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Baroness Perry of Southwark: My Lords, this amendment seeks to bring into the work of the YPLA and the SFA a proper arrangement for capital funding. In Committee I brought forward an amendment that would put a permanent committee within the YPLA to deal with capital funding. This amendment is a

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much improved one that would bring together the capital funding of the Skills Funding Agency and the Young People's Learning Agency into the necessity of creating a single capital building strategy.

I do not wish to repeat the arguments that I made in Committee and weary the House with that. Nevertheless it is as well to remind ourselves that capital funding is vital for the growth of this sector and in order to bring to fruition many of the aspirations expressed from time to time in the jungle that the Bill represents. Unless we have a single strategy between the two agencies, it will make life almost impossible for the many institutions that have to deal with both.

The first paragraph of my amendment is an attempt to bring both agencies together in the formulation of a single strategy for England, leaving out the universities. Paragraph 2 would require the chief executive of both agencies to consult local education authorities and the providers of education, which would immediately bring it back down to a local level so that local authorities would have an opportunity to take an overall view of the building needs of the institutions within their authority and the institutions would be able to input their own strategies.

To ensure that everything was kept on an even course, paragraph 3 would require that the strategy, as revised by the consultation with the institutions and the local authorities, should be approved by the Secretary of State and a copy laid before each House of Parliament. The Secretary of State, of course, would be free to engage in dialogue again should she or he so wish in order to ensure that the national strategy could be approved by the two government departments.

I am not arguing for precisely where the clause should be located. It would probably be better slightly earlier on, not after Clause 121, but that is a minor point. However, I commend to the House that we have in the Bill something that deals with a strategy for capital building. It is vital to development, as I have said, it has gone badly wrong in the past and, after the discussion we had in Committee where the concept of having some kind of provision to deal with capital funding received approval from all sides of the House, I am frankly disappointed that the Government have not brought something forward themselves. I beg to move.

Baroness Sharp of Guildford: I give wholehearted support to the amendment of the noble Baroness, Lady Perry. She is quite right that the question of who controls the capital budget has been left floating. The amendment has the great advantage that it sets up the joint committee, brings the two agencies together and provides a structure through which capital funding can be allocated. The mess that the Learning and Skills Council got into, even when there was one body, illustrates how difficult it is to keep control of the capital budget. If two or three agencies are involved with the capital budget, the ease with which it could fall between all those three stools is obvious.

Baroness Howe of Idlicote: My Lords, I support the amendment, which seems to be a very practical way of dealing with an acknowledged problem. I well remember

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our discussions on it in Committee. I hope that the Minister will see the relevance of it. As the noble Baroness said, it may not be in the right place, but the important thing is that it sets up the agency, so I warmly support it.

Lord Elton: My Lords, I support the amendment, which seems practical and workmanlike. I do not doubt that the draftsmen will find many faults as to where it is placed and how it links in, but I hope that the Minister will accept the principle that there must be one tap through which the money comes and one hand on it which turns it in an agreed direction at an agreed time. Otherwise, we will get into the kind of horrendous and expensive muddle that we have seen in the past. This is a simple, non-political, practical plea for seeing that our money is properly spent.

Lord De Mauley: My Lords, when my noble friend Lady Perry raised this issue in Committee, it received strong support from around the Chamber. It is clear that something must be done to ensure that the two agencies work competently and effectively together.

Two major issues are raised here which deserve consideration. The first, as raised with us by the Association of Colleges, is that the Learning and Skills Council has been criticised for its poor handling of the college capital programming and funding for sixth-formers. The Government hope with this Bill to replace the LSC with a series of interacting bodies which they hope will do a better job. In this context, therefore, it is important to consider what could be done to avoid future problems with the college capital funding programmes.

The amendment tabled by my noble friend may well be an appropriate way of addressing the problem. It was suggested in Committee that a committee be formed to oversee capital funding as a single and coherent body. The Minister pointed out that the LSC had been charged with this responsibility and had not managed to oversee it successfully. A single committee structure alone, therefore, was not enough to solve the problem. He said:

"We need to ensure that the YPLA, once it begins operating, has learnt from the problems with FE capital and has devised appropriate arrangements that minimise the risk to their capital resources".

