UK Parliament / Open data

Education Bill

Proceeding contribution from Lord Hill of Oareford (Conservative) in the House of Lords on Tuesday, 1 November 2011. It occurred during Debate on bills on Education Bill.
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 has 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.

About this proceeding contribution

Reference

731 c1134-5 

Session

2010-12

Chamber / Committee

House of Lords chamber
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