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These amendments would introduce a sixth objective into Clause 125(1), that of promoting equality standards. Clause 125(1) currently contains five different objectives: qualification standards, assessment standards, public confidence, awareness and efficiency. However, the principle of equality is not there. Examinations and qualifications are often designed with little thought given to accessibility and inclusivity for disabled students. This results in three main outcomes.

First, there is the use of retrofitted "reasonable adjustments", as they are called, which result in some form of compromise or, often, disadvantage for the candidate. Secondly, there is the creation of a list of disallowed reasonable adjustments. For example, if a blind student sits an English exam, they are required to be physically able to read the text. A reader or voice software is not acceptable. If the text is in Braille, it is obviously acceptable. Alternatively, a disabled candidate would be exempted from a section of the exam if they could not complete it due to the rigidity of the reasonable adjustments lists. Where exemptions are given, this is indicated on an examination certificate, which is called "certificate indication" and implies that, for example, a blind person cannot read despite having adaptive technology that allows them to do so in real life. This would clearly put a disabled person at a disadvantage with employers.

The Government's central argument is that Ofqual will be covered by the equality duty and will have to produce an equality scheme in accordance with work going on in the Equality Bill. They also argue that adding this objective will not substantially add to the Bill or give any extra meaning to the regulator. The objectives of Ofqual include a public confidence objective, which we have been talking about at length during the latest batch of amendments. Maintaining public confidence has been the root cause of, and main justification for, discriminatory approaches to examination and assessment. We are concerned that Ofqual will have to give primary consideration to this objective, as outlined in the primary legislation that creates the organisation, and then give secondary consideration to its duties under the Equality Bill.

The Government's argument that an equality objective is unnecessary is based on the fact that the Equality Bill would require exam boards to make reasonable adjustments. The RNIB believes that this argument lacks strength, especially given that the Special Educational Needs and Disability Act 2001 has been in place for some time now and examination boards still fail to adjust. It could be easily argued that the regulator has as much responsibility to ensure that qualifications and assessments are of a decent standard and that the public are aware of, and have confidence in, exams, and delivers all of this while providing good value for money without having specific objectives. Otherwise, why have a regulator?

The Government's insistence at not having an equality objective while maintaining a specific "public confidence objective" is worrying, especially in light of the way in which public confidence-in the form of maintaining standards and not dumbing down-has been used to justify not reasonably adjusting exams and assessments for disabled learners. I beg to move.

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5 pm

Lord Elton: My Lords, I would just like to interpose two points. First, I want it to be quite clear that the equality that is sought is equality of opportunity and not equality of outcome. That must be obvious. Secondly, I would not subscribe to anything remotely like this until I knew what was finally going to be in the Equality Bill, which is importing entirely new implications, many of which are quite hostile to the way of life that I think we need.

Lord Addington: My Lords, I am afraid that this is an amendment where I am inspired to become involved by my noble colleague's speech. Once again, most of the objectives would seem traditionally to have been covered by best practice. Could the Minister give us an assurance that the reasonable adjustments of the DDA would be possible without this insertion into the Bill? The idea of saying "You cannot read", and interpreting reading as looking at a piece of paper, to somebody who is blind and takes communication from a series of symbols-ie bumps-is absolutely absurd, to be perfectly honest. They are reading another way of expressing English-not from a visual impression, but from a three-dimensional one. I suggest that looking at the concerns here would be very interesting. I hope that we get a good answer to this because it suggests that the Bill is missing the best practice of years of previous legislation.

Baroness Garden of Frognal: I put my name to the amendment, but my noble friend Lady Sharp regularly supports the amendments on disability that the noble Lord, Lord Low, puts forward. I fully support her words. I add one thing: having worked for an awarding body-City and Guilds-for 20 years, I know that the awarding bodies always made efforts to take advice from disability groups, whether they were people who had expertise in deafness, blindness or whatever the other disability was. Of course, the overriding principle of the qualification was to maintain a standard that was set primarily for able-bodied people, so the addition of equality to these criteria for Ofqual would be welcome.

Baroness Howe of Idlicote: My Lords, I would certainly like to support the amendment. Whether you object to the Equality Bill or not, there will be plenty of time to look at it and change it in this House. If it becomes law, in whatever form, it is clearly sensible that it is observed, regardless. As the noble Baroness said in her introduction, there are all these other objectives. Public confidence is, above all, the right one to pick, but they are all relevant here. There is absolutely no reason, if all the other objectives are in the Bill, for equality not to be. I strongly support the amendment.

