Grand Committee Report of 23 April 1996

Official Report of the Committee on the Education (Scotland) Bill [H.L.]
Tuesday, 23rd April 1996.
The Committee met in the Moses Room at half past three of the clock.
[The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]
The Deputy Chairman of Committees (Lord Ampthill): Before I put the question that the Title be postponed, it may be helpful to remind your Lordships of the procedure for today's Committee. Except in one important respect, our proceedings will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all noble Lords are free to attend and participate; and the proceedings will be recorded in Hansard. But the House has agreed there shall be no Divisions in this Committee. Any issue on which agreement cannot be reached should be considered again at the Report stage when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
I should also explain what will happen if there is a Division in the Chamber while we are sitting. This Committee will adjourn as soon as the Division bells are rung and will then resume after 10 minutes.
Lord Taylor of Gryfe: Will the Report Stage be in the full House?
The Deputy Chairman of Committees: Yes.
On Question, Title postponed.
Clause 1 [The Scottish Qualifications Authority]:
Lord Ewing of Kirkford Lord Ewing of Kirkford moved Amendment No. 1:
Page 1, line 19, at end insert (", from amongst persons nominated by, or by bodies appearing to the Secretary of State to represent the interests of, the Universities of Scotland, education authorities, colleges of further education, institutions of further education, central institutions, educational advisers, teachers employed in educational establishments and grant aided and independent schools").
The noble Lord said: I move Amendment No. 1 standing in my name and that of my noble friend, Lord Carmichael of Kelvingrove. It would be appropriate and convenient for the Committee if we were to discuss Amendment No. 2 together with Amendment No. 1. I am personally grateful for the guidance which has just been given about the procedure in Committees of this nature in the Moses Room. I was not part of the usual channels which agreed to this procedure because I am one of the awkward squad. However, if I had been part of the usual channels, I would have argued strongly on a matter as important as this Education Bill, with its implications for nursery provision, that the measure should be taken in the much
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larger forum of their Lordships' House. Be that as it may, this is the procedure. I accept that, and I shall play my full part.
The amendments I propose to Clause 1 deal with a matter we raised quite strongly at Second Reading and which, I see from the report of the Select Committee sittings in Glasgow, was raised quite strongly by witnesses appearing before that committee. They concern the whole question of membership of the Scottish qualifications authority and the ability of the Secretary of State—whoever is Secretary of State, because we are not talking about personalities here—to appoint up to 15 of its members. We on this side of the Committee agree with the establishment of the Scottish qualifications authority, replacing, as it does, SCOTVEC and the Scottish Examination Board and bringing them all together in one comprehensive organisation. We are not opposed to that; it fits in with the Government's proposals on the Higher Still project which, again, we on this side of the Committee fully support.
Our concern, as expressed in these amendments, is the composition of the Scottish qualifications authority. It has to be understood that the funding of the authority will come 70 per cent. from local authorities and those educational organisations that use the services of the authority. But there is no legislative right for those authorities who are funding the Scottish qualifications authority to have seats on its administrative board. The purpose of these amendments is to seek to write into the legislation the statutory right of the authorities, who will be funding by and large the Scottish qualifications authority, to have representation, and that the nominations for service on the board of that sector of education—the local authority sector and the various organisations that will use the SQA services—should come from these organisations and the Secretary of State would then automatically appoint them to the board.
It has also to be explained that up until 1st April, when the present arrangement came into being, the local education authorities in Scotland had a statutory right to be represented on the Scottish Examination Board. As regards the putting together of the budgets of both organisations, although in the past two years SCOTVEC has not consulted CoSLA on the composition of its budget or on the way in which it intended to spend the budget, up until the present time, there has been a statutory obligation on both the Scottish Examination Board and SCOTVEC to consult CoSLA on the composition of the budget, the compilation of the budget, and the way in which the budget was to be spent. So these statutory rights were with the old local authorities before the new unitary authorities came into being. It is only as a result of the new proposals in this legislation that these statutory rights are being removed from local authorities.
Therefore, I would hope that, from what was said in evidence to the Select Committee sitting in Glasgow by the various witnesses and what I have said today, the Minister will be persuaded that there ought to be provision in respect of a group or organisations which will provide 70 per cent of the funding of the Scottish qualifications authority. There ought to be statutory

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provision in the legislation for representatives from these organisations on the Scottish qualifications authority. I beg to move.
Lord Addington: The amendment deals with a problem which we always have whenever we consider a new board, especially one to do with education, and that is the question of who takes part. We need the relevant people to be concerned with the board itself. In the past, I have sat through many Committee and Report stages and we have had a long list of bodies of those to be included. This is a slightly different approach as it concerns persons who are nominated, or who appear to have connections with the matter. If you are doing this, you are probably saying these are the groups of people who must be consulted because they have the knowledge and they have the funding. Surely this is a body which must be incorporated and, although I was unaware of it, these groups are apparently already involved. Surely that makes a very valid case for them being connected, and I am afraid that the first point made by the noble Lord is also brought home here.
We have a potentially very controversial point here, and it is probably the only really controversial point on the first part of the Bill. The more I have listened and thought about the Bill, the more unhappy I have become with the idea that we cannot actually vote in the Committee stage. This is probably the first example and I should make the point here and now that I had not realised just how potentially constricting this procedure is. I hope that on a matter as important as this the Minister will not take a stance in Committee and come up with something which we regarded as unreasonable because we cannot actually vote on it. It is a very important issue.
It is worthwhile bringing this into context here. It is to be hoped that we can get some assurances on this or a similar amendment or possibly a provision on the face of the Bill.
Baroness Carnegy of Lour: These two amendments proposed by the noble Lord, Lord Ewing, are important because they bring before the Committee formally the feelings of a number of groups which want to make sure they are represented on the new Scottish qualifications authority. We know it is natural that they are anxious about the matter but there are snags to it. We had a considerable discussion with a number of people when the Scottish Select Committee took evidence in Glasgow in March and it was interesting to hear what those with experience of the system as it now stands had to say. The noble Lord, Lord Sewel, instigated the discussion and he may want to comment on that.
At paragraph 47 in the Select Committee's report, Dr. Hamish Long of the Scottish Examination Board said that he liked the kind of balance that was provided by that board as now set up and he justified that. He was followed by Mr. Miller, who is the chairman of both the Scottish Examination Board and the SCOTVEC. He thought that the way the SCOTVEC works at the moment, which is that none of the members see themselves as representing any particular sector, was better and he explained that. He made a very good case
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for the Bill so far as that is concerned and the way in which it is currently set out. I support that view. We also discussed that on Second Reading and there is evidence that when people do not see themselves as representing particular sectors it is easier to have a balanced and good discussion.
As regards Amendment No. 2, in which the noble Lord, Lord Ewing, suggests that not less than one-third of the total membership should be individuals appointed by some local authority associations, up to a point that applies. However, I appreciate that the local authority associations are pointing out to us in their briefing that they have a particular interest because 70 per cent. of the costing is met by them in so far as they pay the charges. I am not sure that that is the answer because if the local authority members only were appointed by CoSLA the problem would be that they would be speaking for themselves but others would not. Do we refer to CoSLA? I am not sure whether we can for the sake of our discussions.
I do not believe that there is any way in which they can have a special place but it might be helpful if they could. They certainly have a special role in the whole performance and we appreciate that. Although I cannot actually support either of these amendments I have a certain sympathy with Amendment No. 2 in that it identifies the special role of CoSLA on the authority.
The arrangement whereby the Committee stage of the Bill takes place off the Floor of the House was raised by the noble Lord and mentioned also by the noble Lord, Lord Addington. It seems to me there is a balance to be struck. It is rather nice when not very many people usually participate on purely Scottish Bills to have plenty of time and to sit on days that suit noble Lords who are taking part as opposed to having the business squashed in early on Monday or late on Thursday which so often happens to us on the Floor of the House. I like that; I like the informality. I thought when I took part in the Committee stage of the Deer (Amendment) (Scotland) Bill that it was rather a satisfactory way of doing things, although I appreciate that if one wishes to move a large number of amendments there will be more to vote on probably at Report stage. It cuts both ways. However, I am somewhat in favour of the arrangement so far. We shall see how it goes today and tomorrow.
3.45 p.m.
Lord Sewel: I should declare an interest at this stage as a vice principal of the University of Aberdeen, especially in relation to the matter before us. The difficulty with the clause is that it is undefined. It leaves a totally unstructured agency to take over. It is not a matter of who wishes to be represented on it but of those the authority needs to have on it in order for it to work and to do the job it seeks to do. Most importantly, the work of the authority has to command confidence. Those who have recourse to the examination procedure and who use it either as consumers or employers need to have confidence that the job is being done properly. That can only be done if the authority is constituted in a proper and appropriate way.

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It is difficult to see how a Scottish qualifications authority can carry confidence with universities when universities clearly depend upon school examinations as a means of judging entry if the universities as a representative group are not on the authority to begin with. That is the same for all the various bodies to which the amendment draws attention. It is not a matter of who wants to be on it; it is whom the authority, needs to have on it for the authority to do the job and carry confidence. A degree of structuring is absolutely essential.
The Parliamentary Under-Secretary of State, Scottish Office (The Earl of Lindsay): The arrangements that led to the Bill being taken in the Moses Room were agreed through the usual channels. The benefit is partly as described by my noble friend Lady Carnegy. In addition, we can at Report stage go over ground we have probed in Committee and the House can be divided and opinion sought. So noble Lords are not being robbed of the opportunity to test the opinion of other noble Lords.
I am grateful that we shall be able to scrutinise the Bill with the range of experience and expertise that we have. The noble Lord, Lord Ewing, has considerable experience of various parts of Scotland's public life and my noble friend Lady Carnegy is a former convenor of a regional council education committee. Indeed, the noble Lord, Lord Sewel, as he pointed out, is a vice principal of the University of Dundee.
Lord Sewel: Aberdeen.
The Earl of Lindsay: I apologise to the noble Lord. The useful point is that we shall be able to look at the issues that arise using their combined experience and scrutiny.
I recognise that there has been some concern that the Bill does not contain provisions specifying how the Secretary of State should choose members of the SQA. The noble Lord, Lord Sewel, articulated that. In that regard I found the report of the evidence to the committee most helpful.
The constitution of the board of the SQA was given careful consideration during the drafting of the Bill. The existing SEB system, in which constituent interests are guaranteed a set number of places, was considered to be too inflexible. It was also felt that the board itself was too large. These were key findings of the Policy and Financial Management Review of the SEB, published in 1993. The SCOTVEC structure, which has a smaller board, appears to have worked much better.
It is intended that the individuals whom the Secretary of State appoints to the board of the SQA will bring a breadth of experience covering a broad range of interests. However, specifying that interest groups should be able to nominate members for appointment would limit the scope for the Secretary of State to make appointments covering a wide spectrum of abilities and experience or to cater for other important interests.
The pitfalls in this approach are underlined in the proposed amendments and were picked up by my noble friend Lady Carnegy. One of the pitfalls, for example,
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is that the amendment does not refer to the interests of industry or employers, while the other amendment reflects only the interests of the local authorities.
I understand, however, that there is genuine concern that the members of the SQA should represent a balance of views and I acknowledge the point made by the noble Lord, Lord Ewing, that the funding of the SQA will rely to a large part on the fees that will come from local authorities. I can say that local authorities have an interest that will require to be properly represented on the SQA. I also assure the Committee that my right honourable friend the Secretary of State for Scotland intends to consult a wide range of interests before making any appointments to the SQA. There is no way that consultations with CoSLA could not represent a large and important part of the consultation process. There will therefore be very substantial opportunities for CoSLA to make its views known in the consultation process.
I hope that this will allay any concerns that your Lordships may have about the representative nature of the SQA membership and, with the assurances that I have given about the certainty with which the local authorities will be represented on the SQA and the certainty with which the consultations will include CoSLA, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Ewing of Kirkford: Before agreeing to withdraw the amendment, I wish to make two points. First of all, so far as the Minister has gone, to a small degree there are encouraging signs in the sense that we have been given a guarantee of consultation. Consultation is one thing but it is a completely different thing altogether to accept the outcome of that consultation when making the appointments. Perhaps before these amendments are withdrawn I may ask the Minister where the Knox Committee fits into all of this. While consultations with CoSLA will go ahead, is it the case that any nominations that come from the education authorities or from CoSLA itself must first go for vetting to the Knox Committee? If that is the case I would have thought that the consultation itself is fairly meaningless. I hope that once the Minister has taken advice, he will be able to clarify the point that I am making. This is such an important issue that I do not want to withdraw the amendment now because I want to hear the Minister's response to the two questions that I have asked. However, I can give an assurance that we shall want to return to the matter at the Report stage.
The Earl of Lindsay: I can certainly answer one of the noble Lord's questions. The Knox Committee will be a significant feature of the consultations that take place as regards the Secretary of State making appointments to the SQA. I should be grateful if the noble Lord would remind me of the second question.
Lord Ewing of Kirkford: I was paying such close attention to the advice that he was receiving that I cannot remember it myself. I said that the first question about consultation was one thing and asked whether the Secretary of State would accept the advice that flowed from that consultation and appoint the people.

