Technical and Further Education Bill (Sixth sitting)

Robert Halfon Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 29th November 2016 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 31, in schedule 1, page 28, line 32, at end insert—

“(3) Regulations under this section shall be laid before Parliament and shall be subject to the affirmative resolution procedure.”.

Amendment 33, in schedule 1, page 30, line 17, leave out “negative” and insert “affirmative”.

[The Minister for Apprenticeships and Skills (Robert Halfon)]

I will pick up on a number of points that have been raised before talking about the main substance of the amendment. A key recommendation of the Sainsbury report, No. 8, stated:

“While it is right for the Institute for Apprenticeships to be delegated wide-ranging autonomy across its operational brief, responsibility for key strategic decisions must be reserved for the Secretary of State. Crucially these decisions include those relating to the shape of the overall national system of technical education”.

The Secretary of State will obviously consult when making her decision, and she needs to ensure that any directions are reasonable and include all relevant factors, which means that the Government consult and listen where appropriate. Under public law duties, a Secretary of State has to act reasonably and fairly.

The hon. Member for Blackpool South mentioned City & Guilds, which stated:

“The City & Guilds Group fully supports the Government’s policy drive to improve the skills of the UK workforce and improve the transition for those entering employment from education and training. We see much merit in the Post-16 Skills Plan, and look forward to continuing to work with the Government and the new IATE to improve the quality and esteem of vocational and technical education in the UK.”

The hon. Gentleman also talked about the timescales. We will publish an implementation plan in due course—a real “due course”—which will set out the timeline for delivering the technical education reform set out in Lord Sainsbury’s independent plan and the Government’s post-16 plan. It will demonstrate firmly how we are to ensure that the institute will be able to deliver its functions according to the plan’s timescales.

As I said all the way through this morning’s sitting, the whole purpose of establishing the Institute for Apprenticeships—now to be the Institute for Apprenticeships and Technical Education—is to give employers a clear and independent voice. I understand that it must be strange at first sight that the Bill gives the Secretary of State powers to issue directions to the institute in respect of its responsibilities for technical education qualifications and the steps towards occupational competence, but the limitation in the amendment is neither necessary nor desirable, and I want to set out why.

I have mentioned Lord Sainsbury, who touched on this again in oral evidence to the Committee. We are including the direction provision in the Bill because it ensures that although the institute has real responsibility for developing and operating the technical education system flexibly, that will be in an overall strategic context guided by the Secretary of State. The Committee might be concerned that we did not include a similar power in respect of apprenticeships and the institute, but the two cases differ substantially. There is a stronger relationship between technical education and the education system as a whole—apprenticeships form part of that—particularly as it relates to young people, than is the case with apprenticeships individually.

To make it clearer, let me describe the circumstances in which we envisage that the direction power may be used. They could include a national requirement for all qualifications taken by 16 to 18-year-old students to include a specific core skill or knowledge. Or they could reflect reforms to other parts of the system, such as a change in the structure of A-levels or in the length of the academic year, which might have a strong impact on the shape of technical education provision. Many issues covered by the directions are likely already to be subject to specific consultation before they are put in place, such as the consultations that take place on A-level subject content. The direction power simply enables the Secretary of State to ensure that her wider policy responsibilities are given effect throughout the system.

[Gordon Marsden (Blackpool South) (Lab)]

I intervene on the Minister at this point to clarify that the point of the amendment, and the argument I made, was not to question in any way the ability, legality or desirability of the Secretary of State having an ongoing, one-to-one relationship with the institute. The point was that the aggregate of those instructions, if they are not tempered—that is the way I want to look at it—by a periodic review or consultation with the sorts of organisations that we have talked about, could cause not a chasm but a gap between what one set of people know and what another set know. I entirely understand the Minister’s point about making these decisions based on technical things, but that is the purpose of the amendment. The purpose was not to question in any way the desirability of the Secretary of State having that one-to-one relationship.

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[Robert Halfon]

As I mentioned previously, it is highly likely that the Secretary of State, when issuing a strategic direction, will have a full and thorough consultation. We want to make sure that the Government are able to exercise overall strategic control where necessary and without delay.

