Education Reform Bill

HL Deb 16 May 1988 vol 497 cc83-173

House again in Committee.

Clause 104 [Functions of local education authorities with respect to higher and further education]:

Baroness David moved Amendment No. 236B. Page 101, line 38, at end insert— ("(1A) It shall be the duty of a local education authority in respect of its area to consult such bodies as it considers appropriate and thereafter to publish a local scheme in relation to further and higher education, in order to facilitate the efficient provision of such education within its area, and any institution maintained by a local education authority to which this Part refers shall have regard to the local scheme").

The noble Baroness said: For the convenience of the Committee I shall speak also to Amendment No. 264F. We now move to Chapter I of Part II, which deals with local education authority functions with respect to higher and further education. The amendments concentrate upon further education. They focus on the issue of the LEA's co-ordinating role. I wish to establish that there should be one. Amendment No. 236B provides: It shall be the duty of a local education authority in respect of its area to consult such bodies as it considers appropriate and thereafter to publish a local scheme in relation to further and higher education, in order to facilitate the efficient provision of such education within its area, and any institution maintained by a local education authority to which this Part refers shall have regard to the local scheme".

Amendment No. 264F is more or less consequential upon Amendment No. 236B. There have been many changes as a result of the Bill. The most significant change relates to the management and funding of higher education because nearly all non-university higher education provision will be removed from the control of local education authorities and put under the control of a newly established Polytechnics and Colleges Funding Council. That change applies to all polytechnics and colleges with over 350 students and with more than 55 per cent. of work concerned with AFE or an equivalent full-time enrolment number for advanced further education courses exceeding 2,500. Other colleges may be included in those provisions if the Secretary of State judges that the number of students involved in courses of advanced further education exeed 55 per cent. although the number of students was not above 350.

Those changes will leave LEAs with almost no role in relation to higher education. The only higher education for which they will have direct responsibility will be in FE colleges which have some HE courses. LEAs will also lose some of their FE work to the PCFC sector in the colleges which have over 55 per cent. but under 100 per cent. HE work. The FE colleges remaining within the LEAs will not be unaffected by the Bill because there is local financial management.

The governing bodies will change in their composition. The proposals in the Bill specify that a college governing body will have not more than 25 members, including only 20 per cent. of members selected and appointed by the LEA, and a minimum of 50 per cent. who are engaged or employed in business, industry, any profession and any other field of employment relevant to the activities of the institution, or co-opted by the governing body. Both local financial management and the changes in the membership of governing bodies are likely to affect the relationship between colleges and the LEA since they give colleges far more control, and therefore more independence from the LEA. For example—this is important—under LFM a college will be responsible for appointments and dismissals of staff although the LEA will still technically be the employer. We shall be having amendments on that subject later.

The DES draft circular Local Management of Further Education Colleges—Delegation Schemes and Articles of Government, published on 21st April this year, proposes that a maximum of only 15 per cent. in total of places might be held back by the LEA.

With regard to the co-ordinating or strategic planning role, for a number of years the Government have been urging local authorities to be more responsive to the consumers—the employers—and to plan their provision of education more effectively. On further education, the Training for Jobs White Paper, published in 1984, was an important statement of the Government's views. As a result of negotiations between the local authority associations and the Manpower Services Commission, following publication of the White Paper, an agreement was reached on the provision of work-related non-advanced further education by which LEAs would produce three-year plans for their provision of work-related non-advanced further education and one-year programmes as a basis for contracting with the MSC for the provision of MSC-funded courses.

The Government's aim in establishing that agreement was to improve LEA planning and responsiveness. In 1987, Deloitte, Haskins and Sells prepared a survey of views on the MSC/LEA/NAFE planning agreement for the Manpower Services Commission which concluded: LEAs and colleges are now setting objectives and formalising plans which are forward looking. There is now more LEA-wide co-ordination leading to an impetus for an FE policy in some of the LEAs".

We have an HMI survey on NAFE in practice, published in April 1987, which concluded: The picture of NAFE which emerges from this inspection is of a flexible and responsive service. In some LEAs, the call for clearly focused development plans and programmes has generated structural and policy changes which should help the FE service in its desire to be responsive, up to date and reasonably well equipped".

While both reports are critical of some aspects of NAFE and the LEA role, their conclusions are generally positive. LEAs are seen to be planning NAFE increasingly effectively and providing a responsive education service. It is vital that the Bill does not prevent the LEAs' strategic planning role from being further developed.

During the course of the Bill in the other place Ministers made a number of statements about the importance of the strategic planning role of LEAs. For example Mrs. Rumbold stated on 11th February 1988 (col. 1312): Our provisions for FE recognise that the local education authority will play a key role in the strategic planning of further education under their control".

At a later stage in the debate, Mrs. Rumbold said that the DES will issue guidance to LEAs on how to draw up their schemes and if necessary would provide model schemes. She went on to say that Clauses 96 to 113—that has probably changed in the Bill as it now is—would allow LEAs to continue to exercise their strategic planning role and to use their discretion to a large degree.

However, while the amendment to the current Clause 121, which specifies that schemes should set up principles and procedures to be applied, has been inserted, there is still no mention of the precise wording which underwrites the LEA's position. The absence of that formulation is all the more remiss since we now find that the DES draft circular Local Management of Further Education Colleges Delegation Schemes and Articles of Government reaffirms the strategic role of LEAs. Thus under approval criteria paragraph 171 provides: Each scheme should give colleges as much freedom as possible to manage their affairs and allocate their resources as they think best within the sterategic framework set by the LEA".

Our amendments would ensure that the Education Reform Act 1988 carried the same terminology with the same understanding as is conveyed by the DES consultative paper, government Ministers and DES circulars.

The amendments would write onto the face of the Bill the strategic planning role which is crucial in establishing the LEA role in relation to further education. I am very anxious that the further education provision will not be made worse by what we are doing in this Bill. It is important to make quite clear what the LEAs' role is, because it is being diminished. What we want to do in these amendments is to make it quite clear that LEAs have a strategic role and will have a say in what goes on in their colleges. I beg to move.

Baroness Seear

I want to speak very briefly in support of this amendment and emphasise the importance of the strategic role in the new situation in which we find ourselves as a result of the developments in the MSC. If the MSC plans for the YTS second year are to be successful they must be developed in close co-operation with the colleges. The colleges have to be able to make a strategic plan, and the provision which is required if the YTS year two is to be successful should be clearly in those plans. The LEAs should be able to forward the plans as they had originally intended.

The whole of the Government's programme in this area to provide decent training for 16 to 18 year-olds—I underline "decent training"—the whole success of that programme, depends on whether the second year training is good. It can only be good if the colleges are able to plan and to follow the plan through to provide what is required. I very much hope that this will be accepted.

Baroness Hooper

Since worries have been expressed that the strategic planning role proposed for local education authorities might constrain the ability of colleges to respond to the changing needs of students and employers, I am happy to give an assurance that that is certainly not the Government's intention. Nor, we believe, will it be the effect of our proposals. On the contrary, a key purpose of delegation is to give colleges greater freedom of manoeuvre. The Government have all along emphasised the importance of strategic planning by local education authorities of the FE provision in their areas. In the absence of such planning, there is likely to be unnecessary duplication of provision in some subject areas and lack of provision in others.

It is therefore for each local education authority to determine in broad terms what each college should be contributing to the local FE service. That planning should provide the basis for the setting of college budgets so that the money a college receives is directly related to the task it has been asked to perform. But clearly the college also has a role in conjunction with the local authority in deciding on or helping to create this strategic plan.

As far as Amendment No. 263B is concerned—[Interruption.] Are we not discussing Amendments Nos. 263B and 264F? I seem to have this wrong. It must be the wrong juxtaposition. In any event, the Government do not feel able to accept Amendment No. 236B.

Baroness David

I must say that I am rather surprised. I am not worried about the numbers being wrong, but it seems to me from what the Minister said, that she accepted the idea but not the actual amendment.

Baroness Hooper

We think that the idea is already covered and for that reason we do not think that the amendment would add anything to what is contained in this section of the Bill.

Clause 121 already provides that each local education authority must prepare a scheme which sets out its procedures for planning provision in colleges, for setting college budgets in the light of that planning and for delegating the management of budgets to college governing bodies. Clause 122 requires that the scheme must be prepared in consultation with colleges. Clause 129 requires that schemes must be published. So the great bulk of what the amendment proposes is already covered.

Further, the amendment seems to hark back to the old FE schemes procedure set out in Section 42 of the 1944 Act. Under that provision each local education authority had to put to the Secretary of State a scheme of FE provision for its area. The local schemes proposed in the amendment would apparently contain particulars of the provision to be made in terms of the pattern of courses and institutions. That was what the old 1944 Act schemes tried to do, and they failed because the pattern of provision is and should be continuously changing.

A scheme was no sooner agreed than it was out of date. By contrast, the schemes which local education authorities will prepare under Clause 121 will not contain details of the pattern of provision but only of the mechanism to be employed by the local education authority in planning what the provision should be. The amendment would take us back to a method which has been tried and failed.

As far as Amendment No. 264F is concerned, we do not believe that that amendment changes the substance of the clause, but it weakens the drafting. The Government's proposals for the procedures which local education authorities might use for planning provision in colleges are set out in Part II of the draft circular of guidance which we issued in April and to which the noble Baroness referred. It is procedures of that sort which we expect to see set out in schemes. Amendment No. 264F would not of itself change that. The procedures set out in the draft guidance are compatible with both the present drafting of the clause and with the amendment. So from that point of view the amendment would make no difference.

A further objection to the amendment is its use of the term "strategic plan". It is true that the department frequently refers to strategic planning by local education authorities because it is a convenient shorthand which everyone understands. But we do not feel that it is an appropriate term to use in legislation because it is not sufficiently precise and will only cause confusion. Given that it makes no difference in substance, I hope that these amendments might be withdrawn.

8.15 p.m.

Lord Peston

While thanking the noble Baroness for the answer so far, perhaps I could press her since we are seeking to probe this matter to say someting about two other aspects of these amendments. Unless I misheard her, she does not seem to have included these in her answer.

First of all, Amendment No. 263B refers to higher as well as further education. We were looking for two matters here: first, to elucidate further the role of the local education authority in higher education, bearing in mind the remarks we made on other aspects of education about its local and regional aspects. We wish to know something about that, and in particular there are our worries about a possible growing gap between further and higher education, whereas we wish to see that boundary blurred.

Secondly, in the other Amendment, No. 264F, there is reference to the word "training". I thought that all our views now were that we ought not to separate education and training in an artificial way. Unless I misheard the noble Baroness, again she did not seem to include any thoughts on that matter in her answer. We are seeking to probe here and to understand how the Government think the Bill will work. In particular we are seeking to elucidate the role, and in my case also to understand a bit more about the power of, the local education authority in this area. Perhaps therefore I may ask the noble Baroness whether she has anything more to say. If she has not at this moment, is she willing to say more subsequently?

Lord Hylton

Before the noble Baroness replies I am sure that I am not the only Member of the Committee who has had a mass of letters from individual consumers of further and higher education. There seems to be very widespread concern lest by some sleight of hand occurring through this Bill what is presently available to people and in particular to unemployed people shall in some way be diminished. Any assurance that the noble Baroness can give us on that score will be more than welcome.

Baroness Hooper

In general I would say that the detail of these issues is discussed in the guidance which the department issued on 21st April. A number of queries might well be answered by that. The guidance shows that we have sought to achieve the right balance in what is admittedly a difficult area.

I should perhaps say to the noble Lord, Lord Peston, that further education is defined in Clause 104 to include training, if that was his concern. In relation to the concerns about possible fragmentation of FE and HE, I believe that those fears are not well founded. We must recognise that in a sense FE is already fragmented. It is seeking to meet a wide diversity of needs and it could never be wholly coherent. What matters is that an adequate range of opportunities should be available to meet the variety of needs, including opportunities for progression between levels.

The Bill provides local education authorities with the powers they need to secure that. It gives them full discretion to decide what is required in order to secure an adequate further education facility. We must avoid the temptation to prescribe from the centre how local authorities should exercise their discretion. They will be much better placed than we are here to work out what the needs of each community are in this area. I hope that that has gone some way towards answering the query.

Baroness David

I certainly agree with the Minister that we do not want prescription from the centre about what local education authorities do. What we are afraid of is that under the new arrangements the LEAs will not have a co-ordinating role. That is what we wanted to ascertain from these amendments.

We must look to make sure that what the noble Baroness says is correct and that this requirement is properly covered in the Bill. We shall look at the clauses and the subsections she has mentioned to make quite sure that if we are not satisfied that there is sufficient co-ordination and the LEAs have a proper role we shall return to this on Report. In the meantime if the noble Baroness whose name is also down to the amendment agrees, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lady Kinloss had given notice of her intention to move Amendment No. 236C: Page 102, line 3, at end insert ("This shall include an appropriate range of education and training opportunities for persons over compulsory school age who have special educational needs".)

The noble Lady said: I am not proposing to move this amendment, but am I correct in thinking that the Minister has agreed to look at this group of amendments again? I refer to Amendments Nos. 236C, 236G, 236L, 236M, 246, 253, 260, 264L and 268.

Baroness Hooper

I can assure the noble Lady that it was my intention to listen to any arguments that might be advanced and to look again at these amendments.

[Amendment No. 236C not moved.]

[Amendments Nos. 236D and 236E not moved.]

The Deputy Chairman of Committees (Lord Hayter)

There is a misprint on the Marshalled List. Amendment No. 236F should read "Page 102, line 12" and not "Page 102, line 17".

Baroness Seear moved Amendment No. 236F: Page 102, line 12, leave out subsection (3) and insert— ("(3) Full time education suitable to the requirements of senior pupils over compulsory school age shall for the purposes of this Act be regarded as education in school or further education depending on the designation of the institution in which it is provided. In determining whether an institution providing full time education only for senior pupils over compulsory school age is a school or institution of further education, regard shall be had to the extent to which it is intended that the institution should be able to provide part-time senior education or post school education.").

The noble Baroness said: I shall also speak to Amendment No. 236N. I thank the Deputy Chairman for pointing out the error on the Marshalled List in this amendment.

The purpose of these two amendments is to explore the position of full-time post-compulsory-age education particularly with reference to the question of the sixth form college and the tertiary college. In some areas sixth form colleges have developed which are exclusively full time for young pople who would otherwise be in the sixth form inside a school. They are not to be seen, we understand, as part of further education.

On the other hand, in other areas tertiary colleges have developed which provide education and training for youngsters in the 16-to-18 age group and indeed above. They also provide part-time courses for people who may be or probably are in employment as they are following the courses part time and who may be seconded from their place of work. Many people feel that in some areas at any rate there is very considerable advantage to be gained from the tertiary college approach, although in other areas sixth form colleges are already established and they have their supporters in comparison with the tertiary colleges.

We are hoping that this is a matter which can be left to be decided at local authority level. We should very much like to hear from the Government that they accept the validity of both types of post-compulsory education and will give flexibility at local level to decide how the education at this stage is to be carried out. I beg to move.

Baroness David

This provision is thought to be very unfair because the clause gives the Secretary of State powers to change the status of an existing further education college back to a sixth form college. There are two colleges which are affected, Alton Tertiary College and New College, Swindon.

I hope that the Minister can say something about this matter because it is very backward looking to try to prevent colleges being tertiary colleges. I have a great feeling for tertiary colleges. They are a very good idea. To try to prevent changes and to try to prevent sixth form colleges having any part-time or older pupils is a terrible mistake. I hope that the Minister can take this matter back and think again about this clause which was I believe put in in another place either in Committee or on Report by the Government. It is a very unfortunate clause indeed.

Baroness Hooper

This is a complicated issue. The need to define the boundary line in the Bill arises from the repeal of the old provisions in the 1944 Act on further education schemes. Those provided a means of deciding at any given place whether an institution was a school or a further education establishment. In effect FE was defined as being the provision set out in the local education authority's FE scheme.

The Government inserted into the Bill on Report in another place provisions designed to meet this need for a definition and we wanted to make them as objective as possible. We wanted to avoid the exercise of discretion in order that everyone should know exactly where they stood.

The difficult area relates to school sixth forms and sixth form colleges, as has been said, and the need to ensure that they remain classified as schools even though they provide for those over the age of 16 and therefore might otherwise fall within the Bill's definition of further education. The feature which distinguishes sixth form colleges from further education institutions is that as schools they can only provide full-time education for 16 to 19 year-olds and are precluded from providing for part-time students or students over the age of 19.

The solution now incorporated in Clause 104 focuses on this feature, stating that where an institution provides full-time education for 16 to 19 year-olds and does not provide to any significant extent for part-time or post-19 students, that institution is to be considered a school. We believe that this gives a relatively neat and objective boundary line. It recognises the existing institutional patterns and will not require the disruption of institutions except perhaps in a tiny number of cases.

The two amendments, by contrast, seek to establish the dividing line between the two sectors by reference to the designation of institutions as being schools or FE establishments. The Government do not believe that this would be satisfactory. There is no mechanism for designating institutions and the amendments do not provide one.

I must emphasise that the Government have no intention of using the amendments as a means of ruling out future tertiary colleges. As is presently the case, a local education authority which wants to propose a reorganisation replacing school sixth forms with tertiary colleges is free to do so, and my right honourable friend will consider each such case on its merits. What the amendments prevent is the transformation of a sixth form college into a tertiary college with no statutory process of consultation and approval by the Secretary of State.

We do not believe that the amendments are necessary. We believe also that they replace clear objective criteria with a discretion to designate which could leave many people wondering where they stand. I trust that the noble Baronesses will not feel it necessary to press the amendment.

8.30 p.m.,

Baroness David

Perhaps the noble Baroness will refer to the two colleges I mentioned. Under the Bill, they will have to give up their tertiary status.

Baroness Hooper

I believe that the two colleges to which the noble Baroness referred were New College, Swindon and Alton College in Hampshire. Those colleges are classified as FE colleges and they have the pattern of provision typical of a sixth form college. Since we need a clear boundary line between the secondary and the FE sectors, there is always a chance that wherever the line is drawn some college will fall on the wrong side. The two colleges concerned have fallen on the wrong side. It would be relatively simple for the colleges concerned to bring themselves within the requirements of classification as a college simply by increasing the proportion of part-time or post-19 work.

Baroness Seear

I was not intending to intervene in the discussion. However, this is a matter of considerable importance to a large number of people. I am not entirely clear as to the the Government's thinking. Why is it necessary for the Secretary of State to decide the matter? In a changing scene at local level we are encouraging more employers to send people for part-time education on day release. They should be going to colleges for that day release. It is highly desirable that such programmes should develop quickly. What is the objection to a local authority saying it believes that a certain college can best serve the local community and meet local demands through being able to develop as a tertiary college? Why should that matter go to the Secretary of State? I cannot see that anything is gained, other than delay, by putting that matter to the Secretary of State when a local authority, local employers and local people have decided that that is what they want.

Baroness Blackstone

Does the Minister agree that it would be a great pity if the two institutions to which my noble friend Lady David referred have to revert from being tertiary colleges, with all the flexibility that that involves, to being either sixth form colleges or sixth forms? It means, that a possible future growth in part-time provision for 16 to 19 year-olds in the areas that the colleges serve will become more difficult.

The great advantage of tertiary colleges is that they can combine part-time and full-time work in a whole variety of different proportions. Once they go back to being sixth form colleges, there is no possibility for any part-time provision. A second great advantage is that tertiary colleges can provide a much wider range of subjects and combinations between academic and vocational studies than would normally be possible in a conventional sixth form college. Perhaps the Minister agrees that to have to revert back to being sixth form colleges disadvantages those colleges. If that were to happen elsewhere in the country, it would put back progress in increasing opportunities for 16 to 19 year-olds.

Lord Peston

Before the Minister answers, perhaps I may say that I have been listening to the discussion and I find it difficult to understand why we need to draw the line in the way the Minister has suggested. Why can we not define something to be called 16 to 19 year-old education, some of which takes place in predominantly full-time institutions and some in more flexible institutions? Why must we have the distinction between schools and FE colleges? That seems to me to be a hangover from the past. Since we are dealing with the Education Reform Bill, perhaps this is a chance to get rid of the distinction altogether and to realise that we are moving into an entirely new era in which we can call all such schools "colleges" without worrying about their composition.

Lord Hylton

I have no views on the merits or demerits of the amendments or of the Bill as it now stands. However, I believe we are entering a constitutional area. It would be a great mistake for either the Secretary of State or the local education authority to be in a position to modify the governing instrument of an educational establishment without the consent of its governors or trustees, if it has any. If there is to be any kind of modification without consent, we need some process of appeal.

Baroness Hooper

We believe that sixth form colleges and further education colleges have distinctive characteristics and that it is right that those characteristics should be preserved. If we allow too much blurring of the boundaries, local people who have been consulted on the creation of schools and colleges will have no assurance about their future character. As the noble Lord, Lord Peston, has said, with all such matters there is an evolution and it may be that in future the need for such distinctive characteristics disappears. We do not believe that that time has arrived.

As regards the two colleges which the noble Baroness, Lady David, mentioned, they are both looking at ways of remaining FE colleges. All they need to do to ensure that is to increase the proportion of part-time or post-19 work. At that point, Clause 196 will allow them until the end of 1989 to do so.

Turning to the question raised by the noble Baroness, Lady Seear, as regards why the Secretary of State is involved, he has established statutory controls over changes in the character of schools. That is why he is involved in deciding where the boundary between schools and FE colleges lies.

Baroness Seear

We are not satisfied with those answers. The Government do not seem to appreciate the fluidity of the position or the importance of getting the matter right in line with their own policies in other directions. I do not wish to keep harping on the importance of part-time education. However, the whole programme for training 16 to 18 year-olds will fall unless there is good part-time education available. Much depends on the success of that phase of the Government's plan. The tertiary colleges, unlike the sixth form colleges, are ideally equipped to provide that kind of training. There is an enormous value in seconded youngsters from industry meeting full-time students. Some of them may decide that they want to pursue full-time studies. They may discover talents they never knew they had. The mixture of full-time and part-time students is invaluable.

I hope that the Government will take the matter back and think again. We have not been told why the preservation of the sixth form college is so important. We have only been told that the Government believe it is. We are always told, "The Government believe …". That is an assertion of faith. We have had rather too many assertions of faith, one way or another, without bringing it into the question of sixth form and tertiary colleges.

Baroness David

I should very much like to support the noble Baroness. The Government ought to think again about this point. It is tremendously important for everyone's future that more people are allowed the opportunity to take up part-time education. I hope that the Minister will take this back and have another look.

Baroness Hooper

We also believe very much in the importance of part-time education and training, particularly for this age group. If it would help the noble Baroness, I shall be happy to write to her explaining the government proposals more fully, if I have done so inadequately. We are doing an enormous amount in the Bill and also outside the Bill to encourage work in this area and to emphasise the importance of part-time education and training. I do not see that the amendments proposed would help in any way.

Baroness David

I agree that the amendments may not be perfect. They are perhaps not good enough in themselves. I am not entirely pleased with them. I wish nevertheless that the noble Baroness would consent to look at this question. The Bill is tremendously inflexible as it stands. We shall certainly come back with amendments that are perhaps rather better than those now before us should the noble Baroness not agree to reconsider; I hope that she will.

Baroness Seear

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 236G to 236K not moved.]

Baroness David had given notice of her intention to move Amendment No. 236L: Page 104, line 22, at end insert— ("(iii) after the definition of "senior pupil" there shall be inserted "except that where a person has been assessed as having special educational needs, it means a person who has not attained the age of twenty-six years; and it includes any person who is newly disabled for three years from the date on which they re-enter education after they became disabled"; and").

The noble Baroness said: I believe that this amendment was part of the group attached to an amendment the noble Lady, Lady Kinloss, moved earlier. It was an amendment the noble Baroness said she would look at again.

[Amendment No. 236L not moved.]

[Amendment No. 236M not moved.]

Clause 104 agreed to.

[Amendment No. 236N not moved.]

