Education Bill

Andrew Percy Excerpts

Monday 14th November 2011 Commons Chamber

[Mr Hayes]

My hon. Friend is right. We ought to declare that we share an interest in that topic and that we might have some personal interest in ensuring that there are sufficient craft skills to maintain our historic vehicles—although his demands in those terms are considerably more numerous than mine.

The sector has welcomed the proposals to offer colleges more freedom. Colleges have long called for such an approach. In the long years that I spent in the shadows before the electorate elevated me to the light, I remember hearing from colleges across the country that they hoped, wished and longed for a Government who would recognise that power is best vested in the hands of those closest to where it is exercised. Colleges should be able to respond to their learners and employers in the way the Bill facilitates. It is therefore unsurprising that, in the public evidence sessions of the Bill, the Association of Colleges said in written evidence that the legislative requirements removed by the Bill,

“will strengthen rather than diminish the historic community role of Colleges and strengthen the importance of strong governance”.

I wholeheartedly agree.

Lords amendments 47 to 71, changes which I recognise were made late in the Bill’s passage through the other place, have been made in the context of a changed further education landscape. 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. That decision exposes colleges to the full rigours of the Government expenditure regime and means that they will lose the flexibility to phase expenditure between different financial years and that they will need to work within a financial year that does not line up with their academic year. Such a decision also makes it likely that the very freedoms that were introduced to enable them to borrow without seeking permission will need to be taken away from them, and that even tighter constraints will need to be introduced.

I would like to thank Baroness Sharp for raising those issues in the context of the sterling work she is doing as chair of the inquiry into colleges in their communities. In debating these important amendments, it is vital for me to emphasise the significance of the ONS decision. We were already well on the way to freeing the sector from some of the diktats, bureaucracy and unnecessary regulation that had so hampered and inhibited people from exercising their long-cherished desire to respond proactively to the interests of learners in the way I have described. Nevertheless, the ONS’s reclassification has turned our desire into an imperative and we are working closely to try to persuade it to rethink that classification, because it will have profound effects on the FE sector. The late changes made in the other place, which we are debating for the first time in this House today, were made because of that ONS classification. Those and other controls would all act as significant barriers to college growth and would stifle innovation and creativity in our further education sector. As I said, it is our intention to make the necessary legislative and administrative changes to encourage the ONS to reclassify colleges back to the private sector which, as my noble friend Lord Hill said in the other place, is where successive Governments have wished them to be.

I want to mention the ability that Lords amendments 49, 58 and 69 will give colleges to modify or replace their instruments and articles of governance. In the world I have described—the picture I have painted—the additional freedoms that colleges will enjoy necessitate a new approach to governance. We need colleges to rise to the occasion. I am confident that they will, but it is partly a case of rethinking how colleges are governed. Colleges will continue to be required to comply with a statutory governance framework, but that has been significantly simplified to allow colleges the freedom to decide how best to shape their governance arrangements to meet the needs of their learners, employers and the local community.

May I say a word about the work that the Association of Colleges is doing in that regard? The association is working on a set of model instruments and articles that are framed in the new environment of greater discretion and freedom. There is immense human capital in colleges but, too often, it has been locked up because of the approach taken by previous Governments. There was a view that it was best to dictate, predict and provide from the centre. That is not this Government’s view. For example, as a result of the amendments, colleges will no longer have to seek the Government’s permission to add more members to their governing body or to determine whether a job vacancy should be advertised nationally.

Those are important aspects of a college’s governance, but they are not things in which the state should be involved. The use of that power will not be compulsory. If colleges are content that their existing arrangements support them to meet the needs of local learners and employers, they will not have to change them. The benefit of the changes is that the decision over when and how colleges exercise those powers sits firmly with them. I mentioned that such measures have been welcomed by colleges themselves. They were, for the most part, also warmly welcomed in the other place.

[Andrew Percy (Brigg and Goole) (Con)]

The Minister is making an excellent speech on the amendments. Will he tell us whether the Lords amendments will make it easier for colleges to work in partnership with schools or to offer and perhaps enrol pupils themselves at secondary level? He may know about a college in my area that wanted to enrol pupils but could not do so unless it went through the pupil referral unit route and they were classed as excluded. Will these changes make it easier for a college to work in partnership with schools in the local area?

[Mr Hayes]

I am grateful to my hon. Friend. I think that these changes will enable colleges to form new kinds of partnerships and collaborations with other institutions in the sector and beyond, with businesses, and with a whole range of community-based organisations. I see this as an opportunity for a more eclectic system that is as different as the needs of each locality. I do not want to see a vanilla-flavoured product dictated from the centre; I do not want that kind of ugly ubiquity to characterise our further education system.

