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The criteria are rightly stringent. They are based extremely closely on the existing standards for institutions applying for award-making powers, supplemented by additional criteria that are tailored

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specifically to the foundation degree qualification. These additional criteria include the requirement for an applicant institution to have no fewer than four consecutive years’ experience, immediately preceding the year of application, of delivering HE programmes at a level equivalent to the foundation degree.

It has been commented that the proposals will jeopardise existing relationships between further and higher education institutions and that this will in turn have adverse consequences for learners. I stress that there is no intention whatever of endangering existing partnerships, especially where these are working well. While some FE institutions will seek foundation degree-awarding powers because that will meet and respond to local demand from employers and learners and because the development of higher-level skills provision is at the heart of the institution’s core skills mission, they will still want to maintain—indeed, to develop—their collaborative arrangements with higher education institutions. Others will want to maintain the existing validation arrangements in delivering foundation degrees because that arrangement suits the local demand. This is about choice. We regard all these different arrangements as being equally valid.

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In this respect, we are entirely sympathetic to the spirit of the amendment of the noble Lord, Lord Dearing. We agree with his emphasis on the importance of the student voice and the need to ensure that the interests of learners are protected and promoted. Furthermore, we entirely share his desire to protect the excellence of the UK’s higher education brand. The requirement to consult the student body will be written into the criteria that will form the basis of the Quality Assurance Agency’s assessment of a further education institution that is applying for foundation degree-awarding powers. Paragraph 4B of the current draft of the criteria document states:

It is quite right that the views of the students are taken into account. Inserting this requirement into the criteria, which will be used to determine whether an institution should be recommended for foundation degree-awarding powers, is the most appropriate way of achieving that end and will secure the objective that was rightly set out by the noble Lord, Lord Dearing.

We fully agree with the noble Lord’s wish to ensure that transparent and articulated progression routes are available to all learners. This issue, too, is dealt with comprehensively by the draft criteria for foundation degree-awarding powers. Paragraphs 28 to 34 of Section 3 of that document set out the requirement for articulation agreements to be a core feature of all foundation degree programmes. Articulation agreements are the means by which students studying for a foundation degree can identify routes for progressing to further higher-level study, typically the completion of an honours degree, either at the institution awarding the foundation degree or elsewhere.

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Furthermore, we have published Foundation Degrees: Ensuring Progression, a note that sets out the detail of how articulation arrangements currently work, how they are communicated to learners, and remedial actions that are available in cases where problems arise. This note will be incorporated into the next iteration of the criteria document, but, for now, it may be useful to expand on the main points.

Articulation agreements identifying progression routes for learners who wish to progress from a foundation degree to further higher-level study are a matter for institutions themselves. All foundation degree providers within the FE system currently have such agreements with providers of honours degrees and they will continue to do so regardless of whether they are awarded their own foundation degree-awarding powers. Therefore, Clause 19 will in no way diminish the importance placed on clear progression routes for learners.

The current arrangements work well, with institutions collaborating in the interests of their students. However, a safeguarding role is also played by the Quality Assurance Agency. The criteria that the QAA will use to assess an institution’s application for foundation degree-awarding powers include, as I stated a moment ago, detailed guidance on the need for an applicant to demonstrate that it has identified and publicised,

If an institution has not made adequate provision in this respect at the time of submitting an application for foundation degree-awarding powers to the QAA, it will not be able to satisfy the criteria and will not be recommended for the new foundation degree-awarding powers. Put quite simply, articulation agreements will be absolutely essential if a further education institution is to be recommended for foundation degree-awarding powers. It is also critical that both FE and HE institutions promote the articulation arrangements to their learners. Foundation degree students need to identify clear and viable progression routes should they choose to make their foundation degree a stepping stone to further higher-level study, which would typically be the completion of an honours degree. For this reason, the QAA benchmark statement, which will be incorporated into the criteria for foundation degree-awarding powers, clearly says:

I believe that the system delivers good articulation. There are clear incentives for providers in both sectors to offer progression and our proposals do not change these. Lifelong learning networks, which bring partners together to provide progression both into and through higher education, reinforce these incentives. If one looks at college and university prospectuses, one immediately notices the emphasis that is given to foundation degrees as a pathway to honours programmes, as well as a valuable qualification in their own right.

