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The amendments say, first, that if there is an elected authority, direction should come from the Secretary of State not from the YPLA and, secondly, that the Government should have some sympathy with the college sector and allow it to be able to talk directly to the YPLA if it thinks that the local authority is not fulfilling its function. I beg to move.

Lord Elton: My Lords, before we get into the general debate, it was not just Gosplan that had a system like that. It was the same under the ancien regime in France. De Tocqueville has in almost his first chapter an illustration of how that went wrong, by giving an account of a curé who applied locally for the replacement of a tile on the roof of his chancel. When the answer came back, the roof had fallen in. It would be a great pity if the Government were to attempt that sort of retribution.

Lord Lucas: My Lords, when Hansard comes out tomorrow, I shall cut out the speech made by the noble Baroness, Lady Sharp, and pin it on my wall so that I at last have an explanation of how the system is proposed to work. Listening to her, not being a historian, I was reminded of a recipe for cooking capercaillie, where you go through endless stages to remove the overpowering stench of pine needles and to render the incredibly tough flesh delicate. The last step is always to throw it in the dustbin.

Viscount Eccles: My Lords, briefly, I will come back to Amendments 156, 157 and 158. I strongly support what the noble Baroness, Lady Sharp, said. The YPLA is an entirely inappropriate body to have the power of direction. It is doubly inappropriate because it would be an unelected body giving directions to elected bodies. Since it would not issue a direction unless it had a memorandum from the Secretary of State saying that it was all right to do so, I do not think you should send the boy in to do the man's job. If this amendment were brought to a vote, I would support the noble Baroness, Lady Sharp, with great enthusiasm.

Lord Hunt of Wirral: It is rather difficult to follow those four speeches. It has been an interesting journey through the history books and the cookery books. I agree with my noble friend Lord Eccles that in many ways we all agree with the noble Baroness, because she has given the Government a real test. I am slightly bemused, if I can add to the questions, about how the YPLA is going to satisfy itself that a local education authority is failing or is likely to fail. Clause 65 does not give us much indication of the process. I agree with the noble Baroness that, as she has quoted from the chief executive of the Association of Colleges, the whole process seems to be lengthy, complex and difficult, with an over-riding question mark over whether the YPLA is the correct body to be saying whether a local authority is failing.

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I wonder whether the Minister could explain how all this is supposed to work. Presumably, he is the author of all this. He may immediately seek to disown it and pass the buck to one of his ministerial colleagues; but presumably Clause 65 is all his idea. He owes it to this House to explain, first, why, but, above all, why the YPLA. I agree with my noble friends Lord Eccles, Lord Lucas and Lord Elton that it does not seem to make sense. He must have thought through how it is all going to operate.

The initial amendments mean that those at the forefront of delivering the services should be able to inform the YPLA if they think that the local education authority is not up to the mark. However, I am particularly concerned about the worries expressed by the Association of Colleges. There is no doubt that colleges should have the right to appeal directly to the YPLA; but again we have the overriding question: why the YPLA?

6.30 pm

Baroness Howe of Idlicote: My Lords, I particularly support Amendment 160, although the other amendments reinforce the considerable concern that there is on the matter. The Association of Colleges has informed a number of noble Lords about its concerns, and has done so in a very reasonable and tolerant way, particularly with regard to Amendment 160. It says that some local education authorities will be able to cope with all this, and will not have the problems that we anticipate in a number of other authorities. However, the association's point is that if something goes wrong, there will be a need for a much speedier process. As the noble Baroness, Lady Sharp, pointed out, it will be crucial-especially in these economic times, which will reinforce the problem-that colleges get the funding in time to continue to provide the courses that have been approved. I very much support this. The Association of Colleges has made an excellent case in the detail it has set out, which was delivered to us today and referred to on Monday. It sets out the case beautifully of why the whole thing has become incredibly bureaucratic. Whether or not the whole system is redesigned, we all believe that there is a big challenge to the Government to think through the whole process.

Lord Young of Norwood Green: My Lords, I, too, have enjoyed the journey through history. The YPLA was gaining in powers as the debate went on-a mixture of the Supreme Soviet and the ancien regime. I can reassure the House that the Supreme Soviet disposed of its ancien regime, which solved that problem. Of course we do not want to recreate that monster, or try to reproduce Gosplan, because we know that that would inevitably result in failure.