Lord Peston moved Amendment No. 236P: After Clause 104, insert the following new clause:

("Purpose of, and duty to provide, higher education.

.—(1) The statutory system of public education shall be organised in four progressive stages to be known as primary education, secondary education, further education, and higher education.

(2) Accordingly the following section (which—

1. (a) re-states the duty of local education authorities in relation to the first three stages;
2. (b) separates that re-statement from the other parts of the section; and
3. (c) provides for the duty of the Secretary of State in relation to the fourth stage);

shall be substituted for section 7 of the 1944 Act—

"Stages and purposes of statutory system of education.

7.—(1) The statutory system of public education shall be organised in four progressive stages to be known as primary education, secondary education, further education, and higher education.

(2) It shall be the duty of the local education authority for every area, so far as their powers extend, to contribute towards the spiritual, moral, mental, and physical development of the community by securing that efficient education throughout the first three stages shall be available to meet the needs of the population of their area.

(3) It shall be the duty of the Secretary of State, so far as his powers extend, to contribute towards the spiritual, moral, mental, and physical development of society by securing that efficient higher education shall be available to meet the needs of the people of England and Wales."

(3) It shall be the duty of the Secretary of State, discharged by him through the Funding Councils established by this Act, to secure adequate facilities for higher education, that is to say, education provided by means of a course of any description mentioned in Schedule 4 to this Act, or by means of any other activity funded in accordance with this Act by the Funding Councils, which—

1. (a) provides instruction in skills;
2. (b) promotes the general powers of the mind;
3. (c) advances knowledge and learning;
4. (d) facilitates adjustment to technological, economic and social change;
5. (e) meets individual needs for personal development;
6. (f) assists in the transmission and maintenance of standards of citizenship.

(4) The higher education referred to in subsection (3) above includes in particular any of the following—

1. (a) full-time and part-time academic and vocational education or training; and
2. (b) full-time and part-time social and physical and recreational education or training;

(including, in the case of vocational education or training, continuing education or training for persons already in employment or already engaged in a vocation as well as education or training for entry into any employment or vocation".").

The noble Lord said: Perhaps I may say a few words about this amendment in order to help the Committee to understand its purpose. Although the clause is very long the idea behind it is very simple. There does not seem to be a specific duty in the Bill to provide higher education. Essentially the clause considers education as divided into its normal constituents of primary, secondary, further and higher. It sets out a prima facie notion that LEAs are particularly to have regard to the first three stages. In particular it makes it explicit that the duty of the Secretary of State is to ensure that efficient higher education will be made available.

Despite its length the purpose of the clause is simply to ask the Minister to let the Committee have a clearer idea of the Government's thinking on this matter. I beg to move.

8.45 p.m.

Baroness Hooper

The proposed new clause seems to have two main purposes. Firstly, it provides a philosophical exposition of the place and purpose of higher education and, second, it places a duty on the Secretary of State to secure the provision of efficient higher education to meet the needs of the people of England and Wales.

Let us take these points in order. It really is not the function of this part of the Bill to provide an exposition of the nature of higher education. The Bill already does all that needs to be done to establish the ground rules for the provision of higher education. It provides a workable statement of what courses constitute higher education—namely, those courses of a standard higher than A-level. And it states the roles of those involved in providing higher education including the PCFC, the new higher education corporations, the UFC and LEAs.

The Government readily accept that the definition of higher education contained in Schedule 4 does not make the blood race. But it is entirely adequate to meet the need. For the purposes of the PCFC and the power of LEAs to secure the provision of higher education we need to know what sorts of provision are to be considered as higher education. We have no quarrel with the new clause's statement of the purposes of higher education as such: much of it is drawn from a passage in the Robbins Report which we endorsed last year in the higher education White Paper. But it is the stuff of policy statements rather than of law. The purposes of higher education stated in the new clause are demonstrably not specific to higher education. They could perfectly well apply to any other sector of education, and therefore do not perform any useful function in law.

As to the proposal to place a duty on the Secretary of State to secure the provision of efficient higher education to meet the needs of the people of England and Wales, this is unnecessary. The Secretary of State already has a duty under Section 1 of the 1944 Act to promote the education of the people of England and Wales and the progressive development of institutions devoted to that purpose. That duty encompasses higher education as much as any other sector.

In any case, the Government have already made clear their policies in this area. The Government have explicitly committed themselves to the principle that courses of higher education should be available to all those who have the necessary intellectual competence, motivation and maturity to benefit from them and who wish to do so. In the White Paper issued last year the Government emphasised the need to widen access to higher education.

This new clause would add nothing, and I hope it will be withdrawn.

Lord Peston

While thanking the noble Baroness for her answer there are two points I should like to make. My reading of the 1944 Act is that it refers to three stages of education—primary, secondary and further. As a matter of the history of thought, I am not sure that one used the term "higher education" very much at that time. It may be a more recent term. I think there is a slight difference between what one has in mind at this time and what existed in 1944.

My main point is not entirely philosophical. I do not see the Bill as enabling the Secretary of State to promote or to see that higher education is promoted to meet needs. I think that it is somehow taken for granted. No one has thought as to whether we ought to make it explicit. If, for example, one wanted to have a debate as to whether we have enough higher education in this country or the wrong sort of higher education, one would want to see that debate lead to action by the Secretary of State through the funding councils or by various other means. It is by no means obvious from the Bill that anything exists that would enable that to take place. I think that we take it for granted that it can happen.

There is a vagueness about the Bill so far as concerns the provision of higher education. I do not think my proposal would be detrimental. I think it would be helpful, except of course that the moment the Secretary of State was given such a duty and it was made explicit it would give many of us a basis for complaining strongly that he was not meeting his duty. We should like to have a basis for saying that we need much more and better higher education. So we should like the Secretary of State to have that explicit duty as a path to action.

My intention is to clarify the Bill. I have no intention of doing other than withdraw the amendment, but I should have liked a slightly more sympathique reply, especially as we are all committed to the enormous importance of education in general and certainly of higher education in the future of our country. That is certainly the case for taking the 21st century view. It would do nothing but good to have that kind of explicit statement in this reform Bill.

The Lord Bishop of Manchester

When making her response to those comments would the Minister confirm, first, that the Government's view is in sympathy in general with what is stated in this amendment to be the aims of higher education in these items in subsection (10)(a) to (h); secondly, that those aims do not appear elsewhere in the Bill in relation to the purposes of higher education; and, thirdly, so far as concerns the 1944 Act there is no specific reference to those aims in connection with higher education? It seems to me that those who moved this amendment have made their case for something along those lines as a guide for the aims of higher education.

Baroness Hooper

We believe that in the arrangements made in the Bill we are establishing some new and revised structures in order to deliver higher education more efficiently and to a wider group of people. We believe that to be the essential aim of the Bill. I can certainly confirm that we are sympathetic to the aims but do not feel it appropriate to state them in this way on the face of the Bill. There are many way in which one can widen access and improve the means of ensuring that people enjoy higher education and they do not necessarily all have to be written into a Bill of this kind.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

Clauses 105 and 106 agreed to.

Clause 107 [Provisions supplementary to sections 105 and 106]:

Baroness Cox moved Amendment No. 237: Page 106, line 13, at end insert— ("( ) In relation to the initial appointment to the Board of Governors of the Corporation to take effect on vesting day, the Secretary of State shall have the same powers as provided in paragraph 5 of Schedule 5 below.").

The noble Baroness said: I have been asked by my noble friend Lord Onslow to move this amendment on his behalf as unfortunately he has been delayed abroad. For the convenience of the Committee I should point out that there is a printing error in the Marshalled List. The amendment should refer to page 133, line 16. It should therefore be placed in the Marshalled List in a position which refers to Clause 136. With the leave of the Committee, perhaps I may have permission to deal with it at this point in time. It is only a very brief and probing amendment.

The amendment refers to the unique position of the ILEA polytechnics. Since these are already corporate bodies the desirable reform of their governing bodies is not achieved by other provisions in the Bill which will ensure smaller and more effective governing bodies for polytechnics outside London. It would therefore perhaps be particularly unfortunate if the Secretary of State lacked the powers to approve the initial appointment of a board of governors of ILEA polytechnics after they leave the control of the local authority. Surely they deserve assurances that their governing bodies will be revised in line with the revisions promised to their other colleagues elsewhere.

This amendment proposes that Clause 136 should he revised to give to the Secretary of State the same powers that are provided for him in paragraph 5 of Schedule 5 to the Bill; namely, that he should be the appointing authority in relation to the appointment of the first members of an ILEA corporation and that he shall secure that at least half of all the members of the corporation as first constituted are independent members. Basically I understand that this has given comparability to the ILEA polytechnics as to other polytechnics outside that authority. On behalf of my noble friend, I beg to move.

The Lord Chancellor (Lord Mackay of Clashfern)

On the assumption that one alters the wording to "Page 133, line 16" the position is that the concern expressed by my noble friend on behalf of the noble Earl, Lord Onslow, relates specifically to the position of the inner London polytechnics. The Government accept that some changes will be needed to the composition of their governing bodies and their articles of government following their transfer to the PCFC sector. Once Clause 136 of the Bill has passed into law it will allow the Secretary of State to make amendments. Officials have written to the institutions about this matter.

With those assurances, perhaps my noble friend will feel able to withdraw the amendment. In other words, we feel that although the powers that are to be used in this connection are not precisely the ones to which the amendment refers, the point is covered otherwise.

Baroness Cox

I am most grateful to my noble and learned friend the Lord Chancellor for those assurances, and with gratitude I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 107 agreed to.

Schedule 5 [The higher education corporations]:

[Amendment No. 238 not moved.]

Baroness Cox moved Amendment No. 238A: Page 186, line 9, leave out ("twelve") and insert ("eight").

The noble Baroness said: In moving Amendment No. 238A I shall speak also, with the leave of the Committee, to Amendments Nos. 239A to 239D, 240A to 240C and 242A to 242F, because they all deal with proposals for strengthening the future governance of the polytechnics and larger colleges of higher education. If I seem a somewhat lone voice in support of the changes that are advocated in these amendments, let me assure the Committee that I am speaking at the behest of many polytechnic directors. I can but hope that the rest of the educational establishment will not lightly disregard the wishes of polytechnic directors, who, after all, are the people who will have to run the new institutions.

It is perhaps worth reminding the Committee that when the non-university sector, as it used to be called, came into being in its present form in 1966 the intention was that it should enjoy parity of esteem with the universities. The polytechnics and colleges, as I am sure the Committee will agree, have earned such esteem. Unfortunately, that is not reflected by representation in this Chamber. Indeed, I think that I may be the only Member on these Benches who has teaching experience in a polytechnic, and I reached only the level of head of department. I believe that the Benches opposite may be better stocked with Members who have experience of the public sector of higher education and I hope that they will support the concerns of polytechnic directors.

At this stage I should perhaps stress that academic freedom, in which I believe passionately, will in no way be compromised by these amendments. Academic quality and freedom must remain the exclusive province of academic boards; overall management and planning should belong to directors and governing bodies.

These amendments deal with the composition of the future governing bodies. Their main effect is to be found in Amendments Nos. 239C and 239D. Paragraph 3(2)(a) of Schedule 5 to the Bill as drafted envisages up to 13 members who must have experience of and have shown capacity in industrial, commercial or employment matters or the practice of any profession. Amendment No. 239C requires the capacities shown to have been managerial. In view of all the new responsibilities being given to directors and governing bodies under Clause 108 of this Bill, I feel sure that the directors are right in their wish to have strong managerial experience in their governing bodies. Amendment No. 239D is designed to enhance and streamline further the decision-making competence of governing bodies.

The basic effect of these two amendments is to produce a new paragraph 4 of Schedule 5 which would require the appointed members to choose up to four further members, at least one of whom would have to have educational experience. The appointed members would thus be free to invite representatives of local authorities, academics and students to join them on the governing body if they so wish. This system would have the added advantage that local authority members most suitable to the tasks set by the Government could be appointed by governing bodies, whereas under the present proposals they might well be excluded.

Perhaps I may just remind the Committee that the Government have laid great emphasis on the wide powers to be exercised by the boards of governors of these corporations, as is evidenced in Clause 108. In addition to their responsibilities for the provision of higher and further education and the conduct of research and other such activities, these institutions are to become more entrepreneurial, to own their own buildings, estates and other assets, employ their own staff, supply goods and services, acquire and dispose of property, borrow and invest and, in short, operate more nearly like any other company.

I also remind the Committee that the Government themselves have emphasised the enhanced role to be undertaken in the governance of these institutions by those of wide experience of industry, commerce and the professions. If the boards of governors are to be effective they must be sufficiently small to be cohesive and so constituted as to undertake the functions that they are expected to discharge. They must not discourage successful and busy people by inappropriate composition and discussion.

Surely it cannot be appropriate for the composition currently envisaged in the Bill to determine matters relating to overall strategy, the employment of staff, the acquisition and disposition of assets, the supply of goods and services, and borrowing and investment. The proposals as they now stand call into question the role of the polytechnic directors themselves as chief executives in these corporations although the Government have made it plain in another place in Standing Committee on 11th February that it is their expressed intention that that is how they are expected to function.

In conclusion, the unease generated by the lack of an apparent rationale for the provisions of governance outlined in Schedule 5 is compounded by the fact that these must be considered in the absence of any firm knowledge of whether the articles of governance referred to in Clause 109 will reflect a clear logic of responsibility and accountability in which decisions can be taken. There is a general concern among polytechnic directors that unless these articles clearly delineate the directors themselves as chief executives responsible to these boards, then the polytechnics will be incapacitated in their ability to achieve the objectives identified for them by government.

My honourable friend the Minister in another place summed up the Government's rather muddled position—as it appears to me—when he argued that the Government have had to make a judgment about whether to opt for an exclusively management-directed governing body or a representative governing body. He confessed that the Government decided on a hybrid of the two.

However, I suggest that a hybrid model is a recipe for confusion. The polytechnic directors have indicated that they need governing bodies that will enable them most effectively to fulfil the demanding responsibilities laid upon them. I have been asked to represent their concerns to Members of the Committee. I sincerely hope that the Committee will consider them sympathetically. I beg to move.

The Lord Chancellor

The Government's consultations on the higher education White Paper produced two different views on the size and composition of the boards of governors for the higher education corporations. Some argued, as my noble friend has just done, that the proposals in the Bill did not go far enough to limit the size of these boards. Others argued that these plans went too far: that the board should be as fully representative of staff, students and other bodies as many governing bodies now are.

In the new situation, differing from the present, the boards will be responsible for the overall character, strategy and finance of the institutions. The Government fully recognise that the boards will need to include a strong voice for people from business, industry and the professions to ensure that the institutions are responsive to the wider world and in particular to the needs of employers and to help foster a spirit of enterprise in the institutions. But we also recognise that there is a long, and generally useful, tradition of representative involvement in the government of academic bodies. We think it desirable that staff and students should be party to decisions which affect them. Representation on the board of governors is a means of giving effect to that aim.

My noble friend argues that the representative element unnecessarily inflates the size of the board and—and perhaps this is her particular point—that thereby effective decision-making is hindered. We certainly agree strongly that the new boards need to be smaller than many existing governing bodies. The upper limit of 25 set in the schedule means that they will be. At the same time the schedule permits institutions which wish to have a smaller governing body to go as low as 13 members, including the director or principal.

It is also suggested—and I think that this is implicit in what my noble friend said—that the representative element may well side with the staff against management. That risk is inherent in having students and staff on the board, but equally others have claimed, as one of the strengths of the representative tradition, that it involves staff and students in the management of the institution and often makes them more understanding of, and responsive to, the pressures and opportunities that face management. The case for local authority representation rests on the regional significance of the higher education which these institutions provide and on their role in the local provision of further education.

The approach that we have followed is to give representatives of the staff, the students and the local education authorities a voice on the governing body so that they can be heard. But the director and the independent members will have a clear majority. There is no question of their being overwhelmed.

I think that nobody would deny that there needs to be strong management in the institutions to ensure that they fully meet their potential. The head of the institution must be able to manage. These are really matters for the conduct of the institution and the articles of government. We wish the articles to include a clear statement of the respective roles of the board of governors and the director and to give the director the necessary authority to manage within the overall resposibilities of the board of governors. The Department of Education and Science will shortly be circulating draft model articles for consideration, seeking to give effect to these principles.

I am grateful to my noble friend for stimulating, through this amendment and the related ones, a debate on the membership of higher education corporations. I shall certainly draw what she has said to the attention of my right honourable friend the Secretary of State. However, at the present we remain unpersuaded that it would be right to follow the line that she has proposed. The effectiveness of management is quite clearly recognised, but this is the way in which we hope to effect it. I hope that, with these considerations before her, my noble friend may feel able to withdraw this amendment.

Baroness Seear

I very much want to agree with the Government in wishing to keep the representational element. Colleges are essentially places in which it is the staff who determine whether the colleges will be successfully run and will meet their primary objective, which is to provide good courses and good research. There is a tendency at the present time to overdo the managerial element in the running of colleges and not to recognise sufficiently that unless the staff have a very considerable say on a collegiate basis in the way the institutions are run, those institutions will suffer very severely. I am very glad indeed to hear that the Government intend to keep the representational element for the staff, and for the students. That is essential in the running of the college.

Baroness Cox

Let me say how grateful I am to my noble and learned friend for his clarification of the Government's position. I shall read with great care the details of what has been outlined. I was especially interested in the points relating to the articles, because the articles and the structure must be seen together as a totality. I am also most grateful to him for the assurance that he will draw these matters to the attention of his right honourable friend the Secretary of State. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 239 to 239C not moved.]

Baroness David moved Amendment No. 239CA: Page 186, line 17, at end insert ("or to represent community interests served by the institution").

The noble Baroness said: This amendment tries to widen the representation a little and to make sure that community interests are involved, because the present clauses narrow the representative base of these bodies compared with what goes on at the moment. As these governing bodies will have more responsibilities than the present ones, it seems important that there should be very wide representation on them.

The Bill appears to have failed to acknowledge the important contribution that a broad range of community interests can make, or indeed the valuable experience built up by the present governing bodies over the last 20 years. Governing bodies set up by this Bill must be seen to be at least as accountable as their predecessors if the credibility of the newly independent institutions is to be assured.

A very wide range of educational interests are concerned to achieve increased accountability and community representation on the governing bodies of the higher education corporation. So I hope that the noble and learned Lord will be willing to put in this amendment, because it will give satisfaction to a great number of people. I beg to move.

The Lord Bishop of Manchester

I should like to support this amendment as strongly as I can before the noble and learned Lord replies. It seems to me that as the schedule is drafted at the moment the words: industrial, commercial or employment matters or the practice of any profession", are not wide enough to include the great diversity that we now get in many areas of our country which are served by these great institutions of higher education. I hope very much that the Government will see their way to including this wording.

The Lord Chancellor

The Government's plans as set out in Higher Education: Meeting the Challenge provide for boards of governors to have strong representation from industry, commerce and the professions. We want this to foster effective management in the institutions, to ensure that they are responsive to the needs of employers and to develop a strong enterprise approach in them.

The Bill therefore provides for the boards of governors to have at least half of their members from business, commerce and the like. The inclusion in the independent category of community representatives who do not have strong links in business and so on could detract from this. But there is absolutely no reason why people who have such links should not be representative of the community. I cannot therefore accept this amendment.

That does not mean that we want to exclude community representatives from the boards. It will also be important for the institutions to be responsive to the needs of their local and regional community. Community representatives who do not satisfy the criteria in the Bill for independent members will be able to serve on the boards in one of two main ways: first, as local authority nominees, which is the primary way in which the link with the community is recognised—there is nothing in the Bill that requires local authority nominees to be councillors—and, secondly, as additional nominee members; that is, as co-opted members under the provisions of paragraph 3(2)(c) of the schedule.

So there is no question of community interests being excluded. They are included in that way and of course, as I said, there is an overlap very possibly between the other description of independent persons and the interests of the community. I hope that with these assurances the noble Baroness and the right reverend Prelate may feel that we have catered for the concerns which they have raised.

Baroness Seear

I am sorry, but I do not feel that the Government have catered for this in the way described by the noble and learned Lord. Community interests will not necessarily be represented either through the people who come in under the classification of industrial, commercial or professional or through the local authorities.

Let us take the example of a heavy concentration of ethnic minorities. It is quite likely that they will not be represented through either of the groups about which the noble and learned Lord has told us, but it is highly desirable that they should have a voice on these bodies. There are also other powerful voluntary groups of one kind or another who will with very great advantage need to be represented if a college is to be fully able to respond to local needs and interests.

Lord Taylor of Blackburn

I should like to support that line of thought. In my area there are the Polytechnic of Lancashire and the Polytechnic of Manchester. Within 15 miles of the Polytechnic of Lancashire, based in Preston, is the University of Lancaster. It is good for them to work together and for someone from the university to be on the council of the polytechnic. The same applies to the Polytechnic of Manchester as regards Manchester University in Salford. It is helpful to the local community to have that cross-section working together.

9.15 p.m.

Baroness Blackstone

I am sure that the noble and learned Lord will agree that it is valuable to have a mix of people on governing bodies and committees of that kind. The Government have become somewhat obsessed with representation from industrial and commercial interests. We must remember that many of the students who leave the institutions will be employed by the public sector and not only by the private sector—although many will and I do not doubt that is is desirable that they should be represented on governing bodies. Where in the arrangements is there proper representation of public sector employers as well as the voluntary organisations, the black community and groups of that kind which are equally important and which were mentioned by the noble Baroness, Lady Seear?

Lord Peston

I should also like to add a little more. I assume that these are still education institutions and that academic matters still take first priority. I am most concerned that we seem to have lost sight of that altogether. Having sat as a governor on such bodies I must tell the noble and learned Lord that on the whole business people are pretty useless. They do not understand many of the matters although they try very hard. I should like them to be there to some degree but the weight given to them does not appear to me to be helpful. I find to be most distressing the lack of weight given to the community with people concerned with the highest education and academic standards. I do not believe that these institutions have any hope whatever of prospering if they do not see their first duty as educational and, related to that, the maintenance of the highest of academic standards. I should like to hear a government response that recognises that.

Baroness White

Can the noble and learned Lord enlighten the Committee on the position of those who are members of quangos? I believe that it is now unfashionable to use that term. For example, for some time I had the honour to be chairman of the Land Authority for Wales. It is the only part of the Community Land Act which still stands and is active. Does membership of that body qualify one to be considered to be in either industry or commerce? Strictly speaking one is in neither, yet one is engaged on the most active transactions in development land but from a public point of view. What is the position of someone in such a capacity? As regards the Principality of Wales I could mention at least half a dozen quangos, some of whose members would be highly desirable. However, I am not sure that if the definition is strictly applied one would say that they were either industrialists or in commerce.

Lord Trafford

I should not have risen to speak except for the remark made by the noble Lord, Lord Peston, that business people are so useless. I do not find that acceptable and I disagree with him. Within the field with which they are familiar they are extremely valuable. The major function we are discussing is education. Other bodies are stated as being represented; for example, the professions. I draw to the attention of those proposing the amendment that the Bill states "any profession", which allows for an extremely wide range of people. I am not entirely certain of the definition of a "profession" or whether it can be regarded as any activity that calls itself a "profession". Be that as it may, I find the remarks of the noble Lord, Lord Peston, to be slightly wide of the mark. I do not believe that people who serve in business, commerce or the professions lose sight of the importance of education. Indeed, they are usually most keen upon educational attainments or whatever other skills they are looking for.

Secondly, as regards the point directly related to the amendment, I believe that there is a wide range of choice. It is hard to see how the comments of the noble Baroness, Lady Seear, would not be covered by the scope of: industrial, commercial or employment matters or the practice of any profession".

Lord Peston

I should like to respond to that, rising to the bait, so to speak. I did not say that there should be no business representation. I have had experience of this and I speak as a former academic at least. Business people appear to suffer from three delusions: first, they think that teaching is easy, but it is incredibly hard; secondly, they think that if academics are not confronting students they are doing nothing and are idle; and, thirdly, they have not the faintest idea what academic research and scholarship are about. That is the nature of the problem. They are often very well meaning and can be helpful in a minority of cases. I believe their role in this is excessive and I would rather see less of them than more.

