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House of Commons Hansard
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General Committees
15 October 2018

Delegated Legislation Committee

Draft Data Retention and Acquistion Regulations 2018

The Committee consisted of the following Members:

Chair: Sir Graham Brady

† Boles, Nick (Grantham and Stamford) (Con)

† Dakin, Nic (Scunthorpe) (Lab)

† Eagle, Ms Angela (Wallasey) (Lab)

† Goodwill, Mr Robert (Scarborough and Whitby) (Con)

† Hair, Kirstene (Angus) (Con)

† Hart, Simon (Carmarthen West and South Pembrokeshire) (Con)

† Maclean, Rachel (Redditch) (Con)

† Mann, Scott (North Cornwall) (Con)

† Maynard, Paul (Lord Commissioner of Her Majesty's Treasury)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)

† Smith, Eleanor (Wolverhampton South West) (Lab)

† Thomas-Symonds, Nick (Torfaen) (Lab)

Twigg, Derek (Halton) (Lab)

† Wallace, Mr Ben (Minister for Security and Economic Crime)

† Williams, Dr Paul (Stockton South) (Lab)

† Yasin, Mohammad (Bedford) (Lab)

Yohanna Sallberg, Medha Bhasin, Committee Clerks

† attended the Committee

First Delegated Legislation Committee

Monday 15 October 2018

[Sir Graham Brady in the Chair]

Draft Data Retention and Acquisition Regulations 2018

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I beg to move,

That the Committee has considered the draft Data Retention and Acquisition Regulations 2018.

I am delighted to serve under your chairmanship, Sir Graham. The retention of and access to communications data is crucial in enabling investigators to obtain intelligence and evidence that can prevent terrorist attacks, disrupt the activities of serious and organised crime groups, and establish culpability so that offenders can be brought to justice. It is used to investigate crime, keep children safe, locate missing persons, support or disprove alibis and link a suspect to a crime scene.

The regulations introduce additional safeguards to ensure that the UK’s regime complies with EU law. They also bring into force the code of practice of parts 3 and 4 of the Investigatory Powers Act 2016—IPA—the regime for communications data acquisition and retention. Between November 2017 and January 2018, we consulted publicly on the changes to the legislation and code of practice.

The regulations provide for the independent authorisation of communications data requests. The Investigatory Powers Commissioner, a senior judge, is given that power and will delegate the responsibility to a newly appointed body of staff, which will be known as the Office for Communications Data Authorisations.

OCDA will report directly to the Investigatory Powers Commissioner and will be responsible for considering the vast majority of requests made by public authorities to access communications data. The new body is expected to begin operating in April 2019 with independent authorisation being rolled out across public authorities during 2019. The internal authorisation of requests will continue to be permitted in urgent cases—for example, where there is a threat to life or where requests are made for national security matters, which are outside the scope of the European law.

The regulations restrict the crime purpose for which events data such as call histories and location information can be retained and acquired to serious crime. We have carefully considered how serious crime should be defined in the context of communications data—a decision that the European Court has rightly left to member states. We have worked with the operational community to focus on where communications data can be a valuable tool. Indeed, in some cases, it is the only investigative tool.

We have mirrored the definition that already exists in the IPA for the more intrusive interception and bulk powers, but we have adjusted the custodial threshold to one year, rather than three, to reflect the less intrusive nature of comms data. That will ensure that the power is not used in the investigation of low-level offences.

The definition also makes specific provision for offences that, as an integral part, involve the sending of a communication or a breach of a person’s privacy, which will ensure that communications data can be used to investigate all harassment and stalking offences. Similarly, the definition extends to offences committed by corporate bodies, such as corporate manslaughter, where custodial sentences are not available. In addition, in every case, even where the serious crime threshold is met, an application for communications data can be authorised only where it is necessary and proportionate to what is sought to be achieved.

To ensure that the serious crime restriction can be brought into force on 1 November, the regulations amend the Regulation of Investigatory Powers Act 2000—RIPA. Until part 3 of the IPA is brought into force early next year, RIPA remains the legal framework for accessing communications data.

The new code of practice provides comprehensive guidance on the data retention and acquisition regime and describes roles and responsibilities, considerations that must be given and detailed processes that must be followed. The code takes account of the changes made in the regulations, in particular the role of the Investigatory Powers Commissioner and OCDA. It also provides further guidance on factors to take into account when considering the seriousness of offences in deciding whether communications data should be acquired.

The changes support the important right to privacy and the right of citizens to be protected from crimes and terrorism. They ensure that public authorities can continue to access retained communications data in a way that is consistent with EU law and our responsibilities to protect the public. The additional safeguards, the clear requirements set out in the code of practice and the independent oversight provided by the Investigatory Powers Commissioner establish clear limits around the use of the powers and provide reassurance for the public that communications data is being used only where it is necessary and proportionate. I commend the regulations to the Committee.

