Apprenticeships, Skills, Children and Learning Bill

House of Lords, 12 October 2009.

Committee (6th Day) (Continued)

Baroness Morgan of Drefelin (Labour)

My Lords, I shall also speak to government Amendments 136D, 136E, 140A, 140B, 143A and 143B, as well as Amendments 137 to 142A—just in case we were not sure where we were.

This is an important debate about the transport duties in the Bill and earlier legislation, which seek to ensure that adequate transport support is made available for 19 to 24 year-olds with learning difficulties and disabilities. The noble Lord, Lord Low, will know well, as I am sure he will remind us in a few moments, that steps are already being taken to improve transport arrangements. Indeed, we are very grateful for the work that he and his charities have done to support us in bringing forward these measures today. I am speaking in particular about the new requirement in Clause 55 for local authorities to produce a policy statement setting out the transport arrangements available to learners with learning difficulties and disabilities.

We need to ensure that local authorities are absolutely clear about their responsibilities and provide adequate transport support. Therefore, we are looking carefully at whether statutory guidance is needed in respect of Clause 55. Without pre-empting what I am sure others will want to say, I am happy to commit to returning to this issue on Report. I should like to put on record my thanks in particular to the noble Lord, Lord Low, and to Skill for their contribution to our work in this area. I am pleased with the progress that we have been able to make.

On Amendment 142, of course young people aged 19 to 24 with learning difficulties and disabilities should have the right to complain about transport arrangements, as their peers do. As noble Lords will be aware, my honourable friend Sarah McCarthy-Fry agreed to look again at complaints provisions during the consideration of the Bill in another place. Having listened to the representations, in particular from the noble Lord, Lord Low, and the noble Baroness, Lady Sharp, I am pleased to inform the Committee that we are moving these government amendments to achieve the aim set out in Amendment 142. This will ensure that all young people have a voice in local transport arrangements and that local authorities will have the information that they need to make sure that transport arrangements meet young people's needs.

I understand that there are concerns that there should be a link between Clause 40, which we have already debated, and Clause 55 so that transport and the commissioning of educational provision are not considered independently. I wholeheartedly support that view. I reassure the Committee that the national commissioning framework issued under Clause 40 will specify that local authorities must consider transport arrangements in carrying out their new commissioning functions. Any guidance issued under Clause 55 would also make this link clear. We are exploring how to make a more explicit link in the legislation. We will keep the Committee updated and come back to this on Report.

I understand the sentiments behind Amendments 139, 141 and 142A. I hope that noble Lords will agree that the right balance can be struck between national requirements and local discretion to manage the new transport arrangements; indeed, we discussed this a little earlier in Committee. I understand that noble Lords' intentions are good, but it is an important principle that local authorities should have responsibility to plan local transport provision. At the same time, accountability in the planning and execution of that provision is vital. That is why the Secretary of State already has power under the existing sixth-form transport duty and under Sections 496 and 497 of the Education Act 1996 to direct a local authority to review its policy or to make additional transport provision if necessary. I would prefer to draw on these existing provisions rather than to create new provisions to ensure that local authorities are accountable for local transport arrangements. Over the years, there has been some refinement of transport provisions. One thing that we are trying to do in this Bill by re-enacting the adult transport duty is to make clear what the entitlements are. It is good to be clear and straightforward on the face of the Bill if we can.

The other government amendments—I will not bore your Lordships with all the numbers—are technical amendments to make minor drafting changes to Clause 54 to support the major government amendment, Amendment 140B.

I hope that noble Lords will appreciate that we have listened carefully to the concerns of those with learning difficulties and disabilities. We are working hard to ensure that, through introducing the new complaints procedure and coming back on Report with further developments, noble Lords will be comfortable with this approach.

Lord Low of Dalston (Crossbench)

As the Minister said, I have my name against Amendments 137, 138 and 140, along with that of the noble Baroness, Lady Sharp. As noble Lords will be aware, I am president of Skill, the National Bureau for Students with Disabilities, to which the noble Baroness referred. Skill has had a long-standing concern that there should be a duty on local authorities to provide the transport that students with learning difficulties aged 19 to 25 might need to take part in their educational programmes. We have moved amendments on that in this House in preceding sessions.

As the noble Baroness has made clear, considerable work has taken place. Last year, when we moved these amendments, the Minister undertook to do further work to see how far the spirit of the amendments could be delivered. I am delighted that a lot of further work has taken place. Ministers have listened and I pay tribute to them, to the Bill team and to my own assistant, William Moy, who has undertaken much liaison between myself and the Bill team, for the work that they have all done and the way that they have listened. The result is that it should be possible to withdraw the amendment this evening.

Over the years, we have sought to improve the legislation in four respects. In respect of current legislation, we wanted to see an amendment to Clause 55 that ties the duty to provide transport in the clause to the reasonable needs of disabled learners aged 19 to 25—not just what the authority considers necessary, but along the lines of the wording in Clause 40. Secondly, we wanted to see statutory guidance to support the duty in Clause 55. Thirdly, we wanted a robust complaints procedure to support the duty—one that mirrored the transport complaints procedure available to sixth-formers. Finally, we wanted clarification that the duty in Clause 112 on the chief executive of the Skills Funding Agency to have regard to the needs of persons with learning difficulties aged 19 or over includes transport.

Having listened to what the Minister has said, I think that we have got pretty well all that we were asking for—and more than one often has a right to expect on these occasions. The Minister referred to the thinking on producing statutory guidance. She hopes to return with something further to say on Report, and we welcome that. As regards the complaints procedure, we very much welcome Amendment 140B and associated amendments. The Minister has undertaken to ensure that guidance establishes a link between the wording in Clauses 40 and 55, and we look forward to hearing what she says on that on Report. We very much welcome progress so far. If it is possible for the Minister, as she has indicated, to draw that link in the Bill, so much the better—we will welcome that all the more warmly.

The Minister said that she hopes to return to the issue of statutory guidance on Report. We welcome that. I have already welcomed the amendments relating to the complaints procedure. All that remains is for the Minister, when she winds up, to clarify that the duty in Clause 112 on the chief executive of the Skills Funding Agency to have regard to the needs of persons with learning difficulties aged 19 or over includes transport. If she were able to do that, I would feel that my cup runneth over.

Baroness Garden of Frognal (Liberal Democrat)

My Lords, I shall speak to Amendments 141, 142 and 142A. I speak also on behalf of my noble friend Lady Sharp.

I thank the Minister for the government amendments, and for the very recent letter that I retrieved an hour ago on this topic, which is very helpful and addresses some of the issues mentioned earlier. These were in response to concerns raised particularly by the Association of Colleges that some local authorities may not fulfil their statutory duty to produce appropriate transport plans for 16 to 19 year-olds and implement them effectively. The Minister covered these points very effectively in her statements, and also with her assurance that we will return to this on Report.

The particular concern of Amendment 141 is that the powers of the Secretary of State that extend to a local authority to review its transport policy could also extend to a general overview of transport across the country, rather than to the specific locality. It was not clear, after the abolition of the Learning and Skills Council, which organisation would take general responsibility. We welcome the moves that the Government have made, the statements on complaints from 16 to 19 year-olds and their parents, the other points in the letter and the amendments.

Amendment 142 has been covered, but I would like to speak to Amendment 142A, which links local authorities' transport policies to the funding that they receive from central government. The local government financial report sets out the level of the revenue support grant payable to local authorities in that year. Each authority receives a grant based on an amount calculated using a relative needs formula made up of seven service blocks. From those blocks, local authorities should fund transport to schools and colleges for the most disadvantaged young people in their area.

By linking this to a policy where the money provided by central government goes to specific areas of service, transport assistance for poorer students would be implicitly ring-fenced, because there can be a disconnection between the local authority's policy and the reality of students trying to access the assistance that the authority claims to offer. A recent Association of Colleges survey showed that 87 per cent of colleges were subsidising transport, at an average cost per college of £305,000. Colleges were trying to fill the gaps where local authorities were not adequately funding transport. There was an additional concern that some students were using their maintenance allowance to support attendance at college. The responsibility of local authorities would be clearer if the transport policy was linked directly to the funding allocated for it. We welcome the assurances from the Minister that we will return to this on Report.

Lord Lucas (Conservative)

My Lords, I have no wish to rain on the parade of the noble Lord, Lord Low. He seems to have achieved a great deal, and I am immensely envious. Therefore I shall not speak to my amendment, which was covered anyway by what the noble Baroness said. The current discussion about local authorities looking after the learner returns me to my sadness that we have returned further education colleges to local authorities, which will blur their interests. Rather than LEAs wanting their students to get the best provision going, I fear that they will go back to their old, bad habits of wanting their students to go to their schools and colleges before allowing them to stray.

Lord de Mauley (Conservative)

My Lords, these amendments all address transport provision, particularly as regards those with learning difficulties. It seems that their main purpose is to facilitate the attendance of those receiving education at institutions and to ensure that local authorities follow through on the responsibilities they are given in regulations and guidance—matters which I am sure the Minister will assure us are now thoroughly tied down. However, I am not entirely sure that all Members of the Committee have had time to consider carefully the letters that the Minister has sent. I think it would be helpful if, in her response, she could be a bit more detailed regarding the assurances that she is giving.

I thank her for carefully considering the concerns of the noble Lord, Lord Low, and others. It is right that the Government extend the new measures concerning complaints to young people between 19 and 24 with learning difficulties and disabilities. There are a number of amendments in this group proposed by the noble Lord, Lord Low, the noble Baroness, Lady Garden, and my noble friend Lord Lucas. They have made their cases and I shall cut short my remarks for the moment, save to take this opportunity to say that I am grateful to the Minister for her letter—which I think is one of several but I saw it only this morning—on the provisions in Clause 54 concerning sixth-form transport complaints. It would be helpful to understand whether any incremental cost is involved over the status quo and, if so, how that will be funded.

Baroness Howe of Idlicote (Crossbench)

My Lords, I want to say again how obviously successful the negotiations with the noble Lord, Lord Low, and his various helpers have been. Clearly, great advantages arise from what he has achieved. I particularly reinforce the point of the noble Baroness, Lady Garden, concerning Amendment 143A. If 87 per cent of colleges are in fact funding transport needs themselves, it is clear that there will have to be some additional tightening up. Perhaps the Minister will address that. That aside, I think that a great deal has been achieved and it says a lot for the amount of time that people have put into this matter during their holiday period.

