§ The Secretary of State for Employment (Mr. Michael Howard)
With permission, Mr. Speaker, I would like to make a statement about the Skills Training Agency—
§ Mr. Speaker
Order. I think that the House should reflect on the fact that the scenes that we have had this afternoon bring no honour on this place. I call the Secretary of State.
§ Mr. Howard
The Skills Training Agency provides training through a network of 60 skillcentres. It has experienced considerable financial problems over the years. It has broken even only once in the past five years, with a trading loss of about £20 million in 1988–89—
§ Mr. Speaker
Order. The hon. Member for Coventry, South-East (Mr. Nellist) must resume his seat. I have already told him, and he knows full well, that I take points of order after statements. That is when I intend to take them today.
§ Mr. Howard
That was in spite of an arrangement, up to 1987, under which fixed amounts of training were purchased from the Skills Training Agency by the public sector. That arrangement—[Interruption.]
§ Mr. Speaker
Order. The whole House knows that the time to raise points of order arising out of Question Time is after the statement, and that is when I intend to take them.
§ Mr. Howard
That arrangement was criticised by the Public Accounts Committee and ended in 1987.
In March of last year my predecessor announced to the House that he had decided, on the basis of a feasibility study, that the STA should be offered for sale. Throughout the sale process it has been made plain that the Government's interest is in receiving bids from those who wish to run a training business.
I have now received advice from Deloitte Corporate Finance on the final offers received. In the light of that advice, I have agreed terms of sale with two bidders. Their offers together cover 47 skillcentres, plus the STA's head office, mobile training service, sales teams and colleges. The main successful bidder is Astra Training Services Limited, a company formed by a management buyout team in the STA head office. I am placing in the Vote Office full details of which parts of the STA I propose to sell, and to whom, together with the Government's objectives for the sale.
This is an extremely satisfactory outcome to the sale process. It enables the creation of a viable private sector network of training provision with good coverage of major 142 centres of population in England, Scotland and Wales. Over three quarters of the skillcentres will be sold on the basis that they will continue to provide training.
This will also be the first successful management buy-out bid in the Civil Service. The management buy-out team knows the business and has detailed plans, backed by professional advice, to develop training both for unemployed and for employed people in a way that responds to the needs of employers. Its plans include investment of over £11 million in the first three years, and opportunities for staff to participate more fully in the business through an employee share ownership scheme.
The existing five regional offices and 13 skillcentres are not included in this sale package. The regional offices do not feature in the management structure envisaged by Astra, and were not part of its bid. The 13 skillcentres are poorly utilised and at some no training is currently taking place. I propose to close down the training businesses in these parts of the agency, and wherever possible the staff will be redeployed to other posts. Alternative arrangements will be made to allow trainees to complete training in progress.
In addition to producing a substantial private sector training network, I expect the course of action I am announcing today to yield a positive return to the taxpayer. The sale of the training business will involve a payment from the Government to Astra of some £11 million. This is a price determined in the sale process after open competitive bids and subsequent negotiations. It reflects the costs of turning around a business which is currently unprofitable and creating training businesses with good prospects of viability.
The sites of those offices and centres which are not included in the package to which I have referred will be offered for sale. Having obtained professional valuations, I expect the net proceeds from these sales to exceed by a significant margin the payments from the Government to the training business purchasers.
My officials will now consult STA staff and their trade union representatives on the implications of my statement for staff, including the measures I have taken to give effect to ministerial undertakings about pension and other arrangements for staff who transfer into the private sector. In due course, I shall lay orders before the House to ensure that when the sales are concluded, staff who transfer are protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981.
I wish to pay tribute to staff who have continued to work unstintingly for the STA's success through a potentially unsettling period. For them, for the agency's customers and for the STA's contribution to our national training effort, the uncertainty of the recent past is now over and there are sound prospects for the future.
§ Mr. Tony Blair (Sedgefield)
Will the Secretary of State agree that the 60 skillcentres, which employ over 3,000 people and which last year trained tens of thousands, are a major national training asset whose secure future is in the public interest? As for the 13 centres that are to remain unsold, am I right in thinking that they are to be closed? What about the training that is done at these centres? What guarantee is there that that will continue? As for the 47 that are to be sold, what are the terms as to the quality of training contained in the sale? Are there any such stipulations?
