17:04 - Division on Amendment 84A - Ayes: 174 / Noes: 234 - Amendment 84A disagreed.
17:32 - Division on Amendment 84B - Ayes: 184 / Noes: 218 - Amendment 84B disagreed.
19:04 - Division on Amendment 89ZZAA - Ayes: 140 / Noes: 175 - Amendment 89ZZAA disagreed.
Lord Hill of Oareford
Lord Hill of Oareford
“ After section 16 insert—
“16A Publication of proposals
(1) The appropriate authority may not make an order under section 16(1) or (3) unless the authority has published a draft of the proposed order, or of an order in substantially the same form, by such time and in such manner as may be prescribed.
(2) A draft proposal or order in respect of an institution which is maintained by a local authority may not be published without the consent of the governing body and the local authority.
(3) In this section “the appropriate authority” means—
(a) in relation to a proposal or order in respect of an institution in England, the Secretary of State;(b) in relation to a proposal or order in respect of an institution in Wales, the Welsh Ministers.””
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, I will speak to the government amendments in this group. As noble Lords may be aware, in October 2010 the Office for National Statistics announced its decision to reclassify FE colleges to the public sector for the purposes of the national accounts. This reclassification would impose heavy new administrative burdens on colleges, and could significantly affect their ability to make their own strategic and operational decisions.
If FE colleges were exposed to the full rigours of the government expenditure regime, they would lose the flexibility they currently have to phase expenditure between different financial years; they would need to work within a financial year that does not line up with their academic year; and it is likely that the very freedoms we are introducing to enable them to borrow without seeking permission would need to be taken away from them, and even tighter constraints introduced. These and other controls would all act as barriers to colleges growing, innovating and developing as we would wish them to do.
I am very grateful to my noble friend Lady Sharp for raising this important issue in Committee. Recent feedback from the ONS indicated that the powers held by the Secretary of State in two areas were indicative of public sector control. We have looked again at these areas to see whether changes could be made to secure private sector classification for colleges, something that I know successive Governments have wished to retain.
The first area is Secretary of State control over the instrument and articles of the governance of colleges. I am sure all noble Lords would agree that every college should have clear, transparent and robust governance arrangements. However, we believe that this can be achieved without Secretary of State control. The government amendments in this group remove the powers of the Secretary of State—or in the case of sixth form colleges, the YPLA—to alter college instrument and articles and place these powers with the college itself. For most colleges this change will make no difference, but it will enable colleges that want to develop and improve their governance in response to the needs of their students, employers and local community to do so. We have retained the essential elements that all instruments and articles must contain in new Schedule 4, which is set out in Amendment 84ZL.
The second area is the Secretary of State’s control over the closure of colleges, known as dissolution. Presently, only the Secretary of State can dissolve a college. The government amendments remove this power from the Secretary of State and give colleges control over their own dissolution. These amendments, and the regulations that will be laid in support of them, include a number of safeguards to ensure that any dissolution decision is taken only once all those affected—staff, students and the local community—have been consulted, and that the process is undertaken in a clear and transparent way, recognising that colleges are providers of an important public service.
Existing legislation provides the state with a legal mechanism to tackle, in extremis, failure in colleges, and this will be retained. In cases where there is evidence of significant mismanagement in colleges, the Secretary of State will be able to exercise his powers of intervention to direct the college to dissolve itself and transfer its property, rights and liabilities to another provider. This action will be taken only once all other steps have been taken to secure improvements, where it is necessary for the Government to intervene as a matter of last resort, to protect students.
I wrote today about government “correcting” Amendments 84ZBA and 84ZN, which correct the provision in Schedule 12 that repeals the duty on colleges to have regard to guidance on consultation with students and employers in England, while retaining this in Wales.
It may help if I inform noble Lords of discussions between the noble Baroness, Lady Jones of Whitchurch, and my honourable friend, the Minister for Further Education, Skills and Lifelong Learning, John Hayes MP, on her Amendment 84ZLA, which would retain requirements for staff and student governors. On behalf of my honourable friend, I thank the noble Baroness and the noble Lord, Lord Young of Norwood Green, for taking the time to meet us. I apologise to them for bringing these amendments forward at a later stage than we would have liked.
The Government have brought forward these changes to support our case for the private sector classification for colleges, in accordance with the policy of successive Governments. It was not our intention to encourage colleges to remove staff or student governors from college governance arrangements. I know that colleges greatly value the contribution that those governors make.
Having listened to the arguments that were put to him by the noble Baroness, Lady Jones of Whitchurch, my honourable friend Mr Hayes and I have spoken further. We have decided that the Government will return at Third Reading with their own amendment, which will give effect to what the noble Baroness’s amendment seeks to achieve. With that assurance, I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Sharp of Guildford
My Lords, I have two amendments in this grouping, Amendments 83 and 84. They do indeed pick up the issue that we spoke about in Committee, which is the duty on the part of colleges to promote the well-being of the local area.
I thank the Minister for bringing forward this raft of amendments. As he knows, I am chairing a commission on behalf of NIACE, the AoC and the 157 Group, which is looking into the role of colleges in their communities. The issue of the reclassification by ONS cropped up in our deliberations on this commission. Our intention is to promote the role of colleges. As the noble Baroness says, we have used the term “dynamic nucleus within their communities”—they should be proactive in developing partnerships and in promoting well-being and community cohesion within their communities. Since that is the case, we are very anxious that they should not be inhibited from this by a statistical classification, and therefore we have been backing the moves made by the department here. I put down some rather naive amendments in Committee in order to pave the way for this, and I am delighted that we have—I hope—managed to come forward with a way that prevents this reclassification.
In relation to my own amendments, I have spoken at some length both with the AoC and with the department about this issue. As I have suggested, the report, which is going to be presented at the AoC conference later this month, will in fact suggest a wider role for colleges within the community, and I think there is a fair amount of good will towards the promotion of this role. In the light of that, I have decided that it would not be appropriate at this time to press my amendments. There is good will on all parts, and the assumption is that colleges will be promoting the well-being of their local area as part of what they will be doing. There is no question of that, but it does not necessarily need to be in the Bill, so, as I say, I shall not press my amendments today.
Lord Hill of Oareford
My Lords, I thank my noble friend Lady Sharp for raising the issue of promoting well-being, and take the opportunity to thank her formally for the work she is doing at the helm of the Government’s commission on the role of colleges in their communities. As she has just said, colleges contribute significantly to the social and economic well-being of their local areas, not only through the education, skills and employment that they provide but through their partnerships and relationships with other bodies in their local areas. I am grateful to her, and look forward to the report that she was talking about, which she is launching at the Association of Colleges conference later in the month.
I am grateful to the noble Baroness, Lady Jones of Whitchurch, for her remarks. On her specific question about remuneration, I understand that colleges need to apply, as now, for exceptional approval for the remuneration of governors for their services as members of the governing body. The change is that they would be treated in line with other charities, and would have to apply to the Charity Commission rather than to the Secretary of State. There is no general power in charity law for trustee boards to make remuneration payments, so permission would be granted only in exceptional circumstances, as the commission has a general expectation that charity assets should be used directly for the purposes of the charity.
The amendments that the Government have tabled, as I think has been recognised, have been made within the context of a changed landscape, in which government and the sector are working together. It has been the policy of successive Governments since the inception of FE corporations in 1992 that colleges should not have the financial and control requirements associated with public sector classification. Our amendments seek to strike the right balance between securing that classification while safeguarding students and public investment in the sector. With the assurance that I have given the noble Baroness, Lady Jones of Whitchurch, I hope noble Lords generally will feel that we have struck such a sensible balance.
Lord Hill of Oareford
“( ) In subsection (4)(c), for “27” substitute “27C or 33P”.”
