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That is the burden of my amendment. I hope the Government will enlarge on the technicalities of it so that I can understand better how colleges can continue to assert their independence, innovate and head in the direction that they want to head while being subject to what I read as, as the noble Lord knows, the quite draconian powers under Clause 40 and elsewhere whereby a local authority will have to decide what provision is to be made in its locality and how. I beg to move.

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Baroness Sharp of Guildford: I shall speak to Amendment 103. It is a slightly obscure amendment to probe, to some extent, the same issue. We on these Benches endorse Amendment 96 and the promotion of the independence of the sixth-form college and further education college sector. Given that, we would like to know a little more about the kinds of co-operation that are being developed.

We understand that 43 sub-regional groups have now been agreed to. There is a six-stage process of agreement on the funding procedures and the way it moves forward. In the first stage, the YPLA will develop a national framework, working with local authorities. The second stage is that each local authority will assess supply and demand for 16 to 19 provision within its own area. The third stage is that each local authority will then take this assessment to one of the 43 sub-regional groups of local authorities of which it is a member, and the group will agree the commissioning plans within its sub-region. The fourth stage is that these plans will then have to be agreed at a regional planning group, which will scrutinise the local plans and ensure that they are coherent, can be funded within the regional budget and will deliver the 14 to 19 entitlement. The fifth stage is that the plans will go up to the YPLA, which will check them to ensure that they cohere and are affordable and then fund local authorities appropriately; if the YPLA agrees with them, it will send the funding back down to local authorities. The sixth stage is that the local authorities will then pass the funding on to colleges and other post-16 providers. The YPLA also has powers to act as a backstop authority and to intervene if it thinks there is a significant risk that local authorities have not developed robust commissioning plans.

However, let us assume that they have developed what are seen to be robust commissioning plans. Given that this is supposed to be a demand-led system, can the Minister explain what would happen in instances where the predicted demand for learners agreed all the way up and down the regional and sub-regional groups, when aggregated together at the regional level, fails to match or meet the actual number of young people who turn up at a college or a school? With more players involved than in the current process involving only the single learning and skills councils, what would be the process for reassessing the funding allocation? What would be the role of the YPLA at this point?

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I have a further query relating to cross-regional issues. Apparently the Learning and Skills Council issued guidance about the recruitment of non-English domiciled students in Wales, Scotland and Northern Ireland as follows:

"The LSC has reciprocal arrangements with the funding councils for Wales and Scotland for colleges and providers close to the borders. However, it is not expected that colleges and providers in England will recruit entire groups of learners from outside their local area. Such learners should be referred to the possibility of distance-learning or a Ufi programme delivered by their local provider or hub in Wales or Scotland. If the learning programme is not available through this route, permission to enrol the learners must be sought from the provider's LSC partnership team".

In January, the Welsh Affairs Select Committee in the other place reported on a cross-border provision of further and higher education and described this LSC funding guidance as unhelpful and inappropriate and urged authorities to see access across borders as something to be encouraged. The Government, in their formal response to the committee, said:

"The guidance issued by the Learning and Skills Council ... to further education colleges should not be seen as restrictive or as a deterrent to English colleges responding to the needs of Welsh or Scottish learners. Rather it supports our expectations that individual colleges will focus primarily on their local communities. Where such communities embrace such cross-border travel-to-learn or travel-to-work areas it is appropriate for those colleges to include these factors within their planning and their marketing strategies".

We would welcome clarification from the Minister as to whether new guidance from the DCSF will be issued to the sub-regional groups of the local authorities near the Welsh and Scottish borders. Will it make clear that they can recruit across the border, or will it try to deter such colleges from doing so? Perhaps the Minister can provide us with such clarification.

Lord Baker of Dorking: Listening to the noble Baroness, Lady Sharp, the Committee has been reminded of the enormous administrative paraphernalia that is going to be created by the Bill. First local authorities will work out local needs assessments, then they will submit to some regional body a regional needs assessment, then this will all be looked at by the Government for a national needs assessment. There is so much planning; Stalinists would welcome this approach to education provision.

