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Further Education and Training Bill [HL]

Volume 689: debated on Tuesday 27 February 2007

Report received.

1: After Clause 1, insert the following new Clause—

“Area partnership learning and skills councils

After section 18 of LSA 2000 insert—

“18A Area partnership learning and skills councils

(1) The Council must establish, in consultation with its relevant partners, committees (to be called area partnership learning and skills councils) in local or sub-regional areas, to perform the Council’s duties in relation to those areas.

(2) For the purposes of this section “relevant partners” has the same definition as “responsible local authorities” and “partner authorities” in sections 78 and 79 of the Local Government and Public Involvement in Health Act 2007.

The noble Baroness said: My Lords, once again, the Government have done things back to front. When we discussed the Bill in Grand Committee, we on these Benches expressed our concern that it had been published a week before the Leitch review on skills. We also expressed concerns that Clause 19 had been put into the Bill without any consultation with the universities or even with most of the FE colleges. The fact that the Government have laid so many amendments at this stage could be an indication that they are rushing the Bill into law. Or it could be an indication that they are listening—perhaps I should give the Minister the benefit of the doubt.

We have tabled Amendment No. 1 because we know that the Lyons review of local government is about to be published, certainly before the Budget on 21 March. We are sure from statements that have been made that it will emphasise that strategic regional bodies will need to work closely with local authorities and their partners. It seems strange to us that the local government Bill, too, has been published before the Lyons report. However, in line with what has been said by Lyons, the LGA, the CBI and others, we seek to insert into this Bill a firm duty for the Learning and Skills Council to consult and work with local area partnerships.

The LGA and the CBI recently met to discuss the Lyons report. In their response, Making ‘Place Shaping’ a Reality, they made their commitment to working together crystal clear. They said:

“The CBI and LGA agreed that local government should have a more significant role in enabling local economic development and have agreed to a series of joint actions including improving the delivery of public services that underpin economic development and improving public and private sector engagement”.

When we discussed the amendment in Committee, the Minister concentrated his reply on the local partnership teams of the LSC, which do not appear in the Bill. He emphasised that these teams, whose areas of operation would be coterminous with local authorities, would work flexibly with the local authorities and other partners to deliver services on the ground and ensure that decision-making and provision planning take account of local needs and conditions.

While we agree wholeheartedly with the need for these teams, we believe that there is a need also for the LSC to be involved with strategic decision-making at sub-regional level. As my noble friend Lady Sharp of Guildford pointed out in Committee, there is evidence to show that travel-to-work areas and areas served by certain industries and centres of further education are formed by sub-regional hubs or clusters of towns and local authorities that have an identity of their own. These groups of authorities have common interests and often join together to undertake activities and make decisions. It is essential that the LSC works at this level, as well as at the strategic, regional and the very local levels. We therefore envisage these partnerships to be of many different sizes as appropriate to the groupings that exist in the sub-region. We would be happier if there was reference to them in the Bill. I beg to move.

My Lords, my response to this amendment remains the same as it was in Grand Committee. We sympathise with the concern of the noble Baroness, Lady Walmsley, that regional LSCs will be too large and out of touch to handle issues that tend to be local and not regional, but we still feel that colleges should expand their role in liaising with local authorities and other local bodies. We certainly would not like to see the LSC operating at three different levels: national, regional and local.

We hope that the reduction in the number of learning and skills councils will bring about a significant reduction in the bureaucracy and expense that they currently generate. I hope that the Minister’s optimism about the ability of the nine councils to respond flexibly and appropriately to local matters that might be brought to their attention will be justified, but I feel that any difficulties that might emerge from this should be resolved by reducing the scope of the LSCs’ powers rather than by increasing the size of their presence.

My Lords, the noble Baroness, Lady Morris, has summed up the Government’s position fully. The noble Baroness, Lady Walmsley, was kind enough to say that the Government might be listening on this Bill; I appreciate the compliment. As she knows, we have spent six years listening, to her in particular, and the reason why we have come forward with these proposals goes back to her initial suggestion that we should have a regional structure for the Learning and Skills Council and not the system of 47 local learning and skills councils that we initially set up. She therefore knows that we listen intently and sometimes reach the right position eventually.

Having arrived at the structure of the nine regional learning and skills councils, plus, as the noble Baroness said, the 150 local partnership teams, which we expect broadly to mirror the areas of local authorities, we do not think that it would be a good idea to set in place another structure, least of all a statutory structure, although we completely recognise the importance of engaging with the sub-regional groupings and consulting at that level, as she rightly said.

We believe, though, that the amendment as it is framed would place an additional bureaucratic burden on the Learning and Skills Council and on local authorities. The partner authorities that, under the amendment, the Learning and Skills Council would need to consult when establishing the proposed sub-regional committees are defined in the amendment by Clause 79 of the Local Government and Public Involvement in Health Bill; they are concerned with the aspect of that Bill that deals with local area agreements. The list of bodies for consultation under that clause is extensive. It includes bodies such as the English Sports Council, the Historic Buildings and Monuments Commission, the fire and rescue authorities—and I could go on.

We believe that consultation by the Learning and Skills Council with bodies such as these would be onerous and unnecessary. Moreover, as the amendment proposes that the committees would be statutory, further subsequent changes would need to go through the whole process of statutory consultation again with the same bodies. While we share the objective of the noble Baroness to ensure that there are effective means of sub-regional consultation and engagement by the Learning and Skills Council—the LSC is, indeed, committed to that—we do not believe that putting this arrangement in the Bill would be a productive step forward.

My Lords, I thank the Minister for his reply and the noble Baroness, Lady Morris of Bolton, for her remarks. I am somewhat reassured by the Government’s clear statement from the Dispatch Box that the LSC will have the duty to make sure that it works with all levels, including local authorities and the various partnerships that it makes locally. Such bodies know what the needs are on the ground and require the proper routes to communicate those needs to the LSC. I will go away and consider the noble Lord’s words with great care. In the mean time, I beg leave to withdraw the amendment

Amendment, by leave, withdrawn.

Clause 2 [Regional Councils]:

2: Clause 2, page 2, line 13, leave out “and chairman of a regional council” and insert “of a regional council;

( ) the appointment of a member of a regional council as chairman;”

The noble Lord said: My Lords, I will speak also to government Amendments Nos. 3 and 4. Amendment No. 2 is a technical amendment that clarifies the intention behind the regulation-making power provided in Clause 2. Clause 2 inserts Section 18A into the Learning and Skills Act 2000, which provides for the establishment of regional councils. Section 18A(2) gives the Secretary of State the power to make provision about regional councils in regulations and Section 18A(3) specifies what these regulations may, in particular, make provision about. An illustrative draft of the regulations was made available to the House ahead of Grand Committee.

Provision about regional councils will be made in regulations, rather than in primary legislation, in order to give the LSC greater flexibility over time, by enabling the LSC to respond to, and more rapidly accommodate, possible future machinery of government changes. The first draft of any such regulations will, however, be subject to affirmative resolution of both Houses, as in the arrangements that I set out in Grand Committee.

This amendment clarifies that regulations may provide for delegation of its functions by a regional council. While it has always been the intention that regional councils should be able to delegate their functions, this amendment makes it absolutely clear that regulations allowing a regional council to do so can be made. Such regulations may provide for the delegation of functions by a regional council to its chairman, from the chairman to a member of the regional council and, with the consent of the national council, delegation of functions by a regional council to its staff. The amendment also clarifies that regulations may provide for the appointment of a regional council chairman from among the members of the regional council.

There will be checks on the power for a regional council to delegate functions to its staff. This amendment allows regulations to provide for a regional council to delegate functions to a member of staff, but only where the national council consents. The national council may specify that this consent relates to particular functions of the regional council or description of functions. I beg to move.

On Question, amendment agreed to.

3: Clause 2 , page 2, leave out lines 20 to 25 and insert—

“(e) the delegation of functions by a regional council to its chairman; (f) the delegation by the chairman of a regional council of functions that he is authorised to exercise to a member of the regional council; (g) the delegation of functions by a regional council, with the consent of the Council, to a member of staff of the regional council;”

4: Clause 2 , page 2, line 38, at end insert—

“( ) A consent given under subsection (3)(g) by the Council may relate to a particular function or to such descriptions of function as may be specified in the consent.”

On Question, amendments agreed to.

5: Clause 2 , page 2, line 42, at end insert “which must include duties to—

(i) promote high standards, (ii) ensure fair access to educational opportunity, (iii) promote the fulfillment of the educational potential by every person participating in courses funded by the Council, and (iv) co-operate with further education colleges and representatives of employers in their area and any local authority as defined in section 1(a) of the Local Government Act 2000 (c. 22) any area of which is in the area of the regional learning and skills council.”

The noble Baroness said: My Lords, when we debated this amendment in Grand Committee, it had an additional paragraph at the end about promoting the well-being of members of the local community, which, to say the least, did not command the support of the Committee. We removed it, therefore, before tabling the amendment again so as not to detract from the virtues of the rest of it.

In moving the amendment, my noble friend Lady Sharp commented that the Bill, which radically changes the responsibilities of the Learning and Skills Council, lacked a declaratory statement about the objectives of the council. In replying the Minister claimed that the Act that set up the LSC, the Learning and Skills Act 2000, did not lack declaratory ambition and that, anyway, the recent grant letter to the LSC from the Minister in another place laid out clearly what was expected of it. My noble friend admitted that there was little between us in what we would like to see from the LSC but expressed the opinion that such things needed to be in the Bill, not in a private letter from a Minister.

It is in this spirit that we have retabled the amendment. We believe that a mission statement similar to that which was applied to schools by the Education and Inspections Act 2006 should be imposed on the LSC for post-compulsory learning. We believe that the learning funded and organised by the LSC is of such fundamental importance to the success of our economy that legislation needs to make quite clear the standards and partnerships which should apply. I beg to move.

My Lords, I support the amendment. I believe in principle that Bills should say what they are for. If they set up an organisation such as the Learning and Skills Council, they should say what its objectives are as well as how it will work. That is all I need to say in support of the noble Baroness.

My Lords, I apologise. I thought that my noble friend Lord Eccles wished to speak as he has an amendment in this group.

My Lords, it may assist the House if I point out that Amendment No. 6 is grouped with Amendment No. 5. If the noble Viscount wishes to speak to it, this is the appropriate moment.

My Lords, I am most grateful to the Lord Speaker for her advice. I thank the Minister for his letter of 11 February. I was particularly pleased to see Stockton-on-Tees in the working draft of 29 January attached to his letter. Years ago I attended Stockton-on-Tees technical college. I went to what we then called night school. I was working in a steel foundry. Having previously studied history and economics, it seemed sensible to learn engineering drawing, structural steel design and weight calculations for complex cast components. It was a wholly positive experience. The tech provided me with the wherewithal to do what I was employed to do with much greater understanding and efficiency.

The Minister’s letter of 11 February deals with two of the matters that we discussed in Committee: first, the staff reduction programme, begun towards the end of 2005, and, secondly, the LSC’s intended management and geographic structure. The two are interlinked. In 2005, the LSC used a baseline figure of 4,700 employees. The number actually employed in 2004-05 and 2005-06 averaged close to 4,400. When, later this year, there are 3,630 staff, there will, I believe, have been a net reduction of about 800. Since the Minister told the House in December last that 1,100 had already gone, either he or I must be wrong.

The letter also provides a baseline figure for administration costs in 2001-02 of £249.1 million, which, I believe, was the expenditure from September 2000 to March 2002—a period of 19 months not a year. Things can get difficult when the information provided is unreliable.

The structure of the LSC will remain decentralised, which is most welcome. The change from the present structure is confined to removing the statutory status of the 47 and conferring that status on the nine existing regional bodies. Although the 47 will disappear we are to have the council, nine regional councils, 42 area directors and 150 team partnerships. Whatever else is changing within the LSC, the management structure will not.

One question is left unanswered: what will happen to the 750 non-executives? How many will remain? My amendment would do two things. First, it would put the LSC structure into the Bill. I believe that that is right because, however policy changes, there will still be some 2,600 institutions of education involved therefore a decentralised structure is vital if local needs are to be met. I have Stockton-on-Tees in mind. Accepting the need for appropriate flexibility, the amendment provides for changes in the number and location of area directors and puts no upper or lower limit on the number of team partnerships. Indeed, I have followed the Minister’s letter as closely as I could. Secondly, the amendment would strengthen the position of local authorities in relation to the LSC. That point was made in Committee and is strongly supported by local authorities and the Mayor of London. They all believe that they should appear early in the Bill because of the importance of further education and training to the people who elect them. I strongly agree.

We are in familiar territory. We are probably close to agreement on the substance, as I believe the Minister was in his reply to the noble Baroness, Lady Walmsley. There remains, however, the question of whether provision should be made on the face of the Bill. The Executive usually say, “It is not necessary. We will see that it happens anyway”, but Ministers cannot bind their successors, so an Opposition will say that matters would be better safeguarded by statute than by undertakings. I believe that in this case the face of the Bill is the right answer. Not being a parliamentary draftsman, I am sure that the detailed wording of the amendment will need to be changed. However, if the Minister agreed to its thrust it would be a simple matter to get it right in a government amendment at Third Reading.

I look forward to the Minister’s positive response. I beg to move.

My Lords, although I have great sympathy with the concerns of the noble Baroness, Lady Walmsley, over the undefined—I nearly read that as unedified—duties of the LSC, I disagree with the need for such wide duties to be put into primary legislation. Our concern is that such an amendment would lead to even more responsibility being taken away from the colleges and invested instead in an unelected body. We would far rather the LSC’s duties were restricted to light-touch and arm’s-length oversight rather than the heavily involved and wide-ranging role that the amendment suggests.

On the amendment tabled by my noble friend Lord Eccles, as I said in response to Amendment No. 5, the efficiency-saving that the change from local to regional councils will, one hopes, bring about is our primary reason for supporting the move. However, my noble friend raises some interesting questions, and I hope that the Minister can answer them satisfactorily. As I said in response to the first amendment proposed by the noble Baroness, Lady Walmsley, the worst-case scenario that we can envisage would be a LSC that spans national, regional and local levels. That would involve overwhelming bureaucracy and wasteful government at its worst; as such, we cannot fully support the amendments.

My Lords, I entirely agree with the noble Lord, Lord Northbourne, that Bills should define or—following the noble Baroness, Lady Morris—edify what they are about. It is important to understand that the Bill before us amends the Learning and Skills Act 2000, which sets out the purposes of the Learning and Skills Council very clearly. Section 3 of that Act says:

“The Council must secure the provision of reasonable facilities for—

(a) education (other than higher education) suitable to the requirements of persons who have attained the age of 19,

(b) training suitable to the requirements of such persons,

(c) organised leisure-time occupation connected with such education, and

(d) organised leisure time occupation connected with such training”.

Section 4 of the 2000 Act says:

“The Council must—

(a) encourage individuals to undergo post-16 education and training;

(b) encourage employers to participate in the provision of post-16 education and training;

(c) encourage employers to contribute to the costs of post-16 education and training”.

Taken together, those two provisions set out a very broad sweep of ambitions and duties in respect of the Learning and Skills Council.

What the noble Baroness, Lady Walmsley, wishes to do—because she always encourages us to aim higher in our ambitions for education and training—is to define the duties of the Learning and Skills Council more widely still. Though I welcome the fact that she no longer wishes them to promote general well-being, as she did in her amendments in Grand Committee, we are still concerned that her current amendment would significantly extend the duties of the LSC, beyond the point where it is reasonable to do so. In this I follow the noble Baroness, Lady Morris. Proposed paragraph (iii) of her amendment would require the council to,

“promote the fulfilment of the educational potential by every person participating in courses funded by the Council”.

I understand the aspiration set out by the noble Baroness, but it does not need saying that an FE college is not a school. I say this because, given the terms of the amendment, it would be very difficult to see how either the Learning and Skills Council specifically or indeed the further education system as a whole could effectively discharge the duty in paragraph (iii), recognising that most FE students follow specific courses, a good proportion of them part-time. It is hard to see how, in practice—given that a student’s relationship with a college is fundamentally different from a pupil’s relationship with a school—the Learning and Skills Council could realistically meet the proposed duty.

I can, however, give an encouraging response to other elements of the noble Baroness’s amendment. She highlights the importance of quality in her amendment. We entirely agree with her. That is why, for example, the Quality Improvement Agency in Further Education is dedicated to working with providers, including those performing poorly, to raise their standards and increase their capacity. We are also, as is the noble Baroness in her amendments, committed to ensuring fair access to learning. That is why we have introduced educational maintenance allowances at a cost of many hundreds of millions of pounds. These are specifically geared towards promoting fair access to learning, and doing so with considerable success. I very much agree with the noble Baroness about the importance of the Learning and Skills Council, both nationally and regionally, co-operating with further education colleges, among others.