Baroness Verma: My Lords, we recognise the need to make sure that regulated qualifications are accessible to people with very different needs and requirements. However, we acknowledge that there are difficulties with extending the scope and remit of qualifications to ensure that all are included despite their varied needs, capabilities and desires. The potential problems surrounding this serve further to underline the importance of this amendment.

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Baroness Morgan of Drefelin: My Lords, this has been a very helpful debate. It may have been short, but in no way does that indicate the level of importance that the Committee attaches to these issues. I cannot stress enough how sympathetic I am to the thinking behind these provisions. Equality and inclusiveness will be important to the work of the QCDA and Ofqual, as for all other public bodies.

On Amendments 249, 250 and 254-I hope I have mentioned the correct amendments as my list is slightly muddled-as your Lordships well know, the Equality Bill is now being considered in another place. As the noble Baroness, Lady Sharp, who spoke very eloquently on behalf of the noble Lord, Lord Low, will be aware, we will consider that Bill in the next Session, as I believe that it is a carry-over Bill. That Bill updates the legal framework for equality which has developed piecemeal over the past 40 years. I strongly welcome that Bill, which I think this House will enjoy looking at forensically.

This amendment gives me the opportunity to say that one of the major new aspects of the Equality Bill-I do not wish to pre-empt its arrival-is the introduction of a single public sector equality duty, as we have heard. This will build on the current race, disability and gender equality duties. These general duties will require all public authorities, including the QCDA and Ofqual-once they are established-to have regard to eliminating discrimination, harassment and victimisation, advancing equality of opportunity-the noble Lord, Lord Elton, pointed to that-and fostering good relations between people in disadvantaged groups. We are consulting on the exact nature of the specific public duties. I believe that these amendments are unnecessary, as both bodies will have specific duties under the Equality Bill. Moreover, the amendments, if accepted, could be potentially damaging. If Parliament considered it necessary to make explicit the equality objectives of these two bodies, it could be taken to imply that the proposed Equality Bill provisions were somehow inadequate for those bodies which did not have such specific objectives. That is a rather dry explanation but it is important to make that point. However, that is not the case, and I do not believe that noble Lords would want to imply that.

I believe that the noble Baroness, Lady Sharp, questioned the appropriateness of the public confidence objective when there is no equality objective. Public confidence is central to an effective qualifications system. If people doubt the value of qualifications, they will have limited value and students with disabilities, as much as other students, will suffer as a result. Of course, public confidence must be well founded. Two things are important here and Ofqual must do both of them. It must ensure that standards are maintained, including, where appropriate, ensuring that adjustments are made for people with disabilities, and it must demonstrate to people that standards have been maintained. One without the other would be inadequate.

The noble Baroness, Lady Sharp, asked if there was a conflict between the public confidence objective and a duty in the Equality Bill. I am advised-I thought that this was the case-that, to put it in colloquial terms, a duty will trump an objective. That is a strong

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line. The noble Lord, Lord Addington, asked whether the objectives of the DDA could be met without this amendment. The DDA already applies to qualifications, as the noble Lord would expect. I would be happy to discuss this matter further with noble Lords before Report. I or a ministerial colleague would welcome the opportunity to discuss with the noble Lord, Lord Low, the issues that the noble Baroness has raised. I know that the QCA and the interim Ofqual have worked closely on these issues with disability groups, including the RNIB. I am sure that we can offer more reassurance. I value the opportunity to discuss these important issues in Committee.

Baroness Sharp of Guildford: I am extremely grateful to the Minister for her reply and to all other noble Lords who participated in this short debate. To answer the noble Lord, Lord Elton, it is equality of opportunity, not equality of outcome, that one sees as sensible.

On the Equality Bill, there are already two statutes, in the Special Educational Needs and Disability Act and in the Disability Discrimination Act, which invoke the organisation setting examinations to be disability friendly and to take account of equality of opportunity. As my noble friend Lady Garden indicated, best practice does exactly that. The problem is that what is best practice for some organisations is not adhered to by others, and it is very important that all organisations adhere to those standards.

As the Minister recognised, there is some worry on the part of disability organisations that by making public confidence an objective in the Bill, the objective of equality will be seen to fade beside it. The Minister's offer of carrying forward discussions is a very good one, and, if I may, I will accept it on behalf of the organisation and on behalf of the noble Lord, Lord Low. I beg leave to withdraw the amendment.

Amendment 228 withdrawn.

