UNIVERSITIES FUNDING COUNCIL

HC Deb 24 March 1988 vol 130 cc558-85

Mr. Win Griffiths

I beg to move amendment No. 423, in page 105, line 32, at end insert— (1A) The Council shall establish a sub-committee on matters relating to Wales.'.

Mr. Deputy Speaker

With this it will be convenient to take the following amendments: No. 424, in page 105, line 34, at end insert 'and at least five who shall serve on the Welsh sub-committee and be appointed after consultation with the Secretary of State for Wales.'

No. 425, in page 105, line 35, after 'members', insert ', of whom at least two shall be members of the Welsh sub-committee,'.

No. 273, in page 106, line 23, at end insert— '(10) This section shall not apply to Wales.'.

No. 426, in clause 111, page 106, line 25, at end insert— (1A) The Council shall establish a sub-committee on matters relating to Wales.'.

No. 427, in clause 111, page 106, line 27, at end insert— 'and at least five who shall serve on the Welsh sub-committee and be appointed after consultation with the Secretary of State for Wales.'.

No. 428, in clause 111, page 106, line 28, after 'members', insert— ', of whom at least two shall be members of the Welsh sub-committee,'.

No. 274, in clause 111, page 107, line 38, at end insert— '(10) This section shall not apply to Wales.'.

No. 275, in clause 178, page 156, line 18, leave out first 'and' and insert—

'108, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133 and 134.'.

6.15 pm

Mr. Griffiths

I have the privilege of speaking from the Opposition Front Bench because of the unavoidable absence of my right hon. Friend the Member for Swansea, West (Mr. Williams) and my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). I pay tribute to the work of the University of Wales and its constituent colleges, to the Polytechnic of Wales and to all the local authorities involved in providing further and higher education in Wales for the way in which they have coped over the years with the cuts in Government funding.

During the debate in Committee on the establishment of a Universities Funding Council, the Minister of State for Wales reiterated an undertaking already given by the Secretary of State for Education and Science that there would be a Welsh sub-committee of the UFC. He further assured us that there would be close consultation between the Welsh advisory body and the Welsh sub-committee of the UFC. However, no Government amendments have been tabled to activate that promise.

Amendments Nos. 423, 424 and 425 were tabled to overcome that omission. Although it is good to have the Government's promise to establish the Welsh subcommittee, the best assurance by far would be for it to be written into the Bill so that any change of mind would require parliamentary assent rather than a departmental nod and wink in the shadows of Elizabeth house, or Gwydyr house.

We have only to look at the sorry saga of chronic and serious underfunding of the University of Wales in the 1980s to realise the urgent need for a Welsh subcommittee. In an exercise undertaken last year to examine the funding of the University of Wales on a real value basis for the period between 1985 and 1990, using the University Grants Committee's calculations on the inflation of university costs, the picture from 1985 to 1990 is dripping with the blood of cuts for all colleges of the University of Wales.

The calculation for the five years show that Aberystwyth suffers a 13.6 per cent. cut, in Bangor it is 18.5 per cent., in Cardiff, 13.5 per cent., in Swansea, 14.5 per cent., in UWIST, 6.5 per cent., in the University of Wales College of Medicine, 2.8 per cent., in St. David's Lampeter, 7.3 per cent. and in the university registry, 7.1 per cent. Overall, the real cut in the funding of the University of Wales was calculated at 12.3 per cent. The comparative cost for England was shown to be 6.7 per cent., and for Scotland, which fared only a little better than Wales, 11.2 per cent. The cuts in university budgets have bitten deep everywhere, but nowhere is the wound more gaping than in the Celtic fringe.

Unfortunately, those calculations do not tell the whole story because the figures used for 1989–90 assume an increase of 4.5 per cent. over the funding for the previous year. The current estimate provided by the Universities Grants Committee is a cash increase of 1.7 per cent. in the recurrent grant for Wales compared with 2.9 per cent. for Great Britain. That is well below the inflation of university costs. Thus, the calculation made last year that some 400 academic and non-academic jobs would be lost in the University of Wales may have to be revised upwards.

The University of Wales is having to cope with massive cuts administered by the University Grants Committee with what seems to be little regard for the vital role it plays in Welsh education, and, in particular, for the provision of higher education opportunities through the medium of Welsh. It also appears that little account is taken of the needs of a university that has a federal structure and a campus covering thousands of square miles. That federal structure grew out of the unique involvement of all classes in Welsh society in the establishment and growth of university education in Wales.

It would be a travesty if the Government were not prepared to honour their promise to establish a subcommittee for Wales of the Universities Funding Council by supporting these amendments. They ensure that five members of the UFC would be appointed, in consultation with the Secretary of State for Wales, and that at least two of whom would have experience of higher education in Wales. It would provide an opportunity to undo the damage that was inflicted on the colleges of the University of Wales in the 1980s, when the cuts bit more deeply into the Welsh sector than they bit into the English and Scottish sectors, although, heaven knows, they have been treated badly enough.

The Government now have an opportunity to back their promises with a legal commitment. If they really care for Wales, they should grasp the opportunity that we have provided for them.

Amendments Nos. 426, 427 and 428, which relate to the establishment of a Welsh sub-committee of the Polytechnics and Colleges Funding Council, are of a different order from those which relate to the UFC. We want to take this opportunity to clarify the position of further and higher education in Wales and in England. The Bill that covers English polytechnics and eligible colleges establishes legally and financially independent institutions. Apart from stating that the Polytechnic of Wales and eligible colleges—six in all—;would be excluded from the PCFC, but with an option to join later, perhaps at the diktat of the Secretary of State for Wales, nothing else was said until new clause 44 arrived while the Bill was being considered in Committee. That is now contained in the Bill as clause 179.

This afterthought, which allows the Polytechnic of Wales and the eligible colleges in Wales to be incorporated as companies limited by guarantee but with no share capital under the Companies Act 1985, means that they remain under the aegis of the local education authorities and hence, ultimately, the Welsh Office. It came, however, only after a great deal of disquiet had been expressed by further and higher education practitioners in Wales. I quote from the Welsh Office's consultative paper on "Corporate Status for Further and Higher Education Institutions", published on 30 November 1987. Part D, "Welsh Office Views", states: There is a risk of the Welsh higher education sector being seen as not as good or not as advanced as that in England if the recommendation of the 'Good Management and Practice' Report in favour of corporate status is ignored. The position, however, is that while the Welsh Office is taking on board the recommendations of the Government and local authority associations joint efficiency study report "Managing Colleges Efficiently" and the National Advisory Body's good management and practice report "Management For a Purpose", the Secretary of State for Education and Science is not. Instead, the recommendations of the Lord Joseph-inspired reports are being kicked out of the window by the present Secretary of State in favour of freebooting higher education corporations.

Why is there this difference of approach? The Minister of State, Welsh Office boasted in Committee that we in Wales had the best of all worlds, of which the bottom line is inclusion in the PCFC, if the proposed Companies Act 1985 and section 100 of the Education Act 1944 arrangements for Wales do not work out.

In Committee I asked the Minister what the practical implications of the Welsh arrangements would be. I asked whether an English polytechnic college would be able to set up an annex in Wales, so to speak, and seek students for courses while the Polytechnic of Wales and Welsh incorporated colleges would be unable to do the same in England. If that is the case, it is plainly unacceptable. The Minister, however, forgot to answer. It was at the end of the day's proceedings. I believe that the House and all those involved in the further and higher education sector in Wales should have a clear answer to that question.

The impression given by the evolution of the Bill's clauses relating to further and higher education in Wales is that some sort of power struggle was going on between the Secretary of State for Education and Science and the Secretary of State for Wales over the place of Welsh colleges in the Bill, which the Secretary of State for Education and Science once again lost—not by a knockout this time but on points, as the option remains in the Bill for the Secretary of State for Wales to take the Welsh colleges into the PCFC. The Welsh colleges, therefore, had the better option of following the recommendations of the "Good Management and Practice" report. Hence, the Secretary of State for Wales, having won the battle for keeping the colleges, had to produce a clause that was consonant with the "Good Management and Practice" report.

In placing amendments Nos. 426, 427 and 428 before the House, we seek clarification of the Welsh Office's view of the working of the two systems side by side and of whether, in its judgment, the risk of the Welsh higher education sector being considered to be not as good or not as advanced as that in England still holds true. Answers, please.

Mr. Brynmor John (Pontypridd)

I shall refer only to amendment No. 426. The Polytechnic of Wales is in my constituency. In many ways it is the epitome of what the Government want. It is technologically based. It has a high reputation in science and technology and it has close links with local business. It is progressive in its efforts to cooperate with local industry. However, it has lost out because of neglect by the Welsh Office. The unit of resource for each student in the Polytechnic of Wales is some hundreds of pounds less than even the lowest of the English polytechnics. Capital investment must be high in science-based polytechnics. Therefore, the Polytechnic of Wales is losing out very heavily.

The Minister may say that the Welsh Office is looking after it and that it is under democratic control because the county council and the further and higher education authorities are looking after it. That is good in theory, but the reality is that the Polytechnic of Wales has traditionally been badly served and badly treated. Its finances are suffering because of the way the Government are running them. If the setting up of a sub-committee of the PCFC for Wales is the way in which equity can be assured, so be it. If retention of the present system would bring about equity, so be it. However, I insist that the Polytechnic of Wales should not be as unfairly treated in the future as it has been in the past. It is an unwanted and an unwarranted slur on a very fine institution and it is holding back its development.