Amendments 156, 157 and 158 concern the powers of the YPLA to intervene where a local authority is failing in its commissioning duty. I believe that there is agreement on all sides that, while we would expect that in the overwhelming majority of cases local authorities will fulfil their duties effectively, we need a backstop to protect the interests of young people and providers in case any authorities run into difficulties. Sometimes, as we know, local authorities do run into difficulties-a fact that has been mentioned here this evening. It is most appropriate that this power sits with the Young

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People's Learning Agency. The YPLA will be involved already in supporting local authorities and subregional groups through the commissioning process, and so is closer to where decisions are made than the Secretary of State.

To ensure that local authorities have a clear understanding of the circumstances under which they may be subject to intervention, and that there is appropriate oversight at a ministerial level to ensure that no question of a democratic deficit can arise-I know that that concerns some noble Lords-we have built in a range of safeguards governing the use of the power. The YPLA is required by Clause 71 to produce an interventions statement. There must be consultation on this statement with all appropriate bodies, which will include local authorities. The statement must be approved by the Secretary of State. Furthermore, under Clause 65(4), the YPLA must consult the Secretary of State before exercising its power of intervention under Clause 65. It is not a case of some kind of semi-supreme soviet riding roughshod over local authorities on a whim: there must be an interventions statement and, before the YPLA can exercise that power, it must consult the Secretary of State.

On Amendments 159 and 160, we are committed to ensuring that colleges and providers have a route of appeal against decisions that affect them. Details of the process will be included in the national commissioning framework. We are committed to ensuring a process that addresses all concerns in a timely fashion, and I can assure the noble Baroness, Lady Sharp, that we are working with stakeholders, including the Association of Colleges, to ensure that the administrative processes reflect the requirements of all those involved. We anticipate that, while in the first instance appeals will be dealt with as close as possible to where the decision took place-that is, with local authorities, and with suitable escalation routes set out-the YPLA will be aware of any appeals made. It is not the case that the colleges will have no right of access to the YPLA, which will provide a facilitating role, including proportionate support and challenge where appropriate.

There is understandable concern among some people involved in the commissioning process about the level of complexity. I thank the noble Baroness, Lady Sharp, for reminding us that, despite the dire predictions of doom and open warfare from the noble Lord, Lord Baker, colleges currently negotiate with a number of different authorities. We have no desire to make this more difficult. However, to ensure that there is timely agreement on budgets-something that understandably concerns the noble Baroness, Lady Sharp-we are committed to issuing figures to providers by the end of March. We are committed to setting budgets by 31 March each year. While the timing of the new system is still being consulted on with partners, nothing suggests that the 31 March deadline cannot be met.

While it is true that there are seven stages-I thought that we were going through the Creation as the noble Baroness recounted them-a number of those processes will be conducted in parallel.

I have already addressed the concern of the noble Baroness, Lady Sharp, about whether colleges can get information from the YPLA if they are not getting it

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from their local authority. The answer is that they can. Colleges are the source of the data that the YPLA will use to inform the local authority commissioning plans, so they will have access to them.

I hope that I have given sufficient assurances. I cannot confirm the suggestion of the noble Lord, Lord Hunt, that I was the author of all of this-I am far too modest to claim that. However, as part of the supporting cast, I support the proposals. We have endeavoured to satisfy the concerns expressed by the noble Baroness, Lady Sharp. I hope that, on the basis of these assurances, she will withdraw the amendment.

Baroness Sharp of Guildford: My Lords, I thank the Minister for his reply, but, if I may say so, in both cases he misses the point. The key issue expressed in the first four amendments is not that there is any objection to the fact that there may be an intervention process-we recognise that there must be a fallback position and are not objecting to Clause 65 as such. What the amendments are saying is that an elected authority with the power of the electorate behind it is the appropriate one. There are many procedures for consultation with the Secretary of State-you must issue an intervention statement and so forth-so it is right that the Secretary of State, who has the legitimacy of being elected, issues a directive to an elected authority. The YPLA is just an appointed authority-this is the point. The Minister's answer does not address that. It is a minor thing. The YPLA has to go to the Secretary of State and justify issuing a directive. The Secretary of State has to say, "Okay, you can issue a directive", so we might as well have the Secretary of State issuing the directive. It is a matter of constitutional legitimacy, not a question of whether or not there should be intervention.