Lord Hill of Oareford
“ In section 20 (constitution of further education corporation and conduct of further education institution), for subsection (2) substitute—
“(2) Instruments of government and articles of government of further education corporations in England—
(a) must comply with the requirements of Part 2 of Schedule 4, and(b) subject to that, may make such other provision as may be necessary or desirable.(2A) Instruments of government and articles of government of further education corporations in Wales—
(a) must comply with the requirements of Part 3 of Schedule 4, and(b) subject to that, may make any provision authorised to be made by that Part of that Schedule and such other provision as may be necessary or desirable.”For section 22 substitute—
“22 Subsequent instruments and articles: England
A further education corporation in England may modify or replace their instrument of government or articles of government.22ZA Subsequent instruments and articles: Wales
(1) Subject to subsections (2) and (3), the Welsh Ministers may—
(a) if a further education corporation in Wales submits a draft of an instrument of government to have effect in place of their existing instrument, by order make a new instrument of government in the terms of the draft or in such terms as they think fit, and(b) if such a corporation submits draft modifications of an instrument made under paragraph (a), by order modify the instrument in the terms of the draft or in such terms as they think fit.(2) The Welsh Ministers must not make a new instrument otherwise than in the terms of the draft, or modify the instrument otherwise than in the terms of the draft, unless they have consulted the corporation.
(3) If the institution conducted by a further education corporation mainly serves the population of England, or receives financial support from the Chief Executive of Skills Funding, the Welsh Ministers must consult the Chief Executive of Skills Funding before making an order under subsection (1).
(4) The Welsh Ministers may by order modify, replace or revoke any instrument of government or articles of government of any further education corporation in Wales.
(5) An order under subsection (4) may relate to all further education corporations in Wales, to any category of such corporations specified in the order or to any such corporation so specified.
(6) Before making an order under subsection (4), the Welsh Ministers must consult—
(a) the further education corporation or (as the case may be) each further education corporation to which the order relates, and(b) the Chief Executive of Skills Funding, if the institution conducted by the corporation or (as the case may be) any corporation to which the order relates mainly serves the population of England, or receives financial support from the Chief Executive of Skills Funding.(7) A further education corporation in Wales may, with the consent of the Welsh Ministers—
(a) make new articles of government in place of their existing articles, or(b) modify their existing articles.(8) The Welsh Ministers may by a direction under this section require further education corporations in Wales, any class of such corporations specified in the direction or any particular further education corporation so specified—
(a) to modify, replace or revoke their articles of government, or(b) to secure that any rules or bye-laws made in pursuance of their articles of government are modified, replaced or revoked,in any manner so specified.(9) Before giving a direction under this section, the Welsh Ministers must consult the further education corporation or (as the case may be) each further education corporation to which the direction applies.”
Lord Hill of Oareford
“ In section 33I(2) (instrument and articles of government of sixth form college corporations)—
(a) in paragraph (a), after “requirements of” insert “Part 2 of”;(b) for paragraph (b) substitute—“(b) subject to that, may make such other provision as may be necessary or desirable.”
Lord Hill of Oareford
(a) after the definition of “further education” insert—““further education corporation in England” means a further education corporation established to conduct an institution in England;
“further education corporation in Wales” means a further education corporation established to conduct an institution in Wales;”;
(b) ”
Lord Hill of Oareford
“ For Schedule 4 substitute—
“SCHEDULE 4Instruments and articles of governmentPart 1General1 In this Schedule—
“instrument” means an instrument of government or articles of government;“the institution” means—(a) in the case of a further education corporation, the institution which the corporation are established to conduct;(b) in the case of the governing body of a designated institution, the institution;(c) in the case of a sixth form college corporation, the relevant sixth form college.Part 2England2 This Part applies in relation to—
(a) a further education corporation in England;(b) the governing body of a designated institution in England;(c) a sixth form college corporation. 3 In this Part “the body” means—
(a) in the case of a further education corporation or a sixth form college corporation, the corporation;(b) in the case of a governing body, the governing body.4 An instrument must provide for—
(a) the number of members of the body,(b) the eligibility of persons for membership, and(c) the appointment of members.5 (1) An instrument must make provision about the procedures of the body and the institution.
(2) In particular, an instrument must specify how the body may resolve for its dissolution and the transfer of its property, rights and liabilities.
6 (1) An instrument must make provision for there to be—
(a) a chief executive of the institution, and(b) a clerk to the body.(2) An instrument must make provision about the respective responsibilities of the body, the chief executive and the clerk.
(3) The responsibilities of the body must include—
(a) in the case of a sixth form college corporation to which section 33J applies, the preservation and development of the educational character and mission of the institution and the oversight of its activities;(b) in the case of any other sixth form college corporation, a further education corporation or a governing body, the determination and periodic review of the educational character and mission of the institution and the oversight of its activities;(c) in any case, the effective and efficient use of resources, the solvency of the institution and the body and the safeguarding of their assets.7 An instrument must require the body to publish arrangements for obtaining the views of staff and students on the matters for which the body are responsible under paragraph 6(3)(a) or (b).
8 An instrument must permit the body to change their name with the approval of the Secretary of State.
9 An instrument must specify how the body may modify or replace the instrument of government and articles of government.
10 An instrument must prohibit the body from making changes to the instrument of government or articles of government that would result in the body ceasing to be a charity.
11 An instrument must provide for—
(a) a copy of the instrument to be given free of charge to every member of the body,(b) a copy of the instrument to be given free of charge, or at a charge not exceeding the cost of copying, to anyone else who requests it, and(c) a copy of it to be available for inspection at the institution on request, during normal office hours, to every member of staff of, and student at, the institution.12 An instrument must provide for the authentication of the application of the seal of the body.
Part 3Wales13 This Part applies in relation to further education corporations in Wales.
14 Provision made by an instrument in relation to the appointment of members of the corporation must take into account the members who may be appointed by the Welsh Ministers under section 39 of the Learning and Skills Act 2000.
15 (1) An instrument must provide for—
(a) the number of members of the corporation,(b) the eligibility of persons for membership, and(c) the appointment of members. (2) An instrument may provide for the nomination of any person for membership by another, including by a body nominated by the Welsh Ministers.
16 An instrument must provide for one or more officers to be chosen from among the members.
17 An instrument may—
(a) provide for the corporation to establish committees, and(b) permit such committees to include persons who are not members of the corporation.18 An instrument may provide for the delegation of functions of the corporation to—
(a) officers or committees, or(b) the principal of the institution.19 An instrument may provide for the corporation to pay allowances to its members.
20 An instrument must provide for the authentication of the seal of the corporation.
21 An instrument must require the corporation to—
(a) keep proper accounts and proper records in relation to the accounts, and(b) prepare in respect of each financial year of the corporation a statement of accounts.22 An instrument must—
(a) provide for the appointment of a principal of the institution, and(b) determine which functions exercisable in relation to the institution are to be exercised by the corporation, its officers or committees and which by the principal of the institution.23 An instrument must make provision about the procedures of the corporation and the institution.
24 An instrument must provide—
(a) for the appointment, promotion, suspension and dismissal of staff, and(b) for the admission, suspension and expulsion of students.25 An instrument may make provision authorising the corporation to make rules or bye-laws for the government and conduct of the institution, including in particular rules or bye-laws about the conduct of students, staff or both.””
Lord Hill of Oareford
“ (1) LSA 2000 is amended as follows.
(2) In section 110 (secondary education), in subsection (5), for “51(3A)” substitute “16A(2)”.
(3) In section 143 (further education sector: designated institutions), in subsection (6)(b), for “section 29” substitute “any of sections 29 to 29C”.”
Baroness Benjamin
My Lords, many Afro-Caribbean families feel that their children are not being served well in schools. We all know that and it goes without saying. A lot of parents believe that the opportunity to have a free school is one advantage that will give their children an opportunity to have a fulfilled relationship in the classroom, as the noble Lord, Lord Knight, said. Having a teacher who is perhaps not fully trained is an opportunity to make sure that those young people who need just a bit of understanding and care can feel that the way that they are thinking and feeling is being embraced. Free schools have given them that opportunity, and if the teacher is not qualified—as we have heard from many noble Lords in the House—we will be doing a great service to those young people in our society who feel excluded in many ways.
Lord Hill of Oareford
My Lords, I agree with the noble Baroness, Lady Morris, that this has been an extremely good and interesting debate, and I am grateful to all noble Lords who have spoken from a range of different perspectives, and for some of the advice that I have received, which is helpful. At issue here is, in some way, a distinction between quality and qualification. There is complete agreement that we want the highest possible quality; the difference of opinion is whether the only way that the highest possible quality can be secured is through a specific qualification. I think I sum the mood up accurately by saying there is a feeling that quality is not defined only by one specific qualification.