Dr. Thomas

My favourite amendment to the Bill reads: This section shall not apply to Wales. The purpose of the amendment is to delete the relevant provision for the Universities Funding Council. We should consider the allocation system for Wales as one system. I have argued this before in another context. When the Minister of State replies to the debate, I ask him to say whether he agrees to or dissents from the proposal that, whatever legal arrangements may be made, he will abide by them. There is the parliamentary fiction that the Government may accept Opposition amendments, hut we know that the Government yield only to the Church of England. They will not yield to our arguments tonight. The Bill will be pushed through in its present form. The Government did not accept the amendment for Scotland, so they are unlikely to accept the amendment for Wales.

6.30 pm

How will the system that the Minister is establishing function? What will be the relationship between the subcommittee of the Universities Funding Council, the existing, or remaining, Welsh Advisory Body and the Welsh Office? How will the arrangements operate in practice? The LEAs, the Welsh Joint Education Committee, and the Welsh Language Educational Development Committee of the WJEC all have an interest in these matters. How does the Minister envisage the system operating on the ground?

Once the Bill has been forced through, there will be an opportunity for joint planning of the whole of higher education in Wales. Presumably, the Minister of State will ensure that some of the good men and perhaps two or three good women, although that is increasingly unlikely given the nominations put forward by the Welsh Office, nominated to the Universities Funding Council subcommittee for Wales will happen to be the same good men and women as might be sitting on the WAB, or what remains of the WAB. Those good men and women and true may tend also to be members of the Welsh Joint Education Committee and at least one of them might also find himself on the Welsh Language Educational Development Committee. Already there is the potential for a great "quangocracy". Wales is run by a great quangocracy with each of its members responsible to the Minister of State, or his Secretary of State, whom he is educating very well in Welsh life and culture.

The Minister of State is the most intelligent education Minister so far to be seen at the Welsh Office. While that may not be difficult, and while some of my hon. Friends may not like it, it happens to be a fair description — [Interruption.] No, at the Welsh Office. He is a well-known literary figure in his own right. He is a writer of sonnets in his spare time. Because of his great expertise and experience in education and cultural matters, he is in a unique position to manage the Welsh education system as a coherent whole. Therefore, he should respond positively and say, "Yes. We intend to manage the system properly rather than having bits of it run by the UGC and bits by the WAB, so that we do not have the cross-binary disagreements that we recently had on the question of the provision of teacher training."

I understand that the provision of teacher training figures is now the responsibility of the Welsh Office and that the Welsh Office tells the chair of the UGC what the figures are. I hope that we can reach that position in all the other sectors of higher education in Wales and that we have effective cross-binary planning. It will be the first time in the history of British education that we will have had effective cross-binary planning, and in the Minister of State we have the pioneer who can lead the field.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I wish briefly to underline the excellent contribution made by my hon. Friend the Member for Bridgend (Mr. Griffiths) in his maiden speech from the Front Bench.

We know that the favourite pastime of the Secretary of State for Wales is writing and issuing press releases. We have now reached a new low; we are now almost legislating by press release. All that we had to go on to begin with on this matter was a press release of 1 December 1987 containing a three-paragraph announcement by the Secretary of State that it had been agreed to establish a Welsh committee. That is our only basis for considering the role, function and powers of the committee—three paragraphs in a press release, presumably elaborated in Committee. We are entitled to ask, therefore, what will be the powers of the Welsh committee. What function will it play in financing Welsh universities? Why is it not written into the Bill? What is wrong with giving it statutory powers? A non-statutory committee can be abolished by administrative fiat and the House would have no way of preventing that, so we have every right to demand that the establishment of the Welsh committee should be written into the Bill.

We want to establish the role that the committee could have played in the various crises that have struck our universities and colleges in the past few years. Without going into the complicated arguments about University College Cardiff and its cash crisis, I remind the House that in the middle of that crisis it was sent a peremptory unilateral letter—not by the UGC, not by the Secretary of State for Wales, not by the permanent secretary at the Welsh Office, but by Sir David Hancock, the permanent secretary at the Department of Education and Science acting in his role as the principal accounting officer. We want to know whether that behaviour could be repeated once the new Welsh committee has been established. Will it be possible for an English permanent secretary from an English Department once again to intervene directly in the finances of a constituent college of the University of Wales?

Mr. Rhodri Morgan (Cardiff, West)

What the permanent secretary at the Department of Education and Science did went much further than that. He threatened to stop the recurrent grant, which would have closed the college down altogether.

Mr. Rowlands

My hon. Friend underlines the seriousness of such intervention. Will we now be able to channel our arguments through a properly representative committee of the new Universities Funding Council?

As my hon. Friends will recall, there is another example of intervention—the UGC's peremptory statement that University College Cardiff might have to sell the Sherman theatre. That happened in the middle of last year. Would that have been possible had a Welsh committee already existed? Will the establishment of a Welsh committee allow it to be the proper channel to handle such issues so that we do not have peremptory demands from bodies that do not understand and are not sensitive to Welsh university life? As my hon. Friend the Member for Bridgend said, the cuts in research grants, the problems of the Welsh universities and the representations that we have had to make to change the formula that the UGC has established for funding the Welsh universities all lead us to believe that we need a powerful Welsh committee; and the only way to establish a powerful committee is to give it statutory powers under the Bill.

Mr. Morgan

I am grateful to have the opportunity to reinforce the points made by Opposition Members. I was interested to hear the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) asking for a fully comprehensive transbinary approach to all post-16 education in Wales. If it was to be fully comprehensive, I suppose that it would have to include Jesus college, Oxford, too.

Let me reinforce what my hon. Friend the Member for Bridgend (Mr. Griffiths) said. In comparing the cuts that the University of Wales has experienced with those faced by the universities of England and Scotland, he clearly showed that something has gone wrong. It is not easy to put one's finger on it. However, given that the real resource cuts to the University of Wales have been almost double those in England and slightly higher than those in Scotland, one can tell that we are not talking about Celtic paranoia. There is a great difference between paranoia and persecution. We are talking about a breakdown in the application of the norms as between the universities of England and those of Wales and Scotland.

What has been going wrong? Opposition Members think that it is simply the failure of the University Grants Committee to realise that one cannot always apply English norms to Welsh institutions. They are different, and, in particular, they are different in periods of rationalisation. The University of Wales was set up on the principle of disbursing its assets throughout the different areas of Wales because of the nature of Welsh geography and nonexistent communications. During a period of rationalisation, when the University Grants Committee is going for a "big is beautiful" and rationalised set-up, any university that is based on a disbursement principle will suffer more than any other.

What is the answer? Surely the answer must be a powerful body in Wales with some teeth that is able to say to the UGC, "If you apply that norm, it will be a disaster for the University of Wales." After all, the University of Wales is unable to make up by private funding what it loses from public sector funding. A cut for the University of Wales of 12 per cent. cannot be made up by approaching millionaires such as the Sainsburys, David Robinson of Radio Rentals, and so on. Lowland regions of England can find millionaires who can provide the arts centres, theatres, institutions, and so on that make a university a fully comprehensive set-up. That cannot be done in Wales simply because the taxation revenue is not there and millionaires do not live in Wales.

I implore the Government to set up a body that is able to explain to the Universities Funding Council, when it is set up, that Wales is different, that it needs different treatment and that the importance of the University of Wales to Wales is as great as it could be in any part of the United Kingdom.

Mr. Richard Livsey (Brecon and Radnor)

I add my congratulations to the hon. Member for Bridgend (Mr. Griffiths). He is a Brecon boy and he has done extremely well this evening.

I should like to address the problems facing the University of Wales. There are special problems, in that it is a federal university. Stuart Rendel, who was once the hon. Member for Montgomery, and the Davies's of Llandinam, who were Liberal party members, were very much to the fore, and together with the people of Wales they gave their pennies for the establishment of the university. I believe that in recent times we have seen a dismembering of those ideals by the UGC.

The position of the University of Wales is significant in its federal structure. One of the problems is that it has not always been ruled in a federal way. If it had, it might have been a little stronger in resisting some of the aggressive and predatory attacks of the UGC. Latterly, the UGC has tended to be an arm of the Government in a rather hard way, enforcing Government ideas and making cut-backs in the university sector. If we cannot have a funding council for Wales, at the very least we must have a UFC sub-committee as suggested in amendment No. 423.

One of the characteristics of Welsh universities must surely be to reflect the community in Wales. That community is undoubtedly changing. We have seen, regrettably, the abolition of the chemistry department at Aberystwyth and the movement of the geography and geology departments between Swansea and Cardiff. We now wish to see science becoming more important in the universities, especially in relation to the new industries that are coming to Wales. Many electronics industries are coming to Wales, and there is also new investment from Japanese industries. Biotechnology is becoming increasingly important. These are all things that should be developed in the universities at a much higher rate than they are now. Matters such as that should be dealt with by the WEWH sub-committee of the UFC, which is proposed in the amendment. That committee could promote a linkup with firms in Wales in order to produce a more dynamic relationship, particularly in research, which has sometimes been lacking in the University of Wales. However, some efforts are being made now, with science parks being established in Aberystwyth and in other areas to try to catch up on lost ground.

Mr. Allan Rogers (Rhondda)

Can the hon. Gentleman explain to the House how the industries of Wales will fund the university when they cannot even fund proper apprentice schemes?