Baroness Morgan of Drefelin (Labour)

My Lords, I shall briefly pick up a couple of points as I do not want to repeat everything that I have said. To be clear, we see the enhanced complaints procedure and the opportunity for local authorities to respond quickly and in-year as a very important step in driving a much more responsive service. This is really about meeting the needs of young learners but it is also about meeting some of the concerns voiced by the Association of Colleges, as the noble Baroness highlighted. Following this debate, it may be appropriate for me to write again to Members of the Committee, but with a little more notice, setting out the progress that we have made and why we think it makes a difference. However, we believe that the complaints provision that we are introducing in Clause 54 should ensure that local authorities listen and react to young people's transport needs. In respect of the point raised by the noble Lord, Lord Low, concerning Clause 112, we will make it clear to the chief executive of Skills Funding, through guidance issued by the Secretary of State, that the organisation must consider access issues in carrying out its responsibilities and consult local authorities about transport requirements for learners over the age of 19 with learning difficulties but without a learning difficulty assessment. I should have mentioned that and I put that on the record too.

I am not sure that I have anything further to add but I hope that, with additional background briefing, noble Lords will consider this matter further on Report.

Amendment 136C agreed.

Amendments 136D and 136E

Moved by Baroness Morgan of Drefelin

136D: Clause 54, page 39, line 20, after "local" insert "education"

136E: Clause 54, page 39, line 25, leave out subsections (3) to (5)

Amendments 136D and 136E agreed.

Clause 54, as amended, agreed.

Clause 55 : Local education authorities in England: provision of transport etc for adult learners

Amendments 137 to 140 not moved.

Amendments 140A and 140B

Moved by Baroness Morgan of Drefelin

140A: Clause 55, page 41, line 1, leave out "certain young adults" and insert "young adults subject to learning difficulty assessment"

140B: Clause 55, page 42, line 2, at end insert—

"508H Complaints about transport arrangements etc for young adults subject to learning difficulty assessment: England

(1) A local education authority may revise a statement prepared under section 508G to change any matter specified under subsection (3) of that section if, as a result of a relevant young adult transport complaint, they have come to consider the change necessary for a purpose mentioned in section 508F(2) or (3).

(2) A local education authority must revise a statement prepared under section 508G to change any matter specified in subsection (3) of that section if, as a result of a relevant young adult transport complaint, the Secretary of State has directed them to do so.

(3) An authority that revises a statement under subsection (1) or (2) must publish the revised statement and a description of the revision as soon as practicable.

(4) The Secretary of State need not consider whether to exercise any power under sections 496 to 497A (powers to prevent unreasonable exercise of functions, etc) or subsection (2) of this section in response to a matter that is, or could have been, the subject of a relevant young adult transport complaint made to him or her unless satisfied that—

(a) the matter has been brought to the notice of the local education authority concerned, and

(b) the authority have had a reasonable opportunity to investigate the matter and respond.

(5) In this section "relevant young adult transport complaint" means a complaint that is—

(a) about a local education authority's exercise of, or failure to exercise, a function under section 508F or 508G in relation to relevant young adults, and

(b) made by a person who is, or will be, a relevant young adult when the matter complained of has effect, or by a parent of such a person,

and "relevant young adult" has the meaning given in section 508F.

(6) For the purposes of section 508G(7) and (8), the revision of a statement under this section is to be treated as the preparation of a statement under section 508G.

(7) Where a local education authority have published in a single document a statement prepared under section 509AA and a statement prepared under 508G, the requirement to publish a revised statement under subsection (3) is to be treated as a requirement to publish a version of the document that includes the revised statement."

Amendments 140A and 140B agreed.

Clause 55, as amended, agreed.

Amendments 141 to 142A not moved.

Clause 56 agreed.

Amendment 143 not moved.

Clause 57 agreed.

Schedule 2 : LEA functions: minor and consequential amendments

Amendments 143A and 143B

Moved by Baroness Morgan of Drefelin

143A: Schedule 2, page 164, line 34, at end insert—

"6A In section 496 (power of Secretary of State to prevent unreasonable exercise of functions) after subsection (4) (as inserted by section 214(1) of this Act) insert—

"(5) This section is subject to sections 508H and 509AE (complaints about transport arrangements etc)."

6B In section 497 (general default powers of Secretary of State) after subsection (5) (as inserted by section 214(2) of this Act) insert—

"(6) This section is subject to sections 508H and 509AE (complaints about transport arrangements etc)."

6C In section 497A (power of Secretary of State to secure proper performance of LEA's functions) at the end insert—

"(8) This section is subject to sections 508H and 509AE (complaints about transport arrangements etc).""

143B: Schedule 2, page 165, line 15, leave out "and 508G" and insert ", 508G and 508H"

Amendments 143A and 143B agreed.

Schedule 2, as amended, agreed.

Clause 58 : The Young People's Learning Agency for England

Amendment 144

Moved by Lord Hunt of Wirral

144: Clause 58, page 42, line 29, leave out subsection (1) and insert—

"( ) There is to be a body which is part of the Skills Funding Agency known as the Young People's Learning Agency for England."

Lord Hunt of Wirral (Conservative)

My Lords, we now move on to a very important group of amendments. I think that there are 18 altogether in the names of my noble friends and my noble colleagues in the Liberal Democrats, and they all address a further complex and significant area of the Bill—namely, the establishment of the Young People's Learning Agency for England.

In the Bill, the Government propose to abolish the Learning and Skills Council, which was responsible for all post-16 education, and instead to divide up responsibility for education by age. The Explanatory Notes to the Bill state that local education authorities will have a duty to secure education for all those who are of compulsory school age but under 19 and for those persons who are between 19 and 24 and for whom a learning difficulty assessment has been carried out. Responsibility for post-19 education and training will be given to the chief executive of Skills Funding. That is the impression that I garnered of the Government's intentions and I hope that the Minister can correct me if I am not representing the case correctly. Therefore, the purpose of the YPLA will be to support local authorities and to provide national frameworks, which should help them to carry out their duties with regard to education for 16 to 19 year-olds.

Notes provided by the Bill team state that this new and "slim line" body will help local authorities to carry out their duties by,

"ensuring coherence of commissioning plans, managing the national funding formula, and providing strategic data and analysis".

Therefore, the YPLA will check the plans that local authorities have produced and channelled through the sub-regional and regional groupings. It will then fund local authorities to meet these plans and it will retain powers to intervene if it looks as though local authorities will not be able to produce the plans in the time available. Earlier today, the Minister said that in extreme cases it will have powers to intervene more generally. Will it? I should be very pleased to have a little more explanation. The purpose of all the amendments is to probe what this new body—the YPLA—will be like and what it will do.

I have already shared with noble Lords the concerns that we have about the convoluted, confusing and incoherent nature of much of this Bill and the quangos that it produces. The abolition of the Learning and Skills Council and its replacement by different quangos, institutions and authorities to carry out its duties, with the division based on age, will cause a great number of difficulties. I hope that the Minister will go into a detailed explanation of how she hopes that it will work. We think that it is vital that the arrangements for funding and management of skills are coherent, consistent and effective. Our preference would be for a simple and streamlined system with clear lines of accountability. Amendments 144, 147, 148, 149, 150 and 151 attempt to probe why it is not possible to place the duties of the YPLA under the Skills Funding Agency.

Our Clause 58 stand part move is to allow a debate on the whole nature of the YPLA and its relationship with the other bodies that the Government would like to create. This would allow the SFA to provide the central and overarching authority. That is in line with our own desire for a simple and streamlined system. We acknowledge the importance of local authorities in education. Nevertheless we would not devolve responsibility for educating those above the compulsory school age but below 19 to them. I suppose we would then remove the need for the YPLA altogether.

Instead, our preference is for a central Skills Funding Agency that would have responsibility for educational funding both above and below the age of 19. Of course, we acknowledge the importance of local authorities in education and the help that they provide, so our Amendment 169ZC would make local authorities a mandatory consultee for the chief executive of the SFA in carrying out his duties in that capacity. Does the Minister agree that that would help reduce the bureaucracy and confusion that would result with two separate agencies dealing with a system of education that in all my experience does not easily divide neatly between under 19 and over 19? Concern has been expressed by many groups, and we have heard them. The Local Government Association, for example, states:

"Despite the Government's stated desire to keep the new system bureaucratically simple the complexity of the proposals means the reality may not match this aspiration".

The Government appear to have acknowledged the arguments of those expressing concern but the reaction seems to be only to call this YPLA slim line. That is said wherever possible to emphasise that it will not cause the bureaucratic muddle of which we are all afraid. The Minister referred to it as a "light-touch national body" in her Second Reading speech, if I have got it right, but we have yet to hear a proper explanation of how the lines of reporting, funding and accountability will work in this slim line body, to avoid these difficulties. We concur with the worry of the Local Government Association and hope that the Minister can answer that concern in terms of practicalities rather than in terms of her vision, her dream, or her aspirations. Does she acknowledge that legislating for a new system is not enough to make up for the failures of the Learning and Skills Council? She may be able to explain what the SFA and the YPLA will do, but it is even more important that she explains how they are expected to do it. To that end, will the Minister answer our amendments that probe why the YPLA could not just come under the SFA? Does she not accept that an overarching body might help to simplify the lines of accountability and strategy while still allowing the YPLA to fulfil its obligations in providing funding to local authorities?

Of course, lots of other bodies have expressed worries about the nature of the Government's reforms. The National Union of Teachers, for example, said that it was worried about,

"the creation of a plethora of new agencies, with the Skills Funding Agency and the Young People's Learning Agency. We are in danger of exchanging the bureaucracy of the LSC for two new agencies".

The NASUWT referred to the establishment of this body as,

"an unnecessary tier of bureaucracy and administration".

The British Chambers of Commerce commented:

"The government's planned abolition of the Learning and Skills Council (LSC) and replacement with a number of new agencies for the sake of organisational efficiency is bizarre".

Need I go on? There is widespread opposition. I hope that the Minister has a well-prepared answer. Knowing her advisers, I am sure that it has been well prepared. I hope that it will outline the necessity and benefits of replacing some of the functions of the LSC with the YPLA.