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For example, in the consultation with CoSLA is the Secretary of State reserving the right to refuse to accept the advice that flows from that consultation?
The Earl of Lindsay: It would be very fair to say that the consultation, which currently takes place before the appointment of the members of a number of bodies in the public sector, is not merely a cosmetic exercise after which the Secretary of State ignores all the advice that he has been given. So the consultation that would take place prior to appointments to the SQA would, I would suggest, be significant in the final composition of the SQA. I cannot think of any appointments made following consultation where the consultation has not played a formative part in the final composition of whatever body it is.
Lord Ewing of Kirkford: I am grateful to the Minister for responding to these questions and I reserve the right to return to this matter on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Clause 1 agreed to.
Clause 2 agreed to.
Clause 3 [Accreditation function]:
Baroness Carnegy of Lour Baroness Carnegy of Lour moved Amendment No. 3:
Page 2, line 37, after ("qualifications") insert (", including Scottish Vocational Qualifications,")
The noble Baroness said: On behalf of my noble friend Lord Stockton, I beg to move Amendment No. 3 and with the Committee's agreement to speak to Amendments Nos. 4 and 16. My noble friend apologises as he is unavoidably prevented from being in the Committee today. He put down these later amendments after discussion with City and Guilds. I, too, had earlier discussions with them but I have not been able to get in touch with them for further briefing today. I only knew last night that my noble friend would not be able to move the amendments. My noble friend suggests that I move them briefly. If he feels it is necessary, in view of the Minister's reply today, he will press the matter further at Report stage.
The grouping is somewhat strange. I was not able to have it rearranged this morning because there was a great deal of grouping going on in relation to the other Bill which is being dealt with in the House.
My understanding is that City and Guilds' main anxiety continues to be their fear that the new Scottish qualifications authority, and notably its accreditation committee, will not give them fair treatment when application is made for City and Guilds qualifications to be accredited for use in Scotland. They also continue to query whether the Bill is worded so as to disfavour or even exclude them. Amendments Nos. 3, 4 and 16 seek to improve the wording in that respect.
When the Select Committee took evidence, City and Guilds chose not to submit written or oral evidence, but they wrote to the Minister beforehand. I took the
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opportunity, nevertheless, to put their anxiety to the Minister for Education in Scotland, Mr Raymond Robertson, when he came before the Select Committee. The Committee will see the record of the exchanges at paragraphs 8 to 11 of the report. My honourable friend the Minister gave a number of assurances. He told the Select Committee that he would be having a meeting with City and Guilds. I do not know whether that has happened yet. He told them that the new authority would operate in the same way as SCOTVEC, that the accreditation committee would act independently of the rest of the functions of the SQA, that no staff of the new authority would sit on the accreditation committee, and that, should the Secretary of State perceive what he described as "nobbling" of the committee by the authority, the authority would tell it to back off.
The Minister also pointed out that 108 other accrediting bodies were dealing with SCOTVEC at the moment. They were happy with the arrangements and, he presumed, would be happy with the new arrangements which were the same. Those were good assurances, but I do not know whether City and Guilds have completely accepted them.
The way the present system operates was explained by the chief executive of SCOTVEC in evidence to the Select Committee. This is clearly an important matter to City and Guilds. My noble friend the Minister may have more to say now in response to these amendments than he had before, and I shall listen with interest to what he has to say. What I have said also applies to one or two of the following amendments. However, I have not regrouped them because I thought that to do so at the last moment would be unfair to Members of the Committee and to the Minister. It is quite difficult to divide them so I have spoken to subsequent amendments as well. I beg to move.
4 p.m.
Lord Ewing of Kirkford: When the Minister replies to the amendment moved by the noble Baroness, it will be important to put on the record the purpose of the accreditation committee. The accreditation committee will be established in order to accredit the qualifications awarded by the Scottish qualifications authority. These need not be employees of the Scottish qualifications authority, but they will be appointed in order to accredit the qualifications awarded by the Scottish qualifications authority. Against that background I can certainly fully understand the concerns of the City and Guilds and of the other professional and non-professional vocational organisations which are worried that the accreditation committee may not take into account the views of those various professional and vocational bodies in accrediting the qualifications to be awarded by the authority.
As the noble Baroness said, this is a serious matter in terms of the qualifications that will be awarded. It is a new start and it is right that we do our best to try to get this in context and to get it right as the accreditation

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committee will play a very important and crucial role in the whole question of the qualifications that are to be awarded.
The Earl of Lindsay: I am grateful to my noble friend Lady Carnegy for moving the amendment in the name of my noble friend Lord Stockton and I am grateful to the noble Lord, Lord Ewing, for his remarks. I very much hope that I can give assurances on all the points raised by my noble friend. Like my noble friend Lady Carnegy, I shall deal also with the points raised in Amendments Nos. 5, 6, 7 and 8.
Clause 3 provides for the process by which SQA will give approval to qualifications which meet certain criteria. SQA will have to publish these criteria. In the case of SVQs these will take account of a number of factors, including the national occupational standards set by industry lead bodies; standards of design, assessment and quality assurance; and current national policy.
This process will secure the delivery of a consistent national framework of high quality qualifications without the administrative constraints of individual decisions by Ministers. SQA will, however, operate with general and specific policy guidance and will be subject to a statutory power of direction by the Secretary of State. It will also have a duty to have regard to the interests of persons using its services. Within this framework, SQA will have discretion to exercise the functions conferred on it by statute.
There is, therefore, no need for the Secretary of State to approve the accreditation criteria. There is also no need for particular qualifications to be specified on the face of the Bill. This was considered during the drafting of the Bill and was rejected as being too inflexible for primary legislation since the names and details of qualifications are subject to change over time. I can, however, assure noble Lords that the SQA will accredit SVQs as SCOTVEC currently does.
The provisions in Clause 21 are important to the functioning of the Bill and it may be helpful if I spend a few moments explaining the purpose of the particular drafting adopted. At various points in the Bill reference is made to SQA qualifications. Clearly we need to understand what this means. Clause 21 defines the term as qualifications devised or awarded by SQA. This means that, for instance, SQA has the power to determine the entitlement of a candidate to an award of Higher English or to review and develop what is at present a SCOTVEC HNC. There are of course many other examples.
The only purpose of using that term is to avoid having to say, on each occasion,
"a qualification devised or awarded by SQA".
There is also a different group of qualifications where the SQA will have a role—qualifications accredited by SQA. In some cases these will also be SQA qualifications; that is, devised or awarded by SQA. In others they will be qualifications devised and awarded by other bodies. In the latter case the SQA's role is limited to accreditation and it is not appropriate for all the other functions of the SQA to be brought to bear on these awards.
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That is the function of the current wording—clear separation between types of function. I would draw noble Lords' attention to Clause 3 dealing with accreditation. Nowhere in this clause is the term "SQA qualification" used. This is not an accident. It is carefully drafted to achieve the purpose of drawing a necessary distinction between types of function. I recognise that the full import of the definition may have been misinterpreted as being prejudicial to other bodies and my noble friend Lady Carnegy in introducing these amendments suggested that there may be some sort of prejudice. I can assure the Committee that that is not the case. The current drafting reflects the needs of other awarding bodies and in fact the amendment would give the SQA extensive powers over other awarding bodies and their qualifications. I assume that is not the intention either of my noble friend Lady Carnegy or my noble friend Lord Stockton.
Moving on to the grouped amendments, Amendments Nos. 5, 6, 7 and 8, I should like to make it clear that there is no intention to change the existing order.
Baroness Carnegy of Lour: I stuck to the grouping.
The Earl of Lindsay: I am happy for other noble Lords to comment on the second group of, amendments but I was responding to my noble friend Lady Carnegy who had spoken to those amendments when moving Amendment No. 3.
Lord Ewing of Kirkford: I understood that we were discussing the group made up of Amendments Nos. 3, 4 and 16 and that we would come in time to Amendments Nos. 5, 6, 7 and 8.
The Earl of Lindsay: I think I have covered the points raised on Amendments Nos. 3, 4 and 16 and therefore hope that my noble friend will withdraw her amendment.
Baroness Carnegy of Lour: I thank the noble Lord, Lord Ewing, and my noble friend the Minister for their comments on these amendments. The noble Lord, Lord Ewing, emphasised the importance of the accreditation committee. I could not agree with him more. I am not sure that I would go along with the conclusions he was drawing from that, but it is indeed a very important committee.
My noble friend the Minister has clarified considerably what his honourable friend the Minister for Education said to the Select Committee. It is slightly complicated to understand the various references to the qualifications in the different parts of the Bill. I shall read with interest what he said and so I am sure will my noble friend, the City and Guilds people and probably members of other bodies who have an interest in this matter. I thank him very much for that and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Baroness Carnegy of Lour Baroness Carnegy of Lour moved Amendment No. 5:
Page 3, line 4, leave out ("a") and insert ("an independent")
The noble Baroness said: On behalf of my noble friend Lord Stockton, I beg to move Amendment No. 5 and I shall speak to Amendments Nos. 6 and 7 also in his name. I shall not speak to Amendment No. 8 until I hear what the noble Lord, Lord Ewing, has to say. I might wish to comment after he has spoken.
Amendment No. 5 suggests that the committee carrying out the accreditation function on behalf of the SQA should be defined on the face of the Bill as an independent committee. That underlines the feelings of the City and Guilds about what the role of the committee should be.
Amendment No. 6 suggests that the committee should be appointed not by the SQA but by the Secretary of State. I believe that the wording of Amendment No. 6 is slightly contradictory to that of Amendment No. 5, but the Committee will understand the spirit of what is intended in my noble friend's amendments.
Amendment No. 7 suggests that members of the accreditation committee should be neither employees nor members of the Scottish qualifications authority: the members of that authority should not be involved in the accreditation committee at all. The amendments are all aimed at securing the total independence of the accreditation committee from the SQA.
Amendment No. 8 suggests something rather different and we await to hear what the noble Lord, Lord Ewing, has to say about that. I beg to move.
Lord Ewing of Kirkford: Perhaps I may apologise for misleading the Committee when I said in my earlier intervention that members of the accreditation committee need not necessarily be employees of the Scottish qualifications authority. In fact, Amendment No. 8 seeks to ensure that they need not be employees of the Scottish qualifications authority.
Before I say a few more words about the amendment perhaps I may say that as one who listens and learns all the time, I have learnt today that if one tables amendments to a Bill but cannot be present, one should get the most loyal government supporter to move those amendments in one's absence. While I have a high regard and great liking for the noble Baroness, perhaps I may say, in great kindness, that every time she rises to speak she reminds me of those wonderful Gilbertian words from Gilbert and Sullivan's "Iolanthe", "I've always voted at my party's call and never thought of thinking for myself at all!". The Government are fortunate indeed to have such a loyal supporter as the noble Baroness, Lady Carnegy.
Amendment No. 8 seeks to insert in the Bill a provision that the members of the accreditation committee will be drawn from,
"the interests of, training providers, industry and commerce",
in order that their interests are represented, and it takes on board in legislative form many of the points that the noble Baroness is making on behalf of the noble Earl, Lord Stockton. If this were inserted in the Bill there would be no grounds for doubt in future about the
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interests—not the individuals as my noble friend Lord Sewel said earlier on, we are not talking about the individuals who should be appointed—required to be represented for the accreditation committee to operate properly. Amendment No. 8 seeks to ensure that these interest groups are included in the accreditation committee itself and that they need not be employees or members of the Scottish qualifications authority.
4.15 p.m.
The Earl of Lindsay: I should like to say to the noble Lord, Lord Ewing, that when I was contacted yesterday by my noble friend Lord Stockton, who had a very unforeseen difficulty that prevented him from coming here, I suggested that, rather than leave these important issues unaired at Committee stage to be aired for the first time at Report stage, perhaps my noble friend, Lady Carnegy, given her experience and background in education, would be able to do a very competent job of moving them and raising the issues. I believe my noble friend Lady Carnegy has done a very competent job.
The description or the Gilbertian terminology of being a loyal supporter would bring joy to the Chief Whip of my party because my noble friend is certainly not an uncritical supporter. She does not agree with everything and makes her views very well known to us with determination in such instances. I pay credit to my noble friend Lady Carnegy for the extent to which she has been able to articulate these issues.
I would like to make it clear that there is no intention to change the existing arrangements whereby awarding bodies in addition to SCOTVEC and SEB offer qualifications in Scotland. On establishment of SQA these arrangements, which apply to a wide range of qualifications, will continue to operate as at present. I am conscious that there are particular concerns about the position of SVQs. SVQs form part of a national framework of vocational qualifications. SCOTVEC acts as the accreditation body for SVQs on behalf of the Government to ensure that they are based on national occupational standards and other quality assurance criteria and that they have mutual recognition with the NVQs which are available south of the border. Other awarding bodies have agreements with SCOTVEC to award SVQs. These agreements will transfer automatically to SQA on passage of the Bill. Consequently, these awarding bodies will continue to be able to be involved in the SVQ market as they are at present. It will also be open for other awarding bodies to offer SVQs provided that the accreditation criteria are met.
Clause 3 puts on to a statutory basis a structure which is presently in operation in SCOTVEC for the accreditation of vocational qualifications put forward by awarding bodies. It is designed to create a clear separation between the accrediting and awarding sides of the body. It has worked well in practice and over 100 bodies have had their qualifications accredited by SCOTVEC. I recognise that there has been some concern that the Bill does not contain provisions to define the procedures for the appointment of members of the accreditation committee. However, the clause makes strict provision about the composition of the