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It is a pleasure to serve under your chairmanship, Sir Graham; I thank the Minister for the information he has shared with the Opposition regarding this statutory instrument.

Following the ruling of the European Court that the Investigatory Powers Act 2016 was incompatible with European law, the Opposition welcome this instrument, which brings the legislation into line with that European law, together with the code of practice. We have accepted the ability of particular public authorities, including law enforcement and intelligence agencies, to have access to communications data, and we recognise that that can often be vital to ensuring public safety and national security. The proposed changes to the legislation and the code of practice would refine these data retention and acquisition regulations in two major ways: first, as the Minister has set out, by introducing an independent administrator who can authorise the use of these powers, and secondly, by,

“restricting the crime purpose for acquiring retained communications data to serious crime”,

making the use of this power proportionate to the crime being investigated. We in the Opposition support strong powers and strong safeguards, and we welcome the refinement of this legislation.

While the Opposition are not opposed to these changes, I seek clarification from the Minister on one point. The divisional court has required that the Government make legislative changes to bring the Data Retention and Acquisition Regulations in line with European law by 1 November 2018. While I understand that the proposed serious crime threshold will take effect in November 2018, the Government have stated in their explanatory memorandum that,

“the associated requirements for independent authorisation”,

will come into force from April 2019, six months after the deadline set by the court. The information provided by the Government cites complexity of implementation as the reason for that six-month delay, but I wonder whether the Minister can offer further clarification on the reasons.

As I have stated, the Opposition do not plan to oppose these changes, although I note that my former colleague, now the Mayor of Greater Manchester, Andy Burnham, warned the Government in June 2016, when the Investigatory Powers Bill was being debated, that the threshold had to be a precise one. He said that,

“we must…legislate to put in place a very precise threshold, so that the circumstances in which those data can be accessed are explicitly clear…we need a very clear definition of what level of crime permits the authorities to access those records.”—[Official Report, 7 June 2016; Vol. 611, c. 1121.]

I am pleased that the Government have made the reasonable adjustments required to this legislation, so that that balance can now be appropriately struck.

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It is a pleasure to serve under your chairmanship, Sir Graham.

My colleague, my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry), opposed many of the measures in the Investigatory Powers Act during the Bill Committee and questioned whether many of the proposals were lawful. Now we know the answer, as it relates to what is in the 2016 judgment. Despite having opposed many of the measures in the 2016 Act, we have always said that we could support such measures if the Government proved the proportionality and necessity of the proposals. That has not happened as yet.

The Government’s response to the consultation talks about serious crime and says that data

“is used in 95% of serious and organised crime prosecution cases handled by the Crown Prosecution Service Organised Crime Division, and has been used in every major Security Service counter-terrorism investigation over the last decade.”

That is a fair point—95% is a high percentage—but in talking about the ruling it says that

“Member States can legislate for a regime which permits the targeted retention of communications data for the purpose of fighting serious crime, and the judgment sets out conditions that such legislation must satisfy in order to meet the requirements of EU law.”

I hope the Minister can address this in his conclusion, but in terms of the definition of serious crime, the proposed subsections 60A, 61 and 61A outlined do not sufficiently limit acquisition of communications data for an “applicable crime purpose” to,

“the objective of fighting serious crime”,

which is required in order to comply with the judgment in the case of Tele2 Sverige AB v. Post-och telestyrelsen and Secretary of State for the Home Department v. Tom Watson and Others. That is because the proposed section 86(2A) defines serious crime so broadly. The definition covers any crime by a body corporate; any offence

“which involves, as an integral part of it, the sending of a communication or a breach of a person’s privacy”;

and any offence that carries a penalty of at least 12 months’ imprisonment for offenders aged 18 or over.

Serious crime will be captured by the definition in proposed new section 86(2A); of course it will. However, the fact that an offence was committed by a body corporate or involves a communication or breach of privacy bears no relation to its seriousness and therefore takes us no further in limiting the acquisition of data to the objective of fighting serious crime. The minimum sentence definition will encompass the vast majority of criminal offences and apply regardless of the circumstances of the offence. In our opinion, the definition should be much narrower, taking into account the particular circumstances of the offence. The definition of serious crime should be met only when a person can reasonably expect to receive a sentence of significantly more than 12 months.

We opposed the 2016 Act’s far-reaching bulk powers to acquire the personal and private data of our constituents; the regulations do not address our concerns. I appreciate that the UK Government have moved on the issue, having been forced to do so by the Watson ruling, but we would have welcomed their taking the opportunity to address our concerns via the regulations. Sadly, they have chosen not to do so. I am keen to hear the Minister’s reply about the definition of serious crime.

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I have a few questions for the Minister about some of the matters that he set out. I would like a little more detail on them for the record, so that we can—I hope—go on to support the draft regulations.

