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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The NASUWT referred to the establishment of this body as,

“an unnecessary tier of bureaucracy and administration”.

The British Chambers of Commerce commented:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Business welcomes the intention to create a more ‘demand-led’ approach to adult skills funding through the … Skills Funding Agency”.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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