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membership of the accreditation committee to give it a full measure of independence from the ordinary decision-making structure of the body. It provides that the majority of members of the accreditation committee must not be members or employees of SQA. It also provides that a quorum at a meeting of the accreditation committee can be established only where the majority of members present are neither members nor employees of SQA. It is also intended that this separation should he carried through to the administrative support provided to the committee. For this, and all functions of SQA, there are strict rules about conflict of interest.
Turning to Amendment No. 7, the Secretary of State does not intend that officers of SQA should be members of the committee. However, it is likely that some board members, particularly those with a background in industry and other relevant areas, will have the right sort of experience and knowledge to make a substantial contribution to the accreditation committee.
I would anticipate that many members of the committee would be drawn from the groups mentioned in Amendment No. 8 which was spoken to by the noble Lord, Lord Ewing. However, restricting membership of the committee to only those groups would limit the possible candidates for membership and would exclude other important interests such as education.
With regard to Amendment No. 6, the Secretary of State has an interest in how SQA selects nominees for appointment to the accreditation committee. SQA will have guidance on this from the Secretary of State and he may, if he chooses, make a statutory direction either generally or specifically on SQA's discharge of this function. I do not feel therefore that it will be necessary for the Secretary of State to appoint the members of the accreditation committee or for specific provision to be made on the face of the Bill as to the categories that members should be appointed from.
Turning to Amendment No. 5, the internal structure of SQA will ensure that the accrediting and awarding functions are clearly separated. Most importantly, the modus operandi of the committee must be acceptable to the Secretary of State. The procedure of the accreditation committee and SQA's relationship with it will be subject to administrative guidance and to the Secretary of State's direction-making power.
To put this beyond doubt, the Government intend to seek provision for the Bill to state that the Secretary of State's direction-making powers extend to the activities of the accreditation committee. I understand the fears that have been voiced about this part of the Bill, but we are completely confident that we can give the necessary assurances to render those fears groundless. On that basis, I very much hope that my noble friend will be able to withdraw her Amendment No. 5.
Baroness Carnegy of Lour: I thank my noble friend again for what seem to be fairly clear reassurances to City and Guilds in so far as Amendments Nos. 5, 6 and 7 are concerned. As to my motivation in moving amendments on behalf of my noble friend, that was brought about entirely by my concern that City and Guilds' anxieties should be not only recorded but responded to because they were genuine anxieties. They
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have had copious reassurance now and a very clear description: it will be for my noble friend Lord Stockton to talk to them, as I shall too, to see whether they are now happy about the Bill.
I would just say to the noble Lord, Lord Ewing, that I believe the Chief Whip on occasions regards me as public nuisance No. 1, and that is saying something in the party which I have the honour to support. As for the noble Lord, Lord Ewing's comments on his amendment, we have heard what my noble friend said about the difficulties of restricting the membership of the accreditation committee. So with those few remarks, I beg leave to withdraw Amendment No. 5.
Amendment, by leave, withdrawn.
[Amendments Nos. 6, 7 and 8 not moved.]
Clause 3 agreed to.
Clause 4 [Quality assurance]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 9:
Page 3, line 19, after ("procedures") insert ("particularly as they affect students with special educational needs").
The noble Lord said: First, I agree with my noble friend Lord Ewing of Kirkford when he suggested that, while accepting the Minister's worthiness and sincerity, there is a vagueness in most of the Bill as regards appointments and reassurances, and although I would accept reassurances from the Minister, he might not be there all that long. I do not know how long he may be there, but the passage of the Bill or the Act may take six months. There is a feeling that reassurances are given, perhaps with sincerity but a little lightly by the Minister in terms of appointments. That is why this amendment does not seem terribly important on the surface, but in fact to a group or a community it is vitally important.
The amendment seeks to guarantee that the interests of students with special educational needs, as defined in the Education (Scotland) Act 1980, are protected, and that the quality assurance procedures will not inadvertently discriminate against them. There really should be a thrust in us all to make sure that people are not disadvantaged because of educational needs.
The current position in relation to students with special educational needs is that assistance is available with internal assessment, scripting invigilation etc. and if the quality procedures are driven exclusively by the Scottish qualifications authority, there could be a danger—I am not saying there will be—that the needs of these students may be marginalised. The amendment seeks to ensure that these students' interests are protected by making arrangements for the quality assurance prescriptive to be put on the face of the Bill. I am sure the Minister will agree with the sentiments, but I hope he will also agree with the letter of what the amendment is trying to do. If the words are not quite suitable, I am sure that he will find words that will do the same job. However, I hope he will give us an absolute assurance that he will provide something on the face of the Bill. I beg to move.
Lord Addington: This is a very short amendment, but it is very important. One very simple reason for

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tabling it is that when we deal with special educational needs, we encounter a multiplex of problems, which is virtually never-ending and is growing, because we are getting better educational establishments which are bringing far more people, who have been sidelined in the past, into the educational structure.
If we talk about quality assurance this becomes even more important for the simple reason that people often take courses and exams in non-conventional ways. I shall talk very briefly about one that I know and that is dyslexics who, for instance, dictate exams. There have been arguments, and long-running arguments, about whether this appears on the examination certificate. That has scared far more people who are taking the exams than it has done employers, because employers are not that worried as long as they know the person has the knowledge and skills. There have been cases where this has bothered them. This is just one example of what could be going on. Unless quality and provision are tied in together, we are potentially storing-up problems. If these two are worked in together in the structure of the Bill, we will prevent this happening and prevent a great deal of anxiety apart from anything else.
Apart from the practical considerations of running it, you will be dealing with a perceived and possibly imagined problem. I hope the Minister will take this into account when he replies for the simple reason that he will forestall a great deal of trouble and put people's minds at rest by merely saying that these have to be taken into account on the face of the Bill. It is not much to ask and it could potentially solve many problems.
The Earl of Lindsay: I am very sympathetic to the sentiment behind the amendment of the noble Lord, Lord Carmichael, which was spoken to by the noble Lord, Lord Addington. Indeed, there is nothing we disagree with in the objectives that the noble Lords are speaking towards. However, I believe that the objectives about which the noble Lords are worried are very well covered in other clauses of the Bill.
Both SEB and SCOTVEC have a very strong track record in this area. Very comprehensive arrangements are made to ensure that students with special educational needs have the opportunity to gain full access to qualifications. The Secretary of State will expect SQA to maintain this standard of provision.
In addition, the Bill makes explicit provision in Clause 7 that SQA shall have regard to the interests of persons using its services. That includes all persons and all types of persons. All students, including those with special educational needs, are covered by this.
There is, therefore, no need to provide expressly for the needs of students with special educational needs in relation to quality assurance. I should also point out to the Committee that the Higher Still development programme, with its widely praised provision for special educational needs, demonstrates conclusively that there is no necessary conflict between high and rising standards and making appropriate provision for the assessment of students with special educational needs.
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In addition to Clause 7, I would also draw attention to Clause 2(1)(e). SQA will make appropriate provision for special educational needs under the subsection which deals with the arrangements for assessment of students undergoing education and training.
The combination of the general provision and duty imposed in Clause 7 and the specific detail of Clause 2(1)(e) certainly covers the general points made by the noble Lord, Lord Carmichael, and the specific example raised by the noble Lord, Lord Addington.
Clause 4(b), which is where the amendment is placed, allows SQA to supervise the internal arrangements by which education and training establishments contribute to consistency in standards. This seeks to ensure that consistent standards are applied between institutions and classes of institution. In addition to directing the Committee's attention to Clause 7 and Clause 2(1)(e), I would stress that Clause 4(b) is aimed in a direction different from that which the noble Lords speaking to the amendment have perhaps understood.
The important point is that I can certainly give the assurances that noble Lords need and I can point to the fact of the Bill in giving them. The noble Lord, Lord Carmichael of Kelvingrove, was perhaps worried that assurances given by a Minister today may not count for much at a later date, either because the Minister has gone or because time has elapsed. I am speaking in and on the public record, so even in the unlikely event of Ministers having to change, the public record remains.
4.30 p.m.
Lord Ewing of Kirkford: Before my noble friend Lord Carmichael responds to the Minister, will the Minister answer a technical question? The rights of students with special educational needs are clearly defined in Section 1(5)(c) of the Education (Scotland) Act 1980. In the repeal schedule of the Bill presently before the Committee there is no reference whatever to that section of the 1980 Act being repealed. What takes precedence? Section 1 of the Education (Scotland) Act 1980 is not being repealed by this legislation. Is that still the position in relation to students with special educational needs, even after the present Bill is on the statute book? That point must be cleared up.
The Earl of Lindsay: The best solution may be for me to write to the noble Lord on this specific point.
Lord Ewing of Kirkford: Yes, provided that the noble Earl the Minister does not write to me to tell me that he now proposes to introduce an amendment to repeal that section of the 1980 Act. It will be all right for him to write to me to tell me that Section 1 of the 1980 Act, defining the rights of students with special educational needs, still prevails.
Lord Carmichael of Kelvingrove: I do not know whether the Minister, nodding in apparent agreement in dumb language that he will not be repealing the Act, is an assurance or not. It gets back to the whole question of things not being on the face of the Bill. He also said that it is now on the public record. The Minister must know from his experience here that it is always easy and

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possible for a later government, maybe 10 or 15 years from now, to redefine something and find reasons for not accepting the words that the Minister has used.
The point made by my noble friend Lord Ewing of Kirkford needs answering and we cannot do much with the amendment until we have a written assurance from the Minister.
The Earl of Lindsay: I can give the noble Lord, Lord Ewing, the assurance he needs right now: Section 1 of the 1980 Act is not affected by the Bill.
Lord Carmichael of Kelvingrove: We will look at it closely and see the effects. However, with that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Carnegy of Lour Baroness Carnegy of Lour moved Amendment No. 10:
Leave out Clause 4 and insert the following Clause—
QUALITY ASSURANCE
("In respect of bodies awarding qualifications accredited by SQA, SQA may, in its role as accrediting body and with the approval of the Accreditation Committee, make such arrangements as are considered necessary to be satisfied with—

(a) the quality of procedures used by awarding bodies;

(b) the quality of the internal arrangements used by awarding bodies for monitoring and controlling the effectiveness of such procedures.").