Lord Trafford

I do not wish to turn this into an argument about whether businessmen are educated in one way or another, but I do not accept any one of the three propositions about business people put forward in such general terms by the noble Lord. I too have experience of such bodies and I have not found that. I have found that such people use their expertise, usually fairly sparingly, in areas with which they are familiar.

I have some experience of teaching and I am well aware of prejudice that exists generally in people's minds that if academics are not teaching or in a laboratory—as in my case—they are not doing anything. That is a general proposition and does not apply to businessmen or to the other categories of people described, which is very wide indeed and gives a huge choice.

Lord Annan

I should have thought that the noble Lord, Lord Peston, is right in his experience. He had the remedy in his own hands; namely, to educate the people in what they are meant to do. There is something which troubles me about the wording here. The amendment states: or to represent community interests served by the institution". To include the word "or" means either that you can choose everybody from the community interests or you choose everybody from the commercial, business and industrial interests. If the phrase included the word "and", I could understand an amendment being moved so that one had more people or one had a division and it was laid down how many were this kind and how many were that kind. However, if one has the word "or" it leaves the matter wide open and the purpose of the Government, which was to try to involve business people in this work, falls to the ground.

Baroness David

I should like to jump at that suggestion. I shall withdraw the amendment and bring it back with the word "and" instead of "or".

The Lord Chancellor

In case the noble Baroness has been rather quick in that perhaps I should say that I was taking it that the amendment meant "and" when I addressed it before, which is probably the beneficent construction. As Members of the Committee have heard from the various contri-butions that have been made, there are a great number of competitors for these positions on the board and I doubt whether it would be the most obvious construction that the University of Lancashire would be representing the community in its neighbouring polytechnic. It may well represent the profession or the university educationist in which case it would be on the board anyway.

The community is not a very specific concept. Indeed, the noble Baroness, Lady Seear, made that point when she talked of the ethnic minorities. I can see that it may be highly appropriate in some situations for ethnic minorities to be represented and I would hope that they might be represented among the business people, the industrialists or the professions; or alternatively among those nominated by the local authorities, because, after all, the local authorities are the primary authorities for representing the community as the law recognises it. If all that failed, there is the co-opted membership to use for that purpose. Therefore, there is plenty of scope for proper representation of the community in what we propose.

The contribution of the noble Lord, Lord Peston, is perhaps not directly in support of this amendment, but the recognition of the principle that he was advocating was the essence of the answer which I gave to my noble friend Lady Cox on an earlier amendment. We recognise the importance of the teachers in the institutions and hope that this scheme will develop a strong community of interest in the boards of governors between the teachers and the others.

I believe that in such a strong community of interest the business people will quickly learn the difficulties facing the teachers, and conceivably the teachers might learn the difficulties facing business to the mutual advantage of themselves and the pupils. In the light of this further discussion I hope that the noble Baroness will feel able to withdraw this amendment and possibly consider not coming back with another one.

Baroness David

I shall certainly read what has been said and then I shall decide whether to come back with another amendment. In the meantime, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Earl Cathcart)

In calling Amendment No. 239D I advise the Committee that if it is agreed to I cannot call Amendment No. 240.

[Amendment No. 239D not moved.]

[Amendments Nos. 240 to 240B not moved.]

The Deputy Chairman of Committees

In calling Amendment No. 240C, I advise the Committee that if it is agreed to I cannot call Amendments Nos. 241, 241A, 241B and 242.

[Amendment No. 240C not moved.]

[Amendment No. 241 not moved.]

Baroness David moved Amendment No. 241A: Page 186, line 33, leave out ("one") and insert ("two").

The noble Baroness said: We now come to students. Very many governing bodies have two students at the moment. The body on which I serve has two students and they are extremely valuable members. I hope that the Government will think again and decide not to allow just for one but for two. The National Union of Students feels very strongly about this matter and it has a number of directors of polytechnics and colleges who have given support. At this time of night I shall not read it out, but I have a list of colleges where the principals or directors have supported the idea that two students should remain on the governing body.

In speaking to this amendment—Amendment No. 241B is merely to insert "nominees" instead of "nominee"—at the same time I speak to Amendment No. 242BA, which is linked. In this part of the Bill on the number of additional members that may be appointed, a student is made ineligible. We should like a student still to be eligible as a co-opted or independent member of the board. We hope that the students' case will be accepted by the Government. I beg to move.

Lord Annan

I warmly support the noble Baroness, Lady David. It is absolutely true that students prefer, if they can—the higher and more august the body, the more they wish it—to have one person to support another. I know that in the past there has often been abuse of student participation and representation. On student union bodies the number of sabbatical officers multiplied far further than it should. Nevertheless on this matter I believe that one should have some regard for the feelings of the students—the actual feelings which they have when they enter a room entirely filled with people much older than themselves and much more experienced in business. Very often they have to try to put a case of some complexity. It is much easier if there is a colleague in support. Frequently students feel most strongly that it should not be put—perhaps I may say this to the noble Baroness—simply by a male student and that a female voice ought also to be heard.

Lord Butterworth

I support this amendment very strongly. There is one point I wish to add arising from my experience. It is very difficult for one student when he has to return and face the other students. The communication between the students and the governing body is enormously strengthened at that delicate point if one has two students.

9.30 p.m.

Baroness White

I should like to support the proposition that there should be two students. It is perfectly clear that whoever suggested one student has never had experience of presiding over such meetings. It is essential that there should be more than one person representing the students, and for bodies of this size two would be an appropriate number. It is not only that a student would require moral support in entering the room and support when facing fellow students later on. It is only natural that a student representative would wish to have at least one person with whom he could with propriety discuss possibly confidential matters. That consideration seems not to have entered the mind of whoever drafted this provision. I have had some experience, as have other members of the Committee, of presiding over councils. We know very well that to have a single student shows an absolute lack of practical sense or appreciation.

The Earl of Halsbury

I support those words entirely. Let them hunt in couples. I have known what it is to have to bat single-handed at a board meeting against a group of non-executive directors whose sole director I was. Until I could get a colleague promoted it was jolly hard work surviving those board meetings.

Lord Adrian

I should like to support the amendment. I have just ceased to preside over a small council of the Senate of Cambridge, with 16 members and three students. I found the students enormously valuable and helpful.

Baroness Blackstone

I also have experience in these matters and speak as the head of an institution of the University of London. I should like to refer to one or two points made by the noble Lord, Lord Annan. He said that it would be difficult for a young person to go into a group of much older people, many of whom had more experience in these matters. My institution has many mature students. Even mature students, who perhaps have greater confidence and more experience of speaking in committees, would find it enormously useful to have a colleague so that they could confer together.

Students on these bodies can often make valuable contributions. They have something to add which some of us may not always perceive or understand although we may be sympathetic when we hear about it from the students themselves. Greater representation of students—it should be a minimum of two—in no way makes it more difficult to manage the institution. Indeed, it facilitates the management because it allows for proper discussion in a formal context of issues affecting all members of the institution—staff, those responsible for running the institution and students themselves. I support the amendment.

Lord Rochester

As someone who until recently was the chairman of a university council, I support the amendment. I had thought that it was now normal practice that in higher education institutions there should invariably be two student representa-tives. I certainly found it helpful in my experience and I very much hope that the Government can withdraw from what seems to me a retrograde step in permitting at this stage only one representative.

The Lord Chancellor

That the student body may have an important contribution to make is recognised by the fact that we have made the proposal to have a student. It is said that a single student will have a difficulty in representing the student body among a great group of the more mature. All Members of the Committee who have spoken in support of the amendment will come into the latter category. All Members of the Committee who have spoken thus far with experience of being in such bodies come with an appreciation of the position of the single student. Surely that will give the student a fine atmosphere in which to approach the body. The mature people will understand that the student is all alone and will therefore be most attentive to what he or she has to say, giving him or her perhaps an even better chance to put a point of view than if the student representatives were hunting in pairs and relied upon one another for strength. I am sure that the result will be that the student will have much more support from the mature people than if the students are seen as a separate group—two together, requiring to be together for strength—and thus separated from the others; that is, from the mature. Surely it is just as good to have the representation arranged in this way. I do not think that it necessarily bespeaks inexperience; it may bespeak more confidence in the single student than Members of the Committee have expressed.

Baroness Lockwood

Is not the noble and learned Lord overlooking one simple fact—I refer to the majority of Members of the Committee who have spoken this evening—which is that such people have had many years in which to gain their experience? When one talks about student representation one is in an entirely different situation. Students remain in the college for a period in the region of three years; they are not likely to be appointed during their first year, which means that even if they come in during their second year they will probably have only two years during which they can represent the students in the institution. That will not give them much opportunity to gain confidence. The additional representation would help one to support the other.

If one looks at most of the student representation in universities and so on, one will find that one student is senior to the other; in other words, a student comes on the board and serves for possibly two years and then there is an overlap with the student who follows. Therefore, between them, they are able to have more accumulated experience that if there was just one representative.

Lord Butterworth

If one looks at the charter and statutes of almost every university in the country, one will find that there are at least two student representatives, never just one. I think experience has shown that that is much the best and most efficient way of having student representation.

Baroness Seear

I think the noble and learned Lord has concentrated too much on the issue of the confidence of the student coming into the group of mature people. He may not be over impressed by the mature people—in fact, students were not always so in my experience. However, the much more important point is when a student is party to a board decision which is an unpopular one. That is a most testing situation for the student because he has to return to his constituents and say, "Look, we agreed to this. We know you do not like it, but this is why we did it." That is why one wants them there; that is their great value. However, to ask one person by himself, or herself, to go back alone and do that is asking a great deal. I should also point out to the noble and learned Lord—this he will not be able to disagree with—that, although I am not in favour of quotas, if you only have one, you cannot have a man and a woman.

Lord Grimond

When I was Rector of the University of Aberdeen I appointed a student as my assessor. He was the first student to serve on any court of any university in this country. I am bound to say that although he was alone he did very well indeed. He was a postgraduate student but he was not very old.

I am also bound to say that the university represented to me that he would have a most difficult time alone on the court. Of course I had no power to appoint more than one student but the university said it felt that I was putting him or her—I tried to find a girl but failed to do so—into a difficult position, as he or she would be the sole younger person on the court. Nevertheless, this student did extremely well and I think he made a great contribution to the court.

I should also say that the university itself was pretty chary about his appointment and indeed made efforts to have certain business reserved. At least, not they but others further south did, and I had to threaten them with proceedings in the Court of Session should they dare to do any such thing.

The Lord Chancellor

I agree with the noble Baroness, Lady Seear, that in my first response I concentrated on that aspect of the matter because I understood it to be the main aspect being concentrated upon in support of the amendment.

As to communication with the students, it is plain that the governing bodies will need to maintain good communications with their students. Having a student on the governing body is one part, but only one part, of that system. Other liaison and communication channels are also important. To have a good system of communication it does not appear to me to be necessary to have more than one student.

I am obliged to the noble Lord, Lord Grimond, for reminding me of his experience as Rector of Aberdeen. When he suggested one student, he was faced with the same kind of reaction we have heard from the Committee. He had power only to have one. He had one. And one was able to make a good contribution, perhaps better than if there had been two.

The experiences about which we are hearing help to dispel the difficulties, based on experience somewhat similar to that of Aberdeen University, that the Committee would at first sight envisage.

Baroness White

Surely the noble and learned Lord recognises that a rector is in a different position to some of us who have had to preside over councils. I ask the noble and learned Lord to take into account that everyone who has so far spoken on this amendment has had experience he clearly has not had. Had he had it, I am certain that he would side with the rest of us who appreciate that one needs to have two students. Apparently there is no provision for even an alternate. It is true that one can have other forms of communication with students; but it is invaluable that the student representatives should have heard arguments for policy which may be unpalatable to students and which they will have to defend before the student organisation.

In my experience most student representatives do not lack a certain confidence when they attend council or court meetings. But they may well lack confidence when facing their own constituency—the student members—in difficult circumstances. As I have said before, it is invaluable to have someone with whom one can discuss these matters independently and in confidence. I must ask the noble and learned Lord to pay some attention to those on all sides of the Committee who have had years of experience in this matter. The niggle of saying we must have a single student representative when all our experience tells us that two are better than one is entirely unconvincing. I hope that my noble friend has no intention of withdrawing the amendment.

Lord Sherfield

I too have had a great deal of experience in this matter. I entirely support what has been said by the various representatives of the universities.

Lord Annan

In view of the various expressions of opinion we have heard in the Committee and without giving an inch to those who have expressed doubts, will the noble and learned Lord nevertheless give an assurance that he will discuss the matter with his right honourable friend the Secretary of State?

Baroness David

I am disappointed in the noble and learned Lord. I thought that he had more imagination. Not one voice has been raised in his support. If he does not decide to take this matter back and say that he will agree to two representatives we shall have to divide the Committee. I am sorry to do that, but it is an important matter.

The Lord Chancellor

I am not sure what part the quality of imagination will play at this juncture.

Baroness White

You are lacking in experience.

The Lord Chancellor

I could make some reference to experience but I do not propose to do so. However I shall point out the experience that has already been referred to by the noble Lord, Lord Grimond. He has told us, as I understand the position, that, as Rector of the University of Aberdeen, he had the right to appoint one person as his assessor to be a member of the university court. He did that. The result was that there was in this distinguished body, the university court of the University of Aberdeen, during his tenure of office as rector, one student and one student only. During that time this one student was able to make an excellent contribution. That is a very important fact. So far as I know, it is the only instance which has been given of a single student, on his or her own, being in a governing body of this kind. So the only really important experience on this matter which we have had given to us in detail tonight is such that the noble Lord has given us the best possible example.

9.45 p.m.

Lord Grimond

Perhaps the noble and learned Lord the Lord Chancellor will forgive me for intervening. I am indebted to him. I shall make no calls upon his imagination, for which I have the highest regard.

I was intending to say that all those with much more experience in university government than I had at Aberdeen told me that a single student would have a very difficult time. Those people knew much more about it than I did. I was safeguarding the reputation of my wretched assessor, who is still around, because I do not in the least want to criticise him. I should have appointed two, could I have done so, but considering that he was the sole representative of the students on that body I think he did extremely well.

I wish to make quite clear that if I could have appointed two, I should certainly have done so. Everybody with experience in the university said that to appoint one single student to a body of that sort was unfair to the student. If we now have the opportunity of writing into the Bill that we have two students instead of one, I should be in favour of doing that.

Baroness Carnegy of Lour

I think that there is a need for imagination here, with the greatest respect to my noble and learned friend. This is not the normal discussion about representation that we have had so often in this Chamber where people are trying to say something else when talking about representation. What we are talking about is the educational process that goes on when students represent the student body on the governing body; what all the students learn from the to-ing and fro-ing between the governing body and the students; and what happens as a result in the government of the institution. This is all of extreme importance. Many of us here have experienced it.

People learn from making representations together. Sometimes one is not there, as the noble Baroness, Lady Lockwood, said; sometimes one is senior to the other; the junior one is learning from the other and it makes for an overlap of representation. There are very many reasons why it is better. Quite honestly, I think it is extraordinary for the Government to resist this so strongly. It is not pro-student or anti-student or anything like that; it is just about the educational process in the institution.

Lord Perry of Walton

Perhaps I may say that the rector's assessor is responsible for reporting back only to the rector, not to the student body. That puts him in a totally different position from student representatives appointed by the student body.

Lord Trafford

Perhaps I may make a point to the Committee. Every Member who has spoken has said that the view is unanimous, but it is not unanimous. I for one also have considerable experience of this over 20 years or more. I believe that we are making a mountain out of a molehill, because my attitude would be slightly different. It would be: who is the student representing the students? We have had good ones, when we only needed one and that one has made a tremendous mark. We have had two when the two were good or the two were bad. Therefore it has been extremely variable. It seems to me that if we are in this predicament where there is any slight division of opinion my noble and learned friend might consider discussing the matter with the Secretary of State to see whether it is critical for the Bill.

My own experience is that the really important factor which was brought out by both comments of the noble Lord, Lord Grimond, is: what is the quality of the student? It would not be his representation in the court, the council or the governing body that would worry me, but it might be the point made by my noble friend and I think by the noble Baroness, Lady Seear, that he would have problems in representing the views taken. In my experience, my own students always get round this by constantly abstaining or voting on the opposite side, knowing that they would have no such problem with their own constituencies.

Nonetheless, I am still convinced that it is the quality of the student which cannot be guaranteed. I wonder whether my noble and learned friend might consider discussing the matter with the Secretary of State to ascertain whether it is so important and critical.

Lord Harvington

My noble and learned friend the Lord Chancellor has heard all the views which have been brought forward. There has been no one at all to support the Government in the question of one or two students. My noble and learned friend should tell us what is the supreme advantage of going against what seems to be the general opinion of the Committee in having two students rather than one. What is so sacrosanct about it? Is not this just an instance when the Government in their generosity could see the wish generally of the Committee and give way? This is just the type of occasion where a government should give way unless they are prepared to say why one student is better than two when everyone around the Chamber has been saying the reverse.

The Lord Chancellor

We have had a very interesting debate and it would only be fair for me to draw the attention of my right honourable friend to all that has been said, and perhaps when we come back on Report I shall be able to answer the question that my noble friend has just put to me.

Baroness David

If I may say so, with that slightly ungracious—

The Lord Chancellor

It was not intended to be ungracious.

Baroness David

It took a long time to drag that reply out. But having dragged it out, obviously I must withdraw the amendment. But we are very serious about this. I hope that the noble and learned Lord will speak quite firmly to his right honourable friend. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 241B to 242A not moved.]

Baroness Hooper moved Amendment No. 242AA: Page 186, line 50, after ("in") insert ("the provision of).

The noble Baroness said: This is purely a drafting amendment. I beg to move.

On Question, amendment agreed to.

The Deputy Chairman of Committees

In calling Amendment No. 242B I should say that if it is agreed I cannot call Amendment No. 242BA.

[Amendments Nos. 242B to 242E not moved.]

Baroness David moved Amendment No. 242EA: Page 188, line 8, at end insert— ("(5) The broad balance of membership on the corporation established in sections 3 and 4 shall be continued in subsequent appointments to the corporation.").

The noble Baroness said: We just want to make clear that we wish to keep the breadth of interests on the governing body that there are now and that this breadth and the numbers should be maintained. I beg to move.

The Lord Chancellor

The polytechnics and colleges will be independent statutory corporations. The Bill therefore deliberately allows the boards of governors to amend their subsequent composition within the broad constraints of the legislation. It is highly possible that something that might be called the broad balance may continue but it does not appear right to put any limitation on the boards' independence to require them always to maintain the initial balance established by the Secretary of State. Furthermore circumstances may alter in the future and it may not be appropriate to retain the initial balance in all changes of circumstance. I hope that the noble Baroness may feel able to withdraw this amendment.

Baroness David

I shall think about what has been said, but in the meantime I shall withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 242F not moved.]

Baroness Hooper moved Amendment No. 242FB: Page 188, line 20, at beginning insert ("Subject to the following provisions of this paragraph,").

The noble Baroness said: In speaking to this amendment, I shall speak also to Amendments Nos. 243A and 247A. These amendments deal with the upper age limit for governors of the new higher education corporations which are to be established under the Bill. They fulfil a commitment made in another place. I beg to move.

Lord Graham of Edmonton

It was agreed that Amendment No. 243 standing in my name on the Marshalled List would be taken with this group of amendments. What the noble Baroness has said will be much appreciated. It covers substantially the matter covered by my amendment.

On Question, amendment agreed to.

[Amendment No. 243 not moved.]

Baroness Hooper moved Amendment no. 243A

Page 188, line 21, at end insert— ("(1A) A person over the age of seventy shall not by virtue of sub-paragraph (1) above be disqualified for appointment as a member of the corporation where—

1. (a) the appointing authority in relation to the appointment is the Secretary of State; or
2. (b) the appointing authority in relation to the appointment determine to make the appointment by a vote representing an absolute majority of all the members of that authority (whether or not taking part in the vote.").

The noble Baroness said: I beg to move the amendment.

Baroness David

I am glad to see that a vote representing an absolute majority of all the members is now accepted by the Government. That seemed rather unlikely the other day.

On Question, amendment agreed to.

Baroness Darcy (de Knayth) moved Amendment No. 244: Page 188, leave out line 31.

The noble Baroness said: I spoke to Amendments Nos. 244 and 245 when I moved their twins in Schedule 1. I was delighted when the Minister accepted them. Since then the Minister has pointed out to me two places in Schedules 6 and 9 where the unacceptable and dubious wording also occurs. I shall therefore be moving Amendments Nos. 274ADA and 274ADB in Schedule 6 and Amendments Nos. 276BA and 276BB in Schedule 9 when the time comes. Perhaps I may thank the Minister for bringing those clones to my attention. I beg to move.

The Lord Chancellor

The Government are very happy to accept the amendment.

On Question, amendment agreed to.

Baroness Darcy (de Knayth) moved Amendment No. 245: Page 188, line 32, leave out ("otherwise").

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 245A: Page 189, line 21, at end insert—

("Accounts

18.—(1) It shall be the duty of each corporation—

1. (a) to keep proper accounts and proper records in relation to the accounts; and
2. (b) to prepare in respect of each financial year of the corporation a statement of accounts.

(2) The statement shall—

1. (a) give a true and fair account of the state of the corporation's affairs at the end of the financial year and of the corporation's income and expenditure in the financial year; and
2. (b) comply with any directions given by the Polytechnics and Colleges Funding Council as to the information to be contained in the statement, the manner in which the information is to be presented or the methods and principles according to which the statement is to be prepared.

(3) The accounts (including any statement prepared under this paragraph) shall be audited by persons appointed in respect of each financial year by the corporation.

(4) The corporation shall consult, and take into account any advice given by, the Audit Commission for Local Authorities in England and Wales before appointing any auditor under sub-paragraph (3) above in respect of their first financial year.

(5) No person shall be qualified to be appointed auditor under that sub-paragraph unless he is—

1. (a) a member of a body of accountants established in the United Kingdom and for the time being recognised for the purposes of section 389(1)(a) of the Companies Act 1985; or
2. (b) a member of the Chartered Institute of Public Finance and Accountancy;

but a firm may be so appointed if each of its members is qualified to be so appointed.

(6) In this paragraph, in relation to a corporation— the first financial year" means the period commencing with the date on which the corporation is established and ending with the second 31st March following that date; and financial year" means that period and each successive period of twelve months.

Efficiency studies

19.—(1) The Polytechnics and Colleges Funding Council may arrange for the promotion of carrying out by any person of studies designed to improve economy, efficiency and effectiveness in the management or operations of a corporation.

(2) A person promoting or carrying out such studies at the request of the Council may require the corporation concerned—

1. (a) to furnish the person, or any person authorised by him, with such information; and
2. (b) to make available to him, or any person so authorised, for inspection their accounts and such other documents;

as the person may reasonably require for that purpose.").

The noble Baroness said: This amendment makes generally common form provisions requiring the new statutory higher education corporations to prepare accounts and have them audited. It is right for that to be a requirement. The amendment puts the corporations on all fours with universities, which are required to appoint auditors under the terms of their statutes, and with the polytechnics and colleges, which are companies limited by guarantee and which are subject to annual accounting and auditing provisions of the Companies Acts.

Perhaps I may draw the attention of the Committee to two matters. First, the requirement in paragraph 18(2)(b) provides that the institutions should comply with PCFC directions as to the format of the accounts. Secondly, there is a provision that institutions must seek the advice of the Audit Commission on the appointment of their first external auditors. Both requirements were foreshadowed in the consultative document of the Department of Education, Accounting and Auditing in Higher Education, published in October 1987. They form part of the general policy of the Government and of the heads of the institutions that accounting and auditing should be placed on a firm footing at the outset of the new arrangements. I commend the amendments to the Committee.