These matters concern the delicate balance that must always exist between privacy and the need to fight crime by using material generated in the normal living of life, through new ways of communicating. Will the Minister say a little more about the balance that the Government have decided to strike in the draft regulations? Clearly the wide-ranging system under the existing legislation did not survive the jurisdiction of the Court, so the type of information that can be used for the purpose of fighting crime is being narrowed. How have the Government struck that new balance? I note that none of the draft regulations applies to national security, because it is not within EU competence. Does the regime now being established have any connection with issues of national security?

My second question is a more practical one about the independent authorisation of requests for information. We all agree that it is good to have independent oversight with the capacity to ensure that there is no drift and that the operational behaviour of the system stays within the reasonable bounds of the draft regulations. However, if serious crimes are being pursued, it is equally important that independent authorisation should not become a bureaucratic system that prevents our forces of law and order—which are already under huge pressure from Government expenditure cuts—from doing their job effectively and thereby lets serious criminals off the hook. Will the Minister say a little about the funding arrangements that will be implemented for the independent authorisation of requests, so that the system does not just become a big queue that prevents operational effectiveness in the police force?

Thirdly, does the Minister envisage any parliamentary oversight of the way that the system will evolve over time? Again, it is important to keep such things under review and ensure that they are working well. Clearly, the Home Affairs Committee may have some oversight, but does he envisage coming back to the House in any way?

Fourthly and finally, we are in a situation where Amazon, Facebook and a lot of the tech behemoths have more access to information about how we behave. Cambridge Analytica used 2,000 to 3,000 data points to analyse the likely voting behaviour of millions of people in the US presidential election and in the Brexit referendum in this country, as we know. Private and unaccountable corporations appear to have more access to information about individual citizens of our country than we allow the police. Does the Minister think that balance is right?

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I will first address the experienced points of the hon. Member for Wallasey. The balance between allowing our police forces to get on and do their job and bureaucracy is a challenge that the Home Office and Government have always faced. If there was a reason why we did not initially propose this type of independent authorisation, it was not some deep-state conspiracy theory, but the amount of bureaucracy we expect at a comms data level and whether that is proportionate to the police doing their job.

It is a difficult balance. Comms data is the norm. We are all wedded to our telephones—as I speak, some Members are wedded to theirs—and people conduct a serious amount of business, communication and crime on them, so that data will only increase. Comms data is not about the content, however; it is about the who, where and when, so it is at the lower level.

Subscription details—basically, which mobile telephone belongs to who and the billing address—are included in the regulations. The Court did not require us to do that, but we have put it into the independent authorisation, partly because law enforcement said, “Just get rid of the bureaucracy and hand it over to OCDA. We do not want to have it just for subscriptions and not others,” and partly because it now fits that all these authorisations, whether they are the more intrusive bulk data and content intercept communications or not, are dealt with and oversighted independently.

That leads me to the points of the hon. Members for Wallasey and for Paisley and Renfrewshire North. The oversight will be independent. It will be accountable through the Investigatory Powers Commissioner, Lord Justice Fulford. He is also involved in the independent authorisation of the more intrusive areas of intercept and has an oversight role to look back at how the powers were used and whether they were proportionate and necessary. Funnily enough, within that, he can order disclosure to individuals if he feels that their data has been used wrongly. That goes some way to our venture—we have said to the European Court that there is already a form of notification in the system, which is that there are several opportunities for someone to be notified.

At the same time, there will be other scrutiny, such as an annual report by the Investigatory Powers Commissioner. The Intelligence and Security Committee will also be able to look at some of the more sensitive capabilities in detail. There is the Home Affairs Committee and the investigatory powers tribunal that individuals can take cases to if they feel that their data has been wrongly collected, wrongly stored or abused.

Without wandering too far off the regulations, I entirely agree with the hon. Lady’s point about the private and public balance. We have a balance where if any of us in this room, or if I as a Minister, wants to do something, we need a warrant or authorisation with quite a lot of oversight, but if a private individual wants to park a car with a camera in it outside someone’s house on a public highway, there is very little that person can do to stop them. If a large company wants to buy and sell someone’s data or effectively surveil you and I, there is very little that we can do about it, Sir Graham. I worry that we go around in circles and that that goes pretty unchallenged by the law enforcement community. The General Data Protection Regulation is a good piece of work, which has sought to deal with that by bringing ownership of data back to individuals.

As the hon. Member for Paisley and Renfrewshire North said, we have drawn down the definition of “serious crime” to a crime with a sentence of one year or more. We have included some carve-outs below that, simply because most of those offences depend purely on comms data. For example, when investigating the persistent stalking or harassment of an individual, it is incredibly important to be able to use data about telephone behaviour, but the offence of stalking does not always meet that sentencing threshold—injunctions are often used, and so on. We therefore venture that that carve-out is important. Corporate manslaughter does not carry a custodial sentence, but I think we all believe comms data is really important in proving that a corporation or body failed in its duties or committed a criminal offence, which are often large in scale.

