Further Education and Training Bill [Lords]

Public Bill Committee, 12 June 2007.

Written evidence to be reported to the House

Peter Atkinson (Conservative, Hexham)

I shall begin with some housekeeping points. I remind the Committee that there is a money resolution in connection with the Bill, copies of which are available on the Table. I also remind Members that adequate notice of amendments should be given. As a general rule, I do not intend to call starred amendments, including any that might be reached during an afternoon sitting. Members can take it as read that they may remove their jackets while I am in the Chair.

Bill Rammell (Labour, Harlow)

I beg to move,

That—

(1) the Committee shall (in addition to its first meting at10.30 a.m. on Tuesday 12th June) meet—

(a) at 4.00 p.m. on Tuesday 12th June;

(b) at 9.00 a.m. and 1.00 p.m. on Thursday 14th June;

(c) at 10.30 a.m. and 4.00 p.m. on Tuesday 19th June;

(d) at 9.00 a.m. and 1.00 p.m. on Thursday 21st June;

(2) the proceedings shall be taken in the following order:Clauses 1 to 13; new Clauses relating to Part 1; new Schedules relating to Part 1; Clauses 14 to 21; new Clauses relating toPart 2; new Schedules relating to Part 2; Clauses 22 and 23; new Clauses relating to Part 3; new Schedules relating to Part 3; Clauses 24 to 27; Schedule 1; Clause 28; Schedule 2; Clauses 29 to 32; remaining new Clauses; remaining new Schedules; remaining proceedings on the Bill;

(3) the proceedings on the Bill shall (so far as not previously concluded) be brought to a conclusion at 4.00 p.m. on Thursday 21st June.

It is a pleasure to be here, Mr. Atkinson, and I look forward to serving under your chairmanship. This is the first Bill since 1992 to focus on further education training, which is important for a sector that is often felt to be neglected and undervalued. The Bill will help us to reform the supply side and to shape up to the skills challenge that Sandy Leitch set out clearly in his recent report. It will also address aspects of the Learning and Skills Act 2000.

The further education sector in this country provides learning opportunities for more than 5 million people a year. Those opportunities are crucial in providing skills for securing productive, sustainable employment, and they promote community and personal development. Sandy Leitch’s report should have cleared out any sense of complacency on the issue.

Although this is a relatively small Bill, it is an important one. It underpins our agenda to transform further education, which we set out in last year’s further education White Paper. The Bill includes the restructuring of the Learning and Skills Council, and it will make the council and the wider further education system more responsive to the needs of learners, potential learners and employers. It will also enable further education institutions to award foundation degrees only and will modernise arrangements for industrial training levies.

I have tabled amendments to make arrangements for improving unsatisfactory further education provision. Those and other matters that are covered in the Bill are important, and I am sure that we will discuss them in great detail. The programme motion proposes that the Committee meets twice today, twice on Thursday and twice on Tuesday and Thursday next week. That gives us a total of eight sittings, which I think is right to cover the Bill’s wide content. The motion was agreed by the Programming Sub-Committee, and I commend it to the Committee.

John Hayes (Conservative, South Holland and The Deepings)

I welcome you to the Chair, Mr. Atkinson. Your perspicacity is matched only by your legendary benevolence, on which we lesser mortals will depend as we consider this important matter.

The Minister has set the scene by describing this as an important Bill. It is certainly an important subject. He referred to the Leitch report, and Opposition Members cannot help but conclude that the Bill would have been more fit for purpose if it had included more of the report. It is curious that the Further Education and Training Bill makes almost no reference to the content of the Leitch report and, indeed, the Government response to it. Having said that, I agree with the Minister that the further education sector is vital—it provides opportunities for people across the country to gain skills, to train and to be educated—and we celebrate the work of further education colleges as, I know, do all Committee members.

The Bill is important in a number of respects, which we shall debate at length. The Opposition want to tease out the unsatisfactory aspects of the Bill and support those that point in the right direction. However, we are disappointed that the Bill does not provide a more fundamental review of the circumstances affecting further education and training, together with a series of recommendations about how they might be improved. The programme provides sufficient time to debate the matters that are before us, and we look forward to doing so in a co-operative but sparky spirit, so that the legislation is scrutinised in an appropriate and thorough way. We support the programme motion.

Sarah Teather (Liberal Democrat, Brent East)

I, too, welcome you to the Chair, Mr. Atkinson. This is the first time that I have had the pleasure of serving under your chairmanship. I am pleased to see the Under-Secretary of State for Education and Skills, the hon. Member for Corby on the Committee and hope that he will not find it too unpleasant an experience. This is a relatively brief Bill and, with the exception of the provisions relating to foundation degrees and intervention powers, it is also relatively uncontroversial, so I suspect that we will be able to deal with it rapidly.

In common with the hon. Member for South Holland and The Deepings, I am disappointed that the Bill does not herald the implementation of the recommendations in the Leitch report, but we assume that we will be back in Committee soon to debate those.

We are happy with the programme motion. If we are all brief and to the point, we should be able to get through this by the end of Thursday. Today, we will seek to probe issues relating to the relationship between local authorities and the Learning and Skills Council, and on Thursday we will express our serious concerns about the proposals regarding intervention and foundation degrees.

Clause 2

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 21, in clause 2, page 2, leave out lines 42 to 48.

We move now to the meat of the Bill, the first part of which deals with changes to the structure of the Learning and Skills Council, in that it proposes that the LSC be regionalised and its local offices come to an end. I know that hon. Members will want to debate the matter at some length, because it was aired on Second Reading in the House and discussed in the other place, where the Bill originated. There are contentious financial, organisational and administrative issues associated with that proposal.

The clause places the LSC under a duty to establish a regional LSC in each area of England specified by the Secretary of State, and to specify functions for those regional councils. Indeed, the regional LSCs will be able to exercise powers and functions outside their areas. This is a probing amendment to draw attention to that provision, because it is not clear what is meant by it. What kind of functions will be exercised outside the areas of the regional LSCs? In what circumstances might those functions apply? How would that be determined? What reporting and accounting would there be for all that process? Does the Minister perceive this matter to be a matter for all regional LSCs? Are all LSCs likely to operate outside their areas, or is this something that he anticipates will only take place in particular parts of the country, perhaps where there is an obvious overlap between responsibilities? It may be that a regional council that is focused around a conurbation may feel that it needs to operate in the suburbs beyond that conurbation. That could be the type of thing that the Minister has in mind andthat the Bill intends, but there is not a clear understanding, certainly among Opposition Members and I suspect across the whole Committee, of precisely how that process will work.

Amendment No. 21 is essentially designed to determine why these regional LSCs need powers outside their area and also to test the legitimacy of those powers. One might argue that there is a certain type of legitimacy in regional offices, and that there is a certain level of regional representation. I do not want to go down the road of considering regional government and all that that embodies, Mr. Atkinson, because you would not let me. The Opposition believe in proper democratic accountability and therefore, frankly, we are suspicious of bogus structures that offer no real legitimacy. However, notwithstanding that, it is important that the Minister makes it absolutely clear how this particular aspect of the Bill is likely to work in practice. To that end, I am delighted to move amendment No. 21, which stands in my name.

Sarah Teather (Liberal Democrat, Brent East)

With your permission, Mr. Atkinson, I would like to make just a few comments relating to the clause to enable us to speed through our debate.

The Liberal Democrats are largely in support of the idea of moving to a regional structure, but originally we envisaged that process as being coterminous with regional government, which would have given those regional councils some type of democratic accountability. Of course, that gap is still there within the Learning and Skills Council, regardless of how we reorganise it.

With reference to amendment No. 21, I wonder whether part of the point of the amendment is to allow organisations based around cities, which may fall across regions. I wonder whether the Minister will comment on that issue. I can imagine a situation where there are regions, but there may also be a city that draws people for employment purposes from outside that particular region. In that situation, one would need to ensure that the planning of skills training is appropriate for people who live within a separate region. I wonder whether that is part of the point of the amendment.

I also wonder whether the Minister will say something about the representation of college principals or college governors in the new regional council structure. That issue has been raised with me by the Association of Colleges, which is concerned.

Finally, I wonder whether the Minister will explain how the regional structure will work with the national structure for the organisation of higher education.

Tim Boswell (Conservative, Daventry)

May I begin, Mr. Atkinson, by welcoming you to the Chair? We have engaged on a number of important Bills in the past, and I hope that you will indulge me as I make what might be termed a substantive speech on this issue, which will preclude my doing so in a clause stand part debate or possibly at a later stage of the proceedings.

Before I go on, may I welcome the ministerial team, one of whom, the Minister for Higher Education and Lifelong Learning, I have already had discussions with on other matters this morning? I am also delighted to see the Under-Secretary of State for Education and Skills, the hon. Member for Corby, back in the team. I recognise the genuine contribution that they both make. May I also say, proleptically to later clauses, that I welcome the Under-Secretary of State for Wales, the hon. Member for Carmarthen, West and South Pembrokeshire? Although it would be apparent to anyone who has even the most limited knowledge of accents that I am not Welsh, I have a Welsh wife and certain Welsh educational interests. If nobody else raises Welsh matters, I may feel the need to do so later on.

Regarding the specific issue of regional councils, there is only one point in the Minister’s opening remarks this morning about which I have some reservations. It is a characteristic—a sad characteristic—of the present Labour Government that they tend to suggest that no social advance took place before 1997 and that everything good has taken place since.

I hope that we do not have that kind of discussion; indeed, knowing the Minister, we will not. I readily and happily concede that Ministers have made efforts in recent years, in some cases successfully, to improve what I hope is a common objective—to recognise, celebrate and develop our further education.

The Minister made a point about further education that I thought was somewhat inaccurate. Not only is he beginning to rewrite the history of the past—of the pre-Labour Government period—but he is beginning to elide the history of the present Government. He might have a bone to pick with the Minister for Science and Innovation, who was Under-Secretary of State for Education and Employment when the House considered the Learning and Skills Act 2000. My hon. Friend the Member for South Holland and The Deepings, who was a member of the Standing Committee that considered the 2000 Act, will recall that it passed through the House at some length, with more than 30 sittings in Committee, and I had the privilege of leading on the matter. The 2000 Act was rather important for further education, even if it was not confined to that subject.

I promise the Committee that there will be no further instances—if there are, I invite hon. Members to put me down—of my speaking as a former shadow Minister and saying, “We told you so at the time.” However, I start with one instance. The Minister will, of course, be aware of the 2000 Act, but it would be a self-indulgent to assume that he and his officials have read in full the transcript of that Standing Committee. However, I am sure that he will know about the amendment that I moved at 10.30 am on 9 May 2000, seven years ago, to clause 19. I invited the then Minister to accept this amendment:

“The Secretary of State may, by an order subject to affirmative resolution in both Houses of Parliament, after consultation with such persons as may seem to him to have an interest, (a) amalgamate, (b) divide, or (c) vary the area of operations of one or more of such local learning and skills councils.”—[Official Report, Standing Committee F, 9 May 2000; c. 309.]

I am afraid we went down to a resounding defeat on that occasion—it was three votes to 11—but had that provision been embodied in the 2000 Act, we would not have needed half of the present Bill, because Ministers could have moved the pieces around the chessboard. I say that in passing, but if the Minister cares to read that debate—I had not reread it until a few moments ago—he will see some interesting exchanges about the balance between central and local, and those exchanges will continue whatever form is used.

Without prejudice to the future of the Learning and Skills Council—I do not want to engage in that debate now—it is at least arguable or defensible to move to a regional structure, and the Minister will seek to justify that in Committee. However, I have reservations—some precise ones that I shall deal with in a moment and some general structural ones. It is not the first time that the LSC has been reorganised, but every time it happens—in this case it is being done formally by moving to a regional structure—there are other changes. We tend to be promised less bureaucracy, fewer committees and a general reduction in cost to the taxpayer.

The Minister will know that the reorganisation of the LCS is already under way internally, and, in a sense, that does not depend on and is not confined to the regionalisation agenda. Other changes are being made to the way in which the LSC operates, and they probably need to be made, if only to reduce costs, although that is not without difficulty, including for constituents of mine who work for it. However, the Minister needs to say clearly how much money will be saved by the move to regionalisation, by how much bureaucracy will be reduced in the interface with users of the LSC’s services and whether the arrangement can be sustained. I say that because, whatever aspirations Ministers may have had over the seven years since 2000, things have been subject to revision and change. That is my main point. I therefore invite the Minister to say that the present changes will be substantive, helpful and money-saving changes that will deliver a better and more flexible service.

I want the Minister to consider three specific points in relation to that. First, if he looks up that transcript, he will find some exchanges about function, and we persuaded Ministers of the day to change their minds slightly on the matter. There is the question of what might be termed home authorities for particular businesses. For a national employer—let us say Sainsbury for the sake of argument—it is clearly very important to have a relationship with the learning and skills council that will handle its needs and activities. The LSC will have an idea of the employer’s training needs, and it will want to discuss them with someone and to see that they are delivered—of course, the train to gain initiative will kick in to some extent. In future, will that be conducted at a national level by a designated officer within the LSC, or will it be done regionally to meet the needs of employers at that level? It is extremely important that that should happen, and Ministers need to comment on it.

There have sometimes been uneasy tensions, and one of the paradoxes about having a bigger regional structure, rather than a structure of 47 local councils, is that it will be less unequivocal about where to start. A company will have one head office and that is fairly easy to pin down in one local LSC area, but it may operate in each of the regions—for example, it may have its head office in one region but more of its activities in another. I would like the Minister to tell the Committee a little about how such arrangements with national level employers would work.

Conversely, the second area concerns small and medium-sized enterprises. Whatever else one says, we have had some good support in Northamptonshire built on the experience of the old training and enterprise councils structure, where we had an integrated chamber of commerce structure—we will not reopen that argument. At least if we had local employment needs, there was somebody available locally to talk to and—if one can use the phrase—broker with. Individual local employers have been able to make approaches at a local level.

I frequently become paranoid about not the concept of regional government, but its delivery and practice as it affects my constituency. Not only do I have the most south-westerly constituency in the east midlands—it is not far away from that of the Under-Secretary of State for Education and Skills, the hon. Member for Corby—but it is a substantial distance away from the constituency of my hon. Friend the Member for South Holland and The Deepings, who is also an east midlander. Conversely, my hon. Friend the Member for Rugby and Kenilworth is just over the border from me, and some of my people go to his schools, for example. However, that is a different region. When one is looking at SMEs, in particular, one is looking at dispersed rural areas—it is 100 miles to Nottingham, which is a long way to go to get a service. The Minister needs to give assurance, not least in terms of relations between the regional LSC structure and the local county structures, for example.

Angela Watkinson (Conservative, Upminster)

In Havering, we have an excellent business education partnership, which is a member of the local chamber of commerce and has direct links with local employers and the local FE and HE college. Does my hon. Friend see a role for business education partnerships in feeding into the learning and skills councils?

Tim Boswell (Conservative, Daventry)

I thank my hon. Friend for that intervention. Clearly, I do not want to caricature the position of Ministers. Ministers do not want everything to happen at the regional level, and they know that education and skills delivery will be local, but the important thing is how the links are articulated. My hon. Friend the Member for Upminster has eloquently mentioned education business partnerships, and I know that one or two of those have operated at a county level.

Employers’ organisations are also important. I used to be involved with the National Farmers Union. It tends to operate at a county level and also at a three-county level—it is clear that the Under-Secretary of State for Education and Skills, the hon. Member for Corby has some sympathy with the points that I am trying to make. We all agree that we need local delivery. We want to strip out as many layers of bureaucracy as we can, but we need to feel that there is some local ownership.

My final point concerns cross-boundary arrangements. Because of the geography of my constituency I take a particular interest in this. I have already mentioned that some of my constituents travel to the constituency of my hon. Friend the Member for Rugby and Kenilworth for schools, college and further education. It is very important that anomalies donot prevent the application of perfectly sensible arrangements for families—dad should be able to drop off a teenager at a particular college on his way to work, for example.

In conclusion, we can always play games in this area. We can devise ideal structures and they may not work. We can have ramshackle structures and, given good will, they may work. I am not caricaturing what the Ministers propose as one or t’other. We want the structures to work, and what has happened in the past has not been ideal. I am prepared to give a fair wind to what Ministers are now proposing, and I hope that it works. It is important that they are aware of the sensitivities and the history of debates on the matter. I would be grateful if Ministers were to consider the relationship with national level employers.

As I did not mention it earlier, perhaps I can also chuck in the issue of specialist or heritage skills. In my constituency, for example, there is a stonemason who has a very good operation and who takes on about three apprentices. That is difficult to deal with at a local level, because there is a small national need for such skills. Perhaps Ministers will add that to the list.

To summarise, my concerns are national employers, specialist skills, the relationship with SMEs and the way in which one achieves outreach to contact them however far from the regional centre of government they may be, and, finally, an assurance on cross-boundary issues. I have nothing but good will for the Ministers, if they can get this right and if they can simplify things. I hope that they will remember the maxim, which I quoted in those exchanges seven years ago, about Occam’s razor: it is unwise to multiply entities beyond the necessity for doing so. The less bureaucracy and the more delivery we have, the better.

Bill Rammell (Labour, Harlow)

This has been a helpful exchange to get to the heart of some of these matters. I listened with interest to the enthusiasm of both the hon. Members for South Holland and The Deepings and for Brent, East for formalised, regional, democratically accountable structures. I do not seem to recall that enthusiasm when we had a debate about elected regional government some time ago. [ Interruption. ] If I have misrepresented them, I apologise. However, there are structures to ensure that there is democratic accountability.

The hon. Member for Brent, East asked me a specific question about the role of both FE and HE colleges within the revised and reformed regional councils. We confirmed in Grand Committee in another place that

“we would expect all LSC regional councils to be business-led, drawing employers from the priority skills sectors in the region concerned.”—[Official Report, House of Lords, 23 January 2007; Vol. 688, c. GC329.]

We also stated that membership would include those with backgrounds in the trade unions, local authorities, college providers and higher education. In that way we will ensure that councils have a good understanding of the skills needs of the local communities that they serve.

I shall respond directly to some of the comments by the hon. Member for Daventry. His implied criticism was that the Government do not recognise that any social advance took place before 1997. I refute that: I recall that there were some social advances between 1974 and 1979—there were also social advances between 1945 and 1951 and between 1964 and 1970. More seriously, of course, there have been advances in the past under Governments of all parties.

In response to my statement that this is the first substantive further education legislation since 1992, the hon. Member for Daventry mentioned the Learning and Skills Act 2000. The 2000 Act affected further education, but it did not focus fundamentally and exclusively on further education, as this Bill does.

The hon. Gentleman asked me to recall his intervention seven years ago at 10.30 am, but I cannot exactly recall what I was doing on that occasion. However, I take his point that the Learning and Skills Council has achieved a significant success, but as the learning and skills landscape changes, it can and should evolve. No one seriously says that we do not need an intermediary body to fund learning and skills providers on the ground, but how the Learning and Skills Council undertakes that operation has, rightly, evolved and should continue to evolve further.

Jeremy Wright (Conservative, Rugby and Kenilworth)

The Minister is right. The structure must evolve, but as my hon. Friend the Member for South Holland and The Deepings has said, we expect the Government’s response to the Leitch review imminently. What happens if that response indicates that the Government intend to go for a sub-national arrangement that is not regional? How will that tie in with what the Bill proposes?

Bill Rammell (Labour, Harlow)

I will not pre-empt the Government’s response to Lord Leitch’s comprehensive report. [Interruption.] No, the Bill does not pre-empt it. There is a clear consistency and consensus between this Bill, which focuses on the supply side, and the arguments advanced by Sandy Leitch.

The hon. Member for Daventry raised issues concerning reform of the Learning and Skills Council and costs, which we will consider in detail later in our proceedings. I reflected long and hard on some of the statements made on Second Reading, and on the wholly extraordinary and erroneous claims by the Conservative party about the proportion of administration expenditure in the LSC’s overall budget. I hope that at the end of our debate some of those accusations will be withdrawn, because the proportion of expenditure on administration under the LSC has reduced from 4.6 per cent. to 1.9 per cent. of overall expenditure.

The hon. Member for Daventry asked me explicitly what savings the current restructuring exercise would deliver. The current restructuring will engineer savings of up to £40 million per annum. That needs to take account of all the changes, including the removal of the 47 local LSCs. On the non-executive side, through these changes we will reduce non-executive participants from 750 to 150, which will put things in much better shape.

John Hayes (Conservative, South Holland and The Deepings)

The Minister is right. There were exchanges on Second Reading about costs. I want to be absolutely clear and candid about that, as I am sure that the Minister does, too. Is he saying that there will be an immediate saving as a result of the measure he just described, or that that saving will accrue once the reorganisation is in place? How much of that saving has already been announced? He would not want to be in the business of double accounting, any more than we would.

Will the Minister clarify what was meant by what the Secretary of State and others said on Second Reading about the savings only kicking in after some time?

Bill Rammell (Labour, Harlow)

A combination of changes is taking place through the existing Learning and Skills Council strand 7 of the “Agenda for Change” and the changes taking place as a result of the measures in the Bill, which will generate savings of £40 million per annum. I ask the hon. Gentleman to reflect on the claims made by Conservative Members on Second Reading that the Learning and Skills Council was spending £1.8 billion on administration and expenditure.

Phil Hope (Labour, Corby)

Nonsense.

Bill Rammell (Labour, Harlow)

As the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Corby has said, that claim is complete nonsense and without foundation.

Tim Boswell (Conservative, Daventry)

On that point, I have had a most satisfactory correspondence with somebody whom I know at the LSC. I am satisfied that at least some aspects of the figures might have been overstated, but that does not mean that there is not a concern about bureaucracy. The Minister has said that he will cut the number of non-executive directors as part of the reform, which may slightly reduce costs. Can he assure the Committee that there will still be the same involvement at local level? It is important that people who are active locally in the business community are able to input to the LSC.

On the requirements for flexibility, from a cursory look at the Bill—I have not sought to amend it—it seems to me that the rigid structure that we criticised seven years ago will now be transferred to regions. If Ministers ever wanted to make things more flexible or to vary them, they would not appear to have the opportunity to do so through the Bill. Will the Minister consider whether that is worth re-examining?

Bill Rammell (Labour, Harlow)

I will discuss the specifics of that issue later, but the hon. Gentleman has made an important point. If we are reducing the number of non-executive directors from 750 to 150, what continuing contribution can those individuals, who have given significant service, make to the overall learning and skills landscape? There are a number of ways in which they can contribute. First, they can do so through direct contact and involvement with further education providers on the ground. Secondly, although we are—rightly, in my view—moving from 47 area councils to nine regional councils, we will also have150 partnership teams on the ground, so we will get both a regional and a localised interface, which is lacking from the current structure.

My experience as a constituency MP is one of the things that has convinced me of the need for change. Under the system of the 47 learning and skills councils, the council for my constituency covers the geographical area of Essex, which is as large as some countries in terms of both size and expenditure. The idea that there is the necessary degree of localisation in those circumstances is not borne out by the evidence.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I want to take the Minister back to costs and savings and ask him to provide a bit more clarity. I refer him to the Learning and Skills Council’s annual report and accounts for 2005-06, in which Ray O’Dowd, whom he will know as the LSC “Agenda for Change” champion, described the changes that the LSC was making at that time:

“we will be working with providers in a more strategic, hands-off way. Working like this will need about 1,300 fewer staff, which will free as much as £40 million a year for investment at the front line. In the past year we have set out the reorganisation and staff changes that we need, and these should be in place by late 2006.”