I have carefully studied the impact assessment—both volumes. It says that,

"in order to ensure that any potential increases in bureaucracy are minimised, the DCSF and DIUS have been working closely with representatives of the provider sector".

I am a bit confused about that. Perhaps the Minister can say what potential increases in bureaucracy are contemplated. I am merely quoting from the impact assessment. What potential increases in bureaucracy have been under discussion? Will she update us on the progress of these talks?

John Hadwin, on behalf of the Surrey area liaison committee, university and college union has commented on the difficulties of division by age, particularly as regards FE colleges. He has written of a former colleague who taught two full-time courses, two part-time day courses and an evening class. Apparently his classes split 18-4 and 19-3 between 16 to 19 year olds and 19 plus students. In the part-time day courses the split is 5-10 and 8-6 and the evening class is divided 3-14. Will the Minster tell us whether it is her assumption that the passage of this Bill will mean that two different agencies, responsible to two different government departments, will want records of those students and may perhaps also have different criteria for their funding?

We have tabled the amendments to express our deep concern about what we regard as the further confusion that the Government are bringing into the education sector. The abolition of the LSC is already under way. Perhaps among her other remarks, the Minister can give us an update on progress. Our Amendments 145, 146A and 169A are designed to probe the nature of the abolition of the Learning and Skills Council and its replacement by the YPLA and SFA in terms of how much the transition will cost and how many people will be employed by each of these new agencies. Page 33 of the impact assessment states:

"We expect the new system will at worst be revenue neutral for providers and there could potentially be significant benefits in terms of a more informed and integrated commissioning of their services by authorities".

I hope that we will get some facts and figures that will back up that remarkable statement. It is rather disingenuous of the Government to keep referring to a slim line agency and light-touch bodies when the Bill seems to be introducing more bodies and more bureaucracy. The fear of those in the sector, and the fear on these Benches, is that it will all mean increased spending, more staff, more bodies, more consultation and more cost. We look for reassurance with some firm facts and figures.

Those concerns were raised in another place—I have been carefully reading through the Committee report—when Ministers struggled to come up with any solid figures. The updated impact assessment produced as the Bill entered your Lordships' House has provided some preliminary figures of transition costs, with the proviso that final figures would be produced closer to September. Here we are. I think that it is October. I have seen nothing so far. We need all this urgently. Can the Minister provide us with an update on the new figures? The constant emphasis on the very rough and initial nature of the principal figures gives us cause to doubt their reliability. It is all too easy for the Government to hide behind their claims of cost-neutrality, which I must say has an air of hope, rather than of reality about it.

It is interesting to note the difference between the two impact assessments. In another place, the impact assessment stated:

"We expect the ongoing costs of operating the new system to be revenue-neutral compared to the current system in the short-term, with savings and efficiencies through a more integrated service at local authority level in the medium to long-term".

However, by the time that the impact assessment reached your Lordships' House, it talked only about maximising any potential savings. What has caused this change of emphasis and apparent decline in certainty about cost savings? Has further analysis undermined the Government's confident claim that there would be savings and efficiencies in the medium to long-term? I think the Minister will have to admit that there has been ample opportunity for the Government to defend their assertion that there will be cost savings, yet we have had no solid figures. At this stage of the Bill, I do not think that that is adequate.

Amendments 145 and 169A probe the Government on the number of people employed by the YPLA and the SFA. Amendment 145 states that the YPLA is not permitted to employ more than 500 people in total; Amendment 169A states that the chief executive may not employ more than 1,800 people in total. In another place, the Minister stated that he expected about 500 staff to transfer from the LSC to the YPLA and about 1,800 to transfer to the YPLA, which would then leave about 1,000 to transfer to local authorities. The Minister was, however, rather cagey about putting what he termed a straitjacket on the bodies, which would not allow them to employ more people than that. He said that he did not expect there to be a reduction in the head count. Of course, that calls into further doubt the Government's assertions about cost savings.

Does the Minister in fact expect an increase in numbers? After all, if the staff from the LSC are simply being divided between two bodies, does she accept that it is very likely that there will be more functions required and, consequently, more staff? It would be very useful if the Minister could expand a little on the structural changes that we might expect. As I said, the impact assessment informs us that the transfer will be cost-neutral. Both the SFA and the YPLA will have their head offices in Coventry, which currently houses the head office of the Learning and Skills Council, so, on paper, the Government will have achieved little more than dividing one institution into two. Can the Minister inform us of all the benefits that we should hope to see from the change? I must say that I look forward to her response. I beg to move.

Baroness Sharp of Guildford (Liberal Democrat)

My Lords, my name is down with that of the noble Baroness, Lady Verma, and the noble Lord, Lord De Mauley, as questioning whether Clause 58 should stand part. In addition, within this group, we have tabled a number of amendments—Amendments 146B to E, 153ZA, 155A, 161A and 161B. I shall shortly explain why we have tabled those amendments.

Although we have been questioning why Clause 58 should stand part, we have a somewhat different vision from that of the Conservatives as to where we want education to go. Unlike the Conservatives, our vision is one that involves local authorities. We feel it is very important that education serves local communities and is seen to do so, and that schools should co-operate in serving their local communities. Therefore, we see local authorities, which are the elected local representatives running those communities, as being key operatives within the whole process. On the whole, we want local authorities to be running the education system with the minimum of national guidelines and interference. Therefore, we basically welcome the thrust in the Bill of decentralising to local authorities—which one essentially sees here for the 14 to 19 age group.

In this sense, we are much closer to the Government because, as I said, they want to push the responsibility for the 14 to 19 age group down to local authorities. Similarly, although this language is somewhat different from the language that they were using three or four years ago, they are now anxious to see schools co-operating instead of competing with each other. I am delighted to see the spirit of co-operation between schools promoted by the Government—one which we advocated during the passage of various education Bills before this House when the Government were anxious to set up separate trust schools and academies competing with each other.

We are, I must confess, somewhat perplexed as regards the Conservatives' plans. Although the Government's plans talk at the moment about 16 to 19, it looks as though they are moving towards funding 14 to 19 as a block. That has been Liberal Democrat policy for some time, so we are delighted to see it. However, as regards the 14 to 19 age group, we do not quite understand where the Conservatives are. On the one hand, the thrust of their policies is that secondary schools, in particular, but all schools, should stand on their own and be independent, like academies. Academies are answerable directly to the department. We assume that all new schools set up by private enterprise, trusts and so forth, would be answerable to and funded by the department, so there would be one stream of funding coming through the department. Further education colleges would be funded by the Further Education Funding Council. Finally, all those schools not going independent will be funded by local authorities. Effectively, to my mind, the Tories will set up a very complex system of funding for 14 to 19, one that involves three different streams of funding: one from the department directly, one from the FEFC and one from local authorities. They talk about wanting to have clear and consistent lines of responsibility and a coherent, consistent and effective system, but I do not think that they will achieve that with their plans.

Our vision is of local authorities playing a key strategic role in commissioning and developing the local education offering. Far from removing schools from the local education funding regime, we see all funding passing through local education authorities. Although our model is one in which funding follows the pupil—thus the pupil premium which we proposed several years before the Conservatives—it envisages a per capita funding for all pupils at a particular level, primary, secondary, or 16 to 19, with extra payments for pupils from disadvantaged homes, who may need more intensive tuition and help with learning, just as we have for some time accepted that those with learning difficulties should carry extra funding.

Hence, while there may be a national funding formula, our view is that there is no need for the YPLA and that the money should go directly from the department to local authorities, just as it goes from the department to schools via local authorities. These days, it is ring-fenced, but the funding is nevertheless channelled through local authorities directly to schools. If we are going to be channelling it to schools, we feel it should cover the whole 14 to 19 block. As the noble Lord, Lord Hunt, began by saying, local authorities are now responsible for the provision of education and training, which covers the apprenticeship area. We would like to see the money going through local authorities, which have these responsibilities.

Local authorities will have to produce their commissioning plans to be approved by the YPLA. A very complex net is being proposed. This is how colleges are going to be funded in future: the YPLA, with the help of local authorities, is to carry out its new responsibilities by developing a national framework to support planning and commissioning. That is fine. Each local authority will assess supply and demand for 16 to 19 in their area and take the assessment to the sub-regional group of local authorities of which it is a member. The plans will then be agreed by the regional planning group, which will scrutinise local plans and ensure that they are coherent, can be funded within the regional budget and will deliver the 14 to 19 entitlement. Regional development agencies will help to ensure that the plans for young people will deliver what is needed by employers, taking into account the regional economic strategy and the regional skills needs. Regional government offices will then contribute to the discussion of regional priorities and support local authorities in undertaking their new responsibilities. They are, and will continue to be, a conduit for information to flow from sub-regional groupings. The YPLA will check these plans to ensure that they cohere and are affordable and will fund local authorities appropriately. Local authorities will pass on the funding to their colleges. The colleges will have a separate stream of funding for apprenticeships and will have streams of funding from the SFA for post-19s and from local authorities for under-19s. These are complex streams of funding and there is a complex process written to all of this.

One of the things that those of us who have been involved with the YPLA and who have looked at the plans for its development have been very perplexed about is that the Government have proceeded as though the Bill has been passed. We now have shadow authorities in place. The LSC is being broken up and people are being allocated, some to the YPLA, some to the SFA and others to local authorities. We have heard the figures being mooted about the numbers that will be passed over. Talking to our local government colleagues, it is quite clear that, as far as they are concerned, so much has already taken place that they feel it is almost impossible to roll the thing back and therefore the sensible thing is to accept that the YPLA and these other bodies will come into being.

With this in mind, we took a long, hard look at the proposals in the Bill, the Explanatory Notes, estimates of the costs and the series of briefings that the Bill team provided to work out the 16 to 19 proposals. One of the things that struck us substantially was the disjuncture between what is stated in the Bill and what we were told in the briefings about the functions of the YPLA. The department assured us that the YPLA will be a small, slim-line authority whose main job is to distribute money between authorities. Sure enough, those are the main functions of the new organisation set out in Clause 59. They are totally financial. The supplementary powers granted in Clauses 59 and 60 are both financial but Clauses 61 to 74 grant power to develop targets and assessment schemes, to secure suitable education and training directly if necessary, to intervene if local authorities fail to do the job they are supposed to do, to undertake R&D connected with its functions—we have no objections to that that as it is a perfectly viable function—and to issue guidance to local authorities to which they must have regard.