That is a pragmatic way of trying to keep people safe. The Court said it was up to the member state to define “serious crime”—it did not seek to do so itself. It is recognised that comms data is not as intrusive into our privacy as an intercept, which means that the serious crime threshold can be different from the three-year threshold that applies to the regime for more intrusive data collection.

On what the hon. Member for Torfaen said, we obviously told the Court that we would comply with its ruling about independent authorisation, but we have until April 2019 to set up independent authorisation on a scale that allows our police forces up and down the country to do their job. We have started recruiting and establishing a secure IT system—posts have been advertised and people are being interviewed for them. It is simply set-up time. We cannot immediately rustle up that type of body. The OCDA will be answerable to the Investigatory Powers Commissioner and based throughout the United Kingdom. It will obviously spend a lot of its time liaising with police forces, because it will make direct requests via the single point of contact—the expert—in each force.

The Court accepts that, and it is really important that we deliver to that timetable. I have asked for an update every two weeks on how we are progressing. The Court recognises that we actually have to deliver—it cannot just immediately rule everything illegal, because the system would in effect fall over. The Court gave us time, and it has recognised our ability to do that.

The Court ruling on which the draft regulations are based considered five arguments. In two cases—independent authorisation and the serious crime threshold—the Court found that our law was unlawful and needed to be changed. We have addressed that. In the other three cases, the Court did not find in the plaintiff’s favour or make a ruling. For example, it did not find that our retention was “general and indiscriminate”. That is why we are dealing with comms data. The hon. Member for Paisley and Renfrewshire North referred to bulk data. The draft regulations focus specifically on the comms data regime, as requested.

I hope I have answered hon. Members’ questions. We are in a good position. I am entirely comfortable that independence will be used in the authorisation process. We have not popped some conspiracy—this is a perfectly functional thing. At the moment, the Home Office is funding the set-up of OCDA, alongside the Investigatory Powers Commissioner. I recognise the pressure on resources for police forces. I have to do my best to ensure that that body is as minimally bureaucratic as possible but does the job of giving assurances that people’s data is dealt with independently and not abused.

Question put and agreed to.

Committee rose.

Draft Greater Manchester Combined Authority (Adult Education Functions) Order 2018 Draft West Midlands Combined Authority (Adult Education Functions) Order 2018

The Committee consisted of the following Members:

Chair: Sir Henry Bellingham

Beckett, Margaret (Derby South) (Lab)

† Brereton, Jack (Stoke-on-Trent South) (Con)

† Cadbury, Ruth (Brentford and Isleworth) (Lab)

† Campbell, Mr Ronnie (Blyth Valley) (Lab)

† Fletcher, Colleen (Coventry North East) (Lab)

† Freeman, George (Mid Norfolk) (Con)

† Hayes, Mr John (South Holland and The Deepings) (Con)

† Hepburn, Mr Stephen (Jarrow) (Lab)

† Knight, Julian (Solihull) (Con)

Mann, John (Bassetlaw) (Lab)

† Marsden, Gordon (Blackpool South) (Lab)

† Milling, Amanda (Cannock Chase) (Con)

† Milton, Anne (Minister for Apprenticeships and Skills)

† Rimmer, Ms Marie (St Helens South and Whiston) (Lab)

† Robinson, Mary (Cheadle) (Con)

† Rowley, Lee (North East Derbyshire) (Con)

† Skidmore, Chris (Kingswood) (Con)

Ian Bradshaw, Kenneth Fox, Committee Clerks

† attended the Committee

Fourth Delegated Legislation Committee

Monday 15 October 2018

[Sir Henry Bellingham in the Chair]

Draft Greater Manchester Combined Authority (Adult Education Functions) Order 2018

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I beg to move,

That the Committee has considered the draft Greater Manchester Combined Authority (Adult Education Functions) Order 2018.

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With this it will be convenient to consider the draft West Midlands Combined Authority (Adult Education Functions) Order 2018.

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What a pleasure it is to serve under your chairmanship, Sir Henry. These orders, if approved and made, will provide for the transfer of certain adult education functions and associated adult education budgets to the Greater Manchester and West Midlands combined authorities. They provide an opportunity for the authorities to help their residents to fulfil their potential in life.

In 2015 and 2016, through a series of devolution deals agreed between the Government and the combined authorities, we made the commitment fully to devolve the adult education budget. The orders will deliver on that commitment. They are made under the Local Democracy, Economic Development and Construction Act 2009 and will transfer certain adult education functions set out in the Apprenticeships, Skills, Children and Learning Act 2009 from the Secretary of State to the combined authorities. Those functions will relate to the area of each specified combined authority for the academic year 2019-20 and thereafter. The transfer does not include the functions in so far as they relate to apprenticeships or those subject to adult detention.

In the 2015 spending review, the Government made £1.5 billion available annually until 2020 for the adult education budget. Across England, that support to help adults with skills and learning is vital in equipping them for work, an apprenticeship or further learning. It acts as an integral stepping stone, particularly for adult learners who may have suffered disadvantage. In 2016-17, the adult education budget supported adults to study English, maths, English for speakers of other languages, full level 2 or level 3 qualifications and a wide range of different community learning provision.