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Both further and higher education institutions already promote these opportunities to their prospective students through course documentation, and it is in the interests of institutions, if they want to continue to attract students, to take a positive approach to advertising such opportunities. Furthermore, organisations such as lifelong learning networks and Foundation Degree Forward have an important role to play in clarifying and strengthening progression routes into and from foundation degrees. For example, Foundation Degree Forward produces best practice guidance for HE and FE institutions about the promotion of articulation to students.

When the QAA periodically returns to an institution to carry out an audit, it will again scrutinise the ways in which progression routes are identified and promoted to foundation degree students. If the institution is deemed inadequate in this respect, it will not achieve a judgment of broad confidence from the QAA. A judgment of limited confidence or no confidence would have serious adverse consequences for an institution’s reputation and, for this reason, the self-regulating system that operates at present is effective and sustainable.

The amendment proposed by the noble Lord, Lord Dearing, also raises the issue of whether an institution that is granted the new foundation degree-awarding powers should then be able to delegate those powers by authorising another institution to award foundation degrees on its behalf or to accredit another body to provide courses leading to a foundation degree. The Government have full sympathy with the intention behind this part of the noble Lord’s amendment—the desire to see that standards are maintained. These are concerns that I share. For this reason, as I shall explain, we have proposed Amendments Nos. 41 and 42, which address this issue.

Finally, we propose to give clear advice to the Privy Council that foundation degree-awarding powers should be granted for an initial time-limited period of six years. We do not believe that it would be appropriate for a further education institution applying for foundation degree-awarding powers for the first time to be granted those powers in perpetuity. Our recommendation is that the powers should be granted for an initial probationary period, which would allow the further education institution to establish a strong track record in the delivery of high-quality foundation degree programmes before it is given the power to continue awarding those degrees.

Once this probationary period has been completed to the satisfaction of the QAA, the institution may apply for the powers to be renewed. I should make it absolutely clear that it will not necessarily be a case of an FE institution having to reapply for its powers every six years; when the initial probationary period has been served and the QAA is satisfied with the institution’s provision, its foundation degree-awarding powers can be granted indefinitely by the Privy Council. The noble Lord, Lord Dearing, suggested that a probationary period of four years rather than six should be time enough to determine whether all is well or whether problems have arisen. Your Lordships

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may be aware that, when we made it possible in 2004 for private providers of HE to obtain degree-awarding powers, we said that these powers should be awarded for periods of six years. We do not feel that a shorter period of award for high-performing further education institutions would be right in the light of this. I am sure that the noble Lord, Lord Dearing, will be alive to that comparison.

We fully intend that, as well as the initial assessment by the QAA to ascertain whether they are competent to award their own foundation degrees, FE institutions that obtain foundation degree-awarding powers will be subject to an interim review during their six-year probationary period. In consultation with the QAA, which shares our view on the importance of regular quality reviews, we are considering when these interim reviews should take place.

Amendments Nos. 41 and 42 address the issue of whether FE institutions should be allowed to authorise other institutions to award foundation degrees on their behalf—an issue that has been loosely referred to as “franchising”. I hope that these amendments will address the concerns raised in Grand Committee by the noble Baronesses, Lady Sharp and Lady Walmsley, my noble friend Lady Warwick and the noble Lord, Lord Dearing. As I explained, it is envisaged that, when a FE institution first applies for powers to award foundation degrees, it will be granted these powers for an initial probationary period of six years.

Amendments Nos. 41 and 42 reflect the helpful advice that we have received from the QAA on this matter. Amendment No. 41 proposes to amend Section 76 of the Further and Higher Education Act 1992 so that the Privy Council has the power to specify, in an order granting a further education institution foundation degree-awarding powers, that the institution’s power to grant foundation degrees does not include the power to authorise other institutions to do so on its behalf. We are seeking to place controls on FE institutions applying for foundation degree-awarding powers where their students undertake a significant proportion of their foundation degree provision at another FE institution that does not have those powers.