On Question, amendment agreed to.

Schedule 5, as amended, agreed to.

Clause 108 [Powers of a higher education corporation]:

Baroness Hooper moved Amendment No. 245B: Page 106, line 18, at end insert ("and").

The noble Baroness said: In speaking to Amendment No. 245B, I shall speak also to Amendments Nos. 245C, 246A, 246B, 246C, 250ZC, 281DB and 284AA.

The Bill declares that the higher education corporations and the grant-maintained schools "in so far as they are charities are exempt charities". These amendments, which have been prepared in consultation with the Charity Commission, are essentially technical but seek to put this on a more secure footing. They provide that the higher education corporations and any successor companies established to undertake their responsibilities shall have exclusively charitable objects. They declare that the higher education corporations, the successor companies and, for consistency, the grant-maintained schools are exempt charities. They also simplify the higher education corporations' powers to establish subsidiary companies without substantially affecting the continued operation of the companies established under the Further Education Act 1985. I beg to move.

10 p.m.

Baroness David

I find it rather surprising that the Government have had to bring forward five amendments to the clause on the powers of higher education corporations. It shows that this provision was not very well thought out in the first place.

I wonder whether the set of amendments provides a higher education corporation with more powers or less powers to carry out functions connected with the provision of education and any other associated activities. Has the Minister issued any guidance on the setting up of higher education corporations or is that still to come?

Baroness Hooper

These amendments do not increase or decrease the powers of higher education corporations. They are essentially intended to clarify and simplify the provisions in the Bill. As yet we have not issued any draft guidance on this matter.

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 245C: Page 106, line 21, leave out from ("fit") to end of line 22.

On Question, amendment agreed to.

Baroness Darcy (de Knayth) moved Amendment No. 246: Page 106, line 22, at end insert— ("In exercising powers under this subsection the higher education corporation shall have due regard for meeting the needs of disabled students with special educational needs.").

The noble Baroness said: This amendment would spell out explicitly in the Bill that higher education corporations have responsibilities to students with special educational needs. That seems sensible at a time when people are being made to consider cost- effectiveness. Over the past few years there has been a movement to much wider choice of accessible colleges and courses for students with a disability or learning difficulty. There is, however, some evidence to suggest that this progress has come to a stop. The amendment would help to protect the interests of future students with special needs. I hope that the Minister will look kindly upon it. I beg to move.

The Lord Chancellor

I am grateful to the noble Baroness for drawing attention to the provision in higher education for the special educational needs of disabled students. Generally speaking, special courses for the disabled are the province of the schools and the further education colleges. Disabled students entering higher education study alongside their able-bodied peers but they may need special facilities to gain access to buildings or aids to study. I pay tribute to those disabled students whose determination to overcome handicap wins them places in higher education and to the institutions which provide for them.

The purpose of Clause 108(1) is to confer on the higher education corporations broad powers to provide further and higher education. We should expect the corporations as responsible independent bodies to have regard to a wide variety of considerations in making that provision. The needs of disabled students should certainly be one. We have recently appointed the formation committees for most of these corporations. I am sure that they will read with interest what the noble Baroness has said. However, I ask the Committee to reflect on the wisdom of singling out one consideration among many for expression in a statutory duty. It is not hard to conceive of other kinds of special needs which would also have to be mentioned for the sake of balance if we were to go down that path.

A major issue for disabled students in higher education is access to buildings and facilities. We do not need this amendment to induce the corporations to give attention to that because paragraph 62 of Schedule 10 to the Bill applies Section 8 of the Chronically Sick and Disabled Persons Act 1970 to all institutions in the PCFC funding sector.

The provision of education in the broad sense is incumbent on those institutions. The special needs of disabled persons in respect of that particular type of education is not so much in the character of the education itself, which would be the same as for their peers, but in the provision of access and related facilities and we have dealt with that specifically in paragraph 62 of Schedule 10 to the Bill. I hope that with that explanation the noble Baroness will feel able to withdraw the amendment.

Lord McCarthy

I wonder whether the noble and learned Lord could explain the Government's policy on this matter. Quite recently on the Employment Bill the noble Lord, Lord Basnett, put down an almost identical amendment dealing with training, and the Government accepted it.

Lord Hylton

Before the noble and learned Lord replies, I wonder whether he is perhaps taking too narrow a view of the thrust of this amendment, which, to my mind, is not exclusively concerned with access to places of education, ramps and suchlike. It is equally and perhaps even more concerned with the special educational needs of handicapped or disabled people, which is a further question.

Lord Winstanley

The noble and learned Lord's words appeared to suggest that he regarded the present position in universities and other colleges of higher education as regards the provision of facilities for disabled students as entirely satisfactory. I have to tell him frankly that such is not the case. It is patchy and varies. I have studied the provisions in various universities. In some of them they are truly excellent, in the main because those universities have realised that in future they may be short of students because of the demographic changes which are expected to come along. They have found that many of the disabled students are extremely good students who are very successful. In their own interests many universities have gone to great lengths to provide access in the way referred to by the noble and learned Lord.

However, I have studied other universities which have not made that kind of progress. I rise merely to say that the noble and learned Lord appeared to suggest that the present situation was satisfactory. I say that it is not. It would be satisfactory if all establishments raised their standards to the standards of the highest. It would cease to be satisfactory if those with high standards now came down to the standards of the lowest.

The Lord Chancellor

I sought to deal with the point made by the noble Lord, Lord Hylton, and I think that my comments also dealt with the point made by the noble Lord, Lord McCarthy. Special courses for the disabled are the province of the schools and further education colleges. That is the general position.

So far as higher education is concerned, the real need is in relation to access and the like. I do not mean to suggest that everything is perfect, but we have made the appropriate statutory provisions in relation to that matter in paragraph 62 of Schedule 10 to the Bill. Therefore I venture to suggest to the Committee that the Government's policy is consistent in this matter and that the appropriate provisions have been made in that connection.

Baroness Darcy (de Knayth)

I thank the noble and learned Lord for his reply, particularly in regard to access. I also thank all Members of the Committee who have supported me on this issue. I am not totally convinced by the noble and learned Lord's explanation that we do not need this amendment in the Bill. However, I shall not make a fuss about it at this time of the night. I shall read carefully all that he has said and think a little; perhaps he too will go away, think a little and see whether he can meet us a little of the way. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hooper moved Amendment No. 246A: Page 107, line 1, leave out paragraph (f) and insert— ("(f) to form or take part in forming a body corporate for carrying on any such activities,").

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 246B: Page 107, line 17, leave out from beginning to ("and") in line 20.

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 246C: Page 107, line 27, leave out subsections (4) to (7).

On Question, amendment agreed to.

[Amendment No. 247 not moved.]

Clause 108, as amended, agreed to.

Clause 109 [Articles of government]:

Baroness Hooper moved Amendment No. 247A: Page 108, line 22, leave out ("(including") and insert ("and the procedure in relation to the appointment of members of the corporation (including in either case").

On Question, amendment agreed to.

The Deputy Chairman of Committees

There is a printing error in Amendment No. 247B; the last "and" should be omitted.

Baroness Hooper moved Amendment No. 247B: Page 108, line 26, leave out paragraphs (b) and (c) and insert— ("(b) procedures for the admission, suspension and expulsion of students").

On Question, amendment agreed to.

[Amendments Nos. 248 and 249 not moved.]

Baroness Hooper moved Amendment No. 249A: Page 108, line 30, at end insert— ("(3A) The articles of government may also make provision authorising the board of governors to make rules or bye-laws for the government and conduct of the institution, including in particular rules or bye-laws with respect to—

1. (a) the conduct of students and staff or either of them; and
2. (b) any such procedures as are mentioned in subsection (3)(a) or (b) above.").

The noble Baroness said: Perhaps I may also speak to Amendments Nos. 249B and 249C. These are purely drafting amendments. I beg to move.

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 249B: Page 108, line 39, at beginning insert ("to secure that").

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 249C: Page 108, line 40, at end insert ("are amended by the board of governors,").

On Question, amendment agreed to.

Clause 109, as amended, agreed to.

Clause 110 [Transfer of property, etc. to higher education corporations]:

Baroness Cox moved Amendment No. 250: Page 109, line 24, at end insert— ("( ) Any property transferred under subsection (3) above shall be in reasonable structural condition suitable for occupation by the Higher Education Corporation. If the property transferred is not in such reasonable structural condition, the transferor shall undertake to put it in such condition within a reasonable time of the date of the transfer. Any dispute between the transferor and the Higher Education Corporation shall be referred for resolution to the Education Assets Board.").

The noble Baroness said: My noble friend Lord Onslow has asked me to move this amendment on his behalf.

Not all local authorities have been the most diligent of housekeepers in maintaining the polytechnic buildings for which they were responsible. Billions of pounds of taxpayers' money are invested in these buildings and many have been allowed to deteriorate into an alarming state of disrepair. Perhaps nowhere is this more acute than in inner London. It is suggested that it would be wholly reasonable to expect the authority to hand over the buildings in a state of good order, fit for the educational purposes for which they are to be used. The higher education corporations would not then be burdened with huge bills for repairs and maintenance. Nor would the new funding council be expected to take on that burden which properly belongs to the local education authority as previous and often long-term owners of the buildings. This amendment is therefore designed to ensure, with proper safeguards, that the local authorities meet their responsibility in respect of the buildings to be transferred. I beg to move.

Lord Morton of Shuna

My difficulty with this amendment is to see where the local education authorities are to get the money from. I had the impression over the last eight years, and possibly a little more, that there was a certain amount of constraint on what local education authorities spent money on. It seems that this money in the end was to come from the Government or from the taxpayer. In that sense it seems a rather pointless exercise to land the responsibility on the local ratepayer in this way when presumably the local education authorities, if they are like the education authorities in Scotland, have been desperately trying to get permission to spend money on buildings and have not been able to do so.

The Lord Chancellor

I do not propose to follow the noble Lord in that direction. However, the clause proposes the vesting of these properties without any compensation. The argument for not compensating local authorities is that for the most part the assets now used in local authority higher education were acquired under arrangements which shared the cost between ratepayers and taxpayers on a national basis.

The cost of maintaining those assets is also shared between ratepayers and taxpayers on a national basis and will in future be met nationally. It would not be right therefore in the Government's view to put the onus on local authorities, and therefore largely on the ratepayers of individual authorities, for putting right structural defects when properties are being taken over without any consideration to be paid for them. I hope that in the light of that explanation my noble friend will feel able to withdraw this amendment which she has moved on behalf of the noble Earl, Lord Onslow.

Baroness Cox

I am very grateful to my noble and learned friend for that clarification and in the light of that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 250ZA not moved.]

Clause 110 agreed to.

10.15 p.m.

Clause 111 [Transfer of staff to higher education corporations]:

Lord Morton of Shuna moved Amendment No. 250ZB: Page 110, line 3, leave out from ("conditions") to end of line 5.

The noble Lord said: Here we come again to the question of transfer of employment. The amendment seeks in effect to delete the last two lines of subsection (4) of this clause, which states, Subsections (2) and (3) are without prejudice to any right of an employee to terminate his contract of employment if a substantial change is made to his detriment in his working conditions". The words that I seek to strike out follow thereafter and I suggest possibly take something away from the employee's rights and add nothing to the clarity of the subsection.

If the subsection finished at the word "conditions", it could be interpreted as meaning exactly the same as if it went on to where it is at the moment. Alternatively, if you have to add some extra meaning to those two lines one sees that the only meaning you can add is that there is a change to his detriment by the change in employer. Which is the meaning that is intended? I am not quite certain, but I suspect the meaning is that it is just a change of name and therefore that would not be to his detriment. If that is so, one could put a full stop after the word "conditions" and that would make it perfectly clear. That is the purpose of this amendment. I beg to move.

The Lord Chancellor

The purpose of the words sought to be deleted is to make it plain that the mere change of employer would not in any way detrimentally affect the right conferred by this subsection. I should have thought that clarification was desirable, but if the noble Lord thinks it is not I certainly will read what he said. But it seems to me that it is highly desirable to make that plain.

Lord Morton of Shuna

If the only change is in effect a change in the name of the employer from A to B, it is not a change that is to the detriment of his working conditions and therefore the last two lines are unnecessary. Therefore from what I have been taught about judicial interpretation—of course I bow to the noble and learned Lord who has far more experience in that—one looks for some additional meaning in those two lines. The only additional meaning is that something detrimental may have occurred but it is to be ignored. If that is not what the Government mean, the best way of dealing with that is to leave out those two lines, and that is the purpose of the amendment.

Baroness Seear

Is what it means this—that if there is this change there are certain rights that the employee would have had if there had been a detrimental change in his conditions? Are there certain rights which he would have had but which he forfeits? Is that what the subsection means?

The Lord Chancellor

What it means is this. The employee will have a right against a new employer as if the new employer was the old employer. But if on the change something detrimental to the employee is introduced, the employee will have a right to terminate. However, the mere change of itself will not confer a right to terminate, and it is that last point that these words that the noble Lord has sought to delete make clear. That is the position and perhaps I may repeat it.

The employee will have a right to continue as though he had a contract with the new corporation. However, if the new corporation seeks to worsen his conditions in any way he will have a right to consider that to be a termination. The mere fact that there is a change of employer will not of itself constitute a detriment. Therefore, he will not have a right to terminate merely because of the change; he must point to something in addition which is a detriment. I believe that that covers the whole of the situation to the reasonable advantage of the employee. To leave out the last part would introduce the possibility that the mere change of employer was a detriment. The last few words are required to make clear the fact that that is not so.

Lord Morton of Shuna

I have difficulty in seeing how the change of name of the employer by itself, and nothing more, can possibly be argued to be to the detriment of the employee. However, I shall read what was said by the noble and learned Lord and at this stage ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 111 agreed to.

Clause 112 agreed to.

Clause 113 [Designation of institutions]:

Baroness Hooper moved Amendment No. 250CA: Page 111, line 38, after ("objects") insert ("—

1. (i) are exclusively charitable according to the law of England and Wales; and
2. (ii)")

On Question, amendment agreed to.

Clause 113, as amended, agreed to.

Clause 114 agreed to.

Clause 115 [Universities Funding Council]:

Earl Russell moved Amendment No. 250A: Page 112, line 33, leave out ("fifteen" and insert ("thirty").

The noble Earl said: In moving this amendment I should like also to speak to Amendment No. 251ZA because, in effect, they constitute a single amendment. I feel that I owe the Committee an apology for so much as moving an amendment at this time of night. However, we are beginning to enter one of the most controversial clauses of the Bill and some points can be made as briefly as possible.

I believe that a few Members of the Committee present—one or two are in my eye at the moment—have sat through a University Grants Committee visitation. They will probably recollect listening to a long series of technical submissions asking for money to support, for example, the college's outstanding internationally recognised strength in Near Eastern archaeology; the implementation or co-operation between the schools of architecture and engineering; the Lighthill Report on building technology; and the costs of implementing recent parliamentary legislation on the provision of the animal house.

They are a fairly multifarious set of propositions. If one is sitting in the background and watching the faces of the committee then as the discussion goes around the room one will see two or three alert faces following everything, making notes and asking questions. One will also see a succession of rather glazed faces. One can often tell who is thinking how difficult it was to catch the early morning train from Manchester and who is wondering what is for lunch. However, as one moves from one submission to another one will see the alert faces moving round the table according to the subject under discussion. That is the importance of having a wide range of subjects represented in a committee with functions which will succeed to those of the UGC.

It may be said that much of the work will be done in sub-committees. Undoubtedly it will and much of it is so done at present. However, it is important to achieve a reasonable balance of subjects within the main committee itself. Otherwise major subject areas will be unrepresented and major submissions will have to be made to a body of people none of whom is capable of understanding them. That means that we need a larger academic representation on the Universities Funding Council.

This amendment refrains from challenging the Government's major shibboleth in Clause 115—the degree of lay representation. However, because it refrains from challenging the Government on that point, it is necessary that it should instead move to increase the size of the committee to what seems to me the smallest size compatible with a reasonable subject mix. If that is not done, I do not see how this committee could work effectively.

We have here, as we have in so many places throughout the Bill, a question of professionalism. It is an issue between the two sides of the Committee, or at least between this side of the Committee and some parts of the other side of the Committee. I regret to say that there are some issues where the professions are necessary, simply because specialist information is needed. Lay members of the Committee can make many valuable contributions to it. I am glad to see them do so and I hope they will continue. However, they must do so in conjunction with specialist information which only professionals can provide. If something resembling this amendment is not accepted, I do not see how they can provide it across the range of subject areas. I beg to move.

Lord Butterworth

Perhaps I may try to help on this point. The proposal in the Bill translates the recommendations of the Croham Committee and in particular it organises a smaller body than the present UGC with a proportionately greater lay representation. The committee made that recommendation after considerable thought. There was evidence that while a number of lay members of the University Grants Committee were extremely useful, it was often extremely difficult for lay members to give sufficient time in order to get efficiently into the interstices of the work being undertaken.

Therefore, one of the major changes which the Croham Committee recommended was that there should be a small main committee which would have a greater proportion of lay representation but which would confine itself to the general principles. The small main committee would lay down the main principles. The Croham Committee then went on, in a paragraph dealing with the new director-general, to state: We would expect the director-general to recommend the appointment of an executive committee to assist with the details of the allocation procedure". It was therefore seen that on the executive committee, which would be chaired by the director-general, there would be a full representation of the academic sides of the university and under these recommendations much of the work which now goes on in the main UGC would take place in the executive committee.

Therefore, perhaps I may repeat the point. It was intended that the main funding council should concern itself only with general principles and for that reason the recommendation was that it should be a small committee of which about half would consist of lay members.

Lord Grimond

I believe that Amendment No. 251A, which stands in my name and that of the noble Lords, Lord Peston and Lord Morton, is to be discussed with the amendment which has just been moved. I have none of the expertise which was brought to the Committee by the mover of this amendment and by other speakers with long experience of government and teaching in universities. However, as an amateur I have had some peripheral contact with four universities.

I shall speak briefly about such conclusions as I have reached. One of them is the paramount importance of retaining the independence of universities as bodies which stand upon their own feet and are not subject to pressures from outside. Secondly, they are extremely capably run, much more so than many of the institutions that appear keen to interfere with them. Thirdly, they appear to me as an amateur to be the best judges of how to set about the higher reaches of research and teaching. Therefore, while I fully accept that there must be lay representation, I believe that it is extremely important that there should be an academic majority upon the main committee of the funding council.

I appreciate that a great deal of work is said to be taken up by committees. Nevertheless, it seems that the funding council is to be a body of great power. In laying down the general principles it will, or could, exert a very powerful influence over universities. The academics should be in a majority on the council.

I have grave doubts as to whether a university should come any further under the control of business. As far as I know, all universities are extremely keen to be in touch with business and industry. Nearly all have distinguished people upon their councils and are anxious to consult them. I attended the general meeting of the Royal Chemical Association at Kent University: half of the delegates came from industry. Therefore, I do not believe that universities can be accused of ignoring industry. There is a danger that the Government are apt to treat them as technical colleges and may forget the wider aspects and the pure research which it is their business to undertake.

I am somewhat doubtful whether eminent business men can give the time for what is going to be an extremely important and time-consuming job on this council. Therefore, my amendment—and I hope I speak also for those whose names are attached to it—is simply designed to ensure that there is an academic majority on this important body.

10.30 p.m.

Lord Howie of Troon

Before the noble Lord sits down, will he take note that I have just come from a meeting at the City University, which he knows extremely well. City Technology Limited is a company wholly run by the City University; it has just won its third Queen's Award, this time for export. On the other two occasions it was for technological expertise. The noble Lord is absolutely right. The amendment should be supported.

Lord Quinton

I should like to state a case—exactly opposite to that presented by the noble Lord, Lord Grimond—for not having an academic majority on the proposed Universities Funding Council. I feel that experience shows that where one has some specifically interested group dealing with government through a body principally composed of representatives of that interest, the representatives inevitably have to serve that interest. With the best will in the world they cannot return to those institutions which, in some sense, they represent and say, "We have taken part in an important decision by the central body which is going to catch a number of people's fingers in the door around here." Inevitably, they have to operate as delegates.

This is absolutely no criticism of them; it is unthinkable, unless they are persons of an intensely self-sacrificial nature, that they should approach their duties in any other way. Of course, their loyalty is to their subjects and to their institutions. They believe that that is what they are doing and they have to work as delegates. The whole function—the sub-text as it were—of the Croham Committee's report was to produce a body which would have the independence of mind and the freshness of view of the great reforming commissions of the universities in the middle of the 19th century. The mid-19th century universities—perhaps with not the best will in the world—proved totally incapable of reforming themselves and persons had to be brought in from outside.

I am not for one moment suggesting that our condition at present is a simple repetition of that. Nevertheless, it is the case, I believe, that the mode in which the central management, such as it has been, has operated at the universities in recent times has been obstructive to introducing major change. It is much better to do it through a central body of this kind which can exercise an influence rather than through bursts of more or less excited legislation. This makes a strong case for having a body strongly academically supported and with substantial academic representation on it but not with an academic majority.

Baroness White

I should like to raise a point of definition. I know that we are discussing amendments dealing primarily with numbers, but one cannot consider them intelligently unless one is reassured about the definition. I raise again the definition in Clause 115(3)(b) of persons who appear to the Secretary of State, to have experience of, and to have shown capacity in, industrial, commercial or financial matters or the practice of any profession". I do not wish to sound unduly egocentric in this but I should like to know whether the Civil Service is a profession or whether being a member of the other place is a profession. I had the honour of being a member of the University Grants Committee and of being on the governing bodies of four university institutions. I cannot say that I have practised any profession or industrial, commercial or financial matters other than as chairman of a quango and a member of several other quangos. Someone who has had a reasonable amount of experience in public administration in one way or another may not necessarily fall into the categories that are specifically described. There should be room somewhere for persons who may have had relevant experience but do not fall within the definitions contained in this clause.

In establishing the Universities Funding Council it is important that there should at least be a possibility of appointing someone with reasonable experience of public life but who is not necessarily qualified in any of the professions. The noble and learned Lord the Lord Chancellor did not reply when I mentioned quangos at an earlier stage of our discussion. Perhaps he can deal with the matter now.

Lord Trafford

I should like to support the comments of my noble friends. This part of the Bill follows the Croham Report whereby the UFC is substituted for the UGC with the deliberate intention of creating a lay majority on that council. It is not the only function of the UFC to make visitations, although I entirely respect the comments of the noble Earl, Lord Russell, on this point. When he started I thought he was describing part of your Lordships' House, with the various glazed views depending on what it was we were talking about. Nor do I wish to go over the argument I had with the noble Lord, Lord Peston, about the competence or otherwise of various types of businessmen. We can take that for granted.

However, it seems to me that the strong point here is an independent outside assessment of the progress likely to be made in the directions that should be taken and the funding that should be undertaken. It should essentially be that which follows the pattern recommended by Croham and the pattern that is now in the Bill.

If I may speak to the first amendment directly, I can see no reason why one should raise the number from 15 to 30 because the increasing size of any council or committee is probably a reflection of increasing incompetence. It is perhaps of interest if I tell the noble Earl that my university has just spent quite a long time trying to reduce the council from just above the number that he described to well below the number for the simple purpose of making it slightly more efficient. That is all. I do not wish to enter into an argument as to what is an ideal number, but to increase it from 15 to 30 is moving towards a size of council or committee that is difficult to manage and difficult to get business through.

However, the point made by the noble Lord, Lord Grimond, was the significant part of this argument. He said that one should have an academic majority. My feeling is that we should follow the report and this part of the Bill. I see many advantages in there being a lay majority as has been suggested.

It would seem to me that the noble Baroness belongs to a profession simply by sitting in this Chamber—the noble profession of politics. Therefore I am sure that under that, as well as many other qualifications, she would qualify as a member of a UFC or any such organisation. However, that is a matter for my noble and learned friend to deal with.