Mr. Livsey

I am not saying that industries should fund the university. I am merely saying that there should be stronger links between the university and the industries in Wales so that there is a spin-off between the two. That does not mean that we should cop-out of state funding of the universities or of our tradition of teaching the Welsh language and other languages. Indeed, suggestions have been made by certain people that we should study Japanese. I think that that is a good idea, because it might encourage more diversity of interest and more international interest in the University of Wales.

The UGC has not given Wales a good deal. We want the Minister to accept the amendment so that there will be a written commitment in the Act that there will be a subcommittee for Wales which will be treated as a special case so that attention can be given to the problems of Wales and so that the University of Wales can have a proper deal.

6.45 pm

Mr. Donald Coleman (Neath)

I congratulate my hon. Friend the Member for Brid.gend (Mr. Griffiths) on his comments from the Front Bench.

We should remind the Minister of the uniqueness of the University of Wales. It has a federal structure; a structure that perhaps does not exist anywhere else in the United Kingdom. The University of Wales is the people's university and was created by the people of Wales. There should be special arrangements such as those mentioned in the amendment. These arrangements should ensure that the funding of the university is protected and that our colleges are preserved.

I support the amendment and hope that the Minister will listen to what has been said this evening.

The Minister of State, Welsh Office (Mr. Wyn Roberts)

I welcome the hon. Member for Bridgend (Mr. Griffiths) to the Front Bench. I hope that my compliments will not devastate his career.

I shall deal with whether there should be a Welsh Committee of the Universities Funding Council. As my right hon. Friend the Secretary of State for Education and Science announced on Second Reading, and as I reiterated in Committee, the Government will look to the UFC, using its power under paragraph 9 of schedule 6, to set up a Welsh committee, together with committees for Scotland, Northern Ireland and for medical education. I commend paragraph 9 to the attention of hon. Members, because that is where the power to set up committees can be found.

I do not think that there is any need to write anything further into this Bill.

Mr. Rowlands

rose—

Mr. Roberts

I suggest that hon. Members look at schedule 6, which states that power to appoint committees is given to the UFC, the Polytechnics and Colleges Funding Council and the Education Assets Board.

I can assure the hon. Member for Meirionnydd Nant Conwy (Dr.Thomas)—

Mr. Rowlands

That schedule simply says: The Corporation may establish a committee". It does not say "shall" establish a committee. It does not say that after a committee is established it can be terminated. What guarantees do we have, except verbal guarantees from the Minister, that such things will happen?

Mr. Roberts

The statement made by my right hon. Friend the Secretary of State on Second Reading about his expectations of the UFC and my reiteration of that statement in Committee are adequate. We do not want to be too prescriptive in the Bill and specify each and every committee that the UFC will have. Obviously it will have a number of such committees, but it is, in part, for the UFC to work out the details of the committees that it needs. However, it is committed by my right hon. Friend to establishing the committees that I have mentioned.

Mr. John Morris (Aberavon)

Is that a serious objection that the Minister is putting before the House, that one should not be prescriptive? Is that not what legislation is about? Why does he not write it into the Bill? Is not the real truth that he and his Secretary of State have lost the battle with the DES, the most centralist Ministry in the kingdom?

Mr. Roberts

The right hon. and learned Gentleman is wrong. There is complete agreement between my right hon. Friend the Secretary of State for Education and Science and my right hon. Friend the Secretary of State for Wales.

I can tell the hon. Member for Meirionnydd Nant Conwy that we expect that the committee will concern itself with broad issues affecting the university sector in Wales, including the need for collaboration with the public sector. It will also provide a channel through which my right hon. Friend's wider policies for the Principality can be taken into account by the Universities Funding Council. The title "right hon. Friend" covers both Secretaries of State—indeed, all Secretaries of State.

Appointments to the Welsh committee will be a matter for the UFC, although we shall want it to consult my right hon. Friends. We envisage that the committee will include members drawn from the Wales Advisory Body, the University of Wales and employer interests in the Principality. I assure the hon. Members for Merthyr Tydfil and Rhymney (Mr. Rowlands) and for Brecon and Radnor (Mr. Livsey) that we do indeed expect great things from this committee, but the Government believe that it would be wrong to require a Welsh committee, or any other specific committee in the Bill whose overall nature is to facilitate rather than to be prescriptive.

There was a great deal of discussion in Committee about prescription. The Opposition accused the Government of being too prescriptive in the general structure that we are establishing for the funding of higher education. That is not so, of course. The Government have put down amendments Nos. 124 to 136, which are the next batch to be discussed by the House, to put that entirely beyond doubt.

The Opposition have sought to insert into the legislation all sorts of detailed requirements about how the funding councils should go about their jobs. These amendments are yet another example of that, and I do not think that it would be a help to anyone to get this kind of detail set in legislative concrete.

Mr. Rogers

The Minister said that he did not want to put details in the Bill. Can he answer a very simple question? If the Welsh sub-committee of the funding council comes up with one set of propositions and it is turned down by the major United Kingdom funding committee, who decides — the Secretary of State for Wales, or the Secretary of State for Education and Science?

Mr. Roberts

We are talking about a sub-committee of the Universities Funding Council, which will be appointed by the council. There will be discussions within both the committee and the council, just as there are currently within the UGC. I shall come back to the university in a moment, but I am seeking to dispose of the amendment moved so ably by the hon. Member for Bridgend.

The Bill confers no responsibilities on the Polytechnics and Colleges Funding Council in relation to Wales. There is, thus, no present need for a Welsh committee of the council. As for the future, we have made it clear that if and when the Government take a decision to transfer Welsh higher education institutions from the local authority sector, we wish to retain the two options, as I explained in Committee, of either placing them with the PCFC sector or funding them direct. If they were in the PCFC sector, a Welsh committee could be established under schedule 6, paragraph 9, but, as with the UFC, this is not a matter for legislative concrete. Clearly the issues would not arise if the institutions were funded direct.

Mr. John

While the hon. Gentleman is system building, or perhaps empire building, in his dreams about the polytechnic, will he assure me that he will take some action to end the scandal of the funding of the Polytechnic of Wales?

Mr. Roberts

I assure the hon. Member that the Wales Advisory Body is re-examining the funding methodology for higher education, in particular in connection with the polytechnic. Meanwhile, I must remind him that the polytechnic's funding was increased by 10.9 per cent. for this academic year and will be increased by another 10 per cent. for 1988–89, which amounts to a 21 per cent. increase over two years. I assure him that we are looking at the position of the polytechnic again.

The amendments tabled by the hon. Member for Meirionnydd Nant Conwy were, I believe, originally connected with new clause 60. His proposal is that there should be arrangements for funding higher education in Wales for both university and non-university sectors. It is further proposed that the two sectors should be funded through a single university and colleges funding council for Wales. I do not accept that this is the best approach to higher education in Wales.

Let us consider, first, the position of the University of Wales under these arrangements. Its funding would become the responsibility of a council responsible to my right hon. Friend the Secretary of State for Wales, and that council, with responsibility for funding only the University of Wales, would find either that it had very little scope for planning or—and perhaps this is more likely—that it could not avoid being embroiled in the internal affairs of the university.

The University of Wales, as we all know, is a federal university. I know that there are grounds for saying that it would be in the interests of the university and of its constituent colleges for the university to be perceived to a greater extent than is the case at present as a large and powerful federal university. As I said in Committee, steps are now being taken to see how the university's central role can be strengthened. Hon. Gentlemen will know that Lord Cledwyn, as pro-Chancellor, with the full agreement of the university, has established a committee under the chairmanship of Sir Goronwy Daniel to consider how the university structure might be strengthened.

There have been recent moves towards rationalisation which have shown an encouraging tendency towards federal action. The effect of enacting these amendments would, I think, be to nullify any serious attempt that the university might make to act as a single institution. Indeed, I suspect that the effect of a funding body for Wales alone, making decisions and judgments as between the colleges, would so usurp the university's own prerogatives as fatally to weaken the federal structure. There are some, of course, who would applaud that, but many more, I am sure, would feel with me that the break-up of the university would be a disaster, especially for the smaller, more vulnerable and more distinctively Welsh colleges.

That being so, it is not surprising that the University of Wales is opposed to the aims of these amendments. I ask the House to take serious note of the university's own view, as expressed very clearly in evidence to the Croham committee, that it is in its best interests to continue to be funded as an integral part of the university sector in the United Kingdom. I recognise the special role that the university has in Wales, in relation to both the culture and the economy of the Principality—matters in which my right hon. Friend has specific responsibility. The exercise of those responsibilities brings him into contact with the university and its colleges very frequently. However, it would be inappropriate, given its international as well as its national standing, for the University of Wales to be divorced from the rest of the university sector in the United Kingdom. After all, two thirds of its students come from outside Wales, and we are not in the business of directing those Welsh students who elect to go to English or Scottish universities to stay at home. The University of Wales is a very Welsh institution, but it is also a United Kingdom institution, and the amendments would clearly put at risk its standing in the wider context — [Interruption.] Several hon. Members have spoken on such matters in Committee and on the Floor of the House, and I know that certain hon. Members, representing Welsh constituencies, are especially interested and entitled to have a proper and meaningful reply.

