colleges to be furthered still.

The best response that I can make—though I will of course deal with some of the points raised in my reply—is to assure noble Lords that my honourable friend Bill Rammell, the Minister for further and higher education, will be delighted to meet all those Peers who have concerns about Clause 19. It will be quite a large meeting. He will be willing to do so before we go into Committee, so that we can go into

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these issues in rather more depth than I am able to do this evening. I hope that that will enable me not to have to give a detailed, blow-by-blow response from the pages of notes that I have here, since it is 8.50 pm. I hope that we can have an in-depth discussion about the implications of Clause 19 in that meeting, which will help to further inform the debate before Committee stage.

Leaving Clause 19 aside, I thought that there was a fairly broad, although not complete, consensus on how to proceed. After the opening speech of the noble Baroness, Lady Morris, I thought that it included agreement on the streamlining of the Learning and Skills Council. After the noble Lord, Lord Baker, had opined, we then discovered that it did not include agreement on that. I am slightly surprised that it does not, because I thought that the one thing on which we agreed across the House was the need to minimise bureaucracy and to cut waste and duplication.

I readily accept that the Liberal Democrats got there before we did and realised that we should have had fewer learning and skills councils. My noble friend Lady Morris said that it had become clear some time ago that this was the direction of travel in which we were moving. I do not think that I am revealing any state secrets when I say that we considered long and hard at the time whether 47 was the optimum number. My noble friend Lady Blackstone will well remember those discussions. We thought that we might want to consolidate in due course, but in the process at the time we thought it right to phase these transitions. Remember that we were moving from a much larger number of training and enterprise councils—the history of this is always important. We are also taking account of developments in the work of the Learning and Skills Council and of colleges since then.

My noble friend Lady Blackstone asked for the regulatory impact assessment of the cost. The effect of this is part of a process that will save an estimated £40 million in the administration of the FE sector—money that can then go straight to the front line for learners and for FE institutions. As the noble Baroness opposite will need a lot of money if she is to meet the spending commitments that her party has made, I would have thought that she would have grabbed the £40 million and not sought to keep in place the much more intensive bureaucracy in the FE sector that would be required to keep 47 learning and skills councils going. I will squirrel that one away, however, as I am always on the lookout for areas where I know that she is now committed to spending a great deal more money than we are.

Baroness Morris of Bolton: My Lords, I am terribly grateful to the Minister for giving way. I was asking the Government what they intended to spend.

Lord Adonis: My Lords, I have given that assurance. We believe, based on our regulatory impact assessment, that these proposals will help us to save £40 million in the administrative costs imposed on the FE sector.

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Having made that dangerously political point, however, I agree with the five key principles for action that the noble Baroness set out at the end of her speech, which she wanted to present as differences from government policy; I do not believe that they represent differences from government policy at all. In my mission to forge the strongest possible consensus, let me show how we agree with the principles by responding to each one

The noble Baroness’s first principle was that there should be serious investment in skills and training. Well, there has been a real-terms increase of 48 per cent in the FE budget since 1997, so our bona fides in that respect are clear. That includes massive investment in particular areas, raised so properly by the noble Lord, Lord Moser. Those areas are the foundation of all that we have to do in this matter, which is to improve the basic skills of the adult population—particularly the younger adult population—so that they reach that basic skills level without which it is almost impossible to function in the labour market today. That has all been made possible by this big increase in investment. I gave the figures in my opening speech. That investment will be sustained in future, too.

The second principle outlined by the noble Baroness was that we should seek to break down the rigidities that currently exist between further education, higher education and schools. We are seeking to do that in a very profound way. As I abstract it from this debate, I take it as a great tribute to the work that has been done in the collaboration between higher education and further education in recent years that such concerns should be expressed that anything could happen that might weaken that collaboration. I take to heart the comments made by my noble friend Lady Blackstone about the work that Greenwich does with its collaborative partnerships; the comments of my noble friend Lord Sawyer, who talked about the work of the University of Teesside in that area; the words of the noble Lord, Lord Plumb, on the work of Coventry University, which does excellent work with FE colleges, too; and the comments of my noble friend Lady Morris of Yardley about Sunderland. I particularly noted what was said about King’s College, London, so we are talking not just about the post-1992 universities, but about older, established universities as well.

This is all a tribute to the huge progress that has been made in collaborative work between universities and FE colleges, in an area, if we are frank, where there was all too little collaboration in the past. We have been seeking to break down that divide and we are very much seeking to break down the divide between further education, higher education and schools, too. That issue was mentioned by the noble Baroness and taken up as a theme by the noble Lord, Lord Baker, with his interesting remarks about vocational education in secondary schools and the need to institutionalise progression beyond 16. Although there are obviously difficulties in creating new institutions for pupils at a starting age of 14,

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given the pattern of our current secondary provision, the emphasis that he placed on students’ ability to progress in a predictable way at the age of 16, whether within a school with sixth-form provision or through much stronger, established collaborative links between further education and schools, was well made. That is, indeed, at the heart of government policy in this area.