As we set out in our White Paper last March, the Learning and Skills Council is establishing a new and more effective relationship with colleges and providers, so that they can focus on improvements and meeting the needs of learners. A key part of this is the new arrangement for a single nominated Learning and Skills Council individual, called a strategic partner, for each college or other provider. Their role will be to discuss priorities, to commission provision within a much more streamlined and light-touch planning framework and systematically to help co-ordinate and build partnerships between the LSC and the respective college or provider. I hope that the objectives set out by the noble Baroness in her amendment are very substantially met. For the reasons I have given, we cannot go the whole way with her in her amendment.

I am delighted that the noble Viscount, Lord Eccles, had such a good experience of further education in Stockton-on-Tees and that he brings that experience to consideration of this Bill. As he said, we are narrowing the points of disagreement between us. I have dealt with the issue of numbers a good deal in our correspondence, and I will seek fully to reply to his latest letter to me. I hope to deal with most of the issues he raised, which are technical and deal with the calculation of numbers relating to job changes at the Learning and Skills Council and with base lines.

The noble Viscount asked how the baseline set out in the Learning and Skills Council’s first annual report and accounts, covering a period of 19 months, could be compared with subsequent years. That is a major point. I am informed that the calculation of the baseline was necessary, because Section 29 of the Learning and Skills Act 2000 specifies that the first financial year for the council should be the period starting with the date on which it was established and ending with the second 31 March following that date—as the noble Viscount said, that was a period of 19 months. However, for the first seven months, the Learning and Skills Council was in embryonic form and did not become fully operational until April 2001, when the operational staff transferring from the former training and enterprise councils and the former Education Funding Council for England took up posts. I am advised that the £249 million baseline figure to which the noble Viscount referred is appropriate for the department and the Learning and Skills Council to use because, for all practical purposes, it relates to a period of 12 not 19 months. Subsequent comparisons are, therefore, reasonable. Perhaps I may deal with the other issues raised by the noble Viscount in correspondence.

Amendment No. 6 is not necessary because it would place a statutory duty on the regional councils of the Learning and Skills Council, of which there will be nine, to set up between 27 and 54 area offices. However, as I said earlier in response to the noble Baroness, Lady Walmsley, the Learning and Skills Council will set up around 150 local partnership teams, which is approximately one per local authority. I set out their functions in my letter to the noble Viscount.

As I stressed in that letter and in my remarks, the Learning and Skills Council and local authorities already work in close partnership and the arrangements by which they do that will be strengthened by proposals in the Local Government and Public Involvement in Health Bill, currently in another place, which place a duty on responsible local authorities to co-operate with partner authorities, of which the Learning and Skills Council is one, in producing local area agreements.

I hope that I am further narrowing the points of disagreement between the noble Viscount and myself. When I have replied to more of the specific points raised in his latest letter, I will be happy to engage with him further.

My Lords, I thank the Minister for his reply and other noble Lords for their contributions. I am grateful to the Minister for reading us the declaratory statements in the Learning and Skills Act 2000, but reasonable provision, as stated in that Act, is not quite the same as high-quality provision. He rightly identified that that is one of our major concerns; but, I suppose we will have to make do with the Audit Commission, rather than having something on the face of the Bill, if the Government insist that that is not appropriate.

In addition, encouraging individuals is not quite the same as helping students to fulfil their potential. Proposed paragraphs (ii) and (iii) of our amendment are both about access, and I accept that it is for colleges primarily to ensure fair access. In my defence against the noble Baroness, Lady Morris of Bolton, I would point out to her that we provide in paragraph (iv) that the learning and skills councils should co-operate with the colleges on those duties.

I shall not press the matter at this point; we have had another fair debate about it, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Clause 4 [Strategies for functions of Council]:

7: Clause 4 , page 4, line 4, leave out “directions and”

The noble Viscount said: My Lords, I return to directions, which we discussed in Committee. The Minister correctly said that the duty to comply with directions is higher than that to have regard to guidance, and that the power to give directions allows greater control. Therein lies the problem. Ministers are constantly looking for greater powers of centralised control and for control that can be exercised without reference to Parliament. By good fortune, nearly all the legal departments serving Ministers have so far advised restraint, as, I believe, happened in the Minister’s department.

In the 2000 Act there are powers of policy direction in Section 25. If those powers were exercised, the LSC would have a duty to report under Section 28 in its annual accounts presented to the Secretary of State and to Parliament. No such reports have been made. The schoolmaster’s cane has remained behind the curtain, but it would be better if it were not there in the first place, not least because at some recent date, probably about a year ago, the LSC lost confidence in itself, as its 2005-06 report clearly shows. It is not the strong and independent non-departmental public body it needs to be. It does not debate matters publicly with the department. It apparently has no views about the Bill.

The Minister suggested in Committee that the LSC could always go to judicial review. How often has a non-departmental public body gone to judicial review and won against a Secretary of State? Does the Minister really believe that the LSC would approve a recommendation from its chief executive that it go to judicial review? Does he believe that the chief executive would ever make such a recommendation? The trouble is that the Government have not studied the psychology and practice of non-departmental public body management. Ministers forget that sanctions, potential or otherwise, erode confidence. Having eroded confidence and thus damaged performance, they tighten the screw—as is proposed here. Confidence is further eroded. These powers of direction should be dropped. Direction should be kept for its conventional constitutional purpose: matters of administration and of last resort. If my amendment were agreed, consequential government amendments would be needed in other clauses. The constitutional argument would be the same. I beg to move.

My Lords, the noble Viscount returns to an issue that he raised in Committee: the legitimacy of directions by Ministers on policy or routine management. Perhaps I could seek to reassure him again that it is not our intention to act unreasonably in this regard. The sort of matters that we envisage being subject to directions rather than guidance include the organisations and bodies to be consulted in preparing a strategy on the part of the respective learning and skills council, the form of and broad areas to be covered by the strategy, and matters to which a body should “have regard” when preparing its strategy. It is our firm intention to keep directions high-level and specific. We have demonstrated this clearly in the draft directions that we have already published for the strategy-making body for London, which I made available to noble Lords at an earlier stage. That document set out very clearly the scope of proposed directions. Those directions concern the form and content of the London strategy-making body. The strategy must,

“be presented as a written document; focus on training and skills for learners aged 19 and above who are in employment or who will be seeking employment … be supported by a high quality evidence base and identify the evidence used in formulating or reviewing it; contain measurable outcomes; promote equality of opportunity”.

It sets out the elements that must be covered by the strategy. It also sets out a process for updating the strategy, stating that it must be set for a period of five years and formally reviewed and updated annually. It also sets out arrangements for consultation when formulating or reviewing a strategy, including listing the bodies that should be consulted.

We do not regard those as unreasonable matters that the strategy-making body should have regard to in devising a strategy; on the contrary, if we were not able to give assurances that these matters would be pursued by the respective strategy-making body, I believe we would be in dereliction of our duties to Parliament. So we think that the matters covered by the proposed directions are reasonable and, on that basis, I do not believe that the issues raised by the noble Viscount apply. However, as he says, as a last resort, there could be a judicial review if the Secretary of State sought to act unreasonably. Although I cannot give him the figures for judicial reviews in this area, they are common within the public sector where it is thought that public bodies act unreasonably.

My Lords, I thank the Minister for his explanation. With regard to the last point, I think that there is a difference between judicial reviews raised by private bodies and bodies among the public and those that might be raised by a non-departmental public body taking on its own Secretary of State. I do not think that that has happened very often, if ever.

I do not disagree at all with the Minister that those matters need to be covered. My point is quite different: they can be covered in the Bill and by guidance, letters and dialogue. It is the constitutional issue relating to directions about which I am concerned. However, I have heard the Minister’s explanation, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8: Clause 4, page 4, line 11, at end insert “, including—

(i) local area agreements approved under section 82 of the Local Government and Public Involvement in Health Act 2007, and (ii) local improvement targets as defined in section 83 of the Local Government and Public Involvement in Health Act 2007, which have been prepared by any responsible local authority where the area of authority falls within the area of the order made under subsection (1);”

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 9, 21 and 22, which are grouped with Amendment No. 8. Amendments Nos. 8 and 9 are similar to Amendments Nos. 20 and 21 proposed by these Benches in Grand Committee. They would insert a new section in the Learning and Skills Act 2000 enabling the Learning and Skills Council to work with city region councils, which develop their own labour market strategies, as in the case of London, covered elsewhere in the Bill.

The first amendment would ensure that any such strategy took account of local area agreements and local improvement targets. The second amendment relates to consultations which should be carried out in formulating such strategies and asks that they should include not only the responsible local authorities but also partner authorities working with them. If this duty is not placed on the new strategic body, there is a danger that conflicting strategies will emerge to the detriment of learners in the area and the effectiveness of the programmes.

The Minister was reluctant to burden the Bill with this detail and claimed that the Local Government and Public Involvement in Health Bill, which is currently passing through another place, will cover these matters. His reassurances have not convinced the Local Government Association, which has asked us to lay this amendment again to indicate the strength of its feeling on the matter. Can the Minister assure the House that the new regional strategic body would not be able to make decisions without regard to these agreements and targets?

Amendments Nos. 21 and 22 have not appeared previously in the Marshalled List. They would ensure that the Learning and Skills Council gave active regard to representations from the local authority when considering either the establishment or dissolution of a further education corporation and that it provided those authorities with written information and reasons for such decisions.

Councils have duties with regard to schools and entitlements and options for pupils over the age of 14, and they have a strategic lead with regard to 14 to 19 education. They also have duties to fulfil every child’s educational potential under the Education and Inspections Act 2006, and they share responsibility for monitoring admissions, planning sufficient places and building schools for the future. All those responsibilities will be impacted by LSC decisions to open or close colleges of further education. The LSC therefore must exercise its powers to reorganise colleges in close consultation with local authorities. I beg to move.

My Lords, I rise to speak to Amendment No. 11, which is grouped. As your Lordships will be aware, in Grand Committee, there was a very lengthy discussion about the position of London, to which the amendment relates. It was understood, I think, that London is in a special situation because there are skill disparities in London, a high unemployment rate of 7.5 per cent—higher than the national average—and high child poverty rates. Of course, it was understood that skill levels are only one dimension in all this, but they are an important one. There was general agreement that it was right that there should be a special role for the mayor in seeing through the strategy in London and in establishing and chairing a new London skills and employment board.

Our only problem is that the Bill seems to make that a matter for the Secretary of State's discretion. Although that might be all right today, one does not know what may happen in future. Therefore, we felt it necessary to have an amendment that makes it obligatory on the Secretary of State to ensure that the board is established and permanent—that those arrangements continue with no question of them being withdrawn by some future Secretary of State.

I must say that when we had that discussion and many people agreed with that view in Grand Committee, my noble friend made an extremely sympathetic response. We were very pleased that he responded in the way that he did. Since then, I have had a very welcome letter from him indicating general agreement with that. That being the case, when the amendment is called, seriatim in its place, I intend to move it and hope to receive the endorsement of the House.

My Lords, first, I congratulate the noble Baroness, Lady Turner of Camden, on succeeding where many of us have failed.

I am glad that the Government have come some way in amendments to be moved in a later group to meet the concerns raised by the noble Baroness, Lady Sharp, in Grand Committee and again here by the noble Baroness, Lady Walmsley. However, the government amendment to allow the Secretary of State to specify other people and organisations which the Learning and Skills Council should consult falls a long way short of providing sufficient reassurance. In reply to this amendment or when he moves his amendments, can the Minister confirm which organisations he intends to include in guidance?

The Learning and Skills Council has enormous powers over further education providers and will have yet more when the Bill goes through. It is only right that those powers are wielded with the utmost care to ensure that local organisations are listened to and their concerns acted on. I hope that the Government will consider whether the amendment moved by the noble Baroness can be more positively incorporated into theirs.

My Lords, I congratulate the noble Baroness, Lady Turner, on her success in being so persuasive with the Government. I must take some lessons from her privately. I am grateful to the Minister for succumbing to her persuasion.

My Lords, I start with the London skills and employment board. In Grand Committee, I promised that if my noble friend Lady Turner wished to table her amendment to Clause 4 again on Report, we would give it very sympathetic consideration. She has done so and I can say that we are glad to accept it. We always intended to put the arrangements for the existing non-statutory London skills and employment board on a firm and permanent footing. The amendment gives us the opportunity to do so, which we are glad to embrace. We are also glad that it has such wide support across the House.

On Amendments Nos. 8, 9, 21 and 22 tabled by the noble Baroness, Lady Walmsley, let me say first that we share entirely the objectives of the noble Baroness in respect of consultation with local authorities and the need to take account of local area agreements. However, as I said in Grand Committee, we do not believe that these amendments are necessary. In the first place, the Local Government and Public Involvement in Health Bill will place a duty on local authorities to co-operate with partner authorities, of which the Learning and Skills Council is one, when producing local area agreements. The Bill also proposes that partner authorities such as the LSC must, in exercising their functions, have regard to every local improvement target specified in the local area agreement which relates to it. That, I believe, goes a considerable way towards meeting the objectives set out by the noble Baroness.

However, in terms of the duties on the further education sector itself, we believe that the right place to refer to these matters is in direction and guidance. We have been considering how to take forward the issue of strengthening directions and guidance to ensure that the process takes place. Although the published draft of the directions and guidance does not currently refer to local area agreements and local improvement targets, we intend to ensure that the matters referred to in Amendment No. 8, as proposed in the Local Government and Public Involvement in Health Bill, are addressed in the final version of the directions and guidance. That will meet the objective set out in Amendment No. 8.

Turning to Amendments Nos. 21 and 22, I understand the concern to ensure that the Learning and Skills Council consults the community, including the relevant local authority, where there are proposals to establish or dissolve further education corporations. Such consultation is already a fundamental part of the process of establishing and dissolving further education corporations and it will continue to be so. Regulations are already in place which set out the process for publishing proposals to establish and dissolve corporations. While some minor amendments to the existing regulations are required to reflect the transfer of powers from the Secretary of State to the Learning and Skills Council, we intend to keep the current process set out in those regulations in place. They prescribe both the type of information that must be included in the proposal and the manner in which it must be published. The proposal must include the rationale for the action being proposed and there is an existing requirement for all proposals to be sent to the local authority in the area the institution is situated, or is proposed to be situated. Under the regulations, following a period of at least one calendar month, any representations from the community, including the relevant local authority, have to be considered by the Learning and Skills Council before a decision is made to establish or to dissolve a further education corporation and, as I have said, these provisions will be retained in the new regulations to be made under Section 51 as amended. Local authorities will therefore have information on the rationale for the proposed action. They will also have the ability to comment on those proposals and to have those comments formally considered before any decision can be made. So I hope that the matters raised by the noble Baroness are fully met.

My Lords, I thank the Minister for his reply and I am delighted with what he has told us about the final version of the directions and guidance. I suppose it only goes to show that when writing amendments for any Bill, one must have on one’s desk a large pile of the previous Bills, and now future Bills that have not come before us yet as well. I soon learnt that no Bill is an island in this place. So I thank the noble Lord for his reassurances. Taken together, his comments go a long way towards satisfying my concerns. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 9 and 10 not moved.]

11: Clause 4 , page 4, line 25, leave out “may” and insert “must”

On Question, amendment agreed to.

12: Clause 4 , page 5, line 3, at end insert—

“(6A) In preparing the strategy, the body established under this section shall consult the Assembly and must have regard to any comments submitted by the Assembly.

(6B) The body established under this section must prepare a written statement in response to any comments it receives under subsection (6A) above.

(6C) The statement must—

(a) identify which of the comments submitted by the Assembly are accepted by the body for implementation in the strategy, and (b) set out the reasons why any comments so submitted are not accepted.”

The noble Baroness said: My Lords, I shall speak also to Amendment No. 13. These amendments also concern the position in London. Perhaps I should start by reminding noble Lords—although it may be that readers of the Evening Standard need little reminding—that London really does have a government which is quite unlike that in any other city. It has a single-person executive; it also has a scrutiny body. Amendment No. 12 is about the scrutiny role of the London Assembly, which is one of the two constituent parts of the Greater London Authority.

Under the Greater London Authority Act the Mayor is required to consult the Assembly and others in preparing and revising a large number of strategies. The Greater London Authority Bill, currently in another place, strengthens the scrutiny role and the amendment seeks to place that strategy on all fours with the other strategies. The same language is used as in the Greater London Authority Bill that regard must be had to comments submitted by the Assembly; a written statement and response must be received; comments by the Assembly that are accepted should be identified and reasons set out for not accepting any comments. I have been in correspondence with the Minister and I thank him for his letter responding to my concerns encapsulated in this and the next amendment.

The Minister distinguishes this strategy, saying that it is part of the national skills strategy framework—indeed it is—and that the Secretary of State will resolve disputes. There is not so great a distinction. All mayoral strategies sit within a framework, the different subject areas. The Secretary of State has considerable reserve powers. When we were debating that Act we discovered, because someone had counted, perhaps with the use of a computer, that there were more mentions of the Secretary of State than there were of the Mayor. To argue that this strategy is different because of the Secretary of State’s role and because of the policy framework within which it sits does not take us a great deal further.