That is not how it is done now. For the past 30 years, as a result of my freeing them from local education authority control, FE colleges have had a glorious golden age-no one can deny that. FE technical and vocational training has never had such a fillip as it has had for the past 30 years, and it has had it because the colleges were freed from the dead hand of the local education authorities. They were allowed to do their own thing, and they decided to provide the courses that local people wanted. They did not go and talk regionally and nationally; they knew what they wanted to do, they knew what the local lads and lasses wanted to do, and they provided the courses for them. They were constantly in touch with the market, always adjusting, introducing new courses for tourism, expanding those for medical services for nurses and cutting back on others that were a lot less popular. That was real freedom.

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The ultimate solution should be-I have yet to persuade my Front Bench of the value of this argument, but I am working hard on it-that they should return to being free institutions and students should be given vouchers to decide themselves which courses they want to pay for and go to. Let the students decide; that is what choice is about. We are told that the Prime Minister is all about extending choice to ordinary people, but if he really wanted to do that then he would give all qualified youngsters the chance to buy their own education. Is that not freedom? It is not planning.

My noble friend's amendment is very interesting. He is saying that, now that FE colleges are going to be under local education authority control for a time, they should be allowed to recruit students from wherever they want. That is what they have now, the complete freedom to recruit whomever they want. I know one FE college in London which is at the junction of three London boroughs. It recruits from those boroughs and from well beyond; it recruits into Kent as well. Will the colleges have that freedom? The Minister is nodding. I would like him to say one sentence: that no FE college or sixth-form college will have a catchment area. I am sure that my noble friend would like the same sentence from him. That is the real gain.

The Minister nodded, so I hope that he will use that sentence, which I will repeat: no FE college or sixth-form college will have a catchment area. The Ministers are looking whether that is in their brief; I am sure it is not, but I hope that it will be by the time they come to reply. I hope that they will say that, because it is the essence of freedom and the colleges should have that freedom. Otherwise, local education authorities will restrict them by saying, "We want you to do these courses for our area", although they might be right next to the boundary of another area that does not want that sort of thing. We should let choice decide this matter. My noble friend's amendment is important. It goes to the heart of the arrangements in the future and the relationships of FE colleges to local education authorities. If they do not have that freedom, it will be a grave disappointment.

The difficulty is enormous: in order to deliver education up to 18, the Government have brought in the Bill and put the FE colleges back under local education authorities-but at the same time they are slashing their capital expenditure. The Ministers know, because the Government made a Statement last week, that 92 projects have been submitted for sixth-form colleges and FE colleges, all of which were approved by the former council. Of those 92, only 13 have been approved. That is not the way to improve the public services that the Prime Minister is talking about and to improve the opportunities for young people in technical and vocational education; it is holding them back. There is a great debate about whether cuts are going to happen after the next election but, as far as FE and sixth-form colleges are concerned, the cuts have started already-massively so.

The Government slipped through an Answer last Friday, although they did not make a Statement to either House about it-no verbal Statement was made, I assure the Minister-about a major change in reducing

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the expectations and abilities of FE and sixth-form colleges to provide the services that the Bill wants them to. That is a separate debate, though; the debate here is about catchment areas. I hope that the Minister will utter the sentence that I have encouraged him to say.

Baroness Perry of Southwark: I should declare an interest as a former governor of Hills Road College, which has been mentioned as one of the most excellent sixth-form colleges in the country and is constantly at the top of the league tables. I also declare a very different sort of interest: I made my maiden speech in this House welcoming the reforms that gave the further education colleges their freedom from local authorities. Exactly as both my noble friends have emphasised, that has resulted in an extraordinary explosion in both the status and the effectiveness of the further education sector.

The part of Clause 40 that most concerns me and rather gives the negative answer to the question asked by my noble friend Lord Baker about catchment areas is subsection (4)(d) of new Section 15ZA, which says that,

That is, presumably, because some college 50 miles away is providing something that is considered to be useful. That is the negative power that the Bill gives to a local education authority to tell a further education college what it may not do. Not only is there a list of things that it has the power to tell the FE college and the sixth-form that they must do, there is also a negative power to tell them what they cannot do. I find that extremely worrying.

My noble friend referred to one college-which may be the one that sprang to my mind; namely, Lewisham College in south London-which has been working voluntarily and extremely fruitfully with its neighbouring local authorities to provide 14 to 16 education. It is wonderful example of free co-operation between three local authorities and one absolutely free sixth-form college. That is the sort of thing that I fear would be cut. I see the Minister shaking his head, but of course it would be. Once they have the power, local authorities will begin to restrict things to what is in their own interests, particularly if they are footing the bill. I would very much like to see some absolute assurance from the Minister-which I am sure he will get from his briefing-that while the local authority will fund the colleges, it will not necessarily control them. I am afraid that the whole of Clause 40 is about control and I find that absolutely wrong in view of everything that I have seen happen in the past 20 years.