In relation to the colleges, again it seems that they seek to cut through the bureaucracy. There may be occasions when local authorities miscalculate the figures, do not commission enough provision; or when there is genuine disagreement about funding. Colleges will then have to go through the normal local government complaints procedures if they wish to appeal against decisions. As we know, such procedures can be lengthy and bureaucratic, and it is important that funding is in place for September. The Minister says that the Government are committed to the budget being set by 31 March. The LSC is also committed to that, but the budget is often not in place by 31 July. How can you guarantee, when you have this complicated procedure, that your budget can get set?

This is a mild amendment. Having read Martin Doel's letter I am surprised at how mild it is. All it asks is to enable colleges to talk directly to the YPLA to sort out an issue. I shall go away and contemplate the Minister's totally inadequate answers.

Lord Elton: If the Government are minded to have a right of appeal, why do they object to putting it in the Bill but wish to leave it to the national commissioning framework? The other thing that puzzles me is: in the sequential process described by the noble Baroness of A having to tell B, having to discuss with C, having to tell D and having to discuss with E, how can those stages be carried out in parallel?

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Lord Young of Norwood Green: I regret that the noble Baroness felt that my answer was totally inadequate, but I believe that it addressed the concern. Perhaps it hinges on the question of requiring the YPLA to produce an intervention statement. There has to be consultation with all the appropriate bodies on the statement. I thought that that would be welcome. After all, the noble Baroness complained about the overweening power of the YPLA, and that consultation on the statement should include local authorities. The intervention statement has to be approved by the Secretary of State. We are setting the backdrop, which is important.

The noble Baroness, Lady Sharp, was concerned that I had indicated that somehow the YPLA must consult the Secretary of State before exercising its powers of intervention and that that was merely some perfunctory process. Clearly it is appropriate that the YPLA should make the first assessment on whether intervention is necessary as it is closer to what is going on. But consulting the Secretary of State is certainly not a perfunctory process before it can exercise its powers of intervention. I hoped to convey that it is an important part of the process, not just a matter of, "We are consulting and expect you to agree". We believe that we have involved the Secretary of State in the important decision. The noble Baroness is right to stress the importance of involving elected rather than appointed representatives.

Lord Hunt of Wirral: I am finding it very difficult to understand the Minister's argument. Amendment 156 merely rewrites subsection (2) so that instead of saying that the "YPLA may give directions", it proposes that the Secretary of State, on a recommendation from the YPLA, may give directions. I am not sure why the noble Baroness, the Minister, is objecting to that. The Minister seems to be saying that it is right that an elected official should make the decision, but under the clause it is not the Secretary of State who makes the decision. It states:

"The YPLA may give directions".

If the Minister were to address that point we may make a little more progress.

6.45 pm

Lord Young of Norwood Green: Apart from the worrying change of gender that I achieved during that contribution, I never felt a thing. I did something similar to the noble Lord, Lord Addington, last night, so it may be something in the water.

We think that we have the balance right but we want to address the concerns. We will reflect on the point that has been made as I hate being described as totally inadequate. The noble Lord, Lord Elton, raised two points. We believe that the detail of the process is appropriate for the national commissioning framework. In relation to his second point on the stages, I am assured that some of the processes will take place in parallel. Rather than trying to explain the parallel process we shall include it when we write to noble Lords. We have to address the genuine concerns. We do not want a process that is overcomplicated or one in which authorities cannot meet the deadlines, with

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the impact that that will have on colleges. We have to bottom it out, and when we write to noble Lords, we hope to give some reassurance on the nature of the process which will not reflect Gosplan or even the Ancien Regime. With those assurances, I hope that the noble Baroness will withdraw the amendment.