7 pm

Turning now to the polytechnics and colleges sector in Wales, section 178(2) and (3) specifically exclude Wales from the PCFC funding arrangements. There is a reserve power in section 178(4) that would enable the Welsh public sector higher education institutions to be transferred to the PCFC by order should that be considered necessary in the future. As with any other reserve power, it may never be used. Its relevance to the amendments that we are considering is that it envisages the possibility of transferring the institutions to the PCFC, not to a separate Welsh PCFC. Our reason for that is the small size of the higher education sector in Wales. Only six Welsh institutions meet the criteria in clause 100 for transfer to the PCFC sector.

We have considered whether, if the reserve power to transfer the Welsh institutions to the PCFC sector were activated, it should be to one PCFC that would cover England and Wales or to a separate Welsh PCFC. I concede that the idea of a separate body has its attractions from a Welsh point of view, but in no way could I justify the cost of an independent body to plan and fund so small a sector.

A further option exists if it should be decided to remove the polytechnic and the other higher education colleges from local authority control. The Welsh Office could take over the funding responsibility itself. Powers already exist in section 100 of the 1944 Act which would make it possible for the Department to fund the institutions direct. Indeed, we are already using these powers to fund our one voluntary college—Trinity college, Carmarthen.

Dr. Thomas

I understand the impatience of some hon. Members who are present, but this is an important debate about the structure of higher education in Wales, and it is right that we should have it. Will the Minister give us some indication of the Government's thinking on the options that he rehearsed in Committee, because the education system in Wales is entitled to hear his preferred option?

Mr. Roberts

I want to make it clear that at present there is no intention of exercising either of the options. For the time being we intend to work closely with the local authorities and to continue with the Wales Advisory Body arrangements that were established in 1983. It is a partnership arrangement between the local authorities and the Welsh Office which works satisfactorily for the small number of colleges involved. As the hon. Gentleman knows, I chair the committee of the Wales Advisory Body, the members of which are nominated by the Welsh Joint Education Committee and the Welsh Counties Committee. Through the WAB arrangements we have a means of planning the sector on an all-Wales basis, rather than on a local basis. This will be increasingly important in the period between now and the mid-1990s, during which the number of 18-year-olds will fall significantly and competition for students will become more intense. I believe that the Wales Advisory Body will be able to undertake this planning role effectively, and that is how we intend to leave it.

Mr. Win Griffiths

I am extremely disappointed with that reply, first, because the commitment that we got was that the Universities Funding Council would be looking to use its powers under schedule 6. I stress that the commitment was that it would be "looking", and not "doing" it. Those powers are optional, not compulsory. The idea that we are being detailed or prescriptive to ask for a Welsh sub-committee of the Universities Funding Council is ludicrous. This is a fundamental right for Wales and should be in the Bill. We shall definitely seek a Division on that.

Secondly, we did not intend to seek to press the amendments relating to the Polytechnics and Colleges Funding Council to the vote. We wanted to find out from the Minister the answer to the question that I asked in Committee, and the answer to the question that I asked again this evening.

The hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) referred to the talent of the Minister as a writer of sonnets. Well, I thought that I was getting the Mabinogion this evening. However, despite the long reply, I still have not had an answer to my question about the corresponding activities of the Welsh and English colleges under this part of the Bill.

Mr. Roberts

In one sentence, of course both English and Welsh colleges are entitled to recruit from whichever country or wherever they want.

Mr. Griffiths

My question was: "Could an English polytechnic or college, which is totally free-standing, open annexes in Wales because the position would not be the same for Welsh polytechnics or colleges" which, being incorporated under the Companies Acts, and not being legally independent, could not do the same in England?

Mr. Roberts

That is a very hypothetical situation.

Mr. Griffiths

That is one good reason for us voting against the whole Bill again. We shall seek to press our first three amendments to Divisions.

Question put, That the amendment be made:—

The House divided: Ayes 183, Noes 293.

Division No. 231]	[7.7 pm
AYES
Abbott, Ms Diane	Dobson, Frank
Adams, Allen (Paisley N)	Doran, Frank
Allen, Graham	Dunnachie, Jimmy
Alton, David	Dunwoody, Hon Mrs Gwyneth
Archer, Rt Hon Peter	Eastham, Ken
Armstrong, Hilary	Evans, John (St Helens N)
Ashdown, Paddy	Ewing, Mrs Margaret (Moray)
Ashley, Rt Hon Jack	Fatchett, Derek
Banks, Tony (Newham NW)	Faulds, Andrew
Barnes, Harry (Derbyshire NE)	Fearn, Ronald
Barron, Kevin	Fields, Terry (L'pool B G'n)
Battle, John	Flannery, Martin
Beith, A. J.	Flynn, Paul
Bell, Stuart	Foot, Rt Hon Michael
Benn, Rt Hon Tony	Foster, Derek
Bennett, A. F. (D'nt'n &R'dish)	Foulkes, George
Bermingham, Gerald	Fraser, John
Bidwell, Sydney	Fyfe, Maria
Blair, Tony	Galbraith, Sam
Boyes, Roland	Galloway, George
Bradley, Keith	Garrett, John (Norwich South)
Bray, Dr Jeremy	Gilbert, Rt Hon Dr John
Brown, Gordon (D'mline E)	Godman, Dr Norman A.
Buckley, George J.	Golding, Mrs Llin
Caborn, Richard	Gordon, Mildred
Callaghan, Jim	Graham, Thomas
Campbell, Menzies (Fife NE)	Griffiths, Nigel (Edinburgh S)
Campbell, Ron (Blyth Valley)	Griffiths, Win (Bridgend)
Campbell-Savours, D. N.	Grocott, Bruce
Canavan, Dennis	Hardy, Peter
Carlile, Alex (Mont'g)	Hattersley, Rt Hon Roy
Cartwright, John	Haynes, Frank
Clay, Bob	Healey, Rt Hon Denis
Clelland, David	Henderson, Doug
Clwyd, Mrs Ann	Hinchliffe, David
Cohen, Harry	Hogg, N. (C'nauld & Kilsyth)
Coleman, Donald	Holland, Stuart
Cook, Robin (Livingston)	Hood, Jimmy
Corbett, Robin	Howarth, George (Knowsley N)
Corbyn, Jeremy	Howell, Rt Hon D. (S'heath)
Cousins, Jim	Hoyle, Doug
Crowther, Stan	Hughes, John (Coventry NE)
Cryer, Bob	Hughes, Robert (Aberdeen N)
Cunliffe, Lawrence	Hughes, Roy (Newport E)
Cunningham, Dr John	Hughes, Simon (Southwark)
Dalyell, Tam	Illsley, Eric
Darling, Alistair	Ingram, Adam
Davies, Ron (Caerphilly)	Janner, Greville
Davis, Terry (B'ham Hodge H'I)	John, Brynmor
Dewar, Donald	Jones, Barry (Alyn & Deeside)
Dixon, Don	Jones, leuan (Ynys Môn)

Kinnock, Rt Hon Neil	Redmond, Martin
Lamond, James	Rees, Rt Hon Merlyn
Leadbitter, Ted	Reid, Dr John
Lestor, Joan (Eccles)	Richardson, Jo
Lewis, Terry	Roberts, Allan (Bootle)
Livsey, Richard	Robinson, Geoffrey
Lloyd, Tony (Stretford)	Rooker, Jeff
McAllion, John	Rowlands, Ted
McCartney, Ian	Ruddock, Joan
McFall, John	Sedgemore, Brian
McKay, Allen (Bamsley West)	Sheerman, Barry
McKelvey, William	Sheldon, Rt Hon Robert
McLeish, Henry	Shore, Rt Hon Peter
McTaggart, Bob	Short, Clare
McWilliarn, John	Skinner, Dennis
Madden, Max	Smith, Andrew (Oxford E)
Mahon, Mrs Alice	Smith, Rt Hon J. (Monk'ds E)
Marek, Dr John	Snape, Peter
Marshall, David (Shettleston)	Soley, Clive
Marshall, Jim (Leicester S)	Spearing, Nigel
Martin, Michael J. (Springburn)	Steel, Rt Hon David
Maxton, John	Stott, Roger
Meacher, Michael	Straw, Jack
Michael, Alun	Taylor, Mrs Ann (Dewsbury)
Michie, Bill (Sheffield Heeley)	Thomas, Dr Dafydd Elis
Michie, Mrs Ray (Arg'l & Bute)	Thompson, Jack (Wansbeck)
Mitchell, Austin (G't Grimsby)	Turner, Dennis
Morgan, Rhodri	Wall, Pat
Morris, Rt Hon J. (Aberavon)	Walley, Joan
Mowlam, Marjorie	Wardell, Gareth (Gower)
Mullin, Chris	Wareing, Robert N.
Murphy, Paul	Welsh, Michael (Doncaster N)
Nellist, Dave	Wigley, Dafydd
Oakes, Rt Hon Gordon	Wilson, Brian
O'Brien, William	Winnick, David
O'Neill, Martin	Wise, Mrs Audrey
Orme, Rt Hon Stanley	Worthington, Tony
Parry, Robert	Young, David (Bolton SE)
Pike, Peter L.
Prescott, John	Tellers for the Ayes:
Primarolo, Dawn	Mr. Ray Powell and
Quin, Ms Joyce	Mr. Frank Cook.
Radice, Giles
NOES
Adley, Robert	Brittan, Rt Hon Leon
Aitken, Jonathan	Brooke, Rt Hon Peter
Alexander, Richard	Brown, Michael (Brigg & Cl't's)
Alison, Rt Hon Michael	Browne, John (Winchester)
Allason, Rupert	Bruce, Ian (Dorset South)
Amess, David	Buchanan-Smith, Rt Hon Alick
Amos, Alan	Buck, Sir Antony
Arbuthnot, James	Burns, Simon
Arnold, Jacques (Gravesham)	Burt, Alistair
Arnold, Tom (Hazel Grove)	Butcher, John
Ashby, David	Butler, Chris
Atkins, Robert	Butterfill, John
Baker, Rt Hon K. (Mole Valley)	Carlisle, John, (Luton N)
Baker, Nicholas (Dorset N)	Carlisle, Kenneth (Lincoln)
Baldry, Tony	Carrington, Matthew
Banks, Robert (Harrogate)	Carttiss, Michael
Batiste, Spencer	Cash, William
Bellingham, Henry	Channon, Rt Hon Paul
Bendall, Vivian	Chapman, Sydney
Bennett, Nicholas (Pembroke)	Chope, Christopher
Benyon, W.	Churchill, Mr
Bevan, David Gilroy	Clark, Dr Michael (Rochford)
Biffen, Rt Hon John	Clark, Sir W. (Croydon S)
Blackburn, Dr John G.	Colvin, Michael
Blaker, Rt Hon Sir Peter	Conway, Derek
Bonsor, Sir Nicholas	Coombs, Anthony (Wyre F'rest)
Bottom ley, Peter	Cope, John
Bottomley, Mrs Virginia	Cormack, Patrick
Bowden, Gerald (Dulwich)	Couchman, James
Bowis, John	Currie, Mrs Edwina
Boyson, Rt Hon Dr Sir Rhodes	Davies, Q. (Stamf'd & Spald'g)
Braine, Rt Hon Sir Bernard	Davis, David (Boothferry)
Brandon-Bravo, Martin	Day, Stephen
Brazier, Julian	Devlin, Tim
Bright, Graham	Dickens, Geoffrey