These are all rather stark powers and present the authority as an interventionist authority. Contrast them with the story we were told in the briefings on 16 to 19 arrangements. In them, far from being a stern interventionist authority, the YPLA is almost cuddly. We were told that its main functions will be to assist local authorities. It will produce a national commissioning plan and will work with local authorities and their regional partners to make sure that they use the plan effectively for their local needs. One of the problems we faced in looking at all this has been that there appears to be a slightly changing agenda. It is well known that the letter from the noble Lord, Lord Mandelson, to Jim Brathwaite at the South East England Development Agency is now in the public domain, and it is quite clear that the role that the regional development agencies will play in vetting plans that come forward and setting skills strategies in their local regions that local authorities will have to fit into is quite different from what was originally envisaged and that regional development agencies are to play a much more substantial role. To some extent, we share the Conservatives' cynicism about regional development agencies. Our cynicism is because they are not elected, but totally appointed. Why should they start dictating to people what they should do? We would like to see them have some electoral responsibility behind them. We were told in the briefings that there will be a national commissioning plan and that the YPLA will work with local authorities and their regional partners to produce regional and national data that will feed into the planning process and help with cross-regional commissioning and so forth where appropriate.

This disjuncture between the Bill and what we have been told the YPLA's functions will be has led us to table our amendments in this group. The first set of amendments relate to Schedule 3, which sets up the YPLA. Paragraph 2 relates to membership. It is proposed that membership should be between six and 13. We feel very strongly that six is much too few for an authority that would represent so many different interests. Therefore, in Amendment 146B we suggest a minimum of 10 rather than six. Sub-paragraph (3) stipulates the desirability of appointing people with experience of the YPLA's functions, and we have suggested that it might be expanded to include people from such areas as schools, colleges, vocational training and youth offending, all of which fall within the purview of the YPLA. We might also have said that it ought to contain representatives from local government because it is substantially dealing with local government. Paragraph 5 of Schedule 3 states that the CEO shall be appointed by the Secretary of State. We suggest that this should apply only in the first instance and that once the YPLA is up and running in its own right with its own board, it should appoint the CEO rather than looking to the Secretary of State to appoint him. That explains that series of amendments.

In addition, we have sought to make amendments to the Bill that would give some sense to what the YPLA is going to do. The key amendment in this whole series of amendments that we have laid is Amendment 153ZA, which takes the wording from the briefings on the YPLA's functions with which we have been provided. Our amendment, which would go after Clause 60, makes it clear in proposed new subsection (2) that while the YPLA's main function is financial, in discharging that function it will,

"develop a national funding formula and national commissioning framework ... work with local education authorities and their regional partners",

providing them with "consistent national data", which they need to do their planning, and help with any pan-national "or cross-regional" procurement processes.

Amendment 155A makes it clear that in securing education and training provision under Clause 64, the YPLA will work with its local and regional partners rather than dictate to them.

Amendments 161A and 161B take issue with the wording of Clause 70. Why must the YPLA issue guidance to its local education authorities? If the tone of the briefings is to be replicated, it must consult its local education authorities and issue guidance only after consultation.

Altogether, if I might say so, these amendments seek to put into the Bill an image of the YPLA that more closely fits with its functions as they have been described to us in the briefings that we have received. If we are to have a YPLA, let us have an organisation that is enjoined, as we are told it will be, to work closely and in partnership with local authorities.

I have two further questions to put to the Minister. First, the YPLA is responsible for the EMA. Will the Minister update us on the 16-to-19 financial review, which will look at 16-to-19 financial support in the round, including the child benefit and child tax credit paid to parents of 16-to-19 year-olds in full-time education and unwaged training? What is the current position of this financial review? The Minister may wish to write to me rather than necessarily answer now, because I have not given her notice of this.

Secondly, with the raising of the participation age to 18 we will have a whole generation. By September 2010, today's class 8 will be class 9, and the pupils will need careers guidance that can really help them to choose from the plethora of opportunities that are open to them. What progress are the Government making in setting up the proper information, advice and guidance system that they will be leading and that will, as I say, need to be in place by September next year? We talked a little about this when we talked about the careers guidance under Clause 35, but that was earlier in the summer and it would be good to know a little about how far things have progressed.

Finally, the noble Lord, Lord Hunt, talked about the cynicism with which one can greet the whole issue of whether or not this will be cost-neutral. The LSC is a single quango that has had many failings. Nevertheless, it is being replaced by two quangos, one of which is the SFA. Actually, the SFA is not a quango because it is a next step agency, but within that agency four vital functions will be performed. The National Apprenticeship Service, Train to Gain, the Adult Advancement and Careers Service and the National Employer Service will all be run by the SFA. That is very considerable. Very complex machinery is being set up to replace it all, and it beggars belief to say that it will not cost a lot of money.

Baroness Perry of Southwark (Conservative)

My Lords, I, too, have a question for the Minister. I know that the Government are genuinely committed to flexibility in education—to people being able to take up education at any time in their lives and to flow in and out of education and training as well as work and so on. Does the Minister feel that the separation of these two different bodies will help or hinder that kind of flexibility?

I have never known a funding agency, or any body with powers of funding, that did not become very independent and pretty bossy over the course of its life. No doubt those two agencies will begin to develop quite different policies on how and on what basis they fund and on how much per unit they will offer. Some individuals, particularly the often forgotten part-time students who are in full-time employment and studying part time, could very well find themselves switching from one kind of funding to another while they are on the same course and pursuing the same qualification. That is quite apart from the difficulties, which my noble friend Lord Hunt and the noble Baroness, Lady Sharp, have highlighted, for institutions that have all these different streams of funding. It could be a very bumpy ride for individuals as they pass the age of 19 and find themselves in a completely different funding regime.

I would very much like to hear how the Minister feels this particular agency, which is independent from the SFA, will help that kind of individual flexibility for learners.

Baroness Morgan of Drefelin (Labour)

I very much hope that I will be able to offer the reassurance that noble Lords are looking for. I am very happy to talk about numbers and the disjuncture about which the noble Baroness, Lady Sharp, is worried. Sometimes when you look at a Bill, it is the powers and the strong stuff that leap out at you, and the cuddly stuff that she is looking for is sometimes more difficult to enshrine in legislation. However, that is not to say that it is not very important that the YPLA's relationship with local authorities is close and supportive. That is what we hope to achieve.

I thank the noble Lord, Lord Hunt, for his introduction and for giving me the opportunity to walk us through some of the key issues. He is right that this is an important debate, and how we frame it is important. I speak with some passion, having worked on the previous education Bill that came through this House and that focused so much on raising the participation age for young people. I remember the passion that we put into that. Many strands flow from that Bill into this, and we see the importance of getting these bodies functioning properly and well set up.

There are a number of reasons why it is appropriate for the YPLA and the Skills Funding Agency to be established as separate bodies. They will serve very different constituencies. The YPLA will support local authorities to ensure that the interests of all young people aged 16 to 19, of those aged up to 25 with learning difficulties, and of young people subject to youth detention on whom we have just focused, are met. The Skills Funding Agency will meet the demands of employers and adult learners and is exactly about the flexibility to which the noble Baroness, Lady Perry, pointed. These groups are different and they have different needs. Each requires a distinct focus for really strong delivery.

The Skills Funding Agency will oversee the demand-led funding system that we know employers are looking for. It will support employers and adult learners through a number of customer-focused services, including Train to Gain, the National Apprenticeship Service, the Adult Advancement and Careers Service and the learners' skills services. The YPLA, on the other hand, will have a supporting and enabling role, assisting local authorities and their partners to meet the needs and aspirations of our young people. It will fund local authorities on the basis of their commissioning plans. Detailed work needs to go into developing those commissioning plans because we need to ensure that they are right.

Such diverse models and client groups suggest to me and to many with whom we have consulted that two separate agencies are needed. As one would expect, the noble Lord, Lord Hunt, brought some very interesting quotes to our debate. The Association of Colleges has been on record as welcoming the proposals for the structure of the 14 to 19 education system. The Association of School and College Leaders also welcomes the proposals. The CBI said:

"Business welcomes the intention to create a more 'demand-led' approach to adult skills funding through the ... Skills Funding Agency".

As separately run organisations, the YPLA and the Skills Funding Agency will be governed to respond to their customers. The YPLA, as an NDPB, will have a strong sector-led representation on the board, as the noble Baroness, Lady Sharp, was concerned to see. The SFA, as an agency of BIS, will have that close relationship to government which is necessary to deliver a strong, demand-led post-19 system.

Having separate organisations also enables clear and unambiguous lines of accountability to each Secretary of State, as well as to Parliament, which this House is very concerned always to see. Both organisations are required by the Bill to produce annual reports, which will be subject to parliamentary scrutiny. They will share a common aim to drive up participation and achievement to new levels, to be flexible and able to respond to new developments, to provide the specialist services that their different customers need and, above all, to equip our current and future workforce with the skills to drive our economy forward, which is crucial. In line with good practice, we also plan to ensure that they share common backroom services such as HR, estates management and information systems support, thus maximising the efficiency and effectiveness of the two bodies. I am sure that both parties opposite will recognise the importance of that.

The range of functions required at national and regional level is such that these functions must be undertaken at arm's length from the department and that only a stand-alone YPLA would deliver the intensity of focus on young people and the local authorities that serve them which is required to make a success of the raised participation age, about which I have talked already.

The noble Lord, Lord Hunt, asked for clarification on intervention. Earlier, I said that the YPLA will have powers to intervene if a local authority is failing in its commissioning duty in respect of young offenders. It will have the same power to intervene in an authority if it is failing in its duty for all young people. It is right to have that backstop power in the interests of young people, but it is very much for extreme, exceptional cases. These powers stand out in the Bill, but they have to be in legislation of this nature because we are talking about the use of public money and ensuring that the best results are achieved.

As regards this being a complicated system, I do not accept that two bodies will make life more complicated for colleges and other providers. As noble Lords are aware, colleges and other providers manage multiple funding streams and blend their work across government with the vast sums that are spent by the private sector on training. Having two main funding streams, one for young people and one for adults, is not dissimilar to present arrangements. I would argue that this is a step very much in the right direction. As the noble Lord, Lord Hunt, requested, we said that we will write to noble Lords about transitional costs in detail before Report, and I reiterate that commitment.