I mention also the strategy of the London Development Agency, which is part of the Greater London Authority family. The Mayor has a considerable role in it but it is a regional development agency and in that way subject to many of the RDAs’ constraints. In the case of this Bill it is the Mayor who appoints the board and it seems to me that it is not only not unreasonable but an appropriate progression of the Assembly’s scrutiny role. I believe that scrutiny plays an important part in achieving good policy as the end result. It is not opposition; that is not how I approach it. In summary, I see no difference between this and the other strategies that will be subject to the input from the Assembly in the way that I have described.

Amendment No. 13 seeks to increase the openness of the way in which the board functions and to include provision for openness in regulations. Again I thank the Minister for his letter. He says that the provision does not need to be set out in directions. I agree that the right of access to meetings and material of such a board should not need saying but experience suggests that it does. I acknowledged in Grand Committee that in some matters confidentiality should inevitably prevail but that it would be best if the board were to decide to be completely open and that the default position should be open. I acknowledge that the Government want to move in the direction of greater openness. I should like to see them do so with more energy than so far has been offered.

I said that experience sadly suggests that it is necessary to spell these matters out. The London Development Agency, to which I have referred, has not always been wholly open in the way it has conducted its business. I pay tribute to the deputy chair of the LDA, who I think is gradually persuading the board of the value of openness. He comes from a background in local government, which is an important factor. Members of the board will mostly be business people. People with that background have a different ethos from those of us who are used to conducting our business in the public eye. They are not naturally comfortable with having sometimes quite difficult discussions in public. The board has met, but it did not do so in a public manner; indeed, I understand that a journalist was specifically refused the opportunity to report on its first meeting. It is not possible to find any of its business published on the web. A Google search takes one to the London Development Agency, and pretty much all I have been able to find is the announcement of the board’s membership.

I would prefer to see these provisions in regulations; or, if not in regulations, at least in the Secretary of State’s directions. In his letter to me the Minister said he will consider guidance. My third preference, I suppose, is not “considering” guidance but a commitment to guidance. I would like to see the commitment at a higher level than that, for the reasons I have explained. I beg to move.

My Lords, we are sympathetic to the amendments tabled by the noble Baroness, Lady Hamwee, to ensure that the council consults and listens to the Assembly, and is suitably open to the public. As I made clear when speaking to the previous group of amendments, anything that makes the Learning and Skills Council more transparent, accountable and responsive to local opinion and needs is a good thing. There is no other way that we can move towards a demand-led system. I hope the Minister will be able to reassure us on these points, and that he will consider these amendments carefully.

My Lords, the noble Baroness, Lady Hamwee, has retabled two amendments that were tabled in Grand Committee. Amendment No. 12 would require the London Skills and Employment Board in preparing its strategy to consult the Assembly, and to have regard to any response. Amendment No. 13 would make statutory provision about public access to the body’s meetings and papers.

On Amendment No. 12, we fully accept that the views of the Assembly are important and need to be taken account of by both the Mayor and the London Skills and Employment Board. That will be the case, and it is made clear in the draft directions, which I read out in response to the noble Viscount, Lord Eccles, and which we have made available to the House. These state:

“In formulating the strategy, the Board must consult the following consultation bodies”,

including the Greater London Assembly.

The draft directions also state that the strategy must include a summary of the main issues raised by those consulted and how they have been addressed, so there must therefore be a formal response to that consultation as well. However, I reiterate that we do not accept that the Assembly has a different role from that of other consultation bodies in respect of this strategy. The skills strategy will not be like the mayoral strategy set out in the Greater London Authority Act, which make up the Mayor’s strategic framework for London. Rather, the role of the London Skills and Employment Board is to formulate a skills strategy for Greater London that sits within the framework of legislation that concerns the Learning and Skills Council and its functions in relation to education and training. The Learning and Skills Council will be under a duty to carry out its functions in accordance with the skills strategy. We believe that this makes it a very different strategy from the mayoral strategies.

The skills strategy for London will be produced by the Mayor and the London Skills and Employment Board working together, with the Mayor as its chairman. The board will be under a duty to comply with directions and to have regard to guidance given by the Secretary of State, and the skills strategy will form part of the national skills strategy. All this means that it is different in kind from the Mayor’s other strategies. For this reason, although we believe it right that the assembly should be consulted, it would be wrong to say that the assembly’s role should be exactly the same with regard to the skills strategy as with the mayoral strategies in the GLA acts.

On Amendment No. 13, we have considered this point further. It is still our view that it would be unduly prescriptive to set out in regulations or directions whether and how the public and press should be given access to meetings and documents of the London Skills and Employment Board. If the noble Baroness were willing to withdraw her amendment, I can undertake to seek to develop guidance on the need for transparency and openness in the conduct of the business of the board. On the board’s actual practice, although as she said the early meetings have been held in private, I understand that as the members of the board become more accustomed to their new role, it is likely that they will want to move towards having meetings in public rather than in private. If we were to develop guidance of the kind I have just indicated, this would give them a strong lead in this direction.

There is no disagreement between us about the desirability of having meetings in public wherever possible. However, we believe this decision should be left to the judgment of the board members, most of whom are London employers and well aware of their responsibilities to the wider community in their city and anxious to serve it. Guidance is a better route to go down than directions of the kind envisaged by the noble Baroness in her amendment.

My Lords, the Minister says that he will seek to develop guidance. I welcome those words but is that a commitment to there being guidance, or an assurance that the matter will be further considered? I hope that it will be the former.

My Lords, it is an assurance that the matter will be further considered. I undertake to come back with our formal, proposed way forward before Third Reading. The noble Baroness will then be free to bring the matter back to the House if she is not satisfied with our proposed course of action.

My Lords, I am grateful for that and thank the noble Baroness for her support. I am in danger of repeating what I said in introducing both amendments. I think I anticipated the Minister’s arguments. I am sorry that he feels unable to accept that there is a particular role for the Assembly to contribute to the development of the strategy. The Mayor will shortly have new duties in, for instance, housing and climate change. Those are not matters where the Government are going to leave him entirely to his own devices, so I do not see the distinction that the Minister sees.

I am grateful for what the Minister says on taking forward openness and transparency. I feel slightly uncomfortable in even having to raise the matter, and do not want it to be thought that I do not have confidence in the individual members of the board. Having had, over a period of many years, dealings with people from different backgrounds, I have become entirely used to the different ways we all approach public duty. Their commitment is no less, but the customs which they apply are very different. Having said that, and thanking him for looking at the point on transparency, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 not moved.]

Clause 6 [Duty in relation to diversity and choice]:

14: Clause 6 , page 6, line 24, leave out “and training” and insert “, training and pastoral care”

The noble Lord said: My Lords, this amendment is about the social and emotional needs of some of the students at FE colleges. If the House will forgive me, it may be helpful to explain where I am coming from. In doing so I can explain what I am asking for and why.

My knowledge and experience in this area derives from the 16 years I spent as chairman of Toynbee Hall’s youth department, and particularly from my participation for three or four weeks each year in organising and delivering outdoor activity programmes for young people with learning difficulties, mainly those with emotional and behavioural problems. In the process, I got to know quite a lot about the needs of these young people. A large proportion of them, probably nine out of 10, came from dysfunctional and sometimes chaotic families. Quite a number had been neglected or abused.

What most of these young people wanted above all was an adult they could trust and who cared about them. They wanted not a department or a service but a person whom they could rely on to be there when needed. Most of these young people had failed at school, usually because they had had a bad start, not having had any educational support from their families. They got behind, they got discouraged, they found it humiliating, and so it went on. Most of them ended up truanting or sitting at the back of the class, raising Cain.

Interestingly, some of these young people, who had rejected the school environment, were prepared to be persuaded to have a go at a course in an FE college. They perceived it as an adult activity, they perceived some of the courses as relevant to their needs, and were prepared to have a go. These are what are called hard-to-reach young people—they do not walk through a door easily. It is crucial that if such young people walk into an FE college, we do everything we can to help them make a success of it. We must help them cope socially and emotionally, and to organise their life. Above all, we must encourage them, because self-confidence is often terribly lacking.

That is what I mean by pastoral care. If they do not get that care, many of those young people will fall out of college, revert to petty crime, rent-a-mob, running drugs, climbing up trees to stop the bulldozers, or running cigarettes across the Channel—I have heard all those stories. Then they will go on to serious crime and the revolving door of prison, unemployment and crime. That is why I want pastoral care to be on the face of the Bill.

The Minister wrote me an extremely helpful letter, for which I am very grateful,. It gives a very full picture. The difficulty with Report is that if I leave the Minister to speak his own brief, other noble Lords who want to speak will not know what he wrote to me. I shall briefly summarise the noble Lord’s comments but am quite prepared to be told that I have got it wrong.

The first several paragraphs of the Minister’s letter refer to various other pieces of legislation which could empower a Government to bring pressure to bear on further education colleges and the Learning and Skills Council to provide pastoral care and other help to emotionally and behaviourally disturbed young people.

I am not comfortable with any of those references. The two most important points are made at the end, when the noble Lord points out:

“In the March 2006 White Paper, Raising Skills, Improving Life Chances, we said that governing bodies should consider how their pastoral arrangements should best reflect the characteristics of their student body”.

That is good, but that White Paper proposal has not appeared in the Bill. Perhaps the Government have thought better of it, which is why they have not included it in the Bill. We cannot rely on a White Paper.

The other important point is that Ofsted’s Handbook for Inspecting Colleges has a marvellous list of things that must be inspected. It includes extensive guidance for inspectors, and inspection criteria include,

“whether the college plans effectively to meet the needs of potentially underachieving groups; whether the college helps learners to develop their self-confidence, team working skills”,

and the emotional development of learners. I just eat up things like that—I love the idea of them. But those criteria are only for Ofsted. I think that I understand that Ofsted will no longer make regular three-yearly visits to every school and every further education college, but will visit only occasionally when there is some cause for concern. I am not entirely happy that the fact that Ofsted is carrying out such a thorough inspection will solve the problem that we are looking at, but I shall listen with interest to the Minister.

However, I am pleased that Ofsted’s brief in this respect represents the Government’s point of view and that the Government are thinking in the same way as me: they want to do what I believe is right. The only question is whether we should not incorporate this in primary legislation now. I beg to move.

My Lords, I shall speak to Amendment No. 15, which stands in my name, but I support the significant points concerning pastoral services that have just been made by the noble Lord, Lord Northbourne, speaking most movingly, not least from his personal experience in FE. With him, I ask the Minister to ensure that the review of pastoral arrangements, including multi-faith chaplaincy, which is commended in the White Paper published last year to which he referred, is then transformed from the vision of a White Paper into the reality of legislation.

As I and others from across the House have said at all the stages of this Bill, there is more at stake than pastoral arrangements alone, important though they are. My amendment would remove an historical anomaly whereby 16 to 19 year-olds in schools have an entitlement to provision for their spiritual, moral, social and cultural development but 16 to 19 year-olds who are in colleges do not. Such entitlement is about more than pastoral matters; it relates to the whole of college provision, to a college’s ethos and inclusivity, and to the extent to which it meets the needs of all young people in college of whatever faith or none.

It simply cannot be right that young people at this crucial and vulnerable age who are in colleges have no space within the curriculum, or in enrichment or other activities, to explore the important questions about meaning and purpose in their lives and about the values, beliefs and faiths in our society, and that that omission occurs simply because they happen to be following a vocational course or, in some cases, an A-level course in a college rather than in a school.

I realise that this is not the moment for a great debate about the current moral difficulties of this generation of young people. We need time to absorb the lessons of, for example, the United Nations report on childhood. However, we need to ponder the messages that come from multi-faith chaplaincies in colleges about young people who are very interested in faith and values but who lack the moral compass to which earlier generations of young people may have had access. Some of the young people who are being drawn into a violent gun culture in places such as Peckham, or in Moss Side in my diocese, or some of the young people who are on hard drugs in places all over the country or who indulge in escapist binge-drinking on a Saturday night, are likely, if they are in any form of post-16 education, to be in colleges rather than anywhere else.

We should salute the FE colleges for the way in which they support these students and for the way in which they are attracting increasing numbers of the so-called NEET students—students not in education, employment or training—who are often from marginalised groups and deprived areas.

We should make absolutely sure—and this means having some sort of legal duty or entitlement—that the colleges have spiritual, moral, cultural and social development at the heart of any provision, especially in relation to employability skills. Employability is not only about technical and practical skills; employers are often quoted as saying that their main requirements from young employees, in addition to a basic level of skills, are qualities such as reliability, honesty, self-confidence and a sense of right and wrong. These are core human values, as I am sure noble Lords will agree, which have always been directly linked to the values and traditions of the faiths, whether Christianity or the other great religions, and to the great humanist traditions.

As noble Lords noted in Committee, churches and faiths are at one with the British Humanist Association in championing spiritual and moral education in FE colleges through the LSC-funded project, All Faiths and None. I say clearly from the Bishops’ Bench that engaging with faith and non-faith traditions is an essential part of every young person’s development and training for skills. If this or any Government convey the impression that all that matters in life is economic prosperity and technical skill, there will be sad consequences for society and young people. Indeed, we are already seeing those consequences in the confusion, disaffection and sometimes depression among the young.

To refer again to the United Nations report, I see it as no shame at all that 30 per cent of young people have so-called “low ambitions” in the areas of technical and vocational skills such as construction, engineering, IT, health and caring services. My younger daughter is training as a nurse at the moment. These are not low aspirations—and even if they happen to be called so-called “low ambitions” they have just as much value as academic achievements. We need to show young people in colleges that they deserve equality of esteem and entitlement with those young people who are following the academic route in schools.

On this Bench, we have taken on board the Minister’s comments in Committee that this Bill is about the structure and organisation of FE rather than the curriculum. I withdrew the earlier proposed amendment, which might have placed a duty on colleges in respect of the curriculum. But what I suggest through this amendment is that the LSC should have regard, as part of its brief, to the spiritual, moral, social and cultural needs of students as well as to the other important aspects of their education and training. A modest signal given now in this Bill indicating the broader overall purposes of further education would correct the historical anomaly to which I referred, whereby the deeper needs of students and the values and faiths of our society appear to be a matter for 16 to 19 year-olds only if they are in schools, not colleges. That simply cannot be right.

My Lords, before speaking to my Amendment No. 49, which is in this group, I shall say a word about the other two amendments that have just been proposed.

On the amendment proposed by the noble Lord, Lord Northbourne, I absolutely agree with him about the needs of the group of young people to whom he referred. Those who have dropped out of school very often find that they are treated very differently in a college and respond well to that. It is important that their pastoral needs are taken care of. However, I echo the words that the noble Baroness, Lady Morris of Bolton, used in respect of one of my earlier amendments, in that I think that this is a matter for the colleges, rather than for the Learning and Skills Council.

On the amendment of the right reverend Prelate the Bishop of Manchester, we on these Benches believe that it is right that the anomaly should be corrected—that anomaly exists, there is no question about it. Provision should be made in colleges for the spiritual, moral, cultural and social needs of young people. My only concern is whether the right reverend Prelate’s amendment would place a duty on all colleges to have chaplaincies of every faith that operates in this country or else be accused of discrimination. Can the Minister respond to this concern of mine? Obviously, this sort of work needs to be made available to young people, but in my view they should not be forced to take part in it once they are over the age of 16.

Amendment No. 49 would place on colleges of further education the same duties to promote the well-being of students as the Children Act 2004 gives to schools; it would also give the same duties to promote community cohesion as the Education and Inspections Act 2006 puts on schools. Given that many pupils of the same age—14 to 19 year-olds, as we have just heard—attend both sorts of institution, we on these Benches see no justification for colleges not having these duties. When the national vocational diplomas get into full swing, even more of these young people will attend FE colleges. Even now, in areas where students from many schools do some or all of their A-levels at FE colleges, a different set of duties applies to them in the two kinds of educational institutions that they attend. This cannot be right.

When the Education and Inspections Act 2006 passed through this House, we had long and interesting debates about the integration or otherwise of pupils of different faiths in different kinds of schools. Some of your Lordships were keen on single-faith schools and others were against them, on the basis that they did not assist people of different faiths to get to know one another and to get on together. The compromise hatched by the Government in the face of this situation—with the assistance of the noble Lord, Lord Sutherland of Houndwood, and others—was to allow faith schools to continue, but to give all schools the duty to promote social cohesion. Some of us will be very interested to see how Ofsted inspects them on that duty, and whether the criteria will include their admissions policies. In colleges, however, you usually get a much more mixed population. One might think that it would be easier for colleges to fulfil this duty. Whether or not this is the case, it is vital that we have coherence and strength of message about the importance of social cohesion and the five outcomes of the Every Child Matters programme.

Many students at FE colleges are, indeed, still children and their well-being must be served just the same, whether they attend college or school. If the Government accept this principle, and my amendment or something like it, we would need an amendment to Section 125 of the Education and Inspections Act 2006 to allow colleges to be inspected, as well as schools, on the new duty. Perhaps the Minister will think about that when considering my amendment.

