Education Bill

My Lords, government Amendments 56 and 57 are a response to concerns first raised by my noble friend Lord Lingfield and echoed by others of my noble friends, the noble Lord, Lord, Lord Sutherland of Houndwood, and the noble Baroness, Lady Wall, about whether Ofqual has a full range of effective and proportionate powers that it can use to carry out its duties and responsibilities. The context of the concerns expressed was the events of this summer, where we saw numerous errors in awarding bodies' exam papers; many of those appeared even after Ofqual had required awarding bodies to go back and check all their papers. We all know how hard most children work for their GCSEs, A-levels and vocational qualifications. After all that work, they should not be let down by exam boards' mistakes; nor can we be sanguine about the credibility of our qualifications being brought into doubt. The key point made by my noble friend Lord Lingfield and others in the Grand Committee debate on 13 July was that Ofqual currently has only two types of sanctions available to it: first, the power to direct an awarding body to comply with a condition; and, secondly, the ultimate—and rather nuclear—sanction of partial or full withdrawal of recognition, which in effect would prevent an awarding body from offering a qualification to maintained schools. Obviously, those are strong powers. First, Ofqual can require awarding bodies to put things right by giving those bodies a direction; but that will often be only after they have gone wrong, so that is after the candidate has endured the two hours of stress that resulted from unsolvable problems in the paper they were sitting. Secondly, Ofqual can, in practice, strip an awarding body of the ability to offer its qualifications to the market. That certainly sounds like a strong incentive on awarding bodies not to make mistakes and to comply with Ofqual's conditions, but taking such a step could have a very disruptive impact on the whole system, as schools and colleges would have to switch providers and the courses they are teaching. Ofqual is under a duty to act appropriately and proportionately, so, given this impact, it would be able to do that in practice only if faced with an extremely serious or extremely persistent breach of a condition. For breaches of conditions that are unlikely to trigger Ofqual's nuclear sanction of withdrawal of recognition—and the errors we saw from those awarding bodies in the summer are of that kind—there is little Ofqual can currently do to impose a serious consequence that would act as a deterrent or encourage compliance. That, in essence, is why we are introducing Amendment 56 and Amendment 57, which gives similar powers to Welsh Ministers who are the regulator of qualifications in Wales. The amendments give Ofqual the power to impose a variable monetary penalty on an awarding organisation that fails to comply with a recognition condition. I hope I can give reassurance to my noble friends Lady Sharp and Lady Brinton, who had some concerns about this that have also been raised by Pearson. As a multinational it is concerned—and I understand that concern—that Ofqual's fines could take a proportion of its global turnover, of which only a small proportion is generated from the provision of qualifications in this country. As is the case for other regulatory bodies that have the power to impose a monetary penalty, the method of calculating the relevant turnover for these purposes will be determined in accordance with an order made by the Secretary of State, which will be subject to the affirmative procedure. There will be a full 12-week consultation on these rules with interested parties, including the awarding organisations. I can also confirm that our intention is that the definition of turnover would be limited to just that turnover generated by activity that Ofqual regulates, and would not encompass turnover from unregulated international activity. Stating that there is a 10 per cent cap in the Bill is common to other regulators. This new power to fine will help concentrate minds at the awarding bodies and send a clear signal to students and the wider public that the exam boards will face consequences where they get things wrong. The clauses include safeguards in line with regulatory best practice to ensure that this new power is used appropriately and proportionately, including a cap on the maximum amount; clear procedures for notification that must be followed; independent appeals arrangements; and the requirement for a full consultation by Ofqual before they can be implemented. As the legislation currently stands, there are circumstances in which an awarding body may have breached one of Ofqual's conditions but Ofqual would not be able to use any of its enforcement powers. Parliament has given Ofqual a set of objectives that it requires Ofqual to secure. To secure these objectives, it has given Ofqual the ability to set conditions which it can require awarding bodies to meet and sanctions which in theory it can rely upon if awarding bodies are not complying. However, the legislation as drafted inadvertently means that Ofqual is not simply free to use its sanctions when a condition is breached as is the case with other similar regulators. Instead it also has to meet additional higher-level hurdles that are not in place for other regulators: namely, that the failure to comply prejudices, or is likely to prejudice, either the proper award of any qualification or learners seeking such a qualification. Two brief examples illustrate the problems that this presents. Ofqual might, for example, require transparency of data on fee setting in order to secure its efficiency objective. However, an awarding body's failure to provide it would not prejudice the learner or the proper award, and hence Ofqual would be unable to enforce this requirement. Secondly, in situations where errors have been made that have affected students, Ofqual may think it valid to consider fining, or withdrawing recognition. However, an awarding body could argue that it has already taken measures such as adjusting the marking schemes to discount the part of the exam that was erroneous. Consequently, at the point when Ofqual might wish to impose a sanction, no prejudice would exist and Ofqual would be unable to act. As I have said, most other regulators do not have caveats on their ability to take action in relation to the objectives and duties that Parliament has set them. We believe that a qualification system will serve a useful purpose only if it is one in which educational organisations, employers and students have confidence. The amendment therefore removes these triggers so that Ofqual can take enforcement action if its conditions are breached. However, again, I should like to offer assurance that Ofqual will still have to demonstrate that it is acting proportionately and appropriately in any such circumstance. Finally, Amendment 56 also gives Ofqual the power to require a recognised body on which a sanction has been imposed to pay the costs incurred by Ofqual in relation to imposing the sanction. The costs concerned would include the costs of carrying out an investigation, relevant administration costs and the costs of obtaining expert advice. New Section 152B makes provision for appeals against Ofqual's decision to seek to recover its costs and sets up the powers of the First-tier Tribunal when considering such an appeal. New Section 152C makes provision for the recovery of costs that go unpaid and for the imposition of interest on such unpaid amounts. The main aim of the Bill is to improve standards in education, including in examinations. Having listened to the points made by noble Lords in Committee, we believe that Ofqual should have the powers to support this aim to prevent the kinds of errors that were too common this summer. It would provide Ofqual and Welsh Ministers with the flexible enforcement sanctions that are in line with other regulators, including those in the Regulatory Enforcement and Sanctions Act 2008, which was thoroughly debated and scrutinised by Parliament and underwent extensive consultation. I beg to move. Amendment 56A (to Amendment 56) Moved by