Dicks, Terry	Knight, Greg (Derby North)
Dorrell, Stephen	Knight, Dame Jill (Edgbaston)
Douglas-Hamilton, Lord James	Knowles, Michael
Dover, Den	Knox, David
Dunn, Bob	Lamont, Rt Hon Norman
Durant, Tony	Lang, Ian
Dykes, Hugh	Latham, Michael
Eggar, Tim	Lawrence, Ivan
Emery, Sir Peter	Leigh, Edward (Gainsbor'gh)
Evans, David (Welwyn Hatf'd)	Lennox-Boyd, Hon Mark
Evennett, David	Lestor, Joan (Eccles)
Fairbairn, Nicholas	Lightbown, David
Farr, Sir John	Lloyd, Sir Ian (Havant)
Favell, Tony	Lloyd, Peter (Fareham)
Fenner, Dame Peggy	Luce, Rt Hon Richard
Field, Barry (Isle of Wight)	Lyell, Sir Nicholas
Finsberg, Sir Geoffrey	McCrindle, Robert
Forth, Eric	Macfarlane, Sir Neil
Franks, Cecil	MacGregor, Rt Hon John
Freeman, Roger	MacKay, Andrew (E Berkshire)
French, Douglas	McLoughlin, Patrick
Fry, Peter	McNair-Wilson, M. (Newbury)
Gale, Roger	McNair-Wilson, P. (New Forest)
Garel-Jones, Tristan	Madel, David
Gill, Christopher	Major, Rt Hon John
Gilmour, Rt Hon Sir Ian	Malins, Humfrey
Glyn, Dr Alan	Mans, Keith
Goodlad, Alastair	Maples, John
Goodson-Wickes, Dr Charles	Marland, Paul
Gorman, Mrs Teresa	Marlow, Tony
Gorst, John	Marshall, John (Hendon S)
Gow, Ian	Marshall, Michael (Arundel)
Gower, Sir Raymond	Martin, David (Portsmouth S)
Grant, Sir Anthony (CambsSW)	Maude, Hon Francis
Greenway, John (Ryedale)	Mawhinney, Dr Brian
Gregory, Conal	Maxwell-Hyslop, Robin
Griffiths, Peter (Portsmouth N)	Mayhew, Rt Hon Sir Patrick
Grist, Ian	Mellor, David
Ground, Patrick	Meyer, Sir Anthony
Grylls, Michael	Miller, Hal
Gummer, Rt Hon John Selwyn	Mills, Iain
Hamilton, Hon Archie (Epsom)	Miscampbell, Norman
Hampson, Dr Keith	Mitchell, Andrew (Gedling)
Hanley, Jeremy	Mitchell, David (Hants NW)
Hannam, John	Moate, Roger
Hargreaves, A. (B'ham H'll Gr')	Monro, Sir Hector
Hargreaves, Ken (Hyndburn)	Montgomery, Sir Fergus
Harris, David	Moore, Rt Hon John
Hawkins, Christopher	Morrison, Hon Sir Charles
Hayes, Jerry	Morrison, Hon P (Chester)
Hayhoe, Rt Hon Sir Barney	Moss, Malcolm
Hayward, Robert	Neale, Gerrard
Heathcoat-Amory, David	Needham, Richard
Hicks, Mrs Maureen (Wolv' NE)	Neubert, Michael
Higgins, Rt Hon Terence L.	Newton, Rt Hon Tony
Hill, James	Nicholls, Patrick
Hind, Kenneth	Nicholson, David (Taunton)
Hogg, Hon Douglas (Gr'th'm)	Nicholson, Emma (Devon West)
Holt, Richard	Onslow, Rt Hon Cranley
Hordern, Sir Peter	Page, Richard
Howard, Michael	Patnick, Irvine
Howarth, G. (Cannock & B'wd)	Patten, Chris (Bath)
Howell, Ralph (North Norfolk)	Patten, John (Oxford W)
Hughes, Robert G. (Harrow W)	Pawsey, James
Hunt, David (Wirral W)	Peacock, Mrs Elizabeth
Hunt, John (Ravensbourne)	Porter, David (Waveney)
Hunter, Andrew	Powell, William (Corby)
Hurd, Rt Hon Douglas	Price, Sir David
Irvine, Michael	Raffan, Keith
Irving, Charles	Raison, Rt Hon Timothy
Jack, Michael	Rhodes James, Robert
Jackson, Robert	Riddick, Graham
Janman, Tim	Ridley, Rt Hon Nicholas
Jessel, Toby	Ridsdale, Sir Julian
Jones, Gwilym (Cardiff N)	Rifkind, Rt Hon Malcolm
Jopling, Rt Hon Michael	Roberts, Wyn (Conwy)
Kellett-Bowman, Dame Elaine	Rost, Peter
King; Roger (B'ham N'thfield)	Rowe, Andrew
Kirkhope, Timothy	Ryder, Richard
Knapman, Roger	Sackville, Hon Tom

Sainsbury, Hon Tim	Thornton, Malcolm
Sayeed, Jonathan	Thurnham, Peter
Shaw, Sir Giles (Pudsey)	Townsend, Cyril D. (B'heath)
Shaw, Sir Michael (Scarb')	Tracey, Richard
Shelton, William (Streatham)	Tredinnick, David
Shephard, Mrs G. (Norfolk SW)	Trippier, David
Shepherd, Colin (Hereford)	Trotter, Neville
Shepherd, Richard (Aldridge)	Twinn, Dr Ian
Shersby, Michael	Vaughan, Sir Gerard
Sims, Roger	Waddington, Rt Hon David
Smith, Sir Dudley (Warwick)	Wakeham, Rt Hon John
Smith, Tim (Beaconsfield)	Walden, George
Soames, Hon Nicholas	Walker, Rt Hon P. (W'cester)
Speed, Keith	Waller, Gary
Speller, Tony	Walters, Dennis
Squire, Robin	Ward, John
Stanbrook, Ivor	Wardle, Charles (Bexhill)
Steen, Anthony	Warren, Kenneth
Stern, Michael	Watts, John
Stewart, Allan (Eastwood)	Wells, Bowen
Stewart, Andy (Sherwood)	Wheeler, John
Stewart, Ian (Hertfordshire N)	Whitney, Ray
Stokes, John	Widdecombe, Ann
Stradling Thomas, Sir John	Wilshire, David
Sumberg, David	Wolfson, Mark
Tapsell, Sir Peter	Wood, Timothy
Taylor, Ian (Esher)	Woodcock, Mike
Taylor, John M (Solihull)	Yeo, Tim
Taylor, Teddy (S'end E)	Young, Sir George (Acton)
Tebbit, Rt Hon Norman
Temple-Morris, Peter	Tellers for the Noes:
Thompson, D. (Calder Valley)	Mr. Robert Boscawen and
Thompson, Patrick (Norwich N)	Mr. Alan Howarth.
Thorne, Neil

Question accordingly negatived.

The Secretary of State for Education and Science (Mr. Kenneth Baker)

I beg to move amendment No. 124, in page 105, line 43, at end insert, 'or the practice of any profession'.