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Lord Elton: I go a little further than my noble friend who has just spoken because I do not give much weight to assurances given by the Front Bench of any Government. They only last as long as the Government, and not always as long as that. I want to see the assurance in the Bill. To try to stop one hair being split in resistance to this amendment, I think that it would be a little better if the second line of the second paragraph read, "colleges should seek to recruit students from outside as well as inside the area of the local

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authority", and likewise in the next paragraph, in case the Minister says that this is trying to diminish the benefits to a local authority of having an FE college in its area. I agree wholly with my noble friends and wish that I had the eloquence of my noble friend Lord Baker.

Baroness Howe of Idlicote: I very much support the amendment. The case has been argued extremely well by the noble Lord, Lord Baker, who brings his past knowledge and continuing study of this area to the debate. We are all concerned about control. Certainly, if you look at the work of the Association of Colleges over the years, its standards have been rising considerably, as we have heard. It is interesting to note that it is particularly helping those from the most deprived backgrounds. Something like 68 per cent of those in receipt of education maintenance allowance study at a college; and 13 per cent of the 16 to 18 year-olds are from deprived backgrounds, compared to 7 per cent in maintained schools. There are a number of such figures which really show that the Association of Colleges has increasingly acted as a facilitator of the talents that we all need to see developed to the full in all our children.

One part of me welcomes the fact that local authorities are taking over education. I will come to that later. In prisons, as we all know, maybe the governors had other ideas about what the priorities for young people-and indeed older prisoners who would clearly benefit from further forms of education or apprenticeships-should be. It is the business of control that we are all concerned about. The point about moving from one local education authority to another is absolutely basic, is it not? You have to be able to cross boundaries. Clearly a lot of this is happening now anyhow-for example, if you are in a prison in one area and your home is in another. I have looked hard at the section that noble Lords want to change. I originally read it in a rather more positive way, but the more I looked at it, the more it worried me. Perhaps the Minister could take a further look at it, to see whether it could be made more reassuring. I just have this instinct that the intention is the opposite of what we have all foreseen.

Lord De Mauley: Amendment 96 in the name of my noble friend Lord Lucas is welcome and I support it-indeed, I have put my name to it. I hope the Minister will give it a favourable response. I am assured that, on the first point, he will be able to offer some comfort that further education and sixth-form colleges will remain independent. Assuming that this is forthcoming, it will be good news. And yet-here I share the concern of my noble friend Lord Elton-it does not seem to be very clear in the Bill, hence this amendment. I hope at least that it will be clear in the text of Hansard. It is also vital, however, that we are given some reassurance about the second and third subsections of the amendment.

One of the great benefits of sixth-form and, particularly, further education colleges is that they should be encouraged to specialise and so attract large numbers of students from outside their respective immediate areas, and indeed, outside the remit of their local authorities. The very nature of these colleges depends on being able to offer specialised education which is

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therefore able to be of a much higher standard. Can the Minister reassure your Lordships that local authorities will continue to accept that students should be allowed-indeed, actively encouraged-to travel to different colleges for specialist courses? I think that most noble Lords in the Chamber would agree that the independence of these colleges has secured a virtuous cycle-the more a college has specialised, the more it has attracted students from distant locations, and as it has started to attract students from far and wide to a particularly good course, the more the college is able to specialise. This must, surely, be allowed to continue.

I was very interested to hear about Amendment 103, in the name of the noble Baroness, Lady Sharp, regarding the workings of sub-regional groupings of local authorities. Like my noble friend Lord Baker, I look forward to the Minister's response as to how these 41 sub-regional groupings are going to work, how far they have progressed and to what extent he accepts that there will be boundaries between the groupings.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Young of Norwood Green): Amendment 96 echoes some of the concerns in a recent article in the Guardian, as well as concerns in the sector generally, that the independence of FE colleges will be eroded by these reforms. I reassure the Committee that this is the last thing we want. It is that very freedom of colleges to innovate and improve, through having strong governing bodies and business models that respond to the needs of learners, that has brought much of the growth and improvement in the further education system. The provisions in this Bill do not affect the independent, incorporated status of these colleges, or their business plans. Colleges will still own their own buildings. They will still own their own land. They will still command their own budgets. They will still make their own decisions about what courses they offer. They will still appoint their own staff.