Amendments 229 to 231 not moved.

Amendment 232 had been withdrawn from the Marshalled List.

Amendment 232A not moved.

Amendment 233

Moved by Baroness Walmsley

233: Clause 125, page 76, line 28, leave out subsection (6) and insert-

"(6) The efficiency objective is to secure that the regulated qualifications system operates efficiently and, in particular, that any sums payable to a body awarding or authenticating a regulated qualification in respect of the award or authentication represent value for money."

Baroness Walmsley: In moving Amendment 233, I shall speak also to Amendments 234, 251 and 251A, which are grouped.

Amendment 233 ensures that the work of Ofqual in regulating our qualifications system represents value for money. Ofqual will not be able to deliver its aim

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unless it is given the remit of regulating the qualification system as a whole, rather than just the narrow remit of regulating individual providers or individual qualifications. The amendment will mean that it must look at the way in which qualifications are procured by schools and colleges and that it oversees the whole market. That must be in the best interests of learners, because schools and colleges must provide exams that are in their interests.

Amendment 234 adds words at the end of the same subsection to require that Ofqual ensures that payments to awarding bodies are kept within inflation. Certain sectors often claim that their costs are such that above-inflation price increases are sometimes necessary, but I do not think that that will apply here. Schools and colleges should be protected from vast price rises by such an amendment. The AoC has told us that colleges, which currently pay £170 million a year in exam fees, would appreciate clarification on the criteria that will be used to make these judgments. Keeping fees within inflation would follow the approach taken, for example, in the water industry and other privatised utilities. Ofwat sets a limit on price rises for the forthcoming five years. Over what period will Ofqual be expected to do the same, if at all?

Amendment 251 relates to Clause 133, which is about the power of Ofqual to cap fees payable to providers without any limit in the Bill. The amendment requires that Ofqual conducts a proper review of the market before capping fees, to the point where it is satisfied that doing so will remedy or prevent any adverse effects on competition. If Ofqual were to act too often as an economic regulator by the use of this capping power, it might serve to stifle innovation and might drive smaller, specialist providers out of the market. Fee capping should be used as a penalty only where there is proven evidence of market failure.

Amendment 251 inserts an appeal process into the situation whereby Ofqual caps fees. We on these Benches want Ofqual to have real powers, but by not providing the appropriate review and appeal structure for the implementation of those powers capping fees would seem at odds with the desire to establish a regulator with proper accountability. Reference to the Competition Commission, provided for in our Amendment 251A, would provide such a fair and independent appeals process. I beg to move.

5.15 pm

Baroness Perry of Southwark: My Lords, I shall speak to Amendments 248, 249 and 250, which deal with fee capping. I am extremely grateful to the Minister for the time that she and her officials spent talking through this issue with me during the Recess. At the end of our discussions, we pretty well agreed to disagree on the issue. If, as I expect, my amendments are firmly turned down, as a fallback I would be very supportive of the Liberal Democrat amendments, because they at least provide some protection over the powers of fee capping.

Throwing myself against the prison wires, perhaps I could just say why I believe that there is not only no need for Ofqual to have powers of fee capping but that it would be wrong for it to have such powers. It is

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unnecessary because examination bodies are highly competitive commercial organisations; they watch each other like hawks and are very careful to price their qualifications in relation to cost and what they know the market can bear. It is unnecessary also because it would not represent a protection of public money-which I would defend to the death-because the examination bodies are being paid from a capped pool. The money which the schools and colleges have to pay the examination bodies to provide examinations already comes from their capped allocation of income year on year.

The examination experts within each school-the officers have various titles-are extremely knowledgeable. They, too, watch the market very carefully. They are very good at fighting for their students to have the best and most prestigious examinations at the most reasonable prices that the school can afford. In other words, we are describing an absolutely perfect market: the buyers and the sellers are extremely expert and price conscious. Much as I join the Committee in my wholehearted support for the setting up of Ofqual, there is more expertise between the buyers and sellers of examinations than there is in the regulators. It is slightly offensive to suppose that 30-odd semi-civil servants in Coventry would know better than the 2,000 or so examination officers in schools and the several thousand expert employees in the various examination boards and their academic advisers.

I feel strongly about this, but I suspect that I shall be disappointed.