I want to be clear that the savings of £40 million that the Minister has said will result from the proposals in the Bill are not the £40 million to which Ray O’Dowd referred in that document—Mr. O’Dowd suggested that the savings would be achieved by measures taken by the end of 2006.

Bill Rammell (Labour, Harlow)

I was talking about a combination of the LSC’s strand 7 and—[ Interruption . ] That is not a surprise; it is what I said about five minutes ago. I am talking about a combination of the strand 7 measures and the changes that will result from the Bill. I can update the Committee: through the strand 7 “Agenda for Change”, we now estimate that 1,100 net posts will be removed. Combined with the measures that we are debating, such as the move from 750 to 150 non-executive directors, that will create an overall annual saving of £40 million.

I know that we will return to this issue. We are looking for precision and clarity. I welcome the acknowledgment from the hon. Member for Daventry that what he and other Opposition Members said on Second Reading was without foundation. The claim was that the LSC’s administrative expenditure was£1.8 billion, and one can reach such a figure only by including learner support and capital expenditure, for example.

One of the things that I am very proud that this Government have done in the past 10 years is significantly to expand our capital expenditure. In 1997, not one penny was being spent in the mainstream capital budget; today, £500 million per annum is being spent. If that is administrative expenditure, frankly it is the type of administrative expenditure that people on the ground have been crying out for over an awfully long period.

The hon. Member for Daventry also asked whether the transfer of responsibility from local to regional LSCs will make it harder for SMEs to be involved in skills planning and delivery. I genuinely do not believe that that will be the case. Employers will make up more than 40 per cent. of the membership of the LSC’s national and regional councils, while at the local level, as I said earlier, the LSC’s 150 or so local partnership teams will work with a much wider range of stakeholders, including employers, to ensure that local learning and skills needs are properly identified.

I want to discuss the specific details of the amendment. It may be helpful for the Committee to recall that the Learning and Skills Council is the Learning and Skills Council for England. In that sense, it is a single, unitary body and I believe that that is one of its key strengths, enabling it to work at national, regional, local and sectoral levels. As we set out in the 2006 White Paper, we are strengthening both regional and local tiers of the LSC. The LSC has to be sufficiently flexible to work across regions, sectors, city regions, areas and cities, and also to engage with partners, employers and learners at every level.

The amendment that the hon. Member for South Holland and The Deepings has tabled seeks to remove the provision mirroring section 20(2) of the Learning and Skills Act 2000, which applies to existing local LSCs. That provision reconfirms, for the absolute avoidance of doubt, that the LSC has flexibility to secure commissioning and delivery of learning and skills in the most effective way possible.

So, for example, a regional council will be able to contract with and fund a learning provider operating anywhere in England, or indeed fund an institution that attracts students from outside its own specific area. A practical example of where that would be necessary would be in the event of a merger of two colleges in neighbouring regions. The legal entity would be in one region, but the LSC regional council for the neighbouring region would need to engage with that provider. That is notwithstanding the fact that the provider’s legal base would be in the area covered by a different regional council, possibly securing provision across regional boundaries. I think that that was the issue that the hon. Member for Daventry was driving at.

The amendment tabled by the Opposition would explicitly prevent that type of activity, as well as removing the ability of a regional council, where specified by the council, to undertake activity on behalf of the council for the whole of England. Although we intend that the regional councils will be underpinned by statute, I believe that the sub-regional structure needs to be flexible and responsive. The LSC will improve engagement through the 150 or so local partnership teams that I have already referred to, and there will be about one team per local authority area. I believe that those partnership teams will be much closer to local communities than the current 47 local councils, and therefore they will be better placed to ensure that the needs of learners are being identified and met.

Those local area partnerships, as flexible internal executive arrangements, are not specifically provided for in the Bill, but their job is to work directly with local stakeholders, including employers, local authorities and local colleges, schools and independent providers, to identify and meet the learning and skills needs of each area.

The LSC will have to consult learners and potential learners, as well as employers. It will also—rightly, in my view—work with the national learner panel and other learner networks to ensure that the voice of learners is genuinely heard. That is a very important issue and therefore we intend that the LSC will recruit and appoint a learner to the national council in due course, possibly this autumn. We also expect each LSC regional committee to include a learner as well. That is an important change and, allied with the other responses that I have given, I hope that the exchanges on this particular amendment have introduced some clarity, and I am grateful for having had the opportunity to contribute to that process.

The need for the regional councils to exercise functions that are delegated to them by the national council, both within and outside their area, is clear. These are sensible provisions that will enable the LSC to continue to operate flexibly and effectively. I therefore ask the hon. Gentleman to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister is a good and diligent Minister, and I am delighted that we will hear from him at length over the coming hours, days and weeks. May I also take this opportunity to welcome the Under-Secretary of State for Education and Skills, the hon. Member for Corby, who will no doubt be assisting the Minister with his usual skills? However, the beginning of this Committee has been a disappointment. Ihave been disappointed with his combination of obfuscation, rhetoric and assertion. We have also had some smear from the Minister about the record of the previous Conservative Government and about the content of speeches that were made on Second Reading. We need a little more accuracy in the way in which we deal with these affairs.

My hon. Friend the Member for Rugby and Kenilworth has made a revelation in the course of this debate, which is that the savings that the Minister reported at the beginning of his speech were a combination of savings already made and savings expected to be made. Given that my hon. Friend made it clear that the savings already anticipated as aresult of the reorganisation that he mentioned were£40 million, one wonders what contribution the new savings will make to that combined total, as £40 million plus zero comes to £40 million, does it not? £40 million plus another amount would come to something more than £40 million. We are not absolutely sure where those savings come from, how much more we expect to save, and what the LSC budget will be like at the end of next year as a result of these changes. We have had more heat than light from the Minister on that subject.

Turning to the two other matters of substance that have been debated, the Minister has made a good case on why, in certain circumstances, a regional LSC might need to act outside its area. That is the issue at the heart of the amendment, and I anticipated that to some degree—the hon. Member for Brent, East said the same—when I said that it was likely that in city areas one could understand that the employment base might not be coterminous with the regional structure, and that it would therefore be necessary to have some flexibility in the way that the organisation operated. To that end, the amendment has done its job, and as a result of probing, we have discovered what we need to be assured of. However, the other point that the Minister raises about the exact nature of these regional organisations and their relationship to localities gave cause for concern once again. If we are going to have this panoply of local bodies sitting beneath the regions, we may be reinventing the structure that we are now reforming. I can see a burgeoning of organisations and individuals that fill the gap that has been created by the very change to regionalisation that the Bill proposes. Is it not really the case that what is required here is a root and branch reform of how we fund and manage matters of the kind that the Leitch report recommends, and to which the Government will no doubt respond.

I recommend to the Committee—the Minister may not have had the chance to see it and it is highly relevant to this part of the Bill—the report published today by the Opposition’s economic competitive policy group, chaired by my right hon. Friend the Member for Wokingham (Mr. Redwood), on skills training for a more competitive economy. In that document, hot off the press, a case is made that is rather similar to that made by Sandy Leitch, that we need a fundamental rethink of how we fund and organise the management of skills, rather than this re-arranging of the deckchairs as we head for the iceberg that the Minister has articulated, and I am being generous by saying “articulated”. I shall withdraw my amendment because I do not want to start the Committee in an unnecessarily antagonistic vein. However, I hope that some of those matters will be clarified as the work of Committee develops, because I am still very concerned about the financial and organisational effects of some of the proposals that we have begun to tease out this morning.

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 22, in clause 2, page 3, line 8, leave out ‘and local authorities’ and insert

‘, local authorities and sector skills councils’.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss amendment No. 25, in clause 7, page 6, line 38, after ‘employers,’, insert—

‘(ba) sector skills councils, or’.

John Hayes (Conservative, South Holland and The Deepings)

The subsection that amendment No. 22 would amend specifies that the LSC must consult regional development agencies and other local bodies on guidance to regional councils. However, it does not specify that the LSC should have a duty to consult sector skills councils. Given the greater role envisaged by the Leitch review for such councils, and their significance in articulating the needs of employers and working with training providers to ensure that what is offered matches those needs, those bodies should at the very least be consultees.

Sandy Leitch—I make no apology for mentioning him again, because the Minister started by referring to the Leitch report in relation to the Bill—and the official Opposition would like sector skills councils to have a much bigger role. The report that I mentioned earlier, which I know will be on the Minister’s bedside table tonight, makes precisely that case. The sector skills councils should be the principal conduit for identifying need, explaining that need to the Department and working to accredit courses that meet that need with training providers in FE colleges and elsewhere.

That is not the Bill that we have before us; it is the Bill that we expect to see in the next Queen’s Speech, when the Government respond to the Leitch review and the new Prime Minister is at the helm. However, in order to reflect the importance of the sector skills councils, they should at least be consulted. Amendment No. 22 provides for that—it would make the sector skills councils statutory consultees in the process. Let me flesh that out for a moment. The Leitch review says at paragraph 4.25 that

“Sector Skills Councils (SSCs) are beginning to effectively engage employers. Over three fifths of employers who have had dealings with their SSC think that SSCs have had a positive impact on skills development in their sector. Nearly two thirds of employers who deal with their SSC are satisfied. This includes those employers who operate across a number of SSCs with different business and occupational areas. The evaluation shows that there are significant variations by sector in performance.”

However,

“employer satisfaction with the labour market information provided by their SSC”

is generally good.

In my judgment, the Government also recognise the importance of sector skills councils and are likely to do so all the more when they respond to the Leitch review. I cannot see why, therefore, they should reject the amendment; given the importance of SSCs, it would be perverse to resist it, and I know that the Minister will be eager to accept such a positive contribution tothe Bill.

Amendment No. 25 deals with the duty of the LSC to secure the provision of facilities for education and training. It would provide for the LSC, in performing that duty, to act with a view to encouraging diversityin education and training, and to increase the opportunities for individuals to exercise choice by consulting SSCs in line with the FE White Paper. Paragraph 3 states:

“Alongside learners, employers are the major customers of FE....We have now established a full network of 25 SSCs, led by employers to ensure that their needs and priorities for the skills that will support productivity are both articulated through SSAs and met through more responsive provision.”

In essence, our amendments reflect our determination to ensure that employer-led organisations are at the heart of the process. I hope that the Government will accept them in the spirit in which they are offered. Should the Minister be resistant to my pleas, at the very least I hope that he will take this opportunity to explain what role he sees sector skills councils playing in this consultative process and how he sees them interacting with the newly structured Learning and Skills Council.

Sarah Teather (Liberal Democrat, Brent East)

Liberal Democrat Members are very supportive of these amendments. They seem perfectly sensible. If Sandy Leitch has recommended that post-19 provision needs to be employer-led, it seems sensible that the regional councils should be required to consult with the sector skills councils. I shall be curious to hear the Minister’s response to the amendments, but we are very supportive of them.

Jeremy Wright (Conservative, Rugby and Kenilworth)

May I belatedly welcome you to the Chair, Mr. Atkinson? I rise to speak in support of amendments Nos. 22 and 25 moved by my hon. Friend the Member for South Holland and The Deepings. I should say from the outset that the sector skills council that deals with the land-based industries, Lantra, is based in my constituency. Partly as a result of the work that it does, it is particularly important that these amendments find their way into the Bill. I, too, hope that the Minister will view them sympathetically. One of the reasons for that is that it is apparent from my discussions with Lantra that the sector with which it deals is specific in its requirements and very unusual in many respects. Whenever policy is formed and guidance and advice is constructed the land-based sector should therefore be included.

I hope that the Minister can help me with one particular issue and offer me some reassurance. If there is to be a regional structure, a case will inevitably be made for regional centres of excellence. In land-based engineering, for example, there is probably enough demand to justify five centres of excellence nationwide. With nine regions, each region will wish to compete for one of those centres. There will not be enough to go around and it would be inappropriate to create nine centres simply to meet that requirement. I hope that the Minister can reassure us that if we are to have a regional structure, there will be a mechanism for resolving those sorts of issues to ensure that the sector—the land-based sector in this case—is properly served with these centres of excellence and that there is a national overarching view to go along with the regional structure proposed in the Bill.

Tim Boswell (Conservative, Daventry)

It will not have escaped the Minister’s attention that the two amendments bear on two slightly different bodies: one is in relation to the duty or obligation of the regional councils to consult and the second relates the council itself. In a sense that has been brought out in what has already been said. In addition to the other tensions we identified earlier there is also a tension between the council and sector skills councils and the operation of the relationship, such as it is, and whether it should be at a national, regional or local level.

The Minister owes the Committee some explanation of how that should work. Sector skills councils will have an important continuing role, but they need to have the right consultation mechanisms. My judgment is that they should be at both regional and national level. As my hon. Friend the Member for Rugby and Kenilworth pointed out, some facilities cannot operate below the level of the region and may need to have only a small number of centres of excellence. I mentioned the example of stonemasonry, although I do not think that that needs to be exclusive, but certain minority, albeit important, skills may need a single centre of excellence nationally. Those links need to be carefully deployed.

Some of my earlier scepticism about sector skills councils is being dissipated in the event. I am pleased about that. They are beginning to bed down. There was a hurry to move into a national structure. Ministers were rather pressing ahead with it, sometimes beyond the capacity of those centres. Those of us who know the area well will be aware of the strengths of organisations such as SEMPTA and Construction Skills, in the latter case based on a training levy, although we will not debate that issue today. They had some substance before they started. I have been impressed, in my recent work in connection with Pitcom, on the response to e-skills. There are other favourable cases: even Lantra, which I have known man and boy in my professional, as well as my policy, capacity, has now established itself and has a major contribution to make.

In terms of what the Government are proposing, and what Conservative Members are saying, there is a very important role for sector skills councils. They need to have the right relationship with the Learning and Skills Council as it operates nationally and regionally and the Minister should explain to the Committee how that will work in practice.

Bill Rammell (Labour, Harlow)

The hon. Member for South Holland and The Deepings set out his enthusiastic support for sector skills councils, which I welcome, as they are at the heart of the Government’s agenda in responding to the skills challenge.

The hon. Gentleman also said that according to the Leitch report, to which we will respond shortly, the sector skills councils will take on a more substantive role. He also alluded to the fact that Sandy Leitch recommends that we move even further in a demand-led direction. I agree with both those propositions and nothing in the Bill contradicts that approach. If hon. Members could identify what in the Bill stops us moving in the direction of the Leitch report’s recommendations, I would better understand their concerns. Ministers throughout the Department, especially my hon. Friend the Under-Secretary, regularly meet the sector skills councils.

Tim Boswell (Conservative, Daventry)

Will the Minister accept that if legislation specifies certain bodies as consultees and excludes others, whatever his good intentions and however much he may wish it to happen in practice, there is different pressure to conduct consultations on those that are specified and those that are not? That is at the root of our concerns on the matter.

Bill Rammell (Labour, Harlow)

I will address that concern directly, as it is explicit in the regulations that we expect that engagement to take place with the sector skills councils.

John Hayes (Conservative, South Holland and The Deepings)

The Minister asked me a question, so I thought I should respond through the Chair.

The critical matter is not what the Bill says, but what it does not say. If the Government’s response to Leitch reflects the principal message in that report, which is to move to a demand-led system with a very different structure—the Learning and Skills Council is not mentioned until 70 pages into Leitch—we anticipate that further statutory change would be needed to facilitate that new structure. We are not arguing that the Bill is necessarily unhelpful in that respect, but that it is a missed opportunity; it does not pave the way for such fundamental change. That is the essence of our point about the Bill.

Bill Rammell (Labour, Harlow)

That clarification is helpful, but I genuinely disagree with the hon. Gentleman. The critique that usually comes from Opposition Members is that we legislate too often when it is not necessary. To move the system in a more demand-led direction one does not need to legislate; we have already committed ourselves through the “Further Education” White Paper to moving to 50 per cent. of provision being demand-led by 2015. There is a debate to be had about how much further and more quickly we can go in that direction, but it does not require legislation. That is why I said that there is nothing in the Bill that contradicts Sandy Leitch’s recommendations.

The hon. Member for Rugby and Kenilworth talked about the importance of centres of excellence and how they can be recognised within the revised structure. I refer him to the previous debate; it is clear that we have a unitary council structure and there will be a national overview. If we had accepted the amendment, it would have been more difficult to ensure genuine national co-ordination when responding to the issue of centres of excellence. The hon. Member for Daventry raised concerns about centres of excellence. I remind him that we are moving forward with national skills academies, and we are committed to there being 12 by 2008. We also have an excellent network of centres of vocational excellence, which are developing the kind of best practice model that we need to see across the country.

I have made clear the importance that we attach to the work and role of the sector skills councils. They are the key to articulating demand for skills, to identifying priorities and to stimulating increased demand for skills among employers. Hence, they are a vital plank in the creation of a more demand-led system, as we outlined in last year’s White Paper on further education. Indeed, the importance of that role was acknowledged and asserted by Sandy Leitch in his recent report.

We have already ensured that the LSC involves the sector skills councils fully in delivering its functions, including regionally. The LSC works with the SSCs through sector skills agreements, which also bring together employers and other key partners, including the awarding bodies. The agreements set out each sector’s needs and provisions and the action needed on the supply side to meet skills gaps and shortages.

The LSC rightly consults widely with SSCs nationally and regionally through the regional skills partnerships, enabling it to respond effectively on skills priorities. In addition, the new LSC structure will allow it to work much more effectively in partnership with SSCs and employers and its many other partners. The nine regional councils, which will be given statutory underpinning under clause 2, will have a key role in developing strong collaborative relationships with key partners, including SSCs, in order to secure a strong link between jobs, training and skills.

Clause 7 makes it clear that other persons to be consulted may be expressly specified in guidance made by the Secretary of State. We have made available an illustrative draft of the statutory guidance, prepared in accordance with the Bill, to which the LSC must have regard. That draft makes explicit reference to consultation with SSCs and regional skills partnerships. It makes it clear that we expect the LSC to consult with the 25 SSCs and, once it has been established, with the new commission for employment and skills. That genuinely provides the reassurance that hon. Members seek.

Although I agree with the sentiment behind the amendments, I believe that they are not necessary. I would not want to refer in legislation to organisations that are non-statutory bodies. I said earlier that this is the first substantive piece of further education legislation since 1992. We do not want to pin ourselves down to specific bodies in primary legislation. Such organisations may change, and referring to them in primary legislation could therefore be without meaning. Given that, and given the draft regulations, I hope that the hon. Member for South Holland and The Deepings will feel able to withdraw the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The Minister assures us that, through guidance, sector skills councils will indeed play a critical role in the consultative process laid out in the Bill. However, there remain concerns. One is the narrowing of the membership of the Learning and Skills Council to 10 members, which was dealt with under clause 1; it will have fewer members than the Higher Education Funding Council, the Qualifications and Curriculum Authority and the Quality Improvement Agency. It seems that 10 is the new minimum. Another is the removal of localities from the system that regional councils will inevitably cause, notwithstanding what the Minister said about other sub-regional bodies. I also have doubts about what I would describe as a sort of bunker mentality, as the LSC comes under increasing pressure following criticisms from independent sources—the Leitch review envisages it withering away—and there are constant concerns about bureaucracy.

Those issues of consultation, liaison and responsiveness become ever more critical. However, I know that the Minister is genuinely committed to ensuring that all interested parties play a part. I hear what he says about the importance of guidance and, furthermore, hear what he says about the risks and dangers of enshrining some of these matters in primary legislation. A Minister of any political colour would take a similar view. Having heard him offer those assurances, I beg leave to withdraw the amendment.

Clause 4

Sarah Teather (Liberal Democrat, Brent East)

I beg to move amendment No. 17, in clause 4, page 4, line 6, at end insert ‘, including—

(i) approved local area agreements (as defined in section 82(2) of the Local Government and Public Involvement in Health Act 2007), and

(ii) local improvement targets (as defined in section 83 of that Act);’.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss the following amendments: No. 18, in clause 4, page 4, line 8, at end insert ‘, including consultation with—

‘(i) responsible local authorities (as defined in section 78 of the Local Government and Public Involvement in Health Act 2007), and

(ii) partner authorities (as defined in section 79 of that Act).’.

No. 23, in clause 4, page 4, line 8, at end insert

‘, in particular, to determine the level of demand for specific skills in the economy’.

No. 24, in clause 4, page 4, line 39, at end insert

‘, in particular, to determine the level of demand for specific skills in the economy’.

Sarah Teather (Liberal Democrat, Brent East)

With your permission, Mr. Atkinson, I should like to make some general remarks about the clause before going on to discuss amendments Nos. 17 and 18.

Peter Atkinson (Conservative, Hexham)

Order. I am happy as we move on to different areas of the Bill to allow a wider-ranging debate on the first group of amendments. However, that means that any move to have a clause stand part debate will be looked at rather severely by the Chair.

Sarah Teather (Liberal Democrat, Brent East)

Thank you for that clarification. In principle, we are very supportive of the clause. First, it establishes the skills and employment board for London, which brings democratic accountability to the organisation of training in London, and most critically, it allows it to be integrated with other economic planning and provision of services such as transport. That is particularly essential for a place such as London. As a London MP, I was quite excited by that idea, and felt that it offered a real opportunity to ensure that we take account of London’s uniqueness. London generates a large proportion of the country’s wealth, and draws in many of the tourists who come to this country, but we also have significant levels of unemployment and lower rates of employment than the rest of the nation.

London is by its nature a more transient place. There are waves of immigration and pockets of poverty and wealth are found side by side. Many other cities across the UK have those factors, but none in the same concentration as London. London has unique training needs because of that, which are heightened by the Olympics and the considerable building programme that goes with that. We support that aspect of the clause.

The second important thing that the clause does is to allow flexibility for sub-regional structures to be set up, and we support that idea in principle. We have already had a discussion about sub-regional structures and the need sometimes to take account of a city organisation and the way in which employment is drawn into a city hub. Amendments Nos. 17 and 18 are probing amendments designed to probe the relationship between any new bodies that will be set up, given the structures outlined in the clause, and local authorities. More specifically, they are designed to probe local area agreements.

I know that the Minister referred to some of those aspects in the discussion on clause 2, but I would like to push him a little further on this point. When local authorities set up local area agreements, they are designed to set targets for improvement between local authorities and their partners, and Government as a whole. My concern about the wording of the clause is that it appears to over-rule that, or appears to allow the Secretary of State to over-rule that. I would be grateful if the Minister could be clear about the relationship between existing partnership arrangements and any new bodies that might be set up. Obviously, it is essential that any new bodies take account of existing plans and partnerships, and I would like to ensure that there is consistency between the Bill and the Local Government and Public Involvement in Health Bill, which defines that relationship with local area agreements.

Local area agreements bring together a whole range of services, and economic development targets as well as skills and further education plans and partnerships that are outlined in local area agreements. It is essential that any new body works closely in collaboration with those existing plans. They are probing amendments that are designed to get on the record from the Minister exactly how that relationship will work and to ensure that it is consistent with the other Bill that is proceeding through Parliament at the moment.

John Hayes (Conservative, South Holland and The Deepings)

I shall not add to what the hon. Member for Brent, East said about her amendments, although I am sure that the Minister will want to respond to her interesting and useful comments. I take her point that they are probing amendments, designed to elicit clarification.

On amendments Nos. 23 and 24, section 24A of the 2000 Act allows the Secretary of State by order to specify a body to formulate a strategy in relation to specified functions of the LSC for the whole of England or part of it. However, it contains no provision about consultation to determine demand, in line with the Leitch review. In tabling the amendments we are anxious to insert the term

“the level of demand for specific skills in the economy”.