It is certainly the case that improving overall teacher quality is very much at the heart of what the Government are trying to achieve through their education reforms. I agree with what all noble Lords and the noble Baroness, Lady Jones of Whitchurch, have said about the importance of teacher professionalism. Across the piece, the Government are introducing a range of reforms to try and raise the status of the profession. We are reforming initial teacher training, trying to ensure that we attract more top graduates, strengthening teachers’ powers and authority in the classroom, and streamlining performance management arrangements.
We think that qualified teacher status has an important part to play in the teaching profession. That is why, in March, we set up a review of teacher standards, led by Sally Coates, to make all teacher standards, including those that underpin QTS, clearer and more focused. The review recommended revised standards that will take effect from September 2012 and raise the bar for entry to the profession.
We certainly think that qualified teacher status has an important role in the system, but we think that it is possible to be an outstanding teacher without having QTS. A number of noble Lords spoke during our debate in Committee and again this afternoon about the value that individuals from a range of backgrounds, experience and expertise can bring to the classroom. It is true that under current arrangements such individuals can already bring their experience to bear in the classroom, but to a limited extent. Broadly speaking, they may only assist or support the work of a teacher with QTS and must be directed and supervised in doing so.
The core purpose of the free schools programme that lies at the heart of the issue is to make it easier for parents, teachers and others to set up new schools in response to demand from their local community for change in education provision in their area. That is the basis upon which free school proposers set out their educational vision. We want to give them the ability draw on as wide a pool of talent as possible to deliver that vision. If a free school believes that that means including among its staff a teacher who has a wealth of qualifications, experience and expertise, but who does not have QTS, we do not want to prohibit the free school from doing so.
My noble friend Lady Perry, the noble Lord, Lord Sutherland of Houndwood, the noble Baroness, Lady Warnock, and my noble friend Lady Benjamin all spoke persuasively about the need for some degree of flexibility. The kind of example that we have in mind would be that a free school might want to employ an experienced science teacher from the independent sector who has a strong track record of preparing pupils for top universities. That would be one example. We have a free school proposal from a group of independent schools that wants to set up a sixth-form college in Newham to try to get more children from disadvantaged backgrounds to go to top universities. My noble friend Lord Lucas mentioned another example in which the former head of Westminster School was caught by the rules. A free school might want to employ an engineer with a background in training and instruction to teach an engineering technical specialism.
Free schools know that recruiting high-quality teachers will make the biggest difference to the quality of education that they can provide for their pupils. Therefore, I believe that they will themselves want to ensure that the staff that they recruit have the right knowledge and skills, and that relates to the point that my noble friend Lord Storey made about how free schools will be accountable and what mechanisms will be in place to make sure that they want to employ the best possible teachers. As part of their application to the department to set up a free school, proposers have to set out how they will deliver the highest quality of teaching and leadership in their schools, and no school is allowed to proceed without robust plans for doing so.
Because they are new schools set up in response to parental demand, free schools are likely to have a particularly close relationship with parents, who, we believe, will hold them sharply to account for the quality of teaching. They will be subject to the same Ofsted inspection regime as all maintained schools. They will have a pre-registration inspection before they open and a full inspection by the end of their second year of being open.
My noble friend Lady Walmsley, with support from the noble Lord, Lord Sutherland of Houndwood, asked, importantly, how we would know what was going on. I would answer that, in part, by talking about the publication of results and parents holding to account, but it is also the case that staff employed in free schools who do not have QTS will be monitored through the school workforce census, which takes place once a year. The results of that will be published on the department’s website and we will all be able to see the extent to which this is happening or not happening.
Lord Knight of Weymouth
Beyond saying that there is quite a lot of flexibility in the proposal, can the Minister tell us whether the publication of the number of unqualified teachers in free schools would feature on the Ofsted risk assessment that we talked about last week? If there were a large number of unqualified teachers in a free school, that would mean that Ofsted would be keeping a closer eye on them.
Lord Hill of Oareford
I do not think that that would necessarily be the case. For that to be so, one would have to accept the premise that, for example, an extremely experienced science teacher with a long record of preparing children to go to university or someone with an engineering specialism was innately a greater risk to teaching standards than someone with QTS, and I do not believe that that is the case. However, we would have the data on the numbers. The early evidence from the first 24 free schools is that a minority are availing themselves of the freedom. We will see how that develops and, in response to the point raised by my noble friend Lady Walmsley, the information will all be out there in the public domain for people to see.
A particular concern was raised by my noble friend Lord Storey about safeguarding, and I hope that I can reassure him. Free schools will certainly need to have regard to the statutory guidance on safeguarding. The guidance says that all staff should undertake appropriate training. It also says that a senior member of the school’s management structure should have lead responsibility for dealing with child protection issues and liaising with other agencies where necessary. Free schools, like any other schools, have a statutory duty to undertake CRB checks on all members of staff. Free schools are required by their funding agreements to appoint a SENCO and a designated teacher with responsibility for children in care who hold QTS.
The Government do not think that giving additional flexibility to a small group of schools for a particular reason is a new idea. When the previous Government introduced academies, for example, they gave them a number of freedoms, such as the one to depart from the national curriculum. I do not think that in essence this issue is different. It is a permissive measure. There are accountability measures and I think that safeguards are in place. I therefore ask the noble Baroness to withdraw her amendment.
Lord Hill of Oareford
Perhaps I could say a couple of words now and obviously reply at greater length later. There are a couple of government amendments in this group.
Amendment 84C in my name is a technical amendment. It clarifies the Academies Act 2010 by removing any doubt about local authorities’ funding powers in relation to academies. Under Section 6(2) of the Academies Act, a local authority must cease to maintain a school once it converts to academy status. This is because academies are funded directly by the Secretary of State. However, in certain circumstances, local authorities might still want or need to assist academies: for example, where an academy is part of a private finance initiative contract held by the local authority. When a PFI school becomes an academy, it remains part of the PFI contract and as part of that contract the authority makes regular payments to the contractor in respect of that academy. It meets these payments from a combination of sources: funding from individual schools’ budgets, including a contribution from any PFI academies; revenue funding from the department; and funding from its own resources. When a PFI school becomes an academy, we ensure that the local authority is in a “no better and no worse” position in relation to the PFI contract than if it had remained a maintained school.
As I explained in my letter of 19 October to the noble Baroness, Lady Hughes of Stretford, a number of banks that finance PFI contracts have expressed concerns about whether local authorities have the legal power to make payments in relation to PFI academies. The Government believe that local authorities do currently have the power to assist academies financially or otherwise. However, we recognise the demand for this point to be put beyond doubt, which is what Amendment 84C seeks to do. The amendment clarifies local authorities’ existing powers in relation to academies; it does not place any new requirements or duties on local authorities. In order to provide clarity as early as possible, the amendment to Clause 78 provides for this new clause to come into force on Royal Assent.
Baroness Walmsley
My Lords, I apologise to my noble friend the Minister for standing up too soon.
I want to address the amendment in the name of the noble Baroness, Lady Jones of Whitchurch. Of course, this subject was discussed at very great length during the passage of the Academies Bill through your Lordships’ House. I agree with the noble Baroness that it is good practice, prior to making an application, for the proprietors of an academy to consult all the groups she has mentioned, and probably many others too. All those groups would have a justified complaint to the school if they were not consulted. The Act says that appropriate groups should be consulted, and there is no question that all those four groups are appropriate groups.
However, I would like to ask the noble Baroness what evidence she has that over the last 12 months, say, academies have not been carrying out that best practice and have not consulted those very relevant and appropriate groups prior to making the application. If we are going to make a change, we should have the evidence that there is the need for a change. Perhaps she can supply that evidence when she responds, because I do not think there is any.
Lord Hill of Oareford
My Lords, as my noble friend Lady Walmsley has said, we debated these issues at length and amended the consultation requirements during the passage of the Academies Act, which was just over a year ago. The fundamental question today, as it was a year ago, is how much detail about consultation we should prescribe in statute. When we discussed consultation during the passage of the Academies Act, the noble Lord, Lord Adonis, shared with this House his experience of consultation on the academies programme. He argued that just because the detail of a process is not set out in statute does not mean that it does not happen in a comprehensive manner.