--- Later in debate ---

[Mr Knight]

rose—

[Andrew Percy]

rose—

[Mr Hayes]

I will give way once more to my hon. Friend the Member for Brigg and Goole and then I must return to my text.

[Andrew Percy]

Now that my hon. Friend the Member for Beverley and Holderness (Mr Stuart) has seduced the Minister into visiting East Riding, can he, while he is there, show us a bit of ankle and come to visit Goole as well?

[Mr Hayes]

rose—

--- Later in debate ---

[Mr Hayes]

It is true, of course, that as we free up the system, some of the controls that have previously been in place—some of the levers that the Government could pull—will no longer be there. Frankly, however, I have to say to my right hon. Friend, to whose assiduity, eloquence and wisdom I have previously paid tribute, that if the price of freedom is that loss of control, it is a price worth paying for the benefit it brings in the kind of innovation, exercise of imagination, responsiveness and dynamism to which I drew the House’s attention earlier. That was certainly the view of the other place and, in general terms, the view of the Committee as we went through the Bill. There is growing cross-party acknowledgement that we can no longer predict and provide—that we do indeed need to create a more responsive system. I say that because the character of our economy is changing. Economic need is increasingly dynamic, and a system that is controlled from the centre would never be sufficiently nimble to respond to that commercial need. That is now widely acknowledged. The difference is that we are going about this with purpose, energy and enthusiasm.

Let me return to staff and student representation. It is important that we see the statutory requirement that I have described merely as a baseline. There are all kinds of other good things that we can do in terms of staff and student representation, but representation on governing bodies, it was argued persuasively, should be a baseline. Lords amendment 51 extends those changes to institutions that are not college corporations, but that have been designated by legislation to receive public money for the provision of further education. It would come into effect should they decide to change their existing instruments and articles.

Lords amendments 50 and 58 give colleges the power to close themselves, which is known as dissolution. Currently, only the Secretary of State can dissolve a college. The amendments remove that power from the Secretary of State and give colleges control over their own dissolution. Colleges will also have the ability to transfer their property, rights and liabilities to another person or body for the purposes of education. 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 when all those affected—staff, students and the local community —have been properly consulted, and that the process will be transparent, recognising that colleges are providers of an important public service.

In Committee, the hon. Member for Hartlepool (Mr Wright), who is not in his place, but who was a diligent member of the Committee, raised questions about the likelihood that colleges would fail with these new freedoms. There is no evidence to suggest that the extra freedoms will increase the risk of failure. Notwithstanding what I said about the growing understanding of the need to allow colleges to be more locally responsive, it is worrying that there are those who believe that colleges will not rise to the challenge of the new freedoms and who believe that only through central Government control can we give the necessary protection to the common interest, which I have no doubt was in the heart of the hon. Gentleman. I do not think that he is right. Colleges have shown time and again that when they are given the opportunity to be their best, unrestricted, they can be so.

I am keen to address that point in more detail in relation to the amendments. Further education is a high-performing sector, with more than 95% of colleges judged satisfactory or better. Sometimes further education has been treated as what Sir Andrew Foster described as the “neglected middle child” of education, somewhere between schools and higher education. I see it more as the prodigal son, and not just that, but the prodigal son grown up. I want further education to be a favoured part of our education system because of the difference it makes to so many lives. The important thing is to ensure that where problems occur, there are robust monitoring and support systems so that colleges are given the opportunity and help to recover. It is right that we have in place the proper protections from failure because, as I have described, public interest is involved. A great deal of taxpayers’ money is involved too. However, we should not get to the point of creating an immense infrastructure to manage the college sector.

I think that it is correct to say, albeit with the benefit of hindsight, that after incorporation and the freedoms that colleges enjoyed as a result, we responded in a heavy handed way to the occasional, rare incidents of failure. It is reasonable to conclude that the advent and actuality of the Learning and Skills Council was an overreaction to the challenges associated with the new freedoms.

[Andrew Percy]

Will the Minister explain in more detail the process for consulting the local community, if a college fails or chooses to dissolve itself? I know he has said that that will be set out in regulations, but will he give us some idea of the robustness of the consultation that he has in mind?

[Mr Hayes]

In those exceptional circumstances, I would expect the consultation to be as full as possible. By that I mean that the views of all parties with a direct interest in the college’s affairs, including the local businesses engaged with the college, local learners and the wider community—the family associated with the college—should be sought fully over a proper timetable. Whatever means are necessary should be used to access those opinions.