Lord McCarthy

I would probably agree more with the noble Lord, Lord Grimond, than I would with the noble Lord, Lord Quinton, on the case for an academic majority. However, the question is: what do the Government think? They should tell us what they have in mind, because if one looks at the Bill it appears that the Government do not seem to know what they think. They say that there should be 15; academics should be between six and nine; and non-academics between nine and six. Therefore there might be an academic majority or there might not be. What do the Government want?

Lord Beloff

Having been involved in discussions on the Bill for so long I find myself somewhat divided on the present subject in the sense that I think that there are reasons for believing—I agree here with the noble Lord, Lord Trafford—that persons from the industrial and commercial world would be incapable of exercising a beneficent influence in this way and that the recruitment of such persons in any numbers would constitute a considerable difficulty.

In such circumstances one is often reduced to persons not currently engaged, but retired, and it may well be that the spontaneity of contact with people who are still engaged in a certain occupation might be somewhat lacking. That is one of the reasons why, of the amendments under discussions, I would strongly oppose that proposed by the noble Earl, Lord Russell. If one increases the numbers one would then have to find even more lay persons to keep something of a balance.

I am also against the amendment for the reason that it seems to go quite outside what we understood to be the purpose of the funding council, as outlined by my noble friend Lord Butterworth, which is to look at general principles by which universities are to be funded so that within those general principles, as the noble Lord, Lord Grimond, suggested to us, they can maintain the maximum autonomy. If one had a council such as the one that the noble Earl appears to favour in which there would be an academic specialist in each of the main spheres of academic study, one would be almost bound to have a degree of interventionism, which is exactly the object which he and other Members of the Committee are trying to avoid.

There may be fields of study of which I am ignorant in which any one academic of distinction would do as well as any other. However, in the fields of study with which I have some minor acquaintance, such as the noble Earl's own, I can think of pairs of people, for example, with one on one side of the table asking for money and the other on the other side of the table saying, "Not if you're going to spend it. Not on my life!". This is true of history; it is also true of economics, and of political science. It is wholly undesirable that there should be such dialogues at that level when one comes to allot money for subjects which are largely a research matter and for research councils and where the different interests within a certain subject can be balanced.

On the whole I think I am caught on the horns of a dilemma here and it seems to me, although I should like an academic majority in the sense that I doubt the possibility of recruiting enough laymen to give their full attention to the matter, I am inclined to think that the proposals in the Bill are probably about as good as we can come up with.

10.45 p.m.

Baroness Seear

Perhaps I may ask what sounds to be a stupid question. We are told that the body will deal with general principles. I am not sure what that means when it comes to acting on a body. There are not many general principles, and once they have been laid down I do not see what the members of the body will do. If they do not have enough to do they will start interfering in things that are not general principles. Are we clear as to what the provision means? Members of the body will deal with general principles and the other people will do the work. May we know what members will do on this body as regards general principles?

Lord Rochester

Although firmly in favour of representation by industrialists, I incline to the view expressed by my noble friend Lord Grimond that on the whole there should be a majority of academics on this body. But, like the noble Lord, Lord McCarthy, I am intrigued by the phraseology in the Bill as it stands, because it seems to me that the Government beg that question in determining that there should be, not less than six and not more than nine", members appointed by the Secretary of State and having experience of or being currently engaged in higher education. I await with interest the reply on that point by the noble and learned Lord.

Lord Annan

Perhaps I may just add a word to what the noble Lord, Lord Quinton, said. I think that he is right. I cannot agree with the noble Lord, Lord Grimond, that there is a law by which we must always have academics in a majority in the governance of a university. If we look at America, at those great institutions of Harvard, Berkeley, California, the University of Chicago, they all have lay corporations, trustees or regions governing them. I do not think that there are any academics on those governing bodies.

As regards the numbers, I am afraid that I must disagree with the noble Earl, Lord Russell, in that I think that if we increase the number of academics to 30 we will merely have a debate on trade-offs. There will be trade-offs between different academic disciplines. Such is my experience over the years.

The Lord Chancellor

The intention is that the funding councils—we are dealing here with the Universities Funding Council—will be executive bodies. They need to be small enough to reach effective decisions. The maximum of 15 members for the UFC, including the chairman and chief executive, was recommended by the committee which reviewed the University Grants Committee chaired by the noble Lord, Lord Croham. We believe that that number is right. A body of 30 members, with the number of academic and lay members increased accordingly, would be too large to be effective.

We agree with the views that have been expressed by Members of the Committee with experience of this matter that if we make the body too big we reduce its effectiveness in deciding anything. As my noble friend Lord Butterworth explained, the Croham Committee had in view that the body would be advised in specialist areas by specialist committees and that the ultimate responsibility for deciding would rest with the UFC. It would be informed on technical matters by committees which would be specially appointed for the purpose.

So far as concerns the other amendments, the provisions in the Bill follow the Croham Report, which advocated first of all in paragraph 4.13 that, broadly equal numbers should be drawn from the universities and the non-university world". The members of that committee gave as their reason: The decisions of the UGC frequently require the exercise of academic judgments, but they also require judgments about the public interest, about wider economic and social questions, about prospective developments in industry and commerce, and about issues of finance and management. Through no fault of its present membership, the UGC lacks the necessary balance of experience which would ensure that, particularly in a period of rapid change, all these factors are given proper weight. The result of this is that in our view—and this is exactly following what the committee recommended—a strong academic voice is essential. But a strong lay voice is equally vital, for the reasons to which I have just referred.

As the noble Lord, Lord McCarthy, has pointed out, the Government have not decided whether the majority should be academic or lay. That may be a matter that ought to vary from time to time. My right honourable friend has made it clear in another place that in the first range of appointments he would be inclined to go towards the upper end of the six to nine range for academic members. But he would want at least some of the lay members to have current or recent experience in higher education. The need for flexibility is underlined by what my noble friend Lord Beloff said. It is not always easy to get the best people for appointments of this kind. It is therefore wise to have a range which is broad in balance but not determining exactly where the balance lies in the legislation, enabling the Secretary of State to get a good result from what is available to him.

Turning to the question of the noble Baroness, Lady White, I regret that I did not deal with the quango question earlier. I had been diverted by the amendment to the matter of the community interest or representation. I am afraid I let quangos go out of sight. I think it is important to see the full context in which the phrase to which she refers appears. Clause 115, page 112, line 40 of the Bill, says: in appointing the remaining members the Secretary of State shall have regard to the desirability of including persons who appear to him to have experience of, and to have shown capactiy in, industrial, commercial or financial matters, or the practice of any profession". That does not mean that the Secretary of State can only appoint people who appear to him to have such qualifications. These are to be included. But when you go to look at the qualifications themselves, they are very broad. I think it might not be easy to answer about a particular quango (if that is still a current expression which is understandable) whether or not all the members could be said to fall into one or other or more of these categories. I think that someone who had been on a quasi-autonomous national government organisation and who had been dealing with handing out grants, for example, to applicants, particularly if they had shown capacity in it, might well come within this sort of qualification. It is difficult to express fully the sort of experience that one is looking for. This is perhaps as good a shot at it as can be made. It is looking at the sort of people whom the committee had in mind.

Lord McCarthy

Perhaps the noble and learned Lord the Lord Chancellor will permit me to intervene. Would he consider it conceivable that it might include a trade unionist?

The Lord Chancellor

I think it very possible that a trade unionist might have shown capacity in industrial matters. It says, experience of, and to have shown capacity in", so both are mentioned in that connection.

The noble Baroness, Lady Seear, asked me to define general principles. If I may, I shall leave that to the philosophers, but the intention of Lord Croham's committee was to set up a working organisation in which the top body, with ultimate responsibility, would not itself have specialised knowledge in all the matters to which it might have to direct its attention. Therefore it would be the ultimate body that would have to deal with competition between the various specialist fields.

The amendments that are proposed would prevent the Secretary of State from achieving the results which the noble Lord, Lord Croham, and his committee thought desirable after very full consideration. In my view, which has been supported by many of the Members of the Committee with great experience of the university field, the position which the noble Lord, Lord Croham, advocated and which the Bill takes is the best position in the circumstances. I hope that the Members of the Committee who supported these amendments will therefore feel able to withdraw them.

Lord Pitt of Hampstead

I may be wrong, but I gather that the Cabinet has about 24 members. I wonder whether the noble and learned Lord the Lord Chancellor would think that that would probably be a better figure than the 15 that is being suggested.

The Earl of Halsbury

Cecil Northcote Parkinson, author of Parkinson's Law, the Pursuit of Progress, taught that anything over 20 was ineffective.

Earl Russell

It seems that my noble friend Lord Grimond and I without any concerted design have succeeded in impaling the Government on the horns of a dilemma. Every argument that has been put forward against my amendment is an argument in favour of the amendment of my noble friend and every argument against the amendment of my noble friend is an argument in favour of mine.

I listened with interest to the point made by the noble Lord, Lord Butterworth, about general principles, which seems to me to illustrate the somewhat ideological outlook behind this Bill. It seems to me entirely wrong to have a general principle about how many centres of Near Eastern archeology one needs in the British Isles before one has discovered who is doing good work in Near Eastern archeology. To do that, one needs professional competence.

I listened also with interest to the noble Lord, Lord Quinton, with his nineteenth century parallel. There is a significant difference there. The nineteenth century parallel comes from a time when universities were finding rapidly increasing sums of money being spent on them and when, with the creation of the Indian Civil Service, there was a rapid increase in the supply of patronage available for university graduates.

Patronage is a great solvent but that solvent is not in very great supply at the moment, which is why restrictions on autonomy are operating in a rather more grating way than they might do otherwise. The noble Lords, Lord Trafford and Lord Beloff, and the noble and learned Lord the Lord Chancellor all dwelt on the problems of increasing the size of the committee. I have sympathy with those points. The reason why I proposed so large a size was because I did not wish to challenge the Government's principle of increasing lay representation. It seems to me I was too timid. Perhaps I should instead have gone along with the amendment moved more courageously by the more experienced politician, my noble friend Lord Grimond.

I shall beg leave to withdraw this amendment now but if the Government do not accept one or other of these proposals I prophesy that before the end of this Parliament the Government will be back with a new education Bill to adopt one or other of these proposals. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Strabolgi)

Before calling Amendment No. 251, I have to inform the Committee that, if this amendment is agreed to, I cannot call Amendments Nos. 251ZA, 251A or 251AA.

[Amendments Nos. 251 to 251AA not moved.]

Lord Grimond moved Amendment No. 251 B: Page 112, line 41, after ("including") insert ("some").

The noble Lord said: I move this amendment for the sake of clearing up one point that may be raised as regards the definition of "professions". I take it that they unquestionably cover the armed services, which I believe do very fine educational work in this country.

Secondly, I hope that the Government will look again at the special mention of industrial, commercial and financial matters. I genuinely wonder why they have picked out those areas. The noble and learned Lord the Lord Chancellor has said that the provision is not confined to such people. However, they are picked out and I should have thought that some of the things which have been done in the commercial world lately are not the kind of thing that we should like to see in universities. There are other sources of people for the funding council which may be rather superior.

I return to the point that I fear that the Government confuse the universities with technical colleges. They think that they should turn out the people that industry wants. In my view, they should stand back from industry and should be entitled to criticise it. Lastly, I hope that it is not the Government's belief that industry should undertake practically the whole of the funding of research. That would be extremely dangerous. I beg to move.

11 p.m.

The Lord Chancellor

I have already said most of what I should like to say as regards the amendments. However, the idea that the Government are not distinguishing between the universities and the technical colleges is not well founded. We have gone to considerable lengths to distinguish between the funding arrangements for universities and those for higher educational establishments which are not universities. That is an important distinction which is enshrined in the Bill and emphasises the Government's commitment to the universities.

So far as the question of profession is concerned, I should have thought that the profession of a soldier, sailor or airman was a profession within the meaning of that word in the clause. As I have said, it does not matter all that much. The reference to professions makes it plain that the balance is not wrongly in favour of industry and commerce in the way that the noble Lord suggests.

Perhaps I may take this opportunity to mention that the sole responsibility of the Universities Funding Council is funding the universities. It is not in the same category as the Cabinet, which the noble Lord, Lord Pitt of Hampstead, mentioned earlier. I hope that the noble Lord will feel that I have given him a sufficient answer on the point which he raised.

Lord Grimond

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 252 to 252B not moved.]

Lord Morton of Shuna moved Amendment No. 252C: Page 112, line 43, at end insert— ("(3A) One of those appointed under subsection 3(a) or (b) above shall have experience in a Scottish university and one of the remainder of those appointed to the Council shall be resident in and have had experience of working in Scotland.").

The noble Lord said: This amendment ensures that the Universities Funding Council will contain two people who have Scottish experience. The position of the Scottish universities is that they represent eight out of 45 universities. Broadly speaking, if they are represented by two out of 15 members, that will be roughly proportionate.

Scottish universities are, as Croham recognised, operating in a distinctive environment which serves Scottish needs which needs explicit recognition. The editor of The Times Educational Supplement described Scottish university education as operating in a straitjacket cut to English specifications. There is general resentment in Scottish universities, as I understand it, at what they feel is unfair treatment from the University Grants Committee. That particularly applies to the universities of Aberdeen and Dundee. Scottish education differs from English education and that difference is not recognised if the Universities Funding Council is, as it could be, purely English in composition. It is for that reason that the amendment is put forward.

It is necessary that the distinctive character of Scottish universities should be recognised at the point where decisions of principle will be made. As an illustration of the lack of Scottish representation, I have drawn attention in another debate to the fact that when we have a debate on universities in this House, people with experience of English and Welsh universities come out in great numbers. However, there is no one who speaks with recent or present Scottish university experience. The same could well happen if there is no specifically Scottish representation on the Universities Funding Council. I beg to move.

Lord Grimond

I should like to say a word in support of what has been said by the noble Lord, Lord Morton of Shuna. We are extremely lucky to have the noble and learned Lord the Lord Chancellor with us tonight because he will know better than anyone of the particular position of the Scottish universities. I would remind him, as he well knows, that they are specifically mentioned in Article 25 of the Act of Union where it lays down that: The Universities and Colleges of St. Andrews, Glasgow, Aberdeen and Edinburgh as now established by law shall continue within this Kingdom for ever". They are therefore in a very special position, both in Scottish life and Scottish history, and quite different from those in England. After all, when England had two universities, the district of Aberdeen alone had three.

The particular point to which I wish to draw attention is that there seems to be a danger that the funding body or the commissioners may take the view that certain of their departments could be dispensed with. I am thinking particularly of Aberdeen. Aberdeen covers a tremendous area and is in a different position to most universities, certainly in England, in that it is the only genuine, wide-reaching university in different disciplines in the whole of the north of Scotland.

To bring the point home, it seems not inconceivable that people who know nothing about Scottish traditions, Scottish life, the Scottish educational system or the position of Scottish universities, might say that the great university of St. Andrews could give up the department of mathematics because after all there is one just across the Tay at Dundee. The noble and learned Lord is well aware that that would be a most horrible thing to do. The department of mathematics at St. Andrews has been a very celebrated part of intellectual life in Scotland for many centuries. The mere fact that there are other mathematics departments in Scotland does not mean that one should deprive a Scottish university of particular bits and pieces, as I believe is now threatened at Aberdeen.

I hope therefore that the noble and learned Lord will look at this issue now and later in the Bill when it again arises and guarantee that Scotland is properly represented.

Lord Howie of Troon

I should like to support my noble friend Lord Morton of Shuna and also the noble Lord, Lord Grimond. I speak as a graduate of a Scottish university—Strathclyde, although in my day it was the Royal Technical College—and as the pro-chancellor of the City University, London.

The fundamental fact—it underlies this amendment, which ought to be accepted—is a very simple one. It is that the Scottish universities are quite different from English universities. Their mode of entry is different; their length of course is different; their mode of instruction is different; their whole tradition is Continental rather than English. They are wholly different. The attempt, if deliberate—I think, however, in the normal British way, it is accidental—to put them in an English straitjacket, as my noble friend said, is wholly to be deplored. They have a regional significance of their own which recognises and reflects a regional culture and a long and historic educational tradition.

I think it was the noble Lord, Lord Grimond, who referred to the antiquity of some of the Scottish universities. That would not include Strathclyde, my own university, which is a fairly new one, having been founded in 1790 or some such recent year. However, it is a fact that Scotland had four universities for a time while England had only two. They were very historic universities in their way but there were only two of them. The noble and learned Lord the Lord Chancellor will realise that Scotland had four.

There is one other significant fact about the Scottish universities and their regional aspect of which the noble and learned Lord the Lord Chancellor will be well aware; namely, that in a very real way they are local universities. That is not true of the English universities. In England there is a relatively recent but nonetheless significant tradition that young people should go away to university, whereas in Scotland that is not so. If someone lives in the West of Scotland he does not go off to some distant part to attend university; he goes to Glasgow. If he lives in the south-east of Scotland, he goes to Edinburgh. If he lives up in the north-west corner of Scotland, he goes to Aberdeen. I think that one should always go to Glasgow, but that is another matter.

This amendment ought to be supported. Looking at the benign features of the noble and learned Lord, I am perfectly sure that it will be supported.

Lord Swann

I should like briefly to endorse the comments made by a number of Members of the Committee. I went to Edinburgh University as an Englishman and came back 25 years later as an adopted Scotsman. The Scottish universities are indeed different. The whole education system in Scotland is different. All these kinds of bodies are dominated by the South-East of England and I hope profoundly that they will indeed include a Scotsman.

Baroness Carnegy of Lour

I should like to support the amendment. I am not convinced that the requirements in this amendment are exactly right, though the amendment is certainly right in principle. I do not think that we have to explain the differences to my noble and learned friend. It is extremely important that when these matters are discussed the way that funding works out in a Scottish university should be properly comprehended. The structure of the universities is so different that the way the funding affects those universities is also different. That is important.

I believe that at the moment there is a member of the UGC who is from Scotland and he finds that he has a lot of responsibility in interpreting the matters under discussion in Scottish terms. I think that point should be considered. It is not in any way an "us Scotland too" request. This is a very serious matter. It is very difficult to discuss Scottish funding without the participation of people who are experienced in Scottish universities.

Lord Hylton

I am an Englishman whose sympathies are deeply committed to Northern Ireland, and therefore I am delighted to see a specific reference to Northern Ireland on page 113 of the Bill. As will be widely known, Northern Ireland is a separate legal jurisdiction from England and Wales. It has totally different local government arrangements and even the central government functions are organised in a different and distinctive manner. On such grounds I should have thought that Scotland, with its much larger population, deserved a special entry in this section of the Bill.

11.15 p.m.

The Lord Chancellor

First, perhaps I may say that so far as concerns Northern Ireland, the reason for that is rather technical.

On this amendment and others like it, the Secretary of State has responsibility in relation to the universities of Scotland, as he has in respect of the universities of England and Wales, and his appointments will have these interests in view. I agree that the Scottish universities are different. They are also each different from one another. For example, St. Andrews, the oldest, is very different from, say, the University of Edinburgh or the University of Strathclyde, which had the honour of teaching the noble Lord, Lord Howie of Troon.

So far as concerns Aberdeen, before I came to my present situation I had made representations to the Secretary of State about the special situation of Aberdeen. With regard to Dundee, I have the honour of being an honorary visiting professor of law at that university, although in the past month or two I have not discharged many duties there. However, I am well aware of the position of the Scottish universities, and so is the Secretary of State. He has already stated that he will be looking to the Universities Funding Council to set up a Scottish committee, using the power given by paragraph 9 of Schedule 6 to the Bill to set up committees with special responsibility.

The important point is that this council is to be a comparatively small group, as we have already discussed, with responsibility for funding all the universities. Therefore it ought to work as a unit. All the considerations affecting all the universities should be taken into account by the Secretary of State in making his appointments. If this kind of amendment were to be accepted, it would require to be mirrored in almost all the other groups of universities. That would destroy the unity of the concept.

However, Members of the Committee can be assured that my right honourable friend the Secretary of State in proposing appointments to the Universities Funding Council will have very much in view the situation in Scotland. I hope that with that assurance Members of the Committee who moved and supported this amendment will feel able to agree that it should be withdrawn.

Lord Howie of Troon

Before the noble and learned Lord sits down, will he look back to Clause 115(3), below line 40, where it refers to having regard to the desirability of including a variety of persons? Can he perhaps encourage his friend in the Government to consider the desirability of having Scotsmen as well as the other people.

Lord Morton of Shuna

In the end I shall withdraw this amendment because of the lateness of the hour. I regret to say that that has nothing to do with what the noble and learned Lord said because in effect he said nothing.

We have been promised a Scottish sub-committee of the Universities Funding Council. That does not appear in the Bill. It clearly should. As the noble and learned Lord is well aware, the difficulty is that the Department of Education and Science is responsible for virtually all English and Welsh education, including the universities. The eight Scottish universities sit like a kind of carbuncle which does not fit into the DES situation. The Department of Education and Science and the Secretary of State know education in England from pre-school through to university, covering polytechnics and all the rest. The Secretary of State has responsibility for these eight Scottish universities, but for no school education, no polytechnic and no other element of further education in Scotland—simply for the universities.

As has been said by Croham and everybody else, Scottish universities are totally different from English universities. If you take a group of universities in East Anglia or somewhere like that and compare them with a group of universities in the East Midlands, no doubt they will have much the same sort of set-up. They are all fairly new universities. But if you take the Scottish universities, three of them certainly pre-date the Reformation. They are very large universities. Certainly Glasgow is a very large university, and St. Andrew's and Aberdeen are universities of great merit and tradition which are totally different in their make-up from the other universities.

I must say that it gives no confidence whatever just to be told that of course the Secretary of State will bear this in mind in appointing members of the Universities Funding Council. From what has happened with the University Grants Committee, one does not see anything which would give any confidence. But in view of the lateness of the hour, at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 253 to 254 not moved.]

Baroness Hooper moved Amendment No. 254AZA: Page 113, line 4, leave out ("facilities and the carrying on of other activities by universities") and insert ("any facilities and the carrying on of any other activities by universities which their governing bodies consider it necessary or expedient to provide or carry on for the purpose of or").

The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 261A. These amendments extend the definition of activities eligible for funding by the UFC or PCFC, to make absolutely clear that it covers everything that higher education institutions actually do. I beg to move.

On Question, amendment agreed to.

Lord Swann moved Amendment No. 254BZA: Page 113, line 6, after ("payments") insert ("but not to enter into contracts").

The noble Lord said: My intention, as I informed the noble Baroness, Lady Hooper, last week was that this should be a probing amendment aimed at finding out before Report stage what the Government mean by contract funding of universities and other institutions of higher education and what they propose to do about it. Contract funding is a very radical and in some ways alarming innovation and there is a lot that one could say about it, but the hour is late and I shall be as brief as I can.

Some noble Lords may recall that on Second Reading of this Bill I expressed grave doubts about the proposed funding of universities by means of contracts. I gave examples of the sort of illiberal restrictions and, in some cases, preposterously complicated procedures that government departments have recently started imposing on research contracts with university and research council staff. Since the officials in the proposed Universities Funding Council will inevitably be the same sort of officials and in some cases no doubt the very same officials as arrange research contracts for government departments, it seemed to me only too likely that the sort of centralised bureaucratic controls that are already imposed on individuals will, as things stand, soon be imposed on whole institutions. I said that I shuddered to think what would happen to our internationally admired university system if such thinking crept into their funding.

I want to examine the problem in a little more depth. For some years past, the Government have been pressing the University Grants Committee to become more interventionist in a whole variety of ways, and in July 1985 they set up a committee under the distinguished chairmanship of the noble Lord, Lord Croham, to review its role and work. The Croham Report was published in February 1987 and made a lot of sensible detailed recommendations, but at no point did it suggest that funding should be by contract. On the contrary, it recommended: While recurrent allocations should continue to be mainly by means of block grants the University Grants Committee should have unambiguous powers to attach conditions to grants". In fact, it has long earmarked funds for particular purposes and the whole tenor of the Croham Report is towards clarifying, improving and tidying up existing practice rather than towards detailed centralised control.