143 Given the fact that some of the sites to be sold will be extremely valuable, and given that the Government will be paying money to the management buy-out team to take the skillcentres off their hands, what protection, especially in the light of the Government's record, will we have against asset stripping and the making of unacceptably large gains through the sale of the sites?
What assurances will be given to trade unions about their interests and about time for consultation on them? As for the right hon. and learned Gentleman's remarks about the record of skillcentres, it is not right that the report of Deloittes on the Skills Training Agency has been published? Will he confirm for the benefit of the House that that report makes clear that the deficit of the skillcentres is largely due to the Government's own employment training scheme? Is it not right that they were breaking even before? Will he also confirm that the costs charged by skillcentres are comparable with those of private sector training providers for craft training and are cheaper for supervisory training? Is not the move to more employer-related training already happening? In those circumstances, what other than simple prejudice leads him to believe that the skillcentres cannot prosper in the public sector but must be put into the private sector?
Is not the essential point that after privatisation the future of the skillcentres as a national network and a national resource, whether they grow or whether they close, will depend not on their value to the community at large but simply on their commercial value to their new owners? With our record on training, described by the Secretary of State's predecessor as mind boggling, does not he accept that we have a massive gap to make up with our competitors? With a deficit and a crisis in relation to every main component of new technology, as well as traditional skills, why do his Government, uniquely in Europe, believe that market forces can succeed in the future where they have failed in the past? Should not he and his Government learn the lesson that today, with our admitted and huge training deficit, our national priority should be not to privatise training but to invest in it?
§ Mr. Howard
The hon. Gentleman's hysterical reaction shows that he is determined to emulate the example of his predecessor the hon. Member for Oldham, West (Mr. Meacher). He leaves entirely out of account the fact that the skillcentres are currently losing nearly £30 million a year. The hon. Gentleman referred to the employment training scheme. He should know about, and should take into account, the remarks of the Public Accounts Committee of the House on the value for money provided by the skillcentres to the employment training scheme. As for his general attitude, it has, in common with so much of what we hear from the Opposition Benches, the refrain,Things are dreadful as they are; let us keep them exactly as they are.Dealing with the questions that the hon. Gentleman put, I agree that it is important that secure training arrangements should be made at as many centres as possible. If the hon. Gentleman looks at the objectives that the Government have set themselves in considering the bids they have received, he will see that that features prominently among those objectives and is a key factor why we have accepted the management buy-out bid coming, as it does, from those with great experience of training and commitment and dedication to training.
144 The hon. Gentleman suggested that the future of training in the centres might be imperilled by the prospects of the gains that could be made from selling the properties. The answer to that question lies in the clawback arrangements which are part of this transaction. They provide that if any centre is sold in the first three years the taxpayer will receive 100 per cent. of the development gains. If the sale is in the fourth year, the taxpayer will receive 75 per cent., 50 per cent. if it is in the fifth year and 25 per cent. if it takes place in any of the subsequent five years. That far-reaching clawback arrangement provides the taxpayer with secure assurances against the danger to which the hon. Member for Sedgefield (Mr. Blair) referred.
I am sure that the hon. Gentleman will appreciate that the Deloitte report contains a great deal of information that is commercial and, therefore, confidential. I am sure that he would not expect me to make such information public. We have achieved a deal which is excellent for the taxpayer and for those who want to continue to receive training from the skillcentres. The deal will, I hope, enable all those who are concerned in the management buy-out to prosper from it in the years ahead.
§ Mr. Andrew Rowe (Mid-Kent)
My right hon. and learned Friend should be aware that this opportunity for the staff who have been so closely involved in the centres to make a go of it in the private sector is greatly welcomed. Can he assure the House that the proposed training arrangements will be meshed in properly with the vocational qualifications net which is gradually being spread? Does my right hon. and learned Friend also recognise that, at a time when individuals are at last beginning to realise that responsibility for improving their own opportunities and promotion rests at least as much with them as with employers, this signal is extremely welcome?