Like the noble Lord, Lord Adonis, this Government do not believe that minimal legislation leads to minimal consultation, which was the point made by my noble friend Lady Walmsley. Also like him, and like schools and head teachers, we believe firmly in the importance and value of consultation. The department’s website contains advice on carrying out all stages of the academy conversion process, including consultation. A departmental official liaises with every converting school and among other things advises it on ways to ensure a fair and open consultation.
Ultimately, schools make the choice to convert and they are under a legal duty to carry out a reasonable consultation of appropriate persons. Given the variation in these circumstances, it is right that the school assesses, in carrying out its consultation duty, what is reasonable in its local community, rather than Ministers prescribing it from the centre. Once consultation is complete, it is the responsibility of the school to reflect on the responses and to decide whether to proceed with academy conversion. That will go ahead only with confirmation from the school to the department that it has carried out its legal duty to consult appropriate persons and that the school wishes to go ahead, having considered the consultation responses.
The noble Baroness raised two issues about whom to consult and when the consultation should take place. In relation to whom to consult, we think that schools can be trusted to assess who the appropriate persons are to consult according to the circumstances and that in those cases the appropriate parties, as my noble friend has just said, will include parents, pupils and staff. If we have concerns that consultation has not been adequate—for instance, if parents have not been consulted—these concerns will be raised and dealt with prior to the funding agreement being signed.
On the timing of the consultation, the noble Baroness pointed out that consultation should take place before a decision is made, and I agree. The consultation requirement in the Academies Act already reflects this principle. It requires that consultation should take place before a school is converted into an academy. As I think that the noble Baroness accepted, an application for an academy order is a procedural step and does not signify a decision that the school should become an academy. That does not take place until the funding agreement is signed, which may happen many months after the issuing of an academy order. With that in mind, both last year and still now, it seems right that the school can carry out its consultation and reflect on the responses to it right up until the point at which it decides to become an academy and signs the funding agreement.
We discussed consultation at length during the passage of the Academies Act but, as my noble friend Lady Walmsley has said, we have a key advantage now compared with when we last debated the issue a year ago. Our debate about the legal framework for consultation can now be informed by the experience of schools in implementing it. We have had around 1,100 academy conversions since the Academies Act was enacted. I would argue that for the noble Baroness, Lady Jones of Whitchurch, to ask the House to overturn the position it reached last year after a long debate, she would need to provide strong evidence that there is widespread disquiet about the consultation process. I do not think she has provided that evidence, and I think that that is because it does not exist. The department has had very few complaints from parents or other interested parties about the way that consultation has been carried out. This confirms my belief that the House got the issue right in the Academies Act 2010. I would therefore ask the noble Baroness, Lady Jones of Whitchurch, to withdraw her amendment.
Lord Hill of Oareford
“Academy orders: local authority powers
In section 6 of AA 2010 (effect of Academy order), after subsection (2) insert—“(2A) Subsection (2) does not prohibit the local authority from providing financial or other assistance in respect of the Academy, including by—
(a) making payments in respect of some (but not all) of the expenses of maintaining the Academy,(b) providing premises, goods or services for the Academy, or(c) making premises, goods or services available to be used for the purposes of the Academy.””
Lord Hill of Oareford
Baroness Verma
My Lords, I should like to speak to the government amendments in this group, tabled in the name of my noble friend Lord Hill. These amendments are the outcome of a great deal of work and good will on the part of the noble Lord, Lord Layard, and his colleagues, my noble friends Lord Wakeham and Lord Willis and the noble Lord, Lord Sutherland. I am extremely grateful for their efforts and pass on the thanks of my honourable friend the Minister for Skills, who heartily welcomes the amendments.
The amendments go to the heart of what needs to happen to expand the apprenticeship programme and create more opportunities. Amendment 89ZZB places a new duty on the chief executive of skills funding to “make reasonable efforts” to secure employer involvement in apprenticeship training for a broad class of people made up of all the groups covered by the apprenticeship offer. It also specifies that the guidance that the Secretary of State can issue to the chief executive must include guidance on carrying out that duty. It strikes the right balance between aspiration and pragmatism and complements the new duty on the chief executive of skills funding to prioritise funding, making the Bill even better legislation. Therefore, I urge your Lordships to support these amendments. I will of course respond to the noble Lord’s questions and arguments if other noble Lords do not speak.
Baroness Wall of New Barnet
My Lords, I, too, have put my name to Amendment 89ZZA. I welcome the opportunity to extend the congratulations that my noble friend Lord Young extended to the noble Baroness. I am sure she will be an asset to the team.
I just want to add to more or less everything that my noble friend said in the context of apprenticeships. What surprises me is the semi-reluctant manner in which the Bill is worded. It does not reflect at all the ambitions that the Government talk about in the goals that they have set to achieve apprenticeships or, perhaps more importantly, the way employers constantly remind the Government of the importance of apprenticeships. I know that my noble friend Lord Young referred to employers who still feel that apprenticeships are a burden. However, there are hundreds of employers who see them as an advantage to their businesses and have a real commitment to them. They feel that the Government may be saying one thing but doing another. That is, to say the least, very unfortunate, since apprentices are the core of major businesses.
My own experience is in the engineering sector, as noble Lords will know. Outside that sector, apprentices are now becoming much more important to the hospitality sector and others. Therefore, it surprises me that mixed messages are going out, the result of which is very confusing. I welcome what the noble Baroness said in responding to my noble friend. However, stronger language could be used in the drafting of the Bill—words such as “encourage” rather than “take note of” or other such phrases that are used in the Bill. Anything that can strengthen the enthusiasm that is out there is important.
My noble friend made particular reference to and emphasised the young apprentices who are coming in. There are major issues around young people not being able to engage with apprenticeships, although there are lots of schemes. I am certainly involved in one—the SEMTA Sector Skills Council, through its academy—that encourages young people to come off the unemployment register and works with SMEs to place those young people in businesses. There is a quid pro quo relationship in how that might be funded to give those young individuals a start in life. All the stuff that we hear about—the disruption that is often attributed to young people, and to which they contribute—really can be helped by individuals having a purpose. One of the things that I have found, as I am sure other noble Lords have, is that when you talk to young people who are on apprenticeships, they are absolutely delighted. When they come through them, they are even more thrilled. This is not about attracting a certain type of young person; it is about opening it up to everybody, because it is an opportunity. It is also an ambition for a lot of people. The country, as well as employers, needs these people,
I want to make a couple of quick comments about the other amendments in this section and about the procurements issue in particular. My noble friend referred to our Government’s intentions on this. Employers say to me and to people I work with, “You never see the Government doing this, yet we are being encouraged to do it”. If you consider the relationship between the SMEs and prime businesses, you would consider those people to be part of the procurement process; they buy from them and prime companies demand that SMEs have apprentice-trained people inside their businesses to ensure the quality of the product that they are producing on their behalf. We need some matching up of words—I was going to say rhetoric, but that is probably too harsh, given the way the noble Baroness has come back to us—to ensure that we are talking the same language and, more importantly, that these people have that opportunity. It is the Government’s policy to increase apprentices. We should be knocking at an open door when we have this discussion, rather than feeling that we are challenging them. I am delighted to be part of tabling this amendment.
Lord Elton
I am encouraged to rise briefly after what my noble friend has just said. Something has been worrying me since I was Minister for Education in Northern Ireland back in the 1980s: the difference in esteem granted to academic and non-academic choices of our children going to school. It was forced on me because we were the part of the United Kingdom that did not sign up to the end of the 11-plus, so there was a very stark contrast. My job was to try to get parity of esteem between the grammar schools and the secondary schools. I have noticed that vein going on through education after the end of the 11-plus: the great esteem given to an academic career, even after it was the only entry into a white collar job.
It seems to me that the introduction and the success of the apprenticeship scheme is the answer to the problem that I was looking for 30 years ago. If we can give children, and in particular their parents and their parents’ generation, the perception that it is as honourable and as rewarding to follow a practical career as an academic one, it will have a great effect on the way the young of the future see the choices before them. We will get a proper balance socially, academically and economically where it is needed. I am very glad to support my noble friend’s amendment.