My Lords, having been moved by the first two speeches and having a certain sympathy, too, with the approach of the noble Baroness, Lady Walmsley, which had echoes of previous legislation in which we were all involved, I very much hope that the Minister will reassure us that all this can be done in a way that is obvious and visible to all colleges, and is not just assumed to be—as this Bill is, apparently—about structure and organisation rather than content. The points made by my noble friend Lord Northbourne about these young people who, for whatever reason, have got into difficult circumstances are very important.

Funnily enough, this morning I was at a breakfast organised by Plan where I heard about a young man who had been in and out of unlawful activity. He used the gym as a method of working out. In that process, he came across a young person suffering from Down’s syndrome. They established a good relationship and this brought out the best side of the young man, who stopped offending and went on to become an adviser on such young people for a local authority. That is a one-off but I refer to the spiritual side, the whole community involvement side and the facilities that should be available for the young people whom we are discussing.

As the right reverend Prelate said, there should be no difference in this regard between those who are at school and those in the same age group who want to undertake further education or training. We should welcome them whenever and however they come into the system. In my view it should be made very clear to the LSC as well as to individual colleges that this should take place. I hope that the Minister will reassure us on that.

My Lords, I do not need to repeat the excellent points made by the noble Lord, Lord Northbourne, and the right reverend Prelate the Bishop of Manchester, who spoke even more eloquently on this matter than they did in Committee. I also pay tribute to the work that has evidently gone on behind the scenes in the creation of these amendments. The noble Lord, Lord Northbourne, and the right reverend Prelate proposed two amendments that offer two alternative methods of achieving wider and better provision of spiritual guidance in FE colleges.

As I am sure the Minister will agree, their arguments are irresistible. Surely he will acknowledge that it is at best odd, and at worst inconsistent, that one 16 year-old should be entitled to pastoral care or spiritual care and guidance while another is deprived of it purely by virtue of the educational establishment that they attend.

This issue is so important to the general well-being of students, and to the contribution of FE colleges to their wider communities. I have great sympathy with the difficulties that the right reverend Prelate encountered in Committee. It seems that the Bill has been drawn so narrowly as to preclude the inclusion of a substantive amendment to encourage the adoption of either spiritual, moral and cultural guidance as proposed by the right reverend Prelate, or pastoral care as proposed by the noble Lord, Lord Northbourne. I shall be very interested to read the Ecumenical Agency’s report later in the year. Can the Minister assure noble Lords that he will take its recommendations into account and that he will communicate to it whether he intends to introduce policy following the report?

Amendment No. 49 in the name of the noble Baroness, Lady Walmsley, makes for familiar reading, as she said. I recall reading in the Official Report that, during the passage of the education Bill last summer, the Government accepted amendments tabled by the Liberal Democrats that placed a duty on governing bodies to promote well-being. The terms of this amendment cover similar ground but add to that duty a duty to promote community cohesion. I warmly support the principle behind the noble Baroness’s amendment; nobody can disagree with the importance of promoting well-being and community cohesion. I hope that other noble Lords will agree with me that no further education college would not promote well-being and community cohesion. Amendment No. 49 raises an important issue, for which I thank the noble Baroness, Lady Walmsley, but I believe that this is a matter of social responsibility and should not be a statutory requirement. We are concerned that the law as it applies to children might be invoked with respect to adults, as could be the case were this amendment accepted. That is our reservation on Amendment No. 49.

My Lords, it seems very strange that there should be a duty for 16 to 19 year-olds in one part of the education firmament and not a matching one elsewhere. It simply does not stand up. The argument of logic is very powerful and I cannot see any grounds to dissent from what has been said. I hope that the Government will respond positively to this, especially as it has such wide support in the House and outside the House in the humanist community. We are not debating faith, which sometimes divides us; this is something that unites us. It is in the interests of all young people that they should receive this nourishment.

My Lords, I will deal first with the spiritual, moral, cultural and social needs, quite rightly highlighted by the right reverend Prelate the Bishop of Manchester. I entirely agree with him that it is wrong to conceive of further education as purely a matter of technical and practical skills. We made clear in last year’s further education White Paper that education and training for community development and personal fulfilment have an important place. The White Paper states that,

“for young people in particular, [further education] must extend to inculcating the values, attitudes and knowledge that society seeks from its young people”.

We are concerned to see that institutions educating 16 to 19 year-olds take the spiritual and moral well-being of their students seriously.

We also recognise that many students want their faith or spiritual needs recognised, and that many colleges already provide a range of facilities to meet their students’ spiritual needs, including multi-faith chaplaincy services and prayer rooms. Indeed, under Section 44 of the Further and Higher Education Act 1992, there is already a statutory duty on further education colleges, in respect of 16 to 19 year-olds, to ensure that an act of worship is held at least once a week.

We do not think that imposing a wide-ranging duty on the Learning and Skills Council, changing its remit, is the way forward for the reasons I set out in Grand Committee. I hope I can indicate our commitment to strengthening provision in this area in ways that the right reverend Prelate will welcome. In particular, Clause 7 of the Bill provides that the Learning and Skills Council must have regard to guidance from the Secretary of State on consulting with employers, learners and potential learners. The draft of this guidance, which I have made available to noble Lords, specifically recognises that,

“for many young people, their faith or spiritual needs are important defining characteristics of who they are”.

The draft guidance also states that the Learning and Skills Council should,

“consider consulting learners and potential learners on their spiritual and faith or no-faith needs as a key part of reviewing student support services”.

I stress the words “a key part”. Consultation on these aspects could, where appropriate, include representatives of key faith communities or faith groups.

I reiterate the undertaking I gave in Grand Committee to study carefully the review of the spiritual, moral, social and cultural needs of students in further education, being carried out by the National Ecumenical Agency in Further Education, of which the right reverend Prelate the Bishop of London is patron. We look forward to the recommendations of the agency in April. Once this review has been reported in the spring, we will consider whether there is a need for further national initiatives or policy. Following the lead of the noble Baroness, Lady Morris, I undertake that the Minister for Further and Higher Education will be glad to meet the right reverend Prelate and any other noble Lords who wish to join that meeting to discuss the report and initiatives that it would be sensible to take forward in light of it.

I hope that, while I have not been able to satisfy the right reverend Prelate entirely, I have at least been able to move some way in his direction, on the basis of our shared concern to see these issues taken seriously in further education, and not simply regarded as the preserve of schools and institutions dealing with younger people.

On Amendment No. 14, moved by the noble Lord, Lord Northbourne, and Amendment No. 49, moved by the noble Baroness, Lady Walmsley, I agree strongly with them that there is a need for robust systems to ensure the well-being of students, promote community cohesion and ensure that all young people have access to appropriate pastoral care. Let me set out some of our provisions in this regard. First, it is a requirement that where 14 to 16 year-old pupils who are registered with a school spend part of their time in a further education college, they remain pupils of the school. That school, therefore, has a duty to promote their well-being. Amendment No. 49, in the name of the noble Baroness, Lady Walmsley, seeks to place duties on FE colleges that mirror existing duties on schools. These are not needed.

Colleges, through the work of their student support services, tutorial work and enrichment work activities, are constantly engaged in promoting the well-being of young people. That is underpinned by Section 175 of the Education Act 2002, which requires governing bodies of further education colleges in England and Wales to ensure that they exercise their functions with a view to safeguarding and promoting the welfare of their younger students.

Colleges are held to account for their performance in both these areas through the inspection arrangements. The common inspection framework in England has a range of relevant evaluation questions, including the extent to which the college is educationally and socially inclusive and the effectiveness of its links with other organisations, including organisations concerned with the care and welfare of children, in promoting the well-being of learners. Indeed, the common inspection framework makes clear that issues affecting the well-being of children have always been central to inspection judgments. Inspectors will evaluate the extent to which the five Every Child Matters outcomes of being healthy, staying safe, enjoying and achieving, making a positive contribution, and achieving economic well-being are being met by colleges.

The common inspection framework in Wales requires similar evidence of the work of colleges in relation to their learners and their inter-relationship with local communities. It specifically asks how well the learning experiences meet the needs and interests of learners and the wider community and how well learners are cared for, guided and supported; but these judgments will necessarily be dependent on the context of the college. Colleges where the majority of learners are adults, for example, will have very different arrangements from those where the majority of students are 16 to 19 year-olds. It is increasingly the practice in colleges that there are self-contained sixth-form centres for students under 19, not least to ensure that better and more focused pastoral arrangements are in place.

As the noble Lord, Lord Northbourne, has rightly observed, a small number of children of compulsory school age are, for a wide variety of reasons, not registered with a school. Some of those are enrolled on a full-time basis in a further education college. All 13 to 19 year-olds in England, whether they are registered with a school, with a further education college or with neither, are covered by provisions in Section 6 of the Education and Inspections Act 2006, which places a duty on local authorities in England to secure access for young persons in their area to sufficient educational and recreational leisure-time activities which are for the improvement of their well-being. “Well-being”, under that section of the Act, relates to the five Every Child Matters outcomes and the educational activities must include those that are for the improvement of the young people’s personal and social development.

Section 10 of the Children Act 2004 is also relevant. It imposes a duty on each children’s services authority in England to make arrangements to promote co-operation between the authority and each of its “relevant partners”. The Learning and Skills Council is listed as a relevant partner, being the strategic commissioner of post-16 provision. The National Assembly for Wales is also listed as a relevant partner in relation to children's services authorities in Wales. Once the new First Minister is appointed in Wales in May 2007, these functions will transfer to Welsh Ministers.

However, we propose to go further still. The White Paper, Further Education: Raising Skills, Improving Life Chances, published last March, stated that FE college governing bodies should consider how their pastoral arrangements should best reflect the characteristics of their student body of all age ranges. Taking this commitment forward, we are currently developing pilots which will test and evaluate different approaches to pastoral support. The pilots will include a particular focus on children and young people in care as part of our Green Paper commitments. We also want to explore how pastoral arrangements can best work to support those 14 to 19 year-old learners who learn across more than one institution, and who have been of particular concern to the noble Lord, Lord Northbourne.

The evaluation of these pilots will be built into guidance for providers by April 2008. I will keep noble Lords informed of their progress and my honourable friend, the Minister for Lifelong Learning, Further and Higher Education will be glad to discuss the outcome of those pilots with noble Lords before we develop that guidance for providers. So I hope that I have gone some way towards meeting the concerns that have been raised.

My Lords, does the Minister have any comments about the social cohesion part of my amendment? He has answered very fully the well-being aspects, but not the social cohesion aspect.

My Lords, I should stress that the common inspection framework in England to which I referred also includes holding colleges to account for their work in supporting community cohesion. I am informed that that includes activities such as hosting faith awareness weeks, which meets the point raised by the right reverend Prelate the Bishop of Manchester. The Government encourage and support these activities. For example, we work with the Association of Colleges in England and others to ensure that colleges have good guidance on effective practice in community cohesion work. As I said, they are then inspected against that.

My Lords, the noble Lord raises an important point. He is right that there is now a light-touch inspection regime, but all institutions are still visited on a regular cycle. That varies depending on the type of institution but it is about once every three years. The point that I think the noble Lord was getting at is that the depth of that inspection is now in inverse proportion to success. Successfully managed institutions whose self-evaluation is positive and held to be accurate by inspections will not receive one of the old-style inspections that included large numbers of inspectors sitting at the back of classes. However, institutions that demonstrate weaknesses in their self-evaluation or whose leadership and management is not found to be satisfactory by inspectors— and that includes pastoral support of pupils—will be subject to a more in-depth inspection and can be issued with a notice to improve or, in extremis, be placed in special measures, which requires a radical improvement plan to be put in place. The inspection arrangements are still robust in meeting the noble Lord’s concerns.

My Lords, that is very helpful; I am grateful to the noble Lord. I want to apologise to the right reverend Prelate. I promised him before the debate that I would support him, but I was so excited about my own amendment that I forgot to do so. I indeed support the right reverend Prelate.

The noble Baroness, Lady Walmsley, referred to the possibility that pastoral care should be the business of the colleges. I wholly agree, but the Learning and Skills Council provides the money for these things. If the issue is not in the Bill or in some other way officially endorsed, the LSC perhaps could be accused of misusing its funds if it provided an extra teacher or person to carry out personal and social care, for example. The guidance that the noble Lord said he had sent has not yet drifted down to the Cross Benches.

My Lords, while I would not absolutely guarantee not to bring this up again when I have seen the guidance, I am grateful to the noble Lord.

My Lords, I deeply appreciate the noble Lord’s warm support and that of other noble Lords, including, most particularly, the noble Baroness, Lady Morris of Bolton. I would have loved to have had the warmly enthusiastic and immediate acceptance of my amendment by the Minister, but I have been reassured by what he has said; I appreciate that.

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 15 not moved.]

Clause 7 [Consultation by the Council]:

16: Clause 7 , page 6, line 41, leave out “and”

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 17, 18, 47 and 48. I am glad to say that this is another example of the Government listening carefully to the noble Baroness, Lady Walmsley, and producing amendments to match. She has some of the Midas touch of my noble friend Lady Turner. When we come to Clause 19 the noble Baroness, Lady Morris, can also take a good deal of credit for changing the Government’s view on the Bill.

In Grand Committee, the noble Baroness, Lady Walmsley, proposed that guidance to the Learning and Skills Council about consultation with learners, potential learners and employers should also cover consultation with “other bodies” to be nominated by the Secretary of State. I undertook to consider the points raised further. I and my honourable friend the Minister for Further and Higher Education are now persuaded that the legislation should cover consultation with learners, employers and “other persons” nominated by the Secretary of State. Amendment No. 17 reflects that change.

The LSC already consults a wide range of partner bodies about the exercise of its provision and funding duties in relation to learners. We acknowledge that, and of course expect it to continue. By proposing the amendment, we also recognise that there may be a need for consultation by the LSC in the future with “other persons” about decisions which affect them.

Amendment No. 17 will allow us to specify in guidance organisations that the LSC should consider consulting. That will include partner bodies and other organisations that we may specify. Specifying organisations in guidance will maintain flexibility and allow us to respond to changing circumstances in the FE system without the need to amend legislation.

A draft of the statutory guidance, which this clause proposes that the LSC must have regard to in consulting employers, learners and other organisations and partners, has been made available to the House. The guidance will remain under review and would be updated to reflect any change to the duty placed on the LSC by Clause 7. However, since it already covers consultation with the LSC's partner organisations, we have no immediate plans to extend the categories of persons whom the guidance recommends that the LSC should consult.

Amendments Nos. 16, 18, 47 and 48 make minor, technical changes to Clauses 7 and 21. Amendments Nos. 16 and 47 make it clear that there might be consultation, by the LSC or by governing bodies of FE institutions, with one or more of the categories of consultees named in guidance, and that such consultation will be on decisions that specifically affect that group or person.

Clause 7 requires that guidance from the Secretary of State to the LSC specify that the views of a person being consulted are to be considered in light of their age and understanding. Clause 21 contains a similar requirement in relation to guidance to governing bodies of FE institutions from the “appropriate authority”—the Secretary of State for institutions in England, and the Welsh Ministers for institutions in Wales. Amendments Nos. 18 and 48 ensure that those requirements relate only to consultation with learners and potential learners. I beg to move.

My Lords, it only remains for me to thank the noble Lord for listening.

On Question, amendment agreed to.

17: Clause 7 , page 7, line 1, at end insert “or

( ) such other persons as may be specified in such guidance,”

18: Clause 7 , page 7, line 3, leave out from “section” to “to” in line 4 and insert “about consultation with persons falling within paragraph (a) of subsection (1) must provide for the views of such a person”

On Question, amendments agreed to.

Clause 9 [Powers to form or be involved in certain bodies corporate]:

19: Clause 9 , page 7, line 37, leave out from “ending” to “the” in line 38 and insert “immediately before the coming into force of this section,”

The noble Lord said: My Lords, I shall also speak to Amendments Nos. 20, 45, 46, 56 and 57. These are technical amendments relating to Clauses 9, 20 and 25, which concern the powers of the Learning and Skills Council and further and higher education corporations to form certain bodies corporate.

Clause 9 amends the Learning and Skills Council's current power to form companies as set out in Section 18 of the Learning and Skills Act 2000, to make it clear that it can form companies limited by guarantee as well as those limited by shares, subject to the Secretary of State's consent. Similarly, Clauses 20 and 25 amend the powers of further and higher education corporations to make it clear that they can form companies limited by guarantee as well as those limited by shares. Clauses 9(4), 20(6) and 25(4) make retrospective provision.

These technical amendments make it absolutely clear that the retrospective provision is only required until immediately before the amendments come into force. Once they are in force the retrospective provisions are no longer required, as the amendments themselves provide that the Learning and Skills Council and further and higher education corporations will have the power to form companies limited by guarantee. The clauses as drafted provide that Clauses 9(4), 20(6) and 25(4) relate to the period ending on the date that the remainder of Clauses 9, 20 and 25 come into force. I am informed that there is therefore an overlap of one day. The amendment shortens the period so that it ends immediately before the rest of Clauses 9, 20 and 25 commence, so that there is no overlap. The second amendment to each clause is purely a grammatical change. I beg to move.

On Question, amendment agreed to.

