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I want to be clear on the critical point of what might trigger an intervention by a local authority in a college. As with the Learning and Skills Council now, local authorities can intervene only on the grounds currently set out in Section 56A(2) of the Further and Higher Education Act 1992. These include mismanagement by the governing body, failure to

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carry out a statutory duty, acting unreasonably or underperformance of the college. Those are quite significant triggers. The local authority will have to notify the YPLA and the Secretary of State of the decision to intervene and the grounds for intervention and then inform the college. Just to be clear, we expect intervention to be proportionate and to follow reasoned triggers-it is helpful, perhaps, to put these on the record-such as underperformance where there has been serious misuse of public funds, where there have been previous attempts to intervene that have failed, where there has been fraud and where there have been significant failures in management that would put learners' health and safety at risk. So these are very significant triggers.

Lord Elton: The noble Baroness said that the local authority would have to report its intervention to the Secretary of State. Will the Secretary of State then have any role other than to hear what it says? Will he have any power to change the course of events, or will he have powers merely to advise?

Baroness Morgan of Drefelin: I may get some inspiration on the point made by the noble Lord, Lord Elton, in a moment. I will do my best to answer him fully. I would hope that there is a point in reporting something to the Secretary of State; otherwise, why would we be expecting local authorities to do it? If there is no point then I, too, would question that. Having been clear that intervention from a local authority should be triggered only-

Lord Lucas: Might I come back briefly on that point and ask the noble Baroness a question? New Section 56E(2)(b) refers to a situation in which the,

"governing body have failed to discharge any duty imposed on them by or for the purposes of any Act".

Where is the sense of proportion in that? Is intervention not triggered by any failure, however minor? Myriad Acts apply to the governing bodies of schools.

Baroness Morgan of Drefelin: I am trying to clarify that, under Section 56A(2) of the 1992 Act, the grounds for intervention that exist currently for the Learning and Skills Council are the same as they will be for local authorities in the future. Those include mismanagement by the governing body, failure to carry out a statutory duty, the college acting unreasonably or underperformance of the college. I am advised that local authorities will have to act proportionately in response to a breach.

The noble Lord, Lord Elton, asked about notifying the Secretary of State. The local authority will have to notify the YPLA and the Secretary of State of the decision to intervene and the grounds for that and then inform the college.

Lord Elton: My question was: what happens next? Can the Secretary of State then say, "No, you can't do this"?

Baroness Morgan of Drefelin: That is what I am asking, too, my Lords. I am afraid that I have not received a very helpful note.

If the House will indulge me, I should like to continue for a moment. On the whole question of a duty to "have regard to", of course the noble Lord,

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Lord Lucas, is right to say that such a duty in one part of the Bill is the same as in another. I was very clear about the fact that such a duty is not the same as "must". However-the noble Baroness, Lady Howe, asked about this-if we accepted the amendment tabled by the noble Lord, Lord Lucas, we would have an incredibly rigid set of requirements, which would make it difficult to take into account local variations. Perhaps I may deal with this at some length, for which I apologise.

I am advised that a duty to have regard to guidance is the standard formulation throughout education law, balancing a statutory duty to take the guidance into account with the flexibility for those implementing policies to take their individual and local circumstances into account when exercising functions. I know that the noble Lord, Lord Lucas, is concerned about that. The one exception to this in education law relates to the schools admissions code, with which LEAs and school governing bodies must strictly act in accordance. The duty was changed by the Education and Inspections Act 2006. Noble Lords will be interested to learn more detail about that. It enables certain important matters to be given statutory force. For example, governing bodies and local education authorities are prohibited from taking children's or parents' behaviour into account when considering whether to offer a school place. There is a detailed set of circumstances. Therefore, Parliament decided that a duty to act in accordance was necessary in order to be specific about admissions policies.

The intervention policy of the YPLA-and currently that of the Learning and Skills Council-is not of that order of specificity. It will deal with the processes and triggers for local authorities to use and for governing bodies, clerks and senior managers to understand. As with the Learning and Skills Council, we intend that the YPLA will set out in its guidance a public and transparent policy statement that is kept under review. That guidance will be consulted on before it is published.