Madam Deputy Speaker (Miss Betty Boothroyd)

With this, we shall take the following amendments : No. 10, in page 105, line 44, after 'responsible', insert 'for keeping under review and for advising the Secretary of State on the needs of the United Kingdom for university teaching and research, and'. No. 11, in page 106, line 6. leave out subsection (6) and insert— '(6) The Council shall make grants to universities in the United Kingdom, subject to terms and conditions, in respect of expenditure incurred or to be incurred by them for the purposes of any activities eligible for funding under this section.'. No. 140, in page 106, line 9, at end insert 'Provided that any term or condition imposed by the Council under this subsection shall not unreasonably constrain the university in the exercise of its judgment as to the best use of resources in pursuance of its academic objectives'. No. 141, in page 106, line 9, at end insert 'And provided always that in determining payments to be made under this subsection to any university the Council shall not make reductions in such payments by reason of funds available to that university from sources other than public funds'. No. 12, in page 106, line 10, leave out subsection (7) and insert— '(7) The Council shall have power—

1. (a) to monitor and review the expenditure and management by the universities of such grants; and
2. (b) to collect, examine and publish comparative information about the universities which universities may give the Council for the purposes of the exercise of any of their functions under this section.

(7A) Any terms or conditions imposed by the Council under subsection (6) above shall not apply to any funds which are derived from sources other than the Council.'. Government amendments Nos. 125 and 126. No. 408, in clause 111, page 106, line 43, at end insert 'in such a manner as to secure the efficient, flexible and comprehensive provision of such activities having regard to other higher educational facilities provided by universities, higher education corporations and other bodies and to any local scheme for the co-ordination of further and higher education drawn up by the local education authority.'. Government amendment No. 127.

No. 409, in page 107, line 25, leave out 'and'.

No. 410, in page 107, line 29, at end insert '; and (c) to advise the Secretary of State as to the funding needs of the sector for which the Council is responsible, where appropriate in co-operation with the Universities Funding Council; and in respect of any such advice under paragraph (c) above, the Secretary of State shall take the advice into account in making a determination as to the level of funding to be made available to the Council.'. No. 438, in page 107, line 29, at end insert ',and (c) shall consult on a regular basis with the bodies listed in Subsection (9) below'. No. 13, in clause 112, page 107, line 39, after 'may', insert 'after consultation with the Funding Councils,'. Government amendment No. 128.

No 455, in page 107, line 40, leave out 'he thinks fit' and insert 'may be approved in an Order, a draft of which has been laid before, and approved by, a resolution of each House of Parliament'. Government amendment No. 129.

No. 453, in page 108, line 2, after 'payments', insert 'shall relate to those payments and '. Government amendment No. 130.

No. 14, in page 108, line 3, leave out from 'part' to end of line 4 and insert 'those sums paid by the Council to which terms and conditions were attached and not complied with; and.' Government amendments Nos. 131 to 133. No. 15, in page 108, line 10, at end insert 'except that such amounts and such conditions shall not be in respect of an individual institution or its activities.' Government amendment No. 134.

No. 16, in page 108, line 12, leave out from 'with' to end of line 13 and insert 'those directions given to them by the Secretary of State which shall be made only by orders which shall be subject to annulment in pursuance of a resolution of either House of Parliament.' No. 412, in page 108, line 13, at end insert 'of a general nature, where such directions do not relate to a named institution or the allocation of funds to an individual institution'. No. 454, in page 108, line 13, at end insert 'the terms of which shall be contained in an Order which shall be subject to annulment in pursuance of a resolution of either House of Parliament'. Government amendments Nos. 135 and 136.

No. 458, in page 108, line 25 at end insert— '(8A) The Chairman of the Universities Funding Council, of the Polytechnics and Colleges Funding Council and the Education Assets Board shall sit on each others Council'.

Mr. Baker

This will be a short but important debate on a matter that came up frequently in Committee—the relationship of the Secretary of State with the new Universities Funding Council and the relationship of the Universities Funding Council with the universities that it funds.

Amendments Nos. 124 to 136 fulfil the undertakings that I gave in Committee on 16 February. Their main purpose is to make clear on the face of the Bill certain aspects of the relationship between the holder of my office and the newly-established Universities Funding Council and the Polytechnics and Colleges Funding Council, and between the two funding councils and the institutions.

A number of overlapping amendments to clauses 110 to 112 have been tabled, notably by my hon. Friend the Member for High Peak (Mr. Hawkins), who got his amendments on the Amendment Paper before the Government did, and also by the Opposition. I believe that amendments Nos. 124 to 136 effectively meet their concerns.

Under the present higher education funding arrangements, the holder of my office has substantial implicit powers to safeguard the considerable taxpayers' interests. We are talking of a sum of about £2.5 billion a year. Hon. Members will know that under the existing arrangements for the University Grants Committee, which was, in effect, set up by a Treasury minute, theoretically I—I must be more humble — the holder of my office has sweeping powers over the universities in that he can direct the UGC to cut off money to a university or to stop funding a particular discipline. Of course, I would not use those powers in that way. None of my predecessors has. It would be unthinkable that they would be used in such a way. But when one comes to set up a statutory body, such as the UFC and the PCFC, one has to define precisely the relationships and the relative powers that one has.

The new statutory framework requires explicit provision to be made not only for the funding councils' powers but also for those which I or my successors might exercise. This group of amendments makes clear on the face of the Bill what was always intended — the limitations on the Government's and the funding councils' powers.

First, let me deal with conditions and directions. Amendment No. 132 makes it clear that the conditions on which the UFC and the PCFC make payments to institutions may relate only to the use of those payments. There is no question of their, or, through them, the holder of my office, being able to limit or control the funds which institutions receive from other sources. I have given that assurance verbally and it now appears on the face of the Bill. The UFC or the PCFC would not wish to get at private funds or money raised by universities in other ways or of which they are in receipt.

Dame Elaine Kellett-Bowman (Lancaster)

My right hon. Friend was good enough to give such an assurance some weeks ago at Question Time, but one niggling problem remains. Although he has given the assurance, then and now, that nobody will exercise any power over money that is raised by universities, is there any danger that the UFC may take money that is raised voluntarily? I have a particular interest because Lancaster university is good at a lot of things, particularly at raising funds. Is there any danger that the UFC may decide to make deductions because a university is particularly good at raising outside funds?

Mr. Baker

That point is covered by an amendment put down by my right hon. Friend the Member for Aylesbury (Mr. Raison). As he may try to catch your eye, Madam Deputy Speaker, suffice to say that the short answer is no, but I shall elaborate later. I have visited the university of Lancaster and I pay tribute to the effectiveness of that university and of the vice chancellor in raising funds so resourcefully.

Amendments Nos. 133 and 134 make it clear that any conditions that the Secretary of State may attach to his funding of the councils shall not relate to their treatment of particular institutions. That makes explicit the commitment that we have given consistently that the Government will not involve themselves in decisions about the allocation of funds between individual institutions.

Amendment No. 135 fulfils the undertaking that I gave in Committee. Any long-stop directions by the Secretary of State to the funding councils will be by order, and, therefore, by virtue of clause 180, subject to the negative resolution procedure.

Amendments Nos. 125 and 127 empower the funding councils to advise the Secretary of State. That right will be unfettered. The amendment will not allow the Government to control what it is advised on by the councils. I have no doubt that their advice will cover the financial needs of the institutions and we shall certainly consider it carefully.

Amendment No. 125 also empowers the UFC to advise the Department of Education for Northern Ireland on the funding of the universities in the Province in the same way as the UGC does now. Given the aim of clarifying responsibilities, that continuing relationship needs to be covered in legislation rather than be left non-statutory.

There was some criticism that the power of the UFC and the PCFC to give advice was fettered in some way in that the holder of my office would have to agree the manner in which the advice was given.

Mr. Andrew F. Bennett

That is what the amendment says.

Mr. Baker

I am aware of what my amendment says. I have a capacity to read and understand. I have tried to demonstrate it from time to time as the Bill has been passing through the House.

Let me draw the attention of the House to a letter from the chairman of the Committee of Vice Chancellors and Principals of the Universities of the United Kingdom, Professor Sir Mark Richmond, which was published in The Independent yesterday, in which he said: I do not agree with your report that Mr. Baker has backtracked on his commitment to empower the Funding Councils for higher education to give advice to the Government. The wording of his amendment, while less all-embracing than the Vice-Chancellor's Committee might have chosen, makes clear that the Secretary of State will not have the power to determine whether, or when, or on what topics (including finance), the Councils give advice. He will determine only 'in what manner', ie, whether publicly or privately, this is done. There can be advantages in giving advice in private; it can be blunter. Nor do I believe that any chairmen of the Funding Council worth their salt will be muzzled. I want to thank Sir Mark Richmond for making that position clear and for the way in which he has conducted our discussions as the chairman of the Committee of Vice Chancellors and Principals. He has presented its case strongly and forcefully and it is a case to which we have listened.

Mr. Andrew F. Bennett

Who will decide whether such advice will be in public or private — the Secretary of State or the chairman of the funding body?

Mr. Baker

As I have said, the amendment says that the Secretary of State has the power to decide, but in such matters, with the degree of confidence that exists between me and the existing UGC, we would talk about such matters and, no doubt, about the way in which things should be done. Since I have held this office I have twice had advice from the UGC on the main funding. Each time it came to me privately. It was full advice and it was more effective for being private. That has been my experience as the holder of my office.

Mr. Ashdown

The Minister's comments now stand completely at variance with the disparaging remarks made by Ministers in Committee about the CVCP. I hope that he will draw his comments to its attention to put the record straight on the role of the CVCP. As he has prayed Sir Mark Richmond in aid on this important matter, I hope that he will also heed his views on academic freedom.