§ Mr. Howard
I am grateful to my hon. Friend for his comments. It will be very much in the interests of those who run the centres to mesh them in with other arrangements in the way that my hon. Friend has suggested. I have every expectation that what he has asked for will come to pass.
§ Mr. Ron Leighton (Newham, North-East)
Is the Secretary of State aware that, in the previous Parliament, the Select Committee on Employment conducted an inquiry into skillcentres and the Training Agency, and that in the course of that inquiry Conservative Employment Ministers went on record and gave assurances that a national network of skillcentres would be maintained in the public sector and that it was in the national interest to keep such a benchmark of quality? That has now gone.
Is the Secretary of State also aware that the Select Committee said then that the financial arrangements that were being put in place would not work and would push the Skills Training Agency into the red, and that the Select Committee was right and the Government were wrong? Is he also aware that my hon. Friend the Member for Sedgefield (Mr. Blair) was right to draw attention to employment training? The skillcentres gave high quality training to the construction industry and others for about £140 or £150 a week. The employment training organisation wanted to pay £17.50 a week and the sums did not add up.
Is the Secretary of State also aware that one of the attractions to buyers is the land and buildings, which they 145 will obtain so cheaply? If the STA had been able to sell off its surplus land and buildings, it could have made the books balance by a crazy accountancy device, but it was not allowed to do so. Is not this a saga of broken promises and an extremely bad management which will lead to a diminution of training assets and abilities?
§ Mr. Howard
No, I do not accept the hon. Gentleman's points. I made it clear in my answer to the hon. Member for Sedgefield (Mr. Blair) that the clawback arrangements on the sale of property would provide that the development gains would be returned to the Government in the proportions that I identified, which destroys any substance that there might otherwise have been in that point. The hon. Gentleman is the Chairman of a distinguished Committee of the House, the Select Committee on Employment, and he will no doubt want to give full weight to the observations made by other Committees of the House, including the Public Accounts Committee. The changes in the financing arrangements, to which the hon. Gentleman takes exception, were included in the observations of that Committee.
Nothing in the announcement detracts from or affects the Government's guarantee to provide employment training for those who are eligible for it. It will be perfectly possible for those who are eligible, including those in areas where it is necessary for the reasons that I have given to close some of the centres, to obtain employment training.
§ Mr. James Couchman (Gillingham)
My right hon. and learned Friend will probably agree that skillcentres have not always looked to job training for the future. What assurances has he had from Astra Training Services Limited that the skillcentres that it buys will provide training for the future rather than jobs for the past? It will take over a skillcentre in my constituency.
§ Mr. Howard
My hon. Friend makes an important point. It will be in the interests of those who will run the centres in the private sector to make sure that they provide the sort of training that is needed. That is the way in which we can be assured that the training that we want to see take place is provided. The management buy-out teams that have been the successful bidders have great experience in training and are dedicated and committed to continuing to provide training. In the private sector, free of the bureaucratic constraints under which they have laboured until now, they will be able to respond in an effective fashion to the demands of the private sector.
§ Mr. David Lambie (Cunninghame, South)
As Irvine skillcentre in my constituency will be the subject of a management buy-out and will not close, I welcome the statement today on behalf of my constituents. Could the Secretary of State give us more details on future negotiations between the trade unions and the new management on conditions and pension rights?
§ Mr. Howard
I am grateful to the hon. Gentleman for his response. He recognises the good sense of the proposals that I have just announced. Consultations on conditions will be held with the trade unions. The staff are being informed of the proposals simultaneously with my announcement. I have obtained an independent assessment of the pension arrangements that Astra proposes. I have been told by the Government Actuary's department 146 that they are comparable with the pensions arrangements that would have applied if the staff had remained civil servants. The details will be disclosed to the staff in the consultations which will take place in the next few weeks.