We considered best how to achieve this. We have opted for an amendment to Clause 19 and further changes to the criteria that the QAA will use to assess an application for foundation degree-awarding powers. Dealing with the matter entirely in primary legislation could leave us with an arrangement that lacked flexibility. For example, a statutory provision preventing further education institutions from awarding foundation degrees unless they had provided the majority of the course could restrict the ability of FE institutions with foundation degree-awarding powers to offer foundation degree courses that include a significant work-based element where training is provided by an employer. Foundation degrees are, by their nature, work-focused higher education qualifications that do not necessarily conform to any specific delivery model. Work-based learning and employer involvement in the design and

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development of foundation degrees is positively to be encouraged. I should it make clear that, whatever proportion of a foundation degree is taught in the workplace, responsibility for the quality of provision lies with the awarding institution.

We have therefore settled on Amendment No. 42, which amends Section 76 of the 1992 Act so that the Privy Council also has the power to specify in an order that the institution cannot grant a foundation degree to a person who was not enrolled at the institution at the time he completed the course of study for which the foundation degree is granted. This amendment should be considered in conjunction with further changes that we now propose to the criteria against which an applicant institution will be assessed. The QAA will not recommend an FE institution for foundation degree-awarding powers if that institution’s foundation degrees are being taught largely by another FE institution that does not itself have those powers. This will be spelt out in the criteria that the QAA will use. I recognise that the draft criteria document that we published on 14 February does not fully reflect this point, and I undertake that the next version, which we intend to publish very shortly, will do so. I should add that in all this we are working closely with our advisers on quality in the QAA.

Until now, when degree-awarding powers have been granted under the 1992 Act, they have automatically included the power to authorise another institution to award degrees on one’s behalf, and there has been no requirement that recipients of degrees from the institution with degree-awarding powers must be enrolled at that institution. The power to specify these restrictions in an order granting foundation degree-awarding powers will lie with the Privy Council. However, in advising the Privy Council, the Secretary of State will act on the basis that it is inappropriate, in the first instance, for an order granting foundation degree-awarding powers to a further education institution to permit the institution to authorise other institutions to award its foundation degrees, or for those foundation degrees to be awarded to students not enrolled at the institution with foundation degree-awarding powers. This is not a position dependent on the strength of any individual college’s application. Rather, it is an acknowledgement that without this restriction there could be unacceptable risks to the perceived quality of the UK degree brand.

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As we have made clear in the published draft criteria, our advice will be that the Privy Council, in the first instance, should grant foundation degree-awarding powers to an FE institution for a fixed period of six years. At that point, it will be open to the institution to apply to have the powers renewed. At that point in the process, the Secretary of State may decide to advise the Privy Council that, as well as being renewed, the powers should be upgraded to allow the institution to authorise other providers to award its foundation degrees, and to award foundation degrees itself to students enrolled elsewhere. By this time, the FE institution will have

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had the opportunity to establish a track record not only as a provider of higher education, which it must already have been in order to be considered for foundation degree-awarding powers, but also as a body able to award its own qualifications.

We believe that, by this time, it will be possible for the leading HE providers in the further education sector to be granted the full foundation degree-awarding powers, without risk to the immensely important UK higher education brand. However, if a college has completed its six-year probationary period and there is still concern about the reputational risks arising from the upgrade of its powers, there is no requirement for such an upgrade to take place.

It is conceivable that an FE institution might wish to enrol a student and then make arrangements for a significant proportion of that student’s foundation degree provision to be delivered by another FE institution without powers to award foundation degrees. I stress that the representatives of colleges in the mixed-economy group have made it clear that this is not what they intend. I must be absolutely clear that an institution without foundation degree-awarding powers that was farming out its students in this way would not be recommended by the QAA for these powers.

Moreover, if a FE institution were granted foundation degree-awarding powers restricted to persons enrolled in the institution and were then found to be franchising out its foundation degree students, I would expect it to receive a limited confidence judgment in its QAA audit. In the event that, as would most probably be the case, those powers had been granted on an initial time-limited basis, the institution would certainly not successfully complete its probationary period and it would not be recommended for renewal of the powers. This will be made absolutely clear in the draft criteria against which applicant institutions will be assessed by the QAA. We intend to bring forward a further draft of the criteria document shortly, which will reflect this important change.