Mr. Baker

The hon. Gentleman must wait for the debate after 8 pm. As I said, Sir Mark Richmond presents his case forcefully. That does not mean that I agree with every aspect of what he says. I can assure the hon. Gentleman that I have a pleasant and friendly relationship with the Committee of Vice Chancellors and Principals. I enjoy meeting its members. They are a civilised bunch of people.

7.30 pm

Mr. Dalyell

Reference has been made to an article in The Independent. There is a further article in that newspaper today in relation to Christopher Hood and the whole question of tenure. Professor Christopher Hood, an Australian lecturer who was previously at the university of Glasgow, was very critical of the Secretary of State on the question of promoted lecturers losing tenure. Would this be a convenient moment to comment on that issue?

Mr. Baker

No, it would not, for the very good reason that I have not read the relevant part of the newspaper, although I will seek to read it or have it available when the debate on tenure starts at 8 o'clock.

There were two other legs to the package of amendments that I announced in Committee—amendments Nos. 128 and 129 and the consequential amendment No. 136—which limit any additional functions conferred on the funding councils to those which could in any event be exercised by the Secretary of State and which are properly related to the institution funded by the council in question. The provision is about the delegation of existing functions in relation to higher education. As amended, there can be no possibility that a future Secretary of State could use his power to create completely new interventionist functions.

The other leg concerns the power of the funding councils to seek repayment of funds. Amendments Nos. 130 and 131 make clear that the councils will have discretion over whether the repayment of funds should be sought in the event of non-compliance with conditions. In any case, repayment may be only in respect of funds for which a particular condition has not been met.

Finally, amendments Nos. 124 and 126 fulfil the commitment that I gave in Committee to make clear in the Bill that non-academic members of the funding councils may be drawn from the professions. I am very glad to move the amendments formally. They were outlined in Committee and represent substantial changes. I am glad that it has been possible to come to an agreement with the vice chancellors of our universities along the lines that they find acceptable. It will be broadly and widely welcomed in the universities and across the House tonight.

Mr. Dalyell

On a point of order, Madam Deputy Speaker. Before we proceed further and the vice chancellors, or anybody else, criticise the House of Commons for not being interested, may I draw the attention of the House to how empty the Press Gallery is during this important debate?

Madam Deputy Speaker

That is not a point of order for the Chair.

Mr. Andrew F. Bennett

It is a good point, however, that a large number of journalists in the Gallery on occasions criticise hon. Members about their attendance, but on an issue as important as this they do not seem to feel it is worth their while to pay attention.

Mr. Jackson

That is the last time that the hon. Gentleman will be mentioned.

Mr. Bennett

Yes, I appreciate that.

It is ridiculous that the procedures of the House dictate that all of the clauses relating to polytechnics and academic freedom in this part of the Bill must be debated in two hours. We are considering clause 109 to clause 134 in two hours, and, having allowed a short time for Welsh issues, we are down to 40 minutes in which to examine six Government undertakings and the nine amendments with which they seek to fulfil those undertakings.

I agree with the Secretary of State that amendment No. 124, which widens the possibility of appointing people with professional experience to the public sector funding council and the Universities Funding Council, is very welcome. But most academic people would feel that a far greater proportion of those 15 people who will serve on those bodies should have academic experience, as opposed to the Government's suggestion.

Amendment No. 125 deals with the question of how advice will be offered. The Secretary of State's original statement in his press release was to the effect that funding bodies would be free to offer advice, whereas the Secretary of State has put some very miserable words in the Bill. I cannot understand why the Minister cannot put a clear statement into the Bill giving the committees power to exercise their right to give him advice. Why should he, as the wording of the Bill says, decide whether it should be in public or in private? Surely the committees ought to be entitled to judge whether in their view it is more helpful to make their comments in private or in public. Why should the Secretary of State decide ultimately, as the legislation provides, which approach is more appropriate?

I suspect that on some occasions the Secretary of State is under pressure from Treasury Ministers to accept the option of giving advice in private, because that reduces pressure on the Government, and inevitably he has to toe the Government line and suggest that comments are made in private. The Secretary of State would really strengthen his hand if advice was given in public, so that people could see what arguments were being put forward about public funding. No doubt the House of Lords will return to the point, but it is sad, when the Government claim to be offering concessions, that they still put such weasel words into the Bill.

The Opposition certainly welcome the Secretary of State's assurance that the institutions will have total freedom over their own money, although I suggest to the right hon. Gentleman that in practice it will be more complicated. Where institutions raise money for equipment, inevitably the funding bodies will feel that it is not necessary for them to come up with the money for it. It would be ridiculous for a funding body to fund a particular piece of equipment if the money for it had been raised privately. But the inter-relationship between private funding and money from the Government will be strong. Although it is welcome that the right hon. Gentleman has put these extra words into the Bill to make it clear that funding bodies will not have direction over money that institutions raise themselves, he ought to recognise that there are far more problems in funding than he has suggested.

The Secretary of State has made it clear that he does not intend to give specific directions to funding bodies to deal with particular institutions. He did not deal with the current and very important topic of how far institutions will develop in a selective way, and whether there will be selective funding of top, middle and bottom-tier institutions and universities, or whether there will be, say, top-tier departments. Once we start to move into this area, particularly if the Government are pushing ahead with the idea of preferred and less preferred departments, we will be returning close to the point where, in practice, funding bodies will discriminate against particular institutions.

Next came the Secretary of State's great concession that any extra duties placed on funding bodies would be subject to negative order. Following the experience today during business questions and the uproar about the regulations on the poll tax in Scotland, he must realise that negative orders are very difficult procedures on which hon. Members can have an impact. If the Secretary of State claims that the regulation will be rarely used to confer new duties, he could have used affirmative orders. No doubt he is holding back so that he can make a further concession in the House of Lords. I am sure that it would have cleared up matters in this area more effectively if he had agreed to using the affirmative procedure, particularly as he claims that the power would rarely need to be used.

The Secretary of State knows that if an affirmative order is put forward on a completely uncontroversial issue, it can be put through Committee in about 30 seconds on a Wednesday morning. Only when it is a contentious matter will it be debated on the Floor of the House. The Secretary of State's idea that the negative order procedure is more suitable than the affirmative order procedure certainly leaves the Opposition somewhat disappointed.

When the Secretary of State was dealing with the concessions, he failed to mention the aspect of the money necessary for restructuring, particularly for universities. Perhaps he will deal with that matter in the debate after 8 o'clock. The right hon. Gentleman, together with the Under-Secretary, often made great play in Committee of the £150 million extra that will be available for restructuring, although some people would say that it was for cutting, staff.

Mr. Christopher Hawkins (High Peak)

The relevant amendment comes in the next section of the debate. Only 20 minutes are left in which other hon. Members can speak on the amendments in this part, so I should be grateful if the hon. Gentleman would leave that amendment until the next debate, when there will be two hours in which to speak.

Mr. Bennett

I was making the point that it would have been helpful if we had been given information about this. I hope that the Minister will tell us during the next debate whether the money will be available for future restructuring, as he promised in Committee. He claimed that he would come up with the concessions that were promised in Committee, but a commitment on that is noticeable by its absence from the list of amendments.

In Committee, we were concerned that there should be one funding body for higher education. It is illogical to go on with two separate bodies—one for the universities and one for the public sector. This should have been the time to set up one funding body—

Mr. Spencer Batiste (Elmet)

Does the hon. Gentleman agree that, as a result of the concessions, the Secretary of State has effectively excluded the holder of his office as a potential threat to academic freedom in any university?

Mr. Bennett

I do not accept that, because the Secretary of State did not tell us about the issue of selectivity for departments and institutions. If the Government are prepared to make it clear that they do not want a selective system for institutions but only for departments, that would go some way in the right direction.

As I said, there should be only one funding body, and the Government have missed this opportunity. By insisting that the two funding bodies will be separate, the Government are not trying to develop one secretariat and one system of recording information, so we shall go on with the polytechnics and universities criticising each other and arguing over how they are treated when it comes to funding. It is sad that the Government have not taken this opportunity to deal with funding once and for all.

The major problem with accountability is that the Secretary of State will make all the appointments and they will not be subject to scrutiny. We believe that Select Committees would have been one way of making these people accountable to the country, as opposed to the Secretary of State.

In the final analysis, much comes down to what the Government say rather than legislation. When Lord Joseph was in charge of the Department, he continually ran down the arts and social sciences in higher education institutions and praised science. The climate that the Secretary of State creates is important. Sadly, the climate planned by the Secretary of State for the next 10 years is one of more cuts and the removal of tenure for future appointments. Higher education will contract. The future of the country and of higher education depends on a climate in which there is expansion, not contraction. The future prosperity of this country and its democracy depends on high quality higher education, and it is sad that the main emphasis of the Bill plans to contract rather than expand it.

7.45 pm

Mr. Hawkins

I have inherited a surfeit of riches today but have no time in which to spend them. I am grateful to Mr. Speaker for selecting amendments Nos. 10, 11, 12, 13, 14, 15, 16, 140 and 141—

Mr. Flannery

We did not apply the guillotine—the Government did.

Mr. Hawkins

It is, nevertheless—

Mr. Flannery

rose—

Mr. Hawkins

The Labour Government applied the guillotine at least as often as we have, so the hon. Gentleman should not be such a hypocrite.

I want to record the thanks of all members of the Standing Committee for the help that we received from the Committee of Vice-Chancellors and Principals, the AUT and many others in universities on this part of the Bill.