The amendment relates to additional consultation on, and review of, directions issued to the institute, rather than the principle of the direction-making power itself. We have just agreed that those directions are likely to deal with changes to the education system as a whole, for which consistency of implementation is of primary importance. Consultation and review relating to only part of the system—the institute’s responsibilities for technical education—seems to have little practical value and, we think, might cause considerable delay, which could put coherent and consistent implementation of strategic measures in peril.

There might be other cases in which the Secretary of State would need to intervene quickly, for example before arrangements for particular qualifications are finalised. We therefore believe that the Secretary of State should be able to exercise a direction power of the kind the Sainsbury panel had in mind, without a specific requirement for additional consultation and review, even though it is unlikely that there would be no consultation when that directional power was given. I therefore hope that the hon. Gentleman will agree to withdraw the amendment.

[Gordon Marsden]

I have heard what the Minister has to say on this matter. Again, I make the point that we are concerned about the aggregate process, and it is that process that prompted this probing amendment. The Minister mentioned the implementation plan, which raises another issue that was brought to us by a number of different people. The Minister and I swapped quotes from City & Guilds, but the original comment I made was what City & Guilds said about the timetable. The implementation plan, which he says will give the timeline in due course, is welcome, and may well allay some of the concerns that others have had and which we have tried to reflect in the amendment. If that is the case—in due course—we will be satisfied. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Kelvin Hopkins (Luton North) (Lab)]

I support what my hon. Friend says about amendment 17. It is very important to have representation by an apprentice or someone who has recently been an apprentice, so the board gets feedback from someone who has been on the receiving end of the experience, rather than just from people who think they know about it, but may not know it all. An apprentice who has spent considerable time going through the system will have a lot to offer to the board, so that is very important.

It is important to have members of the board who are different from the rest of the board. In the past, having one woman on a board—nowadays, we have many more than that, I am glad to say—made a difference to the nature of the discussions. Having representatives from minority communities on boards makes a difference by broadening the discussions and making them better. Assumptions that might have been made if the board were made up of small “c” conservatives and middle-aged white men in suits—I am one of them—can be challenged. We see too many people like me, and not enough of other people—[Interruption.] I said people like me, not necessarily me personally. It is important to recognise that there are other voices and other views, and the way to get those views represented is to have such people on the boards. Having at least one apprentice on a board is a good idea, although it should be someone who is experienced—someone who is coming to the end of their course or has just completed it, not someone who is at the beginning of their course. I strongly support what my hon. Friend said, and I hope the Government take cognisance of his views.

Turning to amendment 32, I have chaired two confirmation hearings and I sat on a committee interviewing an appointee before they went for their confirmation hearing. I think it is an extremely good exercise that has improved the quality of the appointments in recent years, so I very much welcome it. Occasionally, the people have not been ideal for the job and have chosen to stand down before going right through the process; I think that shows wisdom. Sometimes the Government and Ministers have been reluctant to let go of appointments, but they have now done so, and I think they are pleased with the job that Select Committees have done on confirmation hearings. I really do think that this would be a very good idea.

It is particularly important to have confirmation hearings for the chair, although perhaps the chair should deal with the chief executive. The confirmation hearings I chaired were to do with that role. It might not have been a chair—it might have been a director or something—but we were essentially interviewing for the chair role. It was extremely interesting and very useful, and I think that in each of those hearings we got the right result. I support amendment 32 in principle, even if my hon. Friend does not press it to a vote.

[Robert Halfon]

Let me begin by saying that if there were more people like the hon. Member for Luton North in education and skills, we would be in a very good place indeed—whatever their age may be.

[Kelvin Hopkins]

I should correct myself. I said “middle aged”; I think that is rather beyond me. [Laughter.]

[Robert Halfon]

I thank the hon. Member for Blackpool South for tabling these amendments, particularly amendment 17, which is a very thoughtful amendment. He may be interested to know that even before they were tabled, when we were discussing these matters, I made some of the points that he just made.

