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The Government appear to have acknowledged the arguments of those expressing concern but the reaction seems to be only to call this YPLA slim line. That is said wherever possible to emphasise that it will not cause the bureaucratic muddle of which we are all afraid. The Minister referred to it as a "light-touch national body" in her Second Reading speech, if I have got it right, but we have yet to hear a proper explanation of how the lines of reporting, funding and accountability will work in this slimline body, to avoid these difficulties. We concur with the worry of the Local Government Association and hope that the Minister can answer that concern in terms of practicalities rather than in terms of her vision, her dream, or her aspirations. Does she acknowledge that legislating for a new system is not enough to make up for the failures of the Learning and Skills Council? She may be able to explain what the SFA and the YPLA will do, but it is even more important that she explains how they are expected to do it. To that end, will the Minister answer our amendments that probe why the YPLA could not just come under the SFA? Does she not accept that an overarching body might help to simplify the lines of accountability and strategy while still allowing the YPLA to fulfil its obligations in providing funding to local authorities?
Of course, lots of other bodies have expressed worries about the nature of the Government's reforms. The National Union of Teachers, for example, said that it was worried about,
- "the creation of a plethora of new agencies, with the Skills Funding Agency and the Young People's Learning Agency. We are in danger of exchanging the bureaucracy of the LSC for two new agencies".
The NASUWT referred to the establishment of this body as,
The British Chambers of Commerce commented:
"The government's planned abolition of the Learning and Skills Council (LSC) and replacement with a number of new agencies for the sake of organisational efficiency is bizarre".
Need I go on? There is widespread opposition. I hope that the Minister has a well-prepared answer. Knowing her advisers, I am sure that it has been well prepared. I hope that it will outline the necessity and benefits of replacing some of the functions of the LSC with the YPLA.
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I have carefully studied the impact assessment-both volumes. It says that,
- "in order to ensure that any potential increases in bureaucracy are minimised, the DCSF and DIUS have been working closely with representatives of the provider sector".
I am a bit confused about that. Perhaps the Minister can say what potential increases in bureaucracy are contemplated. I am merely quoting from the impact assessment. What potential increases in bureaucracy have been under discussion? Will she update us on the progress of these talks?
John Hadwin, on behalf of the Surrey area liaison committee, university and college union has commented on the difficulties of division by age, particularly as regards FE colleges. He has written of a former colleague who taught two full-time courses, two part-time day courses and an evening class. Apparently his classes split 18-4 and 19-3 between 16 to 19 year olds and 19 plus students. In the part-time day courses the split is 5-10 and 8-6 and the evening class is divided 3-14. Will the Minster tell us whether it is her assumption that the passage of this Bill will mean that two different agencies, responsible to two different government departments, will want records of those students and may perhaps also have different criteria for their funding?
We have tabled the amendments to express our deep concern about what we regard as the further confusion that the Government are bringing into the education sector. The abolition of the LSC is already under way. Perhaps among her other remarks, the Minister can give us an update on progress. Our Amendments 145, 146A and 169A are designed to probe the nature of the abolition of the Learning and Skills Council and its replacement by the YPLA and SFA in terms of how much the transition will cost and how many people will be employed by each of these new agencies. Page 33 of the impact assessment states:
"We expect the new system will at worst be revenue neutral for providers and there could potentially be significant benefits in terms of a more informed and integrated commissioning of their services by authorities".
I hope that we will get some facts and figures that will back up that remarkable statement. It is rather disingenuous of the Government to keep referring to a slimline agency and light-touch bodies when the Bill seems to be introducing more bodies and more bureaucracy. The fear of those in the sector, and the fear on these Benches, is that it will all mean increased spending, more staff, more bodies, more consultation and more cost. We look for reassurance with some firm facts and figures.
Those concerns were raised in another place-I have been carefully reading through the Committee report-when Ministers struggled to come up with any solid figures. The updated impact assessment produced as the Bill entered your Lordships' House has provided some preliminary figures of transition costs, with the proviso that final figures would be produced closer to September. Here we are. I think that it is October. I have seen nothing so far. We need all this urgently. Can the Minister provide us with an update on the new figures? The constant emphasis on the very rough and initial nature of the principal figures gives us cause to doubt their reliability. It is all too easy for the Government
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It is interesting to note the difference between the two impact assessments. In another place, the impact assessment stated:
"We expect the ongoing costs of operating the new system to be revenue-neutral compared to the current system in the short-term, with savings and efficiencies through a more integrated service at local authority level in the medium to long-term".