Does he not agree that the amendment tabled by my noble friend might help to solve this problem? It merely asks that the chief executive of the SFA and the YPLA join together to form a single capital buildings strategy. This is more than just the creation of a committee; it asks for the agencies to have learnt from the problems and to work together to create appropriate arrangements which would allow capital funding to operate effectively.

The second concern is to do with the division of responsibility between the YPLA on one hand, which is responsible for the 16 to 19 capital funding, and the SFA on the other, which is responsible for the FE capital fund. The Minister stated that the YPLA will,

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In other words, he, too, is concerned to ensure that the divide between these two agencies does not stop them operating effectively together. In light of this, we look forward to his response.

Lord Young of Norwood Green: My Lords, I thank the noble Baroness, Lady Perry, for bringing this important matter to our attention. I welcome that and hope that she sees what I say as a constructive assessment of the amendment, because there is no gap between us on the problem. It is a question of how we address it. I hope that I shall go a long way towards reassuring her on capital funding and the importance of a coherent approach.

With regard to Amendment 138, I agree that it is critical that the capital investment plans are coherent across areas so that investment decisions for FE capital and 16 to 19 capital are able to support development of the infrastructure necessary to deliver increased participation, the full curriculum and qualification entitlement and the skills required by employers in our changing economy.

However, the setting of overarching strategy is actually the responsibility of the two departments in consultation with the two agencies which in turn will instruct the two respective agencies to implement that strategy. In practice this will be done by the remit letter to the Young People's Learning Agency and the framework agreement between the Skills Funding Agency and the Department for Business, Innovation and Skills. We will require the Young People's Learning Agency and the Skills Funding Agency to work together and with local authorities to ensure that capital funding decisions take account of commissioning plans and regional skills strategies and that providers of post-16 education and training are consulted on the development of those plans.

I appreciate the noble Lord's desire for statutory provision to be made for a single capital strategy and for this to be produced by the two respective bodies, not least by way of addressing previously debated concerns about the future administration of capital programmes and the recognised need for a joint approach between the two new bodies, as identified by the noble Baroness, Lady Perry. However, I do not consider it necessary to enshrine that in the Bill, particularly as the proposed amendment would impinge on the responsibilities of the respective departments for setting strategies. In asking the noble Baroness to consider withdrawing the amendment I will make this further commitment. I am happy to commit that the Government will produce an overarching, single capital strategy for post-16 education and training in England, excluding the higher education sector, and that we will consult both the Young People's Learning Agency and the Skills Funding Agency when doing so.

There are some technical problems with the amendment but I do not want to focus on them. My concern is the same as the noble Baroness's concern: we need a coherent strategy and we need to give an explicit assurance that consultation with both the Young People's Learning Agency and the Skills Funding Agency will be required in deriving this single capital strategy for post-16 education and training in England, excluding the higher education sector.

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Baroness Perry of Southwark: My Lords, I thank the Minister for that reply, which goes a very long way to reassure me that the departments are thinking on similar lines and that there is a real intention to get a single strategy in this way. The amendment, for all its drafting faults, would not have overridden the responsibilities of the two Secretaries of State to be in charge of the strategy. It gives them the right of final approval of the strategies and indeed, on the model that the Minister has just outlined, the two Secretaries of State would have to turn to the two agencies in order to formulate their overarching strategy. I am grateful to the Minister for having come so far along the way and for his assurance of what will be the way things work. In the light of that I beg leave to withdraw the amendment.

Amendment 138 withdrawn.

Schedule 6: Dissolution of the Learning and Skills Council for England: minor and consequential amendments

Amendment 139

Moved by Baroness Morgan of Drefelin

139: Schedule 6, page 181, line 37, leave out "to be treated, on and after that date," and insert ", on and after that date, to be treated for the purposes of subsection (2) of this section"

The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin): My Lords, Amendment 139, 141, 143 and 144 will require local authorities and the YPLA to consult the governing body of a sixth-form college before exercising powers to appoint governors to it. This reflects concerns raised by noble Lords, and in particular the noble Lords opposite, in Committee. I hope the House will agree that it is a sensible safeguard to the exercise of this power.