20: Clause 9, page 7, line 39, leave out “include” and insert “have included”

On Question, amendment agreed to.

Clause 16 [Publication of proposals]:

[Amendments Nos. 21 and 22 not moved.]

Clause 17 [Intervention: England]:

23: Clause 17, page 11, line 39, leave out from “institution” to “is” in line 41

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 24, 25, 26, 36, 37 and 39 in this group, all of which refer to Clauses 17 and 18. All my amendments, save Amendment No. 39, are the same as those laid in Grand Committee, and I am afraid that my views have not changed, despite the Minister’s careful reply on that occasion.

Amendment No. 23 would remove the reference to,

“significantly less well than it might in all the circumstances reasonably be expected to perform”,

as we believe that this is an intervention too soon, too far and too woolly. Amendment No. 24 would allow the council to give the corporation of a college advice but not directions. Amendment No. 25 would remove the power for the LSC to require a governing body to dismiss a principal or other senior member of staff. Instead, Amendment No. 26 would insert a statutory procedure through a model similar to that which applies to schools that are failing, whereby a written report of the LSC’s concerns would be sent to the governors and the principal, and the governors would have to reply to the LSC with their plan of action. Frankly, if this procedure were in place, I could not envisage any need for the LSC to use the powers that the Government want to give it. Indeed, I believe it is only right that such a procedure should be laid down in statute. Amendments Nos. 36, 37 and 39 would insert the appropriate similar amendments into Clause 18, which relates to Wales.

We believe that these powers are neither appropriate nor needed in the hands of an unelected body whose job is to fund and organise the provision of further education. Despite the Government’s amendments, which state that the LSC and the Welsh Assembly Government must, after consultation, publish statements on how they plan to use the new intervention powers and lay them before the Secretary of State and Parliament or the Welsh Assembly as appropriate, we are still not happy with the extent of these intervention powers. We have therefore sought in this group of amendments to modify the worst of them.

We acknowledge that the Government have made clear the circumstances in which the LSC might direct a governing body to dismiss a senior member of staff. However, there is no evidence that in these circumstances governing bodies would not act by themselves without needing the LSC on their backs. College governing bodies take these matters extremely seriously, and there is no evidence that a college has not acted decisively when it has needed to. In a sector of around 400 institutions, it is inevitable that some will perform less well than others. Around 70 principals leave their post each year, but most leave to take up a post elsewhere or to retire. A small number are asked to leave by their governing body. In cases of serious mismanagement or college failures, governing bodies work with the LSC and an interim principal until a new person can be appointed.

The Association of Colleges has estimated that 25 financially weak colleges were merged with stronger neighbours between 2000 and 2005—a period, by the way, of enormous improvement in the whole sector, matched by no other public service. Only on two occasions in the past 10 years has a whole governing body resigned.

While considering the Government’s proposal to take intervention powers from the Secretary of State and give them to the LSC, it is worth noting that the Secretary of State has not found it necessary to use these powers since they were created by the Further and Higher Education Act 1992.

Noble Lords will recall that another of our concerns about Clause 17 is that it interferes with employment law and the contractual arrangements between a college corporation and its employees. The intervention of the LSC or Welsh Assembly Government could make it more difficult for governors to take the appropriate action, and it could certainly open them up to legal action and possible compensation for breach of contract.

The Government’s response to that issue in the guidance is that they,

“would expect the college to have a strong evidence base on which it would be able to rely in the event of a claim for unfair dismissal being brought before an employment tribunal”.

Any college that has such an evidence base will itself dismiss the person concerned and does not need the LSC to instruct it to do so. If it has not such a base, the person should not be dismissed in any case—either by the college independently or on the instruction of the LSC.

Another concern is that the Bill gives the LSC new powers but does not specify how responsibility for failure should be attributed to the various senior members of staff. The absence of a real appeals process would make it impossible for the college to comply with the statutory disciplinary and dismissal procedure in any meaningful way, as any representations that the individual might make to the college would make no difference. The decision will not be made by the college; it will be made by the LSC.

Much of the money spent by colleges is public money, and none of us condones bad practice or poor quality in teaching or management. Of course the LSC has a role in supporting and advising colleges that are underperforming. In extremis, there are still the powers of the Secretary of State. There is no evidence that we need to transfer those powers to an unelected body. As we are talking about public money contributed by the taxpayer, it is only right that someone who has been elected and can be dismissed by the same taxpayer has the powers of intervention. I beg to move.

My Lords, I shall speak to Amendments Nos. 34 and 40, but first I wish to say how glad we are that the Government have listened to some of our concerns about the accountability and transparency of the powers that the clauses introduce. Their amendments go some way to provide the necessary scrutiny of such potentially draconian powers and they certainly improve Clauses 17 and 18 in many ways.

We do not feel, however, that those amendments go far enough. They do not even begin to address our concern about the effect that the clauses will have on the relationship between the Learning and Skills Council and further education institutions, of which the noble Baroness, Lady Walmsley, so eloquently spoke. More importantly, they do not disguise the fact that the powers given by the clauses would damage the development of the further education sector as a whole and reduce the independence of individual colleges still further. The government amendments do nothing to change that; therefore, although we are glad that the Government are listening to this House and making a genuine effort to find a middle ground, the amendments are not enough.

As my response to the government amendments may have led your Lordships to expect, we are very sympathetic to the amendments tabled by the noble Baroness, Lady Walmsley. They deal with exactly the point that the Government have failed to address: the effect that the clauses will have on the relationship between the Learning and Skills Council and further education institutions. Clause 17 provides for the Learning and Skills Council to take on an enormously powerful role. The Government have made it clear to us that they have no expectation of that power being used at all frequently. As we have heard, it has never been used by the Secretary of State. By their amendments, they have made any use of it much more transparent and accountable not only to Parliament but to the wider public.

None of that makes any difference to the fact that the body that directs much of colleges’ funding, issues guidance and is generally a close and constant presence in the running of our colleges is being given the power to go in over the head of the governing body and sack staff, even to dismiss governors. The Liberal Democrat amendments make it considerably more likely that the powers will indeed be used only as a backstop in the most urgent cases. As such, they are very sensible and go a long way to improve the clauses. However, we do not feel that they can be amended sufficiently to guard against the harm we believe they will do. So, despite the best efforts of the Government to address our concerns, we have tabled amendments to leave out Clauses 17 and 18. We believe that these clauses are a step in entirely the wrong direction.

Further education institutions need to be given more, not less, independence. They need to be trusted more by the Government, not hedged around with endless rules, regulations and micromanaged targets. The only way for this sector to gain the status and credibility it deserves, and which we desperately need it to achieve, is for the Government to give colleges and the governing bodies managing them the power to develop their own diverse, innovative and locally responsive strategies and direction. Frankly, the Government should know better than to continue with clauses like these. They have commissioned several reviews and reports, most recently the Leitch review, all of which have told them the same thing: colleges need to be trusted with real independence in order fully to achieve their potential. Yet the Government continue with this unprecedented level of interference. There is no suggestion that this degree of control will be appropriate for schools or universities, so why do the Government think it is appropriate for colleges?

These powers will not only prevent the further education sector developing, they will actively damage it, which is why we propose the outright removal of the clauses rather than their modification. Giving the Learning and Skills Council these powers will erode the position of colleges’ governing bodies instead of encouraging governors to continue to maintain a keen and active interest in their colleges. The Government are taking responsibility away from them, for no discernible reason. As I said at Second Reading, the further education sector receives some of the best Ofsted reports. I should, however, make it quite clear that we are not against rigour or driving up standards. We are perfectly happy for these powers to continue to reside where they are at present: with the Secretary of State, who is elected and paid to take difficult decisions and is ultimately accountable to the electorate. In Clause 18 the proposed shift of powers to the Welsh Assembly is at least a shift to another body answerable to the electorate, but Fforwm, the Welsh sister body to the Association of Colleges, reports that colleges want these powers to remain with the Secretary of State.

No doubt the Minister will tell me, as he did in Grand Committee, that these powers are very rarely used and are a last resort, but clearly not everyone sees them in that light. The morning after the Queen’s Speech, the “Today” programme said that there was to be a further education Bill to “sack college principals”, and in a press release in response to the Government’s White Paper that heralded the Bill now before noble Lords, the Learning and Skills Council referred more than once to poor provision being “cut out”. You can almost see the Learning and Skills Council salivating at being given this power.

We too want to see the highest standards in our colleges, but if there is a need to intervene to remove a principal or members of the governing body, the power to do so should reside with the Secretary of State. Members on these Benches feel that these clauses are a significant step in the wrong direction and therefore would like to see them removed entirely. When it comes to the appropriate time, I shall seek the opinion of the House.

My Lords, can the Minister identify any other body in the educational sector that is a funding organisation but assumes a regulatory and disciplinary role? Those are two totally different functions that ought to be separated completely. I agree entirely with the views expressed in the last two powerful speeches. These powers should remain with the Secretary of State.

My Lords, I should like to speak briefly on Clause 17, and I declare an interest as chief executive of Universities UK. Like other noble Lords, I do not see the need for these provisions and do see the very strong arguments against introducing such potentially draconian micromanagement. In my view, governing bodies must retain overriding responsibility for the good management of their institutions, including the appointment and dismissal of senior staff. It is odd and incongruous that the Government should want to introduce the measures in Clause 17 at the same time as giving colleges substantial new responsibilities such as those set out in Clause 19.

Given that the debates about Clause 19 have somewhat polarised opinion in the further education/higher education sector, I want to use this opportunity to stress that, despite opposition among university vice-chancellors to Clause 19, I share their widespread admiration for the work of the further education sector and the contribution it makes to education, including higher education, in the United Kingdom. So I too would like to see Clause 17 removed and therefore support Amendment No. 34, in the names of the noble Baronesses, Lady Morris of Bolton and Lady Verma. If that approach is not successful, I would certainly support the measures proposed by the noble Baronesses, Lady Walmsley and Lady Sharp of Guildford, in Amendment No. 26 as a sensible compromise.

My Lords, in response to the noble Lord, Lord Walton, there are other bodies in education that have both regulatory and funding functions. Local education authorities, which fund and regulate nearly 24,000 schools in England, are both regulatory and funding bodies for those schools. The powers in these provisions are similar, in respect of objective failure and serious underperformance, to those that apply to schools at the behest of local education authorities in England.

We have had substantial discussions on Clauses 17 and 18—

My Lords, surely the responsibility for disciplining and removing teachers in schools now rests with the general education council?

My Lords, where a local education authority exercises its powers to suspend a failing school’s delegated budget, it becomes the direct employer of the staff and can take decisions, including on the employment of teachers. The powers are comparable. However, I cannot stress too greatly, in response to the noble Baroness, Lady Morris, that these are in extremis powers to be used in cases of objective failure and underperformance. The autonomy of governing bodies to sustain failure, which is essentially the noble Baroness’s case, would not be supported by the Government or, I hope, by the noble Baroness on reflection.

We are talking about cases of failure and underperformance that are demonstrated in inspection reports and are objective. We are not talking about any discretionary power to intervene that would undermine the proper autonomy and freedom of governing bodies of institutions that are running well to conduct that institution’s affairs. I hope that the distance between us is narrower than the noble Baroness portrayed. She was presenting a great point of principle that I do not believe pertains. If she were sitting where I am and had to take decisions about institutions that are failing and therefore offering a substandard education to their students, I am not sure that she would see it so much in terms of the absolute principle that she has set out.

I understand that there are strong feelings because the powers, if exercised, are draconian. I would like to reassure the House that they would be used only in extremis. I would also like to speak to our Amendments Nos. 27 to 33 and 35 in this group, which, as the noble Baroness generously acknowledged, go some way to meeting the concerns set out in Grand Committee.

My amendments would ensure that the failure policy under which the Learning and Skills Council is operating is approved by the Secretary of State and laid before the House. We believe that there will be proper accountability for the overall policy under which the Learning and Skills Council acts in this area. It is already accountable to the Secretary of State for a comprehensive framework that includes quarterly ministerial reviews and a performance forum that charts progress against annual targets. As I stressed, the amendments that I am moving will, over and above that, require the Secretary of State formally to approve and to lay the statement of intervention policy before each House of Parliament, which will further increase transparency and accountability.

As the noble Baroness, Lady Walmsley, rightly said, cases of outright failure are extremely rare; nevertheless, we want to address more effectively and efficiently any such instances and those of inadequate provision. That is the reason for these powers. However, when it comes to intervening, in all cases the LSC will raise any concerns with the institution’s chair of governors and college principal and agree an appropriate way forward. Regardless of the scale of concern, the LSC will issue a notification to the institution setting out the agreed action arising from the initial discussion and monitor progress against that notification. In more serious cases a formal notice to improve will be issued, specifying the required improvements and a timescale of no more than 12 months to secure them. We believe it is right that providers have the opportunity to improve before any formal intervention takes place. That is another stage that has to be gone through before the formal intervention powers set out in the Bill could take effect.

In cases of outright failure, where insufficient progress is made against the agreed improvement plan, and where the college is unable to demonstrate that it has the capacity and capability to bring about improvement, the LSC could consider the use of powers under Clause 17. Those powers might also be considered in exceptional circumstances where there is immediate and significant risk, such as fraud. The notice will specify any immediate action; for example, a direction to remove the chair of the governing body or to dismiss a specified senior member of staff. I stress, though, that the use of these powers must be relevant and appropriate in the given circumstances. The intervention policy that will be developed to set out the procedures will illustrate the circumstances when it would be appropriate to consider the direction to dismiss a senior office-holder.

I stress again that these powers will not be unfettered. As a result of the government amendments I have just spoken to, the Secretary of State must approve the intervention policy. He will also retain the power to direct the LSC itself, should that be necessary. In addition to these powers, the LSC continues to be accountable to the Secretary of State through the comprehensive accountability framework.

The judgment made on failure or unsatisfactory performance will not be imprecisely defined. The LSC’s published intervention policy will make clear precisely what is meant in practice. The precursor to that document, Identifying and Managing Underperformance, which I have made available to noble Lords, refers to providers who have been awarded a grade 4 by Ofsted inspectors, which is the most unsatisfactory inspection grade, and to situations where an area of provision is deemed to be unsatisfactory or where the LSC’s analysis of learner success rates shows that more then 25 per cent of provision falls below the minimum level of performance. The definitions we have in place now, as set out in the guidance document Identifying and Managing Underperformance, will, no doubt, be extensively debated during the consultation process that the LSC will be required to conduct as a result of government Amendment No. 29. We will take full account of the consultation undertaken as a result of that amendment.

We expect that, in the vast majority of cases where failure is identified under the procedures I have just set out, the governing body would take the necessary action to improve performance before any intervention was needed. The LSC would continue to work with the governing bodies and to respect their autonomy during that process. I also reassure noble Lords, and reiterate for the record, that the LSC would only be able to direct dismissal where the governing body already has the power to dismiss under its own articles of association, so the role of the LSC would be akin to that of a local authority in a case of extreme failure on the part of a school. The corporation of the institution, which is normally the governing body, being the employer of the staff in an FE college, would continue as the employer, and this would not change that relationship.

Where the LSC has invoked its power to direct a governing body to dismiss a member of staff, there will be a very clear evidence base for such a decision. That should provide sufficient evidence for governing bodies to successfully defend any claims of unfair dismissal under employment law. The Secretary of State’s retention of the powers to direct the LSC where he is satisfied that it would be appropriate to do so is also important in this matter.

The noble Baroness, Lady Morris of Bolton, wished to press the principle of Clauses 17 and 18. I entirely respect her decision. However, on the point by the noble Baroness, Lady Walmsley, if Clauses 17 and 18 remain in the Bill, we would be prepared to look sympathetically at her Amendment No. 26, which sets out a requirement for a further formal statutory process to be gone through. We would consider bringing back amendments at Third Reading to ensure that there is a further, formal statutory process whereby the principal of a college of further education has to be written to, along with the governing body, by the Learning and Skills Council. We would further require that that report must set out in writing, at the beginning of the process of intervention, the Learning and Skills Council’s concerns.

I have given a good deal of reassurance about how these powers will be exercised. As I say, they are for cases of extreme failure. In that context, I hope that the House will feel able to continue to support Clauses 17 and 18.

My Lords, the Minister’s Amendment No. 38 provides that Welsh Ministers must prepare a statement of their policy and so on, but it makes no reference to the necessity to secure approval from the Assembly for the statement.

My Lords, my understanding is that they would need to secure that approval. I need to come back to the noble Lord to explain precisely what the arrangements would be.

My Lords, I am grateful for the Minister’s reply and for the support of the noble Baroness, Lady Morris of Bolton. I welcome the Government’s Amendments Nos. 27 and 33. The noble Lord, Lord Walton of Detchant, asked a question that was also asked in Grand Committee, when he was not in his place. The Minister’s reply was the same, and I will give the Minister the same response now: local authorities are elected bodies. That is our main objection to giving these powers to the LSCs—they are not elected bodies. The Minister asked the noble Baroness, Lady Morris of Bolton, whether she might think differently if she were sitting in his position. We accept that there are hard decisions to be made sometimes, but if I were sitting in the noble Lord’s position when these hard decisions had to be made, I would much rather recommend to the Secretary of State that he or she made those decisions than leave them to the unelected learning and skills councils.