However, by the time that the impact assessment reached your Lordships' House, it talked only about maximising any potential savings. What has caused this change of emphasis and apparent decline in certainty about cost savings? Has further analysis undermined the Government's confident claim that there would be savings and efficiencies in the medium to long-term? I think the Minister will have to admit that there has been ample opportunity for the Government to defend their assertion that there will be cost savings, yet we have had no solid figures. At this stage of the Bill, I do not think that that is adequate.
Amendments 145 and 169A probe the Government on the number of people employed by the YPLA and the SFA. Amendment 145 states that the YPLA is not permitted to employ more than 500 people in total; Amendment 169A states that the chief executive may not employ more than 1,800 people in total. In another place, the Minister stated that he expected about 500 staff to transfer from the LSC to the YPLA and about 1,800 to transfer to the YPLA, which would then leave about 1,000 to transfer to local authorities. The Minister was, however, rather cagey about putting what he termed a straitjacket on the bodies, which would not allow them to employ more people than that. He said that he did not expect there to be a reduction in the head count. Of course, that calls into further doubt the Government's assertions about cost savings.
Does the Minister in fact expect an increase in numbers? After all, if the staff from the LSC are simply being divided between two bodies, does she accept that it is very likely that there will be more functions required and, consequently, more staff? It would be very useful if the Minister could expand a little on the structural changes that we might expect. As I said, the impact assessment informs us that the transfer will be cost-neutral. Both the SFA and the YPLA will have their head offices in Coventry, which currently houses the head office of the Learning and Skills Council, so, on paper, the Government will have achieved little more than dividing one institution into two. Can the Minister inform us of all the benefits that we should hope to see from the change? I must say that I look forward to her response. I beg to move.
Baroness Sharp of Guildford: My Lords, my name is down with that of the noble Baroness, Lady Verma, and the noble Lord, Lord De Mauley, as questioning whether Clause 58 should stand part. In addition, within this group, we have tabled a number of amendments-Amendments 146B to E, 153ZA, 155A, 161A and 161B. I shall shortly explain why we have tabled those amendments.
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Although we have been questioning why Clause 58 should stand part, we have a somewhat different vision from that of the Conservatives as to where we want education to go. Unlike the Conservatives, our vision is one that involves local authorities. We feel it is very important that education serves local communities and is seen to do so, and that schools should co-operate in serving their local communities. Therefore, we see local authorities, which are the elected local representatives running those communities, as being key operatives within the whole process. On the whole, we want local authorities to be running the education system with the minimum of national guidelines and interference. Therefore, we basically welcome the thrust in the Bill of decentralising to local authorities-which one essentially sees here for the 14 to 19 age group.
In this sense, we are much closer to the Government because, as I said, they want to push the responsibility for the 14 to 19 age group down to local authorities. Similarly, although this language is somewhat different from the language that they were using three or four years ago, they are now anxious to see schools co-operating instead of competing with each other. I am delighted to see the spirit of co-operation between schools promoted by the Government-one which we advocated during the passage of various education Bills before this House when the Government were anxious to set up separate trust schools and academies competing with each other.
We are, I must confess, somewhat perplexed as regards the Conservatives' plans. Although the Government's plans talk at the moment about 16 to 19, it looks as though they are moving towards funding 14 to 19 as a block. That has been Liberal Democrat policy for some time, so we are delighted to see it. However, as regards the 14 to 19 age group, we do not quite understand where the Conservatives are. On the one hand, the thrust of their policies is that secondary schools, in particular, but all schools, should stand on their own and be independent, like academies. Academies are answerable directly to the department. We assume that all new schools set up by private enterprise, trusts and so forth, would be answerable to and funded by the department, so there would be one stream of funding coming through the department. Further education colleges would be funded by the Further Education Funding Council. Finally, all those schools not going independent will be funded by local authorities. Effectively, to my mind, the Tories will set up a very complex system of funding for 14 to 19, one that involves three different streams of funding: one from the department directly, one from the FEFC and one from local authorities. They talk about wanting to have clear and consistent lines of responsibility and a coherent, consistent and effective system, but I do not think that they will achieve that with their plans.