I should also make it clear that, once the QAA is satisfied that an FE institution is competent to exercise full foundation degree-awarding powers, it will be recommended to the Privy Council that the restrictions referred to in Amendment Nos. 41 and 42 be lifted. At that point, the FE institution will be permitted to use its foundation degree-awarding powers without any further restriction, just as higher education institutions with degree-awarding powers are currently able to do.

Amendment No. 44 addresses whether the use of the new foundation degree-awarding powers should be subject to scrutiny after a fixed period of time; that was another issue raised in our deliberations in Grand Committee. My honourable friend the Minister for Lifelong Learning, Further and Higher Education and I have given careful consideration to the points made about this issue. We recognise that Parliament and the public have a strong interest in understanding the practical effects of the use of these powers. We all share a common interest in ensuring continuing confidence in the quality standards of foundation degrees, wherever they are awarded.

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We propose, therefore, that the Secretary of State should be placed under a duty to lay a report before Parliament on the effects of Clause 19, which gives the Privy Council the power to grant FE institutions in England the power to award foundation degrees. This report, which is encompassed by Amendment No. 44, is to be laid within four years of Clause 19 coming into force. We believe that that is a further significant step towards meeting concerns raised in Grand Committee.

I have spoken at length because the issues involved are important and complex. We believe that the changes that we have made go a significant way towards meeting the concerns raised by noble Lords in Grand Committee and those encompassed by the amendments of the noble Lord, Lord Dearing. I commend them to your Lordships, and I beg to move.

Lord Dearing: My Lords, I shall speak to Amendment No. 43, which is in this group. I am in the unusual position of listening to a 20-minute reply to amendments I have tabled but not argued for. I am most grateful to the Minister—I am overwhelmed. If I may, I will take all four elements of my amendment. The first was that students must be consulted before an application is made for foundation degree-awarding powers. What the Minister said is excellent. It is a necessary condition for the award of powers that this consultation takes place. I take it that it is implicit in that provision that the outcome of that consultation will be notified to the QAA when it considers the application. I am well satisfied on that.

The final part of my amendment—I will leave the two more difficult points until last—concerns a review after four years. The Minister explained why he has gone for six years—there is a precedent, but I have chosen another precedent for my four years. I am reassured, however, by the knowledge and his assurance that there will be an interim review after some unspecified period—probably around three years. That means that he has gone a long way towards my view that there needs to be an early review. I am well content to accept what he has said.

I turn to the more difficult elements: one was franchising and the other was progression. On franchising, the Minister said that there has been some further thought about the information given in, I think, Section 8 of the notes that were circulated on 14 February. It provided that most of the learning had to take place in the institution that had the degree-awarding powers. He has now moved away from that to provide for those cases where much of the learning takes place in a company. I believe that there are a number of such cases where most, if not nearly all, learning takes place in a company. I think the Minister was saying that the “most” criterion now applies to an institution of further education that does not have degree-awarding powers. I can understand that, but I would like to read carefully what the Minister said. If a large proportion of, or “most”, learning is delivered in a company, I would be concerned if it were still permissible for some other part of it, say a quarter, to be delivered by a FE college without degree-awarding powers. I recognise

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that the Minister is making a substantial response to my amendment on this—it is a case of looking at the detail.

I come finally to the issue of progression. I attach great weight to this for two reasons. First, because it concerns something worked for and paid for by a student in an FE college; it is called a foundation degree. We know now that 54 per cent of students progress from that to an honours degree. It is, therefore, essential to them that there should be this opportunity for progression. There should be no doubt about it that an FE college has a progression agreement with at least one higher education institution, and that the criteria should extend beyond bare existence of some such thing. It should be attainable, as an additional commitment to study, in some recognised, maximum period. One does not want to have to take two or three years to do the final year. I see in the notes that we were given that 1.3 years is regarded as a maximum—that seems right.

I want to be absolutely clear about the intention of the Government. In his speech, the Minister said that the QAA has to be satisfied, at the time of submission, that the college has such an arrangement.

We know that there are 700 foundation degrees under development. That is at the moment, and there will be hundreds more as time progresses. I want to be absolutely clear that the requirement applies not only to those that were being offered at the time of the application but will apply to any that are offered by the college at any time in the future. That seems fundamental.

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