Baroness Verma: My Lords, I take great pleasure in rising to support the amendments of my noble friend Lady Perry and the noble Baroness, Lady Walmsley. Groups such as Edexcel have expressed concerns that while Ofqual's duties should relate to the regulation of the standard of examinations, it should not be Ofqual's role to regulate the market of qualifications. This could have a detrimental impact on the sector. Can the Minister account for why it was decided that Ofqual should also take charge of the pricing of qualifications? Does he not feel that this task would be better dealt with by the market?

The worry is that Ofqual's powers to cap fees have the potential to distort the market by artificially restricting the breadth of qualifications available. Edexcel has expressed concern that by using this economic power, Ofqual has the potential to stifle innovation and to drive smaller and specialist providers out of the market. This would give more control to larger providers and encourage them to concentrate on more popular subjects. Does the Minister agree that if the market is allowed to operate freely, it will create a level playing field for all qualification providers? What is the logic behind allowing Ofqual to place a cap on some providers? It would appear natural that if qualification providers price themselves out of the market, their qualifications will not be taken up by schools and learners.

It is important for learners to have a free choice of qualifications. We acknowledge the difficulties that could arise from qualification bodies that charge too much. Will the Minister inform us of the scale of the problem? Is it sufficient to be a catalyst for a fee-capping power that could alter the state of the market in a way that would damage qualification provision and providers?

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Lord Young of Norwood Green: My Lords, we need qualifications that are delivered efficiently, so the fees relating to those qualifications should represent value for money. That is particularly the case because many fees are paid from the public purse. At a time when all public sector organisations face the challenge of using their resources more efficiently, qualifications and the awarding bodies that offer them cannot be immune from those pressures.

The qualifications system that we have in this country, with independent awarding bodies, promotes choice, innovation and responsiveness. Ideally, it also promotes efficiency and value for money, but we cannot be certain that it will do so in all cases. There may be market failures-for example, with small, specialised qualifications. The market may not be large enough to support competition. The Bill gives Ofqual an explicit efficiency objective and, to give teeth to that objective, it gives Ofqual the power to cap fees. This is a power that many other economic regulators have in markets where there is a potential for a significant market failure.

A fee-capping power is not the only way to deliver efficiency or tackle market failures. Ofqual will need to use other levers to ensure that the market operates as efficiently as possible. However, a capping power is a critical signal of the seriousness of the efficiency objective.

Under the Education Act 1997, the Qualifications and Curriculum Authority has the power to cap fees. However, it is only in the past two to three years that interim Ofqual has started to build up evidence about the efficiency of the system. To enable it to come to a view on whether fees provide value for money, work was started to build evidence to address increasing concern among schools, colleges and employers about fee levels. Ofqual must build on this work as it considers how to achieve its efficiency objective. Before taking a decision to cap fees-if that is what it decides to do-it would need to develop the intelligence to make fine judgments about how to balance the need for market stability and investment with keeping costs reasonable.

The amendment puts a maximum increase in fees into the Bill and would prevent Ofqual from coming to evidence-based judgments of that kind. It could place at risk the delivery of good-quality qualifications by making it hard for awarding bodies to fund the necessary investment. That is why we cannot accept it. It might be said that an increase simply linked to inflation would be acceptable, but it might not be if we felt that reducing costs in an acceptable way was part of increasing efficiency.

The Bill puts in place new safeguards around the use of the fee-capping power. If the regulator now were to impose a cap, the sole avenue of appeal to the awarding body would be to seek a judicial review. In future, there will be three extra hoops for Ofqual to leap through before it can cap fees. First, it will be required under Clause 147 to consult on and publish its fee-capping policy as part of its qualifications regulatory framework. Therefore, it is not a question of Ofqual trying to guess the market in a random way.

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Secondly, if on a particular occasion Ofqual does decide to impose a cap, it has to tell the awarding body of its plans. It also has to allow a period for any representations, so we are not talking about Ofqual, after having looked at evidence, saying to a body in a random or arbitrary manner, "Okay, we've decided you're going to reduce your fees". There will be a process of dialogue; Ofqual will want to hear that body's side of the story. It must also have regard to any such representations.

Thirdly, if Ofqual decides that a fee cap is still appropriate, the awarding body may demand a review of that decision by a suitable independent person and Ofqual cannot do anything until that review has finished.

Therefore, we argue that there are more than sufficient safeguards to ensure that this is a reasonable way to proceed. Of course, as now, an awarding body could always apply for a judicial review of a decision made by Ofqual. If it considered that the regulator had acted unlawfully in exercising this or any other of its powers, substantial protections would strike a fair balance between the rights of the awarding bodies and those of the customer and taxpayer.

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