Baroness Verma
My Lords, I want to respond to the amendments tabled by the noble Lord, Lord Young, and of course to respond to other noble Lords. I thank very much all noble Lords who have welcomed the government amendment. The previous Government, and the noble Lord himself, did a great deal to make the apprenticeship programme what it is today and gave us a strong foundation on which to develop our skills flagship even further. I would like to take this moment to reassure the noble Lord that the Government understand and share his concern for young people’s interests that lies behind his amendment. Indeed, our own amendment, discussed just now, underlines that point. However, the original offer to which the noble Lord refers would have meant that the chief executive of skills funding would have had to find jobs with employers for all the eligible young people who wanted an apprenticeship. While it is a noble aspiration, in reality the Government and their agencies simply cannot tell employers whom they should employ.
The redefined offer in the Bill constitutes a more robust deal for the same young people because we know that we can deliver it. It sets the right balance between the employer-led nature of the programme and the need for support from government that young people can rely on.
The noble Lord’s other amendments propose making apprenticeships a condition of government contracting and Investors in People status, as well as requiring the Government to publish numbers and targets for public sector apprenticeships. I understand why the noble Lord has tabled the amendments and that he wants to ensure that government do everything in their power to encourage employers to take on apprentices, but a great deal is already being done to achieve this. I know that my honourable friend the Minister for Skills met the noble Lord, Lord Young, in September to explain this and has written to update him since. The Government believe fundamentally in a voluntary rather than regulatory approach. However, I know that the Minister has also reiterated to the noble Lord his determination to explore every opportunity to do more, provided that we do not put extra burdens on smaller employers and risk any breaching of the law. I would actively encourage the noble Lord to continue those conversations with my honourable friend the Minister for Skills or with me. My door is always open.
The noble Lords, Lord Layard, Lord Willis and Lord Elton, spoke about clear vocational routes for young people. I absolutely agree. For far too long we have undermined the great skills that come through apprenticeships. We want to make sure that young people who have an aptitude towards these skills—usually a very good aptitude—get as much support as we can provide. That is why, from the £1.4 billion in funding that we have put in for 2011-12, £800 million has been directed towards 16 to 18 year-olds. We are absolutely committed to ensuring that we work with employers to give young people—who, as was mentioned, may not be able to go straight into an apprenticeship—access and a pathway to prepare them better. We would still see them as apprentices and ensure that within a maximum of six months they were ready to take on a fully fledged apprenticeship.
The noble Lord, Lord Young, talked about the support for SMEs, GTAs and ATAs. Two-thirds of apprenticeship opportunities are offered by SMEs, which is why we want to make sure that we are supporting the SME sector by simplifying the systems and reducing the barriers so that SMEs are able to offer greater opportunities for apprenticeships.
It has been a great success story. In fact, I was really pleased to hear noble Lords say that. There has been an increase in apprenticeships, which is of course what we want. We know that apprenticeships are a wonderful route into skilled employment. However, we must not see them as a panacea for unemployment. The scheme is there to train and fill a need that employers have. As the noble Lord knows, these apprenticeships are employer led; they are developed by employers because they are at the heart of knowing what they need. It would therefore be futile for us to impose upon employers restrictions and regulations that would bind them to artificial targets and barriers.
We offer incentives to employers to recruit 16 to 18 year-olds. We know that it is crucial that we help them into employment, and the noble Lord is absolutely right to say that too many of them are unable to access it. That is why the Department for Education is fully funding its apprenticeships, and that is why we are there to support them absolutely. However, we must not forget apprenticeships for those who are older because they also need to be able to respond to the needs of the global economy as it changes. More than 100,000 employers offer apprenticeships. That is not enough and we want more to happen, but they are in 160,000 locations; two-thirds are offered by SMEs, which form 99 per cent of all businesses; and large businesses have the capacity to offer apprenticeships in larger numbers.
There is much to be done, but we are doing and building on what has gone before. I hope that I have been able to satisfy the noble Lord because I really believe that he and the Government share the same wish: to ensure that our young people and older apprentices all get an opportunity to contribute fully to the life of this country and, in turn, to the global economy. The Government’s amendments will further enhance the deal that we offer young people by prioritising funding for their apprenticeship training. I hope the noble Lord will feel encouraged that we want young people to start their careers on a sound and positive basis through apprenticeships—as, indeed, the noble Lord said. We differ only in our view on the most effective way to achieve that, but I am pretty certain that the noble Lord will feel sufficiently reassured to withdraw and not press his amendments.
Lord Young of Norwood Green
My Lords, I thank the Minister for her response and thank all those noble Lords who have participated in a profoundly important debate. The noble Baroness said in her first contribution that the government amendment strikes the right balance between aspiration and pragmatism. For my money, there is too much on pragmatism and not enough on aspiration. I do not quarrel with the direction but believe that the aspiration has to be stronger, and I shall develop that point.
I rarely disagree with my noble friend Lord Layard, and I do not disagree with him on this matter because there is a large measure of agreement between us. Of course I welcome what the Government have done. I do not want to be the party pooper and say that the government amendment does not make any improvement —it does, but it is not enough. It ducks the issue in a couple of important areas.
My noble friend Lady Wall talked about the record of many good employers, and that has been echoed through this debate. There are some brilliant employers. As you go around the country, you can find some wonderful schemes, but there are not enough. That is the real problem. You can muck around however you like with the statistics, but you are then faced with looking at the number of companies that take part—between some 4 per cent and 8 per cent, overall—and that is not exactly a staggering example. When only a third of FTSE 100 companies take part, we have a long way to go. Those are not my figures; I obtained them from Library research.
My noble friend Lady Wall was right to say that we need to open up, and indeed we did open up, apprenticeships—
Baroness Verma
My Lords, perhaps I may reiterate to the noble Lord that we are in economic dire straits, but still we have seen an increase in apprenticeships. We are seeing a way forward with businesses by making sure that they are doing their bit in taking on apprentices. We are simplifying the system whereby employers can take on more apprentices. It is unfair of the noble Lord to say that we are not doing enough. Against the backdrop that we have, it is a very positive sign that employers are taking on apprentices. Of course there is more to do. We will carry on doing it. However, it is ungracious to say that employers are not taking on apprentices.
Lord Hill of Oareford
“Securing the provision of apprenticeship training
(1) Part 4 of ASCLA 2009 (the Chief Executive of Skills Funding) is amended as follows.
(2) In section 85 (encouragement of training provision etc for persons within section 83)—
(a) for subsection (1)(a) substitute— “(a) make reasonable efforts to secure that employers participate in the provision of apprenticeship training for all persons who are within section 83(1)(a) or (b) or section 83A(4), (5) or (6);”;(b) in subsection (1)(b), for “training within the Chief Executive’s remit” substitute “apprenticeship training”;(c) in subsection (2), after “provision of” insert “apprenticeship”;(d) in the heading, for “Encouragement of training provision etc for persons within section 83” substitute “Provision of apprenticeship training etc for persons within section 83 or 83A”.(3) In section 118 (guidance by Secretary of State), after subsection (1) insert—
“(1A) Guidance under this section must include guidance about the performance by the Chief Executive of the duty imposed by section 85(1)(a).””
Lord Hill of Oareford
Lord Hill of Oareford
“Direct payments: persons with special educational needs or subject to learning difficulty assessment
(1) In Chapter 2 of Part 9 of EA 1996 (ancillary functions of local authorities) after section 532 insert—
“Direct payments532A Persons with special educational needs or subject to learning difficulty assessment
(1) A local authority in England may make a payment (a “direct payment”) for the purpose of securing the provision of any goods and services mentioned in subsection (2) to a person (“the beneficiary”)—
(a) for whom the authority maintain a statement of special educational needs under section 324, or(b) who is subject to learning difficulty assessment by the authority.This power is subject to subsection (3).(2) The goods and services referred to in subsection (1) are—
(a) where the beneficiary is within subsection (1)(a), special educational provision specified in the statement of special educational needs;(b) where the beneficiary is within subsection (1)(b) and the authority have arranged for an assessment to be conducted under section 139A of the Learning and Skills Act 2000, provision identified in the assessment as required to meet the beneficiary’s educational and training needs;(c) transport or anything else that may be the subject of arrangements under section 508B(1), 508F(1) or 509AA(7)(b) that apply in relation to the beneficiary.(3) A direct payment may be made only in accordance with a pilot scheme made under section 532B.