Regarding advertising and interviewing for the board members, we have had 281 applications to the board, representing a wide spectrum of apprenticeship experience. I believe that once the board is finalised the hon. Gentleman will be happy with the membership—we have a few rubber stamps to go yet, but I think he will be happy. He will know that the board is responsible for ensuring that the interests of apprentices and students of technical education are well represented.

I have thought about this issue very seriously—long before we discussed it in Committee—but I cannot go so far as to say there should definitely be apprentices on the board. In part that is because board members need to have experience and they carry a great deal of governance responsibility; they also come under press scrutiny, which is not easy. In addition, the board needs to represent the interests of all apprentices of varying levels, ages and sectors, so a single recent apprentice would be unlikely to speak for all apprentices. We do not think that the amendment offers the best way to represent the interests of apprentices and those in technical education.

I think we can square the circle by agreeing that the institute should draw on the experiences of apprentices, so I am pleased to announce that we expect the institute to invite apprentices to establish an apprentice panel, which would report directly to the board. The panel would be made up of apprentices from different occupations and experiences. The panel would decide for itself which issues to focus on, and it will challenge and make recommendations to the board. That squares the difficult circle of wanting experience but also having the vital input from apprentices up and down the country. The Institute for Apprenticeships and Technical Education will ensure that the first panel is in place before the institute goes live in April 2017. The institute will consider how best to engage with apprentices on an ongoing basis and how best to represent technical education students ahead of it taking on that responsibility in April 2018.

I am also pleased to report that there are plans to recruit three apprentices to work at the institute, which will review that number periodically. While I am in this post, I will certainly look at this issue with an eye to expanding the number of apprentices who work for the new institute.

Regarding amendment 32, I understand that it is looking for scrutiny of these crucial appointments—the hon. Member for Luton North spoke about how important these appointments are. However, given the size and scope of the institute, and even after the addition of the new functions in the Bill, I do not agree that the amendment is necessary. Generally, appointments that are subject to confirmation hearings by Select Committees are to much larger organisations. Furthermore, the appointment of the chair is subject to a code of practice set out by the Office of the Commissioner for Public Appointments, as the hon. Gentleman no doubt knows, and is already subject to a high degree of scrutiny.

In line with requirements, the Secretary of State has approved the launch of a recruitment campaign for the chair and the public appointment selection panel. The panel is chaired by a public appointments assessor, and as the appointing Minister I am kept informed every step of the way. A shadow chief executive is in post; the recruitment of the permanent chief executive will follow established civil service rules, with fair and open competition. Also, the Enterprise Act 2016 is clear that the chief executive will first be appointed by the Secretary of State in consultation with the chair and thereafter by the institute itself. The chair and chief executive can of course be called on by the relevant Select Committees to give evidence to Parliament and account for their actions

I do not think the amendment is necessary as I believe that the appointments will be subject to appropriate scrutiny, consistent with established public appointment rules. I hope that the Committee agrees on the need for the institute’s leadership to be established without delay, especially given questions posed by the hon. Member for Blackpool South about the institute’s capacity, whether it will be set up in time, and so on. I hope that the Opposition are sufficiently reassured by that information to withdraw the amendment.

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[The Chair]

Before I call the Minister to respond, I remind Committee members that any decisions on new clauses are taken at the end of the Bill.

[Robert Halfon]

I will start with new clause 4 and then go on to the other provisions before answering the general queries of the hon. Member for Blackpool South.

I congratulate the hon. Member for Batley and Spen on a really important contribution to the debate; I mean that genuinely. She knows from the brief conversation we had that I completely agree with much of what she says. I agree that we have a problem with careers in our country. I agree that for so long, careers guidance has pushed people towards universities. Having said that, I can imagine a lot of things, but I could never imagine the hon. Member for Luton North as a banker—I have a broad mind, but it is not that broad.

One reason why we have those problems is that wherever I go around the country, whatever institutes I visit and whatever kids I speak to, it is exactly the same: the chances are, they will not have been given advice on apprenticeships or technical education. It is university, university, university. We need to change that. I would be pleased to have the hon. Lady’s input. Careers guidance used to be fragmented and covered by two Departments, but we have moved it wholly to the Department for Education.