Like the noble Lord, Lord Roberts of Conwy, I am concerned that the Assembly for Wales should have the same powers of review of this policy that Parliament has on the English side.

My Lords, I have now found the relevant page in my notes and can tell the noble Lord, Lord Roberts, that Welsh Ministers must consult as appropriate when preparing or revising their intervention policy statement. They must lay the document before the National Assembly for Wales and publish it. The Assembly will play a formal part in the process.

My Lords, it is in my explanation of the various amendments. I cannot point to the precise place, but I assure the noble Lord that it is there.

I am relieved to hear it, my Lords. As a resident of Wales, I would be drummed out otherwise.

I am most grateful to the Minister for his comments about Amendment No. 26 and the Government’s undertaking to look kindly upon it, should Clause 17 remain in the Bill. In the light of his words, I will not press any of my amendments today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 24 to 26 not moved.]

27: Clause 17 , page 12, line 33, leave out “and publish”

28: Clause 17 , page 12, line 35, at end insert “, and

( ) if it considers it appropriate in consequence of a review, prepare a revised statement of its policy.”

29: Clause 17 , page 12, line 35, at end insert—

“(1A) When preparing a statement or revised statement of its policy, the council must—

(a) undertake such consultation as it thinks appropriate; (b) consider any representations made to it about the policy to be set out in the statement.”

30: Clause 17 , page 12, line 37, leave out “subsection (1)” and insert “subsections (1) and (1A)”

31: Clause 17 , page 12, leave out lines 41 and 42

32: Clause 17 , page 12, line 42, at end insert—

“(4A) The council must send a copy of the statement or revised statement prepared by it to the Secretary of State.

(4B) If the Secretary of State approves it he shall lay a copy of it before each House of Parliament.

(4C) The council must publish—

(a) the statement of its policy approved by the Secretary of State; (b) where the Secretary of State approves a revised statement of its policy, the revised statement.”

33: Clause 17 , page 12, line 43, leave out “its policy” and insert “the statement most recently published under subsection (4C)”

On Question, amendments agreed to.

34: Clause 17 , leave out Clause 17

The noble Baroness said: My Lords, while I thank the Minister for his usual courtesy and reassurances, we believe that this clause sends out the wrong message, and I would like to seek the opinion of the House. I beg to move.

Clause 18 [Intervention: Wales]:

35: Clause 18, page 13, line 16, leave out “follows” and insert “set out in subsections (2) and (3)”

The noble Lord said: My Lords, I am not sure that these amendments will still apply, but I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 36 and 37 not moved.]

38: Clause 18, page 13, line 32, at end insert—

“( ) After section 57 of FHEA 1992 insert—

“57A Intervention policy: Wales

(1) The Welsh Ministers must—

(a) prepare a statement of their policy with respect to the exercise of their powers under section 57, (b) keep it under review, and (c) if they consider it appropriate in consequence of a review, prepare a revised statement of their policy. (2) When preparing a statement or revised statement of their policy, the Welsh Ministers must—

(a) undertake such consultation as they think appropriate; (b) consider any representations made to them about the policy to be set out in the statement. (3) The Welsh Ministers must lay before the National Assembly for Wales a copy of any statement or revised statement prepared by them under this section.

(4) The Welsh Ministers must publish any statement or revised statement prepared by them under this section.

(5) The Welsh Ministers must have regard to the statement most recently published under subsection (4) in exercising, or deciding whether to exercise, any of their powers under section 57 in relation to an institution.””

[Amendment No. 39, as an amendment to Amendment No. 38, not moved.]

On Question, Amendment No. 38 agreed to.

40: Clause 18, leave out Clause 18

The noble Baroness said: My Lords, I have already spoken to the amendment. I beg to move.

My Lords, I do not propose to divide the House because the clause refers to the same powers in respect of Wales as the noble Baroness has already moved be deleted in respect of England. We will therefore allow the amendment to proceed.

On Question, amendment agreed to.

Clause 19 [Power to award foundation degrees]:

41: Clause 19, page 14, line 18, at end insert—

“( ) In subsection (5) (powers comprised in the power to grant awards), for “Any” substitute “Subject to subsection (5A) below, any”.

( ) After subsection (5) insert—

“(5A) An order under subsection (1) above specifying an institution as competent to grant in pursuance of this section only the kind of award mentioned in subsection (2A) above may provide that the institution’s power to grant such awards does not include the power described in subsection (5)(a) above.””

The noble Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 42 and 44. The amendments relate to Clause 19, which concerns the foundation degree-awarding powers of further education colleges.

There have been many hours—indeed, days—of discussion in and outside the House on Clause 19. These government amendments reflect those long discussions. I hope that they will enable us to establish a consensus across the House and I thank all noble Lords who have helped us to find a good way forward, including both opposition Front Benches. Perhaps I may mention also John Hayes, from the opposition Front Bench in another place, my noble friend Lady Warwick and her colleagues in higher education, including many Members of this House, and the noble Lord, Lord Dearing, who I know will speak after me to Amendment No. 43.

In our discussions, my honourable friend the Minister for Lifelong Learning, Further and Higher Education and I have reflected on three issues in particular, in relation to which we are now proposing amendments to Clause 19. The first issue is whether further education institutions should be allowed to authorise other institutions to award foundation degrees on their behalf. The second issue is whether the use of the new foundation degree-awarding powers should be subject to scrutiny after a fixed period. The third is whether there should be a formal review of the effects of FE colleges awarding their own foundation degrees.

In all our discussions, the needs of learners and quality control have been paramount. We must take every precaution to protect not only the proud reputation of the UK’s higher education brand, but also the prestige of the foundation degree both at home and abroad. We have worked closely with the Quality Assurance Agency in drawing up a draft criteria document, which has been made available to your Lordships. The document is a cornerstone of our rigorous quality assurance mechanism and will form the basis of the QAA’s assessment of any further education institution in England applying for foundation degree-awarding powers.

The criteria are rightly stringent. They are based extremely closely on the existing standards for institutions applying for award-making powers, supplemented by additional criteria that are tailored specifically to the foundation degree qualification. These additional criteria include the requirement for an applicant institution to have no fewer than four consecutive years’ experience, immediately preceding the year of application, of delivering HE programmes at a level equivalent to the foundation degree.

It has been commented that the proposals will jeopardise existing relationships between further and higher education institutions and that this will in turn have adverse consequences for learners. I stress that there is no intention whatever of endangering existing partnerships, especially where these are working well. While some FE institutions will seek foundation degree-awarding powers because that will meet and respond to local demand from employers and learners and because the development of higher-level skills provision is at the heart of the institution’s core skills mission, they will still want to maintain—indeed, to develop—their collaborative arrangements with higher education institutions. Others will want to maintain the existing validation arrangements in delivering foundation degrees because that arrangement suits the local demand. This is about choice. We regard all these different arrangements as being equally valid.

In this respect, we are entirely sympathetic to the spirit of the amendment of the noble Lord, Lord Dearing. We agree with his emphasis on the importance of the student voice and the need to ensure that the interests of learners are protected and promoted. Furthermore, we entirely share his desire to protect the excellence of the UK’s higher education brand. The requirement to consult the student body will be written into the criteria that will form the basis of the Quality Assurance Agency’s assessment of a further education institution that is applying for foundation degree-awarding powers. Paragraph 4B of the current draft of the criteria document states:

“We propose that an application will not be considered unless the college has consulted its students about whether it should seek to acquire Foundation Degree Awarding Powers”.

It is quite right that the views of the students are taken into account. Inserting this requirement into the criteria, which will be used to determine whether an institution should be recommended for foundation degree-awarding powers, is the most appropriate way of achieving that end and will secure the objective that was rightly set out by the noble Lord, Lord Dearing.

We fully agree with the noble Lord’s wish to ensure that transparent and articulated progression routes are available to all learners. This issue, too, is dealt with comprehensively by the draft criteria for foundation degree-awarding powers. Paragraphs 28 to 34 of Section 3 of that document set out the requirement for articulation agreements to be a core feature of all foundation degree programmes. Articulation agreements are the means by which students studying for a foundation degree can identify routes for progressing to further higher-level study, typically the completion of an honours degree, either at the institution awarding the foundation degree or elsewhere.

Furthermore, we have published Foundation Degrees: Ensuring Progression, a note that sets out the detail of how articulation arrangements currently work, how they are communicated to learners, and remedial actions that are available in cases where problems arise. This note will be incorporated into the next iteration of the criteria document, but, for now, it may be useful to expand on the main points.

Articulation agreements identifying progression routes for learners who wish to progress from a foundation degree to further higher-level study are a matter for institutions themselves. All foundation degree providers within the FE system currently have such agreements with providers of honours degrees and they will continue to do so regardless of whether they are awarded their own foundation degree-awarding powers. Therefore, Clause 19 will in no way diminish the importance placed on clear progression routes for learners.

The current arrangements work well, with institutions collaborating in the interests of their students. However, a safeguarding role is also played by the Quality Assurance Agency. The criteria that the QAA will use to assess an institution’s application for foundation degree-awarding powers include, as I stated a moment ago, detailed guidance on the need for an applicant to demonstrate that it has identified and publicised,

“clear routes that facilitate opportunities for successful progression from Foundation Degrees towards another qualification”.

If an institution has not made adequate provision in this respect at the time of submitting an application for foundation degree-awarding powers to the QAA, it will not be able to satisfy the criteria and will not be recommended for the new foundation degree-awarding powers. Put quite simply, articulation agreements will be absolutely essential if a further education institution is to be recommended for foundation degree-awarding powers. It is also critical that both FE and HE institutions promote the articulation arrangements to their learners. Foundation degree students need to identify clear and viable progression routes should they choose to make their foundation degree a stepping stone to further higher-level study, which would typically be the completion of an honours degree. For this reason, the QAA benchmark statement, which will be incorporated into the criteria for foundation degree-awarding powers, clearly says:

“The identification of explicit progression arrangements should be available to learners on foundation degree programmes through course handbooks and prospectuses”.

I believe that the system delivers good articulation. There are clear incentives for providers in both sectors to offer progression and our proposals do not change these. Lifelong learning networks, which bring partners together to provide progression both into and through higher education, reinforce these incentives. If one looks at college and university prospectuses, one immediately notices the emphasis that is given to foundation degrees as a pathway to honours programmes, as well as a valuable qualification in their own right.

Both further and higher education institutions already promote these opportunities to their prospective students through course documentation, and it is in the interests of institutions, if they want to continue to attract students, to take a positive approach to advertising such opportunities. Furthermore, organisations such as lifelong learning networks and Foundation Degree Forward have an important role to play in clarifying and strengthening progression routes into and from foundation degrees. For example, Foundation Degree Forward produces best practice guidance for HE and FE institutions about the promotion of articulation to students.

When the QAA periodically returns to an institution to carry out an audit, it will again scrutinise the ways in which progression routes are identified and promoted to foundation degree students. If the institution is deemed inadequate in this respect, it will not achieve a judgment of broad confidence from the QAA. A judgment of limited confidence or no confidence would have serious adverse consequences for an institution’s reputation and, for this reason, the self-regulating system that operates at present is effective and sustainable.

The amendment proposed by the noble Lord, Lord Dearing, also raises the issue of whether an institution that is granted the new foundation degree-awarding powers should then be able to delegate those powers by authorising another institution to award foundation degrees on its behalf or to accredit another body to provide courses leading to a foundation degree. The Government have full sympathy with the intention behind this part of the noble Lord’s amendment—the desire to see that standards are maintained. These are concerns that I share. For this reason, as I shall explain, we have proposed Amendments Nos. 41 and 42, which address this issue.

Finally, we propose to give clear advice to the Privy Council that foundation degree-awarding powers should be granted for an initial time-limited period of six years. We do not believe that it would be appropriate for a further education institution applying for foundation degree-awarding powers for the first time to be granted those powers in perpetuity. Our recommendation is that the powers should be granted for an initial probationary period, which would allow the further education institution to establish a strong track record in the delivery of high-quality foundation degree programmes before it is given the power to continue awarding those degrees.

Once this probationary period has been completed to the satisfaction of the QAA, the institution may apply for the powers to be renewed. I should make it absolutely clear that it will not necessarily be a case of an FE institution having to reapply for its powers every six years; when the initial probationary period has been served and the QAA is satisfied with the institution’s provision, its foundation degree-awarding powers can be granted indefinitely by the Privy Council. The noble Lord, Lord Dearing, suggested that a probationary period of four years rather than six should be time enough to determine whether all is well or whether problems have arisen. Your Lordships may be aware that, when we made it possible in 2004 for private providers of HE to obtain degree-awarding powers, we said that these powers should be awarded for periods of six years. We do not feel that a shorter period of award for high-performing further education institutions would be right in the light of this. I am sure that the noble Lord, Lord Dearing, will be alive to that comparison.

We fully intend that, as well as the initial assessment by the QAA to ascertain whether they are competent to award their own foundation degrees, FE institutions that obtain foundation degree-awarding powers will be subject to an interim review during their six-year probationary period. In consultation with the QAA, which shares our view on the importance of regular quality reviews, we are considering when these interim reviews should take place.

Amendments Nos. 41 and 42 address the issue of whether FE institutions should be allowed to authorise other institutions to award foundation degrees on their behalf—an issue that has been loosely referred to as “franchising”. I hope that these amendments will address the concerns raised in Grand Committee by the noble Baronesses, Lady Sharp and Lady Walmsley, my noble friend Lady Warwick and the noble Lord, Lord Dearing. As I explained, it is envisaged that, when a FE institution first applies for powers to award foundation degrees, it will be granted these powers for an initial probationary period of six years.

Amendments Nos. 41 and 42 reflect the helpful advice that we have received from the QAA on this matter. Amendment No. 41 proposes to amend Section 76 of the Further and Higher Education Act 1992 so that the Privy Council has the power to specify, in an order granting a further education institution foundation degree-awarding powers, that the institution’s power to grant foundation degrees does not include the power to authorise other institutions to do so on its behalf. We are seeking to place controls on FE institutions applying for foundation degree-awarding powers where their students undertake a significant proportion of their foundation degree provision at another FE institution that does not have those powers.

We considered best how to achieve this. We have opted for an amendment to Clause 19 and further changes to the criteria that the QAA will use to assess an application for foundation degree-awarding powers. Dealing with the matter entirely in primary legislation could leave us with an arrangement that lacked flexibility. For example, a statutory provision preventing further education institutions from awarding foundation degrees unless they had provided the majority of the course could restrict the ability of FE institutions with foundation degree-awarding powers to offer foundation degree courses that include a significant work-based element where training is provided by an employer. Foundation degrees are, by their nature, work-focused higher education qualifications that do not necessarily conform to any specific delivery model. Work-based learning and employer involvement in the design and development of foundation degrees is positively to be encouraged. I should it make clear that, whatever proportion of a foundation degree is taught in the workplace, responsibility for the quality of provision lies with the awarding institution.

We have therefore settled on Amendment No. 42, which amends Section 76 of the 1992 Act so that the Privy Council also has the power to specify in an order that the institution cannot grant a foundation degree to a person who was not enrolled at the institution at the time he completed the course of study for which the foundation degree is granted. This amendment should be considered in conjunction with further changes that we now propose to the criteria against which an applicant institution will be assessed. The QAA will not recommend an FE institution for foundation degree-awarding powers if that institution’s foundation degrees are being taught largely by another FE institution that does not itself have those powers. This will be spelt out in the criteria that the QAA will use. I recognise that the draft criteria document that we published on 14 February does not fully reflect this point, and I undertake that the next version, which we intend to publish very shortly, will do so. I should add that in all this we are working closely with our advisers on quality in the QAA.

Until now, when degree-awarding powers have been granted under the 1992 Act, they have automatically included the power to authorise another institution to award degrees on one’s behalf, and there has been no requirement that recipients of degrees from the institution with degree-awarding powers must be enrolled at that institution. The power to specify these restrictions in an order granting foundation degree-awarding powers will lie with the Privy Council. However, in advising the Privy Council, the Secretary of State will act on the basis that it is inappropriate, in the first instance, for an order granting foundation degree-awarding powers to a further education institution to permit the institution to authorise other institutions to award its foundation degrees, or for those foundation degrees to be awarded to students not enrolled at the institution with foundation degree-awarding powers. This is not a position dependent on the strength of any individual college’s application. Rather, it is an acknowledgement that without this restriction there could be unacceptable risks to the perceived quality of the UK degree brand.

As we have made clear in the published draft criteria, our advice will be that the Privy Council, in the first instance, should grant foundation degree-awarding powers to an FE institution for a fixed period of six years. At that point, it will be open to the institution to apply to have the powers renewed. At that point in the process, the Secretary of State may decide to advise the Privy Council that, as well as being renewed, the powers should be upgraded to allow the institution to authorise other providers to award its foundation degrees, and to award foundation degrees itself to students enrolled elsewhere. By this time, the FE institution will have had the opportunity to establish a track record not only as a provider of higher education, which it must already have been in order to be considered for foundation degree-awarding powers, but also as a body able to award its own qualifications.