Perhaps I should remind the Committee that the Leitch review says that

“analysis shows that previous approaches to delivering skills have been too 'supply driven', based on the Government planning supply to meet ineffectively articulated employer demand. This approach has a poor track record—it has not proved possible for employers and individuals to collectively articulate their needs or for provision to be effectively planned to meet them. Employers are confused by the plethora of advisory, strategic and planning bodies they are asked to input to. Under a planned system, the incentives are for providers to continue doing what they have done in the past so long as that meets the requirements of planning, rather than responding flexibly as demand changes”.

Our concern is that the system should provide what the economy needs. Like Lord Leitch, we believe that a demand-led system, with employers in the driving seat, does that best. I do not say for a moment that that does not depend on there being a partnership between educators and employers; of course it does. I said at the outset that I value immensely the role that further education and other training providers play in equipping our people with the skills that they need if they are to make a worthwhile contribution, as well as those that add to their well-being.

However, in an advanced economy, in which need is dynamic, it is critical to communicate demand as effectively as possible to trainers so that what is provided through the system accurately reflects real economic need. That is fairer to trainees and to employers, because all too often, people who have been trained have to be retrained when they obtain employment because the training with which they were provided was not up to date. It is difficult to be absolutely sure of achieving that, but it is most likely to be guaranteed, as Leitch argues, by a demand-led system. Our purpose is to assert that decisively, hence the wording of the amendment.

Amendment No. 24 concerns the function of the council in London when the LSC’s powers are delegated. It would require the body established by the Mayor to consult SSCs to determine the level of demand in London for particular skills. It, too, is born of our determination to ensure that, in a demand-led system, the needs of a particular locality are transmitted as effectively as possible. We believe that the SSCs will play a critical role in that regard. All SSCs are not equally strong; they are evolving and there will be further changes in the way in which they operate. However, they are the vehicle that should be used as a conduit for the supply of information about demand and to ensure that what is provided meets that demand. The amendments are designed to achieve that outcome and I shall be interested, as ever, to hear the Minister’s response to our helpful suggestions. They would improve the Bill and bring it into line with the findings of the Leitch review which, I can tell, will play a lively part in our deliberations.

Bill Rammell (Labour, Harlow)

It is some time since I have contributed to a wide-ranging debate on clause 4, but I am happy to be able to do so. For the record, may I correct something that the hon. Member for South Holland and The Deepings said when he summed up on the previous group of amendments? He asserted that it is Sandy Leitch’s view that the LSC will, over time, wither on the vine. That is not what Sandy Leitch has said. He has explicitly said that he is not in favour of ripping up structures for the sake of it and starting again, but that he is of the view, as am I, that the LSC’s role and function, and the way in which it operates, should continue to evolve.

Amendments Nos. 17, 18, 23 and 24 relate toclause 4 and the strategies for the functions of the LSC. Amendments Nos. 17 and 18 apply to directions and guidance about the consultation, and matters to which a body specified to formulate a strategy for an area of England outside Greater London is to have regard when formulating or reviewing its strategy. Similar amendments were tabled at Committee stage in another place. We considered the points that were raised, and have made a number of changes to the draft directions and guidance in relation to the formulation and review of the skills strategy for London by the London skills and employment board. Similar directions and guidance will apply to other bodies outside London. I am, therefore, pleased to be able to restate the reassurances given by my noble Friend Lord Adonis.

I agree that provision should be made in directions and guidance, but I do not believe that specific reference to these matters should appear in the Bill. While I agree that a range of bodies should be consulted, I cannot see a case for favouring particular categories of consultee by naming them in the Bill. If we were to go down that path, we would burden the Bill with unnecessary detail, and to name only some would be misleading and unhelpful. Those drawing up and reviewing strategies will want to have regard to existing local area agreements and local improvement strategies, as the hon. Member for Brent, East has asserted, and also to other relevant matters such as sector skills agreements. Again, I believe that the place for such matters is in directions and guidance, not in specific mention of them in the Bill.

Taking London as the first example, a list of bodies to be consulted and matters to which the board is to have regard is provided in the draft published directions and guidance. Those draft directions say, as the result of a debate on amendments tabled in another place, that the board must consult responsible local authorities where the authority falls partly or wholly in Greater London, and partner authorities where the board considers it appropriate. Directions also require the London skills and employment board to have regard to local area agreements and local improvement targets specified within them, which have been prepared by any responsible local authority where the area of the authority falls partly or wholly in Greater London.

I refer the hon. Lady to the documents about the Bill that we circulated to the Committee, particularly item (c), draft regulations on the strategy-making body for London, made under clause 4. Section 7 explicitly mentions the board’s having to consult particular bodies, including responsible local authorities, as defined in section 78 of the Local Government and Public Involvement in Health Act 2007, where the area of the authority falls partly or wholly within Greater London, and each of their partner authorities within the meaning of section 79 of the Local Government and Public Involvement in Health Act 2007 where the board considers it desirable to do so. I hope that that provides the reassurance that the hon. Lady seeks and that she and the hon. Member for Leeds, North-West will feel able to withdraw their amendment.

Amendments Nos. 23 and 24 would provide that, where directions and guidance about consultation are given by the Secretary of State, the particular need to consult to determine demand for specific skills in the economy should be considered. I agree that the level of demand for skills in the economy is an exceedingly important issue as we formulate or review our strategy, but I do not see a reason to refer to it specifically, when we do not refer to other matters of equal importance, such as improving employment and tackling worklessness.

The demand for specific skills, along with many other relevant matters, will be taken into account in our strategy. It would not be appropriate to refer to just one matter in the Bill, and to include all relevant matters would over-burden the Bill with too much unnecessary detail. For those reasons, I ask the hon. Member for South Holland and The Deepings not to press his amendment.

Peter Atkinson (Conservative, Hexham)

Order. The hon. Member for Brent, East will need to withdraw her amendments at the end of the debate, but if the hon. Member for South Holland and The Deepings wants to speak, now would be the time for him to do so.

John Hayes (Conservative, South Holland and The Deepings)

Thank you for your indulgence and advice, Mr. Atkinson. We need to be absolutely clear. The Leitch review is explicit in its advocacy of a demand-led system, which I think the Minister has fully acknowledged. The report is unequivocal about the changes that would be needed to achieve such a system. The Learning and Skills Council is not mentioned in any significant way until page 73, and then in not particularly glowing terms. In describing the move from a supply-driven to a demand-driven system, Lord Leitch says:

“The LSC allocates funding on the basis of expected demand. If demand does not meet expectations, funding for subsequent years is adjusted. This can mean that colleges aim to ‘recruit’ employers and individuals into planned courses to fill places, rather than responding flexibly to demand.”

The assumption underpinning the report was that the current system does not always deliver, which is reflected in our skills performance. The Ministers on the Committee have been straightforward about that in the past. We need to improve our performance radically, particularly in intermediate and higher level skills, where we lag behind France, Germany, the USA and other competitors.

The purpose of our amendments is to enshrine in the Bill the principle of responsiveness to demand. There is no difference of principle between us in that respect, but the Minister has made the case that the amendments would entangle the Bill in a level of detail that would not be appropriate from a legislative perspective. I hear what he says, but I use this opportunity to probe and to reinforce my absolute determination to ensure that the principle behind the Leitch report, of moving from a supply-driven to a demand-driven system, should inform all that we do in the Committee, as well as future public policy. Having heard the Minister’s assurances, I beg to ask leave to withdraw the amendment.

Peter Atkinson (Conservative, Hexham)

Order. The hon. Gentleman does not need to withdraw the amendments, because they have not been moved.

John Hayes (Conservative, South Holland and The Deepings)

I take your advice, Mr. Atkinson.

Sarah Teather (Liberal Democrat, Brent East)

I thank the Minister for his helpful response to our amendments. As he assures me that the requirement to consult with local area agreements will be written into guidance for all areas, not just for London, I am happy to beg to ask leave to withdraw the amendment.

Clause 5

Tim Boswell (Conservative, Daventry)

We talked earlier about the multiplication of committees and these are two that are going. I am not sure that we need them in the statutory form. I would simply like to reinforce to the Minister my view, which I think he probably shares, that the importance of the development of adult skills is particularly intense because we know that we have a skills gap—it has been identified by the Leitch report. We also know that most of the people who will be in the work force by 2010 are already in that work force now. It is impossible to upskill the country simply on the basis of recruitment, particularly as the cohort of young people is now beginning to turn down. We must address adult skills.

On reflection—indeed, to some extent I felt this at the time—my main reservation about the Learning and Skills Act 2000 is that it gave emphasis to the 16 to 19-year-olds. As I said on Second Reading, the Government have helpfully extended that group to14 to 19-year-olds. I have no problem with that. However, I think that it is extremely important that we now emphasise upskilling in the adult community. That requires, for example, the active involvement of the sector skills councils, and in educational and pedagogical terms it often implies a more flexible approach than we have traditionally delivered in the younger age group. So this is simply a warning and a reinforcement to Ministers of something that I think they know about, which is that we need to tackle this issue very seriously.

I think that my hon. Friend the Member for South Holland and The Deepings also has a contribution to make on this subject.

Greg Mulholland (Liberal Democrat, Leeds North West)

May I say, Mr. Atkinson, what a pleasure it is to serve under your chairmanship?

Very briefly, I wish to reiterate the comments made by the hon. Member for Daventry, to emphasise the Liberal Democrats’ concerns with regard to adult education. As the Minister will be well aware, there have been concerns expressed, particularly by the National Institute of Adult Continuing Education. Regarding the clause, NIACE has said that it is concerned that adult education and training is losing much of its statutory underpinning. This is a very good opportunity for the Minister to refute that view. Although we understand the need for flexibility, which is the reason given for the clause, it is vital to tackle that crucial area of concern at this stage, and I hope that the Minister will do so in his brief comments.

John Hayes (Conservative, South Holland and The Deepings)

My hon. Friend the Member for Daventry is absolutely right that the critical need is to upskill and reskill the existing adult population. Even if we got skills training absolutely right from the perspective of young people, the demographics make it clear that, unless we upskill and reskill the existing working population, we will not be able to meet the targets necessary if we are to remain economically competitive. That also means examining the access to learning and the re-entry to learning. I am very concerned about the decline of adult and community education. I make no apologies for saying that the loss of a number of adult and community places has been a disgrace, and I hope that the Minister might comment on that issue.

The clause abolishes the two statutory LSC committees—the young people’s learning committee and the adult learning committee. I draw attention to adult and community learning because, if we are going to upskill and reskill the existing working population, it is critically important that we are as lateral in our thinking as possible about the routes to learning, including the re-entry to learning for many people who have perhaps been failed by the system the first time round.

These two committees provide an important voice for adult learners within the system and it would be interesting to hear from the Minister as to why he feels that they should go. They are low-cost and they provide valuable scrutiny of the LSC’s work on age-related issues. In particular, with the abolition of the adult learning committee and the end of an independent adult learning inspectorate, it appears that the distinctive nature of adult education and learning is losing much of its statutory underpinning.

These may seem like minor matters in relation to the Bill, but they speak volumes for very significant issues about adult learning. Many of us are strongly committed to the principle of adult learning. A few days ago, I was at the City Lit college in Covent Garden, which I am sure that both Ministers will know well. There are 52,000 enrolments and 3,000 courses there. The courses are overwhelmingly, perhaps exclusively, non-accredited and are attracting learners of all kinds, of all ages and from all backgrounds into education and back into education. The work of organisations such as that college should be celebrated. It deserves a voice in the system. I am concerned that in a small way clause 5 will diminish or quieten their voice unacceptably. I would be interested to hear the Minister’s comments on that.

Phil Hope (Labour, Corby)

It is a pleasure to serve under your chairmanship, Mr. Atkinson. May I thank hon. Members for their kind remarks? It is good to be here in Committee. It is great to be with the hon. Member for South Holland and The Deepings whose articulate and eloquent contributions in Committee I know of old. He never uses one word when three or even more will do. That is always a real pleasure.

The clause means that schedule 3 paragraph 1(1) of the Learning and Skills Act 2000, which places the Learning and Skills Council under a duty to establish both a young people’s learning committee and an adult learning committee, shall cease to have effect. I will try to address the points that hon. Members have made, but first I should like to pay tribute to the work of both committees. They have played an important role in advising the LSC over several years and have worked extremely hard in promoting those interests. The evidence before us illustrates the work that they have been doing. There are now more young people in learning than ever before. We have more apprentices in learning and more young people completing their apprenticeships than ever before. More adults are improving their basic skills.

The hon. Member for Daventry is absolutely right: it is important that we now look at the existing adult work force. The hon. Member for South Holland and The Deepings made the point that 70 per cent. of the work force that will be there in 2020 is already in place. As well as working to improve the skills and employability of young people coming through the education system, we need to upskill the existing the work force. That is common ground between us on where we need to go.

Jeremy Wright (Conservative, Rugby and Kenilworth)

Does the Under-Secretary agree that one of the reasons why the points made by both my hon. Friends are so important in this context is that, whether or not we regard education as a lifelong experience, our wish to encourage people to reskill and upskill is to some degree informed by the way in which they see some of these non-accredited adult education courses being treated? That is why it is important, with or without the existence of the committee, that we continue to ensure that adults have access to that kind of learning too.

Phil Hope (Labour, Corby)

There is agreement across the Committee about the points that the hon. Gentleman makes. Adult funding has increased by 48 per cent. since 1997. That is a real terms increase of 48 per cent. Indeed, over the next two years adult education funding will increase by a further 7 per cent. So this is a track record of growth and investment in adult education. Of course, we had to ensure that that funding is focused on our priority, which is—this is the point that the hon. Members for Daventry and for South Holland and The Deepings are making—those adults, who, let us be honest about it, were let down by education 10 or 20 years ago.

These people are in the work force now and do not have basic literacy skills. They do not even have a first full level 2 qualification, the basic platform for employability. Through the train to gain initiative and the growth in the demand-led approach, which meets the needs of employers, we will both raise the skills of individuals in the work force and meet the needs of employers to improve their productivity and their profitability.

Tim Boswell (Conservative, Daventry)

Would the Under-Secretary concede—I do not attach blame to him on this—that there has been considerable concern at local level about cutbacks in the delivery of community education, notwithstanding the fact that he has ring-fenced some money towards that? That is an example of our concern, to which the Minister is trying to respond.We need the non-threatening, positive educational experiences that many such adults failed to achieve during their schooldays.

Phil Hope (Labour, Corby)

I understand the point that the hon. Gentleman makes, but most of the reductions in courses that he describes were in short, non-priority, non-accredited provisions that did not offer opportunities for individuals to progress to further learning or to gain skills for employment.

The hon. Gentleman also raised an important point about wider adult community learning. The Government are absolutely committed to adult learning in the broadest sense. That is why, through our strategy for personal and community development learning, we have this year ring-fenced £210 million to ensure new partnerships at the local level. They will be led by LSCs, and they will bring together all the partners, including local authorities, the LSCs, the voluntary sector and organisations such as the Workers Educational Association. Working in partnership, they will be able to ask, for such courses and for this kind of broader learning, what strategies can be put in place to maximise the various contributions made by different organisations in order to reduce overlap and ensure that those who do not benefit from such opportunities can benefit in future.

John Hayes (Conservative, South Holland and The Deepings)

As ever, the Under-Secretary speaks with great sincerity and commitment. The point that we want answered is what proportion of the adult courses that have been lost relate to employment? He is right to emphasise that those that do not are far from valueless, and that education is more than equipping people to get work. However, I am anxious about the number of courses that have been or are being lost that could lead to further study or that might directly relate to employment.

I do not expect the Under-Secretary to answer that off the top of his head, but it might be useful if he considered the matter and gave the Committee some information about the proportion of courses that fall into that category. Put simply, my worry is that we might be throwing the baby out with the bathwater. By focusing on accredited level 2 courses, we are narrowing the opportunity for people to return to education who could then move on to further learning, which might aid or facilitate employment. We need that information in order to get to the heart of the matter.

Phil Hope (Labour, Corby)

The hon. Gentleman makes a fair point. However, he was earlier praising the role of the sector skills councils in determining, through labour market information, the kind of economically valuable skills and the qualifications that reflect those skills; it is that which drives the system. I agree with him; it is in exactly the direction that we wish to proceed.

The hon. Gentleman also argues that there may be other courses and other developments, and we recognise that. However, if we are serious about allocating public money—the taxpayers’ money—to those areas where there has been a market failure, whether in literacy or numeracy or in the level 2 qualifications that meet the employers’ needs, it is right to focus those resources on places where market failures have occurred so that we can get people into learning for the first time.

The hon. Gentleman will know of learners, and I have certainly met many, for whom the light bulb was switched on when they undertook their first course, perhaps in literacy; they became switched on to learning in a way that had never happened before, because of the education system’s failure. From that moment, they started on a progression, going on courses that they would never have taken up previously.

The philosophy of taking people who have been let down in the past and focusing resources on them, putting them on the first rungs of that ladder to learning, is important for them, their families and communities; but it also benefits the employers who provide the job opportunities, promotion, productivity and so on. It is not either/or; it is both. As for public money, we must clearly focus our resources on those who need it most.

John Hayes (Conservative, South Holland and The Deepings)

This is a critical debate. The Minister will know that one of the biggest growth areas in the labour force is among the non-employed. Over the past15 years, a large number of formerly non-employed people has joined the work force. I am not speaking of NEETS; I speak more of the mature women who return to work after bringing up the family. They often find their way back to work, through re-entry to education, after some time out of employment, and I want to tease out how many of them come in through adult and community learning, perhaps initially in non-accredited courses. I hope that he might look at that and bring back further information, as I am not clear about the numbers. I think that the Committee would benefit from having a feel for those numbers. He is right that it is not either/or, but we need some specificity about the significance of adult community learning as a route back into employment for the kind of people whom I have described.

Phil Hope (Labour, Corby)

Without wishing to prolong this debate too far, and to stay with the point of the clause, the issue here is progression. What opportunities at alocal level, whether via employment or through community—doing a 10-year college course or perhaps doing something in the local library or through LearnDirect; there are many other routes to learning—allow people to progress? Not just to take a course, and then another, and another, and go round and round in circles, not getting further forward: what can we do to ensure that the vision at a local level generally offers progression for individuals?

The hon. Gentleman is right to say that that is not a decision that can be made in Whitehall; it has to be made at a local level by local providers where, through our rigorous emphasis on quality, we are able to make a judgment at a local level that that is a course that helps individuals to start learning and to make progress, as opposed to a circular, revolving door of course after course that does not give them the needs to move into a job or to improve their lives or skills as parents as members of the community.

That quality issue is what the hon. Gentleman is really getting at. Are we making sure that, as we drive forward our priorities, as we deliver literacy, numeracy courses, level 2 qualifications, and courses in the community to engage people for the first time, we are doing so by funding those course providers who are providing the best in terms of quality to allow people to progress? That is the point that the hon. Gentleman made earlier about the decline. We do not want to put Government and public resources into courses that are short, that do not give people progression, that do not give people qualifications, and do not provide what the hon. Gentleman asks for.

Gordon Banks (Labour, Ochil and South Perthshire)

Does my hon. Friend agree that even within the private sector a great deal of provision is provided by distance learning? It is a vital role that fits neatly into the jigsaw that Ministers have presented to the Committee today.

Phil Hope (Labour, Corby)

Yes—I was distracted and diverted away from the key point—my hon. Friend is absolutely right. There are many providers in the private sector, the public sector and the third sector that have the ability to reach out and contact individuals in communities who would otherwise not see themselves as returning to learning by going to a college or school. That is the one thing that such people will not do—it is anathema to them.

There are innovations and new approaches that private providers in the third sector can take, particularly at a local level. There are partnerships through personal community development learning, which I have mentioned, andI hope to see that strengthened at a local level to engage people in learning. Those people may not necessarily be learning to get a qualification, as the learning may be for their own personal development or leisure.

I shall return to the clause. I want to confirm to the hon. Member for Daventry that the proposals are about removing a statutory requirement to establish an adult learning committee and a young persons’ learning committee. By removing that requirement, the clause will give the LSC much greater flexibility to respond to the complex, changing needs of learners, employers and communities.

Rob Wilson (Conservative, Reading East)

Can I confirm that the abolition of those two committees means that there will be no financial saving?

Phil Hope (Labour, Corby)

I cannot confirm that there will be no financial saving, because there will be a reduction in that statutory structure. If the LSC does not have two statutory committees, we expect it to consider replacing them with a single committee. There may be a minor financial saving to the sub-committee of the LSC national council itself. That single committee may look in the round at all the interrelated issues to do with the needs of young people, adults and the FE sector work force. We are taking other measures, which may involve expenditure, to strengthen the voice of learners generally in learning and skills.

Clause 7, to which we shall come later, makes new provision for the LSC to consult learners. We will also recruit and appoint a learner to the national council in due course—possibly this autumn—and we expect each of the regional committees, which we debated earlier, to include a learner. In addition, we will use the national learner panel and other learner networks to ensure that the learner voice is heard. We also expect the LSC to convene regular stakeholder forums and advise the council. It may even establish time-limited groups to look at specific concerns and make recommendations on the way forward. To take one example, in November 2006, the non-statutory working together strategy committee focused on the council’s work with the voluntary and community sector—the third sector.

I cannot guarantee that there will be savings or costs either way. However, in removing the statutory requirement for the two committees, we expect that the LSC will provide a range of new measures to consult learners and hear their voice during its deliberations.

Clause 6

Sarah Teather (Liberal Democrat, Brent East)

I want to probe the Minister a little further on the purpose of the clause. When we talk about diversity, there is sometimes a danger that we talk only about diversity of providers, when what the learner wants is diversity in the provision of courses. Few people particularly care who provides the courses; they want to know whether the type of course that they want to study is available locally and whether it is of high quality.

Angela Smith (Labour, Sheffield, Hillsborough)

Is it not the case, however, that many young people need different environments for their learning post-16 and even before? Is it not the case that some need a pastoral sixth-form environment, whereas others will survive perfectly well and, indeed, flourish in the independent learning environment of a sixth-form college or further education college?

Sarah Teather (Liberal Democrat, Brent East)

I take the hon. Lady’s point, but that is not what I was getting at. The point that I am trying to make is that much of what has been said about diversity relates to competition between private providers, who come in and provide one type of course, as opposed to colleges that provide a range of courses. However, I accept the hon. Lady’s point about a sixth form versus an FE college environment, which is valid.

Colleges have expressed concern that private providers will often undercut them on the cost of a particular course, because private providers do not do many of the more complex things that colleges do, such as providing for vulnerable young people or working with schools on their increased flexibility programme, for which all colleges complain that they are not fully funded. It is therefore quite easy for colleges as a whole to be undercut, and all that I am trying to establish is whether we will continue to safeguard the whole range of courses that young people may want to take, rather than focusing on different types of providers who provide the same course.

Tim Boswell (Conservative, Daventry)

I very much echo the comments that have been made and, in a sense, I rise only to reinforce those that were made about clause 5. We are talking about a mixed economy, which will function best if people have the widest variety of institutions and vehicles, including workplace institutions, in which to carry out their studies and the widest range of modes of delivery to help them to do so, including distance learning, which we have not discussed but which is important.