532B Pilot schemes
(1) The Secretary of State may by order make pilot schemes in accordance with which direct payments may be made under section 532A.
(2) Subject to the following provisions of this section, a pilot scheme may include such provision as the Secretary of State thinks appropriate.
(3) A pilot scheme must include provision about—
(a) circumstances in which, and the descriptions of goods and services in respect of which, direct payments may (or may not) be made;(b) descriptions of persons to or in respect of whom direct payments may (or may not) be made;(c) conditions with which a local authority must comply before, after or at the time of making a direct payment;(d) conditions with which a person to or in respect of whom a direct payment is or may be made may be required by a local authority to comply before, after or at the time the payment is made;(e) the principles by reference to which the amount of a direct payment is to be calculated;(f) circumstances in which a local authority may or must stop making direct payments;(g) circumstances in which a local authority may or must require all or part of a direct payment to be repaid, by the person to whom the payment is made or otherwise;(h) the monitoring of the making of direct payments, of their use by the persons to whom they are made or of the goods and services they are used to secure;(i) the arrangements to be made by a local authority for providing persons to or in respect of whom direct payments are made with information, advice or support in connection with direct payments;(j) treating such support to any extent as goods or services in respect of which direct payments may be made.(4) The conditions referred to in subsection (3)(c)—
(a) must include a requirement to obtain the written consent of the person to whom a direct payment is to be made before making the payment;(b) may include a requirement to obtain the written consent of one or more other persons before making a direct payment.(5) The circumstances referred to in subsection (3)(f) in which a local authority must stop making direct payments must include where the consent required by virtue of subsection (4)(a), or any consent required by virtue of subsection (4)(b), is withdrawn.
(6) A pilot scheme must include provision for a sum required to be repaid to a local authority by virtue of the scheme to be recoverable as a debt due to the authority.
(7) A pilot scheme may provide for paid-for goods and services to be treated as goods and services provided or arranged by a local authority in pursuance of a statutory duty specified in the scheme.
(8) A pilot scheme may provide for paid-for goods and services to be treated in that way—
(a) to the extent set out in the scheme, and(b) subject to any conditions set out in the scheme.(9) The only statutory duties that may be specified are—
(a) section 324(5)(a)(i) (duty to arrange special educational provision specified in statement of special educational needs);(b) section 508B(1) (duty to make travel arrangements for eligible children);(c) section 508F(1) (duty to make arrangements for provision of transport etc for adult learners);(d) section 509AA(7)(b) (duty to make, and secure that effect is given to, arrangements for provision of transport etc for persons of sixth form age). (10) “Paid-for goods and services” are goods and services acquired by means of a direct payment.
532C Pilot schemes: local authorities and duration
(1) An order under section 532B(1) making a pilot scheme must specify—
(a) the local authorities in respect of which the scheme operates, and(b) the period for which the scheme has effect.(2) The period specified under subsection (1)(b) must not exceed two years, subject to subsection (3).
(3) An order under section 532B(1) may extend the period for which a pilot scheme has effect, subject to subsection (4).
(4) The period for which a pilot scheme has effect may not be extended so as to end after the end of the relevant four year period.
(5) “The relevant four year period” is the period of four years beginning with the day on which the Education Act 2011 is passed.”
(2) In section 568 of EA 1996 (orders)—
(a) in subsection (3), after “other than” insert “an order to which subsection (3A) applies or”;(b) after subsection (3) insert—“(3A) This subsection applies to an order under section 532B(1) (direct payments: pilot schemes), apart from the first order to be made under that subsection.
(3B) A statutory instrument which contains (alone or with other provision) an order to which subsection (3A) applies may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
(3) The provisions inserted into EA 1996 by subsections (1) and (2) are repealed at the end of four years beginning with the day on which this Act is passed.”
Lord Hill of Oareford
I start by setting out the context for this new clause. Our SEN and disability Green Paper set out the biggest programme of reform in education, social care and health support for disabled children and those with special educational needs in the past 30 years. Our proposals respond to the frustrations that children, young people and their families have with the current system and seek to give parents more control over the support that their family receives.
We said in the Green Paper that we would give every child with a statement of SEN or a new education health and care plan, and their family, the option of a personal budget by 2014. The evidence shows that a personal budget can give families more flexibility and empower them to make decisions about the support they receive. Families that took part in the individual budget pilot, which began under the previous Government, said that they feel they have more choice and control over the support they receive and better access to and greater satisfaction with services. We want to give more families access to personal budgets because of the evidence of the benefits that can bring. One element of a personal budget can be a direct payment to a parent or carer to buy a service or piece of equipment for their child. In those individual budget pilots, nearly two-thirds of families opted to have a direct payment as part of their personal budget.
I am grateful to the noble Lords, Lord Rix, Lord Low and Lord Touhig, and a number of external organisations, including the Special Educational Consortium for the work that they have done with us since the original draft clause and scheme was circulated in September. Their contributions have helped us to improve our plans for the pilots and we look forward to continuing to work with them. I also thank them for the work they have done with us on improving the system for complaints about schools. I have said that we will not commence Clause 44 of the Bill until we are confident that the department systems are right, and I look forward to working with them on that.
This new clause and the associated scheme would allow local authorities in our Green Paper pathfinders and the individual budget pilots to test the use of direct payments in education for children with SEN. I should stress that we are only proposing a power to pilot the use of direct payments. We can see benefits for children and families but we need robust evidence from the pilots of what works and how to avoid potential problems. The new clause is broadly based on the legislation that allows the use of direct payments for health, including many of the safeguards that this House secured during the passage of that legislation. I apologise to the House for the lateness of the amendment to the new clause, laid by the Government yesterday, which makes the first order setting out the detail of how the pilot will operate subject to an affirmative resolution. That relates to concerns raised by the noble Lord, Lord Touhig, and the Delegated Powers and Regulatory Reform Committee which recommended that this is an appropriate level of parliamentary scrutiny. I accept that view and hope that we will be able to secure time for that debate as early as possible to allow maximum time for the pathfinders to test direct payments.
There are also a number of safeguards contained in the scheme which sets out how the pilots must operate to ensure that children, families, and local authorities taking part in the pilot are protected. First, the pilots will be entirely voluntary for children, young people and families. The local authority must obtain written consent before making a direct payment, and this consent can be withdrawn at any time, in which case the authority must make other arrangements to make the provision. The making of a direct payment does not waive, suspend or repeal any existing statutory duties. Linked to this point, I would like to make it clear that all of the work of the pathfinders will take place within the current statutory framework.
The pathfinders will be required through the scheme to provide appropriate and effective information, advice and support to prospective recipients of direct payments. We have learnt from individual budget pilots that where this is done well, personal budgets and direct payments can be accessible to families from all backgrounds. The local authority will be required to monitor and review the use of the direct payments, and this will be in addition to their existing statutory duty to conduct an annual review of statements.
The purpose of the pilot is to gather information about what works in practice, so it will be evaluated as a distinct element of the wider evaluation of the SEN Green Paper pathfinders. The evaluation will capture information about the impact and effectiveness of direct payments, including cost-effectiveness; the processes local authorities establish to agree, quantify and cost the services to be delivered by direct payment; and potential barriers to delivery. We will ensure that it captures information on age, impairment, and type of need, as well as take-up by different socioeconomic groups. The pathfinder authorities will benefit from the expertise of the pathfinder support team, and they will work closely with the evaluators to provide support and specialist advice, and will help share any emerging learning, including that coming from the evaluation.
I hope that noble Lords will agree with me that direct payments for educational provision have the potential to improve the quality and the choice of support available to children with SEN and their families. There are, however, important and sensitive issues to address and it is right that we should test how we can make this approach work. That is what these pilots will enable us to do, and that is what this clause sets out to achieve. I beg to move.
Amendment 89ZZDAA (to Amendment 89ZZD)
Lord Hill of Oareford
“(3A) A statutory instrument which contains (alone or with other provision) an order under section 532B(1) (direct payments: pilot schemes)”
Baroness Jones of Whitchurch
My Lords, like many noble Lords in the Chamber, we welcome the direct payments initiative. It is right that it should be piloted and closely scrutinised. We will play our part in that. I hope that the Minister is able to reassure us that the outcome of the pilots will be fully debated by your Lordships' House in due course. I suspect that we will find that, as with many initiatives, it is the detail that matters and how the new powers are interpreted by parents and local authorities alike. We need clear advice and updates on how the pilots are working in practice. The outcome has to be an improvement in the provision of SEN services in schools and the pilots will need to demonstrate that all SEN children, not just those of middle-class parents, have an improved quality of service.