Combined authorities have a role to play in supporting the introduction of T-levels, including working with employers to provide high-quality industry placements. Each combined authority has its own needs and circumstances. Local authorities, including combined authorities, are fantastic enablers and facilitators. We are working with combined authorities, businesses and learning providers to establish how skills provision and reforms can be best shaped to fit the needs of local areas.

The orders will transfer certain adult education functions of the Secretary of State in the Apprenticeships, Skills, Children and Learning Act to the combined authority in relation to its area and enable the transfer of that relevant part of the AEB to the combined authority. I apologise for getting technical, but it is important that this is covered. In particular, the following functions will be exercisable by the combined authority in its area instead of by the Secretary of State: section 86, which relates to education and training for persons aged 19 or over; section 87, which relates to the learning aims for such persons and the provision of facilities; and section 88, which relates to the payment of tuition fees for such persons.

Conditions are set with the transferred functions. In particular, the combined authority must have regard to guidance issued by the Secretary of State and must adopt eligibility rules in accordance with any direction of the Secretary of State. The Department for Education will transfer the relevant part of the AEB to the combined authority to undertake the functions. It will be the responsibility of each area to manage its overall AEB allocation efficiently and effectively to meet the needs of the local population.

Prior to the introduction of the orders, the Department has considered business cases from the combined authorities for implementation funding in preparation for the transfer of functions. After evaluating those cases, the Department agreed to provide appropriate implementation funding to support the combined authorities’ preparations and ensure each area was able to prepare effectively for taking on the functions.

From academic year 2019-20, Greater Manchester and West Midlands combined authorities will be responsible for providing funding for statutory entitlements for eligible learners in maths and English up to and including level 2; first full level 2 for learners aged 19 to 23; first full level 3 qualifications for learners aged 19 to 23; and the forthcoming digital skills entitlement. We talk about the northern powerhouse and the midlands engine, and I think we can agree that skills are an essential driver for economic growth in those regions; they also ensure that adults can fulfil their potential.

I have a number of anecdotal cases of success in those areas. I will not detain the Committee with them, but I am happy to outline them should anybody want to know about them. I would also be happy to write to Committee members with those examples.

The scale of the challenges faced by those combined authorities is significant. There are 41,000 Greater Manchester combined authority residents with no qualifications at all, and across the districts there are significant variations between residents’ skills levels. West Midlands combined authority has the lowest employment rate of any of the mayoral combined authorities—72.3%, against a national average of 78.4%. Employment in both combined authority areas is typically lower skilled and lower paid than the UK average.

Through these orders, the combined authorities will be able to deliver a step change to support their residents into good jobs with opportunities for people to progress and develop; improve the earnings potential of their low-paid, low-skilled workers; deliver a thriving and productive economy; and—it is important to reiterate this—harness the collective enthusiasm, expertise and social capital of the local area from the third sector, businesses, the public sector and local authorities. I commend the orders to the Committee.

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It is a great pleasure to serve under your chairmanship, Sir Henry. We welcome these orders enthusiastically, and I am pleased that we are finally able to have this discussion. Originally, the former Skills Funding Agency said that seven regions were supposed to get devolved AEBs for 2018, but the proposal has been delayed for a year. Still, better late than never.

I welcome the terms in which the Minister concluded her peroration. She talked about the broader aspects of the issue, as well as the technical aspects, which must be discussed on such occasions. We believe it is important that we give the combined authorities the power to start making changes locally as soon as possible. I know from personal contact with the Mayors of Greater Manchester and of Liverpool combined authorities, and from what the Mayor of the West Midlands combined authority, Andy Street, has said, that they are itching to get moving in those areas.

There are clear opportunities via these new structures, but there also needs to be horizontal, not simply vertical, co-operation, and infrastructure projects should be tied up with local delivery and co-operation wherever possible. I do not believe we can micromanage it all from Whitehall. That is why we welcome these proposals. Place and sector are always critical factors in supply and demand.

Tentative progress has been made in the devolution of adult skills funding, but we need a much bigger debate about the devolution of broader apprenticeship and skills funding. That is particularly pressing because of the sharp downturn in apprenticeship starts since the levy was introduced, especially in the 16 to 24 age range. One potential avenue that must be explored is devolved skills and the implications of the adult education budget’s relative narrowness.

Devolving apprenticeships, including for adult apprenticeships and other skills funding, and not just the adult education budget, is the right way to go. As the Minister has made clear, devolution of FE should be the way forward in terms of community growth and cohesion. If we do not see the overall context of that and if we do not use all the levers for delivering the change we need, things could be very narrow. It could be a case of Hamlet without the prince. The reality is that if we want a proper economic plan across these areas—Greater Manchester, which I know very well, having grown up there, and the west midlands, which I know reasonably well—simply looking at devolving the adult skills budget and not considering the broader issue around apprenticeships is, to use a good old-fashioned northern phrase, pretty daft in the medium to long term.