The noble Baroness said: On behalf of my noble friend Lord Stockton I beg to move Amendment No. 10. Clause 4, as my noble friend stated in relation to the last amendment, deals with quality assurance. The amendment redrafts Clause 4 to make clearer the procedures governing bodies other than the Scottish qualifications authority which seek accreditation of their awards. That clarification is felt to be necessary. I shall be interested to hear what my noble friend has to say.
The Earl of Lindsay: I hope I can give the necessary clarification to my noble friend. The Government are committed to securing consistently high standards in education. We shall expect a similar commitment from the SQA to build on the undoubted success of the existing bodies. The amendment would remove the power of the SQA to monitor the quality of assessment procedures of presenting centres offering SQA qualifications. This is an absolutely vital function of an awarding body.
The amendment replaces Clause 4 only with a power to monitor the procedures of awarding bodies whose qualifications have been accredited by SQA. This would be a considerable restriction on the exercise of SQA's powers. Monitoring in relation to accreditation is in any case inherent in that process. The requirements in this regard will be published under Clause 3(1). It is therefore unnecessary to include provision as proposed in the amendment.
As the objective of the amendment is already met in Clause 3, and as the text which the amendment seeks to remove is of such great importance, I hope that my
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noble friend will be able to withdraw the amendment and that my noble friend Lord Stockton, on reading Hansard, will feel considerably reassured.
Baroness Carnegy of Lour: I thank my noble friend for that reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 agreed to.
Clause 6 [Incidental Functions]:
Lord Sewel Lord Sewel moved Amendment No. 11:
Page 3, line 34, at end insert ("with the agreement of such local authority associations as exist")
The noble Lord said: The purpose of the amendment is to put the local authorities, through their associations, in a position where they play a key role in the consideration of the financial estimates of the Scottish qualifications authority. The question may be asked: why? The answer is simple. They are the major paymasters. It boils down to that.
The present estimate is that 70 per cent. of the income of the Scottish qualifications authority is likely to be contributed by the local authorities. If that is the case, it seems only reasonable that those who pay the bill should at least have some involvement in the construction of the financial estimates of the body they are, perforce, paying for. As I understand it, the current situation is that the Scottish Examination Board has a statutory duty and is required to agree the level of its fees in consultation with CoSLA, and this seeks in a form to take that relationship on to the new authority.
There is a danger that if a body such as this does not have some check on it by the people from whom it is seeking its income it runs into at least some temptation of taking on a slightly irresponsible life of its own. There needs to be this kind of check or, if not, some kind of combination of power without responsibility. We all know of the description as regards taxation without representation and we would wish to avoid that as well.
I hope the Minister can give some assurance that the paymasters will be involved in some form in seeking the agreement—certainly stronger than consultation—when the authority draws up its financial estimates.
Baroness Carnegy of Lour: I expressed some sympathy earlier for the position of CoSLA in the authority, and this is the part where its interest is greatest. CoSLA has been kind enough to write to me and has reminded me that as regards the Scottish Examination Board the local authority funding is 92 per cent. of the whole, whereas as regards the SCOTVEC it is 50 per cent. and in future, as the noble Lord said, it is likely to be 70 per cent. It certainly is a problem for local authorities in that if fees get completely out of hand they will not be able to afford them, so they have an interest in at least commenting on what is proposed. Their interest and that of the new authority cannot be separated and I hope that my noble friend will have something nice to say about that.
The Earl of Lindsay: Of course I have something nice to say about all the concerns raised by other noble Lords on this Bill. I am grateful to the noble Lord, Lord Sewel, for explaining this amendment to us. We recognise that the users of the SQA services have an important interest in the policies to be adopted by the SQA and not least among those policies will be the level of fees. We also recognise that the local authorities are likely to be the predominant source of the SQA income, as was pointed out by both the noble Lord, Lord Sewel, and my noble friend Lady Carnegy. However, we are not persuaded that it would be fair or even democratic to the other users of the SQA services that one group of purchasers should have the type of special financial control that is being proposed in this amendment, even if at present they collectively provide a high level of SQA's income.
Clause 6 provides for the Secretary of State to determine criteria in the setting of charges by the SQA. Those criteria would seek to recognise the interests of all the SQA customers. In addition, Clause 7 requires the SQA to have regard to the interests of those using its services. This provision will also require the SQA to take into account the financial interests of local authorities.
The Government intend that the procedures by which the SQA sets its fees should be known to its customers and that the stages should incorporate consultation. The noble Lord, Lord Sewel, asked for at least some involvement by local authorities and they will have that involvement through the consultation on the stages and the procedures through which SQA goes in setting its fees.
Common sense dictates that the leverage which consultation with the principal customer will offer to that principal customer will guide the SQA in the decisions which it reaches. So I can assure both my noble friend and the noble Lord that the just interests of local authorities in the setting of fees are bound to be reflected both in the consultation process and indeed through Clauses 6 and 7. On that basis, I hope the noble Lord feels able to withdraw his amendment.
Lord Sewel: I thank the noble Minister for his comments. I would hope to nudge him a little further at some stage, but I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Regard to certain considerations]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 12:
Page 4, line 38, at end insert—
("and shall consult such persons mentioned in paragraph (b) on the exercise of its general functions under section 2 of this Act and the function of accrediting qualifications under section 3 of this Act").
The noble Lord said: The Minister may be slightly tired of hearing this kind of argument and he may describe it as a niggly amendment. However, I am afraid that I do not quite see it that way. It is too often the case that a body is meant to have regard to the fact that,
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when we are dealing with education, technology and the modern world, things are changing rather rapidly. The amendment that is down in my name proposes that such a body shall consult, not just try to double guess, what the users of the service will want. It should consult the users of the service before it makes an important decision. This seems to be a fairly simple proposition. I know the Minister will be able to say that it will be in touch all the time, but I would like it specifically detailed that it has at some point to discuss and find out what the users of the services really require at any particular period. I beg to move.
4.45 p.m.
The Earl of Lindsay: I can stress to the noble Lord, Lord Carmichael, that it is intended that the SQA should be responsive to the interests and needs of its customers and indeed many of the assurances given in Committee to date have underlined this point. Both SEB and SCOTVEC in practice consult widely at present in relation to the exercise of their functions and we will expect SQA to build on this firm foundation.
The possibility of achieving such responsiveness by requiring SQA to consult its customers was considered during the drafting of the Bill. Therefore we do not have a quarrel with the principle behind the amendment. It became apparent, however, that this would be impractical. It would be extremely difficult to be certain that such a requirement had been properly fulfilled given the very wide range of customers and the difficulty in identifying interests in relation to the different powers of SQA. It would also place a large and inflexible burden on SQA in managing its day-to-day affairs.
It is considered appropriate, however, for there to be some requirements in the Bill to show that the interests of customers should be a significant consideration. I consider therefore that the present wording of Clause 7(b), which provides that in the exercise of its functions SQA shall,
"(b) have regard to the interests of persons using its services".
is sufficient for this purpose. It delivers the assurances that the noble Lord seeks, but without doing so in an impractical manner. The duties span the whole range of the SQA's functions under the Bill or under any other enactment. This is a wide ranging duty but expressed in a flexible way. It will be for the SQA itself to determine how to meet the duty in a particular case though it would have to have regard to any advice which the Secretary of State might give on this question. In many cases this might mean that SQA will consult.
I hope with those assurances the noble Lord will feel able to withdraw his amendment.
Lord Carmichael of Kelvingrove: I did not realise that there were flaws in the amendment in that the width of consultation could be endless and the protests of those who were not consulted could cause a great deal of trouble. On this occasion, I have to take the point of view that the Minister's best wishes will be the ones that will be put forward and will be acceptable to all the bodies. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clauses 8 to 17 agreed to.
Clause 18 [Transfer of staff to SQA]:
The Earl of Lindsay The Earl of Lindsay moved Amendment No. 13:
Page 8, line 14, leave out ("Subject to subsection (3) below,").
The noble Earl said: This is a drafting point. The words to be deleted are redundant. I beg to move.
On Question, amendment agreed to.
Clause 18, as amended, agreed to.
Clause 19 [Dissolution of the Scottish Examination Board and of the Scottish Vocational Education Council]:
Lord Ewing of Kirkford Lord Ewing of Kirkford moved Amendment No. 14:
Page 9, line 9, leave out subsection (3).
The noble Lord said: This amendment seeks to introduce a termination date for the Scottish Examination Board and SCOTVEC in order that the local authorities will have a clear indication at an early stage and in order also to co-ordinate the introduction of the Government's own Higher Still proposals.
The Bill proposes that the termination date will be indicated by Parliamentary Order. It seems to me that the Bill is destined for the overspill period in October and November of this year. It has not yet been to another place. It will take some considerable time. I certainly do not anticipate the return of the Bill to your Lordships' House before the Summer Recess. We shall be into October of this year and local authorities will still have no indication of when the termination date will be. Once the Parliamentary Order has been laid it will have to lie for 40 days. We are running up against a very tight timetable.
To be helpful to the Government and to break the habit of a lifetime, I would suggest that it would be in the Government's best interests, if they are not happy with our amendment, to introduce an amendment themselves that would include in the legislation the termination date for the Scottish Examination Board and SCOTVEC; otherwise the Government could, in terms of timetable, be in very serious trouble indeed.
Breaking the habits of a lifetime, I move this amendment in order to be helpful to the Government on the one hand and to the Scottish local authorities on the other. I beg to move.
Baroness Carnegy of Lour: There is a considerable point here. The Bill itself provides that various parts of it will come into force on such a date as the Secretary of State may by order appoint, and different dates may be so appointed to different provisions for different purposes. Probably Members of the Committee understand that when they look at the Bill as a whole. It also provides that there may be transitional arrangements. At the same time, a great many people are involved in the implementation of power and in the various qualifications which are catered for by the new body. I refer not only to the local authorities, although it is natural that they are particularly concerned and have told us that.
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If the Minister does not accept the amendment, can he tell us how he will give notice to all those concerned when this particular part of the Bill comes into action in order that they can make the proper arrangements? If they have only short notice it will be very difficult indeed.
The Earl of Lindsay: I am grateful that the noble Lord, Lord Ewing, is trying to be helpful to the Government and I shall be helpful to the Committee in responding to this point. I will describe the process by which the SQA will be established and will take on its functions. The SQA will be established by order of the Secretary of State; it will then enter a transitional period during which it will get itself ready to take over the staff and property of the SEB and the SCOTVEC and to take on its substantive functions. During the transitional period the SEB and the SCOTVEC will continue to exercise their current functions.
When it is considered that the SQA is ready to take on its functions the Secretary of State will set the transfer date. On that date the staff, property and all other rights and obligations of the SEB and the SCOTVEC will be transferred to the SQA. Substantive functions will then be assumed from legislation. After the transfer date the two bodies will have more limited functions, winding themselves down ready for dissolution. That is the period for which Clause 19 provides. During that time the SEB and the SCOTVEC will prepare final accounts and reports. They may also be required to assist the SQA in the transfer of their property or rights to the new body.
The proposed Amendment No. 15 would require the SEB and the SCOTVEC to be dissolved on 1st April 1997. I understand that some users of the SEB and the SCOTVEC have indicated that it would assist their preparations if a date were specified in the Bill, as the noble Lord, Lord Ewing, has suggested. It is difficult to estimate at present how much time will be needed for the preparatory stages and for the completion of the winding-down stage. If the SQA were not in a position to take on its functions by the specified date of dissolution of the SEB and the SCOTVEC there would be no other body to carry out their duties. Even when the transfer date has arrived and the SQA is fully operational, the SEB and the SCOTVEC may not have carried out their final functions.
As the Bill stands, only once the Secretary of State is satisfied that nothing further remains to be done will a date be set for the dissolution of SEBs and SCOTVEC. The Bill gives the Secretary of State discretion as to the timing of the various stages that I have described. Such discretion is necessary to ensure that the transfer is as smooth as possible.
I should like to reassure my noble friend Lady Carnegy that there is no intention that anyone involved in such a process shall be caught by surprise through short notice being given. Due notice will be given so that a smooth transition can be achieved.

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I assure your Lordships that as much notice as possible of all these stages will be given to Parliament and to the public. On the basis of the background and assurances I have been able to give, I hope that the noble Lord will be able to withdraw his amendment.
Lord Ewing of Kirkford: On the basis of that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 15 not moved.]
Clause 19 agreed to.
Clause 20 agreed to.
Clause 21 [Interpretation of Part I]:
[Amendment No. 16 not moved.]
Clause 21 agreed to.
Clause 22 agreed to.
Clause 23 [Grants for education of children under school age]:
Lord Sewel Lord Sewel moved Amendment No. 17:
Page 11, line 16, at beginning insert—
("(A1) This section is subject to section 36(2A) below.")
The noble Lord said: In moving Amendment No. 17, perhaps I may speak also to Amendments Nos. 42 and 44. Amendment No. 44 is the key amendment. It is the anti-fraud amendment and as such will receive the support of the entire Committee.
The difficulty arises because this will be the first occasion on which a major universal service will be provided by means of a voucher scheme. I cannot think of a comparable major service that has been provided in this way. As such, we are in unchartered waters and one of the most dangerous unchartered waters relates to the financial provisions and particularly fraud. It is not difficult to imagine circumstances where unscrupulous providers could tempt or offer arrangements with people bearing the voucher (a voucher with a face value of£1,100, but not cashable for cash) which would be fraudulent. That is clearly unacceptable and undesirable.
When we were in Glasgow, I raised this point with Mr. Robertson and he quite genuinely took the point and indicated that the Government were in consultation with the National Audit Office. But even his words indicated that perhaps the National Audit Office was in consultation with the department. At the end of the discussion I asked Mr. Robertson, at paragraph 33 of the Select Committee report, whether we could,
"look forward to some statement perhaps from the National Audit Office to show that they are satisfied with the audit?"
The Minister replied "Yes". I thank him for his very clear "yes" on that point. The amendment therefore seeks to put in form the "yes" which the Minister gave then—that the scheme will not be implemented until the Comptroller and Auditor General certifies satisfaction with the financial provisions and particularly that he is satisfied on the score of fraud and the extent to which it can be minimised. I beg to move.
Baroness Carnegy of Lour: On the general point made by the noble Lord, Lord Sewel, in moving the amendment, this is the first time that a public service has been funded by means of vouchers. It is perhaps wide of the mark but it is interesting in this context that the Labour Party has recently put forward a proposal to withdraw benefits from 16 to 18 year-olds and use the money for the provision of education and training. That implies the use of vouchers. The noble Lord smiles broadly, looking at me as though I do not know what I am talking about, but it sounded to me as though the voucher scheme could have a place. The noble Lord can perhaps tell us whether that is a gleam in the Labour Party's eye. That is my only comment.
Lord Ewing of Kirkford: Having heard that contribution, Gordon Brown will extend training up to the age of 70.
5 p.m.
The Earl of Lindsay: Some of us need it! I am grateful that the noble Lord, Lord Sewel, has seen fit to raise the fundamental issues involved in Part II of the Bill. Indeed, Amendments Nos. 17, 42 and 44 seek to delay the coming into force of Part II of the Bill until 1 August 1998 with the extra pre-condition that the Comptroller and Auditor General, who is head of the National Audit Office, should be satisfied that the scheme has minimised the risk of fraud.
I appreciate the concerns of the noble Lord, Lord Sewel, about fraud, but I do not believe they constitute a reason for putting back the date when the voucher initiative is applied to the whole of Scotland. The recent Audit Commission report on pre-school education concluded that the voucher system will need powerful procedures to prevent fraud. The Government entirely accept that recommendation and will ensure that such powerful procedures are in place for the initiative's pilot year and beyond. The department will be discussing counter-fraud measures with its own internal auditors and with the National Audit Office as well as with the voucher management company.
Naturally, the details of the measures to be employed to counter fraud cannot be made public—they would be of little value if they were—but they are being put in place and will be rigorously monitored throughout the course of the pilot year. The Government will welcome the National Audit Office's involvement in developing payment, accounting, monitoring and reporting systems and the National Audit Office will be free to investigate the effectiveness of the system's anti-fraud mechanisms in practice.
The National Audit Office operates by advising on the development of systems and by examining their implementation. It is not for me to commit the Comptroller and Auditor General or his department to any particular form of statement at any particular time. I am confident that the National Audit Office, vigilant as it is, will look closely at the systems of the voucher initiative at the appropriate time.