When I was appointed Minister for Apprenticeships and Skills, I realised that the title should have been Minister for apprenticeships, skills and careers guidance because careers guidance is perhaps the most important part of everything we are trying to achieve in the Bill. It is the first rung on the ladder of opportunity because without the right careers guidance we will not succeed in what we want to do. That goes back to the arguments of the hon. Member for Luton North on prestige and other things.

The hon. Lady said—this is important—that we need more than just warm words. I accept that and I am looking at the whole issue from the beginning: what we can do in careers guidance, whether it is possible to gear it much more towards skills and starting not in secondary school, but primary school and going all the way through. To be fair, the Government have done substantive work. First, it is now a legislative requirement that schools must give careers advice on apprenticeships. With reference to what the hon. Member for Luton North said, we have also tightened up in legislation the definition of “apprenticeship”.

When I spoke at an hotel recently, I asked someone whether they realised they would be paying the levy and whether they were going to have apprentices. The reply was, “We’ve already got some in the kitchen.” When I said, “You already have apprentices?” they replied, “No, they are interns, or whatever.” We have changed the definition to make sure that an apprenticeship is what it says on the tin.

We have also created the Careers & Enterprise Company, to which the hon. Member for Luton North kindly referred, and again I have been around the country to see it working in practice. I have been to east London and the north-east. Of course there is much more to do. Some £90 million, which is a serious amount of money and not just warm words, is being invested over the Parliament not just in the Careers & Enterprise Company, but in careers generally: 1,190 enterprise advisers and 78 enterprise co-ordinators. They have connected 900 schools in about 37 of the 38 local enterprise partnerships, the whole purpose being to build careers links with students and to get them to do work experience.

There is a £5 million careers and enterprise fund to boost provision for nearly 250,000 young people across England in 75% of the areas the Careers & Enterprise Company identified as cold spots. There is a £12 million mentoring fund, because mentoring is incredibly important. This year, £75 million is being spent on the National Careers Service to help its work and £24 million on web kits to support more than 650 people with face-to-face advice. We have started the work.

[David Rutley (Macclesfield) (Con)]

My hon. Friend is setting out some important things the Government are doing and no doubt he will explain what more is to be done. Does he agree with Lord Heseltine who said recently in a Select Committee that industrial policy for the benefit of the country starts in primary school classes if we are to achieve the productivity gains we want?

[Robert Halfon]

My hon. Friend is exactly right. I was in a primary school—it might have been in the constituency of the hon. Member for Blackpool South—where the kids had to guess the career of the individuals there. They included a fire officer, a business person and a pilot, who then went out and returned with their uniforms on. Careers guidance must start in school. We will not achieve what we want unless it starts in primary schools.

I am looking at the matter and there are substantive funds, but we must change the whole argument and gear careers advice towards skills and apprenticeships, although we have no problem with people going to university. I have held roundtables, not just with the great and the good, but with people from up and down the country, to get ideas for how to form our careers strategy. The hon. Member for Batley and Spen is very welcome to take part in them when they carry on next year.

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[Gordon Marsden]

I understand the Minister’s point, and I, likewise, would not want to lumber the institute with the responsibility for all those things. Will he give us an assurance, because he said these things occur from time to time, that there will be, at some point during an annual cycle, what I can only describe as a “state of the nation” report? That report could actually bring these various things—not necessarily all of them—together, so that not only stakeholders but Parliament will have a clear picture of what has happened over the past year.

[Robert Halfon]

I will reflect on what the hon. Gentleman has said. I reiterate the point that a lot of that is done already. We have monthly and annual announcements of all kinds of data to do with apprenticeships and skills. I always ask about destinations because I think they are incredibly important. I am glad that surveys show, for example, that more than 90% of apprentices get into work afterwards, either by staying in place or entering other employment. That is an incredibly important destination statistic.