However, we are where we are, and I want to ask the Minister specific questions about the orders before us today. Article 3(2)(b) does not include any functions relating to persons subject to adult detention. I assume that refers to the education of prisoners. The Minister might need to send a note, but will she clarify the role of continuity between the Department for Education and the Home Office when the devolution takes place?

On the memorandum, in terms of the policy background—cited in the context of sections 86 to 88 —the Minister made the point that the measure is subject to an exception in relation to apprenticeship training. I thought the wording was slightly ambiguous, but it is clear from what she said that the Government do not propose moving beyond the parameters in terms of apprenticeships. I want to ask her why, because the argument for that is compelling.

The explanatory memorandum states that

“the Department for Education and the Education and Skills Funding Agency...will agree a collaborative approach through a Memorandum of Understanding”.

Given that the order has been delayed by roughly a year—it is not uncommon to introduce orders when lots of details have already been addressed within a Department—will the Minister tell us where the Department is up to with those memorandums of understanding with the two combined authorities? Related to that is the question of facilitating the alignment, where appropriate, of local and national policy. That plays to the stability of the sector throughout the process of transition. I will come back to that in due course.

At paragraph 10.6, the explanatory memorandum alludes to the fact that the Greater Manchester combined authority

“set out its ambition in response to the consultation and work to integrate the education, skills and employment landscape.”

That is far wider than the Government propose at this stage. I hope that they will reflect on that enthusiasm from Greater Manchester and try their best to accommodate it.

We know what the situation is with the separate skills agreement with the west midlands. It would be interesting if the Minister explained why it was appropriate for the West Midlands combined authority to have the skills deal and not Greater Manchester when the statistics she used showed that both areas are in sore need of that arrangement. In that respect, I can only add to what the metro Mayor of Greater Manchester, Andy Burnham, has said. This picks up on what the Minister has said about T-levels—I understand the importance of a collaborative process, but it is curious to have one without involving T-levels at this stage. Andy Burnham said:

“Further devolution to allow a less fragmented post-16 skills system…for young people, including apprenticeships and T-Levels, would go a long way to connecting residents and businesses with the growth of Greater Manchester.”

One important matter for Greater Manchester and West Midlands, and cities and combined authorities that might be affected more generally, is the impact on ESOL funding. I am happy to be corrected by the Minister or officials, but my understanding is that ESOL will be treated as part of the adult education budget. I therefore assume that responsibility for ESOL will be transferred in the same way for Greater Manchester and West Midlands. If so, and on the assumption that DFE is the lead agency for ESOL—obviously, the Home Office and the Ministry of Housing, Communities and Local Government contribute to provision for migrants and asylum seekers—what will the Minister do to ensure that the devolution process works smoothly?

The Minister will be aware that ESOL funding has decreased from £203 million in 2010 to £90 million in 2016, a real-terms cut of 60%. Colleges and other providers have had their capacity to deliver vital courses slashed. It is therefore important that ESOL funding is devolved smoothly so that there is no further impact on the people who need that funding.

It is well understood that some adult education budgets are devolved. Some of but not all the areas to which the Government will devolve them will have a significant number of people for whom English is not their first spoken language. In that respect, I cite my county of Lancashire, which is not in a combined authority. In some areas and some ethnic groups, women, and particularly adult women, need that English support for a range of social and cultural reasons with which the Minister may be familiar. I do not expect her to respond in detail, but I hope she reflects on that.

Skills devolution is not just the smart thing to do economically in the community, but the way forward for community growth and cohesion. Labour has made it clear in our party policy that, if we were in government, we would look favourably on local authorities, Mayors and combined authorities if they had the capacity, competence and aptitude to offer those deals. We believe the Government should do the same.

The dramatic decrease in funding since 2010 means that I have to ask the Minister this: as part of this process, and for areas that will not have devolution, will there be additional funding for adult education and FE colleges in the Budget? Will she commit funding to combined authorities for the administration of the education budget? She indicated that that will happen, which I welcome, but is she in a position to say how much money and roughly what staffing support there might be?

I do not want to go into the details of some of the controversies that have characterised what has gone on in Greater London—it would not be appropriate for me do so—but they shine a light on the need for this process to go through as smoothly as possible.

I want to speak about the inevitable concerns over market instability when rolling out AEB devolution. I said that that has been delayed for a year, and there is no point going into the details of why and wherefore. What happens often in government—Governments of all hues—is that when something is delayed for a year and finally moves forward, there is such a collective sigh of relief, not least from the Minister and senior officials, that there is a danger that the implementation timeframe will be rushed. That is not me raising this issue; just last week, FE Week published an article quoting Dr Gareth Thomas, managing director of consultancy firm Skills and Employment Support Ltd, in which he said that

“while the authorities ‘may be able to complete the procurement and contracting’ it was less certain that providers would ‘be able to adapt their delivery models and put appropriate partnership arrangements in place’ in time.”