On Amendment 142, tabled by the noble Lord, Lord Lucas, we do not agree that local authorities will engage in costly and difficult interventions in sixth-form colleges in the way that he suggested in Committee. We do not believe that it would be in their interests to do so or that they would want to do so. Local authorities and sixth-form colleges have been working very closely in anticipation of the change before us. Both the Association of Colleges and the Sixth Form Colleges' Forum have agreed protocols with the local authority sector on how they plan to work together. These protocols include performance management. I hope that that offers the noble Lord some reassurance in dealing with his concerns.

Schedule 8 also contains the safeguard of requiring local authorities to have regard to the YPLA's guidance on sixth-form intervention. This is a strong duty; local authorities cannot simply ignore the YPLA's guidance but must have strong reasons for acting against it, or they will expose themselves to potential judicial review. At the same time, "have regard to" gives the local authority an ability to tailor its response to specific circumstances of a particular sixth-form college. By contrast, the duty to "act in accordance with" in the noble Lord's amendment would force authorities and colleges to go through a rigid, inflexible procedure that may not be appropriate in all circumstances. I

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hope that the noble Lord agrees and that this gives him the reassurance that he seeks on the intentions behind the provision. I hope also that the amendments that the Government have introduced give noble Lords the reassurance that they were looking for.

4.45 pm

Lord Lucas: My Lords, I am grateful for the amendments that the Minister proposes, but to my mind they do not go nearly far enough. The Minister talked about "have regard to". In the briefing provided by her department on Clause 128(6), which looks at "have regard to" from the other point of view-the pressure put on Ofqual by the Secretary of State-her officials quote:

"The phrase 'to have regard to' means take into account. It does not connote slavish obedience or deference on every occasion. It is perfectly possible to have regard to a provision but not to follow that provision in a particular situation".

That is exactly the trouble that I have with this clause.

We are looking for the right balance of power between a local authority and a sixth-form college or further education college. It is in many ways an unequal balance, in that the local education authority has a great deal of influence over funding and the sixth-form college may, as many have in their years of independence, have grown not so much out of as way beyond the local authority in which they happen to be situated. They may provide services that do not accord with what the local authority thinks should be done locally or may provide them in a way that the local authority does not agree with. There are lots of reasons why a local authority might want to bring a sixth-form college to heel and to make it conform more closely to the local authority's view of how education should be provided in its area. I want the sixth-form college to be able to resist that.

What the Government have done in drafting this section of the Bill is to bring over verbatim, or close to verbatim, the arrangements that existed between sixth-form colleges and the LSC. In those circumstances, there was not a great deal to worry about. The LSC did not have an agenda of bending sixth-form colleges to its will, and there was no basis on which it should have done. It was a national body with a national agenda and no reason to get involved in the detailed decisions of an individual sixth-form college, so the triggers that were put in place to allow intervention by a local authority are extraordinarily light. It is anything that the sixth-form college does to transgress any law or regulation.

The department tried to give me comfort on this, by saying that it thought most sixth-form colleges were, at all times, perfectly law-abiding. If even Ministers cannot keep to regulations, how should we expect sixth-form colleges to do it all the time? The complexity does not just apply to educational legislation-which I am sure that they keep a close eye on-but to health and safety, discrimination and other any aspect of national legislation. As soon as the college transgresses in any way, the trigger is tripped and the local authority has the right to intervene. It has not just the right to stand there and say, "Ah, you've got to get yourself in order", but to take over the college, and the barriers

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that have been put in place for that are very slim. Yes, there is a convention between local authorities and sixth-form colleges at their organising bodies' level, but that has no binding effect on local authorities or colleges in any individual case. Yes, there are provisions in administrative law, where I do not pretend to be an expert but, from reading the extensive and helpful advice provided by the noble Baroness's department, those appear to be pretty weak in practice.