On new clause 5, the principle of consultation, which we have mentioned quite a lot today, is already a key feature of the current Institute for Apprenticeships. The institute has a statutory duty under the Enterprise Act 2016 to undertake its functions with regard to industry, commerce, finance, the professions and other employers regarding education and training within the institute’s remit. Even more importantly, the institute must also undertake its functions with regard to those who may wish to undertake education and training that is within the institute’s remit—the apprentices themselves.

More specifically, the institute also already has a statutory responsibility to ensure that all draft standards and assessment plans are subject to third-party scrutiny before they can be considered for approval, and it must take account of the findings and conclusions of those carrying out that independent review. The bodies and organisations listed in the new clause are already covered by that existing legislation, and the institute must have regard to them in all functions, not only the specific function set out in the new clause. That approach will also apply to the functions that the Bill plans to give to the expanded IFATE.

The consultative principles that will underpin the institute have already been evidenced. Antony Jenkins, the shadow chair, has held a series of roundtables with a wide range of external organisations to hear how they think the institute should operate. Later this year the shadow institute will publish a full consultation on the operational plan for the institute, setting out its core functions and proposals for how it will deliver them.

The Department also plans to publish a draft for the consultation of a statutory strategic guidance document, which it will issue to the institute next year. That will include the steers that the Government expect the institute to have regard to. It will ensure that the institute consults all those with an interest when carrying out its functions. I therefore hope that the hon. Members will be reassured and will not press the new clauses.

I will come to an overview of schedule 1 but will begin by answering some of the key questions the hon. Member for Blackpool South asked. Although the 19 to 24-year-old NEET figure increased by 0.8% in July to September, he will know that the overall trend has been down over the years. The figure for 16 to 18-year-olds fell by 1.5% compared with the same quarter in 2015.

The hon. Gentleman also asked about the clarity of a single awarding body—the Wolf report body. Of course, we looked at that but the Wolf report, as the hon. Gentleman will know, identified that a large proportion of vocational qualifications offered very little value to employers, young people and adult learners. The whole purpose is to remove thousands of poor-quality qualifications that were not valued by employers.

The proliferation of qualifications was partly down to the awarding organisations’ competition for market share within the existing system. Following Lord Sainsbury’s recommendations, we are bringing the system into line with the best in the world to ensure excellence in technical education provision and having a single awarding body per qualification model. It is strange that the hon. Gentleman should argue for competition while I am doing the opposite but we live in a topsy-turvy world. We are not being driven by competition in the market, with the adverse effects that that brought. Innovation will be driven by the awarding body competition for the market through winning exclusive licences.

[Gordon Marsden]

We may live in a topsy-turvy world but, on balance, we are a little less gung-ho about competition than the Minister’s colleague, the Minister for Universities, Science, Research and Innovation, was on the Higher Education and Research Bill Committee. However, that was not the point I was going to make.

The point I want to make is that there is a distinction. I made it clear that I was putting forward the concerns of a number of the awarding organisations that they put to us in evidence. There is a clear difference between letting 1,000 flowers wither because they are of poor quality, and coming down to a single qualification point. I made the observation in one of the papers that the suggestion had been made that there might be two or three. There was no suggestion that there should be no dilution; simply that a monopoly position was possibly unwise, not least because one of the awarding companies might one day go bust.

[Robert Halfon]

I will reflect on that but the whole purpose is to ensure quality and simplification. Once it is agreed to have another one, then there is another and another and so on. I think we are right to follow the recommendations of Lord Sainsbury and Baroness Wolf.

[Tracy Brabin]

I appreciate the amount of money given to careers advice; it sounds substantial. I have just googled the Careers & Enterprise Company and discovered that in my region of Leeds city only 5.6% of young people are in apprenticeships; 33% of 16-year-olds and 30% of 17 to 18-year-olds are poorly prepared for work. That is on the Government website. That suggests to me that they have not had brilliant careers advice, even given the extra money that is available, so maybe that message is not coming through.

[Robert Halfon]

I will find out what the Careers & Enterprise Company is doing in Leeds and in the hon. Lady’s constituency. It will be involved with the LEP, but it has not been there for a long time; it is a recent creation. It has been working to identify the spots where we need help the most. I will look into what is happening and write to the hon. Lady.