He said that a lot would depend on how different the delivery requirements were area to area. He added:

“‘Hitting the ground running from August 1 will be a big challenge.’”

The chief executive of the Association of Employment and Learning Providers, Mark Dawe, with whom the Minister obviously is very familiar, said that providers were generally

“‘facing dramatic changes across…their programmes of delivery. It is the uncertainty as to what is changing when and therefore the ability to plan and vary resource that is and will cause the greatest destabilisation’”.

He said that there should be a

“‘clear plan and commissioning’ of all AEB.”

I want to touch on an issue that is tangential but part and parcel of the overall picture of adult education. The Minister will be fully aware of the particular concern of the Workers Educational Association; it is a national body but, as I understand it, the Minister and her officials have decided it will not have special arrangements. That leaves the WEA in quite a perilous situation on devolution issues such as this. No one is saying that Greater Manchester, the west midlands and the other areas we will discuss tomorrow would not want to come to an agreement in that respect, but the question, as always, is about the transition period and how that funding can be managed in that area. I hope that the Minister will say something about that.

We welcome these arrangements, which are very important. The scale of the challenge and the demands on the AEB in Greater Manchester are significant—the Minister quoted some figures on that. Sometimes, we are all guilty of seeing the top line of Greater Manchester and Liverpool and conflating that with the narrow scope of the cities in there. Greater Manchester, which I know very well, and the west midlands, which I do not know anywhere near as well, both have a common theme: the cities of Manchester and of Birmingham have benefited hugely over the last 20 years, but the economic footprint in the combined authorities that we are looking at has been very fragmented. In many cases, the outer boroughs in Greater Manchester and the west midlands have not experienced the economic impact and have quite different economic and employment structures. Those are among the issues that both the metro Mayors and the combined authorities in those areas will need to get a handle on.

With those comments I shall conclude. As I said, we do not intend to oppose the orders.

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The shadow Minister raised a number of points, and I hope I can address them all. To collect the comments together, I suppose that some of the delay was to do with the combined authorities not feeling that they were ready. We felt it was very important that they felt ready to take the functions on, because, as he rightly raised, transition is difficult. Thinking about the providers, he mentioned Mark Dawe and combined authorities getting up to speed. I know that Mark will have raised that point from the providers’ point of view.

Even if we are doing the right thing, in the end we have to manage the process. We have all seen good ideas fall victim to the baby going out with the bathwater, and we want to ensure that that does not happen. Some of the delay was important in ensuring that everything was in place. All the combined authorities have to have skills plans in place so that local residents can see how their money is being spent and so that the aims of the combined authorities are clear. The shadow Minister is also right to raise the issue of horizontal working and managing the system from Whitehall.

I want to say a word or two about apprenticeships. In some ways, apprenticeships have been devolved down to the smallest point possible, in that they are in the hands of employers. Thinking of the colleges I have been to and the local authority leaders I have met, what has struck me—it is also true of London—is that they can play a significant role not as doers, but as enablers and facilitators in gathering together employers and helping them to understand this new world of apprenticeships.

As a Minister, I am aware of the fact that in some areas, training provision is lacking. There are employers that desperately want training programmes for certain skills and there is not currently a provider. The Mayors can do a great deal more in that area as enablers and facilitators, but also, I hope, by working with us to ensure that employers have all the information they need to take on apprentices.

When things work well—I talk to employers that do well spending their levy, and there now is the facility to pass 25% on to non-levy employers—that is fantastic, but apprenticeships have to become part of workforce planning. There is not a skills budget to devolve, because it is in the hands of employers. I hope that the non-levy employers will soon also benefit from that in a similar way.

The hon. Gentleman specifically asked about adult education for adults in detention. I hope the situation is clear, but I am happy to give more detail. This is obviously a critical area, and there are some imaginative plans and work happening in the construction industry in London, where the Construction Industry Training Board—I know it is familiar to you, Sir Henry—has done some fantastic work with the employment of reoffenders. I will not detain the Committee by going through examples, but previous offenders have got into work and reached senior levels in construction. That sort of joined-up approach is what we want to see.

The memorandums of understanding have been signed and I hope that there will be no more delays, but should there be any that I am not aware of, the hon. Gentleman will perhaps let me know.

Aligning national and local interests is tricky. The hon. Gentleman rightly spoke about the fact that when thinking about combined authorities we think of cities. That disguises the truth. The skills and education needs of individuals in rural areas are complex, as is the need to provide such things in a way that meets their needs. Devolving that to the combined authorities means that there can be a much more granular and locally responsive approach.

I should mention the skills advisory panels; we have been working in seven areas on those. We need to learn how we can best make the panels’ work effective. They were launched at the end of 2017, and we are rightly taking a phased approach, working with local enterprise partnerships and local authorities, and—critically—aligning them with local industrial strategies.