Noble Lords have raised a number of important questions in the short debate, but there remain some concerns that I hope the Minister will be able to help me with. Like the noble Baroness, Lady Sharp, I say that these points may have been covered in the discussions, but forgive me if I am not up to speed on some of the discussions that have taken place. First, how can we be assured that the payments will be enough to cover identified need so that the parents will not be expected to make up the difference from their own budgets? Secondly, how will other families be assured that other budgets will not be cut to fund these payments, thereby adversely affecting other services provided by the local authorities? Thirdly, how will the special position of looked-after children be protected? For example, foster carers will potentially administer the payments but might be perceived to have a conflict of interest, as they are also employees of the local authority. Lastly, on the level of support and advocacy provided to parents, which the Minister touched on, can he reassure us that that will be independent of local authorities because undoubtedly parents will find the system new, potentially difficult and overwhelming in terms of the choice and the bureaucracy with which they are faced? Perhaps he could clarify the level of independence that would be available.
A separate, procedural point is that we find ourselves, once again, tonight making policy on important issues on the hoof. These issues would have benefited from a longer period of consultation, both within the House and outside. The legislation, as drafted, has been placed in completely the wrong part of the Bill; it is in Part 7, which deals with post-16 education and I do not suppose that the Minister is suggesting that these payments are restricted to post-16. The Government should do better than this and, if they do not, they cannot complain when humble Back-Benchers follow their example and try to misuse the structure of Bills to put bits of legislation in the wrong place.
Notwithstanding all that, we support the intent of the Government’s proposals and we look forward to the future scrutiny which, we trust, will occur in due course.
Lord Hill of Oareford
My Lords, I am grateful for the broad welcome from all sides of the House for what we are attempting to achieve with these pilots and for what we are trying to do to get a better system for the most vulnerable children in the country from all backgrounds. As a number of noble Lords have made clear in their questions, there are a number of important issues to get right and that is the point of the pilots. We shall work through some of the issues that have been raised as a result of the pilots.
The noble Lord, Lord Touhig, and the noble Baroness, Lady Jones of Whitchurch, raised the issue of evaluation. There will certainly need to be very careful evaluation. We would want to share that with noble Lords. I was very grateful for the remarks made by the noble Lord, Lord Touhig, about the way in which we have managed to work with him, others and the Special Educational Consortium and I want that to carry on. The first evaluation results will probably arrive next April and there will be another report next September, but we want this to be an open process. I am very happy to share the findings as we go along and to work on ensuring that everything works as we want it to. As I said before, I think we are all agreed on the direction in which we want to go but, of necessity, difficult questions arise, some of which have been posed, about funding. The only way to answer those questions is to work through them with an open mind, and not to prejudge the outcome but to try to come up with solutions to them.
My noble friend Lady Sharp asked a couple of questions, first, on behalf of Natspec, in relation to the element of funding to local authorities. During the pilots, a local authority and a college will need to agree before a direct payment can be made. We think it is right to do everything possible to give students greater control over the services that they receive, so we are testing direct payments through these pilots to ensure that we learn everything about how to make them work in practice.
On transport, the pilots of direct payments will not affect current local authority duties or budgets, including those for transport, so if a local authority were to agree a direct payment for transport with a student, it would need to agree what the payment was for and exactly how much it would cost. My noble friend Lord Lingfield asked about top-ups: will parents be required to top up? The noble Baroness, Lady Jones, was concerned about that too. In no circumstances should the amount of the direct payment be set at a level that would require someone to pay from their own resources in order to secure part or all of the provisions set out in the child’s statement of SEN or the young person's LDA. If an individual wishes to purchase support that is additional to that needed to meet the assessed needs, it would be open to them to do so.
That links in to the question put by the noble Lord, Lord Touhig, about what is in the statement, as the statement determines what is delivered, how much things cost and so on. We know that local authorities are currently required to specify the provisions necessary to meet the needs of a child in the statement, but we also know that the quality of statements and learning difficulty assessments varies significantly. We think that the process of establishing a direct payment should, by itself, help in this regard because in order to make a payment to a family, the local authority would have to quantify exactly what provision is required. Our experience with the individual budget pilot supports this view, and parents report the initial discussions to establish a budget as one of the significant benefits of the overall pilot. I think that will help address that concern. So far as the question about the independence of the support is concerned, I will follow it up and write to the noble Baroness with more particulars on it.
I am grateful to noble Lords for the support for this. I hope it will mark a significant step forward. We hope these pilots will work.
Baroness Verma
My Lords, the amendment moved by the noble Lord, Lord Stevenson, seeks to place a statutory requirement in the Bill whereby the interest rate at which borrowers are charged while they are studying and until their first repayment is no more than the government rate of borrowing for the preceding financial year. I thank the noble Lord for raising this issue, and I hope that he will find my response helpful. I will not put it in the context of trick or treat.
The current system provides borrowers who go on to earn the highest incomes with an interest subsidy while they are studying. This amendment is unnecessary because high-earning graduates are well placed to contribute to the cost of their higher education, and it also makes it unprogressive. The new arrangements that we are proposing mean that, in practice, the only people who are affected by the decision to charge a real interest rate while studying are those high-earning borrowers who pay back their loans in full. Those who do not fully pay back their loans will see that part of their borrowing written off. What is more, charging a real rate of interest is part of a progressive package of reforms, and any proposal to change this rate of interest should be considered in the round.
The changes that the noble Lord is suggesting would have a significant cost and impact on the sustainability of the new student finance package. Our analysis shows that charging students the government rate for borrowing—currently, RPI plus 2.2 percentage points—means that we would have to find a further £100 million per year. If we were to reduce this further, as has been suggested, to an interest rate of RPI only, while studying, or if we were to extend this rate until the student makes their first repayment, it would mean the costs would be even greater. The Government are committed to the progressive nature of the repayment system and want to ensure that those who earn most and can afford it contribute most towards the cost of their education. I am sure that the noble Lord does not disagree with that.
The noble Lord spoke about women being affected disproportionately. We estimate that around 35 per cent of female graduates will repay less than those on the current system. This is in large part because since women are more likely to be lower earners, they are more likely than men to benefit from the features of the progressive repayment system, including the protection afforded by the higher repayment threshold.
We do not want to have a negative impact on disadvantaged groups, and that is why the Government are committed to ensuring that our universities remain open to everyone with the ability to succeed in higher education. Our equality impact analysis indicates that our student funding reforms will not have a negative impact on protected groups. With our new repayment terms, we estimate that around a quarter of graduates— those on the lowest incomes—will pay less than they do on the current system.
The noble Lord asked about Sharia-compliant loans. We are actively investigating the possibility of introducing an alternative finance system and are working with organisations such as the Federation of Student Islamic Societies and the National Union of Students. We are clear that we want a single student loan system that can meet the needs of the majority of students, where possible. We will seriously consider proposals to change the administration or presentation of the system in ways that can address the doubts that members of some faiths might have about accessing student finance. However, any proposals would need to ensure that the overall financial outcomes for government are the same and that all student loan borrowers are treated the same in accordance with existing legislation. It is important to get this right, and I know the noble Lord agrees with me that it may take a little longer, but the outcome must be absolutely right.
The noble Lord raised the RPI/CPI question. No single measure of inflation is appropriate for all purposes. It is important to view the package of reforms in the round. We need a student finance system that is progressive, sustainable and affordable for the taxpayer, and that is what we have delivered. A measure of inflation that brought in lower contributions from the highest earning graduates would require us to be less generous with the progressive elements of the system that protect our low earners.
The Government’s student finance package is progressive and sustainable. It rebalances investment in higher education so that there is less public subsidy and a greater contribution from those who benefit the most. This can only be right. Our proposals create a system that provides more generous support for students from lower-income households and protects low-earning graduates. We believe that this is a fair deal. For those reasons, I cannot accept this proposal but I am very happy to continue meeting the noble Lord to discuss his concerns further.