§ Mr. Patrick Thompson (Norwich, North)
The employees and trainees at the skillcentre in the Mile Cross area of my constituency will have been interested to hear my right hon. and learned Friend's statement. Will he confirm that this good news removes any immediate threat of closure from the skillcentre and will enable it to work with greater flexibility to address the serious skills shortages that remain in the Norwich area?
§ Mr. Howard
The skillcentre to which my hon. Friend refers, together with others, has been bought as a going concern on the basis that training will continue to be provided there. That is a tremendous opportunity for those who presently receive training, those who want to receive training in the future, the management buy-out team and the staff of the business. They will know that if they provide the kind of training that is needed in the world into which we are moving—where, as we heard earlier, there will be an increasing emphasis on the need for training—their future will be secure.
§ Mr. Bob Cryer (Bradford, South)
But is not it second best for the staff involved? Would not it have been preferable to keep them in the public sector, particularly in view of the excellent work that they have undertaken, which the Secretary of State recognised? Does he agree that there is a question mark over the level of quality? What provision will he make to ensure that the standard of training is retained, particularly as the organisation is now dedicated to profit whereas previously it was completely dedicated to training?
§ Mr. Howard
I think that it is very much a first best, and not a second best as the hon. Gentleman suggested. I hope that in due course even the hon. Gentleman will see the advantages to his constituents of the measures that I have just announced.
On quality, I trust that the hon. Gentleman will be aware of the arrangements that we are putting into place under the training and enterprise councils. They will recognise and accredit training providers for the purpose of the providers playing their part in the programmes that will be carried out under the auspices of the training and enterprise councils. If the centres are to play their full part in those programmes, it will therefore be very much in their interests to provide the kind of quality training that will lead to accreditation under the training and enterprise councils. The hon. Gentleman need have no fears on that score.
§ Mr. Anthony Coombs (Wyre Forest)
As an hon. Member with a skillcentre in his constituency, may I warmly welcome the privatisation of the centres, which will be more flexible, efficient and responsive to the needs of industry? To that end and because it is important that their links with the training and enterprise councils and the local employer networks, especially in relation to training in small firms, are as close as possible, what measures do the Government propose to ensure that that is so?
§ Mr. Howard
I am grateful to my hon. Friend for his welcome for my statement. It will clearly be in the direct interest of everyone concerned that the close co-operation 147 that he seeks should take place. That will be very much in the interests of those who manage the centre in his constituency and of the training and enterprise councils. In that respect, those interests will exactly coincide, which is the best assurance that my hon. Friend could receive.
§ Mr. Simon Hughes (Southwark and Bermondsey)
I am not opposed to the sale of the Skills Training Agency and regard a management buy-out as the most welcome form of sale. However, given that we are to lose one third of the present network and that there will not be any new resources, will the Secretary of State be much more explicit about his assurances? Will he assure us that the quality and standard will be as high in the future as it is now? Will he ensure that there will be the wide range of skills training in the future that there is now, both in subject and in geographical area? Will there be the same regional assessment of skills needs as now? Will he ensure that trainers will be trained as they are now, and, above all, given that our skills training is so woefully inadequate in Britain, will he ensure that we shall improve both our commitment and the resources from both the public and private sectors in the future which we have not sought to do in the recent past?
§ Mr. Howard
I am grateful for the hon. Gentleman's words of welcome, although they were somewhat qualified by his later remarks. I hope that he will forgive me if I correct his arithmetic. It is not the case that one third of the centres are not being sold; over three quarters of the centres are being sold as part of the proposal—
§ Mr. Howard
No, fewer than one quarter will be lost.
The best possible assurance of quality that anybody could have lies in the clear incentives that will be provided for the highest possible standards to be delivered through the centres. I have every expectation that, in each of the respects mentioned by the hon. Gentleman, quality will be improved. The quality standards will be much higher than in the past because those who are running the centres in the future will be the people with experience, commitment and dedication who will have every incentive to provide the best possible quality of training. That is the best assurance that anybody could seek.
§ Mr. Richard Holt (Langbaurgh)
Does my right hon. Friend accept that his statement will be widely welcomed by industrialists and commercial people throughout the country? However, may ask him a wider question? Is he talking to the Secretary of State for Education and Science about the school-leaving age in this country and the need to re-examine it in the light of 1992 so that we can be competitive with the Germans and the French, who are not so hidebound and do not have such a late leaving age?