On the copyright issue, the content of qualifications will be determined by employers, with the support of the institute. That is very different from the current system, where awarding organisations develop qualifications in subjects or sectors of their choosing. In some cases that is with the involvement of employers, but not always. The new technical qualification will be based on the skills, knowledge and behaviours that employers have identified as requirements for particular occupations. As the content of the qualifications will be determined with the institute’s oversight, it is perfectly reasonable and appropriate that copyright for relevant course documents should rest with the institute.

On the relationship between the framework and the new standards, the same organisations can deliver assessments for frameworks and new standards as long as they meet the criteria for assessment organisations for standards and are admitted on to the register of assessment organisations. The same position exists for training. Providers can offer training for both but need to meet the criteria and get on to the provider register.

When I was talking about careers, I forgot to talk about the investment we are putting into training, which the hon. Member for Blackpool South mentioned. The hon. Member for Batley and Spen gave examples of constituents who are not getting apprenticeships and described the low take-up. For those people, we potentially offer traineeships. We have spent £50 million on that. Many of those people—over 19%—are people with learning difficulties and disabilities.

In terms of Ofqual and Ofsted, I see it not as a problem but as a bonus that there are all these qualification organisations out there, maintaining the quality of apprenticeships and technical education. As the hon. Member for Blackpool South knows, Ofqual and Ofsted are responsible for different elements of the system; Ofqual regulates qualifications and Ofsted regulates the trainers and providers. The institute will regulate the quality of standards and assessment plans. I do not think that is a problem. It is a good thing that all those bodies are there, to ensure we get the quality technical education and apprenticeships we need.

[Gordon Marsden]

I will reflect on what the Minister said. Even if it is a good thing that there is a plurality of opportunities, I will reiterate two points. First, it does not make the judgment of what capacity the institute may need when competing in this marketplace any easier. Secondly, I hope the Minister will understand and accept that there are enough difficult organograms out there already in further and technical education without creating one with lots of little dotted lines here, there and everywhere. If he is going to maintain that position, it is important that lines of responsibility and why they work are clearly explained to stakeholders and employers.

[Robert Halfon]

The hon. Gentleman makes a fair point and I will reflect on what he has said, but I think it will be set out clearly. We are considering how the new technical education qualification should be regulated. The regulatory approach will need to be designed specifically for new qualifications and in the light of the institute’s contract management function. Ofqual remains the qualifications regulator.

I am pleased to turn now to the schedule and give an overview of what the Bill seeks to do. We have discussed much of it today. The schedule seeks to extend the remit of the Institute for Apprenticeships to give it responsibility for implementing reforms that we believe will raise the quality of college-based technical education. The reforms will result in technical education courses that are designed around employers’ needs, support young people and adults to secure sustained employment and meet the needs of our economy.

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[The Chair]

Mr Marsden, may I make it clear that, if you are speaking to clauses subsequent to clause 2, no amendments have been tabled for clauses 3 to 12 either? We understand that neither the Opposition Front-Bench team, nor the Minister, wish to speak to these clauses. Is that correct?

[Robert Halfon]

Except for clause 2.

[The Chair]

So do we have the leave of the Committee to put the question—after the Minister has spoken—and we have dealt with clause 2, that clauses 3 to 12 stand part of the Bill?

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[Kelvin Hopkins]

I have some experience in these matters. There have been funding pressures in all spheres of post-16 education, although not necessarily in universities, which seem to be well funded compared with other areas. In spite of the fact that there are advantages of scale in producing wide ranges of subjects in whatever qualification one is taking, some of the smaller subjects are, even now, dying. We are getting to a point where subjects such as modern European languages are being lost entirely from an area because no college or school will teach them any more. That is tragic. We should be creating more variety of opportunity in technical and academic education, not less.