Notwithstanding the Croham Report's central recommendation about the continuance of funding by means of grants, a point underlined by a recommendation that the new funding body's title should still include the word "grants", in April 1987 the Secretary of State issued the White Paper in which the central recommendation of the Croham Report was swept away and contract funding put in its place. Into the bargain, the Government say under Clause 115 in the notes on clauses in the orange book that the proposed new structure is: in line with the main recommendation of the Croham report". Surely that is being somewhat economical with the truth.

The White Paper gave no indication whatever of what contract funding might mean in practice. The phrase did not at once arouse the concern that it now does. In May of last year the Department of Education and Science sent to the Vice-Chancellors' Committee a document entitled Contracts between Funding Bodies and Higher Education Institutions. It is not the kind of document that one can possibly summarise and I can only urge those Members of the Committee who care about higher education to read it. Some Members have seen it already and are as appalled as I am. It sets out the nature of the contractural system that the Government have—or at any rate had—in mind. I can describe it only as central control and bureaucracy gone crazy.

In passing, there are some odd features in the document. It contains passages of such excruciatingly awful English that I find it hard to believe that it could have been written by even the most junior of civil servants. Nor can I conceive how senior civil servants could ever have approved it for circulation. I showed it to one industrialist friend who observed contemptuously that it showed elements of what he called "management newspeak". I leave Members to draw their own conclusions as to who thought it up.

The concern of contract funding has been growing, as Members will know, at least if they have been able to keep up with the torrent of protests on this and much else in the Bill that has flooded through so many Lordly letter-boxes in recent months. The reason why dismay has grown is clear enough. There has never been any official clarification of what exactly the DES means by "contract funding", nor has there been any public repudiation of this awful document.

The Secretary of State made some would-be reassuring remarks to a conference of vice-chancellors last October to the general effect that contract funding was not intended to be excessively bureaucratic and inflexible; must not jeopardise the pursuit of research and scholarship; and must take into account the distinctive nature of higher education. The noble Lord, Lord Butterworth, read out the Minister's full comments at Second Reading. However, the trouble is that what a Secretary of State intends is not necessarily what happens when officials get to work on the day-to-day details, as the DES paper makes too painfully clear.

In short, despite the Secretary of States's good intentions, I have the very gravest reservation about a system which by its nature must inevitably be bureaucratic, must be inflexible, is bound to jeopardise the freedom of research and scholarship and by setting highly detailed plans in legal concrete cannot take account of the distinctive nature of higher education.

There is another facet of the DES paper on contract funding which concerns me greatly; namely, its uncritical enthusiasm for performance indicators. I have no particular objection to the 39 indicators that the Vice-Chancellors' Committee has been bamboozled into listing as more or less immediately feasible. They are all to do with such mundane matters as the university's telephone bill expressed as a percentage of its total running costs. If that sort of thing keeps the Government happy, so be it.

However, the DES paper seems to be much more interested, not surprisingly, in performance indicators in relation to the primary purposes of the university; namely, teaching and research. I quote from the DES paper. Listen to the English. It is concerned with, how these indicators might be used to assess institutions' delivery of provision contracted for with public funds". It sounds to me like a supermarket manager dealing with his clients.

There are performance indicators of a sort for teaching and research and anyone who wants to know about them can find out from the report by a joint committee of the University Grants Committee and the vice-chancellors. They list a dozen or more but one should ponder the innumerable caveats which they list against each of them—and I could add a lot more. That does not mean that indicators are useless. Used with care and a full understanding of their considerable limitations, they have their points. For example, they can be used to correct the almost inevitable but unfair bias in favour of small departments, but used mechanically and with little understanding, as they often are, they can be a very seriously misleading guide to making funding decisions.

It may seem a little far fetched to equate universities with the armed services, but having been in the army for six years during the Second World War I recognise that there are similarities. Any army engaged in a war never knows what will succeed and what will go wrong. It must be constantly at the ready to change its plans.

I wonder what would have happened if detailed contract funding had been in place for all the different elements of the navy, army and air force when the Argentinians invaded the Falkland Islands. No one would have reached there for months, if not years, and when they finally arrived there would have been the wrong mix of troops with the wrong equipment, since the Argentinian forces and defences would have been greatly strengthened in the interim. In short, the Falklands War, conducted by contract, would surely have been a walking shambles rather than the swift, remarkable victory that it was. The time-scale of military operations may be a good deal shorter than the time-scale of academic operations, but the principles are the same.

What should be done about contract funding? I feel profoundly that it should be dropped and the Croham recommendation of funding by block grants put in its place. It seems strange that the Government should commission a report by a distinguished committee and chaired by someone as distinguished as the noble Lord, Lord Croham, and then immediately ignore its advice. I look forward with keen interest to the Government's explanation as to why that happened. I also hope to hear the Government's view of the DES document on contract funding. Do they really believe in it? If so, how do they square it with the Secretary of State's professed intentions of liberality?

Lastly and somewhat reluctantly, because it could only be second best, I should like to hear the Government's views on a proposal put to me by an academic friend; namely, that there should be drawn up by mutual agreement between the Universities Funding Council and the Vice-Chancellors Committee a procedural memorandum of some sort setting out in detail how contract funding should work so as best to minimise its many defects; the resulting document to be laid before both Houses. I beg to move.

11.30 p.m.

Lord Adrian

I do not intend to speak for any length of time but I should like to support the amendment of the noble Lord, Lord Swann. Of course it is a probing amendment, though I have no doubt it will be called a wrecking amendment. Indeed, if it were passed it would wreck. However, it is very uncertain what it would wreck because at the moment we are so much in the dark about the intentions of the Secretary of State with regard to the Universities Funding Council and what it will set up by way of a funding mechanism for universities.

As the noble Lord, Lord Swann, said, we first heard of contracts in the White Paper Meeting the Challenge. If I recall correctly, during our debate the idea of contracts met a great deal of criticism, not least from the noble Lords, Lord Beloff and Lord Blake. Both were distinctly critical of the idea. This amendment is designed to elicit a response and to try to obtain an account of the current thinking of the Department of Education and Science on contracts. As we have noted, there is no mention of contract on the face of the Bill and the DES paper which the noble Lord, Lord Swann, mentioned was vague on the issue, to say the least.

At the same time that the paper was published, there was another consultative document from the Department of Education and Science dated May 1987 called The Changes in Structure and National Planning for Higher Education—Universities Funding Council. Paragraph 26 ends with the sentence: The Government will make firm proposals in the light of responses to the consultative paper"— that is, the paper on contract funding mentioned by the noble Lord, Lord Swann— and finalising the detail of a new system of contracting will be one of the first tasks of the UFC and the PCFC". It is interesting to note that later on that document states at paragraph 40: It is proposed that the statutory framework"— which I suppose is what we are discussing at the moment— should be based on the recommended provision set out in Appendix 7 to the Croham Report a copy of which is attached". The relevant part states: To pay recurrent and capital grants to universities, to earmark grants for particular purposes, and to attach conditions to the payment of grant". There is no mention of contract, as has already been pointed out.

If only as a matter of consideration to this Committee, it is important that we are told what is intended. The Universities Funding Council is to be appointed by, and will be subject to conditions devised by, the Secretary of State. Can we be told whether any thought has been given to general guidance on contract for the UFC? We learnt a year ago that it was one of the first tasks of the UFC to devise the finishing details of those proposals. As the noble Lord, Lord Swann, said, we would very much like to know more about what is proposed in terms of contract funding.

The Earl of Halsbury

I support my noble friend Lord Swann. I wish to issue a warning to the Government, speaking as a student of organisation of pathology. If one has this system of contract funding, the first thing that the UFC will do is to appoint a rather expensive contracts manager who will be a lawyer. In self-defence the universities will each employ a contracts manager who will be a lawyer. The lawyers will happily spend time scoring points off one another. None will give way without instructions from their principals. Their principals will not know what they are talking about and everything will grind to a standstill.

Lord Butterworth

I am attracted to the idea that the vice-chancellors' committee and the officers of the Universities Funding Council should work out ground rules for a contract so that all parties can have confidence in it. I intervene only to say that it is not quite true that Croham made no reference to contract. I wish to quote one short paragraph from Croham—paragraph 5.16: Both the grant letter issued by the UGC at the end of the distribution exercise and the university's academic and financial plans as submitted, amended as necessary by negotiation during the process, should be public documents. Taken together, they represent the 'contract' on the basis of which public funding is provided". For the sake of completeness, I should add that the word "contract" is in inverted commas.

Therefore detailed ground rules will be necessary. It will be admitted on all sides that the new UFC should be more effective in monitoring the performance of universities. After all, universities make proposals in their plans as a result of which they attract public money. There ought to be a means of monitoring to see that they deliver the goods. They should be accountable after the event for the use to which they have put public funds. If that is what the contract means, many people will be in favour of it. What it must not do is to go so far as to interfere in what has been called the distinctive characteristics and freedom of higher education.

Lord Annan

I have great sympathy with the movers of the amendment. When I first heard that there was to be a contract between the UFC and the individual universities I was not unduly alarmed. In some ways I was rather heartened. It has always been my contention that our university system is too rigid and too much geared to a series of arrangements such as the famous two A-level entry. I should like to see much greater diversity in our universities; in some cases open access to a university; in some cases a university that specialises in continuing education. We need to introduce all kinds of variations into our system of higher education.

Therefore, being optimistic as I normally am, I thought that this gave great opportunities to the UFC, which could now carry on a dialogue with the university and say, "We see your future in this way. We wonder whether you will agree to move in this direction. If you will, we should like to help by making a contract with you on those lines". I am sorry that the noble Baroness is not in her place. I was hoping that the Minister might say whether she had perused the document. It is most terrifying.

One asks how it can be so much at variation with the reassurances the Secretary of State has given to universities on this matter, but one knows what happens. As the noble Lord, Lord Beloff, said in the debate on Croham, this is what happens when Treasury control is exercised to the full. The Treasury says to the department, "Department, if you want these additional funds you must make out a case". The department then has to go to individual universities and say, "You must make out your case".

These regulations are the perfect example of the way in which the Treasury puts screws on the department, the department puts screws on the UFC and the UFC puts screws on the universities. These are not merely screws. Enormous wrenches are being put on the universities now. I am deeply worried. I hope that the noble and learned Lord will make representations to the Secretary of State about the alarm this document has caused.

I do not know how to bring this into the debate on the UFC but it seems odd that the Government, who have been so conspicuously successful and determined to privatise many quangos and other institutions, and to liberate them from bureaucratic control, and who generally say that if we are to progress along those lines, especially in respect of relations between universities and industry, we can do so only if we have much greater freedom of action, have come up with this bureaucratic construction of a university funding council with contracts.

I wished to ask the noble and learned Lord whether in fact any consideration has been given to a scheme which is of course the very opposite of a university funding council. Under it, universities would be given a grant to cover their research, with the rest of the money which would normally go to a university by way of grant being given to students in the form of a maintenance grant to cover fees so that the students—the consumers of higher education— actually had the freedom to pick and choose which university they attend. They would get an average fee which would of course be the average for all universities. It would be much lower than the fees presently charged by Oxford and Cambridge; on the other hand, it might be a little more than some universities would care to charge. If one has this provision one has greater freedom of choice and one has exactly the type of pattern which the Government have been preaching to all of us to follow. I am not necessarily advocating this proposal but, faced with the type of bureaucratic control which is obviously in the minds of the department and its chiefs, I ask whether one should not think of another much more radical alternative in the way of university funding.

Earl Russell

I should like to express my entire agreement with the noble Lords, Lord Swann and Lord Adrian, and the noble Earl, Lord Halsbury. They have spoken on behalf of a large and deeply concerned body of academic feeling of which I beg the Government to take account if they want any effective working partnership to continue.

Lord Beloff

I must say that I am, like the noble Lord, Lord Annan, extremely worried after having read the DES document to which he referred. It was the understanding of many of us that our anxieties about excessive control by the funding councils had been met by the amendments moved at Report stage in another place. Moreover, one thought that the Secretary of State was now convinced of the necessity to preserve within the scheme of public funding— which obviously has its limitations—the effective autonomy of the universities. One thought that contract might merely be a way of saying that if public money is given to an institution there is clearly some reciprocal duty on the part of that institution to perform the functions for which the money is received. No one could possibly object to that requirement. Indeed, it has even been suggested that the present system under the UGC consists of an implied series of contracts.

However, when one looks at the document referred to and sees that what is contemplated—at least in some parts of the Department of Education and Science—about the nature of the funding and the nature of contracts, it seems to me that the hopes which were raised among many of us by the Secretary of State on Report in another place have now been dissipated.

If we are to recover confidence in the Government's handling of the financing of universities, it is essential—I hope that the noble and learned Lord may be able to reassure us this evening—that, before we reach the next stage of the Bill, the Government come forward and explain that this proposal is, as it were, a piece of bureaucratic flannel which we need not take seriously, and that there will be, on the face of the Bill, a clear expression of their view that it is the Government's determination that under the new funding system universities are to be at least as autonomous as they have been hitherto. Otherwise I fear that the shock in the university community will be very great indeed.

Lord Flowers

At the risk of rubbing it in a bit, I support what the noble Lords who put their names to the amendment have said. It is a question of the level at which a contract is drawn up; that is to say, the extent to which it is aggregated or disaggregated. After all, the contract could be a block grant to a whole institution to produce so many students at such and such an average price each for a given subject at a given level. That is very much like the present UGC block grant system. The UGC gives us block grant. It says that we can do what we like with it, with rather broad conditions imposed, but those broad conditions include an indication of the number of students that we are expected to produce in major subject areas. Alternatively, it could be—this is perhaps rather extreme—a collection of contracts to educate individual students, or for individual courses, or individual research projects or some combination of all those, which would of course bind us hand and foot.

I should have rejected the latter possibility altogether as being out of character for the funding of the universities, or out of character for the Government for that matter, had it not been for the DES document on contract funding that has been referred to so many times in discussions about the Bill in this place. In spite of the fact that it will not enter the Bill, we must have some clarification of what is meant by contract funding before the Bill is passed or we shall not know what we are letting oursleves in for.

The Lord Chancellor

The principal power in the Bill relating to this matter is contained in Clause 115(6): The Council shall have power to make payments, subject to such terms and conditions as they think fit, to the governing body of any university in respect of expenditure incurred or to be incurred by them for the purposes of any activities eligible for funding under this section. As happens at present, payments may be made by the UGC on behalf of the Secretary of State, subject to conditions. It is my understanding of what the Government propose that the basic arrangements should be built upon existing arrangements between the UGC and individual universities. The idea is that with the UFC, just as with the present practice of the UGC and the National Advisory Board, an academic plan would be submitted by the university in question which it would be the intention of both parties—the university and the UFC—should be the basis of the expenditure. The recipient should receive the money and should adhere to that plan as the basis for the development of the institution and the use of the money.

What I think has caused concern is the amount of detail that was raised in the document to which the noble Lord, Lord Swann, first referred, which I understand to be a document issued in May 1987; that is before the amendments which were moved at Report stage in another place by my right honourable friend the Secretary of State. Certainly the Secretary of State's intention is that the nature of the conditions should not be of the very detailed kind that the noble Lord, Lord Swann, read from the contracts for research which he used as the basis of his illustrations at Second Reading.

The sort of conditions which would be required in the situation with which we are dealing now—that is to say the funding of the universities—would be those which one would think appropriate for ensuring that the money was used in accordance with the plan which had been submitted. It would not, for example, be proper for a university to get money for a specific purpose from the Universities Funding Council and use it for some entirely different purpose. I assume that Members of the Committee who have spoken agree that that would not be right. It would be entirely proper that the conditions which had been submitted would be the conditions under which the money would be used. Otherwise the whole thing would be a sham.

It may well be that the arrangement can be built upon. That is for the Universities Funding Council. But it is certainly not the intention of my right honourable friend that there should be a vast array of what has been described as unnecessary bureaucratic detail in these conditions. On the other hand it would be right that the conditions should be sufficiently detailed to enable the Universities Funding Council to see precisely what was in issue and then to monitor so far as was reasonable that the money was used for the purposes stated.

That is the intention of my right honourable friend, and the Bill is entirely consistent with that. I defer to the noble Earl, Lord Halsbury, in this matter. Lawyers may waste people's time but I do not intend to waste the Committee's time, particularly at this late hour. I think an arrangement under which the university received from the Universities Funding Council a sum of money under conditions about how it should be used would be a contract which would have legal consequences. It would not be the intention of my right honourable friend that that sort of contract would be enforced in the sense of forcing the university to do what was required. But it would be the understanding that the money would be used for the purposes that were stated in the university's plan. The idea would be that it would be a rolling plan, not cast in concrete or anything of that sort. It would be a rolling plan which would have to be updated according to the period of examination, quinquennial, triennial or whatever the Universities Funding Council thought was the appropriate time.

Lord Flowers

I wonder whether the noble and learned Lord is aware of the extent to which the bureaucratic detail demanded of universities over the past, let us say, five years has grown exponentially. We are therefore very much afeared that whatever the Secretary of State may intend—and I am sure he intends what the noble and learned Lord has said—will simply be dismissed by the bureaucrats who are demanding more and more detail of us every month. I am also afraid that under a contract system we shall be totally overwhelmed by detail and shall be totally controlled by it.

12 midnight

The Lord Chancellor

I do not know the precise extent of the growth in the detail that has been required and would not from my own experience be able to vouch that it was exponential over the past five years. But I think I am entitled to point to the fact that my right honourable friend intends to appoint a Universities Funding Council made up of persons, as I tried to describe earlier, with a good deal of experience of life as well as of university life. They will be responsible for the administration of the system. I believe the Committee can have reasonable confidence that men of experience in business do not wish to waste money on detail for detail's sake.

Therefore, the stong lay element in the Universities Funding Council as well as the academic element—there is after all a fairly strong academic element in the University Grants Committee—will be a considerable assurance against the seeking of unnecessary detail. It is not the Secretary of State who will be dealing with this aspect of the matter. These are arrangements between the Universities Funding Council and the universities. One of the purposes of the Bill is to set these on a statutory basis with the Universities Funding Council as a distinct statutory body between the Secretary of State and the universities having responsibility for running the system of making payments, as I read from Clause 115, with power to add conditions to these payments.

The responsibility for the shape of the conditions would lie with the funding council but I have sought to describe as best I can what the Secretary of State has in mind. It is also fair to say that one of the matters put forward in this document that has been referred to—Option A—is very like what I have tried to describe. It adds other matters in language which the noble Lord, Lord Swann, I am sure, could have improved on greatly if he had written it.

But, essentially, Option A is very like what I have described. That is the intention of the Secretary of State. I hope that with that answer the probe has at least achieved its purpose.

Lord Swann

I thank the noble and learned Lord the Lord Chancellor for his response. It has certainly helped my thinking and no doubt that of others as we approach Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 254ZA not moved.]

The Earl of Halsbury moved Amendment No. 254ZAA: Page 113, line 9, at end insert (", provided any term or condition so imposed does not unreasonably constrain that university in exercising its judgment as to the best use of its resources in pursuit of the objectives embodied in its Academic Plan.").

The noble Earl said: With the leave of the Committee I beg to move the amendment standing in the name of my noble friend Lord Dainton who is abroad at the moment. The object of the amendment is to prevent the Universities Funding Council attaching such detailed conditions to a payment it makes to the university that the autonomy of that university is seriously infringed and its room for manoeuvre absurdly constrained. The possibility that this would happen seems more likely in view of Schedule 6. I do not know that the provision at page 189, line 36 of the Bill which empowers the UFC to "enter into contracts" is going to be as disciplined as we might expect from the assurances given us by the noble and learned Lord in the context of the previous amendment.

The principal arguments for this view are the detailed centralist control inherent in the Bill which makes universities mere instruments of the UFC and the removal from the university of any real control over the internal allocation of its resources. This could only demoralise the administrative and the academic staff and diminish their motivation for new initiatives which are the only real forces of innovation in teaching and research. The UFC can never have the degree of knowledge, local or national, which would entitle it to a valid opinion at the level of detail where work is being conducted by Nobel Prize winners.

The Lord Chancellor

I yield to none in my respect for the work of Nobel Prize winners. However, I believe that the amendment which the noble Earl has put forward will certainly provide work for lawyers in that he will set up a standard of unreasonable constraint. I sought to explain the matter earlier on the basis that the conditions would be intended to secure the performance of the academic plan. It is difficult to say by reference to what standard reasonableness should be judged in such a context.

I perfectly understand the thought lying behind the amendment. However, I believe that the amendment would not be an appropriate way in which to constrain the Universities Funding Council in the circumstances which I have described. I hope that the noble Earl will feel able to withdraw the amendment.

The Earl of Halsbury

Naturally I accept the argument of the noble and learned Lord as regards the law. I should not presume to embark on a discussion of legalities with him. As regards his assurances, we are only in the Committee stage of the Bill. The hour is late. Therefore, while reserving the right to return to the matter later, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Adrian moved Amendment No. 254ZAB: Page 113, line 9, at end insert ("Provided always that in determining payments to be made under this subsection to any University the Council shall not make reductions in such payments by reason of funds available to that University from sources other than public funds.").

The noble Lord said: The purpose of the amendment is obvious. It is to put into the Bill what I believe to be the declared intention of the Secretary of State. In his speech to the CVCP in October, he noted that there was a belief that the Government encourage private funding of universities in order to spare the public purse. He continued: That is not so. We have repeatedly said that we will not abate public support if universities succeed in raising more private funds".

The amendment makes that undertaking explicit on the face of the Bill. I believe that its appearance there will greatly encourage the already effective efforts of universities to raise more funds from industry and from private sources. It would also greatly encourage those who control potential sources of non-public funds and remove their apprehensions that contributions from them, however generous, will in the end only relieve the public purse rather than securing additional resources for the university in question. I beg to move.

The Lord Chancellor

The Government have made clear, as the noble Lord has said, that they are seeking to encourage higher education institutions to be enterprising in attracting funds from sources other than the UGC now and the UFC in the future. A diversified funding base is one of the best safeguards of institutional autonomy. Some university interests assert that the Government encourage private funding solely in order to spare the public purse. That is not so. We have consistently made clear, and I confirm now, that our annual settlement of overall public support is entirely independent of university success in raising more private funds, taking the matter as a whole.

The present amendment seeks to build into the relationship between the UFC and the universities the same principle which the Government adopt at the level of the university system as a whole. I have much sympathy with that. Universities would clearly be discouraged from increasing their private funding, as would the benefactors if the Universities Funding Council abated its funding accordingly.

Having said that, there are some pitfalls in that particular legislative approach to the problem. There is a strong case for the Universities Funding Council to take into account the level of funds which universities receive from other sources in ways other than the ones which concern the Committee and particularly the noble Lord, Lord Adrian, in moving the Amendment. Indeed, the UGC does that now in its selective approach to the distribution of the research element of its grant and has the Government's full support in doing so. One of the criteria it uses to support research is the success of the research in attracting income from other sources.

Lord Adrian

I believe that that is an increase in the funding which goes with successful generation of funds rather than a reduction in the payments, which is what my amendment seeks to prevent.

The Lord Chancellor

I am just about to deal with that very point. The total amount that the Government pay out is not affected by private funding. That is the fundamental point. If private funding to university X is high and the research grant to university X is higher, as a result a university which has not been so successful in attracting research money from outside will receive less out of the total. Theefore there is an implied reduction.

That makes it a little difficult to go along with the amendment as it stands. From the reaction of the noble Lord and others I think that that is a proper exercise of the judgment. If the nature of research has attracted substantial private funding from outside, that is a very good indication that the research merits support with public funding as well. The total amount is unaffected and therefore, as I say, the consequence may be a reduction for universities which have not been so successful.

Success is rewarded. That is the point. Success in taking in other funds does not lead to a reduction in public funding. Lack of success may per contra have that effect. I think that the amendment as drafted would also catch that. The result is that more is required. I have studied the matter, and the noble Lord may think it right to study it at leisure to see whether the situation is as I have said.