§ Mr. Howard
I know that my right hon. Friend the Secretary of State for Education and Science is carefully considering all the matters that are relevant to an improvement of the education standards of the children in our schools when they leave school. I am sure that he will want to take my hon. Friend's remarks into account.
§ Mr. A. E. P. Duffy (Sheffield, Attercliffe)
The Secretary of State made much of the financial loss incurred by skillcentres. Is he aware that the skillcentre in Sheffield, it, my constituency, which he proposes to sell off has shown a considerable financial surplus in each of the past four 148 years? What is motivating him? Has he any evidence that one single employer or trade union in Sheffield has sought this change? Can he given any assurance about the future costs and numbers of training places in Sheffield, and say whether they will be available to the unemployed?
§ Mr. Howard
As to whether the agencies are operating at a profit or loss, the hon. Gentleman ignores the figures that I gave which show that in the last year for which full figures are available—1988–89—the agency made a loss of £20 million and for the current year the loss is expected to be £30 million. As for training in Sheffield, I repeat what I said earlier: nothing in my statement detracts from or qualifies the Government's guarantees on employment training or youth training. I have every confidence that more than enough training for those who need it will be available in the Sheffield area.
§ Mr. James Paice (Cambridgeshire, South-East)
Does my right hon. and learned Friend agree that the best and most exciting part of his welcome statement is that this is a management buyout? The management, currently civil servants, has realised that, free from the burden of state ownership and stimulated by private ownership and the opportunity to run its own business, it can turn around a £30 million loss. Does not that demonstrate quite clearly that public ownership can never work as well as private ownership?
§ Mr. Howard
My hon. Friend is absolutely right. It is for reasons of pure dogma that the Opposition fail to recognise the opportunities that are available to people when they are given control of their own enterprise in the way that this management buyout makes possible. My hon. Friend has entirely recognised the advantages of the proposals.
§ Mr. D. N. Campbell-Savours (Workington)
The Secretary of State should not hide behind the Public Accounts Committee; we were not responsible for the decision. Is not it ironic and perverse that on the very clay that I seek and, to some extent, secure assurances from Ministers in the Department of Employment on the future of training arrangements in west Cumbria in relation to the thousands of people who will be made redundant with the rundown of contracts at Sellafield, the Secretary of State should come to the Dispatch Box and close the skillcentre in Maryport? When this news hits the streets of Maryport and west Cumbria tonight, my constituents will say that Ministers are hypocrites and nothing else.
§ Mr. Howard
I hope that the hon. Gentleman's constituents will look at the facts and behind the rhetoric of which he has just been guilty. Nothing that I have said detracts from the assurances given by my hon. Friend the Minister of State earlier, which I wholeheartedly endorse. The hon. Gentleman will be aware that the skillcentre in Maryport, which is currently losing considerable sums of money, does not have a single employment training placement. It is not contributing to training needs in Cumbria. That contribution can be made in other ways, through other providers of training, which will continue to provide all the training necessary to deal with the problems to which the hon. Gentleman referred.
§ Mr. Harry Greenway (Ealing, North)
Does my right hon. and learned Friend agree that the new system that he has outlined will ensure that people are trained for work 149 that is actually available rather than for jobs which are not there, as has sometimes happened in the past? On the basis of that principle, will he rethink the closure of the Perivale centre in my constituency? That centre is at the heart of a highly industrialised area, where there is a strong demand for training and where employers are prepared to pay for training. Will he ensure, in any event, that the excellent staff at the Perivale centre do not miss out? Will he see that they are offered the alternative jobs that they deserve?
§ Mr. Howard
I agree entirely with the first part of my hon. Friend's comments. The whole thrust of our training policy is to make sure that the training that is provided is relevant to the needs of today and of tomorrow. We have to ensure that people get the training that they need. As my hon. Friend will be aware, the skillcentre in Perivale has been empty and disused for some time, and its lease will run out in March. I therefore cannot give him the assurance for which he has asked. However, we shall make every effort to redeploy the staff.