Lord Stevenson of Balmacara
My Lords, I thank the Minister very much for that and in particular for her closing remarks about continuing the discussions. I think it would be worth having a further round of that. I gather there is a date now in the diary and perhaps we can pick it up at that point.
I would like to make three small points, and one at the end. First, it was good to hear that the difference in the cost to the public sector of going from 2.2 per cent to 3 per cent was only £100 million a year. I say “only” in a casual, flippant way—of course it is a lot of money, I understand that, but it is not a lot if one has to balance the impact and the damage done because of the increase. I think that is worth bearing in mind. I am grateful to have that information and I will think about it.
Secondly, the Minister said that the proposed changes will not have an adverse impact on admissions, but I think I am right in saying that the reduction in admissions reported last week was highest among mature students and women. That is a worrying sign. It may not be reflected when the full admissions figures come in, but even at this early stage of admissions, which is primarily for medicine, veterinary science and Oxbridge, those reductions are worrying and we need to bear them in mind.
Thirdly, on the point of whether or not the loans as currently proposed are Sharia compliant, I am grateful to the Minister for saying what she did on that. This is something that we perhaps could do by correspondence because we share a common wish that this works out well and that there is not an artificial or even a real division between the systems of loan that are appropriate across the whole country.
Finally, although it is fantastic that both full-time and part-time students who go on to higher education will be able to do so free at the point at which they enter the system, there is a price to pay for that. Underneath all the rhetoric, the truth is that this is a progressive system only because out of it will come a very large number of people—perhaps 50 per cent of the cohort—who do not earn enough to go on to a statutory repayment basis. It is a sort of race to the bottom and a crude way of depressing wages, and that cannot be right. There must be a better way of getting this across. If the progressive nature of this is really a way of separating out those who are benefiting from higher education and get more than the average wage in the country from those who do not, the phrase that is being used—those who earn more should contribute the most—begins to sound more like a graduate tax than anything else. Having said that, I hear what has been said tonight and I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, I shall also speak to Amendment 89ZA in the names of the noble Baronesses, Lady Brinton and Lady Sharp of Guildford, and myself. We are of course delighted that the Government have accepted that the statutory payment due date for all those studying part-time will be the April which falls four years after the start of their course. A potential injustice has been avoided and the change represents a step towards breaking down the barriers to part-time study.
Once this Bill becomes law, the situation seems to be that part-time fees are set to go up from about £1,000 per annum, which is the latest DES figure, to £6,750. Part-time students will not be eligible for maintenance loans or grants as they are at present but such students will have to borrow to pay the much higher fees that are going to be charged. I worry about this radical change to the current position and whether the existing range of part-time students, who are mainly mature, female and people who say that they missed out the first time around, will continue to enrol on part-time courses.
I have some questions to leave with the Minister. Why are the Government regulating part-time fees when the existing system seems to be working? If a university is setting a fee which it thinks the market will bear and the Government are prepared to extend its voucher system to part-time students, why put in an inducement to raise that fee, which will be hard to resist, to £6,750? Why not try it for a year or two and, if necessary, regulate at that point if it is not working?
As has already been said, not all university part-time course structures fit neatly across four years and not all students wish to study at the same level of intensity each year. It must be to the student’s advantage to study at the pace that best suits their lifestyle and commitments. Universities have reacted to that by becoming more flexible in terms of evening and weekend study, and study outside the traditional academic year.
Given that, I have some sympathy with the case that has been made by million+ that it would be much more helpful for students if universities were able to charge part-time fees on a pro rata basis linked to the credits undertaken and the full-time fees set by the university for the course in question.
HEFCE currently provides £368 million to institutions to support them with the additional costs of attracting and retaining students from the most deprived areas and those in receipt of disabled student allowances. The early years allocation from this fund has led it to attract 20 per cent of its newest students from the 25 per cent most disadvantaged communities in the country, 12,000 current students with registered disabilities and 18,000 students who access higher education through targeted access, taster and opening programmes. When the Minister replies, perhaps she will reassure us that the earmarked funding of this nature will continue. I look forward to hearing the answer to these questions.
Baroness Verma
My Lords, first, I thank my noble friend and the noble Lord for their warm welcome to the Government’s response. The amendment in the names of my noble friends Lady Brinton and Lady Sharp, and the noble Lord, Lord Stevenson, seeks to extend the repayment due date. I also thank them for championing this point and apologise for the delay in arranging a meeting with my right honourable friend the Minister for Universities and Science and myself. As noble Lords know, I take pride in delivering on my commitments and I am sorry that there has been this delay.
My right honourable friend has listened carefully to the debate in this House. He has considered all the arguments and has asked his officials to have those further discussions. While we are not able to accept the amendment as it was laid, I am pleased to confirm that through secondary legislation we will set the repayment due date for part-time students as the April which falls four years after the start of their course or the April after a student leaves their course if that is sooner. A letter has been laid in the House Library to this effect, and I am pleased to note that this change has been resoundingly welcomed by the sector.
My noble friend Lady Brinton asked about widening participation. To ensure a fair deal for poorer students, we have announced a new £150 million national scholarship programme to support students from disadvantaged backgrounds. I will write to my noble friend on HEFCE’s widening participation funding. I also hope that she and the noble Lord will take the opportunity later this week to discuss this and all other issues raised by noble Lords today with my right honourable friend.
My noble friend and the noble Lord asked about regulation. My noble friend proposes a more rigid system of regulation than that put forward by the Government. We do not believe that there is evidence that such a system is needed. Our proposals establish a common framework within which higher education institutions have flexibility to set their own pricing. They need to be sensitive to the level of pricing that potential students will bear. Part-time students may simply not accept charging over and above the relevant proportion for their full-time equivalent. Our proposals protect students by ensuring that their loan will cover the full amount charged and by securing investment in widening participation and fair access. We will of course carefully monitor the new system and, if we need to, we will review and revisit it.
The noble Lord, Lord Stevenson, asked about the regulatory burden. This cap will enable higher education providers to set their own charges as they do now but up to a maximum amount specified in regulations. We do not believe that this will cause an unnecessary regulatory or administrative burden. Our proposals establish a common framework.
I look forward to further discussions with the noble Lord, Lord Stevenson, and my noble friends Lady Brinton and Lady Sharp. This week, my right honourable friend will speak to them and I hope that we will have some fruitful discussions. Therefore, I hope that my noble friend will withdraw her amendment.
Baroness Brinton
I thank the Minister for her response and the noble Lord, Lord Stevenson, for his contribution. There is much agreement about the principle of the repayment of fee loans for part-time students. The other issues raised are complex and they sit beneath the primary legislation. I am grateful for the meeting to be held later this week and I am pleased that the Minister thinks that we can have fruitful discussions.
The only point that I would make is that neither myself nor the noble Lord, Lord Stevenson, think that we are proposing a tighter regulation base. In fact, the present system will constrain universities and students because it is rigid and, as I said earlier, may provide a law of unintended consequences where some students may bizarrely end up paying more than the cost of their course because of this structure of breakdown. Those are the discussions that I hope we are aiming for.
As I said at the end of my speech when introducing this amendment, I want to end on a positive note. I thank the Minister and the Government for agreeing to the principle of this amendment. I look forward to the revised legislation coming through and I beg leave to withdraw the amendment.
Lord Hill of Oareford
Lord Hill of Oareford
My Lords, I end with a whimper and not a bang. As noble Lords will recall, we agreed four government amendments when we discussed school inspections last week. Those amendments to Clauses 39 and 41 mean that, with the exception of the first set of regulations made under the new powers inserted by these clauses, regulations will be subject to the affirmative procedure. I refer to the amendments that I introduced in response to the points raised by the noble Lord, Lord Hunt of Kings Heath.
The two amendments before us are consequential to those amendments and were unfortunately overlooked. Amendments 89ZC and 89ZD make minor drafting changes to Clause 78, “Commencement”, so that it refers to the right subsections, including those applying the affirmative procedure. This does not affect the commencement of the clause. I beg to move.
Baroness Jones of Whitchurch
My Lords, I was trying not to get drawn into ending on a whimper as well. I was not going to say anything, because there is nothing to be said, except to thank the noble Lord for his courtesy so far. I look forward to Third Reading in due course.
Lord Hill of Oareford