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Preventing fraud, as your Lordships know, is one of any government's primary responsibilities. This Government take that responsibility very seriously across the sweep of their policies and in relation to the voucher system in particular.
The amendments do not make fraud any less likely to happen. They simply seek to delay the voucher system's extension to the whole of Scotland. On that basis I would urge the noble Lord to withdraw the amendment, especially as I have assured him that the Government place a very high priority on fraud prevention.
Lord Sewel: I thank the noble Earl for what he says. I am not quite sure whether he is giving me a guarantee that the scheme will not be implemented until the Comptroller and Auditor General is satisfied. If that were to be the case, of course, it would change my position significantly. At this stage I am prepared to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sewel Lord Sewel moved Amendment No. 18:
Page 11, line 16, at beginning insert—
("(A2) This section is subject to section 36(2B) below.").
The noble Lord said: I am afraid that the guts here are again in Amendment No. 45. This amendment proposes to delay the implementation of the scheme. Its origins lie entirely in the evidence that we heard in Glasgow. At that time the Minister set great store in the pilot year to iron out the difficulties and to evaluate the scheme robustly—and great credit to him for indicating that it would be a robust evaluation. I believe he said that there was everything to play for in light of the pilot and the evaluation.
When we questioned witnesses it is fair to say that the recurring theme of what they had to say—be they providers themselves or be they those involved in evaluation of education schemes like Professor McCall from Strathclyde—was that their concern was quite simply that if one sought to evaluate the pilot scheme it would be virtually impossible to put the pilot scheme in place, have it running, evaluate it and make modifications in light of the evaluation in time for the scheme to go national the following August.
The amendment seeks to give time for the Government to get the scheme right in their own eyes, to make sure that there can be a robust evaluation, that the pilot can be properly and comprehensively considered and for the scheme to be modified in the light of any difficulties and shortcomings that the evaluation shows up so that it can be properly implemented a year later.
In Glasgow, in relation to the evaluation of the scheme itself, a great deal depends on the specification of the evaluation study. For example, it is necessary to look at whether there is an increase in provision—there may or may not be an increase in provision as a result of this scheme. It is necessary to look at the actual price movement in the private sector as a result of the scheme. A powerful argument from the Scottish Consumer Council was that because the value of the voucher was not sufficient to cover capital expenditure, there may be
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no new players entering the market, and if that is the case the consequence is likely to he an increase in the price level rather than an increase in the number of places. So there are movements in the price level.
There has to be an assessment of the scheme in terms of geographical access. We have heard about the difficulties of the remote rural communities in the Highlands and Islands of Scotland. There is also the question of social access and whether in areas of relative social deprivation the scheme would increase access to nursery provision. We have heard about the way in which the scheme would add to the smooth transition from nursery education to primary education for the majority of children. The basic fundamental point is an assessment of the quality of the nursery education that is to be provided. It is a very complex evaluative scheme.
In Glasgow, the Minister indicated that he would make available to us the specification of the evaluation, and I hope that that can be made available shortly so that it can inform our discussions at a later stage. If that is the case, I am very grateful indeed.
By listing what are the basic areas that the evaluation of the scheme should cover, it shows that in fact it is more than a tall order to say that you can have the scheme in place, do the evaluation and implement from June to August, when in fact much of the test of the scheme will only be possible towards the end of the school year. Many of the aspects of the scheme can only properly be tested after it has been given a full year of running. That is the argument behind having that period of delay: it is to enable a full, proper evaluation and modification to take place. It is on that basis that I move the amendment.
Lord Addington: The idea of having some kind of trial period of this new voucher system is a very sound one, but it is totally meaningless if there is not a sufficiently vigorous test. The suggested two-year period was recommended by virtually everybody, and when we were in Glasgow everybody concerned said that two years was preferred and that one year was the bare minimum. The noble Lord has just moved the recommendation of the expert witnesses who said it was the only real time scale in which they could do the job properly. They, thought that with one full year they might possibly be able to get something out of it. The Government's time scale was thought by those people who knew what they were talking about to be too short. If this trial period is to mean anything, it must provide the information to create a judgment, and if it is too short and does not take account of the pressures of the educational year, then surely any trial period is totally meaningless. Thus, this amendment or something like it—some extension—is absolutely essential to making this process in any way valid.
Baroness Carnegy of Lour: It is pretty obvious that within two years, let alone one year, the longer-term benefits of a voucher scheme will be difficult to detect, because the effect on public attitude and on what parents see as the possibilities of nursery schooling will build up as time goes on and as people come to understand

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what the possibilities are for them of using their vouchers in various ways. However, the sheer mechanics of how the vouchers are issued, whether people are able to use them, whether the local authorities can deal properly with the funding in this way, and the immediate snags will become obvious in the shorter term. Whether one has one long pilot scheme or several fairly brief ones depends on what one is trying to get out of them. It seems to me there is merit in having a series of short, sharp pilot schemes which show their tactical problems.
The Scottish Consumer Council is anxious about what it describes as the lack of information about the details of the scheme. That was its worry, much of which will emerge as time goes on. It is worried about that and therefore it would like the pilot to reveal as much as possible about the nature of the scheme. However, to say that one year can be of no use and that two years would be much better is probably not completely relevant. I think that it will be a long time before we know how this scheme will develop so I am not sure how much merit there is in this particular suggestion.
Lord Sempill: While I agree with many of the sentiments that have been issued regarding some of the concerns, specifically those relating to fraud and the validity of the test, I wish to reaffirm a very strong observation which I had of our experience in Glasgow. It is that the whole concept is seriously flawed and certainly does not have the support of the people whom we interviewed. We wish to reaffirm that point.
5.15 p.m.
The Earl of Lindsay: I am grateful to Members of the Committee who raised issues in this area, starting with the noble Lord, Lord Sewel. My noble friend Lady Carnegy produced by far the most practical explanation of why a one-year pilot will be very effective and very successful. In addition to the points that my noble friend made about the practical problems which will be highlighted and can be solved, I believe that I can completely reassure the noble Lord, Lord Addington, and the noble Lord, Lord Sewel. The opposition of principle voiced by the noble Lord, Lord Sempill, was discussed at length on Second Reading. Therefore, while it is suitable to have this continued opposition on the record I shall not return to the Second Reading defences of why we believe in parent choice and greater diversity of nursery education.
We are anxious that the voucher initiative and the consequent expansion of pre-school education should be introduced in all parts of Scotland as soon as possible. The voucher system, as your Lordships will be aware, is to be piloted in areas within four new unitary authorities from August this year. The operation of the initiative in the pilot year will be closely studied by the Government, by the pilot authorities and, most importantly, by the independent researchers appointed for that purpose. The remit of the independent evaluators will be to study the system's operation in all its aspects and to report on their conclusions and
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I believe I am in a position to send the exact specifications of the remit to the noble Lord, Lord Sewel, as he requested.
I believe that some may have seen the remit of the operational evaluation of the pilot year and it is indeed very wide, broad and testing. So the categories and issues which the noble Lord, Lord Sewel, seeks to have scrutinised and evaluated will indeed be scrutinised and evaluated. The level of provision is absolutely essential. The impact of vouchers on the provider market; the volume, type and distribution of places; and indeed parental views will be sought by the evaluators.
Quality will be the job of Her Majesty's inspector. So that will be done in any event by that body. The Government set great store by this evaluation: we are intent that the voucher system should deliver the best possible results for its ultimate beneficiaries, namely children in their pre-school year. I stress to both the noble Lord, Lord Sewel, and to the noble Lord, Lord Addington, that the findings of the evaluation will he emerging over the course of the year. If, in the scenario the noble Lord, Lord Sewel, paints, the evaluation only starts at the end of the school year, data having been gathered over that school year, and is then rushed, with conclusions being sought before the start of the next year, I would agree with the noble Lord that one is working to a very tight time-frame. However, we are talking about ongoing evaluation and ongoing assessment. We intend to share the ongoing assessment and the ongoing evaluation with providers and consumer interests as we go along. We shall not be sitting on information as it emerges. It will be available for all those who are involved to discuss and to evaluate themselves. Any glitches in the operational systems will be put right as the pilot year proceeds. The conclusions of the evaluation will also influence how the voucher system is applied nationwide from August 1997. The central point, which I hope meets the valid concern of the noble Lord, Lord Sewel, is that the evaluation and the assessment are ongoing and therefore continuously arising and continuously open to discussion.
The Government are not careering ahead. We are moving steadily and with care to achieve the objective of expanding provision for the pre-fives. By August 1997 in Scotland, with the results of the pilot evaluation assimilated, we will be ready to extend the system nationwide. I see no justification for another year's delay in implementation. The only effect would be to deny another cohort of pre-school children the expanded pre-school provision from which they could benefit. We know they could benefit: that is why we are determined that the voucher system that we intend to implement through the pilot year and then nationwide is the right way forward in terms of increasing the diversity and the quantity of good pre-five nursery education. I hope that with the real assurance that I have been able to give to the noble Lord, Lord Sewel, about the actual process and timetable of evaluation, he will be able to withdraw his amendment.
Lord Sewel: I thank the Minister, particularly for his assurance that we can have the specification, which would be very helpful. I am afraid that I find difficulty

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in accepting his optimism that the pilot and the evaluation will be done, and satisfactorily done, in order for the scheme to be implemented on the present timetable. I have to tell the Minister that the Government will find it very difficult, if they are to stick to this timetable, to assure us that they are taking both the pilot and the evaluation seriously. That is a worry. However, at this stage, I beg leave td withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Addington Lord Addington moved Amendment No. 19:
Page 11, line 16, after ("may") insert—
("(a) make grants for the purpose of pre-school education to any parent of a child who—
(I) has not attained school age and
(ii) has not commenced attendance at a public primary school by virtue of Section 32 (4) to (7) of the 1980 Act,.
and who satisfies such conditions as he may by order prescribe; and
(b)").
The noble Lord said: Amendment No. 19 stands in the name of my noble friend Lord Mar and Kellie. It is a very straightforward amendment in that it removes the bureaucratic process envisaged by the Bill—that is, giving a voucher to parents who will then present the voucher to a local authority or a school or education provider which will then present it to the Government for the money. The amendment reverts to the simpler process of the local authority providing a service for all those children who are attending its schools currently—the status quo for all those who are happy with their present situation. Those who are outside the system at the moment, those who do not have places, will become part of the voucher scheme.
We are saying that those for whom there is satisfactory provision pre-age five now in place will carry on receiving this type of education. Those who find themselves outside would immediately go into the voucher system. It is a very straightforward system which tries to meet the Government halfway. It says that there will be freedom of choice for those who require it and that if people do not choose to enter the local authority schemes the voucher scheme will be there to provide for them in the private sector or elsewhere. I hope the Government see the proposal as fairly straightforward and not totally antagonistic towards them.
The second amendment in the name of my noble friend says that the scheme shall not come into being. However, the process we are going through now makes the amendment inappropriate, because it is an amendment on which one could have picked a fight and discussed matters, seen what was going on, and tested the opinion of the Committee on the scheme as a whole. I therefore grouped it to enable us to have the discussion here and then it could have been dispensed with when the time came. I thought it best that it should be discussed to let people know the sentiment behind it.
A substantive amendment, Amendment No. 19, allows freedom of choice but also enables the Scottish local authorities to carry on doing the very good job
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they are currently doing in large parts of Scotland. It adds an element of choice for those few who are not included. I beg to move.
The Earl of Lindsay: Amendment No. 19 is not antagonistic, but Amendment No. 22 is somewhat provocative. I shall deal with them separately.
Amendment No. 19 would extend the power to make grants under the Bill so that grants might be made to parents as well as to providers of education. The noble Lord, Lord Addington, assumes that we intend to give the power of choice to parents, and indeed so we do. If I hear him correctly, he argues that rather than giving vouchers to parents and using parents to determine what grants should be given to providers, it would he more straightforward to give grants directly to parents so that they could make payments to providers themselves. This is an attractive proposition, especially for those with five children, because the volume of grant to which one might be entitled with a large young family would be a significant boost to the household budget.
There is much to be said for enabling parents to purchase pre-school education directly, but the proposition has one fatal flaw which is that it will not stand the test of public accountability. It is not part of the Government's intention to ask Parliament to approve provisions giving additional resources to parents as parents. We are debating an Education Bill and it is the Government's purpose to further pre-school education.
Our proposals have been carefully worked out with proper safeguards for the public purse. They will not permit money that Parliament intends for good education provision to be spent on poor value provision or on simple childcare, or on the general demands of the household budget or the Christmas shopping list. The noble Lord's amendment is in danger of allowing all those things.
The advantage of paying grant to providers is that, with the aid of a simple, and cost-effective voucher system, it enables parents to have the same opportunities for choice as if they received the money directly themselves. Moreover, parents will not have to worry about the complex accountability requirements that might otherwise be needed. They will also have the guarantee they need that there is proper control over the quality of the education their child is receiving.
Amendment No. 22 seeks to prevent a voucher system for pre-school education being established at all, as the noble Lord, Lord Addington suggested. The principle of whether or not we should have vouchers for pre-school education has been debated at length both at Second Reading and briefly today. We believe that it is the best means of securing greater and more diversified provision of pre-school education. We believe that a place for every child in his or her pre-school year whose parents wish it will be provided over time with this system. The voucher initiative will not only facilitate the provision of more places but will also foster quality, diversity and choice.
We are making a substantial investment in this initiative and we are seeking to ensure the welfare of future generations and genuine parental choice. We want

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to encourage provision across all sectors, whether public, private or voluntary. We want to ensure quality in the provision of that education.
This principle will no doubt emerge in later amendments today and perhaps on Report and we can discuss it from a Second Reading angle as and when the subject arises. However, with the certainty that there are benefits for children and with the certainty that we can achieve the right mechanics so that it is a low-cost scheme with robust anti-fraud procedures and it is workable and efficient, I hope that, when we come to it, the noble Lord will not wish to move Amendment No. 22.
Lord Addington: The Minister's answer was not unexpected. It is one that will have to be studied and, indeed, studied by my noble friend when he sees the report of today's proceedings. We may well return to this subject in the light of those studies after further discussions between myself and my noble friend. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 20:
Page 11, line 16, leave out ("persons") and insert ("local authorities").
The noble Lord said: For the convenience of the Committee I do not propose to move Amendment No. 21 but I shall speak to Amendments Nos. 25, 29 and 31. Like most people nowadays, I am strongly in favour of expanding the provision of pre-five education in Scotland. Indeed, many education authorities have made considerable progress in expanding pre-school provision in their area. I must stress that very often it was in partnership with the private sector and with the voluntary organisations. As we move through the Bill, it is important to show that there is no antagonism to the private sector as such, it is just that we believe that by and large there is a better spread of education if the local authority plays a major part in its provision.
We welcome that pre-school education will be given a higher profile and we welcome the proposals for its expansion. However, as was made clear at Second Reading and at every stage—I remember the evidence in Glasgow—many associations within the education world are opposed to the voucher scheme and do not believe that vouchers are an appropriate means of providing a high quality and equitable system of pre-school education. The voucher approach is unnecessarily complicated, bureaucratic, expensive and is likely to create serious problems in monitoring and attaining high standards of provision. My noble friend Lord Sewel spoke earlier of the possibility of fraud and no-one would doubt that the more diffuse the idea of vouchers becomes in the community, the more likely the risk that there could be fraud involved in it.
I move to Amendment No. 25 which inserts the provision that: Section 1(2) of the 1980 Act (which makes provision that the duty of an education authority to secure that there is made for their area adequate and efficient provision of school education and further education shall not include the provision of school education in nursery schools and nursery classes) shall cease to have effect. We want the education authorities to be the important people as regards the provision of pre-school education—not the only people, but the important people.
Amendments Nos. 29 and 31 stress the importance that we place on local authorities being involved in the provision of education. We seek to amend the legislation to ensure that the Secretary of State can only delegate the arrangements by undertaking any of the functions relating to the making of grants; these must be done through the local authority.
I find it difficult in view of the lack of trust. We had some of it in Glasgow recently and on Second Reading. Underlying everything there is a feeling of a lack of trust in the local authorities, and yet the local authorities are probably more examined, not just by government organisations, but by the users of the service themselves. No one demurs from going to their councillor and objecting to what their local authority is doing. It is much more difficult to object to a small nursery unit when your child is involved in it in a personal way. I have tried to point out that local authorities have encouraged, where possible, voluntary organisations, private organisations and private individuals to take part in nursery school education and under-five education but I believe strongly that local authorities should be the ones handling the basic finances in this area.
Baroness Carnegy of Lour: These amendments are designed to channel all the money through local authorities. The noble Lord says that there is no antagonism in local authorities towards the private sector and, of course, he is quite right; we know that. I am sorry, have I misunderstood the amendment?
Lord Carmichael of Kelvingrove: Local authorities work hard and more and more are encouraging private education and voluntary organisations in partnership.
Baroness Carnegy of Lour: I am sorry, but that was what I was trying to say. I appreciate that point because I know that local authorities have worked very closely with the regions and worked very closely through voluntary organisations. However, we should not look at the proposed voucher scheme entirely through the eyes of the providers and, particularly, entirely through the eyes of the local authorities.
It is interesting to see the different perceptions of the possibilities for the scheme when one talks to local authority people and to people on the ground who are interested in getting an increase in nursery education, particularly, I have found, in the rural areas near where I live. Various nursery schools, nursery units, have been started privately and are trying to do a cost effective job. However, it is not possible to get enough children to come in from the local area because people are paying and there are not enough people who are prepared to