Viscount Eccles: I shall try to be helpful. I shall speak about directions several times in subsequent amendments. Directions raise constitutional issues; they are not issues of process only. Directions are not subject to any parliamentary procedure, and when given people must comply. There is no room for manoeuvre and directions classically are not the subject of negotiation. If the Bill team, with whom I have had exchanges about directions, were to look at Craies and Bennion for the constitutional position of directions, they will find that they have been used for administrative matters, such as Treasury accounting and other matters of that sort, and as a power of last resort, which the Minister referred to. But it has to be last resort, and not in the middle of a normal set of transactions if we are to stay somewhere near the constitutional precedent.

It would be interesting to have a series of precedents about non-departmental public bodies having the right to give directions with which local authorities must comply, but I am not aware of such precedents, and what is included in the Bill is very unusual if not itself a precedent.

Baroness Sharp of Guildford: I am grateful to the Minister for being prepared to take away this first batch of amendments. It is an issue of constitutional legitimacy and not a question of objecting to the procedures. We can ponder on these things. It strikes me that they are mild amendments. On Amendment 160, will the Minister reflect on whether we need some means in which a college can try to short-circuit what have been long-winded procedures of one sort or another?

As I said, we will reflect. The Minister does not need to write to us further about the procedures. We have had masses of paper about how the YPLA will operate and we do not need the Bill team to write us yet another set of letters. We will ponder on it further, because the AOC is legitimately concerned. With that, I beg leave to withdraw the amendment.

Amendment 156 withdrawn.

Amendments 157 to 160 not moved.

Clause 65 agreed.

Clauses 66 to 69 agreed.

Amendment 161 not moved.

Clause 70 : Guidance by YPLA

Amendments 161A and 161B not moved.

Clause 70 agreed.

Clauses 71 and 72 agreed.

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Clause 73 : Directions by Secretary of State

Debate on whether Clause 73 should stand part of the Bill.

Lord Lucas: My Lords, I want to raise a small question about the interpretation of Clause 73(4). There is a very helpful section in the guidance notes, which state:

"Under subsection (4)directions under this clause may not relate to the funding of activities carried on by particular individuals or bodies. For example, the Secretary of State could not require the YPLA to fund a particular provider to deliver a particular course in respect of a young person".

That is understood, but the subsection itself concludes,

so my question is: where does that place the boundary? Clearly, a direction to give more money to Hills Road Sixth Form College would be prohibited, but is a direction to give more money to sixth-form colleges generally prohibited? If that is allowed, is a requirement to give more money to sixth-form colleges in Cambridge allowed? If that is allowed, what about giving more money to sixth-form colleges in Winchester, of which there is only one? Then the Secretary of State could give a direction that goes against the subsection. The logic of the subsection seems to flow ever outwards, so that there is no limit to the prohibition that it places on the Secretary of State in giving directions, unless he directs something that has no implications for any class of providers. It is not only individual providers or individuals who are referred to, he cannot give a direction that relates to a class. For instance, he cannot say that more money should be provided to support the international baccalaureate, because that is, in a way, designating a set of colleges and therefore falls foul of the subsection. It is a technical question: where does the boundary lie? Under the clause, where is the boundary between what the Secretary of State is allowed to do and what he is not?

Lord Elton: I put the question in quite a different light. It concerns not different classes of provision, but different classes of recipient. The question is whether people have to achieve a certain age before they could study a subject. It may be intended to eliminate a particular individual, but it appears to limit any general direction such as that.

Lord Lucas: But, my Lords, I think that paragraph 59 of the notes covers the corporate as well as the individual use of person.

Lord Elton: It could do.

Lord Young of Norwood Green: My Lords, the clause gives the Secretary of State powers to direct the YPLA. He may give the YPLA directions containing objectives at any time when it has either failed to discharge a duty imposed under this or any other Act or has acted or proposes to act unreasonably with respect to the performance of any of its functions. He may give it other directions about its performance. In giving directions, the Secretary of State may set time limits within which they are to be complied. Directions may also relate to the management of the YPLA.

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Directions may not relate to the funding of activities carried on by individuals or individual bodies, so the Secretary of State cannot require the YPLA to fund a particular provider to deliver a particular course in respect of a young person. That is to ensure that the YPLA can retain responsibility and accountability for individual funding decisions, without influence from the Secretary of State. The clause is essential to enable the Secretary of State to exercise an appropriate level of control over the YPLA, as one of his agencies-surely an important point-and is a consistent provision across many NDPBs.

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