§ Mr. Lawrence Cunliffe (Leigh)
Does the Minister agree that the Wigan skillcentre has a very high reputation as an efficient and effective unit? It is well admired in the north-west region. Indeed, on a recent visit the Prime Minister complimented it. The Minister's statement today will do nothing to improve the efficiency of that centre, no matter to what part of the private sector it goes. Great distress and dismay is being caused. The staff themselves see this as an irresponsible move which will result in a lack of the authority that is needed to deal with the situation.
§ Mr. Howard
I am happy to endorse the hon. Gentleman's comments about the excellence of the Wigan skillcentre. I hope that he will do his best to assure the staff that these proposals, if looked at constructively, will be seen to be giving them a tremendous opportunity for the future—enabling them to build on the excellence of the centre, and ensuring that it can provide training of even higher quality.
§ Mr. Robert Hayward (Kingswood)
Will my right hon. and learned Friend clarify what he said about regional offices? I am not quite sure that it was heard in all parts of the House. His announcement—particularly the part about retention of land and development gain—will be greatly welcomed in the Bristol skillcentre. That announcement not only clarifies the position for the immediate future, but indicates the intention for at least three years, and probably a lot longer. Does my right hon. and learned Friend agree that it is necessary to make it clear to management in all industries that there is a need to train all people, regardless of their age and their skills, and whatever the system?
§ Mr. Howard
I agree entirely with everything that my hon. Friend has said. I am grateful to him for his observations. The regional centres do not fit in with the management structure that Astra has proposed, and they will therefore be closed. My hon. Friend will be aware that the regional centre in his area is located in the skillcentre itself. As I said earlier, every effort will be made to redeploy the staff.
§ Mr. Speaker
Order. Hon. Members will be aware that, after this, there is to be an important debate on public expenditure, as well as a ten-minute Bill. I will allow questions to continue until 4.15 pm so that as many Members as possible may be called. I ask hon. Members to be brief.
§ Mr. Ieuan Wyn Jones (Ynys Môn)
Does the Secretary of State accept that, as an inevitable consequence of his decision, small rural skillcentres will feel extremely vulnerable? Does he accept that training needs in rural communities are vastly different from those in urban areas? Does he agree that, in order to meet those needs, we need a comprehensive and coherent plan to ensure that the economy, which in many parts of the United Kingdom is very fragile indeed, is given an opportunity to grow from within? Does he accept the view of many people who are involved in training in rural areas that, because of the fragility of the economy there, we must have public support for training? Will he assure people living and working in rural areas that, under this proposal, the Government's commitment to training in those areas remains undiminished?
§ Mr. Howard
I can certainly give the hon. Gentleman the assurance for which he asked in the latter part of his question. It is true that there are particular training needs in rural areas. One of the great advantages of the training and enterprise councils is that they will be locally based and will therefore be able to adjust the training that is made available under their auspices to the needs of the area. That cannot but help to ensure that the needs of rural areas are properly reflected. The hon. Gentleman must know of the tremendous amount of public support that will go into training. Very nearly £3 billion will be made available to the training and enterprise councils in their first year of operation.
Those who work in the skillcentre in the hon. Gentleman's constituency should not feel vulnerable. The very fact that they are included in the management buy-out bid shows the considerable confidence that the management team has in the viability of that skillcentre.
§ Mr. Dave Nellist (Coventry, South-East)
Will the Secretary of State give a specific guarantee that services and jobs at the Coventry skillcentre will be retained after the disgraceful privatisation that he has announced today? Since his statement contained no assurances on the quality of future training—I rule out the Mickey Mouse employment training and youth training schemes—have not we lost today public accountability for training standards in Britain? If the senior managers will be so good under privatisation, why have they cocked things up in the past three or four years so that a quarter of the skillcentres are having to be closed? The whole thing stinks.