We believe that, by this time, it will be possible for the leading HE providers in the further education sector to be granted the full foundation degree-awarding powers, without risk to the immensely important UK higher education brand. However, if a college has completed its six-year probationary period and there is still concern about the reputational risks arising from the upgrade of its powers, there is no requirement for such an upgrade to take place.

It is conceivable that an FE institution might wish to enrol a student and then make arrangements for a significant proportion of that student’s foundation degree provision to be delivered by another FE institution without powers to award foundation degrees. I stress that the representatives of colleges in the mixed-economy group have made it clear that this is not what they intend. I must be absolutely clear that an institution without foundation degree-awarding powers that was farming out its students in this way would not be recommended by the QAA for these powers.

Moreover, if a FE institution were granted foundation degree-awarding powers restricted to persons enrolled in the institution and were then found to be franchising out its foundation degree students, I would expect it to receive a limited confidence judgment in its QAA audit. In the event that, as would most probably be the case, those powers had been granted on an initial time-limited basis, the institution would certainly not successfully complete its probationary period and it would not be recommended for renewal of the powers. This will be made absolutely clear in the draft criteria against which applicant institutions will be assessed by the QAA. We intend to bring forward a further draft of the criteria document shortly, which will reflect this important change.

I should also make it clear that, once the QAA is satisfied that an FE institution is competent to exercise full foundation degree-awarding powers, it will be recommended to the Privy Council that the restrictions referred to in Amendment Nos. 41 and 42 be lifted. At that point, the FE institution will be permitted to use its foundation degree-awarding powers without any further restriction, just as higher education institutions with degree-awarding powers are currently able to do.

Amendment No. 44 addresses whether the use of the new foundation degree-awarding powers should be subject to scrutiny after a fixed period of time; that was another issue raised in our deliberations in Grand Committee. My honourable friend the Minister for Lifelong Learning, Further and Higher Education and I have given careful consideration to the points made about this issue. We recognise that Parliament and the public have a strong interest in understanding the practical effects of the use of these powers. We all share a common interest in ensuring continuing confidence in the quality standards of foundation degrees, wherever they are awarded.

We propose, therefore, that the Secretary of State should be placed under a duty to lay a report before Parliament on the effects of Clause 19, which gives the Privy Council the power to grant FE institutions in England the power to award foundation degrees. This report, which is encompassed by Amendment No. 44, is to be laid within four years of Clause 19 coming into force. We believe that that is a further significant step towards meeting concerns raised in Grand Committee.

I have spoken at length because the issues involved are important and complex. We believe that the changes that we have made go a significant way towards meeting the concerns raised by noble Lords in Grand Committee and those encompassed by the amendments of the noble Lord, Lord Dearing. I commend them to your Lordships, and I beg to move.

My Lords, I shall speak to Amendment No. 43, which is in this group. I am in the unusual position of listening to a 20-minute reply to amendments I have tabled but not argued for. I am most grateful to the Minister—I am overwhelmed. If I may, I will take all four elements of my amendment. The first was that students must be consulted before an application is made for foundation degree-awarding powers. What the Minister said is excellent. It is a necessary condition for the award of powers that this consultation takes place. I take it that it is implicit in that provision that the outcome of that consultation will be notified to the QAA when it considers the application. I am well satisfied on that.

The final part of my amendment—I will leave the two more difficult points until last—concerns a review after four years. The Minister explained why he has gone for six years—there is a precedent, but I have chosen another precedent for my four years. I am reassured, however, by the knowledge and his assurance that there will be an interim review after some unspecified period—probably around three years. That means that he has gone a long way towards my view that there needs to be an early review. I am well content to accept what he has said.

I turn to the more difficult elements: one was franchising and the other was progression. On franchising, the Minister said that there has been some further thought about the information given in, I think, Section 8 of the notes that were circulated on 14 February. It provided that most of the learning had to take place in the institution that had the degree-awarding powers. He has now moved away from that to provide for those cases where much of the learning takes place in a company. I believe that there are a number of such cases where most, if not nearly all, learning takes place in a company. I think the Minister was saying that the “most” criterion now applies to an institution of further education that does not have degree-awarding powers. I can understand that, but I would like to read carefully what the Minister said. If a large proportion of, or “most”, learning is delivered in a company, I would be concerned if it were still permissible for some other part of it, say a quarter, to be delivered by a FE college without degree-awarding powers. I recognise that the Minister is making a substantial response to my amendment on this—it is a case of looking at the detail.

I come finally to the issue of progression. I attach great weight to this for two reasons. First, because it concerns something worked for and paid for by a student in an FE college; it is called a foundation degree. We know now that 54 per cent of students progress from that to an honours degree. It is, therefore, essential to them that there should be this opportunity for progression. There should be no doubt about it that an FE college has a progression agreement with at least one higher education institution, and that the criteria should extend beyond bare existence of some such thing. It should be attainable, as an additional commitment to study, in some recognised, maximum period. One does not want to have to take two or three years to do the final year. I see in the notes that we were given that 1.3 years is regarded as a maximum—that seems right.

I want to be absolutely clear about the intention of the Government. In his speech, the Minister said that the QAA has to be satisfied, at the time of submission, that the college has such an arrangement.

We know that there are 700 foundation degrees under development. That is at the moment, and there will be hundreds more as time progresses. I want to be absolutely clear that the requirement applies not only to those that were being offered at the time of the application but will apply to any that are offered by the college at any time in the future. That seems fundamental.

There is a second reason why I think this matter is important. The first reason was to do with a fair deal for the student. The second is to do with the assurance of quality. It is an assurance to me that the FE college must have an arrangement with an institution of higher education before it can offer a foundation degree. That seems to me a very important assurance that this foundation degree is of the nature of a degree in higher education in the United Kingdom. That is very important to every institution and to the nation given, as we recognised, the importance of the brand, which is not only worth billions of pounds a year in foreign exchange earnings but in attracting a good share of the ablest people in the world into our institutions. I see this as an assurance and one that I want to see going beyond the six years. As I understood what the Minister said, there will be a thorough check after six years, but thereafter it will be within the powers of the Privy Council to give an indefinite award. I want to be sure that when that happens, it is nevertheless a requirement that there should be an articulation arrangement with at least one university for every course; otherwise, the student will be short-changed and will be at risk.

I am concerned about this being a thin end of a wedge. Things do not stand still. As I recall, the polytechnics served an apprenticeship of 20 years to get their degree-awarding powers. Until then, they were under the guidance of the CNAA. But they got those powers. Now we have a situation in which it was decided that there should be foundation degrees, but from a university even though they are delivered by an FE institution. Now we are moving on to say, “No, they will do it in their own right”. I am concerned that we shall move on from that to say, “Why should they not move to the full degree and become fully institutions in which a student can pursue the whole course in one place?” I can see advantages in that, but it changes the mission of the further education colleges. I am deeply concerned that they should stay with their mission because they constitute an engine room for skills for the whole economy. It is a natural aspiration for people to want to move up market, but we need people who concentrate on the engine room rather than go on to the bridge; they drive the ship.

I am well content with what the Minister said on my amendment with regard to the students’ voice and the review. I listened to what the Minister said on the other two points. He has gone a long way to meet me. I should like to read precisely what he said on franchising; I hope to be fully reassured.

On my last point on articulation, which I saved to the end, this is an enduring concern which goes beyond six years. It is an issue on which I may ask the House to listen to me again at Third Reading.

My Lords, I can hardly believe that it is 14 years since the publication of the report of the Hamlyn Foundation’s National Education Commission, which I was privileged to chair. At that time we were very concerned about a number of issues relating to higher and further education. There has been a series of major developments since that time which are to be warmly commended. One of the things that we recommended at the time was the establishment of learning and skills councils. We also recommended that there should be a progressive move to a greater degree of parity of esteem as between academic and vocational qualifications. The further education sector has done a wonderful job in those intervening 14 years in providing proper standards of vocational education for many individuals who would not otherwise have benefited from that kind of educational experience.

But it is fair to recognise that there is considerable anxiety—which I know will soon be articulated by the noble Baroness, Lady Warwick—in the university sector about the powers which this clause will now grant to further education colleges. The foundation degree launched in 2001 was always intended to provide a vocationally focused and academically rigorous route into higher education with built-in progression opportunities for foundation degree students who wanted to progress to honours degree level. There has been a rapid growth in foundation degree delivery, largely achieved through extensive and successful collaboration between higher and further education institutions. The universities have pointed out that more than 60,000 foundation degree students were registered by 2006 but that no university provided validation of those degrees without also providing tuition either directly or through a franchise agreement. The problem that I see with this clause is that it is likely to break, or at least to have the possible effect of breaking, that crucial link. Many universities are concerned that progression to higher education will be adversely affected and that higher education institutions will have less incentive to articulate foundation degrees with honours programmes, thus undermining the excellent progress that has been made towards building ladders of progression through lifelong learning networks.

FE colleges do not currently have the power to award any other nationally recognised qualifications in their own right but only through recognised awarding bodies such as City and Guilds and BTEC. This clause will create an anomaly whereby FE colleges will be able to award HE-level qualifications but not those at FE level. Many HEIs have invested heavily in building collaborative relationships with FE colleges. These may be put at risk if they are in competition with each other over foundation degree programmes. I and many others who have a lifetime’s involvement in the university sector have concerns about the whole principle articulated in Clause 19. The noble Lord, Lord Adonis, put the case very well and was very persuasive but I still cannot overcome those reservations about awarding foundation degree-awarding powers to FE colleges, whatever work the Quality Assessment Agency undertakes before they are given that power. I have concerns about the principles in Clause 19.

My Lords, I thank the Government, the Minister, and in particular Bill Rammell for the genuine efforts that they have made over the past few weeks to listen to our concerns and those of interested organisations and for coming forward with amendments to address these points.

There is no doubt that the government amendments improve Clause 19 considerably and address many of the concerns of Peers and outside groups. The draft guidance and explanatory material that the Government recently provided has informed and advanced the debate in many areas.

We are very happy that the Government have decided to accept our recommendation that a report is laid before Parliament four years after the powers in this clause are implemented. This will give us an opportunity to scrutinise whether these safeguards have been sufficient, and to consider whether more are needed, or whether the proposals we are looking at today are enough. That will also do much to reassure people that the Government’s commitments on secondary legislation, which were given today and at other stages, are being effectively implemented. One of these ensures that the Privy Council will specify that further education institutions may only award foundation degrees for a period of six years before undergoing a comprehensive review by the QAA, prior to being considered suitable for awarding these powers in perpetuity. This review is critical and I would welcome any additional assurances that the Minister can offer on the rigour and thoroughness of the review. It is necessary to maintain the standards of foundation degrees and to ensure their continuing credibility in the eyes of students, employers and the higher education institutions that the students will, I hope, progress on to.

Similarly, we are glad that the Government have tabled amendments to allow the Privy Council to restrict the abilities of further education institutions to accredit foundation degrees in other institutions. This franchising of the accrediting power has caused real concern, because of the enormous damage it could do to the foundation degree brand in a short time. Again, the Government’s reassurances that these powers will not be given until an institution has successfully completed its six-year review period will do much to restore faith in this clause.

However, there is still one point on which we do not believe the Government have fully appreciated the strength of feeling. It has already been mentioned in other speeches: the relationship between higher education and further education, and progression from one end to the other of a foundation degree. The Government have assured us that they understand that this is one of the principal motivations for students undertaking a foundation degree, and have given some assurances about the continuing importance of articulation agreements between higher and further education, in order to ensure a good fit between the courses. On these Benches, we do not believe that it is enough.

We fully support the principle behind proposed new subsection (6B) in the amendment tabled by the noble Lord, Lord Dearing, in his amendment on this clause. Putting the continuing progression from foundation degrees to honours degrees in the Bill is a necessary step for maintaining important relationships and to ensure the further success of foundation degrees. An unequivocal sign that a foundation degree is a higher education-level qualification, with commensurate standards of course content, teacher quality and the chance to convert the qualification into a level 6 honours degree, with the equivalent one more year of full-time study, is indispensable. Without this safeguard, this clause could still lead to the eventual development of two tiers of foundation degree, with those awarded by a higher education institution being considered more credible than those awarded by a further education college. This is something that must be guarded against at all costs.

To put a requirement for ensuring progression in the Bill will introduce nothing that the Government have not already committed to in secondary legislation, but will address one of the last serious concerns that we on these Benches, and many elsewhere, have. I hope that the Minister will be able to continue in the spirit of engagement with this debate, and will ensure us that he will consider this point and bring back an amendment that encapsulates this principle at Third Reading.

One of the great pleasures of debating this Bill has been speaking to many wonderful people whom we have in the further education sector. I have spoken to a number of principals, who say that you have to be aware that people going into foundation degrees are working, and studying part-time. Quite often, they will finish the foundation degree, probably be quite tired and therefore will not continue immediately. Or, because they have a foundation degree and work for a big company, they may be transferred elsewhere and not go back to the university where they had the original articulation agreement. It is important that those points are taken into consideration. I hope that everybody from the universities will recognise that. We are dealing with a very different kind of student, and it is important to encourage them as much as possible to go into higher education.

Although I understand the desire to consult students, there is some concern in further education colleges over which students will be consulted. Will it be those who are already doing foundation degrees, or those who are doing other things, but may think about going on to degrees? Will this consultation be binding on the council of governors? It is very important that when a further education college has gone to a great deal of work and effort to put something in place, it cannot be overturned at a whim by somebody who may not even consider going on to do a foundation degree.

I would also like the Minister to clarify something for the Association of Colleges’ sister organisation in Wales, fforwm. There was some confusion during the debate in the Welsh Assembly on this Bill as to whether Clause 26 was sufficient to allow the Welsh Assembly to enact similar legislation to enable Welsh colleges to award their own degrees. Although many Welsh Assembly Members thought that it would be, surely the Welsh Assembly has not been given the power to amend the Further and Higher Education Act 1992, and so has no ability to extend the Privy Council’s remit to cover Welsh further education colleges. Is this the case and, if so, can the Minister explain why the Government have not thought it necessary to extend the same potential to Welsh colleges as they have to English colleges—or, indeed, have they overlooked that?

My Lords, I rise to support Amendment No. 43, tabled by the noble Lord, Lord Dearing, and to welcome Amendments Nos. 41, 42 and 44, tabled by the Minister. In so doing, I declare my interest as chief executive of Universities UK.

Since the Bill was published I have greatly appreciated the way Ministers and noble Lords from across the House have been willing to engage in really constructive debate about how Clause 19 could be improved. I do not want, at this stage in our debate, to rehearse the reasons I gave at Second Reading for believing that the measures in Clause 19 are a mistake. We are where we are. I recognise that the real task before this House is to define the improvements to the Bill that will prevent unintended consequences, about which I—and many other Peers—have had concerns.

As the Minister said, the two issues that have become the focus of attention—and which have been reaffirmed by virtually every speaker—are addressed in Amendments Nos. 41 and 43, and relate to progression and the franchising of courses. I shall deal with franchising first. The Bill, as currently drafted, would give colleges that gain foundation-degree-awarding powers the right to validate courses delivered by other third-party institutions, both in the UK and abroad. The Minister has made some very welcome commitments on that front but, as I said earlier, further education colleges will be taking on primary responsibility for the quality and standards of their own foundation degree qualifications for the first time. To allow them to validate provision in third-party institutions at the same time would substantially increase the risks to reputation and quality management. The measures in Clause 19 already pose risks to reputation; therefore it is right to proceed cautiously.

It is clear from what my noble friend has said that the Government have accepted this. Indeed the Minister’s amendment gives the Privy Council the power to exclude the right to authorise other institutions to grant awards on behalf of an institution newly in receipt of foundation degree-awarding powers. In the package of information published on 11 February it is made clear—and the Minister reaffirmed this—that the Privy Council will be advised to apply this restriction for the first six years only. As I understand it, at the end of that period a college will have to re-apply for foundation degree-awarding powers and the Privy Council will be encouraged to grant unlimited powers, both in terms of time and the right to franchise their courses.

I very much welcomed what my noble friend said in presenting his amendments. I can see why the Government have done this, but I do not, on reflection, believe that it goes far enough. The Government have made it clear from the outset that they envisage only a small number of colleges, which already deliver a large volume of foundation degrees and have substantial experience in this area, gaining these powers. I cannot believe that it was intended that the further education sector should, at any stage, be able to establish consortia whereby a small number of colleges validate foundation degrees in a wide range of partner colleges, effectively cutting universities out of the loop possibly across a whole region. That could happen; indeed, we have heard reports that that is already the intention of a group of London colleges.

The point is that this could increase the likelihood of the foundation degree becoming seen as a signature FE qualification, and yet the Government chose to call it a degree because they wanted the explicit link with universities. The evidence from Foundation Degree Forward confirms the importance of this for prospective students and employers. Welcome though the Minister’s amendments are, as are his subsequent assurances, we need to go further and I support Amendment No. 43 of the noble Lord, Lord Dearing, which would exclude in perpetuity the possibility of franchising by FE colleges.