This will result in individual cases-not, obviously, in every case, or in most cases-where the local authority will be able to take effective control of a sixth-form college because it has the power to take actual control whenever it wants. That is a very undesirable state of affairs and will lead, over time, to some very undesirable outcomes in the independence of sixth-form colleges and their ability to do the best by their students. I am not comforted by what the noble Baroness has said, and if I receive appropriate comfort from my Front Bench then I shall certainly want to test the opinion of the House.

Baroness Garden of Frognal: My Lords, on these Benches we welcome the Government's amendments in this group, because they ensure greater consultation between local authorities, the YPLA and the governing bodies of sixth-form and further education colleges. Many of the amendments that we have been making in the course of this Bill have been toward simplification and clarity in administration. We hope that these will move in that direction. We certainly have sympathy with the amendment tabled by the noble Lord, Lord Lucas, and note that it has the support of the Association of Colleges, which can see that the amendment would ensure that each local authority uses the same rules of intervention, rather than each interpreting the legislation in a slightly different way. On those grounds, we certainly have sympathy with the noble Lord's amendment and we welcome the Government's amendments.

Lord Elton: My Lords, this is in fact a very big issue: the question of the ultimate independence of places of education from political direction. Those of us who have lived through the last couple of generations will remember times when political parties in local authorities have been very keen to intervene in that way. Therefore, I hope that my noble friends on the Front Bench will give my noble friend Lord Lucas, who is behind me, the comfort that he wants.

Baroness Howe of Idlicote: My Lords, could the Minister explain why she would not be in favour of the proposed wording? Any explanation she can give as to why she prefers the wording that is already there must mean that she is less than concerned that the right amount of attention is given to these bodies. I would be very grateful if, when the Minister replies, she could answer that question,

Lord Hunt of Wirral: My Lords, first, I declare my interests, which are recorded in the Register, in particular as a partner in the national commercial law firm Beachcroft LLP. I do not have much to say in response to the government amendments on sixth-form colleges, other than to thank the Minister very much for taking on board the concerns we expressed in Committee;

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and for coming back to us with what certainly appear to be positive amendments, which address the worries that we expressed on that occasion. We are particularly grateful not only that the Minister has accepted the amendment that requires local authorities to consult sixth-form colleges before appointing any governor to the board, but that-in line with our thinking-the power has also been extended to the YPLA. We welcome the Government's commitment to our intentions here, and are grateful for the fruitful discussions that we have had with the Minister and her team.

However, we now move on to the amendment tabled by my noble friend Lord Lucas. His Amendment 142 seems most appropriate and sensible. I found very interesting not only the arguments that he adduced, which brought us into the real world, but the support that they received from the noble Baroness, Lady Garden, my noble friend Lord Elton and the noble Baroness, Lady Howe of Idlicote. If the YPLA must publish a statement of policy about intervention in sixth-form colleges, which then has to be approved by the Secretary of State, where is the sense in asking the local education authority only to "have regard to" it, rather than "act in accordance with" it?

In her opening remarks, the Minister sought to meet the points that she anticipated would be made by saying that no local authority would engage in costly intervention. It would have to have strong reasons. As my noble friend Lord Lucas said, it is all about the balance of power and the balance of influence. That summarises some very important arguments which were put forward. I assume that most local education authorities will indeed automatically act in accordance with such a statement. I have faith that they will operate in this manner.

Nevertheless, we are dealing here with legislation. Sometimes-I speak with some scars on this-it is just not enough to have faith. If the intention is that local education authorities should comply with the statement, which has, after all, been approved by the Secretary of State and the YPLA, why on earth is it not in the Bill? Does the Minister not accept, as has been pointed out in this short debate, that this would provide more security for sixth-form colleges, while one would not expect it to place further burdens on local education authorities which will be complying with the statement anyway?

5 pm

Baroness Morgan of Drefelin: My Lords, I hope that I can offer some reassurance, although, given the remarks that I have just listened to, I am not sure that I am necessarily going to be able to give all the reassurance that noble Lords are looking for. I will try very hard. I start by thanking the noble Lord, Lord Hunt, for his kind and generous opening remarks and both opposition parties for their constructive engagement with us in what has been a very busy few weeks.

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