The noble Lord was very concerned about references to increasing bureaucracy. I, too, would be very concerned at any suggestion that these plans are about increasing democracy. We plan very clearly to reduce bureaucracy, which is why we have been in discussion with the Association of Colleges, the ASCL, the LGA and others about how we can do so in practical terms. We are committed to doing that.

As regards Amendments 146B, 146C, 146D and 146E, and the concern that the YPLA's board is representative, I will consider further the proposals of the noble Baronesses, Lady Sharp and Lady Garden, further and will think about coming back on Report with proposals. The noble Baroness, Lady Sharp, asked another detailed question on EMA about which I shall have to write to her and I undertake to do that very quickly. I also appreciate the seriousness of the noble Baronesses' concerns set out in Amendments 155A, 153ZA et cetera. These amendments concern clarifying the YPLA's role in supporting local authorities in the fulfilment of their new duties and I should like to think further on that.

Amendments 145 and 169A seek to limit the number of staff employed by the Young People's Learning Agency to 500 and by the Skills Funding Agency to 1,800. Our current plans are that the two bodies will start off their lives with staffing at about the levels highlighted in the amendments. We are confident that staffing will not rise significantly beyond these levels. We do not see the need to set these ceilings in primary legislation for a number of reasons. First, as with every organisation in the public sector, both bodies will be expected to contribute towards year-on-year efficiency targets. Just because they are new bodies does not exempt them from that. Secondly, the principal brake on staff numbers will come through the annual remit and budget letter, which will set out the objectives and budgets of each organisation. Thirdly, proper structures are in place to ensure that both bodies can be scrutinised effectively and held to account for the use of the resources they are given. They will be required to report annually to Parliament. The chief executive and, in the case of the YPLA, the chair, will be or can be summoned by the Public Accounts Committee or their departmental select committees and their work will be subject to scrutiny by the National Audit Office.

Amendment 146A would require the Secretary of State to carry out a regulatory impact assessment to review the costs of abolishing the Learning and Skills Council, and the setting up of the Young People's Learning Agency and the office of the chief executive of skills funding. The impact assessment for this Bill, which, as the noble Lord, Lord Hunt, highlighted, has been updated prior to introduction to this House, confirms our commitment that the transfer to the new arrangements will be cost-neutral, which I reiterate now. In designing the new structures we are working to an indicative administrative budget, which is set at the same level as that within which the Learning and Skills Council currently operates.

As noble Lords would expect, there will be one-off costs associated with the transition to new arrangements; for example, to close down premises which are no longer needed and to pay for possible staff relocation and retraining costs. They are the normal transitional costs that one would expect. Initial estimates are that these costs will total around £38 million, but we expect the reduction of the estate to rapidly generate savings in subsequent years, with annual savings of up to £17 million. The potential for additional savings from operating shared services in relation to the IT systems will be particularly important. I want to be absolutely clear that this is being driven by the outcomes we are looking for in adult skills and in raising the participation age for young people in education in this country. I hear the concerns raised by noble Lords and I have offered to consider further the amendments put forward by the noble Baronesses, Lady Sharp and Lady Garden. On that basis, I hope that the noble Lord will withdraw his amendment.

Viscount Eccles (Conservative)

As a Back-Bench Member, I have been wondering, if the Motion that Clause 58 should stand part was moved and was voted down, what the Government would do then. It has been tabled in the name of the Opposition Bench and that of the Liberal Democrats. That prompts me to ask, after the speedy reply given by the noble Baroness, why it is right to have an executive agency on the one hand and a full-blooded non-departmental public body on the other, and then to say that they will share things. The constitutional position of an executive agency is different from that of a non-departmental public body and I do not think that they will find it easy to share anything. For a start, the executive agency basically has to do whatever the Secretary of State tells it to do; that is its position. A non-departmental public body, if one goes back to 1998, is said by the present Administration to be at arm's length. I think the noble Baroness used that phrase, although of course the arm can be twisted either to a small degree or to a large one. Nevertheless, the fiction—or perhaps it is the reality—is that non-departmental public bodies are independent.

As the noble Baroness, Lady Sharp, said, we really do not know anything about how the YPLA will use its independence. It is quite indicative, on reading the Bill, that the schedule covering the YPLA extends over six pages while that for the SFA goes over three. That is the difference in a nutshell between an executive agency and a non-departmental public body. The draftsmen have to take a great deal more care with a non-departmental public body than they do with an executive agency. In this case, the amendments tabled by my own Front Bench suggest that the SFA should be the primary body, because if it is going to employ 1,800 people while the YPLA employs only 500, it can be seen that there might be a good case for the SFA. So I am in a state of confusion because I do not understand, for all the passionate explanation given by the noble Baroness, what is really intended, and I feel quite strongly that this matter needs a great deal more careful consideration than it has had to date.

Baroness Sharp of Guildford (Liberal Democrat)

I had not expected the Minister to respond as positively to all the amendments in this group and we are very grateful to her. Obviously we shall await the government amendments before we decide where we stand on this issue. She has promised them for the Report stage and I hope that we shall have a chance to look at them before Report.

I do not have the impact assessment with me, but I have one question for the Minister. Some 1,000 members of the LSC are going to work with local authorities. Are local authorities going to be compensated for the cost of employing these people? It is clear that over the past 10 years local authorities have run down their education authorities so that they are now often rather slimline bodies because they are not really involved in the functions of strategic planning and running schools, let alone doing anything in the further education sector, which they came out of some 20 years ago. Local authorities need the resources to employ people with knowledge of these sectors in their departments. Do the figures that have been quoted include the cost to local authorities of having to employ the 1,000 new staff or is it excluded? I should be interested to know.

Lord Elton (Conservative)

Could the noble Baroness direct me to something which I ought to be able to put my finger on at once; that is, to the part of the Bill describing who will discharge the functions of the YPLA as regards schools, universities and so on in Wales?

Baroness Morgan of Drefelin (Labour)

I shall pick up the question from the noble Baroness, Lady Sharp. The current high-level figures show that the Learning and Skills Council has a budget of roughly £12 billion, of which around £5 billion would be apportioned to the SFA and £7 billion to local authorities through the YPLA. What we are looking at in terms of the running costs of the LSC is £205.7 million, which is the ceiling beyond which we do not expect the SFA or the YPLA to go in terms of administration. On the allocation of staff, as the noble Baroness said, we are looking at around 950 members of staff from the LSC, which currently has around 3,300 staff, to go to local authorities. We expect that overall the devolution of £7 billion to local authorities will not by any means put them in a difficult financial position when they receive those staff. I am quite sure about that, but if I can go into more detail for the Committee, I will do so.

The noble Lord, Lord Elton, asked about Wales. The YPLA is an England-only body, as is the Learning and Skills Council. As I think I have said before, a lot of the Wales powers are mirror powers. However, because the YPLA is an England-only body, I am not able to point to a place in the Bill that sets out the functions he is looking for.

Lord Elton (Conservative)

Does that mean that this reorganisation applies to England only and does not touch Wales?

Baroness Morgan of Drefelin (Labour)

As I said, the YPLA and the SFA will be England bodies. I am sorry: the YPLA will be an England body.

Lord Elton (Conservative)

Is it the case for the Skills Funding Agency as well?

Baroness Morgan of Drefelin (Labour)

Yes, my Lords. I see that there are lots of nods.

Lord Elton (Conservative)

I hope that I have it correct in saying that everything we are discussing applies only to England, so that everything in Wales remains exactly as it is now. Do I see a nod of profound relief or otherwise?

Baroness Morgan of Drefelin (Labour)

I am sorry, but I cannot hear the noble Lord.

Lord Hunt of Wirral (Conservative)

First, I should like to say how much I enjoyed the speech of the noble Baroness, Lady Sharp of Guildford. As always, she has given me a lot to think about. I realise that she was delving into the history books for debates that have gone before, but I should like to reflect on the points she raised because I did sense—this may come as a shock to her—that we were heading in the same direction. However, I need to think a little more carefully about exactly where we are going to end up. The noble Baroness, Lady Perry of Southwark, made an important point which I am not sure the Minister answered. The noble Viscount, Lord Eccles, asked some quite penetrating questions, as did my noble friend Lord Elton.

The sum of all this is that I hope the Minister will take time to reflect on the debate because she gave a number of assurances. The noble Baroness, Lady Sharp of Guildford, obviously feels that the Government have given a commitment to consider bringing forward amendments. I did not hear the Minister say the word "amendments", but, if that is the case, I would greatly welcome it because we need clarification. The Minister got so bound up in the whole, if I may say so, quixotic verbosity and chivalrousness of the speech she had been given that she said it was in no way her intention to increase "democracy"; I think she meant "bureaucracy".

Baroness Morgan of Drefelin (Labour)

I thank the noble Lord wholeheartedly for giving me the opportunity to clarify that for the record. He is very generous in allowing me to correct it.

Lord Hunt of Wirral (Conservative)

Everything else the Minister said would gladden the heart of Sir Humphrey because she defended the indefensible brilliantly. There is no doubt that when you create more bodies you create more bureaucracy; that is a sad fact of life.

We would like to reflect on this important debate, which has been an excellent opportunity to air concerns. I hope the Minister will take time to consider all the points she has not had an opportunity of responding to because there were a whole series of questions which she has not had time to deal with today. Undoubtedly we will return to the subject on Report. In the meantime, I beg leave to withdraw.

Amendment 144 withdrawn.

Amendment 145 not moved.

Clause 58 agreed.

Amendment 146 withdrawn.

Amendment 146A not moved.

Schedule 3 : The Young People's Learning Agency for England

Amendments 146B to 146E not moved.

Schedule 3 agreed.

Clause 59 : Provision of financial resources

Amendments 147 to 149 not moved.

House resumed. Committee to begin again not before 9.03 pm.

Committee (6th Day)(Continued)

Baroness Perry of Southwark (Conservative)

I do not think that we are in love with the YPLA, at least not on this side of the Committee. Nevertheless we are now moving to the clauses on its structure and how it should go about its business. The amendment attempts to lay down one element in its committee structure. I wondered for a while whether this amendment might not have been more appropriate in the third schedule to the Bill, but I decided that I would move it here as it covers such a fundamental issue—how the YPLA will go about dispersal of funds—that it needs to be separated from the general section on committees in Schedule 3 and should be in the main body of the Bill.