There are some structural questions about the way in which the Government channel the money, and I have some slight reservations, although not in a contentious way, about train to gain. I agree with the Minister that we need to put the emphasis on business employment, which he discussed under the previous clause, and the train-to-gain mechanism, although it has not yet been fully tested, is at least interesting. However, what I would not like him to do—I do not think that he has done this yet—is to put all the funding into that mechanism and leave nothing for other activities.

As we have discussed, Ministers may need to reserve some money for national competencies and networks of vocational excellence. However, it is extremely important and in the spirit of clause 5, which we have just debated, that we consider the position of the individual learner. I still have considerable sympathy with the concept of individual learner accounts. We will not debate what went wrong last time—I am not sure whether any of us quite knows—but it is valuable to give people the opportunity to unlock their own potential and to make their own choices as stakeholders in the process. We should facilitate and celebrate that. The clause is facilitative and positive, and I therefore welcome it.

We need a market-driven system, because we live in a market economy and have competing providers. We also have competition in the choice available to individuals, whom we need to empower particularly in relation to the social return of their own learning. It may be that those at later levels can cope with the process and self-fund, but we need to keep all that in mind. The clause should help us to deliver that mixed economy or at least to debate whether it is taking place. It is important for us to encourage that, and when Ministers get something right, we should encourage them in doing so.

Bill Rammell (Labour, Harlow)

The debate has been short but instructive. I agree with the hon. Member for Brent, East that there should be diversity of not only provision of courses, but providers. We should certainly be seeking the highest possible quality, and we should acknowledge the improvement in quality in both further education colleges and independent providers in the past five to six years. In further education colleges, for example, the success rate has risen from 59 per cent. to 77 per cent., which is a very significant improvement in performance.

I also agree explicitly with my hon. Friend the Member for Sheffield, Hillsborough that in the provider structure we need a range of provision for the individual at a local level, whether that involves a school sixth form, a sixth-form college, a further education college or an independent provider. Often the judgment will be for the individual to make based on their particular circumstances.

I respect the track record and involvement in the issue of the hon. Member for Daventry. However, I am getting a little confused. In previous debates, I have heard strong demands from the Opposition Benches that we should implement what Leitch said about moving in a demand-led direction. Now we hear that not everything should lead in a demand-led direction and that we should hold back on some things. If there is a need for clarity from the Government, then I think that there is a need for clarity from the Opposition.

Tim Boswell (Conservative, Daventry)

Perhaps I can assist the Minister by saying, as a matter of general principle—I have no executive responsibility for this, as he will have noticed—that my view is that we need to move towards a demand-led system. I merely suggest to the Minister, if only for his own protection, that he should moderate or modulate that approach by giving a proportion of assistance for self-funding and self-selection to supplement the system but in no sense to take it over.

Bill Rammell (Labour, Harlow)

I think that those comments were directed at the hon. Member for South Holland and The Deepings rather than at me.

I strongly agree with the hon. Member for Daventry about the importance of individual learning accounts. If he examines the commitments that we gave in the further education White Paper, he will see that we have made it clear that from September we will trial individual learning accounts at level 3. We all know the difficulties that we had with the original notion of individual learning accounts, but virtually everyone to whom I have spoken in the further education and training sector has acknowledged that that initiative, although there were flaws in its design structure, unleashed something in personal commitment to education and training that we should value and capture. That is why, in my view rightly, we are looking to trial those learner accounts from September.

On the specific arguments, the clause is about ensuring that there is a duty in relation to diversity and choice.

Rob Wilson (Conservative, Reading East)

We spoke earlier about savings to the Learning and Skills Council. Does the Minister agree that the provision of diversity and choice could actually lead to an increase in costs for the LSC? Once choice is introduced into the system, it has the potential to cause major shifts in the nature of the market because of the introduction of learner choice into the marketplace. Has an impact assessment of the potential for the LSC to incur increased costs been carried out?

Bill Rammell (Labour, Harlow)

The hon. Gentleman is eliding the issue of expenditure on administration, which was his original point, with expenditure on the provision of the service to the young person or adult. In terms of a variety of providers being able to meet that demand, we stand by the Government’s track record of investing in the further education and training sector in a way that has not happened in the past.

In certain circumstances, there will be a need to open up the market to new entrants, which is only one of a range of options that can be used to tackle poor quality. The right intervention will depend on the circumstances, but under the right circumstances contestability in competition can act as a powerful lever to raise quality by increasing the rewards to good providers and the penalties for poor providers. However, as we said in the White Paper, it is important that there is not competition for its own sake. The LSC will review provision every five years in each area to establish whether competition is needed to improve quality, promote innovation or expand provision, and new and existing providers throughout the country will be able to bid.

To respond to the point made by the hon. Member for Brent, East, all providers will have to meet rigorous quality criteria, which will include the ability and commitment to collaborate with other providers when appropriate and to deliver curriculum choice in 14-to-19 learning.

I want to make it clear that further education colleges have nothing to fear from that competition and the expansion of the demand-led approach. Before we launched the train-to-gain initiative, further education colleges were nervous about how successful they would be under it. In fact, they have been very successful in gaining the business, which demonstrates their quality and their success. I urge the Committee to agree that the clause stand part.

Clause 14

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 26, in clause 14, page 10, line 7, leave out ‘Learning and Skills Council for England’ and insert ‘Secretary of State’.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss amendment No. 28, in clause 15, page 10, line 40, leave out ‘Learning and Skills Council for England’ and insert ‘Secretary of State’.

John Hayes (Conservative, South Holland and The Deepings)

We are making progress and storming through our consideration of the Bill with the alacrity that one would expect.

Clause 14 concerns the power to incorporate further education colleges. In Wales, the power is being transferred to Welsh Ministers, yet in England, the powers are being transferred from the Secretary of State to the Learning and Skills Council. Why should the powers be held by accountable Ministers in Wales, but by the somewhat less accountable—I choose my words carefully—Learning and Skills Council in England?

These are probing amendments to discover from Ministers why the Learning and Skills Council is being given this role. I said earlier that the problem is not what the Bill contains, but what it does not contain, but at this juncture I want to point out an exception to that general rule. In some ways the Bill reinforces, or embeds, the Learning and Skills Council in a process of managing and funding skills that is not entirely consistent with where the Leitch review and its likely repercussions will take us. I suspect that in the coming months and years we might seek to remove powers from the LSC, rather than adding to its already extensive competence.

This small aspect of the Bill is an example of where it seems to me that we are embedding the authority of the LSC. When we come to consider the LSC’s relationship with further education colleges in respect of college principals, governors and managers, we will see another example. I thus qualify my earlier remark just to say, in that respect, that what the Bill does might not be helpful or in tune with current thinking. This probing amendment is designed to establish exactly what Ministers feel about that issue. I look forward to hearing the Under-Secretary’s response before deciding whether to test the mood of the Committee on this small but important matter.

Phil Hope (Labour, Corby)

The amendment moved by the hon. Gentleman would, in effect, maintain the current arrangements. We set out our ambition in our White Paper on FE reform entitled “Further Education: Raising Skills, Improving Life Chances”. Our ambition is a simplified and more flexible FE system, and we have the aim of improving performance, increasing choice and improving participation. It is by transferring the powers of the Secretary of State to establish or dissolve a FE corporation to the LSC that we are underpinning the reforms that we set out in that White Paper.

Under the current arrangements, the Secretary of State’s decision to establish or dissolve FE institutions is based on information and a recommendation provided by the LSC. By transferring those powers to the LSC, we are making the current practice simpler, quicker and less bureaucratic—I must say that I think that it will also be more transparent.

Having listened to the hon. Member for South Holland and The Deepings debating issues of bureaucracy in many other parts of the House, I am sure that he would welcome the fact that the clause will not only improve the pace at which decisions can be made and the transparency of those decisions, but reduce the bureaucracy involved. As the LSC is the body responsible for planning and funding high-quality education and training, both for young people and adults, we believe that it is best placed to ensure that the most appropriate delivery arrangements are in place for learners in any particular area.

I want to make the important point that we will retain the current requirement that the LSC must publish proposals to establish and dissolve FE corporations, with some appropriate modifications. That requirement is set out in regulation—S.I. 2001, No. 782. In particular, there is a requirement to consult local partners and consider their views before any proposals are finalised. I hope that that gives the hon. Member for South Holland and The Deepings the assurance that after making this technical change, there will be no diminution in the extent of consultation or engagement with the local community.

John Hayes (Conservative, South Holland and The Deepings)

One can imagine the circumstances that the Minister describes being fairly dramatic ones. The power that we are discussing would be unusual and would not be exercised in the usual course of events. What right of appeal would there be? What procedure would take place in respect of an appeal? Also, at what point and in what circumstances would the Secretary of State take the power? Answers to those questions might be beneficial to the Committee as we try to decide whether we need to vote on this issue.

Phil Hope (Labour, Corby)

The regulations spell out the conditions under which the LSC must publish its proposals. Clause 16 goes into more detail and clause 10, which we have already considered, gives further clarification on the directions that a Secretary of State might need to give if the LSC was to make a decision that could be described as unreasonable or flawed in some way. The Secretary of State will still have the ability to intervene if he judges that a decision falls into one of those categories. We have considered already clauses that will give the Secretary of State the opportunity to intervene when those rare circumstances occur.

John Hayes (Conservative, South Holland and The Deepings)

I am seeking clarification because I am beginning to regret the fact that we sped through clause 10—it sounds like we should have had an immensely detailed debate on it. However, will the Under-Secretary be absolutely clear? He said that if the Learning and Skills Council was to act in an unreasonable or perverse way, the Secretary of State would have the power to intervene. Could that be stimulated by an appeal? Would there be an opportunity for those affected to make a case to the Secretary of State? Are there circumstances in which his scrutiny would be required?

Phil Hope (Labour, Corby)

Clause 16 clarifies the process under which the LSC must publish, consult on and carry forward its proposals. A complete process is in place whereby local partners and others affected by its decisions can be consulted formally on the proposals and see the LSC’s decision-making process. I hope that that gives the hon. Gentleman the reassurance that he requires.

If the Secretary of State feels that the LSC has failed to discharge its duty to publish proposals or to carry out that consultation process, or that it is proposing to act unreasonably, he can issue directions. I hope that we have processes in place to ensure that there are opportunities for individuals to influence the LSC’s decisions through the publication of, and consultation on, its proposals, and a fall-back position if the LSC is deemed to have acted unreasonably or failed to discharge its duty.

John Hayes (Conservative, South Holland and The Deepings)

The Under-Secretary is being immensely generous in giving way and clarifying his position. Will he deal with my initial point about the apparent inconsistency between Wales and England? I made the point that one set of circumstances will apply on one side of the border, but that a different one will apply on the other. It would be helpful if he made clear his views on that.

Phil Hope (Labour, Corby)

I regret not responding to that point before. The power to establish FE corporations in Wales was transferred to the National Assembly for Wales in 1999. By virtue of the Government of Wales Act 2006, that power thus transferred to Welsh Ministers when the new First Minister was appointed. The clause thus makes no substantive change to the situation in Wales, unlike the decisions that affect England. On that basis, I urge the hon. Gentleman to withdraw his amendment.

John Hayes (Conservative, South Holland and The Deepings)

We are making such good progress that I think that it would be unreasonable to press the amendment to a Division. I beg to ask leave to withdraw the amendment.

Clause 15

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 27, in clause 15, page 10, line 26, leave out subsection (4).

Having started somewhat slowly, we are moving ahead with great speed. I note that my hon. Friend the Member for Upminster, with her typical efficiency, has passed me the details of the amendment. It would delete the provision that states:

“An order under this section made by the Learning and Skills Council for England in respect of a further education corporation in England may provide for the transfer to the council of property, rights and liabilities of the corporation”,

and that the

“council must obtain the consent of the Secretary of State before making provision of a kind mentioned in subsection (3A).”

The gist of my argument is similar to that on the previous group of amendments: the subsection seems to transfer power to the Learning and Skills Council. We are concerned throughout our consideration of the Bill that the necessary accountability for decisions, which rests quite properly with Ministers through this place, should be maintained. Official Opposition Members have some reservations about the power of the Learning and Skills Council and the way in which it is exercised.

Let me lay my cards on the table in that respect because it is important that we are not seen to be dogmatic about this subject. Of course, we recognise that much of the work of the council is necessary and that much of the money that it spends would be spent under whichever structure were to ensue from changed considerations of policy in this area.

We do not believe that we will save all that the council spends simply by changing the structure. Heaven knows that the vast bulk of that money is spent for good purpose, but that does not mean that there is neither room for greater efficiency, nor scope for reducing bureaucracy, given that we are talking about a budget that is considerably bigger than that of the Royal Navy. The Government have acknowledged that in what they have said today and previously. The structural changes that they believe will make the body more lean and efficient have been advertised to the Committee and have been set out previously. Ministers say that they are determined to ensure that there is the kind of value for money that is bread and butter to Conservative Members because efficiency and effectiveness are our second names in the official Opposition.

We recognise that there has to be a management and funding structure and expenditure on such matters, but we want to test Ministers throughout the Committee to ensure that all the money that is expended is best spent for the best purpose. With this amendment, as with the last one, we want to be absolutely sure that, in transferring authority to the Learning and Skills Council, we do not embed a system that could be improved. I await with interest the Minister’s comments on those matters.

Phil Hope (Labour, Corby)

I congratulate the hon. Gentleman on coping so well with the pace of the Committee’s proceedings so far. The amendment would prevent the transfer of property rights and liabilities by the Learning and Skills Council to itself when a further education corporation is dissolved. Why do not we wish to support that amendment? Under the current arrangements, the Secretary of State may, by order, transfer to the LSC the property rights and liabilities of a dissolved further education corporation, where he deems it necessary and appropriate. In future, it is possible that the LSC might need temporarily—I emphasis that word—to transfer such rights and liabilities to itself, to achieve the best results for an area. In what circumstances might the LSC need to do that? It might happen if it were not possible to find a suitable alternative body to which to transfer the property when two colleges merge, for example.

A merger is a common reason for dissolving FE corporations—seven mergers of FE corporations will take effect during the summer, and more are under discussion. That is part of the process of developing the FE system. The mergers have been discussed and planned over time to ensure more effective local arrangements. It will be a temporary requirement in cases where we cannot find a suitable alternative body to which to transfer the property. In such cases, we will require the LSC to seek the prior agreement of the Secretary State before it transfers the assets to itself as part of the process of managing the merger. It is expected that the provision will be used rarely, if at all. However, we are trying to anticipate situations that might arise and provide contingency arrangements. I ask the hon. Gentleman to withdraw the amendment, given my account of the purpose of the clause and the safeguards that we are putting in place.

John Hayes (Conservative, South Holland and The Deepings)

I understand those safeguards, and, given the Minister’s comments, I beg to ask leave to withdraw the amendment.

Clause 16

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 29, in clause 16, page 11, line 4, leave out subsection (2).

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss the following amendments:

No. 19, in clause 16, page 11, line 10, leave out ‘and (2A)’ and insert ‘(2A) and (2B)’.

No. 20, in clause 16, page 11, line 16, at end insert—

‘(2B) The third requirement is that the council—

(a) has regard to any representation from a local authority which has children’s services and education responsibilities in the area in which the establishment or dissolution of a further education corporation is proposed, and

(b) provides such an authority with written reasons for any decision to establish or dissolve a corporation.’.

No. 36, in clause 16, page 11, line 16, at end insert—

‘(2B) The third requirement is that, when the council is considering proposals to establish or dissolve furthereducation corporations, it must abide by guidance as set outin subsection (2C).

(2C) The council must, after considering representations, publish a policy statement which must include reference to—

(a) the preferred structure of provision of post-16 education;

(b) the need to ensure a choice of qualifications and courses at all levels;

(c) the impact of any new provision of post-16 education on existing providers of post-16 education;

(d) the procedure to be followed when two or more further education corporations are seeking to merge.’.

John Hayes (Conservative, South Holland and The Deepings)

This, in a sense, is more of the same, because with clause 16 we are in the business of empowering the Learning and Skills Council and qualifying those powers. Much of this part of the Bill, as I said at the beginning of the sitting, is about changing structure and competence with respect to the Learning and Skills Council. It is important that accountability should be retained, that the circumstances in which the competencies are exercised should be, as the Minister said, transparent and, therefore, well understood by all concerned and that there should be appropriate sets of safeguards to ensure that perverse or unreasonable decisions can be challenged from the bottom up.

My anxiety about this part of the Bill—although the Minister has been reassuring about previous clauses—is that that transparency may not be all that it should be and that the lines of accountability will become more blurred. The amendment is intended to probe in that respect. The clause would make modifications to the 1992 Act, reflecting the transfer of powers to establish and dissolve further education corporations, and we have concerns about that.

We look to a halcyon age of FE colleges. I am disappointed that my hon. Friend the Member for Daventry has had briefly to leave the Committee, as he has already made a telling contribution to our considerations. He was one of those hon. Members who were pivotal in establishing that halcyon age of incorporation. Many college representatives tell me that they look back to those golden days, post-incorporation, when the FEFC provided light-touch regulation, affording them a degree of freedom to innovate and excel. College principals to some degree feel that much, or at least some, of that has been lost since, with an altogether more bureaucratic structure surrounding them, and an unhelpful level of micro-management.

Austin Mitchell (Labour, Great Grimsby)

All this talk about a halcyon age under the Tories is bringing tears to my eyes. Does the hon. Gentleman agree, as an avid reader of Private Eye’s higher education supplements, that that halcyon age of freedom also led to problems? Companies were established and failed; relationships were established with Singapore, Malaysia and elsewhere—there was scandalous extortion; and there were various financial problems accruing from the power given to principals to run colleges’ financial affairs in theirown way.

John Hayes (Conservative, South Holland and The Deepings)

I shall break a habit, Mr. Atkinson, because I generally do not repeat private conversations in Committee or on the Floor of the House but I must reveal to you that the hon. Member for Brent, East and I had a conversation before the Committee began. She implored me not to speak at too great length or indeed—

Austin Mitchell (Labour, Great Grimsby)

Why?

John Hayes (Conservative, South Holland and The Deepings)

Members across the Committee begged me to take no notice of the hon. Lady. They told me that I should not restrain myself and that within the very strict guidance of a diligent Chairman, I should feel free to range widely because they enjoy my casting pearls before them, but I owe an obligation to her—I know that she has a busy social diary and I do not want to keep her from it.

Austin Mitchell (Labour, Great Grimsby)

If the hon. Gentleman is casting pearls, what are we?

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman has rightly drawn attention to the price of freedom. In a world which is frail and faulted, as we have fallen from the state of grace, the price of liberty is that sometimes there are imperfections in the way in which individuals and organisations operate. If the choice is between the risk of that kind of imperfection and a system which is so strangled by bureaucracy and so micro-managed from the centre that every opportunity for any kind of imaginative exercise of the very substantial talents that lie in the FE sector is limited, I will go with the risk of imperfection. I would rather that than see people constrained; strangled and suffocated by bureaucracy, over-regulation and control freakery. I know the hon. Gentleman would no more want to see that than Opposition Members would. I happily give way to the Minister, as we are running into lunch.

Bill Rammell (Labour, Harlow)

I thank the hon. Gentleman for giving way. In terms of the pearls of wisdom he is positing before the Committee, I have to place on the record that in the last two years I have not met one further education college principal who has told me that we should return to the halcyon days of the Further Education Funding Council. If, however, in my extensive conversations with numerous FE principals round the country I have missed somebody, perhaps the hon. Gentleman could tell us which individual said that we should return to that structure.

John Hayes (Conservative, South Holland and The Deepings)

I have already revealed one small element of our private discourse, and I hope that the hon. Lady will forgive me, but now I shall reveal something more. I hope that in the course of the time that I do my job—I shadow half of one Minister and the whole of another, so I am doing one and a half jobs—the Opposition can lay out a plan for how we might move to a system where colleges were self-regulated to a much greater degree.

I am not saying anything very controversial. That was the recommendation of the Government’s own report, the Foster report. Sir Andrew Foster said that colleges should move to self-regulation by degree. He lamented the fact that there are 17 bodies with a supervisory, inspection or regulatory role in respect of FE colleges. We will happily put forward plans during what I hope will be our short period in opposition, which is becoming shorter by the day, that will provide the opportunity, when we enter government, to move to circumstances where colleges can enjoy a much greater degree of freedom because that freedom will allow them to innovate and excel.

Peter Atkinson (Conservative, Hexham)

Order. Before the Minister replies, may I remind the Committee that we started off discussing the dissolution or the establishment of further education corporations? We seem to be talking on a rather wider level than was perhaps justified by the amendments.

Bill Rammell (Labour, Harlow)

Very briefly, Mr. Atkinson, I take your guidance, but an important point has been raised. I also want to ensure that we do not get on to clause 17 before this afternoon. The hon. Gentleman has talked about the importance of self-regulation, and I agree with him. Is he not aware of the body of workand the working party that we have established under Sir George Sweeney’s chairmanship? It is taking forward that agenda on self-regulation.

John Hayes (Conservative, South Holland and The Deepings)

The Minister says that the Government are advancing self-regulation and, to draw attention to the specifics of this amendment, it is critically important that we are bold and brave about taking the necessary steps to ensure the kind of freedoms that I have described. It is not appropriate to maintain the level of bureaucracy. The Government have abolished one body and added another with a role in managing, regulating or controlling FE colleges during the hon. Gentleman’s tenure. I am not sure that shows the kind of determination that I want to see in respect of the Foster recommendations.

We need to be much bolder and braver about allowing for a system which is diverse, subject to much greater levels of local accountability and is less directly managed from the centre. If one follows through the combination of Leitch and Foster and moves to a demand-driven system with a heavy emphasis on local economic activity and need, with deregulated colleges we could have a system in which colleges were responsive and imaginative in the kind of partnerships that they form to deliver the skills agenda, to which this side of the Committee is committed and which the Government are grudgingly and hesitatingly following us towards.

Peter Atkinson (Conservative, Hexham)

I remind the Committee that with this we are discussing the following:

No. 19, in clause 16, page 11, line 10, leave out ‘and (2A)’ and insert ‘(2A) and (2B)’.

No. 20, in clause 16, page 11, line 16, at end insert—

‘(2B) The third requirement is that the council—

(a) has regard to any representation from a local authority which has children’s services and education responsibilities in the area in which the establishment or dissolution of a further education corporation is proposed, and

(b) provides such an authority with written reasons for any decision to establish or dissolve a corporation.’.

No. 36, in clause 16, page 11, line 16, at end insert—

‘(2B) The third requirement is that, when the councilis considering proposals to establish or dissolve furthereducation corporations, it must abide by guidance as set out in subsection (2C).

(2C) The council must, after considering representations, publish a policy statement which must include reference to—

(a) the preferred structure of provision of post-16 education;

(b) the need to ensure a choice of qualifications and courses at all levels;

(c) the impact of any new provision of post-16 education on existing providers of post-16 education;

(d) the procedure to be followed when two or more further education corporations are seeking to merge.’.

John Hayes (Conservative, South Holland and The Deepings)

Thank you, Mr. Atkinson. We have all had a splendid lunch and have enjoyed the break from our deliberations, but we are now pleased to be back considering matters with the diligence for which members of this Committee are legendary. We are returning to clause 16, and I do not want to delay the Committee for long because we anticipate with excitement clause 17, which is very important, and I have no doubt that there will be long perorations upon it by all concerned.

Let me wrap up clause 16 by saying that I listened closely to what Ministers said about the Learningand Skills Council and its relationship with the Government and all the other agencies associated with funding and delivering skills in line with Government targets and popular expectations. I remain concerned about the relationship between the LSC and those partners, but Ministers have been immensely reassuring about their determination to ensure that there is accountability for the LSC’s work; that the powers that are invested in it will be used cautiously and moderately; and that, should there be any lack of reason about that, there will be safeguards in the form of the checks and balances that the Minister has described.