There is another problem about which the noble Lord will know more than I do. That relates to the rather special universities of Oxford and Cambridge. Because of those universities' collegiate structure the funds which are paid by the University Grants Committee to the universities at the moment are reduced to some extent by either the moneys or the services rendered by the colleges. Those are not public funds but, as they come through the colleges, are private funds. Therefore there are also difficulties in that respect. I think that the present system so far as concerns Oxford and Cambridge is generally recognised to be a fair one, but it might fall foul of the amendment.

Perhaps I may summarise by saying that I doubt whether it would be easy to put the proposal in the legislation in a way which is absolutely fair in all circumstances. I should like to assert as strongly as I can that the Government will make their view crystal clear to the funding councils that, like the universities, the Government and the funding councils will want to see a vital and effective education sector. To reinforce that message the funding councils will be fully aware of the highly undesirable effect on future donations if they were seen to be acting contrary to the spirit of the amendment. I hope that at least at this stage that will give some reassurance to the noble Lord. Certainly the points that I have made may be points which he would like to consider in relation to the legislative drafting.

12.15 a.m.

Lord Howie of Troon

I am greatly interested in the reply of the noble and learned Lord, but must admit that I am rather puzzled by it, although possibly that may be because of the lateness of the hour. It seems to me that the amendment deals with particular universities, that is to say, it deals with universities one at a time; but part of the reply at any rate seemed to deal with universities as a whole. I am not sure that those two ideas are quite concurrent one with the other. It may be that I have not properly understood the matter.

However, I thought I understood from the noble and learned Lord's reply that he was sympathetic to the general notion which underlies the amendment. I should like to hear him say before he sits down—or perhaps later this evening—that he will consider the amendment as it stands and not the amendment as he replied to it, and look into the possibility of coming back with an amendment from the Government which would deal with the point of the noble Lord, Lord Adrian.

Baroness Young

Perhaps I may ask my noble and learned friend, who has I think responded sympathetically to this amendment, whether perhaps he could look at the drafting of it. We all recognise that the noble Lord, Lord Adrian, has raised an extremely important point. I share the view of the Government that universities will have to raise private money and continue to do so for so far as one can see. That is an inevitable fact of life and is something to be welcomed.

It is perfectly clear that those who will embark upon the great campaign of raising more money will need to be able to assure those whom they approach that what is behind this amendment will in fact happen. As the noble and learned Lord will know far better than I, it is the view of my right honourable friend the Secretary of State, who indeed has stated it on more than one occasion, that private money will not be taken into account in the way that this amendment seeks to prevent. Nevertheless, what is said in this Chamber and reported in Hansard does not have the force of law and it is important that we should have something written into the Bill.

I take the two very important points made by my noble and learned friend about where this amendment fails. It may well be that it is incorrectly drafted and no doubt the noble Lord, Lord Adrian, will want to look at it again. Because my noble and learned friend has given it a sympathetic response, I ask him whether the Government will look at this point and between now and the next stage see whether something could be found to give the reassurance that the Government and the Committee want to put the matter right.

Lord Jenkins of Hillhead

Perhaps I may reinforce the remarks of the noble Baroness. The noble and learned Lord approached this matter with general sympathy. He raised two technical objections to the amendment, one of which I found slightly difficult to follow, but I am very happy to accept his view that there may be drafting deficiencies in it.

He recognised the principle. I hope that he also recognises the importance of having something in a statute as opposed to a declaration recorded in Hansard, to which the noble Baroness has just referred. Governments and Secretaries of State can change. I think that it is very important to have something in a statute. Just as we are prepared at this stage to accept that there may be technical deficiencies in this amendment, will he not accept that it cannot be beyond the wit of the government draftsmen to find a formula which can be put into the Bill in order to give expression to the general sympathy that he has expressed? Will he please endeavour to do that before we come to a later stage?

Earl Bathurst

I should like to ask my noble and learned friend the Lord Chancellor and also the noble Lord, Lord Adrian, whether the principles of this amendment will apply also to other colleges, such as technical colleges, and other higher educational establishments, as well as to universities.

Lord Adrian

I should certainly hope so. Perhaps I may say how grateful I am for the support that has been given to this amendment, and indeed for the sympathy with which the noble and learned Lord has received it.

I accept entirely that there may be technical difficulties with the amendment. I shall read very carefully what the noble and learned Lord has said. I should be immensely grateful if the Government were prepared to bring forward at a later stage an amendment that would overcome those difficulties and express the sentiments that I attempted to express. I shall also consider the possibility of bringing forward another amendment later which meets the point that the noble and learned Lord has made. At this stage I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

The Chairman of Committees

If Amendment No. 254A is agreed to, I cannot call Amendment No. 254ZZA.

Earl Russell moved Amendment No. 254A: Page 113, line 13, leave out ("in such manner as he may from time to time determine,").

The noble Earl said: I rise to move this amendment on behalf of my noble friend and myself. There are a good many passages in this Bill which caused me a considerable sense of shock when I first read them. There are very few that caused me more shock than the words here. It is something which in all ages rulers have tried to acquire: to have control over the flow of advice so that they do not receive unwelcome and unsolicited advice. There is equally a very long tradition of trying to ensure that rulers who want this do not succeed in getting it.

A number of Members of the Committee who have talked to us on the subject of Christian culture could well have looked in this context at the remarks made by Aristotle and St. Thomas. Aquinas on the subject of tyranny. This is one of the definitions of tyranny: to be able in this way to control the flow of advice; to be able to control unsolicited or unwelcome advice. There is a great deal of truth in the principle that in a multitude of counsellors there is safety.

If our university system is to continue it is essential that somebody should be capable of alerting the Secretary of State to the damage which has been done, is being done and if things continue will be done before it is too late. This matter has already arisen on the subject of the National Curriculum Council. The Committee has already been divided on this almost identical point. This is not an accidental oversight of drafting. This is at the very heart of the thinking that produced this Bill. It seems to me that we are looking here at an example of the arrogance of power.

Lord Howie of Troon

I wish very briefly to ask a question on this. As I understand it, Clause 115(7) provides that the council shall have power, to provide the Secretary of State, in such manner as he may from time to time determine which seems rather objectionable— with such information … as they think fit". Does this mean that it has the power to give him no information at all, and no matter in what manner he may from time to time determine, if the council thinks fit, it can say, "It is very nice to hear from you but we do not intend to give you that information."?

The Lord Chancellor

Perhaps I should answer the second point first. This is a provision which gives the council power to provide the Secretary of State with information. In other words, it gives it an initiative. It is not dealing with whether the Secretary of State can ask the council for information. It is the initiative of the council that is here in question.

The amendment is directed to leaving out the phrase, in such manner as he may from time to time determine". That phrase does not in any sense limit the flow of information. It deals only with the manner in which the information may be given. So I do not accept for a moment that it limits the flow of information in any sense.

The Government fully recognise the importance of having bodies that can make disinterested assessments of the financial position of those they fund. There is not the slightest doubt that the Government must have advice and information in reaching decisions on the levels of public funding for higher education. Nor has there ever been any doubt that the funding councils should advise on this, or that the Government will actively seek such a dialogue, as indeed they do now. In fact, we believe it to be implicit on the Bill as introduced that such a dialogue would take place, but, recognising the concerns expressed, amended the Bill in another place to give the councils an explicit power to advise.

But in our view there is a perfectly respectable case for saying that funding council advice should be conveyed in a manner to be determined from time to time by the Secretary of State. Without that caveat they would not be in the kind of relationship with the Secretary of State which the nature of their responsibilities suggest as being wise.

The UFC and the PCFC need to go hand in hand with the Government, with a mutual confidence between them and the Government, if the partnership is to be a successful one. There will obviously be occasions when communications between the councils and the Government should be confidential and others when they should be public. Under the clause this would be considered by the Government and the councils as circumstances demanded. That simply provides in statute for what already happens with the UGC.

When the Government brought forward their amendment in another place, it was suggested in an article in the press that they had broken the commitment that my right honourable friend had given to the Committee of Vice-Chancellors and Principals. Sir Mark Richmond, chairman of the committee, wrote of that: I do not agree with your report that Mr. Baker has back-tracked on his commitment to empower the Funding Councils for higher education to give advice to the Government. The wording of his amendment, while less all-embracing than the Vice-Chancellors' Committee might have chosen, makes clear that the Secretary of State will not have the power to determine whether, or when, or on what topics (including finance) the Councils give advice. He will determine only in 'what manner', i.e. whether publicly or privately, this is done. There can be advantages in giving advice in private; it can be blunter. Nor do I believe that any chairmen of the Funding Councils worth their salt will be muzzled". In my submission, these are wise words and they were echoed by the noble Lord, Lord Dainton, at the Second Reading of the Bill in your Lordships' House.

The funding councils will be independent bodies. Their members will not be merely agents of the Secretary of State and I anticipate no difficulties nor any limitation on the flow of information if the clause is left as it is. I hope that the noble Earl will feel able in the circumstances to withdraw his amendment.

Lord Annan

Will the noble and learned Lord confirm that this phrase, in such manner as he may from time to time determine", is to be found in many statutes of colleges? It is the normal phrase which is used when one person—the Master or Provost of a college—has to have authority to get something done. It is a normal legal phrase.

The Lord Chancellor

Certainly, I believe that it is quite a normal phrase, and what I say is that it is a very appropriate phrase in the circumstances of this provision.

Lord Howie of Troon

Is not this the opposite of what the noble and learned Lord said? It is not a matter of the master—in this case the Secretary of State—wanting to get things done. It is a matter of the council having the power to give him something in such manner as he thinks fit. While I am on my feet, will the noble and learned Lord confirm that, in such manner as he may from time to time determine", means nothing more than in private or in public, in which case nobody would object very greatly?

The Lord Chancellor

It means that among other things. For example, it could be verbally or in writing. It could be at a meeting, although the precise manner may not be as restricted as that. However, private or public would be one of the possible options.

Lord Peston

I am less than happy about this matter. As the noble and learned Lord said, I believed that this was a matter of public versus private. That makes a difficulty for me because I believe that such things should generally happen in public. Let us assume that, instead of providing: in such manner as he may from time to time determine", it provided for: in such manner as he or they"— "they" being the council— from time to time determine". In a sense that would provide the partnership referred to by the noble and learned Lord. I do not doubt that on occasion there should be some private conversation on such matters, although I do not like it. However, I believe that the essence of the matter is that it should be public. Even more important, the council should be in a position to give the Secretary of State advice which he finds unpleasant, as I argued in relation to another amendment. It should be in a position to give the Secretary of State advice that he does not want. That is exactly what the issue is about. I fail to be reassured because the paragraph as written suggests the opposite of that.

I may have misunderstood, but on my reading the paragraph refers to advice relating to activities eligible for funding; it does not refer to advice for funding. Therefore this is about the academic aspects of the matter rather than the funding aspects. I believe that it should give him advice on activities eligible for funding but it should be made abundantly clear that it is independently able to give that advice whether or not it is asked for. That seems to me to be the essence of the issue. I speak not as a lawyer but as a lay person and I do not read the paragraph as in any way guaranteeing that position. If I were on the funding council I would not feel that I was in a position to do that, and that is the nature of the problem.

The Lord Chancellor

That is an important point and in answer to the noble Lord I should like to say that the council has power: to provide the Secretary of State, in such manner as he may from time to time determine, with such information and advice relating to activities eligible for funding under this sectionas they think fit". In other words, it decides what advice is to be given. The only thing that the Secretary of State has power to do is to determine the manner in which the advice is given. Therefore the nature of the advice is theirs. He may not like to hear it but he must. The only thing he can determine is the way in which he must hear it. That is definitely so and it is not a matter for a lawyer but of reading the words.

Earl Russell

Sadly I find it difficult to follow that reassurance. For me the noble Lord, Lord Peston, has spoken very clearly. I agree that a dialogue is needed but on this occasion I find it hard to be convinced that one party controlling the terms and forms of the dialogue can entirely be trusted. The noble and learned Lord has spoken assuming a situation of trust to exist. Members on this side of the Committee have been telling him all night that that situation no longer exists. I wish to press the amendment.

12.34 a.m.

On Question, Whether the said amendment (No. 254A) shall be agreed to?

Their Lordships divided: Contents, 15; Not-Contents, 34.

DIVISION NO. 3
CONTENTS
David, B.	Peston, L.
Dorman of Easington, L.	Ponsonby of Shulbrede, L [Teller.]
Grey, E.
Grimond, L.	Rochester, Bp.
Howie of Troon, L.	Russell, E.
Jenkins of Hillhead, L.	Seear, B.
Lockwood, B.	Tordoff, L. [Teller.]
McNair, L.	Winstanley, L.

NOT-CONTENTS
Annan, L.	Hives, L.
Bathurst, E.	Hooper, B.
Beaverbrook, L.	Johnston of Rockport, L.
Belstead, L.	Long, V.
Blatch, B.	Mackay of Clashfern, L.
Brabazon of Tara, L.	Monk Bretton, L.
Butterworth, L.	Morris, L.
Cameron of Lochbroom, L.	Reay, L.
Cowley, E.	Saint Oswald, L.
Cox, B.	Saltoun of Abernethy, Ly.
Craigmyle, L.	Sanderson of Bowden, L.
Davidson, V. [Teller.]	Selborne, E.
Denham, L. [Teller.]	Skelmersdale, L.
Eden of Winton, L.	Swann, L.
Ferrers, E,	Thomas of Gwydir, L.
Halsbury, E.	Thomas of Swynnerton, L.
Hesketh, L.	Trafford, L.

Resolved in the negative, and amendment disagreed to accordingly.

12.40 a.m.

The Earl of Halsbury moved amendment No. 254ZZA Page 113, line 13, after ("he") insert ("or the Council").

The noble Earl said: I move this amendment on behalf of my noble friend Lord Dainton, who is the architect of it. The clause upon which we have just voted having withstood all dangers, I am now free not to abolish it but to extend it by writing into the Bill the assurance that the noble and learned Lord has given us about a two-way flow.

In doing so I should like to pray in aid a note which I have received from my noble friend Lord Dainton, who, as I told the Committee, is abroad. He writes in his capacity as an ex-chairman of the University Grants Committee as follows: My experience and that of predecessors in the UGC which pertains to this relationship leads me to the conclusion that the UFC will know much more about the universities than the Secretary of State as advised by his DES officials and therefore, the UFC will be aware of problems and opportunities about which the Secretary of State needs advice or information long before he and his officials are aware. As this section is at present drafted it would prevent the UFC from proffering advice and information and the purpose of the amendment is to allow the Council to do so. Again in my experience the need for two way traffic between the UGC and the Secretary of State was absolutely essential to the effective operation of the UGC as a part of the machinery of government. A similar relationship should exist between the statutory body and the parent department. As chairman of two other statutory bodies (the British Library Board and the National Radiological Protection Board) this was also my experience". I beg to move.

The Lord Chancellor

The situation is that a determination is required and it seems right that that should be a determination by the Secretary of State. I do not see that it could be an alternative to the council in the way in which this clause proceeds. As I said on the earlier amendment, Sir Mark Richmond appeared to believe, from the quotation that I read from him, that this was a reasonable arrangement. I hope that the noble Earl will feel that someone has to determine the manner, and where it has to be someone the Secretary of State would be the appropriate person.

The Earl of Halsbury

The point that my noble friend Lord Dainton makes in the note that I prayed in aid is that the council had become aware of situations where the Secretary of State needs advice before he himself becomes aware of them because of the council's greater knowledge of what is going on. Therefore, to write into the Bill its right of advising him spontaneously seems good sense.

The Lord Chancellor

There may be some misunderstanding between the noble Lord, Lord Dainton, and myself and possibly also the noble Earl, Lord Halsbury. The Universities Funding Council will have the right to take the initiative. The only question is on the manner in which the communication should be done. That could be determined by the Secretary of State through a much more general determination than in relation to particular pieces of information.

For example, it might be quite right for him to say that he would expect the UFC to tell him by confidential letter in the first instance. If the council thought it right that it should be published, it would draw that to his attention and he would have the right to make that determination. The initiative for information going to the Secretary of State could well be with the council, without the necessity of putting a double determination. Where a determination is called for, only one authority can do that.

The Earl of Halsbury

The hour is late and I think it would be wrong to take up more time in sorting out what may possibly be a misunderstanding between my noble friend and the noble and learned Lord. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.45 a.m.

Earl Russell moved Amendment No. 254AA: Page 113, line 16, at end insert— ("( ) to present to Parliament an Annual Survey of its own activities, including a financial statement, and a triennial report on University development").

The noble Earl said: I hope that I may be a little less controversial this time. The amendment is one on which I hope to enjoy the support of the noble Lord, Lord Butterworth, as it is in words, as he will no doubt recognise, directly from the report of the Croham Committee. I refer to Recommendation No. 26.

The Croham Committee said that essential to proper discussion of university matters is the free flow of data, especially to this Chamber and to another place. Since I arrived in this place I have discovered two things about the state of debate on this subject. They are both matters on which I shall find it very difficult to convince my colleagues. First, I have found that there exists in this place a depth of good will towards universities that most of my colleagues believed had long ago disappeared. That is a very pleasant finding.

On the other hand, it is a somewhat dismaying fact, and one that many of my colleagues are equally unwilling to accept when I go back and tell it to them, that there is a degree of ignorance, both in public and in private conversation, about the extent of financial hardship now being suffered in the universities. This has surprised me very much. We do not have a sufficiently informed public debate on this subject. It is a mistake that universities should not allow to happen again, and, if this Chamber is concerned about the standards of its debates it should not allow it to happen again either.

The noble and learned Lord the Lord Chancellor dwelt on the importance of private advice. I have nothing to say against that but it is important that information should also be available in public which can be the basis of debate and can help to form the climate of opinion within which policy may be made. As this recommendation of the Croham Committee was before the Government when they drafted the Bill, and as the Government constantly speak so warmly of the Croham Report, I should be interested to know why this provision is not already in the Bill. I beg to move.

The Lord Chancellor

I certainly agree that Parliament will want to know what the UFC is doing. I would expect the decisions of the council to be announced rather as the UGC decisions are announced at the present time. It is provided that the UFC will report formally to Parliament by accounts on the use of the funds at its disposal. The necessary provision is made for this in paragraph 16(2) of Schedule 6, under which both the council's statement of accounts and the Comptroller and Auditor-General's report on them will be required to be laid before both Houses of Parliament. To require anything more than this seems at best superfluous and at worst the kind of time-wasting distraction that none of us would like to see.

The difficulty of a really accurate and full report coming out timelessly is illustrated, for example, by the experience of the UGC survey for the academic year 1985–1986, which was published towards the end of 1987—some two years after the developments it described. I do not know how many Members of the Committee have read the document. I am sure some have; but I am equally confident at least one of two may not have done so.

However, the situation is that the accounts of the UFC are to be laid before Parliament, with the proper examination and report on them which one would expect. I should have thought that that was the best form of report to Parliament from the UFC, coupled with the intimations which it will make, as at present, of its decisions. Of course, such matters are subject to the Public Accounts Committee, and the accounting officer of the UFC will be available to be questioned by that committee of another place. The one aspect that will not be missing is information about the activities of the Universities Funding Council.

I hope that in the light of that explanation, especially the fact that annual accounts must be laid before Parliament properly authenticated, the noble Lord may feel able to withdraw his amendment.

Earl Russell

I am extremely sorry to hear the proper informing of Parliament described as a time-wasting distraction. With respect, the noble and learned Lord has not entirely taken on board the purport of the amendment. It is not merely a matter of informing this Chamber or another place of what individual decisions the UFC has taken. It is not only a matter of ensuring that the accounts are open and above board.

When the Croham Committee spoke of a triennial report on university development, I am sure—I hope that the noble Lord, Lord Butterworth will confirm this—it was thinking of a much wider concept. The phrase, to me at least, suggests a report trying to indicate whether the system is working; where its strengths are; where its weaknesses are; where the shoe pinches; where there is scope for contraction; and where there is scope for expansion. Such matters need to be placed before Parliament if it is to conduct an informed debate.

I shall, for the time being, most reluctantly withdraw my amendment, but I do not regard the reply I have received as a satisfactory one. I hope that when we return to the Bill on Report something rather more forthcoming may be available. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hooper moved Amendment No. 254AB: Page 113, line 17, leave out from ("provide") to ("may") in line 19 and insert ("on such terms as may be agreed, such advisory services as the Department of Education for Northern Ireland or the Department of Agriculture for Northern Ireland").

The noble Baroness said: Clause 115(7)(c) of the Bill already provides for the UFC to advise the Department of Education for Northern Ireland on the funding of universities in the Province, in the same way as the UGC does now. This amendment expands that paragraph so as to make a similar provision for the separate relationship between the UGC and the Department of Agriculture for Northern Ireland to continue on the establishment of the UFC. Given the aim of clarifying responsibilities, we feel that this too should be covered by legislation rather than being left as a non-statutory provision.

Therefore, this essentially technical amendment helpfully further clarifies the UFC's advisory function in respect of Northern Ireland. I commend it to the Committee. I beg to move.

On Question, amendment agreed to.

Lord Grimond moved Amendment No. 254B: Page 133, line 27, after ("may") insert ("reasonably").

The noble Lord said: The only reason I rise at this terrible time in the morning to move the amendment is to make a brief plea to the Government that if and when the Bill is enacted they will make some effort to reduce the amount of administration and stress under which the authorities in universities have been suffering, in my experience, for the past three or four years. It is extremely wearying to be trying constantly to make money go further than it should and, at the same time, to be deluged with demands for returns, and to have to sit on innumerable committees, and so on.

In my view, should this state of affairs continue, the Government will find great difficulty in encouraging people of high calibre to become vice-chancellor or principal of universities. On behalf of universities, I merely draw that fact to the Government's attention in the hope that they will show some sympathy for the plight of the universities.

The Lord Chancellor

Perhaps the best thing I can say is that my right honourable friend has no intention of unreasonably pressing for information. The information that he would like given to him is information that it would be reasonable to require. I do not believe that it is necessary to express that point in the way it is in the amendment.

I hope that the noble Lord will not feel it is necessary either. As I said earlier, it is not easy to lay down a legal standard of reasonableness in this situation. The Secretary of State is very reasonable.

Lord Grimond

The noble Lord does not feel it necessary to press the amendment to a Division. He will gladly withdraw it, although I thought that the glimmer of hope was rather thin.

Amendment, by leave, withdrawn.

[Amendments Nos. 254C to 256 not moved.]

On Question, Whether Clause 115, as amended, shall stand part of the Bill?

Earl Russell

This is in some senses an exploratory Motion. On Second Reading I said that I was not at all clear why the Government wished this clause to be in the Bill. I cannot say that I am any clearer now than I was then. So far as I can see the UGC system, as far as anything does these days, was working reasonably well. It seemed to be a case of the good old American maxim, "If it isn't broken, don't fix it".

We have heard such a variety of justifications for Clause 115 that I grow, like my noble friend Lady Seear, more confused as the debate goes on. It is legitimate to ask what sort of outcry there would be on the Conservative Benches if at some future date a government drawn from these Benches should enact that because of the high quality of British universities every British boardroom should contain an academic majority. Such a proposal might be sharply resisted.

We are not resisting such a proposal. The universities are taking the line that they have nothing to hide and that there is no reason why friends should not be made of people who are capable of being properly informed, but that if something which is obviously a gesture of hostility is being brought our way, before letting it go through we want to receive some explanation as to why it is being done.

I do not know what I shall do on this Motion. What I do will depend heavily on the reply that I receive. I shall listen to it with a great deal of interest.

The Lord Chancellor

The purpose of Clause 115 is to define the powers of the UFC, having established the UFC. At present the universities are funded by the Secretary of State by means of the UGC, with no statutory backing whatsoever. Large sums of public money are disbursed annually to universities and it is proper that those arrangements should be put on a statutory basis.