I return to the question asked by the noble Lord, Lord Elton: what will the Secretary of State do when he is notified of a potential intervention? The Secretary of State would consider the case and direct the YPLA, if necessary, under his powers under Clause 75, but would do that on a case-by-case basis.

Lord Elton: The local authority, not the YPLA, is reporting this, so my question is what the control is on the local authority. Does the YPLA transmit the embargo placed by the Secretary of State or what?

Baroness Morgan of Drefelin: My Lords, I would expect that to be the case; otherwise, why do we have the power under Clause 75? I am advised that that is the case.

Perhaps I can help the House by summing up and sitting down; that might be the useful thing to do at this point. We listened to the views expressed in Committee and have tabled government amendments that will require local authorities and the YPLA to consult the governing body of a sixth-form college before exercising the powers to appoint governors. That is extremely important. I believe that local authorities and sixth-form

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colleges have been working closely together in anticipation of the change, which is, as I said in Committee, widely supported. There are strong safeguards in place. In the extremely unlikely case, which we would want to avoid, where intervention powers were used, the strong safeguards set out in the Bill should give sixth-form colleges the comfort that they seek. I hope that the noble Lord, Lord Lucas, will not press his amendment and that noble Lords can support the government amendments.

Amendment 139 agreed.

Schedule 8 : Sixth form college sector

Amendments 140 and 141

Moved by Baroness Morgan of Drefelin

140: Schedule 8, page 200, line 23, at end insert-

"(2A) Before exercising the power conferred by subsection (1) in relation to a governing body, the responsible local education authority must consult the governing body."

141: Schedule 8, page 200, line 27, 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"

Amendments 140 and 141 agreed.

Amendment 142

Tabled by Lord Lucas

142: Schedule 8, page 201, line 11, leave out "have regard to" and insert "act in accordance with"

Lord Lucas: My Lords, I was considerably comforted by what the noble Baroness said about the proposed new subsection having to be subject to proportionality. I shall accept that comfort but I would be enormously grateful if she would write and tell me where that proportionality comes from.

Amendment 142 not moved.

Amendments 143 and 144

Moved by Baroness Morgan of Drefelin

143: Schedule 8, page 202, line 34, at end insert-

"(2A) Before exercising the power conferred by subsection (1) in relation to a governing body, the YPLA must consult the governing body."

144: Schedule 8, page 202, line 38, 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"

Amendments 143 and 144 agreed.

Schedule 9 : The Office of Qualifications and Examinations Regulation

Amendment 145

Moved by Baroness Morgan of Drefelin

145: Schedule 9, page 205, line 24, at end insert-

"(1A) The person appointed by Her Majesty to chair Ofqual is to be known as the Chief Regulator of Qualifications and Examinations ("the Chief Regulator")."

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Baroness Morgan of Drefelin: I shall also speak to the other amendments standing in my name. I have been delighted, but not surprised at the level of support from all sides of the House for the establishment of an independent qualifications regulator. The Bill provides for Ofqual to be a robust, independent regulator. It will enable Ofqual to ensure that standards of qualifications and assessments are maintained. Like Ofsted, it will report to Parliament, not Ministers. It has a critical role to play in developing and improving the qualifications that are central to the success of education and training in this country. It will improve confidence in those qualifications-because confidence is the currency of qualifications. That will be good, above all, for children and learners. Their achievements will be properly recognised and valued.

We shall start by looking at Schedule 9 and Ofqual's governance. There has understandably been a lot of interest in governance in parliamentary debates. We need to make sure that the process for appointing members of Ofqual reinforces its independence. We have therefore laid two further sets of amendments to put this independence beyond doubt. First, it will now be for Ofqual rather than the Secretary of State to choose the deputy chair from among its members-members of the board. Ofqual will also be able to remove the deputy from office.

Secondly, the Secretary of State will now be required to consult the chief regulator before appointing or dismissing a member of Ofqual. This also responds to the points made in Committee about the need for the chief regulator to have a formal role in appointing Ofqual members. There are also provisions allowing for a situation where the chief regulator or the deputy chair is unable to be consulted. Those amendments are rather long and detailed, but we are advised that the safeguards are necessary. There are also some consequential, tidying-up amendments to make Schedule 9 easier to read.