We have tried to probe Ministers on that, becausewe reflect what I think is a widespread concern thatit would be wrong to transfer powers unless such protections are built into the system. Having heard what the Minister said on the previous set of amendments, we look forward to hearing what more he has to say in response to my brief but important comments on this aspect of the Bill.

Sarah Teather (Liberal Democrat, Brent East)

Our amendments Nos. 19 and 20 are probing amendments to test the relationship between the regional councils and local authorities rather than local area agreements. Local authorities are 14-to-19 strategy leaders, a point which was reaffirmed in the White Paper. They have duties to ensure the provision of courses for pupils aged 14 and above, to fulfil every child’s educational potential, to monitor admissions in the area, to plan the provision of school places and to co-ordinate building schools for the future funding. All those roles will be affected by any decision to close, open or merge FE colleges.

We would like a reassurance from the Minister that the Learning and Skills Council will not only consult local authorities but will actually take notice of what they say. There is a danger that when it is written intoa clause such as this, or the guidance that goes withit, that a body should consult a local authority, consultation is often about going through the motions. Obviously, if local authorities are to be the strategic lead for 14-to-19 education, we need to be quite clear what will happen if there is a conflict of interest. Will the Minister outline what would happen if a local authority were opposed to a merger of two colleges in an area, or to the closure of a college, because it believed that that would have a dramatic effect on the provision of places? What would happen if the council sought to override the local authority’s views?

Phil Hope (Labour, Corby)

Lunch has not dimmed my memory of the comments of the hon. Member for South Holland and The Deepings in introducing his amendment. Other members of the Committee and I remember that he was describing the halcyon days of further education under his party’s Administration—days when, instead of £500 million, nothing was being spent on capital improvements in the sector.

Tim Boswell (Conservative, Daventry)

Albeit not intentionally, the Minister has directly challenged me on my record of ministerial responsibility. Does he recall that one of the difficulties in those days was that all the money as a result of the Hunter recommendations was made available by central Government through the Further Education Funding Council in order to repair the failures of various local authorities—under different political control, no doubt—in the stewardship of their buildings? Money was needed just to meet basic health and safety requirements in the buildings, so that teachers could teach in them.

Phil Hope (Labour, Corby)

I am grateful to the hon. Gentleman, who was—

Bill Rammell (Labour, Harlow)

Guilty.

Phil Hope (Labour, Corby)

The hon. Gentleman was the Minister responsible at the time for aspects of the system. I presume that that is why he supports what we now have in place, which allows the Government to invest such huge amounts of capital and revenue in the system. I take his comments as support for our spending plans, and I will put that on the record as something that the Front-Bench spokesmen for his party might like to note when they come to producing their thoughts for the future.

I am also pleased that success rates are better and that more young people and adults are learning than in the halcyon days that the hon. Gentleman remembers. There is more innovation and greater self-regulation. In fact, the hon. Gentleman might regret his description of those days in introducing the amendment, giventhat FE colleges are now the engine driving skills attainment in this country. They have capital and revenue resources that they simply did not have before. Indeed, their funds were cut by some 14 per cent. in the five years in the run-up to 1997, as opposed to a 48 per cent. increase under this Government. When we see the record numbers of learners with level 2 and level 3 qualifications today, we can be very proud—on this side of the House, at least—of the record and achievements of the FE sector and the support that this Government have given to it.

Clause 16 sets out the arrangements for publishing proposals to establish and dissolve further education corporations. Amendment No. 29, which was tabled by the hon. Gentleman, proposes to leave out clause 16 (2), which is linked to clauses 14 and 15, and our plans to transfer powers to establish and dissolve FE corporations from the Secretary of State to the Learning and Skills Council. I set out our reasons for taking those steps when we debated clause 14.

I am sure that the hon. Gentleman recognises the difficulty with the amendment. It would introducean inconsistency within the Further and Higher Education Act 1992, such that legislation relating to the publication of proposals would simply become inoperable. The amendment would not work in practice, even were we to agree with it in principle, which we do not. Therefore, I hope that he will withdraw it simply because it will not work.

On amendments Nos. 19, 35 and 20, we are all rightly concerned about ensuring that the wider community, including the local authority, is consulted on proposals to establish or dissolve further education corporations. I want to reassure members of the Committee that consultation of that kind is already a key part of the process for establishing and dissolving further education corporations.

Regulations are in place—they have been circulated in advance to Committee members—that set out the process for publishing proposals to establish and dissolve corporations. Some minor amendments might have to be made to reflect the transfer of powers from the Secretary of State to the LSC. However, in effect, we intend to keep the current processes in place, so the hon. Member for Brent, East can be assured thatthe current system for publishing and consulting on proposals will continue.

The regulations set out the type of information that must be included in a proposal and the manner of publication. The regulations, which will be updated, require all proposals for mergers or new colleges to be sent to the local authority of the area in whichthe further education corporation is situated. That requirement will continue. Nothing will change and those safeguards will remain. Under clause 16, the LSC is required to take account of all representations made to it within a prescribed period—the very wording that the hon. Lady was seeking.

Local authorities will have information on the rationale behind the proposed action as well as the ability to make comments, which must be considered before a decision is made.

Sarah Teather (Liberal Democrat, Brent East)

I thank the Under-Secretary for giving way. His comments are very helpful. However, may I return to the point that I made at the end of my remarks? What would happen if there was a conflictof interest? What would happen if a local authority opposed a regional council’s proposal for a merger, or opening or closure of a college, because it felt strongly that the provision of places for 14 to 19-year-olds would be affected? I understand that the council will have a wider remit, but who has the lead on 14 to 19-year-olds and what would happen if the local authority disagreed?

Phil Hope (Labour, Corby)

As we debated on earlier clauses, if the LSC is deemed to have acted unreasonably, the Secretary of State could intervene. However, it would have to be demonstrated that the LSC had acted unreasonably or had not pursued its duties as spelled out in clauses and regulations. If such circumstances were to arise, the local authority could ask the Secretary of State to intervene. However, that would not cover a straightforward disagreement aboutthe right way forward. Clearly, if there were a disagreement, the LSC could make its decision and take it forward.

Sarah Teather (Liberal Democrat, Brent East)

This might be obvious to everyone else in the Committee, but I want to be sure: would the local authority apply in writing to the Secretary of State or is there a formal process to get him to intervene?

Phil Hope (Labour, Corby)

It would need to demonstrate—I suppose that this might be the process—that the LSC had acted unreasonably. It would have to demonstrate that the proposals are unreasonable, that the LSC published and took them forward in an unreasonable way, or that it used its powers under the Bill in a way that was ultra vires. That is the mechanism that the local authority would have to use in order to ask the Secretary of State to intervene. However, I am certain that those circumstances will not arise due to the nature of the Bill, which requires the LSC to publish and consult on all proposals and to take account of all representations. That means that the hypothetical situation described by the hon. Lady will not arise.

We believe that the appropriate vehicle for the procedures that I have described are the regulations, which set out the details of the process for establishing, dissolving and merging further education corporations. We do not think, therefore, that it is appropriate to write into primary legislation a requirement to inform local authorities of the reasons for establishing or dissolving an FE corporation. That would lead to unnecessary bureaucracy, because the rationale behind the reasons for opening or closing an FE corporation will have been set out in the original proposal, which would have been sent to the local authority and consulted on. When the LSC has made a decision, it will write to the FE corporation or new institution. That letter is then copied to key partners, including the local authority. The current arrangements, which we are not changing, are working very well and already provide for the requirements proposed.

Amendment No. 36 would impose a requirementon the LSC to publish a detailed policy statement following the statutory consultation period, which is undertaken for every proposal. It largely duplicates information included in the already published proposal and would lead to an unnecessary and burdensome increase in bureaucracy. The LSC will already have considered current provision in the local area, the need to ensure choice across the area and the impact of a new or alternative provider on existing provision.

In England, further education corporations work with the LSC to ensure that the right structures are in place locally, which might include a number of options for the future, merger being the most common reason for dissolving a further education college. Any merger option that emerges will have been discussed, developed and planned over a long period, all of which will ensure that more effective arrangements are in place locally. I emphasise that the local authority will play a key role, especially in relation to its duties in respect of 14-to-19 provision.

I hope that with those assurances, and those that I gave earlier on the guidance and regulations, thehon. Gentleman will accept that the amendment is unnecessary and ask leave to withdraw it.

John Hayes (Conservative, South Holland and The Deepings)

Once again, we have had assurances from the Minister, but I remain doubtful about some of them. However, the Minister’s response to the points made in the debate was thorough and robust, and I therefore beg to ask leave to withdraw the amendment.

Clause 17

Bill Rammell (Labour, Harlow)

I beg to move amendment No. 2, in clause 17, page 11, line 38, at end insert—

‘( ) After subsection (2A) (as inserted by subsection (4)) insert—

“(2B) Where the Privy Council is considering whether to make an order under subsection (1) above specifying an institution as mentioned in subsection (1)(b) above, the Privy Council may not make the order unless—

(a) the institution gives the Privy Council a statement setting out what it proposes to do as regards making arrangements for securing that any person granted an award under or by virtue of any power that would be conferred on the institution if the order were made (other than the power described in subsection (4A) below) has an opportunity to progress to one or more particular courses of more advanced study, and

(b) the Privy Council considers that the proposals are satisfactory and are likely to be carried out.”’.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to take amendment No. 7, in clause 17, page 11, line 38, at end insert—

‘( ) After subsection (2A) (as inserted by subsection (4)) insert—

“(2B) Where the Privy Council is considering whether to make an order under subsection (1) above specifying an institution as mentioned in subsection (1)(b) above, the Privy Council may not make the order unless—

(a) the institution gives the Privy Council a statement setting out what it proposes to do as regards making arangements for securing that any person granted an award under or by virtue of any power that would be conferred on the institution if the order were made (other than the power described in subsection (4A) below) has an opportunity to progress to one or more particular courses of more advanced study;

(b) the Privy Council considers that the proposals are satisfactory and are likely to be carried out; and

(c) the Privy Council has published the criteria by which proposals are considered satisfactory.”’.

Bill Rammell (Labour, Harlow)

We have come to the most substantive element of the Bill, which some people regard asthe most controversial. Since the beginning of our deliberations, I have been clear that we need as much innovation and flexibility as possible within the further and higher education system in order to respond to the need of business for a higher level of skills. In that regard, we are absolutely right to say that highly performing further education colleges should be able to award their own foundation degrees.

I listened carefully to the concerns expressed, especially by higher education institutions such as universities. I bow to nobody in my respect and regard for the incredibly high quality of provision in our higher education institutions. It is an area in which we are genuinely world leaders. When the Associationof Colleges organised a debate in the Houses of Parliament, David Melville, the vice-chancellor of Kent university, who supports the Government’s proposals, reminded us that at every stage of the expansion of the higher education system there has been significant opposition from existing universities. He related the fact that when the university of London was created there was opposition from Oxford and Cambridge, and similar opposition when the red bricks were created and when the binary divide was removed.

Although there are some genuine concerns, there has at least been an impression of protectionism in some of the debates and discussions. That is wrong in principle, and unnecessary, because in respect of foundation degrees, we are talking about a substantially expanding market moving from about 61,000 qualifications today to 100,000 towards the end of the decade. The small print of the Leitch report and our likely response shows that we may move beyond that. It is important to put the proposal in that context and to address the concerns that have been raised.

A great deal of debate has been stimulated by the proposals, and I am grateful for the constructive approach of the Front Benchers from both Opposition parties and for the way in which they handledthe arguments and put forward their concerns. The Government have listened carefully and have responded to those concerns. The proposals on foundation degree awarding powers have been developed in response to the debate, and a number of Government amendments, tabled in another place, show that we are managing the risks associated with the new measures. It will help if I detail some of those changes.

First, we expect there to be a probationary period of six years during which time the ability of colleges with foundation degree awarding powers to authorise other institutions to make awards on their behalf or to award foundation degrees to students enrolled elsewhere will be restricted. Secondly, an independent report on the effect of the new powers will be made to Parliament within four years. The changes that we are making are important and significant, and it is right that a reportis made to Parliament on their impact. Thirdly, the non-statutory guidance and criteria for applicants have undergone careful revision in response to comments and suggestions.

I now turn to the thrust of Government amendment No. 2 and the question of progression or articulation between foundation degrees and programmes of more advanced study. That issue is exceedingly important, as it bears directly on issues of student experience and the protection of quality standards, which are a major concern.

When considering an application for foundation degree awarding powers, the Privy Council will take advice from the Quality Assurance Agency. The non-statutory draft guidance and criteria that have been circulated to members of the Committee will form the basis of the QAA’s assessment of an applicant institution. Consideration of progression arrangements will be one important aspect of that assessment. The draft guidance and criteria make it clear that progression routes are a core feature of all foundation degree programmes—they always have been, andthey will continue to be so regardless of where the qualification is awarded. The guidance states that progression is expected to be

“to at least one bachelor’s degree with honours, with an expectation that this should not normally exceed 1.3 years for a full time equivalent student in England, or to an appropriate professional qualification or other qualification at level 6 in the National Qualifications Framework”.

It is important not to forget that foundation degrees are a self-standing higher education qualification, and that many employers and learners value them as such. We should not devalue that through our language in debate. Nevertheless, opportunities for progressionto further study are exceedingly important. We are committed to education as a lifelong engagement, and foundation degrees open up opportunities for those who might not have gone into higher education through the traditional routes. The opportunity to study for a foundation degree locally at an FE college would be very appealing to many non-traditional students. The proposals will therefore help widen participation in higher education, which is fundamental.

Making progression arrangements is important in order to ensure that foundation degrees have an equivalent or equal academic value wherever the qualification is awarded. All students will have the opportunity to undertake more advanced study, wherever they choose to take their foundation degree.I certainly do not want a two-tier system of qualification.

Given the prominence of the issue and our concern to protect standards and student experience, we have committed ourselves to addressing the question of progression. My noble Friend Lord Adonis made that commitment on Third Reading in the other place, and I reiterated it on Second Reading in this House.

The Government amendments would prevent the Privy Council from making an order specifying that a further education institution in England is competent to grant foundation degrees unless it receives a statement from that institution setting out what arrangements it proposed so that students awarded one of its foundation degrees had the opportunity to progress to at least one course of more advanced study. The Privy Council must also consider whether the proposals are satisfactory and likely to be carried out. In a very significant way, that addresses some of the concerns that have been put forward.

As drafted, the amendment preserves the flexibility that is essential to allow innovation in the development of foundation degree programmes over time. My noble friend Lord Adonis stressed the importance of that flexibility when he committed to tabling an amendment. The Government amendment does not place substantially additional burdens on applicant institutions, which is important. Making a statement about proposals for ensuring progression would form part of the critical self-analysis that any institution applying for degree-awarding powers carries out, and it will also be the basis for any application for foundation degree-awarding powers.

I should also be clear that we are not introducing an entitlement progression from a progression degreeto more advanced studies. Admissions policies and procedures remain, rightly, a matter for individual institutions. The amendment means that in order to get foundation degree-awarding powers the applicant will have to show what it is proposing to do about providing appropriate opportunities for progression to more advanced programmes of study.

Opportunities must be available to any student who is awarded any of the institution’s foundation degrees, once it has foundation degree-awarding powers. The statement made by an application will need, in a very real sense, to look at the current situation, as well as be forward-looking. It will set out the institution’s strategy for securing progression arrangements for foundation degree programmes that it might establish in future, as well as those that have already been developed.

The Quality Assurance Agency places importance on establishing maintaining progression routes for foundation degree students. It has commented:

“The recommending of a institution for foundation degree awarding powers would be on the assumption that a further education institution would operate its powers in the manner anticipated when the application was assessed. The failure to ensure progression routes would be a serious matter, and might constitute grounds for QAA intervention.”

Tim Boswell (Conservative, Daventry)

Will the Minister give way?

Bill Rammell (Labour, Harlow)

I will finish the quotation from the QAA and then I will give way.

“The review of the cause for concern would look at the issue of persistent failure and make recommendations accordingly.”

Tim Boswell (Conservative, Daventry)

In support of what the Minister is saying, would he also tell the Committee whether he is satisfied that the powers to require reporting by the body that awards foundation degrees to the QAA are sufficient to make it possible for the QAA to make a proper appraisal? It is all very well to sign things off initially, but it is important that they are monitored in practice, and that progression is assured.

Bill Rammell (Labour, Harlow)

That is an important point, and the criteria and powers are no different in substance from the way in which full degree-awarding powers are dealt with at the moment. By that, I mean that there is an ongoing responsibility on the part of the QAA to monitor progression, and there can be intervention if those progression arrangements fall into disrepair.

It is also important that we should be clear that further and higher education institutions should work together to promote the opportunities that they offer, as they already do. It is in the institutions’ interests to market the programmes and progression routes that they offer to attract and retain students. However, in that regard, I do not agree with the hon. Member for South Holland and The Deepings, that we need to legislate for that. There is no reason why the proposals in clause 17 will undermine existing good practice in terms of joint promotion of foundation degrees and progression routes. However, I am sure that he will have an opportunity to come back at me, and I shall respond to some of the detail of the argument that he is making.

I turn now to amendment No. 7, tabled by the hon. Members for Brent, East and for Leeds, North-West. The amendment is, in many senses, identical to the amendment that I have tabled, except that it also provides that the Privy Council must not make an order granting foundation degree-awarding powers unless it has published criteria by which an institution’s proposals with regard to progression will be considered to be satisfactory. As I have already said, we have already published draft non-statutory guidance and criteria for foundation degree-awarding powers. They have been developed in close conjunction with the QAA, which will assess all applications for foundation degree-awarding powers and advise the Privy Council on whether the criteria have been met. A copy of that document has been circulated to all members of the Committee, and with the Committee’s permission, I will now say a few words about what that document covers.

To determine whether an applicant institution’s statement of its proposals about progression arrangements is satisfactory, the Privy Council could consider such factors as whether the institution’s academic management is sufficiently robust to ensure that progression routes are and will be established, both now and in the future, and whether the institution can be relied on to renew progression arrangements or to seek new ones if the old ones should lapse, with the help of a third party organisation, such as Foundation Degree Forward, if necessary.

In order to be satisfied that the proposals are likely to be carried out, one of the matters that the Privy Council could examine is the actions that have already been taken by an institution with regard to making arrangements for progression from foundation degree courses that are in preparation. Assuring standards and safeguarding the interests of the learner are paramount. An important aspect of that process is preserving the flexibility and potential for innovation that has already made the foundation degree such a highly valued qualification. Institutions, programmes and the needs of learners and employers change over time and it is right that the QAA should be able to take account of such evolution when it assesses applications for foundation degree awarding powers.

We will conduct a full consultation on the guidance and criteria as and when this Bill completes its passage. That process will provide an opportunity for interested parties to influence development of this document, including the guidance on progression. A statutory provision that, in effect, requires the Privy Council to publish its criteria in those circumstances is, I think, superfluous.

Government amendment No. 2 is robust. I believe that it addresses this issue in the most appropriateway. The draft guidance and criteria, including the QAA’s foundation degree qualification benchmark,are transparent published documents, which include detailed statements on how progression routes should be established, maintained and promoted, and how an applicant institution should demonstrate to the QAA that it is doing that.

I hope that, in the light of my remarks, the hon. Members for Brent, East and for Leeds, North-West will feel able to withdraw their amendment.

Sarah Teather (Liberal Democrat, Brent East)

As the Minister has said, we are now turning to the most controversial aspect of the Bill. I want to acknowledge how far the Government have moved since the Bill was first published.

A great deal of amendment and a number of reassurances on record were gained in the other place. Personally, I felt rather frustrated when the Bill was first published, as I realised how little consultation had been undertaken with the relevant sector about this clause, but that is water under the bridge. The Government have moved a long way here and we are not opposed to the awarding of foundation degrees by FE institutions. However, we want to be sure that progression routes are in place and that quality is assured; we will deal with some of those points when we come to the next group of amendments.

It is worth making a few comments about foundation degrees in particular. The Minister said that they have been very successful since they were introduced in 2001. It is remarkable that just over 4,000 students were studying for such foundation degrees in 2001, but the number has now risen to more than 60,000 students and, as the Minister stated, the aim is that it should rise further to 100,000 students. Eighty universities currently deliver or validate these qualifications. Forty-six per cent. of these students are taught in higher education institutes and 54 per cent. in FE institutions. In 2006, more than 2,000 foundation degree courses were running. The figure of 54 per cent. of students progressing on to an honours degree is the most important aspect, and that is the point that we were trying to make in the amendment.

I recognise perfectly well the point that the Minister made, that we should also accept that foundation degrees are an important qualification in their own right—an important stand-alone qualification. I also think that some of the concerns that higher education institutions have expressed about the need to ensure that all students can progress to an honours degree, and only to an honours degree, fail to acknowledge that many students wish to progress to other qualifications. The Minister said that many students wish to progress to a professional qualification, or to another form of work-based learning.

Government amendment No. 2 goes most of the way towards meeting our concerns about progression routes, but we are trying to establish whether those routes are guaranteed in practice. We wanted the Privy Council to publish the criteria by which it will decide whether progression routes are satisfactory. I am grateful to the Minister for putting on record those points about guidance, which were extremely helpful.

In common with the Conservatives, as we will hear when they speak, we wish to ensure that progression routes are in place not only at the moment when degree-awarding powers are given, but in perpetuity. The Minister said that if those routes fell down for some reason, that could be grounds for the QAA to step in. He said that, essentially, the same routes are in place to ensure progression with foundation degrees at the moment; will he clarify that? Currently, there have to be progression routes in place for a foundation degree, but they would quite clearly be with the particular institution that is validating the qualification. We are dealing with a different scenario, because the qualification will not be validated by that higher education institution. There might be a range of relationships with higher education institutions, so different criteria are required to ensure it is clear that progression routes are in place. It is easy for agreements to break down, as they might be quite fluid. We have to ensure that the routes are picked up again for the same students. It is not good enough for the routes to disappear and be picked up again in two years’ time if it means that a cohort of students is unable to take advantage of them.

Roberta Blackman-Woods (Labour, City of Durham)

As I have not yet spoken in the debate, I welcome you to the Chair, Mr. Atkinson. I want to make a few points about Government amendmentNo. 2, but I should first like to know whether we are likely to have a clause stand part debate, or whether I should raise general issues now.

Peter Atkinson (Conservative, Hexham)

As I said earlier, I think thatthe debate will progress better if we have a fairly wide-ranging debate on this first group of amendments. I am sure that the Committee will bear in mind my remarks about stand part.

Roberta Blackman-Woods (Labour, City of Durham)

Thank you for that clarification, Mr. Atkinson.

I begin by stressing to the Minister that, although I think it is important for clause 2 to pay attention to progression routes, it is also important that we do not diminish foundation degrees as a qualification in their own right. I know that it has often happened in the past; as part of a wide range of qualifications, it has sometimes been difficult for foundation degrees to show their distinctiveness.