On progression, the other major issue with which we have been dealing, other noble Lords have emphasised the importance of students on foundation degrees having concrete options for progression on to honours-level study. Again, the Minister helpfully outlined how the Government intend to ensure that progression arrangements remain a key component of foundation degrees. That is enormously welcome but, again, it does not go far enough. I hope that the Minister will be persuaded in particular by the arguments of the noble Lord, Lord Dearing. They would make it a requirement that to successfully apply for foundation degree-awarding powers, a college must have secured agreements with at least one higher education institution to guarantee progression from all its foundation degrees to full honours level.

The Minister has said that that is already secured through the current requirements of the academic infrastructure and, therefore, putting such a detail into primary legislation would be unnecessary. However, given the importance of this issue, which others have emphasised—and I can only reaffirm—the strength of feeling on it, and that academic infrastructure could very easily be subject to change over time without reference to this House, it would be helpful to put the matter beyond doubt. If the Minister has no objection to the principle, which he has re-affirmed, that progression should be embedded in the criteria for gaining foundation degree-awarding powers, I hope that he will not object to making that explicit on the face of the Bill, as has been urged by the noble Baroness, Lady Morris, and the noble Lord, Lord Dearing.

Finally, and briefly, I welcome Amendment No. 44, which would ensure that the arrangements introduced by the Bill were subject to review after four years. I also welcome the statements in the material published by the Department for Education and Skills on 11 February to the effect that the draft criteria will be amended to time-limit the initial award of the new foundation degree-awarding powers to six years. Both steps seem eminently sensible.

I should like to record my thanks to the Minister for the way in which he has responded to our debates in Committee, has anticipated our arguments this evening and has given us further reassurances. We are making good progress and I hope that we can persuade him to go just a bit further on the issues of franchising and progression.

My Lords, we on these Benches have always supported the amendment of the noble Lord, Lord Dearing, and note with pleasure the Government’s intentions in relation to most of the matters within it. The guidance published in advance of this Report stage has been helpful. Noble Lords will note that we on these Benches have not re-tabled our amendments which sought to restrict award-making powers to particular courses or departments, given that we have been convinced during our consultations since Grand Committee that any college which reaches the quality required by the Privy Council would have sufficient internal quality control procedures to ensure that such a college was not likely to put on the market a degree from a weak department. The market would sort that out, anyway.

On progression, I shall not reiterate what has been said by three noble Lords, but we share their concerns. I have a feeling that there will be some chat about this matter between now and Third Reading, and we might come back to it. I am particularly keen on the ban on franchising in new subsection (6C) of the amendment tabled by the noble Lord, Lord Dearing. We believe that the whole matter of degree-awarding powers is a major step that should be carried out with extreme caution—a bit at a time and with appropriate safeguards. Therefore, we welcome Government Amendments Nos. 41 and 42 and the thought that the Government have put into making appropriate arrangements for work-based learning.

I note that new subsection (6D) in the amendment of the noble Lord, Lord Dearing, is a sort of probationary period and I welcome the statement in the guidance that a college would have to be reviewed after six years, rather than four. It seems appropriate that the number of years should be consistent across the sector. But, from the point of view of the student, to have a foundation degree from an institution which, at the end of the probationary period, lost the power to award degrees, would call into question the validity of the degree that the student had already obtained. Is there any way of safeguarding the quality of that degree during the probationary period, should the institution not retain degree-awarding powers after the six-year period? Perhaps a mentor university could be appointed that could guarantee the quality of the degrees awarded during the probationary period.

In the interests of the student, some though will need to be given to that if that happens, because not every college will get through its probationary period and go on to be given powers to award foundation degrees in perpetuity. At least one or two could very well not make it, and we need to think about the degrees obtained by such students. Can the Minister consider that idea?

My Lords, like other speakers in this debate, I am grateful to my noble friend the Minister and to the Minister of State for Lifelong Learning, Further and Higher Education for taking part in a number of conversations on how we might improve Clause 19. As the Minister knows, I am unhappy about the introduction of this change by the Government, but, as my noble friend Lady Warwick has said, we are where we are, the pass has now been sold and those of us who were against the principle now have to think about how we qualify the measure to ensure that damage is not done.

At this stage, we need to focus on the commitment made by the Government at Second Reading, which has not yet emerged in this debate, to limit the number of FE colleges that would gain power to validate their own foundation degrees. It was said that that would involve only a very small number of colleges of the highest quality. That seems to have been forgotten in this debate.

We have had much discussion this evening on ensuring progression, on which I wish to say more, because I share the concerns expressed by other speakers. As they have said, we need to proceed with caution, particularly on franchising, to which I wish to return, also. I also want to say a little more about the review, because I would like to learn more from the Minister about its precise nature.

So far, I am not convinced that we have anything to hold on to in ensuring that this power will not become exercisable by all, or nearly all, FE colleges. We need some minimum threshold for the number of students pursuing HE courses in further education colleges before they move to validating their own higher education programmes in the shape of foundation degrees. There needs to be a significant number of such students to provide an appropriate environment for them and the economies of scale necessary to provide the appropriate library, laboratory and IT facilities cost-effectively. However, I strongly welcome the Government’s proposal for what is, basically, a six-year probationary period. It is a step in the right direction.

I am also glad to hear that further education colleges will not get the powers established by Clause 19 without having some articulation arrangements. However, there is no requirement in the Bill; as speakers from all sides of the House have made clear, that is what we need. Reiterating what others have said, I hope that the Government will come forward at Third Reading with an amendment that puts it in the Bill.

Having worked closely with the Association of Colleges for some years, I hate to say this, but I find some of its briefing a little worrying. Of course, as the noble Baroness, Lady Morris of Bolton, has said, many students who do foundation degrees do not want to progress to honours degrees, but many want to. The AoC also claims that, although some students may want to progress in another direction, they do not want to do honours degrees. Again, this is true; they may want to acquire professional qualifications instead. However, many universities are providing just such programmes to achieve professional qualifications, especially the post-1992 ones. There should be an articulation between foundation degrees and these sorts of qualifications, as well as appropriate honours degrees. I strongly support what others have said about the need for further thinking about this.

Given the Government’s commitment to rigorous quality controls, it seems odd that further education colleges will not only be able to validate their own degrees but will eventually be able to validate the degrees of other institutions and form consortia of FE colleges to do that for them. That takes FE colleges away from their main mission of delivering level 2 and 3 qualifications to the many hundreds of thousands of young people and adults who need them to gain satisfactory jobs and to have worthwhile careers in our economy, where these skills are in all-too-short supply. I have to confess that I found it a little hard to follow everything that the Minister was saying about what is being put into the guidance. I feel that all the concerns that my noble friend Lady Warwick expressed are valid. Frankly, I do not think that we should ever give FE colleges the role of franchising. I do not think it is part of their mission to undertake such work.

I strongly support proposed new subsection (6D) of the amendment tabled by the noble Lord, Lord Dearing, and Amendment No. 44, which the Government brought forward, for which I am grateful to them. However, such a review should be independent, and that should be provided in the Bill. It should not be done by civil servants in the Department for Education and Skills, however much I respect those officials. Will the Minister confirm that it is the intention that this review should be independent?

Such a review should look at the impact of Clause 19 on FE colleges in a very general way. It should not simply be about the quality of foundation degrees. The review should look at the clause’s effect on the mainstream work of further education, on the vocational programmes that they provide for adults and young people below level 4 and on important areas such as basic skills courses for adults. As the noble Lord, Lord Dearing, said, there is a long and rather sad history of post-school education institutions neglecting their lower-level work or even dropping it as soon as they are encouraged to start focusing on higher-level qualifications. Were that to happen, it would be a disaster for our FE college system and indeed for the nation.

Any review should also look at the clause’s effect on universities. The Minister said that he did not think that existing partnerships would be endangered. I am puzzled as to why he thinks that they will not be, because—this certainly would apply in my own institution—were some of the FE colleges with whom we are in partnership to decide to validate their own foundation degrees, it would damage our partnership. They would float off to do it on their own. I am not sure what the basis of my noble friend’s claim was. A review needs to look at the wider questions of the clause’s effect on post-1992 universities. We must remember that those universities have invested a great deal of time, effort and resources into foundation degrees and in collaborating with the FE system. By encouraging further education colleges to become direct HE providers, rather than continuing with the well established system that we have—which I think is working well, contrary to what some further education college principals have claimed—we could well undermine those very universities in a quite deep and unfortunate way.

We have to be aware that the number of qualified students coming forward to fill places for foundation degrees and even for honours degrees is growing pretty slowly. There are now as many places to fill as there are qualified students to fill them. What do the Government believe will happen when the anticipated demographic downturn takes place? I have enormous sympathy with the vice-chancellor of Bolton University, who has argued that widening participation in higher education through FE may destroy the capacity base of widening participation universities such as Bolton to deliver the Government’s agenda. Universities rightly have to compete to recruit students. I have nothing against that; it is absolutely fine. However, I question whether we should be introducing, developing or creating a divided market between FE and universities when demographic decline is predicted. FE colleges validating their own foundation degrees will understandably want to build their HE capacity. Who can blame them? This could lead to some new universities undershooting on their HEFCE contracts and having to be shored up by HEFCE, at considerable cost to the taxpayer. It could also, of course, lead to them being forced to make substantial redundancies, which will also add to the taxpayer’s costs.

Surely what we want to see in our post-school educational system is a coherent system with clarity about the role of different institutions. Clause 19 reduces that clarity by muddling the roles of further education colleges and higher education institutes. At a time when we want to see the ambitious targets set by the Leitch report on intermediate-level qualifications being met by further education colleges, it encourages them to expand in a quite different direction. Moreover, it could leave some widening participation universities seriously exposed. I hope, therefore, that the Minister will agree that any future review, interim or final, will reach beyond the very important questions of quality, progression and franchising to these wider issues.

My Lords, do the Government object to putting in the Bill a provision stating that those FE colleges that have the power to award foundation degrees should have an articulation agreement with one or more HEI, to ensure that students who successfully complete the foundation degree are entitled to progress to an honours degree? That question goes to the heart of many of the worries. Although the Minister gave considerable assurances, I do not see that in his amendments and I wonder whether the Government object to putting that into the Bill.

My Lords, when I presented the government amendments, I spoke for 22 minutes, which had my noble friend the Chief Whip scurrying into the Chamber, wondering whether I was launching a filibuster against my own Bill. I dealt with virtually all the points raised—I did not necessarily persuade noble Lords—but I did present the Government’s case, so I hope that the House will forgive me if I do not reply again to them. I want to go to the heart of the issues in the amendment tabled by the noble Lord, Lord Dearing, around which the debate has focused, and summarise where I think we are.

I took the noble Lord to say that he believed that we were broadly there on student voice, on a probationary period for further education colleges in being awarded degree-awarding powers in the first instance, and on franchising, subject to him studying carefully the long explanation that I gave on how the arrangements will work and the controls that will be in place. The fourth issue was articulation agreements, in respect of which I believe that we have in place the most robust requirements in what we will say in the QAA’s draft criteria document, which I shall make available to noble Lords shortly. However, I hear all the points made by the noble Lord, Lord Dearing, and others, and undertake that my honourable friend the Minister for Further and Higher Education and I will consider them further to see whether it might be advantageous to have something in the Bill when we come back on Third Reading.

The review after four years was warmly welcomed on all sides. My noble friend Lady Blackstone asked whether it would be independent and whether the scope could be broadened. I undertake that we will consider both those issues, and I will return to the House on them later.

The only other point on which I think I should respond now is that of Wales; having not been able to give an answer in respect of Wales earlier, I certainly do not feel that I can let it pass a second time. The noble Baroness, Lady Morris, asked whether Clause 26 would be wide enough to allow the National Assembly for Wales to pass measures similar to Clause 19. The answer is no. She is correct that Westminster would need to legislate for that to be possible, unless an Order in Council were made to give the National Assembly the measure-making power. However, it is not the policy of the National Assembly to take that power at present, so the issue does not arise.

On that basis, I hope that the noble Lord, Lord Dearing, will feel able not to press his amendment.

My Lords, I am grateful to the Minister for what he has said. He understands fully the arguments that have been made for getting the articulation agreement, especially, into the Bill. It is not something that has validity for only six years, but is a perpetual requirement. On the basis that he shows that there is to be thought, I will gladly not press Amendment No. 43.

On Question, amendment agreed to.

42: Clause 19 , page 14, line 18, at end insert—

“( ) In subsection (6) (power of institution to determine appropriate course of study etc) for “It” substitute “Subject to subsection (6A) below, it”.

( ) After subsection (6) insert—

“(6A) An order under subsection (1) above specifying an institution as competent to grant in pursuance of this section only the kind of award mentioned in subsection (2A) above may provide that the institution is not to grant such an award to a person unless he was enrolled at the institution at the time he completed the course of study for which the award is granted.””

On Question, amendment agreed to.

[Amendment No. 43 not moved.]

44: After Clause 19 , insert the following new Clause—


Within the period of four years beginning with the commencement of section 19, the Secretary of State must lay before Parliament a report about the effect of that section.”

On Question, amendment agreed to.

Clause 20 [Powers of a further education corporation to form or be involved in certain bodies corporate]:

45: Clause 20 , page 15, line 13, leave out from “ending” to “the” in line 14 and insert “immediately before the coming into force of this section,”

46: Clause 20 , page 15, line 15, leave out “include” and insert “have included”

On Question, amendments agreed to.

Clause 21 [Consultation by governing bodies of further education institutions]:

47: Clause 21 , page 15, line 25, leave out “and” and insert “or”

48: Clause 21 , page 15, line 28, leave out from “section” to “to” in line 29 and insert “about consultation with persons falling within paragraph (a) of subsection (1) must provide for the views of such a person”

On Question, amendments agreed to.

[Amendment No. 49 not moved.]

Clause 24 [Duration of levy orders]:

50: Clause 24 , page 17, line 25, leave out from “specify,” to “period”)” in line 26 and insert “for each levy period, a period (in this Act referred to as a “base”

The noble Lord said: My Lords, I shall speak also to Amendments Nos. 51 to 55 and 58 to 66. Current practice is for industrial training boards to submit proposals for levy orders annually—indeed, we debated two orders only last week—but levy rates have remained unchanged for a number of years. Consequently, Clause 24 amends Section 11 of the Industrial Training Act 1982 so that, where an industrial training board wishes to raise a levy, it must, subject to some exceptions, submit levy proposals covering a three-year period.

Schedule 1 makes amendments to other provisions in the 1982 Act in consequence of the changes to a three-year levy order model. Schedule 2 repeals certain provisions of the 1982 Act in consequence of the changes to be made by Clauses 23 and 24. Those proposed changes were welcomed in Grand Committee. The proposals are of a purely technical and drafting nature. They make some minor adjustments to the drafting of Clause 24 and the consequential amendments to the 1982 Act, to ensure that the drafting is consistent overall and that all the necessary consequential changes have been made. I stress that the changes do not alter the intended effect of Clauses 23 or 24 or the consequential amendments made to the 1982 Act. I beg to move.

On Question, amendment agreed to.

51: Clause 24 , page 18, line 2, at end insert “for securing”

52: Clause 24 , page 18, line 9, after “proposals” insert “for securing”

53: Clause 24 , page 18, line 10, after first “levy” insert “payable”

54: Clause 24 , page 18, line 16, leave out “a person was not exempted” and insert “that person was not exempted under that order”

55: Clause 24 , page 18, line 18, leave out third “the” and insert “a”

On Question, amendments agreed to.

Clause 25 [Powers of a higher education corporation to form or be involved in certain bodies corporate]:

56: Clause 25 , page 19, line 5, leave out from “ending” to “the” in line 6 and insert “immediately before the coming into force of this section,”

57: Clause 25 , page 19, line 7, leave out “include” and insert “have included”

On Question, amendments agreed to.

Schedule 1 [Amendments]:

58: Schedule 1 , page 23, line 16, after “(3)” insert “—

( ) after “must include” insert “, in relation to each levy period,”;”

59: Schedule 1 , page 23, line 16, leave out “a” and insert “that”

60: Schedule 1 , page 23, line 16, at end insert—

“( ) after “they provide” insert “, in relation to each levy period,”.”

61: Schedule 1 , page 23, line 17, at end insert—

“( ) after “may include” insert “, in relation to any levy period,”;”

62: Schedule 1 , page 23, line 19, leave out “a” and insert “that”

63: Schedule 1 , page 23, line 33, leave out “a” and insert “each”

64: Schedule 1 , page 24, line 6, leave out “a” and insert “each”

65: Schedule 1 , page 24, line 9, leave out “in respect of a levy period”” and insert “by virtue of the resulting levy order””

On Question, amendments agreed to.

Schedule 2 [Repeals]:

66: Schedule 2 , page 25, line 26, after “organisations”” insert “and the “and” preceding that definition”

On Question, amendment agreed to.