I listened to the noble Lord, Lord Baker, describing the apparent educational nirvana that exists now; I can reassure him that, in some circumstances, even in the current situation, colleges will continue to be accountable for the substantial sums of public investment we make in them, through the performance-management framework. From next year, local authorities will be commissioning from all providers and will be responsible for performance-managing those that choose to be designated as sixth-form colleges, but this does not amount to control.

Our overriding aim is that all young people participate in some form of education or training and attain the skills, confidence and competence to become economically prosperous citizens. With the raised participation age, we want local authorities to focus on ensuring that every young person has access to a high-quality and engaging learning offer to enable them to participate, irrespective of where the institution they choose to study in is located. In answer to his specific request, I can assure the noble Lord, Lord Baker, that there will not be such a catchment area defined; the funding will follow the learners. That is the situation that currently exists and we do not want to do anything to undermine it.

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Lord Baker of Dorking: Does that apply to sixth-form colleges as well?

Lord Young of Norwood Green: So-

Lord Baker of Dorking: That applies to sixth-form colleges as well?

Lord Young of Norwood Green: Yes. I did say so.

Section 15ZA(4), inserted by Clause 40, already sets out that local authorities must act with a view to encouraging diversity in the education and training available to persons and to take account of education and training whose provision might be secured elsewhere. This is the very essence of the amendment tabled by the noble Lord, Lord Lucas.

We will not accept any limitation of learner choice as a result of these changes. It will not be sufficient for a local authority to commission all its provision from one type of institution, even if that were possible. While there are many excellent colleges and school sixth forms in almost every local authority area, it is hard to see that any local authority would be able to meet its duties in new Section 15ZA and fulfil the needs of all its 16-19, or 19-25 year-old, population from commissioning provision just within its boundaries or from one type of provider.

For learners who cross the Scottish or Welsh border, the national commissioning framework, issued by the YPLA, will include guidance in relation to these learners and will be clear that commissioning should focus on the needs of the learner and be based on participation, rather than where learners are resident.

The 43 sub-regional groupings, reflecting young people's travel-to-learn patterns, will work to ensure local authorities meet the diverse needs of young people in their area and increase opportunities for young people to exercise choice. We believe that the funding should follow the learner. This brings me on to Amendment 103. New Section 15ZB of the Education Act 1996, inserted by Clause 40 of the Bill, requires local authorities to co-operate with each other when securing suitable education and training for young people, and young adults subject to a learning difficulty assessment. This duty underpins the establishment of sub-regional groupings, and beyond. These arrangements will be key to ensuring that commissioning reflects the travel-to-learn patterns of young people. The noble Lords' amendment would require co-operation arrangements to be agreed with the Secretary of State. The formation of sub-regional groupings is predominantly a local decision, as local authorities are best placed to identify how they can best serve their learners. That said, there has already been a degree of national oversight. The formal governance and operational arrangements of the 43 sub-regional groups were assessed by a national panel drawn from key stakeholders inside and outside government, including the Association of Colleges and the Local Government Association. These sub-regional groupings have come together of their own volition because they see the necessity of so doing. They understand that significant numbers of young people seek their education outside their authorities. Therefore, this process is building on what already happens as it recognises the benefits of that.

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We do not anticipate changes in the membership or governance arrangements of the sub-regional groups as it is important to ensure stability in the planning process. However, there may be circumstances when a sub-regional group needs to reassess its membership. The Young People's Learning Agency, whose primary aim is to support local authorities, will be well placed to assist with any review. This is not to say that the Secretary of State will not have an interest in how local authorities perform their new functions. Where co-operation between local authorities breaks down, to the extent that one or more of the local authorities within a particular sub-regional grouping may not be able to fulfil their duties in new Section 15ZA, we have provided through Clause 65 for the YPLA to intervene to secure the provision of education and training. These are reserve powers which we expect to be used only in extremis, as was the case with the LSC, but before that occurs, Clause 65(4) specifically requires the YPLA to consult the Secretary of State. Any intervention under this provision would have to be in line with its intervention policy statement made under Clause 71, which will have been approved by the Secretary of State.

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