Universities UK has been right to point out that we should adopt a cautious approach to giving FE colleges the right to validate programmes themselves. The criteria that have been set out, particularly in the appendix that deals with the criteria under which FE colleges will have to bring applications, go a long way towards meeting some of the concerns that have rightly been raised by Universities UK. It is not necessary to diminish in any way the role of universities in relation to employer qualifications, or to say that such degrees should go to FE colleges, because both types of institution can have good relationships with employers. Universities UK has been a bit over-sensitive about that; we want to ensure that universities have the links with employers that they ought to have, and that FE colleges continue with their good links across a range of courses. My FE college, New college, Durham, has excellent relationships with employers. It has a centre of vocational excellence, and it is able to build on that to validate programmes and to bring in employers to do so.

Universities might have been a little reluctant to accept that a number of FE colleges already have wide experience of delivering HE programmes. Some, including New college in Durham, have excellent facilities in brand new buildings which should enable them to deliver the programmes effectively. I am very pleased that clause 17 exists. It is a huge step forward in acknowledging the important role that foundation degrees can play in delivering skills across the board.

I want to ask the Minister about franchising, because there is a legitimate concern about the extent to which, in future, FE colleges will be able to franchise the degrees to other colleges. We might need to pay closer attention to quality assurance and to limiting the extent to which some colleges are able to do that.

As is outlined clearly in annexe A of “Applications for the grant of Foundation Degree awarding powers—Guidance for applicant further education institutions in England”, we should not get hung up on any one progression route. Although it is important that all who are studying for a foundation degree should be able to go on to study for an honours degree if they want to do so, it is critical that a wide range of opportunities should be available to them, and that good careers advice should go alongside foundation degrees. The principal of my local college, John Widdowson, has made it clear to me that foundation degree students sometimes want to have a break from education. After they have completed foundation degrees, they want to stay in employment if they are already in it—we have to remember that a number of foundation degrees are work based and work related—and go back some years later to top them up with other qualifications. Those might be honours degrees, but they could be management or other professional qualifications. We have to ensure that routes are available for such people to continue with their professional development not only in universities but through work-based learning. I am pleased that that is acknowledged in the regulations.

I have just two further points to clarify. I am not clear about what happens if a college applies to award its own foundation degrees and is refused. What is the next stage? Is there a time lag before it can apply again? There could be a diminution in quality if it is not made very clear that there are things that the college must do before it can apply again. Colleges could just go round and round the system, which would not be helpful.

I should also like clarification on partnership arrangements. How do the Government intend to ensure that strong partnerships are maintained between HE and FE institutions? At the moment, many such partnerships are built around foundation degrees. If those are no longer in place, attention will have to be paid to ensuring that strong links are made and maintained.

John Hayes (Conservative, South Holland and The Deepings)

As the Minister said, clause 17 lies at the heart of the Bill. It is perhaps the most significant part and it enjoyed lengthy and lively consideration inthe other place, having aroused strong feelings. I acknowledge that the Minister has listened to argument. He has responded in a way that does him great credit. His door has been open to all Opposition Members and third parties who have wanted to express their views about this part of the Bill. Understandably, there have been profound concerns about it on the part of some of those involved in further and higher education.

In some respects, the Minister has travelled a long way towards the position of his critics; perhaps, to a small degree, the official Opposition encouraged him on that journey. In other ways, he has not yet gone far enough. However, let me be absolutely clear that, in principle, we agree with extending the awarding powers to FE colleges in the manner given life by the Bill. Our support springs in part from our wholehearted admiration for the work of colleges up and down the country. I mentioned that earlier, but I make no apology for amplifying the point. FE colleges, as I shall demonstrate at considerable length, do a sterling job. They are very important to the life of our country and to the life chances of many of our countrymen. We are convinced that clause 17 is right. Not just the scope and range of college provision, not just the quality of its leaders and teachers or even the degree and extent of their endeavours, but the very nature of FE convinces us that it is right to provide this new opportunity for learners. Let me explain.

Jeremy Wright (Conservative, Rugby and Kenilworth)

Will my hon. Friend give way?

John Hayes (Conservative, South Holland and The Deepings)

I will be happy to give way before I begin my lengthy peroration.

Jeremy Wright (Conservative, Rugby and Kenilworth)

In that case I am grateful to my hon. Friend for giving way at this point.

May I suggest to my hon. Friend that what he is saying is right, at least in part, because if clause 17 were not to become part of the Bill, those who regard further education, quite properly, as a source of good quality education and training would see this legislature as having damaged that view because we would not have given confidence to that impression? It is important that clause 17 plays its part in the Bill so that we can give the necessary confidence to further education as a brand.

John Hayes (Conservative, South Holland and The Deepings)

Yes. I have argued elsewhere that we need to treat FE as grown up. Part of the case that I made earlier about extending the freedoms of further education colleges through a considered process of deregulation is about just that: recognising the potential of further education, the quality of leadership and the talents of teachers and those who govern FE colleges and giving licence to those people to extend their work for the benefit of learners. My hon. Friend is right: if we sent out the wrong message about this aspect of the Bill it would discourage the very people whom we want to encourage.

I was about to speak about the particular strengths of FE. Perhaps those strengths will support my hon. Friend’s consideration of these matters and reinforce the point that he makes. FE colleges react with a particular responsiveness to local needs and their experience in constructing and delivering modularand part-time courses can play an important role in addressing the entrenched perceptions that preventso many people from considering further learning. Consequently, in my judgment FE must be central to any strategy for widening participation.

Rooted in the community and offering a rich diet of provision, FE colleges are uniquely placed to serve those whose lives are not necessarily designed for university learning. FE is characterised by localness, accessibility and flexibility. Colleges’ proximity to non-traditional students’ homes, workplaces and previous learning experiences give them an easy reach to the under-represented groups in higher education.

The idea of making education accessible via FE is by no means new. The growth in courses, including higher education courses in colleges, over the past 20 years is a quiet triumph. Around 12 per cent. of those studying towards a degree now do so in an FE college. Although like their university peers in aspiration and ambition, most of these learners are far from stereotypical students. The style and substance of their study are far from traditional higher education. Higher education taught in a further education context is a distinctive sub-sector with a unique style of its own.

Around 300 colleges now provide HE courses in widely varying amounts. Some cater to a small crowd of students, while at the mixed economy colleges around half the student body study HE. These colleges are not university satellites. They have their own character and their own value. They are led by people who do not want to replicate the university experience but who wish to provide quality education inrelevant disciplines to those who might not otherwise consider it.

Just to illustrate that point in graphic terms, I thought that it would be helpful for the Committee to consider a few statistics. FE plays a key role in helping students from varied backgrounds to access higher education. Students whose previous educational establishment was a further education college account for over a third of all current full-time entrants to undergraduate education in higher education. Unlike entrants from sixth-form colleges and schools, maintained and independent, who are nearly all aged 20 or under, two out of every five entrants from FE colleges are adults—half of whom are aged 21 to 24 and the rest between 25 and 60. FE colleges have a higher proportion of entrants from lower socio-economic groups—34 per cent. compared with 25 per cent. in sixth forms and 21 per cent. in maintained schools. Furthermore, FE colleges provide internal progression and external entry to their own full-time undergraduate courses—mainly HND—and to those delivered in partnership with universities.

As young or older adults, a good number of those embarking on part-time undergraduate education will have undertaken previous further education study, especially if enrolled for vocational higher education programmes to sub-degree levels. FE colleges are the primary location for recognised access courses—some 86 per cent. compared with 2 per cent. of sixth-form colleges and 4 per cent. in higher education. FE is effective in reaching the hard-to-get-at groups who otherwise might not consider higher education. It is better at reaching less privileged groups, mature learners, and learners from different backgrounds, because typically it offers part-time study, modular courses, distance learning and more flexible learning than universities.

Foundation degrees must be integral to the strategy of widening participation. Sadly, however, many barriers inhibit the flowering of opportunity that such qualifications have seeded in the system. Colleges that wish to widen provision by teaching and awarding foundation degrees often face tortuous and convoluted processes—an over-bureaucratic funding regime, a poor fit between funding and flexible provision such as part-time learning, over-regulation of FE and the rigidity between HE and FE.

The disconnection and disincentives resulting from those problems inhibit social mobility by limiting the capacity of colleges to offer flexible learning to a new generation of students. If colleges are to be the vectors of expansion, they must have the freedom to determine the modes of teaching and learning, which are the pre-requisites of broader participation. That is whya determination to widen access depends on our willingness to deregulate FE colleges.

There is a significant problem with university validation. The foundation degree was conceivedas a high-level vocationally orientated qualification delivered by universities and colleges to meet the demands of local and regional businesses. The speed of response to employers’ needs is crucial to its appeal, as has been mentioned already in this short debate. The local, dynamic, industry-focused character of FE colleges allows them to respond well to that challenge, but having been galvanised by an employer’s approach, they find often that engagement with a university during the validation process puts the brakes on their momentum. The measured pace of large university management systems typically is very different from that of smaller colleges, which can result in a culture clash when the two meet to create new foundation degrees.

Sarah Teather (Liberal Democrat, Brent East)

I accept the point that the hon. Gentleman makes, but has he considered the remarks made by Universities UK, which says that it has many examples of where HE institutions have been able to design and validate courses within three months? Is it really the case that all HE institutions are slow and cumbersome and that none have links with businesses, including local businesses?

John Hayes (Conservative, South Holland and The Deepings)

I said “typically” rather than “all”. It is true that often there are good and productive relationships between universities and colleges, as I shall discuss later, but there are some structural problems in that relationship, some of which I shall describe as I continue. I want to reassure the hon. Lady that I would not want to suggest that those relationships never work well. Often they do work well, as Universities UK argues. But I do think that we can re-examine the barriers that currently exist in some cases to the effective delivery of foundation degrees and an effective validation process.

Rob Wilson (Conservative, Reading East)

My hon. Friend has mentioned the hard-to-reach groups. Is he aware that on Second Reading I highlighted the fact that the Higher Education Funding Council had analysed those groups and found that there has been success in getting foundation degrees, as they are currently constituted, to them, particularly to ethnic groups, mature students and so forth?

John Hayes (Conservative, South Holland and The Deepings)

That is because they are taught at FE colleges. That is precisely my point. The reason why the foundation degree process has been successful is that it is largely delivered through FE with the kind of flexibility that I described. Now we must go further. If we are to expand foundation degrees, allow colleges to mature and build on the initial success, we should be confident in allowing colleges to grow up, as I said at the outset, and award degrees themselves within certain limits with which I shall deal in some detail. It is important that there are appropriate safeguards, and I take some of the points that Universities UK has made, but we need to move on from that start to allow the flowering of the process which the Minister briefly outlined and which I broadly support. I know that there are doubters, and the hon. Member for City of Durham may be one of them.

Roberta Blackman-Woods (Labour, City of Durham)

Will the hon. Gentleman accept that universities have got better at validating foundation degrees and working with FE colleges to put together and deliver degrees? It is no longer necessary to denigrate the university sector in order to argue that FE colleges should be able to validate degrees in their own right. FE colleges themselves have the necessary expertise and partnerships.

John Hayes (Conservative, South Holland and The Deepings)

Our universities do an important job and we should be very proud of them. The expansion in the number of students at universities has been another triumph—I described the expansion of HE and FE as a quiet triumph, but of course it has been a triumph that student numbers have grown substantially over my lifetime in both our red-brick and new universities. However, I am not sure—I support the Governmentin this respect—whether it is appropriate simply to continue down the current road without allowing colleges to mature as they can if we put in place the right safeguards to guarantee rigour and partnership.

Sarah Teather (Liberal Democrat, Brent East)

This is an issue of fact: the hon. Gentleman mentioned a moment ago that the increased participation in and accessibility of foundation degrees is primarily because most of those courses are delivered through FE institutions. I said in my remarks, and wish to put on record again, that46 per cent. of those courses are delivered through higher education and 54 per cent. through further education. emphasise the point that the hon. Member for City of Durham made a moment ago: that we must be careful not to denigrate the provision of foundation degrees in higher education, which has been enormously successful and amounts for almost half those degrees.

John Hayes (Conservative, South Holland and The Deepings)

Yes, that is true, and I have discussed it at length with representatives of the universities and others. But let us put on record the fact that the expansion in the number of students in universities, which has been significant over my lifetime of48 years—I know it is hard to believe, but I am 48; I know that you thought I was much younger, Mr. Atkinson—has largely been within a single socio-economic sector. The profile of students in HE now is not substantially different from the profile in 1958. FE colleges have been disproportionately successful in reaching hard-to-get-at groups, partly because of their localness, partly because of their responsiveness and partly because of their willingness to offer degrees and other qualifications in more innovative ways than is typically the case in universities. I add one more caveat: most universities are trying to address that issue.

I was recently at the Cambridge institute—it is associated with Cambridge university—which specialises in providing flexible courses at degree and sub-degree level. It does a superb job, which I would not want to understate in any way. However, FE has a critical and unique role to play in deepening and broadening participation and I make no apologies for being the champion of further education colleges. That may make me less popular in the dining rooms of Oxford colleges than the hon. Lady, but I do not fear that because I am the people’s choice and the people’s voice, and it is absolutely right to make a case for FE, which is rarely made in this place.

In response to the hon. Member for City of Durham I mention the review of indirect funding agreements and arrangements between higher education institutions and further education colleges published by HEFCE, which said:

“Further education colleges are used to being responsive to rapid change. The rather more complex procedures of a higher education institution almost always slows down the process.”

Those are not my words, but the words of HEFCE. Although I accept the caveat of the hon. Member for Brent, East that sometimes it is much quicker, it usually takes about 18 months of meetings and sub-meetings to secure the validation of a foundation degree after an incredibly bureaucratic process, which obviously places a proportionately heavier burden on the lower-resourced colleges than on the large, well-resourced universities. Principals speak painfully of the labyrinthine process, which is made more difficult for colleges because although its staff are likely to be better equipped to judge matters relating to vocational qualifications and more closely aware of employers’ needs, throughout the long and winding processthe college must satisfy the university’s needs and requirements above all others. The principal of one college testified as much to the Select Committee when it considered these matters. I will not quote him at length; suffice it to say that he said,

“We are very much the middle man, the intermediary”

in the relationship, and he described how difficult it is to manage the process.

A culture clash is common in the negotiations because foundation degrees are vocational; the specialism often lies with the FE college but they are also simultaneously higher education qualifications so the authority lies with the university. The resulting tension is not conducive to a fruitful, fast-moving partnership that responds quickly to employer demand. Some embryonic foundation degrees, such as the catering qualification, which have been conceived by employer interest and college enthusiasm, do not even reach the validation stage because the partner university has the power to veto subjects that do not fit in with its pattern of provision.

As if those difficulties were not enough, colleges’ plans for foundation degrees must also filter through the time-sapping sieve of its local lifelong learning network. Although they were established to ease collaboration, these institutional interceptions often have the opposite effect. One London college that I visited had been obliged to hawk its foundation degree around three lifelong learning networks in three separate London boroughs due to the spread of its campuses, eliciting agreements for the qualification from each of them. It is not hard to imagine the bureaucratic bother that that entailed. As the college principal remarked, it was an experience that exposed the absurdity of lifelong learning networks, however well intentioned their aims. All that explains why it is critical that colleges take the power to award these degrees themselves. However, that power entails important responsibilities.

Those concerns were described at length in the briefing that we received from Universities UK and in the debate in the other place. I have the Universities UK briefing before me, but it might be more convenient to consider the comments of Baroness Warwick when she spoke in the other place specifically about this aspect of the Bill. I met her to discuss the issue—I am sure that Ministers have done so repeatedly, and that other members of the Committee have as well—and listened carefully and closely to the arguments made by Universities UK.

Baroness Warwick’s case might be summarised in five points. She is determined, and rightly so, that academic rigour is maintained so that the degree brand continues to be well respected by learners and employers, and others at home and abroad, and she made that point in the Lords debate. She is also concerned that progression from one level of qualification to another is assured through appropriate agreements. The Minister spoke about articulation agreements in his opening remarks. Baroness Warwick stated that

“foundation degrees were originally conceived as a stepping-stone qualification that would enable students to study perhaps, or often, in conjunction with work or while based at a localFE college, but which would also give them the option of topping up to a full honours degree when they gained the confidence”—

and the ability—

“to do so.”—[Official Report, House of Lords, 13 December 2006; Vol. 687, c. 1580.]

She is right—it is critically important that we consider foundation degrees in that context. They should be a bridge to further learning, but not just that. They have a role in and of themselves, and many who study for the qualification will use it for its own purpose rather than simply as a stepping stone. None the less, progression is an important guarantor of rigour and the kind of positive partnerships that the hon. Member for Brent, East mentioned, and which I, like her, celebrate.

The third issue that we have pressed, as has Universities UK—again, rightly so—is that such matters should be closely monitored and reviewed, and that there should be a robust reporting process. As the Minister knows, we have argued that it is vital that Parliament should take a view about the effectiveness of the new awarding regime. Indeed, the Ministerhas proposed that there be a review period—a probationary period—and that after six years the matter should be considered in some detail.

Should we find that the process is not proceeding along the lines that we all hoped it might, I have no doubt that we could revisit the whole subject. If the process does not work, we need to be honest about it. My judgment is that it will work providing that we are sure about rigour. We have the right agreementsin place, and we are clear about the quality of the qualifications and their relationship with furtherand higher qualifications. None the less, accountability must be built into the process, and I am grateful to the Minister for his response in that respect.

Jeremy Wright (Conservative, Rugby and Kenilworth)

While my hon. Friend is on the subject of the review that will take place, does he agree that it is highly probable that it will find that a large number of further education colleges have continued to have their degrees awarded through higher education institutions for precisely the reasons that were set out by the hon. Member for Brent, East and others? They value the relationships, closeness and effectiveness of relationships that have been built up over time.

John Hayes (Conservative, South Holland and The Deepings)

Yes, I agree with that, and I do not agree on this particular occasion with the case made by Universities UK, which, in what I might describe as a vain threat when the issue was debated in the other place, suggested that universities might, in effect, take their ball home. Baroness Warwick said that she would not be surprised if some universities withdrew fromthe process, that they might choose not to work in partnership with FE colleges and be involved in foundation degrees.

I do not think that that is right. I think that it is true to say that a small number of colleges will satisfy the necessary criteria and move to full degree-awarding powers, but many other colleges, emboldened by the Bill—because of the point that my hon. Friend made earlier—will continue to teach foundation degrees, but with the university still awarding the qualification. I see no incompatibility between a relatively small number of colleges moving to full degree-awarding powers and many others, as my hon. Friend suggests, continuing in the vein they are now in, working with the university to award degrees through the university. I am not sure that I agree with Baroness Warwick—for whom I have the highest regard—that universities will take their ball home and withdraw from the process.

The next of my concerns, which are shared by the critics of this part of the Bill, relates to franchising. The hon. Member for Brent, East will speak about that, because she has tabled an amendment. I think that she and I have a similar doubt about the issue. It seems right that if we are to be clear about partnership, progression and rigour, we should be nervous about the idea of franchising, at least at this stage. I shall leave the hon. Lady to say more, because I would not want to steal her thunder. She will be heard with a sympathetic ear by Conservative Members, because the Minister has yet to be absolutely convincing about how franchising might work, given the other concerns that I have briefly articulated.

Ms Angela C. Smith (Sheffield, Hillsborough) (Lab) rose—

John Hayes (Conservative, South Holland and The Deepings)

It is a pleasure to see the hon. Lady on the Committee and to exchange a few words with her again.

Angela Smith (Labour, Sheffield, Hillsborough)

Will the hon. Gentleman concede that the issue of franchising ought to concern us generally in the provision of education and not only in relation to the particular set of relationships between higher education and further education or between FE institutions? The franchising needs to be of a high quality wherever it is done and whoever issues the franchise.

John Hayes (Conservative, South Holland and The Deepings)

Yes. We are all determined to ensure that quality lies at the heart of the process. We would be short-changing learners if we did not take that view. The hon. Lady is right to say that there is a bigger issue about franchising: the subcontracting of provision, if one can put it like that. However, there is a particular issue about the extension of degree-awarding powers in respect of franchising, because it exacerbates some of the fears that the critics have that there will be a lossof control and some diminution of the quality of the brand. The fear is that people will not see degrees in quite the same way as they once did.

That might affect take-up. Indeed, that point was made by Baroness Warwick, whom I am using as the spokesman for the universities in this respect. She said that there might, perversely, be declining enthusiasm for foundation degrees as a result of the change. She feels that it might lead to fewer people being interested in taking them up, because there might be a perceived decline in the strength of the brand.

Angela Smith (Labour, Sheffield, Hillsborough)

The hon. Gentleman is very generousin giving way again. Franchising does take place at present; HE institutions franchise within FE settings even now.

John Hayes (Conservative, South Holland and The Deepings)

Yes.

Angela Smith (Labour, Sheffield, Hillsborough)

Surely, if people or institutions had concerns about franchising, they would have been expressed by now in relation to the current arrangements.

John Hayes (Conservative, South Holland and The Deepings)

That is a good point. The hon. Lady always make pithy and incisive contributions in these Committees; I enjoyed our exchanges during the passage of the Bill that became the Education and Inspections Act 2006. She is right, and more than that, to some extent some critics of this part of the Bill really want to have a debate about foundation degrees per se. To hear some of the people who have commented on the Bill, one would think that we did not have foundation degrees in place that were being jointly managed and run by HE and FE and that we were having a debate about their inception. In fact, as the hon. Member for Brent, East said, foundation degrees are a well established and very successful product. We are talking now about the next stage of its development. This is not a fundamental debate about whether we should have them at all. I happen to think that they are very important and I support them. She is right; part of the debate has been almost about what might have been, rather than what is and what could be. I have some doubts about the provisions, but I take her point that not all the arguments that have been advanced are as robust as others.

Finally, there is considerable concern about the maintenance of partnerships that are in place and the strength of the relationships between FE and HE, which was alluded to by the hon. Lady. There is a concern that the provisions might set universities against colleges, which could result in unhealthy competition. That is a legitimate point. We need to ensure that we cement partnerships rather than endanger them. I believe that there should be a duty on colleges and universities jointly to market such qualifications, one of the purposes of which would be to cement their relationships and to add value to the product. Let us imagine going to Peterborough regional college to do a foundation degree jointly marketed with King’s college, Cambridge, notwithstanding what I said about the high table at Oxford—I have no prejudice against Oxford and Cambridge. I think that I would be quite attracted to the idea of a jointly marketed product with involvement from both institutions.

Angela Smith (Labour, Sheffield, Hillsborough)

Would it not be very welcome as well if HE institutions, such as Oxford and Cambridge, were to open up their facilities occasionally to students on foundation degree courses in FE institutions for lessons or lectures so that they could get HE experience?

John Hayes (Conservative, South Holland and The Deepings)

I take the same view. I think that HE and FE institutions should share resources a great deal more. We should be much more imaginative about how the skills and resources of HE and FE can be shared where appropriate. [Interruption.] I think that you are about to rise and tell me to abbreviate my remarks, Mr. Atkinson.

Peter Atkinson (Conservative, Hexham)

I was not going to tell the hon. Gentleman that, but of course I would encourage him to do so. I was going to say that although I encouraged a wide-ranging debate, this one has gone rather wider than even I should tolerate. I ask him to keep his remarks short.

John Hayes (Conservative, South Holland and The Deepings)

Yes, we have entered the junior and senior common rooms of Cambridge and Oxford colleges, so perhaps we are straying a little from the purpose of our considerations today.

I turn to the subjects dealt with by the starred amendment that has not been selected, which I think would have addressed some of the issues that I have described as proper and legitimate concerns of Universities UK and others, who have been doubtful and sceptical about this aspect of the Bill. I would want to build on the Government amendment by adding robust conditions to ensure that any FE college being considered for foundation degree awarding powershas arrangements in place for the progression of foundation degree students to more advanced study. There is an argument for putting that in the Bill.