My second major speech when I first came into this place was about funding for sixth-form colleges and the fact that they did a superb job. I said that funding constraints were in danger of killing the goose that lays the golden eggs: the sixth-form college sector. They do a fabulous job and I know from experience that we should have created more of them. Sadly, a view was held that we should create lots of schools with small, less efficient sixth forms with much narrower subject ranges, instead of sixth-form colleges. I think that went in entirely the wrong direction. I hope that I can persuade the Minister and others that we ought to look more favourably on sixth-form colleges and FE colleges if we are to make serious advances in educating and training our young people better than we have done in the recent past.

[Robert Halfon]

May I put some things in context for the hon. Member for Blackpool South before I speak directly on the clause? No one denies that there have been funding pressures, as the hon. Member for Luton North pointed out, but, even with such pressures, 80% of colleges are either good or outstanding, and 79% of adult FE students get jobs, move to apprenticeships or progress to university. Some 59% of institutions are in good financial health and 52% are operating with a surplus. That does not mean everything is rosy, but it puts things into context.

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[Gordon Marsden]

I have two observations: first, “protecting” is an interesting word when we are talking cash terms as they are not real terms. By 2020 inflation may have eaten into that figure. Secondly, the hon. Gentleman mentions the advanced learning loans, but are they not sums of money out there to be offered—and at the moment, only 50% of them have been taken up?

[Robert Halfon]

Yes, but it is still a Government expenditure item and its aim is to help more people take part in education.

Overall, the Department for Education plans to invest £7 billion in 2016-17 to fund education and training places for 16 to 19-year-olds. The area reviews will support those colleges that want to merge—no one is being forced to merge—and we will provide financial support where appropriate to help them do so. We are confident about the programme and we will deliver strong, sustainable colleges for the future. Mergers do not necessarily mean that provision in a local area will end. It will be up to the colleges to decide whether to keep a campus or site open.

The clause is probably the least technical of the Bill’s insolvency-related clauses. It explains that part 2 is about the insolvency of further education bodies and, in summarising what is covered by chapters 2 to 7, sets the scene for what we will debate over the coming sittings. Underneath the simple clause is the Government’s commitment to ensuring that every young person has the opportunity to achieve their full potential and to succeed.

The Secretary of State talked about the Government’s commitment to building a further education sector capable of delivering these skills and that is why we are supporting colleges through the area review to take whatever steps are needed to transform themselves into providers of the highest quality teaching. We are providing them with the opportunity to ensure they are in a strong and sustainable financial position for the future.

Once the area review recommendations have been implemented, the Government has been clear that we will no longer provide exceptional financial support to colleges that find themselves in financial difficulties. We will draw a line under what has become an implicit understanding among creditors and some educational institutions that those who fall into extreme financial difficulty will be able to rely on the taxpayer to make good the shortfall.

The provisions in the Bill will send a clear message to colleges that, to deliver excellence in teaching and leadership, they need to ensure that they have strong and robust financial controls in place. The commissioner who gave evidence said that, where there had been significant problems, much had been down to leadership and financial management. Why is it that so many colleges are doing extremely well, the college of the hon. Member for Blackpool South being an example?

Any college or creditor in extreme financial difficulties cannot look to the Government as the bank of mum and dad for a bail-out. The bank of mum and dad—the taxpayer—will be shut, because we have a duty to give taxpayer value.

Although we expect a college insolvency to be a rare thing, we cannot say it will never happen. That is why the measures the Bill introduces will ensure existing insolvency procedures apply to further education bodies, whereas ordinary insolvency procedures would offer protection only to creditors.

If I summed up this part of the Bill in a few words, it would be about protection, insurance, prudence and caution. Through the Bill we will introduce a special administration regime for the sector that ensures that, in the unlikely event that a college become insolvent, the Secretary of State or Welsh Ministers will be able to take action to protect the interests of the learners.

That is at the heart of the Bill: protecting learners and ensuring that colleges are cautious about borrowing and banks are cautious and prudent about lending. Young people entering a college expect to complete their studies, leaving with the skills that they need to move forward in their lives. That is the purpose of the SAR and I urge that the clause stand part of the Bill.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clauses 3 to 12 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(David Evennett.)