§ Mr. Howard
The hon. Gentleman's remarks about employment training and YTS will be regarded as nothing less than an insult to those millions of people who have benefited from those schemes during the few years that they have been in operation. The best assurances that any sensible person could want with regard to the Coventry skillcentre is that it will be run by those with experience of training, with commitment and dedication to training, operating under a regime that will provide every incentive for them to provide the best possible quality training in 151 response to the needs of the private sector. I do not expect the hon. Gentleman, imprisoned as he is in the dogma that is being abandoned even in eastern Europe in recent weeks, to see the good sense of the proposal, but I am confident that others will.
§ Mr. Gerry Steinberg (City of Durham)
I am delighted that the Durham skillcentre will remain open, but I am not so delighted that it is being privatised. On a number of occasions I have had the pleasure to visit the skillcentre, which gives excellent training and I shall be disappointed if the measures announced today affect that. Will the Minister confirm that employees at the skillcentre will be involved in its management and that all jobs will be safeguarded? Will the Minister ensure that the rights of civil servants at the Durham skillcentre, some of whom have worked there for 30 years, will be protected?
§ Mr. Howard
Many of the rights will be protected by the regulations to which I referred in my statement, and the hon. Gentleman will be able to give his constituents assurances based on those regulations. In many respects, the arrangements will go further than those regulations provide. For instance, the regulations do not cover pensions, and I am sure that the hon. Gentleman will have been interested in what I said about pensions earlier. It is the management buy-out team's intention to involve staff to the greatest possible extent. I mentioned in my statement the possibility of participation in the business. It is to those intentions and objectives that the hon. Gentleman should look for the assurances for which he asked, and I am confident that, in large measure, they will be available.
§ Mr. Mike Watson (Glasgow, Central)
I want to press the Minister on two points that have been dealt with already. One is the question of quality assurance on which he has given an inadequate answer. The Minister talked of incentives. My first question is—
§ Mr. Watson
What if the incentives prove inadequate? How does the Minister propose to measure or monitor quality assurance? If that does not measure up appropriately, what sanctions does he propose to operate? It is all very well talking about training needs, but what about quality assurance for those receiving the training?
§ Mr. Howard
If one reflects on the history of the matter, it is astonishing to suppose, as the hon. Gentleman does in his question, that the only way to obtain quality assurance is through public sector involvement, public sector instruction or public sector monitoring. We are much 152 more likely to obtain improvements in quality by transferring the centres to the private sector where they will have every incentive to provide the higher quality standards that I want to see.
§ Mr. Elliot Morley (Glanford and Scunthorpe)
Presumably the management of the skillcentres will manage the new company—the management who oversaw a £30 million loss. I do not suppose that in the private sector it will have a magic wand with which to reduce those losses. Is the Minister confident that a national system of skillcentres will be retained and that such centres as the one in my own constituency will be protected to ensure at a national level the quality and provision of training?
§ Mr. Howard
I remind the hon. Gentleman of what I said in my statement about the investment that the management buy-out team intends to make—some £11 million in the first three years alone. I remind him that the company will be free of the constraints under which it has been operating in the public sector. I also remind him of the incentives which will be available to it to improve its standards in the private sector; we know that demands for training are bound to increase in the years ahead. In those circumstances, there is every reason to suppose that this will prove a considerable success and that the standards of training provided will increase.
§ Mr. Tam Dalyell (Linlithgow)
On a point of order, Mr. Speaker. As a distinguished QC himself, could the Minister have a word with the Solicitor-General, who came very courteously to the debate on the Property Services Agency and Crown Suppliers Bill and the very complex issues of the Transfer of Undertakings (Protection of Employment) Regulations 1981? He will know better than most that the law of detriment is very complex. Could he discuss with the unions concerned, before laying the orders, exactly what the difficulties are, so that they do not have to employ expensive QCs as hapened in relation to the PSA and the Crown Suppliers?
§ Mr. Howard
I am sure that the consultation which is about to take place with the trade unions and the employees will be far ranging, and it may well embrace the complex question to which the hon. Gentleman has referred.
§ Mr. Speaker
Order. I apologise to the Front-Bench spokesmen whom I have not been able to call. I hope that they will find some other opportunity to refer to this matter.