Our vision is of local authorities playing a key strategic role in commissioning and developing the local education offering. Far from removing schools from the local education funding regime, we see all funding passing through local education authorities. Although our model is one in which funding follows the pupil-thus the pupil premium which we proposed several years before the Conservatives-it envisages a
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Hence, while there may be a national funding formula, our view is that there is no need for the YPLA and that the money should go directly from the department to local authorities, just as it goes from the department to schools via local authorities. These days, it is ring-fenced, but the funding is nevertheless channelled through local authorities directly to schools. If we are going to be channelling it to schools, we feel it should cover the whole 14 to 19 block. As the noble Lord, Lord Hunt, began by saying, local authorities are now responsible for the provision of education and training, which covers the apprenticeship area. We would like to see the money going through local authorities, which have these responsibilities.
Local authorities will have to produce their commissioning plans to be approved by the YPLA. A very complex net is being proposed. This is how colleges are going to be funded in future: the YPLA, with the help of local authorities, is to carry out its new responsibilities by developing a national framework to support planning and commissioning. That is fine. Each local authority will assess supply and demand for 16 to 19 in their area and take the assessment to the sub-regional group of local authorities of which it is a member. The plans will then be agreed by the regional planning group, which will scrutinise local plans and ensure that they are coherent, can be funded within the regional budget and will deliver the 14 to 19 entitlement. Regional development agencies will help to ensure that the plans for young people will deliver what is needed by employers, taking into account the regional economic strategy and the regional skills needs. Regional government offices will then contribute to the discussion of regional priorities and support local authorities in undertaking their new responsibilities. They are, and will continue to be, a conduit for information to flow from sub-regional groupings. The YPLA will check these plans to ensure that they cohere and are affordable and will fund local authorities appropriately. Local authorities will pass on the funding to their colleges. The colleges will have a separate stream of funding for apprenticeships and will have streams of funding from the SFA for post-19s and from local authorities for under-19s. These are complex streams of funding and there is a complex process written into all of this.
One of the things that those of us who have been involved with the YPLA and who have looked at the plans for its development have been very perplexed about is that the Government have proceeded as though the Bill has been passed. We now have shadow authorities in place. The LSC is being broken up and people are being allocated, some to the YPLA, some to the SFA and others to local authorities. We have heard the figures being mooted about the numbers that will be passed over. Talking to our local government colleagues, it is quite clear that, as far as they are concerned, so much has already taken place that they feel it is almost
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With this in mind, we took a long, hard look at the proposals in the Bill, the Explanatory Notes, estimates of the costs and the series of briefings that the Bill team provided to work out the 16 to 19 proposals. One of the things that struck us substantially was the disjuncture between what is stated in the Bill and what we were told in the briefings about the functions of the YPLA. The department assured us that the YPLA will be a small, slim-line authority whose main job is to distribute money between authorities. Sure enough, those are the main functions of the new organisation set out in Clause 59. They are totally financial. The supplementary powers granted in Clauses 59 and 60 are both financial but Clauses 61 to 74 grant power to develop targets and assessment schemes, to secure suitable education and training directly if necessary, to intervene if local authorities fail to do the job they are supposed to do, to undertake R&D connected with its functions-we have no objections to that that as it is a perfectly viable function-and to issue guidance to local authorities to which they must have regard.
These are all rather stark powers and present the authority as an interventionist authority. Contrast them with the story we were told in the briefings on 16 to 19 arrangements. In them, far from being a stern interventionist authority, the YPLA is almost cuddly. We were told that its main functions will be to assist local authorities. It will produce a national commissioning plan and will work with local authorities and their regional partners to make sure that they use the plan effectively for their local needs. One of the problems we faced in looking at all this has been that there appears to be a slightly changing agenda. It is well known that the letter from the noble Lord, Lord Mandelson, to Jim Brathwaite at the South East England Development Agency is now in the public domain, and it is quite clear that the role that the regional development agencies will play in vetting plans that come forward and setting skills strategies in their local regions that local authorities will have to fit into is quite different from what was originally envisaged and that regional development agencies are to play a much more substantial role. To some extent, we share the Conservatives' cynicism about regional development agencies. Our cynicism is because they are not elected, but totally appointed. Why should they start dictating to people what they should do? We would like to see them have some electoral responsibility behind them. We were told in the briefings that there will be a national commissioning plan and that the YPLA will work with local authorities and their regional partners to produce regional and national data that will feed into the planning process and help with cross-regional commissioning and so forth where appropriate.