There is a fine distinction between what is written in the Bill to reassure people about progression and rigor and what is contained in guidance. I acknowledge that that has been the subject of some discourse between the Minister and myself. It is a difficult path to tread because we do not want to make the Bill unnecessarily inflexible, but I think that it might be useful to put more in the Bill to address progression. Also, in our starred amendment No. 37, we have said that there should be written confirmation from the relevant body validating a more advanced course that will build on a foundation degree. The relevant bodies in this instance are often universities, which are defined in section 76(1)(a) of the Further and Higher Education Act 1992, or bodies that validate professional qualifications. It is important to add “professional qualifications” in that regard, because some people might progress from foundation degrees not to the BA, BSc or university courses that we might assume they would go on to pursue, but to other professional qualifications relating to their original learning. The Minister should consider whether such professional qualifications should be specified, either in guidance or in the Bill.

We also need to ensure that FE institutions continue to secure guaranteed arrangements for progression. Our amendment puts that rather more strongly than the Government’s amendment, which only requires the Privy Council to check that an FE college has a progression plan when it first applies for a foundation degree. There should be some evidence of continuing commitment to progression, rather than simply a plan at the time of application. That is a reasonable way of satisfying the concerns of those who feel that this might be the beginning of a slippery slope toward the dilution of the degree brand, because it means that a college should always have a progression agreement in place.

Such changes would address a number of omissions from the Government’s amendment. Ensuring that agreements between institutions are explicit would help to keep the links between FE and HE institutions strong and transparent. Because the circumstances in which academic progression and agreements between partner institutions occur will undoubtedly change over time, students must have a guarantee that theywill always be able to build on their foundation qualifications if they wish to do so.

The addition of professional qualifications as courses of study to which people might advance, a change in the nature of participation agreements in order to provide assurance that—given the dynamic nature of study—a foundation degree will always lead to the opportunity for further study, and a duty on both organisations to advertise and market courses would go some way to satisfying critics of the proposals.

The strength of this part of the Bill is, as I have already argued, that it would go a considerable way towards guaranteeing wider participation, cementing the position of foundation degrees as a part of that wider participation and building on the successes that colleges already enjoy. I hope that the Minister will go a little further to satisfy the concerns and doubts of critics of the provision. I have set out my position from the outset. From the very beginning, the official Opposition have made it clear that we are in favour in principle, because we want to be straightforward with the Minister, the Committee, the whole House and the other organisations involved. It would have been easy to run with the hare and hunt with the hounds, but I avoided that temptation. However, having done that, we should, responsibly and in a measured way, take full account of the concerns of universities and others.

We believe that FE institutions will be crucial to widening participation in learning. They contain an immense amount of untapped capacity and are willing and ready to do more; indeed, FE colleges alreadyplay a key role in teaching HE. They are the singlemost significant opportunity for expanding HE participation, and the foundation degrees are critical to that. On that basis, and with my points begging for a detailed response from the Minister, I support in principle clause 17. I recommend it to my colleagues and to the whole Committee.

Austin Mitchell (Labour, Great Grimsby)

I had not intended to intervene in the debate, but I have been stirred into such a frenzy of excitement by the inordinate lengths to which the hon. Member for South Holland and The Deepings went to support Government policy. It is an example to be followed by the rest of the Conservative party: support Government policy and do so at length.

I intervene to make two brief points. First, I welcome the clause and the provision for FE institutions to give foundation degrees. In Grimsby, we have an excellent institute. It has been upgraded to an institute, thanks to my bartering my vote on student fees. Its status has improved, but all the studentshate me for giving way on the fees argument. That isin passing, however. The institution is undertaking enormous initiatives to develop as a university college campus with the university of Hull, but that does not preclude the need for it to develop in its own way, asthe hon. Gentleman said. The measure is a way of strengthening that development by giving it an effective, independent role, so I support it from a local and a general point of view.

I thought that the Universities UK memorandum was a little sniffy. Universities are conservative institutions; they started off as old conservatives, which is to say that they thought that nothing should be done for the first time, and they have now become modern conservatives, who say that it should be done, but not now. The Bill provides effectively for a regulation procedure that will ensure the maintenance of standards. Foundation degrees are something of value, as the hon. Gentleman said. I shall say it at shorter length. The safeguards are well in place.

Secondly, with regard to the Liberal amendment and the argument in the Universities UK memorandum about franchising, I should like to ask my hon. Friend the Minister whether franchising is not precluded by subsection (11), which will insert into the Further and Higher Education Act 1992 a new section 76(6A), which says that an order

“may provide that the institution is not to grant such an award to a person unless he was enrolled at the institution at the time”.

That surely must preclude franchising.

Rob Wilson (Conservative, Reading East)

It is a pleasure to serve under your chairmanship for the first time, Mr. Atkinson. I should like to add my welcome to that of other hon. Members to the Under-Secretary of State for Education and Skills, the hon. Member for Corby. It is excellent to see him back in his rightful place. I am sure that his absence had nothing to do with the lengthy orationof the hon. Member for South Holland and The Deepings; as always, it was a superb summary of the many issues involved in this debate.

Clause 17 will amend section 76 of the 1992 Act, so as to enable the Privy Council to make orders granting further education institutions the power to award foundation degrees. We all know that. That means that those FE institutions that now provide courses leading to foundation degrees will be able to apply for the power to award those degrees themselves, which isthe central issue today. By any standards, that is a profound change that has caused enormous concern in the higher education sector, all the more so because there was little or no consultation with higher education representatives about the measure, which led to exasperation in that sector.

I acknowledge the movement in the House of Lords, where a number of amendments were accepted during the Bill’s progress through that place. I welcome those amendments, as they have done a lot to ameliorate some concerns. However, as the Minister indicated, Government amendment No. 2 is an attempt to deal with some of the remaining concerns raised with and by the higher education sector, not least on the issues of quality and progression. I do not think that it will completely satisfy the sector; indeed, one representative has described it as “very weak” and “of little assistance”.

I hope that we can find a way of strengthening the clause, as there seem to be three outstanding concerns in the sector. I make no apology for repeating them. The first is the status and value of the new higher education qualification; the second is students’ opportunities to progress from further to higher education—known as progression, as we have heard in the debate—and the third is existing and future partnerships between HE and FE institutions. Much of the concern could probably have been satisfied by the acceptance of amendment No. 37, tabled by my hon. Friend the Member for South Holland and The Deepings, which was not selected.

As I asked on Second Reading, does not anybody else find it very strange that an FE college will beable to award an HE qualification but not the FE qualifications that form the bulk of its own provision, such as GCSEs and NVQs? I wish to mention some of the unintended consequences that may run from that if we do not firm up the Government amendment. The first is that there is a risk of undermining the HE status of foundation degrees, which could lead to a fall in demand from both students and employers and a decline in the number of HE institutions prepared to offer them. That would undermine foundation degrees and their impressive take-up to date. As hon. Members have mentioned, 60,000 students are taking foundation degrees this year.

The second possible consequence is that the progression to higher qualifications could be adversely affected, as higher education institutions will not be involved in the design or delivery of foundation degrees. That fear has been partly allayed by what the Minister said and by the amendment.

Thirdly, many higher education institutions work collaboratively and in partnership with FE institutions. A serious question is whether those relationships will be put at risk when the institutions are in competition. Will not allowing FE institutions the opportunityto franchise degrees, even after six years, ensure competition between the sectors where once there was a strong element of collaboration?

Fourthly, will a degree given by an FE institution have the same pulling power for a student as an HE degree? Will not students and employers have concerns about the quality of those degrees? There is a danger that foundation degrees will become a signature qualification for FE, with a few large FE institutions franchising wide-scale provision to smaller institutions. That is a genuine concern. Is there not at least a risk that that would destabilise progress towards embedding a fairly new qualification?

Austin Mitchell (Labour, Great Grimsby)

I am getting a bit tense and excited here, because the hon. Gentleman’s line is so very different from that taken by the spokesman on the Opposition Front Bench, the hon. Member for South Holland and The Deepings. Can we interpret it as a party revolt?

Rob Wilson (Conservative, Reading East)

Some people have said in the past that the party is revolting, but not today. It is perhaps a difference of emphasis rather than a revolt. As I said, I make no excuse for making the concerns of higher education institutions well known and putting them on record. It is important that that be done. There are considerable concerns because of the failure to consult those institutions properly, which is why at every opportunity in Committee and on Second Reading I have taken up those concerns and tried to articulate them on their behalf. I say again that the concerns are substantial and the Minister needs to deal with them. He has an opportunity this afternoon to reassure Members such as me who have profound misgivings about the foundation degree-awarding powers.

Issues such as quality, guaranteeing progression and allowing franchising are not sufficiently robust in clause 17 as it stands. As I said on Second Reading, the Government risk producing the opposite effect to the one they intend with the Bill. Instead of encouraging more people to study for foundation degrees, they may end up reducing the opportunities and the incentivesto choose this qualification. If we are to go ahead and give colleges degree-awarding powers, we need to be sure that they really can offer the same quality that our universities currently guarantee.

Tim Boswell (Conservative, Daventry)

This has been a fascinating debate. I draw great comfort from two factors. The first is strong support for the FE sector on its own merits onboth sides of the Committee and some words of encouragement which are overdue and thoroughly well deserved. If FE has any problems, they sometimes centre on a certain lack of self-confidence as to mission and as to the quality of delivery when that is not appropriate. There is excellent provision in FE and we should celebrate it. I am glad that we have taken some steps to do that.

There has been a genuine concern, which is cardinal to the amendments and the clause, to ensure that there is proper articulation between the FE and HE systems and that one can progress from one to the other. If we are seriously interested in progression and in widening the opportunities for people, often from disadvantaged or hard-to-reach backgrounds, it is important that that should be achieved.

That is one side of the story. I am, and will remain throughout my life, a keen supporter of FE. On the other hand, I think, even modestly—if one can do that as a former Minister—I retain some friends and interests in the HE sector. It is right that these matters should be debated. Indeed, I have recently been appointed to the board of a higher education corporation in Wales; I have Welsh connections, as I have mentioned. Therefore, I might be said to have an oblique interest as well as that as an officer of the parliamentary university group.

I did not completely share the emphasis of my hon. Friend the Member for Reading, East, but his concerns are entirely proper for consideration. He said that some of these concerns arise from the sadly characteristic handling of the issue by the Government. It was hatched and then considered later. May I say in fairness to the Minister, before he becomes depressed, that he has made a good recovery because he has listened to the points that have been made? My judgment would be that we have reached an acceptable position, broadly speaking, with just one or two reservations which I will enter at the end. I will be happy to support the clause and the amendment in the form that it has reached.

It may assist the Committee if I briefly go through the process in which I have considered this matter. The first point to remove from the concerns should be any political or business-led desire to get on with this and to change the nature of the agenda. It is quite proper for the awarding of degrees—a brand or a badge, as somebody described them—to be an academic issue primarily. We should not allow anybody else to nobble that process for their own agenda. There ought to be some resistance to any erosion of that important principle.

Having said that, we should note that in the real world distinctions are not quite as precise or absolute as they are sometimes said to be. My first point is familiar and has been touched on in Committee. Something like 11 per cent. of higher education provision across the piece is delivered, and very well delivered, in further education colleges. There is no absolute distinction by institution as to sheep and goats. Secondly, within the higher education sector itself there are different levels including different levels of approval.

There is the issue of foundation degrees, which is somewhat separate from what we are discussing now, but there is also the issue of institutions that have taught degree-awarding powers or research degree-awarding powers. There are steps and progressions which may or may not be considered. We should not simply take this as a matter of false antitheses in deciding what we should do.

When I looked through the reservations and considered those that had been expressed to me by the higher education sector, it seemed that they fell into three categories. The first one, which, as I have already indicated, is entirely proper, is to ensure that quality informs the process. That falls within the single remit of the Quality Improvement Agency. It may not be perfect, but at least we have a coherent method for assessing quality on the same basis and at the same level of rigour. I would not expect anything otherwise; nor would the FE institutions that might enter their foundation degrees, for a reason to which I shall return.

There are also issues about the acceptability of degrees or process abroad, and the Bologna process. The Minister responded to my concerns about them on Second Reading, and he gave some assurances which I do not need to repeat today. Whether the degrees are accepted by institutions abroad any more than they may be accepted by UK employers and higher education institutions—tacitly, in terms of their admission policies—may not be quite so clear. Until it has been proven to the contrary by a period of rigorous study and then the review after four years that the Minister promised, there will still be a danger that they will not be accepted. We need to show that the quality is absolutely up to the standards of higher education.

The second area, which I do not think has really been discussed in the Committee, is the possibility of what might be termed “mission drift”. I do not want further education colleges to take their eye off the ball—that is, off their mission generally. I do not think that there is any need for them to do so or likelihood that they will, but there is the experience of ex-polytechnics—modern universities—deciding that they would like to become Russell group universities or severe academic institutions, get involved in transfer markets in five-star rated departments and so on. I am not sure how much that adds to the sum of human knowledge, and I hope that it will not happen as a result of this process.

My third concern is about the nature of the process itself. I have already had an exchange with the Minister, which I need not repeat, about the importance of reporting and reviewing the continuing position. That is not a document check whereby, once all the boxes have been ticked, an institution gets foundation degree-awarding powers. That is, perhaps, the beginning of the process, but there also needs to be a programme of continuing assessment under which there may be sanctions, some of which—an adequate number—have been written into the Bill as safeguards.

The Bill should include two main objectives in respect of assurance. Other higher education institutions and, of course, employers need assurance that the foundation degrees on offer are appropriate, high quality and fit for purpose. If they are specified by employers, and if they are conducted with the right quality assurance, that should be self-evident, but I remind the Minister that there is also an important need for students to be reassured. The last thing that a student wants is to devote two years of his or her time to a process, often conducted part-time and in considerable personal difficulty, and to end up with something that is not worth having, or that nobody will accept as being worth having. We must avoid that.

My judgment is that, on the whole, the Minister has got it right. We have a quality assurance process, and we have understandings about a proper review after four years.

John Hayes (Conservative, South Holland and The Deepings)

I am grateful to my hon. Friend for highlighting the importance of professional qualifications being added—indeed, stipulated—in the considerations. I made a point about that earlier. There is a course at City and Islington college on crime scene and forensic investigation. A student who successfully completes it gains a professional qualification that is recognised by the main employer in the field: the Metropolitan police. That is precisely the kind of link between what is studied, outcome and subsequent professional opportunity that my hon. Friend is describing. That is why I am keen to press the Minister to specify professional qualifications, either in the Bill or in guidance.

Tim Boswell (Conservative, Daventry)

That was a helpful intervention. It is important to the process that the employer should have some influence, but also that the student should be able to produce a qualification that is current. Above all, we want to avoid the friction that may occur if somebody does something in good faith and is then told that he needs an additional module or whatever in order to meet the requirements. I suspect that that is work in progress. My cardinal concern was that we should tie down the quality standards, and my secondary concern that there should be reporting to validate those standards in practice. The Minister has very satisfactorily offered a review process after four years.

My only residual concerns, which are not subversive of my support for the clause—I should not want to signal that—are about points that have been made ina number of quarters about franchising. Formally, within the quality assurance system, franchising should work to exactly the same effect as direct provision, and those of us who are interested in outsourcing would not regard it as being in any way improper. However, it is true that there have been failures in the past in both higher and further education. We could debate that at length and produce examples from abroad and from the United Kingdom. I can think of a FE college that is fairly close to my constituency in which a problem arose. Many people with experience of the sectors will know that it is something of a weak link in the provision, so Ministers need to keep the point under review, particularly with reference to the Quality Assurance Agency.

That leads me to my final point. One should not raise points without knowing the answer, and I do not know the answer when it comes to the withdrawal of accreditation or awarding powers of an institution. We would not wish ever to have to countenance that situation, but if an institution is doing so badly in terms of its offering in education or training, it may fail commercially and then the Minister will face a different issue. However, it might be useful for the Minister to consider—not only in relation to foundation degrees but more generally—whether it would be appropriate to have powers to rescind a Privy Council decision and to strip an institution of its powers where there had been manifest misconduct or misfeasance, or academic failure. That would open a wider debate.

Let me just say to the Minister that we should not create a monopoly in any area. The higher education sector has a proper interest in the matter, and we have a proper interest in seeing that its concerns are met. Above all, there should be no dilution of quality. Subject to that, I am happy to widen the opportunities available to FE colleges and to people to study at them and to acquire qualifications. We should not just do that through clause 17 and then walk away. The process must be carefully and continuously reviewed and if anything goes wrong before or, if necessary, after, four years, we should be ready to step in and say, “This is discrediting the British concept of a degree, and it should no longer continue,” and find a means of stopping it.

Bill Rammell (Labour, Harlow)

We have had a good and instructive series of exchanges on these two amendments. It is particularly interesting and welcome that, certainly across the three Front Benches, there is now no disagreement on the principle of degree-awarding powers for foundation degrees in respect of FE colleges. We have established an important consensus.

Let me start by picking up on the comments of the hon. Member for Brent, East. She referred to the suggestion—others have also made the claim—that there was little consultation on the concept of giving FE colleges powers to award their own foundation degrees. Andrew Foster, in his report on and fundamental review of the FE sector, made it clear that the issue would need to be examined. Indeed, there has been a significant debate within the further education sector about the desire on the part of FE to gain these qualifications. Furthermore, since the publication of the Bill, we have—rightly in my view—consulted and I think that we have given a strong degree of reassurance.

I also certainly welcome the support of the hon. Member for Brent, East for the significant progress that has been made since the establishment of foundation degrees, from 4,000 students initially taking such degrees to 61,000 students today. She also said that we have gone most of the way towards reassuring her on this matter. I think that we have gone as far as is appropriate and I would not go as far as she has suggested, in particular because I do not wish to establish, as it were, a set of two-tier qualifications. We would risk doing that as we would be setting a precedent, because we do not, in statute, prescribe the publication of criteria for any other award. If we were to do that exclusively in respect of foundation degrees awarded by FE colleges, we would be setting that precedent and we would create a two-tier system.

Sarah Teather (Liberal Democrat, Brent East)

What we have asked for is not the criteria for awarding foundation degrees; we have asked for the criteria for making sure that progression routes are in place. The Minister has got that slightly wrong.

Bill Rammell (Labour, Harlow)

I will come back to that point. However, regarding the criteria for awarding foundation degrees, there would be a significant problem. I want to come on to the issue of publishing the progression routes for foundation degrees later.

It is also important that we address the question of “what would happen if?” to which a number of hon. Members have alluded. What would happen if, once a college had been granted foundation degree-awarding powers, it subsequently failed to adhere to the proposals regarding progression that it had submitted at the time of application? That is an important area and it is right that we give some absolute clarity. It is a matter that would be picked up by the Quality Assurance Agency, either through one of its regular audits of higher education provision in FE institutions or through its procedures for handling causes of concern in institutions providing higher education.

A cause for concern can indeed be declared at any time; there is no need to wait until the institution’s next audit. If the cause for concern is substantiated, then swift and appropriate action can be taken to rectify that shortcoming. There is no need to legislate for there to be consequences for a college that fails to ensure progression from its foundation degrees after it has been awarded foundation degree-awarding powers. The QAA has confirmed that failure to ensure that there are progression routes would be—rightly, in my view—a serious matter and could constitute grounds forQAA intervention. I hope that that provides some reassurance for Members.

John Hayes (Conservative, South Holland and The Deepings)

The Minister is right to address the particular issues about progression and we understand the role of the QAA in that area. However, I want him also to assure the Committee that, if the QAA found other failings in terms of rigour or quality—progression is part of the story and part of the guarantee of rigour, but it is not the only guarantee of rigour—presumably it would act in a similar way and the capacity to award degrees could be similarly withdrawn.

Bill Rammell (Labour, Harlow)

The provisions for QAA intervention are the same for foundation degrees as they are for other higher education qualifications; that is one of the reassurances that we have given. Those provisions are robust. If there is a problem, it is clear that the QAA can intervene and that it has the ability to do so.

I would like to pick up on the comments made bymy hon. Friend the Member for City of Durham. I strongly agree with her assertion that we should not diminish the importance of foundation degrees in their own right. Indeed, at the moment 46 per cent. of students who undertake a foundation degree do not immediately progress to a higher level qualification. Where it is appropriate and in the interests of the students, I want those progression arrangements to be available, but I do not want us to undermine the importance for many students of getting to that first base, in terms of gaining a foundation degree. I also agree with her assertion that there are many higher education institutions that have a strong and positive relationship with employers and that many flexible, innovative higher institutions are responding in a very real way to the needs of business.

My hon. Friend then made some comments, as indeed did many hon. Members, about franchising. If you will allow me, Mr. Atkinson, I shall not comment on that now, because I believe that we are coming to a series of amendments dealing directly with those issues, at which stage I hope to give some reassurance.

My hon. Friend the Member for City of Durham and the hon. Member for South Holland and The Deepings raised the important issue of progression, not only on to an honours programme, but on to management qualifications. That is provided for and is set out clearly in the draft criteria. The hon. Member for Brent, East asked when a college could reapply if an application were turned down. In theory, it could reapply straight away, but, rightly, that would be a time-consuming and expensive process, and in those circumstances, before making a resubmission, a college should consider and act upon what the QAA said when it turned down the application.

John Hayes (Conservative, South Holland and The Deepings)

The Minister is being very indulgent. To be crystal clear, when he speaks in his amendment about defining

“courses of more advanced study”,

does he include professional qualifications?

Bill Rammell (Labour, Harlow)

Yes, that is most certainly the case.

I shall move on to the comments by the hon. Member for South Holland and The Deepings. First, I would like to congratulate him on his well-developed sense of irony in describing himself as the people’s champion and the people’s voice. However, he made an important and serious contribution. He started by setting out a litany of obstacles that he claims are in the way of the expansion of foundation degrees. However, the evidence demonstrates that we have gone from 4,000 to 61,000 foundation degrees. I do not believe that those obstacles exist. Everyone to whom I have spoken in the FE and HE sectors believes thatwe are on track to hit 100,000 foundation degree qualifications by the end of the decade.

I agree with the hon. Member for Brent, East when she intervened on the hon. Gentleman. I think that he has been too pejorative in his attitude towards the ability of HE institutions to respond genuinely to the needs of employers and business. I am not going to take a stance critical of how universities have dealt with foundation degrees, but, in order to face up to the skills challenge set out by Sandy Leitch, we need as much flexibility and innovation as possible in order to meet the needs of business and the world of work. In those circumstances, it would be wrong to exclude highly performing FE colleges from contributing to that process.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I put to the Minister the point that I put to my hon. Friend the Member for South Holland and The Deepings: does he think it likely that when we review the position we will find that many FE colleges are still working in conjunction with HE institutions because the system is working very well, and will continue to do so?

Bill Rammell (Labour, Harlow)

I believe that to be the case and have argued so consistently. Those powers are available, although not every FE institution will seek to take them up. Each will make a judgment depending on the circumstances; some FE colleges will find that their existing arrangements with partner HE institutions are working effectively and would seek to continue with them.

Returning to the comments of the hon. Member for South Holland and The Deepings, I must say that I definitely disagreed with his comments on lifelong learning networks. He described them as self-serving networks, but I think that they are invaluable and it is right that local FE colleges and HE institutions work together on a range of issues. Lifelong learning networks allow institutions to share out student numbers and, therefore, encourage collaboration in a way that he advocated. They do not have formal validation functions now, and nor will they have under the proposals in the Bill. If a particular network is not working well, it is down, rightly, to its members to change it, learning from good practice elsewhere.