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pay. It is pretty obvious to me that if people have a voucher in their hand and it is a voucher adequate to secure for them a place in a school which somebody has started nearby and which would, of course, have to meet the criteria for the voucher scheme, provision would arise which, at the moment, the local authorities cannot imagine would happen.
This is where the thinking is a little narrow and where it would be even narrower if this amendment were adopted. The noble Lord, Lord Sewel, is again looking at me as if I do not know what I am talking about. He may he right but I have been discussing the possibilities with a number of people who are in this position and they see possibilities which the local authority has not yet envisaged. Should this amendment be adopted, it seems to me that one would cut off all those possibilities. We know that the local authorities know a great deal about nursery education. No one is a greater admirer than I am of what has been achieved. But there are further possibilities. We need expansion, particularly in rural areas where we have heard in the evidence that there is very little provision.
This amendment would be a mistake. It would limit the scheme very much because it would make it possible only to do that which the local authority envisaged. If the statutory requirement on local authorities was to provide the whole thing the cost would be very great. That is a different point.
The Deputy Chairman of Committees (Lord Brougham and Vaux): There is a Division in the House and so we shall adjourn for 10 minutes.
[The Sitting was suspended for a Division in the House from 5.40 p.m. to 5.50 p.m.]
Lord Sewel: If I have understood the argument of the noble Baroness, Lady Carnegy, correctly, it is that there may be small groups of nursery aged children in rural communities whom the local authority does not see as being sufficient in number for nursery provision to be made available but that under this scheme the private sector may be able to move in and make such provision. I believe that that is the gist of what the noble Baroness said.
The difficulty is that the voucher is pitched at a level of £1,100 which covers the recurrent costs for a 50 per cent placement; indeed, much of the criticism we heard in Glasgow was that this does not provide for the capital costs of entry into the scheme. The difficulty is that new providers would be unlikely to set up nurseries in rural areas for a small number of children given the low value of the voucher. One of the benefits of the amendment is that local authorities could use the voucher value to build on their existing primary provision without the capital costs involved.
The Earl of Lindsay: I am grateful for the able manner in which the noble Lord, Lord Carmichael, moved the amendment and for the response by my noble friend Lady Carnegy. My noble friend is right when she says that the thinking behind the amendments is somewhat narrow and that they are possibly too provider-oriented rather than being oriented towards the recipients or the
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beneficiaries. However, the central point I wish to make to the noble Lord, Lord Carmichael, and to the noble Lord, Lord Sewel, is that we have a very high regard for the provision that local authorities currently make in terms of education. Their record stands well; we fully acknowledge that. When this Bill is enacted the role of the local authorities will continue to be central, be they acting by themselves or in partnership with the private sector or, indeed, the voluntary sector.
At present, local authorities have a power to secure the provision of pre-school education but they are not under obligation to do so. We believe that this amendment seeks to impose an obligation upon local authorities. It is based upon the Opposition's commitment to expand pre-school education predominantly through local authority provision. The Government, on the other hand, are committed to encouraging diversity and parental choice in expanding pre-school education. We believe that all providers of pre-school education have an important role, whether they are from the public, private or voluntary sectors.
The voucher system will not discriminate between pre-school centres, other than on the basis of quality. Only those centres which convince Her Majesty's inspectors of schools that they have the capability to deliver a good quality of education will be permitted to enter the system. Once centres are members of the system, parental demand, enhanced by vouchers, will encourage growth. This will be growth across all sectors, offering parents real choice; that is, the public sector, the private sector and, indeed, the voluntary sector.
None of this means, however, that the Government underestimate the importance of local authorities' involvement in this initiative, as I have already stated. Their role will continue to be extremely important. Local authority provision is widely respected and appreciated, and deservedly so in very many cases. It would be surprising if many parents with vouchers deserted good quality provision in the public sector. The noble Lord, Lord Ewing, and I live in a region with a very high standard of education.
Local authorities' responsibility for meeting special educational needs will also continue. Noble Lords will be interested to know that the funding presently received by them for this crucial area will not be affected by the voucher initiative. I accept that it can be argued that the effect of the proposed amendment would not be to make authorities the sole or predominant providers, but merely to give them responsibility for securing adequate provision, which could be achieved by contracting with other providers in the private and voluntary sectors. I do not find that persuasive. The Government's firm belief is that parents, through the exercise of choice, should influence the volume and distribution of places across the various sectors and that authorities should not be in a position to shape the market in which they already have a substantial stake as providers.
The amendment would result in authorities having either an exclusive or a controlling interest in the provider market. Neither outcome is consistent with our vision of a diversified and customer-responsive market.

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On either outcome, parents' freedom to choose where their children should receive pre-school education would be restricted. For that reason, I am unable to accept the amendment.
The Government are committed to encouraging diversity and parent choice. Amendments Nos. 20 and 21 would confine the proposed arrangements to specified local authorities and reflect the opposition's commitment to expand the interests of local authorities rather than those of parents and children. As I have stressed on more than one occasion, we want the provision to be recipient-led, consumer-led, rather than producer-led.
I turn to Amendments Nos. 29 and 31. The Government's policy is that the issue and redemption of vouchers will be handled by a single agency, and for the pilot year a firm has already been contracted. Substantial economies of scale are likely to be available from such an arrangement. The noble Lord, Lord Carmichael, suggested that the system would be complicated and bureaucratic, that it would not deliver quality and would be open to fraud. We take fraud extremely seriously and I have already explained to the Committee the efforts that we will be making to counter that. We will make every effort to make this as simple a system as possible.
On the accusation that it will be too bureaucratic, we are certain that the cost of running the system will be about 2 per cent. of the value of the vouchers, and we believe therefore that it will be a very cost-effective system.
On the allegation that the quality will suffer, I do not believe it is sound. It certainly could not be substantiated before the evaluation comes in. As I have said, Her Majesty's inspector will be checking the quality of the education and local authorities are involved in licensing childcare. There are therefore various means by which quality will be maintained.
If the Bill is enacted it will be the Government's intention to delegate to the voucher management agency the payment of grants and perhaps other functions such as the maintenance of a register of persons eligible for grants. Economies of scale would be lost by confining such an important function to local authorities. In any event, it would be inappropriate for functions under Clause 23 to be delegated generally to local authorities since they are likely to be one of the major recipients of grants.
For all those reasons we believe these to be unsatisfactory amendments and, given the serious assurances that I have given on some of the points, I would urge the noble Lord to withdraw the amendment.
Lord Ewing of Kirkford: Before my noble friend Lord Carmichael responds, did I correctly hear the Minister say that the private firm to run the voucher agency scheme had already been contracted? If that is so, how long is the period of contract that has been given to the company and why on earth have a pilot scheme if the Government have already made arrangements to put the whole scheme into being?
The Earl of Lindsay: All that has been contracted is 12 months of a pilot operation.
6 p.m.
Lord Carmichael of Kelvingrove: This is something that we shall certainly want to go into on Report. Two per cent seems quite a bargain. I do not know how many grants they will be giving out to make a living from 2 per cent., bearing in mind the other overheads as well. I think it will be considerably more unless it is to be a second-rate business.
I should like to ask the Minister a question. The noble Baroness, Baroness Carnegy, spoke about parental choice and the lack of provision of nursery education in certain areas of the country, but said that in some areas it is beginning. Can the noble Baroness give us any idea of the private nursery places in her area, the ones with which she is now familiar? One of our suspicions is that there is always private nursery education available if one pays enough for it, but the vast majority of parents are not able to pay anything like what a private nursery school costs. As far as I know in my area, which is a city centre, for lots of people it is right out of their budget; they could not possibly do it. Many people have said, and most people believe, that with the £1,100 voucher all that will happen is that the fees will go up. There may be a slight reduction in the fees as against now, but it will still be much more expensive than most people can afford.
Before I withdraw the amendment, can the noble Baroness give us any idea of the sort of cost of nursery schools? I understand that Fife, as the Minister said, has a very good reputation and I understand it reckons it is costing between £2,400 and £2,600 per year per child at a nursery school. I wonder if that is the sort of figure that the noble Baroness is thinking of?
Baroness Carnegy of Lour: I am sorry I cannot give the noble Lord chapter and verse because I do not know about the costs. I believe that the Scottish Consumer Council in its original submission said that it thought the effect of a scheme of this sort would be to drive down the costs of nursery school provision. It may be right about that; I do not know.
We had an exchange during the collection of evidence and I cannot remember with whom I discussed the question of why it would be wrong to have a nursery school in a private house. I know various people south of the Border who do this and have very good nursery classes in their own houses and in their own gardens, and it does not have to be a big garden or a big house. I was interested that when we were collecting evidence there was an assumption that this would not be a wise thing to do. It of course reduces the cost enormously if that is the way it works, and certainly one of the units that I was discussing was in a private house. However, I am sorry that I cannot give chapter and verse; I wish I could.
The Earl of Lindsay: It might just help the Committee if I touch on the value of the voucher and the additional provision for capital expenditure as regards the local authorities, which noble Lords opposite have mentioned. The voucher value will not cover the full cost of the high-cost places and it was never designed to do so. It is nevertheless a generous contribution by the taxpayer, and párents or local authorities who go for higher cost places can indeed top up the cost themselves.
However, a recent Audit Commission study of the position in England and Wales confirms that the voucher value enables the taxpayer to meet either the whole cost, or nearly the whole cost, of provision of all kinds. The study shows that the voucher value more than meets the average cost of playgroups and nursery classes, and most of the expense even of relatively high-cost, part-time nursery school places.
I would also say a word on capital expenditure. In the private and voluntary sectors, any capital needed for expansion will, as ever, be raised commercially. Now with the support of voucher income, education authorities set their own priorities for capital expenditure and voucher income can be used to meet loan charges. In addition, of course, there are also the new-found freedoms under the private finance initiative for local authorities. That may give some assurance on the issues raised by noble Lords opposite.
Lord Carmichael of Kelvingrove: The Minister has given us a great deal of information and it is something we will be able to look at with care and get advice on, but we will certainly be raising it at the next stage of the Bill when we go back into the House. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
Lord Ewing of Kirkford Lord Ewing of Kirkford moved Amendment No. 23:
Page 11, line 22, leave out subsection (2) and insert—
("(2) Grants under this section shall be payable for a limited period in order to evaluate their effectiveness and shall be additional resources over and above that which would otherwise have been available.").
The noble Lord said: Amendment No. 23 gives the Minister an opportunity to clear up what has become a major issue in relation to this legislation. Before I speak to the amendment perhaps I may make it clear that in discussion on Clause 23 stand part I shall return to three of the points the Minister has just made; first, about the value of the voucher; secondly, about the ability to top up the voucher; and, thirdly, about the ability to use the value of the voucher against borrowing. Certainly two of those three issues do not apply to local authorities. I shall come back to those points on clause stand part.
Amendment No. 23 relates to the pilot scheme. When at Second Reading we discussed the whole question of the Government injecting new money into the old scheme, the Minister chided me somewhat for saying that the scheme would not cost the Government a penny piece, and that all the money to run the scheme would
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be taken from the local authorities and would be redistributed through the voucher scheme. The Minister chided me and said that the Government were putting in,
"£30 million of new public money"—[Official Report, 11/12/96; col. 1143.]
I quote his own words from the report of the proceedings at Second Reading.
At almost exactly the same time as the Minister was saying that, a report appeared in the Scotsman of 12th December. It was written by a reporter called Elizabeth Quigley and headlined "No extra money for nursery voucher scheme". Although the comments are not attributed directly to the Education Minister, Raymond Robertson, he certainly makes no mention of any additional resources, either for the pilot scheme—that is what the amendment deals with—for the voucher scheme itself. What this amendment seeks to ensure is that the money to finance the pilot scheme—and the four areas for the pilot scheme have already been announced—will be new money and will not be money taken from the education budget and redistributed. I need not go any further on that. All we want with this amendment is an assurance that the money to fund a pilot scheme in the four local authority areas where it is to be operated will be new money, additional to the money for education that is presently allocated. I seek that assurance from the Minister.
The Earl of Lindsay: I can assure the noble Lord that £3 million of new money is being made available for the pilot year. Just to set out clearly how the financing of the main implementation of the nursery voucher scheme will work—because I remember as well as the noble Lord does that we had some interchange about this at Second Reading—we expect the initiative in Scotland to cost some £70 million in a full year once it is up and running. Part of the funding of the initiative in broad terms—some £40 million of the £70 million—will come from re-applying part of the education authority funding for pre-school children. To the re-applied local authority funding, the Government will add some £30 million of new funding each year once the pre-school initiative has been extended nationwide. Both in the pilot year, and indeed in a full year once it is up and running, we are making a substantial investment in this with new money.
Lord Ewing of Kirkford: I am grateful for the assurance that, in relation to the pilot scheme, it will be absolutely and totally new money, and no local authority will have money withdrawn from it in order to fund or finance a pilot scheme. As regards the issue of additional resources, which both the Minister and I touched upon, 1998–99 is the earliest it is anticipated that this scheme could be extended nationwide in Scotland. We are talking about some time in advance, which, at present, is irrelevant. I accept the assurances that the Minister has clearly given, that, in relation to the pilot scheme, it will be totally funded by the Scottish Office centrally. On that basis, I beg leave to withdraw the amendment.