5.15 pm

Let me move on to Amendment 164, tabled by the noble Lord, Lord Lucas, and to the other amendments. I am committed, and said so in Committee, to publishing any directions made to Ofqual under Clause 128 because we would risk undermining confidence if the Secretary of State were making directions in secret. I do not believe that it is necessary for this provision to be in the Bill, but I give an absolute commitment that this is going to happen.

On Amendment 150, tabled by the noble Baroness, Lady Verma, and the noble Lord, Lord De Mauley, of course it is important that members of Ofqual should not be subject to a conflict of interest. Noble Lords opposite are rightly concerned about that. It would be counter to the strict requirements of the Treasury, the Cabinet Office and the Commissioner for Public Appointments. In particular, no one with a direct and current connection with an awarding body could ever be appointed to Ofqual. However, almost anyone who has something to contribute to Ofqual, who has an interest in or experience relevant to Ofqual's work, could be regarded as having some conflict of interest, if we take it to extremes. It was suggested in Committee in the other place that a head teacher, for example,

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might be so regarded if the performance of their school were measured by the qualifications that Ofqual regulates. I do not agree with that view. We need to have one or two head teachers as members of Ofqual to bring direct and current experience of qualifications delivery. Head teachers, like all of us, need a robust system in which standards are maintained and confidence is high. We do not, however, need too many head teachers in Ofqual. We must make sure that Ofqual has a balanced membership and a range of perspectives.

I move on to Amendment 155 and the concerns of the noble Baroness, Lady Walmsley, about the appointment of the chief executive. The Secretary of State's approval of a chief executive, which is normal for Civil Service posts at this level, must be in line with the Civil Service recruitment code. I hope that that will reassure noble Lords. It would be unusual for a parliamentary committee to report on something as detailed as the appointment of a position in this way, or on the terms and conditions of a particular civil servant, but should it choose to do so, I would expect that the Secretary of State would want to take its views into account. I am not sure that it is necessary to put this in the Bill.

On the appointment of the first chief executive, I am happy to repeat the commitment I made in Committee that we will work with interim Ofqual over the appointment of the first-interim-chief executive of Ofqual. Thereafter Ofqual will appoint its own chief executives, so I hope the House will feel that this amendment is not necessary. I hope that I have given the House the comfort that it is looking for, and I beg to move.

Lord De Mauley: We now begin discussions about Ofqual and I have no doubt that sighs of relief are being heaved around the Chamber, not only because it means we are about halfway through Report stage, but also, much more importantly, because of the large number of government amendments which have taken on board certain of the concerns expressed in Committee by a large number of your Lordships. I am afraid that we cannot join in, however, with all the expressions of relief, because we remain concerned about the provisions being made for those on the board of Ofqual. The Government appear to be advocating independence. They have decided that they no longer believe it necessary for the deputy chairman to be appointed by the Secretary of State, or for the Secretary of State to have the power to dismiss him. Instead, they now seem to have decided that Ofqual should retain this power. This is despite what we took to be very clear assurances to the contrary expressed in Committee. The Minister said that people should not be nervous that a board was appointed by the Secretary of State because a board appointed by the Secretary of State was,

"entirely consistent with a reputation for fierce independence".-[Official Report, 15/10/09; col. 377.]

She said that it would be regulated by the Commissioner for Public Appointments and the appointees would be in no way answerable to the Secretary of State. Perhaps since then she has had a change of heart.