Clause 115 is for the purpose of putting these arrangements on a statutory basis. There is a parallel provision in Clause 116 for the Polytechnics and Colleges Funding Council. That in a way is more of an innovation than Clause 115. When it is appropriate to make arrangements for the Polytechnics and Colleges Funding Council, it would seem very strange not to make appropriate arrangements for the universities' funding also. The Universities Funding Council is a statutory body set up by Parliament to provide the appropriate machinery for public funding of the universities in a way that is open, accountable to Parliament as an independent statutory body, giving an account of itself by means of its accounts to Parliament and the Public Accounts Committee, with proper audited accounts and so on.

It is right, surely, in the interests of the independence of the universities that there should be a proper statutory body whose powers and functions are scrutinised by Parliament and eventually given by Parliament to stand between the Secretary of State and the universities. The universities surely deserve as much.

1 a.m.

Earl Russell

Before the noble and learned Lord, the Lord Chancellor sits down, will he tell us that there are no other purposes in setting up the Universities Funding Council?

The Lord Chancellor

There are no other purposes in setting up the Universities Funding Council than to create a universities funding council with statutory powers, accountable to Parliament. That is the reason for it, as I understand it. It is to make efficient arrangements along the lines suggested by the Croham Committee, which studied the situation in the universities. After all, the University Grants Committee has been running a long time. The amount of money now going through it is very large indeed. It seems right that there should be proper arrangements and that is the reason for these provisions.

Earl Russell

Perhaps I may thank the noble and learned Lord, the Lord Chancellor, for that assurance, which I welcome. I shall press the matter no further at this time.

Clause 115, as amended, agreed to.

[Amendment No. 256A not moved.]

Clause 116 [Polytechnics and Colleges Funding Council]:

[Amendments Nos. 257 to 261 not moved.]

Baroness Hooper moved Amendment No. 261A: Page 114, line 8, leave out ("facilities and the carrying on of other activities by such institutions") and insert ("any facilities and the carrying on of any other activities by such institutions which the governing bodies of those institutions consider it necessary or expedient to provide or carry on for the purpose of or").

On Question, amendment agreed to.

Baroness Cox moved Amendment No. 262: Page 114, line 9, at end insert— ("educational research, including those non-advanced courses in the Inner London polytechnics which are of national character and repute and whose funding support may be in question after the dissolution of the ILEA under this Act;").

The noble Baroness said: I am moving this amendment on behalf of my noble friend Lord Onslow. The polytechnics in inner London face a particular difficulty in relation to their non-advanced work, much of which is of a national rather than a local character. After the proposed dissolution of ILEA, it will fall to the individual boroughs in which the polytechnics are located to support this work. This seems inappropriate to its character. Indeed, many of the courses traditionally recruit from the nation as a whole. An individual borough might therefore justifiably feel reluctant to provide support. This amendment proposes that provision should be made for the new funding council to give national funding for a limited number of such courses, as appropriate. I beg to move.

The Lord Chancellor

This amendment raises the important question of the future of certain nationally significant lower level courses of further education currently provided in polytechnics and colleges transferring to the Polytechnics and Colleges Funding Council sector. The Government recognise that this is a matter of concern both within the ILEA polytechnics and more widely.

The amendment would have the effect of explicitly including such courses provided now in inner London polytechnics among the activities eligible for funding by the Polytechnics and Colleges Funding Council. The amendment is, strictly speaking, unnecessary. Clause 116(5) already provides that the provision of education should be among the activities to be eligible for PCFC funding. That is drawn quite widely enough to include the courses of further education referred to in this amendment.

What will determine whether the PCFC in fact supports such courses is whether the council itself is funded to do so. The Government's view is that funding responsibility for further education within the PCFC sector should rest with the local education authorities' continuing strategic responsibility for the local provision of further education restated by Clause 104. It is thus to ILEA and, following its abolition, to its successor authorities that the inner London polytechnics and colleges within the PCFC sector will need primarily to look to contract for their further education provision. The Government, however, recognise that there is a category of specialist further education courses provided in a few centres only and recruiting from all over the country which will fit less easily into local authority strategy for local provision.

The Government hope that local authorities will nevertheless recognise a responsibility to fund these courses as effectively trustees for the nation. Where they do they will be able to take advantage of well established arrangements to recover the costs of students from outside their areas from the students' home authorities.

This is the best arrangement. The Government are currently consulting the local authority associations and the heads of transferring polytechnics and colleges about this matter. We should expect to announce conclusions about it shortly.

I hope that, against a background of these consultations and the fact that further education is already under the terms of the Bill eligible for PCFC funding, my noble friend will feel able to withdraw the amendment.

Baroness Cox

I am most grateful to my noble and learned friend for that clarification which I am sure will help to allay the anxieties of those concerned. With that grateful appreciation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 262A to 263ZA not moved.]

Clause 116, as amended, agreed to.

Clause 117 [The Funding Councils: supplementary provisions]:

Lord Peston moved Amendment No. 263A: Page 115, line 6, after ("may") insert ("after consultation with the appropriate Council").

The noble Lord said: This amendment has been grouped with some others and I should like with permission to just say a few brief words on these amendments.

It is with great regret that one comes to this matter which we think is fundamental at such a late hour. It is concerned with the powers of the Secretary of State and how he exercises them. Essentially all we wish to do at this stage is to make the point that we remain extremely unhappy about the powers of the Secretary of State in this connection which do not seem to be limited in ways that they should be. Therefore I would draw the attention of the Committee and particularly of the noble and learned Lord the Lord Chancellor to Amendment No. 263CB, which states that, no such order shall be made".

This is simply a word of warning for the record. We do not expect to debate this matter at this hour but we believe that at some point we must debate it in detail before the Bill gets a long way further. I beg to move.

The Lord Chancellor

I note what the noble Lord says and I hope that perhaps we may be able to reassure him eventually. There is a fair amount to say about these amendments grouped together and certainly I shall listen to anything that the noble Lord has to say in due course. I understand that tonight may not be the most convenient time.

Lord Peston

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 263B to 264 not moved.]

Clause 117 agreed to.

Lord Perry of Walton moved Amendment No. 264A: After Clause 117, insert the following new clause:

("Duty of Councils etc. with regard to institutions of higher education.

.—(1) It shall be the duty of—

1. (a) the Universities Funding Council in respect of the universities;
2. (b) the Polytechnics and Colleges Funding Council in respect of higher education corporations;
3. (c) the Secretary of State in respect of institutions of higher education funded directly by the Department of Education and Science,

to exercise their functions with a view to ensuring that the institutions are enabled to satisfy the requirements of this section.

(2) Each institution of higher education shall be deemed to have satisfied the requirements of this section if it—

1. (a) provides courses of study leading to first degrees at academically acceptable standards together with such other qualifications as may be agreed;
2. (b) provides facilities for its staff to maintain academically acceptable standards of scholarship and research;
3. (c) provides opportunities for continuing education and training in the subjects of its curriculum at the higher education level to meet the needs of local society and industry;
4. (d) maintains freedom for its staff to teach and publish without interference.").

The noble Lord said: This is an attempt at a very general amendment. I was not very happy with the wording that I produced. The past five hours have made me even more unhappy. On the other hand, I think it is important to say a few words about the amendment.

There is very little in this Bill to indicate what the funding councils are expected to do. There is a great deal in the Croham Report, in the White Paper and in many other government documents, but in the Bill all that is said in Clauses 15 and 16 in relation to the powers and functions of the funding councils—I paraphrase it—is that they are responsible for administering funds to support activities eligible for funding, and the eligible activities are defined simply as the provision of education and the undertaking of research. That is a very loose description of what the funding council should do. There is no indication of the kind of education required, the standard or its level. There is no indication of the standard of research.

It is very difficult to spell out such things in statutes. But, as I have said, the present wording is so loose as to be almost meaningless. I think that that is one of the causes of the fears which have been widely expressed in the academic and research world. There are many who have little trust in the Government's commitment to high standards of scholarship and research. There are also worries that any future government may interpret the Act in any way they choose.

Up to now there has been no statutory requirement on government in relation to higher education. However, the UGC and the NAB are not statutory bodies and the funding councils are. Should that not mean that the duties of the new statutory bodies should be defined by statute in a tighter way than the present clauses provide? That is the purpose of the amendment. It is modelled on Clause 1 of the Bill and lays upon the funding councils duties to fund the institutions so as to ensure that they can fulfil four functions. The first two are similar to the functions already incorporated in Clauses 115 and 116. The only significant difference is that, under the amendment, teaching, scholarship and research would have to be funded to, academically acceptable standards". That is also a vague and imprecise term. However, it is no more vague and imprecise than the present wording and it would allow argument to be brought from both home and abroad as to what is academically acceptable.

The third function relates to continuing education, which is the subject of another amendment. The fourth function is my own rather inadequate attempt to ensure that academic freedom is maintained without actually defining it. I am no parliamentary draftsman. No doubt any competent draftsman would drive a coach and horses through my amendment. My purpose in moving it is to persuade the Government to produce an alternative which will accomplish, at least in part, what I hope will appeal to the Committee as a reasonable proposal; namely, that Parliament and not just the Government should have something to say in the Act about what the new funding council should do. I beg to move.

Baroness Lockwood

I support the amendments and I shall address particularly that part of the amendment which deals with continuing education. Like the noble Lord, Lord Perry, I expressed my disappointment at the Second Reading of the Bill that continuing education did not seem to feature to any considerable degree. The value of the two amendments before us is that they place continuing education as a central objective of higher education in this country. They give continuing education a statutory basis.

The second amendment also requires the Secretary of State to ensure that adequate provision is available and that a new council is established for that purpose. On a number of occasions we have debated the importance of continuing education. We have debated it on the basis both of economic and demographic factors. We have had several excellent reports on the subject, including the reports from the UGC and the NAB. The fact remains that little has been done and continuing education is still regarded as the Cinderella of our higher education system, particularly in the university sector.

What little progress has been made in expanding continuing education has been achieved despite Government and public funding policy for continuing education. I think that there are a number of disincentives to universities to embark upon a comprehensive programme of continuing education. If one looks, for instance, at the provision of part-time courses in universities, one finds that, although the funding for full-time equivalent is the same for part-time degree students as for full-time degree students, there is nevertheless a financial disincentive because it is more expensive to educate part-time students. It is more expensive for the institution to provide for part-time students than for full-time students. Therefore universities do not make such provision.

Having said that, so far as concerns the country as a whole, it is economical to provide part-time education because statutory grants are not provided for students in part-time education. That raises a quite different problem, and a problem particularly for women. But the fact remains that at the moment, for the nation as a whole, it is more economic to provide part-time education.

As I mentioned at Second Reading, the provision of the pick-up programmes has been the Government's major contribution to continuing education. Yet if we examine what is happening under the pick-up scheme we find that there is a plethora of short-term projects, short-term funding and short-term jobs. There is no opportunity for universities to plan targets for continuing education on a long-term basis. Therefore again there is a disincentive for the universities in this field.

While, as the noble Lord, Lord Perry, has said, the wording may not be perfect, I hope that the Government will accept the principle behind the two amendments, which is to provide the necessary framework for making continuing education one of the major objectives in our higher education system.

The Lord Chancellor

On behalf of the Government I sympathise with the sentiments behind the amendments proposed by the noble Lord, Lord Perry, and the noble Baroness, Lady Lockwood. At the heart of the amendments lies the noble Lord's commitment to continuing education. Perhaps I should say his continuing commitment to continuing education, to which he has already made very important contributions, for example, as Vice-Chancellor of the Open University for I think as long as 11 years and most recently as chairman of the Standing Committee on Continuing Education set up jointly by the UGC and the National Advisory Board. I know that it provides valuable advice to institutions and more widely.

Having said that, I have to emphasise, first of all, that there is a good deal that I could say so far as concerns the amendment, which seeks to set standards. Perhaps for tonight I should merely say that the way it is phrased suggests that the Universities Funding Council and the Polytechnics and Colleges Funding Council would have the duty of deciding what are academically acceptable standards of scholarship and research. In a sense, that appears to me to run counter to the idea of the freedom of the universities and colleges to decide what their standards ought to be.

I think I am right in saying that all the institutions that would be funded—certainly all the universities—will have the purposes of the university stated in their founding documents. It is from that that the standard is set. Therefore it is sufficient that the funding council should have power to fund such an institution on conditions, because it is then to be supposed that the money will be applied to the purposes of the institution. Those purposes will be to reach what the institution decides are academically acceptable standards.

So far as concerns continuing education, even at the higher education level, for example, the spectrum of provision for students returning to education after a period of employment or time spent otherwise could not be much wider, ranging from short vocational courses that are often provided on a local basis as a result of collaboration between individual institutions and individual companies to conventional full-time or part-time degrees provided nationally for postgraduate courses or research.

Given that range of provision, how is it possible to disentangle continuing higher education from the rest of higher education, which would be necessary if the UFC and the PCFC were to fund the latter and the continuing Education Commission the former? I simply do not believe that the institution could operate or be expected to operate in a way that would allow that. The proper method of providing for continuing education is as part of these provisions, which are broader than continuing education but which include it.

The noble Baroness referred to imperfections in the present arrangements for continuing education, but the Government believe that the best interests of continuing education are served by retaining diverse arrangements which arise from the diverse needs for continuing education and the diverse circumstances in which it would be required. Our higher education institutions already have suitable statements of purpose which effectively cover all that lies behind these amendments. One of the strengths of our higher education is that it is only partly overseen and can expect to be more productive because it is not too tightly controlled.

I think that the sentiment that has run through much of our discussion tonight and also the Second Reading debate is that of freedom for the universities and institutions of higher education so that they may respond responsibly without statutory impositions to the needs that are expressed to them. That is the philosophy behind the Bill and I hope that, with the needs of continuing education very much in their minds, the noble Lord and the noble Baroness will see that as the best way forward. In the light of that explanation, I hope that the noble Baroness may feel able to withdraw these amendments.

Lord Perry of Walton

I thank the noble and learned Lord for that explanation. Before withdrawing the amendments I should like to make one point on each of them. First, the fear that is rampant in many quarters in the academic and research worlds is not that the funding councils will define acceptable academic standards for the universities but that they will not fund the universities at a level that the universities decide is academically adequate or that other people will so decide.

I said that the wording I used was probably very bad and that one could drive a coach and horses through it, but I should like to feel that the Government will come back with better wording that covers the points that I have been trying to make.

In relation to continuing education, the idea behind my amendment was that the funding council should be responsible at least in part for creating the commission, and that it would work in parallel with the funding councils and give statutory authority to the non-statutory standing committee that I have had the privilege of chairing for the past few years. I am quite sure that in the new situation a similar committee is very badly needed. That could be created without a statutory authority, but it would be very much more effective, and have much more power to its elbow, if it were so created under the statute.

At the moment I am happy to withdraw both amendments but I should like to retain the right to come back later.

Amendment, by leave, withdrawn.

[Amendments Nos. 264B to 264D not moved.]

Clauses 118 to 120 agreed to.

Clause 121 [Schemes for financing locally funded further and higher education]:

[Amendments Nos. 264E to 264G not moved.]

Clause 121 agreed to.

Clause 122 [Preparation and imposition of further and higher education funding schemes]:

[Amendment No. 264H not moved.]

Clause 122 agreed to.

Clause 123 [Replacement and variation of further and higher education funding schemes]:

Baroness Hooper moved Amendment No. 264J: Page 121, line 1. leave out ("Subsection") and insert ("Subsection (4) and").

The noble Baroness said: In speaking to this amendment I speak also to Amendment No. 264K. Amendment No. 264J relates to the duty of local education authorities to consult about any changes to schemes. As Clause 123 is drafted, the duty contained in Clause 122, which requires that the local education authority must consult the governing bodies of all colleges when drawing up a scheme, would also apply whenever the local education authority subsequently wanted to make a minor change to the scheme. In some cases this would be excessive. The proposed change might be wholly trivial or technical. It would not make sense to require a full-scale consultation exercise with all colleges before the change could be made.

The effect of this amendment is therefore to disapply the requirement to consult governing bodies about minor variations to schemes. This does not of course prevent a local education authority from carrying out whatever consultation it sees fit about such changes; but that will be a matter for its judgment. The duty to consult governing bodies about all variations to schemes will remain.

The further amendment concerns the arrangements for notifying my right honourable friend of minor changes to schemes. At present Clause 123 provides that where a local education authority wants to make a minor change to its scheme, it can do so without getting the Secretary of State's approval. But it has to send brief particulars of the change to the Secretary of State; and if the Secretary of State judges it necessary he may ask for full particulars of the change; and it will be for him to determine whether any proposed change does in fact count as minor or not.

These amendments will increase the ease with which any necessary changes can be made to schemes. I beg to move.

On Question, amendment agreed.

Baroness Hooper moved Amendment No. 264K: Page 121, line 12, after ("State") insert ("before the end of the period of two months beginning with the date on which he receives notification under subsection (7) above of the authority's proposal,").

On Question, amendment agreed to.

Clause 123, as amended, agreed to.

Clause 124 agreed to.

Clause 125 [Further and higher education funding schemes: determination of budget share]:

[Amendment No. 264L not moved.]

Clause 125 agreed to.

Clauses 126 to 129 agreed to.

Clause 130 [Delegation of powers as to appointment and dismissal of staff]:

[Amendments Nos. 264M and 264N not moved.]

Baroness Hooper moved Amendment No. 265: Page 126, line 17, leave out ("teaching and non-teaching").

The noble Baroness said: In speaking to Amendment No. 265 I should like also to speak to Amendments Nos. 266 and 267 which are designed to clarify the powers which governing bodies have to determine what staff are needed for the purposes of each college.

The delegation of powers over staffing matters from local education authorities to governing bodies is an essential part of the delegation package. Without that financial delegation would have little meaning. We want governing bodies to be able to manage colleges. The staff, both teaching and non-teaching, are by far the most important resource of any college. The power to manage must therefore include the power to manage the staff. This principle is already clear in Clause 130, and we feel that we should put beyond doubt exactly what key powers we expect governing bodies to have in this area. Similar amendments were added last week dealing with the appointment of non-teaching staff in schools with financial delegation.

Amendment No. 266 specifies what discretion the governing body should have over the duties, hours of work, grading and remuneration of staff. As I said, it is a key part of delegation that governing bodies should be able to manage staffing matters effectively. These amendments help to clarify the allocation responsibilities in this area and I commend them to the Committee. I beg to move.

On Question, amendment agreed to.

1.30 a.m.

Lord Peston had given notice of his intention to move Amendment No. 265A: Page 126, line 19, after (institution") insert ("having regard to any guidance issued by the authority as to the appropriate level of its complement").

The noble Lord said: Very briefly I should like to reiterate a point that I made earlier. This and the related amendments grouped with it give us considerable concern about the employment of staff and employing practices. They are down essentially to get a degree of clarification, but they require fuller treatment than we could make available at this hour. Therefore I simply give notice on behalf of myself and my friends that we think this is a rather important part of the Bill and we shall wish to scrutinise it further on Report. I shall therefore not move the amendment.

[Amendment No. 265A not moved.]

[Amendment No. 265B not moved.]

Baroness Hooper moved Amendment No. 266: Page 126, line 20 after ("authority") insert— ("(ii) to determine the duties to be performed by members of the staff (including, in the case of part-time staff, their hours of work) and the grading (according to the scale of grades currently applicable in relation to employment with the authority) of both full-time and part-time posts at the institution; and (iii) to exercise any discretion of the authority with respect to the remuneration to be paid to any person appointed by the authority in accordance with paragraph (b) below.").

On Question, amendment agreed to.

[Amendment No. 266A not moved.]

Baroness Hooper moved Amendment No. 267: Page 126, line 22, at end insert ("on such terms, in the case of each appointment, as to give effect, so far as relates to any matter which by virtue of paragraph (a)(ii) or (iii) above falls to be decided by the governing body, to any decisions of the governing body in relation to any such matters which are applicable in relation to that appointment. (3A) For the purposes of subsection (3)(a)(iii) above, the authority are to be regarded as having a discretion with respect to the remuneration to be paid to a person appointed to a post at any such institution if any provisions regulating the rates of remuneration or allowances payable to persons in the authority's employment either—

1. (a) do not apply in relation to that appointment; or
2. (b) leave to the authority any degree of discretion with respect to rate or remuneration or allowances in the case of that appointment.").

On Question, amendment agreed to.

[Amendments Nos. 267A to 267D not moved.]

Clause 130, as amended, agreed to.

Clauses 131 and 132 agreed to.

Clause 133 [Provision required in instrument and articles of government]:

[Amendments Nos. 267E to 268ZB not moved.]

Clause 133 agreed to.

Clauses 134 to 136 agreed to.

Clause 137 [Variation of trust deeds, etc.]:

Baroness Hooper moved Amendment No. 268ZC: Page 134, line 43, leave out from ("institution") to end of line 46 and insert ("becomes an institution within the PCFC funding sector or a grant-aided institution, have effect as if the event referred to were the institution's ceasing to be a publicly funded institution.")

The noble Baroness said: This is a tidying-up amendment. I beg to move.

On Question, amendment agreed to.

Baroness Hooper moved Amendment No. 268ZD: Page 135, line 7, at end insert— ("(5A) In that subsection "publicly funded institution" means an institution which is an institution of any one or more of the following descriptions, that is to say—

1. (a) an institution maintained or assisted by a local education authority;
2. (b) an institution within PCFC funding sector; and
3. (c) a grant-aided institution.").

On Question, amendment agreed to.

Clause 137, as amended, agreed to.

Clauses 138 and 139 agreed to.

Clause 140 [Interpretation of Part II]:

Lord Flowers moved Amendment No. 268ZE: Page 136, line 13, after ("Act") insert ("excluding sections 115 and 117").

The noble Lord said: I shall not detain the Committee long. This is a purely technical amendment introduced for purposes of clarification. It concerns the application of Schedule 7, which determines the full-time equivalent in relevant numbers of institutions which accept part-time students. I understand that this schedule was deemed necessary in order to determine the funding arrangements at polytechnics and colleges and further and higher education institutions maintained by local authorities. The schedule was not intended to apply to universities or to the operations of the Universities Funding Council. I have with me a copy of a letter from a senior official of the Department of Education and Science to the Master of Birkbeck College making that point quite explicitly.

Unfortunately, the schedule uses more than once the phrase "any educational institution", and the interpretation clause, Clause 140, uses the phrase "any institution". The result is that it appears to apply to universities after all. The difficulty is easily resolved by making it clear that Schedule 7 does not apply to institutions which in future will be funded by the Universities Funding Council. That is the sole purpose of my amendment. I beg to move.

The Lord Chancellor

I believe that there is some misunderstanding about the significance of the mode of attendance weightings in Schedule 7 to the Bill. I should like to try to put the true position on record.

Schedule 7 has an important but very limited role. The formula it contains for calculating full-time equivalent student numbers is used in the Bill for just two purposes: first, to determine which institutions qualify for the PCFC-funded sector; and, secondly, to determine which LEA-maintained colleges are required to receive financial delegation. Those provisions are activated by the numbers of full-time equivalent students, so clearly the Bill must spell out somewhere what is meant by the term full-time equivalent enrolment numbers where it is used in Part II of the Bill.

That is the purpose of Schedule 7 and it has no effect beyond that. The schedule certainly has no influence on decisions about the provision and funding of full-time and part-time courses in any particular university or college. There is nothing in Clauses 115 or 117—or in Schedule 6—which imposes an obligation on the UFC to exercise its powers by reference to full-time equivalent enrolment numbers as defined in Schedule 7.

It is a duty of that kind that would bring Schedule 7 into the UFC' s ambit, if that were the intention. Consequently, I see no need for the amendment and I hope that the noble Lord will agree that no amendment is required to produce that effect. I know that it is a late hour at which to ask him to do so, and maybe we both should look at the matter again. However, it is my understanding that the issue does not come into the obligations of the UFC and that the concern is misplaced.

Lord Flowers

I am grateful to the noble and learned Lord for the assurance that Schedule 7 does not apply to universities and therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 140 agreed to.

Schedule 7 agreed to.

Viscount Davidson

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at twenty-one minutes before two o'clock.