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The Earl of Lindsay: I accept that £3 million of new money is being made available for the pilot scheme starting this August. We anticipate that the total cost of running the pilot scheme will be in excess of £4 million. If I understand the information I have correctly, just over £1 million will be recycled among those local authorities who will be involved in the pilot scheme. Approximately £3 million will come from the Government and the Scottish Office in the form of new money, and just over £1 million will come from the local authorities who are involved in the pilot area.
Lord Ewing of Kirkford: It seems absurd that a local authority should have to pay for the privilege of participating in a pilot scheme, but against the background of what the Minister has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ewing of Kirkford Lord Ewing of Kirkford moved Amendment No. 24:
Page 11, line 25, at end insert—
("() The Secretary of State shall make capital consents to local authorities in support of capital expenditure.").
The noble Lord said: Amendment No. 24 is also quite a simple amendment which does not require either a complicated presentation or a complicated answer. It deals with the whole question of capital consents for local authorities. There are a number of local authorities which have very little nursery education, and one I can think of off-hand is the Western Isles. If, after this scheme has been introduced, the Western Isles, as a local authority, were to require capital consent in order to provide the infrastructure to meet the parental choice that the Minister keeps talking about, can we have an assurance that the Secretary of State will readily and willingly give the capital consent?
The Earl of Lindsay: I am grateful to the noble Lord, Lord Ewing, for explaining the question behind Amendment No. 24. If I could set out the background to this, it would help. We believe the amendment is unnecessary for a number of reasons. First, the local authorities are free to set their own priorities for capital expenditure and would themselves not welcome a return to specific consents. Secondly, the voucher value is set at a level which will, in general, cover loan charges and capital repayments, and authorities which give appropriate priority to nurseries as regards using capital consents will be able to put voucher income towards loan charges. Thirdly, renting rather than building may be the better answer. In any event, in many cases new buildings may not be needed. The use of spare or under-used classrooms is an important issue at present, as was highlighted by the Accounts Commission in its report entitled Room for Learning last year. This will often provide an appropriate solution to the problem of finding space for additional nursery provision without the need to meet more than marginal costs. I hope with that background I have reassured the noble Lord on the general issues he raises.
Lord Ewing of Kirkford: I am a simple chap. I do not understand what the Minister is talking about when he says that in the case of the local authorities the value of the voucher can be offset against the interest charges on the loans. The voucher in the beginning comes from the local authority. The principle of Part II of the Bill is that based on information provided by the Department of Social Security and, in some cases, the Child Support Agency, the parent of every four year- old child in that local authority's area will receive a voucher for £1,100, the £1,100 being deducted from the local authority concerned. This is what we were told at Second Reading. Where does the £1,100 come from?
The Earl of Lindsay: The cost of the scheme when it is up and running will be some £70 million, £30 million of which will be new money. That is new money being injected into the system. So, of the £70 million which will be going into nursery education, only £40 million will be coming from the local authorities' grant. There will be substantial new money in the system beyond that which is being taken from the local authorities.
Lord Ewing of Kirkford: This is an important point that should be clarified. Is the Minister saying, as distinct from what he said at Second Reading, that it is not now the case that £1,100 for a four year-old child in the local authority's area will be deducted from the local authority's education allocation? If that is what the Minister is saying, how much will be deducted per child from the local authority's education allocation?
Lord Sewel: Am I right in saying that there is a major difference in the ratio between old and new money in the pilot scheme and the main scheme? As I understand it, in the pilot scheme it is £1 million of old money coming from the local authorities and £3 million of new money coming from the Government. In the main scheme, it is a ratio of 4:3 of old money and new money. If there is such a difference in the ratio between old and new money, between the pilot and the main scheme, will this not totally distort the evaluation?
The Earl of Lindsay: That factor, which can easily be taken into account, will not totally distort the evaluation. It is a matter of the evaluators keeping a clear head and simply coping with the information which the noble Lord has just described.
I offer a further explanation to the noble Lord, Lord Ewing. On national implementation of the voucher system in 1997–98, we propose to deduct funding from local authorities' AEF so that it can be reissued in grant through the voucher mechanism. The actual sum will be the equivalent of the voucher value multiplied by the number of children in the pre-school year who would have been educated by education authorities in the absence of a voucher system. Our current estimate of that is just over £39 million.
As regards the method of distributing the deduction among authorities, we suggested two options in the consultation paper published last August, but there was no consensus on the preferred option. In any event, none of those matters has yet been decided, nor should it have

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been. It will all be discussed with CoSLA in the usual way of the local government finance negotiations. I hope that gives noble Lords some of the information that they sought.
Lord Ewing of Kirkford: Perhaps I may take this simple fellow down the road just a little further. If the value of the voucher is to be multiplied by the number of four year-olds in the local authority's area and the value of the voucher is £1,100, am I not right in saying that the local authority will have deducted from its education allocation £1,100 multiplied by 10,000 if there are 10,000 four-year olds in its area? That is what I have been saying all along. The Minister seems to be taking a long round-about road to say that I am wrong. Am I wrong or am I right?
The Earl of Lindsay: I told the noble Lord that he is right. If there are 16,000 four year-olds in an area 16,000 vouchers will be regularly spent in that area. In fact, a greater degree of money will be spent on the provision of nursery education after the voucher system has been introduced. Therefore if the local authority happens to be the principal provider it will stand a very good chance of remaining the principal provider for the extra 4,000 four-year olds who will suddenly come into the system.
Lord Ewing of Kirkford: This is not a private discussion and anyone should feel free to join in! At present, the local authorities provide nursery education at a cost of roughly £2,500 per four-year old child. If there are 16,000 children, as the Minister says, in a local authority's area and the parents each receive vouchers for £1,100, and even if the £1,100 is returned to each local authority with no ability to top up, then less money is being spent. The top-up scheme does not apply to local authorities; it is only in the private sector that parents can top up the voucher.
Baroness Carnegy of Lour: Surely this matter should be dealt with when the central government grant is arranged with the local authorities. As I understand it, the local authorities will lose £1,100 for each child who is with them at the moment. The noble Lord is right in saying that. If those children return to their nursery schools the local authorities will get that back and they will be exactly where they were before. In the Minister's own area, Fife, a small proportion of four year-olds are not in the local authority schools. The question will be: where will those children go? If they go to the local authority schools it will help them. If they do not, it will be a question of how other provision is made. The schools will be in the same position provided that the families do not leave them to go to other nursery schools. Then the schools will lose some children, which obviously will be a problem for them but they will have to adjust. Is that not correct?
The Earl of Lindsay: I should like quickly to deal with this point. If the authorities create more voucher sponsored places with the new arrangements than they were providing before the new arrangements, they will be better off than they were under the old system.
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Secondly, it is up to local authorities to decide among themselves as to whether they want to top up.
The Deputy Chairman of Committees (Lord Lyell): We have a Division and I believe that it is the wish of the Committee to adjourn for a Division. The Committee is adjourned for 10 minutes.
[The Sitting was suspended for a Division in the House from 6.23 p.m. to 6.33 p.m.]
The Earl of Lindsay: Because of the quantity and density of detail in this area, the most constructive offer I can make is that I write quickly to the noble Lords opposite setting out the detail and what is behind some of the issues we have been discussing. I would just clarify one point with regard to the deduction of the £1,100 times the number of pupils in a local authority area. The deduction will be the number of four-year old pupils that that local authority is presently educating, not the total number of four-year olds in that specific local authority area.
The other small point which I might clear up at this moment regards the ratio that the noble Lord, Lord Sewel, was worried about of the pilot scheme where some £3 million of new money is contributing towards an overall package worth about £4 million, versus the main scheme where we anticipate £30 million of new money playing its part in an overall scheme of about £70 million. In the pilot scheme areas, that £1 million of local authority money represents the extent to which they are educating pupils at present who are four-year old pupils. Therefore, that reflects the number of pupils who are not being educated at the moment—hence the government contribution of £3 million.
Lord Ewing of Kirkford: The Minister has made a very important statement. Up until the present time, it has always been understood, certainly by the local authorities, that all the calculations from the previous local authorities—Fife region and Central region—have been based on a deduction of £1,100 for every four year-old child in their local authority area. What the Minister is now saying is that the deduction will in fact be for every four year-old child that is presently in nursery education. What that means is that in the case of the Western Isles, where the level of provision is very low indeed—almost non-existent—only a handful of parents will be entitled to this voucher.
The Earl of Lindsay: In the case of the Western Isles, I am not immediately familiar with the details. The advent of the voucher system will be very beneficial and they will have a very small deduction, because they are currently educating very few four-year olds. However, a voucher will be delivered to the parents of every single four year-old in the area. Therefore the ratio of money being deducted versus new money being injected will be a very good ratio as far as the Western Isles are concerned.
Lord Ewing of Kirkford: The Minister has anticipated what I was going to say. In the case of the Western Isles, where up to now provision has been almost non-existent, they are going to benefit

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substantially, whereas in the case of authorities like the old Fife region and Central region, where provision has been at a very high level, they are going to suffer. Fife has produced figures showing that it will suffer. It will be penalised for the previously high provision. However, we should leave the matter for today and return to it at Report stage.
The Earl of Lindsay: Fife region would suffer only if, once the vouchers have been delivered to the parents, the parents then find another kind of nursery education that they prefer to the current provision of nursery education in Fife. If most parents are satisfied with the education service they are getting from the Fife regional council then they will stay with the Fife regional council.
Baroness Carnegy of Lour: Am I right in thinking that for every child in Fife who is in a local authority nursery at the moment £1,200 will be deducted, and that if the children go back to continue in the nursery school where they are, that money will return to Fife? That is what I was trying to say before—that they will be in the same position as they were before. It is the children who are not in the present local authority system who will affect the scene.
Lord Sewel: Is the Minister saying that is the main scheme as well as the pilot scheme?
The Earl of Lindsay: That is correct. If education authorities continue to provide for as many pre-school-year children under the voucher system as they did before, the effect of these arrangements will indeed be cash neutral. If authorities create more voucher-funded places, their funding will increase. Given the popularity of much local authority provision and pressure on places, it is highly unlikely that authorities will lose funding overall, and very probable that they will secure additional funding through the vouchers.
Lord Sempill: Is the calculation of £70 million guaranteed to give pre-school education to all four-year-olds in Scotland; and if so, what would be the cost to the state if they undertook it themselves?
The Earl of Lindsay: The £70 million would enable all four-year-old children in Scotland to receive nursery education.
Lord Sempill: If that calculation has been made, have the Government worked out what it would cost if the state had to provide the education for all four-year-olds in Scotland; or is it exactly the same figure?
The Earl of Lindsay: I am afraid I do not have that figure with me.
Lord Ewing of Kirkford: We have had a good discussion and I shall just add one point before I withdraw the amendment. The point about the local authorities being in balance falls flat if a large number of parents decide not to return their voucher to the local
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authority. It falls flat on two counts; first, because they have not returned their voucher; and, secondly, because the capital expenditure incurred by the local authority in order to provide the nursery accommodation hitherto is therefore lost. That is where the whole scheme falls flat. However, having said that, and having indicated that we shall want to return to this point at a later date, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 23 shall stand part of the Bill?
Lord Ewing of Kirkford: Part II of the Bill demonstrates the fundamental difference between the Government and certainly the Labour Opposition on the Bill. We have a fundamental objection to the whole question of the voucher scheme. It is interesting that the Minister has used extensively today the word "voucher". I mentioned at Second Reading that nowhere in the Bill, from the front cover to the back cover, does the word "voucher" appear. The reason why the word "voucher" does not appear is that the Minister and his advisers know perfectly well that the whole thing is highly unpopular. I shall not persuade the Minister today that the Government have got it wrong, but what I shall do, and do in no uncertain terms, with a maximum of 44 weeks until the calling of the next general election—from the date on which the Bill goes on the Statute Book, assuming that is the second week in November, we are down to 18 to 20 weeks—is to place firmly on record that an incoming Labour Government will stop this scheme. There will be no voucher scheme in nursery education provision in Scotland.
We have seen already the pilot schemes in the early part of their operation here in England. It is interesting to read the reports of the early results of the pilot scheme. It is interesting to listen to the interviews on the early results of the pilot scheme. One has to look and listen long and hard before one finds anyone, even in the pilot stage of the scheme in England, who is in favour of the scheme. I do not intend to repeat myself; I have it clearly on record at Second Reading that this scheme is socially divisive. It is educationally inappropriate and it will not do anything for nursery education in Scotland.
The socially divisive part of the proposal is clear. The parents in a village community get their nursery vouchers. Some are able to afford to top-up that voucher, because a voucher will only buy £1,100 worth of nursery education. An £1,100 voucher will not buy any more than £1,100 worth of nursery education whatever the Minister says; there is no escaping that fact. Then some of the parents decide that they can afford to top it up, and Miss Smith next door decides for obvious reasons, being a single parent, that she simply cannot afford to top it up. So we have the two children going to the nursery together, let us say, at nine, half-past nine or ten o'clock; we have one coming home at lunchtime because his or her mum cannot afford to top it up, and the other one staying on in the afternoon. Whether the Minister likes it or not, that is socially divisive.