Thirdly, the noble Baroness, Lady Morris, said that we should have a system that ensures that learners and employers have confidence in the quality of vocational education. We are definitely seeking enhanced confidence in the quality of such education. That is precisely why, for example, we are seeking to introduce, as the noble Lord, Lord Dearing, said,

vocational qualifications for 14 to 18 year-olds, which simply have not existed before. Work is taking place to develop the 14 specialised diplomas, the first five of which will be available from 2008, precisely so that high-quality vocational education is embedded in the work of schools, where, alas, it has been absent ever since the Education Act 1944, and we are seeking to unite both the school and the further education sectors.

My noble friend Lord Jones made a very interesting speech but, alas, we are leaving the Welsh to take care of their own policy in this area, so I cannot tell him what their policy is—he needs to speak to his colleagues in the Welsh Assembly Government. However, he raised an important point about encouraging female apprentices and about progression in this area. That is, indeed, important if we are to have the high-quality vocational provision that we want to see. Interestingly, the Box has told me that 47 per cent of apprentices now starting training are female and that the number of women apprentices has increased steadily in recent years, particularly—this is crucial—as more apprenticeships are offered in non-traditional sectors. So I believe that we can take heart from some of the progress that has been made in this area, and my noble friend is right to raise it as an important and continuing priority.

Fourthly, the noble Baroness, Lady Morris, said that we needed a system driven by choice on the part of learners. However, that is substantially the case within the constraint of places being made available. I defy the noble Baroness or any other Member of the House to start telling 16 year-olds these days where they have to study, what sort of courses they are expected to follow, and so on. This is increasingly driven by choice on the part of young people and also by older students. In recent years, that has been a strong move, and it will continue.

Fifthly, the noble Baroness emphasised the need to cut down on bureaucracy and regulation, but then, alas, her next move was to commit herself to a policy that involved more bureaucracy and regulation than we are proposing. But her five principles of action are ones that we share, and they go to the heart of the reforms set out in the Bill.

The noble Baroness, Lady Morris, the noble Lords, Lord Baker and Lord Dearing, and both noble Baronesses on the Liberal Democrat Benches

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mentioned the importance of links with local authorities and of established links penetrating further down than the nine regional councils. I stress that the structure that we envisage comprises the nine regional councils which have a statutory footing, but integral to the proposal is that there should be 150 local area partnerships. Although they are non-statutory—we want to attain flexibility; we do not want to over-regulate again, making something of the mistake that we made in the past in over-regulating what was a bureaucratic structure—these 150 local area partnerships are intended for the most part to mirror local authority boundaries. In that way, you get the advantages of both regional partnership and strategic leadership.

I take to heart the point made by the noble Lord, Lord Low of Dalston, that it is a great advantage for the voluntary sector and charities to be able to deal regionally with the further education bureaucracy, compared with having to deal with 47 separate institutions at a local level. So, with the 150 local area partnerships, we get the benefits of regional planning, strategic leadership and decision-taking in respect of skills needs, while we retain local flexibility and the feedback loop, which is so important in relations with local authorities. This means that, for example, instead of the local learning and skills council that currently covers the whole of Greater Manchester, there would be 10 local LSC partnership teams. Each one would cover a local authority and they would be grouped into three areas: the city of Manchester, Greater Manchester north and Greater Manchester south. Those sorts of arrangements would be replicated elsewhere.

A lot was made by the noble Baronesses, Lady Sharp and Lady Walmsley, and the noble Lord, Lord Norton, about powers of intervention as though what we were proposing here was some affront to natural justice that would not be properly regulated. Perhaps I may first stress, in order to further our debates before we go into Committee, that the proposals we have set out in the White Paper and the Bill follow closely those made by Sir Andrew Foster in paragraphs 105 to 109 of his report. Those specifically cover interventions, including bringing in new partners who could take over failing provision and having to make proper arrangements for students, which is essential, as the noble Lord, Lord Norton, said. They also include another college provider being empowered to take over the management of a college and the closure of a college. Many of these proposals were already set out in Sir Andrew Foster’s report.

The exercise of these powers by the Learning and Skills Council could take place only if stringent conditions are met and with evidence of failure being demonstrated. They are not arbitrary powers. We also have an Ofsted inspection regime and other means of analysing the performance of colleges. In order to exercise powers which, as the noble Baroness rightly said, are draconian, there would need to be a demonstration, which could withstand a legal challenge, that this was a reasonable thing to do in all the circumstances. That is set out in the Foster report.

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