This could be a long speech, but I shall say only that I took a fair amount of stick from Opposition Members in Committee for not pressing my amendments to the vote after my right hon. Friend had given an undertaking to bring forward the amendments that he has brought before the House on Report. I greatly welcome the amendments that he has tabled; they meet all the commitments that he gave in Committee. What he has done will go a long way to increasing the acceptability of this important Bill to the universities, and I thank him for that.

Mr. Andrew Smith (Oxford, East)

I want to direct a specific question to the Secretary of State about the importance of giving polytechnics the freedom to manage their own resources.

Under the local education authority framework., polytechnics have been free to carry over from one financial year to the next the under or over-spending o:n their budget heads. Until now, there has been no silly rush to spend up in the closing days of the financial year. Similarly, the polytechnic in my area—and others—has been able to accumulate reserves as a buffer against unexpected fluctuations in expenditure.

Will the Secretary of State give us a categorical assurance that polytechnics will not lose, under corporate status, the important flexibilities which local government has given them? It would be disastrous if polytechnics were treated as non-departmental public bodies. There is no reason why they should not enjoy financial arrangements similar to those that govern universities; and to deny there that flexibility would be to impose the double handicap of hampering their competitiveness and adding to their administrative costs. This is a point of great importance to polytechnics and I hope that the Secretary of State will give it a straight reply.

Mr. Timothy Raison (Aylesbury)

I want to refer to two important amendments, Nos. 140 and 141, standing in the name of my hon. Friend the Member for High Peak (M r. Hawkins), myself and others.

Amendment No. 140 is designed to limit the terms and conditions that the Universities Funding Council could put on payments to a university. It is designed to stop any unreasonable interference in the running of a university and the way in which it manages its resources. As we all know—my right hon. Friend must face this—we have a long tradition in this country of freedom in universities and their relationships with the Government. That is tremendously important. There has also been a long tradition of freedom for the University Grants Committee to distribute the resources that Parliament and the Secretary of State give to it. My right hon. Friend has confirmed that with amendment No. 134, which is all to the good.

There is a similar, and equally important, tradition of freedom for the way in which universities spend the money that the UGC has given them. Of course, there are constraints; there must be. Sometimes the money may be tied to specific initiatives. Sometimes it is given for some form of rationalisation of activities between universities. Increasingly, we must recognise and accept that today. There is, too, the basic point of accountability. Nevertheless, the fundamental freedom remains, and so it should. It is part of a proud tradition in a pluralist society.

My right hon. Friend has clearly said that he does not want to centralise everything. In Nottingham in January he said that the universities will have greater freedom to manage their affairs than they have now, which is in line with his policy towards schools and opting out. It is part of the desire to introduce greater freedom. Universities must exercise their freedom responsibly, and I am sure they will. It is right that the additional safeguards embodied in amendment No. 140 should be included, and I hope that my right hon. Friend will accept it.

Amendment No. 141 is also important. It is designed to require that, when a university raises money from other sources, it should not then have the money that it would receive from the Universities Funding Council reduced. That point was raised by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), and it is surely right. If a university is successful in raising money from private sources, industry or charities, it should not be liable for a fall in its receipts from the Universities Funding Council.

I think that my right hon. Friend understands the point. Last October he told the Committee of Vice-Chancellors and Principals that the Government had repeatedly said that they would not abate public support if universities succeeded in raising more private funds. In that context he has recognised in amendment No. 132 that there will be no abatement in the amount of money from central Government to the Universities Funding Council to take account of any money which universities may raise.

We need a further specific amendment to make it clear that the same principle would apply to the Universities Funding Council; in other words, if universities raise money by their own efforts, the UFC will not reduce the amount paid to those universities. It is straightforward common sense. If donors who contribute substantial sums to universities think that that will simply be knocked off the grants given by the Universities Funding Council, the donors will say, "What is the point of giving money to a university?" It would be very depressing if donors were allowed to get into that frame of mind. The Government are right to put emphasis on trying to generate new sources of wealth not just for universities but for the arts and so on. Amendment No. 141 is devoted entirely to reinforcing that principle. I profoundly hope that my right hon. Friend will be able to accept amendments Nos. 140 and 141.

Mr. Batiste

Time is short, so I shall be brief. The Government amendments implement the concessions made in Committee on the Universities Funding Council. They are important because they provide a buffer between the Secretary of State and the universities and defuse many of the genuine concerns expressed on behalf of universities. I believe that the UFC will be a better organisation because of the amendments. Most important, these measures effectively remove the holder of the office of Secretary of State as a potential threat to academic freedom in any institution.

If I should be lucky enough to catch your eye, Mr. Deputy Speaker, I should like to speak further on this in the consequent debate. I simply ask now that members in another place note that my right hon. Friend has responded fully to genuine concern, which was properly argued, with comprehensive amendments which meet those fears.

I thank my right hon. Friend for responding to my concern about the inconsistency in the composition of the Universities Funding Council by adding a provision for the inclusion of professionals on those bodies. Many graduates are recruited by the profession and without representation on those bodies they would be the poorer.

Mr. Kenneth Baker

I thank my hon. Friend the Member for Elmet (Mr. Batiste) for the comments that he has just made. I look upon the amendments not as concessions but as clarification. If they were dragged from me, I was willing to have them dragged; Barkis was willing.

The hon. Member for Oxford, East (Mr. Smith) asked about the roll-over flexibility for polytechnics. I understand the point. I am considering it. I cannot make a statement about it now, but I am aware of it.

My hon. Friend the Member for High Peak (Mr. Hawkins) asked about redundancy compensation. He raised the matter in Committee. I appreciate that he has shown concern as the Bill has progressed that its provisions might lead to senior academics with good records being dismissed without compensation and accordingly demands some kind of statutory protection. I acknowledge his concern. I have looked into the matter and I do not think that the concern is well founded. I have not been able to discover an example in which an academic left his post at the university's instigation, other than on dismissal for good cause, without receiving generous compensation.

I am confident that universities will continue to show themselves to be good employers. The Government are making substantial funds available — £155 million—to help universities to meet the cost of compensation. I am still considering whether there is anything further that I can and should do to reassure academics that fears of dismissal without compensation other than for good cause are unfounded. There will be an opportunity to return to the issue in another place. Because of the phraseology, it has proved difficult to make changes on the face of the Bill. Such changes as I have considered do not improve the position but make it worse for many academics. For the time being I consider that we should avoid statutory interference in the operation of the voluntary schemes of compensation of individual universities.

I understand the spirit which drove my right hon. Friend the Member for Aylesbury (Mr. Raison) to table amendment No. 140. However, it is difficult to provide for it in statutory form. The position now is that a university will prepare an academic plan and the funding which is made available will reflect that academic plan. It may be that some conditions should be attached to certain parts of it. I hesitate to say so, but, as he rightly recognises, the conditions will be imposed by the Universities Funding Council, not by the Secretary of State. I can only impose general conditions upon the amount of money that I make available through the UFC. I have referred to £155 million. I would not have got that from the Treasury had I not been able to impose a general condition that it was to be used for restructuring. That is not just to pay for redundancy compensation. There are within those funds substantial amounts of new money.

Amendment No. 141 deals with new sources of wealth for universities. My right hon. Friend recognises that universities are seeking new sources of money. I have encouraged them to do that, as has my right hon. Friend and many others. Universities are finding new sources of finance much more energetically than in the past. My right hon. Friend wants a statutory declaration that when they go out on fund-raising drives, which are becoming common, they will have statutory protection from reduction of funding from the UFC. I think my right hon. Friend will appreciate that that is technically difficult to achieve because it presupposes that one can determine what the level of funding is likely to be.

It is largely a matter of policy, but I will reinforce the policy. It is definitely Government policy to encourage universities to diversify their sources of funding. Some university interests assert that the Government encourage private earnings solely to spare the public purse. That is not so. We have made clear consistently, and I reaffirm tonight, that we will not abate overall public support if universities succeed in raising private funds. I hope that that statement is clear.

Mr. Raison

Of course, I welcome that statement, but it is a statement about what will be given to the Universities Funding Council. The amendment deals with what the UFC will do with regard to universities. I understand that there may be technical difficulties, but it is an important point. I hope that my right hon. Friend will at least say that a search will be made to find a way of producing something which is technically viable and that there will be an opportunity to consider it in another place.

Mr. Baker

I am always happy to engage in a search to find something better. We have engaged in a search and it is very difficult. It presupposes that one can say what the funding would have been in certain circumstances and then say that it should not be abated. The problem lies in determining what the funding would have been.

I have tried to express the clear policy of the Government. I have every sympathy with the principle that individual universities should not be discouraged from increasing their private funding, as would obviously happen if the UFC were to abate the funding accordingly. That would run directly counter to Government policy. I assure my right hon. Friend that we shall make our view clear to the University Grants Committee and the Universities Funding Council.

Amendment agreed to.

Amendment made: No. 125, in page 106, line 12, after 'section', insert— '(aa) to provide the Secretary of State, in such manner as he may from time to time determine, with such information and advice relating to activities eligible for funding under this section as they think fit; (ab) to provide the Department of Education for Northern Ireland, on such terms as may be agreed, with such advisory services as the Department may require in connection with the discharge of the Department's functions relating to universities in Northern Ireland;'.—[Mr. Kenneth Baker.]