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It was to the rural communities that the noble Baroness, Lady Carnegy, addressed herself at an earlier stage in our proceedings. It is the rural communities that will feel the impact more than the urban communities. But it will have its impact in the urban areas of Scotland as well.
Raymond Robertson, in his speech to which I referred in the Scotsman of 12th December last year, laid great emphasis on the whole question of parental choice. Raymond Robertson referred to parental choice in the context of the assisted places scheme, not in the context of this scheme. We are not debating, and the Bill has nothing to do with, the assisted places scheme. But there is not even parental choice; there is school choice. If the school decides not to take the pupil, the school does not take the pupil. That is not parental choice.
I shall put forward a proposal to the Minister, because we will not be voting on this today. We shall come back to this on Report. If the Minister is interested in introducing real parental choice, I invite him to come back on Report with an amendment to Clause 23, which says that the parents go and collect the vouchers, not have them sent to them. That is real parental choice: the parents right at the beginning can choose whether or not they want to go and collect the voucher. That is real parental choice. But of course the Minister will not do that. The Government will not do it. There is no parental choice. You get the voucher whether you want it or not. It is not enough to say, "Ah, but they have parental choice on how they spend it." Some vouchers, because of the domestic situation, will get lost. There will be all sorts of confusion about what is happening to wee Johnnie's or Mary's nursery education.
That is not my main objection. My main objection is to Clause 23 in Part II of the Bill. This is the part of the Bill that separates both main political parties in Scotland. Certainly, in the United Kingdom as a whole, the whole question of vouchers for nursery education separates the main political parties. I say again and put on record that we will not vote on it here today but we shall come back to it at Report stage. An incoming Labour Government—and this should be absolutely clear—will stop this scheme dead in its tracks. It will not be implemented. That should be absolutely clear.
Lord Sewel: I accept that the Government, in going down the road of vouchers, believe that it will increase provision and increase choice. I believe that there is a very real chance that it will fail on both counts. I can illustrate this by notional figures.
Let us assume that there is a local authority nursery, which is at the boundary of financial viability with, say, 20 children. I use the figures purely for the sake of illustration. If it gets all the vouchers for those 20 children it can continue and maintain its financial viability. The Minister argues that if the local authorities are successful in retaining those presently attending local authority nurseries, local authority provision has nothing to fear. Let us assume that five children are taken out of local authority nursery provision and that their parents use the voucher to gain entry to the private sector. They use the voucher and use the top-up fees, because all the evidence we have received indicates that
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it will be necessary to top up the voucher if you move to the private sector. The Minister shakes his head, but all the evidence we heard in Glasgow from those who are providing private provision indicated that, even to recover the recurrent costs, let alone the capital costs, it would be necessary to charge top-up fees. So the five children move out of local authority provision and the local authority is left with the income from 15, which takes the total amount of income below the level that allows the local authority to provide the nursery povision on a financially viable basis. The local authority, faced with that, withdraws from nursery provision in that area. It simply cannot afford to maintain it with the loss of income.
At the end of the day the sum total of the effect of the voucher scheme in that particular example, and it is a valid example, is that five pupils move across from local authority provision into the private sector and 15 pupils have no nursery provision at all. In other words, there is a decrease in provision and the choice exercised by the five denies provision for the 15. That is one of the fundamental weaknesses of this scheme.
Lord Addington: Clause 23 brings in Part II of the Bill which everybody has been protesting about. Part I of the Bill is something which we would all, generally speaking, welcome and the other parts of the Bill do not inspire the same amount of protest.
When we bring in this voucher scheme we are bringing in something which can potentially, if not actually, cause division. It is bureaucratic; it is wasteful. In certain parts of Scotland it certainly has the potential for undermining pre-school education, which works. With that in mind, if we had the opportunity to divide on this I would certainly be supporting those noble Lords who have spoken because this is not the best way forward and it is that, and only that, on which I base my opposition to the clause.
Baroness Carnegy of Lour: It is very interesting that we continue to have coming from the parties opposite this intense dislike of putting the power to choose into the hands of local people; the power to choose something which is run by the local people or something which is run by somebody else. The arguments remind me of when Parliament discussed the question of choosing a school. There was intense suspicion that it would not work and it would upset all the arrangements. There have been problems, one of which is addressed in the Bill but, on the whole, it has worked very well. From the very start in Tayside people were allowed to choose their school, there was never a problem. I remember saying that in Parliament when we were discussing how necessary it was for everybody to have a choice of schools, and nobody believed it.
Lord Ewing of Kirkford: I apologise for interrupting the noble Baroness. The Bill, if enacted, would amend the position. Parental choice in choosing schools is not working. The amending provision is in the reserved places part of the Bill.
Baroness Carnegy of Lour: I am sorry. I did not quite hear what the noble Lord said.
Lord Ewing of Kirkford: The Bill, if enacted, would amend the parental choice legislation to which the noble Baroness is referring because it did not work.
Baroness Carnegy of Lour: I have just said that. There have been problems and one of them is addressed in the Bill. Of course there have been problems but, on the whole, it has worked extremely well. The fear of this system is the fear of something different. As I hear the noble Lords opposite speak, New Labour seems to be very like old Labour: there is the fear of innovation, the fear of allowing people to have a say in what they are doing.
It will be very interesting to see, as the pilot develops, how people react to it. One cannot tell whether there will be time before the next general election for people to know enough about the possibilities. One seldom has a single issue playing a great part in the result of a general election but it will be very interesting to see whether people want to have a voucher for nursery education. I hope that will come through and that, whoever wins the next general election, people will have some confidence about this scheme as a result.
It is very sad to be quite so negative and to be following the producers all the time instead of listening to what people want. They want to choose, they want more nursery schools and they want more nursery schools in rural areas. Although we do not bet in this House on the outcome of legislation I should have thought that one would win if one bet on an increase in nursery education in rural areas as a result of the scheme. I am increasingly certain of that. There will of course be problems to be ironed out, and there will be changes in the way the system works as it is developed. But as a general principle and as a way of expanding nursery education, it seems that the providers are wrong, and the parties opposite are wrong in being so fearful of it. I hope it will go ahead.
Lord Goold: I am surprised at the pessimism of the noble Lord, Lord Sewel, with regard to the ability of local authorities to keep their pupils. I should have thought that, with the voucher system, people would want to spend their vouchers, that people who are not at present taking the benefit of local authority nursery schools would want to use their vouchers and that the numbers in all nursery schools would increase, in addition to new ones starting up.
Lord Sewel: That goes also for the evaluation, but there will not be time to take it on these issues.
The Earl of Lindsay: I was grateful for the intervention of my noble friend Lord Goold who makes the extremely good point that the opposition of noble Lords opposite to this clause and to the principle behind Part II is in part driven by pessimism and in part driven by some less attractive qualities than pessimism. Just 56 per cent. of four year-olds in Scotland currently receive nursery education and so 44 per cent. of Scotland's four year-olds will be in a position to request and purchase nursery education with the advent of the voucher scheme. There will potentially be a huge expansion in the provision of pre-school education because of this initiative.
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We believe that parental choice should be the driving force. The noble Lord, Lord Ewing, has an extraordinary definition of parental choice if he prefers a system whereby he would make parents go to collect their vouchers—for what reason I do not understand, and why that should represent better parental choice I do not claim to understand. We want to deliver those vouchers to the parents themselves without making them trail round the country to pick them up. Of course vouchers can get lost among the mess in the kitchen, but whether you pick the voucher up by car or whether it has arrived the post, will not make it any more likely to be lost.
We are convinced that this route will increase nursery education provision and increase parental choice. It breaks new ground and therefore outside this House I am not unsympathetic to some of the concerns people have. This is a scheme with which they are not familiar and therefore one tends to entertain the darkest notions when one is not quite sure what is coming one's way. But I am astonished at some of the deliberate scaremongering that is coming from noble Lords opposite, particularly as it can only undermine the confidence that some parents will have in the prospects which this initiative hopes to offer.
The Domesday scenario pictured by the noble Lord, Lord Sewel, is technically possible but, as I said, with a huge increase in the demand for nursery education in Scotland resulting from nursery vouchers it is very unlikely that a local authority school which is offering decent nursery education will start losing children. There may be another provider of education nearby which attracts five children from the school that the noble Lord, Lord Sewel, was imagining. However, at the same time there will be many more children in that area who suddenly, for the first time, have access to nursery education. If that school is providing a service of some quality it has no need to fear. If it is providing a service that is inferior to the service being provided by other competitive providers then it does have something to fear. But beyond that, there is a huge increase in customers and consumers who will be requesting and demanding education.
I return to the point made by the noble Lord, Lord Goold. On the whole, local authorities have a good record, especially in some areas, of providing nursery education. They will find that their market of potential customers is about to increase significantly and therefore there will be winners and not losers.
I would like to stress a point that I made earlier. The Audit Commission studied the position in England and Wales and it confirmed that the voucher value enables a taxpayer to meet either the whole cost, or nearly the whole cost, of provision of all kinds. We see no reason why the commission report on England and Wales should not have a relevance to the circumstances in Scotland.
I could defend Clause 23 at length, but I shall not do so because we more or less covered the ground in the debate on the various other amendments. I summarise by stressing our fundamental belief that we want to see nursery education expanded; that parental choice should be the driving force behind it; and that not only

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increased quantity and diversity of education from local authorities, the private sector and the voluntary sector should ensue but, indeed, quality will also be a watchword of the Scottish initiative on nursery vouchers.
We realise that there is no issue of principle as regards the clause and this part from noble Lords opposite. Pessimism is the less attractive feature of the Opposition as regards the principle. It is the absolute determination to prevent parents from being the principal point of choice that I find much more uncomfortable and much more unattractive. No doubt we shall return to debate Clause 23, Part II, at the Report stage when we can cover this ground again, but at the moment I would commend to the Committee that the clause stands part of the Bill.
7 p.m.
Lord Ewing of Kirkford: Before I beg leave to withdraw my Motion that Clause 23 shall not stand part of the Bill, I give notice again that we will return to this matter on Report. I am always interested to hear Government Ministers, particularly for Scotland, complaining that Opposition politicians are distorting their case. I think I have said before that when I was a Minister at the Scottish Office there were nine or ten press officers. There are now around 35 or 36—almost four press officers for every Tory MP in Scotland—and they cannot get their case across; and we get the blame for that. There is nothing between the Minister and myself on Labour-controlled authorities, and they are all more or less Labour-controlled in Scotland now. There is nothing between us on the desire to expand nursery education and to involve parents in the decision-making process—nothing between us on that at all. Our objection is to this divisive voucher scheme and to the dangers that it holds. That is why it will not be introduced under a Labour Government. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Lyell): The Question is that Clause 23 shall stand part of the Bill. As many as are of that opinion say Content.
Lord Ewing of Kirkford: We cannot vote in this Committee.
The Deputy Chairman of Committees: It was read out at an earlier stage. I go through the Committee stage clause by clause. It is just the same as any other Committee stage. By convention, as I am sure the noble Lord will be aware, there are no Divisions. There are facilities but I go through the Bill clause by clause, amendment by amendment, and accordingly I put the
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Question that Clause 23 stand part of the Bill. It will stand part of the Bill. I understand that that is the will of the Committee.
Lord Ewing of Kirkford: We are under a difficulty now. If when we come to Report stage we are told that the Committee decided that Clause 23 should stand part of the Bill, does that mean that we cannot return to this matter at that time? I have to say that if the Lord Chairman's ruling earlier today had been in line with what the noble Lord the Deputy Chairman has just said, we could have voted now on this. My understanding is that all through this Committee's proceedings no votes have been taken or recorded. So can we return to this or can we not? Because if we cannot return to it, we want to vote on it now.
Baroness Carnegy of Lour: We were told at the outset of the Committee stage that there would be no votes, and because of that we can return to absolutely anything. We always go through every clause and we accept every clause at Committee stage, so that fits in entirely with what was agreed.
Lord Addington: What we are doing here, as I understand it, is merely discussing everything, but the form of the discussion is the form we take for a normal Committee stage. It has been accepted that we will allow everything to go through in an unamended form. Am I correct? Is that in effect what the noble Lord the Deputy Chairman is saying about this—that we are going through the clauses, and it is a case of agreeing to disagree without committing ourselves to any discussion made here; and it is merely a convention and a matter of words to keep us progressing through the Bill as is normally done inside the Chamber? If that is it, it covers everybody's concerns.
The Deputy Chairman of Committees: I am sure the noble Lord was here at the commencement of proceedings this afternoon, when the Lord Chairman proposed to the Committee a document that I have before me. I will not go through it again, but I hope that I may clear up any problems with the noble Lord, Lord Carmichael—that this Committee goes through each stage of the Bill just as if we were in Committee elsewhere in the House, and that is what I have done today. I understand that there may be further discussions on Report but that will be a matter for the whole House, which will receive the report of this Committee.
The Earl of Lindsay: This may be a convenient moment for the Committee to adjourn until tomorrow.
The Deputy Chairman of Committees: The Committee stands adjourned until tomorrow at 3.30 p.m.
Committee adjourned at seven minutes past seven o'clock.