We agree that Ofqual needs to be independent. That is the reason for our Amendment 150 which would ensure that a member of the Ofqual board cannot have a financial or occupational interest that

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would constitute a conflict of interest with Ofqual. Despite what the Minister said a moment ago, we still believe that it would not be helpful to have serving on that board anyone with any sort of conflict of interest with the objectives of that regulator. Surely we should ensure that the board of Ofqual is free of those currently involved, by occupation or financially, in education. We suggest that we should bend over backwards to avoid any suggestion of a conflict of interest in the regulation of standards. Instead, it should be composed of those with the necessary expertise to help form a rigorous and effective regulator. We cannot believe that our amendment would mean that such people were impossible to find. Katherine Tattersall, the chairman of Ofqual, wrote in her letter to Mr Chope and Mrs Humble that,

"as a regulator of qualifications in England, I can assure you that I am quite clear about the importance of maintaining standards over time and across awarding bodies so that learners and the public can have confidence in the integrity of the qualifications system".

The Minister also referred to the importance of confidence in the system when she moved her amendment. In order to achieve this objective, we believe that it is necessary to have a board composed of people who cannot have or be thought to have in any way a vested interest in creating the perception that standards have risen regardless of the facts.

We are pleased to note that in Committee we received support for the principle behind this amendment. The noble Lord, Lord Sutherland, said that he fully supported the emphasis behind Amendment 220A-as it then was-but expressed reservations that it might be difficult to apply. The Minister said:

"It is important that members of Ofqual should not be subject to conflicts of interest",

and that,

"it would clearly be inappropriate to appoint to Ofqual anyone with a direct and current connection with an awarding body which Ofqual might regulate".-[Official Report, 15/10/09; col. 378.]

I heard what she said today on this.

We acknowledge that there may be some technical difficulties with our amendment. There have also been expressions of concern that it may preclude those with expertise in assessments and academia. That is not the intention. We wish to exclude only those who have a current vested interest. They should have no reputational or other interest in demonstrating that the United Kingdom's examination system has maintained standards over the years. In the quest for independent regulation, this seems only sensible and necessary.

We cannot express much support for the government amendments in this group or for Amendment 154, tabled by the noble Baroness, Lady Walmsley. I am interested to hear the Government's response on Amendment 155. Amendment 164 was tabled by my noble friend Lord Lucas and appears to us to be very sensible. We may have had some disagreements about the role of the Secretary of State with regard to Ofqual, but we are in agreement on this. It is important that government policy and directives that are sent to Ofqual with the purpose of direction should be available and published. This will add to the transparent nature of Ofqual. The body has an important function to

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fulfil. It must regulate standards but, in consequence, should reassure the public that standards are being upheld and are improving. Any published document of government policy that Ofqual has had to take into account should help to ensure that trust is maintained between the public and the regulator.

Baroness Walmsley: My Lords, this group contains Amendments 154 and 155, which are tabled in my name. I shall speak to them in a moment. First, I welcome government Amendments 146, 148 and 152, which were laid at our instigation. Amendments 146 and 152 relate to the appointment or removal of the deputy chair, and we are delighted that the Government have accepted that this person should be elected or removed by the members of Ofqual rather than by the Secretary of State. This goes a small way towards reducing the power of the Secretary of State over Ofqual and thereby increases Ofqual's independence.

Government Amendments 148 and 153 concern the Secretary of State consulting with the chair or deputy before appointing ordinary members. Again, that consultation is at our instigation and we welcome it. However-here comes the but-we do not like the last part of each of these amendments, which enable the Secretary of State to appoint or remove a person without consultation if he or she thinks that it is "not practicable" to consult. These appointments usually take weeks or even months and the idea that it would not be practicable to consult during that period is ridiculous. The Government say that this paragraph is only there to take care of rare situations where perhaps both the chair and the deputy are ill or have been killed in an accident. In these situations, the Secretary of State will deal with the matter without legislation.

The Lord Chancellor endorses the appointment of lots of people, but the statutes are not full of clauses about what happens if he cannot consult or if he himself lands under a bus. It is over the top to legislate for a highly unlikely occurrence such as this. The problem is that it makes me suspect that the Government want it there to allow the Secretary of State to appoint without consulting if he feels like it. If the amendments are carried, I will seek some means or another of removing those paragraphs at a later stage.

I am afraid that we do not support the Opposition Benches on Amendment 150 because we have confidence in the fact that the public appointments procedure is now moving in the right direction and would ensure that nothing inappropriate happens in relation to conflicts of interest.

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