This disjuncture between the Bill and what we have been told the YPLA's functions will be has led us to table our amendments in this group. The first set of amendments relate to Schedule 3, which sets up the YPLA. Paragraph 2 relates to membership. It is proposed that membership should be between six and 13. We feel very strongly that six is much too few for an authority that would represent so many different interests.
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7.30 pm
In addition, we have sought to make amendments to the Bill that would give some sense to what the YPLA is going to do. The key amendment in this whole series of amendments that we have laid is Amendment 153ZA, which takes the wording from the briefings on the YPLA's functions with which we have been provided. Our amendment, which would go after Clause 60, makes it clear in proposed new subsection (2) that while the YPLA's main function is financial, in discharging that function it will,
- "develop a national funding formula and national commissioning framework ... work with local education authorities and their regional partners",
providing them with "consistent national data", which they need to do their planning, and help with any pan-national "or cross-regional" procurement processes.
Amendment 155A makes it clear that in securing education and training provision under Clause 64, the YPLA will work with its local and regional partners rather than dictate to them.
Amendments 161A and 161B take issue with the wording of Clause 70. Why must the YPLA issue guidance to its local education authorities? If the tone of the briefings is to be replicated, it must consult its local education authorities and issue guidance only after consultation.
Altogether, if I might say so, these amendments seek to put into the Bill an image of the YPLA that more closely fits with its functions as they have been described to us in the briefings that we have received. If we are to have a YPLA, let us have an organisation that is enjoined, as we are told it will be, to work closely and in partnership with local authorities.
I have two further questions to put to the Minister. First, the YPLA is responsible for the EMA. Will the Minister update us on the 16-to-19 financial review, which will look at 16-to-19 financial support in the round, including the child benefit and child tax credit paid to parents of 16-to-19 year-olds in full-time education and unwaged training? What is the current position of this financial review? The Minister may wish to write to me rather than necessarily answer now, because I have not given her notice of this.
Secondly, with the raising of the participation age to 18 we will have a whole generation. By September
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Finally, the noble Lord, Lord Hunt, talked about the cynicism with which one can greet the whole issue of whether or not this will be cost-neutral. The LSC is a single quango that has had many failings. Nevertheless, it is being replaced by two quangos, one of which is the SFA. Actually, the SFA is not a quango because it is a next step agency, but within that agency four vital functions will be performed. The National Apprenticeship Service, Train to Gain, the Adult Advancement and Careers Service and the National Employer Service will all be run by the SFA. That is very considerable. Very complex machinery is being set up to replace it all, and it beggars belief to say that it will not cost a lot of money.
Baroness Perry of Southwark: My Lords, I, too, have a question for the Minister. I know that the Government are genuinely committed to flexibility in education-to people being able to take up education at any time in their lives and to flow in and out of education and training as well as work and so on. Does the Minister feel that the separation of these two different bodies will help or hinder that kind of flexibility?
I have never known a funding agency, or any body with powers of funding, that did not become very independent and pretty bossy over the course of its life. No doubt those two agencies will begin to develop quite different policies on how and on what basis they fund and on how much per unit they will offer. Some individuals, particularly the often forgotten part-time students who are in full-time employment and studying part time, could very well find themselves switching from one kind of funding to another while they are on the same course and pursuing the same qualification. That is quite apart from the difficulties, which my noble friend Lord Hunt and the noble Baroness, Lady Sharp, have highlighted, for institutions that have all these different streams of funding. It could be a very bumpy ride for individuals as they pass the age of 19 and find themselves in a completely different funding regime.
I would very much like to hear how the Minister feels this particular agency, which is independent from the SFA, will help that kind of individual flexibility for learners.
Baroness Morgan of Drefelin: I very much hope that I will be able to offer the reassurance that noble Lords are looking for. I am very happy to talk about numbers and the disjuncture about which the noble Baroness, Lady Sharp, is worried. Sometimes when you look at a Bill, it is the powers and the strong stuff that leap out at you, and the cuddly stuff that she is looking for is sometimes more difficult to enshrine in legislation. However, that is not to say that it is not
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