I should make clear the review procedures that we are setting in place under the proposals. There has been some confusion in this debate. We are saying—rightly, in my view—that we will have an independent review that will report to Parliament on the general operation of FE colleges and their ability to award their own foundation degrees after four years. Alongside that we are saying that after the initial award of foundation degree-awarding powers to an FE college there will effectively be a probationary period of six years. If, however, at the end of that period it has been successful, it will be possible for the Privy Council to award a college those degree-awarding powers on an open-ended basis. There will be two processes taking place.

Tim Boswell (Conservative, Daventry)

Will the Minister confirm that if at the end of six years the matter is indeterminate and there is not a clear possibility of awarding those powers, there may be a further period of probation before the matter is concluded?

Bill Rammell (Labour, Harlow)

That is certainly possible under the proposals that we are putting forward, but we should not start on the basis that that is the expectation. I believe that the highly performing further education colleges to which we have referred have the ability to take on the task successfully.

The hon. Member for South Holland and The Deepings rightly mentioned the importance of the strength of partnerships between further education colleges and higher education institutions, and the need to cement those partnerships. He then advocated, as he has both publicly and privately to me in the past, a legislative requirement on the two sides to market foundation degrees jointly. Although I respect his motivation, I disagree with that proposition. It would be over-bureaucratic, and to place that requirement in statute would be to go too far. We need to trust institutions to take the matter forward rather than micro-manage them.

John Hayes (Conservative, South Holland and The Deepings)

I understand the Minister’s comments on that suggestion and can see why he is reluctant to build it into statute. Will he go as far as to concede that inthe positive partnerships that both he and I envisage,the joint promotion and marketing of a qualification would be almost implicit?

Bill Rammell (Labour, Harlow)

Yes.

John Hayes (Conservative, South Holland and The Deepings)

Is it something that we would perhaps not demand but certainly expect of the partners? The Minister might have a role in giving guidance, might he not?

Bill Rammell (Labour, Harlow)

Because we do not want to be overly bureaucratic, I am not going to put that into guidance, but there will be an expectation that there will bejoint marketing of activities by the relevant further education college and university. Frankly, it wouldbe crazy, and contrary to the interests of those institutions, were they not actively to take on that task. Where that framework exists at the moment, that is taking place.

On the hon. Gentleman’s points in starred amendment No. 37, which he tabled, I understand his concerns. Had we been able to debate the amendment, I would have argued that it goes too far. The statement that an FE institution will produce for the Privy Council will need to show what it is doing to provide progression opportunities, as I have made clear. That sits in the context of the wider working relationship to be promoted between further education colleges and higher education institutions.

The FE institution will also need to be able to tell a coherent story about the options and opportunities open at the end of a foundation degree. That will rightly be done through the institution’s prospectus, and options will include honours degrees as well as appropriate professional and higher-level qualifications, as I have said. Institutions will want to promote the full range of progression opportunities available to foundation degree students. I should reiterate that although more advanced study following a foundation degree will most often mean the completion of an honours programme, progression could also be through an appropriate professional or higher-level vocational qualification.

John Hayes (Conservative, South Holland and The Deepings)

The point that I made in my all-too-brief remarks and in the starred amendment is that it is important for an FE college to show that progression can be guaranteed in perpetuity. My worry is that colleges will put together a plan that assures progression at the outset, but that as things change, so will the capacity for progression. Will the Minister comment on how progression can be guaranteed over time?

Bill Rammell (Labour, Harlow)

I know that it has been a long afternoon, but I believed that I already had commented to that effect. If the progression arrangements fall into disrepair, that could be grounds for intervention by the Quality Assurance Agency. On the hon. Gentleman’s proposals, the draft guidance specifies that when an FE institution applies for foundation degree-awarding powers, the QAA will invite the institution’s existing validation partners to comment on the nature oftheir operational relationship. That will constitute a relatively small element of the full assessment of applications carried out by the QAA.

The Government have rightly supported collaborative arrangements between FE and HE institutions and continue to do so. Lifelong learning networks often involve two or more universities that may compete for students yet can work together. I believe that that will continue to be the case with universities and FE colleges. Partner organisations, such as Foundation Degree Forward, lifelong learning networks and regional skills partnerships, can work with FE colleges and HE institutions to support collaborative working. I hope that that explanation reassures the hon. Member for South Holland and The Deepings.

My hon. Friend the Member for Great Grimsby, who is not in the Room at the moment, made an important contribution. He rightly values the work that is undertaken by Grimsby institute of further and higher education and he rightly underlined the degree to which the arrangements that we propose will maintain quality and standards.

The hon. Member for Reading, East perhaps expressed the one contrary view in the debate about the principle of FE colleges gaining powers to award their own foundation degrees. I disagree with the underlying thrust of what he said. He quoted an unnamed individual from a higher education institution saying that the amendments that we have made are very weak and are of very little assistance. That is not the thrust of the argument being advanced by the generality of universities. If the hon. Gentleman looks at the report that Universities UK submitted for this afternoon’s debate, he will see that that remark is not consistent with what Universities UK has said.

Sarah Teather (Liberal Democrat, Brent East)

It was interesting to note the very different tones used by Universities UK and the CMU. The CMU was most concerned about the amendment that the Minister has proposed. I tried to say during my remarks that I thought that some of its concerns related to the idea of progressing only to higher education. I disagree with that idea, because I think that a range of different routes are needed for people to progress, but it is specifically the CMU that is very concerned about the amendment.

Bill Rammell (Labour, Harlow)

I understand that. It is also fair to say that the CMU institutions probably have the biggest vested interest in the current arrangements. It is important that we make it clear to those institutions, as I have repeatedly done, that this is an expanding market and that even with the FE colleges that gain the right to award their own foundation degrees, there will continue to be significant opportunities for CMU institutions. When the Bill was in the other place, I met a numberof peers who expressed concerns on behalf of those institutions. I asked officials to go through some modelling on a case-by-case basis with the institutions, and significant reassurance was given as a result of that process.

My hon. Friend the Member for Great Grimsby highlighted the fact that the hon. Member for Reading, East appeared to say something that was completely at odds with his Front-Bench spokesman. I think that my hon. Friend was being very unfair. It is clear from the debate about grammar schools that in the modern Conservative party it is possible to have two completely contradictory policies at the same time.

I agree with the analysis by the hon. Member for Daventry that historically some parts of the FE sector have lacked self-confidence. That lack of self-confidence has been unjustified, based on what FE colleges have achieved. Those colleges take on a variety of functions, but the core mission for FE colleges—this was set out in Andrew Foster’s review and our further education White Paper and is encapsulated in the Bill—is the skills mission. It is right that high quality FE colleges have the ability to award their own foundation degrees, which is completely consistent with the core skills mission. On the hon. Gentleman’s concern about mission drift, I say again that these proposals fit within the core skills mission, which should provide reassurance.

Having given that explanation, I hope that we can move on. I hope that the Committee will support Government amendment No. 2 and that the hon. Member for Brent, East will not press amendmentNo. 7.

Sarah Teather (Liberal Democrat, Brent East)

I beg to move amendment No. 8, in clause 17, page 12, line 16, leave out ‘may’ and insert ‘shall’.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss amendment No. 9, in clause 17, page 12,line 24, leave out ‘may’ and insert ‘shall’.

Sarah Teather (Liberal Democrat, Brent East)

Amendments Nos. 8 and 9 deal with the concerns that hon. Members on both sides ofthe Committee have expressed about franchising. I acknowledge that the Government have moved a long way on the matter; there is now a six-year probation period for individual colleges and the four-year review of legislation, which we will discuss in a moment. However, the Minister has not adequately explained why he wants colleges to have the franchising power, and I want to give him an opportunity to do so. I have acknowledged the need for colleges to have the power to award degrees, but I am yet to be convinced of the separate need for them to be able to validate courses provided by other institutions, and I continue to have concerns about quality.

It is worth reminding ourselves of some of the roles that higher education institutions play when they work with further education colleges to validate degrees, not all of which are acknowledged. We understand someof the more widely recognised roles, but others are worth putting on the record. Obviously, they provide academic and administrative support and advice for course development, review and validation. However, they also provide access to staff development and training, access for students to services such as libraries, academic and administrative representation at exam boards and the production of student certificates and transcripts, as we would expect. They share responsibility for disciplinary procedures and ultimate responsibility for student complaints and appeals, which we might not expect.

Giving colleges the ability to award degrees for the first time means that they are not only doing all those things for themselves, but taking responsibility for ensuring that those things happen in the other institutions where they validate courses. For the first time, they will take responsibility for issues such as external examiners, copyright, student concerns, complaints and appeals in not only their own institution, but all institutions. We should acknowledge that the colleges will be required to take on a wide range of responsibilities.

The hon. Member for Daventry has said that issues have arisen in respect of institutions franchising courses internationally. Will the Minister say whether the new franchising power, especially in institutions that are not accustomed to it, might have an impact, if they are franchising courses that are being provided abroad?

The hon. Member for Reading, East, who is not in his place at the moment, said earlier that most ofthe qualifications offered by FE colleges—GCSEs, GNVQs and so on—are not awarded by them. The rest of the Committee accept the need for foundation degrees, but it seems curious that we would allowthose colleges to validate awarding powers in other institutions when they cannot do so for the qualifications that they deal with in their own institutions.

When I discussed the matter with the Minister outside the Committee, he said that there is a danger that the amendments would lead to a two-tier system, but we have a multi-tier system already. There are foundation degrees that are validated by higher education and delivered in higher education institutions, and there are foundation degrees that are validated by higher education institutions but delivered in further education institutions. We now have further education-validated courses delivered by that institution. Franchising would allow further education-validated courses delivered by another institution. It is not a two-tier system. We already have a three-tier system, and I wonder why we need a fourth tier. The argument has not been adequately made, and I would appreciate the Minister responding to my concerns.

John Hayes (Conservative, South Holland and The Deepings)

The Committee will know from my earlier remarks how enthusiastically I support further education colleges. In that context, I give my warm support to this part of the Bill, with the important qualifications that were made from across the Committee about the need to ensure rigour, progression, partnership and so on. In that spirit, I speak with some concern about franchising.

The hon. Member for Brent, East has made a persuasive case for ensuring that we keep close control of the process in its early stages. The Minister has made it clear that, through a combination of the QAA and his Department, the necessary safeguards will be put in place to deal with some of the points that the universities and members of the Committee have made. I am concerned by the impact that franchising would have on the capacity to ensure those safeguards, although I see why the Minister might take a different view. I do not want to anticipate his every word, but I understand that he is fearful that making one setof rules for colleges and a different set for other institutions might establish what the hon. Lady has described as a two-tier structure.

We have acknowledged that this is a bold measure that will require a proper degree of caution from all concerned, and we have accepted that it is a probationary measure. As it moves ahead, the colleges that handle the matter in the way in which we expect will acquire additional powers. We know that a small number of colleges are likely to be involved at the outset, which the Minister has acknowledged both publicly and privately. It does not seem unreasonable to say that if a small number are involved, the best way of maintaining rigour, quality and progression is not to let that number burgeon through franchising. Being kind to Liberals is always difficult for me, but I think that the hon. Lady has done a service to the Committee in tabling the amendments and allowing this debate on an important aspect of this part of the Bill. Unless the Minister can offer strong assurances, I would be inclined to support the hon. Lady, were she to press the matter.

Bill Rammell (Labour, Harlow)

There are some legitimate concerns on this issue, and the Government’s response has been proportionate. I hope that I can justify that statement. Proposed new subsections (5A) and (6A) were added to the clause by a Government amendment in response to the debate in another place. The subsections recognise that it is right to allow the Privy Council to place certain conditions on foundation degree-awarding powers, especially when they are awarded for the first time. It is important that the powers should be used with care. The powers are also enabling, and it would be perverse to say that we have limited trust in further education institutions, especially when they have proved their abilities. The Privy Council will take advice from the QAA.

Sarah Teather (Liberal Democrat, Brent East)

I am sorry to interrupt the Minister so soon after he has begun. I just want some clarification. He describes the legislation as enabling, but would not the colleges automatically be awarded franchising powers at the end of the six-year probationary period? Or will they be given degree-awarding powers, with a separate decision being made on whether they should also be given franchising powers?

Bill Rammell (Labour, Harlow)

I will hopefully go on to explain that in some detail, but it is not an automatic provision for the institution to gain permanently the degree-awarding power. That will be an option for the QAA.

Sarah Teather (Liberal Democrat, Brent East)

That was not quite what I meant. If the college passes its probationary period and is allowed to continue with its degree-awarding powers at the end of the six-year period, is it automatically allowed not only to award degrees, but to franchise others to award degrees? Are those powers separate, or are they combined?

Bill Rammell (Labour, Harlow)

Both issues would be examined by the QAA and separate decisions could be made. Let me respond in detail to the hon. Lady’s points. It would be wrong and perverse to say that we have limited trust in FE institutions, especially when they have proved their abilities.

The Privy Council will take advice from the QAA before making an order granting foundation degree-awarding powers. The QAA will make a rigorous assessment based on the non-statutory guidance and criteria document, which we have published and circulated to the Committee. It rightly sets out a very high standard based closely on the current standard for full taught degree-awarding powers, and only top-performing colleges with significant experience in delivering foundation degree programmes could meet the required standard.

It is expected that when an FE institution is granted the powers for the first time, the Privy Council will make a time-limited order of six years and impose two restrictions to prevent FE institutions from authorising other institutions to grant awards on its behalf and to require that any student to whom a foundation degree is awarded must be enrolled at an institution with foundation degree-awarding powers. In the interests of quality assurance, it is right to place those restrictions on an institution granted new powers for the first time. I think that there is a consensus in the Committeeon that.

A six-year probationary period would be an important testing period in which the FE institution will take full responsibility for delivering and awarding its own foundation degrees. The Government accept that there will always be a level of risk when a new measure is introduced. We are trying to manage that risk. Having listened to points raised when the proposals were debated in another place, we agreed that there would be an independent report to Parliament on foundation degree-awarding powers within four years. Clause 18 imposes in primary legislation an obligation on the Secretary of State to lay that report, which I think is a welcome move.

The terms of reference that we have publishedmake it clear that the report could look at whether restrictions in proposed new subsections (5A) and (6A) should continue to apply beyond the probationary period. When an institution applies for a renewal of its powers after the expected six-year probationary period, the QAA will advise the Privy Council again, taking into account the way in which the FE institution has exercised its powers during those six years. Having first awarded limited foundation degree-awarding powers to successful applicants, having then undertaken an independent review of the wider use of the new powers and, finally, having reassessed applicants after six years, I do not believe that it will be necessary to continue imposing blanket restrictions, as this amendment would require.

John Hayes (Conservative, South Holland and The Deepings)

The Minister is making his case with typical clarity. He knows that I am extremely pleased about the four-year report to Parliament; I have pressed very hard for it. However, I want to be absolutely clear about what might happen at the end of the six years. He talked about a blanket restriction. Does he mean that there could be particular restrictions affecting certain colleges? Are we to assume that all colleges would automatically have not only the power to award degrees in perpetuity, but the full range of powers to franchise? Or could some colleges franchise, but others not?

Bill Rammell (Labour, Harlow)

There could be some variation depending on the circumstances of the college and the degree to which it has managed its affairs. There is no automatic progression to open-ended provision of those powers. In those circumstances, the QAA will make a judgment.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I do not want to detain the Committee unduly on this point, but it is important, as the Minister will recognise. Perhaps we should look at where the presumption will lie. Will the presumption be that every college will receive those powers unless there is a good reason that they should not, or will it be the reverse? In other words, will it have to be demonstrated to the QAA that the college in question ought to have the full range of powers to franchise? He will recognise that that is an issue of confidence, particularly among the HE institutions, which we have talked about. We need to ensure that the HE institutions are fully on board with the procedure. They would be considerably reassured if it were clear in the legislation, or any guidance that he might supply, that there will be a presumption against those powers being given widely, unless it can be demonstrated that it is appropriate.

Bill Rammell (Labour, Harlow)

Each case must be judged on its merits. If we want that to happen, it would be wrong to have a blanket set of restrictions and an assumption that the FE institution will not move forward. It will certainly not be automatic, and it must be judged on its merits.

Sarah Teather rose—

Bill Rammell (Labour, Harlow)

If I can make some progress, I shall allow further interventions. The issue is important, and we must get this clarification on the record.

When an institution has proved its ability to take full responsibility for its foundation degree programmes and shown that its academic management procedures are robust, there should be the option to grant it the full powers without further restriction, but that will not be an automatic right. The QAA operates an ongoing quality assurance cycle, and any FE institution granted foundation degree-awarding powers will rightly be subject to regular monitoring.

The institution will need to continue to demonstrate that it is able to guarantee the quality standards of provision for students on its foundation degrees, wherever and however that provision is delivered. Failure to do so, irrespective of where the provision is delivered, could lead to intervention by the QAA. That could occur as part of the regular cycle of quality audits, or it could be picked up as a cause for concern at any time. The QAA has a robust mechanism for dealing with causes for concern in higher education, whether they occur in HE or FE institutions.

Sarah Teather (Liberal Democrat, Brent East)

I intervene in the hope that the civil servants might be able to pass the answer to the Minister if he is not immediately aware of it. If he can stipulate that there is in the current guidance, or give an assurance that the new guidance will contain, a clear separation of the two points—degree-awarding powers and franchising—I will be happy to withdraw the amendment. If that will not be in the guidance, I shall press the amendment to a Division. I would like an assurance that that is in the guidance now or that the Minister will agree to put it in. The point is thatthe decision should be taken after the six-year probationary period.

Bill Rammell (Labour, Harlow)

I think that I can give the reassurance that the hon. Lady asks for. If I slow down my comments, I am sure that we will be able to get it on the record in the appropriate form.

Jeremy Wright (Conservative, Rugby and Kenilworth)

In a helpful spirit, may I ask the Minister to give us a further reassurance? If the QAA decides that it is appropriate for franchising powers to be granted to a particular college, it will have to assess what is required of secondary colleges that may then be franchised by that college. Will information about that be available in guidance, or can it be made so?

Bill Rammell (Labour, Harlow)

I want to come specifically to giving significant reassurance on the issue of franchising, but I shall continue where I was.

Of course, failure to gain a judgment of confidence from the QAA would rightly have serious consequences for an institution’s reputation. We should place confidence in the ability of the FE system to work to the same standards as the HE system in deliveringand awarding foundation degrees. There are some outstanding institutions in the FE sector, and it is right that their excellence should be recognised and rewarded. It would be disappointing if Members felt unable to invest their full confidence in the sector.

I shall deal specifically with the concerns that have been expressed, which I understand, about the practice commonly referred to as overseas franchising. By franchising I mean the practice of one institution authorising another to make awards on its behalf, and one institution making awards to students who are not enrolled in it. When we initially consulted on the proposals in November, we explicitly signalled that we were seeking views on the issue. It has been debated at length, and I can offer the hon. Member for Brent, East and other hon. Members the following reassurance. First, the QAA currently examines the international activities of higher education institutions through a programme of overseas audits. It is possible to include FE institutions with foundation degree-awarding powers in the scope of those overseas audits. Secondly, a periodic special review of foundation degrees delivered overseas could also be considered bythe QAA.

John Hayes (Conservative, South Holland and The Deepings)

This is a complex subject, and the Minister is taking us through it point by point. The audits that he is describing—we know that they are widely used now, as a number of universities, including my own old university, do extensive work with overseas campuses—are rigorous. Are we to understand that the audits that would apply to FE colleges would be precisely the same as the audits that currently apply to those universities that have overseas satellites?

Bill Rammell (Labour, Harlow)

Yes.

Tim Boswell (Conservative, Daventry)

I am grateful to the Minister for giving way. His reassurances are helpful. Will he also consider a situation in which somebody is unhappy about something and draws it to the attention of the QAA? Will he confirm that the QAA could carry out an immediate investigation, either abroad or within the UK, to determine whether there was any substanceto it?

Bill Rammell (Labour, Harlow)

That is most certainly the case.Under the existing arrangements for higher education institutions and in respect of these proposals for foundation degree awarding powers, the QAA has those powers of intervention. It has them currently, and it will continue to have them.

I was saying that there would be a periodic special review of foundation degrees delivered overseas and that that could be considered by the QAA. The QAA is also currently reviewing its work with regard to transnational education and will shortly deliver a revised strategy. Foundation degree awarding powers could be included as one of the factors to be considered by the review.

Under clause 17, there is no necessity that any college will ever acquire the right to grant foundation degrees to students taught overseas. We have introduced a number of measures to safeguard the international reputation of the UK degree brand, of which we can all rightly be proud. As I said, we made it clear that for the first time-limited grant of the new powers the QAA will advise the Privy Council so that so-called franchising could be ruled out. This is a significant departure from precedent and I think it provides an important safeguard.

Secondly, we have said that the independent review of the use of the new powers will look at the case for allowing franchising. Thirdly, when a college applies to have its foundation degree-awarding powers renewed, full powers, including the power to award foundation degrees to students taught overseas, need not always be granted. In making recommendations to the Privy Council, the QAA will look at the general conclusions of the independent report and at the specifics of the college’s applications.

We have set out a comprehensive approach to managing the risks that have concerned hon. Members. I repeat that under our proposals we are not sayingthat awarding foundation degrees to students taught overseas should definitely be ruled in. To respond directly to the question raised by the hon. Member for Brent, East, the guidance can be separate but the guidance on franchising will not come into play forsix years and it will be drawn up to take account of the independent review after four years. That is the point that I was making a moment ago.

We have put forward a significant degree of reassurance but—this is the crucial element of this debate and it cuts to the heart of the matter—the amendment goes further. It says that this practice should be ruled out permanently, for ever and a day. Here, for all that we have worked constructively together to achieve consensus around workable proposals, we have an element of disagreement. The whole basis for the Government’s approach is that, subject to appropriate quality control and the management of legitimate risk, we should give greater freedom to the top providers of higher education within the further education sector.

In the end, this principle applies to overseas operation as it does to the basic awarding of degrees to students at home. The controls need to be greater because the risks are greater. But if it is argued that top colleges could never be trusted with these proposals, I fundamentally disagree. I would be surprised if that were the contention that was being put forward this afternoon. We have provided reassurance. We have put forward a proportionate set of reassurances. There is no automaticity and I would hope on that basis that the amendment can be withdrawn.

Sarah Teather (Liberal Democrat, Brent East)

I am a bit disappointed with the Minister’s response. What I think he has just said is that the review of the franchising powers will take place within the four-year review of the legislation rather than what I asked for. I asked for a separation, clearly stated in guidance, so that at the end of the six-year probationary period, the Privy Council could decide whether, first, the college could continue to award degrees and, secondly, having been granted the ability to award degrees, it could also validate the award of degrees by others.

Bill Rammell (Labour, Harlow)

I am sorry if I have not been clear. I have been trying to say that two separate functions will be available to the QAA at that stage.

Sarah Teather (Liberal Democrat, Brent East)

Is that point written clearly into the guidance? I think that the two points are currently conflated, rather than shown separately.

Bill Rammell (Labour, Harlow)

I believe that that reassurance is there. It certainly exists because of the debate that has taken place and the statements that are on the record, both here and in another place. However, I shall seek to ensure that that is made abundantly clear in the regulations.

The rest of the debate is in Hansard.