The hon. Gentleman mentioned ESOL, and he will be aware of the rules about its availability to unemployed jobseekers. When I go around the country, I see brilliant examples—as I am sure he does—some of which are quite small, of English delivery being done really well. For instance, I was at a project in the north where they literally grabbed parents—often women—who culturally might not have felt the need to learn English, when they were taking their primary schoolchildren to school, asking them how they get their children ready for the standard assessment tests. That was an effective way of getting to those women, who are sometimes difficult to reach, and of ensuring that they could help and support their children while increasing their ability to speak and get language skills that ideally will get them into the world of work.

Will there be additional funding for FE and the AEB in the Budget? The hon. Gentleman’s comments would be best addressed to the Chancellor.

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I take any opportunity.

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The hon. Gentleman should take any opportunity, as do I. I am an unashamed cheerleader for the sector, because it is hard for further education and adult education to get attention. We hear a lot of noise about schools, which are important, but they are just the start of the story. To take a rough figure, about 50% of the population do not go on to higher education. Often, the education system has not worked for those people—they have often underachieved. We must ensure that further and adult education gets the attention that it rightly deserves. I am sure he will take every opportunity to raise that with the Chancellor and Treasury Ministers.

Money spent on administration is important. I hope that local residents and locally elected Members will examine what the combined authorities are doing and ensure that the administration budget is kept as low as possible. It is surprising what can be delivered without over-burdensome administration.

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I am sorry to interrupt the Minister, who has been very helpful in laying out these things. However, unless I misunderstood her, she said in her first comments that the principle of an administration budget had been agreed, and I asked her whether she was in a position to say anything about what that budget —or indeed logistical support from the Department—might be. If she cannot do so today, I would be happy with a letter to the Committee.

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I was referring to start-up money, which has been distributed. We are working closely with the devolved administrations. I did much work on those budgets: we asked them to put in bids and all the rest of it and make sure that it felt as it should for their size of population and so on. From memory, there were wide variations in bids for what one combined authority felt it needed to do the administrative set-up work compared with another. That variation in itself is interesting and of note.

Importantly, the combined authorities will be able to keep any underspend, which will help them to support their administration. The adult education budget—sadly, in some ways—is often underspent: allocations are made, and providers do not use all of their budget. However, we are keen to ensure an open dialogue.

For me, no one has adult education right, because a different approach is needed in different areas, as I said. The work we are doing on the pilots in various areas around the country is complex—how we reach adult learners, how we get them on to courses, how we make them recognise that there is an opportunity for them. We are running the learning pilots at the moment, and those combined authorities that have the adult education project will in a way be another opportunity to see what different areas do.

I have been around the public sector for a long time—well over 40 years—and ever since I started people have been talking about sharing best practice and working more closely together, but the truth of the matter is that we are still saying it and people are not doing it. Why do we not do it? We need to look at the barriers. It is important, and I am keen that, although the Department wishes to devolve those responsibilities, we continue to work with the areas to grab best practice. I also hope that they will work with each other, because they will be greater than the sum total of their individual parts. I hope that they will share what is and is not working, and any ideas, while we will feed into them any intelligence that we get from our learning pilots.

The hon. Gentleman mentioned the WEA. It was founded in 1903 and is the largest voluntary sector provider of adult education and has been rated good by Ofsted. Its object is to widen participation. I am aware of its concerns, as the combined authorities will be. I do not underestimate the situation: transition is never easy. However, we have to take that instability head on to get to where I think will be a better place in the future. I am not a believer in change for change’s sake, and I think that the hon. Gentleman recognises that from my time in the Department. I am a great believer, if something is working well, in making it work better incrementally. That is all we need to do; we do not need to change things radically. He and I have enjoyed such conversations, and that is important, because a direction of travel is what matters to the providers.

If I have missed anything, I am sure that the hon. Gentleman will write to me. I am happy to answer any questions. To summarise, the orders must be introduced now to allow the Greater Manchester and West Midlands combined authorities to work with providers to tailor adult further education provision in preparation for the academic year of 2019-20; to give their residents the opportunity to reach their potential, improve their earnings and gain progression in their jobs; and to allow the skills system to deliver in flexible and responsive ways, and to have the agility required to sustain a flexible economy. I therefore commend the orders to the Committee.

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I am grateful to the Minister for the content of what she said and for the tone in which she delivered it. We share a common purpose in wanting to see the matter taken forward as smoothly and as fast as possible. If there are other things along the way, she knows that I will not hesitate to prod her further, but I will leave it there for today. I wish the orders and the combined authorities good speed.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Greater Manchester Combined Authority (Adult Education Functions) Order 2018.

Draft West Midlands Combined Authority (Adult Education Functions) Order 2018

Resolved,

That the Committee has considered the draft West Midlands Combined Authority (Adult Education Functions) Order 2018.—(Anne Milton.)

Committee rose.