I think that not only because we have seen with the Learning and Skills Agency a fairly disastrous handling of capital building projects, but because over long experience of funding bodies of various kinds—we have had an awful lot in recent years—it is easy for them to become obsessed with the revenue aspects, which is understandable in a way. They have to decide who gets how much this year and whether somebody gets a bit more, or a bit less; whether they approve this scheme or that scheme; and all the things that we talked about in earlier clauses. It is easy for the capital projects to be tucked away with nobody responsible or, worse, a cabal of two or three of the most senior officers taking the decisions by themselves.

I know that the Association of Colleges feels strongly about this amendment. It has suffered badly from what happened with the LSC and is keen to have a structure in place with the YPLA that ensures that capital projects are properly considered, that there is a committee in place with sole responsibility to ensure that the building projects for both further education and sixth-form colleges are considered carefully and in some detail, and that the budget for them is monitored with somebody making sure that the money is there. I understand that that did not quite happen with the LSC.

It is very important that it is in the main part of the Bill that that is one of the two main streams of finance for which the YPLA will be responsible—the revenue and the capital—and therefore, rather than tucking it in as part of the committee structure, I want it up here in the main body of the Bill. I propose that at the end of the clause that describes the YPLA's financial responsibilities we should add provision for a committee to oversee provision for capital building projects. I beg to move.

Baroness Sharp of Guildford (Liberal Democrat)

My Lords, I support the amendment. As the Minister will know, colleges have been much embarrassed by the developments in the college capital building programme this year. I believe that I am right in saying that because the colleges span both 16-to-19 and adult provision, the capital programme for colleges will be split between the YPLA and the SFA. Therefore, it is important not only that the YPLA ensures that it has an appropriate committee structure but that there is a committee structure to bring the two together to run a coherent programme. In many senses, that poses a bigger challenge than the YPLA itself. One may despair about what happened with the LSC, but when two separate authorities are trying to run a single capital budget, many difficulties may arise.

As I understand it, once the basic funding for Building Colleges for the Future was allocated some four or five years ago, the initial bids were very low. That led the LSC to more or less send out messages to its local arms to see whether they could drum up some bids. That is not surprising, given that if you were going to put in a bid, you had to have at least outline planning permission from your local authority. That takes a lot of time. Perhaps I should declare an interest, because I sit on the board of Guildford College, which has been caught up in the funding problem. Fortunately, we have not had a building demolished; we are not halfway through a building programme. However, we have lost a substantial sum of money in consultants' fees, which we will not get back. I believe that the total of consultants' fees across all colleges is in the region of £200 million. That money should have gone to provide for students at colleges and it has been diverted into the pockets of the PricewaterhouseCoopers, the Tribals and all the rest of the many consultants that gather around once a capital programme is announced. There needs to be a very careful watch on capital programmes. What happened with the LSC, in a sense, was that having been a trickle, it became a waterfall, and it could not cope. It was quite extraordinary that the total amount that was bid for a year ago was four times the capital sum available and nobody in the LSC or the department seemed to be saying, "Hey! Watch it!".

Having a proper committee structure in place is important, but I stress that since the capital programme is going to be shared between the two organisations, and sixth- form colleges are going to be separate and have their own programme, there needs to be a committee structure to link the appropriate parts of the system.

Baroness Howe of Idlicote (Crossbench)

My Lords, I am rather attracted by this idea, not least because there is nothing in the Bill that refers to capital projects. As the school population expands and takes in those up to the age of 25 in certain respects, there will clearly be a need for adaptations, if not totally new buildings. Will the YPLA have a young person or a children's voice helping it to decide what to do and what to spend money on? I am not certain what the group in particular areas will comprise in terms of locality, the localness of people, the expertise and the people who will benefit, or not benefit, from what is proposed. I am rather attracted by this suggestion. I can see that there are advantages in having something like the YPLA but, having listened intently to what was said in the previous debate, I find it very difficult to think that there will be any saving of money in what is proposed and that there will be any advantages in it.

Lord Hunt of Wirral (Conservative)

My Lords, I rise strongly to support my noble friend Lady Perry of Southwark and to say that I found myself very much in agreement with the noble Baronesses, Lady Sharp of Guildford and Lady Howe of Idlicote. I think that they have put their finger on something that does not quite work and that my noble friend has proposed a modest amendment that seems to make a great deal of sense. I hope that the Minister will feel able to accept it.

The amendment extends the remit of the YPLA so that it has,

"to oversee financial provisions for capital building projects for further education and sixth form colleges".

My noble friend has enabled us to raise the concern that we have seen time and time again throughout these debates about where are the lines of responsibility. As I understand it, as the Bill stands, funding for schools, sixth forms, sixth-form colleges and sixth-form provision in further education colleges comes directly from local authorities. However, capital funding for the 236 further education colleges will be undertaken not by the YPLA, the body responsible for ensuring the national coherence of plans implemented by local authorities, but by the Skills Funding Agency. The noble Baroness, Lady Sharp of Guildford, gave us a concrete example of how the complexities inherent in the sort of structure that is complained of are caused by the fact that different bodies with responsibility for education are provided in just one establishment. FE colleges will span the divide between the agencies.

The amendment moved by my noble friend Lady Perry would simplify this structure just by ensuring instead that capital funding is overseen by the YPLA. I read the worries of the Association of Colleges about the very division of funding and responsibility, and I hope the Minister will respond to its idea of a college capital committee that spans both types of colleges, the SFA and the YPLA. All this demonstrates the confusion created by having two agencies divided by age, where the line between the two remains blurred at some points. My noble friend's amendment would help to solve this problem by putting all responsibility under the YPLA. We all look forward to the Minister's response, and I very much hope that he will accept this amendment.

Lord Young of Norwood Green (Labour)

My Lords, Amendment 149A would require the Young People's Learning Agency to put into place a committee structure to oversee capital allocations for further education and sixth-form colleges. I understand the concern, which follows on from the well documented problems of the Learning and Skills Council earlier this year. The LSC had a committee that was a single body, but it still did not seem to be the solution to the problem because the problem was more deep-seated than that.

In his well considered and independent review of the further education capital programme, Sir Andrew Foster found that,

"a good policy has been compromised by the manner of its implementation".

As the noble Baroness, Lady Sharp, reminded us, the intentions were good—although, as we know, the road to hell is paved with those—but the implementation was, to say the least, less than satisfactory.

Sir Andrew Foster went on to make a number of recommendations, including for the stronger management of the FE capital programme, better prioritisation, and the need to shift from a demand-led to a need-based approach to funding. He urged that consideration be given to future working arrangements. The recommendations of that report have been fully accepted by the Department for Business, Innovation and Skills and by the LSC.

As a number of people have pointed out—the noble Baroness, Lady Sharp, really got to the heart of this—the YPLA will have responsibility only for the 16 to 19 capital fund, which underwrites the costs of brand new places for students aged 16 to 19 in schools and colleges. The larger FE capital fund will transfer to the Skills Funding Agency. None the less, it will be important for the YPLA to devise a structure that delivers the effective management of its capital responsibilities. It will need to have arrangements for working with the Skills Funding Agency where it has an interest in how the FE capital fund supports colleges' 16 to 19 provision. We all agree about that.

The Secretary of State will set out his expectations through his remit letter to the YPLA. We will ensure that, through that letter, the YPLA takes account of the lessons learnt from the FE capital funding programme in devising effective systems for managing the capital resources that it allocates. On that point, and to give a little more detail, simply imposing a committee structure is not enough, as we know from the lessons learnt from the LSC, unfortunately. We need to ensure that the YPLA, once it begins operating, has learnt from the problems with FE capital and has devised appropriate arrangements that minimise the risk to their capital resources. The remit letter will place the duty on the new chair and chief executive to do that. In conclusion, we believe that the remit letter is the best place for any details. It would not be right to describe essentially operational matters in the Bill, which anyway only deal with part of the problem.

On the basis of this assurance, I hope we will ensure that the lessons of what happened at the LSC are learnt and reflected in the remit letter. I want to give an assurance to the noble Baronesses, Lady Perry and Lady Sharp, and all those who have contributed in this debate that we are not in any way treating this matter lightly. We will ensure that the details of the remit letter are circulated in advance because we share the same concerns as noble Lords. The way in which the capital programme is allocated is fundamentally important. We have seen the repercussions that have taken place when it goes wrong. I am not in any way dismissing the concern. We do not believe that this amendment is the right vehicle for dealing with it, although we share the concern of the noble Baroness, Lady Perry, and others about the need to address this problem. With my reassurance about the remit letter and the opportunity to look at it, I ask the noble Baroness to withdraw the amendment.

Baroness Sharp of Guildford (Liberal Democrat)

As I understand it, there will be one capital programme for further education, which will be divided between the SFA and the YPLA. Since the SFA is not an NDPB, it will not receive a remit letter. How will this be dealt with as regards the SFA? If the programme is to be shared with sixth-form colleges, there will be yet a third player. Will whatever letter goes to each of the bodies ensure an effective co-ordination mechanism, to make sure that they are all singing from the same hymn sheet? When there are three authorities, the great danger is that something will fall between the stools and not be addressed.

Lord Young of Norwood Green (Labour)

The short answer is yes. I said that the YPLA will need to have arrangements for working with the Skills Funding Agency. We will ensure that we cover both points made by the noble Baroness.

Viscount Eccles (Conservative)

I hesitate, but I think that there is a more fundamental problem. All organisations need some focus. The YPLA focus is not on capital spending. As far as I can see, the Bill is completely silent on capital funding. My noble friend's amendment seeks to find out, as well as to suggest a way forward, how the YPLA will tackle project management. Capital funding and capital spending is project management, which requires a completely different skill to that required to make provision for the education of young people. How will the Government guarantee that, in the selection of the members of the board of the YPLA, they will include this project management skill?

I have been in project management for a great part of my career. As the chairman of a non-departmental public body, the Royal Botanic Gardens, Kew, I took responsibility for the rebuilding of the Palm House. All I can say to Ministers is that if I had relied on its board and staff, and had not taken special steps to ensure that the Palm House was rebuilt to the required standard, it would never have happened.

The Government are simply saying that all they will provide is a remit letter. For goodness' sake, we all get letters telling us what we should do. But have we got the capability to do it? This Government should think much more carefully about the skills that will be required—and, goodness me, the Bill is all about skills—to devise and control capital expenditure projects. Nothing here gives me comfort that the YPLA will be any good at the job.

Lord Lucas (Conservative)

The YPLA has a rather difficult remit anyway. It is supposed to drive up participation without being in any way directly involved in the provision of education, and it is supposed to be involved in equipping the workforce with the right skills without having any direct connection with employers. It is altogether an odd and strange animal. I note too that the term "demand-led" in this amendment is pejorative, but in the previous amendment it was approbative. It was hymned by the noble Baroness in her reply to the amendment of my noble friend Lord Hunt. Perhaps the Government are also confused about what is going on here.

Lord Young of Norwood Green (Labour)

In answer to the noble Viscount, Lord Eccles, I think he is right that we have to ensure that project management skills are applied. I shall take that into consideration because it is a valid point. In response to the noble Lord, Lord Lucas, context is everything. As for "demand-led", we were dealing with a totally different scenario, which is why my noble friend extolled its virtues in that situation. There was probably nothing wrong with "demand-led" in this situation if it had been controlled and properly project-managed.

I do not want to repeat myself. We understand the importance of the issues and we understand where the noble Baroness is coming from. We have undertaken to write with an outline of the remit letter and will take into account the importance of the two agencies working together. I hope, with those repeated assurances, that the noble Baroness will feel able to withdraw her amendment.

Baroness Perry of Southwark (Conservative)

I thank all who have contributed to what has proved to be an important issue in the structure of the YPLA. I am not entirely sure that anyone feels that they have had a complete answer to the concerns they have expressed. There is a yawning hole in the assumption that a remit letter to the chief executive and the council of the YPLA will somehow magically translate itself into the right kind of oversight of what presumably will be quite a large budget. Although the remit letter is a part of it, it must be taken delivery of by someone or some part of the organisation that will actually have to see it through, and my amendment was an attempt to secure that. Just a letter sent to the YPLA could produce exactly the same kind of situation we had with the LSC where there was a committee without expertise or any particular project management skills and which, as we all know, made a fair old mess of the job it was given to do. To say that one committee did not help does not mean that therefore you should never have a committee again, but perhaps that is a rather trivial objection.

Much more important is something that perhaps I did not make clear enough in my opening remarks to move the amendment. I refer to the point made so pointedly and accurately by the noble Baroness, Lady Sharp. The Skills Funding Agency and the Young People's Learning Agency will both have money for capital projects that will have to be spent in one place, so to speak: on the organisations and buildings that are to provide education. It is vital that there is one point between the two bodies which takes responsibility for that. It is sensible that it is the YPLA not only because it will get the remit letter—again as the noble Baroness, Lady Sharp, has said—but because the agency will be in close touch with the huge body of the further education and sixth-form colleges which the Skills Funding Agency quite clearly will not be.

I am not claiming that the wording of the amendment is perfect but something like it should be in the Bill, not tucked away in a schedule or in advice and guidance that comes out after the Bill is passed, if it comes to pass. There should be something there which says that, for the two responsibilities that the bodies have—for revenue funding, yes, but also for capital funding—there needs to be a point where responsibility is shared.

It would be nice if Ministers, just once, would say of something that has a great deal of agreement in the Committee, "Okay, we will take it away and think about it". It would help a great deal. It would make those of us who have worked away—and we are grateful for the meetings that we have had over the summer with the Minister—feel good if the Minister could do that.

Lord Young of Norwood Green (Labour)

We have not dismissed the importance of what the noble Baroness is saying; indeed, I stressed that I took it very much to heart. However, we do not believe that this is quite the right vehicle. What is contained in this and any arrangements that we need to make will be important in any consideration. I was simply making a plea in the circumstances and saying that we have listened to the debate, we have heard the concerns expressed across the Committee and we will take them away and give them serious consideration, even to the point of seeing whether the remit letter is sufficient to address all the concerns. It is in the light of that that I was asking the noble Baroness to consider withdrawing her amendment.

Baroness Perry of Southwark (Conservative)

That was a very gracious speech by the Minister and I thank him for it. Certainly at this point I am not going to pursue the matter but, unless we see something more substantial along these lines on Report, I am not promising that I will continue to remain silent. In the mean time, I beg leave to withdraw the amendment.

Amendment 149A withdrawn.

Amendments 150 to 152 not moved.

Amendment 153

Moved by Baroness Sharp of Guildford

153: Clause 59, page 44, line 21, at end insert—

"( ) The YPLA shall ensure that by 2010—11 the funding base rates per standard learner number for school sixth forms and further education colleges are equivalent."

Baroness Sharp of Guildford (Liberal Democrat)

My Lords, Amendment 153 was debated in the Commons but we feel it is worth bringing forward here because we were not satisfied with the answer that came from the Commons.

The numbers studying for A-levels and other level 2 and 3 qualifications in FE colleges and sixth-form colleges are considerably greater than in school sixth forms and yet for the past 20 to 30 years—indeed, ever since the college sector emerged as an alternative provider of education and training for 16 to 19 year-olds—the per capita funding per pupil in the colleges has been considerably lower than that received by schools for sixth-form pupils. Traditionally schools with sixth-forms have received quite generous funding for their 16 to 19 sixth-form cohort. Whether running A-level courses or vocational courses it has been accepted that class sizes are often very small, sometimes as few as, or even fewer than, half a dozen and that the degree, therefore, of personal tuition is high.

This in turn reflects on costs. In the old days of block grants, schools used to cross-subsidise their sixth forms. Once this was translated into funding formulas, it was reflected in a generous funding of the "standard learner numbers" for those over 16 and remaining in school. By contrast, colleges, which have traditionally concentrated on post-16 courses, have been funded on the basis of standard class sizes, with additional funding only for those with learning difficulties. When the LSC took over in 2001, the gap was more than 20 per cent; by 2005, when Ruth Kelly was the Secretary of State, it stood at 10 per cent, and she famously promised to eliminate it. Sadly it is still there.

The purpose of the amendment is to bring the existence of this gap to the attention of Ministers and to make a last ditch attempt to eliminate it. Given that more students study post-16 in further education colleges and sixth-form colleges than in schools, it is cheaper and more efficient to provide teaching in these establishments. Can Ministers really justify a situation in which they encourage and subsidise the less efficient route? Indeed, in recent years they have been encouraging schools that have not so far had sixth forms to set up new sixth forms. We know that many pupils would be better off studying more practical vocational courses rather than being corralled into A-levels, yet shockingly few teachers have any knowledge of those vocational routes to higher-level qualifications. In the evidence that the Edge foundation provided to the Skills Commission, for example, it was revealed that 75 per cent of teachers admitted to knowing nothing about apprenticeships, and yet teachers are one of the biggest influences on young people in the careers that they choose. The emphasis on GCSE and the A-level route means that a disproportionate number of young people at age 16 opt for this route because it is what they, their parents and their teachers know about.

It is shocking that these colleges, which already take a disproportionate number of young people from the more disadvantaged homes for 16-plus education, should receive less per student than the schools. It reflects, in many senses, an outdated class system that should have been eliminated long ago. As I have said, Ruth Kelly promised in 2005 to eliminate the gap. The college sector is still waiting for Ministers to honour that promise, and I hope that they will do so today. I beg to move.

Lord Young of Norwood Green (Labour)

My Lords, Amendment 153 would commit the YPLA to equalising the basic funding rate for a given programme of learning in schools and FE colleges. This important principle, that publicly funded providers of learning should receive comparable funding for comparable provision, has been at the heart of government policy and the work of the Learning and Skills Council in planning and funding post-16 learning for a number of years. We recognise that there have been historic differences in the way that schools and colleges have been funded, which has given rise to a gap in funding. In 2004-05 this gap stood at 14 per cent. We have responded to that by committing ourselves to a reduction of the gap by eight percentage points by the end of the 2008-09 academic year. I am pleased to say that, through the work of the Learning and Skills Council, at the end of the last academic year we had achieved that 8 per cent point reduction in the gap. This achievement has been verified by independent research published in 2008. We are not there yet, but I hope that the Committee—or at least the noble Baroness, Lady Sharp—will agree that this represents significant progress, although that is not to deny the validity of the point that she was making.

As I have expressed before, I also share some of her concerns about the nature of what we hope in the future will be more independent and balanced advice and guidance. The noble Baroness was right that there tends to be a move towards pushing everyone towards A-levels when for some the vocational route would be more appropriate and valid, and in the end could still lead them to undertake degree-course studies. So we intend to improve the nature of that advice and guidance, and indeed we are committed to doing just that.

My noble friend Lady Morgan confirmed at Second Reading that the Young People's Learning Agency would continue to operate a national funding formula as the basis for funding schools and colleges beyond April 2010, and that important commitment will ensure that the achievement to date in narrowing the gap is sustained. While we will continue to make progress as funding allows, I hope that the noble Baroness will agree that our foremost priority in our use of public funds must be fully to fund a learning opportunity for every 16 to 18 year-old as we move towards raising the participation age to 17 from 2013, and to 18 from 2015.

I hope that with that caveat, but with the assurance that a national funding formula will remain central to our plans and that we understand the importance of sustaining our commitment to remove that gap, the noble Baronesses will feel able to withdraw their amendment.

Baroness Perry of Southwark (Conservative)

I could not quite understand whether the Minister was saying that for the next year the 8 per cent differential will be sustained or that it will disappear.

Lord Young of Norwood Green (Labour)

It will be sustained and, unless my numeracy skills are wrong—I hope that they are not—we have said that we have achieved an 8 per cent reduction. I hope that I have got this right. So it is 6 per cent, actually. Sometimes I worry about my own numeracy skills, but I thought I could manage 8 from 14. So the straight answer is yes, it has been narrowed to a 6 per cent gap, and we are committed to sustaining that. Definitely.

Baroness Perry of Southwark (Conservative)

You are committed to leaving it at 6 per cent, not reducing it by a further percentage?

Lord Young of Norwood Green (Labour)

In my answer, I pointed out that we also have to manage the question of raising the participation age from 17 from 2013 and 18 from 2015. There is a balancing act to achieve there. We are absolutely committed to sustaining the 6 per cent that we have at the moment. If we can make further progress then, of course, we will—but we cannot ignore the scenario. It is a very important step forward in raising the participation age.

Baroness Howe of Idlicote (Crossbench)

Perhaps the Minister could make it clear to me, because I am a little confused about this. I thought that there were plans to ensure that deprived areas had rather more resources available to them. How does that fit into the scheme?

Lord Young of Norwood Green (Labour)

I must apologise. I was slightly distracted, so I missed the point that the noble Baroness was making.

Baroness Howe of Idlicote (Crossbench)

I was asking whether the Minister could clarify the position for me. I had thought that although getting parity was a good idea, in reducing the percentage, nevertheless there were special funds for those from deprived areas. How does that fit into this?

Lord Young of Norwood Green (Labour)

The best thing that I can do is write on that specific point about deprived areas, because I do not have the information to hand.

Baroness Perry of Southwark (Conservative)

I congratulate the Government on having reduced the differential during the past year. It is very good news to hear that it has been so substantially reduced. We all recognise that increasing public expenditure at the moment is not the easiest thing in the world to do. Nevertheless, it is worth recording, as the noble Baroness, Lady Sharp, so clearly said, that it is more expensive to expand vocational than academic provision. The kind of equipment that will be needed for the additional young people staying on and taking vocational courses is much more elaborate than much of what will be needed in sixth forms. That is something that will have to be borne in mind.

Baroness Sharp of Guildford (Liberal Democrat)

I thank the Minister for his response, but it is not a very adequate one. I congratulate him on reducing the figure from 14 per cent in 2004-05 to 6 per cent now—that is an 8 per cent reduction. Yes, that is good. However, I had hoped he would say that the Government would sustain that continuing reduction and that they would have in sight, for perhaps 2011-12, a total elimination. It is madness that they are proposing to allow schools that currently do not have sixth forms to promote them to teach vocational subjects when they have neither staff nor the equipment to teach them properly. It is incredibly expensive to do so. Yes, it is all part of raising the participation age, but this is a very expensive programme. In the colleges, there is a very efficient way in which to teach these things. The Increased Flexibility programme, which used to be so successful, has largely been closed down. I hope that the Government are now beginning to expand the young apprenticeship programme. That is what I would like to see.

Colleges take some of the more difficult learners, and are compensated when they have statements and so forth, but they are not completely compensated, and are currently providing an incredible service to the country in terms of helping many of those people to achieve qualifications that they would not be expected to achieve in schools. Yet we are not rewarding those colleges or even promising them that they will get an amount equivalent to what their sixth form comparators are getting.

If college lecturers move to a school and teach the sixth form, they are paid more than as a lecturer. That is very galling because they are teaching the same subject. One of the reasons that colleges cannot pay them more is because this differential exists. I hope that the Government can come back and promise us that they will sustain the reduction rather than just sustain the margin.

Lord Young of Norwood Green (Labour)

I want to examine some of the points made by the noble Baroness because I cannot give a comprehensive answer to all of them. I sense some validity and concur with the noble Baroness. In my journey around FE colleges I, too, have been immensely impressed with the work that they do and with the range of students that they handle. I will take away and examine the points that have been made. We are absolutely committed to sustaining the reduction. I need to look at the capabilities and see whether we can go further. I hope that the noble Baroness will recognise the scenario in which we are operating at the moment. There are differences between the way that we fund sixth-form colleges and colleges supplying the same course. I would like to take that away and I will write to the noble Baroness on that issue. On that basis, I hope that she will feel capable of withdrawing the amendment.

Baroness Sharp of Guildford (Liberal Democrat)

I am extremely grateful to the Minister. It would be good if he could take this away. The whole college sector would be much encouraged by that. I know in these days of the credit crunch and so forth it will not be easy, but it would be encouraging for them. After all, they will be taking a huge increase in the number of students with the raising of the learning participation age. They are a key player in this and it would be a great factor if the Government really want to boost morale in that sector. I beg leave to withdraw the amendment.

Amendment 153 withdrawn.

Clause 59 agreed.

Clause 60 agreed

Amendment 153ZA not moved.

Clause 61 : Performance Assessments.

Amendment 153A

Moved by Lord Addington

153A: Clause 61, page 45, line 19, at end insert—

"( ) When the YLPA devises the funding formulae on performance it shall ensure that no education provider will be financially disadvantaged for enrolling disabled students onto their mainstream courses."

Lord Addington (Liberal Democrat)

In moving this amendment I shall also speak to Amendment 211A. The aim of these amendments is to expose what may be an unintentional result of some of the changes that the Government are proposing. The amendments were suggested by the Alliance for Inclusive Education, also known as Alfie. The alliance suggests that the Government's new funding structure may punish those who bring people with learning disabilities and other disabled groups onto courses that they may not be able to complete, although they have traditionally taken part and benefited from that learning process. Those people can acquire skills on a mainstream course and get some benefit from it, but will probably not be able to finish the entire course. That is the fear, and these amendments encapsulate that.

It has been suggested to me that the Learning and Skills Council withdraws up to 10 per cent for students who do not successfully gain a qualification. If you have a group that are almost guaranteed not to pass, are we not suggesting that people will be encouraged not to take part in these courses and that those college providers will be encouraged not to present them for the course?

Also, what tends to happen is that funding can be acquired, as I was told by this group, for more discrete courses, which often do not lead to as meaningful a qualification or learning capacity, but where you are guaranteed 100 per cent. This fear is very real, and it seems to be based on fact. Can the Government assure us that they will make more flexible arrangements that will mean that this does not take place? I think this is simply a case of trying to get a "one-size-fits-all" package. It does not apply to the best practice of the past, so can we go back and make sure that we allow people who have been undertaking and benefiting from courses back in? A small allowance or discretionary ability somewhere would probably address this.

I hope that the Minister will be able to give a positive response on this point. Really, they do not seem to be asking for very much. Also, if it has happened in the past, why get rid of good practice? I beg to move.

Lord Hunt of Wirral (Conservative)

I thank the noble Lord, Lord Addington, for raising these very important concerns. I am sure I speak for both sides of the Committee when I say that we would not wish there to be any situation where an education provider would be discouraged from accommodating students, in the way that the noble Lord described, because they might risk a reduction in funding. We are looking to the Minister for some reassurance on this matter. Like the noble Lord, Lord Addington, I have seen the arguments from ALLFIE, the Alliance for Inclusive Education, which argues that,

"education providers who would like to give greater opportunities for disabled learners wishing to access mainstream educational opportunities are financially penalised if the learners are unable successfully to complete the qualification".

What we are looking for this evening is an assurance from the Minister that this will not happen under the new organisation. I am sure that the Minister will assure us that the Government have no intention of allowing disabled students to be discriminated against in this way. I will just say that even a perception of disadvantage accompanying accepting disabled students could be very damaging. That would be very worrying indeed. We look forward to hearing from the Minister, just to reassure education providers that this will not be the case.

Lord Young of Norwood Green (Labour)

Amendments 153A and 211A reflect the concerns of such organisations as the Alliance for Inclusive Education that there are no barriers to participation in further education for young people and adults with learning difficulties. There is a particular concern that funding on the basis of completions discourages colleges from enrolling students with learning difficulties. Please let me reassure noble Lords that both departments fully recognise and support the need to ensure access for all learners and that, where appropriate, this should be to mainstream provision.

Mainstream provision is already widely accessed by such learners. In the last financial year there were approximately 320,000 learners who self-declared having a learning difficulty or disability in mainstream further education provision. This represents 13 per cent of all learners. This success has been achieved through excellent work across the FE sector in supporting students and additional funding being made available by the Government. For example, the Invest to Change programme is investing £66 million over a three-year period specifically to improve the accessibility of local provision. It is also important to note that success factors such as completion rates are just one of a wide-ranging set of weightings that are used to calculate funding rates. Colleges receive extra funding through additional learner support, which they can use to ensure that the needs of learners with learning difficulties and/or other special requirements are met.

The Skills Funding Agency will monitor colleges' and other providers' performance in ensuring access through the Framework for Excellence. This quantitative performance monitoring tool will incentivise providers to be responsive to the needs of learners and will include indicators on learner views and learner destinations, encompassing, of course, learners with learning difficulties.

The framework will provide data to enable those making funding decisions to assure themselves that there is no unfair treatment in terms of inclusion, access, or delivery of services. Ofsted will also continue to look at the accessibility of provision and support provided to learners with learning difficulties as part of its quality assurance process. We are continuing to work with ALLFIE and other stakeholders on this issue as we move forward in this area. I share the concern expressed by the noble Baroness, Lady Sharp, about this vital issue.

Lord Young of Norwood Green (Labour)

I did not mean to refer to the noble Baroness, Lady Sharp. I apologise to the noble Lord, Lord Addington.

Lord Addington (Liberal Democrat)

It is late.

Lord Young of Norwood Green (Labour)

It has been a long day. I hope that with the comprehensive range of assurances that we have given, noble Lords will recognise our commitment to ensuring that people with disabilities or learning difficulties are not disadvantaged and that colleges do not in any way feel a disincentive as regards catering for those students. As we heard from the noble Baroness, Lady Sharp, many colleges are responding well to that challenge. However, there is no room for complacency, which is why we have included the extra measures that I have described. I hope that on the basis of those assurances, the noble Lord will feel able to withdraw the amendment.

Lord Addington (Liberal Democrat)

I thank the noble Lord for that response and the noble Lord, Lord Hunt, for his support. This is something of a first. I do not think that I and my noble friend have ever been mistaken for each other before. However, it is nice to hear something new.

I appreciate the noble Lord's response. There is fear in this regard. I hope that he does not take this in the wrong spirit but we need to look through the relevant list to see whether we have killed it dead. That is very important. We need to ensure that we have dealt with this properly. The perception within colleges is also very important. We may have to follow up this point to ensure that it has been addressed. However, I accept the assurances in the spirit in which they were given; namely, that the fears behind this amendment are probably more imagined than real. I hope that we have a basis for further progress. I beg leave to withdraw the amendment.

Amendment 153A withdrawn.

House resumed.